compliance costs

What costs do laws generate?

What costs do laws generate? For every new law, the ministries assess its compliance costs for citizens, business and the administration. The legislature is thus able to consider the implications of the law when deciding whether to pass it. The way in which these compliance costs are calculated is described in a mandatory guideline.

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Better regulation/ compliance costs

Photo: Bundesregierung/Stutterheim

The development of legal provisions and their implementation are the task of the administration. To achieve its intended effect, a legislative act often requires citizens, companies and public authorities to comply with many requirements and fulfil many obligations. The programme for Bureaucracy Reduction and Better Regulation ensures that the existing burden arising from Federal legislation is reduced and that new burdens are kept to a minimum.

By introducing the Standard Cost Model back in 2006, the Federal Government brought in a tool that would identify the burden arising from information obligations from the outset, when legislative proposals were still on the drawing board, and so keep that burden as light as possible.

Since the amendment of the National Regulatory Control Council Act, that body has also been examining the statement of compliance costs accompanying new regulatory instruments for plausibility and methodological soundness.

The Federal Ministries must now assess the compliance costs for regulatory proposals, including the cost of fulfilling information obligations, and present their assessments. The guidelines describe the relevant steps in this process.

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