This publication has been produced by the Defense Security Service for use by 

DoD Contractors and Government Agencies as part of their security programs. 

Questions and requests to further distribute this publication should be addressed 

to the Defense Security Service Public Affairs Office. 
Foreword
 

The Defense Security Service (DSS) is responsible for assisting cleared defense industry in the 

identification and reporting of foreign contacts and collection attempts, as outlined in the National 

Industrial Security Program Operating Manual (NISPOM). The development of an annual trends 

document is a direct result of the efforts by cleared defense contractors reporting suspicious activity 

to their facility security officers and ultimately to DSS. 

DSS intends the results and analysis contained in this report to be used by security officials, cleared 

contractors, intelligence professionals, and DoD policy and decision-makers. The annual trends 

document covers some of the most important topics associated with foreign targeting and collection 

attempts directed at the defense industry, including technologies being targeted, how targeting is 

accomplished, and where it originates. 

The goal of DSS is to provide the community with technology collection trends that will help 

improve threat awareness and technology protection related to foreign collection attempts directed 

at the U.S. defense industry. DSS strongly encourages continued reporting of suspicious contact 

reports to DSS field offices. Prompt reporting of foreign collection activity is critical to an effective 

industrial security program. 

H. Anderson
 

Acting Director, Defense Security Service (DSS)
 
Contents
 

I. Introduction
 1 

II. Executive Summary
 2 

III. World Collection Trends 4
 

A. Worldwide Breakdown by Region 4
 

B. Foreign Collectors 4
 

C. Methods of Operation 5
 

IV. Technology Section 7
 

A. Information Technology 8
 

B. Sensors 11
 

C. Aeronautics Systems 14
 

D. Electronics 17
 

E. Armaments & Energetic Materials 20
 

F. Lasers & Optics 23
 

G. Signature Control Technology 26
 

H. Materials & Processing Technology 28
 

I. Chemical Technology 31
 

1. Space Systems 33
 

v. Future Trends Assessment 36
 

VI. Appendix: Method of Operation Definitions, Indicators, and Countermeasures 38
 

Front cover background photo courtesy of Sandia National Laboratories,
 

SUMMiTTM Technologies. All other photos courtesy of the Department of Defense.
 

The 9th Annual Defense Technology Collection Trends publication was prepared by the Defense 

Security Service Counterintelligence (DSSCI) Office. Comment and queries are welcome and may 

be directed to the DSS Counterintelligence Office, 1340 Braddock Place, Alexandria, VA 22314­

1651. 

Approved for public release, ASDA(PA)/05-S-2289 
I. INTRODUCTION 

The Defense Security Service (DSS) 

Counterintelligence (CI) Office presents the 9th 

annual trends document as a tool for security 

professionals. The trends and analytical assessments in this publication are based entirely on 

reports of suspicious foreign activity communicated by DSS industrial security representatives 

and DSS Field CI Specialists. These reports are 

composed of information provided by U.S. 

cleared defense contractors and industry personnel who identify suspicious foreign activity. 

The U.S. defense industry develops and produces the bulk of our nation's defense technology and plays a significant role in creating and 

protecting the information that is critical to 

national security. The National Industrial 

Security Program (NISP) was established to 

ensure that the cleared U.S. defense industry 

safeguards classified information in its possession while performing work on bids, contracts, 

programs, or research and development efforts. 

Based on significant analytical effort, this publication provides general information and draws 

conclusions that help cleared company employees and DSS personnel recognize and report 

suspicious foreign activity. In addition, DSS 

aims to improve this document each year based 

on comments and suggestions that are received 

from the community. Noteworthy changes this 

year include the transition to Section III 

"Emerging Critical Technologies" from the 

Militarily Critical Technologies List (MCTL). 

This section places greater emphasis on sensitive developing technologies and provides a 

higher degree of specificity for understanding 

the technologies targeted. 

Through research presented in this document, 

DSS provides cleared contractors with a tool to 

enact responsive, threat appropriate, and costeffective Security Countermeasures (SCM). 

Furthermore, government agencies are encouraged to use this report to evaluate their own 

threat environments and, when necessary, 

develop additional security countermeasures 

based on trends identified in this document. 
II. EXECUTIVE SUMMARY 

A. Reporting Trends 

This report is based on an analysis of 995 suspicious contact reports received in Fiscal Year 

2004 from cleared defense contractors, DSS 

Industrial Security Representatives (ISR), and 

Field CI Specialists (FCIS). While there was a 

greater number of reports in 2003, the overall 

reporting base for 2004 was larger. This means 

that more of the defense industrial base participated in reporting incidents this year, resulting 

in a study with greater depth and more representative of the industry as a whole. 

An emerging global market, dependent upon 

mass communication, opens the door for legitimate profitable business opportunities to 

become the targets of subversive attempts by 

foreign entities to gain access to emerging sensitive technologies from the United States. This 

year's greater breadth of reporting is the result 

of better communication between the ISR, 

FCIS, and the defense industry. It also reflects 

a greater range of collection attempts based on 

the ability of collectors to communicate easily 

in the global market. 

It should be noted that percentages given 

throughout this document may not total to 

exactly 100 percent due to rounding. 

B. Country Trends 

In 2004, DSS identified 90 countries associated 

with suspicious activities based on U.S. defense 

industry reporting, up from 85 countries in 

2003. These results should not be taken to 

imply that the same 85 countries engaged in targeting U.S. defense technologies in 2003 

remained involved in such activities in 2004. 

Of the 90 countries identified by DSS as collectors of sensitive and classified U.S.defense 

technologies in 2004, only 72 were also identified as collectors in 2003. Fourteen countries 

identified in 2003 data were absent from U.S.
 

defense industry reporting to DSS in 2004.
 

Eighteen additional countries were identified in
 

the same reporting that had not previously been
 

noted as active collectors in 2003.
 

Furthermore, in 2004, the top ten collecting
 

countries accounted for 56.6 percent of all sus­


picious activity, while the top five represented
 

40.5 percent of all suspicious activity. 

C. Technology Interests Trends 

In 2004, technology collection focused more on 

dual-use technologies than militarily specific 

technology. A significant amount of reporting 

centered around the targeting of sensitive but 

unclassified technologies and export controlled 

technologies. While interest in classified technologies remains high, traditional and non-traditional collectors realize the cost benefit of targeting sensitive, export-controlled technologies 

for diversion. These technologies are frequently cutting edge and provide the collector the 

advantage of saving time and costs associated 

with indigenous development of new technologies. Trends this year indicate a continued 

interest in targeting at the component and subcomponent level vice the targeting of complete 

weapons systems. Additionally, suspicious 

activity in 2004 included the targeting of all 20 

militarily-critical technology categories, as 

identified in the Militarily Critical Technologies 

List (MCTL). 

D. Most Frequently Reported Technology 

Targets 

Technologies generating the most foreign interest in 2004 (by frequency of targeting): 

• Information Technology - 21.0% 

• Sensors - 12.6% 

• Aeronautics - 11.8% 

• Electronics - 11.1 % 

• Armaments & Energetic Materials - 9.6% 

• Lasers and Optics - 7.5% 

2
 
• Signature Control Technology - 4.7% 

• Materials and Processing Technology - 3.3% 

• Chemical Technology - 3.0% 

• Space Systems - 2.7% 

This year marked a transition from the 

Militarily Critical Technology List, Volume II to 

Volume III. This change in technology classification is focused on the developing and critical 

technologies that enable advanced U.S. defense 

capabilities. The new list raises the overall 

number of technology categories from 18 to 20. 

The division of the Chemical and Biological 

Systems category and the Sensors and Lasers 

category into two technology categories each 

accounts for the increase in number of technology categories. 

The top ten technologies noted above accounted 

for 87.3 percent of all targeting. Signature 

Control, Aeronautics, and Electronics experienced notable increases in 2004. The most dramatic increase was that of Signature Control 

which experienced a 375 percent increase as 

compared to 2003 data. Targeting against 

Space Systems decreased by 32 percent. 

E. Most Frequently Reported Foreign 

Collection Methods of Operation (MO): 

Methods of Operation (MO) are the techniques 

utilized by foreign entities in an attempt to collect intelligence, scientific and technical information. In 2004, the MO associated with 

attempted collection efforts in order of targeting 

frequency included: 

• Request for Information - 47.5% 

• Acquisition of Controlled Technology - 20.0% 

• Solicitation of Marketing Services - 13.1 % 

• Exploitation of Relationships - 5.3% 

• Exploitation of a Foreign Visit (CONUS) ­

5.1% 

• Other - 2.9% 

• Targeting at ConventionslExpositions/ 

Seminars - 2.8% 

• Suspicious Internet Activity - 2.6% 

• Foreign Employees - 0.4% 

• Cultural Commonality - 0.3% 

The top three MOs were used in 80.6 percent of 

all foreign collection attempts reported to DSS. 

Although Request for Information continued to 

be the most utilized MO, the use of Acquisition 

of Controlled Technology as an MO increased 

by 33 percent. In addition, collectors continued to use a combination of methodologies with 

a request for information often evolving into an 

acquisition attempt. Suspicious Internet 

Activity remained steady, but contributed to 

some of the most successful technology collection events. 

3
 
III. WORLD COLLECTION TRENDS
 

Table 01. Wood Collection Trends - 1997 to 2004 

Year 1997 1998 1999 2000 2001 2002 2003 2004 

Number of Countries with Identified 

Collection Activities 37 47 56 63 75 84 85 90 

A. Worldwide Breakdown by Region. In 

2004, DSS identified 90 countries associated 

with suspicious collection activities. This was 

an increase of five targeting countries as compared to 2003 data. While the final numbers 

between years reveal a difference of five countries, the difference in the actual countries targeting in those years is broader. For example, 

there were 14 countries with reported collection 

attempts in 2003 that did not garner suspicious 

contact reports in 2004. In addition, there were 

18 countries identified with suspicious contact 

reporting in 2004 that did not appear in 2003 

data. The combination of this information 

reveals that over the two year period of 2003 ­

2004, 103 different countries reportedly 

attempted to collect U.S. sensitive and classified information. While many of these countries are as technologically advanced as the 

United States, others are either developing or 

underdeveloped. 

