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Flashcards in CISSP D1 Law Deck (36):


Computer Crime
Congress first enacted computer crime law as part of the Comprehensive Crime Control Act (CCCA) of 1984, and it remains in force today, with several amendments. This law was carefully written to exclusively cover computer crimes that crossed state boundaries to avoid infringing on states’ rights and treading on thin constitutional ice. The major provisions of the act are that it is a crime to perform the following:
◾Access classified information or financial information in a federal system without authorization or in excess of authorized privileges
◾Access a computer used exclusively by the federal government without authorization
◾Use a federal computer to perpetrate a fraud (unless the only object of the fraud was to gain use of the computer itself)
◾Cause malicious damage to a federal computer system in excess of $1,000
◾Modify medical records in a computer when doing so impairs or may impair the examination, diagnosis, treatment, or medical care of an individual
◾Traffic in computer passwords if the trafficking affects interstate commerce or involves a federal computer system



Computer Crime
Computer crime law enacted as part of the CCCA was amended by the more well-known Computer Fraud and Abuse Act (CFAA) in 1986 to change the scope of the regulation. Instead of merely covering federal computers that processed sensitive information, the act was changed to cover all “federal interest” computers. This widened the coverage of the act to include the following:
◾Any computer used exclusively by the U.S. government
◾Any computer used exclusively by a financial institution
◾Any computer used by the government or a financial institution when the offense impedes the ability of the government or institution to use that system
◾Any combination of computers used to commit an offense when they are not all located in the same state


CFAA Amendments

Computer Crime
In 1994, Congress recognized that the face of computer security had drastically changed since the CFAA was last amended in 1986 and made a number of sweeping changes to the act. Collectively, these changes are referred to as the Computer Abuse Amendments Act of 1994 and included the following provisions:
◾Outlawed the creation of any type of malicious code that might cause damage to a computer system
◾Modified the CFAA to cover any computer used in interstate commerce rather than just “federal interest” computer systems
◾Allowed for the imprisonment of offenders, regardless of whether they actually intended to cause damage
◾Provided legal authority for the victims of computer crime to pursue civil action to gain injunctive relief and compensation for damages

In 2015, President Barack Obama proposed significant changes to the Computer Fraud and Abuse Act that would bring computer crimes into the scope of the Racketeer Influenced and Corrupt Organizations Act (RICO) statutes used to combat organized crime. That proposal was still pending as this book went to press.



Computer Crime
Computer Security Act of 1987

After amending the CFAA in 1986 to cover a wider variety of computer systems, Congress turned its view inward and examined the current state of computer security in federal government systems. Members of Congress were not satisfied with what they saw and they enacted the Computer Security Act (CSA) of 1987 to mandate baseline security requirements for all federal agencies. In the introduction to the CSA, Congress specified four main purposes of the act:
◾To give the National Institute of Standards and Technology (NIST) responsibility for developing standards and guidelines for federal computer systems. For this purpose, NIST draws on the technical advice and assistance (including work products) of the National Security Agency where appropriate.
◾To provide for the enactment of such standards and guidelines.
◾To require the establishment of security plans by all operators of federal computer systems that contain sensitive information.
◾To require mandatory periodic training for all people involved in management, use, or operation of federal computer systems that contain sensitive information.

This act clearly set out a number of requirements that formed the basis of federal computer security policy for many years. It also divided responsibility for computer security among two federal agencies. The National Security Agency (NSA), which formerly had authority over all computer security issues, retained authority over classified systems, but NIST gained responsibility for securing all other federal government systems. NIST produces the 800 series of Special Publications related to computer security in the federal government. These are useful for all security practitioners and are available for free online here:


Federal Sentencing Guidelines

Computer Crime
The Federal Sentencing Guidelines released in 1991 provided punishment guidelines to help federal judges interpret computer crime laws. Three major provisions of these guidelines have had a lasting impact on the information security community:
◾The guidelines formalized the prudent man rule, which requires senior executives to take personal responsibility for ensuring the due care that ordinary, prudent individuals would exercise in the same situation. This rule, developed in the realm of fiscal responsibility, now applies to information security as well.
◾The guidelines allowed organizations and executives to minimize punishment for infractions by demonstrating that they used due diligence in the conduct of their information security duties.
◾The guidelines outlined three burdens of proof for negligence. First, the person accused of negligence must have a legally recognized obligation. Second, the person must have failed to comply with recognized standards. Finally, there must be a causal relationship between the act of negligence and subsequent damages.


