OECD GUIDANCE FOR REGULATORY

COMPLIANCE COST ASSESSMENT

Antonia Custance BakerAnalyst, Regulatory Policy Division

OECD

14 April 2014

Principle 4: Integrate Regulatory Impact Assessment (RIA) into the early stages of the policy process for the formulation of new regulatory proposals. Clearly identify policy goals, and evaluate if regulation is necessary and how it can be most effective and efficient in achieving those goals. Consider means other than regulation and identify the tradeoffs of the different approaches analyzed to identify the best approach.Annex 4.4:When regulatory proposals would have significant impacts, ex ante assessment of costs, benefits and risks should be quantitative whenever possible. Regulatory costs include direct costs (administrative, financial and capital costs) as well as indirect costs (opportunity costs) whether borne by businesses, citizens or government. Ex ante assessments should, where relevant, provide qualitative descriptions of those impacts that are difficult or impossible to quantify, such as equity, fairness, and distributional effects.

OECD Recommendation of the Council on Regulatory Policy and Governance (OECD, 2012)

• Compliance Costs are a major element of the costs of regulation

• Berlin Workshop of 2012– Concluded that an integrated assessment

of costs and benefits should include a comprehensive and relevant assessment of the compliance costs of regulation

– Identified technical challenges of measuring compliance costs

Background

• Project group composed of delegates from RPC

• 2 full day meetings (9 September and 14 November)

• Circulated to RPC for written approval 25 February

• Accepted for publication – available online April 2014

Process of Development

• Main Report– Usable by generalist policy officers– Introduces all key aspects of substantive compliance costs– Step-by-step framework for compliance costs assessment

process– Discusses a variety of approaches and pros and cons of

different techniques– Provides template to develop country-specific guidance

• Annex A – Intended for economists/ policy officials responsible for

drafting RIAs– Supplementary technical information for concepts laid out

in main body – Information on related topics

Content of Guidance

Taxonomy of regulatory costs

Regulatory costs

Compliance costs Financial costs Indirect costs Opportunity

costsMacro-

economic costs

Administrative burdens

Substantive compliance costs

Implementation costs

Direct labour costs

Equipment costs

Materials costs

External services costs

Wage costs

Non-wage labour costs

Administration & enforcement costs

Overhead costs

Flow chart of Compliance Costs Assessment

This Project is part of the Program of Measuring Progress in Regulatory Reform within the Regulatory Policy Division, and is under the auspices of the Regulatory Policy Committee.

For further information, please contact:

Project Manager, Measuring Compliance Cost- Antonia Custance Baker (Antonia.Custancebaker@oecd.org; +33 1 45 24 93 22)

Program Coordinator, Measuring Regulatory Performance - Christiane Arndt (Christiane.Arndt@oecd.org; +33 1 45 24 76 56)

www.oecd.org/governance/regulatory-policy/measuringregulatoryperformance.htm

OECD Guidance for Regulatory Compliance Cost Assessment – Available from 30 April http://www.oecd-ilibrary.org/governance/oecd-regulatory-compliance-cost-assessment-guidance_9789264209657-en .

Contact details