From...

June 11, 1999
Web posted at: 2:20 p.m. EDT (1820 GMT)

by Kathleen Ohlson

(IDG) -- On the heels of House testimony this week about encryption export controls, a study by the Electronic Privacy Information Center (EPIC) found that international export restrictions are still a major obstacle to the use of encryption.

The study, "Cryptography & Liberty," was also conducted by the Global Internet Liberty Campaign, an international association of organizations that promotes free expression and privacy issues on the Internet.

According to the report, countries are backing away from using key escrow and key recovery, which enable governments to access private messages during law-enforcement investigations -- methods the U.S. has encouraged. France is the latest government to back off its proposal for key-escrow encryption, EPIC said. In addition, few countries are currently imposing domestic controls on encryption, the EPIC study said.

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"This shows the continued international trend of liberal encryption policies, and the rejection of current U.S. policies despite major international lobbying by the Clinton administration," said David Sobel, general counsel for EPIC in Washington. Germany is the latest country to indicate it's moving away from the U.S. position, he said.

Clinton administration officials say some controls are needed to ensure encryption isn't used by international criminals. They worry that encryption software could be used to plan terrorist activities and other crimes -- shielding their communications from law-enforcement officials. The administration says it has already loosened restrictions but is striking a balance between privacy and law-enforcement needs.

However, the U.S. policy is impacting the competitive position of American companies, not allowing them to sell products with strong encryption, Sobel said. As a result, companies, especially from the U.S., are moving their encryption product division overseas to countries with fewer controls, the study said.

Meanwhile, Congressman Bob Goodlatte (R-Va.) testified before the House's Courts and Intellectual Property Subcommittee for the increase of adequate privacy protections, according to a statement from Goodlatte's office.

He said government has passed several laws, including the Electronic Communications Privacy Act and the Right to Financial Privacy Act, to protect consumer information, but the government hasn't addressed general privacy protections for consumer information online. "More must be done to ensure that the Internet as a medium that consumers can use with the confidence that their information is protected from fraud and abuse," Goodlatte said.

Goodlatte introduced the Security and Freedom through Encryption Act earlier this year, aimed at encouraging strong encryption use.