The British government's proposal to empower law enforcement agencies to snoop on e-mails and electronic files threatens to drive U.S. businesses' Internet trading operations to more liberal Ireland. This warning comes from Jim Norton, head of e-commerce at Britain's Institute of Directors. "The government's proposals are a classic case of a soccer goal scored against one's own team," says Norton, a university professor. The British Parliament is now studying the government's plans, which would enable police and customs officers to demand the software keys used by businesses to encrypt e-mail. Refusal could cost two years in jail. Key-holders also would be banned from telling business partners they had surrendered a key. The U.S. and Irish governments have rejected similar proposals. "It is futile for the British government to treat Internet policy as a national issue when what is needed is international agreement," Norton says. "A British firm that handed over the key of a multinational client would be liable for a compensation claim. U.S. businesses are not happy about this situation, and will opt to work in Ireland or elsewhere."