SOVIET ACQUISITIONS OF WESTERN TECHNOLOGY AND ITS NATIONAL SECURITY IMPLICATIONS FEBRUARY 23, 1982

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83M00914R002000070021-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 31
• Document Creation Date: December 19, 2016
• Document Release Date: September 6, 2006
• Sequence Number: 21
• Publication Date: February 23, 1982
• Content Type: REPORT

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SOVIET ACQUISITIONS OF WESTERN TECHNOLOGY
AND
ITS NATIONAL SECURITY IMPLICATIONS
FEBRUARY 23, 1982 0
SEC R E T
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INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SOVIET ACQUISITION OF WESTERN TECHNOLOGY: A NATIONAL PROGRAM . . . 3
SOVIET MECHANISMS FOR ACQUIRING WESTERN TECHNOLOGY . . . . . . . 6
SELECTED SOVIET ACQUISITIONS AND BENEFITS . . . . . . . . . . . . . 13
FUTURE SOVIET NEEDS FOR WESTERN TECHNOLOGY
AND THE OUTLOOK FOR THE 1980s . . . . . . . . . . . . . . . . . . 21
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SOVIET ACQUISITION OF WESTERN TECHNOLOGY
AND ITS NATIONAL SECURITY IMPLICATIONS
Introduction
The US and its Allies traditionally have relied on the
technological superiority of their weapons to preserve a credible
counterforce to the quantitative superiority of the Warsaw Pact. But
that technical superiority is being eroded as the Soviet Union and the
Warsaw Pact increasingly introduce sophisticated weaponry of their
own, often with the direct and indirect help of Western technology.*
Stopping the extensive Soviet acquisition of Western technology
militarily important to them, in ways that are both effective and
appropriate in our free society, is one of the most complex issues
.facing our Government today.
Soviet Acquisition of Western Technology: A National Program
Since at least the 1930s the Soviet Union has placed a high
priority and devoted large amounts of its financial and organizational
resources to the acquisition of Western technology for the improvement
*While there are numerous interpretations of "technology" for weapons,
we define it as the application of scientific knowledge, technical
information, know-how, critical materials, keystone manufacturing and
test equipment, and end products which are essential to the research
and development as well as the series manufacture of modern high-
quality, weapons and military equipment. By Western technology we
mean technology developed in the Free World.
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of its military programs and the efficiency of defense production
technology. Today this effort is a massive, well planned, and managed
national level program, approved at the highest governmental levels --
the Central Committee of the Communist Party and the Council of
Ministers.
Our intelligence indicates that the Soviets and their Warsaw Pact
allies have acquired large amounts of such US and Western technology
and equipment through legal and illegal means, including their
intelligence services. The Soviets have tried and succeeded in
acquiring the most advanced Western technology. They have used their
scientific and technological agreements with the West to facilitate
access to the new technologies that are emerging from our applied
scientific research efforts. They have used their scarce hard
currency to legally purchase uncontrolled advanced Western
technologies having defense-industrial applications. And, they have
used their intelligence services to acquire illegally, those US
technologies that are classified and export controlled.
Central direction and management for the Western technology
acquisition program comes from the Council's Military Industrial
Commission, called the VPK, the organization responsible at. the
national ministerial level for coordinating and controlling all Soviet
--military research and development (R&D) and production of weapons. In
this capacity the VPK assigns Western technology acquisition
priorities that are 'driven first by the needs of the military and
military-related industrial Ministries under its direct control, and,
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secondly, by the needs of the civilian sectors of Soviet industry that
support defense production.
The Soviets have been very successful in acquiring Western
technology by blending legal and illegal acquisitions by several
governmental organizations to satisfy these priority military needs.
The Soviet intelligence services, the Soviet Committee for State
Security (KGB) and the Chief Intelligence Directorate of the Soviet
General Staff (GRU), are assigned the primary responsibility for
collecting Western classified, export controlled, and proprietary
technology, using both clandestine and overt collection methods. They
in turn make extensive use of the East European Intelligence Services
who are liberally paid for their efforts in acquiring Western
technology.
