LETTER TO (SANITIZED) FROM ROBERT M. GATES

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CIA-RDP90G01359R000200020014-1
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K
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41
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December 22, 2016
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November 2, 2011
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14
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September 18, 1985
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LETTER
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Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 18 September 1985 Mr. Arnold Beichman P.O. Box 37 Naramata, British Columbia Canada Dear Arnold: Secretary Weinberger is releasing the enclosed paper this morning. Thousands of copies will be circulated to US defense contractors, foreign governments and other interested parties. While the organization that prepared the document is not identified, you may find the graphics and style familiar. Because we think this is such an important problem, I wanted to be sure that you received a copy promptly. I hope you find it useful. Sincerely, Enclosure: As Stated Robert M. Gates DDI/RMGates/de/5151 DISTRIBUTION: 0 - Addressee (mailed to: c/o Professor Kerry Kartchner 1 - DDI Registry Naval Post Graduate School 1 - DDI Chrono Monterey, California 93943-5100 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Central Intelligence Agency Office of the Deputy Director for Intelligence DDI #04586-85 18 September 1985 Mr. W. Bruce Weinrod Director of Foreign Policy and Defense Studies The Heritage Foundation Washington, D.C. 20002 Secretary Weinberger is releasing the enclosed paper this morning. Thousands'of copies will be circulated to US defense contractors, foreign governments and other interested parties. While the organization that prepared the document is not identified, you may find the graphics and style familiar. Because we think this is such an important problem, I wanted to be sure that you received a copy promptly. I hope you find it useful. Enjoyed our lunch and look forward to remaining in touch. Si ely, Robert M. Gates Deputy Director for Intelligence Enclosure: As Stated DDI/RMGates/de/5151 DISTRIBUTION: 0 - Addressee 1 - DDI Registry 1 - DDI Chrono Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Central Intelligence Agency Office of the Deputy Director for Intelligence Mr. David Sullivan Legislative Assistant c/o Senator James McClure United States Senate Washington, D.C. 20510 DDI #04585-85 18 September 1985 Secretary Weinberger is releasing the enclosed paper this morning. Thousands of copies will be circulated to US defense contractors, foreign governments and other interested parties. While the organization that prepared the document is not identified, you may find the graphics and style familiar. Because we think this is such an important problem, I wanted to be sure that you received a copy promptly. I hope you find it useful. I appreciated the clippings you sent (and your note). Robert M. Gates Deputy Director for Intelligence Enclosure: As Stated DDI/RMGates/de/5151 DISTRIBUTION: 0 - Addressee (delivered after lunch) 1 - OLL 1 - DDI Registry 1 - DDI Chrono Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Soviet Acquisition of Militarily Significant Western Technology: An Update September 1985 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90G01359R000200020014-1 Soviet Acquisition of Militarily Significant Western Technology: An Update In recent years, the United States Government has learned of a massive, well- organized campaign by the Soviet Union to acquire Western technology illegally and legally for its weapons and military equipment projects. Each year Moscow receives thousands of pieces of Western equipment and many tens of thousands of unclassified, classified, and proprietary documents as part of this campaign. Virtually every Soviet military research project-well over 4,000 each year in the late 1970s and over 5,000 in the early 1980s-benefits from these technical documents and hardware. The assimilation of Western technology is so broad that the United States and other Western nations are thus subsidizing the Soviet military buildup. Western products and technology secrets are being systematically acquired by intricately organized, highly effective collection programs specifically targeted to improve Soviet military weapon systems. The Soviet intelligence services-the KGB, the GRU, and their surrogates among the East European services-and Soviet trade and scientific organizations are actively involved in obtaining this technology. Targets include defense contractors, manufacturers, foreign trading firms, academic institutions, and electronic data bases. Only recently has the full extent of illegal Soviet technology collection efforts become known. The purpose of this paper is to reveal in detail the structure of these Soviet programs, and to give examples of Soviet requirements and successes. Understand- ing the Soviet effort is a critical first step in protecting Western technology and preventing it from being turned against the West. Declassified and Approved For Release 2011/11/02 : CIA-RDP90G01359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Introduction 1 Overview of Two Soviet Programs 2 The VPK Program: Raising the Technical Levels of Weapons 4 and Manufacturing Equipment Successes and Benefits 6 VPK Collectors and Sources 1 1 The KGB 16 The GRU 16 Selected Sources 17 US Defense Contractors 17 Commercial Data Bases 17 Scientific Conferences 19 Ministry of Foreign Trade 20 Overt and Academic-Related Collectors 21 The Trade Diversion Program: Building and Expanding Industries 24 Computers and Microelectronics 24 Participants in the Second Program 25 Use of Diverters-for-Hire 26 Other Diversion Methods 27 Prospects for Stemming Losses 28 Several Hundred Examples of Soviet Military Equipment and 31 Weapons Benefiting From Western Technology and Products 1. Key Organizations Involved in Managing Military Research 3 and Manufacturing and the Acquisition of Western Technology 2. Examples of VPK Requirements, Mid-1970s-Early 