Re: Crypto reg clarification from Commerce Department

[John Young <jya@pipeline.com>]

Lucky Green  wrote:

>I just got of the phone with Bruce Kutz, Export Policy Analyst, Office of
>Strategic Trade and Foreign Policy Controls. (202) 482-0092. He seems to be
>the contact person for the new regs.

Well done, Lucky.

This is what's needed to kick off a lot of commentary during the next
45-days. Backed by research, to be sure. The outpouring of such
commentary on the full EAR from May 1995 to March 1996 shaped the
final document, and that process is an excellent case study for how
to affect the final form of the latest crypto regs.

It's worth perusing the full EAR in the Federal Register: March 25, 1996 
(Volume 61, Number 58), Pages 12713 et seq. for 325 pages (well 
over a 2.5MB -- it's also on our site, see URL below).

Here's the portion of the EAR that Lucky and Kutz discussed:

[Page 12805]

Sec. 744.6  Restrictions on certain activities of U.S. persons.

    (a) General prohibitions--(1) Activities related to exports. (i) No 
U.S. person as defined in paragraph (c) of this section may, without a 
license from BXA, export, reexport, or transfer to or in any country 
other country, any item where that person knows that such item:
    (A) Will be used in the design, development, production, or use of 
nuclear explosive devices in or by a country listed in Country Group 
D:2 (see Supplement No. 1 to part 740 of the EAR).
    (B) Will be used in the design, development, production, or use of 
missiles in or by a country listed in Country Group D:4 (see Supplement 
No. 1 to part 740 of the EAR); or
    (C) Will be used in the design, development, production, 
stockpiling, or use of chemical or biological weapons in or by a 
country listed in Country Group D:3 (see Supplement No. 1 to part 740 
of the EAR).
    (ii) No U.S. person shall, without a license from BXA, knowingly 
support an export, reexport, or transfer that does not have a license 
as required by this section. Support means any action, including 
financing, transportation, and freight forwarding, by which a person 
facilitates an export, reexport, or transfer without being the actual 
exporter or reexporter.
    (2) Other activities unrelated to exports. No U.S. person shall, 
without a license from BXA:
    (i) Perform any contract, service, or employment that the U.S. 
person knows will directly assist in the design, development, 
production, or use of missiles in or by a country listed in Country 
Group D:4 (see Supplement No. 1 to part 740 of the EAR); or
    (ii) Perform any contract, service, or employment that the U.S. 
person knows directly will directly assist in the design, development, 
production, stockpiling, or use of chemical or biological weapons in or 
by a country listed in Country Group D:3 (see Supplement No. 1 to part 
740 of the EAR).
    (3) Whole plant requirement. No U.S. person shall, without a 
license from BXA, participate in the design, construction, export, or 
reexport of a whole plant to make chemical weapons precursors 
identified in ECCN 1C350, in countries other than those listed in 
Country Group A:3 (Australia Group) (See Supplement No. 1 to part 740 
of the EAR).
    (b) Additional prohibitions on U.S. persons informed by BXA. BXA 
may inform U.S. persons, either individually or through amendment to 
the EAR, that a license is required because an activity could involve 
the types of participation and support described in paragraph (a) of 
this section anywhere in the world.
    Specific notice is to be given only by, or at the direction of, the 
Deputy Assistant Secretary for Export Administration. When such notice 
is provided orally, it will be followed by a written notice within two 
working days signed by the Deputy Assistant Secretary for Export 
Administration. However, the absence of any such notification does not 
excuse the exporter from compliance with the license requirements of 
paragraph (a) of this section.
    (c) Definition of U.S. person. For purposes of this section, the 
term U.S. person includes:
    (1) Any individual who is a citizen of the United States, a 
permanent resident alien of the United States, or a protected 
individual as defined by 8 U.S.C. 1324b(a)(3);
    (2) Any juridical person organized under the laws of the United 
States or any jurisdiction within the United States, including foreign 
branches; and
    (3) Any person in the United States.
    (d) Exceptions. No License Exceptions apply to the prohibitions 
described in paragraphs (a) and (b) of this section.
    (e) License review standards. Applications to engage in activities 
otherwise prohibited by this section will be denied if the activities 
would make a material contribution to the design, development, 
production, stockpiling, or use of chemical or biological weapons, or 
of missiles.

-----

The EAR covers all kinds of exports, so encryption and cryptography
provisions are found by searching. The Federal Register published it
in seven 50 page chunks, and is available at:

     http://www.access.gpo.gov/su_docs/aces/aces140.html

Enter the search term: "Page 12713" (with quotes; repeat six times in 
sequence).

We've combined the seven parts for searching:

     http://jya.com/ear032596.txt (2,570K)