The Ministry of Trade of the Council of Ministers is assigned
responsibilities for both legal and illegal acquisitions and
purchases, and works closely with the KGB and GRU in arranging trade
diversions. Furthermore, Soviet and East European trade ministries
also provide the use of official trade organizations and missions for
clandestine and illegal acquisition operations.
Official Soviet and East European science and technology (SST)
organizations also play a major, role in both open source and
clandestine acquisition of Western technology. The Soviet State
Committee for Science and Technology (GKNT) is a key player in
arranging government-to-government S&T agreements to facilitate access
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to and the acquisition of new technologies just emerging from Western
Universities, laboratories, and high technology firms. The GKNT
oversees the allocation of scarce Soviet hard currency for the legal
purchase of selected uncontrolled Western technology for Soviet
military purposes. If they are unable to acquire the necessary
technology by open or legal means, the GKNT tasks Soviet intelligence
to clandestinely acquire the technology.
It is this massive well organized and centrally coordinated use
of all these organizations that has made the Soviet program to acquire
Western technology so successful. The Soviets have acquired
militarily significant and critical industrial Western technologies
that have benefited every major Soviet Ministry engaged in the
development and production of weapon systems.
Soviet Mechanisms for Acquiring Western Technology
Soviet acquisition efforts include: legal importation through
open literature, legal trade channels and through student, scientific
and technological exchanges, and conferences; illegal trade channels
that evade US and Western (i.e. COCOM*) export controls and
*The Coordinating Committee (COCOM)--was established in January 1950 to
serve as the forum for Western efforts to develop a system of
strategic export controls. It is composed of the following countries:
the United States, United Kingdom, Turkey, Portugal, Norway, the
Netherlands, _ Luxembourg,. Japan, Italy, Greece, France, Federal
Republic of Germany, Denmark, Canada, and Belgium.
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clandestine acquisition through recruited agents and industrial
espionage. We believe that the overwhelming share of the
militarily significant technology and equipment is acquired through
clandestine acquisitions and illegal trade, and the remainder is
acquired through legal trade and open sources. The latter is
considered important also since it is often the combination of legal
and illegal acquisitions that give the Soviets the complete military
or industrial capability they need.
Because of the priority accorded to the military over the
civilian sectors of the Soviet economy, free-world dual use
technology, that is with both military and civilian applications,
often finds its way first into military industries and second, into
the civilian sectors of machine building which supports military
production. Thus, Soviet assurances that legally purchased dual-use
technology will be used solely for civilian applications can seldom be
accepted at face value.
Legal acquisitions generally have their greatest impact on the
Soviets' broad industrial base, and thus affect military technology on
a relatively long-term basis. For example, the Kama truck plant was
built over some 7 years with massive imports of more than $1.5 billion
worth of US and West European automotive production equipment and
technology, and recently (1981) began producing military-specification
trucks. Large-numbers of Kama trucks are in use by Soviet forces in
Afghanistan and by Soviet military units in Eastern Europe opposite
NATO.. Similarly large Soviet purchases since the 1970s of numerically
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controlled machine tools from Japan and Western Europe already have
benefited some military manufacturing sectors, particularly the Soviet
aircraft, tank, naval and nuclear weapons industries.
The Soviets give priority to expenditures requiring hard currency
for those purchases that meet the direct or partial needs of the
Soviet military-industrial ministries. For example, over the past 10
years the Soviet Union has purchased large quantities of Western
microelectronics technology through legal means and complemented those
acquisitions by illegal means when necessary in order to equip their
military-related microelectronics manufacturing facilities. This has
permitted the Soviets to build systematically a modern
microelectronics industry. This newly acquired capability in
microelectronics is the critical basis for large and wide-ranging
enhancements in the sophistication of Soviet military systems.
Acquisitions through illegal trade channels frequently have both
industrial and military applications, and thus are important in the
near term. Illegal diversions of technology fall into two general
categories. One is the illegal diversion of controlled technology
from legitimate trade channels to proscribed destinations. This is
done through US and foreign firms willing to engage in profitable
impropriety, agents-in-.place in US or foreign firms or foreign
subsidiaries of US firms, communist-owned but locally-chartered firms
in the West, and foreign purchasing agents (including arms dealers).
