Enforced collection from client’s accounts - Dragana Djordjevic, attorney

Enforcement of claims from client’s accounts (Enforced collection) shall be realized in accordance with the provisions of articles 47. to 49. of Law on Payment Transactions (FRY Official Gazette, Nos 3/2002 and 5/2003, RS Official Gazette, Nos 43/2004, 62/2006, 111/2009, 31/2011 and 139/2014). The execution titles, the order of fulfilment of the execution titles and the procedure of realization of the enforced collection are regulated by those legal provisions.

Enforced collection – titles and the order of fulfilment of titles

Enforcement of claims from client’s accounts shall be made against all of the client’s accounts with banks in which the client holds funds, and shall be made on the basis of:

enforceable decisions issued by tax, customs and other competent bodies – according to the time of receipt
enforceable court decisions, other execution titles, legal authorisations – according to the time of receipt
creditors’ orders in respect of matured securities, bills of exchange or mandates given by the debtor to its bank and its creditor – according to the time of receipt.

Enforced collection shall be made in the following order:

enforceable decisions issued by tax, customs and other competent bodies
enforceable court decisions, other execution titles, legal authorisations
creditors’ orders in respect of matured securities, bills of exchange or mandates given by the debtor to its bank and its creditor.

The recovery of funds, which representing borrowed funds in the client’s account, shall take priority over any collection based on the above-mentioned orders.

The enforced collection of creditor’s orders in respect of matured securities, bills of exchange or mandates given by the debtor to its bank and its creditor, may be performed on the basis of bills of exchange or mandates referred to therein only if such bills of exchange and mandates are recorded in the register of bills of exchange and mandates maintained by the National Bank of Serbia.

The register of bills of exchange and mandates shall contain the following data:

serial number of the bill of exchange/mandate
identification number of the debtor and/or guarantor or warrantor
date of issue of the bill of exchange/mandate
maturity date of the bill of exchange/mandate
amount indicated on the bill of exchange/mandate, and in case of a blank bill of exchange – data on the underlying instrument (e.g. loan agreement, etc.) and its value
date and time of registration of the bill of exchange/mandate.

The debtor shall apply to register the bill of exchange or mandate with its bank.

The register of bills of exchange and mandates shall be a public record maintained in electronic form, and the data contained therein shall be accessible on the website of the National Bank of Serbia.

The date and time of registration of the bill of exchange and mandate shall be the date and time of publishing the data on the website of the National Bank of Serbia, which contain the register of bills of exchange and mandates, for which accuracy and authenticity the resposinbility shall lie with the bank.

The National Bank of Serbia shall prescribe detailed terms, content and manner of maintaining the register of bills of exchange and mandates, as well as the manner of deleting data from the register.

Enforced collection – procedure of realization

The enforcement of claims shall be performed by the National Bank of Serbia.

The National Bank of Serbia shall receive enforceable decisions issued by tax, customs and other competent bodies, and enforceable court decisions, other execution titles, legal authorisations from their issuers and shall, immediately after their receipt, order all banks to block all dinar and foreign currency accounts of the debtor, as well as order them not to open any new accounts to the debtor and to submit data on balances in those accounts to the National Bank of Serbia without delay.

After receiving the notification from banks on the amount of balances in the accounts, the National Bank of Serbia shall order the bank with which the debtor has the highest balance in an open dinar account to execute the claim enforcement against that account. If the balances therein are insufficient – the execution shall also be ordered to other banks in which the debtor holds open dinar accounts, sequentially, in proportion to the amount of balances therein, until the claim enforcement is executed in full.

Where dinar account balances are zero or insufficient for execution of enforcement – all banks in which the debtor holds open foreign currency accounts shall be ordered to carry out the enforcement, sequentially, in proportion to the amount of balances therein, until the claim enforcement is executed in full.

The balances against which the enforcement may be executed include all funds held in dinar accounts with the bank, as well as the dinar equivalent of foreign currency funds held with the bank, except funds exempted from execution by law, or based on the Government’s enactment, regulation of the National Bank of Serbia, court decision or decision of tax and/or customs authorities, or where the funds originate from grants and humanitarian aid, life insurance, privatisation receipts, funds for financing state commodity reserves, voluntary contributions, court deposits, funds earmarked for payments under letters of credit, deposits serving as loan collateral, budgetary funds for payment of premiums, subsidies and compensations, security instruments under contracts prescribed by law and other regulations, as well as other persons’ funds in the debtor’s accounts.

Where the debtor holds balances on time deposit with a bank, the bank shall be required to use such balances after the expiry of the time deposit contract to carry out the enforcement. In this case the validity of the initial time deposit contract cannot be extended.

Balances in the debtor’s account blocked based on a claim enforcement order may not be used for other payments by that debtor.

Once the claim enforcement is executed in full, the National Bank of Serbia shall without delay notify banks thereof in order that they can unblock the balances in debtor’s accounts in such banks.

Execution titles and claim enforcement orders shall be recorded and executed according to the time of receipt by the National Bank of Serbia.

The creditors’ orders in respect of matured securities, bills of exchange or mandates given by the debtor to its bank and its creditor shall be executed against balances in the debtor’s account in the bank indicated in these orders.

Where balances in the the debtor’s account in the bank indicated in creditor’s orders are zero or insufficient for the execution of orders – the bank indicated in the above orders shall immediately submit the data specified in the orders to the National Bank of Serbia, so that the enforcement can be executed against balances in accounts with banks in which the debtor’s funds are available as set out in cases where the enforced collection shall be realized on the basis of enforceable decisions issued by tax, customs and other competent bodies, and enforceable court decisions, other execution titles and legal authorisations.