Category Archives: Cyber War

Hey Secret Service, Check it out While in Singapore

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10 Best Things to Do in Sentosa Island - Best Attractions ... photo

So, while the United States is finding a discreet way to pay for Kim Jung Un’s travel and hotel stay in Singapore on Sentosa Island as North Korea is cash strapped…ah yeah sure, there are some other things going on in Singapore and Malaysia.

Let’s begin a few years ago. Sit back with this article, it is long but perspective and context is required.

Malaysian authorities shutter two North Korean companies ... photo

(Note, it is allegedly closed, or Singapore denies it, but Secret Service check it all out)

(Reuters) – It is in Kuala Lumpur’s “Little India” neighborhood, behind an unmarked door on the second floor of a rundown building, where a military equipment company called Glocom says it has its office.

Glocom is a front company run by North Korean intelligence agents that sells battlefield radio equipment in violation of United Nations sanctions, according to a United Nations report submitted to the Security Council seen by Reuters.

Reuters found that Glocom advertises over 30 radio systems for “military and paramilitary” organizations on its Malaysian website, glocom.com.my.

Glocom’s Malaysian website, which was taken down late last year, listed the Little India address in its contacts section. No one answers the door there and the mailbox outside is stuffed with unopened letters.

In fact, no company by that name exists in Malaysia. But two Malaysian companies controlled by North Korean shareholders and directors(also known as a Nominee Director) registered Glocom’s website in 2009, according to website and company registration documents.

And it does have a business, the unreleased U.N. report says. Last July, an air shipment of North Korean military communications equipment, sent from China and bound for Eritrea, was intercepted in an unnamed country. The seized equipment included 45 boxes of battlefield radios and accessories labeled “Glocom”, short for Global Communications Co.

Glocom is controlled by the Reconnaissance General Bureau, the North Korean intelligence agency tasked with overseas operations and weapons procurement, the report says, citing undisclosed information it obtained.

A spokesman for North Korea’s mission at the U.N. told Reuters he had no information about Glocom.

U.N. resolution 1874, adopted in 2009, expanded the arms embargo against North Korea to include military equipment and all “related materiel”.

But implementation of the sanctions “remains insufficient and highly inconsistent” among member countries, the U.N. report says, and North Korea is using “evasion techniques that are increasing in scale, scope and sophistication.”

Malaysia is one of the few countries in the world which had strong ties with North Korea. Their citizens can travel to each other’s countries without visas. But those ties have begun to sour after North Korean leader Kim Jong Un’s estranged half-brother was murdered at Kuala Lumpur’s international airport on Feb 13.

PAN SYSTEMS

According to the “WHOIS” database, which discloses website ownership, Glocom.com.my was registered in 2009 by an entity called International Global System using the “Little India” address. A similarly named company, International Golden Services is listed as the contact point on Glocom’s website.

Glocom registered a new website, glocom-corp.com, in mid-December, this one showing no Malaysian contacts. Its most recent post is dated January, 2017 and advertises new products, including a remote control system for a precision-guided missile.

Glocom is operated by the Pyongyang branch of a Singapore-based company called Pan Systems, the U.N. report says, citing an invoice and other information it obtained.

Louis Low, managing director of Pan Systems in Singapore said his company used to have an office in Pyongyang from 1996 but officially ended relations with North Korea in 2010 and was no longer in control of any business there.

“They use (the) Pan Systems (name) and say it’s a foreign company, but they operate everything by themselves,” Low told Reuters referring to the North Koreans at the Pyongyang office.

Pan Systems Pyongyang utilized bank accounts, front companies and agents mostly based in China and Malaysia to buy components and sell completed radio systems, the U.N. report says. Pan Systems Pyongyang could not be reached for comment.

One of the directors of Pan Systems Pyongyang is Ryang Su Nyo. According to a source with direct knowledge of her background, Ryang reports to “Liaison Office 519”, a department in the Reconnaissance General Bureau. Ryang is also listed as a shareholder of International Global System, the company that registered Glocom’s website.

Reuters has not been able to contact Ryang.

SMUGGLING CASH

Ryang frequently traveled to Singapore and Malaysia to meet with Pan Systems representatives, the U.N. report says.

On one such trip in February 2014, she and two other North Koreans were detained in Malaysia for attempting to smuggle $450,000 through customs at Kuala Lumpur’s budget airport terminal, two sources with direct knowledge of the situation told Reuters.

The North Korean trio told Malaysian authorities they all worked for Pan Systems and the cash belonged to the North Korean embassy in Kuala Lumpur, according to the two sources.

The Malaysian Attorney General decided not to press charges because of insufficient evidence. A week later, the trio was allowed to travel, and the North Korean embassy claimed the cash, the sources said. All three had passports assigned to government officials, the sources said.

Malaysia’s Customs Department and the Attorney General’s office did not respond to requests for comment over the weekend.

The Pan Systems representative in Kuala Lumpur is a North Korean by the name of Kim Chang Hyok, the U.N. report says.

Kim, who also goes by James Kim, was a founding director of International Golden Services, the company listed in the contacts section of the Glocom website. Kim is director and shareholder of four other companies in Malaysia operating in the fields of IT and trade, according to the Malaysian company registry.

He did not respond to requests for comment by mail or email.

The United Nations panel, which prepared the draft report, asked the Malaysian government if it would expel Kim and freeze the assets of International Golden Services and International Global System to comply with U.N. sanctions. The U.N. did not say when it made the request.

“The panel has yet to receive an answer,” the report said.

Reuters has not received a response from the Malaysian government to repeated requests for comment about Glocom.

POLITICAL CONNECTION

One of Glocom’s early partners in Malaysia was Mustapha Ya’akub, a prominent member of Malaysia’s ruling United Malays National Organisation (UMNO). Since 2014, he has been listed as a director of International Golden Services

As secretary of the UMNO youth wing’s international affairs bureau, Mustapha fostered political connections in the 1990s with countries, such as Iran, Libya and North Korea. Glocom’s Little India address once housed a company owned by UMNO Youth.

Mustapha, 67, said he had been a Glocom business partner “many years back” and said it has been continuously controlled by several North Koreans, including Kim Chang Hyok, whom he said he knew. He did not divulge his role in the company, and denied any knowledge of Glocom’s current business.

