SOVIET ACQUISTION OF MILITARILY SIGNIFICANT WESTERN TECHNOLOGY: AN UPDATE

Created: 9/1/1985

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CIA HISTORICAL REVIEW PROGRAM RELEASE IN9

Soviet Acquisition of Militarily Significant Western Technology: An Update

Soviet Acquisition of Militarily Significant Wesiern Technology: An Update

In recent years, the United States Government has learnedassive, well-organized campaign by the Soviet Union to acquire Western technology illegally and legally for its weapons and military equipment projects. Each year Moscow receives thousands of pieces of Western equipment and many tens of thousands of unclassified, classified, and proprietary documents as part of this campaign. Virtually every Soviet militaryach year in thendn the earlyfrom these technical documents and hardware. The assimilation of Western technology is so broad that the United States and other Western nations are ihus subsidizing the Soviet military buildup.

Western products and technology secrets are being systematically acquired by intricately organized, highly effective collection programs specifically targeted to improve Soviet military weapon systems. The Soviet intelligenceKGB, the GRU. and their surrogates among the East EuropeanSoviet trade and scientific organizations arc actively involved in obtaining this technology. Targets include defense contractors, manufacturers, foreign trading firms, academic institutions, and electronic data bases. Only recently has the full extent of illegal Soviet technology collection efforts become known.

The purpose of this paper is to reveal in deiail the structure of these Soviet programs, and lo give examples of Soviet requirements and successes.the Soviet effortritical first step in protecting Western technology and preventing it from being turned against the West.

Cnnfttm

s

oitian of Sovicl Western Technology Acquisitions

Ordering of Industries by Soviet Military Research Projects Benefiting From Wesiern Technology.

Military Requirements Satisfied by Principal

Collection Agencies in tbc Overall VPK Program,nd

Significant Acquisitions Satisfied by Principal Collection Agencies,nd

US Universities Identified by the Soviets as Sources of Needed Applied Technology

Needs for Applied Science and Technology From Selected US Universities Compared With Number of Visiting Soviet Bloc Socntists.

Acquisitions of Moreieces of Western

Manufacturing Equipment.

I able,

of Results of the VPKa

Worldwide Sovicl Acquisitions, Militaryand of Western Documents. Military Hardware, and

_DuaI-Usc Products

Ordering ofS Defense Contractors ofWith Their Rank Ordering by Approximate Frequency

of Soviet Identification for Needed Technology. Selected Periods innd

Successful Soviet Bloc EspionageraA ga instUS Wcslctfense Contractor Targets

of Dual-Use Equipment and Technology Likely 29

Targeted by the Soviets

n

Soviet Acquisition of Militarily Significant Western Technology: An Update

Overcoming considerable technological inferiority over the past several decades, the Sovieu have built the largest military industrial manufacturing base in the *orklassive research establishment to complement it. Their objective is lo achieve military-technical capabilities that are at least equal, if not superior, to those of the West

Their resource commitment is enormous by anyit has enabled them in recent years to narrow the Western lead in nearly all key technological areas, particularly microelectronics. In materials, explosive, and sensor technologies applicable to deployedforces luch as tanks, artillery, and antitank and surface-to-air missiles the Soviets' technology level is roughly equal to or slightly better than that of the West. They are the world's leadersew significant fields, such as chemical warfare and in some areas of laser research for future "star wars" applications.

Nevertheless, ia spite of the several decades ofinvestment in indigenous research andIhc prospects arc small that the Sovieu can reduce their dependencearge variety of Western products and technology in this decade and the next without allowing the technological gap to widen. The main reasons for this continuing need are endemic to the Soviet system: Ihc lack of adequate incentives, inflexible bureaucratic structures, excessive secrecy, and insularity from the West. Even if there woe some major Soviet economic or managerial reforms, no real Insetting of Ihe Soviet dependence on WesternIt anllapaied as long as ihc USSR perceives the need for miliUry-technological parity with the West, or the need for sopcrnrity

The impact of this dependence could be even more important inhan it is today. The USSR has been compelled to follow Western direction in technological change, and thus far it has been able to do this satisfactorily becauseaturebase The nexl decade is less certain for the

Sovieu. however, because of new technologicalthat the West has supplied them. Theiris essentially for innovttitnn--where they will continue to look to the West not for maintaining adequacy,ey have achieved in nearly all important military technologies. Bui today'swill be tomorrow's obsolescence if lechnoloty fallseep pace

In2 the US Congress waseport1assive and global Soviet program to acquire Western militarily significanthat report described the Soviets' successes intheir military research and manufacturing capabilities and in nairowing the technology gap with the West, thereby eroding the technologicalon which US and Allied security depends.

The identification of this Soviet program led the West to undertake greater efforts in counter intelligence and export control. Since then, it has become even more evident that the magnitude of Ihe Soviets' collection effort and their ability to assimilate collectedand technology arc far greater than wasbelieved.

This update of2 report defines the scope of the Soviet effort. It outlines bow the Soviets go about acquiring Western technology and identifies examples of specific technologies (hey seek It highlights derails and statistics of Sovietmote detail than could be revealed previously. This information was obtained directly by the United States and Allied countries. Understanding the Soviet effort is critical in designing ways to protect Western technology from being acquired and used against Western security interests.

' Soviet AcauiiMan of Water* Ttthueiagy. April INX Eatita!earing! BeSctc use PermaBeit Suboatmaittce on Imcatica-lioaa of tbc Cammillee on Governmental Attain. (Jailed Statu Senate, NiDet.-Sevealh Coujress. Smund Semen..ad II2

' Weaaem icetaeaoaj ffcarduaie, dacuwtaax aad xavaw-fcouj ia elude* thai of Japan aiother I'm Woild eounirir*

Soviet Motivations

of Two Soriel Programs

basic question is why do Soviet weapon designers and Soviet manufacturers need lo copy designembodied in Western equipment and associated documents? In general. Soviet weaponsommitment to functional designs that can be easily manufactured in labor-intensite factories and readily maintained in the fieldinimum of technical skill. There has alwaystruggle between Soviei design simplicity andcomplexity Soviet weapon designers have not had to face the competitive pressures that drive Western designers to press the state of ihe art.

Buildingature research sector and on lessons learned from past performances of weapons in battle, the Soviets are placing moreremium oncomplex systems Western system andcharacteristics increasingly are used as yard' sticks against which Soviet technical capabilities are fudged. Every mafor civilian or military project is compared with the best Western technology before it is approved for development. Once in development. Soviet standards mandate the comparison of the quality and technical level of hardware, at different design stages: with foreign counterparts

With their access to many details of Western weapons and dual use equipment designs and concepts. Sovttl designers are. In effect, competing with WesternThat competition, supported and encouraged by the Soviet leadership, is probably pressuring the military research establishment lopay increasing attention to technically complex systems.pressures for design simplicity are beingby the manufacturing sector, which is less responsive in adapting to technological change. All of these forces indicate continuing Soviet programs to acquire Western military and dual-use hardware and technical data

2 il hjs become clearer ibai the Soviets have two programs to acquire Western hardware and docurrtesits:

Fitst, Moscowrogram to raise the technical levels of weapons and military equipment as well as to improve the technical levels of manufacturing processes. This program is managed by the most powerful organization in defenseMilitary Industrial Commission (VPK) of theof the Council of Ministerslthough not exclusively, through intelligence channels, the VF'K seeksind military and dual-use hardware, blueprints, product samples, and test equipment to improve (he technical levels and performance of Soviet weapons, military equipment, and defense manufacturing equipment and reduce any dependency on advanced Western products. This is done in large part by exploiting and adapting design concepts embodied in acquired equipment and associated documents

Second, the Ministry of Foreign Trade and Soviet intelligence servicesrade diversion program to acquire relatively large numbers of dual-use manufacturing and teat equipment for direct use in production lines. This program seeks export controlled mtcjoelectronics. computer,machining, robotics, diagnostic, and other equipment lo increase (he throughput of weapon-producing induiiries.

These two prog rams, which apparently areseparately, are the bub of tbe Soviet effort.

