One year ago this week, we posted a blog explaining that the New York Department of Financial Services (NYDFS) issued a framework of seven best practices that insurers should adopt, including a recommendation that insurers stop paying ransom payments in response to ransomware. Now, North Carolina has enacted a statute that not only forbids its public entities from paying ransoms, but also prohibits public entities from communicating with ransomware threat actors. Instead, North Carolina public entities, including public schools and universities, are required to consult with the North Carolina Department of Information Technology (NCDIT).
Continue Reading To Pay the Ransom or Not to Pay the Ransom? North Carolina Tells its Public Entities the Answer is an Emphatic NO
Apache Log4j Security Vulnerability Is STILL a Problem – What is it, Who Does it Impact, and Should I do Anything About It?
You may have heard of a security vulnerability from December 2021 called Log4j that allows attackers to remotely gain control of a vulnerable device. You may also think this is old news and no longer an issue. Wrong. According to an April 26, 2022 report from researchers at the cybersecurity company Rezilion, there are currently over 90,000 vulnerable internet-facing applications and more than 68,000 servers that are still publicly exposed. That’s right – four months after the vulnerability was disclosed, a majority of affected open-source components remain unpatched and companies continue to use vulnerable versions of this tool. So, what is it anyways and do you need to take any action to mitigate the risk?
Continue Reading Apache Log4j Security Vulnerability Is STILL a Problem – What is it, Who Does it Impact, and Should I do Anything About It?
Colorado AG Explains Rocky Mountain Way for Data Privacy Law
The Colorado Privacy Act (“CPA”) takes effect July 1, 2023, and will provide express consumer rights, as well as controller and processor obligations, relating to personally identifiable information of Colorado consumers. This month, the Office of the Colorado Attorney General (the “Office”) outlined the pre-rulemaking considerations for the CPA (“Pre-Rulemaking Considerations”), in an effort to educate regulated entities on the trajectory of this new law, and how such entities may address the upcoming requirements. The Pre-Rulemaking Considerations were also forecasted in Colorado AG Phil Weiser’s address to the International Association of Privacy Professionals 2022 Global Privacy Summit.
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New Personal Data Transfers out of the UK: Like the GDPR, but Different
This week, the new rules for personal data transfers to countries outside the United Kingdom (“UK”) went into effect. As of March 21, 2022, businesses transferring personal data from the UK to countries outside the European Economic Area (“EEA”) need to analyze their data flows and update their agreements involving data transfer practices to reflect the UK Data Protection Authority’s (“ICO”) new standard contractual clauses.
Under both the European Union’s General Data Protection Regulation (“GDPR”) and the UK Data Protection Act 2018, businesses are required to implement certain safeguards when transferring personal data outside the UK to countries “without an adequate level of data protection.” Standard contractual clauses (“SCCs”) are largely used to validate these types of transfers in the European Union as permitted under GDPR. However, following the “Brexit” transition period that concluded on December 31, 2020, GDPR no longer applied to the UK. Further, when the European Union revised SCCs in June 2021, the changes did not apply in the UK, and companies were left with confusion on how to effectuate personal data transfers outside the UK.
Continue Reading New Personal Data Transfers out of the UK: Like the GDPR, but Different
See ya, CMMC. Hello, CMMC 2.0: DOD Announces Suspension of Current Information Security Certification Program
On Nov. 4, the U.S. Department of Defense (DoD) announced that it is suspending the current iteration of the Cybersecurity Maturity Model Certification program (CMMC) in order to streamline the size and scope of required administrative, technical, and physical controls for businesses contracting with DoD. Originally, CMMC was designed to take full effect in 2025 by requiring every defense contractor responsible for processing controlled unclassified information (CUI) to obtain certification from an approved third-party auditor indicating satisfaction of one of five levels of certification. Implementation of CMMC is now halted until DoD has completed a revision to the program intended to strategically meet the needs and capabilities of industries conducting business with the government. As the Office of Under Secretary of Defense described it, the goal is to make cybersecurity requirements “streamlined, flexible, and secure.”
In its place, DoD intends to promote CMMC 2.0, which will reduce the certification model from five levels to three. CMMC 2.0 will remove additional controls added under the initial program and rely primarily on those set forth in NIST 800-171. All contractors required to meet Level 1 (foundational, with 10 required cybersecurity practices and annual self-assessments) will be able to self-attest satisfaction of associated requirements. Level 2 (advanced, with 110 required practices aligned with NIST 800-171) will take a bi-furcated approach to certification with some priority contractors needing to participate in the audit process, while a subset of non-priority contractors will be able to self-attest satisfaction. In the coming weeks, DoD will announce the approach for Level 3 (expert, with at least 110 required practices aligned with NIST 800-171), which will likely be subject to the audit process as well as heightened requirements.
