Companies under Scrutiny

Under a Magnifying Glass

Under a Magnifying Glass

The current Act on Freedom of Economic Activity envisages that the total duration of all inspections of a single company in a calendar year may not exceed 48 business days. However the law also provides for numerous exceptions which permit officials to paralyse business operations for much longer. As the Ministry of Economy itself admits, there have been cases of inspections lasting a few hundred days. Sometimes inspectors from different oversight bodies examine the same documents in company’s offices on various dates, which disturbs the regular course of business twice rather than only once. This explains why the ministry is planning to ameliorate the situation by modifying the regulations. Proposed amendments are currently subject to consultations and the new legislation could come into force in the first half 2015. The ministry wants to allow joint inspections to be conducted simultaneously by diverse bodies on the request of the company concerned. This is designed to streamline obligatory checks with overlapping scopes, like the examination of buildings before they are handed over for use. Experts believe that while the idea might be laudable, it will require almost surgical precision in the wording of the regulations. At present an inspection is preceded by a written notification which can be sent giving seven days’ notice. With more authorities scrutinising the company at once, that notice period should be extended. Some lawyers are doubtful, considering potential joint inspections as only apparently beneficial. In practice, if tax, sanitary and social insurance inspectors work in parallel, the process can in fact take longer as they examine the same documents from different angles. The disturbance to business might be compounded by the need to ensure communication not only between the inspectors and the inspected but also between the various examining institutions. This might cause tension between the officials. The ministry also wants to increase the possibilities for companies to file complaints about the duration and the onerousness of inspections, yet lawyers warn that although the intention is well-meaning this would be an empty regulation. A year or later down the line a court might decide that an inspector was indeed overzealous, but the company may have closed down by then. And even if it does still exist, obtaining any compensation is hardly possible.
Gazeta Prawna

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