Congressional Documents
42 431
105 th Congress
Rept. 105 108
HOUSE OF REPRESENTATIVES
1st Session
Part 2
SECURITY AND FREEDOM THROUGH ENCRYPTION (SAFE) ACT
July 25, 1997.--Ordered to be printed
Mr. Gilman , from the Committee on International Relations, submitted
the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 695]
The Committee on International Relations, to whom was referred the
bill (H.R. 695) to amend title 18, United States Code, to affirm the
rights of United States persons to use and sell encryption and to relax
export controls on encryption, having considered the same, report
favorably thereon with an amendment and recommend that the bill as
amended do pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu thereof
the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Security and Freedom Through
Encryption (SAFE) Act''.
SEC. 2. SALE AND USE OF ENCRYPTION.
(a) In General.--Part I of title 18, United States Code, is amended
by inserting after chapter 121 the following new chapter:
``CHAPTER 122--ENCRYPTED WIRE AND ELECTRONIC INFORMATION
``2801. Definitions.
``2802. Freedom to use encryption.
``2803. Freedom to sell encryption.
``2804. Prohibition on mandatory key escrow.
``2805. Unlawful use of encryption in furtherance of a criminal act.
``2801. Definitions
``As used in this chapter--
``(1) the terms `person', `State', `wire communication', `electronic
communication', `investigative or law enforcement officer', `judge of
competent jurisdiction', and `electronic storage' have the meanings
given those terms in section 2510 of this title;
``(2) the terms `encrypt' and `encryption' refer to the scrambling
of wire or electronic information using mathematical formulas or
algorithms in order to preserve the confidentiality, integrity, or
authenticity of, and prevent unauthorized recipients from accessing or
altering, such information;
``(3) the term `key' means the variable information used in a
mathematical formula, code, or algorithm, or any component thereof, used
to decrypt wire or electronic information that has been encrypted; and
``(4) the term `United States person' means--
``(A) any United States citizen;
``(B) any other person organized under the laws of any State, the
District of Columbia, or any commonwealth, territory, or possession of
the United States; and
``(C) any person organized under the laws of any foreign country who
is owned or controlled by individuals or persons described in
subparagraphs (A) and (B).
``2802. Freedom to use encryption
``Subject to section 2805, it shall be lawful for any person within
any State, and for any United States person in a foreign country, to use
any encryption, regardless of the encryption algorithm selected,
encryption key length chosen, or implementation technique or medium
used.
``2803. Freedom to sell encryption
``Subject to section 2805, it shall be lawful for any person within
any State to sell in interstate commerce any encryption, regardless of
the encryption algorithm selected, encryption key length chosen, or
implementation technique or medium used.
``2804. Prohibition on mandatory key escrow
``(a) Prohibition.--No person in lawful possession of a key to
encrypted information may be required by Federal or State law to
relinquish to another person control of that key.
``(b) Exception for Access for Law Enforcement Purposes.--Subsection
(a) shall not affect the authority of any investigative or law
enforcement officer, acting under any law in effect on the effective
date of this chapter, to gain access to encrypted information.
``2805. Unlawful use of encryption in furtherance of a criminal act
``Any person who willfully uses encryption in furtherance of the
commission of a criminal offense for which the person may be prosecuted
in a court of competent jurisdiction--
``(1) in the case of a first offense under this section, shall be
imprisoned for not more than 5 years, or fined in the amount set forth
in this title, or both; and
``(2) in the case of a second or subsequent offense under this
section, shall be imprisoned for not more than 10 years, or fined in the
amount set forth in this title, or both.''.
(b) Conforming Amendment.--The table of chapters for part I of title
18, United States Code, is amended by inserting after the item relating
to chapter 33 the following new item:
``122. Encrypted wire and electronic information
2801''.
SEC. 3. EXPORTS OF ENCRYPTION.
(a) Amendment to Export Administration Act of 1979.--Section 17 of
the Export Administration Act of 1979 (50 U.S.C. App. 2416) is amended
by adding at the end thereof the following new subsection:
``(g) Certain Consumer Products, Computers, and Related Equipment.--
``(1) General rule.--Subject to paragraphs (2), (3), and (4), the
Secretary shall have exclusive authority to control exports of all
computer hardware, software, and technology for information security
(including encryption), except that
which is specifically designed or modified for military use,
including command, control, and intelligence applications.
``(2) Items not requiring licenses.--No validated license may be
required, except pursuant to the Trading With The Enemy Act or the
International Emergency Economic Powers Act (but only to the extent that
the authority of such Act is not exercised to extend controls imposed
under this Act), for the export or reexport of--
``(A) any consumer product commercially available within the United
States or abroad which--
``(i) includes encryption capabilities which are inaccessible to the
end user; and
``(ii) is not designed for military or intelligence end use;
``(B) any component or subassembly designed for use in a consumer
product described in subparagraph (A) which itself contains encryption
capabilities and is not capable of military or intelligence end use in
its condition as exported;
``(C) any software, including software with encryption capabilities--
``(i) that is generally available, as is, and is designed for
installation by the purchaser;
``(ii) that is in the public domain for which copyright or other
protection is not available under title 17, United States Code, or that
is available to the public because it is generally accessible to the
interested public in any form; or
``(iii) that is customized for an otherwise lawful use by a specific
purchaser or group of purchasers;
``(D) any computing device solely because it incorporates or employs
in any form--
``(i) software (including software with encryption capabilities)
that is exempted from any requirement for a validated license under
subparagraph (C); or
``(ii) software that is no more technically complex in its
encryption capabilties than software that is exempted from any
requirement for a validated license under subparagraph (C) but is not
designed for installation by the purchaser;
``(E) any computer hardware that is generally available, solely
because it has encryption capabilities; or
``(F) any software or computing device solely on the basis that it
incorporates or employs in any form interface mechanisms for interaction
with other hardware and software, including hardware, and software, with
encryption capabilities.
``(3) Software with encryption capabilities.--The Secretary shall
authorize the export or reexport of software with encryption
capabilities for nonmilitary end uses in any country to which exports of
software of similar capability are permitted for use by financial
institutions not controlled in fact by United States persons, unless
there is substantial evidence that such software will be--
``(A) diverted to a military end use or an end use supporting
international terrorism;
``(B) modified for military or terrorist end use; or
``(C) reexported without any authorization by the United States that
may be required under this Act.
``(4) Hardware with encryption capabilities.--The Secretary shall
authorize the export or reexport of computer hardware with encryption
capabilities if the Secretary determines that a product offering
comparable security is commercially available outside the United States
from a foreign supplier, without effective restrictions.
