Erin Kelly

USA TODAY

WASHINGTON — There are clandestine terrorist cells in Germany, Italy and England that pose the same type of threat as the Islamic State sleeper cell that set off bombs in Brussels and killed more than 30 people last month, the director of national intelligence said Monday.

National Intelligence Director James Clapper, asked if clandestine cells exist in those three nations, responded, "Yes, they do" at a breakfast hosted by the Christian Science Monitor.

Clapper said the sleeper cells underscore the need for European Union nations to do a better job of sharing intelligence information with one another to help thwart attacks. He was recently in Europe promoting that message.

He said European nations' desire to encourage the free flow of people and goods across their borders and to ensure the privacy of citizens in each individual country '"in some cases is in conflict with the responsibility to protect security."

But there is a heightened awareness of the need to share information in the wake of the Brussels' attacks, Clapper said.

"The challenge we have (in detecting terrorist plots) is we are only seeing a snapshot...we don't have a total picture at all times," he said. "If we did, these plots would be thwarted."

The Islamic State is very aware that it is being watched by western intelligence agents and takes pains to communicate through encrypted apps on smartphones and other devices, Clapper said.

Clapper repeated the Obama administration's concerns about encrypted communications posing a barrier to intelligence-gathering, but he stopped short of endorsing proposed legislation by Sens. Richard Burr, R-N.C., and Dianne Feinstein, D-Calif., to effectively bar U.S. tech companies from engineering encryption that prevents anyone but the owner from unlocking their devices. The legislation has been endorsed by law enforcement groups but is strongly opposed by Silicon Valley.

"We need to find a balance ...to ensure privacy and security on an individual basis as well as security in the context of what's best for the country as a whole," Clapper said. He called finding that balance "the elusive holy grail."

Clapper said the 2013 revelations by former National Security Agency contractor Edward Snowden about the NSA's mass surveillance of Americans' phone records sped up the development of strong encryption by U.S. companies. The tech industry was anxious to show both U.S. and foreign customers that it was taking major steps to protect the privacy of their data, and Clapper says the technology is now about 7 years ahead of where NSA anticipated it would be.

The development had a "profound" impact on the intelligence community's ability to gather information, Clapper said.

However, Clapper said later that encryption may not be as strong as either its proponents or critics believe. He said the history of intelligence gathering has shown that any code can be broken.

"Ultimately, there's really no such thing (as unbreakable encryption)," he said.

The FBI recently hired an outside contractor to unlock an encrypted Apple iPhone that belonged to one of the dead terrorists responsible for the December attack in San Bernardino, Calif.

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