SUMMARY REPORT ON TECHNOLOGY TRANSFER TO COMMUNIST COUNTRIES AND THE INTELLIGENCE COMMUNITY S ROLE AND EFFECTIVENESS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00176R000900020001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 33
• Document Creation Date: December 20, 2016
• Document Release Date: March 23, 2007
• Sequence Number: 1
• Publication Date: October 1, 1981
• Content Type: REPORT

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Director of Secret
Central
Intelligence
Summary Report on Technology
Transfer to Communist Countries
and the Intelligence Community's
Role and Effectiveness
Secret
TTIC 81-001
October 1981
Copy 1 1
7
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Director of Secret
Central
Intelligence
Summary Report on Technology
Transfer to Communist Countries
and the Intelligence Community's
Role and Effectiveness
Submitted by the Director of Central Intelligence
to the Senate Select Committee on Intelligence
Secret
TTIC 81-001
October 1981
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Secret
The Honorable Barry Goldwater
Chairman
Senate Select Committee on Intelligence
United States Senate
Washington, D.C. 20515
During several appearances before your committee by Admiral Inman and
myself earlier this year, we discussed the problem of US and Western
technology losses to Communist countries, and the need to do something
about these losses. Your concern centered on three key questions:
? What is the role of the Intelligence Community in controlling technology
transfer and how effective has the Community been in helping to prevent
the loss of sensitive technology related to US national security?
? What are the nature and extent of US and Western losses and the
benefits to the Communist countries acquiring our technology?
? What improvements would enhance the Community's capabilities to
assist the appropriate agencies in protecting US and Western technol-
ogy? I 25X
I share your concern and am pleased to present to you this summary report
in response to your three questions. Detailed backup material upon which
this report is based is available for your review. This report focuses
principally on losses of US (and Free World) technology to the USSR and
Eastern Europe. A special section (appendix) was prepared on China but
should .~iewed in the context of the changing US policy regarding
China. I I
It is my conclusion, based on this report, that the concerns of the Senate
Select Committee on Intelligence are well founded. The Soviets and East
Europeans have for some time been trying to obtain the most sophisticated
US and Western technology, to satisfy both military and economic needs,
through all means at their disposal and with many notable successes. A va-
riety of transfer mechanisms have been used, including lawful purchases
and trade arrangements; short- and long-term visits to the United States by
scientists, students, and trade representatives; unlawful diversions of
materials from approved destinations abroad; and clandestine intelligence
operations. The result has been the strengthening of the Soviet and East
European industrial and military sectors, accompanied by a difficult-to-
measure, but identifiable, reduction in the security posture of the United
States and its Western allies.II 25X
iii Secret
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Although the Intelligence Community (IC) has only had a marginal role in
US programs that regulate technology transfer, it has provided intelligence
support to those departments and agencies that have sought it; however,
those departments and agencies for various reasons have not been able to
make the best use of the available IC support. The only specific statutory
responsibility of the intelligence agencies is limited to assisting Commerce
in determining the foreign availability of controlled US technology. The
enforcement responsibilities for export control statutes are assigned to the
Departments of Commerce, State, and Treasury. Only the FBI, among the
Intelligence Community organizations, becomes involved in the prevention
of US technology losses in an enforcement sense and that mainly as the re-
sult of the Bureau's foreign counterintelligence and other criminal investi-
gations. The Intelligence Community performs many support and ad hoc
functions in this area, but its primary role consists of the collection,
analysis, production, and dissemination of foreign intelligence concerning
Soviet and East European needs for, methods of, successes in, and benefits
from acquisitions of US and Western technology. Given this very limited
role, the Intelligence Community can do little by itself to improve the
protection given to US and Western technology. Direct improvement is
limited to increasing the efficiency and timeliness of the intelligence and
counterintelligence efforts in this area. F]
Since assuming the Directorship of Central Intelligence, I have initiated
several actions that address the most serious IC-related problems identified
in this report, including:
? Charging the Deputy Director of Central Intelligence for Foreign
Assessment (DD/NFA) with enhancing the Intelligence Community's
overall capability to support both national policymakers and the US
Export Control Community's decisionmakers.
? Establishing a Technology Transfer Assessment Center within CIA.
? Developing an offensive counterintelligence program to counter hostile
intelligence service efforts to acquire US technology abroad.
? Assigning the technology transfer issue to my Critical Collection Prob-
lems Committee for increased focus by collectors.
? Establishing a DCI Committee that incorporates my Committee on
Exchanges (COMEX) to deal with all forms of US and Western
technology transfer; this Technology Transfer Intelligence Committee is
to ensure that optimum use is made of IC resources on this problem and
that the IC's support of the Export Control Community is responsive and
properly coordinatedi I
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25X
f
I would also like to call to your attention several important efforts that
have been undertaken recently by elements of the Intelligence Community
to improve intelligence support to export control policy and decision-
making:
? The Defense Intelligence Agency now ensures that the military implica-
tions of technology transfers are factored into all appropriate DOD
foreign weapon systems studies and that foreign technology availability
assessments are being conducted in support of the Military Critical
Technology List program levied on DOD by the Export Administration
Act.
