Yesterday, the Bureau of Industry and Security (“BIS”) announced various amendments to the encryption rules. I realize that the encryption rules are a sprawling mess, scattered through various sections of the EAR and written in an incomprehensible jargon that sounds like they were translated into English from a Vulcan paraphrase of the original Sanskrit. I also realize that your eyes understandably glazed over when you saw the word “encryption.” So I’ll try to make this as painless and entertaining as possible.

Let’s start with the really big news. Croatia has been added to the list of Supplement 3 Countries! Woohoo! For those of you aren’t really excited about this, that is probably because you forgot that if you are not a Supp. 3 country, there is a 30 day waiting period after a review request has been filed before encryption items described in 740.17(b)(2) and (b)(3) such as source code and high-performance network equipment can be exported to that country. And if those items were going to government end users in  country not on the Supp. 3 list, a license was required. So, today was declared a national holiday in Croatia and papier-mâché effigies of key BIS officials were draped with garlands and paraded through town squares across the country.

While we’re on the subject of government end users, the amendments create a new kind of government end user — “less sensitive government end users.” These are government agencies that are the toughest of their kind and at which you can hurl the most frightening insults — say, “you cabal of pointy-headed bureaucrats!” — without hurting their feelings. No, I’m just kidding with you. “Less sensitive government end users” are government agencies that are less likely to use encryption for evil purposes, like museums, water treatment plants and census bureaus.

The reason for identifying “less sensitive government end users” is that high performance network infrastructure equipment used to require a license to go to any government on the Naughty List (i.e., not on the Supp. 3 Nice list). Now these items can be exported 30-days after a review request is filed provided that it’s a less sensitive government end user.

The best news I’ve saved for last.  No more encryption registration numbers!  For the 50 or so companies out there who still don’t have an ERN, you’re off the hook.  Annual self-classification reports will still have to be filed; and the new format for the report, which is detailed in an amended Supplement 8 to Part 742, incorporates some of the information that used to be required by the ERN application.

For a summary of the remaining changes, including a long-needed update of the performance parameters for high performance network infrastructure equipment subject to higher encryption controls, you can read this excellent summary, which is mostly clear and more or less written in English, helpfully provided by the nice people at BIS.


Copyright © 2016 Clif Burns. All Rights Reserved. 
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