I. Introduction

Rarely does a day go by in which some variety of cyber attack is not front-page news. From Sony to JP Morgan, Saudi Aramco to the Ukraine crisis, cybersecurity is increasingly taking center stage in diverse arenas of geopolitics, international economics, security, and law. In mid-2015 alone numerous high-profile incidents came to light involving both the public and private sectors, including the breach of more than twenty-one million current and former federal employees’ private information from the U.S. Office of Personnel Management.1 Yet despite the increasing proliferation of these incidents, the field of international cybersecurity law and policy remains relatively immature. For example, although there has been a relative abundance of scholarship exploring the contours of the law of cyber war, far less attention has been paid to defining a law of cyber peace applicable below the armed attack threshold at which point the law of armed conflict is activated.2 This is surprising, since the vast majority of cyber attacks do not cross this threshold.3 Among the most important unanswered questions is what exactly nations’ due diligence obligations to secure their networks and to prosecute or extradite cyber attackers are. The International Court of Justice (ICJ) has some guiding jurisprudence on this point. The Corfu Channel case stated that one country’s territory should not be “used for acts contrary to the rights of other States.4 But analogizing is required, and these cases are not dispositive, requiring a review of stakeholder practice. A wealth of information is available in the arena of cybersecurity due diligence from both the public and private sectors, that has, to date, been largely untapped, that could help answer the question of what steps nations and companies under their jurisdiction should take to secure their networks.

This Article reviews the arguments surrounding the creation of a cybersecurity due diligence norm and argues for a proactive regime that takes into account the common but differentiated responsibilities of various stakeholders in cyberspace. The analogy is drawn to cybersecurity due diligence in the private sector and the experience of the 2014 National Institute of Standards and Technology Cybersecurity Framework (NIST Framework) to guide and enrich the discussion.5 Ultimately, we argue that international jurisprudence has an invaluable role to play, but the experience of national regulators and the private sector is also informative in this space, especially given the robust and necessary public-private cross-pollination that occurs when clarifying and spreading cybersecurity best practices. Yet despite the importance of due diligence, this is a topic that has received remarkably little attention in the literature to date.6

This Article begins in Section II by reviewing the applicable ICJ jurisprudence and literature on cybersecurity due diligence under international law. In Section III, we turn to national case studies to help flesh out a potential cybersecurity due diligence norm focusing on the cyber powers of the United States, Germany, and China. In addition, we review lessons from the private-sector cybersecurity due diligence context, focusing on mergers and acquisitions and supply chain management, to better understand contemporary risk mitigation realities. Finally, we conclude with some implications for managers and policymakers.

II. Unpacking Due Diligence Under International Law

International law has been defined as the legal rules, norms, and standards that apply between States and between States and non-State actors, including international organizations and multinational companies enjoying legal personality.7 The primary sources of international law include treaties, general principles of law, and custom, the third of which requires evidence of State practice that nations follow out of a sense of legal obligation, known as opinio juris.8 The subsidiary sources of international law include judicial decisions and scholarly writing.9 Given the recent nature and rapid development of cyber-capabilities, there are comparatively few treaties that specifically address the rights and obligations of States vis-a-vis these cyber-capabilities, with the notable exception of the Budapest Convention discussed below.10 Absent a robust treaty regime and given the geopolitical difficulties of negotiating new agreements in this area, it is vital to clarify the role of customary international law as it relates to due diligence.

A. An Introduction to Customary International Cybersecurity Law

One precedent informing customary international cybersecurity law was articulated by the ICJ in the Nicaragua v. United States case (Nicaragua), which involved a dispute over the United States’ involvement with the Contra rebellion in Nicaragua.11 In Nicaragua, the ICJ held that customary international obligations would arise from the consistent, widespread practice of States engaging in specific acts or omissions, performed out of a sense of obligation that such acts or omissions were required by international law (opinio juris).12 The combination of opinio juris and State practice performed by a significant number of States and without the express disavowal of a significant number of other States, gives rise to international obligations under customary international law.13 The underlying rationale is that this combination reflects a consensus in the international community that the actions taken represent an international obligation.

Despite Nicaragua’s clear articulation of the rule, in practice, the development of customary international law presents a temporal dilemma. For a State to engage in actions out of a sense of legal duty, this decision presupposes the existence of such a duty, and therefore the prior existence of customary international law on a certain issue.14 To help resolve this dilemma, Professor Frederic Kirgis argued for what he calls a “sliding scale” approach.15 Professor Kirgis argues State practice and opinio juris need to be understood on a spectrum, wherein the requirement for opinio juris increases as the evidence of State practice decreases. Rather than impose strict requirements for both State practice and opinio juris, the sliding scale approach argues that a strong history of State practice can give rise to international obligations absent opinio juris.16 Likewise, compelling opinio juris could give rise to international obligations with little evidence of State practice.17 The sliding scale approach may prove particularly important in the cybersecurity realm as these novel technologies have developed too rapidly for evidence of widespread State practice to emerge, yet compelling opinio juris may still form the basis for international obligations.

Proving opinio juris, however, is a difficult task, especially in the cyber context. The temporal dilemma makes pointing to existing rules challenging, so the preferred method is to identify broad principles that enjoy widespread international agreement, which the ICJ suggests may be evidenced by treaties.18 Indeed, most courts rely on treaties to identify opinio juris, often exclusively so.19 Yet in the cyber realm, treaties have largely focused on implementing domestic cybercrime laws and have done relatively little to address cybersecurity standards, leaving such decisions to the private sector and standards bodies such as the NIST Framework, discussed below.20

So using cybercrime as an example, international agreements like the Budapest Convention, the African Union Convention on Cybersecurity and Data Protection, and the various Association of Southeast Asian Nations working groups on cybercrime all could serve as opinio juris that States have an obligation to enact and enforce cybercrime laws within their territories and to cooperate to prosecute and extradite cybercriminals. Even though these agreements often lack binding language, they nonetheless suggest a growing international consensus that the establishment of domestic cybercrime laws is an international obligation.21 Similarly, the Organization of American States has also encouraged Member States to join the Budapest Convention and to increase regional cooperation to mitigate cybercrime, whereas a nonbinding U.N. General Assembly Resolution calls on States to “eliminate safe havens” for cybercriminals.22 Declarations like these, although non-binding, serve as further evidence of international consensus regarding cybercrime. While it is unlikely that a non-signatory State would be bound to the specific terms of a treaty to which it did not sign—particularly in the short term—that treaty may still serve to identify broad principles that form opinio juris and thereby can build a foundation for international obligations.

The search for cybersecurity opinio juris is further complicated by the multifaceted cyber threat comprising cybercrime, espionage, terrorism, and war. While the classification of State cyber-activities is a well-known problem,23 the fact that these activities are so widespread suggests a lack of opinio juris against aggressive State cyber-activity below the armed-attack threshold. The ambiguity surrounding State cyber-activities is further reinforced by discussions of the international law relating to espionage, which is largely unregulated outside the law of war context.24 Similarly, domestic cybersecurity practices are highly variable and can involve the surreptitious installation of malware—as alleged of Chinese telecommunications providers and the National Security Agency (NSA) alike—discussed further below.25 Given the relative lack of multilateral progress, claiming a widespread consensus for an underlying cybersecurity norm is challenging: a situation that can only be marginally mitigated by investigating related ICJ jurisprudence on the subject.

B. ICJ Jurisprudence as It Relates to Cybersecurity Due Diligence

Although the ICJ has never directly addressed cybersecurity due diligence requirements, its cases discussing due diligence generally can serve as broad guideposts to infer cyber-specific applications. It is worth noting that these cases all arose prior to the proliferation of cyber attacks, but some of the principles that underlay the cases, including Corfu Channel, Trail Smelter, and Nicaragua, may still have some applicability.26 Before reviewing these cases though, it is first important to define “cybersecurity due diligence.” In the transactional context, this term has been defined as “‘the review of the governance, processes and controls that are used to secure information assets.’”27 The concept as it is used in this Article builds from this definition and may be understood as the customary national and international obligations of both State and non-State actors to help identify and instill cybersecurity best practices and effective governance mechanisms so as to promote cyber peace through enhancing the security of computers, networks, and Information and Communications Technology (ICT) infrastructure. Cybersecurity due diligence obligations may exist between States, between non-State actors (for example, private corporations, end-users), and between State and non-State actors. Applicable instruments include technical standards, legal requirements born from treaty or custom, as well as national policies and private-sector industry norms, discussed below.28

We will proceed by highlighting three international obligations identified by the ICJ: the duty to warn, the “no harm” principle, and non-intervention, which we will use to infer cyber-specific applications and identify potential problems. We will then go on to address the law governing countermeasures for when an international obligation is violated, address its applicability to cyber-operations, and consider the implications for cyber due diligence.

1. Corfu Channel and the duty to warn.

One of the earliest ICJ cases on the issue of international due diligence standards is the 1947 resolution of the Corfu Channel dispute.29 In this instance, two British warships struck mines and were sunk in the Corfu Channel, an international strait located in Albanian territorial waters. The British brought the case before the ICJ, which focused primarily on the right of innocent passage and on the duty of the Albanian government to warn the British of the mines’ existence. Although the Court did not find evidence that the Albanian government placed the mines itself, it did conclude the Albanian government should have known of the mines’ existence, and therefore had a duty to warn the British warships. The ICJ based its decision on “certain general and well-recognized principles,” specifically “every State’s obligation not to allow knowingly its territory to be used for acts contrary to the rights of other States.”30

This obligation, although articulated in the context of domestic waterways, carries over into the cybersecurity realm. The most direct cyber-parallel would be a duty between States for the host State to warn other States operating within the host State’s domestic networks of vulnerabilities known to exist on those networks, but this might extend more generally to a duty to warn other States of vulnerabilities detected in that other State’s or a third State’s networks.31 While this principle is unlikely to require the warning State to identify vulnerabilities with particularity, it could require a State to warn other States of the existence of the equivalent of “cyber mines” (such as logic bombs).32 The underlying principle of these duties, drawn from Corfu Channel, is that States have a duty to warn other States of known or foreseeable harms, particularly when those harms arise from within the warning State’s sovereign territory. However, whether such duties could effectively coexist with the current international standards regarding espionage, discussed above, and the exceptions for national security, discussed below, is not yet apparent.33 Nor is it obvious how this reasoning will apply to the increasing use of cloud-based computing by companies and governments and the related jurisdictional issues that such use entails.34

Importantly, Corfu Channel articulated different standards of proof for direct State actions and omissions, the latter of which would govern the duty to warn. The standard required to prove a State action was not specifically stated, although the ICJ noted that it required “a degree of certainty that has not been reached here,” whereas to prove an omission required “no room for reasonable doubt.”35 Some commentators have noted that the language used for omissions appears to reflect a higher standard than that for direct actions.36 Nonetheless, omissions are likely to be easier to prove in practice, as the ICJ is more willing to accept circumstantial evidence in these instances, particularly when the opposing party controls the direct evidence.37 Consequently, in Corfu Channel, although the British government failed to meet the standard of proof that the Albanian government had placed the mines, it nonetheless was able to satisfy the evidentiary burden to prove the Albanian government would have known of the mines’ existence, and therefore entailed the duty to warn. This issue is relevant to cyber attacks since even though a given exploit may be launched from within a State’s territorial boundaries, attributing it back to that State’s government is no easy feat.38

The attribution problem may become less burdensome, however, when attempting to prove the State’s knowledge of attacks within its territory given Corfu Channel’s allowance for “more liberal recourse to inferences of fact and circumstantial evidence” when the evidence is controlled by the opposing State.39 Although the mere fact that the activity occurred in the State’s territory is not evidence of knowledge, activities such as the use of the State’s non-commercial critical infrastructure may serve as a rebuttable presumption that the State had knowledge of the attack.40 Some commentators go even further and assert that a strict liability regime is appropriate if that State fails to enact or enforce appropriate cyber-legislation, citing a failure to satisfy a State’s duty to prevent cyber-attacks within its own territory.41 Regardless of the viability of such an expansive view of State responsibility, Corfu Channel proves the ICJ will not absolve a State of liability for actions occurring within its territory solely due to a lack of direct attribution to the State.

2. Trail Smelter and the “no harm” principle.

The ICJ again addressed the issue of due diligence in the Trail Smelter dispute, which involved the emission of environmentally hazardous materials across the U.S.–Canadian border, raising the question of what obligations States owe neighboring States. This case represented an early conflict between the historic system of territorial sovereignty and the newer conceptions of jurisdiction based upon activities that have substantial effects domestically. Ultimately, Trail Smelter held that “no State has the right to use or permit the use of its territory . . . to cause injury by fumes . . . to the territory of another . . . when the case is of serious consequence and the injury is established by clear and convincing evidence.”42 Although directed towards the emission of fumes, Trail Smelter has come to represent the broader “no harm” principle, which requires of States “that activities within their jurisdiction or control respect the environment of other States.”43

This “no harm” principle, although directed towards environmental harms, enjoys parallels with cybersecurity, and may serve as the foundation for a broader State obligation to prohibit domestic activities that would result in “serious consequences” internationally. Specifically, the analogy could be drawn such that if noxious cyber-activities from one State cause serious repercussions in another, then the offending State has a duty to mitigate the threat. Indeed, as with environmental pollution, overuse can occur in cyberspace, such as when spam messages consume limited bandwidth, which has been called a form of “information pollution,” and Distributed Denial of Service attacks that can cause targeted websites to crash through too many requests for site access.44 However, though recognized by the ICJ, this precedent does not enjoy significant State practice, since recognizing it would likely mean litigation surrounding a potentially vast array of transboundary pollution; a laudable goal to be sure, but an impracticable one for the foreseeable future. Yet Trail Smelter’s reference to cases of “serious consequence” ultimately suggests that State practice may exist in maintaining noxious domestic activity below a certain threshold of permissibility, albeit a high one, and therefore could support a broader no harm principle in customary international law applicable to cyber attacks.45

3. Nicaragua and non-intervention.

Perhaps the least clear, yet potentially most far-reaching precedent informing an international cybersecurity due diligence obligation from the ICJ is Nicaragua, which recognized the principle of non-intervention and the importance of State sovereignty. In deciding against the United States in that case, the ICJ articulated the obligation of States not to intervene in the domestic affairs of other States if that intervention related to “the choice of a political, economic, social, and cultural system, and the formulation of foreign policy.”46 Although non-intervention is in tension with the more expansive effects jurisdiction in Trail Smelter, this tension reflects an important debate in the cybersecurity context, with some States asserting varying degrees of national sovereignty over their domestic intranets even as others espouse the virtues of a “global networked commons.”47 Indeed, several dozen nations now routinely filter traffic, which some say is threatening the dawn of a new age of Internet sovereignty.48 How multi-stakeholder Internet governance will coalesce with classic conceptions of State sovereignty over the long run remains unclear, but the potential for domestic cyber policies to have international ramifications has never been greater:49 a fact that may entail obligations on the cyber powers in particular, some of which are discussed below.50

Yet exactly what “cyber non-intervention” entails is unclear. Apart from cyber-operations that amount to a “use of force”51 or which pass the armed attack threshold triggering the law of armed conflict,52 there is a wide range of cyber-activity that may impact State sovereignty. And there is no clear delineation of what behavior is internationally acceptable. The Tallinn Manual, although directed towards the application of the law of armed conflict to cyber-operations, recognizes that a cyber-operation that falls below a “use of force” can still qualify as an “intervention.”53 An example of this category of cyber-intervention is likely Stuxnet, a sophisticated cyber weapon designed to target Iranian nuclear facilities.54 Classification of Stuxnet has been a contentious issue, with some arguing it was a “use of force” and others that it constituted an “armed attack,” but Stuxnet at a minimum met the requirements of an intervention.55

The governing principle for an intervention is that it must be “coercive” towards activities protected by State sovereignty such as those regarding the State’s choice of political, economic, social, or cultural system.56 While traditional espionage is widely accepted as non-coercive in relation to these areas, there is more debate over the coerciveness of economic espionage. Since economic espionage involves the theft of valuable trade secrets and intellectual property, now made far easier through the use of cyber technologies,57 some commentators suggest that economic espionage impacts the economy of the victim State so much that it amounts to coercive activity with regard to economic matters, and therefore should be classified as an intervention under international law.58 Moreover, a cyber-intervention by indirect means may also run afoul of a State’s international obligations. For instance, the Arab Spring revolutions of the early 2010s were facilitated in part through the use of social media, particularly Facebook and Twitter.59 These U.S. firms’ policies derived from liberal notions of free speech and assembly, and activists used these platforms to mobilize and organize in a manner that subverted traditional governmental mechanisms for societal control. While certainly not as direct as the provision of arms, as in Nicaragua, this nonetheless provided a powerful platform through which activists were able to organize an anti-government movement. And while these events are likely not attributable back to the U.S. government,60 the United States has supported efforts to circumvent Internet censorship,61 ensuring access to platforms that other States may not support.

