New state control (supervisory) measures
Law firm Pepeliaev Group advises that on 1 January 2017 important amendments and additions took effect that have been made to Federal Law No. 294-FZ ‘On the protection of the rights of legal entities and individual entrepreneurs when state control (supervision) and municipal control are exercised’*. Such amendments and additions establish fundamentally different approaches to the way state control (supervisory) measures are organised and conducted**.
The grounds for a sample purchase to be carried out may be:
A certificate of a sample purchase is drawn up which contains data on violations of mandatory requirements if such violations have been identified during the sample purchase.
Below, we highlight the most interesting new developments.
The scope of Federal Law No. 294-FZ and the concept of state control include control measures conducted without interaction with legal entities and individual entrepreneurs. From 1 January 2017, the provisions of Federal Law No. 294-FZ apply to these measures, in particular to:
- scheduled and unannounced examinations (inspections) of territories, water areas, vehicles;
- administrative inspections of the items of relationships relating to land;
- inspecting and measuring the parameters of natural environments when state ecological, social and hygienic monitoring is implemented;
- measuring the operating parameters of electric power, gas supply, water supply and water disposal networks and facilities, communication networks and means of communication, including the radiation parameters of radio electronic equipment and high-frequency devices for civil purposes;
- monitoring compliance with mandatory requirements when advertising materials are distributed;
- monitoring compliance with mandatory requirements when information is posted on the Internet and in the mass media;
- monitoring compliance with mandatory requirements by analysing information that a legal entity or an individual entrepreneur must provide about its activity or actions.
- The above list is open: other types and forms of control measures without interaction with legal entities and individual entrepreneurs may be established by federal laws.
- The grounds for such measures are assignments set by the head (the deputy head) of the relevant control (supervisory) body for carrying out the measures.
The implications of such measures:
- the violations (if identified) should be eliminated,
- a warning should be sent that violating mandatory requirements is prohibited (when information is received about the violations being prepared or about the signs of a violation of mandatory requirements),
- an unscheduled inspection may be appointed and held (if necessary).
A supervisory measure is introduced in the form of a sample purchase.
When a sample purchase is carried out, a state control (supervisory) body performs actions to create a situation in which a transaction is concluded for the purpose of checking whether a legal entity or an individual entrepreneur is complying with mandatory requirements when goods are sold, works are performed, or services are provided to theconsumers.
- an assignment from the head (the deputy head) of the relevant state control (supervisory) body depending on the specific risk category and on the specific hazard class (category) of the activity performed by the legal entity or by the individual entrepreneur and/or by the production facilities they use, if this is specified in the provisions on the relevant type of federal state control (supervision). The only approach used is a risk-oriented approach.
- the grounds are similar to those intended for an unscheduled inspection, in particular:
- the deadline has expired for performance of an instruction that has been issued;
- a licence has been requested if the inspection is to be carried out under the rules for granting a licence;
- an order of the Russian President or of the Russian Government, or a prosecutor’s claim;
- an official of the supervisory body providing a submission, stating reasons, following an analysis of: (i) the results of supervisory measures carried out without the interaction with the legal entity or with the individual entrepreneur; (ii) the results of the consideration and a preliminary check of the requests and applications received from individuals and legal entities, or (iii) information from state bodies, local bodies, or the mass media on certain facts relating to, for example: the threat of or actual harm being caused to the life and health of individuals; the threat of harm being caused to animals, plants, environment, etc.; information relating to the safety of the state, or to the threat of or actual natural or man-made disasters; or to infringements of consumer rights;
- grounds have been identified for an unscheduled check to be carried out which are provided for by the regulations on the relevant type of federal state control when the supervisory measures are carried out without interaction with legal entities and individual entrepreneurs as part of risk-oriented state supervision.
Preventive measures are introduced. Such measures are carried out to prevent violations of mandatory requirements, and to eliminate the reasons, factors and conditions that cause violations of mandatory requirements in accordance with programmes to prevent violations which are approved by control bodies. Such measures include, in particular:
- placing on official websites lists of regulations or ieparate parts of them with respect to each type of control (supervision) which contains mandatory requirements. Assessing compliance with such requirements is the subject matter of the control (supervision). The texts of the relevant regulations are also placed on official websites;
- informing legal entities and individual entrepreneurs about issues of compliance with mandatory requirements, including by means of developing and publishing instructions on how to comply with the mandatory requirements, holding seminars and conferences, performing explanatory work in the mass media and by other means, in particular when it concerns new developments in the legislation;
- summarising on a regular basis (at least once a year) the practice relating to the exercise of control according to areas of activity and placing relevant messages on official websites, including messages mentioning the most widespread instances of violations of mandatory requirements together with recommendations as to the measures which should be carried out to prevent such violations;
- issuing warnings that violations of mandatory requirements are prohibited.
Moreover:
- A list is supposed to be drafted of the types of state/municipal supervision and of the state/municipal supervisory bodies empowered to carry out such measures;
- In individual cases an obligation may be imposed on an official of a supervisory body to use check lists (lists of questions for inspections) to carry out a scheduled inspection;
- The risk-oriented approach is supplemented by risk indicators for an unscheduled inspection and/or for other supervisory measures.
What to think about, and what to note
So that the optimum results are achieved during the inspection, preventive measures should be taken:
- keeping under particular scrutiny information about the company’s activities that is to be delivered to the state supervisory bodies;
- developing and implementing internal policies which regulate step by step the activities of the company’s employees;
- exercising permanent internal control over and carrying out a regular internal audit of the company's activity;
- exercising care at the stage of pre-contract work and at the stage of mediation, as information from dissatisfied counterparties may serve as the grounds for an inspection to be conducted;
- holding training events (individual sessions, if the the risks are high) and instructing employees;
- monitoring information on and preparing for the supervisory measures.
Please be advised that reform in the area of control and supervision is topical for business and has recently been included in the list of the state’s top-priority projects. The reform will start in 2017 with the attribution of risk categories to all the items under control. The purpose of such work is to give up the practice of conducting comprehensive inspections in favour of preventing violations and reducing damage.
Mandatory requirements will be updated for five sectors - retail trade, catering, food production, operations with immovable property and passenger transport.
The concept of the future supervisory system is described in the information sheet concerning the ‘Reform of the supervisory activity’3 priority programme. By the time when the programme is completed, the ‘administrative burden’ on the business is expected to have been halved. However, the method to calculate this index will be formed only by the middle of 2017.
Help from your adviser
Pepeliaev Group’s experts provide legal assistance in preparing for any control measures, in supporting a company and its officials when such measures are carried out, and in the resolution of and possible challenges to the results of such measures.
* Here and below referred to as "Federal Law No. 294-FZ".
** The amendments and additions were made by Federal Law No. 277-FZ dated 3 July 2016.
** The amendments and additions were made by Federal Law No. 277-FZ dated 3 July 2016.