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RSA tries Australian end-run around U.S. encryption laws

by Ellen Messmer



(IDG) -- RSA Data Security has announced the creation of an Australian subsidiary in an attempt to get around U.S. laws on the export of encryption technology.

The U.S. export rules greatly restrict export of the type of encryption tool kits that RSA makes here in the U.S. As a result, RSA has set up a wholly owned subsidiary in Brisbane, Australia staffed with foreign nationals to design a new product line of strong encryption products for easy export.


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Quietly at work for some time, RSA Australia, Ltd. yesterday announced its first product: a tool kit for adding Secure Sockets Layer (SSL) encryption to applications built in C. The BSAFE SSL-C tool kit was created by Australian cryptography experts Tim Hudson and Eric Young, now RSA employees.

"We can freely ship this tool kit just about anywhere, including into the U.S.," claims Scott Schnell, RSA's senior vice president for marketing. RSA has established its Australian operation in a manner it believes will not violate the encryption-export rules imposed by the Department of Commerce and the National Security Agency.

To meet the U.S. rules, RSA Australia is staffed only with non-U.S. citizens that create products without any American technical support.

RSA consulted extensively with these two U.S. agencies before setting up the Australian subsidiary.

"They didn't try to discourage us from doing it," Schnell says. "They know we have to be able to export strong encryption to stay in business. They understood we have to compete effectively, but they weren't going to change the law for us."

According to Schnell, the advantage to using RSA's Australian-made SSL tool kit, as opposed to, say, Netscape's comparable American-made one, is that any application based on the Australian tool kit won't be subject to the strict U.S. export rules.

"This is the first time we've been able to sell a full-strength encryption tool kit abroad," Schnell says.

He went on to say that RSA Australia would be creating and exporting several more cryptography tool kits soon.

The tool kit starts at $50,000.

Ellen Messmer is a senior editor at Network World.

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