``(5) Definitions.--As used in this subsection--
``(A) the term `encryption' means the scrambling of wire or
electronic information using mathematical formulas or algorithms in
order to preserve the confidentiality, integrity, or authenticity of,
and prevent unauthorized recipients from accessing or altering, such
information;
``(B) the term `generally available' means--
``(i) in the case of software (including software with encryption
capabilities), software that is offered for sale, license, or transfer
to any person without restriction, whether or not for consideration,
including, but not limited to, over-the-counter retail sales, mail order
transactions, phone order transactions, electronic distribution, or sale
on approval; and
``(ii) in the case of hardware with encryption capabilities,
hardware that is offered for sale, license, or transfer to any person
without restriction, whether or not for consideration, including, but
not limited to, over-the-counter retail sales, mail order transactions,
phone order transactions, electronic distribution, or sale on approval;
``(C) the term `as is' means, in the case of software (including
software with encryption capabilities), a software program that is not
designed, developed, or tailored by the software publisher for specific
purchasers, except that such purchasers may supply certain installation
parameters needed by the software program to function properly with the
purchaser's system and may customize the software program by choosing
among options contained in the software program;
``(D) the term `is designed for installation by the purchaser'
means, in the case of software (including software with encryption
capabilities) that--
``(i) the software publisher intends for the purchaser (including
any licensee or transferee), who may not be the actual program user, to
install the software program on a computing device and has supplied the
necessary instructions to do so, except that the publisher may also
provide telephone help line services for software installation,
electronic transmission, or basic operations; and
``(ii) the software program is designed for installation by the
purchaser without further substantial support by the supplier;
``(E) the term `computing device' means a device which incorporates
one or more microprocessor-based central processing units that can
accept, store, process, or provide output of data; and
``(F) the term `computer hardware', when used in conjunction with
information security, includes, but is not limited to, computer systems,
equipment, application-specific assemblies, modules, and integrated
circuits.''.
(b) Continuation of Export Administration Act.--For purposes of
carrying out the amendment made by subsection (a), the Export
Administration Act of 1979 shall be deemed to be in effect.
SEC. 4. SENSE OF CONGRESS REGARDING INTERNATIONAL COOPERATION.
(a) Findings.--The Congress finds that--
(1) implementing export restrictions on widely available technology
without the concurrence of all countries capable of producing,
transshipping, or otherwise transferring that technology is detrimental
to the competitiveness of the United States and should only be imposed
on technology and countries in order to protect the United States
against a compelling national security threat; and
(2) the President has not been able to come to agreement with other
encryption producing countries on export controls on encryption and has
imposed excessively stringent export controls on this widely available
technology.
(b) Sense of Congress.--It is the sense of the Congress that the
President should immediately take the necessary steps to call an
international conference for the purpose of coming to an agreement with
encryption producing countries on policies which will ensure that the
free use and trade of this technology does not hinder mutual security.
BACKGROUND AND PURPOSE
H.R. 695, the Security and Freedom Through Encryption (SAFE) Act,
represents a strong bipartisan effort to bring U.S. laws on the export
of encryption technology into the present and future, by looking at the
actual technological developments taking place on the world stage. The
SAFE Act enjoys strong support in the House as reflected by the
overwhelming number of co-sponsors, including a majority of the Members
of the Committee on International Relations.
While differences still remain and the debate continues between U.S.
economic and commercial priorities and individual civil liberties, on
the one hand, and the needs and concerns of law enforcement and national
security agencies, the SAFE Act is generating the political will to
reform the existing regulatory process to meet today's realities.
Encryption has been defined as referring to the use of software or
hardware to scramble wire or electronic information using mathematical
formulas or algorithms in order to preserve the confidentiality,
integrity, or authenticity of, and prevent unauthorized recipients from
accessing or altering such information. While anyone can encrypt a
message, only an authorized person can convert a scrambled message back
into its original form.
The basic idea of modern encryption, or cryptography, is that any
message can be represented as a set of numbers (the plaintext) used to
transform the plaintext into a different set of numbers (the
ciphertext). Simply stated, keys consist of a series of ones and zeros
(called ``bits'), and are described in terms of their ``length'', which
is corresponds to the number of possible combinations that can be used
to decode a particular message. A 40-bit key means that the number of
possible combinations of ones and zeros equals 2 to the 40th power. It
then follows that a 56-bit key is 2 to the 56th power, which means that
it is 2 to the 16th power stronger that a 40-bit key.
Once the exclusive domain of the national security and intelligence
sectors, encryption now has an expanded application, impacting the
everyday lives of millions of Americans. Today, banking systems, stock
markets, air traffic control systems, credit bureaus, telephone
networks, weather satellites, social security system, television
networks, civilian and government payrolls, and the Internet are all
directly affected by a flow of data managed by countless computers and
telecommunication networks around the world. Computer technology now
serves as the nervous system of modern society.
It is increasingly difficult to protect the privacy and
confidentiality of transactions at all levels, and increasingly
important to do so. The Justice Department has estimated that annual
losses related to computer security breaches could be as high as $7
billion. If this were adjusted to include the number of undocumented
cases by companies reluctant to report such intrusions, the figure could
be even higher. The National Counterintelligence Center in their
``Annual Report to Congress on Foreign Economic Collection and
Industrial Espionage'' concluded that such ``specialized technical
operations (including computer intrusions, telecommunications targeting
and intercept, and private sector encryption weaknesses) account for the
largest portion of economic and industrial information lost by
corporations.''
Therefore, stronger encryption tools are widely viewed as the key to
providing security and privacy for the information superhighway.
Current U.S. policy restricts the export of ``strong'' encryption
hardware or software products with keys greater than 40 bits
long--determined to be gravely inadequate by numerous experts. The
current Administration proposal, which would allow the export of 56-bit
encryption, is viewed as not meeting the needs of U.S. companies to
conduct business in a secure manner with their suppliers, their business
partners, their customers, and even their affiliated companies outside
the United States.
Supporting the need for higher encryption standards is the fact that,
on the same day that the companion legislation--the McCain-Kerrey
bill--was introduced in the Senate calling for a 56-bit limit on
encryption exports, a group of independent programmers and researchers
cracked a 56-bit code using computers linked across the Internet. This
successful breaking of 56-bit encryption clearly demonstrates the
anachronistic nature of current U.S. law and reflects how out-of-touch
the Administration's policy is with the needs of the global marketplace.
The Administration's proposal would only allow the export of 56-bit
encryption for those who promise to build in ``key recovery''. ``Key
recovery'' or ``key escrow'' essentially means that when stored data or
electronic communications are encrypted, a third party has a copy of the
key needed to decrypt the information. As presented by proponents of
this policy, escrowed encryption is intended to provide for encryption
protection for legitimate uses but also enable law enforcement officials
to gain access to the key when it is necessary to decode the plaintext
data as part of an investigation.
This has been interpreted as an attempt to use the export control
process to manipulate and control the market for and expansion of
encryption technology, by making it easy to export products with key
recovery and difficult for those products without. The logical basis for
this policy is flawed as it is rooted in the wrongful assumption that
foreign competitors can be convinced to alter their policy to parallel
what U.S. policy is calling for. The current policy is not based on fact
but on the optimistic view that the U.S. can influence other countries
not to export strong encryption without an escrow system.
Speculation does not make for good laws. Individually and as a unit,
many of our European allies have clearly illustrated their commitment to
allow market forces and
individual needs to dictate the levels of encryption. In its
April 1997 proposal entitled, ``A European Initiative in Electronic
Commerce'', the European Union stated as key elements of the Initiative
to ensure a framework which ``boosts the trust and confidence of
businesses for investments and consumers to make use of electronic
commerce by dismantling remaining legal and regulatory barriers and
preventing the creation of new obstacles.'' It goes on to say that:
``The use of strong encryption which ensures the confidentiality of both
sensitive commercial and of personal data is one of the foundation
stones of electronic commerce . . . The Community (European Community)
shall work at the international level towards the removal of trade
barriers for encryption products.''
Even the more conservative recommendations made in March 1997 by the
Council of the Organization for Economic Cooperation and Development,
clearly state that: ``Users should have access to cryptography that
meets their needs, so that they can trust in the security of information
and communications systems, and the confidentiality and integrity of
data on those systems.'' The Council further underscores that:
``Government controls on cryptographic methods . . . should respect user
choice to the greatest extent possible . . . and should not be
interpreted as implying that governments should initiate legislation
which limits user choice.'' Finally, they add: ``The development and
provision of cryptographic methods should be determined by the market in
an open and competitive environment. Such an approach would best ensure
that solutions keep pace with changing technology, the demands of users
and evolving threats to communications systems security.''
