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14 August 1999

    Clinton Encryption Documents 1993-99

    ==============================================================

    1993

    April 16, 1993

    Clipper Chip Initiative

    September 15, 1993

    The National Information Infrastructure: Agenda for Action

    Action:  Review of encryption technology.

    November 4, 1993

    Review of Federal policies on encryption technology

    1994

    February 4, 1994

    Statement by Press Secretary Dee Dee Myers on a comprehensive

    interagency review of encryption technology [document not found]

    May 27, 1994

    Reengineering Through Information Technology

    1995

    None

    1996

    November 15, 1996

    Letter to Congressional Leaders on Encryption Export Policy

    November 15, 1996

    Memorandum on Encryption Export Policy

    November 15, 1996

    Executive Order 13026--Administration of Export Controls on Encryption

    Products

    1997

    December 22, 1997

    President appoints Steven S. Honigman as Special Advisor for procurement

    of encryption technology and services.

    1998

    September 16, 1998

    Transcript of a press briefing by Vice President Al Gore, Deputy Chief

    of Staff John Podesta, Principal Associate Deputy Attorney General

    Robert Litt, FBI Assistant Director Carolyn Morris, Under Secretary of

    Commerce William Reinsch, Deputy Secretary of Defense Jim Hamre, and

    Deputy National Security Adviser Jim Steinberg on administration updates

    in encryption policy

    September 16, 1998

    Statement by the Press Secretary: Administration Updates Encryption

    Policy

    September 16, 1998

    Fact sheet: Administration Updates Encryption Policy

    September 25, 1998

    President's Remarks at a Democratic National Committee Dinner in San Jose,

    California

    1999

    None to August 14

    1993

    http://www.pub.whitehouse.gov/uri-res/I2R?urn:pdi://oma.eop.gov.us/1993/4/19/6.text.1

                             THE WHITE HOUSE

                      Office of the Press Secretary

    _________________________________________________________________

    For Immediate Release                        April 16, 1993

                     STATEMENT BY THE PRESS SECRETARY

    The President today announced a new initiative that will bring

    the Federal Government together with industry in a voluntary

    program to improve the security and privacy of telephone

    communications while meeting the legitimate needs of law

    enforcement.

    The initiative will involve the creation of new products to

    accelerate the development and use of advanced and secure

    telecommunications networks and wireless communications links.

    For too long, there has been little or no dialogue between our

    private sector and the law enforcement community to resolve the

    tension between economic vitality and the real challenges of

    protecting Americans.  Rather than use technology to accommodate

    the sometimes competing interests of economic growth, privacy and

    law enforcement, previous policies have pitted government against

    industry and the rights of privacy against law enforcement.

    Sophisticated encryption technology has been used for years to

    protect electronic funds transfer.  It is now being used to

    protect electronic mail and computer files.  While encryption

    technology can help Americans protect business secrets and the

    unauthorized release of personal information, it also can be used

    by terrorists, drug dealers, and other criminals.

    A state-of-the-art microcircuit called the "Clipper Chip" has

    been developed by government engineers.  The chip represents a

    new approach to encryption technology.  It can be used in new,

    relatively inexpensive encryption devices that can be attached to

    an ordinary telephone.  It scrambles telephone communications

    using an encryption algorithm that is more powerful than many in

    commercial use today.

    This new technology will help companies protect proprietary

    information, protect the privacy of personal phone conversations

    and prevent unauthorized release of data transmitted

    electronically.  At the same time this technology preserves the

    ability of federal, state and local law enforcement agencies to

    intercept lawfully the phone conversations of criminals.

    A "key-escrow" system will be established to ensure that the

    "Clipper Chip" is used to protect the privacy of law-abiding

    Americans.  Each device containing the chip will have two unique

    "keys," numbers that will be needed by authorized government

    agencies to decode messages encoded by the device.  When the

    device is manufactured, the two keys will be deposited separately

    in two "key-escrow" data bases that will be established by the

    Attorney General.  Access to these keys will be limited to

    government officials with legal authorization to conduct a

    wiretap.

    The "Clipper Chip" technology provides law enforcement with no

    new authorities to access the content of the private

    conversations of Americans.

    To demonstrate the effectiveness of this new technology, the

    Attorney General will soon purchase several thousand of the new

    devices.  In addition, respected experts from outside the

    government will be offered access to the confidential details of

    the algorithm to assess its capabilities and publicly report

    their findings.

    The chip is an important step in addressing the problem of

    encryption's dual-edge sword:  encryption helps to protect the

    privacy of individuals and industry, but it also can shield

    criminals and terrorists.  We need the "Clipper Chip" and other

    approaches that can both provide law-abiding citizens with access

    to the encryption they need and prevent criminals from using it

    to hide their illegal activities.  In order to assess technology

    trends and explore new approaches (like the key-escrow system),

    the President has directed government agencies to develop a

    comprehensive policy on encryption that accommodates:

              the privacy of our citizens, including the need to

              employ voice or data encryption for business purposes;

              the ability of authorized officials to access telephone

              calls and data, under proper court or other legal

              order, when necessary to protect our citizens;

              the effective and timely use of the most modern

              technology to build the National Information

              Infrastructure needed to promote economic growth and

              the competitiveness of American industry in the global

              marketplace; and

              the need of U.S. companies to manufacture and export

              high technology products.

    The President has directed early and frequent consultations with

    affected industries, the Congress and groups that advocate the

    privacy rights of individuals as policy options are developed.

    The Administration is committed to working with the private

    sector to spur the development of a National Information

    Infrastructure which will use new telecommunications and computer

    technologies to give Americans unprecedented access to

    information.  This infrastructure of high-speed networks

    ("information superhighways") will transmit video, images, HDTV

    programming, and huge data files as easily as today's telephone

    system transmits voice.

    Since encryption technology will play an increasingly important

    role in that infrastructure, the Federal Government must act

    quickly to develop consistent, comprehensive policies regarding

    its use.  The Administration is committed to policies that

    protect all American's right to privacy while also protecting

    them from those who break the law.

    Further information is provided in an accompanying fact sheet.

    The provisions of the President's directive to acquire the new

    encryption technology are also available.

    For additional details, call Mat Heyman, National Institute of

    Standards and Technology, (301) 975-2758.

    http://www.pub.whitehouse.gov/uri-res/I2R?urn:pdi://oma.eop.gov.us/1993/9/16/17.text.1

                     THE NATIONAL INFORMATION INFRASTRUCTURE:

                                AGENDA FOR ACTION

                               15 September 1993

             Action:  Review of encryption technology.  In April, the

             President announced a thorough review of Federal policies on

             encryption technology.  In addition, Federal agencies are

             working with industry to develop new technologies that

             protect the privacy of citizens, while enabling law

             enforcement agencies to continue to use court-authorized

             wiretaps to fight terrorism, drug rings, organized crime,

             and corruption.  Federal agencies are working with industry

             to develop encryption hardware and software that can be used

             for this application.

    http://www.pub.whitehouse.gov/uri-res/I2R?urn:pdi://oma.eop.gov.us/1993/11/4/6.text.1

         The Administration is completing a Presidentially directed

    review of Federal policies on encryption technology. In addition,

    Federal agencies are seeking to work more closely with industry

    to develop new technologies that protect the privacy of citizens,

    while enabling law enforcement agencies to continue to use

    court-authorized wiretaps to fight terrorism, drug rings,

    organized crime, and corruption.

    1994

    http://www.access.gpo.gov/nara/nara003.html

    [Weekly Compilation of Presidential Documents]

    From the 1994 Presidential Documents Online via GPO Access [frwais.access.gpo.gov]

    [DOCID:pd07fe94_txt-36]

    [Page 214-215]

    Monday, February 7, 1994

    Volume 30--Number 5

    Pages 167-215

    Week Ending Friday, February 4, 1994

    ________________________________________________________________________

    Checklist of White House Press Releases

    Released February 4

    Statement by Press Secretary Dee Dee Myers on a comprehensive

    interagency review of encryption technology

    [Document could not be located.]

    http://www.pub.whitehouse.gov/uri-res/I2R?urn:pdi://oma.eop.gov.us/1994/5/27/5.text.1

                                THE WHITE HOUSE

                          Office of the Vice President

    ________________________________________________________________________

    For Immediate Release                                       May 27, 1994

              *****************************************************

              Reengineering Through Information Technology - Part I

              *****************************************************

             Accompanying Report of the National Performance Review

                                 September 1993

    [Excerpts]

          Success in implementing electronic government also depends on

     public confidence. Electronic government must protect the information it

     processes and ensure individual privacy. It also must protect national

     security interests, permit legitimate law enforcement activities,

     enhance global competitiveness and productivity for American business

     and industry, and ensure civil liberties. The government must define

     uniform privacy protection practices and generally accepted principles

     for information security. It also must adopt a digital signature

     standard, and it must promulgate encryption standards for sensitive

     information.

    ***

          However, interoperability across these different radio systems is

     difficult to achieve. Federal, state, and local law enforcement agencies

     operate in different parts of the radio spectrum. Complicating this

     problem is the lack of security on most systems, leaving them open to

     interception and monitoring. When security is applied to the radio

     systems--as isdone with many federal radio systems--interoperability

     depends on having the correct encryption key to communicate.

    ***

              *****************************************************

              Reengineering through Information Technology-- Part 2

              *****************************************************

     ********************************************************************

     IT10:  Develop Systems and Mechanisms to Ensure Privacy and Security

     ********************************************************************

     3. Develop standard encryption capabilities and digital signatures for

     sensitive unclassified data. (2)

          The National Institute of Standards and Technology (NIST), in

     coordination with OMB and with technical assistance from the National

     Security Agency (NSA), should issue a final digital signature standard

     by December 1994. NIST, in coordination with OMB and with technical

     assistance from NSA, should also create opportunities for industry to

     develop the encryption capabilities required for protection of networked

     distributed systems. NIST should then make that information available to

     federal managers. A high priority should also be given to finalizing and

     promulgating digital encryption standards and security protocol

     standards.

     4. Develop generally accepted principles and practices for information

     security. (2)

          NIST, in coordination with OMB and with technical assistance from

     NSA, should plan and coordinate the development of generally accepted

     principles and practices for information security which are to be

     applied in the use, protection, and design of government information and

     data systems, particularly front-line systems for electronically

     delivering service to citizens. Draft guidance should be issued by

     September 1994. More than one set of generally accepted principles and

     practices may be required for the affected communities.

    ***

    7. Reevaluate security practices related to national security data. (2)

          By December 1994, the PRD Task Force--chaired by the Information

     Security Oversight Office, in cooperation with the Joint Security

     Commission, and the National Advisory Group for Security

     Countermeasures--should aggressively pursue a reevaluation of

     information security and information systems security practices. These

     groups should also examine classification and safeguard practices for

     the purposes of improving security within rapidly changing technological

     and threat environments. This reevaluation should be accomplished within

     the context of the Presidential Review Directives on national security

     information and advanced telecommunications and encryption, as well as

     the Presidential Decision Directive on public encryption management.

    1995

    None.

    1996

    http://www.access.gpo.gov/nara/nara003.html

    [Weekly Compilation of Presidential Documents]

    From the 1996 Presidential Documents Online via GPO Access [frwais.access.gpo.gov]

    [DOCID:pd18no96_txt-21]

    [Page 2401]

    Monday, November 18, 1996

    Volume 32--Number 46

    Pages 2359-2403

    Week Ending Friday, November 15, 1996

    Letter to Congressional Leaders on Encryption Export Policy

    November 15, 1996

    Dear Mr. Speaker:  (Dear Mr. President:)

        In order to take additional steps with respect to the national

    emergency described and declared in Executive Order 12924 of August 19,

    1994, and continued on August 15, 1995, and August 14, 1996,

    necessitated by the expiration of the Export Administration Act (EAA) on

    August 20, 1994, I hereby report to the Congress that pursuant to

    section 204(b) of the International Emergency Economic Powers Act, 50

    U.S.C. 1703(b) (the ``Act''), I have today exercised the authority

    granted by the Act to issue an Executive order (a copy of which is

    attached) to revise the provisions that apply to the administration of

    the export control system maintained by Department of Commerce in the

    Export Administration Regulations, 15 CFR Part 730 et seq.

        The new Executive order relates to my decision to transfer certain

    encryption products from the United States Munitions List administered

    by the Department of State to the Commerce Control List administered by

    the Department of Commerce. When I made that decision I also decided to

    amend Executive Order 12981 of December 5, 1995, which sets forth

    procedures for the interagency review and disposition of dual-use export

    license applications, to include the Department of Justice among the

    agencies that have the opportunity to review such applications with

    respect to encryption products transferred to Department of Commerce

    control.

