Google CEO Eric Schmidt speaks during the company's Chrome event in San Francisco December 7, 2010. REUTERS/Beck Diefenbach No, it's not worth the risk to sell business software to North Korea, Google Chairman Eric Schmidt said today.

Schmidt's remarks came as part of an on-stage interview he gave with Box CEO Aaron Levie at today's BoxDev conference, where the newly-public cloud storage company is making its case to 2,400 developers.

Levie and Schmidt were discussing the importance of a free and open Internet, as well as the contrasts between the Internet in America and elsewhere.

Schmidt described North Korea as a kind of worst-case scenario, where the current regime has almost totally blocked itself off from the global Internet, creating a kind of "intranet" where you can access a lot of state-approved content, and not much else.

Even among students, Schmidt says, North Korean undergraduates are only allowed to use the Internet in pairs. It cuts North Korean citizens off from the rest of the world, and keeps them in the dark.

"New kinds of proxy and firewall technologies might be able to break that, but it's not true today," Schmidt says.

At this remark, Levie pretended to get excited, asking if there was an opportunity for cloud storage service Box in North Korea.

"It's highly illegal to sell to North Korea...Aaron," Schmidt replied.

Levie asked what was the worst that could happen. Schmidt said he'd go to jail.

"North Korean jail, or like, Palo Alto jail?" Levie quipped.

Levie jokingly asked if Schmidt was sure. Schmidt said it's on the shortlist of countries it's totally illegal for American companies to sell to.

"There are four countries on that list, you need to know who they are," Schmidt says.

This conversation came as part of a larger role on how Google prioritizes freedom of information. Schmidt says that he's a firm believer that the law of the land requires a search warrant for information, calling out electronic surveillance as a real problem.

In the meanwhile, Google is closing its backdoors, Schmidt says, much to the consternation of intelligence agencies who maintain that they were never spying on American citizens in the first place.

"Now all the people who are snooping are complaining," he says.

Still, even with all these concerns, Schmidt is optimistic. Recent reforms to net neutrality and the general tide of public opinion, not to mention the First Amendment, mean that it's not as bad as it could be.

"The good news is that North Korea is much worse."