MS Risk Blog

Chinese Cyber Espionage Against the U.S. Non-State

Allegations of Chinese cyber attacks on U.S. interests, both state and non-state are not new phenomena. Each red dot in the above map shows a successful alleged Chinese attempt between 2010 and 2014 to steal U.S. corporate and military data. Some of the U.S. victims of these attacks have been Google, Lockheed Matin, the U.S. government and the U.S. miitary. Over 600 dots are peppered across the U.S. industrial centers in the northeast and the west coast as well as other places in the country. Nearly 50 cyber attacks have occurred in California alone. Some examples of the kind of data the U.S. has lost to cyber espionage have been specificiations of hybrid cars, formulas for pharmaceutical products, data on critical U.S. infrastructure such as electrical power, telecommunications and internet backbone, and details including U.S. military and civilian air traffic controls systems.

As cyber espionage has been a persistent threat to U.S. enterprises, perhaps, looking at the problem in monetary terms could provide an easily understandable perspective on the magnitude of the matter. Studies show that cyber crime will be a $2.1 trillion dollar problem by 2019. Also, the U.S. dependence on global supply chain and business outsourcing leaves it highly vulnerable to cyber attacks. In 2014, cyber attacks, alone, have cost on average the following to U.S. companies:

• $8.6 million per company in U.S. retail;
• $20.8 million per company in U.S. financial services;
• $ 14.5 million per company in U.S. technology sector
• $12.7 million per company in U.S. communications industry

While this may already look bad enough for U.S. businesses, what could make it worse is the new Chinese cyber security law, which will be effective in June 2017. In the midst of some degrees of ambiguity in the law, the following surface as critical concerns for the U.S. enterprises operatiing in China:

• The law requires that the Chinese government investigators be given full access to companies’ data if wrong-doing is suspected;
• The law requires that business information and data on Chinese citizens be kept in domestic servers and cannot be transferred overseas without prior permission;

Some analysts judge that foreign companies being required to store data in domestic servers leave potentials for the Chinese local industries to gain competitive advantage over their foreign rivals. Although the U.S. and China have struck up a cyber security agreement that forbids theft of intellectual property and economic espionage, analysts cannot entirely dismiss the possibility that the U.S. military will continue to be an attractive target of Chinese cyber espionage.

North Korean Leader’s Half-Brother Mysteriously Killed in Malaysia

Officials announced on 15 February that a female suspect has been arrested in Malaysia in connection with the death of North Korean leader Kim Jong-un’s half-brother.

Quoting police, Malaysian newspaper reports indicate that Kim Jong-name was attacked on 13 February morning while waiting at the budget terminal of Kuala Lumpur International Airport for a 10:00 flight to Macau. Exactly how the attack unfolded remains unclear, however officials and witnesses have variously said that he was splashed with a chemical or had a cloth placed over his face. Earlier reports spoke of a “spray” being used or a needle. He died on route to the hospital.

Local police have disclosed that the woman was arrested at the airport in the capital Kuala Lumpur, where Kim Jong-nam was targeted in an apparent poisoning on 13 February. She was in possession of a Vietnamese travel document. Malaysian police have disclosed that the arrested suspect, who was alone, was identified from CCTV footage taken at the airport. They have named her as Doan Thi Huong, 28, adding that they are looking for “a few” other suspects.

South Korean media have widely reported that two women, said to be North Korean agents, were involved and fled the airport in a taxi. Malaysian police however have not confirmed these details. A grain image broadcast in South Korea and Malaysia depicts a woman wearing a white t-shirt with the letters “LOL” written on the front.

Malaysia has also yet to formally confirm that the dead man is Kim Jong-nam, as he was travelling under a different name – Kim Chol. However the South Korean government has said that it is certain that it is him. Furthermore, the country’s spy agency is said to have told lawmakers that they believe Mr Kim was poisoned. South Korean spy chief Lee Byung-ho told South Korean MPs that Pyongyang had wanted to kill Kim Jong-nam for several years, but that he was being protected by China. Unnamed US government sources have also disclosed that they believe he was poisoned by North Korean agents. Some analysts however are questioning what motive Kim Jong-un would have to kill his estranged half-brother, given the risk of the operation and possibilities for embarrassment, and the fact that he was not seen as a threat to Mr Kim’s leadership. However it has been reported that Mr Kim was reportedly targeted for assassination in the past. In 2012, a North Korean spy was jailed in South Korea. He is said to have admitted to trying to organize a hit-and-run accident targeting Kim Jong-un. North Korea has also had a long history of sending agents overseas to carry out assassinations, attacks and kidnappings.