• 

o Eurasia 

U Near East 

The regions in Figure 01 are organized by the 

United States Department of State's six regional 

groupings. The regions represent geographically bound countries that share political, religious, 

and social similarities. In 2004, the majority of 

reported targeting originated from East Asia and 

the Pacific which accounted for 26.8 percent of 

all reporting. East Asian collection attempts 

were followed by attempts from Eurasia at 22.4 

percent, the Near East at 20.9 percent, and 

South Asia at 17.3 percent of total targeting. 

The Western Hemisphere and Africa accounted 

for the minority of targeting in all technology 

categories for the period, with a combined overall total of 12.5 percent of the reported targeting 

in 2004. 

B. Foreign Collectors. DSS identifies types of 

collectors after evaluating reported information, 

conducting extensive research, and assessing 

relationships and representatives in each incident. Each collection attempt is categorized as 

East Asia & Pacific 

(26.8%) 

(22.4%) 

(20.9%) 

South Asia 

•	 (17.3%) •	 Western Hemisphere 

(10.2%) 

Africa 

(2.3%) 

Figure 01. This map reflects the regions where collection efforts originated or the anticipated end user of 

the targeted technology. The associated percentages indicate the level of collection reported in 2004. The 

map does not imply national-level support of collection activity. Collectors may have based their operation 

in a third country to conceal the intentions or identity of the ultimate end-user of the collected technology. 

4
 
originating for either a government, government 

affiliation, commercial, individual, or unknown 

entity. 

Foreign government sponsored targeting, which 

includes Ministry of Defense, Intelligence 

Officers (including foreign military attaches), 

and other official government entities accounted 

for 21 percent of all reported cases in 2004. 

This represented a marked increase from 2003 

for "traditional" (direct foreign government) 

targeting. 

Conversely, the reported targeting by government affiliated collectors experienced a 43 percent decrease from 2003. Foreign governmentaffiliated collection includes research institutes, 

laboratories, government-funded universities, 

and contractors representing governments. 

Foreign companies whose work is exclusively 

or predominantly in support of government 

agencies are also included as government-affiliates. Government affiliated entities accounted 

for 25 percent of all targeting in 2003, but in 

2004 accounted for only 15 percent of targeting. 

Collection attempts by commercial entities 

remained steady with a slight four percent rise 

in targeting. Foreign commercial activities 

include those companies engaged in business, 

in the commercial and defense sectors, whose 

suspicious activity is not identified with a foreign government. Many of these commercial 

collectors may be acting in response to foreign 

government issued requests for products and 

technology that will be incorporated into 

indigenous weapons systems. 

Targeting by individual foreign collectors 

decreased slightly in 2004. Foreign individuals 

include those individuals for whom DSS has 

been unable to identify an affiliation due to a 

lack of information (where only a name or email address is known). It is clear that the 

majority of these incidents involved foreign 

sponsorship or affiliation; however, a small percentage were identified as seeking personal 

financial gain. 

Entities with no known affiliation conducted at 

least 16 percent of targeting. This group of collection attempts included very little clarifying 

information and frequently did not include the 

name of the requester, email, or any other identifying information. 

C. Methods of Operation. DSS analyzes each 

collection attempt to determine the method of 

operation used by a collector which allows for a 

better understanding of the tools and techniques 

used to target the U.S. defense industry. The 

direct request for information was the most 

commonly applied method of operation in 

FY04. These events are commonly associated 

with email, phone, and direct mail correspondence to a facility. The correspondence poses 

specific detailed questions that entail the release 

of sensitive or classified information if 

answered. 

In 2004, 47.5 percent of all reported collection 

attempts involved a request for information. 

This represents is a slight decrease from 2003 

data, and is attributed to the increase in acquisition as a means to collect technology. This year 

the use of Acquisition of Technology as a 

method to collect information and technology 

increased by 33 percent and accounted for 20.0 

percent of all reported cases. These events 

appear to be legitimate sales opportunities for 

contractors, but will eventually involve the violation of export laws or illegal diversion of the 

purchased technology to an unlawful end user. 

The third most popular method was Solicitation 

and Marketing of Services which experienced a 

slight decrease in 2004 and accounted for 13.1 

percent of all collection attempts. Exploitation 

of Relationships again placed fourth in 2004 at 

5.3 percent. Fifth, Exploitation of a Foreign 

Visit (CONUS) as method of operation 

increased, with the number of cases involving 

5
 
____ 

this method doubling between 2003 and 2004, 

accounting for 5.1 percent of all targeting. 

All other methods of operation combined for 

the remaining 9 percent of collection attempts 

reported in 2004. While these methods are not 

as broadly used as the previously mentioned 

methods, it does not imply that these methods 

of operation are any less successful or pose a 

lesser threat to U.S. defense technologies. This 

Figure 02. Methods of Operation in 2004 

Acquisition of
 

Controlled
 

Technology
 

(20.0%)
 

Request for 

Infonnation 

(47.5%) 

'-----­

'------­

is truly evident with the method of Suspicious 

Internet Activity. Although this method 

accounted for only 2.6 percent of the total targeting, the potential for the collection of information from just one computer intrusion event 

is exponentially more damaging than that of 

other methods. 

Other (4.2%) 

Suspicious Internet Activity 

(2.6%)
 

Exploitation of a Foreign Visit
 

(CONUS)(4,4%)
 

Targeting at Conventions,
 

Exhibitions, and Seminars
 

(2.8%)
 

Exploitation of Relationships
 

(5.3%)
 

6
 
IV. TECHNOLOGY SECTION 

DSS documents and reviews foreign interests in 

critical U.S. defense technology in 20 categories, up from 18 categories in 2004. These 

technologies are broken out in the Military 

Critical Technology List (MCTL), Volume III, 

and serve as the blueprint used by DSS to 

define categories and subcategories for each 

technology. The MCTL Vol. III is a detailed 

and structured compendium of emerging technologies the Department of Defense (000) 

assesses to be critical to maintaining superior 

U.S. military capabilities. 

It should be noted that although DSS recorded 

995 suspicious cases, some of the cases reported collection against multiple technologies. 

Therefore, the percentages for targeting are 

based on the number of collection attempts 

against the MCTL categories and not the total 

number of DSS cases. Specifically, the total 

number of collection attempts against all MCTL 

technology combined for 1208 incidents. 

This methodology allows DSS to understand 

the true scope of collection without limiting statistical analysis to one technology collection 

event per case. 

Figure 03. Targeting Against MCTL Vol. III Categories in 2004 

Positioning, Navigation, and 

Time Technology (2.5%) 

Chemical Technology 

(3.0%) 

Weapons Effects (0.5%) 

Space Systems (2.7%) 

Ground Systems (0.6%) 

Information 

Technology 

(21.0%) 

Biomedical Technology (1.2%) 

Materials & Processing (3.3%) 

Nuclear Technology (0.4%) 

Manufacturing & Fabrication 

(1.7%) 

Energy Systems (1.7%) 

Marine Systems (2.2%) 

Signature Control (4.7%) 

Directed Energy & Kinetic 

Energy Systems 0.5%) 

7
 
A. INFORMATION SYSTEMS 

TECHNOLOGY 

Overview 

Fiscal Year 2004 experienced an increase of 

approximately 3 percent in the number of foreign entities targeting Information Systems (IS) 

technologies. With respect to defense technologies as a whole, however, Information Systems 

were targeted at a rate almost twice that of any 

other technology category. These statistics are 

consistent with FY03 levels. 

A disturbing trend for the reporting period was 

the targeting by commercial entities, based in 

U.S.-friendly countries, that retain close ties 

with countries regarded as potential adversaries 

and/or threats to U.S. national security. 

General information and communication systems were the most targeted subcategories of 

Information Systems accounting for 45.3 and 

20.4 percent, respectively, of all reported cases. 

The targeting of modeling and simulation technologies exhibited a marked increase over 

FY03 reporting, increasing eight-fold in FY04 

to almost 9 percent of the overall total in this 

technology category. There was no discernable 

pattern with respect to the type of modeling and 

Image 01. A soldier adjusts outriggers on a Very 

Small Aperture Terminal (VSAT) satellite system. 

(Photo Courtesy of U.S. Army/Mike Kane.) 

8 

simulation technologies targeted. However, the 

East Asia and Pacific region was the most 

active in collecting against this specific subcategory, responsible for approximately 42 percent 

of targeting. 

MCTL Vol. III Technology Categories 

Table 02, below, shows the collection activity 

as reported by U.S. cleared defense contractors 

in FY04 for the Information Systems 

Table 02. Men. Vol. III - Information Systems 

Tectv1oIogy Sub-CategorIes In 2004. 

SUb-Category Percent 

Information Systems Technology 45.3 

Information Communications 20.4 

Information Exchange 2.6 

Information Processing 9.9 

Information Security 4.7 

Information Management and Control 1.1 

Information Systems Facilities 2.9 

Information Sensing 1.8 

Information Visualization and 

Representation 2.6 

Modeling and Simulation 8.8 

Technology category. For an explanation of the 

technologies covered by each subcategory, 

please refer to the Militarily Critical 

Technologies List, Volume III. 
Collection Attempts by Region 

Countries of the East Asia and Pacific region 

were the most active collector in this technoloFigure 04. Collection Activity by Region for 

Information Systems Technology in FY04 

cent, followed by the Western Hemisphere and 

Africa at 10.1 and 3.4 percent respectively. 

Methods of Operation 

Approximately 52.5 percent of Information 

Systems targeting involved foreign Requests for 

Information (RFI), with commercial entities 

representing the largest group of collectors to 

employ the methodology. 

East Asia & Pacific South Asia 

•	 (26.6%) • (17.2%)
 

Near East • Western Hemisphere
 

(21.9%) (10.1%)
 

Eurasia Africa
 

0(20.9%)
 •	 (3.4%) 

gy category during FY04, accounting for 26.6 

percent of all reported attempts. Countries of 

the Near East and Eurasia were a close second The use of hacking and security vulnerabilities 

and third at 21.9 and 20.9 percent respectively. to compromise U.S. contractors' unclassified 

The South Asia region was fourth at 17.2 per- systems became a serious concern during the 

Figure 05. Methods of Operation: Information Systems Technology
 

Collection Attempts
 

Table 03. Affiliallon of Collectors Targedng 

Infonnalion Systems Technology In 2004 

Affiliation Type Percent 

Commercial 41.7 

Government 16.5 

Govemment Affiliated 16.1 

Individual 8.3 

Unknown 17.3 

Request for 

Information 

(52.5%) 

'----

'------

'--

Exploitation of a Foreign Visit 

(CONUS)(4.3%) 

Targeting at Conventions. 

