From: Lucky Green <shamrock@netcom.com>
Date: Fri, 2 May 1997 06:22:16 +0800
To: "William H. Geiger III" <whgiii@amaranth.com>
Subject: Re: SAFE Bill is a Disaster--"Use a cipher, go to prison"
In-Reply-To: <199705012023.PAA10686@mailhub.amaranth.com>
Message-ID: <Pine.3.89.9705011512.A22651-0100000@netcom19>
MIME-Version: 1.0
Content-Type: text/plain



The crucial part here is "you may not engage in any  activities
prohibited by Sec. 744.6 (a) or (b) of the EAR"

I you read 744.6 EAR you will find the the provisions cited below only
apply to nukes and missiles, not crypto. Why the quote you are citing even
made it into 736 EAR is beyond me. I asked Commerce and they couldn't give
me an answer either. 

I would assume it was either for FUD or perhaps more likely wishful 
thinking leading to a screw up. Regardless, the financing, etc. 
provisions *do not apply to crypto*.


-- Lucky Green <mailto:shamrock@netcom.com> PGP encrypted mail preferred

On Thu, 1 May 1997, William H. Geiger III wrote:

> -----BEGIN PGP SIGNED MESSAGE-----
> 
> 
> 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.
> 
> - -- 
> - -----------------------------------------------------------
> William H. Geiger III  http://www.amaranth.com/~whgiii
> Geiger Consulting    Cooking With Warp 4.0
> 
> Author of E-Secure - PGP Front End for MR/2 Ice
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>                           
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>  
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> 
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