President Signs New Espionage Law

Recently, it has been estimated that economic espionage crimes cost American businesses approximately $24 billion a year in losses. The federal government has long been frustrated in its attempts to combat this type of crime, since no federal criminal statute directly addresses economic espionage. On October 11, 1996, however, the President signed legislation (HR 3723) to combat this problem by criminalizing the theft of trade secrets. The bill prohibits the wrongful copying and/or controlling of a trade secret with the intent to divert that secret to anyone but the owner. Such an offense is now punishable by up to 10 years imprisonment for individuals and up to $5 million in fines for organizations. If the offense benefits a foreign government or foreign instrumentality, itis punishable by up to 15 years imprisonment, and up to a $500,000 fine for individuals and up to a $10million fine for organizations. Because a significant portion of these crimes is committed by agents of foreign governments or foreign instrumentalities, the bill applies to conduct inside and outside the United States. An act outside the United States is proscribed if an act in furtherance of the offense was committed in the United States. Also included in the bill are provisions for criminal forfeiture of property and injunctions to preserve confidentiality of trade secrets in judicial proceedings.