The Federal Information Processing Standard (FIPS) Publication 140-2, (FIPS PUB 140-2), is a U.S. government computer security standard used to approve cryptographic modules. Basically, FIPS 140-2 defines what cryptographic algorithms and strengths are acceptable for transmitting sensitive data.
Federal agencies and departments can validate that the module in use is covered by an existing FIPS 140-2 certificate that specifies the exact module name, hardware, software, firmware, and/or applet version numbers. The cryptographic modules are produced by the private sector or open source communities for use by the U.S. government and other regulated industries (such as financial and health-care institutions) that collect, store, transfer, share and disseminate sensitive but unclassified (SBU) information. A commercial cryptographic module is also commonly referred to as a hardware security module (HSM).
What does FIPS 140-2 determine?
The standard allows a product to use reliable security applications, such as encryption algorithms and methods. It also determines how individuals or other processes should be empowered to use the product and how to design modules and components to integrate securely into other systems.
FIPS 140-2 defines four levels of security, simply named “Level 1” to “Level 4”.*
Level 3
In addition to the tamper-evident physical security mechanisms required at Security Level 2, Security Level 3 attempts to prevent the intruder from gaining access to CSPs held within the cryptographic module. Physical security mechanisms required at Security Level 3 are intended to have a high probability of detecting and responding to attempts at physical access, use or modification of the cryptographic module. The physical security mechanisms may include the use of strong enclosures and tamper-detection/response circuitry that zeroes all plaintext CSPs when the removable covers/doors of the cryptographic module are opened.
*Source:https://en.wikipedia.org/wiki/FIPS_140-2