Congress Passes New Cyber Incident and Ransomware Payment Reporting Legislation

Faegre Drinker Biddle & Reath LLP

The United States Congress recently passed legislation that includes new cybersecurity provisions requiring critical infrastructure providers to report cyber security incidents, including the payment of ransom, to the federal government. The bill, also known as the “Strengthening American Cybersecurity Act of 2022,” passed the Senate by unanimous vote on March 1. It then passed the House of Representatives and was signed into law by President Biden on March 15, 2022.

The new law builds on previous legislative efforts to tighten the nation’s cybersecurity-reporting requirements, and it appears that legislative persistence has finally carried the day. Passed under the fiscal 2022 omnibus spending bill, the new legislation, when it becomes law, will mandate the following:

  • Require federal civilian agencies to report all “substantial” cyber incidents to the Cybersecurity and Infrastructure Security Agency (CISA) within 72 hours
  • Require ransomware payments that are covered within the law to be reported to CISA within 24 hours of payment
  • Require information sharing and better coordination between federal agencies tasked to assist in combatting these attacks
  • Require the authorization of the Federal Risk and Authorization Management Program (“FedRAMP”) for five years so that all federal agencies can adopt cloud-based technologies

“Critical” infrastructure sectors have been previously identified by CISA as:

  • Chemical Sector
  • Commercial Facilities Sector
  • Communications Sector
  • Critical Manufacturing Sector
  • Dam Sector
  • Defense Industrial Base Sector
  • Energy Sector
  • Financial Services Sector
  • Food and Agriculture Sector
  • Government Facilities Sector
  • Healthcare and Public Health Sector
  • Information Technology Sector
  • Nuclear Reactors, Materials and Waste Sector
  • Transportation Sector and
  • Water and Wastewater Systems Sector

CISA will now become the main “hub” for federal reporting of both cyber-attacks on critical infrastructure providers and the payment of any ransomware payments associated with cyber-attacks on these providers. The law also authorizes the Director of the Office and Management and Budget to consult with various federal agencies, including the Department of Justice, to use regulations to implement the new legislation. Finally, CISA will now have subpoena power to use against entities that fail to properly report substantial cybersecurity incidents or ransomware payments. CISA is also mandated to launch a program warning critical infrastructure providers of new and emerging vulnerabilities and to establish a joint “ransomware task force” to better coordinate federal efforts at limiting these types of attacks.

According to CISA Director Jenn Easterly, the legislation is a “game-changer” and will allow CISA to “use these reports from our private sector partners to build a common understanding of how our adversaries are targeting U.S. networks and critical infrastructure.” The new law also includes large budget increases for CISA, the DoD, the Justice Department, the Departments of State and Treasury, and other assorted federal agencies as a means to continue improving federal IT infrastructure and cybersecurity controls.

There is implementation work for CISA as a result of the legislation; the law’s provisions will not come into full force until CISA delineates the necessary rules and regulations to define which entities fall within the critical infrastructure sectors that will be affected by this legislation. Additionally, CISA must clearly denote what types of “substantial” cyber incidents are covered by the law’s reporting requirements. CISA has 24 months from the March 15 bill passage date to issue its proposed rules. Final rules must be issued by CISA within 18 months after the issuance of those proposed rules.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Faegre Drinker Biddle & Reath LLP | Attorney Advertising

Written by:

Faegre Drinker Biddle & Reath LLP

Faegre Drinker Biddle & Reath LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide