Cooperation between Defense Industrial Complexes of the United States and the Republic of Korea

Exports of technology and items containing technical information are regulated by the United States government. United States export control regulations exist to help protect national security, economic, and political interests. United States defense industry companies manufacture products and develop technologies and information that the United States has a particular interest in protecting. Therefore, defense industry companies must comply with United States export control regulations when exporting items and information to their international partners and customers. An “export” not only includes shipments of hardware or other tangible assets to foreign end-users but also includes the sharing of certain types of information with foreign recipients in the form of phone conversations, emails, meetings, conferences, presentations, and so on. Many employees of defense industry companies travel internationally with company issued laptops and cellphones containing company information that could be viewed by foreign persons. All of these activities are considered exports and may require prior authorization from the United States government under export control regulations. Failure to follow export regulations could result in a violation requiring a report to the United States government that may result in civil penalties or criminal charges. Additionally, intentional as well as unintentional releases of information to certain foreign persons could be detrimental to a defense industry company’s business and reputation and may even result in security concerns for the United States. Although the government has an interest in regulating defense industry companies’ technology and information, critics argue that strong export control regulations may result in invasions of privacy, violations of free speech, and a displacement of the United States as a leader in a world of technological advancement. However, despite current regulations, defense industry information is still at risk of cyberattacks and inadvertent data releases, creating potential threats to national security and the security of company technology and information. In an effort to secure company and sensitive information while exporting, defense industry companies utilize encryption and other cybersecurity measures. Advancing technologies in cybersecurity can help the government and defense industry companies by bolstering the security of their information. These same advancements can also aid attackers in breaking through cybersecurity defenses. Some advances in technology are even preventing law enforcement from gathering necessary information to conduct investigations when cyber-attacks occur, making it difficult to identify criminal actors and seek justice.The United States government faces challenges in creating and up- dating regulations to keep up with consistently advancing technology. Likewise, defense industry companies must adhere to government regulations by creating robust compliance programs, but they should also implement security and compliance measures above and beyond what the government requires to ensure more effective security for their technology and information. This Article discusses the effect of advancing cyber technology; United States export regulations; reporting requirements related to the export of encrypted items; and encryption technology in the defense industry. First, the Article defines encryption and encrypted items. Second, the Article explains United States regulations of ex- ports and specifically, regulations related to encryption and encrypted items. Third, the Article explains the need for defense industry companies to export and to use encrypted items. Fourth, the Article analyzes criticisms of export regulations and the differing views on United States controls. Fifth, the Article will discuss the complexities of com- plying with export regulations and defense industry compliance pro- grams. Sixth, the Article examines the outlook for encryption technology, the future of regulations related to cybersecurity, and the outlook for defense industry security measures and compliance with regulations. The United States government is beginning to recognize the need for more advanced security measures to protect domestically produced technology and information, especially information that puts national security at risk. Specifically, the technology and information produced by United States defense industry companies should be protected from getting into the hands of our foreign adversaries at all costs. In response to the growing need for security measures, the United States government has implemented new programs, commissions, agencies, and projects to create more robust security systems and regulations. The United States should employ the most talented and experienced cybersecurity professionals to innovate and produce security systems that protect our nation’s most sensitive information. The government should then provide these systems to its defense industry companies at minimal cost and should require companies to use the best technology in its security measures. With or without the government’s assistance, defense industry companies within the United States must also implement their own measures of protection. Current policies offer little protection of sensitive and export controlled information including encrypted items and in- formation. In addition, the government should also provide the defense industry companies better guidance and access to resources in order to assist them in protecting the important information and encrypted items.207 For example, any new systems or software purchased by the United States should be made available to defense industry companies as the standard. If the government truly wishes to protect its most important technology and information, it should provide the new systems at minimal cost to the defense industry. Advancements in security programs should be shared with defense industry companies as soon as they are available and ready for use. Nevertheless, the government may not want to provide defense industry companies with the best security technology because in the event that the government needs to conduct an investigation, a company utilizing strong cyber- security and encryption software is much more difficult to investigate. Alternatively, the United States could update current regulations to require that defense industry companies must utilize specific security measures or face a penalty for failing to do so. Such regulation could require defense companies to implement more robust security pro- grams with updated security software. This is a less effective solution as the advancement in cyberattack technology increases so rapidly, and reformed regulations will likely be outdated as soon as they are implemented. It makes more sense to require that defense companies must implement the most updated software and programs determined by government security experts and cyber-security experts. Also, by allowing defense companies to decide which security companies it will work with, the defense companies obtain the option to shop for the best and most expensive program, or the company could choose the cheapest option, resulting in less efficient security. Cybersecurity regulations that are too specific run the risk of being outdated quickly, whereas broad requirements leave the option for companies to implement the lowest of security measures. Even if the government declines these suggested measures, defense industry companies should make the protection of their sensitive in- formation and encrypted items top priority. This method would re- quire complete buy-in from the senior management within the company and a thorough flow-down of cultural beliefs among its employees. A change in norms must be implemented, and defense industry personnel should be inundated with reminders on the importance of information security. Companies should provide employees with easy access to guidance, training, and assistance in handling, sharing, protecting, and exporting sensitive and export controlled information. Changing company culture takes time, and failure to change personnel beliefs will result in a lack of understanding and potential violations of export control regulations. In the worst cases, data spills and cyberattacks could result in the loss of sensitive or even classified in- formation that could jeopardize national security. Huge unauthorized data releases of sensitive information will negatively affect a company’s reputation thus affecting its ability to generate revenue. The risks in using and exporting encryption technology and sensitive information should be a major concern for defense industry companies. This concern should motivate the government to invest significant resources into compliance programs. Resources such as dedicated and qualified personnel can create policy and procedure to ensure compliance with United States government regulations, and the procedures will provide guidance and training to all employees. In addition, companies should employ IT security, data security, and counterintelligence personnel to work with the compliance team in innovating preventive measures and in addressing any potential data releases and export violations. Immediate actions and counter measures should be prioritized not just among the compliance and security teams but should be a known, expected response from all employees. In other words, cybersecurity norms should be instilled company-wide and thoroughly policed from within the company. How a company chooses to implement such measures remains discretionary, but a better resourced compliance department dedicated to implementing effective policies and responding quickly to potential issues will prevent export control violations and data releases of important information. Defense industry companies transfer export controlle