National Information Infrastructure Protection Act

Computer Crime
In 1996, Congress passed yet another set of amendments to the Computer Fraud and Abuse Act designed to further extend the protection it provides. The National Information Infrastructure Protection Act included the following main new areas of coverage:
◾Broadens CFAA to cover computer systems used in international commerce in addition to systems used in interstate commerce
◾Extends similar protections to portions of the national infrastructure other than computing systems, such as railroads, gas pipelines, electric power grids, and telecommunications circuits
◾Treats any intentional or reckless act that causes damage to critical portions of the national infrastructure as a felony


Paperwork Reduction Act

Computer Crime
The Paperwork Reduction Act of 1995 requires that agencies obtain Office of Management and Budget (OMB) approval before requesting most types of information from the public. Information collections include forms, interviews, record-keeping requirements, and a wide variety of other things. The Government Information Security Reform Act (GISRA) of 2000 amended this act, as described in the next section.



Computer Crime
Government Information Security Reform Act of 2000

The Government Information Security Reform Act (GISRA) of 2000 amended the Paperwork Reduction Act to implement additional information security policies and procedures. In the text of the act, Congress laid out five basic purposes for establishing the GISRA:
◾To provide a comprehensive framework for establishing and ensuring the effectiveness of controls over information resources that support federal operations and assets
◾To recognize the highly networked nature of the federal computing environment, including the need for federal government interoperability, and in the implementation of improved security management measures, to assure that opportunities for interoperability are not adversely affected
◾To provide effective government-wide management and oversight of the related information security risks, including coordination of information security efforts throughout the civilian, national security, and law enforcement communities
◾To provide for development and maintenance of minimum controls required to protect federal information and information systems
◾To provide a mechanism for improved oversight of federal agency information security programs

The provisions of the GISRA continue to charge the National Institute of Standards and Technology and the National Security Agency with security oversight responsibilities for unclassified and classified information processing systems, respectively. However, GISRA places the burden of maintaining the security and integrity of government information and information systems squarely on the shoulders of individual agency leaders.

GISRA also creates a new category of computer system. A mission-critical system meets one of the following criteria:
◾It is defined as a national security system by other provisions of law.
◾It is protected by procedures established for classified information.
◾The loss, misuse, disclosure, or unauthorized access to or modification of any information it processes would have a debilitating impact on the mission of an agency.

GISRA provides specific evaluation and auditing authority for mission-critical systems to the secretary of defense and the director of central intelligence. This is an attempt to ensure that all government agencies, even those that do not routinely deal with classified national security information, implement adequate security controls on systems that are absolutely critical to the continued functioning of the agency.



Computer Crime
Federal Information Security Management Act

The Federal Information Security Management Act (FISMA), passed in 2002, requires that federal agencies implement an information security program that covers the agency’s operations. FISMA also requires that government agencies include the activities of contractors in their security management programs. The National Institute of Standards and Technology (NIST), responsible for developing the FISMA implementation guidelines, outlines the following elements of an effective information security program:
◾Periodic assessments of risk, including the magnitude of harm that could result from the unauthorized access, use, disclosure, disruption, modification, or destruction of information and information systems that support the operations and assets of the organization
◾Policies and procedures that are based on risk assessments, cost-effectively reduce information security risks to an acceptable level, and ensure that information security is addressed throughout the life cycle of each organizational information system
◾Subordinate plans for providing adequate information security for networks, facilities, information systems, or groups of information systems, as appropriate
◾Security awareness training to inform personnel (including contractors and other users of information systems that support the operations and assets of the organization) of the information security risks associated with their activities and their responsibilities in complying with organizational policies and procedures designed to reduce these risks
◾Periodic testing and evaluation of the effectiveness of information security policies, procedures, practices, and security controls to be performed with a frequency depending on risk, but no less than annually
◾A process for planning, implementing, evaluating, and documenting remedial actions to address any deficiencies in the information security policies, procedures, and practices of the organization
◾Procedures for detecting, reporting, and responding to security incidents
◾Plans and procedures to ensure continuity of operations for information systems that support the operations and assets of the organization.

FISMA places a significant burden on federal agencies and government contractors, who must develop and maintain substantial documentation of their FISMA compliance activities.


