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Blocking of company account by Ukrainian Enforcement Service

Description of the situation:

We were lucky to get this one client who made significant (at least comparing to our standards) order after a lasting downtime related to crisis and absence of demand. I would like to mention that even though the firm actually wasn’t functioning but reports were submitted timely, correspondence was performed by one of so called business-incubator firms with which we entered into agreement of secretary services provision. Thus, our company was continuing to exist on paper while not actually functioning.

But when we received the order we recalled all the specialists that had been laid off and were ready to start the work it turned out that our bank account onto which the client was going to transfer an advanced payment was blocked by the Executive Service. At the same time received correspondence did not contain any notifications about claims filed against our company and decision about initiation of enforcement proceedings! Thus, the creditors had actually already filed the claim, won the case, involved the Enforcement Service and blocked the accounts. And we had not been informed about all these! Now we need to settle this unpleasant situation as soon as possible since nowadays it is much easier to lose a client than to find one. But I do not really know what should be done first: should I go to the Executive Service, court of first instance, court of appeal or should I simplify everything and open a new account in another bank and then slowly pursue the first one to be unblocked?”

Recommendation (Inna Lishchyna):

“In this case you must first of all take care about obtainment of advanced payment. The court decision can be dealt with later. The sequestration was set by the State Executive Service within coercive court decision enforcement. So first of all you need to contact the State Enforcement Service and find out within which of enforcement proceedings the account was blocked. If the amount is not large I would recommend to pay off the debt and in this way close the enforcement proceedings and unblock the account. If you cannot pay off  the debt by a single payment you should negotiate with the collector about voluntary repayment of debt by several payments in exchange for revocation of enforcement document.

I wouldn’t recommend to open another account because until the enforcement proceedings is in force this may become a ground for criminal liability (Section 6 of Article 65 of the Law of Ukraine “On enforcement proceedings”). In this situation intentional non-fulfillment of court decision will become the ground for the criminal liability.”

Unabridged version of the article is available on periodical’s website under the link - http://statuspress.com.ua/conflict-of-interests/bez-vedoma-i-soglasiya.html.

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