Since the beginning of World War II, Canada and the United States have engaged in intensive defense industrial cooperation that has resulted in the integration of their defense industries. The official term used for explaining this phenomenon is a North American defense industrial base. The driving force behind this integration were the top U.S. defense companies, which opened their numerous branches and subsidiaries in Canada, and took command positions in the Canadian defense industry. The U.S.-Canadian defense industrial relationship has been incrementally institutionalized in several framework agreements. In 1956 and 1963, the United States and Canada entered into the Defense Production Sharing Agreement, and the Defense Development Sharing Agreement. Additionally, in 1993, the United States has designated Canada as part of the U.S. defense industrial base. Canada is unique among U.S. allies in that it is both a leading purchaser of major U.S. weapon systems and a key supplier of subsystems, components, and materials to the U.S. defense industry. Because of the high level of integration between the two economies at the sub-tier level, as well as the flow of goods between parent companies and subsidiaries, there is a much higher level of cross-border trade in parts and components between the U.S. and Canadian defense firms than the official SIPRI defense-trade statistics suggest. This article surveys the peculiarities of the Canadian defense industry, its contribution to the North American defense industrial base, the history of Canada-U.S. defense industrial cooperation, the division of labor in North America in the field of arms production, Canadian industrial capabilities, as well as the volume and dynamics of arms trade between two countries.

The process of diversification in the defense industry enterprises, besides ensuring the loading of high-tech equipment, first of all, calls for the technological independence of the country, capable of developing under conditions of instability in international relations. The aim of the study is to identify a successful large-scale experience of diversification in the international arena (using the example of the United States, China and Germany), and to formulate specific packages of measures and formats for overcoming stagnation in cooperation between the defense industry and the fuel and energy complex in the Russian Federation. The methodological basis of the study assumes using a systemic and synergetic approach, which in general approximation boils down to enhancing the mutual beneficial effect of its elements. Also, when writing the article, the author applied a quantitative analysis of statistical data, historical and descriptive methods, a comparative method. As the main result, he proposed the formats of interaction between the military and industrial complex and fuel and energy complex, aimed at more efficient use of the potential of the defense industry to meet the needs of organizations in the fuel and energy complex, increasing the volume of output of products at the defense industry enterprises and expanding its range. More active interaction of the defense industry works with organizations of the fuel and energy complex will allow them in the near future to set up producing the new types of civilian products and technologies, and fuel and energy companies to obtain competitive high-tech products.

