Encryption as a means for security and privacy in Hong Kong

1. Encryption as a means for security and privacy in Hong Kong Dr. John Bacon-Shone Director, Social Sciences Research Centre The University of Hong Kong johnbs@hku.hk http://www.ssrc.hku.hk

2. Introduction • Social science perspective • Law Reform Commission sub-committee on privacy looks at data protection, surveillance, interception, stalking • Surveys on privacy in Hong Kong over last 7 years • Track developments in UK, Europe and US to see implications here

3. Importance of encryption • encryption assures security of transaction data and authentication of the transaction parties encryption types • private key (same key to encrypt and decrypt - requires safe transfer of the key) • public key (public key to encrypt data and private key to decrypt data, private key to encrypt signature and public key to decrypt - requires trusted access to public key)

4. Certification Authorities (CA)s • For public key, trusted third parties play a key practical role in confirming ownership of the public key • Two main are currently Verisign and Thawte, who generally make money from people owning servers rather than people owning browsers.

5. Law enforcement concerns • Law enforcement is concerned that strong encryption would limit their ability to tap communications, but strong encryption is already available, anyway! Law enforcement try to insist that government must be have access to the private keys (using key escrow)

6. Key Issues • Security problems • Authentication problems • Privacy problems • Perception and reality • Hong Kong laws and perceptions • European laws and perceptions • US laws and perceptions • US vs Europe • Hong Kong vs the world

7. Security problems • Goes well beyond my scope and expertise! • Without encryption easy to read email • Without encryption can intercept business transactions and credit card numbers

8. Authentication problems • Authentication is essential for remote transactions over an open network • Public key encryption makes this feasible using digital signatures • Digital signatures use a mirror process of public key encryption • Weak (breakable) encryption or insecure private keys destroy authentication

9. Privacy problems • Threats include insecure transactions, faulty authentication, personal (e.g. credit card) data reuse and abuse • Perceived risk is much greater than risk estimated by professionals • Some risks already there (e.g. leaked credit card numbers) • Many merchants are not sensitive to the perceived risks

10. Perception and reality • The public perception of risk may be very different to estimated risk • Trust in professional estimation of risk may be low • Professionals often underestimate risk - e.g. nuclear power • Public acceptance requires the reduction of perceived risk or increase in perceived benefits

11. Strength of encryption • US does not allow export of ‘strong’ encryption except under very controlled circumstances such as banks and US companies • Most export version browsers use 40 bit RSA • 40 bit is considered weak, 128 bit is strong (vast oversimplification!) • For email, PGP 128 bit is downloadable from Norway

12. 56 bit DES break (RSA) • Jan 97 6 months • Jan 98 39 days • Jul 98 56 hours • implies 40 bit DES (standard export browser) in 6 secs using US$220k worth of equipment!

13. Who restricts access to cryptography? • France • China • Russia • Singapore • (for export) US

14. Hong Kong laws and perceptions • Personal Data Protection Ordinance covers local data collection and (soon) transfer afterwards • Computer hacking law • Import/Export regulation covers software in machine readable form • Little data on local perception of risks of Internet commerce

15. European laws and perceptions • European countries have statutory protection of personal data • Europe about to introduce restrictions on data transfer to countries that do not have personal data protection • Second World War makes Europeans nervous about government and companies holding lots of personal data

16. US laws and perceptions • Little federal protection of privacy • Surveys indicate that privacy and security risks are perceived to be quite high and a barrier to Internet commerce

17. US vs Europe • US approach assumes self-regulation will work and that government involvement is risky • Europeans are losing patience as they feel there is plenty of evidence that self regulation has not worked in the US!

18. Hong Kong vs the world • Hong Kong has data protection laws that meet European conditions to allow data export to Hong Kong • Hong Kong needs to ensure that we have access to e-Commerce without security or privacy worries (or trade barriers) from Europe or US

19. Router level encryption? • 13 companies led by Cisco propose router based encryption using triple DES. But the network operator can switch a backdoor, supposedly on request from law enforcement!

20. ISP to KGB? • The KGB replacement (Federal Security Bureau, FSB) is preparing a law that would require all ISPs to install a data channel of equal bandwith to an FSB outpost.

21. Backdoors (telephone) • The FBI already requires (by law) a backdoor for telephone tapping, but with a warrant • Hong Kong does not require individual warrants for telephone taps, despite an LRC proposal nearly 2 years ago. The government white paper that was published would exclude all computer communications from the tapping law, supposedly because the hacking law would be sufficient (I know of no lawyers outside government who agree)

22. Key recovery failure • The US commision chartered to develop a key-recovery infrastucture has admitted defeat and disbanded

23. Key Escrow does not work! • The National Research Council issued a report in 1996 that concluded that strong cryptography should be available to everyone and that key escrow will not work

24. E-Privacy Bill • The proposed US E-privacy bill would: • allow law enforcement to assist foreign governments to decrypt messages without requiring that there had been a violation of US laws • Create new offence of using encryption in the commission of a crime

25. Labour before & after • Labour party in UK strongly opposed any controls on encryption. Now in power they propose licensing controls and backdoors for law enforcement

26. Certification in HK? • HKSARG has a request for Electronic Service Delivery out that suggests that there will be a local certification authority setup (by whom?) but does not address encryption issues at all.

27. Clone that Phone! • 2 UC Berkeley researchers broke the encryption scheme used in all GSM phones - this means they can clone GSM phone identities.

28. UK proposals (relevant because of similarity to HK legal system) • March 97 - proposed key escrow, rejected by business and public • Feb 98 - proposed licensing certification authorities and linking these licences to key escrow. Note that if someone gets access to your electronic signature, they can do business claiming to be you and you would be held responsible, but the CAs should only need your public keys. Why should they want to leave their private keys with someone?

29. UK Responses • universal approval of legal recognition of digital signatures • significant minority prefer voluntary licensing of CAs • little support for the belief that the data protection and hacking laws were sufficient - need offence of reckless or deliberate disclosure of private key • need to follow OECD Guidelines • much debate over access to keys for law enforcement (note that the UL has a much more restrictive law on telephone tapping than Hong Kong with judicial warrants needed) - note that private key may be used for security and signature! In practice, criminals will ignore key escrow anyway,so why bother to add cost and complexity that will not have wanted law enforcement benefits!

30. Encryption is a human rights issue • Haiti and El Salvador, the military control the telephone company • Congo, UN investigators had their notes sized and photocopied • CIA agents have been involved in torture on behalf of foreign governments (do you want the CIA to have access to your private encryption keys?)

31. Where next? • Clearly US approach is not sensible, UK seems to be realising that key escrow will not work in any form but voluntary licensing of CAs may be the best way forward