How do You Create U.S. Cyber Guidelines for Foreign Firms?

Fitting foreign companies critical to U.S. society into a domestic cybersecurity framework will be tricky, said a U.S. pharmaceutical executive helping to form the guidelines.

On Wednesday, government and industry leaders met for the first time to try hammering out voluntary security standards for private sector networks. A policy is due by November, under a Feb. 12 cyber executive order covering "critical infrastructure" American sectors that sustain economic and national security.

"What happens if we have a non-U.S. company operating critical infrastructure," questioned Terry Rice, Merck chief information security officer, who also has experience consulting critical infrastructure defense contractors. There is no answer yet as to how the guidelines will apply to those organizations, he said. 

Merck, headquartered in New Jersey, spends about $8 billion annually on medical research and development, according to the manufacturer. U.S. corporations repeatedly complain that foreign firms, particularly Chinese-owned entities, are pilfering this proprietary, expensive data, the national intelligence director has reported. 

Commerce Department Deputy Secretary Rebecca Blank, earlier in the day, had said the security standards policy will be "a living framework" that adapts to morphing threats. 

The National Institute of Standards and Technology, which is steering the negotiations, is in the difficult position of formulating cross-industry controls that the White House would prefer Congress mandate. Many companies have shunned the idea of government-regulated computer security. 

On Wednesday, NIST officials noted that perhaps the forthcoming policy could prove useful in shaping cyber guidelines for all firms, worldwide. 

Merck falls under the critical infrastructure category because it produces vaccines and other treatments that protect Americans from the aftereffects of terrorist attacks, disease outbreaks and natural disasters.

But the company also runs a consumer products division to turn out, for instance, Coppertone sunscreen that Rice said he worries could be subject to "restrictive requirements.” Rice cautioned the standards could impede business unconnected to Merck’s critical infrastructure responsibilities.

After standards are settled on, the Homeland Security Department will execute the program and offer incentives, such as liability protections and tax incentives, Commerce officials said. NIST, a Commerce agency with a favorable reputation among businesses, began outreach work last month at a briefing organized by lobbying firm Venable LLP.   

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