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Office of the National Counterintelligence Executive, 1998 Annual Report to Congress on Foreign Economic and Industrial Espionage (full-text).


Despite the adoption of the Economic Espionage Act of 1996, many foreign countries, including some traditional U.S. allies, continue their attempts to acquire U.S. trade secret information and critical technologies for military and commercial application, through both legal and illegal means.

Updated information, as reported by the U.S. Intelligence Community, reaffirms the findings of the 1997 Annual Report to Congress on Foreign Economic and Industrial Espionage to include the origin of the threat, collection targets, and methods of operation.

Analysis of updated information indicates that eight countries are most actively targeting U.S. proprietary economic information, trade secrets, and critical technologies. In an effort to more effectively qualify the threat, four of the 12 most active collectors listed in the 1997 Annual Report were taken off the 1998 Priority Country List.

Collection efforts continue to be driven by military force modernization, economic competition, and commercial modernization using technologies with dual-use applications.

Clandestine collection efforts continue; however, consistent with traditional espionage operations, a significant majority to foreign intelligence collection is initially conducted through legal and open means and may be a precursor to economic espionage.