The VPK program is principally, but not exclusively, in industrial security and counterintelligence concern Tor the West It involves espionage by hostileerfficcrs. overt collection by Bloc officials,by scientific exchange program participants, and illegal trade-related activity. The trade diversion

rigure I

IU7 Organizations Isttol.td) in Managing Miliiar) Research and Manufaciuring and Ihe Acquisition of Western Technology

f-3 Mtliurymrck mutlutw^ *td

iht pruulfql rrqwucn of WttMra

tjp

The MiLuiy IMiairul Conuntawoo (VPK) aaCaiin thepmmi of all Sonet -en row aaat th. Sonet naiiOMllewl programcquire WeattniThehe meet pnoerial organization in Ihe defoniercaeareo esubliiltmeni, com. pitting ihe lop eucniivea of ihr key defense mantifacturlni ninss-tnea (faduilria) Reqjucula for Weiiein decumenu andind hirdw*te from military eqmlpewm designer) In each of (heodtutntabac are called ttqmireeneats (see figureo Miafy these reouresnis. Use VPKatuul

head, aeaauuni u, mmaHioa ruble* each year (reof4 blHinnO purchatc pemer eqanalrau; Once approved by ihe VPK, reooireenenu arc aeleetrrely leased among the KGB, Ihc GRU. and at teail four other naUonat-tcvel collect ice agencies, ai veO as lurrogatet among the East European laictligeacc scrtices.

The Stale CnennUitce forSeience andGKNT) actsollector and a> ihe centtal proccaaor for the naiioejl level program. Il atao monitors the abaorpttoa aad aaaaaaiUfaa of WeaJtrn icchiustogy by Ihe defease teahatne.

program principally involve* upon control andcomplianceharacteristics ol these program! overlap, further complicating the design of adequate coun term ensure*

Both programs sometimes seek the same products

Soviet industrial ministries request technology and equipment through both programs.

The collection channels overlap and in some cases (he same Soviei individuals (intelligence officers and others) are involved id each program.

The VPK Program: Raking ihe TaelssMcal levels of Weapons and Manufacturing Equipment

The VPK includes the top executives of most of the key Sovie( defense manufacturing ministries shown in figureull VPK membership is given to Ibe Minister* of Aviation. Machine Building (projectiles andefense Industry (armor andeneral Machine Building (strategic missiles andommunication* Equipment. Radioand large-scaleedium Machine Building (nuclear weapons and high-energyhipbuilding, and Electronic* Itmall batgroup, responsible for centrally overseeing the research, development, and production of all Soviei weapont coordinate* developments between its chief customer, the Ministry of Defense, and Ihe key suppliers, (he defense-industrial ministries. As lhc expediter for weapons development projects, it is the principal Soviet military instrument for eliminating or circumventing the inefficiencies characteristic of the Soviei economic system.

As part of its responsibility to enforce schedules and to ensure that technical and performancearc met, lhc VPK transtaics requests forhardware andrincipally by (bebureaus ofndustriesnto litis of collectionn thelone about one-half billion rubles4 billion0 purchase power equivalents) each year was reserved for purchases ofind Western hardware and documents.

Three examples of specific requirementfrom the VPK lists arc shown in figurehe firsi deals with theomputer, used by lhc Soviets as the model for production of their own version.hichopy of Iherchitecture and functions The second dealsruise missile computer The VPK apparently assignedigh priority because of major effort* under way ai that lime to develop lone-range strategic cruise missiles, which require large-capacity digital memories for onboard navigation. The Soviets historically have had reliability and other problems in developing suchThe third exampleS Fairchitd Instrument Corporalien/Xincom semiconductor memory tester. Itood example ofind dual-use product requested and acquired through the VPK program. Design concepts embodied in the hardware and associated documentation of the (ester were copiedoviet counterpart The original tester also could be used to help copy or reverse-engineer Western integrated circuits.

Requirements for documents alone can command amounts as considerable as hardware;0 rubles00 purchase power equivalents) for document* on the US shuttle or biter control system and0 rubles for high energy Laser developments) was approved for acquiring selected research documents on US antimissile defense concepts.

Each year the VPKeport based on the evaluation of the individual ministries. It includes aggregate statistics on numbers of technicaland samples (hardware) obtained, gross ruble savings, and the numbers and priority of requirements satisfied. This report is sent to ihe Chairman of the Presidium of the Council of Ministers and to the Central Committee of the Communist Parly. Copies abo are sent to headquarters elements of Ibeorgani rations.

Figure 2

Examples of VPK Requlremetils,

is.

((Ofuntitdc tot ptotwMg mualinT* tnmpiten)

-

Miouuy of ihe Radio lodunry

uu aririr t* vro

- -ib. IBM prOKta.

nrr eirtieraimm it. nil

nh ceOrctam

Ongtn aterf Wihnolop

Joinl requiierwn' Pnornyodbirei needed (ortctubdnipooirehnoloay

-

mo

finds allocated for (Wlwni ofchargedoil In

Oi

ninl radaoMa in liinr and npradiiarrii jrol unionew wcapcau

Dnirel Mthnofagy

Mioum fundi allocated fee tdlrcuon erf raw mm

A aonintrlligeiKe orgasuueku adonsung cofltctim

PK

mcni (or Soviet military research and developmeaL The Soviets cceoed the architecture of theystems totheir Ryad aeries of computers- Theequirementery high priority for Ihree reasons: it ii identified as "mostt is needed to solve problems inuturesystem; and ikree ministries would benefit tccanicatty. economically, and jointly from its acquisition. Theequirerooal.airchud/Xiaoorti semicondsetor memory test system,erfect example of theind dual-use product

(simple) and associated documeataiiou requested for copying as well as for volume purchases for direct use ia production lines. This tester was in fact acquired, and design conceptscopied, saving several hundred mas-yean of Soviet developmental effort.

Sonetata alio include ihe firms and sometimes the names of persons whoihe dctired hardware and doca-mcnu.ew, amended, and reapprovedfor hardware, documents, or both arc now issued by the Sc.-iris each year.

s

Tabic 1

Summary of Results of the VPK Program,nd

average of over JftOOSoviet miliuryequipment and weapon system research projects per yeat in theenefited from Wesiern hardware .cd technical dxamenW. Over half of these projects werehe electronics and the armor and eketto-opues Industrie*

new concepts, new directions, hither lecfaaJcal levels of research, accelerated development of more advanced weapons, and Ihe avcaasaee of major piifalh arc some of the key benefits tomiliury scientific research projects.

theoreO reemirerneitis were levied each year for specific Wesiern hardware, documents, or bout, with roughly oncuurd satisfied each year, lhc other twethtrds still targeted

Someillion rooks are mamtaincd each year for potential collections against these recrements (roughly JIA billionurchase power equrvalentsj

Duringhere fullyoercent of ihese being fotfilied by the Soviet intelligence services (ihe KGB and the ORtfland surrogates among the bast European intelh-gence services Requirement! fully satisfied duringib Rve-Vear Plan will.

Of ihe 3JO0 satisfied requirementsoercent wewyudged by ibe Soviets as the most significant io mililaiy research projects. The Sonet Intelligence services and surrogate* among the East European services fulfilled aboutoreent of these most significant requirements each year.

About balf of all VPK requirements fulfilled inhnd than far iaib Five-Yearerendustries: elcetrconcs and eeenrtnirska-lions equipmcoL

Aboutercent of lhai portion of document and hard-are acquisitions considered to be ihe most significant to the Soviets was of US origin, although not necessarily collected in the United Stales.

Aboalercent of the documenis and hard-arc acquired in the lOll) and so far inin Fix-Year Plans, which were fudged by Ihe Soviets lo be Ihe most significant io their military research proiecu, probably were export controlled, embargoed, classified, or under some control by Western governments.

Abouiercent ofOOieces of hard-are acquired annually andercent ofocuments acquired annually ore used by the Soviets in transferring Wesiern technology into their miliury research project*.

In lhcbout TOO embargoed dual-use manufacturing, diagnostic iostrumenuiion. and other dual-use products were acquired each year for copying embodiedeverse, enjineerirtg. and probably for selected direct use as keyin Soviet military production lines.

60 ibe greaicsi savings in research protect cot is. almost one-half billion ruble,ollar cost of equivalent research activity would0ere realized by twoMiraisiry offense Indusiry (armor sad eleciro-op.ies)and the Ministry of Ihe Action Industry. The Soviei manpower equnalenot of these savings alone irsntUtes roughly Intoar>yeais of scieniifie research. Theseowever, may be based. The ruble figures probably refloci opcraiingbonuses, and sometimes savings in etimlnaiioa of. for example, tesi range aetiviiy. but not capital com. Although Soviet managers generally tend lo irtfiite savings to enhance their role, the savings estimated in ihe VPK program appear tOCeeooBcrvatiye.

and Benefits

The VPK programoviet success storypecific collection requirements forand documents were satisfied forinistries for justh Five-Yearboutercent of more0 rrieces of Westernind military and dual-useand aboutercent ofechnical documents collected worldwide in response to these requirements were used to improve the technical performance of very large numbers of Soviet military equipment and weapon systems. The benefits and distribution by indusiry of the fulfilled requirements are shown in figure 3.

