Some aspects of the state system of compulsory execution of decisions in a competitive environment with private performers

Andriy Pyatnitsky,

Deputy Chief of the Main Territorial Department of Justice on the Issues of the State Bailiff Service - Head of the Office of the State Bailiffs Service of the Main Territorial Department of Justice in Dnipropetrovsk Oblast.

The reform of the enforcement of decisions that took place in Ukraine last year in connection with the adoption of the Law of Ukraine "On the bodies and persons executing compulsory execution of court decisions and decisions of other bodies", which introduced a mixed system of enforcement and introduced into the institution of private performers, caused an urgent need for reforming both the state system of forced execution and the basic principles and process of enforcement proceedings.

At the time of the adoption of the new Law of Ukraine "On Enforcement Proceedings" No. 1404-VIII from 02.06.2017, to the previous edition of the similar law No. 606-XIV of April 21, 1999, various amendments and additions were introduced to the previous law, the main purpose of which was to strengthen the debtor's responsibility and nullifying the possibilities of subjective influence of the state executor on the processes of execution in terms of providing possible advantages to the parties to the enforcement proceedings, delaying the execution times, etc.

At present, in my opinion, a person professionally engaged in the organization of the process of enforcement of decisions for almost 15 years, the problems that exist in the procedure of enforcement proceedings can be divided into three main areas:

First, it is the presence of legislative factors that at the regulatory level make it impossible to fulfill certain categories of decisions and reduce the effectiveness of enforcement in general. In particular, the following regulatory acts set a moratorium on foreclosure of property of a certain category of debtors:

- Land Code of Ukraine of 25.10.2001 № 2768-III, which establishes a moratorium on the sale of agricultural land;

- Law of Ukraine "On the Moratorium on the Collection of Property of Citizens of Ukraine Provided as Securing the Credits in a Foreign Currency" of 03.06.2014 No. 1304-VII;

- Law of Ukraine "On measures aimed at ensuring the sustainable functioning of enterprises of the fuel and energy complex" of 23.06.2005 № 2711-IV;

- Law of Ukraine "On measures aimed at settlement of arrears of heat supply and heat-generating organizations and enterprises of centralized water supply and drainage for consumed energy resources", dated November 3, 2016, No. 1730-VIII;

-  Law of Ukraine "On the peculiarities of the formation of a public joint-stock company of railway transport of general use", dated February 23, 2012 No. 4442-VI;

 - Law of Ukraine "On the introduction of a moratorium on the forced realization of property" of 29.11.2001 No. 2864-III,

- Law of Ukraine "On the Management of State Property Objects" No. 215-V of 21.09.2006, and others like that.

Secondly, it is a problem of prompt obtaining of actual information on debtors, their property status and sources of income through direct access of the executor to the relevant registers containing information, including those of the registrar, in order to encumber the detected property or property rights in order to provide real execution of a decision and prevention of the possibility of alienation of such property by the debtor.

Thus, in spite of the declared requirements of Part 5, Article 18 of the Law of Ukraine "On Enforcement Proceedings" concerning the direct access of the executor to information about debtors, their property, incomes and funds, including confidential, which is contained in public bases and registers, including electronic, the state executor has direct access only to the information contained in the State Register of Real Rights to Real Estate, and has the ability to send and receive in electronic form information from the organs of the DFS of Ukraine and the PFCs regarding the availability of accounts and receipts from the debtor (salaries, pensions, etc.). At the same time, it is extremely difficult to obtain information on:

  • real property, the ownership of which was registered before 2003, as the relevant information is not included in the State Register of real rights to real estate, takes place only on paper, and for obtaining it, the state executor is forced to request a written request to the Office;
  • vehicles, because there is no direct access to the state executive, and district service centers provide access to the register, through the key of the state executor, only in their centers. In addition, in the Unified State Register of the Ministry of Internal Affairs for registered vehicles and their owners, information is provided only for cars registered since 2012;
  • sea and river vessels, since information concerning such vessels is contained in the State Ship Register of Ukraine and the Ship Book of Ukraine, which are kept in paper form, therefore, for obtaining the relevant information, the state executor must submit written requests to the authorities registering the sea and river vessels of Ukraine;
  • the identification number of the debtor, since the state executor is not able to use the automated system of executive proceedings to send inquiries to the DFS of Ukraine for obtaining the relevant information;
  • agricultural machinery, since the current automated system of executive proceedings does not allow the mutual exchange of information with the State Consumer Service, which is the holder of the relevant register.

In addition, in order to promptly find out the information about the debtor and his property status of the debtor, I consider it necessary to extend the practice of providing direct access, first of all, to those registers held by the Ministry of Justice of Ukraine, in particular the Register of Power of Attorney for the determination of mediators data on the debtor's property.

In addition, it is necessary to work out the possibility of direct imposition of an arrest and declaration by the executor of the vehicle of the debtor in the Unified State Register of the Ministry of Internal Affairs of Ukraine, to develop common procedures for the exchange of information with authorities, institutions and organizations possessing data on the property of debtors on paper. A separate prerequisite for an executor is to provide such an opportunity to receive the specified data with the help of AISP, as it is contained in the content of the above-mentioned Law of Ukraine "On Enforcement Proceedings".

