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. Last Updated: 07/27/2016

U.S. Eases Encryption Export

NEW YORK -- Bucking pressure from the U.S. Justice Department, the FBI and intelligence agencies, the White House has essentially eliminated its complex controls on the export of data-scrambling hardware and software, handing a surprise victory to congressional, high-technology and privacy groups that have spent years fighting for the change.

House leaders, who had been planning to vote later this month on a bill to overturn the Clinton administration's policy, said they were elated by Thursday's change and would pull their bill back until the administration could draft final regulations.

"This is huge," said Representative Bob Goodlatte of Virginia, who, along with California Representative Zoe Lofgren, whose district includes Silicon Valley, has been championing legislation to eliminate the encryption export controls.

The technology is used to scramble data and computer communications in general, and especially to keep them private on the Internet.

In a telephone interview, Goodlatte called the administration's new position "very close" to the intentions of his bill.

"This is a tremendous victory for everybody who has been proposing that the administration change its export policy on encryption so that we can make it more widely available and U.S. companies can compete overseas," he said.

The change would significantly simplify the Commerce Department's complex and inconsistent licensing requirements for the export of strong data-scrambling technology, and essentially allow U.S. companies to sell their products abroad after a one-time review. The exceptions would be for products being sold to foreign governments or military establishments. And a prohibition would remain on exporting computer security technology to nations the Unites States labels as terrorist: Iran, Iraq, Libya, Syria, Sudan, North Korea and Cuba.

Despite increasing pressure over the last few years from industry, Congress and privacy groups to lift the controls, the administration, at the urging of the FBI and intelligence officials, has resisted calls for change. Law enforcement officials have insisted that the widespread availability of strong encryption products would make it harder for them to fight terrorists and drug cartels in the Digital Age.

Louis Freeh, the FBI director, had been pushing to tie any easing of the export controls to requirements that software and equipment manufacturers develop technology that would give police agencies a backdoor key to unscramble encrypted communications when they suspect a crime has been committed.

Law enforcement officials finally lost that argument to the industry and privacy groups, which noted that strong encryption products made in other countries were already widely available. High-technology companies said export controls were simply giving their competitors overseas an unfair advantage in the global marketplace.

Privacy advocates also said that the export rules deprived Internet users of the most advanced technologies for keeping their data and communications safe.

As a concession to police agencies, the administration said it would push for additional money to help law enforcement and national security experts develop new ways to detect and fight crimes in electronic settings.

The administration also said it would propose legislation to set standards under which investigators would be able to seek "spare keys" held by third parties.