Privatization refers to outsourcing government functions to a private, usually for-profit, business although the arrangement can be with a non-profit organization. Currently, the most privatized aspect of criminal justice is punishment in general and prisons in particular. Prisons have historically engaged in “nominal privatization,” which includes privatization of services such as the designing and construction of prisons, provision of food services, medical care, and commissary. During the 1980s, contracts expanded to include “operational privatization,” which meant contracting out the day-to-day management of prisons to private, for-profit companies. Operational privatization involves a private company operating a facility owned by the government or managing inmates in a prison that the company owns. In some countries, such arrangements may be called public private partnerships (PPP) or private finance initiatives (PFI). Operational privatization originated during the 1980s in the United States, which was undergoing an unprecedented prison expansion because of ongoing wars on crime and drugs. At the same time, politicians were promising tax cuts, so privatization allowed a resolution to the contradiction by allowing private capital to profit by taking on some traditional responsibilities of government. Despite objections that the privatization of punishment and prison were different in nature than, say, trash collection, the dominant political view was that government kept sentencing authority and business could do the other functions more efficiently. While operational privatization has spread to a handful of countries, the largest private prison corporations are US-based, multibillion-dollar multinational companies that are traded on stock exchanges. As such, private prisons are the tip of a much larger criminal justice (CJ)–industrial complex, which describes a range of business and financial interests whose profit motive can shape criminal justice policy, including in ways that perpetuate current injustices. The CJ-industrial complex, mirroring the military-industrial complex President Eisenhower warned of, is comprised of everyone who financially profits from the police, courts, and corrections system. In turn, it is part of a larger security-industrial complex, which includes private security, investigators, intelligence, and technology sold as a response to (real and exaggerated) fear of crime, hackers, terrorists, and youth. Even when considered on its own, though, the CJ-industrial complex is significant because it could also mirror the concerns Eisenhower had: that because of its size and lobbying power, the defense industry could start to make policy based too much on its own interest rather than for the public good.

The defence industry has pioneered technological developments throughout Turkish history, as in all other nations. The Turkish states was in leading and decisive positions both in regional and international arena during the periods when their defence technology was superior. However, during the periods when their defence technology began to decline, they experienced difficulties caused by foreign dependency in this field. 15th and 16th centuries, defined as the Rising Period of the Ottoman Empire can be an example in this regard. In this period, the Ottoman Empire developed its military capabilities by itself to a large extent and became an empire that spread over three continents. The opposite was observed during the periods of stagnation and regression. The founding cadres, who emerged victorious from the War of Independence and founded the Republic of Türkiye, made great investments in the field of defense industry, as they did in every field, together with the Republican period. These investments led to the establishment of deep-rooted institutions that form the basis of the civil and defence industry in all areas of the country. After the Second World War, with the close military cooperation with the United States of America (USA), some defense industry institutions were closed and foreign dependency in the arms industry increased. While this situation brought a heavy burden to Türkiye’s economy, it also prevented it from taking steps towards its national interests in the international arena. The arms embargo imposed on Türkiye by the USA after the 1974 Cyprus Peace Operation once again revealed the importance of possessing domestic and national technology. Since the 1990s, some states, using Türkiye’s fight against terrorism as an excuse, have imposed restrictions on the sale of arms and ammunition to Türkiye from time to time. Established in the 1980s following the end of the embargoes, Turkish defence industry organisations first started to manufacture licensed parts and then national and original products/platforms after the 2000s. These products met the military and strategic needs of the Turkish Armed Forces, and they have also positively contributed to international relations through export to friendly and allied countries. This study explores the processes and developments in Turkish defence industry, which is the source and core of the national technology initiative, from the pre-Republican era to the present, with a focus on their effects on Türkiye’s international relations.

Europe’s defence industry has evolved by transforming itself from a collection of nationally oriented firms to one dominated by two giants. Stimuli external and internal to the European Union (EU) are responsible for this development. After describing the evolution of this sector since the end of the Cold War, the authors present four factors that played key roles: developments within the United States’ defence industry; the impact of technology and defence economics; general economic restructuring within the EU together with nascent defence industrial policy; and progress towards the creation of a European Security and Defence Policy. While the evolution required all four factors, the EU played a critical and under–appreciated economic and political role in the changes that have transformed the European defence industry, and is now positioned to continue to shape this process.

Defense industry policies and cost calculation systems have a great impact on defense companies. This study suggests implications for Korea’s defense industry policy and cost system through United States’ and Japan’s case analysis. First, in order to quickly respond to the rapidly changing defense market environment and promote export strategy, it is recommended to unify the defense export support organization. And it is necessary to make a policy for the defense industry as a long－term plan. In terms of cost system, it is required to conduct a joint periodic diagnosis of cost system to ensure transparency and reduce information asymmetry between the government and defense industry. In addition, for the stable introduction of the revision in 2020, education at the government level and the establishment of a dedicated department are necessary. Recognizing the problems with the defense cost system in Korea from this analysis and supplementing the policy with suggestions, promote the export competitiveness of the defense industry and proceed with the government’s policies efficiently, which contributes to the development of the Korean defense industry.

