Article 44 Digital Operational Resilience Act (DORA), Administrative Penalties and Remedial Measures
Article 44 of the Digital Operational Resilience Act (DORA) details the supervisory, investigatory, and sanctioning powers necessary for competent authorities to ensure compliance with cybersecurity and operational resilience requirements. This article establishes a framework for administrative penalties and remedial measures, empowering authorities to enforce regulations effectively, address breaches, and uphold the stability and integrity of the financial sector.
Supervisory, Investigatory, And Sanctioning Powers
Competent authorities must possess all necessary supervisory, investigatory, and sanctioning powers to fulfill their obligations under this Regulation. These powers are essential to ensure that financial entities comply with cybersecurity and operational resilience requirements, thereby safeguarding the stability and integrity of the financial sector. The competent authorities' ability to effectively monitor, investigate, and enforce compliance is critical for maintaining trust and confidence in the financial system.
Minimum Powers Granted To Competent Authorities
(a) Access to Documents and Data: Competent authorities are granted access to any document or data, regardless of its form, deemed relevant for the performance of their duties, including the authority to receive or obtain copies. This ensures that authorities can gather all necessary information to assess compliance, identify potential risks, and examine financial entities' records comprehensively.
(b) On-Site Inspections and Investigations: Competent authorities have the power to conduct on-site inspections or investigations. This enables them to visit financial entities' premises, assess cybersecurity measures, identify vulnerabilities, and ensure regulatory adherence through direct examination.
(c) Mandate Corrective and Remedial Actions: Competent authorities can mandate corrective and remedial actions for breaches of the Regulation. This includes requiring financial entities to address deficiencies, implement additional security measures, revise policies, and provide training to prevent future breaches.
Administrative Penalties And Remedial Measures
Member States must establish rules defining appropriate administrative penalties and remedial measures for violations of this Regulation. These penalties must be effective, proportionate, and serve as a deterrent to non-compliance while ensuring fairness and legitimacy.
(a) Cease and Desist Orders: Competent authorities can issue orders requiring natural or legal persons to cease and desist from harmful conduct and prevent its repetition. This measure ensures immediate cessation of harmful practices and protects the financial sector.
(b) Cessation of Non-Compliant Practices: Authorities may require temporary or permanent cessation of practices contrary to the Regulation, preventing ongoing or future violations.
(c) Financial Penalties and Compliance Measures: Financial penalties can be implemented to ensure ongoing compliance with legal requirements. These penalties act as a deterrent and incentivize financial entities to maintain robust measures.
(d) Access to Data Traffic Records: Authorities can request access to existing data traffic records held by telecommunication operators, within national law limits, when investigating potential breaches.
(e) Public Disclosure of Breaches: Public notices or statements disclosing the identity of persons and the nature of the breach may be issued. This promotes transparency and accountability within the financial sector.
Accountability Of Management Bodies And Individuals
When penalties and measures apply to legal persons, Member States must authorize competent authorities to apply administrative penalties and measures to members of the management body and other responsible individuals under national law. This ensures individual accountability for overseeing and implementing compliance measures.
Justification and Right of Appeal
Member States must ensure that decisions imposing administrative penalties or remedial measures are properly justified and allow for the right of appeal. This guarantees fairness, transparency, and an opportunity for financial entities to challenge unjust decisions.
The comprehensive powers and penalties outlined in Article 44 are crucial for enforcing compliance with the Digital Operational Resilience Act. These measures ensure that financial entities uphold cybersecurity and operational resilience standards, protecting the sector from cyber threats and enhancing overall stability.
