Client: FIAS/World Bank

For the Foreign Investment Advisory Service of the World Bank, Jacobs and Associates carried out a review of the Russian Federation draft law, “On the fundamentals of technical regulation in the Russian Federation.” The draft law proposed an ambitious 7-year program to replace the existing body of rules and establish a transparent and market-oriented legal environment supportive of the private sector. This reform is intended to encourage business development, particularly of the SMEs that should increasingly drive growth; fight poverty by reducing consumer costs and opening up new opportunities; boost inward investment by bringing Russia into conformity with WTO requirements; and support the rule of law through enhanced legal security and judicial review.

The Russian reform aimed to replace around 60,000 Soviet-era standards with 400-600 consolidated, transparent sectoral regulations limited to health, safety, and environmental issues. This is an historic reform. Reforms carried out in Russia have as yet barely changed most regulatory constraints affecting private sector activity. Tens of thousands of Soviet-era regulations still set detailed operational and design requirements for most economic activities and establish unrealistic levels of protection at odds with international standards. These standards are inconsistent with an innovative, open market economy. A culture of noncompliance and corruption is pervasive.

Jacobs and Associates provided comments and suggestions on the draft law to assist the Russian government in moving toward international norms of rule-based governance and principles of good regulation. We participated in a donors’ meeting in Moscow in October 2002 to discuss the draft law with the Office of the President of the Russian Federation.