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UK-Ukraine DTA: agreement explainer

Published 20 March 2023

Summary

The UK is steadfast in our support of the people of Ukraine in their brave struggle against Putin’s cruel and brutal war. We will continue to do everything in our power to support Ukraine’s fight and help ensure the long-term security and prosperity of Ukraine, as a free and sovereign nation.

This Digital Trade Agreement (DTA) builds upon this important relationship. Ukraine has strong digital aspirations, and they have identified greater digitalisation of the economy as one of their main areas of focus. With the UK being a global leader in digital trade, we are an ideal partner to help Ukraine harness its potential by agreeing this modern trade deal.

Putin’s large-scale aggression against the people of Ukraine is causing severe disruptions to their economy. This is making it more difficult for the Ukrainian people and businesses to access the goods and services they need to prosper. This historic Digital Trade Agreement, the first of its kind for Ukraine, will expand on the existing UK-Ukraine trade relationship. The DTA secures a range of innovative commitments that support the development of the modern digital economy. This will deepen our economic ties and support Ukraine both now and in the future.

Ukraine’s recovery from Putin’s illegal war will be a symbol of the power of freedom and democracy over autocracy. It will show Putin that his attempts to destroy Ukraine have only produced a stronger, more prosperous, and more united nation. The UK is resolute in its support of Ukraine’s territorial integrity, and we will stand with Ukraine as it emerges as a strong and thriving democracy.

Following the entry into force of the UK-Singapore Digital Economy Agreement, this agreement represents another step in securing modern, wide-ranging trade agreements that harness the benefits of the global digital economy and the modern world.

The following areas are covered in this trade agreement:

1. Open and inclusive digital markets
   • duty-free trade in digital content
   • co-operation on competition policy
   • support for small businesses
   • standards and conformity assessment
   • a more inclusive digital economy that works for everyone
   • open internet access
2. Data flows
   • guaranteed cross-border data flows
   • international data centres
   • personal data protection
   • open government information
   • data innovation
3. Consumer and business safeguards
   • online consumer protection
   • consumer protection against unsolicited messages
   • cyber security cooperation and sharing
   • protection for cryptographic information
   • protection for source code
4. Digital trading systems
   • modern electronic contracts
   • digital authentication
   • digital invoicing
   • paperless trading
   • digitised customs procedures
   • modern logistics
5. Financial services
   • guaranteed flows of financial data
   • new financial services
6. Tech partnerships
   • artificial intelligence and responsible use of emerging technologies
   • collaboration on digital identities
   • stakeholder engagement

Digital trade presents huge opportunities for both Ukraine and the UK. It offers unprecedented opportunities to revolutionise how goods and services are delivered across almost every sector of the economy. It can deliver growth and jobs in not only the finance and professional business services sectors, but also across retail, health, education, engineering, agriculture, manufacturing, creative industries, and many more.

This agreement will create opportunities for businesses – no matter their size – to benefit from fairer, more open trading arrangements. It will also help Ukrainian businesses and people better access the goods and services they need to rebuild their economy. Ukraine sees digital trade as part of their vision for the future – this trade deal will help to make this vision a reality.

The Ukraine deal continues the UK’s leading role in shaping digital trade rules in areas such as:

• trade in services
• financial data
• cybersecurity
• open internet access
• online consumer protections
• electronic documents
• digitised customs procedures
• cutting-edge areas of emerging technology such as artificial intelligence

1. Open and inclusive digital markets

Duty-free trade in digital content

The free-flow of content across borders – whether in the form of an e-book or a music streaming platform – is essential to open digital markets. The agreement secures the free flow of digital content between the UK and Ukraine by guaranteeing that digital content is not subject to custom duties. This guarantee reduces costs for businesses and consumers.

Co-operation on competition policy

The UK and Ukraine will co-operate on competition policy, recognising the benefits that this can bring in tackling the challenges that arise from the digital economy. This co-operation could include exchanging information and experience on the development of competition policies for digital markets. It could also involve sharing best practices on the enforcement of competition law, and the exchange of officials.

Support for small businesses

The UK and Ukraine will address barriers to the participation of small and medium-sized enterprises (SMEs) in the digital economy, helping companies – no matter their size – to take advantage of the vast opportunities offered by digital trade and the digital economy. This will include activities from promoting co-operation between SMEs on digital trade, jobs, and growth to encouraging participation in platforms linking them with commercial contacts.

