{"id":192,"date":"2016-12-14T17:05:09","date_gmt":"2016-12-14T17:05:09","guid":{"rendered":"http:\/\/exportcompliancesolutions.com\/blog\/?p=192"},"modified":"2016-12-14T17:05:09","modified_gmt":"2016-12-14T17:05:09","slug":"export-compliance-11-words-2","status":"publish","type":"post","link":"https:\/\/exportcompliancesolutions.com\/blog\/2016\/12\/14\/export-compliance-11-words-2\/","title":{"rendered":"EXPORT COMPLIANCE IN 11 WORDS (Part 7 of 12)"},"content":{"rendered":"<h2 style=\"text-align: center;\"><strong>EXPORT COMPLIANCE IN 11 WORDS<\/strong><\/h2>\n<h2 style=\"text-align: center;\"><strong>A Series on Export Compliance Essentials<\/strong><\/h2>\n<h2 style=\"text-align: center;\"><strong>(Part 7 of 12)<\/strong><\/h2>\n<h2 style=\"text-align: center;\"><strong><em>SECURE! <\/em><\/strong><\/h2>\n<p><strong>\u00a0<\/strong><\/p>\n<p style=\"text-align: center;\"><strong><em>Wherever your business interfaces with the global marketplace, your workforce should be trained to recognize export-controlled technologies and technical data, and equipped with the know-how and tools to comply with ITAR, EAR, and DoD requirements, as well as industry best practices, for safeguarding sensitive information and combating cyber threats.<\/em><\/strong><\/p>\n<p>Responsible information-handling practices have always been critical to export compliance. In the past few years, however, troubling reports of frequent and successful cyberattacks on U.S. Government agencies and alarming headlines about technical trade secrets stolen from private firms by hackers have moved information security to the top of the priority list for every organization\u2014small, medium-sized, or large.<\/p>\n<p>Under the terms of the ITAR and EAR, manufacturers and exporters are legally responsible to protect certain technical data related to defense articles on the USML (ITAR \u00a7120.10), as well as key technologies required for the production, development, or use of items on the CCL (EAR \u00a7772.1), against access by unauthorized persons. The disclosure or release of such information without a license, inside and outside company facilities, on the ground and in the cloud, within the U.S. and overseas, constitutes an illegal \u201cexport.\u201d<\/p>\n<p>That\u2019s why, if any of your products is export-controlled, you had better make certain that your employees are clearly aware of the fact, that they clearly understand everything it implies, and that this matters to them.<\/p>\n<p>They need to know that they\u2019re responsible for safeguarding technical data of any kind related to the product\u2014engineering drawings and specifications, schematics, blueprints, design analyses, photographs, formulas, performance test results, pilot production schemes, manufacturing procedures, assembly flowcharts, testing and inspection methods, or any other technical information subject to export controls.<\/p>\n<p>They need to know that if they share controlled technical data without appropriate authorization, or if they carelessly allow unauthorized access to it, they\u2019ll be violating U.S. export laws, with potentially serious consequences for the company and for themselves.<\/p>\n<p><strong>You Need to Educate\u2014and Motivate\u2014Your People About IT Security<\/strong><\/p>\n<p>In today\u2019s business world, <strong><em>technical information<\/em><\/strong> is increasingly\u2014in many cases, almost exclusively\u2014<strong><em>digital information<\/em><\/strong>, consisting of text, images, numerical data, and formulas stored and distributed electronically via computer networks. That means \u201c<strong><em>information security<\/em><\/strong>\u201d and \u201c<strong><em>cybersecurity<\/em><\/strong>\u201d are increasingly synonymous, which is why most organizations have made some sort of cybersecurity training for their employees mandatory. While that\u2019s certainly wise, it shouldn\u2019t be grounds for complacency, because \u201cmandatory\u201d and \u201csome sort\u201d are plainly <em>not<\/em> synonyms for \u201cadequate\u201d and \u201ceffective.\u201d<\/p>\n<p>In addition to providing and requiring cybersecurity awareness training for all employees, truly wise managers and administrators conduct regular internal assessments of security awareness to gauge how well their employees understand the nature and seriousness of the security risks and how well prepared they are to respond to cyber threats.