[May 1995 response of Dept. of State to EFF/Bernstein ITAR crypto export 
First Amendment suit.]


    FRANK W. HUNGER
    Assistant Attorney General
    MICHAEL J. YAMAGUCHI
    United States Attorney
    MARY BETH UITTI
    Assistant United States Attorney
         450 Golden Gate Avenue
         San Francisco, California 94102
         Telephone: (415) 556-6181
    VINCENT M. GARVEY
    ANTHONY J. COPPOLINO
    Civil Division, Room 1020
         901 E Street, N.W.
         Washington, D.C.  20530
         Tel:  (202) 514-4782
         Fax:  (202) 616-8470 or 616-8460

Attorneys for the Defendants


                IN THE UNITED STATES DISTRICT COURT

              FOR THE NORTHERN DISTRICT OF CALIFORNIA


DANIEL J. BERNSTEIN                        )
                                           )
Plaintiff,                                 ) C 95-0582 MHP
                                           )
v.                                         )
                                           )     ANSWER
UNITED STATES DEPARTMENT OP STATE et al.,  )
                                           )
Defendants.                                )
___________________________________________)



Defendants, in their official and individual capacities, 
through their undersigned counsel, hereby answer the 
Complaint as follows:

               First Affirmative Defense

All claims against the defendants sued in their individual 
capacities are barred by the doctrine of qualified immunity, 
and the defendants are immune from suit in their individual 
capacities.

              Second Affirmative Defense

The Complaint fails to state a claim upon which relief can 
be granted against the defendants sued in their individual 
capacities.

             Third Affirmative Defense

This Court lacks personal jurisdiction over the defendants 
sued in their individual capacities.


                 Fourth Affirmative Defense

Venue does not lie in this judicial district as to the 
claims against the defendants sued in their individual 
capacities.

                Fifth Affirmative Defense

The claims against the defendants sued in their individual 
capacities are barred by the statute of limitations.

                Sixth Affirmative Defense

The Court lacks subject matter jurisdiction to review the 
designation of items as defense articles or defense services 
under the Arms Export Control Act ("AECA") of 1976, 22 
U.S.C. S 2778(h), and with respect to claims arising under 
the Administrative Procedure Act, 5 U.S.C. S 551 et sea.

              Seventh Affirmative Defense

The Complaint fails to state a claim upon which relief can 
be granted against the defendants in their official 
capacities.

              Eighth Affirmative Defense

The plaintiff has failed to exhaust administrative remedies.

              Ninth Affirmative Defense

The plaintiff lacks standing to seek redress of any alleged 
injuries to third parties.

              Tenth Affirmative Defense

The defendants respond to the numbered paragraphs of the
Complaint as follows: (l)

1. This paragraph sets forth plaintiff's characterization of   
this action, which requires no response, but insofar as a 
response may be required, deny.

2. This paragraph sets forth plaintiff's characterization of 
this action, which requires no response, but insofar as a 
response may be required, deny, except to admit that the 
Arms Export Control Act of 1976, 22 U.S.C. S 2778 et seq., 
and the International Traffic in Arms Regulations ("ITAR"), 
22 C.F.R. Part 120 et seq., are at issue in this action.

3. Deny the first sentence. The remainder of this paragraph 
sets forth legal argument, which requires no response, but 
insofar as a response may be required, deny.

4. This paragraph sets forth plaintiff's further 
characterization of this action, which requires no response, 
but insofar as a response may be required, deny.

5. This paragraph sets forth plaintiff's further 
characterization of this action, which requires no response, 
but insofar as a response may be required, deny.

6. Deny. The Court lacks personal jurisdiction over the

-------
Footnote:

(1) The Complaint, which is 53 pages and 197 paragraphs, 
does not comport with Fed. R. Civ. P. 8(a) and (e), which 
require a "short and plain statement of the claim" and that 
each averment be "simple, concise, and direct." Several 
allegations are substantially similar, some repeated nearly 
verbatim. See, eq.., 107, 112, 130, and 191 (allegations re: 
seeking prior judicial action); 104, 108, 113, 117, 122, 
126, 132, 192(c) (allegations re: judicial review); 109, 
118, 127 (allegations re: procedural safeguards);
110, 119, 128 (allegations re: the scope of regulatory 
standards); 106, 120, 129, 188 (allegations re: acting 
within specified time and appeal time). Also, several 
paragraphs, noted infra, contain legal argument in narrative 
form or inter-mixed with claims for relief.
------

defendants sued in their individual capacities.  The Court 
lacks subject matter jurisdiction to review the designation 
of items as defense articles or defense services, 22 U.S.C. 
S 2778(h), and with respect to claims arising under the 
Administrative Procedure Act, 5 U.S.C. 5 551 et seq.