Copyrights and the Digital Millennium Copyright Act

Intellectual Property
Copyright law guarantees the creators of “original works of authorship” protection against the unauthorized duplication of their work. Eight broad categories of works qualify for copyright protection:
◾Literary works
◾Musical works
◾Dramatic works
◾Pantomimes and choreographic works
◾Pictorial, graphical, and sculptural works
◾Motion pictures and other audiovisual works
◾Sound recordings
◾Architectural works

There is precedent for copyrighting computer software—it’s done under the scope of literary works. However, it’s important to note that copyright law protects only the expression inherent in computer software—that is, the actual source code. It does not protect the ideas or process behind the software. There has also been some question over whether copyrights can be extended to cover the “look and feel” of a software package’s graphical user interface. Court decisions have gone in both directions on this matter; if you will be involved in this type of issue, you should consult a qualified intellectual property attorney to determine the current state of legislation and case law.

There is a formal procedure to obtain a copyright that involves sending copies of the protected work along with an appropriate registration fee to the U.S. Copyright Office. For more information on this process, visit the office’s website at However, it is important to note that officially registering a copyright is not a prerequisite for copyright enforcement. Indeed, the law states that the creator of a work has an automatic copyright from the instant the work is created. If you can prove in court that you were the creator of a work (perhaps by publishing it), you will be protected under copyright law. Official registration merely provides the government’s acknowledgment that they received your work on a specific date.

Copyright ownership always defaults to the creator of a work. The exceptions to this policy are works for hire. A work is considered “for hire” when it is made for an employer during the normal course of an employee’s workday. For example, when an employee in a company’s public relations department writes a press release, the press release is considered a work for hire. A work may also be considered a work for hire when it is made as part of a written contract declaring it as such.

Current copyright law provides for a very lengthy period of protection. Works by one or more authors are protected until 70 years after the death of the last surviving author. Works for hire and anonymous works are provided protection for 95 years from the date of first publication or 120 years from the date of creation, whichever is shorter.

In 1998, Congress recognized the rapidly changing digital landscape that was stretching the reach of existing copyright law. To help meet this challenge, it enacted the hotly debated Digital Millennium Copyright Act (DMCA). The DMCA also serves to bring U.S. copyright law into compliance with terms of two World Intellectual Property Organization (WIPO) treaties.

The first major provision of the DMCA is the prohibition of attempts to circumvent copyright protection mechanisms placed on a protected work by the copyright holder. This clause was designed to protect copy-prevention mechanisms placed on digital media such as CDs and DVDs. The DMCA provides for penalties of up to $1,000,000 and 10 years in prison for repeat offenders. Nonprofit institutions such as libraries and schools are exempted from this provision.

The DMCA also limits the liability of Internet service providers when their circuits are used by criminals violating the copyright law. The DMCA recognizes that ISPs have a legal status similar to the “common carrier” status of telephone companies and does not hold them liable for the “transitory activities” of their users. To qualify for this exemption, the service provider’s activities must meet the following requirements (quoted directly from the Digital Millennium Copyright Act of 1998, U.S. Copyright Office Summary, December 1998):
◾The transmission must be initiated by a person other than the provider.
◾The transmission, routing, provision of connections, or copying must be carried out by an automated technical process without selection of material by the service provider.
◾The service provider must not determine the recipients of the material.
◾Any intermediate copies must not ordinarily be accessible to anyone other than anticipated recipients, and must not be retained for longer than reasonably necessary.
◾The material must be transmitted with no modification to its content.

The DMCA also exempts activities of service providers related to system caching, search engines, and the storage of information on a network by individual users. However, in those cases, the service provider must take prompt action to remove copyrighted materials upon notification of the infringement.

Congress also included provisions in the DMCA that allow the creation of backup copies of computer software and any maintenance, testing, or routine usage activities that require software duplication. These provisions apply only if the software is licensed for use on a particular computer, the usage is in compliance with the license agreement, and any such copies are immediately deleted when no longer required for a permitted activity.

Finally, the DMCA spells out the application of copyright law principles to the emerging field of webcasting, or broadcasting audio and/or video content to recipients over the Internet. This technology is often referred to as streaming audio or streaming video. The DMCA states that these uses are to be treated as “eligible nonsubscription transmissions.” The law in this area is still under development, so if you plan to engage in this type of activity, you should contact an attorney to ensure that you are in compliance with current law.



Intellectual Property
Copyright laws are used to protect creative works; there is also protection for trademarks, which are words, slogans, and logos used to identify a company and its products or services. For example, a business might obtain a copyright on its sales brochure to ensure that competitors can’t duplicate its sales materials. That same business might also seek to obtain trademark protection for its company name and the names of specific products and services that it offers to its clients.

