Act on Amendments of and Supplements to the Act on Execution and Ensuring Settlement

Act on Amendments of and Supplements to the Act on Execution and Ensuring Settlement

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At the Fifteenth extraordinary session in the Eleventh convocation, on July 26th, 2019, the National Parliament of the Republic of Serbia rendered the Act on amendments of and supplements to the Act on execution and ensuring settlement (“RS Official Journal”, No. 54/2019, hereinafter referred to as: „the Act“). The Act shall become effective as of the 8th (eighth) day following its publication in the Official Journal, and shall be applicable as of January 1st, 2020.

The aim of rendering of the Act is solving of the problems in practice caused by application of the previous act, for which problems the legislator has found that could not be overcome by interpretation of the norms, but only by amendments of the act.

In that sense, the Act pays special attention to protection of the basic life requirements of the enforcement debtor. Therefore, the Act, on one hand pro- vides that the single real estate item of a natural person shall not be sold for the purpose of settlement of the utility services or similar claims, if the amount of the claim is below EUR 5.000,00 in RSD equivalent at the medium exchange rate of the National Bank of Serbia prevailing on the date of  ling of the proposal for execution, while, on the other hand the thresholds of the earnings, salaries and pensions are significantly higher, in terms of the amounts protected from the possibility of execution.

For the same purpose, the principle of proportion is “intensified” and the public executor is obliged to, when making the choice between the items of execution, chose the item which is the least unfavorable for the enforcement debtor. Also, the Act allows the public executor to, ex officio, or upon the client’s proposal, limits the execution to only certain funds and items which are suficient for settlement of the enforcement creditor’s claims. In compliance with the principle of cost reduction, the Act specifies that the enforcement creditor, who has requested separate settlement by submission of several proposals for execution against the enforcement debtor, while the settlement could have been exercised within one procedure of execution, shall be entitled only to compensation of the costs he would have had if he had  led only one proposal for execution.

Further, the Act, in Article 19, provides that legally ineffective are the documents on legal or factual disposal of the subject of execution or settlement as of the date of rendering of the resolution on execution on the ground of an executive or valid document or resolution on ensuring settlement. Unlike the for- mer solution, the Act now entitles the enforcement creditor, who is in possession of the bill of exchange, to request the governmental authorities, holders of public powers, other legal entities and entrepreneurs, to provide him, free of charge, with all data they are obliged to deliver to the Court and to the public executor, except the data contained in the tax returns for the last three years.

The Act introduces another two means of execution “in favor” of the enforcement creditors, as follows:

  • • joint sale of the real estate and movable property and
  • • conversion into money of other proprietary rights of the enforcement debtor.

However, when talking about the execution on the ground of the pledge statement or agreement on mortgage, or transcript from the pledge register, or financial leasing, the Act provides that execution may be exercised only on the subject of the lien.

When talking about the subjects and means of execution, the Act has finally removed the dilemmas in connection with execution on the receivables of the enforcement debtor, by specifying that in the event the claim of the enforcement debtor from his debt- or is based upon the executive or valid document, the enforcement creditor may, on the ground of the public executor’s conclusion on assignment of the claim and the executive or valid document,  le the proposal for execution against the debtor of the enforcement debtor, and if the enforcement debtor’s claim from his debtor is not based on the executive, or valid document, the enforcement creditor may exercise his rights, on the ground of the public executor’s conclusion, in the litigation proceedings.

The Act introduces the so-called “Summary enforcement procedure” which might be carried out if the enforcement creditor and enforcement debtor are the parties the disputes of which, subject to the laws, are within jurisdiction of the commercial Court, only on the ground of four valid documents: bill of ex- change or check of the local or foreign party, with protest, if required for establishing the claim, un- conditional bank guarantee and the letter of credit, and the verified statement of the enforcement debt- or under which he authorizes the bank to transfer the pecuniary funds from his account to the account of the enforcement creditor.

In accordance with the aims of the Republic of Serbia Government, the Act introduces the possibility of  ling an e-proposal on execution and the possibility of the e-public tender.

In order to take the burden o  the Court, the Act pro- vides for transfer of all cases in progress before the Courts to the competence of the public executors under the principle ensuring the fair and equal burdening, and for that purpose, the Act also provides for abrogation of all cases in which the execution is carried on the accounts of the enforcement debt- or, who, on the effective date of the Act has been in blockade for the period longer than three years, unless the enforcement creditor, within eight days from the effective date of the Act proposes change of the means and subject of execution.

The Act has introduced numerous other changes, by specifying the Constitutional Court award as the exececutive document, changing the obligatory contents of the proposal for execution in terms of the identifying data of the parties, providing that execution on the whole property may be proposed also in the proposal for execution  led on the basis of the valid document, providing for the possibility that the attorney of the enforcement creditor be paid for the costs of the procedure on his own bank account, and many other changes. 

By  JPM Jankovic Popovic Mitic