CHAPTER 3

THE DIRECTION AND IMPACT OF ENCRYPTION

3.1      The direction

3.1.1      The ability to sketch confidently the direction of encryption would be a very marketable talent in the IT industry. Few are prepared to be expansive in their predictions, but some trends or tendencies have emerged. On one point all seem agreed - when personal computers are sold with standard software packages which offer a pull-down encryption facility, there will be wide use of encryption. There are plenty of encryption systems and applications available commercially and in the public domain. The volume has increased significantly over the past three years but not the variety. Commercial and private interest has principally been in the data storage area, with limited incursion into computer to computer communications. Criminal intelligence from law enforcement agencies overseas indicates the larger narcotics suppliers are using such encrypted links.

3.1.2      Likely developments over the next few years? Cryptography in modems, currently restricted by export restrictions; financial smart-cards with complete encryption which will defy transaction tracking; a continuing trend from encryption software programs to hardware-based systems; and always more speed. In the same period, communications will continue to become faster and cheaper. Relaxation of United States export controls would see systems with quality algorithms and long keys surge on to the market. There is little doubt the combination of these developments will see a major slow-down in the 'reading' capacity of the Sigint community for a period. How long that period may be and how it may be overcome are issues to be discussed in a framework of more sensitivity than the nature of this review permits.

3.1.3      And then there is quantum cryptography. Some argue it is the next wave, others dismiss it as fantasy. Gilles Brassard spoke on the subject at a cryptanalytical conference organised by the Queensland University of Technology in July 1995. He said quantum cryptography harnesses Heisenberg's uncertainty principle from quantum mechanics to allow two parties who have never met and who share no secret information beforehand to communicate in absolute secrecy under the nose of an adversary, regardless of her computing power. This is achieved by the exchange of very tenuous signals that consist on the average of one-tenth of one photon per pulse. Prototypes have been built that work over a distance of ten kilometres of optical fibre. 20 The optimists suggest commercial application is 15-20 years away, the sceptics argue it is light years

3.1.4      The short judgement of likely encryption developments may be summed up in three words which are an unintended parody of the Olympic motto: stronger, faster, cheaper.

3.2      On Law enforcement and national security

3.2.1      There is already considerable evidence of encryption being used in the areas of organised crime, narcotics, pornography, illegal gaming for storing data. Criminal intelligence indicates the larger narcotics syndicates overseas already employ encrypted computer links (e-mail and telnet), but very few communications applications have been detected in Australia.

3.2.2      'Serious' criminal elements are reported to have moved rapidly from analogue to digital mobile systems as soon as GSM became available. 21   Prior to that time, there is considerable anecdotal evidence that analogue telephones were being purchased, used once and discarded as a countering tactic to law enforcement. More recent practice is for criminals to carry a supply of SIM cards which, when changed, alter the characteristics or signature of the telephone. Examples were given to the Review of suspects having 30-40 SIM cards on their person when arrested, the highest figure quoted was 140, and of a firm in Sydney which will post SIM cards on request, providing only a credit card reference is given.

3.2.3      The telephone system is being used by criminal elements to send data from point to point and these exchanges are sometimes encrypted. The Review was given virtually no indication of voice communications being encrypted, though as early as 1991, an Australian company was importing voice encryption for PSTN circuits. 22 Considerable concern about hacking and phreaking was evinced, and evidence to support that concern, including attacks on law enforcement agencies own data bases. While the expected security rules that there should be no PSTN connection with the data bases apply, the reality is back-doors can be engineered by those with intimate knowledge of the systems. These activities are, however, outside the Terms of Reference of this Review.

3.2.4      Australian law enforcement agencies have not experienced difficulty in securing warrants to search and seize the stored data of suspects, but have found increasing difficulty in accessing this material in readable form. They advised no statutory or other power exists to compel people to disclose information against the principle of non self-incrimination. Some possibilities will be discussed later in the report. 23

3.2.5      In a speech in early February, 1996 an American academic, prominent on law and order issues, said:

3.2.6      Such an analysis of the medium-term future could be seen as much advocacy of the American model of key escrow as a depiction of an environment where such a model would offer attraction.

