Only 2.7% of debt returned to rightful owners in Ukraine
In 2019, total debt of UAH 796.8 billion was subject to enforcement. Of this amount, only about 2.7% was collected in favor of the plaintiffs. The situation needs immediate legislative changes.
This is stated in “5 Steps to Effective Enforcement. Conceptual framework for the new Law on Enforcement Proceedings" – document adopted by the Association of Private Enforcement Officers of Ukraine (APEO) at the Interregional Online Conference of Private Enforcement Officers held on March 19, 2020.
In 2016, enforcement proceedings reform was launched. It partially delegated enforcement functions to private enforcement officers. The reform has shown its effectiveness but it is necessary to continue it.
“On average, a private enforcement officer collects debts 5.3 times more than a state enforcement officer, and based on the indicator of difference in the selling of the collected property is even higher. At the same time, outdated regulatory framework, over-regulation and interference of officials hinder further development in this area”, said Chairman of APEO Serhii Nikolaiev.
The APEO notes that legislative changes currently being drafted in the Ministry of Justice will reduce the enforcement reform to zero.
Private enforcement officers emphasize that since March last year, legislative changes aimed at consolidating reform have been intensively discussed with experts, academia, stakeholders, international donors on the platform of EU Project Pravo-Justice.
In particular, the professional community supports these strategic areas:
• create incentives so that enforcing judgments is beneficial and non-enforcement is severely punished;
• Develop effective enforcement tools, in particular – to simplify the procedures for automatic seizure of debtor's bank accounts;
• create the conditions for engaging the most qualified and competent specialists in the profession;
• strengthen professional self-government;
• simplify state regulation of the profession.
The Association of Private Enforcement Officers of Ukraine adopted a resolution calling on the Minister of Justice and the new Prime Minister to prevent curtailing of enforcement proceedings reform and to start working on new legislation in the field of enforcement proceedings in an open and transparent manner. Private Enforcement Officers invite the Ministry of Justice to start a dialogue to discuss the conceptual framework for new legislation Outlined in document called "5 Steps to Effective Enforcement”.
“Non-enforcement of judgments is the most common complaint against Ukraine before the European Court of Human Rights (ECtHR). According to the World Bank and other informed observers, billions of euros remain "suspended" in big civil cases”, emphasized Dovydas Vitkauskas, Team Leader of European Union Project Pravo-Justice.
Reference
“5 Steps to Effective Enforcement. The conceptual framework of the draft law on enforcement proceedings” is available at the link http://enforcement.pravojustice.eu/
Discussion of the new legislation has been ongoing since March 2019 on the platform of the European Union Project Pravo-Justice. In total, more than 20 discussions have been held with representatives of the Association of Private Enforcement Officers of Ukraine, the Ministry of Justice, the United States Agency for International Development (USAID) New Justice Program, the Organization for Security and Cooperation in Europe, the International Development Law Organization, the American Chamber of Commerce, Business Ombudsman Council, Independent Association of the Banks of Ukraine, Ukrainian Bar Association, academia.
In February - March 2020, "Conceptual framework” was discussed by Regional Councils of the Association of Private Enforcement Officers of Ukraine.
The reform in the field of enforcement proceedings started in June 2016 when the Verkhovna Rada passed the Laws on Enforcement Proceedings and On Bodies and Persons Enforcing the Judgments and Decisions of Other Bodies.
Within the framework of the reform, an independent organization of professional self-government of private performers - the Association of Private Enforcement Officers of Ukraine was established.
Pravo-Justice project has been functioning in Ukraine since 2018. The project is funded by the European Union and supports reforms in justice sector.
Contact phone: +38-050-987-06-21
Е-mail: sekretariat.apvu@gmail.com