Protecting Economic Well‐Being: The Paradox of Economic Espionage
| Published date | 01 March 1999 |
| Pages | 70-72 |
| DOI | https://doi.org/10.1108/eb025922 |
| Date | 01 March 1999 |
| Author | Kirstie Best |
| Subject Matter | Accounting & finance |
Journal of Financial Crime — Vol. 7 No. 1 — Espionage
ESPIONAGE
Protecting Economic Well-Being: The Paradox of
Economic Espionage
Kirstie Best
The Security and Intelligence Services (known as MI5
and MI6) have statutory authority to act in respect of
the economic well-being of the UK. The Security
Service Act 1989 defines MI5's role as being to safe-
guard economic well-being,1 while the Intelligence
Services Act 1994 empowers MI6 more specifically
to obtain and provide information in relation to this
interest.2 Both organisations are limited, in this
context, to operating in respect of the actions or inten-
tions of persons outside the British Isles. This concern
with the protection of economic well-being is not a
recent development. As long ago as the 18th century,
Parliament was sufficiently concerned by the suborn-
ing of skilled British workers by the French to pass
legislation against industrial espionage. At the same
time,
Britain was sending intelligence agents into
France to gather similar information. The state and
private industry worked closely together to protect
national interests from espionage, and to seek out
intelligence on foreign industrial techniques.4 The
nature of the intelligence sought covered purely com-
mercial targets, such as wool manufacturing and clock
making,5 as well as military technology, such as
shipbuilding.6 This brief historical comparison high-
lights issues which arc still pertinent. First, the
shared interest that government and industry have
in acquiring intelligence in this area. Secondly, that
such espionage has a twofold objective of gathering
information relating to both commercial and mili-
tary-industrial matters.
The statutory term 'economic well-being' is open
to various interpretations. It can be construed as relat-
ing to the protection of matters which are essential to
the economy, and are also susceptible to interference
by foreign governments or companies. This would
include commodities such as oil.7 In this context,
the Services may legitimately act to protect the eco-
nomic interest, since the supply of strategic materials
is important enough to be also considered as a matter
of national security. That is, interference with them
could undermine the fundamental structures of the
state,
the protection of which forms the primary
rationale for the Security and Intelligence Services.
This interpretation of economic well-being would
also legitimise other activities, such as the monitoring
of weapons sales to unstable regions, since this could
impact on the national security of the UK if the
availability of such weapons threatened strategic
supplies.
Economic well-being can also be conceptualised
separately from national security. This would justify
actions by the Services in respect of matters which are
not extreme enough to endanger the existing struc-
ture of the state, but which do have a deleterious
effect on the economy.8 It has been suggested that
MI6 now has the statutory authority to be involved
in the maintenance and development of effective
trading conditions.9 This could cover a wide range
of activities, from generally assisting in the enhance-
ment of diplomatic relations to more specific activ-
ities,
such as the protection of economic stability
from threats caused by the manipulation of the finan-
cial markets. It would be problematic to include this
under the heading of national security, yet it could
feasibly be seen as vital to economic well-being. For
example, currency speculators contributed to the
collapse of sterling on Black Wednesday in
September 1992, which caused losses of £660m in a
single day.10 Thus, the Security and Intelligence
Services could have a role in gathering and dissemi-
nating intelligence to enable the Bank of England
or the government to take measures to protect finan-
cial interests, or to ameliorate the effects of potentially
damaging financial speculation.
The concept of economic well-being is therefore
capable of
a
broad application, covering both matters
of national security and purely economic matters
which arc not pivotal to the security of the state but
arc important to its effective economic functioning.
The distinction between these interpretations is finely
Page 70
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