<\/p>\n<p>You can test your employees\u2019 understanding of cybersecurity with a survey or questionnaire. Better yet\u2014from the standpoint of accuracy, objectivity, and credibility \u2014 get help from qualified professionals in this critical area, and ask them to evaluate the effectiveness of your current cybersecurity awareness training as part of a comprehensive cybersecurity compliance risk assessment of your entire company.<\/p>\n<p>Here are some very basic questions about cybersecurity that all your employees should be able to answer:<\/p>\n<ul>\n<li>Who in my company is responsible for cybersecurity?<\/li>\n<li>What are the policies and rules that govern my use of the company\u2019s computer system and my access to electronically stored company information? Where can I read them? How can I stay current on changes to those policies and rules?<\/li>\n<li>If I suspect I have a cybersecurity issue (e.g., malware, spyware, a compromised password, a sensitive document sent to the wrong person, identity theft, evidence of a co-worker\u2019s carelessness or failure to follow policies and procedures), to whom can I report it? If that person is temporarily unavailable, who is their backup? What should I do immediately to reduce potential damage?<\/li>\n<li>Does the company have a policy on bringing personal devices to the workplace and connecting to the company\u2019s system through them? What about accessing the company\u2019s system remotely from home, while traveling, or through an unsecured public network (e.g., coffee shop, library, hotel, university campus?<\/li>\n<li>In what ways could my actions (e.g., opening a malicious e-mail attachment, clicking on a link to a compromised website, installing an application that contains a Trojan) endanger the security of the company\u2019s system and sensitive information? What are some things I can do to avoid these dangers?<\/li>\n<\/ul>\n<p>Those are the <em>easy<\/em> questions\u2014or rather, they should be. If your employees can\u2019t answer them easily, then give that \u201cmandatory employee awareness training\u201d the failing grade it deserves, roll up your sleeves, and get to work on improving your company\u2019s cybersecurity. Don\u2019t hesitate to get outside help\u2014<em>qualified, professional<\/em> help\u2014if you need it.<\/p>\n<p>According to a survey of hundreds of U.S. companies, conducted in 2015 by CompTIA, \u201c<strong><em>human error<\/em><\/strong>\u201d accounts for 52 percent of security breaches. Turns out it\u2019s a greater cyber threat than malware, hackers, or disgruntled employees\u2014although most managers are surprised when they hear this, and have a hard time believing it.<\/p>\n<p>That recalls another category of \u201chuman error\u201d\u2014one that wasn\u2019t included in CompTIA\u2019s survey, though perhaps it should have been. It\u2019s an extremely hazardous condition that our cybersecurity compliance risk assessment team has discovered at more than one facility they visited. If you\u2019re a regular reader of this blog, I\u2019m confident that this cyber hazard is not present at your company, so I offer the following on-site finding, straight from the company officer\u2019s mouth, without further comment:<\/p>\n<p style=\"padding-left: 30px;\"><em>\u201cI\u2019m not sure our company even has a cybersecurity policy or plan or procedures yet. Do we really need anything like that? We\u2019re not some giant corporation, you know. How would we go about creating such a policy? After all, none of us are techies!\u201d \u00a0<\/em><\/p>\n<p><strong>You Need to Prioritize Cybersecurity Compliance in 2017<\/strong><\/p>\n<p>Two recent technological trends have made the job of safeguarding export-restricted information more challenging than ever before:<\/p>\n<ul>\n<li>The expansion of \u201ccloud\u201d services from simple file storage and archiving to business software applications of all kinds, infrastructure, and platforms.<\/li>\n<li>The proliferation of new mobile IT devices.<\/li>\n<\/ul>\n<p>These advances in technology make it possible for people to access the data and resources of your organization at any time from anywhere on earth. In other words, not only is your business no longer tied to a single location, it\u2019s not even limited to a finite number of locations. Your firm is Open for Business everywhere.