AMENDMENTS OF THE LAW ON ENFORCEMENT AND SECURITY

On 3 August 2019, the National Assembly of the Republic of Serbia adopted Amendments to the Enforcement and Security Law (“Law”). The Law entered into force on 1 January 2020, with certain provisions applying from 1 March 2020 and 1 September 2020.

The legislative changes refer to the following:

  1. Expanded powers of public bailiffs
  2. Voluntary settlement procedure in front of public bailiffs
  3. A new warrant of enforcement
  4. A new instrument of enforcement
  5. Electronic public sale
  6. Shorter deadlines in commercial disputes
  7. Enforcement of entire property on the basis of a document attesting to debt

 

  1. Public bailiffs now have the exclusive power for the execution of enforcement by means of liquidation of real estate and movable assets, as well as for the enforcement of action, which can be incumbent on the debtor or a third person.
    The Law now explicitly gives the court the power to enforce family law documents, except when it comes to enforcing legally mandated financial support, in which case it is the public bailiff who have exclusive responsibility.
    Further, public bailiffs now have the exclusive power to enforce mandated public dues (for instance, collection of court fees).
    Most significantly, public bailiffs now have the exclusive power to decide on creditors’ proposals and issue enforcement orders for the purpose of debt collection against the budget of the Republic of Serbia or local government
  2. Voluntary settlement procedure can be initiated by the creditor, in a written proposal accompanied by an enforceable document. On the basis of such request, public bailiffs then invite the debtor to settle the debt voluntarily within 60 days. Voluntary settlement procedure extends the statute of limitations deadline for additional 60 days.
  3. The decision of the Constitutional Court which approves the damage compensation request set forth within constitutional appeal for compensation of damages represents a new warrant of enforcement introduced by the Law.
  4. The Law now includes that creditors can seek enforcement on other property rights of the debtor (trademark, patent and other) as a new instrument of enforcement.
  5. For the first time, enforcement can now draw on electronic facilities, such as electronic bulletin boards and electronic public auctions, to aid the process of public sale. The law stipulates that the court electronic bulletin board will be the only avenue for electronic advertising of the sale of property in the context of enforcement. Starting from 1 March 2020 Public Bailiffs will be able to decide if the public auction of real estate will be performed via electronic or regular auction procedure. From 1 September 2020, all public auctions, whether they relate to real estate or to movable assets, will be conducted in electronic format only.
  6. The Law introduced summary enforcement proceedings, a modified form of enforcement proceedings. These proceedings are conducted in commercial disputes under the jurisdiction of the Commercial Court, and only on the basis of the following types of documents attesting to debt: promissory note or check of domestic or foreign entity, unconditional bank guarantee, unconditional letter of credit, certified statement from the debtor authorizing a bank to transfer funds from its account to creditors account. The difference between a regular enforcement proceeding and a summarized one is in shorter deadlines. A debtor can file an objection within 5 days as of when they received the decision on enforcement and the creditor can respond to the objector within 3 days.
  7. The Law proscribes that the creditor now has the authority to enforce debtor’s entire property, regardless of whether the process is based on a warrant of enforcement or a document attesting to debt.