? The intelligence components of Commerce and Treasury, with the
assistance of NSA and CIA, have taken the initiative to define their
intelligence needs more precisely, and as a result the flow of relevant
foreign intelligence for use in their export control efforts has increased.
Several important problems remain to be addressed by the IC, but I intend
to pursue them vigorously with all the resources I have available. Further-
more, I have asked Admiral Inman to conduct a review of the IC's current
resource capability to address the remaining problems, and we will take
appropriate steps to ameliorate those that are not adequately coveredQ 25X
The review conducted in preparing this report also identified a number of
other important problems that affect US technology losses to the Commu-
nist countries but that are beyond the Intelligence Community's area of
responsibility. These problems are identified in section III of the report. I
am prepared to work with you and the appropriate departments and
agencies to stop these illegal, unauthorized, or unintentional transfers of
US technology. F]
Sincerely,
William J. Casey
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CPrrrt
Summary Report
on
Technology Transfer to Communist Countries
and
the Intelligence Community's
Role and Effectivenes I
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This report addresses three questions expressed by members of the Senate
Select Committee on Intelligence concerning technology transfer to Com-
munist countries: 1) What is the Intelligence Community's role; 2) What is
the nature and extent of Western technology loss; and 3) What steps might
be taken b the IC to improve the Community's role in helping to stop such
losses?
II
The transfer of Western technology to Communist countries continues to
be one of the most complex issues facing our government. The prevention
of US technology loss is particularly complicated because it not only
involves activities that are spread throughout the US Government, but also
requires the active cooperation of foreign governments. In addition, the
prevention and protective measures that can be taken by the US Govern-
ment include such complex and diverse elements as US foreign trade policy
and domestic and international export controls; domestic and foreign law
enforcement and counterintelligence activities; and export control licensing
requirements and the control of both unclassified and classified national
defense information. The role of the Intelligence Community in this area
has been poorly defined and other than the traditional responsibilities of
collection, analysis, and the production of finished intelligence on East-
West technology transfers, the Community has provided only support that
has been directly requested. In the past the IC considered this responsibil-
ity to be a secondary priority, at best
This report addresses the technology transfer loss problem and its national
security implications. The term technology transfer connotes a wide range
of trade, scientific, industrial, and communications activities; there is no
single definition. When viewed in the context of technology loss the means
of transfer becomes a greatly enlarged set, ranging from open source
publications to war losses and traditional espionage. Transfer mechanisms
that would not be considered cost-effective in commercial transfers, such as
reverse engineering an illegally acquired missile component, become useful
means to military adversaries who otherwise would be denied such
technology. "Technology transfer" as used in this report means the
conveyance of technical knowledge by legal or illegal means, including
technical journals and memorandums, blueprints, technical proposals,
official and personal conversations and plant tours, manufacturing equip-
ment, whole plants, and end products.II
ix Secret
TTIC 81-001
October 1981
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This report was prepared by the Central Intelligence Agency, the Defense
Intelligence Agency, the Federal Bureau of Investigation, the National
Security Agency, the Department of Energy, the DCI's Committee on
Exchanges (COMEX), and the DCI's Community Counterintelligence
Staff. It was reviewed and coordinated by the intelligence components of
the Departments of Commerce, State, and Treasury. The report was
reviewed and concurred in by the National Foreign Intelligence Council on
October 13, 1981F7
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Technology Transfer and the Role of the Intelligence Community 1
Benefits to the Soviet Military and Defense Industrial Sectors
13
Benefits From the Acquisition of Selected Key Technologies
17
Intelligence Community Efforts Regarding Technology Losses and Areas Where
Improvement Is Needed
21
The Chinese Technology Transfer Problem
27
1. Intelligence Community Coverage and Support Related to Export
Control and Technology Transfer Responsibilities
5
2. Selected Technology Transfer Mechanisms and Controls
7
3. Soviet Clandestine Acquisition of US Military Technology
19
4. Selected Soviet Systems Projected for Initial Operational Capability
in the 1990s.
15
5. Acquisitions From the West in the Key Areas of Soviet Military
Technology.
16
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Technology Transfer and the Role of the Intelligence Community
The Problem
The Intelligence Community (IC) shares the committee's concern regard-
ing the transfer of Western technology that benefits the defense efforts of
Communist countries. 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 ac uire those US
technologies that are classified and export controlled 25X
The Soviets and their Warsaw Pact allies have acquired militarily signifi-
cant US technology through all possible technology transfer channels.
