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2007 Assessment

Georgia: Integrity Indicators Scorecard

Georgia: Integrity Scorecard Report > Sub-Category: Business Licensing and Regulation
Indicators		Score
67	Are business licenses available to all citizens?	75
68	Are there transparent business regulatory requirements for basic health, environmental, and safety standards?	0
69	Does government effectively enforce basic health, environmental, and safety standards on businesses?	17

Indicator and sub-Indicator Details

Are business licenses available to all citizens?

67a: In law, anyone may apply for a business license.

Score:

YES

Comments:

References: Constitution of Georgia; no discrimination policy might be exercised Law on Licenses and Permissions, from 2005

67b: In law, a complaint mechanism exists if a business license request is denied.

Score:

YES

Comments:

References: Constitution of Georgia, art 42 Administrative Procedure Code; rules on challenging decisions of administrative bodies;

67c: In practice, citizens can obtain any necessary business license (i.e. for a small import business) within a reasonable time period.

Score:

100

Comments: By law, the period for obtaining a license can be of three months, and appropriate state agencies can add other three months until they issue the license.

References: Law on Licenses and Permissions, art. 10, from 2005

Peer Review Comments: Licensing is much more simplified, and in many areas licenses have been abolished.

Peer Review Comments: Georgia has dramatically reduced the hurdles to start a business. A 3-to-6 month period is also relatively short in comparison to even industrialized countries (e.g., Germany and Italy).

67d: In practice, citizens can obtain any necessary business license (i.e. for a small import business) at a reasonable cost.

Score:

100

Comments: All costs are defined by the Law on Dues for Licenses and Permissions from 2003

References: No arbitrariness has been reported recently.

Peer Review Comments: The costs of getting a license are not high.

Are there transparent business regulatory requirements for basic health, environmental, and safety standards?

68a: In law, basic business regulatory requirements for meeting public health standards are transparent and publicly available.

Score:

YES

Comments: There are no clear rules on health requirements. There are general provisions in laws about the need for public health, but standarts on checking are issues handled by the Ministry of Health and Social Affairs and keep changing all the time. They are non-predictable and non-transparent.

References: Law on Licenses and Permissions, from 2005 Law on Medical and Pharmaceutical Licensing, from 2003

68b: In law, basic business regulatory requirements for meeting public environmental standards are transparent and publicly available.

Score:

YES

Comments: There are no clear rules on environmental procedures and requirments. There are general provisions in laws about the need for environmental safety, but standards on checking are issues handled by the Ministry of Environment and keep changing all the time. They are non-predictable and non-transparent.

References: Law on Licenses and Permissions, from 2005

68c: In law, basic business regulatory requirements for meeting public safety standards are transparent and publicly available.

Score:

YES

Comments: There are no clear rules on safety requirments. There are general provisions in laws about the need for public safety, but standards on checking are issues handled by the Ministry of Health and Social Affairs and keep changing all the time. They are non-predictable and non-transparent.

References: Law on Licenses and Permissions, from 2005

Does government effectively enforce basic health, environmental, and safety standards on businesses?

69a: In practice, business inspections by government officials to ensure public health standards are being met are carried out in a uniform and even-handed manner.

Score:

100

Comments: The problem is not bribing, but the selective nature of inspection.

References: There have been no reports on bribes being paid for this purpose.

See "Badagoni" Scandal reports, in various papers, among them: "Badagoni Wine Runs Afoul of Ministry of Agriculture," Newspaper Georgia Today, Issue #332, 17.11.06 - 23.11.06 [ LINK ]

Peer Review Comments: Public authorities use this tool against those businesses that are not connected to high public officials or are connected to former high public officials who have been dismissed. It is unfortunate that public health is the last thing in their minds when initiating an inspection.

69b: In practice, business inspections by government officials to ensure public environmental standards are being met are carried out in a uniform and even-handed manner.

Score:

100

Comments:

References: There is no transparency in regulations. There have been no reports of regular inspections. There is very little in the way of comprehensive statistics or studies of such inspections.

69c: In practice, business inspections by government officials to ensure public safety standards are being met are carried out in a uniform and even-handed manner.

Score:

100

Comments:

References: There have been no reports on bribes being paid for this purpose.

See "Badagoni" Scandal reports, in various papers, among them: "Badagoni Wine Runs Afoul of Ministry of Agriculture," Newspaper Georgia Today, Issue #332, 17.11.06 - 23.11.06 [ LINK ]

Peer Review Comments: I have yet to hear of such an inspection of a business that is closely linked to a high public official or his or her family member.