Moratorium cancellation is on verifications

International activity of Ukrainian authority had led to agreements from IMF, which had to contribute to decrease of administrative pressure on small and medium-sized business.

One of such agreements meant control checks cancellation of business by state control bodies. As a result, in 2015-2017 there were not scheduled checks.


Situation as for 2018

On December 30, 2017, under the Law on the State Budget, It was prolonged term of a moratorium to December 31 of 2018th. Also, it was fixed certainly additional grounds of conduction the unscheduled control measures.

The moratorium concerned only planned control measures, and therefore the main instrument that remained in the hands of the control bodies was unscheduled inspections. However, they also had a limited range of action.

Unplanned events could only be carried out on the following grounds:

  • for the petition of a person regarding the violation of his business rights;
  • At the request of the enterprise on the basis of a written application;
  • on the basis of a court decision;
  • if there is a certain accident, death caused by an accident in connection with the activities of the enterprise;
  • if an event has occurred that has a harmful effect on human life and health, its rights and interests, the environment;
  • to establish the status of implementation of orders and regulations issued during the preliminary examination in order to eliminate violations.


However, the moratorium did not apply to all supervisors. The list of exceptions was determined by the resolution of the Cabinet of Ministers of Ukraine № 1104 dated 12/18/2017.

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How did the changes take place in 2019?

Along with the termination of the moratorium, the effect of a number of laws is restored; accordingly, the old-new rules for conducting inspections will be applied, in particular:

  • Inspections of the enterprises will be carried out in accordance with the plan, placed on the inspection portal, access to which is free. Inspection can be carried out only by inspectors who have check-lists with precisely defined risks of enterprises;
  • The frequency of inspections directly depends on the degree of risk of the enterprise:
    • high risk – one check within 2 years;
    • average risk level – one check within 3 years;
    • low risk – one check within 5 years;
  • before December 1 of the year preceding the year of the inspections, each control body is obliged to approve the planned measures for the following year;
  • if one enterprise becomes the subject of verification of several different controlling bodies, then it will be possible to carry out a comprehensive planned action. The plan for such measures is approved and made public on the official website of the State Regulatory Service of Ukraine on November 15, the year preceding the reporting.


Certain features will apply to entities that use the simplified taxation system. Law № 4448 stipulates that they can be verified only:

  • For compliance with sanitary norms, labor and employment legislation (including the employment of disabled persons), vacancy advertisements, compulsory state social insurance (in terms of appointment, accrual, payment of insurance payments), provision of social services – supervisory authorities through planned and unscheduled control;
    • It should also be noted that a number of powers to conduct inspections in the field of sanitary legislation belongs to the State Service of Ukraine for Food Safety and Consumer Protection (SSUFSCP), in particular as regards the safety of food products, phytosanitary and veterinary and sanitary control, and the scope of the law No. 4448 does not cover such social relations (Section 2, Art. 2 of the Law No. 4448). Therefore, we can conclude that the State Committee for Industrial and Commercial Services will conduct such control measures on general grounds.
  • Bodies of consumer protection (SSUFSCP) on complaints of consumers by means of unscheduled control measures;
  • The Pension Fund for medium-risk subjects through planned and unscheduled control measures.


How many inspections are waiting for business in 2019?

As indicated in the Inspection Portal, in 2019 more than 121,000 enterprises will be checked, more than 30,000 business entities will be subject to complex inspections.

Most inspections will be carried out by such supervisory authorities:

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  • The State Emergency Service of Ukraine – 76,300 inspections;
  • SSUFSCP – 21 897 inspections;
  • State Service of Ukraine on Labor – 16 905 inspections.


Regarding the enterprises that are subject to inspection, the most popular among the controlling bodies are:

  • Agricultural enterprises – about 17 000;
  • Wholesale and retail enterprises – about 11,000;
  • Construction companies – about 5000.


The food industry and the transport industry will be checked a little less.


Who needs to be most afraid of?

The greatest danger to business is the DFS and the State Labor Organization. These two bodies are considered to be the main fillers of the state budget in 2019. In comparison with the draft budget for 2018, the amount of tax revenues in 2019 should increase by 101 billion UAH. In addition, raising the minimum wage to 4,173 UAH will entail an increase in the amount of ECU, which must be paid by the employer, which may result in avoiding the conclusion of employment contracts by some employers. And the penalties for such a deviation are very high. For example: admission to work of an unregistered employee – 125 190 UAH, payment of wages below the average level – 41 730 UAH, etc.


And finally…

The result of the verification will depend on the number and severity of the violations detected. Depending on the authority conducting the inspection, and the type of breach of the company, they may provide some time for correction of violations or impose a fine immediately. So, do not risk and try to correct the violation before the check is started.

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