The NKR’s mandate includes verifying whether and to what extent the Federal Ministries have described the cost implications of the laws, regulations and administrative provisions drafted by them. The most important category of costs arising from new legislation is compliance costs. Compliance costs refer to the measurable time expenditure and monetary costs either incurred or saved by citizens, business and public administration as a direct result of a new regulation. They can be either one-off or recurring costs and savings.

The methodology for determining and presenting compliance costs is specified in a set of guidelines that are regularly updated and uniformly applied throughout the government. On the basis of these guidelines and taking into account any feedback from the addressees of the legislation, the NKR reviews the plausibility of information provided by the ministries and advises them on the methodology’s application.

The NKR documents the results of this review in a statement that is submitted to the cabinet before new regulatory instruments are adopted. NKR statements on the Federal Government’s regulatory initiatives become part of the Bundestag printed papers, thereby entering the public domain.

Besides compliance costs, the NKR also assesses other aspects of better regulation, such as benefit analyses, alternative approaches, and statements on issues such as evaluation or legislative and administrative simplification.