For example, in order to evade the US embargo on high technology
exports to the Soviet Union, the Soviets and their surrogates set up
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in the West dummy corporations engaged in purchasing sophisticated
microelectronics manufacturing equipment. This equipment has been
shipped and reshipped, sometimes with the knowledge of certain
individuals in the companies supplying it, to disguise its ultimate
destination--the Soviet Union or Eastern Europe. The other is
in-place diversion, in which legally-acquired technologies are put to
military end-uses and/or used by unauthorized end-users. Both types
of illegal diversions are extremely difficult to detect and monitor.
We know that both the Soviet and Warsaw Pact intelligence services are
in the mainstream of the illegal technology trade flow.
The acquisitions that most directly affect Soviet military
development have come from intelligence collection and related illegal
trade diversions. Soviet Bloc intelligence services have concentrated
their effort in the US, Western Europe, and Japan. In addition to the
usual military weapons intelligence technology, targets include
defense contractors and high technology firms which have advanced
technology (both classified and unclassified), foreign firms and
subsidiaries of US, firms abroad, and international organizations
having access to advanced and/or proprietary technology. Soviet
intelligence also continues to place high priority. on the collection
of SST information on fundamental research, particularly areas (e.g.
lasers and genetic engineering) that could lead to new types of
weapons. that might upset the current 'balance, of forces. In the last
few years both the Soviet and Warsaw Pact intelligence services have
been stepping up their efforts to acquire -new and emerging
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technologies from Western universities and commercial laboratories for
both military and commercial applications. One East European
intelligence service regularly invites US professors to teach in its
universities as the operational means of selecting those it wishes to
try and recruit; a recent defector from that service has reported it
has had a number of successes but that it does not often have to
recruit American scientists since they are so talkative.
Furthermore, both legal and illegal acquisitions of technology
and equipment are coordinated with the complex network of
international governmental scientific and technical agreements and
exchanges that the USSR maintains with the advanced industrial nations
of the world. These include collection activities of their scientists
and engineers that participate in academic, commercial, and official
S&T exchanges. Visits by Soviet and East European students and
technical delegations to the United States generally are made by high
quality scientists, many of whom we suspect are associated with
classified work in their home countries.
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S E C R E T
In recent years, the Soviet candidates for exchange programs have
proposed academic and research activities involving technologies in
the areas of microelectronics, computers, composite materials, and
sensors, that have direct military applications. In each of the past
two years, over a third of the 50 program proposals offered under the
Graduate Student/Young Faculty Program of the International Research
and Exchanges Board (IREX) have been judged to be completely
unacceptable in terms of prospective technology loss, and many other
programs needed to be modified or access constrained before the
exchanges could be implemented.
Thus, the principal value to the Soviets of these scientific and
technical co-operative agreements is as a means to acquire direct
access to Western technology which would be of benefit to Soviet
military and intelligence objectives and only secondarily as a means
to acquire closer political and social ties with the West.
Table 1A provides a list of the key high-technology subjects that
Communist country visitors come to the US to study, research, or
discuss; many of which are now on the US military critical technology
list.today. Over the past few years there also has been increased use
of Communist-owned, locally chartered firms in the US and abroad to
exploit controlled and military-related technology. There are about
thirty Communist owned firms in the US owned by the Soviet Union,
Hungary, Poland, and Romania. Near the end of the late 1970s there
were over three hundred fifty similar firms in the Free World, with
S E C R E T
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relatively heavy concentration in the United States, the United
Kingdom, Sweden, the Netherlands, Italy, West Germany, France, Canada,
Belgium, and Austria. Many are potential avenues for Soviet
exploitation of the advanced technologies of these countries.
Firms chartered in the US can legally purchase controlled US
technology and study it without actually violating US export controls
unless they attempt to export the equipment or related technical data
out of the United States without a license. They also can use these
firms as an espionage base for illegal technology acquisitions. For
example, a Hughes Aircraft engineer arrested in late 1981 was charged
with selling US secret documents to a suspected East European
intelligence officer employed by a Polish owned US chartered firm in
Illinois.
