EU Sanctions Companies in China & Iran for Cyberattacks - Dark Reading

Threat IntelligenceCyberattacks & Data BreachesCybersecurity OperationsCyber RiskNewsBreaking cybersecurity news, news analysis, commentary, and other content from around the world, with an initial focus on the Middle East & Africa and the Asia PacificEU Sanctions Companies in China, Iran for CyberattacksThese rulings prohibit the entities from entering or doing business in the European Union.Nate Nelson,Contributing WriterMarch 19, 20264 Min ReadSource: Wirestock, Inc. via Alamy Stock PhotoThe European Council has imposed sanctions on three ostensibly private companies — two in China, one in Iran — for aiding and carrying out cyberattacks in European countries.One of the two companies based in China, called Integrity Technology Group, is a mid-size publicly traded corporation. It was found to have regularly provided products that hackers used to compromise devices in Europe, not to mention the rest of the world. The European Council linked it to 65,000 compromised devices across six European Union (EU) countries between 2022 and 2023 alone.The most notorious of the bunch, though, is Anxun Information Technology, better known to the West as "iSoon." ISoon is a hack-for-hire operation that has worked on behalf of China's government and military, though it purports to be a cybersecurity training company. In addition to the company itself, iSoon's two founders have also been sanctioned as individuals.Related:Russia's Forest Blizzard Nabs Rafts of Logins via SOHO RoutersThe Iranian company, transliterated as "Emennet Pasargad," is being punished for hacking a Swedish SMS service, performing a data leak attack against a French organization, and for spreading disinformation via advertising billboards during the 2024 Paris Olympic Games.All three companies have already been sanctioned by the governments in the US and UK. Now that they're sanctioned in Europe, they will no longer be able to do business in the EU, any assets they possess in the EU will be frozen, and those two co-founders will no longer be allowed to travel to any EU countries.Why Countries Use Companies to Conduct CyberattacksIf public reports are a guide, China and Iran weaponize private sector companies to support state-level cyber operations quite liberally; but they're far from the only countries that do it. Russia, Israel, and even the US have been known to cross that same line."This is common," says Adam Meyers, head of counter adversary operations at CrowdStrike. "They're all kind of doing the same thing, where they're effectively supporting the need for technical capabilities, infrastructure development capabilities, exploit development, planning, etc., for the military units in those countries" through corporations.In China, Meyers says, the People's Liberation Army (PLA) has maintained close connections in the private sector and academia since the 1990s. By contrast, "Iran had a different path to get there. I think Stuxnet was a watershed moment, where they realized, 'Oh, wow, you could do all this stuff with cyber, and there's asymmetric capabilities.' And when that happened, we started seeing that folks were dropping their hacker names and building professional portfolios on LinkedIn." They started to build companies, they did the training, and were effectively meeting the demand for cyber capabilities at the Ministry of Intelligence and Security (MOIS) and Islamic Revolutionary Guard Corps (IRGC), Meyers adds.Related:Iran Hacktivists Make Noise but Have Little Impact on WarOne obvious benefit of running cyberattacks through quasi-private institutions, for a nation-state, is that it affords some degree of plausible deniability. That's especially true when those institutions are more than just thin shell companies. "Ultimately, having a legitimate commercial offering strengthens an organization's cover and makes it more challenging for law enforcement to discern legitimate work from malicious behavior," says Crystal Morin, senior cybersecurity strategist at Sysdig. There are a wealth of other resources, too, that are more freely available to companies than states, particularly widely maligned states. "Existing as a 'company' makes it easier to recruit talent, who may or may not be privy to the backroom activities that go beyond the scope of their day-to-day responsibilities. Infrastructure and tools can be purchased through the global supply chain under the guise of normal business operations, with legitimate tax IDs and credentials, which might otherwise be cut off when sanctioned," Morin notes. "A privatized workforce can also operate with fewer bureaucratic constraints than government entities." Related:SideWinder Espionage Campaign Expands Across Southeast AsiaDo Sanctions Work?In a way, this week's sanctions were years in the making.Back in the mid-2010s, Europe suffered repeated, world-historic cyberattacks: Wannacry, NotPetya, election interference campaigns, and power grid shutdowns, to name a few. In response, the European Council in June 2017 created a "Cyber Diplomacy Toolbox," a general outline of what levers it could pull to rein in these attacks. Sanctions were the sharpest of those levers, and in May 2019 the council formalized how those sanctions would work in practice. It has since applied those sanctions against seven entities and 19 individuals.For some of those entities, sanctions carry a real, serious cost. Integrity Technology Group, for instance, is publicly traded on the Shanghai Stock Exchange, with tens of millions of dollars in annual revenue and around 500 employees. For them, Morin says, "legitimate businesses, partners, and customers will cut ties to avoid regulatory reprimand. That quickly limits the organization's access to funding, infrastructure, and global supply chain markets. While sanctions do not disrupt nefarious operations, they reduce funding and the ability to operate in the open, and impact the reputation of the company and the individuals who work for it."For fake companies like iSoon, though, the sanctions don't make quite the same impact. "Does it have a material impact on their ability to do business? Probably not," Meyers admits. "Are the founders going to be going to Disneyland for vacation? Probably not."Read more about:DR Global Asia PacificAbout the AuthorNate NelsonContributing WriterNate Nelson is a journalist and scriptwriter. He writes for "Darknet Diaries" — the most popular podcast in cybersecurity — and co-created the former Top 20 tech podcast "Malicious Life." Before joining Dark Reading, he was a reporter at Threatpost.See more from Nate NelsonWant more Dark Reading stories in your Google search results?Add Us NowMore InsightsIndustry ReportsCISO Survey 2026: The State of Incident Response ReadinessAI SOC for MDR: The Structural Evolution of Managed Detection and ResponseHow Enterprises Are Developing Secure ApplicationsKuppingerCole Business Application Risk Management Leadership Compass2026 CISO AI Risk ReportAccess More ResearchWebinarsDefending Against AI-Powered Attacks: The Evolution of Adversarial Machine LearningZero Trust Architecture for Cloud environments: Implementation RoadmapTips for Managing Cloud Security in a Hybrid Environment?Security in the AI AgeIdentity Maturity Under Pressure: 2026 Findings and How to Catch UpMore WebinarsEditor's ChoiceVulnerabilities & ThreatsEDR-Killer Ecosystem Expansion Requires Stronger BYOVD DefensesEDR-Killer Ecosystem Expansion Requires Stronger BYOVD DefensesbyRob WrightApr 14, 20268 Min ReadWant more Dark Reading stories in your Google search results?2026 Security Trends & OutlooksThreat IntelligenceCybersecurity Predictions for 2026: Navigating the Future of Digital ThreatsJan 2, 2026Cyber RiskNavigating Privacy and Cybersecurity Laws in 2026 Will Prove DifficultJan 12, 2026|7 Min ReadEndpoint SecurityCISOs Face a Tighter Insurance Market in 2026Jan 5, 2026|7 Min ReadThreat Intelligence2026: The Year Agentic AI Becomes the Attack-Surface Poster ChildJan 30, 2026|8 Min ReadDownload the CollectionKeep up with the latest cybersecurity threats, newly discovered vulnerabilities, data breach information, and emerging trends. 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