While U.S. companies are kept at 40-bit encryption or at 56-bit with
the condition that they commit to develop key recovery, non-U.S.
exporters, particularly the countries of the European Union, are
producing packages that include encryption technology using 128 bits
leaving American companies far behind in the race to capture new
markets.
Furthermore, American companies are placed at a competitive
disadvantage by being forced to create and deploy two separate systems
to meet two separate standards. Because of the nightmare this would
create, most U.S. businesses end up making their exportable products
subject to the same restrictions as their domestic products. By not
allowing U.S. industries to provide secure products in the face of
strong foreign competitors who are not restricted by outdated export
controls, current law is hurting U.S. businesses. No one will buy
encryption products for which the U.S. government can obtain a key. A
recent report by the CEOs of 13 large American technology companies
concluded that the U.S. computer industry could potentially lose up to
$30 60 billion annually by the year 2000 due to these export controls.
At a fundamental level, evaluating the value of key recovery systems
in and of themselves, eleven of the world's top cryptographers concluded
that key recovery systems would create new vulnerabilities. A key
recovery system would create serious difficulties as it would require a
vast infrastructure of recovery agents and oversight entities to manage
access to the keys. In their May 1997 report entitled, ``The Risks of
Key Recovery, Key Escrow, and Trusted Third Party Encryption'', these
experts also determined that ``the field of cryptography has no
experience in deploying secure systems of this scope and complexity''
and that such systems could potentially cost many billions of dollars.
Key recovery systems do not even meet the national security needs on
which the policy is based on. The Software Publishers Association has
documented hundreds of foreign encryption products already widely
available abroad and which criminals, terrorists, and foreign
governments have access to. It is the upstanding, law-abiding citizen
who suffers.
The fact is that strong encryption helps to further the goals of law
enforcement and national security, more than key recovery could ever
hope to. In its landmark report on encryption policy, the blue-ribbon
National Research Council concluded the following about the use of
strong encryption:
If cryptography can protect the trade secret and
proprietary information of business and thereby reduce
economic espionage (which it can), it also supports in a most
important manner the job of law enforcement. If cryptography
can help protect nationally critical information systems and
networks against unauthorized penetration (which it can), it
also supports the national security of the United States.
In summary, if U.S. laws are not changed soon, not as mandated by the
Administration's policy or its companion legislation in the Senate, but
as H.R. 695 attempts to do, world standards for security technology will
shift away from the U.S. as customers buy products from foreign
manufacturers. The U.S. government will not have a view into the
security technology that replaces U.S. technology as the world
standards. U.S. industries will lose control of information security
technologies which are vital to economic security. It will cost the U.S.
economy billions of dollars and hundreds of thousands of jobs.
On July 7, 1997, German Economics Minister Guenter Rexrodt called for
the removal of restrictions on encryption technology in his opening
remarks for a two-day conference on Internet commerce attended by 40
government ministers from the European union, the United States, Russia,
Japan and Canada. ``Users can only protect themselves against having
data manipulated, destroyed or spied on through the use of strong
encryption procedures,'' Rexrodt said, ``that is why we have to use all
of our powers to promote such procedures instead of blocking them.''
Individual Americans and U.S. businesses should be afforded the same
protection and the same opportunities as other countries provide their
own people and industries.
H.R. 695--the SAFE Act--does just that. It is aimed at
correcting the unfair and unsafe situation that currently exists under
current law as it: prohibits export controls on ``generally available''
commercial encryption except for military end-users or to identified
individuals or organizations in specific foreign countries; does not
require reporting for companies after export; prohibits mandatory use of
key recovery; denies liability protection and penalties for key holders;
denies foreign government access to keys under specified conditions if
key holder is used voluntarily; prohibits U.S. government and law
enforcement access to keys by court order if key holder is used
voluntarily; codifies existing domestic use policy; gives the Secretary
of Commerce exclusive jurisdiction over export of commercial encryption
except for military end-uses or to identified individuals or
organizations in specific foreign countries.
In essence, H.R. 695 prevents economic espionage while protecting
hundreds of thousands of American jobs by affording all Americans the
freedom to use any type of encryption anywhere in the world; by allowing
any type of encryption to be sold in the United States; and creates a
level playing field by permitting the export of the generally available
software, hardware, and other encryption-related computer products.
The Committee hopes that other Members realize the need, value, and
importance of H.R. 695 as it works its way through the legislative
process. In the interest of the American people, of U.S. economic
leadership and growth, and of national security, the Committee hopes
that the House will pass the SAFE Act.
COMMITTEE ACTION
H.R. 695 was introduced by Representative Goodlatte on February 12,
1997, and referred to the Committee on Judiciary and in addition to the
Committee on International Relations for a period subsequently to be
determined by the Speaker. It was reported to the House by the Committee
on the Judiciary, amended, on May 22, 1997 (H. Rept. 105-108). On May
22, 1995, the referral to the Committee on International Relations was
extended through July 11, 1997, and on June 26, 1997, the referral to
the Committee on International Relations was extended for a period
ending not later than July 25, 1997.
On June 26, 1997, the bill was referred, in addition, to Committees
on Commerce, National Security, and the Permanent Select Committee on
Intelligence for a period ending not later than September 5, 1997, for
consideration of such provisions of the bill and the amendment reported
by the Committee on the Judiciary as fall within the jurisdiction of
those committees pursuant to clause 1(3) and (k), rule X and rule
XLVIII, respectively.
On May 8, 1997, the Subcommittee on International Economic Policy and
Trade held a hearing entitled: ``Encryption: Individual Right to Privacy
vs. National Security.'' Witnesses for this hearing included: Hon.
William Reinsch, Under Secretary of Commerce, Bureau of Export
Administration; Hon. William Crowell, Deputy Director, National Security
Agency; Hon. Robert Litt, Deputy Assistant Attorney General, Criminal
Division, U.S. Department of Justice; Mr. John Gage, Director, Science
Office, Sun Microsystems, Inc.; Mr. Humphrey Polanen, General Manager,
Network Security Products Group, Sun Microsystems, Inc.; Jerry Berman,
Executive Director, Center for Democracy and Technology; Tom Parenty,
Director of Security, Sybase Corporation; and Stephen T. Walker,
President and CEO, Chairman of the Board of Directors, Trusted
Information Systems.
On May 29, 1997, the Full Committee held a Members briefing on H.R.
695, ``the Security and Freedom through Encryption (SAFE) Act.''
Speakers for the briefing included Hon. Louis Freeh, Director, Federal
Bureau of Investigation and Hon. William Crowell, Deputy Director,
National Security Agency.
On June 4, 1997, the Subcommittee on International Economic Policy
and Trade held a Members Briefing on the future of U.S.-European trade
relations. Speakers for the briefing included: Hon. David L. Aaron, U.S.
Ambassador to the Organization for Economic Cooperation and Development
(OECD); H.E. Hugo Paemen, Head of the Delegation to the United States of
the Commission of the European Union; and Dr. Dominique
vanderMensbrugghe, Senior Economist, OECD Development Center.
On June 24, 1997, the Subcommittee on International Economic Policy
and Trade held a mark-up of H.R. 695, ``the Security and Freedom through
Encryption (SAFE) Act''. Witnesses included: Congressman Bob Goodlatte.
