________________________________________ ) PHILIP R. KARN, JR. ) ) Plaintiff, ) ) Civ. A No. 95-1812 (CRR) v. ) ) (Judge Charles R. Richey) U.S. DEPARTMENT OF STATE, and ) THOMAS E. MCNAMARA, Assistant ) Secretary of State, Bureau of ) Political-Military Affairs, in ) his official capacity. ) ) Defendants. ) ) ________________________________________)
1. I am the Director of the Office of Defense Trade Controls ("ODTC"), Bureau of Political-Military Affairs, United States Department of State. I have held this position since November 27, 1994. This declaration will describe the State Department's actions in connection with the commodity jurisdiction request of Philip Karn at issue in this case. The statements made herein are based on my personal knowledge obtained in the course of my official duties. For convenience, the relevant statutory and regulatory background will be described first.
2. The Arms Export Control Act ("AECA") authorizes the President to control the import and export of defense articles and defense services, and to designate such items on the United States Munitions List ("USML"). 22 U.S.C. § 2778(a)(1). Except as otherwise provided by implementing regulations, no defense article or defense service so designated by the President may be imported or exported without a license. 22 U.S.C. § 2278(b)(2).
3. The AECA is implemented by the International Traffic in Arms Regulations ("ITAR"). 22 C.F.R. Subchapter M, Parts 120 to 130. Tab 1. Part 121 of the ITAR contains the USML. Pursuant to Executive Order 11958, the President delegated to the Secretary of State the President's authority pertaining to the export of defense articles and services. 22 C.F.R. § 120.1(a). (The designation of defense articles and services by the Secretary of State, and changes in such designations, must have the concurrence of the Secretary of Defense.) The Secretary of State's authority in this areas was, in turn, re-delegated to the (now) Under Secretary for Arms Control and International Security Affairs. The ITAR is primarily administered by the Director of the Office of Defense Trade Controls, Bureau of Political- Military Affairs. 22 C.F.R. § 120.1(a).
4. The ITAR contains a procedure -- the commodity jurisdiction procedure -- to be used when doubt exists as to whether a particular article or service is included on the USML. 22 C.F.R. § 120.4. Upon written request, the Office of Defense Trade Controls of the State Department will provide such a determination. 22 C.F.R. § 120.4(a). A person may appeal such a determination to the Deputy Assistant Secretary of State for Export Controls, and then to the Assistant Secretary of State for Political-Military Affairs. The commodity jurisdiction procedure was added to the ITAR in order to assist the public, and is further described in the attached publications issued by the Office of Defense Trade Controls. Tab 2.
5. The commodity jurisdiction procedure is not used for determining whether a particular article may or may not be exported. Rather, it merely determines whether it is on the USML and, therefore, that its exportation is controlled pursuant to the AECA and the ITAR. In fact, many items on the USML are approved for exportation to countries around the world. The licensing decision takes into account a combination of factors, including the sensitivity of the technology, the identity of the end-user, the declared end-use of the commodity, and foreign policy and national security interests.
6. The category of the United States Munitions List relevant to this case is set forth at 22 C.F.R. § 121.1 XIII, entitled "Auxiliary Military Equipment." Under Category XIII(b), the USML lists as defense articles "Information Security Systems and equipment, cryptographic devices, software, and components specifically designed or modified therefor, including:
(1) Cryptographic (including key management) systems, equipment, assemblies, modules, integrated circuits, components or software with the capability of maintaining secrecy or confidentiality of information or information systems, except cryptographic equipment and software [as described under Category XIII(b)]."
7. Under Category XIII(b), products that are limited to performing certain cryptographic functions other than data confidentiality are not under USML control. An example of a product not controlled under the USML is a "data authentication" product, which is intended to ensure that no alteration of a text has taken place in its transmission, or to authenticate the actual individuals involved in the transaction. See 22 C.F.R. § 121.1, XIII(b)(l)(vi). Common examples of this function are a computer password or an identification number used to prevent unauthorized access to a bank account. In addition, certain cryptographic products that are limited to use for banking or money transactions are also not controlled by the USML. See 22 C.F.R. § 121.1, XIII(b)(l)(ii). Examples of such products include point-of-sale terminals (e.g., cash registers) and banking automatic teller machines.
8. In addition, on April 27, 1992, the State Department announced a procedure for the expeditious transfer of jurisdiction from the State Department to the Commerce Department for "mass market" software products with encryption that meet specified criteria. See 22 C.F.R. §121.1, XIII(b)(l)(ix) note. Mass market software is computer software available to the public via sales from stock at retail selling points by means of over- the-counter transactions, mail order transactions, or telephone call transactions. It must also meet specific encryption criteria. The definition and criteria for determining which software falls into this category are described at Tab 3.