The main objective of trademark protection is to avoid confusion in the marketplace while protecting the intellectual property rights of people and organizations. As with copyright protection, trademarks do not need to be officially registered to gain protection under the law. If you use a trademark in the course of your public activities, you are automatically protected under any relevant trademark law and can use the ™ symbol to show that you intend to protect words or slogans as trademarks. If you want official recognition of your trademark, you can register it with the United States Patent and Trademark Office (USPTO). This process generally requires an attorney to perform a due diligence comprehensive search for existing trademarks that might preclude your registration. The entire registration process can take more than a year from start to finish. Once you’ve received your registration certificate from the USPTO, you can denote your mark as a registered trademark with the ® symbol.

One major advantage of trademark registration is that you may register a trademark that you intend to use but are not necessarily already using. This type of application is called an intent to use application and conveys trademark protection as of the date of filing provided that you actually use the trademark in commerce within a certain time period. If you opt not to register your trademark with the PTO, your protection begins only when you first use the trademark.

The acceptance of a trademark application in the United States depends on two main requirements:
◾The trademark must not be confusingly similar to another trademark—you should determine this during your attorney’s due diligence search. There will be an open opposition period during which other companies may dispute your trademark application.
◾The trademark should not be descriptive of the goods and services that you will offer. For example, “Mike’s Software Company” would not be a good trademark candidate because it describes the product produced by the company. The USPTO may reject an application if it considers the trademark descriptive.

In the United States, trademarks are granted for an initial period of 10 years and can be renewed for unlimited successive 10-year periods.



Intellectual Property
Patents protect the intellectual property rights of inventors. They provide a period of 20 years during which the inventor is granted exclusive rights to use the invention (whether directly or via licensing agreements). At the end of the patent exclusivity period, the invention is in the public domain available for anyone to use.

Patents have three main requirements:
◾The invention must be new. Inventions are patentable only if they are original ideas.
◾The invention must be useful. It must actually work and accomplish some sort of task.
◾The invention must not be obvious. You could not, for example, obtain a patent for your idea to use a drinking cup to collect rainwater. This is an obvious solution. You might, however, be able to patent a specially designed cup that optimizes the amount of rainwater collected while minimizing evaporation.

In the technology field, patents have long been used to protect hardware devices and manufacturing processes. There is plenty of precedent on the side of inventors in those areas. Recent patents have also been issued covering software programs and similar mechanisms, but the jury is still out on whether these patents will hold up to the scrutiny of the courts.


Trade Secrets

Intellectual Property
Many companies have intellectual property that is absolutely critical to their business and significant damage would result if it were disclosed to competitors and/or the public—in other words, trade secrets. We previously mentioned two examples of this type of information from popular culture—the secret formula for Coca-Cola and KFC’s “secret blend of herbs and spices.” Other examples are plentiful—a manufacturing company may want to keep secret a certain manufacturing process that only a few key employees fully understand, or a statistical analysis company might want to safeguard an advanced model developed for in-house use.

Two of the previously discussed intellectual property tools—copyrights and patents—could be used to protect this type of information, but with two major disadvantages:
◾Filing a copyright or patent application requires that you publicly disclose the details of your work or invention. This automatically removes the “secret” nature of your property and may harm your firm by removing the mystique surrounding a product or by allowing unscrupulous competitors to copy your property in violation of international intellectual property laws.
◾Copyrights and patents both provide protection for a limited period of time. Once your legal protection expires, other firms are free to use your work at will (and they have all the details from the public disclosure you made during the application process!).

There actually is an official process regarding trade secrets—by their nature you don’t register them with anyone; you keep them to yourself. To preserve trade secret status, you must implement adequate controls within your organization to ensure that only authorized personnel with a need to know the secrets have access to them. You must also ensure that anyone who does have this type of access is bound by a nondisclosure agreement (NDA) that prohibits them from sharing the information with others and provides penalties for violating the agreement. Consult an attorney to ensure that the agreement lasts for the maximum period permitted by law. In addition, you must take steps to demonstrate that you value and protect your intellectual property. Failure to do so may result in the loss of trade secret protection.

Trade secret protection is one of the best ways to protect computer software. As discussed in the previous section, patent law does not provide adequate protection for computer software products. Copyright law protects only the actual text of the source code and doesn’t prohibit others from rewriting your code in a different form and accomplishing the same objective. If you treat your source code as a trade secret, it keeps it out of the hands of your competitors in the first place. This is the technique used by large software development companies such as Microsoft to protect its core base of intellectual property.


