FireEye is highlighting a cyber espionage operation targeting crucial
technologies and traditional intelligence targets from a China-nexus
state sponsored actor we call APT40. The actor has conducted
operations since at least 2013 in support of China’s naval
modernization effort. The group has specifically targeted engineering,
transportation, and the defense industry, especially where these
sectors overlap with maritime technologies. More recently, we have
also observed specific targeting of countries strategically important
to the Belt and Road Initiative including Cambodia, Belgium, Germany,
Hong Kong, Philippines, Malaysia, Norway, Saudi Arabia, Switzerland,
the United States, and the United Kingdom. This China-nexus cyber
espionage group was previously reported as TEMP.Periscope and TEMP.Jumper.
In December 2016, China’s People Liberation Army Navy (PLAN) seized
a U.S. Navy unmanned underwater vehicle (UUV) operating in the South
China Sea. The incident paralleled China’s actions in cyberspace;
within a year APT40 was observed masquerading as a UUV manufacturer,
and targeting universities engaged in naval research. That incident
was one of many carried out to acquire advanced technology to support
the development of Chinese naval capabilities. We believe APT40’s
emphasis on maritime issues and naval technology ultimately support
China’s ambition to establish a blue-water navy.
In addition to its maritime focus, APT40 engages in broader regional
targeting against traditional intelligence targets, especially
organizations with operations in Southeast Asia or involved in South
China Sea disputes. Most recently, this has included href="https://www.fireeye.com/blog/threat-research/2018/07/chinese-espionage-group-targets-cambodia-ahead-of-elections.html">victims
with connections to elections in Southeast Asia, which is likely
driven by events affecting China’s Belt and Road Initiative. China’s
“One Belt, One Road” (一带一路) or “Belt and Road Initiative” (BRI) is a
$1 trillion USD endeavor to build land and maritime trade routes
across Asia, Europe, the Middle East, and Africa to develop a trade
network that will project China’s influence across the greater region.

Figure 1: Countries and industries
targeted. Countries include the United States, United Kingdom,
Norway, Germany, Saudi Arabia, Cambodia and Indonesia
We assess with moderate confidence that APT40 is a state-sponsored
Chinese cyber espionage operation. The actor’s targeting is consistent
with Chinese state interests and there are multiple technical
artifacts indicating the actor is based in China. Analysis of the
operational times of the group’s activities indicates that it is
probably centered around China Standard Time (UTC +8). In addition,
multiple APT40 command and control (C2) domains were initially
registered by China based domain resellers and had Whois records with
Chinese location information, suggesting a China based infrastructure
procurement process.
APT40 has also used multiple Internet Protocol (IP) addresses
located in China to conduct its operations. In one instance, a log
file recovered from an href="https://www.fireeye.com/blog/threat-research/2018/07/chinese-espionage-group-targets-cambodia-ahead-of-elections.html">open
indexed server revealed that an IP address (112.66.188.28)
located in Hainan, China had been used to administer the command and
control node that was communicating with malware on victim machines.
All of the logins to this C2 were from computers configured with
Chinese language settings.
Initial Compromise
APT40 has been observed leveraging a variety of techniques for
initial compromise, including web server exploitation, phishing
campaigns delivering publicly available and custom backdoors, and
strategic web compromises.

Figure 2: APT40 attack lifecycle
Establish Foothold
APT40 uses a variety of malware and tools to establish a foothold,
many of which are either publicly available or used by other threat
groups. In some cases, the group has used executables with code
signing certificates to avoid detection.
Escalate Privileges
APT40 uses a mix of custom and publicly available credential
harvesting tools to escalate privileges and dump password hashes.
Internal Reconnaissance
APT40 uses compromised credentials to log on to other connected
systems and conduct reconnaissance. The group also leverages RDP, SSH,
legitimate software within the victim environment, an array of native
Windows capabilities, publicly available tools, as well as custom
scripts to facilitate internal reconnaissance.
Lateral Movement
APT40 uses many methods for lateral movement throughout an
environment, including custom scripts, web shells, a variety of
tunnelers, as well as Remote Desktop Protocol (RDP). For each new
system compromised, the group usually executes malware, performs
additional reconnaissance, and steals data.
Maintain Presence
APT40 primarily uses backdoors, including web shells, to maintain
presence within a victim environment. These tools enable continued
control of key systems in the targeted network.
Complete Mission
Completing missions typically involves gathering and transferring
information out of the target network, which may involve moving files
through multiple systems before reaching the destination. APT40 has
been observed consolidating files acquired from victim networks and
using the archival tool rar.exe to compress and encrypt the data
before exfiltration. We have also observed APT40 develop tools such as
PAPERPUSH to aid in the effectiveness of their data targeting and theft.
Despite increased public attention, APT40 continues to conduct cyber
espionage operations following a regular tempo, and we anticipate
their operations will continue through at least the near and medium
term. Based on APT40’s broadening into election-related targets in
2017, we assess with moderate confidence that the group’s future
targeting will affect additional sectors beyond maritime, driven by
events such as China’s Belt and Road Initiative. In particular, as
individual Belt and Road projects unfold, we are likely to see
continued activity by APT40 which extends against the project’s
regional opponents.