Union Calendar No. 149
106TH CONGRESS
1ST SESSION
H. R. 850
[Report No. 106–117, Parts I, II, III, IV, V]
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.
JULY 23, 1999
Reported from the Committee on Armed Services with
amendments
JULY 23, 1999
Reported from the Permanent Select Committee on Intel-
ligence with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union,
and ordered to be printed
IB
Union Calendar No. 149
106TH CONGRESS
1ST SESSION
H. R. 850
[Report No. 106–117, Parts I, II, III, IV, V]
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
FEBRUARY 25, 1999
Mr. GOODLATTE (for himself, Ms. LOFGREN, Mr. ARMEY, Mr. DELAY, Mr.
WATTS of Oklahoma, Mr. DAVIS of Virginia, Mr. COX, Ms. PRYCE of
Ohio, Mr. BLUNT, Mr. GEPHARDT, Mr. BONIOR, Mr. FROST, Ms.
DELAURO, Mr. LEWIS of Georgia, Mr. GEJDENSON, Mr. SENSEN-
BRENNER, Mr. GEKAS, Mr. COBLE, Mr. SMITH of Texas, Mr. GALLEGLY,
Mr. BRYANT, Mr. CHABOT, Mr. BARR of Georgia, Mr. HUTCHINSON, Mr.
PEASE, Mr. CANNON, Mr. ROGAN, Mrs. BONO, Mr. BACHUS, Mr. CON-
YERS, Mr. FRANK of Massachusetts, Mr. BOUCHER, Mr. NADLER, Ms.
JACKSON-LEE of Texas, Ms. WATERS, Mr. MEEHAN, Mr. DELAHUNT,
Mr. WEXLER, Mr. ACKERMAN, Mr. ANDREWS, Mr. ARCHER, Mr.
BALLENGER, Mr. BARCIA, Mr. BARRETT of Nebraska, Mr. BARRETT of
Wisconsin, Mr. BARTON of Texas, Mr. BILBRAY, Mr. BLUMENAUER, Mr.
BOEHNER, Mr. BRADY of Texas, Mr. BRADY of Pennsylvania, Ms.
BROWN of Florida, Mr. BROWN of California, Mr. BURR of North Caro-
lina, Mr. BURTON of Indiana, Mr. CAMP, Mr. CAMPBELL, Mrs. CAPPS,
Mr. CHAMBLISS, Mrs. CHENOWETH, Mrs. CHRISTIAN-CHRISTENSEN,
Mrs. CLAYTON, Mr. CLEMENT, Mr. CLYBURN, Mr. COLLINS, Mr. COOK,
Mr. COOKSEY, Mrs. CUBIN, Mr. CUMMINGS, Mr. CUNNINGHAM, Mr.
DAVIS of Illinois, Mr. DEAL of Georgia, Mr. DEFAZIO, Mr. DEUTSCH,
Mr. DICKEY, Mr. DOOLEY of California, Mr. DOOLITTLE, Mr. DOYLE,
Mr. DREIER, Mr. DUNCAN, Ms. DUNN, Mr. EHLERS, Mrs. EMERSON,
Mr. ENGLISH, Ms. ESHOO, Mr. EWING, Mr. FARR of California, Mr. FIL-
NER, Mr. FORD, Mr. FOSSELLA, Mr. FRANKS of New Jersey, Mr.
GILLMOR, Mr. GOODE, Mr. GOODLING, Mr. GORDON, Mr. GREEN of
Texas, Mr. GUTKNECHT, Mr. HALL of Texas, Mr. HASTINGS of Wash-
ington, Mr. HERGER, Mr. HILL of Montana, Mr. HOBSON, Mr. HOEK-
STRA, Mr. HOLDEN, Ms. HOOLEY of Oregon, Mr. HORN, Mr. HOUGH-
TON, Mr. INSLEE, Mr. ISTOOK, Mr. JACKSON of Illinois, Mr. JEFFERSON,
Ms. EDDIE BERNICE JOHNSON of Texas, Mrs. JOHNSON of Connecticut,
Mr. KANJORSKI, Mr. KASICH, Mrs. KELLY, Ms. KIKPATRICK, Mr. KIND,
Mr. KINGSTON, Mr. KNOLLENBERG, Mr. KOLBE, Mr. LAMPSON, Mr.
LARGENT, Mr. LATHAM, Ms. LEE, Mr. LEWIS of Kentucky, Mr. LINDER,
Mr. LUCAS of Oklahoma, Mr. LUTHER, Ms. MCCARTHY of Missouri, Mr.
MCDERMOTT, Mr. MCGOVERN, Mr. MCINTOSH, Mr. MALONEY of Con-
necticut, Mr. MANZULLO, Mr. MARKEY, Mr. MARTINEZ, Mr. MATSUI,
Mrs. MEEK of Florida, Mr. METCALF, Mr. MICA, Ms. MILLENDER-
MCDONALD, Mr. GEORGE MILLER of California, Mr. MOAKLEY, Mr.
MORAN of Virginia, Mrs. MORELLA, Mrs. MYRICK, Mrs. NAPOLITANO,
Mr. NEAL of Massachusetts, Mr. NETHERCUTT, Mr. NORWOOD, Mr.
NUSSLE, Mr. OLVER, Mr. PACKARD, Mr. PALLONE, Mr. PASTOR, Mr.
PETERSON of Minnesota, Mr. PICKERING, Mr. POMBO, Mr. POMEROY,
Mr. PRICE of North Carolina, Mr. QUINN, Mr. RADANOVICH, Mr. RA-
HALL, Mr. RANGEL, Mr. REYNOLDS, Ms. RIVERS, Mr. ROHRABACHER,
Ms. ROS-LEHTINEN, Mr. RUSH, Mr. SALMON, Ms. SANCHEZ, Mr. SAND-
ERS, Mr. SANFORD, Mr. SCARBOROUGH, Mr. SCHAFFER, Mr. SESSIONS,
Mr. SHAYS, Mr. SHERMAN, Mr. SHIMKUS, Mr. SMITH of Washington,
Mr. SMITH of New Jersey, Mr. SOUDER, Ms. STABENOW, Mr. STARK,
Mr. SUNUNU, Mr. TANNER, Mrs. TAUSCHER, Mr. TAUZIN, Mr. TAYLOR
of North Carolina, Mr. THOMAS, Mr. THOMPSON of Mississippi, Mr.
THUNE, Mr. TIAHRT, Mr. TIERNEY, Mr. UPTON, Mr. VENTO, Mr.
WALSH, Mr. WAMP, Mr. WATKINS, Mr. WELLER, Mr. WHITFIELD, Mr.
WICKER, Ms. WOOLSEY, and Mr. WU) 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 de-
termined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
APRIL 27, 1999
Reported from the Committee on the Judiciary
APRIL 27, 1999
Referral to the Committee on International Relations extended for a period
ending not later than July 2, 1999
APRIL 27, 1999
Referred to the Committees on Armed Services and Commerce and the Per-
manent Select Committee on Intelligence for a period ending not later
than July 2, 1999
JULY 2, 1999
Reported from the Committee on Commerce with an amendment
[Strike out all after the enacting clause and insert the part printed in italic]
JULY 2, 1999
Referral to the Committee on International Relations extended for a period
ending not later than July 16, 1999
JULY 2, 1999
Referral to the Committee on Armed Services and the Permanent Select Com-
mittee on Intelligence extended for a period ending not later than July
23, 1999
JULY 16, 1999
Referral to the Committee on International Relations extended for a period
ending not later than July 19, 1999
JULY 19, 1999
Reported from the Committee on International Relations with an amendment
[Strike out all after the enacting clause and insert the part printed in boldface roman]
JULY 23, 1999
Reported from the Committee on Armed Services with amendments
[Strike out all after the enacting clause and insert the part printed in italic and bold brackets]
JULY 23, 1999
Additional sponsors: Mr. HALL of Ohio, Mr. FORBES, Mr. HOLT, Mr. GIB-
BONS, Mr. CALVERT, Ms. SLAUGHTER, Mr. BONILLA, Mr. DIAZ-BALART,
Mr. ENGEL, Mr. HILLIARD, Mr. KING, Mr. LAHOOD, Ms. MCKINNEY,
Mr. NEY, Mrs. NORTHUP, Mr. RILEY, Mr. SERRANO, Mr. STENHOLM,
Mr. TANCREDO, Mr. HANSEN, Mr. MORAN of Kansas, Mr. SAM JOHNSON
of Texas, Mr. HILLEARY, Mr. GARY MILLER of California, Ms. NORTON,
Mr. SWEENEY, Mr. BAKER, Mr. CRANE, Mr. MCINNIS, Mr. WELDON of
Florida, Mr. WISE, Mr. OSE, Mr. BALDACCI, Mr. MINGE, Mr. UNDER-
WOOD, Mr. DEMINT, Mr. WALDEN of Oregon, Mr. HAYES, Mr. FOLEY,
Mr. TERRY, Mr. SHOWS, Mr. RYAN of Wisconsin, Mr. ETHERIDGE, Mr.
WATT of North Carolina, Mr. CROWLEY, Mr. UDALL of Colorado, Mr.
HOEFFEL, Mr. FLETCHER, Mr. BAIRD, Mr. TALENT, Mr. KENNEDY of
Rhode Island, Mr. UDALL of New Mexico, Mr. SAWYER, Mr. MENENDEZ,
and Mr. HINCHEY
Deleted sponsors: Mr. HOLDEN (added February 25, 1999; deleted April 21,
1999), and Mr. HASTINGS of Florida (added March 16, 1999; deleted
June 10, 1999)
JULY 23, 1999
Reported from the Permanent Select Committee on Intelligence with an
amendment, committed to the Committee of the Whole House on the
State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in boldface italic]
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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Security And Freedom
through Encryption (SAFE) Act’’.
SEC. 2. SALE AND USE OF ENCRYPTION.
(a) IN GENERAL.—Part I of title 18, United States
Code, is amended by inserting after chapter 123 the fol-
lowing new chapter:
‘‘CHAPTER 125—ENCRYPTED WIRE AND
ELECTRONIC INFORMATION
‘‘Sec.
‘‘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.
‘‘§ 2801. Definitions
‘‘As used in this chapter—
‘‘(1) the terms ‘person’, ‘State’, ‘wire commu-
nication’, ‘electronic communication’, ‘investigative
or law enforcement officer’, and ‘judge of competent
jurisdiction’ have the meanings given those terms in
section 2510 of this title;
‘‘(2) the term ‘decrypt’ means to retransform or
unscramble encrypted data, including communica-
tions, to its readable form;
‘‘(3)
the
terms
‘encrypt’,
‘encrypted’,
and
‘encryption’ mean the scrambling of wire commu-
nications, electronic communications, or electroni-
cally stored information, using mathematical for-
mulas or algorithms in order to preserve the con-
fidentiality, integrity, or authenticity of, and prevent
unauthorized recipients from accessing or altering,
such communications or information;
‘‘(4) the term ‘key’ means the variable informa-
tion used in a mathematical formula, code, or algo-
rithm, or any component thereof, used to decrypt
wire communications, electronic communications, or
electronically
stored
information,
that
has
been
encrypted; and
‘‘(5) the term ‘key recovery information’ means
information that would enable obtaining the key of
a user of encryption;
‘‘(6)
the
term
‘plaintext
access
capability’
means any method or mechanism which would pro-
vide information in readable form prior to its being
encrypted or after it has been decrypted;
‘‘(7) the term ‘United States person’ means—
key, key recovery information, or any other plaintext ac-
cess capability be—
‘‘(1) built into computer hardware or software
for any purpose;
‘‘(2) given to any other person, including a
Federal Government agency or an entity in the pri-
vate sector that may be certified or approved by the
Federal Government or a State to receive it; or
‘‘(3) retained by the owner or user of an
encryption key or any other person, other than for
encryption products for use by the Federal Govern-
ment or a State.
