Whats new with PCI-DSS 2.0 - Part 1

The much-awaited PCI-DSS standard v 2.0 is out now. The PCI Security Standards Council (SSC) has released the standard on the 28th of Oct 2010 and is available for download at their site, along with the Summary of Changes from v 1.2.1 to 2.0. Some of the changes are small changes in verbiage, just clarifying the stance on certain issues, while some others are changes which may have medium to large scale impacts in certain PCI environments. In this two part blogpost I will be discussing some of the key changes which may have that kind of impact.

The first thing I noticed was the amount of detail provided to QSAs at the beginning of the document. The Report on Compliance Details, Scoping, etc. have been detailed very heavily. This is good, because over some fears over lack of quality norms by QSAs, the reports were lax on details (due to laxity of testing). The SSC has been consistently trying to improve the quality of assessment and the initial sections of the Security Assessment Procedures are evidence of that.

Requirement 1, The Firewall and Network Security Requirement has largely gone through changes in verbiage, clarifying some of the questions about implementation of firewalls and network segmentation. The IP Masquerading requirement using NAT/PAT as the benchmark has been extended to including load balancers, content caches, firewalls, etc. Also, employees with personal firewall software on their computers in the PCI scoped environment should be unable to turn them off. Sensible, but largely basic.

Clarity on the "One Primary Function Per Server" rule has been given at last. The rule has been interpreted in several ways, but there is a measure of clarity with the 2.0. The Standard stipulates that you must use one primary server per function where the security levels of those functions vary, for instance, DNS, Web and DB server, or Card Management Application Server and Database Server. They have also indicated that in a VM environment, one primary function per virtual machine is in order. This was a requirement that was being taken to a ridiculous level on both sides of the spectrum.

Another important change, which comes across as innocuous but can have far reaching implications is the non-console administrative access requirement, where the PCI stipulates that when accessing system components like network devices and servers from a non-console administrative perspective, encryption like SSH, SSL, etc have to be used to access. In earlier avatars of the standard, this was just a simple allusion to SSL or SSH or IPSec, but they have now mandated strong cryptography. This causes quite an issue with network devices that ship with SSL certificates that still support SSLv2 or MD5, or in case of SSH with SSHv1. These were taken as compliant (with PCI 1.2.1) because they supported encrypted non-console admin access. Now, however with the strong crypto requirement for non-console admin access, these will have to be overhauled with better SSL certs and SSH implementations, and even in the case of IPSec, stronger crypto.

One of the requirements that I believe will set PCI back by some measure is Requirement 3.2. This requirement mandates that entities should not store Sensitive Authentication Data under any circumstances (even if encrypted). This requirement was extremely difficult to enforce in Issuing Banks or Issuing Processors as several of them are on Mainframe legacy apps and these apps, not only store CVV(aka Card Security Code), but also log the full card track data and transaction in cleartext. However, certain issuing banks/processors have adopted the standard where the CVV is generated on the fly (by a Hardware Security Module) for authorization and compared with the CVV sent in the transaction and if the CVVs are found to match, the transaction is authorized. This is a good practice, which ensures that CVVs arent stored by the organization. But these implementations (in my experience) are still the minority. The PCI 2.0 has allowed Issuing organizations to store sensitive authentication data like the CVV. They hav excepted issuers and processors from this requirement. I believe this is a bad move, because issuing orgs now, do not have an impetus to change over to better (and more secure) practices in relation to storage of Sensitive Authentication Data.

The Standard also changes some key issues with key management (no pun intended). The standard has mentioned that key-encrypting-keys (KEK) need to be equivalent to the Data-Encrypting-Key(DEK) in terms of size. Now, as it can be imagined, the DEK encrypts the Data and the KEK, as an additional measure of security is used to encrypt the DEK. In many applications, the DEK is a symmetric cipher (like AES 256 ot 3 DES 128) and the KEK is an asymmetric cipher (RSA, DSA, etc). This is usually done because reasons of efficiency. Data encryption is a heavy process, hence symmetric encryption is utilized for higher speeds of encryption. Asymmetric is used for KEKS, because the private-public keypair and is easier to secure than another symmetric key. However, with the mandate of the PCI on DEKs and KEKs having equivalent size, length and complexity, the tables are turned. The equivalent of a 256 bit symmetric cipher is a 15460 bit asymmetric cipher. Ouch.

