13 January 2000
(New export regulations enhance electronic commerce) (700) The Clinton administration has issued new encryption export regulations which permit U.S. companies to export any encryption software abroad to other businesses, individuals and other non-government users without a license, the U.S. Commerce Department's Bureau of Export Administration (BXA) says. Commerce Secretary William Daley said January 12 the change "helps business and promotes e-commerce (electronic commerce) by adjusting our regulations to marketplace realities that U.S. companies face when they try to sell their products overseas." Daley said the new regulations also reflect efforts by the United States government to protect privacy and ensure that law enforcement and national security issues are being met. However, sales to foreign governments will still require an export license, BXA said. Under the new regulations, which differ from earlier regulations issued in September 1999, nearly any software program sold in the United States that encrypts data can be sold abroad after a one-time review for an exemption from export license, BXA said. The source code for encryption programs also can be exported without license. Nations restricted from the commercial sale of encryption software are those on the Department of State's terrorist list, including Cuba, Iran, Iraq, Libya, Sudan, Syria and North Korea, BXA said. And, foreign employees of U.S. computer companies working in the United States no longer need an export license to work on encryption, BXA said. Finally, the new guidelines implement agreements reached by the Wassenaar Arrangement in December 1998 by decontrolling 64-bit mass market products, 56-bit encryption items and 512-bit key management products, the BXA announcement said. The new regulations will be published January 14, 2000 in the Federal Register and will be subject to a 120-day public comment period before becoming final, BXA said. Following is the text of the BXA announcement: (begin text) [U.S. Department of Commerce Washington, D.C. January 12, 2000] Commerce Announces Streamlined Encryption Export Regulations Washington -- The U.S. Department of Commerce Bureau of Export Administration (BXA) today issued new encryption export regulations, which implement the new approach announced by the Clinton Administration in September. Today's move permits U.S. companies to export any encryption product around the world to commercial firms, individuals and other non-government end-users under a license exception (i.e., without a license). In addition, "retail" encryption products, which are widely available in the market, can now be exported to any end-user including foreign governments. In most cases, a one-time product review by BXA continues to be required. Post-reporting requirements are reduced to track industry business models. "This policy helps business and promotes e-commerce by adjusting our regulations to marketplace realities that U.S. companies face when they try to sell their products overseas. We've also worked very hard to address privacy concerns and to ensure that our law enforcement and national security concerns are met," said Commerce Secretary William M. Daley. For source code, the regulation reduces controls further than announced in September. Commercial encryption source code, encryption toolkits and components can now be exported under license exception to businesses and non-government end-users for internal use and customization and for the development of new products. In addition, the regulations relax restrictions on publicly available encryption source code, including by posting on the Internet. The regulation further streamlines requirements for U.S. companies by permitting exports of any encryption item to their foreign subsidiaries without a prior review. Foreign employees of U.S. companies working in the United States no longer need an export license to work on encryption. In addition, the guidelines also implement agreements reached by the Wassenaar Arrangement in December 1998 by decontrolling 64-bit mass market products, 56-bit encryption items and 512-bit key management products. Today's changes do not affect restrictions on terrorist supporting states (Cuba, Iran, Iraq, Libya, North Korea, Sudan, and Syria), their nationals, and other sanctioned entities. In developing this regulation, the Administration worked closely with stakeholders to continue a balanced approach. The government will review the workability of the regulation, receiving public comments for 120 days. A final revised rule will be issued shortly thereafter. (end text) (Distributed by the Office of International Information Programs, U.S. Department of State.)