Encryption Export Issues

All cryptographic products need export licenses from the State Department, acting under authority of the International Traffic in Arms Regulation (ITAR). ITAR defines cryptographic devices, including software, as munitions. The U.S. government has historically been reluctant to grant export licenses for encryption products it sees as stronger than a certain non-publicly assigned level. Under current regulations, a vendor seeking to export a product using cryptography first submits a request to the State Department’s Defense Trade Control office. Export jurisdiction then can be passed to the Department of Commerce, whose export procedures generally are simple and efficient. If jurisdiction remains with the State Department, then further (perhaps lengthy) review must occur before export can be approved or denied. The NSA sometimes becomes directly involved at this point. The details of the export approval process change frequently.

The NSA has de facto control over export of cryptographic products. The State Department does not grant licenses without NSA approval and routinely grants them whenever NSA does approve. Therefore, policy decisions concerning exporting cryptography ultimately rest with the NSA.

The NSA’s stated policy is not to restrict export of cryptography for authentication. Its concern lies only with the use of cryptography for privacy. A vendor seeking to export a product for authentication is granted an export license only so long as it can demonstrate that the product cannot be easily modified for encryption. This is true even for very strong systems, such as RSA with large key sizes. Furthermore, the bureaucratic procedures are simpler for authentication products than for privacy products. An authentication product needs NSA and State Department approval only once, whereas an encryption product could need approval for every sale or every product revision.

The U.S. State Department and the NSA strictly regulates export of DES, in hardware or software. The government rarely approves export of DES, although DES is widely available overseas. Software developers in many countries have produced DES products from the published specifications. These products are functionally compatible with U.S. products. Financial institutions and foreign subsidiaries of U.S. companies are exceptions.

Export policy currently is a matter of great controversy. Many software and hardware vendors consider current export regulations overly restrictive and burdensome. The Software Publishers Association (SPA), a software industry group, has recently been negotiating with the government to get export license restrictions eased. One agreement was reached that allows simplified procedures for export of two bulk encryption ciphers, RC2 and RC4, when the key size is limited. Also, export policy is less restrictive for foreign subsidiaries and overseas offices of U.S. companies.

In March 1992, the Computer Security and Privacy Advisory Board voted unanimously to recommend a national review of cryptography policy, including export policy. The Board is an official advisory board whose members are drawn from the government and the private sector.

The Board stated that a public debate is the only way to reach a consensus policy to best satisfy competing interests. National security and law enforcement agencies like restrictions on cryptography, especially for export, whereas other government agencies and private industry want greater freedom for using and exporting cryptography. Export policy has traditionally been decided solely by agencies concerned with national security, without much input from those who want to encourage commerce in cryptography. U.S. export policy could undergo significant changes in the next few years.

Note: The legal status of encryption in many countries has been placed on the World Wide Web. You can access it using the following URL:     

http://web.cnam.fr/Network/Crypto/

In much of the civilized world, encryption is legal or at least tolerated. In some countries, however, such activities can land you before a firing squad! Check with the laws in your country before you use any encryption product. Some countries in which encryption is illegal are Russia, France, Iran, and Iraq.