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some comments on Europeon crypto (and UK) by Ross Anderson, at Cambridge University
From: David Farber <farber () linc cis upenn edu>
Date: Thu, 23 Jun 1994 20:18:16 -0400
of putting a timelock in his code to enforce payment [C2]. Similar laws have been passed in a number of jurisdictions, and similar problems have arisen; in a field where the technology changes quickly, and both judges and lawmakers lag behind the curve, our next principle is inevitable: \begin{center} \fbox{ \parbox{5.5in}{{\bf Principle 4:} Computer security legislation is highly likely to suffer from the law of unintended consequences. }} \end{center} \section{Standards} Another tack taken by some governments is to try and establish a system of security standards, and indeed there are a number of initiatives in play from various governmental bodies. Often, these are supposed to give a legal advantage to systems which follow some particular standard. For example, to facilitate CREST (the Bank of England's new share dealing system), the Treasury proposes to amend English law so that the existence of a digital signature on a stock transfer order will create `an equitable interest by way of tenancy in common in the ... securities pending registration' [HMT]. On a more general note, some people are beginning to see a TCSEC C2 evaluation as the touchstone for commercial computer security, and this might lead in time to a situation where someone who had not used a C2 product might be considered negligent, and someone who had used one might hope that the burden of proof had thereby passed to someone else. However, in the Munden case cited above, the bank did indeed use an evaluated product - ACF2 was one of the first products to gain the C2 rating - yet this evaluation was not only irrelevant to the case, but not even known to the bank. \begin{center} \fbox{ \parbox{5.5in}{{\bf Principle 5:} Don't try to solve legal problems with system engineering standards. }} \end{center} A related point is that although the courts often rely on industry practice when determining which of two parties has been negligent, existing computer security standards do not help much here. After all, as noted above, they mostly have to do with operating system level features, while the industry practices themselves tend to be expressed in application detail - precisely where the security problems arise. The legal authority flows from the industrial practice to the application, not the other way around. Understanding this could have saved the banks in UK and Norway a lot of legal fees, security expenditure and public embarrassment; in traditional banking, the onus is on the bank to show that it made each debit in accordance with the customer's mandate. \begin{center} \fbox{ \parbox{5.5in}{{\bf Principle 6:} Security goals and assumptions should be based on the existing industry practice in the application area, not on general `computer' concepts. }} \end{center} \section{Abuses} Things become even more problematic when one of the parties to a dispute has used market power, legal intimidation or political influence to shed liability. There are many examples of this: \begin{enumerate} \item We recently helped to evaluate the security of an alarm system, which is used to protect bank vaults in over a dozen countries. The vendor had claimed for years that the alarm signalling was encrypted; this is a requirement under the draft CENELEC standards for class 4 risks [B]. On examination, it was found that the few manipulations performed to disguise the data could not be expected to withstand even an amateur attack. \item Many companies can be involved in providing components of a secure system; as a result, it is often unclear who is to blame. With software products, licence agreements usually include very strong disclaimers and it may not be practical to sue. Within organisations, it is common that managers implement just enough computer security that they will not carry the blame for any disaster. They will often ask for guidance from the internal audit department, or some other staff function, in order to diffuse the liability for an inadequate security specification. \item If liability cannot be transferred to the state, to suppliers, to insurers, or to another department, then managers may attempt to transfer it to customers - especially if the business is a monopoly or cartel. Utilities are notorious for refusing to entertain disputes about billing system errors; and many banking disputes also fall into this category. \end{enumerate} \begin{center} \fbox{ \parbox{5.5in}{{\bf Principle 7:} Understand how liability is transferred by any system you build or rely on. }} \end{center} \section{Security Goals} In case the reader is still not convinced that liability is central, we shall compare the background to ATM cases in Britain and the United States. The British approach is for the banks to claim that their systems are infallible, in that it is not possible for an ATM debit to appear on someone's account unless the card and PIN issued to him had been used in that ATM. People who complain are therefore routinely told that they must be lying, or mistaken, or the victim of fraud by a friend or relative (in which case they must be negligent). The US is totally different; there, in the landmark court case Judd v Citibank [JC], Dorothy Judd claimed that she had not made a number of ATM withdrawals which Citibank had debited to her account; Citibank claimed that she must have done. The judge ruled that Citibank was wrong in law to claim that its systems were infallible, as this placed `an unmeetable burden of proof' on the plaintiff. Since then, if a US bank customer disputes an electronic debit, the bank must refund the money within 30 days, unless it can prove that the claim is an attempted fraud. When tackled in private, British bankers