EU reaches deal on flagship cybersecurity law

"We are shielding our economies and our societies against cyber threats. Enhancing preparedness, resilience, protecting our democracy," said EU commission vice-president Margaritas Schinas after the deal was reached.

Under the previous rules, EU countries could choose which entities fell into the category of "critical" or "essential" services.

But the update of the Network and Information Security Directive (NIS2) introduces common rules for medium and large bodies operating within critical sectors, such as energy, transport, health and digital infrastructure.

These include providers of telecom services and energy supplies, rail infrastructure managers, financial services, waste and water management operators, postal and courier services, medical device manufacturers, and public administrations.

But parliaments, the judiciary and central banks, as well as entities in the areas of public security, defence and law enforcement, are excluded from the scope.

"This … is going to help more than a 100,000 vital entities to tighten their grip on security and make Europe a safe place to live and work," said lead Dutch liberal MEP Bart Groothuis.

Companies and public operators will have to analyse cybersecurity risks and put in place measures to prevent potential cyberattacks, such as basic computer hygiene, encryption, or multi-factor authentication.

They will also have to report any potential cyberattacks and remedies that they have taken in response to such incidents — facing sanctions if found in breach of the rules.

The EU agency for cybersecurity (ENISA) has been carrying out testing exercises since last year to prepare a fast European response when facing cross-border cyberattacks.

But the NIS2 will establish the European Cyber Crises Liaison Organisation Network (EU-CyCLONe) to support and coordinate crisis management of large-scale cyberattacks in the 27-nations bloc.

The updated legislation also introduces a voluntary "peer-learning mechanism" carried out by designated experts in a bid to increase mutual trust and exchange good practices and information among EU member states.

Nevertheless, all EU countries will have to carry out a self-assessment regarding technical capabilities and financial resources prior to the peer-reviewing — as requested by MEPs during the negotiations.

Once formally adopted, member states will have nearly two years to transpose it into national law.