Article 32Supervisory and enforcement measures in relation to essential entities

1. Member States shall ensure that the supervisory or enforcement measures imposed on essential entities in respect of the obligations laid down in this Directive are effective, proportionate and dissuasive, taking into account the circumstances of each individual case.

2. Member States shall ensure that the competent authorities, when exercising their supervisory tasks in relation to essential entities, have the power to subject those entities at least to:

• (a)
  on-site inspections and off-site supervision, including random checks conducted by trained professionals;
• (b)
  regular and targeted security audits carried out by an independent body or a competent authority;
• (c)
  ad hoc audits, including where justified on the ground of a significant incident or an infringement of this Directive by the essential entity;
• (d)
  security scans based on objective, non-discriminatory, fair and transparent risk assessment criteria, where necessary with the cooperation of the entity concerned;
• (e)
  requests for information necessary to assess the cybersecurity risk-management measures adopted by the entity concerned, including documented cybersecurity policies, as well as compliance with the obligation to submit information to the competent authorities pursuant to Article 27;
• (f)
  requests to access data, documents and information necessary to carry out their supervisory tasks;
• (g)
  requests for evidence of implementation of cybersecurity policies, such as the results of security audits carried out by a qualified auditor and the respective underlying evidence.

The targeted security audits referred to in the first subparagraph, point (b), shall be based on risk assessments conducted by the competent authority or the audited entity, or on other risk-related available information.

The results of any targeted security audit shall be made available to the competent authority. The costs of such targeted security audit carried out by an independent body shall be paid by the audited entity, except in duly substantiated cases when the competent authority decides otherwise.

3. When exercising their powers under paragraph 2, point (e), (f) or (g), the competent authorities shall state the purpose of the request and specify the information requested.

4. Member States shall ensure that their competent authorities, when exercising their enforcement powers in relation to essential entities, have the power at least to:

• (a)
  issue warnings about infringements of this Directive by the entities concerned;
• (b)
  adopt binding instructions, including with regard to measures necessary to prevent or remedy an incident, as well as time-limits for the implementation of such measures and for reporting on their implementation, or an order requiring the entities concerned to remedy the deficiencies identified or the infringements of this Directive;
• (c)
  order the entities concerned to cease conduct that infringes this Directive and desist from repeating that conduct;
• (d)
  order the entities concerned to ensure that their cybersecurity risk-management measures comply with Article 21 or to fulfil the reporting obligations laid down in Article 23, in a specified manner and within a specified period;
• (e)
  order the entities concerned to inform the natural or legal persons with regard to which they provide services or carry out activities which are potentially affected by a significant cyber threat of the nature of the threat, as well as of any possible protective or remedial measures which can be taken by those natural or legal persons in response to that threat;
• (f)
  order the entities concerned to implement the recommendations provided as a result of a security audit within a reasonable deadline;
• (g)
  designate a monitoring officer with well-defined tasks for a determined period of time to oversee the compliance of the entities concerned with Articles 21 and 23;
• (h)
  order the entities concerned to make public aspects of infringements of this Directive in a specified manner;
• (i)
  impose, or request the imposition by the relevant bodies, courts or tribunals, in accordance with national law, of an administrative fine pursuant to Article 34 in addition to any of the measures referred to in points (a) to (h) of this paragraph.

5. Where enforcement measures adopted pursuant to paragraph 4, points (a) to (d) and (f), are ineffective, Member States shall ensure that their competent authorities have the power to establish a deadline by which the essential entity is requested to take the necessary action to remedy the deficiencies or to comply with the requirements of those authorities. If the requested action is not taken within the deadline set, Member States shall ensure that their competent authorities have the power to:

• (a)
  suspend temporarily, or request a certification or authorisation body, or a court or tribunal, in accordance with national law, to suspend temporarily a certification or authorisation concerning part or all of the relevant services provided or activities carried out by the essential entity;
• (b)
  request that the relevant bodies, courts or tribunals, in accordance with national law, prohibit temporarily any natural person who is responsible for discharging managerial responsibilities at chief executive officer or legal representative level in the essential entity from exercising managerial functions in that entity.

Temporary suspensions or prohibitions imposed pursuant to this paragraph shall be applied only until the entity concerned takes the necessary action to remedy the deficiencies or comply with the requirements of the competent authority for which such enforcement measures were applied. The imposition of such temporary suspensions or prohibitions shall be subject to appropriate procedural safeguards in accordance with the general principles of Union law and the Charter, including the right to an effective remedy and to a fair trial, the presumption of innocence and the rights of the defence.

The enforcement measures provided for in this paragraph shall not be applicable to public administration entities that are subject to this Directive.

6. Member States shall ensure that any natural person responsible for or acting as a legal representative of an essential entity on the basis of the power to represent it, the authority to take decisions on its behalf or the authority to exercise control of it has the power to ensure its compliance with this Directive. Member States shall ensure that it is possible to hold such natural persons liable for breach of their duties to ensure compliance with this Directive.

As regards public administration entities, this paragraph shall be without prejudice to national law as regards the liability of public servants and elected or appointed officials.

7. When taking any of the enforcement measures referred to in paragraph 4 or 5, the competent authorities shall comply with the rights of the defence and take account of the circumstances of each individual case and, as a minimum, take due account of:

• (a)
  the seriousness of the infringement and the importance of the provisions breached, the following, inter alia, constituting serious infringement in any event:

  • (i)
    repeated violations;
  • (ii)
    a failure to notify or remedy significant incidents;
  • (iii)
    a failure to remedy deficiencies following binding instructions from competent authorities;
  • (iv)
    the obstruction of audits or monitoring activities ordered by the competent authority following the finding of an infringement;
  • (v)
    providing false or grossly inaccurate information in relation to cybersecurity risk-management measures or reporting obligations laid down in Articles 21 and 23;
• (b)
  the duration of the infringement;
• (c)
  any relevant previous infringements by the entity concerned;
• (d)
  any material or non-material damage caused, including any financial or economic loss, effects on other services and the number of users affected;
• (e)
  any intent or negligence on the part of the perpetrator of the infringement;
• (f)
  any measures taken by the entity to prevent or mitigate the material or non-material damage;
• (g)
  any adherence to approved codes of conduct or approved certification mechanisms;
• (h)
  the level of cooperation of the natural or legal persons held responsible with the competent authorities.

8. The competent authorities shall set out a detailed reasoning for their enforcement measures. Before adopting such measures, the competent authorities shall notify the entities concerned of their preliminary findings. They shall also allow a reasonable time for those entities to submit observations, except in duly substantiated cases where immediate action to prevent or respond to incidents would otherwise be impeded.

9. Member States shall ensure that their competent authorities under this Directive inform the relevant competent authorities within the same Member State under Directive (EU) 2022/2557 when exercising their supervisory and enforcement powers aiming to ensure compliance of an entity identified as a critical entity under Directive (EU) 2022/2557 with this Directive. Where appropriate, the competent authorities under Directive (EU) 2022/2557 may request the competent authorities under this Directive to exercise their supervisory and enforcement powers in relation to an entity that is identified as a critical entity under Directive (EU) 2022/2557.

10. Member States shall ensure that their competent authorities under this Directive cooperate with the relevant competent authorities of the Member State concerned under Regulation (EU) 2022/2554. In particular, Member States shall ensure that their competent authorities under this Directive inform the Oversight Forum established pursuant to Article 32(1) of Regulation (EU) 2022/2554 when exercising their supervisory and enforcement powers aimed at ensuring compliance of an essential entity that is designated as a critical ICT third-party service provider pursuant to Article 31 of Regulation (EU) 2022/2554. with this Directive.