<\/p>\n<p>By allowing unprecedented levels of connectivity between marketing and R&amp;D staff, contractors and subcontractors, manufacturers and suppliers, domestic and foreign offices, salespeople and customers around the globe, Cloud Computing and Mobile Technology promise to help businesses accelerate innovation cycles and reduce time-to-market. At the same time, the adoption of these technologies has created new vulnerabilities and risk areas, exposed enterprises to new legal liabilities, and raised a host of new security concerns, some of which are only beginning to emerge.<\/p>\n<p>Meanwhile, in response to the overwhelming global cyber threat environment, the U.S. Government has been issuing more and more cybersecurity laws and regulations. The DoD, GSA, OMB, NASA, NARA, DHS, and the White House have published, amended, modified, and clarified so many rules, Executive Orders, definitions, standards, and guidelines recently\u2014all of them aimed at requiring Federal contractors and subcontractors to establish more stringent controls and practices for the protection of government data\u2014that \u201c<strong><em>regulatory compliance<\/em><\/strong>\u201d became the cybersecurity buzz phrase of the year during 2016, and the topic seems unlikely to leave the limelight in 2017.<\/p>\n<p>The latest driver of regulatory compliance is the need for businesses to implement a somewhat bewildering array of new cybersecurity requirements that apply to most Federal contractors and consultants across a wide range of industries, including both defense and non-defense contractors. The recent surge in regulatory activity has included\u2014<\/p>\n<ul>\n<li>A new FAR final rule on \u201c<a href=\"https:\/\/www.federalregister.gov\/documents\/2016\/05\/16\/2016-11001\/federal-acquisition-regulation-basic-safeguarding-of-contractor-information-systems\">Basic Safeguarding of Contractor Information Systems<\/a>\u201d).<\/li>\n<li>A <a href=\"https:\/\/www.federalregister.gov\/documents\/2016\/06\/03\/2016-12734\/revisions-to-definitions-in-the-export-administration-regulations\">new BIS final rule<\/a>, effective September 1, 2016, allowing U.S. companies to use cloud technology and other means of electronic transmission to store and transfer EAR-controlled unclassified \u201cdual use\u201d technology and software without the burden of export control requirements if certain encryption requirements are met.<\/li>\n<li>A veritable glossary of new information security terms and definitions, including <em>Federal Contract Information (FCI), Controlled Unclassified Information (CUI)<\/em>, <em>covered contractor information system<\/em>, <em>Covered Defense Information (CDI)<\/em>, and <em>operationally critical support, <\/em>and an array of new safeguarding requirements associated with them.<\/li>\n<li>New mandatory contract clauses covering cybersecurity, with flowdown to subcontractors and certain other parties (<a href=\"https:\/\/www.acquisition.gov\/far\/html\/52_200_206.html#wp1155195\">FAR 52.204-21<\/a> and <a href=\"http:\/\/www.acq.osd.mil\/dpap\/dars\/dfars\/html\/current\/252204.htm\">DFARS 252.204-7008 &#8211; 7012<\/a>).<\/li>\n<li>A new DoD final rule, effective October 21, 2016, regarding network penetration reporting (\u201ccyber incidents\u201d) and contracting for cloud services (<a href=\"https:\/\/www.federalregister.gov\/documents\/2016\/06\/03\/2016-12734\/revisions-to-definitions-in-the-export-administration-regulations\">DFARS Case 2013-D018<\/a>).<\/li>\n<\/ul>\n<p>The above are just a few of the latest regulatory changes in this area. Others appear to be on the way as we head into the new year.<\/p>\n<p>Putting all these rules and definitions together and figuring out which of them applies to your company and its products is a daunting task. Complying with the new regulations\u2014minimizing your risks and liabilities\u2014is an even greater challenge.<\/p>\n<p>Businesses need be asking and finding answers to some important questions, such as\u2014<\/p>\n<ul>\n<li>How will our firm comply with the new requirements, such as \u201c<strong><em>adequate security<\/em><\/strong>\u201d for CDI\/CUI per <a href=\"http:\/\/nvlpubs.nist.gov\/nistpubs\/SpecialPublications\/NIST.SP.800-171.pdf\">NIST SP 800-171<\/a>, and \u201c<strong><em>incident reporting<\/em><\/strong>\u201d within 72 hours of discovery through the <a href=\"http:\/\/dibnet.dod.mil\/staticweb\/ReportCyberIncident.html\">DoD\u2019s DIBNet portal<\/a> (including compliance with all the rules for investigating, preserving, and submitting information about the data breach)?