Exhibitions. and Seminars 

(2.3%) 

Other (4.7%) 

Acquisition of Controlled 

Technology (3.3%) 

9 
FY04 reporting period, with at least one successful compromise of a contractor's internet 

web site. While the use of this method was 

infrequent relative to other methods of operation, it should be noted that a single comproInfonnation Systems Collection Attempt 

Image 02. U.S. Army Battlefield Medical 

Information System-Telemedicine (BMIS-T) 

(Photo Courtesy of the U.S. Army.) 

mised system could negatively impact several 

U.S. developing technologies and weapons systems, resulting in significant losses. 

In March 2004, a cleared defense contractor reported 

a collection event when what appeared at first to be a 

legitimate purchase of ruggedized Personal Digital 

Assistants (PDAs) became suspicious. The buyer 

implied that the end user of the technology was a 

U.S. customer, but then later confided to the sales rep 

that the end user was a foreign government. The 

buyer stated that the information should not be shared 

with anyone, The version of the PDA that the individual was attempting to acquire is export controlled and 

designed for military applications. The contractor successfully recognized several indicators of suspicious 

behavior that included the buyer's use of a free email 

service, insistence on purchasing the military version 

of the product, and requesting a demonstration unit. 

10
 
B. SENSORS TECHNOLOGY 

Overview 

Fiscal Year 2004 marks the first year DSS separated Sensor and Laser technologies into two 

categories in accordance with MCTL Vol. III. 

Although this breakdown reduces the overall 

number of cases attributed to each category, 

sensors remained the second most sought after 

MCTL Vol. III Technology Categories 

Table 04, below, shows the collection activity 

as reported by U.S. cleared defense contractors 

in FY04 for the Sensor technology category. 

For an explanation of the technologies covered 

by each subcategory, please refer to the 

Militarily Critical Technologies List, Volume 

III. 

technology in 2004, at 12.6 percent of all collection efforts. 

This year, the number of countries requesting 

sensor technologies experienced a slight 

decrease from last year, down from 46 to 41. 

Just over 29 percent of all foreign collection 

attempts for sensors focused on radar programs, 

with electro-optic sensors receiving 12.6 percent. The majority of foreign requests pertaining to radar programs sought software and simulation modules used to test radar capabilities. 

Surveillance radar systems experienced an 

increase in targeting during 2004. Email 

requests for the Joint Surveillance Target Attack 

Radar System (JSTARS) were sent directly to 

cleared contractors. JSTARS is a long-range, 

air-to-ground surveillance system designed to 

locate, classify and track ground targets in all 

weather conditions. The JSTARS system is 

designed to detect, locate and track moving and 

stationary ground equipment targets, is used primarily by U.S. Armed Forces, and undergoes 

continual upgrades and improvements. 

Table 04. MCTL Vol. III - 8ensors Technology 

Slb-Categortes In 2004. 

Subcategory Percent 

Sensors 45.7 

Acoustic Sensors, Terrestrial Platform 0.7 

Acoustic Sensors, Marine, Active 

Sonar 0.7 

Acoustic Sensors, Marine, Passive 

Sonar 8.6 

Acoustic Sensors, Marine Platform 2.6 

Electro-optical Sensors 12.6 

Radar 29.1 

Land Mine Countermeasures 0.0 

Sea and Littoral Region Mine 

Countermeasures 0.0 

Image 03. The E-8C Joint Surveillance Target Attack Radar 

System (JSTARS) is the only airborne platform in operation that 

can maintain realtime surveillance over a corps-sized area on the 

battlefield. A joint Air Force-Army program, the JSTARS uses a 

multi-mode side-looking radar to detect, track, and classify moving 

ground vehicles deep behind enemy lines in all conditions. (Photo 

Courtesy of the U.S. Air Force.) 

11
 
____ 

Collection Attempts by Region 

Countries of Eurasia were tied with countries of 

the Near East as the most active collectors of 

sensor technologies during FY04, accounting 

for 24.5 percent each of all reported attempts. 

East Asia and the Pacific region was third at 

Figure 06. Collection Activity by Region for Sensors 

Technology in FY04 

Eurasia 

•	 (24.5%)
 

Near East
 

(24.5%)
 

East Asia & Pacific
 

0(20.4%)
 

20.4 percent, followed by South Asia, the 

Western Hemisphere and Africa at 17 percent, 

South Asia 

•	 (17.0%)

Western Hemisphere 

•	 (10.2%) 

Africa
 

(3.4%)
 

10.2 percent and 3.4 percent respectively. 

Methods of Operation 

Request for Information was the most frequently utilized MO used by foreign collectors during this period, relating to 56.1 percent of 

reporting in this technology category. 

Acquisition of Controlled Technology was a 

Table OS. Aflillallon of Collectors Targeting 

Sensors Technology In 2004 

Affiliation Type Percent 

Commercial 34.1 

Government 26.8 

Government Affiliated 14.5 

Individual 10.9 

Unknown 13.8 

distant second, at 13.4 percent, and Solicitation 

and Marketing of Services, third at 9.8 percent. 

The dual use nature of sensor technologies 

Figure 07. Methods of Operation: Sensors Technology Collection Attempts 

Solicitation and Marketing of
 

Services (9.8%)
 

Exploitation of Relationships
 

(7.3%)
 

Other (2.4%)
 

Targeting at Conventions,
 

Exhibitions, and Seminars
 

(3.0%)
 

Suspicious Internet Activity
 

(1.2%)
 

Exploitation of a Foreign Visit
 

(CONUS)(6.7%)
 

12
 
Sensors Technology CoIlecIIon Attempt 

A Middle Eastern company contacted several cleared 

defense contractors using a standard form email, 

requesting to purchase two sets of Long Range 

Position and Velocity Tracking Doppler Radars, complete with tracking antennas, data handling equipment, and essential spares. The requesting company 

stated it would sell the products to an unnamed third 

party. One of the 000 contractors received the same 

email more than once, even though the contracting 

company does not manufacture such materials. Image 04. An air traffic controller with the 48th 

Operations Support Squadron, 48th Fighter 

Wing. (Photo Courtesy of U.S. Air Force I Tech. 

Sgt. Paul R. Caron Jr.) 

qualifies them for export restriction based on 

the International Traffic in Arms Regulations 

(ITAR) or as classified technologies. Many collectors are attempting to capitalize on the dualuse nature of sensor technologies to bypass 

export restrictions. 

Commercial entities are associated with over 

one-third of all sensor technology solicitations 

during the period, with government entities 

placing a close second at 26.8 percent. 

13
 
C. AERONAUTICS TECHNOLOGY 

Overview 

In FY04, Aeronautics Technology was the third 

most targeted technology, with the total number 

of reported Suspicious Contact Reports (SCRs) 

related to U.S. defense aerospace systems 

increasing 35 percent over FY03 collection 

attempts. Table 06, below, shows collection 

attempts as compared to prior years, but is not 

inclusive of all collection attempts for this technology category in FY04. 

as navigation, flight control, and sensors. 

One significant trend during this period was the 

increased interest by foreign collectors in 

Miniature Aerial Vehicles (MAVs). This is likely spurred in part by the operational deployment 

of small tactical UAV systems by the 

Department of Defense in both Afghanistan and 

Iraq in 2003 and 2004. 

MCTL Vol. III Technology Categories 

Table 07, below, shows the collection activity 

Table 06. Collection Attsmpts for Aeronautics Technology - FY97 to FY04. 

Sub-category FY97 FY98 FY99 FYOO FY01 FY02 FY03 FY04 

Aircraft, fixed wing 10 5 6 11 46 13 6 16 

Gas turbine engines 8 5 7 3 7 12 12 9 

Human (Crew Systems) Interface 1 5 - 1 0 1 3 0 

Helicopters 3 1 1 4 9 3 4 7 

Unmanned Aerial Vehicles (UAVs) 4 4 1 4 21 18 36 55 

As Table 06 indicates, Unmanned Aerial as reported by U.S. cleared defense contractors 

Vehicles (UAVs) and their subsystems remained in FY04 for the Aeronautics Technology catethe most targeted Aeronautics Systems sub-cat­ gory. For an explanation of the technologies 

egory for this fiscal year. Collection attempts 

to obtain UAV systems and technologies ran the 

gamut from entire systems to subsystems such 

Image as. A Scan Eagle UAV sits on its catapult 

prior to launch in AI Asad, Iraq. (Photo Courtesy of 

the U.S. Marine Corps/Gunnery Sg1. Shannon 

Arledge.) 

14 

Table 07. MCTL Vol. III - Aeronautics Technology 

SutK:ategarIes In 2004. 

Sub-Category Percent 

Aeronautics Technology 35.7 

Aerodynamics 7.0 

Aeronautical Propulsion 9.1 

Aeronautical Structures 11.9 

Aeronautical Vehicle Control 4.2 

Aeronautical Subsystems & 

Components 

28.0 

Aeronautical Design & Systems 

Integration 

4.2 
covered by each subcategory, please refer to the 

Militarily Critical Technologies List, Volume 

III. 

Collection Attempts by Region 

The Eurasia region was the most active in targeting this technology category in 2004, associFigure 08. Collection Activity by Region for 

Aeronautics Technology in FY04 

Eurasia 

• (28.2%) 

East Asia & Pacific 

(24.2%) 

Near East 

u (18.1%) 

South Asia 

• (14.1%) 

Western Hemisphere 

• (12.8%) 

Africa 

(2.7%) 

ated with 28.2 percent of industry reporting. 

. The East Asian and Pacific region was the second most active with 24.2 percent, followed by 

of the Near East region at 18.1 percent. South 

Asia, first in 2003, dropped to fourth in 2004 

with 14.1 percent. The Western Hemisphere 

and Africa were fifth and sixth with 12.8 and 

2.7 percent respectively. 

Methods of Operation 

Based on contractor reporting to DSS in FY04, 

Requests for Information (RFI) on sensitive and 

controlled aeronautics systems and technologies 

Table 08. AftIIIaIIon d Collectors Targeting 

A8ra18uIIc Techi1oIogy In 2004 

Affiliation Type Percent 

Commercial 32.3 

Government 19.5 

Government Affiliated 15.8 

Individual 18.8 

UnknCMn 13.5 

Aeronautics Technology Collection Attempt 

The foreign-based subsidiary of a cleared DoD 

contractor received an email from an individual 

seeking to purchase several jet engines. The foreign-based subsidiary is a maintenance facility 

established to shorten the logistic chain for commercial aviation jet engine depot level maintenance. These engines are used to power a number of commercial passenger aircraft, but the 

requester specifically requested a military model. 

