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Mr Erkki Liikanen

Member of the European Commission, responsible for Enterprise and the Information Society

"E-commerce in Russia"

Conference organised by Russian Association of Networks and Services (RANS), by video-link

Moscow, 18 December 2001

1. eEUROPE 2002

Ladies and Gentlemen,

At the Lisbon Summit the EU leaders endorsed a new strategic goal for the European Union for the next decade: "to become the most competitive and dynamic knowledge-based economy in the world".

The related eEurope 2002 Action Plan identifies concrete objectives and deadlines. Effective monitoring of the implementation of the Action Plan will be ensured by "benchmarking".

We have been in touch on this subject before. Therefore I will not develop this further now. Further details are available from our website.

Increasingly we are working with our partners in Europe to develop similar plans. Candidate countries have developed their eEurope+ Action Plans along the same lines as eEurope.

2. Northern eDimension Action Plan

The Council of Baltic Sea States assisted by the European Commission took the initiative to develop the so-called Northern eDimension Action Plan. This plan was recently approved at a ministerial meeting in Riga to which both Mr Reiman and I participated.

The overall approach of the Northern eDimension Action Plan is to build on national plans in the countries of the region, such as eRussia together with eEurope and eEurope+. We are especially pleased to see that eRussia is now well developed.

The objective is to develop the Information Society in the region as a whole, taking into account the very considerable strengths in the region. The penetration of Information Society services is amongst the highest in the world in Scandinavia; the Baltics are catching up fast and North-West Russia has much to offer in terms of well qualified ICT specialists.

3. Principles of e-commerce legislation in the EU

Let me now first say something about the approach adopted by the EU in legislating e-commerce and about our collaboration to develop e-commerce legislation in Russia.

The European e-commerce framework is a light one. Legislation is limited to what is strictly necessary in order to avoid over-regulation, which would act as a deterrent. It sets rules and principles that are valid throughout the EU only in essential areas, such as personal data, privacy, copyright, legal responsibility, taxation, etc.

It is a technology-neutral framework. This is made necessary by the fact that e-commerce and new Internet services are based on technology in constant evolution. It must be up to industry to choose and implement the most appropriate technological solutions to uphold EU legislation.

E-commerce legislation is complemented by self-regulation, which can be an efficient and flexible alternative to address certain issues: for instance codes of conduct or alternative dispute resolution mechanisms. This, of course, implies some real co-operation between government, industry, and consumers, leading to a kind of co-regulation.

In the event of any disputes, the Commission is in favour of out-of-court settlements, using on-line mediation and arbitration mechanisms. These methods are quick and inexpensive.

Even with EU-wide legal guarantees, many Internet users won't feel safe. A growing number of them experience security and privacy problems. In a year, spamming has tripled and virus attacks more then doubled. The Commission has made proposals to mitigate the effect of these activities.

4. Co-operation on the development of e-Commerce legislation between EU and Russia

Experts from the EU and Russia have worked closely together on the development of e-commerce legislation in Russia, which is now in its second reading in the State Duma. This collaboration was based on the experience the EU has gained in the Directives on this subject which have already been passed.

There is a high degree of compatibility between the EU Directives and the Russian draft laws but there are also some important differences:

  • Both the EU and UNCITRAL have adopted a technologically neutral approach to authentication based on electronic signature rather than the digital signature approach currently adopted by Russia. Although Russia's choice may be founded on security considerations, we would recommend that further consideration be given to the electronic signature approach which has a wider applicability and potentially a longer validity because of its technological neutrality,

  • The EU Directive on electronic commerce covers all information society services whereas the draft Russian law is limited to the conclusion of contracts. Additionally, only persons involved in a transaction benefit from the legal framework of the draft Russian law whereas the EU Directive brings protection to any person using any Information Society service.

These matters were discussed in great detail between our experts, in the presence of a representative of the State Duma. A detailed article by article comparison is available in both English and Russian.

According to our experience, law making is a complex and lengthy process. We recommend that due consideration be given to the differences between the EU Directives and the draft Russian laws described above.

5. E-commerce in the Northern eDimension Action Plan

I would now like to return to the subject of the Northern eDimension Action Plan. The plan consists of action lines addressing topics from high speed research networks to e-Environment.

I am pleased that Russia has agreed to take the lead on the e-commerce action line for which already an initial programme has been defined. Specific topics to be addressed are legal aspects, consumer protection and mutual recognition of digital signature certificates.

The e-commerce Working Group will work with academic institutions in the region to develop a business training capacity for ICT specialists. Current experience to promote the take up of ICT in small and medium size enterprises in the EU will be expanded to Russia and the Baltics.

More detailed information will be posted on the Northern eDimension website. We would encourage the Russian business community to take an active part in this Working Group.

The European Commission has proposed a substantial budget to support these activities. This proposal has passed the first stage of approval by Member States. We are currently in discussion with international financing institutions to make venture capital funds available for improving the efficiency and business potential of small companies.

We should also not forget the possibilities available through the EU Framework Programme for RTD in which we are looking for a significant increase in Russian participation. Thus, for people or companies with ideas and drive, there will be considerable opportunities.

Finally, in this context, I would like to make reference to the eRussia programme, which is expected to receive substantial financial support over the next decade.

There is clearly a commonality of goals between the Northern eDimension Action Plan and eRussia in this region and we would like to enter into discussion with our Russian colleagues to develop joint projects.

6. The Telecommunications Regulatory Framework

No Information Society can flourish without a cost effective telecommunications infrastructure. This means the provision of the services which the user wants, whether being private individual or a business enterprise, at a price he can afford.

In the EU we liberalised the telecommunications sector in 1998, with some country exceptions. We have seen a growth of some 9% in the communications markets annually. This is three times as much as GDP growth. Clearly the communications sector is an important contributor to the GDP.

In addition, we have seen considerable diversification of services available to the user, along with choice of service provider and reduced costs.

We have also been working on a revision of telecommunications legislation in the EU. The larger part of the new package has just been approved by the European Parliament.

With this we will have a clear and transparent regulatory framework which is enforced by independent national regulatory authorities and, if necessary and within certain limits, by the European Commission. Such a regulatory framework is critical to attracting investment, especially Foreign Direct Investment.

The Russian telecommunications sector is developing very quickly with the restructuring of Sviazinvest. New legislation has been submitted to the State Duma. I would encourage a similar approach to that adopted in the EU in terms of the regulatory framework and the independent regulator.

7. Conclusion

Ladies and gentlemen,

If I may sum up, co-operation between the EU and Russia is developing very rapidly. Considerable opportunities are on the horizon and I would encourage participants in the conference to take advantage of these in the Northern Dimension context.

I cannot end my speech without making a brief reference to the wider implications of this work. Russia and the EU have agreed to enter into discussion about the so-called "Common European Economic Space". This future economic space will depend on efficient and interoperable e-commerce services between the our regions. This conference is just one event which should help to make this possible.

I must also express my heartfelt wish that Russia will take the difficult but necessary decisions to become a full member of WTO in the very near future.

I wish you an enjoyable and productive conference today.

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