‘‘(b) PROHIBITION
ON LINKAGE
OF DIFFERENT
USES OF ENCRYPTION.—Neither the Federal Government
nor a State may—
‘‘(1) require the use of encryption products,
standards, or services used for confidentiality pur-
poses, as a condition of the use of such products,
standards, or services for authenticity or integrity
purposes; or
‘‘(2) require the use of encryption products,
standards, or services used for authenticity or integ-
rity purposes, as a condition of the use of such prod-
ucts, standards, or services for confidentiality pur-
poses.
‘‘(c) EXCEPTION FOR ACCESS FOR LAW ENFORCE-
MENT PURPOSES.—Subsection (a) shall not affect the au-
thority of any investigative or law enforcement officer, or
any member of the intelligence community as defined in
section 3 of the National Security Act of 1947 (50 U.S.C.
401a), acting under any law in effect on the effective date
of this chapter, to gain access to encrypted communica-
tions or information.
‘‘§ 2805. Unlawful use of encryption in furtherance of
a criminal act
‘‘(a) ENCRYPTION OF INCRIMINATING COMMUNICA-
TIONS OR INFORMATION UNLAWFUL.—Any person who,
in the commission of a felony under a criminal statute of
the United States, knowingly and willfully encrypts in-
criminating communications or information relating to
that felony with the intent to conceal such communications
or information for the purpose of avoiding detection by
law enforcement agencies or prosecution—
‘‘(1) in the case of a first offense under this
section, shall be imprisoned for not more than 5
years, or fined in the amount set forth in this title,
or both; and
‘‘(2) in the case of a second or subsequent of-
fense under this section, shall be imprisoned for not
more than 10 years, or fined in the amount set forth
in this title, or both.
‘‘(b) USE OF ENCRYPTION NOT A BASIS FOR PROB-
ABLE CAUSE.—The use of encryption by any person shall
not be the sole basis for establishing probable cause with
respect to a criminal offense or a search warrant.’’.
(b) CONFORMING AMENDMENT.—The table of chap-
ters for part I of title 18, United States Code, is amended
by inserting after the item relating to chapter 123 the fol-
lowing new item:
‘‘125. Encrypted wire and electronic information ................ 2801’’.
SEC. 3. EXPORTS OF ENCRYPTION.
(a) AMENDMENT TO EXPORT ADMINISTRATION ACT
OF 1979.—Section 17 of the Export Administration Act
of 1979 (50 U.S.C. App. 2416) is amended by adding at
the end thereof the following new subsection:
‘‘(g) CERTAIN CONSUMER PRODUCTS, COMPUTERS,
AND RELATED EQUIPMENT.—
‘‘(1) GENERAL RULE.—Subject to paragraphs
(2) and (3), the Secretary shall have exclusive au-
thority to control exports of all computer hardware,
software,
computing
devices,
customer
premises
equipment, communications network equipment, and
technology
for
information
security
(including
encryption), except that which is specifically de-
signed or modified for military use, including com-
mand, control, and intelligence applications.
‘‘(2) ITEMS NOT REQUIRING LICENSES.—After
a one-time, 15-day technical review by the Secretary,
no export license may be required, except pursuant
to the Trading with the enemy Act or the Inter-
national Emergency Economic Powers Act (but only
to the extent that the authority of such Act is not
exercised to extend controls imposed under this Act),
for the export or reexport of—
‘‘(A) any computer hardware or software
or computing device, including computer hard-
ware or software or computing devices with
encryption capabilities—
‘‘(i) that is generally available;
‘‘(ii) that is in the public domain for
which copyright or other protection is not
available under title 17, United States
Code, or that is available to the public be-
cause it is generally accessible to the inter-
ested public in any form; or
‘‘(iii) that is used in a commercial,
off-the-shelf,
consumer
product
or
any
component or subassembly designed for
use in such a consumer product available
within
the
United
States
or
abroad
which—
‘‘(I) includes encryption capabili-
ties which are inaccessible to the end
user; and
‘‘(II) is not designed for military
or intelligence end use;
‘‘(B) any computing device solely because
it incorporates or employs in any form—
‘‘(i) computer hardware or software
(including computer hardware or software
with encryption capabilities) that is ex-
empted from any requirement for a license
under subparagraph (A); or
‘‘(ii) computer hardware or software
that is no more technically complex in its
encryption
capabilities
than
computer
hardware or software that is exempted
from any requirement for a license under
subparagraph (A) but is not designed for
installation by the purchaser;
‘‘(C) any computer hardware or software
or computing device solely on the basis that it
incorporates or employs in any form interface
mechanisms for interaction with other computer
hardware or software or computing devices, in-
cluding computer hardware and software and
computing devices with encryption capabilities;
‘‘(D) any computing or telecommunication
device which incorporates or employs in any
form computer hardware or software encryption
capabilities which—
‘‘(i) are not directly available to the
end user; or
‘‘(ii) limit the encryption to be point-
to-point from the user to a central commu-
nications point or link and does not enable
end-to-end user encryption;
‘‘(E) technical
assistance
and technical
data used for the installation or maintenance of
computer hardware or software or computing
devices
with
encryption
capabilities
covered
under this subsection; or
‘‘(F) any encryption hardware or software
or computing device not used for confidentiality
purposes, such as authentication, integrity, elec-
tronic signatures, nonrepudiation, or copy pro-
tection.
‘‘(3) COMPUTER HARDWARE OR SOFTWARE OR
COMPUTING DEVICES WITH ENCRYPTION CAPABILI-
TIES.—After a one-time, 15-day technical review by
the Secretary, the Secretary shall authorize the ex-
port or reexport of computer hardware or software
or computing devices with encryption capabilities for
nonmilitary end uses in any country—
‘‘(A) to which exports of computer hard-
ware or software or computing devices of com-
parable strength are permitted for use by finan-
cial institutions not controlled in fact by United
States persons, unless there is substantial evi-
dence that such computer hardware or software
or computing devices will be—
‘‘(i) diverted to a military end use or
an end use supporting international ter-
rorism;
‘‘(ii) modified for military or terrorist
end use; or
‘‘(iii) reexported without any author-
ization by the United States that may be
required under this Act; or
‘‘(B) if the Secretary determines that a
computer hardware or software or computing
device offering comparable security is commer-
cially available outside the United States from
a foreign supplier, without effective restrictions.
‘‘(4)
DEFINITIONS.—As
used
in
this
subsection—
‘‘(A)(i) the term ‘encryption’ means the
scrambling of wire communications, electronic
communications, or electronically stored infor-
mation, using mathematical formulas or algo-
rithms in order to preserve the confidentiality,
integrity, or authenticity of, and prevent unau-
thorized recipients from accessing or altering,
such communications or information;
‘‘(ii) the terms ‘wire communication’ and
‘electronic communication’ have the meanings
given those terms in section 2510 of title 18,
United States Code;
‘‘(B) the term ‘generally available’ means,
in the case of computer hardware or computer
software (including computer hardware or com-
puter software with encryption capabilities)—
‘‘(i) computer hardware or computer
software that is—
‘‘(I)
distributed
through
the
Internet;
‘‘(II) offered for sale, license, or
transfer to any person without restric-
tion, whether or not for consideration,
including, but not limited to, over-the-
counter retail sales, mail order trans-
actions,
phone
order
transactions,
electronic distribution, or sale on ap-
proval;
‘‘(III)
preloaded
on
computer
hardware or computing devices that
are widely available for sale to the
public; or
‘‘(IV) assembled from computer
hardware or computer software com-
ponents that are widely available for
sale to the public;
‘‘(ii) not designed, developed, or tai-
lored by the manufacturer for specific pur-
chasers or users, except that any such pur-
chaser or user may—
‘‘(I) supply certain installation
parameters needed by the computer
hardware
or
software
to
function
properly with the computer system of
the user or purchaser; or
‘‘(II) select from among options
contained in the computer hardware
or computer software; and
‘‘(iii) with respect to which the manu-
facturer of that computer hardware or
computer software—
‘‘(I) intended for the user or pur-
chaser,
including
any
licensee
or
transferee,
to
install
the
computer
hardware or software and has sup-
plied the necessary instructions to do
so, except that the manufacturer of
the computer hardware or software, or
any agent of such manufacturer, may
also provide telephone or electronic
mail help line services for installation,
electronic transmission, or basic oper-
ations; and
‘‘(II) the computer hardware or
software is designed for such installa-
tion by the user or purchaser without
further
substantial
support
by
the
manufacturer;
‘‘(C) the term ‘computing device’ means a
device which incorporates one or more micro-
processor-based central processing units that
can accept, store, process, or provide output of
data;
‘‘(D) the term ‘computer hardware’ in-
cludes, but is not limited to, computer systems,
equipment,
application-specific
assemblies,
smart cards, modules, integrated circuits, and
printed circuit board assemblies;
‘‘(E) the term ‘customer premises equip-
ment’ means equipment employed on the prem-
ises of a person to originate, route, or terminate
communications;
‘‘(F) the term ‘technical assistance’ in-
cludes
instruction,
skills
training,
working
knowledge, consulting services, and the transfer
of technical data;
‘‘(G) the term ‘technical data’ includes
blueprints, plans, diagrams, models, formulas,
tables, engineering designs and specifications,
and manuals and instructions written or re-
corded on other media or devices such as disks,
tapes, or read-only memories; and
‘‘(H) the term ‘technical review’ means a
review by the Secretary of computer hardware
or
software
or
computing
devices
with
encryption capabilities, based on information
about the product’s encryption capabilities sup-
plied by the manufacturer, that the computer
hardware
or
software
or
computing
device
works as represented.’’.
(b) NO REINSTATEMENT OF EXPORT CONTROLS ON
PREVIOUSLY
DECONTROLLED
PRODUCTS.—Any
encryption product not requiring an export license as of
the date of enactment of this Act, as a result of adminis-
trative decision or rulemaking, shall not require an export
license on or after such date of enactment.
(c)
APPLICABILITY
OF
CERTAIN
EXPORT
CON-
TROLS.—
(1) IN GENERAL.—Nothing in this Act shall
limit the authority of the President under the Inter-
national
Emergency
Economic
Powers
Act,
the
Trading with the enemy Act, or the Export Adminis-
tration Act of 1979, to—
(A) prohibit the export of encryption prod-
ucts to countries that have been determined to
repeatedly provide support for acts of inter-
national terrorism; or
(B) impose an embargo on exports to, and
imports from, a specific country.
(2) SPECIFIC
DENIALS.—The Secretary may
prohibit the export of specific encryption products to
an individual or organization in a specific foreign
country identified by the Secretary, if the Secretary
determines that there is substantial evidence that
such encryption products will be used for military or
terrorist end-use.
(3) DEFINITION.—As used in this subsection
and subsection (b), the term ‘‘encryption’’ has the
meaning given that term in section 17(g)(5)(A) of
the Export Administration Act of 1979, as added by
subsection (a) of this section.