A potentially more difficult case of a cyber-intervention is the anonymity software Tor, a software package originally developed by the U.S. Navy to facilitate secure and anonymous online communication, which is currently freely available online around the globe.62 Through a process known as “onion routing,” Tor makes attempts to monitor or censor network traffic difficult; indeed, Tor’s efficacy has led to the NSA referring to it as “the King of high-secure, low-latency Internet anonymity.”63 As such, Tor can facilitate the free speech of individuals living in countries that heavily control Internet traffic, including China and its “Great Firewall.”64 While championed by some as a victory for free speech, this service also represents an affront to Chinese sovereignty. Though the U.S. government is not directly providing Tor to Chinese nationals, it was the U.S. Navy that developed the software and it was U.S. policy to permit Tor to be freely available. Given that cryptography was on the U.S. Munitions List until 1992, and high-level encryption remains subject to export controls,65 Tor presents a closer analogy to Nicaragua and represents how difficult the notion of non-intervention can be in a digital environment.

Taking the broadest potential interpretation of “intervention” that is at the heart of Nicaragua, even the Internet itself implicates State sovereignty. Professor Lawrence Lessig warned of the powerful societal influences that network architecture shapes as part of his famed claim that “code is law.”66 The Internet’s architecture reinforces anonymity and free speech, which, given the phenomenal growth of the Internet, can influence the internal affairs of foreign States.67 Akin to the German Empire surreptitiously shuttling Vladimir Lenin into Russia to foment revolutionary fervor during the First World War, an open Internet allows for the infiltration of ideologies into States where those ideologies might be considered destabilizing.68 Considering the ever-expanding importance of the Internet to States, including to those States’ political, economic, social, and cultural systems, this raises concerns in some quarters over the outsized role that the U.S. currently occupies in the development of the Internet and online services.69

Considering the State practice on intervention, however, there seems to be a growing consensus that international obligations fall not on the offending State to restrain any undue influence, but on the victim State to affirmatively exclude it. In response to the pervasive use of social media by protest groups, numerous countries either blocked Twitter, such as Iran,70 or specifically requested that Twitter censor certain accounts and tweets within their territory, as was the case in Egypt.71 In this way, Twitter’s code is the law, and States wishing to impose more speech-restricting standards must ask Twitter to affirmatively censor content within their borders, or block it entirely. Likewise, China’s response to tools like Tor has not been to seek their removal by the U.S. government, but rather to prevent their download and to restrict their functionality within Chinese networks.72 These reactions suggest that a de jure (if not de facto) open Internet may well become the international default, and that any State wishing to impose greater restrictions is obliged to take action. This understanding of the Internet is reflected by its architecture: code may become customary international law.

The current status of State practice may also be a reflection of the underlying weakness of the non-intervention principle and of the further erosion of Westphalian sovereignty—the historic system that has long underpinned international relations—in favor of a more effects jurisdiction-based order, as seen in Trail Smelter.73 Although nominally violative of international law, international relations could nonetheless be characterized largely as a battle of low-level interventions, with each State attempting to influence the policies of foreign States. Asserting a hard rule of non-intervention can come off as somewhat idealistic, as some degree of intervention is widely acknowledged in the international community. Indeed, the ICJ itself recognized the apparent weakness of the principle in Nicaragua stating that, “examples of trespass against this principle are not infrequent.”74 In practice, non-intervention may be more of a diplomatic sparring match, where low-level interventions are met and countered with opposing low-level interventions. When viewed in this manner, the current international tension surrounding cyber espionage fits well, with low-level cyber-operations justifying opposing in kind responses, as will be discussed further with regard to countermeasures. The question then becomes: at what level does such a low-intensity conflict rise to something more, as is currently under debate in the Obama Administration regarding the 2015 Office of Personnel Management (OPM) breach.75

4. Countermeasures and the Gabčíkovo–Nagymaros Project.

A victim State is empowered to take appropriate “countermeasures” in response to a violation of customary international law.76 Countermeasures are otherwise unlawful actions (or omissions) that are legally permitted77 when used by a victim State in response to unlawful activity to induce the offending State to cease the unlawful activity.78 While there is a large body of work discussing countermeasures,79 the element attracting the most attention is “proportionality,” which says countermeasures must be “commensurate with the injury suffered, taking into account the gravity of the internationally wrongful act and the rights in question.”80 The proportionality requirement empowers States to engage in a wide range of activities, albeit with restrictions for actions implicating international humanitarian law, human rights, or the threat of or use of force.81 Therefore, a State suffering a violation of international standards of due diligence may be empowered to take appropriate countermeasures against the offending State, so long as those countermeasures are proportional to the violation of due diligence.

Yet what constitutes a “proportional” countermeasure to a violation of due diligence remains unclear. Although proportionality is a well-known requirement in both the law of armed conflict and international humanitarian law, proportionality in the countermeasures context is subject to a distinct body of law,82 and was specifically addressed in the ICJ case Hungary v. Slovakia on the Gabčíkovo–Nagymaros Project.83 The case involved a dispute over the construction and operation of a dam, wherein Hungary’s failure to comply with the terms of the project prompted Slovakia to intentionally divert the Danube, a border river. The ICJ determined that although Hungary had violated international law by failing to comply with the terms of the dam agreement, Slovakia’s countermeasures were nonetheless unlawful because they were not proportionate.84 Despite Hungary’s initial violation arising from treaty law, not due diligence, Slovakia’s actions may prove useful as a point of comparison when evaluating responses to violations of due diligence. The case potentially suggests that active interference with essential resources (such as throttling Internet traffic)85 may be viewed as disproportionate to more passive failures to satisfy a State’s obligations.

Despite Gabčíkovo–Nagymaros hinging on proportionality, the ICJ did not detail how the analysis should be structured.86 Yet this vagueness might represent a consensus in the international community not to place too constrictive a legal regime on States engaging in such diplomatic behavior. While Slovakia’s actions in Gabčíkovo–Nagymaros may have been clearly outside the bounds of customary international law, other cases adjudicating proportionality have been more lenient with the proportionality inquiry. Arbitration between France and the United States over an airline dispute, for example, held that the U.S.’s countermeasures, although having a notably larger economic impact than France’s actions, were not “clearly disproportionate,” and therefore were justified under international law.87 The adjudicating tribunal held that economically disproportionate countermeasures can be justified when enforcing a principle,88 thus allowing for laxity in the proportionality assessment.89

Applying these principles to cyber-countermeasures suggests that States will enjoy tentatively broad discretion in the choice of response to an internationally unlawful act. Since there is no requirement that countermeasures take the same form as the precipitating activity, cyber-countermeasures may be used in response to non-cyber unlawful activity, and vice versa. Among these cyber-responses, activities may vary widely, from more aggressive “hack back” operations against the offending State, to more passive activities, such as the termination of packets routed through the victim State.90 Yet some activity will likely fall beyond the bounds of international law, such as the cyber equivalent of diverting a river,91 and may be given a wide berth in turn.92

Adding upon this loose framework, the primary substantive limit on countermeasures—proportionality—is weakened by the dearth of cyber-examples, the difficulty in categorizing cyber-operations, and the principle that economically disproportionate countermeasures are allowable to enforce a principle.93 While the classification of cyber-operations is still contested, and will likely vary depending upon the specific context,94 both cyber-operations and cyber due diligence could reasonably be interpreted as primarily “economic,” suggesting that further laxity will be allowed when “enforcing a principle.” Considering the host of principles that are contested in this area, for example, the legality of economic espionage, this rule may defang the primary restriction imposed on countermeasures. A State’s failure regarding due diligence may therefore give rise to disproportionate countermeasures, and so long as those countermeasures are not so disproportionate as to rise to a use of force,95 or to being “clearly disproportionate,” there appears to be little in the way of constraining legal factors on State cyber-countermeasures. However, the politics involved are another matter, as the Obama Administration’s consideration of breaching the Great Firewall of China in response to the 2015 OPM breach illustrates.

Compounding this problem, States often are reluctant to formally acknowledge cyber-operations at all. While often an extension of traditional espionage, this unwillingness also likely stems in part from the legal ambiguity in this area, particularly with regard to due diligence. Since the legality of economic espionage and the requirements for cyber due diligence are not clearly delineated under international law, the overt use of countermeasures is risky, as the invocation of countermeasures does not shield the victim State if the precipitating activity is later found lawful.96 Rather than rely purely on countermeasures and risk international liability, States currently seem to employ a middle ground between espionage and countermeasures, featuring a combination of public outrage with private culpability that can be self-perpetuating, perhaps best seen in the colloquy between the U.S. and China over economic espionage.97 Despite some bilateral progress, this situation seems unlikely to be resolved in the near future.98

C. Cybersecurity Due Diligence Obligations of Transit States

Cyber-attacks are frequently routed through several transit States before reaching their ultimate targets so as to obfuscate the attack’s origin by taking advantage of the distributed nature of the Internet’s architecture.99 As with attacks launched from within a State, the obligations of States that retransmit malicious Internet traffic originating elsewhere will likely depend upon that State’s knowledge of the attack. The obligations of a State that knowingly allows a cyber-attack to be transmitted through its domestic networks will likely be greater than those that do so without knowledge. Among those States that transmit the attack unwittingly, different standards could be applied to those that comply with cybersecurity best practices and those that fail to do so.100 Furthermore, repeated or continuous cyber-activity through a State’s domestic networks may give rise to a presumption of knowledge, and direct use of State controlled critical infrastructure could serve as evidence that the transit State knew or should have known of a cyber-attack in progress.101 Yet State knowledge must be understood in context, as the individual packets transmitted through the State’s network may, taken alone, be innocuous.102 Cyber-attacks are complex and may be broken apart into bits of seemingly innocuous or unintelligible code, only to be recognizable as a cyber threat when reconstructed later. Stuxnet, for example, was designed in such a way that it would only be activated on specific hardware and systems.103 This ease of obfuscation makes any cybersecurity obligation challenging both to impose and to enforce, and the ultimate efficacy will likely be determined by the standard of proof.

The due diligence duties that may be required of transit States would likely reflect the role that a given State’s infrastructure played in the attack, which could raise potentially disproportionate burdens on small, wired States. The highest level of due diligence that could reasonably be required would be an affirmative obligation to monitor a nation’s networks for cyber-attacks and to mitigate any such threat. This would be akin to requirements of neutral States in time of war, which are told to disallow and resist any belligerent force from transporting troops or munitions through a neutral territory.104 Two potentially less onerous, yet more likely, requirements would be a duty to warn target States of attacks detected on their networks (without a hard requirement to monitor and eliminate), and a duty to cooperate with cyber-forensics conducted by the target State to identify the cyber-attack’s source.105 The transit State may still be under a general obligation to enact and enforce domestic cybercrime legislation, as discussed above, although this is unlikely to be relevant for mere transmission. Most broadly, the State may be subject to a generalized duty to maintain a minimum standard of cybersecurity care, as discussed above for the States in which the attack originated.

The role of transit States ultimately will reflect the degree to which their actions and omissions contributed to the attack, and whether such actions were voluntary or involuntary. While these obligations are certainly less demanding than those of the State where the attack originated, transit States nonetheless may have some obligations, and must consider the international implications of their domestic cybersecurity strategies. However, it should be noted that as command and control servers move to targeted States, due diligence standards might shift.106 And regardless, there is a need to clarify the international law of neutrality to determine whether victim States can hold neutral States accountable for cyber attacks transited through their territory or for not being diligent in repelling attackers.107

D. Caveats

Notwithstanding the preceding discussion elucidating customary international obligations relating to cybersecurity generally, the unique nature of cybersecurity raises problems potentially limiting or nullifying any presumptive obligations. Apart from the legal cover provided by the law of espionage, discussed above, cybersecurity has two major shortcomings that must be considered when identifying international obligations: the geographic constraints of the underlying cases, and the general exception for matters of national security.

