Regulators seek to limit security software exports

The comment period on Wassenaar ends next Monday

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The comment period on a proposed set of software export restrictions ends next Monday, and the rules, as written, would severely restrict international sales, deployment, research and even discussion of cybersecurity tools and exploits, experts say.

The Wassenaar Arrangement is an international agreement designed to curb the global arms trade. It dates back to the 1996, and was updated in 2013 to include cybersecurity technology. It's up to each country to decide how to implement it, and, according to experts, this proposal goes farther than what the European Union adopted last year -- and farther than the Wassenaar Agreement itself requires.

The Electronic Frontier Foundation, Symantec, and many other organizations are concerned about the effect of the new regulations on companies that use or provide penetration testing or network monitoring tools, as well as on security research in general.

"We think it's a terrible idea," said Cindy Cohn, executive director at Electronic Frontier Foundation. "They're going to hear from us, and they're going to hear from a whole lot of other people."

The rules could also hurt the U.S. economically, she said.

"People want to protect their trade secrets, their communications, their assets," she said. "If American companies aren't in the lead offering that security, they're going to lose out in the market."

In particular, the Bureau of Industry and Security wants to include "network penetration testing products that use intrusion software to identify vulnerabilities of computers and network-capable devices" and "proprietary research on the vulnerabilities and exploitation of computers and network-capable devices."

The U.S. has already gone through the same discussion as it pertains to strong encryption, said John Pescatore, director of emerging trends at SANS Institute.

"The same is true for zero day flaws and penetration testing tools," he said. "Export controls will make it harder for U.S. security vendors to compete in a global cybersecurity market, and will have zero impact for all those finding and selling vulnerabilities outside the US."

Take, for example, Symantec. The new regulations could mean thousands of new license applications for Symantec alone, said Cheri McGuire, the company's vice president for global government affairs and cybersecurity policy.

Meanwhile, technology changes almost daily, and threats have to be addressed on a real-time basis, she said. "Symantec operates in a very dynamic, and technically challenging business."

According to Alan Cohn, cybersecurity attorney in the Washington office of Steptoe & Johnson LLP, the Bureau of Industry and Security -- the part of the U.S. Department of Commerce responsible for these controls -- reports that it takes, on average, 26 days to process a request for an export license.

"Given the vast number of cybersecurity tools and products potentially covered by the proposed rule, it’s possible that wait times could become far longer as a result of the rule," he said.

And any delay at all in getting security tools to customers could be problematic.

"Cybersecurity threats are timed in minutes or hours," said Kevin King, an attorney specializing in export regulations at the Washington office of Cooley LLP.

Customers often decide to purchase security tools right after they've had a bad security scare, said Pat Clawson, CEO at Blancco Technology Group.

"You can bet they’re not going to want to wait for an export permit to be able to get malware software," he said. "People are inherently impatient and fearful -- they’ll go looking elsewhere for companies that can help protect their data."

But even companies that aren't in the business of selling software could be affected, said Symantec's McGuire.

Mark Kuhr, co-founder and CTO at Synack

For example, current rules requiring export licenses for certain types of encryption software have an exclusion for internal use, she said.

"Without an intra-company exception, companies will not be able to effectively research vulnerabilities and exploits," she said. "Companies must have the ability to get such vulnerabilities and associated exploits, technology, and technical details to the most knowledgeable expert within their companies quickly and effectively. Otherwise the industry is crippled."

And then there are multinational companies that either have government mandates to do penetration testing, or are doing it for their own security.

Now these companies will have to apply for export licenses, McGuire said. "The unintended consequences of this proposed rule will mean higher risk and more frequent security breaches."

Symantec is one of the companies that recently joined a coalition comprised mostly of security vendors who are working to put a stop to the proposed regulations.

Another member is Ionic Security.

The proposed regulations apply to exports to every country except Canada, said Ionic founder and CTO Adam Ghetti. And they are written so broadly that they could be read to apply to almost any kind of software, as well as to research, collaboration -- even discussions.

"If I just wanted to have a conversation with a customer about the capabilities my tool provides, I would have to get a license," he said.

China and Russia and other international cyber-threats

At its core, the regulations seem to be designed to prevent oppressive regimes from being able to acquire zero-day exploits and ability to listen in on all the communications of their citizens.

But they're of particular significance today.

"We know we have problems with securing our networks from the Chinese and Russians and others," said Mark Kuhr, co-founder and CTO at Synack. Previously, Kuhr was a technical director for the National Security Agency.

"I agree with the intent," he said. But the way the rules are currently written will hamper legitimate uses of cyber security products, hurt competitiveness, and will not limit the black market.

"It will not make our systems more secure," he said.

In theory, the regulations could make it easier to prosecute the bad guys, said Jonathan Levine, CTO at Intermedia, which provides cloud-based business software.

"The most effective weapon against organized crime in the 40’s and 50’s tended to be prosecutions for tax evasion," he said. "It will be much easier to persuade juries that cybercriminals are guilty of having illegally exported some malware than that they used it for something."

On the other hand, he said, not only do cybercriminals have plenty of safe havens overseas but detecting the violations could be extremely difficult.

"It is likely that the new rules will hinder those fighting against cybercrime much more than it slows the spread of malware," he said.

"At the end of the day, we all know that a true malicious individual or organization would certainly not abide by the requirements," said Anthony Catalano, a consultant at SecureState. "Thus, leaving enforcement, punishment, and operational waste to those who are following the rules."

But, as currently written, the regulations would have a lot of adverse impact on legitimate business.

"If I buy software from a foreign vendor, and I find a flaw in that software, I would not be able to tell the vendor about that flaw without running afoul of these regulations," he said.

Or say there's a company, a bank for instance, that provides anti-virus or browser security for its customers -- these tools could fall under the new export licensing requirements, said Synack's Kuhr.

"An anti-virus solution has to subvert the normal operations of software and block calls to the operating system," he said. "But it has a very benevolent purpose."

Bug bounty problems could also be adversely affected, said Chris Eng, vice president of research at security vendor Veracode.

"Any vulnerability details, including proof-of-concept exploit code needed to test for the existence of vulnerabilities, could be subject to export restriction," he said.

Copyright © 2015 IDG Communications, Inc.

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