Anguilla Cypherpunks Meeting

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ANGUILLA CYPHERPUNKS MEETING

The meeting will be held at my house, Sunday Oct 29.  My address is "Old
Ta".  Really, we have only a couple named streets in this country and no
street signs or addresses.  My area is called "Old Ta" because the Old
Water Tower was near me. :-) If you don't know where I live you are
probably off-island, and I can just pick you up at the airport.  You are
welcome to stay the week around the meeting (like Oct 25 to Nov 1 or some
such). 

Anguilla is a fantastic little country in the Caribbean with wonderful
beaches and no taxes.  I have been living here for almost a year now and
just love it.  Right now American Airlines has some specials on that make
flying to Anguilla a bit cheaper than normal.  For example: 

   New York to Anguilla $365.95 rt
   San Jose to Anguilla $574.95 rt

For these prices the tickets must be purchase by Oct 16th. 

Please let me know if you are coming so I will be sure to have enough
space.  If we get too many people we may need some airmattresses or
something.  It is warm here, so sleeping bags are not needed. 

If while you are outside the USA you want to write some software that uses
encryption and sell it worldwide, let me know.  I could put you up while
you wrote it and my company could sell it for share of the selling price. 
Let me know what you are thinking of and how long you think it would take. 

   --  Vince



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On Thu, 12 Oct 1995, Vincent Cate wrote:
[..] 

> If while you are outside the USA you want to write some software that uses
> encryption and sell it worldwide, let me know.  I could put you up while
> you wrote it and my company could sell it for share of the selling price. 
> Let me know what you are thinking of and how long you think it would take. 

Of course if you are a US person (citizen or green card holder) this is 
just as much a violation of the ITAR than if you did it from inside the US...

A. Michael Froomkin        | +1 (305) 284-4285; +1 (305) 284-6506 (fax)
Associate Professor of Law | 
U. Miami School of Law     | froomkin@law.miami.edu
P.O. Box 248087            | http://www.law.miami.edu/~froomkin
Coral Gables, FL 33124 USA | New address, but it's still just as hot here.

On Fri, 13 Oct 1995, Michael Froomkin wrote:
> On Thu, 12 Oct 1995, Vincent Cate wrote:
> > If while you are outside the USA you want to write some software that uses
> > encryption and sell it worldwide, let me know.  I could put you up while
> > you wrote it and my company could sell it for share of the selling price. 
> > Let me know what you are thinking of and how long you think it would take. 
> 
> Of course if you are a US person (citizen or green card holder) this is 
> just as much a violation of the ITAR than if you did it from inside the US...
> 
> A. Michael Froomkin        | +1 (305) 284-4285; +1 (305) 284-6506 (fax)
> Associate Professor of Law | 

Yes, I am still a US citizen, so far. 

The corporation I work for is a legal entity of Anguilla.  I would not
personally be selling it, the corporation would.  Do you think that is ok? 

What if I had a couple Anguillian friends form a corporation for this
purpose (buying encryption software written in Anguilla and selling it
internationally)?  No trouble yet, right?  What if the people who come and
write it are US citizens?  

I don't see how US law can cover corporations in other countries.

PS - it is good to CC me (as you did) as I only get cypherpunks-lite, and
so may not see a message, or it may be delayed. 

Thanks,

  --  Vince

On Fri, 13 Oct 1995, Vincent Cate wrote:

For your personal situation you *must* get competent legal advice.  
I.E. pay someone who makes it a point to stay more current in this stuff 
than I do.  I recommend Lee Tien, for example, or Ken Bass.  I bet Lee is 
less expensive :>.  This note is NOT legal advice, and may not be 
competent since it is research-free.  It would not be wise to make any 
important decisions on the basis of this note.

As a general matter, however, if you are a US person and give crypto to a 
foreign person (be it a real person or a corporation), then as a 
technical legal matter you are in violation of the ITAR. 

US law doesn't ordinarily cover non-us corporations abroad (but see some
anti-trust and money laundering rules), but the ITAR will cover any US
person (ie citizen or green card holder) who works for them or transacts
with them. 