The primary argument in response to any cyber-specific international obligations is that the cases from which the duty to warn, the “no harm” principle, and the non-intervention norm arose all predate cyberspace, and extension of these rules to cybersecurity too greatly expands their scope of application. Both Corfu Channel and Trail Smelter are arguably distinguishable on the grounds of physical proximity. Corfu Channel involved a State’s obligations in their bordering sovereign waters and addressed issues raised by ships of other nations physically occupying those waters, while Trail Smelter involved environmental discharge across a neighbor’s borders. Both cases recognize that actions undertaken by a State within its own territory can have consequences beyond that territory, but are nonetheless constrained to geographically proximate territories. This geographical constraint is not reflected in the cybersecurity realm, where actions taken within one’s borders can impact diverse networks and systems distributed across myriad global networks. This substantial expansion of the territory on which harmful activity may occur may be the slippery slope that derails this aspect of cybersecurity due diligence requirements for States. After all, if the natural environment were like cyberspace then many nations would be in breach of the environmental obligations to one another through the emission of greenhouse gases responsible for global climate change.108 As a result, perhaps this aspect of international cybersecurity due diligence should be an arena of lex feranda that could lead to a change in attitudes within the international community. International environmental obligations, although originally geographically constrained, have increased in their scope of impact, with major environmental catastrophes such as the Fukushima Nuclear Reactor and the Deepwater Horizon oil spill showing that a single stakeholder’s environmental actions and omissions can lead to global environmental challenges.109 As the world shrinks through environmental and technological changes, geographic isolation, perhaps, should no longer be a viable excuse for neglecting common “no harm” obligations. Indeed, some commentators have already argued “that states have an obligation of due diligence to prevent significant transboundary cyberharm to another state’s intellectual property.”110

The second caveat to any cyber due diligence obligations is the exception for national security under international law. Customary international law recognizes four national security exceptions: change of circumstances, the law of reprisal, self-defense, and the doctrine of necessity.111 Each of these exceptions recognizes instances in which a State’s international obligations can be stayed due to the actions or threat of action of another State. While narrow in scope, these exceptions insert more uncertainty into an already uncertain arena, as none have been clarified in the realm of cyber-activities, which often implicate issues of national security. For instance, the World Trade Organization (WTO), incorporating the General Agreement on Tariffs and Trade (GATT), employs a broad exception for “essential security interests,”112 which effectively serves as an un-appealable, self-determined “get out of jail free card.” Despite the GATT’s restriction on unilateral economic sanctions, the United States has on multiple occasions used the national security exception to impose unilateral economic sanctions, most recently against Russia.113 This exception for national security is a frequently bemoaned aspect of international law, but nevertheless suggests a fundamental valuation on the part of the international community that State sovereignty is to be given preference on issues implicating essential security interests. Therefore, any cybersecurity due diligence standards must be understood to likely contain a national security exception, which could lead to the exception swallowing the rule. Ultimately, the existence of these caveats and exceptions makes any definitive statement regarding the status of international due diligence standards that much more difficult. This state of affairs leads to the necessity of examining public- and private-sector approaches to clarify the missing elements to a cybersecurity due diligence norm.

III. National and Private-Sector Approaches to Cybersecurity Due Diligence

As discussed in the previous Section, international law, while informative, does not dictate how nations should go about enhancing their cybersecurity to account for emerging due diligence obligations. As a result, it is helpful to consider established and proposed approaches in both the public and private sectors for defining due diligence. Such national strategies could, in time, crystallize into customary international law with enough state practice.114 Similarly, given the extensive public-private cross-pollination of cybersecurity best practices, private-sector efforts aimed at enhancing cybersecurity are informative given the extent to which they shape national policymaking with the NIST Framework being a case in point.115 Thus, this final section begins by discussing several national case studies of cybersecurity due diligence including the United States, Germany, and China, as a first step to uncovering a due diligence governance spectrum. We then offer a due diligence matrix to better inform the discussion before moving on to examine the extent to which cybersecurity is entering the due diligence process of mergers and acquisitions in the U.S. private-sector context. Finally, we conclude with several observations for how industry cybersecurity norms are translating into national policymaking, and what that means for managers, policymakers, and the field of cybersecurity due diligence generally.

A. National Approaches to Regulating Cybersecurity Due Diligence

This sub-section briefly reviews the national approaches of the United States, Germany, and China with regards to cybersecurity due diligence regulation. These case studies were chosen not only because these nations are among the world’s leading cyber powers, but also to provide common and civil law, as well as developed and emerging market perspectives on this issue. This analysis is not meant to be dispositive, but rather to provide a snapshot for how this influential subset of nations is approaching the topic of cybersecurity due diligence.116 Further research is required to determine whether the noted trends are playing out globally.

1. The U.S.

The topic of cybersecurity due diligence per se has not received much attention from the Obama Administration, though it is referenced in the 2011 International Strategy for Cyberspace. The Strategy advises that “States should recognize and act on their responsibility to protect information infrastructures and secure national systems from damage or misuse.”117 This conceptualization represents an effort to crystallize a cybersecurity due diligence norm in international law essential to broader efforts to promote cyber peace. Due to the practical and political difficulties surrounding multilateral treaty development in the cybersecurity arena, norm creation provides an opportunity to enhance global cybersecurity without waiting for a comprehensive global agreement, which could come too late if at all. Yet despite general agreement as to the value of cybersecurity norms, including due diligence, “even simple norms face serious opposition. Conflicting political agendas, covert military actions, espionage and competition for global influence” have created a difficult context for cybersecurity norm development and diffusion,118 a situation that the NSA revelations arguably exacerbated. As a result, to be successful in such a difficult climate, norms must be clear, universalized, and well-established.119 The U.S. has had some success in applying international law to cyber warfare, along with extending human rights protections online.120 But more broadly, what would a cybersecurity due diligence norm look like from the national perspective? It is helpful to briefly review U.S. approaches to this topic in order to provide and build out a framework for discussion.

The U.S. has been active in strategizing about national cybersecurity since the creation of the world’s first Cyber Emergency Response Team at Carnegie Mellon University in 1988.121 Today, though, the field is crowded with agencies and organizations responsible for various aspects of the nation’s cybersecurity. The Department of Defense alone operates more than 15,000 networks in 4,000 installations spread across some 88 countries.122 Yet the majority of U.S. efforts in this space have focused on securing vulnerable critical infrastructure (CI). Although Congress has been active in this regard, successive administrations—including those of Presidents Clinton, Bush, and Obama—have pushed the ball forward on securing vulnerable CI.123

Most recently, in 2009, President Obama declared the U.S. CI to be a “strategic national asset,”124 though a fully integrated U.S. cybersecurity policy has yet to be established.125 In the face of congressional inaction, President Obama issued an executive order that, among other things, expanded public-private information sharing and established the NIST Framework, which included private-sector best practices that companies could adopt to better secure CI.126 The NIST Framework is important since, even though its critics argue that it helps solidify a reactive stance to the nation’s cybersecurity challenges,127 it is arguably spurring the development of a standard of cybersecurity care in the U.S. that plays into discussions of due diligence.128 In particular, the NIST Framework harmonizes industry best practices to provide, its proponents argue, a flexible and cost-effective approach to enhancing cybersecurity that assists owners and operators of CI in assessing and managing cyber risk. Although the NIST Framework is relatively new, some private-sector clients are already receiving advice that if their “cybersecurity practices were ever questioned during litigation or a regulatory investigation, the ‘standard’ for ‘due diligence’ was now the NIST Cybersecurity Framework.”129 Over time, the NIST Framework has the potential not only to shape a standard of care for domestic critical infrastructure organizations but also to harmonize global cybersecurity best practices for the private sector writ large, given active NIST collaborations with a number of nations, including the U.K., Japan, Korea, Estonia, Israel, and Germany.130

2. Germany.

Germany’s cybersecurity due diligence efforts rely on close collaboration between the public and private sectors, nationally and globally.131 Known for its strong national data protection law, with fines up to 300,000 Euros, Germany is now moving to strict cybersecurity standards for CI and assigning the responsibility to protect users and secure CI to service providers and operators of CI.132 In particular, the federal government approved the German Cybersecurity Strategy (Cyber-Sicherheitsstrategie für Deutschland) in February 2011. The Strategy recognizes cyberspace as an essential domain for the German State, economy, and society, and emphasizes the protection of CI as a core cybersecurity policy priority. Moreover, it addresses cybersecurity due diligence by recognizing that “incidents in other countries’ information infrastructures may also indirectly affect Germany.”133 The Strategy also calls for a code of conduct, international legal harmonization and cooperation, and states that service providers may need to assume greater responsibility for the security of their digital products and users.134 In all, according to Booz Allen, Germany “is one of only five countries (the others being the U.K., the U.S., France, and Japan) to have a comprehensive national cyber plan and a comprehensive cybersecurity plan,” which has been “a key to its success.”135

Germany has also been active in identifying and spreading cybersecurity best practices in a manner similar to the NIST Framework. The Federal Office for Information Security (Bundesamt für Sicherheit in der Informationstechnik) first released its IT Baseline Protection (IT-Grundschutz) in 1994.136 This set of BSI standards contains recommendations for cybersecurity and has been adopted by German corporations and international stakeholders. Some of the standards are now available in English, Swedish, and Estonian.137 These standards are best practice recommendations that have become “de facto standard[s] for [German] IT security,” 138 but are not legally enforceable save for data protection fines mentioned earlier.

Efforts are also underway in Germany’s private sector to widen the discussion and dissemination of cybersecurity best practices. For example, established in 2012, the Alliance for Cybersecurity (Allianz für Cybersicherheit) is an initiative under the aegis of the Federal Office for Information Security.139 It brings together more than a thousand public and private participating entities to share best practices and further the cause of German cybersecurity due diligence. The Alliance encourages voluntary reporting of cyber incidents and attacks to collect information about current cyber threats against German organizations.140 These private efforts help shape industry norms and contribute toward responsible cyber behavior.

Germany’s Minister of the Interior, Dr. Thomas de Maizière, recently addressed the topic of cybersecurity due diligence during the 2014 Global Cyberspace Cooperation Summit in Berlin.141 Referring to the need to carefully consider the principle of responsibility in cyberspace, de Maizière pointed to a basic tenet in law: he who creates a risk for others is responsible for it. The greater the risk, the larger the responsibility.142 Partly in response to this sentiment (and to the 2013 NSA revelations), the German parliament adopted the IT Security Act (Gesetzes zur Erhöhung der Sicherheit informationstechnischer Systeme, or IT-Sicherheitsgesetz), which became effective July 25, 2015. The new law requires companies to employ and comply with state-of-the-art technology to secure their websites or be held liable in the event of a breach. More stringent security requirements and responsibilities apply for CI operators.143 The designated CI sectors are responsible for developing appropriate security standards—similar to the NIST Framework’s approach—pending the Ministry of the Interior’s approval. CI operators are also obligated to inform the authorities of cyber-attacks. These cybersecurity policy efforts are estimated to create between 200 and 425 new jobs across the federal government and cost for personnel and resources of up to thirty-eight million Euros per year.144 However, relative to the U.S., where, despite an overall shrinking defense budget, cybersecurity spending continues to increase—as is also the case with China—such costs seem reasonable.145

3. China.

According to Booz Allen, while the U.S. and Germany rank second and fourth respectively in terms of their 2015 global cyber power ranking, China comes in at—perhaps somewhat surprisingly—thirteenth place.146 Part of the reason for this lower ranking is that China applies tight controls over its domestic Internet in order to advance the Communist Party’s economic, political, and military interests.147 Another factor is the desire to help secure its rule while having a less robust legal and regulatory environment to enhance national cybersecurity.148 On the international stage, China continues to seek cooperation “to promote the building of a peaceful, secure, open, and cooperative cyberspace” and shape international norms, particularly with regard to state sovereignty and censorship under the guise of information security.149 At the same time, there are increasing tensions between the U.S. and China about mutually-alleged cyber exploitations including the millions of impacted current and former U.S. civil servants from the Office of Personnel Management breach.150 In 2014, the U.S. indicted five hackers of the People’s Liberation Army for economic cyber espionage; China protested sharply.151 The U.S. government has billed China as the “world’s most active and persistent perpetrators of economic espionage.”152 And in June 2013, President Obama warned that the continuation of U.S. intellectual property theft is a serious matter that will hinder further development of economic trade relations with China. The U.S reaction may be conceived as an approach to shape cybersecurity due diligence norms, by calling on China to take responsibility for alleged cyber exploitations. Ultimately, though, such norms have a strong political dimension, as the Chinese case study shows, and have not yet found a final form.

As with the U.S., China’s cybersecurity strategy is fragmented, but its development and implementation has garnered the political support of senior government officials. In early 2014, Chinese President Xi Jinping stressed that a uniform and comprehensive approach to “network security” is necessary to turn China into a “cyber power.”153 The speech coincided with the establishment of the “Central Cyber Security and Informatization Leading Group,” which, under the leadership of President Xi Jinping, will guide China’s cybersecurity policy efforts.154

In many ways, China’s cybersecurity strategy is broader in scope than either its U.S. or German counterparts.155 In addition to addressing the security of networks and computers, it includes censorship of content and information control to a far greater extent than is the case in these Western nations.156 It is the Chinese government’s official position that “properly guiding Internet opinion is a major measure for protecting Internet information security.”157 China’s take on cybersecurity is reflected in the idea of Internet sovereignty.158 Cybersecurity plays a crucial role in China’s endeavor to use the Internet as a means to build up a domestic information economy and secure network infrastructure that benefits domestic economic development and political stability.159

China’s first cybersecurity strategy dates back to 2003.160 It is referred to as “Document 27: Opinions for Strengthening Information Security Assurance Work” and covers—inter alia—CI protection.161 The current 2012 cybersecurity strategy continues some of the earlier cybersecurity considerations (including CI protection) while also addressing China’s dependency on foreign technology as a security issue, the promotion of Chinese cryptography standards, the build-up of broadband infrastructure, next-generation mobile technology, and e-government services.162 Observers have criticized the document as an inconsistent “grab bag of vague policy proposals.”163

Some of these measures are in line with cybersecurity due diligence efforts; others are broader in scope and have raised concerns, particularly from U.S. and European counterparts. For example, in 2007, China established a set of security standards, the “Regulations on Classified Protection of Information Security,” which are also referred to as the Multi-Level Protection Scheme (MLPS), with the objectives of safeguarding information and protecting national security.164 Western firms and organizations repeatedly expressed disapproval since these technical standards are incompatible with international IT security standards.165 Rather than protecting national security, these standards have been perceived as protectionist measures that shield Chinese domestic IT firms from global competition.166 Some argue that such efforts have actually resulted in less secure Chinese standards and technology.167 For instance, leading cybersecurity companies such as Kaspersky and Symantec are barred from competing in China’s corporate market for financial institutions and power utilities.168 Such developments may open the door for cyber attacks on China’s CI, a detriment to the cause of cybersecurity due diligence.169

Similar to MLPS, and as part of its economic policy, China has attempted to establish its own wireless network standard, WAPI.170 In reaction to NSA revelations, China announced work on independent, Chinese operating systems for desktop computers as well as mobile devices.171 Other recent or pending Chinese legislation portends still more protection, such as requiring technology companies that sell to China’s banks to submit their source code for government inspection.172 A proposed draft for a new anti-terror legislation has been stalled, but if implemented would similarly require companies to divulge encryption keys and install backdoors to give Chinese authorities access to secured data and communication.173 Such policies would impact Western tech firms in particular, and could even bar them from China’s still-growing market.174

In summary, China expresses the need for the control of information and exclusion of foreign-owned security technologies in order to protect its societal stability. As a result, the Chinese strategy focuses on national security and economic advancement. Elements of cybersecurity due diligence consequently look quite different when compared to the U.S. or Germany, demonstrating the difficulty of crafting a global norm in this space. However, one could potentially construe a Chinese version of cybersecurity due diligence at the other end of the spectrum that includes domestic economic rationales and protectionist measures as opposed to a narrower focus on securing CI though a relatively well-developed system of legal checks and balances. In fact, many of the policy objectives are similar across the three case studies; what differs are the means.