Amendment.-- An en bloc amendment was offered by Ros-Lehtinen,
Gejdenson, Campbell and Sherman. The amendment removes the distinction
between mass market and customized software thus ensuring that
customized software is also subject to liberalized export controls. It
expands section 3 on exports of encryption by including consumer
products which do not necessarily fall under the umbrella of
``computing'' products but which also require and use encryption. It
broadens the scope and definition of ``generally available'' to include
hardware with encryption capabilities. The amendment also adds a fourth
section to the bill in the form of a sense of Congress regarding
international cooperation. The amendment passed by voice vote.
A motion to report the bill, as amended, to the Full Committee passed
by a roll call vote, as follows:
Voting yes: Ros-Lehtinen, Manzullo, Chabot, Campbell, Blunt, Brady,
Rohrabacher, Gejdenson, Danner, Hilliard, Sherman, Rothman, Clement,
Luther.
Voting no: Bereuter.
Passed: 14 1.
On June 26, 1997, the Full Committee held a classified Members
briefing on the impact of H.R. 695, ``the Security and Freedom through
Encryption (SAFE) Act'' on national security and law enforcement
activities. Speakers for the briefing included: Hon. Louis Freeh,
Director, Federal Bureau of Investigation; Hon. William Crowell, Deputy
Director, National Security Agency; Hon. William Reinsch, Under
Secretary of Commerce, Bureau of Export Administration.
On July 22, 1997, the Full Committee marked up the bill in open
session, pursuant to notice. The Committee first adopted the amendment
recommended by the Subcommittee on International Economic Policy by
unanimous consent, as original text for the purposes of amendment.
Representatives Goodlatte and Lofgren and representatives of the
Administration (The Hon. William Reinsch, Under Secretary of Commerce;
Mr. Jim Kallstrom, Federal Bureau of Investigation; Mr. James R. Taylor,
National Security Agency; and Mr. Anthony Bocchichio of the Drug
Enforcement Agency) responded to questions from members during the
course of the markup.
After further consideration, on that date, a quorum being present,
the Full Committee by voice vote ordered the bill reported to the House
with the recommendation that the bill, as amended, do pass.
Rollcall votes on amendments
In compliance with clause (2)(l)(2)(B) of rule XI of the Rules of the
House of Representatives, the record of committee roll call votes on
final passage or amendments during the full committee's consideration of
H.R. 695 is set out below, as is a report of the full committee's final
action on the bill.
Description of Amendment, Motion, Order, or Other Proposition
(votes during markup of H.R. 695--July 22, 1997)
Vote No. 1.--Gilman amendment provide that certain items could not be
exported if in the opinion of the President they would endanger the
national security.
Voting Yes: Gilman, Leach, Bereuter, Gallegly, Fox, Hamilton, Berman,
Menendez, Brown, Danner, Rothman, Clement, and Davis.
Voting No: Smith, Ros-Lehtinen, Ballenger, Rorhabacher, Manzullo,
Royce, King, Chabot, Sanford, Houghton, Campbell, Blunt, Moran, Brady,
Gejdenson, Ackerman, Hastings, Hilliard, Capps, Sherman, Wexler, and
Luther.
Ayes, 13. Noes, 22.
Note: The bill was subsequently ordered reported favorably, amended,
by voice vote, a quorum being present, on July 22, 1997.
SECTION-BY-SECTION ANALYSIS
Section 1. Short Title
This section states that this Act may be cited as the ``Security and
Freedom Through Encryption (SAFE) Act''.
Section 2. Sale And Use Of Encryption
This section states that, in general, Part I of Title 18, United
States Code, is amended by adding a new chapter after chapter 121.
This section also creates ``Chapter 122-Encrypted Wire And Electronic
Information'' which includes sections; 2801. Definitions., 2802. Freedom
To Use Encryption., 2803. Freedom to Sell Encryption., 2804. Prohibition
On Mandatory Key Escrow., 2805. Unlawful Use Of Encryption in the
furtherance of a criminal act.
Section 2801 is titled ``Definitions'' and provides definitions for
``person'' ``State'' ``wire communication'' ``electronic
communication'', ``investigative or law enforcement officer'', judge of
competent jurisdiction'', ``electronic storage'', ``encrypt'',
``encryption'', ``key'', and ``United States person''. Many of these
definitions were taken explicitly from 18 U.S.C. 2810.
New section 2802 states that it is legal for any person in the United
States or any United States person in a foreign country, to use any form
of encryption regardless of the algorithm, key length, or technique used
in the encryption.
New section 2803 states that it is legal for any person in the United
States to sell in interstate commerce encryption products using any form
of encryption regardless of the algorithm, key length, or technique
used. The Committee intends that Sections 2802 and 2803 be read as
limitations on government power. They should not be read as overriding
otherwise lawful employer policies concerning employee use of the
employers computer system, nor as limiting the employer's otherwise
lawful means for remedying violations of those policies.
New section 2804 specifically prohibits requiring any person in
lawful possession of an encryption key to turn that key over to another
person. This section prevents any form of mandatory key escrow system
with an exception for any law enforcement personnel or a member of the
intelligence community.
New section 2805 make it a crime to use encryption unlawfully in
furtherance of some other crime. This new crime is punishable with a
sentence of 5 years for a first offence and 10 years. This section
requires that for a person to violate this section that person must be
found guilty of some other federal felony crime and was deliberately
using encryption to avoid detection of that other federal felony crime.
Subsection 2(b) of H.R. 695 provides for a conforming amendment to
the table of chapters in Title 18.
Section 3. Export of Encryption
Subsection 3(a) of H.R. 695 amends the Export Administration Act by
creating a new subsection (g) entitled ``Computers and Related
Equipment,'' to 50 U.S.C. App. 2416.
New subsection (g)1 place all encryption products, except those
specifically designed or modified for military use, under the
jurisdiction of the Secretary of Commerce.
New subsection (g)2 allows encryption software that is generally
available or in the public domain, like mass-market software products,
to be exported freely except pursuant to the Trading With The Enemy Act
or the International Emergency Economic Powers Act (but only to the to
the extent that the authority of such Act is not exercised to extend
controls imposed under this Act.). The Subcommittee on International
Economic Policy and Trade, on an amendment offered by Chair Ros-Lehtinen
and Ranking Member Gejdenson, and others, amended Subsection (g)2 on a
voice vote in Subcommittee to include certain other consumer products,
or component or subassembly (provided those components are not capable
of military or intelligence end use in its condition as exported.),
which have encryption capabilities that are inaccessible to the end user
and which are commercially available within the United States or abroad.
These product as discussed by the Subcommittee are consumer products
such as small dish satellite receivers, digital video disk players,
smart cards, Web TV, etc. These products, which are commercially
available within the United States or abroad, were viewed by the
Subcommittee as being clearly and purely for consumer end-use and not
for military purposes. The Ros-Lehtinen amendment also amended (g)2 to
include customized software for an otherwise lawful purpose by a
specific purchaser or group of purchasers.
New subsection (g)3 requires the Secretary of Commerce to allow other
encryption software to be exported unless there is substantial evidence
that will be put to military or terrorist uses or that it will be
reexported without U.S. authorization.
New subsection (g)4 requires the Secretary to allow the export of
hardware with encryption capabilities when the Commerce Department finds
that it is commercially available from foreign suppliers without
effective restrictions.
New subsection (g)5 provides definitions for this subsection. The
subcommittee amendment offered by Chair Ros-Lehtinen, and others also
amended this subsection to include the same consumer products added to
subsection (g)2.
