The Ministry of Economy has updated the assessment of business costs from government regulation

The Ministry of Economy has updated the assessment of business costs from government regulation

The White House continues to fine-tune the regulatory impact assessment (RIA) mechanism. Thus, the Ministry of Economy has updated the methodology for assessing standard business costs arising in connection with the implementation of regulatory requirements. For the first time, the document establishes the procedure for calculating the costs of downtime and the profit not received in connection with it. In addition, it is expected to simplify the assessment through the use of reference books with ready-made “historical” data on company losses from the actions of officials. Experts have a positive attitude towards the department’s initiative – it will also help strengthen the negotiating position of business in dialogue with government agencies.

The Ministry of Economy continues to develop documents for restructuring the RIA mechanism. At the end of May of this year, Prime Minister Mikhail Mishustin signed a government decree introducing a financial criterion to determine the degree of regulatory impact of draft acts containing mandatory requirements (see Kommersant of April 13). In October, the Ministry of Justice registered an order from the Ministry of Economy approving the RIA methodology, the composition and content of the summary report for draft acts with a medium and low degree of regulatory impact, as well as the very form of such a report (see Kommersant of June 9). Now the ministry has prepared and posted on a draft order with an updated methodology for assessing standard costs of companies caused by compliance with regulatory requirements – the current one was approved back in September 2015.

In particular, the classification of costs and formulas for calculation have been updated, and the assessment process itself has been simplified through the use of reference books with ready-made data. To adapt departments to new requirements, a special procedure is provided for the draft order to enter into force – from February 1, 2024. The costs themselves are divided into several types – informational, content, losses due to downtime and lost profit due to this, and alternative. For the first time, the document establishes the procedure for calculating downtime costs and lost profits and the procedure for assessing opportunity costs (the amount of profit that the organization would have received if the requirement had not been established). For now, it is assumed that the choice of calculation method will remain with the developer – simplified procedures and reference books with ready-made data will be one of the options. The directory of standard values ​​(based on data for different periods of 2023) contains several data segments – including the standard cost of working time to perform standard operations, the cost of an hour of personnel work by type of activity, the standard service life of certain types of equipment, etc. . It is intended that the reference book of standard estimates can be used to calculate the costs of compliance with mandatory requirements if the same or similar requirements have previously been introduced in other areas of regulation. The directories will be updated by the Ministry of Economy at least once a year.

According to Daniil Tsygankov, associate professor of the Department of Politics and Management at the National Research University Higher School of Economics, without updating the methodology, from February 1, 2024, neither the ability to assess business costs in regulatory projects, nor the quantitative filter for establishing the degrees of regulatory impact, nor the new RIA rules would be available. “Even though the methodology has been finalized for use by departments, business associations that use this methodological approach for their calculations will be able to strengthen their negotiating positions in dialogue with government agencies,” he adds.

“The methodology is a logical continuation of improving the mechanisms that have already been launched as part of the reform of control and supervisory activities. The significant results of this reform, however, require a logical continuation of its fine-tuning,” says Ekaterina Avdeeva, head of the expert center on criminal legal policy and execution of judicial acts of Delovaya Rossiya. According to her, now the assessment of the burden on business will be approached even more comprehensively and justifiably from the point of view of the costs of redundant formal procedures.

Let us note that until now, departments have often refused to describe the possible damage from regulation, citing a lack of data for this, and the introduction of reference books will complicate such evasion as the government’s feedback from sectors of the economy increases due to the digitalization of public administration.

Venera Petrova

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