HR 2281 Introduced – Cyber Espionage

As I noted last week, Rep. Rogers (R,MI), Chairman of the House Intelligence Committee, introduced HR 2281, the Cyber Economic Espionage Accountability Act. This bill would require the President to develop and maintain a list of foreign individuals that are responsible for conducting intellectual property theft via cyber means. This list would be similar in operation to the lists of leaders of known terrorist groups or lists of leaders of the international drug cartels. Placement on the list would also require enactment of economic sanctions against the listed indivuals.

Definition of the Problem

Section 2 of the bill provides a list of  ‘findings’ that outline the extent of the problems associated with economic espionage and intellectual property theft perpetrated via the Internet. Interestingly while these findings list unnamed ‘Chinese actors’ (without even suggesting a potential link to the government) as the largest threat, they specifically identify ‘Russian intelligence services’ as another major cyber-espionage threat.

Cyber Espionage List

Section 3 of the bill requires the President to provide to Congress a list of “officials of a foreign government or persons acting on behalf of a foreign government” {§3(a)} that are either responsible for cyber espionage of intellectual property or acted as an agent of such officials. The list will be published in unclassified form. A classified annex may be added where the public identification of such persons would conflict with the vital “the national security interests of the United States” {3(c)(2)(A)}. As with similar terrorism or drug related lists, the unclassified version of this list would be required to be published in the Federal Register.

Interestingly, there are no provisions in this section that would prohibit the President from including US citizens on the list, as long as he found that they were acting “as an agent of or on behalf of official of a foreign government”{§3(a)(2)}.

Sanctions

Section 4 of the bill would require the Secretary of State to establish regulations that would prohibit the issuance of visas, or the cancellation of already issued visas, for personnel included on the list required by §3(a).

Section 5 provides for economic sanctions against persons placed on the list required in §3(a). This section allows the President “to freeze and prohibit all transactions in all property and interests in property of a person who is on the list” {§5(a)(1)}. Such sanctions would be exercised under authority of the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) without requiring the President to declare a national emergency.

Section 5(c)(2) would require the Secretary of the Treasury to develop regulations to enforce such economic sanctions and the stiff penalties (civil fines of up to $250,000 or criminal fines $1 million or 20 years in jail) of §1705 could be applied to violations of those regulations.

Miscellaneous Provisions

Section 6 of the bill would require the obligatory reports to Congress including an annual report of the number of people on the list and changes made to the list in the previous year. This requirement seems kind of redundant when the President is required to specifically notify Congress whenever someone is placed on or removed from the list.

Section 7 of the bill provides the standard list of definition of terms used in the bill. The most critical term ‘cyber espionage of intellectual property’ is not, however, included in the list of definitions. Nor is there a standard of proof established in the legislation that must be met before someone is placed upon the list.

Moving Forward

While this bill was introduced by the Chairman of the House Intelligence Committee, it was not referred to that Committee for action. Instead the bill would have to be processed by the Committees on Foreign Affairs, the Judiciary, and Financial Services. It will be interesting to see if these committees take action on this bill or come up with their own competing versions. I would not be surprised to see a distinct lack of action on the bill.

If this bill (or its Senate counterpart S 1111, which has yet to be published) ever makes it to a floor vote, it would almost certainly pass with substantially bipartisan support. Whether or not it ever gets that far is a completely different story.