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BRIEFING: European Union's Network and Information Systems (NIS) Directive

Updated: Apr 5, 2023

The European Union's Network and Information Systems (NIS) Directive lays out comprehensive requirements for third-party risk management in the EU. The Directive requires operators of essential services and digital service providers to take appropriate measures to manage the risks posed by third parties to the security of their systems and services. This article explores the key requirements for third-party risk management according to NIS:

  1. Conducting risk assessments

  2. Establishing policies and procedures for managing third-party risks

  3. Implementing measures to ensure the security of third-party systems and services

  4. Regularly monitoring and reviewing the performance of third parties

  5. Providing regular training and awareness to third parties about their responsibilities for security and the risks posed by their activities

  6. Reporting incidents involving third parties to the relevant national authorities.



The recent data breach that occurred at the German software company in January 2022 was the result of a malicious attack on one of the company's third-party service providers, which resulted in unauthorized access to sensitive customer data. The breach affected a significant number of Software AG's customers and highlighted the importance of managing third-party risks effectively.


Incidents like this, underscores the importance of organizations taking the necessary steps to manage the risks posed by third parties to the security of their systems and services. This includes conducting regular risk assessments, implementing appropriate security measures, and providing regular training and awareness to third parties about their responsibilities for security. By taking these steps, organizations can reduce the risk of data breaches and ensure the security of their sensitive information.



 

NIS Directive Key Requirements

The key requirements for third-party risk management outlined in the European Union's Network and Information Systems (NIS) Directive are as follows:

  1. Conducting risk assessments: Organizations must conduct regular risk assessments to identify and evaluate the risks posed by their third-party relationships. This includes evaluating the security and privacy practices of third parties, as well as their security and privacy incidents history.

  2. Establishing policies and procedures: Organizations must establish policies and procedures for managing third-party risks, including the selection, onboarding, and ongoing monitoring of third-party relationships.

  3. Implementing measures to ensure security: Organizations must implement appropriate security measures to secure the systems and services provided by third parties. This includes measures such as encryption, access controls, and network segmentation.

  4. Regular monitoring and review: Organizations must regularly monitor and review the performance of third parties and take appropriate action to address any security or privacy concerns.

  5. Providing training and awareness: Organizations must provide regular training and awareness to third parties about their responsibilities for security and the risks posed by their activities.

  6. Reporting incidents: Organizations must report incidents involving third parties to the relevant national authorities, as well as take appropriate steps to mitigate the impact of such incidents on their systems and services.

By following these requirements, organizations can effectively manage the risks posed by their third-party relationships and ensure the security of their systems and services in line with the NIS Directive's provisions.


Which companies are impacted by DORA?

The Network and Information Systems (NIS) Directive (NIS2) applies to a wide range of companies and industries in the European Union (EU) that provide critical infrastructure services and digital services. Some of the companies and industries that are impacted by NIS2 include:

  1. Energy: Companies that provide energy supply, distribution, and transmission services.

  2. Transport: Organizations that provide transport services, including air, sea, and land transport.

  3. Banking and finance: Financial institutions, such as banks and insurance companies, that provide financial services.

  4. Health: Healthcare organizations, including hospitals and clinics, that provide medical services and use digital systems to support these services.

  5. Digital services: Companies that provide digital services, such as cloud computing and online marketplaces, that are critical to the functioning of the EU's digital economy.

  6. Water: Organizations that provide water supply and treatment services.

  7. Telecommunications: Telecommunications companies that provide communication services, including mobile and fixed-line services.

In general, any company or industry that provides critical infrastructure services and digital services in the EU is likely to be impacted by NIS2 and must comply with its provisions to ensure the security and resilience of these services.

How Trudexia can help


To meet the NIS Directive's requirements, organizations must ensure that they have robust processes in place for managing third-party risks. In addition, organizations must report incidents involving third parties to the relevant national authorities. This helps to ensure that relevant information is shared and that authorities are able to respond effectively to potential threats.


Trudexia ...


In conclusion, the NIS Directive's requirements for third-party risk management are critical for ensuring the security of digital systems and services in the EU. Organizations must be proactive in managing these risks and be prepared to respond quickly and effectively to incidents involving third parties.


Trudexia’s solution makes managing risks posed by third parties and makes meeting the NIS Directive's requirements with few resources or time.

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