[Federal Register Volume 90, Number 11 (Friday, January 17, 2025)]
[Rules and Regulations]
[Pages 6298-6453]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-00708]
[[Page 6297]]
Vol. 90
Friday,
No. 11
January 17, 2025
Part IV
Department of Homeland Security
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Coast Guard
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33 CFR Parts 101 and 160
Cybersecurity in the Marine Transportation System; Final Rule
Federal Register / Vol. 90, No. 11 / Friday, January 17, 2025 / Rules
and Regulations
[[Page 6298]]
DEPARTMENT OF HOMELAND SECURITY
Coast Guard
33 CFR Parts 101 and 160
[Docket No. USCG-2022-0802]
RIN 1625-AC77
Cybersecurity in the Marine Transportation System
AGENCY: Coast Guard, DHS.
ACTION: Final rule; request for comments.
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SUMMARY: The Coast Guard is updating its maritime security regulations
by establishing minimum cybersecurity requirements for U.S.-flagged
vessels, Outer Continental Shelf facilities, and facilities subject to
the Maritime Transportation Security Act of 2002 regulations. This
final rule addresses current and emerging cybersecurity threats in the
marine transportation system by adding minimum cybersecurity
requirements to help detect risks and respond to and recover from
cybersecurity incidents. These include requirements to develop and
maintain a Cybersecurity Plan, designate a Cybersecurity Officer, and
take various measures to maintain cybersecurity within the marine
transportation system. The Coast Guard is also seeking comments on a
potential delay for the implementation periods for U.S.-flagged
vessels.
DATES: This final rule is effective July 16, 2025.
Comment period for solicited comments: Comments on a potential 2-
to-5-year delay for the implementation periods for U.S.-flagged vessels
in Section VII of this preamble must be submitted by March 18, 2025.
ADDRESSES:
Docket: To view documents mentioned in this preamble as being
available in the docket, go to www.regulations.gov, type USCG-2022-0802
in the search box, and click ``Search.'' Next, in the Document Type
column, select ``Supporting & Related Material.''
Comment period for solicited additional comments: You may submit
comments on the implementation periods for U.S.-flagged vessels
discussed in Section VII of this preamble via the electronic Federal
Docket Management System. To do so, go to www.regulations.gov, type
USCG-2022-0802 in the search box and click ``Search.'' Next, look for
this document in the Search Results column, and click on it. Then click
on the Comment option. If you cannot submit your material by using
www.regulations.gov, call or email the person in the FOR FURTHER
INFORMATION CONTACT section of this final rule for alternate
instructions.
FOR FURTHER INFORMATION CONTACT: For information about this document,
email [email protected] or call Commander Brandon Link, Office of
Port and Facility Compliance, 202-372-1107; or Commander Christopher
Rabalais, Office of Design and Engineering Standards, 202-372-1375.
SUPPLEMENTARY INFORMATION:
Table of Contents for Preamble
I. Abbreviations
II. Executive Summary
III. Basis and Purpose
A. Cybersecurity Threats
B. Legislation, Regulations, and Policy
C. Legal Authority
IV. Background
A. The Current State of Cybersecurity in the MTS
B. Current MTSA Regulations Related to Cybersecurity
V. Discussion of Comments and Changes
VI. Discussion of the Final Rule
VII. Request for Comment
VIII. Regulatory Analyses
A. Regulatory Planning and Review
B. Small Entities
C. Assistance for Small Entities
D. Collection of Information
E. Federalism
F. Unfunded Mandates
G. Taking of Private Property
H. Civil Justice Reform
I. Protection of Children
J. Indian Tribal Governments
K. Energy Effects
L. Technical Standards
M. Environment
N. Congressional Review Act
I. Abbreviations
ABS American Bureau of Shipping
The Act James M. Inhofe National Defense Authorization Act for
Fiscal Year 2023 (Pub. L. 117-263)
AGCS Allianz Global Corporate and Specialty
AIS Automatic Identification System
AMSCs Area Maritime Security Committees
ANPRM Advance notice of proposed rulemaking
ASP Alternative Security Program
BLS Bureau of Labor Statistics
BSEE Bureau of Safety and Environmental Enforcement
CEA Council of Economic Advisors
CFR Code of Federal Regulations
CGCSO Coast Guard Cyber Strategic Outlook
CG-CVC Coast Guard Office of Commercial Vessel Compliance
CGCYBER U.S. Coast Guard Cyber Command
CG-ENG Coast Guard Office of Design and Engineering Standards
CG-FAC Coast Guard Office of Port and Facility Compliance
CIRC Cyber Incident Reporting Council
CIRCIA Cyber Incident Reporting for Critical Infrastructure Act of
2022
CISA Cybersecurity and Infrastructure Security Agency
CISO Chief Information Security Officer
COTP Captain of the Port
CPG Cybersecurity Performance Goal
CRM Cyber risk management
CSF Cybersecurity Framework
CSO Company Security Officer
CSRC Computer Security Resource Center
CVC-WI Coast Guard's Office of Commercial Vessel Compliance's Work
Instruction
CySO Cybersecurity Officer
DC3 Defense Cyber Crimes Center
DCISE Defense Industrial Base Collaborative Information Sharing
Environment
DHS Department of Homeland Security
DOC Document of Compliance
DoD Department of Defense
FBI Federal Bureau of Investigation
FEMA Federal Emergency Management Agency
FR Federal Register
FRFA Final Regulatory Flexibility Analysis
FSA Facility Security Assessment
FSO Facility security officer
FSP Facility security plan
GPS Global Positioning System
HMI Human-machine interface
IACS International Association of Classification Societies
ICR Information collection request
IEc Industrial Economics, Incorporated
IMO International Maritime Organization
IP internet protocol
INMARSAT International Maritime Satellite
IRFA Initial Regulatory Flexibility Analysis
ISM International Safety Management
IT Information technology
KEV Known exploited vulnerability
LANTAREA Coast Guard Atlantic Area
MARSEC Maritime Security
MCAAG Maritime Cybersecurity Assessment and Annex Guide
MISLE Marine Information for Safety and Law Enforcement
MMC Merchant Mariner Credential
MODU Mobile offshore drilling unit
MSC Marine Safety Center
MSC-FAL International Maritime Organization's Marine Safety
Committee and Facilitation Committee
MTS Marine transportation system
MTSA Maritime Transportation Security Act of 2002
NAICS North American Industry Classification System
NIST National Institute of Standards and Technology
NMSAC National Maritime Security Advisory Committee
NPRM Notice of proposed rulemaking
NRC National Response Center
NVIC Navigation and Vessel Inspection Circular
OCMI Officer in Charge, Marine Inspection
OCS Outer Continental Shelf
OCSLA Outer Continental Shelf Lands Act of 1953
OEWS Occupational Employment and Wage Statistics
OMB Office of Management and Budget
[[Page 6299]]
OSV Offshore supply vessel
OT Operational technology
PACS Physical Access Control Systems
PII Personally identifiable information
PRC People's Republic of China
PVA Passenger Vessel Association
QCEW Quarterly Census of Employment and Wages
RA Regulatory analysis
RO Recognized Organization
Sec. Section
SBA Small Business Administration
SME Subject matter expert
SMS Safety management system
SOLAS the International Convention for Safety of Life at Sea, 1974
TSA Transportation Security Administration
TSI Transportation security incident
UR Unified Requirement
U.S.C. United States Code
VHF Very high frequency
VSA Vessel Security Assessment
VSO Vessel Security Officer
VSP Vessel security plan
II. Executive Summary
The maritime industry faces increasing cybersecurity threats as it
increasingly relies on cyber-connected systems. The purpose of this
final rule is to safeguard the marine transportation system (MTS)
against current and emerging threats associated with cybersecurity by
adding minimum cybersecurity requirements to 33 CFR part 101 to help
detect, respond to, and recover from cybersecurity risks that may cause
transportation security incidents (TSIs). This final rule addresses
risks from the increased interconnectivity and digitalization of the
MTS and current and emerging cybersecurity threats to maritime security
in the MTS with the additional minimum requirements specified below.
First, this final rule requires that owners or operators of U.S.-
flagged vessels, facilities, or Outer Continental Shelf (OCS)
facilities required to have a security plan under 33 CFR parts 104,
105, and 106 to develop and maintain a Cybersecurity Plan and Cyber
Incident Response Plan. The Cybersecurity Plan must include seven
account security measures for owners or operators of a U.S.-flagged
vessel, facility, or OCS facility: (1) enabling of automatic account
lockout after repeated failed log in attempts on all password protected
information technology (IT) systems; (2) changing default passwords (or
implementing other compensating security controls if unfeasible) before
using any IT or operational technology (OT) systems; (3) maintaining a
minimum password strength on all IT and OT systems technically capable
of password protection; (4) implementing multifactor authentication on
password-protected IT and remotely accessible OT systems; (5) applying
the principle of least privilege to administrator or otherwise
privileged accounts on both IT and OT systems; (6) maintaining separate
user credentials on critical IT and OT systems; and (7) removing or
revoking user credentials when a user leaves the organization.
The Cybersecurity Plan also must include four device security
measure requirements: (1) develop and maintain a list of any hardware,
firmware, and software approved by the owner or operator that may be
installed on IT or OT systems; (2) ensure that applications running
executable code are disabled by default on critical IT and OT systems;
(3) maintain an accurate inventory of network-connected systems
including those critical IT and OT systems; and (4) develop and
document the network map and OT device configuration information. In
addition, the Cybersecurity Plan must include two data security measure
requirements: (1) ensure that logs are securely captured, stored, and
protected and accessible only to privileged users, and (2) deploy
effective encryption to maintain confidentiality of sensitive data and
integrity of IT and OT traffic when technically feasible. Owners or
operators of U.S.-flagged vessels, facilities, or OCS facilities must
also prepare and document a Cyber Incident Response Plan that outlines
instructions on how to respond to a cyber incident and identifies key
roles, responsibilities, and decision-makers amongst personnel.
Owners or operators must also designate a Cybersecurity Officer
(CySO) who must ensure that U.S.-flagged vessel, facility, or OCS
facility personnel implement the Cybersecurity Plan and the Cyber
Incident Response Plan. The CySO must also ensure that the
Cybersecurity Plan is up to date and undergoes an annual audit. The
CySO must also arrange for cybersecurity inspections, ensure that
personnel have adequate cybersecurity training, record and report
cybersecurity incidents to the owner or operator, and take steps to
mitigate them.
With this final rule, the Coast Guard finalizes the requirements
that were proposed in the notice of proposed rulemaking (NPRM),
``Cybersecurity in the Marine Transportation System,'' published on
February 22, 2024.\1\ We also respond to the public comments that we
received to the NPRM and make several clarifications regarding the
regulatory framework. The changes we make in this final rule as
compared to the NPRM include the following:
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\1\ 89 FR 13404.
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Applicability
Revised the language in Sec. 101.605 to clarify that
these cyber regulations apply to the owners and operators of U.S.-
flagged vessels, facilities, and OCS facilities required to have
security plans under 33 CFR parts 104, 105, and 106.
Added text to Sec. 101.660 to clarify that Alternative
Security Program (ASP) provisions apply to cybersecurity compliance
documentation.
Definitions
Revised the definition of ``backup'' in Sec. 101.615 to
remove the phrase ``in a secondary location'' and the implication that
backups must be stored ``offsite.''
Amended the definition of ``hazardous condition'' in Sec.
160.202 by incorporating the term ``cyber incident.''
Revised the definition of ``cybersecurity officer'' in
Sec. 101.615 to clarify that the owner or operator must designate a
CySO, but that they also may designate an alternate CySO to assist in
the duties and responsibilities at all times, including at times when
the CySO may be away from the U.S.-flagged vessel, facility, or OCS
facility.
Owner or Operator
Amended Sec. 101.620(b)(7) to clarify that all entities
not subject to 33 CFR 6.16-1 must report all reportable cyber incidents
to the National Response Center (NRC) and amended Sec. 101.650(g)(1)
to clarify that all entities not subject to 33 CFR 6.16-1 report
reportable cyber incidents to the NRC without delay.
Cybersecurity Officer
Removed the term ``major amendment'' from Sec. Sec.
101.625(d)(13) (as well as 101.630(e)(2)) to prevent ambiguity about
which amendments require resubmission of the Cybersecurity Plan and for
consistency with existing requirements in 33 CFR parts 104, 105, and
106.
Revised Sec. 101.625(d)(10), regarding the CySO's
responsibilities in reporting incidents, to refer to reportable cyber
incidents, rather than breaches of security, suspicious activity that
may result in TSIs. Breaches of security and suspicious activity
reporting are already addressed under 33 CFR 101.305, whereas these
regulations are meant to address the reporting of reportable cyber
incidents as defined in this final rule.
Cybersecurity Plan
Added references to OCS Facility Security Plans (FSPs) in
Sec. 101.630(a) to clarify that OCS FSPs follow the same
[[Page 6300]]
requirements as Vessel Security Plans (VSPs) and FSPs.
Revised Sec. 101.630(d) to remove the requirement to
submit a letter certifying that the Cybersecurity Plan meets the
regulatory requirements.
Revised Sec. 101.630(e)(1)(ii) to clarify that the owner
and operator will have at least 60 days to submit its proposed
amendments, and to leave the timeframes for curing any deficiencies up
to the local Captain of the Port (COTP) identifying them rather than
requiring that entities cure any deficiencies within the 60-day period.
Revised Sec. 101.630(e)(2) to add new paragraph (e)(2)(i)
to note that nothing in that section should be construed as limiting
the owner or operator of a U.S.-flagged vessel, facility, or OCS
facility from the timely implementation of such additional security
measures as necessary to address exigent security situations.
Revised Sec. 101.655 to reflect that the Cybersecurity
Plan must also be submitted to the Coast Guard for review and approval
within 24 months of the effective date of this final rule, rather than
during the second annual audit following the effective date.
Drills and Exercises
Revised Sec. 101.635(b)(1) to require two cybersecurity
drills every 12 months instead of requiring at least one cybersecurity
drill every 3 months and added ``as required by 33 CFR 104.230,
105.220, or 106.225,'' where appropriate.
Definitions
Revised Sec. 101.615 to add a definition for the term
``logs'' and revised Sec. 101.650(c)(1) to refer to the term ``logs''
rather than ``data logs,'' consistent with guidance from the National
Institute of Standards and Technology (NIST) and CISA's CPGs.
Revised Sec. 101.615 to change the definition of
Cybersecurity Plan and the reference to Plan submission in Sec.
101.630(a) to clarify that separate submissions are acceptable.
Revised Sec. 101.615 to change the definition of
multifactor authentication from ``a layered approach to securing data
and applications where a system requires users to present a combination
of two or more credentials to verify their identity for login'' to ``a
layered approach to securing data and applications for a system that
requires users to present more than one distinct authentication factor
for successful authentication. Multifactor authentication can be
performed using a multifactor authenticator or by a combination of
authenticators that provide different factors. The three authentication
factors are (1) something you know, (2) something you have, and (3)
something you are.''
Cybersecurity Measures
Revised Sec. 101.650(a)(1) to remove the reference to OT
systems and specified that the requirements in Sec. 101.650(e)(1)(i)
and (iv) are for critical IT and OT systems in accordance with the
Cybersecurity Performance Goals (CPGs) of the Cybersecurity and
Infrastructure Security Agency (CISA).
Revised Sec. 101.650(b) to clarify that each owner or
operator or designated CySO of a U.S.-flagged vessel, facility, or OCS
facility must ensure the device security measures are in place,
addressed in Section 6 of the Cybersecurity Plan, and made available to
the Coast Guard upon request.
Revised Sec. 101.650(c)(2) to specify that effective
encryption must be deployed to maintain confidentiality of sensitive
data and integrity of IT and OT traffic and to require that only
sensitive data be encrypted.
Revised Sec. 101.650(e)(1) to specify that owners and
operators will need to conduct the cyber assessment within 24 months of
the effective date of this final rule, which increases the timeframe
from the originally required 12 months.
Revised Sec. 101.650(e)(1)(i) to limit the identification
of vulnerabilities to only ``critical'' OT and IT systems rather than
all OT and IT systems and revised Sec. 101.650(e)(iv) to remove
``mitigate any unresolved vulnerabilities'' and, instead, require that
the owner or operator ensure patching or implementation of documented
compensating controls for all known exploited vulnerabilities (KEVs) in
critical IT or OT systems, without delay.
Revised Sec. 101.650(e)(2) in this final rule to clarify
that penetration testing must be completed in conjunction with renewing
the Cybersecurity Plan and to specify that the CySO must submit a
letter verifying that the test was conducted, as well as all
vulnerabilities identified from the penetration testing.
Revised Sec. 101.650(f)(2) to remove the references to
``breaches'' and ``incidents'' and replaced them with ``reportable
cyber incidents,'' consistent with the decision to define ``reportable
cyber incident'' and use that term in these regulations. The definition
of ``reportable cyber incident'' being an incident that leads to, or,
if still under investigation, can reasonably lead to substantial loss
of confidentiality, integrity, or availability of a covered information
system, network, or OT system; (2) disruption or significant adverse
impact on the reporting entity's ability to engage in business
operations or deliver goods or services including those that have a
potential for significant impact on public health or safety or may
cause serious injury or death; (3) disclosure or unauthorized access
directly or indirectly of non-public personal information of a
significant number of individuals; (4) other potential operational
disruption to critical infrastructure systems or assets; or (5)
incidents that otherwise may lead to a TSI as defined in 33 CFR
101.105.
Revised Sec. 101.650(f)(2) to remove the references to
``breaches'' and ``incidents'' and replaced them with ``reportable
cyber incidents,'' consistent with the decision to define ``reportable
cyber incident'' and use that term in these regulations. The definition
of ``reportable cyber incident'' being an incident that leads to, or,
if still under investigation, can reasonably lead to substantial loss
of confidentiality, integrity, or availability of a covered information
system, network, or OT system; (2) disruption or significant adverse
impact on the reporting entity's ability to engage in business
operations or deliver goods or services including those that have a
potential for significant impact on public health or safety or may
cause serious injury or death; (3) disclosure or unauthorized access
directly or indirectly of non-public personal information of a
significant number of individuals; (4) other potential operational
disruption to critical infrastructure systems or assets; or (5)
incidents that otherwise may lead to a TSI as defined in 33 CFR
101.105.
Noncompliance, Waivers, and Equivalents
Revised Sec. 101.665 to clarify that an owner or
operator, after completing the required Cybersecurity Assessment, may
seek a waiver or an equivalence determination for the requirements in
subpart F consistent with the waiver and equivalence provisions in 33
CFR parts 104, 105, and 106. A Cybersecurity Assessment is necessary so
that an owner or operated can identify which requirements are
unnecessary. These changes ensure consistency with other regulations
for requesting waiver or equivalence.
Revised Sec. 101.665 to specify that owners or operators
must notify the Coast Guard when they must temporarily deviate from the
requirements rather than when they are temporarily unable to meet the
requirements. This revised text is more consistent with other
regulations regarding temporary waiver.
[[Page 6301]]
Compliance Dates
Table 1 shows the phased implementation schedule for this final
rule. Note that the rule's effective date will be July 16, 2025. In
Section VII of this preamble, we are requesting public comment on a
potential 2-to-5-year delay for the implementation periods for U.S.-
flagged vessels.
[[Page 6302]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.006
The Coast Guard estimates that this final rule creates costs for
industry and Government of approximately $1.2 billion total and $138.7
million annualized, discounted at 2 percent (2022 dollars). This
increased estimate
[[Page 6303]]
from the NPRM is primarily driven by increases to our estimates of
costs related to cybersecurity drills, exercises, and penetration
testing. Cost estimates are also increased due to updated affected
population data. Benefits of this final rule include reduced risk and
mitigation of cyber incidents to protect impacted entities and
downstream economic participants, and improved protection of MTS
business operations to build consumer trust and promote increased
commerce in the U.S. economy. Additional benefits include improved
minimum standards of cybersecurity to protect the MTS, which is vital
to the U.S. economy and U.S. national security, and to avoid supply
chain disruptions.
III. Basis and Purpose
A. Cybersecurity Threats
The purpose of this final rule is to safeguard the MTS against
current and emerging threats associated with cybersecurity by adding
minimum cybersecurity requirements to 33 CFR part 101 to help detect,
respond to, and recover from cybersecurity risks that may cause TSIs.
This final rule addresses current and emerging cybersecurity threats to
maritime security in the MTS. The maritime industry is undergoing a
significant transformation that involves the increased use of cyber-
connected systems. While these increasingly interconnected and
networked systems improve commercial vessel and port facility
operations, they also bring a new set of challenges affecting design,
operations, safety, security, training, and the workforce.
Every day, malicious actors (including, but not limited to,
individuals, groups, and adversary nations posing a threat) attempt
unauthorized access to control system devices or networks using various
communication channels. An example of a successful attempt occurred in
May 2021, when a Russian-based cybercriminal group, DarkSide, conducted
a ransomware attack that forced a major pipeline company to go offline,
resulting in a weeklong shutdown of 5,500 miles of petroleum pipelines
on the East Coast of the United States. Cybersecurity threats require
the maritime community to effectively manage constantly changing risks
to create a safe cyber environment.
This final rule creates a regulatory environment for cybersecurity
in the maritime domain for U.S.-flagged vessels, facilities, and OCS
facilities. Vulnerabilities in the operation of vital systems increase
the risk of cyber-attacks. Unmitigated cyber-related risks to the
maritime domain can compromise the critical infrastructure that people
and companies depend on to fulfill their daily needs and that maintain
the effective operation of the MTS.
A 2018 report by the Council of Economic Advisors (CEA) stated that
``[a] firm with weak cybersecurity imposes negative externalities on
its customers, employees, and other firms, tied to it through
partnerships and supply chain relations. In the presence of
externalities, firms would rationally underinvest in cybersecurity
relative to the socially optimal level. Therefore, it often falls to
regulators to devise a series of penalties and incentives to increase
the level of investment to the desired level.'' \2\
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\2\ Economic Report of the President Together with the Annual
Report of the Council of Economic Advisers 323-24 February 2018,
https://www.govinfo.gov/content/pkg/ERP-2018/pdf/ERP-2018.pdf,
accessed August 12, 2024.
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In the report, the CEA also emphasized that ``[c]ontinued
cooperation between the public and private sectors is the key to
effectively managing cybersecurity risks. . . . The government is
likewise important in incentivizing cyber protection--for example, by
disseminating new cybersecurity standards, sharing best practices,
conducting basic research on cybersecurity, protecting critical
infrastructures, preparing future employees for the cybersecurity
workforce, and enforcing the rule of law in cyberspace.'' \3\
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\3\ Id. at 324-25.
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Furthermore, the CEA acknowledged that ``[f]irms and private
individuals are often outmatched by sophisticated cyber adversaries.
Even large firms with substantial resources committed to cybersecurity
may be helpless against attacks by sophisticated nation-states.'' \4\
As an example, the CEA stated, ``firms that own critical infrastructure
assets, such as parts of the nation's power grid, may generate
pervasive negative spillover effects for the wider economy.'' \5\
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\4\ Id. at 326
\5\ Id.
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Lastly, the CEA stated another problem that exists in the
marketplace is, ``firms' reluctance to share information on cyber
threats and exposures,'' which ``impairs effective cybersecurity.'' \6\
The CEA further stated that ``firms remain reluctant to increase their
exposure to legal and public affairs risks. The lack of information on
cyber-attacks and data breaches suffered by other firms may cause less
sophisticated small firms to conclude that cybersecurity risk is not a
pressing problem. . . . [T]he lack of data may be stymying the ability
of law enforcement and other actors to respond quickly and effectively
and may be slowing the development of the cyber insurance market.'' \7\
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\6\ Id.
\7\ Id.
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This final rule applies to the owners and operators of U.S.-flagged
vessels required to have a security plan under 33 CFR part 104
(Maritime Security: Vessels), facilities required to have a security
plan under 33 CFR part 105 (Maritime Security: Facilities), and OCS
facilities required to have a security plan under 33 CFR part 106
(Marine Security: Outer Continental Shelf (OCS) Facilities).
B. Legislation, Regulations, and Policy
In the Maritime Transportation Security Act of 2002 (MTSA),\8\
Congress provided a framework for the Secretary of Homeland Security
(``Secretary''), acting through the Coast Guard,\9\ and maritime
industry to identify, assess, and prevent TSIs in the MTS. MTSA vested
the Secretary with authorities for broad security assessment, planning,
prevention, and response activities to address TSIs, including the
authority to require and set standards for FSPs, OCS FSPs, and VSPs, to
review and approve such plans, and to conduct inspections and take
enforcement actions.\10\ The Coast Guard's implementing regulations
address a range of considerations to prevent TSIs to the maximum extent
practicable \11\ and require, among other general and specific
measures, security assessments and measures related to radio and
telecommunication systems, including computer systems and networks.\12\
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\8\ Pub. L. 107-295, 116 Stat. 2064, November 25, 2002.
\9\ The Secretary delegated this authority to the Commandant of
the Coast Guard via Department of Homeland Security (DHS) Delegation
00170.1(II)(97)(b), Revision No. 01.4.
\10\ See generally, for example, 46 U.S.C. 70103.
\11\ See 46 U.S.C. 70103(c)(1).
\12\ See, for example, 33 CFR 104.300(d)(11), 104.305(d)(2)(v),
105.300(d)(11), 105.305(c)(1)(v), 106.300(d)(11), 106.305(c)(1)(v)
and (d)(2)(v).
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The Coast Guard has also issued additional guidance and policies to
help regulated entities address potential cyber incidents in FSPs, OCS
FSPs, and VSPs,\13\ including a cybersecurity risk
[[Page 6304]]
assessment model that was issued in January 2023,\14\ and voluntary
guidance issued to Area Maritime Security Committees (AMSCs) in July
2023.\15\ Congress has repeatedly reaffirmed the MTSA framework,
including through amendments passed in 2016,\16\ 2018,\17\ and
2021.\18\ In the 2018 amendments, Congress amended MTSA to specifically
require VSPs, FSPs, and OCS FSPs to include provisions for detecting,
responding to, and recovering from cybersecurity risks that may cause
TSIs.\19\ By doing so, Congress explicitly identified cybersecurity
risk as an area of specific concern in the maritime domain that
deserved focused governmental regulatory effort. These regulations fall
squarely within the MTSA authorities that Congress expressly expanded
to address cybersecurity risk. The regulatory amendments to 33 CFR part
101 reflect the Coast Guard's view on cybersecurity under MTSA,
including, but not limited to, recent amendments to MTSA (such as 46
U.S.C. 70103). The amendments provide more detailed mandatory baseline
requirements for U.S.-flagged vessels and facilities subject to MTSA.
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\13\ One of the Coast Guard's guidance documents is the
Navigation and Vessel Inspection Circular (NVIC) 01-20, Guidelines
for Addressing Cyber Risks at Maritime Transportation Security Act
Regulated Facilities (85 FR 16108). This NVIC outlined Coast Guard's
view on requirements for FSPs and facility security, including
cybersecurity. A similar understanding with regard to VSPs was
expressed in the Coast Guard's Office of Commercial Vessel
Compliance's (CG-CVC) Vessel CRM Work Instruction CVC-WI-027(3),
Vessel Cyber Risk Management Work Instruction, October 11, 2023,
https://www.dco.uscg.mil/Portals/9/DCO%20Documents/5p/CG-5PC/CG-CVC/CVC_MMS/CVC-WI-27(3)b.pdf, accessed January 6, 2025.
\14\ See Maritime Cybersecurity Assessment and Annex Guide
(MCAAG) (January 2023), https://dco.uscg.mil/Portals/9/CG-FAC/Documents/Maritime%20Cyber%20Assessment%20%20Annex%20Guide%20(MCAAG)_released%2
023JAN2023.pdf, accessed Aug. 12, 2024. The MCAAG was developed in
coordination with the National Maritime Security Advisory Committee
(NMSAC), AMSCs, and other maritime stakeholders. The guide serves as
a resource for baseline Cybersecurity Assessments and Plan
development and helps stakeholders address vulnerabilities that can
lead to transportation security incidents.
\15\ NVIC 09-02, Change 6.
\16\ Pub. L. 114-120, 130 Stat. 27, February 8, 2016.
\17\ Pub. L. 115-254, 132 Stat. 3186, October 5, 2018.
\18\ Pub. L. 116-283, 134 Stat 4754, January 1, 2021.
\19\ See Pub. L. 115-254, sec. 1805(d)(2) (codified at 46 U.S.C.
70103(c)(3)(C)).
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In response to the growing national security threat from malicious
cyber actions, presidential policy over the last three presidential
administrations has advanced cybersecurity in the maritime domain.
Executive Order 13636 of February 12, 2013 (Improving Critical
Infrastructure Cybersecurity) recognized the Federal Government's role
to secure our nation's critical infrastructure by working with the
private sector--including owners and operators of U.S.-flagged vessels,
facilities, and OCS facilities--to prepare for, prevent, mitigate, and
respond to cybersecurity threats.\20\
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\20\ 78 FR 11739, February 19, 2013.
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To defend against malicious cyber-related activities, Executive
Order 13694 of April 1, 2015 (Blocking the Property of Certain Persons
Engaging in Significant Malicious Cyber-Enabled Activities) recognized
malicious cyber-related activities as an ``extraordinary threat to the
national security, foreign policy, and economy of the United States,''
warranting a national emergency.\21\ The National Emergency with
Respect to Significant Malicious Cyber-Enabled Activities was extended
on March 26, 2024.\22\
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\21\ 80 FR 18077, April 2, 2015. Executive Order 13694 was later
amended by Executive Order 13757 (82 FR 1, January 3, 2017), which
outlined additional measures the Federal Government must take to
address the national emergency identified in Executive Order 13694.
\22\ 89 FR 21427, March 27, 2024.
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Executive Order 14028 of May 12, 2021 (Improving the Nation's
Cybersecurity) also recognized that ``the private sector must adapt to
the continuously changing threat environment, ensure its products are
built and operate securely, and partner with the Federal Government to
foster a more secure cyberspace.'' \23\
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\23\ 86 FR 26633, May 17, 2021.
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On July 28, 2021, the President issued the ``National Security
Memorandum on Improving Cybersecurity for Critical Infrastructure
Control Systems,'' \24\ which required the Secretary of Homeland
Security to coordinate with the Secretary of Commerce (through the
Director of NIST) and other agencies, as appropriate, to develop
baseline CPGs. These baseline CPGs will further a common understanding
of the baseline security practices that critical infrastructure owners
and operators should follow to protect national and economic security,
as well as public health and safety. CISA's release of the CPGs in
October 2022 was ``intended to help establish a common set of
fundamental cybersecurity practices for critical infrastructure, and
especially help small- and medium-sized organizations kickstart their
cybersecurity efforts.'' \25\ The Coast Guard relied on CISA's CPGs as
a benchmark for technical requirements in this final rule.
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\24\ The White House, National Security Memorandum on Improving
Cybersecurity for Critical Infrastructure Control Systems, July 28,
2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/28/national-security-memorandum-on-improving-cybersecurity-for-critical-infrastructure-control-systems/, accessed on July 24,
2023.
\25\ CISA, ``Cross-Sector Cybersecurity Performance Goals,''
https://www.cisa.gov/cross-sector-cybersecurity-performance-goals,
accessed August 12, 2024.
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On February 21, 2024, the President signed Executive Order 14116
(Amending Regulations Relating to the Safeguarding of Vessels, Harbors,
Ports, and Waterfront Facilities of the United States), amending 33 CFR
part 6 regulations, which are issued pursuant to 46 U.S.C. 70051.\26\
In that Order, the President found that ``the security of the United
States is endangered by reasons of disturbance in the international
relations of the United States that exist as a result of persistent and
increasingly sophisticated malicious cyber campaigns against the United
States, and that such disturbances continue to endanger such
relations.''
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\26\ 89 FR 13971, February 26, 2024.
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The Executive Order expanded the regulatory authorities of the
Coast Guard COTP, a designated officer of the Coast Guard, to address,
inspect, and search vessels when there is an articulable cybersecurity
threat; take possession and control of vessels within the territorial
waters of the United States; and prevent access of things (including
data, information, network, program, system, or other digital
infrastructure) to vessels or waterfront facilities whenever it appears
that such actions are necessary to prevent damage or injury, including
damage to any data, information, network, program, system, or other
digital infrastructure on such vessel, or to any vessel, waterfront
facility, or the waters of the United States.\27\ Furthermore, the
Commandant's authority was extended to prescribe conditions and
restrictions relating to waterfront facilities and vessels in port,
specifically to ``prevent, detect, assess, and remediate an actual or
threatened cyber incident.'' \28\ The Commandant exercised this
authority in a February 21, 2024 Maritime Security (MARSEC)
Directive.\29\
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\27\ 33 CFR 6.04-5, 6.04-7, and 6.04-8.
\28\ 33 CFR 6.14-1.
\29\ Issuance of Maritime Security (MARSEC) Directive 105-4:
Cyber Risk Management for Ship-to-Shore Cranes Manufactured by
People's Republic of China Companies, 89 FR 13726, Feb. 23, 2024.
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The Executive Order also amended the reporting requirement in 33
CFR part 6 to add CISA and to also require the reporting of actual or
threatened cyber incidents. The amended 33 CFR 6.16-1 now requires the
reporting of ``evidence of sabotage, subversive activity, or an actual
or threatened cyber incident[s] involving or endangering any vessel,
harbor, port, or waterfront facility'' to the Federal Bureau of
Investigation (FBI), CISA, and the COTP or their respective
representatives.\30\
[[Page 6305]]
OCS facilities are not required to report under Part 6.
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\30\ 89 FR 13971, 13973, February 26, 2024.
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In 2021, the Coast Guard published its Cyber Strategic Outlook
(CGCSO) to highlight the importance of managing cybersecurity risks in
the MTS.\31\ The CGCSO highlighted three lines of effort, or
priorities, to improve Coast Guard readiness in cyberspace: (1) Defend
and Operate the Coast Guard Enterprise Mission Platform; (2) Protect
the MTS; and (3) Operate in and through Cyberspace.\32\ As outlined in
the CGCSO's second line of effort, ``Protect the MTS,'' the Coast Guard
has implemented a risk-based regulatory, compliance, and assessment
regime. We have established minimum requirements for Cybersecurity
Plans that facilitate the use of international and industry-recognized
cybersecurity standards to manage cybersecurity risks by owners and
operators of maritime critical infrastructure.\33\ Specifically, this
final rule promulgates the Coast Guard's baseline cybersecurity
regulations for U.S.-flagged vessels and facilities (including OCS
facilities) subject to MTSA.
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\31\ U.S. Coast Guard, ``Cyber Strategic Outlook,'' August 2021,
https://www.uscg.mil/Portals/0/Images/cyber/2021-Cyber-Strategic-Outlook.pdf, accessed August 13, 2024.
\32\ These lines of effort evolved from the three ``strategic
priorities'' introduced in the Coast Guard's Cyber Strategy, June
2015. As cyber threats and vulnerabilities evolve, so will the Coast
Guard's posture. https://www.dco.uscg.mil/Portals/10/Cyber/Docs/CG_Cyber_Strategy.pdf?ver=nejX4g9gQdBG29cX1HwFdA%3D%3D, accessed
August 12, 2024.
\33\ The Coast Guard is aware that some entities already follow
industry standards related to cybersecurity. The minimum
requirements seek to establish a common baseline for all the
regulated vessels, facilities, and OCS facilities that is not
incompatible with such standards, recognizing that in some instances
these minimums may increase a requirement, but in other
circumstances may already be satisfied. The owner or operator can
indicate within their Cybersecurity Plan that they are following a
particular standard and highlight how their compliance with that
standard satisfies Coast Guard requirements.
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As noted, in January 2023, the Coast Guard released the Maritime
Cybersecurity Assessment and Annex Guide (MCAAG). The MCAAG was
developed through coordination with the National Maritime Security
Advisory Committee (NMSAC), AMSCs, and other maritime stakeholders,
consistent with the activities described in section 2(e) of the
National Institute of Standards and Technology Act (specifically, 15
U.S.C. 272(e)). The MCAAG provides more detailed recommendations on
implementing existing MTSA regulations as they relate to computer
systems and networks. For example, the Coast Guard recommended a Cyber
Annex Template for stakeholders to address possible cybersecurity
vulnerabilities and risks.
This final rule expands and clarifies the information required in
security plans to remain consistent with 46 U.S.C. 70103(c)(3),
including section 70103(c)(3)(C)(v), which requires FSPs, OCS FSPs, and
VSPs to include provisions for detecting, responding to, and recovering
from cybersecurity risks that may cause TSIs. Some terms we use in the
MCAAG, such as cybersecurity vulnerability, may have a set definition
in this final rule.
C. Legal Authority
The Coast Guard is promulgating these regulations under 43 U.S.C.
1333(d); 46 U.S.C. 3306, 3703, 70102 through 70104, 70124; and the
Department of Homeland Security (DHS) Delegation No. 00170.1, Revision
No. 01.4.
Section 4 of the Outer Continental Shelf Lands Act of 1953 (OCSLA),
classified as amended at 43 U.S.C. 1333(d), authorizes the Secretary to
promulgate regulations with respect to lights and other warning
devices, safety equipment, and other matters relating to the promotion
of safety of life and property on the artificial islands,
installations, and other devices on the OCS thereto. This authority was
delegated to the Coast Guard by DHS Delegation No. 00170.1(II)(90),
Revision No. 01.4.
Section 3306 of Title 46 of the United States Code authorizes the
Secretary to prescribe necessary regulations for the design,
construction, alteration, repair, equipping, manning and operation of
vessels, propulsion machinery, auxiliary machinery, boilers, unfired
pressure vessels, piping, electric installations, and accommodations
for passengers and crew. This authority was delegated to the Coast
Guard by DHS Delegation No. 00170.1(II)(92)(b), Revision No. 01.4.
Section 3703 of Title 46 of the United States Code authorizes the
Secretary to prescribe similar regulations relating to tank vessels
that carry liquid bulk dangerous cargoes, including the design,
construction, alteration, repair, maintenance, operation, equipping,
personnel qualification, and manning of the vessels. This authority was
delegated to the Coast Guard by DHS Delegation No. 00170.1(II)(92)(b),
Revision No. 01.4.
Sections 70102 through 70104 of Title 46 of the United States Code
authorize the Secretary to evaluate for compliance vessel and facility
vulnerability assessments, security plans, and response plans, which
must address cybersecurity risks. Section 70124 authorizes the
Secretary to promulgate regulations to implement Chapter 701, including
sections 70102 through 70104, dealing with vulnerability assessments
for the security of vessels and facilities (which include OCS
facilities); security plans for vessels, facilities, and OCS
facilities; and response plans for vessels, facilities, and OCS
facilities. These authorities were delegated to the Coast Guard by DHS
Delegation No. 00170.1(II)(97)(a) through (c), and (n), Revision No.
01.4.
IV. Background
A. The Current State of Cybersecurity in the MTS
The maritime industry is relying increasingly on digital solutions
for operational optimization, cost savings, safety improvements, and
more sustainable business. These developments, to a large extent, rely
on IT systems and OT systems, which also increases potential cyber
vulnerabilities and risks. Cybersecurity risks result from
vulnerabilities to vital systems that increase the likelihood of cyber-
attacks on U.S.-flagged vessels, facilities, and OCS facilities.
Cyber-attacks on critical infrastructure across multiple sectors
have raised awareness of the need to protect the systems and equipment
that facilitate operations within the MTS because cyber-attacks have
the potential to disable the IT and OT on board U.S.-flagged vessels,
facilities, and OCS facilities. Autonomous vessel technology, automated
OT, and remotely operated machines provide further opportunities for
cyber-attackers. These systems and equipment are prime targets for
cyber-attacks stemming from insider threats, criminal organizations,
nation state actors, and others.
Also, the MTS has become increasingly susceptible to cyber-attacks
due to the growing integration of digital technologies in their
operations. These types of cyber-attacks can range from altering a
vessel's navigational systems to disrupting its communication with
ports, which can lead to delays, accidents, or even potential
groundings that can potentially disrupt vessel movements and shut down
port operations, such as loading and unloading cargo. This disruption
can also negatively affect the MTS by interrupting the transportation
and commerce of goods, raw resources, and passengers, as well as
potential military operations when needed.
An attack that compromises navigational or operational systems can
pose a serious safety risk. It can result in accidents at sea,
potential environmental disasters like oil spills,
[[Page 6306]]
and loss of life. The maritime industry is not immune to ransomware
attacks where cybercriminals are targeting critical systems or data.
Given the critical nature of marine transportation to global trade,
continued efforts are being made to improve cybersecurity measures in
the sector.
Maritime stakeholders can better detect, respond to, and recover
from cybersecurity risks that may cause TSIs by adopting a range of
cyber risk management (CRM) measures, as described in this final rule.
It is important that the Coast Guard work with the maritime community
to address both safety and security risks to better facilitate
operations and to protect MTS entities from creating hazardous
conditions within ports and waterways. Updating regulations to include
minimum cybersecurity requirements will strengthen the security posture
and increase resilience against cybersecurity threats in the MTS.
In 2017, the International Maritime Organization (IMO) took steps
to address cybersecurity risks in the shipping industry by publishing
the Marine Safety Committee/Facilitation Committee (MSC-FAL) Circular
3, Guidelines on Maritime Cyber Risk Management,\34\ and MSC Resolution
428(98).\35\ The IMO affirmed that an approved Safety Management System
(SMS) should involve CRM to manage cybersecurity risks in accordance
with the objectives and functional requirements of the International
Safety Management (ISM) Code. An SMS is a structured and documented set
of procedures enabling company and vessel personnel to effectively
implement safety and environmental protection policies that are
specific to that company or vessel.
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\34\ https://wwwcdn.imo.org/localresources/en/OurWork/Facilitation/Facilitation/MSC-FAL.1-Circ.3-Rev.1%20-%20Guidelines%20On%20Maritime%20Cyber%20Risk%20Management%20(Secretar
iat).pdf, accessed August 13, 2024.
\35\ See the IMO resolution on CRM: Resolution MSC.428(98),
Annex 10, ``Maritime Cyber Risk Management in Safety Management
Systems.'' https://wwwcdn.imo.org/localresources/en/OurWork/Security/Documents/Resolution%20MSC.428(98).pdf, accessed August 13,
2024.
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For applicable U.S.-flagged vessels, this final rule establishes a
baseline level of protection throughout the MTSA-regulated vessel
fleet. Having regulatory oversight over U.S.-flagged vessels, the Coast
Guard can ensure these cybersecurity regulations are implemented
appropriately by approving Cybersecurity Plans and conducting routine
inspections. As discussed in Section VII of this preamble, the Coast
Guard requests public comment on a potential 2-to-5-year delay for the
implementation periods for U.S.-flagged vessels. (See the ADDRESSES
portion of this preamble, under Comment period for solicited additional
comments, for instructions on submitting comments.) This final rule
also applies to facilities regulated by 33 CFR part 105 and OCS
facilities regulated by 33 CFR part 106.
B. Current MTSA Regulations Related to Cybersecurity
The MTSA-implementing regulations in 33 CFR parts 101, 103, 104,
105, and 106 give the Coast Guard the authority to review and approve
security assessments and plans that apply broadly to the various
security threats facing the maritime industry. Through the Navigation
and Vessel Inspection Circular (NVIC) 01-20 \36\ (85 FR 16108, March
20, 2020), the Coast Guard interpreted 33 CFR parts 105 and 106 as
requiring owners and operators of facilities and OCS facilities to
address cybersecurity in their Facility Security Assessments (FSAs) and
OCS FSAs, as well as in their FSPs and OCS FSPs. The NVIC provides non-
binding guidance on how regulated entities can address these issues.
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\36\ See footnote 13.
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This final rule also expands upon the agency's previous actions by
establishing minimum performance-based cybersecurity requirements for
the MTS within the MTSA regulations. Similar to the existing
requirements in 33 CFR parts 104, 105, and 106, the Coast Guard allows
owners and operators the flexibility to determine the best way to
implement and comply with these new requirements. Following the
effective date of this final rule, personnel must complete certain
training requirements within approximately 6 months, and owners or
operators must sequentially complete a Cybersecurity Assessment and
submit the Cybersecurity Plan to the Coast Guard for review and
approval within 24 months. The Cybersecurity Plan also includes
designating the CySO. These implementation periods allow sufficient
time for the owners and operators of applicable U.S.-flagged vessels,
facilities, and OCS facilities to comply with the requirements of this
final rule.\37\
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\37\ Existing general requirements to address cyber issues in
security plans will continue to apply during this rulemaking.
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V. Discussion of Comments and Changes
In response to the NPRM we published on February 22, 2024,\38\ we
received 99 written submissions to our docket. These written
submissions are available in the public docket for this rulemaking,
where indicated under the ADDRESSES portion of the preamble, or use the
direct link www.regulations.gov/docket/USCG-2022-0802. The Coast Guard
appreciates the comments from the public, as these insights continue to
inform Coast Guard actions and programs. Below, we summarize the
comments and our responses.
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\38\ 89 FR 13404.
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Extension of Comment Period and Public Meetings
The Coast Guard received a number of comments about extending the
initial comment period of 60 days for additional time to review the
proposed rule and the impacts. The requests asked for additional time
ranging from 30 to 90 days, with 30 days being the most common request.
After considering these comments, we extended the comment period by 30
days through May 22, 2024.\39\ The Coast Guard determined that the
extended comment period offered sufficient opportunity for industry
stakeholders, and the general public to express their feedback on the
NPRM.
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\39\ 89 FR 24751.
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One commenter requested that we hold a public hearing during which
they could ask us questions and receive further information before
submitting a public comment on the NPRM. The Coast Guard did not grant
this request. Any public meeting that we held would include a
presentation about the contents of the NPRM and an opportunity for
members of the public to submit oral comments, but it is unlikely that
we would have been able to share information materially different than
the information that was already provided in the published NPRM.
One commenter requested that the Coast Guard hold a series of
``industry days'' focused on specific threats to the maritime
stakeholders.
This comment was received on May 22, 2024, the day the extended
comment period closed, which did not allow time to consider this
request or hold a public meeting or series of ``industry days'' before
the end of the comment period. Additionally, we had already extended
the comment period to allow for more time for industry to submit
comments about specific impacts to the maritime industry. We received
many comments during that period and have carefully considered them in
developing this final rule.
[[Page 6307]]
A. General Comments
Several commenters submitted positive comments. Commenters
commended us for strengthening cybersecurity and noted that the rule is
needed, is very important for the marine transportation system, and is
a ``great idea.'' One commenter supported our inclusion of specific
proposals regarding device security measures in Sec. 101.650(b).
Another commenter supported requirements for vulnerability scanning and
penetration testing. One commenter noted that the increasing
interconnectivity of ports expands the attack surface and
vulnerabilities exploitable by cyber actors.
The Coast Guard agrees with the commenter. We are finalizing this
regulation to help mitigate these risks.
Out of Scope Comments
We received several comments that were out of scope for this
rulemaking. One commenter expressed concern about the ship-to-shore
cranes manufactured in the People's Republic of China (PRC).
Specific language to address PRC-manufactured cranes is outside the
scope of this regulation, which establishes general, baseline
cybersecurity requirements for regulated entities.
Another commenter asked for a list of crane manufacturers or
providers impacted by MARSEC Directive 105-4 related to the PRC-
manufactured cranes.
The Coast Guard announced the availability of MARSEC Directive 105-
4 on February 23, 2024, which provided actions for owners or operators
of ship-to-shore cranes manufactured by the PRC to manage cybersecurity
risks (89 FR 13726). This MARSEC Directive was announced at the same
time as the NPRM for this final rule, but its requirements are
separate. Interested parties should refer to the notice of availability
for MARSEC Directive 105-4.\40\
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\40\ 89 FR 13726, February 23, 2024.
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One commenter noted that CPGs specific to the maritime subsector
should be prioritized. The commenter also inquired about how feasible
it was to incorporate risk-based assessment processes into the MST
[Marine Science Technician] ``A'' School curriculum.
The Coast Guard is not currently working on sector-specific CPGs.
Entities are welcome to use their preferred references and standards to
help inform their required Assessments and Plans. ``A'' school
curricula are outside the scope of this regulation.
Formalizing Training
One commenter stated that the Coast Guard needs to consider
continuously monitoring OT devices and asked the Coast Guard to
formalize training, leverage industry best practices to apply to
maritime operations, and implement a ``Bug Bounty'' program like that
of the Department of Defense (DoD).\41\
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\41\ A ``Bug Bounty'' program is an initiative that rewards
individuals for reporting bugs and vulnerabilities in software.
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The commenter did not give additional information or a reason why
the Coast Guard should formalize the training. While formal training
can be beneficial, the Coast Guard will not mandate a specific training
format. It is up to the owners and operators of U.S.-flagged vessels,
facilities, and OCS facilities to assess the necessary level of
training based on their unique cyber threats and risks.
This final rule provides minimum baseline standards. Owners and
operators are welcome to implement additional cybersecurity measures if
they wish, including leveraging industry best practices, continuous
monitoring of OT devices, and establishing processes for vulnerability
notification such as the ``Bug Bounty'' program. However, these
additional measures are not required by this final rule.
Identity Protection and Authentication
Another commenter applauded the inclusion of identity protection
and authentication practices, and noted that some current practices,
such as ``bring your own device'' and ``work from anywhere'' models,
increase the risks of relying on traditional authentication methods and
further weaken obsolescent legacy security technologies.
The Coast Guard agrees that the rule's provisions appropriately
address current cybersecurity risks.
Automated Technologies
One commenter advised caution regarding ``unchecked reliance'' on
automated technologies and processes in the maritime industry. The
commenter also noted the lack of Federal regulations for ``smart''
containers. Another commenter recommended that the Coast Guard's
cybersecurity regulations should require private stakeholders to
collaborate with DHS to ensure national security and protect American
dockworkers from cyber-attacks and risks from automated technologies.
These comments fall outside the scope of the regulations, as our
intent is not to address specific issues associated with ``smart''
containers in particular. This final rule focuses on cybersecurity
threats and risks that may impact OT and IT systems on board vessels
and at facilities.
One commenter noted that some ports and ships are becoming
``smart'' with use of artificial intelligence, algorithms, and other IT
solutions. The commenter argued that the proposed regulations fell
short of addressing the cybersecurity risks of more sophisticated
systems by only providing minimum baseline requirements.
These regulations provide minimum baseline requirements that allow
each owner or operator to customize the Cybersecurity Plan to the needs
of their organization. We expect that organizations with more
sophisticated systems, such as those described by the commenter, will
use the Cybersecurity Assessment to identify their specific
cybersecurity needs, which will then be accounted for in the Plan. The
structure of this final rule provides each owner or operator the
flexibility to customize their Plan based on their own needs and also
to add other requirements they deem appropriate for their organization.
Additional Inspections
One commenter recommended that any vessel that visits an
``adversarial controlled shipyard'' for maintenance or repair should
necessitate thorough inspections following the maintenance.
This is outside the scope of this rulemaking. We did not propose
any requirements for such inspections and do not have any plans to
pursue them at this time.
Rulemaking Process
One commenter suggested that issuing an advance notice of proposed
rulemaking (ANPRM) first would have improved the process for crafting
these regulations.
The Coast Guard considered an ANPRM, but ultimately decided that it
was not necessary for this rulemaking project. We received robust
comments on the NPRM that provided useful input on the cybersecurity
regulations we proposed and that we have carefully considered in
developing this final rule.
Several commenters stated that the Coast Guard did not engage with
industry stakeholders before the release of the NPRM.
While we did not engage with industry on the NPRM specifically
prior to its release, the Coast Guard regularly engages with MTS
industry and other stakeholders on cyber and other risks at Government
agency- or industry-hosted conferences and workshops, and other forums.
In these engagements, we
[[Page 6308]]
discuss the Coast Guard's current cyber posture in terms of vessel and
facility compliance with MTSA. Cybersecurity presents challenging
problems, along with a need to address them promptly to implement
critical cybersecurity measures.
Port Security Grant Program
Some commenters requested that the Port Security Grant Program
account for, or even give prioritization to, smaller facilities to
address cybersecurity concerns.
The Coast Guard will seek to work with the Federal Emergency
Management Agency (FEMA) to further highlight cybersecurity through the
FEMA-administered Port Security Grant Program. Because we do not manage
that program, we cannot make any representation about future
prioritization of grant funds. As noted in FEMA's Fiscal Year 2024
Notice of Funding Opportunity for this program, all entities subject to
an Area Maritime Transportation Security Plan, as defined by 46 U.S.C.
70103(b), may apply for program funding.\42\ Eligible applicants
include but are not limited to port authorities, facility operators,
and State, local, and territorial government agencies.\43\ FEMA
identified enhancing cybersecurity as a key priority for Fiscal Year
2024.\44\
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\42\ See FEMA, ``The U.S. Department of Homeland Security (DHS)
Notice of Funding Opportunity (NOFO) Fiscal Year 2024 Port Security
Grant Program,'' April 16, 2024, https://www.fema.gov/print/pdf/node/676012, accessed October 23, 2024.
\43\ Id. at 14.
\44\ Id. at 6.
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Coast Guard Experience With Enforcing Cybersecurity
Some commenters stated that they did not feel that the Coast Guard
had the expertise to enforce these regulations or to conduct
cybersecurity inspections. They also stated that the nature of
personnel rotations among active-duty military meant that members would
constantly require training, and the Coast Guard could not retain the
expertise necessary to review and approve the Cybersecurity Plans. Some
also felt that reviews of the Cybersecurity Plan should be held in a
centralized location, due to the COTP not having enough cybersecurity
expertise.
The Coast Guard maintains a diverse workforce of military and
civilian personnel to balance the need to maintain institutional
knowledge while keeping the ability to flexibly assign personnel to a
wide range of billets and locations. Whether it is knowledge of
commercial vessel safety regulations, hazardous materials regulations,
or these new cybersecurity regulations, the Coast Guard will ensure
adequately trained personnel will be available to enforce these
regulations, including through reviewing Cybersecurity Plans. Although
this final rule addresses training requirements for regulated entities
and not Coast Guard personnel, the Coast Guard will ensure appropriate,
adequate training is available for the personnel conducting associated
work and missions. Additionally, the Coast Guard recognizes the comment
regarding centralized reviews of the Cybersecurity Plans. The Coast
Guard has not yet identified where ownership of initial and subsequent
review of Cybersecurity Plans will reside, but will determine that upon
assessing the process that optimizes resources and expertise. Whatever
the Coast Guard determines, it will not alter the requirements for
developing and submitting such Plans.
In addition, the Coast Guard has significant experience with the
maritime security of vessels, facilities, and OCS facilities. We have
specific cybersecurity units and capabilities dedicated to identifying
threats and risks and to protecting the cybersecurity of the United
States. We work in partnership with the DoD and other DHS components,
specifically CISA and the Transportation Security Administration (TSA).
We are confident that, by leveraging this experience and these
partnerships, along with additional training, we can enforce the
requirements in this final rule.
Some commenters asked if the Coast Guard planned to allow
Recognized Organizations (ROs) to assist with reviewing Cybersecurity
Plans.
The Coast Guard currently does not plan to allow ROs to assist with
reviewing Cybersecurity Plans, but regulated entities may consult with
ROs to ensure compliance with this final rule if they choose.
B. Comments Related to the Applicability of This Final Rule
One commenter asked us to clearly define the scope of the Coast
Guard's jurisdictional authority to regulate cybersecurity as it
applies to marine infrastructure.
As discussed in the legal authority section, the Coast Guard has
statutory authority under MTSA, as amended and codified at 46 U.S.C.
chapter 701, to regulate cybersecurity in the MTS. As already long-
established by the existing regulations in 33 CFR subchapter H, MTSA is
applicable to the vessels, facilities, and OCS facilities that are
subject to this final rule. The authority to regulate ``cybersecurity
risk'' was specifically added to MTSA by the Maritime Security
Improvement Act of 2018.\45\
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\45\ Pub. L. 115-254, Div. J.
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One commenter explained that some ports oversee airports under
their jurisdiction and thus, have dual cybersecurity requirements with
the Federal Aviation Administration (FAA). The commenter sought
clarification that new requirements, including incident reporting
requirements, would not apply to systems that are under the port
authority's charge but that are unrelated to maritime port activities.
The commenter expressed concern that, if the Coast Guard rule were to
apply to all systems under a port authority's charge, many ports would
have dual reporting requirements for the same incidents--a significant
inefficiency.
This final rule is applicable to those facilities currently
regulated under existing MTSA regulations. By and large, airport
facilities are not regulated under this rule. If a situation arose
where a MTSA-regulated entity was potentially subject to conflicting
requirements from the Federal Aviation Administration--or any other
agency's requirements--the entity should raise the issue of any
perceived conflicts with the COTP and that agency's respective point of
contact so that each agency is aware of the concern and can evaluate if
there are conflicts for compliance. With respect to incident reporting,
if there are occurrences where a cybersecurity incident affects systems
or equipment falling under multiple regulatory jurisdictions, an owner
or operator will have to ensure all reporting requirements are met. And
with respect to the rule in general, if appropriate, the Coast Guard,
acting through the COTP, may recommend the entity consider a request
for equivalence in order to avoid overlapping requirements.
Some commenters stated that the United States should not impose
specific requirements for the flag state on its vessels without
imposing the same on foreign-flagged vessels. One commenter also
suggested that U.S.-flagged vessels should be subject to requirements
no greater than those applied to foreign-flagged vessels with a safety
management system. The commenter asserted that, once the IMO
establishes international requirements, a new NPRM should be issued to
implement these requirements for U.S.-flagged vessels. Other commenters
said the United States should not impose requirements that deviate from
international standards, including those
[[Page 6309]]
that are presently being negotiated at the IMO.
The Coast Guard believes that protecting U.S. national security and
the nation's sovereign interests is a paramount concern. As the flag
administration, the United States believes that these baseline
requirements for U.S.-flagged vessels are important preventive
measures. Not only will establishing these requirements help protect
the U.S. commercial fleet from cybersecurity threats, but it will also
further establish the United States as a leader in this space and
offers a model for the necessary actions that other flag
administrations should take with respect to the cybersecurity of
vessels.
The Coast Guard acknowledges that this final rule adds new
requirements on U.S.-flagged vessels. However, the Coast Guard believes
that proactive cybersecurity regulations are essential for ensuring the
continued safety, security, and resilience of the domestic MTS.
Consistent with this approach, the United States is actively engaged in
international efforts to address maritime cybersecurity at the IMO. The
Coast Guard believes that extending regulations to foreign-flagged
vessels at this time while these discussions are ongoing would disrupt
the established processes for port state control and possibly
jeopardize U.S. national interests. The Coast Guard may consider
revising this rule at a later date as the threat environment and
international standards develop, including after the IMO speaks to
cybersecurity with additional specificity.
Multiple commenters requested clarification on how these
regulations apply to existing U.S.-flagged vessels, facilities, and OCS
facilities, and stated that it could be difficult for existing vessels
to meet some requirements. Specifically, concerns were raised about the
inability to implement data encryption, the feasibility of compliance
with network segmentation, frequent operator changes, difficulty in
identifying personnel to fill a specialized position, and the presence
of minimal computer networks and electronic systems. One commenter
stated that vessels operating exclusively on inland waters, such as
barges and towing vessels, have a minimal cyber footprint and should be
excluded from this rulemaking.
This final rule is applicable to U.S.-flagged vessels, facilities,
and OCS facilities, and includes both existing U.S.-flagged vessels,
facilities, and OCS facilities, as well as any new or future U.S.-
flagged vessels, facilities, and OCS facilities. The Coast Guard
understands that IT and OT footprints can vary across vessels. As
discussed in Section VII of this preamble, for the reasons indicated
below, the Coast Guard requests public comment on a potential 2-to-5-
year delay for the implementation periods for U.S.-flagged vessels,
which may partially address the commenters' concerns about vessels.
Conducting the required Cybersecurity Assessment allows for regulated
entities to determine and not merely speculate about their specific IT
and OT footprint, including potential vulnerabilities. Even vessels
with a small IT or OT footprint may still face cybersecurity risks that
could impact operations, safety, and security, which must then be
addressed. Some such limitations may be addressed in the Cybersecurity
Plan. When a regulated entity believes that certain requirements are
not applicable or they are unable to comply with specific requirements
within this regulation, they may follow the procedures in Sec. 101.665
to request a waiver or equivalency.
While the Coast Guard recognizes that issues such as frequent
operator changes may result in additional work for a regulated entity,
this final rule is in line with existing requirements applicable to
owner or operator changes. The Coast Guard believes that cybersecurity
training remains crucial for safeguarding the MTS against evolving
cybersecurity threats. Each new operator introduces a potential
vulnerability, and, without adequate training, this could compromise
both IT and OT systems. To mitigate these risks, it is vital that all
operators, regardless of turnover frequency, are equipped with
fundamental cybersecurity knowledge and skills. While formal training
may be appropriate, the Coast Guard is not mandating a format of
training in this final rule. However, the training would have to, at
minimum, cover relevant provisions of the Cybersecurity Plan to include
recognizing, detecting, and preventing cybersecurity threats, and
reporting cyber incidents to the CySO. When a regulated entity believes
they are unable to comply with specific requirements within this
regulation, they may follow the procedures in Sec. 101.665 to request
a waiver or equivalency.
Some commenters suggested that the Coast Guard should create a
separate rulemaking for vessels.
The Coast Guard is not considering a separate rulemaking for
vessels at this time. This final rule is consistent with the Coast
Guard's authority under MTSA as it applies to vessels.
Some commenters asked that this final rule not apply to vessels
such as small passenger vessels, towing vessels, and barges, as well as
to facilities with minimal or no IT and OT footprint. One commenter
stated that the NPRM outlined cybersecurity procedures broadly
applicable to many vessels and facilities but failed to consider those
with minimal computer networks and systems that would not significantly
impact operations, security, or safety if compromised. Another
commenter stated that OT systems on vessels are distinct and should be
assessed separately from shoreside infrastructure, as cyber incidents
typically impact only one vessel at a time due to segmentation. In
contrast, shoreside incidents can have wider repercussions. For inland
vessels, the primary vulnerabilities are personally identifiable
information (PII) and positional data theft. Thus, the commenter
recommended a tiered risk system to determine suitable cybersecurity
measures for vessels.
The Coast Guard does not agree with changing the applicability of
this final rule. Developing a definition or standard for ``little or no
IT and OT footprint'' would be challenging, and the Coast Guard did not
seek comment on such a definition in this rulemaking. Moreover, the
Coast Guard is not aware of a definition for ``little or no IT and OT
footprint'' in other regulations or in other recognized standards.
Until an Assessment is completed, it would be difficult to know the
full extent of a regulated entity's IT and OT footprint, and even a
smaller IT and OT footprint could still allow cybersecurity threats and
vulnerabilities and could still result in a cyber incident. It is
necessary for all regulated entities under this final rule to first
conduct the required Cybersecurity Assessment to determine the extent
of their IT and OT footprint. Upon completion of that assessment, each
regulated U.S.-flagged vessel, facility, or OCS facility can then
develop a Cybersecurity Plan based on the applicable requirements. Even
if an Assessment identifies only a minimal IT and OT footprint, that
footprint may still represent levels of risk to the owner or operator,
as well as the MTS. If the owner or operator finds there are portions
of these regulations that do not apply to their U.S.-flagged vessel,
facility, or OCS facility, the Coast Guard offers procedures in Sec.
101.665 for an owner or operator to request a waiver or equivalence
determination for the requirements. While an item may be identified by
an owner or operator as not applicable, and therefore requires a waiver
request from the requirement, it is necessary to identify that through
the Cybersecurity Assessment and
[[Page 6310]]
document in a Cybersecurity Plan so that it can be reviewed in the
future as needed.
Multiple commenters recommended the Coast Guard coordinate with the
Bureau of Safety and Environmental Enforcement (BSEE) in the Department
of the Interior before issuing any cybersecurity requirements for OCS
facilities because of the shared authorities in OCSLA.
The Coast Guard and BSEE have a shared mission of ensuring safety
on the OCS. We work closely together to ensure our requirements are not
in conflict with each other. The Coast Guard will continue to work with
BSEE and our other interagency partners to harmonize efforts as
appropriate and according to OCSLA and any other applicable law.
One commenter requested clarity about applicability to Sec. Sec.
104.105(b) and 105.105(b).
The Coast Guard revised the language in Sec. 101.605 to clarify
that these cybersecurity regulations apply to the owners and operators
of U.S.-flagged vessels, facilities, and OCS facilities required to
have a security plan under parts 104, 105, and 106. The text ``required
to have a security plan'' is the clearest means to clarify the
applicability without the loss of legal precision, especially as MTSA
addresses regulated entities in a similar manner at 46 U.S.C 70103.
The Coast Guard received multiple comments suggesting that the
applicability for these requirements should be a risk-based approach
based on the varied levels of IT and OT footprints, or how extensive a
cybersecurity incident would be, based on vessel, facility, or OCS
facility size and type of operation, including a consideration for the
applicability to U.S. domestic vessels. Multiple commenters contended
that prescribing the same requirements for all vessels and not scaling
the applicability of requirements based on risk profile would impose
unfeasible requirements and undue burdens on owners and operators of
vessels. One commenter indicated that this risk-based approach should
also apply to penetration test requirements. Another commenter further
suggested that the Coast Guard add objective criteria for cybersecurity
controls similar to what is currently addressed in NVIC 01-20.
The Coast Guard determined that these cybersecurity requirements
should apply to the same entities to which MTSA currently applies, but
that there are areas where a waiver under Sec. 101.665 could apply.
The Coast Guard would not currently be able to identify the unique
aspects of each vessel and facility to develop a comprehensive risk
factor system and base requirements off that. Additionally, risk
factors could change, so the Coast Guard would either risk developing
factors that become outdated, or otherwise could not keep up with a
changing IT and OT landscape. The Coast Guard feels that the best
approach is to develop a broad range of cybersecurity requirements in
this final rule, which serve as baseline requirements across all
regulated entities rather than a risk-based approach. Since each
individual entity will have unique features, including their IT and OT
footprint, we believe it makes the most sense for them to assess
themselves, and, if needed, identify where they cannot comply or when a
requirement is not applicable.
It is practical to maintain the existing MTSA applicability,
particularly in requiring those regulated stakeholders to complete a
Cybersecurity Assessment to identify the extent of their IT and OT
footprint, so all entities can determine which requirements under these
regulations would apply. In cases when an owner or operator determines,
through their assessment, that certain criteria do not apply, they may
follow the procedures in Sec. 101.665 to request a waiver or
equivalency. NVIC 01-20 serves as general guidance for incorporating
cybersecurity into existing FSA and FSP requirements in 33 CFR part
105. This final rule represents more comprehensive cybersecurity
requirements that go beyond those addressed by NVIC 01-20. An owner or
operator may, however, use the principles of NVIC 01-20 to help inform
their compliance with these regulations.
