Hong Kong does not have statutory requirements on critical infrastructure cybersecurity. However, critical infrastructure around the world is at risk of cyberattacks and the repercussions of such malevolent actions can be extremely severe.

In recent years, legislation to protect the security of computer systems of critical infrastructure has been enacted in mainland China, Australia, the UK and the EU. Following in these footsteps, Hong Kong proposes to enact a new legislation tentatively titled the Protection of Critical Infrastructure (Computer System) Bill.

Regulation targets

The proposed legislation seeks to regulate the operators of critical infrastructure that are necessary for:

1. the continuous delivery of essential services in Hong Kong across eight sectors (energy, information technology, banking and financial services, land transport, air transport, maritime, healthcare services, and communications and broadcasting); or
2. maintaining important societal and economic activities in Hong Kong, like major sports and performance venues, and research and development parks.

The new law will regulate only computer systems that are related to the normal functioning of critical infrastructure, regardless of their physical location, but not the operators’ other systems.

The legislation will not apply to essential services operated by the government – like water supply, drainage and emergency relief – as the government already has comprehensive internal information technology security policies and guidelines. Consequently, government departments will continue to be regulated by the existing administrative framework.

Administration

A new commissioner’s office will be established under the Security Bureau, to implement the proposed legislation, including the performance of the following duties: designating critical infrastructure operators (CIOs) and critical computer systems (CCSs); establishing code of practice and giving advice on the measures to be adopted by CIOs; monitoring security threats against CCSs; assisting CIOs in responding to computer system security incidents; investigating and following up on non-compliance and offences committed by the CIOs; coordinating with various government departments in formulating policies and guidelines and handling incidents; and issuing written instructions to CIOs addressing potential security loopholes.

Designation

Whether a piece of infrastructure is designated as a critical infrastructure will depend on factors such as whether it provides essential services or maintains important societal and economic activities in Hong Kong, its reliance on information technology, and the severity of societal impact in the event of damage, loss of functionality or data leakage.

Operators

The commissioner’s office will expressly designate certain operators as CIOs. These operators will mostly be large organisations but the list of designated CIOs will not be made public to protect their critical infrastructure from potential cyberattacks.

CIOs’ obligations

Designated CIOs will be required to fulfil three types of obligations:

1. Organisational. To maintain an address and office in Hong Kong; to report changes in the ownership and operation of the critical infrastructure; and to set up a computer system security management unit with professional knowledge (may be outsourced) supervised by a dedicated supervisor of the CIO.
2. Preventive. To inform the commissioner’s office of material changes to their CCSs like design, configuration, security and operation; to formulate and implement a computer system security management plan; to conduct a computer system security risk assessment at least once every year; to conduct a computer system security audit at least once every two years; and to adopt measures to ensure that third-party service providers comply with relevant statutory obligations.
3. Incident reporting and response. To participate in a computer system security drill at least once every two years; to formulate an emergency response plan; and to notify the commissioner’s office about computer system security incidents (activities carried out without lawful authority on or through a computer system that jeopardise or adversely affect its computer system security) : (a) within two hours of becoming aware of a serious computer system security incident (one that has a major impact on the continuity of essential services, large-scale leakages of personal information), and (b) within 24 hours of becoming aware of other computer system security incidents.

Upon request by the commissioner’s office in the course of investigating an incident or offence related to the three types of obligations above, CIOs must submit relevant information available to the commissioner’s office, even if such information is located outside Hong Kong.

Sector regulators

Certain essential service sectors are already comprehensively regulated by statutory sector regulators. These regulators can monitor the discharging of CIOs’ organisational and preventive obligations. At this stage, it is proposed that:

1. the Hong Kong Monetary Authority will be the designated authority to regulate service providers in the banking and financial services sector; and
2. the Communications Authority will be the authority responsible for regulating service providers in the communications and broadcasting sector.

Nevertheless, the commissioner’s office will fully grasp any incident and the response arrangements of all CIOs to co-ordinate, investigate and prevent incidents from spreading to other CIOs.

Penalties for non-compliance

CIOs are expected to adhere to the statutory obligations under the proposed legislation and written directions and requests issued by the commissioner’s office. Failure to do so may constitute an offence and result in fines ranging from HK$500,000 to HK$5 million. If an organisation continues to disregard certain compliance obligations, additional daily fines may be imposed. …READ FULL ARTICLE

By: Rossana Chu and Beverly Fu at YYC Legal LLP

Note: This material has been prepared for general informational purposes only and is not intended to be relied upon as professional advice. Please contact us for specific advice.