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In January of 1993 the National Institute of Standards and Technology (NIST) initiated the preparation of this and other publications on various aspects of the civilian cryptography issue. The purpose of this project was to prepare concise summaries of information, based upon research in open source literature, on a particular topic of interest relevant to the public discussion of cryptographicrelated issues. This study was prepared under contract from the National Institute of Standards and Technology (NIST). No claim is made by NIST as to the accuracy or completeness of the information contained herein. The document does not constitute the official position of the U.S. Government on the subject matter covered in this publication. Comments, additions, or corrections on this study are welcomed, as it is our intent to update it periodically. Submissions should be directed to: -Mr. Lynn McNulty -Associate Director for Computer Security -Computer Systems Laboratory -National Institute of Standards and Technology -Gaithersburg, MD 20899 -Fax: 3019481784 -Email: mcnulty@ecf.ncsl.nist.gov  T Thank you. 'BIDENTIFICATION AND ANALYSIS OF FOREIGN )LAWS AND REGULATIONS PERTAINING TO *THE USE OF COMMERCIAL ENCRYPTION -bPRODUCTS FOR VOICE AND DATA  Sp# 3 COMMUNICATIONS :( -DProfessor James P. Chandler 1Diana C. Arrington 0Donna R. Berkelhammer 3:William L. Gill :(X)0*0*0*Ԍ 4January 1994 5Prepared by "National Intellectual Property Law Institute and *JThe George Washington University R1350 Eye Street NW, Suite 820 V Washington, DC 20005 SSubcontract No. 19KRF105C i [DOE Project No. 2042E024A1 i i i i i cPrepared for SData Systems Research and Development Program _lTechnical Operations `tOak Ridge K25 Site ZbOak Ridge, Tennessee 378317620 dManaged by WMARTIN MARIETTA ENERGY SYSTEMS, INC. ffor the ]U.S. DEPARTMENT OF ENERGY Yunder contract DEAC0584OR21400(0*0*0* :G    І J ddx !b ddx J     pG #WTo> P}_P# ` This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise, does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or  pG| any agency thereof. | ` #h [ P!':#{&P#  S 0*0*0*  T   #S\  PCP#X01Í ÍX01Í Í#f\  PC#{&P#`!l K/DSRD/SUB/93RF105/3 ă `!mLimited Distribution   T / IDENTIFICATION AND ANALYSIS OF FOREIGN LAWS AND REGULATIONS ^1PERTAINING TO THE USE OF COMMERCIAL ENCRYPTION PRODUCTS  S = <FORVOICE AND DATA COMMUNICATIONS ă ?Professor James P. Chandler CDiana C. Arrington 9BDonna R. Berkelhammer EWilliam L. Gill FJanuary 1994 $GPrepared by 4National Intellectual Property Law Institute and <The George Washington University 7>1350 Eye Street NW, Suite 820 lBWashington, DC 20005 p?Subcontract No. 19KRF105C >DOE Project No. 2042E024A1 L FPrepared for 6j Data Systems Research and Development Program BTechnical Operations COak Ridge K25 Site =Oak Ridge, Tennessee 378317620 *GManaged by I:Martin Marietta Energy Systems, Inc. Ifor the @U.S. Department of Energy v=under contract DEAC0584OR21400'0*0*0* #f\  PC#{&P#    ^ H CONTENTS ă X` hp x (#%'0*,.8135@8: Gr mJ/ ԍ15 C.F.R. pts. 768!799.>  S  2.5 PEOPLES REPUBLIC OF CHINA   SH  2.5.1 Import Controls China practices a licensing scheme for imported commodities. An application is to be filed and a license obtained in advance by corporations approved by the state to engage in the business of importing commodities. A license is valid for 1 year, and a corporation may apply for an extension. Based on China's List of Prohibited and Restricted Imports and Exports enacted in 1987, China  S restricts the importation of voice-encoding devices. nr mJ ԍNotice of the General Administration of Customs of the People's Republic of China,  50-305 (November 1, 1987).  S  2.5.2 Export Controls A corporation engaging in the exportation business must first file an application for approval with  S@ the Ministry of Foreign Trade or the foreign trade bureau of the province. n@lr mJ ԍInterim Procedures of the State Import-Export Commission and Ministry of Foreign Trade of the People's Republic of China Concerning the System of Export Licensing (June 3, 1980). The Ministry establishes an export control list of prohibited and restricted goods. Based on China's List of Prohibited and Restricted Imports and Exports, China restricts the  S exportation of voice-encoding devices. nr mJR ԍNotice of the General Administration of Customs of the People's Republic of China,  50-305 (November 1, 1987).  