I@Week on crypto export loophole 6/24/96 (was:Re: Can the inevitability of Software privacy be used to defeat the ITAR?)

[Will Rodger <rodger@interramp.com>]

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>At 04:06 AM 7/11/96 +0000, Paul Elliott wrote:
>>What is to prevent a U.S company to licence a foreign company
>>to sublicence and distribute a Crypto product abroad, if that
>>foreign company obtains that product on the pirate market?
>>
>>I am not a lawyer, but I look at the definition of "export"
>>on page 612 of Applied Cryptography and nothing seems to
>>obviously apply.

Elliott appears to be absolutely correct.

Jim Bell replied:

>I raised this type of idea on CP, twice, and didn't hear a peep about it!  

You were ahead of your time, Jim.
There was a cover story peep about the idea in Interactive Week June 24, in
fact. The story followed Bidzos' announcement that NTT would soon be
producing 3-DES chips en masse.
It's at: http://www.zdnet.com/intweek/print/960624/cover/doc1.html

Bidzos' pending deal brought forth several questions:

1 - Could others try something like the DES deal with stuff under copyright
and still make money doing it?
2 - If so, was the administration aware of it? and;
3 - Who, if anyone, would be the first to try it?

The answers were:
1 - Yes, someone else could try it.
2- The administration wouldn't comment, but had an official reply that
showed it grasped all the implications within 15 minutes of our asking.
3 - No one's stepping forward, but Ken Bass, atty. for Phil Karn and Phil
Zimmermann, among others, said he knew some folks were considering moves
along those lines, though he gave few details.

Steptoe & Johnson cyberspace atty. Stewart Baker suggested such a move would
be "extremely aggressive advice," though "not quite insane." if I remember
correctly.

A few caveats to any US citizen who finds himself  trying to help such a
situation occur:

1) The loophole can be closed by executive order with little or no notice, and
2) Any citizen aiding the export of such software will of course, be brought
up on some pretty serious felony charges if caught. Foreign nationals are
doubtless subject to the same laws if on US soil while the deed gets done.

Then again, Baker said, "if one gets away with it, dozens will try it, too."

I won't be the first to try.

Will Rodger
Washington Bureau Chief
Interactive Week.






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