7. Deny.

8. Deny. Venue does not lie in this judicial district as to 
the claims against the defendants sued in their individual 
capacities.

9. Defendants lack sufficient knowledge to admit or deny the 
averments of this paragraph.

10. Admit the first sentence. Deny the second sentence, 
except to admit that the statutory authority of the 
President under the AECA to promulgate regulation* with 
respect to the export of defense articles and defense 
services was delegated to the Secretary of State by 
Executive Order 11958, 42 Fed. Re*. 4311 (Jan. 18, 1977) as 
amended. See 22 U.S.C. S 2751 note.

11. Deny, except to admit that the Arms Control and 
Disarmament Agency ("ACDA") is an agency of the Government 
of the United States.

12. Deny, except to admit that the Department of Defense is 
an agency of the Government of the United States and that 
the designation of items on the United States Munitions List 
"are made by the Department of State with the concurrence of 
the Department of Defense." 22 C.F.R. S 120.2; E.O. 11958, 5 
1(1)(1).

13. Deny, except to admit the Department of Commerce is an 
agency of the Government of the United States, and that 
commodity jurisdiction ("CJ") determinations entail 
"consultation among the Departments of State, Defense, 
Commerce and other U.S. Government agencies and industry in 
appropriate cases." 22 c.F.R. S 120.41(a).

14. Deny, except to admit that the National Security Agency, 
a component of the Department of Defense, is an agency of 
the Government of the United States, and that the 
designation of items on the United States Munitions List 
"are made by the Department of State with the concurrence of 
the Department of Defense. n a 2 C . F . R . S 120.2; E.O. 
11958, S 1(1)(1).

15. Deny the first sentence, except to admit that defendant 
Warren Christopher is and has been the United States 
Secretary of State since January 20, 1993. Deny the second 
sentence, except to admit that the statutory authority of 
the President under the AECA to promulgate regulations with 
respect to the export of defense articles and defense 
services was delegated to the Secretary of State by 
Executive Order 11958, 42 Fed. Req. 4311 (Jan. 18, 1977) as 
amended, see 22 U.S.C. 5 2751 note, and that by virtue of 
delegations of authority by the Secretary of State, the ITAR 
are primarily administered by the Director of the Office of 
Defense Trade Controls, Bureau of Political Military 
Affairs, Department of State. See 22 C.F.R. S 120.1(a).

16. Deny the first sentence, except to admit that defendant 
William Perry is and has been the United States Secretary of 
Defense since February 3, 1994. Deny the second sentence.

17. Deny the first sentence, except to admit that defendant 
Ronald Brown is and has been the united States Secretary of 
Commerce since January 22, 1993. Deny the second sentence.

18. Deny the first sentence, except to admit that defendant 
Admiral J.M. McConnell is and has been the Director of the 
National Security Agency since May 22, 1992. Deny the second 
sentence.

19. Deny the first sentence, except to admit that defendant 
John Holum is and has been the Director of the Arms Control 
and Disarmament Agency since November 22, 1993. Deny the 
second sentence.

20. Deny, except to admit that at a time relevant to this 
action, defendant William G. Robinson served *g the Director 
of the Office of Defense Trade Controls of the Bureau of 
Political Military Affairs within the State Department and, 
pursuant to 22 C.F.R. 5 120.1 (a), by virtue of delegations 
of authority by the Secretary of State, the ITAR are 
primarily administered by the director of ODTC.

21. Deny, except to admit that ,a-t a time relevant to this 
action, defendant Charles Ray served in the Office of 
Defense Trade Controls of the Bureau of Political Military 
Affairs within the State Department and provides staff 
assistance in the administration of the ITAR by ODTC.

22. Deny, except to admit that at a time relevant to this 
action, defendant Gary M. Oncale served in the Office of 
Defense Trade Controls of the Bureau of Political Military 
Affairs within the State Department and provided staff 
assistance in the administration of the ITAR by ODTC.

23. Deny, except to admit that at a time relevant to this 
action, defendant Michael Newlin served as Acting Deputy 
Assistant Secretary in the Bureau of Political Military 
Affairs.

24. Deny, except to admit that, at a time relevant to this 
action, Greg Stark served as an official of the National 
Security Agency involved in evaluating technical aspects of 
cryptographic software commodities in the commodity 
jurisdiction process.

