ACCESSION 
NUMBER:325670

FILE ID:ECO503

DATE:02/04/94

TITLE:ENCRYPTION EXPORT CONTROLS MAINTAINED, BUT PROCESS RELAXED (02/04/94)

TEXT:*94020403.ECO  ECTELELD  EXPORT CONTROLS  /te

ENCRYPTION EXPORT CONTROLS MAINTAINED, BUT PROCESS RELAXED



(Few restrictions on government-backed standard)  (460)

By Bruce Odessey

1SIA Staff Writer

Washington -- The Clinton administration has decided to maintain export

controls on products incorporating encryption technology, but has taken

some steps to expedite licenses for them.



Martha Harris, deputy assistant secretary of state, announced February 4

that new regulations will allow U.S. manufacturers to export with few

restrictions products using key-escrow encryption, the federal

government-backed standard also called the Clipper chip.



For encryption devices aside from the Clipper chip, she said, manufacturers

can still ship to foreign countries already approved for such exports and

will no longer have to obtain individual licenses for each end user.



For the bulk licenses still required, she said, the State Department's goal

is to speed up the reviews to two working days, down from several weeks.



The Clipper chip, developed by the federal government, enables U.S., state

and local law-enforcement agencies with proper wiretap authorization to

eavesdrop on digital telephone communications.



Harris said the Clipper chips could be exported without license to nearly

all countries except those subject to U.S. sanctions for foreign policy

reasons.



As for U.S. industry's disappointment about strict export controls remaining

for other encryption devices, White House press secretary Dee Dee Myers'

written statement offered an explanation.



"If encryption technology is made freely available worldwide, it would no

doubt be used extensively by terrorists, drug dealers and other criminals

to harm Americans," Myers said.



"For this reason, the administration will continue to restrict export of the

most sophisticated encryption devices," she said, "both to preserve our own

foreign intelligence-gathering capability and because of the concerns of

our allies who fear that strong encryption technology would inhibit their

law-enforcement capabilities."



Also announced by the Clinton administration was formal approval of the

Clipper chip as a voluntary federal standard, allowing government agencies

to purchase such chips for use with telephones and modems.  A Justice

Department official said his agency was purchasing 8,000 at a cost of about

$8 million.



Two government agencies, one in the Commerce Department and one in the

Treasury Department, will store the keys needed for decryption of

communications using the Clipper chip.



The administration made the Clipper chip standard voluntary, not mandatory,

for government and business.  In January several computer hardware,

software and telecommunications companies said they intended to support

some standard other than the Clipper chip in order to protect the privacy

of communications from the government.



An FBI spokesman said at a February 4 briefing the administration hopes

private industry will go along with the voluntary standard.  He realized

some criminals won't use the Clipper chip to encrypt their messages.



"We know we'll have to deal with that," he said.

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