4. Summary.

Custom requires widespread state practice that is undertaken out of a sense of legal obligation. Depending on the type of norm involved, state practice needs to be more or less widespread. For new norms, such as in the cybersecurity context, the standard generally is “virtually uniform” state practice.175 This threshold has not yet been reached in the cybersecurity due diligence context, as illustrated by the three approaches explored above. The United States is more voluntary, Germany takes a more regulatory approach featuring a comprehensive cybersecurity policy that has long eluded U.S. policymakers, and China’s approach encompasses broader economic and national security efforts. For a better sense of how these nations vary in their treatment of cybersecurity due diligence, we created a matrix comparing the three countries’ due diligence responsibilities.

5. Cyber Due Diligence Matrix.

Though there is not one consensus definition of cybersecurity due diligence.176 For purposes of this matrix, we define it as an obligation under international law that calls for a certain “form of conduct” from a state in order to be in line with its international law obligations toward other States.177 While public international law is particularly concerned with the relations among States—as was revealed in the preceding three case studies—an international cyber due diligence obligation implicates domestic actors and legislation. To fulfill its international law obligations, a state arguably needs to be able to exercise control over ICT and critical information infrastructure within the territory and under its jurisdiction. Yet this is a difficult and complex undertaking given the difficulties of jurisdiction, attribution, ambiguous norms, and nearly ubiquitous private-sector ownership of critical infrastructure stemming from the wave of the liberalization and privatization of public infrastructure beginning in the late 1970s.178 To further their cybersecurity due diligence mandates, States should, among other steps, establish domestic policy regimes including laws, frameworks (such as NIST and BSI), and initiatives that incentivize private actors under their jurisdiction to behave in accordance with prevailing legal obligations. Table 1 proposes a non-comprehensive, working set of domestic “state responsibilities” that contribute to fulfilling a state’s international law obligation on cyber due diligence.179

The responsibilities in Table 1 fall into three general activity categories: (1) Establish and Maintain, (2) Control and Enforce, and (3) Monitor and Assess. Implementation of a given state’s responsibilities varies across state and institutional settings. For instance, one state may legally mandate certain technological standards whereas another state may choose a voluntary structure for cybersecurity standards (such as the NIST Framework) or leave it to private industry associations to establish such standards for particular business sectors. The capacity among States to fulfill cyber due diligence as an international law obligation varies.180 The International Telecommunication Union (ITU), the U.N.’s intergovernmental telecommunications authority, was mandated to build confidence and security in the use of ICTs.181 The ITU’s cyber mission includes a particular focus on developing countries where the necessary capabilities to ensure cyber due diligence may be lacking.182 Indeed, in early 2011, the ITU and U.N. Office on Drugs and Crime (UNODC) signed a Memorandum of Understanding to work together to help Member States fight cybercrime.183 Such efforts help to establish a minimal shared standard that provides a lens through which international law obligations regarding cyber due diligence may be interpreted.184 There is a need to establish clear notions about what domestic responsibilities a state needs to live up to in order to meet the cyber due diligence requirement. Due to technological and institutional development, however, those responsibilities are subject to change and need to be adjusted accordingly. To describe and measure a particular responsibility, we suggest adopting a maturity model, similar to that used in software development.185 Such descriptive categories would allow one to compare responsibility statuses across various States, an application of the notion of common but differentiated responsibilities discussed further below.

 

Table 1: State’s Cyber Due Diligence Responsibilities

State’s Responsibilities

U.S.

Germany

China

Establish and Maintain

 

 

 

Define and implement strategies, frameworks and policies for cybersecurity (for example, protection of critical information infrastructure), and its governance, for the state and private actors in its jurisdiction

186

187

188

Introduce or adopt domestic laws and regulations relevant to cybersecurity and cyber crime

189

190

191

Establish and maintain capabilities to respond and react to cyber incidents (for example, computer security incident response team)

192

193

194

 

 

State’s Responsibilities

U.S.

Germany

China

Define and implement technical standards, measures, and best practices (for example, vulnerability patching) for cybersecurity

195

196

197

Define and maintain organizational processes and mechanisms for cybersecurity

198

199

 

 

 

State’s Responsibilities

U.S.

Germany

China

Provide training, education, and certification for individuals and organizations

200

201

202

Engage in collaboration on cybersecurity such as through the Budapest Convention (for example, information sharing, law enforcement, intelligence) with domestic and international actors

203

204

205

 

 

State’s Responsibilities

U.S.

Germany

China

Control and Enforce

 

 

 

Hold ownership or exercise regulatory control over critical infrastructure

206

207

208

Conduct review and control of information technology deployed in critical infrastructure

209

 

210

 

 

State’s Responsibilities

U.S.

Germany

China

Enforce compliance with regulations and policies

211

212

213

Monitor and Assess

 

 

 

Monitor and assess cyber risks and threats landscape

214

215

 

Monitor and evaluate technological developments

216

 

 

Monitor and assess state’s overall cybersecurity efforts across all domains; adjust and enforce where necessary

217

 

 

Table 1 includes areas of domestic responsibilities that we analyzed in the case studies of the U.S., Germany, and China. The objective of this Article, however, is not to provide a comprehensive comparative reckoning, but rather to provide illustrative examples of various domestic responsibilities and approaches to meeting them in the due diligence context. The proposed list of domestic responsibilities requires testing and revision to determine its utility in meeting international law obligations. Given the variety of institutional and jurisdictional settings across States, it is likely that various combinations of domestic responsibilities and their different implementations may satisfy a cybersecurity due diligence obligation under international law.218 Yet, aside from national case studies, there are also valuable lessons from the private sector that could inform the eventual shape of a cybersecurity due diligence norm, which we turn to next.

B. Lessons from the Private Sector

Among the criticisms of the NIST Framework is that, although it does a good job at promoting general “cyber hygiene” for those organizations that implement it, it is less well suited to protecting firms from sophisticated and targeted cyber attacks sometimes called Advanced Persistent Threats (APTs). Indeed, there is a cybersecurity due diligence industry emerging in which the NIST Framework, and for that matter the German BSI Standards, play a role but are only one aspect of a larger decision-making process that companies contemplating all sorts of business decisions from mergers and acquisitions to supply-chain management must consider.219 This section investigates some hallmarks of this trend, primarily in the U.S. mergers and acquisitions context.

U.S. law helps to inform a host of legal questions faced by the private sector as part of an overarching cybersecurity due diligence process,220 though legal requirements do vary in large part by industry sector.221 It is critical for companies, for example, to have detailed cybersecurity strategies in place on what employee and customer data has been retained and used and how that data is secured. If unsatisfactorily undertaken, potential resulting causes of action include negligence, breach of contract, breach of fiduciary duty, and invasion of privacy, to name a few.222 This can lead to the ousting of managers up to and including the C-suite as in the aftermath of the Target and Sony cyber attacks, but still many organizations have not taken the necessary steps to internalize cybersecurity due diligence. For example, roughly two-thirds of surveyed companies use encryption for data in transit,223 but only about half use intrusion prevention systems and encryption for data in storage.224 Still fewer, approximately one-third, use public-key encryption, specialized wireless security systems, or content-monitoring systems to prevent data loss.225 Even more dramatic, just thirteen percent of respondents to a 2012 PwC survey made the survey’s “leader cut,” a label used to identify respondents that measured and reviewed their cybersecurity policies annually, had “an overall information security strategy in place,” analyzed the types of cyber attacks hitting their networks, and had a CISO or equivalent reporting to “the top of the house.”226 Those organizations that made the cut reported half as many incidents as those that did not.227 Yet, some progress is being made; by 2014, PwC found that while sixty-nine percent of surveyed U.S. executives were “worried that cyber threats will impact growth,” overall awareness as to the importance of cybersecurity is increasing, as illustrated by the rise in cyber information sharing.228 One arena with application to due diligence showing increasing promise is mergers and acquisitions.229

Jason Weinstein, former Deputy Assistant Attorney General at the U.S. Department of Justice, summarized the issue of cybersecurity due diligence succinctly when he said: “When you buy a company, you’re buying their data, and you could be buying their data-security problems.”230 In other words, “[c]yber risk should be considered right along with financial and legal due diligence considerations.”231 Already a majority of respondents in one 2014 survey reported that cybersecurity challenges are altering the M&A landscape, while eighty-two percent said that cyber risk would become more predominant over the following eighteen months.232 A majority of surveyed firms also said that a cyber-attack during the M&A negotiation process could scuttle the deal, which is a concern given the range of serious cyber-attacks coming to light on a regular basis in an era of increasing mergers.233 Managers now considering what form cybersecurity due diligence should take have a wealth of resources (as well as a growing array of compliance obligations)234 to consider. These include, in the U.S. context, the NIST Framework, as well as guidance from the Securities and Exchange Commission, the National Association of Corporate Directors, and the PCI Security Standards Council.235 Together, these frameworks, and others, provide the beginnings of a cybersecurity due diligence standard guiding judges as they work through causes of action such as breach of fiduciary duty and negligence resulting from data breaches.236 The same goes for partnerships with vendors. The Target breach, for example, which exposed some forty million credit card numbers, was the result of lax security from a heating, ventilation, and air conditioning (HVAC) vendor that for some reason had access to myriad Target systems well beyond HVAC networks.237

Despite some progress, there is still a long way to go to enhance private-sector cybersecurity due diligence, including in the M&A context. Freshfields Bruckhaus Deringer, a global law firm, for example, conducted a survey in which they found that:

78 per cent of global respondents believe cyber security is not [analyzed] in great depth or specifically quantified as part of the M&A due diligence process, despite 83 per cent saying they believe a deal could be abandoned if previous breaches were identified and 90 per cent saying such breaches could reduce the value of the deal.238

Similarly, only thirty-nine percent of respondents “say they make cyber security policies… a condition precedent that is addressed prior to completion” of a transaction.239 In other words, despite growing recognition as to the scale and scope of the multifaceted cyber threat facing firms, many remain predominantly reactive.240 In order to improve the status quo, firms must leverage the above cybersecurity best practices among many others, ranging from utilizing risk-based data management to minimizing the danger of insider threats through meshing corporate and human resources policies and reviewing the cybersecurity track records of vendors and potential partners.241 Still, that might not be enough.

The end result is a push among IT professionals to go beyond mere due diligence and move toward the use of real-time analytics and other cybersecurity best practices to monitor vendors’ systems.242 The lesson here is constant vigilance; that is, letting an initial process of cybersecurity due diligence be the first—and not the last—word in an ongoing proactive and comprehensive cybersecurity policy that promotes cyber hygiene along with the best practices essential for battling APTs.243 Such a policy should be widely disseminated and regularly vetted as part of an overarching enterprise risk management process, along with having an incident response plan in place that includes private and public information sharing mechanisms.244

C. A Polycentric Approach to Promoting Due Diligence and Cyber Peace

The above private-sector best practices should inform national and, indeed, international debates playing out in the field of cybersecurity due diligence. Together, such bottom-up experimentation could be considered a polycentric approach to unpacking the field of cybersecurity due diligence. This multi-level, multi-purpose, multi-functional, and multi-sectoral model,245 championed by scholars including Nobel Laureate Elinor Ostrom and Professor Vincent Ostrom, challenges orthodoxy by demonstrating the benefits of self-organization, networking regulations “at multiple scales”246 and examining the extent to which national and private control can in some cases coexist with communal management as illustrated in the success of the Internet Engineering Task Force (IEFT).247 It also posits that, due to the existence of free riders in a multipolar world, “a single governmental unit” is often incapable of managing “global collective action problems”248 such as cyber attacks. Instead, a polycentric approach recognizes that diverse organizations working at multiple levels can create different types of policies that can increase levels of cooperation and compliance, enhancing “flexibility across issues and adaptability over time.”249 Such an approach, in other words, recognizes both the common but differentiated responsibilities of public- and private-sector stakeholders as well as the potential for best practices to be identified and spread organically, generating positive network effects that could, in time, result in the emergence of a cascade toward a cybersecurity due diligence norm.250 In this way, a polycentric method to enhance cybersecurity due diligence would leverage the expertise of industry councils, open-source collaboration, and state practice in the same way that IETF working groups have successfully managed the communications aspects of Internet governance.251 Such a norm should not only focus on the cyber hygiene referenced in the NIST Framework but should also encourage the uptake of proactive cybersecurity best practices so as to secure our networks along with clarifying the rights and responsibilities of transit States to help foster cyber peace.

As applied to cybersecurity due diligence, the field of polycentric governance has an array of more particularized lessons drawn from Professor Ostrom’s work summarized in her Institutional Analysis and Design (IAD) Framework. This is a Framework of governance best practice gleaned from decades of commons field studies and applied, among other contexts, to global commons issues including atmospheric governance.252 Some of these principles similarly have resonance to the cause of cybersecurity due diligence, including the need to undertake effective cost-benefit analyses,253 conduct supply chain monitoring with an eye toward spotting hardware and software vulnerabilities, and institute governance strategies that permit ample space for innovation while still mandating proven best practices.254 The latter goal may be furthered by, for example, requiring NIST Framework compliance for all suppliers and potential partners, something that more firms are undertaking. For example, in early 2015, Bank of America announced “that it is using the Framework and will also require it of its vendors,” while QVC similarly publicized “that it is using the Cybersecurity Framework in its risk management.”255

Such innovative efforts are critical to furthering the cause of cyber peace, especially when coupled with effective cybersecurity regulation as discussed in the German case study. The International Telecommunication Union (ITU), a U.N. agency specializing in information and communication technologies, pioneered some of the early work in the field by defining “cyber peace” in part as “a universal order of cyberspace” built on a “wholesome state of tranquility, the absence of disorder or disturbance and violence.”256 Although certainly desirable, such an outcome is politically and technically unlikely, at least in the near term.257 That is why cyber peace is not defined here as the absence of conflict, a state of affairs that may be called negative cyber peace.258 Rather, it is the construction of a network of multilevel regimes that promote global, just, and sustainable cybersecurity by clarifying the rules of the road for companies and countries alike to help reduce the threats of cyber conflict, crime, and espionage to levels comparable to other business and national security risks. To achieve this goal, a new approach to cybersecurity is needed that seeks out best practices from the public and private sectors to enhance cybersecurity due diligence. Working together through polycentric partnerships, we can mitigate the risk of cyber war by laying the groundwork for a positive cyber peace that respects human rights, spreads Internet access along with best practices, and strengthens governance mechanisms by fostering multi-stakeholder collaboration.259 Already, some of the public- and private-sector efforts highlighted in this paper may be bearing fruit with, by some estimates, the severity of cyber-attacks beginning to plateau and a “norm against the use of severe state-based cybertactics” emerging.260

IV. Conclusion

The field of international cybersecurity due diligence remains a complex, demanding, and difficult arena that requires sustained academic, private, and public engagement if progress is to be made. Myriad alternative paths forward beckon. For example, States could exercise due diligence through passive means, promoting resiliency in domestic and partner nations’ networks.261 Warning systems for various types of cyber-attacks facilitated by cyber emergency response teams, active (and two-way) private-sector information sharing and collaboration on identifying and spreading cybersecurity best practices, and a robust cyber hygiene campaign may be considered other essential elements of cybersecurity due diligence. Other best practices include partitioning access to code and systems, audits and regular penetration testing, and promoting redundancy and parallel network construction to build further resiliency, as well as harnessing cybersecurity expertise beyond one’s own organizational boundaries through bug bounty and vulnerability reward programs.262 The NIST Framework and the related standards it references provide a conceptual toolbox to identify gaps in an organization’s cybersecurity readiness of which both public and private sector actors should be aware, along with the German BSI Standards and Chinese equivalents. There is plenty of low-hanging fruit. After all, the Australian government has reportedly been succcessful in preventing eighty-five percent of cyber attacks through following three common sense techniques: application whitelisting (only permitting pre-approved programs to operate on networks), regularly patching applications and operating systems, and “minimizing the number of people on a network who have ‘administrator’ privileges.”263

Over time, as legal harmonization progresses, there will be increasing opportunities to build out cybersecurity norms, including those surrounding the question of due diligence. Already, a number of national governments, and even some companies such as Microsoft, have released lists of draft norms for stakeholder consideration.264 Given both the rich cross-pollination of cybersecurity best practices and the cyber threat posed by a huge range of attackers to the public and private sectors, conceptions of cybersecurity due diligence should be gleaned from existing customary international law but built out through a review of industry norms that are in turn informing national policies. Achieving some measure of cyber peace requires the active involvement of public- and private-sector stakeholders. It may be time for more international lawyers to reach out to CISOs, and vice versa.

