The EU CRA countdown has begun: non-compliance will result in immediate market elimination by 2027!

2026-06-03

24

Against the backdrop of global digitalization and the ever-increasing risks of cyberattacks, the European Union is gradually incorporating cybersecurity requirements into its product regulatory framework. Following the GDPR, which has become a key benchmark for global data protection, the EU has introduced another far-reaching regulation—the Cyber Resilience Act (CRA).

Author: Huayu Enterprise Management - Business Research Department


Foreword

The CRA is not just a cybersecurity regulation; it has comprehensively driven changes in product design, software development, supply chain management, and the EU market access mechanism. For Taiwanese companies actively expanding into the European market, the CRA is no longer merely a compliance issue, but a crucial strategic matter concerning their competitiveness and international order-taking capabilities.


Core regulations and scope of the EU CRA

I. EU Cybersecurity Oversight Upgrades: From Product Verification to Full Lifecycle Management

The CE marking system, familiar to companies in the past, primarily focused on verifying safety, health, and environmental requirements before product launch. However, the CRA has formally incorporated cybersecurity requirements into the EU product compliance system, emphasizing cybersecurity management throughout the product lifecycle. In the future, companies will not only need to meet cybersecurity requirements before product launch but also continuously manage post-launch cybersecurity risks, including:

  • Threat Modeling
  • Secure Software Development
  • Vulnerability monitoring and management
  • Security update and patching mechanism
  • Cybersecurity Incident Reporting and Response

Cybersecurity is no longer an add-on feature after product development is complete, but a crucial capability that needs to be continuously managed from design to retirement.


Second, "Secure by Design" and "Secure by Default" have become basic requirements.

The CRA explicitly requires products to implement "Secure by Design." This means incorporating cybersecurity controls from the early stages of product design and development, rather than retroactively reinforcing them.

The product is equipped with appropriate cybersecurity protection mechanisms when it leaves the factory, for example:

  • Identity verification mechanism
  • Access Control
  • Encrypted communication
  • Safety preset settings

Whether a product possesses comprehensive cybersecurity design capabilities will directly impact its ability to successfully enter the EU market.


III. Which products may be affected by the CRA?

The CRA regulates products with digital elements (PwDE). Products meeting one of the following criteria may be subject to regulation:

  • Contains soft or tough
  • Equipped with digital processing capabilities
  • With data exchange capability
  • Data can be transmitted via the internet or other interfaces.

Common products include:

  • Router
  • IP Camera (Network Camera)
  • Smart TV
  • Smart Watch
  • Smart home appliances
  • Industrial control equipment
  • IoT devices
  • Network equipment
  • Software products

In addition, if the product's functionality relies on cloud services, the related digital services may also become an important area of CRA assessment.


IV. CRA Product Risk Classification System

The CRA differentiates regulatory requirements based on the level of product risk.

1. Default Category : Most products fall into this category. Companies can complete the compliance process through self-compliance assessment.

2. Important Products Class I :

  • operating system
  • Microcontroller (MCU)
  • Network equipment related components

3. Important Products Class II : These products typically require third-party conformity assessment.

  • Firewall
  • Intrusion Detection System (IDS)
  • Specific high-risk network equipment

4. Critical Products : These belong to the highest risk level and have the strictest regulatory requirements.

  • Hardware Security Module (HSM)
  • Smart card related products


V. Manufacturers' responsibility has been significantly increased.

The CRA places significant compliance responsibility on the manufacturer. Even if the final product integrates third-party software, open-source components, or parts from external vendors, the manufacturer remains responsible for the final product's compliance. Therefore, businesses need to:

  • Establish a supplier cybersecurity management mechanism
  • Assess the risks of third-party components
  • Strengthen outsourcing management
  • Establish traceable cybersecurity documents and records
  • Ensure products continue to meet CRA requirements

In the future, supply chain cybersecurity capabilities will become one of the key indicators for brand customers to evaluate suppliers.


Key timelines that businesses must pay attention to

  • December 2024: The CRA officially came into effect.
  • September 2026: The obligation to report vulnerabilities and cybersecurity incidents will come into effect.
  • By the end of 2026: The EU is expected to publish relevant Harmonized Standards.
  • December 2027: Most CRA requirements will be officially mandated.

Products that do not meet the standards may be unable to enter the EU market.


Enterprise compliance pain points and risks

I. SBOM will become an important tool for enterprise cybersecurity management.

The CRA places particular emphasis on software supply chain security. In the future, companies may need to establish a Software Bill of Materials (SBOM). Through the SBOM, companies can control:

  • Which open-source software to use?
  • Which third-party libraries to use?
  • Component version information
  • Known vulnerability risks

Only when new cybersecurity vulnerabilities (CVEs) are discovered can companies quickly identify affected products and take remedial measures. For electronics manufacturers, IoT device manufacturers, and hardware and software integration companies, SBOM (Site-Based Management Object) will gradually become a basic management requirement.


II. Risks of hefty fines and market bans

The CRA continues the high-intensity enforcement model consistently employed by EU regulations. Companies that violate regulatory requirements may face:

  • A maximum fine of €15 million or €2.5 times the global annual turnover (whichever is higher) could be imposed.
  • Discontinued
  • Removal and Recall
  • Market ban

This will have a significant impact on the company's brand and reputation.


III. Three Actions Taiwanese Enterprises Should Take Immediately

1. Product inventory (confirm which products fall within the scope of PwDE):

  • IoT products
  • Smart devices
  • Industrial control equipment
  • Netcom products
  • Software products

2. Adopt international cybersecurity standards and establish a systematic cybersecurity management capability (suggested reference):

3. Establish a complete end-to-end cybersecurity governance mechanism for the supply chain, covering :

  • Supplier evaluation
  • Third-party software management
  • SBOM Management
  • Vulnerability Management Process
  • Cybersecurity audit mechanism


Conclusion

From GDPR to CRA, the EU is gradually transforming "digital trust" into new international trade rules. In the future, the core of corporate competition will no longer be just price, quality, and delivery time, but also product cybersecurity capabilities, supply chain resilience, and regulatory compliance.

For Taiwanese companies, the CRA is not just a new compliance requirement, but also a crucial ticket to the European market. Companies that establish cybersecurity governance and supply chain management capabilities early on will have the opportunity to gain a competitive edge in the new round of global supply chain restructuring.

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