What is NIS2? Understanding the EU's Cybersecurity Directive and Its Implications

What is NIS2?

NIS2, short for the Network and Information Security Directive 2, is an updated legislative framework adopted by the European Union in 2023. It builds on the original NIS Directive from 2016, aiming to address emerging cyber threats and inconsistencies in member states’ cybersecurity capabilities.

NIS2 raises the bar by imposing more rigorous cybersecurity and risk management obligations on a broader range of organizations. Its goal is to ensure a high common level of cybersecurity across the EU.

What Does NIS2 Apply To?

One of the most frequently asked questions is: what does NIS2 apply to?

NIS2 applies to both essential and important entities in sectors considered critical to societal and economic functions. This includes:

• Essential sectors: energy, transport, banking, financial market infrastructures, health, drinking water, digital infrastructure, public administration.

• Important sectors: postal and courier services, waste management, food production, chemicals, space, and manufacturing of critical products like medical devices or electronics.

Medium and large entities operating in these sectors, whether public or private, are covered under the directive. It also applies to key digital service providers such as cloud platforms, data centers, and content delivery networks.

What is NIS2 Directive?

So, what is NIS2 directive exactly?

The NIS2 Directive is a legal framework that requires covered entities to implement specific technical and organizational measures to prevent, detect, and respond to cyber incidents. These measures include:

• Conducting regular cybersecurity risk assessments

• Implementing secure network architecture

• Ensuring robust supply chain security

• Establishing business continuity and disaster recovery plans

• Reporting significant incidents within 24 hours to national authorities

NIS2 also enhances cooperation between EU member states through the European Cyber Crises Liaison Organisation Network (EU-CyCLONe) and mandates the establishment of national Computer Security Incident Response Teams (CSIRTs).

What is NIS2 Compliance?

Now let’s explore what is NIS2 compliance.

To be compliant, organizations must align with the directive’s core obligations, which typically involve:

• Documenting and maintaining risk management strategies

• Training personnel in cybersecurity awareness

• Reporting incidents and vulnerabilities in a timely manner

• Keeping detailed logs of cybersecurity policies and procedures

• Participating in audits or inspections by national supervisory authorities

Failure to achieve NIS2 compliance can expose organizations to severe consequences, not just from regulatory fines but also through increased cyber risk exposure.

What are the penalties for non-compliance with NIS2? The directive introduces strict enforcement and financial penalties for those who fail to meet the requirements. These can include:

• Fines of up to €10 million or 2% of global annual revenue, whichever is higher

• Temporary bans on executives or decision-makers

• Orders to implement corrective actions or suspend services

• Public disclosure of non-compliance, damaging brand reputation

Management-level staff can also be held personally liable in cases of gross negligence or willful violation.

Final Thoughts

In light of the rising cost of cybercrime — $16.6 billion globally in 2024 — understanding what is NIS2, what is NIS2 directive, and what does NIS2 apply to is no longer optional for EU-based organizations. Achieving NIS2 compliance is essential not only to avoid what are the penalties for non-compliance with NIS2, but also to safeguard your operations, reputation, and customer trust.

The time to act is now. Preparing early for NIS2 can position your organization as a leader in cybersecurity resilience.

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