  • 1. See, for example, Bill Chappell, Federal Employee Breach Very Likely Included Security Clearance Info, NPR (June 12, 2015), http://www.npr.org/sections/thetwo-way/2015/06/12/414031155/federal-employee-breach-included-classified-clearance-info.
  • 2. See Tallinn Manual on the International Law Application to Cyber Warfare 17 (Michael N. Schmitt ed., 2013) (discussing when a cyber attack could trigger the right of self-defense) [hereinafter Tallinn Manual].
  • 3. See Nat’l Research Council, Technology, Policy, Law, and Ethics Regarding U.S. Acquisition and Use of Cyberattack Capabilities 34, 67 (William A. Owens et al. eds., 2009) [hereinafter National Academies].
  • 4. Corfu Channel (U.K. v. Alb.), 1949 I.C.J. 4, 22 (Apr. 9).
  • 5. See Rachel Ensign, Cybersecurity Due Diligence Key in M&A Deals, Wall St. J. (Apr. 24, 2014), http://blogs.wsj.com/riskandcompliance/2014/04/24/cybersecurity-due-diligence-key-in-ma-deals.
  • 6. Cf. White House and Department of Defense Announce Strategies to Promote Cybersecurity, Including Strengthening Norms Affecting Internet Security, 105 Am. J. Int’l L. 794, 795 (2011) (“Cybersecurity Due Diligence: States should recognize and act on their responsibility to protect information infrastructures and secure national systems from damage or misuse.”); Jody M. Prescott, Responses to Five Questions on National Security Law, 38 Wm. Mitchell L. Rev. 1536, 1541 (2012) (discussing the U.S. International Strategy for Cyberspace); Scott J. Shackelford, Toward Cyberpeace: Managing Cyberattacks through Polycentric Governance, 62 Am. U. L. Rev. 1273, 1354 (2013) (discussing the due diligence aspect of the 2011 U.S. International Strategy for Cyberspace).
  • 7. International Law, U.N., http://www.un.org/en/globalissues/internationallaw/ (last visited Mar. 8, 2016).
  • 8. Statute of the International Court of Justice, art. 38, June 26, 1945, 59 Stat. 1055, http://www.icj-cij.org/documents/index.php?p1=4&p2=2&p3=0.
  • 9. Id.; see also Malcolm N. Shaw, International Law 68–72 (4th ed. 1997).
  • 10. Convention on Cybercrime, Nov. 23, 2001, 2296 U.N.T.S. 167.
  • 11. Military and Paramilitary Activities in and Against Nicaragua (Nicar. v. U.S.), Merits, 1986 I.C.J. 14 (June 27)[hereinafter Nicaragua].
  • 12. See id. at ¶¶ 183–86.
  • 13. Id.
  • 14. Curtis A. Bradley, The Chronological Paradox, State Preferences, and Opinio Juris, Duke L., 4, June 1, 2013, https://law.duke.edu/cicl/pdf/opiniojuris/panel_1-bradley-the_chronologi....
  • 15. Frederic L. Kirgis, Custom on a Sliding Scale, 81 Am. J. Int’l L. 146, 149 (1987).
  • 16. See id.
  • 17. See id.
  • 18. Mitu Gulati, How Do Courts Find International Custom? (May 30, 2013)(unpublished manuscript)(on file with Duke Law Journal), http://law.duke.edu/cicl/pdf/opiniojuris/panel_6-gulati-how_do_courts_fi....
  • 19. See id.
  • 20. See infra Section III.B.
  • 21. For an extended discussion of these and other applicable treaty regimes, see Scott J. Shackelford, An Introduction to the Law of Cyber War and Peace, in Managing Cyber Attacks in International Law, Business, and Relations: In Search of Cyber Peace 263 (2014).
  • 22. G.A. Res 55/63,¶ 1(a), U.N. Doc. A/RES/55/63 (Jan. 22, 2001).
  • 23. For more on this topic, see Shackelford, Defining the Cyber Threat in Internet Governance, in Managing Cyber Attacks in International Law, Business, and Relations: In Search of Cyber Peace 3, supra note 21.
  • 24. See A. John Radsan, The Unresolved Equation of Espionage and International Law, 28 Mich. J. Int’l L. 595, 601–602 (2007).
  • 25. See Wolfgang Gruener, Many New PCs in China Come With Malware Preinstalled, Tom’s Hardware (Sept. 24, 2012), http://www.tomshardware.com/news/microsoft-pc-windows-security-china,177....
  • 26. However, it should be noted that other jurisprudence is also on point and is not discussed here due to space constraints, including: Legality of the Threat or Use of Nuclear Weapons, Advisory Opinion, 1996 I.C.J. 226, ¶ 29 (July 8); Pulp Mills on the River Uruguay (Arg. v. Uru.), 2010 I.C.J. 14, ¶ 193 (Apr. 20).
  • 27. Tim Ryan, Cyber Due Diligence: Pre-Transaction Assessments Can Uncover Costly Risks, Kroll Call (Jan. 28, 2015), http://blog.kroll.com/2015/cyber-due-diligence-pre-transaction-assessmen....
  • 28. See infra Section III.
  • 29. Corfu Channel (U.K. v. Alb.), Merits, 1949 I.C.J. 4 (Apr. 9).
  • 30. Id. at 22.
  • 31. See Eneken Tikk, Ten Rules for Cyber Security, 53 Survival: Global Politics and Strategy 119 (2011).
  • 32. Logic bombs often appear as malware and are designed to set off a malicious function when certain conditions are met – such as a specific time and date. The full extent of logic bomb infiltration on existing networks is unknown, but there have been logic bombs implanted in U.S. critical national infrastructure. See Richard A. Clarke & Robert K. Knake, Cyber War: The Next Threat to National Security and What to Do About it 92 (2010).
  • 33. See supra Section II.A; infra Section II.D.
  • 34. See, for example, Cloudy Jurisdiction: Addressing the Thirst for Cloud Data in Domestic Legal Processes, EFF, https://www.eff.org/document/cloudy-jurisdiction-addressing-thirst-cloud....
  • 35. Corfu, supra note 4, at 17–18.
  • 36. Katherine Del Mar, The International Court of Justice and Standards of Proof, in The ICJ and the Evolution of International Law: The Enduring Impact of the Corfu Channel Case 98, 107 (Karine Bannelier et al. eds., 2012).
  • 37. Corfu, supra note 29, at 18.
  • 38. Erik M. Mudrinich, Cyber 3.0: The Department of Defense Strategy for Operating in Cyberspace and the Attribution Problem, 68 A.F.L. Rev. 167, 193–95 (2012).
  • 39. Corfu, supra note 4, at 18.
  • 40. Wolff Heintschel von Heinegg, Territorial Sovereignty and Neutrality in Cyberspace, 89 Int’l L. Stud. 123, 137 (2013).
  • 41. Matthew J. Sklerov, Solving the Dilemma of State Responses to Cyberattacks: A Justification for the Use of Active Defenses Against States Who Neglect Their Duty to Prevent, 201 Mil. L. Rev. 1, 12–13 (2009).
  • 42. Trail Smelter Arbitration (U.S. v. Can.), 3 RIAA 1905, 1965 (1941).
  • 43. Ralph Bodle, Climate Law and Geoengineering, in Climate Change and the Law 447, 457 (Erkki Hollo et al. eds., 2012).
  • 44. Jonathan A. Ophardt, Cyber Warfare and the Crime of Aggression: The Need for Individual Accountability on Tomorrow’s Battlefield, 3 Duke L. & Tech. Rev. 1, ¶ 4, (2010); Roger Hurwitz, The Prospects for Regulating Cyberspace: A Schematic Analysis on the Basis of Elinor Ostrom, “General Framework for Analyzing Sustainability of Social Ecological Systems,” 325 Sci. 419 (2009).
  • 45. However, a counterargument to this train of logic is that, given the difficulties of attributing and controlling international harms emanating from Internet infrastructure, the no harm principle could be stretched to the breaking point in the cybersecurity context. Such an argument ultimately turns on the technological and governance cybersecurity capabilities of the States in question. For a rundown of States with regards to their “cyber power,” see Booz Allen Hamilton, Cyber Power Index 2–6 (2014) http://www.boozallen.com/media/file/Cyber_Power_Index_Findings_and_Methodology.pdf [hereinafter Cyber Power Index].
  • 46. Nicaragua, supra note 11, at ¶ 205.
  • 47. Hillary Rodham Clinton, Remarks on Internet Freedom, U.S. Department of State (Jan. 21, 2010), http://www.state.gov/secretary/20092013clinton/rm/2010/01/135519.htm.
  • 48. See James A. Lewis, Why Privacy and Cyber Security Clash, in America’s Cyber Future: Security and Prosperity in the Information Age 123, 126 (Kristin M. Lord and Travis Sharp eds., 2011).
  • 49. See, for example, Yahoo!, Inc. v. La Ligue Contre Le Racisme et L'Antisemitisme, 169 F. Supp. 2d 1181, 1184 (N.D. Cal. 2001) rev'd, 379 F.3d 1120 (9th Cir. 2004) on reh'g en banc, 433 F.3d 1199 (9th Cir. 2006) and rev'd and remanded, 433 F.3d 1199 (9th Cir. 2006); Jack Goldsmith & Tim Wu, Who Controls the Internet?: Illusions of a Borderless World 5 (2006).
  • 50. See infra Section III.A.
  • 51. See Tallinn Manual, supra note 2, at 42–44.
  • 52. Id. at 54.
  • 53. Id. at 44. The UN Charter generally divides conflict into three zones. The first threshold is defined by Article 2(4), which makes the threat or use of force illegal without UN Security Council (UNSC) authorization. There are many examples of acts that States have not treated as breaching Article 2(4)’s prohibition on the use of force, including trade disputes, space-based surveillance, espionage, and economic sanctions. See Bruno Simma, NATO, the UN, and the Use of Force, 10 Eur. J. Int’l L. 1, 2–3 (1999); National Academies, supra note 3, at 242. But even though state practice has shown that such acts do not activate Article 2(4) protections, it is an open question how threats of force may be regulated in cyberspace; for example, “[d]oes introducing vulnerabilities into an adversary’s system . . . constitute a threat of force . . . ?” Id. at 242, 257 (noting that prohibited threats under Article 2(4) might include “verbal threats, initial troop movements, initial movement of ballistic missiles, [or the] massing of troops on a border . . . .”). The second zone includes the thresholds encompassed in Articles 39 and 42, at which point the UNSC may designate a breach to international peace and security and take action to restore order. Id. at 242 (discussing Articles 39 and 42 as the “two exceptions to this prohibition on the use of force.”). The final barrier is Article 51, which allows for the “right of individual or collective self-defense” in response to an armed attack. Id. at 243.
  • 54. See Aleksandr Matrosov et al., Stuxnet Under the Microscope 17 (Rev. Jan., 31, 2011); Steven Cherry, How Stuxnet is Rewriting the Cyberterrorism Playbook, IEEE Spectrum (Oct. 13, 2010), http://spectrum.ieee.org/podcast/telecom/security/how-stuxnet-is-rewriti....
  • 55. For further discussion as to what types of cyber interventions may be classified as armed attacks, see Tallinn Manual, supra note 2, at 45 (The classification of Stuxnet as an intervention is theoretical, as Iran never formally acknowledged or condemned Stuxnet, although some sources suggested Iran was considering such international legal action.); see Shahrooz Shekaraubi, Iran’s Case against Stuxnet, Indian Strategic Stud. (March 21, 2014), http://strategicstudyindia.blogspot.com/2014/03/irans-case-against-stuxnet.
    html.
  • 56. Nicaragua, supra note 11, at ¶ 205.
  • 57. Jeremy Kirk, GhostNet Cyber Espionage Probe Still has Loose Ends, PC World (June 18, 2009), https://www.pcworld.com/article/166901/article.html (the “legal vacuum” surrounding cyber espionage can be especially problematic for investigators). For more background on cyber espionage, see Shackelford, supra note 21.
  • 58. See Catherine Lotrionte, Countering State-Sponsored Cyber Economic Espionage Under International Law, 40 N.C. J. Int’l L. & Com. Reg. 443, 511–12 (2015). Another example of coercion is briefly discussed in the Tallinn Manual, which suggests that actions taken to induce regime change may be viewed as coercive towards a State’s choice of political system. Tallinn Manual, supra note 2, at 45. Going further, we may use the facts in Nicaragua to speculate that provisioning rebel groups with cyber-weapons to facilitate rebellion would reasonably be deemed an intervention, particularly if the use of those cyber-weapons by the provisioning State would amount to a use of force.
  • 59. Pierre Omidyar, Social Media: Enemy of the State or Power to the People?, Huff. Post (Feb. 27, 2014), http://www.huffingtonpost.com/pierre-omidyar/social-media-enemy-of-the_b....
  • 60. See Tallinn Manual, supra note 2, at 29–36.
  • 61. See, for example, James Glanz & John Markoff, U.S. Underwrites Internet Detour Around Censors, N.Y. Times (June 12, 2011), http://www.nytimes.com/2011/06/12/world/12internet.html?pagewanted=all&_r=0.
  • 62. About Tor, Tor, https://www.torproject.org/about/overview.html.en (last visited Aug. 4, 2015).
  • 63. Tor: ‘The King of High-Secure, Low-Latency Anonymity’, Guardian (Oct. 4, 2013), http://www.theguardian.com/world/interactive/2013/oct/04/tor-high-secure.... However, the technology is far from perfect leading to data breaches that have called into question Tor’s continuing utility. See Richard Adhikari, Tor Has Been Breached - What Now?, Tech. News World (Aug. 1, 2014), http://www.technewsworld.com/story/80834.html?rss=1. The rise of encrypted “https” sites is also decreasing the need for Tor. See HTTPS Everywhere, EFF, https://www.eff.org/Https-Everywhere (last visited Aug. 11, 2014).
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  • 65. For a more in depth discussion of encryption export controls, see John R. Shane & Lori E. Scheetz, Export Controls for Tech Companies: The Basics and the Pitfalls of U.S. Encryption Controls, 18 J. Internet L. 1 (2014).
  • 66. Lawrence Lessig, Code and Other Laws of Cyberspace 6 (1999).
  • 67. See David G. Post, In Search of Jefferson’s Moose: Notes on the State of Cyberspace 148 (2009).
  • 68. See J. Michael Daniel, Robert Holleyman & Alex Niejelow, China’s Undermining an Open Internet, Politico (Feb. 4, 2015), http://www.politico.com/magazine/story/2015/
    02/china-cybersecurity-114875.html#.Vc3_0hRVhBc.
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  • 70. Jason Rezaian, Facebook, Twitter Blocked Again in Iran, Wash. Post, (Sept. 17, 2013), https://www.washingtonpost.com/news/worldviews/wp/2013/09/17/facebook-tw....
  • 71. Twitter’s Censorship Plan Rouses Global Furor, Assoc. Press (Jan. 27, 2012), http://www.cbsnews.com/news/twitters-censorship-plan-rouses-global-furor/.
  • 72. Andrew Jacobs, China Further Tightens Grip on the Internet, N.Y. Times (Jan. 30, 2015), http://www.nytimes.com/2015/01/30/world/asia/china-clamps-down-still-har....
  • 73. See Leo Gross, The Peace of Westphalia, 1648-1948, 42 Am. J. Int’l L. 20–26 (1948); Christopher C. Joyner, Governing the Frozen Commons: The Antarctic Regime and Environmental Protection 222 (1998).
  • 74. Nicaragua, supra note 11, at ¶ 202.
