IP: Crypto Announcement (Reuters Story & ACP Statement)

[Dave Farber <farber () cis upenn edu>]

Date: Thu, 31 Dec 1998 10:12:00 -0800
From: afowler () eff org

U.S. Issues Relaxed Export Limits On Encryption 
Reuters, 01:53 p.m Dec 30, 1998 Eastern 

WASHINGTON (Reuters) - The U.S. Commerce Department said Wednesday
it has issued rules relaxing U.S. export limits on data scrambling
technologies, considered vital for secure electronic commerce and
Internet communications. 

These rules, which become effective Thursday Dec. 31, implement the
policy changes announced last September by Vice President Al Gore. 

They end the need for licenses for powerful U.S. encryption products to
companies worldwide in several key industry sectors after a one-time
review by the Commerce Department. 

``Through the hard work of industry and government officials to finalize
this regulation, U.S. encryption firms will be better able to compete
effectively with encryption manufacturers around the world,'' said
William A. Reinsch, Commerce under secretary for Export Administration. 

The new rules virtually eliminate restrictions on selling powerful
computer data scrambling products to subsidiaries of U.S. corporations. 

The rules relax controls for encryption products to health and medical
organizations in 46 countries by almost all foreign subsidiaries of U.S.
companies and non-U.S. companies. 

Privacy advocates have criticized the plan for helping big companies
while ignoring concerns of ordinary Internet users 

American computer executives welcomed the new rules. 

``These regulations show progress,'' said Scott McNealy, chairman and
chief executive of Sun Microsystems and also co-chair of the Computer
Systems Policy Project's Technology Controls Committee. 

``As the world becomes increasingly interconnected, the challenge for
government is to keep pace with the rapid changes in technology,'' said
Lewis Platt, chairman and chief executive of Hewlett-Packard Co and also
chairman of the computer executive group.

=====

Americans for Computer Privacy Statement on Draft
Encryption Regulations 
05:34 p.m Dec 30, 1998 Eastern 

WASHINGTON, D.C.--(BUSINESS WIRE)--Dec. 30, 1998--The following
statement by Ed Gillespie, executive director of Americans for Computer
Privacy (ACP), was released today in response to the Clinton
Administration's release of draft regulations relating to encryption
technology: 

"At first glance, ACP considers today's action a crucial first step
toward a well-balanced export policy. We and our Congressional allies
have strongly advocated the need for a relaxation of encryption export
regulations to make strong encryption products, that safeguard both
commercial data and the privacy rights of individuals, more widely
available. We appreciate the efforts of members of the Administration
and the 105th Congress to get us to this point. 

"It appears that the government has incorporated many of our initial
recommendations into this updated export policy, including: significant
export relief for encryption products that use symmetric algorithms up
to and including 56 bits; products that use asymmetric algorithms up to
and including 1,024 bits; and relief for various sectors of the business
community. However, the Administration has yet to allow U.S. encryption
manufacturers a level playing field in the global marketplace. 

"On December 3, the Administration announced an agreement with 32 other
nations -- the Wassenaar Arrangement -- containing certain export
controls on encryption. Regrettably, the Administration's draft
regulations impose greater restrictions on American companies than those
called for under the arrangement.

We believe the Administration should begin the new year by eliminating
all controls on encryption software and hardware -- including hardware
components that use algorithms up to 64-bits, and should eliminate all
reporting requirements on higher-level encryption exports. Such actions
would make U.S. controls consistent with the revised Wassenaar
Arrangement. 

"In addition, the U.S. government should be mindful that the Wassenaar
Arrangement is only as effective as the implementing measures adopted by
signatory countries. Some of these nations will almost surely implement
requirements with less rigorous standards than those adopted by the
United States, allowing the unhindered export of 128-bit mass market
encryption products. It must also be noted that the Wassenaar
Arrangement includes just 33 countries -- and nations such as Israel,
South Africa, India and China are not signatories. 

"ACP believes that it is simply unworkable -- and ultimately
counterproductive -- to attempt to limit the export of high-technology
products that are inherently uncontrollable. The Administration itself
has argued that the mass-market sale of such products as unencrypted
computer chips and software is, by its very nature, uncontrollable. Once
an encryption feature is added to such products, the makers and
distributors are not able to control their ultimate destinations. 

"Americans for Computer Privacy looks forward to further discussions
with representatives of the Administration, members of Congress, and
other interested parties in 1999 as we seek further relief consistent
with the Wassenaar Arrangement -- and to provide input in the yearly
review of the Administration's update of the encryption export policy." 

Americans for Computer Privacy (ACP) is a broad-based coalition that
brings together more than 100 companies and 40 associations representing
financial services, manufacturing, telecommunications, high-tech and
transportation, as well as law enforcement, civil-liberty, pro-family
and taxpayer groups. ACP supports policies that advance the rights of
American citizens to encode information without fear of government
intrusion, and advocates the lifting of current export restrictions on
U.S.-made encryption. 

For more information on Americans for Computer Privacy, please visit the
ACP Web Site at www.computerprivacy.org