It is necessary to introduce a system of automated garnishment of debtor's bank account and at the same time ensure good social guarantees for him
May 27, 2020 | Judiciary, Justice, Property rights protection
The proposals of the Ministry of Justice on automated bank account garnishment do not provide for the protection of debtors’ social rights, unlike the draft law developed in the framework of EU Project Pravo-Justice.
"Ukraine has been trying to introduce European system of automated bank account garnishment for 4 years in a row. However, currently garnishment mainly takes place in paper form. Only two banks in the country support electronic document management”, said Viacheslav Panasiuk, national expert of EU Project Pravo-Justice. “And this is a big threat because a few seconds is enough for the debtor to transfer funds from one account to another. Existing loopholes in the legislation allow debtors to avoid enforcement of court decisions. That's why it is necessary to change legislation.”
The expert noted that in its draft law "On Amending Certain Legislative Acts of Ukraine Concerning the Enforcement of Judgments and Decisions of Other Bodies", the regulator provided for a rule on automated garnishment of debtor's funds. However, implementation of the Ministry's draft law in practice may lead to a distortion of Ukraine's social policy as it lacks social guarantees for debtors.
At the same time, the draft law developed on the platform of the EU Project "Pravo-Justice" in cooperation with major stakeholders including the Independent Association of Banks of Ukraine comprehensively addresses the issue of automated garnishment and writing off funds from the debtor's account(s).
"The goal is not only to quickly find the debtor's account and block funds on it, but also to foresee the social aspect – to enable the enforcement of a court decision on the debt collection and at the same time not to leave the debtor without means of subsistence. The draft law of EU Project Pravo-Justice introduces the institution of automated garnishment of funds, but it is closely related to such terms as "minimum wage", "minimum subsistence level", said Viacheslav Panasiuk.
In turn, Team Leader of EU Project Pravo-Justice Dovydas Vitkauskas expressed the opinion that it would be appropriate for Ukraine to consult European experience as to the introduction of a system of automatic search and write-off of debtor's funds. "We hope that together with the Ministry of Justice and the bank community we will be able to stave in this iceberg of regulation and bureaucratization – in the near future a system of automated search and writing off debtors' funds will be established in Ukraine", said Dovydas Vitkauskas. "Such a system will significantly increase decisions enforcement, in particular on small administrative fines. Now in Ukraine small proceedings are almost never enforced".