Their effort to acquire US and Western technology is well planned and
managed, its primary objective being to support Soviet and Warsaw Pact
defense programs and to selectively fill gaps in their industrial base. Our
intelligence indicates that this effort has been quite successful. Tables of
selected US and Western technology and equipment acquired by the
Soviets can be found in the tabular appendix to this report.n
Over the last decade the KGB,' the GRU,2 and the East European
Intelligence Services have acquired key military technologies, such as US
ballistic missile guidance components and designs; sonar and related
antisubmarine warfare (ASW) technology; tank and antiarmor technol-
ogies; and wide varieties of missile and aerodynamic weapons technologies
from the United States and its NATO allies. They have also been able to
acquire large quantities of controlled technology such as semiconductor
design and manufacturing equipment from the United States and other
Western nations; we estimate that they may have acquired enough
'The Soviet Committee for State Security] I r--" 25X
2 The Chief Intelligence Directorate of the Soviet General Staff.
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equipment to set upi 1, ntegrated-circuit production lines.
Similarly, Soviet and East Europea cquisitions of US
computer technology have been responsible for many of their advances in
general purpose and minicomputers.
The Intelligence Community has concentrated its efforts over the last
several years in determining the nature and extent of Western technology
losses 25X1
We have only recently begun to focus our analytical
equipment has saved the Soviets' defense production ministries millions of
dollars in R&D funds, not to mention the developmental time it has saved.
The Soviets' need to reduce Warsaw Pact military production costs is cited
as one of the primary reasons for acquiring advanced Western production-
related technology sources also have cited the innovative
effect of Western technology on Soviet industry as another reason for its
acquisition and use. For example, we believe the extensive effort to acquire
US-controlled semiconductor production equipment is an effort to modern-
ize the whole Soviet electronic component industry, a key sector in the
Soviet defense industry.
Direct military applications of Western technology are hard to confirm,
but we believe that most Western technology acquired by Soviet and East
European intelligence services is used in some fashion by defense industry
designers and manufacturers. We believe that such technology, which is
usually acquired in response to specific requirements, is used directly or
indirectly in both military R&D and countermeasure development.
25X1
actual Soviet use of acquired Western equipment and technology is limited
we do know that the Soviets value Western technology quite highly. 25X1
~ave stated that the acquisition of Western technology and 25X1
efforts on assessing the military value of these technology losses to the
Soviets and their Warsaw Pact allies. Although our intelligence concerning
While it was Soviet practice in the 1950s and 1960s to copy Western
military technology and in some cases entire weapon systems (for example,
the Sidewinder air-to-air missile, which became their ATOLL missile),
their present inclination is to be far more discriminating, evaluating the
foreign technology carefully and choosing only those design elements and
engineering approaches that best fit their military needs and industrial
capabilities. More and more, Western technology is needed only on a
selective basis to upgrade key subsystems to achieve new performance
objectives. The acquisition and copying of US inertial guidance compo-
nents, for example, is believed to have helped the Soviets in achieving their
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current ballistic missile accuracy. Soviet antisubmarine warfare (ASW)
capabilities have been significantly upgraded as a result of illegal acquisi-
tions of Western equipment and technology, and Soviet tanks have profited
from acquired Western technology. To date we have not been able to assess
the military and industrial implications of many known Soviet techinaloory
acquisitions: we plan to, as time and resources permit, in the future. 5X
L_E5X
The Role of the Intelligence Community
The role of the Intelligence Community concerning unauthorized and
illegal transfers of US technology to Communist countries includes the
following: 3
1. Collecting information on and monitoring the transfer of controlled
technology to foreign countries and disseminating relevant intelligence to
the appropriate US export control agencies.
2. Producing finished intelligence on the military, economic, and political
implications of actual and proposed technology transfers to controlled-
country destinations.
3. Providing support to the NSC and high-level policy and decisionmaking
organizations within the US export control community-that is, Com-
merce, State, Treasury, Energy, Defense, and the several interagency
bodies that exist.
4. Providing intelligence support-as requested-to US Departments and
Agencies (Commerce, State, Treasury, and Energy) that are responsible for
administering export controls.
5. Disseminating that foreign intelligence information concerning possible
violations of US export control statutes to the Department of Justice and to
the appropriate investigative and enforcement agencies.
6. Disseminating intelligence and foreign counterintelligence information
to the National Disclosure Policy Committee to aid in making decisions
concerning the release of US classified military information and material
to eligible foreign nations.
3 The IC's responsibilities concerning the loss of US technology are derived from a number
of executive policy and decision memorandums as well as executive orders, including
Executive Order 12036 and related Attorney General Guidelines concerning the reporting
of possible export control violations, Presidential Review Memorandum (PRM-) 31 and its
NSC Decision Memorandum, and NSC 953 establishing the Interagency Working Group
on Export Control. Specific statutory responsibilities, however, are limited to the foreign
availability responsibilities cited in the Export Administration Act of 1979 and to the
Espionage Statute=
3 Secret
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7. Providing current reporting and analysis of foreign intelligence on
illegal, including clandestine, acquisitions of US technology to those export
control organizations responsible for domestic and foreign compliance
actions.
8. Using foreign counterintelligence operations, as appropriate, to prevent
US technology losses involving hostile intelligence services.
