US set to ease encryption export rules

The Clinton administration is to further relax the US regulations on the export of cryptography technology. Restrictions will be eased on encryption systems used to protect data carried over networks, following proposals from a consortium of network specialists, led by Cisco, submitted to the US government in July. Controls will also be relaxed on sales of encryption technology to specific industries, such as insurance, medicine and ecommerce. The export regulations have been especially criticised for their restraining effect on ecommerce, so the moves to free companies' activities in this area are likely to be welcomed. Until now, US companies have only been able to export data scrambling products that use up to 56-bit encryption keys, and even then they have had to commit themselves to providing law enforcement agencies 'back door' access to encrypted messages. However, a special case was made for non-US financial institutions to whom US firms could sell encryption software of unlimited strength. Under the new regime, insurance companies, medical record holders and ecommerce operations will also be given unrestricted access to unlimited strength cryptography. According to government sources quoted on US newswires, the government will also back away from requiring prior approval of 'key recovery' agents, who can provide law enforcement agencies with access to encrypted messages. The sources also suggested US companies will be allowed to export powerful encryption technologies to their own overseas subsidiaries provided they do not then share that technology with non-US companies. ®