The EU4Digital initiative is working to spread the benefits of the digital single market between the EU and Eastern Europe through a series of initiatives aimed at developing the digital economy, creating new jobs in the community, helping businesses and promoting economic growth.
One of those activities is to support the development of eTrade between different countries. Ukraine’s international trade in the period from January to October 2020 totalled $73.1 billion, of which exports amounted to $35.1 billion and imports $38 billion, facilitated by the Deep and Comprehensive Free Trade Agreement with the European Union, which is Ukraine’s largest trading partner.
How will eTrade affect the digitalisation of Ukraine?
Usually, Ukrainian businesses use paper-based international agreements for cooperation with other countries. In other words, companies use paperwork for registration and support of agreements between representatives of different businesses.
This process is time-consuming and cumbersome. For example, to obtain an agreement, one party signs and seals the paper agreement and sends the second paper document through the international transportation service to its business partner. Essentially, both parties create a document in electronic format first, agree and sign it and then a long chain of “transportation” of this document across borders begins. There is also an alternative: one of the parties is sent directly to the country of their business partner (by regular air or road transport, etc.) to obtain the original document.
This process can take 5 to 10 days, which significantly affects the speed of the turnover and the start of cooperation. However, such solutions as electronic exchange of documents and a cross-border electronic signature will allow international trade to develop more easily.
There are enough alternative solutions in Ukraine today. For example, VILNYY, a service for fast exchange of e-documents (contracts, acts, etc.) with any contractors, is now available with the possibility of unlimited use for all participants. The platform allows exchanging documents in seconds; it can store all the data and provide an easy access to it.
Pilot project within the EU4Digital eTrade programme
Within the framework of the EU4Digital eTrade programme, Ukraine was selected as a participant in the eDelivery pilot project, aimed to improve cross-border trade among Eastern European countries.
The pilot project between Ukraine and Poland provides for the elimination of the main shortcomings of the current exchange of paper documents: financial costs, insecurity of the document, the possibility of damage and the duration of the process. Replacing paper with electronic format will allow the exchange of electronic copies of documents through a secure channel in seconds, which will generally affect the efficiency and speed of business processes within the country and beyond.
Major players of the Ukrainian market were involved in the pilot project:
- EDIN — one of the largest providers of electronic document management in Ukraine.
- Premier Food — Ukrainian leader in catering and meat and dairy products.
- Kernel — a large producer of sunflower oil and agricultural products.
Electronic document management company EDIN, which is directly involved in the eDelivery project on the Ukrainian side, predicts large-scale changes for the country’s economy once it becomes possible to exchange contracts, invoices and other documents in electronic format.
“As part of the eDelivery pilot project, we have already managed to productively exchange an electronic invoice between our customer Premier Food and their Polish partner Aryzta. The second stage of testing the exchange of electronic documents is planned with Armenia. For Ukraine e-document circulation is already commonplace. We have more than 6,000 companies as our partners, of which about 30% are located abroad. Every month, business partners exchange more than 4,000,000 e-documents, including those of legal importance (using the QES, a qualified electronic signature) on our EDI-platform (electronic data interchange). It takes seconds to send one electronic document, while the paper format takes up to two weeks. That is, companies engaged in export or import could optimise their business ten times faster using the international digital format and cross-border signature,” said Eduard Kishkovskyi, Director of Service Support and System Integration at EDIN.
How eDelivery works in Ukraine
The project is taking place in test mode and today the number of participants is limited. For effective implementation of the solution, it was necessary to select companies and product suppliers that would use the process of cross-border delivery electronic solutions for the exchange of documents in Ukraine and in the European Union.
The first Pepool eDelivery access point has already been established in Ukraine, and is managed by the state enterprise ‘Diia’ under the Ministry of Digital Transformation of Ukraine.
The pilot will work in the following way: partners involved in cross-border trade will exchange electronic invoices on the Pepool eDelivery network. The project will be considered successful if companies from Ukraine and Poland can exchange standardised invoice data at the time of invoicing using the eDelivery solution. Then the EU4Digital team will make recommendations regarding the necessary legal, organisational and technical adjustments that need to be made to fully implement the solution at the national level.
“The implementation of the pilot will lay the foundation for the creation of technical and legal mechanisms through which Ukrainian companies will be able to send and receive electronic documents from partners in the EU, USA, Canada, Australia, Singapore, etc.,” said Michael Latynskyi, eDelivery pilot project manager from the Ukrainian Ministry of Digital Transformation.
The electronic document management provider EDIN has participated in pilot projects before, both in Ukraine and in the framework of international programmes. EDIN is now part of the working group on the introduction of an electronic consignment note (CMR note), initiated by the Ministry of Infrastructure of Ukraine. To date, EDIN has carried out more than 200 real shipments using the e-CMR.
In Ukraine, EDIN provides a number of electronic services for businesses in various fields, from retail to banking.
The original article was published on AIN.UA, an online magazine on IT business, startups, technology and entrepreneurship: https://ain.ua/2020/12/18/shho-take-eu4digital-ta-edelivery-i-shho-voni-oznachayut-dlya-didzhitalizaci%D1%97-ukra%D1%97ni/