pci-dss-encryption-key-management

name

pci-dss-encryption-key-management

description

Audits PCI-DSS v4.0 Requirement 3 (protect stored account data) and Requirement 4 (protect cardholder data with strong cryptography during transmission)—covering key management lifecycle, HSM usage, PAN masking, tokenization, and TLS 1.2+ enforcement with Terraform/Vault MCP patterns for evidence collection. Trigger when assessing encryption of CHD/SAD at rest or in transit, reviewing key rotation and split knowledge, validating tokenization scope reduction, or scanning IaC for crypto misconfigurations. Do not use for network segmentation (use pci-dss-network-segmentation), payment-page script inventory (use pci-dss-script-audit), or general IAM without crypto focus (use access-control-identity-audit).

PCI-DSS Encryption and Key Management

Overview

This skill implements PCI-DSS v4.0 Requirements 3 and 4 for protecting account data at rest and in transit. These requirements apply to all systems that store, process, or transmit cardholder data (CHD) or sensitive authentication data (SAD).

Requirement 3 — Protect stored account data:

Sub-requirement	Focus
3.1	Processes and mechanisms for protecting stored account data
3.2	SAD storage prohibited after authorization (full track, CVV, PIN)—never store post-auth
3.3	PAN masking when displayed (show first six/last four max per PCI guidance)
3.4	PAN rendered unreadable anywhere stored (encryption, hashing, tokenization, truncation)
3.5	Key management procedures documented and implemented
3.6	Cryptographic keys protected against disclosure and misuse
3.7	Key management documented for keys used to protect stored account data

Requirement 4 — Protect CHD during transmission:

Sub-requirement	Focus
4.1	Processes for strong cryptography during transmission over open, public networks
4.2	PAN protected with strong cryptography during transmission
4.2.1	Inventory of trusted keys and certificates
4.2.2	Wireless networks transmitting PAN use strong cryptography

Key management lifecycle (Req 3.6–3.7): generation, distribution, storage, rotation, retirement, destruction. HSMs (Hardware Security Modules) or cloud KMS (AWS KMS, Azure Key Vault, GCP Cloud KMS) are standard for production PAN encryption.

This skill integrates Terraform MCP (mcp/terraform.mcp.json) and HashiCorp Vault patterns per references/compliance-as-code-patterns.md and compliance-as-code-governance.

When to Use

Use this skill when:

• Scoping encryption for databases, logs, backups, and agent evidence stores touching CHD
• Auditing key rotation, dual control, and split knowledge (Req 3.6)
• Validating tokenization architecture for scope reduction
• Reviewing TLS configuration on payment endpoints, APIs, and MCP transport (Req 4.2)
• Scanning Terraform/IaC for unencrypted RDS, S3, or cleartext PAN fields
• Assessing whether compliance agent/MCP logs or Postgres evidence DB contain PAN

Do not use this skill when:

• Firewall/CDE segmentation (use pci-dss-network-segmentation)
• Checkout JavaScript and Req 6.4.3 (use pci-dss-script-audit)
• HIPAA ePHI encryption without CHD (use hipaa-technical-safeguards)
• California consumer privacy rights (use ccpa-cpra-privacy-rights)

Core Process

Execute steps in order.

Step 1: Account data inventory (Req 3.1)

1. Locate all CHD and SAD: databases, flat files, logs, backups, crash dumps, agent session stores, MCP query results.
2. Classify storage:

Location	PAN present?	Protection method	In CDE?
Payment DB	Yes	AES-256 + KMS	Yes
Agent evidence Postgres	Must be No	Token only	Assess scope
Application logs	Must be No	Masking/redaction	Varies

3. CRITICAL: Any PAN in agent/MCP logs expands PCI scope—scan with synthetic test PAN patterns.
4. Artifact: account-data-inventory-{id}.csv.

Step 2: SAD and display controls (Req 3.2, 3.3)

1. Verify no SAD stored after authorization—query schemas for track data, CVV, PIN fields.
2. Review UI and admin consoles for PAN masking (max first six and last four for issuer identification).
3. Verify agent tools and deanonymize_response cannot expose full PAN without business justification and logging.
4. FAIL if full PAN appears in Slack MCP notifications or evidence exports.

Step 3: PAN unreadable at rest (Req 3.4)

1. For each PAN storage location, verify one of:
   • Strong cryptography (AES-256 with per-record or envelope encryption)
   • One-way hash (with salt, for non-reversible use cases only)
   • Tokenization (irreversible token with secure token vault)
   • Truncation (if no storage of full PAN required)
2. Prohibit reversible encoding (Base64 alone) as "encryption."
3. Verify encryption keys are not stored alongside encrypted PAN (same DB table, same S3 object metadata unprotected).

Step 4: Key management procedures (Req 3.5–3.7)

Document and test:

1. Key generation — cryptographically secure RNG; HSM/KMS where feasible.
2. Key distribution — secure channels; no keys in git, Slack, or agent prompts.
3. Key storage — HSM, KMS, or Vault with access logging.
4. Key rotation — periodic rotation per crypto period (typically annual or on compromise); document calendar.
5. Key retirement — secure destruction/archival when keys expire.
6. Split knowledge / dual control — minimum two people for critical key operations (Req 3.6.1.2).
7. Artifact: key-management-procedures-{id}.pdf with version and approver.

