U.S. Updates Encryption Export Policy

The policy is being updated to assure the continued competitiveness of U.S. encryption software producers in international markets, White House Chief of Staff John Podesta said in a briefing in which the updated policy was announced.

Under the new policy, U.S. companies can export any encryption product to any end user in the EU, as well as end users in Australia, Norway, the Czech Republic, Hungary, Poland, Japan, New Zealand and Switzerland.

Restrictions on U.S. sales of encryption software in those countries were partially lifted in January. (See "U.S. Frees Up Encryption Export Policy," January 12) Under that first phase of encryption export liberalization, long sought by many information technology vendors, U.S. companies were permitted to export any encryption software after a technical review to individuals, commercial firms or other non-government end users to any country except Cuba, Iran, Iraq, Libya, North Korea, Sudan and Syria.

The updated policy announced Monday removes the distinction that applied to government end users, allowing companies to sell their products to those customers as well. It also says companies no longer have to wait for the completion of a technical review or wait 30 days to ship their products. U.S. exporters will be allowed to sell to the EU and eight other countries listed immediately after submitting a commodity classification request to the U.S. Department of Commerce.

The U.S. moves follow the adoption of regulations by the EU that ease encryption exports to the same countries, Podesta said.

Robert Holleyman, president and chief executive officer of the Business Software Alliance, said the announcement is encouraging for U.S. encryption vendors. Removing the distinction between government and non-government end-users is vital to them because there are many government-owned commercial entities, Holleyman said in a written statement.

Europe is the second largest market for U.S.-made encryption products after the U.S., the statement also noted.

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