Nov 3, 2021 - World

U.S. blacklists Israeli firm NSO after Pegasus spyware scandal

President Biden with PM Bennett. Photo: Nicholas KammAFP via Getty

The U.S. Commerce Department on Wednesday added Israeli cyber intelligence companies NSO and Candiru to its black list of companies engaging in activities contrary to the national security or foreign policy interests of the United States.

Why it matters: This is the first time the U.S. government has targeted Israeli cyber companies, which receive their export licenses from the Israeli Ministry of Defense. The designations will limit the activities of the companies in the United States.

Driving the news: The Commerce Department said its decision was based on evidence that both companies developed and supplied spyware to foreign governments that in turn used it "to maliciously target government officials, journalists, businesspeople, activists, academics, and embassy workers."

  • “These tools have also enabled foreign governments to conduct transnational repression, which is the practice of authoritarian governments targeting dissidents, journalists and activists outside of their sovereign borders to silence dissent. Such practices threaten the rules-based international order," the statement said.
  • The Biden administration notified the Israeli government just one hour in advance of its announcement, an Israeli official tells me

The backstory: An international consortium of investigative journalists reported in July that NSO's Pegasus software — designed to track terrorists and criminals — had become a valuable tool for governments to spy on journalists and critics.

  • Hungary, India, Mexico, Morocco and Saudi Arabia are among the countries listed in the report as NSO clients.
  • Around the same time, Citizen Lab and Microsoft published a report stating that Candiru software was used in a major hack of Windows software.
  • The Israeli press has reported that Candiru sold their software to Saudi Arabia and other authoritarian governments.

The NSO affair also created a diplomatic crisis between Israel and France after reports that Morocco had used Pegasus to hack President Emmanuel Macron’s cellphone.

  • Macron and Prime Minister Naftali Bennett agreed to put that crisis aside after a meeting on Monday in Glasgow, Scotland.
  • The Israelis gave assurances to the French that they would take steps to ensure Israeli cyber spying software could not be used in the future against French targets.

Worth noting: The State Department clarified that the Biden administration would not take steps against the Israeli government over this issue.

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