EBRD BSO Annual Report 2013

2013 Promoting public-private dialogue, strengthening advocacy, building capacity, improving business

environment and investment climate

ANNUAL REPORT

BUSINESS SUPPORT OFFICE -

ARMENIA

EUROPEAN BANK FOR

RECONSTRUCTION

AND DEVELOPMENT

This report provides a comprehensive overview of the EBRD BSO’s

activities in 2013 and oulines the work program for 2014. It features

summary of engagement, key facts and figures, and illustrates main

achievements.

EBRD BSO Annual Report 2013

1. The Business Support Office Achievements in 2013

Introduction

The Business Support Office (the BSO) has been established by the European Bank for

Reconstruction and Development (EBRD) in May 2007 with the objective of promoting a

structured partnership and constructive policy dialogue between the state and the private sector

in Armenia.

The vision of the BSO is to become an integral and valuable catalyst between the Government

and business community through ensuring an effective dialogue aimed at improving the

country’s business environment and investment climate.

The mission of the BSO is to raise any key issues that affect the business environment, provide

technical assistance to the Government in the process of developing strategies/reforms to address

identified impediments, and, in parallel, facilitate prior consultations with the business

community and transmit feedback on proposed reforms to the authorities.

The BSO project is funded by the EBRD’s Multi- Donor ETC Fund and submits reports to the

Operation Leader, Head of EBRD’s Resident Office in Yerevan.

Assistance to Councils

Since its establishment the BSO activities included assistance to Business Support Council,

chaired by the Prime Minister, however the activities of the Council were passive due to political

situation (changing appointments, elections) in Armenia.

The dynamic phase of the BSO activities began since September 2009, when upon the request

from the Ministry of Economy, the BSO started active cooperation with the Executive Body (the

Secretariat) of the Inspection Reform Coordination Council (IRCC) to assist in increasing the

efficiency of the Secretariat activities directed to maintain efficient Public Private Dialogue

(PPD) at the highest level between the Government, the business community and donors through

the Council

EBRD BSO Annual Report 2013

Based on the successful cooperation in frames of the activities of the IRCC the Business Support

Office currently continues providing technical assistance to the Secretariats of two Councils:

Inspection Reform Coordination Council (IRCC), established in 2010 to reform the

inspection functions by introducing risk-based inspections based on EU standards;

SME Development Council (SME DC), established in 2011 to serve as a platform for

constructive policy dialogue aimed at identifying and resolving key constraints to the

SME development.

The BSO Objectives

Establish a PPD platform for implementing reforms aimed at business environment

development

Private sector involvement activation

Outline the reform agenda for the Councils, introduce the issues raised by the businesses

at the Council meetings

Enhance public awareness on the undertaken reforms.

Cooperate with the donors operating in the field of business environment improvement,

share information

To achieve its objectives the BSO works in the below-mentioned directions:

Assistance to IRCC Secretariat

Assistance to SME DC Secretariat

Facilitation of policy dialogues with the Private Sector, organization of regular meetings

with business associations and NGOs

Providing technical expertise for developing potential solutions to the raised issues

Day-to-day cooperation with the RA Ministry of Economy

Networking with Private sector, keeping it informed on the reform processes

Cooperation with experts provided by the donors to address particular assignments

Day to day activities aimed at achieving the BSO objectives.

EBRD BSO Annual Report 2013

The BSO Action Plan 2013

Th Action plan included issues, that had been set to be addressed in 2013. Below is the overview

of the Action Plan issues, the achievements and their current status:

1. Issue related to exporting agricultural

products (clarification of product processing

to be taxed)

An official clarification of the article on

fish processing has been published

Met

partially

2. Issue related to Armenia's Industrial Policy

Strategy

The governmental decree about the import

and export process of foods has been

amended: the documentation for import

and the process of export has has been

simplified.

Met

3. Issue related to analyzing of further

development of SMEs in the RA Labor Code

A number of meetings and discussions

were held with SME employers and after

the discussions no problems were raised

regarding the Labor Code.

