Today, Ukraine launches a system of automatic seizure of funds on the debtor’s accounts

On July 6, the automated system of enforcement proceedings has been fully operational, which will allow the seizure of funds in the bank accounts of Ukrainian debtors automatically.

Ekonomichna Pravda announced this, Rubryka reports.

What exactly has changed?

Previously, in order to write off debts from debtors, the executive service first had to find money in accounts, sending inquiries to all Ukrainian banks. Banks often refused to provide executors with such information, which complicated the debt collection process.

If the debtor's accounts were identified, the executors had to send another letter requesting the seizure of funds. The whole procedure was lengthy, as all requests had to be sent in paper form. This complicated the debt repayment process.

However, in April 2021, the National Bank updated its regulations on the disclosure of banking secrecy. Now, at the request of executors, banks provide information not only on the availability of the debtor's accounts but also their numbers and balances.

At the same time, the Ministry of Justice allowed the use of the Automated Enforcement Procedure to detect and seize funds in accounts in all enforcement proceedings, not just those related to the payment of alimony, as was the case before.

This means that it has become much easier for public and private executors to identify debtors' bank accounts and balances, as well as to seize these funds.

How does it work?

The public or private executor will create a special request in the system about the availability of the debtor's funds, which will automatically be sent to all banks that have joined the system. Banks will receive this information in an hour.

In the same system, the executor will be able to create a resolution on the seizure of funds in the debtor's accounts, send banks a request to write off funds from the accounts and bank details of the executive service to which they need to be transferred.

The process of confiscation of funds should soon become automatic as well. Until then, the write-off requests will be sent by the executors by traditional mail.

In which banks will debtors' money be arrested automatically?

Currently, the following banks are connected to the Automated Enforcement System: Privatbank, Taskombank, Universal Bank (including Monobank), OXI Bank, Vostok Bank, Industrialbank, and ProCredit Bank. Another 44 banks are testing the system and will soon join it, and 11 banks are negotiating to connect to the test system.

What debts will be seized automatically?

All debtors who've entered the relevant register of debtors can automatically have funds in their accounts seized. Previously, this procedure was applied only to alimony debtors.

According to Opendatabot, in April, the register had information about 5.54 million debts. This figure is constantly growing: at the beginning of 2020, there were 3.8 million debts.