a selection of material incl Q&A from todays Clipper briefings at the WH. EFF has supplied these to

[David Farber <farber () central cis upenn edu>]

THE WHITE HOUSE
OFFICE OF THE VICE PRESIDENT


EMBARGOED UNTIL, 3: 00 PM EST             CONTACT: 202/456-7035
February 4, 1994




STATEMENT OF THE VICE PRESIDENT




Today's announcements on encryption represent important steps in
the implementation of the Administration's policy on this critical
issue. Our policy is designed to provide better encryption to
individuals and businesses while ensuring that the needs of law
enforcement and national security are met.


Encryption is a law and order issue since it can be used by criminals
to thwart wiretaps and avoid detection and prosecution. It also has
huge strategic value. Encryption technology and cryptoanalysis
turned the tide in the Pacific and elsewhere during World War II.


[end of statement]




Statement of
Dr. Martha Harris
Deputy Assistant Secretary of State
for Political-Military Affairs
February 4, 1994




Encryption -- Export Control Reform




The Secretary of State is announcing today measures arising from
the Administration's decision to reform export control procedures
applicable to products incorporating encryption technology. These
reforms are part of the Administration's effort to eliminate
unnecessary controls and ensure efficient implementation. The
reforms will simplify encryption product export licensing and
speed the review of encryption product exports, thus helping U.S.
manufacturers to compete more effectively in the global market.
While there will be no changes in the types of equipment
controlled by the Munitions List, we are announcing measures to
expedite licensing.


Last year the President announced an initiative to encourage U.S.
manufacturers and users of encryption to take advantage of a
government technology (the key-escrow chip) that provides
excellent security while ensuring that the Government has a means
to decode the encryption when lawfully authorized, such as when
executing a court-authorized warrant in connection with a criminal
investigation. At the time he announced this initiative, the
President directed a comprehensive review of U.S. policy regarding
domestic use and export of encryption technology. The reforms we
are announcing today result from that review.


The President has determined that vital U.S. national security and
law enforcement interests compel maintaining appropriate control
of encryption. Still, there is much that can be done to reform
existing controls to ensure that they are efficiently implemented
and to maintain U.S. leadership in the world market for encryption
technology. Accordingly, the President has asked the Secretary of
State to take immediate action to implement a number of procedural
reforms. The reforms are:


* License Reform: Under new licensing arrangements, encryption
manufacturers will be able to ship their products from the United
States directly to customers within approved regions without
obtaining individual licenses for each end user. This will improve
the ability of our manufacturers to provide expedited delivery of
products, and to reduce shipping and tracking costs. It should
also reduce the number of individual license requests, especially
for small businesses that cannot afford international
distributors.


* Rapid review of export license applications: A significant
number of encryption export license applications can be reviewed
more quickly. For such exports, we have set a license turnaround
goal of two working days.


* Personal use exemption: We will no longer require that U.S.
citizens obtain an export license prior to taking encryption
products out of the U.S. temporarily for their own personal use.
In the past, this requirement caused delays and inconvenience for
business travellers.


* Allow exports of key-escrow encryption: After initial review,
key-escrow encryption products may now be exported to most end
users. Additionally, key-escrow products will qualify for special
licensing arrangements.


These reforms should have the effect of minimizing the impact of
export controls on U.S. industry. The Department of State will
take all appropriate actions to ensure that these reforms are
implemented as quickly as possible. The Secretary of State asks
that encryption product manufacturers evaluate the impact of these
reforms over the next year and provide feedback both on how the
reforms have worked out and on recommendations for additional
procedural reforms.


The contact point for further information on these reforms is Rose
Biancaniello, Office of Defense Trade Controls, Bureau of
Political-Military Affairs, Department of State, (703) 875-6644.




QUESTIONS AND ANSWERS ABOUT THE
CLINTON ADMINISTRATION'S ENCRYPTION POLICY


Q.      What were the findings of the encryption technology review?


A.      The review confirmed that sound encryption technology is
needed to help ensure that digital information in both computer
and telecommunications systems is protected against unauthorized
disclosure or tampering. It also verified the importance of
preserving the ability of law enforcement to understand encrypted
communications when conducting authorized wiretaps. Key escrow
technology meets these objectives.


Specific decisions were made to enable federal agencies and the
private sector to use the key escrow technology on a voluntary
basis and to allow the export of key escrow encryption products.


