Harmonization of digital markets of Ukraine and EU: a bumpy road to innovative future

Maksym Koriavets, Ukrainian National Platform of Eastern Partnership Civil Society Forum, Polissya Foundation for International and Regional Studies (Chernihiv, Ukraine)

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The need to integrate the digital markets of the Eastern Partnership countries into the single European space has led to launching Harmonization of Digital Markets initiative which Ukraine is also involved in. The relevance of this direction for Ukraine has become noticeable in the past three years.

* This material partially uses the results of implementing the project “Civic participation in launching and implementing Ukraine’s digital agenda and harmonizing its digital markets with EU and Eastern Partnership countries” supported by “Civic Synergy”.

A formal confirmation of the start of shaping a digital policy came at the beginning of 2018 when the Concept of Developing Digital Economy and Society of Ukraine in 2018-2020 was adopted. This document contains the main aims and principles of the country’s digital development as well as an indicative plan of their implementation.

However, this is not enough when it comes to the necessity of synchronized development of every sphere in the process of harmonizing Ukraine’s digital market within the frames of the Eastern Partnership policy, including:

– telecom rules and digital infrastructure;

– trust and security in the digital economy;

– eTrade (eCommerce, eCustoms, and eLogistics);

– digital skills;

– ICT research, innovation, and startup ecosystems;

– eHealth.

At this stage of “digitalizing” the country the main obstacle is the absence of coordinated strategic approach to developing harmonizing digital markets policies with the EU and the Eastern Partnership region. The first step to implementing the Concept of Developing the Digital Economy and Society of Ukraine should be creating strategic documents/roadmaps/action plans for each sphere of the country’s digital development mentioned above.

Ukraine has already begun the digitization of important socio-economic spheres. But along with successes, there are significant drawbacks that require elimination in the short term.

Telecom rules and digital infrastructure

Within the context of Eastern Partnership deliverables

The main subject of forming the agenda (both in Ukraine and in the Eastern Partnership region) in this field is the National Commission for the State Regulation of Communication and Informatization. In 2018 the Commission on behalf of Ukraine heads the Eastern Partnership Electronic Communications Regulators Network. According to “Eastern Partnership: 20 deliverables for 2020”, partner states will need to develop the strategies for using frequencies agreed upon by themselves and also by the EU. However, such strategy is yet to be developed in Ukraine.

At the same time Eastern Partnership Electronic Communications Regulators Network initiated the process of harmonizing pricing and roaming tariff decrease among partner-states. The grounds for this process have been laid.  The corresponding research provides a general overview of international roaming markets and regulatory base in Eastern Partnership countries, as well as recommendations on implementing a harmonized approach.

Despite heated discussions, Ukraine is yet to make significant steps in  drawing up a national strategy for broadband Internet access development. Such a document, in fact,  should become a starting point for improving the necessary infrastructure in order to harmonize digital markets.

Within the context of the current situation

Nowadays the National Commission for the State Regulation of Communication and Informatization does not possess sufficient powers to carry out regulatory functions in an appropriate manner in compliance with the EU standards.

Partially from these reasons the following issues arise: the lack of complete information on ICT services provided in the country; the absence of systematic analysis of European experience (including EP countries) on implementation and use of modern ICT services and technologies; the absence of a single coordinated methodology of collecting and processing information on developing digital infrastructure; the absence of a single coordination center on strategic planning of the development in this field; a gap between the demand and the technical supply of broadband access.

First-priority recommendations

Annex XVII to Association Agreement states that the regulatory harmonization of parties’ laws in the telecommunications field should begin with the development of a roadmap. The map should be developed and approved within the six months from Agreement coming into force (that is by April 1, 2018). Only after that the work on the regulatory harmonization should start. Ukraine is yet to approve such a map.

In the future the following critical steps  should be added to the agenda of the responsible authorities:

  1. In legislation and regulatory control:
  • introducing the term definition for “broadband Internet access”;
  • implementing fixed broadband access as a common service;
  • developing technical requirements to broadband access;
  • launching a system for monitoring the quality of broadband access services to protect customer rights;
  • drawing up a legal mechanism, providing local authorities with an opportunity to assist telecommunication operators.
  1. Analyzing the current state of broadband access.
  2. Creating a single database of telecommunication networks infrastructure, telecommunication market subjects and mapping the infrastructure.
  3. Monitoring the state of digital infrastructure (including the analysis of competition between all service providers on the Ukrainian digital markets, the analysis and monitoring of the compliance between the Ukrainian legislation and the EU standards in telecommunication).
  4. Implementing motivation instruments both for users and providers.

Trust and security in the digital economy

Within the context of Eastern Partnership deliverables

In 2017 the law “On electronic trust services” (which is, in fact, a technical translation of European eIDAS-regulation) was adopted in Ukraine, and it will come into force in November 2018. On May, 9, 2018 the law “On key principles of ensuring cyber security of Ukraine” came into force, according to which CERT-UA, a government response team for computer emergencies, should be created. In the future it should be joined with similar teams in the EU (EU CERT) and all partner states.  