Table 1 lists the principal responsibilities of the Community and identifies
the support of the IC organizations that perform them
The FBI is the primary member of the Intelligence Community with law
enforcement responsibilities related to technology losses, but it has no
statutory responsibility for enforcing the Export Administration Act or the
Arms Export Control Act. The enforcement responsibilities for these
statutes are assigned to the Department of Commerce (Export Administra-
tion Act) and the Department of State (Arms Export Control Act); these
Departments call on the Customs Service for inspection and investigation
assistance. The FBI does become involved in the prevention of US
technology losses, however, when such losses are encountered in the course
of its foreign counterintelligence investigations and in the course of its
enforcement of espionage, foreign agent registration, and other criminal
statutes. Other members of the IC (CIA and the military services) also
conduct counterintelligence investigations which relate to US technology
losses
Although the IC has very limited responsibilities concerning the prevention
of technology losses, its normal collection, analysis, and intelligence-
production efforts regularly result in the production of foreign intelligence
useful to the export control policy and enforcement agencies. These efforts
have been of some assistance in strengthening US Government enforce-
ment of national security export controls, in preventing potential unauthor-
ized and illegal transfers, and in avoiding potential technology losses.I
The IC supports US export controls by providing timely reporting and
analysis to those government agencies and interagency working groups
concerned with domestic and international compliance. With respect to
domestic efforts, the IC provides foreign intelligence support to the
Commerce Department's Office of Export Administration compliance
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effort and to the Customs Service through regular dissemination of
unevaluated intelligence, as well as through analytical support on particu-
lar export cases, as requested. The IC also participates in the new
Interagency Working Group on Export Control, chaired by the Depart-
ment of Justice, which is responsible for the oversight and coordination of
domestic enforcement activities of the US Government
Similarly, the IC provides analytic and advisory support to the US
Government's international monitoring and enforcement efforts through
the Economic Defense Advisory Committee's (EDAC) Working Group II
(WGII). This group is responsible for coordinating US Government
positions on illegal diversions and enforcement issues involving negotiations
bilaterally with other governments and multilaterally in the Coordinating
Committee (CoCom).'Q
The DCI's Committee on Exchanges (COMEX) coordinates IC efforts
concerning official US Government exchanges and bilateral cooperative
agreements, as well as commercial visits and related activities, with the
USSR, China, and East European countries. COMEX advises the State
Department and other agencies involved regarding possible science and
technology gains and losses and the potential intelligence benefits to the
United States of proposed, ongoing, or contemplated exchange programs.
The committee advises State and others regarding ways that visits might
be constrained in order to reduce the potential for adverse technology
transfer. Under US national security export control regulations, the release
of technical data to foreign visitors may be a form of export. When the pro-
gram of a prospective visitor might require review by licensing authorities
in Munitions Control or Commerce, these agencies are so advised. II
At the present time the responsibilities and activities cited above are
diffused throughout the Intelligence Community, and there is no central
focus within the IC for overseeing and coordinating their execution.
Composed of the following countries: the United States, United Kingdom, France, Italy,
the Netherlands, Belgium, Luxembourg, Norwa nmark, Canada, Federal Republic of
Germany, Portugal, Japan, Greece, and Turkey
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The Technology Loss Problem
The Nature of the Losses
The USSR has traditionally given high priority and devoted large amounts
of resources to the acquisition of US and Western technology by all means
at its disposal. The efforts include legal acquisitions through legitimate
trade, scientific and technological exchanges, open source publications, and
international organizations and conferences; illegal purchases and trade
activities, including diversions through trade channels that evade US
export control, as well as traditional
recruited agents, industrial espionage 25X
Table 2 provides a general view of some of the many technology transfer
mechanisms that must be monitored to detect illegal and unauthorized
transfers. The table also identifies some of the control mechanisms that
help stem our technology losses
Among the many sources of Western technology accessible to the Soviets,
the acquisitions that have the most immediate impact on Soviet military
development have resulted from clandestine collection and trade diversions
of defense-related technology. The most significant Soviet military acquisi-
tions have been weapon designs, manufacturing plans and drawings,
critical components, subsystems, and some complete weapon systems. The
Soviets also have profited from the exploitation of captured Western
military equipment (as in Vietnam)
The Soviet clandestine collection program is approved at the highest levels
of the government-that is, the Central Committee of the Communist
Party and the Council of Ministers. These illegal acquisition efforts are
driven first by the needs of the military, the defense industrial ministries,
as voiced through the Military-Industrial Commission (VPK); and, second-
ly, by the needs of the civilian sectors of Soviet industry that support
defense production. The technology acquisition efforts of the Soviet
intelligence services are worldwide, centrally directed, and very selective.