25. Deny, except to admit that, at a time relevant to this 
action, Mark Koro served as an official of the National 
Security Agency involved in evaluating technical aspects of 
cryptographic software commodities in the commodity 
jurisdiction process.

26. This paragraph sets forth plaintiff's further 
characterization of this action, which requires no response, 
but insofar as a response may be required, deny.

27. This paragraph sets forth legal argument, which requires 
no response, but insofar as a response may be required, 
deny, except to admit that the ITAR are primarily 
administered by the Office of Defense Trade Controls, bureau 
of Political Military Affairs, Department of State.

28. Deny.

29. This paragraph does not contain averments of fact to 
which a response is required, but insofar as a response may 
be required, deny.

30. Deny the first sentence. The second sentence does not 
contain an averment of fact to which a response is required, 
but insofar as a response may be required, deny.

31. Deny.

32. This paragraph characterizes 22 U.S.C. S 2778(a)(1), 
which speaks for itself, and requires no response, but 
insofar as a response may be required, admit.

33. Deny the first sentence, except to admit that the 
Department of State promulgated the International Traffic in 
Arms Regulations, 22 C.F.R. §§ 120-130. The second sentence 
characterizes 22 C.F.R. § 121.1, which speaks for itself, 
and requires no response, but insofar as a response may be 
required, admit.

34. This paragraph characterizes 22 C.F.R. S 120.9, which 
speaks for itself, and requires no response, but insofar as 
a response may be required, deny, except to admit that 22 
C.F.R. S 120-9 sets forth the definition of a defense 
service.

35. Admit.

36. The averment in this paragraph is not complete, but 
references paragraphs 37-40 and, for this reason, a response 
is no* required, but insofar as a response may be required, 
deny.

37. Deny.

38. This paragraph characterizes 22 C.F.R. § 122.1 and 22 
U.S.C. 5 2778(b)(1)(A), which speak for themselves, and 
requires no response, but insofar as a response may be 
required, deny, except to admit that "if it is determined 
that the commodity is a defense article or service covered 
by the U.S. Munitions List, registration is required for 
exporters, manufacturers, and of defense articles and 
defense services" pursuant to 22 C.F.R. Part 122. 22 C.F.R. 
S 120.4(b).

39. Deny, except to admit that, pursuant to 22 C.F.R. S 
123.1(a), any person who intends to export a defense article 
must obtain the approval of the State Department prior to 
the export, unless the export qualifies for an exemption 
under the ITAR.

40. Deny the first sentence. The second sentence sets forth 
legal argument, which requires no response, but insofar as a 
response may be required, deny.

41. The first sentence characterizes 22 C.F.R. S 127.3 and 
22 U.S.C. S 2778(c), which speak for themselves, and 
requires no response, but insofar as a response may be 
required, deny, except to admit the referenced penalties for 
willful violations of the AECA set forth at 22 U.S.C. S 
2778(c). Admit the second sentence.

42. This paragraph characterizes Z2 C.F.R. S 120.4 (g), 
which speaks for itself, and requires no response, but _
response may be required, deny, except to admit, that 
pursuant to 22 C.F.R. S 120.4(g), the Deputy Assistant 
Secretary of State for Political Military Affairs will 
provide a written response within 30 days of receipt oŁ an 
appeal.

43.  This paragraph characterizes 22 121.1 XIII(b)(l), which 
speaks for itself, and requires no response, but insofar as 
a response may be required, deny, except to admit that, to 
22 C.F.R. S 121.1 XIII(b)(l), the United States Munitions 
List includes cryptographic (including key management) 
systems, equipment, assemblies, modules, integrated 
circuits, components or software with the capability of 
maintaining secrecy or confidentiality of information on 
information systems, except cryptographic equipment and 
software" listed therein, and that, under 2a C.F.R. S 
121.8(f), "software includes but is not limited to "the 
system functional design, logic flow, algorithms, 
application programs, operating systems and support software 
for design, implementation, test operation, diagnosis and 
repair."

44. This paragraph sets forth legal argument, which requires 
no response, but insofar as a response may be required, 
deny.

45. Deny, except to admit that 22 C.F.R. S 120.17 sets forth 
the definition of an export. The second sentence sets forth 
legal argument, which requires no response, but insofar as a 
response may be required, deny.

46. This paragraph characterizes 22 C.F.R. S 120.16, which 
speaks for itself, and requires no response, but insofar as 
a response may be required, deny, except to admit that 22 
C.F.R. S 120-16 sets forth the definition of a foreign 
person.

47. Admit.

48. Deny the first sentence, except to admit that 22 C.F.R. 
S 120.11 sets forth the meaning of information in the public 
domain. Deny the second sentence.