Standards and conformity assessment

Standards and conformity assessment have an important role to play in protecting consumers and encouraging trade through common and interoperable digital systems. The UK and Ukraine will contribute and co-operate in international fora on areas of mutual interest to promote the development of standards relating to digital trade. Where relevant, this would be through encouraging their respective standardisation bodies to co-operate. Future co-operation relating to standards and conformity assessment could include identifying joint initiatives in the field of standards, and co-operating between governmental and non-governmental bodies, including research or test-bedding projects.

An inclusive digital economy that works for everyone

The agreement encourages co-operation between the UK and Ukraine on digital inclusion. This includes the participation of women and other groups and individuals who face unbalanced barriers to digital trade.

Areas for co-operation include but are not limited to:

• addressing barriers in accessing digital trade opportunities
• improving digital skills
• promoting sharing work on datasets and analysis relevant to inclusion

Open internet access

The agreement confirms both the UK and Ukraine’s recognition of the importance of taking action to protect a free and open internet. This means an internet where users and businesses can access and provide services online without fear of discriminatory network management practices.

This agreement ensures that individuals can connect devices to the internet, provided that these devices do not harm the network, and access information about their internet provider’s network management practices.

2. Data flows

Guaranteed cross-border data flows

The agreement will enable the free flow of trusted data between the UK and Ukraine for business purposes by preventing unjustified restrictions to cross-border data transfer. This means that trade can flourish between both countries. This does not prevent the UK or Ukraine placing restrictions on cross-border data transfers if these are introduced to achieve a legitimate public policy objective; for example, the protection of personal data. This exemption requires that any restrictions are no more restrictive than required to achieve the stated public policy objective. Such restrictions also cannot be applied in a way that would represent an arbitrary or unjustifiable discrimination or a disguised restriction on trade.

Personal data protection

The deal safeguards the UK’s high standards on personal data protection and locks in a requirement for personal data to be protected in both countries. The deal ensures that both the UK and Ukraine maintain domestic data protection regimes and draw on world-leading international principles and guidelines in their design. The agreement also commits both countries to ensuring that their data protection frameworks reflect important principles, including:

• collection limitation
• data quality
• purpose specification
• use limitation
• security safeguards
• transparency
• individual participation
• accountability

Open government information

The deal ensures that both Ukraine and the UK recognise that public access and use of government information is beneficial, driving innovation and growth, and allowing businesses to thrive. Efforts will be made to expand the digital availability of government information for public use, this includes:

• providing individuals with clear routes to request information
• ensuring information is easily readable and can be redistributed
• guaranteeing, where possible, that the data uses common formats that the user can understand
• reducing unnecessary conditions on the use of the information

Data innovation

The agreement will promote data-driven innovation and support the cross-border electronic transfer of information. The UK and Ukraine will do this by collaborating on data-sharing projects involving researchers, academics, and industry and with the possible use of regulatory sandboxes. Both countries will co-operate and share information on the development of policy and standards for data mobility, including data-portability.

3. Consumer and business safeguards

Online consumer protection

The agreement will help make consumers safer online by guaranteeing that the UK and Ukraine have measures in place to protect consumers involved in digital trade. This will help protect consumers from misleading, deceptive, fraudulent, and unfair practices.

The agreement supports co-operation between national consumer protection bodies on digital trade. Mechanisms to facilitate dispute resolution may also be explored.

Consumer protections against unsolicited messages

The agreement allows recipients of unsolicited commercial messages, sometimes called spam or junk mail, to prevent their ongoing receipt. The agreement also requires that those receiving the messages have given their consent.

Unsolicited commercial electronic messages will need to be clearly identifiable and make clear on whose behalf they have been sent. Consumers will be able to act against those sending unsolicited messages who do not comply with the rules.

Under the agreement the UK and Ukraine may also co-operate in cases of mutual concern on the regulation of unsolicited commercial messages.

Cyber security cooperation and sharing

The agreement will help make UK and Ukrainian businesses and consumers safer through deeper co-operation on cybersecurity. This could be done through initiatives such as:

• building capacity for responding to cyber security incidents
• collaboration mechanisms for acting against malicious code
• dialogue and information sharing on cyber security best practices
• workforce development of cyber security skills
• collaborative research and development on cyber security across business, research, and academia

Protection for cryptographic information

Businesses selling IT products will be able to enter the market of either country confident that they will not be required to transfer or provide access to proprietary cryptographic information. This agreement does not prevent the UK or Ukraine requiring a manufacturer or supplier to preserve and make available cryptographical information where necessary.

Protection for source code

The agreement will protect businesses from facing forced transfer of their source code as a condition for entering the other country’s market. The threat of forced transfer of intellectual property such as this can deter businesses from entering new markets. In this agreement, software owners will not be required to transfer or disclose source code as a precondition for use or the bringing to market of the software in the UK or Ukraine. This includes algorithms expressed in that code.

