Regulatory Reform

scottSmallMost countries, especially those in transition or development, face the challenge of speeding up and broadening the “enabling environment” to reform and stimulate economic growth, create jobs, and raise living standards. Outdated and unnecessary laws and regulations impose massive efficiency costs on economic activity, while promoting corruption and reducing government performance in providing services, protecting people, and the environment. To meet this challenge, the Iraq Solution for Regulatory and Administrative Reform (ISRAR) project was designed to address these issues through a flexible method, known as the e-Guillotine, to create an enabling environment for economic reforms. Specifically designed to produce results even when resistance to reform is high, Tarabot worked to review a large number of regulations and to eliminate those that are no longer needed.

Using a transparent process built on extensive stakeholder input, inventory was taken of all existing regulations, and then each regulation was reviewed against clear criteria that sought to address several questions, such as: 1) Is the regulation legal? 2) Is the regulation necessary for future policy needs? 3) Is the regulation business friendly? 4) If fees are required, are they necessary and reasonable? Regulations passed through reviews by Tarabot, ministries, and stakeholders. Final recommendations were packaged and sent to the Prime Ministers’ Advisory Council (PMAC) and the ISRAR steering committee. All regulations undergoing review are placed into an open access comprehensive electronic registry available at http://www.israrproject.org.

Regulatory Reform Packages 1 & 2

USAID-Tarabot delivered two regulatory reform packages to the Prime Minister’s Advisory Council in 2014, comprising a total of 147 pieces of legislation. The first package contained general legislation, agreed upon by both Tarabot and reviewing partners, for elimination. The second package contained legislations recommended for elimination because they were deemed unconstitutional.

Working in Partnership

PMAC allocated US$482,000 from the Government of Iraq’s 2012 cost-share fund to support ISRAR, who hired and trained over 20 staff to aggregate, analyze, and recommend for reform or elimination thousands of Iraq’s pieces of legislation and regulations. Tarabot also supported 28 government entities in forming units to conduct their own legislative reviews. Ultimately, recommendations from these units provide important inputs into the Central Unit’s own review process and ensure wide scale government and private sector engagement. Tarabot trained participants from its partner units to review relevant regulations, to liaise with their respective legal departments, and to finally upload their recommendations to ISRAR’s online database established by USAID-Tarabotat http://www.israrproject.org/.

USAID-Tarabot also established a number of private sector working groups to discuss and review the regulations that affect them. These groups were created to provide structured recommendations–informed by stakeholders–to the central unit. The participation of representatives in these working groups illustrates the support of the private sector for regulatory reforms in Iraq.

Online Reform Tool

USAID-Tarabot’s ISRAR initiative completed an inventory of all legislation and regulations that affect the private sector in Iraq and uploaded them to a special website: http://www.israrproject.org/. The website is designed to support reform by categorizing all regulations, enabling online research and facilitating consultations between the government reform teams and private citizens. This is the first time all of Iraq’s regulations have been collected and made readily available to the public, strengthening transparency in regulatory reform for the Government of Iraq.

Company Registration Process Overhaul

In September 2014, in a formal letter addressed to PMAC, the Ministry of Trade announced that it would be moving forward with all recommendations made by ISRAR for streamlining operations for company registrations. While the ministry acted upon some of ISRAR’s recommendations in the past, its efforts were met with limited success because of legal limitations. Having worked closely with the ministry on this issue for months, the letter illustrated the commitment of the Ministry of Trade to ISRAR’s recommendations in full including the archiving of all files to improve transparency, reactivating its website, and publishing updated guidelines on how to best access the ministry’s services. The ministry is also working with the Ministry of Interior and the Iraqi Bar Association to hasten the entire registration process. With ISRAR’s steadfast support, the Ministry of Trade has significantly reduced its processing time to five business days.

Import License Removal

In July 2014, former Prime Minister Nouri al-Maliki approved the removal of import licenses following years of advocacy and consultation by ISRARand the recommendations of the Council of Ministers. ISRAR submitted draft instructions to the Ministry of Trade in March 2014, outlining a new import-export system based on economic best practices. The Minister of Trade demonstrated his support for the recommendation by penning a letter to the Committee of Economic Affairs of the Council of Ministries, formally endorsing ISRAR’s recommendations. With these recommendations on hand, the former prime minister was able to quickly sign a new order, which allowed for the swift implementation of a new import-export regime.

Construction Nidham

USAID-Tarabot developed a set of reforms for the issuance of construction permits based on international best practices and in consultation with the Ministry of Construction and Housing and the Al Shura Council. The reforms include transferring approvals for building permits less than 1000m2 to local government offices, providing automatic approvals to builders if a decision is not made by a certain deadline, and assigning a single employee to handle a building application from start to finish. The Ministry of Construction and Housing, as well as the Al Shura Council have reviewed the construction nidham drafted by ISRAR and provided feedback.