One commenter suggested that the Coast Guard revise Sec. 101.605
so that this final rule would not apply to a vessel or facility that
has not installed an IT or OT system that, if compromised, could result
in a TSI. The commenter also suggested that the Coast Guard modify 33
CFR 104.305 and 105.305 so that VSAs and FSAs require an analysis of
cybersecurity threats as defined in Sec. 101.615.
The Coast Guard does not agree with this recommendation as we are
not making changes to existing regulatory requirements in 33 CFR parts
104 and 105. In addition, the recommendation to revise 33 CFR part 101
would introduce too much uncertainty into applicability, especially as
it relates to the need for entities to conduct a Cybersecurity
Assessment to evaluate risks as a threshold matter. It would be
premature to carve-out a regulated entity based on an assumption the
regulated entity's IT or OT poses no risk to the MTS or risk of TSI
before such an evaluation is made through a Cybersecurity Assessment.
The function of the Cybersecurity Assessment is to provide the
necessary information to develop the appropriate mitigation measures
within the Cybersecurity Plan and to provide the substance that would
inform any discussions with the COTP or MSC, especially as it may
relate to requests for waivers or equivalencies.
One commenter requested clarification as to the applicability of
these regulations in cases of a landlord port and tenant facilities.
These regulations create new baseline cybersecurity
responsibilities for the owner or operator of an applicable U.S.-
flagged vessel, facility, or OCS facility. ``Owner or operator'' is a
term defined at 46 U.S.C. 70101(5). The applicability of these
regulations may depend on the nature of any specific landlord port and
tenant facility agreements. Therefore, the Coast Guard cannot make a
blanket determination about all landlord-tenant relationships as it
relates to the responsibility for compliance with the requirements of
this final rule.
Some commenters suggested that the Coast Guard incorporate these
rules into the existing 33 CFR parts 104, 105, and 106 requirements, as
opposed to creating 33 CFR subpart F.
The Coast Guard considered this approach but determined that
putting these cybersecurity requirements in a single subpart within 33
CFR part 101, which would then follow the applicability of 33 CFR parts
104, 105, and 106, allowed for the best alignment across regulated
entities. The Coast Guard has chosen to articulate the cybersecurity
requirements within 33 CFR part 101 because these regulations impact
U.S.-flagged vessels, facilities, and OCS facilities collectively. This
format is presented in a more organized and accessible manner to the
maritime partners who are already familiar with the MTSA regulations.
Some commenters asked us to clarify whether 33 CFR subpart F will
supersede NVIC 01-20.
NVIC 01-20 is a guidance document that states the Coast Guard's
policy stance and an interpretation of its existing regulations. NVIC
01-20 itself is not enforceable as a legislative rule. The
cybersecurity guidance provided by NVIC 01-20 relates to the
requirements in 33 CFR part 105 that predate this rulemaking. Upon the
effective date of this final rule, the requirements in these
regulations will have the force of law. This final rule will supersede
NVIC 01-20.
Some commenters raised concerns that some stakeholders will be
affected
[[Page 6311]]
by limited workforce and resources and questioned the cybersecurity
benefits. The commenters asserted that these challenges would be a
significant hindrance to operational effectiveness and urged the Coast
Guard to provide sufficient time and flexibility for operators to
understand and implement the new requirements. The Coast Guard
recognizes that regulated entities will have different workforce
levels, as well as financial and other resources, that affect how they
will comply with this final rule. In many cases, regulated entities
with a smaller workforce and fewer resources will likewise have a
smaller IT and OT footprint to assess and address in a Cybersecurity
Plan. If those entities do have a large IT and OT footprint, then that
reinforces the need to comply with the requirements in this final rule
to prevent, mitigate, and respond to cybersecurity threats,
vulnerabilities, and incidents.
One commenter stated that this final rule had an unclear impact on
marine terminal operators participating in unified port authority
cybersecurity programs.
The Coast Guard encourages participation and collaboration between
stakeholders and maritime entities in addressing cybersecurity and
other security risks throughout a port complex. However, a unified port
authority cybersecurity program or similar higher-level arrangement may
not adequately account for the unique cyber threats and vulnerabilities
for a specific regulated entity. This final rule represents
requirements for each regulated U.S.-flagged vessel, facility, and OCS
facility, consistent with existing security requirements according to
33 CFR parts 104, 105, and 106.
The Coast Guard believes that both this final rule and unified port
authority cybersecurity programs can work in complement to each other,
as they both pursue the same goal of bolstering cybersecurity, where
the port authority program can be viewed as a macro-level plan, rather
than the micro-level, individualized plan specific to the U.S.-flagged
vessel, facility, or OCS facility. This final rule is based on CISA's
CPGs, which themselves are informed by NIST's Cybersecurity Framework
(CSF), and all leverage commonly accepted cybersecurity best practices
that should not conflict with other programs. This final rule
represents minimum baseline standards that a regulated entity can
further build upon in coordination with unified port authority
cybersecurity programs.
Many ports have an active and robust AMSCs, which may include a
Cybersecurity Subcommittee that can address coordination. Since this
final rule and unified port authority cybersecurity programs all share
a common goal of ensuring cybersecurity, the Coast Guard expects that
regulated entities and port authorities will work together to ensure
programs are not in conflict. Additionally, in cases when a unified
port authority cybersecurity program may impact a regulated entity's
specific cybersecurity plan, and owner or operator may be able to
address the impact through the provisions in Sec. 101.665 for
noncompliance, waivers, and equivalents.
C. Comments Related to Definitions
Sources for Definitions Used in This Final Rule
Some commenters suggested using definitions for certain terms used
in this final rule that come from sources such as NIST, DoD's
Cybersecurity Maturity Model Certification program, and other
standards.
The Coast Guard selected the definitions used in this final rule
based on definitions used by our interagency partners to ensure
alignment and harmonization across the interagency. The NPRM \46\
discussed the citations for these definitions. The Coast Guard
recognizes that there are numerous definitions for many of the terms
used in this final rule, and that many might choose other sources, but
these definitions meet the needs of the Coast Guard and are
overwhelmingly accepted by stakeholders. The definitions used here are
standard cybersecurity definitions used across industry and Government
agencies and are listed in NIST's CSF. This common lexicon helps limit
miscommunication.
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\46\ 89 FR 13404.
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Harmonizing Definitions
One commenter noted that harmonization of definitions for existing
and proposed cybersecurity requirements is vital.
As discussed in the preamble of the NPRM, the Coast Guard consulted
numerous sources for the definitions used in the NPRM. These sources
include Executive Order 14028, the James M. Inhofe National Defense
Authorization Act for Fiscal Year 2023 (Pub. L. 117-263) (the Act), the
Homeland Security Act of 2002 (Pub. L. 107-296), as amended, CISA's
National Initiative for Cybersecurity Careers and Studies, and NIST's
Computer Security Resource Center (CSRC). We believe that these sources
are reliable and generally accepted by the industry and Government
agencies. Additionally, these terms are appropriate for usage in the
maritime setting. The definitions used here are standard cybersecurity
definitions used across industry and Government agencies and are listed
in NIST's CSF. However, we also recognize that there is some variance
in the cybersecurity terms used by industry and Government sources. For
example, NIST defines a ``cyber incident'' as ``an occurrence that
results in actual or potential jeopardy to the confidentiality,
integrity, or availability of an information system or the information
the system processes, stores, or transmits, or that constitutes a
violation or imminent threat of violation of security policies,
security procedures, or acceptable use policies.'' Part 6 of title 33
of the CFR uses similar, but not identical, language to define a cyber
incident as an occurrence that:
(1) Actually or imminently jeopardizes, without lawful authority,
the integrity, confidentiality, or availability of information or an
information system; or
(2) Constitutes a violation or imminent threat of violation of law,
security policies, security procedures, or acceptable use policies.\47\
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\47\ 33 CFR 6.01-8 and 44 U.S.C. 3552(b)(2).
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The Homeland Security Act of 2002 also uses similar language,
defining an incident as ``an occurrence that actually or imminently
jeopardizes, without lawful authority, the integrity, confidentiality,
or availability of information on an information system, or actually or
imminently jeopardizes, without lawful authority, an information
system.'' \48\
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\48\ 6 U.S.C. 650(12).
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After reviewing all these definitions, we selected the ones that
best fit the maritime setting and ensured that the regulatory
definitions are consistent with the relevant statutory definitions. The
definitions used here align with standard cybersecurity definitions
used across industry and Government agencies and are listed in NIST's
CSF. These sources provide a common lexicon for everyone to use to
limit miscommunication and do not differ because they are used in a
maritime setting.
Adding New Terms to the Final Rule
Several commenters suggested that we introduce new terms that were
not defined in the NPRM, such as ``Marine Transportation System
(MTS),'' ``Critical Cybersecurity Equipment,'' and ``transportation
security incident.'' In some cases, commenters proposed adding new
definitions to enhance understanding of this final rule. For
[[Page 6312]]
example, they requested definitions for ``key personnel'' as described
in Sec. 101.650(d), Cybersecurity Training for Personnel, and
``sensitive or critical data'' instead of the current requirement that
``all data'' must be protected under Sec. 101.650(c), Data Security
Measures. The commenters noted that these suggestions were made to
clarify specific requirements and improve the overall clarity and
implementation of this final rule.
We did not make changes in response to most of these suggestions.
Adding these terms is unnecessary, as many of them are already well-
defined and have been commonly used in the maritime sector for many
years. For example, ``Marine Transportation System'' or ``Maritime
Transportation System'' are terms that are widely recognized and
understood by industry and Government agencies.\49\ Similarly,
transportation security incident is a term that, although mentioned
several times in the NPRM, was not defined because it is already
defined at 46 U.S.C. 70101 and in 33 CFR 101.105. This definition has
been in place for over 20 years under the MTSA regulations. Therefore,
we do not see the need to introduce additional definitions for these
terms.
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\49\ See for example, 46 U.S.C. 50401.
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Some commenters suggested that the Coast Guard define what is a
``significant number'' when disclosure or unauthorized access directly
or indirectly of nonpublic personal information of individuals
information requires reporting in the proposed definition for
reportable cyber incident.
The Coast Guard did not make changes in response to these requests.
We recognize that we use several terms, such as ``significant number,''
in this final rule without defining them. We intentionally left this
and other terms undefined because their meanings can vary significantly
depending on an organization's operational conditions and cybersecurity
risks. This approach ensures that the definition is appropriately
tailored to the unique context and needs of each organization. By
allowing organizations to define these terms themselves, we aim to
provide a more flexible approach to meet the requirements in the
evolving cybersecurity environment in the maritime sector.
Defining the Term ``Reportable Cyber Incident''
Numerous commenters responded affirmatively to our request for
comments on whether we should define and use the term ``reportable
cyber incident'' in this rulemaking to clarify what incidents trigger
reporting obligations. Some commenters offered suggestions on edits to
this proposed definition, including reordering subparagraphs. One
commenter suggested limiting the definition to known incidents and not
including those still under investigation considering the DHS report,
informed by the work of the Cyber Incident Reporting Council (CIRC),
which advises that the Federal Government should adopt a consistent
model definition of a ``reportable cyber incident'' wherever
practicable. Another commenter noted that establishing a threshold for
reportable cyber incidents based on the potential that the incident
could result in a TSI would clarify what does and does not need to be
reported. Another commenter recommended that the Coast Guard should
narrowly tailor ``reportable cyber incident'' to align with the Coast
Guard's mission and the underlying purpose of the MTSA.
The Coast Guard agrees with the suggestion to define and use the
term reportable cyber incident. We have included the term reportable
cyber incident in this final rule. The Coast Guard's definition of
reportable cyber incident is based on the model definition proposed in
the CIRC-informed DHS Report (the ``CIRC Model Definition'').\50\
Interagency stakeholders reviewed this term and its definition to
ensure alignment and harmonization to the extent practical. The Coast
Guard did not adopt the suggested edits to the proposed definition. We
are maintaining the definition we included in the preamble to the NPRM,
based on other public comments and discussion with interagency partners
on harmonization.
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\50\ See DHS Office of Strategy, Policy, and Plans,
Harmonization of Cyber Incident Reporting to the Federal Government
(Sept. 19, 2023), https://www.dhs.gov/publication/harmonization-cyber-incident-reporting-federal-government, accessed August 13,
2024.
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One commenter stated that the definition for reportable cyber
incident should include clearly defined thresholds for such incidents.
The Coast Guard does not agree. The definition for a reportable
cyber incident provides sufficient detail to allow owners, operators,
or CySOs to determine what constitutes such an incident and reflects
harmonization among the interagency on the substance of this
definition.
As noted previously, after considering all public input, we have
decided to include the term reportable cyber incident as defined in the
NPRM. We concur with the many comments that this term is sufficiently
well-defined to provide clear guidance on when and under what
conditions cyber incidents must be reported to the NRC. This clarity
will help eliminate the need to report minor cyber incidents, which
will reduce the administrative burden on owners and operators as a
result.
One commenter suggested that the Coast Guard include the definition
for a reportable cyber incident, but to allow for a threshold that
would include unauthorized attempts by third-party actors to access
sensitive information. The commenter also stated that these incidents
should include phishing attempts, attempts to gain access to terminal
operating systems, and unsuccessful malware attacks, as well as loss of
network availability, exposure of sensitive data, and disruption of
business operations as a result of unauthorized access by third
parties.
We did not adopt this suggestion. The Coast Guard's definition
allows for the owner, operator, or CySO to determine if an incident
meets the criteria for reporting. Further, the Coast Guard encourages
stakeholders to report any situation or incident out of the ordinary if
there is doubt or if they question whether it meets the definition of
reportable cyber incident.
We acknowledge the concerns raised by some commenters about
redundancy and the need for interagency coordination. The Coast Guard
will continue to work with other Government agencies to ensure our
language aligns among all regulations and ensure harmonization of
efforts to the extent practicable.
The Coast Guard emphasizes information sharing among its
interagency partners. The Coast Guard shares information with other
Federal agencies through multiple channels: NRC reports of incidents
are shared with DHS, CISA, and other relevant agencies. As a Co-Sector
Risk Management Agency for the Transportation Systems Sector, the Coast
Guard regularly communicates with the U.S. Department of
Transportation, the Maritime Administration, TSA, and CISA.\51\ The
Coast Guard is a participant on numerous National Security Council-led
Interagency Policy Committees. Engagement among local, State, Federal,
and Tribal agencies also occurs through AMSCs. The Coast Guard shares
cyber-focused products such as marine safety
[[Page 6313]]
information bulletins, cyber advisories, and other products across
interagency partners.
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\51\ The White House, National Security Memorandum on Critical
Infrastructure Security and Resilience, Apr. 30, 2024, https://www.whitehouse.gov/briefing-room/presidential-actions/2024/04/30/national-security-memorandum-on-critical-infrastructure-security-and-resilience/, accessed on December 20, 2024.
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One commenter noted that they support defining reportable cyber
incident to distinguish between incidents that must be reported and
those that do not; however, they find the current definition of ``cyber
incident'' in Sec. 101.615 is too broad and overly focused on IT. The
commenter also noted that they have concerns with the proposed
definition of reportable cyber incident and its alignment, or lack
thereof, with other definitions for reportable cyber incidents in
regulation and policy.
The Coast Guard definition of cyber incident is based on the
existing definition of incident in Title XXII of the Homeland Security
Act of 2002,\52\ which is not textually identical, but is substantively
similar in relevant part to, the definition of ``cyber incident'' in
Executive Order 14116. An incident in the Homeland Security Act of 2002
is ``an occurrence that actually jeopardizes, without lawful authority,
the integrity, confidentiality, or availability of information or an
information system, or actually jeopardizes, without lawful authority,
an information system.'' Although the Coast Guard recognizes that not
all commenters may agree with our chosen definition, the Coast Guard
values alignment with these established terms to minimize potential
conflicts that could be created by significant deviations between
definitions in these regulations and existing statutes.
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\52\ Public Law 107-296, as added by Public Law 117-263, section
7143, classified to 6 U.S.C. 650.
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``Information system'' is defined in this final rule as an
interconnected set of information resources under the same direct
management control that shares common functionality. Typically, a
system includes hardware, software data, applications, communications,
and people. It includes the application of IT, OT, or a combination of
both. The definition of information system clearly covers both IT and
OT systems.
The Coast Guard's definition of reportable cyber incident is based
on the model definition proposed in the CIRC Model Definition. However,
in CISA's proposed rule implementing the Cyber Incident Reporting for
Critical Infrastructure Act of 2022 (CIRCIA) (Pub. L. 117-103), the
proposed definition of ``substantial cyber incident'' (which is used
within the definition of ``covered cyber incident,'' the term that
describes what cyber incidents are required to be reported under
CIRCIA) does not include the CIRC Model definition's phrase ``or, if
still under the covered entity's investigation, could reasonably lead
to any of the following,'' as CISA interprets CIRCIA to require an
incident to actually result in one of the impacts listed in the
definition of substantial (in this case, reportable) cyber incident
under CIRCIA.\53\ For similar reasons, CISA did not propose including
in the definition of ``substantial cyber incident,'' the CIRC Model
Definition's fourth threshold prong, ``potential operational
disruption.'' A ``reportable cyber incident'' is a type of ``cyber
incident'' as these terms are defined in this final rule. A
``reportable cyber incident'' as defined in this final rule would also
trigger a reporting obligation under 33 CFR 6.16-1 for entities
required to report a cyber incident as such term is defined in 33 CFR
part 6.
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\53\ 89 FR 23644.
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Revising the Definition of ``Breach''
One commenter noted that the term ``breach,'' when used by the
Coast Guard to discuss a breach of security, could have serious,
significant legal and financial impacts in reference to cybersecurity.
We revised Sec. 101.625(d)(10) in this final rule to refer to
``reportable cyber incidents'' rather than ``breaches of security,
suspicious activity that may result in TSIs, TSIs, and cyber
incidents.'' This is also consistent with our decision to define and
include the term reportable cyber incident.
Adding a Definition for ``Cybersecurity Threat''
One commenter recommended adding the definition of ``cybersecurity
threats'' to 33 CFR parts 104 and 105.
The Coast Guard does not agree to add the definition of
``cybersecurity threat'' because it is already encompassed by the
defined term ``cyber threat'' the Coast Guard uses in this final rule.
Cyber threat is the term used in CIRCIA, which amended the Homeland
Security Act of 2002 (Pub. L. 107-296). CIRCIA defined cyber threat by
cross-referencing to the term cybersecurity threat as it was already
defined in the Homeland Security Act of 2002. The two statutory terms
share the same definition, which is substantively repeated in this
final rule. For the sake of consistency in this final rule, the Coast
Guard has chosen cyber threat as the term-of-art for these regulations.
Furthermore, the Coast Guard does not concur with the suggestion to
amend 33 CFR parts 104 and 105 because, except for amending 33 CFR
160.202, this final rule is limited to establishing requirements in 33
CFR part 101. Adding or removing requirements in parts 104, 105, or 106
is outside the scope of this final rule. The new definitions in Sec.
101.615 are sufficient for this final rule.
Revising the Definition of ``Backup''
One commenter raised a concern that the primary issue with the
concept of ``backup'' is that it lacks the flexibility to rebuild or
re-instantiate a system from something other than a backup. When
restoring from backups, time can be a critical factor. Therefore, the
commenter recommended that the Coast Guard expand this definition and
eliminate the requirement for all backups to be stored offsite.
The Coast Guard agrees with this commenter. We revised the
definition of backup in Sec. 101.615 to remove the phrase ``in a
secondary location'' and the implication that backups must be stored
``offsite.'' Instead, we added language to clarify our definition of
backup. In this final rule, backups refer to ``copies being stored
separately for preservation and recovery.'' With these changes, the
revised definition is sufficient for the requirements in these
regulations. If an owner or operator of a U.S.-flagged vessel,
facility, or OCS facility identifies a method that they feel falls
outside of that definition, they may follow the process to request a
waiver according to Sec. 101.665.
Defining the Term ``Transportation Security Incident''
One commenter questioned the clarity of the definition of a
``transportation security incident,'' while another suggested a
definition of ``security incident.''
Transportation security incident is defined by the MTSA, codified
at 46 U.S.C. 70101, and in 33 CFR 101.105. Further guidance on what
constitutes a TSI (as well as a ``breach of security'' or ``suspicious
activity'') is provided in NVIC 02-24.
Revising the Definition of ``Hazardous Condition''
Multiple commenters addressed our request for input on whether we
should amend the definition of ``hazardous condition'' in 33 CFR
160.202 by adding ``cyber incidents.'' The Coast Guard received several
comments in favor of amending the definition of hazardous condition to
include cyber incidents. Conversely, one commenter advised against
including cyber incidents under the definition of hazardous condition
in Sec. 160.202. The commenter warned that doing so could lead to
unnecessary sharing of sensitive information during
[[Page 6314]]
cyber incidents, such as losing confidential data, that do not impact
marine operations. The commenter recommended against additional
reporting requirements beyond those mandated by CISA if cyber incidents
are added to the definition of hazardous condition. Other commenters
also suggested that the Coast Guard clarify the application of this
definition to marine terminals and OCS facilities, as much of this
section pertains to vessel requirements and may cause confusion.
The Coast Guard concurs with the recommendations to include the
term. Accordingly, we amended the definition of hazardous condition in
that section to include the term cyber incident. Including the term
cyber incident is a helpful example that adds clarity to the existing
regulation in 33 CFR 160.202, which applies only to vessels. The Coast
Guard recognizes that not all occurrences with a cyber aspect will
create a hazardous condition, but believes the term's inclusion in the
list of examples will be beneficial by highlighting that cybersecurity
is an important consideration that operators should be cognizant of
when assessing hazardous conditions.
As discussed elsewhere in this preamble, the Coast Guard amended
the definition of hazardous condition to include cyber incidents. The
Coast Guard is not changing the applicability of Sec. 160.203 to
include facilities or OCS facilities because Sec. 160.203 relates to
the Notice of Arrival and Departure regulations for vessels. This
clarification to the definition of hazardous condition is distinct from
the new baseline cybersecurity requirements for MTSA-regulated
entities.
One commenter expressed concern with the NPRM's approach to
requesting input on whether to define and use reportable cyber
incident, and whether to amend the definition of ``hazardous
condition.'' The commenter strongly advocated for harmonizing the
reporting process, noting that owners and operators of U.S.-flagged
vessels are already familiar with reporting to the NRC. They suggested
that all cyber incidents should be reported through this channel,
allowing the NRC to relay information to other Federal agencies as
needed.
The Administrative Procedure Act requires that we provide general
notice of a proposed rulemaking, including notice of the terms or
substance of a proposed rule or a description of the subjects and
issues involved.\54\ Asking the public to comment on specific items, in
addition to the NPRM as whole, is a commonly accepted way to seek
public participation in the rulemaking process. In fact, as discussed
above, we received numerous comments responsive to our request.
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\54\ 5 U.S.C. 553(b)(3).
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D. Comments Related to Owner or Operator
We received a series of comments about the responsibilities of the
owner or operator for managing the Cybersecurity Plan.
One commenter recommended assigning responsibilities to the
operator to ensure compliance with applicable regulations for regulated
facilities. One commenter recommended assigning overall responsibility
for vessels to the company or organization (in this case, a Document of
Compliance (DOC) holder) if the owner and operator of a vessel are
separate entities. Another commenter recommended the term ``owner and
operator'' be clarified to signify a single responsibility for the
vessel (in this case, a DOC holder), OCS facility, or other facility
owned or operated, based on IMO practice.
We did not make changes in response to these recommendations. The
Coast Guard desires consistency with the existing regulations and uses
the term ``owner or operator'' as defined in Sec. 101.105 throughout
this final rule. The Coast Guard does not agree that further
clarification of the term ``owner or operator'' is needed. The term
owner or operator in this final rule is consistent with existing MTSA
regulations, and it is unnecessary to specify further criteria for the
entity with overall responsibility (such as requiring them to be
holding a DOC).
One commenter requested clarification of the differences between
the roles and responsibilities of the owner or operator and the CySO as
there are similar or overlapping roles to both.
The roles and responsibilities of the CySO and owner or operator
are clearly outlined in this final rule in Sec. Sec. 101.625 and
101.620, respectively, and are in line with the existing relationships
between the owner or operator, Vessel Security Officer (VSO), and
Facility Security Officer (FSO) in existing regulations. While there is
some overlap between the roles, any redundancy or overlap does not take
away from the responsibilities of the CySO and owner or operator and
enables the owner or operator to maintain oversight over the CySO
position.
One commenter recommended that the Coast Guard change the phrase
``responsible for'' to ``accountable for'' in Sec. 101.620(a) when
referring to owners and operators assigning security duties to other
personnel. According to the commenter, this change would highlight the
importance of how these roles will be staffed and implemented,
indicating a more structured approach to accountability within the
organization.
The Coast Guard declined to make this change, as the term
``responsible for'' is consistent with existing language for VSOs,
FSOs, and OCS FSOs in current regulations and is long-standing industry
practice.
One commenter questioned whether ``person'' as stated in Sec.
101.620(b)(2) is synonymous with ``role.''
An owner or operator subject to this final rule is required to
identify each person exercising cybersecurity duties and
responsibilities. Any person having such duties and responsibilities
would likewise have a ``role.'' Owners and operators should focus on
the language of this final rule and identify each person, as stated.
The Coast Guard is concerned that the necessary duties are properly
assigned and performed. The particular manner which an entity
identifies and assign those duties, whether by individual name or by
role, is left to the entity's discretion. The Coast Guard encourages
owners and operators to comply with the requirements under Sec.
101.620(b)(2) consistent with how their U.S.-flagged, facility, OCS
facility, or organization addresses similar requirements in their VSP,
FSP, or OCS FSP.
E. Comments Related to Cybersecurity Officer
Some commenters stated that they did not believe that cybersecurity
warrants another designation for security personnel, in this case a
CySO, and felt that a specific cybersecurity plan was not needed. They
recommended adding cybersecurity duties to existing responsibilities of
the Company Security Officer (CSO) and VSO. Another commenter felt that
the CySO position might be unnecessary and requested a process for
waiving this requirement. Another commenter believed that this final
rule should state the actions that an organization must take, rather
than specifying the individual role that needs to accomplish those
actions. They felt that organizations should be able to identify who
that person would be for their organization, which may align to other
positions or titles within their organization.
The Coast Guard strongly believes that the present and evolving
cybersecurity threats in the MTS require specific regulations to help
prevent, mitigate, and respond to cybersecurity incidents and
vulnerabilities. This final rule provides minimum cybersecurity
[[Page 6315]]
requirements for a common cybersecurity baseline for regulated maritime
entities. The threats and vulnerabilities addressed are not adequately
covered by existing regulations. The requirements to designate a CySO
and to develop a Cybersecurity Plan reflect the reality that
cybersecurity threats, risks, and vulnerabilities exist in the MTS, and
have the potential to significantly affect the safety and security of
individual entities, as well as the MTS and other transportation
critical infrastructure. The Coast Guard has determined that it is
necessary to identify a specific CySO, similar to the identification of
a VSO or FSO, that serves as the primary lead to organize these efforts
within their U.S.-flagged vessel, facility, or OCS facility, to ensure
that there is at least one representative focusing on and addressing
the relevant requirements. Consistent with Sec. 101.625, the CySO may
perform other duties such as CSO, FSO, or VSO. It will be up to owners
and operators of U.S.-flagged vessels, facilities, and OCS facilities
to decide whether they need to designate a sole security officer that
focuses exclusively on cybersecurity.
One commenter stated that the requirements for cybersecurity should
be directed at the executive level, and not create a CySO position to
handle many of these requirements.
The owner or operator has ultimate responsibility for compliance
with this final rule. This includes the designating a CySO, as required
by Sec. 101.620(b)(3). It is the responsibility of each regulated
entity to ensure their executive leadership is aligned with the CySO
and other cybersecurity professionals. Placing full ownership of
cybersecurity requirements on the owner or operator, without the
designation of a CySO, would be burdensome to the owner or operator.
The position of CySO ensures the regulated entity has personnel with
the necessary professional expertise to address cybersecurity.
Several commenters stated that the qualifications listed in these
regulations did not fully encompass what would be required for a
successful CySO position. Additionally, a commenter questioned the
qualifications of the Coast Guard or a third-party organization to
evaluate what is required of a specific organization's CySO. The
commenter also suggested that either the Coast Guard or a third-party
organization would be in a poor position to evaluate whether they meet
the necessary qualifications. Another commenter stated that it could be
difficult for small organizations to have someone on staff with these
qualifications.
This final rule presents minimum baseline requirements, including
the requirements of a CySO for a U.S.-flagged vessel, facility, or OCS
facility. The qualifications required serve as a baseline that should
be attainable and easily evaluated by organizations of any size or
complexity. Organizations are welcome to identify additional
requirements, such as additional qualifications, that they would
require of their CySO position as best suits their individual needs, so
long as the minimum requirements of this final rule are met. It is up
to the owner or operator of a U.S.-flagged vessel, facility, or OCS
facility to determine that their candidate meets these requirements,
and for the Coast Guard to evaluate whether the owner or operator met
their required responsibilities in their review of the Cybersecurity
Plan.
The Coast Guard does not, and will not, have a role in an
organization's hiring of new personnel or designation of new roles and
responsibilities to existing personnel. These decisions are left up to
the owner or operator. The Coast Guard has stated that the CySO can be
an existing employee at a U.S.-flagged vessel, facility, or OCS
facility. The Coast Guard will verify that a qualified CySO has been
designated by the owner or operator according to this final rule. The
Coast Guard recognizes that this final rule will result in costs
incurred by industry. Failure to designate a CySO, as well as failure
to comply with any other aspect of this final rule, would be subject to
actions as determined by the COTP or other appropriate Coast Guard
representative.
One commenter asked the Coast Guard to clarify if the CySO must be
a U.S. citizen.
The Coast Guard does not impose citizenship requirements for the
CySO position in this final rule. The Coast Guard may consider this
issue in a subsequent rulemaking, as appropriate.
Some commenters noted that for small operators, or those with
limited resources, the CySO would likely be a collateral duty. Another
commenter similarly commented that it was not reasonable to expect
every owner or operator of a vessel to employ a cybersecurity expert,
and that the CySO position requires too much specialized knowledge and
too much time to be added to an existing position. Many small companies
without an in-house IT department might have to rely on a third-party
provider for all cybersecurity needs and protections. Consequently, the
commenters were concerned that this final rule would impose unrealistic
requirements and undue burdens on small operators. Some commenters
requested that the Coast Guard clarify that a CySO could be someone
designated at the corporate level.
The Coast Guard notes in this final rule that the CySO designation
may be given to an employee with other responsibilities consistent with
Sec. 101.625. The CySO role may be a collateral duty so long as all
the requirements and responsibilities of the position are met. It is
the responsibility of owners and operators to ensure that cybersecurity
risks are managed and addressed, whether through in-house resources or
through third-party services. While we understand the concerns
regarding the potential burden of compliance, it is essential that
cybersecurity requirements are met to safeguard the organization's
assets and ultimately, maritime critical infrastructure and the MTS.
Ensuring robust cybersecurity defenses is critical to protecting
against potential threats and maintaining operational integrity.
The Coast Guard developed these regulations, including the
cybersecurity requirements, to enable owners and operators to identify
a person who can manage the requirements, even if they must rely on
other cybersecurity, IT, or OT professionals for more technical items
in the rule. Regardless of the size of an organization itself, the size
of their IT and OT footprint dictates how much a CySO will have to
address. A company with a small IT or OT footprint would likewise be
scaled towards fewer items that the CySO would be responsible for. A
company with a larger IT or OT footprint would similarly require more
of the CySO position, commensurate to the level of risk posed. The
Coast Guard believes, therefore, that there would be little to no undue
burden or unrealistic requirement of any regulated entity, as the level
of cybersecurity actions required of the CySO directly correlates to
their cyber footprint. The Coast Guard reiterates that this final rule
allows for the designation of the CySO role to an existing employee at
any level of the organization, so long as the requirements and
responsibilities are met for each individual U.S.-flagged vessel,
facility, or OCS facility.
Some commenters requested that the Coast Guard recognize that a
facility may designate an alternate CySO. Their concern is that, for a
company with multiple facilities, one CySO may not have the knowledge
or practical capability to effectively manage all of them.
The Coast Guard revised the definition for Cybersecurity Officer in
Sec. 101.615 to clarify that the owner or operator must designate a
CySO, but
[[Page 6316]]
they also may designate an alternate CySO to assist in the duties and
responsibilities at all times, including at times when the CySO may be
away from the U.S.-flagged vessel, facility, or OCS facility.
One commenter supports including the phrase ``or equivalent job
experience'' to the CySO requirements.
The Coast Guard agrees that the ``or equivalent job experience'' is
an important phrase and maintains it as part of the final rule in Sec.
101.625(e).
Some commenters requested that we rename the CySO position from
``CySO'' to ``Facility Cybersecurity Officer'' due to potential
confusion with other positions and titles, such as the Chief
Information Security Officer (CISO) or other ``C-Suite'' personnel.
These commenters expressed concern that the Coast Guard was introducing
a term that has not previously been used by other agencies and offered
alternative titles for the role.
This final rule clearly defines the CySO position and
differentiates it from other positions and titles at a U.S.-flagged
vessel, facility, OCS facility, or organization. We do not agree with
changing the name of the position in this final rule, especially as
this applies specifically to U.S.-flagged vessels, facilities, and OCS
facilities. We selected this term to differentiate from other roles
identified in existing regulations, while clearly outlining the
requirements of the position. If an owner or operator prefers to refer
to the position by a different title within the organization, then they
are free to do so as long as they explain the different title in their
Cybersecurity Plan.
One commenter expressed concern that this final rule does not
address how the CySO is expected to interact with the CSO, and that the
relationship between these two positions should be clearly defined.
They stated that the CSO should have ultimate responsibility on all
security-related matters, including cybersecurity, and that the CSO
should approve the Cybersecurity Plan.
The Coast Guard notes that the roles and responsibilities of the
CSO are clearly outlined in existing regulations, and the roles and
responsibilities of the CySO are clearly outlined in this final rule.
Any interaction between the CySO and other security positions should be
determined by the owner or operator at the U.S.-flagged vessel,
facility, OCS facility, or organizational level, as appropriate. As
long as statutory and regulatory requirements are met, it is the
discretion of each owner or operator of U.S.-flagged vessel, facility,
or OCS facility to determine how their employees interact.
One commenter requested that specific criteria be developed for the
CySO position to develop training programs. The commenter requested
that Government-funded training courses be considered for existing CSOs
to be trained for the CySO designation. This commenter also requested
that third-party training programs be eligible for Federal grant
programs, such as FEMA's Port Security Grant Program.
The Coast Guard notes that the criteria in Sec. 101.625 is
sufficient as baseline requirements for the CySO position. When
determining the baseline requirements for the CySO, we looked at
similar jobs and pulled those requirements that suited the need. The
Coast Guard does not currently have plans to develop and fund training
programs for the CySO position. We advise affected entities that they
are welcome to work with FEMA, local port partners, their Area Maritime
Security Committee, and others, as appropriate, in requesting support
through any Federal grant program in support of maritime security. The
decision on what is eligible for, and would receive such grant funding,
is not made by the Coast Guard.
One commenter requested clarification on the specifics of
cybersecurity inspections that are the responsibility of the CySO,
including how they will be conducted.
Coast Guard inspections are intended to verify compliance with an
approved Cybersecurity Plan. When arranging for and during the
inspection, it is the responsibility of the CySO to ensure that any
disruptions to operations are minimized. The cybersecurity portion of
the inspection will follow standard inspections procedures, similar in
methodology to physical facility inspections, in verifying compliance
with the regulations. The Coast Guard may consider future policy
development, if needed, on the conduct of cybersecurity inspections.
One commenter recommended mandatory training and certification for
the position of the CySO. For vessel CySOs, one commenter suggested
implementing a certificate of proficiency similar to those required for
other roles under the International Convention on Standards of
Training, Certification, and Watchkeeping for Seafarers.
After reviewing the requirements for designating a CySO, the Coast
Guard is not including additional requirements or certifications at
this time. This final rule provides minimum baseline requirements
necessary for the identification of this role, and the Coast Guard does
not intend to place too prescriptive requirements that could impede
stakeholders' ability to identify suitable candidates. Owners and
operators are welcome to add additional requirements on their own, so
long as they meet compliance with these regulations.
Some commenters questioned why there are physical security controls
under the CySO when these are under the existing purview of VSOs, FSOs,
and OCS FSOs.
The Coast Guard notes that physical security controls for IT and OT
systems are listed in Sec. 101.630(c)(8) as being part of the
Cybersecurity Plan, which is developed and implemented by the CySO.
These regulations do not preclude the VSO, FSO, or OCS FSO from
performing their required roles and responsibilities and helping to
inform the Cybersecurity Plan, or otherwise working with the CySO in
the completion of security-related requirements.
One commenter expressed concern that the roles and responsibilities
of the CySO are too complex for just one person, and often these
functions are performed by a team or multiple employees.
The Coast Guard notes that the CySO is required to ``ensure'' that
certain actions are conducted and allows for them to work with the team
and others who assist in carrying out those functions. The CySO is also
able to assign security duties as needed.
One commenter stated that the requirements under Sec. Sec.
101.625(d)(8) and 101.625(d)(9) were very similar and could be
combined. The requirements in question are to ensure the cybersecurity
awareness and vigilance of personnel through briefings, drills,
exercises, and training and to ensure adequate cybersecurity training
of personnel.
The Coast Guard agrees with this comment and removed ``through
briefings, drills, exercises, and training'' from Sec. 101.625(d)(8)
to provide CySOs with more flexibility, and less prescriptive measures,
on how they would meet the requirements, and also alleviate redundancy
in the language between paragraphs (d)(8) and (d)(9).
Several commenters requested that the Coast Guard remove the
requirement for cybersecurity inspections to be arranged in conjunction
with U.S.-flagged vessel, facility, and OCS facility inspections, as a
U.S.-flagged vessel, facility, or OCS facility might feel that they
need to conduct the cybersecurity inspection separately due to factors
such as availability of the CySO.
[[Page 6317]]
In this final rule, the Coast Guard revised Sec. 101.625(d)(6),
which requires the CySO to arrange for the cybersecurity inspection to
reflect that cybersecurity inspections may be held in conjunction with
physical security inspections, to increase flexibility and decrease
burden, for the U.S.-flagged vessel, facility, or OCS facility. The
Coast Guard notes that scheduling inspections is ultimately up to the
local COTP or the Officer in Charge, Marine Inspections (OCMI) in
working with the regulated U.S.-flagged vessel, facility, or OCS
facility.
F. Comments Related to the Cybersecurity Plan
Several commenters noted that there is a lack of clarity whether
one Cybersecurity Plan for a fleet is acceptable, or if each vessel and
facility requires its own Plan.
Each regulated U.S.-flagged vessel, facility, and OCS facility is
required to develop and maintain a Cybersecurity Plan.
Multiple commenters noted a lack of reference to ASPs. One
commenter also recommended that the Coast Guard allow the Passenger
Vessel Association (PVA) specific ASP. As noted in Sec. 101.660 of
this final rule, the Coast Guard will allow owners and operators to use
ASPs to comply with this final rule. We added additional text to Sec.
101.660 to clarify that ASP provisions apply to cybersecurity
compliance documentation. Given the unique nature of cybersecurity
threats, vulnerabilities, and mitigation strategies, owners and
operators must ensure that use of ASPs includes those items specific to
each U.S.-flagged vessel, facility, and OCS facility. The Coast Guard
will evaluate each ASP's cybersecurity component to ensure full
regulatory compliance with each applicable requirement, including the
PVA-specific ASP.
One commenter recommended that Sec. 101.630(a) be amended to add
ASPs and OCS FSPs to the requirement for CySOs.
The Coast Guard partially concurs with the recommendation and added
references to OCS FSPs in Sec. 101.630(a) to clarify that OCS FSPs
follow the same requirements as VSPs and FSPs. However, we do not find
it necessary to add the term ``Alternative Security Program'' because
ASPs are already included as an option in Sec. 101.660 and are also
expressly addressed in 33 CFR parts 104, 105, and 106.
Some commenters stated that the Cybersecurity Plan should include
additional security measures for the vessel, facility, or OCS facility
to take in cases of increased MARSEC levels. For instance, MARSEC Level
3 Cybersecurity Controls may involve reviewing and authorizing all
remote access sessions; removing unpatched systems from direct internet
access; isolating or shutting down nonessential systems; requiring
multifactor authentication for all accounts; and reporting suspicious
activity to stakeholders, ISACs, CISA, and the Coast Guard.
Cybersecurity MARSEC actions should be specific, achievable, and
deliver meaningful security benefits. This enables the vessel or
facility to reduce vulnerabilities and enhance resilience, even for
short periods. They also suggested that the Cybersecurity Plan should
encourage owners or operators to implement additional measures anytime
credible threat information is known.
This final rule does not prevent a U.S.-flagged vessel, facility,
or OCS facility from adding such language or additional measures to
their Cybersecurity Plan, should they desire. However, the Coast Guard
did not add requirements for increased MARSEC levels in this final rule
and will not mandate this language because of multiple factors. First,
it is difficult to set MARSEC conditions solely based on cybersecurity
threats. Cybersecurity threats are constantly evolving, with new
vulnerabilities, attack vectors, and tactics emerging regularly. This
makes it challenging to establish static threat conditions that can
effectively address all potential scenarios. Additionally,
cybersecurity threats can originate from various sources, including
nation-states, cybercriminals, insiders, hacktivists, and others. Each
source has different capabilities, motivations, and methods, requiring
tailored threat conditions that are difficult to generalize. Even if we
were to set MARSEC conditions based on cybersecurity threats, it would
be challenging to list one-size-fits-all requirements that would work
for a wide array of vessels and port facilities, each with different
risk profiles and operational conditions. For example, vessels may face
different types of cyber-attacks depending on their routes, locations,
cargoes, and onboard technologies. Imposing blanket cybersecurity
requirements based on MARSEC conditions may not be practical in these
cases.
Furthermore, creating specific requirements for each MARSEC level
would necessitate constant updates and adjustments to keep pace with
the dynamic nature of cyber threats. This would place a significant
administrative burden on both the Coast Guard and the maritime
industry. Instead, we are maintaining a flexible and adaptive approach
to cybersecurity in this final rule that allows for tailored responses
based on the unique circumstances of each U.S.-flagged vessel,
facility, and OCS facility.
One commenter inquired about how a CySO would respond to elevations
in MARSEC levels.
The regulations in this final rule do not tie these minimum
baseline requirements to elevation in enforcement due to MARSEC level.
Guidance on responding to elevated MARSEC levels would come in a
separate Coast Guard directive.
One commenter questioned the use of ``major amendment'' when
requiring a resubmission of a Cybersecurity Plan in the regulations and
suggested further clarification or definition would be needed. Another
commenter expressed appreciation for the flexibility for each owner or
operator to determine what constitutes a ``major amendment'' as
appropriate for their organization based on types of changes to their
security measures and operational risks,'' but cautioned that this
creates its own uncertainty. The commenter requested that in the final
rule, the Coast Guard be more explicit or provide thresholds or
examples of what it considers ``major.'' The commenter also suggested
that factors such as cost and operational burden should be considered
(for example, more operators and employees or more equipment), and that
the threshold may be a percent of the current budget for cybersecurity
since each company will be different. The commenter reasoned that this
threshold would also provide clarity for Coast Guard personnel. Another
commenter suggested that such further clarification would be similar to
the Coast Guard's clarification of ``major conversion'' for materiel
requirements. Similarly, a commenter stated that the proposed 30-day
notice to the Coast Guard for approval of any proposed major amendments
to the Cybersecurity Plan would be overly burdensome and would likely
cause the Cybersecurity Plan to be in a constant state of flux because
of waiting for approvals and revisions, or could unnecessarily delay
security enhancements that may trigger a required audit or approval
cycle.
The Coast Guard recognizes these concerns. The Coast Guard
considered the suggestion to define ``major amendment'' much like the
Coast Guard has done with ``major conversion'' for materiel
requirements but does not agree with it. Rather than define the term
``major amendment,'' we removed it from Sec. Sec. 101.625(d)(13) and
101.630(e)(2) in this final rule. This removes any ambiguity about
which
[[Page 6318]]
amendments require resubmission of the Cybersecurity Plan. It is also
consistent with our physical security requirements in 33 CFR parts 104,
105, and 106, which do not specify that only ``major'' amendments must
be sent to the Coast Guard for approval. See 33 CFR 104.415(a)(2),
105.415(a)(2), 106.415(a)(2). Removing the term ``major'' allows
stakeholders to address amendments uniformly across both physical
security and cybersecurity requirements. We retained the requirement to
submit proposed amendments within 30 days but note that Sec.
101.630(e)(2)(i) provides that nothing in this section should be
construed as limiting the owner or operator of the U.S.-flagged vessel,
facility, or OCS facility from the timely implementation of such
additional security measures not enumerated in the approved VSP, FSP,
or OCS FSP as necessary to address exigent security situations.
Some commenters recommended that the Coast Guard strike the
requirements, or make modifications to the requirements, related to an
owner or operator's submission of proposed amendments to the
Cybersecurity Plan. Some commenters suggested tailoring this to
``material'' or ``significant'' changes.
In this final rule, the Coast Guard did not remove this
requirement, as it is consistent with existing practice and 33 CFR
parts 104, 105, and 106. However, we revised Sec. 101.630 to remove
ambiguity by eliminating the term ``major amendment,'' as well as the
associated requirement that changes to the Cybersecurity Plan must be
proposed to the Coast Guard before implementation, as discussed above.
We added language to Sec. 101.630(e)(2)(i) to address situations when
an owner or operator may feel that security measures are needed while
an amendment is under review by the Coast Guard.
One commenter stated that it was not clear to the owner, operator,
or CySO whether they submit their Cybersecurity Plan to the COTP or
OCMI, or to the U.S. Coast Guard's MSC.
Under Sec. 101.625(d)(13), and according to Sec. 101.630(d), the
CySO must ensure the owner or operator submits the Cybersecurity Plan
for approval to the cognizant COTP or OCMI for facilities or OCS
facilities, or to the MSC for U.S.-flagged vessels.
One commenter suggested removing the requirement that the CySO
include ``a letter certifying that the plan meets the requirements of
this subpart must accompany the submission'' under Sec. 101.630(d).
The Coast Guard agrees with this recommendation, as submitting the
Cybersecurity Plan itself qualifies as certification that the Plan
meets all the requirements. The Coast Guard revised Sec. 101.630(d) to
remove the requirement to send this letter.
One commenter requested clarification on whether the Cybersecurity
Assessment and Cybersecurity Plan could be done separately from the
existing requirements for conducting an Assessment and Plan according
to 33 CFR parts 104, 105, and 106. Additionally, they sought
clarification on how this final rule affects Sec. 105.305(c)(1)(iv)
for existing security measures and procedures relating to services and
utilities, and Sec. 105.305(d)(2)(v) for radio and telecommunication
systems, including computer systems and networks.
This final rule allows for regulated U.S.-flagged vessels,
facilities, and OCS facilities to choose whether to incorporate
Cybersecurity Assessments and Cybersecurity Plans into their existing
assessments and plan submissions, or to submit them as separate
documents. Nothing in this final rule is meant to replace existing
regulations, and regulated entities should ensure compliance with all
applicable regulations. In the event there is overlap, entities may
identify where requirements are being simultaneously satisfied. We
revised the definition in Sec. 101.615 of Cybersecurity Plan and the
reference to Plan submission in Sec. 101.630(a) to clarify that
separate submissions are acceptable.
Several commenters recommended adopting various specific standards,
such as the NIST CSF, NIST's special publications, the Defense
Counterintelligence and Security Agency's National Industrial Security
Program, DoD's Cybersecurity Maturity Model Certification program 2.0,
IEc 62443, IMO, ISO/IEc 17020, the International Association of Ports
and Harbors' Cybersecurity Guidelines for Ports and Port Authorities,
the International Association of Classification Societies' (IACS)
Unified Requirements (UR) E26 and E27, the North American Electric
Reliability Corporation's CIP-013, and the American Bureau of
Shipping's (ABS) Cyber Resilience Program for vessels. Other commenters
inquired about leveraging third-party inspection standards, such as
ISO/IEc 17020. One commenter stated that this final rule's minimum
cybersecurity requirements and the ABS' Cyber Resilience Program for
vessels both leverage the NIST CSF and IEc 62443 and appear to be
directing the same efforts under the same framework. They inquired
about ABS and Coast Guard collaboration and alignment on these efforts.
The Coast Guard intentionally created this final rule to allow
flexibility in implementing a CSF. In developing this final rule, the
Coast Guard leveraged CISA's Cyber Performance Goals, which themselves
are mapped to NIST's CSF, but this does not preclude owners and
operators of U.S.-flagged vessels, facilities, and OCS facilities from
using other resources. Owners and operators may use NIST's standards or
other standards and frameworks to help inform how they comply with the
mandatory requirements in this final rule. This final rule provides
minimum baseline requirements, but we encourage affected entities to
include items in their Cybersecurity Plan that they deem in their best
interest to enhance cybersecurity. Each Plan will be evaluated by the
cognizant COTP or the OCMI for facilities and OCS facilities, and the
MSC for U.S.-flagged vessels to ensure it meets the Coast Guard
requirements.
The Coast Guard acknowledges that there are many third party and
international standards and frameworks that could be used to meet the
regulations. The owner or operator may use ABS or other third-party
frameworks to assist them in meeting the Coast Guard's requirements,
though this approach does not guarantee automatic acceptance or
approval by the Coast Guard. However, the Coast Guard retains all
statutory functions under MTSA and international responsibilities under
the International Ship and Port Facility Security Code. At this time,
we do not intend to delegate any functions to third parties under this
final rule.
One commenter stated that the current format, which closely follows
the regulatory format of 33 CFR parts 104, 105, and 106, was not well-
suited for cybersecurity requirements, and that something more in line
with NIST's Framework would be better.
The Coast Guard has chosen to articulate the cybersecurity
requirements within 33 CFR part 101 because these regulations impact
U.S.-flagged vessels, facilities, and OCS facilities collectively. This
format is presented in a more organized and accessible manner to the
maritime partners who are familiar with the MTSA regulations.
Additionally, Sec. 101.650 lists cybersecurity measures that are based
on CISA's CPGs, which are aligned with NIST's CSF. This approach
ensures clarity and facilitates easier compliance, allowing
stakeholders to view all pertinent
[[Page 6319]]
cybersecurity regulations in a single, consolidated section.
One commenter felt that certain areas of the NPRM were too
prescriptive, and that the Coast Guard should take an outcome-based
approach of the appropriate NIST CSF function.
Pursuing an outcome-based approach was not feasible based on
necessary timelines to develop and implement cybersecurity measures,
and the Coast Guard feels that its rules strike the best balance of
prescriptiveness because they are based on existing MTSA regulations
and existing interagency guidelines generally accepted by industry. We
recognize that some stakeholders may feel the requirements are too
prescriptive, while others commented that the requirements were not
prescriptive enough. The cybersecurity measures listed in Sec. 101.650
are based on CISA's CPGs, which are performance-based goals and
recommended actions and align with the NIST CSF. This approach ensures
clarity and facilitates easier compliance, allowing stakeholders to
view all pertinent cybersecurity regulations in a single, consolidated
section. The Coast Guard acknowledges that there are many third-party
and international standards and frameworks that could be used to meet
the regulations. Owners and operators of U.S.-flagged vessels,
facilities, and OCS facilities may base their Cybersecurity Plan on a
standard or framework that they prefer and explain how the requirements
of this final rule are met.
One commenter requested that the Coast Guard update language in the
regulations to clarify that the CySO does not conduct audits but is
limited to ensuring audits are conducted. Another commenter asked for
clarification on the scope of the audit the CySO must perform.
The Coast Guard agrees with this suggestion and revised Sec.
101.630(f)(2) in this final rule to clarify that the CySO does not
conduct the audit themselves and that the CySO must only ensure that an
audit is conducted. The Coast Guard did not add the additional language
to the regulatory text defining the term audit as it allows for
flexibility in how the regulated entity conducts their audit. The
regulatory text in Sec. 101.630(f) is in line with existing audit
requirements in 33 CFR parts 104, 105, and 106.
One commenter expressed support for Cybersecurity Assessments being
part of the Cybersecurity Plan renewal every 5 years when there is a
change in vessel or facility ownership, or there are major amendments
to the Cybersecurity Plan. However, they disagreed with requiring a
Cybersecurity Assessment annually, citing that annual Cybersecurity
Assessments are excessive for small businesses.
The Coast Guard did not make changes to the frequency required for
Cybersecurity Assessments. We believe that annual Cybersecurity
Assessments are important for regulated entities to continually monitor
for cybersecurity developments pursuant to Sec. 101.650(e). The
cybersecurity environment can change so rapidly that conducting a
Cybersecurity Assessment less frequently than annually could lead to
vulnerabilities going unnoticed, with potentially drastic consequences.
Moreover, the NIST guidelines state that risk assessments such as this
should be conducted no less than annually. We expect that entities with
a smaller or less complex IT and OT footprint will have shorter
Cybersecurity Assessments with annual assessments.
G. Comments Related to Drills and Exercises
We received many comments about requirements for drills and
exercises. Several commenters asked about the frequency and scope of
drills and exercises. Some commenters from regulated entities noted
that quarterly drills and annual exercises seemed excessive for
smaller, seasonal operators and low-risk MTSA-regulated entities. These
commenters suggested that quarterly drills and annual exercises would
create an excessive time and resource burden on those entities,
especially those with limited cyber exposure. One commenter noted that
the biggest security threats facing a domestic passenger vessel remain
a physical breach of security and suspicious individuals or activities
associated with criminal activity and not cyber activities.
Other commenters referenced existing drills and exercise
requirements for MTSA-regulated entities and recommended that the Coast
Guard allow for overlap with new cybersecurity drills and exercises and
existing required drills and exercises. Commenters also suggested that
drills should be conducted at the organizational level rather than at
the vessel or facility level. One commenter asked if drills are
expected to be a comprehensive test of the Cybersecurity Plan, meaning
the entirety of cybersecurity capabilities outlined in the
Cybersecurity Plan. Another commenter expressed confusion regarding
exercise requirements and tabletop simulation. One commenter stated
that separate drill requirements were excessive and unnecessary.
Another commenter requested further explanation on required crew
involvement. The commenter explained that onboard personnel have little
to no involvement in cyber-specific drills and recommended the Coast
Guard provide further explanation on the intent and extent of crew
involvement with these drills.
The Coast Guard believes that, while different stakeholders have
varying IT and OT footprints, it remains critical to incorporate some
level of drills and exercises to ensure that owners, operators, and
regulated entities are prepared to prevent and respond to increasing
cybersecurity threats. After considering these comments, in this final
rule, we have adjusted the frequency of conducting drills from
quarterly to twice each calendar year. We believe that two drills
annually will ensure sufficient proficiency with the procedures, while
allowing for a regulated entity to conduct additional drills if they
choose to, and we understand how quarterly drills and exercises could
be too frequent for some vessel operations, as noted by some
commenters. The Coast Guard felt that one drill annually would not be
sufficient, while requiring three drills annually would not be a
significant decrease from the original requirement of four drills
annually. We also clarified that cybersecurity drills required under
this part may be performed in conjunction with existing MTSA-required
drills and exercises. We decided to maintain annual exercises but will
also similarly allow exercises to be performed in combination with
existing MTSA-required exercises.
While owners and operators are authorized to conduct drills at the
organization level, each vessel, facility, and OCS facility has unique
risks and operators at the vessel, facility, and OCS facility level
should be experienced in addressing those unique vulnerabilities and
prepared to respond to such incidents appropriately. This final rule
states that drills should test individual elements of the Cybersecurity
Plan and, therefore, are not a comprehensive test of the entirety of
cybersecurity capabilities. The Coast Guard feels that tabletop
exercises, if selected by the regulated entity to comply with our
requirements, can serve as a full test of the CSF. This is similar to
tabletop exercises under Sec. Sec. 104.230(c)(2)(ii),
105.220(c)(2)(ii), and 106.225(c)(2)(ii), as participants can discuss
and simulate the implementation of specific measures found within the
Cybersecurity Plan.
The Coast Guard believes that this final rule provides the
necessary level of detail on the requirements on the
[[Page 6320]]
conduct and elements of drills and exercises. This final rule allows
each regulated entity the flexibility to determine the specific drills
and exercises they wish to conduct. Additionally, individual
stakeholders can determine the level of crew involvement in drills and
exercises based on individual crew and employee roles and
responsibilities within the organization.
Furthermore, the Coast Guard understands that each U.S.-flagged
vessel, facility, and OCS facility operates facing different
cybersecurity risks. Owners and operators may seek an exemption or
waiver using the procedures in Sec. 101.665. This flexibility is
intended to accommodate varying levels of risk and operational needs
across different U.S.-flagged vessels, facilities, and OCS facilities.
H. Comments Related to Records and Documentation
One commenter noted that the 2-year recordkeeping mandate could be
quite costly compared to its value proposition.
The 2-year recordkeeping requirement is consistent with the
existing regulations and aligns with incorporating the Cybersecurity
Plan into a VSP, FSP, or OCS FSP if a regulated entity chooses to
include the Cybersecurity Plan as part of their VSP, FSP, or OCS FSP.
The Coast Guard recognizes that there may be varied costs associated
with record keeping but expects that these additional records would be
maintained similar to the existing records and could prove important in
the event of a future cyber incident.
One commenter requested clarification on what the Coast Guard was
not obtaining from covered entities' use of the Cyber Annex--which
supports an FSP and OCS FSP--under the MCAAG.
The Cyber Annex was intended to provide only initial cyber guidance
based on the regulations available at the time. Moreover, the MCAAG is
only a voluntary ``how-to'' guide and is not, itself, a regulation. The
Coast Guard recognizes that further actions are needed to better secure
the MTS from cyber threats and vulnerabilities. This final rule is the
next step for a new suite of baseline requirements specific to
cybersecurity that go beyond what was addressed previously in the
regulations and earlier guidance documents.
Some commenters expressed concerns over omitting FSP and OCS FSP
Cyber Annexes in the new regulatory framework and the implications for
companies that have already invested resources in developing these
annexes.
The existing requirement for the owners and operators of MTSA-
regulated facilities and OCS facilities to analyze vulnerabilities
associated with radio and telecommunication equipment, including
computer systems and networks, allows an owner or operator to
demonstrate compliance in a variety of formats. The information may be
provided in a separate Cyber Annex to the FSP or OCS FSP, or
incorporated into the FSP or OCS FSP together with the physical
security measures. Regulated entities who chose to create a separate
Cyber Annex may use the content of the existing Cyber Annex to help
develop a Cybersecurity Plan that reflects all cybersecurity measures
required in subpart F, as appropriate, to mitigate risks identified
during the Cybersecurity Assessment. As noted in Sec. 101.630(a), the
Cybersecurity Plan may be included in an existing VSP or FSP or VSP or
FSP annex. This final rule amended Sec. 101.630(a) to clarify that the
Cybersecurity Plan may also be included in an OCS FSP, part of an
approved ASP, annex to the OCS FSP, or may be provided in a separate
submission (but is still considered a part of the VSP, FSP, or OCS
FSP).
The Coast Guard believes that this final rule provides sufficient
information for regulated entities to comply with requirements for a
Cyber Incident Response Plan. The term is defined in Sec. 101.615, and
the requirements for inclusion are described in Sec. Sec.
101.620(b)(6), 101.625(d)(4), and 101.650(g)(2).
One commenter noted that some ship OT systems have cybersecurity
requirements as mandated by the DoD and noted that some required
compliance elements pose a documentation duplication effort. They asked
what exceptions would be considered for those having to meet DoD
requirements.
The Coast Guard recognizes that cybersecurity requirements of other
Federal agencies may be similar to these requirements. However, due to
the specific nature of maritime cybersecurity considerations while
operating in the MTS, the Coast Guard requires documentation
specifically showing compliance with these regulations. At this time,
we are not considering blanket compliance exemptions for regulations of
other Federal agencies. Owners or operators may use this similar, but
separate, compliance to inform their compliance with Coast Guard
regulations.
I. Comments Related to Communications
One commenter noted that it was important to foster open
communication and explore diverse solutions for information sharing and
collaboration across stakeholders.
The Coast Guard agrees and encourages interested stakeholders to
communicate and explore information-sharing solutions. These
regulations are intended to establish certain baseline requirements
that establish a common regulatory framework for all stakeholders to
have those discussions.
J. Comments Related to Incident Reporting
The Coast Guard received numerous comments in response to our
request for input on the reporting of cybersecurity incidents and
whether those reports should be made to the Coast Guard through the NRC
or to CISA. Commenters were split between the two options, with some
citing the existing requirement to report security incidents to the NRC
as a reason to maintain this process, while others cited the proposed
requirements of CISA's CIRCIA rulemaking project. One commenter
suggested that reporting to CISA be updated to a 72-hour requirement,
whereas other comments suggested that the reporting be delayed until a
cybersecurity incident has been investigated by an entity. Another
commenter suggested that Global Positioning System (GPS) jamming and
spoofing should be included as incidents that require mandatory
reporting. One commenter suggested reporting to the Defense Cyber
Crimes Center (DC3)/DoD-Defense Industrial Base Collaborative
Information Sharing Environment (DCISE). One commenter suggested that
reporting should not be directed to the NRC due to the NRC being short-
staffed and not suited to receive the incident reports. One commenter
noted that CISA is already in a position to catalog such reports and
share critical information with those impacted in both private industry
and Government sectors, as this is part of their current mission.
One commenter cited the various reporting requirements of CIRCIA's
proposed rulemaking,\55\ the Coast Guard's NPRM, Executive Order 14116
(Amending Regulations Relating to the Safeguarding of Vessels, Harbors,
and Waterfront Facilities of the United States), along with the Coast
Guard's NVIC 02-24 and Policy Letter 08-16. The commenter requested
that the Coast
[[Page 6321]]
Guard work with CISA, who is less familiar with the maritime industry,
and deconflict the reporting requirements. In response to whether the
Coast Guard should require reporting of ransomware payments, one
commenter stated that they did not feel this would be wise. Other
commenters stated that they felt that ransomware and related payments
should indeed be reported. One commenter expressed concern with
reporting of incidents or KEVs between CySOs, noting that information
specific to a company should not be shared with other companies.
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\55\ 89 FR 23644, April 4, 2024.
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One commenter asked how the Coast Guard intended to share reported
information with all regulated entities. Another commenter similarly
suggested that the Coast Guard establish procedures within these
regulations for the reporting of Government incidents to other parties.
One commenter expressed concern that NRC personnel who will take
reports of cybersecurity incidents might not be specialized in
cybersecurity or have the appropriate knowledge and experience;
therefore, NRC personnel would be unequipped to take reports of
cybersecurity incidents. One commenter expressed concern about the
limitations for vessels when reporting an incident to the NRC via
telephone. The commenter noted that vessels might have limited internet
connections and requested that the Coast Guard allow alternative
communication methods such as very high frequency (VHF) or
International Maritime Satellite (INMARSAT) as options for reporting to
the NRC.
With this final rule, the Coast Guard is expecting reportable cyber
incidents be reported to the NRC only by those entities not already
required to report cyber incidents under 33 CFR 6.16-1, as amended by
Executive Order 14116. Title 33 of the CFR, part 6.16-1, requires the
reporting of evidence of sabotage, subversive activity, or an actual or
threatened cyber incident involving or endangering any vessel, harbor,
port, or waterfront facility, which includes all current MTSA-regulated
U.S. vessels and facilities regulated by this rule. 33 CFR part 6.16-1
does not apply to OCS facilities regulated under 33 CFR part 106.
Therefore, those OCS facilities are subject to the reporting
requirements of this rule. Reporting to the NRC by these entities is in
line with established requirements and timelines, including under Sec.
101.305. It also enables a timely response to incidents by the Coast
Guard, as well as partner agencies with whom the NRC shares incident
reports immediately upon receipt. To minimize duplicative reporting
from the same entity, the requirement to report under this final rule
does not apply if the entity has reported the cybersecurity incident to
the Coast Guard pursuant to 33 CFR 6.16-1, highlighting that because
OCS facilities are not subject to the reporting requirements in 33 CFR
part 6, OCS facilities must report cyber incidents to the NRC under
this final rule.
Entities subject to reporting cybersecurity incidents under 33 CFR
6.16-1 must also report to the FBI and CISA, and they may also be
subject to reporting to CISA under CIRCIA once the final rule is
published and effective. The Coast Guard and CISA are committed to
minimizing the burden on entities and will assess the need for
additional policy guidance regarding the content of reports and the
mechanism for reporting to satisfy applicable requirements in this
part, Sec. 101.305, 33 CFR part 6, and the CIRCIA final rule to be
issued by CISA. The Coast Guard and CISA are committed to proactively
collaborating and issuing guidance to entities to harmonize cyber
reporting requirements to the extent possible and to clarify procedures
for reporting cyber incidents to the Coast Guard and to CISA,
respectively under current regulations, as well as in the future once
CIRCIA's regulations take effect.
Cyber incident reports to the Coast Guard and CISA serve
complementary but distinct operational purposes that are consistent
with each agency's respective missions and authorities. Reports to the
Coast Guard ``without delay'' under this part, Sec. 101.305, and 33
CFR part 6 serve as an immediate notification to support the rapid
response to events that may result in a TSI. Notifications to the NRC
are immediately shared with CISA, FBI, and other relevant agencies to
allow for the earliest mobilization of response and resources. Cyber
incidents can quickly escalate and evolve, and any delays to the
reporting can affect the ability to successfully respond to an
incident. Reporting to the NRC without delay allows the Coast Guard
COTPs to understand the potential risks of an incident and apply their
authority to protect the MTS, including the use control and compliance
measures as provided at Sec. 101.410. In many cases, the goal of the
initial response is to ensure public safety, mitigate the consequences
of disastrous events, or prevent cascading impacts on critical
infrastructure or the public. This includes but is not limited to
minimizing loss of life and property, preventing environmental
disasters or other accidents at sea, assisting in the recovery of
critical IT or OT systems at ports or other facilities, defending the
sovereignty of the United States, and facilitating legitimate use of
maritime waterways. After the initial response, the notifications
enable the Coast Guard to evaluate the broader risks to the MTS based
on the specific vulnerability.
Separate from the Coast Guard's authorities under MTSA, but
consistent with what Congress has envisioned in CIRCIA, reporting
``covered cyber incidents'' to CISA under its future regulation within
72 hours of having a reasonable belief that such an incident occurred
(and ransom payments resulting from a ransomware attack within 24 hours
of the payment being made) serves a complementary but distinct
operational purpose from Coast Guard reporting requirements. As the
lead agency for Federal cybersecurity and the national coordinator for
critical infrastructure risk and resilience, CISA is well-positioned to
support Coast Guard cyber related operations and address cross-sector
cyber risk more broadly under its forthcoming CIRCIA regulations. By
collecting more technical information via the CISA incident report then
was collected by the NRC in the initial report and cross-referencing
that information with other incidents reported in other critical
infrastructure sectors, CISA can support the Coast Guard's operations,
assist other entities in the MTS in mitigating exploited
vulnerabilities, quickly identify other entities that may be at risk
across critical infrastructure sectors, automate sharing information
across the public and private sectors to protect against similar
incidents in the future, and counter sophisticated cyber campaigns
earlier.