49. This paragraph sets forth legal argument, which requires 
no response, but insofar as a response may be required, 
deny.

50. Admit.

51. This paragraph appears to characterize 22 C.F.R. 5 
127.10, which speaks for itself, and requires no response, 
but insofar as a response may be required, admit.

52. Admit.

53. Deny, except to admit the quoted portion of the 
paragraph which is part of the provision set forth at 22 
C.F.R. S 128.1.

54. Deny, except to admit the quoted portion of the 
paragraph which is part of the provision set forth at 22 
C.F.R. s 120.3

55. Defendants lack sufficient knowledge or information to 
admit or deny the first and second sentences. The third 
sentence is a statement of plaintiff's wishes, and 
defendants lack sufficient knowledge or information to admit 
or deny. The fourth sentence is a citation to Exhibit A to 
the complaint, which requires no response.

56. Defendants lack sufficient knowledge to admit or deny 
the averments in this paragraph.

57. Deny the first sentence, except to admit that the 
function of plaintiff's cryptographic software is to encrypt 
information by using as one of its components a data 
authentication hash function program. Deny the second 
sentence. The third sentence characterizes 22 C.F.R. S 121.1 
XIII(b)(l)(v1), which *peaks for itself, and requires no 
response, but insofar as a response may be required, deny, 
except to admit that category XIII(b)(l)(vi) of the USML 
excludes from the definition Or cryptographic equipment and 
software certain data authentication software described 
therein.

58. Deny, except to admit that plaintiff's cryptographic 
software was determined to be a defense article covered by 
the United States Munitions List, 22 C.F.R. S 121.1 
XIII(b)(l).

59. This paragraph sets forth a statement of plaintiff's 
intentions and wishes, and defendants lack sufficient 
knowledge or information to admit or deny.

60. The first sentence is a statement oŁ plaintiff's wishes, 
and defendants lack sufficient knowledge of information to 
admit or deny. Defendants lack sufficient knowledge or 
information to admit or deny the second sentence.

61. Deny, except to admit that plaintiff submitted the 
letter and documents set forth at Exhibit A to the 
Complaint, subsequently designated CJ 191-92, seeking a com- 
modity jurisdiction determination.

62. Deny, except to admit that defendants Stark and Koro of 
the National Security Agency, acting within their official 
capacities, evaluated the technical aspects of the 
cryptographic software commodity in the commodity 
jurisdiction process.

63. Deny, except to admit that, by letter dated August 20, 
1992, the Director of the office of Defense Trade Controls 
advised the plaintiff of the State Department's commodity 
jurisdiction determination, which is set forth at Exhibit B 
to the Complaint.

64. Deny the first sentence, except to admit that plaintiff 
attempted to communicate with persons at ODTC and NSA 
regarding the CJ determination. Deny the second sentence.

65. Defendants lack sufficient knowledge to admit or deny 
the averments in this paragraph. Defendants have been unable 
to locate a copy of the September 22, 1993 letter at Exhibit 
Complaint or confirm that an appeal was submitted.

66. Defendants lack sufficient knowledge to admit or deny 
the averments in this paragraph. Defendants have been unable 
to locate a copy of the September 22, 1993 letter at Exhibit 
C to the Complaint or confirm that an appeal was submitted.

67. Deny, except to admit that plaintiff submitted the 
letters and documents set forth at Exhibit D to the 
Complaint.

68. This paragraph sets forth a statement of plaintiff's 
purpose, and defendants lack sufficient knowledge to admit 
or deny.

69. Deny, except to admit that by letter dated October 5, 
1993, the Director of the Office of Defense Trade Controls 
advised the plaintiff of the State Department's commodity 
jurisdiction determination, which is set forth at Exhibit E 
to the Complaint.

70. Deny, except to admit that plaintiff did not appeal CJ 
214-93.

71. This paragraph sets forth legal argument, which requires 
no response, but insofar as a response may be required, 
deny, except to admit that by letter* dated August 20, 1992, 
and October 5, 1993, the Director of the Office of Defense 
Trade Controls advised the plaintiff of the State 
Department's commodity jurisdiction determinations, which 
are set forth at Exhibits B and E to the Complaint.

72. Deny, except to admit that, pursuant to 22 C.F.R. § 
123.1(a), any person who intends to export a defense article 
must obtain the approval of the State Department prior to 
the export, unless the export qualifies for an exemption 
under the ITAR.

