Experts of EU Project Pravo-Justice Took Part in the Committee Hearings on the Execution of Court Decisions

On December 5, the Committee of the Verkhovna Rada of Ukraine on Legal Policy held the hearings on the topic: "Mechanism for Ensuring the Effectiveness of Enforcement of Court Decisions." The event was attended by members of Parliament of Ukraine; the Verkhovna Rada Commissioner for Human Rights; representatives of the Ministry of Justice, the State Enforcement Service, the National Bank of Ukraine, the Business Ombudsman Council, and the Office of the Council of Europe in Ukraine; justices of the Supreme Court; members of the Association of Private Enforcement Officers of Ukraine, the Independent Association of Banks of Ukraine, the Ukrainian National Bar Association; and experts of EU Project Pravo-Justice.

When opening the event, Denys Maslov, Chair of the Verkhovna Rada Committee on Legal Policy, emphasized that holding committee hearings was not a common practice and applied only in the presence of important and complex topics.

"The need to increase the rate of execution of court decisions has been enshrined in the report of the European Commission on the assessment of Ukraine’s progress on the way to the EU. We are holding committee hearings in order to get updated on the problems that exist in the field of enforcement and on possible solutions. We will analyze all the theses and take them into consideration when working on further legislative amendments," said Denys Maslov.

Valerii Bozhyk, moderator of the meeting, said that the MPs, together with the stakeholders, had come up with draft law No. 5660 "On Enforcement", which provided for a comprehensive approach to improving the of enforcement system. In addition, the committee prepared a draft law on the introduction of effective judicial control.

"Unfortunately, the full-scale invasion of the Russian Federation led to a forced break in the process of adoption of that systemic document. However, the reality proves that the draft law needs to be finalized and adopted in the second reading," noted Valerii Bozhyk.

In his speech, Ombudsman Dmytro Lubinets highlighted the problems identified following parliamentary control over the observance of the right to proper execution of a court decision, and also suggested some ways to address them. For instance, he suggested setting up a clear statutory term (for example, 1 month) within which the banking institution shall respond to the EO’s decision on identifying a current account of an individual debtor in the respective bank which is used for outgoing transactions. Mr. Lubinets also called to study the possibility of introducing certain moratorium on the enforcement of court decisions, if the debtors are military personnel who are on the frontline or in captivity.

Iryna Kushnir, representative of the Office of the Council of Europe in Ukraine, emphasized that the issue of systemic lack of enforcement of court decisions is the most extensive problem from the point of view of Ukraine’s implementation of its obligations before the Council of Europe in terms of the implementation of ECtHR decisions.

Andrii Haichenko, Deputy Minister of Justice of Ukraine, presented some statistical data on the performance of SEOs and PEOs and drew the MPs’ attention to the need to review the existing moratoria in the field of enforcement of court decisions.

Vitalii Chepurnyi, PEO, Head of the APEOU (2019-2023), noted that due to the uncompleted enforcement reform and the full-scale Russia’s invasion, today, the enforcement rate has reached its abysmal record of 1.6%.

"According to the results of the previous committee hearings held in October 2020, it was recommended to go with a full-fledged mixed enforcement system in Ukraine. However, instead of implementing this recommendation, we are still discussing the feasibility of equalizing the powers of private and state enforcement officers. The institution of private enforcement officers has proved its effectiveness", said Vitalii Chepurnyi.

Oksana Rusetska, newly elected Head of the Association of Private Enforcement Officers of Ukraine, talked about how to digitize enforcement proceedings and improve its procedures. She suggested introducing a full-fledged automated seizure of funds. She also voiced the idea of switching the record keeping of PEOs and the SES bodies to an electronic format, alongside automating the system for checking the debtor’s financial situation.

Oleksii Movchan, MP, focused on the subject of the sale of property within enforcement proceedings and on the proposals to lift the moratorium on the forced sale of property of state-owned enterprises. He also presented his opinion on the necessity to separate the functions of SETAM and Prozorro Sales in order to introduce the principles of transparency, competition and openness of trades in seized property.

Iryna Zharonkina, Property Rights and Enforcement Component Lead, EU Project Pravo-Justice, spoke about the European Commission’s position on the harmonious development of enforcement and insolvency systems as a prerequisite for Ukraine’s financial and economic integration into the EU.

"Today, EU Project Pravo-Justice is working on a number of systemic policies in the field of enforcement. Among the problems that need to be solved, there is a lack of systematized data on the decisions that need to be implemented and related arrears; a lack of an effective mechanism for the execution of binding decisions; the problem with voluntary execution of a court decision, and a lack of effective responsibility for non-execution of court decisions. Unfortunately, we have to state problems with the integrity of EOs. Besides, one of the most important issues is the uncompleted digitization of enforcement proceedings," said Iryna Zharonkina.

Oleg Mykhaliuk, Key National Expert, EU Project Pravo-Justice, outlined the key issues of enforcement of binding court decisions where the State is a debtor. He reported that the team of national and European experts of EU Project Pravo-Justice had prepared a dedicated Analytical report. It is based on best comparative regional and European practices in the field of enforcement of court decisions. That report was presented in June 2023.

"Taking into account the peculiarities of binding court decisions, one of the tools for ensuring their implementation can be effective judicial control, which provides for personal financial responsibility of the head of a state institution for non-compliance with a court decision. The existing model of judicial control has proved being effective in administrative proceedings, and therefore, it would be reasonable to extend this mechanism to court decisions that are adopted within economic or civil proceedings. A problem apart is the execution of court decisions where the defendant is a collegial body. In such cases, fines for non-execution of a court decision shall apply personally to individual members of the collegial body, who failed to contribute, within their scope of powers, to the execution of the court decision," said Oleh Mykhaliuk.

Viacheslav Panasiuk, National Expert of EU Project Pravo-Justice, spoke about the relevance of the adoption of draft law No. 5660 "On Enforcement" and its key novelties.

"This draft law is fully in line with the policies and goals that have been set in the Memorandum on the provision of macro-financial assistance to Ukraine and the Program of Activities of the Cabinet of Ministers. As of now, the only factor restraining its adoption is a full-scale war. However, one should not chalk up everything to the war and wait for it to be over. One should work on this draft law and eventually adopt it, providing for a flexible implementation mechanism," said Viacheslav Panasiuk.

Andrii Bondarchuk, representative of the Business Ombudsman Council, shared the recommendations of his organization on improving the situation with execution of court decisions. They include the need to review moratoria and the system of sanctioning for non-execution of court decisions; expanding powers of PEOs; developing effective mechanisms for execution of decisions at the pre-trial stage.

Andrii Avtorgov, Deputy Head of the APEOU, while talking about the improvement of the legislation on enforcement proceedings and further development of enforcement institutions, emphasized that when picking up a solution aimed to improve the enforcement system, it is advisable to focus on best European practices in this area.

"Changes to the enforcement-related legislation shall comply with European standards and principles in this field," noted Andrii Avtorgov.