Institutionalization of the arrangements with an increase in cross-national teaming for weapons is areas where future foreign sales may have a profound effect on the United States (US) defence industry. The US defence industry is a large industry, but not dominant in the context of the whole economy. Peace gave way to the Cold War, as the United States and the Soviet Union confronted each other in Europe and elsewhere. The aerospace and electronics industries are the most important industries in defence contracting in the US. Defence employment echoes the pattern of regional and industrial concentrations of defence spending. Capital investment in the defence industry is important for its contribution to productivity and as a component of the opportunity costs of defence spending. The characteristics of the defence market have tended to favour a certain set of business firms, those that have learned to deal successfully in the specialized environment.

The article considers the problems of the Russian Federation caused by the economic sanctions and needs to optimize the production of the defense-industrial complex enterprises in conditions of the sanctions field, as well as the ways to optimize business processes at the defense enterprises of the Russian Federation. The main provisions for optimizing the development of the defense industry are outlined: analysis of the industry orientation in the conditions of the sanctions field; studying the existing and possible consequences of the imposed economic sanctions for the defense industrial complex of the Russian Federation; forecasting the development of defense enterprises in the context of economic sanctions; defining the main directions of optimization of production processes in the defense industry complex of the Russian Federation. Among the main ways to optimize business processes at defense industrial enterprises, there are singled out the following directions: development, approval and centralized communication of the results of the unified federal import substitution program to specific defense industry executors; development and implementation of a federal technology upgrade program in the defense industry of the country; creation of a unified center - a governmental agency - to form the production clusters and incubator centers; active involvement of domestic consulting agencies and research centers on a legislative framework; long-term systematic development of international cooperation through the joint defense industry enterprises with enterprises of friendly countries; improving the level of training and qualification of management personnel of defense industry enterprises based on modern IT management technologies; 100% implementation in the defense industry of management accounting systems based on corporate information systems; emphasis on the introduction of progressive technologies into the production processes of the country’s defense complex, increasing the significance of the results of R&D; 100% implementation of international modern TQM systems, ISO standards in the design and technological support of production processes in the defense industry; more active cooperation between the defense enterprises and the industrial development fund.

From today's viewpoint, 2016 may well represent the end of the post‐Cold War era and the general assumptions that are associated with it. These include the beliefs that the United States remains a European power, guaranteeing the territorial integrity of its European NATO allies, that liberal democracy represents the political system widely seen as the only legitimate normative reference point, and that the future of the European Union will be defined by continued integration into an ‘ever closer Union’. These assumptions have been shaken to the core.

Turkish defence industries have significantly improved their production capabilities since the 1980s. According to the official documents, Turkey reached 54% local production level in 2011. Encouraged by this impressive defence industrial development, the government of Turkey declared that defence industrial autarky, the country’s main goal since the 1980s, would be reached by 2023. This paper evaluates the possibility of Turkey’s defence autarky. Contrary to the existing approaches in the literature that assess technological capabilities and cost-effectiveness, this paper argues that Turkey’s search for defence autarky is hindered by the interplay of institutional deficiencies, dependency on foreign inputs, and the United States’ continuing influence over Turkish politics.

Under a market-oriented corporate governance system, the United States defense industry consolidate quicker and gained a comparative advantage in simple measures of firm performance, including profit margin and market share, than the continental European defense industry, which is more oriented toward stakeholder relationships in corporate governance. The defense industry in the United Kingdom, also characterized by market-oriented governance, performed well. On a wider set of measures related to firm performance and other stakeholders, the evidence is less clear. Concerns have been expressed about the European defense industry's survival in its current form. Likewise, concerns have been raised about the increasing level of concentration in the United States, its potential effect on innovation, and the erection of trade barriers. This paper concludes that corporate governance concepts are useful in analyzing firm conduct and performance in the defense industry and other traditionally -- 'national' industries. It also concludes that policy concerns might successfully be addressed through increased Transatlantic cooperation, attention to the flexibility inherent in the Anglo-American system of corporate governance, and recommendations to modify public procurement policies.

