US government forces European nations into encryption retreat

The US government has won a victory in the international battle over encryption exports.

In a shock development, 33 countries, including the UK and most of Europe, have extended a military treaty on software control to include commercial, off-the-shelf packages.

Until now, the US's strong export controls were criticised by much of Europe, on the grounds that they were a barrier to ecommerce. But the signatories to yesterday's agreement in Vienna include the UK, Germany, Spain, Sweden and Switzerland.

The treaty states that software vendors of off-the-shelf products which contain encryption stronger than 64bit will require an export licence from their home country. Mr Weicke, senior assistant at the Wassenaar Secretariat, warned Silicon.com: "Governments will have full authority to deny vendors a licence."

Martha Bennett, VP European Research at Giga Information, said: "This bombshell flies in the face of commitments made to the OECD. It is potentially very bad news for ecommerce in general and European software vendors in particular. I can only - grudgingly - congratulate the US for having finally found a forum that will listen to it."

Whereas the UK was represented by Customs and DTI officials at October's OECD summit in Ottawa, the Wassenaar Arrangement was signed by the Foreign Office. No Foreign Office officials were available for comment.

Mike Usher, analyst at Indicii Salus, was surprised at the news. "This seems like a retrograde step," he told Silicon.com. "Most EU countries already require export licences, but we were expecting these to be relaxed. The forces of law and order have prevailed over commerce." Usher explained that it takes around eight weeks to get an export licence, and under the new laws, this will be by no means guaranteed."

The Arrangement is a post-Cold War treaty, which aims to control trade in weapons and encrypted software that could be used by terrorists.

An official statement said: "The amendments include ? the modernisation of encryption controls to keep pace with developing technology and electronic commerce." Weicke explained: "When we first set up the Arrangement, few commercial products supported strong encryption. We are simply extending it to encompass new technologies."