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Encryption Technology Limits Eased

September 16, 1999

WASHINGTON (AP) _ The Clinton administration is relaxing exports on computer encryption technology in a decision seen as a victory for the high-technology industry.

Administration officials, particularly Attorney General Janet Reno and FBI Director Louis Freeh, have warned that easing controls on data- and voice-scrambling technology would hamper efforts to track down terrorists and other criminals.

But the high-tech industry has long argued that U.S. rules were binding their hands in a competitive market.

Reno was joining National Security Council and Pentagon officials, as well as Commerce Secretary William Daley, in announcing the decision at the White House late this afternoon. A White House official said restrictions on the sale of encryption technology would be removed.

The official, speaking on condition of anonymity, said national security concerns would be addressed in the new, simplified rules allowing computer-makers to export encryption software and hardware products.

``This is a great leap forward,″ Dan Scheinman, senior vice president of legal and government affairs at Cisco Systems Inc., a big maker of networking gear in San Jose, Calif., told The Wall Street Journal, which first reported the decision today.

``Based on our current understanding, the industry can now compete on equal footing with our foreign competitors,″ he said.

The high-tech officials have complained that current Commerce Department rules are complicated and inconsistent. U.S. companies can sell encryption products to foreign banks and financial institutions, but not to telecommunications companies.

But even under the eased restrictions, companies will be required to submit detailed lists of their buyers, and they will be barred from selling in Iran, Iraq, Libya, Syria, Sudan, North Korea and Cuba.

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