Encryption Items Transferred From the U.S. Munitions List to the Commerce Control List

This interim rule amends the Export Administration Regulations (EAR) by exercising jurisdiction over, and imposing new combined national security and foreign policy controls on, certain encryption items that were on the United States Munitions List, consistent with Executive Order 13026 and pursuant to the Presidential Memorandum of that date, both issued by President Clinton on November 15, 1996. On October 1, 1996, the Administration announced a plan to make it easier for Americans to use stronger encryption products to protect their privacy, intellectual property and other valuable information. The plan envisions a worldwide key management infrastructure with the use of key escrow and key recovery encryption items to promote electronic commerce and secure communications while protecting national security and public safety. To provide for a transition period for the development of this key management infrastructure, this rule permits the export and reexport of 56-bit key length DES or equivalent strength encryption items under the authority of a License Exception, if an exporter makes satisfactory commitments to build and/or market recoverable encryption items and to help build the supporting international infrastructure. This policy will apply to hardware and software.