The Verkhovna Rada is considering draft law No. 14030, which proposes adopting a new version of the Law on the Basic Principles of State Supervision (Control) and aligning dozens of sectoral laws with it. This is not a technical amendment, but a structural reform of the entire system of state control in the sphere of economic activity.
The draft law effectively replaces the 2007 framework and introduces a new model of interaction between the state and businesses with regard to inspections, liability, and appeals. One of its key elements is strengthening the coordinating role of the specially authorized body on state supervision (control). This body will be granted methodological, analytical, and oversight powers, including the review of complaints filed by business entities. As a result, a more centralized governance model of the inspection system is being established.
A significant innovation is the creation of a unified integrated information and communication system. All supervisory measures, inspection results, complaints, decisions, and performance indicators of officials will be recorded in this system. This marks a transition toward deeper digitalization of procedures and the establishment of a transparent regulatory track record for both businesses and supervisory authorities.
The draft also introduces an “activity audit” mechanism with a preventive focus. This tool may be applied, in particular, to newly established enterprises and businesses affected by the war. Such an audit does not result in sanctions but may influence the frequency of scheduled inspections and, in certain cases, temporarily exclude a company from inspection plans. In this respect, the reform signals a shift from a punitive model toward a more advisory and preventive approach.
The proposal further clarifies the rules on liability of supervisory authorities and their officials. It provides for compensation of damages to businesses at the expense of the state, followed by recourse claims against the responsible official. The principle of proportionality of sanctions is reinforced, including the application of minimum penalties for first-time violations, which is intended to reduce the risk of excessive regulatory pressure.
Particular attention should be paid to the updated administrative appeal mechanism. Councils on State Supervision (Control) will be established both within supervisory authorities and under the specially authorized body. These councils must include representatives of businesses and civil society. This creates an additional institutional level for reviewing decisions prior to court proceedings and may strengthen procedural safeguards for economic operators.
At the same time, amendments to the Code of Administrative Procedure will allow supervisory authorities to apply to the courts more swiftly for the imposition of response measures, including temporary suspension of activities. Court decisions in such cases will be subject to immediate enforcement, increasing the effectiveness of state intervention while requiring balanced application in practice.
The scope of the reform covers more than forty legislative acts across various sectors — from energy and environmental regulation to education, healthcare, and the gambling market. In effect, a unified regulatory framework for state supervision (control) across sectors is being established.
In our assessment, draft law No. 14030 represents an attempt to modernize the state supervision model in a systemic manner, making it more structured, digitalized, and procedurally defined. At the same time, the success of the reform will largely depend on the quality of its implementation: the proper functioning of the information system, the real influence of supervisory councils, and a balanced approach between rapid state intervention and adequate safeguards for businesses.
Provided that the mechanisms envisaged in the draft are implemented effectively, the reform may enhance the predictability of the regulatory environment and reduce friction between businesses and supervisory authorities. We support the direction toward a transparent, structured, and proportionate model of state supervision and will continue to monitor the further legislative process and practical implementation of this reform.