73. Deny, except to admit that defendants have been unable 
to locate a copy of the September 22, 1993 letter at Exhibit 
C to the Complaint or confirm that an appeal was submitted, 
and that plaintiff has not applied for or received an export 
license. Defendants lack sufficient knowledge or information 
as to the remaining allegations of this paragraph.

74. Defendants lack sufficient knowledge to admit or deny 
the averments in this paragraph.

75. Defendants lack sufficient knowledge to admit or deny 
the averments in this paragraph.

76. Defendants lack sufficient knowledge to admit or deny 
the averments in this paragraph.

77. Defendants lack sufficient knowledge to admit or deny 
the averments in this paragraph.

78. This paragraph sets forth legal argument, which does not 
require a response, but insofar as a response may be 
required, deny

79. This paragraph sets forth legal argument, which does not 
require a response, but insofar as a response may be 
required, deny.

80. This paragraph sets forth legal argument, which does not 
require a response, but insofar as a response may be 
required, deny.

81. Deny the first sentence, except to admit that some 
aspects of government policy with respect to cryptography 
has been subject to public policy debate. Defendants lack 
sufficient knowledge to admit or deny the averments of 
second sentence since the sentence does not specify the 
referenced government initiatives. Defendants lack 
sufficient knowledge to admit or deny the third sentence, 
except to admit that there is scientific interest in 
cryptology.

82. Defendants lack sufficient knowledge to admit or deny 
the averments of first sentence since the sentence does not 
specify the referenced government initiatives that are 
"currently being debated in Congress." Deny the second 
sentence, except to admit that the Clipper Chip and Key 
Escrow Encryption issues concern some issues of 
cryptography. Deny the third sentence, except to admit that 
the preceding Congress considered but did not enact 
legislation that would have altered the existing statutory 
and regulatory provisions at issue in this case.

83. Deny the first sentence, except to admit that 
plaintiff's cryptographic software allows for data 
confidentiality and uses as one of its components data 
authentication technology. The second sentence sets forth 
plaintiff's purpose in designing the software at issue, and 
defendant lacks sufficient knowledge or information to admit 
or deny. The third sentence sets forth legal argument, which 
does not require a response, but insofar as a response may 
be required, deny.

84. This paragraph sets forth legal argument, which does not 
require a response, but insofar as a response may be 
required, deny.

85. This paragraph sets forth plaintiff's allegation of the 
relief sought, which requires no response, but insofar as a 
response may be required, deny.

86. This paragraph sets forth legal argument, which does not 
require a response, but insofar as a response may be 
required, deny, except to admit that plaintiff alleges that 
the AECA and ITAR are unconstitutional.

87. Deny.

88. Deny.

89. This paragraph sets forth legal argument, which does not 
require a response, but insofar as a response may be 
required, deny.

90. This paragraph sets forth legal argument, which does not 
require a response, but insofar as a response may be 
required, deny.

91. This paragraph sets forth legal argument, which does not 
require a response, but insofar as a response may be 
required, deny.

92. Deny.

93. This paragraph realleges and incorporates by reference 
prior allegations, and defendants' prior responses thereto 
are also incorporated by reference.

94. The averment in this paragraph is not complete, but 
references paragraphs 95-98 and, for this reason, a response 
is not required, but insofar as a response may be required, 
deny.

95. Deny.

96. Deny.

97. Deny, except to admit that, pursuant to S 123.1(a), any 
person who intends to export a defense article must obtain 
the approval of the State Department prior to the export, 
unless the export qualifies for an exemption under the ITAR.

98. Deny.

99. Deny.

100. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.
     
101. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.

102. Deny (including the prayer for relief).

103. This paragraph realleges and incorporates by reference 
prior allegations, and defendants' prior responses thereto 
are also incorporated by reference.

104. Deny, except to admit that the Court lacks subject 
matter jurisdiction to review the designation of items as 
defense articles or defense services, 22 U.S.C. S 2778(h), 
and with respect to claims arising under the Administrative 
Procedure Act, 5 U.S.C.

105. Deny the first sentence, except to admit that plaintiff 
submitted to the Office of Defense Trade Controls the 
commodity jurisdiction requests set forth at Exhibits A and 
D to the Complaint. Deny the second sentence, except to 
admit that the "commodity jurisdiction procedure is used 
with the U.S. Government if doubt exists as to whether an 
article or service is covered by the U.S. Munitions List." 
22 C.F.R. S 120.4(a). Deny the third sentence, except to 
admit that plaintiff submitted his commodity jurisdiction 
request on June 30, 1992, and received a determination on 
August 20, 1992. Deny the remainder of the paragraph.

