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U.S. claims success in curbing encryption trade

WASHINGTON (Reuters) - Clinton administration officials
Thursday said they had persuaded other leading countries to
impose strict new export controls on computer
data-scrambling products under the guise of arms control.

At a meeting Thursday in Vienna, the 33 nations that have
signed the Wassenaar Arrangement limiting arms exports --
including Japan, Germany and Britain -- agreed to impose
controls on the most powerful data-scrambling technologies,
including for the first time mass-market software, U.S.
special envoy for cryptography David Aaron told Reuters.

The United States, which restricts exports of a wide range of
data-scrambling products and software -- also known as
encryption -- has long sought without success to persuade
other countries to impose similar restrictions.

``We think this is very important in terms of bringing a level
playing field for our exporters,'' Aaron said.

Leading U.S. high-technology companies, including Microsoft
Corp. and Intel Corp., have complained that the lack of
restrictions in other countries hampered their ability to
compete abroad. The industry has sought to have U.S.
restrictions relaxed or repealed, but has not asked for tighter
controls in other countries.

Privacy advocates have also staunchly opposed U.S. export
controls on encryption, arguing that data-scrambling
technologies provided a crucial means of protecting privacy in
the digital age.

``It's ironic, but the U.S. government is leading the charge
internationally to restrict personal privacy and individual
liberty around the world,'' said Alan Davidson, staff counsel at
the Center for Democracy and Technology, a Washington-based
advocacy group.

Special envoy Aaron said the Wassenaar countries agreed to
continue export controls on powerful encryption products in
general but decided to end an exemption for widely available
software containing such capabilities.

``They plugged a loophole,'' Aaron said.

The new policy also reduced reporting and paperwork
requirements and specifically excluded from export controls
products that used encryption to protect intellectual property
-- such as movies or recordings sent over the Internet -- from
illegal copying, Aaron said.

Encryption uses mathematical formulas to scramble
information and render it unreadable without a password or
software ``key.'' One important measure of the strength of the
encryption is the length of the software key, measured in bits,
the ones and zeros that make up the smallest unit of computer

With the increasing speed and falling prices of computers,
data encrypted with a key 40 bits long that was considered
highly secure several years ago can now be cracked in a few
hours. Cutting-edge electronic commerce and communications
programs typically use 128-bit or longer keys.

Under Thursday's agreement, Wassenaar countries would
restrict exports of general encryption products using more
than 56-bit keys and mass-market products with keys more
than 64 bits long, Aaron said.

Each country must now draft its own rules to implement the