A good fallout of the key management requirements is the 'split-knowledge' requirement. Earlier, the standard mandated split knowledge and dual-control of the encryption keys by key custodians for key generation,etc. This was a serious issue with Applications, as key management could be automated, but because of this requirement mandating split-knowledge and dual control of keys, developers used to come up with clunky executables (or other kludges) that would allow key custodians to enter half a key each for generation or key change. Now, however the stance has changed to the fact that split-knowledge of keys by custodians is only necessary in case of manually driven key management processes (where split knowledge and dual control make sense). Great news for applications, where the key management processes are (and ideally should be) automated.

This ends Part 1 of my PCI-DSS 2.0 review. This will be followed up with the rest of the review in Part 2. Hope you find it useful!

PA-DSS 101

That blank feeling in my stomach, which was there for the past 2 weeks or so is slowly disappearing as I sit down to write this piece. My blog hasn't been impregnated in the past 2 weeks with my words and (sometimes meaningless) rants. I was unwell during the week and till yesterday I was at a Risk Assessment workshop on the OCTAVE methodology, where I spoke on Vulnerability Assessment and generally had some engagements which didnt allow me the time to sit down and pen something in the interest of security.

This piece is a result of an article I read in blogosphere somewhere today. It was something about Visa giving a great thrust to Software security through the PA-DSS program. Visa has indicated that Visa acquirers in all regions of the world must ensure that the merchants they newly sign must use PA-DSS Compliant Applications in their environments by the July 2010 and existing merchants should be transitioned to PA-DSS compliant Applications by the July 2012. I would see that as a welcome step in software/application security, and something that will be helpful to a huge extent in the application security quest. This is why:

What is the PA-DSS?
The PA-DSS is not as famous as its mother standard, which we all lovingly know as the PCI-DSS also known simply, as PCI. The PA-DSS is the Payment Application Data Security Standard. It is meant for commercial applications which come in contact with cardholder information either during the authorization or settlement function of the card payment transaction. PA-DSS is entirely meant for an application and consists of 14 requirements encompassing all aspects of security which a payment application will have to adhere to. This includes secure storage of cardholder information, logging, authentication&authorization, secure development and deployment, etc. The PA-DSS is a sub-set of the PCI-DSS, with the core focus on the application as opposed to the cardholder data environment in PCI-DSS. This is better explained with an example. For instance, a application developer "A" has developed an E-Commerce application which is to be sold to several merchants. Merchants all over the world are either thinking about, undergoing or have undergone PCI Compliance. If 'A' has to support his prospective customer's PCI Compliance effort, then it imperative that the application be validated as per the PA-DSS requirements. The PA-DSS is a certification for the application and not for the environment. So, if 'A' gets his application validated PA-DSS, then the application is readily designed to support the PCI requirements and merchant's PCI compliance effort wouldn't be hindered. The PA-DSS has been designed to ensure that the payment applications deployed in PCI environment must support PCI compliance, which is why the PA-DSS has come to be.

