As many readers will be aware, the EU’s new cybersecurity directive, NIS2, imposes security, incident notification, and governance obligations on entities in a range of critical sectors, including energy, transport, finance, health, and digital infrastructure (for an overview of NIS2, see our previous post here). One of the main reasons the Commission proposed these new rules was the inconsistent ways in which Member States had implemented requirements under the prior directive, NIS. To help improve harmonization further, the Commission has now issued two guidance documents to help assess when NIS2 or sector-specific requirements apply, and to ensure that registration requirements are consistent across the Union.
Continue Reading European Commission Publishes Guidance on NIS2: Interplay with Sector-Specific Laws
critical infrastructure
International Cybersecurity Authorities Issue Joint Advisory on Russian Cyber Threats to Critical Infrastructure
On April 20, 2022, the cybersecurity authorities of the United States, Australia, Canada, New Zealand, and the United Kingdom—the so-called “Five Eye” governments—announced the publication of Alert AA22-110A, a Joint Cybersecurity Advisory (the “Advisory”) warning critical infrastructure organizations throughout the world that the Russian invasion of Ukraine could expose them “to increased malicious cyber activity from Russian state-sponsored cyber actors or Russian-aligned cybercrime groups.” The Advisory is intended to update a January 2022 Joint Cybersecurity Advisory, which provided an overview of Russian state-sponsored cyber operations and tactics, techniques, and procedures (“TTPs”).
In its announcement, the authorities urged critical infrastructure network defenders in particular “to prepare for and mitigate potential cyber threats by hardening their cyber defenses” as recommended in the Advisory.
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CISA Issues Voluntary Information Sharing Guidance for Critical Infrastructure Owners and Operators and Provides Resources for All
On April 7, 2022, the U.S. Cybersecurity & Infrastructure Security Agency (“CISA”) announced the publication of its Sharing Cyber Event Information Fact Sheet (“Fact Sheet”) intended to provide clear guidance to critical infrastructure owners and operators and government partners on voluntary information sharing about “unusual cyber incidents or activity.” In its announcement, CISA explained that it will use the information provided to fill “critical information gaps,” deploy resources, analyze trends, issue warnings, and “build a common understanding of how adversaries are targeting U.S. networks and critical infrastructure sectors.”
CISA’s announcement of the Fact Sheet encourages entities to visit its Shields Up website for more information; the Shields Up website was recently updated with guidance in response to the heightened risk of Russian cyber attacks. The Shields Up website recommends that “all organizations—regardless of size—adopt a heightened posture when it comes to cybersecurity and protecting their most critical assets” and provides detailed guidance that entities can use to protect themselves.
Continue Reading CISA Issues Voluntary Information Sharing Guidance for Critical Infrastructure Owners and Operators and Provides Resources for All
China Initiates Cybersecurity Review of Didi ChuXing and Three Other Chinese Mobile Applications
On July 2 and July 5, 2021, China’s Cybersecurity Review Office (“CRO”), an office established under the Cyberspace Administration of China (“CAC”) responsible for coordinating the implementation of China’s Cybersecurity Review framework (more details about this framework can be found in our previous blogpost, available here), announced that it had initiated cybersecurity reviews against four mobile applications operated by three Chinese companies: Didi Chuxing (“Didi”), Yunmanman, Huochebang and BOSS Zhipin (announcements are available here and here).
According to CRO’s announcements, these cybersecurity reviews were initiated based on requirements under the National Security Law (“NSL”), the Cybersecurity Law (“CSL”) and the Measures on Cybersecurity Review (“Measures”) and are aimed at “preventing national data security risks, maintaining national security and safeguarding public interests.” This is the first time that CRO publically announced the initiation of cybersecurity reviews against companies after the Measures took effect on June 1, 2020. Per the announcements, these apps are prohibited from registering new user accounts during the review period.
Separately, on July 4, CAC ordered the Didi app to be removed from Chinese app stores on the ground that the app seriously violated Chinese laws and regulations by “illegally collecting and using personal information” (the announcement is available here). It is unclear whether this “take down” order is related to CRO’s ongoing cybersecurity review of Didi.
This post explains the requirements and procedures of cybersecurity review under the Measures, analyzes the focus of the current review against these three companies, and provides more background on recent enforcement actions against apps illegally collecting and processing personal information.
Continue Reading China Initiates Cybersecurity Review of Didi ChuXing and Three Other Chinese Mobile Applications
China Issues New Measures on Cybersecurity Review of Network Products and Services
On April 27, 2020, the Cyberspace Administration of China (“CAC”) and other eleven government agencies jointly released the final version of the Measures on Cybersecurity Review (“Measures”) (an official Chinese version of the Measures is available here). These Measures will take effect on June 1, 2020.
