Singapore’s Cybersecurity Law May Raise Compliance Costs

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By George Lynch

A cybersecurity bill in Singapore could raise costs for owners of computer systems designated as part of the country’s critical information infrastructure, privacy professionals told Bloomberg Law.

The Cybersecurity Bill, passed by the Singapore Parliament Feb. 5, would create the new position of commissioner of cybersecurity, who would examine the country’s computer systems to bolster cybersecurity.

The commissioner would designate systems that deliver essential services as part of its critical information infrastructure (CII) and would be authorized to take emergency cybersecurity measures, including compelling information from CII systems owners.

The legislation now goes to Singapore President Halimah Yacob, who will likely sign it without issue, cybersecurity professionals told Bloomberg law.

The bill would impose wide-ranging obligations, such as undertaking audits and risk assessments, on companies, generating compliance costs throughout the cybersecurity supply chain for Singapore’s most critical economic sectors.

“It is likely that the obligations would have a knock-on effect on other organizations involved in the tech supply chain as CII owners seek to impose contractual obligations on their partners in order to comply with the Act,” Stella Cramer, co-head of the technology and innovation practice for Asia at Norton Rose Fulbright LLP in Singapore, told Bloomberg Law.

The legislation would apply the strongest cybersecurity requirements on a wide variety of Singaporean industry, which has a “high dependence on internet-based transactions,” Yaacob Ibrahim, Singapore’s Minister for Communications and Information, said in a Feb. 5 speech.

The bill identifies 11 sectors to be reviewed for critical infrastructure designation: governmental, security and emergency, health care, telecommunications, banking and finance, energy, water, media, land transport, air transport, and maritime services.

New Cybersecurity Agency Authority

Under the bill, David Koh, now chief executive of Singapore’s Cyber Security Agency, would become the first cybersecurity commissioner, Ibrahim said in his speech.

Ibrahim would also have authority to appoint sector-specific assistant commissioners to oversee and enforce sector-related cybersecurity requirements.

The commissioner would have authority to obtain information from computer system owners on design, configuration, and security in order to determine whether they should be designated as CII. The information could also be used to prevent cybersecurity incidents and order CII owners to conduct cybersecurity risk audits, risk assessments, and cybersecurity exercises.

A failure to comply could constitute a criminal offense, with fines of up to 5,000 Singapore dollars ($3,789) or six months imprisonment, or both.

“These measures will have an impact on operational efficiency and also carry cost implications,” Chia Ling Koh, director of Singapore Law Practice, OC Queen Street LLC in Singapore and member of the cyber security practice group, told Bloomberg Law.

CII-designated system owners would be required to report any cybersecurity incident to the commissioner. Failure to do so could result in a maximum fine of 100,000 Singapore dollars ($75,792) or two years imprisonment, or both.

Cybersecurity Certifications

The legislation would also require companies that run security monitoring centers and penetration testing services firms that search for vulnerabilities in computer systems to obtain a government-issued license before performing services.

That requirement could drive cybersecurity service firms to increase their fees to account for increased compliance costs, and clients to be more selective in choosing vendors, Norton Rose’s Cramer said.

To contact the reporter on this story: George Lynch in Washington at glynch@bloomberglaw.com

To contact the editor responsible for this story: Donald Aplin at daplin@bloomberglaw.com

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