Be careful what you joke about at the water cooler in Germany these days -- even a dig about a password stuck to a PC monitor could be considered breaking a new anti-hacker law that went into effect this month.

Under the new law, such a joke could be construed as making the password "accessible." And that's just the beginning. If a customer tells a sales clerk at a German office supply store that he's going to use his newly-purchased Windows XP software to hack into a bank, the clerk could get busted for selling him the OS.

These are the types of extreme scenarios being played out over and over by German security vendors and researchers who are still trying to figure out just what the controversial new Section 202c StGB of the country's computer crime laws really means to their business and their research.

Many security people say the law is so flawed and so broad and that no one can really comply with it. "In essence, the way the laws are phrased now, there is no way to ever comply... even as a non-security company," says researcher Halvar Flake, a.k.a. Thomas Dullien, CEO and head of research at Sabre Security.

"If I walked into a store now and told the clerk that I wish to buy Windows XP and I will use it to hack, then the clerk is aiding me in committing a crime by [selling me] Windows XP," Dullien says. "The law doesn't actually distinguish between what the intended purpose of a program is. It just says if you put a piece of code in a disposition that is used to commit a crime, you're complicit in that crime."

Dullien says his company's BinNavi tool for debugging and analyzing code or malware is fairly insulated from the law because it doesn't include exploits. But his company still must ensure it doesn't sell to "dodgy" customers.

Many other German security researchers, meanwhile, have pulled their proof-of-concept exploit code and hacking tools offline for fear of prosecution. Thierry Zoller, security engineer for German security firm n.runs, says he has removed his homegrown Bluetooth hacking tool, and renowned PHP researcher Stefan Esser earlier this month took down all of the proof-of-concept exploits he had developed for the Month of PHP Bugs in March. (See PHP Security Expert Quits and Hacking Bluetooth With a USB Stick .)

Phenoelit, a German researcher Website that contained the default passwords of various network products, recently handed its content over to a U.S. site operator, mainly because the password list is now illegal under the new law.

The German law has even given some U.S. researchers pause as well. It's unclear whether the long arm of the German law could reach them, so some aren't taking any chances: The exploit-laden Metasploit hacking tool could fall under German law if someone possesses it, distributes it, or uses it, for instance. "I'm staying out of Germany," says HD Moore, Metasploit's creator and director of security research for BreakingPoint Systems.

"Just about everything the Metasploit project provides [could] fall under that law," Moore says. "Every exploit, most of the tools, and even the documentation in some cases."

Moore notes that most Linux distros are now illegal in Germany as well, because they include the open-source nmap security scanner tool -- and some include Metasploit as well.

The law basically leaves the door open to outlaw any software used in a crime, notes Sabre Security's Dullien.

Zoller says the biggest problem with the new law is that it's so vague that no one really knows what it means yet. "We have to wait for something to happen to know the limits."

Dullien agrees that it will take a real test case to see just how far the law goes. And he expects the law to get revisited at some point. "If you have a law that is so sweepingly wide that nobody can comply, you can safely assume that it will be knocked down by the supreme court eventually. You just sit and pray you're not the case that has to go there."

Interestingly, German lawmakers met plenty of expert resistance to the computer crime law reforms -- but passed them anyway.

Felix Lindner, a.k.a. "FX," of Berlin-based Recurity Labs, sat on a computer security expert panel that spoke to lawmakers prior to enactment of the new laws. Lindner says he told officials that the German implementation of the EU Cybercrime Convention -- from which the law originated -- is not in line with the EU version, which excludes security industry, academic, and private security research.

"I also told them security specialists are rare, and some fairly good ones are in Germany," Lindner says. "What they do is drive the good people out or into the underground."

And that's where most of the exploits written in Germany will now go, experts predict. Ironically, they don't expect the law to affect the already-thriving black market.

The new law also will have a chilling effect on hacker confabs in Germany. "The worst thing is, you cannot safely discuss anything in public -- say, at conferences -- anymore. When you publish anything, it is your responsibility to make sure no one in the audience plans to use your information to commit a crime," Lindner notes. "Otherwise, you willingly accept the possibility that you helped someone to prepare a crime -- and could end up in jail. At least, that's the legislators' view of it."

Dullien says he thinks legislators were pressured to pass a new law because the old one was flawed. "And they had to implement the EU directive on cybercrime, making it illegal to provide software whose 'principal purpose' is committing a crime," he says. "But apparently, they [German lawmakers] dropped the 'principal purpose' [part]."

The law, which went into effect on August 10, mandates fines or prison sentences for any person who violates 202a or 202b "by providing access to, selling, acquiring, leaving at the disposition of someone, distributing or otherwise making accessible" passwords or access control information. It also outlaws computer programs whose purpose is solely criminal.

"But what is a hacking tool?" n.runs's Zoller says. "When there's a malicious purpose, it's illegal. But even if you possess it, it might be [considered] against the law."

Even the legal eagles are unsure of how the law will be interpreted. "If you ask any German lawyer, they [will] tell you that they have no clue how this is going to be applied," Dullien says. "We'll have to lean back and wait, because technically, this law makes many things illegal."

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