“We thought at the time it might be a good idea to go into business together,” Mustapha told Reuters about his first meeting with his North Korean business contacts. He did not say who those contacts were or what they discussed. He denied any knowledge of Glocom’s current business.

Glocom advertises and exhibits its wares without disclosing its North Korean connections.

“Anywhere, Anytime in Battlefield,” reads the slogan on one of several 2017 Glocom catalogs obtained by Reuters.

An advertisement in the September 2012 edition of the Asian Military Review said Glocom develops radios and equipment for “military and paramilitary organizations”.

A spokesman for the magazine confirmed the ad had been bought by Glocom, but said the magazine was unaware of its alleged links to North Korea.

Glocom has exhibited at least three times since 2006 at Malaysia’s biennial arms show, Defence Services Asia (DSA), according to Glocom’s website.

At DSA 2016, Glocom paid 2,000 ringgit ($450) to share a table in the booth of Malaysia’s Integrated Securities Corporation, its director Hassan Masri told Reuters by email.

Hassan said he had nothing to do with Glocom’s equipment and was unaware of its alleged links to North Korea.

Aside from the North Koreans behind Glocom, clues on its website also point to its North Korean origins.

For instance, one undated photo shows a factory worker testing a Glocom radio system. A plaque nearby shows the machine he is using has won a uniquely North Korean award: The Model Machine No. 26 Prize,” named in honor of late leader Kim Jong Il, who is said to have efficiently operated “Lathe No. 26” at the Pyongyang Textile Factory when he was a student.

*** It gets worse.

Executive Summary

In April 2018, Recorded Future published research on the internet browsing behavior of North Korea’s most senior leaders and revealed stark changes in how North Korea’s ruling elite utilize the internet from our original analysis in July 2017. Utilizing a data set spanning from December to mid-April, we compiled a significant amount of information on North Korea’s technology architecture, including which types, manufacturers, and models of hardware and software North Korean leaders used to access the internet.

Our analysis reveals the overwhelming presence of American hardware and software on North Korean networks and in daily use by senior North Korean leaders. We also examined the broad legal regime that restricts U.S. trade with North Korea and discovered that it is insufficient to prevent U.S. electronics, hardware, and software from reaching North Korea.

Key Judgements

  • This failure to keep American technology from reaching North Korea has enabled North Korea’s destabilizing, disruptive, and destructive cyber operations as well as its internet-enabled circumvention of international sanctions.
  • International inconsistency in the definition of the term “luxury goods” has also facilitated the Kim regime’s acquisition of American technology.
  • For seven years, between 2002 and 2017, the United States allowed the exportation of “computer and electronic products” to North Korea, totaling more than $430,000. Our analysis demonstrates that many of the electronic devices North Korean elite utilize are older models or are running older software, and that at least some of those devices could have been legally acquired from the U.S. during these seven years.
  • All U.S. exporters are liable for any violation of the sanctions regime, but beyond the implementation of a robust compliance program, there’s relatively little that can be done to actually stop prohibited goods from reaching sanctioned countries. This is especially true for North Korea, as they have proven to be sophisticated at utilizing intermediaries or spoofing identities.

History of Export Controls Against North Korea

Since the split of North and South Korea following World War II, the United States has regarded the Democratic People’s Republic of Korea (DPRK or North Korea) as an adversary. Despite the lack of open hostilities for nearly 65 years, the U.S. has never normalized diplomatic relations with the “Hermit Kingdom.” From the 1950s to 1980s, North Korea’s status as a Communist government, and sponsorship of international terrorism, ensured that the two countries remained enemies. Then, in 1988, after the bombing of Korean Air Flight 858, North Korea was officially designated as a state sponsor of terrorism by the Reagan administration, inaugurating the modern export control regime against North Korea.

Separately, export control as a response to North Korea’s nuclear proliferation efforts dates back to 1992 when the U.S. imposed sanctions on two North Korean companies due to their missile proliferation activities. Between June 1992 and June 2000, some restrictions were lifted as a result of the U.S.-North Korea bilateral missile talks, but the respite was short lived and the U.S. ratcheted up sanctions from January 2001 through to 2006. This period included the notorious labeling of North Korea as part of the “Axis of Evil” in President Bush’s 2002 State of the Union Address.

In 2006, the first widespread international sanctions began after North Korea carried out its initial nuclear weapons test. This test prompted the UN Security Council (UNSC) to pass two resolutions imposing sanctions on North Korea — first Resolution 1695, and then Resolution 1718. These resolutions together banned a broad range of both imports and exports to North Korea by any UN member states.

While these resolutions initially focused on military materiel, they were supplemented by broader sanctions from the U.S., Australia, and Japan. After North Korea conducted its second underground nuclear test in May 2009, the UNSC adopted Resolution 1874, which further expanded the arms embargo and sought to target Pyongyang’s financial apparata. From 2009 to the present day, both the U.S. and UNSC have progressively strengthened and expanded earlier sanctions with Resolution 2087, 2094, 2270, 2371, 2375, and 2397, which covered everything from missile materiel to textiles and caps on oil trading.

Despite a perceived thaw in diplomatic relations beginning earlier this year, U.S. officials have re-emphasized numerous times that “all sanctions and maximum pressure must remain,” while denuclearization of the Korean peninsula is negotiated.

State of Current U.S. Sanctions Against North Korea

Current United States sanctions against North Korea can be split into two categories:

  1. Sanctions that specifically target North Korea.
  2. Sanctions related to “Weapons of Mass Destruction Proliferators.”

Until 2008, the bulk of U.S. sanctions specific to North Korea were implemented via the Trading With the Enemy Act (1917), which empowers the federal government to prohibit any and all trade with designated countries. On June 26, 2008, the Bush administration issued Executive Order (E.O.) 13466 under the authority of the International Emergency Economic Powers Act. That same year, the National Emergencies Act. E.O. 13466 was supplemented by Executive Orders 13551, 13570, 13687, 13722, and the North Korea Sanctions Regulations (31 C.F.R. part 510). These measures extended a variety of trade restrictions and blocking of interests belonging to various figures in North Korea.

Pre-dating these sanctions, E.O. 13382 was issued in 2005 targeting various entities engaged in WMD proliferation. Three North Korean entities and numerous North Korean persons were listed as blocked entities.