        Also, in issuing the new order, I provided for appropriate controls

    on the export and foreign dissemination of encryption products

    transferred to the Department of Commerce. Among other provisions, I

    determined that the export of encryption products transferred to

    Department of Commerce control could harm national security and foreign

    policy interests of the United States even where comparable products are

    or appear to be available from foreign sources. Accordingly, the new

    order makes clear that any EAA provision dealing with issuance of

    licenses or removal of controls based on foreign availability

    considerations shall not apply with respect to export controls on such

    encryption products. Notwithstanding this, the Secretary of Commerce

    retains the discretion to consider the foreign availability of

    comparable encryption products in any particular case.

        Sincerely,

                                                William J. Clinton

    Note: Identical letters were sent to Newt Gingrich, Speaker of the House

    of Representatives, and Albert Gore, Jr., President of the Senate.

    http://www.access.gpo.gov/nara/nara003.html

    [Weekly Compilation of Presidential Documents]

    From the 1996 Presidential Documents Online via GPO Access [frwais.access.gpo.gov]

    [DOCID:pd18no96_txt-19]

    [Page 2397-2399]

    Monday, November 18, 1996

    Volume 32--Number 46

    Pages 2359-2403

    Week Ending Friday, November 15, 1996

    Memorandum on Encryption Export Policy

    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

    [[Page 2398]]

    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

    [[Page 2399]]

    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

    http://www.access.gpo.gov/nara/nara003.html

    [Weekly Compilation of Presidential Documents]

    From the 1996 Presidential Documents Online via GPO Access [frwais.access.gpo.gov]

    [DOCID:pd18no96_txt-20]

    [Page 2399-2400]

    Monday, November 18, 1996

    Volume 32--Number 46

    Pages 2359-2403

    Week Ending Friday, November 15, 1996

    Executive Order 13026--Administration of Export Controls on Encryption

    Products

    November 15, 1996

        By the authority vested in me as President by the Constitution and

    the laws of the United States of America, including but not limited to

    the International Emergency Economic Powers Act (50 U.S.C. 1701 et

    seq.), and in order to take additional steps with respect to the

    national emergency described and declared in Executive Order 12924 of

    August 19, 1994, and continued on August 15, 1995, and on August 14,

    1996, I, William J. Clinton, President of the United States of America,

    have decided that the provisions set forth below shall apply to

    administration of the export control system maintained by the Export

    Administration Regulations, 15 CFR Part 730 et seq. (``the EAR'').

    Accordingly, it is hereby ordered as follows:

        Section 1. Treatment of Encryption Products. In order to provide for

    appropriate controls on the export and foreign dissemination of

    encryption products, export controls of encryption products that are or

    would be, on this date, designated as defense articles in Category XIII

    of the United States Munitions List and regulated by the United States

    Department of State pursuant to the Arms Export Control Act, 22 U.S.C.

    2778 et seq. (``the AECA''), but that subsequently are placed on the

    Commerce Control List in the EAR, shall be subject to the following

    conditions: (a) I have determined that the export of encryption products

    described in this section could harm national security and foreign

    policy interests even where comparable products are or appear to be

    available from sources outside the United States, and that facts and

    questions concerning the foreign availability of such encryption

    products cannot be made subject to public disclosure or judicial review

    without revealing or implicating classified information that could harm

    United States national security and foreign policy interests.

    Accordingly, sections 4(c) and 6(h)(2)-(4) of the Export Administration

    Act of 1979 (``the EAA''), 50 U.S.C. App. 2403(c) and 2405(h)(2)-(4), as

    amended and as continued in effect by Executive Order 12924 of August

    19, 1994, and by notices of August 15, 1995, and August 14, 1996, all

    other analogous provisions of the EAA relating to foreign availability,

    and the regulations in the EAR relating to such EAA provisions, shall

    not be applicable with respect to export controls on

    such encryption products. Notwithstanding this, the Secretary of Commerce

    (``Secretary'') may, in his discretion, consider the foreign availability

    of comparable encryption products in determining whether to issue a license

    in a particular case

    [[Page 2400]]

    or to remove controls on particular products, but is not required to issue

    licenses in particular cases or to remove controls on particular products

    based on such consideration;

        (b) Executive Order 12981, as amended by Executive Order 13020 of

    October 12, 1996, is further amended as follows:

        (1) A new section 6 is added to read as follows:

        ``Sec. 6. Encryption Products. In conducting the license review

    described in section 1 above, with respect to export controls of

    encryption products that are or would be, on November 15, 1996,

    designated as defense articles in Category XIII of the United States

    Munitions List and regulated by the United States Department of State

    pursuant to the Arms Export Control Act, 22 U.S.C. 2778 et seq., but

    that subsequently are placed on the Commerce Control List in the Export

    Administration Regulations, the Departments of State, Defense, Energy,

    and Justice and the Arms Control and Disarmament Agency shall have the

    opportunity to review any export license application submitted to the

    Department of Commerce. The Department of Justice shall, with respect to

    such encryption products, be a voting member of the Export

    Administration Review Board described in section 5(a)(1) of this order

    and of the Advisory Committee on Export Policy described in section

    5(a)(2) of this order. The Department of Justice shall be a full member

    of the Operating Committee of the ACEP described in section 5(a)(3) of

    this order, and of any other committees and consultation groups

    reviewing export controls with respect to such encryption products.''

        (2) Sections 6 and 7 of Executive Order 12981 of December 5, 1995,

    are renumbered as new sections 7 and 8, respectively.

        (c) Because the export of encryption software, like the export of

    other encryption products described in this section, must be controlled

    because of such software's functional capacity, rather than because of

    any possible informational value of such software, such software shall

    not be considered or treated as ``technology,'' as that term is defined

    in section 16 of the EAA (50 U.S.C. App. 2415) and in the EAR (61 Fed.

    Reg. 12714, March 25, 1996);

        (d) With respect to encryption products described in this section,

    the Secretary shall take such actions, including the promulgation of

    rules, regulations, and amendments thereto, as may be necessary to

    control the export of assistance (including training) to foreign persons

    in the same manner and to the same extent as the export of such

    assistance is controlled under the AECA, as amended by section 151 of

    Public Law 104-164;

        (e) Appropriate controls on the export and foreign dissemination of

    encryption products described in this section may include, but are not

    limited to, measures that promote the use of strong encryption products

    and the development of a key recovery management infrastructure; and

        (f) Regulation of encryption products described in this section

    shall be subject to such further conditions as the President may direct.

