Ukraine is preparing for a major reform of its state oversight system. Draft Law No. 14030 “On the Fundamental Principles of State Supervision (Control)” aims to shift the approach from a punitive and repressive model to a preventive and risk-oriented one. Its adoption is expected to create the foundation for a modern, transparent, and partnership-based interaction between the state and businesses.
The key innovation is the introduction of auditing into business activities as a self-monitoring tool that helps prevent violations before scheduled inspections take place. Specifically:
- The audit may be initiated by the enterprise itself, a government authority, or an independent organization authorized in the relevant field.
- Its purpose is to identify, prevent, and eliminate violations without imposing fines or other sanctions.
- This approach enables businesses to correct deficiencies independently, preserve their reputation, and avoid financial risks.
Establishment of the institution of Public Councils on State Supervision issues. These councils will participate in reviewing complaints from entrepreneurs regarding the actions or inaction of public officials. A unified procedure for appealing decisions of supervisory authorities is being introduced, and judicial protection of business entities’ rights is being strengthened.
Educational function of the state: supervisory authorities will be required to conduct training activities for businesses, explaining the principles of risk management and the causes of risks. This will contribute to fostering a culture of legal compliance and increasing the level of legal awareness among entrepreneurs.
The implementation of the Law will not require additional expenditures from the state budget. Audits of newly established enterprises are planned to be carried out free of charge and on a one-time basis upon their request, and subsequently on a contractual basis. The reform’s implementation is scheduled to begin in 2026 across more than 43 areas of state supervision.
It is expected that the introduction of the “audit instead of fines” approach will help reduce administrative pressure, promote the development of small and medium-sized businesses, attract investment, and ensure a balance between the interests of the state, business, and citizens.
This draft law represents a step toward building a partnership-based relationship between the authorities and entrepreneurs, where the main instrument becomes not punishment, but prevention, transparency, and mutual responsibility.
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