Debt collection in Ukraine.

The solution against bad debts in Ukraine.

 

Preliminarily, on the subject of debt collection Ukraine it is important to define a fundamental aspect: the debtor's formal notice does not interrupt the statute of limitations. The extrajudicial attempt at debt collection in Ukraine is a mere attempt to reach an amicable solution.

Secondly, the formal notice or any correspondence from a person not authorized in Ukraine, whether a lawyer not licensed in Ukraine or a direct party, has no legal effect valid in a court of Ukraine. Anyone who carries out a legal activity must indicate, under penalty of nullity, their authorization number to practice the legal activity of a lawyer in Ukraine. In other words, those who act must be registered in the single register of lawyers of Ukraine.

Furthermore, a clarification is necessary: the European order for payment procedurehas no legal value in Ukraine! This injunction procedure is valid only for obligations contracted between member states of the European Union and not with Ukraine which, notoriously, did not become part of the EU. 

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The new regime introduced for debt collection in Ukraine with law no. 2147-VIII, effective 01/01/19.

With the reform indicated, the Ukrainian legislator has introduced important innovations in the procedural activity in Ukraine which has also changed the framework of debt collection in Ukraine.

Going into the merits of Ukraine's debt collection legislation, it is worth specifying: the first innovation, referred to in the reform indicated in the epigraph, is that debt collection can be initiated exclusively by a lawyer practicing in Ukraine. 

The second: all processes  debt collection in Ukraine they have a security contribution equal to the percentage of 1.5% of the amount of the claimed credit. 

Furthermore, the deadline for appeal or appeal in cassation in Ukraine has been extended from 10 to 30 days.

Another important innovation lies in the fact that Ukraine, from a legal point of view, has completely abandoned the principle for issuing decisions based on the free conviction of the judge to definitively embrace the Anglo-Saxon line of scientific proof.  Therefore, the so-called presumptive evidence has no place in the Ukrainian legal system. 

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The stages of debt collection in Ukraine:

1)formal notice of the debtor in Ukraine with specific indication of the requested fulfillment (payment, contract fulfillment, delivery or return of goods). If the formal notice is not heeded:

2)mediation for dispute settlement in Ukraine, if the debtor raises complaints, for example contesting the quantity or quality of the products sold and not paid for;

3)in case of non-payment in Ukraine: appeal in Ukrainian court before the Commercial Court. Ukrainian law requires that the judge must issue a sentence within two months. Generally the deadline is respected. The judgment in Ukraine is provisionally enforceable and the losing debtor has 30 days to appeal. In the event of an appeal in Ukraine, the procedure will be concluded within a further period of two months, always remaining, except in particular cases, the first instance sentence is enforceable;

4) executive phase for debt collection in Ukraine: seizure, foreclosure and sale or direct assignment of any sums collected. 

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Prescription:  for Ukrainian legislation, credits not collected within three years from the expiry of the payment term established between the parties, in the absence of a contract signed and stamped by the debtor which extends its validity or formal notice of default by a lawyer for the further term only granted and accepted, are considered extinct and not repeatable. In these cases, with the application of international treaties and private law compared to Ukraine, in terms of contract fulfillment, the firm appeals to the Ukrainian court, Commercial Court Section, arguing that the obligation should have been fulfilled not in Ukraine , since  the obligation is perfected and extinguished upon receipt of payment. In such cases it is possible to apply to debt collection the ordinary prescription of the foreign country pursuant to the Treaty of Brussels 44/01 to which Ukraine has joined. 

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The panorama of debt collection in Ukraine.

In case of outstanding debt in Ukraine: you need to be sure you can demonstrate the  credit. In Ukraine, it is recommended to use the written form for "ad probationem" agreements. Advice on this:

• signed bilingual agreements and if a third party is needed, preferably English to avoid misunderstandings;

• general conditions;

• order confirmations;

• copies of invoices;

• evidence of delivery or services;

• correspondence with the debtor.

If it is possible, it is advisable to register the contracts, for the conditions read: “International contracts and consultancy”.

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Recognition of foreign injunctions and judgments in Ukraine.

The firm is able to follow the process of recognition of Italian formal sentences and judgments in Ukraine. The recognition of a sentence takes twice as long as that of the courts of Ukraine. It is obvious that an Italian sentence or an injunction decree has considerable weight in the event of an appeal before the commercial court of a Ukrainian court.  For  To better understand the topic, it is necessary to view the appropriate page onrecognition of Italian and foreign sentences  in Ukraine.

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Extrajudicial and judicial debt collection in Ukraine.

The firm carries out the following activities:
• acquisition of documentation relating to the credit to be collected in Ukraine,
• checks the debtor's availability and solvency on site,

• evaluation of the Ukrainian credit recovery strategy,
• preparation of the mandate and estimate on times, possibility of recovery and costs of the practice,

• extrajudicial and judicial recovery activities before the Ukrainian authorities;
• coordination for debtor - legal - creditor information without further steps in Italian;

• possibility of attempted conciliation or mediation in Ukraine usandor arbitration.

• analysis of  conventionsinternational  proceedings with the Ministry of Justice in Ukraine for the recognition of sentences, injunctions or any formal judgment issued abroad and to be enforced in Ukraine;

• judicial activity before foreign courts in the event that the procedure takes root in Italy from Ukraine.

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To summarize: the Firm regarding what has been stated on the point  of debt collection in Ukraine, has a broad knowledge of the relevant law in Ukraine and is authorized in Ukraine to exercise all the rights of clients before all courts and courts of appeal. If necessary, the firm can present requests, appeals, produce documents and certificates, validate registers, register individuals, partnerships and applications.  The Firm also has the right to extract, forward and request certificates and copies on the socioeconomic status of any public or private entity.  By the way, we invite you to read the specific page on anti-fraud in Ukraine.

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