According to the Soviets, about one-(hird of the VPK requirements are totally or partially fulfilled annually, strongly suggesting that Western industrial security, counterintelligence, export controls, and other efforts do have an effect. But each year the number of VPK requirements grows by aboutercent. Thistrong indication that the expanding Soviei military industrial program continues io rely on Wesiern technical solutions and advances. It also indicates increased collection success and user expectation.

Figure 3

8 rflnduslrfe*VPK Requirements Fulfilled, by Rubles Saved, and by Hardwe

r^mlwimtM._fo, Veuam tfocum.ni>.cc tors

Ran* hj hardware

i.J*

troai of Ik* VPK roorainanasei that wan htMttad during tbc IOUi Iw-Vui Plan In Wnsieen hardwire and docu-menu were utufted on behalf of (wo def rnaetraa-ica aad cornanaakaiioni Tleae are key aiawa when lhc Sonata* Dood (oi nuhuntytec bnoioiy and lhc Won't Dord fra m- ea int.

The foe/ lanaatria nacentna Ihe noil Wealera nsililar) hard-arc and daal-aur prcdocU were clrcJranrcieca ofarge pcacenuge involvingccsk pelroacum/peuochanicaUnd conraaro ticcaOT* ranked in laaU order

lie top four iadualrlcs saving the moat rubfl ia raacarch

preseci cexlopswni com is termer re-

aourcca wot lhc amor and clectro-octics muatity lalmov 20

percent ofillion rubles saved in research protect cosls) and

ibe aviaiicn. octnmumaboos. and elecrronna ioeUurxa- These four

ino-BUnca conuMewtly appear to be the Sonet leadersrequeuting,

absorbing, and generally telling the moil ism out ol Weaicm

hardware and documents. In some cases, such ai in the armor area.

law Srnrim anstern larhaistip am so caicfe mf. bat W

apability thai already is equal loor better lhan lhal or the Wen

t*ZNext Generation Principally in four ways. Ranked by prioriiv ihe VPK of Fire-Control Radars for Soviet Figkter Aircraft

Soviets estimated that by using documenlallon on theS fighter ihetr aviation and radar industries saved some five years of development time and iS million rubles0 dollar coil ofresearch activity would be SS5 million) in project manpower and other developmental costs. Theportion of these savings probably representshousand man-years of scientific research effort and one of ihe most successful individual exploitations ever of Western technology.

The documentation on8 fire-conlrol radar served as ihe technical basis for new lookdownfshoot-down engagement radars for the latest generation of Soviet fighters. US methods of component design. fail-Fourtrriransfiirm algorithms, terrain mapping functions, and real-lime resolution-enhancement techniques were cited as key elements incorporated into Ihe Soviet counterpart.

' Redirected Soviet technical approaches inundred projects each year for ongoing weapon systems and key military equipment, or resulted in the improvement of the weapons manufacturing

Initialed several hundred new shoel-tcrm and long-tcrm research projects each year on technical topics that had not been under consideration.

Raised the technical levels of several thousand developmental projects each year involving military equipment, manufacturing, or design procedures

Eliminated or shortened phases of morehousand military research projects each year. This contributedubsuntiala number of cases, two lo three years- in time needed lo produce more technically advanced weapons and military equipment.

4 documentation served as the impetus for iwo long-term research projects lo design fromew radar-guided air-to-air missile system. The documental ion also wasin formulating concrete specifications lonew Sovlei airborne radar counlermeasures equipment against8

Significant acquisitions of Western tcchne4ogydocuments on fire-control radars for8 and documents on US ballistic missile defense concepts (utilen terms of broad defense programs. Soviet strategic missiles, air defense, Ucti-cal forces, and weapons manufacturing capabiliiies have bene filed the most from tbc VPK program. The annex has several hundred examples of specific Soviet weapons and military equipment benefiting from Western technology.

Western technology collected each year in thendided Soviet military industries

Ihe benefits vary from project to project. Western technology has assisted the Soviets in reducing their weapon acquisition cycle by upwo years for research projects in an advanced status. Acquisition of Western documents, for example, helped the Soviets cut by iwo years the time spent onew generation of fu/es for munitionsarge kill radius and for self-aiming aviation cluster munitions. For projects in an earlier sluge of research, Ihe cycle can be reduced as much as five years. This cceisidera-bly shrinks overall research time, reduces the amount of resources devoted to weapon system research, and allows diversion of those resources to other Soviet military research projects

A wide range of Soviet dau demonstrates thatto military research projects have increased signif-icuntly from theo thefigurend have applied to thousands of research projects in all key defense industries Measured in rubles, the

TaMeZ

Selected Worldwide Soviet Acquisitions, Military Applications, and Collectors of Western Dotiiunents, Military Hardware,

and Dnal-Use Products

Western TechnologyArnica

Table 2

Selected Worldwide Soviet Actions, Militarynd Collectors of Western Documents, MWiiary Hardware,Dusi-ljse products (comimsed

savings doubled60 (figurend still are expanding inh Five-Year Plan. The statistics on benefits also pointassive diffusion of Weslem technology into Soviet military equipment and weapons.hows how ihe moreilitary research projects bench!ing in theere distributed by industry. According to these rough indicators, the electronics, armor and electro-optics, and aviation industries are benefiting the most from Western technology.

Overall, the acquisition of Western technologythe SovicU to field more sophisticated, versatile, and effective weapons. The bask time for fielding ihesc advanced Soviet weapons, though, remains about the same. It also provides new militaryand allows additional resources to be used for the development of additional advanced weaponsThe acquisitions also serve lo lighten somewhat the burden of continuing growth in Soviet research and defense spending.

Soviet copying and reverse-engineering of Western military and dnal-usc equipment arc majorof Ihe VPK program. Indeed, the majority of VPK requirements for "lechncJogy" appears to be for hardware only. In Ihclone, the Soviets acquiredmbargoedind dual-use products each year principally in the area ofinspection, instrumentation and teslincluding key microelectronics production and test equipment. These products were used for making Soviet counterparts or possibly were for use as key manufacturing or test equipment thai completedlines Examples included computer-controlled integrated circuit testers, aircraft engine vibration control systems, and narrow-band analyzers forquieting.

These practices indicate Soviet deSoencics arc in the design, testing, and integration of technologically advanced military systems, not in basic research and applied science. They fall short in the engineering of a

Figure 4

Technical and Time Benefils to Thousands of Soviet Miliury Research Pro/eels From Wesiern

It rem i

mo*

tvj i

lath

rw^ci,i(dlo sfflwwere rcdmxia]

rMr* rom

^"'l* every Sovk,n theQ* and "* 'Ora the doc-.

t^' by

technologically advanced byseful piece of militarily applicable hardware producible in large quantities.

The profile of the VPK rxogram (as well as the trade diversion program) can be used to better define militarily critical technologies as well as better ways to counter Western losses. Both appear principally aimed at acquiring products and technical data. Both show that protecting dual-use products is just as important as protecting the related design know-how Equipment sales divorced from the transfer of know-how do have lonu-term significance for the Soviets. The evidence indicates that equipment transfers, both large batch acquisition! and individunl samples used

for copying embodied design concepts and for reverse-engineering, generally outstrip acquisitions ofin quantity and are of more immediate value to the Soviets.

VPK Collectors and Sources

Analysis of reliable data indicates that in the VPK protram the Soviet Bloc intelligence services (the Soviet Cemmiiice for State Securityhe Chief Intelligence Directorate of the Soviet General Stallnd their surrogates among the East Europe an intelligence services) are the collectors most often tasked and the most successful.

Figure 5

Ruble Savings Fromari of Soviet Western Technology Acquisitions

Microelectronics Reverse-Engineering

Soviet collectors have easily acquired many types of Western iniegraied circuits (ICs) for reverseIndeed, most Soviet ICs can be tracedestern original. One of ihe besi examples is theiricroprocessor, whichodified version of the Intelitused in many US military systems. In this case, the Soviets even copied Ihe equivalent US pari number to avoid confusion (note the tXRS SOersus ihe

Furthermore, ihe evidence clearly showrthal Sovicl ICs known asndere directly copied from ihe Texasfamily. These ICs have been used in Soviet strategic and lactlcal military systems since iheo provide important QualitativeThe more advanced Western fabrication equipment acquired by Ihe Soviets in recent years has been used to produce copies of sophisticated Western ICs Joe their latest generation of weapons. If ihe Sovtels succeed in acquiring the next generation of materials, equipment, and parts, their mlliiarywill continue to Improve in the area thai is ihe major strength of the

The USSR's practice of reverse-engineering, however, may soon run into problems. As US and Japanese ICs become more complex, reverse-engineering will{a) tracking hundreds of thousands of(b/ understanding how they all fit together; and (c) mastering the complex processing steps used in production. Thus, copying such circuits will require not only much more sophisticated Western equipment but also much more lime to duplicate each circuit, causing iheir overall microelectronics gap with the West to widen.

