This is the twentieth in a series of Covington blogs on implementation of Executive Order 14028, “Improving the Nation’s Cybersecurity,” issued by President Biden on May 12, 2021 (the “Cyber EO”). The first blogsummarized the Cyber EO’s key provisions and timelines, and the subsequent blogs described the actions taken by various Government agencies to implement the Cyber EO from June 2021 through November 2022. This blog describes key actions taken to implement the Cyber EO during December 2022.
OMB Issues Guidance to Agencies Regarding Reporting of Major Cyber Incidents
The Office of Management and Budget (OMB) issued Memorandum M-23-03 to federal agencies on December 2, 2022 setting forth FY 2023 Guidance on Federal Information Security and Privacy Management Act (FISMA) requirements. The memorandum highlights the Government’s shift in views on cybersecurity, noting that “[t]he Federal Government no longer considers any Federal system or network to be ‘trusted’ unless that confidence is justified by clear data; this means internal traffic and data must be considered at risk.” Additionally, among the requirements discussed in the OMB Memorandum are those regarding agency reporting of “major” cyber incidents. The Memorandum notes that FISMA directs agencies to notify Congress of a “major incident” and further directs OMB to define that term. The Memorandum defines the term “major incident” as either:
- Any incident that is likely to result in demonstrable harm to the national security interests, sovereign relations, or the economy of the United States, or to the public confidence, civil liberties, or public health and safety of the American people. The Memorandum states that agencies should determine the level of impact of the incident by using the incident management process established in NIST SP 800-61, Computer Security Incident Handling Guide; or
- A breach that involves personally identifiable information (PII) that, if exfiltrated, modified, deleted, or otherwise compromised, is likely to result in demonstrable harm to the national security interests, foreign relations, or the economy of the United States, or to the public confidence, civil liberties, or public health and safety of the American people.
The Memorandum states that agencies should assess each breach on a case-by-case basis to determine whether it meets the definition of a major incident. However, the Memorandum expressly requires that any unauthorized modification of, unauthorized deletion of, unauthorized exfiltration of, or unauthorized access to the PII of 100,000 or more people be determined a major incident. It notes that other factors may lead an agency to determine that a breach is a major incident. The Memorandum also states that it does not preclude an agency from reporting an incident or breach to Congress that falls below the threshold of a major incident.
The Memorandum requires agencies to report to the Cybersecurity and Infrastructure Security Agency (CISA) and the OMB OFCIO within one hour of determining that a major incident occurred, and to update CISA and the OMB OFCIO within one hour of determining that an already-reported incident or breach is a major incident. Agencies must notify the appropriate Congressional Committees and its Office of Inspector General (OIG) of a major incident no later than 7 days after the date on which the agency determines that it has a reasonable basis to include that a major incident has occurred. The Memorandum states that the report to Congress should take into account the information known at the time of the report, the sensitivity of the details associated with the incident, and the classification level of the information.
The Memorandum also requires agencies to supplement their major incident reports to Congress “within a reasonable time” after additional information relating to the information is discovered. Such supplemental report must include summaries of:
- The threats and threat actions, vulnerabilities, and impacts relating to the incident;
- The risk assessments conducted of the affected information systems before the date on which the incident occurred;
- The status of compliance of the affected information systems with applicable security requirements at the time of the incident; and
- The detection, response, and remediation actions.
In addition, agencies must submit a supplemental report to Congress no later than 30 days after the agency discovers a breach constituting a major incident that includes:
- A summary of information available about the breach, including how the breach occurred, based on information available to agency officials on the date the agency submits the report;
- An estimate of the number of individuals affected by the breach, including an assessment of the risk of harm to affected individuals based on information available to agency officials on the date the agency submits the report; and
- An estimate of whether and when the agency will provide notice to affected individuals, and a description of any circumstances necessitating a delay in providing such notice.
NIST Issues Final Guidance on Validating the Integrity of Computer Components
On December 9, 2022, the National Institute of Standards and Technology (NIST) issued Special Publication 1800-34, “Validating the Integrity of Computing Devices.” This document describes prototype technical activities that OEMs and their approved manufacturers can use to prevent and detect counterfeiting, tampering, and undocumented changes to firmware and hardware, and corresponding customer practices to verify that client and server computer devices and components have not been tampered with or otherwise modified. The document specifically addresses three use scenarios: (1) Creation of Verifiable Platform Artifacts; (2) Verification of Components During Acceptance Testing; and (3) Verification of Components During Use, and identifies prototype verification technologies that can be used in each of these areas.
NIST Releases Draft Practice Guide on Securing IOT Devices
The NIST National Cybersecurity Center of Excellence issued a draft of Practice Guide 1800-36, “Trusted Interest of Things (IOT) Device Network-Layer Onboarding and Lifecycle Management,” on December 6, 2022. The draft guide notes that providing Internet-of-Things (IOT) devices with the credentials and policies needed to join a network is a process known as “network-layer onboarding,” and states that establishing trust between a network and an IOT device prior to such onboarding is crucial for mitigating the risk of potential attacks. The draft guide identifies standards, recommended practices, and commercially available technology to demonstrate various mechanisms for trusted network-layer onboarding of IOT devices. Comments on the draft guide will be accepted by NIST through February 3, 2023.
 The Memorandum does not define the term “incident.” FISMA defines “incident” as “an occurrence that — (A) actually or imminently jeopardizes, without lawful authority, the integrity, confidentiality, or availability of information or an information system, or (B) constitutes a violation or imminent threat of violation of law, security policies, security procedures, or acceptable use policies.” 44 U.S.C. § 3552(b)(2).