Today, these regulations have culminated in six prohibited categories of transactions involving North Korea:

  1. Blocked property belonging to the state of North Korea and certain North Korean nationals (E.O. 13466, 13551, 13687, 13722, and 13382).
  2. U.S. persons are prohibited from registering vessels in North Korea, flying the DPRK flag, or operating any vessel flagged by North Korea (E.O. 13466).
  3. Goods, services, and technology from North Korea may not be imported into the U.S. (E.O. 13570).
  4. No new investment in North Korea by U.S. persons is allowed (E.O. 13722).
  5. No financing by a U.S. person involving North Korea is allowed (E.O. 13722).
  6. And most importantly for our purposes, goods, services, and technology may not be exported to North Korea from the U.S., or by a U.S. person wherever located, without a license (E.O. 13722).

U.S. export enforcement responsibility falls under three executive branch agencies: the Office of Foreign Asset Control within the Department of Treasury, the Office of Export Enforcement within the Department of Commerce’s Bureau of Industry and Security, and Homeland Security Investigations within the Department of Homeland Security. These three agencies enforce the Executive Orders, U.S. sanctions, International Trafficking in Arms Regulation, Export Administration Regulation, and other laws which make up the body of export control laws in the United States. In 2010, Executive Order 13558 created the Export Enforcement Coordination Center to further strengthen the partnership between these independent agencies.

The United States is one of the only countries which enforces its export laws outside of its national boundaries. Federal agents located in foreign countries work in conjunction with local authorities to conduct end use license checks, knocking on doors to see whether the parties are still upholding their stated exporting intentions.

Currently, civil penalties of up to the greater of $284,582, or twice the amount of the transaction, can be imposed against any party that violates these sanctions. Similarly, upon conviction, criminal penalties of up to $1 million, imprisonment for up to 20 years, or both, may be imposed on any person that willfully violates the sanctions.

North Korea Leverages a Breadth of U.S. Technology Despite Export Controls

North Korea’s Technology Architecture

Numerous third-party data sources used for this analysis gave Recorded Future visibility into what types of devices North Korea’s most senior leadership use to access the global internet. As has been widely publicized over the past several years, Kim Jong Un has been photographed on several occasions with Apple devices, and North Korean-made mobile phones have been assessed as mimicking Apple technology.

While we cannot confirm the actual users behind the activity we see, our analysis indicates that numerous American and Western-manufactured devices are being used by North Korean elite to access the global internet. Several reports and accounts have documented how few North Koreans are granted access to the global internet. At most, only the inner circle of North Korea’s leadership, such as party, military, and intelligence leaders and their families, are allowed to own computers and independently utilize the global internet. This is one of the data points we use to determine with such certainty that North Korea’s ruling elite are the users of this hardware and software.

North Korea’s use of proxies and load balancers limited our ability to identify exactly how many of each device was present, but we can determine some models and versions:

  • Windows 7
  • Windows 8.1
  • Windows 2000
  • Windows XP
  • Windows 10
  • Microsoft Terminal Server
  • Samsung Galaxy S5
  • Samsung Galaxy J5
  • Samsung Galaxy S7
  • Samsung Galaxy S8 Plus
  • Huawei Mate 95c 6 v6
  • Apple iPhone 4S
  • Apple iPhone 5
  • Apple iPhone 5S
  • Apple iPhone 6
  • Apple iPhone 6S Plus
  • Apple iPhone 7 Plus
  • Apple iPhone 8 Plus
  • Apple iPhone X
  • Apple MacBook
  • IBM Tivoli Storage Manager server
  • Conexant Hasbani web servers
  • Ascend Communications1 switches
  • F5 BIG-IP load balancer

While the majority of North Korean cyber operations are likely conducted from abroad, a small minority historically have been conducted from territorial North Korea. These operations have been conducted utilizing this very same hardware and software. This means that minimally, U.S. technology has enabled North Korea’s destabilizing, disruptive, and destructive cyber operations as well as its internet-enabled circumvention of international sanctions.

Where Technology Export Control Fails

According to a Congressional Research Service study conducted in 2016, U.S. trade restrictions with North Korea are extensive, but do not amount to a comprehensive embargo.

The United States curtails trade with North Korea for reasons of regional stability, that country’s support for acts of international terrorism, lack of cooperation with U.S. antiterrorism efforts, proliferation, and its status as a Communist country and a nonmarket economy. The United States also prohibits transactions relating to trade with certain North Korean entities identified as those who procure luxury goods, launder money, smuggle bulk cash, engage in counterfeiting goods and currency, and traffic in illicit narcotics.

Further, ”a U.S. company may apply for a license to export to North Korea, but for nearly all items other than food and medicine, there is a presumption of denial.”

This is despite the fact that North Korea has been on and off the State Sponsors of Terrorism list twice in the last 10 years (President Bush rescinded the declaration in 2008 and President Trump re-applied it in November 2017). In terms of exportation of technology to North Korea, the State Sponsors of Terrorism designation has relatively little impact in and of itself because the sanctions resulting from that designation govern primarily U.S. foreign aid, defense exports, and dual-use items. There is a provision for sanctions on “miscellaneous financial and other restrictions,” however, it is not clear whether that provision goes above and beyond the existing prohibitions on technology exports to North Korea.

Most electronics, including laptop computers, digital music players, large flat-screen televisions, and “electronic entertainment software” are considered “luxury goods” and fall under the broad trade Export Administration Restrictions (EAR) for North Korea administered by the Department of Commerce.

While the United Nations (UN) clarified its definition of “luxury goods” in Resolution 2321 as not including electronics, each UN member state is allowed to interpret the “luxury goods” term as including different products, “creat[ing] a situation of uneven practice” in the application of export controls. For instance:

  • The European Union bans “electrical/electronic items and appliances for domestic use of a value exceeding EUR 50 each.”
  • Australia bans all “consumer electronics.”
  • Japan prohibits “portable computing devices consisting of at least a central processing unit (CPU), a keyboard, and a display.”
  • South Korea broadly restricts and governs trade with the North including “electronic goods” as a luxury item.
    China has not made a distinction on embargoed luxury goods and does not “honor the luxury goods lists of other countries when it exports to” North Korea.

