EAEU started developing an Agreement on regulatory “sandboxes” in the EAEU

_ EEC. Moscow, 28 April 2018.

“The creation of a regulatory sandbox system of the Eurasian Economic Union is one of the priorities of the initiatives approved by the Heads of States of the Union. It’s a realistic possibility for the project initiators, regulators of the Eurasian Economic Commission to test innovative solutions, new business models, identify their strengths and weaknesses, better understand all possible risks and test regulatory approaches before they are legally enshrined,” – the Member of the Board – Minister in charge of Internal Markets, Information Support, Information & Communication Technologies of the Eurasian Economic Commission (EEC) Karine Minasyan reported at the first meeting of experts devoted to the discussion of the regulatory “sandbox” system to be created in the Eurasian Economic Union (EAEU).

Digital transformation of industries and markets establishes conditions of high uncertainty for activities and decision-making both for innovators and regulators. This is particularly acute at the integration level. In new industries and markets, countries often adopt certain regulatory approaches without being able to assess their effect on real economic processes within the State and the EAEU common markets.

The Union regulatory sandbox should become a medium for experiments and modeling. It is possible to create temporary regulatory frameworks there, reduce testing risks for pilot projects, build up closer interaction between regulators and innovators, exchange experience, best practices and approaches.

At the output, the regulator will receive time-tested and working “models” of legal regulation, and the initiator – pilot projects, tested within the framework of the law and in real or close to real market conditions, as well as reduction of piloting costs through the access to data, infrastructure and expertise agreed between the regulators of the EAEU countries.

“The effects from using “sandboxes” can be quite perceptible – reduction of project piloting time in the Union by almost a half; reduction of costs for businesses and the State as the result of identified risks, elimination of legal gaps, and thus a more correct distribution of resources,” – noted the Head of the EEC project on digital transformation Alexander Petrov.

In addition, the experts noted that the “sandbox” could be a tool for testing approaches to the transition of the regulatory and legal framework into the digital format through algorithms, ontologies and data models.

Following the results of the meeting, its attendees proposed to start drafting Agreement on regulatory “sandboxes” in the EAEU, which will allow applying them within the legal framework of the Union.

Nowadays the “sandbox” mechanism which allows creating a safe environment for technological, regulatory and organizational development of innovative solutions is becoming increasingly popular. At least 15 jurisdictions around the world have already launched regulatory “sandboxes” to perfect primarily financial and technical solutions.

The Board’s analysis of international experiences with “sandboxes” enabled to identify that an important trend should be the establishment of transboundary “sandboxes”. Their models are being worked out in the United Kingdom and the European Union, and they have been already applied in France and the United Arab Emirates.

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