(hendhe Soviet intelligence services acquired, through their ownand those of the surrogate East Europeans, aboutoercent of all materials collected in the overall VPK program each yearore important, ihese intelligence services were involved in collecting worldwide aboutercent of Ihejudged by Moscow as most significant and used

l Pert inn Utilf

Oltw'l

m lairVeatly avenge in uity IHOi

hai the KGB and tbc GRUthe* tartapici in, the Eui Earopaa mt.iLjBcc tervewl wave Iht CaOectai it the owraU VPKthe. -etc mCxdo TO percent ofsS VPK requiwi, tonplculy fulfilledbcnd cany IWO* (Par-ceatafea do nut addecause aeroal aacaanetulnllmf tome ol the tame rcouircsnenial

Atlhouch not endenl from Ihe above data, both Ihe KGB and Ihe ORG iliuifleaDUy bcreatcd theirheecause Ox averajc aanafaer ofUM to (aiUM early(Ilib Fne-Year Plaaj increased about JOr

the State Oxmmta* for Science aad Teesmcaogy (OKNT) aad aaMcaated ccJIectora surprisingly uerc Ihe Ibiid ma eolbartina eavuly,elatively large percentageowever, lhat ihey -ereih sausfyuagercentlected tubaet of acquisitions, those |ud|ed by the Stmeta to be ihe naoai lignifecarii to their mibUry research projects.

many hundreds of military research ptojecuoth the KGB and the GRU levy come of the VPK requirements on surrogates among Ihc East European counierpart services The KGB probably owes apercentage of its collection lo these East European civilian intelligence services than does tbe GRU to its Bast Europeanll use human asaeu worldwide

Coordination wilh the East European services isthrough the liaison functions at both KGB and GRU headquarters as well as through KGB and GRU advisers in tbe various Warsaw Pact intelligence services Since thebc surrogates

Id.

Figure 8

Mosl Significanl Acquisitions Satbtied by Principal Collection Agencies.nd

p*be the

GHU

Oihers

Ministry of Foretgn Trade

GKMT.km> of Sacncc*

contrast tochich show* rewlts for Ihe ovtrell VPK program, ihi* figure show, the main eolleetioa ageneaeaelected subset of acq-baucw-ihoac judged by the Sonets lo bo the row sigitdicant to their nuhtary reaearch projects forlsed The Sonet tntelhgence .write, and .arrogates srethe key eofJeetor, in the VPKTheirpereeni association with the moat tlgnifienaiea. the pereentagea from the calories labeled "nonintelli.

(ence service Inrofremeer and (sonmidligence "single agencyndlc.se the WMounterimelhgence and industrial security challenge-

Aboutercent of the acquisitions -me uf US origin (but not Mccestanly acquired in the Unitedhe several hundredtat for each period in the statistics abovemall subsethose aoq.isiftons shown in the statistics Tor the overall VPK program.

among these services haveajor role in (he overall VPK collection program, often in return for Sovic( economic concessions to their countries. The intelligence services of East Germany. Poland, and Hungary arc among the most successful in acquiring Wesiern classified data and export controlled products.

During thendhe GRU probably fulfilled two toimes as many VPK requirements at Ihe KGB for (he importanl defense-industrial ministries of:

* Communica(ions Equipment Industry (defense and satellite communications systems) imes.

Machine Building (projectiles andtimes.

General Machine Building (strategic missiles and spacetimes.

Medium Machine Building (nuclear industry andtimes.

Radio Industry (radars and largc-teale times.

The GRU probably is more successful because of its overall scientific oriental ion. its bolder operational style, iu increased collection opportuniiics thatider variety of technology*rclated cover positions overseas, and iu clearer undcrslandiog of collection objectives,

Tke KGB. The First Chief Directorate (foreignof the KGB conducts science and technology collection operations through its headquartersknown as Directorate T.robably hasfficers, withn foreign assignment. The officers on foreignare organized into components known as Line X. and most of them are scientific specialists by both academic and professional (raining. The largest KGB complements are probably in Bonn. Cologne, London, New York. Tokyo, and Vienna. (Paris was one of the ijircest until muss expulsions)

fficers abroad typically occupy such cover positions as science attachesoviet embassy or equivalent positions in the commercial or economic sections of Soviei missions or an internaiionalOther preferred cover positions for thesearc as officials in various Soviet (rade missions or

as members of scientific or other academic exchanges. Such positions provide easy access to the types of infe*mation targeted by ihe VPK or to foreignwho could provide such access. Cover as an 'acceptance engineer"ompanyoviet contract isreferred way to acquire proprietary secrets.

The GRU. The Chief Intelligence Directorate of the Soviet General Staff has emphasized the collection of miliury scientihc data since the earliest days of Soviet miliury intelligence Unlike the KGB. the GRU has no headquarters component specifically charged with managing scientific collections: rather, this fuisction it part of ihe overall respceisibilities of four geographic operational directorates GRUdocs, however,cientific informalion analytical directorate that supports scientificefforu.

The GRU docs noteparate cadre of career scientific specialists in (he field; instead, most GRU officers have technical backgrounds and education as well as yearsilitaryRU officers serve outs.de the USSR. For all of them, scientific col lection is an integral pari of their responsibilitiesigh priority.

The GRU probablyigher percentage than the KGB of officers with cover positions that provide more access to Western scientific Urged and more methods of transporting export controlled products and technical dau to the Soviet Union. Some of these positions similar to ibosc of the KGB's scientific specialists arc in scientific or commercial sections of Soviet missions or international organizations and various foreign iradc offices In addition, the GRU officers often have positions in Aeroflot (the Soviet airline) and Mortal (the Soviet merclunlll Soviet military attaches arc GRU officers, of course The GRU, however, does not teem to use cover positions in academic and technical exchanges to lhc same entent as does the KGB.

Selected Semes.

US Defense Contractors. Moscow view* US and Allied defense contractors with (heir proprietary and government security controls as difficult target*.the KGB. the GRU. and their surrogates among the East Europeans are the collectorstasked lo operate against them. Of theS defense contractorsine of theost frequently cited by the Soviets as sources of needed technology were in (he aerospace industry (tabic 3J. The next group most frequently identified was the chemical and petrochemicals industries.

Although (he Soviet Bloc intelligence services are tbe primary collectors of scientific and technologicalin the VPK program, it is estimated that aboutercent of theocuments acquired each year worldwide are unclassified. Annuloercent of these unclassified documents are either under proprietary wrporaie. export, or other government controls. The Soviet intelligence services and their surrogates among the Easi Europeanprobably provide Moscow with0 technology-transfer-rclatcd classified documents each year from the West. Analysis and operationalindicate thaimall percentage of these are collected through Soviet intelligence servicein the United Slates.

Analysts of hostile intelligence activities indicate that in recent years the surrogates among the Eastintelligence services possibly have been morethan Soviet intelligence against prioritytechnologies in the United States. East European services have had considerable success not only in tbe United States, but elsewhere because:

They are generally perceivedesser Ihreat (han the Soviets.

They often may not be perceived as operatingurrogate role.

In some countries, including ihe United States, they operate under less severe travel restrictions.

Some, especially the Czechoslovaks and the Easi Germans, probably find it easier to operate in the West European cultural and commercial climate.

Recent examples of Sovicl Bloc espionage operations against US and other Western defense contractor targets are presented in table 4.

esult of various coproduciion arrangements and contract bidding among foreign firms, Ihe availability of much US defense contractor technology overseas in

US subsidiaries and in other firms hasis enables Soviet Bloc intelligence to seek priority US technologies in many countries around the world.

Commercial Data Bates. Unclassified technicalfrom al) countries- including engineeringand researchtargeted by Soviet intelligence and other collectors because of their value to Soviet engineers seeking creative designs andengineering approaches. For example, from theo the, NASA documents and NASA-funded contractor studies provided the Soviets with their most important source of unclassitiedin the aerospace area. Soviet interests in NASA activities focused on virtually all aspects of the space shuttle Documents acquired dealt with airframe(including computer programs on designmaterials, flight computer systems, andsystems. This information allowed Soviet military industries to save years of scientific research and leafing time as well as millions of rubles as they developed their own very similar space shuttle vehicle

The individual abstracts or references in government and commercial data bases are unclassified, but some of the information, taken in the aggregate, may reveal sensitive information concerning US strategicand vulnerabilities. Numerous unclassified US Department of Defense and contractor documents are sought by tbe SovicU from the CommerceNational Technical Information Service.dealing with design, evaluation, and testing of US weaponSidewinder, the Redeye shoulder-tired antiaircrafl missile,ndin the data base.