Met

4. Issue related to imposing a sequestration

on all the bank accounts of entrepreneurs by

tax authorities

Draft law on amendments in the Law on

Taxes has been drafted which specifies and

simplifies the process of bank account

sequestrations

Pending

final

approval

5. Issue related to license fee for

entrepreneurs involved in courier activities

The Draft law on the amendments of the

law on postal communication has been

designed mentioned the decrease of the

license fee from 3.000.000 to

250.000AMD

Pending

final

approval

6. Issues raised by SMEs

Deacrease of the new Cash Control

Machines’ purchase prices (369 600

AMD) for SMEs

Decreased prices 280.000 and 150.000

AMD accordingly for medium and small

businesses

Met

Simplification of the procedure of

criminal investigations of unpaid

taxes (exceeding 2.000000 AMD)

The Draft law is now being discussed at

the RA Government.

Pending

final

approval

Issue of VAT payers registered as

turnover tax payers

The Prime Minister assigned the tax

authorities to register the businesses as

VAT payers that have paid VAT but have

not applied for becoming a VAT payer

accordingly.

Met

7. The merger of the first 2 inspectorates Formation of State Healthcare Inspectorate Met

8. Development of a new law on inspection

bodies

Draft law submitted to the RA Government Met

EBRD BSO Annual Report 2013

9. Implementation of risk- based inspection

system in all the inspectorates

15 inspectorates out of 16 have fully

implemented the risk based system

Met

10. Elimination of inconsistencies and

complicated regulations in RA Law ''On

organizing and carrying out inspections in

Armenia''

A new draft law on Inspections has been

developed

Met

11. Review of agricultural value chain in

respect of SMEs

Is planned to be considered in 2014 Not met

12. Assistance to other activities carried out

by Inspection Reform Secretariat

Several legal acts have been reviewed,

optimization concept has been drafted

Met

13. Raising awareness among the

entrepreneurs in Yerevan and the regions of

Armenia

20 meetings held in RA regions Met

14. Monitoring of turnover tax application

and of other reforms carried out

SME Taxation Research 2013 Met

15. Office website development www.bso.am Met

Press review: excerpts from news

RA draft law "On inspection bodies" has been discussed

April 26, 2013, lragir.am

Chaired by the Prime Minister T. Sargsyan the ninth meeting of the IRCC took place at the RA Government. The RA draft law "On inspection services", which aims inspection system optimization and increase the efficiency.Summarizing the Prime Minister pointed out that the law is aimed at development of an institutional basis for the formation of Ministry- Inspectorate cooperation and specification of responsibilities.

Source:http://www.lragir.am/index.php/arm/0/country/view/82192

Cash control machines will be purchased with more favourable terms October 31, 2013, aysor.am ... for taxpayers with a sales revenue from 58.35 million to 500 million AMD in 2012 (including VAT) the price of the CCM will be 280 thousand AMD. for taxpayers with less sales revenue than 58.35 million - 150 thousand AMD (including VAT). Source:http://www.aysor.am/am/news/2013/10/31/gov/

Small businesses will be inspected again

October23, 2013, www.168.am

According to the Government, for the authorities which implemented the risk-based system, there is a necessity to eliminate the inspection ban. State Environmental Inspectorate under the staff of the Ministry is also included in the list approved by the Council, as the latter has completely finished the implementation of the risk-based system after the IRCC 9th meeting.

Source:http://168.am/2013/10/23/291411.html

EBRD BSO Annual Report 2013

The BSO achievements for 2013

5 High-level Coordination Council meetings, chaired

by the Prime-Minister1.

10-12 press articles highlighting each SME DC and

IRCC meeting, 2 TV channels highlighted the Council

meeting in news, 15 press articles including 1 interview

on the BSO issues under settlement.

Positive feedback from the SMEs on the Turnover tax

(based on the results of the monitoring carried out after

the first term of implementation).

Meetings with SMEs in RA regions, inclusion and

consideration of the specifics of the businesses

operating in regions in elaboration of future reform

projects.

4 meetings of NGOs supporting Private Sector to

discuss sustainable support for the SMEs.

Inclusion of new business associations and NGOs in

the regular roundtable meetings format.

