Nation States' Espionage and Counterespionage

Should you be concerned by shrill warnings of nation-based economic espionage? 30-year CIA veteran Christopher Burgess looks at the current landscape of "the second-oldest profession" and what the corporate world needs from the government.

By Christopher Burgess

February 13, 2008 — CSO —

Note: Abridged from “Overview of the 2007 Global Economic Espionage Landscape”, which was post in April as Nation States' Economic Espionage. (A shorter excerpt was also published in CSO Magazine under the headline Spy Vs. Spy.)

Throughout 2007 we have seen numerous governments striking the alarm bells and warning all: Protect yourself! The thieves are coming! These warnings of nation-state sponsored activities in the realm of industrial espionage have truly reached critical levels within the developed world. The warnings are applicable to all nations, industrial sectors, and companies – and not just to those who have stepped forward and accepted the political risk of calling out the unsavory activities taking place in the market. These pronouncements are quickly followed by a yet another government standing up a new or improved counterintelligence or counterespionage entity within their domain in order to protect their country’s interests in both the public and in the private sector from these self-pronounced and empowered nations whose intelligence apparatus are targeting the intellectual properties of the world’s corporations.

The playing field is crowded with actors both new and old. Amazingly, the combined level of activity exceeds any level previously encountered, including the apex of the Cold War, when geopolitical and ideological battle lines truly existed – but when current level of communications infrastructure around the globe did not. It is this enhancemed communications infrastructure which has in essence leveled this playing field of industrial espionage for all the nation states.

Now, more than eight years since the climax of the Cold War, the threat of industrial and economic espionage has percolated once again to the forefront. The tools of the intelligence collector are once again being brought out and dusted off and put to use as nations make use of what is referred to as the “second-oldest profession.” They are willing to make the political decision to support their indigenous corporations and companies with the provision of competitors’ intellectual property the old fashion way – they will just take it.

In mid-November 2007, the US Department of Justice (DOJ) compiled and released a “Fact Sheet: Major U.S. Export Enforcement Actions in the Past Year” which summarized the 33 major cases (October 2006-October 2007) and prosecutions of illegal export of US technologies (including those which were acquired through espionage activities). Interestingly, the number of countries identified totaled ten, with Iran and China each responsible for approximately a third of the cases. Equally interesting is that none of the cases involving Iran were characterized as espionage. Of the four cases which were identified as “espionage,” all four cases identified China as the nation-state sponsor.  And equally remarkable is how Russia is conspicuous in their absence and does not appear in the Fact Sheet. This is especially noteworthy given Russian President Vladimir Putin’s call to the new head of Russia’s external intelligence service, Sluzhba Vneshny Razvedki (SVR), former Prime Minister Mikhail Fradkov in October 2007 to build up the SVR’s Economic Espionage capabilities.

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• Intellectual Property Protection: The Basics
• Corporate Spying: Snooping, by Hook or by Crook
• Bill Boni and Ira Winkler on Insider Threats and the Death by 1,000 Cuts
• Industrial Espionage: Secrets Stolen, Fortunes Lost
• I've Got a Trade Secret