Research by DSS analysts into the requesting 

company revealed a number of close ties to a 

third country that is a major competitor in the 

design, manufacture, and sale of military aircraft, 

but has historically lagged behind the U.S. in jet 

engine design and performance. 

Image 06. EDWARDS AIR FORCE BASE, Calif. ­

The Global Hawk unmanned aerial vehicle. (Photo 

Courtesy of the U.S. Air Force.) 

represented 48.0 percent of all reporting related 

to the technology category. Twenty percent of 

contractor reports were attempts by various foreign entities to acquire these systems and technologies through marketing ventures and offshore outsourcing. Another 8.7 percent of 

reporting in this category showed foreign entities attempting to acquired controlled technologies through the outright purchase through various schemes to mitigate ITAR restrictions. 

Because many of the technologies in this category are dual use and can be used in civil avia15 
tion as well as other technology fields, almost a 

third of the entities attempting to acquire this 

technology had commercial affiliations. 

Entities associated with a foreign government 

or individuals were the second and third largest 

groups to be identified attempting to acquire 

controlled and restricted U.S. defense technologies at 19.5 and 18.8 percent respectively. 

Figure 09. Methods of Operation: Aeronautics Technology Collection Attempts 

Solicitation and 

Marketing of 

Services 

(20.0%) 

Request for 

Information 

(48.0%) 

Acquisition of Controlled 

Technology (8.7%) 

Suspicious Internet Activity 

(2.7%) 

Exploitation of a Foreign Visit 

(CONUS)(7.3%) 

Exploitation of Relationships 

(3.3%) 

Targeting at Conventions, 

Exhibitions, and Seminars 

(4.7%) 

Other (5.3%) 

16
 
D. ELECTRONICS TECHNOLOGY 

Overview 

Electronics remained the fourth most targeted 

technology category for the second year in a 

row. Overall, entities from 46 countries 

as reported by U.S. cleared defense contractors 

in FY04 for the Electronics Technology category. For an explanation of the technologies covered by each subcategory, please refer to the 

Militarily Critical Technologies List, Volume 

III. 

Table 09. CollectIon AIt8rnpIB for EIedronIcs Techi1oIogy SUb-cat8gortes - FYf11 to FY04 

Subcategory FY97 FY98 FY99 FYOO FY01 FY02 FY03 FY04 

Components I Miaowave Tubes 4 6 12 1 17 50 73 36 

Electronic Materials 2 3 1 0 5 31 0 7 

8edrOnic Fabrication 5 2 4 7 1 1 3 2 

Microelectronics 4 1 1 1 2 2 8 5 

Optoelectronics 5 2 4 7 1 1 2 - Nanoelectronics -­ -­ -­ -­ -­ -­ -­ 28 

attempted to purchase or otherwise acquire 

restricted or controlled technology in the 

Electronics Technology category during the fiscal year. Collection attempts in this category 

increased relative to targeting of other technologies from FY03 levels of 9 percent to 11 percent in FY04. 

MCTL Vol. III Technology Categories 

Table 10, below, shows the collection activity 

Table 10. MC1L Vol. III - EIedronIcs Tedv1oIogy 

ti-Cat8garIes In 2004. 

Subcategory Percent 

Electronics Technology 10.3 

Electronic Components/Microwave 

Tubes 

41.4 

Electronic Materials 8.0 

Electronics Fabrication 2.3 

Mlaoelectronics 5.7 

Nanoelectronics 32.2 

Collection Attempts by Region 

Industry reporting for FY04 shows that the 

most significant collection attempts, 25.2 percent of all suspicious contacts in this technology category, are attributed to countries from the 

Eurasia region. 

Countries in the Near East region were the second most active, followed by East Asia and the 

Pacific and South Asia regions at 22.4, 21.1, 

and 19.7 percent respectively. The Western 

Hemisphere and Africa were a distant fifth and 

sixth place with 8.2 and 3.4 percent respectively 

for FY04. 

Figure 10. Collection Activity by Region for 

Electronics Technology in FY04 

•	 Eurasia 

(25.2%)
 

Near East
 

(22.4%)
 

o	 East Asia & Pacific 

(21.1%) 

South Asia 

•	 (19.7%)

Western Hemisphere 

•	 (8.2%)

Africa 

(3.4%) 

17
 
A cleared DoD contractor reported several suspicious 

ernatl contaeIS from at least two foreign entities, each 

seeking to purchase several two-axis MEM5-based 

gyroscopes. One of the entities forwarded a partial 

Ust of technical specifications for the devices requested. It is not believed that the entities were working in 

concert. however given the time between subsequent 

solicitations and the technical specifications cited, it is 

likely that all of the foreign entities involved were 

seeking to acqUire the technology for the same end 

user. At least one of the entities inquired about 

establishing a marketing arrangement, in which they 

would represent the contractor in the region. Based 

on the technical specifications, it was determined that 

the intended end use of the devices was for a stabilized opkaf system under development by a foreign 

mifttary R&D facility. 

Image 07. An M1 Abrams tank at a remote location in Iraq. The Abrams uses a number of stabilized optical systems to achieve its battlefield 

supremacy. Soldiers are assigned to the 1st 

Infantry Division's Company B, 1st Squadron, 4th 

Cavalry Regiment, deployed in support of 

Operation Iraqi Freedom. (Photo Courtesy of the 

U.S. Army! Pvt. Brandi Marshall! April 30, 2004.) 

Methods of Operation 

Fifty percent of Electronics Technology targeting involved foreign Requests for Information 

(RFI), with commercial entities representing the 

largest group of collectors to employ the 

methodology, comprising 50.4 percent of all 

entities identified in this category. 

As with the majority of the technologies identified by the MCTL Vol. III, a large percentage of 

the technologies in this category have legitimate 

dual use applications. The second most comAlthough suspicious internet activity accounted 

for only 5.9 percent of incidents, events such as 

network vulnerability scans, incidents of hacking, and the exploitation of known security vulnerabilities to compromise U.S. contractors' 

unclassified systems became a serious concern 

during 2004. At least one defense contractor's 

internet website was successfully compromised 

by unauthorized entities. While the use of this 

method was infrequent relative to other methods of operation, it should be noted that a single 

compromised system could negatively impact 

several U.S. developing technologies and 

weapons systems, resulting in significant losses. 

Table 11. AftIIIaIIon of Collectors Targedng 

ElednJllIcs TecMaIogy In 2004 

Affiliation Type Percent 

Commercial 50.4 

Government 13.0' 

Government Affiliated 15.3 

Individual 9.2 

Unknown 12.2 

mon MO used by entities in this category was 

through the attempted acquisition of controlled 

technology, at 29.6 percent. 

18 
Figure 11. Methods of Operation: Electronics Technology Collection Attempts 

Acquisition of 

Controlled 

Technology 

(29.6%) 

___ 

Targeting at Conventions, 

Exhibitions, and Seminars 

(2.6%) 

Exploitation of Relationships 

(3.9%) 

Other (2.0%) 

Solicitation and Marketing of 

Services (5.9%) 

Suspicious Internet Activity 

(5.9%) 

19
 
E. ARMAMENTS & ENERGETIC overall rise in reported targeting incidents to all 

MATERIALS TECHNOLOGY technology groups. 

Overview MCTL Vol. III Technology Categories 

Armaments and Energetic Material Technology Table 12, below, shows the collection activity 

was the fifth most targeted technology group in as reported by U.S. cleared defense contractors 

FY04 with 116 incidents reported. Targeting in FY04 for the Armaments and Energetic 

against this technology group tripled in 2004, Materials Technology category. For an explajumping from 42 incidents in 2003 to 116 incidents in 2004. Foreign entities attempting to 

collect technology in this category were identified from 36 countries. Although a dramatic 

rise in the number of incidents was reported, 

this technology group remained the fifth most 

targeted technology group from 2003. 

Targeting of this technology group represented 

9.6 percent of all reported incidents in 2004, an 

increase of only 0.6 percent from 2003. These 

relatively constant results are largely due to the 

Image 08. A Standard Missile-3 (SM-3) leaves 

the USS Lake Erie (CG 70) enroute to intercept a 

short-range ballistic missile target, launched from 

the Pacific Missile Range Facility, Barking Sands, 

Kauai, Hawaii. (Photo Courtesy of the U.S. Navy / 

24 Feb 2005.) 

Table 12. MCTL Vol. III - Armements & Energeac 

Materials Technology Sub-Categorfee In 2004. 

Subcategory Percent 

Armaments and Energetic Materials 

Technology 9.5 

Small- and Medium-Caliber Weapon 

Systems 3.4 

Tactical Propulsion 0.9 

Safing, Arming, Fuzing, and Firing 

(SAFF) 6.9 

Guns. Artillery, and Other Launch 

Systems 6.9 

Guidance and Control 6.0 

Battlespace Environment 0.9 

Warhead Technologies 2.6 

Lethality and Vulnerability 2.6 

Energetic Materials 23.3 

Mines 0.9 

Missile Systems 32.8 

Survivability, Armor, and Warhead 

Defeat Systems 2.6 

Nonlethal Weapons (NLWs) 0.0 

Demilitarization and Decontamination 0.9 

20
 
nation of the technologies covered by each sub­ in 2004: East Asia and Pacific at 30.7 percent 

category, please refer to the Militarily Critical and Eurasia at 27.6 percent. Near East and 

Technologies List, Volume III. South Asia regions were ranked third and fourth 

with 20.5 percent and 15.0 percent respectively. 

Collection Attempts by Region The Western Hemisphere and Africa were fifth 

and sixth with 5.5 percent and 0.8 percent. 

Geographically, 58.3 percent of all targeting in 

this technology category came from two regions Methods of Operation 

Figure 12. Collection Activity by Region for The most frequent Method of Operation utilized Armaments & Energetic Materials Technology in 

FY04 in targeting Armaments and Energetic Materials 

was the Request for Information, making up 33 

percent of all industry reporting in this category. 

The second most utilized MO was the attempt­ ,.-J. ed acquisition of controlled technology, com­ .	 . \' prising 26 percent of all suspicious contact '\:!;;~--.:. reports in this category by the cleared defense 

.. ,~ industry in FY04. 

