More information about the RIA and AIA

Regulatory impact assessment (RIA) of regulatory legal acts and draft regulatory legal acts is a new mechanism intended for improving the conditions for investing and doing business in Moscow. The procedure for performing the RIA is stipulated in decision of the Moscow City Government No. 99-PP of 4 March 2014 “On assessing regulatory impact when drafting regulatory legal acts of the Moscow City Government and on assessing actual impact of regulatory legal acts of the Moscow City Government.”

Regulatory impact assessment (RIA) is assessment of draft regulatory legal acts. AIA is performed when a regulatory legal act has been in effect for some time.

RIA is aimed at choosing the best regulatory option among all the alternatives, on the basis of analysing its anticipated positive and negative consequences. Special attention is paid to reducing those provisions in draft regulatory legal acts that result in excessive obligations, prohibitions, restrictions for businesses, investors and other business actors, and might result in unfounded expenses on their part and/or on the part of the Moscow City budget.

The principal aims of actual impact assessment are to determine whether the regulatory goals stated were achieved, to determine the expenses incurred by various groups linked to introducing the regulation, to determine whether there is need to alter the regulations to ensure a better balance of costs and profits.

The RIA and AIA procedure sequence:

  1. A Moscow executive authority (hereinafter referred to as the Moscow EA) publishes on its site:
  • a notification of performing an RIA or AIA and public consultations;
  • a draft regulatory legal act or regulation concept (for the RIA);
  • information and analytical materials for reference, a questionnaire.
  1. Public consultations are held (hereinafter referred to as PC).

Any interested parties (entrepreneurs, individuals, members of business associations, members of consumer associations, etc.) may submit to the authorities responsible for the assessment their suggestions for amending an act in force or a draft act. Suggestions may be submitted in any form to the person in charge, or as responses to public consultation questions assembled in a questionnaire. In addition, a public discussion on the Internet and other PC forms are possible: roundtables, focus groups, direct appeal to business associations, etc.

  1. Pursuant to the results of the public consultations, the body performing the RIA or AIA compiles a summary of suggestions.

It should include all the suggestions submitted, and a justified Moscow EA stance on each of them (accept / partially accept / reject).

  1. A consolidated report on the RIA or AIA is prepared.

The report on the AIA:

  • determines the principal groups whose interests are affected by the introduced regulation, assesses the number of members in each group;
  • assesses whether the regulation allows the problem it was intended to resolve to be actually resolved;
  • assesses actual costs incurred by the groups whose interests are affected by the regulation, as well as budgetary expenses;
  • analyses actual positive and negative consequences of the regulation;
  • compares expenses and profits caused by the regulations introduced;
  • concludes whether the regulatory legal act should be left intact, amended or repealed.

In its RIA report, a Moscow EA:

  • specifies the problem the proposed regulation is intended to solve;
  • determines the objective(s) of the regulation (that correspond(s) to the problem);
  • determines possible means for achieving the objective: specific regulation instruments;
  • determines the principal groups of entrepreneurs, investors and other actors, other interested parties, including public authorities, whose interests are affected by the regulation under consideration, assesses their numbers and the numbers’ dynamics;
  • for groups whose interests are affected by the regulation, assesses the anticipated expenses and profits involved in choosing various options of achieving the objective;
  • assesses the anticipated negative and positive consequences of various options for achieving the objective;
  • provides arguments for selecting the preferred regulation alternative (instituted in the draft regulatory legal act or the concept of a regulatory legal act);
  • determines specific quantifiable regulation results;
  • determines methods for monitoring effectiveness in achieving the objective of the regulation instituted by a Moscow regulatory legal act, organisational, technical, informational and other measures, and indicates the corresponding expenses for Moscow’s budget.
  1. The consolidated RIA (AIA) report is posted on the website and sent to the Department of Economic Policy and Development of Moscow for preparation of the final RIA (AIA) findings.

In its findings, the Department of Economic Policy and Development of Moscow draws conclusions on whether the person in charge observed the established procedure for performing the RIA (AIA), whether the information in the consolidated report is well-argued and complete and, most importantly, whether the choice of regulation proposed by the drafter is well-founded. If necessary, the Department of Economic Policy and Development of Moscow may hold additional public consultations. The findings are also posted on the website.

  1. The RIA consolidated report and the findings on the RIA report are included in the set of documents related to the draft regulatory legal act submitted to the Moscow City Government for consideration.

The findings on the AIA report are sent to the Moscow EA that performed the assessment; following that, the EA has ten days to make a decision to amend, repeal, declare invalid or retain the regulatory legal act of the Moscow City Government in the wording in effect at the time the actual impact is assessed.

The decision is published on the website within 5 days.

Shortly, our portal will post information on public consultations held in 2014.

Six acts on various subjects were selected as the first to be analysed:

  • the issues of reimbursing costs incurred by investors during implementation of investment projects;
  • lease-based relations with private educational organisations (kindergartens);
  • developing the system of healthcare provision by private healthcare medical organisations and individual entrepreneurs;
  • distributing and awarding subsidies out of Moscow’s budget to support small and medium-sized businesses;
  • distributing and awarding employee training subsidies out of Moscow’s budget;
  • developing competition in Moscow through the work of the Public Council on developing competition.

 Complete information on the list of RIA 2014 acts

CITY

BUSINESS


In the absence of a regulatory impact assessment (RIA) mechanism

- Approves regulations without additional costs of communicating with the business community

- No need to spend time and resources on discussions

- Bears the risks that the business community will not accept the regulation (non-compliance with requirements, moving into the “gray” economy)

- The interests of businesses are not fully taken into account

- Businesses, particularly small ones, have difficulties conveying their opinions to the regulator

- No open information about impending changes (at the same time, certain organisations may have the advantage of possessing this information)

- The need to adjust to changes in the regulations over very short periods of time


When there is an instituted regulatory impact assessment (RIA) mechanism  

- Actual data from businesses required for a more objective assessment

- Information on the perception of the draft / initiative by the business community

- The possibility of constructing the regulations in such a way as to ensure that businesses do not “shirk” compliance with requirements

- Improved regulation quality

- Possibility of conveying their opinion to the authorities

- Excluding from regulatory acts provisions that result in excessive restrictions and costs for businesses

- Predictability of changes, possibility of adjusting to them in advance

- Increasing the openness of the authorities’ work

- Costs of communicating with the business community and taking into account the opinions received

- Time and resources for shaping suggestions for public consultations