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The HSD Trendmonitor is designed to provide access to relevant content on various subjects in the safety and security domain, to identify relevant developments and to connect knowledge and organisations. The safety and security domain encompasses a vast number of subjects. Four relevant taxonomies (type of threat or opportunity, victim, source of threat and domain of application) have been constructed in order to visualize all of these subjects. The taxonomies and related category descriptions have been carefully composed according to other taxonomies, European and international standards and our own expertise.
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IoT security challenge: supply chain security
5.6 SUPPLY CHAIN SECURITY
Modern products are assemblies of parts and components supplied by multiple vendors. To accelerate time-to-market and to reduce costs, device manufacturers increasingly use as many as possible off-the-shelf components using complex, globally distributed, and interconnected supply chains composed of various entities with multiple tiers of outsourcing. However, vulnerabilities can be introduced and exploited at any point in the supply chain. Cyber supply chain risks include the insertion of counterfeits, unauthorised production, tampering, theft, insertion of malicious software and hardware, and poor manufacturing and development practices upstream.
5.6.1 Current Landscape and Recent Developments
Managing cyber supply chain risks requires ensuring the integrity, security, quality and resilience of the supply chain and its products and services. Supply chain security is an often-overlooked component in IoT security even though, by some estimates, up to 80% of breaches may originate in the supply chain164. In 2011, the Semiconductor Industry Association estimated165 the cost of electronics counterfeiting at US$7.5 billion per year in lost revenue. Device compromise in transit and component-level vulnerabilities are other supply chain risks that can lead to significant consequences. The U.S. National Institute of Standards and Technology (NIST)166 identifies Cyber Supply Chain Risk Management (C-SCRM) as the process of identifying, assessing, and mitigating the risks associated with the distributed and interconnected nature of IT/OT products and service supply chains.167 NIST’s workshop on Best Practices in C-SCRM168 discussed that the global complexity of supply chains, the increase in potential disruptions, and emerging cybersecurity risks to the supply chain have dramatically increased the risks that: – Suppliers could intentionally or unintentionally introduce software, firmware, or hardware in which confidentiality, integrity or availability has been compromised. – Supply chain disruptions could create a scramble for parts that enables poor quality or counterfeit products to enter the supply chain. – High-value intellectual property shared with suppliers could be misused. – Service suppliers – including contract manufacturers, outsourced legal and accounting, and repair and maintenance providers – could tamper with a company’s information based on their access to a company’s information system, if the data is not adequately protected. – Adversaries can use vulnerabilities of different components within the supply chain to attack a company’s information systems. IoT supply chain risks, and more generally IT supply chain risks, are associated with an organisation’s decreased visibility into, and understanding of, how the technology they acquire is developed, integrated, and deployed.169 Maintaining sufficient controls to minimise risk and maximise transparency requires close relationships with vendors, clear understanding of the risks involved and strict adherence to procedure. According to NIST, a primary objective of C-SCRM is to identify, assess, and mitigate “products and services that may contain potentially malicious functionality, are counterfeit, or are vulnerable due to poor manufacturing and development practices within the cyber supply chain.” C-SCRM activities include: – Determining cybersecurity requirements for suppliers, – Enacting cybersecurity requirements through formal agreement (e.g., contracts), – Communicating to suppliers how those cybersecurity requirements will be verified and validated, – Verifying that cybersecurity requirements are met through a variety of assessment methodologies, – Governing and managing the above activities
The U.K.’s National Cyber Security Centre (NCSC)170 provides 12 principles for supply chain security, including the establishment of minimum security needs for suppliers and building security considerations into contracting processes (and ensuring that the suppliers do the same). While the principles proposed by NCSC may appear intuitive, they are followed by a surprisingly low percentage of organisations. The U.K. Cyber Security Breaches Survey 2016171 survey showed that, while most businesses have rules or controls for their own operations (and most medium or large organisations have formally documented their approaches), they are much less likely to set minimum standards for their suppliers: only 13% were seen to do this.
