September 16, 1998

FACT SHEET

                              THE WHITE HOUSE

                       Office of the Press Secretary

______________________________________________________________________
For Immediate Release
September 16, 1998


                                FACT SHEET

                 Administration Updates Encryption Policy


    Exports of 56-bit DES and equivalent products (hardware and software)
     will be streamlined (under license exception).  Requirements for key
     recovery plans are eliminated.

    Exports of unlimited strength encryption products (with or without key
     recovery) will be streamlined (under license exception) to certain
     industries.  The sectors are:

    Subsidiaries of U.S. Firms, worldwide (except seven terrorist nations).

    Insurance companies to the same 45 countries recently approved for
     exports to banks and financial institution exports.

    Health and medical organizations (including civilian government health
     agencies) in the same 45 countries.  Does not include
     biochemical/pharmaceutical manufacturers.

    On-line merchants for client-server applications, in the same 45
   countries, with the purpose of securing electronic transactions between
   merchants and their customers.  Does not include manufacturers and
   distributors of items controlled on the U.S. munitions list.

    Key Recovery products will continue to be exportable under license
     exception worldwide (except seven terrorist nations).  Review of
     foreign key recovery agents is eliminated.

    Exports of "recoverable" products will be approved to most commercial
     firms, and their wholly-owned subsidiaries, in a broad range of
     countries under encryption licensing arrangements.  This group of
     countries covers most major commercial markets including Western
     Europe, Japan, and Australia.  The policy does not include service
     providers and manufacturers and distributors of items controlled on
     the U.S. munitions list.

    Exports to end users or destinations outside this policy are possible
     on a case-by-case basis.

    Prior to export, products are subject to a one-time product technical
     review.

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