They are closely coordinated with overt acquisitions and legitimate pur-
chases, particularly those efforts under the auspices of the State Commit-
tees for Science and Technology (GKNT). The USSR's acquisition efforts
ively supported by the other members of the Warsaw Pact
The Soviets and their Warsaw Pact allies also have acquired-mainly
through illegal trade means-export controlled dual-use and defense-
related production equipment. Over the last five years, Soviet illegal trade
efforts have concentrated on computers, microelectronics, airbreathing
propulsion technology, guidance and navigation systems, acoustic sensors,
optical technologies (including lasers), and modern production equipment
5X
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Selected Technology Transfer Mechanisms and Controls
Mechanisms a
? Direct investment
? Complete (turnkey) plant sales
? Patents and licenses with extensive teaching effort
? Joint ventures and joint production development
? Technical exchanges with ongoing contact
? "Know-how"-training, consulting in high-technology areas
? Processing equipment (with know-how)
? Technical data and engineering documents
? Proposals, presale negotiations, and sales presentations
? Commercial visits
? Governmental- and industrial-equipment sales
? Sales of products
? S&T and student exchanges
? Open literature (journals, magazines, technical articles, for example)
? S&T conferences, trade shows, and exhibits
? Hostile intelligence service acquisitions
? Recruited agents and industrial espionage
? Illegal arms trade
? Illegal trade
? End-user diversions
? Third-country diversions
? Foreign SIGINT
? Capture in war
Controls
? Export controls (national and international)
? Government security and regulations
? Industrial security
? Company management
? Visitor control (governmental and industrial)
? Prerelease reviews of open literature
a All transfer mechanisms can be employed with or without the
participation of hostile intelligence service personnel. The involve-
ment of such personnel can range from the overt, legal collection of
unclassified, unembargoed technology to the clandestine acquisition
of classified, military technology by agents working pursuant to the
direction of hostile intelligence service personnel. Furthermore, most
of the transfer mechanisms can be legally or illegally employed.
Some of the mechanisms, such as capture in war, make the concept
of legality moot.
and technology. Detected diversions and evasions over the last several years
were particularly heavy in the field of semiconductor manufacturing
equipment, and they indicate Soviet and East European efforts to improve
their whole electronic components industrial sector. The controlled technol-
ogies being acquired by the Soviets and the Warsaw Pact are a revealing
indication of their defense needs
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Major Loss Problems
The USSR and its Warsaw Pact allies are acquiring militarily critical and
other significant Western technology through almost all possible technol-
ogy transfer mechanisms. Because of their well-planned and exhaustive
technology acquisition effort, the Soviets are able to fully exploit the open
and legal sources available in the West at minimal cost and risk before em-
ploying their intelligence services to acquire the more difficult export
controlled and classified technologies they need for defense purposes. We
have identified below some of the most serious technology transfer
problems currently facing the United States and its allies
1. Losses resulting from Soviet and East European intelligence service
operations (that is, recruited agents and industrial espionage), particular-
ly abroad: The problems of protecting US technology from hostile
intelligence services abroad are particularly difficult because the United
States must rely mainly on the domestic security and counterintellfizence
services of host governments.17 5X
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2. US technology losses through trade diversions abroad: Whether the
losses are the result of hostile intelligence operations or just illegal trade
practices, the United States must in large part rely on the law enforcement
efforts of those of its allies in whose countries these trade diversions take
place.
IThe Soviets have been a dominant
force behind these illegal trade diversions of Western technology, with
Poland and Hungary being their major East European surrogates. The US
Government framework for dealing with these diversions is not now
adequate to deal with large-scale, widespread losses or illegal losses
involving US technology and US people abroad. The related task of coping
with the possible end use or in-place diversions (that is, from civil to
military applications) of equipment sold legally to the Communist countries
is very difficult; this situation reflects both the great ease of affecting such
diversions in closed societies and the enormous difficulties of detecting
them.
4. Legal sales that contribute to Soviet defense capabilities: Legal
purchases of Western equipment have played a major role in developing
the Soviet industrial base. The Soviets have purchased billions of dollars
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worth of Western equipment and machinery over the last decade. These
purchases have included a number of categories having potential defense
application-advanced materials and fabrication equipment, modern elec-
tronic componentry, laboratory and industrial test equipment, and auto-
mated production equipment and technology. Such purchases, requiring
hard currency, are closely controlled by the State Committee for Science
and Technology (GKNT) and those meeting the direct or partial needs of
Soviet industry for defense purposes are given the highest priority.^
The present Commodity Control List concentrates heavily on electronic
technologies and treats to a lesser degree many industrial technologies-
for example, metallurgy and chemical areas which are needed to manufac-
ture modern weapons. The US system of general license authorizations
permits legal sales of equipment and relatively low-level technical informa-
tion without specific government review. The general license authorizations
also permit the possession of equipment from which design details may be
extracted, provide vast quantities of commercial technical literature,
permit detailed contract bid documentation during negotiations for pro-
spective sales, facilitate personal contacts and plant visits, and continued
commercial relationships using normal maintenance, repair, and operation
arrangements.