1980s 5 3. Rank Ordering of Soviet Industries by VPK 7 Requirements Fulfilled, by Rubles Saved, and by Hardware Received, 1976-80 4. Technical and Time Benefits to Thousands of Soviet Military I I Research Projects From Western Technology Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 5. Ruble Savings From Only a Part of Soviet Western Technology 12 Acquisitions 6. Rank Ordering of Industries by Soviet Military Research Projects 13 Benefiting From Western Technology, Early 1980s 7. Soviet Military Requirements Satisfied by Principal 14 Collection Agencies in the Overall VPK Program, Late 1970s and Early 1980s 8. Most Significant Acquisitions Satisfied by Principal 15 Collection Agencies, Late 1970s and Early 1980s 9. Selected US Universities Identified by the Soviets as Sources 22 of Needed Applied Technology 10. Soviet Needs for Applied Science and Technology From 23 Selected US Universities Compared With Number of Visiting Soviet Bloc Scientists, Early 1980s H. Soviet Acquisitions of More Than 2,500 Pieces of Western Microelectronics Manufacturing Equipment, Early 1970s-Early 1980s 1. Summary of Results of the VPK Program, Late 1970s and 6 Early 1980s 2. Selected Worldwide Soviet Acquisitions, Military Applications, and 9 Collectors of Western Documents, Military Hardware, and Dual-Use Products 3. Rank Ordering of Top 100 US Defense Contractors of 1983 18 Compared With Their Rank Ordering by Approximate Frequency of Soviet Identification for Needed Technology, Selected Periods in Late 1970s and Early 1980s 4. Selected Successful Soviet Bloc Espionage Operations Against US 20 and Other Western Defense Contractor Targets 5. Examples of Dual-Use Equipment and Technology Likely To Be 29 Targeted by the Soviets Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Soviet Acquisition of Militarily Significant Western Technology: An Update Overcoming considerable technological inferiority over the past several decades, the Soviets have built the largest military industrial manufacturing base in the world and a massive research establishment to complement it. Their objective is to achieve military- technical capabilities that are at least equal, if not superior, to those of the West. Their resource commitment is enormous by any mea- sure: it has enabled them in recent years to narrow the Western lead in nearly all key technological areas, particularly microelectronics. In materials, explosive, and sensor technologies applicable to deployed tacti- cal forces such as tanks, artillery, and antitank and surface-to-air missiles the Soviets' technology level is roughly equal to or slightly better than that of the West. They are the world's leaders in a few significant fields, such as chemical warfare and in some areas of laser research for future "star wars" applications. Nevertheless, in spite of the several decades of mas- sive investment in indigenous research and develop- ment, the prospects are small that the Soviets can reduce their dependence on a large variety of Western products and technology in this decade and the next without allowing the technological gap to widen. The main reasons for this continuing need are endemic to the Soviet system: the lack of adequate incentives, inflexible bureaucratic structures, excessive secrecy, and insularity from the West. Even if there were some major Soviet economic or managerial reforms, no real lessening of the Soviet dependence on Western inno- vation is anticipated as long as the USSR perceives the need for military-technological parity with the West, or the need for superiority. Soviets, however, because of new technological leader- ship that the West has supplied them. Their depen- dence is essentially for innovation-where they will continue to look to the West-not for maintaining adequacy, which they have achieved in nearly all important military technologies. But today's adequa- cv will be tomorrow's obsolescence if tech nology fails to keep pace. In May 1982 the US Congress was given a report ' identifying a massive and global Soviet program to acquire Western militarily significant technology.' That report described the Soviets' successes in supple- menting their military research and manufacturing capabilities and in narrowing the technology gap with the West, thereby eroding the technological superior- ity on which US and Allied security depends. The identification of this Soviet program led the West to undertake greater efforts in counterintelligence and export control. Since then, it has become even more evident that the magnitude of the Soviets' collection effort and their ability to assimilate collected equip- ment and technology are far greater than was previ- ously believed. This update of the 1982 report defines the scope of the Soviet effort. It outlines how the Soviets go about acquiring Western technology and identifies examples of specific technologies they seek. It highlights details and statistics of Soviet successes-much more detail than could be revealed previously. This information was obtained directly by the United States and Allied countries. Understanding the Soviet effort is critical in designing ways to protect Western technology from being acquired and used against Western security interests. The impact of this dependence could be even more important in the 1990s than it is today. The USSR has been compelled to follow Western direction in technological change, and thus far it has been able to do this satisfactorily because of a mature technologi- cal base. The next decade is less certain for the 'Soviet Acquisition of Western Technology, April 1982. Exhibit No. 1. Hearings Before the Permanent Subcommittee on Investiga- tions of the Committee on Governmental Affairs, United States Senate, Ninety-Seventh Congress, Second Session, 4, 5, 6, 11, and 12 May 1982. Western technology (hardware, documents, and know-how) in- cludes that of Japan as well as other Free World countries. Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90G01359R000200020014-1 A basic question is why do Soviet weapon designers and Soviet manufacturers need to copy design con- cepts embodied in Western equipment and associated documents? In general, Soviet weapons have histori- cally reflected a commitment to functional designs that can be easily manufactured in labor-intensive factories and readily maintained in the field with a minimum of technical skill. There has always been a struggle between Soviet design simplicity and techni- cal complexity. Soviet weapon designers have not had to face the competitive pressures that drive Western designers to press the state of the art. Building on a mature research sector and on lessons learned from past performances of weapons in battle, the Soviets are placing more of a premium on techni- cally complex systems. Western system and equip- ment characteristics increasingly are used as yard- sticks against which Soviet technical capabilities are judged. Every major civilian or military project is compared with the best Western technology before it is approved for development. Once in development, Soviet standards mandate the comparison of the quality and technical level of hardware, at different design stages, with foreign counterparts. With their access to many details of Western weapons and dual-use equipment designs and concepts, Soviet designers are, in effect, competing with Western de- signers. That competition, supported and encouraged by the Soviet leadership, is probably pressuring the military research establishment to pay increasing attention to technically complex systems. Counter- vailing pressures for design simplicity are being ap- plied hr the manufacturing sector, which is less responsive in adapting to technological change. All of these forces indicate continuing Soviet programs to acquire Western military and dual-use hardware and technical data. Since 1982 it has become clearer that the Soviets have two programs to acquire Western hardware and documents: ? First, Moscow has a program to raise the technical levels of weapons and military equipment as well as to improve the technical levels of manufacturing processes. This program is managed by the most powerful organization in defense production-the Military Industrial Commission (VPK) of the Pre- sidium of the Council of Ministers (figure 1). Main- ly, although not exclusively, through intelligence channels, the VPK seeks one-of-a-kind military and dual-use hardware, blueprints, product samples, and test equipment to improve the technical levels and performance of Soviet weapons, military equipment, and defense manufacturing equipment and reduce any dependency on advanced Western products. This is done in large part by exploiting and adapting design concepts embodied in acquired equipment and associated documents. ? Second, the Ministry of Foreign Trade and Soviet intelligence services administer a trade diversion program to acquire relatively large numbers of dual- use manufacturing and test equipment for direct use in production lines. This program seeks export controlled microelectronics, computer, communica- tions, machining, robotics, diagnostic, and other equipment to increase the throughput of weapon- producing industries. These two programs, which apparently are adminis- tered separately, are the hub of the Soviet effort. The VPK program is principally, but not exclusively, an industrial security and counterintelligence concern for the West. It involves espionage by hostile intelli- gence officers, overt collection by Bloc officials, ac- quisition by scientific exchange program participants, and illegal trade-related activity. The trade diversion Declassified and Approved For Release 2011/11/02 : CIA-RDP90G01359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Figure 1 Key Organizations Involved in Managing Military Research and Manufacturing and the Acquisition of Western Technology ( __I Military policy. research. manufacturing, and the principal reyuestcrs of Western technology 11 Collectors of Western technology Chief' Intelligence Directorate (GRU) Military Industrial Commission (VPK) Key defense manufacturing ministries Aviation Industry Machine Building Defense Industry General Machine Building Communications Equipment Industry Radio Industry Medium Machine Building Shipbuilding Industry Electronics Industry Chemical Industry Electrical Equipment Industry Petroleum Refining and Petrochemical Industry Committee for State Security (KGB) East European intelligence services The Military Industrial Commission (VPK) coordinates the devel- opment of all Soviet weapons as well as the Soviet national-level program to acquire Western technology. The VPK is the most powerful organization in the defense-research establishment, com- prising the top executives of the key defense manufacturing minis- tries (industries). Requests for Western documents and one-of-a- kind hardware from military equipment designers in each of the 12 industries shown above are called requirements (see figure 2). To satisfy these requirements, the VPK controls a national State Committee for Science and Technology (GKNT) Ministry of Foreign Trade Other defense manufacturing ministries State Committee for Foreign Economic Relations (GKES) fund, amounting to some half a billion rubles each year (roughly $1.4 billion in 1980 purchase power equivalents). Once approved by the VPK, requirements are selectively levied among the KGB, the GRU, and at least four other national-level collection agencies, as well as surrogates among the East European intelligence services. The State Committee for Science and Technology (GKNT) acts as a collector and as the central processor for the national-level program. It also monitors the absorption and assimilation of Western technology by the defense industries. Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 program principally involves export control and inter- national compliance issues. Characteristics of these programs overlap, further complicating the design of adequate countermeasures: ? Both programs sometimes seek the same products. ? Soviet industrial ministries request technology and equipment through both programs. ? The collection channels overlap and in some cases the same Soviet individuals (intelligence officers and others) are involved in each program. The VPK Program: Raising the Technical Levels of Weapons and Manufacturing Equipment The VPK includes the top executives of most of the key Soviet defense manufacturing ministries shown in figure 1. Full VPK membership is given to the Ministers of Aviation, Machine Building (projectiles and explosives), Defense Industry (armor and electro- optics), General Machine Building (strategic missiles and space), Communications Equipment, Radio (ra- dars and large-scale computers), Medium Machine Building (nuclear weapons and high-energy lasers), Shipbuilding, and Electronics. It is a small but power- ful group, responsible for centrally overseeing the research, development, and production of all Soviet weapon systems. It coordinates developments between its chief customer, the Ministry of Defense, and the key suppliers, the defense-industrial ministries. As the expediter for weapons development projects, it is the principal Soviet military instrument for eliminating or circumventing the inefficiencies characteristic of the Soviet economic system. As part of its responsibility to enforce schedules and to ensure that technical and performance specifica- tions are met, the VPK translates requests for West- ern hardware and documents, principally by the de- sign bureaus of 12 industries (figure 1), into lists of collection requirements. In the late 1970s alone about one-half billion rubles (roughly $1.4 billion in 1980 purchase power equivalents) each year was reserved for purchases of one-of-a-kind Western hardware and documents. Three examples of specific requirements from the VPK lists are shown in figure 2. The first deals with the IBM 370 computer, used by the Soviets as the model for production of their own version, "Ryad," which is a copy of the IBM 370 architecture and functions. The second deals with a cruise missile computer. The VPK apparently assigned it a high priority because of major efforts under way at that time to develop long-range strategic cruise missiles, which require large-capacity digital memories for onboard navigation. The Soviets historically have had reliability and other problems in developing such computers. The third example is a US Fairchild Instrument Corporation/Xincom semiconductor memory tester. It is a good example of the one-of-a- kind dual-use product requested and acquired through the VPK program. Design concepts embodied in the hardware and associated documentation of the tester were copied to develop a Soviet counterpart. The original tester also could be used to help copy or reverse-engineer Western integrated circuits. Requirements for documents alone can command amounts as considerable as hardware; examples in- clude over 50,000 rubles (roughly $140,000 in 1980 purchase power equivalents) for documents on the US shuttle orbiter control system and over 50,000 rubles for high-energy laser developments. Over 200,000 rubles ($560,000) was approved for acquiring selected research documents on US antimissile defense concepts. Each year the VPK publishes a report based on the evaluation of the individual ministries. It includes aggregate statistics on numbers of technical docu- ments and samples (hardware) obtained, gross ruble savings, and the numbers and priority of requirements satisfied. This report is sent to the Chairman of the Presidium of the Council of Ministers and to the Central Committee of the Communist Party. Copies also are sent to headquarters elements of the collec- tion organizations. Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Figure 2 Examples of VPK Requirements, Mid 1970s - Early 1980s Requester (responsible for producing mainframe computers) Desired technology 1. 2. Ministry of the Radio Industry Technical documentation on IBM 370 computer models 145, 158, 168 and operating system data, not earlier than 1974. Information about new IBM projects. Organization charged with collection 3. KGB Origin or location of technology 4. US: Documents from the IBM firm. Joint requirement. Priority code A-I indicates technology needed for 1. Ministries of Aviation, Communications Equipment, and Electronics potential solutions of a problem in producing it future weapon system Industries, A-I, Most Critical 2 onents and programing devices for cruise missile Electronic com Desired technology Mutxinum funds allocated for collection of this item . 3. p digital computer memory. Samples and documents desired. 170,000 rubles Organization charged with collection 4. KGB Code B-I indicates suhswntiaf reduction in time and expenditure in production of new weapons Mayimum funds aillocated for collection of this item A nonintelligence organization also charged with assisting collection The mid-1970s VPK requirement shown above targets IBM equip- merit for Soviet military research and development. The Soviets copied the architecture of the IBM 360 and 370 systems to develop their Ryad series of computers. The late 1970s requirement is a very high priority for three reasons: it is identified as "most critical': it is needed to solve problems in producing a_future weapon system: and three ministries would benefit technically, economically, and jointly from its acquisition. The early 1980s requirement, for a Fairchild/Xincom semiconductor memory test system, is a perfect example of the one-of-a-kind dual-use product 2. Xincom monitoring and metering equipment for static and functional testing of semiconductor memory units. Sample and documents desired. - 3. 4,500,000 rubles - 4. Ministry of Foreign Trade, KGB (sample) and associated documentation requested for copying as well as for volume purchases for direct use in production lines. This tester was in fact acquired, and design concepts were copied, saving several hundred man-years of Soviet developmental effort. Soviet requirement data also include the firms and sometimes the names of persons who have the desired hardware and docu- ments. Some 3,000 to 5,000 new, amended, and reapproved require- ments for hardware, documents, or both are now issued by the Soviets each year. Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Table 1 Summary of Results of the VPK Program, Late 1970s and Early 1980s ? An average of over 5,000 Soviet military equipment and weapon system research projects per year in the early 1980s benefited from Western hardware and technical documents. Over half of these projects were in the electronics and the armor and electro- optics industries. ? Innovation, new concepts, new directions, higher technical levels of research, accelerated development of more advanced weapons, and the avoidance of major pitfalls are some of the key benefits to Soviet military scientific research projects. ? About 60 percent of that portion of document and hardware acquisitions considered to be the most significant to the Soviets was of US origin, although not necessarily collected in the United States. ? About 70 percent of the documents and hardware acquired in the 10th and so far in the I Ith Five-Year Plans, which were judged by the Soviets to be the most significant to their military research projects, probably were export controlled, embargoed, classified, or under some control by Western governments. ? In the early 1980s more than 3,500 requirements were levied each year for specific Western hardware, documents, or both, with roughly one-third satisfied each year; the other two-thirds still targeted. ? Some half a billion rubles are maintained each year for potential collections against these requirements (roughly $1.4 billion in 1980 purchase power equivalents). ? During the 10th Five-Year Plan (1976-80), over 3,500 require- ments were fully satisfied worldwide roughly 60 to 70 percent of these being fulfilled by the Soviet intelligence services (the KGB and the GRU) and surrogates among the East European intelli- gence services. Requirements fully satisfied during the 11th Five- Year Plan will exceed 5,000. ? Of the 3,500 satisfied requirements approximately 5 to 10 percent were judged by the Soviets as the most significant to military research projects. The Soviet intelligence services and surrogates among the East European services fulfilled about 90 percent of these most significant requirements each year. ? About half of all VPK requirements fulfilled in the 10th Five- Year Plan (1976-80) and thus far in the 11th Five-Year Plan (1981-85) were for two industries: electronics and communica- tions equipment. Successes and Benefits The VPK program is a Soviet success story (table 1). Over 3,500 specific collection requirements for hard- ware and documents were satisfied for the 12 industri- al ministries for just the 10th Five-Year Plan (1976- 80). About 50 percent of more than 30,000 pieces of Western one-of-a-kind military and dual-use hard- ware and about 20 percent of over 400,000 technical documents collected worldwide in response to these requirements were used to improve the technical performance of very large numbers of Soviet military equipment and weapon systems. The benefits and distribution by industry of the fulfilled requirements are shown in figure 3. ? About 50 percent of the 6,000 to 10,000 pieces of hardware acquired annually and 20 percent of the 100,000 documents acquired annually are used by the Soviets in transferring Western technology into their military research projects. ? In the late 1970s about 700 embargoed dual-use manufacturing, diagnostic instrumentation, and other dual-use products were acquired each year for copying embodied designs, reverse- engineering, and probably for selected direct use as key equip- ment in Soviet military production lines. ? From 1976 to 1980 the greatest savings in research project costs, almost one-half billion rubles (the 1980 dollar cost of equivalent research activity would be $800 million), were realized by two ministries the Ministry of the Defense Industry (armor and electro-optics) and the Ministry of the Aviation Industry. The Soviet manpower equivalence of these savings alone translates roughly into over 100,000 man-years of scientific research. These savings, however, may be biased. The ruble figures probably reflect operating costs salaries, bonuses, and sometimes savings in elimination of, for example, test range activity, but not capital costs. Although Soviet managers generally tend to inflate savings to enhance their role, the savings estimated in the VPK program appear to be conservative. According to the Soviets, about one-third of the VPK requirements are totally or partially fulfilled annually, strongly suggesting that Western industrial security, counterintelligence, export controls, and other efforts do have an effect. But each year the number of VPK requirements grows by about 15 percent. This is a strong indication that the expanding Soviet military industrial program continues to rely on Western technical solutions and advances. It also indicates increased collection success and user expectation. Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Figure 3 Rank Ordering of Soviet Industries by VPK Requirements Fulfilled, by Rubles Saved, and by Hardware Received, 1976-80 Rank by requirements fulfilled Idectronics Communications Aviation Radar and computers Chemical Shipbuilding Nuclear industry and lasers Projectiles and explosives Petroleum and petrochemicals About 50 percent of the VPK requirements that were fulfilled during the 10th Five-Year Plan for Western hardware and docu- ments were satisfied on behalf of two defense industries-electron- ics and communications. These are key areas where the Soviets' need for militarily significant technology and the West's need for better controls are greatest. The four industries receiving the most Western military hardware and dual-use products were electronics (over 6,000 pieces of equipment, a large percentage involving microelectronics), chem- ical (almost 4,000 pieces), petroleum/petrochemicals (over 1,500), and communications (over 1,500), ranked in that order, 800 The top four industries saving the most rubles in research project development costs in terms of manpower and other re- sources were the armor and electro-optics industry (almost 20 percent of the 1.4 billion rubles saved in research project costs) and the aviation, communications, and electronics industries. These four industries consistently appear to be the Soviet leaders in requesting, absorbing, and generally getting the most use out of Western hardware and documents. In some cases, such as in the armor area, the Soviets are using Western technology not to catch up, but to enhance a capability that already is equal to or better than that of the West. Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Five Years Gained in Developing the Next Generation principally in four ways. Ranked by priority, the VPK of Fire- Control Radars for Soviet Fighter Aircraft program: The Soviets estimated that by using documentation on the US F-18 fighter their aviation and radar industries saved some five years of development time and 35 million rubles (the 1980 dollar cost of equiva- lent research activity would be $55 million) in project manpower and other developmental costs. The man- power portion of these savings probably represents over a thousand man-years of scientific research effort and one of the most successful individual exploitations ever of Western technology. The documentation on the F-18 fire-control radar served as the technical basis for new lookdown/shoot- down engagement radars for the latest generation of Soviet. fighters. US methods of component design, fast-Fourier-transform algorithms, terrain mapping functions, and real-time resolution-enhancement techniques were cited as key elements incorporated into the Soviet counterpart. ? Redirected Soviet technical approaches in about a hundred projects each year for ongoing weapon systems and key military equipment, or resulted in the improvement of the weapons manufacturing processes. ? Initiated several hundred new short-term and long- term research projects each year on technical topics that had not been under consideration. ? Raised the technical levels of several thousand developmental projects each year involving military equipment, manufacturing, or design procedures. ? Eliminated or shortened phases of more than a thousand military research projects each year. This contributed to a substantial reduction-in a number of cases, two to three years in time needed to produce more technically advanced weapons and military equipment. Moreover, F-18 and F-14 documentation served as the impetus for two long-term research projects to design from scratch a new radar-guided air-to-air missile system. The documentation also was instru- mental in formulating concrete specifications to de- velop new Soviet airborne radar countermeasures equipment against the F-18 and F-14. Significant acquisitions of Western technology in- clude documents on fire-control radars for the F-14, F-15, and F-18 and documents on US ballistic missile defense concepts (table 2). In terms of broad defense programs, Soviet strategic missiles, air defense, tacti- cal forces, and weapons manufacturing capabilities have benefited the most from the VPK program. The annex has several hundred examples of specific Soviet weapons and military equipment benefiting from Western technology. Western technology collected each year in the late 1970s and early 1980s aided Soviet military industries The benefits vary from project to project. Western technology has assisted the Soviets in reducing their weapon acquisition cycle by up to two years for research projects in an advanced status. Acquisition of Western documents, for example, helped the Soviets cut by two years the time spent on researching a new generation of fuzes for munitions with a large kill radius and for self-aiming aviation cluster munitions. For projects in an earlier stage of research, the cycle can be reduced as much as five years. This considera- bly shrinks overall research time, reduces the amount of resources devoted to weapon system research, and allows diversion of those resources to other Soviet military research projects. A wide range of Soviet data demonstrates that bene- fits to military research projects have increased signif- icantly from the late 1970s to the early 1980s (figure 4) and have applied to thousands of research projects in all key defense industries. Measured in rubles, the Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Table 2 Selected Worldwide Soviet Acquisitions, Military Applications, and Collectors of Western Documents, Military Hardware, and Dual-Use Products Western Technology Acquired Strategic Missiles Documents on Cruise Missiles Using Radar Cruise Missile Guidance KGB, GRU Terrain Maps Documents on Heat Shielding Material for Ballistic Missile Warheads KGB, GRU Reentry Vehicles Documents on Ballistic Missile Defense Concepts Future Ballistic Missile Defense KGB, GRU Air Defense F-14, F-15, F- 18 Documents on Fire-Control Radars US Phoenix Missile Documents Semiactive Air-to-Air Missile KGB Infrared Radiometer Reduced Infrared Signature Aircraft KGB Fiber-Optics Systems Aircraft and Missile Onboard Communication GRU Systems New Air-to-Air Missile GRU General Purpose Naval And Antisubmarine Warfare Aircraft Carrier Steam Catapult Design Aircraft Launching System for New Aircraft GRU Documents Carrier IS MK 48 Torpedo Documents Antisubmarine Torpedo GRU Gamma Radiation Radiometer Nuclear Submarine Wake-Detection Trailing GRU System Acoustic Spectrum Analyzer Submarine Quieting GRU Powerful Acoustical Vibrator Submarine and Ship Sonars GKNT, GKES, Academy of Sciences Space and Antisatellite Weapons Documents on Systems and Heat Shielding of the US Space Shuttle Transit Naval Navigation Hardware First-Generation Space-Based Naval Radionavigation System Digital Signal Processing for Counterpart Others Satellite System high-Energy Chemical Laser Documents Space-Based Laser Weapon KGB System 101 Processing Equipment Digital Processing and Video for Space-Based Others Reconnaissance; Missile, Bomb, and Remotely Piloted Vehicle Command Guidance Tactical Forces International Radar Conference Documents Synthetic Aperture Radar for Aircraft Detection GRU Ground Support Equipment for US TOW Anti- Countermeasure System GRU tank Guided Missile US Copperhead Laser-Guided Artillery Documents Laser-Guided Missile Documents Portable Antiaircraft System KGB Infrared Imaging Subsystem Designs Fire-Control System of Future Tank KGB Millimeter Radar Documents Antitank Missile GRU Pressure Measuring Instruments and Documents Advanced Modeling for New Artillery Projectiles KGB, GRE Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Table 2 Selected Worldwide Soviet Acquisitions, Military Applications, and Collectors of