S(  2.6 EUROPEAN COMMUNITY   S In 1957, the Treaty of RomeV Hr mJ# ԍ298 U.N.T.S. 11 (1957), art. 238 (March 25, 1957).V established the European Economic Community (EC). The EC members are the territories of Belgium, Denmark, the Federal Republic of Germany, France, Ireland, Italy, Luxembourg, the Netherlands, Great Britain, Greece, Spain, and Portugal. In 1986,  S` the Single European ActH`r mJ7' ԍLaw No. 86-1275 (December 16, 1986).H modified the treaties, creating the European Communities so as to` 0*((PP establish an internal market without boundaries in which free dissemination of merchandise, persons, services, and capital are assured. The free internal market would be continually implemented by the member-states during the course of a 5-year period concluding on December31, 1992.  S8  2.6.1 Import Controls Most articles imported from EC member-states are not subject to restrictions. The rules applicable to the free movement of goods are derived from Articles 9 et seq. of the Treaty of Rome. However, Article 36 allows prohibitions of restrictions on imports justified for various reasons, such as public morality, public policy, or public security. The EC courts have consistently held that Article 36 is applicable to measures of a noneconomic nature, such as the maintenance of a  S national health care system or the security of member-state oil supplies. p oJ ԍHansen, Paul, Freedom of Data Flows and EC Law, Sixth Report of the Commission, p. 7 (1988). No import/export controls on encryption technology were found.  S  2.6.2 Export Controls Most products exported to EC member-states are not subject to restrictions; however, certain sensitive products and technologies deemed necessary for national policy are subject to the laws  S and regulations instituted by member-states.nIp mJ ԍDoing Business in France,  16.029(5) (1988); Sixth Report of the Commission, EC and the Single Market, pp.14!15 (1991). The sensitive nature of certain products derives from the dual use"civil and military"which can be made of them. IntraEC member trade is to be regulated by controls pursuant to the COCOM rules; however, a satisfactory basis for cooperation between member-states and the Commission has not been established. The objective will be to develop uniform export and import control lists of products and their respective  S destinations.kp mJ ԍSixth Report of the Commission, EC and the Single Market, p. 15 (1991).k The developing momentum of the intergovernmental conference on political union in regard to exports of weapons and nonproliferation should facilitate an agreement on the  S treatment of dualuse products.-np oJ ԍId.- No import/export controls on encryption technology were found. Currently, the Commission of the European Communities is developing a European telecommunications policy to establish a common telecommunications market (networks and  S telecommunications equipment).g'p oJ! ԍHansen, Paul, Freedom of Data Flows and EC Law, p. 85 (1988).g The emerging telecommunication policy is governed by the Treaty of Rome and by the fundamental human rights as developed by the European Court of  S Justice.7p oJ@$ ԍId. at p. 90.7 This telecommunications policy might affect the future controls on cryptographic technology in voice and data networks.  0*((PPԌ S  2.7 FRANCE  S  2.7.1 Import Controls  S` Imports into France are governed by French law and the EC regulations.S`p mJ ԍDoing Business in France,  16.02(1) (1988).S Two considerations must be considered in connection to entry of goods into France: whether goods to be imported into France are subject to any import restrictions and what declarations or filings are to be made for permissible importation. Goods can fall into four categories: articles not subject to restrictions, articles subject to prior notification, articles subject to an import license, or articles subject to  S special import restrictions.EGp