Can Europe Make It?

E-residency: the citizenship of the future?

Estonia's program of 'e-residency' allows you to be a citizen of the country no matter where you live - an especially lucrative proposal for Remain supporters in a post-Brexit Britain.

Jaak Erik Laja
28 July 2017

Tallinn, Estonia.Estonia has developed an international reputation as a digital solutions’ powerhouse. This reputation has given Estonia a mandate to pursue an ambitious agenda during its recently begun Presidency of the Council of the EU.

Indeed, one of the four priorities of the presidency is a digital Europe which would manifest itself as follows: free flow of data, development of cross-border e-commerce, and digital public services. That being said, with great reputation comes great responsibility, thus expectations for progression in the digital area during Estonia’s EU presidency are high, as noted by Estonia’s special representative to the EU, Matti Maasikas.

Estonia is clearly seeking to meet those expectations, for example through the creation of a special digital information system to organise events and exchange data during Estonia’s presidency and by putting self-driving minibuses to use in Tallinn.

At the same time this presidency is further offering Estonia a chance to contest its geographically and historically peripheral position in Europe by making use of the country’s experience in e-governance and digital solutions, thus enabling a gradual Estonian move towards the ‘core’ of the EU. 

E-residency: contesting traditional forms of sovereignty?

In a long line of Estonian digital innovations the project of e-residency is arguably the most intriguing. The e-residency possesses elements of belonging without physical presence and thus questions the traditional understanding of a country having fixed borders with fixed population.

In addition, the result of the Brexit referendum brought to the forefront another aspect of the e-residency – possibility to remain in some shape within the EU - something that many remain-voting Britons immediately sought for. True to its form, Estonia launched a ‘how to stay in’ (the EU) website that specifically targeted British citizens. Going further, several European and world leaders have symbolically been ‘awarded’ Estonian e-residency.

The e-residency program had in fact been launched before Brexit, in late 2014 with a British journalist symbolically (even more so in retrospect) becoming the world’s first e-resident during an official ceremony. By this point there are over 20,000 Estonian e-residents originating from 138 different countries.

In essence, the e-residency programme can be characterised as a marketing method that attempts to ultimately tie more human and financial resources to Estonia. Normative incentives of efficient e-solutions could then in an ideal scenario develop into a semi-ideological transnational e-Estonian identity. These incentives are not only visible in the case of Brexit – Estonia’s e-residency programme has also proven to be attractive to neighbouring Finnish entrepreneurs.

As previously mentioned, Estonia’s e-residency challenges traditional notions of sovereignty.  In a curious projection of power, this challenge can potentially undermine the sovereignty of other countries (and not Estonia’s), as Estonia’s e-residency promotes flux borders and a belief in transnational digital residency. Moreover – citizen of any other country, when becoming an Estonian e-resident, will acquire an additional new identity.

While authority over an e-resident should still rest with the country/countries of origin, there is potential ground for friction in the domain of taxation, particularly when it comes to companies set up in Estonia. This friction is something that will have to be addressed in the future. 

Data embassy: prelude to a new Vienna convention on diplomatic relations?

Per Estonia’s Cyber Security Strategy of 2014 – 2017 the state is seeking to ‘back up’ its digital databases abroad, in order to ‘ensure national digital continuity no matter what’. Political decision was taken in 2013 and in 2014 a joint research project with Microsoft was agreed upon. The project tested the possibility of running Estonia’s government services on a cloud competing platform as well as analysing the questions of legal protection of a virtual data embassy.

While ultimately a rather logical continuation of Estonia’s ideology of digital solutions the project should also be seen in conjunction with the 2007 cyber attacks that hindered Estonia’s governance capabilities as well as the ongoing Russian military intervention in Ukraine. Seen in this light, the creation of data embassies ultimately means creating the conditions for a digital state in exile if such a need were to arise, paralleling (and ‘upgrading’) previous antecedents of exiled governments.

The data embassy project reached its final stage when Estonia began conducting negotiations concerning the setting up of a data embassy with several countries (Luxembourg and the United Kingdom had been explicitly named). In the end Luxembourg was chosen as the first (thus implying that the idea is to have several virtual embassies) destination, officially because negotiations with Luxembourg had developed the furthest and they offered both good security and a similar level of IT development, but unofficially possibly also because of the British option becoming complicated in light of Britain’s withdrawal from the EU.

As with e-residency, the establishment of data embassies is an intriguing challenge to the concept of state sovereignty. Posing a hypothetical scenario in which Estonia needs to go into ‘digital exile’ – how would Estonia and Estonians actually be governed and from where? An Estonia governed by a data embassy would lack physical territory unless the territory is defined as a building or a room that houses (virtually) around 1 million people. On the other hand, territory is defined as the virtual database(s) that Estonian citizens continuously access, then citizen and state sovereignty would seem to still be enforced.

Nonetheless the arising trans-territorial and jurisdictional questions would at the very least require an update of the Vienna Convention on Diplomatic Rights. Also, the security risks that always shadow national digital databases could ironically be triggered by Estonians themselves: those choosing or being forced to remain on physical Estonian soil could be coerced by an occupying regime to hand over citizen’s ID and the necessary credentials that could result in that regime wreaking havoc within the Estonian digital databases.

Conclusion: persistent digital innovations go hand in hand with contingency planning

Having solidified its status as a digital powerhouse, Estonia is now turning its eye to pursuit of successful policies within the European Union and as an actor on behalf of it.

A mixture of pragmatism and idealism is manifesting itself in the shape of digital policies which are geared to maximise the benefits that Estonia’s prowess in the fields of ICT and e-governance possesses. Having established digital prowess as part of Estonian national identity the next step will be internalising those values in the core of Europe and by extension making Estonia part of that core.

 Estonia’s innovative digital initiatives have received support within the European Union broadly; among its immediate neighbours – for example Finland; and countries whose future would seem to not be tied with the EU – the UK. Estonia’s digital credentials are well-recognised and the mandate lent to make Europe digital is crystal clear. This lent mandate and recognition of Estonia as the beacon of digital future however brings along great responsibility and leaves the country no chance for resting on its laurels.

The Estonian Presidency of the Council of the European Union will need to produce visible results if Estonia’s credentials as a pioneer in digital solutions are to be confirmed again. As digital security is a perpetual issue, Estonia will need to moderate debates soundly and be prepared for attempts to discredit its reputation of digital prowess – the future of a safe digital Europe is at stake.

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