Vidosava Džagić,Vice-PresidentSerbian Chamber of CommerceSeptembar 27, 2011

IntroBusiness costs related with inspections control amount cca 13 million EUR per year –Unit for Comprehensive Regulatory Reform, 2009

Businesses Spoke

Five roundtables: Valjevo, Niš, Novi Sad, Kragujevac and Kruševac

150 businessmen participated 80 participants spoke Around 15% of businessmen expressed,

generally, positive opinion on inspection surveillance

1. RegulationsProblem Businesses proposed

solution

Intensive production („hiper-inflation“) and complexity of regulations.

Include business representatives in regulatory drafting process – assessment of necessity and content of regulations.

◊ Mechanical transposition of the solutions and standards of acquis communitaire (EU law)◊ Inappropriately short deadlines for compliance

Prescribe methodology and introduce obligation of impact assessment of nascent regulations on businesses, particularly in regard to burden imposed on SMEs

Unclear and uncoordinated regulations:

•Need for interpretations•Not binding• Administrative fee amounts 10,000 RSD

Harmonize transitional periods for implementation of regulations with actual needs of economy sector.Opinions of the ministries should be collected, published and made binding for inspection bodies.Cancel the administrative fee for regulatory interpretations.

1. RegulationsThis is how businesses feel...

2. Training and Awareness

Problem Businesses proposed solution

Businesses are not informed sufficiently.Inspectors are not qualified, competent and trained sufficiently.SMEs do not have enough capacities for tracking of and compliance with the regulations.

Periodical meetings, where the inspectors will inform the businesses with duties arising from effectiveness of the new regulations.Improved organization of businesses for tracking of and compliance with the regulations, as well as for education. Mandatory training programs for and licensing of the inspectors.

Non-disclosure and non-availability of the regulations which are applied.

Internet presentation which will contain all relevant information, primarily all regulations, related to inspection controls on all levels.Guides for implementation of regulations.

2. Training and Awareness

Vs.

3. Exercise of Inspection ControlsProblem Businesses proposed

solution

Often, acting of the inspectors is unregulated or the content of the regulations in question is not available to businesses.

Provide directives for acting of the inspectors in exercise of inspection controls and make them available to businesses.Prepare the guides for business entities, which will contain explanations of their rights and duties related to inspection controls.

Regular inspection surveillance is not subject of planning.As a rule, on-site control is not announced.

Introduce risk-based system of planning of regular inspection controls.Mandatory notice on control, order for control and identification of inspector.

3. Exercise of Inspection ControlsProblem Businesses proposed

solution

Overlapping of the inspections’ competencies. Businesses have impression that inspections “take away“ competency from each other in order to collect more fines.

Clear definition of the inspections’ competencies and coordination of their work. Provide publicity of the inspectors’ minutes, in order to be aware of a subject of and the persons under the control, as well as of the amount of fine for non-compliance.

Only legal part of economy is under the control.Practice shows that only the same business entities are under the control.

Clear regulatory definition of the competencies for combating informal economy.Capacity building of inspections for combating informal economy.Planning of inspection surveillances.Rusk-based approach in inspection controls.

3. Exercise of Inspection Controls

Problem Businesses proposed solution

Sampling costs substantially burden a significant part of economy.

Recognition of the certificates issued by the accredited certification organizations.Planning of sampling and transparency of testing prices.

Corruption. Arrogant and rude behavior of the inspectors.There is no possibility for report against the inspector.

Training and evaluation on the regular basis.Consider the justification for regional rotation of the inspectors.Introduce complaint against inspector’s work.

No efficient mechanism of compensation for damage suffered by the businesses.

Establish efficient mechanism of compensation for damage suffered by the businesses.

4. Penal Policy

Problem Businesses proposed solution

Emphasis in inspection is on punishment, rather than on prevention. Sanctioning is by inertia and under the command.

Consistently put into practice the principle that the volume of fines will not be basic indicator of the effects of inspections operations.

Inspectors are rewarded according to the amount of money collected on behalf of fines and instilled into the Budget.

Introduce a system of warnings and penalty points as in the Law on traffic safety - not immediately write a fine/penalty.Determine the period of adjustment - inspection surveillance without fines/penalties.

4. Penal Policy

Problem Businesses proposed solution

In the course of filing and fining/sanctioning (misdemeanors, economic offences), the experience and economic strength of the business entity is is not taken into account.There is no mitigating circumstance if the undertaking independently observes and reports the error.

Range of penalties should be in connection with the severity of the misdemeanor & economic offence, as wel as with the economic strength of the business entity.

Introduce mitigating circumstance in regard to self-filing

Appeal proceedings last too long.

Shorten the duration of appeal proceedings.

Businesses Should Not Feel Like This...