Economic Espionage Act

of 1996
Intellectual Property
Trade secrets are very often the crown jewels of major corporations, and the U.S. government recognized the importance of protecting this type of intellectual property when Congress enacted the Economic Espionage Act of 1996. This law has two major provisions:
◾Anyone found guilty of stealing trade secrets from a U.S. corporation with the intention of benefiting a foreign government or agent may be fined up to $500,000 and imprisoned for up to 15 years.
◾Anyone found guilty of stealing trade secrets under other circumstances may be fined up to $250,000 and imprisoned for up to 10 years.

The terms of the Economic Espionage Act give true teeth to the intellectual property rights of trade secret owners. Enforcing this law requires that companies take adequate steps to ensure that their trade secrets are well protected and not accidentally placed into the public domain.



Intellectual Property
Security professionals should also be familiar with the legal issues surrounding software licensing agreements. Four common types of license agreements are in use today:
◾Contractual license agreements use a written contract between the software vendor and the customer, outlining the responsibilities of each. These agreements are commonly found for high-priced and/or highly specialized software packages.
◾Shrink-wrap license agreements are written on the outside of the software packaging. They commonly include a clause stating that you acknowledge agreement to the terms of the contract simply by breaking the shrink-wrap seal on the package.
◾Click-through license agreements are becoming more commonplace than shrink-wrap agreements. In this type of agreement, the contract terms are either written on the software box or included in the software documentation. During the installation process, you are required to click a button indicating that you have read the terms of the agreement and agree to abide by them. This adds an active consent to the process, ensuring that the individual is aware of the agreement’s existence prior to installation.
◾Cloud services license agreements take click-through agreements to the extreme. Most cloud services do not require any form of written agreement and simply flash legal terms on the screen for review. In some cases, they may simply provide a link to legal terms and a check box for users to confirm that they read and agree to the terms. Most users, in their excitement to access a new service, simply click their way through the agreement without reading it and may unwittingly bind their entire organization to onerous terms and conditions.



Intellectual Property
Uniform Computer Information Transactions Act

The Uniform Computer Information Transactions Act (UCITA) is a federal law designed for adoption by each of the 50 states to provide a common framework for the conduct of computer-related business transactions. UCITA contains provisions that address software licensing. The terms of UCITA give legal backing to the previously questionable practices of shrink-wrap licensing and click-wrap licensing by giving them status as legally binding contracts. UCITA also requires that manufacturers provide software users with the option to reject the terms of the license agreement before completing the installation process and receive a full refund of the software’s purchase price.


Computer Export Controls


Currently, U.S. firms can export high-performance computing systems to virtually any country without receiving prior approval from the government. There are exceptions to this rule for countries designated by the Department of Commerce’s Bureau of Industry and Security as countries of concern based on the fact that they pose a threat of nuclear proliferation, are classified as state sponsors of terrorism, or other concerns. These countries include India, Pakistan, Afghanistan, Cuba, North Korea, the Sudan, and Syria.


Encryption Export Controls


The Department of Commerce’s Bureau of Industry and Security sets forth regulations on the export of encryption products outside the United States. Under previous regulations, it was virtually impossible to export even relatively low-grade encryption technology outside the United States. This placed U.S. software manufacturers at a great competitive disadvantage to foreign firms that faced no similar regulations. After a lengthy lobbying campaign by the software industry, the president directed the Commerce Department to revise its regulations to foster the growth of the American security software industry.

Current regulations now designate the categories of retail and mass market security software. The rules now permit firms to submit these products for review by the Commerce Department, but the review will take no longer than 30 days. After successful completion of this review, companies may freely export these products.



The right to privacy has for years been a hotly contested issue in the United States. The main source of this contention is that the Constitution’s Bill of Rights does not explicitly provide for a right to privacy. However, this right has been upheld by numerous courts and is vigorously pursued by organizations such as the American Civil Liberties Union (ACLU).

Europeans have also long been concerned with their privacy. Indeed, countries such as Switzerland are world renowned for their ability to keep financial secrets. Later in this chapter, we’ll examine how the European Union data privacy laws impact companies and Internet users.


U.S. Privacy Law


Although there is no constitutional guarantee of privacy, a myriad of federal laws (many enacted in recent years) are designed to protect the private information the government maintains about citizens as well as key portions of the private sector such as financial, educational, and health-care institutions. In the following sections, we’ll examine a number of these federal laws.

