Step 4. Read about tools designed to assess the needs and potential impact of policy measures for SMEs.
SMEs impact assessment tools
Because of the importance of SMEs for national economies, many governments attempt to mainstream SMEs concerns and needs into their development or economic, trade or industry policies and related areas of the administration of import and exports controls and Customs administration.
Different tools have been developed and are used by governments to measure and monitor the impact of proposed and existing regulation for SMEs. Often, the use of these tools are part of overall strategies to improve regulations – see Better regulation initiative in the EU – and also include obligations for the government authority to engage directly with SMEs to obtain their feedback prior to adopting a regulatory instrument – as is required by Article 2.1. of the WTO TFA.
The currently available tools vary in form and in content.
- Generally, they can be used at the policy preparation stage and the findings should feed back into the design and adoption of the relevant instrument. In fact, the tools should compensate for the limited ability of SMEs to lobby for their interests in the policy process.
- Use of these tools is mostly voluntary, but some governments have made it mandatory to present the results of the assessment with the proposed policy instrument– see EU Small Business Act Com.
- The assessment tools check for qualitative aspects of the proposed instruments, including whether the instrument is drafted in a clear language, and is appropriate for the objective. They may also oblige the government authority to follow a due process when preparing the instrument including prior consultation with a sufficient number of SMEs.
- Some tools also cover a qualitative and quantitative assessment of the costs and benefits of the proposed instrument.
Below is a description comparing the three SME checklists from the WCO, the EU Commission and Canada.
| Issuing Organisation | Legal status | Scope | Impact assessment of regulation | Qualitative criteria | Due Process |
| WCO | RecommendationTo be used as a voluntary internal checklist | Applies to Customs Administrations Forward policy design | No impact assessment methodology provided. CA only has to report whether they have taken into consideration the costs and time impact | Necessity Appropriateness for the objective Alternatives, in particular for fulfilling the information requirements Clarity of changes or new measures | Notification of clients of updates and changes SMEs participation should be ensured in consultation Cooperation with other agencies |
| EU | EU MS Governments and the EU Commission should include the test in their impact assessment of proposed policy instruments | Applies to all government entities Can be used for backward and forward policy design | Quantitative cost and benefits assessment of initial policy and mitigation options have to be made. Typology of costs and benefits and a method to assess cost and benefits are proposed. | Cost and benefit impact Market entry (Competition) impact Innovation impact Mitigating options | As part of the test Stakeholders and their characteristics (size and employment) have to be identified, and stakeholders have to be consulted to obtain the relevant information |
| CANADA | Mandatory obligation as part of the regulatory impact assessment (RIAS).Results are made publically available. | Forward policy design | Cost calculation required for initial policy option and flexibility option Regulatory Cost Calculator is provided | Language (understandable) Documents and forms: Alignment and consistency across agencies and with standards Streamlined processes for information requirements No duplication in particular regarding reporting and information requirements Electronic formalities Flexibility measures have to be considered Service standards | A summary of feedback from SME consultation needs to be included Agency also has to report on whether an implementation plan including awareness, and compliance aspects has been prepared |
The WCO Model Business Lens Checklist for Small and Medium Sized Enterprises
The WCO Business Lens Checklists is a non-legal biding document developed by the WCO in 2014. The checklist is to be used by Customs Administration when a new or amended policy or programme with an effect on the business community is under consideration, meaning when designing, modifying and reviewing policies and procedures. “This includes any new or amended procedures, forms or licenses that add or reduce compliance obligations”. It allows for or at least should facilitate taking into account the concerns and issues of commercial clients, in particular SMEs in the policy design process. Furthermore, it aims to “institutionalize business simplification principles within the culture of government departments and agencies”. For this purpose, it also covers consultation, communication and compliance management processes.
EU SME Test
The SME test is an instrument that has been designed by the EU Commission as port of its Small Business “Act” (SBA) adopted in 2008 (*). The SBA aims to streamline and strengthen support measures for SMEs and efforts made to cut red tape for SMEs at the EU Commission level and in each EU MS. The SBA contains 10 principles out of which the “Think Small First Principle“ refers to improving the regulatory and policy design from the perspective of SMEs can calls for the SME test to be used by MS governments.
The SME test was developed to “rigorously assess the impact of forthcoming legislative and administrative initiatives on SMEs and take relevant results into account when designing proposals”. It comprises four steps:
- Consultation of SME stakeholders;
- Identification of affected businesses;
- Measurement of the impact on SMEs; and
- Assessment of alternative mechanisms and mitigating measures.
Canada Small Business Lens Checklist
The Canadian Federal Government has introduced the Small Business Lens (SBL) as part of its effort to cut costs of regulation for businesses. The SBL focuses on the needs of small business with the objective to minimise their impact for SME. The SBL checklist is part of the regulatory impact assessment that needs to be prepared for proposed new or revised regulations and policy. As part of the SBL checklist, regulators indicate whether they considered flexible regulatory options that reduce costs to small businesses without compromising the health, environment, safety and security of Canadians. Results are made publicly available in the Regulatory Impact and Analysis Statement for the regulation when published in the Canada Gazette. The checklist must also be included and posted publicly.
(*1) Act is a symbolic name and does not have the meaning of a legal document. In fact the SBA is an initiative initiated by the Commission following the Lisbon Conference.
(*2) In addition to the SME test, the EU Commission and the EU MS also have to consult SME organizations for at least 8 weeks prior to making any legislative or administrative proposal that has an impact on businesses, and use specific measures for small and micro-enterprises, such as derogations, transition periods and exemptions, in particular from information or reporting requirements, and other tailor-made approaches, wherever appropriate.
