From: "William H. Geiger III" <whgiii@amaranth.com>
Date: Fri, 2 May 1997 04:48:09 +0800
To: sameer <sameer@c2.net>
Subject: Re: SAFE Bill is a Disaster--"Use a cipher, go to prison"
In-Reply-To: <199705011947.MAA17020@gabber.c2.net>
Message-ID: <199705012023.PAA10686@mailhub.amaranth.com>
MIME-Version: 1.0
Content-Type: text/plain


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In <199705011947.MAA17020@gabber.c2.net>, on 05/01/97 at 01:47 PM,
   sameer <sameer@c2.net> said:


>> 
>> It is my understanding that not only is the above true but the financing of
>> the development of crypto off-shore is also made illegal by the new
>> restrictions. So if C2Net were to hire an independent foreign co. to
>> develop their international version it would be in volation of the current
>> regs even if no code was exported.

>	That is an incorrect understanding of the law.

Below is the paragraph of the EAR that I am refering to:

PART 736--[AMENDED]

    19. Section 736.2 is amended by revising paragraph (b)(7) to read  as
follows:


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.
    (ii) You may not, without a license from BXA, provide certain 
technical assistance to foreign persons with respect to encryption  items,
as described in Sec. 744.9 of the EAR.
* * * * *


It clearly states that such activity is Illegal. I would recomend that your
lawers take a second read of the EAR.

I personaly don't care if you are in voilation of the EAR or not but you
should be aware of where you stand inreguards to this regulation so there
are no "suprises" latter on.

- -- 
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William H. Geiger III  http://www.amaranth.com/~whgiii
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