Fourth Amendment The basis for privacy rights is in the Fourth Amendment to the U.S. Constitution. It reads as follows:

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

The direct interpretation of this amendment prohibits government agents from searching private property without a warrant and probable cause. The courts have expanded their interpretation of the Fourth Amendment to include protections against wiretapping and other invasions of privacy.


Privacy Act of 1974

The Privacy Act of 1974 is perhaps the most significant piece of privacy legislation restricting the way the federal government may deal with private information about individual citizens. It severely limits the ability of federal government agencies to disclose private information to other persons or agencies without the prior written consent of the affected individual(s). It does provide for exceptions involving the census, law enforcement, the National Archives, health and safety, and court orders.

The Privacy Act mandates that agencies maintain only the records that are necessary for conducting their business and that they destroy those records when they are no longer needed for a legitimate function of government. It provides a formal procedure for individuals to gain access to records the government maintains about them and to request that incorrect records be amended.


Electronic Communications Privacy Act of 1986

The Electronic Communications Privacy Act (ECPA) makes it a crime to invade the electronic privacy of an individual. This act broadened the Federal Wiretap Act, which previously covered communications traveling via a physical wire, to apply to any illegal interception of electronic communications or to the intentional, unauthorized access of electronically stored data. It prohibits the interception or disclosure of electronic communication and defines those situations in which disclosure is legal. It protects against the monitoring of email and voicemail communications and prevents providers of those services from making unauthorized disclosures of their content.

One of the most notable provisions of the ECPA is that it makes it illegal to monitor mobile telephone conversations. In fact, such monitoring is punishable by a fine of up to $500 and a prison term of up to five years.



Communications Assistance for Law Enforcement Act (CALEA) of 1994 The Communications Assistance for Law Enforcement Act (CALEA) of 1994 amended the Electronic Communications Privacy Act of 1986. CALEA requires all communications carriers to make wiretaps possible for law enforcement with an appropriate court order, regardless of the technology in use.


Economic and Protection of Proprietary Information Act

of 1996 The Economic and Protection of Proprietary Information Act of 1996 extends the definition of property to include proprietary economic information so that the theft of this information can be considered industrial or corporate espionage. This changed the legal definition of theft so that it was no longer restricted by physical constraints.


Health Insurance Portability and Accountability Act

In 1996, Congress passed the Health Insurance Portability and Accountability Act (HIPAA), which made numerous changes to the laws governing health insurance and health maintenance organizations (HMOs). Among the provisions of HIPAA are privacy and security regulations requiring strict security measures for hospitals, physicians, insurance companies, and other organizations that process or store private medical information about individuals.HIPAA also clearly defines the rights of individuals who are the subject of medical records and requires organizations that maintain such records to disclose these rights in writing.The HIPAA privacy and security regulations are quite complex. You should be familiar with the broad intentions of the act, as described here. If you work in the health-care industry, consider devoting time to an in-depth study of this law’s provisions.



Health Information Technology for Economic and Clinical Health Act of 2009 In 2009, Congress amended HIPAA by passing the Health Information Technology for Economic and Clinical Health (HITECH) Act. This law updated many of HIPAA’s privacy and security requirements and was implemented through the HIPAA Omnibus Rule in 2013.

One of the changes mandated by the new regulations is a change in the way the law treats business associates (BAs), organizations who handle protected health information (PHI) on behalf of a HIPAA covered entity. Any relationship between a covered entity and a BA must be governed by a written contract known as a business associate agreement (BAA). Under the new regulation, BAs are directly subject to HIPAA and HIPAA enforcement actions in the same manner as a covered entity.

HITECH also introduced new data breach notification requirements. Under the HITECH Breach Notification Rule, HIPAA-covered entities who experience a data breach must notify affected individuals of the breach and must also notify both the Secretary of Health and Human Services and the media when the breach affects more than 500 individuals.


Data Breach Notification Laws

HITECH’s data breach notification rule is unique in that it is a federal law mandating the notification of affected individuals. Outside of this requirement for health-care records, data breach notification requirements vary widely from state to state.