<\/li>\n<li>Do we try to handle cybersecurity regulatory compliance ourselves, do we seek the services of an outside IT contractor, or do we need some combination of both approaches?<\/li>\n<li>Since these new cybersecurity standards appear to be mind-bogglingly difficult to navigate and not entirely coherent, and since a failure to comply with them could have dramatic adverse consequences for our company, should we be looking at a specialized <strong><em>cyber insurance policy<\/em><\/strong> to supplement our general and professional liability policies?<\/li>\n<\/ul>\n<p>The ultimate deadline for full contractor compliance with most of the new cybersecurity requirements for CDI\/CUI is December 31, 2017, and that date is not likely to change. But the new cybersecurity regulations are already impacting businesses and contracts, especially those in the defense sector.<\/p>\n<p>While DFARS clause 252.204-7012 allows you to notify the DoD (within 30 days) of any cybersecurity requirements that your company has yet implemented at the time of contract award, the DoD still expects you to be moving toward full compliance as rapidly as possible, and to have a remediation plan in place to achieve it by December 31, 2017.<\/p>\n<p>So, if you haven\u2019t already done the following at your company, you need to do them <em>now<\/em>:<\/p>\n<ul>\n<li>Conduct a <strong><em>risk assessment<\/em><\/strong> for cybersecurity regulatory compliance.<\/li>\n<li>Develop a <strong><em>cybersecurity action plan<\/em><\/strong>, based on the assessment findings.<\/li>\n<li>Implement a <strong><em>cybersecurity framework<\/em><\/strong> that is appropriate for your organization.<\/li>\n<\/ul>\n<p><strong><em>Note:<\/em><\/strong> For those who don\u2019t keep up with the latest business jargon, a \u201cframework\u201d includes stuff like organizational infrastructure and job responsibilities; awareness and education programs; organizational culture; and governance (security policies; work processes and procedures; monitoring effectiveness; technical controls; risk assessments and audits; breach response and risk mitigation plans). \u201cImplementing\u201d a framework implies investing company resources in making it happen.<\/p>\n<p>Whether your company is small, mid-sized, or large, if you do business with the Federal government, or with any other companies that do business with the Federal government \u2014 have I left anyone out here? \u2014 you should prioritize <em>both<\/em> regulatory compliance <em>and<\/em> cybersecurity during 2017.<\/p>\n<p>Regulatory compliance is obligatory, of course, because . . . well, it\u2019s the <em>law<\/em>, folks! But cyber-<em>compliance<\/em> is not the same as cyber-<em>security<\/em>, and security is what you really want.<\/p>\n<p>If your goal is simply to avoid fines and penalties, then as long as you\u2019re sure you meet the minimal requirements of compliance, don\u2019t worry.<\/p>\n<p>But if you\u2019re reading this because your goal is to see your company survive and thrive in today\u2019s digitally interconnected business world, and you\u2019re aware of the current security threat landscape, you shouldn\u2019t breathe easy if you\u2019re told that your company is 100% compliant. Breathe easy when you\u2019re confident that your company has good cybersecurity.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>EXPORT COMPLIANCE IN 11 WORDS A Series on Export Compliance Essentials (Part 7 of 12) SECURE! \u00a0 Wherever your business interfaces with the global marketplace, your workforce should be trained to recognize export-controlled technologies and technical data, and equipped with the know-how and tools to comply with ITAR, EAR, and DoD requirements, as well as [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[7,3],"tags":[],"class_list":["post-192","post","type-post","status-publish","format-standard","hentry","category-all","category-compliance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>EXPORT COMPLIANCE IN 11 WORDS (Part 7 of 12) - 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