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U.S. Relaxes Encryption Export Policy

Move pleases privacy advocates and should make e-commerce safer.

By Margret Johnston, IDG News   

The new export regulations implement a new approach announced by the Clinton administration in September, a change that came after years of pressure by U.S. software companies that considered the government's export controls needlessly restrictive.

U.S. companies can now export any encryption software after a technical review to individuals, commercial firms, or other nongovernment end users in any country, the Department of Commerce says in a release. The new regulations do not change restrictions on exports to countries the U.S. classifies as state supporters of terrorism, including Cuba, Iran, Iraq, Libya, North Korea, Sudan, and Syria.

Exports to government end users still will require a license, the Commerce Department release says.

Under a new category of "retail" encryption products, the regulations permit the export of encryption products widely available in the market to any end user, including those in government. In most cases, however, the U.S. Commerce Department's Bureau of Export Administration will review the product before it can be exported, the release said.

Commerce Secretary William Daley says in a statement that the policy helps business and promotes electronic commerce by adjusting U.S. regulations to marketplace realities that companies face when they try to sell their products overseas. The department worked hard to address privacy concerns and to ensure that U.S. law enforcement and national security concerns are met, Daley adds.

The regulations appear to meet the hopes of industry and congressional officials who were upset by an early draft of the regulations circulated last month.

The Information Technology Industry Council welcomed the regulations, calling them a key ingredient for the continued growth of the IT industry. Rhett Dawson, president of the ITI, says in a statement that the new rules will help maintain the United States' technological leadership around the world and make electronic commerce safer.

Americans for Computer Privacy, a group that advocates use of encryption free of government intrusion, also welcomed the proposal, saying in a statement, "They are more in step with the economic realities of the Information Age, while protecting our nation's vital security and law enforcement needs. And, they strike a balance between security and America's commercial interests."

In issuing the regulations the government also solicited public comment over the next 120 days. After that it will review the regulation and issue a final revised rule.