oJ ԍId. at  16.02(3)(a)(i).E Almost all goods that originate in the EC as well as certain goods specified by law may be imported into France without being subject to import restrictions. An import license is valid for only 6 months and only with reference to a specific type of merchandise coming from a specific  S origin.H p oJ ԍId. at  16.02(3)(a)(i)(C).H  S France requires a license for the import of encryption into the country. p oJ ԍBob Rarog, Encryption Export Controls & the Computer Industry, Digital Equipment Corporation (May 1, 1993). France requires Data Encryption Standard!based encryption manufacturers and users to deposit a key with the French government, and they may also require an import license if it is determined necessary on a casebycase review. France would probably forbid the use of key escrow technology unless they are  S given the keys and a full description of the algorithm.nrp mJ* ԍStatement of the Computer and Business Equipment Manufacturers Association, Before the Computer System Security and Advisory Board, National Institute of Standards and Technology (May 27, 1993).  S  2.7.2 Export Controls Most products exported to EC member-states are not subject to restrictions; however, certain products are subject to prior notification, an export license, or a prior authorization before they may be exported. Such notifications, licenses, or authorizations are obtained pursuant to similar  S procedures governing importations.Sp mJ ԍDoing Business in France,  16.02(5) (1988).S In order to preserve the interests of French national security or defense, exports or use of cryptography must (1) be declared prior to the operation when this operation only results in certification, or in the securization of the transmitted message; and (2) be authorized prior to the  S operation by the Prime Minister in any other cases.|p mJo" ԍRegulation of Telecommunications, LOI n.901170, art. 28(I)(a), (b) (December 29, 1990).| The penalty for not complying is a fine  S of 6,000 to 500,000 FF and/or a prison sentence from 3 to 8 months.=Np oJ# ԍId. at art. 28(II).= A declaration of delivery or use of means of cryptography is issued at the central bureau for security of information systems. The request form for a declaration has two parts, a technical part and an administrative part. The technical part is an extensive description in French of the8 0*((PP operation or means of cryptography and of its exploitation mode, including the management of  S secret arrangements.8p oJ@ ԍId. at art. 6.8 The administrative part allows for the identification of the person requesting the operation, location of the operation, and the categories of persons or societies  S allowed to use the operation.-Ip oJ ԍId.- The request indicates the duration for which the authorization is  S` requested, which cannot exceed 10 years.-`p oJ: ԍId.- The export of cryptography requires the deposit of a copy of the receipt of the declaration to the customs office. As in the United States, France has decontrolled software that is in the public domain, and it retains control of mass-market and other encryption software as military items.  SH  2.8 GERMANY  S  2.8.1 German Foreign Trade Act The German Foreign Trade Act of 1961 regulates German trade and recognizes the need to reduce to a minimum restrictions and formalities in the import and export of goods. Germany is  SX considered one of the world's most liberal trading nations. Xp oJ ԍDroste, Killius, and Triebel, Business Law Guide to Germany, 3rd edition, CCH Editions Limited, p. 1 (1991). However, Germany does provide for prohibitions and restrictions for the protection of Germany's market organization, specific  S industries, public health, and public order.-!tp oJT ԍId.- Germany draws a distinction between trade regulations on the one hand and noncommercial regulations on the other. Noncommercial regulation serves a purpose that is not directly related to international trade, but rather to serving  S public health, safety, industry, and public order.6"-p oJ ԍId. at p. 2.6 Since Germany is a member of the EC, the  Sh country's foreign trade policy has become increasingly influenced by EC legislation.6#hp oJ& ԍId. at p. 4.6  S  2.8.2 Import Controls Germany has an import control list over 300 pages in length which in combination with a list of countries indicates whether a license is required. A license can be applied for at the Federal Office  Sx for Commercial Business.6$xp oJ ԍId. at p. 6.6  S( Germany does not have any restrictions on encryption products.