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Both options are feasible but for option#1 (PGP decryption at B2B/SOA), you have to write a java callout. B2B/SOA 11g does not support PGP out-of-box but it can be achieved using java callout. I would prefer option#2, personally as in this case, PGP decryption will be done out of SOA/B2B and hence it will be hot pluggable (can be removed in future, if required, without modifying SOA/B2B configuration).