The Saga of ZTE

In March 2016, Zhongxing Telecommunications Equipment (ZTE), a Chinese cellular device and hardware manufacturer, was added to the Export Administration Regulations (EAR) Entities List. The EAR “imposes additional licensing requirements on and limits the availability of most license exceptions for, exports, reexports, and transfers (in-country) to those listed” on the Entities List. ZTE was initially placed on the Entities List for violating U.S. sanctions by selling American-made goods to Iran and North Korea. Placement on the Entities List prohibited U.S. companies from selling goods to ZTE without a license, and because nearly all ZTE-manufactured products contained U.S. goods, essentially crippled the company.

For more than two years, ZTE and the U.S. government went back and forth attempting to reach an agreement over penalties and validate that ZTE was no longer violating U.S. sanctions. In April 2018, the Department of Commerce (DOC) ended the negotiations by imposing a denial order, prohibiting American companies from selling to ZTE for seven years.

The denial order was the end of a lengthy export control enforcement process which would have bankrupted ZTE. Instead, in late May, the DOC negotiated an agreement which lifted the denial order and re-opened ZTE to U.S. exports.

The case of ZTE, a company which was placed on the Entities List and under a denial order for violating U.S. sanctions against North Korea, is a useful example of how impactful successful export control can be — if allowed to be. Had ZTE been allowed to fail, it would have sent a powerful message to companies around the world indicating how seriously the U.S. considers these violations. Instead, the message is that a company can violate U.S export controls and sanctions if it is large enough and aligned with an economically powerful nation.

Technology Exports to North Korea Were Not Always Prohibited

The question of how U.S. technology gets to North Korea is not entirely a story of failed export control or inconsistent application. According to Department of Commerce data, the U.S. has actually exported over $176 million of goods to North Korea since 2002. While this number pales in comparison to export volume with nations such as China or Canada, it is important to note that the export of “computers and electronic products” to North Korea occurred until this year.

At its peak in 2014, the U.S. exported $215,862 worth of computers and electronic products to North Korea. We do not know exactly which products or how many were exported to North Korea that year. However, based on the Department of Commerce definition of “computers and electronic products,” we have an idea of what kind of electronics these exports might have included. This category includes “computers, computer peripherals (including items like printers, monitors, and storage devices), communications equipment (such as wired and wireless telephones), and similar electronic products (including audio and video equipment and semiconductors),” as well as components for these products.

Again, while we do not know exactly which computer and electronic products were exported to North Korea over the past 15 years, that data can be useful in an exercise to demonstrate exactly how much value North Korea could have derived from that amount of money.

For example, in 2014, a decent desktop could cost around $500, while a similarly specified laptop would cost $700. Hypothetically, if North Koreans were paying the average prices for computers, they could have purchased over 350 computers from U.S. suppliers in 2014 alone. In total, since 2002, the U.S. has legally exported $483,543 worth of computers and electronics to North Korea — a sum that could have legally supplied some of the ruling elites’ electronics needs.

Our analysis demonstrates that many of the electronic devices North Korean elite utilize are older models or are running older software. These legal exports certainly do not account for all of the devices we have observed on North Korean networks, nor is $483,543 sufficient to completely build a moderately sized and proxied network. However, it presents an interesting part of the answer to the question of exactly how North Korea could have acquired all of their Western hardware and software. At least some of the computers and software we observed being used in North Korean networks today was probably acquired during these past 15 years.

Outlook

It is the responsibility of any U.S. exporters to be familiar and compliant with federal export controls, as penalties can include fines, civil or criminal charges, imprisonment, negative publicity, revocation of exporting privileges, or debarment from U.S. government contracting. As explained by the Massachusetts Export Center, “[Even if the exporter is selling only] innocuous products or selling only to ‘friendly’ countries … the exporter is ultimately responsible to have a thorough understanding of export regulations and to establish operating procedures aimed at preventing violations.”

For U.S. companies and persons to avoid the risk of being found guilty of violating sanctions, it is expected that an effective export compliance program is implemented. The U.S. Department of Commerce’s Bureau of Industry and Security suggest eight elements for an effective program:

  1. Statements and commitments from management
  2. Risk assessment of potential export violations
  3. Export authorization
  4. Effective record keeping
  5. Instituting training programs for employees
  6. Auditing records
  7. Detecting and correcting export violations
  8. Maintaining an export compliance manual

Generally, all U.S. business are not expected to perfect all eight elements, but any deviation from a robust compliance program poses a risk that an entity could be found in violation of the U.S. export regime. However, while a U.S. company may have a robust program, sanctioned states often use false flags or non-national facilitators to skirt even the most advanced programs. As a recent report from Arms Control Wonk and Reuters pointed out, the North Koreans are adept at falsifying addresses and names to circumvent sanctions programs. This flow of technology is not one way, either — recent reports point out that North Korea has used shell companies and various aliases to export various technologies, including facial recognition software to U.S. allies and encryption software in Asia.

One transaction involving the DPRK shell company Glocom that was widely reported last year demonstrates the ease with which North Korea is able to avoid technology control sanctions. Glocom used a network of Asian-based front companies to purchase components from electronic resellers, and the payment was even cleared through a U.S. bank account. Glocom, the company at the center of these transactions, was tied to Pan Systems Pyongyang via invoices uncovered by the UN and International Global System via WHOIS website registration data. Ryang Su Nyo is listed as a director of Pan Systems Pyongyang and a shareholder of International Global System, and Reuters has reported that Ryang reports to “Liaison Office 519,” a department within the North Korean Reconnaissance General Bureau.

Today, the varied interpretation of the term “luxury goods,” a sophisticated sanctions evasion operation, and lax enforcement of technology and electronics as a subcategory has created a situation where the Kim regime can acquire U.S. electronics, software, and hardware virtually at will. Technology resellers, North Koreans abroad, and the Kim regime’s extensive criminal networks all facilitate the transfer of American technology for daily use by one of the world’s most repressive governments. Unless there’s a globally unified effort to impose comprehensive sanctions on the DPRK, and multilateral cooperation to ensure that these sanctions cannot be thwarted by a web of shell companies, North Korea will be able to continue its cyberwarfare operations unabated with the aid of Western technology.

 

AI: Machine Detection of Missile/Nuclear Launches, no Google

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Primer: The U.S. holds an enviable lead in pushing artificial-intelligence technology out of labs and into real-world applications. Thank companies like Alphabet (GOOGL), Facebook (FB) and Apple (AAPL) for that.