%(Xp oJX" ԍBob Rarog, Encryption Export Controls & the Computer Industry, Digital Equipment Corporation (May 1, 1993).  S ` 2.8.3 Export Controls The Foreign Trade Ordinance contains an export control list of all goods subject to foreign trade `restrictions. The export list does not impose prohibitions, but it indicates authorization` %0*((PP requirements. All goods requiring authorization are classified by a four-digit code number. COCOM restrictions are incorporated into the export list. Germany has specifically exempted encryption software from the General Software Note of the  S` COCOM Industrial List.-&`p oJ ԍId.- Therefore, Germany maintains control of both public domain and massmarket encryption software.  S  2.9 INDIA No import/export controls were found.  S  2.10 ISRAEL  Israel imposes import restrictions on encryption; however, the scope of their restrictions is not  S clear.'n Ip mJ ԍStatement of the Computer and Business Equipment Manufacturers Association, Before the Computer System Security and Advisory Board, National Institute of Standards and Technology (May 27, 1993).  S  2.11 ITALY   S There are no import restrictions on encryption technology.9(p mJG ԍPer Italian Embassy. 9 Italy follows COCOM regulations for the export of encryption technology, allowing publicdomain and massmarket software to be exported with no license and other encryptioncapable items to be exported with a validated license.  S  2.12 JAPAN  Sx 2.12.1 Import/Export Controls The Foreign Exchange and Foreign Trade Control Law governs the import and export of goods  S in Japan. The Law is designed to permit the export of goods with minimal restrictions.L)np oJF ԍJapanese Law, 425, art. 47 (1992).L The Law provides for some restrictions in order to prevent unfair exportation and ensure orderly  S importation.I*'p oJ" ԍId. at 415; Law No. 299 (1952).I Unfair exportation includes the export of goods that may infringe on an industrial property right or copyright protected in the country of destination, export of goods with false representation of country of origin, and goods that greatly differ from the specifications given in  S8 the contract.=+8p oJ% ԍId. at 416; art. 2.= +0*((PPԌThe Law requires export licenses for certain kinds of goods and services for certain  S destinations.5,p oJ@ ԍId. at 416.5 A person who intends to export goods and/or technology to a destination designated in a cabinet order as an area where international peace and security are obstructed is  S required to obtain a license from the Minister of International Trade and Industry.G-Ip oJ ԍId. at 416; art. 48; art. 25.G Primarily, restrictions involve COCOMcontrolled goods and technologies. Japan joined COCOM in 1950  S8 and enforces COCOM controls through a national list of strategic goods and technology.5.8p oJ ԍId. at 416.5 The list is published together with other controlled items in a cabinet order and is administered by the  S Ministry of International Trade and Industry.5/p oJ{ ԍId. at 416.5  S  2.12.2 Encryption Technology Controls  SH Japan follows COCOM guidelines for the export of encryption technology.0H tp oJ ԍBob Ratog, Encryption Export Controls & the Computer Industry, Digital Equipment Corporation (May 1, 1993). Generally, publicdomain and massmarket software may be exported without a validated license. Other encryption technologies are reviewed on a casebycase basis. No import controls were found. No domestic controls on encryption use were found.  