7
5. Transfers resulting from Soviet and East European exploitation of S&T
exchanges pose a continuing loss problem: Soviet and East European
efforts to acquire US technology are extensively abetted by the overt (and
essentially legal) collection activities of their scientists and engineers that
participate in academic, commercial, and official S&T exchanges. The
S&T agreements are judged to provide valuable scientific information and
technology for the USSR. The Soviets believe that their scientists partici-
pating in these exchanges are able to acquire Western technology of
considerable S&T and military benefit. Soviet and East European students
and visiting technical delegations to the United States are generally of high
quality, and we suspect many of them are associated with classified work in
the country from which they come. These visits and various arrangements
that permit direct Soviet access to US companies are considered to be
among the more important sources of technology loss
6. Open source publications, particularly US Government documents, in
which sensitive technology is made available prematurely, provides a
major opportunity for Soviet and East European acquisitions: Soviet use of
overt collection methods to acquire Western information and technology is
so extensive that it is almost impossible to assess; no thorough study has
ever been made on the subject. The Soviets have certainly recognized the
value and utility of the open source literature-they regularly purchase
almost all US Government - published S&T documents. The USSR
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maintains an elaborate network for collecting, processing, and disseminat-
ing information on Western science and technology. In all, 100,000 to
130,000 people are believed to be employed in this network. Soviet weapons
designers are reported to follow such open source information very closely.
US Government publication, dissemination, and classification/declassifica-
tion procedures provide the Soviets an ever-increasing source of S&T
information. Automatic-and often premature-declassification of gov-
ernment R&D reports and their availability to the public at large offers the
Soviets access to US technology that is very valuable to them in building
their own industrial-military capability and countering US weapons devel-
opment. US Government sales and information exchanges of unclassified
S&T information with our allies, as well as with Communist countries,
facilitates this access.
7. Losses through Communist-owned, locally chartered firms in the
United States, Japan, and West European countries: There are at least 30
of these firms in the United States (five Soviet, 17 Polish, five Czechoslova-
kian, and three Hungarian); most European countries have at least 20 each,
with some having as many as 50. The location of Communist-owned firm"s
abroad (both legitimate firms and dummies) facilitates the acquisition of
US technology due to the sharply limited US oversight overseas.
Over the past few years there has been evidence of the increased use of
Communist-owned firms by Soviet and East European Intelligence Serv-
ices in the United States to acquire controlled technology. These firms can
legally purchase controlled US technology, and study it without actually
violating US export controls unless they attempt to ship the equipment or
related technical data out of the United States. Such activity is difficult to
assess because these companies are formed under state laws and are thus
not registered with the US Government. Furthermore, since representa-
tives of Communist-owned but US-chartered companies are not obligated
to identify themselves as agents of foreign governments, there is a great
risk that joint ventures between such firms and US corporations could
result in serious technology losses=
25X1
25X1
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8. Losses through Soviet and East European personnel in key positions in
international S&T organizations: Examples of such organizations include
the International Institute for Applied Systems Analysis (IIASA), the
International Atomic Energy Agency (IAEA), and various S&T offices
associated with the UN. The Soviets and East Europeans have taken
advantage of their positions in these organizations to acquire Western S&T
information and proprietary technology. All Soviet personnel in such
organizations are required to acquire such information. There also have
been instances where these positions have been used to facilitate the
acquisition of controlled Western technology and to mount traditional
clandestine intelligence operations II
I indicates that the Vienna-based IIASA, 25X
jointly funded by 17 member nations from the East and West, is
increasingly being used by the Soviets for technology transfer purposes and
for intelligence activities directed at the United States and its Western
allies. The Soviet technology acquisition efforts there include: influencing
the selection of research programs at the Institute that produce greater
benefit to the Soviets than the West; exploiting assigned Western S&T
personnel and their sponsors, particularly those from industry; and, the
massive exploitation of IIASA's computer access to Western S&T comput-
er data bases 25X
9. Losses of newly emerging and commercial technologies by all mecha-
nisms: One of the most significant future loss problems concerns the lack of
protection for commercial and emerging technologies. Many of these
advanced technologies today will become the critical technologies of future
Western weapon systems. Applications for new technologies just emerging
from the research stage are often not yet firmly identified, and, conse-
quently, there is a period when such technology is not protected by
classification export control or p r o p r i e t a r y means 2 X
I :: 2 X
Moreover, as commercial interests continue to rep ace 25X
governmental programs as the primary impetus behind US research and
development, a larger sector of our advanced technology will fall initially
outside the normal defense security sphere. The protection of such
technology early on, and its denial to Communist countries, poses a
significant and intractable problem. 25X
Benefits to the Soviet Military and Defense-Industrial Sectors
For the past 15 years the Soviet Union vigorously pursued a program to de-
velop and modernize its strategic forces. This program continues unabated
into the 1980s as the Soviets expand an already large military R&D and
production establishment to provide the weapons needed to support their
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leadership's broad military and political objectives. A basic component in
the advancement of this military-industrial establishment has been the
acquisition and exploitation of both technology and hardware from the
West. Examples of systems and technologies acquired are listed in the
tabular appendix
The Soviets have been able to satisfy three basic R&D objectives through
the selective acquisition of Western technology:
? First, the reduction of risk by following or copying proven Western
designs.
? Second, the reduction of R&D time and costs by the use of Western
designs and technology, including production-related technology and
equipment.
