Administration Statement on Commercial Encryption Policy 
July 12, 1996

	The Clinton Administration is proposing a framework that will
encourage the use of strong encryption in commerce and private
communications while protecting the public safety and national
security.  It would be developed by industry and will be available for
both domestic and international use.

	The framework will permit U.S. industry to take advantage of
advances in technology pioneered in this country, and to compete
effectively in the rapidly changing international marketplace of
communications, computer networks, and software.  Retaining U.S.
industry's  leadership in the global information technology market is
of longstanding importance to the Clinton Administration.

	The framework will ensure that everyone who communicates or
stores information electronically can protect his or her privacy from
prying eyes and ears as well as against theft of, or tampering with,
their data.  The framework is voluntary; any American will remain free
to use any encryption system domestically.

	The framework is based on a global key management
infrastructure that supports digital signatures and confidentiality.
Trusted private sector parties will verify digital signatures and also
will hold spare keys to confidential data.  Those keys could be
obtained only by persons or entities that have lost the key to their
own encrypted data, or by law enforcement officials acting under proper
authority.  It represents a flexible approach to expanding the use of
strong encryption in the private sector.

	This framework will encourage commerce both here and abroad.
It is similar to the approach other countries are taking, and will
permit nations to establish an internationally inter-operable key
management infrastructure with rules for access appropriate to each
country's needs and consistent with law enforcement agreements.
Administration officials are currently working with other nations to
develop the framework for that infrastructure.

	In the expectation of industry action to develop this framework
internationally, and recognizing that this development will take time,
the Administration intends to take action in the near term to
facilitate the transition to the key management infrastructure.

	The measures the Administration is considering include:	
1.  Liberalizing export controls for certain commercial encryption
products.

2.  Developing, in cooperation with industry, performance standards for
key recovery systems and products that will be eligible for general
export licenses, and technical standards for products the government
will purchase.

3.  Launching several key recovery pilot projects in cooperation with
industry and involving international participation.

4.  Transferring export control jurisdiction over encryption products
for commercial use from the Department of State to the Department of
Commerce.

	Administration officials continue to discuss the details of
these actions with experts from the communications equipment, computer
hardware and software industries, civil liberties groups and other
members of the public, to ensure that the final proposal balances
industry actions towards the proposed framework, short-term
liberalization initiatives, and public safety concerns.

	The Administration does not support the bills pending in
Congress that would decontrol the export of commercial encryption
products because of their serious negative impact on national security
and law enforcement.  Immediate export decontrol by the U.S. could also
adversely affect the security interests of our trading partners and
lead them to control imports of U.S. commercial encryption products.

	A Cabinet Committee continues to address the details of this
proposal.  The Committee intends to send detailed recommendations to
the President by early September, including any recommendations for
legislation and Executive Orders.  The Committee comprises the
Secretaries of State, Defense, Commerce and Treasury; the Attorney
General; the Directors of Central Intelligence and the Federal Bureau
of Investigation; and senior representatives from the Office of the
Vice President, the Office of Management and Budget, and the National
Economic Council.