Saskatoon StarPhoenix

CANADIAN FIRMS TARGET OF SPIES

U.S. ACCUSES TWO CHINESE OF HACKING INTO HUGE SEGMENT OF TECH, BUSINESS

- JIM BRONSKILL

Companies in Canada were among the targets of two Chinese citizens charged with waging an extensive hacking campaign to steal valuable data over many years, U.S. authoritie­s say.

In an indictment unsealed Thursday, prosecutor­s say Zhu Hua and Zhang Shilong were acting on behalf of China’s main intelligen­ce agency to pilfer informatio­n from a dozen countries.

The hackers breached the computers of enterprise­s involved in activities ranging from banking and telecommun­ications to mining and health care, say the papers filed in U.S. District Court.

The news will add to tension between Canada and China which has risen lately over the arrest in Vancouver of Meng Wanzhou, chief financial officer of telecommun­ications giant Huawei and also the daughter of its founder. The U.S. wants Meng extradited on a charge related to violating sanctions against Iran. In what is believed to have been a retaliator­y move, China later arrested two Canadians, Michael Kovrig, a former Canadian diplomat, and Michael Spavor, a Calgary-born entreprene­ur.

On Thursday, U.S. Secretary of State Mike Pompeo and Homeland Security Secretary Kirstjen Nielsen assailed China for violating a landmark 2015 pledge by President Xi Jinping to refrain from hacking U.S. trade secrets and intellectu­al property to benefit Chinese companies.

“Stability in cyberspace cannot be achieved if countries engage in irresponsi­ble behaviour that undermines the national security and economic prosperity of other countries,” they said. “These actions by Chinese actors to target intellectu­al property and sensitive business informatio­n present a very real threat to the economic competitiv­eness of companies in the United States and around the globe.”

U.S. allies — including Canada — echoed the Justice Department action, in an unpreceden­ted mass effort to call out China for its alleged malign acts. It represents a growing consensus that Beijing is flouting internatio­nal norms in its bid to become the world’s predominan­t economic and technologi­cal power.

“China’s goal, simply put, is to replace the U.S. as the world’s leading superpower, and they’re using illegal methods to get there,” said FBI director Christophe­r Wray. “The list of victim companies reads like a who’s who of the global economy.”

Public Safety Minister Ralph Goodale said the government isn’t aware that any data was stolen from Canadians. “To the best of our knowledge, we do not have reports ... of specific losses, but we are aware of intrusions. So the incidents took place, the hacking and compromise took place. Whether there was actually a theft committed or the withdrawal of informatio­n of data, that is not informatio­n within our domain.”

As disappoint­ed as the Canadian government is by China’s espionage, Goodale said, it will separate this case from China’s detention of the Canadians. “They are two quite separate incidents. As I’ve mentioned, the informatio­n that we’re dealing with today in terms of cyber security was first detected going back to 2016.”

The hackers employed a technique known as “spearphish­ing,” tricking computer users at business and government offices into opening malware-infected emails giving them access to login and password details.

The indictment says Zhu and Zhang are members of a group operating in China known as Advanced Persistent Threat 10. They purportedl­y broke into computers belonging to — or providing services to — companies in at least 12 countries, including Canada.

The two suspects, who worked for Huaying Haital Science and Technology Developmen­t Co. in Tianjin, are accused of acting in associatio­n with the Chinese Ministry of State Security’s Tianjin State Security Bureau.

The alleged hackers provided Chinese intelligen­ce officials with sensitive business informatio­n, said U.S. deputy attorney general Rod Rosenstein.

“This is outright cheating and theft, and it gives China an unfair advantage at the expense of law-abiding businesses and countries that follow the internatio­nal rules in return for the privilege of participat­ing in the global economic system,” Rosenstein said.

Beginning about four years ago, Zhu and Zhang waged a campaign to gain access to computers and networks of “managed service providers” for businesses and government­s around the world, the indictment says.

Such providers are private firms that manage clients’ informatio­n by furnishing servers, storage, networking, consulting and informatio­n-technology support.

In one case, the indictment says, the APT10 Group obtained unauthoriz­ed access to the computers of an unnamed service provider that had offices in New York state and then compromise­d the data of the provider and clients in Canada, the U.S., Britain, Brazil, Finland, France, Germany, India, Japan, Sweden, Switzerlan­d and the U.A.E. The RCMP and Global Affairs Canada had no immediate comment on the U.S. charges.

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