U.S. Concerned Over Industrial Espionage : Spying: Illicit acquisition of trade secrets may cost Americans billions of dollars a year.

Industrial spying in the United States by foreign countries may cost Americans billions of dollars a year and pose “a serious national security concern,” President Clinton said Tuesday.

In a report to Congress, Clinton said he is considering options to strengthen current federal laws to crack down on industrial spying and possibly establish new laws that would forbid theft of intellectual property and proprietary information.

Without offering specific examples, the report said there has been an increase in illicit acquisition of U.S. trade secrets by foreign intelligence services and government-sponsored collectors, including businesses. “The aggregate losses that can mount as a result of such efforts can reach billions of dollars per year, constituting a serious national security concern,” it said.

While much of the spying is conducted by traditionally hostile foreign intelligence services, “others are either longtime allies of the United States or have traditionally been neutral,” the report said without identifying any country by name.

The primary industrial targets of foreign spies are companies involved in biotechnology, aerospace, telecommunications, computer software and hardware, advanced materials and coatings--including stealth technologies--energy research, defense and armaments technology, manufacturing processes and semiconductors. “Foreign collectors have also shown great interest in government and corporate financial and trade data,” the report added.

The findings were in the first report to Congress on foreign economic information collection and industrial espionage. Its preparation was required under the 1995 Intelligence Authorization Act, reflecting deepening concern in Congress about industrial spying.

The administration released an unclassified report to the public but provided Congress with a classified version offering secret details.

Increasingly, law-enforcement agencies and counterintelligence services are devoting their resources to industrial espionage.

“Resources in these areas will likely have to be increased, especially if the theft of proprietary information is made a federal violation, since the result would be an increased number of cases requiring more trained investigators and analysts,” the report said.

With a country’s stature often measured by its economic and industrial capacity, foreign government ministries--such as those dealing with trade and finance--and major industrial sectors are increasingly faced with playing a more prominent role in espionage.

“Just as a foreign country’s defense establishment is the main recipient of U.S. defense-related information, foreign companies and commercially oriented government ministries are the main beneficiaries of U.S. economic information,” the report said.

The report itemized government efforts to detect and prosecute criminal activities and foreign intelligence operations which target U.S. industry.