5 focus group meetings with businessmen on

Inspection reform, consideration of their suggestions on

Inspection reform development and Inspection system

optimization drafting.

Timely settlement of the issue related to improvement

of conditions of purchasing new Cash control machines

for SMEs.

Issue related to complex requirements on submission of

documentation during importing food has been settled,

the procedure is simplified.

A comprehensive research on SME Taxation Field-

2013.

Merger of first two inspectorates has been completed.

Issue related to registration of Turnover tax payer as

VAT payer has been solved.

15 inspectorates out of 16 have fully implemented the

risk based system and have confirmed checklists.

1 Detailed information on Council meetings is available on www.bso.am

Achievements at a glance

SMEs claim

Turnover tax regime

90% predictability

Accounting costs for SMEs reduced twice:

60000 AMD per month

30 000AMD

SME tax yearly reports reduced

12 4

Food import documentation

cut twice + only risk based checks on border

73%

27%

50 144 Turnover Tax payers among 68 873 SMEs

Turnover tax payers

Income tax/VAT payers

EBRD BSO Annual Report 2013

Achievements: main directions covered

The BSO activities during the reporting period covered the following directions:

Strengthening of PPD, more intensive cooperation of the Government and Private sector

in terms of reform development.

Effective implementation of new simplified taxation system for SMEs

Increase of the level of timely addressing and settlement of urgent issues raised by

businesses.

Establishment of an effective cooperation format among the business associations in

elaboration of a common approaches and unified policy to represent the private sector.

Increase of the level of inclusion of SMEs in regions into the reform process

Armenia: Doing Business 2014 Fact Sheet

Rank in Doing Business 2014: 37 Rank in Doing Business 2013: 40

Increase in rankings in the following areas: Starting a Business, Paying Taxes, Enforcing Contracts

Press review: excerpts from news

(Deputy Minister of Economy) K. Minasyan sees a necessity for deep reforms for facilitating Doing Business October 29, 2013, www.armenpress.am

"Armenia will introduce a pretentious reform program for facilitating DB. Armenia has improved its position in DB 2014 "Assessment preception for SMEs 2014" report with 3 points which speaks of efficiency of the work undertaken".

Source: http://armenpress.am/arm/news/738142/

Armenia's entrepreneurial activeness level is the highest in

the region. WB

September 8, 2013, www. tert.am

The World Bank (WB) in the recent study results indicate that the activeness level of entrepreneurial activities is the highest among the South Caucasus 3 states.

Source:http://www.tert.am/am/news/2013/10/08/wb-armenia/

EBRD BSO Annual Report 2013

Research on SME taxation field 2013

As a result of a series of meetings with SMEs in the regions of Armenia a research on the

implementation of the new Turnover Tax in the first half of 2013 was carried out. The general

outcome of the research is as follows:

SME units are satisfied with the idea of the new tax, as they are not obliged to do a complex

accounting anymore, as well as do not face difficulties in obtaining unfounded and

undocumented purchases. Instead, they develop simple quarterly reports, make quarterly

estimated tax payments and perform a simple tax calculation.

The research helped to reveal particular problems that need to be regulated, such as

development of one common classification criteria for the definition of SME units instead of the

existing two ones, taxation relief for trade area SMEs, etc.

A comprehensive study on SME units in the taxation

system of the RA has been carried out. As of the first

quarter of 2013, the volume of taxes paid by the micro-

sized units is around 45.2 billion AMD, the above-

mentioned number makes 9, 7% of the overall tax revenue

(467, 7 billion).

The research showed the

quantitative dominance of the trading

sphere over the others and the necessity

to address taxation relief for the trade

area, as taxpayers who are involved in

trade, make around 62% of micro

taxpayers.

The turnover tax rate of retailers was

increased by approximately 1 % in regard of the turnover, which is equal to a 45% increase of

tax burden. If in 2012 taxpayer’s estimated tax was 2 to 2.4% of total turnover, now according to

the operating law, it constitutes 3.5%. Currently, this issue is under consideration at the SME

Development Council.

It was also calculated that around 50

% of all the micro taxpayers

operate in Yerevan.

