In Israel, the state regulates use of encryption items through the Order Governing the
Control of Commodities and Services (Engagement in Encryption Items) - 1974
(hereinafter "the Order" or the "Encryption Order"). In order to regulate engagement in
this field, the Ministry of Defense has instituted a system of control and licensing for items
of encryption.
The purpose of regulating engagement in items of encryption is to enable the Israeli
encryption industry - one of the most advanced in the world - to develop, produce, sell
and export its products while at the same time safeguarding the national security interests
of the State of Israel.
In applying the system of control and licensing of encryption items, every effort is made
to maintain a proper balance between the needs of the individual and the industry whilst
keeping the essential requirement of the State to maintain adequate control over the
dissemination of means of encryption in Israel and abroad.
Why does the State of Israel control engagement in commercial encryption?
Commercial encryption and related technologies are regarded in most countries as
"Dual Use" in nature and are therefore subject to control. This relates to technologies,
products and information which, though as a rule used for (commercial or private)
civilian purposes, can also be used for military and security purposes. There is always
the concern that in case such technologies fall into the wrong hands (states recognized
as supporting terrorism, terrorist organizations or criminal elements) they might be used
for harmful purposes.
The Ministry of Defense recognizes that commercial encryption developed by commercial
elements for commercial purposes is not a military product. For this reason, control
over such commercial encryption items is different than that relating to defense exports.
The amendment of the Encryption Order, amongst certain other things, excluded encryption
items from the Order of regulating Defense Exports. The definition of encryption items
as items of combat that come under the system of control over defense exports was
duly amended. Other countries also have similar regulations.
Enforcing the Controls
The Encryption Order provides for the establishment of an advisory committee on engagement in encryption items.
The advisory committee is chaired by a senior official of the Ministry of Defense, who is appointed by the Director-General. The chairman of the advisory committee is Mr. Eli Pincu, Director of the Department of Defense Export Controls (DDEC). A representative of the public (Dr. Oded Barkuz) serves on the advisory committee.
The advisory committee deliberates on issues of encryption control regulation & policy, and is authorized to present recommendations on these issues to the Director - General. The office within the Department of Defense Export Controls that deals with Encryption Control & regulation is headed by Mr. Michel Twito, who handles liaisons with the encryption industry, deals with all license requests as well as policy enforcement and outreach.
Encryption Control Reforms
Following the amendment of the Encryption Order and transfer of responsibility for
regulation of engagement in encryption items to the Ministry of Defense, several
reforms were instituted:
Authority over licensing and regulation was transferred from a military to a civilian
licensing authority - i.e. from the IDF to the Ministry of Defense.
.a
Commercial means of encryption were exempted from the Defense Export Order.
.b
Three categories of licenses for engagement in encryption were defined: a general
license, a special license and a restricted license. These different categories of
licenses are intended to provide particular solutions for different types of application.
.c
It was decided that the Director-General of the Ministry of Defense would have
authority to define an item of encryption as a "free means" and thereby exempt it from
further regulation.
.d
An advisory committee to the Director-General of the MOD was set up. Amongst its
members is a representative of the public.
.e
Furthermore, updated policy statements were announced :
A comprehensive Reform of Regulation over Commercial Encryption Export policy
was issued in November 1999.
.a
A new policy, including reform of controls within the State of Israel, including easing
of the restrictions pertaining to aspects such as use, import, and distribution within
Israel was announced in February 2000.
.b
An additional reform eased restrictions on importers of computer and communications
equipment incorporating commercial encryption items. This reform was introduced in
July 2001.
.c
Introduction of the new policy led to a substantial reduction in the number of applications
for export licenses, since following the reform, an exporter now has to apply for a license
to export a specific commercial encryption item only once a year, whereas in the past, he
had to apply separately for every sales transaction.
Categories of license and "free means"
Three categories of licenses for engaging in encryption items were determined:
A "Restricted License" - a license that imposes restrictions on engagement in
encryption items. These restrictions may also apply to permissible forms of
engagement in encryption items, or to the nature of permissible sales (e.g.
restriction on selling to certain countries and sectors). As a rule, a restricted
license is valid for one year.
A "Special License" - is a license for specific engagement; generally involving
sale to clients who do not fall under the restrictions imposed on an applicant for
a Restricted License.
