+Break Clauses

Break Clauses

Description

Mechanisms exist to include "break clauses" within contracts for failure to meet contract criteria for security, compliance and/or resilience controls.

Possible Solutions & Considerations

Micro-Small Business (<10 staff) / BLS Firm Size Classes 1-2

∙ Cybersecurity Supply Chain Risk Management (C-SCRM) program

Small Business (10-49 staff) / BLS Firm Size Classes 3-4

∙ Cybersecurity Supply Chain Risk Management (C-SCRM) program

Medium Business (50-249 staff) / BLS Firm Size Classes 5-6

∙ Cybersecurity Supply Chain Risk Management (C-SCRM) program

Large Business (250-999 staff) / BLS Firm Size Classes 7-8

∙ Cybersecurity Supply Chain Risk Management (C-SCRM) program

Enterprise (> 1,000 staff) / BLS Firm Size Class 9

∙ Cybersecurity Supply Chain Risk Management (C-SCRM) program

SCR-CMM

Level 0 Not Performed

Practices are non-existent, based on the inability to demonstrate an implemented and operational capability. A reasonable person would conclude the control is not being performed.

Level 1 Performed Informally

SCR-CMM Level 1 criteria definitions are not available for this control:
▪ A reasonable person would conclude this control requires a structured process.
▪ At this level of maturity, the "ad hoc" nature of performing a capability informally would indicate the intent of the control is not met due to a lack of consistency and formality.

Level 2 Planned Tracked

Third-Party Management (TPM) capabilities are requirements-driven, but are not standardized across the entity (e.g., local/regional level consistency). Capability criteria associated with this control reasonably expect the following criteria to exist:
▪ Policies and standards associated with TPM domain capabilities are formally documented and centrally-managed by the entity.
▪ Standardized Operating Procedures (SOP) associated with TPM domain capabilities are documented and maintained by process owners.
▪ IT and/or cybersecurity personnel work with business stakeholders and process owners to appropriately scope and reasonably implement cybersecurity and data protection controls associated with TPM domain capabilities to address applicable statutory, regulatory and/or contractual requirements for Technology Assets, Applications, Services and/or Data (TAASD).
▪ Third-party management-related controls are primarily administrative and preventative in nature (e.g., policies, standards and procedures & guidelines).
▪ Asset management may be a defined function (e.g., team or department) or assigned as an additional duty to existing IT and/or cybersecurity personnel.
▪ Contracts with ESP contain break clauses to enable penalty-free, early termination of a contract for cause, based on ESP cybersecurity and/or data protection practices deficiency(ies).

Level 3 Well Defined

Third-Party Management (TPM) capabilities are standardized across the entity for applicability to People, Processes, Technologies, Data and/or Facilities (PPTDF) to ensure consistency for Technology Assets, Applications, Services and/or Data (TAASD). Capability criteria associated with this control reasonably expect the following criteria to exist:
▪ Policies and standards associated with TPM domain capabilities are formally documented and centrally-managed by the entity's Governance, Risk & Compliance (GRC) team, or similar function.
▪ Standardized Operating Procedures (SOP) associated with TPM domain capabilities are well-documented and kept current by process owners.
▪ A procurement team, or similar function, is appropriately staffed and supported to implement and maintain TPM domain capabilities.
▪ Technology is leveraged to enhance the efficiency and accuracy of third-party management operations (e.g., TPRM risk management solution and vendor management solution).
▪ The entity's Governance, Risk & Compliance (GRC) team, or similar function, works with business stakeholders and process owners to appropriately scope and reasonably implement cybersecurity and data protection controls associated with TPM domain capabilities to address Minimum Compliance Requirements (MCR) (e.g., applicable statutory, regulatory and/or contractual requirements) and Discretionary Security Requirements (DSR) (e.g., entity-required controls).
▪ An implemented and operational capability exists to include "break clauses" within contracts for failure to meet contract criteria for security, compliance and/or resilience controls.

Level 4 Quantitatively Controlled

Utilize SCR-CMM Level 3 criteria definitions:
▪ There are no defined Level 4 criteria, since it is reasonable to assume a quantitatively-controlled process is not necessary to operationalize this control.
▪ While it may be possible to develop “metrics-driven” capabilities for this control, the criteria would be organization-specific to define.

Level 5 Continuously Improving

Utilize SCR-CMM Level 3 or Level 4 (if available) criteria definitions:
▪ There are no defined Level 5 criteria, since it is reasonable to assume a continuously-improving process is not necessary to operationalize this control.
▪ Level 5 capabilities should be considered “world-class” where the control builds on Level 4 capabilities, but are continuously improving through Artificial Intelligence (AI) and/or Machine Learning (ML) technologies.
▪ While it may be possible to develop responsive capabilities for this control through the use of AI and/or ML technologies, the criteria would be organization-specific to define.