The Soviets correctly view the United States and other Western
countries as a watershed of important and openly available scientific
and technical information. As such, the Soviets take every
opportunity to obtain access to this information. Recently the
Soviets legally purchased tens of thousands of unclassified US
documents containing information on standardization procedures for
weapons, nuclear ordinance, guided missiles, space vehicles, and many
other military-related technical areas. This freely available
information will undoubkedly igo= to Soviet weapons designers. Soviet
collection of open source publications remains a highly visible
activity and obviously a valuable source of Western scientific and
technical information.
S E C R E T
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The Soviets also regularly attend high technology trade shows and
visit commercial firms in the US, particularly small and medium sized
US firms that are active in the development of emerging technologies.
These apparent trade promotion efforts often mask Soviet attempts to
acquire emerging Western technological know-how before military uses
have been identified and government security controls have been
applied to protect such know-how. Such emerging technologies are
particularly vulnerable to foreign collection efforts.
Soviet Acquisitions and Benefits
There is growing recognition of the crucial role played by -
Western technology in the development and production of Soviet weapon
systems and related military equipment. Soviet dependence on Western
technology was visible and clearcut in the years immediately after
World War II. To achieve major improvements in their military
capability quickly, the Soviets resorted to a combination of
purchasing and/or stealing and copying Western systems. They
exploited the technological expertise of captured scientists and
industrial plants.
Since that early period of the 1950s and 1960s, however, Soviet
reliance on Western technology has decreased. Today Soviet military
designers are inclined to be more selective in the acquisition of.
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Western military-related technology, choosing carefully the Western
designs, engineering approaches, and equipment most appropriate to
their specific defense needs. These needs, however, are still massive
including almost every area of weapons technology and related
manufacturing equipment. Table 2, .listing Western technology
acquisitions, gives an idea of the wide range of Soviet military
technology needs.
Western acquisitions in the missile, aircraft, and naval areas
and several high technologies are presented below to demonstrate the
way the various transfer means occurred(
In the missile area, the Soviets have been particularly
interested in guidance and control technologies. For five years in
the 1970s Soviet intelligence was reaping the benefits of the
clandestine acquisition of US high technology aerospace electronics
and missile navigation equipment through an agent who worked for a US
subsidiary overseas. He provided the Soviets with nearly $25 million
worth of embargoed equipment and tens of thousands of pages of
technical data detailing the design and functions of military useful
products before he was uncovered in the late 1970s.
Through legal trade purchases in the 1970s, the Soviet Union
acquired precision `grinding 'Machines for the production of small high
precision bearings from a US firm. The- high- quality of bearings
produced by-these machines reduced down time and increased output in
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TALE 2
SELECTED SOVIET & EAST EUROPEAN LEGAL AND ILLEGAL ACQUISITIONS FROM THE WEST AFFECTING
KEY AREAS OF SOVIET MILITARY TECHNOLOGY
Key Technology:Area Notable Success
Computers Purchases and acquisitions of complete systems, hardware and software, including a
Microelectronics
Complete industrial processes and semiconductor manufacturing equipment capable
of meeting practically all military requirements.
Signal processing Acquisitions of processing equipment and know-how.
Manufacturing
Guidance and navigation
Acquisitions of low-power, low-noise, high-sensitivity receivers.
Acquisitions of optical and other laser components, including special optical
mirrors and mirror technology suitable for future laser weapons.
Acquisitions of navigation receivers, advanced inertial guidance components,
including miniature and laser gyros; acquisitions of missile guidance subsystems;
acquisitions of precision machinery for ball bearing production for missile and
other applications.
Power sources Superconductive energy storage systems and associated cryogenic equipment.
Structural materials Purchases and acquisitions of Western titanium alloys and welding equipment.
Propulsion Missile technology; some ground propulsion technology (diesels, turbines, and
rotaries); purchases of and acquisitions of advanced jet engine fabrication
technology and jet engine design information.
Acoustic sensors Acquisitions of underwater navigation and direction finding equipment.
Electro-optic sensors .,j Acquisition of information on satellite technology and laser rangefinders.
Radar Acquisitions and exploitations of air defense radars and antenna designs for
missile systems.
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Q wide variety of Western minicomputers for use in military systems.
