Protecting American Intellectual Property Act

The Protecting American Intellectual Property Act (PAIPA) was used by OFAC for the first time in a cyber-sector sanctions action in April 2026, designating Sergey Zelenyuk, his firm Matrix LLC (Operation Zero) and five associated individuals and entities for acquiring and distributing US government cyber tools stolen from L3Harris Trenchant by Peter Williams. PAIPA, enacted in 2022, creates a mandatory sanctions framework for foreign persons who engage in significant theft of US trade secrets including government-developed software tools.

Before the Operation Zero designation, PAIPA had not been applied to a cybersecurity case despite its 2022 enactment. The Act's mandatory-sanctions trigger removes Treasury's discretion: once a qualifying theft is documented, sanctions must be imposed. This distinguishes PAIPA from executive-order-based cyber sanctions (E.O. 13694, the Russia Executive Order) where imposition is discretionary.

For the exploit-brokerage market, the PAIPA designation creates a new legal risk threshold: acquiring or distributing US government-developed tools is now within a mandatory-sanctions framework, not subject to case-by-case discretion. The Operation Zero action demonstrates that OFAC will map and designate the full transactional network, not only the primary operator, using PAIPA as the legal basis.