Debt collection in Belarus in favor of creditors from unfriendly countries

On April 7, 2022, Decree No. 137 “On Executive Documents” was adopted in the Republic of Belarus, according to which the enforcement of decisions on debt collection in favor of creditors from unfriendly countries was suspended.

Council of Ministers Decree No. 209 of 04/06/2022 defines a list of unfriendly countries, namely: all countries of the European Union, the Australian Union, Canada, Liechtenstein, Norway, New Zealand, Albania, Iceland, North Macedonia, the United Kingdom of Great Britain and Northern Ireland, the United States America, Montenegro and Switzerland.

Thus, creditors from the above countries will not be able to collect debts from Belarusian debtors through the enforcement of court decisions received. The effect of this decree also applies to the execution of court decisions that were previously presented for enforcement, but not executed before 04/07/2022. The text of the decree does not contain a period for the duration of such restrictions.

During the period of indicated circumstances, in order to collect debts, we recommend that foreign creditors use the stage of amicable collection by negotiating, sending a claim and putting legal pressure on the debtor.

If the implementation of this stage did not bring the desired result, despite the existing restrictions, you should think about judicial debt collection, based on two reasons:

1. Missing the statute of limitations. In the Republic of Belarus, in a three-year limitation period is set from the day when the debtor violated the payment deadline. In this regard, if the statute of limitations is on the verge of expiration, then you should certainly go to court with a claim for the recovery of the debt, because otherwise, it will be extremely unlikely to recover the debt after the statute of limitations has passed.

It is also necessary to understand that after the court makes a decision in favor of the creditor, the latter receives a writ of execution, which can be presented for enforcement within three years from the date of its issuance. Thus, the creditor can gain additional time to successfully collect the debt in the future after the restrictions have been lifted.

2. Voluntary enforcement of a judgment. Based on the practice of debt collection, from time to time there are cases in which debtors voluntarily execute a court decision that has entered into legal force and repay debts without the need for enforcement. Although this percentage of cases is small, this option should also be considered.

If the above two stages are not acceptable and the creditor has a fundamental desire to collect the debt despite the existing restrictions, then in this case, one should think about assigning the debt in favor of a new creditor who is not a resident of an unfriendly country.

After the documentary re-registration of the debt to a new creditor, the latter can apply to the court with a claim for the recovery of the debt and, after receiving a decision, initiate the enforcement process. In this case, the restrictions of the decree will not work, but it is not known how long “such a loophole in the legislation” will exist.

Before implementing this option, it should also be taken into account that, according to the requirements of the currency legislation, in the event of an assignment of a foreign currency debt, the subsequent payment of the debt will be made only in Belarusian rubles.

You can learn more about the debt collection procedure in Belarus here.

If you have any questions or need support on debt collection in the Republic of Belarus, our company is ready to provide its expert assistance to effectively resolve your financial issue. Please contact us for more information and professional advice from our experts.

12.04.2024

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