106. Deny the first two sentences, except to admit the 
quoted portion of the paragraph which is part of the 
provision set forth at 22 C.F.R. § 120.4(e). Deny the third 
sentence.

107. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.

108. Deny the first sentence, except to admit that the Court 
lacks subject matter jurisdiction to review the designation 
of items as defense articles or defense services, 22 U.S.C. 
S 2778(h), and with respect to claims arising under the 
Administrative Procedure Act, 5 U.S.C. S 551 et seq. Deny 
the second sentence.

109. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.

110. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.

111. The first sentence characterizes 22 C.F.R. S 120.4(g), 
which speaks for itself, and no response is required, but 
insofar as a response may be required, deny, except to admit 
that, pursuant to 22 C.F.R. S 120.4(g), the deputy assistant 
Secretary of State for Political Military Affairs will 
provide a written response within 30 days of receipt of an 
appeal. Deny the second sentence. Defendants lack sufficient 
knowledge to admit or deny the averments of the third 
sentence since defendants have been unable to locate a copy 
of the September 22, 1993 letter at Exhibit C to the 
Complaint or confirm that an appeal was submitted.

112. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.

113. Admit the first sentence. The remainder of this 
paragraph sets forth legal argument, which requires no 
responses, but insofar as a response may be required, deny 
except to admit that the Court lacks subject matter 
jurisdiction to review the designation of items as defense 
articles or defense services. 22 U.S.C. S 2778(h).

114. Deny (including the prayer for relief).

115. This paragraph realleges and incorporates by reference 
prior allegations, and defendants' prior responses thereto 
are also incorporated by reference.

116. Deny, except to admit that "if it is determined that 
the commodity is a defense article or service covered by the 
U.S. Munitions list, registration is required for exporters, 
manufacturers, and furnishers of defense articles and 
defense services" pursuant to 22 C.F.R. Part 122. 22 C.F.R. 
S 120.4(b).

117. The first sentence characterizes 2Z C.F.R. 5 128.1, 
which speaks for itself, and no response is required, but 
insofar as a response may be required, deny, except to admit 
that the Court lacks subject matter jurisdiction to review 
the designation of items as defense articles or defense 
services, 22 U.S.C. S 2778(h), and with respect to claims 
arising under the Administrative Procedure Act, 5 U.S.C. S 
551 et seq. Deny the second sentence.

118. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.

119. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.

120. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.

121. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.

122. Deny, except to admit that the Court lacks subject 
matter jurisdiction to review the designation of items as 
defense articles or defense services, 22 U.S.C. 5 2778(h), 
and with respect to claims arising under the Administrative 
Procedure Act, 5 U.S.C. S 551 et seq.

123. Deny (including the prayer for relief).

124. This paragraph realleges and incorporates by reference 
prior allegations, and defendants'prior responses thereto 
are also incorporated by reference.

125. This paragraph appears to characterize 22 C.F.R. Part 
123, which speaks for itself, and no response is required, 
but insofar as a response may be required, deny.

126. The first sentence characterizes 2Z CFR. S 128.1, which 
speaks for itself, and no response is required, but insofar 
as a response may be required, deny, except to admit that 
the Court lacks subject matter jurisdiction to review the 
designation of items as defense articles or defense 
services, 22 U.S.C. S 2778(h), and with respect to claims 
arising under the Administrative Procedure Act, 5 U.S.C. S 
551 et seq. Deny the second sentence.

127. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.

128. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.

129. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.

130. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.

131. Deny, except to admit that the office of Defense Trade 
Controls advised the plaintiff of the State Department's 
commodity jurisdiction determinations, which are set forth 
at Exhibits B and E to the Complaint.

132. Deny, except to admit that the Court lacks subject 
matter jurisdiction to review the designation of items as 
defense articles of defense services, 22 U.S.C. S 2778(h), 
and with respect to claims arising under the Administrative 
Procedure Act, 5 U.S.C. § 551 et seq.

133. Deny (including the prayer for relief).

134. This paragraph realleges and incorporates by reference 
prior allegations, and defendants' prior responses thereto 
are also incorporated by reference.

135. Deny the first sentence. The second sentence sets forth 
legal argument, which requires no response, but insofar as a 
response may be required, deny. The remainder of this 
paragraph is not complete but references several succeeding 
paragraph, and for this reason a response is not required, 
but insofar as a response may be required, deny.

136. Deny the first sentence, except to admit that 121.1 -- 
Category XIII, Auxiliary Military Equipment -- includes on 
the United States Munitions List cryptographic systems, 
devices, equipment and software "with the capability of 
maintaining secrecy or confidentiality of information or 
information systems," except as noted therein. See 22 C.F.R. 
S 121.1 XIII(b). The remainder of this paragraph sets forth 
legal argument, which requires no response, but insofar as a 
response may be required, deny.