The public and private document clearinghouses -esublished to efficiently index and disseminate the results of government and government-sponsored milt-Ury-relatcd technicala fertile ground for KGB, GRU, and other collectors. In recent years, the growing use of electronic data bases has provided the Soviets with an even more efficient means of identifying and procuring such unclassified technical information needed by Soviet designers.

Tabic 3

Rank Ordering ofS Defease Contractors3 Com pit red With Their Rank Ordering by Approximate Frequency of Soalet fdenlification for Needed Technology.

KIM.'

Value Rank

>a

IX

K6.

g_7

89.

MM

Puehossou) Thul

NMiHhMirjNofitti

Sam Whan Computet Science Xeroa

llr-tefi Packard

Rank

N

M

30

fsolljrk

Rank

9!

Sumen.

Ml

1

94.

ttrokuiii

Aasociaies

'

Union

the VPK program .beUMtarsioi^ulreseie^ed inforrriation on tori US Spacer

solution appears lo be lo thoroughly screen all candidate daia base entries and keep sensitiveinformation out of the public data bases or limit its availability lo US and Allied defense contractors. Unfortunately, this may also inhibit the United Stales' own national research effort by restricting the ready availability of such infornsation.

Selenitic Conferences. Collection of information from professional and academic conferences on applied science and technology has also contributed to the siaccess of the Soviet program. At leastonferences worldwide were identified in the VPK program as potential sources of specific daia in theo assist in solving military research problems. These included conferences on materials, missiles, engines, lasers, computers, marine technology, space,chemical engineering, radars, armaments.

and optical communications. The Soviets judged some of Ihe data acquired from these conferences to be among the most significant contributing lo their miliury projects Conferences in thendand Soviei evaluation of the daU) ranked in order of significance urerc the;

International Radar Cca-ference (improved circuit designs for synthetic aperture satellite radars and aircraft over-ihe-horiron radars)-Collector GRU

Conference on Integrated Optics (assisted inways toualitatively new Soviet category of integrated optical devices for fiber-opticsKGB.

Table -I

Selected Successful Sovietperations Against US end Other Western Defense Contractor Targets

Bent

Willom Betl

Pierre Bourdiot Dieter Gerhard!

Hostile Service

Dales Operated

SB Poland

KGB

GRU

US citiiea. Radar spceralut, Hoghea Air-crafi Comnany. Worked cm advanced US radar syiteax. eaperimental radarand air-to-air and surface-ie-air

Jreaxih engineer

South African naval olfieer who had at-tended ihc British Royal Navy College aad served al the Embassy in landon. Laterscientific research

Imparl

Saved ihc Sovieu several lens of millions of rubles in research efforts: advanced Soviet technology by about five years by permitting them to implcrociii proven de-

Cnrretulj undergone trial

Passed informaudn on various antiarrcrafl

Harper SB Poland

Manfred Rottch KGB

eiiiien. EJcetrornea engineer. Through his iirlfriend/infe he had access to Bill p. tic Missile Defense Advanced Technology Censer contracts at Systems Control Inc. CaHfomia._

Wen German. Head of iheepartsneni of the am lion firm(MH8|.

Provided doaensof documents on potential US ballistic missile defense programs. ICBM basing modes, and related tcchnoi-ogy Affordednique look at iw(emiil_ijs fulereeonuvv.

- informiiion on the Tornado" air-craft produced by the Eeropeaa Pasavia consilium.

of the Aerospace and ElectronicSociety of IEEE (helped technical solutions to existing problems and improved tbc characteristic!rw-allrtode target detectionKGB.

International Conference on Radar (assistedof signal necceaaing for passive jamming suppression methods and for radars to detect distant aircraftCollector: GRU.

International Conference on Noniradiuonal Energy Transformation Systems (refined directions ofon space-based nuclearCollector: KGB.

Conference on Millimctric and Submillimetric Equipment (assisted in design solutions forwave proximityKGB.

Symposium on Solar Energy Conversion (increased efficiency and decreased costs for electron beam deposition of coalings on solar components for space vehicles) Elector: GRU.

According to Soviet estimates, the informationby the KGB and GRU from these conferences atone, particularly the first three, produced savings of millions of rubles in long-range military researchroughly equivalentan-years of effort. The fact thai numerous professional and scientific conferences arc specifically identified as valuable sources in advance by ihe VPK indicates their exploitation is not fortuitous, but carefully planned.

Ministry of Foreign Trade. The Soviet Ministry of Foreign Trade administers and operates hundreds of foreign trade organizations and firms around the world. This global presence and the ministry's official duties related to technology and transportation makeractical cover organization for hundreds of KGB and GRU officers involved in technology acquisition efforts. These officers conduct overt and covenoperations and channel the results through their respective intelligence organirations forin the VPK system.

In addition io providing cover for intelligence officers, the Ministry of Foreign Tiade isajorcollector in the VPK program and attempt* to pursue most or its assigned VPK requirements on an overt basis. During thend, it helped fulfill aboutercent of all fully satisfied VPK requirementsore important, itercent or those satisfied requirements identified as -mostlso during that period iu role was specialized, focusing largely on the acqui-sitioa of microelectronic- manufacturing equipment and communications dual use products, la view of this, it is not surprising that throughouth and thus far inh Five-Year Plans the Ministry of Foreign Trade was assigned to collect the largest percentage of samplesearly averageercent) as opposed to documents. The ministry alsoajor role in lhc illegal trade activities discussed later in this report.

Otrt and Academic-Rrlatfd Colltaon. The Soviet Academy of Sciences is another collector in the VPKSo too are the Slate Committee for Science and Technology (CKNT) and the State Comrnitiee for Foreign Economy Rdatiom (GKBS> Although these organizations are involved principally in overt collection of information for nondefense industries, they also are involved in worldwide oven collection of information and technical daU in response lo specific VPK tasking for military research projects.Ihcy are tasked jointly with the KGB and other collectorsatisfy these requirements.

These three collection agencies, especially theof Sciences and the GKNT. operate in the Westilieu of scientific, academic, and businessThey and others help sendoviet Bloc dtizens to the United States each yearontouristortion of those visitingrespond to high-priority VPK lequtrenxnis. Addi-lionally, many Soviet scientific personnel have been co-opted to some degree by the Soviet intelligence services to provide assistance to VPK and other collection activilies.

Duringand, Sovietcollection directives identified numerous universi-nes worldwide that had needed information. Perhapsote of confidence in US academic research, the

number of IIS academic centers targeted hasfrom abouto overuring this period The universities cited as sources for both applied military-related technology and for civilian scientific data include some of the finest in the United States. The rnajority of information sought at universities for the VPK program was applied technology and engineering, and not fundamenu! or basic research.

Carnegie-Mellon. Cincinnati. Kentucky. Massachu-setu Institute of Techrsologyichigan, and Wisootuin were among those universities (as well as defense contractors) identified in ihe VPK program as sources for information on new high-strength, high-temperature alloys, such as titanium, on lightweight structural alloys, and on powder metal processing. California Institute of Technology, Harvard, and MIT were targeted for techniques, methodologies, and resulu for evaluation of strategic concepts on space, aviation, and missile systems. Californiaof Technology and MIT were also cited as sources for tranaonic. supersonic, and hypersonic aerodynamic research, as were the Polytechnicof New Yorkrinceton, and Sun-ford. Kansas. MIT. OhioSute. and Peon Sute were identified for dau relating to electrohydraulK control systems applicable to aircraft, helicopters, and the Soviet version of tbc US Space Shutllc. Research applicable lo fuiure high-energy laser and particle beam weapons was sough! from MIT. Denver, and Princeton.

As illustrated in figurehe three overt andcollectors rank third in the overall VPK program, satisfying aboutercent of loosethat were completely fulfilled by all collectors On the other hand,hows that while their overall contribution to Soviet miliury research osllcc tion is large in volume they accounted forercent of the technology judged mosi significant by the Soviets during thend. Acquisitions included information on developing and manufacturing composite materials for missiles and space systems: automated control designs fur highly

pw decade c* soabouiercent of ihc US unheraliie,

append tesence and technology principally for Sonetcedcveloprneai. The Slate Committee for Science and

ttnnwkiea. bat

pnncwlly fc* fundamental research for both Soviet mlliUry. and anlon-rcJtied aieneo drntopronlt

"oOmUS and other Wesiern unoersitict

meJude those from Use intelligenceeicniist, within the Academy of Soerxo. ,nd tcicM.tt Tram ihe State Committee for acacace and Technology who come to study in ihe United States Many of colieeiors arc also involved in spoitmBeeing US scientist, for potential recruitment at agent,.