3.2.7      As the assessment is likely to be recycled, because of the weight accorded Dr Denning's views in the encryption debate, it has to be said it reflects either sudden and unreported change in the American scene or an exuberant use of the subjunctive tense. Only eight months earlier, in April 1994, Vice Admiral John M McConnell, Director of the National Security Agency, told the United States Senate's Judiciary Committee's Sub-Committee on Technology and the Law his agency's continuous monitoring of communications worldwide showed little was being encrypted. 25

3.2.8      A speech given by Louis Freeh, Director of the FBI, in late 1995 has been relied on by American conservative advocates to buttress their point of view. 26 He argued encryption should be viewed as a public safety issue, noting the Bureau was 'increasingly' being 'impeded' in its mission, not just in communications but data storage as well. He cited a terrorist case based in the Philippines which involved a plan to blow up a United States airliner as well as a plan to assassinate the Pope, a computer hacker and a child pornographer. There has been no public reference to new cases - surprising if 12 months ago the FBI was being impeded from performing its functions.

3.2.9      Despite an understandable concern at what might be, the indications are that the current United States experience is not significantly different to Australia's - a small proportionate incidence of personal computers and associated digital storage utilising encryption or password protection but the trend line moving upward in only a slight way from a low base. The encryption involved ranging from the relatively unsophisticated through to DES.

3.2.10      National statistics are not available for Australia but partial figures and the impression of those work-in. in the technical areas of law enforcement indicate we remain, fortunately, yet some distance from Denning's vision of Armageddon.

3.3      The Statistical Vacuum

3.3.1      Regrettably, many judgements in a Review such as this must rely on anecdotal evidence. There is no reliable statistical data and the same privation will limit future related inquiries and affect, if not flaw, policy development. There is no requirement on carriers to report the take-up rate of services they market, the shift from one sector to another and the obligations of service providers are unclear. Similarly with suspected computer and communications offences, where reporting is patently uneven and often deliberately avoided.

3.3.2      Consequently, whether addressing the take-up rate of a service, the incidence of hacking or phreaking, or extortion on the threat of disabling computer systems, opinion can only be based on inference, anecdote and intuition. There is no central repository of reliable statistical information, a situation not improved by the reduction, through budgetary constraints in some areas, of the resources available for law enforcement to play a proactive role in this area.

3.3.3      The London Sunday Times articles detailing 'sting' attacks on financial institutions appeared early in this Review process. 27 They prompted a range of observations, albeit mostly anecdotal or hearsay, suggesting such attacks may not be as rare or geographically distant as the Australian community might wish. Law enforcement agencies acknowledged that institutions and corporations do not believe those responsible will be identified, let alone their assets recovered. The experience of the Sumitomo Corporation in Japan early in the Review period was a salutary reminder of the accuracy of this perception. Sumitomo admitted to its shareholders major fraud had taken place but had been stopped. The shareholders and the stock exchange exacted savage retribution for the confession.

3.3.4      The potential loss of public confidence, with the consequent perception of possible inability to meet commercial obligations, is central to financial institutions' reluctance to report major criminal activity. It was apparent to the Review that financial institutions are as restrictive in their internal communication as they are tacitum externally. An independent statutory body, funded by government, with a legislated code of confidentiality covering mandatory reporting to it and its own reporting arrangements to the parliament, operating under oversight of the Auditor-General, and independent of any external influences would be a sensible repository for the statistical data required by government and a source of advice and guidance to the corporate and commercial world. It would be able to undertake analysis of the data received, alert public and private sectors to activity trends and act as an expert witness in court proceedings.

3.3.5      Such a role would fit a body like AUSCERT, were it to be funded by the Commonwealth, placed under a strict regime of confidentiality, vouchsafed by the Auditor-General and guaranteed independence. 28 Its American equivalent is funded by the Department of Defense. The Department of Communications and the Arts commissioned a consultant to look at AUSCERT and the recommendations have now been enacted. The impact of that review on its functions should be able to be evaluated by mid-1997 when the envisaged role for AUSCERT or a similar body should be addressed by the proposed inter-departmental committee on cryptography.

3.4      Policy Uncertainty

3.4.1      While normally unhelpful to meet a question with a question, to address encryption technologies from a public policy point of view one first has to answer a question that is both philosophical and practical. As we develop the Global Information Infrastructure (GII) who should control it? The carriers, service providers, government, the people who use it or some amalgam of a number of these? Put another way, the question asks who should control data in the GII. Without data protection legislation in place, is the carrier prevented from acting at will with the data entrusted to networks. A traditional public policy view would argue government regulation and restraint of processes affecting civil rights and privacy produce more equitable outcomes. When governments fail in that role or, the people, at least in democracies, may proceed to remove those governments. To vest the responsibility with the carriers or service providers, those participating for profit, would expose a novel dilemma for the citizen - how does one 'throw out' a carrier or service provider judged to be abusing one's privacy or civil rights? The answer that one should shift to an alternate presumes availability and suitability, neither of which may be provided. The 'amalgam proposal' envisages governments picking up citizens' concerns, providing a framework of some sort within which carriers and providers would operate and regulate themselves.