As the Ros-Lehtinen amendment adopted in the Subcommittee on
International Economic Policy and Trade stated, the Committee would like
to reiterate that, with the ever increasing use of computer technology
and computer information (hardware and software) in consumer product
lines for protection of privacy, information security, and intellectual
property interests, it intends this legislation to cover all
devices--whether traditional computing devices or convergent consumer
products that incorporate encryption. The applications covered by this
legislation include video, audio, and data communications systems and
telecommunication equipment. Hardware and software containing
encryption, such as encoders, decoders, and network terminals, which are
essential to protect the video signal, are therefore included under
section 3(a) of this Act. As well as video, audio, data communications
systems containing encryption and decryption capability are used by
cable, satellite, and wireless delivery systems. This legislation is
also intended to include set-top devices and other terminals where the
encryption is not directly available to the user but is used for
purposes such as pay per view, and hardware such as network computers,
telephones or cable modems, satellite uplinks and downlinks.
Subsection 3(b) of H.R. 695 provides that for the purposes of
carrying out the amendment made by subsection 3(a), the Export
Administration Act shall be deemed to be in effect. This statement is
necessary because Congress failed to reauthorize the Export
Administration Act and it expired in 1994. The Administration maintains
the Export Administration Act policies by executive order. The Committee
plans to reauthorize the Export Administration Act in this Congress.
Section 4. Sense of Congress Regarding International Cooperation
This section asks on the President to call an international
conference for the purpose of
achieving an agreement among the encryption producing
countries on policies which will ensure that the free use and trade of
this technology does not hinder mutual technology.
COMMITTEE OVERSIGHT FINDINGS
In compliance with clause 2(l)(3)(A) of rule XI of the Rules of the
House of Representatives, the Committee reports the findings and
recommendations of the Committee, based on oversight activities under
clause 2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT FINDINGS
No findings or recommendations of the Committee on Government Reform
and Oversight were received as referred to in clause 2(l)(3)(D) of rule
XI of the Rules of the House of Representatives.
ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b) of the
Federal Advisory Committee Act were created by this legislation.
APPLICABILITY TO THE LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to the terms
and conditions of employment or access to public services or
accommodations within the meaning of section 102(b)(3) of the
Congressional Accountability Act.
CONSTITUTIONAL AUTHORITY STATEMENT
In compliance with clause 2(l)(4) of rule XI of the Rules of the
House of Representatives, the Committee cites the following specific
powers granted to the Congress in the Constitution as authority for
enactment of H.R. 695 as reported by the Committee: Article I, section
8, clause 1 (relating to providing for the common defense and general
welfare of the United States); and Article I, section 8, clause 18
(relating to making all laws necessary and proper for carrying into
execution powers vested by the Constitution in the government of the
United States).
NEW BUDGET AUTHORITY AND TAX EXPENDITURES, CONGRESSIONAL BUDGET OFFICE
COST ESTIMATE
The Committee expects to adopt a cost estimate of the Congressional
Budget Office as its submission of any new required information on new
budget authority, new spending authority, new credit authority, or an
increase or decrease in the national debt, which it expects to provide
in a supplemental report.
FEDERAL MANDATES STATEMENT
The Committee adopts as its own the estimate of Federal mandates
prepared by the Director of the Congressional Budget Office pursuant to
section 423 of the Unfunded Mandates Reform Act.
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 25, 1997.
Hon. Benjamin Gilman, Chairman, Committee on International Relations,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has prepared the
enclosed mandates statement for H.R. 695, the Security and Freedom
Through Encryption (SAFE) Act. CBO's analysis of the bill's federal
costs will be sent to you as soon as it is completed.
If you wish further details on this estimate, we will be pleased to
provide them. The CBO staff contacts are Pepper Santalucia (for the
state and local impact) and Matt Eyles (for the private-sector impact).
Sincerely,
Jane E. O'Neill, Director.
Enclosure.
CONGRESSIONAL BUDGET OFFICE MANDATES STATEMENT
H.R. 695--Security and Freedom Through Encryption (SAFE) Act
H.R. 695 would allow individuals in the United States to use and sell
any form of encryption and would prohibit states or the federal
government from requiring individuals to relinquish the key to
encryption technologies to any third party. The bill also would prevent
the Bureau of Export Administration in the Department of Commerce from
restricting the export of most nonmilitary encryption products. Finally,
H.R. 695 would establish criminal penalties and fines for the willful
use of encryption technologies in committing criminal offenses.
The bill would prohibit states from requiring persons to make
encryption keys available to another person or entity. This prohibition
would be an intergovernmental mandate as defined in the Unfunded
Mandates Reform Act of 1995 (UMRA). However, states would bear no costs
as a result of this mandate because none currently require the
registration or availability of such keys. H.R. 695 contains no
private-sector mandates as defined in UMRA.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3 of rule XIII of the Rules of the House of
Representatives, changes in existing law made by the bill, as reported,
are shown as follows (new matter is printed in italic and existing law
in which no change is proposed is shown in roman):
TITLE 18, UNITED STATES CODE
* * * * * * *
PART I--CRIMES
Chap.
Sec.
1. General provisions
1
* * * * * * *
122. Encrypted wire and electronic information
2801
* * * * * * *
CHAPTER 122--ENCRYPTED WIRE AND ELECTRONIC INFORMATION
2801. Definitions.
2802. Freedom to use encryption.
2803. Freedom to sell encryption.
2804. Prohibition on mandatory key escrow.
2805. Unlawful use of encryption in furtherance of a criminal act.
2801. Definitions
As used in this chapter--
(1) the terms ``person'', ``State'', ``wire communication'',
``electronic communication'', ``investigative or law enforcement
officer'', ``judge of competent jurisdiction'', and ``electronic
storage'' have the meanings given those terms in section 2510 of this
title;
(2) the terms ``encrypt'' and ``encryption'' refer to the scrambling
of wire or electronic information using mathematical formulas or
algorithms in order to preserve the confidentiality, integrity, or
authenticity of, and prevent unauthorized recipients from accessing or
altering, such information;
(3) the term ``key'' means the variable information used in a
mathematical formula, code, or algorithm, or any component thereof, used
to decrypt wire or electronic information that has been encrypted; and
(4) the term ``United States person'' means--
(A) any United States citizen;
(B) any other person organized under the laws of any State, the
District of Columbia, or any commonwealth, territory, or possession of
the United States; and
(C) any person organized under the laws of any foreign country who
is owned or controlled by individuals or persons described in
subparagraphs (A) and (B).
2802. Freedom to use encryption
Subject to section 2805, it shall be lawful for any person within any
State, and for any United States person in a foreign country, to use any
encryption, regardless of the encryption algorithm selected, encryption
key length chosen, or implementation technique or medium used.
2803. Freedom to sell encryption
Subject to section 2805, it shall be lawful for any person within any
State to sell in interstate commerce any encryption, regardless of the
encryption algorithm selected, encryption key length chosen, or
implementation technique or medium used.
2804. Prohibition on mandatory key escrow
(a) Prohibition.--No person in lawful possession of a key to
encrypted information may be required by Federal or State law to
relinquish to another person control of that key.
(b) Exception for Access for Law Enforcement Purposes.--Subsection
(a) shall not affect the authority of any investigative or law
enforcement officer, acting under any law in effect on the effective
date of this chapter, to gain access to encrypted information.
