New Encryption Regulations Don't Go Far Enough

WASHINGTON, DC – The United States Chamber of Commerce today called the Clinton Administration's new export regulations on encryption software a step in the right direction, but warned roadblocks that remain in place may keep many companies from competing in this promising new market.

"These new regulations may still cause problems for American businesses that use or develop encryption technology," said Rick Lane, the Chamber's Director of Congressional and Public Affairs for e-commerce issues. "The Administration's proposed technical review process is overly complex and bureaucratic and could stonewall small businesses trying to enter the market.

"The Administration is beginning to hear the voice of reason and moved the regulations in the right direction, unlike its earlier efforts that fell short of developing an encryption policy that recognized new market realities," he said.

Congress should monitor how the Administration implements the regulations to ensure companies are permitted to export encryption products easily and fairly, according to the Chamber. Lawmakers ought to be prepared to pass the Security and Freedom through Encryption Act (H.R. 850), sponsored by Reps. Bob Goodlatte, R-VA, and Zoe Lofgren, D-CA, which would lower trade barriers and allow for the export of encryption products abroad after a 15-day review period by the Department of Commerce.

"If the Administration backslides on the implementation of the regulations, the U.S. Chamber will urge Congress to pass the SAFE Act," Lane said.

The U.S. Chamber of Commerce is the world's largest business federation, representing more than three million businesses and organizations of every size, sector and region.

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