License Exception ENC

740.17(b)(3)

Items described in 740.17(b)(3) require a classification request to be eligible for License Exception ENC. Mass market items (5A992.c or 5D992.c) that are described by 740.17(b)(3)(i), (ii), or (iv) can also be authorized by this section. In addition, items described in 740.17(b)(3)(iii) have a semi-annual sales reporting requirement and are not eligible for mass market.
Items described in 740.17(b)(3) include:

740.17(b)(3)(i):
-    Chips, chipsets, electronic assemblies, and field programmable logic devices;

-    Cryptographic libraries, modules, development kits and toolkits,

740.17(b)(3)(ii):

-    Products that provide or perform "non-standard cryptography".
      o    “Non-standard cryptography”  Means any implementation of “cryptography” involving the incorporation or use of proprietary or unpublished cryptographic functionality, including encryption algorithms or protocols that have not been adopted or approved by a duly recognized international standards body (e.g., IEEE, IETF, ISO, ITU, ETSI, 3GPP, TIA, and GSMA) and have not otherwise been published.

740.17(b)(3)(iii):

-    Certain types of advanced network vulnerability analysis and digital forensics products described in 740.17(b)(3)(iii) including:
      o    Automated network analysis, visualization, or packet inspection products that adapt in real-time to the operating environment; and
      o    Digital forensics products that triage captured digital forensics data for law enforcement purposes or in a similarly rigorous evidentiary manner.     

740.17(b)(3)(iv):

-    "Cryptographic activation" mechanisms.
      o    “Cryptographic activation” - Any technique that activates or enables cryptographic capability of an item, by means of a secure mechanism implemented by the manufacturer of the item, where this mechanism is uniquely bound to any of the following:
     (a) single instance of the item; or
     (b) One customer, for multiple instances of the item.

Technical Notes to definition of “Cryptographic activation”:
     1. “Cryptographic activation” techniques and mechanisms may be implemented as hardware, “software” or “technology”.
     2. Mechanisms for “cryptographic activation” can, for example, be serial number-based license keys or authentication

After an encryption classification has been submitted, all items under 740.17(b)(3) may be immediately exported to countries listed in Supplement No. 3 to Part 740.

There is a 30-day wait while the encryption classification is pending before exports of (b)(3) items may be made outside of the countries listed in Supplement No. 3 to Part 740.

After 30 days, the item may be exported outside of the Supplement No. 3 countries under either License Exception ENC (for 5A002 and 5D002 items) or NLR (for mass market items) other than E:1 and E:2 countries.