RSA goes Down Under to dodge export laws

In a move indicative of how some American encryption companies feel disadvantaged by government encryption export regulations, RSA Data Security has opened a development centre in Brisbane, Australia, thus sidestepping export law.

The end result for users is they may soon have security products that can be used internationally.

The US government considers strong encryption technology as "munitions" and usually restricts its export from American territory.

To address foreign customer demand, however, RSA has opened the Australian office, where development of encryption technology is not under US purview, and has already begun shipping a Secure Sockets Layer (SSL)-based product, according to Jim Bidzos, president and CEO of RSA.

"If there were no export controls, we probably wouldn't have done it exactly like this, I grant you. [But] every step of the way we shared with the [US] Commerce Department what we were doing. They agreed with us that the US doesn't have jurisdiction over that product," Bidzos said.

The Australian division's BSafe SSL-C product to encrypt Internet-commerce transactions already has shipped to five international customers.

RSA is the latest and largest encryption company to find itself forced to develop outside of the United States to avoid government restrictions and compete with non- US-based companies providing encryption for I-commerce.

"As companies become more and more encumbered with regulations, and their competitors are able to get products out there, you are going to see more and more creative approaches to [selling] products overseas," said Kelly Blough, director of government relations at Network Associates, in Santa Clara, California, which works with a Swiss company on international encryption products.

As RSA moves forward, the company will have to be careful not to let US-based developers work on the code, which would break US laws.

"It would have been pretty easy for a lot of companies to try and do this, but managing this is difficult. You can't have anybody in the US working on this code," said Jack Oswald, president and CEO of RPK, an encryption company in San Francisco with development offices in New Zealand and Switzerland.

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