SB 1386

Data Breach Notification Laws
In 2002, California passed SB 1386 and became the first state to immediately disclose to individuals the known or suspected breach of personally identifiable information. This includes unencrypted copies of a person’s name in conjunction with any of the following information:
◾Social Security number
◾Driver’s license number
◾State identification card number
◾Credit or debit card number
◾Bank account number in conjunction with the security code, access code, or password that would permit access to the account
◾Medical records
◾Health insurance information

In the years following SB 1386, many (but not all) other states passed similar laws modeled on the California data breach notification law. As of 2015, only Alabama, New Mexico, and South Dakota did not have state breach notification laws.




of 1998 In April 2000, provisions of the Children’s Online Privacy Protection Act (COPPA) became the law of the land in the United States. COPPA makes a series of demands on websites that cater to children or knowingly collect information from children:
◾Websites must have a privacy notice that clearly states the types of information they collect and what it’s used for, including whether any information is disclosed to third parties. The privacy notice must also include contact information for the operators of the site.
◾Parents must be provided with the opportunity to review any information collected from their children and permanently delete it from the site’s records.
◾Parents must give verifiable consent to the collection of information about children younger than the age of 13 prior to any such collection. Exceptions in the law allow websites to collect minimal information solely for the purpose of obtaining such parental consent.



Gramm-Leach-Bliley Act of 1999 Until the Gramm-Leach-Bliley Act (GLBA) became law in 1999, there were strict governmental barriers between financial institutions. Banks, insurance companies, and credit providers were severely limited in the services they could provide and the information they could share with each other. GLBA somewhat relaxed the regulations concerning the services each organization could provide. When Congress passed this law, it realized that this increased latitude could have far-reaching privacy implications. Because of this concern, it included a number of limitations on the types of information that could be exchanged even among subsidiaries of the same corporation and required financial institutions to provide written privacy policies to all their customers by July 1, 2001.




USA PATRIOT Act of 2001 Congress passed the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001 in direct response to the September 11, 2001, terrorist attacks in New York City and Washington, DC. The PATRIOT Act greatly broadened the powers of law enforcement organizations and intelligence agencies across a number of areas, including when monitoring electronic communications.

One of the major changes prompted by the PATRIOT Act revolves around the way government agencies obtain wiretapping authorizations. Previously, police could obtain warrants for only one circuit at a time, after proving that the circuit was used by someone subject to monitoring. Provisions of the PATRIOT Act allow authorities to obtain a blanket authorization for a person and then monitor all communications to or from that person under the single warrant.

Another major change is in the way the government deals with Internet service providers (ISPs). Under the terms of the PATRIOT Act, ISPs may voluntarily provide the government with a large range of information. The PATRIOT Act also allows the government to obtain detailed information on user activity through the use of a subpoena (as opposed to a wiretap).

Finally, the USA PATRIOT Act amends the Computer Fraud and Abuse Act (yes, another set of amendments!) to provide more severe penalties for criminal acts. The PATRIOT Act provides for jail terms of up to 20 years and once again expands the coverage of the CFAA.




Family Educational Rights and Privacy Act The Family Educational Rights and Privacy Act (FERPA) is another specialized privacy bill that affects any educational institution that accepts any form of funding from the federal government (the vast majority of schools). It grants certain privacy rights to students older than 18 and the parents of minor students. Specific FERPA protections include the following:
◾Parents/students have the right to inspect any educational records maintained by the institution on the student.
◾Parents/students have the right to request correction of records they think are erroneous and the right to include a statement in the records contesting anything that is not corrected.
◾Schools may not release personal information from student records without written consent, except under certain circumstances.


Identity Theft and Assumption Deterrence Act

In 1998, the president signed the Identity Theft and Assumption Deterrence Act into law. In the past, the only legal victims of identity theft were the creditors who were defrauded. This act makes identity theft a crime against the person whose identity was stolen and provides severe criminal penalties (up to a 15-year prison term and/or a $250,000 fine) for anyone found guilty of violating this law.


European Union Privacy Law


On October 24, 1995, the European Union (EU) Parliament passed a sweeping directive outlining privacy measures that must be in place for protecting personal data processed by information systems. The directive went into effect three years later in October 1998. The directive requires that all processing of personal data meet one of the following criteria:
◾Legal obligation
◾Vital interest of the data subject
◾Balance between the interests of the data holder and the interests of the data subject

The directive also outlines key rights of individuals about whom data is held and/or processed:
◾Right to access the data
◾Right to know the data’s source
◾Right to correct inaccurate data
◾Right to withhold consent to process data in some situations
◾Right of legal action should these rights be violated

Even organizations based outside of Europe must consider the applicability of these rules due to trans-border data flow requirements. In cases where personal information about European Union citizens leaves the EU, those sending the data must ensure that it remains protected. American companies doing business in Europe can obtain protection under a treaty between the EU and the United States that allows the Department of Commerce to certify businesses that comply with regulations and offer them “safe harbor” from prosecution.

