26. Dec 2019

Starting from 1 January, 2020 the amended Law on Enforcement and Security Interest shall be implemented („Official Gazette of RS“ no. 106/2015, 106/2016- authentic interpretation, 113/2017- authentic interpretation and 54/2019) (hereinafter: the Law), with the exception of provisions relating to electronic public bidding, which shall apply from 1 March, 2020.
The purpose of the amendments is to establish a more efficient enforcement procedure, but also to introduce a social component into the Law.

First of all, we would like to point out the changes referring to the securities and objects of execution. Exactly in the spirit of introducing social component, the amendments envisage that the public enforcement officers shall ex officio ensure that the enforcement procedure is carried out on the security and the object which are the least unfavourable for the enforcement debtor.

Further on, amendments are also present in the part relating to compulsory enforcement on earnings, wages, salaries, compensation of salaries and pensions, by reducing the deductions from monthly annuities.

Now the enforcement will be able to be carried out up to the half of them (instead of two thirds). The enforcement on earnings, wages, salaries, compensation of wages, i.e. compensation of salaries which does not exceed the amount of average net salary, can be executed up to the third of them, and on the minimum wages or salary, compensation of wages, i.e. compensation of salary enforcement can be executed up to the quarter of them (instead the half). Also, enforcement to collect claims for legal support will only be able to be carried out up to the half of the earnings. In the case of a pension, enforcement can be up to one-third (instead of two-thirds), up to a quarter when the pension does not exceed the average pension amount, and up to one-tenth when it comes to the minimum pension (instead of a half).

What also reflects the intention of the legislator to introduce a social component into the Law is a provision that provides that enforcement cannot be ordered by selling the only real property owned by the executive debtor for the purpose of settling claims not exceeding the amount of € 5.000,00 in RSD equivalent on the day of filing the motion for enforcement.

The amendments to the Law also bring back some of the earlier legislation. The foregoing refers to the repeated possibility of the enforcement creditors, that in a motion for enforcement based on a credible document (and not just a writ of execution as regulated so far), they may propose the enforcement on the entire property of the enforcement debtor.

Some of the legal novelties also benefit the interests of enforcement creditors. Hereby, we first of all point to the provision of the Law providing for a delay in enforcement proceedings, in the case where, on the complaint of the enforcement debtor, the proceeding continues as a civil procedure on the appeal against the payment order. The delay in the enforcement proceedings will last until the civil proceedings have been finalized. If the court renders a judgment by which it enforces in whole or in part the enforcement order in the part by which the debtor is obliged to settle the claim, the existing enforcement proceedings will continue upon the validity of the judgment, and if the court renders a judgment cancelling the enforcement order in the part by which the debtor is obliged to settle the claim, the enforcement proceedings will be terminated upon the validity of the judgment.

In this way, the costs of running the proceedings are reduced, because the enforcement creditors will no longer have to initiate a new enforcement procedure, now based on the writ of execution (valid and enforceable judgments rendered in civil proceedings arising from enforcement proceedings), but will continue already initiated enforcement proceedings, which have been deposited by the initial costs of the proceedings.

Certain novelties have also been introduced to increase the efficiency of the enforcement process. With this aim, an electronic bulletin board will be introduced, which will be established as an electronic register. Thus, on the website of the courts, every citizen will be able to check whether in this way they are delivered with any act related to the enforcement procedure.

Also, from 1 March 2020 the sale of immovable and movable property will be organized in the form of electronic public bidding. This system will operate in parallel with the existing public bidding system until 1 September 2020. After that, public bidding will be organized exclusively in the form of electronic public bidding.