But China’s government and technology elites aim to overtake the U.S. in AI by 2030 — or so they proclaimed in July at a Beijing political gathering.

Good luck with that.

Yes, China has many strengths as it sets out for worldwide dominance in AI technology. Its internet giants Baidu (BIDU), Alibaba Group Holdings (BABA) and Tencent Holdings (TCEHY) are also pouring money into AI research and hiring top scientists.

China’s huge population will generate massive raw data to train AI systems in how to make predictions.  So there’s good reason to think China will make breakthroughs in developing computer algorithms — the software programs that aim to replicate the human ability to learn, reason and make decisions.

China also has a major weakness: a semiconductor industry that still lags the U.S. in making high-end electronic processors. Chinese companies buy AI chips mainly from Nvidia (NVDA), based in Santa Clara, Calif. Intel (INTC), the dominant supplier of brainy chips for personal computers, is pushing fast into AI. More here.

Google Employees Quit Over Controversial Pentagon Contract Some employees even quit.

Due to Google employees signing a petition for the Pentagon’s Project Maven, the AI project which is a drone contract. Project Maven is known as Algorithmic Warfare Cross-Functional Team. Google at the time of the contract beat out other bidders including Microsoft, Amazon and IBM. More here on Google.

Google will abandon Project Maven, your project of ... photo

WASHINGTON (Reuters) – The U.S. military is increasing spending on a secret research effort to use artificial intelligence to help anticipate the launch of a nuclear-capable missile, as well as track and target mobile launchers in North Korea and elsewhere.

The effort has gone largely unreported, and the few publicly available details about it are buried under a layer of near impenetrable jargon in the latest Pentagon budget. But U.S. officials familiar with the research told Reuters there are multiple classified programs now under way to explore how to develop AI-driven systems to better protect the United States against a potential nuclear missile strike.

If the research is successful, such computer systems would be able to think for themselves, scouring huge amounts of data, including satellite imagery, with a speed and accuracy beyond the capability of humans, to look for signs of preparations for a missile launch, according to more than half a dozen sources. The sources included U.S. officials, who spoke on condition of anonymity because the research is classified.

Forewarned, the U.S. government would be able to pursue diplomatic options or, in the case of an imminent attack, the military would have more time to try to destroy the missiles before they were launched, or try to intercept them.

“We should be doing everything in our power to find that missile before they launch it and make it increasingly harder to get it off (the ground),” one of the officials said.

The Trump administration has proposed more than tripling funding in next year’s budget to $83 million for just one of the AI-driven missile programs, according to several U.S. officials and budget documents. The boost in funding has not been previously reported.

While the amount is still relatively small, it is one indicator of the growing importance of the research on AI-powered anti-missile systems at a time when the United States faces a more militarily assertive Russia and a significant nuclear weapons threat from long-time foe North Korea.

** https://bloximages.newyork1.vip.townnews.com/stltoday.com/content/tncms/assets/v3/editorial/c/d9/cd996bb2-06f0-51ae-ab8b-10a327dcbc19/5b166e9ca3e4c.image.jpg?resize=1200%2C902

“What AI and machine learning allows you to do is find the needle in the haystack,” said Bob Work, a champion of AI technology who was deputy defense secretary until last July, without referring to any individual projects.

One person familiar with the programs said it includes a pilot project focused on North Korea. Washington is increasingly concerned about Pyongyang’s development of mobile missiles that can be hidden in tunnels, forests and caves. The existence of a North Korea-focused project has not been previously reported.

While that project has been kept secret, the military has been clear about its interest in AI. The Pentagon, for example, has disclosed it is using AI to identify objects from video gathered in its drone program, as part of a publicly touted effort launched last year called “Project Maven.”

Still, some U.S. officials say AI spending overall on military programs remains woefully inadequate.

AI ARMS RACE

The Pentagon is in a race against China and Russia to infuse more AI into its war machine, to create more sophisticated autonomous systems that are able to learn by themselves to carry out specific tasks. The Pentagon research on using AI to identify potential missile threats and track mobile launchers is in its infancy and is just one part of that overall effort.

There are scant details on the AI missile research, but one U.S. official told Reuters that an early prototype of a system to track mobile missile launchers was already being tested within the U.S. military.

This project involves military and private researchers in the Washington D.C. area. It is pivoting off technological advances developed by commercial firms financed by In-Q-Tel, the intelligence community’s venture capital fund, officials said.

In order to carry out the research, the project is tapping into the intelligence community’s commercial cloud service, searching for patterns and anomalies in data, including from sophisticated radar that can see through storms and penetrate foliage.

Budget documents reviewed by Reuters noted plans to expand the focus of the mobile missile launcher program to “the remainder of the (Pentagon) 4+1 problem sets.” The Pentagon typically uses the 4+1 terminology to refer to China, Russia, Iran, North Korea and terrorist groups.

TURNING TURTLES INTO RIFLES

Both supporters and critics of using AI to hunt missiles agree that it carries major risks. It could accelerate decision-making in a nuclear crisis. It could increase the chances of computer-generated errors. It might also provoke an AI arms race with Russia and China that could upset the global nuclear balance.

U.S. Air Force General John Hyten, the top commander of U.S. nuclear forces, said once AI-driven systems become fully operational, the Pentagon will need to think about creating safeguards to ensure humans – not machines – control the pace of nuclear decision-making, the “escalation ladder” in Pentagon speak.

“(Artificial intelligence) could force you onto that ladder if you don’t put the safeguards in,” Hyten, head of the U.S. Strategic Command, said in an interview. “Once you’re on it, then everything starts moving.”

Experts at the Rand Corporation, a public policy research body, and elsewhere say there is a high probability that countries like China and Russia could try to trick an AI missile-hunting system, learning to hide their missiles from identification.

There is some evidence to suggest they could be successful.

An experiment by M.I.T. students showed how easy it was to dupe an advanced Google image classifier, in which a computer identifies objects. In that case, students fooled the system into concluding a plastic turtle was actually a rifle. here

Dr. Steven Walker, director of the Defense Advanced Research Projects Agency (DARPA), a pioneer in AI that initially funded what became the Internet, said the Pentagon still needs humans to review AI systems’ conclusions.

