Analysis of the draft law:
Analysis of the Draft Law Regarding the Responsibility of Officials of State Oversight (Control) Bodies
Essence of the Draft Law
The Draft Law aims to strengthen the administrative responsibility of officials of state oversight (control) bodies for violations during control measures. This is achieved by clarifying the list of violations for which responsibility is provided, and increasing the amount of fines for such violations. The law is aimed at increasing the legality and validity of the actions of regulatory bodies, as well as protecting the rights of business entities from illegal actions of controllers.
Structure and Main Provisions of the Draft Law
The Draft Law consists of two articles. The first article amends Article 1667 of the Code of Ukraine on Administrative Offenses (CUoAO). The main changes are as follows:
- Excluded liability for failure to provide or untimely provision of an act (certificate) on the results of the state oversight (control) measure.
- The wording regarding the conduct of unscheduled control measures without the approval of the relevant authorities has been clarified.
- The wording regarding the implementation of control measures without the use of unified forms of acts has been clarified.
- The wording regarding the provision of unreliable information has been clarified.
- A new element of administrative offense has been added – making an unlawful decision based on the results of the control, the illegality of which has been confirmed by the court.
- The amount of fines for most violations has been increased.
The second article defines the date of entry into force of the Law – the day following its publication.
Main Provisions Important to Stakeholders
The following provisions may be most important for various groups of stakeholders:
- For legislators: The introduction of liability for making unlawful decisions based on the results of control, confirmed by the court, may become an important mechanism for controlling the activities of state oversight and control bodies. Increasing the amount of fines may increase the effectiveness of administrative sanctions.
- For experts: Clarification of the wording regarding violations for which liability is provided requires analysis for their compliance with the principles of legal certainty and proportionality.
- For business: Increasing fines may create an additional financial burden on businesses in the event of violations by officials of regulatory authorities. At the same time, the introduction of liability for unlawful decisions confirmed by the court may become an important tool for protecting the rights of businesses from the arbitrariness of controllers.
- For citizens: Strengthening control over the activities of state oversight (control) bodies may contribute to more effective protection of the rights and interests of citizens in various fields, such as healthcare, consumer protection, environmental safety, etc.
Analysis of the explanatory note:
Analysis of the Draft Law of Ukraine “On Amendments to the Code of Ukraine on Administrative Offenses Regarding Increasing the Responsibility of Officials of State Oversight (Control) Bodies”
Essence of the Draft Law
The draft law is aimed at strengthening the responsibility of officials of state oversight (control) bodies by increasing the amount of administrative fines for violations of legal requirements in the field of state oversight (control) in economic activity. This is intended to reduce abuse and violations by regulatory authorities.
Reasons and Necessity for Adopting the Draft Law
The authors of the explanatory note believe that the adoption of this law is necessary to stimulate the economy and overcome the negative consequences caused by restrictive measures during the COVID-19 pandemic. Increasing the responsibility of officials of regulatory bodies should ensure more effective and lawful oversight (control) in the field of economic activity, which will contribute to business development and investment attraction.
Main Consequences of the Draft Law
The most important consequences that may be of interest to various stakeholders are:
- For legislators: The law is aimed at improving the state oversight (control) system and transitioning from a punitive-repressive model to a preventive and risk-oriented one.
- For experts: It is important to assess whether increasing fines will actually lead to a reduction in violations by regulatory authorities and whether this will have a negative impact on the business environment.
- For business: On the one hand, this may mean a reduction in abuse by regulatory authorities, on the other hand, increased fines for officials may lead to more thorough and scrupulous control.
- For citizens: The implementation of the law should create favorable conditions for doing business, developing entrepreneurship and attracting investment, which ultimately may have a positive impact on the economic situation in the country.
Analysis of other documents:
Analysis of Financial and Economic Calculations for the Draft Law of Ukraine
The author of this document supports the draft law “On Amendments to the Code of Ukraine on Administrative Offenses Regarding Increasing the Responsibility of Officials of State Oversight (Control) Bodies”. This follows from the fact that the document is a financial and economic justification necessary for consideration of the draft law. The purpose of the draft law, as stated, is to strengthen the responsibility of officials, which should help reduce the number of violations.
Main provisions of the document:
- Period of implementation of the act: It is stated that the act is planned to be implemented starting in 2022 and on a permanent basis.
- Strategic goals: The document defines strategic goals, such as creating favorable conditions for doing business and reducing the number of violations by officials of regulatory authorities. It is planned to increase the percentage of fines paid to the budget from the total amount of imposed sanctions (from 7.47% in 2021 to 50% in 2024) and reduce the number of violations by officials (from 30 in 2021 to 25 in 2024).
- Budget program: A large number of budget programs are listed, within which the implementation of the act is planned.
- Financial aspects: The total cost of the public service for the formation and implementation of the act is estimated as not requiring additional costs from the state budget.
- Issues regarding the implementation of consolidated calculations: The document addresses issues regarding possible state support, changes in wages, acquisition of property, procurement, changes in income, debt obligations and powers.
- Interested parties: Interested parties are identified, to which the implementation of the act is directed, namely business entities and officials of state oversight (control) bodies.
- Direct and indirect costs: It is indicated that there are no direct and indirect costs.
- Consolidated financial and economic calculations: It is stated that the implementation of the draft act will not require additional costs from the State Budget of Ukraine and the opening of a new budget program.
- Justification and assumptions: It is emphasized that the implementation of the draft act will not require additional costs from the State Budget of Ukraine and the opening of a new budget program.
- Risks: The main risk is considered to be the absence of violations by officials and non-payment of fines by business entities. Fiscal risks are not foreseen.
For legislators, it is important that the document confirms the absence of the need for additional budgetary expenditures, which makes the project more attractive for approval. Experts should pay attention to the strategic goals and performance indicators to assess the realism of achieving the set goals. Businesses should take into account the possibility of increased control and increased penalties, and citizens should understand how this law will affect the quality of state oversight and protection of their rights.
