As a result of the introduction of a risk-based approach, inspection procedures in Armenia will become “more targeted, clear and transparent,” said Arsen Nazaryan, project manager of the Armenia Investment Climate Reform Project, implemented by IFC, a member of the World Bank Group.

The new approach groups businesses into three risk categories: high-, moderate-, and low-risk. As a result, the number of inspections for businesses in the low-risk category will be reduced significantly, saving businesses’ time and resources while making the inspection system more efficient.

“The introduction of this new approach became possible thanks to our successful cooperation with the Ministry of Economy,” Nazaryan told Armenian News – NEWS.am.

The project has assisted the government of Armenia in introducing the fundamental changes needed to adopt a risk-based approach. IFC has provided advice reflected in the amendments to Armenia’s inspections law adopted by the government last summer.

The Armenia Investment Climate Reform Project is currently working on simplifying and streamlining inspections conducted by agencies such as the Food Safety Service, Sanitary-Epidemiological Service, Fire Inspectorate and others.

There are 18 state agencies in charge of at least one type of inspection in Armenia.

“We shared best international practices with the Inspection Reform Coordination Council – a private-public platform established upon the project’s recommendations, presided over by the Prime Minister. The underlying logic of the simplification proposed by IFC is to focus on high risk issues. For example, the Fire Inspectorate would deal with the buildings evacuation and leave alone the toxicity of the wall paint,” said Nazaryan.

Special checklists, which will be used by the inspecting bodies in Armenia, are essential for conducting inspections in a more efficient and transparent way. The project helped develop draft checklists for the Food Safety Service, Fire Inspectorate, and Sanitary-Epidemiological Service. Under the decision of the Inspection Reform Coordination Council, the checklists shall be tested by initial inspections in the state agencies. After probation, the checklists will be adjusted, and then submitted to the government for final approval. Development of checklists may in turn prompt relevant recommendations for legislative changes.

“The Project also helps the mentioned inspecting bodies to draft risk criteria and risk assessment methodologies, which along with checklists and the inspections plan will be available for public via Internet,” said Nazaryan.

Armenia’s Tax Service has been the first agency to set an example: its website contains the first-ever yearly inspections plan.

The first stage of IFC’s Armenia Investment Climate Reform Project began in 2009 and targeted improvements in the areas of taxation, trade logistics, construction permits, and business registration and inspections. The second stage of the project has started in October 2011 and will continue until 2014. This will include a new component - food safety.

IFC’s Armenia Investment Climate Reform Project is supported with funds from the Austrian Ministry of Finance and the Netherlands Ministry of Foreign Affairs.