East Asia & Pacific' South Asia Several cases involved a foreign government or •	 (30.7%) • (15.0%) 

Eurasia Western Hemisphere government affiliated entity targeting ITAR 

(27.6%) • (5.5%) 

Near East Africa restricted missile systems. These entities 

0(20.5%) III (0.8%) 

Figure 13. Methods of Operation: Armaments & Energetic Materials Technology
 

Collection Attempts
 

Services (8.3%) 

Acquisition of ,----__ Solicitation and Marketing of Controlled 

Technology
 

(25.8%)
 

Targeting at Conventions, 

Exhibitions, and Seminars 

(3.8%) 

Suspicious Internet Activity 

(3.0%) 

Request for 

Other (5.3%) Information 

(32.6%) 

___	 Exploitation of a Foreign Visit 

(CONUS)(9.1 %) 

----.L__--'...,....:'-------- Exploitation of Relationships 

(12.1%) 

21
 
sought information or associated technologies 

from cleared defense contractors primarily 

through attempts to exploit existing Foreign 

Military Sales (FMS) agreements. Attempts 

included contacts via inappropriate channels 

and inquiries beyond the scope of the agreement. 

Other common cases involved exploitation of 

relationships in the context of military liaison 

dealing with missile defense or missile production and/or sales. In these cases, foreign entities sought to acquire restricted or classified 

information during visits to cleared contractors 

in the liaison program, attempted to visit unauthorized locations, or contacted a contractor 

claiming that approval for restricted information 

had been already granted by the U.S. government. 

Unlike the other technology categories, 

Armaments and Energetic Materials is largely a 

single use technology, with a few exceptions for 

Table 13. AfIIlladon of Collectors Targeting 

Annament8 & Energetic MaterIals Technology In 

2004 

Affiliation Type Percent 

Commercial 20.9 

Government 40.9 

Government Affiliated 13.6 

Individual 10.0 

Unknown 14.5 

various civilian applications. As a result, it can
 

clearly be determined that the largest percent­


age of all industry reporting in this technology
 

category relates to government sponsored tar­


geting, making up 40.9 percent in 2004.
 

Entities with a commercial affiliation were the
 

second largest group of collectors in 2004, com­


prising 20.9 percent of reporting in this catego­


ry.
 

Armam8IIts & EnergeCIc MaterIals Technology 

CollectIon AIt8mpIs 

In June 2004, an employee of a cleared defense 

contractor received a telephone call from a male who 

stated that he was responsible for a training issue for 

a foreign military service and working closely with the 

U.S. Army Training and Doctrine Command 

(TRADOC) in obtaining new training information. 

The caller told the cleared defense contractor 

employee that the TRADOC liaison suggested he 

caD the contraelor to gather information on "the 

Loitering Attack Missile, the Precision Attack Missile, 

aneth Kinetic Energy Missile" The caller requested information on operational delivery dates and 

costs for these systems. When the cleared defense 

contractor employee refused to discuss any of these 

programs, the caller attempted to reassure them that 

it was okay, as it had been approved by TRADOC. 

The employee still refused to reveal any information 

to the caller, and the caller thanked the employee for 

his time. and terminated the call. 

Image 09. A Tomahawk Land Attack Missile 

(TLAM) is launched from the guided missile cruiser USS Cape St. George. (Photo Courtesy of the 

U.S. Navy I Intelligence Specialist 1st Class 

Kenneth Moll I March 23, 2003) 

22
 
F. LASERS & OPTICS TECHNOLOGY 

Overview 

Fiscal Year 2004 marked the first year in which 

DSS tracked Lasers & Optics Technology as a 

separate technology category from the Sensors 

category. Elements of the subcategories were 

drawn from both the Sensors and Electronics 

categories. As a result, both the Sensors and 

Electronics statistical data for this period are 

atypical when compared to trends developed 

over the last few years. In FY03, Sensors and 

Lasers combined to account for 17 percent of 

all targeting attempts. This year, Lasers & 

Optics were the sixth most frequently targeted 

technology accounting for 7.5 percent of all 

U.S. defense industry reporting and targeting 

from entities in 45 countries. 

Examples of technologies sought by foreign 

entities in FY04 are laser range finders, laser 

target designators, and LIDAR (Light Detection 

and Ranging). These examples were the most 

heavily targeted technologies within the Lasers 

& Optics category. 

Image 11. Hinged Polysilicon Mirror and Drive 

Motors. (Photo Courtesy of Sandia National 

Laboratories, SUMMiTTM Technologies.) 

MCTL Vol. III Technology Categories 

Table 14, below, shows the collection activity 

as reported by U.S. cleared defense contractors 

in FY04 for the Lasers & Optics Technology 

category. For an explanation of the technologies covered by each subcategory, please refer 

to the Militarily Critical Technologies List, 

Volume III. 

Image 10. Night Vision Optics - A M2A2 Bradley 

Fighting Vehicle trains its 25mm chain gun on 

enemy targets in Samarra, Iraq. (Photo Courtesy of 

Department of Defense) 

23 

Table 14. MC11. Vol. lII-l.asenI & Opdcs 

Technology SUb-CategorIes In 2004. 

Subcategory Percent 

Lasers & Optics Technology 34.3 

Lasers 21.2 

Optics 21.2 

Optical Materials & Processes 3.0 

Supporting Technology & Applications 7.1 

Optoelectronics & Photonics 13.1 

Collection Attempts by Region 

Interest in lasers and optics was evenly spread 

between regions of the Near East, Eurasia, and 

East Asia with each accounting for 25.8,24.2, 

and 22.7 percent respectively. South Asia was 

fourth at 18.2 percent and the Western 

Hemisphere and Africa were a distant fifth and 
South Asia 

•	 (18.2%) •	 Western Hemisphere 

(8.3%)
 

Africa
 

(0.8%)
 

•	 Near East
 

(25.8%)
 

Eurasia
 

(24.2%)
 

o	 East Asia & Pacific
 

(22.7%)
 

sixth with 8.3 and 0.8 percent respectively. 

Methods of Operation 

The most frequently observed MO for targeting 

technologies in the Lasers & Optics category 

involved foreign Requests for Information and 

accounted for approximately 45 percent of all 

reporting in this category. Attempts to acquire 

controlled technologies comprised 29.4 percent 

Figure 14. Collection Activity by Region for Lasers 

& Optics Technology in FY-04 

Table 15. AffIliation of Collectors Targellng Lasers 

& 0pIIcs Technology In 2004 

Affiliation Type Percent 

Commercial 40.7 

Government 17.6 

Government Affiliated 18.7 

Individual 9.9 

Unknown 13.2 

of industry reporting for this category in FY04. 

The third most commonly used MO, at 13.7 

percent, was the solicitation of marketing services, such as market representation in the country, or offshore back office services and engineering support. 

Because of the rise in consumer demand for 

digital cameras, digital video disc (DVD) systems, and a host of other consumer and industrial applications, the largest single group of 

collectors in this category was associated with 

commercial organizations, accounting for 40.7 

percent of targeting incidents. 

Figure 15. Method of Operation: Lasers & Optics Technology Collection Attempts 

Acquisition of
 

Controlled
 

Technology
 

Request for 

Infonnation 

(45.1%) 

(29.4%) Exploitation of a Foreign Visit
 

(CONUS)(2.0%)
 

Exploitation of Relationships
 

(4.9%)
 

Other (2.0%)
 

Suspicious Internet Activity
 

(2.9%)
 

24 
Government and government affiliated entities, 

such as government sponsored academic institutions and research facilities, were the second 

and third largest groups identified by DSS with 

18.7 and 17.6 percent respectively. 

Example of Lasers & Optics Technology Collection
 

Attempt
 

A cleared contractor received an email from a doctoral 

student requesting information on an "ultraviolet missile warning system." The student claimed that the 

request was the subject of a research project 

assigned by his professor. This incident is suspicious 

as the email originated from a commercial internet 

service provider vice an .edu top level domain, and 

the university that the individual claimed to be attending is known to be closely associated with military 

research programs for the national defense forces. 

Requests such as these from university students to
 

industry are common and rely on academic
 

Image 12. Two F-15Es from the 90th Fighter 

Squadron, Elmendorf Air Force Base, Alaska, fire 

a pair of AIM-7Ms during a training mission. The 

mission took place over the Gulf of Mexico just off 

the coast of Florida. (Photo Courtesy of the U.S. 

Air Force.) 

researchers to freely exchange information. However, the specific nature of the request is not consistent 

with a doctoral student research project, as it is focused on a specific system rather than a specific technology or field of scientific research. 

25
 
G. SIGNATURE CONTROL 

TECHNOLOGY 

Overview 

In FY04, the Signature Control Technology category returned to the DSS Top 10 List, due to 

increased attempts by foreign collectors to 

obtain these technologies. Most notably, the 

level of targeting by foreign nationals made signature control technologies the seventh most 

targeted system for 2004, at 4.7 percent, and 

represents a more than threefold increase over 

2003 levels. 

MCTL Vol. III Technology Categories 

Table 16 shows the collection activity as reported by U.S. cleared defense contractors in FY04 

for the Signature Control Technology category. 

For an explanation of the technologies covered 

Signature Control Technology Collection Attempt 

In a specific case, a Near East-based company 

contacted a cleared defense contractor involved 

in stealth technology research. The entity sought 

to purchase radar-absorbing material for an 

unidentified customer. DSS analysts determined 

the request was an attempt to acquire controlled 

technologies for a weapons program in an embargoed country in the region. 

Image 13. A B-2 Spirit soars through the sky after 

a refueling mission. (Photo Courtesy of the U.S. 

Air Force I Tech. Sgt. Cecilio Ricardo.) 

Table 16. MCTL Vol. 111- SIgnature Control 

Techi1oIogy Subcategories In 2004. 

Subcategory Percent 

Signature Control Technology 94.7 

Tailored Property Materials 0.0 

Multifunction Systems and 

Subsystems 5.3 

Systems Engineering and Integration 0.0 

by each subcategory, please refer to the 

Militarily Critical Technologies List, Volume 

III. 