“Because these systems can be fooled,” Walker said in an interview.

DARPA is working on a project to make AI-driven systems capable of better explaining themselves to human analysts, something the agency believes will be critical for high stakes national security programs.

‘WE CAN’T BE WRONG’

Among those working to improve the effectiveness of AI is William “Buzz” Roberts, director for automation, AI and augmentation at the National Geospatial Agency. Roberts works on the front lines of the U.S. government’s efforts to develop AI to help analyze satellite imagery, a crucial source of data for missile hunters.

Last year, NGA said it used AI to scan and analyze 12 million images. So far, Roberts said, NGA researchers have made progress in getting AI to help identify the presence or absence of a target of interest, although he declined to discuss individual programs.

In trying to assess potential national security threats, the NGA researchers work under a different kind of pressure from their counterparts in the private sector.

“We can’t be wrong … A lot of the commercial advancements in AI, machine learning, computer vision – If they’re half right, they’re good,” said Roberts.

Although some officials believe elements of the AI missile program could become viable in the early 2020s, others in the U.S. government and the U.S. Congress fear research efforts are too limited.

“The Russians and the Chinese are definitely pursuing these sorts of things,” Representative Mac Thornberry, the House Armed Services Committee’s chairman, told Reuters. “Probably with greater effort in some ways than we have.”

 

Facebook Shared your Data with 60+ Other Tech Companies

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New privacy law forces some U.S. media offline in Europe

continue here where it has affected U.S. media.

It is a privacy war. It is data abuse. It is exploitation.

More than 50 companies including Apple and Amazon participated in the Facebook data-sharing partnership.

Have you noticed emails and terms of privacy has changed in volumes with those sites you often visit? Well we can thank Europe as the new privacy law went into effect in recent weeks.

On May 25, however, the power balance will shift towards consumers, thanks to a European privacy law that restricts how personal data is collected and handled. The rule, called General Data Protection Regulation or GDPR, focuses on ensuring that users know, understand, and consent to the data collected about them. Under GDPR, pages of fine print won’t suffice. Neither will forcing users to click yes in order to sign up. Read the details here.

But, it is suggested that you actually read what updates are in fact happening in the U.S., as it may not be all that protective. Fair warning and take caution, abuses may still continue.

Read on…it is no wonder that Facebook is running TV ads, but that still does not assure us our data is being abused.

Facebook: The Social Accelerator? | emergent by design photo

Facebook Gave Device Makers Deep
Access to Data on Users and Friends

The company formed data-sharing partnerships with Apple, Samsung and
dozens of other device makers, raising new concerns about its privacy protections.

As Facebook sought to become the world’s dominant social media service, it struck agreements allowing phone and other device makers access to vast amounts of its users’ personal information.

Facebook has reached data-sharing partnerships with at least 60 device makers — including Apple, Amazon, BlackBerry, Microsoft and Samsung — over the last decade, starting before Facebook apps were widely available on smartphones, company officials said. The deals allowed Facebook to expand its reach and let device makers offer customers popular features of the social network, such as messaging, “like” buttons and address books.

But the partnerships, whose scope has not previously been reported, raise concerns about the company’s privacy protections and compliance with a 2011 consent decree with the Federal Trade Commission. Facebook allowed the device companies access to the data of users’ friends without their explicit consent, even after declaring that it would no longer share such information with outsiders. Some device makers could retrieve personal information even from users’ friends who believed they had barred any sharing, The New York Times found.

Most of the partnerships remain in effect, though Facebook began winding them down in April. The company came under intensifying scrutiny by lawmakers and regulators after news reports in March that a political consulting firm, Cambridge Analytica, misused the private information of tens of millions of Facebook users.

In the furor that followed, Facebook’s leaders said that the kind of access exploited by Cambridge in 2014 was cut off by the next year, when Facebook prohibited developers from collecting information from users’ friends. But the company officials did not disclose that Facebook had exempted the makers of cellphones, tablets and other hardware from such restrictions.

“You might think that Facebook or the device manufacturer is trustworthy,” said Serge Egelman, a privacy researcher at the University of California, Berkeley, who studies the security of mobile apps. “But the problem is that as more and more data is collected on the device — and if it can be accessed by apps on the device — it creates serious privacy and security risks.”

In interviews, Facebook officials defended the data sharing as consistent with its privacy policies, the F.T.C. agreement and pledges to users. They said its partnerships were governed by contracts that strictly limited use of the data, including any stored on partners’ servers. The officials added that they knew of no cases where the information had been misused.

The company views its device partners as extensions of Facebook, serving its more than two billion users, the officials said.

“These partnerships work very differently from the way in which app developers use our platform,” said Ime Archibong, a Facebook vice president. Unlike developers that provide games and services to Facebook users, the device partners can use Facebook data only to provide versions of “the Facebook experience,” the officials said.

Some device partners can retrieve Facebook users’ relationship status, religion, political leaning and upcoming events, among other data. Tests by The Times showed that the partners requested and received data in the same way other third parties did.

Facebook’s view that the device makers are not outsiders lets the partners go even further, The Times found: They can obtain data about a user’s Facebook friends, even those who have denied Facebook permission to share information with any third parties.

In interviews, several former Facebook software engineers and security experts said they were surprised at the ability to override sharing restrictions.

“It’s like having door locks installed, only to find out that the locksmith also gave keys to all of his friends so they can come in and rifle through your stuff without having to ask you for permission,” said Ashkan Soltani, a research and privacy consultant who formerly served as the F.T.C.’s chief technologist.

Details of Facebook’s partnerships have emerged amid a reckoning in Silicon Valley over the volume of personal information collected on the internet and monetized by the tech industry. The pervasive collection of data, while largely unregulated in the United States, has come under growing criticism from elected officials at home and overseas and provoked concern among consumers about how freely their information is shared.

In a tense appearance before Congress in March, Facebook’s chief executive, Mark Zuckerberg, emphasized what he said was a company priority for Facebook users.“Every piece of content that you share on Facebook you own,” he testified. ”You have complete control over who sees it and how you share it.”

But the device partnerships provoked discussion even within Facebook as early as 2012, according to Sandy Parakilas, who at the time led third-party advertising and privacy compliance for Facebook’s platform.

