This week,

  1. The encroachment on Internet freedom in Russia continues;
  2. Telecom updates in Belarus and Ukraine;
  3. E-payments in the public transport in Georgia and Tajikistan;
  4. Russia proposed BRICS a common digital approach;
  5. Ukraine will tighten the e-commerce regulation;
  6. Uzbekistan to introduce the e-Health;
  7. Russian banks introduce a new authentication procedure.

1. Russia Bans Anonymity in Instant Messengers.

On July 25, the Russian Senate passed a law regulating the activities of instant messengers (IM). Following that, the parliament adopted amendments to the Law “On Information, Information Technologies, and Information Protection” introducing the ban on anonymity in IMs. The IM operators would now be required to cooperate with mobile operators in identifying their users and block certain messages at the request of law enforcement.

On the same day, the law on banning anonymizers and VPN services was approved. The operators are required to cooperate with law enforcement in the blocking of websites banned in Russia. If signed by the President, both documents will come into force on January 1, 2018.

Meanwhile, analysts at the Internet Research Institute noted that the Russian legislation contradicts the EU amendments on data storage, which will take effect in May 2018. If Russian operators will keep personal data of foreign citizens without the users’ consent and/or provide this data to the Russian law enforcement agencies without a court decision, they will be breaching the EU legislation and may be subject to penalties.

DR Comments: Both cases emphasize the Russian digital policy priorities as well as a lack of full understanding of digital realities by the government. Experts agree that it is technologically impossible to implement controls over IMs or to block users. Attempts to implement the Yarovaya Law demonstrate the futility of government efforts. The businesses agree to comply with the law, but the cost of its implementation, as well as technical issues, prevent them from doing so. As a result, in pursuing the increased control over the digital domain, the Russian government is opting for solutions that hamper the national digital development in the long run.

2. The Introduction of 4G: Belarus – Complete Success; Ukraine – Introduction Postponed.

Since the introduction of 4G in Belarus, analysts point to the real telecommunication boom in the country. In the 4th quarter of 2016, total LTE traffic reached 2,566 TB, and in the 1st quarter of 2017, it increased to 3,294 TB. Telecoms reported a tenfold increase of the LTE subscribers in the last two years.

At the same time, the introduction of 4G may be postponed in Ukraine. The Ministry of Justice declared that the tender process was organized against the current regulation. Referring to the Economic Code, the Ministry stated that “state bodies do not have the right to make decisions that lead to unreasonable assistance to individual market players”. The Ukrainian National Commission of Communication and Information, that was responsible for the tender, gave priority of purchase to mobile operators, who voluntarily gave up their existing 2G licenses for a guarantee that they will get the same frequencies for 4G.

3. Georgia and Tajikistan Introduce E-Payment Systems in the Public Transport.

The Tbilisi authorities announced the second stage of introducing an e-payment system in the public transport by releasing a new tender. According to the terms, the winning company must ensure the compatibility of a system with all types of Georgian bank cards, as well as VISA and MasterCard. Passengers should be able to pay transit fares with smart cards or via a mobile application.

Likewise, a system of e-payment and travel control in public transport will be implemented in Dushanbe, the capital of Tajikistan, by December 2017. The project is delivered by the Belarusian company, IBA-Group. Installation and adjustment of validators in transport vehicles are performed by local contractors. The system is planned to be tested on 29 buses and 28 trolleybuses.

4. Will BRICS Develop a Common Approach to the Digital Space?

Russia has asked the BRICS countries to discuss the concept of safe functioning and development of the Internet. The initiative was announced by Nikolai Nikiforov, the Minister of Communications, at a meeting of the ministers of communication in Hangzhou, China. The minister stated that ICTs should be viewed as an infrastructure basis for the development of digital economies. Russia wants to harmonize international and national regulations in order to secure the national monopoly on the national ICT regulation and cybersecurity.

DR Comments: Since the adoption of the new Information Security doctrine in 2016, Russia consistently promotes its ICT policy and agenda globally through organizations like SCO, BRICS, and EAEU. In March, Russia has developed and submitted to the UN a convention on information security, to counter cybercrimes and hacking. In April, the Ministry of Communications has prepared a new UN convention on Internet governance to ensure each state has the right to independently manage its segment of the Internet. Along with that, Russia continues to impose its vision on digital programs and standards in EAEU states to preserve the leadership status in the region. Recent examples, for instance, include the digitization of regional economies, taxation of e-commerce and even interstate data exchange system using e-signature. Should you have more questions on the Russian digital expansion, contact DR Analytica.

5. New E-Commerce Regulation in Ukraine.

A bill regulating online commerce was submitted to the Verkhovna Rada. Authors hope the new document will complement the law “On e-commerce”, which did not clearly define the concepts of online seller and online services. The document toughens the requirements for the identification of online stores and services, as well as grants the State Service of Ukraine on food safety and consumer protection (Gosprodobtobsluzhba) the right to block the sites of violators and apply sanctions against providers that do not comply with the regulator’s requirements.

The Internet Association of Ukraine criticized the bill. The Association believes that an increase in the powers of the State Procurement Service (e.g. the right to close websites, application of penalties) will only lead to further corruption.

DR Comments: Our experts noticed a very conflicting approach of the Ukrainian government to ICT regulation. While Ukraine declares the liberalization of regulation as one of its goals, many of its initiatives increase the government control over the ICT, often repeating the Russian approach. For instance, Amnesty International criticized the Ukrainian Doctrine of Information Security for reducing freedom of the Internet. Earlier, we reported that Ukraine prepares its analogue of the Yarovaya Law, allowing blocking of websites without the court decision. Finally, Ukraine blocked various Russian online services and social media. Many believe that the hybrid war with Russia should not be used as an opportunity to achieve greater state control at the expense of societal freedoms and industry development.

6. The E-Health in Uzbekistan.

Uzbekistan begins the implementation of the President’s Decree “On measures for further development of specialized medical assistance to the population of the Republic of Uzbekistan for 2017-2021”. According to the document, an electronic database of patients will be created by January 1, 2018, and the online medical appointments will be available as of January 1, 2019. The Ministry of Health intends to create a full e-Health system in the country by 2020.

About 8 million people are served annually in the country’s medical facilities. According to the official data for 2016, there are 26 doctors per 10,000 people in Uzbekistan. The government hopes the introduction of e-services would increase the efficiency of the national health care system.

7. Russian Banks Will Identify Clients with the Help of Selfies.

A new type of bank client authentication will be introduced in Russia with the launch of the National Biometric Platform. Clients will be able to verify their identity using selfies when applying for a loan or performing transactions remotely. After applying for a particular service, a client would send an email with a selfie and an ID scan to the bank. The automated system will compare the received images with the database and verify the identification. Banks hope the procedure will significantly reduce the user identification time and reduce risks of providing the remote services.

Cybersecurity experts, on the other hand, are concerned that a new type of identification will cause a surge in fraud: criminals can easily get a photo of a person and impersonate him/her. It is safer to use such biometrics along with other authentication methods (like requesting passwords, SMS confirmation of transactions, etc.).

DR Comments: Testing of the National Biometric Platform was scheduled for the end of July 2017 and the final implementation is planned for 2018. Should you have any questions on cybersecurity in the banking sector in Russia, contact DR Analytica.