The Double-Collection Trap: How the State Enforcement Service and the Courts Are Derailing IMF Structural Benchmarks and Blocking Ukraine’s Path to the EU
Imagine this: you have paid off your debt in full. The court judgment has been enforced, the private enforcement officer has done the job, received the lawful 10% fee, closed the proceedings and lifted all attachments. Case closed? If only.
You open the Diia app and see that your accounts are blocked and you are still listed in the Register of Debtors.
It turns out that the State Enforcement Service (SES), which once held your writ of execution and did not actually recover a single hryvnia, has issued a resolution to collect another 10% from you, this time as an «enforcement fee.»
This is not an abstract theory. It is a systemic legal problem that thousands of Ukrainians and investors encounter. It also affects Ukraine’s ability to meet its financial and European integration commitments to its key international partners.
Anatomy of a Case:
How the «Double Fee» Works in Kyiv
A real precedent from enforcement practice in the capital shows how this works.
Initially, the writ of execution was pending at the Dniprovskyi District Department of the SES in Kyiv. Having seen no real action or result, the creditor exercised the legal right to withdraw the writ. When the writ was returned, the state enforcement officer of the Dniprovskyi Department automatically issued a resolution imposing on the debtor an enforcement fee of 10% of the amount subject to enforcement, supposedly for «work done» (and the law allows this).
The same writ was then submitted to Kateryna Karashchuk, a private enforcement officer of the Kyiv enforcement district. The private enforcement officer fully enforced the court judgment, actually recovered the debt, and on entirely lawful grounds collected from the debtor the basic fee provided by law: UAH 121,000 (approximately USD 2,700, at the exchange rate at the time of writing), the same 10%.
The result: the court judgment has been enforced, and the private enforcement officer received UAH 121,000 for the actual recovery. At the same time, the Dniprovskyi SES Department is demanding another UAH 121,000 (approximately USD 2,700) from the debtor on the basis of a resolution issued without any recovery, the debtor’s accounts remain under attachment, and funds continue to be collected from the account.
The Supreme Court’s Position:
No Result, No Fee
From the standpoint of the legislator’s logic and European standards, an enforcement fee, or an enforcement officer’s remuneration, is payment for results. No result, no payment.
The fundamental legal position in this category of disputes was set by the Grand Chamber of the Supreme Court in Case No. 2540/3203/18 (ruling of 11 March 2020). The Court clearly held that the mandatory conditions for collecting an enforcement fee are:
- The state enforcement officer has taken active measures to enforce the decision.
- The enforcement document has actually been enforced (that is, the debt has actually been recovered by the SES itself).
The Grand Chamber emphasized that the enforcement fee is a sanction for non-compliance with a decision, but it is collected in proportion to the amount actually recovered by the state enforcement officer.
Since the Dniprovskyi Department of the SES did not recover a single kopeck in this case, the resolution imposing a fee of UAH 121,000 is unlawful.
Moreover, when the enforcement document is subsequently presented to a private enforcement officer, Part 5 of Article 27 of the Law of Ukraine «On Enforcement Proceedings» expressly and mandatorily provides that the enforcement fee is not collected where the decision is enforced by a private enforcement officer. The opposite interpretation would create an unlawful precedent of double financial liability of the debtor for one and the same document.
In practice, however, the SES continues to issue such resolutions, and the attachment of accounts remains in place even after the debt has been repaid in full. A modern state needs an enforcement system that is transparent and predictable for the debtor.
Political Will:
What Do the President and the Prime Minister Declare?
This situation unfolds against the backdrop of public statements by the country’s top leadership about the absence of any alternative to European rules of the game. Over the years, the President and the heads of government have repeatedly spoken of the rule of law and judicial reform as the foundation of Ukraine’s European path:
Early 2019 (election platform): Volodymyr Zelenskyy promises a fundamental reset:
- «The judiciary must become a Power, not a servant of the President, the government, Parliament or local authorities. We will restore trust in and respect for the court.»
22 March 2021 (meeting with the EBRD President): The head of state makes a clear commitment with a deadline:
- «Judicial reform is among the most difficult challenges, but within three years we will complete it fully and create a transparent, effective judicial system in Ukraine.»
23 November 2021 (following the IMF’s decision to disburse a tranche of nearly USD 700 million under the Stand-By Arrangement): Then Prime Minister Denys Shmyhal says:
- «We have confirmed Ukraine’s status as a reliable and responsible partner. The assessment of international partners shows that Ukraine is actively implementing reforms to build a modern state.»
1 December 2021 (address to the Verkhovna Rada): The President acknowledges the problems, but again promises a result:
- «Judicial reform in Ukraine. There is nothing to be proud of yet. We are only at the beginning of this difficult path… But for the first time it will be taken to the end.»
9 February 2023 (speech in the European Parliament): The President speaks of European values:
- «European rules of life are when everyone matters. When the law rules, the rule of law. When states strive to be social, and societies to be open.»