  • 75. See Chappell, supra note 1 and accompanying text.
  • 76. Naulilaa Incident Arbitration (Port. V. Ger.), 2 RIAA 1011, 1025–26 (1928).
  • 77. This distinguishes countermeasures from retorsions, which are “unfriendly, although lawful” State actions. See Tallinn Manual, supra note 2, at 40.
  • 78. Michael N. Schmitt, “Below the Threshold” Cyber Operations: The Countermeasures Response Option and International Law, 54 Va. J. Int’l L. 697, 700 (2014).
  • 79. See generally Responsibility of States for Internationally Wrongful Acts, art. 1, G.A. Res. 56/83, Annex, U.N. Doc. A/RES/56/83 (Jan. 28, 2002) [hereinafter Articles on State Responsibility].
  • 80. Id. art. 51.
  • 81. Id. art. 50(1)(a)–(d).
  • 82. See Thomas M. Franck, On Proportionality of Countermeasures in International Law, 102 Am. J. Int’l L. 715, 738 (2008).
  • 83. Gabc̆íkovo-Nagymaros Project (Hung. v. Slovk.), 1997 I.C.J. 7 (Sept. 25).
  • 84. Id. at ¶ 87.
  • 85. See Special Rapporteur on the Promotion and Protection of the Right to Freedom of Opinion and Expression, Report of the Special Rapporteur on Key Trends and Challenges to the Right of All Individuals to Seek, Receive and Impart Information and Ideas of All Kinds Through the Internet, U.N. Doc. A/HRC/17/27, ¶¶ 49–50 (May 16, 2011).
  • 86. See Franck, supra note 82, at 716.
  • 87. Air Services Agreement of 27 March 1946 (U.S. v. Fr.), 18 RIAA 417, ¶ 83 (1978).
  • 88. Id.
  • 89. Although other requirements are often invoked regarding the legality of countermeasures, Gabc̆íkovo-Nagymaros only expressly acknowledged one: that the countermeasures must be to induce the offending State to comply with its international obligations. See Gabc̆íkovo-Nagymaros Project, supra note 83, at ¶ 87. This is sometimes reframed to require that countermeasures not be punitive, and is generally accepted to encompass a requirement that countermeasures, when possible, be reversible (that the countermeasures can be undone once the offending State is in compliance with their international obligations). See Articles on State Responsibility, supra note 79, at art. 49, commentary 9 (“States should as far as possible choose countermeasures that are reversible.”). Moreover, although the ILC suggests that countermeasures should require the victim State to call upon the offending State to cease the activities prior to commencing countermeasures, even this is undermined by an exception for “urgent countermeasures.” Articles on State Responsibility, supra note 79, at art. 52(1)–(2). In the cyber context, this exception may trivialize the requirements for prior notification, since many incidents are likely to be deemed urgent in an arena as dynamic and fraught with attribution difficulties as cyber. See Katherine C. Hinkle, Countermeasures in the Cyber Context: One More Thing to Worry About, 37 Yale J. Int’l L. 11, 11 (2011); Lotrionte, supra note 58, at 520–21. Even in the seemingly slower realm of due diligence, this “urgent” provision may still be utilized, as a State’s failure to police cybercrime perpetrated within its borders, for example, could reasonably be interpreted as necessitating urgent countermeasures by the victim State to quash the threat posed by the cybercriminals.
  • 90. See Schmitt, supra note 78, at 704–705.
  • 91. For a discussion of the economic and environmental impact of Slovakia’s actions, see Gabriel Eckstein, Application of International Water Law to Transboundary Groundwater Resources, and the Slovak-Hungarian Dispute Over Gabickovo-Nagymaros, 19 Suffolk Transnat’l L. Rev. 67, 102-106 (1995).
  • 92. There is even some acknowledgment that countermeasures may negatively impact innocent States, provided those impacts are not intentional and are minimized as much as possible. See Naulilaa Incident Arbitration, supra note 76, at 1057.
  • 93. See Air Services Agreement, supra note 87, at ¶ 83.
  • 94. Tallinn Manual, supra note 2, at 43–45.
  • 95. See id.
  • 96. See Articles on State Responsibility, supra note 79, art. 30 and accompanying commentary.
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  • 100. Heinegg, supra note 40, 136–37.
  • 101. Id.
  • 102. Id. at 137–38.
  • 103. See generally Kim Zetter, Countdown to Zero Day: Stuxnet and the Launch of the World's First Digital Weapon passim (2014).
  • 104. Convention Between the United States & Other Powers Respecting the Rights & Duties of Neutral Powers & Persons in Case of War on Land, art. 5, 36 Stat 2310 (Oct. 18, 1907).
  • 105. See Heinegg, supra note 40, at 140.
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  • 111. Susan Rose-Ackerman & Benjamin Billa, Treaties and National Security, 40 N.Y.U. J. Int’l L. & Pol. 437, 443 (2008).
  • 112. General Agreement on Tariffs and Trade 1994, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, The Legal Texts: The Results of the Uruguay Round of Multilateral Trade Negotiations 17 (1999), 1867 U.N.T.S. 187, 33 I.L.M. 1153 (1994).
  • 113. See, for example, Robert Coalson, Explainer: How The International Sanctions Game Is Played, Radio Free Eur. (Mar. 21, 2014), http://www.rferl.org/content/russia-us-sanctions-explainer/25305528.html.
  • 114. See Jean-Marie Henckaerts & Louise Doswald-Beck, Assessment of Customary International Law, Int’l Comm. Red Cross (2005), http://www.icrc.org/customary-ihl/eng/docs/v1_rul_in_asofcuin.
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  • 116. See Cyber Power Index, supra note 45, at 2–3 (discussing various indicators of cyber power in the public and private sectors and making the case that the U.S., Australia, the U.K., Germany, and Canada are the top five cyber powers).
  • 117. White House, International Strategy for Cyberspace: Prosperity, Security, and Openness in a Networked World 10 (2011).
  • 118. James A. Lewis, Confidence-Building and International Agreement in Cybersecurity, in Disarmament Forum: Confronting Cyberconflict 51, 58 (2011).
  • 119. Martha Finnemore & Kathryn Sikkink, International Norm Dynamics and Political Change, 52 Int’l Org. 887, 906–907 (1998).
  • 120. Henry Farrell, Promoting Norms for Cyberspace, Council Foreign Rel. (2015), http://www.cfr.org/cybersecurity/promoting-norms-cyberspace/p36358?cid=n... (arguing that the U.S. government should take the following three steps to reinvigorate a norms-based approach to multilateral cybersecurity policymaking: “reform U.S. intelligence activities to make them more consistent with the publicly expressed norms of Internet openness that the United States is trying to establish; disclose more convincing evidence when trying to shame actors that do not abide by cybersecurity norms; and encourage other States and civil society actors to take a leading role in norm promotion—even when this cuts against U.S. interests.”).
  • 121. Cyber Emergency Response Team, About Us, https://www.cert.org/about/ (last visited Apr. 8, 2016).
  • 122. Kristin M. Lord & Travis Sharp, Executive Summary, in America’s Cyber Future: Security and Prosperity in the Information Age 7, supra note 48, at 12.
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  • 124. Remarks by the President on Securing our Nation’s Cyber Infrastructure, White House (May 29, 2009), https://www.whitehouse.gov/the-press-office/remarks-president-securing-o....
  • 125. A Better Defined and Implemented National Strategy Is Needed to Address Persistent Challenges, GAO at 2 (May 7, 2013), http://www.gao.gov/assets/660/652817.pdf (“Further, without an integrated strategy that includes key characteristics, the federal government will be hindered in making further progress in addressing cybersecurity challenges.”).
  • 126. National Institute of Standards and technology, Improving Critical Infrastructure Cybersecurity Executive Order 13636: Preliminary Cybersecurity Framework 1 (2013), http://www.nist.gov/itl/upload/preliminary-cybersecurity-framework.pdf [hereinafter “NIST Framework”].
  • 127. See Taylor Armerding, NIST’s Finalized Cybersecurity Framework Receives Mixed Reviews, CSO (Jan. 31, 2014), http://www.csoonline.com/article/2134338/security-leadership/nist-s-fina....
  • 128. See, for example, Scott J. Shackelford et al., Toward a Global Standard of Cybersecurity Care?: Exploring the Implications of the 2014 Cybersecurity Framework on Shaping Reasonable National and International Cybersecurity Practices, 50 Tex. J. Int’l L. 287 (2015).
  • 129. Why the NIST Cybersecurity Framework Isn’t Really Voluntary, Info. Sec. Blog (Feb. 25, 2014), http://www.pivotpointsecurity.com/risky-business/nist-cybersecurity-fram....
  • 130. Update on the Cybersecurity Framework, NIST at 4 (Dec. 5, 2014), http://www.nist.gov/cyberframework/upload/NIST-Cybersecurity-Framework-u.... There is some evidence that this may already be happening with regards to the Federal Trade Commission’s cybersecurity enforcement powers. See, for example, Brian Fung, A Court Just Made it Easier for the Government to Sue Companies for Getting Hacked, Wash. Post (Aug. 24, 2015), https://www.washingtonpost.com/news/the-switch/wp/2015/08/24/a-court-jus....
  • 131. Cyber-Sicherheitsstrategie für Deutschland, German Federal Ministry of the Interior 8–9 (2011), https://www.bmi.bund.de/SharedDocs/Downloads/DE/Themen/OED_Verwaltung/In....
  • 132. Bundesministerium des Innern, Schutz Kritischer Infrastrukturen – Risiko- und Krisenmanagement: Leitfaden für Unternehmen und Behörden (2008), http://www.bmi.bund.de/SharedDocs/Downloads/DE/Broschueren/2008/Leitfade....
  • 133. German Federal Ministry of the Interior, supra note 131, at 4.
  • 134. Id. at 4–7.
  • 135. Cyber Power Index, supra note 45, at 3.
  • 136. OWASP Review BSI IT-Grundschutz Baustein Webanwendungen, https://www.owasp.org/index.php/OWASP_Review_BSI_IT-Grundschutz_Baustein....
  • 137. Id.
  • 138. Id.
  • 139. See Allianz für Cybersicherheit, https://www.allianz-fuer-cybersicherheit.de/ACS/DE/Home/startseite.html (last visited June 16, 2015).
  • 140. Id.
  • 141. Thomas de Maizière, Sichere Informationsinfrastrukturen in einem Cyber-Raum der Chancen und der Freiheit (2014), http://www.bmi.bund.de/SharedDocs/Reden/DE/2014/12/east-west-cyber-summi....
  • 142. Id. (“. . . wer ein Risiko für andere schafft, trägt dafür Verantwortung. Je größer das Risiko ist, umso höher die Verantwortung”). This sentiment may also be considered another manifestation of the sliding scale approach discussed above.
  • 143. See Friendhelm Greis, Kabinett Beschließt Meldepflicht für Cyberangriffe, Golem.de (2014), http://www.golem.de/news/it-sicherheitsgesetz-regierung-beschliesst-meld....
  • 144. Id.
  • 145. See, for example, Andrea Shalal & Alina Selyukh, Obama Seeks $14 Billion to Boost U.S. Cybersecurity Defenses, Reuters (Feb. 2, 2015), http://www.reuters.com/article/
    2015/02/02/us-usa-budget-cybersecurity-idUSKBN0L61WQ20150202.
  • 146. See Cyber Power Index, supra note 45, at 4.
  • 147. Id. at 10; Edward Wong, For China, Cybersecurity Is Part of Strategy for Protecting the Communist Party, N.Y. Times (Dec. 3, 2014), http://sinosphere.blogs.nytimes.com/2014/12/03/for-china-cybersecurity-is-part-of-strategy-for-protecting-the-communist-party/.
  • 148. Id.
  • 149. See Sonya Sceats, China’s Cyber Diplomacy: a Taste of Law to Come?, Diplomat (Jan. 14, 2015), http://thediplomat.com/2015/01/chinas-cyber-diplomacy-a-taste-of-law-to-.... China is pursuing cyber diplomacy on an array of fronts. Among other actions, China is furthering the multilateral cybersecurity initiative with the Shanghai Cooperation Organization, is negotiating a bilateral cybersecurity treaty with Russia, is involved in a U.S.-China working group to diffuse tensions around mutually alleged cyber exploitations, and has been drafting cybersecurity-relevant proposals and declarations to garner support from like-minded States at the 2014 World Internet Conference in China and at various U.N. meetings.
  • 150. See Chappell, supra note 1.
  • 151. See Weihua Chen, China Protests Against US Indictment, China Daily (May 20, 2014), http://usa.chinadaily.com.cn/world/2014-05/20/content_17519650.htm.
  • 152. DNI, Off. of the Nat’l Counterintelligence Exec., Foreign Spies Stealing U.S. Economic Secrets in Cyberspace, Report to Congress on Foreign Economic Collection and Industrial Espionage: 2009-2011 at i (Oct. 2011).
  • 153. Xi Jinping: China Must Evolve From a Large Internet Nation to a Powerful Internet Nation, Xinhuanet (Feb. 27, 2014), http://news.xinhuanet.com/politics/2014-02/27/c_119538788.htm.
  • 154. Id.
  • 155. State Council, Opinion on Vigorously Promoting the Development of Informatization and Effective Protection of Information Security (July 17, 2012), http://www.gov.cn/zwgk/2012-07/17/content_2184979.htm.
  • 156. See, for example, Hauke Johannes Gierow, Cyber Security in China: Internet Security, Protectionism and Competitiveness: New Challenges to Western Businesses, Mercator Inst. for China Stud., 5 (2015), http://www.merics.org/fileadmin/templates/download/china-monitor/150407_MERICS_China_Monitor_22_en.pdf; see also Shannon Tiezzi, China’s ‘Sovereign Internet’, Diplomat (June 24, 2014), http://thediplomat.com/2014/06/chinas-sovereign-internet/.
  • 157. Chris Buckley & Lucy Hornby, China Defends Censorship after Google Threat, Reuters (Jan. 14, 2010), http://www.reuters.com/article/2010/01/14/us-china-usa-google-idUSTRE60C....
  • 158. See, for example, Tiezzi, supra note 156.
  • 159. Id.
  • 160. Adam Segal, China Moves Forward on Cybersecurity Policy, Council on Foreign Rel. (July 24, 2012), http://blogs.cfr.org/asia/2012/07/24/china-moves-forward-on-cybersecurity-policy/.
  • 161. Id.
  • 162. Hauke Johannes Gierow, Cyber Security in China: New Political Leadership Focuses on Boosting National Security, Mercator Inst. for China Stud., 2 (2014), http://www.merics.org/fileadmin/templates/download/china-monitor/China_M.... China is far from alone, though, in seeking to protect its domestic industry in the name of enhancing cybersecurity. See Karen Kornbluh, Beyond Borders: Fighting Data Protectionism, Council on Foreign Rel. (Dec. 16, 2014), http://www.cfr.org/united-states/beyond-borders-fighting-data-protection... Scott J. Shackelford, How to Enhance Cybersecurity and Create American Jobs, Huff. Post (July 16, 2012), http://www.huffingtonpost.com/scott-j-shackelford/how-to-enhance-cyberse....
