The Business Ombudsman Concerned about a Growing Number of Complaints on Non-Enforcement of Court Decisions

In October-December 2020, the institution reviewed 451 complaints on malpractice of state officials and completed investigation of 293 cases. Thus, the number of complaints increased by 9% compared to Q4 2019 and by 3% compared to Q3 2020. At the same time, 98% of complainants who responded to our feedback request were satisfied with cooperation with the BOC. In the reporting quarter, with the Business Ombudsman facilitation, entrepreneurs managed to save and refund UAH 267 mn. The total financial effect of the BOC’s activities for business since 2015 is UAH 18.8 bn.
Trends of entrepreneurs’ complaints in Q4 2020
Businesses complained the most about actions of tax authorities (64%), law enforcement bodies (12%), state regulators (7%), customs (4%) and local government authorities (3%). In general, these issues accounted for 90% of total appeals.
The breakdown of complaints by size of business was as follows: small and medium-sized businesses sent 76% of complaints, large businesses – 24%. By origin of capital: Ukrainian business – 89% of complaints, companies with foreign investments – 11%. Complaints were predominantly coming from Kyiv (37%), Kharkiv (10%), Dnipropetrovsk (8%), Zaporizhia (5%), and Odesa (5%) Oblasts. Representatives of retail trade (25%), agriculture (16%), manufacturing (10%), real estate and construction (8%) and private entrepreneurs (12%) were among the industries which complained the most.
“We are concerned about a growing number of complaints about non-enforcement of court decisions by state bodies. When in 2018 we received 108 complaints on this issue, in 2020 it was already 217. The problem is fundamental, because the system of justice will not work if court judgements are not enforced”, stressed the Business Ombudsman Marcin Święcicki.
New systemic issues and recommendations for their resolution
The BOC presented a new systemic study on the enforcement of court decisions that had already entered into force. During the entire period of its activities, the BOC received 623 complaints about non-enforcement of court decisions, and the problem is gaining momentum every year: in 2019-2020, the Council considered twice as many complaints as in 2015-2018. In 391 cases out of 496 completed investigations, the BOC managed to convince state authorities that the court decisions, which had already entered into force, were binding, which allowed entrepreneurs to recover and save UAH 2.4 bn. The BOC elaborated a number of recommendations on how to improve the execution of court decisions addressed to the Cabinet of Ministers, and particularly to the Ministry of Justice and the Ministry of Internal Affairs. The publication of the report is scheduled for February 2021.
The Q4 2020 report is available here.

  • Among the most common tax problems for businesses were tax invoice suspension (177 complaints) consisting of three types of issues: classical tax invoice suspension (100 complaints), inclusion of entrepreneurs in “risky” taxpayers’ lists (29 complaints) and non-enforcement of judgments on tax invoice registration (48 complaints);
  • After a significant drop in Q2 2020 and Q3 2020, along with introduction of the Moratorium on most tax inspections, the number of complaints on this subject went up again – upon expansion of  the list of permitted types of inspections with excisable goods;
  • Actions of law enforcement bodies (56) were one of the reasons for the increase in the number of business complaints in the reporting quarter. In particular, entrepreneurs complained more about procedural abuses of the National Police and the State Security Service of Ukraine. Bearing small absolute figures in mind, we must state that the number of business complaints against the SSS in Q4 2020 was the largest in the last ten quarters. Meanwhile, the number of complaints of entrepreneurs against actions of the Prosecutor’s Office went down;
  • Another source for the growth of business appeals were actions of state regulators – the number of complaints (31) went up by half compared to Q3 2020.

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