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LEGAL ALLIANCE, founded in 1995, is today one of the leading Ukrainian law firms specializing in legal support to pharmaceutical companies doing business in Ukraine and CIS countries.

OUR CLIENTS represent the following industries: pharmaceuticals, medical devices, consumer goods, medicine, cosmetics, para-pharmaceuticals, chemistry, biotechnology, agriculture and food products.

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​Draft legislation on reducing pressure on business by market surveillance authorities makes duplication of supervision impossible – lawyers

For the materials of the Interfax-Ukraine News Agency dated December 5, 2019.

The draft legislation on reducing pressure on business by market surveillance authorities makes it impossible to duplicate the supervision of one and the same enterprise, think the lawyers of Legal Alliance Company Illya Kostin and Victoria Malyniak, interviewed by the Interfax-Ukraine Agency.

“The changes proposed by the draft legislation make it impossible to duplicate the supervision of one and the same enterprise by different supervisory authorities, and this helps to reduce pressure on the part of the state on the business,” said Illya Kostin, a partner at Legal Alliance Company and Victoria Malyniak, an assistant associate at this Company, commenting on the draft legislation No. 2172.

They emphasized that the amendments to the legislation in the field of state market supervision introduced by this draft legislation provide for specific mechanisms of protecting the rights of business entities. In particular, an explicit prohibition for inspections of products of a different type, except for that noted in the direction of market surveillance authority, is supposed.

The draft legislation also provides for the right of business entities during a scheduled inspection, to prevent officials conducting market surveillance from an inspection of product characteristics not specified in the relevant sector plan of market surveillance.

The lawyers stressed that state market surveillance is the activity of market surveillance authorities in order to ensure that products comply with the established requirements, as well as ensuring that there is no threat to public interests. Today, several authorities perform state supervision, namely, the State Service of Ukraine for Transport Safety, the State Architectural and Construction Inspection of Ukraine, the State Emergency Service of Ukraine, the State Labor Service of Ukraine, State Service of Ukraine on Medicines and Drug Control, State Environmental Inspectorate of Ukraine and the State Service of Ukraine on Food Safety and Consumer Protection.

These authorities may perform inspections of product characteristics, including sampling of products and their examination, carry out restrictive measures (restricting or prohibiting the provision of products on the market, withdrawing products from circulation; recalling products), monitoring the status of implementation of decisions on the adoption of restrictive measures, and consumer warning about the hazards of products, identified by market surveillance authorities.

“As we have seen, the legislator provided market supervision authorities with a wide range of powers, the abuse of which can cause significant damage to product manufacturers. The amendments proposed by the draft legislation make it impossible to duplicate the supervision of the same enterprise by different supervisory authorities, and this will help reduce pressure from the state on business," Illya Kostin and Victoria Malyniak emphasized.

At the same time, Oleksiy Burchevskiy, lawyer and analyst at Kinstellar, the international law firm, noted that the draft legislation No. 2172 "is another element of cleaning up the market for non-food products, mainly electronics, from small and medium-sized businesses in the interests of large network retailers."

According to him, the draft legislation, in particular, proposes to expand the powers of market surveillance authorities for non-food products and to authorize government agencies that previously did not have such powers to carry out control.

“In recent years, business complaints about the formalistic approaches of inspectors of state market surveillance authorities, mainly the State Consumer Service, have intensified. So, instead of identifying the real danger of a product that often requires lengthy and costly examinations, inspectors write fines for the wrong product labeling, improper technology of applying marks in conformity with technical regulations. It is clear that the main motive of inspectors in this case is trivial state budget at the expense of entrepreneurs," he said.

Oleksiy Burchevskiy noted that business entities dispute the acts of inspections of various market surveillance authorities in the courts. At the same time, the most successful in this are large network retailers with legal departments with experience in supporting inspections and challenging their results.

In early November, the Verkhovna Rada adopted, on first reading, as a basis the draft legislation No. 2172 on reducing pressure on businesses from market surveillance authorities, which abolishes control duplication of certain types of products.

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