  • 163. Segal, supra note 160.
  • 164. Nathaniel Ahrens, National Security and China’s Information Security Standards: Of Shoes, Buttons, and Routers, Ctr. Strategic & Int’l Stud., 1 (Nov. 8, 2012), http://csis.org/
    publication/national-security-and-chinas-information-security-standards.
  • 165. Id. at 8–10.
  • 166. See, for example, id. at 15; see also Gierow, supra note 162, at 2.
  • 167. See Gierow, supra note 162, at 7.
  • 168. Id. at 5.
  • 169. Once again, though, China is not alone in striking the appropriate balance between promoting state sovereignty and digital protectionism and enhancing both cybersecurity and innovation. The European Union is also in the midst of a similar debate with behemoths of the Information Age including Google. See, for example, EU International Cyberspace Policy, European Union External Action, http://eeas.europa.eu/policies/eu-cyber-security/index_en.htm (last visited June 16, 2015); David Fidler, Europe v. Google: A Dispute About Competition, Political Power, and Sovereignty, Council on Foreign Rel. (Apr. 21, 2015), http://blogs.cfr.org/cyber/2015/04/21/europe-v-google-a-dispute-about-co....
  • 170. Scott Kennedy, The Political Economy of Standards Coalitions: Explaining China’s Involvement in High-Tech Standards Wars, Asia Policy, No. 2 41, 42 (July 2006).
  • 171. Chinese OS Expected to Debut in October, Xinhuanet (Aug. 24, 2014), http://news.xinhuanet.com/english/china/2014-08/24/c_133580158.htm.
  • 172. Paul Mozur, New Rules in China Upset Western Tech Companies, N.Y. Times (Jan. 28, 2015), http://www.nytimes.com/2015/01/29/technology/in-china-new-cybersecurity-....
  • 173. Krista Hughes, China puts tech bill that concerns West on hold: U.S. official, Reuters (Mar. 13, 2015), http://www.reuters.com/article/us-china-security-usa-idUSKBN0M91ZT20150313.
  • 174. See Gierow, supra note 162, at 5; Shara Tibken, Apple’s Cook: Don’t Fret – China Growth Remains Strong, CNET (Aug. 24, 2015), http://www.cnet.com/news/apples-cook-says-china-growth-remains-strong/.
  • 175. N. Sea Continental Shelf (F.R.G./Den. v. Neth.), 1969 I.C.J. 41, 74 (Feb. 20).
  • 176. Refer to the discussion in Section I(B).
  • 177. Nicholas Tsagourias, Economic Cyber Espionage and Due Diligence, Syracuse Univ. Controlling Economic Cyber Espionage’ Workshop, 2 (June 18–19, 2015), http://insct.syr.edu/wp-content/uploads/2015/06/Tsagourias_Due_Diligence.pdf (representing among the first efforts to undertake a comparative analysis of cybersecurity due diligence).
  • 178. See generally J.P. Singh, The Institutional Environment and Effects of Telecommunication Privatization and Market Liberalization in Asia, 24 Telecomm. Pol’y 885 (2000).
  • 179. The cyber due diligence matrix in Table 1 reflects key aspects of a due diligence obligation for cybersecurity as the authors perceive and define it. We gained analogical insights from key cases of international due diligence obligations as described above in Section I, and complemented those by looking for due diligence characteristics in three leading cyber powers: the U.S., Germany, and China. This helped us to chart out comparative factors applicable in the cyber domain. Nicholas Tsagourias’s cyber due diligence paper, the 2015 ITU Global Cybersecurity Index, and conversations at the 2015 workshop on “Controlling Economic Cyber Espionage” at Syracuse University, June 18-19, were used to help define and structure the cyber due diligence matrix. See Tsagourias, supra note 177; ITU, Global Cybersecurity Index & Cyberwellness Profiles (2015), https://www.itu.int/pub/D-STR-SECU-2015. However, this constitutes merely a first effort, and we welcome any and all feedback on refining the matrix.
  • 180. See Tsagourias, supra note 177, at 2.
  • 181. The ITU’s cybersecurity mandate is based on the WSIS Action Line C5 on “Building confidence and security in the use of ICTs”; Resolution 69 (WTDC-10) on “Creation of national computer incident response teams”; Resolution 130 (PP-14) on “Strengthening the role of ITU in building confidence and security in the use of information and communication technologies.” ITU, Global Cybersecurity Index, supra note 179, at 29-30.
  • 182. See, for example, IMPACT: Mission & Vision, IMPACT, http://www.impact-alliance.org/aboutus/mission-&-vision.html (last visited June 30, 2013) (representing a cross-cutting collaboration to assist developing nations in creating cyber emergency response teams and creating/revising cybercrime laws).
  • 183. UN Agencies Team Up to Make the Online World Safer: MoU Signed Between ITU and UNODC at WSIS Forum 2011, ITU Newslog: Cybersecurity Spam and Cybercrime (May 19, 2011), http://www.itu.int/osg/blog/CategoryView,category,Cybersecurity%2BSpam%2....
  • 184. Tsagourias argues for a need of a “common standard,” because otherwise private or public actors may opt for operating from States with lesser developed cybersecurity capabilities; this could put the concept of a cyber due diligence obligation under international law at risk. See Tsagourias, supra note 177, at 6.
  • 185. See Mark C. Paulk et al., Capability Maturity Model for Software (Carnegie Mellon Univ. Working Paper, 1993), http://www.sei.cmu.edu/reports/93tr024.pdf.
  • 186. See, for example, Comprehensive National Cybersecurity Initiative, White House (2008), https://www.whitehouse.gov/sites/default/files/cybersecurity.pdf (summary); NIST Framework, supra note 126.
  • 187. See, for example, German Federal Ministry of the Interior, supra note 131; National Strategy for Critical Infrastructure Protection (CIP Strategy), German Federal Ministry of the Interior (2009), http://www.bmi.bund.de/
    cae/servlet/contentblob/598732/publicationFile/34423/kritis_englisch.pdf.
  • 188. See, for example, China’s Current Cybersecurity Strategy, Opinion of the State Council Concerning Forcefully Moving Informationization Development Forward and Realistically Guaranteeing Information Security, Guangming Wang (2012), http://politics.gmw.cn/2012-07/17/content_
    4571519.htm.
  • 189. For the U.S., the 2015 Global Cybersecurity Index lists nineteen laws and regulations related to cybercrime and cybersecurity. See ITU, Global Cybersecurity Index & Cyberwellness Profiles, supra note 179, at 493.
  • 190. For Germany, the 2015 Global Cybersecurity Index lists six laws and regulations related to cybercrime and cybersecurity. See id., at 206.
  • 191. For China, the 2015 Global Cybersecurity Index lists five laws and regulations related to cybercrime and cybersecurity. See id., at 134. China’s National People’s Congress released a first draft of its Network Security Law on July 6, 2015. 网络安全法 (草案) (Network Security Law (Draft)), http://www.npc.gov.cn/npc/xinwen/lfgz/flca/2015-07/06/
    content_1940614.htm.
  • 192. See, for example, US-CERT, https://www.us-cert.gov (last visited Aug. 18, 2015); ICS-CERT, https://ics-cert.us-cert.gov (last visited Aug. 18, 2015).
  • 193. See, for example, CERT-Bund, https://www.bsi.bund.de/CERT-Bund_en (last visited Aug. 18, 2015).
  • 194. See, for example, CNCERT, http://www.cert.org.cn (last visited Aug. 18, 2015).
  • 195. See, for example, NIST, http://www.nist.gov (last visited Aug. 18, 2015); MITRE, http://www.mitre.org (last visited Aug. 18, 2015).
  • 196. The Federal Office for Information Security (BSI) defines the IT Baseline Protection (IT-Grundschutz) standards and processes. See BSI, https://www.bsi.bund.de/EN/
    Topics/ITGrundschutz/itgrundschutz.html (last visited Aug. 18, 2015). The 2015 IT Security Act requires government agencies and CI operators to meet minimal IT security standards. See Gesetz Zur Erhöhunng Der Sicherheit Informationstechnischer Systeme (IT-Sicherheitsgesetz) (July 17, 2015), Bundesgesetzblatt 2015, I(31), Bonn, July 24, 2015 [hereinafter IT-Sicherheitsgesetz].
  • 197. For instance, the Network and Information Security Standardization Technical Committee of the China Communications Standards Association has issued numerous technical IT security standards. See CCSA, http://www.ccsa.org.cn/english/
    tc.php?tcid=is (last visited Aug. 18, 2015). The ITU Global Cybersecurity Index counted eighteen standards that were approved by this committee in 2010. ITU, Global Cybersecurity Index & Cyberwellness Profiles, supra note 179 at 134.
  • 198. See, for example, NIST, supra note 195; MITRE, supra note 195.
  • 199. See, for example, BSI, supra note 196. The 2015 IT Security Act requires CI operators to notify the BSI about significant cyber incidents; in addition, telecom service providers are required to inform their customers if they detect malicious traffic from their customers’ networks or computers such as botnets. See IT-Sicherheitsgesetz, supra note 196.
  • 200. U.S. educational and training efforts include, for instance, the National Cyber Security Awareness Month, the National Initiative for Cybersecurity Education (NICCS), and the designation of academic institutions as National Centers of Academic Excellence in Information Assurance (IA)/Cyber Defense (CD) in education and research. See, for example, StaySafeOnline.org, https://www.staysafeonline.org/ncsam/ (last visited Aug. 18, 2015).
  • 201. The BSI, for instance, certifies individuals, service providers, systems, services, and products with regard to IT security and assurance. See Zertifizierung und Konformitätsbewertung, Federal Office for Information Security, https://www.bsi.bund.de/DE/Themen/ZertifizierungundAnerkennung/zertifizi... (last visited Aug. 18, 2015). Germany has no federal authority charged with educational or professional training for cybersecurity and related public awareness that we could uncover. See ITU, Global Cybersecurity Index & Cyberwellness Profiles, supra note 179, at 207.
  • 202. For instance, the July 2015 draft of China’s Network Security Law addressed cyber education and training in articles 15, 16, and 28. See, 网络安全法 (草案) (Network Security Law (Draft)), supra note 191, at 202, art. XV-XVI, XXVIII.
  • 203. The U.S. ratified the Budapest Convention and emphasized the importance of international collaboration in its 2011 International Strategy for Cyberspace. See White House, supra note 117. DHS, for instance, has international sharing agreements with India and Israel. Andreas Kuehn & Milton Mueller, Einstein on the Breach: Surveillance Technology, Cybersecurity and Organizational Change, in Security in Cyberspace: Targeting Nations, Infrastructures, Individuals 127, 142 (Giampiero Giacomello ed., 2014). Domestically, the 2015 Executive Order on Promoting Private Sector Cybersecurity Information Sharing encourages information sharing and analysis organizations. See Executive Order Promoting Private Sector Cybersecurity Information Sharing, White House (Feb. 13, 2015), https://www.whitehouse.gov/the-press-office/2015/02/13/executive-order-p....
  • 204. See Allianz für Cybersicherheit, supra note 139. Internationally, Germany cooperates with the U.S. on cybersecurity through a joint cyber bilateral mechanism. See Joint Statement on U.S.-Germany Cyber Bilateral Meeting, U.S. Dep’t St. (June 27, 2014), http://www.state.gov/r/pa/prs/ps/2014/06/228543.htm.
  • 205. According to the 2015 Global Cybersecurity Index, cooperation and information sharing is established on the national level within the public sector. In addition, there is “massive cooperation” among China’s telecom operators, the China Internet Network Information Center, and CNCERT. See ITU, Global Cybersecurity Index & Cyberwellness Profiles, supra note 179, at 135.
  • 206. For instance, the U.S. Federal Energy Regulatory Commission adopted critical infrastructure protection standards. See Peter Behr, A Decade After the Northeast Blackout, Reliability Increases but Human Issues Persist, E&E (Aug. 12, 2013), http://www.eenews.net/stories/1059985876/print. While the 2014 NIST Framework does not establish additional regulatory requirements, utilities and operators of CI may find it hard to avoid implementation. See Stephen M. Spina & J. Daniel Skees, Electric Utilities and the Cybersecurity Executive Order: Anticipating the Next Year, 26 Electricity J. 61, 65 (2013).
  • 207. The 2015 IT Security Act addressed IT security requirements for CI. See IT-Sicherheitsgesetz, supra note 196.
  • 208. It is generally understood that China’s government holds more direct control over CI than its Western counterparts. In the telecom sector, for instance, the major operators are state-owned; in addition, there are limitations on foreign investments, and thus foreign ownership and control are limited. See Yukyung Yeo, Between Owner and Regulator: Governing the Business of China’s Telecommunications Service Industry, 2009 China Q. 1013, 1016 (2009). On July 1, 2015 China adopted a new National Security Law that reinforced Chinese authorities’ ability to maintain security in all fields, including cyber; it mandates national security reviews for foreign investments in Internet technologies and ICT. See, for example, Edward Wong, China Approves Sweeping Security Law, Bolstering Communist Rule, N.Y. Times, (July 1, 2015), http://www.nytimes.com/2015/07/02/world/asia/china-approves-sweeping-sec.... Timothy P. Stratford et al, China’s New National Security Law, Nat’l L. Rev. Blog (July 7, 2015), http://www.natlawreview.com/article/china-s-new-national-security-law.
  • 209. In 2012, the U.S. House Intelligence Committee warned U.S. telecom operators not to buy network equipment from Chinese equipment manufacturers ZTE and Huawei. Since 2013, certain U.S. federal departments and agencies have required governmental approval before sourcing information technology from Chinese companies. See, for example, Megha Rajagopalan, China “Resolutely Opposes” U.S. Curbs on IT Imports: State Media, Reuters (Mar. 3, 2013), http://www.reuters.com/article/2013/03/30/us-china-us-trade-idUSBRE
    92T01J20130330.
