UPDATE: U.S. Relaxes Encryption Controls

The Clinton Administration today loosened export controls on mass market encryption software, winning immediate approval from industry groups.

In a statement released today, the White House said encryption product of any key length may be exported without a license, after review, to commercial firms in any country, except for seven that are considered by the U.S. government to be terrorist states. The banned countries are: Iran, Iraq, Libya, Syria, Sudan, North Korea and Cuba.

Previously, companies had to obtain a license from the government to export encryption products higher than 56 bits in key length.

Several trade groups, including the Computer & Communications Industry Association (CCIA), said the proposal will significantly reduce restrictions on exports. "It looks like they (the Administration) have finally made a substantive change in policy," said Ed Black, president of the association.

The new policy will go into effect by Dec. 15, 1999, according to a statement released by the White House.

At the same time, the Administration is asking Congress to approve legislation that would strengthen law enforcement efforts to investigate cyber crimes hidden by encryption. The Cyberspace Electronic Security Act of 1999 would authorize $80 million over four years for the FBI's Technical Support Center to coordinate national efforts to fight cyber crimes.

The act would also ensure law enforcement maintains its ability to access keys to decode encrypted data, which are held by third parties, while protecting the data from inappropriate release.

The increased law enforcement measures in the Act would allow for relaxed export controls, said William Reinsch, under secretary of commerce for export administration in the U.S. Department of Commerce. "If we can provide more tolls for law enforcement, we can move in a direction of liberalized export," he said in a telephone interview.

CCIA's Black said the criteria for allowing the government access to the decryption information are vague, and said it is one of the areas of today's initiative that must be watched. "The devil is in the details," Black said.

Other industry groups said exports would prosper under the relaxed controls.

"We are pleased the Clinton Administration has joined with Congress in acting to move the entire marketplace forward," Harris Miller, president of the Information Technology Association, said in a statement.

More details about the new policy can be found on the Web in a statement issued by the White House.

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