Sanctions For Russia

WASHINGTON — The Obama administration imposed a sweeping package of sanctions Thursday against Russian officials and entities for “malicious cyber activity and harassment,” charging them with interfering in the U.S. presidential election.

Nine entities and individuals were sanctioned and 35 Russian government officials were expelled from the U.S. amid what U.S. officials said was also part of a longer-term pattern of attacks on critical U.S. infrastructure and harassment of U.S. diplomats.

In a parallel action, the Treasury Department also revealed Thursday that Russian individuals conducted cyber attacks on U.S. financial institutions, Fortune 500 firms, universities and government agencies, stealing a combined $100 million.

The move by the U.S. comes at the end of Obama’s presidency just days before President-elect Donald Trump is set to be sworn into office on Jan. 20.

U.S. intelligence officials reportedly believe the hacking of the Democratic National Committee and other U.S. political entities and e-mail accounts by Russia was aimed at hurting Democratic presidential candidate Hillary Clinton and subsequently helping Trump win the presidency.

Trump, who has expressed doubt about the accuracy of the U.S. intelligence findings of Russia’s interference in the U.S. election, will now be faced with having to decide whether to repeal the sanctions on Russia’s intelligence agencies. But he could also run into opposition from Congressional Republicans, many of whom supported the actions taken by Obama.

The sanctions against nine Russian entities and individuals have far-reaching foreign policy implications and ratcheted up the tensions between the U.S. and Russia.

While the sanctions did not directly affect the fashion industry, U.S. brands and retailers that export to Russia or have investments in the country are watching the rising political tensions.

The U.S. has not indicated trade sanctions as a possible deterrent to date, but companies are concerned that Russia might retaliate and target specific U.S. industries’ exports.

It’s not the first time Obama has sanctioned Russia. He imposed a series of sanctions on Russian government officials and entities in 2014 following Russia’s annexation of Crimea from the Ukraine and the industry was on high alert at that time.

Russian authorities, who have denied interfering in the U.S. election, have warned they would retaliate if the U.S. imposed sanctions.

“All Americans should be alarmed by Russia’s actions,” President Obama said. “In October, my administration publicized our assessment that Russia took actions intended to interfere with the U.S. election process. These data theft and disclosure activities could only have been directed by the highest levels of the Russian government.”

“Moreover, our diplomats have experienced an unacceptable level of harassment in Moscow by Russian security services and police over the last year.  Such activities have consequences.”

Through a new executive order, Obama expanded authority for responding to certain cyber attacks that interfere with or undermine the U.S. election process and its institutions. Under the new authority, the administration sanctioned nine entities and individuals.

Two key Russian intelligence agencies were sanctioned — The Main Intelligence Directorate and the Federal Security Service. In addition, four individual officers of the GRU and three companies that the administration said provided material support to the GRU’s cyber operations were sanctioned.

Thirty-five Russian intelligence operatives were declared “persona non grata” and forced to leave the U.S. within 72 hours.

The administration also revealed economic cyber attacks were carried out separately by Russian individuals.

The Treasury Department designated two Russian individuals for using cyber attacks related to the “significant misappropriation of funds or economic resources, trade secrets, personal identifiers, or financial information for private financial gain.”

Evgeniy Mikhailovich Bogachev and his criminal associates were charged the theft of over $100 million from U.S. financial institutions, Fortune 500 firms, universities, and government agencies, according to Treasury.

Treasury officials charged Bogachev with developing and using the Zeus malware as well as managing and selling it to other criminals. He is also accused of being directly responsible for the development of Cryptolocker, a form of ransomware, which is “known to have held over 120,000 U.S. victims’ data hostage for financial gain.”

Aleksey Alekseyevich Belan was charged with compromising the computer networks of at least three major U.S.-based e-commerce companies.

“Belan used his unauthorized access on the e-commerce company networks to steal user data, including e-mail addresses, customer names and encrypted passwords, belonging to approximately 200 million accounts worldwide,” according to Treasury.

Any property or interests in property of the two Russians within U.S. jurisdiction will be blocked and U.S. citizens are prohibited from engaging in transactions with them.

“The integrity and stability of our electronic systems are of utmost importance to our national security and we will hold accountable those who seek to compromise or tamper with those systems,” said Treasury Secretary Jacob J. Lew. “Treasury will use all of its financial tools as part of the U.S. government’s effort to counter those who engage in malicious cyber activities against our financial system or our national institutions.”

The State Department is also shutting down two Russian compounds in Maryland and New York, that are used by Russian officials for intelligence-related purposes. The Department of Homeland Security and the Federal Bureau of Investigation released declassified technical information on Russian civilian and military intelligence service cyber activity, to “help network defenders in the United States and abroad identify, detect, and disrupt Russia’s global campaign of malicious cyber activities.”

“These actions are not the sum total of our response to Russia’s aggressive activities,” Obama said. “We will continue to take a variety of actions at a time and place of our choosing, some of which will not be publicized.”

Obama plans to release a report to Congress in January on Russia’s efforts, which he said “undermine established international norms of behavior, and interfere with democratic governance.”

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