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Hefty fines confirmed for CNI providers with poor cyber security

The government has confirmed that critical infrastructure providers with poor cyber security face fines of millions of pounds as the National Cyber Security Centre publishes new guidance for the industry

The government is warning the UK’s most critical industries to boost cyber security or face hefty fines for leaving themselves vulnerable to attack.

Energy, transport, water, health and other critical services firms could be fined up to £17m if they fail to have the most robust safeguards in place against cyber attack after May this year.

The fines are part of a new package of measures the government is introducing to implement the European Union’s (EU’s) Network and Information Systems (NIS) Directive. 

The new measures follow the consultation in 2017 by the Department for Digital, Culture, Media and Sport (DCMS) seeking views from industry on how to implement the NIS Directive from 10 May 2018.

The government has announced that new regulators will be able to assess critical industries to make sure plans are as robust as possible.

The government claims a “simple, straightforward” reporting system will be set up to make it easy to report cyber breaches and IT failures so they can be quickly identified and acted upon.

This is aimed at ensuring ensure UK operators in electricity, transport, water, energy, transport, health and digital infrastructure are prepared to deal with the increasing numbers of cyber threats.

Read more about the NIS Directive

  • With cyber crime on the rise, the European Union is trying to fight back with its NIS Directive.
  • Coming European legislation on network and information security could have cost and organisational implications for a range of UK companies.
  • EU legislators and member states agree a text for new cyber security rules that will introduce mandatory data breach notification.
  • The EU data notification law will mean most UK organisations will have to change their approach to data breaches, according to legal firm Olswang.

The new measures also cover other threats affecting IT such as power outages, hardware failures and environmental hazards.

Under the new measures recent cyber breaches such as WannaCry and high profile systems failures would be covered by the NIS Directive.

These incidents would have to be reported to the regulator who would assess whether appropriate security measures were in place. The regulator will have the power to issue legally-binding instructions to improve security, and – if appropriate – impose financial penalties.

The new measures, which relate to loss of service by IT networks and information systems, will be introduced around the same time as new UK data protection legislation that will also provide for fines of up to £17m for failure to take adequate measure to protect personal data.

Margot James, minister for digital and the creative industries said the new and robust cyber security measures are aimed at ensuring the UK is the safest place in the world to live and be online. “We want our essential services and infrastructure to be primed and ready to tackle cyber attacks and be resilient against major disruption to services.

“I encourage all public and private operators in these essential sectors to take action now and consult the National Cyber Security Centre’s advice on how they can improve their cyber security,” she said.

Guidance on security measures

The NCSC has published detailed guidance on the security measures to help organisations comply. These are based around 14 key principles set out in the government’s consultation and government response, and are aligned with existing cyber security standards.

NCSC chief Ciaran Martin said the new guidance will give clear advice on what organisations need to do to implement essential cyber security measures. “Network and information systems give critical support to everyday activities, so it is absolutely vital that they are as secure as possible,” he said.

The government notes the fines would be a last resort and will not apply to operators which have assessed the risks adequately, taken appropriate security measures and engaged with regulators but still suffered an attack.

Following the consultation, incident reporting arrangements have been simplified, with operators reporting to their Competent Authority. Penalties will be fixed at a maximum of £17m and the new legislation will be made clearer for companies to know whether they have to comply with the NIS Directive.

The government said that the measures to implement the NIS Directive will ensure essential service operator are implementing robust cyber defences, and are an important part of the UK’s five-year £1.9bn National Cyber Security Strategy to protect the nation from cyber threats and make the UK the safest place to live and work online.

Freedom of information

In August 2017, freedom of information (FOI) requests by Corero Network Security revealed that 39% of CNI organisations in the UK have not completed the government’s 10 Steps to Cyber Security programme, with 42% of NHS Trusts who responded admitting they had not completed the programme.

The FOI findings suggest many critical infrastructure suppliers are not as cyber resilient as they should be in the face of growing and sophisticated cyber threats, and that they are not doing enough to address distributed denial of service (DDoS) attacks, in particular.

The NIS Directive has largely gone unnoticed, according to Simon Shooter, a partner specialising in cyber security at international law firm Bird & Bird.

“While most businesses are squaring up to the challenges of GDPR compliance, the NIS Directive appears on few agendas,” he told Computer Weekly.

“Given that operators of essential services, including the defined Digital Service Providers, face the prospect of sanctions equal to those in the GDPR, compliance with the NIS Directive should be high on the priority list,” said Shooter.

Resilient infrastructure

According to the UK’s technology trade association TechUK, it is important the country’s critical infrastructure remains resilient to the growing cyber threat.

“That is why we welcome the robust plan put forward by the government for the implementation of the NIS Directive,” said Talal Rajab, head of programme, cyber and national security at TechUK

“More work still needs to be done, particularly with the 10 May deadline looming large, including the need for further details on the resources being made available to the various Competent Authorities and their respective legislative powers,” he said.

However, Rajab said TechUK is particularly pleased to see that detailed guidance has already been published by the NCSC on the security measures that organisations’ need to adopt in order to comply.

“Operators of essential services must act now and take heed of this guidance, ensuring the essential services we rely on are cyber resilient and secure,” he said.

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