Inspection reforms launched in Armenia years ago are still high on the government’s agenda. The government introduced significant reforms over the past few years, however there is still room for improvement. A new law concerning inspection authorities is under discussion, which would clarify procedural issues that are currently either not regulated or are interpreted ambiguously.

The Investment Climate Advisory Services of the World Bank Group, through projects implemented by IFC, has assisted the government of Armenia by sharing international experience in inspections from the very first day of the reforms.

Frequent, uncoordinated and inappropriate inspections create serious obstacles for doing business.

Back in the summer of 2011, significant changes were introduced in the Law on Inspections, which aimed to introduce the risk-based inspection system.  

This system allows inspectorates to identify which businesses pose a greater safety risk, and to focuse more of their resources on helping those businesses to minimize risks. A risk-based system groups businesses into three categories: low risk, medium risk, and high risk. The number of inspections for businesses in the low and medium-risk categories is significantly reduced, saving businesses time and resources and making the inspection system more efficient.

International experience shows that risk-based inspections use state resources in an optimal way, targeting businesses that involve greater operational risk. At the same time, risk-based inspections can also decrease risks for consumers by helping higher risk businesses identify and address their risks. A risk-based inspection system benefits all parties involved: businesses, consumers, and inspection agencies.

The Armenia Investment Climate Reform Project, implemented by IFC, has provided advisory services to the Secretariat of the Inspection Reform Coordination Council on developing risk-based inspection methodologies and checklists for a number of inspection authorities.

From January, 2012, inspection authorities have been obliged to publish annual inspection plans on their official sites. The government created databases of businesses subject to inspections, with the view to increase the efficiency of the supervision system. 

The annual inspection plans, as well as the database, provide entrepreneurs with the opportunity to prepare for inspections in advance, increasing their compliance and saving time and resources, since unplanned inspections are often burdensome. This approach is currently being implemented in all inspection agencies to enhance transparency and promote greater compliance to regulations among businesses.

“IFC’s rich worldwide experience in inspection reform is an excellent opportunity for the government of Armenia to efficiently optimize the current inspection system, by using the best international practices,” said Arsen Nazaryan, Project Manager of the Armenia Investment Climate Reform Project. “Within the scope of this program, we closely collaborate with the government and are ready to share experience with other partners supporting the improvement of Armenia’s business environment. We already have examples of successful collaboration between the World Bank Group, the European Bank for Reconstruction and Development, the EU Advisory Group, the OSCE, the USAID and other partners, in matters regarding the introduction of a modern supervision system in Armenia.”