In the presence of the possibility of the executor simultaneously with the opening of enforcement proceedings to obtain all the information about the debtor and his property status, the only issue will be the observance of the deadlines set by the law for the adoption of decisions and the enforcement of actions, taking into account the particular features of a specific decision that is enforced.

These issues, along with others, were the subject of discussion of the interregional forum of the bodies of the state executive service, which was held for the first time in Ukraine in Dnipropetrovsk region in August this year.

During the forum, which was held in order to implement the function of forming the state policy in the sphere of enforcement of decisions, the concepts of development of the state executive service in the conditions of a competitive environment with private performers were discussed.

Of course, in our society for a long time the idea was formed that the state will always lose the private sector in the concepts of development, due to the lack of sufficient effective mechanisms for stimulating employees and legally established restrictions on the functioning of individual units.

However, in my opinion, this view is fair only in relation to the sphere of production and business, since the progressive development of any industry really requires significant financial and human investment. Activity in the area of enforcement of decisions is sufficiently regulated at the legislative level. The state and private executors enjoy the same procedural law, having the same scope of responsibility and practically the same rights and obligations, with the exception of the commercial component of the activities of private performers.

Of course, among the significant advantages of a private executor is the weight of the load he himself, which, unlike the state, the private executor can regulate the number of executive documents that will be in his execution, and the possibility of using the assistance of existing assistants.

At the same time, it should be noted that during recent years, the burden on public executives is gradually decreasing. For example, in Dnipropetrovsk oblast, according to official statistics, the average load per one public executor per month is 88.3 enforcement proceedings, taking into account those proceedings that are suspended or are being executed in the accounts of enterprises for making deductions from the salaries of debtors.

This tendency is caused by objective factors, first and foremost, by a significant decrease in the receipt of execution of executive documents in connection with the decrease in the number of decisions made by the courts, as evidenced by the official indicators of the state of legal proceedings in Ukraine in the first half of 2017, the need to pay downpayers the contribution stipulated by Article 26 of the Law of Ukraine "On Enforcement Proceedings", as well as the non-alternative necessity, in comparison with the previous edition of the Law, shall be paid by the debtor of the executive fee.

A significant incentive for motivating state executives regarding the actual execution of decisions is the remuneration of a state executor, set at 2% of the amount collected, but not more than 200 living wage rates. However, it is definitely necessary to pay particular attention to establishing a decent level of salaries for state executives as the main source of income, and increasing the size of the salary to at least the minimum wage level.

In general, the trend in recent years regarding automation of the implementation process will, in my opinion, lead to a narrowing of the scope of competition between public and private performers in the future. In the presence of such circumstances, the professional level of the executor, the quality and terms of execution of separate executive actions will come to the fore. Thus, the existence of an alternative to the payer will have a positive effect on the overall development of the system of forced execution in general.

Particular attention also deserves attention to the gradual development of the mediation system and the provision of additional services related to the enforcement of decisions, some of which are already contained in the current version of the Law of Ukraine "On Enforcement Proceedings".

Thus, for example, according to Clause 11 (3) of Article 18 of the Law, the performer has the right to make a decision on the postponement and installment of execution of the decision (in addition to court decisions), in the presence of a written application of the collector. Also, the world agreement of the parties in the process of enforcement of decisions is submitted to the court for approval by the executor in accordance with the requirements of st.372 CPC, Article 262 of the Criminal Code and part 8 of Article 121 of the Civil Code of Ukraine. In this regard, it is advisable to develop the process of mediation in the executive proceeding, significantly expanding the range of possibilities, including procedural ones, for the settlement of separate issues by the parties with collection of arrears already established by the decision with the help of the executor.

In addition, I believe that the creation of additional services for citizens and legal entities associated with the enforcement of decisions significantly contributes to the development of the system of state executive service in a competitive environment. For example, such services may include:

- the improvement of the AOP software by the function of the "personal cabinet" of the enforcement party, which is created by a possible analogy with the portal of public services with the identification of a person through BankID or with the use of an electronic digital signature certificate, which will prevent information from executive proceedings other than parties to the enforcement proceedings, persons, with the purpose of direct remote interaction of the state executor and the relevant person in the part of obtaining the documents of executive proceedings and operational information on executed actions; filing applications and complaints in the enforcement proceedings and obtaining the results of their consideration;

- development and introduction, together with the State Border Guard Service of Ukraine, of the Open Register of persons who are restricted to travel outside Ukraine in connection with the evasion of the fulfillment of obligations imposed on them by court decisions;

- Development and implementation of an open Register of vehicles in search of enforcement in conjunction with the Ministry of Internal Affairs of Ukraine;

- the introduction of a paid service service to provide citizens and legal entities with information on the property status of a person who is a potential debtor in the enforcement proceedings in order to decide on the expediency of presenting an enforcement document for further enforcement;

- creation of a system of payment of arrears for executive proceedings in an online mode on the example of the existence of similar services of Internet payments "Privat 24", which has already been successfully operating in the last two years in the Dnipropetrovsk region.

Thus, summing up the above, I would like to note that, under the condition of proper legislative and administrative support, the state system of enforcement of decisions can compete with private performers.

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