If it is confirmed that this was the North Korean leader’s half-brother, then it would be the most high-profile death linked to North Korea since Kim Jong-un’s uncle, Chang Song-thaek, who was executed in 2013. While North Korea has not commented on the death, officials from the country’s Malaysian embassy have been visiting the hospital in Kuala Lumpur where Mr Kim’s body has been taken.

Who is Kim Jong-nam?

This is not the first time that Mr Kim has travelled under an assumed identify: he was caught in 2001 trying to enter Japan using a fake passport. At the time, he told officials that he had been planning to visit Tokyo Disneyland. That incidents is thought by some analysts to have spoilt Kim Jong-nam’s chances of succeeding his father, Kim Jong-Il, who died in 2011.

After being bypassed in favor of his youngest half-brother for succession, Kim Jon-nam kept a low profile, spending most of his time overseas in Macau, mainland China and Singapore. He later spoke out against his family’s dynastic control of North Korea and in a book in 2012, he was quoted as stating that he believed his younger half-brother lacked leadership qualities. He however had said that he was not interested in assuming the leadership himself.

Somalia Elects New President

On 8 February, Mohamed Abdullahi Farmajo was elected Somali’s new president, in the second presidential election to take place in the Horn of Africa nation since 1991. The election was held amidst tight security due to ongoing security threats by al-Shabaab.

Below is a timeline of developments over the past 25 years in the war-torn country:

President Barre deposed, chaos ensues

• In January 1991, President Mohamed Siad Barre, who had been in power since 1969, is deposed by rebels and flees the country. The rebel alliance soon falls apart and clan-based fighting breaks out later that year.
• From December 1992 to 1995, the international community intervenes with 38,000 troops in a bid to end a major famine and restore peace. The United Nations’ mission however ends in failure with the deaths of eighteen American soldiers.

New Government Barred from Mogadishu

• In 2005, a new government formed the previous year after protracted talks in neighbouring Kenya enters the country, however it cannot reach the capital, Mogadishu, which is under the control of warlords. The authorities opt to set up their headquarters in Baidoa, which is located west of the capital.
• In 2006, the Islamic Court movements, which is accused by the United States of harbouring al-Qaeda extremists, captures Mogadishu after heavy fighting.

Al-Shabaab Emerges and Joins al-Qaeda

• In December 2006, Ethiopia, with Washington’s support, invades Somalia. Al-Shabaab, the Islamic Courts’ armed wing, emerges to stage a bloody insurgency in the capital and in the southern region of the country.
• In 2007, an African Union (AU) force is deployed in Mogadishu to back up a transitional federal government, which comes to the capital.
• Ethiopia withdrawals from Somalia in 2009, however just days later, al-Shabaab seizes control of Baidoa while the United Nations holds talks in Djibouti with the entire Somali parliament. Islamist leader Sheikh Sharif Sheikh Ahmed becomes president of a transitional administration.
• In 2010, al-Shabaab proclaims its allegiance to al-Qaeda and claims responsibility for a double attack, which kills 76 people in Kampala. The attack is in retaliation for Uganda’s participation in the AU force in Somalia.
• Au troop drive al-Shabaab militants out of the capital city in August 2011 however the militants continue to control rural areas and launched a number of attacks in the capital city.
• In October 2011, an al-Shabaab suicide bombing targeting a ministry in Mogadishu kills 82 people. Later that month, Kenyan troops cross the border into southern Somali, while Ethiopian forces arrive in November.
• Al-Shabaab targets the Westgate Mall in Nairobi, Kenya on 21 September 2013, where at lest 67 people are killed and around twenty go missing. The group states that the attack is in retaliation for Kenya’s military intervention in Somalia.
• In April 2015, another al-Shabaab attack kills 148 people at the university in Garissa, eastern Kenya. Kenya continues to see a number of attacks, particularly in the border regions with Somalia.

Parliamentary and Presidential Elections

• A new Somali parliament is sworn in on 20 August 2012 following the adoption of a provisional constitution.
• The new parliament, which is comprised of deputies nominated by 135 clan elders, elects Hassan Sheikh Mohamud as president on 10 September. It is the first presidential election to take place in Somalia since Barre was deposed in 1991.
• From October to December 2016, around 14,000 clan-based delegate electors – from a total population of 12 million – vote in a second parliamentary election.
• On 27 December 2016, a new batch of 275 Somali deputies take the oat of office.
• On 8 February 2017, former premier Farmajo is elected president after incumbent Mohamud admits defeat in a second round of voting by lawmakers.