Acquisitions of automated and precision manufacturing equipment for electronics,
materials, and possibly optical and future laser weapons components; acquisition
of information on manufacturing technology related to weapons, ammunition,
aircraft parts including turbine blades, computers, and electronic components.
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missile and industrial uses. Although only a few of these machines
were sufficient to supply Soviet missile designers with all the
quality bearings they needed, this sale provided the Soviets with a
capability to manufacture precision bearings sooner than through
subsequent indigenous development.
in the aircraft area the Soviet and East European intelligence
services have been extremely successful in acquiring critical Western
technology and know-how. Through industrial espionage Soviet
intelligence is believed to have successfully acquired the plans and
intricate drawings for the US C5A giant transport aircraft early in
its development cycle; these plans although dated now are believed to
have contributed significantly to current Soviet development of a new
C-5 type strategic military cargo plane--the An400.
Apparently Soviet military aircraft designers could "order"
documents on Western aircraft and get them within a few months through
resourceful Soviet intelligence efforts. Designers are in particular
need of data on US technological advances, but more importantly, they
needed information on aerospace manufacturing techniques.
Soviet designers apparently have always been interested in the
technological capability of the Boeing 747, and probably managed to
speed up their efforts in developing the 11 .,76 (CANDID) transport
aircraft by tasking Soviet intelligence to secure documentation on the
747. The IL-76 looks much like the 747, but is smaller in size mainly
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S E C R E T
because Soviet designers have not yet been able to successfully
develop or steal advanced and sophisticated Western large engine
technology.
The IL-76 also is used by the Soviets as the platform for their
new AWACS (Airborne Warning And Control System) which is expected to
be operational in the mid 1980s. It will provide the Soviets with a
major improvement in attacking low flying missiles and bombers. The
Soviet AWACS radar also is similar in many ways to that of the US
AWACS system, and is a major improvement over the radar used on their
old AWACS system.
An example of an in-place diversion which was of direct aid to
the Soviet military aircraft industry was the sale of specially
designed US blind rivet technology in the mid 1970s. Contrary to
assurances that the technology was for commercial use, the Soviets
installed the US manufacturing equipment in the Gorkiy Aircraft Plant
which is known to produce military fighter aircraft, including the
MIG-21 and MIG-25, Foxbat.
Two huge floating drydocks purchased legally by the Soviets from
Japan and Sweden have been diverted to military use. Drydocks are
used exclusively for ship repair and are critical for routine or fast
repair of.: sh-ips damaged in warfare. In 1978, when the Soviets took
possession of the Japanese drydock,._ .__the_y_..diverted it to the Pacific
-Naval. --Fleet:... The..:_ drydock.-purchased from -Sweden was sent to- the
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Northern Fleet in 1981.
These drydocks are so large that they can carry several large
commercial ships, and are also large enough for servicing the huge
Kiev-class aircraft carriers. Soviet advanced submarines carrying
ballistic missiles, Soviet aircraft carriers; and Soviet destroyers
were among the first ships repaired in these drydocks. Moreover, the
purchase of these drydocks from Western shipbuilders relieved
construction time in Soviet shipyards, already overburdened with
developing military vessels.
Within the past few years, the USSR also has contracted for, or
purchased foreign built oceanographic survey ships equipped with some
of the most modern Western-manufactured equipment. The USSR will be
receiving five Finnish-built oceanographic ships reinforced for ice
operations and for long-range expeditions and several other Western
oceanographic ships. In place of desired US equipment that was
embargoed, West European equipment has been installed on the ships.
This modernization of the world's largest oceanographic fleet
utilizing Western technology will help support the development of
Soviet ballistic missile weapon system programs and antisubmarine
systems against the West.
The Soviets also have been successful in clandestine acquisitions
of. Western nav1 equipment. Th,rough agent penetration of a US defense
contractors subsidiary abroad the KGB successfully acquired technical
documents on US_ - sonar systems and underwater. detector and navigation
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systems in the 1970s.
Over the past 10 years the Soviet Union has successfully acquired
thousands of Western microelectronics components worth millions of
dollars through legal means and complemented those acquisitions by
illegal means when necessary in order to equip their military-related
manufacturing facilities. These centrally directed acquisitions have
permitted the Soviets to build systematically a modern
microelectronics industry which will be the critical basis for large
and wide-ranging enhancements in the sophistication of future Soviet
military systems. They have acquired enough Western microelectronics
manufacturing equipment that, if combined, would have the capacity to
provide 100 percent of the Soviets high quality microelectronic needs
for military purposes.
