How to Lower Regulation Burden: Calculate the Execution Costs or Structure Them?

KEY CONCLUSIONS

The regulatory guillotine is working well

“In our view, given the task, ambition, speed, and scale, [the regulatory guillotine – Ed.] has worked very well indeed. A few criticisms have been voiced, but only a few. They can be cleared up as we go,” Alexey Khersontsev, State Secretary – Deputy Minister of Economic Development of the Russian Federation.

“Despite the criticism of the regulatory guillotine, it has to be admitted that the results are impressive. There has never… since Soviet times, been such an impressive clear out of the regulatory field. Everyone says there is a ridiculous number of laws and regulations, but there has never been such a process to fix it before this one,” Andrey Kashanin, Deputy Director, Institute of State and Municipal Administration, Higher School of Economics.

“My personal opinion is that the regulatory guillotine is the best chance the business and public have had to participate in the legislative process. I was rather concerned to hear “let’s guillotine membership”, or somehow cut business out. That would be absolutely the wrong thing to do,” Dmitry Timofeev, Vice President for Government Relations and Corporate Relations, PJSC “PIK-Specialized Homebuilder.

The register of mandatory requirements will make life easier for business and supervisory authorities

“Regarding the register of mandatory requirements. This register is now being created on the basis of Federal Law 247. The work is proceeding smoothly. We need it to be a big, even if not huge, reference to be used by all our other information systems. Using this reference, we will be able to make our analysis better, see the violations, where and what to improve. But the register of mandatory requirements has another aspect – the service part. We believe that if we can make the register what we want it to be, it will allow us to create new services for business to check itself, aligned with the specific entity being monitored,” Alexey Khersontsev, State Secretary – Deputy Minister of Economic Development of the Russian Federation.

“The need for the register is clear. Because I think that the supervisory agencies often check only the most obvious requirements not because they are obvious, but often because they do not themselves know what requirements exist and should be checked,” Alice Bezrodnaya, Deputy Minister of Justice of the Russian Federation.

“The register is definitely needed. Now it is at the conceptual stage. The main task now is to ensure a high level of digitization, without that, of course, given the huge [volume – Ed.] of requirements and the monitoring technology described in [Federal Law – Ed.] 248, we will not get far,” Evgeny Danchikov, Minister of the Government of Moscow, Head of the Main Control Department of the City of Moscow.

PROBLEMS

Businesses penalized for minor infractions

“The fact that inspectors often penalize you for something simple, obvious, and, really, not always significant in terms of danger, is a problem, but becoming less so. …When we address this, and we will certainly address it, we will quite quickly see that if you carry out a thousand inspections and every inspection ends with a fine for having a 14-point font instead of 12-point, I think we will make an administrative decision on the value of those requirements and the inspections themselves,” Alexey Khersontsev, State Secretary – Deputy Minister of Economic Development of the Russian Federation.

Reform of the supervisory authorities requires improvement

“We have even more work that we have already done. <…> A lot has indeed been done, but I think it is high time that quantity became quality. We read all the acts in the Ministry of Justice, review and analyze, we have a lot of criticisms to make, unfortunately. Because there is a huge volume. And the volume, of course, has accumulated over many years, and no one has ever really tried to sit down and sort out what to do with that huge amount of work,” Alice Bezrodnaya, Deputy Minister of Justice of the Russian Federation.

“The regulatory guillotine has been used on only 24% of the total amount of regulatory acts. What does that tell us? That there is more work left to do that done. But what’s most interesting is that only 11% of the cancelled regulatory acts were never checked in supervisory procedures. So, the question comes up, why did we cancel the rest? Apparently, that 89% was those Soviet acts,” Andrey Kashanin, Deputy Director, Institute of State and Municipal Administration, Higher School of Economics.

SOLUTIONS

Optimizing requirements will reduce the number of administrative violations and help transition to a system of warnings, rather than penalties

“Colleagues sorting out which requirements are mandatory will result in us being able to reduce the number of administrative violations, first of all. But the second point is very important, to separate or move to a system of penalties that will mostly be warnings, rather than automatically involving penalties,” Vladimir Pligin, Co-Chairman, Association of Lawyers of Russia, Honored Lawyer of the Russian Federation.

“Look and find the requirements with the least danger, that is, where cancellation will not have any adverse effect. …These requirements … place a financial burden, sometimes a large one, on both businesses and the state. <…> Work is progressing in this area,” Evgeny Danchikov, Minister of the Government of Moscow, Head of the Main Control Department of the City of Moscow.

“We are introducing an iron rule – if a document is in the state databases or official registers, it cannot and should not be demanded. What for?” Dmitry Timofeev, Vice President for Government Relations and Corporate Relations, PJSC “PIK-Specialized Homebuilder”.

Use of self-verification and self-regulatory organizations

“Naturally, we really like SROs because they unify the market and provide suggestions. We like it when colleagues from an SRO raise the issue of making membership of their wonderful organization mandatory. But that is a separate matter, so mandatory membership of SROs can, on the whole, be looked at when the pendulum, swings back the other way,” Alexey Khersontsev, State Secretary – Deputy Minister of Economic Development of the Russian Federation.

“I really liked the self-verification service on Samoproverka.rf, I think that’s the name. If I recall, it already covers 5–6 classifiers of tax documents, but only for one region – Nizhny Novgorod Region. It’s still the same as a year ago, just the one region on the website. Although it's great, the cataloguing is very good,” Dmitry Timofeev, Vice President for Government Relations and Corporate Relations, PJSC “PIK-Specialized Homebuilder”.

“We have to completely change the attitude to business and the way we interact. Here today, self-regulatory organizations have been mentioned. <…> What is an SRO? It is a responsible business, that makes its own decisions and knows the consequences of those decisions. Because we have market analysis,” Andrey Guryanov, General Director, League of Waste Paper Processors: Director for Interaction with Federal Executive Authorities, PTsBK Group of Companies.

Read more in the Roscongress Information and Analytical System roscongress.org.

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