BRDO expert: Liberalizing of business activity inspections will economize more than 500 million hryvnias for entrepreneurs

Business will be able to economize more than 500 million hryvnias due to liberalizing a procedure of business activity inspections, which is introduced by draft laws № 2418а, № 2531а and № 2422а (prepared for second reading) that have to liberalize the inspection procedure, the BRDO expert Volodymyr Holovatenko says.

“Draft laws reforming the state supervision (control) system propose to liberalize the inspection procedure. It has to help make business activities more predicted”, Volodymyr Holovatenko concluded. “Thus, the principle, according to which the state inspection (control) will be focused on crime preventing instead of the punishment application, is introduced. In order to implement this principle, it is planned to oblige a regulator to inform a business entity about identified mistakes in its reports.”

BRDO experts together with partners participated in the working group to improve these draft laws. Their adoption will bring a range of advantages for business.

  1. The cut of the inspection number and duration. If previously the regulator inspected the business annually, now planned inspections will be conducted biennially.

The regulators will be able to inspect the business entity within 30 working days throughout the year, and small businesses – within 15 working days. Also, the deadline for planned inspections of business entities conducted by one regulator will be reduced from 15 to 10 working days.

For example, if the average inspection involves two employees, and their average pay amounts to 4 498 UAH (data for November, 2015), then average potential savings of a certain business will be 8 771 UAH per year. Considering the total number of planned inspections (about 120 000), we have business cost savings of 539 million UAH per year. BRDO experts believe that introduced changes will reduce business costs for interaction with regulatory agencies by 65%.

  1. Annual plans on inspections. Only annual plans will be formed for conducting planned inspections. Regulatory agencies will be able to amend them only to correct technical mistakes and in cases of economic entity titling. By the way, the inspection plan for 2016 will be posted on official websites of the BRDO and the Ministry of Economic Development and Trade of Ukraine.
  1. Integrated automatic state supervision (control) system. This system will allow collecting, storing and systemizing the information on measures of state inspection (control). Accumulating such information will help to monitor the inspection procedure conducted by regulatory agencies.
  1. Unified act form for inspections. The procedure of state supervision (control) should become more transparent, as every regulator will be obliged to publish the unified act form for inspections on its own website. It contains a full list of points that business entities can be inspected for.
  1. Restrictions for unplanned inspections. The prohibition to conduct unplanned inspections of economic entities regarding a fact that became a reason for this inspection is introduced. It will not allow using the state supervision (control) for raider attacks on business. The permission for unplanned inspections by the citizens’ request should be published on website.

It is to be reminded, that the Parliament adopted draft laws № 2418а, № 2531а and № 2422а at the first reading on Day of Economic Development and Deregulation, on November 13, 2015.