Monday, 17 March 2008

Four Years Early or Four Decades Late?

One of EU goals is to cut administrative hurdles for businesses by 25% in 2012. You can hear the business community cheer. Reducing red tape is not easy anywhere, but having bureaucrats on the private sector side gives hope to the skeptics. The European Commission created a Fast Track approach to modify and simplify many regulations and procedures for entrepreneurs. Here, Fast Track means that those procedures that can be reduced or eliminated the fastest will be tackled first.

One of the sectors that will see an early impact of this goal is the transportation sector. Recently, the European Parliament took on the European Commission’s proposal to reduce the paper work that transport companies have to deal with.

So, what is being slash? No longer will transport companies fill out double forms or provide unnecessary information. The EU information policy states that freight carriers will no longer have to hold separate transport documents detailing, for example, frontier crossing points, routes to be taken or distance travelled. Also the reporting requirements on intra-community transport flows (i.e. name and address of the consignor, nature and weight of the goods an destination of the goods) are no longer required. The latter was a rule dating from the 1960s when EU transportation was heavily regulated.

Now who precisely is impacted by this reduction? Over 300,000 companies in the European transport sector profit from this action, and the majority of these companies are small and medium enterprises. Of these 300,000 companies, 100 are rail operators, 7000 inland waterway operators and the other 292,900 companies are road transportation companies.

And what is the cost-benefit of all this? The savings that this simple reduction in regulations involves is an annual €160 million. Do we celebrate this decline because it is implemented 4 years before the EU’s target date, or do we work out the drain on the transportation sector over the last four decades?

Source: Doing Business Blog

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