CISA's further sharing of reported threat activity and impact
information (for example, techniques, tactics, and procedures used to
cause physical, functional, or informational impacts) will enable other
Federal and non-Federal stakeholders to more effectively allocate
resources and inform the development of more secure products.
Furthermore, reporting incidents to CISA under the CIRCIA final rule
will improve the U.S. Government's collective visibility into the
national cyber threat landscape and close critical information gaps.
The Coast Guard does not specify specific incident types in this
final rule but relies on the definition of reportable cyber incidents,
as well as existing definitions for breaches of security and
transportation security incidents, as defined in Sec. 101.105, and
suspicious activity as described in Sec. 101.305.
The Coast Guard through this final rule is not requiring reporting
to any entity outside of the NRC, such as DC3
[[Page 6322]]
or DCISE, as the NRC already has an established process and
relationship with the regulated entities affected by this final rule.
The Coast Guard disagrees that the NRC would be unable to
accommodate reported cybersecurity incidents. The NRC already receives
reports of cybersecurity incidents according to the reporting
requirements of Sec. 101.305, which includes cybersecurity.
The Coast Guard agrees that reporting requirements, including those
of existing MTSA regulations, this final rule, and the recent Executive
Order 14116 updating 33 CFR 6.16-1 on cybersecurity, should be
harmonized to the extent practicable and in accordance with the law.
Policy Letter 08-16 was superseded by NVIC 02-24, which provides
guidance on existing MTSA reporting requirements as well as those
addressed by the recent Executive Order. The Coast Guard will work with
partner agencies to maximize harmonization and alignment with this
final rule to the extent practicable by assessing the need for new
policy guidance regarding reporting requirements under this final rule,
33 CFR 6.16-1, and the CIRCIA final rule to be issued to CISA.
The definition for a reportable cyber incident provides regulated
entities with sufficient information to determine when to report a
ransomware incident. The Coast Guard did not add a requirement for the
reporting of a ransomware payment. Note that a separate requirement to
report ransom payments to CISA may be included in the forthcoming
CIRCIA final rule issued by CISA.
In Sec. 101.650(e)(3)(iii), this final rule requires each owner or
operator of a regulated entity to maintain a method to share threat and
vulnerability information with external stakeholders, but does not
require sharing information with private companies that have no
relationship with the regulated entity or do not have a role in
facilitating cybersecurity response or the cybersecurity posture of the
regulated entity.
The requirements in this final rule for reporting cybersecurity
incidents apply to U.S.-flagged vessels, facilities, and OCS facilities
and detail how to report to the Government. This final rule does not
establish requirements for the Government to share information with the
public, and the Coast Guard does not intend to immediately share
cybersecurity incident reports from a regulated entity with other
private stakeholders. If needed, the Coast Guard or other agencies can
develop bulletins, advisories, or other guidance to address
cybersecurity threats, risks, and vulnerabilities that may be
discovered. Similarly, this final rule does not establish processes or
procedures for the Government to report its own incidents to the
public, as this final rule only addresses requirements for those
entities addressed under the Applicability section in Sec. 101.605.
The Coast Guard disagrees with any suggestion that NRC personnel
would be unable to take a report of a cybersecurity incident. NRC
personnel stand watch 24 hours a day, 7 days a week, receive
cybersecurity incident reports according to Sec. 101.305, and have
demonstrated the capability to collect the necessary required
information made in an initial incident report. Upon receipt of the
incident report, the NRC immediately shares the information with the
Coast Guard Cyber Command (CGCYBER), DHS, CISA and other relevant
Government agencies that have the specialization, knowledge, and
experience to conduct any further follow up after the initial report.
The Coast Guard is not prescribing an alternative reporting process
through VHF or INMARSAT, but this final rule does not limit the
reporting of reportable cyber incidents by telephone only and affirms
reports can be made by any means necessary. Vessels without
connectivity are encouraged to use alternative methods to contact their
designated person ashore to assist with reporting the incident without
delay.
One commenter suggested that a vessel's RO be the one to report
cyber issues to the Coast Guard.
The Coast Guard disagrees with this suggestion. This final rule
provides sufficient clarification as to which entities should be
reporting in each situation (for example, an assessment, audit, or a
reportable cyber incident), and is consistent with existing MTSA
regulations.
One commenter recommended that organizations develop tiered levels
of cyber incident events and incidents in their Cyber Incident Response
Plan.
The Coast Guard agrees that owners and operators of U.S.-flagged
vessels, facilities, and OCS facilities should take the approach that
best suits their needs when developing their Cyber Incident Response
Plan. However, the Coast Guard does not prescribe any specific
requirements in this final rule. While a tiered approach to cyber
incident reporting can provide structure, it may inhibit the
adaptability and responsiveness that are crucial for effectively
managing cyber incidents in a rapidly evolving threat landscape. The
Coast Guard prefers owners and operators to customize their incident
response plans to meet their unique needs and requirements.
K. Comments Related to Cybersecurity Measures (Sec. 101.650)
One commenter requested that Sec. 101.650 for cybersecurity
measures include a caveat that, in situations when security measures
might create safety risks, then the safety concern is to be
prioritized.
The Coast Guard appreciates the concern for safety, and we do not
intend for these regulations to conflict with other Coast Guard
regulations for safety. The Coast Guard does not foresee a degradation
in physical safety caused by these cybersecurity regulations and
believes it would generate confusion if an undefined safety-based
caveat were included. If owners or operators have concerns with
specific application of the cybersecurity regulations, the Coast Guard
encourages those owners and operators to discuss with the cognizant
COTP, OCMI, or MSC, as appropriate. This final rule provides procedures
for requesting equivalencies or waiver from the Coast Guard, if
appropriate, in Sec. 101.665.
One commenter suggested that cybersecurity measures be incorporated
for heightened threat periods.
The Coast Guard has issued these regulations as baseline
cybersecurity requirements, as cybersecurity can pose a risk at all
times, even under normal threat periods. The Coast Guard encourages
owners or operators of U.S.-flagged vessels, facilities, and OCS
facilities to address and incorporate cybersecurity measures for
heightened threat periods, if desired and as best fits their needs. The
Coast Guard is also able to issue cybersecurity guidance or directives
as needed, if there are specific threats and incidents. At this time,
we do not believe that any specific and standing requirements for
heightened threat periods should be added to this final rule.
One commenter requested that the Coast Guard add language specific
to GPS denial and spoofing, and Automatic Identification System (AIS)
and timing concerns.
The Coast Guard is not including a definitive list of systems and
equipment in this final rule. We encourage affected entities to address
those vulnerabilities which they identify in their own Assessments, or
are otherwise concerned about, and to tailor drills and exercises to
those areas where they have the most concern, which may include GPS
denial and AIS spoofing. We also do not mandate training or drills on
specific vulnerabilities or threats.
[[Page 6323]]
One commenter asked why outdated CPGs were used for the NPRM.
At the time the Coast Guard initially developed these regulations,
Version 1.0 of CISA's CPGs were the most recent. The Coast Guard
conducted an analysis to identify any significant changes between
versions 1.0 and 2.0 and made changes to the regulatory text where
appropriate. Only minor changes were needed. The Coast Guard will
continue to monitor CISA's efforts related to CPGs to determine whether
a subsequent rulemaking will be needed in the future.
One commenter suggested that the Coast Guard should clarify how
this final rule applies to facilities already regulated by other
authorities, particularly TSA's Security Directives. The commenter also
suggested that docking ship connections be limited to systems essential
for mooring, emergency operations, and ship-to-shore communications.
If an owner or operator is concerned that it may be subject to
TSA's requirements and needs clarification on harmonizing compliance
between TSA and Coast Guard requirements, they should notify the
cognizant COTP or OCMI. If appropriate, the Coast Guard will consider
procedures for waivers or equivalents in Sec. 101.665 or have
additional conversations with TSA. The Coast Guard is not placing
specific requirements on what docking ship connections are allowed, and
instead leaves this determination to the owner or operator.
One commenter recommended inclusion of additional requirements for
logs, as well as a Shipboard Security Information and Event Management.
They further recommended requirements for post-shipyard inspections and
maintenance, particularly after a vessel departs an adversarial port.
The Coast Guard seeks to strike a balance and chose not to impose
requirements that would be so prescriptive that compliance would be too
difficult for some segments of the regulated industry. These
requirements generally provide latitude for owners, operators, or CySOs
to determine the specific means needed to comply with the regulatory
requirements. These regulations represent minimum baseline
requirements, but the Coast Guard encourages regulated entities to take
any additional actions they feel are necessary to address their
cybersecurity needs, so long as such additional cybersecurity measures
are documented in their Cybersecurity Plans.
L. Comments Related to Account Security Measures (Sec. 101.650(a))
Some commenters requested changes to the section on account
security measures, seeking to modify requirements for account lockout,
multifactor authentication, and user credentials as they relate to
certain OT systems. They expressed concerns that these measures could
disrupt critical operations, deny access during emergency situations,
and potentially be exploited by malicious actors to halt operations.
One commenter suggested an outcome-based requirement for OT systems
because the prescriptive approach may not suit many organizations and
could quickly become outdated due to advancing technology.
The Coast Guard reviewed Sec. 101.650(a) and revised specific
requirements as appropriate, as they relate to OT systems. In some
cases, we maintained the proposed text in line with CISA's CPGs,
recognizing what provided the best level of cyber protection. The Coast
Guard recognizes that OT systems may have unique considerations that
are different from IT systems. The Coast Guard agrees that automatic
account lockout in OT systems could have catastrophic consequences in
emergency situations. We adjusted these requirements to reflect updates
that CISA provided to its CPGs based on public comments they received.
These updated requirements took into consideration the concerns noted
in public comments that certain items, such as account lockout and
multifactor authentication when applied to OT systems, could result in
the concerns noted by the public comments.\56\ Based on this review, we
revised Sec. 101.650(a)(1) to remove the references to OT systems and
automatic account lockout due to failed logins.
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\56\ See https://www.cisa.gov/cybersecurity-performance-goals,
accessed November 12, 2024.
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The Coast Guard disagrees that these requirements are too
prescriptive. The Coast Guard reiterates that these regulations
represent minimum baseline requirements, and owners and operators are
welcome to take additional actions and measures as they deem necessary
or appropriate to best protect their systems and equipment. In cases
when owners or operators do not feel that they can comply with account
security measures, or that they feel a requirement is unnecessary, they
may submit a request for a waiver or equivalent using the procedures in
Sec. 101.665.
One commenter noted the benefits of zero-trust architecture. Some
commenters noted the importance of logs in detecting and responding to
cyber-attacks and recommended that we accept next-generation logging
capabilities. One commenter offered an example of one such system.
The Coast Guard notes that zero-trust architecture is one of many
solutions that organizations may choose to use to comply with this
final rule. The Coast Guard does not prescribe specific systems or
equipment or ways to comply with these requirements. The Coast Guard
recognizes that there are multiple systems, equipment, and products
available, and it is up to the owner or operator to identify the option
that best suits their needs while ensuring they meet the requirements
of this final rule.
Some commenters expressed concern with multifactor authentication
on vessels. They stated that the owner or operator should have
flexibility to adequately and specifically address this, rather than a
prescriptive approach. These commenters noted it is challenging
especially for internationally operating vessels with a constantly
changing crew and limited or no access to internet while in transit.
They also stated that providing mobile phones to the crew is not
advisable, noting that encouraging the use of personal devices may lead
to significant resistance. The commenters believed that an alternative,
such as hardware tokens for two-factor authentication, presents
challenges, including distribution, configuration, and the risk of
tokens being misplaced. Another commenter requested that multifactor
authentication only be in place for remote access from untrusted
networks into OT systems according to IACS UR E27 \57\ for new ships,
and with an implementation period for existing ships.
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\57\ IACS UR E27, Cyber Resilience of On-Board Systems and
Equipment, press release information available at: https://iacs.org.uk/news/iacs-ur-e26-and-e27-press-release, accessed August
16, 2024.
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The Coast Guard recognizes that measures such as two-factor
authentication may pose unique challenges to vessels, but also notes
that there are multiple ways to implement multifactor authentication
that do not require internet access. While carriers may not currently
provide phones or other devices for this purpose, the nature of this
being new rulemaking lends itself to the realization that owners and
operators may have to take actions and steps that were not previously
done, if that is how they determine they can best comply with the
regulations. It is up the owner or operator to implement appropriate
multifactor authentication given their
[[Page 6324]]
business operations and accessibility to internet connectivity. Such
multifactor authentication may include a variety of methods, including
passwords, physical devices such as security tokens or access cards, or
biometrics. Additionally, as is the case for all requirements in this
final rule, if an owner or operator has reviewed all possible options
and determines that they cannot comply with any aspect of the
regulations, they may follow the process for requesting a waiver or
equivalence. The Coast Guard is not relaxing the requirements further
for U.S.-flagged vessels. If owners or operators do not feel that they
can comply with account security measures, they may submit a request
for a waiver or equivalent using the procedures in Sec. 101.665.
One commenter requested clarification on the use of passwords; if
they are required, and, if so, what the requirements for them would be.
The Coast Guard does not mandate the use of a password, only that
if passwords are used or if a system is capable of password protection,
the passwords are of sufficient strength and meet certain criteria to
help defend against cyber-attacks based on the criticality of the
system as described in Sec. 101.650(a).
M. Comments Related to Device Security Measures (Sec. 101.650(b))
One commenter expressed concern about including a network map in
the Cybersecurity Plan.
The Coast Guard recognizes the sensitivity of network maps. We
revised Sec. 101.650(b) to clarify that each owner or operator or
designated CySO of a U.S.-flagged vessel, facility, or OCS facility
must ensure the device security measures are in place, addressed in
Section 6 of the Cybersecurity Plan, and made available to the Coast
Guard upon request. Therefore, network maps do not need to be submitted
with the Plan, but they must be maintained by the regulated entity and
made available to the Coast Guard upon request.
One commenter noted that far too few entities have inventoried
their IT and OT assets and supported the requirement to maintain an up-
to-date asset inventory. The commenter also noted that recognizing the
unique needs and limitations of OT environments is essential for
effective cybersecurity regulation and implementation. Finally, the
commenter strongly supported the requirement for owners and operators
of covered infrastructure to designate and inventory critical IT and OT
systems. The commenter noted, however, that frequent IT patches and
updates are impractical in OT environments, as they can disrupt
critical operations and complicate compatibility testing due to real-
time demands.
The Coast Guard appreciates the support for an IT and OT system
inventory. It is up to the owner or operator to determine the frequency
at which OT patches and updates are conducted according to their
Cybersecurity Plan to mitigate the risks identified in their
Cybersecurity Assessment.
Several commenters indicated concerns regarding requirements
relating to OT systems. Paragraph (e)(3)(v) of Sec. 101.650 indicates
that no OT system is to be connected to the publicly accessible
internet unless explicitly required for operation, if there is
documented justification. However, the commenters noted that an OT
system connected to the internet can transmit machine data to the
manufacturer, enabling the manufacturer to offer Smart Planned
Maintenance decision support to the owner.
The Coast Guard appreciates these concerns and notes that each
situation will be evaluated on its own merits on a case-by-case basis.
Regulated entities may discuss specific concerns with the cognizant
COTP, OCMI, or the MSC as appropriate. An owner or operator may also
request a waiver or equivalence determination for the requirements
according to the procedures in Sec. 101.665.
Several commenters indicated concern regarding creating and
maintaining an approved list of hardware, software, and firmware.
The Coast Guard acknowledges the potential burden in creating an
approved list of hardware, software, and firmware; however, it is
necessary to increase visibility into deployed technology assets and
reduce the likelihood of breach by users installing unapproved
hardware, firmware, or software. The Coast Guard anticipates that after
developing the initial list, it will be easier for owners and operators
to update the list in the future. Owners and operators may also find
that their list is similar across multiple vessels or facilities within
their organization. The Coast Guard does acknowledge that this will
rely on coordination and cooperation of vendors and managed service
providers.
One commenter requested clarification whether the proposed
requirements are applicable only to mission critical IT and OT systems,
or, applicable to all onboard IT and OT systems.
The Coast Guard revised this final rule to clarify where the
regulations apply to all IT and OT systems and where they apply to the
critical IT and OT systems. For example, we removed reference to OT
systems in Sec. 101.650(a)(1) and specified that the requirements in
Sec. 101.650(e)(1)(i) and (iv) are for critical IT and OT systems.
One commenter stated that the requirement in Sec. 101.650(b)(2) to
ensure applications running executable code must be disabled by default
on critical IT and OT systems is unclear and requested adjustment to
the text.
The Coast Guard disagrees that this text is unclear. The text
requires entities to disable applications running executable code on
critical IT and OT systems. The primary vulnerability associated with
executable code is the potential for malicious code to be embedded
within them, allowing attackers to exploit vulnerable systems when
users open certain programs without being aware what is being done in
the background. This essentially turns the device into a vehicle for
launching cyberattacks or can lead to data theft, unauthorized system
access, and other harmful actions. Executable code technologies include
Java applets, JavaScript, HTML5, WebGL, and VBScript as well as macros
used within products like Microsoft Office. IT and OT personnel will be
familiar with the vulnerabilities associated with executable code and
will understand the requirements of this provision.
N. Comments Related to Data Security Measures (Sec. 101.650(c))
One commenter stated that the phrase ``document and mitigate any
vulnerabilities'' in Sec. 101.650(e)(1)(iv) caused concern with the
use of the word ``any,'' as there may not be mitigations or patches
available.
The Coast Guard revised paragraph (e)(1)(iv) in Sec. 101.650 to
clarify that the regulated entity will ensure patching or
implementation of documented compensating controls for all KEVs in
critical IT or OT systems, without delay, at the time of their annual
assessment, as well as part of routine maintenance.
One commenter expressed concern about the lack of specificity in
the level and type of logging and monitoring of IT and OT systems for
breaches of security, suspicious activity, TSIs, and cyber incidents.
Given the wide array of IT and OT systems, mandating a one-size-
fits-all level of logging is not practical. Each U.S.-flagged vessel,
facility, and OCS facility should customize its logging system to best
address its specific risks
[[Page 6325]]
and technologies and document the customization in the Plan.
Some commenters expressed concern about encrypting data, at transit
and at rest, on IT and OT systems, as it may be difficult to do on OT
systems, or other legacy systems.
The Coast Guard revised Sec. 101.650(c)(2) to better describe our
expectations regarding data encryption. The revised text specifies that
effective encryption must be deployed to maintain confidentiality of
sensitive data and integrity of IT and OT traffic, when technically
feasible. Encrypting data, at transit and at rest, is an example of
when a requirement may not be technically feasible. In this case, the
regulated entity should describe the aspects that they can comply with
in their Cybersecurity Plan. Additionally, if an owner or operator has
further concerns about how they can comply with these requirements,
they can follow the process for requesting a waiver or equivalent
according to Sec. 101.665.
One commenter recommended that the Coast Guard add specific
requirements for wireless communications as noted in IACS UR E26
4.2.5.3.\58\
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\58\ IACS (UR E26 4.2.5.3) Cyber Resilience of Ships: https://www.american-club.com/files/files/ur-e26-new-apr-2022.pdf, accessed
November 13, 2024.
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The Coast Guard has not added specific requirements for wireless
communications. During their Cybersecurity Assessment, each owner or
operator of a regulated U.S.-flagged vessel, facility, or OCS facility
may identify wireless communications as part of their IT and OT systems
and equipment being assessed, as applicable.
One commenter suggested adding the requirement that remote
connections to OT systems be made with secure connection and endpoint
authentication, protection of integrity and authentication, and
encryption at network or transport layer.
The Coast Guard disagrees that additional requirements are
necessary. This final rule's requirements for remote connections are
sufficient as minimum baseline requirements as noted in Sec.
101.650(a)(4). Owners or operators of U.S.-flagged vessels, facilities,
and OCS facilities are welcome to take additional measures as
appropriate to their systems, equipment, and operations.
Some commenters questioned the requirements for all data requiring
encryption. Another commenter suggested that data security should
include PII, to include employee records and access control data, such
as access control databases used for physical access, which could
include information on Transportation Worker Identification
Credentials, other PII, etc. Physical Access Control Systems (PACS) log
physical entries into a facility, and this should likewise be treated
as PII and sensitive security information. When practical, PACS
servers, networks, devices, applications, and software should be air-
gapped or isolated from IT and OT networks to prevent intrusion or
alteration of data to allow unauthorized physical access.
The Coast Guard revised Sec. 101.650(c)(2) to clarify that only
sensitive data be encrypted. The Coast Guard has not, however, added
these specific items to the requirements, but, rather, allows for the
owner or operator to determine whether this is considered sensitive
data subject to the requirements of this regulation.
One commenter asked if there would be specific guidance on PACS,
emergency management devices or applications, OT applications and
architecture, and safety devices.
The Coast Guard notes that items related to the safety and security
of the U.S.-flagged vessel, facility, or OCS facility, as it pertains
to cybersecurity threats and vulnerabilities to such systems, should be
addressed within the Cybersecurity Plan as determined by the owner,
operator, or CySO according to the requirements stated in this final
rule. The Coast Guard will determine whether it is necessary to address
this further in future guidance.
One commenter inquired how facilities will address PACS and
emergency management systems that are network-enabled. The commenter
recommended that the Coast Guard add regulatory language speaking to
the interdependency of the FSO and the CySO with respect to placing,
conducting maintenance, and monitoring PACS.
The Coast Guard does not agree that such regulatory mandates are
needed to address interdependency of the FSO and CySO as it is up to
the owner, operator, FSO, and CySO to establish relationships and
ensure personnel with security duties are interacting to support the
full safety and security of each U.S.-flagged vessel, facility, and OCS
facility.
One commenter suggested that PACS be included in the requirement
for backing up critical IT and OT systems.
The Coast Guard has determined that the CySO is best positioned to
determine and should have the discretion to identify whether a system
would be included under critical IT or OT systems.
One commenter questioned the requirement that the owner or operator
must ensure that users maintain separate credentials on critical IT and
OT systems, which could be read to mean that individual users must have
different usernames and passwords for each of the critical systems to
which they have access. The commenter was concerned that even if the
intent is to limit shared accounts, this is not always technically
feasible for OT systems.
The Coast Guard has not changed the text in Sec. 101.650(a)(6),
which requires separate credentials for IT and OT systems. The
requirement sets out the measures that owners or operators must take,
which are minimum baseline requirements noted in Sec. 101.650(a). If
an owner or operator does not feel that they can comply with the
requirements as written, they may follow the process for requesting a
waiver or equivalent according to Sec. 101.665.
One commenter requested clarification of the Coast Guard's proposed
data security measures in Sec. 101.650(c). The commenter stated that
the term ``data logs'' is undefined, makes it unclear as to what is
required and whether encryption with a suitably strong algorithm is
appropriate.
The Coast Guard has added a definition for the term ``logs'' to
these regulations and updated the requirement in the regulation from
``data logs'' to ``logs,'' consistent with NIST and CISA's Cyber
Performance Goals. In addition, we revised Sec. 101.650(c)(2) to
provide that effective encryption must be deployed to maintain
confidentiality of sensitive data and integrity of IT and OT traffic,
when technically feasible, rather than the proposed regulatory text
requiring it be encrypted ``using a suitably strong algorithm.'' We
made that change based on the feedback that the standard was unclear.
O. Comments Related to Cybersecurity Training for Personnel (Sec.
101.650(d))
One commenter requested clarification on how often OT-specific
training should be conducted, and what topics it should cover.
Given the wide array of OT systems (for example, crane control,
navigation, propulsion and steering control) and operational settings
(for example, different types of vessels and port facilities),
mandating a one-size-fits-all cybersecurity training is not practical.
Owners and operators of each type of U.S.-flagged vessel, facility, and
OCS facility will need to customize their training so that it addresses
the specific risks and technologies of each regulated entity. The
timeframe and frequency for
[[Page 6326]]
completing cybersecurity training are described in Sec. 101.650(d)(4)
of this final rule.
Some commenters stated that the requirements for training are
overly broad and burdensome, and difficult to track and ensure training
for contractors and temporary workers. They suggested that the
requirements for training be updated to ease the required training.
Others noted that it would not be possible to obtain training within 5
days of gaining system access. Some suggested that the training
requirements be eliminated for contractors completely.
The Coast Guard disagrees that the training is overly burdensome.
The nature of cybersecurity, the growing presence of cyber systems in
the operations of U.S.-flagged vessels, facilities, and OCS facilities,
and the evolving nature of cybersecurity threats and vulnerabilities
necessitate that personnel who will be operating within the IT and OT
environment be sufficiently trained. This includes contractors, whose
access to IT and OT systems and equipment may be no different than that
of regular employees when it comes to potential impacts and need for
training and awareness. We recognize that some contracted and part-time
personnel will be on board and operating on IT and OT systems and
equipment for such a short duration that meeting the training
requirements may be difficult, and there may be situations where an
employee may not be able to receive initial training within the
timeframe stated in this final rule. To accommodate this, we revised
Sec. 101.650(d)(3) to allow for those personnel to be escorted or
accompanied by personnel who already have the required training.
One commenter recommended that the Coast Guard formalize training
and leverage industry best practices to apply to maritime operations.
The Coast Guard does not prescribe specific training programs or
methods in this final rule. It is at the discretion of each owner or
operator of a U.S.-flagged vessel, facility, or OCS facility to
determine the training program that best meets their individual needs.
The Coast Guard encourages maritime stakeholders to work together to
share best practices.
One commenter stated that the Sec. 101.650(d)(1)(i) requirement
for training on relevant provisions of the Cybersecurity Plan was
vague. They also noted that the Sec. 101.650(d)(1)(iii) requirement
for all personnel to be trained on techniques used to circumvent
cybersecurity measures was a suboptimal blanket approach and should be
limited in some manner. Another commenter requested that the Coast
Guard clarify the specific requirements, cadence, and expectations for
training programs, drills, and audits.
The training required by this final rule provides the best baseline
requirements to protect IT and OT systems and equipment, as well as the
personnel operating the systems and equipment. The Coast Guard believes
educating relevant personnel on these techniques, they become more
aware of potential risks and can recognize suspicious activities. This
knowledge fosters a culture of vigilance and preparedness. However, it
is up to the owner or operator, in conjunction with the CySO, to
determine, which provisions of the Cybersecurity Plan apply, depending
on the individual employee requiring the training. The requirements,
cadence, and expectations are sufficiently addressed in these
regulations, while providing regulated entities with the necessary
flexibility to determine how to comply with these regulations while
accounting for their unique systems, equipment, and operations. If an
owner, operator, or CySO has any questions, they may bring them to
their COTP, OCMI, or MSC, as appropriate.
P. Comments Related to Risks and Vulnerabilities (Sec. 101.650(e))
One commenter suggested that the Coast Guard use Federal Advisory
Committees to develop a rank-ordered list of cybersecurity risks to be
used as a benchmark against which objectives could be pursued.
The Coast Guard recognizes the benefits of working with Federal
Advisory Committees but is not using a rank-ordered list of
cybersecurity risks to develop the requirements. As such, there is no
need to work with Federal Advisory Committees to develop such a list.
Our requirements for conducting a Cybersecurity Assessment and
developing a Cybersecurity Plan are designed to help each owner or
operator identify the particular cybersecurity risks and
vulnerabilities at the regulated U.S.-flagged vessel, facility, or OCS
facility.
Some commenters suggested that the Coast Guard change the
requirements for the frequency of audits, assessments, and amendments.
One commenter stated that it was unnecessary to conduct these if no
systems or equipment has changed.
Coast Guard does not concur with the comments. The audit and
assessment intervals in Sec. 101.630(f) are appropriate for assessing
rapidly changing cybersecurity risks, vulnerabilities, and threats.
Moreover, these audit and assessment intervals are consistent with
existing requirements in 33 CFR parts 104, 105, and 106. The Coast
Guard disagrees that no change in systems or equipment means a
Cybersecurity Assessment is unnecessary because the fact that there has
been no change does not mean there is a lack of new threats or
vulnerabilities.
One commenter recommended that the Coast Guard change ``mitigate''
to ``manage'' when referring to responding to vulnerabilities under
``risk management'' in these regulations. The commenter also suggested
that the Coast Guard change the requirements on the frequency of these
actions. Another commenter suggested that patching and mitigating of
vulnerabilities be done according to an organization's policies and
procedures, as opposed to the requirements stated in these regulations.
The Coast Guard revised Sec. 101.650(e)(1)(iv) to remove
``mitigate any unresolved vulnerabilities'' and, instead, require that
the owner or operator ensure patching or implementation of documented
compensating controls for all KEVs in critical IT or OT systems,
without delay. The Coast Guard did not alter the frequency for the
requirement, as we believe that ``without delay'' is more appropriate
than ``per the organization's vulnerability management policies and
processes.'' Owners and operators of U.S.-flagged vessels, facilities,
and OCS facilities subject to this final rule may not have
vulnerability management policies and processes that would adequately
protect their critical IT and OT given the current cybersecurity risks
and threats. Therefore, ``without delay'' provides the expectation to
all entities subject to this final rule that identification and
mitigation of all KEVs in critical IT or OT systems is necessary to
prevent a cyber incident. This provision also ensures the patching and
documented compensating controls take place when there is a KEV in a
critical IT or OT system. An owner or operator who is unable to meet
the requirements of subpart F may seek a waiver or an equivalence
determination using the procedures in Sec. 101.665.
One commenter stated that no maritime organization should ever be
made to ensure that no zero days could ever exist for their internet
connected systems.
The Coast Guard does not reference zero-day vulnerabilities in
these regulations. In Sec. 101.650(e)(3)(iv), we require that owners
and operators of U.S.-flagged vessels, facilities, and OCS facilities
must ensure there are no exploitable channels directly exposed to
[[Page 6327]]
internet-accessible systems. The owner or operator should take
precautions based on their risk posture to ensure that all internet
connections are protected and monitored appropriately when complying
with these requirements.
One commenter noted that arranging for Cybersecurity Assessments in
conjunction with security inspections for vessels, facilities, and OCS
facilities might not be realistic. The commenter also noted that a
Cybersecurity Assessment conducted at the enterprise level would be
more advantageous.
The Cybersecurity Assessments, audits, and inspections are each
separate actions, and may need to be separate. Audits and assessments
are conducted by the regulated entity, which are separate from
inspections conducted by the Coast Guard. With respect to the
commenter's preference for an enterprise-level Cybersecurity
Assessment, while some aspects of the Cybersecurity Plan might be
similar throughout an enterprise, each regulated U.S.-flagged vessel,
facility, or OCS facility possesses unique aspects and characteristics
that likely pose particular risks that must be addressed on an
individual basis.
Some commenters questioned the use of the term ``without delay,''
and stated that it was unclear. Its interpretation may differ by each
organization, potentially ranging from minutes to hours or even days.
The term ``without delay'' is recognized in existing MTSA
regulation (Sec. 101.305 (a)) and requires urgent action as soon as
reasonably and safely possible. This term represents the criticality of
the action being required. For situations in this final rule when
urgency is expected because of the critical nature of the threat, the
expectation is that action should be taken as soon as possible, taking
into account any immediate safety concerns. The Coast Guard clarified
the requirement to read ``as soon as reasonably practicable, in light
of the individual circumstances, but, in any case, not longer than 96
hours'' where appropriate throughout the regulatory text in this final
rule. The 96-hour limit is intended as a reasonable timeline for owners
and operators to accomplish any related processing and paperwork for
administrative matters that are important, but do not rise to the level
of urgency as other critical security actions that must be taken
``without delay.'' In the event that a CySO, owner, or operator
believes more time is necessary they may discuss their concerns with
the COTP or MSC who may grant additional time if warranted.
One commenter indicated concern with the consistency of accepting
mitigations for unresolved vulnerabilities and inquired whether
mitigations provided by owners would generally be accepted.
Each situation will be evaluated on its own merits on a case-by-
case basis. Regulated entities may discuss specific concerns with the
cognizant COTP, OCMI, or the MSC, as appropriate. The Coast Guard
provides procedures in Sec. 101.665 for an owner or operator to
request a waiver or equivalence determination for the requirements.
One commenter stated that the minimum requirement of patching or
implementing countermeasures for all KEVs is too prescriptive and noted
that OT environments, patches, and countermeasures are often
unavailable. Another commenter noted that CISA already has a KEV system
in place and the Coast Guard should not require another one in this
rulemaking.
This final rule allows either patching or implementation of
documented compensating controls for all KEVs in critical IT or OT
systems. Owners and operators are welcome to use an established process
to comply with the requirements of these regulations.
Some commenters indicated concern with the proposed definition of
known exploited vulnerability (KEV) and highlighted that the Coast
Guard did not reference CISA's Known Exploited Vulnerability Catalog.
The commenter also noted that the definition of multifactor
authentication needs adjustment. Additionally, the commenter pointed
out that multifactor authentication is not always technically feasible.
The Coast Guard intends its definition of known exploited
vulnerability to be interpreted based on CISA's Known Exploited
Vulnerability Catalog that CISA maintains and updates as necessary. The
Coast Guard revised Sec. 101.615 to reflect the recommended adjustment
to multifactor authentication. With respect to concerns about the
technical feasibility of multifactor authentication, the Coast Guard
allows an owner or operator to request a waiver or equivalence
determination using the procedures in Sec. 101.665. Owners and
operators may also discuss specific concerns with the cognizant COTP,
OCMI, or the MSC, as appropriate.
Some commenters suggested the Coast Guard revise the requirements
for amending Cybersecurity Plans to account for situations when an
owner or operator believes they need to make an amendment and take
associated action immediately because of a cyber threat, even while the
cognizant COTP, OCMI, or MSC is still reviewing the Plan.
The Coast Guard revised Sec. 101.630(e) to add a new paragraph
(e)(2)(i) that states that nothing in that section should be construed
as limiting the owner or operator of a U.S.-flagged vessel, facility,
or OCS facility from the timely implementation of such additional
security measures as necessary to address exigent security situations.
One commenter expressed concern that the 60 days for an owner or
operator to amend a Cybersecurity Plan and cure deficiencies that may
be identified by the COTP, OCMI, or MSC was an arbitrary number. The
commenter noted that 60 days may be insufficient, as vessels operate
internationally and access to materials and equipment may not be
readily available and suggested a more practical timeframe of 180 days
to address a deficiency.
The Coast Guard revised Sec. 101.630(e)(1)(ii) to clarify that the
owner and operator will have at least 60 days to submit its proposed
amendments. We are not extending the timeframe to address a deficiency
to 180 days because that period would be excessive in many cases. Many
cybersecurity deficiencies need to be resolved quickly. If an owner or
operator determines that more time is needed, then they should
communicate the need to the COTP, OCMI, or the MSC, as appropriate.
Q. Comments Related to Penetration Testing (Sec. 101.650(e)(2))
Some commenters noted that the requirements for penetration testing
are overly prescriptive or burdensome, while another commenter
questioned what the Coast Guard's expectation was for penetration
testing.
The regulation provides minimum baseline cybersecurity
requirements. The Coast Guard does not agree that the penetration
testing requirements are overly prescriptive. The requirements in Sec.
101.650(e)(2) do not dictate the scope of the test but, instead, state
that the owner or operator or designated CySO of a U.S.-flagged vessel,
facility, or OCS facility must only ensure that a penetration test has
been completed.
Some commenters requested clarification on multiple aspects of the
penetration testing requirements, including whether the frequency is
linked to the renewal of a VSP, FSP, or OCS FSP.
The Coast Guard revised Sec. 101.650 in this final rule to clarify
that penetration testing must be completed in conjunction with renewing
the
[[Page 6328]]
Cybersecurity Plan. Furthermore, the owner or operator has the
discretion to determine who has the capabilities to perform a
penetration test. If personnel on the U.S.-flagged vessel, facility, or
OCS facility have the technical expertise, penetration testing can be
done internally. If personnel on the U.S.-flagged vessel, facility, or
OCS facility do not have such technical expertise, then an external
organization must conduct the penetration testing.
One commenter noted that not every cybersecurity incident has the
potential to result in a TSI. The requirement to report threats could
be arbitrary and overly burdensome, especially given the influx of
reports from multiple threat vectors. One commenter requested that the
Coast Guard adjust the language for what information the regulated
entity is required to submit for the penetration test and suggested
that owners and operators should provide the Coast Guard a letter
certifying that a penetration test was conducted. This approach
simplifies reporting expectations for the industry while alleviating
pressure on the NRC.
The Coast Guard's definition of a reportable cyber incident in this
final rule includes, among other things, ``Incidents that otherwise may
lead to a transportation security incident'' which 33 CFR 101.105
defines as ``a security incident resulting in a significant loss of
life, environmental damage, transportation system disruption, or
economic disruption in a particular area.'' The Coast Guard feels that
the scope of this definition allows stakeholders to report a
cybersecurity incident they reasonably identify as potentially leading
to a TSI but also includes other types of cybersecurity incidents that
would not require the entity estimate TSI risks. The scope of the
definition also helps ensure the Coast Guard receive sufficient
information so that it can best evaluate the risk of TSI and, in turn,
coordinate any necessary response. It is likely the Coast Guard will be
better positioned than a single regulated entity to evaluate the
available facts, especially in circumstances when multiple entities are
affected.
The Coast Guard has also issued, and will update as needed,
guidance on incident reporting in the form of a NVIC. If there is a
question as to whether an incident would meet these criteria, a
regulated entity may report to the NRC, or they may notify their local
Captain of the Port for guidance.
The Coast Guard notes that the requirements to report cybersecurity
incidents in accordance with this final rule are satisfied by entities
that are also covered by 33 CFR part 6 and report pursuant to 33 CFR
6.16-1. The Coast Guard recognized, based on public comments, that
stakeholders would be best served with clear guidance on what would be
required for submission to verify the penetration tests. The Coast
Guard agreed that a letter verifying that the test was conducted, while
noting any identified vulnerabilities, would represent a minimal burden
on industry regarding submission requirements.
We revised Sec. 101.650(e)(2) to specify that the CySO must submit
a letter verifying that the test was conducted, as well as all
vulnerabilities identified from the penetration testing. Additionally,
the Coast Guard will consider developing a letter template as part of
future guidance that will further assist stakeholders in meeting
requirements. This information must be included in the Vessel Security
Assessment (VSA), FSA, or OCS FSA, according to 33 CFR 104.305,
105.305, and 106.305. Further documentation related to the penetration
tests must be made available to the Coast Guard upon request as
required by Sec. 101.660.
One commenter inquired if it would be possible for the owner or
operator to apply for an exemption to the penetration test if there are
not any major modifications during the 5 years in between penetration
tests.
Each situation will be evaluated on its own merits on a case-by-
case basis. Regulated entities may discuss specific concerns with the
cognizant COTP, OCMI, or the MSC, as appropriate. The Coast Guard
provides procedures in Sec. 101.665 for an owner or operator to
request a waiver or equivalence determination for the requirements.
One commenter asked if the Coast Guard would accept penetration
testing of the same architecture but in a lab environment in light of
the safety and operational risks active vessels face while conducting
penetration testing on a voyage. The commenter noted that many vessels
typically do not stop for prolonged periods of time. The commenter also
asked if penetration testing of the IT environment could be limited to
noncritical systems.
The Coast Guard understands the concern about conducting
penetration testing on voyages. If an owner or operator of a U.S.-
flagged vessel, facility, or OCS facility believes that their method of
compliance with these regulations is outside of the stated
requirements, or believes the requirements are not applicable to
certain operations, they may request a waiver or equivalency according
to the procedures in Sec. 101.665. For example, if the organization
wants to conduct the penetration testing in a lab environment, they can
request an equivalent and explain how the lab environment satisfies the
stated requirements in their case. In some cases, a temporary waiver
may be appropriate. In terms of whether penetration testing could be
limited to non-critical systems, if an owner or operator believes that
penetration testing of their IT environment could be limited to
noncritical systems, then they may request a waiver or equivalency
according to the procedures in Sec. 101.665.
One commenter noted that penetration testing should be considered a
method of conducting a Cybersecurity Assessment and that penetration
testing should be conducted with the audit as an assessment every
several years, or as needed by the facility.
In this final rule, the Coast Guard considers penetration testing,
Cybersecurity Assessments, and audits to be distinct actions. They are
not interchangeable, and each serves specific functions as part of the
comprehensive cybersecurity requirements of this final rule. These are
separate and distinct actions ranging from less technical to very
technical. Audits are on the less technical side. Audits serve to
determine the accuracy and validity of a document against any potential
changes since the last review, and usually include a review of
policies, procedures, and records. Cybersecurity Assessments assist in
identifying actual or potential vulnerabilities, whether new, evolving,
or pre-existing, in a regulated entity's IT and OT systems, equipment,
and procedures, so that the stakeholder can then address such
vulnerabilities in a Cybersecurity Plan. Assessments also generally
help ensure that policies and procedures are followed and verify that
automated process are completed according to those policies and
procedures (for example, whether patching was deployed accordingly).
Penetration testing is a more technical test of the entity's
cybersecurity to see what an outside cyberattack or inside threat could
do. It may uncover gaps that an Assessment may not. The owner or
operator of a U.S.-flagged vessel, facility, or OCS facility may
choose, but is not required, to conduct the penetration testing in
conjunction with a Cybersecurity Assessment and an audit.
R. Comments Related to Supply Chain (Sec. 101.650(f))
One commenter suggested that the Coast Guard not use the term
``breach''
[[Page 6329]]
when referring to incidents requiring reporting of a cyber incident by
vendors to owners or operators. Other commenters indicated that any
requirement for a vendor or service provide to notify a regulated
entity of vulnerabilities or incidents was not practical.
The Coast Guard revised Sec. 101.650(f)(2) to remove the
references to ``breaches'' and ``incidents'' and replaced them with
``reportable cyber incidents,'' consistent with the decision to define
and use that term in these regulations. It is our position that it is
appropriate to require owners and operators of U.S.-flagged vessels,
facilities, and OCS facilities to establish a process for receiving
information from vendors and third parties to best address potential
threats and vulnerabilities. The Coast Guard recognizes that, with any
cybersecurity vulnerability or incident, it may not be discovered
immediately, and in fact, it could be any length of time before it is
discovered, whether by the regulated entity itself or by a vendor,
third party, or other entity. Vendors and third parties often have a
significant role in an entity's operations, and in cases when they
impact a regulated entity's IT and OT systems and equipment, it is
vital to address this as a potential source of a cybersecurity threat
and vulnerability. The Coast Guard believes that ignoring the potential
cybersecurity impact of vendors and third parties is to ignore an
identified threat vector.
The Coast Guard does not feel it is an undue burden to require
regulated entities to incorporate a requirement in contracts or other
agreements with vendors and third-party services that when a partner
identifies a cybersecurity vulnerability or incident, they must notify
regulated entities that could likewise be adversely impacted. Without
requiring a notification when a vendor or third-party service provider
is aware of an issue but there is no mechanism for their service
partners to be made aware, our regulated entities are potentially
subject to cybersecurity vulnerabilities and incidents for which they
might otherwise be able to take more timely action to prevent,
mitigate, and respond.
One commenter asked if there would be a list of approved vendors
for equipment, services, and assessments.
The Coast Guard does not plan to provide a list of ``approved''
vendors. Owners or operators may choose those vendors that best meet
their individual needs, which may not be the same for every
organization. One commenter requested additional clarity regarding what
information or capabilities are required of vendors and third-party
contractors when providing services to vessels, facilities, and OCS
facilities.
The Coast Guard does not determine what requirements or criteria a
specific vendor, supply-chain provider, or other third party must meet.
This final rule requires that owners and operators consider
cybersecurity capabilities. It is up to the owner or operator of a
U.S.-flagged vessel, facility, or OCS facility to determine whether a
provider meets the requirements that best support their operations and
what they feel are the necessary capabilities to safely and securely
support their business operations.
One commenter suggested that the Coast Guard provide broad
oversight of vendors that provide critical services to broad spectrums
of the maritime industry.
This final rule applies to owners or operators of U.S.-flagged
vessels, facilities, and OCS facilities who will need to select vendors
or third parties based on their own criteria and to ensure regulatory
requirements are met. The commenter's suggestion is outside the scope
of the rulemaking. The Coast Guard will not create or maintain a list
of approved vendors.
One commenter stated that the requirement for owners or operators
to analyze all networks to identify vulnerabilities to IT and OT
systems and the risks posed by each digital asset was overly
burdensome, particularly because of the words ``all'' and ``each.''
The Coast Guard revised Sec. 101.650(e)(1)(i) to clarify that the
owner or operator of a U.S.-flagged vessel, facility, or OCS facility
must analyze all networks to identify vulnerabilities to critical IT
and OT systems, consistent with our definition and use of the term
critical IT and OT systems throughout this final rule.
S. Comments Related to Resilience (Sec. 101.650(g))
One commenter suggested we require backups of critical IT and OT
systems ``periodically'' as opposed to ``frequently.''
The term ``frequently'' in Sec. 101.650(g)(4) emphasizes a timely
review and the need to keep up with the rapidly evolving threat
landscape that cybersecurity poses to the MTS. It is up to the owner or
operator of a U.S.-flagged vessel, facility, or OCS facility to
interpret ``frequently,'' develop a schedule that is appropriate for
their organization, and document it in their Cybersecurity Plan. For
these reasons, we did not make a change in response to this comment.
One commenter suggested that requirements for backups should
include testing of restore processes for operations-critical systems
and data annually.
The requirements for backups in this final rule are sufficient as
minimum baseline requirements. Owners or operators of U.S.-flagged
vessels, facilities, and OCS facilities are welcome to take additional
measures as appropriate to their systems, equipment, and operations.
For this reason, we did not make a change in response to this comment.
T. Comments Related to Network Segmentation (Sec. 101.650(h))
One commenter noted that the network segmentation requirements are
too prescriptive, while other commenters recommended a ``standards-
based, technology-neutral approach.''
The Coast Guard notes that the network segmentation requirements in
Sec. 101.650(h) provide minimum baseline standards while allowing an
owner or operator of a U.S.-flagged vessel, facility, or OCS facility
flexibility in conducting the segmentation. Regulated entities may
discuss specific concerns with the cognizant COTP, OCMI, or MSC, as
appropriate. When deviations must occur or equivalency to other
cybersecurity standards are proposed, the owner or operator may file a
waiver or equivalency request according to the procedures in Sec.
101.665.
U. Comments Related to Cybersecurity Compliance Dates (Sec. 101.655)
Some commenters recommended that the Coast Guard extend the
implementation period and compliance dates for the cybersecurity
requirements in this final rule beyond the 12 to 18 months that we
proposed in the NPRM. For example, one commenter asked the Coast Guard
to allow an implementation period of 36 to 48 months following the
effective date of a final rule. The commenter believed that the
proposed implementation period would be insufficient because
cybersecurity programs require more time to mature. The commenter
stated that 36 to 48 months would afford sufficient time for owners and
operators to comply. Another commenter requested that a phased schedule
be developed to allow time to implement the proposed regulations.
Another commenter stated that six months is not a sufficient amount of
time for a vessel operator to develop a Cybersecurity Plan and develop
and implement cybersecurity training on that Cybersecurity Plan. The
commenter recommended that the Coast
[[Page 6330]]
Guard extend the deadline for completion of cybersecurity training to
the date 365 days after the effective date of the final rule.
The Coast Guard does not agree with the suggestion to delay the
overall implementation by 36 to 48 months, but has implemented a phased
implementation period for all regulated entities. Under this rule, the
regulatory text will take effect, and reporting requirements under this
rule will commence, 180 days after publication. Training requirements
are due 180 days thereafter, followed by a 24-month implementation
period for the rule's requirements to conduct a Cybersecurity
Assessment, submit a Cybersecurity Plan, and designate a CySO. We
believe that this approach, which results in a one-year lead time for
cybersecurity training accounts for the need for action to address
continually evolving cybersecurity threats and vulnerabilities, and
provides regulated entities with adequate time to comply with this
final rule and address its requirements.
We revised Sec. 101.650(e)(1) to specify that owners and operators
will need to conduct the Cybersecurity Assessment within 24 months of
the effective date of this final rule. The Cybersecurity Plan must also
be submitted to the Coast Guard for review and approval within 24
months of the effective date of this final rule, rather than during the
second annual audit following the effective date, as stated in the
NPRM. We revised Sec. 101.655 to reflect this change. We note that in
Section VII of this preamble, we are requesting public comment on a
potential 2-to-5-year delay for the implementation periods for U.S.-
flagged vessels.
The Coast Guard has declined to phase in implementation based on a
specific organization's audit date, in order to ensure that owners and
operators are generally on equal footing with respect to the amount of
time in which to implement these requirements. Owners and operators who
prefer to align their Cybersecurity Plans with existing plans may
submit their required Plans at any time before the 24-month deadline.
Additionally, owners and operators may contact the cognizant COTP or
OCMI for facilities or OCS facilities or the MSC for U.S.-flagged
vessels, or follow the procedures for requesting a waiver, equivalence
determination, or temporary permission under Sec. 101.665 if more time
is needed to comply with the requirements.
V. Comments Related to Cybersecurity Compliance Documentation (Sec.
101.660)
Some commenters expressed concern about portions of the
Cybersecurity Plan being submitted to the Coast Guard, with the
information being at risk of inadvertent release. The commenters
believed this could unnecessarily expose participating entities to
cybersecurity threats, inconsistent outcomes, foreseeable delays, and
additional effort.
The Coast Guard understands the concerns with submitting
information that could put a U.S.-flagged vessel, facility, OCS
facility, or organization at risk of cybersecurity threats. However,
the Coast Guard regularly handles sensitive information and does not
agree that submitting Cybersecurity Plans will result in inconsistent
outcomes, foreseeable delays, additional effort, or risk. If an owner
or operator has concerns about submitting a specific section or portion
of their Cybersecurity Plan, they may discuss these concerns with the
cognizant COTP, OCMI, or MSC, who will work with the regulated entity
to determine whether certain information could be submitted directly or
made available to the Coast Guard through other means. The Coast Guard
will also continuously evaluate any such concerns and feedback and, if
necessary, provide amplifying guidance to all regulated entities as
well as Coast Guard personnel to ensure uniform application of the
requirements. While the Coast Guard will always emphasize consistency,
it is noted that each entity's Plan will be assessed individually, and
differences may result based on the regulated entity's specific Plan
and cybersecurity needs.
One commenter stated that they believed that cybersecurity records
should not be maintained on board a vessel but would be best kept
shoreside. Another commenter recommended vessels follow processes
similar to the International Convention for Safety of Life at Sea, 1974
(SOLAS) rules, where an RO system is already in place.
These regulations do not prescribe where the records need to be
kept but do require that they be made available to the Coast Guard upon
request. Each owner or operator may determine where their records are
best secured, according to 49 CFR part 1520, and how to ensure the
records can be made readily available to the Coast Guard upon request.
So long as it meets these requirements, an owner or operator may choose
to use an existing system, where appropriate.
One commenter expressed concerns about the level of details
included in documentation of penetration testing. They believe that
this information should be made available to the Coast Guard only with
reasonable cause.
The Coast Guard does not agree with the commenter's assertion that
required documentation under these regulations should be made available
only with reasonable cause. This final rule allows for certain
documentation to be maintained by the owner or operator, and to be made
available to the Coast Guard upon request, as required by Sec.
101.660, so that Coast Guard can ensure compliance with the
regulations. Regarding the requirements for penetration testing, we
revised Sec. 101.650(e)(2) in this final rule to specify that
following the penetration test, a letter certifying that the test was
conducted, as well as all identified vulnerabilities, must be included
in the VSA, FSA, or OCS FSA, according to 33 CFR 104.305, 105.305, and
106.305.
One commenter requested that these regulations include a mechanism
for industry to share information and best practices with each other.
In Sec. 101.650(e)(3)(iii) for routine maintenance, we require the
owner or operator to maintain a method to share threat and
vulnerability information with external stakeholders. We do not
prescribe the particular mechanism and, instead, leave that to the
discretion of the individual owners and operators.
One commenter recommended that the completed Cybersecurity
Assessment, along with approval from vessel's master, facility manager,
and port master be retained for a specified duration, as well as any
action plan designed to reduce the residual risk.
The Coast Guard provides minimum baseline recordkeeping
requirements for regulated entities in these regulations. As such, we
are not specifying a minimum duration for retention of completed
Cybersecurity Assessments by the regulated entity. Owners or operators
may impose additional recordkeeping requirements if they desire.
One commenter suggested that the Coast Guard require ``Management
of Change'' in documentation requirements.
The Coast Guard believes that ``Management of Change''
documentation is an internal process issue for the owner or operator,
and that it is unnecessary to address it in these regulations. Each
owner or operator should make their own determination as to whether and
how they address their Management of Change processes and procedures.
One commenter acknowledged the importance of maintaining
cybersecurity
[[Page 6331]]
documentation as required by this regulation, and the need to have the
documentation made available to the Coast Guard upon request. They
requested additional information as to how the Coast Guard will conduct
its reviews of the documentation.
The Coast Guard cannot provide specifics about its procedures in
conducting cybersecurity documentation reviews based on this final
rule, as each situation will be handled on a case-by-case basis,
starting with the local COTP.
W. Comments Related to Noncompliance, Waivers, and Equivalents (Sec.
101.665)
One commenter noted that some systems on board their facilities are
fully managed by the system vendor, and modifying these systems to meet
new regulations might affect the warranty and support of these systems.
They questioned who is ultimately the accountable party for vendor-
managed systems.
Owners and operators are ultimately responsible for the systems and
equipment at their U.S.-flagged vessel, facility, or OCS facility. They
should work with vendors to identify what security measures are in
place that could meet the requirements of these regulations, or how
they will adjust ensure systems and equipment are secured.
Additionally, we have added language for the procedures for
noncompliance, waivers, and equivalents with regulatory compliance.
One commenter requested that the Coast Guard provide a form of
credit, equivalence, or exemption to owners and operators who already
have similar structures in place to comply with these regulations. Some
commenters asked about the ability to request alternative compliance
methods.
The Coast Guard does not provide a blanket credit, equivalence, or
exemption based on a regulated entity's compliance with similar
regulations or requirements. An owner or operator of a U.S.-flagged
vessel, facility, or OCS facility may use those structures to inform
their Cybersecurity Assessment, Cybersecurity Plan, and compliance with
this final rule and, as needed, may follow the procedures in Sec.
101.665 to request a waiver or equivalence determination. When
compliance with similar or parallel regulations or requirements is the
basis for an owner or operator to request a waiver, the Coast Guard
notes that the owner or operator must still detail the portions of the
Coast Guard's regulation they meet, and the specific measures taken
under that similar or parallel compliance when requesting a waiver or
equivalency. An owner or operator simply stating that they are
complying with equivalent measures does not provide the Coast Guard
with enough information to ensure regulatory compliance.
Some commenters requested the Coast Guard exempt facilities subject
to the TSA's Pipeline Security Directives or otherwise clarify the
applicability of facilities subject to both this final rule and the
Security Directives.
TSA's Pipeline Security Directives are issued under separate
authorities and with a separate purpose from these regulations. This
final rule establishes baseline cybersecurity requirements for a
broader segment of the maritime industry than the entities under the
Pipeline Security Directives. Stakeholders subject to this final rule
that believe there is an overlap between agencies' requirements,
stakeholders may use their compliance measures for the other
requirements (for example, TSA's Pipeline Security Directive) to inform
their compliance with the Coast Guard's cybersecurity requirements in
this final rule. The Coast Guard may seek documentation that
demonstrates to the Coast Guard how they are implementing the other
agencies' cybersecurity requirements. Stakeholders may also submit a
request for waiver or equivalency according to Sec. 101.665 of this
final rule.
X. Comments Related to Costs
Several commenters stated that Coast Guard underestimated the
supply chain costs related to monitoring and that additional
employee(s) may be necessary.
The Coast Guard decided not to estimate costs for Sec.
101.650(f)(1) and (f)(2) because owners and operators would need to
consider cybersecurity capabilities only when selecting third-party
vendors for IT and OT systems or services. In addition, we assumed most
third-party providers have existing cybersecurity capabilities and
already have systems in place to notify the owners and operators of
U.S.-flagged vessels, facilities, and OCS facilities of any
cybersecurity vulnerabilities, incidents, or breaches that take place.
Therefore, we assume the commenter is primarily referring to our cost
estimate for Sec. 101.650(f)(3), which requires owners and operators
to monitor and document all third-party remote connections to detect
cyber incidents.
While we include costs for documenting remote third-party
connections when developing the Cybersecurity Plan and costs for annual
maintenance, we did not include a separate cost estimate for monitoring
those connections but instead noted them as unquantifiable costs. The
Coast Guard acknowledges that this could take additional time, mostly
through reviewing logs for remote connections. The amount of time this
could take is dependent on the size of the organization, making
accurate estimates difficult. However, we disagree that most owners or
operators will need to hire additional employees, since many affected
entities are considered small (see our Final Regulatory Flexibility
Analysis (FRFA)) and likely do not have complex networks that would
require full-time active monitoring. Estimating costs associated with
the hiring of a full-time employee would represent a severe
overestimate for many of the small owner and operators affected by this
final rule, and we have decided not to include those costs in the RA.
Several commenters stated that the Coast Guard underestimated the
costs related to the required device security measures and that costs
may ``balloon'' with each additional vessel, facility, or OCS facility
owned or operated.
In our efforts to capture the costs related to device security
measures outlined in Sec. 101.650(b), the Coast Guard considered those
measures as a part of the overall Cybersecurity Plan development and
included any associated hour burden in the estimated hour burdens
associated with Cybersecurity Plans. The Coast Guard acknowledges that
these items take time, but we believe our hour-burden estimates reflect
averages for owners and operators of U.S.-flagged vessels, facilities,
and OCS facilities of various types and sizes in the affected
population, based on information and data from several different
sources that we outlined in the Cybersecurity Measure Costs section of
this RA.
Regarding the commenter's suggestion that the cost may balloon with
each additional U.S.-flagged vessel, facility, or OCS facility, we
estimated Cybersecurity Plan costs for each facility and OCS facility
rather than for the owner or operator of a facility or OCS facility in
the affected population, as explained in the RA. However, for owners
and operators of U.S.-flagged vessels, we assumed that a CySO will not
need to expend a great deal of additional time developing a
Cybersecurity Plan for each U.S.-flagged vessel owned by a U.S.-flagged
vessel company. We believe it is more likely that the CySO will create
a master Cybersecurity Plan for all the U.S.-flagged vessels in the
fleet, and then tailor each Plan according to a specific U.S.-flagged
vessel, as necessary.
[[Page 6332]]
Because a large portion of the provisions required under this final
rule will impact company-wide policies regarding network, account, and
data security practices, as well as company-wide cybersecurity
training, reporting procedures, and testing, we do not believe there
will be much variation in how these provisions are implemented between
specific U.S.-flagged vessels owned by the same owner or operator.
Similarly, we assume that much of the IT and OT technology on board
the affected U.S.-flagged vessels will be consistent across vessels in
the same fleet, making estimates that balloon with each additional
vessel owned prone to overestimation. As a result, the Coast Guard
decided to maintain its current cost estimates for the device security
measures outlined in Sec. 101.650(b) as part of the Cybersecurity Plan
development and maintenance, barring the availability of any specific
data from the affected population.
Several commenters stated that the costs related to penetration
testing were grossly underestimated. Another commenter who represents
operators of offshore supply vessels (OSVs) stated that our estimates
failed to consider the costs associated with the additional internet
protocol (IP) addresses \59\ connecting to networks from industrial
personnel, employees with multiple devices, and OT systems.
---------------------------------------------------------------------------
\59\ An IP address is a unique numerical identifier for each
device or network that connects to the internet.
---------------------------------------------------------------------------
To estimate costs related to penetration testing, the Coast Guard
used estimates provided to us by NMSAC members and Coast Guard SMEs
with experience contracting for and performing penetration tests. We
also relied on the Jones Walker survey,\60\ which is a publicly
available survey of the portion of facilities that currently conduct
penetration testing. Our goal was to use an average estimate based on
real world data. We also attempted to include some variability to
capture increased costs for larger sized organizations by basing a
portion of the cost on the number of IP addresses or employees in an
organization. Though we did not receive additional estimates or data on
real costs incurred by members of the affected population via public
comments, we have adjusted our cost estimate for penetration testing.
We base our adjustments on suggestions from public commenters who
stated that we underestimated costs and failed to account for all IP
addresses along with additional information collected from SMEs, who
have experience performing penetration tests. With this additional
data, we doubled our estimate of the initial penetration testing cost
from $5,000 in the NPRM to $10,000 for the final rule, the cost per IP
address from $50 in the NPRM to $100 for the final rule, and the number
of IP addresses per organization, which is now based on the number of
employees in an organization multiplied by 2. Please see the
Penetration Testing section of the RA to see the impact of these
changes on our cost estimates in the final rule for U.S.-flagged
vessels, facilities, and OCS facilities.
---------------------------------------------------------------------------
\60\ A survey conducted by Jones Walker, a limited liability
partnership (Jones Walker LLP). The title of the survey is ``Ports
and Terminals Cybersecurity Survey,'' which they conducted in 2022.
This survey helped the Coast Guard to gain an understanding of the
cybersecurity measures that are currently in place at facilities and
OCS facilities in the United States. We cite relevant data from the
survey when calculating industry costs throughout the RA. Readers
can access the survey at https://www.joneswalker.com/en/insights/2022-Jones-Walker-LLP-Ports-and-Terminals-Cybersecurity-Survey-Report.html, accessed August 16, 2024.
---------------------------------------------------------------------------
One commenter stated that Coast Guard underestimated the cost of
routine system maintenance, and that additional employee(s) may be
necessary to perform the actions.
Concerning cost estimates related to routine system maintenance,
the costs associated with Sec. 101.650(e)(3)(i) through (v) are
included in the costs for conducting a Cybersecurity Assessment and
developing a Cybersecurity Plan. For Sec. 101.650(e)(3)(vi), we
included a separate cost for the annual subscription cost of a
vulnerability scanner. The Coast Guard acknowledges that the patching
in paragraph (e)(3)(i), monitoring for submitted vulnerabilities in
paragraph (e)(3)(ii) and scanning for vulnerabilities in paragraph
(e)(3)(vi) could require additional time to monitor in some
circumstances, mainly related to OT systems. However, the Coast Guard
disagrees that this is true for most of the affected population.
Patching for IT systems can be set to automatically update and download
without much risk, and vulnerability scans are typically background
processes that only need monitoring in the event of an alert or
incident. Patching for OT systems may be more complicated to allow for
automatic updates, but the Coast Guard lacks data on how prevalent
these systems are in the affected population, and how much time this
could take. The estimates we used for the monetized portion of this
provision in Sec. 101.650(e)(3)(vi) are based on information from
CGCYBER and NMSAC, as we outlined in the Routine System Maintenance for
Risk Management section of this RA. As such, we do not anticipate the
need for these items to require a full-time employee for most owners or
operators in the affected population, and we are unable to adjust the
cost estimates without more specific data provided to us through public
comments.
Several commenters stated that the costs for drills and exercises
were underestimated. Some commenters stated that the costs for drills
were underestimated because the cybersecurity drills could not be
rolled into existing drills. Further, multiple commenters stated that
the CySO is not the only individual that would be involved, and so
costs for other personnel should be included in the calculations.
Another commenter stated that our estimates in the NPRM failed to take
into account the costs of training personnel to supervise drills,
documenting the conduct of drills, identifying lessons learned, and
disseminating information to employees. Another commenter encouraged
the Coast Guard to consult vessel operators to develop a more accurate
understanding of the time burden and costs associated with drill
development. Other commenters also requested that the Coast Guard
reduce the frequency of drills, with some requesting a general
frequency reduction, others requesting annual or semi-annual drill
requirements, and others requesting a schedule of requirements based on
the cybersecurity risk faced by the affected U.S.-flagged vessels and
facilities.
Another comment, from trade associations representing nearly 750
MTSA regulated facilities, stated that they disagreed with the Coast
Guard cybersecurity exercise estimates that did not require additional
time from participants. The commenters disagreed that these new cyber
exercises could be easily combined with existing security exercises
because they are similar in scope and size. According to the commenter,
to combine both would require the exercise to test more subject matter,
and result in longer exercises requiring more participant time and
preparation.
The Coast Guard agrees with suggestions from commenters that costs
have been underestimated for drills and exercises if they are not
combined with existing drills and exercises. As mentioned by multiple
commenters, requiring drills and exercises at the same interval as
physical security drills and exercises already required in 33 CFR parts
104, 105, and 106 facilitates the combination of cybersecurity and
physical security drills, and this is still allowed in the final rule.
However, we accept the points raised, which were shared by several
other commenters, that cybersecurity drills and exercises
[[Page 6333]]
are not always easily combined with physical security drills and
exercises given the scope and material being tested. The Coast Guard
acknowledges that employees beyond the CySO will need to participate in
the drills and exercises in instances where they are not combined. For
the purposes of our RA of this final rule, we now assume that no owners
or operators will combine their cybersecurity drills or exercises with
existing drills or exercises, and that a certain portion of employees
at the organization will participate in the new drills and exercises.
Based on new information from Coast Guard SMEs in the Office of
Port and Facility Compliance (CG-FAC) and the Atlantic Area (LANTAREA),
we have adjusted our cost estimates to reflect 8 hours for drill
development and 4 hours for drill participation for participating
employees. Because our estimated costs are now higher due to the
increased hour burden estimate per drill, and based on public commenter
suggestions, we have reduced the frequency of the cybersecurity drill
requirement from quarterly to at least 2 drills every 12 months, to
relieve the burden on owners and operators. Upon review and
consideration of comments, the Coast Guard recognizes that regulated
entities can assess their cybersecurity risks and vulnerabilities and
the status of their cybersecurity measures through 2 drills every 12
months instead of more frequent occurrences. While there are benefits
of a more robust drill schedule, we believe that this reduction in the
number of drills lowers costs and increases marginal benefits by
allowing affected owners and operators to use resources that would have
been directed to those drills to improve remaining drills or implement
cybersecurity measures that can help reduce the risk of a cyber
incident in other ways. Further, by having fewer drills to develop and
conduct, we believe the remaining drills will be less superficial,
which one commenter remarked was a concern with previously proposed
frequency cybersecurity drills. However, the Coast Guard believes that
anything less frequent than two drills per year could lead to a
decrease in focus on the issues that a drill would emphasize. This is
especially true with regard to cybersecurity, as risk and
vulnerabilities can change rapidly over the course of a year.
In addition, we have adjusted our cost estimates for exercises to
reflect 20 hours for exercise development and 4 hours for exercise
participation for participating employees. According to Sec.
