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1 November 2018

DoJ charges ten Chinese hackers with trade secrets theft

The US Department of Justice (DoJ) has unsealed an indictment against ten Chinese nationals accused of conspiring to steal proprietary information from American and European companies.

According to the charges, which were unsealed on Tuesday, October 30, a Chinese foreign intelligence agency “conspired to steal sensitive commercial technological, aviation, and aerospace data by hacking into computers in the US and abroad”.

The US has alleged that the Jiangsu Province Ministry of State Security (JSSD), an arm of China’s Ministry of State Security (MSS), orchestrated the conspiracy, which was carried out between January 2010 and May 2015.

Ten members of the conspiracy are named in the 21-page document unsealed by the DoJ. They allegedly used the hacks to facilitate “further computer intrusions” into other companies based across the US and Europe, and an Australian domain registrar was also targeted.

“Members of the conspiracy targeted, among other things, data and information related to a turbofan engine used in commercial jetliners,” the DoJ said. The turbofan engine was being developed by a French aerospace manufacturer and a US-based company, but neither company was identified in the document.

A turbofan engine is a modern variation of a gas turbine engine, according to NASA. They have good fuel efficiency and a high thrust

The DoJ said that members of the JSSD hacked into the French company and other organisations which had manufactured parts for the engine, in order to steal sensitive data from them.

This data could “be used by Chinese entities to build the same or similar engine without incurring substantial research and development expenses”, the charges claimed.

During the alleged conspiracy, a Chinese state-owned aerospace company was also working to develop a comparable engine for use in commercial aircrafts.

Adam Braverman, US attorney in the Southern District of California, said: “State-sponsored hacking is a direct threat to our national security. This action is yet another example of criminal efforts by the MSS to facilitate the theft of private data for China’s commercial gain.

“The concerted effort to steal, rather than simply purchase, commercially available products should offend every company that invests talent, energy, and shareholder money into the development of products,” he added.

The charges represent just the latest development in a diplomatic trade spat between the US and China, which dates to at least August 2017 when the Office of the US Trade Representative  launched an investigation into China’s tech transfer and IP practices.

It also comes just one day after the US Department of Commerce announced that it had implemented an export ban against  Fujian Jinhua Integrated Circuit Company, a Chinese manufacturer of integrated circuits, due to national security concerns.

And earlier this month, the DoJ revealed that it had charged an operative from the MSS with economic espionage and stealing trade secrets from US aviation companies. Yanjun Xu was arrested in Belgium and extradited to the US.

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