“This was flagged internally as a privacy issue,” said Mr. Parakilas, who left Facebook that year and has recently emerged as a harsh critic of the company. “It is shocking that this practice may still continue six years later, and it appears to contradict Facebook’s testimony to Congress that all friend permissions were disabled.”

The partnerships were briefly mentioned in documents submitted to German lawmakers investigating the social media giant’s privacy practices and released by Facebook in mid-May. But Facebook provided the lawmakers with the name of only one partner — BlackBerry, maker of the once-ubiquitous mobile device — and little information about how the agreements worked.

The submission followed testimony by Joel Kaplan, Facebook’s vice president for global public policy, during a closed-door German parliamentary hearing in April. Elisabeth Winkelmeier-Becker, one of the lawmakers who questioned Mr. Kaplan, said in an interview that she believed the data partnerships disclosed by Facebook violated users’ privacy rights.

“What we have been trying to determine is whether Facebook has knowingly handed over user data elsewhere without explicit consent,” Ms. Winkelmeier-Becker said. “I would never have imagined that this might even be happening secretly via deals with device makers. BlackBerry users seem to have been turned into data dealers, unknowingly and unwillingly.”

In interviews with The Times, Facebook identified other partners: Apple and Samsung, the world’s two biggest smartphone makers, and Amazon, which sells tablets.

An Apple spokesman said the company relied on private access to Facebook data for features that enabled users to post photos to the social network without opening the Facebook app, among other things. Apple said its phones no longer had such access to Facebook as of last September.

Samsung declined to respond to questions about whether it had any data-sharing partnerships with Facebook. Amazon also declined to respond to questions.

Usher Lieberman, a BlackBerry spokesman, said in a statement that the company used Facebook data only to give its own customers access to their Facebook networks and messages. Mr. Lieberman said that the company “did not collect or mine the Facebook data of our customers,” adding that “BlackBerry has always been in the business of protecting, not monetizing, customer data.”

Microsoft entered a partnership with Facebook in 2008 that allowed Microsoft-powered devices to do things like add contacts and friends and receive notifications, according to a spokesman. He added that the data was stored locally on the phone and was not synced to Microsoft’s servers.

Facebook acknowledged that some partners did store users’ data — including friends’ data — on their own servers. A Facebook official said that regardless of where the data was kept, it was governed by strict agreements between the companies.

“I am dumbfounded by the attitude that anybody in Facebook’s corporate office would think allowing third parties access to data would be a good idea,” said Henning Schulzrinne, a computer science professor at Columbia University who specializes in network security and mobile systems. Keep reading here for specific details.

Fed Gov Spent $76 Billion in 2017 for Cyber Security, Fail v Success

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Go here for the Forum Part One

Go here for the Forum Part Two

Fascinating speakers from private industry, state government and the Federal government describe where we are, the history on cyber threats and how fast, meaning hour by hour the speed at which real hacks, intrusions or compromise happen.

David Hoge of NSA’s Threat Security Operations Center for non-classified hosts worldwide describes the global reach of NSA including the FBI, DHS and the Department of Defense.

NSA Built Own 'Google-Like' Search Engine To Share ... photo

When the Federal government spent $76 billion in 2017 and we are in much the same condition, Hoge stays awake at night.

With North Korea in the constant news, FireEye published a report in 2017 known as APT37 (Reaper): The Overlooked North Korea Actor. North Korea is hardly the worst actor. Others include Russia, China, Iran and proxies.

Targeting: With North Korea primarily South Korea – though also Japan, Vietnam and the Middle East – in various industry verticals, including chemicals, electronics, manufacturing, aerospace, automotive, and healthcare.
Initial Infection Tactics: Social engineering tactics tailored specifically to desired targets, strategic web compromises typical of targeted cyber espionage operations, and the use of torrent file-sharing sites to distribute malware more indiscriminately.
Exploited Vulnerabilities: Frequent exploitation of vulnerabilities in Hangul Word Processor (HWP), as well as Adobe Flash. The group has demonstrated access to zero-day vulnerabilities (CVE-2018-0802), and the ability to incorporate them into operations.
Command and Control Infrastructure: Compromised servers, messaging platforms, and cloud service providers to avoid detection. The group has shown increasing sophistication by improving their operational security over time.
Malware: A diverse suite of malware for initial intrusion and exfiltration. Along with custom malware used for espionage purposes, APT37 also has access to destructive malware.

More information on this threat actor is found in our report, APT37 (Reaper): The Overlooked North Korean Actor.

** NSA 'building quantum computer to crack security codes ...  photo

Beyond NSA, DHS as with other agencies have cyber divisions. The DHS cyber strategy is found here. The fact sheet has 5 pillars:

DHS CYBERSECURITY GOALS
Goal 1: Assess Evolving
Cybersecurity Risks.
We will understand the evolving
national cybersecurity risk posture
to inform and prioritize risk management activities.
Goal 2: Protect Federal Government
Information Systems.
We will reduce vulnerabilities of federal agencies to ensure they achieve
an adequate level of cybersecurity.
Goal 3: Protect Critical
Infrastructure.
We will partner with key stakeholders
to ensure that national cybersecurity
risks are adequately managed.
Goal 4: Prevent and Disrupt Criminal
Use of Cyberspace.
We will reduce cyber threats by
countering transnational criminal
organizations and sophisticated cyber
criminals.
Goal 5: Respond Effectively to Cyber
Incidents.
We will minimize consequences from
potentially significant cyber incidents
through coordinated community-wide
response efforts.
Goal 6: Strengthen the Security and
Reliability of the Cyber Ecosystem.
We will support policies and activities
that enable improved global cybersecurity risk management.
Goal 7: Improve Management of
DHS Cybersecurity Activities.
We will execute our departmental
cybersecurity efforts in an integrated
and prioritized way.

Related reading:National Protection and Programs Directorate

NPPD’s vision is a safe, secure, and resilient infrastructure where the American way of life can thrive.  NPPD leads the national effort to protect and enhance the resilience of the nation’s physical and cyber infrastructure.

*** Going forward as devices are invented and added to the internet and rogue nations along with criminal actors, the industry is forecasted to expand with experts and costs.

Research reveals in its new report that organizations are expected to increase spending on IT security by almost 9% by 2018 to safeguard their cyberspaces, leading to big growth rates in the global markets for cyber security.

