Speech by the Deputy Minister of Economic Development and Trade of the Russian Federation Mr. A.V. Sharonov at the Government's meeting on 20 May 2004 Subject: Draft Law 'On Revisions to the "Licensing of Individual types of Activities" Federal law.
REPORT
by the Deputy Minister of Economic Development and Trade of the Russian Federation
Mr. A.V. Sharonov at the Government's meeting on 20 May 2004 on the subject of
the Draft Law 'On Revisions to the "Licensing of Individual types of Activities"
Federal law.
Analysis of legislation regulating licensing of individual types of activities
in the Russian Federation and its use showed that the following problems in
licensing sector still remain significant:
- unwarranted listing of individual types of activities subject to licensing
which do not conform with the licensing criteria; unfounded clustering of powers
to authorize licensing of individual types of activities at the federal level
that leads to unnecessary expenses and loss of time by entrepreneurs as well
as lack of control by licensing authorities. This problem exists in such types
of activities as opening and running totalizators and gambling facilities, medical
and pharmaceutical business, due to the absence of territorial authorities in
some regions of the Russian Federation. The authority is granted upon the agreement
only to some executive authorities in the Russian Federation regions selected
at discretion by the federal officials;
- complexity of procedures for obtaining and re-registering license;
- unsettled issues of protecting rights of businessmen when interacting with
the licensing authorities;
- lack of clarity and accessibility to licensing information .
In order to to implement the Plan of Legislative Activity by the Government
for 2004, the Ministry designed and submitted a federal law draft to the Government.
The Draft Law stipulates the following:
I. To revise types of businesses subject to licensing.
It is proposed to cancel licensing of 53 of businesses out of 123, subject to
licensing.
It is proposed to cancel licensing of the above 50as of January 1, 2005. Licensing
of the other 3 types (auditing, assessment, surveying sea vessels) is proposed
to be cancelled as of January 1, 2006 due to the fact that to establish self-regulating
organizations which will function as controlling bodies to the economic subjects,
requires time.
Types of activities subject to exclusion from the licensee list are selected,
based on the criteria of redundant licensing. These criteria are based on identifying
the types of activities to be licensed, which are set by the Licensing Law.
The redundancy licensing criteria include:
Lack of obvious risk to violate rights, legal interests, citizens' health and
safety and security of the country, as well as cultural heritage of the nations
in the Russian Federation when issuing a license.(Based on this criteria, it
is proposed to cancel the licensing of medical equipment maintenance, public
broadcasting of audio and visual products);
Availability of other methods of regulating entrepreneurship ensuring prevention
of violation of rights, legal interests, health and safety of citizens, security
of the country, cultural heritage of the nations in the Russian Federation:
market mechanisms including civil liability insurance;
self-regulation mechanisms (based on this criteria, it is proposed to cancel
licensing of auditing, assessment activity, surveying of sea vessels);
other methods of public regulation currently effective (state control and supervision,
the state registration systems, certification, accreditation, other methods
of the state absolving policy).
At the same time, the licensing as one of the toughest form of public regulation
limit entry of entrepreneurs into the market and should by applied exclusively
in cases when it is impossible to prevent damage by other methods of regulating
entrepreneurial activity for explicable reasons.
Types of businesses proposed for exclusion:
All types of construction;
All types of tourism;
Loading and unloading transport;
Assessing and auditing;
Oil and gas businesses apart from supplying energy to citizens;
Production of medicines and medical equipment;
Breeding pedigree and cultivating elite seeds;
All involving operating on hazardous industrial sites etc.
II. Simplification and optimization of licensing order.
To simplify and optimise the licensing procedure, the following is expected:
- Eliminate every possibility for transferring a licensing power under agreement
between federal and regional authorities.
In order to unify the approach to licensing in the Russian Federation, it is
suggested to provide the regional authorities with the power of licensing of
the Russian Federation exclusively by a resolution of the Government of the
RF. However, the federal authorities will keep the power to take executive decisions
for the issues within the their competence even after the authorative power
has been transferred to the regional authorities. (Draft Proposals for Licensing
and Methodical Guidelines).
- Simplification of procedures for obtaining and re-registering licenses.
The Draft Law stipulates the following
shortening the period required to issue a license from 60 to 45 days;
reducing the number of documents required for obtaining and reregistering a
license. The following documents have been excluded from the list
state registration of the business certificate;
registration a license applicant with the Taxation Office Certificate..
- Introduction of the simplified procedure of licensing of individual types
of businesses provided that there is agreement for civil liability insurance..
A simplified licensing procedure is proposed to cover all businesses where licensing
protects citizens' rights (e.g. passenger and freight transportation , funds
investment ). This procedure, however, will not cover licensing that protects
health and safety of citizens and security of the country. The list of businesses
and insurance terms and conditions is provided by the Government.
The right of choice licensing procedure including adapting to the simplified
licensing procedure or applying the previous one has been offered to entrepreneurs.
This mechanism works towards protecting the citizens' property ownership rights
more than licensing during the entrepreneurial activity. Introduction of this
order will facilitate development of market mechanisms regulating the entrepreneurial
activity.
- Protecting rights of businessmen.
It is suggested to introduce a norm of liability for licensing agencies in case
of incorrect fulfillment of their duties or taking illegal actions (or negligence).(inaction).
After adopting the law it is proposed to enter the changes into the Administrative
Offense Code in regards to setting up the level of liability for the licensing
agencies.
- Providing clarity of and accessibility to the licensing information.
A norm is being introduced, according to which a licensing authority will have
to create and maintain a source of information for common use. It should contain
the following:
Undisclosed information extracted from the licenses log;
provisions on licensing of relevant types of businesses;
technical regulations, legislative and legal acts stipulating requirements and
terms and for the licensed business..
The licensing agency provides the candidates for license, licensees and other
stakeholders with the free access to this source unless it is restricted in
the interest of the state security or official confidentiality.
The Draft Law was developed by the Ministry in cooperation with the authorities,
based on the up-to-date analysis of licensing application, public discussions
in various circles and international experience. It is assumed that adoption
of the Draft Law will enable to eliminate the unnecessary state regulation of
entrepreneurial activity, lower the administrative barriers for entrepreneurs
joining the market, and minimize unwarranted functions of the authorities.
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