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IP: BXA, UK Ban, McCain-Kerrey
From: Dave Farber <farber () cis upenn edu>
Date: Sat, 14 Feb 1998 17:16:33 -0500
From: John Young <jya () pipeline com> In response to Greg Broiles' and Ulf M=F6ller's posts and the=20 prospect of a UK ban on non-escrowed encryption next Tuesday: Opening Address Under Secretary William A. Reinsch =20 Bureau of Export Administration =20 U.S. Department of Commerce Update West 98 =20 Los Angeles, California =20 February 10, 1998 [Excerpt] Encryption One of the reasons why our licensing load is inching back up=20 is the transfer of encryption licensing to Commerce earlier=20 this year. No speech from me would be complete without a=20 paragraph on encryption, so here it is.=20 Our policy is intended to balance the competing interests of=20 privacy, electronic commerce, law enforcement, and national=20 security. We believe that use of key recovery technologies is=20 the best way to achieve that balance. We do not focus narrowly=20 on a single technology or approach. We expect the market to=20 make those judgments, but we are taking steps to facilitate the=20 development and dissemination of these products. Our regulations allow recoverable encryption products of any=20 strength and key length to be exported freely after a single=20 review by the government. To encourage movement toward recoverable=20 products, we have also created a special, two-year liberalization=20 period during which companies may export 56 bit DES or equivalent=20 products provided they submit plans to develop key recovery=20 products. This provides an incentive for manufacturers to develop=20 these products, which in turn will facilitate the development of=20 key management infrastructures. So far, we have approved 47 plans,=20 from companies large and small, and have five more pending. In terms of licenses, in calendar year 1997, we received 2076=20 applications, and approved 1801 licenses with a dollar value of=20 $4.7 billion. (The reason for the high dollar value is because we=20 approve encryption licensing arrangements for extended periods of=20 time, from 4 to 10 years.) The interagency working group on cryptography policy, which=20 includes representatives from BXA, NSA, and the FBI, continue to=20 meet to discuss ways to streamline the licensing process on=20 encryption export licenses. Several items have been identified and=20 progress is being made in these areas. We have established a=20 pre-Operating Committee group to discuss contentious cases. In=20 part as a result, no encryption cases have been escalated to the=20 OC since mid-December. We have created an Autolist to eliminate=20 agency referrals. So far, we have agreed to list specific products=20 amounting to 20% of the products we see. This means, once=20 implemented, that a subset of licenses can be processed by=20 Commerce without prior referral to other agencies. Finally, we=20 have posted on our web page "helpful hints" to make the=20 encryption licensing process more transparent:=20 http://www.bxa.doc.gov/encguide.htm We continue to work on other initiatives to streamline the process. We are also discussing with our trading partners a common approach=20 to encryption policy. We have found that most major producing=20 countries have public safety and national security concerns similar=20 to ours. We are working together with these governments to ensure=20 that our policies are compatible, and that they facilitate the=20 emergence of a key management infrastructure. With respect to legislation, we believe the McCain-Kerrey Bill,=20 S. 909, the Secure Public Networks Act, provides a sound basis for=20 legislation acceptable to both Congress and the Administration. In=20 particular, we appreciate the bill's explicit recognition of the=20 need to balance competing objectives and of the potential for key=20 recovery to become a market-driven mechanism to facilitate=20 maintaining that balance.=20 ... [Other excerpts of speeches by BXA officials at the seminar:] Encryption Controls Export Enforcement has new responsibilities in the encryption area.=20 Over the past year, Export Enforcement has opened many new=20 investigations involving alleged violations of the encryption=20 regulations. These cases are being watched very closely. The=20 national security of the United States depends in part on the=20 government's ability to obtain timely information about the=20 activities and plans of potentially hostile foreign parties,=20 such as terrorists and drug dealers.=20 ... the Department of Justice and National Security Agency=20 participate in processing licenses for encryption. ... The=20 increase in licenses we are experiencing is attributable not only=20 to increased exports, but to transfer of items from the Munitions=20 List to Commerce jurisdiction. Encryption licenses account for a=20 significant portion of the increase. We created a special division=20 to handle those. As of today, there is only one encryption case=20 that has been pending over 40 days. ----- For full speeches: http://jya.com/bxa-west98.htm
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