From: Lucky Green <shamrock@netcom.com>
Date: Mon, 30 Dec 1996 15:14:10 -0800 (PST)
To: cypherpunks@toad.com
Subject: Crypto reg clarification from Commerce Department
Message-ID: <3.0.32.19961230151451.006aafd0@netcom13.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain


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.

I pointed Mr. Kutz to the section that alarmed me:

Sec. 736.2  General prohibitions and determination of applicability.
      
     * * * * *
      
         (7) General Prohibition Seven--Support of Certain Activities by
     U.S. persons--(i) Support of Proliferation Activities (U.S. Person
     Proliferation Activity). If you are a U.S. Person as that term is
     defined in Sec. 744.6(c) of the EAR, you may not engage in any
     activities prohibited by Sec. 744.6 (a) or (b) of the EAR which
     prohibits the performance, without a license from BXA, of certain
     financing, contracting, service, support, transportation, freight
     forwarding, or employment that you know will assist in certain
     proliferation activities described further in part 744 of the EAR.
     There are no License Exceptions to this General Prohibition Seven in
     part 740 of the EAR unless specifically authorized in that part.

Mr. Kutz seemed surprised. Apparently he had not been aware that this
section was included in the new crypto regs. He then assured me that

1. Proliferation in the context of this paragraph applies only to
proliferation of
a) nuclear (bomb) technology
b) missile technology

He read to me EAR Sec. 744.6 (a) or (b), which are referred to in the
paragraph in question. Sec. 744.6 (a) or (b) seems to support this view.
However, he did not explain to me why the paragraph was included in the
crypto export regulations when it only applies to nukes and missiles.

2. The Department of Commerce has no intention of banning the financing and
contracting of non-US crypto development.

3. Technical assistance to non-US parties requires a license.

Mr. Kutz encouraged me to make use of the public comment period and ask
Commerce to clarify the section. Public comments will be accepted until
February 13, 1997. [Public comment is requested only after the new regs
took effect...]

I received the impression that Mr. Kutz genuinely believes that the section
in question does not apply to crypto. If I was concerned about potentially
violating the regulations, I would try to get a written statement from
Commerce that Mr. Kutz's view is indeed correct. As always, IANAL.



-- Lucky Green <mailto:shamrock@netcom.com> PGP encrypted mail preferred
   Make your mark in the history of mathematics. Use the spare cycles of
   your PC/PPC/UNIX box to help find a new prime.
   http://www.mersenne.org/prime.htm