Conditions for Applying Account Blocking Measures

CHAPTER 2

LEGAL STATUS ON ACCOUNT BLOCKAGE MEASURES

2.1. Conditions for applying account blocking measures

Clause 1, Article 66; Clause 1, Article 67 of the Law on Civil Judgment Enforcement stipulates: “The enforcement officer has the right, on his own or upon the written request of the litigant, to immediately apply measures to ensure the enforcement of judgments (including measures to freeze accounts) to prevent the dispersion, destruction of assets, and evasion of judgment enforcement..”. The freezing of accounts and assets at the depository is carried out in cases where the judgment debtor must have an account or assets deposited . Based on the purpose of preventing the dispersion of money in the account and evasion of judgment enforcement, the enforcement officer may, on his own or upon the written request of the litigant, issue a decision to freeze or deduct money from the account of the judgment debtor or the person to whom the judgment enforcement obligation is transferred [24, p36] . Thus, the measure of freezing accounts in civil judgment enforcement must ensure the following conditions:

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+ The decision to execute a judgment must have material value (in money or valuables converted into money in case the item no longer exists or is damaged...)

+ Only the enforcement officer has the right to apply account freezing measures;

+ The person who must enforce the judgment or the person to whom the judgment enforcement obligation is transferred must have an account at a specific depository and must have money in that account;

+ Must have full necessary information about the account holder so that the Enforcement Officer can apply the measure of freezing the account at the depository;

+ There must be a written request from the party (in case of execution of judgment by petition) ensuring sufficient information necessary for freezing the account at the depository for the obligated person;

On the basis of meeting the above conditions, the Enforcement Officer does not need to notify the parties in advance and can immediately issue a Decision to freeze the account or establish a

Minutes of settlement for the organization managing the deposit account applying the measure of freezing the obligated person's account to prevent the act of dissipating money in the account that can happen at any time and moving towards the main task of deducting money from the account of the person subject to enforcement to fulfill the obligation to pay. Is the issue of dissipating money in the account aimed at evading the obligation to enforce the judgment? There are many different views on this issue, some views say that: if the sign of dissipation is a condition for application, the Enforcement Officer will only apply it when there is an act of dissipation, evading the obligation to pay [5, p45] , for this view, it is more strict, requiring the Enforcement Officer to consider whether there is dissipation of money or not. Besides, we also see its limitation that if the consideration is delayed, it will affect the purpose of preventing the account freezing from the obligated person, thereby making it impossible to deduct money from the account of the person subject to enforcement. There is also a view that: there is no need to have acts of dispersion or evasion of payment obligations, the Enforcement Officer can apply immediately, with this view, prevention is more important, with this view, the application time is fast, neat, simple, timely to meet the prevention requirement but it also has its own disadvantages: widespread application can easily cause unnecessary damage to the person who must execute the judgment... According to the author's perception: Clause 1, Article 66 of the Law on Civil Judgment Enforcement is interpreted as the Enforcement Officer has the right to apply pre-guaranteed measures... to prevent dispersion... (this clause complements the previous clause) affirming that this is a preventive measure without a mandatory provision requiring clear proof of dispersion in progress before applying the account freezing measure. The terms used: " Security", " Freezing" are enough to show that the main preventive factor is not creating loopholes for the person who has the obligation to disperse or destroy assets; The property must be kept in its original condition at the depository and not immediately processed, but to give the party time to find a way to fulfill the obligation. If the obligated person still deliberately fails to fulfill or voluntarily fulfill the obligation according to the notice of the Enforcement Officer, the Enforcement Officer will apply the measure of compulsory deduction of money in the account or terminate the previous blockade (Clause 3, Article 67 of the Law on Enforcement of Judgments).

civil). This is a very good measure, convenient for all parties due to the guaranteed enforcement conditions, short implementation time, simple procedures, less effort and high efficiency. However, the measure to ensure enforcement during the voluntary enforcement period of the litigant is still open? In addition, finding the account to freeze is not a simple matter? How to organize the implementation and coordinate between relevant organizations to achieve efficiency? Problems from the practical application of security measures, especially the measure of freezing accounts and the restrictions of the Enforcement Officer, are handled?...

For example: Civil Judgment Enforcement Unit A is handling the enforcement against Company X, which must enforce a judgment of two billion VND with collateral assets (real estate) of over two billion VND but is in the period of voluntary enforcement. The Enforcement Officer receives a document from the person subject to enforcement providing that Company X has an account at Bank Y and the amount is only 500 million VND in the temporary deposit account and requests the Enforcement Officer to apply measures to secure the enforcement. Should the 500 million VND in that account be frozen or not? Not providing and committing to show signs of money dissipation in the account and in fact the period of voluntary enforcement has not yet expired; Company X receives the Judgment Enforcement Decision but does not comply with the Enforcement Officer's summons for many reasons that are difficult to determine.... This is a very difficult case for the Enforcement Officer in deciding whether or not to freeze the account in the situation where Company X is still operating normally; Blocking will cause obstacles and reputation for Company X and may be complained by Company X; not blocking will face complaints from the requester, on the other hand, blocking the amount of 500 million VND in the account will not resolve the case completely....