claim they have no alternative; if they paid up whenever a customer complained, there would be `an avalanche of fraudulent claims of fraud'. US bankers are much more relaxed; their practical experience is that the annual loss due to customer misrepresentation is only about \$15,000 per bank [W]. This will not justify any serious computer security programme; so in areas such as New York where risks are higher, banks just use ATM cameras to resolve disputes. One might expect that as US banks are liable for fraudulent transactions, they would invest more in security than British banks do. One of the more interesting facts thrown up by the recent ATM cases is that precisely the reverse is the case: almost all UK banks and building societies now use hardware security modules to manage PINs [VSM], while most US banks do not; they just encrypt PINs in software [A1]. Thus we can conclude that the real function of these hardware security modules is due diligence rather than security. British bankers want to be able to point to their security modules when fighting customer claims, while US bankers, who can only get the advertised security benefit from these devices, generally do not see any point in buying them. Given that no-one has yet been able to construct systems which bear hostile examination, it is in fact unclear that these devices added any real value at all. One of the principles of good protocol engineering is that one should never use encryption without understanding what it is for (keeping a key secret, binding two values together, ...) [AN]. This generalises naturally to the following: \begin{center} \fbox{ \parbox{5.5in}{{\bf Principle 8:} Before setting out to build a computer security system, make sure you understand what its real purpose is (especially if this differs from its advertised purpose). }} \end{center} \section{National Security Interference} In addition to assuming liability for prosecuting some computer disputes which are deemed to be criminal offences, governments have often tried to rewrite the rules to make life easier for their signals intelligence organisations. For example, the South African government decreed in 1986 that all users of civilian cryptology had to provide copies of their algorithms and keys to the military. Bankers approached the authorities and said that this was a welcome development; managing keys for automatic teller machines was a nuisance and the military were welcome to the job. Of course, whenever a machine was out of balance, they would be sent the bill. At this the military backed down quickly. More recently, the NIST public key initiative [C3] proposes that the US government will assume responsibility for certifying all the public keys in use by civilian organisations in that country. They seem to have learned from the South African experience; they propose a statutory legal exemption for key management agencies. It remains to be seen how much trust users will place in a key management system which they will not be able to sue when things go wrong. \section{Liability and Insurance} The above sections may have given the reader the impression that managing the liability aspects of computer security systems is just beyond most companies. This does not mean that the problem should be accepted as intractable, but rather that it should be passed to a specialist - the insurer. As insurers become more aware of the computer related element in their risks, it is likely that they will acquire much more clout in setting security standards. This is already happening at the top end of the market: banks who wish to insure against computer fraud usually need to have their systems inspected by a firm approved by the insurer. The present system could be improved [A4] - in particular the inspections, which focus on operational controls, will have to be broadened to include application reviews. However, this is a detail; certification is bound to spread down to smaller risks, and, under current business conditions, it could economically be introduced for risks of the order of \$250,000. It is surely only a matter of time before insurance driven computer security standards affect not just businesses and wealthy individuals, but most of us [N1]. Just as my insurance policy may now specify `a five-lever mortice deadlock', so the policy I buy in ten years' time is likely to insist that I use accounting software from an approved product list, and certify that I manage encryption keys and take backups in accordance with the manual, if my practice is to be covered against loss of data and various kinds of crime. Insurance-based certification will not of course mean hardening systems to military levels, but rather finding one or more levels of assurance at which insurance business can be conducted profitably. The protection must be cheap enough that insurance can still be sold, yet good enough to keep the level of claims under control. Insurance-based security will bring many other benefits, such as arbitration; any dispute I have with you will be resolved between my insurer and your insurer, as with most motor insurance claims, thus saving the bills (and the follies) of lawyers. Insurance companies are also better placed to deal with government meddling; they can lobby for offensive legislation to be repealed, or just decline to cover any system whose keys are kept on a government server, unless the government provides a full indemnity. A liability based approach can also settle a number of intellectual disputes, such as the old question of trust. What is `trust'? At present, we have the US DoD `functional' definition that a trusted component is one which, if it breaks, can compromise system security, and Needham's alternative `organisational' definition [N2] that a trusted component is one such that, if it breaks and my company's system security is compromised as a result, I do not get fired.
