[Executive Orders]
White House Press Release
MEMORANDUM FOR THE VICE PRESIDENT THE SECRETARY OF STATE THE SECRETARY OF THE TREASURY THE SECRETARY OF DEFENSE THE ATTORNEY GENERAL
THE WHITE HOUSE
Office of the Press Secretary
_______________________________________________________________
For Immediate Release November 15, 1996
November 15, 1996
MEMORANDUM FOR THE VICE PRESIDENT
THE SECRETARY OF STATE
THE SECRETARY OF THE TREASURY
THE SECRETARY OF DEFENSE
THE ATTORNEY GENERAL
THE SECRETARY OF COMMERCE
UNITED STATES TRADE REPRESENTATIVE
DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET
CHIEF OF STAFF TO THE PRESIDENT
DIRECTOR OF CENTRAL INTELLIGENCE
DIRECTOR, FEDERAL BUREAU OF INVESTIGATION
DIRECTOR, NATIONAL SECURITY AGENCY
ASSISTANT TO THE PRESIDENT FOR NATIONAL
SECURITY AFFAIRS
ASSISTANT TO THE PRESIDENT FOR ECONOMIC POLICY
ASSISTANT TO THE PRESIDENT FOR SCIENCE AND
TECHNOLOGY POLICY
SUBJECT: Encryption Export Policy
Encryption products, when used outside the United States, can
jeopardize our foreign policy and national security interests.
Moreover, such products, when used by international criminal
organizations, can threaten the safety of U.S. citizens here
and abroad, as well as the safety of the citizens of other
countries. The exportation of encryption products accordingly
must be controlled to further U.S. foreign policy objectives,
and promote our national security, including the protection of
the safety of U.S. citizens abroad. Nonetheless, because of
the increasingly widespread use of encryption products for the
legitimate protection of the privacy of data and communications
in nonmilitary contexts; because of the importance to U.S.
economic interests of the market for encryption products;
and because, pursuant to the terms set forth in the Executive
order entitled Administration of Export Controls on Encryption
Products (the "new Executive order") of November 15, 1996,
Commerce Department controls of the export of such dual-use
encryption products can be accomplished without compromising
U.S. foreign policy objectives and national security interests,
I have determined at this time not to continue to designate such
encryption products as defense articles on the United States
Munitions List.
Accordingly, under the powers vested in me by the Constitution
and the laws of the United States, I direct that:
1. Encryption products that presently are or would be
designated in Category XIII of the United States Munitions
List and regulated by the Department of State pursuant to
the Arms Export Control Act (22 U.S.C. 2778 et seq.) shall
be transferred to the Commerce Control List, and regulated
by the Department of Commerce under the authority conferred
in Executive Order 12924 of August 19, 1994 (as continued on
August 15, 1995, and August 14, 1996), Executive Order 12981
of December 5, 1995, and the new Executive order except
that encryption products specifically designed, developed,
configured, adapted, or modified for military applications
(including command, control, and intelligence applications),
shall continue to be designated as defense articles, shall
remain on the United States Munitions List, and shall continue
to be controlled under the Arms Export Control Act. The
transfer described in this paragraph shall be effective upon
the issuance of final regulations (the "Final Regulations")
implementing the safeguards specified in this directive and
in the new Executive order.
2. The Final Regulations shall specify that the encryption
products specified in section 1 of this memorandum shall be
placed on the Commerce Control List administered by the
Department of Commerce. The Department of Commerce shall,
to the extent permitted by law, administer the export of such
encryption products, including encryption software, pursuant
to the requirements of sections 5 and 6 of the former Export
Administration Act (50 U.S.C. App. 2405 and 2406), and the
regulations thereunder, as continued in effect by Executive
Order 12924 of August 19, 1994 (continued on August 15, 1995,
and on August 14, 1996), except as otherwise indicated in or
modified by the new Executive order, Executive Order 12981 of
December 5, 1995, and any Executive orders and laws cited
therein.
3. The Final Regulations shall provide that encryption
products described in section 1 of this memorandum can be
licensed for export only if the requirements of the controls
of both sections 5 and 6 of the former Export Administration
Act (50 U.S.C. App. 2405 and 2406), and the regulations
thereunder, as modified by the new Executive order, Executive
Order 12981 of December 5, 1995, and any Executive orders
and laws cited therein, are satisfied. Consistent with
section 742.1(f) of the current Export Administration
Regulations, the Final Regulations shall ensure that a license
for such a product will be issued only if an application can
be and is approved under both section 5 and section 6. The
controls on such products will apply to all destinations.
Except for those products transferred to the Commerce Control
List prior to the effective date of the Final Regulations,
exports and reexports of encryption products shall initially be
subject to case-by-case review to ensure that export thereof
would be consistent with U.S. foreign policy objectives and
national security interests, including the safety of U.S.
citizens. Consideration shall be given to more liberalized
licensing treatment of each such individual product after
interagency review is completed. The Final Regulations shall
also effectuate all other specific objectives and directives set
forth in this directive.
4. Because encryption source code can easily and mechanically
be transformed into object code, and because export of such
source code is controlled because of the code's functional
capacity, rather than because of any "information" such code
might convey, the Final Regulations shall specify that
encryption source code shall be treated as an encryption
product, and not as technical data or technology, for export
licensing purposes.
5. All provisions in the Final Regulations regarding
"de minimis" domestic content of items shall not apply with
respect to the encryption products described in paragraph 1
of this memorandum.
6. The Final Regulations shall, in a manner consistent with
section 16(5)(C) of the EAA, 50 U.S.C. App. 2415(5)(C), provide
that it will constitute an export of encryption source code
or object code software for a person to make such software
available for transfer outside the United States, over radio,
electromagnetic, photooptical, or photoelectric communications
facilities accessible to persons outside the United States,
including transfer from electronic bulletin boards and Internet
file transfer protocol sites, unless the party making the
software available takes precautions adequate to prevent the
unauthorized transfer of such code outside the United States.
7. Until the Final Regulations are issued, the Department of
State shall continue to have authority to administer the export
of encryption products described in section 1 of this memorandum
as defense articles designated in Category XIII of the United
States Munitions List, pursuant to the Arms Export Control Act.
8. Upon enactment of any legislation reauthorizing the
administration of export controls, the Secretary of Defense,
the Secretary of State, and the Attorney General shall reexamine
whether adequate controls on encryption products can be
maintained under the provisions of the new statute and advise
the Secretary of Commerce of their conclusions as well as any
recommendations for action. If adequate controls on encryption
products cannot be maintained under a new statute, then such
products shall, where consistent with law, be designated or
redesignated as defense articles under 22 U.S.C. 2778(a)(1),
to be placed on the United States Munitions List and controlled
pursuant to the terms of the Arms Export Control Act and the
International Traffic in Arms Regulations. Any disputes
regarding the decision to designate or redesignate shall be
resolved by the President.
WILLIAM J. CLINTON