Obama targets foreign hackers and state-owned companies over cyber-attacks

Excutive order creates sanctions that could potentially penalize companies in China and Russia that benefit from hacks in attempt to curtail rising threat

President Obama on Wednesday created the first-ever sanctions program to penalize overseas hackers who engage in cyber-spying and companies that knowingly benefit from the fruits of that espionage, potentially including state-owned corporations in Russia and China

"Cyber threats pose one of the most serious economic and national security challenges to the United States," Obama said in a statement after signing an executive order creating the sanctions

The order was the latest attempt by his administration to come up with options short of direct retaliation to deal with a growing cyber threat from both nations and criminal groups. It gives the US the authority to sanction individuals and companies, though no special penalties were announced. Obama said the sanctions would apply to those engaged in malicious cyber activity that aims to harm critical infrastructure, damage computer systems and steal trade secrets or sensitive information.

In a fact sheet, the White House said the sanctions would also apply to "a corporation that knowingly profits from stolen trade secrets". Analysts have long suspected that state-complicit in economic cyber espionage that targets the intellectual property of western companies

The announcement follows the Obama administration's allegations that North Korea was behind last year's cyber-attack on Sony Pictures. Major US companies, including Target and Home Depot, have also been the target of hacking that put consumer information at risk. The US government says hackers based in Russia and China have engaged in widespread pillaging of corporate trade secrets, some of it state-sponsored. The former National Security Agency director Keith Alexander calls it the greatest transfer of wealth in history

The administration has "really thought about how to make this painful to the beneficiaries" of cyber-spying, said James Lewis, a cyber expert with the Center for Strategic and International Studies. "They've gotten away with this for a long time, so making them suffer a little for stealing is a good idea"

The US did sanction several North Korean individuals in retaliation for the Sony hack, but they were not targeted specifically for their role in that incident

In May, the Justice Department issued criminal indictments against five Chinese military hackers it accused of cyber espionage against US corporations for economic advantage. But the hackers are in China and out of reach of the US justice system. Potentially, some of the companies that benefited from their cyber-spying do business in the global economy and therefore could be hurt by US sanctions

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the hackers are in China and out of reach of the US justice system

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the beneficiaries of cyber-spying

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have also been the target of hacking that put consumer information at risk

was behind last year's cyber-attack on Sony Pictures

the announcement follows the Obama administration's allegations

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analysts have long suspected that state-complicit in economic cyber espionage

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ina fact sheet

damage computer systems and steal trade secrets or sensitive information

aims to harm critical infrastructure

would apply to those engaged in malicious cyber activity that aims to harm critical infrastructure

no special penalties were announced

gives the US the authority to sanction individuals and companies

to deal with a growing cyber threat from both nations

to come up with options short of direct retaliation

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after signing an executive order creating the sanctions

said in a statement

pose one of the most serious economic and national security challenges

cyber threats pose one of the most serious economic and national security challenges to the United States

potentially including state-owned corporations in Russia

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created the first-ever sanctions program to penalize overseas hackers

to curtail rising threat

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creates sanctions that could potentially penalize companies in China

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