From the liability point of view, of course, a component which can be
trusted is one such that, if it breaks and compromises my system security, I do not lose an unpredictable amount of money. In other words: \begin{center} \fbox{ \parbox{5.5in}{{\bf Principle 9:} A trusted component or system is one which you can insure. }} \end{center} \vspace{4ex} \small \begin{thebibliography}{TCPEC} \bibitem[A1]{A1} RJ Anderson, ``Why Cryptosystems Fail'', in {\em Proceedings of the 1st ACM Conference on Computer and Communications Security} (Fairfax 1993) pp 215 - 227 \bibitem[A2]{A2} RJ Anderson, ``Why Cryptosystems Fail'', to appear in {\em Communications of the ACM} \bibitem[A3]{A3} RJ Anderson, ``Making Smartcard Systems Robust'', submitted to {\em Cardis 94} \bibitem[A4]{A4} RJ Anderson, ``Liability, trust and Security Standards'', in {\em Proceedings of the 1994 Cambridge Workshop on Security Protocols} (Springer, to appear) \bibitem[A5]{A5} J Austen, ``Computer Crime: ignorance or apathy?'', in {\em The Computer Bulletin v 5 no 5} (Oct 93) pp 23 - 24 \bibitem[AN]{AN} M Abadi, RM Needham, `Prudent Engineering Practice for Cryptographic Protocols', in {\em Proceedings of the 1994 IEEE Symposium on Security and privacy} (to appear) \bibitem[B]{B} KM Banks, Kluwer Security Bulletin, 4 Oct 93 \bibitem[BN]{BN} Behne v Den Norske Bank, Bankklagenemnda, Sak nr: 92457/93111 \bibitem[C1]{C1} T Corbitt, ``The Computer Misuse Act'', in {\em Computer Fraud and Security Bulletin} (Feb 94) pp 13 - 17 \bibitem[C2]{C2} A Collins, ``Court decides software time-locks are illegal'', in {\em Computer Weekly} (19 August 93) p 1 \bibitem[C3]{C3} S Chokhani, ``Public Key Infrastructure Study (PKI)'', in {\em Proceedings of the first ISOC Symposium on Network and Distributed System Security} (1994) p 45 \bibitem[DP]{DP} DW Davies and WL Price, {\em `Security for Computer Networks'}, John Wiley and Sons 1984. \bibitem[E]{E} B Ellis, ``Prosecuted for complaint over cash machine'', in {\em The Sunday Times}, 27th March 1994, section 5 page 1 \bibitem[ECMA]{ECMA} European Computer Manufacturers' Association, {\em `Secure Information Processing versus the Concept of Product Evaluation'}, Technical Report 64 (December 1993) \bibitem[HMT]{HMT} HM Treasury, {\em `CREST - The Legal Issues'}, March 1994 \bibitem[ITSEC]{ITSEC} {\em `Information Technology Security Evaluation Criteria'}, June 1991, EC document COM(90) 314 \bibitem[J]{J} RB Jack (chairman), {\em `Banking services: law and practice report by the Review Committee'}, HMSO, London, 1989 \bibitem[JC]{JC} Dorothy Judd v Citibank, {\em 435 NYS, 2d series, pp 210 - 212, 107 Misc.2d 526} \bibitem[L]{L} HO Lubbes, ``COMPUSEC: A Personal View'', in {\em Proceedings of Security Applications 93} (IEEE) pp x - xviii \bibitem[MB]{MB} McConville \& others v Barclays Bank \& others, High Court of Justice Queen's Bench Division 1992 ORB no.812 \bibitem[MM]{MM} CH Meyer and SM Matyas, {\em `Cryptography: A New Dimension in Computer Data Security'}, John Wiley and Sons 1982. \bibitem[N1]{N1} RM Needham, ``Insurance and protection of data'', {\em preprint} \bibitem[N2]{N2} RM Needham, comment at 1993 Cambridge formal methods workshop \bibitem[P]{P} WR Price, ``Issues to Consider When Using Evaluated Products to Implement Secure Mission Systems'', in {\em Proceedings of the 15th National Computer Security Conference}, National Institute of Standards and Technology (1992) pp 292 - 299 \bibitem[R]{R} J Rushby, {\em `Formal methods and digital systems validation for airborne systems'}, NASA Contractor Report 4551, NA81-18969 (December 1993) \bibitem[RLN]{RLN} R v Lock and North, Bristol Crown Court, 1993 \bibitem[RS]{RS} R v Small, Norwich Crown Court, 1994 \bibitem[T]{T} ``Business Code'', in {\em The Banker} (Dec 93) p 69 \bibitem[TCSEC]{TCSEC} {\em `Trusted Computer System Evaluation Criteria'}, US Department of Defense, 5200.28-STD, December 1985 \bibitem[TW]{TW} VP Thompson, FS Wentz, ``A Concept for Certification of an Army MLS Management Information System'', in {\em Proceedings of 16th National Computer Security Conference, 1993} pp 253 - 259 \bibitem[VSM]{VSM} {\em `VISA Security Module Operations Manual'}, VISA, 1986 \bibitem[W]{W} MA Wright, ``Security Controls in ATM Systems'', in {\em Computer Fraud and Security Bulletin}, November 1991, pp 11 - 14 \end{thebibliography} \end{document}
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