Figure 10

eed* for Applied Science and Technology From Selected lis IMmtftai Compared With Nunaoer of VfairinTsoneT bToT Scientists,

uk

OT Tnftnol^y

CanregW-Melko

UmterUi

in

3 Sovieiiirj| miliury recinn rurJi

Pnnwd, cxhWn vrmife wo

1 Im Mrara bfSH SSoc

Acaiul vi.ii byoSoe uiratm mU> jtsahaarasuhw mca r*

InlomuiKi* 'or nig" pomi? lubury

mauih ptojrui

Ihe SovleUfteners dahn, th, Mrtyoiviban reseat precis. The.e,th ceerelaucoXcen the number of VPK-ioWiined mOOmr, research needs .ad .be

BlocnireTaud

s were usked loocouire bforroarion fee sSi* imlnaf, research piojccu.

accuralc coordinate-measuring machines for quality control of weapon components and subassemblies; information on automatic control systems forrolling mills; acoustical data for developing low-frequency sonars for submarines; and information on aerial photography, magnetic recording systems, and lasers.

The Tradeojrram: building and Expanding Industries

Numerous sources and data indicate the existencerogram separate and administratively different from the VPK program, but comparable to it in scope. This second program is characterized not by requirements forind equipment, but by illegal and legal acquisitions of relatively large numbers of dual-use products for Soviet military programs. These products are requested by the defense industries for direct use in manufacturing lines to increase the throughput Or oulput of plants or for designing future equipment. Often manufacturing cells, complete production lines, or even entire plants arc sought from the West. Much of this equipment and technology falls into the areas of computers, microelectronics, numericallymachine tools, robotics, and material fabrication.

This second Soviet program is probably lessthan that of the VPK, but just as rigidly monitored because of the large amounts of hard currency necessary. This is the Soviet program (hat appears to be largely responsible for orchestrating and managing most of the worldwide trade diversions, particularly in the areas of computerscroclectron ics.

Computers and Microelectronics

Major Soviet diversion efforts arc targeted atfabrication equipment and computers; nearly half of detected trade diversions fall into these categories. Using unscrupulous Western traders who employ license falsifications, deceptive equipmentdummy firms, false end users for illegal purchases, and smuggling, as well as assistance from intelligence operations, the USSR has acquiredinimum several thousand pieces of majorfabrication equipment during the lastears

(figurehe equipment acquired through these efforts is largely responsible for the significantthe Soviet microelectronics industry has made thus far, advances that have reduced the overall Wesiern lead in microelectronics fromoears in theo four to six years today. Western microelectronics manufacturing equipment has been applied throughout the enlire productionfrom materials preparation to the final testingneeded for sophisticated production lines. In fact, total design and fabrication lines may have been acquired from single diversion operations.

Volume purchases, legal and illegal, characterize Ihe second Soviet program. Examples of microelectronic products lhat the Soviets illegally acquired from ihc United States. Japan, and other countries in one year during thencludeophisticatedpullers.iffusion furnaces, three integratedJ testers, andask aligners. The next year they divertedrystal pullers,iffusion furnaces, three photorcpealcrs, three patternthree epitaxial reactors, and an IC tester. Such purchases have been used directly in assembly lines for military production. In the future, large quantities of test equipment for sophisticated very-large-scale integrated (VLSI) circuits willajor target.

Volume purchases of materials are also part of ihe second program.he Sovieu purchased hundreds of tons of electronics-grade silicon (not under export controls at thathis is Ihe raw material needed for integrated circuits for boihand civilian uses. The silicon originated primarily from the United Stales, West Germany, and Japan. After the sale of electronics-grade silicon to the USSR was restricted, Soviet acquisitions continued through worldwide diversions. Future acquisitions of silicon very likely will begin to concentrate on the very high-quality silicon produced in the United States, West Germany, and Japan for use in producing VLSI circuits.

Over the pail lew yean the So-leu haventire buDding construction program for manufacturing military microelectronicso equip aiaay of these building* with advanced production equipment, they acquired more than tSOO pieces or major Wesiern cos trolled and uncontrolled micro-cloctrceuc* fabrication equipment covering Ihe entire spectturn of manufacturing operations. They acquired this equipment from use

United Slates, Japan, and Europe, and diverted it through many pans of the -orU.of illegal aonisrudnt of large numbers of dual-use products through worldwide trade diversion) have enabled the Soviets to narrow Use inktroeleeironies technological gap with ihe West fromo IIecade ago to about four to sii >ears today.

circuits intended for direct use in Soviet systems ate usually acquired from the United States and Japan by trading companies in various parts of the world, and then shipped in huge numbers to Soviet and East European destinations. As manyillion circuits may be shipped in this manner every year.

In direct monetary value, volume acquisitions through illegal trade probably far exceed those of the VFK-dircctcd effort. The Soviets have diverted thousands of different items of high technology in the past two decades, totaling perhaps billions of dollars invalue alone. Most of these illegal acquisitions have been facilitated or conducted autonomously by unscrupulous traders- The manufacturers of high-technology production equipment have rarely been knowingly involved in diversions; indeed, they have often been victims.

The Soviets have arranged most diversions through Europe, but their use of Asiaiversion route is growing.irms in more thanountries have been identified as engaged in diversions. Many more companies probablyinvolved inew operations and quilling or disbanding before becoming well known or vulnerable.

Participants in the Second Program The Soviet intelligence services and ihc Ministry of Foreign Trade are involved in various ways with most of this illegal trade, some of which is conducted through ostensibly normal trade channels. Theof Foreign Trade and industrial ministriesarge network of foreign trade organizations,offices, joint companies, and foreignoffices whose staffs know the hardware markets

and acl as readyechnology traders and dinners who may volunteer their services to the Soviets. They are also quite adept at spottingfor diversions and obtaining controlled Western products. These functions arc performed by legitimate Soviei trade officials, intelligence officers under trade cover, and trade cimcials working directly forofficers. Many ofoviets expelled fromountries3 were assigned in some capacity with the Ministry of Foreign Trade.

The Soviei illegal trade program appears to beand managed in the trade ministry's Main Engineering and Technical Administration (GITUl Although ilomponent of Ibe ministry. GITU is staffed and managed largely by intelligence officers, organized into separate KGB and GRU groups by their respective headquarters. Its subordinate Depart' ment for Technical Coopcruiion with Foreignis similarly suffed and managed. GITU report-edly exercises some supervision over all technical Soviei foreign trade organizations and all technical joint trading companies.

The GITU staff has grown from about0 to aboutts subordinate Department for Technical Cooperation with Foreignundred The intelligence officers assigned to GITU. and to the Ministry of Foreign Trade in general, blendumber of roles in carrying out [heir assigiunenlt. Soviet intelligence service(as well as their East European surrogates) arc in embassy commercial sections, trade missions,commercial organizations, and joint stockin the West. Moreover, intelligence officers have been identified as employees of foreign trade organization* in the Soviei Union and their offices elsewhere in the world.

Although GITU isoviet intelligence service de-main (with the GRU probably filling most cover

hat docs not mean that all trade diversion operations are conceived of and supervisedaily basis by intelligence officers Some evidence indicates that the GRU is involved with more trade diversion Operations than the KGB. but il it unknown if this is by design orractical manifestation of the high proportion of foreign trade-related GRU cover

their Sovicl principals, but rather into one that is only for the duration of onecries of formal or informal contracts for specific product* or services.

Although ihere are dissimilarities among contract or broker diversion operations, there are some(hat teem consistent:

Sovieu incur minimal, if any. risk or legal liability. Many, if not most, conlracii are scheduled, bncrcd. signed, or verbally agreed to in Moscow or another convenient denied area or arc obscured by the conduct of legitimate overt business.

Little or no oontact is maiDUincd wilh tbe diverter This seems especially true of dr-criera operating on behalfoviet intelligence service.

For the most part, the diverter ha* autonomy in operational decisions, including arranging frontproduct availability, purchase,storage, and delivery. At times diverters also perform initial professional setup, testing, andof equipment In so doing they relyon professional overt and coven colleague.

Fees are negotiable. Tbe Sovieu will pay lucrative, but not outrageous prices. Fees can also be raised during the course of the diversion if more cosu or risks are entailed by the diverter.

Payment is generally through letter of creditby the Soviet, to theank account.

