Enforcement of administration to change

On 23 July 2019 The government adopted a bill amending the law on enforcement proceedings in the administration and some other laws[1].

Although the purpose of the revision in the Ministry of Finance's assessment is to simplify the procedure related to this procedure and to collect public debt more quickly 2 , it is, however, in the amended law[3] There will be many new solutions and modifications to existing legislation.

The main changes concern, inter alia, the initiation of the execution itself, as well as the execution of the assets of the joint spouses; movable and immovable property; overpayment or refund claims; the subject matter of a compulsory mortgage or a tax lien.

1. Moment of administrative execution

According to Article 26(1) The amending act, the enforcement authority shall initiate administrative enforcement on request of the creditor and on the basis of the implementing title it has issued, drawn up in accordance with the established formula, according to which section 5 that law shall be enforced as soon as: 1) to provide the required copy of the implementing title, or 2) service to the debtor of the claim in question of a notice of seizure of a claim or other right of property, if such service took place before service of the required copy of the implementing title.

The draft amending law states that this may also happen as soon as "3) the signature of a protocol of occupation by a staff member serving the enforcement body, if that signature occurred before service of the required copy of the implementing title, or 4) an entry in the perpetual book on the opening of the execution of the property or the submission of an application for an entry in the set of documents for the opening of the execution of the immovable property, if that entry or submission has taken place before the service of the required copy of the implementing title 4 (the start of the execution will occur at the time of the earlier event).

The removal of doubts about the possibility of enforcement actions aimed at occupying movable property or property before the aforementioned service is mentioned in the explanatory memorandum of the bill, and the amendments are intended to prevent the non-execution of the immovable property and the immovable property of the obliged person.

2. Enforcement of the assets of the obliged person and his spouse

Controversies shall be generated by the provisions of the draft amendment, according to which, if the liability of the debtor for a monetary charge and interest due to its failure to pay within the time limit includes the personal property of the obliged person and the common assets, the basis for the execution of the personal property and the common assets is: 1) an implementing title issued to the obliged person; 2) subsequent implementing title 5 , Whereas the instrument of enforcement is the basis for the execution of the personal assets of the obliged person and of the common assets also of the costs of reproof and the costs of enforcement resulting from enforcement proceedings under that title[6].

The next provision provides that the conclusion of a marriage contract or the occurrence of any other event resulting in the restriction, abolition, exclusion or cessation of liability of the obliged person shall be deemed to be ineffective in the property component which would have been part of the common property if that contract had not been concluded or the legal event had not occurred.

This component shall be considered to be part of the common assets[7].

Legislative Council at the Prime Minister in its opinion with 24 June 2019 on the project[8] negatively assessed the proposed changes Under section 1 and 2 added Article 27e to the Amended Act, recognising that it does not result from their content, ‘or ‘the common property’ referred to therein is merely the property of the joint spouses, or that it may also refer to other forms of common property known to Polish law, including, in particular, the joint property of civil partnership shareholders (...).

However, if we accept that the proposed legislation Article 27e(1)(2) regulate administrative execution also in relation to the joint assets of shareholders of a civil company (or to other still existing forms of Polish law or forms of common property), then the de lege ferenda should be argued in favour of a clear recognition of this circumstance in further proposed (in the draft) legislation Article 27e-27h and, in particular, to extend the personal scope of the opposition to other persons entitled to that common property.’

3. Execute from mobility

The bill introduces many changes in this form of execution. If it appears from the records kept by the obliged, official movement register or lien register that it is obliged to own the movable property, the enforcement authority may take up such movement and call on the obliged person to show the movable property thus occupied or indicate the place of its storage within the time limit set by that authority, not less than 3 days from the date of service of the summons under the terms of the imposition of a penalty[9].

The explanatory memorandum indicates that it will therefore be possible to occupy a mover that is physically not at the place of the seizure at the time of its execution.

The obligation will be granted – within the time limit 7 days from the date of service of the copy of the minutes of seizure or copy of the supplementary minutes, respectively, the right to lodge a complaint with the enforcement authority on the assessment made by the staff serving that authority.

The enforcement authority will then call on the tax expert to estimate the value of the movable property: valuables; movable property of historical, scientific or artistic value, but the valuables cannot be estimated below the value of the aggregate or material from which it was produced[10].

The law is to enter into force, except for certain provisions, after 6 months from the date of publication.

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1 Project from 2 July 2019 Act amending the Act on Enforcement Procedure in Administration and some other laws; published on the website of the Government Legislative Centre: https://legislacja.rcl.gov.pl/docs//2/12321208/12570858/dokument403844.pdf hereinafter referred to as the draft amendment.

2 According to estimates of the Ministry presented in the Impact Assessment, In 2016 The average duration of administrative enforcement proceedings on the basis of tax titles was 555 days. 3 Act of 17 June 1966 on enforcement proceedings in the administration, i.e. Journal of Laws of 2018, item 1314 as amended (hereafter: Amended Act).

[4] Article 1(10) the draft amendment.

5 As added in the draft to the Amended Act Article 26ca(1), the creditor shall issue another implementing title where necessary: 1) the security for the immovable property or for the execution of the immovable property which is part of the common property and its spouse; 2) enforcement from the subject of a compulsory mortgage – in case of transfer of the subject to a different entity than the obliged entity.

6 section 1 and 2 Article 27e, added to the bill amended by Article 1(16) the draft amendment. 7 section 3 added Article 27e. 8 Look https://radalegislacyjna.gov.pl/dokumenty/opinia-z-24-czerwca-2019-r-o-projekcie-ustawy-o-zmianie-ustawy-o-postepowaniu-egzekucyjnym [9] Article 1(56) the draft amendment.

[10] Article 1(58) the draft amendment.