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Liberalization of state supervision as a significant step towards business Back

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On November 3, 2016, the Verkhovna Rada of Ukraine adopted the bill No. 2418a on liberalization of state supervision, which changes the approach to inspections in Ukraine and aims at reducing pressure on business and preventing violations of the law.

Thus, important innovations of this bill include introduction of presumption of legitimacy of the enterprise activity in the event that the rule of law or other normative legal act issued on the basis of the law, or if the norms of different laws or different legal acts allow an ambiguous (multiple) interpretation of rights and obligations of business entity and/or powers of the state supervision (control) authority, as well as preventing the establishment of plan targets or any other planning for making business entities accountable and applying sanctions on them.

In order to provide business entities and public authorities, local governments with information on measures of state supervision (control), an integrated automated system of state supervision (control) is envisaged. This system will store information about legal entities and individual entrepreneurs, types of economic activities that are subject to state supervision, annual plans for carrying out control activities, reports on their implementation, and so on. At the same time, access to information in this system will be open and free on the Internet.

Changes in the bill also concern planning of measures for implementation of the state supervision (control) exclusively for an annual period, with the abolition of quarterly plans and the prohibition of their modification. The timing of the audit plan, as well as the duration of each control event, its beginning and completion, are clearly prescribed. So, before October 15th of each year, companies and individuals-entrepreneurs, which should be checked by state controllers within the next year, must be identified.

In addition, the deadline for implementing the planned event may not exceed 10 working days, and 5 working days – for micro and small business entities. At the same time, the total duration of all planned activities carried out by the state supervision (control) authorities during a calendar year in relation to the business entity (complex planned action) may not exceed 30 working days, and 15 working days – for a small business entity.

The bill narrowed the grounds for implementing unscheduled measures for the implementation of state supervision (control), established the procedure for notifying the business entity on holding such a measure, released the business entity, the officials of the legal entity from responsibility for refusing to give evidence or explanations for the activities of the business entity, and envisaged many other innovations to liberalize state supervision in Ukraine.

Proceeding from the foregoing, TEFFI Law Firm’s lawyer Marianna Kozminskaia believes that the bill No. 2418a made a significant step towards the business. Consequences of its adoption should be as follows: prevention of unjustified interference of state supervision bodies in economic activities, growth of the level of entrepreneurs’ confidence in the state and reduction of tension in society when carrying out inspections.