3.4.2      At the international level, Australia is playing a significant role in the development of draft guidelines on cryptography, which will complement earlier guidelines on privacy and security of information. These should provide the international framework, to the central tenets of which it is hoped member countries would commit themselves. The process of guideline development has been measured, as the issue of cryptography policy opens for redefinition the citizen's relationship to the state and the role to be accorded governments within that relationship. National experience and expectations are very different and time is required to focus on trans-national principles. That the eye of some has been turned more to international arrangements they would wish to see in place has not helped a process which must work from first principles, formulate national policy on that basis and then move to bilateral and multilateral agreements.

3.4.3      The Australian Government's online industry election statement identified private commerce as the driver of innovation and investment in new online services. It proposed the establishment of an Information Policy Task Force (IPTF) to examine various policy issues and report to the Goveniment. 29 Meantime, many different committees and working groups are tasked with examining aspects of on-line services, electronic commerce, encryption, smart- cards and electronic cash and the daughter of Campbell 30 inquiry will pick up all of these and many more besides. These various bodies embrace, among others, the Attorney-General's Department, the Department of Communication and the Arts, the Department of Defence, the Department of Finance, the Department of Industry, Science and Tourism and a number of agencies. That is not surprising as elements of cryptography touch their functions. What is surprising is the uneven level of representation which some of those review groups attract. A formally established inter-departmental committee (IDC) would seem a more sensible and effective means of policy coordination and development than current arrangements. If established, the appropriate IDC representation would be at Branch Head level.

3.4.4      There is a need for one department to have the clear responsibility for cryptography policy and to coordinate the multi-faceted development of government policies which involve cryptographic applications. It would not seem sensible for the Department of Defence to assume this policy function. One of its portfolio organisations, the Defence Signals Directorate (DSD), is already tasked by government with the collection, production and dissemination of signals intelligence and 'to advise the Government on all matters pertaining to communications security and computer security'. 31 A role not confined solely to situations where national security could be adversely affected but also embracing sensitive official information requiring protection for privacy, financial or other reasons. 32  Defence's framework, however, is inextricably linked with sensitive and classified applications, primarily for its own and diplomatic purposes - instanced by its required alertness to dual use applications and global proliferation of cryptography. This would appear to make Defence a less than obvious choice for the role in question.

3.4.5      The Treasury and the Department of Finance have obvious interests in the whole field of electronic commerce, but cryptography is a discrete element of that issue and not a principal policy interest. The Department of Communications and the Arts has policy responsibility for broadband services, telecommunications and multimedia, but again cryptography stands a little apart from these. The Department of Industry, Science and Tourism approaches the issue from a developmental and export point of view, rather than a policy one. Embracing the interests of law enforcement, security, privacy, commercial law, intellectual property and protective security policy, the Attorney-General's Department may be seen as a preferred option to house the policy responsibility and chair the IDC. There is a need for Ministers urgently to address this issue and for it to be determined.

3.4.6      There would seem little doubt that when the major software manufacturers make available encryption applications, a majority of the world's computer users will access them. That time was not announced when this Review commenced and yet Microsoft presaged such a development in July 1996.

3.4.7      The most obvious implication for governments facing the astonishing pace of development in the communications and information sectors and the easy private availability of strong encryption is the fiscal one: such a proportion of financial transactions and movements may take place via virtual banking arrangements in cyberspace that governments may face progressive revenue starvation. Only slightly behind is the implication for the delicate balance our society has reached between privacy, law enforcement and security interests. Firstly, there is some inherent tension when these issues are conjoined.

Secondly, it is not simply a question of setting an individual's right against society's rights, for we do not face here a static balance. All who live in community accept there has to be some trade-off, but that trade-off is not an unqualified one. There must be limits. It is a flawed approach to assume a small or episodic interest of the state should necessarily predominate over the privacy interests of the individual.