The use of contract or broker trade diverter opera-lions by ihe Sovieu minimizes, if noi obviaies, the risk to their intelligence residences and trade officials while simultaneously assuring ihc application ofbusiness and trade diversion know-howhe technology acquisition task. Because of the low Soviet profile in these operations, more vigorous taw and trade control enforcement may be more effective in stemming contract diversion than coaatcriatelli-gence responses, although both efforts dearly have an important role.

Contract Trade Diverter; Richard Mueller

Richardest German citizen, is wanted in that country and in the United States for many cases Involving illegal exports of COCOM-camirolled computers, microelectronics, and other products to the USSR His Involvement with dtegal technology acquisition on behalf of the Sovtet Bloc dates back to Ihe.8 Mueller's deals were made almost exclusively with Soviet foreign trade officials, some of these officials were intelligence officers under cover, lor his network. Mueller uses numerousand from firms and meets wtih his SovietIn Moscow to mask his activities. At one time he had more thanirms operating In Austria. France. Switzerland, the United Kingdom, the United Slates, and West Germany.

83 Mueller delivered lo the Soviets advanced computers, peripherals, andmanufacturing equipment worth at leasi several tens of millions of dollars. Perhaps Mueller's best known operation was his attempted diversion lo the USSR in3 of seven large US Digital Equ,pment Corporation VAX computers and related hardware and software. The VAX series of super minicomputers are valuable to ihe Soviets because of their computer-aided design fCADJ applications for mtcroelecironics fabrication. This equipment was purchased In the United States for Mueller's dummy firms in South Africa and West Germany. Much of Itseised by Sweden and West Germany enrouse lo the Soviet Union

Other IH.ersion Methods

Sovicl foreign trade officers also attempt to make small Wesiern firms dependent on Soviet legal orderseriod of years. For such firms, who are not contract or broker trade diverters, the occasional

Soviet request for illegal purchasesupport rolearger illegal trade operation appears difficult if not impossible lo refuse. Indeed, some firms may even bento complicity or support for Soviet diversion operations unwittingly or gradually. It has longoncern in the West to limit ihe expansion of Soviet foreign trade organizations abroad because of the opponunities they offer for this type of diversion activity. Although it has become more difficult for Ihe Soviets to conduct this type of activity, Moscow continues to keep these diversion channels open.

The Soviets also acquire technology to modernize manufacturing through another mechanism, the so-called acceptance engineers. They are assigned as quality inspectorsong-term basis,ear or longer, lo Wesiern firms engaged in manufacturing items for Soviet end users. These may be intelligence officers or Soviet personnel who are co-opted to steal proprietary production or technical data. They also use (his opportunity for agent spoiling for immediate ot future exploitation. Use of acceptance engineers for collection is especially practical in countries with advanced manufacturing technology Companies in Western Europe and in Japan have been targeted with this approach.

Pros peels for Stemming losses

The West needsetter organize to protect its military, industrial, commercial, and scientifickeeping two objectives clearly in view:

- First, it mast seek to maintain its technological lead over the Soviets in vital design and manufacturing know-how.

Second, il should strictly control key dual-useincluding computer-aided design and manu-factunng systems. large volumes of automatic test and inspection equipment, and, most important, the automatic lest equipment that can alleviate acute Soviet qualitative deficiencies in the manufacturing of weapons and military equipmeni.

The ultimate goal should be to deny (he Soviets access to Western documents, hardware, and technologies that will accelerate their military programs andcause Western defense efforts and costs

to increase. Soviet dependence on the West forinnovation in military research andand in modernizing Soviet production industries is broad.articularly important inand computers, and calends to key areas that include command, control, communications, and(CQ, computer-integrated design andand materials fabrication

The United States and many other Westernhave begun to belter recognize that their military and dual-use equipment and technologies have been improving the performance capabilities and manufacturing standards of .Soviet weapons. Several positive sieps have already been taken by the United States. Western Europe, and Japan, includingexpansion of theist to deny ihe Soviets key items. Although the emphasis has varied among countries, most have undertaken individual programs to stem diversions and losses that include some of the following;

awareness programs, highlighting the magnitude, tactics, and detriment to Westernof the Soviei efforts.

Improved export control efforts and enhanced law enforcement capabilities.

Counterintelligence programs specifically targeting Ihe technology transfer activities of hostileservices and their Soviet co-optees and agents.

Industrial security awareness programs conducied jointly by counterintelligence services, securityand corporate security professionals.

Soviet Bloc scientific visitor controls designed to screen high security risk visitors and. in the process, strengthen the spirit and integrity of academic exchanges.

review of government open publications in the prepublicalion or predistribution phases.

Inore difficult operational environment for Soviet intelligence has resulted worldwide.

Cces^auastsag Ceasssssnssuj fCOCOM) was eauteitaeal ia IKS lo serve aa lot forum (or Western cflrnla toystem of

export oontrora. It ii oomposed of the United Slates, Ihe United Karitdooi. Turkey.orway. Use NeHWr'jnda. Luumhoara. Japan. Italy. Oreete. Fraanc.deral Republic er*uarrnart. Canada, and

Fxatnples ofV Easuiaancast tactkdj To Be Targeted by taw Soviets

Integrated Circuits

GlA? Octets Memories

Microprocessors and Peripeerah

Integrated GrowlSIC)Aulomalie Integrated Circuit and Printed

Circuit Boaid Tester.

Chemical Vapoi Deposition (CVD) fcjbipmcni. Especially Mdal-

Organ* CVD Systems

CcvriiHitci-Aidrd Design (CAD) Sysieeu

Integrated Opiica

Ion.Beam and Plainu Etchers

leuv Implantation bQUipment

lithography Fouiptaeni. Especially Ekctron-

beam. hm-bcam.ay Systems

Molecular Beam Epitaxy iMRfc) System

Sem-ccoducton

nd ll-VI Compounds

Materials

SpreJaajjtd Crysiai PuBers

coa far Very-Urge-Scale Iricg.-atod <YIS|J

CI Software

Computer Ntt-cetni System)

Filxr-OpisalraEamissionSjsieBis

Digital Switchirig System*

Hifh-Speed Modems

aiellrie Ornimunkalkno Sysiems

Displays

I oospuler-lritreratrd LVsire and Manrfaaurlng

Computer- Aided Design Software,od Fdulpmeat

Computer Aided Mannfactunng (CAM) Software

Cnnsouter Numerical Controls for MeiahaorVJni Machine*

Measurinf Machines

Fissile Eksncni Analysis

rleaible Maaufaetering Systrsit (FMS)

Plain Control

Artificial latellarencc

Data Display Eouipcocnt

High Density Disa Storage Systems

Iniemal Memories

Software Deportment Systems

Stand Alone Mainframe Computers

Supercomputers

Super minicomputer?

Strtogin Fibers and Fujrneau

Maaufactarlaf Cararauca

Materials Plocessiaa

Hull Tcrnpertlure Resistant Coaitngs

lacstatic Prcsies

for Surface Condiliomaj and Material Processing

- Material Joining and 6ondinc Equipmentondestructive lest and Evaluation Ijjuipineni

Precision Shapers and Formers

Vacuum Faroaces. Including Those for Single Crystal Growth

worldwide diffusion of advanced pfoducti and high technology, however, clearly has increased Soviet collection opponunities. To lake advantage of this, ihe Soviets can be expected to intensify crperationalefforts b>

Expanding their use of contract diverterslobal basis.

Increasing their dependence on surrogates among the Fast European intelligence services: increasing use Of client stales such as Libya. Vietnam, and North Korea.

> Increasing their exploitation of any vulnerable US and Western defense weapon system coproduciion arrangements in Allied countries.

Relying more on third-country espionage operations targeting US personnel and technology (mostlycoven assets in areas outside the United Stalest

- Fiftoting Third World trade entities dealing with US high technology (the Soviets contend thatofficials, and security services in those countries can be easily victimized).

H

Attempting broader online accessS and other Wesiern data base systems directly from the Soviet Union.

For effective countermcasurc* to keep pace with the evolving Soviet acquisition programs, in particular the highly effective operations of the KGB. the GRU. their surrogates among the East Europeans as well as unscrupulous traders, the West should accurately anticipate Soviet tactics. Western countries should continue to improve and modify their responses. In particular, the West needs to improve and refine its know ledge of Soviet military-technical needs and factor this knowledge into meaningful and practical, multilateral export control lists. Most important,must be increased multinational coordination ofystematicamong the Western customs services aimed at preventing the illegal export and diversion ofsignificant equipment in Ihe face of what clearly willeographically expanding Soviet acquisilion threat.

Much can be done lo stem losses because much Is known about Soviet efforts; ii is not anproblem. But the Soviets' appetite for Western technology will continue to be voracious. They will continue to exploit any weaknesses in Western export controls, as well as policy differences among tbe COCOM countries, to acquire the lechnologiesby their military programs for thend beyond.

