OECD Regulatory Enforcement and Inspections Toolkit

Criterion 10. Compliance promotion

Transparency and compliance should be promoted through the use of appropriate instruments such as guidance, toolkits and checklists.

Key questions:

• Is promoting and supporting compliance seen as a duty of inspection and enforcement structures – avoiding reliance on an “everyone should know the law” approach, or seeing advice and guidance as activities that should be left to private consultants?

• Do regulators, inspection and enforcement structures actively and regularly analyse barriers to compliance, and work to overcome them, in particular as they relate to information?

• Are information, advice and guidance delivered through a variety of complementary tools – clear, practical and easy-to-find guidance documents – active outreach – on-the-ground advice?

• Do legal foundations exist for the practice of “assured advice” and is it being used as much as possible to increase regulatory certainty?

• Is performance of inspection and enforcement structures, and of the overall regulatory system, assessed in terms of compliance levels (and public welfare outcomes), not in terms of number of violations detected (and punished)?

Sub-criterion 10.1. Promoting and supporting compliance is seen as a duty of inspection and enforcement structures rather than relying on an “everyone should know the law” approach, or seeing advice and guidance as activities that should be left to private consultants

All too often continues to prevail the view that the duty to know the law is on regulated subjects alone, whereas this legal principle was stated in times when the number, length and complexity of laws was but a fraction of what they are today. Likewise, the absence of efforts to actively inform regulated subjects and promote compliance by clear, practical advice is often excused by claiming that such activities should be left to the private sector, to consulting firms. Neither of these arguments is valid.

In a time when the state is, in response to new risks and growing demands, imposing numerous and complex regulations, it is inadequate to just assume that business operators or citizens can inform themselves and understand what is expected without any assistance. Rather, promoting and supporting compliance should be a key priority and function of inspection and enforcement structures, this should be anchored in legislation and in the official mandates of these different structures, and significant resources should be allocated to develop and spread guidance and information to regulated subjects, particularly those lacking the resources to obtain or understand the information themselves, e.g. SMEs.

• Evidence: government vision on inspections, framework legislation, strategy documents, etc.

Sub-criterion 10.2. Regulators, inspection and enforcement structures actively and regularly analyse barriers to compliance, and work to overcome them, in particular as they relate to information

Improving compliance requires the analysis of what hinders it – which can be lack of information and understanding, insufficient resources, or poor regulatory design. Inspection and enforcement structures should give feedback about regulatory design and resource issues to policymakers. They can also directly tackle information gaps. Thus, reviewing and assessing barriers to compliance (using their own inspectors’ findings) is essential, and should be a core activity.

• Evidence: annual reports and strategy documents

Sub-criterion 10.3. Information, advice and guidance are delivered through a variety of complementary tools – clear, practical and easy-to-find guidance documents – active outreach – on-the-ground advice

Different channels need to be used for different issues and audiences, and inspection structures should use all of them actively. Practical and clear guidance documents should be prepared covering the most widespread business activities and regulatory issues, and the key risks – and be actively disseminated, including through consolidated internet portals (dispersed information being often impossible to find). Active outreach to new businesses, business associations, sectors where most difficulties are observed etc. should be organised, using visits, conferences, web-based information, etc. Inspection visits should be used as key moments to inform, explain and advise.

Guidance must be elaborated and given with great care. Guidance must not diverge from the path set out by the overlaying regulatory framework. Correlation between the guidance and the regulatory framework must be ensured. Guidance, toolkits and checklists must not constitute over-implementation (gold-plating) of the overlaying regulatory framework.

• Evidence: existence of guidance documents, outreach portals – annual reports on outreach activities

Sub-criterion 10.4. Legal foundations exist for the practice of “assured advice” and it is being used as much as possible to increase regulatory certainty

The practice of “assured advice” consists in giving legal guarantees to regulated subjects that, if they follow the advice officially given by their regulator, they will not be held in breach of their duties, even if at a later point another official reaches a different conclusion. At most, if it is found that the original advice was indeed wrong (or if the rules have changed), the regulated entity will have to put itself in compliance, but it will not face liability or sanctions. Such practice exists in a number of countries under different names,1 but is often resisted, and can be made impossible (or at least difficult) by conflicting legal provisions. It is thus highly advisable to give it a sound legal foundation, and even make it a legal requirement for inspectorates to be bound by their own advice.2 However, this practice must be designed in a way that it does not limit the willingness of the inspectors to share their opinion in more informal communications with the regulated subjects. Also, providing this kind of advice should not take off the responsibility to make their own assessment on how best to comply with regulations from inspected subjects. When provided with an “assured advice”, regulated subject should not need to follow conflicting advice from other sources. Hence, the “assured advice” should be made available to other enforcement authorities, e.g. through a shared information system. While it is rarely possible to have every advice be “assured advice”, the goal should be to have this be the case as much as possible, to improve regulatory certainty and improve compliance levels by giving strong incentives to regulated subjects to ask for advice and follow it. It needs to be clear when the inspector gives general advice and when he gives “assured advice”.

• Evidence: framework or other primary legislation (or, in its absence, secondary legislation) foreseeing the possibility of “assured advice” – existence of institutional mechanisms to provide it3

Notes

← 1. E.g. “rescrit fiscal” in France for tax matters, https://www.service-public.fr/particuliers/vosdroits/F13551.

← 2. As is the case in Lithuania as per the Law on Public Administration.

← 3. E.g. the “Primary Authority” scheme in the United Kingdom.