-Caveat Lector-

White House reverses course; allows overseas encryption sales

Copyright � 1999 Nando Media
Copyright � 1999 Associated Press

By TED BRIDIS

WASHINGTON (September 16, 1999 4:15 p.m. EDT
http://www.nandotimes.com) - The White House agreed Thursday to allow
U.S. companies to sell the most powerful data-scrambling technology
overseas with virtually no restrictions, a concession to America's high-tech
industry over law-enforcement and national-security objections.

The policy reversal was a defeat for the Justice Department, which had
forcefully argued that criminals and terrorists might use the technology to
scramble messages about crimes or deadly plots. On the other hand, the
decision should help U.S. companies in overseas competition - and help
consumers worldwide guarantee the privacy of their e-mail and online
credit-card purchases.

Critics of restrictions on export sales said criminals and terrorists already
could buy or download powerful encryption technology made in other
countries.

"Those who are going to misuse encryption for criminal purchases aren't
going to limit themselves to U.S.-made encryption products," said Ed
Gillespie, executive director of Americans for Computer Privacy.

The administration will allow high-tech companies to sell even the most
powerful encryption technology overseas to private and commercial
customers after a one-time technical review of their products. Companies
will still be required to seek permission to sell the scrambling technology to
a foreign government or military, and bans will remain on selling to seven
terrorist nations: Iran, Iraq, Libya, Syria, Sudan, North Korea and Cuba.

Previously, the administration allowed companies to sell the most powerful
scrambling technology only to specific industries overseas; other foreign
customers were generally limited to so-called 56-bit encryption products,
meaning those with 72-quadrillion unlocking combinations.

"This is a sweeping reform," said Dan Scheinman, senior vice president of
legal and government affairs at Cisco Systems Inc. "Imagine you're
banking online - you want to make sure those things are safe from a
hacker. You buy things, you want to make sure your credit card is secure."

The export limits never directly affected Americans, who are legally free to
use encryption technology of any strength. But U.S. companies have been
reluctant to develop one version of their technology for domestic use and a
weaker overseas version, so they typically sell only the most powerful type
that's legal for export, even to Americans.

"Forcing U.S. companies to do business under tight export controls was
like asking them to use a black rotary telephone in a cellular, call-waiting
world," said Harris Miller, president of the Information Technology
Association of America, a trade group.

Critics cited more than 800 products available worldwide with stronger
scrambling technology than the United States allowed its companies to sell
overseas.

"You can pull it down over the Internet in less than 20 minutes," said
Gillespie. "Having Japanese and German and Irish companies be at the
forefront of this technology is not in our best interests."

A nonprofit group of researchers demonstrated last summer it can
unscramble a 56-bit coded message in just days using a custom-built
computer worth less than $250,000.

The White House announcement follows its decision exactly one year ago
to relax export restrictions. At the time, Vice President Al Gore promised
the administration would reconsider its limits within the year.

------------------------------------------------------------------------
Steve Wingate

California Director
SKYWATCH INTERNATIONAL

Anomalous Images and UFO Files
http://www.anomalous-images.com

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