War, cyber war and cyber operation exclusion clauses

Last November 25, 2021, the Lloyd’s Market Association published 4 model clauses (LMA 5564/5565/5566/5567) titled “war,cyber war and cyber operation exclusion clauses”. The objective is to exclude from insurance and reinsurance policies, all losses caused by war and cyber operations.

I - The 4 clauses provide different levels of covers.

- Exclusion n°1 (LMA 5564): excludes losses from all kinds of cyberattacks by State actors

- Exclusion n°2 (LMA 5565): covers losses (with specified coverage limits): that are not due to retaliatory operations between the 5 “specified States”; that do not have a major detrimental impact on national security and defense

- Exclusion n°3 (LMA 5566): provides the same conditions as exclusion n°2, except that it does not specify coverage limits

- Exclusion n°4 (LMA 5567): same coverage as exclusion n°3, but it adds the coverage of effects on “bystanding cyber assets”. 

II - The four documents are titled “War, Cyber War and Cyber Operation Exclusion”. The definitions of “war” and “cyber operations” are provided. But no definition of “cyber war” is proposed. “Cyber operation means the use of a computer system by or on behalf of a state to disrupt, deny, degrade, manipulate or destroy information in a computer system of or in another state”.

III - Although the definition of “cyber operations” focuses on state-to-state aggressive activities, it also includes operations realized “on behalf” of a State. Such perimeter may include a wide spectrum of actors (state actors such as intelligence agencies, militaries, and non-state actors such as organized crime groups, terrorist organizations…) and situations.

IV - The approach is constructed on the basis of only 2 categories of actors: the State and the insurer.  

- State level:

o   “States: means sovereign state »

o   Government of the State (intelligence, security services) (who is in charge of the attribution process)

o   Vital functions of a State: “financial institutions and associated financial market infrastructure, health services or utility services”

o   “Specified States means China, France, Germany, Japan, Russia, UK or USA”

o   “Impacted state means any state where a cyber operation has had a major detrimental impact on: 11.1. the functioning of that state due to the direct or indirect effect of the cyber operation on the availability, integrity or delivery of an essential service in that state; and/or 11.2. the security or defence of that state.

o   Those who act “on behalf” of a State

- The insurer

V - The coverage of losses is based on the attribution of the cyber-operations. Who is in charge of the attribution?

a) the government of the State where the attacked system is located,

b) if the government of the State is unable to attribute the attack, then “it shall be for the insurer to prove attribution by reference to such other evidence as is available”. 

Report of the GAO on the implementation of FISMA requirements

The recent report of the GAO on the implementation of FISMA requirements, which was released on January 11, 2022, highlights the insufficient enforcement of the rules defined by law.

The Federal Information Security Modernization Act of 2014 (FISMA) was enacted to "provide a mechanism for improved oversight of agencies' information security programs". According to this new report, “inspectors general (IG) identified uneven implementation of cyber security policies and practices.” In 2020, “seven of the 23 civilian Chief Financial Officers Act of 1990 (CFO) agencies had effective agency-wide information security programs” (in 2017 and 2018, only 6 agencies complied with the rules, and 5 in 2019). 

GAO recommendations are only partially taken into account: “GAO has also routinely reported on agencies’ inconsistent implementation of federal cybersecurity policies and practices. Since 2010, GAO has made about 3,700 recommendations to agencies aimed at remedying cybersecurity shortcomings; about 900 were not yet fully implemented as of November 2021.”  The Department of Defense does not fully comply with the rules and this situation is impacting its cybersecurity: “90 percent of cyberattacks could be defeated by implementing basic cyber hygiene and sharing best practices”. The GAO made a series of recommendations to the DoD, so that the latter improves its “cyber hygiene”. But « As of December 2021, DOD had not yet implemented any of the seven recommendations ».  

What then are the reasons for such insufficient application of the law? Some have been formulated: according to the agencies, this is due to the « lack of resources » (be it human resources, time restrictions, etc.). They claim they do “not have enough time to implement new requirements and/or remediate findings identified in the annual FISMA reviews before the next FISMA review starts”. They also criticize the purely bureaucratic approach imposed on them by the FISMA: “FISMA reviews are too focused on compliance and are not focused enough on effectiveness”.  

Countering Russian State-Sponsored cyber-attacks

“Understanding and Mitigating Russian State-Sponsored Cyber Threats to U.S. Critical Infrastructure”. January 11, 2022. 

This document, co-authored by three US agencies (the CISA, NSA and FBI), provides an overview of Russian state-sponsored (APT) cyber-attack methods and actors. The document recalls a whole set of cybersecurity rules that organizations must put in place in order to anticipate attacks, detect them and know how to deal with them. The implementation of counter-attacks (offensive responses) is not mentioned in this report.

Budapest Convention on Cybercrime: 20 years of existence

The Budapest Convention on Cybercrime (ETS n°185) was enacted and opened for signature on November 23, 2001. Since then, the Convention ha entered into force in 66 countries worldwide.  The Council of Europe website provides the list of States which have adopted the Convention. We will emphasize that : 

- All EU member States are party to the Convention.

-  Great powers have joined in this project (the United States, Canada, Australia...). But many others, which appear to be hotspots of the international cybercrime, are absent (Brazil, China, Russia, India...)