(d) CONTINUATION
OF EXPORT ADMINISTRATION
ACT.—For purposes of carrying out the amendment made
by subsection (a), the Export Administration Act of 1979
shall be deemed to be in effect.
SEC. 4. EFFECT ON LAW ENFORCEMENT ACTIVITIES.
(a) COLLECTION OF INFORMATION BY ATTORNEY
GENERAL.—The Attorney General shall compile, and
maintain in classified form, data on the instances in which
encryption (as defined in section 2801 of title 18, United
States Code) has interfered with, impeded, or obstructed
the ability of the Department of Justice to enforce the
criminal laws of the United States.
(b) AVAILABILITY OF INFORMATION TO THE CON-
GRESS.—The information compiled under subsection (a),
including an unclassified summary thereof, shall be made
available, upon request, to any Member of Congress.
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Security And Freedom
through Encryption (SAFE) Act’’.
SEC. 2. DEFINITIONS.
For purposes of this Act, the following definitions shall
apply:
(1) COMPUTER
HARDWARE.—The term ‘‘com-
puter hardware’’ includes computer systems, equip-
ment, application-specific assemblies, smart cards,
modules, integrated circuits, printed circuit board as-
semblies, and devices that incorporate 1 or more
microprocessor-based central processing units that are
capable of accepting, storing, processing, or providing
output of data.
(2) ENCRYPT
AND
ENCRYPTION.—The terms
‘‘encrypt’’ and ‘‘encryption’’ means the scrambling
(and descrambling) of wire communications, elec-
tronic communications, or electronically stored infor-
mation, using mathematical formulas or algorithms
to preserve the confidentiality, integrity, or authen-
ticity of, and prevent unauthorized recipients from
accessing or altering, such communications or infor-
mation.
(3) 
ENCRYPTION
PRODUCT.—The 
term
‘‘encryption product’’—
(A) means computer hardware, computer
software, or technology with encryption capabili-
ties; and
(B) includes any subsequent version of or
update to an encryption product, if the
encryption capabilities are not changed.
(4) KEY.—The term ‘‘key’’ means the variable
information used in a mathematical formula, code, or
algorithm, or any component thereof, used to decrypt
wire communications, electronic communications, or
electronically stored information, that has been
encrypted.
(5) KEY
RECOVERY
INFORMATION.—The term
‘‘key recovery information’’ means information that
would enable obtaining the key of a user of
encryption.
(6) PERSON.—The term ‘‘person’’ has the mean-
ing given the term in section 2510 of title 18, United
States Code.
(7) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Commerce.
(8) STATE.—The term ‘‘State’’ means any State
of the United States and includes the District of Co-
lumbia and any commonwealth, territory, or posses-
sions of the United States.
(9) UNITED STATES PERSON.—The term ‘‘United
States person’’ means any—
(A) United States citizen; or
(B) legal entity that—
(i) is organized under the laws of the
United States, or any States, the District of
Columbia, or any commonwealth, territory,
or possession of the United States; and
(ii) has its principal place of business
in the United States.
(10) WIRE COMMUNICATION; ELECTRONIC COM-
MUNICATION.—The terms ‘‘wire communication’’ and
‘‘electronic communication’’ have the meanings given
such terms in section 2510 of title 18, United States
Code.
SEC. 3. ENSURING DEVELOPMENT AND DEPLOYMENT OF
ENCRYPTION IS A VOLUNTARY PRIVATE SEC-
TOR ACTIVITY.
(a) STATEMENT OF POLICY.—It is the policy of the
United States that the use, development, manufacture, sale,
distribution, and importation of encryption products,
standards, and services for purposes of assuring the con-
fidentiality, authenticity, or integrity of electronic informa-
tion shall be voluntary and market driven.
(b) LIMITATION ON REGULATION.—Neither the Federal
Government nor a State may establish any conditions, ties,
or links between encryption products, standards, and serv-
ices used for confidentiality, and those used for authenticity
or integrity purposes.
SEC. 4. PROTECTION OF DOMESTIC SALE AND USE OF
ENCRYPTION.
Except as otherwise provided by this Act, it is lawful
for any person within any State, and for any United States
person in a foreign country, to develop, manufacture, sell,
distribute, import, or use any encryption product, regard-
less of the encryption algorithm selected, encryption key
length chosen, existence of key recovery, or other plaintext
access capability, or implementation or medium used.
SEC. 5. PROHIBITION ON MANDATORY GOVERNMENT AC-
CESS TO PLAINTEXT.
(a) IN GENERAL.—No department, agency, or instru-
mentality of the United States or of any State may require
that, set standards for, condition any approval on, create
incentives for, or tie any benefit to a requirement that, a
decryption key, access to a key, key recovery information,
or any other plaintext access capability be—
(1) required to be built into computer hardware
or software for any purpose;
(2) given to any other person (including a de-
partment, agency, or instrumentality of the United
States or an entity in the private sector that may be
certified or approved by the United States or a
State); or
(3) retained by the owner or user of an
encryption key or any other person, other than for
encryption products for the use of the United States
Government or a State government.
(b) PROTECTION OF EXISTING ACCESS.—Subsection
(a) does not affect the authority of any investigative or law
enforcement officer, or any member of the intelligence com-
munity (as defined in section 3 of the National Security
Act of 1947 (50 U.S.C. 401a)), acting under any law in
effect on the date of the enactment of this Act, to gain access
to encrypted communications or information.
SEC. 6. UNLAWFUL USE OF ENCRYPTION IN FURTHERANCE
OF A CRIMINAL ACT.
(a) ENCRYPTION OF INCRIMINATING COMMUNICATIONS
OR INFORMATION UNLAWFUL.—Any person who, in the
commission of a felony under a criminal statute of the
United States, knowingly and willfully encrypts incrimi-
nating communications or information relating to that fel-
ony with the intent to conceal such communications or in-
formation for the purpose of avoiding detection by law en-
forcement agencies or prosecution—
(1) in the case of a first offense under this sec-
tion, shall be imprisoned for not more than 5 years,
or fined under title 18, United States Code, or both;
and
(2) in the case of a second or subsequent offense
under this section, shall be imprisoned for not more
than 10 years, or fined under title 18, United States
Code, or both.
(b) USE OF ENCRYPTION NOT A BASIS FOR PROBABLE
CAUSE.—The use of encryption by any person shall not be
the sole basis for establishing probable cause with respect
to a criminal offense or a search warrant.
SEC. 7. EXPORTS OF ENCRYPTION.
(a) AMENDMENT TO EXPORT ADMINISTRATION ACT OF
1979.—Section 17 of the Export Administration Act of
1979 (50 U.S.C. App. 2416) is amended by adding at the
end the following new subsection:
‘‘(g) CERTAIN CONSUMER PRODUCTS, COMPUTERS,
AND RELATED EQUIPMENT.—
‘‘(1) GENERAL
RULE.—Subject to paragraphs
(2), (3), and (4), the Secretary shall have exclusive
authority to control exports of all computer hardware,
software, computing devices, customer premises equip-
ment, communications network equipment, and tech-
nology 
for 
information 
security 
(including
encryption), except that which is specifically designed
or modified for military use, including command,
control, and intelligence applications.
‘‘(2) CRITICAL
INFRASTRUCTURE
PROTECTION
PRODUCTS.—
‘‘(A) IDENTIFICATION.—Not later than 90
days after the date of the enactment of the Secu-
rity And Freedom through Encryption (SAFE)
Act, the Assistant Secretary of Commerce for
Communications and Information and the Na-
tional Telecommunications and Information Ad-
ministration shall issue regulations that identify,
define, or determine which products and equip-
ment described in paragraph (1) are designed for
improvement of network security, network reli-
ability, or data security.
‘‘(B) NTIA 
RESPONSIBILITY.—Not later
than the expiration of the 2-year period begin-
ning on the date of the enactment of the Security
And Freedom through Encryption (SAFE) Act,
all authority of the Secretary under this sub-
section and all determinations and reviews re-
quired by this section, with respect to products
and equipment described in paragraph (1) that
are designed for improvement of network secu-
rity, network reliability, or data security
through the use of encryption, shall be exercised
through and made by the Assistant Secretary of
Commerce for Communications and Information
and the National Telecommunications and Infor-
mation Administration. The Secretary may, at
any time, assign to the Assistant Secretary and
the NTIA authority of the Secretary under this
section with respect to other products and equip-
ment described in paragraph (1).
‘‘(3) ITEMS NOT REQUIRING LICENSES.—After a
one-time technical review by the Secretary of not
more than 30 working days, which shall include con-
sultation with the Secretary of Defense, the Secretary
of State, the Attorney General, and the Director of
Central Intelligence, no export license may be re-
quired, except pursuant to the Trading with the
Enemy Act or the International Emergency Economic
Powers Act (but only to the extent that the authority
of such Act is not exercised to extend controls imposed
under this Act), for the export or reexport of—
‘‘(A) any computer hardware or software or
computing device, including computer hardware
or software or computing devices with encryption
capabilities—
‘‘(i) that is generally available;
‘‘(ii) that is in the public domain for
which copyright or other protection is not
available under title 17, United States
Code, or that is available to the public be-
cause it is generally accessible to the inter-
ested public in any form; or
‘‘(iii) that is used in a commercial, off-
the-shelf, consumer product or any compo-
nent or subassembly designed for use in
such a consumer product available within
the United States or abroad which—
‘‘(I) includes encryption capabili-
ties which are inaccessible to the end
user; and
‘‘(II) is not designed for military
or intelligence end use;
‘‘(B) any computing device solely because it
incorporates or employs in any form—
‘‘(i) computer hardware or software
(including computer hardware or software
with encryption capabilities) that is ex-
empted from any requirement for a license
under subparagraph (A); or
‘‘(ii) computer hardware or software
that is no more technically complex in its
encryption capabilities than computer hard-
ware or software that is exempted from any
requirement for a license under subpara-
graph (A) but is not designed for installa-
tion by the purchaser;
‘‘(C) any computer hardware or software or
computing device solely on the basis that it in-
corporates or employs in any form interface
mechanisms for interaction with other computer
hardware or software or computing devices, in-
cluding computer hardware and software and
computing devices with encryption capabilities;
‘‘(D) any computing or telecommunication
device which incorporates or employs in any
form computer hardware or software encryption
capabilities which—
‘‘(i) are not directly available to the
end user; or
‘‘(ii) limit the encryption to be point-
to-point from the user to a central commu-
nications point or link and does not enable
end-to-end user encryption;
‘‘(E) technical assistance and technical data
used for the installation or maintenance of com-
puter hardware or software or computing devices
with encryption capabilities covered under this
subsection; or
‘‘(F) any encryption hardware or software
or computing device not used for confidentiality
purposes, such as authentication, integrity, elec-
tronic signatures, nonrepudiation, or copy pro-
tection.
