Study of Small and Medium Enterprises in Azerbaijan - IFC

clearly defined circumstances, or as directed by the court. The validity of any other
rationale should be assessed with the underlying principles of the risk-focused system
in mind.
Expected Impact
The risk-based approach involves limiting the frequency and duration of inspections.
Most government agencies, if given free rein, will inspect a business frequently and
for unnecessarily long periods of time, which diverts substantial human resources
from the core business activity. Thus the authority to run inspections will be clearer
and the frequency and duration reduced, hence easing the overall inspection burden
on enterprises.
6.6.3 Key elements of the reform of government control;
introduce consistent procedures for all stages of inspections
The following key elements will be important in improving the inspection system:
• authorities provide timely notice of an upcoming inspection;
• inspectors present substantial proof of their authority to conduct the inspection;
• inspections are conducted following checklists (a series of questions and a list
of requirements on which compliance is inspected);
• decisions resulting from the findings of an inspection are based on clearly
defined criteria (including that sanctions may be imposed only by a strictly
defined range of officials).
The requirements to be met by businesses and inspected by an inspecting authority
should be contained in a single document in the form of a checklist and made
publicly available.
Additional necessary reform steps include eliminating duplication of responsibilities
between government agencies and clearly defining the rights and responsibilities of
inspectors in carrying out inspections.
Expected Impact
By applying the aforementioned recommendations, entrepreneurs will be aware of
the requirements applicable to their businesses and will know which deficiencies
they need to correct.
Elimination of duplications ensures the efficient use of government resources by
demarcating the areas in which a particular government agency exercises control.
6.6.4 Shift the approach to inspections toward advice and
prevention of offenses
One way to address this would be to revise the overall approach to inspections.
Control authorities should shift their focus from detecting violations and imposing
sanctions to providing advice and enhancing prevention. Inspections should seek not
to punish but to prevent and educate. International experience has shown that, after
Aze r b a i j a n Bu s i n e s s En a b l i n g En v i r o n m e n t Pr o j e c t 107