I

104TH CONGRESS

2D SESSION H. R. 3011

To amend title 18, United States Code, to affirm the rights of United

States persons to use and sell encryption and to relax export controls

on encryption.

IN THE HOUSE OF REPRESENTATIVES

MARCH 5, 1996

Mrs. GOODLATTE (for himself, Mr. DELAY, Mr. BOEHNER, Mr. MOORHEAD,

Mrs. SCHROEDER, Mr. GEJDENSON, Mr. MANZULLO, Mr. COBLE, Mr.

BARR of Georgia, Mr. BONO, Ms. LOFGREN, Mr. CAMPBELL, Ms. ESHOO,

Mr. DOOLITTLE, Mr. FARR of California, Mr. MCKEON, Mr. ENGEL,

Mrs. WALDHOLTZ, Mr. EWING, Mr. MICA, Mr. CHAMBLISS, Mr. EVERETT, Mr. EHLERS, Mr. ORTON, Mr. MATSUI, Mr. BOUCHER, Mr.

CHABOT, Mr. MOAKLEY, and Mr. BARTLETT of Maryland) introduced the

following bill; which was referred to the Committee on the Judiciary, and

in addition to the Committee on International Relations, for a period to

be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee

concerned

A BILL

To amend title 18, United States Code, to affirm the rights

of United States persons to use and sell encryption and

to relax export controls on encryption.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Security and Freedom

3 Through Encryption (SAFE) Act’’.

4 SEC. 2. SALE AND USE OF ENCRYPTION.

5 (a) IN GENERAL.—Part I of title 18, United States

6 Code, is amended by inserting after chapter 121 the fol7 lowing new chapter:

8 ‘‘CHAPTER 122—ENCRYPTED WIRE AND

9 ELECTRONIC INFORMATION

‘‘2801. Definitions.

‘‘2802. Freedom to use encryption.

‘‘2803. Freedom to sell encryption.

‘‘2804. Prohibition on mandatory key escrow.

‘‘2805. Unlawful use of encryption in furtherance of a criminal act.

10 ‘‘§ 2801. Definitions

11 ‘‘As used in this chapter—

12 ‘‘(1) the terms ‘person’, ‘State’, ‘wire commu13 nication’, ‘electronic communication’, ‘investigative

14 or law enforcement officer’, ‘judge of competent ju15 risdiction’, and ‘electronic storage’ have the mean16 ings given those terms in section 2510 of this title;

17 ‘‘(2) the terms ‘encrypt’ and ‘encryption’ refer

18 to the scrambling of wire or electronic information

19 using mathematical formulas or algorithms in order

20 to preserve the confidentiality, integrity, or authen21 ticity of, and prevent unauthorized recipients from

22 accessing or altering, such information;
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1 ‘‘(3) the term ‘key’ means the variable informa2 tion used in a mathematical formula, code, or algo3 rithm, or any component thereof, used to decrypt

4 wire or electronic information that has been

5 encrypted; and

6 ‘‘(4) the term ‘United States person’ means—

7 ‘‘(A) any United States citizen;

8 ‘‘(B) any other person organized under the

9 laws of any State, the District of Columbia, or

10 any commonwealth, territory, or possession of

11 the United States; and

12 ‘‘(C) any person organized under the laws

13 of any foreign country who is owned or con14 trolled by individuals or persons described in

15 subparagraphs (A) and (B).

16 ‘‘§ 2802. Freedom to use encryption

17 ‘‘Subject to section 2805, it shall be lawful for any

18 person within any State, and for any United States person

19 in a foreign country, to use any encryption, regardless of

20 the encryption algorithm selected, encryption key length

21 chosen, or implementation technique or medium used.

22 ‘‘§ 2803. Freedom to sell encryption

23 ‘‘Subject to section 2805, it shall be lawful for any

24 person within any State to sell in interstate commerce any

25 encryption, regardless of the encryption algorithm se-
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1 lected, encryption key length chosen, or implementation

2 technique or medium used.

3 ‘‘§ 2804. Prohibition on mandatory key escrow

4 ‘‘(a) PROHIBITION.—No person in lawful possession

5 of a key to encrypted information may be required by Fed6 eral or State law to relinquish to another person control

7 of that key.

8 ‘‘(b) EXCEPTION FOR ACCESS FOR LAW ENFORCE9 MENT PURPOSES.—Subsection (a) shall not affect the au10 thority of any investigative or law enforcement officer, act11 ing under any law in effect on the effective date of this

12 chapter, to gain access to encrypted information.

13 ‘‘§ 2805. Unlawful use of encryption in furtherance of

14 a criminal act

15 ‘‘Any person who willfully uses encryption in further16 ance of the commission of a criminal offense for which

17 the person may be prosecuted in a court of competent ju18 risdiction—

19 ‘‘(1) in the case of a first offense under this

20 section, shall be imprisoned for not more than 5

21 years, or fined in the amount set forth in this title,

22 or both; and

23 ‘‘(2) in the case of a second or subsequent of24 fense under this section, shall be imprisoned for not
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1 more than 10 years, or fined in the amount set forth

2 in this title, or both.’’.

