STATEMENT OF REP. BOB GOODLATTE (R-VA)
BEFORE THE HOUSE PERMANENT SELECT COMMITTEE ON INTELLIGENCE
ON H.R. 850,
THE SECURITY AND FREEDOM THROUGH ENCRYPTION SAFE) ACT OF 1999

Wednesday, June 9, 1999

Mr. Chairman, I would like to thank you for holding today's important hearing on legislation I have introduced -- H.R. 850, the Security And Freedom through Encryption (SAFE) Act of 1999 -- to encourage the use of strong encryption.

This much-needed, bipartisan legislation, which currently has 257 cosponsors, including a majority of the Republican and Democratic leadership, accomplishes several important goals. First, it aids law enforcement by preventing piracy and white-collar crime on the Internet. Several studies over the past few years have demonstrated that the theft of proprietary business information costs American industry hundreds of billions of dollars each year. The use of strong encryption to protect financial transactions and information would prevent this theft from occurring. With the speed of transactions and communications on the Internet, law enforcement cannot stop thieves and criminal hackers by waiting to react until after the fact.

Only by allowing the use of strong encryption, not only domestically but internationally as well, can we hope to make the Internet a safe and secure environment. As the National Research Council's Committee on National Cryptography Policy concluded, "If cryptography can protect the trade secrets and proprietary information of businesses and thereby reduce economic espionage (which it can), it also supports in a most important manner the job of law enforcement. If cryptography can help protect nationally critical information systems and networks against unauthorized penetration (which it can), it also supports the national security of the United States."

Third, with the availability of strong encryption overseas and on the Internet, our export controls only serve to tie the hands of American business. Due in large part to these export controls, foreign companies are winning an increasing number of contracts by telling prospective clients that American encryption products are weak and inferior, which is robbing our economy of jobs and revenue. In fact, one noted study found that failure to address the current export restrictions by the year 2000 will cost American industry $60 billion and 200,000 jobs. Under the current system, America is surrendering our dominance of the global marketplace.

The SAFE Act remedies this situation by allowing the export of generally available American-made encryption products after a 15-day, one-time technical review. Additionally, the bill allows custom-designed encryption products to be exported, after the same review period, if they are commercially available overseas and will not be used for military or terrorist purposes.

Removing these export barriers will free U.S. industry to remain the leader in software, hardware, and Internet development. And by allowing our computer industry to market the highest technology with the strongest security features available, America will lead the way into the 21 st century Information Age.

This bipartisan legislation enjoys the support of members and organizations across the entire spectrum of ideological and political beliefs. The SAFE Act enjoys this support not only because it is a common-sense approach to- solving a serious problem, but also because ordinary Americans' privacy and security is being assaulted by this Administration.

Amazingly enough, the Administration wants to mandate a back door into peoples' computer systems in order to access their private communications. In fact, the Administration has stated that if people do not "voluntarily" create this back door, it may seek legislation forcing them to give the government access to their information, by mandating a "key recovery" system requiring people to give the keys to decode their communications to a government-approved third party. This is the technological equivalent of mandating that the government be given a key to every home in America.

The Administration is proposing an Industrial Age solution to an Information Age problem. The SAFE Act, on the other hand, prevents the Administration from placing roadblocks on the information superhighway by prohibiting the government from mandating a back door into the computer systems of private citizens and businesses. Additionally, the SAFE Act ensures that all Americans have the right to choose any security system to protect their confidential information.

I would also like to note that H.R. 850 does not completely eliminate export controls on encryption products. The bill allows the President to prohibit encryption exports to terrorist states and impose embargoes, and allows the Secretary of Commerce to stop the export of specific products to specific individuals or organizations in specific countries if there is substantial evidence that they will be used for military or terrorist purposes. And as NSA Deputy Director Barbara McNamara recently testified before the Commerce Committee, "end uses and end users are what we use to determine whether a product should be exported -- this is official government policy."