ACCESSION NUMBER:325670 FILE ID:ECO503 DATE:02/04/94 TITLE:ENCRYPTION EXPORT CONTROLS MAINTAINED, BUT PROCESS RELAXED (02/04/94) TEXT:*94020403.ECO ECTELELD EXPORT CONTROLS /te ENCRYPTION EXPORT CONTROLS MAINTAINED, BUT PROCESS RELAXED (Few restrictions on government-backed standard) (460) By Bruce Odessey 1SIA Staff Writer Washington -- The Clinton administration has decided to maintain export controls on products incorporating encryption technology, but has taken some steps to expedite licenses for them. Martha Harris, deputy assistant secretary of state, announced February 4 that new regulations will allow U.S. manufacturers to export with few restrictions products using key-escrow encryption, the federal government-backed standard also called the Clipper chip. For encryption devices aside from the Clipper chip, she said, manufacturers can still ship to foreign countries already approved for such exports and will no longer have to obtain individual licenses for each end user. For the bulk licenses still required, she said, the State Department's goal is to speed up the reviews to two working days, down from several weeks. The Clipper chip, developed by the federal government, enables U.S., state and local law-enforcement agencies with proper wiretap authorization to eavesdrop on digital telephone communications. Harris said the Clipper chips could be exported without license to nearly all countries except those subject to U.S. sanctions for foreign policy reasons. As for U.S. industry's disappointment about strict export controls remaining for other encryption devices, White House press secretary Dee Dee Myers' written statement offered an explanation. "If encryption technology is made freely available worldwide, it would no doubt be used extensively by terrorists, drug dealers and other criminals to harm Americans," Myers said. "For this reason, the administration will continue to restrict export of the most sophisticated encryption devices," she said, "both to preserve our own foreign intelligence-gathering capability and because of the concerns of our allies who fear that strong encryption technology would inhibit their law-enforcement capabilities." Also announced by the Clinton administration was formal approval of the Clipper chip as a voluntary federal standard, allowing government agencies to purchase such chips for use with telephones and modems. A Justice Department official said his agency was purchasing 8,000 at a cost of about $8 million. Two government agencies, one in the Commerce Department and one in the Treasury Department, will store the keys needed for decryption of communications using the Clipper chip. The administration made the Clipper chip standard voluntary, not mandatory, for government and business. In January several computer hardware, software and telecommunications companies said they intended to support some standard other than the Clipper chip in order to protect the privacy of communications from the government. An FBI spokesman said at a February 4 briefing the administration hopes private industry will go along with the voluntary standard. He realized some criminals won't use the Clipper chip to encrypt their messages. "We know we'll have to deal with that," he said. NNNN .