SUP proposed a draft law on imposing personal liability on regulatory authorities' representatives
SUP proposed a draft law on imposing personal liability on regulatory authorities' representatives
11 March 2019

Union of Ukrainian Entrepreneurs is consistently moving forward with the "TOP-10 Business Demands tot he Government" and initiates a draft law "On Improving State Administration System for Reducing the Number of Illegally Adopted Decisions in Respect of Business Entities" regarding the imposition of personal liability on representatives of state supervision (control) authorities.

Business community has been concerned with unlawful actions and decisions made by officials as regulatory authorities representatives authorised by state for a while now. This is because officials of regulatory authorities have no sense of responsibility at all while performing powers vested in them. When generating numerous illegal decisions, controllers bear no responsibility lay foundation for future similar illegal practice.

The official statistics of regulatory authorities activity states that regulatory authorities detect violation in 71.98% of inspections. Rates of some "top" controllers are even higher: State Emergency Service of Ukraine — 97.88%, State Ecological Inspection of Ukraine — 83.62%, State Architecture and Construction Inspection of Ukraine — 75.05%, Public Service of Geology and Subsoil of Ukraine — 89.03%.

However, these decisions are usually cancelled. According to statistics of administrative courts for 2017, more than 83% of lawsuits initiated by fiscal service regarding the administration of taxes, duties and payments were ruled in taxpayers' favour.

According to the Global Competitiveness Index, actions of regulatory authorities were recognised as one of the biggest obstacles for business in Ukraine. Moreover, no case was considered in 2017 on imposing administrative liability for violating state supervision procedure.

Union of Ukrainian Entrepreneurs stepped in and together with one of its members, KM Partners Attorneys at Law, business ombudsman and expert community, prepared a relevant draft law providing for the following initiatives:

Imposition of administrative liability:

1. Penalty for one illegal regulation
2. Deprivation of the right to hold offices on the 11th time of imposition of liability by court for illegal regulations.

Regardless of whether or not a person is held liable, he/she will:

1. Automatically be stripped of his/her powers to sign regulations after a court establishes 20 cases of previous documents illegality. This mechanism is a "safety measure", which prevents liability evasion by officials. One will be automatically stripped of his/her powers, which will lead to no corruption risks connected with the necessity to make related decisions.

Our Union hopes that the parliament da will support this developed initiative, thereby ensuring the improvement in business environment in Ukraine! We are ready to present the document to legislation authorities and we are open to discussion!
 

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