‘‘(4) COMPUTER HARDWARE OR SOFTWARE OR
COMPUTING
DEVICES
WITH
ENCRYPTION
CAPABILI-
TIES.—After a one-time technical review by the Sec-
retary of not more than 30 working days, which shall
include consultation with the Secretary of Defense, the
Secretary of State, the Attorney General, and the Di-
rector of Central Intelligence, the Secretary shall au-
thorize the export or reexport of computer hardware
or software or computing devices with encryption ca-
pabilities for nonmilitary end uses in any country—
‘‘(A) to which exports of computer hardware
or software or computing devices of comparable
strength are permitted for use by financial insti-
tutions not controlled in fact by United States
persons, unless there is substantial evidence that
such computer hardware or software or com-
puting devices will be—
‘‘(i) diverted to a military end use or
an end use supporting international ter-
rorism;
‘‘(ii) modified for military or terrorist
end use;
‘‘(iii) reexported without any author-
ization by the United States that may be
required under this Act; or
‘‘(iv)(I) harmful to the national secu-
rity of the United States, including capa-
bilities of the United States in fighting drug
trafficking, terrorism, or espionage, (II)
used in illegal activities involving the sex-
ual exploitation of, abuse of, or sexually ex-
plicit conduct with minors (including ac-
tivities in violation of chapter 110 of title
18, United States Code, and section 2423 of
such title), or (III) used in illegal activities
involving organized crime; or
‘‘(B) if the Secretary determines that a
computer hardware or software or computing de-
vice offering comparable security is commercially
available in such country from a foreign sup-
plier, without effective restrictions.
‘‘(5) 
DEFINITIONS.—For 
purposes 
of 
this
subsection—
‘‘(A) the term ‘computer hardware’ has the
meaning given such term in section 2 of the Se-
curity 
And 
Freedom 
through 
Encryption
(SAFE) Act;
‘‘(B) the term ‘computing device’ means a
device which incorporates one or more micro-
processor-based central processing units that can
accept, store, process, or provide output of data;
‘‘(C) the term ‘customer premises equip-
ment’ means equipment employed on the prem-
ises of a person to originate, route, or terminate
communications;
‘‘(D) the term ‘data security’ means the
protection, through techniques used by individual
computer and communications users, of data
from unauthorized penetration, manipulation, or
disclosure;
‘‘(E) the term ‘encryption’ has the meaning
given such term in section 2 of the Security And
Freedom through Encryption (SAFE) Act;
‘‘(F) the term ‘generally available’ means,
in the case of computer hardware or computer
software (including computer hardware or com-
puter software with encryption capabilities)—
‘‘(i) computer hardware or computer
software that is—
‘‘(I) distributed through the Inter-
net;
‘‘(II) offered for sale, license, or
transfer to any person without restric-
tion, whether or not for consideration,
including, but not limited to, over-the-
counter retail sales, mail order trans-
actions, phone order transactions, elec-
tronic distribution, or sale on ap-
proval;
‘‘(III) 
preloaded 
on 
computer
hardware or computing devices that
are widely available for sale to the
public; or
‘‘(IV) assembled from computer
hardware or computer software compo-
nents that are widely available for sale
to the public;
‘‘(ii) not designed, developed, or tai-
lored by the manufacturer for specific pur-
chasers or users, except that any such pur-
chaser or user may—
‘‘(I) supply certain installation
parameters needed by the computer
hardware or software to function prop-
erly with the computer system of the
user or purchaser; or
‘‘(II) select from among options
contained in the computer hardware or
computer software; and
‘‘(iii) with respect to which the manu-
facturer of that computer hardware or com-
puter software—
‘‘(I) intended for the user or pur-
chaser, including any licensee or trans-
feree, to install the computer hardware
or software and has supplied the nec-
essary instructions to do so, except that
the manufacturer of the computer
hardware or software, or any agent of
such manufacturer, may also provide
telephone or electronic mail help line
services 
for 
installation, 
electronic
transmission, or basic operations; and
‘‘(II) the computer hardware or
software is designed for such installa-
tion by the user or purchaser without
further substantial support by the
manufacturer;
‘‘(G) the term ‘network reliability’ means
the prevention, through techniques used by pro-
viders of computer and communications services,
of the malfunction, and the promotion of the con-
tinued operations, of computer or communica-
tions network;
‘‘(H) the term ‘network security’ means the
prevention, through techniques used by providers
of computer and communications services, of un-
authorized penetration, manipulation, or disclo-
sure of information of a computer or commu-
nications network;
‘‘(I) the term ‘technical assistance’ includes
instruction, skills training, working knowledge,
consulting services, and the transfer of technical
data;
‘‘(J) the term ‘technical data’ includes blue-
prints, plans, diagrams, models, formulas, tables,
engineering designs and specifications, and
manuals and instructions written or recorded on
other media or devices such as disks, tapes, or
read-only memories; and
‘‘(K) the term ‘technical review’ means a re-
view by the Secretary of computer hardware or
software or computing devices with encryption
capabilities, based on information about the
product’s encryption capabilities supplied by the
manufacturer, that the computer hardware or
software or computing device works as rep-
resented.’’.
(b) TRANSFER OF AUTHORITY TO NATIONAL TELE-
COMMUNICATIONS AND INFORMATION ADMINISTRATION.—
Section 103(b) of the National Telecommunications and In-
formation Administration Organization Act (47 U.S.C.
902(b)) is amended by adding at the end the following new
paragraph:
‘‘(4) EXPORT OF COMMUNICATIONS TRANSACTION
TECHNOLOGIES.—In accordance with section 17(g)(2)
of the Export Administration Act of 1979 (50 U.S.C.
App. 2416(g)(2)), the Secretary shall assign to the As-
sistant Secretary and the NTIA the authority of the
Secretary under such section 17(g), with respect to
products and equipment described in paragraph (1)
of such section that are designed for improvement of
network security, network reliability, or data security,
that (after the expiration of the 2-year period begin-
ning on the date of the enactment of the Security And
Freedom through Encryption (SAFE) Act) is to be
exercised by the Assistant Secretary and the NTIA.’’.
(c) NO REINSTATEMENT OF EXPORT CONTROLS ON
PREVIOUSLY DECONTROLLED PRODUCTS.—Any encryption
product not requiring an export license as of the date of
enactment of this Act, as a result of administrative decision
or rulemaking, shall not require an export license on or
after such date of enactment.
(d) APPLICABILITY OF CERTAIN EXPORT CONTROLS.—
(1) IN
GENERAL.—Nothing in this Act shall
limit the authority of the President under the Inter-
national Emergency Economic Powers Act, the Trad-
ing with the Enemy Act, or the Export Administra-
tion Act of 1979, to—
(A) prohibit the export of encryption prod-
ucts to countries that have been determined to re-
peatedly provide support for acts of inter-
national terrorism; or
(B) impose an embargo on exports to, and
imports from, a specific country.
(2) SPECIFIC DENIALS.—The Secretary of Com-
merce may prohibit the export of specific encryption
products to an individual or organization in a spe-
cific foreign country identified by the Secretary, if the
Secretary determines that there is substantial evi-
dence that such encryption products will be—
(A) used for military or terrorist end-use or
modified for military or terrorist end use;
(B) harmful to United States national secu-
rity, including United States capabilities in
fighting drug trafficking, terrorism, or espionage;
(C) used in illegal activities involving the
sexual exploitation of, abuse of, or sexually ex-
plicit conduct with minors (including activities
in violation of chapter 110 of title 18, United
States Code, and section 2423 of such title); or
(D) used in illegal activities involving orga-
nized crime.
(3) OTHER EXPORT CONTROLS.—An encryption
product is subject to any export control imposed on
that product for any reason other than the existence
of encryption capability. Nothing in this Act or the
amendments made by this Act alters the ability of the
Secretary of Commerce to control exports of products
for reasons other than encryption.
(e) CONTINUATION
OF
EXPORT
ADMINISTRATION
ACT.—For purposes of carrying out the amendment made
by subsection (a), the Export Administration Act of 1979
shall be deemed to be in effect.
SEC. 8. GOVERNMENT PROCUREMENT OF ENCRYPTION
PRODUCTS.
(a) STATEMENT OF POLICY.—It is the policy of the
United States—
(1) to permit the public to interact with govern-
ment through commercial networks and infrastruc-
ture; and
(2) to protect the privacy and security of any
electronic communication from, or stored information
obtained from, the public.
(b) PURCHASE OF ENCRYPTION PRODUCTS BY FED-
ERAL GOVERNMENT.—Any department, agency, or instru-
mentality of the United States may purchase encryption
products for internal use by officers and employees of the
United States to the extent and in the manner authorized
by law.
(c) PROHIBITION OF REQUIREMENT FOR CITIZENS TO
PURCHASE SPECIFIED PRODUCTS.—No department, agen-
cy, or instrumentality of the United States, nor any depart-
ment, agency, or political subdivision of a State, may re-
quire any person in the private sector to use any particular
encryption product or methodology, including products
with a decryption key, access to a key, key recovery infor-
mation, or any other plaintext access capability, to commu-
nicate with, or transact business with, the government.
SEC. 9. NATIONAL ELECTRONIC TECHNOLOGIES CENTER.
Part A of the National Telecommunications and Infor-
mation Administration Organization Act is amended by
inserting after section 105 (47 U.S.C. 904) the following
new section:
‘‘SEC. 106. NATIONAL ELECTRONIC TECHNOLOGIES CEN-
TER.
‘‘(a) ESTABLISHMENT.—There is established in the
NTIA a National Electronic Technologies Center (in this
section referred to as the ‘NET Center’).
‘‘(b) DIRECTOR.—The NET Center shall have a Direc-
tor, who shall be appointed by the Assistant Secretary.
‘‘(c) DUTIES.—The duties of the NET Center shall
be—
‘‘(1) to serve as a center for industry and govern-
ment entities to exchange information and method-
ology regarding data security techniques and tech-
nologies;
‘‘(2) to examine encryption techniques and meth-
ods to facilitate the ability of law enforcement to gain
efficient access to plaintext of communications and
electronic information;
‘‘(3) to conduct research to develop efficient
methods, and improve the efficiency of existing meth-
ods, of accessing plaintext of communications and
electronic information;
‘‘(4) to investigate and research new and emerg-
ing techniques and technologies to facilitate access to
communications and electronic information, includ-
ing —
‘‘(A) reverse-steganography;
‘‘(B) decompression of information that pre-
viously has been compressed for transmission;
and
‘‘(C) de-multiplexing;
‘‘(5) to obtain information regarding the most
current computer hardware and software, tele-
communications, and other capabilities to understand
how to access information transmitted across com-
puter and communications networks; and
‘‘(6) to serve as a center for Federal, State, and
local law enforcement authorities for information and
assistance regarding decryption and other access re-
quirements.
‘‘(d) EQUAL ACCESS.—State and local law enforce-
ment agencies and authorities shall have access to informa-
tion, services, resources, and assistance provided by the
NET Center to the same extent that Federal law enforce-
ment agencies and authorities have such access.
‘‘(e) PERSONNEL.—The Director may appoint such
personnel as the Director considers appropriate to carry out
the duties of the NET Center.
‘‘(f) ASSISTANCE OF OTHER FEDERAL AGENCIES.—
Upon the request of the Director of the NET Center, the
head of any department or agency of the Federal Govern-
ment may, to assist the NET Center in carrying out its
duties under this section—
‘‘(1) detail, on a reimbursable basis, any of the
personnel of such department or agency to the NET
Center; and
‘‘(2) provide to the NET Center facilities, infor-
mation, and other non-personnel resources.
‘‘(g) PRIVATE INDUSTRY ASSISTANCE.—The NET Cen-
ter may accept, use, and dispose of gifts, bequests, or devises
of money, services, or property, both real and personal, for
the purpose of aiding or facilitating the work of the Center.
