eTrade is cross-border paperless trade. It is an overarching topic that covers the import-export cycle for goods and services between countries, addressing areas like:
The EU is a single market that allows the free exchange of goods, services and relevant information supported by standardised technology and frameworks between its member states. Among the Eastern partner countries, however, there is lack of harmonisation in paperless trade procedures, both among the countries and with the EU. For example, electronic invoices and contracts are not equally recognised from one country to another.
Through its EU4Digital initiative, the European Union supports trade harmonisation between the EU and the Eastern partner countries – Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. It also supports trade harmonisation among the Eastern partner countries themselves.
As part of EU4Digital, several activities and pilots support cross-border collaboration. The focus is to harmonise the following areas of eTrade:
The aim of the pilot activity is to test cross-border data exchange between several public and private entities using the eDelivery solution, a secure electronic data and document exchange channel. The goal is to see whether such data exchange can be fully functioning from the following perspectives:
After completion of the pilot project, the EU4Digital Facility provided the recommendations for required changes in the above-mentioned areas to implement the full-scale solution and make it fully functioning, as well as legally binding.
Two eDelivery pilots were carried out, one between an Eastern partner and an EU country – Ukraine and Poland – and the other between two Eastern partner countries – Armenia and Ukraine. Find out how the eDelivery solution was tested in Ukraine: Cutting through the paper chain: EU opens the digital path to trade in Ukraine
Virtual site visits were also organised for partner country representatives to observe piloted solutions to support them in making informed decisions regarding the implementation of specific solutions in their country.
eCustoms refer to the systematic and automatic exchange of customs information (e.g. information exchange on empty trucks, risk assessment, data matching, results of customs controls) between economic operators and customs authorities.
When economic operators move goods across borders and interact with customs offices, they experience delays caused by the lack of automation and absence of timely communication between customs offices. As a result, end buyers also experience delays in getting their goods. This happens because:
The eCustoms activity helps to facilitate these issues by providing businesses and governments with necessary cooperation models (e.g. cooperation processes, communication systems), allowing efficient information sharing and exchange. It optimises interaction with customs offices to decrease trade costs for businesses and deliver goods and services faster.
The EU4Digital Facility analysed existing solutions, and their applicability in the region, selecting the SEED (Systematic Exchange of Electronic Data) solution for the eCustoms pilot as the best fit. SEED has been implemented by Customs Administrations of the Western Balkan countries, financed by the EU, and offers:
In the Western Balkans, SEED has successfully tackled the following problems:
The goal of the pilot is to enable the exchange of electronic customs data between the customs authorities of Eastern partner countries and EU member states. This is the starting point when initial (limited) functionalities and data sets are piloted.
The eCustoms pilot was already successfully tested between customs administrations of Belarus and Lithuania. Find out more: Pilot for export dataset exchange goes live between Belarus and Lithuania.
The piloting facilitates the improvement of process of customs data exchange between customs offices, shows the potential progress in customs clearance, risk assessment, and cooperation between cross-border customs administrations. As a result, recommendations for full scale solution implementation are prepared to enable and replicate the solution across the region.
A Digital Transport Corridor (DTC) is a set of data-related services across physical cross-country transport corridors for end-to-end information exchange at all stages of transportation – air, road, rail and sea. This includes services and applications for supply chain stakeholders like information submission for authorities, visibility services, marketplace services, booking and ordering services, and chain composition services.
When logistics businesses move goods and services across borders, they interact with different logistics systems in different Eastern partner countries and the EU. This creates technical barriers hampering the instant exchange of logistics information between countries. In addition, legal frameworks for logistics processes and information systems being developed are not the same in these countries, making logistics processes even longer and more complicated. This translates into higher logistics costs, and delays in the delivery of goods and services.
The Digital Transport Corridor between the Baltic and the Black Sea should help to organise logistics processes and electronic transport data flow so that information is exchanged instantly between logistics chain participants (traders, freight forwarders, customs, other government agencies and consumers), optimising the flow of goods and services and saving time and money.
To facilitate and harmonise logistic information exchange, the EU has adopted the Regulation on electronic freight transport information (eFTI) and is developing supporting acts/specifications to be followed by EU Member States, moving towards a decentralised federated network of platforms, enabling public authorities to acknowledge electronic data as legal.
EU4Digital developed preparatory actions by adopting EU developments in the Eastern partner countries to test the technological approach for information exchange, regulatory environment and organisational arrangements within and between Eastern partner countries. In this context, experts designed a three-year programme, and defined preparatory actions to establish a DTC between the Baltic and the Black Seas. The implemented programme aims to establish a seamless end-to-end logistics information exchange across the transport corridor between the Baltic and the Black Seas or other parts of the region.
Electronic commerce – or eCommerce – refers to the sale of goods through electronic transactions carried out on computer networks. While the EU is a single market that allows the free exchange of goods and services between member states, goods and services cannot easily be exchanged between the EU and Eastern partner countries, due to differences in eCommerce legislation, standards and ecosystem.
