US mulls over sanctions on China and Russia for cyber attacks

The US is weighing sanctions on individuals and firms for cyber attacks, reports say. Speculation could indeed come in handy, as it gives the White House leverage ahead of a state visit by Chinese President Xi Jinping.

Sanctioning Chinese and Russian companies and individuals for their role in cyber attacks would be the first-time use of an executive order signed by US President Barack Obama in April aimed at hitting back at those who are "engaging in significant malicious cyber-enabled activities."

The White House was not prepared to answer questions on the matter, but did provide a transcript of statements by Press Secretary Josh Earnest pointing out it would be "strategically unwise" to discuss economic sanctions before officially announcing them.

"It would only allow those who could be the potential targets of economic sanctions to begin to take steps to evade that sanctions activity," the statement reads.

The US has accused five Chinese military officials of hacking into American companies to steal trade secrets

"We've previously indicated our concerns [about] China's activity in cyberspace. These are concerns that the president has raised directly with his Chinese counterpart in the past. Certainly ,the announcement by the Department of Justice last year to indict five Chinese military officials for their actions in cyberspace should be an indication that we take these concerns very seriously," the statement went on to say.

Another reason the White House does not want to tip its hand is the upcoming state visit by Chinese President Xi Jinping at the end of this month. Mulling over sanctions could also work as leverage in talks about cyber security with China, says James Lewis, a cyber security expert at the Center for Strategic and International Studies based in Washington, D.C.

"Some people say you can see sanctions next week," he told DW. "But it might be smarter to wait until the [Obama-Xi] summit and use it as something you can negotiate with the Chinese."

Will they or won't they?

Was this move purely intended as a threat to help spur negotiations, or is the US going to push for those sanctions to make a point? "They've leaked too much for them to not do something," Lewis said. "The question is when do they do it and who do they do it against?"

The US government is eager to put an end to a string of embarrassing cyber attacks, including a hack of the White House Office of Personnel Management which stores data about government officials. The US has suspected the attack was linked to China, which denied any involvement. Last week, White House national security adviser Susan Rice was sent to Beijing for talks to help ease tensions over cyber attacks and other issues. Republican presidential candidates, meanwhile, have called on Obama to cancel Xi's visit altogether.

Obama and Xi are due to meet again at the end of September to discuss cyber security, among other issues

"The US did an internal review of economic espionage and found that China does as much as the entire rest of the world combined when it comes to economic espionage," said Lewis. And US authorities were able to pinpoint individuals and companies involved in cyber attacks as they did when they indicted five Chinese military officials last year, he added.

There have been a number of prominent hacks in recent months, for instance the attack on Sony Pictures in November last year. "And the White House was very concerned to send a clear message that this kind of action would not be tolerated," Lewis said.

"The Chinese have largely ignored the US. We've had discussions with them now on this topic for six years. And in six years they have done very little."

The waiting game

Since there hasn't been an official statement by the US authorities yet, China and Russia have kept quiet as well. "The Chinese seem to be waiting to see 'Will the US actually go through with it, will they do it before the summit?' Lewis said. "Russians are also in a wait-and-see mode. There's so many problems in the relationship with Russia that this is by far not the biggest."

"I think the most damaging thing would be to do the sanctions before the summit. That I think would upset the Chinese the most."