This week,

  1. Massive Cyber Attack in Ukraine and Russia;
  2. Did Moldova and IMF find a compromise on IT Park’s Law?
  3. Further Internet regulations expected in Russia;
  4. Uzbekistan adopts e-governance systems;
  5. Negotiations on Central Asian Cybersecurity Council in progress;
  6. Telecom updates in Armenia, Ukraine, and Kyrgyzstan;
  7. Russia announced the testing of unmanned buses.

1. Who Are You, Mr. Petya/NotPetya?

On June 27, many state agencies and oil, telecommunications, and financial companies reported that they had become victims of the Petya ransomware that spread from Ukraine and Russia, blocking corporate computers, encrypting data and demanding USD $300 equivalent in bitcoins to renew access to the systems. Cybersecurity specialists along with Ukraine’s Cyber Police state the attack was executed through the MeDoc’s accounting software, used by many industries in Ukraine including financial institutions. Ukrainian officials blame Russia for the attack, but Russia denies any relation to the malware.

DR Comments: This attack was the biggest cyber-attack in Ukraine’s history. Experts state this malware was not designed to “make money” but “to spread fast and cause damage”. Should you need any assistance with cybersecurity matters in Ukraine and Russia, contact DR Analytica.

2. IT-Parks in Moldova Get a Green Light.

The “Law On IT-Parks” came into force on January 1, 2017. However, since most of its provisions on tax incentives have not been applied yet, it resulted in the delay of establishing the IT-Parks. The law imposes a single tax of 7% on sales revenues for the IT industry. The implementation of the law required introducing amendments to the Tax Code, which in turn required the agreement of the International Monetary Fund (IMF). Initially set against the introduction of the single tax rate, the IMF appears now to be acquiescing since the Moldovan government demonstrated that the budget losses caused by the introduction of the single tax would not exceed $ 8.2 million. All’s well that ends well.

Meanwhile, Moldova continues to develop other IT initiatives: the government approved a bill introducing startup visas for foreign IT professionals and adopted the Anti-Cybercrime Program for 2016-2020, while the Internet provider, StarNet, and IT company, Starlab, launched a new IT-education initiative.

DR Comments: The introduction of a single tax will help the national IT companies to emerge from the shadow economy.  Government and private sector representatives expect the IT Parks will boost the IT market development.

3. Russia Сontinues to Impose Controls over the Internet.

A bill aimed at limiting the use of anonymizers has passed the first reading in the State Duma. The bill may affect the online application stores, such as Google Play and AppStore, where users can find applications to avoid blocking, and even the tech support portal of Microsoft which describes how to configure a VPN in different versions of Windows. Authors of the bill stated that the amendments were developed to further restrict access to information resources already forbidden by the law.

Meanwhile, the Ministry of Communication developed a bill aimed at reducing foreign ownership of Internet Exchange Points (IXPs) to 20% percent. Legal entities and Internet providers will be required to submit to the government information on the registered domains, the range of network addresses used, and the location of network nodes.

At the same time, Roskomnadzor wants to avoid excessive blocking of websites. The regulator developed and send telecom operators its recommendations on the blocking mechanisms: filter traffic using the DPI system, use freely distributed software for analysis, or buy an already filtered traffic from a higher-level operator.

DR Comments: Recently we reported that Russia is developing a mechanism to ban user anonymity on instant messengers. Unfortunately, various measures aimed at increasing the national security through greater Internet controls may be not as effective as the government hopes. In our study The 2016 Cost of Freedom and Security in Eurasia, polled experts evaluated various policies adopted in Russia in 2016 and stated that while costing a lot, they are not really enhancing security, but instead seriously reduce freedom of information in the country.

4. Uzbekistan Is Developing Smart Systems for E-Governance.

The President of Uzbekistan ordered the creation of a working group to develop proposals for the introduction of automated systems for the control and accounting of electricity and natural gas. The group will submit a report containing all technical and economic parameters, as well as terms of implementation and payback conditions for such projects, by early September.

Recently, Uzbekistan also launched the unified electronic system to monitor and control the cotton industry, during cultivation, harvesting and manufacturing stages. The authorities hope that the system would exclude the “human factor” abuses and help to minimize fraud.

Similarly, a new E-payment system in the public transport was introduced, as well. The government already purchased 200 validators and 30,000 cards with NFC-chips. Passengers will be able to reload their cards through the Internet. Andijan became the first city where the new system would be tested over the next 3 months with 150 fully equipped buses.

At the same time, national transport and logistics companies discuss the possible adoption of an electronic logistics system. The new service may optimize the work of both sellers and buyers by combining the applications of cargo owners and cargo carriers. All information about the cargo, prices for transportation services and delivery locations would be displayed online, increasing the transparency of this business sector.

5. Will Central Asian Countries Create a Council on Cybersecurity?

Indeed, it seems so. Kazakhstan has already reached an agreement with Uzbekistan and Kyrgyzstan, and negotiations are underway with Tajikistan to combine efforts in defending against cyber-threats. Experts believe that threats emanating from the Internet are directed against the region, and no single country can effectively fight them. An unstable regional environment makes it difficult to concentrate on national-level developments. The biggest problem of the region is a lack of cybersecurity specialists, however, to overcome the problem, governments and private sectors invest into IT education. For instance, Tajik telecom operator Tcell will launch a Digital Camp supporting young startups and entrepreneurs.

Another way for regional cooperation is through information sharing. For example, Kyrgyzstan and Tajikistan regularly share the data on cybercrimes, cyberterrorism, extremism and online fraud through their security, transport and communication agencies.

6. Armenia And Ukraine To Introduce 4G; Kyrgyzstan To Reorganize Its Operators.

The Armenian mobile operator, Viva Cell-MTS, plans to provide 80-90% of the population of Armenia with access to the 4G+ connection by 2020. By the end of 2018, the company plans to extend the 4G coverage based on LTE technology to 64% of the population. Currently, 52.4% of Armenians have the 4G connection.

At the same time, Ukrainian telecoms are waiting for a decision of the National Commission on the LTE frequencies tender. The National Commission, which carries out state regulation in the sphere of communication and information, should also decide on the LTE frequency range, a decision that may affect how soon the 4G would be launched.

Meanwhile, structural reorganizations are expected for both MegaCom and Kyrgyztelecom. The main goal of the reform, which was announced by the Fund for the Management of State Property of the Kyrgyz Republic, is the “optimization of operators’ activities”.

7. Russia Will Test the Unmanned Bus “Matrёshka”.

The first Russian unmanned bus “Matrёshka” will be tested by the Far Eastern Federal University and Bakulin Motors Group (BMG) in Vladivostok in September 2017. BMG hopes to launch the mass production of unmanned buses in 2018. The cost of pilot versions of 8 to12-seat buses will range between USD $110,000 and $168,000, while the serial production may reduce prices to $50,000-59,000.

DR Comments: According to the “Digital Economy” program, unmanned public transportation should operate in 12 Russian cities by 2025. If you have questions on “Smart Cities” programs and Digital Economies of Eurasia, contact DR Analytica today.