101.635(a), drills and exercises must test the proficiency of the U.S.-
flagged vessel, facility, and OCS facility personnel in assigned
cybersecurity duties. Because we do not have data on which portion of a
given owner or operator's employees will have cybersecurity
responsibilities, we use the estimated 33 percent ``shoreside'' share
of employees for vessel owners and operators, and the same percentage
of employees for facility and OCS facility owners and operators, to
estimate the costs associated with drill and exercise participation. We
feel this is in line with the requirements of the regulatory text and
suggestions from a commenter who stated that ``onboard personnel have
little to no involvement in cyber specific drills.'' Please see the
Drills and Exercises sections of the RA to see the impact of these
changes on our cost estimates for U.S.-flagged vessels, facilities, and
OCS facilities.
Several commenters stated the Coast Guard underestimated costs
associated with network segmentation.
The Coast Guard acknowledges a challenge in estimating costs for
network segmentation. As mentioned in this RA, network segmentation can
be particularly difficult in the MTS, because of the age of
infrastructure in the affected population of U.S.-flagged vessels,
facilities, and OCS facilities. The older the infrastructure, the more
challenging network segmentation may be. Given this, and the amount of
diversity regarding the state of infrastructure across the various
groups in our affected population, we are not able to fully estimate
the compliance costs associated with this provision. We also did not
receive any additional information or data from commenters that could
be used to help us improve our estimate of the potential costs for
network segmentation, which represented one of the largest sources of
uncertainty in the RA. Therefore, we retained the original estimates
from the NPRM for this provision.
In accordance with OMB Circular A-4, uncertainty analysis is a tool
that can be used by Federal agencies to present uncertainty associated
with the estimation of costs, sources of data, and more, in an RA. In
table 42 of the RA, we list uncertainties related to the economic
impact of certain provisions of this final rule, including the state of
infrastructure for network segmentation. In some cases, we list a range
of potential cost estimates, if a point estimate was not available for
use in the RA. For other provisions of this final rule, where we
received additional data or information from commenters, we used this
information and updated our estimate of costs and burden hours, if
applicable, in the RA.
One commenter stated that the affected population counts used in
the NPRM for U.S.-flagged vessels regulated under subchapters H and K
were inaccurate and provided updated numbers. According to the comment,
the affected populations listed in table 6 of the NPRM for vessels
inspected under 46 CFR subchapter H (34 vessels) and subchapter K (379
vessels) are too low. The commenter cited the USCG--PVA Quality
Partnership Annual Report for the years 2021-2023, which indicated that
there are 136 vessels inspected under 46 CFR subchapter H and 428
vessels inspected under subchapter K that would be subject to the
cybersecurity requirements.
The Coast Guard thanks the commenter for noting the discrepancy in
the population for U.S.-flagged vessels under subchapters H and K. We
inadvertently removed certain public vessels that are included under
the applicability of this final rule, or in ``Applicability'' in 33 CFR
101.605, which resulted in the error. Therefore, we now estimate the
revised population for U.S.-flagged vessels under subchapters H and K
to be approximately 131 and 430, respectively, based on our updated
population data we obtained from our Marine Information for Safety and
Law Enforcement (MISLE) database. These figures are only slightly
different from those highlighted in the USCG-PVA Quality Partnership
Annual Report for the years 2021-2023, which we assume is the result of
small year-to-year changes in vessel populations. As a part of this
update, we also updated all our other affected population data. Readers
can view the section, Affected Population, and table 6 in the RA.
Several commenters stated that a there is a substantial additional
cost to contract cybersecurity services or hire additional staff based
on the estimates provided in the RA.
The Coast Guard thanks the commenter for raising the concern.
However, in Sec. 101.625 of this final rule, we do not require any
owner or operator of a U.S.-flagged vessel, facility, or OCS facility
to hire a dedicated CySO to perform the duties stated in this part or
in Sec. 101.630 for the Cybersecurity Plan. In the Cybersecurity Plan
Costs section of the RA, we state that a CySO can be an existing person
within a given organization who may perform the duties and assume the
responsibilities of a CySO provided that this person can maintain their
current responsibilities within the organization. Therefore, an
organization has the flexibility to
[[Page 6334]]
determine if an existing employee such as a VSO, FSO, or CSO can
perform the functions of a CySO. Despite this, we acknowledge that some
owners or operators may need to hire a CySO if no existing employees
are able take on these duties. However, rather than estimating the
hours associated with bringing on a full-time employee, the hour
burdens associated with CySO duties have been quantified in various
sections of the cost analysis. This can capture the costs associated
with contracting for the individual CySO duties or assigning them to a
new or existing employee.
One commenter stated that we miscategorized the role of the CySO
under the ``Information Security Analyst'' category, rather than using
a CISO. The commenter also suggested that it is unlikely a single
individual could perform all the required functions, indicating an
underestimation of costs and management overhead. The commenter also
noted that U.S. maritime academies currently lack curriculum for
producing maritime cybersecurity professionals, making it difficult to
fill CySO positions with qualified personnel. As a result, the
commenter urged the Coast Guard to engage with public and private
maritime academies to address a lack of qualified personnel.
The Coast Guard disagrees with the assertion that we have
miscategorized the CySO role. A CISO, as the commenter suggests, is
typically a C-suite or executive-level management position. While it is
acceptable for affected entities to hire or designate an existing CISO
as the CySO to comply with this final rule, it is not required. We
believe that the roles and responsibilities assigned to the CySO role
are of a smaller scope and scale than what would typically be expected
of a C-suite level CISO, and that estimates in line with typical CISO
wages would greatly overestimate the costs of this final rule for
owners and operators of smaller U.S.-flagged vessels, facilities, and
OCS facilities.
We believe the same is true for the claim that multiple individuals
would need to take on the CySO duties. Assuming multiple personnel
would result in overestimates for most small entities with less
comprehensive cybersecurity programs and risks. Therefore, we used the
estimates that we believe best reflect the average burden for the
affected entities.
In order to have as large a population of CySOs as possible,
graduation from a maritime academy, or having a Merchant Mariner
Credential (MMC), is not required. Cybersecurity systems in the
maritime industry are not so unique from other industries as to require
specialization in MTSs. An MMC would be required only if the CySO's
duties, as required by the company and its Cybersecurity Plan, require
additional duties in a location, such as on a vessel, would otherwise
require an MMC. CySOs, like VSOs, FSOs, or OCS FSOs, require only
general knowledge of their company's maritime operations. The Coast
Guard has no plans to create a CySO MMC. If maritime academies wish to
develop CySO training programs so a graduate earns an MMC along with
CySO credentials, they are encouraged to develop such programs.
One commenter stated that the cost for the commercial shipping
sector is substantial, especially for smaller vessel owners and
operators in an economic environment that has tight margins and
substantial risk.
The Coast Guard acknowledges that this final rule will create
significant costs for affected small entities, based on our FRFA, but
it will also create significant benefits for the affected entities and
the maritime industry as a whole. In several areas of this final rule,
we referenced CEA's 2018 report (see the III. Basis and Purpose and the
Benefits sections of the preamble and RA, respectively) on the state of
cybersecurity in the marketplace and how firms viewed cybersecurity or
behaved when faced with cybersecurity challenges. In support of this
final rule, we provided excerpts from this report, which in part state
that firms ``[r]ationally underinvest in cybersecurity relative to the
socially optimal level'' and ``[i]t often falls to regulators to devise
a series of penalties and incentives to increase the level of
investment to the desired level.'' \61\ With this understanding, we
formulated minimum cybersecurity requirements that may assist firms and
regulated entities with their cybersecurity posture in an effort to
reduce the likelihood, vulnerability, and risk of a cyber incident. If
a cyber incident occurs, the Coast Guard believes that the minimum
cybersecurity requirements will mitigate its impact on firms, and
regulated entities, and the U.S. economy, and create the intended
benefits for the regulated entities.
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\61\ Economic Report of the President supra note 2 at 323-24.
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In table 51 of the RA, we list the potential benefits of this final
rule, and ones specifically related to cybersecurity measures for firms
where we state, ``A cyber-resilient organization can maintain or
quickly resume operations in the event of a cyber-attack, minimizing
downtime and ensuring that essential services remain available to
customers and stakeholders. This reduces the potential for costly
disruptions to maritime operations,'' and reduces the downstream
impacts to ``economic participants.'' Generally, firms with strong
cybersecurity measures will have benefits that include improved
preparedness, reduced vulnerability, improved data protection, reduced
risk of reportable cyber incidents, improved training, improved
incident response, and enhanced trust with economic partners, among
many others we listed.
In our consideration of public comments in the FRFA, we state that
we will provide assistance to small entities through reducing the
required frequency of cybersecurity drills from quarterly to twice
annually, extending the implementation period and compliance dates for
the Cybersecurity Assessment and Cybersecurity Plan in this final rule
to 24 months rather than the 12 to 18 months that we proposed in the
NPRM. By using the same implementation period for each group of
regulated entities rather than basing this on the organization's audit
date, the relevant owners and operators will have the same amount of
time in which to implement these requirements, and in many cases will
have additional time to come into compliance when compared to the NPRM.
Please see our Small Entity Compliance Guide, which is available in the
docket, for additional help regarding how small entities can best
comply with this final rule.
One commenter stated that the time requirement for updates under
Sec. 101.630 may be unrealistic due to vessels that are operating
internationally with limited access to materials or equipment.
The Coast Guard understands that each U.S.-flagged vessel,
facility, and OCS facility operates facing different cybersecurity
risks. Owners and operators may seek an equivalency or waiver by
following the procedures in Sec. 101.665. This flexibility is intended
to accommodate varying levels of risk and operational needs across
different vessels, facilities, and OCS facilities. We revised Sec.
101.630(e)(1)(ii) to clarify that the owner and operator will have at
least 60 days to submit its proposed amendments. Further, we have
revised Sec. 101.655 to reflect that the Cybersecurity Plan must be
submitted to the Coast Guard for review and approval within 24 months
of the effective date of this final rule, rather than during the second
annual audit following the effective date. In addition, we revised
Sec. 101.650(e)(1) to specify that owners
[[Page 6335]]
and operators will need to conduct the cyber assessment within 24
months of the effective date of this final rule, an increase from 12
months proposed in the NPRM. All these revisions should give owners and
operators more time and flexibility to comply with this final rule.
One commenter stated that the Coast Guard failed to delineate costs
between OCS and waterfront facilities in the RA, leading to potentially
inaccurate cost estimates for the 33 OCS facilities operated by 9
different entities. In addition, the commenter stated that the Coast
Guard failed to acknowledge the traditional costs for inspection of OCS
facilities, including the commercial helicopter contract used to reach
the OCS facility platforms.
The Coast Guard acknowledges that OCS facilities were grouped in
with the waterfront facilities in the RA in the NPRM. The Coast Guard
believes that the cost estimates for compliance with this final rule
are similar across waterfront facilities and OCS facilities.
Nonetheless, for greater clarity, in the RA for this final rule we
highlight the specific OCS-related cost estimates for OCS facilities as
a subset of the overall facility cost estimates, at the end of each
section of the analysis.
Regarding the inspection costs for OCS facilities, we included cost
estimates for the marginal increase in onsite inspection time for the
population of facilities and OCS facilities. Coast Guard SMEs within
CG-FAC conferred with local inspection offices to estimate the expected
marginal increase in facility and OCS facility inspection time. Local
facility inspectors estimate that the additional cybersecurity
provisions from this final rule will add an average of 1 hour to an
onsite inspection. We believe this is possible under the existing
framework for facility and OCS facility inspections.
The Coast Guard also received an internal comment from Coast Guard
District 9 that stated that we used the incorrect vessel inspector rank
and wage in our analysis of Government costs.
In the NPRM, the Coast Guard assumed that vessel inspections are
performed by an E-5 rank Petty Officer Second Class with a mean hourly
wage rate of $58. We now assume that vessel inspections are performed
by an O-2 rank Lieutenant Junior Grade with a mean hourly wage rate of
$72 based on the commenter's suggestion. Readers can view the
Government Costs section of the RA for more detail on the way this
impacts the cost estimates of this final rule.
VI. Discussion of the Final Rule
This final rule adds minimum cybersecurity requirements to 33 CFR
part 101 in new subpart F. Subpart F--Cybersecurity consists of the
following sections:
101.600 Purpose
101.605 Applicability
101.610 Federalism
101.615 Definitions
101.620 Owner or Operator
101.625 Cybersecurity Officer
101.630 Cybersecurity Plan
101.635 Drills and Exercises
101.640 Records and Documentation
101.645 Communications
101.650 Cybersecurity Measures
101.655 Cybersecurity Compliance Dates
101.660 Cybersecurity Compliance Documentation
101.665 Noncompliance, Waivers, and Equivalents
101.670 Severability
A section-by-section explanation of the additions and changes
follows. In addition to the additions and changes described there, we
also made revisions to refer to ``U.S.-flagged vessels, facilities, and
OCS facilities'' throughout for consistency and clarity related to the
applicability of this final rule, as well as making other minor
editorial changes.
Section 101.600--Purpose
This section states that the purpose of 33 CFR part 101, subpart F,
is to set minimum cybersecurity requirements for U.S.-flagged vessels,
facilities, and OCS facilities to safeguard and ensure the security and
resilience of the MTS. The requirements will help safeguard the MTS
from the evolving risks of cyber threats and align with the DHS goal of
protecting critical U.S. infrastructure.
Section 101.605--Applicability
This section requires that subpart F apply to the owners and
operators of U.S.-flagged vessels, facilities, and OCS facilities
required to have a security plan under parts 104, 105, and 106. A list
of the vessels subject to subpart F is as follows:
U.S. mobile offshore drilling units (MODUs), cargo
vessels, or passenger vessels subject to SOLAS, Chapter XI-1 or Chapter
XI-2;
Self-propelled U.S. cargo vessels greater than 100 gross
register tons subject to 46 CFR chapter I, subchapter I, except
commercial fishing vessels inspected under 46 CFR part 105;
U.S. vessels subject to 46 CFR chapter I, subchapter L;
U.S. passenger vessels subject to 46 CFR chapter I,
subchapter H;
U.S. passenger vessels certificated to carry more than 150
passengers;
U.S. passenger vessels carrying more than 12 passengers,
including at least 1 passenger-for-hire, that are engaged on an
international voyage;
U.S. barges subject to 46 CFR chapter I, subchapter D or
O;
U.S. barges carrying certain dangerous cargo in bulk or
barges that are subject to 46 CFR chapter I, subchapter I, that are
engaged on an international voyage;
U.S. tankships subject to 46 CFR chapter I, subchapter D
or O; and
U.S. towing vessels greater than 8 meters (26 feet) in
registered length inspected under 46 CFR subchapter M, that are engaged
in towing a barge or barges and subject to 33 CFR part 104, except a
towing vessel that--
[cir] Temporarily assists another vessel engaged in towing a barge
or barges subject to 33 CFR part 104;
[cir] Shifts a barge or barges subject to this part at a facility
or within a fleeting facility;
[cir] Assists sections of a tow through a lock; or
[cir] Provides emergency assistance.
This rule does not apply to any foreign-flagged vessels subject to
33 CFR part 104. Cybersecurity regulations for foreign-flagged vessels
under domestic law may create unintended consequences with the ongoing
and future efforts to address maritime cybersecurity in the
international arena and could be contrary to international law as U.S.
regulatory authority over foreign-flagged vessels is limited. The
traditional means to regulate vessels on the international-level is
through diplomatic engagement at the IMO and through various treaty-
based mechanisms. The IMO addressed cybersecurity measures for foreign-
flagged vessels through MSC-FAL.1/Circ.3 and MSC Resolution 428(98).
Therefore, based on IMO guidelines and recommendations, an SMS approved
under the ISM Code should address foreign-flagged vessel cybersecurity
and provide guidance to other flag administrations on how to regulate
vessels subject to their jurisdiction.
In addition, the Coast Guard verifies how CRM is incorporated into
a vessel's SMS via the process described in the updated October 11,
2023, CVC-WI-027(3), Vessel Cyber Risk Management Work Instruction.\62\
This process will continue to be the Coast Guard's primary means of
ensuring cybersecurity readiness on foreign-flagged vessels, which are
exempt from this final rule. This includes working
[[Page 6336]]
with their flag administrations to address possible deficiencies in
cybersecurity.
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\62\ See footnote 13.
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Section 101.610--Federalism
We discuss the purpose and contents of this section in section
VIII.E, Federalism, in this preamble.
Section 101.615--Definitions
This section lists new cybersecurity related definitions the Coast
Guard has included in 33 CFR part 101, in addition to the maritime
security definitions already in 33 CFR 101.105. These definitions
explain concepts relevant to cybersecurity and will help eliminate
uncertainty in referencing and using these terms in 33 CFR part 101.
The Coast Guard consulted several guides and authoritative sources
for these new definitions. These sources include Executive Order 14028,
6 U.S.C. 148, and the Act.\63\
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\63\ Public Law 117-263, Sec. 11224(a)(1) (2022).
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Another informal source for cybersecurity information is the CISA's
National Initiative for Cybersecurity Careers and Studies website,\64\
which is an online Federal resource for cybersecurity training and
education. The Coast Guard also reviewed NIST's CSRC.\65\ NIST
maintains the CSRC to educate the public on computer security,
cybersecurity, information security, and privacy. CISA and NIST are
regarded as authoritative sources of information in areas related to
technology and cybersecurity.
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\64\ National Initiative for Cybersecurity Careers and Studies,
Explore Terms: A Glossary of Common Cybersecurity Words and Phrases,
https://niccs.cisa.gov/cybersecurity-career-resources/glossary,
accessed August 13, 2024.
\65\ CSRC, https://csrc.nist.gov/glossary, accessed September
15, 2023.
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In addition, the Coast Guard has defined the term cybersecurity
risk consistent with the definition at section 2200 of the Homeland
Security Act of 2002 (Pub. L. 107-296), as amended. The Coast Guard
notes, however, that it does not believe paragraph (7)(B) of section
2200, which contains an exception for actions that solely involve a
``violation of a consumer term of service or a consumer licensing
agreement'' is relevant to the U.S.-flagged vessels, facilities, and
OCS facilities, that are the subject of this rulemaking. Therefore, we
expect that exception will not be applicable to the regulated entities
of this final rule. Nevertheless, for consistency with the definition
found in the Homeland Security Act of 2002 and the sake of
completeness, we have included the complete definition in this rule.
See also 46 U.S.C. 70101(2); Public Law 115-254, sec. 1805(b)(2).
The Coast Guard has included definitions for Cyber incident, Cyber
risk, Cyber threat, and Cybersecurity vulnerability. Cyber incident is
related to information systems and is inclusive of both Information
Technology or IT and Operational Technology or OT. The Coast Guard also
defines new terms that are applicable to maritime cybersecurity,
including Critical Information Technology (IT) or Operational
Technology (OT) systems, Cyber Incident Response Plan, Cybersecurity
Officer or CySO, and Cybersecurity Plan. A CySO, for example, is the
person(s) responsible for developing, implementing, and maintaining
cybersecurity portions of the VSP, FSP, or OCS FSP. The CySO also acts
as a liaison with the COTP and CSOs, VSOs, and FSOs.
The Coast Guard revised some definitions to clarify their meaning
based on public comments we received and added two definitions. These
revisions are discussed in more detail in section V. Discussion of
Comments and Changes, in the portion on Comments Related to Definitions
in this preamble.
We revised backup to remove the reference to a secondary location
and instead specify that the files and databases should be stored
separately for preservation and recovery.
We revised Cybersecurity Officer, or CySO to add that owner or
operator may designate an alternate CySO to assist with the duties and
responsibilities of the CySO, including during periods when the CySO is
on leave, unavailable, or unable to perform their duties.
We revised Cybersecurity Plan to add that a separate document may
be submitted, in addition the originally proposed options to include
the Cybersecurity Plan in the VSP, FSP, OCS FSP or the Annex to one of
those plans.
We added a new definition for log, which means a record of the
events occurring within an organization's systems and networks.
We revised multifactor authentication to mean more than one
distinct authentication factor for successful authentication. In
addition, we clarified that multifactor authentication can be performed
using a multifactor authenticator or by a combination of authenticators
that provide different factors. In addition, the three authentication
factors are (1) something you know, (2) something you have, and (3)
something you are.
Based on support from public comments, we added a definition for
reportable cyber incident. The definition of a reportable cyber
incident is based on the model definition in DHS's CIRC-informed Report
to Congress of September 19, 2023.\66\ The term reportable cyber
incident replaces cyber incident in Sec. Sec. 101.620(b)(7) and
101.650(g)(1). Specifically, a reportable cyber incident means an
incident that leads to, or, if still under investigation, can
reasonably lead to any of the following:
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\66\ See DHS Office of Strategy, Policy, and Plans,
Harmonization of Cyber Incident Reporting to the Federal Government
(Sept. 19, 2023), https://www.dhs.gov/publication/harmonization-cyber-incident-reporting-federal-government, accessed August 13,
2024.
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(1) Substantial loss of confidentiality, integrity, or availability
of a covered information system, network, or OT system;
(2) Disruption or significant adverse impact on the reporting
entity's ability to engage in business operations or deliver goods or
services, including those that have a potential for significant impact
on public health or safety or may cause serious injury or death;
(3) Disclosure or unauthorized access directly or indirectly of
non-public personal information of a significant number of individuals;
(4) Other potential operational disruption to critical
infrastructure systems or assets; or
(5) Incidents that otherwise may lead to a TSI as defined in 33 CFR
101.105.
The Coast Guard's existing regulations in 33 CFR part 101 require
regulated entities to report suspicious activity that may result in a
TSI, breaches of security, and TSIs involving computer systems and
networks. See 33 CFR 101.305. The purpose of defining a reportable
cyber incident in this final rule is to establish a threshold between
the cyber incidents that have to be reported and the ones that do not.
Section 101.620--Owner or Operator
This section requires each owner and operator of a U.S.-flagged
vessel, facility, or OCS facility to assign qualified personnel to
develop a Cybersecurity Plan and ensure that the Cybersecurity Plan
incorporates detailed preparation, prevention, and response activities
for cybersecurity threats and vulnerabilities.
Additional responsibilities of owners and operators of U.S.-flagged
vessels, facilities, and OCS facilities include:
Designating a CySO, in writing, by name and title, and
identifying how the CySO can be contacted at any time. A CySO must be
accessible to the Coast Guard 24 hours a day, 7 days a week (see Sec.
101.620(b)(3));
[[Page 6337]]
Ensuring that a Cybersecurity Assessment is conducted
annually or sooner, under the circumstances described in this final
rule (see Sec. Sec. 101.620(b)(4) and 101.650(e)(1));
Ensuring that a Cybersecurity Plan is developed and
submitted for Coast Guard approval, either as a separate document or as
an addition to an existing FSP, VSP, or OCS FSP (see Sec. Sec.
101.620(b)(1) and 101.630(a));
Operating the U.S.-flagged vessel, facility, or OCS
facility in accordance with the approved Cybersecurity Plan (see Sec.
101.620(b)(5)); and
Reporting all reportable cyber incidents, including TSIs, to the
NRC and relevant authorities according to the Cybersecurity Plan (see
Sec. Sec. 101.305 and 101.620(b)(7)). We revised this paragraph in
this final rule to specify that reportable cyber incidents need to be
reported, not all cyber incidents. We also removed the reference to a
telephone number to allow flexibility in the way reports are made to
the NRC.
Section 101.625--Cybersecurity Officer
The CySO may be a full-time, collateral, or contracted position.
The same person may serve as the CySO for more than one U.S.-flagged
vessel, facility, or OCS facility. The CySO needs to have general
knowledge of a range of issues relating to cybersecurity, such as
cybersecurity administration, relevant laws and regulations, current
threats and trends, risk assessments, inspections, control procedures,
and procedures for conducting exercises and drills. When considering
assignment of the CySO role to the existing security officer, the owner
or operator should consider the depth and scope of these new
responsibilities in addition to existing security duties.
The most important duties a CySO performs include ensuring
development, implementation, and finalization of a Cybersecurity Plan;
auditing and updating the Plan; ensuring the Cyber Incident Response
Plan is executed and exercised; ensuring adequate training of
personnel; and ensuring that the U.S.-flagged vessel, facility, or OCS
facility is operating in accordance with the Plan and in continuous
compliance with this subpart. The CySO has the authority to assign
cybersecurity duties to other personnel; however, the CySO remains
responsible for the performance of these duties. Depending on
operational conditions and cybersecurity risks, the CySO, owner, or
operator may develop the required Cyber Incident Response Plan as a
separate document or as an addition to the Cybersecurity Plan.
We revised Sec. 101.625(a) to add that the CySO may serve in other
roles or positions within the owner or operator's organization. In
Sec. 101.625(d)(6), we revised the text to clarify that cybersecurity
inspections may be conducted in conjunction with any scheduled U.S.-
flagged vessel, facility or OCS facility inspections. In Sec.
101.625(d)(8), to allow greater flexibility for the CySO we changed the
word ``ensure'' to ``enhance'' cybersecurity awareness and vigilance of
personnel and removed ``through briefings, drills, exercises, and
training.'' In Sec. 101.625(d)(10), which requires the CySO to report
and report information to the owner and operator, we replaced
``breaches of security, suspicious activity that may result in TSIs,
TSIs, and cyber incidents'' with reportable cyber incidents. In Sec.
101.625(d)(13), which covers submission of Cybersecurity Plans for
approval, we removed reference to ``substantive changes (or major
amendments)'' and instead only refer to amendments. In Sec. 101.625(e)
we added that a CySO may obtain the necessary qualifications for the
position through education.
Section 101.630--Cybersecurity Plan
This section contains minimum requirements for the Cybersecurity
Plan. The Cybersecurity Plan must be maintained consistent with the
recordkeeping requirements in 33 CFR 104.235 for vessels, 33 CFR
105.225 for facilities, and 33 CFR 106.230 for OCS facilities. See
Sec. 101.640. A Cybersecurity Plan incorporates the results of a
Cybersecurity Assessment and considers the recommended measures
appropriate for the U.S.-flagged vessel, facility, or OCS facility. A
Cybersecurity Plan can be combined with or complement an existing FSP,
VSP, or OCS FSP. We revised Sec. 101.630(a) to add that a separate
submission may be used in addition to the originally proposed options
to include the Cybersecurity Plan in the VSP, FSP, OCS FSP or the Annex
to one of those Plans.
A Cybersecurity Plan can be kept in an electronic format if it can
be protected from being deleted, destroyed, overwritten, accessed, or
disclosed without authorization.
The format of a Cybersecurity Plan required under this final rule
includes the following individual sections:
(1) Cybersecurity organization and identity of the CySO (see Sec.
101.625 Cybersecurity Officer);
(2) Personnel training (see Sec. 101.625(d)(8), (9) Cybersecurity
Officer);
(3) Drills and exercises (see Sec. 101.635 Drills and Exercises);
(4) Records and documentation (see Sec. 101.640 Records and
Documentation);
(5) Communications (see Sec. 101.645 Communications);
(6) Cybersecurity systems and equipment with associated
maintenance; (see Sec. 101.650(e)(3) Cybersecurity Measures: Routine
Maintenance);
(7) Cybersecurity measures for access control, including computer,
IT, and OT areas (see Sec. 101.650(a) Cybersecurity Measures: Account
Measures);
(8) Physical security controls for IT and OT systems (see Sec.
101.650(i) Cybersecurity Measures: Physical Security);
(9) Cybersecurity measures for monitoring (see Sec. 101.650(f)
Cybersecurity Measures: Supply Chain; (h) Network Segmentation; (i)
Physical Security);
(10) Audits and amendments to the Cybersecurity Plan (see Sec.
101.630(f) Cybersecurity Plan: Audits);
(11) Cybersecurity audit and inspection reports to include
documentation of resolution or mitigation of all identified
vulnerabilities (see Sec. 101.650(e) Cybersecurity Measures: Risk
Management);
(12) Documentation of all identified unresolved vulnerabilities to
include those that are intentionally unresolved due to risk acceptance
by the owner or operator (see Sec. 101.650(e) Cybersecurity Measures:
Risk Management);
(13) Cyber incident reporting procedures in accordance with part
101 of this subchapter (see Sec. 101.650(g) Cybersecurity Measures:
Resilience); and
(14) Cybersecurity Assessment (see Sec. 101.650(e) Cybersecurity
Measures: Risk Management).
Depending on operational conditions and cybersecurity risks, the
owner or operator may develop the required Cyber Incident Response Plan
as a separate document or as an addition to the Cybersecurity Plan.
Submission and Approval of the Cybersecurity Plan
An owner or operator must submit a Cybersecurity Plan for review to
the cognizant COTP or the OCMI for facilities and OCS facilities, or to
the MSC for U.S.-flagged vessels. See Sec. 101.630(d). We removed the
requirement for a letter certifying that the Plan meets the
requirements of this subpart must accompany the submission in Sec.
101.630(d). Once the COTP or MSC finds that the Plan meets the
cybersecurity requirements in
[[Page 6338]]
Sec. 101.630, they will send a letter to the owner or operator
approving the Cybersecurity Plan or approving the Plan under certain
conditions.
If the cognizant COTP, OCMI, or MSC requires additional time to
review the Plan, they have the authority to return a written
acknowledgement to the owner or operator stating that the Coast Guard
will review the Cybersecurity Plan submitted for approval, and that the
U.S.-flagged vessel, facility, or OCS facility may continue to operate
as long as it remains in compliance with the submitted Cybersecurity
Plan. See Sec. 101.630(d)(1)(iv).
If the COTP, OCMI, or MSC finds that the Cybersecurity Plan does
not meet the requirements in Sec. 101.630, the Plan will be returned
to the owner or operator with a letter explaining why the Plan did not
meet the requirements. In this final rule, we revised Sec.
101.630(e)(1)(ii) to clarify that the owner or operator has at least 60
days to submit its proposed amendments. Until the amendments are
approved, the owner or operator must ensure temporary cybersecurity
measures are implemented to the satisfaction of the Coast Guard. See
Sec. 101.630(e)(1)(ii).
If the owner or operator disagrees with the deficiency
determination, they have the right to appeal or submit a petition for
reconsideration or review to the respective COTP, District Commander,
OCMI, or MSC per 33 CFR 101.420.
When submitting amendments to the Coast Guard, either after a
Cybersecurity Assessment or at other times, the owner or operator is
not required to submit the Cybersecurity Plan with the amendment.
Consistent with the discussion above concerning our elimination of the
term ``major amendment,'' we removed the reference to major amendment
from Sec. 101.630(e)(2). We added a new paragraph, Sec.
101.630(e)(2)(i), which provides that nothing in this section should be
construed as limiting the owner or operator of the U.S.-flagged vessel,
facility, or OCS facility from the timely implementation of such
additional security measures not enumerated in the approved VSP, FSP,
or OCS FSP as necessary to address exigent security situations. This
new paragraph addresses questions from public commenters about whether
entities would be able to implement necessary changes to their Plan to
protect against cybersecurity threats and clarifies that stakeholders
are not precluded from taking action to protect their systems.
Additionally, we moved the requirement that the owner or operator
must notify the cognizant COTP for a facility or OCS facility, or the
MSC for U.S.-flagged vessels, by the most rapid means practicable as to
the nature of the additional measures, the circumstances that prompted
these additional measures, and the period of time these additional
measures are expected to be in place into new paragraph Sec.
101.630(e)(2)(ii). This paragraph provides that when the entity makes
changes that do not allow for Coast Guard approval before
implementation, they must notify the appropriate Coast Guard contact as
soon as possible so that the Coast Guard has the most up-to-date and
accurate description of the Cybersecurity Plan.
Finally, we clarified in Sec. 101.630(e)(3) and (4) that the CySO
must amend the Cybersecurity Plan, as soon as reasonably practicable,
in light of the individual circumstances, but, in any case, not longer
than 96 hours, when the owner or operator has changed.
Under Sec. 101.630(f)(1), the CySO must ensure that an audit of
the Cybersecurity Plan and its implementation is performed annually,
beginning no later than 1 year from the initial date of approval.
Additional audits must be conducted if there is a change in ownership
or modifications of cybersecurity measures, but such audits may be
limited to sections of the Plan affected by the modification. See Sec.
101.630(f)(2) and (3). Those conducting an internal audit must have a
level of knowledge and independence specified in Sec. 101.630(f)(4).
Under Sec. 101.630(f)(5), if the results of the audit require the
Cybersecurity Plan to be amended, the CySO must submit the amendments
to the Coast Guard for review within 30 days of completing the audit.
Section 101.635--Drills and Exercises
Under Sec. 101.635(a)(1), cybersecurity drills and exercises are
required to test the proficiency of U.S.-flagged vessel, facility, and
OCS facility personnel in assigned cybersecurity duties and in the
effective implementation of the VSP, FSP, OCS FSP, and Cybersecurity
Plan. Drills and exercises must also enable the CySO to identify any
related cybersecurity deficiencies that need to be addressed.
Additionally, in Sec. 101.635(a)(2), we changed ``cyber incident'' to
a ``reportable cyber incident.''
Cybersecurity drills generally test an operational response of at
least one specific element of the Cybersecurity Plan, as determined by
the CySO, such as access control for a critical IT or OT system, or
network scanning. In this final rule, we changed the requirement in
Sec. 101.635(b)(1) from conducting at least one cybersecurity drill
every 3 months to conducting two cybersecurity drills every 12 months,
and added ``as required by 33 CFR 104.230, 105.220, or 106.225,'' where
appropriate.
Cybersecurity exercises are a full test of an organization's
cybersecurity regime and include substantial and active participation
of cybersecurity personnel. The participants may include local, State,
and Federal Government personnel. Cybersecurity exercises generally
test and evaluate the organizational capacity to manage a combination
of elements in the Cybersecurity Plan, such as detecting, responding
to, and mitigating a cyber incident.
The exercises are required at least once each calendar year, with
no more than 18 months between exercises. In Sec. 101.635(c)(2)(iii),
where exercises may be combined with other appropriate exercises, we
added ``as required by 33 CFR 104.230, 105.220, or 106.225.'' Exercises
may be specific to a U.S.-flagged vessel, facility, or OCS facility, or
may serve as part of a cooperative exercise program or port exercises.
The exercises for the Cybersecurity Plans can be combined with other
required security exercises, if appropriate.
The drill or exercise requirements specified in this section may be
satisfied by implementing cybersecurity measures required by the VSP,
FSP, OCS FSP, and Cybersecurity Plan after a cyber incident, as long as
the U.S.-flagged vessel, facility, or OCS facility achieves and
documents the drill and exercise goals for the cognizant COTP or MSC.
Any corrective action must be addressed and documented as soon as
possible.
Section 101.640--Records and Documentation
This section requires owners and operators to follow the
recordkeeping requirements in 33 CFR 104.235 for vessels, 33 CFR
105.225 for facilities, and 33 CFR 106.230 for OCS facilities. For
example, records must be kept for at least 2 years and be made
available to the Coast Guard upon request. The records can be kept in
paper or electronic format and must be protected against unauthorized
access, deletion, destruction, amendment, and disclosure. Records that
each U.S.-flagged vessel, facility, or OCS facility keep vary because
each organization maintains records specific to their operations. At a
minimum, the records must capture the following activities: training,
drills, exercises, cybersecurity threats, reportable cyber incidents,
and audits of the Cybersecurity Plan as set
[[Page 6339]]
forth in the cited recordkeeping requirements above and made applicable
to records under this subpart, per Sec. 101.640. We revised the list
of activities in Sec. 101.640 to replace ``incidents'' with
``reportable cyber incidents,'' since we have revised this final rule
to use that term.
Section 101.645--Communications
This section requires the CySO to maintain an effective means of
communication to convey changes in cybersecurity conditions to the
personnel of the U.S.-flagged vessel, facility, or OCS facility. In
addition, the CySO must maintain an effective and continuous means of
communicating with their security personnel, U.S.-flagged vessels
interfacing with the facility or OCS facility, the cognizant COTP, and
national and local authorities with security responsibilities. We
revised Sec. 101.645(a) to clarify that the means for effective
notification must be documented in Section 5 of the Cybersecurity Plan.
Documenting the communication process for changes will promote active
information sharing among the various people responsible for the
cybersecurity measures of the U.S.-flagged vessel, facility, or OCS
facility.
Section 101.650--Cybersecurity Measures
This section lists specific cybersecurity measures to identify
risks, detect threats and vulnerabilities, protect critical systems,
and recover from cyber incidents. Any intentional gaps in cybersecurity
measures must be documented as accepted risks under Sec.
101.630(c)(12). If the owner or operator is unable to comply with the
requirements of this subpart, they may seek a waiver or an equivalence
determination under Sec. 101.665.
A discussion of each component of Sec. 101.650 follows.
Section 101.650 Paragraph (a): Account Security Measures
This paragraph lists minimum account measures to protect critical
IT and OT systems from unauthorized cyber access and limit the risk of
a cyber incident. Access control is a foundational category,
highlighted as a ``Protect'' function of NIST's CSF.\67\ Existing
regulations in Sec. Sec. 104.265, 105.255 through 105.260, and 106.260
through 106.265 prescribe control measures to limit access to
restricted areas and detect unauthorized introduction of devices
capable of damaging U.S.-flagged vessels, facilities, OCS facilities,
or ports. This provision is derived from NIST's standards mentioned
earlier for the cyber domain and establish minimum account security
measures to manage credentials and secure access to critical IT and OT
systems.
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\67\ NIST CSF, www.nist.gov/cyberframework/protect, accessed
August 13, 2024.
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Account security measures for cybersecurity include lockouts on
repeated failed login attempts, password requirements, multifactor
authentication, applying the principle of least privilege to
administrator or otherwise privileged accounts, and removing
credentials of personnel no longer associated with the organization.
Numerous consensus standards that are generally accepted employ similar
requirements.\68\ Together, these provisions mitigate the risks of
brute force attacks, unauthorized access, and privilege escalation. The
owner or operator is responsible for implementing and managing these
account security measures, including ensuring that user credentials are
removed or revoked when a user leaves the organization. The CySO must
ensure documentation of such measures in Section 7 of the Cybersecurity
Plan. We revised Sec. 101.650(a)(1), which required automatic account
lockouts after repeated failed login attempts for both IT and OT
systems to remove the reference to OT systems. In Sec. 101.650(a)(2),
we added the information that, when changing default passwords is not
feasible, appropriate compensating security controls must be
implemented and documented.
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\68\ See, for example, NIST CSF: PR.AC, CIS Controls 1, 12, 15,
16, and COBIT DSS05.04, DSS05.10, DSS06.10, and ISA 62443-2-1.
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Section 101.650 Paragraph (b): Device Security Measures
This paragraph provides specific requirements to mitigate risks and
vulnerabilities in critical IT and OT systems and equipment. With
increased connectivity to public internet, networks on U.S.-flagged
vessels, facilities, and OCS facilities have an expansive attack
surface. These provisions reduce the risks of unauthorized access,
malware introduction, and service interruption. This paragraph applies
the ``Identify'' function of the NIST CSF.\69\ Existing regulations in
33 CFR 104.265, 105.255 through 105.260, and 106.260 through 106.265
are similar. For example, Sec. 105.260 limits access to areas that
require a higher degree of protection.
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\69\ NIST CSF; Identify, ``NIST Cybersecurity Publication by
Category,'' Asset Management ID.AM, updated May 3, 2021,
www.nist.gov/cyberframework/identify, accessed August 13, 2024. NIST
Special Publication 800-53, Revision 5, ``Security and Privacy
Controls for Information Systems and Organizations,'' September
2020, page 107, https://doi.org/10.6028/NIST.SP.800-53r5, accessed
August 13, 2024.
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Paragraph (b) also requires owners and operators to designate
critical IT and OT systems.\70\ Developing and maintaining an accurate
inventory and network map reduces the risk of unknown or improperly
managed assets. The Cybersecurity Plan also governs device management.
The CySO must maintain the network map and develop and maintain the
list of approved hardware, software, and firmware. In addition to
identifying risks, these provisions aid in the proper lifecycle
management of assets, including patching and end-of-life management.
These requirements are foundational to many industry consensus
standards and reinforce Coast Guard regulations to protect
communication networks. We revised Sec. 101.650(b) to require that
device security measures must be addressed, rather than documented, in
Section 6 of the Cybersecurity Plan and also to clarify that they must
be made available to the Coast Guard upon request. In Sec.
101.650(b)(2), we removed the requirement that exemptions must be
justified and documented in the Cybersecurity Plan.
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\70\ To help CySOs identify which systems are critical, CG-FAC
has published maritime specific CSF profiles on its homepage at
www.dco.uscg.mil/Our-Organization/Assistant-Commandant-for-Prevention-Policy-CG-5P/Inspections-Compliance-CG-5PC-/Office-of-Port-Facility-Compliance/Domestic-Ports-Division/cybersecurity/,
accessed August 13, 2024, and in pages 20 through 24 of Appendix A,
Maritime Bulk Liquid Transfer Profile at https://view.officeapps.live.com/op/view.aspx?src=https%3A%2F%2Fwww.dco.uscg.mil%2FPortals%2F9%2FCG-FAC%2FDocuments%2FCyber%2520Profiles%2520Overview.docx%3Fver%3D2018-01-10-143126-467&wdOrigin=BROWSELINK, accessed August 13, 2024.
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Section 101.650 Paragraph (c): Data Security Measures
This paragraph prescribes fundamental data security measures that
stem from the ``Protect'' function of the NIST CSF. Data security
measures protect personnel, financial, and operational data and are
consistent with basic risk management activities of the maritime
industry. The IMO recognizes the importance of risk management related
to data security on U.S.-flagged vessels,\71\ and the Coast Guard
previously highlighted data security
[[Page 6340]]
measures in its policy for MTSA-regulated facilities.\72\
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\71\ MSC-FAL.1/Circ.3/Rev.1: ``Implement risk control processes
and measures, and contingency planning to protect against a cyber-
event and ensure continuity of shipping operations.''
\72\ NVIC 01-20 at page 2: ``Each facility should also determine
how, and where, its data is stored and, if it is stored offsite,
whether the data has a critical link to the safety and/or security
functions of the facility. If such a critical link exists, the
facility should address any vulnerabilities . . . . ''
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Data security measures prevent data loss and aid in detection of
malicious activity on critical IT and OT systems. The fundamental
measures here establish baseline protections upon which owners and
operators can build. This paragraph requires logs to be securely
captured, stored, and protected so that they are accessible only by
privileged users, and require encryption for data in transit and data
at rest. CySOs will rely on generally accepted industry standards and
risk management principles to determine the suitability of specific
encryption algorithms for certain purposes, such as protecting critical
IT and OT data with a more robust algorithm than for routine data. \73\
Consistent with the discussion earlier about the term ``logs,'' we
revised Sec. 101.650(c)(1) to refer to logs, which we have defined in
this final rule, rather than data logs. Additionally, we revised Sec.
101.650(c)(2) to provide that effective encryption must be deployed to
maintain confidentiality of sensitive data and integrity of IT and OT
traffic, when technically feasible, rather than specifically referring
to suitably strong algorithms. A CySO must establish detailed data
security policies in Section 4 of the Cybersecurity Plan, adapting
these policies to the unique operations of the U.S.-flagged vessel,
facility, or OCS facility.
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\73\ See, for example, ISA 62443-3-3, CIS CSC 13, 14 in the EDM
NIST Cybersecurity Framework Crosswalks, available at www.cisa.gov/sites/default/files/publications/4_NIST_CSF_EDM_Crosswalk_v3_April_2020.pdf, accessed August 13,
2024.
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Section 101.650 Paragraph (d): Cybersecurity Training for Personnel
This paragraph specifies cybersecurity training requirements.
Security training is a vital aspect of the MTSA. Relevant provisions in
33 CFR already require all personnel to have knowledge, through
training, or equivalent job experience, in the ``Recognition and
detection of dangerous . . . devices.'' \74\ Since 2020, the Coast
Guard has interpreted this requirement to include relevant
cybersecurity training.\75\ While formal training may be appropriate,
the Coast Guard is not mandating a format of training. However, the
training must, at minimum, cover relevant provisions of the
Cybersecurity Plan to include recognizing, detecting, and circumventing
cybersecurity threats; and reporting cyber incidents to the CySO.
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\74\ 33 CFR 104.225(c) (Vessels), 105.215(c) (Facilities), and
106.220(c) (OCS Facilities).
\75\ NVIC 01-20 ENCL(1) at page 3: ``Describe how cybersecurity
is included as part of personnel training, policies, and procedures,
and how this material will be kept current and monitored for
effectiveness.''
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The types of training must also be consistent with the roles and
responsibilities of personnel, including access to critical IT and OT
systems and operating network-connected machineries. Key cybersecurity
personnel and management need to have current knowledge of threats to
deal with potential cyber-attacks and understand procedures for
responding to a cyber incident. The owner, operator, or CySO must
ensure that all personnel designated by the CySO complete the core
training within 5 days of gaining system access, but no later than 30
days after hiring, and annually thereafter, and that key personnel
receive specialized training annually or more frequently as needed.
Existing personnel are required to receive training on relevant
provisions of the Cybersecurity Plan within 60 days of the Plan being
approved, and, for all other required training, within 180 days of the
effective date of this final rule and annually thereafter. (See Sec.
101.650(d)(4)). We added a requirement in Sec. 101.650(d)(3) that when
personnel must access IT or OT systems but are unable to receive
cybersecurity training as specified in paragraphs (d)(1) and (d)(2) of
this section, they must be accompanied or monitored by a person who has
completed the training specified in paragraphs (d)(1) and (d)(2) of
this section. As a result, we redesignated the originally proposed
Sec. 101.650(d)(3) as Sec. 101.650(d)(4).
Section 101.650 Pharagraph (e): Risk Management
This paragraph establishes three levels of Cybersecurity Assessment
and risk management: (1) conducting annual Cybersecurity Assessments;
(2) completing penetration testing upon renewal of a VSP, FSP, or OCS
FSP; and (3) ensuring ongoing routine system maintenance. The owner,
operator, or designated CySO must ensure that these activities, which
are listed in Sections 11 and 12 of the Cybersecurity Plan, are
documented and completed.
Following a Cybersecurity Assessment, the CySO must incorporate
feedback from the assessment into the Cybersecurity Plan through an
amendment to the Plan. We revised the timeframe that a Cybersecurity
Assessment must be conducted from within 1 year from the effective date
of a final rule and annually thereafter to 24 months after the
effective date of the final rule and annually thereafter. The
Assessment must be conducted sooner than annually if there is a change
in ownership of a U.S.-flagged vessel, facility, or OCS facility. We
removed the requirement for more frequent Cybersecurity Assessments if
there is a major amendment to the Cybersecurity Plan.
We updated the implementation period in Sec. 101.650(e)(1) to be
24 months from the effective date of this final rule. We revised Sec.
101.650(e)(1)(i) to clarify that owners or operators must analyze all
networks to identify vulnerabilities to critical IT and OT systems and
the risk posed by each digital asset. We added a new paragraph Sec.
101.650(e)(1)(iv) to explain that the Cybersecurity Assessment must
document and ensure patching or implementing of documented compensating
controls for all KEVs in critical IT or OT systems, without delay,
rather than mitigate any unresolved vulnerabilities. We also
redesignated the originally proposed Sec. 101.650(e)(1)(iv) as Sec.
101.650(e)(1)(v).
While Cybersecurity Assessments provide a valuable picture of
potential security weaknesses, penetration tests can add additional
context by demonstrating whether malicious actors can leverage those
weaknesses. Penetration tests can also help prioritize resources based
on what poses the most risk. We revised Sec. 101.650(e)(2) to specify
that penetration testing must be conducted in conjunction with Plan
renewal and that a letter certifying that the test was conducted, as
well as all identified vulnerabilities, must be included in the VSA,
FSA, or OCS FSA.
Routine system maintenance requires an ongoing effort to identify
vulnerabilities and must include scanning and reviewing KEVs by
documenting, tracking, and monitoring them. These provisions mirror the
security system and equipment maintenance requirements in 33 CFR
104.260 for vessels, 33 CFR 105.250 for facilities, and 33 CFR 106.255
for OCS facilities, and reflect the Coast Guard's longstanding view on
cybersecurity. To improve risk management across the maritime sector,
each owner, operator, or designated CySOs must establish, subject to
any applicable antitrust law limitations,\76\ information-sharing
[[Page 6341]]
procedures for their organizations, to include procedures to receive
and act on KEVs, as well as methods for sharing threat and
vulnerability information.
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\76\ The sharing of competitively sensitive information between
or among competitors raises antitrust concerns. For example,
information sharing is not exempted under the Cybersecurity
Information Sharing Act of 2015 if the information shared results in
price fixing, market allocation, boycotting, monopolistic conduct,
or other collusive conduct.
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The ``Protect'' function of the NIST CSF emphasizes the importance
of strong processes and procedures for protecting information.\77\ For
example, organizations must ensure that information and records (data)
are managed consistently with the organization's risk strategy to
protect the confidentiality, integrity, and availability of
information. Risk management is key in protecting IT and OT components
that may include cybersecurity vulnerabilities in their design, code,
or configuration.
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\77\ NIST CSF Internal Controls, Appendix A, Table A-1, PR.IP-
12, page 261, link.springer.com/content/pdf/bbm:978-1-4842-3060-2/1.pdf, accessed August 13, 2024.
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Owners and operators may use information-sharing services or
organizations such as an Information Sharing and Analysis Center or an
Information Sharing and Analysis Organization. The Coast Guard does not
endorse specific information-sharing organizations; owners and
operators are free to use information-sharing organizations to suit
their needs.\78\ Industry consensus standards provide generally
accepted techniques that sanitize and reduce attribution to information
to ensure that information sharing does not compromise proprietary
business information.\79\ In addition, regardless of the services or
organizations used, owners and operators should comply with applicable
antitrust laws and not share competitively sensitive information, such
as price or cost data, that can result in unlawful price-fixing, market
allocation, or other forms of competitor collusion. Use of any
information-sharing services or organizations do not meet or replace
reporting requirements under 33 CFR 101.305.
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\78\ The Coast Guard encourages CySOs to explore resources
through CGCYBER Maritime Cyber Readiness Branch, available at
https://www.uscg.mil/MaritimeCyber/, accessed August 13, 2024; see
also CISA's ``Information Sharing and Awareness,'' available at
https://www.cisa.gov/information-sharing-and-awareness, accessed
August 13, 2024.
\79\ See, for example, NIST Special Publication 800-150, ``Guide
to Cyber Threat Information Sharing,'' Johnson et al, October 2016,
nvlpubs.nist.gov/nistpubs/specialpublications/nist.sp.800-150.pdf,
accessed August 13, 2024.
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The Coast Guard emphasized its commitment to helping maritime
industry stakeholders identify and address vulnerabilities in its 2023
Cyber Trends and Insights in the Marine Environment report.\80\ In that
report, the Coast Guard highlighted additional resources that CySOs
should leverage to manage cybersecurity vulnerabilities.
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\80\ ``2023 Cyber Trends and Insights in the Marine
Environment,'' April 12, 2024, https://www.uscg.mil/Portals/0/Images/cyber/CTIME_2023_FINAL.pdf, accessed August 13, 2024.
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Section 101.650 Paragraph (f): Supply Chain
This paragraph includes provisions to specify measures to manage
cybersecurity risks in the supply chain. Legitimate third-party
contractors and vendors may inadvertently provide a means of attack or
vectors that allow malicious actors to exploit vulnerabilities within
the supply chain. Section 1.1 of the NIST CSF emphasizes managing
cybersecurity risks in the supply chain as part of the ``Identify''
function.\81\
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\81\ NIST CSF, Version 1.1, ``ID.SC: Supply Chain Risk
Management,'' https://csf.tools/reference/nist-cybersecurity-framework/v1-1/id/id-sc/, accessed August 13, 2024.
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Under this paragraph, the owner, operator, or CySO must ensure that
measures to manage cybersecurity risks in the supply chain are in place
to mitigate the risks associated with external parties. These measures
include considering cybersecurity capabilities in selecting vendors,
establishing a process through which all IT and OT vendors or service
providers notify the owner or operator or designated CySO of any
cybersecurity vulnerability or reportable cyber incident, without
delay, and monitoring third-party connections. In Sec. 101.650(f)(3),
we replaced ``incidents'' with ``reportable cyber incidents,'' since we
have revised this final rule to use that term, where applicable, and
removed ``breaches.''
Through their contractual agreements, vendors must ensure the
integrity and security of software and hardware, such as software
releases and updates, notifications, and mitigations of
vulnerabilities. These provisions must establish a minimum level of CRM
within the supply chain. Industry standards provide additional
measures.\82\ The IMO also recognizes cybersecurity risks in the supply
chain, and these provisions align with the guidelines and
recommendations referenced in MSC-FAL Circ. 3/Rev.1.\83\
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\82\ See, for example, NIST Special Publication 800-161,
``Supply Chain Risk Management Practices for Federal Information
Systems and Organizations,'' May 2022, https://doi.org/10.6028/NIST.SP.800-161r1, accessed August 13, 2024.
\83\ MSC-FAL.1/Circ.3/Rev.1, 2.1.6 and 4.2; see footnote 34.
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Section 101.650 paragraph (g): Resilience
This paragraph lists a few key activities to ensure that U.S.-
flagged vessels, facilities, and OCS facilities can recover from major
cyber incidents with minimal impact to critical operations. Provisions
under response and recovery can help an organization recover from a
cyber-attack and restore capabilities and services.
This final rule requires the owner, operator, or CySO to ensure the
following response and recovery activities: report reportable cyber
incidents to the NRC; develop, implement, maintain, and exercise the
Cyber Incident Response Plan; periodically validate the effectiveness
of the Cybersecurity Plan; and perform backups of critical IT and OT
systems. The Coast Guard accepts review of a cyber incident as meeting
the periodic validation requirement in Sec. 101.650(g). We revised
Sec. 101.650(g)(1) to replace the provisional ``any cyber incidents''
with ``reportable cyber incidents,'' since that is now a defined term
in this final rule, after we received and considered public comments on
that term. We removed the reference to a telephone number for reporting
to the NRC. We also revised Sec. 101.650(g)(3) to remove ``tabletop''
and refer only to ``exercises.'' The Coast Guard changed this for
consistency with Sec. 101.635, which defines ``exercises'' to include
live exercises as well as ``tabletop simulations.'' The intent here is
to use the more general ``exercises,'' which includes but is not
limited to tabletop exercises or simulations, for consistency with
Sec. 101.635.
In addition, the NIST CSF describes numerous provisions within the
``Recover'' function aimed at improving response and recovery.\84\ The
IMO also notes resilience.\85\
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\84\ NIST CSF, Version 1.1 ``RC: Recover,'' https://csf.tools/reference/nist-cybersecurity-framework/v1-1/rc/, accessed August 13,
2024.
\85\ MSC-FAL Circ. 3/Rev. 1, 3.5.5; see footnote 34.
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Section 101.650 Paragraph (h): Network Segmentation
This paragraph requires a CySO to ensure that the network is
segmented and to document those activities in the Cybersecurity Plan.
Network integrity is a key provision under the ``Protect'' function of
the NIST CSF.\86\ Network architectures vary widely based on the
operations of a U.S.-flagged vessel, facility, or OCS facility.
Separating IT and OT networks is challenging, and it
[[Page 6342]]
becomes increasingly difficult with an increase in the various devices
connected to the network. Network segmentation ensures that valuable
information is not shared with unauthorized users and decreases damage
that can be caused by malicious actors. Nonetheless, the Coast Guard
recognizes that the IT and OT interface represents a weak link.
Industry standards in this area are evolving, and it is an area that
NIST continues to research.\87\
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\86\ NIST CSF, Version 1.1, ``PR.AC-5: Network integrity is
protected (for example, network segregation, network
segmentation).'' csf.tools/reference/nist-cybersecurity-framework/
v1-1/pr/pr-ac/pr-ac-5/, accessed July 19, 2023.
\87\ See NIST Special Publication 800-82r3,'' Guide to
Operational Technology (OT) Security,'' draft published April 26,
2022; doi.org/10.6028/NIST.SP.800-82r3.ipd, accessed July 19, 2023.
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Section 101.650 Paragraph (i): Physical Security
This paragraph specifies that, along with the cybersecurity
provisions for inclusion in this part, owners, operators, or CySOs must
manage physical access to IT and OT systems. As described in the
``Protect'' function of the NIST CSF, physical security protects
critical IT and OT systems by limiting access to the human-machine
interface (HMI).\88\ Physical security measures here supplement the
existing VSA, FSA, and OCS FSA requirements in 33 CFR 104.270 for
vessels, 33 CFR 105.260 for facilities, and 33 CFR 106.260 for OCS
facilities. Similarly, under this paragraph, the CySO must designate
areas restricted to authorized personnel and secure HMIs and other
hardware. Also under this paragraph, the CySO must establish policies
to restrict the use of unauthorized media and hardware. These
provisions mirror existing Coast Guard policy outlined in NVIC 01-
20.\89\
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\88\ NIST CSF, Version 1.1, ``PR.AC-2: Physical Access to Assets
is Managed and Protected.'' csf.tools/reference/nist-cybersecurity-
framework/v1-1/pr/pr-ac/pr-ac-2/, accessed July 19, 2023.
\89\ NVIC 01-20, enclosure (1), at page 4: ``Security measures
for access control 33 CFR 105.255 and 106.260 Establish security
measures to control access to the facility. This includes cyber
systems that control physical access devices such as gates and
cameras, as well as cyber systems within secure or restricted areas,
such as cargo or industrial control systems. Describe the security
measures for access control.'' (85 FR 16108).
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Section 101.655--Cybersecurity Compliance Dates
This section states that a Cybersecurity Plan, as required by this
final rule, must be made available to the Coast Guard for review no
later than 24 months from the effective date of this final rule, as
required by 33 CFR 104.410 for vessels, 33 CFR 105.410 for facilities,
and 33 CFR 106.410 for OCS facilities. We updated Sec. 101.655 to
reflect the revised implementation period. We also corrected the cross-
references in this section from Sec. Sec. 104.415, 105.415, and
106.415 to Sec. Sec. 104.410, 105.410, and 106.410, respectively.
Section 101.660--Cybersecurity Compliance Documentation
This section allows the Coast Guard to verify an approved
Cybersecurity Plan for U.S.-flagged vessels, facilities, and OCS
facilities. Each owner or operator must ensure that the cybersecurity
portion of their Plan and penetration test results are available to the
Coast Guard upon request. We revised what we proposed in Sec. 101.660
to expressly state that Alternative Security Program provisions apply
to cybersecurity compliance documentation.
Section 101.665--Noncompliance, Waivers, and Equivalents
This section provides owners and operators the opportunity for
waiver and equivalence determinations from the cybersecurity
requirements in subpart F of this final rule, pursuant to the existing
regulations in 33 CFR 104.130, 104.135, 105.130, 105.135, and 106.130.
Under this section, an owner or operator, after completion of the
required Cybersecurity Assessment, may seek a waiver or an equivalence
determination for the requirements in subpart F using the standards and
submission procedures applicable to a U.S.-flagged vessel, facility, or
OCS facility, as outlined in 33 CFR 104.130, 104.135, 105.130, 105.135,
106.125, or 106.130.
The Coast Guard revised Sec. 101.665 to clarify that the owner or
operator must conduct the Cybersecurity Assessment prior to requesting
a waiver or equivalence because it is not possible to know if a
requirement is unnecessary until the Cybersecurity Assessment is
completed. As previously noted, one of the primary purposes of an
Assessment is to identify whether there are actual or potential
vulnerabilities to IT or OT systems, equipment, or procedures. The
Assessment is the evaluation that helps determine whether there exists
IT or OT systems, equipment, procedures, or other cyber elements that
may be applicable to these rules. It is the review a regulated entity
can point to in explaining why the request for a waiver or equivalence
is necessary.
The Coast Guard finds it unlikely that any regulated entity would
have no IT or OT systems or equipment. However, if an entity has no IT
or OT footprint, then their Assessment would easily identify that fact.
While this was implied and accounted for in the NPRM by our
assumption that all owners and operators would need to complete a
Cybersecurity Assessment and Plan (see RA, section Cybersecurity Plan
Costs), we have now stated this explicitly within the text. The Coast
Guard will also need the information an owner or operator will gain
from completing an Assessment to assess the flexibility possible for
the entity making the request, in light of their individual
circumstances.
The Coast Guard removed the text requiring the vessel or facility
to be ``unable to meet the requirements in subpart F,'' as originally
proposed. Instead, we specify that the waiver or equivalence
determination may be sought using the same standards and submission
procedures applicable to a U.S.-flagged vessel, facility, or OCS
facility, as outlined in 33 CFR 101.130, 104.130, 104.135, 105.130,
105.135, 106.125, or 106.130. We made this change for consistency with
the existing waiver and equivalence provisions in 33 CFR parts 104,
105, and 106.
Additionally, this section provides that, if an owner or operator
must temporarily deviate from the requirements in this part, they must
notify the cognizant COTP for facilities or OCS facilities, or the MSC
for U.S.-flagged vessels, and may request temporary permission to
continue to operate under the provisions as outlined in 33 CFR 104.125,
105.125, or 106.120. We updated this text from ``if an owner or
operator is temporarily unable to meet'' the requirements to ``if an
owner or operator must temporarily deviate from'' for consistency with
existing temporary waiver regulations as outlined in 33 CFR 104.125,
105.125, or 106.120.
Finally, the Coast Guard made editorial changes within Sec.
101.665 to reflect that facilities and OCS facilities will notify the
cognizant COTP for temporary waiver requests, whereas U.S.-flagged
vessels will make this notification to the MSC.
Section 101.670--Severability
This section reflects the Coast Guard's intent that the provisions
of subpart F be considered severable from each other to the greatest
extent possible. For instance, if a court of competent jurisdiction
were to hold that this final rule or a portion thereof may not be
applied to a particular owner or operator or in a particular
circumstance, the Coast Guard intends for the court to leave the
remainder of this final rule in place with respect to all other covered
persons and circumstances. The inclusion of a severability clause in
subpart F does not imply a position on
[[Page 6343]]
severability in other Coast Guard regulations.
Section 160.202--Definitions
This section revises the definition for hazardous condition to add
cyber incident. In the NPRM, we requested public comments on whether we
should amend this definition, and commenters were supportive of the
change, as discussed previously.
VII. Request for Comment
The Coast Guard requests public comment on a potential 2-to-5-year
delay for the implementation periods for new requirements applicable to
U.S.-flagged vessels. This rule contains three broad categories of
implementation periods, only two of which would be affected by a delay.
First, entities that have not reported to the Coast Guard pursuant
to, or are not subject to, 33 CFR 6.16-1 must ensure that all
reportable cyber incidents are reported to the NRC (Sec.
101.620(b)(7)) immediately upon the effective date of this rule.
Because U.S.-flagged vessels have been subject to the reporting
requirements in 33 CFR 6.16-1 since the issuance of Executive Order
14116 on February 21, 2024, we are not seeking comments on whether to
delay the implementation period for incident reporting.
Second, this rule contains a variety of training requirements in
Sec. 101.650 that must be implemented within 6 months after the
effective date of this rule.
Third, this rule contains three provisions, as follows, that must
be implemented within 24 months after the effective date of this rule:
Owners and operators must designate, in writing, the CySO
(Sec. 101.620(b)(3) and (c)(1));
Owners and operators must conduct the Cybersecurity
Assessment within 24 months after the effective date of this final rule
and annually thereafter (or sooner than annually if there is a change
in ownership) (Sec. 101.650(e)(1)); and
Owners and operators must submit the Cybersecurity Plan to
the Coast Guard for approval within 24 months after the effective date
of this final rule (Sec. 101.655).
As noted in Section V of this preamble, the Coast Guard received
several public comments asking us to extend the implementation period
for different periods, ranging from 36 to 48 months beyond those we
proposed in the NPRM. Many of these comments were specific to vessels.
Some commenters suggested that U.S.-flagged vessels would require more
time than facilities to implement new requirements in this rule because
of differences in the pre-existing guidance provided for vessels in
CVC-WI-027(3), Vessel Cyber Risk Management Work Instruction, as
opposed to guidance for facilities in NVIC 01-20, Guidelines for
Addressing Cyber Risks at Maritime Transportation Security Act (MTSA)
Regulated Facilities.\90\ Some commenters also remarked on the rule's
potential burden on U.S.-flagged vessels, writing that the United
States should not impose specific requirements for the flag state on
its vessels without imposing the same on foreign-flagged vessels. A
commenter asserted that, once the IMO establishes international
requirements, a new NPRM should be issued to implement these
requirements for U.S.-flagged vessels. And some commenters remarked
upon U.S.-flagged vessels' ability to complete training requirements
within six months of the rule's effective date.
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\90\ See footnote 13.
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As described earlier in this preamble, in response to these
comments, the Coast Guard has adjusted the final rule generally to
contain a phased-in implementation schedule that results in greater
lead time for implementation. Particularly in light of the public
comments specific to vessels described in the previous paragraph, the
Coast Guard invites the public to comment on whether we should further
delay the implementation periods for new requirements applicable to
U.S.-flagged vessels for a period of 2 to 5 years beyond what is
specified in this rule. Comments submitted should include information
supporting the specific period that the commenter suggests, with
respect to specific provisions of the rule. (See the ADDRESSES portion
of this preamble, under Comment period for solicited additional
comments, for instructions on submitting comments.) After reviewing any
comments and supporting information received, the Coast Guard may issue
a future rule to implement this additional delay to provide time for
U.S.-flagged vessels to come into compliance with these requirements.
The Coast Guard also welcomes comment on whether a delay for vessels
alone could result in unanticipated consequences for facilities.
VIII. Regulatory Analyses
We developed this final rule after considering numerous statutes
and Executive orders related to rulemaking. A summary of our analyses
based on these statutes or Executive orders follows.
A. Regulatory Planning and Review
Executive Order 12866 (Regulatory Planning and Review), as amended
by Executive Order 14094 (Modernizing Regulatory Review), and Executive
Order 13563 (Improving Regulation and Regulatory Review), direct
agencies to assess the costs and benefits of available regulatory
alternatives and, if regulation is necessary, to select regulatory
approaches that maximize net benefits (including potential economic,
environmental, public health and safety effects, distributive impacts,
and equity). Executive Order 13563 emphasizes the importance of
quantifying costs and benefits, reducing costs, harmonizing rules, and
promoting flexibility.
The Office of Management and Budget (OMB) has designated this rule
a ``significant regulatory action,'' as defined under section 3(f) of
Executive Order 12866, as amended by Executive Order 14094, but it is
not significant under section 3(f)(1) because its annual effects on the
economy do not exceed $200 million in any year of the analysis.
Accordingly, OMB has reviewed this rule. A final RA follows.
