From: Mike Godwin <mnemonic@eff.org>
Date: Fri, 4 Feb 94 15:09:57 PST
To: IFREEDOM@SNOOPY.UCIS.DAL.CA (Forum on Censorship and Intellectual Freedom)
Subject: wh_press_secy.statement (fwd)
Message-ID: <199402042301.SAA00849@eff.org>
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Forwarded message:
From postmaster Fri Feb  4 17:51:05 1994
Date: Fri, 4 Feb 1994 17:47:44 -0500
From: Dan Brown <brown>
Message-Id: <199402042247.RAA00203@eff.org>
To: eff-board, eff-staff
Subject: wh_press_secy.statement

THE WHITE HOUSE                                 CONTACT: 202 156-7035
OFFlCE OF THE PRESS SECRETARY

EMBARGOED UNTIL 3 PM (EST) FRIDAY, February 4, 1994


STATEMENT OF THE PRESS SECRETARY


Last April, the Administration announced a comprehensive 
interagency review of encryption technology, to be overseen by the 
National Security Council. Today, the Administration is taking a 
number of steps to implement the recommendations resulting from 
that review.

Advanced encryption technology offers individuals and businesses 
an inexpensive and easy way to encode data and telephone 
conversations. Unfortunately, the same encryption technology that 
can help Americans protect business secrets and personal privacy 
can also be used by terrorists, drug dealers, and other criminals.

In the past, Federal policies on encryption have reflected primarily 
the needs of law enforcement and national security. The Clinton 
Administration has sought to balance these needs with the needs of 
businesses and individuals for security and privacy. That is why, 
today the National Institute of Standards ant Technology (NIST) is 
committing to ensure a royalty-free, public-domain Digital Signature 
Standard. Over many years, NIST has been developing digital 
signature technology that would provide a way to verify the author 
and sender of an electronic message. Such technology will be critical 
for a wide range of business applications for the National 
Information Infrastructure. A digital signature standard will enable 
individuals to transact business electronically rather than having to 
exchange signed paper contracts. The Administration has determined 
that such technology should not be subject to private royalty 
payments, and it will be taking steps to ensure that royalties are not 
required for use of a digital signature. Had digital signatures been in 
widespread use, the recent security problems with the Intemet 
would have been avoided.

Last April, the Administration released the Key Escrow chip (also 
known as the "Clipper Chip") that would provide Americans with 
secure telecommunications without compromising the ability of law 
enforcement agencies to carry out legally authorized wiretaps. Today, 
the Department of Commerce and the Department of Justice are 
taking steps to enable the use of such technology both in the U.S. and 
overseas. At the same time, the Administration is announcing its 
intent to work with industry to develop other key escrow products 
that might better meet the needs of individuals and industry, 
particularly the American computer and telecommunications 
industry. Specific steps being announced today include:

-  Approval by the Commerce Secretary of the Escrowed Encryption     
   Standard (EES) as a voluntary Federal Informahon Processing    
   Standard, which will enable govemment gencies to purchase the  
   Key Escrow chip for use with telephones nd modems. The 
   department's National Institute of Standards and Technology   
   (NIST) will publish the standard.

-  Publication by the Department of Justice of procedurs for the     
   release of escrowed keys and the announcement of NIST and the 
   Automated Services Division of the Treasury Department as the 
   escrow agents that will store the keys needed for decryption of 
   communications using the Key Escrow chip. Nothing in these 
   procedures will diminish tne existing legal and procedural 
   requirements that protect Americans from unauthorized wiretaps.

-  New procedures to allow export of products containing the Key 
   Escrow chip to most countries.

In addition, the Department of State will streamline export licensing 
procedures for encryption products that can be exported under 
current export regulations in order to help American companies sell 
their products overseas. In the past, it could take weeks for a 
company to obtain an export license for encryption products, and 
each shipment might require a separate license. The new procedures 
announced today will substantially reduce administrative delays and 
paperwork for encryption exports.

To implement the Administration's encryption policy, an interagency 
Working Group on Encryption and Telecommunications has been 
established. It will be chaired by the White House Office of Science 
and Technology Policy and the National Security Council and will 
include representatives of the Departments of Commerce, Justice, 
State, and Treasury as well as the FBI, the National Security Agency, 
the Office of Management and Budget, and the National Economic 
Council. This group will work with industry and public-interest 
groups to develop new encryption technologies and to review and 
refine Administration policies regarding encryption, as needed.

The Administration is expanding its efforts to work with industry to 
improve on the Key Escrow chip, to develop key-escrow software, 
and to examine alternatives to the Key Escrow chip. NIST will lead 
these efforts and will request additional staff and resources for this 
purpose.

We understand that many in industry would like to see all 
encryption products exportable. However, if encryption technology is 
made freely available worldwide, it would no doubt be usod 
extensively by terrorists, drug dealers, and other criminals to harm 
Americans both in the U.S. and abroad. For this reason, the 
Administration will continue to restrict export of the most 
sophisticated encryption devices, both to preserve our own foreign 
intelligence gathering capability and because of the concerns of our 
allies who fear that strong encryption technology would inhibit their 
law enforcement capabilities.

At the same time, the Administration understands the benefits that 
encryption and related technologies can provide to users of 
computers and telecommunications networks. Indeed, many of the 
applications of the evolving National Information Infrastructure will 
require some form of encryption. That is why the Administration 
plans to work more closely with the private sector to develop new 
forms of encryption that can protect privacy and corporate secrets 
without undermining the ability of law-enforcement agencies to 
conduct legally authorized wiretaps. That is also why the 
Administration is committed to make available free of charge a 
Digital Signature Standard.

The Administration believes that the steps being announced today 
will help provide Americans with the telecommunications security 
they need without compromising the capability of law enforcement 
agencies and national intelligence agencies. Today, any American can 
purchase and use any type of encryption product. The 
Administration does not intend to change that policy. Nor do we have 
any intention of restrictiog domestic encryption or mandating the use 
of a particular technology.