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In Depth

Nation States' Espionage and Counterespionage

An overview of the 2007 Global Economic Espionage Landscape

By Christopher Burgess

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Russia's Putin throws down the gauntlet
On October 20, 2007, Russian President Vladimir Putin, at a Moscow ceremony, introduced the new head of Russia's external intelligence service, Sluzhba Vneshney Razvedki (SVR), former Prime Minister Mikhail Fradkov. According to Russian press coverage of the event, in addition to introducing Fradkov, Putin projected in a clear and unambiguous manner his expectations of the SVR, including continuing to fight terrorism and building up its "economic espionage" capabilities. Putin is quoted as saying the SVR "must be able to swiftly and adequately evaluate changes in the international economic situation, understand their consequences for the domestic economy and, of course, it's necessary to more actively protect the economic interest of our companies abroad." Putin's careful selection of words effectively puts a marker on the table.

Couple this with Putin's directive at the end of November 2007 to have the Russia Federation engage in more technical intelligence gathering. Putin revealed his expectations on the level of support for this initiative when he said, "In the government, we will hold a meeting with the Academy of Sciences, with necessary government officials at the ministerial level, with the leadership of the [Russian state corporation Rostekhnologii], the Defence Ministry, the General Staff and the special services of departments that work in this sphere." Yevgeniy Primakov, former Prime Minister (1998-1999) and director of the SVR (1991-1996) provided further clarity when he noted that Rostekhnologii is a "serious mechanism, which brings together achievements of the defence industry and feeds the civilian sector." Primakov continued, "When the entire industry was state-owned, [information from technical intelligence] was given to all, but now one needs a body that would give it also to private enterprises," according to an ITAR-Tass news report.

Perhaps there is reason for concern if your firm competes with a Russian firm; or sells to a government that Russia may perceive as a potential foe; or if your intellectual property is a dual-use technology that may be of interest to Russia for their military or national security interests. To Putin's credit, he has placed individuals who know a good bit about intelligence in position to lead the execution of his mission statement, and his message is consistent.

China's understanding of economic espionage starts at the top

Meanwhile in China, the end of August 2007 saw a quiet position shuffle within the Ministry of State Security (MSS), well ahead of the October Communist Party Congress, during which Geng Huichang, vice-minister for state security (since 1998), was promoted to the position of minster of state security, China's internal intelligence and security organization. According to the International Herald Tribune, Geng understands the value of commercial intelligence, having been involved in the policy and strategy of both protecting and obtaining commercial secrets since at least 1998. It was noted how, in February 1998, Geng delivered a lecture at the Commerce Ministry in which he spoke on these very topics some nine years ago. Perhaps observers should consider his appointment as an indication of the value China places on the acquisition of intellectual property belonging to others.