This effort is more difficult and costly for them than at any time in the past. The stakes arc high and the Soviets know it; ihcy will devote whatever resources and manpower are required lo fulfill (heir most critical military collection requirements. The West can do no less if it is to succeed in protecting itself as well as frustrating Ihcir efforts. All in thegovernments and privateneed to participate.

Annex

Several Htindred Examples of Soviet Military Equipment andenefiting From Western Technology and Products

There are hundred! of examples of Sovicl military equipmeni and weapons ofhat have benefited or will benefit from the technologies and products of atozen different Western countries. New and advanced technical directions will be incorporated into some of the weapon systems, subsystems, and equipment in each industrial area Given below. The equipment in many projects will have their technical levels raised or project completion dates shortened principally because of the copying of design concepts embodied in Western technical documents,ind military hardware, and dual-use products.

New Fighter Aircraft

New Tactical Fighter of

A Supersonic Aircraft

Ground Attack Aircraft

Airborne Command Post

Reduced-lnfrarcd-Signaiurc Aircraft

Four Transport Aircraft

Reusable Space Shuttle Air-to-Air Missile (US Phoenix-Like) Fire-Comrol System for Three Fighlcr: Gas Turbine Engine Ramjet Engine

and Explosites

m High-Explosive Shelb

m Artillery Shell Sabot Design for Armor-Piercing Tank Round

Armor-Piercing Tungsten Penctrator

mm Gun Aviation Cluster Bomb Remote Mining Shell Delivered by

Artillery. Rockets, and Aircraft Large Caliber Artillery Shell Casing Small Caliber Ammunitions

Noise-Detonatedxrc^lectronic Radio Fuze Mi Hi meter-Wave Proximity Fuze High-Efficiency Proximityfor Mass Munitions

Antisubmarine Torpedo

Antisubmarine Missile

Munitions Testing Equipment

Thermal Decoy Target

Protective Blast Structure

Solid Propellent

Unmanned Target Plane Equipment

and Electro-Optics

Photoreconnaissancc System

Infrared Space Reconnaissance System Space-Based Missile Launch Detection System

Space-Based Infrared Image Processor Synthetic Aperture Radar for Space Reconnaissance

4M2mTank Gun Industrial Gas Laser

Aerial Frame Camera High-Altitude Aerial Camera Coordinate Measuring Machine Portable Antiaircraft Missile System Advanced Night Vision Device Small-Arms Night Sight Holographic Fire-Control System Laser-Guided Artillery Shell Laser Gyro

Optical Computer for Tactical Ballistic Missile

Diamond Turning Device for Mirrors for Future Laser Weapons

Laser Range tinder Antitank Missile

Countermeasure Against US Antitank

Guided Missile Automatic Gun Barrel New Artillery Gun Barrel Sniper Rifle and Machincgun High-Strength Gun Barrel from

Electroslag Steel Automated Rolling Mill for Military

Production

Newew SLBM

Maneuvering Reentry Vehicle (MaRV)

Strategic Cruise Missile

Reusable Space System (Shuttle)

Navigation Satellites

Manned Space-Based Orbital Station

Reentry Vehicle

Carbon-Carbon Noseconc for Reentry Vehicle

Missile Motor Case Material (Based on

DuPonlurface-to-Air Missile Missile Fuel Tank Cryptographic System Telemetry System

System High-Altitude Video Reconnaissance

System Video Processor for Space

Reconnaissance Reconnaissance Radio Receiver Strategic Aircraft and Cruise Missile

Communication System Fiber-Optics Communications System Electronic Countermeasure Station Signals Intelligence Equipment

Narrow-Band Signal Analyzer Cryptographic System Scrambler Magnetic Recorder Fiber-Optical Cable Microcomputer for Communications Programmable Oscilloscope Digital Processor Printed Circuit Board Production Equipment for Communications Correctable Aerial Bomb Remotely Piloted Vehicle Electronic Page Teleprinter

and Computers

Radar System Design Space-Based Occanographic Radar Three-Dimensional Phascd-Array

Radar Over-the-Horiion Radar Shortwave-Band Aircraft Radar High-Capacity Computer

Disk Drives for Ryad Computer Computer Softwareomputer Magnetic-Bubble Computer for

Onboard Missile Computer Matrix Processor

Nuclear and High-Energy Laser*

Weapons Safety Sysiem Space-Based Nuclear Reactor Nuclear Reactors Naval Nuclear Reactor Water-Coolee!Reactor Process for Reactor-Grade Zirconium High-Sensitivity Mass Spectrometer

for Uranium Enrichment Isotope Separation Process

Space-Based Microprocessor for 3

Detector Radiation Detector

Airborne Military High-Pcrurer Carbon Dioxide tCOj and Carbonaser Weapon High-Power Gas Dynamic Laser Space-Based High-Energy Chemical Laser Weapon

Aircraft Carrier Catapults for

Iligh-Performincc Airplanes New Submarine

Submarine Quieting Equipment and

Techniques Antisubmarine Torpedo Telecom rolled Torpedo aanrausaxi Mism c

Laser Submarine Wake-Detection System

Radioactive Submarine Wake-Detection Sysiem

Hydrophone for Aircraft-to-Submarine Communications

Magnetometer

Surface Warship

Warship-Based Multttargct Radar

Firc-Control System Sonar System for Nuclear Submarine Sonar for Surface Ship Sonar for Shins and Helicopters Sonobuoy

Radiowavc UnderwaterSystem for Divcr-Scouu Ship Demagnetize! Gyrohwizcsncxmtpass for Naval Ships Naval Gun

System

Equipment

Microelectronics Tester (Fairchild

Corporationcsicn) LSI IC Circuit Mask Fabricator Mtcroelecironics for Onboard Weapon Systems

Large-Scalc Integrated Circuit Tester Microprocessor (Motorola

ScriesBit Microcomputer Computers (Digital Equipment

Corporation PDP Series Design) Micro- and Mini-computers for

Military Purposes

LSI-1IM.nd REDAC

Designs and Hardware) Memories for Onboard Radar Fire

Control Systems Computer Memories New Semiconductor Thyristor for

Military Equipment

Coupled Devices Traveling Wave Tube for Military

Satellite Communications Space-Based Laser Communication

High-Power Microwave Tube for

Onboard Radar Against Low-

Flying Targets Laser Communication, Detection, and

Ranging System (Hughes Aircraft

0 Design) Infrared TV System MIG Aircraft Centimeter Waveband

Radar with Onboard Digital

Processing Compact Analog-Digital Converter Quartz Resonator Crystal Grower Power Generator

Communication and Telemetry System Microwave Generator

Hybrid Ramiei Engine for Cruise Missile

Solid Rocket Propellant for Strategic Missile

Polyethylene Production System Color Acriiil Photographic Film Photographic Film for Air and Space

Reconnaissance Photographic Film for Space Rccon-

rsa usance (Kodak MU Film) Antistatic Photorcconnaissancc Film low-Density Polyethylene Photoresist System for Microelectronic

Photolithography

Poly amide Composite Materials for

Aircraft and Tank Industries Carbon Fiber Production for Aerospace

Applications Radiation Hardening Paint for Radio-

electronic Equipment Bonding Material for Spaccciaft lon-Eichangc Resins Laser Systems for Remote Chemical/

Biological Reconnaissance Fillers for Deep Sea Vehicles New Gas Mask

Equipment

Turbogenerator Tank-Mounlcd Infrared System Sodium-Sulfur Battery for Missiles,

Space, Tanks, and Submarines Electric Step-Motors for Aviation

Weapon System*

Power Sources for Missile Installations Space-Based Solar Power Cells Spacecraft Temperature Control System

Ship Electrical Supply Sysiem Batteries for Naval Ships

aad Petrochemicals

Fuel for Strategic Cruise Missiles New Jet Engine Fuel Polyurcthane Binders for Solid Rocket Fuels

New Zeolite Catalyst for Molor Fuels Synthetic Motor OH for Tanks in

Arctic Areas (Mobil Oil Company) Synthetic Lubricant for Aerospace

Equipment Radiation-Resistant Additises to

Lubricants for Space New Lubricaat-Cootant for Motor

Vehicles

Rubber-red Fabric Inflated Seal for

Supersonic Military Aircraft Industrial Rubber for Aerospace and

Armored Vehicles Industrial Rubber Seals High- and Low-Temperature

Muoroelasiomer for Aerospace

and Armored Vehicles Improved Protective Gear for

Astronauts and Pilots Radar-Absorbing Camouflage Coating

Original document.

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