Study of Small and Medium Enterprises in Azerbaijan - IFC

Other consequences include: financial sanctions, repeated inspection of the same
entity, suspended enterprise activity, asset confiscation, annulment of the functioning
agreements, and non-official payments.
The practice of imposing fines causes some dissatisfaction among the entrepreneurs.
In depth interviews with entrepreneurs show that minor issues that do not harm safety
and health standards end in fines being imposed.
View from an entrepreneur:
“Inspectors give us no conditional time to eliminate the problem or drawback. Even if this
criterion was entered in the number of the mandatory norms recently, or when this is the
first violation of the enterprise, you can’t expect understanding from the inspector. They
immediately impose a fine. They do not worry much about the fact that I will eliminate
this problem eventually.”
6.2.2 Half of the entrepreneurs who face inspection
consequences make unofficial payments
No matter what type of consequence the enterprise faces and what the violation was,
half of on-site inspections also result in unofficial payments being made.
In the entrepreneurs’ opinion, the informal relations develop as a result of several
issues that govern the course of on-site inspections:
• The inspections process and decision-making by the inspectors are not
transparent;
• Technical requirements are over-regulated;
• The appeals system is not satisfactory;
• Entrepreneurs do not know their rights.
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St u d y o f Sma l l a n d Me d i u m Ent e r p r i s es in Az e r b a i j a n