Gifts, bequests, or devises of money and proceeds from sales
of other property received as gifts, bequests, or devises shall
be deposited in the Treasury and shall be available for dis-
bursement upon order of the Director of the NET Center.
‘‘(h) ADVISORY BOARD.—
‘‘(1) ESTABLISHMENT.—There is established the
Advisory Board of the NET Center (in this subsection
referred to as the ‘‘Advisory Board’’), which shall be
comprised of 11 members who shall have the quali-
fications described in paragraph (2) and who shall be
appointed by the Assistant Secretary not later than
6 months after the date of the enactment of this Act.
The chairman of the Advisory Board shall be des-
ignated by the Assistant Secretary at the time of ap-
pointment.
‘‘(2) QUALIFICATIONS.—Each member of the Ad-
visory Board shall have experience or expertise in the
field of encryption, decryption, electronic communica-
tion, information security, electronic commerce, or
law enforcement.
‘‘(3) DUTIES.—The duty of the Advisory Board
shall be to advise the NET Center and the Federal
Government regarding new and emerging technologies
relating to encryption and decryption of communica-
tions and electronic information.
‘‘(i) IMPLEMENTATION PLAN.—Within 2 months after
the date of the enactment of this Act, the Assistant Sec-
retary, in consultation and cooperation with other appro-
priate Federal agencies and appropriate industry partici-
pants, develop and cause to be published in the Federal Reg-
ister a plan for establishing the NET Center. The plan
shall—
‘‘(1) specify the physical location of the NET
Center and the equipment, software, and personnel re-
sources necessary to carry out the duties of the NET
Center under this section;
‘‘(2) assess the amount of funding necessary to
establish and operate the NET Center; and
‘‘(3) identify sources of probable funding for the
NET Center, including any sources of in-kind con-
tributions from private industry.’’.
SEC. 10. STUDY OF NETWORK AND DATA SECURITY ISSUES.
Part C of the National Telecommunications and Infor-
mation Administration Organization Act is amended by
adding at the end the following new section:
‘‘SEC. 156. STUDY OF NETWORK RELIABILITY AND SECURITY
AND DATA SECURITY ISSUES.
‘‘(a) IN GENERAL.—The NTIA shall conduct an exam-
ination of—
‘‘(1) the relationship between—
‘‘(A) network reliability (for communica-
tions and computer networks), network security
(for such networks), and data security issues;
and
‘‘(B) the conduct, in interstate commerce, of
electronic 
commerce 
transactions, 
including
through the medium of the telecommunications
networks, the Internet, or other interactive com-
puter systems;
‘‘(2) the availability of various methods for
encrypting communications; and
‘‘(3) the effects of various methods of providing
access to encrypted communications and to informa-
tion to further law enforcement activities.
‘‘(b) SPECIFIC ISSUES.—In conducting the examina-
tion required by subsection (a), the NTIA shall—
‘‘(1) analyze and evaluate the requirements
under paragraphs (3) and (4) of section 17(g) of the
Export Administration Act of 1979 (50 U.S.C. App.
2416(g); as added by section 7(a) of this Act) for
products referred to in such paragraphs to qualify for
the license exemption or mandatory export authoriza-
tion under such paragraphs, and determine—
‘‘(A) the scope and applicability of such re-
quirements and the products that, at the time of
the examination, qualify for such license exemp-
tion or export authorization; and
‘‘(B) the products that will, 12 months after
the examination is conducted, qualify for such li-
cense exemption or export authorization; and
‘‘(2) assess possible methods for providing access
to encrypted communications and to information to
further law enforcement activities.
‘‘(c) REPORTS.—Within one year after the date of en-
actment of this section, the NTIA shall submit to the Con-
gress and the President a detailed report on the examina-
tion required by subsections (a) and (b). Annually there-
after, the NTIA shall submit to the Congress and the Presi-
dent an update on such report.
‘‘(d) DEFINITIONS.—For purposes of this section—
‘‘(1) the terms ‘data security’, ‘encryption’, ‘net-
work reliability’, and ‘network security’ have the
meanings given such terms in section 17(g)(5) of the
Export Administration Act of 1979 (50 U.S.C. App.
2416(g)(5)); and
‘‘(2) the terms ‘Internet’ and ‘interactive com-
puter systems’ have the meanings provided by section
230(e) of the Communications Act of 1934 (47 U.S.C.
230(e)).’’.
SEC. 11. TREATMENT OF ENCRYPTION IN INTERSTATE AND
FOREIGN COMMERCE.
(a) INQUIRY REGARDING IMPEDIMENTS
TO COM-
MERCE.—Within 180 days after the date of the enactment
of this Act, the Secretary of Commerce shall complete an
inquiry to—
(1) identify any domestic and foreign impedi-
ments to trade in encryption products and services
and the manners in which and extent to which such
impediments inhibit the development of interstate and
foreign commerce; and
(2) identify import restrictions imposed by for-
eign nations that constitute trade barriers to pro-
viders of encryption products or services.
The Secretary shall submit a report to the Congress regard-
ing the results of such inquiry by such date.
(b) REMOVAL OF IMPEDIMENTS TO TRADE.—Within 1
year after such date of enactment, the Secretary shall pre-
scribe such regulations as may be necessary to reduce the
impediments to trade in encryption products and services
identified in the inquiry pursuant to subsection (a) for the
purpose of facilitating the development of interstate and for-
eign commerce. Such regulations shall be designed to—
(1) promote the sale and distribution, including
through electronic commerce, in foreign commerce of
encryption products and services manufactured in the
United States; and
(2) strengthen the competitiveness of domestic
providers of encryption products and services in for-
eign commerce, including electronic commerce.
(c) INTERNATIONAL AGREEMENTS.—
(1) REPORT TO PRESIDENT.—Upon the comple-
tion of the inquiry under subsection (a), the Secretary
shall submit a report to the President regarding re-
ducing any impediments to trade in encryption prod-
ucts and services that are identified by the inquiry
and could, in the determination of the Secretary, re-
quire international negotiations for such reduction.
(2) NEGOTIATIONS.—The President shall take all
actions necessary to conduct negotiations with other
countries for the purposes of (A) concluding inter-
national agreements on the promotion of encryption
products and services, and (B) achieving mutual rec-
ognition of countries’ export controls, in order to meet
the needs of countries to preserve national security,
safeguard privacy, and prevent commercial espionage.
The President may consider a country’s refusal to ne-
gotiate such international export and mutual recogni-
tion agreements when considering the participation of
the United States in any cooperation or assistance
program with that country. The President shall sub-
mit a report to the Congress regarding the status of
international efforts regarding cryptography not later
than December 31, 2000.
SEC. 12. COLLECTION OF INFORMATION ON EFFECT OF
ENCRYPTION ON LAW ENFORCEMENT ACTIVI-
TIES.
(a) COLLECTION OF INFORMATION BY ATTORNEY GEN-
ERAL.—The Attorney General shall compile, and maintain
in classified form, data on the instances in which
encryption (as defined in section 2801 of title 18, United
States Code) has interfered with, impeded, or obstructed the
ability of the Department of Justice to enforce the criminal
laws of the United States.
(b) AVAILABILITY
OF INFORMATION
TO
THE CON-
GRESS.—The information compiled under subsection (a),
including an unclassified summary thereof, shall be made
available, upon request, to any Member of Congress.
SEC. 13. PROHIBITION ON TRANSFERS TO PLA AND COM-
MUNIST CHINESE MILITARY COMPANIES.
(a) PROHIBITION.—Whoever knowingly and willfully
transfers to the People’s Liberation Army or to any Com-
munist Chinese military company any encryption product
that utilizes a key length of more than 56 bits—
(1) in the case of a first offense under this sec-
tion, shall be imprisoned for not more than 5 years,
or fined under title 18, United States Code, or both;
and
(2) in the case of second or subsequent offense
under this section, shall be imprisoned for not more
than 10 years, or fined under title 18, United States
Code, or both.
(b) DEFINITIONS.—For purposes of this section:
(1) COMMUNIST CHINESE MILITARY COMPANY.—
(A) Subject to subparagraph (B), the term ‘‘Com-
munist Chinese military company’’ has the meaning
given that term in section 1237(b)(4) of the Strom
Thurmond National Defense Authorization Act for
Fiscal Year 1999 (50 U.S.C. 1701 note).
(B) At such time as the determination and pub-
lication of persons are made under section 1237(b)(1)
of the Strom Thurmond National Defense Authoriza-
tion Act for Fiscal Year 1999, the term ‘‘Communist
Chinese military company’’ shall mean the list of
those persons so published, as revised under section
1237(b)(2) of that Act.
(2) PEOPLE’S
LIBERATION
ARMY.—The term
‘‘People’s Liberation Army’’ has the meaning given
that term in section 1237(c) of the Strom Thurmond
National Defense Authorization Act for Fiscal Year
1999.
SEC. 14. FAILURE TO DECRYPT INFORMATION OBTAINED
UNDER COURT ORDER.
Whoever is required by an order of any court to pro-
vide to the court or any other party any information in
such person’s possession which has been encrypted and who,
having possession of the key or such other capability to
decrypt such information into the readable or comprehen-
sible format of such information prior to its encryption,
fails to provide such information in accordance with the
order in such readable or comprehensible form—
(1) in the case of a first offense under this sec-
tion, shall be imprisoned for not more than 5 years,
or fined under title 18, United States Code, or both;
and
(2) in the case of second or subsequent offense
under this section, shall be imprisoned for not more
than 10 years, or fined under title 18 United States
Code, or both.
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Security
And Freedom through Encryption (SAFE)
Act’’.
SEC. 2. SALE AND USE OF ENCRYPTION.
(a) IN GENERAL.—Part I of title 18, United
States Code, is amended by inserting after
chapter 123 the following new chapter:
‘‘CHAPTER 125—ENCRYPTED WIRE AND
ELECTRONIC INFORMATION
‘‘Sec.
‘‘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.
‘‘§ 2801. Definitions
‘‘As used in this chapter—
‘‘(1) the terms ‘person’, ‘State’, ‘wire
communication’, ‘electronic communica-
tion’, ‘investigative or law enforcement
officer’, and ‘judge of competent jurisdic-
tion’ have the meanings given those
terms in section 2510 of this title;
‘‘(2) the term ‘decrypt’ means to re-
transform or unscramble encrypted data,
including communications, to its read-
able form;
‘‘(3) the terms ‘encrypt’, ‘encrypted’,
and ‘encryption’ mean the scrambling of
wire communications, electronic commu-
nications, or electronically stored infor-
mation, using mathematical formulas or
algorithms in order to preserve the con-
fidentiality, integrity, or authenticity of,
and 
prevent 
unauthorized 
recipients
from accessing or altering, such commu-
nications or information;
‘‘(4) the term ‘key’ means the variable
information used in a mathematical for-
mula, code, or algorithm, or any compo-
nent thereof, used to decrypt wire com-
munications, electronic communications,
or electronically stored information, that
has been encrypted; and
‘‘(5) the term ‘key recovery informa-
tion’ means information that would en-
able obtaining the key of a user of
encryption;
‘‘(6) the term ‘plaintext access capa-
bility’ means any method or mechanism
which would provide information in
readable 
form 
prior 
to 
its 
being
encrypted or after it has been decrypted;
‘‘(7) the term ‘United States person’
means—
‘‘(A) any United States citizen;
‘‘(B) any other person organized
under the laws of any State, the Dis-
trict of Columbia, or any common-
wealth, territory, or possession of the
United States; and
‘‘(C) any person organized under
the laws of any foreign country who
is owned or controlled by individuals
or persons described in subpara-
graphs (A) and (B).
