export restictions and investments

How do the US export restrictions affect investments into non-US crypto
companies? Is it legal for US private persons or companies to invest money
into companies developing strong crypto applications for example in
Europe? 

Since Sun bought the Russian Elvis+ company it seems to be Ok, just wanted
to check if there are any other opinions. Does anyone know of any other
non-US companies that have received US investments, or venture capital or
whatever?

Jyri Kaljundi
jk@stallion.ee
AS Stallion Ltd
http://www.stallion.ee/

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In <Pine.GSO.3.95.971118144118.21511I-100000@nebula>, on 11/18/97 
   at 02:44 PM, Jyri Kaljundi <jk@stallion.ee> said:

>How do the US export restrictions affect investments into non-US crypto
>companies? Is it legal for US private persons or companies to invest
>money into companies developing strong crypto applications for example in
>Europe? 

>Since Sun bought the Russian Elvis+ company it seems to be Ok, just
>wanted to check if there are any other opinions. Does anyone know of any
>other non-US companies that have received US investments, or venture
>capital or whatever?

AFAIK there is no restrictions on US citizens investing in foreign
companies. The only restrictions that I know of deal with the exchange of
crypto technical information (IE a US company can not buy into a foreign
company and then ship their crypto through them.) All crypto sales done by
the foreign company must be developed independently of the US company.

- -- 
- ---------------------------------------------------------------
William H. Geiger III  http://users.invweb.net/~whgiii
Geiger Consulting    Cooking With Warp 4.0

Author of E-Secure - PGP Front End for MR/2 Ice
PGP & MR/2 the only way for secure e-mail.
OS/2 PGP 2.6.3a at: http://users.invweb.net/~whgiii/pgpmr2.html                        
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At 5:44 AM -0700 11/18/97, Jyri Kaljundi wrote:
>How do the US export restrictions affect investments into non-US crypto
>companies? Is it legal for US private persons or companies to invest money
>into companies developing strong crypto applications for example in
>Europe?
>


Until recently it was legal for U.S. folks to invest at they saw fit,
modulo that they could not invest in Cuba, Yemen, N. Korea, Eastasia,
Oceania, and other such Enemies of the People.

And a U.S. company could not export expertise to a foreign site to avoid
the export laws (ITARS, now EARs). Thus, RSA could not send Rivest and
others to Estonia to develop s/w to bypass U.S. export laws. (In a sense,
Rivest is non-exportable.)

All this may be changing, for the worse.

The Anti-Terrorism Act of 1995 made _financial_ support of some list of
organizations illegal. This list was finally published, and includes a few
dozen "terrorist" organizations.

This has been interpreted by many to mean that charitable donations to one
of the listed groups, the Irish Republican Army, for example, could be a
crime.

Will some of these offshore crypto and software companies be placed on this
list? Will this make investment in these companies a crime under the
Anti-Terrorism Act?

I believe this will happen. Maybe not next year, but within five years.


--Tim May

The Feds have shown their hand: they want a ban on domestic cryptography
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
ComSec 3DES:   408-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
Higher Power: 2^2,976,221   | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."

Tim May writes:
>At 5:44 AM -0700 11/18/97, Jyri Kaljundi wrote:
>>How do the US export restrictions affect investments into non-US crypto
>>companies? Is it legal for US private persons or companies to invest money
>>into companies developing strong crypto applications for example in
>>Europe?
>
>And a U.S. company could not export expertise to a foreign site to avoid
>the export laws (ITARS, now EARs). Thus, RSA could not send Rivest and
>others to Estonia to develop s/w to bypass U.S. export laws. (In a sense,
>Rivest is non-exportable.)
 
There are also special rules about "weapons of
mass destruction" in the Wassenaar Arrangement
rules, and also I think in other US regulations.

These make interesting reading -- any form of aid
to someone developing nuclear weapons, chemical
weapons, or biological weapons is forbidden. That
aid can be giving them money, expertise, or even
technical documentation. Has anyone at Sun ever
sent a Java manual to a pharmaceutical company
outside the US? Hmmm.

Of course crypto is not currently classed as a
weapon of mass destruction, but if there was an
electronic terrorist attack on the entire US
telephone system it could easily make people
think about changing that. And in the meantime the
list of chemicals mentioned above is sufficiently
broad that almost anyone could be technically
guilty of something.

(not normally very paranoid)
Greg.

Greg Rose               INTERNET: ggr@qualcomm.com
QUALCOMM Australia      VOICE:  +61-2-9743 4646   FAX: +61-2-9736 3262
6 Kingston Avenue       http://people.qualcomm.com/ggr/ 
Mortlake NSW 2137       B5 DF 66 95 89 68 1F C8  EF 29 FA 27 F2 2A 94 8F

Greg Rose wrote:
> Of course crypto is not currently classed as a
> weapon of mass destruction

Hmmm ... the EEC/UK regs on WMD have specific things to say about
crypto, and definitely restrict crypto export (at least in some
circumstances - naturally, the whole thing is horrifically complex and
no-one is about to explain it).

Cheers,

Ben.

-- 
Ben Laurie            |Phone: +44 (181) 735 0686|Apache Group member
Freelance Consultant  |Fax:   +44 (181) 735 0689|http://www.apache.org
and Technical Director|Email: ben@algroup.co.uk |Apache-SSL author
A.L. Digital Ltd,     |http://www.algroup.co.uk/Apache-SSL
London, England.      |"Apache: TDG" http://www.ora.com/catalog/apache

On Tue, 18 Nov 1997, Jyri Kaljundi wrote:

> 
> 
> How do the US export restrictions affect investments into non-US crypto
> companies?

They don't.

> Is it legal for US private persons or companies to invest money
> into companies developing strong crypto applications for example in
> Europe? 

It is legal. For now.

-- Lucky Green <shamrock@cypherpunks.to> PGP v5 encrypted email preferred.
   "Tonga? Where the hell is Tonga? They have Cypherpunks there?"