Study of Small and Medium Enterprises in Azerbaijan - IFC

an inspection, advice and an explanation of the findings are much more effective than
fines in ensuring future compliance.
The government could draw on the policy of many countries in Europe, which
regulate the outcome rather than the process of compliance. Entrepreneurs are free to
choose from a broad range of tools and methods of achieving safety, with due regard
for new technologies.
Expected Impact
Lower cost of compliance for entrepreneurs and a greater variety of choice
for compliance lowers the necessary inspections frequency and thus eases the
administrative burden on the enterprise. Timely provision of technical advice from the
inspection also increases mutual trust and enhances adherence to the standards and
other requirements. Business inspections should not be seen only as a punishment
mechanism but also as a service that provides guidance.
Annex 6.1 Presidential Decree No. 790 on Containment of Intrusions, Impeding Entrepreneurship’s
Development, dated September 28, 2002
This decree provides a number of instructions addressed to specific government agencies that may engage in inspecting activities. Such
assignments, addressing the corresponding state institutions, are formulated in this decree, and particularly:
(I) To the Internal Affairs Ministry: liquidate the Economic Crimes Investigation Department of the Ministry of Internal Affairs, forbid the
interference of law enforcement bodies into entrepreneurs’ activities (besides cases based on court decisions), stop the unnecessary interference
by state road police in the operation of transportation, improve its work, reduce its personnel by 15 percent.
(II) To the Tax Ministry:
• Eliminate the drawbacks of the existing tax payment system, including the illegal advance tax payment;
• Prohibit tax inspections in situations that exceed the ones provided by the legislation, as well as inspections that are unrelated to the
Ministry’s authorities;
• Decrease the number of on-site tax inspections, and stop duplicating the work of tax inspectors and other non-justified inspections;
• Enforce the responsibilities of tax agency officials provided by the legislation and improve taxpayers’ service;
• Undertake measures to provide timely and objective examinations of complaints related to the actions of tax agency officials;
• Prohibit tax bodies from limiting the economic activities of entrepreneurs, including their operations on bank accounts;
• Provide operations on the tax control in accordance with the legislation.
(III) To the State Customs Committee: Reduce illegal intrusion in entrepreneurs’ activity, improve operation of the customs committee,
increase control in relation to smuggling and inform the President of Azerbaijan on the work being performed.
(IV) To the Ministry of Communications and Public Health, as well as to the leaders of other corresponding central executive
bodies – eliminate the illegal inspections conducted by these bodies and their structures, and the obstacles created to entrepreneurs,
and introduce measures to limit further interference in entrepreneurs’ activities.
(V) To the Heads of the Executive Authority of the cities and regions, in a 10-day period (from this decree date), liquidate different
structures performing control and inspection functions of these bodies (departments, managements, centers, bureau, etc.).
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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