Therefore, within the frames of the Eastern Partnership, Ukraine has made its first steps on the way to launching a pilot trans-border system of electronic signature and regional system of providing trans-border digital services for business together with the EU. However, there are still challenges to be faced.  

Within the context of the current situation

The existing Ukrainian laws “On electronic digital signature” and “On electronic documents and electronic document management” should be updated in compliance with the Association Agreement within the context of moving to a full-scale regulation of electronic trust services. The law of Ukraine “On information protection in information and telecommunication systems” should also be revised in compliance with the new legislation. And these are only the first steps to be taken. It is essential to continue the work on further implementation of the law on electronic trust services, following its adoption there are more than 25 regulatory acts in line, and even a longer list of standards.

An issue of checking electronic digital signature when archiving electronic documents is yet to be solved. That is why, in the near future the use of electronic document flow in state institutions may remain “on paper” only.

First-priority recommendations

  1. Develop/adapt regulatory acts for implementing the laws of Ukraine “On electronic trust services” and “On key principles of ensuring cyber security of Ukraine”. To be more exact, to lay the basis for legal and technological regulation in the sphere of electronic identification and provide the conditions for legalizing new technologies; revise and coordinate lists and contents of electronic trust services; clearly define in terms of legislation the necessity of electronic digital signature as a component of an electronic document when implementing electronic state management and electronic democracy.
  2. Support the state-owned providers of electronic trust services regardless market fluctuations and trends.
  3. Develop a new plan of implementing the Cyber Security Strategy of Ukraine in coordination with European partners and all interested parties.

eTrade (eCommerce, eCustoms и eLogistics)

Within the context of Eastern Partnership deliverables

To date, in Ukraine there is no national roadmap for developing harmonized eTrade systems between Eastern Partnership countries in compliance with the EU norms. The information regarding any kind of research for preparing such a roadmap, as well as in the sphere of eLogistics (including implementing a digital transport corridor between the Baltic Sea and the Black Sea) is nowhere to be found in open access. At the same time, the issue of harmonizing eCommerce, eCustoms, and eLogistics rules and regulations with the corresponding EU rules and regulations is still open, as of today there is a number of gaps in this field. All these factors question timely implementation of the pilot systems: trans-border eTrade system and the system for proper functioning of the digital transport corridor between the Baltic and the Black Seas.

Within the context of the current situation

It is worth mentioning that measures concerning eTrade are not included in the implementation plan for the development of Digital Economy and Society of Ukraine 2018-2020 Concept, which brings into question the  priority of this segment to the government in the short term.

Now there is a number of issues that should be resolved using state policy instruments:

– the declared mechanisms for electronic payments are absent;

– the activity of most eTrade subjects (except marketing and deals using formal offers) are not legally regulated;

– the issue of using electronic trust services as eTrade component is yet to be solved;

– a single system for protecting and regulating eTrade consumer rights is yet to be developed;

–  the institutional mechanisms for creating a functioning system for personal data protection in this sphere are yet to be provided.

First-priority recommendations

  1. Delegate the function of forming and implementing eTrade state policy to the Ministry of Economic Development and Trade of Ukraine.
  2. Initiate framing the concept and roadmap of eTrade development in Ukraine with all interested stakeholders involved.
  3. Conduct a complex expert analysis of current Ukrainian legislation on implementing Directive 2000/31/ЕС of the European Parliament and of the Council of the EU (the Electronic Commerce Directive).

Digital Skills

Within the context of Eastern Partnership deliverables

To date, the discussions of a national strategy on developing digitals skills and creating a digital skills and digital jobs coalition have not started in Ukraine yet. The preconditions for them were created with the appearance of the Coordination Council for Digital Economy and Society (supervised by the Ministry of Economy), within the framework of which there is already a functioning working group on digitalizing education. Carefully orchestrated actions of this structure will provide for all necessary conditions to achieve the expected Eastern Partnership deliverables  for 2020.

Within the context of the current situation

There is no single government initiative, programme, strategic document, vision that would aim at creating a single complex system of national development of digital awareness in Ukraine. There is a lack of instruments for monitoring and assessing digital skills and competences on the state level. Due to this fact, it is difficult to define the vector and specific actions to develop the sphere of digital skills and competences in Ukraine in the short term. In terms of legislation even such basic terms as “digital skills” and “digital competence” have not been defined yet.

It is impossible to develop the methodology of assessing and implementing independent certification of the digital skills level in accordance with the needs of the labor market without the complex methodology of conducting corresponding research of the situation in the sphere.

The method of collecting statistical data by the state statistics agencies is far from being perfect for the thorough analysis of the situation in the sphere of digital skills and competences.

Therefore, this field is one of the least regulated  in terms of the harmonization of digital markets.