Regulatory bodies, conformity assessment bodies or judicial authorities can also require the source code to be made available for certain regulatory purposes. This is subject to safeguards against unauthorised disclosure, so that the exceptions are not abused. Following such an investigation there is an exception to enable a legal remedy in respect of source code to be enforced. Nothing in the agreement prevents voluntary transfers or access permissions for source code in a commercial context or under open-source licensing.

4. Digital trading systems

Modern electronic contracts

The UK and Ukraine have agreed to ensure that electronic contracts are recognised as valid and legally enforceable. This will have a tangible impact for UK and Ukrainian businesses, with many countries still only accepting physical contracts, and represents a significant modernisation of our trading relationship.

Both countries have recognised the importance of transparency so that electronic contracts can be used more readily in digital trade. The UK and Ukraine have agreed to publish details on e-contracts on a single official government website to ensure that businesses have ready access to further information on e-contracts.

Digital authentication

Doing business electronically – as opposed to having to do everything with physical paper – is quicker and cheaper, especially benefiting SMEs. This agreement means that UK and Ukrainian businesses will be able to use electronic signatures without fearing that they will be rejected purely because they are electronic in form.

Companies doing business electronically will be free to agree appropriate authentication and signature methods for the transaction. However, certification of electronic authentication or the use of signatures from an accredited authority may be required for some categories of transactions.

The agreement promotes interoperable electronic authentication and the mutual recognition of electronic authentication and electronic signatures. It therefore opens the way to more seamless cross-border dealings.

Digital invoicing

The UK and Ukraine will share information and collaborate to promote the adoption of interoperable electronic invoicing systems globally.

In implementing domestic electronic invoicing systems, the UK and Ukraine will do so in a way that supports cross border interoperability. This will include through the consideration of international frameworks.

Paperless trading

Making trade administration documents publicly available in electronic format, and accepting those forms electronically, directly reduces the cost of trade in goods. This agreement means that electronic versions of trade administration documents will be recognised as legally equivalent to paper versions. There will be exceptions only where this would make the process less efficient or where there is a legal requirement for a paper version. The UK and Ukraine will co-operate to promote paperless trading and the acceptance of electronic trade documentation.

Digitised customs procedures

The agreement ensures that neither party will impose customs duties on electronic transmissions on each other, which includes digital content. This will make digital transactions easier, removing burdensome duties that could otherwise dissuade cross border digital trade.

Modern logistics

The UK and Ukraine will share best practices and information on logistics. This could include in relation to last mile deliveries and electric, remote-controlled and autonomous vehicles. Such information sharing could also cover cross-border options for the delivery of goods such as parcel lockers, and new delivery and business models for logistics.

5. Financial services

The agreement recognises the importance of digital trade for the financial services sector, including the increasing role of innovative financial services in the modern global economy. It will help companies in both countries in this key sector to expand their exports.

Guaranteed flows of financial data

The UK and Ukraine will agree commitments relating to the transfer of financial data by ensuring the prohibition of unjust data localisation. Appropriate safeguards remain to ensure appropriate access to financial data by financial regulators and the protection of personal data. Further commitments ensure that the cross-border transfer of information between financial service suppliers is not prohibited or restricted, subject to appropriate safeguards on privacy and confidentiality.

New financial services

The UK and Ukraine have also agreed commitments strengthening our co-operation for innovative financial services. Both countries will seek to collaborate and share knowledge, experiences, and developments in financial services. This will help to advance financial integrity, consumer wellbeing and protection, financial integrity and stability, and cross border development of new financial services, including fintech.

6. Tech partnerships

Artificial Intelligence and responsible use of emerging technologies

The agreement will set out a pathway for the UK and Ukraine to share best practice and discuss frameworks for the responsible development and use of emerging technologies. These should reflect international principles and guidelines, risk-based approaches based on industry-led standards, and technological interoperability and neutrality.

Collaboration on digital identities

The agreement will deliver greater compatibility and interoperability between digital identity systems in the UK and Ukraine. This will support greater regional and global connectivity. This may be achieved through:

• work on technical interoperability of digital identity implementation
• developing comparable protection of digital identities
• supporting international frameworks
• exploring mutual recognition of digital identities frameworks

Stakeholder engagement

The UK and Ukraine will seek opportunities to convene a digital economy dialogue with the aim of promoting the benefits of the digital economy. Input from the dialogue may be used by both countries to inform the implementation and further modernisation of the agreement.