2805. Unlawful use of encryption in furtherance of a criminal act
Any person who willfully uses encryption in furtherance of the
commission of a criminal offense for which the person may be prosecuted
in a court of competent jurisdiction--
(1) in the case of a first offense under this section, shall be
imprisoned for not more than 5 years, or fined in the amount set forth
in this title, or both; and
(2) in the case of a second or subsequent offense under this
section, shall be imprisoned for not more than 10 years, or fined in the
amount set forth in this title, or both.
* * * * * * *
SECTION 17 OF THE EXPORT ADMINISTRATION ACT OF 1979
Sec. 17. (a) * * *
* * * * * * *
(g) Certain Consumer Products, Computers, and Related Equipment.--
(1) General rule.--Subject to paragraphs (2), (3), and (4), the
Secretary shall have exclusive authority to control exports of all
computer hardware, software, and technology for information security
(including encryption), except that which is specifically designed or
modified for military use, including command, control, and intelligence
applications.
(2) Items not requiring licenses.--No validated license may be
required, except pursuant to the Trading With The Enemy Act or the
International Emergency Economic Powers Act (but only to the extent that
the authority of such Act is not exercised to extend controls imposed
under this Act), for the export or reexport of--
(A) any consumer product commercially available within the United
States or abroad which--
(i) includes encryption capabilities which are inaccessible to the
end user; and
(ii) is not designed for military or intelligence end use;
(B) any component or subassembly designed for use in a consumer
product described in subparagraph (A) which itself contains encryption
capabilities and is not capable of military or intelligence end use in
its condition as exported;
(C) any software, including software with encryption capabilities--
(i) that is generally available, as is, and is designed for
installation by the purchaser;
(ii) that is in the public domain for which copyright or other
protection is not available under title 17, United States Code, or that
is available to the public because it is generally accessible to the
interested public in any form; or
(iii) that is customized for an otherwise lawful use by a specific
purchaser or group of purchasers;
(D) any computing device solely because it incorporates or employs
in any form--
(i) software (including software with encryption capabilities) that
is exempted from any requirement for a validated license under
subparagraph (C); or
(ii) software that is no more technically complex in its encryption
capabilties than software that is exempted from any requirement for a
validated license under subparagraph (C) but is not designed for
installation by the purchaser;
(E) any computer hardware that is generally available, solely
because it has encryption capabilities; or
(F) any software or computing device solely on the basis that it
incorporates or employs in any form interface mechanisms for interaction
with other hardware and software, including hardware, and software, with
encryption capabilities.
(3) Software with encryption capabilities.--The Secretary shall
authorize the export or reexport of software with encryption
capabilities for nonmilitary end uses in any country to which exports of
software of similar capability are permitted for use by financial
institutions not controlled in fact by United States persons, unless
there is substantial evidence that such software will be--
(A) diverted to a military end use or an end use supporting
international terrorism;
(B) modified for military or terrorist end use; or
(C) reexported without any authorization by the United States that
may be required under this Act.
(4) Hardware with encryption capabilities.--The Secretary shall
authorize the export or reexport of computer hardware with encryption
capabilities if the Secretary determines that a product offering
comparable security is commercially available outside the United States
from a foreign supplier, without effective restrictions.
(5) Definitions.--As used in this subsection--
(A) the term ``encryption'' means the scrambling of wire or
electronic information using mathematical formulas or algorithms in
order to preserve the confidentiality, integrity, or authenticity of,
and prevent unauthorized recipients from accessing or altering, such
information;
(B) the term ``generally available'' means--
(i) in the case of software (including software with encryption
capabilities), software that is offered for sale, license, or transfer
to any person without restriction, whether or not for consideration,
including, but not limited to, over-the-counter retail sales, mail order
transactions, phone order transactions, electronic distribution, or sale
on approval; and
(ii) in the case of hardware with encryption capabilities, hardware
that is offered for sale, license, or transfer to any person without
restriction, whether or not for consideration, including, but not
limited to, over-the-counter retail sales, mail order transactions,
phone order transactions, electronic distribution, or sale on approval;
(C) the term ``as is'' means, in the case of software (including
software with encryption capabilities), a software program that is not
designed, developed, or tailored by the software publisher for specific
purchasers, except that such purchasers may supply certain installation
parameters needed by the software program to function properly with the
purchaser's system and may customize the software program by choosing
among options contained in the software program;
(D) the term ``is designed for installation by the purchaser''
means, in the case of software (including software with encryption
capabilities) that--
(i) the software publisher intends for the purchaser (including any
licensee or transferee), who may not be the actual program user, to
install the software program on a computing device and has supplied the
necessary instructions to do so, except that the publisher may also
provide telephone help line services for software installation,
electronic transmission, or basic operations; and
(ii) the software program is designed for installation by the
purchaser without further substantial support by the supplier;
(E) the term ``computing device'' means a device which incorporates
one or more microprocessor-based central processing units that can
accept, store, process, or provide output of data; and
(F) the term ``computer hardware'', when used in conjunction with
information security, includes, but is not limited to, computer systems,
equipment, application-specific assemblies, modules, and integrated
circuits.
DISSENTING VIEWS
While well-intentioned, this bill's one-dimensional focus on the
decontrol of encryption products would upset the vital balance that U.S.
policy seeks to strike between the competitiveness of American industry
and U.S. national security and law enforcement goals. The bill would
prohibit any licensing or review of exports of encrypted software and
hardware items. Consequently, its implementation would not only hinder
our national security efforts but also undermine the Administration's
ability to forge an international consensus on the use and
implementation of national key recovery policies.
While SAFE Act advocates correctly point out that the Administration
has not yet achieved a multilateral consensus endorsing its preference
for a key management infrastructure approach on encryption issues, it
should be noted that recent cryptography guidelines adopted by the
Organization for Economic Cooperation and Development have stressed the
need to balance privacy, law enforcement, national security concerns,
and commercial interests. They also underline the fact that failure to
coordinate these policies could cripple the global information network
and impede international trade.
A July policy brief published by the Brookings Institution by Kenneth
Flamm on ``Deciphering the Cryptography Debate'' noted along the same
lines that:
``A level playing field, with common global rules of the game, is
needed to avoid giving economic rivals competitive advantages over one
another. The administration made an important and correct decision in
seeking an international consensus on the key recovery approach to
strong encryption and must be sure to continue to work hard in seeking
this common global approach. While it has yet to achieve such a
consensus within the OECD, many of the key players with the technical
capability to ship advanced cryptography products and affect global
markets--Britain, France and (quietly) Japan--are supporting the U.S.
approach, and if a few more (like Germany and Israel) can be brought on
board, the critical mass around which the core of an international
agreement can be assembled will exist.''
If enacted in its current form, this bill would undermine any
prospects for achieving such consensus and would compel a number of the
OECD countries to put additional import restrictions in place blocking
the entry of our strongest encryption products.
We recognize that the development of strong encryption can play a
vital role in the development of electronic commerce and promoting
privacy but the development of key recovery policies is essential to
head off a potential crisis in the years ahead for our law enforcement
authorities. If strong encryption is in widespread use in the near
future, it will make it virtually impossible to decipher encrypted
communications. Brute force attacks to crack encryption algorithms in
that type of environment are not feasible or realistic, especially in
the time sensitive cases where law enforcement needs access to encrypted
files to save lives.
By removing all controls on the export of any software and hardware
with encryption capabilities, this bill threatens U.S. national security
and law enforcement interests.
