In 2019, the following regulatory bodies visited the business:
- State Ecological Inspectorate (State Coinspection);
- State Service of Ukraine for Food Safety and Consumer Protection (State Food and Consumer Service);
- State Service of Ukraine for Labor (State Labor);
- State Emergency Service (DSNS).
According to the annual plans for 2020, these bodies planned to conduct more than 92 thousand inspections.
Earlier in the article about the consequences of inspections of regulatory authorities we described one of the main risks for business - going to court to sue to stop the company. However, the regulatory authorities, after the inspections, also began to turn to law enforcement agencies. The latter are willing to initiate criminal proceedings, as this is a convenient opportunity to put pressure on business through searches, seizures and interrogations. This creates additional risks for the company and its management.
What does open criminal proceedings mean for an enterprise? Here are some of the possible risks:
Therefore, it is necessary to understand how the inspection of the controlling body can lead to the emergence of criminal proceedings and whether it is possible to avoid it. Consider the example of individual regulatory authorities.
State Ecological Inspectorate
In 2019, the State Coinspection conducted 10,207 inspections.
The Regulation on the State Ecological Inspectorate of Ukraine stipulates that based on the results of the inspection, the inspector has the right to apply to law enforcement agencies in case of detection of a probable crime against the environment (item 15 item 6 of the Regulation approved by the Resolution of the Cabinet of Ministers of 19.04.2017 №275). Inspectors of territorial inspection bodies have a similar right.
Although the State Coinspection is not obliged to apply to law enforcement, it very often enjoys such a right, which is confirmed by case law.
The Unified State Register of Court Decisions contains many rulings of investigative judges, which testify to the opening of criminal proceedings by law enforcement officers at the request of the State Coinspection.
Depending on the type of offense, law enforcement officers initiate criminal proceedings under one of the articles of the Criminal Code of Ukraine (hereinafter - the Criminal Code of Ukraine), which determines the responsibility for crimes against the environment (Articles 236-254 of the Criminal Code of Ukraine).
For example, on November 29, 2018, the Investigative Department of the Osnovyansky SE of the GUNP in Kharkiv Oblast initiated criminal proceedings at the request of the State Ecological Inspectorate in Kharkiv Oblast against the enterprise for violation of environmental safety rules (court decision in case №646 / 1464/19). As a result, the enterprise was searched, documents were seized and arrested.
|The reason for the appeal was the inspector's inadmissibility to conduct a scheduled inspection. In this case, the State Coinspection did not even record any violations, at least indirectly related to the commission of the crime, and law enforcement officers should not have initiated proceedings on such a request at all. But the non-admission to the inspection did not stop the State Coinspection, and they still turned to the police!
Another situation. On September 29, 2016, the Investigative Department of Starokostiantynivskyi SE of the State Enterprise in Khmelnytskyi Oblast initiated criminal proceedings at the request of the State Ecological Inspectorate in Khmelnytskyi Oblast regarding the enterprise due to pollution or damage to land (court decision in case №683 / 2464/16-k). The pre-trial investigation has been going on for 2 years now, with investigative and procedural actions being carried out periodically. Thus, almost 2 years after the start of the proceedings, on May 11, 2018, the court granted permission to withdraw from the company the original documents relating to the criminal proceedings.
Agree, an unpleasant situation when from 2016 at any time at the enterprise the investigator can come and start withdrawing documents.
State Security Service of Ukraine food and consumer protection
In 2019, the State Service of Ukraine for Food Safety and Consumer Protection held 21,897 inspections.
The Regulation on the State Service of Ukraine for Food Safety and Consumer Protection explicitly states that one of the tasks of the State Food and Consumer Service is sending inspection materials to law enforcement agencies to address issues of criminal prosecution of persons whose actions contain signs of a criminal offense (item 6, item 4 on the State Service of Ukraine for Food Safety and Consumer Protection, approved by the Resolution of the Cabinet of Ministers of 02.09.2015 № 667).
As you can see, the State Food and Consumer Service has legal grounds to apply to law enforcement agencies and in practice this happens quite often. Below we will consider some examples when the inspection of the State Food and Consumer Service ended with an appeal to law enforcement agencies and further criminal risks for business.
By the way, law enforcement agencies often initiate criminal proceedings under Article 325 of the Criminal Code of Ukraine, which defines the responsibility for violating sanitary rules and regulations for the prevention of infectious diseases and mass poisoning.
Example, 08.06.2017 to Svitlovodsk City District Court of Kirovohrad Region the investigator's request for permission to conduct an unscheduled documentary inspection of compliance with the requirements of tax legislation in the activities of a natural person-entrepreneur, on the grounds of a crime under Part 2 of Article 325 of the Criminal Code of Ukraine.
In this case, the police received a report from the State Food and Consumer Service in the Kirovohrad region about cases of botulism among residents of Kyiv and Kherson, one of which was fatal. During the sanitary and epidemiological investigations of these cases, it was established that the victims ate dried fish purchased in supermarket chains, the producer of which is a natural person-entrepreneur.
Under Article 325 of the Criminal Code of Ukraine, under similar circumstances, many criminal proceedings were instituted in which law enforcement officers seized documents, interrogated witnesses, and sometimes conducted searches.