? Third, the incorporation of countermeasures early in the Soviet weapons
development process.=
Similarly, the Soviets have been able to upgrade critical industrial sectors
such as computers, semiconductors, and metallurgy, as well as to modern-
ize Warsaw Pact industrial manufacturin capabilities in order to keep
military production costs under control
The fact that the Soviets historically have given high priority and devoted
large amounts of resources to the acquisition of Western technology using
all means at their disposal indicates that such technology is of great value
to them. One way to measure the value of Western technology to the
Soviets is to compare the technologies they have been acquiring to what we
estimate their technological needs and gaps are for projected future
weapons systems.
At present, the Soviets have under way about 90 major military programs,
at least a dozen of which are devoted to strategic ballistic missile systems.
We expect the numbers of new or modified Soviet weapon systems
reaching operational status in the 1980s to remain near historical levels,
some 200 weapon systems in each of the past several decades. While the
Soviet approach to military R&D relies mostly on evolutionary steps to
minimize risks and avoid production problems, new generations of existing
weapons requiring significant improvements in technology and some high-
risk, innovative approaches also are undertaken. It is in these areas that So-
viet illegal acquisition efforts are most likely to be concentrated. A
selection of future systems projected for the Soviets in significant mission
areas for the 1990s is shown in the left column of Table 4.0
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Projected High Probability of Occurrence
Improved air-superiority Advanced lookdown/ Materials, guidance, computers,
aircraft shootdown; possibly control microelectronics
configured
New weapon system for Accuracy (CEP) of 500 to 600 Computers, guidance/
Typhoon ballistic missile meters navigation, materials
submarine b
Modernized theater command, Versatile survivable equipment, Microelectronics computers,
control, and communication automated control system production communication
systems (widespread
deployment)
New class of attack submarine High speed, great depth, Production, materials,
quietness propulsion
T-80 tank follow-on b Improved day/night cross- Sensors, materials
country mobility; armor
protection
Advanced space station Permanently manned, Sensors, signal processing
(permanently manned) b multimission
Space-based laser antisatellite Multiple target capability Directed energy, power sources
system
Improved Moscow ABM system Reentry vehicle discrimination, Computers, signal processing
improved target-handling
capability
Projected Low Probability of Occurrence
Enhanced neutron warheads Broad-area antitank weapon Production
(for artillery rounds) (limited collateral damage)
Air- and space-based submarine Broad-area search (if concept Signal processing, sensors
wake detectors (feasibility has feasible)
not been established for these
concepts)
a Key technology available for systems development.
b May reach initial operational capability in the late 1980s.
The key technologies that are required by the Soviets for these potential
systems are displayed in the right column of Table 4.~
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A Soviet technology is considered key or critical if it is basic to a number of
significant military functions or concepts, or if it is a pacing factor for a
specific military capability. For example, among the Soviet military -
systems projected for the 1990s (Table 4), computer technology is basic to
new performance in strategic and tactical systems for command, control,
and communications; in a follow-on to the Typhoon ballistic missile
submarine (SSBN/SLBM) system; and in an air-superiority fighter (in-
cluding control configuration). As another example, the development of
high-bypass-ratio turbofan engines in the propulsion technology area is the
pacing factor in our projection of new Soviet performance capability in
large transport aircraft capable of strategic airlift missions 25X
The Department of Defense's initial list of militarily critical technologies,
as placed in the Federal Register in October 1980, was prepared in
response to the Export Administration Act of 1979. DOD's critical
technologies list does not contain an explicit list of technologies critical to
the USSR. It is principally a list of those technologies critical to US
weapons that should be "protected" from the Communist countries. A
comparable list of critical Soviet technologies has not been developed by
the Intelligence Community for export control applications.)
2510
Benefits From the Acquisition of Selected Key Technologies
Microelectronics. Since about 1965, the Soviets have placed a high priority
on microelectronics R&D, and their military oversees the development and
production of advanced integrated circuits. The Soviet practice has been to
copy US devices. Many of their own devices are designed for compatibility
with Western parts, and they rely on legally or illegally obtained Western
parts to supplement their own base. The latest Soviet device design
capability is now only about three years behind that of the United States
while the production capability lag is about nine years. 25X
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We expect Soviet military systems designers to continue to use devices that
are pin-for-pin compatible with Western parts, thus decreasing the devel-
opment time for their new systems. Indigenously produced parts can then
be used when they become available. Thus, through the acquisition of
Western components, the Soviets' future military applications of microe-
lectronic technology may be more advanced than their general technology
level would suggest
There has been substantial evidence over the past decade that the USSR
has obtained large amounts of Western materials and manufacturing and
test equipment for microelectronic fabrication. These acquisitions cover
nearly every area of the material input and manufacturing steps of
microelectronic production. From this we have concluded that Western
materials and equipment have played a very important, if not crucial, role
in developing Soviet microelectronic manufacturing capability and produc-
tion capacity.
There has been little evidence to suggest that the Soviets have made
significant progress in reducing their dependence on Western technology.
