United States: Uncertain Fate Of Cybersecurity Export Rule Following Congressional Inquiry

The U.S. government is back to the drawing board to implement export controls on intrusion software tools and Internet Protocol ("IP") network communications surveillance systems. Following a landslide of industry comments, culminating in a Congressional hearing this past week, it is clear that the government is far from resolving this issue. What is apparent is that the Administration plans to keep working at it, and the active engagement of cybersecurity companies in this process will be critical to getting it right.

In December 2013, the Administration agreed to amend the Wassenaar Arrangement (an agreement among 41 countries to set export control thresholds for munitions and dual-use items), which would require the U.S. to adopt new export controls on certain cybersecurity items. The purpose of the amendment would be to keep such items, including cyber intrusion and surveillance technologies, from being exported to foreign governments for use in human rights abuses against their populations. This export control effort has been controversial, due to the difficulty in implementing a control that does not at the same time restrict the legitimate development and exchange of these tools for positive cybersecurity purposes.

In May 2015, the Department of Commerce, Bureau of Industry and Security ("BIS") requested comments on a proposed rule ("Proposed Rule") to implement the Arrangement's cybersecurity export controls. See 80 Fed. Reg. 28853 (May 20, 2015), available at https://federalregister.gov/a/2015-11642. Under the Proposed Rule, a license would be required to export "cybersecurity items" to all countries but Canada. Cybersecurity items would be defined to include systems, equipment, components, and software designed to make, operate, deliver, or communicate with "intrusion software" (i.e., software designed to avoid detection or defeat protective countermeasures that is cable of extracting data or information from a computer, or modifying the standard execution party of a program to allow the execution path of externally provided instructions), as well as IP network communications surveillance systems or equipment. See 80 Fed. Reg. at 28854. It would also include technology for the development of intrusion software, including "proprietary research on the vulnerabilities and exploitation of computers and network-capable devices." Id.

U.S. industry overwhelmingly responded with 264 comments that identified many unintended negative consequences if the rule were finalized. Commenters in particular feared that the Proposed Rule's broad definitions would require licenses for necessary sharing of information regarding security breaches and vulnerabilities. The majority view was that the licensing burden would be overwhelming for both the government and for the tech sector, and it would significantly delay companies' effective responses to cyber-attacks. Commenters said that licensing requirements would impair the sharing of cybersecurity information among foreign nationals and affiliates within companies, as well as the receipt of vulnerability reports from private individuals through "bug bounty" programs. BIS has not reissued the proposed rule or published further guidance on its plans since the comment period closed on July 20, 2015.

On January 12, 2016, the U.S. House of Representatives held a joint1 hearing to solicit testimony regarding the negotiations behind the 2013 Wassenaar Arrangement amendment, the Administration's process for developing the proposed rule, and to discuss future steps for controlling cybersecurity technologies. (A recording of the hearing and related written materials is available at https://oversight.house.gov/hearing/wassenaar-cybersecurity-and-export-control/ .) The testimony came from witnesses representing government agencies (Departments of State, Commerce, and Homeland Security) as well as representatives from industry stakeholders (Microsoft Corp., Symantec, VMware, Inc., and the Information Technology Industry Council).

Comments at the Hearing

Industry testimony raised concerns about whether the Proposed Rule could be revised to address the issues raised in the public comments without renegotiating the 2013 amendment. The Administration panelists declined to commit to renegotiating the Wassenaar Arrangement cybersecurity provisions at this time, but they indicated that they intend to seek out and be responsive to industry concerns. The Administration made clear that its next step will not involve issuance of a final rule, which implies that another proposed rule accompanied by solicitation of industry comments may be forthcoming.

Key points made at the hearing include:

  • The government witnesses explained that the Administration had followed its normal annual Wassenaar process and formulated the proposal with input through its technical advisory committee process, which did not, at that time, identify any concerns. The Administration also took the unusual step in this case of submitting a proposed rule for public comment, rather than just immediately publishing a final rule with the Wassenaar changes. The Administration panelists indicated their intention to keep the cybersecurity sector closely engaged with this process.
  • The industry witnesses, and many of the Representatives on the Committee, raised concerns that renegotiation of the 2013 amendment would be necessary. The government panelists, however, stressed that renegotiation would be diplomatically difficult at this time because 31 of 41 Wassenaar parties already have implemented the amendment. They further stated that it this time the Administration had made no decision on implementation of the amendment, other than that it would not yet issue a final rule.
  • Industry witnesses pointed out that, because a majority of the world's cybersecurity firms are located in the U.S., the U.S. disproportionately bears the burden of the Arrangement's proposed cybersecurity controls. Further, certain countries with large technology industries (e.g., Brazil, India, China) are not parties to the Arrangement, and thus not subject to the proposed controls.
  • Industry witnesses and some Representatives on the Committee also suggested that alternatives to the Wassenaar Arrangement for controlling exports of cybersecurity technologies could be explored, such as existing criminal legislation or economic sanctions targeting the malicious use of cyber intrusion tools.

What to Expect Next

The hearing underscored that, while the Administration has decided not to proceed yet with a final rule implementing the 2013 Wassenaar Arrangement cybersecurity controls, next steps are still up for discussion. While it is unclear at this time whether the Administration will issue a revised proposed rule and solicit comments, attempt to renegotiate the 2013 amendment at the Wassenaar multilateral level, or take another course of action, the government witnesses at the hearing affirmed that the Administration intends to be responsive to industry feedback going forward. U.S. companies that could be affected by the rule should be alert for ongoing developments in the coming months, and be prepared to respond swiftly to any requests for comments or feedback from the Administration.

Footnote

1 The hearing was held by the Oversight Subcommittee on Information Technology and Security and the Subcommittee on Cybersecurity, Infrastructure Protection, and Security Technologies.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.