Commentary on Regulations for the Protection of CII Security
By Jihong CHEN Da BAO
On July 11, 2017, the Cyberspace Administration of China (“CAC”) released the Regulations for the Protection of Critical Information Infrastructure Security (Exposure Draft)（关键信息基础设施安全保护条例，征求意见稿） (the “Protection Regulation”) for public comments. As an important implementing regulation associated with the Cyber Security Law, the Protection Regulation stipulates more specific and practicable requirements in related to the scope of critical information infrastructure (“CII”), the responsibilities of supervision departments, the security protection obligations of operators and the system of security inspection and assessment. It provides significant legislative support to protect the security of CII.
The Cyber Security Law has set higher legal standards of cyber security protection obligations for critical information infrastructure operators (“CIIO”), but it does not give a clear instruction how to identify CII. Therefore, the scope and identification standard of CII attracts a lot of attentions within industries, and has always been a hot topic of legal consultancy of business practice.
Following the mode of Article 31 of the Cyber Security Law, Article 18 of the Protection Regulation defines the scope of CII in a way of “non-exhaustive enumeration of industrial sectors plus harm consequence”. Enterprises may conduct a preliminary assessment on their network systems to figure out whether them may fall within the scope of CII according to the chart set out below.
For the identification procedure, the Guideline on the National Network Security Examination Operation (国家网络安全检查操作指南) which was issued by the Office of Central Leading Group for Cyberspace Affairs in June 2016 could be a valuable reference. The Guideline introduces a 3-step approach in determining whether an information system constitutes a CII – first, identifying the critical business of the entity; second, identifying the information system or industrial control system supporting the critical business; and third, identifying the critical information infrastructure based on 1) to what extent the critical business depends on the information system or the industrial control system and 2) the losses resulting from the cyber security accident of the information system.
For entities which do not belong to the aforementioned industries and fields or whose business is not regarded as critical, although the Protection Regulation includes a miscellaneous provision of “other critical entities”, generally speaking, the possibility for the information system operated and managed by them to be identified as CII would be low.
To instruct enterprises more explicitly, according to Article19 of the Protection Regulation, the national cyberspace administration will make a Guidance on the Recognition of Critical Information Infrastructure（关键信息基础设施识别指南） (the “Recognition Guidance”) together with the telecommunication administration of the State Council, public security departments and other relevant authorities. The national industry administration or supervision departments of the CII, i.e. Ministry of Industry and Information Technology for telecom industry, National Development and Reform Commission and National Energy Administration for energy industry, shall organize the CII recognition work of their industries and fields respectively according to the Recognition Guidance, and submit the recognition results as the procedure requires. Based on these provisions, we believe it is the responsibility of the administration or supervision departments of each industrial sector and field to identify CII.
2.Responsibilities of the National Industry Administration and Supervision Departments
The Protection Regulation establishes a supervision system relying on overall collaboration and division of responsibilities. The relevant supervision departments include the national cyberspace administration department, the national industry administration or supervision departments, the public security department of the State Council, the national security department, the national secrecy administration department, the national cryptography administration department and other relevant authorities of local governments above county level.
Among them, as the core department for implementing the protection of CII, the national cyberspace administration shall overall coordinate the CII security protection work and the relevant supervision work. The duties of the public security department of the State Council, the national security department, the national secrecy administration and the national cryptography administration are aligned with the Cyber Security Law. The Protection Regulation does not entitle special powers to these departments.
This article briefly summarizes the supervision power and duties of the national industry administration or supervision departments as below:
3.Network Security Management and Responsible Personnel
According to Article 34 of the Cyber Security Law, different from the general network operators, the CIIO shall set up a dedicated security management authority and appoint a security management person in charge, and conduct a security background examination on this person in charge and other personnel in critical positions.
On this basis, Article 25 of the Protection Regulation provides more specific provisions on the responsibilities of CII’s security management personnel, including:
(1) To organize to formulate rules and regulations and operating procedures of network security, and to supervise the implementation;
(2) To organize skill assessments for the personnel in critical positions;
(3) To organize, formulate and implement the network security education and training plans of the entity;
(4) To organize network security examinations and emergency drills and to deal with network security incidents;
(5) To report important network security matters and events in line with the provisions of the relevant departments of the State Council.
The responsibilities of the person in charge of the security management cover all aspects of the operation security of the information system, including preventing, exercise for and dealing with network security incidents as well as the reporting responsibilities. Each enterprise shall, in accordance with this duty requirements, expedite the implementation of appointing people in charge and the establishment of the security management authority.
The Protection Regulation establishes the “chief person liability system”. Article 22 clearly stipulates that “the main responsible person of the operator, who is the first responsible person of the CII security protection work of the entity, should be responsible for establishing a network security liability system and organizing the implementation, and be fully responsible for the security protection work of the CII of the entity.” The “the main responsible person of the operator” here is not necessarily same as “the security management person in charge”. If the two responsible persons are different, when the network security incident occurs, the two responsible persons may have to bear legal liabilities respectively.
Article 26 of the Protection Regulation introduces new requirements regarding the qualifications of the professional technical personnel working in network security critical positions of the operator. It requires the operator to hire employees with property certificates for professional technical personnel working in network security critical positions. The human resources social security department of the State Council shall develop the system of employment with certificates together with the national cyberspace administration and other departments. As it is the first time that the system of employment with certificates is introduced, we think the technical staffs of general network operators are not required to hold certificates.
4.CIIO’s Obligations in Security Protection
Pursuant to the provisions of the Protection Regulation, the CIIO shall perform the following security protection obligations in accordance with the mandatory requirements of the network security grade protection system and the relevant national standards.
To meet the compliance requirements of the Cyber Security Law and the Protection Regulation, each enterprise shall sort out its current information security system as soon as possible, and gradually improve and adjust the information security system in accordance with the security protection requirements stipulated in the Protection Regulation.
5. Security of Network Products and Services
For network products and services used by CIIO, the Protection Regulation introduces two new legal requirements in addition to the Cyber Security Law – 1) the pre-launched security testing requirement for ‘outsourced systems, software and donated network products’ (Article 32), and 2) the domestic operation and maintenance requirements for CII (Article 35) which provides that where there is a business necessity and the CII remote oversea maintenance is needed, the entity shall report to the national industry administration or supervision department or the public security department. The restriction of ‘remote oversea maintenance’ on CII may bring impacts on the current business model of certain MNCs.
For agencies providing security test and assessment for CII, releasing security threatening information such as system vulnerabilities, information viruses, network attacks and etc, and agencies providing cloud computing services and information technology outsourcing services, the Protection Regulation request them to conform with certain specific requirements which will be further formulated by national cyberspace administration and other relevant department of the State Council (Article 35).
“Procurement requirements for network critical equipment and network security specialized product” and “Security examination requirements for network products and services” stipulated in Article 30 and Article 31 of the Protection Regulation are generally consistent with the requirements in the Cyber Security Law. As the Product Catalogue of Network Critical Equipment and Network Security Specialized Product (1st Batch) and the Measures on Security Examination of Network Products and Services (Trial) have been issued as the supporting regulations, relevant entities should purchase the network critical equipments and network security specialized products that have acquired the security certificate or passed the security examination in compliance with corresponding regulatory requirements. Where the network products and services may harm the national security, entities shall apply for security examination according to the mandatory procedures.
This article is only for the purpose of communication, does not constitute a formal legal opinion, and also may not be relied on for any business decisions or any legal actions.