Moratorium on minimum wages: will law enforcement officers visit businesses and how often?
28 July 2025 17:07
ANALYSIS
Business should work, and the state should not interfere. With these words, the new head of government, Yulia Svyrydenko, announced the introduction of a moratorium on inspections of businesses by regulatory authorities. Some people were quick to count this moratorium among the achievements of the new government. But not all of them. And there are reasons for this. Komersant found out how effective the new moratorium can be.
Restraint of the positive
Business representatives reacted positively to the announcement of the moratorium, but the experience of implementing previous similar decisions still made them add their own “buts” to such assessments.
Business Ombudsman Roman Vashchuk, for example, while stating that the introduction of a one-year moratorium on inspections could reduce administrative pressure on business, also shared the following warning.
“Our experience in the Business Ombudsman Council includes a certain caution about the possibility of using other instruments of pressure on business (as was the case, for example, with the SMKOR system, which was used for “mini-inspections”) to bypass the moratorium,”
– the Business Ombudsman emphasized.
The European Business Association pays special attention to inspections by law enforcement agencies and considers the moratorium on such inspections timely. Anna Derevyanko, Executive Director of the European Business Association, continues.
“Unreasonably opened criminal proceedings pose serious reputational risks, and closing proceedings can take years and require significant resources. Sometimes it can even paralyze companies’ operations. However, a strategic approach is needed to systematically change the situation with pressure from law enforcement. This means improving staff skills, improving logistics, but above all, changing the philosophy of law enforcement agencies themselves,”
– emphasizes Anna Derevyanko.
According to her, in general, companies do not mind a moratorium on inspections by regulatory authorities, because it is often law-abiding companies that come under their pressure.
“For example, white businesses currently challenge more than 80% of tax audit reports, and disputes over tax invoices are resolved in 95% of cases in favor of companies. In this context, reducing the number of unjustified claims against honest taxpayers could facilitate their activities. Instead, audits should focus on those who operate in the shadows. Businesses recognize that audits are a useful tool to combat illegal trade and tax evasion, especially in the area of trade in excisable goods,”
– notes Anna Derevyanko.
Trouble with experience
Ukrainian business can recall many public attempts by the Ukrainian authorities to ensure – as it was officially called – “observance by law enforcement agencies of the rights of participants in criminal proceedings” or, to put it more simply, to limit the arbitrariness of law enforcement. And these attempts cannot be considered successful. We can count as many as three draft laws on “Stop Show Masks” alone. There have been no fewer moratoriums on business inspections in recent years. I recall the relevant restrictions introduced in 2014, which continued for the next few years, as well as the moratorium introduced at the beginning of the full-scale invasion in March 2022 – it was decided to stop business inspections to ensure the stable operation of enterprises under martial law.
Vladyslav Miftakhutdinov , a lawyer and senior associate at VB Partners, recalls the experience of the previous “moratorium” of January 2024, which explicitly recommended limiting searches and other investigative actions against businesses for 3 months. However, according to the expert, that moratorium did not yield any positive results.
“If at some point the activity of the investigation really subsided, then later it surpassed all previous indicators. In particular, official statistics for 2024 confirm the record activity of the Bureau of Economic Security (BES) as a specialized investigative body in cases against business: in particular, 20% more proceedings on economic crimes were registered than in 2023. The number of initiated seizures of property in BES cases has increased significantly: in 2023, prosecutors were involved in 282 seizure cases, and in 2024 – in 494. In 2024, the BES received a record number of authorizations for covert investigative actions – 3777. This is more than 2 times more than in 2023 – there were 1798 permits then, and 26 times more than in 2022,”
– the expert notes.
In other words, the lawyer concludes, the moratorium did not work as planned: the pressure on business after a short pause only increased.
By the way, according to him, this year’s figures are also impressive, as the statistics for the first half of 2025 are almost identical to those for the first half of last year.
