5 March 1999
Source: http://www.usia.gov/current/news/latest/99030402.clt.html?/products/washfile/newsitem.shtml

USIS Washington File
_________________________________

04 March 1999

EXCERPT: NSA OFFICIAL ON ENCRYPTION EXPORT CONTROL LEGISLATION

    (McNamara cites risk to intelligence gathering)  (850)

    Washington -- A National Security Agency (NSA) official says
    legislation that would essentially eliminate export controls for
    commercial encryption software would place U.S. national security at
    risk by preventing timely gathering of intelligence.

    In March 4 testimony before a U.S. House of Representatives Judiciary
    subcommittee, NSA Deputy Director Barbara McNamara explained how her
    agency intercepts encrypted communications signals from foreign
    adversaries, unscrambles them and prepares intelligence reports for
    U.S. decision makers and military commanders.

    "Very often, time is of the essence," she said. "Intelligence is
    perishable; it is worthless if we can not provide it in time to make a
    difference in rendering vital decisions."

    McNamara said the bill would accelerate widespread proliferation of
    encryption software of strength impossible for NSA to decrypt.

    The bill, which has 205 House cosponsors, is called the Security and
    Freedom Through Encryption (SAFE) Act.

    Following is the text of McNamara's text as submitted for the
    subcommittee's record:

    (begin excerpt)

    It is the signals intelligence (SIGINT) role that I want to address
    today. Our principal responsibility is to ensure a strong national
    security environment by providing timely information that is essential
    to critical military and policy decision making. NSA intercepts and
    analyzes the communications signals of our foreign adversaries, many
    of which are guarded by codes and other complex electronic
    countermeasures. From these signals, we produce vital intelligence
    reports for national decision makers and military commanders. Very
    often, time is of the essence. Intelligence is perishable; it is
    worthless if we can not provide it in time to make a difference in
    rendering vital decisions.

    For example, SIGINT proved its worth in World War II when the United
    States broke the Japanese naval code and learned of their plans to
    invade Midway Island. This intelligence significantly aided the U.S.
    defeat of the Japanese fleet. Subsequent use of SIGINT helped shorten
    the war. NSA continues today to provide vital intelligence to the
    warfighter and the policy maker in time to make a difference for our
    nation's security. Demands on us in this arena have only grown since
    the break-up of the Soviet Union and have expanded to address other
    national security threats such as terrorism, weapons proliferation,
    and narcotic trafficking, to name a few.

    Please do not confuse the needs of national security with the needs of
    law enforcement. The two sets of interests and methods vary
    considerably and must be addressed separately. The law enforcement
    community is concerned about the use of non-recoverable encryption by
    persons engaged in illegal activity domestically. At NSA, we are
    primarily focused on preserving export controls on encryption to
    protect national security.

    While our mission is to provide intelligence to help protect the
    country's security, we also recognize that there must be a balanced
    approach to the encryption issue. The interests of industry and
    privacy groups, as well as of the Government, must be taken into
    account. Encryption is a technology that will allow our citizens to
    fully participate in the 21st Century world of electronic commerce. It
    will enhance the economic competitiveness of U.S. industry. It will
    combat unauthorized access to private information and it will deny
    adversaries from gaining access to U.S. information wherever it may be
    in the world.

    To promote this balanced approach, we are engaged in an ongoing and
    productive dialogue with industry. The recent Administration update to
    the export control regulations addresses many industry concerns and
    has significantly advanced the ability of U.S. vendors to participate
    in overseas markets. Of equal significance, the Wassenaar nations,
    representing most major producers and users of encryption, agreed
    unanimously in December 1998 to control strong hardware and software
    encryption to be exported for foreign financial institutions. The
    criteria for exporting encryption to these institutions should not be
    the basis for decontrolling other encryption exports. Allowing
    favorable treatment for specific classes of end-users may be
    appropriate in cases such as those involving banks and other financial
    institutions which are well regulated and have a good record of
    providing access to lawful requests for information. Requiring the
    blanket approval of exports to all other end-users in a country would
    eliminate important national security end-use considerations for these
    exports.

    In summary, the SAFE Act will harm national security by making NSA's
    job of providing vital intelligence to our leaders and military
    commanders difficult, it not impossible, thus putting our nation's
    security at some considerable risk. Our nation cannot have an
    effective decision-making process, or a strong fighting force, or a
    responsive law enforcement community unless the intelligence
    information required to support them is available in time to make a
    difference. The nation needs a balanced encryption policy that allows
    U.S. industry to continue to be the world's technology leader, but
    that policy must also protect our national security interests.

    Thank you for the opportunity to address the Subcommittee and I would
    be happy to answer any questions you may have.

    (end excerpt)