Press release from the Ministry of Economy http://www.bmwi.de/presse/1998/1208prm2.html, my translation: Export control for encryption technology loosened No "key recovery" for cryptographic products At their plenary meeting on December 2nd and 3rd 1998 the 33 treaty states of the Wassenaar Arrangement have decided to revise the export control for encryption technologies (cryptographic products). Export control has been loosened, and the embodiment of crypto restrictions has been hindered. Thus there will be no export ban for encryption products in the future. The previously comprehensive control characterized by a large number of sectoral exceptions has been replaced by a positively formulated list text. In future all kinds of products - hardware and software are treated in the same way - are only subject to export control starting at a key length of 56 bits. Mass market products that fulfill certain requirements are subject to export control only up from a key length of 64 bits. For the present the restriction to 64 bits is valid for two years, it must then be renewed unanimously or it will be cancelled. In addition, methods such as digital signatures and authentication as well as certain product groups such as wireless phones and pay TV devices are completely exempted from export control. The regulation concerning freely available products (public domain) has remained unchanged. Certain states that had initially demanded special treatment for "key recovery" products have not have been unsuccessful. Thus the export of encryption technology will remain possible without depositing keys with government agencies. ----------------------------------------------------------------------
From an AP news report, my translation [The Green Party is part of the new German government, but the Ministry of Economy is led by the Social Democrats]:
Green Party member of parliament Hans-Christian Ströbele critisized that the government gave in to US pressure for stronger control on encryption. The agreement would affect the obvious need of computer users to protect their business and private communication from unauthorized access. Also the business opportunities of German producers of powerful encryption software would be reduced in a serious way. Thus when implementing the agreement in national law, negative effects must be limited as much as possible.