by
Stewart Baker
sbaker@steptoe.com

December 1997

We have received additional information concerning the debate that is going on within the Administration over the extension of the "banking exception" for 128-bit encryption. As we previously reported, one position that is being taken is that the exception should be granted only to banks and financial institutions located in countries that subscribe to the recommendations of the Financial Action Task Force (FATF) (some 26 countries that include Europe, Australia and Japan).

Those who support a broader exception (primarily in the Commerce Department) are seeking information regarding exports that have been under existing licenses to financial institutions in non-FATF countries. They hope to argue that since such exports have been allowed in the past, and there have not been any problems with these exports, any rule that would restrict them in the future would be an unjustified rollback of existing policy.

This presents a opportunity for companies to influence the debate on exports of strong encryption to financial institutions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

For further information please contact L. Benjamin Ederington on Tel: +202-429-6411, fax: 202-429-3902 or E-mail: bedering@steptoe.com.