The Coast Guard received 99 comment submissions during the 90-day
comment period that ended on May 22, 2024. We received numerous public
comments related to the RA in the NPRM, including several commenters
stating that the Coast Guard underestimated the costs related to
certain provisions. These provisions included supply chain measures,
device security measures, penetration testing, routine system
maintenance, drills and exercises, network segmentation, CySO wages,
and OCS facility inspections. In light of some of these comments, we
have increased certain cost estimates associated with drills,
exercises, and penetration testing. In addition, we have lowered the
proposed frequency of drill requirements from quarterly to twice
annually, which reduces the real burden faced by affected entities,
even though our increased hour burden estimates associated with
development and participation involved with drill and exercise
requirements have increased our cost estimates. This also increases
marginal benefits of drills by allowing owners and operators to develop
and focus on more comprehensive drills for the remaining drills or
allocate resources to the implementation or improvement of other
cybersecurity measures. Beyond these cost estimate updates, and an
update to our affected population based on a discrepancy noted by
another public commenter, the
[[Page 6344]]
methodology employed in the RA is unchanged.
In accordance with OMB Circular A-4 (available at
www.whitehouse.gov/omb/circulars/), we have prepared an accounting
statement showing the classification of impacts associated with this
final rule.
Agency/Program Office: U.S. Coast Guard
Rule Title: Cybersecurity in the Marine Transportation System
RIN#: 1625-AC77
Date: August 2024 (millions, 2022 dollars)
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[[Page 6346]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.008
The Coast Guard has updated its maritime security regulations by
adding minimum cybersecurity requirements to a new subpart F in 33 CFR
part 101 for U.S.-flagged vessels, facilities, and OCS facilities
required to have a security plan under 33 CFR parts 104, 105, and 106.
Specifically, this final rule requires owners and operators of U.S.-
flagged vessels, facilities, and OCS facilities to develop an effective
Cybersecurity Plan, which includes actions to prepare for, prevent, and
respond to threats and vulnerabilities. One of these actions is to
assign qualified personnel to implement the Cybersecurity Plan and all
activities within the Plan. The Cybersecurity Plan includes the
following: designating a CySO; conducting a Cybersecurity Assessment;
developing and submitting the Plan to the Coast Guard for approval;
operating a U.S.-flagged vessel, facility, and OCS facility in
accordance with the Plan; implementing security measures based on new
cybersecurity vulnerabilities; and reporting cyber incidents to the
NRC, as defined in this preamble.
This final rule further requires owners and operators of U.S.-
flagged vessels, facilities, and OCS facilities to perform
cybersecurity drills and exercises in accordance with their VSP, FSP,
and OCS FSP. Owners and operators of U.S.-flagged vessels, facilities,
and OCS facilities are also required to maintain records of
cybersecurity related information in paper or electronic format.
Lastly, this final rule requires certain cybersecurity measures to
identify risks, detect threats and vulnerabilities, protect critical
systems, and to recover from cyber incidents. These measures include
account security measures, device security measures, data security
measures, cybersecurity training for personnel, risk management, supply
chain risk measures, penetration testing, resilience measures, network
segmentation, and physical security.
Baseline Summary
The Coast Guard is not codifying existing guidance in this final
rule. The requirements of this final rule and the costs and benefits we
estimate in this RA are new. The Coast Guard drafted the requirements
of this final rule based on NIST's Framework for Improving Critical
Infrastructure Cybersecurity, NIST's standards and best practices, and
CISA's CPGs.
In February 2020, the Coast Guard issued NVIC 01-20, which provided
clarity and guidance to MTSA-regulated facility and OCS facility owners
and operators regarding existing requirements in the MTSA for computer
systems and network vulnerabilities. However, the NVIC does not contain
cybersecurity requirements for facility and OCS facility owners.
Furthermore, the NVIC does not address the topic of cybersecurity for
vessel owners and operators.
The IMO has issued other guidance on Cybersecurity in the past 7
years. In 2017, the IMO adopted resolution MSC.428(98) to the ISM Code
on ``Maritime Cyber Risk Management in Safety Management Systems.''
Generally, this resolution states that an SMS should consider CRM and
encourages Administrations to appropriately address cyber risks in an
SMS by a certain date, in accordance with the ISM Code. In 2022, the
IMO provided further guidance on maritime CRM in MSC-FAL.1/Circ.3-
Rev.2, Guidelines on Maritime Cyber Risk Management, in an effort to
raise awareness about cybersecurity risks in the maritime domain.
In addition, survey data indicates that some portions of the
affected population of owners and operators of facilities and OCS
facilities are already implementing cybersecurity measures consistent
with select provisions of this final rule, including 87 percent who
have implemented account security measures, 83 percent who have
implemented multifactor authentication, 25 percent who have implemented
annual cybersecurity training, and 68 percent who conduct penetration
tests.\91\ While we lack similar data on cybersecurity activities in
the affected population of U.S.-flagged vessels, we acknowledge that it
is likely that many owners and operators have implemented cybersecurity
measures in response to private incentives and increasing cybersecurity
risks over time. For the purpose of this analysis, however, we assume
that owners and operators have no baseline cybersecurity activity, in
the areas in which we lack data.
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\91\ See footnote 60. In addition, for our cybersecurity
training assumption, we use the more conservative brown-water
facility rate of 25 percent rather than the blue-water rate of 57
percent given a lack of data about which facilities in the affected
population would be considered brown- or blue-water. Further, while
the survey does not specify if any of the surveyed population
includes OCS facilities, the Coast Guard assumes that findings
reflect current compliance for OCS facilities because we assume the
scale of port and terminal operations surveyed would be similar to
those on the OCS. Readers can access the survey at https://www.joneswalker.com/en/insights/2022-Jones-Walker-LLP-Ports-and-Terminals-Cybersecurity-Survey-Report.html, accessed August 26,
2024.
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Estimated Costs of this Final Rule
We estimate the total discounted costs of this final rule to
industry and the Federal Government to be approximately $1,245,594,930
over a 10-year period of analysis, using a 2-percent discount rate. We
estimate the annualized cost to be approximately $138,667,759, using a
2-percent discount rate. See table 3.
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We present a summary of the impacts of this final rule in table 4.
[[Page 6348]]
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[[Page 6349]]
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Public Comments and Changes From the NPRM to the Final Rule
The Coast Guard received numerous public comments with implications
for the RA. Summaries of those comments, and the Coast Guard's
responses, are found in section V., Discussion of Comments and Changes,
in the preamble of this final rule.
Table 5 describes the resulting changes from comments and the
impacts on our cost estimates for this final rule. In addition to the
changes described in table 5, the Coast Guard has also updated the
analysis to a 2-percent discount rate, consistent with guidance in the
updated OMB Circular A-4, published November 2023.\92\
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\92\ See page 75 in OMB Circular A-4, Regulatory Analysis, found
at: https://www.whitehouse.gov/wp-content/uploads/2023/11/CircularA-4.pdf, accessed August 26, 2024.
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[[Page 6351]]
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Affected Population
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\93\ We have updated NPRM cost totals to 2-percent discounting
to better compare with the estimated cost totals from the final
rule.
\94\ See table 6 for more information on the number of affected
facilities and OCS facilities and U.S.-flagged vessels by vessel
type. Along with changes related to the inclusion of publicly owned
vessels, removal of duplicate vessels in the Sub I vessel
population, and more accurately consolidating the counts of owners
and operators, the number of towing vessels has increased by
approximately 901 vessels (4,822-3,921 = 901) primarily due to the
``Inspection of Towing Vessels'' final rule published June 20, 2016.
See 81 FR 40004 or 46 CFR 136.202(a). This final rule requires
owners and operators owning more than 1 towing vessel to have 100
percent of their towing vessels inspected and have valid
certificates of inspection by July 19, 2022. This means our original
data missed some of the affected population of towing vessels
because their inspections were not yet recorded in MISLE when we
pulled our data for the NPRM.
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This final rule affects owners and operators of U.S.-flagged
vessels subject to 33 CFR part 104 (Maritime Security: Vessels),
facilities subject to 33 CFR part 105 (Maritime Security: Facilities),
and OCS facilities subject to 33 CFR part 106 (Marine Security: Outer
Continental Shelf (OCS) Facilities). The Coast Guard estimates this
final rule will affect approximately 11,222 vessels and 3,718
facilities (including 33 OCS facilities).
The affected U.S.-flagged vessel population includes:
U.S. towing vessels greater than 8 meters (26 feet) in
registered length inspected under 46 CFR, subchapter M that are engaged
in towing a barge or barges inspected under 46 CFR, subchapters D and
O;
U.S. tankships inspected under 46 CFR, subchapters D and
O;
U.S. barges inspected under 46 CFR, subchapters I
(includes combination barges), D, and O, carrying certain dangerous
cargo in bulk or barges and engaged on international voyages;
Small U.S. passenger vessels carrying more than 12
passengers, including at least 1 passenger-for-hire, that are engaged
on international voyages;
Small U.S. passenger vessels inspected under 46 CFR,
subchapter K that are certificated to carry more than 150 passengers;
Large U.S. passenger vessels inspected under 46 CFR,
subchapter H;
OSVs inspected under 46 CFR, subchapter L;
Self-propelled U.S. cargo vessels greater than 100 gross
register tons inspected under 46 CFR, subchapter I, except for
commercial fishing vessels inspected under 46 CFR part 105; and
U.S. MODUs and cargo or passenger vessels subject to SOLAS
(1974), Chapter XI-1 or Chapter XI-2.
The affected facility population includes:
Facilities subject to 33 CFR parts 126 (Handling of
Dangerous Cargo at Waterfront Facilities) and 127 (Waterfront
Facilities Handling Liquefied Natural Gas and Liquefied Hazardous Gas);
Facilities that receive vessels certificated to carry more
than 150
[[Page 6352]]
passengers, except vessels not carrying and not embarking or
disembarking passengers at the facility;
Facilities that receive vessels subject to SOLAS (1974),
Chapter XI;
Facilities that receive foreign cargo vessels greater than
100 gross register tons;
Facilities that receive U.S. cargo vessels, greater than
100 gross register tons, inspected under 46 CFR, subchapter I, except
facilities that receive only commercial fishing vessels inspected under
46 CFR part 105; and
Barge fleeting facilities that receive barges carrying, in
bulk, cargoes regulated by 46 CFR subchapter I, inspected under 46 CFR,
subchapters D or O, or certain dangerous cargoes.
Table 6 presents the affected population of U.S.-flagged vessels,
facilities, and OCS facilities of this final rule.\95\ For the vessel
population, the Coast Guard assumes the same number of vessels that
leave and enter service. Therefore, we assume the population to be
constant over the 10-year period of analysis. We also make the same
assumption for facilities and OCS facilities. Additionally, we assume
that changes in the ownership of vessels and facilities is very rare,
and any audits that result from a change in ownership are accounted for
by the annual audit requirements.
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\95\ This data was retrieved from the Coast Guard's MISLE
database in July 2024.
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Cost Analysis of the Final Rule
This final rule imposes costs on the U.S. maritime industry for
cybersecurity requirements that include:
Developing a Cybersecurity Plan, which includes
designating a CySO, in 33 CFR 101.630;
Performing drills and exercises in 33 CFR 101.635; and
Ensuring and implementing cybersecurity measures in 33 CFR
101.650, such as account security measures, device security measures,
data security measures, cybersecurity
[[Page 6354]]
training for personnel, reporting cyber incidents, risk management,
supply chain management, resilience, network segmentation, and physical
security.
We present the costs associated with some of the regulatory
provisions in the following analysis; however, we are not able to
estimate the costs fully for certain provisions because of the lack of
data and the uncertainty associated with these provisions. Also, some
regulatory provisions may be included in developing the Cybersecurity
Plan and maintaining it on an annual basis; therefore, we may not have
estimated a cost for these specific provisions in this analysis. We
clarify this in the analysis where applicable.
In addition, U.S. barges inspected under 46 CFR subchapters D, O,
or I (including combination barges), carrying certain dangerous cargo
in bulk or barges engaged on international voyages, represent a special
case in our analysis of cybersecurity-related costs. Unlike other
vessels in the affected population of this final rule, in most cases,
barges do not have IT or OT systems on board. Many types of barges rely
on the IT and OT systems on board their associated towing vessels or
the facilities where they deliver their cargo. This also means that
barges are typically unmanned, making the costs associated with
provisions such as cybersecurity training difficult to estimate. While
we acknowledge that there are some barges with IT or OT systems on
board, for the purposes of this analysis, we calculate costs only for
the affected population of barges related to developing, resubmitting,
maintaining, and auditing the Cybersecurity Plan, as well as developing
cybersecurity-related drill and exercise components.
We believe that the hour-burden estimates associated with the
components of the Cybersecurity Plan should still be sufficient to
capture the implementation of any cybersecurity measures identified as
necessary by the owner or operator of a barge. In addition, we believe
it should capture any burden associated with requests for waivers or
equivalents for provisions that do not apply to a vessel or vessel
company lacking significant IT or OT systems.
Cybersecurity Plan Costs
Each owner and operator of a U.S.-flagged vessel, facility, or OCS
facility is required to develop and submit a Cybersecurity Plan to the
Coast Guard. The CySO will develop, implement, and verify a
Cybersecurity Plan for each U.S.-flagged vessel, facility, or OCS
facility. The owner or operator will submit a copy of the Plan for
approval to the cognizant COTP or the OCMI for a facility or OCS
facility, or to the MSC for a U.S.-flagged vessel. The contents of the
Cybersecurity Plan are detailed in Sec. 101.630.
Unless otherwise stated, in this RA we used information and
obtained estimates from SMEs in the Coast Guard's Office of Commercial
Vessel Compliance (CG-CVC), CG-FAC, and the Coast Guard's Office of
Design and Engineering Standards (CG-ENG). We also obtained information
from CGCYBER and NMSAC.
The Coast Guard acknowledges that some owners and operators of
U.S.-flagged vessels, medium-sized and larger facilities, and OCS
facilities may have already adopted a cybersecurity posture and
implemented measures to counter and prevent a cyber incident. We also
acknowledge that owners and operators of smaller U.S.-flagged vessels,
facilities, and OCS facilities might not have any cybersecurity
measures in place. For the purpose of calculations in this analysis, we
assume that all owners or operators of U.S.-flagged vessels,
facilities, and OCS facilities will comply with the full extent of the
requirements of this final rule, and we assume no waivers or exemptions
outside of the population of U.S.-flagged barges with limited IT and OT
systems. Cost estimates for requesting waivers or exemptions for U.S.-
flagged barges are included in the Cybersecurity Plan development
costs. For example, we assume that rather than taking the time to
implement account security measures for nonexistent IT and OT systems,
CySOs working for owners and operators of U.S.-flagged barges will use
the time normally taken to document those measures to instead request a
waiver and place the approval in their plan. As such, we include U.S.-
flagged barges in our cost estimates for Cybersecurity Plan development
and maintenance costs even though we do not include them in our
estimates for the implementation of many of the cybersecurity measures
analyzed later in the RA. Regarding waivers for implementing
cybersecurity measures on other types of vessels or in facilities or
OCS facilities, the Coast Guard is unable to estimate who in the
affected population will request waivers and for which provisions.
Instead, we discuss this as a source of uncertainty in table 42.
However, we have survey data indicating that a portion of owners
and operators of affected facilities and OCS facilities already have
some cybersecurity measures in place.\96\ We present this survey data
in the applicable sections of the cost analysis. For other regulatory
provisions, we do not estimate regulatory costs for industry because
the Coast Guard does not have data on the extent of cybersecurity
measures currently in the industry for these provisions.
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\96\ Readers can access the survey at https://www.joneswalker.com/en/insights/2022-Jones-Walker-LLP-Ports-and-Terminals-Cybersecurity-Survey-Report.html, accessed August 26,
2024.
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We list the regulatory provisions included in developing and
maintaining a Cybersecurity Plan that we did not estimate costs for in
other sections of this RA:
Designation of a CySO in Sec. Sec. 101.620(b)(3) and
101.630(c)(1);
Device security measures in Sec. 101.650(b)(1) through
(4);
Cybersecurity Assessment in Sec. 101.650(e)(1);
Letter certifying a completed penetration test and
documentation of identified vulnerabilities in Sec. 101.650(e)(2);
Routine system maintenance measures in Sec.
101.650(e)(3)(i) through (vi); and
Supply chain management in Sec. 101.650(f)(1) through
(3);
Development and maintenance of a Cyber Incident Response
Plan in Sec. 101.650(g)(2);
Drafting of waiver or equivalence determination requests
in Sec. 101.665.
Developing a Cybersecurity Plan has five major cost components: the
initial development of the Plan; annual maintenance of the Plan
(including amendments); revision and resubmission of the Plan as
needed; renewal of the Plan after 5 years; and the cost for annual
audits. Owners and operators of U.S.-flagged vessels, facilities, and
OCS facilities are required to submit their Cybersecurity Plan to the
Coast Guard within 2 years following the effective date of this final
rule; therefore, submitting a Cybersecurity Plan for approval will
likely not occur until the second year of the 10-year period of
analysis.
The CySO is responsible for all aspects of developing and
maintaining the Cybersecurity Plan. While several public commenters
indicated that they may need to hire a dedicated, salaried employee to
serve as a CySO, the Coast Guard does not have specific data on what
portion of owners and operators of vessels, facilities, and OCS
facilities will need to do so. In this final rule, Sec. 101.625 states
that a CySO may serve in other roles and may perform other duties
within an owner or operator's
[[Page 6355]]
organization, and that a person may serve as a CySO for more than one
U.S.-flagged vessel, facility, or OCS facility. For facilities and OCS
facilities, this person may be the FSO. For vessels, this person may be
the VSO. When considering assigning the CySO role to the existing
security officer, the owner or operator should consider the depth and
scope of these new responsibilities in addition to existing security
duties. For the purpose of this analysis, we assume that an existing
person in a U.S.-flagged vessel, facility, or OCS facility company or
organization will assume the duties and responsibilities of a CySO.
This means that, while the Coast Guard is not requiring any security
credentials for the CySO at this time, any costs associated with
obtaining security credentials at the discretion of the owner or
operator would already be incurred before the implementation of this
final rule. Additionally, if the designated CySO has security
responsibilities that overlap with an existing VSO, FSO, or CSO, we
assume that those individuals will work together to handle those
duties.
Despite our assumption that owners and operators will redesignate
an existing employee, we acknowledge that some owners or operators may
need to hire a CySO if no existing employees are able take on these
duties. However, rather than estimating the hours associated with
bringing on a full-time employee, the hour burdens associated with CySO
duties have been quantified in various sections of the cost analysis.
This can capture the costs associated with contracting for the
individual CySO duties or assigning them to a new or existing employee.
We use the Bureau of Labor Statistics' (BLS) Occupational
Employment and Wage Statistics (OEWS) for the United States for May
2022. A CySO is comparable to the occupational category of
``Information Security Analysts'' with an occupational code of 15-1212
and an unloaded mean hourly wage rate of $57.63.\97\ In order to obtain
a loaded mean hourly wage rate, we use BLS's ``Employer Costs for
Employee Compensation'' database to calculate the load factor, which we
applied to the unloaded mean hourly wage rate using fourth quarter data
from 2022.\98\ We determine the load factor for this occupational
category to be about 1.46, rounded. We then multiply this load factor
by the unloaded mean hourly wage rate of $57.63 to obtain a loaded mean
hourly wage rate of about $84.14, rounded ($57.63 x 1.46).
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\97\ Readers can access BLS's website at https://www.bls.gov/oes/2022/may/oes151212.htm to obtain information about the wage we
used in this analysis, accessed August 22, 2024.
\98\ A loaded mean hourly wage rate is what a company pays per
hour to employ a person, not the hourly wage an employee receives.
The loaded mean hourly wage rate includes the cost of non-wage
benefits (health insurance, vacation, etc.). We calculated the load
factor by accessing the ECEC Multi-Screen database tool at https://data.bls.gov/multi-screen?survey=cm. We then selected the category
of ``2 Private industry workers'' at screen 1. At screen 2, we first
selected the category ``01 Total compensation,'' then we continued
to select ``530000 Transportation and materials moving occupations''
at screen 3, then ``All Workers'' at screens 4 and 5, and then for
``Area,'' we selected ``99999 United States (National)'' at screen
6. At screen 7, we selected the category ``D Cost of compensation
(Cost per hour worked).'' At screen 8, we selected the category
``not seasonally adjusted.'' At screen 9, we selected the series ID,
CMU2010000520000D. We used the ``Cost of Compensation'' for quarter
4 of 2022, or $33.07. We performed this process again to obtain the
value for ``02 Wages and salaries,'' which we selected on screen 2.
On screen 9, we selected the series ID CMU2020000520000D and
obtained a value of $22.64. We divided $33.07 by $22.64 and obtained
a load factor of 1.46, rounded, accessed August 15, 2024.
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Cybersecurity Plan Cost for Facilities and OCS Facilities
This final rule requires owners and operators of facilities and OCS
facilities to create a Cybersecurity Plan for each facility within a
company. For the purpose of this analysis, the cost to develop a
Cybersecurity Plan is a function of the number of facilities, not the
number of owners and operators, because an owner or operator may own
more than one facility. Based on data obtained from the Coast Guard's
MISLE database, we estimate this final rule will affect about 3,685
facilities and 33 OCS facilities (including MTSA-regulated facilities),
and about 1,372 owners and operators of these facilities. MISLE data
contains incomplete information on owners and operators for 951 of the
3,718 facilities and OCS facilities included in the affected
population. Of the 2,767 facilities and OCS facilities with complete
information for owners and operators, we found 1,055 unique owners.
This means that, on average, each owner owns approximately 3 facilities
(2,767 / 1,055 = 2.62, or 3.0 rounded). We apply this rate of ownership
to the remaining facilities and OCS facilities without complete
ownership information to arrive at our total of 1,372 owners [1,055 +
(951 / 3)].
We use hour-burden estimates from Coast Guard SMEs and the
currently approved OMB Information Collection Request (ICR), Control
Number 1625-0077, titled, ``Security Plans for Ports, Vessels,
Facilities, and Outer Continental Shelf Facilities and Other Security-
Related Requirements.'' The hour-burden estimates in ICR 1625-0077
include 100 hours for developing the Cybersecurity Plan (average hour
burden), 10 hours for annual maintenance of the Cybersecurity Plan
(which includes amendments), and 15 hours to resubmit Cybersecurity
Plans every 5 years. In addition, SMEs estimate that it takes 40 hours
to conduct annual audits of Cybersecurity Plans.
While the Cybersecurity Plan can be incorporated into an existing
FSP for a facility or OCS facility, this does not mean that the
Cybersecurity Plan is expected to be less complex to develop or
maintain than an FSP. In general, the provisions outlined in this rule
are meant to reflect the depth and scope of the physical security
provisions established by MTSA. As a result, we feel the hour-burden
estimates for developing and maintaining the FSP represents a fair
proxy for what is expected with respect to a Cybersecurity Plan.
Based on estimates from the Coast Guard's FSP reviewers at local
inspections offices, approximately 10 percent of Plans will need to be
revised and resubmitted in the second year, which is consistent with
the current resubmission rate for FSPs. Plans must be renewed after 5
years (occurring in the seventh year of the analysis period), and we
estimate that 10 percent of renewals will also require revision and
resubmission. We estimate the time to revise and resubmit the
Cybersecurity Plan to be about half the time to develop the Plan
itself, or 50 hours in the second year of submission, and 7.5 hours
after 5 years (in the seventh year of the analysis period).
Because we include the annual Cybersecurity Assessment in the cost
to develop Cybersecurity Plans, and we do not assume that owners and
operators will wait until the second year of analysis to begin
developing the Plan or implementing related cybersecurity measures, we
divide the estimated 100 hours to develop Plans equally across the
first and second years of analysis. We estimate the first- and second-
year (the first year of Plan submission) undiscounted cost to develop a
Cybersecurity Plan for owners and operators of facilities and OCS
facilities to be about $31,283,252 (3,718 Plans x 100 hours x $84.14).
We estimate the second-year undiscounted cost for owners and operators
to resubmit Plans for facilities or OCS facilities (or to send
amendments) for corrections to be about $1,565,004 (372 Plans or
amendments x 50 hours x $84.14). Therefore, we estimate the total
undiscounted first- and second-year cost to facility and OCS facility
owners and operators to
[[Page 6356]]
develop, submit, and resubmit a Cybersecurity Plan to be approximately
$32,848,256 ($31,283,252 + $1,565,004)).
In years 3 through 6 and years 8 through 10 of the analysis period,
owners and operators of facilities and OCS facilities will be required
to maintain their Cybersecurity Plans. This may include recordkeeping
and documenting cybersecurity items at a facility or OCS facility, as
well as amending the Plan. The CySO is required to maintain each Plan
for each facility or OCS facility. Maintaining the Plan does not occur
in the second year (initial year of Plan submission) or in the renewal
year, Year 7 of the analysis period. We again obtain the hour-burden
estimate for the annual maintenance of Plans from ICR 1625-0077, which
is 10 hours.
In the same years of the analysis period, this final rule also
requires owners and operators of facilities and OCS facilities to
conduct annual audits. The audits will be necessary for owners and
operators of facilities and OCS facilities to identify vulnerabilities
(via the Cybersecurity Assessment) and to mitigate them.\99\ Audits
will also be necessary if there is a change in the ownership of a
facility, but because the costs for audits are estimated annually, this
should capture audits as a result of very rare changes in ownership
each year as well. The CySO is responsible for ensuring the audit of a
Cybersecurity Plan, and we assume that an individual of similar
experience and wage rate will conduct the annual audit. Based on input
provided by Coast Guard SMEs who review Plans at the Coast Guard, we
estimate the time to conduct an audit to be about 40 hours for each
Plan. We estimate the undiscounted cost for the annual maintenance of
Cybersecurity Plans for owners and operators of facilities and OCS
facilities to be approximately $3,128,325 (3,718 facility Plans x 10
hours x $84.14). We estimate the undiscounted cost for annual audits of
Cybersecurity Plans to be approximately $12,513,301 (3,718 facility
Plans x 40 hours x $84.14). We estimate the total undiscounted annual
cost each year in years 3 through 6 and 8 through 10 for Cybersecurity
Plans to be approximately $15,641,626 ($3,128,325 + $12,513,301).
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\99\ The Jones Walker survey (see footnote 60) reports about 72
percent of ports and terminals conduct a risk assessment at least
once a year. We did not estimate a separate cost for this item
because the Coast Guard believes that a risk assessment can be a
part of an annual audit. Readers can access the survey at https://www.joneswalker.com/en/insights/2022-Jones-Walker-LLP-Ports-and-Terminals-Cybersecurity-Survey-Report.html, accessed August 26,
2024.
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Because a Cybersecurity Plan approved by the Coast Guard is valid
for 5 years, in Year 7 of the analysis period, owners and operators of
facilities and OCS facilities will be required to renew the approval of
their Plans with the Coast Guard. We use the hour-burden estimate in
ICR 1625-0077 for renewing the Plan, which is 15 hours. The hour-burden
estimate for revision and resubmission of renewals is half of the
original hour-burden for renewals, or 7.5 hours. The CySO is
responsible for resubmitting the Cybersecurity Plan to the Coast Guard
for renewal, including additional resubmissions because of corrections.
We estimate the undiscounted cost for renewing and resubmitting a
Cybersecurity Plan due to corrections to be approximately $4,927,238
[(3,718 facility Plans x 15 hours x $84.14) + (372 resubmitted facility
Plans x 7.5 hours x $84.14)].
We estimate the total discounted cost of this final rule for
developing Cybersecurity Plans for owners and operators of facilities
and OCS facilities to be approximately $132,678,949 over a 10-year
period of analysis, using a 2-percent discount rate. We estimate the
annualized cost to be approximately $14,770,687, using a 2-percent
discount rate. See table 7. We estimate that the subset of 33 OCS
facilities operated by 9 owners will incur costs of $1,176,239 over a
10-year period of analysis and $130,947 annualized, using a 2-percent
discount rate.
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[[Page 6358]]
Cybersecurity Plan Cost for U.S.-Flagged Vessels
The methodology for owners and operators of U.S.-flagged vessels to
develop a Cybersecurity Plan is the same as for facilities and OCS
facilities. We estimate the affected vessel population to be about
11,222. We estimate the number of owners and operators of these vessels
to be about 2,075.
We use estimates provided by Coast Guard SMEs and ICR 1625-0077 for
the hour-burden estimates for vessels as we did for facilities and OCS
facilities. The hour-burden estimates in ICR 1625-0077 include 80 hours
for developing the Cybersecurity Plan, 8 hours for annual Plan
maintenance, and 12 hours to renew the Plan every 5 years. In addition,
Coast Guard SMEs estimate that it takes 40 hours to conduct annual
audits of Plans for vessels. Similar to facilities, we estimate 10
percent of all Cybersecurity Plans for vessels will need to be
resubmitted for corrections in the second year (initial year of Plan
submission), and 10 percent of Cybersecurity Plans for vessels will
need to be revised and resubmitted in the seventh year of the analysis
period. Based on information from Coast Guard SMEs, we estimate the
time to make corrections to the Plan in the second year will be about
half of the initial time to develop the Plan, or 40 hours in the second
year, and 6 hours in the seventh year. We include the annual
Cybersecurity Assessment in the cost to develop Plans, and we do not
assume that owners and operators will wait until the second year of
analysis to begin developing the Cybersecurity Plan or implementing
related cybersecurity measures. Therefore, we divide the estimated 80
hours to develop Plans equally across the first and second years of
analysis.
The methodology to determine the cost to develop a Cybersecurity
Plan for U.S.-flagged vessels is slightly different than the
methodology for facilities and OCS facilities. The Coast Guard does not
believe that a CySO for U.S.-flagged vessels will expend 80 hours
developing a Plan for each vessel in a company's fleet. For example, if
a vessel owner or operator has 10 vessels, it would take a CySO 800
hours of time to develop Plans for all 10 vessels, which is nearly 40
percent of the total hours of work in a calendar year. It is more
likely that the CySO will create a master Cybersecurity Plan for all
the vessels in the fleet, and then tailor each Plan according to a
specific vessel, as necessary.
Because a large portion of the provisions required under this final
rule will impact company-wide policies regarding network, account, and
data security practices, as well as company-wide cybersecurity
training, reporting procedures, and testing, we do not believe there
will be much variation in how these provisions are implemented between
specific vessels owned by the same owner or operator. Therefore, the
cost to develop a Cybersecurity Plan for vessels becomes a function of
the number of vessel owners and operators and not a function of the
number of vessels.
When a vessel owner or operator submits a Plan to the Coast Guard
for approval, the owner or operator will send the master Cybersecurity
Plan, which might include a more tailored or abbreviated Plan for each
vessel. For example, the owner or operator of 10 vessels will send the
master Cybersecurity Plan along with the tailored Plans for each vessel
in one submission to the Coast Guard for approval, instead of 10
separate documents.
We estimate the first- and second-year (initial year of Plan
submission) undiscounted cost for owners and operators of U.S.-flagged
vessels to develop a Cybersecurity Plan to be approximately $13,967,240
(2,075 Plans x 80 hours x $84.14) split over the first two years of
analysis. We estimate the second-year undiscounted cost for owners and
operators to resubmit vessel Plans (or send amendments) for corrections
to be approximately $700,045 (208 Plans or amendments x 40 hours x
$84.14). Therefore, we estimate the total undiscounted first- and
second-year cost to the owners and operators of U.S.-flagged vessels to
develop a Cybersecurity Plan to be approximately $14,667,285
($13,967,240 + $700,045).
As with facilities and OCS facilities, in years 3 through 6 and
years 8 through 10 of the analysis period, CySOs, on behalf of owners
and operators of U.S.-flagged vessels, will be required to maintain
their Cybersecurity Plans. We again obtain the hour-burden estimate for
annual maintenance of Plans from ICR 1625-0077, which is 8 hours. In
the same years of the analysis period, this final rule also requires
owners and operators of U.S.-flagged vessels to conduct annual audits.
The audits will be necessary for owners and operators of U.S.-flagged
vessels to identify vulnerabilities through the Cybersecurity
Assessment and to mitigate them. Audits will also be necessary if there
is a change in the ownership of a vessel. The CySO would likely conduct
an audit of the master Cybersecurity Plan, which includes each vessel,
instead of conducting a separate audit for each individual vessel.
The time estimate for a CySO to conduct an audit for U.S.-flagged
vessels in a fleet is the same as it is for facilities and OCS
facilities, or 40 hours per Plan. We estimate the undiscounted cost for
the annual maintenance of Cybersecurity Plans for the owners and
operators of U.S.-flagged vessels to be about $1,396,724 (2,075 Plans x
8 hours x $84.14). We estimate the undiscounted cost for annual audits
of Cybersecurity Plans to be approximately $6,983,620 (2,075 Plans x 40
hours x $84.14). We estimate the total undiscounted annual cost each
year in years 3 through 6 and 8 through 10 for Cybersecurity Plans to
be approximately $8,380,344 ($1,396,724 + $6,983,620).
Again, as with facilities and OCS facilities, Coast Guard approval
for the Cybersecurity Plan is valid for 5 years. Therefore, in Year 7
of the analysis period, owners and operators of U.S.-flagged vessels
will be required to renew their Plans with the Coast Guard. We use the
hour-burden estimate in ICR 1625-0077 for Plan renewal, which is 12
hours. The CySO is responsible for resubmitting the Cybersecurity Plan
to the Coast Guard for renewal. We estimate the undiscounted cost for
owners and operators of U.S.-flagged vessels to renew the Plan to be
approximately $2,200,093 [(2,075 Plans x 12 hours x $84.14) + (208
resubmitted vessel Plans x 6 hours x $84.14)].
We estimate the total discounted cost of this final rule for owners
and operators of U.S.-flagged vessels to develop Cybersecurity Plans to
be approximately $67,857,908 over a 10-year period of analysis, using a
2-percent discount rate. We estimate the annualized cost to be
approximately $7,554,385, using a 2-percent discount rate. See table 8.
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[[Page 6359]]
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BILLING CODE 9110-04-C
[[Page 6360]]
Drills
In Sec. 101.635(b), this final rule requires drills that test the
proficiency of U.S.-flagged vessel, facility, and OCS facility
personnel who have assigned cybersecurity duties and individual
elements of the Plan, including responses to cybersecurity threats and
incidents. The drills enable the CySO to identify any cybersecurity
deficiencies that need to be addressed. The CySO will need to conduct
the drills at least twice annually, and they may be held in conjunction
with other security or non-security-related drills, as appropriate.
After considering public comments, in this final rule, we have adjusted
the frequency of conducting drills from quarterly to twice each
calendar year. We believe that two drills annually will ensure
sufficient proficiency with the procedures, while allowing for a
regulated entity to conduct additional drills if they choose to, and we
understand how quarterly drills and exercises could be too frequent for
some vessel operations, as noted by some commenters.
While there are benefits of a more robust drill schedule, we
believe that this reduction in the number of drills lowers costs and
increases marginal benefits by allowing affected owners and operators
to use resources more efficiently. Further, by having fewer drills to
develop and conduct, we believe the remaining drills will be the
primary focus, addressing the commenter's concern about the previously
proposed frequency and integration of cyber drills with other required
drills. However, the Coast Guard believes that anything less frequent
than two drills per year could lead to a decrease in benefits that
drills provide. This is especially true with regard to cybersecurity,
as risk and vulnerabilities can change rapidly over the course of a
year.
The Coast Guard does not have data on who is currently conducting
cybersecurity drills in either the population of facilities and OCS
facilities or the population of U.S.-flagged vessels. Therefore, we
assume that the entire population of facilities and U.S.-flagged
vessels will need to develop new cybersecurity related drills to comply
with the requirements. While owners and operators in the affected
population are allowed to combine these new cybersecurity drills with
the drills required in accordance with 33 CFR parts 104, 105, and 106,
several commenters suggested that combining these drills would be
difficult or impossible. Accordingly, we have updated our cost
estimates to reflect a longer time to develop and conduct drills and
include employee participation in the new drills. Coast Guard SMEs who
are familiar with MTSA's requirements and practices for drills and
exercises, as well as Coast Guard SMEs at LANTAREA who have reviewed
current drills in the affected population estimate that it will take a
CySO 8 hours to develop each new cybersecurity drill.
The CySO is the person who develops cybersecurity drills. Each
CySO, on behalf of the owner or operator of a facility or OCS facility,
will be required to develop the drill's components beginning in the
first year of the analysis period and document procedures in the
Cybersecurity Plan.
In addition to the development costs, we also estimate the costs of
employee participation in the cybersecurity drills. Coast Guard SMEs
who are familiar with MTSA's requirements and practices for drills and
exercises, as well as Coast Guard SMEs at LANTAREA who have reviewed
current cybersecurity drills in the affected population estimate that
each drill requires 4 hours of participation per employee. According to
Sec. 101.635(a)(1), drills and exercises must be used to test the
proficiency of personnel in assigned cybersecurity duties. Because the
Coast Guard is unable to determine which employees at a given facility
or OCS facility will be in assigned cybersecurity duties and required
to participate in the drills, we assume that 33 percent of employees
will participate.\100\ This share of employees is consistent with the
estimated share of shoreside employees in the affected population of
owners and operators of U.S.-flagged vessels. Coast Guard SMEs with
knowledge of existing cybersecurity drill practices believe this is a
more reasonable estimate than assuming the entire portion of employees
will participate. We obtain the average number of facility employees
from a Coast Guard contract that uses D&B Hoovers' database for company
employee data (spreadsheet analysis available in the docket for this
rulemaking, see file titled ``facilities_hoovers_employee_counts'').
The average number of employees at a facility company is 74. We
estimate that the average number of employees that will participate in
cybersecurity drills is 24 (74 employees x 0.33 = 24.42).
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\100\ Under Sec. 101.635(a)(1), cybersecurity drills and
exercises are required to test the proficiency of U.S.-flagged
vessel, facility, and OCS facility personnel in assigned
cybersecurity duties. Full participation in drills and exercises
from all personnel, including those without assigned cybersecurity
duties, is not a requirement of this final rule.
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To obtain the unloaded mean hourly wage rate of employees at
facilities and OCS facilities, we use BLS's Quarterly Census of
Employment and Wages (QCEW) data. We also use the North American
Industry Classification System (NAICS) code for ``Port and Harbor
Operations,'' which is 488310, to obtain the representative hourly wage
for employees at facilities and OCS facilities. The BLS reports the
weekly wage to be $1,653.\101\ Dividing this value by the standard
number of hours in a work week, or 40, we obtain the unloaded hourly
wage rate of approximately $41.33. We once again apply a load factor of
1.46 to this wage to obtain a loaded mean hourly wage rate for facility
employees of approximately $60.34 ($41.33 x 1.46).
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\101\ Readers can access this web page at www.bls.gov/cew/.
Select the dropdown under ``QCEW data'' and click ``Databases.'' On
this page, select the one-screen tool (https://data.bls.gov/PDQWeb/en). In fields 1 and 2, select ``U.S. TOTAL.'' In field 3, select
``NAICS 488310 Port and harbor operations.'' Select ``Private,''
``All establishment sizes,'' and ``Average Weekly Wage'' in fields
4, 5, and 6, respectively. Click ``Add to selection'' and then ``Get
Data.'' Relevant Series ID is ENUUS000405488310). For this RA, we
used Q1 2022 QCEW data. We use the average weekly wage here because
this QCEW database does not contain mean hourly wage data, accessed
on August 15, 2024.
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We estimate the cost for facilities to develop and conduct
cybersecurity drills by using the number of owners and operators of
facilities we presented earlier (1,372), the CySO's loaded mean hourly
wage rate, the estimated time to develop the drill's components (8
hours), the estimated time to participate in the drills (4 hours), the
average number of employees at a facility company (24 employees), the
facility employee wage, and the frequency of the drill (twice
annually).\102\ We estimate the undiscounted annual cost for owners and
operators of facilities and OCS facilities to develop, conduct, and
participate in drills to be approximately $17,742,045 [1,372 facility
companies x ((2 drills per year x 8 hours per drill development x
$84.14 CySO wage) + (2 drills per year x 4 hours drill participation x
24 facility employees x $60.34 facility employee wage))]. We estimate
the total discounted cost of drills for owners and operators of
facilities and OCS facilities to be approximately $159,369,428 over a
10-year period of analysis, using a 2-percent discount rate. We
estimate the
[[Page 6361]]
annualized cost to be approximately $17,742,045, using a 2-percent
discount rate. See table 9. We estimate that the subset of 33 OCS
facilities operated by 9 owners will incur costs of $1,045,430 over a
10-year period of analysis and $116,384 annualized, using a 2-percent
discount rate.
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\102\ For the purposes of capturing the cost of the CySO
delivering the drill, we assume that the CySO is averaged into the
number of employees participating in the drill. As such, we do not
estimate a separate cost for CySO delivery of the drill.
[GRAPHIC] [TIFF OMITTED] TR17JA25.017
We use the same methodology and estimates for U.S.-flagged vessel
drills. As we presented previously, there are about 2,075 CySOs, on
behalf of owners and operators of U.S.-flagged vessels, who are
required to develop drills with this final rule. As with facilities and
OCS facilities, we have increased our development and hour-burden
estimates, and now include cost estimates for a share of employees
participating in cybersecurity drills. To determine the costs for
employee participation, we use estimates for the number of employees
per company and mean hourly wage estimates for employees based on
vessel types.\103\ We then subtract the total number of seafaring crew
from the number of total company employees.\104\ We use the estimated
33 percent ``shoreside'' share of employees for owners and operators of
vessels because we do not have data on which portion of a given owner
or operator's employees will have cybersecurity responsibilities. We
feel this is more in line with the requirements of the regulatory text
than assuming that all employees would participate. It also better
aligns with suggestions from a public commenter who stated that
``onboard personnel have little to no involvement in cyber specific
drills.''
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\103\ To estimate the average number of mariners and shoreside
employees for each company, Coast Guard conducted an internet search
for publicly available employment data for the owners and operators
of MTSA-regulated vessels. In total, Coast Guard was able to
identify eight owners and operators of MTSA-regulated vessels who
publicly provided their shoreside and seafarer employment numbers.
Using this data, we calculated the percentage of total employees
working shoreside for each vessel. We then took an average of these
percentages and applied that average to the population of owners and
operators of MTS-regulated vessels. The percentage of shoreside
employees ranged from 8 to 87 percent, with an average of 33
percent, which we used for each subpopulation of vessels.
\104\ For example, the average OSV in the affected population
carries 12 seafaring crew per vessel according to certificate of
inspection manning requirements. We multiply this by 1.33 to arrive
at 16 total employees per OSV. We then subtract the 12 seafaring
crew from the 16 total employees to isolate the 4 shoreside
employees per vessel that would need to participate in the
cybersecurity drills.
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For the vessel employee wage estimates, we chose several
representative labor categories of vessel employees based on the
manning requirements listed in the certificates of inspection for each
vessel.\105\ From the BLS OEWS program, we use the labor categories,
``Captains, Mates, and Pilots of Water Vessels,'' with an occupational
code of 53-5021, ``Sailors and Marine Oilers,'' with an occupational
code of 53-5011, and ``Ship Engineers,'' with an occupational code of
53-5031.\106\ The unloaded mean hourly wage rates from May 2022 for
these occupations are $50.09, $25.65, and $48.55, respectively. We also
use an assortment of labor categories to estimate a mean hourly wage
for the industrial personnel identified in the certificate of
inspection for MODUs in the affected population. According to SMEs with
CG-CVC, industrial personnel aboard MODUs generally include a mixture
of hotel and steward staff; laborers and riggers; specialized
technicians; and mechanics, electricians, and electronic technicians
for maintenance. For these groups, we find a combined unloaded weighted
mean hourly wage of $25.16. For each vessel type, we weight the
representative wages based on the average occupational ratios across
vessels in the population. See Appendix A: Wages Across Vessel Types,
in the docket of this rulemaking, for more details on how the
industrial personnel and weighted mean hourly wages for
[[Page 6362]]
each vessel type were calculated.\107\ We apply the same load factor we
used previously in this analysis, 1.46, to these wage rates, to obtain
the loaded mean hourly wage rates shown in table 10.
---------------------------------------------------------------------------
\105\ Manning requirements for U.S.-flagged vessels were
established by regulation in 46 CFR part 15.
\106\ See https://www.bls.gov/oes/2022/may/oes_nat.htm#00-0000
for 2022 wage rates associated with the listed occupations, accessed
August 22, 2024.
\107\ It should be noted that the wage calculations in Appendix
A: Wages Across Vessel Types, are conducted with occupational ratios
based on employee counts without the 1.33 shoreside employee
modifier applied. Applying this multiplier evenly across all the
employee counts would not have an impact on the occupational ratios,
and thus would not impact our estimated weighted mean hourly wages.
Because we do not have a good grasp on what occupations the
shoreside employees would have, we simply apply the weighted mean
hourly wages to all employees in the given population of vessels.
[GRAPHIC] [TIFF OMITTED] TR17JA25.018
We estimate the undiscounted annual cost of cybersecurity drill
participation for vessel employees to be approximately $12,644,432
(number of vessels for each affected vessel category x number of
employees for each vessel type x representative mean hourly wage for
vessel type x 4 hours for drill participation x 2 drills per
year).\109\ For example, using OSVs, there are about 430 OSVs, with 4
shoreside employees for each OSV. Therefore, we estimate the annual
drill participation cost for OSVs to be about $755,699 (430 OSVs x 4
shoreside employees x $54.92 x 4 hours x 2 drills), rounded. We perform
this calculation for all for the affected vessel types in this final
rule and add it to the estimated costs for drill development. We
estimate the undiscounted annual cost to develop cybersecurity drills
to be approximately $2,793,448 (2,075 vessel companies x 1 CySO per
vessel company x $84.14 x 8 hours to develop drills x 2 drills per
year)]. This means the total undiscounted annual drill cost for the
affected population of U.S.-flagged vessels is $15,437,880 ($12,644,432
drill participation costs + $2,793,448 drill development costs). Table
11 displays the total employee drill participation costs for each
vessel type impacted by the drill requirement.
---------------------------------------------------------------------------
\108\ See Appendix A: Wages Across Vessel Types for more
information on how these wages rates were calculated.
\109\ To capture the cost of the CySO delivering the drill, we
assume that the CySO is averaged into the number of employees
participating in the drill. As such, we do not estimate a separate
cost for CySO delivery of the drill.
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[[Page 6363]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.019
We estimate the total discounted cost of drills for U.S.-flagged
vessels to be approximately $138,672,070 over a 10-year period of
analysis, using a 2-percent discount rate. We estimate the annualized
cost to be approximately $15,437,880, using a 2-percent discount rate.
See table 12.
[GRAPHIC] [TIFF OMITTED] TR17JA25.020
We estimate the total discounted cost of this final rule for drills
for the owners and operators of U.S.-flagged vessels, facilities, and
OCS facilities to be approximately $298,041,496 over a 10-year period
of analysis, using a 2-percent discount rate. We estimate the
annualized cost to be approximately $33,179,925, using a 2-percent
discount rate. See table 13.
[[Page 6364]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.021
Exercises
In Sec. 101.635(c), this final rule requires exercises that test
the communication and notification procedures of U.S.-flagged vessels,
facilities, and OCS facilities. These exercises may be vessel- or
facility-specific, or part of a cooperative exercise program or
comprehensive port exercises. The exercises are a full test of the
cybersecurity program with active participation by the CySO and may
include Government authorities and vessels visiting a facility. The
exercises must be conducted at least once each calendar year, with no
more than 18 months between exercises.
As with drills, we assume that exercises will begin in the first
year of the analysis period as CySOs develop Cybersecurity Plans. We
also assume that the exercises developed to satisfy Sec. 101.635(c)
will also satisfy the exercise requirements outlined in Sec.
101.650(g)(2) and (3), which requires the exercise of the Cybersecurity
Plan and Cyber Incident Response Plan.
The Coast Guard does not have data on who is currently conducting
cybersecurity exercises in either the population of facilities and OCS
facilities or the population of U.S.-flagged vessels. In addition,
because the affected populations are already required to conduct
exercises per Sec. Sec. 104.230, 105.220, and 106.225, this final rule
allows for owners and operators to hold cybersecurity exercises in
conjunction with other exercises. However, based on suggestions from
public commenters, the size and scope of these exercises may make them
difficult to combine in all cases. Due to a lack of data on who will be
able to combine exercises, we assume that the entire populations will
need to develop new cybersecurity-related exercises to comply with the
requirements. In either case, these development and participation hour-
burden estimates could cover the development of new internal exercises,
or preparation and participation in local area exercises.
Coast Guard SMEs who are familiar with MTSA's requirements and
practices for drills and exercises, Coast Guard SMEs at LANTAREA who
have reviewed current exercises in the affected population, and Coast
Guard SMEs at Sector San Juan who worked to develop cybersecurity
exercises with the local AMSC estimate that it takes a CySO 20 hours on
average to develop new functional, full scale cybersecurity exercises.
We have increased our hour-burden estimate for developing exercise
components from 8 hours in the NPRM to 20 hours in the final rule to
reflect the development of full-scale exercises since we no longer
assume that they will be combined with existing exercises. It should be
noted that CySOs can access widely available resources and planning
materials for developing cybersecurity exercises online.\110\ In
addition, the proliferation of cybersecurity components already being
added to AMSC exercises around the United States provide examples for
CySOs working to develop their own exercises.\111\
---------------------------------------------------------------------------
\110\ For example, CISA offers free resources on cybersecurity
scenarios and cybersecurity exercises on their website. See https://www.cisa.gov/cybersecurity-training-exercises, accessed August 22,
2024.
\111\ See https://digitaleditions.walsworthprintgroup.com/publication/?i=459304&article_id=2956672&view=articleBrowser and
https://www.news.uscg.mil/Press-Releases/Article/3920011/coast-guard-area-maritime-security-partners-conduct-2-cyber-security-exercises/ for just two examples of AMSC cyber exercises in recent
years, accessed August 22, 2024.
---------------------------------------------------------------------------
We assume each CySO, on behalf of the owner and operator of a
facility or OCS facility, will develop the exercises specified in this
final rule. Using the 1,372 facility owners and operators we presented
earlier, the CySO's loaded mean hourly wage rate, the 20-hour estimate
for developing the exercise, and one annual exercise, we estimate the
cost for facilities to develop cybersecurity exercise components. We
estimate the undiscounted annual cost of exercises for owners and
operators of facilities and OCS facilities to be approximately
$2,308,802 (1,372 facility CySOs x 20 hours per exercise x $84.14 CySO
wage).
In addition to the development costs, we also estimate the costs of
employee participation in the cybersecurity exercises. Coast Guard SMEs
who are
[[Page 6365]]
familiar with MTSA's requirements and practices for drills and
exercises, Coast Guard SMEs at LANTAREA who have reviewed current
cybersecurity drills in the affected population, and Coast Guard SMEs
at Sector San Juan who worked to develop cybersecurity exercises with
the local AMSC estimate that each exercise requires 4 hours of
participation per employee. This is based on the average length of time
it took to lead and administer local AMSC cybersecurity exercises.\112\
---------------------------------------------------------------------------
\112\ We estimate similar lengths of participation time for both
exercises and drills because, while drills are meant to test
individual elements of the Cybersecurity Plan and exercises are
required to be a full test of the cybersecurity program, depending
on what is being drilled, drills can be more open-ended or involve
lengthy and in-depth practice of incident response and recovery
procedures. Consider a suite of cybersecurity drills that includes
phishing attack simulations, which would involve the CySO sending
false emails from a seemingly trusted source in order to extract
personal identifying information from recipients. For example, a
mock phishing email can have an attachment or link that alerts the
testing team when it's opened, or can include a link that goes to a
mock login page. This will allow the CySO to see how many people not
only click the link but also insert their credentials. Drilling
through this scenario could take hours to wait and see who interacts
with the email, record results, and assemble their team to discuss
lessons learned and response procedures if the phishing attempt is
successful. While only an example, drilling one of these scenarios
(or another like it) in-depth can require a similar length of time
as a full exercise when considering time to conduct the drill,
record results, practice response procedures, and discuss lessons
learned as a team.
---------------------------------------------------------------------------
According to Sec. 101.635(a)(1), drills and exercises must be used
to test the proficiency of personnel in assigned cybersecurity duties.
Because the Coast Guard is unable to determine which employees at a
given facility or OCS facility will be in assigned cybersecurity duties
and required to participate in the exercises, we assume that 33 percent
of employees will participate.\113\ This share of employees is
consistent with the estimated share of shoreside employees in the
affected population of owners and operators of U.S.-flagged vessels.
Coast Guard SMEs with knowledge of existing cybersecurity exercise
practices believe this is a more reasonable estimate than assuming the
entire portion of employees will participate. We estimate that the
average number of employees that will participate in cybersecurity
exercises is 24 (74 total employees x 0.33 = 24.42) with a loaded mean
hourly wage of $60.34.
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\113\ Under Sec. 101.635(a)(1), cybersecurity drills and
exercises are required to test the proficiency of U.S.-flagged
vessel, facility, and OCS facility personnel in assigned
cybersecurity duties. Full participation in drills and exercises
from all personnel, including those without assigned cybersecurity
duties, is not a requirement of this final rule.
---------------------------------------------------------------------------
We estimate the cost for facilities to develop and conduct
cybersecurity exercises by using the number of facilities owners and
operators we presented earlier (1,372), the CySO's loaded mean hourly
wage rate, the estimated time to develop the exercise components (20
hours), the estimated time to participate in the exercises (4 hours),
the average number of participating employees at a facility company (24
employees), and the facility employee wage.\114\
---------------------------------------------------------------------------
\114\ To capture the cost of the CySO delivering the exercise,
we assume that the CySO is averaged into the number of employees
participating in the exercise. As such, we do not estimate a
separate cost for CySO delivery of the exercise.
---------------------------------------------------------------------------
We estimate the undiscounted annual cost for owners and operators
of facilities and OCS facilities to develop and conduct exercises to be
approximately $10,256,304 [1,372 facility companies x ((20 hours
exercise development x $84.14 CySO wage) + (4 hours exercise
participation x 24 facility employees x $60.34 facility employee
wage))].\115\ We estimate the total discounted cost of exercises for
owners and operators of facilities and OCS facilities to be
approximately $92,128,123 over a 10-year period of analysis, using a 2-
percent discount rate. We estimate the annualized cost to be
approximately $10,256,304, using a 2-percent discount rate.
---------------------------------------------------------------------------
\115\ To capture the cost of the CySO administering the
exercise, we assume that the CySO is averaged into the number of
employees participating in the exercise. As such, we do not estimate
a separate cost for CySO delivery of the exercise.
---------------------------------------------------------------------------
We estimate that the subset of 33 OCS facilities operated by 9
owners will incur costs of $604,339 over a 10-year period of analysis
and $67,279 annualized, using a 2-percent discount rate. See table 14.
[[Page 6366]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.022
We use the same methodology and estimates for vessel exercises that
we use for facilities. About 2,075 CySOs, on behalf of vessel owners
and operators, will be required to conduct exercises with this final
rule. As with facilities and OCS facilities, we have increased our
development hour-burden estimates, and now include cost estimates for
shoreside employees participating in cybersecurity exercises. To
determine the costs for employee participation, we use estimates for
the number of employees per company and mean hourly wage estimates for
employees based on vessel types previously calculated in our analysis
of cybersecurity drill costs. See table 10 for a breakdown of the mean
hourly wage estimates used for employees in the U.S.-flagged vessel
population.
We estimate the undiscounted annual cost of cybersecurity exercise
participation for vessel employees to be approximately $6,322,216
(number of vessels for each affected vessel category x number of
employees for each vessel type x representative mean hourly wage for
vessel type x 4 hours for exercise participation).\116\ For example,
using OSVs, there are about 430 OSVs, with 4 shoreside employees for
each OSV. Therefore, we estimate the annual exercise participation cost
for OSVs to be about $377,850 (430 OSVs x 4 shoreside employees x
$54.92 employee wage x 4 hours), rounded. We perform this calculation
for all for the affected vessel types in this final rule and add it to
the estimated costs for exercise development. We estimate the
undiscounted annual cost to develop cybersecurity exercises to be
approximately $3,491,810 (2,075 vessel companies x 1 CySO per vessel
company x $84.14 CySO wage x 20 hours to develop exercises)]. This
means the total undiscounted annual exercise cost for the affected
population of U.S.-flagged vessels is $9,814,026 ($6,322,216 exercise
participation costs + $3,491,810 exercise development costs). Table 15
displays the total employee exercise participation costs for each
vessel type impacted by the exercise requirement.
---------------------------------------------------------------------------
\116\ To capture the cost of the CySO administering the
exercise, we assume that the CySO is averaged into the number of
employees participating in the exercise. As such, we do not estimate
a separate cost for CySO delivery of the exercise.
---------------------------------------------------------------------------
[[Page 6367]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.023
We estimate the total discounted cost of exercises for U.S.-flagged
vessels to be approximately $88,155,323 over a 10-year period of
analysis, using a 2-percent discount rate. We estimate the annualized
cost to be approximately $9,814,026, using a 2-percent discount rate.
See table 16.
[[Page 6368]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.024
We estimate the total discounted cost of this final rule for the
owners and operators of U.S.-flagged vessels, facilities, and OCS
facilities for exercises to be approximately $180,283,445 over a 10-
year period of analysis, using a 2-percent discount rate. We estimate
the annualized cost to be approximately $20,070,330, using a 2-percent
discount rate. See table 17.
[GRAPHIC] [TIFF OMITTED] TR17JA25.025
We estimate the total discounted cost of this final rule for the
owners and operators of U.S.-flagged vessels, facilities, and OCS
facilities to conduct annual drills and exercises to be approximately
$478,324,941 over a 10-year period of analysis, using a 2-percent
discount rate. We estimate the annualized cost to be approximately
$53,250,255, using a 2-percent discount rate. See table 18.
[[Page 6369]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.026
Cybersecurity Measure Costs
The remaining regulatory provisions with associated costs are the
cybersecurity measures in Sec. 101.650. There are four cost provisions
associated with cybersecurity measures: account security measures,
cybersecurity training for personnel, penetration testing, and risk
management.
The first provision is account security measures in Sec.
101.650(a). The owners and operators of each U.S.-flagged vessel,
facility, and OCS facility will ensure that account security measures
are implemented and documented. This includes general account security
measures in Sec. 101.650(a)(1) through (3) and (5) through (7) and
multifactor authentication for end users in Sec. 101.650(a)(4). Based
on the Jones Walker ``Ports and Terminals Cybersecurity Survey,'' (see
footnote 60), 87 percent of facilities currently have account security
measures, and 83 percent of facilities currently use multifactor
authentication software. Using the total number of 1,372 facility and
OCS facility owners and operators, we multiply this number by 0.13 and
0.17, respectively, to obtain the number of facility owners and
operators who need to implement security measures and have multifactor
authentication software under this final rule, or about 178 and 233,
respectively.
We obtain the hour estimates and the labor category for these
security measures for implementing and managing account security from
NMSAC members with extensive experience in contracting to implement
similar account security measures for facilities and OCS facilities in
the affected population. A database administrator ensures that account
security measures are implemented. Using wage data from the BLS OEWS
program as previously referenced, the unloaded mean hourly wage rate
for this labor category, occupational code of 15-1242, is $49.29.\117\
Using Employer Costs for Employee Compensation data from BLS, we apply
the same load factor of 1.46 to the aforementioned wage rate to obtain
a loaded mean hourly wage rate of approximately $71.96.
---------------------------------------------------------------------------
\117\ See https://www.bls.gov/oes/2022/may/oes151242.htm,
accessed August 22, 2024.
---------------------------------------------------------------------------
It takes a database administrator about 8 hours to implement the
account security measures and 8 hours for account security management
annually thereafter for 178 facility and OCS facility companies. We
estimate the undiscounted initial-year cost to implement account
security for 178 facilities and OCS facilities and the annually
recurring cost of account security management to be approximately
$102,471, rounded [(178 facility companies x ($71.96 x 8 hours)].
The number of facility and OCS facility companies that will need
multifactor authentication security is about 233. Based on estimates
from CG-FAC SMEs with experience implementing multifactor
authentication at other Government agencies, implementation of
multifactor authentication will cost each facility anywhere from $3,000
to $15,000 in the initial year for setup and configuration. For this
RA, we use the average of approximately $9,000 for the costs of initial
setup and configuration. It will also cost each facility approximately
$150 per end user for annual maintenance and support of the implemented
multifactor authentication system. These costs represent the average
costs for implementing and maintaining a multifactor authentication
system across different organization and company sizes based on the
SMEs' experience.
We use the total number of estimated employees at an affected
facility company in our analysis of costs because the Coast Guard
currently lacks data on (1) which systems in use at a facility or OCS
facility will need multifactor authentication, and (2) whether only a
subset of the total employees will require access. This is largely
because owners and operators have the discretion to designate both
critical IT and OT systems as well as the number of employees needing
access. Therefore, for the purpose of this RA, we assume all employees
will need multifactor authentication access.
We obtain the average number of facility employees from a Coast
Guard contract that uses D&B Hoovers' database for company employee
data (available in the docket for this rulemaking). The average number
of employees at a facility company is 74. We estimate the undiscounted
initial-year cost to implement multifactor authentication for 233
facility and OCS facility companies to be approximately $2,097,000 (233
facilities x $9,000). We estimate the undiscounted initial-year and
annual cost for multifactor authentication support and maintenance at
facilities and OCS facilities to be approximately $2,586,300 (233
facility companies x 74 employees x $150).
We estimate the total undiscounted initial-year cost to implement
account security measures and multifactor authentication for facilities
and OCS facilities to be approximately $4,785,771 ($102,471 cost to
implement account security measures + $2,097,000 cost to set up and
configure multifactor authentication + $2,586,300 cost for multifactor
authentication support). We estimate the undiscounted annual cost in
Years 2 through 10 to be approximately $2,688,771 ($102,471 cost to
manage account security + $2,586,300 cost to maintain and provide
multifactor authentication support).
We estimate the total discounted cost to implement account security
measures for (1) 178 facilities and OCS facilities that will need to
implement general account security measures and (2) 233 facilities and
OCS facilities that will need to implement multifactor authentication
to be approximately
[[Page 6370]]
$26,207,997 over a 10-year period of analysis, using a 2-percent
discount rate. We estimate the annualized cost to be approximately
$2,917,645, using a 2-percent discount rate.
Using the same rates of baseline activity for the total population
of facilities, we estimate that a subset of (1) 1 OCS facility owner or
operator that will need to implement general account security measures
and (2) 2 OCS facility owners or operators that will need to implement
multifactor authentication to be approximately $222,234 over a 10-year
period of analysis, using a 2-percent discount rate. We estimate the
annualized cost to be approximately $24,741, using a 2-percent discount
rate. See table 19.
[GRAPHIC] [TIFF OMITTED] TR17JA25.027
Owners and operators of U.S.-flagged vessels will need to implement
the same account security measures as facilities and OCS facilities.
The population of vessels affected, where applicable, will be about
6,379, rather than 11,222, because we subtract the barge population of
4,843 from 11,222, the total number of affected vessels. Because barges
are unmanned, we assume they do not have computer systems on board and,
therefore, may not require account security measure implementation.
Instead, we assume they will request waivers for these provisions, a
cost included in Cybersecurity Plan development costs estimated earlier
in the analysis.
The number of affected vessel owners and operators will be about
1,686, excluding 389 barge owners and operators that do not own or
operate other affected vessels. Based on the NMSAC estimates detailed
above, it will take a database administrator about 8 hours to implement
the account security measures and 8 hours to manage account security
annually thereafter on behalf of each owner and operator of a vessel.
We estimate the undiscounted initial-year cost to implement and
annually recurring cost to manage account security measures for owners
and operators of U.S.-flagged vessels, excluding barge owners and
operators, to be approximately $970,596 [(1,686 vessel owners and
operators x (8 hours x $71.96)].
The number of owners and operators who will require multifactor
authentication security is about 1,686, for approximately 6,379
vessels. Based on Coast Guard information, multifactor authentication
systems will be implemented at the company level because networks and
account security policies will be managed at the company level, and not
for each individual vessel. Any security updates or multifactor
authentication programs implemented at the company level can be pushed
out to devices located on board vessels owned or operated by the
company. We use the same cost estimate from CG-FAC that we use for
facilities. It will cost the owner or operator of a vessel
approximately $9,000 to implement multifactor authentication in the
first year and about $150 annually for multifactor authentication
support and maintenance per end user. To determine the number of
employees for each vessel company, we use data from the certificate of
inspection manning requirements in MISLE for each vessel subpopulation
as described in the cost analysis for cybersecurity drills. Similarly,
we assume 2 crews and multiply the total number of seafaring crew by
1.33 to account for shoreside staff to obtain an estimate of total
company employees per vessel. We estimate the total undiscounted
initial-year cost to implement multifactor authentication for 1,686
vessel owners and operators to be approximately $15,174,000 (1,686
vessel owners and operators x $9,000).
To calculate the annual cost per end user, we multiply the number
of vessels for a given vessel type by the average number of employees
per vessel and the $150 annual cost of support and maintenance. For
example, there are
[[Page 6371]]
about 430 OSVs in the affected population, with an average number of 16
employees for each OSV. Therefore, the undiscounted annual cost of
support and maintenance for OSV owners and operators will be
approximately $1,032,000 (16 employees per each OSV (including
shoreside) x $150 x 430 OSVs). We perform this calculation for each
vessel type in the affected population and add the costs together to
obtain the total initial-year cost and annual cost thereafter. We
estimate the total undiscounted annual cost for multifactor
authentication maintenance and support on vessels to be about
$20,212,500 (number of employees for each vessel type x $150 x number
of vessels for each vessel type). See table 20. We add these costs to
the previously calculated implementation costs to obtain the initial-
year costs associated with multifactor authentication of $35,386,500
($15,174,000 implementation costs + $20,212,500 annual support and
maintenance costs) as seen in column 3 of table 21.
[GRAPHIC] [TIFF OMITTED] TR17JA25.028
We estimate the total undiscounted initial-year cost to implement
account security measures in Sec. 101.650(a)(1) through (3), and (5)
through (7) and multifactor authentication for end users in Sec.
101.650(a)(4) for 1,686 owners and operators of U.S.-flagged vessels to
be approximately $36,357,096 ($970,596 cost to implement account
security + $35,386,500 cost to implement and provide multifactor
support). We estimate the total undiscounted annual cost in Years 2
through 10 to be approximately $21,183,096 ($970,596 cost to manage
account security + $20,212,500 cost to maintain and provide multifactor
authentication).
We estimate the total discounted cost to implement all the account
security measures in Sec. 101.650(a)(1) through (3), and (5) through
(7) and multifactor authentication for end users in Sec. 101.650(a)(4)
for 1,686 owners and operators of U.S.-flagged vessels to be
approximately $205,155,431 over a 10-year period of analysis, using a
2-percent discount rate. We estimate the annualized cost to be
approximately $22,839,242 using a 2-percent discount rate. See table
21.