Collection Attempts by Region 

Entities from a total of 35 countries attempted 

to gain access to ITAR controlled or classified 

technologies under the Signal Control category 

in FY04. Targeting of this technology category 

by East Asia and Pacific countries equaled that 

Figure 16. Collection Activity by Region for 

Signature Control Technology in FY04 

South Asia 

•	 (12.5%) •	 Western Hemisphere 

(10.0%) 

Africa 

•	 (1.3%) 

by countries of Eurasia, both regions accounting for 28.8 percent. The Near East and South 

Asia regions were third and fourth with 18.8 

percent and 12.5 percent respectively. The 

Western Hemisphere and Africa placed fifth and 

•	 East Asia & Pacific 

(28.8%) 

Eurasia 

0(28.8%) 

Near East 

0(18.8%) 

26
 
sixth at 10.0 percent and 1.3 percent for FY04. 

Methods of Operation 

The most frequent method of operation utilized 

by entities attempting to collect against 

Signature Control Technology in 2004 was via 

Requests for Information with 67.5 percent of 

reporting in this category. 

Table 17. AffIliation of Collectors Targeting 

Signature Control TectI1oIogy In 2004 

Affiliation Type Percent 

Commercial 44.7 

Government 21.1 

Govemment Affiliated 18.4 

Individual 5.3 

Unknown 10.5 

Another 20.0 percent of reporting had entities 

seeking to acquire the technology outright, 

making this method of operation the second 

most frequently used tactic. 

Consistent with other targeted technologies, signature control systems were targeted primarily 

by commercial entities, identified in 44.7 percent of the cases in this category. The second 

and third largest groups identified were those 

with a government and government affiliated 

associations, at 21.1 and 18.4 percent respectively. 

Figure 17. Methods of Operation: Signature Control Technology Collection Attempts 

Acquisition of 

Controlled 

Technology 

(20.0%) 

Targeting at Conventions,
 

Exhibitions, and Seminars
 

(2.5%)
 

Suspicious Internet Activity
 

(1.3%)
 

Exploitation of a Foreign Visit
 

(CONUS)(3.8%)
 

Solicitation and Marketing of
 

Services (1.3%)
 

Exploitation of Relationships
 

(3.8%)
 

27
 
H. MATERIALS & PROCESSING 

TECHNOLOGY 

Overview 

Materials & Processing Technology was the 

eighth most targeted ITAR-controlled technology by foreign collectors during FY04. 

Incidents involving Materials and Processing 

Technology accounted for 3.3 percent of all 

reported incidents submitted by cleared defense 

contractors to DSS during FY04. 

Targeting was primarily centered around structural and special function materials, which 

accounted for a combined total of 48.7 percent 

of targeting in this category. Collectors showed 

interest in composites, adhesives, magnets, and 

special properties of such metals as new special 

purpose aluminum and titanium alloys. 

MCTL Vol. III Technology Categories 

The table below shows the collection activity as 

reported by U.S. cleared defense contractors in 

FY04 for the Materials & Processing 

Image 14. A NASA spacesuit consists of 14 layers 

of nylon tricot, spandex, urethane-coated nylon, 

dacron, neoprene, aluminized mylar, gortex, kevlar, 

and nomex. (Photo Courtesy of NASA /1995.) 

28 

Technology category. For an explanation of the 

technologies covered by each subcategory, 

please refer to the Militarily Critical 

Technologies List, Volume III. 

Table 18. MCTL Vol. 111- Materials & ProceaIng 

TectvIoIogy SubcategoI1es In 2004. 

Subcategories Percent 

Materials & Processing Technology 38.5 

Armor and Anti-armor Materials 2.6 

Electrical Materials 2.6 

Structural Materials 25.6 

Special Function Materials 23.1 

Smart Materials and Structures 7.7 

Micromachined Materials & Structures 0.0 

Magnetic Materials 0.0 

Collection Attempts by Region 

Entities from 21 countries attempted to gain 

access to ITAR controlled or classified technologies under the Materials & Processing category in FY04. Regionally, South Asia was the 

most active accounting for 26.3 percent of all 

incidents in this category. The East Asia and 

the Pacific region and the Eurasia region are 

tied for second at 21.1 percent each. The Near 

East, the Western Hemisphere, and Africa 

placed fourth, fifth and sixth respectively with 

18.4 percent, 7.9 percent and 5.3 percent in 

Figure 18. Collection Activity by Region for 

Materials & Processing Technologies in FY-04 

•	 South Asia 

(26.3%) 

o East Asia & Pacific 

(21.1%) 

o	 Eurasia 

(21.1%) 

Near East 

•	 (18.4%) •	 Western Hemisphere 

(7.9%) 

Africa
 

(5.3%)
 
FY04's ranking of regional activity. 

Methods of Operation 

Overall, foreign collectors targeting Materials & 

Processing Technology used the RFI method of 

operation most frequently, often via the internet, 

accounting for at least 55.0 percent of all incidents reported to DSS during FY04. The solicitation and marketing of services was the second-most frequently used method to transfer 

Materials & Processing Technology, accounting 

for 20.0 percent of 2004 reporting in this category. Internet offers to purchase this technology outright were the third-most preferred 

method utilized by foreign collectors, accounting for 15.0 percent of industry reporting in this 

technology category. 

From the standpoint of case histories, these particular statistics verify the trend that the main 

research and development efforts in advanced, 

dual-use technology originate with the commercial sector long before any government decides 

that such cutting-edge technology would be 

useful for its military forces, thus providing an 

exception to the established belief that these 

developments often evolve in the "tactical to 

the practical" mode. 

Table 19. AfIIliation of CoIIec::t0r8 Targeting 

Materials & ProcessIng Technology In 2004 

Affiliation Type Percent 

Commercial 47.4 

Government 13.2 

Govemment Affiliated 7.9 

Individual 18.4 

Unknown 13.2 

In reference to the reported instances involving 

foreign collectors that targeted Materials & 

Processing Technology during FY04, DSS identified the majority of these foreign colleCtors as 

Figure 19. Methods of Operation: Materials & Processing Technology
 

Collection Attempts
 

Request for 

Information 

(55.0%) 

Targeting at Conventions, 

Exhibitions, and Seminars 

(5.0%) 

Exploitation of Relationships 

(2.5%) 

Foreign Employees (2.5%) 

29
 
having either commercial or individual origins, 

accounting for 47.4 percent and 18.4 percent 

respectively. Government and government 

affiliated entities accounted for 21.1 percent of 

the reported collection attempts. 

MaterIals & ProcessIng Technology CoIlec:tlon 

Attempt 

On May 26, 2004, the sales email address of a 

cleared defense contractor received an email 

requesting the contractor to fabricate an el~rostatic defledor from titanium. The email specifically cited machining and finishing requirements 

for the parts to be machined and included a partial 

set of drawings for the contractor to develop a 

price quote. It was determined that the request 

came from an entity associated with a foreign 

govemment-run debarred atomic research facility. 

Image 15. Advanced Photon Source (APS) 

storage ring sector. (Photo Courtesy of Argonne 

National Laboratory.) 

30
 
I. CHEMICAL TECHNOLOGY 

Overview 

As with Sensors and Laser technologies, FY04 

marks the first year that DSS has separated into 

two categories the Chemical and Biological 

Systems technologies, in accordance with 

MCTL Vol. III. Although this breakdown 

resulted in a decrease in the overall number of 

cases attributed to each category, Chemical 

Technology remained a significant target of foreign collectors, with industry reporting to DSS 

showing individuals from 25 countries as having a suspicious interest in this category. 

Those countries identified as the largest collectors of U.S. classified and controlled technologies were also the largest collectors in this technology category. 

MCTL Vol III Technology Categories 

Table 20, below, shows the collection activity 

as reported by U.S. cleared defense contractors 

in FY04 for the Chemical Technology category. 

For an explanation of the technologies covered 

by each subcategory, please refer to the 

Militarily Critical Technologies List, Volume 

III. 

Table20. Men. Vol. 111- ChemIcal TecMoIogy 

&Jategortes In 2004. 

Subcategory Percent 

Chemical Technology 61.1 

Defense Systems 5.6 

Dissemination &Dispersion 2.8 

Material Production 2.8 

Detection, Warning, &Identification 27.8 

Obscurants 0.0 

Collection Attempts by Region 

In FY04, 25 countries were identified through 

Image 16. Members of the Missouri National 

Guard's new CERFP (Chemical, Biological, 

Radiological, Nuclear, Explosive Emergency 

Response Force Package) spray a "victim" of a 

toxic chemical attack during an Army evaluation of 

the team's ability to deal with a weapon of mass 

destruction near Jefferson City on July 24, 2004. 

(Photo Courtesy of the Department of Defense / 

Master Sg1. Bob Haskell /2004.) 

requests for technologies associated with the 

Chemical Technology category. Regionally, 

Figure 20. Collection Activity by Region for 

Chemical Technology in FY04 

East Asia & Pacific Near East 

•	 (28.6%) • (16.7%)
 Eurasia Western Hemisphere
 

0(23.8%) •	 (7.1%) South Asia Africa
 

0(21.4%) (2.4%)
 

countries of the East Asia and Pacific region 

were the most active, accounting for 28.6 percent of all industry reporting in this technology 

category. Eurasia as a region were second with 

23.8 percent, followed by South Asia, the Near 

East, the Western Hemisphere, and Africa, at 

21.4,16.7, 7.1 and 2.4 percent respectively. 

31
 
Methods of Operation 

The most frequently used method of operation 

by entities collecting in this technology category were Requests for Information at 61.0 percent. The second and third most frequently 

used MOs were attempts to acquire controlled 

technology and the solicitation of marketing 

Table 21. AfIIllatlon of Collectors Targellng 

Chemical Technology In 2004 

Affiliation Type Percent 

Commercial 41.7 

Government 19.4 

Government Affiliated 13.9 

Individual 11.1 

Unknown 13.9 

and offshore services at 14.6 and 12.2 percent	 gory were affiliated with commercial entities. 

respectively.	 The second largest group were those with ties 

to foreign governments, at 19.4 percent. 

Nearly 42 percent of all collectors in this cateFigure 21. Methods of Operation: Chemical Technology Collection Attempts 

Request for 

Information 

(61.0%) 

'---- Other (4.9%) 

Exploitation of a Foreign Visit
 

(CONUS)(2.4%)
 

Exploitation of Relationships
 

(2.4%)
 

Suspicious Internet Activity
 

(2.4%)
 

QBnIcaI Technology CoIIedIon Attempt 

During the spring of 2004, a US company received a telephone call from a -businessman- claiming to have 

interest in purchasing approximately 100,000 standard pounds, of Ammonium Perchlorate (NH4CL04), an 

explosive material. The company informed the man it was unable to sell such materials to an unknown 

vendor. Investigation later disclosed the requester's address was located in a residential area and did not 

have storage or safeguarding capabilities. 

