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US blacklists Israeli company over Russia intelligence links

In this photo taken on Monday, July 24, 2017, a car passes the building of the Federal Security Service (FSB, Soviet KGB successor) in Lubyanskaya Square in Moscow, Russia.
AP Photo/Alexander Zemlianichenko

The United States slapped sanctions Monday on an Israeli company over links to a Russian firm accused of buttressing the "offensive cyber capabilities" of Russia's intelligence service, the FSB.

The US Treasury named Russian company Digital Security -- whose websites describes it as a information security consultancy -- and two subsidiaries as helping provide support for Russian intelligence services and said their activities "jeopardize the safety and security of the United States and our allies.”

The Office of Foreign Assets Control (OFAC) also listed Israel-headquartered company Embedi for links to Digital Security, saying that as of May 2017 it was a subsidiary of the Russian outfit. 

The company, which also maintains an office in Berkeley, California, denied any links to the FSB or Russia but said the activities of some former employees may have been behind the listing.

"Some of our research team were former members of Digital Security," Donald Anderson, the company's head of marketing, told i24NEWS when reached by phone.

"From my opinion it’s the only one connection we have with Digital Security."

Anderson said the company's headquarters and research and development hub are located in Herzilya, north of Tel Aviv and that "we have no connections with Russia or the Russian government."

"We hope that this misunderstanding with the US government should be resolved as soon possible."

A US official did not immediately respond to a request for further details.

“The United States is engaged in an ongoing effort to counter malicious actors working at the behest of the Russian Federation and its military and intelligence units to increase Russia’s offensive cyber capabilities," Treasury Secretary Steven Mnuchin said.


"The entities designated today have directly contributed to improving Russia’s cyber and underwater capabilities through their work with the FSB and therefore jeopardize the safety and security of the United States and our allies,” he added.

Another company listed as having an Israeli address, ERPScan, was also added to the Treasury blacklist, which freezes all US property belonging to the companies and prohibits US citizens from doing business with them.

According to its website, ERPScan has offices in the US, Netherlands and the Czech Republic as well as a machine learning lab in Herzilya Patuach.

The Treasury said that as of August 2016, the company was also a subsidiary of Digital Security. 

However the company's founder, Alexander Polyakov, told i24NEWS in an email that as of 2014 it "is a private company registered in the Netherlands and are not a subsidiary of any company listed" in the Treasury's blacklist. 

"The only issue is that some of my peers and I were born in Russia. I’m sorry, we can’t change it," Polyakov wrote.

"But we can change the world by making it better and more secure. We will continue helping protect critical SAP and Oracle software from cyber attacks as we did, and it doesn’t matter what has happened."

US officials have become alarmed over the past year at the extent of US-targeted offensive cyber operations that Washington alleges have official backing from Moscow.

Those include the global NotPetya cyber attack, which paralyzed thousands of computers around the world last year; intrusions into the control systems of the US energy grid; and the insertion of trojans into home and company networking devices around the world, which allow both the diversion of data and attacks that could shut down networks.

i24NEWS Economy Correspondent Asher Westropp-Evans and AFP contributed to this report.



If Embedi is Israel-headquartered, why does its own blog post write "Embedi is headquartered in Berkeley, USA" as late as this January 11, and its LinkedIn give Amsterdam? Meanwhile ERPScan's LinkedIn lists "Palo Alto, California", is on Crunchbase as "ERPScan has headquarters in the Palo Alto and Amsterdam", and on its own slides as "Headquartered in Palo Alto (US) and Amsterdam (EU)". Dodgy as …

Oh, and would you look at ERPScan's Trademark Owner History over at Justia. (Embedi doesn't seem listed.)

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