General Procedure
The seizure of a bank account is always an unpleasant situation, especially when a person finds out about it accidentally, for example, while making a routine transaction in a favorite store or mobile app. However, even in such a case, there is no need to panic. Instead, it is important to assess the situation rationally and take the necessary steps to unblock the account.
First, it is necessary to determine the reason for the seizure. The easiest way to do this is by contacting the card-issuing bank (via an online application or at a branch). If the seizure is due to exceeding established limits, these must be increased. In such a case, the bank may request documents confirming the sources of the funds. However, the most common reason for seizure is an open enforcement proceeding. Information about such proceedings can be found on the official website of the Ministry of Justice of Ukraine or through “Diia.”
After obtaining information about the enforcement proceeding, it is advisable to review its documents: the order to initiate proceedings, the order to impose a seizure, and obtain the contact details of the state or private bailiff handling the case. Analyzing these documents is essential for deciding on the next steps: appealing the order to initiate enforcement proceedings, recognizing the debt and making a payment, etc. We advise consulting a lawyer in Kyiv for legal assistance.
If there are no additional problems with the latter—after paying the debt and enforcement proceedings’ expenses, bailiffs close the case and remove the imposed seizures—appealing the order to initiate enforcement proceedings or a court decision on which it was based does not remove the seizure from the debtor’s bank account. A court appeal in the first-instance court (a lawsuit) may take several months. We will discuss this in more detail in the article: How to Remove Property Seizure.
Are There Exceptions Allowing Individuals to Use Funds in Accounts If Enforcement Proceedings Have Already Been Initiated and Accounts Have Been Seized?
– Yes, there are.
The transitional provisions of the Law of Ukraine “On Enforcement Proceedings” provide for the possibility, during martial law, of carrying out expenditure transactions with funds seized by the state enforcement service or private bailiffs. However, the following restrictions apply:
- This possibility applies exclusively to individual debtors.
- The permitted amount of expenditure transactions does not exceed twice the minimum wage established by the Law on the State Budget of Ukraine as of January 1 of the current calendar year within one calendar month.
- The account from which such transactions are made must be specifically designated for this purpose.
It should be immediately emphasized that if there are multiple accounts in one bank or accounts in different banks, expenditure transactions can only be made from one account.
Procedure for Designating an Account for Expenditure Transactions
The debtor submits an application to the state enforcement service or a private bailiff who imposed the seizure on the individual debtor’s funds, requesting the designation of a current bank account for expenditure transactions.
The application may be submitted in paper form (in person or by mail) or electronically, complying with the requirements set forth in the Law of Ukraine “On Electronic Documents and Electronic Document Flow.”
The application must include the number of the current account that the individual debtor requests to be designated for expenditure transactions and the name of the bank where this account is opened.
The state or private bailiff, within two working days from the date of receiving the respective application from the individual debtor, issues a resolution designating the individual debtor’s current bank account for expenditure transactions and, without delay—no later than the next working day after issuing the resolution—provides/sends the respective resolution to the bank (servicing bank) and verifies whether there are other open enforcement proceedings against the individual debtor.
Please note that the suspension of enforcement actions or the suspension of enforcement proceedings is not grounds for refusing to designate a current account for expenditure transactions.
Can Business Entities Use Funds in Seized Accounts During Martial Law?
– Yes, this possibility exists.
The legislator has also granted employers (legal entities and self-employed individuals) the right to carry out expenditure transactions from accounts blocked by the enforcement service. However, once again, exclusively during martial law and subject to the following restrictions:
- Purpose of transactions: for salary payments, as well as for the payment of taxes, fees, and the unified social contribution for mandatory state social insurance.
- Salary payment limit: no more than five times the minimum wage per month per employee.
The ability for employers to carry out expenditure transactions from blocked bank accounts has been provided to ensure that they can pay salaries to employees on time and settle obligations with the budget.
If you discover that your funds have been seized and find it difficult to navigate the legal details of unblocking your account, we recommend seeking professional consultation from lawyers. The specialists at the legal firm Ukraine “First Legal” will be happy to assist you in gaining access to enforcement proceeding documents, preparing an account unblocking request, or submitting it in the prescribed manner.