        Sec. 2. Effective Date. The provisions described in section 1 shall

    take effect as soon as any encryption products described in section 1

    are placed on the Commerce Control List in the EAR.

        Sec. 3. Judicial Review. This order is intended only to improve the

    internal management of the executive branch and to ensure the

    implementation of appropriate controls on the export and foreign

    dissemination of encryption products. It is not intended to, and does

    not, create any rights to administrative or judicial review, or any

    other right or benefit or trust responsibility, substantive or

    procedural, enforceable by a party against the United States, its

    agencies or instrumentalities, its officers or employees, or any other

    person.

                                                William J. Clinton

    The White House,

    November 15, 1996.

    [Filed with the Office of the Federal Register, 8:45 a.m., November 18,

    1996]

    Note: This Executive order will be published in the Federal Register on

    November 19.

    [[Page 2401]]

    1997

    http://www.pub.whitehouse.gov/uri-res/I2R?urn:pdi://oma.eop.gov.us/1997/12/27/7.text.1

                                 THE WHITE HOUSE

                          Office of the Press Secretary

    ________________________________________________________________________

    For Immediate Release                                  December 22, 1997

                       PRESIDENT NAMES STEVEN S. HONIGMAN

                       AS SPECIAL ADVISOR TO THE PRESIDENT

        The President today announced the appointment of Steven S. Honigman

    as Special Advisor to the President.  Mr. Honigman will bring senior

    level and government-wide leadership to the Administration's

    procurement of encryption technology and services.

        Mr. Honigman's responsibilities will include assuring that agency

    procurement policies, requirements, practices and programs are

    coordinated and consistent with Administration encryption policies.

    He will also coordinate agency encryption pilot projects and bring

    them to production, promote public-private standards development, and

    maintain a dialogue with the public about these efforts.  His work will

    require consultation with all major Federal agencies, White House

    policy offices, the Congress, market participants, foreign entities

    and the private sector.

        Mr. Honigman has served since June 1993 as the General Counsel of

    the Navy.  In that position, he has been the Department of the Navy's

    chief legal officer and the principal legal advisor to the Secretary

    of the Navy.  As Navy General Counsel, he has been a leader in

    acquisition reform and procurement-related litigation.

        Mr. Honigman was born in Brooklyn, New York.  He received his B.A.

    degree from New York University and his J.D. degree from Yale Law

    School.  Mr. Honigman has practiced as a civil litigator in New York

    City.  His areas of specialization included international and domestic

    reinsurance and insurance disputes, transactions and insolvencies.

    ###

    1998

    http://www.access.gpo.gov/nara/nara003.html

    [Weekly Compilation of Presidential Documents]

    From the 1998 Presidential Documents Online via GPO Access [frwais.access.gpo.gov]

    [DOCID:pd21se98_txt-38]

    [Page 1832]

    Monday, September 21, 1998

    Volume 34--Number 38

    Pages 1769-1832

    Week Ending Friday, September 18, 1998

    ________________________________________________________________________

    Checklist of White House Press Releases

    ________________________________________________________________________

    The following list contains releases of the Office of the Press

    Secretary that are neither printed as items nor covered by entries in

    the Digest of Other White House Announcements.

    ________________________________________________________________________

    September 16, 1998

    Transcript of a press briefing by Vice President Al Gore, Deputy Chief

    of Staff John Podesta, Principal Associate Deputy Attorney General

    Robert Litt, FBI Assistant Director Carolyn Morris, Under Secretary of

    Commerce William Reinsch, Deputy Secretary of Defense Jim Hamre, and

    Deputy National Security Adviser Jim Steinberg on administration updates

    in encryption policy

    http://www.pub.whitehouse.gov/uri-res/I2R?urn:pdi://oma.eop.gov.us/1998/9/16/11.text.1

                                THE WHITE HOUSE

                         Office of the Press Secretary

    ________________________________________________________________________

    For Immediate Release                                 September 16, 1998

                              PRESS BRIEFING BY

                              THE VICE PRESIDENT,

                     DEPUTY CHIEF OF STAFF JOHN PODESTA,

            PRINCIPAL ASSOCIATE DEPUTY ATTORNEY GENERAL ROBERT LITT,

                 ASSISTANT DIRECTOR OF THE FBI CAROLYN MORRIS,

                  UNDER SECRETARY OF COMMERCE WILLIAM REINSCH,

                  DEPUTY SECRETARY OF DEFENSE JOHN HAMRE,

              AND DEPUTY NATIONAL SECURITY ADVISOR JIM STEINBERG

                             The Briefing Room

    11:57 A.M. EDT

          THE VICE PRESIDENT:  Good morning.  While my colleagues are coming

    in here, let me acknowledge them.  John Podesta is going to take over

    the podium after I complete my statement, and he is joined by Bob Litt

    of the Justice Department, Bill Reinsch of the Commerce Department --

    Under Secretary for the Export Administration -- and John Hamre, Deputy

    Secretary of Defense.

          I also want to acknowledge Carolyn Morris of the FBI; Barbara

    McNamara of the National Security Agency; John Gordon, Deputy Director

    of the CIA.  And you all should know that this process, the results of

    -- the interim results of which I'm announcing here, is a process that

    has been run principally by John Podesta and Jim Steinberg, Deputy at

    the National Security Council.  And I also want to thank Sally Katzen at

    the NEC and David Beier on my staff for the work that they and many

    others have done on this.

          Some of you who have followed this issue know that it is probably

    one of the single, most difficult and complex issues that you can

    possibly imagine.  But we've made progress, and we're here this morning

    to announce an important new action that will protect our national

    security and our safety, and advance our economic interests and

    safeguard our basic rights and values in this new Information Age.

          The Information Age has brought us the Internet, an

    inter-connected global economy and the promise of connecting us all to

    the same vast world of knowledge.  But with that exciting promise comes

    new challenges.  We must make sure that in the Information Age you get

    information about the rest of the world and not the other way around.

