oecd global forum on governance cofemer and the mexican ... · the draft regulation is complying...

October 2007Federal Regulatory Improvement Commission

OECD Global Forum on Governance

COFEMER and the Mexican Experience on Regulatory Reform

Martha Fabiola Carreón-GámezRio de Janeiro, October 2007


What is COFEMER?

COFEMER is Mexico’s Federal Regulatory Improvement Commission.

COFEMER was created in year 2000, through a reform to the Federal

Administrative Procedures Law.

COFEMER is an autonomous agency of the Ministry of the Economy.

COFEMER is supported by the Federal Regulatory Improvement

Council which is comprised by five ministries, a number of government

agencies, as well as representatives of the private and social sectors,

and scholars.

COFEMER’s personnel: 60 professionals, mainly experienced on fields

such as Economics and Law.


Regulatory Reform: Objectives

COFEMER

Regulatory

Reform


Regulatory Reform: an Integral Approach

Regulatory Impact

Analysis and Regulatory

Quality Order

Federal Registry of

Formalities and

Services

Biennial Regulatory

Reform Programs

Rapid Business

Start-Up SystemRegulatory Stock

Review

Coordination with

States and

Municipalities

Regulatory Reform System


Regulatory Impact Assessment (RIA)

The Regulatory Impact

Assessment is the public tool that

helps making Government decisions

and regulatory instruments more

transparent and rational.

RIA is an ex-ante analysis which

facilitates knowing what effects, in

terms of expected costs and

benefits, a regulation will create

when implemented. It also helps to

analyze regulatory alternatives to

the original project of the regulator.


As a general rule, all federal ministries and agencies are obliged to

submit their regulatory proposals and their corresponding RIA for

consideration of COFEMER (i.e. when such proposals create

compliance costs for citizens and/or businesses).

In principle, all regulatory proposals and their corresponding RIA

shall be made public. All comments received by the stakeholders

must be taken into account, enriching in that way the discussion and

analysis of the regulatory proposals, and sharing the costs of the

issuing of the regulations.

No regulatory instrument can be published in the Official Gazette

and, therefore, enter into effect, without the opinion of COFEMER.

Regulatory Impact Assessment (RIA)


The Regulatory Quality Order

With the purpose of reinforcing the filters to guarantee the quality ofregulation before submitting the RIA (i.e. when regulations havecompliance costs), a new instrument was issued by President FelipeCalderón on February 2, 2007: the Regulatory Quality Order.

This instrument is aimed at: (i) guaranteeing that regulations do notaffect citizens or productive activities; and (ii) inhibiting overregulationthat hinders investment, employment and, in general,competitiveness.


Federal ministries and agencies may issue new regulation only whenthe latter complies at least with one of the following criteria:

The draft regulation derives from an emergency situation. The federal ministry or agency is complying with either an

obligation established in law or with regulations issued bythe President.

The draft regulation is complying with an internationalobligation.

The regulation has to be up-dated periodically because of toits nature.

The benefits of the proposed regulation are higher than itscompliance costs.

The Regulatory Quality Order


Regulatory Stock Review

A good Regulatory Reform Program should not only manage thedaily regulatory flow, but also review the regulatory stock that isinadequate and affects citizens and businesses, providingalternatives to solve detected problems.

Filter2

RIAFilter1

RQO

Regulatory Stock

Article 69-E, paragraph I FLAP + Toolkit (OECD)

Regulatory

Flow

Output:

Regulatory

Quality,

Competitiveness


Biennial Regulatory Reform Programs

By law, all federal ministries andagencies have to formulate andsubmit for consideration ofCOFEMER, every two years, aRegulatory Reform Program (RRP).

RRPs are instruments for planningand transparency, that allow allproductive sectors to learn about, andprovide comments on, the futureactions regarding the creation,modification or elimination offormalities and regulations.

http://rds.yahoo.com/_ylt=A9G_RtpNlPFGJioBGBqJzbkF;_ylu=X3oDMTBpdnJhMHUzBHBvcwMxBHNlYwNzcgR2dGlkAw--/SIG=1jdv67adl/EXP=1190323661/**http%3A//images.search.yahoo.com/search/images/view%3Fback=http%253A%252F%252Fimages.search.yahoo.com%252Fsearch%252Fimages%253Fp%253Dmejora%252Bregulatoria%2526fr%253Dyfp-t-471%2526toggle%253D1%2526cop%253Dmss%2526ei%253DUTF-8%2526vc%253D%2526fp_ip%253DMX%26w=686%26h=602%26imgurl=www.aguascalientes.gob.mx%252Fidiomas%252Fjapones%252Feconomia%252Fimages%252F15047.jpg%26rurl=http%253A%252F%252Fwww.aguascalientes.gob.mx%252Fidiomas%252Fjapones%252Feconomia%252FMejora_Regulatoria.aspx%26size=67.3kB%26name=15047.jpg%26p=mejora%2Bregulatoria%26type=jpeg%26no=1%26tt=32%26oid=bdd01d6ce1ff8460%26ei=UTF-8


The 2005-2006 RRPs included 36 actions on competitivenessand regulatory reform in a range of economic sectors (e.g.telecommunications, financial services, customs and foreign trade),in order to provide integral solutions under a “Systemic Vision”. Inother words, it was not enough to “get rid of” or eliminate a formalityin an isolated way, but it was necessary to correct the legal systemor context in which the formality is embedded.

Currently, COFEMER is designing a new administrative instrumentfor the submission of the 2007-2009 regulatory reform programsunder a similar integral scheme.

Biennial Regulatory Reform Programs


The Biennial Regulatory Reform Programs and

the Public – Private Dialogue

With the purpose of implementing the 36 actions on competitiveness

and regulatory reform (Systemic Vision), a public-private coordination

scheme was established by creating technical working groups (i.a.

customs, foreign trade).