Regarding the above provisions on account freezing to ensure execution of judgments, this is a new point of the current Law on Civil Judgment Enforcement. With the provisions of Article 66, it helps the Enforcement Officer have more options and more convenience in the process of applying preventive measures, including freezing accounts to enforce judgments, if deemed necessary, it will be applied immediately. In practice, the application of this account freezing requires sensitivity and flexibility, analyzing the actual situation.

In fact, the ability of the Enforcement Officer to evaluate when applying the measure of blocking accounts with other measures to suit the actual requirements for each specific case, because in the same case there are many different measures, but which measure is closer to reality and more effective, as in the difficult example mentioned above? Resolving a case quickly or taking a long time depends a lot on many different factors, but the focus is still on the mind and vision of the Enforcement Officer directly handling the case.

2.2. Procedures for applying account freezing measures

2.2.1. Overview of the application procedures and order

The procedures for freezing and deducting money from the judgment debtor's bank account are stipulated in the Law on Civil Judgment Enforcement and the documents guiding the implementation of the Law on Civil Judgment Enforcement, which are quite streamlined, creating favorable conditions for the Enforcement Officer to apply them more easily and conveniently.

First of all, the Civil Judgment Enforcement Officer must systematize and master the specific provisions of specialized laws on account freezing and money deduction from the judgment debtor's account to properly apply the provisions of the Law and documents guiding the implementation of the current Law on Civil Judgment Enforcement such as: Articles 45, 46, 66, 67, 76, 77 of the Civil Judgment Enforcement Law and Article 20 of Decree No. 62/2015/ND-CP dated July 18, 2015 of the Government detailing and guiding the implementation of a number of articles of the Law on Civil Judgment Enforcement. Accordingly, the provisions on account freezing are one of the measures to ensure judgment enforcement. The Enforcement Officer applies account freezing to judgment debtors who have money and assets at banks, credit institutions, and state treasuries to prevent the dissipation of money in the judgment debtor's account. The order, procedures, and implementation methods, including notes on account freezing, have been stipulated in the above provisions. Immediately after that, if the party does not voluntarily execute the judgment, the money in the account must be forcibly deducted; This deduction must not exceed the obligation to execute of the person subject to execution and the cost of enforcement. This obligation is recorded in the decision and judgment that have come into legal effect of the Court and is actually executed by the enforcement agency.

Such enforcement costs must be shown in the enforcement file.

Clause 1, Article 66 of the Law on Civil Judgment Enforcement stipulates: “The enforcement officer may apply measures to ensure the enforcement of judgments on his own or upon the written request of the litigant”. Obviously, this is the full initiative of the enforcement officer in freezing the judgment debtor’s account and he must take full responsibility for that decision (except in cases where the litigant requests the PTTK). The purpose of freezing an account is to promptly prevent the dissipation of money in the account in any form, which is the basis for the next step of deducting money from the judgment debtor’s account. With these regulations and practical work, the author can initially outline the order, procedures and handling methods of the enforcement officer for situations arising in the application of account freezing measures, which must ensure at least the following operational processes:

Step 1: Check the content of the Decision on enforcement of judgment must be correct, must be an obligation to enforce the judgment to pay money or an obligation to return valuable items but the items no longer have their original value, then the measure of account freezing can be applied in case the judgment debtor's account has money at the depository.

Step 2: Issuing a Decision to freeze the account: When applying the measure of freezing the account, the enforcement officer must have sufficient information to issue the Decision to freeze through many sources such as available in the Decision, the Court's Judgment or through verification work... (mainly applicable to cases actively enforcing the judgment for the State). For the request of the litigant to freeze the account in writing, it is also necessary to ensure that the necessary information is sufficient to issue the Decision to freeze the account according to the form prescribed by the Ministry of Justice. The enforcement officer must immediately issue the Decision. If there is a delay in this case, the person subject to enforcement may immediately disperse the money in their temporary deposit account, leading to complaints and compensation. In case there is not enough information to issue a Decision to freeze the account of the person obliged to execute the judgment, the Enforcement Officer shall conduct verification at the depository and, if he/she discovers that there is money in the account and the account needs to be frozen immediately, he/she shall make a record requesting the agency, organization or individual managing the account of the person obliged to execute the judgment.