As a rule, a special license is valid for one year.
A "General License" - a license for a particular encryption item which allows the
license-holder free use of that item (other than modifications or integration that
essentially create a new item for which a separate license is required). The sale
of such items of encryption is decontrolled and not subject to reporting procedures.
Such general licenses are issued with no time limit to their validity.
A "Free Means" - is a means of encryption for which a general license has been
granted or which the Director-General has declared to be decontrolled. Once an
encryption item is defined as a free means, it is free of the licensing restrictions.
A periodically revised list of encryption items which have been declared "decontrolled"
is published in the Official Gazette of the Government of Israel as well as on this website.
Legislation
The Legal Framework
The Order regarding regulating engagement in encryption items was issued in 1974 and
signed by the Minister of Defense in accordance with the Control of Commodities and
Services Law - 1957. A Declaration on control of means of encryption was attached to
the Order, affirming that engagement in encryption items is a service that is subject to control.
In 1998, the original Order was amended and under the amended Order, authority over
controlling encryption items was transferred from the Chief Communications Officer of the
IDF to the Director-General of the Ministry of Defense. The Order also includes a
comprehensive definition of the term 'engaging in encryption items' which inter alia includes:
development, production, integration, sale, import and export of encryption items.
Note: The granting of a license to engage in encryption items does not exempt the applicant
from the obligation to comply with any other legal requirement, including the need to obtain
other permits or licenses required under other legislation.
The application form consists of a check list enabling the applicant to obtain a license
for engagement in commercial encryption. The form is suitable for filing applications
for all types of engagement in commercial encryption. The particulars in each section
should be filled in and the document edited to fit the required activity in respect of
which the company seeks a license for engagement in encryption (the form may be
downloaded in RTF or PDF format).
As well as the application form, a declaration by the applicant for the license to engage
in commercial encryption should be sent to our office by registered mail and simultaneously
by fax to 03-6977499. In the declaration, the applicant affirms the validity of the details
given to the MOD in the application. The declaration has to be given only once: no repeat
declarations will be required with future applications.
Please attach to the filled in form a detailed technical document relating to the product /
encryption item for which the license is sought. (It is advisable to submit these documents
in a known format such as PDF, DOC or RTF).
The application form and the accompanying technical data may be sent by
e-mail to:
Michel Twito
Encryption Control Director
Department of Defense Export Controls (DDEC)
Israel Ministry of Defense
P.O.B. 7093
Hakirya
Tel-Aviv 61070
in case you wish to send the documents by courier, please make arrangements in advance
Tel. 972-3-6977458 / 9 .
Please note: Communications by e-mail with our unit are unprotected; therefore
transmission of information via e-mail by applicants will be at their sole discretion
and on their responsibility.
Confidentiality
The review of Encryption Items is performed pursuant to the authority of the
Director General of the Ministry of Defense in the framework of the Order
Regarding the Engagement in Encryption Items - 1974.
The information submitted by the applicant serves the purpose of the review of
the Encryption Items in the course of the licensing process. The review is
performed by a small team of authorized personnel acting under non-disclosure
obligations with regard to information provided.
License Renewal
A restricted license and a special license are generally valid for one year. When seeking
to renew a license, the following steps should be taken:
The license is issued for a specific encryption product or item; a thorough internal
examination should be conducted by the company to make sure there have been
no changes in the encryption components of the product, e.g. addition of new
algorithms, alteration of the lengths of the encryption key, changes to the encryption
interfaces or any other significant modification connected with use of encryption in
the product.
.a
If there has been no such alteration, application should be made to the MOD by
electronic mail, by fax or by letter using the following text: "I hereby apply for renewal
of the license to engage in encryption which was issued to our company (Name
of the Company) for the product (Name of product) on .... (the date that appears
on the license); Reference No. (the reference no./ that appears on the license)".
"I hereby declare that no modifications have been made to the encryption components
of the product as submitted to you for review at the time the license was issued."
.b
In case modifications to the encryption components of a product for which license
renewal is sought were made MOD must be informed of those changes. The revised
information should be detailed and comprehensive in technological terms. Therefore
the most convenient and most advisable way to do so is through submission of a
form of application for a new license to engage in encryption.
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