‘‘§ 2802. Freedom to use encryption
‘‘Subject to section 2805, it shall be lawful
for any person within any State, and for any
United States person in a foreign country, to
use 
any 
encryption, 
regardless 
of 
the
encryption algorithm selected, encryption
key length chosen, or implementation tech-
nique or medium used.
‘‘§ 2803. Freedom to sell encryption
‘‘Subject to section 2805, it shall be lawful
for any person within any State to sell in
interstate commerce any encryption, regard-
less of the encryption algorithm selected,
encryption key length chosen, or implementa-
tion technique or medium used.
‘‘§ 2804. Prohibition on mandatory key escrow
‘‘(a) GENERAL PROHIBITION.—Neither the
Federal Government nor a State may require
that, or condition any approval on a require-
ment that, a key, access to a key, key recovery
information, or any other plaintext access ca-
pability be—
‘‘(1) built into computer hardware or
software for any purpose;
‘‘(2) given to any other person, includ-
ing a Federal Government agency or an
entity in the private sector that may be
certified or approved by the Federal Gov-
ernment or a State to receive it; or
‘‘(3) retained by the owner or user of
an encryption key or any other person,
other than for encryption products for
use by the Federal Government or a
State.
‘‘(b) EXCEPTION FOR GOVERNMENT NATIONAL
SECURITY AND LAW ENFORCEMENT PURPOSES.—
The prohibition contained in subsection (a)
shall not apply to any department, agency, or
instrumentality of the United States, or to any
department, agency, or political subdivision
of a State, that has a valid contract with a
nongovernmental entity that is assisting in
the performance of national security or law
enforcement activity.
‘‘(c) EXCEPTION FOR ACCESS FOR LAW EN-
FORCEMENT PURPOSES.—Subsection (a) shall
not affect the authority of any investigative or
law enforcement officer, or any member of the
intelligence community as defined in section
3 of the National Security Act of 1947 (50
U.S.C. 401a), acting under any law in effect on
the effective date of this chapter, to gain ac-
cess to encrypted communications or infor-
mation.
‘‘§ 2805. Unlawful use of encryption in furtherance of
a criminal act
‘‘(a) ENCRYPTION OF INCRIMINATING COMMU-
NICATIONS
OR INFORMATION UNLAWFUL.—Any
person who, in the commission of a felony
under a criminal statute of the United States,
knowingly and willfully encrypts incrimi-
nating communications or information relat-
ing to that felony with the intent to conceal
such communications or information for the
purpose of avoiding detection by law enforce-
ment agencies or prosecution—
‘‘(1) in the case of a first offense
under this section, shall be imprisoned
for not more than 5 years, or fined in the
amount set forth in this title, or both; and
‘‘(2) in the case of a second or subse-
quent offense under this section, shall be
imprisoned for not more than 10 years, or
fined in the amount set forth in this title,
or both.
‘‘(b) USE OF ENCRYPTION NOT A BASIS FOR
PROBABLE CAUSE.—The use of encryption by
any person shall not be the sole basis for es-
tablishing probable cause with respect to a
criminal offense or a search warrant.’’.
(b) CONFORMING AMENDMENT.—The table of
chapters for part I of title 18, United States
Code, is amended by inserting after the item
relating to chapter 123 the following new
item:
‘‘125. Encrypted wire and electronic information ............... 2801’’.
SEC. 3. EXPORTS OF ENCRYPTION.
(a) AMENDMENT TO EXPORT ADMINISTRATION
ACT OF 1979.—Section 17 of the Export Admin-
istration Act of 1979 (50 U.S.C. App. 2416) is
amended by adding at the end thereof the fol-
lowing new subsection:
‘‘(g) CERTAIN CONSUMER PRODUCTS, COM-
PUTERS, AND RELATED EQUIPMENT.—
‘‘(1) GENERAL RULE.—Subject to para-
graphs (2) and (3), the Secretary shall
have exclusive authority to control ex-
ports of all computer hardware, software,
computing devices, customer premises
equipment, 
communications 
network
equipment, and technology for informa-
tion security (including encryption), ex-
cept that which is specifically designed
or modified for military use, including
command, control, and intelligence appli-
cations.
‘‘(2) ITEMS NOT REQUIRING LICENSES.—
After a 1-time technical review by the
Secretary, which shall be completed not
later than 30 working days after submis-
sion of the product concerned for such
technical review, no export license may
be required, except pursuant to the Trad-
ing with the enemy Act or the Inter-
national Emergency Economic Powers
Act (but only to the extent that the au-
thority of such Act is not exercised to ex-
tend controls imposed under this Act), for
the export or reexport of—
‘‘(A) any computer hardware or
software or computing device, includ-
ing computer hardware or software
or computing devices with encryption
capabilities—
‘‘(i) that is generally available;
‘‘(ii) that is in the public do-
main for which copyright or other
protection is not available under
title 17, United States Code, or
that is available to the public be-
cause it is generally accessible to
the interested public in any form;
or
‘‘(iii) that is used in a commer-
cial, off-the-shelf, consumer prod-
uct or any component or sub-
assembly designed for use in such
a 
consumer 
product 
available
within 
the 
United 
States 
or
abroad which—
‘‘(I) 
includes 
encryption
capabilities which are inac-
cessible to the end user; and
‘‘(II) is not designed for
military or intelligence end
use;
‘‘(B) any computing device solely
because it incorporates or employs in
any form—
‘‘(i) computer hardware or
software 
(including 
computer
hardware 
or 
software 
with
encryption capabilities) that is
exempted from any requirement
for a license under subparagraph
(A); or
‘‘(ii) computer hardware or
software that is no more tech-
nically complex in its encryption
capabilities than computer hard-
ware or software that is exempted
from any requirement for a li-
cense under subparagraph (A) but
is not designed for installation by
the purchaser;
‘‘(C) any computer hardware or
software or computing device solely
on the basis that it incorporates or
employs in any form interface mecha-
nisms for interaction with other com-
puter hardware or software or com-
puting devices, including computer
hardware and software and com-
puting devices with encryption capa-
bilities;
‘‘(D) 
any 
computing 
or 
tele-
communication device which incor-
porates or employs in any form com-
puter 
hardware 
or 
software
encryption capabilities which—
‘‘(i) are not directly available
to the end user; or
‘‘(ii) limit the encryption to be
point-to-point from the user to a
central communications point or
link and does not enable end-to-
end user encryption;
‘‘(E) 
technical 
assistance 
and
technical data used for the installa-
tion or maintenance of computer
hardware or software or computing
devices with encryption capabilities
covered under this subsection; or
‘‘(F) any encryption hardware or
software or computing device not
used 
for 
confidentiality 
purposes,
such 
as 
authentication, 
integrity,
electronic 
signatures, 
nonrepudi-
ation, or copy protection.
‘‘(3) COMPUTER
HARDWARE
OR
SOFT-
WARE
OR
COMPUTING
DEVICES
WITH
ENCRYPTION CAPABILITIES.—After a 1-time
technical review by the Secretary, which
shall be completed not later than 30
working days after submission of the
product concerned for such technical re-
view, the Secretary shall authorize the
export or reexport of computer hardware
or software or computing devices with
encryption capabilities for nonmilitary
end uses in any country—
‘‘(A) to which exports of computer
hardware or software or computing
devices of comparable strength are
permitted for use by financial institu-
tions not controlled in fact by United
States persons, unless there is cred-
ible evidence that such computer
hardware or software or computing
devices will be—
‘‘(i) diverted to a military end
use or an end use supporting
international terrorism;
‘‘(ii) modified for military or
terrorist end use; or
‘‘(iii) reexported without any
authorization 
by 
the 
United
States 
that 
may 
be 
required
under this Act; or
‘‘(B) if the Secretary determines
that a computer hardware or soft-
ware or computing device offering
comparable security is commercially
available outside the United States
from a foreign supplier, without ef-
fective restrictions.
‘‘(4) EXPORTS TO MAJOR DRUG-TRANSIT
AND ILLICIT DRUG PRODUCING COUNTRIES.—
The Secretary, before approving any ex-
port or reexport of encryption products
to any major drug-transit country or
major illicit drug producing country
identified under section 490(h) of the For-
eign Assistance Act of 1961, shall consult
with the Attorney General of the United
States, the Director of the Federal Bu-
reau of Investigation, and the Adminis-
trator of the Drug Enforcement Adminis-
tration on the potential impact of such
export or reexport on the flow of illicit
drugs into the United States. This para-
graph shall not authorize the denial of an
export of an encryption product, or of the
issuance of a specific export license, for
which such denial is not otherwise appro-
priate, solely because the country of des-
tination is a major drug-transit country
or major illicit drug producing country.
‘‘(5) DEFINITIONS.—As used in this
subsection—
‘‘(A)(i) 
the 
term 
‘encryption’
means the scrambling of wire commu-
nications, electronic communications,
or electronically stored information,
using mathematical formulas or algo-
rithms in order to preserve the con-
fidentiality, integrity, or authenticity
of, and prevent unauthorized recipi-
ents from accessing or altering, such
communications or information;
‘‘(ii) the terms ‘wire communica-
tion’ and ‘electronic communication’
have the meanings given those terms
in section 2510 of title 18, United
States Code;
‘‘(B) the term ‘generally available’
means, in the case of computer hard-
ware or computer software (including
computer hardware or computer soft-
ware with encryption capabilities)—
‘‘(i) computer hardware or
computer software that is—
‘‘(I) 
distributed 
through
the Internet;
‘‘(II) offered for sale, li-
cense, or transfer to any per-
son 
without 
restriction,
whether or not for consider-
ation, including, but not lim-
ited to, over-the-counter retail
sales, mail order transactions,
phone 
order 
transactions,
electronic distribution, or sale
on approval;
‘‘(III) preloaded on com-
puter hardware or computing
devices that are widely avail-
able for sale to the public; or
‘‘(IV) assembled from com-
puter hardware or computer
software components that are
widely available for sale to
the public;
‘‘(ii) not designed, developed,
or tailored by the manufacturer
for specific purchasers or users,
except that any such purchaser or
user may—
‘‘(I) supply certain instal-
lation parameters needed by
the computer hardware or
software to function properly
with the computer system of
the user or purchaser; or
‘‘(II) select from among
options contained in the com-
puter hardware or computer
software;
‘‘(iii) with respect to which
the manufacturer of that com-
puter 
hardware 
or 
computer
software—
‘‘(I) intended for the user
or purchaser, including any li-
censee or transferee, to install
the computer hardware or
software and has supplied the
necessary instructions to do
so, except that the manufac-
turer of the computer hard-
ware 
or 
software, 
or 
any
agent of such manufacturer,
may also provide telephone or
electronic mail help line serv-
ices 
for 
installation, 
elec-
tronic transmission, or basic
operations; and
‘‘(II) the computer hard-
ware or software is designed
for such installation by the
user or purchaser without
further substantial support by
the manufacturer; and
‘‘(iv) offered for sale, license,
or transfer to any person without
restriction, whether or not for
consideration, including, but not
limited to, over-the-counter retail
sales, mail order transactions,
phone order transactions, elec-
tronic distribution, or sale on ap-
proval;
‘‘(C) the term ‘computing device’
means a device which incorporates
one or more microprocessor-based
central processing units that can ac-
cept, store, process, or provide output
of data;
‘‘(D) the term ‘computer hard-
ware’ includes, but is not limited to,
computer systems, equipment, appli-
cation-specific 
assemblies, 
smart
cards, modules, integrated circuits,
and printed circuit board assemblies;
‘‘(E) the term ‘customer premises
equipment’ 
means 
equipment 
em-
ployed on the premises of a person to
originate, route, or terminate commu-
nications;
‘‘(F) the term ‘technical assist-
ance’ 
includes 
instruction, 
skills
training, working knowledge, con-
sulting services, and the transfer of
technical data;
‘‘(G) the term ‘technical data’ in-
cludes blueprints, plans, diagrams,
models, formulas, tables, engineering
designs and specifications, and manu-
als and instructions written or re-
corded on other media or devices
such as disks, tapes, or read-only
memories; and
‘‘(H) the term ‘technical review’
means a review by the Secretary of
computer hardware or software or
computing devices with encryption
capabilities, based on information
about the product’s encryption capa-
bilities supplied by the manufacturer,
that the computer hardware or soft-
ware or computing device works as
represented.’’.