The execution officer shall freeze that account and within 24 hours of making the record, the execution officer must issue a Decision to freeze the account;

Step 3: Notice of enforcement: The Enforcement Officer's decision to freeze the account must be immediately delivered to the agency, organization, or person managing the account of the person subject to enforcement, but it is not necessary to notify the person subject to enforcement, the person subject to enforcement, or the person with related rights and obligations within 03 working days from the date of the decision to freeze according to Clause 2, Article 39 of the Law on Civil Enforcement to avoid the dissipation of money in the account. However, after the Enforcement Officer successfully requests the unit or person managing the account to freeze, the next step should be to notify the parties and the persons with related rights and obligations of the decision to freeze the account so that they can find a way to enforce it themselves. At the same time, to avoid losing business opportunities as well as creating many obstacles for the person subject to enforcement, when implementing the notification of the Decision to freeze the account, the Enforcement Officer needs to have a detailed notice of the specific amounts of money and the implementation method, along with a request for the person subject to enforcement within the remaining period of 10 days from the date of signing the Decision to freeze the account to bring the full amount of money according to the Decision to enforce the judgment and the actual and reasonable expenses during the enforcement process to meet the Enforcement Officer to voluntarily enforce the judgment to terminate the account freeze according to Article 77 of the Law on Civil Judgment Enforcement. This is a way of enforcement that has been very effective in practice, although the law on civil judgment enforcement does not require the Enforcement Officer to comply, but stemming from the measure of persuading by all means so that the parties agree, voluntarily enforce the judgment and the effectiveness of the specific notification action following the Decision to freeze, the Enforcement Officer often applies it. However, in the process of organizing the execution of judgments in general, and the Decision on applying the measure of freezing accounts in particular, there are often cases where the information is not sufficient to issue a Decision on freezing accounts immediately, but it is necessary to verify the account of the person subject to the execution of judgment at the place of deposit but without receiving full cooperation from the agency, organization, or person managing the account, the Execution

The enforcement officer must patiently explain the law on enforcement and immediately afterwards have grounds to determine that the person subject to enforcement has dispersed money in the account at that depository; The enforcement officer must work very hard to deal with the frustration of the person requesting the account freezing and must base on many provisions such as Article 11; Clause 6, Article 44; Article 176 of the Law on Civil Judgment Enforcement and especially Article 14 of Joint Circular No. 02/2014/TTLT dated January 14, 2014 of the Ministry of Justice - Ministry of Finance - State Bank of Vietnam - Ministry of Labor, War Invalids and Social Affairs to handle the situation of not providing information about the account. At the same time, the enforcement officer must immediately notify in writing the unsuccessful account freezing result to the person entitled to request the account freezing according to Point b, Clause 1, Article 7 of the Law on Civil Judgment Enforcement.

Step 4: End the validity of the Decision to freeze the account of the person subject to enforcement at the place of deposit in two directions: Within 10 days from the date of issuance of the decision to freeze the account, if the person subject to enforcement or the person to whom the obligation is transferred does not voluntarily perform all the obligations to enforce the judgment according to the Decision to enforce the judgment and the actual reasonable costs in the process of organizing the enforcement of the judgment against them, the Enforcement Officer shall issue a decision to enforce by deducting money from the account of the person subject to enforcement. On the contrary, if the person subject to enforcement voluntarily performs all the obligations to enforce the judgment and the costs for the enforcement of the judgment, the Enforcement Officer shall immediately issue a decision to terminate the freezing of the account of the person subject to enforcement (Point a, Clause 1, Article 77 of the Law on Civil Judgment Enforcement). However, for the amounts that are forced to be deducted from income at a certain rate according to Article 78 of the Law on Civil Judgment Enforcement such as: Salary, wages, pension, allowance for loss of working capacity and other income, it is not possible to unfreeze their accounts after 10 days but must keep the freezing decision intact to request the organization or account manager to deduct from the income of the judgment debtor every month according to the Decision of the Enforcement Officer. The termination or unfreezing of the account freezing decision only ends after the successful implementation of the decision to deduct money from the account or the decision to deduct from the income of the judgment debtor with money in the account according to Articles 76 and 78 of the Law on Civil Judgment Enforcement.

It can be said that the provisions on measures to secure the account of the person subject to enforcement as stipulated in the Law on Enforcement of Judgments are very progressive, consistent with the practical work of enforcing civil judgments and will certainly prevent all acts of dissipation of money in the account of the party concerned. If the account is frozen smoothly, the next step of the Enforcement Officer, which is to deduct money from the account, will be more convenient and easier.

Next, I would like to clarify the process of freezing accounts and enforcing deductions of money from accounts at banks, treasuries, and credit institutions of the judgment debtor so that everyone can visualize the steps and procedures when the civil judgment enforcement agency resolves cases related to this important measure.

2.2.2. Contents of implementing account blocking measures

2.2.2.1. Verify and collect information on conditions for execution of judgment on account freezing measures

The collection of information about the judgment debtor's account can be done by the person requesting the application of the account freezing measure or by the Enforcement Officer. Information about whether the judgment debtor has an account or not can be based on one of the following factors: the field, profession of the judgment debtor, the contracts of the judgment debtor with partners, business registration. In many cases, through analyzing and researching the judgment (especially economic judgments), the Enforcement Officer can also obtain the necessary information about the judgment debtor's account. The judgment debtor, the person with related rights and obligations can also provide information about the judgment debtor's account to the enforcement agency [24, p49].

In addition, depending on the purpose of each enforcement file, the Enforcement Officer must develop a verification plan. Many enforcement files must be verified, including personal information, occupation, etc. All of the above verification results are aimed at considering whether the person subject to enforcement has the conditions to enforce the judgment or not. In many cases, the Enforcement Officer must verify many times, through many agencies and units.

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