No risk, no inspection: a risk-oriented approach for state supervisory activity

The policy on protecting business against unnecessary administrative burden has been developed further with the adoption of Federal Law No.246-FZ “On introducing amendments to Federal Law ‘On protection of rights of legal entities and individual entrepreneurs when exercising state control/supervision and municipal control’” dated July 13, 2015, according to which a risk-oriented approach in the course of inspections is used for purposes of enhancing effectiveness of control measures and protecting interests of legal entities.

Use of a risk-oriented model in control and supervisory activity assumes that the intensity of control measures (their form, frequency and duration) will depend on whether the activity of the companies being inspected or the production facilities used by such companies falls under a certain risk category or a certain hazard class or category. In spite of the fact that the full-scale application of such approach is planned only starting from 2018, the respective rules have already taken effect in relation to certain types of state control starting from September 03, 2016.

The rules for classifying the activity of legal entities and facilities they use into certain risk categories and hazard classes are approved by Resolution No.806 of the Russian Government dated August 17, 2016 (hereinafter the “Resolution No.806”).¹

Pursuant to Resolution No.806, starting from September 03, 2016, a risk-oriented approach is to be implemented in the course of Federal State Fire Control, Federal State Sanitary and Epidemiological Surveillance performed by Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing (Rospotrebnadzor) and Federal Medical and Biological Agency of Russia, as well as Federal Service for Supervision of Communications, Information Technology, and Mass Media.

There are 6 risk categories and hazard classes: from extremely high risk (class 1) to low risk (class 6). The risk category will be determined based on assessment of potential negative consequences of the company’s possible failure to comply with mandatory requirements based on analysis of information on the inspections conducted earlier and the administrative penalties imposed.

It should be noted that the risk management system for purposes of performing state control has been successfully used for a long time in the activity of the Federal Tax Service, Federal Financial Monitoring Service (Rosfinmonitoring) and Federal Service for Employment and Labor Relations (Rostrud). Furthermore, the risk management systems in test mode have already been used in other types of state control since 2016. That provided, it can be expected that by the time the risk-oriented approach is fully implemented, the accumulated experience will be sufficient for the mechanism to work effectively.

We will monitor the process of development of the risk-oriented approach used in the course of inspections and will inform of the news in this area.

Federal Law No.246-FZ “On introducing amendments to Federal Law ‘On protection of rights of legal entities and individual entrepreneurs when exercising state control/supervision and municipal control’” dated 13.07.2015

Federal Law No.294-FZ “On introducing amendments to Federal Law ‘On protection of rights of legal entities and individual entrepreneurs when exercising state control/supervision and municipal control’” dated December 26, 2008

Resolution No.806 of the Russian Government “On using a risk-oriented approach in the course of certain types of state control/supervision and on amending certain acts of the Russian Federation” dated August 17, 2016 (along with the “Rules for classifying activity of legal entities and individual entrepreneurs and/or production facilities they use into certain risk categories and certain hazard classes/categories”

¹            Resolution No.806 of the Russian Government “On using a risk-oriented approach in the course of certain types of state control/supervision and on amending certain acts of the Russian Federation” dated August 17, 2016 (along with the “Rules for classifying the activity of legal entities and individual entrepreneurs and/or production facilities they use into certain risk categories and certain hazard classes/categories.”