In addition, the Department of State will streamline export
licensing procedures for products that can be exported under
current regulations in order to help U.S. companies to sell their
products abroad.


To meet the critical need for ways to verify the author and sender
of an electronic message -- something that is crucial to business
applications for the National Information Infrastructure -- the
federal government is committed to ensuring the availability of a
royalty-free, public-domain Digital Signature Standard.


Finally, an interagency working group has been established to
continue to address these issues and to maintain a dialogue with
industry and public interest groups.


Q.       Who has been consulted during this review? The Congress?
Industry? What mechanism is there for continuing consultation?


A.       Following the President's directive announced on April 16,
1993, extensive discussions have been held with Congress,
industry, and privacy rights groups on encryption issues. Formal
public comment was solicited on the Escrowed Encryption Standard
and on a wide variety of issues related to the review through the
Computer System Security and Privacy Advisory Board.


The White House Office of Science and Technology Policy and the
National Security Council will chair the interagency working
group. The group will seek input from the private sector both
informally and through several existing advisory committees. It
also will work closely with the Information Policy Committee of
the Information Infrastructure Task Force, which is responsible
for coordinating Administration telecommunications and information
policy.


Q.      If national security and law enforcement interests require
continued export controls of encryption, what specific benefits
can U.S. encryption manufacturers expect?


A.      The reforms will simplify encryption product export licensing
and speed the review of encryption product exports. Among other
benefits, manufacturers should see expedited delivery of products,
reduced shipping and reporting costs, and fewer individual license
requests -- especially for small businesses that cannot afford
international distributors. A personal exemption for business
travellers using encryption products will eliminate delays and
inconvenience when they want to take encryption products out of
the U.S. temporarily.


Q.      Why is the key escrow standard being adopted?


A.      The key escrow mechanism will provide Americans and
government agencies with encryption products that are more secure,
more convenient, and less expensive than others readily available
today -- while at the same time meeting the legitimate needs of
law enforcement.


Q.      Will the standard be mandatory?


A.      No. The Administration has repeatedly stressed that the key
escrow technology, and this standard, is for voluntary use by
federal and other government agencies and by the private sector.
The standard that is being issued only applies to federal agencies
-- and it is voluntary.


Does this approach expand the authority of government agencies to
listen in on phone conversations?


No Key escrow technology provides government agencies with no
[sic] new authorities to access the content of the private
conversations of Americans.


Q.      Will the devices be exportable? Will other devices that use
the government hardware?


A.      Yes. After an initial review of the product, the State
Department will permit the export of devices incorporating key
escrow technology to most end users. One of the attractions of
this technology is the protection it can give to U.S. companies
operating at home and abroad.


Q.      Suppose a law enforcement agency is conducting a wiretap on a
drug smuggling ring and intercepts a conversation encrypted using
the device. What would they have to do to decipher the message?


A.      They would have to obtain legal authorization, normally a
court order, to do the wiretap in the first place. They would then
present documentation, including a certification of this
authorization, to the two entities responsible for safeguarding
the keys. (The key is split into component parts, which are stored
separately in order to ensure the security of the key escrow
system.) They then obtain the components for the keys for the
device being used by the drug smugglers. The components are then
combined and the message can be read.


Q.      Who will hold the escrowed keys?


A.      The Attorney General has selected two U.S. agencies to hold
the escrowed key components: the Treasury Department's Automated
Systems Division and the Commerce Department's National Institute
of Standards and Technology.


Q.      How strong is the security in the device? How can I be sure
how strong the security is?


A.      This system is more secure than many other voice encryption
system readily available today. While the algorithm upon which the
Escrowed Encryption Standard is based will remain classified to
protect the security of the system, an independent panel of
cryptography experts found that the algorithm provides significant
protection. In fact, the panel concluded that it will be 36 years
until the cost of breaking the algorithm will be equal to the cost
of breaking the current Data Encryption Standard now being used.


Q.      Is there a "trap door" that would allow unauthorized access
to the keys?


A.      No. There is no trapdoor.


Q.      Whose decision was it to propose this product?


A.      The National Security Council, the Justice Department, the
Commerce Department, and other key agencies were involved in this
decision. The approach has been endorsed by the President, the
Vice President, and appropriate Cabinet officials.