Simpler and more effective business regulation

Simpler and more effective business regulation: Action plan 


The new Icelandic Government‘s coalition agreement contains the following paragraphs: 

The Government will initiate the review of business regulation, with the aim of simplifying it and increasing efficiency. The objective will be to cut red tape and streamline communications with public bodies, while at the same time keeping costs down.

A special objective is to prevent the introduction of any rules burdening the business environment without concurrently removing encumbrances of equal significance. By so doing the overall impact of regulation can be moved in a positive direction.

Following is an overview of actions to put these intentions into practice:

Simplification of the existing regulatory framework

  1. In order to succeed in simplifying existing regulatory framework it is, to begin with, essential to survey the situation as it is. It is important to analyze what it is in the regulatory environment for businesses that is overly complicated and onerous and to estimate the costs. Following that, goals should be set regarding how to reduce those burdens progressively and to develop measurements to analyze the results. Given the experience of other OECD-nations with such projects it is best to prioritize subject matters and use, as relevant, typical groups of companies to monitor performance. The Prime Minister‘s Office will prepare this status report in consultation with other Ministries, representatives of the labour market and the Association of Local Authorities in Iceland. 
  2. A web page is to be created where the public can make suggestions on how to simplify rules or administrative procedures regarding businesses and how to reduce cost. The Prime Minister‘s Office is to ensure that the public is informed of the ministries‘ reactions on the web page. 

Actions to counteract new onerous rules

  1. Special care will be taken in the preparation of legislative proposals concerning businesses that a broad consultation will be sought about them and the impacts on relevant industry sectors estimated. Draft impact assessments will accompany the proposals in such consultations so that the stakeholders can make suggestions on the assessments‘ substance and, as relevant, point out ways to achieve legislative goals with lower cost and in a simpler way. A revised manual on legislative drafting, reflecting the above, is to be released. Care is to be taken of coordination with the expected Government manuals on policy preparation and project management.
  2. When a legislative proposal containing new onerous rules for businesses is submitted to the Cabinet it should be especially justified why it is imperative to adopt such rules. It should be explained what other ways have been considered and why they have been rejected. At the same time, abolition of other rules should be proposed to offset additional cost for businesses. The Prime Minister‘s Office will set out procedures in this regard, among others in light of the British experience of the so-called  ˮone-in, one-out“ arrangement. 
  3. The law on official monitoring rules is to be revised with the aim of increasing its effectiveness. Thereby the law‘s purpose, to promote an effective regulatory framework for businesses, is to be made clearer. Additionally, the indepence of the advisory committee under the law  will be increased as well as transparency in its work. At the same time it will be evaluated whether the committee will be assigned a special role in promoting quality in impact assessments of legislative proposals.


  1. The procedures for the preparation of Government legislative proposals will be reviewed in order to promote improved organization and project management, the monitoring of accordance between legislative proposals and the Coalition´s platform as well as to create the best possible conditions for an overview by the Government over the total impact of the proposed legislation on businesses. Likewise, opportunities for businesses to learn in a timely manner about legislative intentions will be considered,  for example the list of future Govenment bills might be extended to cover more than a year. 
  2. The Prime Minister‘s Office is to carry out the monitoring and compile a stage report on the results of the work by mid year 2015 and a final report by the end of the year 2016.

See also: Bill of Law regarding measures to decrease the regulatory burdens of businesses and enhance competition (Presented to Parliament in the 143th term 2013-2014)

 The action plan was agreed in the cabinet on 24 May 2013. The Prime Minister´s Office will in consultation with the advisory committee under the law on official monitoring rules prepare a more detailed plan with time frames.