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“The team was recently visible advising on a number of pharmaceutical cases. Sources agree that the team is “moving in the right direction” and are particularly impressed by its work in the pharmaceutical sector”.

 

A New Broom

28.01.2015

Oleksandr Dementiev, lawyer at Ilyashev & Partners Source: The Ekonomichna Pravda

Change of government in Ukraine is generally followed by liquidation of advisory bodies established by predecessors.

Laws become invalid, the Constitution is amended, government portfolios are redistributed, and government agencies are reorganized.

The procedure for formation, reorganization or liquidation of ministries and other executive agencies is envisaged by the Law “On Central Executive Authorities”.

It enshrines that the government authority which assumes powers and functions of the ministry, other central executive authority in liquidation is determined by an act on liquidation of the Cabinet of Ministers.

Further, the law specifies that the procedure for establishment, reorganization or liquidation of ministries and other central executive authorities is determined by the Cabinet of Ministers.

Pursuant to the last regulation, on October 20, 2011, the Cabinet of Minister adopted the resolution No. 1074, which approved the procedure for establishment, reorganization or liquidation of ministries and other central executive authorities.

Until now the procedure for liquidation of ministries and other central executive authorities was regulated by the resolution of the Cabinet of Ministers of 1996.

However, considering the significant changes in the legislative field since then the said resolution did not answer the key questions during establishment or liquidation of executive authorities, in particular, the issues on delegation of functions and powers to the newly established bodies.

Thus, the said procedure resolved most challenging issues arising during liquidation and reorganization of public agencies and delegation of state powers.

In particular, it was determined that the proposal for establishment, reorganization or liquidation of the executive authority is made  to the Prime Minister by a Cabinet member considering the need to ensure exercise of executive powers and avoid duplication of powers.

The appropriate proposals in case of formation of a body must contain inter alia substantiation for the main tasks and functions of the body. In case of reorganization – substantiation of impossibility or inexpediency to perform the relevant tasks and functions of such body.

In case of liquidation of a body – substantiation of expediency of the state’s refusal to perform tasks and functions of such body or delegate them to other bodies.

It envisaged separately that rights and obligations of bodies in case of merger are transferred to the body formed as a result of such merger. If bodies are joined to other body – to the body to which one or more bodies are joined.

In case of division – to bodies established as a result of division. In case of transformation – to the created body. In case of liquidation of the body and delegation of its functions to others – to the bodies defined by the relevant act of the Cabinet of Ministers.

Further, the procedure sets forth that the body established as a result of reorganization shall exercise powers and perform functions since the effective date of the act of the Cabinet of Ministers regarding the possibility to exercise powers and perform functions of the body that ceases to operate.

Thereto, the body in respect of which the act on its termination became effective, continues to exercise the powers and perform the functions in the field specified by the Cabinet of Ministers until the act regarding the possibility to exercise powers and perform functions by the created body becomes effective.

The troubled 2014 has not become an exception regarding reorganization of government agencies. It is worth mentioning inter alia the recently adopted by the Cabinet of Ministers resolution No. 442 “On Optimization of Central Executive Authorities”.

The resolution liquidated the State Service for Personal Data Protection, the State Service for Combating HIV/AIDS and Other Socially Dangerous Diseases, the State Agency for Tourism and Resorts, the State Assay Service, and the State Inspection for Price Control.

The State Agency for Investment and National Projects, the State Agricultural Inspectorate, and the State Environmental Investment Agency were also liquidated.

Instead, the State Service for Food Safety and Consumer Protection, the State Service of Geodesy, Cartography and Cadastre, the State Service for Transportation Safety, the State Service for Medical Products and Drug Control, the State Service for Labour, the State Inspectorate for Energy Supervision were created as a result of reorganization by merger.

The State Agency for Restoration of Donbass was created separately.

A necessary condition for reorganization and liquidation of the old state institutions, which is connected with the introduction of new state institutions, is approval by the relevant regulation of delegation of functions on exercising specific state powers – the so-called legal succession.

In such circumstances, there are cases when the question of exercising powers remains unregulated, which causes filing administrative claims by the citizens. The European Court of Human Rights paid back in its own coin by giving its universal and precedent comments on the matter.

Thus, according to Article 35 of the European Convention on Human Rights, after all domestic remedies have been exhausted, and within a period of six months from the date on which the final decision was taken, citizens have the right to appeal to the European Court of Human Rights

Further, in accordance with the provisions of the Constitution, Article 9, and the Law of Ukraine “On the Implementation of Judgments and Application of Case Law of the European Court of Human Rights”, Article 17, the Convention and case law of the European Court are the sources of law in Ukraine.

Thus, according to the Law “On International Treaties”, provisions of the international treaty shall have priority over legislative acts of Ukraine.

Pursuant to the provisions of the Convention and case law of the European Court, lawsuits, appeals and cassation appeals, as well as direct filing of claim to the European Court can be justified if all domestic authorities have been “passed”.

In any case, in particular situations, the following practices of the ECtHR shall be borne in mind and applied compulsorily when applying for protection to the administrative courts or the European Court. Firstly, violation of the principle of legal certainty shall be taken as a basis.

Thus, the European Court in “Koretskyy and others v. Ukraine”, “Maestri v. Italy”, “Kazakov v. Russia” noted that the law should be accessible to the persons concerned and formulated with sufficient precision to enable them – if need be, with appropriate advice – to foresee, to a degree that is reasonable in the circumstances, the consequences which a given action may entail.

The ECtHR held that the concept of foreseeability applies not only to the behavior, the effects of which should be to some extent predictable by a person, but to formalities, conditions, restrictions and opportunities to apply sanctions.

In case of “Kruslin v. France” of April 24, 1990 the European Court noted that the law must indicate the scope of any such discretion conferred on the competent authorities and the manner of its exercise with sufficient clarity to give the individual adequate protection against arbitrary interference.

Further, the ECtHR in its judgment in the case of “Koretskyy and others v. Ukraine” determined that the expression “prescribed by law” does not only require that the impugned measure should have some basis in domestic law, but also refers to the quality of the law in question.

In view of the said practice, the situation when certain powers of a public authority as a result of its reorganization remained unsettled, is contrary to the rule of law principle in the understanding of the European Court.

However, there are more specific findings of the ECtHR on the subject matter. Thus, the case of “Nikitin v. Russia” of July 15, 2010 concerned a lengthy non-execution of judgment.

Domestic authorities relied on the fact that the public authority was liquidated without legal succession, which served as a ground for closing the proceedings regarding this body.

Thus, the management of the State Fire Service, which Nikitin sued, was liquidated, as a result of which the enforcement proceedings were discontinued. Thereto, the Russian Court refused to recognize the Russian Emergencies Ministry as a legal successor of the defendant.

The European Court held that liquidation of a public authority without creation of its legal successor does not dispense the state from the need to execute the judgment against the liquidated body.

The European Court emphasized that “other conclusion would allow the state to use this way to avoid paying debts of its bodies, especially taking into account that changing needs often compel the government to change the structure of its internal bodies, including by creation of new bodies and liquidation of old ones”.

The European Court drew similar conclusions in “Kuksa v. Russia” and “Chuykina v. Ukraine”.

 
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