by Konstantin Garibov

The Russian State Duma is debating a package of bills designed to liberalize conditions for small-scale enterprises. Earlier, President Dmitry Medvedev called for removing administrative barriers hampering the development of small-size business.

The proposed package includes a bill that reduces the number of inspections of private companies and a bill that cuts the inspection powers of law-enforcement entities.

Law-enforcement authorities will be stripped of their current right to inspect production or storage premises, as well as to verify financial documents. Inspections will only be allowed if there is information that something threatens people’s life or health. This means that dishonest policemen will no longer be able to extort money from businessmen.

The functions of the agencies will also be adjusted. Last year alone, more than 20 million inspections of small and medium-scale enterprises were carried out. Visits by all sorts of commissions cost businessmen about 10% of their annual turnover. Part of this money was spent on bringing enterprises in line with the required standards, but a significant percentage of it landed in the pockets of corrupt inspectors.

Under the new rules, a company can be inspected only once in three years and the combined length of inspections should not exceed 72 hours a year. As Deputy Chairwoman of the State Duma Budget and Tax Committee Oksana Dmitriyeva explained, “the proposed mechanisms are designed to prevent excessive control of small-scale business on the part of various inspection bodies. The project has on the whole been approved. As debates continue, new and perhaps even more effective proposals may emerge. The lawmakers expect businessmen to be cooperative and come up with their own initiatives, some of which may be included into the final version of the bills.”