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Discussion Document on Cryptography

InternetNZ Discussion Document (Cryptography) - 1998.

It is currently against the law for New Zealand companies to export strong cryptography, i.e. the wherewithal to use strong codes to protect messages and information, without obtaining a license from the Government for each individual sale. This restriction has proved completely ineffective in keeping strong cryptography out of "the wrong hands" and is significantly hindering the growth of electronic commerce which would offer great opportunities to New Zealanders. The international agreement under which we control strong cryptography export is currently up for renegotiation. The Internet Society of New Zealand is urging the New Zealand Government to push for its liberalisation.

Wassenaar Arrangement

Like most Western nations, New Zealand is signatory to the Wassenaar Arrangement, which is mostly about controlling the spread of weapons of mass destruction. Those who argue that strong cryptography is rightly covered by Wassenaar do so on the grounds of global security, implying that they consider it necessary for their governments to be able to decode all messages or computer files.

They will also point out that Wassenaar does not prohibit export, merely require a licensing regime. However, while the overhead of seeking a licence for the sale of, say, a $20m fighter aircraft would be insignificant, it is insupportable in the case of a $200 cryptography package.

Cryptography & Wassenaar

The usefulness of codes extends far beyond any potential military application. Strong cryptography is required to generate confidentiality on the internet to the level necessary for open electronic commerce, and for the protection of medical records and other personal information. Without the widespread use of strong cryptography by companies the Internet will not reach its full potential of being able to break down the barriers of distance hindering New Zealand from fully open trade.

Strong cryptography is already widespread and freely available on the Internet. It is used by many individuals to guarantee the privacy of their communications, but its "grey" status due to export restrictions means that most companies are not happy to base products and services on it. In fact, due to a quirk in the Wassenaar Arrangement export of cryptography from New Zealand is unrestricted provided it is done over the Internet. This makes an ass both of Wassenaar and of New Zealand law.

The applicability of the Wassenaar Arrangement to cryptography is thus far more effective in hindering world trade than it is in keeping codes out of enemy hands.

The solution is not to broaden Wassenaar or its enabling regulation in New Zealand, but to recognise the fact that anyone who wants it has by now got strong cryptography and to remove the restrictions on its spread.

Electronic Commerce

By legitimising the transmission of cryptography between companies and their customers this would facilitate the organic growth of electronic commerce on the Internet, from which all New Zealanders stand to gain. It would also open world markets to New Zealander cryptographers.

Wassenaar Renegotiation

The Wassenaar Arrangement is shortly to be renegotiated. The Internet Society of New Zealand, on behalf of all Internet users and New Zealanders, urges the Government to press for the scope of the Wassenaar Arrangement to be reduced to cover the weapons it was designed to control, and to remove the tools of electronic commerce from its coverage.

The horse has already bolted. Are we going to let people ride it round the paddock and pretend it is still inside?

© 1998 The Internet Society of New Zealand

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