Netherlands: New Cybersecurity Obligations On The Way For Essential Service Providers

After nearly three years of intensive negotiations, the first comprehensive cybersecurity legislation in the EU is nearing its final adoption. The EU Network and Information Security Directive will establish a cybersecurity cooperation infrastructure between EU member states and introduce information security obligations for operators of vital services and key digital service providers. These entities will be required to implement appropriate technical and organisational measures to prevent and minimise the impact of network and information incidents, demonstrate effective implementation of security policies, and notify serious cyber incidents to competent authorities. Businesses operating in key sectors of the economy, such as energy, transport, financial market infrastructures, and health and digital infrastructures, should be aware of these new obligations and update their cybersecurity policies and processes.

After successful negotiations, the Council of the European Union adopted the EU Network and Information Security Directive (NIS Directive) on 17 May 2016, and the European Commission supported the Council's proposal in first reading two weeks later. The final sign-off by the European Parliament is expected in early July and the directive is expected to enter into force in August 2016.  Member states will have 21 months to implement the directive in their national laws and an additional six months to designate the businesses that will be subject to the directive.

The NIS Directive aims to ensure a high common level of cybersecurity throughout the EU. The directive will create a Cooperation Group composed of representatives of member states, the European Commission and the EU Agency for Network and Information Security (ENISA). The Cooperation Group will support and facilitate strategic cooperation and information exchange. For supervision, monitoring, risk and incident handling, and operational cooperation on specific information incidents, the member states must designate national competent authorities, single points of contact and national Computer Security Incidents Response Teams (CSIRTs).

The NIS Directive will further establish certain obligations for two categories of market players: operators of essential services and digital service providers.

Operators of essential services

Organisations operating within specified sectors listed in annex II to the directive may qualify as an operator of essential services. Those sectors include:

  • electricity, oil and gas (for example, oil storage and transmission operators)
  • air, rail, water or road transport (for example, passenger and freight transport companies or railway infrastructure managers)
  • banking (for example, credit institutions)
  • financial market infrastructure (for example, stock exchanges or CCPs)
  • health (for example, hospitals and other health care providers)
  • drinking water supply and distribution (for example, water suppliers and distributors)
  • digital infrastructure (for example, internet exchange points and domain name systems providers)

Within those sectors, the member states will define specific public or private entities that fall under the directive, based on the following criteria:

  • they provide a service that is essential for the maintenance of critical societal and/or economic activities
  • this service depends on network and information systems
  • an incident could have significant disruptive effects on the provision of that service.

The directive specifically requires member states to exempt organisations that are already subject to sector-specific EU regulatory regimes that provide equivalent obligations regarding security of networks and reporting incidents (for example, certain organisations in the water transport sector or some banking and financial market infrastructures).

Different regime for digital service providers (DSP)

The directive will apply differently to digital service providers. Other than in the case of operators of essential services, the directive does not offer discretion to member states to determine which digital service providers will be subject to the new requirements. The directive will apply to all operators (except for micro and small enterprises) that provide:

  • online marketplaces
  • online search engines
  • cloud computing services.

Digital service providers that operate in multiple EU member states will only be subject to the national rules implementing the directive in the state of their main establishment in the EU (in principle, the location of their EU head office). DSP that have their main establishment outside the EU can be subject to the NIS Directive if they offer their services within the EU.

Obligation to implement appropriate cybersecurity measures

Entities that qualify as operators of essential services or DSP must take appropriate technical and organisational measures to manage the risks posed to the security of their network and information systems. Furthermore, they must implement measures to prevent and minimise the impact of security incidents, with a view to ensuring the continuity of those services. For operators of essential services, the member states will further specify in their implementing acts what measures should be taken and what measures are appropriate for specific providers or categories of providers. For DSP, this will be further specified by the European Commission.

National competent authorities will in any event have powers to require the operators of essential services to:

  • provide information necessary to assess the security of their network and information systems, including documented security policies
  • provide evidence of the effective implementation of security policies, such as independent security audits
  • execute binding instructions issued by competent authorities to remedy the deficiencies identified in their operations

In contrast, DSP will not be required to provide evidence of effective security policies implementation or execute binding instructions of national competent authorities. But they will be required to specifically address in their implementing measures such aspects as security of systems and facilities, incident handling, business continuity management, monitoring and auditing, and compliance with international standards. In addition, DSP must remedy any failure to meet security and incident notification requirements if so instructed by the national competent authority.

Obligation to report cybersecurity incidents

Operators of essential services and DSP must notify the competent authority or the CSIRT "without undue delay" of any incident that has a significant impact on the continuity of the essential services they provide. Only the incidents that have an actual adverse effect on the security of the network and information system must be reported. In assessing the significance and impact of the incident, the operators must evaluate:

  • the number of users affected
  • the duration of the incident
  • the geographical spread of the incident.

DSP should in addition assess the extent of the disruption to the functioning of the service and how it impacts economic and societal activities. However, a DSP is obliged to notify an incident only where the provider has access to the information needed to assess the impact of an incident against all the above criteria.

Confidentiality of notification

Without further elaboration, the directive specifies that notification of cyber incidents should not expose the notifying party to increased liability. The notified competent authority or the CSIRT can decide to share information about the incident with other member states affected by the incident. In this connection, the NIS Directive states that the security, commercial interests and confidentiality of the operator's information should be protected. Ways to ensure this include limiting exchange of information to information that is necessary for application of the directive, relevant and proportionate to the purpose of the exchange. But it is unclear how exactly these provisions will operate in practice.

In addition, the authorities may inform the public about individual incidents. They may do so where public awareness is needed to prevent an incident or handle an ongoing incident. The directive provides for prior consultation of the notifying operator in this case, but does not elaborate on how the operator's interests would be balanced against the public interest and what the operator's remedies are to stop information about the incident from being published.

Implementation in the Netherlands

In the Netherlands, the exact implementing measures for the NIS Directive have not been announced yet. However, in anticipation of the directive, the Dutch government has introduced a legislative proposal that would cover at least the incident notification requirements for operators of services that are vital to Dutch society. The Cybersecurity Breach Notification Bill introduces mandatory notifications of serious security breaches or loss of integrity of vital electronic information systems. The explanatory memorandum identifies the same vital industries as provided under the NIS Directive, but also includes the telecom and nuclear sectors. However, the critical infrastructure list has not been finalised yet. As under the NIS Directive, further regulation must identify specific companies that meet the 'vital provider' definition.

Effect on businesses

The NIS Directive will mostly impact businesses that qualify as essential service operators or DSPs – both in and outside the EU. It is suggested that businesses operating in the industries mentioned above closely monitor the national implementation measures taken by member states where the businesses are established or active. This enables them to establish whether they will be listed as an operator of essential services and what the exact scope of their new obligations will be.

We further recommend these businesses to consider adopting appropriate cybersecurity policies and implement risk-based incident response procedures. In addition, they should review and update their agreements with third parties, where necessary. This is because the directive explicitly states that the security and incident reporting applies to the operators of essential services and DSP regardless whether they perform the maintenance of their network and information systems internally or outsource it.

Finally, businesses can verify whether they already have information security or incident reporting duties under other EU or national legislation. For instance, a security incident notification obligation already exists under personal data protection laws in some member states and will apply EU-wide once the new EU General Data Protection Regulation comes into force. We note that there may be overlap in notification obligations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions