Government’s Kaspersky Ban Takes Effect

A new procurement rule took effect Monday barring the Russian anti-virus company Kaspersky Lab or any of its partners or distributors from contracts at the Pentagon, General Services Administration or NASA, despite a last-minute Kaspersky effort to halt the ban.

Kaspersky told a federal appeals court last week that the ban would cause the company “reputational and financial damage” and asked the court to temporarily halt the ban while it considers Kaspersky’s underlying legal challenge.

The U.S. Court of Appeals for the D.C. Circuit denied that request late Friday. The one-sentence ruling stated Kaspersky had “not satisfied the stringent requirements for an injunction pending appeal.”

The December 2017 congressional ban was sparked by intelligence agencies’ allegation that Kaspersky executives are too closely tied to the Kremlin and the Homeland Security Department’s conclusion that a Russian cybersecurity law might compel Kaspersky to help Russian intelligence agencies spy on the U.S. government.

Kaspersky has consistently denied any undue influence by the Kremlin and said the Homeland Security Department is misreading the Russian law.

Kaspersky told Nextgov in a statement that the company “is disappointed that the appellate court did not grant the company’s motion to stay … but remains hopeful that the court will find the law unconstitutional after full consideration of the case on the merits.”

Kaspersky’s broad legal argument against the U.S. ban is that Congress unfairly singled it out for punishment without sufficient legal process—what’s called a “bill of attainder.” A U.S. district court judge dismissed that claim in May, saying Congress’s goal was to protect national security, not to punish Kaspersky.

That’s the ruling Kaspersky is appealing.

Kaspersky software has already been scrubbed from all civilian government systems because of a separate ban imposed by Homeland Security in October. Government lawyers argued that meant it was pointless to stall the congressional ban because it would have no practical effect.

Kaspersky disputed that claim in its unsuccessful argument to the appeal court. Putting the congressional ban into effect will damage Kaspersky’s reputation—and its U.S. private-sector sales—even if the ban itself doesn’t lose the company any business, the motion said.

Kaspersky and the government are scheduled to make oral arguments in the case in September.

Congress is likely to enact similar governmentwide contracting bans targeting the Chinese companies Huawei and ZTE in the 2019 version of an annual defense policy bill that’s currently being squared away by a House-Senate conference committee.

The White House has proposed legislation that would make such bans easier in both civilian and defense agencies.