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International Espionage – Examining the evidence

“The threat of espionage (spying) did not end with the collapse of Soviet communism in the early 1990s. Espionage against UK interests still continues and is potentially very damaging.”  MI5 - 2019

Terrorism and information security / cyber related crime continue to be a significant global threat. We have seen a continual rise in the threat to global business from state-sponsored, commercial and organised criminal espionage.  Government security and intelligence agencies have stressed in recent years that old-fashioned spying has continued to thrive – and media attention over prominent incidents has served as powerful reminders.

In January 2019, Polish authorities arrested two individuals and accused them of conducting espionage on behalf of the Chinese government. One is a Chinese man who is the head of Huawei’s sales in the country. The arrests come amid long running suspicion that Huawei’s products could be used to conduct Chinese intelligence gathering and espionage.

When the high-profile Iran Nuclear talks in Switzerland came to the stage in 2015, it was expected that they would be a magnet for worldwide intelligence agencies. Swiss prosecutors (OAD) voiced suspicions of illegal intelligence services operating and launched two investigations into potential espionage - following a significant number of computers being infected with data gathering malware, bugging devices reportedly discovered at one of the venues, and surveillance signals so prevalent that diplomats vacated the venues to make phone calls in an attempt to avoid interference.

Who are the Perpetrators?

Where we see commonality is in the perpetrating states – in Verizon’s Data Breach Investigation Report, international spying intrusions were blamed on residents of China and other East Asian nations 49% of the time, but Eastern European countries, especially Russian-speaking nations, were the suspected launching site for 21% of breaches. In 2017, the U.S estimated that Chinese intellectual property theft costs the U.S. economy between $225 billion and $600 billion annually.

China is currently experiencing a wave of allegations related to espionage activities in the EU too and according to EU officials, “Hundreds” of Russian and Chinese spies have been planted in and around Brussels’ EU quarter.” Just last week the Lithuanian Intelligence Services warned that China’s economic and political ambitions in Lithuania and other NATO and EU countries had increased.

In 2016, the Canadian Security Intelligence Service (CSIS) openly warned that “[it] remains a target for traditional espionage activities of a number of foreign states”.  Its concern over state-sponsored threats were highlighted as “Russia and China, in particular, continue to target Canada’s classified information and advanced technology”.  Canadian officials are right to be concerned following the 2014 Chinese attack into the National Research Council’s (NRC) network caused the agency’s IT system to shut down.  This openness from Canada, known for its diplomacy may have caused a backlash.  In suspected response to accusations about the NRC, China detained two Canadian nationals for two counts of stealing military secrets under assignment by CSIS, which CSIS Director Coulombe refutes. Although convicted and deported no evidence has been provided to the Canadian Government to back the claims against their citizens.

Corporate Targets

Whilst government agencies are prepared for the state-sponsored intelligence gathering of their counterparts, corporations are less knowledgeable and equipped. During 2011 Laptops were stolen from a Scottish renewable energy manufacturer following a visit by a 60-strong delegation including China’s then Vice-Premier – the group were shown around the key stages of development for an innovative new wave technology.  The link to possible espionage was only made three years later when pictures emerged demonstrating the remarkable similarities between a Chinese project and the Scottish Pelamis technology. Max Carcas, Business Development Director at Pelamis said “Some of the details may be different but they are clearly testing a Pelamis concept”. Suspicions are that Pelamis was targeted by China who have been repeatedly accused of an aggressive industrial espionage strategy.  Questions were raised as to the avoidance by the perpetrators of German engineering giant, Siemens, located in the same premises – the concerns being this is a sign of insider knowledge and evidence of a targeted attack, particularly as no other equipment or IP was taken.

In addition, we see the conflict that espionage presents on the psyche of our own government.  When China General Nuclear Power (CGNPC), the company with a 1/3 stake in the Hinkley Point power station, was charged with nuclear espionage by the US government, it did not deter the UK government who, after stalling the Hinkley Point project over fears of national security, agreed “significant new safe-guards” to allow the go-ahead and get the British-China relationship back on track.  In contradiction to this partnership stance, followed warnings by the Prime Minister’s office that her aides at the G20 should be aware of potential honey traps and suspect gifts from Chinese lures.  Officials were advised to expect their hotel rooms to be bugged for audio and video, as such calculated and frequent illegal fishing for data from lower profile officials is reported to be a preferred method of China’s intelligence gathering community.

It seems that China has taken up the mantle where the cold-war concerns over Russia once stood.  This open and often brazen approach to espionage continues to be showcased week in and week out in our media, and the corporate target needs to be prepared and vigilant.  

Emma Shaw MBA CSyP FSyI FCMI

Managing Director, Esoteric Ltd

Emma is the founder and Managing Director of Esoteric Ltd, a well-established Electronic Bug Sweeping, Counter-Espionage and Intelligence gathering company based in Surrey, UK. An MBA graduate, and a Chartered Security Professional (CSyP) Emma’s early career was spent with the Royal Military Police, followed by a career in the Ministry of Defence.



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