70% of technology leaks go to China, yet Lee Jae-myung government's six measures mention neither 'China' nor 'espionage'

SEOUL

Overseas leaks of industrial technology uncovered by the National Intelligence Service have reached 107 over the past five years. Kim Yong-hoon, director general for intellectual property protection cooperation at the Ministry of Intellectual Property, which runs a technology police unit, said in February this year that "70% is roughly China" among the countries where overseas technology leaks occurred. Even so, the six tasks for responding to technology leaks announced on Oct. 19 by the Lee Jae-myung government's Ministry of Trade, Industry and Resources included neither the name of China nor the criteria for applying the espionage offense that were called for in the parliamentary audit. The ministry finalized the tasks at the 76th Industrial Technology Protection Committee meeting, chaired by Minister Kim Jung-kwan, at 10 a.m. that day in the main conference room of the Korea Trade Insurance Corporation in Seoul. The government plans to put the tasks into amendment bills to the Industrial Technology Protection Act and the National Advanced Strategic Industries Act, submit them in October, and reflect them in the "6th Comprehensive Plan for Industrial Technology Protection" within the year.

Despite government measures, around 20 cases a year have leaked out for five years running

The NIS detection figures released by the ministry are 22 cases in 2021, 20 in 2022, 23 in 2023, 23 in 2024 and 19 in 2025. The ministry said in a press release, "Despite the government's efforts to prevent technology leaks, the risk of technology leaks surrounding our advanced industries such as semiconductors and displays still persists."

An amendment to the Industrial Technology Protection Act strengthening penalties passed the National Assembly plenary session on Dec. 27, 2024. The amendment raised the maximum fine for leaking national core technology overseas from 1.5 billion won to 6.5 billion won, and the cap on punitive damages from three times to five times the amount of damage. The elements of the overseas leak offense were changed from requiring a specific purpose to requiring intent, and brokers who introduce, arrange or induce leaks can now also be punished. In 2025, the year after the amendment passed the National Assembly, 19 cases were detected.

On the same day, Dec. 27, 2024, the 58th committee meeting, chaired by Minister for Trade Cheong In-kyo in the main conference room on the 11th floor of the Korea Trade Insurance Corporation, deliberated on the draft 5th Comprehensive Plan for Industrial Technology Protection and five items on export approval for national core technologies. The government also said at the time that it would add industrial technology leak crimes to the cases subject to concentrated court jurisdiction to raise the expertise of trials. The opening remarks of that meeting also carried a warning: "The number of overseas industrial technology leaks detected through November this year is 21, and the leak trend continues." The government has now said it is "preparing [the 6th Comprehensive Plan] one year ahead of schedule, aiming to announce it within the year." It is drawing up a new plan again just two years after releasing the 5th plan.

The committee is a deliberative body established under Article 7 of the Industrial Technology Protection Act and is chaired by the minister of trade, industry and resources. The meeting was attended by vice-minister-level members from 15 ministries and agencies, including the Ministry of Science and ICT, the Ministry of Justice, the Ministry of SMEs and Startups, the Ministry of Intellectual Property and the National Intelligence Service, as well as 10 civilian members. The ministry said it also invited officials from the Korean National Police Agency, the Serious Crimes Investigation Agency, the Public Prosecution Service and the Defense Acquisition Program Administration, putting a "government-wide cooperation system" into operation.

70% of leaks go to China, but the country's name is missing from the policy document

Kim Yong-hoon, director general for intellectual property protection cooperation at the Ministry of Intellectual Property, said at a Feb. 12 briefing on a secondary battery technology leak case, "As for the countries where most overseas technology leaks occur, 70% is roughly China." Asked which country the technology in that case had leaked to, Kim did not directly disclose the nationality of the partner company, but citing the 70% statistic said, "Seen from that perspective, it could be specified as China, which has competitiveness with us."

In the case, a foreign national, A, an employee of an overseas partner company of a major domestic secondary battery company, obtained information on all-solid-state battery development and on the development and evaluation of anode materials through B, a senior researcher at the victim company. The leaks continued for more than five years, from November 2019 to April 2025. There were seven data transfers, eight video conferences and seven on-site consulting visits. B received more than 200 million won in cash in return. The Ministry of Intellectual Property's technology police arrested A in January this year. It is the first case of a foreign national being arrested in the secondary battery sector.

In this announcement, the ministry released leak figures only by year and did not disclose a breakdown by country. The six tasks described the threat only as damage to "national security and the competitiveness of domestic industry," and did not mention any specific country.

Espionage application criteria sought in the parliamentary audit disappear from the tasks

The measures came as a response to issues raised at the ministry's parliamentary audit on Oct. 6. According to reference material released by the ministry on Oct. 7, the audit called for expanding technology protection personnel and budgets, introducing special judicial police powers, comprehensive management of leak statistics with the NIS and the Korean National Police Agency, setting criteria for applying the espionage offense to technology leak crimes, and making confirmation of industrial technology mandatory during trials.