  • 210. See, for example, Nathaniel Ahrens, National Security and China’s Information Security Standards: Of Shoes, Buttons, and Routers (2012), http://csis.org/
    publication/national-security-and-chinas-information-security-standards.
  • 211. The authors are not aware of any systematic study that addresses the compliance and degree of enforcement with domestic cyber regulations and policies. However, the U.S. has implemented various regulations and acts of legislation that target cybersecurity and cybercrime. See ITU, Global Cybersecurity Index & Cyberwellness Profiles, supra note 179, at 493.
  • 212. The authors are not aware of any systematic study that addresses the compliance and degree of enforcement with domestic cyber regulations and policies. Germany has implemented various regulations and acts of legislation that target cybersecurity and cybercrime. See id., at 206.
  • 213. The authors are not aware of any systematic study that addresses the compliance and degree of enforcement with domestic cyber regulations and policies. China has implemented various regulations and acts of legislation that target cybersecurity and cybercrime. See id., at 134.
  • 214. The US-CERT provides threat information through its National Cyber Awareness System. See National Cyber Awareness System, US-CERT, https://www.us-cert.gov/ncas (last visited Aug. 18, 2015). The U.S. intelligence community addresses cyber threats in its annual Worldwide Threat Assessment. See, for example, James R. Clapper, Worldwide Threat Assessment of the US Intelligence Community, DNI (Feb. 26, 2015), http://www.dni.gov/files/documents/Unclassified_2015_ATA_SFR_-_SASC_FINAL
    .pdf.
  • 215. The BSI issues an annual report on the state of cybersecurity that addresses cyber risks and threats. See, for example, Die Lage Der It-Sicherheit In Deutschland 2014, BSI (Dec.15, 2014), https://www.bsi.bund.de/SharedDocs/Downloads/DE/BSI/Publikationen/
    Lageberichte/Lagebericht2014.html. The 2015 IT Security Act requires CI operators to provide regular proof of compliance regarding IT security requirements in form of audits, evaluation, or certification. See IT-Sicherheitsgesetz, supra note 196.
  • 216. Various U.S. federal entities, including the National Institute of Standards and Technology and the White House Office of Science and Technology Policy, assess technological development with resources dedicated on cyber.
  • 217. While authorities and responsibilities with regard to cyber are allocated across numerous U.S. federal agencies, the U.S. Cybersecurity Coordinator at the White House occupies a central function in coordinating U.S. cybersecurity policies and activities. See Michael Daniel, https://www.whitehouse.gov/blog/author/michael-daniel (last visited Aug. 18, 2015).
  • 218. See ITU, Global Cybersecurity Index & Cyberwellness Profiles, supra note 179 (including some level of detail on legal, organizational, and technical measures, as well as capacity building and cooperation from ITU nations that can be construed as emerging norms relevant to cyber due diligence).
  • 219. See, for example, Gregory J. Touhill & Joseph Touhill, Cybersecurity for Executives: A Practical Guide 123 (2014).
  • 220. See Jamie Barnett et al., Cybersecurity Issues in Dealmaking: What You Need to Know, ACG at 7 (2014), http://www.acg.org/UserFiles/file/Cybersecurity%20Webinar%20-Final.pdf.
  • 221. What is Critical Infrastructure?, DHS, http://www.dhs.gov/what-critical-infrastructure (last visited Jan. 16, 2014). See What is the ICS-CERT Mission?, http://ics-cert.us-cert.gov/Frequently-Asked-Questions (last visited Jan. 17, 2014) (The U.S. Cyber Emergency Response Team, which is part of DHS, identifies sixteen critical infrastructure sectors consistent with Homeland Security Presidential Directive 7, including: agriculture, banking and finance, chemical, commercial facilities, dams, defense industrial base, drinking water and water treatment systems, emergency systems, energy, government facilities, information technology, nuclear systems, public health and healthcare, telecommunications, and transportation systems.).
  • 222. See, for example, Barnett et al., supra note 220, at 12.
  • 223. Robert Richardson, CSI Computer Crime & Security Survey, CSI 19 (2008), http://i.cmpnet.com/v2.gocsi.com/pdf/CSIsurvey2008.pdf; Verizon, Data Breach Investigations Report 63 (2012), http://www.verizonbusiness.com/resources/reports/rp_data-breach-investig... [hereinafter “DBIR”].
  • 224. Id. at 19.
  • 225. See id. at 19.
  • 226. See Eye of the Storm: Key Findings from the 2012 Global State of Information Security Survey, PwC 33 (2012), http://www.pwc.co.nz/global-state-of-information-survey.aspx.
  • 227. Id.
  • 228. See US Cybercrime: Rising Risks, Reduced Readiness: Key Findings from the 2014 US State of Cybercrime Survey, PwC 6 (2014), http://www.pwc.com/us/en/increasing-it-effectiveness/publications/assets....
  • 229. See Touhill & Touhill, supra note 219, at 209 (“[D]ue diligence refers to your activities to identify and understand the risks facing your organization.”).
  • 230. Ensign, supra note 5.
  • 231. Erin Ayres, Cybersecurity Easing Its Way into M&A Due Diligence, Cyber Risk Network (Aug. 22, 2014), http://www.cyberrisknetwork.com/2014/08/22/cybersecurity-easing-way-ma-p....
  • 232. Id.
  • 233. Id.
  • 234. See Stone v. Ritter, 911 A.2d 362, 370 (Del. 2006) (finding that to establish a failure of oversight, a shareholder must plead and prove that: “(a) the directors utterly failed to implement any reporting or information system or controls; or (b) having implemented such a system or controls, consciously failed to monitor or oversee its operations thus disabling themselves from being informed of risks or problems requiring their attention”).
  • 235. See Ayres, supra note 231.
  • 236. Cf. Willingham v. Global Payment, 2013 WL 440702, at *19 (N.D. Ga. Feb. 5, 2013) (reflecting an alternative view in which courts are reluctant to rely on data security standards as a means of determining whether a duty was owed, let alone whether they should be used to determine a reasonable standard of care).
  • 237. See Target Hackers Broke in via HVAC Company, Krebs on Sec. (Feb. 5, 2014), http://krebsonsecurity.com/2014/02/target-hackers-broke-in-via-hvac-comp....
  • 238. Cyber Security in M&A 7, Freshfields Bruckhaus Deringer (2014), http://www.freshfields.com/uploadedFiles/SiteWide/News_Room/Insight/Camp... [hereinafter Freshfields].
  • 239. Id. at 7.
  • 240. See Unsecured Economies: Protecting Vital Information 6, McAfee (2009), https://www.cerias.purdue.edu/assets/pdf/mfe_unsec_econ_pr_rpt_fnl_onlin... (comparing cybersecurity investment rates across countries and concluding that “[i]t appears that decision makers in many countries, particularly developed ones, are reactive rather than proactive”).
  • 241. See Freshfields, supra note 238 at 10.
  • 242. Steven Norton, Going Beyond Due Diligence to Monitor Vendor Cybersecurity, Wall St. J., (Mar. 21, 2014), http://blogs.wsj.com/cio/2014/03/21/going-beyond-due-diligence-to-monito....
  • 243. See Touhill & Touhill, supra note 219, at 291 (“You should measure your cybersecurity posture as part of your efforts to practice due care and due diligence, monitor and control your information systems, maintain legal and regulatory compliance, meet contractual obligations, and maintain certifications.”).
  • 244. For more on this topic, see Amanda N. Craig et al., Proactive Cybersecurity: A Comparative Industry and Regulatory Analysis, 52 Am. Bus. L. J. 721 (2015). See also US Cybercrime, supra note 228, at 7 (noting that the best policy among those studied to help detect and deter cybercriminals was having an incident response team practicing vulnerability management).
  • 245. Michael D. McGinnis, An Introduction to IAD and the Language of the Ostrom Workshop: A Simple Guide to a Complex Framework, 39 Pol’y Stud. J. 163, 171–72 (2011) (defining polycentricity as “a system of governance in which authorities from overlapping jurisdictions (or centers of authority) interact to determine the conditions under which these authorities, as well as the citizens subject to these jurisdictional units, are authorized to act as well as the constraints put upon their activities for public purposes.”).
  • 246. Elinor Ostrom, Polycentric Systems as One Approach for Solving Collective-Action Problems 1 (Ind. Univ. Workshop in Political Theory and Policy Analysis, Working Paper Series No. 08–6, 2008), http://dlc.dlib.indiana.edu/dlc/bitstream/handle/10535/4417/W08-6_Ostrom....
  • 247. See Shackelford, supra note 6 at 1326-1333.
  • 248. Elinor Ostrom, A Polycentric Approach for Coping with Climate Change 35 (World Bank, Policy Research Working Paper No. 5095, 2009), http://www.iadb.org/intal/intalcdi/pe/2009/04268.pdf.
  • 249. Robert O. Keohane & David G. Victor, The Regime Complex for Climate Change 9 Persp. on Pol. 7, 15 (2011). Cf. Julia Black, Constructing and Contesting Legitimacy and Accountability in Polycentric Regulatory Regimes, 2 Reg. & Governance 137, 157 (2008) (discussing the legitimacy of polycentric regimes, and arguing that “[a]ll regulatory regimes are polycentric to varying degrees”).
  • 250. See Finnemore & Sikkink, supra note 119 (discussing the circumstances in which norm cascades occur).
  • 251. See Shackelford, supra note 23 at 38–45.
  • 252. See, for example, Elinor Ostrom, Institutional Analysis and Development: Elements of the Framework in Historical Perspective, in Historical Developments and Theoretical Approaches in Sociology in Encyclopedia of Life Support Systems(EOLSS), Developed under the Auspices of the UNESCO (C. Crothers ed., 2010), http://www.eolss.net/sample-chapters/c04/e6-99a-34.pdf.
  • 253. Cost-benefit analysis in the cybersecurity context is challenging both because of the difficulty in defining all the associated costs of a successful data breach as well as determining an investment strategy to identify and instill technological, budgetary, and organizational best practices. See, for example, Touhill & Touhill, supra note 219, at 30–31; Shackelford, Risky Business: Enhancing Private-Sector Cybersecurity, in Managing Cyber Attacks in International Law, Business, and Relations: In Search of Cyber Peace 197, 212–15, 224–230, supra note 21.
  • 254. See Elinor Ostrom, Polycentric Systems: Multilevel Governance Involving a Diversity of Organizations, in Global Environmental Commons: Analytical and Political Challenges in Building Governance Mechanisms 105, 118 tbl. 5.3 (Eric Brousseau et al. eds., 2012) (citing Elinor Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action 90 (1990)).
  • 255. FACT SHEET: White House Summit on Cybersecurity and Consumer Protection, White House, https://www.whitehouse.gov/the-press-office/2015/02/13/fact-sheet-white-... (last visited June 17, 2015).
  • 256. Henning Wegener, Cyber Peace, in The Quest for Cyber Peace 77, 82 (Int’l Telecomm. Union & Permanent Monitoring Panel on Info. Sec. eds., 2011), http://www.itu.int/dms_pub/itu-s/opb/gen/S-GEN-WFS.01-1-2011-PDF-E.pdf (arguing that “unprovoked offensive cyber action, indeed any cyber attack, is incompatible with the tenets of cyber peace”).
  • 257. To its credit, though, the ITU report recognizes this fact, and that the concept of cyber peace should be broad and malleable given an ever-changing political climate and cyber threat landscape. Id., at 78 (“The definition [of cyber peace] cannot be watertight, but must be rather intuitive, and incremental in its list of ingredients.”).
  • 258. The notion of negative peace has been applied in diverse contexts, including civil rights. See, for example, Martin Luther King, Non-Violence and Racial Justice, Christian Century 118, 119 (1957) (arguing “[t]rue peace is not merely the absence of some negative force – tension, confusion or war; it is the presence of some positive force – justice, good will and brotherhood”).
  • 259. See Johan Galtung, Peace, Positive and Negative, in The Encyclopedia of Peace Psychology 1, 1 (Daniel J. Christie ed., 2011) (comparing the concepts of negative and positive peace). Definitions of positive peace vary depending on context, but the overarching issue in the cybersecurity space is the need to address structural problems in all forms, including the root causes of cyber insecurity such as economic and political inequities, legal ambiguities, as well as working to build a culture of peace. Id. (“The goal is to build a structure based on reciprocity, equal rights, benefits, and dignity . . . and a culture of peace, confirming and stimulating an equitable economy and an equal polity.”); see also UNESCO, A Declaration on A Culture of Peace, U.N. Doc. A/Res/53/243, http://www.unesco.org/cpp/uk/declarations/2000.htm (offering a discussion of the prerequisites for creating a culture of peace including education, multi-stakeholder collaboration, and the “promotion of the rights of everyone to freedom of expression, opinion and information”).
  • 260. Brandon Valeriano & Ryan C. Maness, The Coming Cyberpeace: The Normative Argument Against Cyberwarfare, Foreign Aff. (May 13, 2015), https://www.foreignaffairs.com/
    articles/2015-05-13/coming-cyberpeace.
  • 261. Dennis Edwards et al., Prevention, Detection and Recovery from Cyber-Attacks Using a Multilevel Agent Architecture, Sys. of Sys. Engineering 1, 1 (2007).
  • 262. See Robert Westervelt, Kaspersky: Redundancy, Offline Backup Critical For Cyberdefense, CRN (Feb. 8, 2013), http://www.crn.com/news/security/240148219/kaspersky-redundancy-offline-... Andreas A. Kuehn & Milton Mueller, Analyzing Bug Bounty Programs: An Institutional Perspective on the Economics of Software Vulnerabilities, Proc. of the 42nd Res. Conf. on Comm., Info., and Internet Pol’y (2014), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2418812.
  • 263. James A. Lewis, Raising the Bar for Cybersecurity, CSIS 1, 1 (Feb. 12, 2013), http://csis.org/files/publication/130212_Lewis_RaisingBarCybersecurity.pdf.
  • 264. See Microsoft, International Cybersecurity Norms: Reducing Conflict in an Internet-Dependent World (2014), http://tinyurl.com/ogv9qzq.