In an increasingly interconnected world, the digital realm has emerged as a battleground for criminal activities and state-sponsored aggression. Between 2013 and 2016, Yahoo experienced a data breach that caused the loss of 3 billion user accounts. Some of these accounts' personal information and passwords were stolen by the attackers, and they might now be used to get into users' accounts on other websites. These days, a lot of this information can be accessed on the dark web for money or credit. Traditional economic sanctions like trade restrictions and freezing of assets may not be appropriate in response to state participants who engage in cybercrime, thus governments may instead try to put in place cyber sanctions to discourage and penalize the destructive behaviour. In spite of this, firms operating in a digital financial environment need to be aware of the relevance of cybercrime fines and the growing need for compliance with cyber sanctions.
What are Cyber Sanctions and Cybercrime Punishments?
Cyber sanctions are a relatively recent addition to the international regulatory environment, but they are being employed more frequently to prevent and deter malicious state actors from conducting cyberattacks. Phishing and hacking for the aim of data or financial theft, pillaging of intellectual property, or the spread of misinformation through social media are examples of state-level cyberattacks or cybercrime.
Cyber sanctions work similarly to traditional sanctions in that they restrict transactions, trade, and commercial connections with people and organizations suspected of carrying out cyber-enabled assaults or harmful acts. To be able to apply a cyber punishment, authorities must go through an attribution process in which they try to determine who launched the attack. Authorities must cope with privacy issues, anonymity, and the potential for identity fraud associated with cybercrime in addition to examining vast amounts of technical evidence such as computer code, IP addresses, and other data.
Types of Cybercrimes
Cybercrime takes various forms, making it tough to combat. The following are examples of common types of cybercrime;
- Phishing is the practice of collecting personal information from online users through the use of fake email messages.
- unauthorized use of personal data (i.e., identity theft);
- Shutting down or misusing a website or computer network is known as hacking.
- creating antagonism and encouraging terrorism
- distributing pornography interacting with kids in mind;
- The act of approaching minors with sexual solicitation is known as grooming.
International Cybercrime Regulations
A nation must be confident that the targets of its cybercrime sanctions will be affected in the way intended before adopting a cyber sanctions program. As a result, laws vary depending on the international jurisdiction:
The United States (US)
The first designations against anyone trying to influence the 2016 general election were made under the United States cybercrime system, which was established in 2015. Targets of US cyber sanctions are listed on the Specially Designated Nationals and Blocked Person List maintained by the Office of Foreign Assets Control (OFAC). For cyber-related activities like election tampering, phishing scams, hacking and malware attacks, as well as other forms of fraudulent behaviour, OFAC has designated over 100 cyber-sanction targets.
The United States imposes cyber penalties on the following individuals:
- Individuals conducting cyber attacks from outside the United States represent a serious danger to public safety, foreign policy, or financial stability.
- Individuals who attempt to exploit trade secrets for commercial or financial advantage.
- Individuals that help or give financial or technical support for a cyber-attack.
- Individuals who are owned or controlled by cyber-attackers.
- Cyber sanctions are imposed on those who participate in or try to engage in specified acts.
The European Union (EU)
The EU has moved more slowly than other countries in enacting cybercrime fines and sanctions: The EU government didn't create a system for tracking cybercrime until May 2019 and didn't give out its first designations until July 2020. Russian, North Korean, and Chinese players involved in 201 were the targets of the first batch of EU cyber penalties. The EU imposes cyber fines in response to cyberattacks on the critical social and economic infrastructure, services, military operations, and sensitive data of member states. The following categories of people are designated under the EU cyber sanctions government:
- Individuals who participate in or try to engage in cyber attacks.
- Individuals who offer financial, technical, or material assistance to cyber attacks.
- Individuals who associate with those engaged in a cyber attack.
The United Kingdom (UK)
The Cyber (Sanctions) (EU Exit) Regulations 2020, which the UK altered in response to Brexit, replaced the EU scheme with a new, independent system for cyber sanctions. Even while the UK is able to add, remove, and alter its own sanctions autonomously, the new cyber sanctions system broadly replicates the objectives and operations of the EU framework. The licensing process for its autonomous system, as well as the means by which designated individuals may contest their status, have both been changed in a similar manner in the United Kingdom.
Avoiding Cybercrime Penalties Through Sanctions Compliance
In most countries, the consequences for failing to comply with cyber sanctions include fines and jail terms that vary according to the severity of the offence. Hence, in order to adhere to cyber sanctions, banks, financial institutions, and other required organizations should be informed of the applicable sanctions lists that apply in their jurisdiction. As a result, companies are required to compare their clients' names against sanction lists. Effective cyber sanctions screening should be based on a strong name screening procedure that is implemented as part of a risk-based AML/CFT program. The Sanction Scanner offers products to combat money laundering. You can contact us and request a demo to further learn about our tools.