On Oct. 7, the day after the audit, the ministry first released four policy directions: strengthening security capabilities at small and medium-sized enterprises and universities, expanding recovery of illicit proceeds, preventing evasion of punishment at trial, and strengthening the government-wide response. Minister Kim said at the time, "I agree with the parliamentary audit's point that we need to respond more strictly to technology leaks that threaten our industry's competitiveness and national security." In the same material, the ministry listed setting criteria for the espionage offense as an issue raised in the audit, but there were no measures on it in either the four policy directions or the six tasks released 12 days later. What made it into the six tasks were the introduction of special judicial police, information sharing and confirmation of industrial technology during trials.

The legal provision to apply is already in force. The National Assembly passed an amendment to the Criminal Act on Feb. 26, and the government promulgated it as Act No. 21450 on March 12. The new Article 98-2 (espionage for foreign countries, etc.) punishes anyone who, on the orders or instigation of "a foreign country or an equivalent organization," spies on, collects, leaks, transmits or brokers national secrets, or aids in doing so, with "imprisonment for a limited term of at least three years." It took effect on Sept. 13. Article 98, Paragraph 1, which punishes espionage for an enemy state, retained "death, life imprisonment or at least seven years in prison," and Article 102 provides that "a foreign country, etc. hostile to the Republic of Korea shall be deemed an enemy state." This committee meeting was held a little over a month after the new provision took effect, but the ministry's press release contains nothing on how the provision will be applied to technology leak cases.

On the same day, the Taiwan High Prosecutors Office indicted four people, including former soldiers, on charges of taking money from the Chinese side and passing on military secrets. Prosecutors included in the indictment Article 20, Paragraph 2 of the Criminal Code of the Armed Forces, which punishes anyone who leaks military secrets to the enemy with death or life imprisonment, and asked the court to impose heavy sentences on all four. The illicit gains by defendant disclosed by prosecutors add up to NT$1,829,403. Two of the defendants were active-duty soldiers at the time of the offenses, and one was a public servant. Payments sent by the Chinese side went into a cryptocurrency wallet in the name of a discharged soldier, were converted to cash through over-the-counter dealers, and were then deposited into the bank accounts of the former soldier and the public servant. Article 2 of Taiwan's National Security Act explicitly names the "mainland area" as a party to which leaking and spying are prohibited.

Government promises only 'public debate' on lenient punishment, with prison terms in 6.2% of cases

According to the rationale of an Industrial Technology Protection Act amendment bill submitted in August 2024 by Rep. Kwon Hyang-yeop and 17 other lawmakers, prison sentences accounted for 6.2% of first-instance guilty verdicts for violations of the Industrial Technology Protection Act from 2017 to 2021. Acquittals and suspended sentences accounted for 74.1%. Rep. Jung Yeon-wook and 15 other lawmakers also submitted an amendment that same month to raise statutory penalties, saying actual sentences were low. Related bills, including an amendment submitted by Rep. Ko Dong-jin and 19 other lawmakers, were combined into a committee alternative bill and passed in December of that year.

As its sixth task, the government said it would "raise the actual level of punishment by bringing to public debate the need to raise the Supreme Court's sentencing guidelines and create sentencing guidelines for fines." Sentencing guidelines are set by the Supreme Court's Sentencing Commission. The government did not say by when or to what level it would propose raising the sentencing guidelines. The government also said it would allow courts to ask the ministry during trials to confirm whether the technology in question is industrial technology, so that leakers cannot escape punishment.

The fourth task is economic sanctions. The government said it would broaden the scope of confiscation and collection of criminal proceeds and include at least the victim company's technology development costs in damages. In the Oct. 7 reference material, the ministry also proposed allowing courts to commission specialized institutions to assess damages. The government said this would "fundamentally block the intent to leak technology." Even in the year after an amendment raising the fine cap to 6.5 billion won and the punitive damages cap to five times passed the National Assembly, 19 cases were detected.

Measures on key personnel moving abroad come with a 'fundamental rights' caveat and remain under review

In presenting the issues raised in the audit, the ministry put the overseas job moves of key semiconductor personnel first. In addressing this issue in its third task, the government first attached the caveat that it would "seek institutional improvements with related ministries within a scope that minimizes the possibility of infringing constitutional fundamental rights such as freedom of occupation."

The government decided to prepare incentives based on demands made by companies at on-site meetings, and to review providing information so that companies can check whether key personnel have changed jobs. It did not say what information would be given to whom or how large the incentives would be.

In the February secondary battery case, too, the technology passed to an overseas partner company through a senior researcher at the victim company. The suspects were charged with violating the Unfair Competition Prevention Act, the National Advanced Strategic Industries Act and the Industrial Technology Protection Act, and with offering bribes in breach of trust. No espionage charges were applied. The Ministry of Intellectual Property said, "Through this case, we were able to prevent the worst-case scenario in which the core information on all-solid-state batteries was completely handed over," adding that had the core technology been handed over, "the scale of the damage would have been beyond prediction."

