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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: January 14, 2000

FROM: Barry McVay, CPCM

SUBJECT: Export Administration Regulations (EAR); Revisions to Encryption Items

SOURCE: Federal Register, January 14, 2000, Vol. 65, No. 10, page 2491

AGENCIES: Bureau of Export Administration (BXA), Department of Commerce

ACTION: Interim Final Rule

SYNOPSIS: BXA is amending the EAR to allow the export and reexport of any encryption commodity or software to individuals, commercial firms, and other non-government end-users in all destinations. Also, the revision allows exports and reexports of retail encryption commodities and software to all end-users in all destinations. Post-export reporting requirements are streamlined, and changes are made to reflect amendments to the Wassenaar Arrangement.

EDITOR'S NOTE: The EAR is under Title 15 of the Code of Federal Regulations, Commerce and Foreign Trade, under "Subtitle B, Regulations Relating to Commerce and Foreign Trade," "Chapter VII, Bureau of Export Administration, Department of Commerce," then "Subchapter C, Export Administration Regulations," as Parts 730 through 774.

DATES: The rule is effective January 14, 2000. Comments must be submitted on or before May 15, 2000.

ADDRESSES: Submit comments to Frank J. Ruggiero, Regulatory Policy Division, Bureau of Export Administration, Department of Commerce, P.O. Box 273, Washington, DC 20044.

FOR FURTHER INFORMATION CONTACT: James A. Lewis, Director, Office of Strategic Trade, 202-482-0092.

SUPPLEMENTAL INFORMATION: On September 16, 1999, the Clinton administration announced a new approach to U.S. encryption export control policy. This approach rests on three principles: (1) a technical review of encryption products in advance of sale; (2) a streamlined post-export reporting system; and (3) a process that permits the government to review exports of strong encryption to foreign governments. This interim final rule reflects the new approach, and implements various changes for encryption items made by the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies.

The key change is in EAR 740.17, Encryption Commodities and Software (ENC):

Various other changes are made throughout the EAR, such as the removal of Supplement No. 3 to EAR Part 740, License Exceptions, which listed countries eligible to receive certain encryption products, but is no longer necessary because such products are now eligible for export and reexport to all destinations.

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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