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Amid NSO scandal, Israel said to ban cyber tech sales to 65 countries

In potential major blow to industry, Defense Ministry reportedly scales down list of eligible states to just 37, dropping the UAE, Morocco, Saudi Arabia and dozens of others

A logo adorns a wall on a branch of the Israeli NSO Group company, near the southern Israeli town of Sapir, on August 24, 2021. (AP/Sebastian Scheiner)
A logo adorns a wall on a branch of the Israeli NSO Group company, near the southern Israeli town of Sapir, on August 24, 2021. (AP/Sebastian Scheiner)

The Defense Ministry has dramatically scaled back the number of countries to which Israeli companies can sell cyber technologies amid global fallout over Israeli spyware firm NSO Group, according to a report Thursday.

The updated November list consists of 37 countries, down from 102, according to the Calcalist business news daily.

Countries with questionable human rights records, including Israel’s new allies Morocco and the UAE, have been removed, the report said.

Other dropped countries include Saudi Arabia and Mexico. The Saudis allegedly used NSO’s Pegasus spyware to monitor Washington Post journalist Jamal Khashoggi, who was killed in the Saudi Consulate in Istanbul in 2018. Mexico has also been said to use the surveillance technology on journalists and activists.

However, India — which was also accused of using NSO technology on journalists, opposition politicians, and activists — remains on the updated list.

The new rules are expected to deal a serious blow to Israel’s cyber technology industry, according to the report.

NSO Group has faced a torrent of international criticism over allegations it helps governments spy on dissidents and rights activists. NSO insists its product is meant only to assist countries in fighting crime and terrorism.

The firm’s flagship spyware, Pegasus, is considered one of the most powerful cyber-surveillance tools available on the market, giving operators the ability to effectively take full control of a target’s phone, download all data from the device, or activate its camera or microphone without the user knowing.

The United States Department of Commerce weeks ago announced it was blacklisting NSO, restricting the Herzliya-based firm’s ties with American companies over allegations that it “enabled foreign governments to conduct transnational repression.”

On Tuesday, Apple sued NSO Group for targeting the users of its devices, saying the firm at the center of the Pegasus surveillance scandal needs to be held accountable.

“To prevent further abuse and harm to its users, Apple is also seeking a permanent injunction to ban NSO Group from using any Apple software, services, or devices,” Apple said in a statement announcing the lawsuit.

A branch of the Israeli NSO Group company, near the southern Israeli town of Sapir, on August 24, 2021. (AP Photo/Sebastian Scheiner)

Apple is also seeking unspecified damages from NSO Group over what it says is the time and money it cost to respond to the spyware maker’s alleged abuse of its products, adding in its statement that it would donate any payouts to organizations that expose such spyware.

“This is Apple saying, ‘If you do this, if you weaponize our software against innocent users, researchers, dissidents, activists or journalists, Apple will give you no quarter,’” Apple’s head of security, Ivan Krstic, told The New York Times on Monday.

This was the second time NSO Group has been targeted by a major US firm, with Facebook suing the Israeli company in 2019 for alleged targeting users of its WhatsApp messaging application.

Earlier this month, a US Court of Appeals rejected a motion by NSO Group to throw out Facebook’s suit against it. In a 3-0 vote, the court rejected NSO’s defense that it “could claim foreign sovereign immunity,” opening up the firm to additional suits such as the one filed by Apple on Tuesday.

Earlier this week, the Moody’s credit rating agency published figures indicating that NSO Group is at growing risk of defaulting on about $500 million of debt amid upcoming cash flow issues following the US blacklisting.

Agencies, Jacob Magid, and Ricky Ben David contributed to this report. 

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