Kaspersky to shutter US offices, lay off workers after US ban

Kaspersky Lab is shutting down its US offices in response to the US Commerce Department banning the Russian cybersecurity firm from selling or providing its security and anti-virus software to US customers starting July 20th.

“The company has carefully examined and evaluated the impact of the US legal requirements and made this sad and difficult decision as business opportunities in the country are no longer viable,” Kaspersky said in a statement sent to Cybernews on Monday.

As first reported by Kim Zetter in her Zero Day blog, sources say the Moscow-based cybersecurity solutions company told employees of the impending closure and lay-offs on Monday.

The global company, which has called North America “a strategic market for Kaspersky Lab,” said it will “gradually wind down its US operations and eliminate US-based positions” starting this Friday, coinciding with the July 20th deadline.

The move comes after the Biden administration announced last month it would ban the use and sales of all Kaspersky products within the US and to US persons because of the “undue and unacceptable risks to US national security and to the security and safety of US persons.”

The determination also includes through “third-party entities that integrate Kaspersky cybersecurity or anti-virus software into commercial hardware or software,” the published four-page document shows.

Kaspersky operates under Russian jurisdiction

Kaspersky said it has been “operating in the US for close to 20 years, contributing to the nation’s strategic cybersecurity goals by safeguarding organizations and individuals in the country from ever-evolving cyberthreats “

Banning the use of Kaspersky products or services is covered under the “Information and Communications Technology and Services (ICTS) Program, which protects Americans' sensitive data from foreign adversaries, such as Russia, China, North Korea, and more.

The Commerce Department’s Bureau of Industry and Security (BIS) handed down a final ruling on June 20th, giving Kaspersky until September 29th to completely cease all operations.

This will allow Kaspersky to provide support and updates and to give US customers enough time to find alternative security products.

#ICYMI: @BISgov recently announced a Final Determination prohibiting Kaspersky Lab, Inc. from directly or indirectly providing anti-virus software and cybersecurity products or services in the United States or to U.S. persons. https://t.co/yDVMjT1Ejl pic.twitter.com/X7HtGHhMIX

undefined U.S. Commerce Dept. (@CommerceGov) June 24, 2024

Commerce officials say that Individuals and businesses who want to continue using existing Kaspersky products will not be penalized, but note that their network systems will then be at risk.

An initial determination was given to Kaspersky last October, providing the company the opportunity to argue its case to stay operational within US borders.

“Kaspersky does not engage in activities which threaten US national security and, in fact, has made significant contributions with its reporting and protection from a variety of threat actors that targeted US interests and allies,” the company previously said in a statement about the June decision.

Kaspersky, at the time, had also vowed to “pursue all legally available options” to continue its operations in America, although it's not clear where the company stands after today’s announcement, as it seems unlikely they will follow through with legal action.

The reasons provided for the Kaspersky ban include the company having access to sensitive US customer information through administrative privileges, operating under Russian jurisdiction, being capable of installing malicious software or withholding updates, and the proliferation of third-party integrations of Kaspersky software with unknown source code.

Last week, it was reported by Reuters that FBI agents had visited the homes of several of Kaspersky’s US employees as part of "due diligence" for ongoing investigations into the company's operations.

“Russia has shown time and again they have the capability and intent to exploit Russian companies, like Kaspersky Lab, to collect and weaponize sensitive US information," said US Secretary of Commerce Gina Raimondo.

Kaspersky will continue on

According to its website, Kaspersky’s North American division has its headquarters in Massachusetts, with satellite offices in Chicago, Los Angeles, and Toronto opened in 2018.

It’s not clear if the company’s Toronto location will stay open, but Kaspersky revealed less than 50 US employees – also said to be receiving severance packages – will be affected by the closure, reported Zetter.

In 2017, before those offices were built, Kaspersky stated it had about 300 North American employees, including in Washington DC, with some said to be part of its Global Research and Analysis Team.

In Monday's statement, Kaspersky stressed its "business remains resilient, and our key priority remains the same – to protect our customers in any country from cyberthreats."

"Being a global cybersecurity vendor," Kaspersky said it "will continue investing in strategic markets and remain committed to serving its customers and partners and ensuring their protection."

Formed in 1997, the company started selling its software to US customers in 2005 and now has offices in 31 countries.

A day after the Commerce Department announced its ban, the US Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned a dozen Kaspersky executives for operating in the Russian technology sector.

BIS also added three Kaspersky entities – AO Kaspersky Lab and OOO Kaspersky Group (Russia), and Kaspersky Labs Limited (United Kingdom) – to the US government ban list for “cooperating with Russian military and intelligence authorities in support of the Russian Government’s cyber intelligence objectives.”

In 2017, US and British intelligence found Kaspersky had colluded with Putin’s Federal Security Service (FSB), Russia’s intelligence arm, to commit espionage and steal sensitive data, which the company had denied.

That September, the US Department of Homeland Security banned the use of Kaspersky products for all US government agencies. The Biden administration has ramped up efforts in recent years to restrict US companies from importing, exporting, and using foreign technologies and electronics belonging to enemy nation-states.

Kaspersky Lab happened to have celebrated its 27th anniversary with a company-wide birthday party in Moscow this past weekend.