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French GAK

Wall Street Journal, October 20, 1997:

   French Proposal For Encryption Is Worrying EC 

   By Jennifer L. Schenker

   A proposed French law ensuring government access to
   corporate electronic communications is setting off alarm
   bells in the business community and on the European

   France, presenting the law as a liberalization of its
   current policy, is the only Western country that bans any
   domestic use of cryptography - technology that encodes data
   for protection against prying eyes. France also places
   strict controls on the export of encryption tools, a
   restriction imposed by certain other countries, including
   the U.S.

   The new rules, submitted to the European Commission on
   Thursday, allow businesses operating in France to encode
   their corporate secrets but require that keys to unlock the
   code be given to a French government-approved entity in
   which the majority of the capital or votes is retained by
   French nationals.

   Microsoft Corp., Netscape Communications Corp. and the
   Business Software Association have raised objections to the
   French proposal. The BSA represents major international
   software publishers and high-tech companies, including
   Novell Inc., Compaq Computer Corp., Apple Computer Inc. and
   Lotus, a unit of International Business Machines Corp. The
   proposal also requires companies selling products with
   embedded encryption software in France to reveal "source
   code" - the rough equivalent of asking Coke to reveal its
   secret formula. Some believe that such a key-recovery
   system would make it easier for competitors to gain access
   to a company's secrets.

   The BSA's European chapter is expected to release a public
   statement this week supporting the European Commission's
   decision earlier this month to reject the key-recovery
   approach to encryption, which is championed by both the
   U.S. and France.

   The commission, which will formally comment on the French
   proposal by month's end, is concerned partly because the
   French ownership requirements may violate internal market

   "I do not say this is the best system. It is the least bad
   in trying to find a balance between national-security
   interests, economic interests and the protection of
   personal privacy," said Gen. Jean-Louis Desvegnes, chief of
   France's Central Service for the Security of Information
   Systems, a civilian agency that reports directly to the
   French prime minister's office. He indicated that France
   might be flexible on the ownership requirements.