Soviet computer technology has been limited by fabrication and
production technology problems and by difficulties in software
development. When the Soviets were having problems in producing
computer memories for the Moscow ABM system, for example, they
targeted a US firm in California. Armed with a high priority request,
their trade organizations illegally acquired COCOM embargoed
equipment, diverting it from California through the Far East and
Western Europe into the Soviet Union. At a sacrifice of time and
.resources the Soviets probably could have overcome their problems on
their own, but the acquisition of US equipment permitted them a quick
solution that allowed them to upgrade their ABM computer system.
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Since 1969 the USSR and East European countries have been
developing a family of general purpose computers known as the Ryad
series. These computers which essentially make up the total Soviet
and East European effort in general purpose computers, have been and
will continue to be used in a wide variety of civil and military
applications. The architectural designs of the Ryad computers are
patterned after those of the highly successful IBM 360 and 370 series
of computers. The Ryad computers also use some clandestinely acquired
Western engineering concepts in the implementation of IBM designs.
II
Western technology has. been important to the Ryad development
because it has provided proven design directions both at the system
and component levels. Thus, Soviet and East European computer
production efforts have been devoted to the most successful Western
computer designs that have ever been mass-produced, computers that are
used in a wide range of applications and are highly serviceable in the
field. With this approach, the Soviets and East Europeans eliminated
many of the risks in undertaking the development and production of a
new series of general purpose computers, and saved considerable
amounts of manpower and time. Since the mid to late 1970s the Soviets
and East Europeans have openly purchased several thousand
minicomputers, some of which are finding uses in military-related
organizations. Furthermore they, are illegally developing
minicomputers that are direct copies of Western models. Soviet and
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S E C R E T
East European development of computer systems has been aided by all
available acquisition means--legal and illegal, including
clandestine--for acquiring the needed technical know-how.
BENEFITS
The Soviets and their Warsaw Pact Allies have derived significant
military gains as the result of their acquisitions of Western
technology. This multi-faceted Soviet acquisitions program has
allowed the Soviets to:
--save $100s of millions of dollars in R&D costs, and years
in R&D development lead time;
--modernize critical sectors of their defense industry and
reduce engineering risks by following or copying proven
Western designs, thereby limiting the rise in their military
production costs; and
--achieve greater weapons performance than if they had to
rely solely on their own technology.
These gains are evident in all areas of military weapons systems;
strategic, tactical and space.
The direct impact of East-West trade on Soviet military power
cannot be easily quantified. However, it is
clear that Western
military expenditures needed to overcome or defend against the
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military capabilities derived by the acquisition of Western technology
far outweighs the West's earnings from legal sales to the Soviets of
the equipment and technology on which these improvements are based. A
Soviet economist familiar with the review process for allocating hard
currencies for defense related projects stated that "The acquisition
of Western technology and finished products is a very calculated
procedure, done with a great deal of selectivity. Even so, Soviet
economists are amazed that the West , oes not recognize this and
continues to invest in the USSR industries since the material and
technical base of socialism is thereby increased. They consider this
acquisition program one of the USSR's greatest achievements since it
allows the. solving of complicated problems with minimal costs."
FUTURE SOVIET NEEDS FOR WESTERN TECHNOLOGY AND OUTLOOK
FOR THE 1980S
Soviet military R&D efforts are at their highest levels since the
mid 1960s when they launched a massive effort to catch up with Western
strategic and tactical capabilities. They have underway several
hundred weapons development projects, with at least 40 of these being
related to strategic systems, 70 to tactical systems, and 50 to space
and special weapon systems. We expect the number of new or modified
Soviet weapon. systems,. coming from.. these projects and going into
production and deployment in .the 1980s to -remain at historical levels
-- some 200 weapon systems per decade over the last 20 years.
