Penalties for non-compliance with NIS2: what businesses need to know

The NIS2 Directive (Network and Information Security Directive 2) is a decisive step for the European Union to enhance cybersecurity across Europe and address the growing dangers of cyber attacks.

Recent reports, such as the one from the Federal Office for Information Security (BSI) in Germany, reveal a worrying trend: vulnerabilities in IT systems have increased by 14 per cent compared to the previous year.

According to the report, threat types range from executing malicious code and manipulating application data to circumventing protection mechanisms and switching off entire services — a broad spectrum, which can cause significant damage to organizations worldwide.

The NIS2 Directive aims to remedy this. However, it isn't just a recommendation—it’s a strict directive with clear security standards and significant penalties for non-compliance. Organizations must act now to avoid costly fines and reputational damage.

What is the scope of the NIS2 Directive?

The NIS2 Directive significantly broadens the scope of the original 2016 NIS Directive. It applies to a large number of sectors that are critical to both public safety and economic stability. These include:

• Critical infrastructures: energy, transport, banking, health, digital infrastructure
• Important entities: postal and courier services, waste management, food production

The extended scope requires a wide range of businesses and organizations to implement robust cybersecurity measures to ensure the security and integrity of their networks and information systems.

It’s not just large enterprises that need to worry – small and medium-sized businesses providing essential services are also included. The  focus is particularly on companies that provide critical infrastructure, digital services, and essential public services, all of which are vital for maintaining public order and economic stability.

Penalties for non-compliance with NIS2

The penalties for failing to comply with NIS2 are severe — and they can seriously affect your bottom line. Depending on the size and sector of your organization, the consequences may include:

• Critical entities: fines of up to 10 million Euros or 2% of the global annual turnover
• Important organizations: fines of up to 7 million Euros or 1.4% of the global annual turnover
• Non-monetary penalties: including compliance orders and the public announcement of violations

These strict penalties are supposed to ensure that businesses take cybersecurity seriously and implement measures to protect their networks and systems. By complying with NIS2, organizations can achieve multiple benefits: strengthen their resilience, while preventing financial losses and reputational damage

How can businesses achieve NIS2 compliance?

To be NIS2-compliant, organizations must take the following actions:

1. Robust cybersecurity measures: This includes the implementation of cutting-edge security technologies and protocols to protect networks and information systems.
2. Regular risk assessments: Carrying out risk assessments to identify and proactively mitigate potential threats before they turn into security incidents.
3. Incident reporting: Obligation to report security incidents to the relevant authorities and within the defined timeframe.
4. Third-party compliance: Ensuring that third-party providers collaborating with the company also meet the security requirements.

Virtual data rooms: an efficient tool for NIS2 compliance

Virtual data rooms can play a vital role in NIS2 compliance and help to avoid penalties. They offer a secure platform for storing and sharing sensitive data and help organizations to comply with the stringent security requirements.

The benefits of virtual data rooms:

• Top-notch data encryption: Protecting sensitive information with sophisticated encryption technologies such as zero-knowledge end-to-end encryption.
• Server location: Choosing a VDR provider offering secure server locations is essential for meeting legal and regulatory requirements.
• Access control: Managing and monitoring data access to prevent unauthorized use. The option to set up access rights for user groups and dedicated individuals facilitates security in the virtual data room.
• Audit trails: Tracking all activity in the data room to ensure transparency.
• Compliance: Beyond NIS2, a virtual data room designed with compliance in mind can help business meet other regulatory or internal requirements, too, preventing costly mistakes and incidents.

Easy-to-use: While security is paramount, the usability of the platform is equally important. A simple, intuitive user interface ensures that your team can easily navigate the system without unnecessary barriers.

Avoiding penalties, building resilience

The NIS2 Directive sets high standards for cybersecurity in organizations across the EU — and stipulates strict penalties for any violations. But adhering to NIS2 isn’t just about avoiding penalties – it’s about strengthening resilience.

By implementing appropriate measures and leveraging tools like virtual data rooms, your business cannot only meet compliance but also improve its ability to withstand cyber threats.

Beyond compliance, these efforts help your organization’s reputation , foster trust with customers and partners, and ultimately support your long-term growth. So, as NIS2 is more real than ever, it’s time to act – secure your digital future before the penalties hit.

Want to learn more about how Tresorit supports businesses on their NIS-2 journey? Visit our NIS2 website.