ACT[1]

on freedom of economic activity

Chapter 5

Control of the entrepreneur*

This chapter of the ACT illustrates the rule of public administration authorities to control the

entrepreneur's economic activity. It will be controlled in line with the terms and conditions, else

cases or conditions not stated, provisions of specific act shall apply.

If the economic activity is claimed not conducted according to the provisions of act, and something

has been found like threat to life or health, risk of property or assets danger etc., a mayor or town

president shall immediately notify public administration. Then the action undertaken for the above

reasons by the public administration authorities shall be immediately informed to the

mayor/president of the town. In case of the mayor/president of the town is unable to notify the

public administration, he or she shall take an action towards this by stopping the economic activity

for not more than 3 days and this action shall be taken immediately.

Controls may be carried out by employees of control authorities. These employees have official ID

cards which authorise them to carry out the control of the entrepreneur's economic activity. By

planning a control it is necessary that an authorisation must be presented to entrepreneur. This

authorisation shall specify, e.g. the legal basis, the control authority, name surname and number of

official ID card of an employee of the control authority, name of the entrepreneur's company, the

starting date and expected completion date of the control, the signature position or function of a

person granting the authorisation and the instruction on the rights.

The entrepreneur has to be present during the controls are carrying out. However, he/she has the

possibility to appoint another person who is authorised to represent the entrepreneur during the

controls. Furthermore, there are some cases where the entrepreneur has not to be present, e.g.

otherwise provided for in ratified international agreements or a threat to human life and health

was found. Obligatory, entrepreneurs shall maintain and keep a control book, the control reports

and authorisations. These documents shall be kept at the entrepreneur's registered office and

made available to control authorities upon request. The control book contains entries made by

control authority. These entries include e.g. the identification of the control authority and control

authorisation, the starting date and the completion date of the control and follow up

recommendations.

Administration authority shall not control more than one entrepreneur’s economic activity. This

shall not apply if carrying out the control is necessary during the prosecution or investigation

proceedings against the entrepreneur, or if the control concerns the basis of the VAT return before

the return is made. If the entrepreneur’s economic activity has already been subject to the control

carried out by another authority, the control authority shall discontinue control and fix an

appropriate date with the entrepreneur when the control may be carried out. However, during a

calendar year controller authority shall not exceed specific amount of time (i.e. 4 weeks with

respect to the entrepreneur, 8 weeks with respect to other entrepreneur). Control authority must

not face any time restrictions if it is provided in international agreement, carrying out the control is

necessary during the prosecution or investigation proceedings against the entrepreneur, the

control is justified, as the threat to human life and health or considerable risk to the environment

has been identified, the control concerns the basis of the VAT return before the return is made. If

the duration of the control is to be extended, a written justification shall be required. The

justification should be submitted to the entrepreneur and recorded in the control book before the

control is resumed. If the control has revealed a gross breach of the law on the part of the

entrepreneur, another control may be carried out during the calendar year within the same

substantial scope, and its duration shall not be counted against the period of time specified above.

Some restrictions are not applying during control for such scopes: special tax supervision,

surveillance of the capital market and commodities market, banking supervision, insurance

supervision, pension supervision, and veterinary supervision.

[1] ACT of 2 July 2004 on freedom of economic activity.

* entrepreneur: a person who organizes and operates a business or businesses

How can entrepreneurs appeal decisions which were made against him?

When a decision made against the entrepreneur he or she can appeal the decision in the

administrative courts which they oversee the activities of the public authorities.