Business Ombudsman Council’s Financial Impact Reaches UAH 17bn

The Office received 398 complaints from entrepreneurs – a 2% decrease from previous quarter – and closed 286 cases. The quarterly financial impact of operations accounted for UAH 3.5 bn, and now exceeds UAH 17 bn in total. 97% of applicants remained satisfied with the BOC’s facilitation in considering their cases.
Tax issues (60%), actions of law enforcement bodies (13%), malpractice by state regulators (9%), local councils’ (5%) and customs issues (5%) constituted a vast majority of complaints. Compared to the previous quarter, companies filed 6% more tax appeals – mainly driven by complaints regarding tax invoice suspension and VAT electronic administration. The number of complaints regarding state regulators increased by 13% with State Architectural and Construction Inspectorate and StateGeoCadastre being on top of complainees’ list. On a separate positive note – the appeals against National Police and State Security Service went down by 16% and 50% respectively.
Issues concerning local government authorities ranked fifth in the appeals ranking, a 24% increase from previous quarter. Having looked deeper into this category, the BOC pinpointed some noteworthy trends. Since May 2015, the BOC received 273 complaints from business regarding malpractice of local government authorities, which is 5% of total appeals. Complaints mainly related to the allocation of land plots, problems with setting rules and issuing permits, investment disputes. The refusal to follow a court decision and violation of the procurement procedure were also among common issues entrepreneurs faced in dealing with local authorities. In February 2017, the BOC issued a systemic report on local government authorities, in which it recommended to remove legal gaps, foster voluntary unification of territorial communities, improve land lease procedures and the quality of administrative services provision. Almost a half of systemic recommendations (41%) has already been implemented.
Government agencies fulfilled 90% of the BOC’s case-by-case recommendations. Although entrepreneurs complained much on the State Fiscal Service, the latter fulfilled 93% of 1776 individual guidelines issued. As for law enforcers, the State Security Service improved its performance by 2 p.p. since previous quarter up to 98%. The Prosecutor’s Office reached 78% implementation rate. 
The BOC prepared its 15th systemic report analysing key issues, faced by businesses when employing the mechanism of administrative (internal) appeal. Public authorities in Ukraine might exercise their powers in a rather questionable matter. That’s why the opportunity to enforce the mechanism of administrative (internal) appeal to challenge decisions, actions or inactions of public authorities in the pre-trial manner is vitally important for businesses. Accordingly, the Council developed a set of comprehensive recommendations to the Government.
To get the Ukrainian business acquainted with tools available to protect their lawful rights, the BOC launched a new awareness campaign called “ZmiNEW”. This project implies cooperation with media, business associations, business schools and universities, as well as government agencies, in order to create a platform for pursuing open, fair and responsible public services.
“We successfully move on with our core work of handling hundreds of complaints per quarter – resolving them without bureaucracy, identifying issues proactively, conducting investigations as warranted and publishing systemic reports affecting large numbers of entrepreneurs. We are committed to building on this work in the years ahead and facilitate changes in the way business is conducted in Ukraine”, says Algirdas Šemeta, Business Ombudsman. 
The Second Quarter 2019 Report is available here.