French Presidential Election: Macron Seen Beating Le Pen According to Latest Poll

According to an opinion poll that was published on 6 February, French far-right leader Marine Le Pen and independent centrist Emmanuel Macron are set to make it through to the presidential election’s second round in May, with Macron comfortably winning the runoff.

The IFOP rolling poll of voting intentions indicated Le Pen garnering 25.5 percent of the vote in the 23 April first round of voting, up 1.5 percent since 1 February, with Macron getting 20.5 percent, up 0.5 percent over the same period. Conservative candidate Francois Fillon, who is in the midst of a political scandal, placed third with 18.5 percent, down from 21 percent. Socialist candidate Benoit Hamon has also lost momentum since his nomination in a primary vote and was not seen gathering 15.5 percent of the votes, down from 18 percent on 1 February.

On Monday, Fillon vowed to fight on for the presidency despite a damaging scandal involving taxpayer-funding payments to his wife for work, which a newspaper alleges she did not do. Speaking at a news conference in Paris, Mr Fillon, 62, apologised for what he said was his error of judgement regarding the employment of family members. While he disclosed that his wife’s work as parliamentary assistant over fifteen years had been genuine and legal, he noted that the campaign of “unfounded allegations” against him and his family would not make him abandon his bid for the presidency as the nominee of the centre-right. He stated, “there is no plan B,” dismissing reports that other centre-right candidates were being lined up to replace him, and adding “I am the only candidate who can bring about a national recovery. I am the candidate of the Right and I am here to win.” He announced that he would launch a new phase of his campaign from Tuesday. Mr Fillon, a former prime minister, called the news conference after members of his own party, The Republicans, urged him to quit the race to give the party time to find a replacement candidate. He will hop that his apology and denial of wrongdoing rally the party and voters behind him. Prior to the scandal surfacing in a weekly satirical newspaper nearly two weeks ago, opinion polls had shown Mr Fillon to be the clear favourite to win the election over Le Pen. Since then, his approval ratings have plummeted and he is now seen as failing to reach the second round of voting in May.

The stakes are high for France’s Right, which is battling to return to power after five years of Socialist rule under President Francois Hollande.

Colombia and ELN Begin Peace Negotiations

Last week, members of Colombia’s ELN left-wing rebel group and government negotiators began talks seeking to end more than five decades of conflict.

The negotiations were launched at a ceremony in the capital of Ecuador, Quito, where the talks will be held. Ecuador is hosting the first round of negotiations, with Brazil, Chile, Cuba, Norway and Venezuela acting as guarantors.   The chief ELN negotiator, Pablo Beltran, has urged both sides to rally around the points that united them and to leave aside their differences.   He further called on the rebels to officially suspend its kidnapping policy during the negotiations. The ELN relies on the ransom obtained from kidnappings to finance its activities. Mr Beltran disclosed that peace would not be achieved through more repression, adding “we need a political solution. We are willing to take responsibility for the mistakes we have made but we expect the other side to do the same.

The top government representative, Juan Camilo Restrepo, meanwhile disclosed that he expected to draw from the lessons of the negotiations with the FARC in order to reach a peace accord with the ELN. Both officials however agreed that this is a once-in-a-generation opportunity for the country to achieve peace.

The ELN, or National Liberation Army, is Colombia’s second largest rebel group.   It was founded in 1964 with the stated aim of fighting Colombia’s unequal distribution of land and riches, which was inspired by the Cuban revolution of 1959.   The talks were initially due to begin at the end of October last year however they were delayed as the Colombian government refused to sit down for formal negotiations while the rebels still held Odin Sanchez, a former congressman. Mr Sanchez was released on 2 February 2017 while on 6 February, the group released a solider it had been holding hostage for two weeks. The soldier, Freddy Moreno, was handed over to delegates from the International Committee of the Red Cross (ICRC) in Arauca province.

The talks come just months after the Colombian government signed a peace agreement with Colombia’s largest rebel group, the FARC. In November 2016, the Colombian government signed a revised peace agreement with the country’s largest group, the FARC, after four years of negotiations in the Cuban capital, Havana. Members of the FARC have ben gathering in “transition zones,” where they are to demobilise and lay down their weapons under the supervision of United Nations monitors. According to government officials, the last of the FARC rebels are expected to reach the designated debilitation areas by 15 February.