3.4.8      From a privacy point of view, cryptography offers welcome security to the individual (person or corporation) and the opportunity to place data, stored or in transmission, beyond the reach of those who may seek to ascertain their private or commercial affairs. The Government's online election policy supported the availability of strong encryption, the principle of informed consent and the centrality of personal privacy in our society. It recognised not all would use encryption for honest purposes but placed the onus on law enforcement and security agencies to justify any measures which should outweigh the social and economic consequences of the loss of personal privacy and commercial security. 33

3.4.9      The range of situations likely to confront law enforcement and security agencies is as wide as their statutory mandates, but particular focus has to be given to crimes such as kidnapping or other threats of violence directed against VIPs or internationally protected persons, terrorist situations, extortion involving significant threats to public safety and attacks on the institutions of the state.

3.5      Today's Problems for the Investigators

3.5.1      Encrypted stored data and packets of information wrapped in encryption applications before they are sent over the telephone already pose a problem for law enforcement. The power of complex algorithms is available at the click of a computer 'mouse', In short, 56-bit DES is commercially available and will not be decrypted by any law enforcement agency without the key being available. Even a cryptanalytical agency would find the process difficult and slow without the key.

3.5.2      There have been major advances in cryptography in recent years and significant increases in commercial involvement. Cryptanalysis, however, does not necessarily maintain a constant distance behind cryptography. The interval will vary and, without moving into any sensitive detail, it cannot be expected - on budgetary, personnel and capital equipment alone - that cryptanalytical facilities will always be able to 'crack' commercial and public domain forms of encryption.

3.5.3      Law enforcement agencies noted, with some chagrin, it is not the seizure of property which poses difficulty for them. The problem arises from an inability to force disclosure of encryption 'keys' where a person invokes the principle of non self-incrimination. This problem of information being put out of reach of other than specified persons has resource implications for ASIO, where accessing plans for acts of politically motivated violence or terrorist incidents is a central part of that agency's function. It will make both human source and technical targeting a more difficult exercise - and increased difficulty impacts on flexibility, responsiveness and financial outlays.

3.5.4      Law enforcement agencies recognise that to seek a password of those from whom property has been seized may, or will, be taken as an admission the particular encryption application has not or cannot be broken. They also accept many forms of encryption will not be broken or reverse engineered. The selection of which investigations deserve concentration will depend on intelligence and the availability of the requisite IT competence in the relevant agency. The Review was struck by the knowledge and expertise of specialists in the law enforcement agencies and in ASIO, but it was also palpably obvious their numbers are few. Investment in and retention of a corps of such people is an unavoidable choice for the management of those agencies. This is a matter which might, in structured and coordinated fashion, usefully come within the purview of the Inter-Agency Cryptography Forum discussed at paragraph 4.4.8.

3.6      The Imminent Challenge

3.6.1      Little evidence emerges of encrypted voice communications being employed by criminal elements, although ASIO noted foreign intelligence services had long adopted the practice. Great weight was placed by those law enforcement agencies consulted and ASIO on the tactical importance of real-time access to voice and data communications for the conduct of investigations and the collection of evidence. It was said, and examples were advanced to support the contention, that loss of this access would seriously impact on their investigative capability. The unique advantages of interception of communications are passivity, flexibility and the low risk of the endeavour, combined with immediacy of intelligence flow. Denied this tool, agencies would be forced to engage in a wider range of human source activities, for which the preparatory planning stage is quite long, which may entail considerable financial outlays and about which there would be a high degree of operational, bureaucratic and political risk.

3.6.2      It is clear secure encrypted communications are available now to the ordinary citizen with some computer literacy, the motivation to acquire the capability and the wish to communicate securely with like-minded and like- equipped people. Today, 'Smith' could use a commercial symmetric algorithm like IDEA, together with a 56-bit key producing strong cyphertext, to communicate with 'Jones', who, possessing the same algorithm and using a 56-bit key, would decrypt the message. Such a system is fast, a single key performs both the encryption and decryption function and any key number from a randomly generated pool may be used.

3.6.3      The exchange of the symmetrical keys discussed above might be performed with an asymmetrical algorithm using a pair of related but dissimilar keys, one of which is referred to as the private key and the other as the public key. The public key is then exchanged with all other parties with whom one wishes to communicate. Potentially such a key could be notified in a public directory and be accessed by all. To send a message to Jones, Smith uses a two stage process. In the first stage, he encrypts the symmetric key for the IDEA algorithm with Jones' public key (which is publicly available). In the second stage, Smith encrypts his message using IDEA with the symmetric key. Smith then sends the encrypted key and the encrypted message to Jones. On receipt of the two files, Jones performs the two-stage process in reverse. Firstly, she decrypts the symmetric key using her private key (which she alone knows) and uses this symmetric key with the IDEA algorithm to decrypt Smith's message.