9. Cryptographic devices and software are included on the United States Munitions List in order to help prevent such items from falling into dangerous hands, and then being deployed against the interests of the United States and its friends and allies. Throughout history, governments of all nations have relied on intelligence information to cope with wars and other international crises. For example, the ability of the United States and its allies in World War II to break German "ENIGMA" and Japanese "PURPLE" coded communications of the axis forces was critical in shortening the war and saving lives. When U.S. armed forces are deployed, gathering intelligence information on the activities of hostile forces is critical to ensuring the effective accomplishment of their mission with minimal loss of life. The uncontrolled availability abroad of cryptographic devices and software would hinder the United States' ability to gather foreign intelligence on national security and foreign policy matters. See Declaration of William P. Crowell, Deputy Director, National Security Agency ¶ 4. The government's ability to place appropriate controls on powerful cryptography is, therefore, critical to the national security interests of the United States. It is for these reasons that the United States, through the ITAR, controls the exportation of cryptographic devices and software.
10. By letter dated February 12, 1994, Mr. Karn submitted to the State Department a commodity jurisdiction request for the book Applied Cryptography by Bruce Schneier. Tab 4.
11. By letter dated March 2, 1994, the Office of Defense Trade Controls responded to Mr. Karn's CJ request, indicating that the book is not subject to the licensing jurisdiction of the Department of State because it is in the public domain. Tab 5. As stated therein, this determination did not extend to the two disks containing source code that the book references and that are available from the author.
12. By letter dated March 9, 1994, Mr. Karn submitted a second commodity jurisdiction request for a diskette containing source codes for data encryption that are printed in Appendix Five of the Applied Cryptography book. Tab 6.
13. Mr. Karn later provided the government a copy of the source code diskette at issue, as requested by the National Security Agency. Tab 7.
14. By letter dated April 19, 1994, Mr. Karn inquired as to the status of his CJ request. Tab 8.
15. By letter dated May 11, 1994, the Department of State, Office of Defense Trade Controls, responded to Mr. Karn's second CJ request, indicating that the source code diskette is subject to the licensing jurisdiction of the Department of State. Tab 9. The Department indicated that the diskette is designated as a defense article under Category XIII(b)(1) of the USML and that a license from ODTC was required prior to its export.
16. By letter dated June 10, 1994, Mr. Karn appealed the second CJ determination concerning the source code diskette to Deputy Assistant Secretary of State, Dr. Martha Harris. Tab 10.
17. On June 30, 1994, Dr. Harris met with representatives for Mr. Karn (attorneys Thomas Cooper and Kenneth Bass) to discuss Mr. Karn's appeal.
18. By letter dated October 7, 1994, Deputy Assistant Secretary Harris decided Mr. Karn's appeal and upheld the CJ determination made by ODTC. Tab 11. In this appeal determination, the State Department again concluded that the source code diskette is covered by Category XIII(b)(1) of the USML and subject to the export licensing jurisdiction of the State Department.
19. By letter dated December 5, 1994, Mr. Karn appealed Dr. Harris's determination to the Assistant Secretary of State for Political-Military Affairs, Thomas E. McNamara. Tab 12.
20. On February 28, 1995, Assistant Secretary McNamara met with representatives for Mr. Karn (attorneys Thomas Cooper and Kenneth Bass) to discuss Mr. Karn's appeal.
21. By letter dated March 16, 1995, Mr. Karn made an additional submission to the State Department in support of his appeal. Tab 13.
22. By letter dated June 13, 1995, the Assistant Secretary decided Mr. Karn's appeal, affirmed the decision made by Deputy Assistant Secretary Harris, and upheld the CJ determination made by ODTC. Tab 14. In this appeal determination, Assistant Secretary McNamara concluded that the source code diskette is covered by Category XIII(b)(1) of the USML and subject to the export licensing jurisdiction of the State Department.
23. By letter dated July 19, 1995, Mr. Karn responded to Assistant Secretary McNamara's determination. Tab 15.
24. On matters involving cryptographic devices and software, the National Security Agency ("NSA") provides to the State Department, on behalf of the Department of Defense, a technical evaluation of the commodity at issue. See Declaration of William P. Crowell, Deputy Director of the National Security Agency.
I declare under penalty of perjury that the foregoing is true and correct.
WILLIAM J. LOWELL