    We must ensure that new technology does not mean new and sophisticated

    criminal and terrorist activity which leaves law enforcement outmatched

    -- we can't allow that to happen.  And we must ensure that the sensitive

    financial and business transactions that now cruise along the

    information superhighway are 100 percent safe in cyberspace.

          Balancing these needs is no simple task, to say the least.  That

    is why, in taking the next step toward meeting these complex goals, we

    worked very closely with members of Congress from both parties, House

    and Senate; with industry; with our law enforcement community and with

    our national security community.  And as we move forward we want to keep

    working closely with all who share a stake in this issue -- especially

    law enforcement -- to constantly assess and reassess the effectiveness

    of our actions in this fast changing medium.

          Today I'm pleased to announce a new federal policy for the

    encryption and protection of electronic communication, a policy that

    dramatically increases privacy and security for families and businesses

    without endangering out national security.

          Beginning today, American companies will be able to use encryption

    programs of unlimited strength when communicating between most

    countries.  Health, medical, and insurance companies will be able to use

    far stronger electronic protection for personal records and information.

    Law enforcement will still have access to criminally-related information

    under strict and appropriate legal procedures.  And we will maintain our

    full ability to fight terrorism and monitor terrorist activity that

    poses a grave danger to American citizens.

          With this new announcement, we will protect the privacy of average

    Americans, because privacy is a basic value in the Information Age,

    indeed in any age.  We will give industry the full protection that it

    needs to enable electronic commerce to grow and to thrive.  And we will

    give law enforcement the ability to fight 21st century crimes with 21st

    century technology, so our families and businesses are safe, but on-line

    outlaws are not safe.

          In just a moment you will hear more of the details of this new

    policy, but I want to conclude by saying that this policy does reflect

    one of the greatest challenges of these new times.  And to state it

    broadly, it's a challenge of how we can harness powerful new technology

    while protecting our oldest and most cherished values, such as privacy

    and safety.

          I'm grateful to those who have worked so hard to reach this

    balance.  And with today's announcement I believe that all families and

    businesses have reason to feel safer, more secure and more confident as

    we approach the 21st century.

          And now I'd like to turn things over to White House Deputy Chief

    of Staff John Podesta.

          Q Mr. Vice President, before you go, can you tell us what you say

    to Democratic lawmakers who say the President ought to resign?

          THE VICE PRESIDENT:  I disagree.

          Q How about the release of that tape?  What do you think --

          THE VICE PRESIDENT:  The President is going to have a press

    conference shortly and I'm sure that you will not miss the opportunity

    at this national security press conference with the leader of a foreign

    country to raise all these questions.

          Q   What about the videotape, should it be released?

          Q It was staged by the White House -- you know that, don't you?

          MR. PODESTA:  Guess what?  I'm here to talk about encryption.

    Okay.  I can see the front row leaving here.  (Laughter.)  As the Vice

    President noted, Jim Steinberg and I have co-chaired our process in this

    matter.  I volunteered for that duty because of my well-known

    fascination with The X Files, which most of you know about.

          As you know, this is an important and challenging issue that

    affects many of our interests in our society.  And over the past year

    we've promoted a balanced approach to the issue, working with all

    segments of our government and working with industry to find a policy

    that promotes electronic commerce, preserves privacy, protects national

    security and law enforcement interests, and permits U.S. industry to

    secure global markets.

          Recognizing the importance of moving this issue forward, last

    March the Vice President asked us to intensify our dialogue with U.S.

    industry, to bring industry's technical expertise to bear on this issue

    with the hope of finding more innovative ways that we might assist law

    enforcement.  We appreciate the efforts of Congress, the law enforcement

    community and particularly the industry groups.

          I would note the Computer Systems Policy Project and the Americans

    for Computer Privacy, who have been in an intensive dialogue with us

    over the past many months to foster an environment that has allowed us

    to come up with a policy which we believe has balanced the elements that

    are necessary in this regard.

          I think all the stakeholders in this process, on our side, as well

    as on private industry's side, now have a greater appreciation of the

    issues and intend to continue the dialogue, which I think we're most

    pleased by.  Again, I think some of the people here from industry will

    be available at the stakeout later to take some comment.

          Based on the ideas discussed among the various stakeholders, today

    we're proposing an update to our policies that we've announced in the

    past.  I'm going to serve kind of as M.C.  We're going to start off with

    Bob Litt from the Justice Department and Carol Morris, who I asked to

    join us, from the FBI, to talk about the law enforcement-FBI concerns.

    Then we're going to turn to Bill Reinsch from the Commerce Department to

    talk about export control and electronic commerce.  And finally you'll

    hear from Dr. Hamre from the Defense Department.  I might ask Jim also

    to join us up here.

          Before I give up the floor to Bob and Carol, though, I want to

    stress that encryption policy is an ongoing process.  It's one of

    adaptation; it's an evolutionary process.  We intend to continue the

    dialogue, and over the course of the next year, determine what further

    updates are necessary as we work with industry to try to, again, come up

    with a policy that balances national security, law enforcement, and the

    real needs for privacy and security in electronic commerce.

          Thank you.  Let me turn it over to Bob.

          MR. LITT:  Thank you, John.  Good afternoon.  The Justice

    Department and the FBI and law enforcement in general is supportive,

    very supportive of today's announcement on the updating of our export

    controls on encryption products, particularly with respect to those

    products that allow law enforcement to obtain lawful access to the plain

    text of encrypted information.

          We have been very encouraged over the last few months by

    industry's efforts to work with us to develop and market strong

    encryption products that provide law-abiding citizens with the ability

    to protect the privacy of their communications and their

    electronically-stored data, while at the same time maintaining law

    enforcement's ability to ensure public safety when these products, when

    they become commercially available, are used in furtherance of serious

    criminal activity.

          Our goal is through whatever means to ensure that when we have the

    lawful authority to take steps to protect public safety, we have the

    ability to do so.  And we have been working cooperatively with industry

    for many months to develop approaches that will deal with that.

          Carolyn Morris will now talk a little bit about the technical

    support center that is being proposed.

          MS. MORRIS:  Thank you very much, Bob.

          Good afternoon, ladies and gentlemen.  We in federal, state, and

    local law enforcement, are pleased with the administration's support to

    establish a technical support center.  This center will provide federal,

    state, and local law enforcement with the resources and the technical

    capabilities we need to fulfill our investigative responsibilities.