[[Page 6372]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.029
We estimate the total discounted cost to implement account security
measures for owners and operators of U.S.-flagged vessels, facilities,
and OCS facilities, including multifactor authentication, to be
approximately $231,363,427 over a 10-year period of analysis, using a
2-percent discount rate. We estimate the annualized cost to be
approximately $25,756,887, using a 2-percent discount rate. See table
22.
[GRAPHIC] [TIFF OMITTED] TR17JA25.030
[[Page 6373]]
Cybersecurity Training Cost
The second cost provision under cybersecurity measures, in Sec.
101.650(d), will be training. All persons with access to IT and OT will
need annual training in topics such as the relevant aspects of the
owner or operator's specific cybersecurity technology and concerns,
recognition of threats and incidents, and incident reporting
procedures. Given the importance of having a workforce trained on
onsite cybersecurity systems as soon as possible to detect and mitigate
cyber incidents, cybersecurity training will be verified during annual
inspections following the implementation of this final rule. This means
we assume there will be costs related to training in the first year of
analysis.
Based on information from the Jones Walker ``Ports and Terminals
Cybersecurity Survey,'' (see footnote 60), about 25 percent of
facilities are currently conducting cybersecurity training on an annual
basis.\118\ Therefore, we estimate the number of owners and operators
of facilities and OCS facilities who need to implement training to be
about 1,029 (1,372 owners and operators x 0.75).
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\118\ See footnote 60 and page 48 of the survey in the docket.
---------------------------------------------------------------------------
Based on information from Coast Guard SMEs, we assume that the CySO
at a facility or OCS facility will spend 2 hours per year to develop,
update, and provide cybersecurity training. This is an average estimate
based on the time it would take to either develop unique training or
identify existing training resources to use within their organizations.
This length of time will vary widely based on the complexity of the
material and general familiarity with the subject matter but is aided
by publicly available training resources online.\119\ Subject matter
experts with Coast Guard also estimate that it will take 1 hour per
facility employee to complete the training annually, based on existing
industry-leading cyber awareness training programs.\120\
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\119\ For example, see CISA's compilation of Cybersecurity
Education and Training Resources: https://www.cisa.gov/sites/default/files/2024-02/Resources%20Collection_02062024_508c.pdf,
accessed October 11, 2024.
\120\ In addition, CG-FAC recently worked with ABS to deliver
Cybersecurity Awareness Training for AMSC members. This training
took approximately 1 hour to deliver and is available here: https://ww2.eagle.org/en/news/abs-news/abs-leads-cyber-trainings-for-us-coast-guard-maritime-security-committee-members.html, accessed
October 11, 2024.
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This final rule will also require part-time employees and
contractors to complete the training but allow for personnel unable to
receive cybersecurity training to be accompanied or monitored by a
person who has completed the required training when accessing IT or OT
systems. However, the Coast Guard has data only on the number of full-
time employees at facilities and OCS facilities, so we use this
estimate. We acknowledge that costs may be higher for facilities than
we estimate in this analysis if we take other employees into account.
Missing from this estimate are part-time employees and contractors, and
if pertinent, estimated costs for the unknown number of employees who
will need to be accompanied when accessing IT or OT systems. If
included, the training costs would be higher than currently estimated.
However, it is possible that some of these individuals would already
require an escort under 33 CFR part 105 for access to designated secure
areas, and that this would not lead to any change in operations. As
before, we use the estimate of the average number of employees at
facilities and OCS facilities, or 74. We also use the previously
calculated loaded mean hourly wage rate of approximately $60.34 for the
facility employees.
We estimate the undiscounted initial-year and annual cost for
facility and OCS facility owners and operators to train employees on
aspects of cybersecurity to be approximately $4,767,810, rounded [1,029
facility owners and operators x ((74 employees at each facility company
x $60.34 facility employee wage x 1 hour) + (1 CySO developing training
x $84.14 CySO wage x 2 hours))].
We estimate the discounted cost for facility and OCS facility
owners and operators to complete annual training to be approximately
$42,827,259 over a 10-year period of analysis, using a 2-percent
discount rate. We estimate the annualized cost to be approximately
$4,767,810, using a 2-percent discount rate. See table 23. Using the
same rate of baseline activity estimated for the overall population of
facilities, we estimate that the subset of 7 owners or operators of OCS
facilities will incur costs of $291,340 over a 10-year period of
analysis and $32,434 annualized, using a 2-percent discount rate.
[[Page 6374]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.031
Employees on board U.S.-flagged vessels will also be required to
complete annual cybersecurity training. The hour estimates for the CySO
to develop cybersecurity training and employees to complete the
training are the same as for facility estimates, 2 hours and 1 hour,
respectively. The training costs for U.S.-flagged vessels are based
upon the number of employees for each vessel type (excluding barges),
similar to the cost analysis for drills and account security measures.
Similarly, we use the loaded mean hourly wage rates shown in table 10
in our cost analysis for cybersecurity drills.
We estimate the undiscounted initial-year and annual cost of
cybersecurity training for vessel employees to be approximately
$6,590,094 (number of vessels for each affected vessel category x
number of employees for each vessel type x representative mean hourly
wage for vessel type x 1 hours for training). For example, using OSVs,
there are about 430 OSVs, with 16 employees for each OSV (including
shoreside). Therefore, we estimate the annual training cost for OSVs to
be about $377,850 (430 OSVs x 16 employees x $54.92 OSV employee wage x
1 hour), rounded. We perform this calculation for all for the affected
vessel types in this final rule and add it to the estimated costs for
training development. We estimate the undiscounted annual cost to
develop cybersecurity training to be approximately $283,720 (1,686
vessel companies (excluding barge companies) x 1 CySO per vessel
company x $84.14 CySO wage x 2 hours to develop training)]. This means
the total undiscounted annual training cost for the affected population
of U.S.-flagged vessels is $6,873,814 ($6,590,094 employee training
costs + $283,720 training development costs). Table 24 displays the
total employee training costs for each vessel type impacted by the
training requirement.
[[Page 6375]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.032
We estimate the discounted cost for employees aboard U.S.-flagged
vessels to complete annual cybersecurity training to be approximately
$61,744,618 over a 10-year period of analysis, using a 2-percent
discount rate. We estimate the annualized cost to be approximately
$6,873,814, using a 2-percent discount rate. See table 25.
[GRAPHIC] [TIFF OMITTED] TR17JA25.033
We estimate the total discounted cost of cybersecurity training for
facilities and vessels to be approximately $104,571,877 over a 10-year
period of analysis, using a 2-percent discount rate. We estimate the
annualized cost to be approximately $11,641,624, using a 2-percent
discount rate. See table 26.
[[Page 6376]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.034
Penetration Testing
The third provision under cybersecurity measures that will impose
costs on industry is penetration testing, in Sec. 101.650(e)(2). The
CySO for each U.S.-flagged vessel, facility, and OCS facility will
ensure that a penetration test is completed in conjunction with
renewing the Cybersecurity Plan. We assume facility and vessel owners
and operators in the affected population will pay a third party to
conduct a penetration test to maintain safety and security within the
IT and OT systems for all KEVs. The cost for penetration testing is a
function of the number of vessel and facility owners and operators,
because networks are typically managed at a corporate level. At the
conclusion of the test, the CySO will also need to include a letter
certifying the test was conducted and document all identified
vulnerabilities in the FSA, OCS FSA, or VSA--a cost that is included in
our analysis of annual Cybersecurity Plan maintenance. Further, it is
expected that the CySO will also work to correct or mitigate the
identified vulnerabilities. However, the methods employed and time
taken to correct or mitigate these vulnerabilities represent a source
of uncertainty in our analysis, and we are unable to estimate the
associated costs.
Based on the Jones Walker survey (see footnote number 60), 68
percent of facilities and OCS facilities are currently conducting
penetration testing. Using 1,372 affected owners and operators of
facilities and OCS facilities, the number of owners and operators of
facilities and OCS facilities who need to conduct penetration testing
is about 439 (1,372 x 0.32). Using cost estimates for penetration
testing from NMSAC members who have experience conducting and
contracting with facilities and OCS facilities to conduct penetration
tests, as well as Coast Guard SMEs with similar experience, we estimate
it will cost each owner or operator of a facility or OCS facility
$10,000 for the initial penetration test and an additional $100 for
each IP address on the network to capture the additional costs of
network complexity.
In the NPRM, we estimated initial costs of $5,000 for the
penetration test, an additional $50 per IP address, and used the number
of employees as a rough estimate for the number of IP addresses on a
given network. We received several public comments on these estimates
that suggested that we were underestimating the costs of penetration
testing and the number of IP addresses by not including estimates for
additional industrial personnel and OT systems. While none of the
commenters provided specific cost estimates beyond stating that our
estimates were underestimates, one comment from Offshore Marine Service
Association stated that we did not include all relevant costs by
assuming that there would be IP addresses equal to the number of
employees at a company. In addition to crewmembers outlined in a
certificate of inspection, vessels will often carry additional crew or
industrial personnel with their own devices, and many vessels will
contain OT systems with unique IP addresses. Although this comment is
focused on U.S.-flagged vessels, it is evident that these same concerns
could apply to estimated costs in the population of facilities and OCS
facilities.
Based on these comments, the Coast Guard revisited its initial
estimates and, in order to better estimate the costs associated with
penetration testing, doubled the initial cost estimate to $10,000 and
the estimate of the cost per IP address to $100, which better reflects
industry averages.\121\ In addition, to better estimate number of IP
addresses on a given company's network, we now
[[Page 6377]]
use the number of employees and multiply it by 2 to capture employees
potentially using multiple devices, additional industrial personnel
working at facilities, or any OT systems on the network. We acknowledge
that some owners or operators could face costs in excess of these
estimates because of the large range of costs and network complexity,
but our SMEs with penetration testing experience believe these
adjustments better reflect average costs.
---------------------------------------------------------------------------
\121\ In 2023, RSI Security estimated that on average, a high
quality, professional penetration test can cost from $10,000-
$30,000, depending on the size, complexity, methodology, and scope
of the test, among other factors. Our estimated range of $24,800 for
owners and operators of facilities or OCS facilities, and $12,600 to
$27,000 for most owners of one U.S.-flagged vessel, depending on the
type of vessel, fall within this estimated range. Costs can exceed
this range when considering owners of multiple vessels, or our
estimated costs for the owner of the MODU in our population
($84,400, see section Total Costs of the Final Rule per Affected
Owner or Operator in this RA for more details on this outlier
vessel) given the additional network complexity we would expect to
see based on the size of the organization and number of employees
using its IT and OT systems. See https://blog.rsisecurity.com/what-is-the-average-cost-of-penetration-testing/ for more information on
industry estimates and factors contributing to penetration testing
costs, accessed November 5, 2024.
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The number of employees for each facility is 74, meaning we
estimate 148 IP addresses per owner or operator of a facility or OCS
facility. Owners and operators of facilities and OCS facilities will
incur penetration testing costs in conjunction with submitting and
renewing the Cybersecurity Plan, or every 5 years. This means costs for
penetration testing will be incurred in the second and seventh year of
analysis. We estimate the undiscounted second- and seventh-year costs
to owners and operators of facilities and OCS facilities for
penetration testing to be about $10,887,200 [(439 facility owners and
operators x $10,000) + (148 IP addresses x 439 facility owners and
operators x $100)]. We estimate the discounted cost for owners and
operators of facilities and OCS facilities to conduct penetration
testing to be about $19,942,400 over a 10-year period of analysis,
using a 2-percent discount rate. We estimate the annualized cost to be
about $2,220,118 using a 2-percent discount rate. Using the same rate
of baseline activity estimated for the overall population of
facilities, we estimate that the subset of 3 owners or operators of OCS
facilities will incur costs of $136,281 over a 10-year period of
analysis and $15,172 annualized, using a 2-percent discount rate. See
table 27.
[GRAPHIC] [TIFF OMITTED] TR17JA25.035
Owners and operators of U.S.-flagged vessels will also need to
conduct penetration testing, similar to facilities and OCS facilities.
We do not include barges or barge-specific owners and operators, given
the unmanned nature of barges and their relatively limited onboard IT
and OT systems. Instead, we assume they will request waivers for these
provisions, a cost included in Cybersecurity Plan development costs
estimated earlier in the analysis. All estimates for penetration
testing on U.S.-flagged vessels are the same as for facilities and OCS
facilities. We estimate the undiscounted second- and seventh-year costs
for owners and operators of vessels to conduct penetration testing to
be approximately $43,810,000 [(1,686 vessel owners and operators x
$10,000) + (number of vessels for each vessel type x number of IP
addresses for each vessel type x $100)]. See table 28 for a calculation
of the costs per IP address for the various vessel populations, which
can be added to the costs per owner or operator, or $16,860,000 (1,686
owners and operators x $10,000) in Years 2 and 7.
[[Page 6378]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.036
We estimate the discounted cost for owners and operators of U.S.-
flagged vessels to conduct penetration testing to be approximately
$80,248,045 over a 10-year period of analysis, using a 2-percent
discount rate. We estimate the annualized cost to be approximately
$8,933,736 using a 2-percent discount rate. See table 29.
[GRAPHIC] [TIFF OMITTED] TR17JA25.037
We estimate the total discounted cost to conduct penetration
testing for owners and operators of U.S.-flagged vessels, facilities,
and OCS facilities to be approximately $100,190,445 over a 10-year
period of analysis, using a 2-percent discount rate. We estimate the
annualized cost to be approximately $11,153,854 using a 2-percent
discount rate. See table 30.
[[Page 6379]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.038
Routine System Maintenance for Risk Management
The final cost provision under cybersecurity measures will be
routine system maintenance for risk management, in Sec.
101.650(e)(3)(i) through (vi). This final rule will require the CySO of
a U.S.-flagged vessel, facility, or OCS facility to (1) ensure patching
(software updates) or implementing controls for all KEVs in critical IT
and OT systems in paragraph (e)(3)(i), (2) maintain a method to receive
or act on publicly submitted vulnerabilities in paragraph (e)(3)(ii),
(3) maintain a method to share threat and vulnerability information
with external stakeholders in paragraph (e)(3)(iii), (4) ensure there
are no exploitable channels exposed to internet accessible systems in
paragraph (e)(3)(iv), (5) ensure that no OT is connected to the
publicly accessible internet unless explicitly required for operation
in paragraph (e)(3)(v), and (6) conduct vulnerability scans according
to the Cybersecurity Plan in paragraph (e)(3)(vi).
Based on information from CGCYBER and NMSAC, we estimate costs for
only the vulnerability scans in this RA, because it is expected that
CySOs will incorporate many of these provisions into the initial
development and annual maintenance of the Cybersecurity Plan.
Provisions that require setting up routine patching, developing methods
for communicating vulnerabilities, and ensuring limited network
connectivity of OT and other exploitable systems are expected to be
less time-intensive efforts that will be completed following an initial
Cybersecurity Assessment and documented in the Cybersecurity Plan. As a
result, we include those costs in that portion of the analysis.
However, if an OT system does need to be taken offline to be patched or
segmented from other IT systems, the Coast Guard does not have
information on how long or intensive that process would be because of
the great degree of variability in OT systems within the affected
population. We discuss patching of OT systems, network segmentation,
and uncertainty more in later sections in this final rule.
Based on information from CGCYBER, the cost for each owner or
operator of a U.S.-flagged vessel, facility, and OCS facility to
acquire third-party software capable of vulnerability scans will be
approximately $3,390 annually, including the cost for a software
subscription. We base our analysis on the cost of a prevalent
vulnerability scanner or virus software for business.
Vulnerability scans can occur in the background while systems are
operational and represent a less intensive method of monitoring IT and
OT systems for vulnerabilities, which complements more intensive
penetration tests that will be required every 5 years. For this reason,
we do not estimate an hour burden in addition to the annual
subscription cost of securing vulnerability scanning software. We
estimate the undiscounted annual cost for owners and operators of
facilities and OCS facilities to subscribe to and use vulnerability
scanning software to be approximately $4,651,0800 (1,372 facility
owners and operators x $3,390). We estimate the undiscounted annual
cost for the subset of 33 facilities owned and operated by 9 unique
operators to subscribe to and use vulnerability scanning software to be
approximately $30,510 (9 OCS facility owners and operators x $3,390) of
the total cost estimate for facilities. We estimate the undiscounted
annual cost for owners and operators of U.S.-flagged vessels to
subscribe to and use vulnerability scanning software to be
approximately $5,715,540 (1,686 vessel owners and operators x $3,390).
Combined, we estimate the total discounted cost for owners and
operators of U.S.-flagged vessels, facilities, and OCS facilities to
use vulnerability scanning software to be approximately $93,119,046
over a 10-year period of analysis, using a 2-percent discount rate. We
estimate the annualized cost to be approximately $10,366,620, using a
2-percent discount rate. See table 31.
[[Page 6380]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.039
Total Costs of the Final Rule to Industry
We estimate the total discounted cost of this final rule to the
affected population of facilities and OCS facilities to be
approximately $514,932,875 over a 10-year period of analysis, using a
2-percent discount rate. We estimate the annualized cost to be
approximately $57,325,689, using a 2-percent discount rate. See table
32.
As a subset of the cost estimate for facilities, we estimate that
the 33 OCS facilities operated by 9 different owners and operators will
incur costs of approximately $3,749,921 over a 10-year period of
analysis, using a 2-percent discount rate. We estimate the annualized
costs for OCS facilities to be approximately $417,466, using a 2-
percent discount rate. See table 33.
BILLING CODE 9110-04-P
[[Page 6381]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.040
[[Page 6382]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.041
BILLING CODE 9110-04-C
As seen in table 32, the primary cost drivers for the population of
facilities and OCS facilities are costs for drills and exercises at
48.93 percent of the
[[Page 6383]]
total costs to industry. Cybersecurity Plan-related costs and costs for
training come in second and third at 25.74 percent and 8.33 percent of
the total costs, respectively. We believe some of this is due to the
analysis of drills and exercises, and Cybersecurity Plan costs, which
assume no baseline activity within the affected population because of a
lack of information. Costs that appear as a higher percentage of the
total costs in the population of U.S.-flagged vessels (account security
measures and multifactor authentication, for example) have been
adjusted based on current baseline activity within the population of
facilities based on survey results, and thus, appear as smaller impacts
to the population in general.
We estimate the total discounted cost of this final rule to the
affected population of U.S.-flagged vessels to be approximately
$693,173,722 over a 10-year period of analysis, using a 2-percent
discount rate. We estimate the annualized cost to be approximately
$77,168,624, using a 2-percent discount rate. See table 34.
BILLING CODE 9110-04-P
[[Page 6384]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.042
BILLING CODE 9110-04-C
As in table 34, the primary cost drivers for the population of
U.S.-flagged vessels are costs related to drills and exercises at 32.86
percent of the
[[Page 6385]]
total costs to industry. Costs related to account security measures and
multifactor authentication come in second at 29.54 percent of the total
costs. Costs related to penetration testing are third at 11.40 percent
of the total costs. We estimate that costs for account security
measures and multifactor authentication represent such a high portion
of the overall costs related to cybersecurity because the Coast Guard
was unable to estimate current baseline activity for these provisions
and used conservative (upper-bound) estimates related to the population
required to implement and manage multifactor authentication. In the
NPRM, the Coast Guard requested public comment on who in the affected
population of U.S.-flagged vessels has already implemented multifactor
authentication and what the associated costs were but received no
additional information.
We estimate the total discounted cost of this final rule to
industry to be approximately $1,208,106,595 over a 10-year period of
analysis, using a 2-percent discount rate. We estimate the annualized
cost to be approximately $134,494,313, using a 2-percent discount rate.
See table 35.
BILLING CODE 9110-04-P
[[Page 6386]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.043
BILLING CODE 9110-04-C
[[Page 6387]]
Total Costs of the Final Rule per Affected Owner or Operator
We estimate the average annual cost per owner or operator of a
facility or OCS facility to be approximately $50,362, under the
assumption that an owner or operator will need to implement each of the
provisions required by this final rule. Each additional facility owned
or operated will increase the estimated annual costs by an average of
$4,396 per facility, since each facility or OCS facility will require
an individual Cybersecurity Plan. Year 2 of the analysis period
represents the year with the highest costs incurred per owner, with
estimated costs of $73,320 for an owner or operator with one facility
or OCS facility. See table 36 for a breakdown of the costs per entity
for an owner or operator owning one facility or OCS facility.
[[Page 6388]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.044
[[Page 6389]]
To estimate the cost for an owner or operator of a facility or OCS
facility to develop, resubmit, conduct annual maintenance and audit the
Cybersecurity Plan, we use estimates provided earlier in the analysis.
The hour-burden estimates are 100 hours for developing the
Cybersecurity Plan (average hour burden), 10 hours for annual
maintenance of the Cybersecurity Plan (which will include amendments),
15 hours to renew Cybersecurity Plans every 5 years, and 40 hours to
conduct annual audits of Cybersecurity Plans.
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\122\ The cost totals in table 36 represent cost estimates for
owners and operators of one facility or OCS facility under the
assumption that they will need to implement all cost-creating
provisions of this final rule. Therefore, when multiplied over the
full number of affected entities, the calculated totals will exceed
those estimated for the population of facilities and OCS facilities
elsewhere in the analysis. In addition, the cost estimates for items
related to the Cybersecurity Plan are dependent upon the number of
facilities owned and must be multiplied accordingly by the number of
facilities owned. This is discussed in further detail later in the
analysis of costs per owner or operator.
---------------------------------------------------------------------------
Based on estimates from Coast Guard FSP and OCS FSP reviewers at
local inspections offices, approximately 10 percent of Cybersecurity
Plans will need to be resubmitted in the second year due to revisions
that will be needed to the Plans, which is consistent with the current
resubmission rate for FSPs and OCS FSPs. For renewals of Plans after 5
years (occurring in the seventh year of the analysis period), Plans
will need to be further revised and resubmitted in approximately 10
percent of cases as well. However, in this portion of the RA, we
estimate costs as though the owner or operator will need to revise and
resubmit their Plans in all cases, resulting in an upper-bound (high)
estimate of costs for each entity. We estimate the time for revision
and resubmission to be about half the time to develop the Plan itself,
or 50 hours in the second year of submission, and 7.5 hours after 5
years (in the seventh year of the analysis period). Because we include
the annual Cybersecurity Assessment in costs to develop Plans, and we
do not assume that owners and operators will wait until the second year
of analysis to begin developing the Cybersecurity Plan or implementing
relevant cybersecurity measures, we divide the estimated 100 hours to
develop Plans equally across the first and second years of analysis.
Using the CySO loaded hourly CySO wage of $84.14, we estimate the
Cybersecurity Plan-related costs by adding the total number of hours to
develop, resubmit, maintain, and audit each year and multiplying by the
CySO wage. For example, we estimate owners and operators will incur
$8,414 in costs in Year 2 of the analysis period [1 facility x $84.14
CySO wage x (50 hours to develop the Plan + 50 hours to revise and
resubmit the Plan) = $8,414]. Table 37 displays the cost estimates per
entity for an owner or operator of 1 facility or OCS facility over a
10-year period of analysis. For an owner or operator of multiple
facilities or OCS facilities, we estimate the total costs by
multiplying the total costs in table 37 by the number of owned
facilities.
[GRAPHIC] [TIFF OMITTED] TR17JA25.045
Similarly, we use earlier estimates for the calculation of costs
for each entity for drills and exercises, account security measures,
multifactor authentication, cybersecurity training, penetration
testing, and vulnerability management.
For drills and exercises, we assume that a CySO on behalf of each
owner and operator will develop cybersecurity drills and cybersecurity
exercises. This development is expected to take 8 hours for each of the
2 annual drills and 20 hours for an annual exercise. We also include
costs for drill and exercise participation for a portion of facility or
OCS facility employees. We assume 33 percent of all employees will take
4 hours to participate in each drill and exercise, consistent with the
share of shoreside employees estimated at U.S.-flagged vessel
organizations. Using the loaded hourly wage for a CySO of
[[Page 6390]]
$84.14 and the loaded hourly wage for a facility employee of $60.34, we
estimate annual costs of approximately $20,407 per facility owner or
operator [($84.14 CySO wage x 8 hours x 2 drills) + ($84.14 CySO wage x
20 hours x 1 exercise) + (24 employees x $60.34 facility employee wage
x 4 hours x 2 drills) + (24 employees x $60.34 facility employee wage x
4 hours x 1 exercise = $20,407], as seen in table 36.
For account security measures, we assume that a database
administrator on behalf of each owner or operator will spend 8 hours
each year implementing and managing account security. Using the loaded
hourly wage for a database administrator of $71.96, we estimate annual
costs of approximately $576 ($71.96 database administrator wage x 8
hours = $576), as seen in table 36.
For multifactor authentication, we assume that an owner or operator
of a facility or OCS facility will spend $9,000 in the initial year on
average to implement a multifactor authentication system and spend
approximately $150 per employee annually for system maintenance and
support. Therefore, we estimate first year costs of approximately
$20,100 [$9,000 implementation cost + ($150 support and maintenance
costs x 74 average facility company employees)], and subsequent year
costs of $11,100 ($150 support and maintenance costs x 74 average
facility company employees), as seen in table 36.
For cybersecurity training, we assume that a CySO will take 2 hours
each year to develop and manage employee cybersecurity training, and
employees at a facility or OCS facility will take 1 hour to complete
the training each year. Using the estimated CySO wage of $84.14 and the
estimated facility employee wage of $60.34, we estimate annual training
costs of approximately $4,633 [($84.14 x 2 hours) + ($60.34 x 74
facility company employees x 1 hour)], as seen in table 36.
For penetration testing, we estimate costs only in the second and
seventh years of analysis since tests are required to be performed in
conjunction with submitting and renewing the Cybersecurity Plan. We
assume that owners and operators of facilities and OCS facilities will
spend approximately $10,000 per penetration test and an additional $100
per IP address at the organization to capture network complexity. We
use the total number of company employees multiplied by 2 as a proxy
for the number of IP addresses, based on suggestions from public
commenters stating that networks often include employees with multiple
devices, outside industrial personnel accessing the networks, and OT
systems that increase the number of IP addresses and the network
complexity at a given company. As a result, we estimate second- and
seventh-year costs of approximately $24,800 [$10,000 testing cost +
($100 x 148 IP addresses)], as seen in table 36.
For vulnerability management, we assume that each owner or operator
of a facility or OCS facility will need to secure a vulnerability
scanning program or software. Because vulnerability scans can occur in
the background, we do not assume an additional hour burden associated
with the implementation or use of a vulnerability scanner each year.
Using the annual subscription cost of an industry leading vulnerability
scanning software, we estimate annual costs of approximately $3,390, as
seen in table 36.
We perform the same calculations to estimate the costs per entity
for owners and operators of U.S.-flagged vessels. However, the
estimates for the population of U.S.-flagged vessels have more
dependency upon the type and number of vessels owned by the company
being analyzed. This is largely due to the varying numbers of employees
per vessel, by vessel type. We estimate average annual costs for each
entity of approximately $14,052 per U.S.-flagged vessel owner or
operator, as seen in table 38.
[[Page 6391]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.046
[[Page 6392]]
To estimate the costs that depend on the number and type of U.S.-
flagged vessel for each entity, we use the number of employees per
vessel and, in the case of cybersecurity training costs, a unique
weighted hourly wage based on the personnel employed on each vessel
type as calculated in Appendix A: Wages Across Vessel Types. Table 39
displays the average number of employees for each vessel type,
including shoreside employees, and their unique weighted mean hourly
wages. Table 40 displays the per-vessel costs associated with each type
of vessel.
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\123\ The cost estimates in table 38 represent the costs
incurred at a company level for each owner and operator of U.S.-
flagged vessels, so they must be added to the costs calculated in
table 42, which are dependent on the type and number of vessels
owned. We do this to create a full picture of the estimated costs
per owner or operator. When these totals are multiplied over the
full number of affected entities, the calculated totals will exceed
those estimated for the population of U.S.-flagged vessels elsewhere
in this RA because we assume that each owner or operator will need
to implement all provisions of this final rule that create costs.
This is discussed in further detail in the analysis of costs per
owner or operator.
[GRAPHIC] [TIFF OMITTED] TR17JA25.047
[[Page 6393]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.048
To calculate the total cost for each entity in the population of
U.S.-flagged vessels, we add the annual per-vessel costs from table 40
based on the number and types of vessels owned to the per-entity costs
estimated in table 38.
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\124\ When adding these costs to the per-entity costs for owners
and operators, add only these estimated penetration costs in Years 2
and 7.
---------------------------------------------------------------------------
To estimate the cost for an owner or operator of a U.S.-flagged
vessel to develop, resubmit, conduct annual maintenance for, and audit
the Cybersecurity Plan, we use estimates provided earlier in this RA.
The hour-burden estimates are 80 hours for developing the Cybersecurity
Plan (average hour burden), 8 hours for annual maintenance of the
Cybersecurity Plan (which will include amendments), 12 hours to renew
Cybersecurity Plans every 5 years, and 40 hours to conduct annual
audits of Cybersecurity Plans. Based on estimates from reviewers of
Coast Guard VSPs at MSC, approximately 10 percent of Plans will need to
be resubmitted in the second year due to revisions that will be needed
to the Plans, which is consistent with the current resubmission rate
for VSPs. For renewals of Plans after 5 years (occurring in the seventh
year of the analysis period), Cybersecurity Plans will need to be
further revised and resubmitted in approximately 10 percent of cases as
well. However, in this portion of this RA, we estimate costs as though
the owner or operator will need to revise and resubmit their Plans in
all cases resulting in an upper-bound (high) estimate of costs for each
entity.
We estimate the time for revision and resubmission to be about half
the time to develop the Cybersecurity Plan itself, or 40 hours in the
second year of submission, and 6 hours after 5 years (in the seventh
year of the analysis period). Because we include the annual
Cybersecurity Assessment in the cost to develop Plans, and we do not
assume that owners and operators will wait until the second year of
analysis to begin developing the Cybersecurity Plan or implementing
related cybersecurity measures, we divide the estimated 80 hours to
develop Plans equally across the first and second years of analysis.
Using the CySO loaded hourly CySO wage of $84.14, we estimate the
Cybersecurity Plan-related costs by adding the total number of hours to
develop, resubmit, maintain, and audit each year and multiplying by the
CySO wage. For example, we estimate owners and operators will incur
approximately $6,731 in costs in Year 2 of the analysis period [$84.14
CySO wage x (40 hours to develop the Plan + 40 hours to revise and
resubmit the Plan) = $6,731]. See table 41.
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Similarly, we use earlier estimates for the calculation of costs
for each entity for drills and exercises, account security measures,
multifactor authentication, cybersecurity training, penetration
testing, and vulnerability management.
For drills and exercises, we assume that, on behalf of each owner
and operator, a CySO will develop new cybersecurity drills and
cybersecurity exercises. This development is expected to take 8 hours
for each of the 2 annual drills and 20 hours for an annual exercise. We
also include costs for drill participation for a portion of U.S.-
flagged vessel employees. We assume only shoreside employees will take
4 hours to participate in each drill and exercise. The costs per
employee associated with drills and exercises vary depending on the
types and number of vessels and will be based on the average number of
shoreside employees per vessel and the associated weighted hourly wage.
For example, using the estimated CySO wage of $84.14 and the estimated
OSV employee wage of $54.92, we estimate annual drills and exercises
costs of approximately $5,665 [($84.14 x 8 hours x 2 drills) + ($84.14
x 20 hours x 1 exercise) + ($54.92 x 4 average shoreside employees per
OSV x 4 hours x 2 drills) + ($54.92 x 4 average shoreside employees per
OSV x 4 hours x 1 exercise)]. Development costs per entity of $3,029
can be found in table 38 and variable per-vessel participation costs
can be found in table 40.
For account security measures, we assume that, on behalf of each
owner or operator, a database administrator will spend 8 hours each
year implementing and managing account security. Using the loaded
hourly wage for a database administrator of $71.96, we estimate annual
costs of approximately $576 ($71.96 database administrator wage x 8
hours = $576), as seen in table 38.
For multifactor authentication, we assume that an owner or operator
of a U.S.-flagged vessel will spend $9,000 in the initial year on
average to implement a multifactor authentication system and spend
approximately $150 per employee annually for system maintenance and
support. Therefore, we estimate first-year implementation costs of
approximately $9,000 for all owners and operators, with annual costs in
Years 2 through 10, depending on the number of employees for each type
of vessel. For example, we estimate the first-year costs to an owner or
operator of one OSV to be approximately $11,400 [$9,000 implementation
cost + ($150 support and maintenance costs x 16 average employees per
OSV)], and subsequent year costs of $2,400 ($150 support and
maintenance costs x 16 average employees per OSV). Implementation costs
per entity of $9,000 for implementing the multifactor authentication
system can be found in table 38, and variable costs per vessel can be
found in table 40.
For cybersecurity training, we assume that on behalf of each owner
or operator of a U.S.-flagged vessel, a CySO will take 2 hours each
year to develop and manage employee cybersecurity training, and vessel
employees will take 1 hour to complete the training each year. The
costs per employee associated with training vary depending on the types
and number of vessels and will be based on the average number of
employees per vessel and the associated weighted hourly wage. For
example, using the estimated CySO wage of $84.14 and the estimated OSV
employee wage of $54.92, we estimate annual training costs of
approximately $1,047 [($84.14 x 2 hours) + ($54.92x 16 average
employees per OSV x 1 hour)]. Development costs per entity of $168 can
be found in table 38 and variable per vessel participation costs can be
found in table 40.
For penetration testing, we estimate costs only in the second and
seventh years of analysis since tests are required to be performed in
conjunction with submitting and renewing the Cybersecurity Plan. We
assume that owners and operators of U.S.-flagged vessels will spend
approximately $10,000 per penetration test and an additional $100 per
IP address at the organization to capture network complexity. We use
the average number of employees per vessel multiplied by 2 as a proxy
for the number of IP addresses, based on suggestions from
[[Page 6395]]
public commenters stating that networks often include employees with
multiple devices, outside industrial personnel accessing the networks,
and OT systems that increase the number of IP addresses and network
complexity at a given company. As a result, we estimate second- and
seventh-year costs as follows: [10,000 testing cost + ($100 x average
number of employees per vessel)]. For example, we estimate second- and
seventh-year cost of approximately $13,200 for an owner or operator of
an OSV [$10,000 testing cost + ($100 x 32 average IP addresses per
OSV)]. Initial costs of $10,000 per entity can be found in table 38,
and variable per-vessel costs can be found in table 40.
For vulnerability management, we assume that each U.S.-flagged
vessel owner or operator will need to secure a vulnerability scanning
program or software. Because vulnerability scans can occur in the
background, we do not assume an additional hour burden associated with
the implementation or use of a vulnerability scanner each year. Using
the annual subscription cost of an industry leading vulnerability
scanning software, we estimate annual costs of approximately $3,390, as
seen in table 38.
Unquantifiable Cost Provisions or No-Cost Provisions of This Final Rule
Communications
Under Sec. 101.645, this final rule requires CySOs to have a
method to effectively notify owners and operators of U.S.-flagged
vessels, facilities, and OCS facilities, as well as personnel of
changes in cybersecurity conditions. The requirements will allow
effective and continuous communication between security personnel on
board U.S.-flagged vessels and at facilities and OCS facilities; U.S.-
flagged vessels interfacing with a facility or an OCS facility, the
cognizant COTP, and national and local authorities with security
responsibilities. Based on communication requirements established in 33
CFR 104.245 for vessels, 33 CFR 105.235 for facilities, and 33 CFR
106.240 for OCS facilities, the Coast Guard assumes that owners and
operators of U.S.-flagged vessels, facilities, and OCS facilities
already have communication channels established for physical security
notifications which can easily be used for cybersecurity notifications.
As a result, we do not estimate regulatory costs for communications.
The Coast Guard received no public comments on this assumption and
whether this communications provision will add an additional time
burden.
Device Security Measures
Under Sec. 101.650(b)(1), this final rule requires owners and
operators of U.S.-flagged vessels, facilities, and OCS facilities to
develop and maintain a list of company-approved hardware, firmware, and
software that may be installed on IT or OT systems. This approved list
will be documented in the Cybersecurity Plan. Because this requirement
is included in developing the Cybersecurity Plan, we estimated these
costs earlier in that section of the cost analysis.
Under Sec. 101.650(b)(2), this final rule requires owners and
operators of U.S.-flagged vessels, facilities, and OCS facilities to
ensure applications running executable code are disabled by default on
critical IT and OT systems. Based on information from CGCYBER, the time
it will take to disable such applications is likely minimal; however,
we currently lack data on how prevalent these applications are within
the affected population. Therefore, we are unable to estimate the
regulatory costs of this provision.
Under Sec. 101.650(b)(3) and (4), this final rule requires owners
and operators of U.S.-flagged vessels, facilities, and OCS facilities
to develop and maintain an accurate inventory of network-connected
systems, the network map, and OT device configuration. Because these
items will be developed and documented as a part of the Cybersecurity
Plan, we previously estimated these costs in that section of the cost
analysis. The Coast Guard received several public comments on the NPRM
related to its analysis of device security measures under this
provision, stating that the Coast Guard underestimated costs. However,
the Coast Guard received no additional information or cost-specific
data that would allow us to adjust our estimates. As such, we retain
our assumption that the 80 to 100 hours estimated for the overall
Cybersecurity Plan development and maintenance are sufficient to
capture the hour burdens associated with these device security measures
like developing a network map or system inventory in addition to
documenting policies and results related to measures like drills or
training. As a result, our cost estimates are unchanged.
Data Security Measures
Under Sec. 101.650(c), this final rule requires owners and
operators of U.S.-flagged vessels, facilities, and OCS facilities to
securely capture, store, and protect logs, as well as use encryption to
maintain confidentiality of sensitive data and integrity of IT and OT
traffic, when technically feasible. The Jones Walker survey (see
footnote number 60) reveals that 64 percent of facilities and OCS
facilities are currently performing active data logging and retention,
and 45 percent are always encrypting data for the purpose of
communication.
Because data logging can be achieved with default virus-scanning
tools, such as Windows Defender on Microsoft systems, the cost of
storage and protection of data logs is primarily a function of the data
space required to store them. Based on information from CGCYBER, cloud
storage can cost from $21 to $41 per month for 1 terabyte of data, $54
to $320 per month for 10 terabytes, and up to $402 to $3200 per month
for 100 terabytes of data. However, the Coast Guard does not have
information on the amount of data space the affected population will
need to comply with this final rule, or if data purchases will be
necessary in all cases. The Coast Guard requested public comment on
these estimates in order to update the analysis but received none.
Therefore, we are unable to estimate regulatory costs for this
provision.
Similarly, encryption is often available in default systems or in
publicly available algorithms.\125\ The Coast Guard will accept these
encryption standards that came with the software or on default systems.
However, there are potentially some IT and OT systems in use that do
not have native encryption capabilities. In these instances, encryption
will likely represent an additional cost. However, the Coast Guard does
not have information on the number of systems lacking encryption
capabilities. As a result, we are unable to estimate the regulatory
costs for encryption above and beyond what is included in default
systems. Instead, in accordance with OMB Circular A-4, we include the
storage and encryption of logs as source of uncertainty listed in table
42.
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\125\ For example, see the following web pages for descriptions
of default encryption policies on Google and Microsoft programs and
cloud-based storage systems: https://cloud.google.com/docs/security/encryption/default-encryption and https://learn.microsoft.com/en-us/microsoft-365/compliance/encryption?view=o365-worldwide, accessed
August 22, 2024.
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Routine System Maintenance
Under Sec. 101.650(e)(3)(i) and (vi), owners and operators are
required to patch KEVs in critical IT and OT systems (paragraph
(e)(3)(i)) and conduct vulnerability scans (paragraph (e)(3)(vi)). The
Coast Guard believes that these are processes that are typically
[[Page 6396]]
conducted in the background without much active work. However, we
acknowledge the potential for these requirements to take additional
time in certain circumstances, particularly when considering the
complexity of patching and monitoring critical OT systems. Patching for
IT systems can be set to automatically update and download without much
risk, and vulnerability scans are typically background processes that
need monitoring only in the event of an alert or incident. However,
patching and monitoring of OT systems may be more complicated to allow
for automatic updates and could even require periodically taking the
systems offline. The Coast Guard lacks data on how prevalent critical
OT systems are in the affected population, and how much time patching
and monitoring could take in these unique systems.
While we received a public comment suggesting that we
underestimated costs related to these provisions, we disagree with the
commenter's suggestion that the provisions would require hiring
additional employees, given our understanding of these processes as
primarily occurring in the background.\126\ As a result, without
additional data on costs related to OT systems, we are unable to
estimate costs for this provision, and instead include patching and
monitoring of critical OT systems as a source of uncertainty listed in
table 42.
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\126\ Leading cybersecurity and vulnerability management firms
like Qualys and Tenable produce vulnerability scanner technology
that operates continuously in the background. In addition, Microsoft
Defender (Microsoft's own vulnerability scanner for Windows, one of
the most popular operating systems) has built-in and agentless
scanners to continuously monitor and detect risk. See https://learn.microsoft.com/en-us/defender-vulnerability-management/defender-vulnerability-management for more details on how this
scanner works in practice, accessed October 11, 2024.
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Supply Chain Management
Under Sec. 101.650(f)(1) and (2), this final rule includes
provisions to specify measures for managing risks to the supply chain.
This will not create any additional hour burden, as owners and
operators will need to consider cybersecurity capabilities only when
selecting third-party vendors for IT and OT systems or services. In
addition, based on information from CGCYBER, most third-party providers
have existing cybersecurity capabilities and already have systems in
place to notify the owners and operators of U.S.-flagged vessels,
facilities, and OCS facilities of any cybersecurity vulnerabilities,
incidents, or breaches that take place. Therefore, the Coast Guard does
not estimate a cost for this provision.
Additionally, under Sec. 101.650(f)(3), this final rule requires
owners and operators of U.S.-flagged vessels, facilities, and OCS
facilities to monitor third-party remote connections and document how
and where a third party connects to their networks. Based on
information from CGCYBER, many IT and OT vendors provide systems with
the ability to remotely access the system to perform maintenance or
trouble-shoot problems as part of a warranty or service contract.
Because remote access is typically identified in warranties and service
contracts, the Coast Guard assumes that industry is already aware of
these types of connections and will need to document them only when
developing the Cybersecurity Plan. We estimated these costs previously
in the development of the Cybersecurity Plan section of this RA.
The Coast Guard requested public comment on the validity of this
assumption and received several public comments stating that we
underestimated costs, and that this requirement could require the
hiring an additional employee. The Coast Guard acknowledges that this
could take additional time, mostly through reviewing logs for remote
connections, but we disagree that this would require a full-time
employee, in most cases. The amount of time it takes is highly
dependent on the size of the organization and its risk appetite, making
accurate estimates difficult across organizations of various types and
sizes, especially for those with simple networks and limited remote
connections. As a result, we are unable to estimate costs for this
provision, and instead include monitoring remote third-party
connections as a source of uncertainty listed in table 42.
Resilience
Under Sec. 101.650(g), each CySO for a U.S.-flagged vessel,
facility, and OCS facility will be required to develop a Cyber Incident
Response Plan, validate the effectiveness of Cybersecurity Plans
through annual exercises or periodic reviews of incident response
cases, and perform backups of critical IT and OT systems. In addition,
entities not subject to 33 CFR 6.16-1 must report reportable cyber
incidents to the NRC without delay. Of these requirements, the costs
associated with developing a Cyber Incident Response Plan are already
captured in the overall costs to develop the Cybersecurity Plan. Any
subsequent annual maintenance for the Cyber Incident Response Plan will
be captured in the costs for annual maintenance of the Cybersecurity
Plan. In addition, costs associated with validating Cybersecurity Plans
through annual exercises or periodic reviews of incident response cases
is already captured in the costs estimated for drills and exercises in
Sec. 101.635.
For the population of entities not subject to 33 CFR 6.16-1 who
must report reportable cyber incidents to the NRC without delay, we
consider costs to be minimal, and do not include them in our total cost
estimates. We base this decision on the removal of NRC reporting
requirements for all U.S.-flagged vessels and facilities, as proposed
in the NPRM. Now that reporting requirements only apply to entities not
subject to 33 CFR 6.16-1, the only portion of the affected population
subject to the new reporting requirements are the 33 OCS facilities
affected by this final rule.
Based on historical cyber incident reporting data from 2018 to
2022, the NRC fielded and processed an average of 18 cyber incident
reports from facilities and OCS facilities and an average of 2 cyber
incident reports from U.S.-flagged vessels, for a total of 20 cyber
incident reports per year. However, OCS facilities only reported 1
cyber incident over that 5-year span. Although we anticipate that this
number can increase or decrease following the publication of a final
rule focused on cybersecurity standards and procedures, we use the
historical averages to estimate costs for the affected population.\127\
As a result, we estimate that OCS facilities only report 0.2 cyber
incidents per year, on average. Using the methodology established in
the NPRM, we assume that it will take 8.5 minutes (0.15 hours) of a
CySO's time to report a cyber incident to the NRC. We base this
estimated hour burden on the time to report suspicious maritime
activity to the NRC in currently approved ICR 1625-0096. This means
that for the affected OCS facilities, we estimate annual undiscounted
costs of $2.52 (0.2 cyber incident reports x 0.15 hours to report x
$84.14 CySO wage). Given this low annual estimated cost, the Coast
Guard does not include costs related to cyber incident reporting in its
estimate of costs related to the final rule.
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\127\ The Coast Guard believes that cyber incident reports can
increase following publication of this final rule due to greater
enforcement of reporting procedures and greater awareness
surrounding the need to report. However, the Coast Guard
acknowledges that cyber incident reports can also decrease because
greater prevention measures would be implemented because of this
final rule. As a result, we use historical cyber incident reporting
data to analyze costs moving forward.
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Further, the Coast Guard does not have data on the IT resources
that
[[Page 6397]]
owners and operators will need to back up data, either internally or
externally. Coast Guard SMEs indicate that most of the affected
population is likely already performing data backups.\128\ The time
burden of backing up data is minimal because backups can occur in the
background through automated processes, making any new costs a result
of making space for data storage. Providing external storage of data
will require cloud storage (that is, storage on an external server),
and the cost will be dependent upon the capacity needed; for example, 1
terabyte or 100 terabytes of space. These costs will likely be incurred
on a monthly basis, although we do not know how much additional data
space an owner or operator will need, if any. Coast Guard SMEs with CG-
CYBER indicate that the current market prices for cloud storage
subscriptions range from $21 to $41 per month for 1 terabyte of data,
$54 to $320 per month for 10 terabytes, and up to $402 to $3200 per
month for 100 terabytes of data. There may also be costs associated
with the encryption of data that we are not able to estimate in this
analysis. Instead, we consider these sources of uncertainty in table
42.
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\128\ For example, the Ports and Terminals Cybersecurity Survey
produced by Jones Walker referenced in footnote 60 asked facility
owners and operators if their backups were ``segmented offline,
cloud, redundant.'' Beyond this question appearing to assume that
owners and operators are already conducting backups, 83 percent of
respondents answered that their backups met the criteria, indicating
that most owners and operators are conducting backups in this
population.
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Network Segmentation
Under Sec. 101.650(h)(1) and (2), this final rule requires owners
and operators of U.S.-flagged vessels, facilities, and OCS facilities
to segment their IT and OT networks and log and monitor all connections
between them. Based on information from CGCYBER, CG-CVC, and NMSAC,
network segmentation can be particularly difficult in the MTS, largely
due to the age of infrastructure in the affected population of U.S.-
flagged vessels, facilities, and OCS facilities. The older the
infrastructure, the more challenging network segmentation may be. Given
the amount of diversity and our uncertainty regarding the state of
infrastructure across the various groups in our affected population, we
are not able to estimate the regulatory costs associated with this
provision. The Coast Guard requested public comment on the anticipated
costs of network segmentation within the affected population,
especially from those who have previously segmented networks at their
organizations. While we received several comments that stated we have
underestimated costs related to network segmentation, we received no
additional information that would have allowed us to adjust our
analysis. Instead, in accordance with OMB Circular A-4, we include the
storage and encryption of logs as source of uncertainty listed in table
42.
Physical Security
Under Sec. 101.650(i)(1) and (2), this final rule will require
owners and operators of U.S.-flagged vessels, facilities, and OCS
facilities to limit physical access to IT and OT equipment; secure,
monitor, and log all personnel access; and establish procedures for
granting access on a by-exception basis. The Coast Guard assumes that
owners and operators have already implemented physical access
limitations and systems, by which access can be granted on a by-
exception basis, based on requirements established in Sec. Sec.
104.265 and 104.270 for vessels, Sec. Sec. 105.255 and 105.260 for
facilities, and Sec. Sec. 106.260 and 106.265 for OCS facilities.
Therefore, we do not believe that this final rule will impose new
regulatory costs on owners and operators of U.S.-flagged vessels,
facilities, and OCS facilities for this provision. However, we
understand that Sec. 101.650(i)(2), which requires potential blocking,
disabling, or removing of unused physical access ports on IT and OT
infrastructure, may represent taking steps above and beyond what has
been expected under established requirements. The Coast Guard currently
lacks information on the prevalence of these physical access ports on
systems in use in the affected population and, therefore, cannot
currently calculate an associated cost. We requested but did not
receive public comments on the anticipated costs associated with
physical security provisions in this final rule above and beyond what
has already been incurred under existing regulation. As such, we retain
our assumption that this will not create additional costs, and leave
costs associated with blocking, disabling, or removing of unused
physical access ports on IT and OT infrastructure as a source of
uncertainty in the analysis.
Hazardous Conditions
In addition to the requirements outlined in 33 CFR part 101, the
Coast Guard is also amending the definition of a hazardous condition
found in 33 CFR 160.202 to include ``cyber incident.'' This change
impacts but does not create costs for the population of 11,222 U.S.-
flagged vessels and the population of 11,490 foreign-flagged vessels
that visit the U.S. each year on average.\129\ Before this final rule,
33 CFR 160.202 defined a hazardous condition as ``any condition that
may adversely affect the safety of any vessel, bridge, structure, or
shore area or the environmental quality of any port, harbor, or
navigable waterway of the United States. It may, but need not, involve
collision, allision, fire, explosion, grounding, leaking, damage,
injury or illness of a person aboard, or manning-shortage.'' The Coast
Guard already interpreted this as including cyber incidents given the
definition referring to ``any condition'' that ``may, but need not,
involve,'' a list of potential conditions. This was never meant to be
an exhaustive list, and, while the Coast Guard has previously
interpreted it as including cyber incidents, we are now adding ``cyber
incident'' to the list of example conditions to further clarify the
affected population's obligation to report in light of this final rule.
Accordingly, the Coast Guard does not estimate any costs related to
this change.
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\129\ MISLE data indicates that, on average, 11,490 distinct
foreign-flagged vessels entered the United States from 2021 through
2023 (11,346 in 2021, 11,717 in 2022, and 11,407 in 2023). Data was
retrieved June 11, 2024. See table 6 in the Affected Population
section of the analysis for more details on how the total of 11,222
U.S.-flagged vessels was calculated.
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Installation of Any New Software
Lastly, it is likely that this final rule will have unquantifiable
costs associated with the incompatibility between the installation of
the newer software and the use of older or legacy software systems on
board U.S.-flagged vessels, facilities, and OCS facilities. We did not
receive comments from the public on the anticipated costs associated
with this difference in software for the affected population of this
final rule, and instead include it as a source of uncertainty in table
42.
Sources of Uncertainty Related to Quantified Costs in the Rule
Given the large scope of this final rule, our analysis contains
several areas of uncertainty that can lead us to overestimate or
underestimate the quantified costs associated with certain provisions.
In table 42, we outline the various sources of uncertainty, the
expected impact on cost estimates due to the uncertainty, potential
cost ranges, and a ranking of the source of uncertainty based on how
much we believe it is impacting the accuracy of our estimates. A rank
of 1 indicates that we believe the source of uncertainty has the
potential to cause larger overestimates or underestimates than a
[[Page 6398]]
source of uncertainty ranked 2, and so on. The Coast Guard requested
public comments from members of the affected populations of U.S.-
flagged vessels, facilities, and OCS facilities who could provide
insight into the areas of uncertainty specified in table 42, especially
those relating to potential cost estimates, hour burdens, or current
baseline activities. While we received several comments regarding
underestimated costs, we did not receive information that allowed us to
update our cost estimates for our sources of uncertainty.
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The uncertainty surrounding these aspects of this analysis makes
estimating many costs challenging. The Coast Guard has considered
several
[[Page 6407]]
alternative scenarios to demonstrate how alternative assumptions may
affect the cost estimates presented in this analysis.
First, we consider an alternative assumption regarding the baseline
cybersecurity activities in the population of U.S.-flagged vessels,
which we determined may have the biggest impact on our cost estimates
for this final rule. Because the Coast Guard lacks data on current
cybersecurity activities in the population of U.S.-flagged vessels, we
assume that all owners and operators of U.S.-flagged vessels have no
baseline cybersecurity activity to avoid potentially underestimating
costs in the preceding cost analysis. However, we were able to use
existing survey data to estimate baseline cybersecurity activity in the
population of facilities and OCS facilities, which allowed us to more
accurately estimate the cost impacts of many of the provisions.
If we use the same rates of baseline activity we assume for
facilities and OCS facilities for the U.S.-flagged vessels as well, we
would see a reduction in undiscounted cost estimates related to account
security measures, multifactor authentication implementation and
management, cybersecurity training, and penetration testing. Like the
rates of baseline activity cited for the population of facilities and
OCS facilities, this alternative would assume that 87 percent of the
U.S.-flagged vessel population are managing account security, 83
percent have implemented multifactor authentication, 25 percent are
conducting cybersecurity training, and 68 percent are conducting
penetration tests.\130\ Using these assumptions would result in
estimated annual population costs of approximately $126,177 for account
security ($970,596 primary estimated cost x 0.13), $6,015,705 for
multifactor authentication implementation and maintenance ($35,386,500
primary estimated cost x 0.17), $5,155,361 for cybersecurity training
($6,873,814 primary estimate cost x 0.75), and $14,019,200 for
penetration testing ($43,810,000 primary estimated cost x 0.32). This
would result in reduced undiscounted annual cost estimates of
approximately $61,724,467 for the population of U.S.-flagged vessels.
See table 43.
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\130\ See footnote 60.
[GRAPHIC] [TIFF OMITTED] TR17JA25.058
The Coast Guard requested but did not receive public comments on
whether these assumptions of baseline activity are more reasonable than
what is currently used in this RA, or if there are additional
alternative assumptions about baseline activities in these areas or
other areas not discussed that would lead to more accurate estimates.
As such, we retained our assumption of no baseline activity in the
affected population of U.S.-flagged vessels.
In addition, we considered adding cost estimates for those areas of
uncertainty where we were able to estimate a range of potential costs.
For provisions in Sec. 101.650(c) and (g) related to storing logs and
performing data backups, we anticipate that this data storage will be
set up to occur in the background, meaning systems will not need to be
taken offline and no burden hours. However, this makes the associated
cost a function of the data space required to store and backup data.
While we do not have information on how much data space a given company
would need, we can estimate industry costs based on SME estimates for a
range of potential data space amounts. As described in table 42,
current market prices indicate that cloud-based storage can cost from
$21 to $41 per month for 1 terabyte of data, $54 to $320 per month for
10 terabytes, and up to $402 to $3200 per month for 100 terabytes of
data. To estimate the annual cost of 1 additional terabyte of data, we
take the average estimated monthly cost of $31 [($41 + $21) / 2] and
multiply it by 12 to find the average annual cost of $372 per terabyte.
If each facility and OCS facility company required an additional
terabyte of data space because of this final rule, we would estimate
approximately $510,384 ($372 x 1,372 facility owners and operators) in
additional undiscounted annual costs to industry. Similarly, if we
assumed each U.S.-flagged vessel company required an additional
terabyte of data space because of this final rule, we would estimate
approximately $771,900 ($372 x 2,075 vessel owners and operators) in
additional undiscounted annual costs to industry. See table 44.
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These costs can change if we were to add additional assumptions
about current baseline activities or adjusted the expected need for
data space. We requested public comment on the accuracy and inclusion
of these estimates but received none. As such, we were unable to add
these cost estimates to our overall cost estimates for the rule.
Government Costs
There are two primary drivers of Government costs associated with
this final rule. The first will be under Sec. 101.630(d), where owners
and operators of the affected population of U.S.-flagged vessels,
facilities, and OCS facilities will be required to submit a copy of
their Cybersecurity Plan for review and approval to either the
cognizant COTP or the OCMI for facilities or OCS facilities, or to the
MSC for U.S.-flagged vessels. In addition, Sec. 101.630(e) will
require owners and operators to submit Cybersecurity Plan amendments to
the Coast Guard, under certain conditions, for review and approval. The
second cost driver is related to the marginal increase in inspection
time because of added Cybersecurity Plan components that will be
reviewed as a part of an on-site inspection of U.S.-flagged vessels,
facilities, and OCS facilities. An additional potential cost driver
will be under Sec. 101.650(g)(1), where owners and operators of the
affected population of OCS facilities will be required to report cyber
incidents to the NRC. The NRC will then need to process the report and
generate notifications for each incident report they receive. However,
based on historic NRC data related to cybersecurity incidents in the
OCS facility population, we only estimate negligible costs related to
this provision. The Coast Guard examines these costs under the
assumption that we will use the existing frameworks in place to review
security plans and amendments, process incident reports, and conduct
inspections. Given uncertainty surrounding Coast Guard staffing needs
related to this final rule, we have not estimated costs associated with
new hires or the establishment of a centralized office.
First, we analyze the costs to the Government associated with
reviewing and approving Cybersecurity Plans and amendments. Based on
Coast Guard local facility inspector estimates, it will take Plan
reviewers about 40 hours to review an initial Cybersecurity Plan for a
facility or OCS facility, 8 hours to review a resubmission of a Plan in
the initial year, and 4 hours to review an amendment in years 3 through
6 and 8 through 10 of the analysis period. It will also take about 8
hours of review for the renewal of Plans in Year 7 of the analysis
period, and another 8 hours for any necessary resubmissions of Plan
renewals. The estimated hours to review initial, resubmitted, and
renewal Cybersecurity Plans and amendments include review and approval
of any requested waivers or equivalence determinations received from
the affected owners and operators. The hour-burden and frequency
estimates for resubmissions and amendments are consistent with
estimates for resubmissions of FSPs and OCS FSPs, as we expect the
Cybersecurity Plans and amendments to be of a similar size and scope.
As discussed earlier in the analysis, we estimate that resubmissions of
initial Cybersecurity Plans and Plan renewals occur at a rate of 10
percent in Years 2 and 7 of the analysis period. We use the number of
facilities and OCS facilities that will submit Plans, which will be
about 3,718 (33 of which are OCS facilities).
We determine the wage of a local facility inspector using publicly
available data found in Commandant Instruction 7310.1W.\131\ We use an
annual mean hourly wage rate of $89 for an inspector at the O-3
(Lieutenant) level, based on the occupational labor category used in
ICR 1625-0077.
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\131\ Readers can view Commandant Instruction 7310.1W for
military personnel at media.defense.gov/2022/Aug/24/2003063079/-1/-1/0/CI_7310_1W.PDF, accessed August 19, 2024.
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We estimate the undiscounted second-year (initial year of Plan
review) cost for the Coast Guard to review Cybersecurity Plans for
facilities and OCS facilities to be approximately $13,500,944 [(3,718
facility Plan initial submissions x $89.00 x 40 hours) + (372 facility
Plan resubmissions x $89.00 x 8 hours)]. Except in Year 7, when renewal
of all Plans will occur, we estimate the undiscounted annual cost to
the Coast Guard for the review of amendments to be approximately
$1,323,608 (3,718 amendments x $89.00 x 4 hours). In Year 7, we
estimate the undiscounted cost to be approximately $2,912,080 [(3,718
Plans for 5-year renewal x $89.00 x 8 hours) + (372 facility Plan
resubmissions x $89.00 x 8 hours)]. We estimate the discounted cost for
the Coast Guard to review U.S. facility and OCS facility Cybersecurity
Plans to be approximately $23,679,103 over a 10-year period of
analysis, using a 2-percent discount rate. We estimate the annualized
cost to be approximately $2,636,112, using a 2-percent discount rate.
See table 45.
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Based on Coast Guard MSC estimates, it will take about 28 hours to
review an initial U.S.-flagged vessel Cybersecurity Plan, 8 hours to
review a resubmission
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of the Cybersecurity Plan in the initial year, and 4 hours to review an
amendment in years 3 through 6 and 8 through 10 of the analysis period.
It will also take about 8 hours of review for the renewal of Plans, and
another 8 hours to review resubmitted Plan renewals in Year 7 of the
analysis period. The hour-burden and frequency estimates for
resubmissions and amendments are consistent with estimates for
resubmissions of VSPs, as we expect the Cybersecurity Plans and
amendments to be of a similar size and scope. We use the number of
U.S.-flagged vessel owners and operators who will submit Plans, about
2,075. As discussed earlier in the analysis, we estimate that
resubmissions of initial Cybersecurity Plans and Plan renewals occur at
a rate of 10 percent in Years 2 and 7 of the analysis period.
According to ICR 1625-0077, the collection of information related
to VSPs, FSPs, and OCS FSPs, the MSC uses contract labor to conduct
Plan and amendment reviews. The MSC provided us with its independent
Government cost estimate for their existing contract for VSP reviews.
The average loaded annual mean hourly wage rate for the various
contracted reviewers from the independent Government cost estimate is
$81.83.
We estimate the undiscounted second-year cost for the Coast Guard
to review Cybersecurity Plans for U.S.-flagged vessels to be
approximately $4,890,488 [(2,075 initial vessel Plan submissions x
$81.83 x 28 hours) + (208 vessel Plan resubmissions x $81.83 x 8
hours)]. Except in Year 7, when resubmission of all Plans will occur,
we estimate the undiscounted annual cost to the Coast Guard for
reviewing amendments to be approximately $679,189 (2,075 amendments x
$81.83 x 4 hours). In Year 7, we estimate the undiscounted cost to be
approximately $1,494,543 [(2,075 Plans for 5-year renewal x $81.83 x 8
hours) + (208 vessel Plan resubmissions x $81.83 x 8 hours)]. We
estimate the discounted cost for the Coast Guard to review U.S.-flagged
vessel Cybersecurity Plans to be approximately $10,192,585 over a 10-
year period of analysis, using a 2-percent discount rate. We estimate
the annualized cost to be approximately $1,134,705, using a 2-percent
discount rate. See table 46.
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The second source of Government costs is the marginal increase in
onsite inspection time due to the expansion of FSPs, OCS FSPs, and VSPs
to include
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the Cybersecurity Plans and provisions by this final rule. The
cybersecurity provisions will add to the expected onsite inspection
times for the populations of U.S.-flagged vessels, facilities, and OCS
facilities. Coast Guard SMEs within CG-FAC conferred with local
inspection offices to estimate the expected marginal increase in
facility and OCS facility inspection time. Local facility inspectors
estimate that the additional cybersecurity provisions from this final
rule will add an average of 1 hour to an onsite inspection, and that
the inspection will typically be performed by an inspector at a rank of
O-2 (Lieutenant Junior Grade). According to Commandant Instruction
7310.1W Reimbursable Standard Rates, an inspector with an O-2 rank has
a fully loaded wage rate of $72.\132\ Therefore, we estimate the annual
undiscounted Government cost associated with the expected marginal
increase in onsite inspections of facilities and OCS facilities is
$267,696 (3,718 facilities and OCS facilities x 1 hour inspection time
x $72 facility inspector wage). We estimate the total discounted cost
of increased inspection time to be approximately $2,404,602 over a 10-
year period of analysis, using a 2-percent discount rate. We estimate
the annualized cost to be approximately $267,696, using a 2-percent
discount rate. See table 47.
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\132\ Readers can view Commandant Instruction 7310.1W for
military personnel at media.defense.gov/2022/Aug/24/2003063079/-1/-1/0/CI_7310_1W.PDF, accessed August 19, 2024.
[GRAPHIC] [TIFF OMITTED] TR17JA25.062
Similarly, Coast Guard SMEs within CG-ENG and inspectors in Coast
Guard District 9 estimate that the additional cybersecurity provisions
from this final rule will add an average of 0.167 hours (10 minutes) to
an on-site inspection of a U.S.-flagged vessel and that the inspection
will also typically be performed by an inspector at a rank of O-2
(Lieutenant Junior Grade). According to Commandant Instruction 7310.1W
Reimbursable Standard Rates, an inspector with an O-2 rank has a fully
loaded wage rate of $72. Therefore, we estimate the annual undiscounted
Government cost associated with the expected marginal increase in
onsite inspections of U.S.-flagged vessels is $108,696 (11,222 vessels
x 0.167 hours inspection time x $72 vessel inspector wage). We estimate
the total discounted cost of increased inspection time to be
approximately $1,212,046 over a 10-year period of analysis, using a 2-
percent discount rate. We estimate the annualized cost to be
approximately $134,933, using a 2-percent discount rate. See table 48.
[[Page 6413]]
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The final potential source of Government costs from this final rule
is the time to process and generate notifications for each cyber
incident reported to the NRC. As discussed earlier in our analysis of
costs associated with cyber incident reporting, from 2018 to 2022, the
NRC fielded and processed an average of 0.2 cyber incident reports from
OCS facilities per year. Cyber incident reports for other U.S.-flagged
vessels and facilities are not included in this analysis because they
are already required under 33 CFR 6.16-1. In addition, the NRC
generated an average of 31 notifications for appropriate Federal,
State, local, and Tribal agencies per processed cyber incident over
that same time period. However, because the rate of reportable cyber
incidents in the population of OCS facilities is so low (only 0.2
reportable cyber incidents per year, on average), we estimate that any
associated costs would be negligible. Therefore, we do not include
cyber incident report processing costs in our estimated Government cost
totals.
We estimate the total discounted Government costs of this rule for
the review of Cybersecurity Plans and marginal increase in on-site
inspection time to be approximately $37,488,336 over a 10-year period
of analysis, using a 2-percent discount rate. We estimate the
annualized cost to be approximately $4,173,446, using a 2-percent
discount rate. See table 49.
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Total Costs of the Rule
We estimate the total discounted costs of this final rule to
industry and Government to be approximately $1,245,594,930 over a 10-
year period of analysis, using a 2-percent discount rate. We estimate
the annualized cost to be approximately $138,667,759, using a 2-percent
discount rate. See table 50.
[GRAPHIC] [TIFF OMITTED] TR17JA25.065
[[Page 6415]]
Benefits
While the Coast Guard is able to describe the qualitative benefits
that this final rule may have for owners and operators of U.S.-flagged
vessels, facilities, and OCS facilities, and others who would be
affected by a cyber-attack, the Coast Guard is not able to quantify and
monetize benefits. One reason is that it is challenging to project the
number of cyber-attacks that would occur over a relevant period without
this final rule; another reason is that it is challenging to quantify
the magnitude of the harm from such attacks. It is further challenging
to quantify the marginal impact of this final rule, both because the
Coast Guard cannot quantify the effectiveness of the included
provisions (how many attacks will be prevented or how much damage will
be mitigated) and because the Coast Guard has uncertainty around the
appropriate baseline to consider regarding what cybersecurity actions
are being taken for reasons beyond this rulemaking. Without such
projections and quantification, it is not possible to monetize the
benefits of the rule in terms of harms averted. We summarize public
comments that highlight benefits of the final rule, provide a
qualitative analysis of benefits, and analyze cyber incidents and risks
addressed by the final rule below.