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Although Soviet military manufacturing capacity has increased 80
percent overall since the early 1960s, we have observed them beginning
plant expansion at one-fourth of their key weapons manufacturing
facilities over the last several years. We expect these new
facilities to be ready to produce weapons in the next four to ten
years. Plant expansion is evident in the following areas: ground
warfare vehicles, including new tanks; aviation, including facilities
for a new B-1 type bomber and a new long range military transport
having strategic airlift capabilities; naval shipbuilding, including
submarines for ballistic missiles and cruise missiles and full size
aircraft carriers capable of global operations; and electronic and the
microelectronic manufacturing facilities throughout the USSR.
The development and production of the new Soviet weapons are sure
to be more complex and costly than those produced in the 1970s when
the USSR spent a total of $1,725 trillion on its military activities;
the US spent $1.27 trillion by comparison. The estimated dollar costs
of Soviet military activities in the 1980's is expected to reach some
$2.3 trillion.
All of this military activity is taking place at the same time
the Soviet economy has reached its lowest level since WWII. Soviet
GNP .S,rowth.,m.a.W well beFlatnited to 1 ;to.-2 percent.on.-1he'_ verage by the
mid-1980s:-? Stagnation,.in jnd-ustrial sectors key to-both the economy
and the-. military- means it. will- be increasingly difficu.tt for the
Soviets to satisfy the needs of both. Thus, Soviet leaders will have
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to make tough choices among defense, investment, and consumption, and
the competition among rival claimants for resources is likely to
become intense. Under these conditions, it may be impossible for the
Soviets to maintain simultaneously historical military production
levels and increasing resources to the civilian economy.
Despite these economic difficulties, there are no signs that the
Soviets are shifting 'resources away from the military sector or are
slowing down development of weapon systems that will be entering the
production stage by the mid-1980s. New generations of Warsaw Pact
weapons will require critical component and modern manufacturing
technologies. It is in these areas that Soviet illegal acquisitions
of Western technology, complemented by legal acquisitions, are most
likely to be concentrated over the next five years.
We conclude the Soviets will need a considerable amount of
Western advanced component technology to satisfy their military
objectives in the decade of the 1980s. Among the more important of
these are microelectronics, computers and signal processing.
Microelectronics will play a very significant role in advances in
computers and signal processing, and all of these technologies will
be significant in developing advanced Soviet missile guidance and
communications systems as well as missile, aircraft, and submarine
detection systems;
As the result of both tactical and strategic force modernizations,
Soviet and Warsaw Pact military manufacturers increasingly are feeling
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the pressure of large scale production requirements and the related
need to control manufacturing and materials costs. Thus, particularly
critical for the decade of the 1980s are Soviet needs to improve their
manufacturing capability. To a large extent, the level of
manufacturing technology in Soviet plants determines Soviet capability
to move new technology from R&D into military applications.
Manufacturing technologies not only play a significant role in the
development of advanced component technologies such as
microelectronics and computers but in the actual production of modern
naval and aerospace systems.
Future Soviet and Warsaw Pact acquisition efforts including
acquisitions by their intelligence services, are likely to concentrate
on the sources of such component and manufacturing technologies,
including:
--Defense contractors in the US, Western Europe, and Japan
who' are the knowledge repositories for military development
and manufacturing technologies;
--General producers of military-related auxiliary
manufacturing equipment in the US, Western Europe, and
Japan, and
--Small and medium size firms and Universities that nurture
and develop- advarrced-> !-component `'technology and designs,
including emerging and advanced civil technologies with
future military applications, and sensitive but unclassified
US technical data.
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OUTLOOK FOR THE 1980S
The combination of past acquisition practices and future Soviet
defense needs indicate that the US and its Western Allies are likely
to experience, serious counterintelligence, industrial security, and
export control problems over the next 5 to 10 years. Soviet and
Warsaw Pact efforts to acquire new and emerging technologies from
Western university and commercial laboratories as well as exploit open
source publication sources are already posing difficult problems for
our national security and scientific communities. The Western nations
are not presently organized to cope with the multifaceted and multi-
national threat to its scientific, technological, and industrial
sectors posed by the Soviets and its Warsaw Pact Allies.
The job of stopping Soviet Bloc intelligence operations aimed at
both our military and industrial technologies already poses a
formidable counterintelligence problem, both in the US and abroad.
