Czechs accused of flouting EU ‘anti-red tape’ rules


The Czech Republic is defying Brussels' drive to cut red tape for small firms, according to business associations who accuse Prague of systematically abandoning impact assessments for new regulations. reports on how the Czechs risk breaching the EU's Small Business Act.

Key industry leaders say the government is reneging on commitments to improve the business environment by ensuring that new laws do not add to the burden on companies. The matter is further clouded by the apparently contradictory positions of different arms of the Czech government.

Regulatory Impact Assessment (RIA) has been a compulsory element of lawmaking in the Czech Republic since 2007, ensuring that new economic, social and environmental rules are in line with the 'Think Small First' principle set out in the Small Business Act.

Jaromír Drábek, chairman of the International Chamber of Commerce (ICC Czech Republic), said RIA is vital for business. "We unambiguously need RIA because we need to know what regulatory instruments – changing tax and administrative burden – the government prepares," he claims.

However, in August 2009, the Office of Government in Prague complained that RIA is too complicated and proposed to change it so that public authorities could decide for themselves whether to apply the test.

"If this was approved, 80% of analysis would have been gone," Drábek argues, accusing civil servants of trying to lighten their workload by scrapping the RIA.

Milan Mostýn, a spokesman for the Confederation of Industry of the Czech Republic (SP?R), believes the assessment is worthwhile because it benefits business. "Properly done, RIA is kind of complicated for those who propose legislation. On the other hand, not doing it would seriously hit business representatives," he said.

Under pressure from the business lobby, the Czech government has agreed not to make RIA optional, but will instead simplify it in certain cases. Štefan Weber, spokesman for the Czech Chamber of Commerce (HK?R), welcomed the move, saying that "the main benefits of RIA were here to stay".

Nevertheless, the Office of Government last month published a study focused on solving the lengthy legislative process in the Czech Republic and is proposing not to carry out RIA when implementing EU legislation.

Moreover, the proposal specifically mentions that regulatory impacts on businesses should not be assessed.

"This proposal is in contradiction with the widely accepted policy of cutting the administrative burden of businesses," HK?R chief Petr Kužel said.

However, the Ministry of the Interior, which is responsible for providing RIA, assured that it was working on ways to simplify the assessment when only one way of implementing EU legislation is possible. "Discrimination against entrepreneurs is not acceptable," it adds.

Business groups said they would watch developments with interest, but noted conflicting signals from government. It was the Office of Government which presented the plan to make the RIA optional, but this was heavily criticised by the Ministry of the Interior.

Simplifying and improving the EU regulatory environment was one of the priorities of the first Barroso Commission and is a key element of the Small Business Act (EURACTIV 01/10/09). 

The EU executive is working to lower costs for SMEs by reducing the administrative burden of unnecessary regulation by 25% by 2012. In the process, it hopes to shed its long-standing reputation as an overly bureaucratic institution. 

As well as cutting back on existing regulation, new legislation is analysed to ensure that it does not add to the burden on businesses. In 2007, the Commission established an independent High Level Group of Independent Stakeholders on Administrative Burdens (HLG) chaired by Edmund Stoiber, charged with pinpointing specific areas where red tape can be cut. 

European Commission President José Manuel Barroso announced in September 2009 that he would take control of the 'Better Regulation' agenda in the incoming EU executive (EURACTIV 21/09/09).

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