Friday, May 1, 2015

Law of Ukraine “On the State’s Guarantees of Execution of Court Resolutions”

Date of entry into force:
January 1, 2013

(Abstract)

The Law establishes the state’s guarantees of execution of court resolutions and enforcement documents determined by the Law of Ukraine “On Execution Procedure” (hereinafter referred to as “court resolution”) and the specifics of their execution.

According to Article 2 of the Law, the state guarantees execution of a court resolution on collection of funds and on obligations to carry out certain actions in respect of property, where the debtor is:
·         a state body;
·         a state enterprise, institution or organization (hereinafter referred to as “state enterprise”);
·         legal entity whose property cannot be subject to mandatory sale according to the legislation (hereinafter referred to as “legal entity”).
Mandatory sale of property of legal entities means alienation of objects of immovable property and other means of production used by legal entities to carry out production activity, as well as capital (shares, interests) owned by the state and included in the equity capital of such legal entities. The Law does not apply to the court resolutions where the claimant is a state body, state enterprise, body of local self-government, or an enterprise, institution or organization in municipal property.

Articles 3 and 4 of the Law determine the specifics of executing court decisions on collection of funds from a state body, state enterprise or a legal entity.


If the State Treasury Service of Ukraine did not transfer funds under a court resolution on collection of funds within three months, the claimant shall be paid a compensation amounting to three percent annual interest for the unpaid amount, at the expense of the funds allocated in the budget program for guaranteeing execution of court resolutions. Compensation for violating the term of transferring funds under a court resolution on collection of funds from a state body is accrued by the State Treasury Service of Ukraine. Compensation for violating the term of transferring funds under a court resolution on collection of funds from a state enterprise or legal entity is accrued by a state enforcer within five days of receiving a notification from the State Treasury Service of Ukraine about collection of funds, except for cases when funds are transferred to the appropriate account of the State Executive Service of Ukraine. If the funds under a court resolution were not transferred to the claimant from the appropriate account of the State Executive Service of Ukraine within ten days of receiving all documents and information required for it, the claimant shall be paid compensation in the amount described above, at the expense of the funds allocated in the budget program for guaranteeing execution of court resolutions (Article 5 of the Law).

According to Article 6 of the Law, funds paid under a court resolution to collect funds according to the Law are considered losses of the state budget. The official or civil servant of a state body, state enterprise or legal entity, whose actions resulted in losses of the state budget is liable according to law. By request of a body of the State Treasury Service of Ukraine, prosecutor bodies address the court in the interests of the state, with claims to compensate losses incurred by the state budget. If, according to a court resolution that has become final, a component of crime was found in the actions of the official or civil servant of a state body, state bodies shall, according to the procedure established by the legislation, exercise the right of exoneration (recourse) against such person to compensate the losses incurred by the state budget, in the amount of the compensation paid, unless otherwise established by the legislation. After exercising court resolutions on collecting funds from accounts where state budget funds are booked, state bodies shall, in cases determined by the Law, hold an internal investigation in respect of involved officials and civil servants of such state bodies, if no component of crime was found in the actions of the above persons according to a court resolution that has become final. Based on the results of the internal investigation and by request of the bodies of the State Treasury Service of Ukraine with appropriate materials enclosed, state bodies and prosecutor bodies may address a court with a claim application to compensate the losses incurred by the state budget and present the officials and civil servants of such bodies that are responsible for these losses (except for compensation of payments related to labor relations and moral damages) with exoneration (recourse) demands. If the losses incurred by the state budget resulted from joint actions or inaction of several officials or civil servants, such officials or civil servants shall bear solidary liability according to law.

Execution of course resolutions on obligations to carry out certain actions in respect of property, where the debtor is a state body, state enterprise or a legal entity, is carried out according to the procedure established by the Law of Ukraine “On Execution Procedure”, with regard to the specifics established by the Law. If such court resolutions are not executed within two months after the resolution to initiate the execution procedure was made, except for cases when the claimant is obstructing the execution activities, the state enforcer shall address the court with a request to change the method and procedure of the resolution execution (Article 7 of the Law).



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