The anonymous questionarried

helped to understand the concerns

related to the activities of tax

authorities voiced by the taxpayers

of the regions,among which are

forced tax collection actions,

problems with “Supervision procedures” for maternity benefits, checks of deployment of cash

control machines, manipulations in provision of official documents and admission of reports. 2

2 See full text of the research here:

http://www.bso.am/wp-content/uploads/2013/03/Research-on-SME-Taxation-Field-2013.pdf

0

5000

10000

15000

20000

25000

30000

35000

40000

2011

2012

2013

EBRD BSO Annual Report 2013

2. The Business Support Office work program for 2014

Introduction

In 2013 the BSO continued focusing its activities on establishing a private- public dialogue

aimed at effective reforms for the business environment improvement. Regional meetings with

entrepreneurs were vital for understanding the actual needs of SMEs, revealing new problems,

outlining the further reform directions and informing them on the reform processes. The BSO not

only addressed the issues preliminarily mentioned in its annual Action Plan, but also undertook

the settlement of issues raised by the businesses throughout the year.

In frames of its assistance to IRCC Secretariat the BSO experts worked the draft RA Law “On

inspection bodies’’ dicussed it with all the relevant structures and introduced to the RA

Government for approval, focused their activities on optimization of the inspection system aimed

at increasing the inspection effectiveness and efficiency by merging the inspection areas and

separating inspectorates from the ministries. The first successful merger of State Hygiene and

Anti-Epidemic Inspectorate and State Labour Inspectorate took place after the IRCC 9th

meeting.

The BSO succeeded to set a format of regular meetings of NGOs and business associations

supporting Private Sector to discuss sustainable support for the SMEs. 3

Targeted areas

Based on the work done in 2013 the BSO considered the background and the prerequisites for

upcoming reforms, outlining the following areas to address in 2014:

SME taxation relief, turnover tax percentage decrease mechanism for trade area

businesses.

IT sector support legislation elaboration

Reconsidering the import-export procedures

Agricultural value chain consideration

Implementation of institutional optimization of the inspection system

3 http://www.bso.am/the-bso-organized-another-meeting-of-ngos-supporting-smes/

http://www.bso.am/another-meeting-of-ngos-supporting-smes-took-place/

http://www.bso.am/a-roundtable-discussion-on-inspection-reforms-took-place/

http://www.bso.am/ngos-held-another-meeting-to-discuss-sustainable-support-for-the-smes/

EBRD BSO Annual Report 2013

Ensuring further operation of risk- based inspection system in all the inspectorates

Separated rates of local fees for SMEs

Support in implementation of industrial policy strategy.

Press review: excerpts from news

Action plan 2014

See the Action Plan 2014 in Annex

Expected results, indicators and measurement

In 2014 the BSO is planning to measure the effectiveness of assittance to Councils on the basis

of preliminarily identified indicators plus the indicators thet will be revealed in course of the

reform development. The effectiveness measurement will be applied to each reform and will be

amended to the issues available in the Avtion plan 2014.

The Ministry of Economy discusses establishment of favourable regime for IT sector. Karine Minasyan October 19, 2013, www.news.am

In parallel with deepening the Public- private cooperation and IT infrastructure development the Ministry of Economy is going to discuss the issue of tax benefits.

Source: http://news.am/arm/news/176590.html

Inspection Reform Leads To Improved Business Environment 16 January, 2014, gov.am

A Cabinet sitting was held today, chaired by Prime Minister Tigran Sargsyan. The meeting approved a sample checklist and a methodology for risk-based checkups to be carried out by the Ministry of Urban Development-affiliated State Urban Development Inspectorate, as well as the summary description of risk criteria.

Source:http://gov.am/en/news/item/7093/ SME Tax Regime Facilitation Discussed January 17, 2014, www.gov.am Chaired by Prime Minister Tigran Sargsyan, a regular meeting of the SME Development Council was held today in the Office of Government. Addressing the SME representatives in attendance, the Prime Minister said that the proposed amendment seeks to reduce the turnover tax from the currently applicable 3.5% to 1% through more accurate documentation covering all transactions. Source: http://gov.am/en/news/item/7096/

EBRD BSO Annual Report 2013

The table below includes the outlined reform areas for 2014 and the relevant result indicators

that can be estminated now. Depending on the course of activities additional result indicators

and/or reforms can be included.

