Investments Instead of Fines: How to Ensure Compliance with Mandatory Requirements

Russian legislation on state control (oversight) requires compliance with mandatory requirements while minimizing the administrative burden on controlled entities. As such, the main objective of state control (oversight) is not to hold a controlled entity accountable, but to prevent and eliminate violations of mandatory requirements. However, the current norms of the Russian Code of Administrative Offences do not preclude subjecting a controlled entity to administrative liability for violating mandatory requirements in the event said entity properly executes an order to eliminate any violations that are found. This can only serve as a circumstance that mitigates administrative responsibility. As evidenced by the practice of considering requests to extend deadlines for the execution of orders from the government, businesses often need long periods and significant investments to correct the violations. It takes a long time, for example, to supply and install advanced equipment or reorganize production chains. In this regard, it would make sense to develop a pattern of interaction between the state and business to ensure compliance with mandatory requirements, while maintaining the required level of socioeconomic development in a specific territory.