Furthermore, the task of stopping losses resulting from hostile
intelligence acquisitions is likely to become even more difficult in
the future as several trends identified in the 1970s continue into the
-1.980s:
--First, since the early 1970s, we have observed the Soviets
and the East European Allies increasingly using their
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national intelligence services to acquire Western civilian
technologies, e.g., automotive, energy, chemicals, and even
consumer electronics.
--Secondly, since the mid-1970s, we have observed Soviet and
Warsaw Pact intelligence emphasizing the collection of
production-related technology, sometimes in preference to
weapons technology.
--And thirdly, since the late 1970s, we have observed
increased emphasis by these hostile intelligence services on
the acquisition of new and emerging Western technologies,
from our universities and research centers.
The combined effect of these trends is a heavy focus by Soviet
Bloc intelligence on. the commercial and non-military sectors in the
West, sectors that are not normally protected from hostile
intelligence services. Furthermore, the industrial security provided
by commercial firms are no match for the human penetration operations
of such foreign intelligence services. But the most alarming aspect
of.this commercial focus by hostile intelligence services is that as
the result of these operations they currently are gaining access to
those advanced technologies that are likely to be used by the West in
its future weapons systems.
Soviet intelligence efforts against Western defense contractor
firms poses a serious problem in and of itself. With over 11,000 such
firms in the US and hundreds of subsidiaries abroad; US
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counterintelligence efforts are stretched thin. Protection of such US
firms abroad from hostile intelligence threats are the
responsibilities of host governments and they too are feeling the
burden of the well orchestrated Soviet Bloc efforts. NATO :. has not
developed a combined industrial security and counterintelligence
effort and . as a consequence, ' US defense contractors in Europe are
largely left to fend for themselves when it comes to hostile
intelligence directed "industrial espionage" operations. A similar
situation exists in Japan where the Soviet industrial. threat and
illegal trade problems appear to be even more concentrated.
From all evidence it appears that industrial security--both
defense and commercial- -will be severly tested by Soviet and East
European intelligence over the 1980s. National security means for
protecting the strictly civilian sector from hostile intelligence
services do not presently exist and the governmental basis for doing
so would have to be developed if we are to protect our private sector
from these intelligence services. To enhance the protection of US
defense contractors abroad, new defense industrial security means
would have to be developed with the close cooperation of foreign
_governments.
Stopping illegal trade practices at home and abroad will require
a much greater coordinated effort by US and Allied export control
agencies. Stopping third 'country diversions and- unauthorized sales of
controlled' US "equipment -,-will' also require greater international
cooperation in --the enforcement field, but because of the heavy
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involvement of Soviet Bloc intelligence in these trade activities, it
will also require assistance by Allied intelligence,
counterintelligence and internal security services.
And finally, the problem of coping with the Warsaw Pact's massive
open source and overt collection efforts poses an almost intractable
task for the open societies of the West. Although the Soviets have
used our openess to their military advantage we prize too highly that
openess and the academic and industrial benefits that it produces.to
unthinkingly close it off. The national security and scientific
communities should jointly search for the means to protect new and
emerging technologies that have critical industrial and future weapons
applications. The US government must find proper and equitable means
to control the availability of government S&T information that could
aid our military adversaries. The US intelligence community should
ensure that US firms and businesses that deal with the Communist
countries are not taken unfair advantage of by their national
intelligence services. The serious threat that Soviet intelligence
possess in all of these open activities should be recognized and each
citizen alerted to his own risk and vulnerability; any attempt to
coerce or compromise US citizens involved in these activities should.
be reported to the FBI in the US or US embassies abroad.
In conclusion, the massive, Soviet program to acquire. Western
technology through combined legal and. illegal means poses a serious
threat to the security interest of the US and its allies. To respond
effectively, the West needs to modernize export controls so that they
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take into account both future Soviet military needs and the well
organized collection efforts of the Soviets and their Warsaw Pact
allies. A comprehensive and coordinated program must be mounted to
improve trade controls and their enforcement in the CoCom arena and
these efforts must be complemented by enhanced industrial. security
programs and by counterintelligence activities dedicated to the
technology transfer loss problem.
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