N Targeted reform areas Result indicators

1. SME taxation relief, turnover tax

percentage decrease mechanism for

trade area businesses.

1. Number of business entities opertating under

the simplified mechanism of turnover tax (trade

area)

2. The average tax percentage of turnover tax

payers for trade area

2. IT support legislation consideration

for startups

1. Comparative amount of registered startups

2. Amount of provided certificates

3. Separation of a product expertize

from the procedure of providing a

certificate of origin.

1. The cost decrease for exporters.

2. The days/period decrease for exporters.

4. Separated rates of local fees for

SMEs

1. The decreased amount of the local fees for

small shops.

2. The increased amount of the local fees for big

stores/supermarkets.

5. Agricultural value chain

consideration

Agricultural concept approved by the SME

Development Council.

6. Implementation of institutional

optimization of the inspection

system drafting training programs

for new inspectors

1. Number of merged inspectorates

2. Number of professionally trained inspectors

3. No duplication in common support services

and facilities

7. Optimization draft concept paper

drafting and approval

Concept approved by the Government.

8. Continue and complete testing

checklists for risk-based inspections

and launch applying the checklists

Number of checklists tested and applied per

inspectorate

9. Creation of Management boards in

each inspectorate

1. Number of available Management boards

2. Amount of meetings held by Management

boards

10. Approval of the draft law on

inspection bodies by the RA

Government.

Adoption of the draft RA law “On inspection

bodies”

11. Approval of the package of the draft

laws on market surveillance by the

RA Government:

Adoption of the draft RA law “On general safety

of non-food products”

Adoption of the draft RA law “On market

EBRD BSO Annual Report 2013

Amendments to a range of laws

related to market surveillance

surveillance”

12. Raising the level of awareness

among the entrepreneurs in Yerevan

and the regions of Armenia.

1. Number of meetings with SMEs held.

2. Overall number of participants.

3. Amount of flyers/brochures circulated.

13. Development of a video tutorial on

starting business in Armenia.

Number of watches, likes and comments of the

video in social sites and other websites.

Cooperation with IFIs and donor organizations

Throughout the year the BSO continued its cooperation with donor organizations by means of

exchanging information, jointly working on materials to raise awareness among the businesses

on ongoing reforms, organizing a range of focus group meetings with businessmen

Collaboration with IFC in the scope of the Inspection Reform

USAID EDMC assistance to the Inspection Reform

The BSO consultants were invited to USAID EDMC staff meeting, where the BSO activities

were introduced and directions for future collaboration were outlined.

Institutional changes affecting the business environment and the BSO activities

During the reporting period there were no institutional changes affecting the BSO activities in

frames of assistance to Councils. There is an ongoing cooperation with the RA Minsitry of

Economy as well with the new Minister who took the office in May 2013. The First Deputy

Minister of Economy is actively involved in both Council Secretariats’ activities.

Lessons learned

Keeping regular contacts and roundtable consultations’ format with business associations

to ensure private sector constant engagement in the reform making process and avoid loss

of credibility towards the activities of the Councils and the BSO.

Due to regional meetings with SMEs it was estimated that the specifics of small

businesses operating in remote areas should be taken into account in the reform making

process. (e.g. when reconsidering the Turnover tax percentage change).

EBRD BSO Annual Report 2013

On the organizational aspect of the Council meetings: it was estimated that whenever

there are preliminary discussions with the Private sector Council members on the agenda

before the Council meeting, they develop a unified approach of representing the issues

thus ensuring an effective course of the meeting.

Independence of BSO

The BSO continues to be a mediator in Private- Public Dialogue thus keeping independence

while arranging contacts and negotiations and representing the Private sectors’ concerns at the

Council meetings.

Conclusion

Throughout the year 2013 the BSO continued its activities fostering proactive involvement of

business associations and NGOs directed at uniting efforts to address the private sector’s

concerns.

