MoJ improves the procedure of arrested property disposition

Ministry of Justice actions: registration service Kyiv

Subject of complaint: the Ministry of Justice of Ukraine (MoJ), State Enforcement Service Department of the MoJ (MoJ enforcement service)
Complaint in brief: On July 4, 2017, UkrSibbank appealed to the BOC with a complaint concerning actions of the MoJ enforcement service. The Complainant could not enforce collateral – the property that had not been disposed via electronic auction process.
In September 2016, the MoJ enforcement service arrested an apartment located in the center of Kiev belonging to the bank. At the end of May 2017, it was advanced for auction conducted by the state-owned enterprise CETAM. However, the auction was not held due to absence of admitted participants. Therefore, the bank decided to draw on the mortgage title to the property amounting to the owed loan debt.
In order to redeem the mortgaged property at the base initial price, the bank had to receive an act on the disposition of the object of the mortgage loan. However, to issue an act the state enforcement service required a protocol from CETAM on the disposition of property by way of claims set-off.
However, the state enforcement service stated that this was not possible due to the automatic nature of the formation of CETAM protocols. The MoJ enforcement service itself acted according to the procedure prescribed by law and insisted on the existence of the aforementioned act. Thus, the situation became a vicious cycle that the Complainant could not resolve.
The bank addressed this issue several times with the management of the MoJ enforcement service, however, without success.
Actions taken: The BOC investigator studied the materials of the complaint in detail and found a systemic fault in the disposition procedure of arrested property as has been approved by the MoJ. The BOC addressed the MoJ in written form and organized a working meeting with the state body. At the meeting of the working group, the BOC suggested changing the disposition procedure of arrested property, as approved by the act of the MoJ on September 29, 2016, No. 2831/5.
Result achieved: As per the support of the BOC, the MoJ has amended the disposition procedure of arrested property. In case auction trading has not taken place, the act of disposition of property by way of claims set-off is issued on the basis of a protocol. The systemic fault has been successfully corrected.

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