Explained: How a 2019 executive order was used for US Ban on Kaspersky

On Thursday, the US Commerce Department banned Russia-based antivirus company Kaspersky from selling its products in the country due to national security concerns. The US administration, based on an investigation, has found that the continued operations create a security risk due to the Russian government’s alleged influence. Commerce Secretary Gina Raimondo said that the US took this decision due to Russia's "capacity and... intent to collect and weaponise the personal information of Americans".

Kaspersky is allowed to continue a few sets of operations such as providing antivirus updates till September 29, till consumers and businesses find suitable alternatives. The antivirus company, which has more than 400 million users in 31 countries, has strongly contested the US’ ban.

In an email response to TechCircle’s query, Kaspersky’s spokesperson denied allegations of its engagement in activities that threaten US national security, calling the Commerce Department’s decision unfair. “Despite proposing a system in which the security of Kaspersky products could have been independently verified by a trusted 3rd party, Kaspersky believes that the Department of Commerce made its decision based on the present geopolitical climate and theoretical concerns, rather than on a comprehensive evaluation of the integrity of Kaspersky’s products and services.” The company further added the ban would benefit cybercriminals and disrupt its customers’ security posture. 

Advisory that led to Kaspersky ban

To be sure, the ban is issued using a Trump administration-era executive order. In May 2019, then-President Donald Trump issued an executive order prohibiting US companies from using telecom services that are solely owned and controlled by a foreign adversary. It was this order that led the way for a ban on the China-based Huawei, then. 

The Trump-era advisory gave the Commerce Department the power to investigate whether certain companies pose a national security risk. In the case of Kaspersky’s ban, the US Commerce Department has coupled the Trump-era advisory with another move to include three units of the company in a trade restriction list. 

Notably, in 2017, the Department of Homeland Security banned Kaspersky’s flagship antivirus product from federal networks, alleging ties to Russian intelligence. Further, apart from the US, the Canadian government banned Kaspersky applications from government mobile devices in October 2023, saying they “present an unacceptable level of risk to privacy and security.”

Last week, Kaspersky also reported financial results for 2023 reporting that it made global non-audited combined revenue of $721 million, down 4 percent year over year, owing drop in foreign exchange rates.

Is there any impact on Indian market

Kaspersky is a leading player in the Indian cybersecurity market. In an interview with TechCircle in September 2023, Adrian Hia, the company MD for APAC region, said, “It is an exciting time to be doing business in India, which is in fact, our fastest growing region in the APAC region.” The company has huge potential for demand from the BFSI, manufacturing, and the oil and gas industry. Kaspersky will also be increasing its workforce strength by 30% in 2024, he added. The US' ban on Kaspersky’s operations doesn’t impact the company’s market in India. 

In this context, it is important to note that a few Indian companies face sanctions for dealings with Russia, amid the country’s war with Ukraine. Sanctions are financial and trade-related penalties imposed by one country on another entity (a country, company, or individual). For instance, a Bengaluru-based Si2 Microsystems, also a MeitY partner for the Atmanirbhar Bharat initiative, was sanctioned by the European Union for its Russia dealings of dual-use tech (which can be used for both civilian and military purposes) in February. 

The same company was banned by the US earlier in November, “for providing support to Russia’s military and/or defense industrial base” by exporting chips without a license. On Monday, Japan joined the US and EU in imposing sanctions on the company.