In June 2006, government announced $15 billion of military equipment purchases that included ships, trucks, helicopters, and transport planes. One might observe that week of 26 June was a very good week for both Canadian military and Canadian defence industries. The last time such an ambitious equipment acquisition plan was undertaken was in late 1970s and early 1980s when new fighter aircraft, ships, maritime patrol aircraft, and an air defence weapon system were purchased. This is not to imply that no equipment purchases have been made since 1980s, but only to highlight size and scope of more recent announcements.However, June 2006 announcements have not been without controversy. Opposition party members and industry lobbyists accused government of giving up Canadian sovereignty and not providing a competitive process.1 Then Liberal party opposition defence critic Ujjal Dosanjh indicated that the purchase would be a blow to Canadian sovereignty because planes would be manufactured and repaired in United States rather than in Canada.2 Controversy such as this is fairly typical in Canada.The controversy continued periodically throughout fall of 2006 and into early months of 2007, as government moved closer to announcing who would actually win contracts to provide new equipment. In particular, issue of industrial regional benefits and where benefits should go became politically charged when Quebec aerospace industry argued that most of benefits should go to Quebec since most of Canada's aerospace industry was located there.3One of reasons controversies like this surround large military equipment purchases is lack of a clearly articulated defence industrial policy or strategy by government.4 If a policy existed it would be easier for government to justify decisions by arguing that decision was in line with stated policy. Arguably, there has not been a need for such a policy because there has not been sufficient spending on defence equipment to justify time and effort required to develop such a policy within Canadian political system. That might have been true in past, but this article will argue that future capital equipment purchases for CF should be made within context of a defence industrial strategy.The future is important context for this issue because $15 billion in procurement projects that have already been announced include agreedupon industrial regional benefits. Therefore, development of a defence industrial strategy in 2007 will not have any impact on how these procurement projects play out. Since CF has significant additional capital investment requirements (equipment and infrastructure), a defence industrial strategy can help reduce amount of controversy that has been associated with 2006-07 procurement projects.5 As a minimum, government should provide a strategy that articulates a set of principles in order to provide industry with some sort of basic policy intent.In order to provide a context for argument, paper will first discuss Canadian defence industrial policy in past, examine approach of other nations' existing defence industrial policy and then identify some of key areas that a Canadian defence industrial policy needs to address.INDUSTRIAL POLICY IN THE PASTIn theory, any defence industrial policy should be developed and implemented within context of an overall industrial policy for nation. A defence industrial policy should not be working at cross purposes to national industrial policy and industrial policy should, in an ideal world, be based on an overarching set of long-term strategic objectives established by government. Canadian politicians have not really engaged in a debate about a strategic industrial policy since 1982 royal commission on economic union and development prospects for Canada, otherwise known as Macdonald commission. …

Part of the argument presented in the introductory chapter was that the current transformation of Europe’s defense industry and the role of the European Union (EU) in this process are not taking place within a vacuum. There are international forces that are influencing decisions being made by industry executives and politicians inside and outside the EU. These global factors are primarily of a political and economic nature, although technological change is also important. The foreign and domestic policies made by ‘great power’ countries, the activities undertaken by multinational corporations, and the decisions made by other international actors shape the context within which Europe’s defense industry and European politicians operate. As discussed below, the United States (US) plays a particularly influential role, economically and politically, in world affairs. The member states of the EU are forced to react individually and collectively. The actions taken by the European Commission and Parliament (discussed in the previous chapter), member states (Chapter 5), and by defense industry interest groups (Chapter 6), only make sense when the international environment is considered as well.

One of the most important tasks in the field of ensuring the defense and security of the Russian Federation in the modern economic conditions is the transition to a new competitive look of the defense industry complex (DIC). The decisive factor for the stable development of defense industry enterprises is their high-quality innovative and investment activities. The development of project management in the defense industry, which contributes to more efficient development of defense industry enterprises and increases the level of control over their innovative and investment development, can be an efficient tool for its development and improving the efficiency of project implementation, which positively influences the growth of the innovation implementation efficiency.Project management has been successfully applied in the activities of companies for many years. The history of project management is presented, the world and domestic practices of project management are analyzed, conceptual approaches to the implementation of project management principles in the defense industry are proposed, and a change in the corporate governance system when implementing project management is illustrated in the present work.The goals of implementing project management in the defense industry development have been considered, the specifics of project management in the defense sector have been revealed, and the possibilities of using the project approach in the defense industry development have been considered in the discussion. Specific examples of project management in the defense sector have been provided in the present work.Project management is an efficient tool for preparing and implementing innovative and investment activities in the development of the Russian defense industry. The use of project management in the field of defense industry development can significantly save the time and money spent on projects and programs development in the defense industry of Russia.