It should be noted that the issue of appointing unscheduled inspections by investigating judges does not belong to the powers of a judge during criminal proceedings (see item 51 of the decision of the Supreme Court of March 6, 2018), but nevertheless - judges appoint such inspections for business.
As you can see, the investigation of the State Food and Consumer Service resulted not only in the opening of criminal proceedings, but also in conducting a tax audit. And such problems are a direct consequence of the appeal of the supervisory authority.
We will protect during inspection of controlling body
State Service of Ukraine for Labor
The State Labor Service of Ukraine for 2019 conducted 16,905 inspections.
In accordance with paragraph 5, paragraph 6 of the Regulations on Territorial Bodies of the State Service of Ukraine for Labor, approved by the order of the Ministry of Social Policy from 27.03.2015 №340, the Department of State Labor has the right, in particular, to conduct inspections of production, service, administrative premises and production facilities of individuals and legal entities operating machines, mechanisms, high-risk equipment, and in case of detection to record the facts of violation of the law.
The register of court decisions contains a large number of open criminal proceedings not only under articles providing for liability for violations in the field of safety of production: Article 272 of the Criminal Code of Ukraine (violation of safety rules when performing high-risk work), Article 273 of the Criminal Code safety rules at explosive enterprises or in explosive shops), Article 274 of the Criminal Code of Ukraine (violation of nuclear or radiation safety rules), Article 275 of the Criminal Code of Ukraine (violation of rules concerning safe use of industrial products or safe operation of buildings and structures). Some of them were initiated at the request of the supervisory authority.
Yes, with decision of the investigating judge of the Lyubar district court of the Zhytomyr region from 05.04.2019 it is seen that the basis for the initiation of criminal proceedings against a number of LLCs under Art. 273 of the Criminal Code of Ukraine became a letter from the Department of Labor in the Zhytomyr region. The police used this letter as a basis for initiating criminal proceedings. According to the investigation, the companies violated safety rules at explosive enterprises, which posed a threat of death and other serious consequences.
As part of this criminal proceeding, investigators asked the court to grant permission for an unscheduled on-site audit of certain issues of financial and economic activities and asked for a forensic examination of the quality and safety of fuel.
Thus, letters sent by the territorial bodies of the State Labor Service to law enforcement agencies can also be used to open criminal proceedings and create problems for business.
State Emergency Service
In 2019, the State Emergency Service held 43 100 business inspections.
The activity of the SES is regulated by the Regulation on the Civil Service of Ukraine for Emergencies, approved by the Resolution of the Cabinet of Ministers of 16.12.2015 №1052.
The provision does not provide for the right or obligation of the SES to send inspection materials to law enforcement agencies. However, after the inspections, the SES bodies turn to the police, and the latter open criminal proceedings and initiate investigative actions.
Example, On March 21, 2019, the investigating judge of the Vilshansky District Court of the Kirovohrad Region seized the company's documents based on the results of a search of the oil depot. The basis for the initiation of criminal proceedings was the act of the Vilshansky district department of the SES in Kirovohrad region to verify the requirements of legislation in the field of civil protection, man-made and fire safety.
According to the inspection report, the activity of the oil depot was carried out in gross violation of fire safety rules, which posed a threat to human life and health at explosive enterprises.
After the appeal of the controlling body, the police initiated criminal proceedings under Part 1 of Article 273 of the Criminal Code of Ukraine (violation of safety rules at explosive enterprises or explosive shops) and searched the territory and administrative premises of the oil depot. Following the search, the investigator decided to arrest the seized documents and went to court.
As you can see, the result of the firefighters' appeal to law enforcement officers was a search, seizure and seizure of documents.
However, there are situations when the owner of the enterprise plays on the lead. When the investigator goes to court and asks to seize the property, the owner proves in court that there are no grounds for arrest.
For example, on February 21, 2019, the investigating judge of the Oleksandriia City District Court of the Kirovohrad Region considered a motion to seize two gas stations.
At the meeting, the owner of the enterprise provided the court with evidence that to ensure the work on the above facilities received all permits required by applicable law, the company fulfilled a number of requirements to comply with SES, unscheduled inspections, developed action plans to eliminate violations.
In view of the above, the investigating judge denied the request to seize the property.
From this case, it can be concluded that if the court provides evidence of compliance with the order of the SES, the elimination of the identified violations is a high probability that law enforcement officers will not be able to seize property in court.
|Visits by regulatory authorities may result in criminal proceedings and negative consequences for the company's managers and employees. We recommend conducting an audit, legal training of employees, support of the inspection during and after it.
Audit of the enterprise to identify possible violations will help to eliminate them in advance.
Sometimes, the risks are created by the employees themselves, who tell the inspector too much. They also need to be prepared and consulted during the inspection.
Legal training of employees. If there are no grounds for not admitting the inspector, it is necessary to provide legal support for the inspection and analyze the validity of the identified violations. Real violations must be eliminated and notified to the supervisory authority.
Inspection support. If after some time after the inspection law enforcement officers came to the enterprise, it is first of all necessary to demand further communication only in the presence of a lawyer. The very presence of a lawyer will deter law enforcement officers from committing illegal acts, intimidating and exceeding their authority.
Published in the Journal of the Chief Engineer