By means of providing assistance to IRCC and SME DC the BSO continued implementing a

more constructive PPD between the Government, business community and donors.

The BSO concentrated its efforrs on communication and outreach strategy by means of more

effective networking with private sector, timely information exchange and raising awareness on

the activities of the Councils and the reform processes.

The year 2013 resulted in the increase of the role of the Private Sector as a stakeholder in

policymaking.

More information on the SMEDC and IRCC meetings and the meeting munutes are available

on the BSO website:

http://www.bso.am/what-we-do-2/assistance-to-sme-development-council/sme-development-

council-meetings/

http://www.bso.am/assistance-to-ircc/ircc-sessions/

For the activities highlighted in newsfeed see here:

http://www.bso.am/category/news/

1

As a result of SME taxation research 2013 carried

out by the BSO it was clear that for the numerous

entrepreneurs involved in trade area the tax burden

has increased by 45%.

Decrease of tax burden for the

entrepreneurs involved in trade

are and application of diversified

approach.

Making corresponding

changes in RA Law "On

Turnover Tax"

September, 2014

2

IT sector is one of the most perspective sectors in

Armenia. Many developing countris have

established previliges for start-ups in IT sector.

These kind of previliges create more SMEs and

brings to the development of the sector.

Exemption from business taxes

for IT sector strart-ups, dcrease of

the Income tax for the employees,

and provision of other privileges.

Drafting the relevant

legislative package for the IT

sector support.

September, 2014

3

The Armenia's Industrial Policy Strategy is being

implemented through industrial councils who may

need some technical assistance in regard of

development of sectoral business environments.

Continous Support in

implementation of industrial

policy strategy.

Review or development of

legal acts which will contribute

to the implementation of

industrial policy strategy.

December, 2014

4

The exporters that need a certificate of origin have

to apply for the expertize of their products for each

exporting procedure, though the products are the

same and they have not been modifed after the

previous expertize. It takes 3 days and 30 000 AMD

from the exporter for each expertize.

Separation of a product expertize

from the procedure of providing a

certificate of origin. The exporters

will be able to get the certificate of

origin within a day by paing 10 000

AMD if they have once passed the

expertize procedure for the

exporting product.

The Governmental decree that

describes the procedure of

providing a certificate of origin

needs to be amended.

May, 2014

Deadline

SME Development Council

Action Plan 2014 EBRD Business Support office - Armenia

Issue/Problem Expected outcome# Activities

5

Local fees defined for cigarettes and alcohol drinks

sales vary only in accordance with geographical

location of the sales point. As a result, a

supermarket and a small shop located in the same

area pay the same price for the fee.

Identification of the local fee

amount based on the sales point

location and the size of the latter.

Identification of the size of the

business entity in the law "On

local fees" as an indicator to

pay the fee.

July, 2014

6

The agricultural value chain in Armenia needs to be

reviewed and developed, mostly in respect of small

and medium entrepreneurs involved in agricultural

activities. Our studies in 2013 showed that the main

problem in the agricultural chain is the sales.

Another important issue in regard of agriculture is

the absence of business planning skills.

Provision of new diversified

opportunities of selling

agricultural products, as well as

increase in business planning skills

for entities involved in the area.

Design of an agricultural

development concept for

Armenia. Organization of

Agricultural business planning

seminars in RA regions.

December, 2014

7

In case of failure to fully complete tax liabilities tax

authorities impose a sequestration on all the bank

accounts of the entrepreneur, which temporary

suspends the business activities of the latter.

Imposing a sequestration on the

bank account or accounts of the

entrepreneur by tax authorities

only correspondingly to the

disputed amounts.

Relevant agreement signed

between the Central Bank of

the RA and tax institution.