          In light of strong, commercially available encryption products

    that are being proliferated within the United States, and when such

    products are used in the furtherance of serious criminal activity, this

    center becomes very, very critical to solving the encryption issues that

    we need to make cases.  As a matter of fact, the FBI has already begun

    planning activities of this critical technical support center in

    anticipation of the availability of funds.

          The United States federal, local and state law enforcement

    community looks forward to a cooperative partnership with American

    industry, the Congress and the administration to ensure that this

    technical support center becomes a reality in the near future.  With

    this center the American people can be assured that federal, state, and

    local law enforcement has the necessary resources and tools we need to

    fulfill our public safety mission.

          Thank you very much.

          UNDER SECRETARY REINSCH:  With respect to export controls, the

    administration is updating its policy in three areas:  Our existing

    policy and some revisions there, an expansion with respect to certain

    sectors, and an expansion with respect to so-called recoverable

    products.  And let me address each of these separately.  In keeping with

    the administration's reinvention initiatives, I'm going to try to do it

    in plain language -- or plain English, So that those of you that speak

    the vocabulary of encryption may find it to elementary, but we can go

    back and do it again in another language, if you want, later on in

    questions.

          With respect to our existing policy, we have for two years ending

    this December, permitted the export of 56-bit products after an initial

    one-time review without further review by the government.  What we're

    announcing today is the maintenance of that window permanently.  And so

    56-bit products will be freed from export controls after a one-time

    review, in perpetuity, not ending at the end of this year.  We are,

    however, removing the requirement for key recovery plans or key recovery

    commitments to be provided in return for that change, which was the

    initial condition that we extracted.

          In addition, we are continuing to permit the export of key

    recovery products -- products that contain those features -- without

    restraint worldwide.  We are, however, going to simplify significantly

    our regulations that relate to those exports.  In particular, we're

    going to eliminate the need for six-month progress reports for the plans

    that have been submitted, and we're going to eliminate the requirement

    for any prior reporting of key recovery agent information.  For those of

    you that follow the regulations in detail, that means we're going to

    eliminate Supplement Five of our regulations on these matters.

          Now, with respect to sectors, we're making some new innovations in

    four areas.  Some of you may be familiar with the fact that some time

    ago we announced expanded treatment of encryption products for export to

    banks and financial institutions.  And what we did at that time,

    briefly, was to permit the export of encryption products of any length,

    any bit length, with or without key recovery features to banks and

    financial institutions in a list of 45 countries.

          What we are announcing today is, first, that we are adding

    insurance companies to the definition of financial institutions, so

    insurance companies will be treated the same way under this policy as

    banks and other financial institutions are now.  In addition, we are

    providing the same kind of treatment for exports of these encryption

    products to the health and medical sector operating in the same set of

    countries.  We are excluding from that biochemical and pharmaceutical

    producers.  But the rest of the health and medical sector will be the

    beneficiary of the same kind of treatment.

          In addition, we are providing also this expanded treatment for

    that country group to on-line merchants that are operating in those

    countries.  That means that for products that are like client-server

    applications, like SSL, will be able to be exported to those

    destinations.

          All these things will take place under what we call license

    exception, which means after initial one-time review to determine

    whether or not your product is, in fact, what you say it is, they can

    then go without any further review or intervention by the government to

    those locations.  In addition, there is always the option in the export

    control system of coming in with an application to export these kinds of

    products to other destinations beyond the ones that I'm talking about

    right now, and those will be reviewed one by one on their merits.

          Finally, with respect to what we have come to refer to as a class

    of so-called recovery capable or recoverable products, and these are the

    products that, among others, include what has become known as the

    doorbell products, which are products that, among other things, will

    deal with the development of local area or wide area networks and the

    transmission of e-mail and other data over networks -- we are going to

    permit the export of those products under a presumption of approval and

    an export licensing arrangement to a list of 42 countries.  And within

    those countries we are going to permit that export to commercial firms

    only within those countries.  And both in that case and in the case of

    the on-line merchants that I referred to a few minutes ago, we are going

    to exclude manufacturers or distributors of munitions items, I think for

    obvious reasons.

          We can go into further details later, if you would like.  I think

    for those of you that are interested in the nitty-gritty of all this

    stuff, BXA intends to post all the details, including the country lists,

    on its website and we should have that up later today.

          Thank you.

          DEPUTY SECRETARY HAMRE:  Good morning.  I'm here to speak on

    behalf of the national security community.  I'm joined today by my

    enormously capable counterparts and colleagues, Deputy Director Barbara

    McNamara for the National Security Agency; and Deputy Director John

    Gordon from the Central Intelligence Agency.

          The national security establishment strongly supports this step

    forward.  We think this is a very important advance in a crucial area

    for our security in the future.

          We in DOD had four goals when we entered these discussions.  First

    was to strengthen our ability to do electronic commerce.  We're the

    largest company in the world.  Every month we write about 10 million

    paychecks.  We write about 800,000 travel vouchers.  One of our finance

    centers disburses $45 million an hour.  We are a major, major force in

    business.  And for that reason, we can't be efficient unless we can

    become fully electronic, and electronic commerce is essential for us.

    And this is an enormous step forward.

          Second, we must have strong encryption and a security structure

    for that in order to protect ourselves in cyberspace.  Many of you know

    that we have experienced a number of cyber attacks during the last year.

    This will undoubtedly increase in the future.  We need to have strong

    encryption because we're operating over public networks; 95 percent of

    all of our communications now go over public infrastructure -- public

    telephone lines, telephone switches, computer systems, et cetera.  To

    protect ourselves in that public environment, we must have encryption

    and we must have a key recovery system for ourselves.

          The third goal that we had was to help protect America's

    infrastructure.  One of the emerging national security challenges of the

    next decade is to protect this country, the homeland defense of this

    country, against attack.  We must have strong encryption in order to do

    that, because most of this infrastructure now is being managed through

    distributed computer-based management systems, and this is an important

    step forward.

          Finally, it is very important that the Department of Defense and

    our colleagues in the national security establishment have the ability

    to prosecute our national security interests overseas.  Terrorists and

    rogue nations are increasingly using these tools to communicate with

    each other and to lay their plans.  We must have the ability to deal

    with that.  And so this policy, it's a balanced and structured approach

    to be able to deal with all four of those problems.