Step 5: HSM and KMS validation

1. Inventory all key stores:

System	Key type	FIPS 140-2/3 validated?	Access control
AWS KMS	DEK/CMK	Level 2+ (KMS)	IAM roles
HashiCorp Vault	Transit keys	Depends on backend	Vault policies
On-prem HSM	Master keys	Level 3 typical	M of N admin

2. Verify KMS/Vault policies enforce least privilege—cross-ref access-control-identity-audit.
3. Verify audit logs for key use—cross-ref audit-logging-integrity (PCI Req 10 overlap).
4. Test: unauthorized identity cannot decrypt or export key material.

Step 6: Tokenization assessment

1. Document tokenization flow: PAN → token vault → token returned to application/agent.
2. Verify agent and MCP see tokens only, not PAN—supports scope reduction with pci-dss-network-segmentation.
3. Validate token vault meets Req 3.4–3.7 (same rigor as PAN encryption).
4. Verify detokenization is restricted, logged, and not available via MCP without approval.

Step 7: Transmission security (Req 4.1, 4.2)

1. Inventory all channels transmitting PAN: HTTPS checkout, API, internal service mesh, MCP transport.
2. Verify TLS 1.2 or higher; disable SSLv3, TLS 1.0/1.1 (Req 4.2, industry standard).
3. Review cipher suites—prefer forward secrecy (ECDHE); disable weak ciphers.
4. Maintain certificate inventory (Req 4.2.1): expiry monitoring, trusted CA chain, no self-signed in production payment paths.
5. Test with SSL Labs or openssl s_client from authorized probe; store results.
6. MCP compliance: TLS 1.2+ for all MCP server connections per mcp-compliance-integration.

Step 8: Terraform/Vault MCP evidence collection

1. Configure Terraform MCP read-only against state backend:

   // mcp/terraform.mcp.json — read-only plan/state
   

2. Scan for violations:
   • RDS/SQL without storage_encrypted = true
   • S3 buckets with CHD tags lacking encryption
   • ALB/listeners allowing TLS 1.0
   • Secrets in plaintext Terraform variables
3. Vault MCP (if deployed): export policy list showing who can read transit keys—never export key material via MCP.
4. Integrate Checkov/tfsec rules from compliance-as-code-governance—map to PCI 3.4, 4.2.
5. Hash scan outputs for evidence manifest.

Step 9: Findings and remediation

1. Severity guide:
   • CRITICAL: Cleartext PAN in logs/agent store; SAD stored post-auth; TLS 1.0 on payment path
   • HIGH: Missing key rotation; keys in source control; no dual control on HSM
   • MEDIUM: Certificate expiry monitoring gap; incomplete key inventory
2. Emit standard finding YAML with control_id: PCI-3.4 or PCI-4.2.

Common Rationalizations

Excuse the agent might generate	Required rebuttal
"We tokenize at the gateway, so Req 3 doesn't apply to our app."	If any system stores/processes PAN, Req 3 applies—tokenization must cover all PAN locations including logs.
"TLS terminates at the load balancer; backend HTTP is internal."	Internal networks are not exempt if PAN traverses them—encrypt or segment per Req 4 and Req 1.
"KMS manages keys, so we don't need documented procedures."	Req 3.5–3.7 require documented procedures for human processes around KMS—managed service ≠ procedural compliance.
"Agent only sees tokens occasionally—we don't audit that path."	Any PAN exposure path is in scope—MCP Postgres queries must be proven token-only.
"Vault dev mode is fine for staging."	Staging with real PAN patterns requires production-equivalent crypto—dev mode Vault is a CRITICAL finding if CHD present.
"Base64 encoding protects PAN in the database."	Encoding is not encryption—Req 3.4 requires strong cryptography or approved alternative.

Red Flags

• Full PAN or CVV in application, agent, or MCP logs
• Encryption keys in git repository or agent skill files
• TLS 1.0/1.1 enabled on payment or PAN API endpoints
• RDS/database storage encryption disabled in Terraform state
• Tokenization bypass API returns PAN to agent tools without audit
• No key rotation evidence for >12 months
• Single person can generate, distribute, and activate production keys (no dual control)
• Vault or KMS decrypt permission granted to broad * IAM role
• SAD retained in database after authorization completes

Verification

• Account data inventory complete including agent/MCP/log locations
• SAD storage verified absent post-authorization (Req 3.2)
• PAN masking validated on all display and notification paths (Req 3.3)
• All PAN at rest rendered unreadable per Req 3.4 with method documented
• Key management procedures documented covering full lifecycle (Req 3.5–3.7)
• HSM/KMS/Vault access controls and audit logging verified
• Tokenization flow documented; agent/MCP confirmed token-only
• TLS 1.2+ verified on all PAN transmission paths (Req 4.2)
• Certificate inventory and expiry monitoring operational (Req 4.2.1)
• Terraform MCP / Checkov scan completed with findings remediated or tracked
• Evidence manifest with SHA-256 hashes and PCI control ID mapping