In summer 2016, the Ukrainian Parliament adopted the new Law of Ukraine “On Enforcement Proceedings” and the Law of Ukraine “On State Bodies and Persons who Carry Out Enforcement of Court Judgments and Decisions of other State Bodies” (both – Enforcement Laws). These laws are aimed at improving state enforcement procedures and increasing the protection of creditors’ rights in Ukraine.
Enforcement laws come into force gradually. Certain important changes are outlined briefly below:
Starting from 5 October 2016
- The term for submission of enforcement documents for enforcement is extended from one year to three years. Exceptions to that rule include, in particular, enforcement documents where the creditor is either the State of Ukraine or a state body – three months. The above rule will apply to enforcement documents issued before the Enforcement Laws’ entry into force.
- Advance payment of the enforcement fee by the creditor becomes mandatory. The Law of Ukraine “On Enforcement Proceedings” sets out a list of exceptions when a creditor is released from the aforementioned advance payment (e.g., recovery of salary, alimonies, tort loss and others) and puts a ceiling on its maximum amounts.
Starting from 5 January 2017
- The Unified Registry of Debtors (the Registry) is set up. This will be a public registry where all outstanding debtors under enforcement documents will be indicated (save for exceptions provided by Enforcement Laws). If a debtor, who is indicated in the Registry, applies to a state registrar or a notary with the aim to alienate its property, such state registrar/notary must deny a debtor’s query and notify the enforcement officer. Any transactions with debtor’s property made during the period when the debtor is indicated in the Registry may be invalidated by the court.
- Private enforcement officers are introduced. This will be individuals, who have a whole gamut of state enforcement officer’s powers and enforce the enforcement documents on profit-earning basis. Enforcement Laws prescribe a list of exceptions, when enforcement documents may be enforced only by state enforcement officers (e.g., enforcement documents against state and municipal bodies, state, municipal property, state companies etc.).