The US government loosened its grip on exporters of encryptionon 56-bit DES software. technology last week by relaxing export restrictions on 56-bit DES encryption software.
The move is seen as a part of a gradual retreat from restrictions based on paranoia, said Ian Stevenson, a senior analyst at Ovum, who describes the US restrictions as a "joke that only serves to create a black market for encryption technology".
Although the restrictions have been relaxed, the new edict only applies to 42 countries and still keeps the US-sourced higher encryption levels wrapped up in red tape. If the US thinks that it can control the leaking of encryption systems to the embargoed countries, it needs to take a more realistic approach, said Stevenson. "Most people have found a way around these restrictions. They were based on grounds of national security, but this was a dubious argument and the government would have looked foolish if it didn't back down," he said.
The latest proposal is unlikely to silence the pro-liberalisation camp.
The IT community and civil liberty bodies favour unrestricted use of data scrambling technologies and Cisco Systems' legal affairs vice president Dan Scheinman said the latest move was not enough.
By contrast, national security officials believe that stringent controls will prevent criminals and terrorists from using the technology to shield their activities. With a few exceptions, the US government still controls the encryption technology licensing that uses codes or keys longer than 56 bits. While the US governmenttakes a piecemeal approach to liberalisation, non-US companies have been busy developing powerful encryption systems of their own. German company Siemens Nixdorf Informationssysteme (SNI) this week launched a 128-bit encryption technology designed for the corporate Email market. The demand for secure messaging and transactions over the Inter-net and intranets is rising steadily, Stevenson asserted. "There is growing demand from corporates that are security conscious, such as in the financial sector," he said.
Although the FBI and other US security organisations have been prime movers to control the spread of encryption software, IT companies, such as Netscape, and US public interest groups have fought strongly to overturn the current restrictive practice. The demand for secure messaging and transactions over intranets and on the Internet is rising steadily and US companies fear that they may lose out in the world market as non-US developers of high-level encryption systems step up to fulfil the need.
It is estimated that more than 500 products now have stronger encryption than those that could legally have been exported from the US prior to the agreement.
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