137. Deny the first sentence, except to admit that the 
definition of technical data "does not include information 
concerning general scientific, mathematical or engineering 
principles commonly taught in schools, colleges, and 
universities or information in the public domain as defined 
in S 1201.11" and also doe* not include "basic marketing 
information on function or purpose or general system 
descriptions of defense articles." 22 C.F.R. S 120.10(a)(5). 
The remainder of this paragraph sets forth legal argument, 
which requires no response, but insofar as a response may be 
required, deny.

138. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.

139. This paragraph sets forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny.

140. This paragraph sets forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny.

141. The first two sentences set forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny. Deny the third sentence.

142. Deny the first sentence, except to admit the definition 
of software set forth at 22 C.F.R. S 121.8(f). The second 
sentence does not state a fact or claim, but sets forth 
speculation as to how defendants have "possibly interpreted" 
the ITAR, which requires no response, but insofar as a 
response may be required, deny. The third sentence sets 
forth legal argument, which requires no response, but 
insofar as a response may be required, deny.

143. This paragraph sets forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny.

144. That paragraph sets forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny.

145. Deny.

146. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.

147. Deny (including the prayer for relief).

148. This paragraph realleges and incorporates by reference 
prior allegations, and defendants' prior responses thereto 
are also incorporated by reference.

149. The averment in this paragraph is not complete, but
reference several succeeding paragraphs. It also sets forth 
legal argument, which requires no response, but insofar as a 
response may be required, deny.

150. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny, except to admit the policy on designating 
and determining a defense article and defense service in the 
future is set forth at 22 C.F.R. S 120.3.

151. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny, except to admit the policy on designating 
and determining article and defense service in the future is 
set forth at 22 C.F.R. S 120.3.

152. Deny the first sentence, except to admit that 22 C.F.R. 
S 120.17 sets forth the definition of an export. The 
remainder of this paragraph sets forth legal argument, which 
requires no responses, but insofar as a response may be 
required, deny.

153. This paragraph sets forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny.

154. Deny.

155. This paragraph sets forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny.

156. Deny the first sentence. The second sentence purports 
to characterize the "essence" of a conversation with 
defendant Charles Ray and, as such, does not sufficiently 
state a factual allegation. It also constitutes legal 
argument, which requires no response, but insofar as a 
response may be required, deny.

157. Deny.

158. This paragraph sets forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny, except to admit that 22 C.F.R. S 121.1 -- 
Category XIII, Auxiliary Military Equipment - includes on 
the United States Munitions List cryptographic systems, 
devices, equipment and software *with the capability of 
maintaining secrecy or confidentiality of information or 
information systems," except as noted therein. See 22 C.F.R. 
S 121.1 XIII(b).

159. Deny the first sentence, except to admit the definition 
of software set forth at 22 C.F.R. S 121.8(f). The remainder 
of this paragraph sets forth legal argument, which requires 
no response, but insofar as a response may be required, 
deny.

160. Deny the first sentence, except to admit that the 
Director of the Office of Defense Trade Controls advised the 
plaintiff of the State Department's commodity jurisdiction 
determination*, which are set forth at Exhibits B and E to 
the Complaint. Deny the second sentence, except to admit 
that, pursuant to 22 C.F.R. S 123.1(a), any person who 
intends to export a defense article must obtain the approval 
of the State Department prior to the export, unless the 
export qualifies for an exemption under the ITAR.

161. This paragraph sets forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny.

162. Deny.

163. This paragraph sets forth legal argument, which does 
not require a response, but insofar as a response may be 
required, deny.

164. Deny (including the prayer for relief).

165. This paragraph realleges and incorporates by reference 
prior allegations, and defendants' prior responses thereto 
are also incorporated by reference.

166. Deny the first sentence, except to admit that plaintiff 
sought the commodity jurisdiction determinations set forth 
at Exhibits A and D to the Complaint. Defendants lack 
sufficient knowledge to admit or deny the averments in the 
second and third sentences.

167. Deny the first sentence, except to admit that, by 
letters dated August 20, 1992 and October 5, 1993, the 
Director of the Office of Defense Trade Controls advised the 
plaintiff of the State Department's commodity jurisdiction 
determinations, which are set forth at Exhibits B and E to 
the Complaint. Deny the second sentence. The remainder of 
this paragraph sets forth legal argument, which requires no 
response, but insofar as a response may be required, deny.

