Ransomware Victims May Now Face Federal Fines

On October 1st, 2020 the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) released an advisory on potential consequences for facilitating payments to groups running ransomware operations.

OFAC's Advisory on Potential Sanctions Risks for Facilitating Ransomware Payments states that victims of ransomware, along with, “companies that facilitate ransomware payments to cyber actors on behalf of victims, including financial institutions, cyber insurance firms, and companies involved in digital forensics and incident response,” could face fines from the US government for paying, or assisting a company in paying, ransom demands to certain sanctioned groups. OFAC specially calls out several cyber actors designated under its cyber-related sanctions program, including the developer of Cryptolocker, Iranians associated with SamSam, the North Korean sponsored Lazarus Group linked to WannaCry 2.0 and the Russia-based Evil Corp responsible for Dridex.

This appears to be an attempt to both encourage ransomware victims to report incidents to the government and dissuade companies from paying ransoms to groups that have been identified as threats to national security interests. Paying cyber criminals enables them to advance their criminal operations, encourages future attacks and, “fund activities adverse to the national security and foreign policy objectives of the United States.”   

Ransomware victims often meet their attacker’s payment demands since it can be less costly and time-consuming compared to rebuilding their network and attempting to make up for lost business records and data, some of which recovery of is critical to business operations.

The OFAC advisory also states that civil penalties may be imposed based on, “strict liability,” meaning that companies may be held liable for payments made to sanctioned groups or individuals, even if it was unknown that the adversary engaged with had been placed under sanctions. However, OFAC does state that disclosing cyber incidents to law enforcement and cooperating with U.S. agencies in the aftermath would be considered when deciding sanctions related to ransom payments.

About Schneider Downs Cybersecurity

The Schneider Downs cybersecurity practice consists of experts offering a comprehensive set of information technology security services, including penetration testing, intrusion prevention/detection review, ransomware security, vulnerability assessments and a robust digital forensics and incident response team. For more information, visit www.schneiderdowns.com/cybersecurity or contact the team at [email protected]. 

In addition, our Incident Response Team is available 24x7x365 at 1-800-993-8937 if you suspect or are experiencing a network incident.