SX  2.13 SPAIN 2.13.1 Import/Export Controls  S  The export of goods is regulated by Royal Decree No. 2426 of September 14, 1979. Royal Decree No. 2426 regulates the processing of export transactions, payment of the purchase price, control,  Sh and the evaluation of trade balances.R1h-p mJm ԍDoing Business in Spain,  16.02(3) (1987).R All goods may be exported, provided the conditions and requirements set forth by the Decree have been met. There are no limitations other than those established by the government for reasons of morality, health, public order, or other internationally  S recognized reasons.B2p oJ ԍId. at  16.02(3)(a).B The export of goods is carried out by allowing the granting of a license by the Minister of Economy and Finance.  Sx  2.13.2 Encryption Technology Controls No import/export controls or domestic controls were found.  S 8 2.14 THE NETHERLANDS 2.14.1 Import/Export Laws  S  8The Import and Export Act of 1963 controls the import and export of goods. Imports and exports are free from any restrictions or registration formalities other than those expressly imposed. The 20*((PP  S Act states that restrictions and formalities may be imposed by regulations or decrees issued by the  S Minister of Economic Affairs or Minister of Agriculture.S3p oJ@ ԍDutch Business Law,  28.02(1) (1990).S A number of decrees and regulations have been issued. The Economic Information Service, a service of the Ministry of Economic Affairs, maintains a list of current regulations and decrees, as well as a list of those goods for  S` which import or export licenses are required.N4`Ip oJ ԍId. at  28.02(1);  28.04(1).N  S  2.14.2 Encryption Technology Controls Annex B of the Import and Export of Industrial Goods Decree of 1963 sets forth a list of  S industrial products for which an export license is required.B5p oJr ԍId. at  28.04(2)(a).B The Export of Strategic Goods  Sp Decree of 1963 prohibits the export of an extensive number of products of a strategic nature..6pp oJ ԍId. . Public domain and massmarket software generally does not require a validated license. Items capable of file encryption do require a validated license. No import restrictions were found.  S  2.15 UNITED KINGDOM  SX  2.15.1 Import/Export Laws The Import, Export and Customs Powers (Defence) Act of 1939 governs the import and export of goods in the United Kingdom. The Department of Trade and Industry regulates the import and export of goods. Generally, the United Kingdom follows COCOM guidelines for the export of COCOMcontrolled goods.  S@  2.15.2 Encryption Technology Controls The United Kingdom controls encryption items as dualuse items. No license is required for the export of massmarket and publicdomain software. Other encryption items may be granted export licenses on a casebycase basis. No import controls were found for encryption technology.  S(  2.16 SOUTH AFRICA  S  2.16.1 Import/Export Laws The Import and Export Control Act, No. 45 of 1963, governs imports and exports in South Africa. The minister of Trade and Industry and Tourism has regulatory control over exports and imports. South Africa reserves the right to control or prohibit the export of certain goods from its country. Generally, prohibited exports consist of arms and ammunition.  t60*((PPԌ S  2.16.2 Encryption Technology Controls  S No controls exist on the export of encryption technology.>7p mJ ԍPer South African Embassy.> South Africa generally shapes its export practices to the import laws of the importing country. No import restrictions were found.  S  2.17 RUSSIA No import or export restrictions were found.  SH  2.18 SAUDI ARABIA No import or export restrictions were found.  S  2.19 MEXICO The Mexican Institute of Foreign Trade governs imports and exports in Mexico. No export or import controls were found on encryption technology.  S  2.20 SWEDEN  S@ No import or export restrictions on encryption technology were found.8@Gp oJ_ ԍBob Rarog, Encryption Export Controls & the Computer Industry, Digital Equipment Corporation (May 1, 1993).  S  2.21 SWITZERLAND  Sx No import or export restrictions on encryption technology were found.-9xp oJP ԍId.- P90*((PP = 8 `!pK/DSRD/SUB/93RF105/3 `!qLimited Distribution  ^ AD # Z\  P6Q{֞P#INTERNAL DISTRIBUTION #&J\  P6Q [6&P#у ,D ( @ B1. J. P. Chandler B2. L. J. Hoffman B3. K. D. Streetman B4!8. National Institute of Standards and Technology B9. DSRD Resource Center, 1099 COM, MS 7615, Room 507 BD10. K25 Site Records, K1001, MS 7101"RC