Under Article 35 of China’s Cybersecurity Law (“CSL”), operators of Critical Information Infrastructure (“CII”) are required to undergo a security review if the procurement of “network products and services” implicates China’s national security. To implement this requirement, CAC previously released the Measures on the Security Review of Network Products and Services (Trial) (“Trial Measures”) on May 2, 2017, which established a process for CAC to conduct a cybersecurity review in a range of key sectors. On May 24, 2019, CAC released a draft version of the Measures (“Draft Measures”) for public comment (see our post on the Draft Measures here), aiming to update the review process established under the Trial Measures. The final version of the Measures replaces the Trial Measures and largely tracks the framework proposed in the Draft Measures.
Highlights of the final version of the Measures appear below.
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China Releases Updated Draft Encryption Law for Public Comment
On July 5, 2019, China’s Standing Committee of the National People’s Congress (NPC) published a new draft Encryption Law (“the draft Law”) for public comment. The draft Law, if enacted as drafted, would bring significant new changes to China’s commercial encryption regime.
The State Cryptography Administration (“SCA”) previously issued an initial draft of this law for public comment on April 13, 2017 (“the 2017 Draft”) (see Covington’s alert on the previous version here). After the release of the 2017 draft, the regulatory regime in China for commercial encryption products was revamped significantly (see Covington’s previous alert here). The State Council removed certain approval requirements for the production, sale, and use of commercial encryption products in late September 2017, and the SCA issued further notices reducing the burden imposed on manufacturers, distributors and users of commercial encryption products. The draft Law proposes further changes to this revamped regime, including for example introducing different categories of encryption, and establishing license requirements for certain imports and exports, while carving out items in “general use.”
The comment period ends on September 2, 2019.Continue Reading China Releases Updated Draft Encryption Law for Public Comment
FERC Approves New Cybersecurity Standards for Supply Chain Risk Management
The Federal Energy Regulatory Commission (“FERC”) released a final rule approving three new Critical Infrastructure Protection (“CIP”) standards which address supply chain risk management for bulk electric systems (“BES”) operations. The new standards were developed by the North American Electric Reliability Corporation (“NERC”) in response to FERC Order No. 829, which directed NERC to create new CIP standards to address risks associated with the supply chain for grid-related cyber systems. The final rule will take effect sixty days after it is published in the Federal Register. The new standards must be implemented in eighteen months. More details regarding the new CIP standards, which may be of interest to entities that develop, implement, or maintain hardware or software for industrial control systems associated with bulk electric systems (“BES”), are provided below.
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UK Government Proposes Cybersecurity Law with Serious Fines
Earlier this month, the UK Government published a consultation on plans to implement the EU Directive on security of network and information systems (the “NIS Directive”, otherwise known as the Cybersecurity Directive). The consultation includes a proposal to fine firms that fail to implement “appropriate and proportionate security measures” up to EUR 20 million or 4% of global turnover (whichever is greater).
We summarise the UK Government’s plans below, including which organisations may be in scope — for example, in the energy, transport and other sectors, as well as online marketplaces, online search engines, and cloud computing service providers — and the proposed security and incident reporting obligations.
Organisations that are interested in responding to the consultation have until September 30, 2017 to do so. The UK Government will issue a formal response within 10 weeks of this closing date, and publish further security guidance later this year and next. A further consultation on incident reporting for digital service providers will be run later this year; the Government invites organisations that are interested in taking part to provide appropriate contact details.
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China Seeks Public Comments on Draft Regulation on Cross-Border Data Transfer
On April 11, 2017, the Cyberspace Administration of China (“CAC”) released a draft of the Measures on Security Assessment of Cross-border Data Transfer of Personal Information and Important Data (“the Draft Measures”) for public comment (official Chinese version available here). The comment period ends on May 11, 2017.
The issuance of the long-anticipated Draft Measures is another critical step toward implementing China’s Cybersecurity Law (“the Law”), which is set to take effect on June 1, 2017 (see our alert on the Law here). Importantly, the Draft Measures, if enacted in its current form, would mandate all “network operators” to self-assess the security of their cross-border data transfers and significantly broaden the scope of entities that potentially need to undergo security assessments for such transfers by the Chinese government. Companies that fall into the scope of “network operators,” but may not qualify for “operators of Critical Information Infrastructure” (“CII”), could see their cross-border data transfers regulated under the Draft Measures.
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EU Cyber Security Directive To Enter Into Force In August
The EU Network and Information Security (NIS) Directive now looks likely to enter into force in August of this year. Member States will then have 21 months to implement it into national law before the new security and incident notification obligations will start to apply to the following entities:
- designated* “operators of essential services” within the energy, transport, banking, financial market infrastructures, health, drinking water supply and distribution, and digital infrastructure sectors; and
- certain “digital service providers” that offer services within the EU, namely online market places, online search engines and cloud computing services, excluding small/micro enterprises.
* Once implemented in national law, Member States will have a further 6 months to apply criteria laid down in the Directive to identify specific operators of essential services covered by national rules; they do not need to undertake this exercise in relation to digital service providers, which shall be deemed to be under the jurisdiction of the Member State in which it has its “main establishment” (i.e., its head office in the Union).
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