Two proposals before Congress are likely to take the discussions of freedom versus police powers to a new level of intensity reports the American Banker. The bills are Senate bill, SR 1587, dubbed the Encrypted Communications Privacy Act, and the House bill, HR 3011, called the Security and Freedom Through Encryption (SAFE) Act. Both were introduced in March 5 and would clarify unresolved issues regarding the use and commercial sale of encryption technologies. The sponsors want less restrictive rules in the interests of competitiveness, practicality and privacy. With current law classifying encryption beyond a certain strength as ammunition, transporting it on floppy disk is akin to carrying a concealed weapon. But the proposals also preserve police powers and mandate harsh penalties for a new encryption crime. The bills’ major provisions are firstly to ensure unfettered domestic use of any encryption method while prohibiting any government-mandated encryption system, including Clipper. So US citizens could use any coding strength and method at home, and relieve chipmakers of the threat of being saddled with back-door entry requirements that might reduce their competitiveness. The proposals would legalize the use of any encryption method by Americans overseas and establish privacy standards for holders of keys in encryption systems in which a trusted third party holds the decoding formula. The bill would set procedures by which law enforcement agencies could obtai n access to a decryption key or compel other assistance from a key holder to gain lawful access to protected data. They would establish a new Federal crime for the use of encryption to obstruct justice or carry out Federal felony, subject to up to 10 years’ imprisonment and establish that any encryption, regardless of algorithm, key length or implementation, may be sold within the US and its territories. Sole control of non-military exports would be vested with the Secretary of Commerce, thus giving authority over hardware, software and information security technology to an agency renowned for its export promotion. At the moment, only banks are allowed to deal with the Commerce Department when seeking to export high code strengths, while other would-be exporters must petition the State Department. Export license requirements would be eliminated for broad categories of encryption hardware and software and the Secretary of Commerce would permit the export of encryption software to c ommercial users overseas under certain conditions designed to avoid its getting into terrorist hands. Finally, the export of encryption hardware would be authorized when products with comparable security are commercially available without restriction from foreign suppliers. Congress has just begun to grapple with the policy questions that need to be confronted as Smart Card technology combines with low-cost computers to unleash a torrent of Internet commerce and payments. Meanwhile, law enforcement authorities fret over the counterfeiting and money-laundering potential of digital cash, and the Internal Revenue Service studies the possibility of constructing tax tollbooths on the information superhighway.
