Moratorium on Business Inspections Extended until 2017

On November 3, 2016, Verkhovna Rada of Ukraine adopted the Law «On Peculiarities of State Supervision (Control) over Business Activities». The Law regulates the grounds for scheduled and unscheduled inspections conduct.

The Law provides for the scheduled inspections of business to be postponed until December 31, 2016.

The unscheduled inspections in their turn have also been postponed until December 31, 2016, but with some exceptions. In particular, the unscheduled inspections may be conducted on the following grounds:

• Upon a written application of business entity submitted to responsible supervision (control) authority regarding the conduct of state supervision at his will;
• Upon court ruling;
• Subject to emergency, indemnitee’s death due to an accident related to business entity activities;
• Upon justified application of an individual regarding his/her legitimate rights violation by business entity to be conducted by state supervision (control) authority in coordination with State Regulatory Service.

At the same time, the Law’s effect is not absolute and the moratorium does not cover the inspections conducted by:

• National Commission for State Regulation of Energy and Public Utilities,
• National Securities and Stock Market Commission,
• State Service on Food Safety and Consumer Protection and its territorial bodies,
• State Fiscal Service of Ukraine and its territorial bodies,
• State Financial Inspection and its territorial bodies,
• State Service of Export Control of Ukraine,
• State Nuclear Regulatory Inspectorate of Ukraine and its territorial bodies,
• State Aviation Service of Ukraine,
• State Architectural and Construction Inspection of Ukraine and its territorial bodies (with regard to the inspection of compliance with state construction standards and rules on accessibility for persons with limited mobility),
• State Ecological Inspection,
• National Council of Television and Radio Broadcasting of Ukraine,
• National Bank of Ukraine,
• Antimonopoly Committee of Ukraine.

According to the legislator, the extension of the moratorium shall provide for the improvement of business-climate in Ukraine. At the same time, we should admit that the abovementioned restrictions do not cover the inspections conducted by the AMCU (for example, regarding the violation of competition law), State Service on Food Safety and Consumer Protection (for example, concerning the violation of consumer rights), Fiscal Service Departments (tax inspections), whose activities when applied may significantly affect the daily operations of pharmaceutical companies.

On the date of this publication the Law is not in force.