3.6.4      Another level of strength is achieved by using separate 'session' keys for every message or series of messages. Automatic teller machines employs session keys which change with every transaction. A random source is used to generate, let us say, a 128-bit key which combined with IDEA produces a session key. That key is used to convert a message into cyphertext. But the key is also combined with RSA to produce an encrypted session key. 34 This is separately and first communicated to Jones and received in the 'start' compartment of the output file of her computer. When Smith sends his cyphertext message to Jones, she can decrypt it by using the specially encrypted session key which is now available to her. Such a system employs both RSA and IDEA and separate sessional keys.

3.6.5      Even if a law enforcement agency was to execute a search warrant against premises where Smith's computer was located and already had a copy of his public key, it would be extremely unlikely to be able to obtain a copy of the session key. Ibis would not be retained in Smith's computer. Unless Smith volunteered to whom communication from his computer was directed or Jones was known to be the addressee of that communication and law enforcement was able to await receipt and decryption, little prospect exists to intercept satisfactorily such communications.

3.6.6      It is perfectly feasible, today, to incorporate all the features of the system outlined here into a 'black box' arrangement which, may be programmed to change the key, say, every 10-15 seconds or more often. Among a group drawn together in common purpose (such as a bunch of criminals or a terrorist cell) it would be relatively simple to have a personal computer function as the central processor, directing and forwarding traffic, incorporating a tamper-free heart to prevent interference by investigative agencies with its functions and a self-destruct feature which would erase all memory if tampering was detected.

3.6.7      Law enforcement and national security agencies assess the ability to trace calls (including call record information), with the assistance of carriers or service providers, to be of crucial importance to the performance of their functions and this capacity will become even more important if the ability to intercept calls should be lost or the content of communications was denied by use of an encryption application. These issues are currently being considered by Sub-Committee B of LEAC, as well as: the legislative authority on which requests for assistance by investigative agencies are based; the appropriate scope of the 'reasonableness' test to be applied (ie is it reasonable to confine the application of special call tracing measures to life-threatening situations); the criteria to be applied when seeking call tracing or call record information and issues of cost.

3.7      Towards Response Strategies

3.7.1      The above examples illustrate what may be done today and which may already be happening. That agencies have not reported wholesale examples is no comfort such practices are not being employed. Where the targets of law enforcement and national security observe strict communication security, the prospect of capturing communications at source or the point of dispatch may be made even more difficult.

3.7.2      The prospect of collecting data at point of receipt is reduced by the availability of services such as anonymous remailing, which can cause a message to bounce around the ether like a ball in a pin-ball machine. In Internet communications, random paths are taken by message packets and there is no guarantee constituent packets of the same message will travel by similar routes. Indeed, directions may be given to diverge the packets and some may be repeated. All that is certain is that they will arrive at their address and arrange themselves into correct order. The random routing of packets will not, of itself, cause a problem where a more conventional attack at, say, an Internet Service Providers' premises is possible. If the packets are encrypted, however, the problem remains.

3.7.3      So should one pray for a miracle? If patience is in short supply, perhaps so. Stephanie Perrin, a Canadian privacy specialist, made two telling points in her address to an OECD conference in Canberra early in 1996. 35 She publicly reaffirmed her faith in encryption technology but expressed concern at the people who may be driving it at any time. Her second point reflected the inherent tension in the public cryptographic debate - the available technology is of a kind and capacity unable to accommodate simultaneously both privacy and public safety needs, so striking a balance is like 'squaring the circle'.

3.7.4      There would appear to be no particular comfort to be gained by investing hope in a cryptanalytical breakthrough, to pole vault law enforcement and national security over the mounting obstacle of public and private cryptography. Such events occur at something like 15 year intervals, which would exclude them as a relevant factor in this Review, and the diversity and scale of the volume likely to be faced would daunt even wishful capacity.

