Changes in the field of business inspections: an overview of the new regulations

Let us note right away that this article will focus on changes in laws governing most business inspections, except for certain areas covered by special laws, especially tax, customs, and foreign exchange controls.

In this context, the the new Law of Ukraine No. 4840-IX “On the Basic Principles of State Supervision (Control)” (the “New Law”) introduces significant changes to inspection procedures, focusing on digitalization, a risk-based approach, and revised interactions between regulatory authorities and businesses. Below, we outline the key innovations and their implications for businesses.

Entry into Force of the New Law and Its Scope of Application

On April 24, 2026, the New Law entered into force, replacing Law of Ukraine No. 877-V “On the Basic Principles of State Supervision (Control) in the Sphere of Economic Activity” (the “Current Law”).

Although the New Law is in force, most of its provisions will not apply until martial law in Ukraine ends or is repealed. Until then, inspections remain governed by the Current Law.

Consequently, only certain provisions of the New Law are currently in effect, namely:

• inspections initiated before martial law that were not completed are considered void;
• the Cabinet of Ministers of Ukraine may temporarily restrict inspections and set procedures for state supervision during martial law and for six months after it ends (these restrictions do not apply to national security or Ukraine’s international obligations).

Like the Current Law, the New Law serves as the framework of legislation for state supervision and applies to most control measures involving business entities. 

At the same time, as previously noted, its scope does not cover inspections governed by special legislation, including tax and customs inspections, foreign exchange supervision, compliance with budgetary legislation, state market supervision and control of non-food products, and inspections of compliance with economic competition laws.

Key Changes in the New Law

Expansion of the Functionality of the Electronic State Control System

The Current Law establishes an electronic state control system (the “System”), but it currently functions only as a one-way platform for publishing inspection plans and results, without enabling interaction between authorities and entities.

The New Law significantly expands the System’s functionality:

• it enables integration with other government information resources, creating an interconnected digital ecosystem instead of an isolated registry;
• it introduces a business entity’s personal electronic account as the official channel for interacting with state supervisory authorities.

By providing contact information in this portal, you consent to receiving official correspondence electronically. Inspection reports and administrative decisions sent through the portal or by email are considered properly delivered, even if you have not reviewed them.

Ignoring notifications or not checking the electronic portal no longer impacts legal consequences or procedural deadlines. The digital format remains optional, and paper-based document flow is still available.

1. Changes to the Frequency of Scheduled Inspections

The New Law revises the frequency of scheduled inspections based on risk level. High-risk entities will now be inspected up to once a year, instead of once every two years. Inspection intervals for medium- and low-risk entities remain unchanged at once every three and five years, respectively.

2. Inspection Duration Based on Risk Level

The New Law introduces a risk-based approach to inspection durations. Previously, most scheduled inspections lasted up to 10 business days, regardless of risk level. Now, inspections may last up to 10 business days for high-risk entities, 7 for medium-risk, and 5 for low-risk entities.

A similar approach applies to unscheduled inspections. Instead of a general 10-day deadline, timeframes now vary: up to 10 business days for high risk, up to 5 days for medium risk, and up to 2 days for low risk. This change aims to reduce the administrative burden on low-risk businesses and prevent unjustified inspection delays.

In addition, the New Law requires the manager, sole proprietor, or authorised representative to arrive at the inspection site within four hours of the controlling authority’s arrival.

3. Unscheduled Inspections: Clarification of the Grounds and Scope of Inspection

The New Law retains the existing grounds for unscheduled inspections and introduces clearer procedural safeguards for businesses. The inspection scope is now limited to the specific issues that prompted the inspection, which must be detailed in advance in the inspection order.

In addition, if an unscheduled inspection is initiated due to complaints from citizens or government agencies, the supervisory authority must provide the business with documentation confirming approval from the authorised body. Without this document, the business may deny officials access to the inspection.

4. Mandatory Recording of the Progress of Inspections

A key change is that recording inspections with audio, photos, and video is now mandatory. Previously optional for the regulatory authority, recording is now required for all scheduled and unscheduled inspections from the moment inspectors arrive at the facility.

This change affects the evidentiary basis for challenging inspection results. Without proper documentation, there may be a material procedural violation, and the inspection report will not serve as unconditional confirmation of violations. As a result, regulatory conclusions must be supported by technical documentation, which enhances procedural safeguards for businesses.

5. Changes in the Field of Auditing

Previously, state supervision lacked a separate mechanism for evaluating business operations without imposing sanctions. Supervision focused mainly on identifying and responding to violations.

The New Law introduces performance audits, which may be initiated by either businesses or the government and result in a report without penalties or financial sanctions. This shifts supervision from a punitive approach to a preventive and evaluative one.

Incentives now encourage voluntary audits. A positive audit result increases the interval between scheduled inspections, reducing government intervention in the entity’s operations.

The New Law also includes a social component by offering free audits to newly established or affected entities. This measure supports business recovery and adaptation during times of crisis.

6. Optimization of Document Submission

The New Law establishes the right of a business entity not to resubmit documents that have already been submitted to the regulatory authority, are in its possession, or are available through government information systems.

7. Rating System and the Market Effect of Transparency

The New Law introduces a comprehensive rating system for business entities, using risk-based criteria to summarize the potential risk level of each entity’s activities.

The rating is updated annually and calculated using indicators for each business unit. The overall risk level is set by the highest individual value, preventing the averaging of risk and the concealment of problematic sites within larger organizations.

Open access to the rating through the System’s online portal provides a market-based tool for influence. Counterparties can assess compliance levels before forming partnerships, creating reputational pressure that supports government regulation.

Conclusions

Overall, the New Law introduces several positive changes for businesses regarding state supervision. It expands opportunities to prevent unwarranted inspections, reduces their frequency, and strengthens procedural safeguards and the protection of business rights during inspections.

However, the main challenge will be the practical implementation of these changes and ensuring consistent law enforcement once most provisions of the New Law take effect.