The listed US company at the centre of an encryption export row involving the top secret Government Communications Security Bureau says its business plans have been badly hit by a delay in getting access to New Zealand-developed encryption technology. New York-based Cyphercom Solutions has warned it may have to file for bankruptcy because of financial problems partly influenced by the delay [1].
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The delay in getting export consent meant that Cyphercom had missed an opportunity to get its electronic payment systems to market before other players arrived. "It's something the company hasn't been able to recover from", Cyphercom financial adviser Chris Robinson said.
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"US controls on the export of strategic goods are at least as strict as those of New Zealand. We do not have the same level of confidence in respect of Singapore" she [Carolyn Foryth of MFAT] said. She said an export permit would normally only be required for encryption if it was 40 bit or stronger [2]. Most commercial encryption is well below 40-bit strength. Almost all New Zealand exporters of software are unaffected. However, she warned people trying to export software without clearance can be prosecuted under the Customs and Excise Act.