Washington to end export ban on cipher code

The White House appeared set yesterday to announce proposals to lift a ban on the export of advanced software designed to scramble sensitive data transmitted between Internet users.

The announcement would end four years of often fractious debate between the Clinton administration, which has been anxious to curb the sale abroad of data-scrambling or encryption software, and the US computer industry, which has complained that the controls have lost it important markets.

As the Internet grows in importance, companies are increasingly using it to transmit information that they would also like to keep secret. The encryption software allows users to translate messages into code that will remain impenetrable to everyone except those to whom they are addressed.

The dilemma for the US government, however, is that such technology could also hand a formidable weapon to terrorists and international crime rings. With encryption, they could transmit information around the world without fear of discovery.

The deal expected to be offered in an executive order from President Bill Clinton would give the green light to US companies to export advanced encryption products. However, the companies would be obliged to ensure that the coding "keys" required for unscrambling data must be deposited with a third party where they could be available to police.

The keys, which would be surrendered only on production of a court order, could be of up to 56 computer "bits". Currently, US companies are only allowed to export much cruder encryption products for which the keys need be only up to 40 bits long. An experienced hacker with state-of-the-art equipment can crack 40-bit encryption in 12 minutes.

The White House considers the proposal a reasonable compromise between the needs of law enforcement and the concerns both of the computer industry itself and of right-to-privacy advocates. Several large computer companies, including IBM, are believed to support the plan.

"I think there are some companies who are not going to vomit all over this and there are some who will," an industry source said. "Some companies oppose any kind of key recovery system as a condition for exporting products."

A White House source told the New York Times: "It is going to take a while to persuade people that their data is safe under this system and that it protects privacy, and yet that we can use the system to trace terrorists or drug dealers."