To qualify for the safe harbor provision, U.S. companies conducting business in Europe must meet seven requirements for the processing of personal information:

Notice They must inform individuals of what information they collect about them and how the information will be used.

Choice They must allow individuals to opt out if the information will be used for any other purpose or shared with a third party. For information considered sensitive, an opt-in policy must be used.

Onward Transfer Organizations can share data only with other organizations that comply with the safe harbor principles.

Access Individuals must be granted access to any records kept containing their personal information.

Security Proper mechanisms must be in place to protect data against loss, misuse, and unauthorized disclosure.

Data Integrity Organizations must take steps to ensure the reliability of the information they maintain.

Enforcement Organizations must make a dispute resolution process available to individuals and provide certifications to regulatory agencies that they comply with the safe harbor provisions.




The Payment Card Industry Data Security Standard (PCI DSS) is an excellent example of a compliance requirement that is not dictated by law but by contractual obligation. PCI DSS governs the security of credit card information and is enforced through the terms of a merchant agreement between a business that accepts credit cards and the bank that processes the business’s transactions.

PCI DSS has 12 main requirements:
1.Install and maintain a firewall configuration to protect cardholder data.
2.Do not use vendor-supplied defaults for system passwords and other security parameters.
3.Protect stored cardholder data.
4.Encrypt transmission of cardholder data across open, public networks.
5.Protect all systems against malware and regularly update antivirus software or programs
6.Develop and maintain secure systems and applications.
7.Restrict access to cardholder data by business need-to-know.
8.Identify and authenticate access to system components.
9.Restrict physical access to cardholder data.
10.Track and monitor all access to network resources and cardholder data.
11.Regularly test security systems and processes.
12.Maintain a policy that addresses information security for all personnel.

Each of these requirements is spelled out in detail in the full PCI DSS standard, which may be found at

Dealing with the many overlapping, and sometimes contradictory, compliance requirements facing an organization requires careful planning. Many organizations employ full-time IT compliance staff responsible for tracking the regulatory environment, monitoring controls to ensure ongoing compliance, facilitating compliance audits, and meeting the organization’s compliance reporting obligations.


Organizations who are not merchants but store, process, or transmit credit card information on behalf of merchants must also comply with PCI DSS. For example, the requirements apply to shared hosting providers who must protect the cardholder data environment.

Organizations may be subject to compliance audits, either by their standard internal and external auditors or by regulators or their agents. For example, an organization’s financial auditors may conduct an IT controls audit designed to ensure that the information security controls for an organization’s financial systems are sufficient to ensure compliance with the Sarbanes-Oxley Act. Some regulations, such as PCI DSS, may require the organization to retain approved independent auditors to verify controls and provide a report directly to regulators.

In addition to formal audits, organizations often must report regulatory compliance to a number of internal and external stakeholders. For example, an organization’s Board of Directors (or, more commonly, that board’s Audit Committee) may require periodic reporting on compliance obligations and status. Similarly, PCI DSS requires organizations that are not compelled to conduct a formal third-party audit to complete and submit a self-assessment report outlining their compliance status.


vendor governance

Contracting and Procurement

The increased use of cloud services and other external vendors to store, process, and transmit sensitive information leads organizations to a new focus on implementing security reviews and controls in their contracting and procurement processes. Security professionals should conduct reviews of the security controls put in place by vendors, both during the initial vendor selection and evaluation process, and as part of ongoing vendor governance reviews.

Some questions to cover during these vendor governance reviews include:
◾What types of sensitive information are stored, processed, or transmitted by the vendor?
◾What controls are in place to protect the organization’s information?
◾How is our organization’s information segregated from that of other clients?
◾If encryption is relied on as a security control, what encryption algorithms and key lengths are used? How is key management handled?
◾What types of security audits does the vendor perform and what access does the client have to those audits?
◾Does the vendor rely on any other third parties to store, process, or transmit data? How do the provisions of the contract related to security extend to those third parties?
◾Where will data storage, processing, and transmission take place? If outside the home country of the client and/or vendor, what implications does that have?
◾What is the vendor’s incident response process and when will clients be notified of a potential security breach?
◾What provisions are in place to ensure the ongoing integrity and availability of client data?

This is just a brief listing of some of the concerns that you may have. Tailor the scope of your security review to the specific concerns of your organization, the type of service provided by the vendor, and the information that will be shared with them.