3.7.5      As interception on the network proves progressively difficult and intractable to decryption and capture at the point of receipt is denied because direction and intention are both obscured, areas of encouraging research will require the coordinated resource commitment by the relevant agencies and cooperative dialogue with the IT industry, carriers and service providers. In fields where the level of cooperation bears a direct relationship to the trust felt, it would scarcely be sensible for the Commonwealth, the States and Territories all separately to approach these groups.

3.7.6      No argument for government to take public policy decisions on key management infrastructure, such as the US and UK have done, was put to the Review. In fact, the reverse was argued. There is a risk of marginalisation if actions are perceived as premature or ill-conceived.

Scanning through the measures of those countries whose governments have decided to 'do something' about cryptography, one is drawn to the conclusion that most efforts have already proved nugatory. The flexibility of encryption systems and applications, let alone the greater advantages which hardware based systems will offer, and the pace of technological development, will sideline the remainder.

3.7.7      There are matters of privacy, authentication, warranting provisions and the need to protect law enforcement and national security access and decryption methods which need to be addressed. Some are discussed elsewhere in the report. Others are outside the terms of this Review. The extension of the Privacy Act to the private sector is likely to prove a significant bulwark for personal data protection. Authentication has being addressed by the group brought together by Standards Australia to develop a draft Australian Standard for Public Key Authentication.

3.7.8      The banks, of course, have a long history, at least 15 years, of dealing with keys, of separating the purpose of different keys and of using them. There are Australian Standards for electronic interchanges which address encryption keys, authentication keys and privacy keys. Some interesting conceptual and technical work is being done by Professor Bill Caelli and some of his colleagues on the separation of signing and privacy keys, on notarising the purpose of keys and linking the certification and notarising processes to a form of registration which would permit access by law enforcement and security to the confidentiality key. While it is too early to determine if the proposal is viable from the technical and public acceptance points of view, there seems some basis for encouragement.

3.7.9      It is worth recalling, when expressions of grave anxiety are ventilated over any prospect the state, or its agencies, may be able to access one's signing key (authentication) that people already submit their biometric signature (fingerprints) to the state in certain circumstances. The community accepts that as reasonable. There is no doubt fingerprints are a unique means of identification, as personal as one's handwritten and witnessed signature, as specific as one's digital signature. The state enforces a process of fingerprinting in specific circumstances, it requires considerable numbers of the community to trust the third party with whom those fingerprints are lodged and the community interests itself very little in the terms under which they are held or the access which may be gained. Such a level of trust is given to that third party, the police service, that few believe copies may be made, printed on to latex gloves and one's biometric identity compromised in the commission of a criminal offence. The community appears to trust the integrity of the process and grievance mechanisms such as the Ombudsman's office which stand outside the process, though one suspects the particular sensitivity over possible access to digital signatures derives as much from ignorance and apprehension about the technology as lack of confidence in the integrity of the proposed custody system.

3.7.10      Strong argument was put to the Review, and accepted by many of those especially concerned with privacy, that those who employ encryption in connection with the planning for or execution of major criminal offences should be required to disclose the decryption key when lawful demand was made and failure to do so should incur significant penalty. There is attraction in the analogy between encryption used in the planning for or commission of a criminal offence and the use of a firearm in the commission of a criminal offence. For the use of a deadly weapon in connection with a criminal offence, the state normally seeks to exact a penalty proportionately greater than if the perpetrator had been unarmed. That the use of encryption in connection with a criminal offence be similarly viewed, where the intention to frustrate any lawful investigation would be assumed to be the primary motivation in such circumstances and any claimed preservation of confidentiality considered a secondary motive, is worthy of considerations The legislation and experience of those American states which have legislated in this manner might be instructive. 37

3.7.11      The standard instruments of search, discovery or demand should continue to prove useful for law enforcement agencies and the security service, but they may not always be adequate. Sometimes those served with requests may not be inclined to comply. Where they consider they risk incriminating themselves by doing so is an obvious example. Claims that the key is lost, held by another or simply not known may appear among the range of replies. Faced with non-compliance and the risk that delay may result in the alteration or destruction of data, little recourse is currently available to law enforcement agencies or prosecution authorities save seeking to have the person charged with contempt or the obstruction of justice. These avenues are likely to offer little satisfaction to the pursuit of the investigation. In the case of strong physical methods of storage, the application of effort and technology will normally overcome protective levels or barriers in relatively short order. Faced with unintelligible data, the absence of prospective access to the key through any independent entity, but actual and circumstantial evidence that persuades the encrypted data relates to the commission of serious criminal offence, the community is likely to support a case for forcing a criminal suspect or terrorist from behind the shield of encryption.

