Under scrutiny, Kaspersky Lab considers changes to U.S. subsidiary

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WASHINGTON (Reuters) – Moscow-based cyber security firm Kaspersky Lab said on Tuesday it is considering making changes to its subsidiary dedicated to selling products to the U.S. government, amid allegations the company may be vulnerable to Russian government influence.

The decision comes as the U.S. Senate is voting this week on a defense policy spending bill that includes language that would ban Kaspersky Lab products from being used by U.S. government agencies.

“Given that U.S. government sales have not been a significant part of the company’s activity in North America, Kaspersky Lab is exploring opportunities to better optimize the Washington D.C. office responsible for threat intelligence offerings to U.S. government entities,” a Kaspersky spokeswoman said in a statement to Reuters.

She added that the company was planning to open new offices in Chicago, Los Angeles and Toronto in 2018.

Kaspersky has repeatedly denied that it has ties to any government and said it would not help any government with cyber espionage. It said there is no evidence for accusations by U.S. officials and lawmakers that its anti-virus software may be used to provide espionage services to the Kremlin.

The company, however, has not been able to shake the allegations. Last week, Best Buy Co, the No.1 U.S. electronics retailer, said it was pulling Kaspersky Lab’s cyber security products from its shelves and website.

Citing two unidentified sources, The Bell, a Russian-language news outlet, said on Tuesday that Kaspersky Lab was considering closing its offices in Arlington, Virginia, a Washington suburb.

Those offices, home to the Kaspersky Lab subsidiary KGSS that is dedicated to the U.S. federal market, were empty when a Reuters reporter visited them in July. A Kaspersky spokeswoman at the time said most of the staff, which number less than 10, often work from home.

Kaspersky Lab, was founded in 1997 and now counts over 400 million global customers. It has tried largely in vain to become a vendor to the U.S. government, one of the world’s biggest buyers of cyber tools.

Longstanding suspicions about the company grew in the United States when U.S.-Russia relations deteriorated following Russia’s 2014 annexation of Crimea and later when U.S. intelligence agencies determined that Russia interfered in the 2016 U.S. presidential election using cyber means.