The Business Ombudsman’s Council: status, functions, tasks

The Business Ombudsman’s Council: status, functions, tasks

The Business Ombudsman’s Council: status, functions, tasks
The fight against corruption in Ukraine actually acquired the status of a national idea, they talk and write about it a lot, seek ways to overcome and strengthen the responsibility for corruption offenses. On the background of such an active struggle, many began to forget that today businesses are often confronted with problems that can not be attributed to direct corruption violations, but their solution requires a quick reaction and the need for intervention to be the so-called “mediator” that would be able to allocate for negotiation table of the parties to the conflict.

It would seem difficult today to find in Ukraine a business representative who would not have encountered situations where a government body that is required to provide a valid document without explaining the reasons is delaying with the decision to issue it, or, for example, when the results of the tax audit SFS will pay the taxpayer the amount to be paid on the basis of fraudulent tax information, or the inability to conduct a counterparty audit. A striking example in the practice of our association is the case when the SPS could not find and verify the State Enterprise Ukrspetsexport.
It is clear that in most cases such actions or inactivity of the subject of power are obviously illegal, but the defense of their rights in the court is always associated with additional financial costs: payment of court fees, legal aid services, expert examination, etc.

The situation is widespread when an enterprise receives a court decision to recover funds from the debtor, and the state executor does not execute it either because of unwillingness, whether ignorance, or simply loading. Complaints about actions or inactivity of the state executor “stretch the pleasure” to collect debts for years, and, in fact, do not bring a tangible result.

A separate stratum of conflicts and violations of business rights arises in relations with supervisory authorities. Suffice it to mention the same refusals to register tax invoices, or camera checks when trying to claim a refund for the amount of VAT.

As a rule, such business issues business to courts for review, since administrative appeals are extremely ineffective, since in most cases complaints against decisions of the controlling body are considered without a call by the applicants and in the end merely are sent reprints, which sometimes have nothing to do with the complaint itself indicate the quality of handling such complaints.

In order to resolve such conflict situations, in December 2014, a new Institute for the Protection of Business Rights was set up in Ukraine – the Business Ombudsman’s Council.

What is it and how this authority can help Ukrainian business will be further understood.

As indicated on the official website of the Council of the Business Ombudsman (https://boi.org.ua), the Business Ombudsman Council (hereinafter also referred to as the Council) represents and protects business interests in public authorities. The new institution is designed to ensure transparent business conduct in Ukraine. The Ombudsman’s Council is funded through the EBRD multi-donor account, launched in 2014 to create favorable business conditions for Ukrainian entrepreneurs whose donations are: UK, Denmark, Italy, Netherlands, Germany, Poland, USA, Finland, France, Switzerland, Sweden, Japan and the EU.

So, firstly, the Council defends the interests of business in public authorities, that is, in business and state relations.

Secondly, the Council is not financed by Ukraine, and hence is financially independent of the state.

Thirdly, the Council is called upon to ensure transparent conduct of business in Ukraine, and therefore the complainant must be prepared for an open dialogue and, to a certain extent, before public consideration of his issue.

Fourthly, the Council does not undertake all cases, after analyzing the complaint and the attached documents, a decision is made to begin the proceedings, and only after that the Council begins to dispatch the requests and actually protect the rights of the complainant.

However, it should be noted that in any case, even if the case is not disclosed, you will explain why there is no violation of rights or why the protection of such rights is not possible by the Council and advise on how to proceed.

One of the cases when the Council does not take action is a situation where decisions of the state body are appealed against in court.
The business ombudsman’s council is guided by the Constitution and laws of Ukraine, decrees of the President of Ukraine and resolutions of the Verkhovna Rada of Ukraine adopted in accordance with the Constitution and laws of Ukraine, acts of the Cabinet of Ministers of Ukraine, other legislative acts and the Memorandum of Understanding on support of the Ukrainian anti-corruption initiative of May 12, 2014.

The indicated allows the Council to effectively ensure that business problems have been heard by public authorities, since the main problem of business is that no one hears it.

So, one of our clients encountered discrepancies with the SFS authorities regarding the licensing of alcohol sales. By setting our goal to change something in the country, our client could not get a more or less clear answer from the licensing authority: Why a single-tax farmer can get a license to trade beer, but not cider and perry, although these beverages are more similar to manufacturing technology table wine, a license for selling which is not needed in principle. Nobody just wanted to hear him. It was decided to contact the Council of the Business Ombudsman with a request for assistance in communication. And now, after 4 months from the moment of appeal after the titanic work done by the Council of Business Ombudsmen, we have the first result – the Tax Code of Ukraine has been amended and now the company can sell not only beer but also cider and perry at the presence of a license for retail sale of alcohol.

In this case, the Council actually provided a constructive dialogue between business and government. By the way, the Council of the Business Ombudsman was the first body that drew attention to the problems of a different approach to the sale of one group of goods.

One of the key objectives of the Business Ombudsman’s Council is to ensure effective systemic communication of business with the authorities, state authorities and local self-government, as well as enterprises that are state-owned or subordinated to public authorities.

Therefore, one can confidently say that the business has a new and effective way of resolving conflict situations with the authorities, which should be used.

It should also be noted that in the reports and reports on the results of the investigation, the Council of the Business Ombudsman does not disclose the applicant’s data. Your name and email are required so that the Business Ombudsman Council can contact you regarding your complaint. The council does not consider anonymous complaints. All information about the complaint is strictly confidential.

And, by the way, the services of the Council of Business Ombudsmen are free.
Summing up, I would like to say that business should use additional tools for dealing with problematic issues with public authorities, one of which is the Council of the Business Ombudsman. This is not a panacea for all problems, but a way to quickly and cost-effectively solve the violation of business law by public authorities.

In addition, publicity is precisely what is lacking in business and government relations, and the Business Obmoudsman Board brings out your problem issue at a public plane, which at least guarantees you an objective consideration and consideration of your arguments, which greatly facilitates communication with state authorities.

P.S. In the interests of its clients, Femida Legal Association has repeatedly requested assistance from the Business Ombudsman’s Council. After the intervention of the Ombudsman’s Council, all the “conflicts” were positive in favor of our clients.


Alexander Gaidak
lawyer, senior partner
Femida Legal Association

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