July 22, 1997


<p>
Thomas C. Barbour, Esq.<br>
Office of the Chief Counsel<br>
Bureau of Export Administration<br>
Department of Commerce<br>
14th and Constitution Avenue, N.W., Room 3839<br>
Washington, D.C.  20230<br>

<p>
Re:	Commodity Classification Request for Contents (Z101908)<br>
	of Computer Diskette as described below

<p>Dear Mr. Barbour:

<p>This letter of explanation is with respect to the Commodity
Classification Request ("the Request") submitted on behalf of this
firm's client, Philip R. Karn, Jr. of San Diego, California.  The
subject of the Request is the contents of the computer diskette ("the
Diskette") which are described below.

<p>The purpose of the Request is to confirm our conclusion that the
information on the Diskette is not subject to the Export
Administration Regulations ("the EAR").  Specifically, on the basis of
the legal authority cited below, we request the following
classifications:

<ul>
<li>
The Diskette itself is properly classified under EAR 99; and 
 
<li>The contents of the Diskette are not subject to the EAR and may
be placed on a Website in the United States for worldwide distribution
without special access controls which would limit distribution to US
and Canadian persons.
 
</ul>

<p>We recognize that the Diskette includes source code for "strong"
encryption algorithms which might normally be treated as EI items, but
we rely on several arguments for seeking an exemption from export
controls for this particular item.  The information at issue is the
same source code that was published in the first edition of Applied
Cryptography ("the Book").  More specifically, the contents of the
Diskette are an exact duplicate, in digitized form, of the
cryptographic source code that is printed in Part V of the Book.

<p>The Book was authored by Bruce Schneier and published by John Wiley
& Sons, Inc. in 1994.  We understand that approximately 30,000 copies
were sold worldwide.

<p>Additional specific information about the contents of the Book and
the Diskette is contained in the court papers on file in the
litigation now pending in the United States District Court for the
District of Columbia and styled Karn v. Department of State, et al.,
Civ. A. No. 95-1812 (LFO).  We refer you to those pleadings for all
relevant details.

<p>The Request, as you know, is intended to comply with the decision
of the Court of Appeals in that case which remanded the matter to the
District Court for consideration in light of the December, 1996
transfer of cryptographic export control responsibility from the
Department of State to the Department of Commerce.

<p>There are three reasons why we believe this software should not be
subject to export controls:

<ul>

<li> The identical information has been published and distributed
worldwide without control in printed form in the Book;

<li>The identical information is also currently available in digital
form at several sites on the Internet where it can be easily obtained
by anyone;

<li>The prohibition of unregulated distribution of this information
would violate the First and Fifth Amendments as well as the
Administrative Procedure Act; and

<li>The EAR are invalid as a matter of law because the statute relied
on by the President in continuing those controls, the International
Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq. does not
authorize continuation for several years of a general system of export
controls that is not related to a specific foreign emergency.
</ul>

<p>The legal arguments for our positions have been fully briefed in
the referenced litigation, as well as in the decision of Judge Patel
in Bernstein v. Department of State, 922 F.Supp. 1426 (N.D. Cal. 1996)
(Bernstein I) and Bernstein v. Department of State, 945 F.Supp. 1279
(N.D. Cal. 1996) (Bernstein II).  These materials should be considered
an integral part of this request.

<p>If the Department is unable to determine that the contents of the
Diskette are not subject to the EAR, then we request in the
alternative that it issue an export license permitting its
unrestricted distribution including placement on a Website for
unrestricted distribution.

<p>Please contact either of us for any additional information you may
require. Pursuant to the Court's order in this case, we request a
formal determination within 30 calendar days.

<p>Thank you for your attention in this regard.


<pre>
						Very truly yours,



						Kenneth C. Bass, III
						Thomas J. Cooper

</pre>
<p>cc:	Anthony J. Coppolino, Esq.<br>