What are enforcement proceedings?

Administrative enforcement proceedings

Administrative enforcement applies to the obligations listed in Article 2(1) of the Act on Enforcement Proceedings in the Administration; it therefore generally concerns obligations under public law, including taxes, fines and financial penalties, as well as receivables arising from privatisation proceeds. As a rule, these obligations should be established by a relevant administrative act. Where the basis for the obligation is a decision or ruling, enforcement proceedings follow the administrative proceedings in which that act was issued. However, a situation is also possible where enforcement proceedings are not preceded by other proceedings, as the obligation which the enforcement authority seeks to enforce arises directly from the provisions of law, and therefore does not need to be specified by way of a decision.

Enforcement proceedings consist of three stages, which, however, do not necessarily occur in every case**:**

• The stage preceding the commencement of enforcement

– may take place in one or two phases, depending on whether the creditor is a separate entity or whether this role is performed by the enforcement authority.

In the first phase, the creditor takes specific steps to initiate and carry out enforcement against the debtor, including issuing a reminder to the debtor; if this proves ineffective, the creditor draws up an enforcement order and an application to initiate administrative enforcement, which is then sent to the enforcement authority.

The second phase involves the enforcement authority assessing the admissibility of enforcement and affixing a clause to the enforcement order directing it to administrative enforcement.

However, where the enforcement authority is also the creditor, it assesses the admissibility of enforcement itself, draws up the enforcement order and affixes to it a clause referring the order to administrative enforcement.

• The enforcement stage – involves the enforcement authority taking coercive measures consisting of selecting and implementing the enforcement measure or measures.
• Post-enforcement stage – the conclusion of enforcement is not always synonymous with the conclusion of enforcement proceedings. Following enforcement, certain actions may still be carried out, e.g. the distribution of the sum recovered through enforcement.

Enforcement proceedings in civil matters

Enforcement matters within the meaning of the Code of Civil Procedure include all matters to which this Code applies pursuant to Article 1 of the Code of Civil Procedure. It is therefore reasonable to pursue, through enforcement proceedings as regulated by the Code of Civil Procedure, claims arising from relationships governed by civil, family, guardianship, labour or social security law.  In the vast majority of cases, enforcement proceedings in civil matters follow on from civil proceedings in which a judgment is delivered or a settlement is reached obliging the debtor to perform. It should be borne in mind that enforcement proceedings are not treated as a sanction within the meaning of criminal law, as the purpose of enforcement proceedings is solely to ensure the fulfilment of obligations, not to cause hardship to the debtor. The debtor can always avoid enforcement proceedings by voluntarily fulfilling the obligation awarded.

Enforcement proceedings can be divided into three stages:

1. Enforcement clause proceedings – this concerns the granting of an enforcement clause to an enforcement order, which is generally granted by the court at the creditor’s request. It is worth noting that merely filing an application for an enforcement clause to be granted to an enforcement order does not in itself constitute an act that interrupts the limitation period for the claim.
2. Actual enforcement proceedings – this is the stage at which coercive measures are applied to secure performance
3. Distribution proceedings – at this stage, the sum obtained from enforcement is distributed, which plays a particular role where the debtor has more than one creditor

What is an enforcement authority?

Enforcement authorities are bodies that conduct enforcement proceedings; they are therefore entities authorised to apply coercive measures against a debtor who evades their obligation.

The administrative enforcement authorities are listed in Articles 19 and 20 of the Act on Administrative Enforcement Proceedings.

Generally, in the case of financial obligations, the Head of the Tax Office acts as the enforcement authority, whereas in the case of non-financial obligations, the provincial governor usually acts as the enforcement authority.

The situation is different in the case of enforcement proceedings in civil matters, where, pursuant to Article 758 of the Code of Civil Procedure, the enforcement authorities are district courts and court bailiffs.

Types of enforcement measures

Enforcement measures can be divided into measures for the enforcement of monetary claims and non-monetary claims.

The enforcement of non-monetary obligations, unlike the enforcement of monetary claims, does not aim to obtain a specific sum of money from the debtor. Enforcement measures for non-monetary claims are applied to compel the debtor to perform the desired action or to produce a specific item. This group of enforcement measures includes, for example, a coercive fine, the seizure of property, enforcement of declarations of intent, and substitute performance, where the performance of the obligation may be entrusted to another person on behalf of the debtor and at the debtor’s expense.

The category of enforcement measures for monetary claims includes, amongst others, such measures as enforcement against cash, which is the simplest and most commonly used measure, and enforcement against wages, bank accounts, property or shares in a limited liability company.

How does enforcement proceedings differ from enforcement?

Enforcement proceedings serve to give effect to substantive law and constitute a method of conducting enforcement. It is a broader concept than enforcement itself, which refers only to a specific stage of enforcement proceedings involving the use of coercive measures aimed at compelling the debtor to fulfil their financial or non-financial obligations. It is therefore possible that previously initiated enforcement proceedings have been concluded as a result of the proceedings being discontinued, and no enforcement has taken place at all, as well as a situation in which, following the conclusion of enforcement, enforcement proceedings continue because, despite the legally required obligation having already been enforced, the sums obtained through enforcement have not yet been distributed.

In summary, enforcement proceedings serve to protect the creditor’s rights to receive the payment due to them, in cases where the debtor evades the fulfilment of the obligation imposed upon them. The regulations governing enforcement proceedings in administrative and civil matters are based on the same principles, and the differences arise mainly from the distinct entities typical of both branches of law and the scope of matters falling within the remit of administrative and civil law.