A MasterCard International official told a congressional committee Wednesday that encryption technology is "vital to the development and security" of a number of its products, including its smart card program.

Joel Lisker, MasterCard International senior vice president for security and risk management, testified in support of the "Promotion of Commerce On- Line in the Digital Era Act" bill.

But he urged that the legislation be amended to address security concerns arising from the resale and reexportation of encryption technology.

The bill, sponsored by Sen. Conrad Burns, R-Mont., would allow the unrestricted exportation of mass-market or public-domain encryption programs and permit the exportation of encryption technologies if similar programs are available outside the United States.

Encryption permits a message to be changed into a code that will keep information inaccessible to persons not authorized to have that information.

The bill would promote "cryptographic competition" by making it easier for U.S. companies to export encryption technology and remain competitive with foreign firms that can sell their products freely here, Mr. Lisker observed.

But Mr. Lisker urged that the bill be amended to increase the penalties for the reexportation and resale of this technology to questionable buyers, including criminals. "Modernizing the federal regulatory approach to encryption technology must be accomplished without weakening the ability of law enforcement agencies to pursue criminal activity," he testified.

Also submitting testimony at Wednesday's hearing before the Senate Commerce subcommittee on science, technology, and space were representatives from Lotus, Netscape, Electronic Data Systems Corp., and America Online.

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