National Business Review
PO Box 1734
Auckland
Dear Editor,
I would like to address a claim made by the Ministry of Foreign Affairs and
Trade (MFAT) in last weeks NBR over the export of encryption software from New
Zealand. MFAT claim that they are required under the Wassenaar Agreement to
restrict the export of this technology. This is untrue. Most of the
signatories to this agreement place no restrictions on the distribution of
encryption software, and at least one country (Hungary) even has support for
the use of encryption written into its constitution. Several Scandinavian
countries (Finland, Norway, Sweden, and Denmark, all of them signatories to the
Wassenaar agreement) recently announced an international email security service
using freely exportable strong encryption. A spokesman for the Finnish
Ministry of Transport and Communications has called the debate on export
restrictions "funny to watch". One company which no doubt finds the situation
extremely amusing is DataFellows in Finland, who are currently selling their
encryption software in New Zealand while NZ companies are being blocked by MFAT
from sending equivalent software overseas. Unlike the NZ government, the
Finnish government is actively promoting this industry — DataFellows were last
year awarded the Finnish governments "most innovative company" award.
The Canadian government, one of the few countries which does try to enforce
some form of export controls due to its proximity to the US, ruled last year
that cryptlib was freely exportable without any need for permits to any country
except Libya, Angola, and Iraq. MFAT are aware of this ruling as I sent them
copies of the Canadian government documents many months ago.
It appears that MFAT's position is based on an antiquated outlook which regards
software to secure electronic commerce as some form of special military
technology, a position which might have been reasonable a few decades ago but
is totally out of touch with the modern use of computers and electronic
communications. In their October 1996 "Business File", MFAT claim that "New
Zealand… is helping to limit the spread of increasingly sophisticated military
technology and weapons of mass destruction". Whether mass-market commercial
software which protects financial transactions and medical records counts as
"sophisticated military technology" or "weapons of mass destruction" is unclear
(I suppose it's possible to beat someone to death with a floppy disk if you
were very determined, but that hardly qualifies as "mass destruction").
Finally, one of the goals of the Wassenaar agreement was to "not impede bona
fide civil transactions", which MFAT have certainly done, and are continuing to
do. In the meantime anyone with a credit card and phone, or the ability to
walk into a software store, can buy the same software overseas. Stopping New
Zealand companies from exporting widely available mass-market computer software
of this kind "because terrorists might use it" makes about as much sense as
stopping farmers from exporting beef and lamb "because terrorists might eat
it".
The issue of Management Technology Briefing included with last weeks NBR
reports on page 22 that there will be "a US$186 billion market in global
transactions by the year 2000", along with a comment that securing these
transactions — one of the goals cryptlib was designed for — remains a problem
area. Within the next few years the push towards electronic commerce will
become a veritable steamroller. By needlessly blocking the export of the
technology required to secure this market, MFAT is helping ensure that New
Zealand becomes part of the roadkill.
Yours Faithfully,
Peter Gutmann