Continue Reading See ya, CMMC. Hello, CMMC 2.0: DOD Announces Suspension of Current Information Security Certification Program
Out with the Old and In with The New: European Commission’s New Standard Contractual Clauses Grace Period is Ending
It is the end of an era: September 27, 2021, officially marks the termination date for the Standard Contractual Clauses (SCCs) grace period set forth by the European Commission (“Commission”). In June 2021, the Commission published two new sets of clauses (2021 SCCs), marking the first update to the SCCs in over a decade. Unlike prior iterations, which were created before the enactment of the European Union’s (EU) General Data Protection Regulation (GDPR), the 2021 SCCs reflect the GDPR’s data protection requirements for multiple variations of data exporter-importer relationships.
Continue Reading Out with the Old and In with The New: European Commission’s New Standard Contractual Clauses Grace Period is Ending
It May Take a Village: What the REvil Holiday Attack Teaches Us About the Evolving Threat
Over the 4th of July holiday weekend, an affiliate of the Russia-linked criminal syndicate known as REvil succeeded in executing the single largest global ransomware attack on record with over one million firms affected worldwide. As a result of the intrusion, thousands of companies have reduced or entirely ceased operation. For example:
- Swedish grocery chain Coop was forced to close over 800 stores;
- Fujifilm shut down parts of its global network, as the company has been unable to accept or process orders; and
- Groupo Fleury, a Brazilian medical diagnostic company with over 10,000 employees, disclosed that its processing systems are currently unavailable worldwide.
NYDFS Answers Age Old “To Pay the Ransom or Not Pay the Ransom” Question with Definitive DON’T
As we have been writing over the past year, COVID-19 has presented a huge opportunity for hackers to wreak havoc on businesses and consumers. While confidentiality of data is usually the focus with such data breaches, system and data access is also at risk of attack by these same threat actors. We have seen this play out on a national scale the past couple of weeks with the pipeline shutdown due to ransomware.
According to the New York Department of Financial Services (“NYDFS”), insurance claims resulting from ransomware increased by 180% between 2018 and 2019, and almost doubled that amount in 2020. (Indeed, the pipeline company paid a ransom of $4.4 million.) As a result, the U.S. cyber insurance market was $3.15 billion in 2019 and is expected to exceed $20 billion in the next five years. And just recently, a carrier announced it would no longer pay out for ransomware claims in France. Earlier this year, in response to the increase in ransomware attacks, the NYDFS issued seven best practices (“Framework”) that insurers should adopt, including a recommendation that insurers should stop paying ransom payments. Insurers should be aware of what the Framework entails and what this means for them when implementing cybersecurity programs and trying to obtain insurance coverage in the future.
And Then There Were Two: The Commonwealth of Virginia Joins California in Enacting Comprehensive Privacy Rights Law
On February 3, 2021, the Virginia Senate passed the Virginia Consumer Data Protection Act (“VCDPA” or the “Act”). Upon approval from Governor Ralph Northam, Virginia will be the second state in the nation to adopt a comprehensive data privacy law. This proposed legislation places Virginia alongside California at the forefront of domestic data privacy regulations.
In 2020, California changed the landscape of data privacy laws in the United States with the California Consumer Privacy Act (CCPA). The CCPA, a result of a ballot initiative by California, introduced the idea of widespread data subject rights for American consumers. Nearly three years later, Virginia is securing the second place spot with its enactment of the VCDPA. The Act mirrors the CCPA and the European Union’s General Data Protection Regulation (GDPR) in many ways. For instance, the Act contains a broad definition of “personal data.” It imposes certain fundamental processing principles, such as purpose limitation and data minimization rules, on businesses that process personal data. It also provides Virginia consumers with new rights to access, correct, delete, and request processing modifications with respect to their personal data.
Once signed into law, the VCDPA will be effective January 1, 2023. In the meantime, companies doing business in Virginia should start actively thinking of ways to incorporate VCDPA requirements into their existing privacy policies and procedures. The key features of the VCDPA are summarized below.
Continue Reading And Then There Were Two: The Commonwealth of Virginia Joins California in Enacting Comprehensive Privacy Rights Law
Oh the Times (and the Clauses), They are a-Changing’
Each month, new developments in European privacy law demonstrate both how the times are changing, and how the 2010 Standard Contractual Clauses are increasingly antiquated. Last month, the Commission of the European Union (the “Commission”) published two preliminary implementing decisions:
(1) a draft new set of standard contractual clauses for transfers of personal data from the EU to third countries (the “Cross-Border SCCs”); and
(2) a draft of new standard contractual clauses for certain clauses in controller-processor data processing agreements (“DPAs”) pursuant to Article 28(7) of the General Data Protection Regulations (“GDPR”).
Both drafts, available here, were widely anticipated following the Court of Justice of the European Union (“CJEU”) Schrems II decision, which invalidated the EU-US Privacy Shield framework for cross-border data transfer. Once approved, these new clauses will replace the previous standard contractual clauses used by organizations as an appropriate safeguard for making international transfers of personal data under GDPR.
Continue Reading Oh the Times (and the Clauses), They are a-Changing’