Alan Gahtan's Canadian Legal Resources

Espionage in the boardroom

Lawyers should watch out for economic spies

By Alan Gahtan April 3, 1995

A lunch time seminar was recently given by the Canadian Security Intelligence Service to the Toronto Computer Lawyers Group. John Pyrik and Judith Zelman helped sensitize this group to the use of foreign intelligence services for economic advantage.

As part of its mandate, CSIS works with the business community to assist Canadian companies in protecting Canada's economic and defense interests. The damage from economic espionage can take the form of lost contracts, jobs and markets, and overall, a diminished competitive advantage. CSIS, through its national Liaison Awareness Program, attempts to sensitize Canadians to the common methods in which information and technology can be compromised and to provide suggestions to reduce such vulnerabilities.

CSIS has identified eight industry sectors with a history of being targets for foreign intelligence services. One of these sectors is the computer and technology one being serviced by this group of Toronto lawyers. Other sectors include biotechnology, aerospace, mining, oil and gas and nuclear. Companies with a higher risk factor include those which have a high profile in their industry, are exporters and have foreign competitors.

While the threat of military espionage was restricted to foreign adversaries, the threat of economic espionage also exists from countries which have good relations with Canada. With the scaling down of the cold war, many countries have retargeted their intelligence operations to acquire economic advantage of their domestic corporations.

While most corporations already take steps to protect their proprietary information from their competitors, most likely do not utilize sufficient safeguards to protect such information from the resources available to a foreign government-sponsored intelligence service.

Clandestine sources of access to proprietary information could include employees, consultants, foreign exchanges, international organizations, communications interception, waste materials and the diversion of shipments to allow for reverse engineering of the contents. As well, information could be obtained from computers and other equipment obtained through a disguised burglary.

Business people on trips abroad are especially vulnerable. Briefcases and other luggage can be searched and copied covertly either at border crossings or hotel rooms. As well, phone and fax communications can be intercepted with much less effort.

The type of information which could be a target is not limited to that relating to proprietary technology. It could also include confidential marketing information (i.e. bids) and personal information on individuals who could be recruited to assist in the acquisition of proprietary or confidential information.

CSIS can assist your client's company by running an awareness seminar for senior executives or by performing a background check on a new customer or employee who has raised a suspicion.

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