On 1 January 2017, the Law of Ukraine "On Temporary Peculiarities of State Supervision (Control) in the Sphere of Business Activity" as of 3 November 2016 No. 1728-VIII (the "Law") took effect. The Law introduces a moratorium on scheduled audits by controlling agencies until 31 December 2017. The moratorium applies equally to all companies irrespective of their revenues.
Furthermore, the Law sets forth the following exhaustive list of grounds allowing a controlling agency to perform an unscheduled audit of a company:
- an individual's substantiated application regarding a breach of his/her legal rights by a company (in this case, a controlling agency will need to get an approval from the State Regulatory Service of Ukraine, and such approval has to be published on the Service's website in advance);
- a company's own written request;
- a court decision;
- an emergency or death caused by an accident relating to company's business activity.
That said, the Law does not apply to audits carried out by the National Securities and Stock Market Commission, the State Service of Ukraine on Food Safety and Consumer Protection, the State Fiscal Service of Ukraine, the State Service of Ukraine on Labor, the State Ecology Inspection of Ukraine, the Antimonopoly Committee of Ukraine and certain other governmental agencies defined in the Law.
Nevertheless, such agencies as the State Administration on Pharmaceutical Products and Drugs Control of Ukraine, the State Emergency Service of Ukraine, the National Commission for the State Regulation of Communications and Informatization, etc. do not fall within the carve-out under the Law. Accordingly, the moratorium on scheduled audits and restrictions on unscheduled audits envisaged by the Law do apply with regard to these governmental agencies.
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