Off the top of my head, I don't know whether the acquisition of totally
foreign-created crypto by a foreign corporation managed, owned or
controlled by a US person becomes an ITAR-controlled "export" when that 
crypto is sold to a non-us person.  I would, however, want a good legal 
opinion before I exposed myself to the risk as I could sure make a good 
argument that the ITAR reached that far.  All of this is without 
prejudice to the issue of whether the ITAR are constitutional...

As for the specific fact situation you describe below, which I understand
to be a little different from the one described above, I'm afraid you
would have to discuss this in some detail with a lawyer; I'm sorry I can't
be more help. 

> 
> On Fri, 13 Oct 1995, Michael Froomkin wrote:
> > On Thu, 12 Oct 1995, Vincent Cate wrote:
> > > If while you are outside the USA you want to write some software that uses
> > > encryption and sell it worldwide, let me know.  I could put you up while
> > > you wrote it and my company could sell it for share of the selling price. 
> > > Let me know what you are thinking of and how long you think it would take. 
> > 
> > Of course if you are a US person (citizen or green card holder) this is 
> > just as much a violation of the ITAR than if you did it from inside the US...
> 
> Yes, I am still a US citizen, so far. 
> 
> The corporation I work for is a legal entity of Anguilla.  I would not
> personally be selling it, the corporation would.  Do you think that is ok? 
> 
> What if I had a couple Anguillian friends form a corporation for this
> purpose (buying encryption software written in Anguilla and selling it
> internationally)?  No trouble yet, right?  What if the people who come and
> write it are US citizens?  
> 
> I don't see how US law can cover corporations in other countries.
> 
> PS - it is good to CC me (as you did) as I only get cypherpunks-lite, and
> so may not see a message, or it may be delayed. 
> 

A. Michael Froomkin        | +1 (305) 284-4285; +1 (305) 284-6506 (fax)
Associate Professor of Law | 
U. Miami School of Law     | froomkin@law.miami.edu
P.O. Box 248087            | http://www.law.miami.edu/~froomkin
Coral Gables, FL 33124 USA | New address, but it's still just as hot here.

Vincent Cate writes:
>On Fri, 13 Oct 1995, Michael Froomkin wrote:
>> On Thu, 12 Oct 1995, Vincent Cate wrote:
>> > If while you are outside the USA you want to write some software that uses
>> > encryption and sell it worldwide, let me know.  I could put you up while
>> > you wrote it and my company could sell it for share of the selling price. 
>> > Let me know what you are thinking of and how long you think it would take.
>> 
>> Of course if you are a US person (citizen or green card holder) this is 
>> just as much a violation of the ITAR than if you did it from inside the US..
>.
>> 
>> A. Michael Froomkin        | +1 (305) 284-4285; +1 (305) 284-6506 (fax)
>> Associate Professor of Law | 
>
>Yes, I am still a US citizen, so far. 
>
>The corporation I work for is a legal entity of Anguilla.  I would not
>personally be selling it, the corporation would.  Do you think that is ok? 

The violation is in the *export*, not the sale.  You're suggestion is
that the US person developing software outside the country evades ITAR.
Mr Froomkin suggests otherwise.  His credentials seem sounder, but I,
for one, would like to hear his reasoning.

If it's true that ITAR makes such behavior illegal, then ITAR not only
inhibits freedom of speech, it inhibits freedom of *thought*.

On Fri, 13 Oct 1995, Michael Froomkin wrote:

> > If while you are outside the USA you want to write some software that uses
> > encryption and sell it worldwide, let me know.  I could put you up while
> > you wrote it and my company could sell it for share of the selling price. 
> > Let me know what you are thinking of and how long you think it would take. 
> 
> Of course if you are a US person (citizen or green card holder) this is 
> just as much a violation of the ITAR than if you did it from inside the US...

Really? I thought except for incomes taxes, US laws only apply in American
territory as opposed to applying to American people wherever they are (as 
I heard Germany's does).

What if you were a dual citizen (US/Canada in my case)?