Supply chain security is predicated on careful supplier management. Examples of best practices in supplier management from a security perspective include the following172. – Procurement and sourcing processes are developed jointly with input from IT, security, engineering, and operations personnel; sourcing decisions receive multistakeholder input. – Standard security terms and conditions are included in all requests for proposals (RFPs) and contracts, tailored to the type of contract and business needs. – Since many risk assessments depend on supplier selfevaluation, a number of companies employ on-site verification and validation of these reviews. Some companies cross-train personnel to be stationed at supplier companies so that security criteria can be monitored year-round. – New suppliers enter a test and assessment period – to test the capabilities of the supplier and its compliance with various requirements – before they actively join the supply chain. In high risk areas, for example, a supplier might go through a series of pilots before they fully enter the supply chain. – Quarterly reviews of supplier performance are assessed among a stakeholder group. – Annual supplier meetings ensure that suppliers understand the customers’ business needs, concerns and security priorities. – Mentoring and training programs are offered to suppliers, especially in difficult or key areas of concern to the company, such as cybersecurity. It may be noted that organisations wield both contractual and economic power over suppliers: contracts can stipulate security requirements and penalties in detail, and economic clout can be multiplied via industry and inter-governmental alliances. According to NIST, organisations can pose the following specific questions173 to suppliers to determine the practices. – Is the supplier’s software/hardware design process documented? Repeatable? Measurable? – How is configuration management performed? Quality assurance? How is code tested for quality or vulnerabilities? – What steps are taken to “tamper proof” products? Are backdoors closed? – Is the mitigation of known vulnerabilities factored into product design (through product architecture, run-time protection techniques, code review)? – How does the supplier stay current on emerging vulnerabilities? What are the capabilities to address new “zero day” vulnerabilities? – What controls are in place to manage and monitor production processes? – What levels of malware protection and detection are performed? – What physical security measures are in place? Documented? Audited? – What access controls, both cyber and physical, are in place? How are they documented and audited? – How do they protect and store customer data? How is the data encrypted? – How long is the data retained? – How is the data destroyed when the partnership is dissolved? – What type of employee background checks are conducted and how frequently? – What security practice expectations are set for upstream suppliers? How is adherence to these standards assessed? – How secure is the distribution process? Have approved and authorised distribution channels been clearly documented? – What is the component disposal risk and mitigation strategy? – How does the supplier ensure security throughout the product life-cycle? NIST’s workshop on Best Practices in C-SCRM further identified174 that vetting supply chain partners beyond the first tier is a challenge for many companies: manual methods can be difficult and do not scale for companies with hundreds or thousands of tier-one suppliers and numerous sub-tier suppliers. Additionally, smaller companies lack the economic power and relationships to get the information they need. To fill these gaps, consultants such as BitSight175 offer to collect, manage and centralise supplier risk management data. This can result in increased efficiencies for organisations as well as reduce the burden on suppliers who may be asked to fill out similar informational forms for each customer. According to ENISA’s Baseline Recommendations176, “For IoT hardware manufacturers and IoT software developers it is necessary to adopt cyber supply chain risk management policies and to communicate cyber security requirements to suppliers and partners.” Standards such as ISO28000177 specify supply chain security requirements in sufficient detail to allow self-declaration of conformance by an organisation or, alternatively, third-party certification by an accredited body to demonstrate contribution to supply chain security. Emphasising the importance of supply chain risks, NIST’s Risk Management Framework (RMF)178, which is published as NIST SP 800-37 Revision 2, integrates supply chain risk management concepts into the RMF to protect against untrustworthy suppliers, insertion of counterfeits, tampering, unauthorised production, theft, insertion of malicious code, and poor manufacturing and development practices throughout the SDLC.
5.6.2 Key Findings
– IoT hardware and software manufacturers and suppliers should adopt a cyber supply chain risk management framework (ISO28000, NIST).
– Cybersecurity requirements, risk and liability should be cascaded into the supply chain via contractual agreements. Organisations wield both contractual and economic power over suppliers.
– It is important to encourage the use of open frameworks and provide transparency for supply chain security information flows.