(b) NO REINSTATEMENT
OF EXPORT CON-
TROLS
ON PREVIOUSLY DECONTROLLED PROD-
UCTS.—Any encryption product not requiring
an export license as of the date of enactment
of this Act, as a result of administrative deci-
sion or rulemaking, shall not require an ex-
port license on or after such date of enact-
ment.
(c) APPLICABILITY OF CERTAIN EXPORT CON-
TROLS.—
(1) IN GENERAL.—Nothing in this Act
shall limit the authority of the President
under the International Emergency Eco-
nomic Powers Act, the Trading with the
enemy Act, or the Export Administration
Act of 1979, to—
(A) 
prohibit 
the 
export 
of
encryption products to countries that
have been determined to repeatedly
provide support for acts of inter-
national terrorism;
(B) prohibit the export or reex-
port of any encryption product with
an encryption strength of more than
56 bits to any military unit of the
People’s Republic of China, including
the People’s Liberation Army (as de-
fined in section 1237(c) of the Strom
Thurmond National Defense Author-
ization Act for Fiscal Year 1999 (50
U.S.C. 1701 note)); or
(C) impose an embargo on exports
to, and imports from, a specific coun-
try.
(2) SPECIFIC
DENIALS.—The Secretary
of Commerce may prohibit the export of
specific encryption products to an indi-
vidual or organization in a specific for-
eign country or countries identified by
the Secretary, if the Secretary, in con-
sultation with the Secretary of Defense,
the Secretary of State, the Attorney Gen-
eral, the Director of the Federal Bureau
of Investigation, the Administrator of the
Drug Enforcement Administration, and
the Director of Central Intelligence, de-
termines that there is credible evidence
that such encryption products will be
used—
(A) for military or terrorist end-
use;
(B) to facilitate the import of il-
licit drugs into the United States;
(C) in the manufacture of weap-
ons of mass destruction or otherwise
to assist in the proliferation of weap-
ons of mass destruction; or
(D) for illegal activities involving
the sexual exploitation of, abuse of,
or sexually explicit conduct with mi-
nors.
(3) 
OTHER
EXPORT
CONTROLS.—Any
encryption product is subject to export
controls for any reason other than the ex-
istence of encryption capability, includ-
ing export controls imposed on high per-
formance computers. Nothing in this Act
or the amendments made by this Act al-
ters the ability of the Secretary of Com-
merce to control exports for reasons
other than encryption capabilities.
(4) DEFINITION.—As used in this sub-
section and subsection (b), the term
‘‘encryption’’ has the meaning given that
term in section 17(g)(5)(A) of the Export
Administration Act of 1979, as added by
subsection (a) of this section.
(d) CONTINUATION OF EXPORT ADMINISTRA-
TION ACT.—For purposes of carrying out the
amendment made by subsection (a), the Ex-
port Administration Act of 1979 shall be
deemed to be in effect.
SEC. 4. EFFECT ON LAW ENFORCEMENT ACTIVITIES.
(a) COLLECTION OF INFORMATION BY ATTOR-
NEY GENERAL.—The Attorney General shall
compile, and maintain in classified form, data
on the instances in which encryption (as de-
fined in section 2801 of title 18, United States
Code) has interfered with, impeded, or ob-
structed the ability of the Department of Jus-
tice to enforce the criminal laws of the United
States.
(b) AVAILABILITY OF INFORMATION TO THE
CONGRESS.—The information compiled under
subsection (a), including an unclassified sum-
mary thereof, shall be made available, upon
request, to any Member of Congress.
ƒSECTION 1. SHORT TITLE.
ƒThis Act may be cited as the ‘‘Protection of National
Security and Public Safety Act’’.
ƒSEC. 2. EXPORTS OF ENCRYPTION.
ƒ(a) AUTHORITY TO CONTROL EXPORTS.—The Presi-
dent shall control the export of all dual-use encryption prod-
ucts.
ƒ(b) AUTHORITY TO DENY EXPORT FOR NATIONAL
SECURITY REASONS.—Notwithstanding any provision of
this Act, the President may deny the export of any
encryption product on the basis that its export is contrary
to the national security interests of the United States.
ƒ(c) DECISIONS NOT SUBJECT
TO JUDICIAL RE-
VIEW.—Any decision made by the President or his designee
with respect to the export of encryption products under this
Act shall not be subject to judicial review.
ƒSEC. 3. LICENSE EXCEPTION FOR CERTAIN ENCRYPTION
PRODUCTS.
ƒEncryption products with encryption strength equal
to or less than the level identified in section 5 shall be eligi-
ble for export under a license exception if—
ƒ(1) such encryption product is submitted for a
1-time technical review;
ƒ(2) such encryption product does not require li-
censing under otherwise applicable regulations;
ƒ(3) such encryption product is not intended for
a country, end user, or end use that is by regulation
ineligible to receive such product, and the encryption
product is otherwise qualified for export; and
ƒ(4) the exporter, at the time of submission of
the product for technical review, provides the names
and addresses of its distribution chain partners.
ƒSEC. 4. ONE-TIME PRODUCT REVIEW.
ƒThe President shall specify the information that must
be submitted for the 1-time review referred to in section 3.
ƒSEC. 5. ELIGIBILITY LEVELS.
ƒ(a) INITIAL ELIGIBILITY LEVEL.—Not later than 180
days after the date of the enactment of this Act, the Presi-
dent shall notify the Congress of the maximum level of
encryption strength that may be exported from the United
States under license exception pursuant to section 3 without
harm to the national security interests of the United States.
Such level shall not become effective until 30 days after such
notification.
ƒ(b) PERIODIC REVIEW OF ELIGIBILITY LEVEL.—The
President shall, at the end of each successive 180-day period
after the notice provided to the Congress under subsection
(a), notify the Congress of the maximum level of encryption
strength, which may not be lower than that in effect under
this section during that 180-day period, that may be ex-
ported from the United States under a license exception
pursuant to section 3 without harm to the national security
interests of the United States. Such level shall not become
effective until 30 days after such notification.
ƒSEC. 6. ENCRYPTION LICENSES REQUIRED.
ƒ(a) UNITED STATES PRODUCTS EXCEEDING CER-
TAIN BIT LENGTH.—An export license is required for the
export of any encryption product designed or manufactured
within the United States with an encryption strength ex-
ceeding the maximum level eligible for a license exception
under section 3.
ƒ(b) REQUIREMENTS FOR EXPORT LICENSE APPLICA-
TION.—To apply for an export license, the applicant shall
submit—
ƒ(1) the product for technical review;
ƒ(2) a certification identifying—
ƒ(A) the intended end use of the product;
and
ƒ(B) the expected end user of the product;
ƒ(3) in instances where the export is to a dis-
tribution chain partner—
ƒ(A) proof that the distribution chain part-
ner has contractually agreed to abide by all laws
and regulations of the United States concerning
the export and reexport of encryption products
designed or manufactured within the United
States; and
ƒ(B) the name and address of the distribu-
tion chain partner; and
ƒ(4) any other information required by the
President.
ƒ(c) POST-EXPORT REPORTING.—
ƒ(1) UNAUTHORIZED
USE.—Any exporter of
encryption products that are designed or manufac-
tured within the United States shall submit a report
to the Secretary at any time the exporter has reason
to believe that any such product exported pursuant to
this section is being diverted to a use or user not ap-
proved at the time of export.
ƒ(2) DISTRIBUTION CHAIN PARTNERS.—All ex-
porters of encryption products that are designed and
manufactured within the United States, and all dis-
tribution chain partners of such exporters, shall sub-
mit to the Secretary a report which shall specify—
ƒ(A) the particular product sold;
ƒ(B) the name and address of the end user
of the product; and
ƒ(C) the intended use of the product sold.
ƒSEC. 7. WAIVER AUTHORITY.
ƒ(a) IN GENERAL.—The President may by Executive
order waive the applicability of any provision of section
3 to a person or entity if the President determines that the
waiver is necessary to protect the national security interests
of the United States. The President shall, not later than
15 days after making such determination, submit a report
to the committees referred to in subsection (c) that includes
the factual basis upon which such determination was made.
The report may be in classified format.
ƒ(b) WAIVERS
FOR
CERTAIN
CLASSES
OF
END
USERS.—The President may by Executive order waive the
licensing requirements of section 6 for specific classes of end
users identified as being eligible for receipt of encryption
commodities and software under license exception in section
740.17 of title 15, Code of Federal Regulations, as in effect
on July 17, 1999. The President shall, not later than 15
days after issuing such a waiver, submit a report to the
committees referred to in subsection (c) that includes the
factual basis upon which such waiver was made. The report
may be in classified format.
ƒ(c) COMMITTEES.—The committees referred to in
subsections (a) and (b) are the Committee on International
Relations, the Committee on Armed Services, and the Per-
manent Select Committee on Intelligence of the House of
Representatives, and the Committee on Foreign Relations,
the Committee on Armed Services, and the Select Committee
on Intelligence of the Senate.
ƒSEC. 8. ENCRYPTION INDUSTRY AND INFORMATION SECU-
RITY BOARD.
ƒ(a) ENCRYPTION INDUSTRY AND INFORMATION SECU-
RITY BOARD ESTABLISHED.—There is hereby established an
Encryption Industry and Information Security Board. The
Board shall undertake an advisory role for the President
on the matter of foreign availability of encryption products.
ƒ(b) MEMBERSHIP.—(1) The Board shall be composed
of 12 members, as follows:
ƒ(A) The Secretary, or the Secretary’s designee.
ƒ(B) The Attorney General, or his or her des-
ignee.
ƒ(C) The Secretary of Defense, or his or her des-
ignee.
ƒ(D) The Director of Central Intelligence, or his
or her designee.
ƒ(E) The Director of the Federal Bureau of In-
vestigation, or his or her designee.
ƒ(F) The Special Assistant to the President for
National Security Affairs, or his or her designee, who
shall chair the Board.
ƒ(G) Six representatives from the private sector
who have expertise in the development, operation,
marketing, law, or public policy relating to informa-
tion security or technology. Members under this sub-
paragraph shall each serve for 5-year terms.
ƒ(2) The six private sector representatives described
in paragraph (1)(G) shall be appointed as follows:
ƒ(A) Two by the Speaker of the House of
Representatives.
ƒ(B) One by the Minority Leader of the
House of Representatives.
ƒ(C) Two by the Majority Leader of the
Senate.
ƒ(D) One by the Minority Leader of the
Senate.
ƒ(c) MEETINGS.—The Board shall meet at such times
and in such places as the Secretary may prescribe, but not
less frequently than every four months.
ƒ(d) FINDINGS AND RECOMMENDATIONS.—The chair
of the Board shall convey the findings and recommendations
of the Board to the President and to the Congress within
30 days after each meeting of the Board. The recommenda-
tions of the Board are not binding upon the President.
ƒ(e) LIMITATION.—The Board shall have no authority
to review any export determination made pursuant to this
Act.
ƒ(f) TERMINATION.—This section shall cease to be ef-
fective 10 years after the date of the enactment of this Act.
ƒSEC. 9. MARKET SHARE SURVEY.
ƒThe Secretary shall, at least once every 6 months,
conduct a market share survey of foreign markets for
encryption products. The Secretary shall publish the results
of the survey in the Federal Register. The publication shall
include an assessment of the market share of each foreign
encryption product in each market surveyed and a descrip-
tion of the general characteristics of each encryption prod-
uct.
ƒSEC. 10. DEFINITIONS.
ƒIn this Act:
ƒ(1) 
ENCRYPTION.—The 
term 
‘‘encryption’’
means the transformation or scrambling of data, for
the purpose of protecting such data, from plaintext to
an unreadable or incomprehensible format, regardless
of the techniques used for such transformation or
scrambling and regardless of the medium in which
such data occur or can be found.
ƒ(2) EXPORT AND EXPORTER.—The term ‘‘ex-
port’’ includes reexport, the term ‘‘exporter’’ includes
‘‘reexporter’’.
ƒ(3) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Commerce.≈
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as
the ‘‘Encryption for the National Interest Act’’.
(b) TABLE OF CONTENTS.—The table of con-
tents is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Statement of policy.
Sec. 3. Congressional findings.
TITLE I—DOMESTIC USES OF ENCRYPTION
Sec. 101. Definitions.
Sec. 102. Lawful use of encryption.
Sec. 103. Unlawful use of encryption.
TITLE II—GOVERNMENT PROCUREMENT
Sec. 201. Federal purchases of encryption products.
Sec. 202. Networks established with Federal funds.
Sec. 203. Government contract authority.
Sec. 204. Product labels.
Sec. 205. No private mandate.
Sec. 206. Exclusion.
TITLE III—EXPORTS OF ENCRYPTION
Sec. 301. Exports of encryption.
Sec. 302. License exception for certain encryption products.
Sec. 303. Discretionary authority.
Sec. 304. Expedited review authority.
Sec. 305. Encryption licenses required.
Sec. 306. Encryption Industry and Information Security Board.
TITLE IV—LIABILITY LIMITATIONS
Sec. 401. Compliance with court order.
Sec. 402. Compliance defense.
Sec. 403. Good faith defense.
TITLE V—INTERNATIONAL AGREEMENTS
Sec. 501. Sense of Congress.
Sec. 502. Failure to negotiate.
Sec. 503. Report to Congress.
TITLE VI—MISCELLANEOUS PROVISIONS
Sec. 601. Effect on law enforcement activities.
Sec. 602. Interpretation.
Sec. 603. FBI technical support.
Sec. 604. Severability.
SEC. 2. STATEMENT OF POLICY.
It is the policy of the United States to pro-
tect public computer networks through the use
of strong encryption technology, to promote the
export of encryption products developed and
manufactured in the United States, and to pre-
serve public safety and national security.
SEC. 3. CONGRESSIONAL FINDINGS.
The Congress finds the following:
(1) Information security technology,
encryption, is—
(A) fundamental to secure the flow
of intelligence information to national
policy makers;
(B) critical to the President and
national command authority of the
United States;
(C) necessary to the Secretary of
State for the development and execu-
tion of the foreign policy of the United
States;
(D) essential to the Secretary of
Defense’s responsibilities to ensure the
effectiveness of the Armed Forces of
the United States;
(E) invaluable to the protection of
the citizens of the United States from
fraud, theft, drug trafficking, child
pornography; kidnapping, and money
laundering; and
(F) basic to the protection of the
nation’s critical infrastructures, in-
cluding electrical grids, banking and
financial 
systems, 
telecommuni-
cations, water supplies, and transpor-
tation.
(2) The goal of any encryption legisla-
tion should be to enhance and promote
the global market strength of United
States encryption manufacturers, while
guaranteeing that national security and
public safety obligations of the Govern-
ment can still be accomplished.
(3) It is essential to the national secu-
rity interests of the United States that
United States encryption products domi-
nate the global market.
(4) Widespread use of unregulated
encryption products poses a significant
threat to the national security interests of
the United States.
(5) Leaving the national security and
public safety responsibilities of the Gov-
ernment to the marketplace alone is not
consistent with the obligations of the Gov-
ernment to protect the public safety and
to defend the Nation.
(6) In order for the United States posi-
tion in the global market to benefit the
national security interests of the United
States, it is imperative that the export of
encryption products be subject to a dy-
namic and constructive export control re-
gime.
(7) Export of commercial items are
best managed through a regulatory struc-
ture which has flexibility to address con-
stantly changing market conditions.
(8) Managing sensitive dual-use tech-
nologies, such as encryption products, is
challenging in any regulatory environ-
ment due to the difficulty in balancing
competing interests in national security,
public safety, privacy, fair competition
within the industry, and the dynamic na-
ture of the technology.
(9) There is a widespread perception
that the executive branch has not ade-
quately balanced the equal and com-
peting interests of national security, pub-
lic safety, privacy, and industry.
(10) There is a perception that the
current encryption export control policy
has done more to disadvantage United
States business interests than to promote
and protect national security and public
safety interests.
(11) A balance can and must be
achieved between industry interests, na-
tional security, law enforcement require-
ments, and privacy needs.
(12) A court order process should be
required for access to plaintext, where
and when available, and criminal and
civil penalties should be imposed for mis-
use of decryption information.
(13) Timely access to plaintext capa-
bility is—
(A) necessary to thwarting poten-
tial terrorist activities;
(B) extremely useful in the collec-
tion of foreign intelligence;
(C) indispensable to force protec-
tion requirements;
(D) critical to the investigation
and prosecution of criminals; and
(E) both technically and economi-
cally possible.
(14) The United States Government
should encourage the development of
those products that would provide a capa-
bility allowing law enforcement (Federal,
State, and local), with a court order only,
to gain timely access to the plaintext of ei-
ther stored data or data in transit.
(15) Unless law enforcement has the
benefit of such market encouragement,
drug 
traffickers, 
spies, 
child 
pornog-
raphers, pedophiles, kidnappers, terror-
ists, 
mobsters, 
weapons 
proliferators,
fraud schemers, and other criminals will
be able to use encryption software to pro-
tect their criminal activity and hinder the
criminal justice system.
(16) An effective regulatory approach
to manage the proliferation of encryption
products which have dual-use capabilities
must be maintained and greater con-
fidence in the ability of the executive
branch to preserve and promote the com-
petitive advantage of the United States
encryption industry in the global market
must be provided.
TITLE I—DOMESTIC USES OF
ENCRYPTION
SEC. 101. DEFINITIONS.
For purposes of this Act:
(1) ATTORNEY FOR THE GOVERNMENT.—
The term ‘‘attorney for the Government’’
has the meaning given such term in Rule
54(c) of the Federal Rules of Criminal
Procedure, and also includes any duly au-
thorized attorney of a State who is au-
thorized to prosecute criminal offenses
within such State.
(2) AUTHORIZED PARTY.—The term ‘‘au-
thorized party’’ means any person with
the legal authority to obtain decryption
information or plaintext of encrypted
data, including communications.
(3) COMMUNICATIONS.—The term ‘‘com-
munications’’ means any wire communica-
tions or electronic communications as
those terms are defined in paragraphs (1)
and (12) of section 2510 of title 18, United
States Code.
(4) COURT
OF
COMPETENT
JURISDIC-
TION.—The term ‘‘court of competent juris-
diction’’ means any court of the United
States organized under Article III of the
Constitution of the United States, the
court organized under the Foreign Intel-
ligence Surveillance Act of 1978 (50 U.S.C.
1801 et seq.), or a court of general crimi-
nal jurisdiction of a State authorized pur-
suant to the laws of such State to enter or-
ders authorizing searches and seizures.
(5) DATA NETWORK SERVICE PROVIDER.—
The term ‘‘data network service provider’’
means a person offering any service to the
general public that provides the users
thereof with the ability to transmit or re-
ceive data, including communications.
(6) 
DECRYPTION.—The 
term
‘‘decryption’’ means the retransformation
or unscrambling of encrypted data, in-
cluding communications, to its readable
plaintext version. To ‘‘decrypt’’ data, in-
cluding communications, is to perform
decryption.
(7) 
DECRYPTION
INFORMATION.—The
term ‘‘decryption information’’ means in-
formation or technology that enables one
to readily retransform or unscramble
encrypted data from its unreadable and
incomprehensible format to its readable
plaintext version.
(8) ELECTRONIC
STORAGE.—The term
‘‘electronic storage’’ has the meaning
given that term in section 2510(17) of title
18, United States Code.
(9) 
ENCRYPTION.—The 
term
‘‘encryption’’ means the transformation or
scrambling of data, including commu-
nications, 
from 
plaintext 
to 
an
unreadable or incomprehensible format,
regardless of the technique utilized for
such transformation or scrambling and
irrespective of the medium in which such
data, including communications, occur or
can be found, for the purposes of pro-
tecting the content of such data, includ-
ing communications. To ‘‘encrypt’’ data,
including communications, is to perform
encryption.
(10) ENCRYPTION
PRODUCT.—The term
‘‘encryption product’’ means any software,
technology, commodity, or mechanism,
that can be used to encrypt or decrypt or
has 
the 
capability 
of 
encrypting 
or
decrypting any data, including commu-
nications.
(11) FOREIGN AVAILABILITY.—The term
‘‘foreign availability’’ has the meaning ap-
plied to foreign availability of encryption
products subject to controls under the Ex-
port Administration Regulations, as in ef-
fect on July 1, 1999.
(12) GOVERNMENT.—The term ‘‘Govern-
ment’’ means the Government of the
United States and any agency or instru-
mentality thereof, or the government of
any State, and any of its political subdivi-
sions.
(13) INVESTIGATIVE
OR
LAW
ENFORCE-
MENT OFFICER.—The term ‘‘investigative or
law enforcement officer’’ has the meaning
given that term in section 2510(7) of title
18, United States Code.
(14) NATIONAL
SECURITY.—The term
‘‘national security’’ means the national
defense, intelligence, or foreign policy in-
terests of the United States.
(15) PLAINTEXT.—The term ‘‘plaintext’’
means the readable or comprehensible
format of that data, including commu-
nications, which has been encrypted.
(16) 
PLAINVOICE.—The 
term
‘‘plainvoice’’ means communication spe-
cific plaintext.
(17) SECRETARY.—The term ‘‘Secretary’’
means the Secretary of Commerce, unless
otherwise specifically identified.
(18) STATE.—The term ‘‘State’’ has the
meaning 
given 
that 
term 
in 
section
2510(3) of title 18, United States Code.