Public Comments That Support the Final Rule or Address Benefits
We received several public comments for the support of specific
provisions of this final rule. For IT and OT systems, one commenter
supports the requirements to ``designate critical IT and OT systems''
and to keep an inventory of these systems given the importance of an
owner or operator knowing their own cybersecurity environment in order
to properly defend it. Another commenter agrees ``that network
segmentation is in fact an effective practice to help mitigate the
damage caused by an attack on an IT or OT network.'' A third commenter
``strongly supports'' the ``requirements to analyze networks to
identify IT and OT vulnerabilities, mitigate unresolved
vulnerabilities, conduct vulnerability scans, and conduct annual
penetration testing,'' because these provisions are key in ensuring
resilience and preventing cybersecurity incidents.
We also received several comments about the use of and lack of
reference to ASPs in the NPRM. Commenters recommended the Coast Guard
to include the Cybersecurity Plan in existing ASPs. One commenter
stated that submitting separate Cybersecurity Plans to the MSC for
vessels and the local COTP for facilities is ``resource-intensive,''
and that ``the ASP framework has proved to be effective in allowing
owners and operators to determine the best way to implement security
requirements across the domestic passenger vessel fleet.'' The same
commenter added, ``ASP should be added to applicable sections of the
proposed rule when referencing requirements for FSP, VSP, or OCS FSP.''
Another commenter suggested permitting a Cybersecurity Plan to be
included in an Alternative Security Program. This commenter stated that
``ASPs have been proven to be successful at both managing vessel and
facility security risks and reducing costs and administrative burdens
for vessel and facility operators, as well as the Coast Guard.''
Based on these comments, the Coast Guard revised Sec. 101.660 of
this final rule to explicitly allow owners and operators to use ASPs to
comply with this final rule. We added additional text in Sec. 101.660
to clarify that ASP provisions apply to cybersecurity compliance
documentation. Given the unique nature of cybersecurity threats,
vulnerabilities, and mitigation strategies, owners and operators must
ensure that use of ASPs includes those items specific to each U.S.-
flagged vessel, facility, and OCS facility. The Coast Guard will
evaluate each ASP's cybersecurity component to ensure full regulatory
compliance with each applicable requirement. These changes to this
final rule can create marginal cost reductions and will create marginal
benefits for owners and operators using ASPs because they are less
resource intensive, as argued by several commenters. These owners and
operators will not be required to submit separate Plans to the Coast
Guard, and they will be able to include a Cybersecurity Plan as part of
an approved ASP, which will allow owners and operators using ASPs to
reallocate resources to implement or improve other cybersecurity
measures.
We received numerous comments on the term ``reportable cyber
incident.'' As a result, and as we stated in our response to comments
in V. Discussion of Comments and Changes of this preamble, we included
the use and definition of the term in this final rule, which will
provide clear guidance on when and under what conditions cyber
incidents must be reported to the NRC. This clarity will help eliminate
the need to report minor cyber incidents, which will reduce the
administrative burden on owners and operators.
We also received several public comments on the frequency of
drills, with some requesting a general frequency reduction, others
requesting annual or semi-annual drill requirements, and others
requesting a schedule of requirements based on the cybersecurity risk
faced by the affected U.S.-flagged vessels and facilities. These
requests were made because commenters felt that the proposed quarterly
drill requirements were too burdensome. As a result, the Coast Guard
reduced the frequency of drills from quarterly to 2 drills in a
calendar year. This will have a marginal benefit for affected owners
and operators to use and direct resources to improve remaining drills
or implement other cybersecurity measures that can help reduce the risk
of a cyber incident in other ways.
---------------------------------------------------------------------------
\133\ See https://cybernews.com/security/crimeware-as-a-service-model-is-sweeping-over-the-cybercrime-world/ for a description of
cybercrime as a service and https://cybersecurityventures.com/cybercrime-damage-costs-10-trillion-by-2025/ for a description of
its growth in recent years, accessed July 15, 2024.
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Qualitative Analysis of Benefits
Malicious cyber actors, including individuals, groups, and nation
states, have rapidly increased in sophistication over the years and use
techniques that make them more and more difficult to detect. Recent
years have seen the rise of cybercrime as a service, where malicious
cyber actors are hired to conduct cyber-attacks.\133\ In a paper
published by Akpan, Bendiab, Shiaeles, Karamperidis, and Michaloliakos
(2022), the authors state that the maritime sector has shown a 900-
percent increase in cybersecurity
[[Page 6416]]
breaches as it enters the digital era.\134\ The paper adds that many
automated systems on vessels, by their nature, are vulnerable to a
cyber-attack, and include navigation systems such as Electronic Chart
Display and Information Systems, GPS, and Global Navigation Satellite
Systems. Other affected systems include radar systems; AIS;
communication systems; and systems that control the main engine,
generators, among others (Akpan et al., 2022).\135\ Furthermore, the
paper presents the vulnerabilities and consequences of cyber-attacks to
ships' systems ranging from hijacking ships, destroying and stealing
data, damaging equipment, disrupting vessel operations, uploading
malware to computer systems, losing lives and cargo, and more (Akpan et
al., 2022).\136\
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\134\ Frank Akpan, Gueltoum Bendiab, Stavros Shiaeles, Stavros
Karamperidis, and Michalis Michaloliakos; ``Cybersecurity Challenges
in the Maritime Sector''; Network; March 7, 2022; page 123; https://www.mdpi.com/2673-8732/2/1/9; accessed August 2024.
Multidisciplinary Digital Publishing Institute has open access to
journals and published papers. Additionally, NIST provides a
definition of the term breach, although not specifically related to
cybersecurity at, https://csrc.nist.gov/glossary/term/breach,
accessed July 2024.
\135\ Akpan et al., supra note 132, at 129-30.
\136\ Id.
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In a paper by Jones (2016), the author noted that outdated systems
are vulnerable to cyber-attacks. The paper refers to a study that
states 37 percent of servers running Microsoft failed to download the
correct patch and left systems vulnerable to a cyber-attack.
Additionally, Jones states that ``many ships were built before cyber
security was a major concern'' and goes on to state that many newer
software systems are not compatible with older software systems.\137\
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\137\ Kevin Jones, ``Threats and Impacts in Maritime Cyber
Security,'' April 15, 2016, pages 7 and 8, https://www.researchgate.net/publication/304263412_Threats_and_Impacts_in_Maritime_Cyber_Security, accessed
August 15, 2024.
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Akpan, et al. (2022) also list a few cyber-attacks that have
occurred in the maritime transportation sector in the past few years.
Allianz Global Corporate and Specialty (AGCS) reports that there was a
record 623 million ransomware attacks in 2021.\138\ In a paper
published by Meland, Bernsmed, Wille, Rodseth, and Nesheim (2021), the
authors state that 46 successful \139\ cyber-attacks with a significant
impact on the maritime industry have occurred worldwide between 2010
and 2020, or an average of 4.2 attacks a year.\140\ Some national
governments have also used ransomware to advance their strategic
interests, including evading sanctions.\141\ The increased growth of
cybercrime is a factor that has intensified in the last 20 years. Per
the FBI's cybercrime reporting unit, financial losses from reported
incidents of cybercrime exceeded $10.3 billion in 2022, and $35.9
billion from 2001 to 2022.\142\ While there are significant private
economic incentives for MTS participants to implement their own
cybersecurity measures, and survey results indicate that MTS
participants are more confident in their cybersecurity capabilities
than in years past, the same survey indicates that there are important
gaps in capabilities that leave the MTS exposed to risk.\143\ In its
2018 report, the CEA stated, ''[b]ecause no single private entity faces
the full costs of the adverse cyber events, the Government can step in
to achieve the optimal level of cybersecurity, either through direct
involvement or by incentivizing private firms to increase cyber
protection.'' \144\
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\138\ AGCS is a global insurance company. Readers can access
this report at https://www.agcs.allianz.com/news-and-insights/news/cyber-risk-trends-2022-press.html, accessed November 13, 2024. AGCS'
website is https://www.agcs.allianz.com.
\139\ The analysis did not include mere attempts to attack,
unsuccessful attacks, or attacks categorized as ``white hat''
attacks, which are attempts to infiltrate cybersecurity systems to
identify vulnerabilities in software, hardware, or networks.
Definition of ``white hat hacking'' at https://www.fortinet.com/resources/cyberglossary/whitehat-security, accessed July 20, 2024.
\140\ The title of this paper is ``A Retrospective Analysis of
Maritime Cyber Security Incidents.'' Readers can access this paper
at https://www.semanticscholar.org/paper/A-Retrospective-Analysis-of-Maritime-Cyber-Security-Meland-Bernsmed/6caba4635f991dd1d99ed98cf640812f8cae16ba (pages 519 and 523),
accessed November 13, 2024. Readers may need to create an account to
view this paper, other papers, and research literature. The paper is
also available at, https://www.transnav.eu. The authors of the study
noted that shipping is a very diverse sector and that their source
materials tend to focus on larger ships and operations. The authors
stated that it is highly unlikely that this study has captured all
the different cyber incidents over the sector. Additionally, the
authors did not define what a ``significant impact'' entails;
nevertheless, in some cyber-attacks they cited, they provided the
effect of an attack in their description of the incident.
\141\ Institute for Security and Technology, ``RTF Report:
Combating Ransomware: A Comprehensive Framework for Action: Key
Recommendations from the Ransomware Task Force,'' https://securityandtechnology.org/ransomwaretaskforce/report/, accessed July
15, 2024.
\142\ See the FBI's ``2022 Internet Crime Report,'' Internet
Crime Complaint Center (IC3), March 14, 2023. This report can be
found at https://www.ic3.gov/Media/PDF/AnnualReport/2022_IC3Report.pdf, accessed August 19, 2024. For a summary of
financial losses from reported incidents of cybercrime since 2001,
see https://www.statista.com/statistics/267132/total-damage-caused-by-by-cybercrime-in-the-us/, accessed August, 19, 2024.
\143\ Readers can access the survey in the docket or at https://www.joneswalker.com/en/insights/2022-Jones-Walker-LLP-Ports-and-Terminals-Cybersecurity-Survey-Report.html, accessed July 15, 2024.
See page 16 of the survey for data on industry confidence and pages
34-41 for data on cybersecurity practices.
\144\ Economic Report of the President supra note 2 at 369.
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The overall benefit of this final rule is the reduction in the
probability of a cyber incident and, if an incident occurs, improvement
in the mitigation of its impacts. This benefits owners and operators
and help protect the maritime industry and the United States. We expect
this final rule to have significant but currently unquantifiable
benefits for the owners and operators of U.S.-flagged vessels,
facilities, and OCS facilities, as well as downstream economic
participants \145\ and the public at large. This final rule benefits
owners and operators of U.S.-flagged vessels, facilities, and OCS
facilities by having a means, through the Cybersecurity Plan, to ensure
that all cybersecurity measures are in place and tested periodically,
which improves the resiliency of owners and operators to respond to a
cyber incident and to maintain a current cybersecurity posture,
reducing the risk of economic losses for owners and operators as well
as downstream economic participants. For example, this final rule
requires training, drills, and exercises, which benefits owners and
operators by having a workforce that is knowledgeable and trained in
most aspects of cybersecurity, which reduces the risk of a cyber
incident and mitigates the impact if an incident occurs. Conducting
training, drills, and exercises also enables the owners and operators
of U.S.-flagged vessels, facilities, and OCS facilities to prevent,
detect, and respond to a cyber incident with improved capabilities.
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\145\ Downstream economic participants are entities or
individuals involved in the later stages of the supply chain or
production process, such as distributors, wholesalers, service
providers, and retailers that supply and sell products directly to
consumers.
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In addition, cybersecurity measures in this final rule require
owners and operators of U.S.-flagged vessels, facilities, and OCS
facilities to identify weaknesses or vulnerabilities in their IT and OT
systems and to develop strategies or safeguards to identify and detect
security breaches when they occur. The software and physical
requirements of this final rule ensure the minimal level of protection
for critical IT and OT systems and allow for the proper monitoring of
these systems. In table 51, we list the expected benefits associated
with each major regulatory provision of this final rule.
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Cyber Incidents and Risks Addressed by the Final Rule
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\146\ Economic Report of the President supra note 2 at 370.
\147\ Economic Report of the President supra note 2 at 370 and
327.
\148\ Economic Report of the President supra note 2 at 362.
\149\ Economic Report of the President supra note 2 at 382-383.
\150\ Economic Report of the President supra note 2 at 342.
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In May 2021, a major pipeline company suffered a cyber-attack that
disrupted the supply of fuel to the east coast of the United States.
The company was forced to shut down operations for 6 days, which
created gasoline and fuel shortages. In addition to the direct
financial losses incurred by the company, the shutdown and subsequent
shortages negatively impacted consumers, creating a 4 cents-per-gallon
increase in average gasoline prices in the impacted areas, with price
increases lingering even after the pipeline returned to operation.\151\
Further, fuel shortages caused some fuel stations to temporarily close
due to shortened supply. Some airlines in the impacted area were forced
to scramble for additional fuel sources and added stops along select
long-haul flights.\152\ This was a ransomware cyber-attack that, based
on public reports, was a result of the attackers using a legacy Virtual
Private Network and the pipeline company not having a two-factor
authentication method, more commonly known as multifactor
authentication, in place on its computer systems.\153\ Therefore, it
was possible for computer hackers to access the pipeline company's
computer systems with only a password.
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\151\ Tsvetanov, T., & Slaria, S. (2021). The effect of the
colonial pipeline shutdown on gasoline prices. Economics Letters,
209. https://doi.org/10.1016/j.econlet.2021.110122, accessed August
15, 2024.
\152\ Josephs, L. (2021). Pipeline outage forces American
Airlines to add stops to some long-haul flights, Southwest flies in
Fuel. CNBC. https://www.cnbc.com/2021/05/10/colonial-pipeline-shutdown-forces-airlines-to-consider-other-ways-to-get-fuel.html,
accessed August 15, 2024.
\153\ U.S. Senate, Joseph Blount, Jr. Committee on Homeland
Security & Governmental Affairs. ``Hearing Before the United States
Senate Committee on Homeland Security and Governmental Affairs--
Threats to Critical Infrastructure: Examining the Colonial Pipeline
Cyber Attack.'' June 8, 2021. Washington, DC and via video
conference. Text can be downloaded at https://www.hsgac.senate.gov/hearings/threats-to-critical-infrastructure-examining-the-colonial-pipeline-cyber-attack/, accessed August 15, 2024.
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This final rule can prevent an attack similar to the pipeline
company attack from occurring by requiring owners and operators of
vessels, facilities, and OCS facilities to implement account security
measures and multifactor authentication on their computer systems. An
example of multifactor authentication would be requiring a five- or
six-digit passcode after a password has been entered by company
personnel. Multifactor authentication is part of account security
measures in Sec. 101.650.
The encryption of data in Sec. 101.650 under data security
measures may have also relegated stolen data to being useless in the
event of a cyber-attack. Furthermore, the pipeline company would likely
have benefitted from a penetration test, which they had not conducted,
to ensure the safety and security of its critical systems. The
requirement of a penetration test simulates real-world cyber-attacks
that helps companies identify the risks to their computer systems and
prepare the necessary measures to lessen the severity of a cyber-
attack.
Additionally, under Sec. 101.650 for device security measures,
documenting and identifying the network map and OT device configuration
information, the pipeline company may have been able to detect exactly
where the connections to the affected systems were and may have been
able to isolate the problem without having to shut down all pipeline
operations, as it did temporarily, which greatly affected its fuel
supply operations.
Lastly, the pipeline company did not have a Cybersecurity Plan in
place but did have an emergency response plan. With Sec. 101.630,
Cybersecurity Plan, and Sec. 101.635, Drills and Exercises, a
Cybersecurity Plan could have benefitted the company because it
includes periodic training and exercises that increase the awareness of
potential cyber threats and vulnerabilities throughout the
organization. A Cybersecurity Plan also creates best practices so
company personnel have the knowledge and skills to identify, mitigate,
and respond to cyber threats when they occur. Creating the
Cybersecurity Plan will allow the CySO to ensure all aspects of the
Plan have been implemented at a CySO's respective company. Improved
awareness of potential cybersecurity vulnerabilities and the steps
taken to correct them could have helped the pipeline company identify
the issue of a weak password before it was exploited.
In another cyber-attack that occurred in 2017 against a major
global shipping company, computer hackers, based on public reports,
exploited the company's computer systems because of vulnerabilities in
Microsoft's Windows operating system. The malware was disguised as
ransomware, which created
[[Page 6424]]
more damage to the company's computer systems. In 2016, one year before
the attack, IT professionals at the shipping company highlighted
imperfect patching policies, outdated operating systems, and a lack of
network segmentation as the largest holes in the company's
cybersecurity. While there were plans to implement measures to address
these concerns, they were not undertaken, leaving the company exposed
and underprepared for the attack it faced in 2017.
The effects of this attack were far-reaching. Beyond the direct
financial losses incurred by the company (estimated at nearly $300
million), shipping delays and supply chain disruptions caused
additional downstream economic losses that are much more difficult to
quantify as shipments went unfulfilled for businesses and consumers,
and trucks were forced to sit and wait at ports.\154\ Under Sec.
101.650, cybersecurity measures such as patching would likely prevent a
similar attack from occurring and help prevent such losses. Patching
U.S.-flagged vessel, facility, and OCS facility computer systems
ensures they are not vulnerable to a cyber-attack because the latest
software updates will be installed on these systems with periodic
software patches.
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\154\ Andy Greenberg, ``The Untold Story of NotPetya, the Most
Devastating Cyberattack in History,'' WIRED, August 22, 2018;
https://www.wired.com/story/notpetya-cyberattack-ukraine-russia-code-crashed-the-world/, accessed August 15, 2024.
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Additionally, penetration testing may have identified the
vulnerabilities in the shipping company's computer systems. Regular
cybersecurity drills and exercises may have enabled the company's
employees to quickly identify the cyber threat and may have reduced the
impact and longevity of the cyber-attack. Further, network segmentation
as in Sec. 101.650(h) could have helped stop the spread of malware to
all its computer systems, which ultimately crippled its operations. By
separating networks, the shipping company could have better isolated
the attack and kept larger portions of its business open, meaning fewer
financial losses and downstream economic impacts to other companies and
consumers.
Resilience played a significant role in the company's ability to
recover from the cyber-attack quickly. Company personnel worked
constantly to recover the affected data and eventually restored the
data after 2 weeks.\155\ In this final rule, Sec. 101.650 contains
provisions for resilience, which owners and operators of companies such
as this must possess to recover from a cyber-attack. With proper
backups of critical IT and OT systems, this company may have been able
to recover more quickly from the attack.
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\155\ News reports suggest this recovery time was luck and not
due to existing cybersecurity practices. ``Maersk staffers finally
found one pristine backup in their Ghana office. By a stroke of
luck, a blackout had knocked the server offline before the NotPetya
attack, disconnecting it from the network. It contained a single
clean copy of the company's domain controller data, and its
discovery was a source of great relief to the recovery team.'' See
Daniel E. Capano, ``Throwback Attack: How NotPetya Ransomware Took
Down Maersk,'' September 30, 2021, https://www.industrialcybersecuritypulse.com/threats-vulnerabilities/throwback-attack-how-notpetya-accidentally-took-down-global-shipping-giant-maersk/, accessed August 15, 2024.
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The Coast Guard emphasizes that this final rule might also have
quantifiable benefits from reducing or preventing lost productivity
from a cyber incident and possibly lost revenues from the time that
critical IT and OT systems are inoperable as a result of a cyber
incident, if one occurs. Such benefits accrue to owners and operators
of vessels and facilities, as well as to downstream participants in
related commerce and to the public at large. For instance, short-term
disruptions to the MTS can result in increases to commodity prices,
while prolonged disruptions can lead to widespread supply chain
shortages. Short- and long-term disruptions and delays may affect other
domestic critical infrastructure and industries, such as our national
defense system, that depend on materials transported via the MTS.
The societal impacts from a cybersecurity incident such as the
attack that occurred against the global shipping company are difficult
to quantify. They may include the effects of delays in cargo being
delivered, which can result in the loss of some or all the cargo,
especially if the cargo is comprised of perishable items such as food
or raw goods; for example, certain types of oil that would be used
later in the supply chain to manufacture final goods for consumption.
Delays themselves may result in the unfulfillment of shipping orders to
customers as vessels wait offshore to enter a port. This can create
downstream effects for customers who would not receive goods because
delivery trucks would sit idle at ports until OT and IT systems, either
at the port or on board vessels, become operational again after the
attack. Other societal impacts can include, but are not limited to,
delays in shipments of medical supplies that may be carried on board
vessels that would not be delivered on time to individuals and medical
institutions relying on these supplies for their healthcare needs and
service. Therefore, it should be noted that a cyber-attack may have
considerable economic impacts on multiple industries in the United
States such as, but not limited to, healthcare, food, transportation,
utilities, defense, and retail. It should also be noted that the Coast
Guard is not able to estimate, quantify, or predict the societal harm
of shipping delays from a cyber-attack on the MTS or the economic
impact it can cause because it would be dependent on many variables
such as the type of attack, the severity of the attack, the length of
the attack, the response by the affected parties to the attack, and so
on.
The benefits of this final rule can be particularly salient in the
case of a coordinated attack by a malicious actor seeking to disrupt
critical infrastructure for broader purposes. For instance, in a
circumstance where this final rule's provisions prevented a terrorist
or nation-state actor \156\ from using a cyber-attack in connection
with a broader scheme that threatened human life, a strategic waterway,
or a major port, the avoided economic and social costs may be
substantial.
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\156\ For instance, the Office of the Director of National
Intelligence recently reported on the cyber espionage and attack
threats from multiple nation-states with respect to U.S. critical
infrastructure. See Office of the Director of National Intelligence,
Annual Threat Assessment of the U.S. Intelligence Community at 10,
15, 19 (Feb. 6, 2023), available at https://www.dni.gov/files/ODNI/documents/assessments/ATA-2023-Unclassified-Report.pdf (last visited
August 15, 2024) (describing cyber threats associated with China,
Russia, and Iran). A recent multi-national cybersecurity advisory
noted that ``Russian state-sponsored cyber actors have demonstrated
capabilities to compromise IT networks; develop mechanisms to
maintain long-term, persistent access to IT networks; exfiltrate
sensitive data from IT and [OT] networks; and disrupt critical [ICS/
OT] functions by deploying destructive malware.'' See Joint
Cybersecurity Advisory, Russian State Sponsored and Criminal Cyber
Threat to Critical Infrastructure, Alert AA22-110A (May 9, 2022),
available at: https://www.cisa.gov/uscert/ncas/alerts/aa22-110a,
accessed August 15, 2024.
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With respect to the latter, as noted by Cass R. Sunstein in Laws of
Fear: Beyond the Precautionary Principle (The Seeley Lectures, Series
Number 6), ``fear is a real social cost, and it is likely to lead to
other social costs.'' \157\ In addition, Ackerman and Heinzerling state
``terrorism `works' through the fear and demoralization caused by
uncontrollable uncertainty.'' \158\ As devastating as the direct
impacts of a successful cyber-attack can be on the
[[Page 6425]]
U.S. MTS and supply chain, avoiding the impacts of the more difficult
to measure indirect effects of fear and demoralization in connection
with a coordinated attack would also entail substantial benefits.
However, the Coast Guard is not able to quantify these potential
benefits because they would depend on the incident, the duration of the
incident, and how various private and public actors would respond to
the incident.
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\157\ Cass R. Sunstein, Laws of Fear, at 127; Cambridge
University Press (2005).
\158\ Frank Ackerman and Lisa Heinzerling, ``Priceless: On
Knowing the Price of Everything and the Value of Nothing,'' 136-137
(2004).
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Through the provisions of this final rule, benefits from
implementing and enhancing a cybersecurity program may likely increase
over time. By requiring that a range of cybersecurity measures be
implemented, such as account security measures, vulnerability scanning,
and automated backups, an organization can drastically reduce the
downtime it takes to remedy a breach. Education and training can also
help guide employees to identify potential email phishing scams,
suspect links, and other criminal efforts, which will likely increase
protection against external and internal threats before they occur.
Further, because so many of the provisions include periodic updates and
modifications following tests or assessments, we believe that
cybersecurity programs will continue to improve each time they are
tested and reexamined by the implementing entity.
This final rule addresses the challenges facing businesses today by
requiring the implementation of safeguards to cybersecurity on the MTS.
In adopting these measures, owners and operators of U.S.-flagged
vessels, facilities, and OCS facilities can take preemptive action
before malicious actors and the threats they pose take advantage of
vulnerabilities in their critical IT and OT systems.
Analysis of Alternatives
The Coast Guard received multiple public comments regarding the
penetration testing requirements that were the primary focus of our
alternatives analysis in the NPRM. While we did receive a comment in
support of the penetration testing requirement, many of the relevant
comments highlighted concerns. Several commenters noted that
penetration tests are expensive, and that the Coast Guard
underestimated costs associated with the requirement. Further, some
commenters stated that penetration tests would be ineffective at the
frequency required in this final rule. In response, the Coast Guard
revised our cost estimates to better reflect industry averages and
continued to consider alternative frequencies of penetration testing in
our analysis of alternatives. Despite the increased cost estimates, we
ultimately decided to retain the proposed frequency of penetration
testing, as analyzed below.
Cybersecurity has become a critical issue across all sectors. The
maritime industry, a pivotal component of the global supply chain, is
no exception. With an increasing amount of sensitive data being stored
and processed online, regulations are needed to protect this data from
unauthorized access and breaches. As cyber threats grow more
sophisticated and pervasive, it has become increasingly apparent that
clear and actionable cybersecurity regulations are needed for the
maritime industry. Furthermore, cybersecurity is not just a matter of
individual or business concerns, it is also a national security issue.
Robust regulations help protect critical infrastructure and Government
services from cyber-attacks that can threaten national stability. For
instance, unauthorized access to a vessel's navigation system can lead
to disastrous consequences, including collisions or groundings, which
can put people at risk and lead to economic losses for the affected
entities and the U.S. economy. To prevent incidents like this, the
Coast Guard has included several regulatory provisions in this final
rule that identify potential network and system vulnerabilities. Of
these provisions, penetration testing is one of the more intensive and
costly, but provides important benefits, including demonstrating where
and how malicious actors can exploit system weaknesses, so that
organizations can better prioritize cybersecurity upgrades and
improvements based on risk.
Given the relatively high costs associated with penetration
testing, and the significant vulnerability risks associated with not
performing these tests, the Coast Guard contemplated four alternatives:
(1) maintain the status quo; (2) require annual penetration testing and
submission of results to the Coast Guard; (3) allow penetration testing
at the discretion of the owner or operator; or (4) require penetration
testing every 5 years in conjunction with the submission and approval
of Cybersecurity Plans (the preferred alternative).
(1) Status quo
Currently, the Coast Guard does not require owners and operators of
U.S.-flagged vessels, facilities, and OCS facilities to conduct
penetration tests as a part of their security plans. Despite this,
survey data indicates that some MTS entities are already conducting
penetration tests for their organizations as they face an evolving
cyber threat landscape. While we expect the adoption of penetration
testing policies to grow over time, 32 percent of owners and operators
of facilities and OCS facilities (see footnote number 60) and an
unknown number of owners and operators of U.S.-flagged vessels have yet
to add this test to their suite of cybersecurity measures.
Maintaining the status quo by not requiring any penetration testing
would reduce the costs for affected owners and operators of this final
rule by $100,190,445, with an annualized cost reduction of $11,153,854
over a 10-year period of analysis, discounted at 2 percent, when
compared to the preferred alternative. However, not requiring
penetration testing would leave a significant gap in vulnerability
detection capabilities of a large portion of the MTS, exposing MTS
stakeholders and the wider U.S. economy to greater risk. Without
periodic penetration tests to determine weaknesses in critical IT and
OT systems, the affected population puts itself at greater risk of
cyber incidents, which can endanger employees, consumers, and the
supply chain. As a result, the Coast Guard rejected the status quo
alternative and chose to require penetration tests every 5 years,
aligned with the renewal of a Cybersecurity Plan, as discussed in
alternative (4), below.
(2) Annual Penetration Testing
Penetration testing represents a crucial element of a comprehensive
cybersecurity strategy. It involves proactively testing computer
systems, networks, and software applications to identify
vulnerabilities that might be exploited by attackers. Because
penetration testing provides a much more in-depth review of the
vulnerabilities and weaknesses of IT and OT systems, the Coast Guard
considered an alternative that would require it on an annual basis.
Through annual penetration testing, an organization would be better
equipped to identify weaknesses within their systems and prepare for
real cyber threats. However, the costs and resources needed for
penetration testing can be significant. As such, annual testing might
impose an undue burden on the affected organizations.
Based on Coast Guard estimates, penetration testing costs
approximately $10,000 per test, plus an additional $100 per IP address
at the organization to capture network complexity. By increasing the
frequency of these tests, the costs to U.S.-flagged vessels,
facilities, and OCS facilities would increase significantly. Under the
preferred alternative, which requires
[[Page 6426]]
penetration testing every 5 years in conjunction with the submission
and renewal of a Cybersecurity Plan, the Coast Guard estimates total
costs of penetration testing to industry of $100,190,445 and annualized
costs of $11,153,854 over a 10-year period of analysis, discounted at 2
percent (see the Penetration Testing section of the RA for more details
on the calculations underlying this estimate). Requiring annual
penetration testing would increase industry costs for penetration
testing by just under 400 percent, to approximately $491,322,248 total
and $54,697,200 annualized over a 10-year period of analysis,
discounted at 2 percent. This alternative would result in a 31.4-
percent increase in the total cost of this final rule, bringing the
total cost to industry and the Government to approximately
$1,636,726,735 total and $182,211,104, annualized, over a 10-year
period of analysis, discounted at 2 percent. The Coast Guard believes
these increased costs are prohibitive and ultimately decided to reject
this alternative. See table 52 for the costs associated with annual
penetration testing over a 10-year period of analysis.
[GRAPHIC] [TIFF OMITTED] TR17JA25.073
(3) Penetration Testing at the Discretion of an Owner or Operator
Given the cost of penetration testing, particularly for small
businesses with limited resources, the Coast Guard considered an
alternative that would make penetration an optional provision. This
would allow those in the affected population to choose to prioritize
different cybersecurity measures. The decision to undertake penetration
testing could be made as a result of thorough risk assessments for each
organization, considering its operational environments, risk profile,
and pertinent threats.
Under this alternative, an owner or operator, or a CySO, on their
behalf, could determine when a penetration test is warranted, if at
all. Because the testing would be optional, we assume that fewer owners
and operators would conduct penetration testing in a given year;
however, we have no way of knowing how many this would be. If none of
the affected owners or operators elected to conduct penetration
testing, this can hypothetically reduce costs for owners and operators
for penetration testing down to zero, meaning a cost reduction of
$100,190,445 and an annualized cost reduction of $11,153,854 over a 10-
year period of analysis, discounted at 2 percent when compared to the
preferred alternative.
However, the value of penetration testing for most organizations
cannot be overstated. When integrated into a comprehensive
cybersecurity strategy, penetration testing can be very effective in
identifying vulnerabilities. By fostering a proactive rather than
reactive approach in cybersecurity, penetration testing enables
organizations to stay ahead of potential threats and better understand
how malicious actors can exploit weaknesses in IT and OT systems. This
is particularly crucial given the quickly evolving landscape of cyber
threats. In addition, because the costs of a potential cyber incident
can be high, with potential downstream economic impacts, the Coast
Guard must prioritize some level of oversight on provisions that can
lessen the risk of a cyber incident. Therefore, we rejected this
alternative, despite the potential cost savings. It should be noted,
however, that according to Sec. 101.665, owners and operators of U.S.-
flagged vessels, facilities, and OCS facilities can seek a waiver or an
equivalence determination, penetration testing included.
(4) Penetration Testing in Conjunction With Cybersecurity Plan
Submission (Preferred Alternative)
In an effort to best balance the cost of annual penetration testing
with the risk of leaving the MTS vulnerable to cyber incidents with
even more costly impacts, the Coast Guard considered (and ultimately
chose) requiring penetration tests every 5 years, aligned with the
renewal of a Cybersecurity Plan. This is the preferred alternative
because penetration testing would
[[Page 6427]]
supplement other cybersecurity measures in the regulations such as
vulnerability scanning, annual Cybersecurity Assessments and audits,
quarterly drills, and annual exercises, which may limit the necessity
of annual penetration testing. However, making penetration testing an
optional requirement for organizations can inadvertently leave them
more exposed to cyber-attacks and limit the Coast Guard's understanding
of the MTS' cybersecurity readiness. Under the preferred alternative,
owners and operators are still free to conduct more frequent tests at
their discretion if they would like to increase their awareness of
vulnerabilities. Alternatively, they can apply for waivers or
equivalence determinations if they feel like they cannot meet the
requirements related to penetration testing or find them unnecessary.
According to Sec. 101.665, an owner or operator, after completing the
required Cybersecurity Assessment, may seek a waiver or an equivalence
determination for any requirements in subpart F consistent with
parallel waiver and equivalence provisions in 33 CFR parts 104, 105,
and 106. If an owner or operator must temporarily deviate from the
requirements, they must notify the cognizant COTP for facilities or OCS
facilities, or the MSC for U.S.-flagged vessels, and may request
temporary permission to continue to operate.
B. Small Entities
Under the Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, we
have considered the impact of this final rule on small entities. The
term ``small entities'' comprises small businesses, not-for-profit
organizations that are independently owned and operated and are not
dominant in their fields, and governmental jurisdictions with
populations of less than 50,000. The U.S. Small Business Administration
(SBA) provides guidelines on the analytical process to assess the
impact of a particular rulemaking on small entities.\159\ With its
proposed rule, the Coast Guard prepared and published an Initial
Regulatory Flexibility Analysis (IRFA) because a threshold analysis
indicated that the proposed rule may have a significant impact on a
substantial number of small entities. After reviewing public comments,
the Coast Guard's conclusion has not changed; it cannot certify the
rule pursuant to the RFA. As a result, it is required to prepare a FRFA
for publication with the final rule. A FRFA discussing the impact of
this rule on small entities follows.
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\159\ U.S. Small Business Administration (SBA). 2017. A Guide
for Government Agencies: How to Comply with the Regulatory
Flexibility Act. https://advocacy.sba.gov/wp-content/uploads/2019/07/How-to-Comply-with-the-RFA-WEB.pdf, accessed November 1, 2024.
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A FRFA addresses the following:
(1) A statement of the need for, and objectives of, the rule.
(2) A statement of the significant issues raised by public comments
in response to the IRFA, a statement of the assessment of the agency of
such issues, and a statement of any changes made in the proposed rule
as a result of such comments.
(3) The response of the agency to any comments filed by the Chief
Counsel for Advocacy of the Small Business Administration in response
to the proposed rule, and a detailed statement of any change made to
the proposed rule in the final rule as a result of the comments.
(4) A description of and an estimate of the number of small
entities to which the rule will apply or an explanation of why no such
estimate is available.
(5) A description of the projected reporting, recordkeeping, and
other compliance requirements of the rule, including an estimate of the
classes of small entities which will be subject to the requirement and
the type of professional skills necessary for preparation of the report
or record.
(6) A description of the steps the agency has taken to minimize the
significant economic impact on small entities consistent with the
stated objectives of applicable statutes, including a statement of the
factual, policy, and legal reasons for selecting the alternative
adopted in the final rule and why each of the other significant
alternatives to the rule considered by the agency which affect the
impact on small entities was rejected.
1. A statement of the need for, and objective of, the rule.
The maritime industry is undergoing a significant transformation
that involves the increased use of cyber-connected systems. While these
increasingly interconnected and networked systems improve commercial
vessel and port facility operations, they also bring a new set of
challenges affecting design, operations, safety, security, training,
and the workforce.
Every day, malicious actors (including, but not limited to,
individuals, groups, and adversary nations posing a threat) attempt
unauthorized access to control system devices or networks using various
communication channels. Cybersecurity threats require the maritime
community to effectively manage constantly changing risks to create a
safe cyber environment. Vulnerabilities in the operation of vital
systems increase the risk of cyber-attacks. Unmitigated cyber-related
risks to the maritime domain can compromise the critical infrastructure
that people and companies depend on to fulfill their daily needs and
that maintain the effective operation of the MTS.
A 2018 report by the CEA stated that ``[a] firm with weak
cybersecurity imposes negative externalities on its customers,
employees, and other firms, tied to it through partnerships and supply
chain relations. In the presence of externalities, firms would
rationally underinvest in cybersecurity relative to the socially
optimal level. Therefore, it often falls to regulators to devise a
series of penalties and incentives to increase the level of investment
to the desired level.'' In the report, the CEA also emphasized the
following:
``[c]ontinued cooperation between the public and private sectors is
the key to effectively managing cybersecurity risks. . . . The
government is likewise important in incentivizing cyber protection--for
example, by disseminating new cybersecurity standards, sharing best
practices, conducting basic research on cybersecurity, protecting
critical infrastructures, preparing future employees for the
cybersecurity workforce, and enforcing the rule of law in cyberspace.''
\160\
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\160\ Economic Report of the President supra note 2 at 324-25.
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The objective of this final rule is to respond to the growing need
for cybersecurity regulation in the MTS by establishing minimum
performance-based cybersecurity requirements for U.S.-flagged vessels,
facilities, and OCS facilities subject to MTSA. The requirements
include account security measures, device security measures, data
security measures, governance and training, risk management, supply
chain management, resilience, network segmentation, reporting, and
physical security.
2. A statement of the significant issues raised by public comments
in response to the IRFA, a statement of the assessment of the agency of
such issues, and a statement of any changes made in the proposed rule
as a result of such comments.
The Coast Guard did not receive any public comments specifically
addressing the IRFA. However, it received several comments addressing
costs experienced by regulated owners and operators of facilities and
vessels, which affect estimates of per-entity costs, including the
following:
[[Page 6428]]
Commenters stated that the cost estimates for penetration
testing in the NPRM were underestimated. In response to these comments,
the Coast Guard adjusted its penetration testing cost estimates based
on information provided by Coast Guard SMEs. The Coast Guard doubled
the estimate of the initial penetration testing cost from $5,000 in the
NPRM to $10,000 for the final rule, the cost per IP address from $50 in
the NPRM to $100 for the final rule. In addition, the number of IP
addresses per organization, which is now based on the number of
employees in an organization, multiplied by 2.
Commenters raised concerns about the feasibility of
combining cybersecurity and physical security drills and exercises and
stated that we underestimated costs. In its cost analysis, the Coast
Guard now assumes that that no owners or operators will combine their
cybersecurity drills with existing drills, and that all employees at
the organization will participate in the new drills. Based on new
information from Coast Guard SMEs in CG-FAC and LANTAREA, Coast Guard
adjusted its cost estimates to reflect 8 hours for drill development
and 4 hours for drill participation for vessel shoreside employees and
the same share of facility and OCS facility employees. Based on this
information, Coast Guard also adjusted its cost estimate for
cybersecurity exercise development from 8 hours to 20 hours. To reduce
the burden associated with the higher estimated cost of drills and
exercises, the Coast Guard has reduced the frequency of required drills
from quarterly to at least two drills every 12 months.
Commenters noted a lack of reference to Alternative
Security Programs (ASPs), and one commenter recommended that the Coast
Guard amend Sec. 101.630(a) to add ASPs to the requirement for CySOs.
Some commenters specifically asked about using an ASP from the PVA, a
trade association that represents several small entities. The Coast
Guard will allow owners and operators to use ASPs to comply with this
final rule. We added additional text to Sec. 101.660 to clarify that
ASP provisions apply to cybersecurity compliance documentation, giving
small entities greater flexibility in how they can comply with the
final rule. Given the unique nature of cybersecurity threats,
vulnerabilities, and mitigation strategies, owners and operators must
ensure that use of ASPs--including PVA's ASP, or ASPs developed on
behalf of other small entities--contains those items specific to each
U.S.-flagged vessel, facility, and OCS facility. The Coast Guard will
evaluate each ASP's cybersecurity component to ensure full regulatory
compliance with each applicable requirement.
Comments suggested that the affected population counts for
U.S.-flagged vessels regulated under subchapters H and K used in the
NPRM were inaccurate and provided updated numbers. The Coast Guard
updated its approach to counting the vessels that will be required to
comply with this final rule. After including the public vessels, the
Coast Guard finds that the population counts for U.S.-flagged vessels
under subchapters K and H are approximately 430 and 131, respectively.
One commenter also stated that the regulation would create
substantial costs for small entities in the commercial shipping sector.
The Coast Guard has made waivers and equivalencies in Sec. 101.665
available to affected owners and operators. These waivers offer
additional flexibility to small entities, regardless of sector, that
are not able to meet the full requirements. To further reduce the
burden for impacted entities, the Coast Guard has opted for a delayed
effective date of 180 days after the rule's publication in the Federal
Register, extended the compliance deadline for the required
Cybersecurity Assessment from 12 months to 24 months after the rule's
effective date, and extended the compliance deadline for the
Cybersecurity Plan from after the second annual audit of the existing
physical security plan to 24 months after the rule's effective date.
The Coast Guard is also requesting comment on a potential 2-5-year
delay of the implementation periods for U.S.-flagged vessels and any
potential costs or benefits the delay may have on small entities.
However, beyond these changes to the implementation period and the
reduction in cybersecurity drill frequency, the requirements of this
final rule remain unchanged.
3. The response of the agency to any comments filed by the Chief
Counsel for Advocacy of the Small Business Administration in response
to the proposed rule, and a detailed statement of any change made to
the proposed rule in the final rule as a result of the comments.
The Chief Counsel for Advocacy of the SBA did not provide comment
on the NPRM or the IRFA.
4. A description of and estimate of the number of small entities to
which the rule will apply or an explanation of why no such estimate is
available.
This section considers the number of small entities likely to be
affected by this final rule. First, we determined which owners of U.S.-
flagged vessels, facilities, and OCS facilities in the affected
population qualify as small businesses, small not-for-profit
organizations, or small governments. Then, we compared reported annual
revenues among the identified small entities with annual compliance
costs estimated by the Coast Guard.
Number of Small Entities Affected
As a first step, we identified the universe of affected owners and
operators of U.S.-flagged vessels, facilities, and OCS facilities using
information contained in the Coast Guard's MISLE database.\161\ The
affected population includes a mix of businesses, not-for-profit
organizations, and governments. Because we applied a different method
to determine which governments are small governments, the first step
was to distinguish Government entities from all other entities in the
affected population. To accomplish this, we searched on several
keywords to identify and separate the universe of Government
entities.\162\ From the full population of affected owners (for profit,
not-for-profit, and governments), we selected a random sample of U.S.-
flagged vessel owners and a separate random sample of facility and OCS
facility owners.\163\
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\161\ The Coast Guard provided MISLE data to IEc on August 13,
2024.
\162\ These keywords included: city, town, borough, state,
commonwealth, district, authority, administration, municipality,
department, army, port, division, and government. We visually
inspect the results of the keyword searches to ensure that the
identified entities are governments.
\163\ Following the Coast Guard's recommended approach for
drawing a random sample, we obtain sample sizes by applying two
equations (S = [(Z-2) x p x q] / (e-2), and S = N / [1+(N x (e-2))]
where S is the sample size, Z=1.96, e= 0.05, p=0.5, q=0.5, and N =
the number of vessel or facility owners in MISLE), and selecting the
higher value obtained. We then apply random numbers between 0 and 1
to the unique owners identified in MISLE and select S number of
owners with the highest random values. We perform this process
separately for vessel owners and facility owners.
---------------------------------------------------------------------------
For the sample of affected facility and vessel owners that are
businesses and not-for-profit organizations, we identified which are
likely to be small entities by matching business- and organization-
specific information for a random sample with size standards for small
businesses published in the SBA's Table of Small Business Size
Standards.164 165 The SBA defines small
[[Page 6429]]
businesses in terms of firm revenues or number of employees. Size
thresholds of small businesses differ depending on the industry sector,
defined in terms of NAICS codes; therefore, the analysis also requires
us to identify the relevant NAICS codes for the affected owners of
facilities and vessels. This analysis relied on the following steps:
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\164\ U.S. Small Business Association (SBA). ``Table of size
standards.'' Available at: https://www.sba.gov/document/support-Table-size-standards accessed November 14, 2024. Effective March 17,
2023.
\165\ To determine whether not-for-profit organizations are
small entities, we rely on the self-identified NAICS code reported
by each organization to D&B Hoovers and the SBA's small business
size standard for that NAICS code. Any organization qualifying as a
small business pursuant to SBA's threshold is considered to be ``not
dominant in its field'' (15 U.S.C. 632) and is categorized as a
small organization. If no NAICS code is available, we assume the
organization is small.
---------------------------------------------------------------------------
(1) Upload the names and location information of the sampled
entities to D&B Hoovers' website and rely on D&B Hoovers' proprietary
algorithm to match entities with the information stored in its
database; \166\
---------------------------------------------------------------------------
\166\ This process relies on D&B Hoovers' automated search
functions to identify the business profiles associated with a list
of businesses, not manual business-by-business searching. This
search functionality is described in more detail in D&B Hoovers User
Guide (2019, p. 25). You can find this resource at https://app.dnbhoovers.com/product/wp-content/uploads/2020/10/DB-Hoovers-User-Guide-920.pdf. The matched data were downloaded from D&B
Hoovers on September 2, 2024, accessed via: https://app.dnbhoovers.com/login.
---------------------------------------------------------------------------
(2) Collect the primary NAICS code, ownership type,\167\ number of
employees,\168\ and annual revenue information from entities that
matched the information in D&B Hoovers' database;
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\167\ D&B Hoovers provides ownership type for the matched
entities. For all entities not identified as governments using the
keywords presented in footnote 160, this analysis considers all
entities marked as ``private,'' ``public,'' or ``partnership'' as
businesses. ``Nonprofit'' ownership status is used to identify not-
for-profit organizations.
\168\ D&B Hoovers contains data fields for both ``employees at
single site'' and ``employees at all sites.'' When both numbers are
provided, we default to using the ``employees at all sites'' entry
to capture the size of the larger parent company. When only the
``employees at single site'' information is available, we use that
entry instead.
---------------------------------------------------------------------------
(3) Determine which owners are small businesses and small not-for-
profit organizations based on the SBA's definitions of small businesses
matched to each NAICS code; 169 170
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\169\ In some cases, SBA provides a size standard for the NAICS
code as well as an ``exeption'' for a sub-set of businesses with
specific activity types. This analysis does not consider the
``exeptions'' when classifying businesses and not-for-profit
organizations as small.
\170\ Revenue data contained in D&B Hoovers is presumed to be
reported in 2023 dollars, aligned with the year preceding our
download. This dollar year directly matches the year SBA last
published its definitions of small businesses therefore we make no
adjustments to the information from D&B Hoovers when comparing with
SBA's reported thresholds.
---------------------------------------------------------------------------
(4) Calculate the proportion of sampled businesses and not-for-
profit organizations that are small entities; and
(5) Estimate the number of small businesses or small not-for-profit
organization in the population by multiplying the sample proportions by
the number of unique affected businesses and organizations in MISLE.
For the sample of government or quasi-governmental organization
owners, we applied a different method to determine which are small.
Small governmental jurisdictions are defined as governments of cities,
counties, towns, townships, villages, school districts, or special
districts, with a population of less than 50,000 (5 U.S.C. 601). The
2020 U.S. Census informed our classification of Government
jurisdictions.\171\
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\171\ 2020 U.S. Census data accessed from: https://www.census.gov/quickfacts/, accessed October 21, 2024.
---------------------------------------------------------------------------
Facility and OCS Facility Owners
Coast Guard identified 1,372 affected facility owners in
MISLE.\172\ Of these, a keyword search identified that 94 are
Government entities and the remaining 1,278 are businesses and not-for-
profit organizations. We generated a random sample of 384 affected
owners, which included 37 of the affected governments also identified
using the same keywords.\173\ The names and location information of the
owners in the sample were uploaded to D&B Hoovers. For the 347 business
and not-for-profit organizations included in the sample, the search
function returned information for 184 (53 percent) with at least 1
identified NAICS code.\174\ Included among the owners that matched with
records in D&B Hoovers were 181 businesses and 3 not-for-profit
organizations. The 181 businesses categorize into 83 NAICS codes and 1
independent code used for ``Unclassified Establishments.'' \175\
---------------------------------------------------------------------------
\172\ Owners of facilities and OCS facilities are determined
using various data fields in MISLE. Owner information is not
reported in a standard format. Therefore, considerable data cleaning
was necessary to identify unique owner names and location
information. This analysis assumes that the sample of facilities
with owner information identified is broadly representative of all
regulated facility owners.
\173\ The sample size of 384 is generated using the procedure
described in footnote 161. Because OCS owners represent 1 percent of
all facility owners in MISLE, we randomly selected 3 (1 percent of
384) OCS owners and 381 (99 percent of 384) facility owners from the
unique owners identified in MISLE.
\174\ Information for the identified governments were included
in the D&B Hoovers search, but the D&B Hoovers output for these
entities is not used in the analysis. Instead, government population
data were manually obtained from the U.S. census.
\175\ D&B Hoovers uses code 999990 for ``Unclassified
Establishments.'' Because SBA does not provide a size standard for
this code, we assume all entities with code 999990 are small. For
the matched facilities owners, 5 entities are classified with this
code in D&B Hoovers.
---------------------------------------------------------------------------
Table 53 reports the number of businesses in the top 10 most
frequently occurring classification codes (NAICS and the code for
Unclassified Establishments) in the sample, as well as the portion that
meet the definition of small business. An additional row summarizes the
businesses across the remaining 74 NAICS codes. As presented, 155 of
181 businesses (86 percent) qualify as small based on their revenue or
number of employees. Additionally, all 3 not-for-profit organizations
are small organizations (100 percent). Under the assumption that all
163 facility owners in the sample for which D&B Hoovers profiles are
not available are small businesses or organizations, we estimate that
321 of the 347 sampled facility owners are small entities (93 percent).
Table 53 also presents findings for the governments. This analysis
identifies that 11 of the 37 sampled government owners are small
governments (30 percent).
Applying the percentage of affected small businesses and not-for-
profit organizations identified in the sample (93 percent) to the total
number of businesses and organizations identified in MISLE (1,278), we
estimate that approximately 1,189 small businesses and small not-for-
profit organizations may be directly affected by this final rule.
Multiplying the percentage of affected small governments in the sample
(30 percent) by the total number of governments identified with a
keyword search of MISLE data (94), we estimate that approximately 28
small governments may be affected by this final rule. In total, 1,217
small entities that own facilities and OCS facilities may be affected
by this final rule.
BILLING CODE 9110-04-P
[[Page 6430]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.074
[[Page 6431]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.075
BILLING CODE 9110-04-C
[[Page 6432]]
Vessel Owners
Across the categories of U.S.-flagged vessels regulated by the
Coast Guard and considered for this rule, MISLE identifies over 10,000
vessels owned by 2,075 unique entities, including 72 government owners
and 2,003 business and not-for-profit organization owners. We generated
a random sample of 385 affected owners, which included 14 affected
governments.\176\ The names and location information in the sample were
uploaded to D&B Hoovers. For the 371 business and not-for-profit
organizations in the sample, the search function returned information
for 249 owners (67 percent) with at least 1 identified NAICS code.
Included among the owners that matched with records in D&B Hoovers were
244 businesses and 5 not-for-profit organizations. The 244 businesses
categorize into 74 NAICS codes and 1 independent code used for
``Unclassified Establishments.\177\
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\176\ The sample size of 385 is obtained by applying the
procedure described in footnote 161 and including the one MODU owner
identified in MISLE. To ensure that vessel owners of all affected
types are represented in the sample, we sampled based on the
distribution of owners by vessel type in MISLE: 211 Towing (55
percent of 384), 76 Barge (20 percent), 30 [U.S.-flagged passenger
vessels subject to subchapter K] Pax K (8 percent), 25 OSV (7
percent), 21 Sub I (5 percent), 8 Tank (2 percent), 7 Pax H (2
percent), and 6 Pax International Travel (2 percent). Percentages do
not sum to 100 due to rounding.
\177\ D&B Hoovers uses code 999990 for ``Unclassified
Establishments.'' Because SBA does not provide a size standard for
this code, we assume all entities with code 999990 are small. For
the matched vessel owners, 34 entities are classified with this code
in D&B Hoovers.
---------------------------------------------------------------------------
Table 54 reports the number of businesses in the top 10 most
frequently occurring classification codes (NAICS and the code for
Unclassified Establishments) in the sample, as well as the portion that
meet the definition of small business. An additional row summarizes the
businesses across the remaining 65 NAICS codes. As presented, 228 of
244 businesses (93 percent) qualify as small based on their revenue or
number of employees. Additionally, the 5 not-for-profit organizations
include 4 small organizations (80 percent). Under the assumption that
all 122 U.S.-flagged vessel owners in the sample for which D&B Hoovers
profiles are not available are small entities, we estimate that 354 of
the 371 sampled U.S.-flagged vessel owners (95 percent) are small
businesses or small not-for-profit organizations. Table 54 additionally
reports that our sample of 14 governments includes 2 small governments
(14 percent).
Applying the percentage of affected small businesses and not-for-
profit organizations identified in the sample (95 percent) to the total
number of businesses and organizations identified in MISLE (2,003), we
estimate that approximately 1,903 small businesses and small not-for-
profit organizations may be directly affected by this final rule.
Multiplying the percentage of affected small governments in the sample
(14 percent) by the total number of governments identified with a
keyword search of MISLE data (72), we estimate that approximately 10
small governments may be affected by this final rule. In total, 1,913
small U.S. entities that own U.S.-flagged vessels may be affected by
this final rule.
BILLING CODE 9110-04-P
[[Page 6433]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.076
[[Page 6434]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.077
BILLING CODE 9110-04-C
Summary
Across the combined 3,447 affected owners of U.S.-flagged vessels,
facilities, or OCS facilities, we estimate that 3,130 small entities
(91 percent) may be affected, including small businesses, small not-
for-profit organizations, and small governments. Because this analysis
assumes all owners for which NAICS codes, employment, or revenue
information is unmatched in D&B Hoovers are small entities, the
projected number of affected small entities may be overestimated.
[[Page 6435]]
Costs Relative to Revenues
This section compares the cost of the changes per U.S.-flagged
vessel and facility owner with annual revenues of affected small
entities. Revenue information is obtained from D&B Hoovers for small
businesses and small not-for-profit organizations.\178\ For small
governments, we use revenue information contained in publicly available
annual financial reports for the year 2022. We assume that the findings
of this analysis are indicative of the impacts on entities for which
revenue information is not readily available.
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\178\ Revenue data from D&B Hoovers is presumed to be reported
in 2023 dollars, the fiscal year preceding the year of download. We
deflate these data to 2022 dollars to make the cost estimates using
Gross Domestic Product reports from the Bureau of Economic Analysis,
available at: https://apps.bea.gov/iTable/?ReqID=19&step=4&isuri=1&1921=flatfiles. See Table 1.1.9 of Section
1, accessed July 1, 2024.
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The RFA does not define a ``significant effect'' in quantitative
terms. In its guidance to agencies on how to comply with the RFA, SBA
states, ``[i]n the absence of statutory specificity, what is
`significant' will vary depending on the economics of the industry or
sector to be regulated. The agency is in the best position to gauge the
small entity impacts of its regulation.'' SBA also provides a list of
options that can be used to determine whether an impact could be
significant on a small entity, ``the impact could be significant if the
cost of the proposed regulation (a) eliminates more than 10 percent of
the businesses' profits; (b) exceeds 1 percent of the gross revenues of
the entities in a particular sector or (c) exceeds 5 percent of the
labor costs of the entities in the sector.'' \179\ Therefore, this
analysis considers the 1-percent threshold when analyzing these
potential impacts.
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\179\ U.S. Small Business Administration (SBA). 2017. A Guide
for Government Agencies: How to Comply with the Regulatory
Flexibility Act. Available at: https://advocacy.sba.gov/2017/08/31/a-guide-for-government-agencies-how-to-comply-with-the-regulatory-flexibility-act/. Pages 18-19, accessed October 21, 2024.
---------------------------------------------------------------------------
Facility and OCS Facility Owners
Assuming that an operator would need to implement each of the
provisions required by this final rule, the Coast Guard estimates that
the highest single-year costs are incurred in Year 2 of the analysis
period. We estimate that the Year 2 cost is $73,320 for an owner or
operator with one facility. Each additional facility owned or operated
would increase the estimated annual costs by the cost of an additional
Cybersecurity Plan, since each facility will require an individual
Cybersecurity Plan.\180\ Table 55 provides a breakdown of the costs per
owner or operator of one facility. The text that follows provides more
detail on these cost calculations.
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\180\ For example, consider an entity that owns four facilities.
The estimated cost to that entity in Year 2 is calculated as
follows: = $73,320 + (3 x $8,414) = $98,562.
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BILLING CODE 9110-04-P
[[Page 6436]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.078
BILLING CODE 9110-04-C
To estimate the cost of the Cybersecurity Plan development,
resubmission, annual maintenance, and audits for an individual facility
or OCS facility owner or operator, we utilize the following estimates:
The hour-burden estimates are 100 hours for developing the
Cybersecurity Plan (average hour burden), 10 hours for annual
maintenance of the Cybersecurity Plan (which will include amendments),
15 hours to renew Cybersecurity Plans every 5 years, and 40 hours to
conduct annual audits of Cybersecurity Plans.
Based on estimates from the Coast Guard's FSP and OCS FSP reviewers
at local inspections offices, approximately
[[Page 6437]]
10 percent of Plans will need to be revised and resubmitted in the
second year, which is consistent with the current resubmission rate for
FSPs and OCS FSPs. For renewals of plans after 5 years (occurring in
the seventh year of the analysis period), Plans will need to be further
revised and resubmitted in approximately 10 percent of cases as well.
However, in this portion of the analysis, we estimate costs as though
the owner or operator will need to revise and resubmit their Plans in
all cases, resulting in an upper-bound (high) estimate of per-entity
costs. We estimate the time for revision and resubmission to be about
half the time to develop the plan itself, or 50 hours in the second
year of submission, and 7.5 hours after 5 years (in the seventh year of
the analysis period). Because we include the annual Cybersecurity
Assessment in the development cost of plans, and we do not assume that
owners and operators will wait until the second year of analysis to
begin developing the Cybersecurity Plan or implementing related
cybersecurity measures, we divide the estimated 100 hours to develop
plans equally across the first and second years of analysis.
Using the CySO loaded hourly wage of $84.14, we estimate the
Cybersecurity Plan related costs by adding the total number of hours to
develop, resubmit, maintain, and audit each year and multiplying by the
CySO wage. For example, we estimate that owners will incur $8,414 in
costs in Year 2 of the analysis period [1 facility x $84.14 CySO wage x
(50 hours to develop the Plan + 50 hours to revise and resubmit the
Plan) = $8,414]. Table 56 displays the per-entity cost estimates for an
owner or operator of one facility over a 10-year period of analysis.
For an owner or operator with multiple facilities, we estimate the
total costs by multiplying the estimates in table 56 by the number of
owned facilities.
[GRAPHIC] [TIFF OMITTED] TR17JA25.079
For drills and exercises, we assume that a CySO on behalf of each
owner and operator will develop cybersecurity drills and cybersecurity
components to add to existing exercises. This development is expected
to take 8 hours for each of the 2 annual drills and 20 hours for an
annual exercise. We also include costs for drill and exercise
participation for facility or OCS facility employees. Because the Coast
Guard is unable to determine which employees at a given facility or OCS
facility will be in assigned cybersecurity duties and required to
participate in the drills, we assume that 33 percent of all employees
will participate. This share of employees is consistent with the
estimated share of shoreside employees in the affected population of
owners and operators of U.S.-flagged vessels. Coast Guard SMEs believe
this is a more reasonable estimate than assuming the entire portion of
employees will participate. We obtain the average number of facility
employees from a Coast Guard contract that uses D&B Hoovers' database
for company employee data. The average number of employees at a
facility company is 74. We estimate that the average number of
employees that will participate in cybersecurity drills is 24 (74
employees x 0.33). We assume that employees will take 4 hours to
participate in each drill and 4 hours to participate in each exercise.
Using the loaded hourly wage for a CySO of $84.14 and the loaded
hourly wage for a facility employee of $60.34, we estimate annual costs
of approximately $20,407 per facility owner or operator [($84.14 CySO
wage x 8 hours x 2 drills) + ($84.14 CySO wage x 20 hours x 1 exercise)
+ (24 employees x $60.34 facility employee wage x 4 hours x 2 drills) +
(24 employees x $60.34 facility employee wage x 4 hours x 1 exercise) =
$20,407] as seen in table 55.
For account security measures, we assume that a database
administrator on behalf of each owner or operator will spend 8 hours
each year implementing and managing account security. Using the loaded
hourly wage for a database administrator of $71.96, we estimate annual
costs of approximately $576 ($71.96 database administrator wage x 8
hours = $576), as seen in table 55.
For multifactor authentication, we assume that a facility owner or
operator will spend $9,000 in the initial year on
[[Page 6438]]
average to implement a multifactor authentication system and spend
approximately $150 per employee annually for system maintenance and
support. Therefore, we estimate first year costs of approximately
$20,100 [$9,000 implementation cost + ($150 support and maintenance
costs x 74 average facility company employees)], and subsequent year
costs of $11,100 ($150 support and maintenance costs x 74 average
facility company employees), as seen in table 55.
For cybersecurity training, we assume that a CySO will take 2 hours
each year to develop and manage employee cybersecurity training, and
facility employees will take 1 hour to complete the training each year.
Using the estimated CySO wage of $84.14 and the estimated facility
employee wage of $60.34, we estimate annual training costs of
approximately $4,633 [($84.14 x 2 hours) + ($60.34 x 74 facility
company employees x 1 hour)], as seen in table 55.
For penetration testing, we estimate costs only in the second and
seventh years of analysis since tests are required to be performed in
conjunction with Cybersecurity Plan submission and renewal. We assume
that facility owners and operators will spend approximately $10,000 per
penetration test and an additional $100 per IP address at the
organization in order to capture network complexity. We use the total
number of company employees multiplied by 2 as a proxy for the number
of IP addresses. This is based on suggestions from public commenters
stating that networks often include employees with multiple devices,
outside industrial personnel accessing the networks, and OT systems
that increase the number of IP addresses and the network complexity at
a given company. As a result, we estimate second- and seventh-year
costs of approximately $24,800 [$10,000 testing cost + ($100 x 148 IP
addresses)], as seen in table 55.
Finally, for vulnerability management, we assume that each facility
or OCS facility will need to secure a vulnerability scanning program or
software. Because vulnerability scans can occur in the background, we
do not assume an additional hour burden associated with the
implementation or use of a vulnerability scanner each year. Using the
annual subscription cost of an industry leading vulnerability scanning
software, we estimate annual costs of approximately $3,390, as seen in
table 55.
As demonstrated in table 55, affected entities are expected to
incur the highest costs in Year 2 of this final rule. This analysis
estimates the cost of the rule in Year 2 per affected small entity,
using the information presented in table 55 and adjusting for the
number of facilities and OCS facilities owned by the entity as recorded
in MISLE. Among the 332 presumed small entities in the sample
(including those for which a D&B Hoovers profile was not matched, see
table 53), 180 owners (54 percent) are associated with one facility
($73,320 cost in Year 2). The average small entity owns approximately 3
facilities, and the average cost across small entities is $90,148 in
Year 2. The small entity in the sample with the highest projected cost
owns 31 facilities ($325,740 cost in Year 2).
Table 57 compares the entity-specific Year 2 costs with the annual
revenues of 131 small entities in our sample of affected facilities for
which revenue information is provided in D&B Hoovers or obtained from
2022 annual financial reports (39 percent of the 332 small entities in
our sample).\181\ As shown, approximately 56 percent of small entities
may incur costs that meet or exceed 1 percent of annual revenue in the
second year of this final rule [(17 + 56) / 131 = 56 percent]. The
sampled small entity with the highest ratio of cost to revenue is
projected to incur costs of 138 percent of its reported annual revenue,
although it is possible that revenue data is underreported.
[GRAPHIC] [TIFF OMITTED] TR17JA25.080
U.S.-Flagged Vessel Owners
---------------------------------------------------------------------------
\181\ Entity-specific Year 2 costs account for the number of
facilities owned by the entity in question.
---------------------------------------------------------------------------
The costs to owners and operators of U.S.-flagged vessels differ
from the costs to owners and operators of facilities and OCS facilities
and are more heavily influenced by the number of vessels owned. Table
58 presents the average annual costs per entity, regardless of the
number of vessels owned and vessel type, in the first 10 years of rule
implementation. The annual cost per entity ranges from $11,202 to
$23,894. The data and assumptions underlying these estimates are
provided later in this section.
BILLING CODE 9110-04-P
[[Page 6439]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.081
BILLING CODE 9110-04-C
Several other categories of costs are dependent on the type and
number of vessels owned by each entity. These costs are calibrated to
the average number of employees by U.S.-flagged vessel type, as well as
a unique weighted hourly wage based on the personnel employed on the
U.S.-flagged vessels.\182\ Table 59 displays the average number of
employees for each U.S.-
[[Page 6440]]
flagged vessel type, including shoreside employees, and their unique
weighted mean hourly wages. Table 60, which follows, displays the per-
vessel costs associated with each type of U.S.-flagged vessel. To
calculate the total cost per entity in the population of U.S.-flagged
vessels, we add the annual per-vessel costs from table 60, multiplied
by the number and types of U.S.-flagged vessels owned, to the per-
entity costs presented in table 58.\183\
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\182\ The average per-vessel employee counts were taken from
manning requirements in the certificates of inspection in MISLE. We
averaged the mariner counts listed for each vessel within a
subpopulation of vessels, then applied a 1.33 shoreside employee
modifier to account for non-mariner employees. The calculation of
wage rates across vessel types are described in ``Appendix A: Wages
Across Vessel Types.''
\183\ For example, consider an entity that owns two subchapter H
passenger vessels. The estimated cost to that entity in Year 2 is
calculated as follows: (2 x $43,853) + $23,894 = $111,600.
[GRAPHIC] [TIFF OMITTED] TR17JA25.082
[GRAPHIC] [TIFF OMITTED] TR17JA25.083
[[Page 6441]]
To estimate the cost for an owner or operator of a U.S.-flagged
vessel to develop, resubmit, conduct annual maintenance, and audit the
Cybersecurity Plan, we use estimates provided earlier in the analysis.