168. This paragraph sets forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny.

169. This paragraph sets forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny.

170. Deny (including the prayer for relief).

171. This paragraph realleges and incorporates by reference 
prior allegations, and defendants' prior-responses thereto 
are also incorporated by reference.

172. This paragraph sets forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny.

173. This paragraph sets forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny.

174. Defendants lack sufficient knowledge to admit or deny 
the averments of this paragraph.

175. Defendants lack sufficient knowledge to admit or deny 
the averments of the first sentence. Deny the second 
sentence.

176. This paragraph sets forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny.

177. Deny (including the prayer for relief).

178. This paragraph realleges and incorporates by reference 
prior allegations, and defendants' prior responses thereto 
are also incorporated by reference.

179. The first sentence characterizes 22 C.F.R. S 121.8(f), 
which speaks for itself, and requires no response, but 
insofar as a response may be required, admit the quoted 
portion of the paragraph set forth at 22 C.F.R. S 121.8(f). 
Deny the second sentence, except to admit that, pursuant to 
*2 C.F.R. S 121.1 XIII(b)(l), the United State* Munitions 
List includes "Cryptographic (including key management) 
system*, equipment, assembler, modules, integrated circuits, 
components or software with the capability of maintaining 
secrecy or confidentiality of information on information 
systems, except cryptographic equipment and software listed 
therein. Admit the third sentence.

180. This paragraph sets forth legal argument, which 
requires no response but insofar as a response may be 
required, deny.

181. This paragraph sets forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny.

182. This paragraph sets forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny.

183. Deny (including the prayer for relief).

184. This paragraph realleges and incorporates by reference 
prior allegations, and defendants' prior responses thereto 
are also incorporated by reference.

185. Deny the first sentence, except to admit that plaintiff 
sought the commodity jurisdiction determinations set forth 
at Exhibits A and D to the Complaint. Deny the second 
sentence.

186. Deny, except to admit that defendants have been unable 
to locate a copy of the September 22, 1993 letter at Exhibit 
C to the Complaint or confirm that an appeal was submitted.

187. This paragraph sets forth legal argument, which 
requires no response, but insofar as a response may be 
required, deny.

188. Deny the first two sentences, except to admit the 
quoted portion of the paragraph which is part of the 
provision set forth at 22 C.F.R. S 120.4(e). Deny the third 
sentence.

189. Deny.

190. Deny.

191. This paragraph sets forth legal argument, which 
requires no response, but insofar as a responses may be 
require*, deny.

192. Deny. a) Deny. b) Deny. c) Deny. d) Deny. e) Deny. f) 
Deny.

193. Deny, except to admit that coordination with ACDA 
concerns those matters within ACDA's area of responsibility.

194. Deny.

195. Deny.
     
196. Deny the first sentence.  The second sentence sets 
forth legal argument, which requires no response, but 
insofar as A response may be required, deny. Deny the third 
sentence, except to admit that the ITAR permitted the 
plaintiff to appeal the CJ determinations at issue, and 
defendants have been unable to locate a copy of the 
September 22, 1993 letter at Exhibit C to the Complaint or 
confirm that an appeal was submitted as to CJ 191-92, and 
that plaintiff did not appeal CJ 214-93.

197. Deny.

Defendants deny that plaintiff is entitled to the relief for 
which he prays or to any relief whatsoever.

WHEREFORE, defendants, having fully answered, respectfully 
pray that this action be dismissed with prejudice and that 
this Court award the defendants such other and further 
relief as the court may deem just and proper.

    Respectfully Submitted,

    FRANK W. HUNGER
    Assistant Attorney General

    MICHAEL J. YAMAGUCHI
    United States Attorney

    MARY BETH UITTI
    Assistant United States Attorney
     450 Golden Gate Avenue
     San Francisco, California 94102
     Telephone: (415) 556-6181



VINCENT M GARVEY
ANTHONY J. COPPOLINO
Department of Justice
Civil Division, Room 1020
     901 E Street, N.W.
     Washington, D.C.  20530
     Tel:  (202) 514-4782
     Fax:  (202) 616-8470 Or 616-8460

Attorneys for the United States

            CERTIFICATE OF SERVICE

I hereby certify that on this the 1st day of May 1995, a 
copy of the foregoing Answer was served by first class mail, 
postage prepaid, on:

Cindy A. Cohn
McGLASHAN & SARRAIL
177 Bovet Road, Sixth Floor
San Mateo, California  94402



ANTHONY COPPOLINO