Why PA-DSS?
One of the greatest impediments for security are the applications. I have seen several environments, where the entire process of security compliance or practices comes to grinding halt because of applications being unsupportive of security requirements. Applications are the lifeblood of any entity in business today. An e-commerce merchant cannot do business without the e-commerce application and its related components. A payment processor will find it impossible to process millions of transactions a day without the financial switch and its related applications. Customers are wedded to the applications they purchase and any change is resented and sometimes not recommended as a 24x7 scenario is the need of the hour. Most of these applications fall short of basic and advanced security needs by a long shot. Several financial switch applications log the entire magnetic stripe information, including the Card number, CVV and other track elements in CLEAR TEXT, a strict no-no from the PCI standpoint as well as from a general security standpoint. Several E-commerce applications purchased and deployed by customers don't support hashing of passwords, encryption of cardholder information and not to mention web application security practices like input validation. Point of Sale applications used by merchants log the entire card number in the transaction logs and several of them dont support anything more than a 4 char password. This is a huge impediment in adhering to security requirements. Merchants and processors often struggle with security implementation because of the applications and even after the best workarounds, the risk of data being stolen, modified or destroyed still remains amply. The aim of the PA-DSS is to correct this situation by ensuring that application vendors creating commercial payment applications to be sold, must get their applications validated against the PA-DSS requirements.

Why not just PCI? Doesn't it cover Application Security?
Yes, PCI does cover application security in its requirements. In fact Requirement 6 is dedicated largely to application security practices and web application security practices, including a great deal of wisdom from the OWASP knowledge base, providing a much-needed boost to AppSec, but PCI addresses the applications which are custom developed or developed in-house. The focus of the PA-DSS is for payment applications which are to be sold, distributed or licensed to third parties. So the loop is pretty simple

if (inHouseApplication() || customCode()) {
 validateAsPerPCIDSS();
} else {
 validateAsPerPADSS();
}

Thats great, I have developed a log management app for PCI, when can I get it PA-DSS validated?
Well, you do not. The PA-DSS is only applicable for applications which are part of the payment authorization and settlement cycle. So if you are a log management application, WAF, or any other application which is looking for a marketing boost from the PCI fever, you will not able to go the PA-DSS route as it is specifically for Payment Applications.

PCI Compliance: Hazards of the "Dull-Clarity" effect

It has been a while since I sat down to write a post for my blog. The monsoon season has just set in this part of the world. The days are hot and it rains heavily on occasion causing one to just enjoy the comfort of his bed a little more than usual.

This was a piece, which had been in the works for sometime now. I had planned to write it, close on the heels of the Savvis lawsuit (for the CardSystems breach), but I missed my cue. Anyway, here goes. This lawsuit has been abuzz in blogosphere because some of the banks that were processing their card transactions through CardSystems (which was involved with one of the largest credit card breaches in history), have decided to file a lawsuit against Savvis, the organization that attested to the compliance of CardSystems, with the Visa compliance requirement called CISP (Cardholder Information Security Program). The CISP was the predecessor to someone we all know lovingly as the PCI-DSS (Payment Card Industry Data Security Standard). A little background here. CardSystems was one of the largest credit card processors in the US, and they were involved in a breach which compromised over 40 million card numbers. Savvis was the company, which certified CardSystems as compliant with the standards. Now, four years later, Merrick Bank has filed a case against Savvis, alleging that it has been negligent in certifying CardSystems. Frankly, I am not aware of whether Savvis has been negligent or not, but blogosphere and online news portals have gone wild with the news. The Security gurus are quoting their same old lines of the inadequacy of PCI Compliance and are questioning the 'rigour' of the standard in the protection of cardholder information.

My intention with this piece is 1) To introduce the some people out there to the concepts of "Reasonable Assurance" and "as on date"; Two concepts which have been in lost in the rhetoric which several security folks have been dishing out relentlessly. 2) Drive home my point of Risk based compliance, another concept which has been dulled with wrong interpretations of the PCI Standards 3) and hope that a few organizations would actually understand the concept of PCI being risk-driven as opposed to a dull checklist, requiring their meek submissiveness.