Technology police already exist, yet the trade ministry creates another special judicial police unit

The fifth task is giving the ministry special judicial police powers over technology leaks. Special judicial police is a system in which administrative officials investigate like police, limited to crimes in specific fields.

In the technology protection field, the Ministry of Intellectual Property's Technology and Design Special Judicial Police Division is already active as the technology police. The February secondary battery case was also investigated by this unit together with prosecutors. The technology police said that with a case in which suspects were arrested and indicted in July last year and this case, they had prevented leaks of core technology from two domestic secondary battery companies. The NIS and the Korean National Police Agency also handle technology leak cases. The ministry has separately operated a government-wide joint response team on technology leaks and an industrial technology protection policy council.

The ministry did not disclose the staffing and budget of the new special judicial police or the division of roles with the existing technology police. The audit called for more technology protection personnel and budget, but this announcement contained no personnel or budget plan. What the Oct. 19 tasks contained was "promoting information sharing between agencies." In the Oct. 7 reference material, the ministry said it would create a basis for requesting data on the scale of damage and leak methods from intelligence and investigative agencies and promote information sharing with the NIS, the Korean National Police Agency, the Ministry of Justice and others.

National core technology export approval put on the same meeting's agenda without disclosure of what is covered

There were three agenda items at the meeting. "Status of overseas leaks of industrial technology and response directions" and "Results of simplified export screening for national core technologies" were reported, and "Approval of national core technology exports (draft)" was put up as an item for decision. The ministry did not disclose which companies' technologies were subject to export approval or how many cases of simplified screening there were. The meeting was scheduled for one hour, from 10 a.m. to 11 a.m.

Two years ago, the 58th committee meeting disclosed its five export approval items by sector: two in semiconductors, two in secondary batteries and one in automobiles and railways. The opening remarks at that time also said competitiveness should be strengthened "by easing excessive technology protection burdens."

The first task is broadening the scope of government review to include the sale or withdrawal of overseas subsidiaries and mergers and acquisitions (M&A) carried out by foreigners through domestic corporations. A bill with the same intent was already introduced in the National Assembly two years ago. An amendment submitted in August 2024 by Rep. Kim Sung-won and nine other lawmakers would have the minister immediately order a halt if national core technology is exported or an overseas M&A is carried out without approval or notification, and impose a compliance penalty if the order is not followed. It also proposed introducing a system for confirming possession of national core technology and a registration system for holding institutions, and creating a legal basis for designating a technology security center. The ministry said that since last year it has introduced an ex officio determination system for possession of national core technology through amendments to the Industrial Technology Protection Act.

The list of national core technologies is revised every year. In July 2024, the ministry newly designated four technologies, including hydrogen combustion design and manufacturing technology for power generation gas turbines and body design, analysis and manufacturing technology for high-speed rail vehicles, and lifted three, including nuclear power plant passive auxiliary feedwater system technology, increasing the number of national core technologies from 75 to 76. In the same revision, it subdivided and specified the scope of 24 technologies in eight fields, including semiconductors, electrical and electronics, automobiles, railways and shipbuilding. In October 2025, it newly designated three technologies related to multilayer ceramic capacitor (MLCC) manufacturing, zinc smelting and satellite radar (SAR). While changing the scope and wording of 15 technologies in six fields, including semiconductors, shipbuilding and information and communications, it removed ultra-large container ships from the scope of high-value-added ship technology in the shipbuilding field. The ministry's policy is to continue lifting designations for technologies that no longer need as much protection.

Minister repeats call to 'punish one to warn a hundred' as amendments await October submission

"Technology leaks are a serious problem that can destroy in an instant the industrial competitiveness that the state and companies have built up over a long time and at enormous cost, and even threaten national security, so they can never be taken lightly," Minister Kim Jung-kwan said at the meeting. "The government will implement the submission of legal amendments and the announcement of the comprehensive plan without a hitch, and will surely protect the nation's industrial technology," he added.

Kim also said on Oct. 7, right after the audit, "We will punish leakers severely as a warning to others and fundamentally block leak attempts themselves." Two years ago, too, the government set out the same goal while raising the caps on fines and damages.

The second task, preventing technology leaks at small and medium-sized enterprises and universities, was also announced without specific figures. The government said it would increase the frequency and content of fact-finding surveys, allow it to issue orders to companies that do not carry out corrective measures, and strengthen vulnerability assessments of partner companies with weak security and security management of national core technology research and development (R&D) projects. The Oct. 7 material said it would expand support for building security facilities and consulting at SMEs and universities, and strengthen inspections of companies against new threats such as the use of artificial intelligence (AI) and overseas expansion. Neither document gave the number of companies to be supported or the budget.

The government plans to submit the amendments to the Industrial Technology Protection Act and the National Advanced Strategic Industries Act containing the six tasks to the National Assembly in October.

Sources (KST)

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