EDACafe Weekly Review June 25th, 2017

SmartFlow: The Importance of Export Compliance
June 22, 2017  by Peggy Aycinena

 


Below is a contributed op-ed piece
from SmartFlow Compliance Solutions CEO Ted Miracco, and company AE Akshay Dhule.

I last spoke with Miracco in November 2015 when the company launched, offering tools and strategies to software companies who have lost product to theft and piracy. At the time, Synopsys was dealing with a publicly-acknowledged system breach, so that conversation with SmartFlow was particularly pertinent.

This current piece, however, is about export compliance, a topic also of intense interest to the EDA industry.

Cadence’s Larry Disenhof is the industry’s subject expert in this area. Having heard him speak numerous times, although the piece below ends with a plug for SmartFlow, Disenhoff would undoubtedly agree with an articulate reminder that export compliance is neither optional nor for the faint of heart.

The message is clear: If you’re running a software company, ignore these issues at your own peril.

Congratulations to SoC Solutions and Silvaco! SoC Solutions will soon be under the Silvaco umbrella. (See the news release, “Silvaco to Acquire SoC Solutions.”

As a member of the ESD Alliance, SoC Solutions recently took full advantage of the well-honed expertise of our Export Committee. In fact, as SoC Solutions found, anyone who doubts the value of the ESD Alliance or its Export Committee won’t after learning that the three-person group took on the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) and won.

Yes, consider the Export Committee formidable. Made up of representatives from Synopsys, Mentor and Cadence, it was able to persuade BIS to change a small but important piece of the Encryption and Export Administration Regulations. “In our EDA world, we have one main exemption that my committee gained for the industry back in 2005 –– decontrolling our usage of encryption in the design cycle,” says Cadence’s Larry Disenhof, the chair of the Export Committee. Only in the last year has the main body of encryption regulations caught up with our exemption fully decontrolling ancillary encryption used in products from DVD players and household appliances to protection of IP in electronic design, he added. “Without this exemption, we would have been filing license applications constantly for the last 10 years.”

That insight well served SoC Solutions of Suwanee, Ga., supplier of IP and services to build innovative “connected” products and a new member of the Alliance. While networking events and the SIP Working Group were CEO Jim Bruister’s reasons for joining, his perspective changed once Disenhof answered his questions about cryptography export.

Specifically, Jim wondered about the guidelines related to exporting advanced encryption standard (AES) cores to foreign countries. And as he did with Helic, Larry was able to help. He sent a link to the BIS website chock full of information on Encryption and Export Administration Regulations. The encryption category has a wide range of carve-outs, exceptions and licensing or reporting requirements that can be opaque, cautioned Disenhof. He further advised SoC Solutions to study the regulations carefully and perhaps consult with an export attorney.

Jim was impressed with Larry’s practical advice. “Larry pointed me to the Category 5 part 2 that speaks to encryption as part of a design. Because our project schedule is quite tight, we decided not to put our AES core in the design. The main reason is due to having to file a license to have AES in a chip that can be exported. When we get to that point, we will get an export lawyer to review and file.”

The outcome for SoC Solutions may have been different without the ESD Alliance. “This guidance is quite valuable to a small company such as ours. We don’t have lawyers on staff so it helps us evaluate before contacting a lawyer. It saves us money.”

Access to the Export Committee’s expertise is one of the many benefits offered to members of the ESD Alliance. If your company would like to join the ESD Alliance, please visit the ESD Alliance website to read about our committees and ongoing initiatives. I’m always available to answer questions and can be reached at bob@esd-alliance.org.

In my next blog post, I’ll write about Helic’s positive experience with the Export Committee. And after that, a report on this year’s DAC.

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