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NEW ENFORCEMENT PROCEEDINGS ACT 2012

New Enforcement Proceedings Act (Official Gazette No 112/12) has entered into force on 15th of October 2012.

The possibility given to the enforcement creditor to request payment directly from the Financial agency (further on: FINA), on the basis of enforcement title documents, without initiating an enforcement procedure, represents a major amendment in the New Enforcement Proceedings Act. It is important to mention that this provision applies only to those documents which became enforceable after 15th of October 2012. This provision speeds up the enforcement since the payment procedure is conducted by the state agency authorized for money transfers in the Republic of Croatia – FINA. Enforcement title documents are delivered to FINA by the Court. Since in this case no execution procedure is conducted, Bank of the debtor notifies the debtor that her/his account has been deducted. The seized assets are not immediately transferred to the creditor’s account. FINA must issue a special warrant for transfer of seized assets to the creditor’s account. The debtor is entitled, after she/he receives a notification from the bank, to file a request to the court for deferment of enforcement. If within 30 days from the day when FINA received the enforcement title documents, FINA doesn’t receive from the Court a decision on deferment of enforcement or a decision by which the enforcement is pronounced impermissible, FINA shall issue a warrant to the bank to transfer the seized assets on the creditor’s account. FINA seizes and transfers only the exact amount quoted in the enforcement title document with interests. Creditor cannot request payment of any additional costs not listed in the enforcement title document.

EMPLOYER’S ACCOUNTS ENFORCEMENT

Enforcement can be conducted directly on employer’s accounts, without the initiation of the enforcement procedure, by delivering to FINA the employer’s account of the nonpaid due salary or severance. Although the main purpose of this provision was to protect the rights of the employees, this purpose is somewhat hard to achieve. On the employer’s account it must be explicitly written that it is an account of the nonpaid due salary; otherwise FINA shall not enforce it, but shall ask the employer to correct his account. No sanctions are prescribed for the employer who doesn’t fulfill the FINA’s request.

     MOTOR VEHICLES ENFORCEMENT

Regarding the enforcement of movables, the creditor now has a more active role in the proceeding. The creditor is now obligated to attend the seizure of movables and is, in case of an unsuccessful attempt of seizure, obligated to respond, immediately at the court hearing, whether or not she/he requests a new seizure. In contrary, the procedure is stopped. The most common objects of enforcement on movables are motor vehicles. The situation of the creditor is improved in so far that the decision on enforcement is first delivered to the creditor and to the police station, and only after the police station registers the enforcement on that motor vehicle, is the decision on the enforcement delivered to the debtor. The debtor is than asked to hand over the vehicle, within 8 days, to the person authorized by the decision on enforcement. The creditor is than put in an extremely unfavorable position. The debtor will, most commonly, refuse to hand over the vehicle. In this case, the creditor must determine the exact time and place of seizure. If in that time and on that place no vehicle is found, the court shall stop the enforcement procedure.

BONDS AND BLANK BONDS

The provisions of the new act anticipate that all bonds and blank bonds must be registered in the Registry of bonds. The entry, i.e. the notification to the Registry service is delivered ex offo by the public notary immediately after the bond has been certified. The bonds have to be certified now; it is no longer enough just to verify the signature on the bond. In contrary, the bond shall not be registered in the Registry of bonds, and the creditor shall not be able to enforce this bond. The bonds and blank bonds signed before this new Act has entered into force must first be first delivered to the public notary in order to be registered in the Registry of bonds. Only afterwards, the creditor is entitled to enforce these bonds.

TERRITORIAL JURISDICTION OF PUBLIC NOTARIES

The public notary whose seat is in the unit of local (regional) self – government of debtor’s seat or domicile is the one authorized to conduct enforcement proceedings.

SUBJECT-MATTER JURISDICTION

The provision on the subject-matter jurisdiction of commercial courts for enforcement has been left out of the new enforcement proceedings act. According to this new act, the only courts authorized for the enforcement are municipal courts.

APPLICATION

Enforcement proceedings running on 15th of October 2012 shall be concluded according to the provisions of the law applicable before the entry into force of this Act. Therefore all of the above mentioned provisions are applicable only to those enforcement title documents that became enforceable after 15th of October 2012 and on the enforcement proceedings initiated after 15th of October 2012