The map below shows all of the countries in which the Convention has entered into force since 2001.

Even if the number of partners is honorable today, it should be noted that this result is the fruit of 20 years of work. The annual rate of integration remains relatively low (below, the number of countries which annually adopt the Convention).

Conferences on Cyber Security and Defense in 2022 and 2023

The conferenceindex.com website provides a very long list of cybersecurity and defense conferences organized around the world in 2022 and 2023: 

- 331 conferences in 2022

- 222 conferences from January to september 23, 2023. 

Here is the geographic distribution of 2022 Conferences. The top-5 countries are: United States (39 conferences), Italy (26), Turkey (24), United Arab Emirates (24), and France (19). 

Let’s remind that the authors of this inventory do not claim to provide a completely exhaustive inventory. The figures presented here must therefore be used with all the necessary precautions.

International Conference on Cryptology, Coding Theory and Cyber Security 2022 (I4CS22)

The first International Conference on Cryptology, Coding Theory and Cyber Security 2022 (I4CS22) will be held on 4-15-16 Jully 2022 in Casablanca, Morocco. I4CS is an international conference on the theory and applications of cryptology, coding theory, and cyber security. 

Paper submission; February 16, 2022. 

Rapport de l'Atlantic Council sur les conflits à venir

Alors que le gouvernement américain se prépare à publier une nouvelle stratégie de défense nationale, le think The Atlantic Council a proposé fin décembre un rapport intitulé “Seizing the Advantage: A Vision for the Next US NationalDefense Strategy” (72 pages, Washington, 21 décembre 2021) dans lequel il dresse un bilan de la situation dans laquelle se trouve l'Amérique aujourd'hui sur le plan de la sécurité et de la défense nationale et propose quelques mesures qui devraient être prises dans l'urgence pour contrer les velléités de la Chine et de la Russie, menaces à la paix mondiale. 

Le rapport s’ouvre sur une affirmation discutable : « the risks to the United States, its interests, and those of its allies and partners are more pronounced than even four years ago”. Ce qui nous semble discutable ici, c’est cette assimilation systématique qui est faite entre les intérêts des Etats-Unis et ceux de ses alliés ou partenaires. La Chine et la Russie défient l’Amérique, et si la pression s’exerce également sur d’autres Etats dans le monde, que ce soit en Asie, en Europe ou ailleurs, elle n’est sans doute pas partout la même. Mais cette Amérique là se plaît toujours à faire universels ses projets et ses intérêts.

Dans ce rapport, plus généralement dans l’approche géostratégique et politique américaine officielle, la menace terroriste est désormais reléguée à l’arrière-plan. Exit la menace terroriste islamiste, de l’Etat islamique? Dès les premières pages du document, est insérée une citation extraite de la National Defense Strategy (2018) du Département de la Défense américain : « Inter-state strategic competition, not terrorism, is now the primary concern in U.S. national security ».

Il ne resterait donc plus, pour décider du sort du système international, que 3 Etats : les Etats-Unis, menacés par la Chine et la Russie. Les autres acteurs que sont l’Iran et la Corée du Nord ajoutent bien sûr à la menace mais ne semblent pas aussi centraux. Viennent complexifier la situation bien d’autres défis : la violence des organisations extrémistes, le changement climatique, l’augmentation de l’arsenal nucléaire des puissances hostiles, etc.

Ce conflit avec la Chine et la Russie est analysé sous l’angle des affrontement hybrides (désignant une combinaison d’actions de nature politique, économique, diplomatique, militaire, d'opérations d’information, de cyber-opérations, d'opérations spéciales…), formes qu’il prend aujourd’hui. Mais la vision du conflit et du système international délivrée est classique, renvoyant à des affrontements frontaux entre grandes puissances, entre Etats, dans lesquels est réaffirmée l’importance de facteurs tels que la masse ou le nombre (d’armes autonomes, de missiles, de cyberattaques…), la vitesse (des frappes, de la prise de décision…) et la surprise.

Pour contrer ces menaces, le think tank The Atlantic Council préconise :

- D’adopter des mesures offensives d’affrontement hybride dans la zone grise (formes d’affrontements en dessous du seuil de la guerre armée), de manière urgente

- De construire les forces de défense capables de se battre dans ce nouvel espace de conflit, en sachant s’adapter aux nouvelles conditions ;

- De redynamiser dans le monde les partenariats de défense, avec les acteurs habituels, et de nouveaux ;

- De focaliser les efforts sur la dimension technologique. 

Dans le discours américain il y a donc deux niveaux de légitimation de l’action. Le premier consiste à désigner l’autre comme étant l’adversaire, la menace existentielle. Le second consiste à affirmer que l’autre est l’initiateur du conflit, et que la nature des agressions subies n'est qu'une réaction nécessaire qui justifie les moyens mobilisés pour les contrer. Le récit est somme toute conventionnel. Le « cyber » n’y occupe pas une place centrale, et cela contribue aussi à revenir à une vision des conflits armés qui bien que très technologisés, s’expriment dans tous les domaines. On notera enfin que la vision ou les intérêts de l’Union Européenne ne sont guère invoqués dans cette lecture des rapports de force mondiaux.