September 16, 1999

FACT SHEET

                              THE WHITE HOUSE

                       Office of the Press Secretary
___________________________________________________________________________
                             ________________
For Immediate Release
September 16, 1999

                                FACT SHEET

              Administration Updates Encryption Export Policy

Today, the Clinton Administration announced a new approach to encryption
policy that includes updates and simplifies export controls.  The major
components of this update are as follows:

Global exports to individuals, commercial firms or other non-governmental
entities

Any encryption commodity or software of any key length can now be exported
under a license exception (i.e., without a license) after a technical
review, to commercial firms and other non-government end users in any
country except for the seven state supporters of terrorism.  Exports
previously allowed only for a company?s internal use can now be used for
communication with other firms, supply chains and customers.  Additionally,
telecommunication and Internet service providers may use any encryption
commodity or software to provide services to commercial firms and
non-government end users.  Previous liberalizations for banks, financial
institutions and other approved sectors are subsumed under this Update.
Exports to governments can be approved under a license.

Global exports of retail products

Retail encryption commodities and software of any key length may be
exported under a license exception (i.e., without a license) after a
technical review, to any recipient in any country except to the seven state
supporters of terrorism.  Retail encryption commodities and software are
those products which do not require substantial support for installation
and use and which are sold in tangible form through independent retail
outlets, or products in tangible or intangible form, which have been
specifically designed for individual consumer use.  There is no restriction
on the use of these products.  Additionally, telecommunication and Internet
service providers may use retail encryption commodities and software to
provide services to any recipient.

Implementation of the December 1998 Wassenaar Arrangement Revisions

Last year, the Wassenaar Arrangement (33 countries which have common
controls on exports, including encryption) made a number of changes to
modernize multilateral encryption controls.  As part of this update, the
U.S. will allow exports without a license of 56 bits DES and equivalent
products, including toolkits and chips, to all users and destinations
(except the seven state supporters of terrorism) after a technical review.
Encryption commodities and software with key lengths of 64-bits or less
which meet the mass market requirements of Wassenaar?s new cryptographic
note will also be eligible for export without a license after a technical
review.

U.S. Subsidiaries

Foreign nationals working in the United States no longer need an export
license to work for U.S. firms on encryption.  This extends the policy
adopted in last year?s update, which allowed foreign nationals to work for
foreign subsidiaries of U.S. firms under a license exception (i.e., without
a license).

Export Reporting

Post-export reporting will now be required for any export to a non-U.S.
entity of any product above 64 bits.  Reporting helps ensure compliance
with our regulations and allows us to reduce licensing requirements.  The
reporting requirements will be streamlined to reflect business models and
practices, and will be based on what companies normally collect.  We intend
to consult with industry on how best to implement this part of the update.

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