July, 2014

8

As a result of amendments made in RA Law "On

postal communication" in 2011 entrepreneurs

involved in courier activities pay the same license

fee as those involved in postal activities - 3 000 000

AMD

License fee reduction for

entrepreneurs involved in courier

activities

Making corresponding

changes in RA Law "On postal

communication"

June, 2014

Issues under settlement

9

The liability of investigating economic crimes is

often used by the tax authorities not in order to

identify the crmies, but to apply an additional

inspection on the basis of the decision of the

Investigator. To conduct an investigation and

criminal prosecution the tax authorities base on the

Criminal Code article about fraudulent avoiding

taxes, where crime qualifications are defined by the

subjective decision of the investigator. In addition,

the Article's sanctions are not proportionate to the

conducted acts.

Establishment of judicial control of

the implementation of

investigative functions of tax

authorities.To change the relevant

Article's sanctions making them

proportionate to the conducted

acts., as well as to abridge and

clearly define the Article's scope of

application.

Drafting the relevant changes

in the criminal legislation.

August, 2014

10

Since January 2013 an monthly patent fee has been

set for each employee working for a company

providing realtor services, which has lead to an

essential increase of tax burden and creation of

incompetititve conditions. As a result, the majority

of the companies have suyspended their activities

and have decreased the number of their employees

to a minimal. This, in its, turn, has lead to a drastic

reduction in tax receipts.

Decrease of tax burden for the

companies providing realtor

services and increase of the

number of the businesses in the

field.

Decrease of the patent fee and

establishment of the

procedure for realtors'

registration.

October, 2014

11 December, 2014

Adoption and implementation

of the inspection system

optimization project.

December, 2014

Discussion and resolution of other issues raised by SME-s.

Bodies, authorised to apply suervision, are mostly

included the policy making bodies, e. g. ministries

which leads to conflicts of interest and limits the

inspectorates' independence and sovereignty.

Simultaneously, the diversity of the inspectorates

leads to dublications of the areas under control and

ineffective use of state resources.

Decresing the number of

inspecting bodies and specification

of areas subject to control in line

with the separation of policy

implementing bodies (inspection

bodies) from policy drafting

bosides (ministries).12

Inspection Reform Coordination Council

Adoption of the Law on

Inspection Bodies

July, 2014

13

The main targets, areas of inspection and

methodical options of the inspectorates are not

being discussed with the private sector. The

management system of the inspectorates need to be

reviewed and a PPD boards should be created for

each inspectorate.

PPD based managmend boards

discussing the main programms,

targets and other issues related to

the inspectorates.

Creation of a management

board in each inspectorate.

June, 2014

14

There are a number of inconsistencies and

complicated regulations in RA Law ''On organizing

and carrying out inspections in Armenia'', mostly

the points regarding the carrying out observations

need to be reviewed and clarified.

Availability of simplified and clear

procedures of regulating

inspections.

Final design and adoption of a

new RA Law on Inspections

November, 2014

15

There is no specific regulation of market surveillance

in Armenia. The system used for inspection of non

food products doesn't comply with the international

experience. Non food products safety and market

surveillance need specific regulation.

International system of Market

Surveillance implemented in

Armenia.

Adoption of the draft laws on

Market Surveillance and on

General safety of non food

products.

October, 2014

16 December, 2014Assistance to other activities carried out by Inspection Reform Secretariat

General activities of Business Support Office

Bodies, authorised to apply suervision, are mostly

included the policy making bodies, e. g. ministries

which leads to conflicts of interest and limits the

inspectorates' independence and sovereignty.

Simultaneously, the diversity of the inspectorates

leads to dublications of the areas under control and

ineffective use of state resources.

Decresing the number of

inspecting bodies and specification

of areas subject to control in line

with the separation of policy

implementing bodies (inspection

bodies) from policy drafting

bosides (ministries).12

17

A number of entrepreneurs, SME-s (particularly in

RA regions) are unaware of the reforms that took

place , as a result of which those reforms are not

fully applied.

Raising the level of awareness

among the entrepreneurs in

Yerevan and the regions of

Armenia.

Organizing 25 meetings in

Yerevan and the regions of

Armenia, preparation of

information sheets (bulletins)

and circulation by means of

various business networks and

social networks.

December, 2014

(continuous)

18December, 2014

(continuous)

19 June, 2014

Monitoring of reforms carried out

Development of a video tutorial on starting business in Armenia