32
 
J. SPACE SYSTEMS TECHNOLOGY 

Overview 

In FY04, Space Systems Technology ranked 

tenth in targeting by foreign collectors, down 

from seventh place in FY03. Foreign entities 

requested information, attempted to purchase, 

or attempted to acquire technologies related to 

satellite communications, the Global 

Positioning System (GPS), satellite design 

methodologies and simulation software, and 

space qualified electronics and materials. 

While direct space access remains limited to a 

small number of countries, countries worldwide 

are increasingly dependent on services provided 

by space systems - international telecommunications and internet access, weather forecasting, 

banking and commerce, and precise navigation 

and timing are just a few examples. 

Examples of space systems technologies sought 

by foreign collectors during FY04 include optical systems for space observatories, composites 

and coatings used for spacecraft survivability, 

satellite communications systems, and Global 

Positioning System technologies. 

MCTL Vol. III Technology Categories 

The table below shows the collection activity as 

reported by U.S. cleared defense contractors in 

FY04 for the Space Systems Technology category. For an explanation of the technologies 

covered by each subcategory, please refer to the 

Militarily Critical Technologies List, Volume 

III. 

Image 17. A Delta II, carrying a Global 

Positioning System satellite, launches from Cape 

Canaveral, Florida. In the first six days of 

Operation Iraqi Freedom, more than 80 percent of 

the munitions that hit several thousand targets 

were precision-guided. (Photo Courtesy of NASA I 

Carlton Bailie) 

Table 22. MCTl Vol. III - Space Systems 

Technology Subcategortes In 2004 

Subcategory Percent 

Space Systems 42.4 

Space Avionics and Autonomy 9.1 

Electronics and Computers 12.1 

Launch Vehicles for Space Systems 9.1 

Space Optics 6.1 

Power and Thermal Management 6.1 

Propulsion for Space Systems 3.0 

Sensors for Space Systems 3.0 

Survivability in Space 3.0 

Structures for Space 6.1 

Integrated Systems 0.0 

Space-Based Lasers (SBLs) 0.0 

Collection Attempts by Region 

The overall number of countries associated with 

Space Systems Technology collection in FY04, 

as identified by industry reporting to DSS, 

declined slightly from 19 in FY03 to 15. Of 

these, the East Asia and Pacific region countries, at 30.3 percent, were the most active in 

33
 
Figure 22. Collection Activity by Region for Space 

Systems Technology in FY04 

Figure 23. Methods of Operation: Space Systems Technology Collection Attempts 

•	 East Asia & Pacific . 

(30.3%) 

o	 South Asia 

(27.3%) 

Eurasia 

0(18.2%) 

Near East 

•	 (15.2%) •	 Western Hemisphere 

(9.1%) 

Africa (0.0%) 

targeting classified and International Traffic in 

Arms Regulation (ITAR) restricted U.S. space 

systems and technologies. The South Asia 

region, first in FY03, dropped to second in 

FY04, with Eurasia countries placing third. 

The Near East placed fourth in FY04 at 15.5 

percent. The Western Hemisphere and Africa 

placed fifth and sixth with 9.1 and 0.0 percent 

respectively. 

Acquisition 

of Controlled 

Technology 

(23.5%) 

Table 23. AffIliation of Collectors Targedng Space 

Systems Technology In 2004 

Affiliation Type Percent 

Commercial 38.7 

Government 9.7 

Government Affiliated 12.9 

Individual 29.0 

Unknown 9.7 

Method of Operation 

Based on contractor reporting, Requests for 

Information (RFI) on sensitive and controlled 

Space Systems and technologies represented 

50.0 percent of all reporting related to the technology category. The second most commonly 

used method of operation, at 23.5 percent, was 

attempts to acquire these systems and technologies by purchasing them. The third most common MO , at 14.7 percent, was solicitations for 

marketing and off-shore services by various 

entities. 

Suspicious Internet Activity
 

(2.9%)
 

Exploitation of Relationships
 

(2.9%)
 

Foreign Employees (2.9%)
 

Other (2.9%)
 

34
 
The largest group of entities identified from 

reporting were those with commercial ties, followed by individuals with no known other affiliations as 38.7 and 29.0 percent respectively. 

Space 8)8t8ms TectI1oIogy Collection Attempt 

A South Asian company contacted an East coastbased CJeared Technology Center via email, stating 

that their lI"Inamed dient had an outstanding requirement for two -high temperature diode stack arrays.· 

The email also forwarded a short list of technical 

specifications. A review of the technical requirements 

by DSS analysts revealed that the company was in 

fact seeking to obtain two high temperature laser 

diode stacks based on the technical specifications forwarded by the South Asian company. 

The approach by the company to the Cleared 

Technology Center was typical of a majority of contacts by foreign companies seeking to obtain ITAR 

COI1IJ"OIIed or: classified technologies from U.S. 

defense contractors. The sender of the email also 

detailed business items, such as how to prepare the 

qwte and a reminder to include a fixed percentage 

commission in the quotation as the commission to the 

intermediary. 

Image 18. STS112-37S-Q33 (16 October 2002)-­

The International Space Station (ISS), photographed by a crewmember on board the Space 

Shuttle Atlantis. (Photo Courtesy of NASA) 

35
 
V. Future Trends Assessment 

The analytical work presented in this study 

brings into focus new as well as continuing 

trends from the past year. 

Trends over the past five years indicate a progressively increasing number of suspicious contact reports by cleared defense contractors. 

DSS anticipates that this trend will continue in 

the future with a probable leveling in regard to 

the number of countries targeting each year. 

Collectors will continue to make good use of 

improved methods of communication and the 

vast amount of information that is available 

from open sources including advertising and 

information provided by defense contractors 

through their web-sites. As the defense business becomes increasingly global, contractors in 

the National Industrial Security Program (NISP) 

will encounter a greater threat from foreign 

adversaries and economic competitors who will 

use the pretense of legitimate business as a vector to steal and illegally transfer technology. 

DSS anticipates increased targeting from commercial entities rather than government sponsored targeting. The benefit of economic gain 

from the transfer of developing technologies is 

likely to motivate foreign businesses who seek 

to improve their own fiscal health through the 

acquisition and application of advanced technologies without the investment for research 

and development. This slow erosion of our 

technological supremacy to foreign competitors 

may result in a degradation of the competitiveness of U.S. technology firms in the global market. Additionally, governments who have close 

ties to these companies will benefit from the 

advanced technologies. 

DSS noted in its 2004 report that acquisition 

would likely increase in the coming years with 

precise targeting by foreign entities following 

well-placed request for information inquiries. 

Indeed, technology collection via attempted 

acquisition increased this year by 33 percent. 

Foreign entities are able to save significant time 

and money by acquiring technologies which 

cuts out costs associated with research and 

development. To this end, DSS anticipates a 

further increase in the use of acquisition as a 

method to collect and transfer technology. In 

addition, DSS anticipates that collectors will 

continue to use a combination of methodologies 

with a request for information often evolving 

into an acquisition attempt. Suspicious internet 

activity remained steady but accounted for 

some of the most successful technology collection events this year. 

DSS also anticipates an increase in suspicious 

internet activity against cleared defense contractors in the defense industrial base. Due to the 

potential for the collection of massive amounts 

of information from just one successful computer intrusion event, the impact of collection via 

this method can be exponentially more damaging than that of other methods. Additionally, as 

more nations mature their computer network 

operations and exploitation capabilities, the risk 

to sensitive information on U.S. computer systems will increase. 

With regard to actual targets, Information 

Technology and Sensors are firmly established 

as the two most frequently targeted categories. 

DSS believes that targeting of sub systems and 

components will continue to increase as more 

nations become capable of reverse engineering 

U.S. technology and incorporating U.S. 

advanced technology into their own indigenous 

efforts. Of note, targeting against Signature 

Control Technology experienced a sizable gain 

in 2004. Targeting of this technology may continue in 2005 as it appears that more universities and technical centers are establishing 

research programs involving this technology. 

Overall, cleared defense contractors can expect 

36
 
increased interest in all manner of advanced and 

developing technologies. The added dimension 

of increased commercial endeavors with foreign 

entities will have an impact on the security and 

counterintelligence community's ability to differentiate between technology collection and 

legitimate business. Collectors will likely use 

this venue to target and then exploit U.S. companies developing sensitive technologies. 

Many countries already espouse a policy of collecting any and all U.S. military and dual use
 

technology, no matter how insignificant, in an
 

attempt to assemble a great body of technologi­


cal work for their own exploitation.
 

Considering the aggressive collection posture of
 

some nations, the U.S. defense industrial base
 

will encounter an increasing tenacious and mul­


tidimensional threat environment.
 

37
 
VI. Appendix: MO Definitions, Indicators 

and Countermeasure 

Request for Information (RFI). A request for 

information is any request, not solicited by the 

cleared company, received from a known or 

unknown source that concerns classified, sensitive, or export-controlled information. While 

the recipient may not have directly solicited the 

request, the inquiry may have be en indirectly 

solicited through technical journ al and website 

advertisements. An example of an unwanted, 

but indirectly solicited request is an incident 

where a cleared defense contrac tor's product 

was reviewed in a trade journal and the company subsequently received anumber of suspicious, but "solicited," reader ser vice card 

inquiries from an embargoed co untry. 

Requests for Information (RFI) 

Indicators Countermeasure 

• Technology is ITAR-controlled • Incorporate security into web des ign and adver 

• The CDC does not normally conduct business tising 

with the foreign requester • Initiate an active monitoring solu tion website 

• The request originated from an embargoed • Report requests to FSO, the Indu strial Security 

country Representative, and to DSSCI (s imilar requests 

• The request is unsolicited or unwarranted may have been received by mult iple U.S. 

• The requester claims to represent an official cleared facilities for the same tee hnology)

government agency but avoids proper channels • Ask who the requester represent s and why they 

to make the request are seeking the requested inform ation

• The initial request is directed at an employee • Clearly post notification on comp any websites 

who does not know the sender and is not in the for those products and technolog ies that are 

sales or marketing office export controlled 

• The requester is fishing for information 

• The requester represents an unidentified third 

party 

• The requester is located in a country with a targeting history directed at the U.S. cleared 

defense industry 

Acquisition of Technology. This MO involves develop those technologies. The vast majority 

foreign entities attempting to gain access to sen­ of acquisition is directed at acqu iring specific 

sitive technologies by purchasing U.S. technolo­ components or technologies thro ugh an outright 

gy and in some rare cases, the companies that purchase. 

