WASHINGTON, June 20 (Reuters) - The Biden administration

on Thursday announced plans to bar the sale of antivirus

software made by Russia's Kaspersky Lab in the United States,

citing the firm's large U.S. customers, including critical

infrastructure providers and state and local governments.

Moscow's influence over the company was found to pose a

significant risk, Commerce Secretary Gina Raimondo said on a

briefing call with reporters on Thursday. The software's

privileged access to a computer's systems could allow it to

steal sensitive information from American computers or install

malware and withhold critical updates, enhancing the threat, a

source added.

"Russia has shown it has the capacity and... the intent

to exploit Russian companies like Kaspersky to collect and

weaponize the personal information of Americans and that is why

we are compelled to take the action that we are taking today,"

Raimondo said on the call.

Kaspersky Lab and the Russian Embassy did not respond to

requests for comment. Previously, Kaspersky has said that it is

a privately managed company with no ties to the Russian

government.

The sweeping new rule, using broad powers created by the

Trump administration, will be coupled with another move to add

three units of the company to a trade restriction list, Raimondo

said, dealing a blow to the firm's reputation that could hammer

its overseas sales.

The plan to add the cybersecurity company to the entity

list, which effectively bars a company's U.S. suppliers from

selling to it, and the timing and details of the software sales

prohibition were first reported by Reuters.

The moves show the Biden administration is trying to stamp

out any risks of Russian cyberattacks stemming from Kaspersky

software and keep squeezing Moscow as its war effort in Ukraine

has regained momentum and as the United States has run low on

fresh sanctions it can impose on Russia.

It also shows the administration is harnessing a powerful

new authority that allows it to ban or restrict transactions

between U.S. firms and internet, telecom and tech companies from

"foreign adversary" nations like Russia and China.

The tools are largely untested.

Former President Donald Trump used them to try to bar

Americans from using Chinese social media platforms TikTok and

WeChat, but federal courts halted the moves.

The new restrictions on inbound sales of Kaspersky software,

which will also bar downloads of software updates, resales and

licensing of the product, kick in on Sept. 29, 100 days after

publication, to give businesses time to find alternatives. New

U.S. business for Kaspersky will be blocked 30 days after the

restrictions are announced.

Sales of white-labeled products - that integrate Kaspersky

into software sold under a different brand name - will also be

barred, the source said, adding that the Commerce Department

will notify companies before taking enforcement action against

them.

The Commerce Department will also entity list two Russian

and one UK-based unit of Kaspersky for allegedly cooperating

with Russian military intelligence to support Moscow's cyber

intelligence goals.

Kaspersky's Russian business is already subject to sweeping

U.S. export restrictions over Moscow's invasion of Ukraine. But

its UK-based unit will now be effectively barred from receiving

goods from American suppliers.

GROWING PRESSURE

Kaspersky has long been in regulators' crosshairs. In 2017,

the Department of Homeland Security banned its flagship

antivirus product from federal networks, alleging ties to

Russian intelligence and noting Russian law lets intelligence

agencies compel assistance from Kaspersky and intercept

communications using Russian networks.

Media reports at the time alleged Kaspersky Lab was involved

in taking hacking tools from a National Security Agency employee

that ended up in the hands of the Russian government. Kaspersky

responded by saying it had stumbled upon the code but said no

third parties saw it.

Pressure on the company's U.S. business grew after Moscow's

move against Kyiv. The U.S. government privately warned some

American companies the day after Russia invaded Ukraine in

February 2022 that Moscow could manipulate software designed by

Kaspersky to cause harm, Reuters reported.

The war also prompted the Commerce Department to ramp up a

national security probe into the software, first reported by

Reuters, that resulted in Thursday's action.

The delayed unveiling of the prohibition is due in part to a

"significant back and forth" with Kaspersky, which proposed

mitigating measures instead of an outright ban, the source said.

However, the agency concluded that the threats, especially

the ties to the Russian government, meant "there really were no

mitigating measures that could be implemented to address those

risks."

Under the new rules, sellers and resellers who violate the

restrictions will face fines from the Commerce Department, the

source added. If someone willfully violates the prohibition, the

Justice Department can bring a criminal case. Software users

will not face legal penalties but will be strongly encouraged to

stop using it.

Kaspersky, which has a British holding company and

operations in Massachusetts, said in a corporate profile that it

generated revenue of $752 million in 2022 from more than 220,000

corporate clients in some 200 countries. Its website lists

Italian vehicle maker Piaggio, Volkswagen's

retail division in Spain and the Qatar Olympic Committee among

its customers.