Why is it so important to apply in advance for legal assistance during the license inspection?

Since the moratorium on business inspections was lifted, a large number of companies has been included to the inspection list or is already in the process of being inspected.

We all understand that failure to comply with the requirements for conducting various types of business activities, if discovered during the inspection, might mean losing the license.

But a timely competent preparation of documents and ensuring their compliance with the legislation can provide additional assurance that your license and business won’t be affected. This article will reveal our practical experience dealing with such cases.

The following cases from our experience will clearly demonstrate the need to timely apply for legal support and assistance in case of inspection and provide you with possible solutions at various stages.

Addressing our company for legal support after the revocation of license and filing a complaint to the Expert and Appeal Council for Licensing

Case: In April 2019, our company was contacted by a Client who had its Drug Licence revoked. As it turned out, the Client was assigned a scheduled inspection, during which the regulatory authority recorded a number of violations, drafted a relevant statement and notified the Client about the need to bring everything in compliance with the requirements within 30 days. After the reinspection, the regulatory authority initiated the license revocation.

The Client tried first to independently solve his problems, and applied to our firm with a request to represent his interests only a week before the meeting of the Expert and Appeal Council for Licensing. Heretofore, the Client had personally drafted and filed an appeal. 

Chances of success: very low.

Our actions: We realized that the chance of losing the case was really high, but we also knew that it was the Client’s last chance for a successful outcome. Therefore, we decided to represent him, but also warned that there was a high risk of failure.

Due to the fact that the Client had personally prepared the appeal without any qualified assistance, he couldn’t properly define and legally defend his position. Accordingly, even reasonable arguments presented by our lawyers during the meeting could not influence the decision to revoke the license.

Outcome: revocation of license.

Related article: Appealed a decision of the Expert and Appeal Council for Licensing. 

Addressing our company for legal support immediately after receiving the decision on the license to be revoked

Case: We were contacted by a Client who received a decision about his license for construction work revocation. When the Client realized all the risks, he decided to file a complaint to the court and addressed our lawyers to represent his interests.

We explained the Client that in this case it was necessary to file an appeal to the Expert and Appeal Council for Licensing and started working on the case.

Chances of success: low, yet there were some.

Our actions: We assessed the overall situation and checked the inspection procedure. As a result, we found out that the Client hadn’t received the inspection certificate of the State Architectural and Construction Inspectorate of Ukraine, although both the registered office and the place of business were indicated properly. The licensing authority decided on subjective grounds that the Client ignored the inspection as he didn’t come on the specified dates.

We filed a complaint that reasonable proved that the Client was not properly notified about the inspection. Moreover, none of the representatives of the inspection authority came to the enterprise. Therefore, the decision to revoke the license was arbitrary and contrary to law.

Outcome: the decision on the license revocation was cancelled.

Our services: Appeal against decision to revoke license

Addressing our company for legal support during the inspection

Case: Our company was contacted by our regular Client during the inspection of his private security company. In the past, we assisted the Client in obtaining a license for his private security company. At that time, the Client didn’t have an appropriate person to be appointed as a Security Activities Management Expert. However, an applicant is obliged to provide information on such a specialist to get a license. Therefore, we found an appropriate specialist and obtained a license for our Client on a turnkey basis.

At the time of the inspection, the Security Activities Management Expert was already another person, due to this the inspectors stressed the inconsistency of the staff data in the information provided to obtain a license. Remembering our guarantees and obligations to assist in such a situation, the Client immediately contacted us.

Chances of success: high

Our actions: Our lawyer was personally present during the license inspection that significantly reduced the moral pressure on the Client. Also, the lawyer’s presence allowed us to respond to all the questions of the state authority representatives in a competent manner, as well as to provide them with indispensable evidence of the licensee compliance with the License Terms and Conditions. For example, it was noticed that the inspection authority may require only the original documents submitted during the license obtainment to verify their compliance with the law.

As for the question of whether the specialist indicated in the documents for obtaining a license shall work for the firm until it is closed, the answer is clear - no. Such person works under an the employment agreement, enters upon its duties from the beginning of providing security services to the first objects and is entitled to terminate the employment agreement at any time.

Outcome: the inspection was successfully passed.

Service: License inspection in Ukraine: Legal support of successful completion.

Addressing our company before the inspection

Case: A Client from the city of Sumy found out that his company was entered  on the queue for inspection of the drugstore license and applied for legal support and assistance in preparing for inspection. 

Chances of success: excellent

Our actions: Having sufficient time to get prepared for inspection, our lawyers visited the Client’s drugstore to personally check everything before the inspection and to bring all documents and other conditions into compliance with the License Terms.

We have checked the following compulsory conditions:

• access and facilities for people with disabilities to the drugstore;
• consistency of  a pharmacist’s documents;
• proper design of the drugstore display window - medicinal drugs shall be separated from non-medicinal drugs;
• expired medicines on pharmacy shelves.

Related article: New requirements for a drugstore personel for obtaining the license.

During our personal inspection, we found a number of expired drugs and informed the Client about this. He answered that that situation was a result of a heavy workload on employees. Our lawyer explained that it wasn’t a reason to be considered by the regulatory authority and would lead to the revocation of the license. Fortunately, the Client had sufficient time to get properly prepared for the inspection.

By the way, many people inquire about whether it is possible to postpone the license inspection? 

Answer: no, the license inspection can’t be postponed. 

Outcome: The Client was well prepared for the inspection and successfully passed it.

Addressing our company before being entered on the queue for the inspection.

Case: Our company was contacted by the Client, who we assisted in obtaining the Gas and Electricity Supply License. The Client was aware of the current situation and realized that the license inspection can be scheduled for next year. Therefore, he decided to get prepared for it well in advance.

Chances of success: 100%

Our actions: Having all the company’s documents, we managed to properly prepare the Сlient for the upcoming inspection. Our lawyer directed the Client’s attention to the following compulsory requirements to be met in order to retain the license:

• the company’s office shall be located at the address specified in the license documents;
• the company’s call centre shall also be located at the address specified in the licence documents;
• the company’s website shall contain all the necessary information as required by the License Terms;
• all financial statements shall be duly submitted.

As an additional option, we suggested the Client to establish a licensed “backup’ company. 

Outcome: The Client was well prepared for the license inspection.

Related article: Rights and obligations of a private security company during the inspection: what’s worth paying attention to?

Conclusion

It should be borne in mind that revocation of a licence has negative implications: 

• loss of time and money; 
• a company won’t be able to get a license for the same type of business activities for a year.

Thus, when it comes to the license inspection, as with precursory symptoms, the sooner you get qualified help, the more likely you are to benefit from the situation.