The security world has much to learn from the Financial audit and assurance world. No auditor will be able to guarantee that an organization's financial statements are free from error or misstatement. The auditor has to do everything that a prudent person in his place would do and in the end, signs off on a report which states that a "reasonable assurance" can be provided with respect to the financial statements. The auditor is not god, and the laws are quite aware of that and have provided for a similar treatment. Moreover, the auditor does not have to look for fraud, another basic truth in the financial audit world. The auditor must perform a risk assessment and gain an understanding of Internal control, before he performs his audit tasks. Contrast this with the security world. Information Security assurance, being nascent as it is, has not promulgated such basic truths to its practicing professionals. It still (subtly) preaches the utopian ideals of "Perfect security" Furthermore, PCI as a standard still has a very hazy understanding of what assurance the QSA actually provides. Is it "Reasonable Assurance" or is it a guarantee, because if it is a guarantee, then QSAs should pack their bags and quit the business, because that is impossible to provide. When it comes to reasonable assurance, the only defense that an auditor should provide in his alleged negligence, is his working papers and evidence. So my advice to people who are QSAs, please keep your workpapers and evidence in perfect auditor, they are your only saving grace tomorrow when fingers are pointed at you.

Another important concept which people usually miss out with PCI Compliance is the "as on date" concept. When an assessor certifies an organization for PCI, the certification is done as on date and not for the "period ending". I have seen several companies take the proverbial snooze after their PCI Compliance. 8/10 organizations I have seen have serious issues with their applications, or their network configurations or their log management and review. They would have slipped into non-compliance several times during the year and would have remained so till the the recertification for PCI Compliance. An assessor cannot be held responsible for the negligent organization on a future date, unless he has wrongfully or negligently assessed the misgiving as compliant as on the date of certification. I would like to add, at this juncture that I am not aware of whether Savvis was actually negligent or not. Its negligence can only be established once its made to produce evidence of its assessment and its work papers in front of a court. My advise to assessors is to go ahead and fail organizations which have not demonstrated compliance throughout the year.

When it comes to Risk based compliance, my views have already been aired, but I would like reiterate some practical angles to the same. Several clients ask me, "Where does it say that this has to be done in the PCI Standards?" The greatest advantage of the PCI Standards is also its weakest point. Its clarity. Several organizations interpret PCI to be a checklist requirement set which they need to fulfill and be done with. The PCI has acquired a reputation of being a standard which prescribes exaclty what to do and how to do it and that it is inflexible in its approach. True, it is specific, which is why, when a recommendation outside its realm, but very much in the realm of specific risk is given, it is quickly shot down by an organization as not being specific in the requirement. I have several (often heated) arguments with clients who ask me questions like, "Where does PCI say that Internet access to these partiular set of users should be blocked?", My reply to them is that PCI is a baseline set of controls to be applied to any environment storing, processing or transmitting cardholder information. For such specific requirements, a risk assessment is in order, which narrows down certain risks which are specific to the environment. If the risk of individuals having access to cardholder information as well as the Internet (where cardholder information can be sent over email or over the internet in any way) is high, then it is only prudent that you mitigate the risk and not let it become your Achilles Heel. My advice to organizations. Dont look at PCI as a checklist for truly being secure. Treat PCI as a baseline and add to it controls for the risks which are specific to your environment.

I would like to conclude by stating this. PCI Compliance, like anything else in Information security, is at its growing phase. There are bound to be a few teething problems with respect to the standard and its expectations. An organization intent on pursuing PCI Compliance should not be misguided by the pure view of the 12 requirements of PCI, but to understand the risks before going into requirements.

The Devil's Advocate: Compliance vs Security

The fires in blogosphere are ablaze with talk about the Heartland Payment Systems breach. There has been a great deal of PCI bashing, right from Bob Russo's statements to the whole issue of Compliance and Security.

For those who are not aware of the HPS, or who have had their head in the ground because of the current economic meltdown, I shall recap. Heartland Payment Systems is a large Payment processor in the US. Malicious software in their payment processing network seems to have caused one of the largest breaches in history. It seems as though over a 100 million cards may have been stolen. The great gory details of the story are not known yet as forensics for this sort of thing takes quite a while.

Security vs Compliance is one of the most significant things I have heard being posted all over the Internet. Everyone seems to be talking about the fact that Compliance cannot be equated to Security and that the PCI Standards are flawed in their attempt to make their industry more secure.

