Moderates engaged in overseas espionage (5)
I believe the answer is:
eases
'moderates' is the definition.
(moderate can mean to ease or relieve)
'engaged in overseas espionage' is the wordplay.
'engaged in' indicates a hidden word.
'EASES' can be found hidden inside 'overseas espionage'.
(Other definitions for eases that I've seen before include "Softens" , "provides relief" , "Calms" , "Makes less severe" , "Facilitates" .)