Spies, Lies and Secrets: 37 Industrial Espionage Tactics that Threaten to Kill Your International Business.

industrial espionage, corpoarte spy, international business, international businessEarlier this week I wrote about industrial espionage and how it is 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 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 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.  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.


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

What other tactics are you seeing out there?

Look for our  follow-up post, Codes, Locks and Keys: 35 Industrial Espionage Countermeasures that Will Save Your International Business.


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

Counterespionage for American Business, Peter Pitorri

Economic Espionage and Industrial Spying, Hedieh Nasheri

(Photo Credit: NY Times).

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