With respect to U.S. national security, encrypted communications make
it more difficult for U.S. intelligence agencies to monitor
communications relating to terrorism, weapons proliferation, military
operations, and other threats to U.S. national security interests. The
Administration does not dispute the contention of U.S. software
manufacturers that encryption products are in use around the world.
But the Administration also points out that these products are not
yet being widely used by individuals, groups, and governments whose
activities pose threats to U.S. security and safety. As we understand
it, the goal of U.S. export control policy is not to prevent the spread
of
encryption worldwide--something which clearly cannot be
done--but to slow down the spread of these products enough to give
U.S.-led diplomacy an opportunity to achieve increased multilateral
cooperation on common export control policies and on the adoption of a
global key management infrastructure. Such an international key
management infrastructure would enable U.S. intelligence and law
enforcement agencies to cooperate with their counterparts in friendly
countries in gaining access to communications that threaten common
security and safety interests.
The elimination of all U.S. controls on encryption exports will also
jeopardize domestic law enforcement. We recognize that encryption is
essential to the fulfillment of the promise of electronic commerce and
to the protection of individual privacy in a networked world. But
encryption also complicates the mission of U.S. law enforcement
agencies, because it can make it impossible for law enforcement
personnel to understand data and communications to which they have been
granted access under court order or other proper legal authority.
This is why current U.S. policy seeks to promote the adoption of key
recovery features in encryption products used in the United States.
Export controls are a key component of this policy. Under current
practice, U.S. firms are permitted to export powerful encryption
products if they already include key recovery features or if they pledge
to develop such features during the next two years. If we eliminate all
U.S. export controls, as this bill would do, the federal government will
therefore lose one of its most important means for promoting the
development of key recovery in the U.S. market. That will harm U.S. law
enforcement.
Lawful wiretapping and duly authorized court-ordered access to
information and materials on a timely basis are essential tools for
police and law enforcement authorities. If this legislation were to be
enacted in its present form, the resultant proliferation of global and
interconnected encryption has the very real potential to deny our local,
state and federal authorities the timely access they now enjoy to data
and other communications, even after a court order has been issued.
More than one half the annual court-ordered wire taps are at the
state and local level, and of the national total for all such wire taps,
more than 70% are for drug-related cases. Congressional action on this
legislation has the potential to affect our cities and towns where the
devastating impact of illicit drugs already causes nearly $70 billion in
annual societal costs. We ought not to add to that carnage and
destruction by denying law enforcement one of the most effective tools
against this scourge, timely access to lawful requests for information
needed to combat these crimes.
Attorney General Janet Reno, our nation's chief law enforcement
officer, urged the members of our Committee to consider the effects of
this legislation in her July 18, 1997, letter to the International
Relations Committee. She said that ``* * * the misuse of encryption
technology will become a matter of life and death in many instances.
That is why we urge you to adopt a balanced approach.'' We invite the
attention of Members to correspondence from our Nation's law enforcement
and national security leaders, appended below.
During the full committee's consideration of H. R. 695, Chairman
Gilman offered an amendment which would have helped to create this
necessary balance in the bill. It would have provided the President the
authorities to control the export and reexport of encrypted items if he
determines that they would adversely affect our national security and
our ability to fight crimes such as drug trafficking, terrorism and
espionage. This amendment was, unfortunately, not adopted.
Other Committees of the House including National Security,
Intelligence and Commerce will now review this legislation through
September 5 before it is considered by the full House later this year.
We urge our colleagues on these Committees as well as our colleagues on
the International Relations and the Judiciary Committees to review this
legislation very carefully and consider its impact on our society and
our ability to fight terrorism and protect our national security
interests.
Benjamin A. Gilman.
Lee H. Hamilton.
Doug Bereuter.
Office of the Attorney General,
Washington, DC, July 18, 1997.
Dear Member of Congress: Congress is considering a variety of
legislative proposals concerning encryption. Some of these proposals
would, in effect, make it impossible for the Federal Bureau of
Investigation (FBI), Drug Enforcement Administration (DEA), Secret
Service, Customs Service, Bureau of Alcohol, Tobacco and Firearms, and
other federal, state, and local law enforcement agencies to lawfully
gain access to criminal telephone conversations or electronically stored
evidence possessed by terrorists, child pornographers, drug kingpins,
spies and other criminals. Since the impact of these proposals would
seriously jeopardize safety and national security, we collectively urge
you to support a different, balanced approach that strongly supports
commercial and privacy interests but maintains our ability to
investigate and prosecute serious crimes.
We fully recognize that encryption is critical to communications
security and privacy, and that substantial commercial interests are at
stake. Perhaps in recognition of these facts, all the bills being
considered allow market forces to shape the development of encryption
products. We, too, place substantial reliance on market forces to
promote electronic security and privacy, but believe that we cannot rely
solely on market forces to protect the public safety and national
security. Obviously, the government cannot abdicate its solemn
responsibility to protect public safety and national security.
Currently, of course, encryption is not widely used, and most data is
stored, and transmitted, in the clear. As we move from a plain text
world to an encrypted one, we have a critical choice to make: we can
either (1) choose robust, unbreakable encryption that protects commerce
and privacy but gives criminals a powerful new weapons, or (2) choose
robust, unbreakable encryption that protects commerce and privacy and
gives law enforcement the ability to protect public safety. The choice
should be obvious and it would be a mistake of historic proportions to
do nothing about the dangers to public safety posed by encryption
without adequate safeguards for law enforcement.
Let there be no doubt: without encryption safeguards, all Americans
will be endangered. No one disputes this fact; not industry, not
encryption users, no one. We need to take definitive actions to protect
the safety of the public and security of the nation. That is why law
enforcement at all levels of government--including the Justice
Department, Treasury Department, the National Association of Attorneys
General, International Association of Chiefs of Police, the Major City
Chiefs, the National Sheriffs' Association, and the National District
Attorneys Association--are so concerned about this issue.
We all agree that without adequate legislation, law enforcement in
the United States will be severely limited in its ability to combat the
worst criminals and terrorists. Further, law enforcement agrees that the
widespread use of robust non-key recovery encryption ultimately will
devastate our ability to fight crime and prevent terrorism.
Simply stated, technology is rapidly developing to the point where
powerful encryption will become commonplace both for routine telephone
communications and for stored computer data. Without legislation that
accommodates public safety and national security concerns, society's
most dangerous criminals will be able to communicate safely and
electronically store data without fear of discovery. Court orders to
conduct electronic surveillance and court-authorized search warrants
will be ineffectual, and the Fourth Amendment's carefully-struck balance
between ensuring privacy and protecting public safety will be forever
altered by technology. Technology should not dictate public policy, and
it should promote, rather than defeat, public safety
We are not suggesting the balance of the Fourth Amendment be tipped
toward law enforcement either. To the contrary, we only seek the status
quo, not the lessening of any legal standard or the expansion of any law
enforcement authority. The Fourth Amendment protects the privacy and
liberties of our citizens but permits law enforcement to use tightly
controlled investigative techniques to obtain evidence of crimes. The
result has been the freest country in the world with the strongest
economy.
Law enforcement has already confronted encryption in high-profile
espionage, terrorist, and criminal cases. For example:
An international terrorist was plotting to blow up 11 U.S.-owned
commercial airliners in the Far East. His laptop computer, which was
seized in Manila, contained encrypted files concerning this terrorist
plot;
A subject in a child pornography case used encryption in
transmitting obscene and pornographic images of children over the
Internet; and
A major international drug trafficking subject recently used a
telephone encryption device to frustrate court-approved electronic
surveillance.
