Commerce Secretary Gina Raimondo stated that Russia's influence over the company poses a significant security risk.
A government source explained that the software's privileged access to a computer's systems could enable it to steal sensitive information, install malware, and withhold critical updates, increasing the threat.
Kaspersky's clientele includes critical infrastructure providers and state and local governments.
Raimondo commented during a briefing call with reporters that Russia has demonstrated the capacity and intent to exploit companies like Kaspersky to collect and weaponise Americans' personal information, necessitating the administration's action.
However, a Kaspersky spokesman said that the US decision is based on the current geopolitical climate and theoretical concerns rather than a thorough evaluation of the integrity of Kaspersky's products and services.
In an emailed statement, Kaspersky stated that its activities do not threaten U.S. national security and would explore legal options to maintain its operations.
Previously, Kaspersky claimed it is a privately managed company without ties to the Russian government.
Raimondo said the new rule, using broad powers established by former President Donald Trump’s administration, will be paired with another move to add three units of Kaspersky to a trade restriction list. This could severely damage Kaspersky's reputation and international sales.
Reuters first reported the plan to add the cybersecurity company to the entity list, effectively preventing its US suppliers from selling to it. The timing and details of the software sales prohibition were also reported by Reuters.
These actions illustrate the Biden administration's efforts to eliminate the risks of Russian cyberattacks through Kaspersky software and to continue pressuring Moscow amidst its advancing war efforts in Ukraine. However, it has not been able to demonstrate a situation in which an attack was caused through Kaspersky software.
It would appear that the US is running low on new sanctions to impose on Russia and is moving down its list.
Democratic Senator Mark Warner, chair of the Senate Intelligence Committee, emphasized that it would be unthinkable to sell Russian software with extensive device access to Americans, likening it to giving an adversarial nation the keys to US networks or devices.
The new restrictions on Kaspersky software, including prohibitions on downloads of software updates, resales, and licensing of the product, will take effect on September 29.
Businesses will have 100 days to find alternatives. New U.S. business for Kaspersky will be blocked 30 days after the restrictions are announced.
Sales of white-labelled products incorporating Kaspersky into software sold under a different brand name will also be prohibited. The Commerce Department will inform companies before enforcing action against them.
The Commerce Department will place two Russian and one UK-based Kaspersky units on the entity list for allegedly collaborating with Russian military intelligence to support Moscow's cyber intelligence objectives.
Kaspersky's Russian operations are already subject to extensive US export restrictions due to Moscow's invasion of Ukraine. The new measures will also effectively prevent its UK-based unit from receiving goods from American suppliers.