On Fri, 13 Oct 1995 s1018954@aix2.uottawa.ca wrote:
> What if you were a dual citizen (US/Canada in my case)?
> 
Get competent legal advice.  I.e. don't ask me.  As a general rule, I 
know of two principles that might be relevant here: 1) US and Canada 
rules on export control tend to be very similar; 2) lots of US rules 
apply to US persons abroad, not just income tax.  See, e.g., the Trading 
With the Enemy Act.

A. Michael Froomkin        | +1 (305) 284-4285; +1 (305) 284-6506 (fax)
Associate Professor of Law | 
U. Miami School of Law     | froomkin@law.miami.edu
P.O. Box 248087            | http://www.law.miami.edu/~froomkin
Coral Gables, FL 33124 USA | New address, but it's still just as hot here.

As a Canadian, I am often astounded by the attempts of the United States 
government to apply American law extraterritorially. A case in point is 
the trade embargo with Cuba. Canada does not recognize this embargo and 
trades freely with Cuba. Several American corporations faced legal 
sanction in the U.S. for the actions of their Canadian subsiduries. I 
don't remember the details but can get references if anyone requires it.
ITAR regulations may be enforced by the U.S. government on the parent 
corporations if history is any judge.
In any case, these regulations are impeding standards development and the 
use of secure cryptography for commerce on the internet. As for key 
escrow and and other schemes to dilute security, no foreign company is 
going to use such 'bastardized' products, knowing that the U.S. 
government may be listening in. Especially since your president is 
talking about commercial spying.
Regards, 

Tim Philp
Brantford, Ontario
Canada

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On Fri, 13 Oct 1995 s1018954@aix2.uottawa.ca wrote:

> 
> 
> On Fri, 13 Oct 1995, Michael Froomkin wrote:
> 
> > > If while you are outside the USA you want to write some software that uses
> > > encryption and sell it worldwide, let me know.  I could put you up while
> > > you wrote it and my company could sell it for share of the selling price. 
> > > Let me know what you are thinking of and how long you think it would take. 
> > 
> > Of course if you are a US person (citizen or green card holder) this is 
> > just as much a violation of the ITAR than if you did it from inside the US...
> 
> Really? I thought except for incomes taxes, US laws only apply in American
> territory as opposed to applying to American people wherever they are (as 
> I heard Germany's does).
> 
> What if you were a dual citizen (US/Canada in my case)?
>

On Fri, 13 Oct 1995 s1018954@aix2.uottawa.ca wrote:

> Really? I thought except for incomes taxes, US laws only apply in American
> territory as opposed to applying to American people wherever they are (as 
> I heard Germany's does).

The US has frequently tried to reach citizens anywhere in the world.  
Thus when private ownership of gold was banned in the US in the '30s, the 
regs outlawed possession of gold by Americans anywhere on earth.

Likewise, when the Feds proposed federal licensing of space launch 
vehicles a few years ago, they proposed outlawing unlicensed space 
launches by Americans anywhere on earth.

Obviously, nuclear technology was controlled so that it was illegal for 
Americans who had nuclear skills to work in nuclear power plants in 
certain countries.

Such laws and regulations usually apply to US citizens (whether resident 
or not) and non-citizens who are US residents.

> What if you were a dual citizen (US/Canada in my case)?

Dual citizens are bound by the laws of both countries.

DCF

Michael Froomkin writes:

: On Thu, 12 Oct 1995, Vincent Cate wrote:
: [..] 
: 
: > If while you are outside the USA you want to write some software that uses
: > encryption and sell it worldwide, let me know.  I could put you up while
: > you wrote it and my company could sell it for share of the selling price. 
: > Let me know what you are thinking of and how long you think it would take. 
: 
: Of course if you are a US person (citizen or green card holder) this is 
: just as much a violation of the ITAR than if you did it from inside the US...

And of course if you are not a US person this is just as much a
violation of the ITAR as if you were a US person.  The ITAR does not
exempt foreign persons from its requirements, though it does make them
ineligible to get a license permitting them to disclose their software
to other foreigners (or even to themselves).

--
Peter D. Junger--Case Western Reserve University Law School--Cleveland, OH
Internet:  junger@pdj2-ra.f-remote.cwru.edu    junger@samsara.law.cwru.edu