Acquisition of Technology 

Indicators Countermeasure 

• Foreign individuals or competitors seek a position in the U.S. company that affords access to 

restricted technology 

• Statements that license is not necessary 

• Foreign company asks U.S. company to send 

information or product to another U.S.-based 

company for foreign transfer or via email to nonU.S. addresses 

• The requester appears to be "skirting controls". 

• Several similar requests are made over time 

uyer and the 

end use of the 

m the Industrial 

or the program 

performs 

behest of a 

r 

• Complete due diligence for the b 

end user. Ask questions on the 

technology 

• Request a threat assessment fro 

Security Representative, DSSCI 

office whose work the contractor 

• Scrutinize employees hired at the 

foreign entity or business partne 

38
 
Solicitation of Marketing Services. In this 

MO, foreign individuals with technical backgrounds offer their services to research facilities, academic institutions, and even cleared 

contractors. A number of incidents involved 

foreign nationals seeking postdoctoral fellowships at cleared universities or attempting to 

gain employment at companies that are 

involved in cutting-edge technologies. 

Solicitation and Marketing of Services 

Indicators Countenneasure 

· Have a technology control plan 

· Request a threat assessment from the Industrial 

Security Representative, DSSCI or the program 

office whose work the contractor performs 

· Scrutinize employees hired at the behest of a 

foreign entity or business partner 

· Offer to provide offshore software support on 

defense-related projects 

· Invitation to cultural exchanges, individual-toindividual exchange, or ambassador program 

· Offer to act as a sales or purchasing agent in 

foreign country 

· Foreign government and business sponsored 

internship 

Exploitation of Foreign Visit. The term "foreign visitor" includes one-time visitors, longterm visitors (such as exchange employees, official government representatives and students) 

and frequent visitors (such as foreign sale representatives). Suspicious conduct includes actions 

prior to, during and after a visit. The primary 

factor that makes foreign visits suspicious is the 

extent to which the foreign visitor requests 

access to facilities or discusses information outside the scope of the approved activities. 

Exploitation of Foreign Visit 

Indicators Countenneasure 

· Brief country threat to all employees involved · Foreign Liaison Officer or embassy official 

attempts to conceal official identities during a with the foreign visit. Request country threat 

supposedly commercial visit assessments from company security, FSO, 

· Hidden agendas opposed to the stated purpose Industrial Security Representative, or DSSCI 

of the visit · Ensure appropriate personnel, both escorts and 

· Last minute and unannounced persons added to those meeting with visitors, are briefed on the 

the visiting party scope of the visit 

· ·Wandering" visitors, especially those who act · The number of escorts per visitor group should 

offended when confronted be adequate to properly control movement and 

· Using alternative methods. For example, if a conduct of visitors 

classified visit request is disapproved, the for · Conduct frequent checks of foreign visits to 

eign entity may attempt a commercial visit determine if the foreign interests are attempting 

and/or may use a U.S.-based third-party to to circumvent security agreements 

arrange the visit 

· Visitors ask questions that are outside the scope 

of the approved visit hoping to get a courteous 

or spontaneous reply 

· Visitor claims business interest but lacks experience researching and developing the technology 

(*Remember, the discussion of export-controlled 

technology also requires an export license*) 

39
 
Targeting at Conventions. Conventions, seminars, and exhibits are collection-rich targeting 

opportunities for foreign collectors. These 

functions directly link U.S. programs and technology with knowledgeable personnel. This 

type of event provides opportunities for foreign 

nations to employ a greater variety of MOs to 

target visitors. Also, exhibits offer a unique 

opportunity for foreign entities to study, compare, and photograph actual products in one 

location. Of even more importance, foreign 

events held on the collector's home territory are 

vulnerable to exploitation by traditional PIS 

technical means (for example, electronic surveillance) and the employment of entrapment 

ploys (such as inducement of the target into a 

compromising situation). The audiences at 

international seminars are comprised principally 

of leading national scientists and technical 

experts who can pose more of a threat than 

intelligence officers. Technical experts focus 

their questions and requests on specific technical areas that have direct application to their 

work. Reports show that during seminars, foreign entities may use subtle approaches such as 

sitting next to a potential target and initiating a 

casual conversation. This can establish a point 

of contact that may lead to exploitation at a 

later date. Use of membership lists of international business and/or technical societies as a 

source to identify potential targets and as a 

means of introduction is also increasing. 

Targeting at Exhibit, Conventions. and Seminars 

Indicators Countenneasure 

• Topics at seminars and conventions deal with 

classified or controlled technologies and/or 

application 

• Country or organization sponsoring seminar or 

conference has tried unsuccessfully to visit facility in the past 

• Receive invitation to brief or lecture in a foreign 

country with all expenses paid 

• Requests for presentation summary 6-12 

months in advance 

• Photography and filming appear suspicious 

• Attendees wear false name tags 

• Casual conversation and discussions during and 

after events that appears aimed at future contract/relations 

• Have a Technology Control Plan for any items 

and proprietary information brought overseas 

• Monitor follow-up requests after a show for collection attempts and report them to the FSO and 

DSS. 

• Consider what information is being exposed, 

where, when, and to whom 

• Provide employees with detailed travel briefings 

concerning the threat, precautions to take, and 

how to react to elicitation 

• Take mock-up displays instead of real equipment 

• Request a threat assessment from program 

office 

• Restrict information provided to what is necessary for travel/hotel accommodations 

• Carefully consider whether equipment or software can be adequately protected 

Exploitation of Joint VenturelResearch 

Relationships. This MO offers significant collection opportunities for foreign interests. As 

with frequent visits and other international programs, joint business efforts place foreign personnel close to U.S. personnel and technology 

and can facilitate access to protected programs. 

Of growing concern is the use of foreign 

research facilities and software development 

companies located outside of the U.S. to work 

on commercial projects that are related to protected programs. Anytime a company relinquishes direct control of its processes or products to another company, it is exposing that 

technology to possible exploitation. Also of 

concern is the placement of foreign workers in 

close proximity to protected operations. While 

high technology programs receive the greatest 

40
 
amount of public attention, low technology pro­ uniforms, are equally at risk. 

grams, such as fabrics for military battle dress 

Exploitation: Relationships 

Indicators Countenneasure 

· · Resident foreign representatives fax documents Have a Technology Control Plan or very detailed 

to an embassy or another country in a language Standard Practice Procedure
 

other than English; repeatedly request access to
 · Review all documents being faxed or mailed and 

the local area network (LAN); want unrestricted have someone reliable translate foreign lanaccess to the facility; single out company per guage correspondence
 

sonnel to develop as possible sources of infor
 · Provide foreign representatives with stand-alone 

mation 

· 

computers 

Enticing U.S. contractor to provide large · Share minimum amount of information appropriamounts of technical data as part of the bidding ate to the scope of the joint venture/research 

process, only to have the contract cancelled · Extensively educate employees on the scope of 

· Potential technology-sharing agreements during the project and how to deal with and report elicithe joint venture are one-sided 

· 

tation 

Foreign organization sends more foreign repre · Refuse to accept unnecessary foreign represensentatives than are necessary for the project tatives into the facility 

· New employees hired from the foreign parent 

company or its foreign partners asks to access 

classified or export-controlled data 

Targeting of U.S. Personnel Abroad. This MO 

involves the targeting of U.S. defense contractor 

employees traveling overseas. Targeting occurs 

at airports and includes luggage searches, unauthorized use of laptop computers, extensive 

questioning beyond the normal security measures, etc. Other travelers have received excessively "helpful" service by host government representatives and hotel staffs. Reporting also 

indicates that traditional foreign intelligence 

service (FIS) collection methods are still used 

by foreign nations. Some methods include surreptitious listening devices, hotel room searches, 

intrusive inspection of electronic equipment, and 

positioning of personnel to eavesdrop on conversations. 

Targeting of U.S. Personnel Abroad 

Indicators Countenneasure 

· Complete a pre-travel security briefing and don't 

publicize travel plans 

· Maintain control of sensitive information/documents and media/equipment 

· Keep hotel room doors closed and locked. Note 

how the room looks when you go out 

· Limit sensitive discussions 

· Don't use computer or fax equipment at foreign 

hotels or business centers for sensitive matters 

· Ignore or deflect intrusive or suspect inquires or 

conversations about professional or personal 

matters 

· Keep unwanted (no longer needed) sensitive 

material until it can be disposed of securely 

· Specific and direct questions by unknown and/or 

suspicious persons regarding personal and professional information 

· Activities that indicate possible surveillance 

· Appearance that hotel room and personal items 

have been searched or accessed 

· Confiscation of computers or media at official 

control points 

· Repeatedly identified for official questioning 

· Assignment to the same area (room or floor) of 

hotel on multiple visits 

41
 

I 
Suspicious Internet Activity. Targeting associated with this MO includes exploitation of the 

internet (hacking). The majority of the endeavors have been correlated with probing efforts. 

The computer probes are most likely searching 

for potential weaknesses in systems for 

exploitation. In one example, an internet probing effort of a contractor's unclassified network 

lasted over 24 hours. The original source of the 

attack was likely masked, but the probes were 

traced to IP addresses allocated to a "girl's 

school" in an East Asian country. This probing 

effort was very likely obfuscated by the entity 

conducting the probes in order to deter network 

security administrators from determining the 

true identity of the entity. The potential exists 

for users to go to several websites and receive 

anonymous e-mail addresses. In detecting these 

probes, the cleared companies have already 

demonstrated they have the security countermeasures in place to thwart attempts to penetrate their computer systems. Although the 

probing of a system in not illegal, a crime is 

committed once a port is breached by an unauthorized entity. 

Internet Activity 

Indicators Countermeasure 

· Have a firewall monitoring software that logs all 

intrusion attempts and any malicious activity 

· Have appropriate level of protection in place to 

repel such an attack 

· When a probe is noted, heighten network security alert status 

· Computer probes and emails with attachments 

known to carry viruses and other computer 

exploits 

· Network attacks originated from foreign Internet 

Protocol (IP) address or Internet Service 

Provider (ISP) 

· Attacks last over a period of a day or more 

· Several hundred, if not thousands of attempts 

are made using multiple passwords and/or 

scripts 

42