AmCham Macedonia Summer 2016 (issue 50) | Page 11

COVER STORY Summer 2016 / Issue 50 15, 2015. Transparency Serbia described the inclusive legislative development process as a best regulatory practice and an example of how all laws and regulations should be developed. The Law also received positive reviews from the EU Commission and business associations. This new law is a critical element of Serbia’s efforts to improve its business environment, which had been plagued by inspection bodies that were uncoordinated and focused on punishment rather than compliance. Thanks to USAID BEP’s work with the Ministry and a wide group of stakeholders, the new Law is transforming the way inspections are conducted. The Law on Inspection Oversight incorporates modern inspections standards and features, including coordination of inspections, risk assessment, advisory role, preventive measures, and provisions related to decreasing the grey economy and ensuring fair competition. The Law also enables more efficient and cost-effective inspections, stronger and standardized inspection oversight, and increase in knowledge and skills of inspectors. The Law requires all inspectorates to react to illegal businesses or behavior. This is a huge step forward in fighting the grey economy, and is already changing inspectors’ previous practice of heavily supervising and burdening legitimate businesses, while declaring incompetence to respond to illegal business entities or actions. To facilitate proper implementation of the reform, the USAID BEP helped develop bylaws for the Law. USAID BEP also developed a comprehensive Guide for Application of Law on Inspection Oversight, with explanations, recommendations and models of enactments, as well as four methodologies. The new Law became fully effective on April 30, 2016, with provisions relating to inspection of unregistered businesses having been effective since August 2015. As expected, the new legislation pushed businesses in the “shadow economy” to legalize. Data released by the Serbian Business Registers Agency show a significant increase in registration by previously grey businesses during the first month of the Law’s full application. In May 2016, there were 58% more newly registered businesses than in May 2015. Previously, when the Law mandated inspection oversight of unregistered entities in August 2015, the Agency registered 71% more entrepreneurs than in August 2014. Businesses are also starting up and expanding as a result of inspections getting fairer, more transparent, and less burdensome. The USAID BEP continues to work with the Ministry, inspections, and business associations to improve inspections and have a greater impact. Pursuant to an implementation plan adopted by the Government of Serbia, the USAID BEP and its partners are developing and adopting by-laws, establishing the coordination mechanism (managed by the Coordination Commission), launching and maintaining the e-Inspections system, developing training and manuals for inspectors and businesses, monitoring inspectorate implementation, and communicating with the public. The project also implemented a Train the Trainers Program that has trained 327 inspectors to train their colleagues across 34 inspectorates. The trainers have in turn trained 3,184 inspectors. AMCHAM MAGAZINE 11