1. Oversigt

1.1 Referencer

1.2 Identificerede krav

1.3 Relaterede reguleringer

2. Identificerede krav

Krav

3. Relaterede reguleringer

Reguleringer
EULAW Artikel 28 Generelle principper
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EULAW Artikel 21 Foranstaltninger til styring af cybersikkerhedsrisici
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EULAW Artikel 28 7

7.   De finansielle enheder sikrer, at de kontraktlige ordninger for brugen af IKT-tjenester som minimum kan opsiges i enhver af følgende situationer:

a)

væsentlig overtrædelse begået af tredjepartsudbyderen af IKT-tjenester af gældende love, administrative bestemmelser eller kontraktvilkår

b)

forhold, der er identificeret under overvågningen af IKT-tredjepartsrisiko, og som anses for at kunne ændre udførelsen af de funktioner, der er leveret gennem den kontraktlige ordning, herunder væsentlige ændringer, der påvirker ordningen eller situationen for tredjepartsudbyderen af IKT-tjenester

c)

dokumenterede svagheder hos tredjepartsudbyderen af IKT-tjenester, som vedrører dennes samlede IKT-risikostyring, og navnlig i den måde, hvorpå denne garanterer tilgængeligheden, autenticiteten, integriteten og fortroligheden af data, hvad enten det drejer sig om personoplysninger eller på anden måde følsomme data eller andre oplysninger end personoplysninger

d)

hvis den kompetente myndighed ikke længere kan føre effektivt tilsyn med den finansielle enhed som følge af betingelserne eller omstændighederne vedrørende de respektive kontraktlige ordninger.
EULAW Artikel 28 8

8.   For så vidt angår IKT-tjenester, der understøtter kritiske eller vigtige funktioner, indfører de finansielle enheder exitstrategier. Exitstrategierne skal tage højde for de risici, der kan opstå hos tredjepartsudbydere af IKT-tjenester, navnlig mulige svigt fra deres side, en forringelse af kvaliteten af de leverede IKT-tjenester, eventuelle driftsforstyrrelser som følge af uhensigtsmæssig eller manglende levering af IKT-tjenester eller eventuelle væsentlige risici i forbindelse med en passende og løbende anvendelse af de pågældende IKT-tjenester eller opsigelse af kontraktlige ordninger med tredjepartsudbydere af IKT-tjenester i en af de i stk. 7 anførte situationer.

De finansielle enheder sikrer, at de kan opsige kontraktlige ordninger, uden:

a)

at deres forretningsaktiviteter afbrydes

b)

at efterlevelsen af de forskriftsmæssige krav begrænses

c)

at kontinuiteten og kvaliteten af de leverede tjenester til kunder lider skade.

Exitplanerne skal være omfattende, veldokumenterede og, i overensstemmelse med kriterierne i artikel 4, stk. 2, testet i tilstrækkeligt omfang samt gennemgået regelmæssigt.

De finansielle enheder identificerer alternative løsninger og udarbejder overgangsplaner, således at de kan fratage tredjepartsudbyderen af IKT-tjenester de udliciterede IKT-tjenester og de relevante data og sikkert og fuldstændigt kan overføre disse til alternative udbydere eller på ny indarbejde dem internt.

De finansielle enheder indfører passende beredskabsforanstaltninger for at opretholde driftsstabiliteten i tilfælde af de i første afsnit omhandlede omstændigheder.

Linkede sager

Sagslinks
is related to Annual
is related to relative Control Weighting = 09
is related to Process
is related to Protect
is related to SCRM Focus Tier 1 STRATEGIC
is related to SCRM Focus Tier 2 OPERATIONAL
blocks Contractual Default / Termination
blocks Regulatory / Legal / Contractual Financial Liability
blocks Loss of Authorization / Certification / License
blocks Uncontrolled Third-Party Security / Privacy Exposure
blocks Lack of oversight of third-party controls
blocks Inability to Demonstrate Due Diligence / Due Care
blocks Concentration / Single-Point Dependency Failure
blocks Third-Party Cybersecurity Compromise / Exposure
blocks Sub-Tier / Fourth-Party Supply Chain Exposure
blocks Third-Party Legal / Compliance Exposure
blocks Third-Party Dependency Failure
blocks Drought & Water Shortage
blocks Earthquakes
blocks Fire & Wildfires
blocks Floods
blocks Hurricanes & Tropical Storms
blocks Landslides & Debris Flow
blocks Pandemic (Disease) Outbreaks
blocks Severe Weather
blocks Space Weather
blocks Thunderstorms & Lightning
blocks Tornadoes
blocks Tsunamis
blocks Volcanoes
blocks Winter Storms & Extreme Cold
blocks Dysfunctional Management Practices
blocks Human Error
blocks Statutory / Regulatory / Contractual Change
blocks Fraud, Corruption and/or Intentional Criminal Conduct
blocks Conflict of Interest (COI) / Undue Influence / Insider Misconduct
blocks Economic Shock / Market Disruption
blocks Foreign Ownership, Control, or Influence (FOCI)
blocks Geopolitical Conflict / Government Intervention
blocks Sanctions / Trade Restriction Disruption
blocks Supplier Financial Distress / Insolvency
blocks Workforce Shortage / Loss of Critical Skills / Labor Disruption
blocks SSO-06.01B
blocks SSO-06.02B
is blocked by TPM-19 Break Clauses – Assessment Procedure
blocks SA-09(03) Establish and Maintain Trust Relationship with Providers
blocks 03.17.01 Supply Chain Risk Management Plan
blocks 03.17.02 Acquisition Strategies, Tools, and Methods
blocks 03.17.03 Supply Chain Requirements and Processes
blocks GV.SC-06 Planning and due diligence are performed to reduce risks before entering into formal supplier or other third-party relationships
  • Secure Controls Framework -

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