Moreover, with the rapid progress that has continued in Western microe-
lectronic technology and means of production, we estimate that the USSR
will remain de endent on Western technology acquisitions well into the
late 1980s"
Among the Eastern European countries, only East Germany appears to
have concentrated its efforts on the development of advanced microelec-
tronic production equipment. Recent evidence indicates that the Soviets
have pressured East Germany to assume an expanded role in supporting
Soviet needs.
We believe that more effective international control of microelectronics
fabrication equipment and materials exported to the USSR and Eastern
Europe would have a serious impact on the Warsaw Pact countries' future
development of military-related electronics. The USSR and, to a more
limited degree, the East European countries are about to enter large-scale
production of LSI devices and will require increasing amounts of Western
equipment and materials. It is unlikely that individually or collectively the
Warsaw Pact countries can accomplish this modernization quickly and
effectively without access to Western technology
Computers. Soviet computer technology has been limited by fabrication
and production technology problems and by difficulties in software devel-
opment. Since 1969 the USSR and East European countries have been
developing a family of general purpose computers known as the Ryad
series. These computers essentially make up the total Soviet and East
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tion of IBM designs0 25X
European effort in general purpose computers, and they 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 US IBM 360 and 370 series of computers; the Ryad
computers also use some Western engineering concepts in the implementa-
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 could be used in a wide range of
applications and could be 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 com uters, and in some cases they saved considerable manpower
and time.II 25X
aircraft industry.
Soviet and East European development of the Ryad computer systems has
been aided by virtually all available acquisition means-legal and illegal,
including clandestine-for acquiring technical know-how 25X
information (mainly acquired by clandestine means) an 25X
openly available data, however, was of greater benefit to the Ryad
developers than were the acquisition (including illegal diversions) and study
of actual IBM hardwarel 25X
Production Technology. A major weakness in the Soviets' ability to
incorporate advanced component technology in military systems lies in
their outdated manufacturing equipment and production technology. The
Soviets generally are not advanced by Western standards in production
processes where large quantities of high-technology products are con-
cerned. Their industrial production is generally marked by deficiencies in
quality control, automation, and mechanization. As a result, Soviet
production erformance even in high-priority military areas, has been
uneven. II 25X
Defense hardware production-characterized at present by labor-intensive
processing-will continue to need key technological acquisitions from the
West. Some improvements in productivity and machining accuracy will
come from the introduction of Western automated manufacturing centers
and other numerically controlled machine tools. Recent large purchases of
machining centers from Japan and Western Europe may have already
benefited some military manufacturing sectors, particularly the Soviet
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Current Soviet foreign technology acquisition efforts seem most concen-
trated in obtaining numerically controlled machines (including robots) for
precision, repeatable machining operations. They are also interested in
materials and materials processing, including powdered metallurgy proc-
esses and powder forming and pressing equipment, with some emphasis on
steel casting methods and composite materials (carbon-carbon, metal
matrix, ceramic matrix, and high-performance polymer matrix) produc-
tion. They have sought electron-beam and other automatic welders, casting
and drilling techniques and equipment, and chemical milling processes.
Radar and Acoustic Signal Processing. The Soviets' theoretical under-
standing of most aspects of signal propagation, as well as of signal
processing techniques and algorithms, probably is on par with that of the
West. They lag the West, however, by five to 10 years in the speed of digi-
tal computer signal processing equipment and in its production. Because of
their new military needs, as well as this lag, they have been attempting to
acquire this Western technology
To make up for some of their sonar signal processing deficiencies, for
example, the Soviets purchased a number of real-time, narrowband
acoustic signal analyzers (CoCom controlled) from Denmark in the mid-to-
late 1970s. The Danish firm claimed it was unaware that the processors
were CoCom controlled. The technology in the processors is more advanced
than the technology the Soviets have, and it could significantly improve
Soviet ASW capabilities to passively classify US submarines and extend
passive sonar detection ranges against US submarines
Airbreathing Propulsion Technology. Soviet indigenous R&D in airbreath-
ing aerospace propulsion technology shows a strong commitment to high-
temperature operation of turbine-based systems through advances in
materials, cooling`, and surface coating and manufacturing technologies
with the goal of building more efficient, more compact jet engines. The So-
viets are somewhat deficient in the development of these technologies,
which are key for use in C-5A-sized transports or cruise missile carriers
and for improved turbojet and low-bypass-ratio turbofan engines used in
strategic bombers, fighters, and attack aircraft
1:
Western technology acquisitions by the Soviets over the last five years have
been effected by a wide range of requirements in these same technological
areas. Inquiries, acquisitions, and acquisition attempts include almost all
technologies and equipment to build high-temperature, jet engine, gas
generator cores including cooling technology and film-cooled turbine-blade
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designs; turbine-blade fabrication processes and equipment; and high-
temperature superalloys used in the actual blade-fabrication process
including pressing, stamping, forging, drilling, casting, and welding tech-
niques. In addition, the Soviets have been very active, although unsuccess-
ful, in efforts to obtain very large, high-bypass-ratio, turbofan engines
which use high-temperature engine cores.
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