          UNDER SECRETARY REINSCH:  I apologize -- in listing my changes, I

    neglected one very important item that I want to go back to, and that

    is, in the sector area we are also announcing today the ability to

    export strong encryption of any bit length, with or without key recovery

    features, to subsidiaries of U.S. companies to all destinations in the

    world with the exception of the seven terrorist nations.

          MR. PODESTA:  Okay, I think we're happy to take your questions

    now.  If you could identify whom you're addressing, because there is a

    variety of expertise.  And I would like to introduce one other person,

    Charlotte Knepper from the NSC staff, who has been instrumental in

    pulling this all together.

          Q John, this is a question for you.  In October '96 and other

    White House statements on encryption, there has usually been a line also

    addressing the domestic side, saying that all Americans remain free to

    use any strength encryption.  I didn't notice anything like that in

    today's announcement.  Are there any conditions under which the White

    House would back domestic restrictions on encryption?

          MR. PODESTA:  We haven't changed our policy, and the previous

    statements are certainly intact.  We have made a number of policy

    statements in the past, since this administration came into office, and

    I think that you should view this as a step forward, building on the

    policies that we have put before the American public in the past.

          Q John, could I ask you one question about an un-encrypted matter?

          MR. PODESTA:  Maybe.  (Laughter.)

          Q Democrats on the Hill are now saying, and John Kerry is saying

    that the President's actions absolutely call for some sort of

    punishment.  What are Democrats telling you about what they feel must be

    done at this point?

          MR. PODESTA:  Well, I think I'm not going to stand here and take a

    lot of questions, but I'm going to give special dispensation, as a

    Catholic, today -- which is I'm going to return your phone calls later.

    But in deference to the people up here I think we'll handle it that way.

          But in specific response, I'll take one, which is that I think

    that we had a number of productive meetings with Democrats on both sides

    of the Hill yesterday.  They view the President as a person who has led

    on the issues that are important to them, and I think what they want to

    do is get back to having him speak out and be a leader on the issues of

    education and the health care bill of rights, on saving Social Security.

    And I think they pointed at that and wanted to work with us on that.

          I think with regard to the question that you posed with regard to

    Senator Kerry, I think that's a matter that they are debating amongst

    themselves more than they are debating with the White House.  I think

    it's probably presumptuous for us at this point to offer them assistance

    or guidance.  I mean, the President has said that what he has done was

    wrong; he's apologized for it; he's asked for forgiveness.  He is moving

    forward.  And I think that this debate is going on, on Capitol Hill, but

    it's largely going on amongst members themselves.

          Q We haven't heard many of them say they want to get back to the

    work at hand.

          MR. STEINBERG:  You heard John, and I'm going to leave it there.

          Let me just add a word in response, in connection with the

    domestic controls issue.  I think one of the lessons that we've learned

    from this exercise is that -- actually, two lessons -- one, that trying

    to balance the various interests and equities in this is much less of a

    zero sum gain than I think some began to look at the question.  That is,

    you heard from Dr. Hamre and others that many of the interests involved

    have common interests in making sure that we have secure and effective

    means of dealing with communications and stored data.

          And so we found, by looking in a very pragmatic way, that there

    were ways to solve these problems without very, kind of, broad-based

    solutions.  In particular, I think the idea that there's no

    one-size-fits-all answer to the problems of meeting the various needs

    informs the decisions that we reached -- that there are a variety of

    different techniques that respond to the different aspects of the

    industry, the different aspects of the technology.  I think that's what

    made the progress possible today, is that industry, agencies and

    Congress sat down together, pulled the problem apart, began to look at

    its different components and began to fashion very pragmatic solutions.

          And so I think we came to this discussion with a spirit of not

    looking for a kind of single or simple solution to the problem but,

    rather, how do you tackle and meet the various needs.  And I think

    that's what led to this resolve.

          Q Could you talk a little more about the on-line merchants part of

    it?  I mean, what do you have to do to qualify as an on-line merchant?

    Do you have to register or can anybody sort of set themselves up in

    business?

          UNDER SECRETARY REINSCH:  I think the simplest way to respond to

    that right now is we'll have a definition in the reg that will be very

    clear as to what the criteria are for qualification.  And those

    definitions have already been dealt with and agreed to, so we should

    have them up on the web site this afternoon.

          Q A question for Bill Reinsch.  How do you handle, then, 128-bit,

    to which the Department has given export -- or has allowed to be

    exported after going through this review?  Will 128 or things above

    56-bit, will they require a license or will they still have to go

    through plans --

          UNDER SECRETARY REINSCH:  Well, with respect to the subsidiaries,

    the health sector, the banks, the financial institutions, the insurance

    companies, the on-line merchants, and the recoverable products as in the

    universe defined -- no.  In the case of all but the recoverable

    products, they will all go on license exception, which means one-time

    review and then out the door.  With respect to recoverable products,

    they will come in and go out pursuant to an export licensing

    arrangement, where we'll have to do a little tailoring depending upon

    the nature of the product.  But there is a presumption of approval for

    the 42 countries that I indicated.

          And that's without reference to bit length -- 128 or more is all

    covered by that.  Now, if you want to export an 128-bit product that is

    beyond any of those universes, then you would have to come in for an

    individual license application.

          Q A question for Mr. Litt.  With regard to the technical support

    center, when do you expect that to be in operation?

          MR. LITT:  I don't think we have a specific timetable yet.

    Obviously, it would be helpful for us to have it up and operational as

    soon as possible, but there are planning and budgetary issues that have

    to be dealt with.

          Q This is probably a question for Under Secretary Reinsch.  The

    export exceptions now are essentially going to U.S. subsidiaries --

    foreign subsidiaries of U.S. companies.  I was wondering, could you be a

    little more specific -- what size company, what kind of company will be

    allowed to export powerful crypto to its foreign subsidiaries?

          UNDER SECRETARY REINSCH:  That doesn't make any difference.  The

    universe is determined by the end user, not by the nature of the

    American company.  But it is not -- while part of this relates to

    subsidiaries of U.S. companies, that is correct, we also intend, on a

    case-by-case basis, to provide for favorable treatment for export of the

    same kind of thing to strategic partners of U.S. companies -- those

    foreign companies that are engaged in a closer, say, joint venture, that

    kind of relationship.

          Well, I think that's it.

          Q What about foreign companies that have U.S. subsidiaries, like

    Seaman's or -- or Chrysler -- can they get this encryption?

