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Red Herring November 29, 2005

Seoul's Tech Spying Crackdown

South Korea's top spy catcher vows to ferret out defense industry spies.

South Korea’s counter-intelligence agency said it would reorganize itself next month to better crack down on espionage within the country’s burgeoning high-tech weapons industry.

The announcement from the Defense Security Command on Monday follows recent calls from the nation’s top defense officials to boost the defense budget by 11 percent annually over the next 15 years, as well as moves to grow the country’s weapons manufacturing base.

Defense industry analysts said Seoul’s bid to quash industrial spying may have several motivations. Brad Curran, an analyst with Frost & Sullivan, said that while South Korea boasts a first-rate infrastructure for crafting semiconductors, the rest of the country’s defense capability is not that original.

The bulk of South Korea's war machine stems from joint ventures with foreign companies.

“It may be that the Koreans are concerned about espionage because the U.S. is slow to sell them advanced designs or agree to joint ventures because the U.S. does not believe they have adequate security safeguards in place to prevent the re-export of sensitive military technology,” Mr. Curran said.

For its part, the DSC was blunt about the need for more counter-espionage work in South Korea’s weapons labs.

Growing Number of Spies

"The command will beef up its investigation resources to cope with the growing number of industrial spies who steal important technology from our defense industry and leak other military-related secrets, plus we will augment manpower for investigations into such crimes," Colonel Lee Hwa-seok, chief of planning and management, said at a news briefing, according to the Korea Herald.

In 2004, South Korea was the world’s 11th biggest spender on weapons, with a defense budget of about $20 billion, or 2.7 percent of GDP. The defense ministry has recently said it wants to grow that figure to 3.5 percent by 2020.

Looking far into the future may play a role in the DSC’s desire to root out industrial espionage today, said John Pike, president of GlobalSecurity.org, a defense industry information clearinghouse.

“I think South Korea is going to be on its own pretty soon,” he said, referring to the possible pullout of the roughly 20,000 U.S. troops now girding the nation against the threat of attack from North Korea.

Anticipating a day when U.S. military technology is not readily available, South Korea has worked hard in recent years to develop a domestic weapons industry.

“You could understand that they would be concerned,” said Mr. Pike. “In their plan, there is going to be a lot more stuff worth stealing.”


Copyright 2005, Red Herring, Inc.