Industrial spies become more sophisticated, intelligent

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The methods used for industrial espionage in South Korea are becoming more advanced and intelligent as spies are resort to all means at their disposal to steal technology, including recruiting key personnel and employees overseas in addition to technology leaks under the guise of mergers and acquisitions (M&A).

“The methods have become more sophisticated in recent years, including leaking technology through various routes such as cloud systems and social networking services (SNS),” an official from the National Intelligence Service said. “Beyond hiring relevant employees, industrial spies are crossing the line between legal and illegal by disguising themselves as advisory and research services or acquiring domestic companies to steal their technology.” According to Korean National Police Agency (KNPA) data obtained by Democratic Party of Korea Representative Hong Kee-won, 703 attempts to steal technology were discovered from 2018 to October 2023, with over 300 people arrested in both 2023 and 2022.

“In an era of technological hegemony, prevention is especially important because the damage is irreversible once the technology is leaked,” Hong said. “The primary step should be to increase crime deterrence by strengthening the sentencing criteria to meet the current needs, and we need to secure investigative agencies’ expertise to ensure rapid investigations and accurate assessments of technology value.”

It is also common for spies to target key researchers and executive-level staff with financial incentives, such as high salary offers. They are also increasingly stealing technology via internal employee buyouts as it is highly effective to steal technology from employees who understand its value and have access to it. According to the KNPA, 76 percent of tech thefts were committed by internal employees in 2018, but the figure has risen to 84 percent in 2023 to date.

The problem with tech theft crimes lies with the fact that they are often committed in a sophisticated and covert manner, making it difficult to obtain evidence. “Many employees involved in industrial technology development mistakenly believe that they own the technology,” according to Chang Hang-bae, a professor of industrial security at Chung-Ang University. “We need to expand the number of technology protection experts.”

Even if authorities detect the spies’ domestic high-tech leaks, the weak penalties make it difficult to deter similar practices. Under the Supreme Prosecutor‘s Office’s criteria for handling prosecution cases, leaking national core technology abroad carries a minimum sentence of seven years, and leaking industrial technology abroad five years.

But in practice, the average jail sentence for technology leak offenders fell to 16 months in 2021 and 14.9 months in 2022 from 18 months in 2020, and only 10.6 percent of the offenders were imprisoned during the 2019 to 2022 period.