Limitations of the moratorium
Starting July 24, the tax and customs authorities will limit inspections for low-risk businesses. This news was shared with the public by Prime Minister Yulia Svyrydenko after the National Security and Defense Council approved a plan to implement the decision on a moratorium on unreasonable inspections and interference in business. She also reminded the public about the exception to the moratorium – high-risk industries, such as the circulation of excisable goods.
In fact, this restriction on inspections can be easily traced in both the presidential decree and the NSDC decision. To be precise, it is not a moratorium on business inspections, but a “moratorium on unreasonable inspections.” The text of the NSDC decision, in particular, refers to “the establishment of restrictions on inspections of business entities that have the status of authorized economic operators and business entities with a low degree of risk, except for those engaged in activities related to the circulation of excisable goods.”
Vladyslav Miftakhutdinov also draws attention to another fundamental detail.
“It has been reported that another “moratorium” on business inspections by regulatory authorities has been introduced in Ukraine. However, the relevant Presidential Decree does not contain any mention of a ban on investigative actions and inspections of business by law enforcement. In other words, there is no direct or indirect prohibition/recommendation to refrain from investigative actions, searches, arrests of business,”
– the lawyer states.
So what does the NSDC decision approved by the Presidential Decree provide for? In addition to the aforementioned restrictions on inspections of low-risk business entities and improvement of the methodology for applying a risk-based approach to determining the feasibility of inspections, the NSDC decision contains recommendations to the Prosecutor General’s Office and other law enforcement agencies to complete the audit of criminal proceedings against business entities within a month, as well as to strengthen control over the legality of procedural actions that may adversely affect business operations.
By the way, law enforcement has a lot to evaluate and review. The new Prosecutor General Ruslan Kravchenko has already had the opportunity to report. He said that the audit of criminal proceedings related to business is ongoing, and 7,000 of the 21,000 cases in this group have already been closed.
Legislative updates
While announcing the restrictions on business inspections, Prime Minister Yulia Sviridenko also announced that the government had submitted to the Verkhovna Rada bills on business protection and reform of regulatory authorities. One of the announced innovations is that only the Prosecutor General or heads of regional prosecutor’s offices will be able to approve new cases. According to the European Business Association, theoretically, the transfer of powers to open new proceedings against businesses exclusively to the Prosecutor General or regional prosecutors may reduce the number of such proceedings. At the same time, EBA Executive Director Anna Derevyanko draws attention to the urgency of making other decisions.
“It is now critical to ensure clear deadlines for pre-trial investigation and a clear procedure for closing criminal cases, as some proceedings can last for years,”
– emphasizes Anna Derevyanko.
In general, the NSDC’s decision on the moratorium on unjustified inspections recommends that the Verkhovna Rada of Ukraine speed up the consideration of seven draft laws of Ukraine. One of them is “On Amendments to the Criminal Procedure Code of Ukraine on Improving Guarantees of Protection of Business Entities in Criminal Proceedings” (Reg. No. 12439 of January 24, 2025). I would like to say that this is a kind of “Stop Show Masks – 4” draft law. Although a 5th attempt may not be necessary.
At least, according to lawyer Vladislav Miftakhutdinov, this draft law contains many safeguards aimed at combating investigative abuses and unjustified restrictions on business interests. By the way, one of the drafters of the bill was the VB Partners team.
“The early adoption of such a draft law will significantly reduce the level of pressure on business. In particular, the proposals of the Prosecutor General’s Office to such a draft law should be positively assessed, including the registration of proceedings against business only by the heads of prosecutor’s offices; the demand for things, documents or data from companies only with the consent of the prosecutor; and the control by prosecutors over the BES analytical products. All these changes, together with other provisions of the Draft Law No. 12439, can really lead to a reset of relations between business and law enforcement,”
– the lawyer states.
And as a conclusion. The expert reminds that any “moratorium” can be effective only under conditions of clear regulatory framework, i.e., appropriate amendments to the Criminal Procedure Code of Ukraine, proper control over compliance with such norms by the prosecutor’s office and heads of investigative bodies, as well as objective and proper judicial control over the observance of the rights and interests of the parties to the proceedings.
Sergiy Vasylevych