Us security folk secretly love an incident of this magnitude. Its incidents like these which makes people sit up and take notice of security needs and this is our time to shine :) But on a more serious note, let us take stock of some important facts at this point.

Agreed, Security != Compliance. I believe strongly that those who expect their plain-vanilla compliance program to do miracles for them. Compliance can never take the place of a voluntarily committed security program which comes from experience and a proactive risk approach. But, at the same time, one cannot simply discount the fact that compliance is important. Take the case of the American Capital markets. The deregulation (lack of compliance and enforcement) did not ensure that all the Banks and large Investment houses take a "Safety First" stance. They continuously created their weird and arcane financial intruments, which were toxic for the economy. Until there was a Sarbanes Oxley for the Corporate world, there would be no accountability for any of the Top Management's statements and actions (case: Enron). In fact, only the stick that is accompanied with non-compliance (fines, increased transaction costs, de-listing, etc) gets some companies adopt a security program. The carrot that comes (proactive security, better understanding of risks, threats and vulnerabilities, etc) with compliance simply does not appeal to these companies.
In my time handling several PCI projects, I realized that there are always a bunch of organizations which are driven towards genuinely acheieving optimum security and not just chasing a certification and there are others, who decide to "dress their processes well" before the auditor walks in. We need to understand that there are always going to be organizations like the latter and accept the fact that these organizations can only be driven to better security by incentivizing them in forms such as low cost of security, increased business opportunity because of enhanced security and of course, once they get hacked and lose data and reputation (and if they are still not bankrupt in the process), would try and develop a proactive, risk based approach to security. This brings me to my second point....

PCI = Risk-based Security Compliance. When I hear someone talk about PCI Compliance, I usually hear the word "checklist". PCI is viewed as more of a checklist assessment and once the checklist is filled with "Yes", everyone's happy. This is very very far from the truth. Companies and Security professionals who look at PCI in this light are actually getting it all wrong. PCI is nothing but Asset Based Risk Assessment, where the asset in question is Cardholder Information and the ultimate objective is the protection of Cardholder Information. Which is why Security pros need to understand the systems of interest, access paths, points and containers in which the asset is housed and devise security solutions based on the PCI Requirements. One cannot advise a small organization getting PCI Compliant to drive its entire encryption process using a HSM (Hardware Security Module) or a large processor like Heartland to use something like TrueCrypt to drive encryption. Yes, PCI is granular, PCI is very clear on most counts, but by treating PCI Compliance as a checklist assessment or a checklist compliance program, security assessors are actually saying that Compliance = Security, which brings me to my next point.

In the long run, compliance ultimately becomes "bastardized" because of the people advocating and following it. The same thing happened for ISO-27001, which is a great standard, but eventually became mis-understood and mis-interpreted beyond recognition. I came across and ISO-27001 certification which was only done for the "Security Components" of a company's infrastructure (namely 2 firewalls and 2 routers, in which case the routers are not actually a "Security Component"). There is nothing inherently wrong with the standard. It is just that for the sake of convenience of both the security assessor and the assessee, the standards are interpreted in a way which does not take into account, the all-important aspect of Risk (which is unique to every organization). So, to re-iterate, when an organization is going in for PCI Compliance, it needs to determine what kind of entity it is. Is it the former type, proactive, and risk-based towards security needs, or is it like the latter, the "Chasing certifications 'cause I need this business" type. If a company actually believes that it is in the first type, then it needs to evaluate security professionals who share the same values and ensure that the professionals deliver on their promises at performing a solid evaluation of risk and then concomitant controls.

In conclusion, I would like to say this. Although Compliance and Security are not necessarily the same thing, we need to appreciate the fact that compliance, when interpreted and enforced correctly does eventually lead to a solid Information Security program. It is upto the people in the organization to determine what they want, Compliance leading to Effective Security or Compliance just leading to.....Compliance.