Washington's Secret Weapon Against Chinese Hackers

Applying the Lessons of Counterterrorism and Counterproliferation in Cyberspace

(Kacper Pempel / Courtesy Reuters)

“The tide of war is receding,” U.S. President Barack Obama proclaimed in October 2011, announcing the impending conclusion of the war in Iraq. In the year and a half since, however, the tide of a new type of conflict has been rising -- one that takes place not on land, in the air, or at sea but in cyberspace. Indeed, in the past several months, the Obama administration has called a great deal of attention to the threat posed by cyberattacks and cybertheft, the most ominous source of which appears to be China. Early last month, the national security adviser, Tom Donilon, said that the cybertheft of confidential information and technology from American businesses has been “emanating from China on an unprecedented scale,” and General Keith Alexander, the director of the National Security Agency, has previously called such theft “the greatest transfer of wealth in history.”

If recent announcements are any indication, the Obama administration has heightened its focus on cybersecurity threats. In February, the White House published an executive order directed at improving the cybersecurity of the country’s critical infrastructure. That same month, it also unveiled a new strategy for preventing the theft of U.S. trade secrets. One potentially crucial tool, however, has been largely absent from the discussion of how the United States should address cyberthreats: targeted financial sanctions. Given the success of targeted financial sanctions in other contexts -- namely, counterterrorism and efforts to stem nuclear proliferation -- the Obama administration should establish a process for imposing them on individuals and entities that engage in pernicious cyberactivity.

For a number of reasons, targeted sanctions are particularly well suited to address the threats posed by cyberattacks and cybertheft, and they could form an important part of a larger strategy to mitigate the problem. First, for attacks undertaken by states or their proxies, sanctions could serve as a deterrent against future illicit behavior. This is because states, concerned for their reputations, have an interest

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