1. BETTER REGULATION IN CYPRUS Andreas Charalambous Director of Economic Studies and EU Affairs Ministry of Finance 2 nd April 2012

2. 2 Content BR as a priority National Action Plan Organizational Structure Better Legislation Reduction of AB Impact Assessment BR at European Level Cyprus Presidency Way Forward Need for Change

3. 3 Better Regulation is a priority BR important for Cyprus economy (small economy, reputable business and financial centre etc)... in particular during periods of economic crisis. National Action Plan (NAP), in line with EU commitments, in close cooperation with all stakeholders.

4. 4 National Action Plan Initially approved by the Council of Ministers in 2007, and being revised at regular intervals (last revision Feb 2012). Implementation and monitoring. Three axis : I. Better Legislation II. Reduction of Administrative Burden (AB) III. Impact Assessment (IA)

5. 5 Organizational Structure (1) (diagram follows on next slide): oSteering Committee : responsible for developing a long-term national strategy and for providing the Central Specialized Unit with overall guidance. Consists of representatives of all relevant Ministries, the Law Office, the Law Commissioner and the Planning Bureau. oCentral Specialized Unit (CSU): responsible for coordinating, implementing and monitoring the NAP - it consists of five people. oLiaison Officers : in each Ministry and in some Ministerial Departments, responsible for cooperating with the CSU.

6. 6 Organizational Structure (2) Council of Ministers Steering Committee Permanent Secretary of the MOF – Chair Other relevant Ministries, and Stakeholders (as observers) Central Specialized Unit at MOF Officers from the MOF and the Public Administration and Personnel Department Liaison officers in all Ministries and in some Departments.

7. 7 Better Legislation Promotion of civil servants training via seminars regarding legal drafting. Organized by the Cyprus Academy in cooperation with the Law Office and the BR Central Specialized Unit (7 series of seminars during the last 2 years).

8. Better Legislation (2) Publication of a Guide on Legal Drafting: codifies all stages involved in legal drafting and all required documents at every stage - used as an advisory tool for all civil servants who carry out legal drafting.

9. 9 Reduction of AB Reduction of AB is extremely important for Cyprus since the overwhelming majority of businesses are very small (< 5 employees), thus influenced, to a greater extent, by complicated and distorted laws, regulations and regulatory interventions.

10. Reduction of AB (2) National Target In 2008, national target of 20% was set for AB Reduction by 2012, which constitutes an EU commitment.

11. 11 Reduction of AB (3) Pilot Project A pilot project on the real estate market, - more specifically, on the planning permission and the building permit procedures, was carried out in 2008, using the SCM methodology. The results showed that the AB was low (only 4% of the admin cost), and the real problem was the irritation burden caused on businesses from the delays in the issuance of the permits.

12. 12 Reduction of AB (4) Sectoral baseline Measurement Promotion of a sectoral base line measurement for the reduction of AB in all national legislation (between 1960-2007) relating to businesses, based on 8 national priority areas. The goal is to achieve the 20% national reduction target by 2012 by modernising and simplifing the complicated procedures, which businesses have to follow in order to comply with legislations. The project was completed in April 2011 and resulted in around 30 sectoral reduction proposals, now under implementation in the 8 priority areas.

13. Reduction of AB (5) Measurement Results Total Admin Cost € Admin Burden € % Business as Usual € % 1.008.561.085704.604.19670%303.956.88930%

14. Reduction of AB (6) Measurement Results 16/08/201514 AB for each Priority Area Priority Area€ 1Inland Revenue383.159.511 2 Registrar of Companies and Official Receiver 195.171.269 3VAT78.935.375 4Social Insurance39.521.511 5Environment4.524.888 6 Civil Registry and Migration 2.394.472 7Tourism744.270 8Agriculture152.900 TOTAL704.604.196

15. Reduction of AB (7) If all proposals are implemented by 2012, then the AB will be reduced by 22% (€156m) – corresponds to 1% of our national GDP. Horizontal proposal (€) % Proposals in each priority area (€) % Total AB reduction % 31.869.2624% 123.540.52318%155.409.78522%

16. 16 Reduction of AB (8) Reduction Proposals Generally, the reduction proposals in each priority area aim at: Reduction of the need for citizens’ physical presence at governmental departments, through the promotion of electronic governance Simplification of tax return forms. Reduction of the obligatory period that businesses must maintain records for tax purposes. Simplification of the procedures for the examination of applications. Reduction of the frequency for submitting VAT returns.

17. 17 Reduction of AB (9) Horizontal Reduction Proposal Promotion of the use of the most commonly used e-systems of the civil service concerning businesses, in the context of a communication campaign and offering incentives, in order to increase the use of these systems. To be implemented in cooperation with the Cyprus Productivity Center and the Department of Information Technology Services, in the context of a European co- funded project. The tender documents will be published within the week, contract to be signed by the beginning of June 2012 – implementation will last until March 2013. It is very important for businesses to be more aware of the existence of e-systems and be encouraged to use them.

18. 18 Impact Assessment (1) Until the adoption of a long-run strategy for Impact Assessment (IA), a simplified mechanism was adopted through an IA Questionnaire, attached to all Bills/draft regulations upon their submission to the Attorney’s General office, the Council of Ministers and to the House of Representatives. The Questionnaire deals with the characteristics of the legislative proposal, the consultation process which took place, and with the social, economic and environmental impacts of the proposal. In order to enhance the process, a Monitoring Mechanism has been established. A Consultation Guide has also been issued (see next slide).

19. 19 Impact Assessment (2) Consultation Guide Aims at creating a uniform procedure to be followed by civil servants during consultation with stakeholders, while drafting new legislation. Assists civil servants upon completing the standardized questionnaire on Impact Assessment. Based on best practices

20. BR at European Level We welcome Commission's efforts to achieve the target of reducing AB on European legislation by 25%, by 2012. We welcome the new era of Smart Regulation and Baroso´s political guidelines of Oct. 2009, which set the promotion of Smart Regulation as one of the most important tools for achieving the goals of Europe 2020 Strategy. We will continue the cooperation with all Member States and European institutions for the promotion of the goals of the Smart Regulation agenda, aiming at the increase of competition and growth.

21. 21 The BR Central Specialized Unit (Unit) is closely cooperating with the other Trio countries (Poland, Denmark) on BR issues for the Cyprus Presidency of the Council of EU, the second half of 2012. Our priorities, as regards BR issues under the CY Presidency, are still under discussion. A series of meetings with the Commission and the Council Secretariat, as well as training programs, have taken place for the best preparation for Cyprus Presidency.

22. 22 Way Forward  Need to make sure that by 2012, the national reduction target of 20% on national legislation is achieved - monitoring the implementation of the sectoral reduction proposals.  Better use of the Consultation Guide, the IA questionnaire and the Guide on Legal Drafting.  As the Cyprus presidency is approaching, we will promote further cooperation with the Trio, the Commission and the Council Secretariat.

23. 23 Need for Change BR is an important initiative both at the European and national level. For a successful result, it is essential to ensure continuous effort and cooperation between the Public Service, the Social Stakeholders and the Business World. An initiative contributing in changing the culture and the way of thinking in the private and the public sector, leading to the improvement of the Public Sector and thus increasing the trust of businesses and citizens.

24. 24 How to find us National Website on Better Regulation: www.better-regulation.org.cy Contacts: Savia Orphanidou 22601195 sorphanidou@mof.gov.cy Elpida Heracleous 22601194 eheracleous@papd.mof.gov.cy

25. 25 Thank you for your attention!