The cyber security market comprises companies that provide products and services to improve security measures for IT assets, data and privacy across different domains such as IT, telecom and industrial sectors.

The global cyber security market should reach $85.3 billion and $187.1 billion in 2016 and 2021, respectively, reflecting a five-year compound annual growth rate (CAGR) of 17.0%. The American market, the largest segment, should grow from $39.5 billion in 2016 to $78.0 billion by 2021, demonstrating a five-year CAGR of 14.6%. The Asia-Pacific region is expected to grow the fastest among all major regions at a five-year CAGR of 21.4%, due to stringent government policies to mitigate cyber threats, and a booming IT industry.

Factors such as the growing complexity and frequency of threats, increasing severity of cyber security, stringent government regulations and compliance requirements, ubiquity of online communication, digital data and social media cumulatively should drive the market. Moreover, organizations are expected to increase IT spending on security solutions and services, as well. Rising adoption of technologies such as Internet of things, evolution of big data and cloud computing, increasing smartphone penetration and the developing market for mobile and web platforms should provide ample opportunities for vendors.

By solution type, the banking and financial segment generated the most revenue in 2015 at $22.2 billion. However, the defense and intelligence segment should generate revenues of $50.7 billion in 2021 to lead all segments. The healthcare sector should experience substantial growth with an anticipated 16.2% five-year CAGR.

Network security, which had the highest market revenue in 2015 based on solution type, should remain dominant through the analysis period. Substantial growth is anticipated in the cloud security market, as the segment is expected to have a 27.2% five-year CAGR, owing to increasing adoption of cloud-based services across different applications.

“IT security is a priority in the prevailing highly competitive environment,” says BCC Research analyst Basudeo Singh. “About $100 billion will be spent globally on information security in 2018, as compared with $76.7 billion in 2015.”

List of Issues for Talks Between Trump and Kim Jung Un

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North Korea is holding up to 120,000 political prisoners in “horrific conditions” in camps across the country, according to estimates from a newly released State Department report.

The department on Tuesday issued its annual International Religious Freedom Report for 2017, which covers 200 countries and territories, documenting religious freedom and human rights abuses.

The findings on North Korea come as the Trump administration is working to engage the isolated regime. The White House says the administration continues to “actively prepare” for a possible summit with Kim Jong Un.

The report, though, addressed the brutal conditions festering inside Kim’s kingdom. It revealed 1,304 cases of alleged religious freedom violations in the country last year, while detailing the harsh treatment of political and religious prisoners — and persecution of Christians.

Secretary of States Mike Pompeo is meeting with 4 Star General and head of the military intelligence, Kim Yong Chol is a longtime spy chief and vice chairman of the ruling Workers’ Party was responsible for hacking Sony. More here.

North Korea Releases 3 US Citizens Ahead of Trump-Kim ... photo

Then North Korea has 2 satellites in orbit and more planned in 2018-2019.

“The Unha launcher can put maybe 100 kilograms [220 lbs.] into a pretty low orbit, maybe 400 or 500 kilometers [250 to 310 miles]” above the Earth’s surface, Wright said. “By increasing the thrust, it allows North Korea to lift satellites to higher altitudes, or to carry a greater payload to longer distances if it is a ballistic missile.”

Wright noted that the earlier, Nodong engine was essentially a scaled-up version of the one in the Scud, the Soviet missile that Iraq often used during the Gulf War of the 1990s. Whereas the Nodong used Scud-level propellants instead of ones used in more modern rockets, Wright noted that the color of the flame coming from the new engine in photos of the test suggest that this missile uses more advanced propellants that can generate higher thrust. [Top 10 Space Weapons]

“The surprise has been why North Korea has stuck with Scud propellants for so long,” Wright said. “There have been reports for 15 years now that North Korea had bought some submarine-launched missiles from the Soviet Union after it collapsed that used more advanced propellants, yet in all this time, we didn’t see them launch missiles with anything but Scud propellant.

In 2016, At United States Strategic Command, controllers likely had a high-workload evening as STRATCOM monitored the launch of a Russian Soyuz rocket from the Plesetsk Cosmodrome just eight minutes prior to North Korea’s launch, as is typical for launches from Russia’s military launch site. The ascending Unha rocket was tracked using the Space-Based Infrared System in Geostationary Orbit, capable of detecting the infrared signature of ascending rockets from ground level all the way into orbit. This allows the U.S. military to track the vehicle’s trajectory in real time before relying on ground-based radars to track any objects that entered orbit. More here .

Ah but there is but one more issue at least. Yes, North Korea imploded their nuclear test site at Punggye-ri. But…there are 4 more locations.

nk map amanda photo

The most important is Yongbyon, while the other locations appear to have slight or no activity.

Further, North Korea maintains a rather advanced air defense system, listed among the top in the world.

However, while North Korean technology is relatively primitive—the nation’s air defenses are coordinated.

“They do have an old Soviet computerized anti-aircraft command and control system. Most of the radars are old, but they did receive some newer Iranian phased array radars,” Kashin said. “This is what I know, the anti-aircraft units are extensively using underground shelters for cover—not easy to destroy.”

Thus, while generally primitive, North Korean defenses might be a tougher nut to crack than many might expect. Moreover, while their technology is old, North Korea’s philosophy of self-reliance means it can produce most of its own military hardware. More here.

North Korea has a fairly robust chemical and biological weapons program. The 46 page report is found here.

Lastly but hardly finally is the cyber weapons produced and applied by North Korea.

Most recently is: May 29, 2018, The Department of Homeland Security (DHS) and the Federal Bureau of Investigation (FBI) released a joint Technical Alert (TA) that identifies two families of malware—referred to as Joanap and Brambul—used by the North Korean government. The U.S. Government refers to malicious cyber activity by the North Korean government as HIDDEN COBRA.

In conjunction with the release of this TA, NCCIC has released a Malware Analysis Report (MAR) that provides analysis on samples of Joanap and Brambul malware.

NCCIC encourages users and administrators to review TA18-149A: HIDDEN COBRA – Joanap Backdoor Trojan and Brambul Server Message Block Worm and MAR-10135536-3 – RAT/Worm.

While there has been recent discussions about applying the Libya model to North Korea for removing nuclear weapons, you can bet Kim Jung Un is going to demand the Pakistan model.