Security service: Hostile interest in Estonian business secrets on the rise

TALLINN – The international sanctions policy is having a real impact on the Estonian business environment and Estonian business operators directly, the Internal Security Service (ISS) says in its annual review published Tuesday.

In addition to the impacts of the coronavirus pandemic, economic development is being put under strain by the aggression of the Russian Federation in Ukraine, which has put supply chains as well as traditional target markets under pressure or caused disruptions in them, and has changed people's consumption habits. These reasons have highlighted in the European Union the need to understand who is behind the companies operating in areas important for the stability and development of the economy and with what objectives foreign capital is looking for investment opportunities, the ISS said.

According to the ISS, they are monitoring foreign investments much more closely, with good reason, especially in sectors of strategic importance. During last year, for example, the ISS  noticed growing interest of foreign countries in technological know-how in Estonia, especially in the strategic sectors and sectors producing goods for which there is growing demand.

Both technical tools and staff are used to access information of interest. It is important for the ISS that companies operating in Estonia and their know-how are protected against potential information theft as well as physical and political influence.

There are industrial companies and research institutions in Estonia that are doing world-class development work on new technologies or strategically important raw materials. 

The ISS warns that when dealing with European or third-country journalists who suddenly appear behind one's door and who for some reason are keen to know about the work of their particular company or institution, it is worthwhile to do some research on their background and past activities, including their journalistic activities.

According to the ISS, the same applies when a company's employees start receiving phone calls from research companies or think tanks that offer money, for example, for a short interview about the company's activities. In this context the ISS pointed out that suspicious contacts must be reported.

The ISS urges companies to report such cases and urges them to explain to their employees  what is a trade secret for their company and how to protect it.

"It is essential to prevent the influence of the Russian Federation and the People's Republic of China on critical infrastructure. It is important to understand the background of potential foreign investments, to be aware of possible state-directed interests and to avoid the negative impact of high-risk investments on the economy and security," the ISS said.

Estonia, as well as other EU countries and our international partners, need a functioning mechanism to screen out and deter hostile foreign investment, thus improving conditions for fair competition based on economic objectives.

Estonian companies can also be used as a political lever to lobby the government or the public in the interests of, for example, the Russian Federation. It is also prudent to refrain from such partnerships, the ISS said.