For example, EU businesses trading with any part of the world want to trust that goods follow general safety requirements, but face obstacles from the fact that standards and legislation in the EU and Eastern partner countries are not harmonised.
In addition, the EU introduced a new eCommerce VAT package in 2021. This wide-ranging reform affects eCommerce processes across Europe and beyond, and businesses and governments have limited awareness of its impact. In this new reality, the Eastern partner countries need support to move and adapt to electronic commerce.
EU4Digital’s eCommerce activity provides recommendations for Eastern partner countries to achieve smooth electronic trade with the EU, by focusing on harmonisation of three areas, namely:
The goal of these recommendations is to:
To bring the highest value to the EU and Eastern partner countries, the analysis has been used to identify specific challenges, and to design and launch a pilot solution to address these challenges. As a result, EU4Digital launched an eCommerce pilot, establishing national virtual warehouses in three pilot countries – Armenia, Azerbaijan and Georgia - to support retailers, marketplaces, delivery operators and customs to place the products for sale abroad and facilitate cross-border delivery.
The virtual warehouse logs data about products for eCommerce sale, in a format that follows EU and international requirements. Once logged into the warehouse, products can be marketed on any number of international online marketplaces such as eBay or Etsy, while the standardised data allows postal services to launch delivery and ensures seamless cross-border customs procedures.
Find out more about the eCommerce pilot:
Selling Armenian socks to Germany: EU4Digital bringing EU markets closer through eCommerce support
Just one click for the European market – how the EU supports eCommerce in Georgia
Click for trade: EU4Digital helping Azerbaijan to set up for eCommerce
Networking is about building connections and sharing information about trends and actions in eTrade. EU4Digital has many activities and pilot projects in eTrade that require cross-country collaboration. The sharing of information is therefore vital to raise awareness of eTrade issues, stimulate the implementation of reforms and align activities among international stakeholders.
International networking activities include study visits to observe, examine and discuss piloted solutions, study visits to examine existing solutions and best practices outside Eastern partner countries, and events to exchange contacts and share information about trends in eTrade. These events target policy makers, investors, digital vendors, service providers, R&D centres, academia, banks, insurances, public administration, agencies and other eTrade stakeholders. Events recently promoted by the Networking activity include Digital transport days (DTD), SEED site visit, virtual eDelivery site visit to Europe, and others.
The aim of EU4Digital is to support the harmonisation of eTrade to help it become paperless, automatic and unified between businesses and authorities of different countries (in terms of trade processes, communication, legislation and standards). To move closer to this scenario, EU4Digital is facilitating analysis and problem identification, connecting counterparties, testing solutions and providing recommendations.
We can envisage the following best-case scenario in the future of trade:
A business in Stockholm, Sweden has just agreed on a trade with a business in Odesa, Ukraine. Representatives from the two businesses were connected at an eTrade event organised by EU4Digital. Goods were selected through the eCommerce online marketplace, and documents exchanged and signed through computer networks. Without any paper involved, contracts were signed and invoices paid. It was fast and easy to manage these documents, as legislation and technical standards are aligned. This meant there were no additional documents that businesses were not aware of or were not used to dealing with.
The businesses agreed to load the purchased goods in Sweden (country of departure), to be carried by sea all the way through the Baltic Sea where the goods would be loaded onto a truck in Klaipeda port, Lithuania (transit country). The truck would then deliver the purchased goods to Odesa, Ukraine (country of destination).
When loading the goods in Sweden, the business submitted customs documents electronically. This was done before the goods reached the border. The customs authority was able to review the documents beforehand and perform risk assessment. It was easy for customs authorities in Sweden and other transit and destination countries to cooperate, because the processes (e.g. required documents, formats) and communication systems are aligned. This makes the customs operations fast and secure. Nothing illegal can get inside the transport performing operations without customs noticing it.
The goods started the journey in Sweden using sea transport. But it was easy and fast to switch to a vehicle on arrival in the Lithuanian port. The reason for this is the Digital Transport Corridor from the Baltic to the Black Sea. For trading parties, it meant that documents were exchanged instantly so the check and alignment processes happened fast.
Whenever the truck arrived at a border, there was no delay to proceed with the journey. As customs deals were set at the beginning of the journey, authorities only checked that the goods were sealed. The truck moved along.
Eventually, the truck arrived in Odesa, Ukraine. The goods were unsealed and checked. Successful delivery was confirmed electronically so the Swedish business could easily track the delivery.
The two companies look forward to future business.
The EU4Digital Facility promotes key areas of the digital economy and society, in line with EU norms and practices. The Facility is implemented by a consortium led by EY, together with Action Global Communications and CEPS.
© European Union, 2023. All Rights Reserved.
The EU4Digital Facility is funded by the European Union.
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