Because of the positive results provided by the public – private

dialogue (PPD), the federal government and the private sector

decided to formalize such scheme in the Federal Council for

Regulatory Reform, where the government and the business can

jointly analyze those regulatory changes that are needed to promote

Mexico’s competitiveness


The Federal Council for Regulatory

Reform and the PPD

Grupos Técnicos de Trabajo

Transporte

PLENO

SE SHCPSFP

STPS

CJEF

CCE

COFECOPROFECO

BANCO DEMÉXICO

COFEMER

COPARMEX

CNA

FIMPES

CNN

CANACO

AMSDE

BMA

CONCANACOSERVYTUR

CANACINTRACONCAMIN

AMIS

ANUIES

ABM

GRUPOS TÉ CNICOS

DE TRABAJOComercio

exterior y

aduanas

Energía

Normalización

Financiero Migración Telecomunicaciones

Seguridad

Social

Trabajo

Apertura de

empresas

Salud

Federal Council for Regulatory Reform (Decision at the highest political level)Level: Minister and similar level in the private sector.

Transport

PLENARY SESSION

SE SHCPSFP

STPS

CJEF

CCE

COFECOPROFECO

BANCO DEMEXICO

COFEMER

COPARMEX

CNA

FIMPES

CNN

CANACO

AMSDE

BMA

CONCANACOSERVYTUR

CANACINTRACONCAMIN

AMIS

ANUIES

ABM

EXECUTIVE COMMITTEE

TECHNICAL WORKINGGROUPS

Customs and Foreign Trade

Energy

Standardization

Financial Services

Migration Telecommunications

Social Security

Labor

Starting of Businesses

Health

Executive Committee (Technical decisions at the highest level)Level: Vice-Minister and similar level in the private sector.

Technical Working Groups (Technical Work)Level: Director General and similar level in the private sector.


Federal Registry of Formalities and Services

The Registry is an on-line inventory, unique at the OECD, of allformalities required by federal agencies, and which providestransparency and legal certainty to individuals and businesses.

It was created in year 2000 by a provision set out in the Federal Lawon Administrative Procedures (FLAP) with the objective of compilingin a single instrument all formalities and services offered by thefederal government, except for those related to taxation, defense andthe navy.

It is an important tool to enterprises and citizens since, in principle,any formality which is not included in the Registry cannot beapplied. Furthermore, no formality can be applied in a waydifferent from how it is indicated in the Registry.


Besides being responsible for the administration of the Registry,COFEMER also carries out regulatory audits aimed at simplifying oreliminating formalities.

Derived from consultations with the private sector, COFEMER hasmanaged the simplification of 63 formalities which had a highimpact on economic activities. Likewise, other 344 formalitieshave been simplified from the formal integration of the Registry (May19, 2003) to September 2007.

Federal Registry of Formalities and Services


Coordination with States and Municipalities

State and local regulations have a great economic and social impact

on their communities and, therefore, on the growth capacity of the

economy, as well as on the welfare of the country’s population.

In this context, COFEMER works jointly with state and local

governments to build a legal framework that promotes

competitiveness in a certainty and transparency environment.


COFEMER provides consultancy and training to state and local

public officials in order to encourage a number of actions, such as:

reengineering of processes, the creation of State and Local

Registries of Formalities and Services, the establishment of State

and Local Regulatory Reform Councils with public and private

participation, the implementation of rapid business start-up systems,

the reform of the legal framework to promote the competitiveness of

the cities, as well as the adoption of State Regulatory Reform Laws.

To date, Umbrella Agreements on Regulatory Reform have been

signed with the 31 states of Mexico.

Coordination with States and Municipalities


Rapid Business Start-Up System (SARE)

One example of the coordination with States and Municipalities is theSARE.

The Rapid Business Start-Up System is a permanent program of thefederal government whose objective is speeding up theestablishment and start-up procedures of new low-risk businessesthrough the coordination of the three levels of government and thesimplification of procedures.

Through the SARE, any entrepreneur may start a business in 72hours by completing all procedures – local, state and federal – in aone-stop-shop.

The objective of this mechanism is to reduce the number of proceduresand encourage the formal establishment of enterprises.


Milestones

128 SAREs

114,823 new enterprises.

339,213 new jobs created.

$18,907.6 millions of Mexican pesos invested. (US$1.7 bn*)

* Exchange Rate: 10.8589, published in the Official Gazette on October 10, 2007.

Rapid Business Start-Up System (SARE)


Main Lessons

Regulatory reform should not be an isolated effort but an

integrated policy (“whole-of-government approach”) ensuring that

policies for all concerned areas are mutually supportive (i.a.

competence, market access, administrative modernization).

Regulatory reform must have a strong support at the highest

political level, and be set out by Law.

There has to be a governmental agency responsible for the

coordination of all efforts, and for being accountable to citizens

and stakeholders.

Regulatory reform must be planned. Clear guidelines should be

set out at the highest political level.


Main Lessons

Ensure that the regulatory reform policy permeates to all levels of

government.

Encourage the constant use of better practices (i.a. RIA,

regulatory stock review, public-private dialogue).

Broaden the scope of regulatory reform – do not limit it to

economic topics.

Consolidate the e-government policy.

Strengthen the measurement of administrative burdens and any

other compliance costs affecting individuals and businesses.


A look to the Future

In Mexico, we aspire to have an integral, transparent and

inclusive regulatory management system that

increases the effectiveness and efficiency of government,

operates under an authentic culture of regulatory reform,

stimulates and strengthens economic activity, reduces

completely institutional incentives to corruption, and

continuously reviews and increases the quality of the

domestic legal framework.

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