NEW POWERS IN PIPELINE TO SNOOP ON BUSINESS

[Ian Brown]

MAIL ON SUNDAY
March 8, 1998, Pg. 56

NEW POWERS IN PIPELINE TO SNOOP ON BUSINESS
By Matthew Fletcher

THE government is planning a 'snooper's charter' that will allow it to
eavesdrop on the secrets of big business.

It will cause uproar among banks, exporters, retailers and other big
companies that send their most sensitive information - contract details,
payments, business transactions and details of competitive tenders - via
encoded communications.

Companies are particularly concerned because an Anglo-American
agreement means that US intelligence services could also access
sensitive
information.

Government proposals, due to be announced shortly, will give Britain's
police agencies powers to read messages that have been deliberately
scrambled by companies to prevent them falling into rivals' hands.

In a move to beat terrorism and serious crime, they will have access to
all communications sent by companies or individuals via phones, fax
machines and email.

Department of Trade and Industry minister Barbara Roche is believed to
be keen to push proposals first mooted last year by the Conservative
government, which would license telecom or software companies selling
encryption services.

But as part of the licensing process she is also expected to require
that codes to unlock sensitive encrypted files be made available to law
enforcement agencies.

'It would be the equivalent of leaving your front door key with the
police in case they wanted to snoop around,' said James Gardner, a
spokesman for Demon Internet, the UK's largest Internet service
provider.

The proposals could deliver a death blow to business transactions over
the Internet in Britain and damage UK competitiveness.

Gardner added: 'Confidence in encryption is key to electronic commerce.
If the proposals are adopted as they stand, there is a grave danger that
businesses simply will not use the Net.' Stefek Zaba, principal engineer
at
Hewlett-Packard Research Laboratories in Bristol, said: 'The DTI's
proposals talk about tackling terrorist organisations and serious crime.
But the idea that criminals will use a government-approved scheme is
difficult to swallow.' Britain is already a signatory to a pact agreed
between the European Commission and the FBI in 1996.

This sets up common standards for makers of telecom equipment, making
it easier for intelligence agencies to tap emails and phone calls.

A draft convention is due to be debated later this month in Brussels to
give EU member countries new legal powers to exchange information
gleaned
from domestic telecommunications traffic.

Tony Bunyan of political watchdog body Statewatch said: 'Together, the
convention and the UK's encryption plans are setting up the potential
for
placing almost every activity under surveillance.' Financial Mail
reported
last week that businesses have voiced fears that some governments,
particularly America's, have used intelligence services to help
companies
win international contracts, especially in the defence industry.