As of July 6, banks in Ukraine can automatically seize funds from bank accounts for unpaid debts through an automated system.
The new Automated System of Enforcement Proceedings (ASEP) allows a public or private lender to create a special request in the system about the existence of funds in a debtor’s account, which will automatically go to all the banks that have joined the ASVP.
The lender can order a seizure of funds and send banks a request to write off funds from accounts.
The new ASEP is already used by the biggest Ukrainian bank PrivatBank, as well as six other Ukrainian banks. 44 banks are testing it and are expected to join, 11 are still in negotiations.
In order to collect debts previously, lending agencies had to send requests to Ukrainian banks to figure out where a debtor had funds. Banks often refused to provide such information, making it difficult to collect debts.
The process was complicated by the fact that all requests to confiscate funds had to be submitted in paper form and sent through the mail.
Prior to the launch of the automated system, in April the National Bank of Ukraine updated its provisions on the disclosure of confidential banking information. Now, at the request of the executors, banks must provide information about the existence of debtors accounts, account numbers and balances.
The Ministry of Justice is also allowed to identify and seize funds in accounts through the system in all enforcement proceedings, and not only in those related to the payment of alimony as before.
According to the Opendatabot, in April the registry had 5.5 million debts. This figure is constantly growing: by the beginning of 2020, there were 3.8 million debts.
