NIS 2 Supply Chain Security Requirements

Key Takeaways

Point	Summary
Explicit requirement	Article 21(2)(d) mandates supply chain security measures for all in-scope entities
Scope	Covers direct suppliers, service providers, and their supply chains
Risk-based	Organizations must assess and manage supplier-specific cybersecurity risks
Contractual obligations	Security requirements must be embedded in supplier contracts
Ongoing monitoring	Continuous oversight of supplier security posture is expected

Quick Answer: NIS 2 requires organizations to assess cybersecurity risks in their supply chains, embed security requirements in supplier contracts, and continuously monitor supplier security posture. This includes evaluating the quality of suppliers' cybersecurity practices and their product development processes.

Why Supply Chain Security Matters

Recent high-profile supply chain attacks have demonstrated the devastating impact of compromised suppliers:

• A vulnerability in a single software provider can affect thousands of organizations
• Third-party access to critical systems creates additional attack vectors
• Cloud service dependencies introduce shared risk across multiple organizations
• Manufacturing supply chains can introduce hardware-level vulnerabilities

NIS 2 addresses these risks by making supply chain security a fundamental requirement rather than an afterthought.

What NIS 2 Requires

Article 21(2)(d) requires organizations to implement security measures for their supply chain, specifically addressing:

Security of the Supply Chain Itself

Requirement	Description
Supplier risk assessment	Evaluate cybersecurity risks specific to each direct supplier and service provider
Vulnerability assessment	Consider the overall quality and resilience of products and cybersecurity practices of suppliers
Development practices	Assess cybersecurity measures integrated into supplier development procedures
Dependency mapping	Understand the critical dependencies in your supply chain

Supplier Relationship Management

Aspect	What to Address
Contractual security	Embed cybersecurity requirements in agreements with suppliers
Security assessments	Include audit rights and security assessment provisions in contracts
Incident notification	Require suppliers to notify you of incidents that may affect your systems
Access controls	Define and restrict supplier access to your network and information systems

Coordinated Risk Assessment

The directive also introduces the concept of coordinated security risk assessments for critical supply chains at the EU level. The Cooperation Group, in collaboration with the Commission and ENISA, may carry out coordinated assessments of specific critical supply chains, similar to the 5G security assessment conducted under the original NIS framework.

Building a Supply Chain Security Program

Step 1: Map Your Supply Chain

Identify all suppliers and service providers that have access to or impact on your network and information systems:

• Software and hardware vendors
• Cloud service providers
• Managed service providers and managed security service providers
• IT consulting and outsourcing firms
• Physical infrastructure providers
• Any entity with access to your systems or data

Step 2: Classify Supplier Risk

Not all suppliers present the same level of risk. Categorize suppliers based on:

Risk Factor	High Risk	Medium Risk	Low Risk
System access	Direct access to critical systems	Indirect or limited access	No system access
Data handling	Processes sensitive data	Handles non-sensitive operational data	No data handling
Service criticality	Essential to business operations	Supports important functions	Peripheral services
Substitutability	Difficult to replace	Some alternatives available	Easily replaceable

Step 3: Assess Supplier Security

For each supplier, evaluate:

• Their cybersecurity policies and practices
• Certifications held (e.g., ISO 27001, SOC 2)
• Incident history and response capabilities
• Their own supply chain management practices
• Vulnerability management and patching processes
• Business continuity and disaster recovery plans

Step 4: Embed Security in Contracts

Supplier contracts should include:

• Minimum cybersecurity requirements aligned with NIS 2
• Incident notification obligations with specific timelines
• Right to audit or assess the supplier's security measures
• Data protection and handling requirements
• Requirements for the supplier's own supply chain management
• Termination clauses for significant security deficiencies
• Requirements to notify you before making changes that could affect security

Step 5: Monitor and Review

Establish ongoing monitoring processes:

• Regular security reviews and assessments of critical suppliers
• Monitoring for known vulnerabilities in supplier products
• Tracking supplier security incidents and their resolution
• Annual review of supplier risk classifications
• Update contracts and requirements as the threat landscape evolves

Coordinated Vulnerability Disclosure

NIS 2 also establishes a framework for coordinated vulnerability disclosure at the EU level. ENISA operates a vulnerability database, and entities should:

• Participate in coordinated vulnerability disclosure processes
• Monitor vulnerability databases for issues affecting their supply chain
• Have processes to act quickly when supply chain vulnerabilities are discovered
• Report newly discovered vulnerabilities through appropriate channels

Impact on Suppliers

If your organization provides products or services to NIS 2-regulated entities, expect to face increased security scrutiny:

• Customers may require evidence of your cybersecurity practices
• Contractual security obligations will become more stringent
• You may need to demonstrate compliance with specific security standards
• Incident notification requirements will flow down through the supply chain
• Regular security assessments or audits may be requested

Common Questions

Do we need to assess every supplier?

While NIS 2 requires supply chain security measures, the approach should be proportionate and risk-based. Focus your most thorough assessments on suppliers that have the greatest potential impact on your cybersecurity, such as those with direct system access, those handling sensitive data, or those providing critical services.

Is ISO 27001 certification enough for supplier security?

ISO 27001 certification is a strong indicator of a supplier's security maturity and can simplify your assessment process. However, it does not guarantee compliance with all NIS 2-specific requirements. You should still evaluate how the supplier's ISMS addresses the specific risks relevant to your relationship.

What about sub-suppliers?

NIS 2 requires you to consider the "overall quality" of suppliers' cybersecurity practices, including their supply chain management. While you cannot directly audit every sub-supplier, you should ensure your direct suppliers have their own supply chain security processes in place, creating a chain of security assurance.

How does this relate to DORA supply chain requirements?

For financial sector entities, DORA provides more specific requirements for ICT third-party risk management. If your organization is subject to both NIS 2 and DORA, DORA's more specific provisions on ICT third-party risk typically take precedence for financial services activities, while NIS 2 may apply to other activities.