The hour-burden estimates are 80 hours for developing the Cybersecurity
Plan (average hour burden), 8 hours for annual maintenance of the
Cybersecurity Plan (which will include amendments), 12 hours to renew
Cybersecurity Plans every 5 years, and 40 hours to conduct annual
audits of Cybersecurity Plans. Based on estimates from Coast Guard VSP
reviewers at MSC, approximately 10 percent of Plans will need to be
resubmitted in the second year due to revisions that will be needed to
the Plans, which is consistent with the current resubmission rate for
VSPs. For renewals of plans after 5 years (occurring in the seventh
year of the analysis period), plans will need to be further revised and
resubmitted in approximately 10 percent of cases as well. However, in
this portion of the analysis, we estimate costs as though the owner or
operator will need to revise and resubmit their Plans in all cases,
resulting in an upper-bound (high) estimate of per-entity costs. We
estimate the time for revision and resubmission to be about half the
time to develop the Plan itself, or 40 hours in the second year of
submission, and 6 hours after 5 years (in the seventh year of the
analysis period). Because we include the annual cybersecurity
assessment in the development cost of Plans, and we do not assume that
owners and operators will wait until the second year of analysis to
begin developing the Cybersecurity Plan or implementing related
cybersecurity measures, we divide the estimated 80 hours to develop
plans equally across the first and second years of analysis.
Using the CySO loaded hourly wage of $84.14, we estimate the
Cybersecurity Plan related costs by adding the total number of hours to
develop, resubmit, maintain, and audit each year and multiplying by the
CySO wage. For example, we estimate that owners and operators will
incur approximately $6,731 in costs in Year 2 of the analysis period
[$84.14 CySO wage x (40 hours to develop the Plan + 40 hours to revise
and resubmit the Plan) = $6,731]. See table 61.
[GRAPHIC] [TIFF OMITTED] TR17JA25.084
Similarly, we use earlier estimates for the calculation of per-
entity costs for drills and exercises, account security measures,
multifactor authentication, cybersecurity training, penetration
testing, vulnerability management, and resilience.
For drills and exercises, we assume that a CySO on behalf of each
owner and operator will develop new cybersecurity drills and
cybersecurity components to add to existing physical security
exercises. This development is expected to take 8 hours for each of the
2 annual drills and 20 hours for an annual exercise. We also include
costs for both drill and exercise participation for all U.S.-flagged
vessel employees. We assume that employees will take 4 hours to
participate in each drill and 4 hours to participate in each exercise.
Note that the per-employee costs associated with drills and
exercises vary depending on the types and number of U.S.-flagged
vessels. To determine the number of employees for each U.S.-flagged
vessel company, we use data from the certificate of inspection manning
requirements in MISLE for each vessel subpopulation. We assume 2 crews
and multiply the total number of seafaring crew by 1.33 to account for
shoreside staff to obtain an estimate of total company employees per
vessel. We then subtract the total number of seafaring crew from the
number of total company employees to arrive at the share of employees
participating in the cybersecurity drills.\184\ As an example, using
the estimated CySO wage of $84.14 and the estimated OSV employee wage
of $54.92, we estimate annual drills and exercises costs of
[[Page 6442]]
approximately $5,665 [($84.14 x 8 hours x 2 drills) + ($84.14 x 20
hours x 1 exercise) + ($54.92 x 4 average employees per OSV x 4 hours x
2 drills) + ($54.92 x 4 average employees per OSV x 4 hours x 1
exercise)]. Development per-entity costs of $3,029 can be found in
table 58, and variable per-vessel costs can be found in table 60.
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\184\ For example, the average OSV in the affected population
carries 12 seafaring crew per vessel, according to certificate of
inspection manning requirements. We multiply this by 1.33 to arrive
at 16 total employees per OSV. We then subtract the 12 seafaring
crew from the 16 total employees to isolate the 4 shoreside
employees per vessel that would need to participate in the
cybersecurity drills.
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For account security measures, we assume that a database
administrator on behalf of each owner or operator will spend 8 hours
each year implementing and managing account security. Using the loaded
hourly wage for a database administrator of $71.96, we estimate annual
costs of approximately $576 ($71.96 database administrator wage x 8
hours = $576), as seen in table 58.
For multifactor authentication, we assume that a U.S.-flagged
vessel owner or operator will spend $9,000 in the initial year on
average to implement a multifactor authentication system and
approximately $150 per employee annually for system maintenance and
support. Therefore, we estimate first year implementation costs of
approximately $9,000 for all owners and operators, with annual costs in
Years 2 through 10 depending on the number of employees for each type
of U.S.-flagged vessel. For example, we estimate the first-year costs
to an owner or operator of one OSV to be approximately $11,400 [$9,000
implementation cost + ($150 support and maintenance costs x 16 average
employees per OSV)], and subsequent year costs of $2,400 ($150 support
and maintenance costs x 16 average employees per OSV). Per-entity
implementation costs of $9,000 can be found in table 58, and variable
per-vessel costs can be found in table 60.
For cybersecurity training, we assume that a CySO for each U.S.-
flagged vessel owner or operator will take 2 hours each year to develop
and manage employee cybersecurity training, and U.S.-flagged vessel
employees will take 1 hour to complete the training each year. The per-
employee costs associated with training vary depending on the types and
number of U.S.-flagged vessels and will be based on the average number
of employees per vessel and the associated weighted hourly wage. For
example, using the estimated CySO wage of $84.14 and the estimated OSV
employee wage of $54.92, we estimate annual training costs of
approximately $1,047 [($84.14 x 2 hours) + ($54.92 x 16 average
employees per OSV x 1 hour)]. Development per-entity costs of $168 can
be found in table 58, and variable per-vessel costs can be found in
table 60.
For penetration testing, we estimate costs only in the second and
seventh years of analysis, since tests are required to be performed in
conjunction with submitting and renewing the Cybersecurity Plan. We
assume that U.S.-flagged vessel owners and operators will spend
approximately $10,000 per penetration test and an additional $100 per
IP address at the organization, to capture network complexity. We
utilize the average number of employees per U.S.-flagged vessel
multiplied by 2 as a proxy for the number of IP addresses. We do this
based on suggestions from public commenters stating that networks often
include employees with multiple devices, outside industrial personnel
accessing the networks, and OT systems that increase the number of IP
addresses and network complexity at a given company. As a result, we
estimate second- and seventh-year costs as follows: [$10,000 testing
cost + ($100 x average IP addresses per vessel)]. For example, we
estimate second- and seventh-year cost of approximately $13,200 for an
owner or operator of an OSV [$10,000 testing cost + ($100 x 32 average
IP addresses per OSV)]. Initial per-entity costs of $10,000 can be
found in table 58, and variable per-vessel costs can be found in table
60.
For vulnerability management, we assume that each U.S.-flagged
vessel owner or operator will need to secure a vulnerability scanning
program or software. Because vulnerability scans can occur in the
background, we do not assume an additional hour burden associated with
the implementation or use of a vulnerability scanner each year. Using
the annual subscription cost of an industry leading vulnerability
scanning software, we estimate annual costs of approximately $3,390, as
seen in table 58. This analysis calculates U.S.-flagged vessel owner-
specific annual compliance costs based on the type and number of
vessels associated with each small entity in the sample. For the small
entities that only own barges, there are no variable costs per vessel.
We assume that they will incur only per-company costs related to the
Cybersecurity Plan, as well as the development of and participation in
drills and exercises. This means that the greatest per-owner costs
occur in Year 2.
Our analysis identifies 67 small entities in the sample that fall
into this category and presumes that this final rule will cost these
entities $9,760 each in Year 2 ($6,731 Cybersecurity Plan related costs
+ $3,029 drills and exercises costs). For all other small entities that
own U.S.-flagged vessels, the costs include a per-owner component as
well as per-vessel costs that vary by vessel type. The highest total
annual costs per owner also occur in Year 2. Among the 289 sampled
small entities in this category, 164 owners (57 percent) are associated
with one U.S.-flagged vessel (with an average cost of $38,229 in Year
2). The average small entity in the sample owns 3 U.S.-flagged vessels,
and the average cost across all sampled small entities is $43,612 in
Year 2. The small entity in the sample with the highest projected costs
owns 8 U.S.-flagged vessels (with a cost of $299,214 in Year 2).
Table 62 compares the entity-specific costs in Year 2 with the
greatest costs with the annual revenues of 222 small entities in our
sample of affected U.S.-flagged vessel owners for which revenue
information is provided in D&B Hoovers or through revenue information
released by small governments (62 percent of 356 sampled small
entities). As shown, 81 percent of small entities in the sample may
incur costs that meet or exceed 1 percent of annual revenue in the
second year of this final rule [(50 + 130) / 222 = 81 percent]. After
removing 1 significant outlier, the small entity in the sample with the
highest ratio of cost to revenue is projected to incur costs of 131
percent of its reported annual revenue; although, it is possible that
revenue data is underreported.
[[Page 6443]]
[GRAPHIC] [TIFF OMITTED] TR17JA25.085
Summary
The analysis above characterizes the revenue impacts on small
entities by projecting costs for each affected owner specific to the
number and type of U.S.-flagged vessels, as well as the number of
facilities and OCS facilities owned, according to data from the Coast
Guard. We estimate that 56 percent of small facility and OCS facility
owners and 81 percent of small U.S.-flagged vessel owners may incur
costs that meet or exceed 1 percent of their annual revenue.
There are two reasons that the estimated compliance costs and,
therefore, the impacts on small entities, are likely to be
overestimated. First, the cost estimation approach assumes that all
owners will incur costs associated with all provisions required in the
rule. However, it is highly likely that many affected owners already
have invested in some of the cybersecurity measures, absent the rule.
Data available to the Coast Guard demonstrate this is the case for many
facility owners, although whether those facility owners are small
entities is uncertain. Second, some affected owners are unlikely to
have IT or remotely accessible OT systems to which this final rule will
apply. Those owners will only incur the cost associated with requesting
a waiver or equivalence, costs which are likely to be far less than the
costs described in this section.
5. A description of the projected reporting, recordkeeping, and
other compliance requirements of the rule, including an estimate of the
classes of small entities which will be subject to the requirement and
the type of professional skills necessary for preparation of the report
or record.
This rule will call for a new collection of information under the
Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520. As defined in 5
CFR 1320.3(c), ``collection of information'' comprises reporting,
recordkeeping, monitoring, posting, labeling, and other similar
actions. Section VIII.D., Collection of Information, in the preamble of
this final rule, includes the title and description of the information
collection, a description of those who must collect the information,
and an estimate of the total annual burden. For a description of all
other compliance requirements and their associated costs, please see
the preceding analysis of the per-entity costs of the rule.
6. A description of the steps the agency has taken to minimize the
significant economic impact of small entities consistent with the
stated objectives of applicable statutes, including a statement of the
factual, policy, and legal reasons for selecting the alternative
adopted in the final rule and why each of the other significant
alternatives to the rule considered by the agency which affect the
impact on small entities was rejected.
The purpose of this rule is to safeguard the MTS against current
and emerging threats associated with cybersecurity by adding minimum
cybersecurity requirements to 33 CFR part 101. However, rather than
making these requirements prescriptive, the Coast Guard has listed
minimum performance-based cybersecurity requirements for the MTS. Like
the existing requirements in 33 CFR parts 104, 105, and 106, the Coast
Guard allows owners and operators the flexibility to determine the best
way to implement and comply with these new requirements. This means
that, while the Coast Guard may require the implementation of a
multifactor authentication system, for example, it is up to the
discretion of the impacted owner or operator to determine what shape or
form that system may take, and how many resources should be expended to
implement it. As a result, many of the cost estimates in this FRFA
represent conservative (upper-bound) estimates, as we attempt to
capture costs for a wide range of affected owners and operators.
Further, the Coast Guard has made waivers and equivalencies available
to affected owners and operators who feel they are unable to meet the
requirements of this rule, offering additional flexibility to small
entities that are not able to meet the full requirements.
In addition to these intentional flexibilities, the Coast Guard
made changes in response to public comments on the NPRM that will
lessen the economic impact on all affected entities, including small
entities. First, we reduced the required frequency of cybersecurity
drills from quarterly to twice annually, reducing the overall effort
expended on drills. In addition, the Coast Guard extended the
implementation period and compliance dates for the cybersecurity
requirements in this final rule beyond the 12 to 18 months that we
proposed in the NPRM. We revised Sec. 101.650(e)(1) to specify that
owners and operators will need to conduct the Cybersecurity Assessment
within 24 months of the effective date of this final rule. The
Cybersecurity Plan must also be submitted to the Coast Guard for review
and approval within 24 months of the effective date of this final rule,
rather than during the second annual audit following the effective
date, as stated in the NPRM. We revised Sec. 101.655 to reflect this
change. By using the same implementation period for each group of
regulated entities rather than basing this on the
[[Page 6444]]
organization's audit date, the relevant owners and operators will have
the same amount of time in which to implement these requirements, and
in many cases will have additional time to come into compliance when
compared to the NPRM.
Beyond the adopted changes and intentional flexibilities developed
into this final rule, the Coast Guard also considered an alternative
that would make the penetration testing requirements of this rule
optional for small entities. Given the nature of penetration testing,
it can often come with a high cost, particularly for small entities
with limited resources. Leaving the penetration testing requirements up
to owner discretion could allow small entities in the affected
population to prioritize different cybersecurity measures that may make
more sense for their organization. The decision to undertake
penetration testing could be made as a result of thorough risk
assessments for each organization, considering its operational
environments, risk profile, and pertinent threats. Under this
alternative, an owner or operator, or a CySO on their behalf, could
determine when a penetration test is warranted, if at all.
Because penetration testing would be optional, this could
hypothetically reduce costs for owners and operators for penetration
testing down to zero, meaning an estimated cost reduction of $24,800 in
the second and seventh years of analysis for an owner or operator of 1
facility or OCS facility. It would also lead to estimated cost
reductions in the second and seventh years of $84,400 ($10,000 +
$74,400) for owners and operators of a single MODU, $26,400 ($10,000 +
$16,400) for owners and operators of a single U.S.-flagged vessel under
subchapter I, $13,200 ($10,000 + $3,200) for owners and operators of a
single OSV, $27,000 ($10,000 + $17,000) for owners and operators of a
single passenger vessel under subchapter H, $17,000 ($10,000 + $7,000)
for owners and operators of a single passenger vessel under subchapter
K, $12,600 ($10,000 + $2,600) for owners and operators of a single
towing vessel under subchapter M, $18,000 ($10,000 + $8,000) for owners
and operators of a single tank vessel under subchapter D and a
combination of subchapters O&D, and $15,400 ($10,000 + $5,400) for
owners and operators of a single international passenger vessel under
subchapters K and T. The estimated cost reductions could be higher if
ownership of multiple vessels is considered.
Despite the potential for minimizing economic impacts, however, the
value of penetration testing for most organizations, including small
entities, cannot be overstated. When integrated into a comprehensive
cybersecurity strategy, penetration testing can be very effective in
identifying vulnerabilities. By fostering a proactive rather than
reactive approach in cybersecurity, penetration testing enables
organizations to stay ahead of potential threats and better understand
how malicious actors can exploit weaknesses in IT and OT systems. This
is particularly crucial given the quickly evolving landscape of cyber
threats. In addition, because the costs of a potential cyber incident
are so high, the Coast Guard must prioritize some level of oversight on
provisions that can lessen the risk of a cyber incident. Therefore, we
rejected this alternative, despite the potential cost reductions.
It should be noted, however, that according to Sec. 101.665,
owners and operators of U.S.-flagged vessels, facilities, and OCS
facilities can seek a waiver or an equivalence determination if they
are unable to meet any requirements, penetration testing included.
C. Assistance for Small Entities
Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996, Pub. L. 104-121, we want to assist small entities
in understanding this rule so that they can better evaluate its effects
on them and participate in the rulemaking. If the rule affects your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
call or email the person in the FOR FURTHER INFORMATION CONTACT section
of this rule. The Coast Guard will not retaliate against small entities
that question or complain about this rule or any policy or action of
the Coast Guard.
Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247).
D. Collection of Information
This rule calls for a new collection of information under the
Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520. As defined in 5
CFR 1320.3(c), ``collection of information'' comprises reporting,
recordkeeping, monitoring, posting, labeling, and other similar
actions. The title and description of the information collection, a
description of those who must collect the information, and an estimate
of the total annual burden follow. The estimate covers the time for
reviewing instructions, searching existing sources of data, gathering,
and maintaining the data needed, and completing and reviewing the
collection.
Title: Cybersecurity Plans.
OMB Control Number: 1625-new.
Summary of Collection of Information: This collection of
information is new. The Coast Guard will collect information from the
owners and operators of U.S.-flagged vessels, facilities, and OCS
facilities under 33 CFR part 101, subpart F. The information collection
will be for the submission of Cybersecurity Plans, amendments to
Cybersecurity Plans in 33 CFR 101.630, and cyber incident reports in 33
CFR 101.650(g)(1).
Need for Information: The Coast Guard is creating new cybersecurity
requirements for owners and operators of U.S.-flagged vessels,
facilities, and OCS facilities to mitigate or prevent a cyber incident
from occurring. The information we request from industry will be from
(1) the development of Cybersecurity Plans, which will include details
on implemented drills and exercise, training, and various cybersecurity
measures in Sec. 101.650 that might safeguard critical IT and OT
systems from cyber incidents; (2) amendments to Cybersecurity Plans;
and (3) reporting cyber incidents to the NRC.
Use of Information: The Coast Guard will use this information to
determine if vessel and facility owners and operators have
cybersecurity measures in place and to ensure that owners and operators
are conducting periodic reviews of Cybersecurity Plans and testing
their IT and OT systems for adequacy. Additionally, the Coast Guard
will ensure vessel and facility owners and operators are reporting
cyber incidents to the Coast Guard.
Description of the Respondents: The respondents are owners and
operators of U.S.-flagged vessels, facilities, and OCS facilities.
Number of Respondents: The number of respondents will be about
2,075 U.S.-flagged vessel owners and operators and about 1,372 facility
and OCS facility owners and operators. We assume that a CySO will be
responsible for the reporting and recordkeeping requirements of the
rule on behalf of each owner and operator.
[[Page 6445]]
Frequency of Response: The number of responses to this rule will
vary annually.
Burden of Response: The burden of response will vary for each
regulatory requirement.
Estimate of Total Annual Burden: The estimate of annual burden
varies based on the year of analysis. For the initial year of analysis,
the hour burden for Cybersecurity Plan activities and cyber incident
reporting will be about 268,900 hours across the affected population.
This is derived from the development of 3,718 facility and OCS facility
Cybersecurity Plans for 50 hours each and 2,075 vessel Cybersecurity
Plans for 40 hours each [(3,718 x 50) + (2,075 x 40)]. For more
information on how these and other burden estimates were developed, see
the Regulatory Planning and Review section of this final rule.
For the second year of analysis, the hour burden for Cybersecurity
Plan activities and cyber incident reporting will be about 295,820
hours across the affected population. The second year of analysis
represents the highest estimated hour burden for all years of analysis.
This is derived from the development of 3,718 facility and OCS facility
Cybersecurity Plans for 50 hours each, 372 facility and OCS facility
Cybersecurity Plans being revised and resubmitted for an additional 50
hours, 2,075 vessel Cybersecurity Plans for 40 hours each, and 208
vessel Cybersecurity Plans being revised and resubmitted for an
additional 40 hours [(3,718 x 50) + (372 x 50) + (2,075 x 40) + (208 x
40)].
For the third through the sixth years of analysis, and the eighth
through the tenth years of analysis, when Cybersecurity Plans are being
maintained and amendments are being developed, the hour burden for
Cybersecurity Plan activities and cyber incident reporting will be
about 53,780 hours across the affected population. This is derived from
the maintenance and amendment of 3,718 facility and OCS facility
Cybersecurity Plans for 10 hours each, and the maintenance and
amendment of 2,075 vessel Cybersecurity Plans for 8 hours each [(3,718
x 10) + (2,075 x 8)].
For the seventh year of analysis, when Cybersecurity Plans are
renewed, the hour burden for Cybersecurity Plan activities and cyber
incident reporting will be about 84,708 hours across the affected
population. This is derived from the renewal of 3,718 facility and OCS
facility Cybersecurity Plans for 15 hours each, 372 facility and OCS
facility Cybersecurity Plans being revised and resubmitted for an
additional 7.5 hours, 2,075 vessel Cybersecurity Plans being renewed
for 12 hours each, and 208 vessel Cybersecurity Plans being revised and
resubmitted for an additional 6 hours [(3,718 x 15) + (372 x 7.5) +
(2,075 x 12) + (208 x 6)].
This leads to an average annual hour burden total of 102,589 hours
over the 10-year period of analysis.
As required by 44 U.S.C. 3507(d), we will submit a copy of this
rule to OMB for its review of the collection of information.
You need not respond to a collection of information unless it
displays a currently valid control number from OMB. OMB has not yet
completed its review of this collection. Once OMB completes action on
our ICR, we will publish a Federal Register notice describing OMB's
action.
E. Federalism
A rule has implications for federalism under Executive Order 13132
(Federalism) if it has a substantial direct effect on States, on the
relationship between the National Government and the States, or on the
distribution of power and responsibilities among the various levels of
Government. We have analyzed this rule under Executive Order 13132 and
have determined that it is consistent with the fundamental federalism
principles and preemption requirements described in Executive Order
13132. Our analysis follows.
It is well settled that States may not regulate in categories
reserved for regulation by the Coast Guard and that all categories
covered in 46 U.S.C. 3306, 3703, 7101, and 8101 (design, construction,
alteration, repair, maintenance, operation, equipping, personnel
qualification, and manning of vessels), as well as the reporting of
casualties and any other category in which Congress intended the Coast
Guard to be the sole source of a vessel's obligations, are within the
field foreclosed from regulation by the States. See United States v.
Locke, 529 U.S. 89 (2000). This final rule will expand maritime
security requirements under MTSA to expressly address current and
emerging cybersecurity risks and safeguard the MTS. In enacting MTSA,
Congress articulated a need to address port security threats around the
United States while preserving the free flow of interstate and foreign
commerce. MTSA's mandatory, comprehensive maritime security regime,
founded on this stated interest of facilitating interstate and
international maritime commerce, indicates that States and local
governments are generally foreclosed from regulating in this field.
Particularly with respect to vessels subject to this new subpart F, the
Coast Guard's above-noted comprehensive law and regulations will
preclude State and local laws. OCS facilities, which do not generally
fall under any State or local jurisdiction, are principally subject to
Federal law and regulation.
Notwithstanding MTSA's general preemptive effect, States and local
governments have traditionally shared certain regulatory jurisdiction
with the Federal Government over waterfront facilities. Accordingly,
current MTSA regulations make clear that the maritime facility security
requirements of 33 CFR part 105 only preempt State or local regulation
when the two conflict.\185\ Similarly, the cybersecurity requirements
of this final rule as they apply to a facility under 33 CFR part 105
will only have preemptive effect over a State or local law or
regulation insofar as the two actually conflict (meaning compliance
with both requirements is impossible or the State or local requirement
frustrates an overriding Federal need for uniformity).
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\185\ 33 CFR 101.112(b).
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In light of the foregoing analysis, this rule is consistent with
the fundamental federalism principles and preemption requirements
described in Executive Order 13132.
While it is well settled that States may not regulate in categories
in which Congress intended the Coast Guard to be the sole source of a
vessel's obligations or where compliance with both a State and Federal
laws is impossible or when a state law stands as an obstacle to the
full purpose and objective of Congress, the Coast Guard recognizes the
key role that State and local governments may have in making regulatory
determinations. Additionally, for rules with federalism implications
and preemptive effect, Executive Order 13132 specifically directs
agencies to consult with State and local governments during the
rulemaking process. If you believe this rule will have implications for
federalism under Executive Order 13132, please call or email the person
listed in the FOR FURTHER INFORMATION CONTACT section of this preamble.
F. Unfunded Mandates
The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531-1538,
requires Federal agencies to assess the effects of their discretionary
regulatory actions. The Unfunded Mandates Reform Act of 1995addresses
actions that may result in the expenditure by a State, local, or Tribal
Government, in the aggregate, or by the private sector of $100 million
(adjusted for inflation) or more in any one year.
[[Page 6446]]
After adjusting for inflation, this action will result in the
expenditure of $176 million or more in any one year, in 2022 dollars.
To obtain this inflated value, we use the 2022 and 1995 annual gross
domestic product implicit price deflator values of 117.973 and 66.939,
respectively. We divide these values to obtain a factor of
approximately 1.76, rounded (117.973 / 66.939 = 1.76).\186\ Multiplying
this factor by the expenditure amount identified in the Unfunded
Mandates Reform Act of 1995 gives us our expenditure amount adjusted
for inflation (1.76 x 100,000,000 = 176,000,000). Because this rule
will result in the expenditure by the private sector of approximately
$178,717,861 in undiscounted 2022 dollars in the most cost-heavy year,
this action requires an assessment. The RA, prepared in conjunction
with this final rule, satisfies the Unfunded Mandates Reform Act of
1995's requirements under 2 U.S.C. 1532. In addition to the estimated
impacts, it should be noted that many of the provisions in this rule
are intentionally designed to take owner or operator discretion into
account, which can help reduce anticipated expenditures. While this
rule may require action related to a security measure (implementing
multifactor authentication, for example), the method or policy used to
achieve compliance with the provision is at the discretion of the
impacted owner or operator. This final rule also includes the option
for waivers and equivalents, in Sec. 101.665, for any requirements in
subpart F. These intentional flexibilities can help reduce expected
costs for those in the affected population and allow for more tailored
cybersecurity solutions.
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\186\ We use the implicit price deflator for gross domestic
product values from the Bureau of Economic Analysis National Income
and Product Accounts interactive data tables. See https://apps.bea.gov/iTable/?reqid=19&step=3&isuri=1&1921=survey&1903=11#eyJhcHBpZCI6MTksInN0ZXBzIjpbMSwyLDMsM10sImRhdGEiOltbIk5JUEFfVGFibGVfTGlzdCIsIjEzIl0sWyJDYXRlZ29yaWVzIiwiU3VydmV5Il0sWyJGaXJzdF9ZZWFyIiwiMTk5NSJdLFsiTGFzdF9ZZWFyIiwiMjAyMyJdLFsiU2NhbGUiLCIwIl0sWyJTZXJpZXMiLCJBIl1dfQ==, accessed
August 20, 2024.
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G. Taking of Private Property
This final rule will not cause a taking of private property or
otherwise have taking implications under Executive Order 12630
(Governmental Actions and Interference with Constitutionally Protected
Property Rights).
H. Civil Justice Reform
This final rule meets applicable standards in sections 3(a) and
3(b)(2) of Executive Order 12988, (Civil Justice Reform), to minimize
litigation, eliminate ambiguity, and reduce burden.
I. Protection of Children
We analyzed this final rule under Executive Order 13045 (Protection
of Children from Environmental Health Risks and Safety Risks). This
final rule will not create an environmental risk to health or risk to
safety that might disproportionately affect children.
J. Indian Tribal Governments
This final rule does not have Tribal implications under Executive
Order 13175 (Consultation and Coordination with Indian Tribal
Governments), because it will not have a substantial direct effect on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes.
K. Energy Effects
We have analyzed this final rule under Executive Order 13211
(Actions Concerning Regulations That Significantly Affect Energy
Supply, Distribution, or Use). We have determined that it is not a
``significant energy action'' under that order because, although it is
a ``significant regulatory action'' under Executive Order 12866, it is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy.
L. Technical Standards
The National Technology Transfer and Advancement Act, codified as a
note to 15 U.S.C. 272, directs agencies to use voluntary consensus
standards in their regulatory activities unless the agency provides
Congress, through OMB, with an explanation of why using these standards
will be inconsistent with applicable law or otherwise impractical.
Voluntary consensus standards are technical standards (for example,
specifications of materials, performance, design, or operation; test
methods; sampling procedures; and related management systems practices)
that are developed or adopted by voluntary consensus standards bodies.
This final rule does not use technical standards. Therefore, we did
not consider the use of voluntary consensus standards.
M. Environment
We have analyzed this final rule under Department of Homeland
Security Management Directive 023-01, Rev. 1, associated implementing
instructions, and Environmental Planning COMDTINST 5090.1 (series),
which guide the Coast Guard in complying with the National
Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have
determined that this action is one of a category of actions that do not
individually or cumulatively have a significant effect on the human
environment. A Record of Environmental Consideration supporting this
determination is available in the docket. For instructions on locating
the docket, see the ADDRESSES portion of this preamble.
This final rule is categorically excluded under paragraphs A3 and
L54 of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01,
Rev. 1. Paragraph A3 pertains to promulgation of rules, issuance of
rulings or interpretations, and the development and publication of
policies, orders, directives, notices, procedures, manuals, advisory
circulars, and other guidance documents, notably those of a strictly
administrative or procedural nature; and those that interpret or amend
an existing regulation without changing its environmental effect.
Paragraph L54 pertains to regulations that are editorial or procedural.
This final rule involves establishing minimum cybersecurity
requirements in Coast Guard regulations such as account security
measures, device security measures, governance and training, risk
management, supply chain management, resilience, network segmentation,
reporting, and physical security. This final rule promotes the Coast
Guard's maritime security mission by establishing measures to safeguard
the MTS against emerging threats associated with cybersecurity. This
final rule also promotes the Coast Guard's marine environmental
protection mission by preventing or mitigating marine environmental
damage that can ensue due to a cybersecurity incident.
N. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs has determined that
this final rule meets the criteria in 5 U.S.C. 804(2).
List of Subjects
33 CFR Part 101
Harbors, Maritime security, Reporting and recordkeeping
requirements, Security measures, Waterways.
33 CFR Part 160
Administrative practice and procedure, Harbors, Hazardous materials
transportation, Marine safety,
[[Page 6447]]
Navigation (water), Personally identifiable information, Reporting and
recordkeeping requirements, Seamen, Vessels, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends
33 CFR parts 101 and 160 as follows:
PART 101--MARITIME SECURITY: GENERAL
0
1. The authority citation for part 101 is revised to read as follows:
Authority: 46 U.S.C. 70101-70104 and 70124; Executive Order
12656, 3 CFR, 1988 Comp., p. 585; 33 CFR 1.05-1, 6.04-11, 6.14,
6.16, and 6.19; Department of Homeland Security Delegation No.
00170.1, Revision No. 01.4.
0
2. Amend part 101 by adding subpart F, consisting of Sec. Sec. 101.600
through 101.670, to read as follows:
Subpart F--Cybersecurity
Sec.
101.600 Purpose.
101.605 Applicability.
101.610 Federalism.
101.615 Definitions.
101.620 Owner or operator.
101.625 Cybersecurity Officer.
101.630 Cybersecurity Plan.
101.635 Drills and exercises.
101.640 Records and documentation.
101.645 Communications.
101.650 Cybersecurity measures.
101.655 Cybersecurity compliance dates.
101.660 Cybersecurity compliance documentation.
101.665 Noncompliance, waivers, and equivalents.
101.670 Severability.
Sec. 101.600 Purpose.
The purpose of this subpart is to set minimum cybersecurity
requirements for U.S.-flagged vessels, facilities, and Outer
Continental Shelf (OCS) facilities to safeguard and ensure the security
and resilience of the Marine Transportation System (MTS).
Sec. 101.605 Applicability.
(a) This subpart applies to the owners and operators of U.S.-
flagged vessels, facilities, and OCS facilities required to have a
security plan under 33 CFR parts 104, 105, and 106.
(b) This subpart does not apply to any foreign-flagged vessels
subject to 33 CFR part 104.
Sec. 101.610 Federalism.
Consistent with Sec. 101.112(b), with respect to a facility
regulated under 33 CFR part 105 to which this subpart applies, the
regulations in this subpart have preemptive effect over a State or
local law or regulation insofar as the State or local law or regulation
applicable to the facility conflicts with these regulations, either by
actually conflicting or by frustrating an overriding Federal need for
uniformity.
Sec. 101.615 Definitions.
Unless otherwise specified, as used in this subpart:
Approved list means an owner or operator's authoritative catalog
for products that meet cybersecurity requirements.
Backup means a copy of physical or virtual files or databases
stored separately for preservation and recovery. It may also refer to
the process of creating a copy.
Credentials means a set of data attributes that uniquely identifies
a system entity such as a person, an organization, a service, or a
device, and attests to one's right to access to a particular system.
Critical Information Technology (IT) or Operational Technology (OT)
systems means any Information Technology (IT) or Operational Technology
(OT) system used by the vessel, facility, or OCS facility that, if
compromised or exploited, could result in a transportation security
incident (TSI), as determined by the Cybersecurity Officer (CySO) in
the Cybersecurity Plan. Critical IT or OT systems include those
business support services that, if compromised or exploited, could
result in a TSI. This term includes systems whose ownership, operation,
maintenance, or control is delegated wholly or in part to any other
party.
Cyber incident means an occurrence that actually jeopardizes,
without lawful authority, the integrity, confidentiality, or
availability of information or an information system, or actually
jeopardizes, without lawful authority, an information system.
Cyber Incident Response Plan means a set of predetermined and
documented procedures to respond to a cyber incident. It is a document
that gives the owner or operator or a designated CySO instructions on
how to respond to a cyber incident and pre-identifies key roles,
responsibilities, and decision-makers.
Cyber threat means an action, not protected by the First Amendment
to the Constitution of the United States, on or through an information
system that may result in an unauthorized effort to adversely impact
the security, availability, confidentiality, or integrity of an
information system or information that is stored on, processed by, or
transiting an information system. The term ``cyber threat'' does not
include any action that solely involves a violation of a consumer term
of service or a consumer licensing agreement.
Cybersecurity Assessment means the appraisal of the risks facing an
entity, asset, system, or network, organizational operations,
individuals, geographic area, other organizations, or society, and
includes identification of relevant vulnerabilities and threats and
determining the extent to which adverse circumstances or events could
result in operational disruption and other harmful consequences.
Cybersecurity Officer, or CySO, means the person designated as
responsible for the development, implementation, and maintenance of the
cybersecurity portions of the Vessel Security Plan (VSP), Facility
Security Plan (FSP), or Outer Continental Shelf (OCS) FSP, and for
liaison with the Captain of the Port (COTP) and Company, Vessel, and
Facility Security Officers. The owner or operator may designate an
alternate CySO(s) to assist with the duties and responsibilities of the
CySO, including during periods when the CySO is on leave, unavailable,
or unable to perform their duties. Hereafter, ``CySO'' will refer to
both the CySO and the alternate CySO(s), as applicable.
Cybersecurity Plan means a plan developed as a part of the VSP,
FSP, or OCS FSP to ensure application and implementation of
cybersecurity measures designed to protect the owners' or operators'
systems and equipment, as required by this part. A Cybersecurity Plan
is either included in a VSP, FSP, or OCS FSP; as an annex to a VSP,
FSP, or OCS FSP; provided in a separate submission from the VSP, FSP,
or OCS FSP; or addressed through an Alternative Security Program.
Cybersecurity risk means threats to and vulnerabilities of
information or information systems and any related consequences caused
by or resulting from unauthorized access, use, disclosure, degradation,
disruption, modification, or destruction of such information or
information systems, including such related consequences caused by an
act of terrorism. It does not include any action that solely involves a
violation of a consumer term of service or a consumer licensing
agreement.
Cybersecurity vulnerability means any attribute of hardware,
software, process, or procedure that could enable or facilitate the
defeat of a security control.
Encryption means any procedure used in cryptography to convert
plain text into cipher text to prevent anyone but the intended
recipient from reading that data.
Executable code means any object code, machine code, or other code
readable by a computer when loaded into its memory and used directly by
such computer to execute instructions.
[[Page 6448]]
Exploitable channel means any information channel (such as a
portable media device and other hardware) that allows for the violation
of the security policy governing the information system and is usable
or detectable by subjects external to the trusted user.
Firmware means computer programs (which are stored in and executed
by computer hardware) and associated data (which is also stored in the
hardware) that may be dynamically written or modified during execution.
Hardware means, collectively, the equipment that makes up physical
parts of a computer, including its electronic circuitry, together with
keyboards, readers, scanners, and printers.
Human-Machine Interface, or HMI, means the hardware or software
through which an operator interacts with a controller for industrial
systems. An HMI can range from a physical control panel with buttons
and indicator lights to an industrial personal computer with a color
graphics display running dedicated HMI software.
Information system means an interconnected set of information
resources under the same direct management control that shares common
functionality. A system normally includes hardware, software data,
applications, communications, and people. It includes the application
of IT, OT, or a combination of both.
Information Technology, or IT, means any equipment or
interconnected system or subsystem of equipment, used in the
acquisition, storage, analysis, evaluation, manipulation, management,
movement, control, display, switching, interchange, transmission, or
reception of data or information.
Known Exploited Vulnerability, or KEV, means a computer
vulnerability that has been exploited in the past.
Log means a record of the events occurring within an organization's
systems and networks.
Multifactor authentication means a layered approach to securing
data and applications for a system that requires users to present more
than one distinct authentication factor for successful authentication.
Multifactor authentication can be performed using a multifactor
authenticator or by a combination of authenticators that provide
different factors. The three authentication factors are something you
know, something you have, and something you are.
Network means information system(s) implemented with a collection
of interconnected components. A network is a collection of computers,
servers, mainframes, network devices, peripherals, or other devices
connected to allow data sharing. A network consists of two or more
computers that are linked in order to share resources, exchange files,
or allow electronic communications.
Network map means a visual representation of internal network
topologies and components.
Network segmentation means a physical or virtual architectural
approach that divides a network into multiple segments, each acting as
its own subnetwork, to provide additional security and control that can
help prevent or minimize the impact of a cyber incident.
Operational Technology, or OT, means programmable systems or
devices that interact with the physical environment (or manage devices
that interact with the physical environment). These systems or devices
detect or cause a change through the monitoring or control of devices,
processes, and events.
Patching means updating software and operating systems to address
cybersecurity vulnerabilities within a program or product.
Penetration test means a test of the security of a computer system
or software application by attempting to compromise its security and
the security of an underlying operating system and network component
configurations.
Principle of least privilege means that an individual should be
given only those privileges that are needed to complete a task.
Further, the individual's function, not identity, should control the
assignment of privileges.
Privileged user means a user who is authorized (and, therefore,
trusted) to perform security functions that ordinary users are not
authorized to perform.
Reportable cyber incident means an incident that leads to or, if
still under investigation, could reasonably lead to any of the
following: Substantial loss of confidentiality, integrity, or
availability of a covered information system, network, or OT system;
Disruption or significant adverse impact on the reporting entity's
ability to engage in business operations or deliver goods or services,
including those that have a potential for significant impact on public
health or safety or may cause serious injury or death; Disclosure or
unauthorized access directly or indirectly of nonpublic personal
information of a significant number of individuals; Other potential
operational disruption to critical infrastructure systems or assets; or
Incidents that otherwise may lead to a transportation security incident
as defined in 33 CFR 101.105.
Risk means a measure of the extent to which an entity is threatened
by a potential circumstance or event, and typically is a function of:
The adverse impact, or magnitude of harm, that would arise if the
circumstance or event occurs; and the likelihood of occurrence.
Software means a set of instructions, data, or programs used to
operate a computer and execute specific tasks.
Supply chain means a system of organizations, people, activities,
information, and resources for creating computer products and offering
IT services to their customers.
Threat means any circumstance or event with the potential to
adversely impact organizational operations (including mission,
functions, image, or reputation), organizational assets, individuals,
other organizations, or the Nation through an information system
through unauthorized access, destruction, disclosure, modification of
information, or denial of service.
Vulnerability means a characteristic or specific weakness that
renders an organization or asset (such as information or an information
system) open to exploitation by a given threat or susceptible to a
given hazard.
Vulnerability scan means a technique used to identify hosts or host
attributes and associated vulnerabilities.
Sec. 101.620 Owner or operator.
(a) Each owner or operator of a U.S.-flagged vessel, facility, or
OCS facility is responsible for compliance with the requirements of
this subpart.
(b) For each U.S.-flagged vessel, facility, or OCS facility, the
owner or operator must--
(1) Ensure a Cybersecurity Plan is developed, approved, and
maintained;
(2) Define in Section 1 of the Cybersecurity Plan the cybersecurity
organizational structure and identify each person exercising
cybersecurity duties and responsibilities within that structure, with
the support needed to fulfill those obligations;
(3) Designate, in writing, by name and by title, a Cybersecurity
Officer (CySO) who is accessible to the Coast Guard 24 hours a day, 7
days a week, and identify how the CySO can be contacted at any time;
(4) Ensure that cybersecurity exercises, audits, and inspections,
as well as the Cybersecurity Assessment, are conducted as required by
this part and in accordance with the Cybersecurity Plan (see Sec.
101.625(d)(1), (3), (6) and (7));
(5) Ensure that the U.S.-flagged vessel, facility, or OCS facility
operates in
[[Page 6449]]
compliance with the approved Cybersecurity Plan;
(6) Ensure the development, approval, and execution of the Cyber
Incident Response Plan; and
(7) For entities that have not reported to the Coast Guard pursuant
to, or are not subject to, 33 CFR 6.16-1, ensure all reportable cyber
incidents are reported to the National Response Center (NRC).
Sec. 101.625 Cybersecurity Officer.
(a) Other duties. The Cybersecurity Officer (CySO) may serve in
other roles or positions and may perform other duties within the
owner's or operator's organization (U.S.-flagged vessel, facility, or
OCS facility), provided the person is able to perform the duties and
responsibilities required of the CySO by this part.
(b) Serving as CySO for Multiple Vessels, Facilities, or OCS
Facilities. The same person may serve as the CySO for more than one
U.S.-flagged vessel, facility, or OCS facility. If a person serves as
the CySO for more than one U.S.-flagged vessel, facility, or OCS
facility, the name of each U.S.-flagged vessel, facility, or OCS
facility for which that person is the CySO must be listed in the
Cybersecurity Plan of each U.S.-flagged vessel, facility, or OCS
facility for which that person is the CySO.
(c) Assigning Duties Permitted. The CySO may assign security duties
to other U.S.-flagged vessel, facility, or OCS facility personnel;
however, the CySO retains ultimate responsibility for these duties.
(d) Responsibilities. For each U.S.-flagged vessel, facility, or
OCS facility for which they are designated, the CySO must--
(1) Ensure that the Cybersecurity Assessment is conducted as
required by this part;
(2) Ensure the cybersecurity measures in the Cybersecurity Plan are
developed, implemented, and operating as intended;
(3) Ensure that an annual audit of the Cybersecurity Plan and its
implementation is conducted and, if necessary, ensure that the
Cybersecurity Plan is updated;
(4) Ensure the Cyber Incident Response Plan is executed and
exercised;
(5) Ensure the Cybersecurity Plan is exercised in accordance with
Sec. 101.635(c);
(6) Arrange for cybersecurity inspections, which may be conducted
as their own inspections, or in conjunction with any scheduled Coast
Guard inspection of a U.S.-flagged vessel, facility, or OCS facility;
(7) Ensure the prompt correction of problems identified by
exercises, audits, or inspections;
(8) Enhance the cybersecurity awareness and vigilance of personnel;
(9) Ensure adequate cybersecurity training of personnel;
(10) Ensure all reportable cyber incidents are recorded and
reported to the owner or operator;
(11) Ensure that records required by this part are maintained in
accordance with Sec. 101.640;
(12) Ensure any reports as required by this part have been prepared
and submitted;
(13) Ensure that the Cybersecurity Plan, as well as proposed
amendments to cybersecurity measures included in the Plan, are
submitted for approval to the cognizant COTP or the Officer in Charge,
Marine Inspections (OCMI) for facilities or OCS facilities, or to the
Marine Safety Center (MSC) for U.S.-flagged vessels, prior to amending
the Cybersecurity Plan, in accordance with Sec. 101.630;
(14) Ensure relevant security and management personnel are briefed
regarding changes in cybersecurity conditions on board the U.S.-flagged
vessel, facility, or OCS facility; and
(15) Ensure identification and mitigation of all KEVs in critical
IT or OT systems, without delay.
(e) Qualifications. The CySO must have general knowledge, through
training, education, or equivalent job experience, in the following:
(1) General vessel, facility, or OCS facility operations and
conditions;
(2) General cybersecurity guidance and best practices;
(3) The vessel, facility, or OCS facility's Cyber Incident Response
Plan;
(4) The vessel, facility, or OCS facility's Cybersecurity Plan;
(5) Cybersecurity equipment and systems;
(6) Methods of conducting cybersecurity audits, inspections,
control, and monitoring techniques;
(7) Relevant laws and regulations pertaining to cybersecurity;
(8) Instruction techniques for cybersecurity training and
education;
(9) Handling of Sensitive Security Information and security related
communications;
(10) Current cybersecurity threat patterns and KEVs;
(11) Recognizing characteristics and behavioral patterns of persons
who are likely to threaten security; and
(12) Conducting and assessing cybersecurity drills and exercises.
Sec. 101.630 Cybersecurity Plan.
(a) General. The CySO must develop, implement, and verify a
Cybersecurity Plan for U.S.-flagged vessels, facilities, or OCS
facilities. The Cybersecurity Plan must reflect all cybersecurity
measures required in this subpart, as appropriate, to mitigate risks
identified during the Cybersecurity Assessment. The Plan must describe
in detail how the requirements of subpart F will be met. The
Cybersecurity Plan may be included in a VSP, FSP, or an OCS FSP; as an
annex to the VSP, FSP, or OCS FSP; as part of an approved Alternative
Security Program; or may be provided in a separate submission from the
VSP, FSP, or OCS FSP.
(b) Protecting sensitive security information. The Cybersecurity
Plan is sensitive security information and must be protected in
accordance with 49 CFR part 1520.
(c) Format. The owner or operator must ensure that the
Cybersecurity Plan consists of the individual sections listed in this
paragraph. If the Cybersecurity Plan does not follow the order as it
appears on the list, the owner or operator must ensure that the Plan
contains an index identifying the location of each of the following
sections:
(1) Cybersecurity organization and identity of the CySO;
(2) Personnel training;
(3) Drills and exercises;
(4) Records and documentation;
(5) Communications;
(6) Cybersecurity systems and equipment, with associated
maintenance;
(7) Cybersecurity measures for access control, including the
computer, IT, and OT access areas;
(8) Physical security controls for IT and OT systems;
(9) Cybersecurity measures for monitoring;
(10) Audits and amendments to the Cybersecurity Plan;
(11) Reports of all cybersecurity audits and inspections, to
include documentation of resolution or mitigation of all identified
vulnerabilities;
(12) Documentation of all identified, unresolved vulnerabilities,
to include those that are intentionally unresolved due to owner or
operator risk acceptance;
(13) Cyber incident reporting procedures in accordance with part
101 of this subchapter; and
(14) Cybersecurity Assessment.
(d) Submission and approval. Each owner or operator must submit one
copy of their Cybersecurity Plan for review and approval to the
cognizant COTP or the OCMI for a facility or OCS facility, or to the
MSC for a U.S.-flagged vessel.
[[Page 6450]]
(1) The COTP, OCMI, or MSC will evaluate each submission for
compliance with this part, and either--
(i) Approve the Cybersecurity Plan and return a letter to the owner
or operator indicating approval and any conditional approval;
(ii) Require additional information or revisions to the
Cybersecurity Plan and return a copy to the owner or operator with a
brief description of the required revisions or additional information;
or
(iii) Disapprove the Cybersecurity Plan and return a copy to the
owner or operator with a brief statement of the reasons for
disapproval.
(iv) If the cognizant COTP, OCMI, or MSC requires additional time
to review the Plan, they may return a written acknowledgement to the
owner or operator stating that the Coast Guard will review the
Cybersecurity Plan submitted for approval, and that the U.S.-flagged
vessel, facility, or OCS facility may continue to operate as long as it
remains in compliance with the submitted Cybersecurity Plan.
(2) Owners or operators submitting one Cybersecurity Plan to cover
two or more U.S.-flagged vessels, facilities, or OCS facilities of
similar operations must ensure the Plan addresses the specific
cybersecurity risks for each U.S.-flagged vessel, facility, or OCS
facility.
(3) A Plan that is approved by the COTP, OCMI, or MSC is valid for
5 years from the date of its approval.
(e) Amendments to the Cybersecurity Plan. (1) Amendments to a Coast
Guard-approved Cybersecurity Plan must be initiated by either--
(i) The owner or operator or the CySO; or
(ii) When the COTP, OCMI, or MSC finds that the Cybersecurity Plan
no longer meets the requirements in this part, the Plan will be
returned to the owner or operator with a letter explaining why the Plan
no longer meets the requirements and requires amendment. The owner or
operator will have at least 60 days to submit its proposed amendments.
Until the amendments are approved, the owner or operator must ensure
temporary cybersecurity measures are implemented to the satisfaction of
the Coast Guard.
(2) Proposed amendments to the Cybersecurity Plan must be sent to
the Coast Guard at least 30 days before the proposed amendment's
effective date. The Coast Guard will approve or disapprove the proposed
amendment in accordance with this part.
(i) Nothing in this section should be construed as limiting the
owner or operator of the U.S.-flagged vessel, facility, or OCS facility
from the timely implementation of such additional security measures not
enumerated in the approved VSP, FSP, or OCS FSP as necessary to address
exigent security situations.
(ii) In such cases, the owner or operator must notify the cognizant
COTP for a facility or OCS facility, or the MSC for U.S.-flagged
vessels, by the most rapid means practicable as to the nature of the
additional measures, the circumstances that prompted these additional
measures, and the period of time these additional measures are expected
to be in place.
(3) If the owner or operator has changed, the CySO must amend the
Cybersecurity Plan as soon as reasonably practicable in light of the
individual circumstances, but, in any case, not longer than 96 hours,
to include the name and contact information of the new owner or
operator and submit the affected portion of the Plan for review and
approval in accordance with this part.
(4) If the CySO has changed, the Coast Guard must be notified as
soon as reasonably practicable in light of the individual
circumstances, but, in any case, not longer than 96 hours, and the
affected portion of the Cybersecurity Plan must be amended and
submitted to the Coast Guard for review and approval in accordance with
this part as soon as reasonably practicable in light of the individual
circumstances, but, in any case, not longer than 96 hours.
(f) Audits. (1) The CySO must ensure that an audit of the
Cybersecurity Plan and its implementation is performed annually,
beginning no later than 1 year from the initial date of approval. The
CySO must attach a report to the Plan certifying that the Plan meets
the applicable requirements of this subpart.
(2) In addition to the annual audit, the CySO must ensure that an
audit of the Cybersecurity Plan occurs if there is a change in the
owner or operator of the U.S.-flagged vessel, facility, or OCS
facility, or if there have been modifications to the cybersecurity
measures, including, but not limited to, physical access, incident
response procedures, security measures, or operations.
(3) Additional audits of the Cybersecurity Plan as a result of
modifications to the U.S.-flagged vessel, facility, or OCS facility, or
because of changes to the cybersecurity measures in accordance with
paragraph (f)(2) of this section, may be limited to those sections of
the Plan affected by the modifications.
(4) Personnel conducting internal audits of the cybersecurity
measures specified in the Plan or evaluating its implementation must--
(i) Have knowledge of methods of conducting audits and inspections,
as well as access control and monitoring techniques;
(ii) Not have regularly assigned cybersecurity duties for the U.S.-
flagged vessel, facility, or OCS facility being audited; and
(iii) Be independent of any cybersecurity measures being audited.
(5) If the results of an audit require amending the Cybersecurity
Plan, the CySO must submit, in accordance with this part, the
amendments to the Coast Guard for review and approval no later than 30
days after completion of the audit.
Sec. 101.635 Drills and exercises.
(a) General. (1) Drills and exercises must be used to test the
proficiency of the U.S.-flagged vessel, facility, and OCS facility
personnel in assigned cybersecurity duties and the effective
implementation of the VSP, FSP, OCS FSP, and Cybersecurity Plan. The
drills and exercises must enable the CySO to identify any related
cybersecurity deficiencies that need to be addressed.
(2) The drill or exercise requirements specified in this section
may be satisfied with the implementation of cybersecurity measures
required by the VSP, FSP, OCS FSP, and Cybersecurity Plan as the result
of a cyber incident, as long as the U.S.-flagged vessel, facility, or
OCS facility achieves and documents attainment of drill and exercise
goals for the cognizant COTP.
(b) Drills. (1) The CySO must ensure that cybersecurity drills are
conducted at least twice each calendar year. Cybersecurity drills may
be held in conjunction with other security or non-security drills, as
required by 33 CFR 104.230, 105.220, or 106.225, where appropriate.
(2) Drills must test individual elements of the Cybersecurity Plan,
including responses to cybersecurity threats and incidents.
Cybersecurity drills must take into account the types of operations of
the U.S.-flagged vessel, facility, or OCS facility; changes to the
U.S.-flagged vessel, facility, or OCS facility personnel; the type of
vessel a facility is serving; and other relevant circumstances.
(3) If a vessel is moored at a facility on a date a facility has
planned to conduct any drills, the facility cannot require the vessel
or vessel personnel to be a part of or participate in the facility's
scheduled drill.
(c) Exercises. (1) Exercises must be conducted at least once each
calendar
[[Page 6451]]
year, with no more than 18 months between exercises.
(2) Exercises may be--
(i) Full-scale or live;
(ii) Tabletop simulation;
(iii) Combined with other appropriate exercises as required by 33
CFR 104.230, 105.220, or 106.225; or
(iv) A combination of the elements in paragraphs (c)(2)(i) through
(iii) of this section.
(3) Exercises may be vessel-, facility-, or OCS facility-specific,
or part of a cooperative exercise program to exercise applicable
vessel, facility, and OCS facility Cybersecurity Plans or comprehensive
port exercises.
(4) Each exercise must test communication and notification
procedures and elements of coordination, resource availability, and
response.
(5) Exercises are a full test of the cybersecurity program and must
include the substantial and active participation of the CySO(s).
(6) If any corrective action identified during an exercise is
needed, it must be addressed and documented as soon as possible.
Sec. 101.640 Records and documentation.
All records, reports, and other documents mentioned in this subpart
must be created and maintained in accordance with 33 CFR 104.235 for
U.S.-flagged vessels, 105.225 for facilities, and 106.230 for OCS
facilities. At a minimum, the records must be created for the following
activities: training, drills, exercises, cybersecurity threats,
reportable cyber incidents, and audits of the Cybersecurity Plan.
Sec. 101.645 Communications.
(a) The CySO must have a means to effectively notify owners or
operators and personnel of a U.S.-flagged vessel, facility, or OCS
facility of changes in cybersecurity conditions at the U.S.-flagged
vessel, facility, and OCS facility and document these means in Section
5 of the Cybersecurity Plan.
(b) Communication systems and procedures must allow effective and
continuous communications between U.S.-flagged vessel, facility, and
OCS facility security personnel, vessels interfacing with a facility or
an OCS facility, the cognizant COTP, and national and local authorities
with security responsibilities.
Sec. 101.650 Cybersecurity measures.
(a) Account security measures. Each owner or operator of a U.S.-
flagged vessel, facility, or OCS facility must ensure, at a minimum,
the following account security measures are in place and documented in
Section 7 of the Cybersecurity Plan:
(1) Automatic account lockout after repeated failed login attempts
must be enabled on all password-protected IT systems;
(2) Default passwords must be changed before using any IT or OT
systems. When changing default passwords is not feasible, appropriate
compensating security controls must be implemented and documented;
(3) A minimum password strength must be maintained on all IT and OT
systems that are technically capable of password protection;
(4) Multifactor authentication must be implemented on password-
protected IT and remotely accessible OT systems. When multifactor
authentication is not feasible, appropriate compensating security
controls must be implemented and documented;
(5) The principle of least privilege must be applied to
administrator or otherwise privileged accounts on both IT and OT
systems;
(6) The owner or operator must ensure that users maintain separate
credentials on critical IT and OT systems; and
(7) The owner or operator must ensure that user credentials are
removed or revoked when a user leaves the organization.
(b) Device security measures. Each owner or operator or designated
CySO of a U.S.-flagged vessel, facility, or OCS facility must ensure
the following device security measures are in place, addressed in
Section 6 of the Cybersecurity Plan, and made available to the Coast
Guard upon request:
(1) Develop and maintain a list of approved hardware, firmware, and
software that may be installed on IT or OT systems. Any hardware,
firmware, and software installed on IT and OT systems must be on the
owner- or operator-approved list;
(2) Ensure applications running executable code are disabled by
default on critical IT and OT systems;
(3) Maintain an accurate inventory of network-connected systems,
including designation of critical IT and OT systems; and
(4) Develop and maintain accurate documentation identifying the
network map and OT device configuration information.
(c) Data security measures. Each owner or operator or designated
CySO of a U.S.-flagged vessel, facility, or OCS facility must ensure
the following data security measures are in place and documented in
Section 4 of the Cybersecurity Plan:
(1) Logs must be securely captured, stored, and protected so that
they are accessible only by privileged users; and
(2) Effective encryption must be deployed to maintain
confidentiality of sensitive data and integrity of IT and OT traffic,
when technically feasible.
(d) Cybersecurity training for personnel. The training program to
address requirements under this paragraph must be documented in
Sections 2 and 4 of the Cybersecurity Plan.
(1) All personnel with access to the IT or OT systems, including
contractors, whether part-time, full-time, temporary, or permanent,
must have cybersecurity training in the following topics:
(i) Relevant provisions of the Cybersecurity Plan;
(ii) Recognition and detection of cybersecurity threats and all
types of cyber incidents;
(iii) Techniques used to circumvent cybersecurity measures;
(iv) Procedures for reporting a cyber incident to the CySO; and
(v) OT-specific cybersecurity training for all personnel whose
duties include using OT.
(2) Key personnel with access to the IT or remotely accessible OT
systems, including contractors, whether part-time, full-time,
temporary, or permanent, must also have cybersecurity training in the
following additional topics:
(i) Understanding their roles and responsibilities during a cyber
incident and response procedure; and
(ii) Maintaining current knowledge of changing cybersecurity
threats and countermeasures.
(3) When personnel must access IT or OT systems but are unable to
receive cybersecurity training as specified in paragraphs (d)(1) and
(2) of this section, they must be accompanied or monitored by a person
who has completed the training specified in paragraphs (d)(1) and (2)
of this section.
(4) All personnel must complete the training specified in
paragraphs (d)(1)(ii) through (v) of this section by January 12, 2026,
and annually thereafter. Key personnel must complete the training
specified in paragraph (d)(2) of this section by January 12, 2026, and
annually thereafter, or more frequently as needed. Training for new
personnel not in place at the time of the effective date of this rule
must be completed within 5 days of gaining system access, but no later
than within 30 days of hiring, and annually thereafter. Training for
personnel on new IT or OT systems not in place at the time of the
effective date of this rule must be completed within 5 days of system
access, and
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annually thereafter. All personnel must complete the training specified
in paragraph (d)(1)(i) within 60 days of receiving approval of the
Cybersecurity Plan. The training must be documented and maintained in
the owner's or operator's records in accordance with 33 CFR 104.235 for
U.S.-flagged vessels, 105.225 for facilities, and 106.230 for OCS
facilities.
(e) Risk management. Each owner or operator or designated CySO of a
U.S.-flagged vessel, facility, or OCS facility must ensure the
following measures for risk management are in place and documented in
Sections 11 and 12 of the Cybersecurity Plan:
(1) Cybersecurity Assessment. Each owner or operator or designated
CySO of a U.S.-flagged vessel, facility, or OCS facility must ensure
completion of a Cybersecurity Assessment that addresses each covered
U.S.-flagged vessel, facility, and OCS facility. A Cybersecurity
Assessment must be conducted no later than July 16, 2027, and annually
thereafter. However, the Cybersecurity Assessment must be conducted
sooner than annually if there is a change in ownership of a U.S.-
flagged vessel, facility, or OCS facility. In conducting the
Cybersecurity Assessment, the owner or operator must--
(i) Analyze all networks to identify vulnerabilities to critical IT
and OT systems and the risk posed by each digital asset;
(ii) Validate the Cybersecurity Plan;
(iii) Document recommendations and resolutions in the Vessel
Security Assessment (VSA), Facility Security Assessment (FSA), or OCS
FSA, in accordance with 33 CFR 104.305, 105.305, and 106.305;
(iv) Document and ensure patching or implementing of documented
compensating controls for all KEVs in critical IT or OT systems,
without delay; and
(v) Incorporate recommendations and resolutions from paragraph
(e)(1)(iii) of this section into the Cybersecurity Plan through an
amendment, in accordance with Sec. 101.630(e).
(2) Penetration testing. In conjunction with Cybersecurity Plan
renewal, the owner, operator, or designated CySO must ensure that a
penetration test has been completed. Following the penetration test, a
letter certifying that the test was conducted, as well as all
identified vulnerabilities, must be included in the VSA, FSA, or OCS
FSA, in accordance with 33 CFR 104.305, 105.305, and 106.305.
(3) Routine system maintenance. Each owner or operator or a
designated CySO of a U.S.-flagged vessel, facility, or OCS facility
must ensure the following measures for routine system maintenance are
in place and documented in Section 6 of the Cybersecurity Plan:
(i) Ensure patching or implementation of documented compensating
controls for all KEVs in critical IT or OT systems, without delay;
(ii) Maintain a method to receive and act on publicly submitted
vulnerabilities;
(iii) Maintain a method to share threat and vulnerability
information with external stakeholders;
(iv) Ensure there are no exploitable channels directly exposed to
internet-accessible systems;
(v) Ensure no OT is connected to the publicly accessible internet
unless explicitly required for operation, and verify that, for any
remotely accessible OT system, there is a documented justification; and
(vi) Conduct vulnerability scans as specified in the Cybersecurity
Plan.
(f) Supply chain. Each owner or operator or designated CySO of a
U.S.-flagged vessel, facility, or OCS facility must ensure the
following supply-chain measures are in place and documented in Section
4 of the Cybersecurity Plan:
(1) Consider cybersecurity capability as criteria for evaluation to
procure IT and OT systems or services;
(2) Establish a process through which all IT and OT vendors or
service providers notify the owner or operator or designated CySO of
any cybersecurity vulnerabilities or reportable cyber incidents,
without delay; and
(3) Monitor and document all third-party remote connections to
detect cyber incidents.
(g) Resilience. Each owner or operator or designated CySO of a
U.S.-flagged vessel, facility, or OCS facility must ensure the
following measures for resilience are in place and documented in
Sections 3 and 9 of the Cybersecurity Plan:
(1) For entities that have not reported to the Coast Guard pursuant
to, or not subject to, 33 CFR 6.16-1, report reportable cyber incidents
to the NRC without delay;
(2) In addition to other plans mentioned in this subpart, develop,
implement, maintain, and exercise the Cyber Incident Response Plan;
(3) Periodically validate the effectiveness of the Cybersecurity
Plan through annual exercises, annual reviews of incident response
cases, or post-cyber incident review, as determined by the owner or
operator; and
(4) Perform backup of critical IT and OT systems, with those
backups being sufficiently protected and tested frequently.
(h) Network segmentation. Each owner or operator or designated CySO
of a U.S.-flagged vessel, facility, or OCS facility must ensure the
following measures for network segmentation are in place and documented
in Sections 7 and 8 of the Cybersecurity Plan:
(1) Implement segmentation between IT and OT networks; and
(2) Verify that all connections between IT and OT systems are
logged and monitored for suspicious activity, breaches of security,
TSIs, unauthorized access, and cyber incidents.
(i) Physical security. Each owner, operator, or designated CySO of
a U.S.-flagged vessel, facility, or OCS facility must ensure the
following measures for physical security are in place and documented in
Sections 7 and 8 of the Cybersecurity Plan:
(1) In addition to any other requirements in this part, limit
physical access to OT and related IT equipment to only authorized
personnel, and confirm that all HMIs and other hardware are secured,
monitored, and logged for personnel access; and
(2) Ensure unauthorized media and hardware are not connected to IT
and OT infrastructure, including blocking, disabling, or removing
unused physical access ports, and establishing procedures for granting
access on a by-exception basis.
Sec. 101.655 Cybersecurity compliance dates.
All Cybersecurity Plans mentioned in this subpart must be submitted
to the Coast Guard for review and approval no later than July 16, 2027,
according to 33 CFR 104.410 for U.S.-flagged vessels, 33 CFR 105.410
for facilities, or 33 CFR 106.410 for OCS facilities.
Sec. 101.660 Cybersecurity compliance documentation.
Each owner or operator must ensure that the cybersecurity portion
of their Plan and penetration test results are available to the Coast
Guard upon request. The Alternative Security Program provisions apply
to cybersecurity compliance documentation and are addressed in 33 CFR
104.140 for vessels, 33 CFR 105.140 for facilities, and 33 CFR 106.135
for OCS facilities.
Sec. 101.665 Noncompliance, waivers, and equivalents.
An owner or operator, after completion of the required
Cybersecurity Assessment, may seek a waiver or an equivalence
determination for the requirements in subpart F using the standards and
submission
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procedures applicable to a U.S.-flagged vessel, facility, or OCS
facility as outlined in 33 CFR 101.130, 104.130, 104.135, 105.130,
105.135, 106.125, or 106.130. If an owner or operator must temporarily
deviate from the requirements in this part, they must notify the
cognizant COTP for facilities or OCS facilities, or the MSC for U.S.-
flagged vessels, and may request temporary permission to continue to
operate under the provisions as outlined in 33 CFR 104.125, 105.125, or
106.120.
Sec. 101.670 Severability.
Any provision of this subpart held to be invalid or unenforceable
as applied to any person or circumstance shall be construed so as to
continue to give the maximum effect to the provision permitted by law,
including as applied to persons not similarly situated or to dissimilar
circumstances, unless such holding is that the provision of this
subpart is invalid and unenforceable in all circumstances, in which
event the provision shall be severable from the remainder of this
subpart and shall not affect the remainder thereof.
PART 160--PORTS AND WATERWAYS SAFETY--GENERAL
0
3. The authority citation for part 160 is revised to read as follows:
Authority: 46 U.S.C. 70001-70003, 70034, and Chapter 701; DHS
Delegation 00170.1, Revision No. 01.4. Subpart C is also issued
under the authority of 46 U.S.C. 3715 and 46 U.S.C. 70011.
0
4. Amend Sec. 160.202 by revising the definition for Hazardous
condition to read as follows:
Sec. 160.202 Definitions.
* * * * *
Hazardous condition means any condition that may adversely affect
the safety of any vessel, bridge, structure, or shore area or the
environmental quality of any port, harbor, or navigable waterway of the
United States. It may, but need not, involve collision, allision, fire,
explosion, grounding, leaking, damage, cyber incident, injury or
illness of a person aboard, or manning-shortage.
* * * * *
Dated: January 8, 2025.
Linda Fagan,
Admiral, U.S. Coast Guard, Commandant.
[FR Doc. 2025-00708 Filed 1-13-25; 4:15 pm]
BILLING CODE 9110-04-P