3 (b) CONFORMING AMENDMENT.—The table of chap4 ters for part I of title 18, United States Code, is amended

5 by inserting after the item relating to chapter 33 the fol6 lowing new item:

‘‘122. Encrypted wire and electronic information ................ 2801’’.

7 SEC. 3. EXPORTS OF ENCRYPTION.

8 (a) AMENDMENT TO EXPORT ADMINISTRATION ACT

9 OF 1979.—Section 17 of the Export Administration Act

10 of 1979 (50 U.S.C. App. 2416) is amended by adding at

11 the end thereof the following new subsection:

12 ‘‘(g) COMPUTERS AND RELATED EQUIPMENT.—

13 ‘‘(1) GENERAL RULE.—Subject to paragraphs

14 (2), (3), and (4), the Secretary shall have exclusive

15 authority to control exports of all computer hard16 ware, software, and technology for information secu17 rity (including encryption), except that which is spe18 cifically designed or modified for military use, in19 cluding command, control, and intelligence applica20 tions.

21 ‘‘(2) ITEMS NOT REQUIRING LICENSES.—No

22 validated license may be required, except pursuant

23 to the Trading With The Enemy Act or the Inter24 national Emergency Economic Powers Act (but only

25 to the estent that the authority of such Act is not
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1 exercised to extend controls imposed under this Act),

2 for the export or reexport of—

3 ‘‘(A) any software, including software with

4 encryption capabilities—

5 ‘‘(i) that is generally available, as is,

6 and is designed for installation by the pur7 chaser; or

8 ‘‘(ii) that is in the public domain for

9 which copyright or other protection is not

10 available under title 17, United States

11 Code, or that is available to the public be12 cause it is generally accessible to the inter13 ested public in any form; or

14 ‘‘(B) any computing device solely because

15 it incorporates or employs in any form software

16 (including software with encryption capabilities)

17 exempted from any requirement for a validated

18 license under subparagraph (A).

19 ‘‘(3) SOFTWARE WITH ENCRYPTION CAPABILI20 TIES.—The Secretary shall authorize the export or

21 reexport of software with encryption capabilities for

22 nonmilitary end-uses in any country to which ex23 ports of software of similar capability are permitted

24 for use by financial institutions not controlled in fact
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1 by United States persons, unless there is substantial

2 evidence that such software will be—

3 ‘‘(A) diverted to a military end-use or an

4 end-use supporting international terrorism;

5 ‘‘(B) modified for military or terrorist end6 use; or

7 ‘‘(C) reexported without any authorization

8 by the United States that may be required

9 under this Act.

10 ‘‘(4) HARDWARE WITH ENCRYPTION CAPABILI11 TIES.—The Secretary shall authorize the export or

12 reexport of computer hardware with encryption ca13 pabilities if the Secretary determines that a product

14 offering comparable security is commercially avail15 able outside the United States from a foreign sup16 plier, without effective restrictions.

17 ‘‘(5) DEFINITIONS.—As used in this sub18 section—

19 ‘‘(A) the term ‘encryption’ means the

20 scrambling of wire or electronic information

21 using mathematical formulas or algorithms in

22 order to preserve the confidentiality, integrity,

23 or authenticity of, and prevent unauthorized re24 cipients from accessing or altering, such infor25 mation;
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1 ‘‘(B) the term ‘generally available’ means,

2 in the case of software (including software with

3 encryption capabilities), software that is offered

4 for sale, license, or transfer to any person with5 out restriction, whether or not for consider6 ation, including, but not limited to, over-the7 counter retail sales, mail order transactions,

8 phone order transactions, electronic distribu9 tion, or sale on approval;

10 ‘‘(C) the term ‘as is’ means, in the case of

11 software (including software with encryption ca12 pabilities), a software program that is not de13 signed, developed, or tailored by the software

14 publisher for specific purchasers, except that

15 such purchasers may supply certain installation

16 parameters needed by the software program to

17 function properly with the purchaser’s system

18 and may customize the software program by

19 choosing among options contained in the soft20 ware program;

21 ‘‘(D) the term ‘is designed for installation

22 by the purchaser’ means, in the case of soft23 ware (including software with encryption capa24 bilities) that—
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1 ‘‘(i) the software publisher intends for

2 the purchaser (including any licensee or

3 transferee), who may not be the actual

4 program user, to install the software pro5 gram on a computing device and has sup6 plied the necessary instructions to do so,

7 except that the publisher may also provide

8 telephone help line services for software in9 stallation, electronic transmission, or basic

10 operations; and

11 ‘‘(ii) the software program is designed

12 for installation by the purchaser without

13 further substantial support by the supplier;

14 ‘‘(E) the term ‘computing device’ means a

15 device which incorporates one or more

16 microprocessor-based central processing units

17 that can accept, store, process, or provide out18 put of data; and

19 ‘‘(F) the term ‘computer hardware’, when

20 used in conjunction with information security,

21 includes, but is not limited to, computer sys22 tems, equipment, application-specific assem23 blies, modules, and integrated circuits.’’.

24 (b) CONTINUATION OF EXPORT ADMINISTRATION

25 ACT.—For purposes of carrying out the amendment made
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1 by subsection (a), the Export Administration Act of 1979

2 shall be deemed to be in effect.

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