As of 1 January 2013, a new law on state guarantees regarding the enforcement of court decisions shall become effective in Ukraine. The new law provides enforcement guarantees of court decisions (i) on collection of funds and (ii) on the obligation to fulfill certain actions in respect of assets/property, against:

• State organs/bodies;
• State owned enterprises, entities and organizations;
• Legal entities, which assets and property are prohibited for sale by Ukrainian laws. 

Under the new law, the enforcement of court decisions against any debtors – state organs shall be directed by the State Treasury of Ukraine upon a duly filed request of a claimant. The relevant debt amounts shall be collected (1) from the debtor's accounts or (2) in event of lack of debtor's funds, - from the state budget - and shall be transferred to the claimant within 3 months of the date the claimant's application is submitted to the State Treasury of Ukraine.

The new law also provides for the enforcement of court decisions against debtors - state owned entities (including entities, which assets and property are prohibited for sale) through repayment by the State Treasury of Ukraine of the unenforced amounts from the state budget upon the expiry of the 6 month period from the date of commencement of the enforcement proceedings by the State Enforcement Service.

The law sets forth pecuniary penalties for non-payment by the State Treasury of Ukraine in favor of the claimants of the relevant amounts under court decisions at a 3 % annual interest rate, which shall accrue upon the expiry of the three month period on the outstanding amount under the court decision. Such penalties shall be repaid to the claimant from the state budget.

In addition, the law provides for liability of officials, whose non-performance/actions related to non-repayment of debts to claimants under court decisions, leads to losses in the state budget due to the repayment of unenforced decisions by the state.

The implementation, in practice, of the guarantees of the Ukrainian state, as provided by the new law, will lead to the improvement of the court decision enforcement process against debtors - state entities and shall guarantee the enforcement of court decisions in such cases within the due terms.

Additional notes
This LEGAL ALERT is issued to inform Baker & McKenzie clients and other interested parties of legal developments that may affect or otherwise be of interest to them. The comments above do not constitute legal or other advice and should not be regarded as a substitute for specific advice in inpidual cases.

For More Information

Svitlana Romanova, Partner
+380 44 590 0101
svitlana.romanova@bakermckenzie.com

Nataliya Demir, Associate
+380 44 590 0101
nataliya.demir@bakermckenzie.com

UKRAINIAN VERSION: UKRAINIAN VERSION.pdf - 135.95 kb