[IWAR] BXA, UK Ban, McCain-Kerrey (fwd)

From: Mark Hedges (hedgesat_private)
Date: Fri Feb 13 1998 - 18:53:01 PST

  • Next message: Mark Hedges: "[IWAR] Spy Touts Crypto"

    Here comes the fun! -hedges-
    ---------- Forwarded message ----------
    Date: Fri, 13 Feb 1998 19:43:54 -0500
    From: John Young <jyaat_private>
    To: cypherpunksat_private
    Subject: BXA, UK Ban, McCain-Kerrey
    In response to Greg Broiles' and Ulf  Möller's posts and the 
    prospect of a UK ban on non-escrowed encryption next Tuesday:
                           Opening Address
                 Under Secretary William A. Reinsch   
                   Bureau of Export Administration   
                     U.S. Department of Commerce
                           Update West 98   
                      Los Angeles, California    
                          February 10, 1998
    One of the reasons why our licensing load is inching back up 
    is the transfer of encryption licensing to Commerce earlier 
    this year. No speech from me would be complete without a 
    paragraph on encryption, so here it is. 
    Our policy is intended to balance the competing interests of 
    privacy, electronic commerce, law enforcement, and national 
    security. We believe that use of key recovery technologies is 
    the best way to achieve that balance. We do not focus narrowly 
    on a single technology or approach. We expect the market to 
    make those judgments, but we are taking steps to facilitate the 
    development and dissemination of these products.
    Our regulations allow recoverable encryption products of any 
    strength and key length to be exported freely after a single 
    review by the government. To encourage movement toward recoverable 
    products, we have also created a special, two-year liberalization 
    period during which companies may export 56 bit DES or equivalent 
    products provided they submit plans to develop key recovery 
    products. This provides an incentive for manufacturers to develop 
    these products, which in turn will facilitate the development of 
    key management infrastructures. So far, we have approved 47 plans, 
    from companies large and small, and have five more pending.
    In terms of licenses, in calendar year 1997, we received 2076 
    applications, and approved 1801 licenses with a dollar value of 
    $4.7 billion. (The reason for the high dollar value is because we 
    approve encryption licensing arrangements for extended periods of 
    time, from 4 to 10 years.)
    The interagency working group on cryptography policy, which 
    includes representatives from BXA, NSA, and the FBI, continue to 
    meet to discuss ways to streamline the licensing process on 
    encryption export licenses. Several items have been identified and 
    progress is being made in these areas. We have established a 
    pre-Operating Committee group to discuss contentious cases. In 
    part as a result, no encryption cases have been escalated to the 
    OC since mid-December. We have created an Autolist to eliminate 
    agency referrals. So far, we have agreed to list specific products 
    amounting to 20% of the products we see. This means, once 
    implemented, that a subset of licenses can be processed by 
    Commerce without prior referral to other agencies. Finally, we 
    have posted on our web page "helpful hints" to make the 
    encryption licensing process more transparent: 
    We continue to work on other initiatives to streamline the process.
    We are also discussing with our trading partners a common approach 
    to encryption policy. We have found that most major producing 
    countries have public safety and national security concerns similar 
    to ours. We are working together with these governments to ensure 
    that our policies are compatible, and that they facilitate the 
    emergence of a key management infrastructure.
    With respect to legislation, we believe the McCain-Kerrey Bill, 
    S. 909, the Secure Public Networks Act, provides a sound basis for 
    legislation acceptable to both Congress and the Administration. In 
    particular, we appreciate the bill's explicit recognition of the 
    need to balance competing objectives and of the potential for key 
    recovery to become a market-driven mechanism to facilitate 
    maintaining that balance. 
    [Other excerpts of speeches by BXA officials at the seminar:]
    Encryption Controls
    Export Enforcement has new responsibilities in the encryption area. 
    Over the past year, Export Enforcement has opened many new 
    investigations involving alleged violations of the encryption 
    regulations. These cases are being watched very closely. The 
    national security of the United States depends in part on the 
    government's ability to obtain timely information about the 
    activities and plans of potentially hostile foreign parties, 
    such as terrorists and drug dealers. 
    ... the Department of Justice and National Security Agency 
    participate in processing licenses for encryption. ... The 
    increase in licenses we are experiencing is attributable not only 
    to increased exports, but to transfer of items from the Munitions 
    List to Commerce jurisdiction. Encryption licenses account for a 
    significant portion of the increase. We created a special division 
    to handle those. As of today, there is only one encryption case 
    that has been pending over 40 days.
    For full speeches: http://jya.com/bxa-west98.htm

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