First-priority recommendations

  1. Draw up a complex national strategy in the sphere of digital skills and competences in Ukraine.
  2. Initiate launching Digital Skills and Jobs Coalition in Ukraine following the example of the EU Digital Skills and Jobs Coalition.  
  3. Compile a list of digital skills and competences for target audiences in Ukraine on the basis of Digital Competence 2.0 framework.
  4. Develop a complex methodology of researching the situation in the sphere of developing digital skills and competences in Ukraine.
  5. Ensure the implementation of the modernized national system of digital skills and competences development indicators (based on Eurostat) into the national statistics system.
  6. Conduct an independent research of digital skills level among different groups of population.   

ICT research, innovation & startup ecosystems

Within the context of Eastern Partnership deliverables

National roadmaps for stimulating ecosystem development in partner states are yet to be developed in Ukraine, as well as the map of digital innovation ecosystem that would define the roles for all the participants of the process. Therefore, the existing prototypes of ICT research, innovation, and startups ecosystem have not been structured in Ukraine yet. Despite the fact that the Association Agreement defines scientific and technical cooperation and information exchange as one of key instruments for developing and improving technologies, and the fact that the integration of Eastern Partnership research and innovation systems and programs in EU is a key deliverable for 2020, even after signing the Agreement  the scientific and technological potential in Ukraine continues to decrease.

Within the context of the current situation

There is a lack of functioning mechanisms for cooperation and information exchange in such fields as science, innovation, and information society both within the country borders and within the borders of Eastern Partnership region, as well as between Ukraine and the EU. Special attention should be paid to some spheres of using digital technologies and networks for conducting research and spreading scientific information and knowledge. Aside from existing issues of domestic research and digital infrastructure being far behind and lacking financing for their development, the Ukrainian side does not take systematic part in consultations on Ukraine’s participation in European research and electronic infrastructure. Our country is not represented in the corresponding groups that deal with these issues. This, in its turn, deepens the technological and digital disparity between Ukraine and the EU, undermines the possibility of Ukraine’s participation in EU innovation strategy, and results in negative impact on resolving national and global challenges.  

The main reasons for such situation are the following: 1) ineffective system of managing scientific research and the low quality of the research; 2) low demand for innovation coming from the real sector of economy; 3) a low level of consolidating efforts of the leading stakeholders both on the level of authorities as well as on the level of separate organizations.

First-priority recommendations

  1. Ensure Ukraine’s participation in creating European Open Science Cloud and start preparing the National Cloud Initiative Strategy.
  2. Create and implement national roadmaps for developing digital and technological infrastructures.
  3. Develop an ecosystem map for  digital innovations and key stakeholders in Ukraine.
  4. Initiate launching open innovation ecosystems based on online platforms.
  5. Promote joining to European policy of open science and open innovations in Single Research Area (including integration in panEuropean GEANT Network).
  6. Provide state support for the participation of the best Ukrainian research centers and scientists  in national and European digital infrastructures.
  7. Launch a system of loan and tax benefits to facilitate innovational activity.
  8. Ensure joining the “European Startup Network” and online platforms, inform domestic stakeholders regarding the corresponding EU structures.
  9. Develop a financing system for ICT research and innovations on a competitive basis in cooperation with the industry.


Within the context of Eastern Partnership deliverables

As in the majority of other spheres, developing a national roadmap for harmonizing eHealth systems among partner states in compliance with EU norms has not been developed yet. The process of harmonizing legislation is in the initial phase. Therefore, creating pilot trans-border eHealth services in the region is suspended. However, it is worth mentioning that the corresponding technical preconditions have already been created in Ukraine together with launching eHealth digital service infrastructure.

Within the context of the current situation

A series of issues need to be solved as soon as possible:

1) the absence of an information exchange mechanism between medical information systems also due to the absence of own standards within the Ministry of Healthcare of Ukraine in order to keep and transfer information between medical information systems;

2) the absence of corresponding legislation aimed at protecting personal medical data of patients;

3) a low level of digital skills among medical workers and population in general.

First-priority recommendations  

  1. Ensure launching single medical information space to adopt efficient managerial decisions at all levels.
  2. Follow the recommendations stated in “From innovation to implementation – eHealth in the WHO European Region” report:

– develop national legislation to protect the confidentiality of electronic medical data and guarantee personal rights of patients;  

–  develop and implement policies or legislation on controlling data quality and the standards of their transfer to support eHealth;

– revise on a regular basis national judicial legal instruments related to eHealth in order to take into account technological changes as well as changes in healthcare information landscape.


Given the current situation, in order to move to practical productive actions in all spheres of digital harmonization in Ukraine a pool of strategic documents harmonized with each other and supported by thorough analysis should be developed. Otherwise, decision-makers will not be able to coordinate their actions properly, respond to the challenges of the rapid development and globalization of information, communication and digital technologies. As for the processes of implementing obligations within the frames of Eastern Partnership and Association Agreement policies, they have high chances of being threatened despite some single success stories in separate spheres.