ACCESSION NUMBER:00000
FILE ID:96100303.ECO
DATE:10/03/96
TITLE:03-10-96  SENATE PASSES BILL CRIMINALIZING ECONOMIC ESPIONAGE

TEXT:
(Clinton expected to sign)  (330)
By Bruce Odessey
USIA Staff Writer

Washington -- The Senate has given final passage to a bill supported
by the Clinton administration imposing criminal penalties for theft of
U.S. companies' trade secrets by agents of foreign governments,
clearing it for the president's signature.
On a voice vote October 2, the Senate passed the Economic Espionage
Act of 1996, which passed in the House of Representatives by a 399 to
3 vote September 17.

Existing federal law setting criminal penalties for theft of property,
written in the 1930s, applies to physical property but not to trade
secrets, which are intangible assets more common to the 1990s economy
like plans, formulas, inventions and databases.
The Economic Espionage Act thus adds a new offense to U.S. law by
prohibiting the theft of trade secrets. Under the bill anyone
convicted of stealing a U.S. trade secret to benefit a foreign company
or foreign government would be subject to a maximum of $10 million in
fines and 25 years in prison.
FBI Director Louis Freeh testified that the FBI currently is
investigating allegations of economic espionage conducted against U.S.
companies by individuals or organizations from 23 countries -- many of
them enjoying friendly relations with the United States.
"For years now, there has been mounting evidence that many foreign
nations and their corporations have been seeking to gain competitive
advantage by stealing the trade secrets, the intangible intellectual
property of inventors in this country," Senator Arlen Spector said
October 2 on the floor of the Senate.

"The Intelligence Committee has been aware that since the end of the
Cold War, foreign nations have increasingly put their espionage
resources to work trying to steal American economic secrets," he said.
"Estimates of the loss to U.S. business from the theft of intangible
intellectual property exceed $100,000 million. The loss in U.S. jobs
is incalculable."
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