BEE Coordination Working Group Meeting Minutes, 19 September 2008

Present at the meeting:

1. Opening remarks

Anna Schwarz welcomed participants to the Swiss Cooperation Office. Wendy Werner began the meeting by introducing new participants: Simone Giger (World Bank), Khudonazar Ogmamadov (MSDSP, standing in for Michael Bowles) and Nozigul Hushvakhtova (Secretariat of the Investment Council).

Ms. Giger informed the group that she is a governance specialist, and her work includes the business environment. She will shortly assume more responsibilities in Tajikistan, and while she will be based in Tashkent would like to participate in as many BEE Working Group meetings as possible.

2. Progress update of the One-Stop Shop (OSS) for business registration

Shahlo Rahimova, B. Sultanov and Nurali Shukurov delivered a joint presentation on activities since March 2008 related to the one-stop shop for business registration (see Attachment 1). Ms. Rahimova said that there has been excellent donor coordination on this issue, especially since the WBI workshop in March. Mr. Sultanov explained the decisions taken to date by the OSS Working Group, an interministerial official working group that is supported with DFID funds. Mr. Shukurov pointed out the key provisions of the draft law on business registration, re-registration and de-registration, which was developed by the OSS Working Group (see Attachment 2).

Mr. Sultanov said the OSS Working Group will meet again to refine the draft law, after which the law will be translated into Tajik and English. The draft law will be submitted to government for review by late October or early November. If the draft law is passed, many additional laws will then need amendments, such as the Civil Code and the Tax Code, among others. Work on these amendments can be done in parallel. According to Mr. Shukurov, the upper chamber of Parliament is expected to pass amendments to the Law on Limited Liability Companies which will reduce minimum chartered capital requirements from 10,000 TJS to 500 TJS.

Mr. Sultanov stressed that all ministries and agencies must comment and approve the draft law, that the process of amending all of the other laws will be a massive amount of work, that computerization and training of the Tax Committee for business registration all mean that the new OSS procedures will not be operational until January 1, 2010. He believes that computerization and training will take all of 2009.

Frederik Coene thanked the presenters and all those who have been working together to make the OSS a reality. He mentioned that a financial commitment from government is needed, to accompany the political decision that has already been taken. Mr. Coene explained the terms of the European Commission project on the OSS - of which 150,000 Euro will go towards procurement of equipment and 820,000 Euro towards technical assistance. He said the 150,000 Euro will not be enough to fund the entire information technology needs of the Tax Committee as it implements the OSS. He hoped for either financial commitment from government, or other donor support, to meet the additional IT needs. The EC funds will cover 4 servers, a number of computers, network equipment and security equipment.

According to Mr. Coene, the technical assistance intervention will begin in January 2009 and last for about two years. It will be concerned with the system itself. There will be a legal specialist to develop normative acts, a business process specialist to map and develop new procedures, an IT developer and team of programmers to build/customize the new IT system. There will also be training for the concerned employees of the Tax Committee on new procedures. Study tours are likely to be a component, along with a communications strategy to explain to entrepreneurs how to register.

Regarding timing of the OSS implementation, Mr. Coene reminded the group of the clear political decision from the highest levels of government to have a functional OSS for business registration in 2009. Given the recent Doing Business results, he thinks it unlikely that the President will agree to change the date to 2010. According to Mr. Coene, at the Doing Business launch event on September 17, Farrukh Hamraliyev from GosKomInvest said a pilot OSS in Dushanbe must be launched in 2009. Through discussions with IT specialists, Mr. Coene has become convinced that we can work out an implementation mechanism that is not heavily dependent on IT initially. He suggested a staged approach to OSS targets, where we perhaps go for 10 days registration in 2009, with stronger target of 5 days for 2010 (after the IT has been fully implemented).

Ms. Giger said the World Bank might be able to provide bridging support before the EC project gets underway. She asked for clarification of coverage of the new law: whether dekhan farms are included, and what will happen to the patent/certificate regime for individual entrepreneurs. She suggested more clarity on the OSS procedural mapping, and she emphasized the need for a speedy implementation. She agreed with Mr. Coene's incremental approach, with more realistic targets for 2009, followed by more ambitious processing targets (i.e. 5 days) in 2010.

Sherali Zardov agreed with an approach focused on speeding up the process as soon as possible, such as reformers in Kyrgyzstan did. He said the second meeting of the Investment Council can be used to convince the President that there are too many procedures required to register a business. He said that the law must be adopted and in force before additional IT or technical support is likely to be available. He repeated Mr. Coene's point that the 2009 timeframe must be adhered to.

Mr. Shukurov replied to Ms. Giger that the WBI workshop determined that dekhan farms would not be explicitly included in this OSS for business registration. The draft law does include legal entities, and individual entrepreneurs working under patent or certificate. Because dekhan farms are generally registered as legal entities, they are in fact implicitly included. The law does not cover registration of public organizations or NGOs.

3. Survey of BEE Coordination Working Group

 Since the BEE Coordination Working Group has been active for 6 months, several members (Mr. Rahmatboev, Ms. Schwarz, Ms. Rahimova and Ms. Bowers) suggested a review of the group's effectiveness via a participant survey. The survey will be distributed to coincide with the next meeting.

4. Closing remarks

The next meeting will discuss the guillotine procedure and permits reform, and it will form part of the preparation for the next Investment Council meeting.

List of attachments:

1. Presentation on the OSS Working Group: Basics of Improving Business Registration - English
2. Draft law on business registration, re-registration and de-registration - Russian

19.09.08/CB