Fighting the tide

Compared to the US, Australia has a relatively enlightened position on cryptography. The Defence Signals Directorate clears many products that Uncle Sam would never allow. But our laws give an incredible amount of authority to the Defence Department.

Approval procedures are explained in a document entitled Australian Controls on the Export of Defence and Strategic Goods ( Regulations under the Customs Act create a list of prohibited exports known as the Defence and Strategic Goods List (DSGL). This list governs foreign trade in military equipment, nuclear materials and 10 categories of "dual use technology" -- items developed for business but which may have martial applications.

Currently, neither the Customs Act nor DSGL prohibit electronic software distribution. But Defence wants extended powers to keep encryption products off the Net -- even though security software is already available worldwide. Defence representative Robbie Costmeyer is leading an international push to control "intangible" software under the Wassenaar Arrangement, a treaty restraining global trade in military goods.

"Certainly I do have an intent and a wish to control the export of intangible technology," said Costmeyer. "What I'm objecting to is to have it go on the Net where anybody can download [it] and encrypt their communications."

Patrick Gunning, a senior associate with Mallesons Stephen Jaques in Sydney, believes regulating software online would require amendments to the Customs Act. Costmeyer admits as much: "It may require a change of legislation, and that won't be easy in the current climate."

That "current climate" is increasingly pro-cryptography. In May, Canberra launched the Gatekeeper strategy to setup a security and authentication framework for federal agencies. Victoria's Maxi project is even more ambitious, deploying strong cryptography for direct online access to a range of government services like change of address requests and paying government bills.

Labor Senator Kate Lundy vows to oppose any legislation that would further restrict encryption. "Subtle amendments can potentially impact an entire industry," she said. "The last thing Australia needs is to close off an opportunity that differentiates us from the US."

Indeed, Coalition policy at the 1996 election acknowledged the importance of cryptography for confident electronic commerce. "Heavy-handed attempts to ban strong encryption techniques will compromise commercial security, discouraging online service industries (particularly in the financial sector) from adopting Australia as a domicile," the Government's Online policy states.

"This would result in a substantial economic loss to the country."

-- Dan Tebbutt

NOTE: This version is as submitted and differs slightly from the published text. The edited version as it appeared in The Australian is not online.

This article was published in The Australian, Tuesday 14 July 1998, page 55.
Full text © copyright Dan Tebbutt.
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