Spies, Lies and Secrets: 37 Industrial Espionage Tactics that

Threaten to Kill Your International Business.

By Santiago A. Cueto

Industrial Espionage is the biggest threat to U.S. business interests. No other threat even comes

close.

It’s the fastest and least expensive way for our foreign competitors to bridge the innovation gap

with the U.S.

Using cutting-edge technology and age-old

techniques of deceit and manipulation, corporate

spies are the greatest post-cold war threat to

international business.

Today’s international conflicts are not limited to

nation to nation disputes. Increasingly, they include

corporation versus corporation.

The recent trial between U.S.-based Apple and

South Korean technology giant Samsung is just one

example of the epic battle raging over the world’s

most coveted trade secrets.

Industrial Espionage

At its essence, Industrial espionage is the process of illegally and unethically gaining confidential

information from other companies – formulas, algorithms, strategic plans, and other intellectual

“Perhaps the biggest group of

villains to look out for are foreign

governments. Foreign governments

often engage their own intelligence

services to acquire trade or research

secrets for their own national

purposes or industries.”

property to gain a competitive edge over a competitor. Having company secrets stolen by a

competitor is costly and can be lethal to your global business.

That’s why it’s never been more important for American executives to educate themselves on the

range of corporate espionage tactics used against them.

The Villains: Employees, Recruiters and Foreign Governments.

Employees are perhaps the most prevalent threat given their ability to access and steal

documents, files, customer lists, and trade secrets. Lured by financial gain, employees are highly

motivated to steal information and sell their company’s proprietary secrets to the highest bidder.

Another group of villains to look out for are corporate recruiting agencies. Competitors will

often use recruiters to hire away employees of a target company for the sole purpose of

collecting critical information.

Perhaps the biggest groups of villains to look out for are foreign governments. Foreign

governments often engage their own intelligence services to acquire trade or research secrets for

their own national purposes or industries. Other villains to look out for are private investigative

firms, hackers and thieves.

37 Espionage Tactics

Below is a comprehensive list of spy tactics that every American executive and in-house counsel

should be familiar with. The list put together by the Dictionary of International Trade Handbook

of the Global Trade Community, serves as an excellent overview of the things to look out for in

you international business dealings.

As you’ll see, the list includes spying by current employees, former employees, computer

hackers, and the full gamut of Cold War-style intelligence techniques.

Traditional Espionage

1.Theft: Stealing information or products

2. Blackmail: using threat or intimidation to extort information

3. Mole planting: a double agent is embedded and gains the trust of a competing company

4. Eavesdropping: ranges from wiretapping phones to intercepting WIFI signals and emails.

5. Seduction: timeless technique using sexual offers to get information out of an individual.

6. Bribery: influence someone by offering money to gain information or prompt illegal action.

7. Foreign intelligence recruits: business intelligence agencies, such as Kroll, recruit former

Cold War intelligence officers for commercial intelligence purposes.

8. Hiring competitors’ employees: hiring away critical employees from a competitor.

9. Bogus job interviews: Fake interview of candidates solely for the purpose of collecting key

information on their current employers.

10. Bogus purchase negotiations: Companies pose as “buyers” in order to gain key information

from a competitor.

11. Research under false pretenses: “Author” uses research paper as ruse to gain key

information from a competitor.

12. Corporate communication intercepts: Intercepting telephone calls through public switch

exchange.

13. Using familial connections: conversations with unsuspecting relatives working for

competing companies.

14. Trade fair conversations: establishing a contact at trade fairs, particularly with experts

having a high level of understanding of innovative technology.

15. Using commonalities: targeting individuals with common language, cultural heritage or

religion to gain key information.

16. Naturalized citizens: appealing to naturalized citizens to provide information for patriotic or

loyalty reasons or threatening family members in the home country.

17. Repatriating naturalized citizens: lure naturalized citizens back to the home country to

employ process and methods used by the foreign company.

18. Government debriefing: government debriefing of its citizens to acquire information upon

their return from a foreign country.

19. Dumpster diving: going through a competitor’s trash to find key information. This is the

tactic that spawned the billion-dollar paper shredding industry.

20. Outsourcing/Delocalization: Foreign outsourcing can exploit methods, processes or

information. Delocalizing under license often leads to a loss of security n countries unbound by

copyright or trademark laws.

21. Front companies and organizations: foreign competitors may pose as software vendors or

even nonprofit organizations to access a competitor’s trade secrets.

22. Joint venture & bidding process: foreign purchasers may prompt companies to provide a

great deal of data in the bidding process, compromising valuable proprietary information.

23. Close proximity: joint ventures and strategic alliances may put unscrupulous personnel in

close proximity with a firm’s key personnel or technology.

24. Mergers & acquisitions: mergers and acquisitions often allow a new company to acquire

certain technologies not in their prior possession.

25. Negotiating: Buyers make excessive technology information demands during negotiations.

26. Third-party acquisition: This type of acquisition of companies and technologies often

indicate a diversion or a transfer of technology. It’s possible that final recipients are actually

embargoed individuals, businesses or countries that cannot otherwise get the technology

themselves.

27. Import-export front: import/export companies may be involved with illegal exporting of

sensitive or illegal documents, data or other items in the country of export.

28. Altered products or false certifications: domestic companies serve as fronts for getting

export controlled products to an undisclosed end user by falsifying end-user certificates.

29. University research: industrial spies are often placed in university research facilities by

government intelligence services or even by commercial competitors.

Computer Espionage

30. Copy files: Easily copy computer files with miniature USB drives and pass them on to other

individuals, businesses or governments.

31. Computer hacking: attempts to illegally gain access to a computer file or network or to do

so without proper authorization.

32. Information requests: Requests for sensitive information, particularly over the internet, to

unsuspecting low or mid-level personnel.

Travel Espionage

33. Luggage or laptop theft: Foreign business people are targets for numerous tactics.

Briefcases and luggage in hotel rooms can be searched for sensitive data and copied; the same

applies to security checkpoints and border crossings.

34. Tapped room phones: Phone, Fax and WIFI intercepts are often employed through the

traveler’s hotel phone or other point of contact.

Visitor Espionage

35. Wired Visitors: Company visitors fitted with recording devices, video cameras and

cameras. Beware of visitors who ask unusually expert questions or seek unnecessary access to

restricted areas.

36. Conversation Detours: Conversation “detours” during interview or information

conferences to subjects not agreed upon in advance and covering sensitive topics.

37. Visitor status: downplaying or disguising a visitor’s status or technical skill to gain access

for a tour or visit.

Conclusion

As the list demonstrates, there is no shortage of corporate espionage tactics. I am sure there are

countless others.

Good luck out there!

______________________

Research References

Dictionary of International Trade Handbook of the Global Trade Community 10th Edition,

World Trade Press

Broker, Trader, Lawyer, Spy: The Secret World of Corporate Espionage, Eamon Javers

Secrets and Lies: The Rise of Corporate Espionage in a Global Economy. Georgetown Journal

of International Affairs

Santiago Cueto

Counterespionage for American Business, Peter Pitorri

Economic Espionage and Industrial Spying, Hedieh Nasheri