The current head of the Cabinet of Ministers also consistently speaks of the need for prompt adoption of the laws on which international financial support depends.
After reshuffling the government amid a large budget deficit, Prime Minister Serhiy Koretskyi shifted the state to a strict austerity regime and directly linked the economy’s resilience to legislative changes.
14 September 2026: The head of government addresses the Verkhovna Rada, calling for the prompt adoption of a package of reforms:
- «The legislative changes on which receipt of international financial assistance depends must be adopted by Parliament as soon as possible. Our funding is directly tied to fulfilling our commitments to partners.»
30 September 2026: Serhiy Koretskyi, at a Cabinet meeting, reports on the progress in meeting donor conditions and warns:
- «The government has shifted into a maximum-austerity mode… But that is not enough. It is critically important for us to receive funds from international partners. This funding depends directly on Ukraine fulfilling its commitments: both government decisions and legislative changes.»
In practice, however, the situation differs from these declarations. The deadlines for the promised reforms have long passed, while the system of enforcement and administrative justice still operates under old approaches. This is also reflected in the demands of our international partners.
What Do the IMF and International Creditors Demand?
The problem of the dualistic enforcement system (where state and private services simultaneously block property under a single writ issued to enforce a court decision) and the low rate of enforcement of court decisions have featured for years in the Memoranda on Economic and Financial Policies with the IMF.
International creditors set clear institutional requirements in the areas of the rule of law and financial stability:
- Equalizing the rights of private and state enforcement officers: The IMF and the World Bank insist on expanding the powers of the private enforcement sector. The creditors’ aim is to demonopolize enforcement and gradually optimize the work of the SES, handing enforcement over to a transparent, competitive private market.
- Protecting investors’ rights and the business climate: Under the Ukraine Facility and its commitments to the European Commission, Ukraine undertook to digitalize justice and eliminate any instruments of artificial pressure on assets. An investor must be confident that if a court decision has been enforced, the accounts are clear.
On the ground, however, the reform meets resistance. The SES retains its role in debt collection, and the procedural decisions of district administrative courts in such cases often leave the debtor without effective judicial protection.
Kyiv District Administrative Court:
Procedural Obstacles to Access to Justice
In this category of disputes, first-instance courts do not always follow the clear precedents of the Supreme Court. The practice of the Kyiv District Administrative Court (KDAC) illustrates this, as two cases show.
Case No. 1: Delay and failure to send rulings (Judge I. M. Skrypka, Case No. 320/5085/24). The debtor’s claim was not registered by the court for almost half a year. When the case moved forward, Judge Skrypka issued a ruling leaving the claim without movement, citing non-payment of the court fee in full. The claimant states that no ruling setting a deadline to remedy the deficiencies, and no final ruling returning the claim (together with the statement of claim and its attachments), was ever sent to the claimant. The court fee has not been refunded to the claimant to date.
As a result, the claimant had no opportunity to learn of the court’s objections and to correct them. The claimant has filed a disciplinary complaint with the High Council of Justice (HCJ) concerning these procedural violations; no disciplinary measures have followed so far.
Case No. 2: Application of procedural rules (Judge M. Ya. Vistak, Case No. 320/33815/26). In another attempt to obtain protection against the actions of the Dniprovskyi SES, the court left the statement of claim without movement because of an alleged missed deadline for applying to court and the absence of a separate motion to restore it. However, the request to restore the deadline was set out in the text of the statement of claim itself, which the Code of Administrative Procedure permits. The claimant considers that this should have been sufficient for opening proceedings.
Together, these decisions leave the claimant in a procedural deadlock: on one side are the SES’s attachments on the accounts, on the other, the court’s refusals to examine the dispute on the merits.
The current practice shows that the enforcement system still has features inherited from the post-Soviet period and has not yet fully moved to European standards. This is directly relevant to Ukraine’s commitments to the IMF and the European Commission.
Until Ukraine introduces end-to-end digitalization of proceedings on the «One Case – One File» principle, together with the automatic lifting of attachments after full settlement with the actual enforcement officer, such cases will keep recurring. The rule of law begins not with declarations in Brussels, but with the unblocked account of a specific citizen or investor who has fully discharged their obligation under the law.
What Is the Rule of Law?
The rule of law is a fundamental legal principle under which law is above any authority, and all citizens, organizations and public officials are equal before it.
This means that no one (neither the president, nor the government, nor the police, nor the wealthy) may stand above the law, and all state decisions must be made solely on the basis of existing legal norms.
The 4 core principles of the rule of law:
- Accountability: The state and its representatives are subject to the law and bear responsibility for violating it.
- Just laws: Laws are clear, comprehensible, public and stable, and protect fundamental human rights.
- Open government: The processes by which laws are enacted, administered and enforced are accessible, fair and efficient.
- Accessible and impartial justice: Disputes are resolved by independent, ethical and competent judges (the judiciary is fully independent of politicians).
Last Updated on 06.10.2026 by iskova