Study of Small and Medium Enterprises in Azerbaijan - IFC

6. Business Inspections
According to the research results, as well as focus groups, inspections are one of
the four main obstacles entrepreneurs cite as impeding the development of
their business.
View from an entrepreneur:
“In our country, it was always easier to create the business, i.e. go through the registration
process, receive the license for the activity and the corresponding certificates. But to keep
and secure the duration of the business created – here is a real problem, which not all can
manage.”
The absence of a single state-issued and formally approved guidebook on conducting
inspections and the uncertainty of the requirements in the course of inspections give
state inspectors wide possibilities while limiting the entrepreneur’s rights.
Not having a clear understanding of the frequently changing, strict, sometime unpredictable
and contradicting requirements, it is easier for the entrepreneur to solve
the problems related to the inspections through channels other than legal solutions.
Given their relative frequency, the practice becomes almost a permanent solution to
the on-site visits of the inspectors:
View from an entrepreneur:
“The inspector’s work consists in coming , and my duty – to meet him in such a way so
as to not spoil our relationship.”
As mentioned above, inspections preparation and on-site visits are not regulated
by specific legal norms. The norms that exist do not sufficiently clarify how the
inspections are prepared, conducted, what is being checked, and how and what the
reporting and penalizing mechanisms are. There have indeed been legal attempts to
more strictly regulate the inspections, but in practice, this remains an unclear area
of the public sector. Therefore in most agencies the informal means of ensuring
compliance still exists. Entrepreneurs are still inclined to resolve or circumvent
standards’ requirements in an informal way and the readiness of the inspectors to
accept informal payments have created a vicious circle.
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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