BIS Press Release on Revised Encryption Regulation

The Bureau of Industry and Security (BIS) issued the following press release this afternoon regarding the changes made to U.S. export controls on certain encryption items. A summary of the changes made by the new regulation and a link to the text of the Federal Register notice are found below.

BIS Updates Encryption Export Rule;
Revised Rule Streamlines Review Process, Enhances National Security

WASHINGTON - The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) today revised its rules regarding the export of most mass market electronic products that contain encryption functions and other encryption products.

“This revised rule enhances our national security and cuts red tape by eliminating the review of readily available encryption items, like cell phones and household appliances, and allows the Government to focus its resources on more sensitive encryption items,” Assistant Secretary of Commerce for Export Administration Kevin Wolf said.

The new rule ends the U.S. government’s 30-day technical review requirement to export most mass market and other types of encryption products. “Mass market” electronic products containing encryption include cell phones, laptops, and disk drives. Exporters and manufacturers of the encryption products may now self-classify the products and then export them without a license if they register on-line with BIS. BIS also requires that they submit an annual self-classification report. This rule is expected to decrease technical reviews by approximately 70 percent and semi-annual reporting by up to 85 percent.

The rule also extends the scope of License Exception ENC authorizations to most encryption technology exports, following a technical review. In addition, it adds a decontrol note for items that perform “ancillary” cryptography, which covers items such as games, robotics, business process automation, and other products that contain encryption capabilities but do not have communication, computing, networking or information security as a primary function.

“This rule is the first step in the President’s effort to fundamentally reform U.S. encryption export controls,” Assistant Secretary Wolf said. “The Administration will continue to review the encryption rules to further enhance national security and ensure the continued competitiveness of U.S. encryption products. This effort will include a review of the current controls on publicly available encryption software, integrated circuits with encryption functionality, high-speed routers, and other types of restricted encryption products.”