US government does about-face on strong encryption exports

The US government has relinquished its hard-line restrictions on the export of data encryption technology and will now allow the export of the strongest available encryption, but only for financial and electronic commerce applications, the Department of Commerce has announced.

The US government has relinquished its hard-line restrictions on the export of data encryption technology and will now allow the export of the strongest available encryption, but only for financial and electronic commerce applications, the Department of Commerce has announced.

Until now, the US has limited the export of encryption software, a technology that scrambles data, making it difficult to read without a software key, in an effort to curtail the activities of criminal and terrorist organisations.

New regulations are to be published that will allow the export of products that support such financial transactions as direct home banking.

Under the pervious law, US encryption vendors were not allowed to export strong encryption software and were expected to provide a public key so the data could be monitored by U.S. government agencies.

However the Clinton Administration remains committed to public key recovery for all encryption software not used for electronic commerce or banking applications, the Department of Commerce said in a statement today. Word of the policy change came during a speech by Commerce Undersecretary for Export Administration William A. Reinsch to the American Bankers Association.

Software, banking and electronic commerce corporations have protested against the ban, arguing that the restriction were useless because strong encryption is available from countries outside the United States, and the law only hampered the growth of e-commerce.

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