Law of good intentions

-- 19 May 2009 --
TEXT: S. ALEKSEEV
PHOTO: Alexey Bannykh - Fotolia.com.

As industrial output in Russia keeps plummeting, unemployment gains momentum with frightening speed. For the last several months the government’s efforts were focused on large, ‘strategic’, enterprises.

Now, when those efforts have largely failed, the state is turning to small and medium companies, seeking not as much to increase national wealth, but to keep people off the streets.

The government is in the delicate position: small business is not seen from Moscow to oversee, but politically too important to let prey on it.

Federal Law # 294-FZ ‘On Protection of the Rights of Legal Entities and Sole Traders during the State and Municipal Control (Supervision)’ is deemed to guard business from excessive control by numerous government and municipal inspectors. So numerous, that the legislator does not bother to specify them. For a moment, it might even look as if the government has no idea who can investigate the affairs of companies in Russia.

The law is full of incisive features. My favourite - and here you might want to take a pen and a notebook - is that investigations carried out by the authorities are free of charge. Gosh! Did they say ‘free of charge’?

Gosh! Did they say ‘free of charge’?
 

According to the law ordinary or ‘planned’ investigations must be scheduled in advance, approved by the Prosecutor’s Office, and the schedule brought online. What is more, a company or a sole trader is immune to ordinary investigation during the first three years from the day of registration or from the end of the previous inspection.

A company or a trader, however, can still be examined through an extraordinary or a ‘non-planned’ investigation. An extraordinary investigation must be founded on one of the following grounds: a) expiry of the period granted earlier for correction of violation of rules, b) actual danger or a threat to lives or health of people or environment, c) violation of the rights of consumers, and, of course, d) state security. An extraordinary investigation must be approved by the local prosecutor, unless the investigation is based on consumers’ complaints. Where the rules were broken the findings of the investigation will, generally speaking, be void and null.

The catch is that the law does not apply to tax control, or ‘finance control’, or ‘finance and budget’ control, or currency regulation control, or control on the stock markets, or banking control. Nor does it apply to criminal investigations, nor prosecutor’s control, nor to the administration of justice in general... Regulation of inspections carried out by customs, anti-competition service, export control and some other federal bodies is established by separate laws. What is left - murky waters of local control and some federal agencies - comes under the scope of the act.

The text of the law strikes with repetitions of well-established rules - they do not need to be here. It appears, though, that the legislator’s aim is to give entrepreneurs a simple all-in-one document - a kind of habeas corpus – against greedy and inventive bureaucracy.

This law is a new edition of the act of 2001, which was not particularly effective, and whether this one will turn out a shield, not a toy, is open to debate.

This law, with some exemptions, came into force on May 1, 2009.

 

 

As industrial output in Russia keeps plummeting, unemployment gains momentum with frightening speed. For the last several months the government's efforts were focused on large, 'strategic', enterprises. Now, when those efforts have largely failed, the state is turning to small and medium companies, seeking not as much to increase national wealth, but to keep people off the streets.
Share/Save