The White House released on November 15, 2017 the Vulnerabilities Equities Policy and Process for the United States Government (“VEP”) — the process by which the Government determines whether to disseminate or restrict information about new, nonpublic vulnerabilities that it discovers.  This release was motivated by criticism following the allegations that significant cyber-attacks have exploited vulnerabilities withheld by the Government, concerns that the Government is exploiting vulnerabilities instead of alerting vendors to fix them, and general calls for transparency in the process.

According to the newly-released documents, the VEP is overseen by an Executive Secretariat (a role filled by the National Security Agency) and the final decision about whether to disseminate or restrict vulnerability information is made by an interagency Equities Review Board (“ERB”).  The VEP is initiated when an agency submits a newly discovered and not publicly known vulnerability and provides its recommendation on whether to disseminate or restrict the information.  Any other agencies claiming an equity in the vulnerability must concur or disagree with the recommendation.  The ERB considers the opinions, renders a final decision, and the vulnerability is either disseminated or restricted.

The ERB’s determinations are based on the balancing of four groups of equities: (1) defensive; (2) intelligence, law enforcement, and operational; (3) commercial; and (4) international partnership.  Specific considerations include: whether and how threat actors will exploit the vulnerability, the potential harm caused by exploitation, the likelihood of effective mitigation, whether the vulnerability can be exploited to serve an intelligence or law enforcement purpose, and risks to the Government’s relationship with industry and international relations.

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Photo of David Fagan David Fagan

David Fagan co-chairs the firm’s top ranked practices on cross-border investment and national security matters, including reviews conducted by the Committee on Foreign Investment in the United States (CFIUS), and data privacy and cybersecurity.

Mr. Fagan has been recognized by Chambers USA and…

David Fagan co-chairs the firm’s top ranked practices on cross-border investment and national security matters, including reviews conducted by the Committee on Foreign Investment in the United States (CFIUS), and data privacy and cybersecurity.

Mr. Fagan has been recognized by Chambers USA and Chambers Global for his leading expertise on bet-the-company CFIUS matters and has received multiple accolades for his work in this area, including twice being named Dealmaker of the Year by The American Lawyer for 2016 and 2019. Clients laud him for providing “excellent advice,” “know[ing] everything there is to know about CFIUS” and being “extremely well regarded” by key regulators. (Chambers USA)

In the foreign investment and national security area, Mr. Fagan is known for his work on matters requiring the mitigation of foreign ownership, control or influence (FOCI) under applicable national industrial security regulations, including for many of the world’s leading aerospace and defense firms, private equity firms, and sovereign investors, as well as telecommunications transactions that undergo a public safety, law enforcement, and national security review by the group of agencies known as “Team Telecom.”

Mr. Fagan’s practice covers representations of both foreign and domestic companies before CFIUS and related national security regulators. The representations encompass matters in which the principal assets are in the United States, as well as those in which there is a smaller U.S. nexus but where solving for the CFIUS issues – including through proactive mitigation and carve-outs – is a critical path for the transaction. Mr. Fagan is also routinely called upon to rescue transactions that have run into challenges in CFIUS, and to negotiate solutions with the U.S. government that protect national security interests, while preserving shareholder and U.S. business interests.

Reflecting his work on U.S.-China investment issues and his experience on complex U.S. national security matters intersecting with China, Mr. Fagan is regularly engaged by multi-national companies, including the world’s leading technology companies, to advise on strategic legal projects, including supply chain matters, related to their positioning in the emerging competition between the U.S. and China. Mr. Fagan also has testified before a congressional commission regarding U.S. national security, trade, and investment matters with China.

In the privacy and data security area, Mr. Fagan has counseled companies on responding to some of the most sophisticated documented cyber-based attacks on their networks and information, including the largest documented infrastructure attacks, as well as data security incidents involving millions of affected consumers. He has been engaged by boards of directors of Fortune 500 companies to counsel them on cyber risk and to lead investigations into cyber attacks, and he has responded to investigations and enforcement actions from the Federal Trade Commission (FTC) and state attorneys general. Mr. Fagan has also helped clients respond to ransomware attacks, insider theft, vendor breaches, hacktivists, state-sponsored attacks affecting personal data and trade secrets, and criminal organization attacks directed at stealing personal data, among other matters.

In addition, he routinely counsels clients on preparing for and responding to cyber-based attacks on their networks and information, enhancing their supply chain and product development practices, assessing their security controls and practices for the protection of data, developing and implementing information security programs, and complying with federal and state regulatory requirements. He also frequently advises clients on transactional matters involving the transfer of personal data.