And this is just the tip of the iceberg. Convicted spy Aldrich Ames,
for example, was told by the Russian Intelligence Service to encrypt
computer file information that was to be passed to them.
Further, today's international drug trafficking organizations are the
most powerful, ruthless and affluent criminal enterprises we have ever
faced. We know from numerous past investigations that they have utilized
their virtually unlimited wealth to purchase sophisticated electronic
equipment to facilitate their illegal activities. This has included
state of the art communication and encryption devices. They have used
this equipment as part of their command and control process for their
international criminal operations. We believe you share our concern that
criminals will increasingly take advantage of developing technology to
further insulate their violent and destructive activities.
Requests for cryptographic support pertaining to electronic
surveillance interceptions from FBI Field Offices and other law
enforcement agencies have steadily risen over the past several years.
There has been an increase in the number of instances where the FBI's
and DEA's court-authorized electronic efforts were frustrated by the use
of encryption that did not allow for law enforcement access.
There have also been numerous other cases where law enforcement,
through the use of electronic surveillance, has not only solved and
successfully prosecuted serious crimes but has also been able to prevent
life-threatening criminal acts. For example, terrorists in New York were
plotting to bomb the United Nations building, the Lincoln and Holland
Tunnels, and 26 Federal Plaza as well as conduct assassinations of
political figures. Court-authorized electronic surveillance enabled the
FBI to disrupt the plot as explosives were being mixed. Ultimately, the
evidence obtained was used to convict the conspirators. In another
example, electronic surveillance was used to stop and then convict two
men who intended to kidnap, molest, and kill a child. In all of these
cases, the use of encryption might have seriously jeopardized public
safety and resulted in the loss of life.
To preserve law enforcement's abilities, and to preserve the balance
so carefully established by the Constitution, we believe any encryption
legislation must accomplish three goals in addition to promoting the
widespread use of strong encryption. It must establish:
A viable key management infrastructure that promotes electronic
commerce and enjoys the confidence of encryption users;
A key management infrastructure that supports a key recovery scheme
that will allow encryption users access to their own data should the
need arise, and that will permit law enforcement to obtain lawful access
to the plain text of encrypted communications and data; and
An enforcement mechanism that criminalizes both improper use of
encryption key recovery information and the use of encryption for
criminal purposes.
Only one bill, S. 909 (the McCain/Kerrey/Hollings bill), comes close
to meeting these core public safety, law enforcement, and national
security needs. The other bills being considered by Congress, as
currently written, risk great harm to our ability to enforce the laws
and protect our citizens. We look forward to working to improve the
McCain/Kerrey/Hollings bill.
In sum, while encryption is certainly a commercial interest of great
importance to this Nation, it is not solely a commercial or business
issue. Those of us charged with the protection of public safety and
national security, believe that the misuse of encryption technology will
become a matter of life and death in many instances. That is why we urge
you to adopt a balanced approach that accomplishes the goals mentioned
above. Only this approach will allow police departments, attorneys
general, district attorneys, sheriffs, and federal authorities to
continue to use their most effective investigative techniques, with
court approval, to fight crime and espionage and prevent terrorism.
Sincerely your,
Janet Reno, Attorney General; Louis Freeh, Director, Federal Bureau
of Investigation; Thomas A. Constantine, Director, Drug Enforcement
Administration; Raymond W. Kelly, Undersecretary for Enforcement, U.S.
Department of Treasury; John W. Magaw, Director, Bureau of Alcohol,
Tobacco and Firearms; Barry McCaffrey, Director, Office of National Drug
Control Policy; Lewis C. Merletti, Director, United States Secret
Service; George J. Weise, Commissioner, United States Customs Service.
The Secretary of Defense,
Washington, DC, July 21, 1997.
Dear Member of Congress: Recently you received a letter from the
nation's senior law enforcement officials regarding US encryption
policies. I am writing today to express my strong support for their
views on this important issue.
As you know, the Department of Defense is involved on a daily basis
in countering international terrorism, narcotics trafficking, and the
proliferation of weapons of mass destruction. The spread of unbreakable
encryption, as a standard feature of mass market communication products,
presents a significant threat to the ability of the US and its allies to
monitor the dangerous groups and individuals involved in these
activities. Passage of legislation which effectively decontrols
commercial encryption exports would undermine U.S. efforts to foster the
use of strong key recovery encryption domestically and abroad. Key
recovery products will preserve governments' abilities to counter
worldwide terrorism, narcotics trafficking and proliferation.
It is also important to note that the Department of Defense relies on
the Federal Bureau of Investigation for the apprehension and prosecution
of spies. Sadly, there have been over 60 espionage convictions of
federal employees over the last decade. While these individuals
represent a tiny minority of government employees, the impact of
espionage activities on our nation's security can be enormous. As the
recent arrests of Nicholson, Pitts and Kim clearly indicate, espionage
remains a very serious problem. Any policies that detract from the FBI's
ability to perform its vital counterintelligence function, including the
ability to perform wiretaps, inevitably detract from the security of the
Department of Defense and the nation.
Encryption legislation must also address the nation's domestic
information security needs. Today, approximately 95% of DoD
communications rely on public networks; other parts of government, and
industry, are even more dependent on the trustworthiness of such
networks. Clearly, we must ensure that encryption legislation addresses
these needs. An approach such as the one contained in S. 909 can go a
long way toward balancing the need for strong encryption with the need
to preserve national security and public safety. I hope that you will
work with the Administration to enact legislation that addresses these
national security concerns as well as the rights of the American people.
I appreciate your consideration of these views.
Sincerely,
Bill Cohen.
International Association of Chiefs of Police,
Alexandria, VA, July 21, 1997.
Dear Member of Congress: Enclosed is a letter sent to you by the
Attorney General, the Director of National Drug Control Policy and all
the federal law enforcement heads concerning encryption legislation
being considered by congress. Collectively we, the undersigned,
represent over 17,000 police departments including every major city
police department, over 3,000 sheriffs departments, nearly every
district attorney in the United States and all of the state Attorneys
General. We fully endorse the position taken by our federal counterparts
in the enclosed letter. As we have stated many times, Congress must
adopt a balanced approach to encryption that fully addresses public
safety concerns or the ability of state and local law enforcement to
fight crime and drugs will be severely damaged.
Any encryption legislation that does not ensure that law enforcement
can gain timely access to the plaintext of encrypted conversations and
information by established legal procedures will cause grave harm to
public safety. The risk cannot be left to the uncertainty of market
forces or commercial interests as the current legislative proposals
would require. Without adequate safeguards, the unbridled use of
powerful encryption soon will deprive law enforcement of two of its most
effective tools, court authorized electronic surveillance and the search
and seizure of information stored in computers. This will substantially
tip the balance in the fight against crime towards society's most
dangerous criminals as the information age develops.
We are in unanimous agreement that congress must adopt encryption
legislation that requires the development, manufacture, distribution and
sale of only key recovery products and we are opposed to the bills that
do not do so. Only the key recovery approach will ensure that law
enforcement can continue to gain timely access to the plaintext of
encrypted conversations and other evidence of crimes when authorized by
a court to do so. If we lose this ability--and the bills you are
considering will have this result--it will be a substantial set back for
law enforcement at the direct expense of public safety.
Sincerely yours,
Darrell L. Sanders,
President, International Association of Chiefs of Police.
James E. Doyle,
President, National Association of Attorneys General.
Fred Scoralic,
President, National Sheriffs' Association.
William L. Murphy,
President, National District Attorneys Association.
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