Germany Frees Crypto

[Dietrich Cerny]

Hi,
the following text is the official translation of  the "Eckpunkte der
deutschen Cryptopolitik" and their justification.
Regards
Dietrich Cerny


Key Elements of Germany's Encryption Policy

Introduction

Up to the early Nineties, programs and chips for the secure encryption of
messages were a relatively insignificant niche segment of the computer
industry. However, this niche segment has since gained substantial
importance for the economic and social development of the information
society as a whole. After all, "information" as a production factor is
increasingly becoming a coveted raw material. More effective protection of
this raw material can decide on the success or failure of 
businesses and thus on employment opportunities in the information age.
Today, this protection can only be effectively guaranteed by using powerful
cryptographic procedures. In any event, the efficiency of this technology
is today greater then ever before.

The encryption controversy in Germany

The encryption controversy revolves around the question as to whether and
to what extent the use of cryptographic procedures should be restricted by
law. This question has been the subject of  controversial debate in many
democratic industrial nations in recent years. In Germany, too, there has
been an intensive discussion involving the Federal Ministries with their
differing standpoints, the economy and numerous groups in society.

In October 1997, the Federal Cabinet adopted the "Progress Report of the
Federal Government - Info 2000: Germany's Way to an Information Society",
which contained a passage on encryption policy:

"It was agreed within the Federal Government to forgo the introduction in
this legislative term of a statutory regulation concerning the putting into
circulation and utilisation of encryption products and procedures, meaning
that the unrestricted freedom of the user as regards the selection and use
of encryption systems will remain unchanged. The Federal Government will
continue to closely monitor further developments in the field of
cryptography, particularly in the context of European and international
cooperation, and will initiate further measures for the implementation 
of its goals, if necessary".

However, the Federal Government has not yet adopted a binding and
unequivocal standpoint.

Cryptography and business interests

The markets for encryption products are today displaying high growth rates,
primarily because of the dynamic development of digital business
transactions. In addition to the traditional protection of confidentiality,
important fields of application for cryptographic systems today include,
for example, copyright protection, digital signatures and digital money.
Beyond this, cryptography is a cross-sectional technology which is
indispensable for the system architecture and development of 
complex electronic commerce applications. Consequently, far larger markets
are indirectly affected, e.g. those of telecommunication, on-line banking
or telemedicine.

Security standards of a kind that were mainly still the reserve of major
companies and government agencies a few years ago, because of the high
costs, have now also become affordable for medium-sized enterprises and
private households. Nevertheless, encryption products are currently still
not used to the necessary extent in Germany. This is often due to a lack of
the necessary IT security-consciousness, even though unauthorised spying,
manipulation or destruction of data can cause substantial economic damage.

German manufacturers of encryption products have good prospects for keeping
pace in the international competition for new markets, provided that the
framework conditions necessary in this context are guaranteed. In view of
the strategic importance of this sector, many leading industrial nations
are making a major effort to strengthen its economic and technical
efficiency in their own country.

Cryptography and security interests

The use of cryptographic procedures is extremely important for efficient
technical crime prevention. This applies both to guaranteeing the
authenticity and integrity of data traffic and to protecting
confidentiality.

On the other hand, this protection of confidentiality can favour criminals.
For example, it can be expected that the growing user-friendliness of
encryption products will result in their increasing spread in criminal
circles. This can pose problems for the criminal prosecution authorities.
Surveillance measures lawfully ordered by a judge must remain effective,
even if the target person protects the information in question by means of
a cryptographic procedure.

To date, the abuse of encryption technologies in Germany has not caused any
serious problems in the process of criminal prosecution. However, this fact
cannot be used to make a forecast for the future. Consequently, there is a
need to actively assess the impact of this technology in relation to the
interests of the criminal prosecution and security authorities in Germany
in an attempt to identify undesirable developments in such good time that
they can be effectively counteracted - on the basis of alternative
strategies, if necessary.

Based on the national debate to date and on international developments, the
Federal Government herewith adopts the following key elements for its
encryption policy:

1.      The Federal Government has no intention of restricting the free
availability of encryption products in Germany. It regards the use of
secure encryption as a decisive prerequisite for data protection for the
public, for the development of electronic business transactions and for the
protection of company secrets. The Federal Government will thus actively
support the spread of secure encryption in Germany. This particularly
includes the promotion of security-consciousness among the public, in the
economy and in the administration.

2.      It is the aim of the Federal Government to strengthen the
confidence of users in the security of encryption. It will therefore take
steps to establish a framework of confidence for secure encryption,
specifically by improving the verifiability of the security functions of
encryption products and recommending the use of tested products.

3.      For reasons relating to the security of the state, the economy and
society, the Federal Government considers it indispensable that German
manufacturers be capable of developing and manufacturing secure and
powerful encryption products. It will take steps to improve the
international competitiveness of this sector.

4.      The spread of powerful encryption procedures must not undermine the
statutory telecommunications surveillance authority of the criminal
prosecution and security authorities. The responsible Federal Ministries
will therefore continue to monitor developments closely and report on this
subject after two years. Independently of this, the Federal Government will
support the improvement of the technical competencies of the criminal
prosecution and security authorities within the framework of its
capabilities.

5.      The Federal Government attaches great importance to international
cooperation in the field of encryption policy. It advocates open standards
and interoperable systems developed in the market and will support the
strengthening of multilateral and bilateral cooperation.