          UNDER SECRETARY REINSCH:  Well, keep in mind, there are multiple

    universes here.  If you're talking about the financial institutions, the

    banks and the insurance companies, those aren't necessarily American

    financial institutions.  That's for export to any financial institution,

    and for their use in any of their branches, aside from the terrorist

    countries.  This is true for the health sector; this is true for on-line

    merchants as well.  Those are not restricted to U.S. companies.

          Obviously, if we're going to have a requirement for U.S. subs, it

    relates to U.S. subs, and wouldn't affect the examples you've described.

    Now, with respect to recoverable products, which actually is one of the

    areas where the companies you mentioned would probably be looking

    because they'd be looking to build a network among their various

    offices, affiliates of subsidiaries, dealers if necessary, worldwide,

    the recoverable provisions that I described could be exported to those

    companies within the territorial universe I described -- the 42

    countries.

          Thank you very much.

                 END                          12:25 P.M. EDT

    September 16, 1998

    Statement by the Press Secretary: Administration Updates Encryption

    Policy

    http://www.pub.whitehouse.gov/uri-res/I2R?urn:pdi://oma.eop.gov.us/1998/9/17/3.text.1

                                THE WHITE HOUSE

                          Office of the Press Secretary

    ________________________________________________________________________

    For Immediate Release                                 September 16, 1998

                        STATEMENT BY THE PRESS SECRETARY

                    Administration Updates Encryption Policy

         The Clinton Administration today announced a series of steps to

    update its encryption policy in a way that meets the full range of

    national interests:  promotes electronic commerce, supports law

    enforcement and national security and protects privacy.  These steps are

    a result of several months of intensive dialogue between the government

    and U.S. industry, the law enforcement community and privacy groups

    that was called for by the Vice President and supported by members of

    Congress.

         As the Vice President stated in a letter to Senator Daschle, the

    Administration remains committed to assuring that the nation's law

    enforcement community will be able to access, under strictly defined

    legal procedures, the plain text of criminally related communications

    and stored information.  The Administration intends to support FBI's

    establishment of a technical support center to help build the technical

    capacity of law enforcement - Federal, State, and local - to stay

    abreast of advancing communications technology.

         The Administration will also strengthen its support for electronic

    commerce by permitting the export of strong encryption when used to

    protect sensitive financial, health, medical, and business proprietary

    information in electronic form.  The updated export policy will allow

    U.S. companies new opportunities to sell encryption products to almost

    70 percent of the world's economy, including the European Union, the

    Caribbean and some Asian and South American countries.  These changes in

    export policy were based on input from industry groups while being

    protective of national security and law enforcement interests.

         The new export guidelines will permit exports to other industries

    beyond financial institutions, and further streamline exports of key

    recovery products and other recoverable encryption products.  Exports to

    those end users and destination countries not addressed by today's

    announcement will continue to be reviewed on a case-by-case basis.

         Very strong encryption with any key length (with or without key

    recovery) will now be permitted for export, under license exception, to

    several industry sectors.  For example, U.S. companies will be able to

    export very strong encryption for use between their headquarters and

    their foreign subsidiaries worldwide except the seven terrorist

    countries (Iran, Iraq, Libya, Syria, Sudan, North Korea and Cuba) to

    protect their sensitive company proprietary information.

         On-line merchants in 45 countries will be able to use robust U.S.

    encryption products to protect their on-line electronic commerce

    transactions with their customers over the Internet.

         Insurance companies as well as the health and medical sectors in

    those same 46 countries will be able to purchase and use robust U.S.

    encryption products to secure health and insurance data among legitimate

    users such as hospitals, health care professionals, patients, insurers

    and their customers.

         The new guidelines also allow encryption hardware and software

    products with encryption strength up to 56-bit DES or equivalent to be

    exported without a license, after a one time technical review, to all

    users outside the seven terrorist countries.  Currently, streamlined

    exports of DES products are permitted for those companies that have

    filed key recovery business plans.  However, with the new guidelines,

    key recovery business plans will no longer be required.

         The Administration will continue to promote the development of key

    recovery products by easing regulatory requirements.  For the more than

    60 companies which have submitted plans to develop and market key

    recovery encryption products, the six month progress reviews will no

    longer be required.  Once the products are ready for market, they can be

    exported, with any bit length -- without a license -- world-wide (except

    to terrorist nations) after a one-time review.  Furthermore, exporters

    will no longer need to name or submit additional information on a key

    recovery agent prior to export.  These requirements will be removed from

    the regulations.

         Finally, industry has identified other so-called "recoverable"

    products and techniques that allow for the recovery of plaintext by a

    system or network administrator and that can also assist law enforcement

    access, subject to strict procedures.   The Administration will permit

    their export for use within most foreign commercial firms, and their

    wholly-owned subsidiaries, in large markets, including Western Europe,

    Japan and Australia, to protect their internal business proprietary

    communications.

         The Administration welcomes a continued dialogue with U.S. industry

    and intends to review its policy in one year to determine if additional

    updates may be necessary to continue a balanced approach that protects

    the public safety and national security, ensures privacy, enables

    continued technology leadership by U.S. industry and promotes electronic

    commerce.

                                       # # #

    September 16, 1998

    Fact sheet: Administration Updates Encryption Policy

    http://www.pub.whitehouse.gov/uri-res/I2R?urn:pdi://oma.eop.gov.us/1998/9/17/5.text.1

                                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.

                                       # # #

    http://www.access.gpo.gov/nara/nara003.html

    [Weekly Compilation of Presidential Documents]

    From the 1998 Presidential Documents Online via GPO Access [frwais.access.gpo.gov]

    [DOCID:pd05oc98_txt-5]

    [Page 1897-1903]

    Monday, October 5, 1998

    Volume 34--Number 40

    Pages 1895-1963

    Week Ending Friday, October 2, 1998

    Remarks at a Democratic National Committee Dinner in San Jose,

    California

    September 25, 1998

    [Excerpt]

        The securities reform legislation is now in conference and they're

    arguing only over some legislative intent language that those of you who

    are working the issue are very familiar with. But I think we'll be

    successful there. I think we've reached a broad agreement on encryption

    policy and now you just have to make sure you work with us on the

    implementation of it so that the rules don't contradict the policy, but

    instead reinforce them. And I think we can do that.

    1999

    To August 14: None.