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16 December 1998

    Date: Wed, 16 Dec 1998 12:57:18 +0200 (EET)
    From: Jukka E Isosaari <jei@zor.hut.fi>
    To: ukcrypto@maillist.ox.ac.uk
    Subject: [ISN] Different Algorithms For Different Folks  (fwd)

    ---------- Forwarded message ----------
    Date: Mon, 14 Dec 1998 19:48:39 -0700 (MST)
    From: mea culpa <jericho@dimensional.com>
    To: InfoSec News <isn@repsec.com>
    Subject: [ISN] Different Algorithms For Different Folks

    Forwarded From: phreaky@mitnick.org

    From: http://www.newsbytes.com/pubNews/123032.html

    Different Algorithms For Different Folks
    14 Dec 1998, 4:27 PM CST
    By Robert MacMillan, Newsbytes.
    WASHINGTON, D.C., U.S.A.,

    The acting chairman of the President's Export Council Subcommittee on
    Encryption today told Newsbytes it soon plans to release recommendations
    on lifting strong encryption technology export restrictions for online
    commerce purposes.

    Chairman Stewart Baker, a partner at Washington, D.C., law firm Steptoe &
    Johnson, said the encryption policies espoused by the Clinton
    administration are somewhat confusing, because they are in a state of
    flux. Encryption restrictions on online shopping and other types of
    electronic commerce soon will grow weaker, he also said.

    "(The administration) announced that they were going to lighten up the
    regulations for financial institutions almost a year ago," Baker said. "It
    took them nine months to get the regulations out. They were issued just
    before another announcement that they were going to lighten up on another
    sector, in this case, online merchants."

    As the process for setting encryption policy currently stands, the
    administration typically announces changes to the regulations that govern
    the export of encryption technology. Those changes are then implemented
    some time later.

    In the current setup, official White House policy currently allows private
    communications and many non-business functions that span international
    borders to be protected with nothing stronger than 56-bit algorithms.

    White House policy also enables protection for international banking,
    healthcare and financial transactions with any level of encryption
    strength, including 128 bits and above.

    Before last year, a "key escrow" policy with the Department of Commerce
    was mandatory, Baker said. This meant the US government would hold a third
    key it could use to unscramble highly encrypted communications if it had
    sufficient cause.

    By the end of the month, the online commerce industry is expected to
    receive the government's blessing to protect their international
    transactions with 128-bit and stronger encryption.

    Encryption technology that protects online communications usually is
    measured by the number of bits that are contained in the scrambling
    algorithm used to protect the communication. The Clinton administration
    limits the export of certain stronger types of encryption technology on
    the advice of the National Security Agency and other law enforcement
    groups, chiefly because of the terrorist threat they consider inherent in
    unrestricted scrambling of private communications.

    Baker said that the recent signing of the Wassenaar Arrangement will
    change almost nothing in the international encryption export scene for
    online business and other industry sectors with the 128-bit blessing.

    "It's as close to irrelevant as you can get," Baker said, although he
    added that for international consumers looking for strong encryption for
    their personal communications, it will reduce their choices.

    Baker said the Wassenaar Arrangement was Undersecretary of Commerce David
    Aaron's attempt, on behalf of the US government, to fill in some legal
    loopholes that allowed countries outside the US to trade in strongly
    encrypted personal communications software.

    Companies like Microsoft Corp. [NASDAQ:MSFT] had complained that their
    inability to export strong encryption technology for personal use would
    hurt their and the US software industry's competitive edge in the global
    marketplace.

    Under the Wassenaar terms, which were signed by 33 countries including the
    UK, Germany and Japan, personal communication encryption technology is
    restricted to 64 bits.

    The upcoming relaxation in online commerce crypto export controls should,
    in spite of the tighter personal restrictions from Wassenaar, provide a
    better incentive for the European Union and other countries and trade
    groups to pursue electronic commerce opportunities with the US, Baker
    said.

    -o-
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