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Sun waits on Russian crypto

The Commerce Department still hasn't approved Sun's plans to market encryption software created in Russia.

Sun Microsystems' (SUNW) plans to market encryption software created in Russia remain on hold because the company still doesn't have approval from the Commerce Department , which has been looking into the matter for nine months, a Sun spokesman confirmed today.

When announced last May, Sun's effort to skirt government limits on exporting strong encryption won wide attention. Since U.S. law applies only to exports leaving the United States, encryption software created in Russia could be shipped to overseas clients from Moscow without Commerce Department approval.

But the department and National Security Agency have been investigating the relationship between Elvis-Plus and Sun, which owns a 10 percent interest in the Russian firm. In particular, the feds want to know if Sun helped Elvis-Plus write its encryption software. If so, then the Elvis-Plus product would be subject to U.S. export limits.

The Elvis-Plus encryption software is based on Simple Key management for Internet Protocols (SKIP), which Sun has published and submitted to the Internet Engineering Task Force standards body.

The Elvis-Plus software originally was expected to ship by August 15, but Sun put its marketing effort on hold when the government made inquiries. A Commerce Department spokeswoman declined to comment on the status of any investigation of Sun's relationship to Elvis-Plus. "We never discuss investigations that are ongoing," she said.

However, Sun confirmed that the NSA had requested Sun's source code in order to compare it to the encryption code from Elvis-Plus. Sun complied with that request, but a person familiar with those activities said Sun never heard back from the government.

In December, a Sun executive told CNET's NEWS.COM that government inquiries about the Elvis-Plus relationship were being handled by Sun's attorneys. Since then, Sun has promoted its vision of embedding security through its operating system, but Elvis-Plus is still considered a complementary technology.

In the meantime, Sun's top Internet security executive, Humphrey Polanen, left Sun two weeks ago to join a new venture with Alexander Galitsky, the Russian scientist who founded Elvis-Plus. Polanen would not comment on the start-up except to say it would be based outside Russia but in Europe and had no ties to Elvis-Plus.

Sun had planned to sell the Elvis-Plus encryption software, then have it shipped to customers outside North America by overseas distributors, effectively circumventing U.S. export restrictions.

The federal government is a major Sun customer, and the company is not expected to market the Elvis-Plus software without the government's approval.

In the meantime, Elvis-Plus has been begun exploring other channels to market its encryption software.