[Congressional Record Volume 143, Number 160 (Thursday, November 13, 1997)]
[Extensions of Remarks]
[Pages E2370-E2371]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  ON LIFTING THE ENCRYPTION EXPORT BAN

                                 ______
                                 

                            HON. ADAM SMITH

                             of washington

                    in the house of representatives

                      Thursday, November 13, 1997

  Mr. ADAM SMITH of Washington. Mr. Speaker, I rise today to speak 
about an issue that is very important to me--lifting unfair export 
controls on encryption technology.

[[Page E2371]]

  Mr. Speaker, protecting our National Security interests is among my 
highest priorities. If I thought controlling encryption exports worked 
toward this end, I would be its strongest proponent. Unfortunately, 
export controls on encryption software simply disadvantage the United 
States software industry.
  Under current law the United States allows only 40 bit encryption 
codes to be exported, although software companies sell encryption codes 
of up to 128 bits everywhere in the United States. Forty bit encryption 
technology is so elementary, it took a graduate student a mere 3\1/2\ 
hours to break a code last January. Fifty-six bit encryption is 65,000 
times more difficult to decode than 10 bit encryption and it only took 
students three months to break the encryption code. One hundred twenty 
eight bit encryption has not been broken yet.
  Naturally, foreign companies do not want to buy 40 bit encryption 
software, because it is so vulnerable and insecure. The possibilities 
for ``computer hackers'' to break into the system and wreak havoc are 
enormous and dangerous. Therefore, foreign companies are purchasing 
high-level encryption from foreign software providers instead of 
American ones.
  The international demand for encryption software is growing 
exponentially because of the tremendous rise in electronic commerce. 
For instance, German Economics Minister, Guenter Rexrodt, said, ``Users 
can only protect themselves against having data manipulated, destroyed, 
or spied on by strong encryption procedures * * *. That is why we have 
to use all of our powers to promote such procedures instead of blocking 
them.''
  Our export restraint has not kept the technology from proliferating. 
It has merely allowed foreign producers of strong encryption technology 
to fill the vacuum. In fact, American companies are partnering with 
foreign firms to distribute their software--taking jobs and revenue 
with them.
  American-owned Sun Computers has recently joined with a Russian 
software company to avoid the U.S. export ban and sell to foreign 
markets. Foreign companies can also purchase American-produced 40 bit 
encryption technology and upgrade it in their own countries to 128 bit 
encryption technology. This ``add-on'' industry is among the fastest 
growing software industries in Europe today. Clearly, if someone wants 
high-level encryption technology, he or she can easily obtain it.
  The ability to obtain both powerful and affordable encryption will 
now become easier with recent developments in Canada. The Canadian 
Government includes encryption software in decontrolling mass market 
software under the Generic Software Note. This means any software sold 
over-the-counter, by mail or on the phone may be exported without 
limits. Entrust, a Canadian software company, is freely marketing and 
selling internationally a 128 bit encryption program right now. It 
sells for less than $50, and Entrust provides a version of the 
encryption technology free on the Internet. Even our most steadfast 
ally sees that export controls can no longer help stem the overwhelming 
demand and spread of unbreakable encryption.
  Mr. Speaker, if the United States continues to impose these 
restrictive export bans on its own companies, ``foreign competition 
could emerge at a level significant enough to damage the present U.S. 
world leadership'' in the software industry, according to the National 
Research Council's blue-ribbon panel on encryption policy. If our 
export ban continues, the United States will not be the worldwide 
leader on encryption technology for long, and that would be a true risk 
to our national security.
  I strongly oppose any unilateral sanctions or regulations that put 
the United States at an unnecessary disadvantage. Our current export 
ban on encryption software is a perfect example, and I intend to 
continue the fight to change our policy and allow the United States to 
compete in the global software market.

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