3.7.12      The National Crime Authority (NCA) and the Australian Securities Commission (ASC) both have powers requiring persons to answer questions or produce material. In the case of the NCA, the Chairman can, for instance, issue an instrument under the Act's section 28/29 powers provision requiring production of material or information where he/she considers such relates directly to the resolution of an investigation under reference. There would seem to be merit in affording the same power to the Commissioner of the AFP to require the production of the decryption key, information or material which would render intelligible data which has been intercepted or seized and cannot be 'read'.

3.7.13      A process of periodic review, stimulated also by operational circumstance or indications from the courts of actual or potential deficiency, would seem indicated.

Footnotes:

20 Gilles Brassard of Universite de Montreal and the University of Wollongong. 'Quantum Cryptography' from the proceedings of the Cryptography Policy and Algorithms Conference. Queensland University of Technology, 3-5 July 1995, p 59.

21 This view of agencies consulted is supported by a report published by Sub-Committee C of LEAC in August 1996 on The Use of GSM Services by Persons of Interest to Law Enforcement and Intelligence Agencies.

22 PSTN - Public Switched Telecommunications Network

23 Cf. paragraphs 3.7.10-11.

24 Dr Dorothy Denning, Professor of Computer Science, Faculty of Computer Science, Georgetown University, Washington DC, 'The Future of Cryptography' a presentation to the Joint Australian/OECD conference on Security, Privacy and Intellectual Property Protection in the Global Information Infrastructure, Canberra, 7-8 February, 1996

25 Reported in CQ magazine, issue of April 13, 1996, p 987.

26 Louis J Freeh, Director of the FBI, speech given to the International Cryptography Institute, Washington, DC, September 21, 1995. Available on the FBI Home Page.

27 The Sunday Times, London. June 2 and June 9, 1996.

28 The Australian Computer Emergency Response Team (AUSCERT) is an independent Internet security body based at Queensland University. Funded for a time by Telstra, when the latter assumed management control of the Internet from the Australian Vice Chancellors Committee, it survived for a period on the basis of temporary and emergency funding but is now moving (reaching?) to self-sufficiency.

29 Australia Online, op cit, pl0 et seq. See Annex B

30 A commonly used 'colloquial' title of the Financial Systems Inquiry. mentioned because one of its central terms of reference is to examine the impact of the implementation of many of the recommendations of the seminal Campbell committee which looked at deregulation of the financial markets.

31 Defence Signals Directorate, November 1986, Part I.

32 Ibid, Part iv(a) and IV(b).

33 Australia Online, op cit, p 16. Repeated at Annex B of this report.

34 RSA is one of two commonly used proprietary algorithms, the other being Diffie-Hellman. It is named after its designers, Rivest-Shamir-Adleman.

35 Ms Stephanie Perrin, Special Policy Advisor, Technology Impact Assessment, Industry Canada, from an address titled 'A Canadian Perspective' given to the Joint Australian/OECD Conference on Security, Privacy and Intellectual Property Protection in the Global Information Infrastructure, 7-8 February 1996, Canberra.

36 The National Research Council of the US recommended in its study of US cryptography policy at 5.4 'Congress should seriously consider legislation that would impose criminal penalties on the use of encrypted communications in interstate commerce with the intent to commit a federal crime.'

37 The bill introduced into the US Senate by Senator Leahy in March 1996 (and supported by [then] Senator Robert Dole, is cited as the 'Encrypted Communications Privacy Act of 1996'. It contained the following provisions: "s. 2804 Unlawful use of encryption to obstruct justice. Whoever wilfully endeavours by means of encryption to obstruct, impede or prevent the communication of information in furtherance of a felony which may be prosecuted in a court of the United States, to an investigative or law enforcement officer shall - (1) in the case of a first conviction, be sentenced to imprisonment for not more than 5 years, fined under this title, or both, or (2) in the case of a second or subsequent conviction, be sentenced to imprisonment for not more than 10 years, funded under this title or both. The 104th Congress passed in its last days HR 3723, the National Information Infrastructure Protection Act of 1996. A section of the bill entitled "Use of Certain Technology to Facilitate Criminal Conduct' requires presentencing reports to include a statement whether the defendant used encryption which use could result in an 'obstruction of justice' increase in jail time under Federal Sentencing Guidelines.



Chapter 4