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THE WHITE HOUSE

Office of the Press Secretary

For Immediate Release September 16, 1998

FACT SHEET

Administration Updates Encryption Policy

Exports of 56-bit DES and equivalent products (hardware and software) will be streamlined (under license exception). Requirements for key recovery plans are eliminated.

Exports of unlimited strength encryption products (with or without key recovery) will be streamlined (under license exception) to certain industries. The sectors are:

Subsidiaries of U.S. Firms, worldwide (except seven terrorist nations).

Insurance companies to the same 45 countries recently approved for exports to banks and financial institution exports.

Health and medical organizations (including civilian government health agencies) in the same 45 countries. Does not include biochemical/pharmaceutical manufacturers.

On-line merchants for client-server applications, in the same 45 countries, with the purpose of securing electronic transactions between merchants and their customers. Does not include manufacturers and distributors of items controlled on the U.S. munitions list.

Key Recovery products will continue to be exportable under license exception worldwide (except seven terrorist nations). Review of foreign key recovery agents is eliminated.

Exports of "recoverable" products will be approved to most commercial firms, and their wholly-owned subsidiaries, in a broad range of countries under encryption licensing arrangements. This group of countries covers most major commercial markets including Western Europe, Japan, and Australia. The policy does not include service providers and manufacturers and distributors of items controlled on the U.S. munitions list.

Exports to end users or destinations outside this policy are possible on a case-by-case basis.

Prior to export, products are subject to a one-time product technical review.

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