Western Documents, Military Hardware, and Dual-Use Products (continued) Western Technology Acquired Manufacturing and Technology Kevlar 49 Fiber Documents for Missiles Improved Missile Development KGB, GRU Complete Set of Manufacturing Equipment for Copied for I I Production Assembly Lines for Ministry of Foreign Trade Printed Circuit Boards Strategic Missile, Armor and Electro-Optics, and Radar Industries DTS-70 Printed Circuit Board Testing System Military Microelectronic Production System KGB Fiberglass Manufacturing Technology High-Pressure Airtanks for Submarines KGB, GRU, Ministry of Foreign Trade Computer Disk Memory Systems Military Ryad Series Disk Drives KGB Bubble Memory Technology Tactical Missile Onboard Memories Others Technical Documents on Tests of Improved Structural Protection of Warships KGB Cold-Rolled Steel High-Accuracy Three-Dimension Coordinate Ministry of Foreign Trade, Measuring Machine GKNT. GKES, Academy of Sciences savings doubled between 1976 and 1980 (figure 5) and still are expanding in the 1 1 th Five-Year Plan. The statistics on benefits also point to a massive diffusion of' Western technology into Soviet military equipment and weapons. Figure 6 shows how the more than 5,000 military research projects benefiting in the early I980s were distributed by industry. According to these rough indicators, the electronics, armor and electro-optics, and aviation industries are benefiting the most from Western technology. Overall, the acquisition of Western technology per- mits the Soviets to field more sophisticated, versatile, and effective weapons. The basic time for fielding these advanced Soviet weapons, though, remains about the same. It also provides new military capabili- ties and allows additional resources to be used for the development of additional advanced weapons con- cepts. The acquisitions also serve to lighten somewhat the burden of continuing growth in Soviet research and defense spending. Soviet copying and reverse-engineering of Western military and dual-use equipment are major character- istics of the VPK program. Indeed, the majority of VPK requirements for "technology" appears to be for hardware only. In the late I 970s alone, the Soviets acquired about 700 embargoed one-of-a-kind dual-use products each year principally in the area of manufac- turing, inspection, instrumentation and test equip- ment, including key microelectronics production and test equipment. These products were used for making Soviet counterparts or possibly were for use as key manufacturing or test equipment that completed pro- cess lines. Examples included computer-controlled integrated circuit testers, aircraft engine vibration control systems, and narrow-band analyzers for sub- marine quieting. These practices indicate Soviet deficiencies are in the design, testing, and integration of technologically advanced military systems, not in basic research and applied science. They fall short in the engineering of a Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Figure 4 Technical and Time Benefits to Thousands of Soviet Military Research Projects From Western Technology lire 1970s Inal-occr 4.000 Project, whose technical approaches were redirected I'inlect, whose research st.ige. were eliminated or shy rimed New research projects ,tarred Project, wh,e technical level, were raised The benefits to the Soviet military research establishment from acquisitions of Western technology are far greater than previously believed. Virtually every Soviet long- and short-term research project for military systems-well over 4,000 in the late 1970s and well over 5,000 in the early 1980s--is benefiting from the docu- ments and hardware of at least a dozen Western countries. (See figure 6 for a breakout of how these projects were distributed by industry.) device, technologically advanced by Western stan- dards, into a useful piece of militarily applicable hardware producible in large quantities. The profile of the VPK program (as well as the trade diversion program) can be used to better define militarily critical technologies as well as better ways to counter Western losses. Both appear principally aimed at acquiring products and technical data. Both show that protecting dual-use products is just as important as protecting the related design know-how. Equipment sales divorced from the transfer of know- how do have long-term significance for the Soviets. The evidence indicates that equipment transfers, both large batch acquisitions and individual samples used I'arly 1980, Total= over 5,000 Projects in the VPK program are divided into the four major categories shown above. Projects with redirected technical ap- proaches and new projects represent the most significant benefits through adoption of innovations and new directions for military systems. Major pitfalls are thus avoided. Projects whose technical levels were raised and those whose stages were eliminated or shortened represent improvements in the military state of the art of the Soviet Union and an acceleration in the time when more advanced subsystems are ready for new and future weapons. for copying embodied design concepts and for reverse- engineering, generally outstrip acquisitions of "tech nology" in quantity and are of more immediate value to the Soviets. VPK Collectors and Sources Analysis of reliable data indicates that in the VPK program the Soviet Bloc intelligence services (the Soviet Committee for State Security (KGB), the Chief Intelligence Directorate of the Soviet General Stall (GRU), and their surrogates among the East Europe- an intelligence services) are the collectors most often tasked and the most successful. Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Figure 5 Ruble Savings From Only a Part of Soviet Western Technology Acquisitions \t Ic,t t I4 l,illiom nihle, in "mn'_ on elected hmler(' during the loth I ive)car Plan The above savings generally are conservative estimates by the Soviets resulting from the elimination of stages of military research and design projects, the reduction in time to carry them out, and the adoption of new technical approaches. The savings are not cumulative. That is, a 20-million-ruble annual saving from the acquisition of US and other Western fiberglass plastics production technology used in manufacturing high-pressure air tanks for submarines was counted for one year only, the year of acquisition. Roughly 400 million rubles ($640 million) were saved in 1980 for only a portion of the Western technology acquired. Most of these savings were in long-term military research projects for weapons of the late I980s and early I990s. They therefore were most likely given in terms of manpower savings. By this measure several tens of thousands of Soviet man-years of scientific research effort were saved in 1980. During the late 1970s and early 1980s the Soviet intelligence services acquired, through their own ef- forts and those of the surrogate East Europeans, about 60 to 70 percent of all materials collected in the overall VPK program each year (figure 7). More important, these intelligence services were involved in collecting worldwide about 90 percent of the informa- tion judged by Moscow as most significant and used Soviet collectors have easily acquired many types of Western integrated circuits (1Cs) for reverse engineer- ing. Indeed, most Soviet ICs can be traced to a Western original. One of the best examples is their KR580IK80A microprocessor, which is a modified version of the Intel Corporation 8080A 8-bit micro- processor used in many US military systems. In this case, the Soviets even copied the equivalent US part number to avoid confusion (note the KR5 80 IK 80A versus the US 8080A). Furthermore, the evidence clearly shows that Soviet ICs known as LOGIKA-2 and series 133/155 were directly copied from the Texas Instruments 5400/7400 family. These ICs have been used in Soviet strategic and tactical military systems since the mid-1970s to provide important qualitative im- provements. The more advanced Western fabrication equipment acquired by the Soviets in recent years has been used to produce copies of sophisticated Western ICs for their latest generation of weapons. If the Soviets succeed in acquiring the next generation of materials, equipment, and parts, their military capa- bilities will continue to improve in the area that is the major strength of the West quality. The USSR's practice of reverse-engineering, however, may soon run into problems. As US and Japanese ICs become more complex, reverse-engineering will re- quire: (a) tracking hundreds of thousands of connec- tions; (b) understanding how they all fit together; and (c) mastering the complex processing steps used in production. Thus, copying such circuits will require not only much more sophisticated Western equipment but also much more time to duplicate each circuit, causing their overall microelectronics gap with the West to widen. Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Figure 6 Rank Ordering of Industries by Soviet Military Research Projects Benefiting From Western Technology, Early 1980s Electronic, Armor and clccirn-optics As lotion Missile, and pitce Pr i1c iIcs and explosive, Rndar, and conipuier I I Irctrie rI cyuipntent tihiphmlding C Nuclrn industrc and li crs I'ctmlcuni and Ix oochcmical, l he assimilation of Western technology into Soviet industries conducting military research is considerable. The greatest benefi- ciaries were the electronics and armor and electro-optics industries, which accounted for over 50 percent (equaling thousands) of all military research projects benefiting from Western technology in the early 1980s. E Projects whose technical levels were raised n Projects whose research stages were eliminated or shortened L_ -i Project whose technical approaches were redirected plus new research projects started The general distribution points out the rather broad effect that Western documents and hardware have just on raising the technical levels of Soviet military research. This is particularly true for the top three industries, where advanced technology and innovative design concepts play a significant role in weapon developments. Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Figure 7 Soviet Military Requirements Satisfied by Principal Collection Agencies in the Overall VPK Program, Late 1970s and Early 1980s Minntn oI ' reien I r,R1e The distribution shows that the KGB and the GRU (and their surrogates among the East European intelligence services) were the main collectors in the overall VPK program. They were involved in satisfying roughly 60 to 70 percent of all VPK requirements completely fulfilled during the late 1970s and early 1980s. (Per- centages do not add to 100 because several agencies contributed to fulfilling some of the same requirements.) Although not evident from the above data, both the KGB and the GRU significantly increased their efforts in the early 1980s in many hundreds of military research projects (figure 8). Both the KGB and the GRU levy some of the VPK requirements on surrogates among the East European counterpart services. The KGB probably owes a high- er percentage of its collection to these East European civilian intelligence services than does the GRU to its East European counterparts. All use human assets worldwide. I Yeurlc averugc in lute 1970, Yearly average in early 1951k because the average number of requirements fulfilled so far in the early I980s (11th Five-Year Plan) increased about 50 percent over the late 1970s. The State Committee for Science and Technology (GKNT) and associated collectors surprisingly were the third main collecting entity, satisfying a relatively large percentage. Figure 8 shows, however, that they were credited with satisfying about 5 percent of a selected subset of acquisitions, those judged by the Soviets to be the most significant to their military research projects. Coordination with the East European services is con- ducted through the liaison functions at both KGB and GRU headquarters as well as through KGB and GRU advisers in the various Warsaw Pact intelligence services. Since the mid-to-late 1970s the surrogates Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Declassified and Approved For Release 2011/11/02 : CIA-RDP90GO1359R000200020014-1 Figure S Most Significant Acquisitions Satisfied by Principal Collection Agencies. Late 1970s and I'.arly 1980s I'~c KI~R and (II