Claim assignment agreements not banned
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- Created: Monday, 14 March 2016 18:49
The Independent Association of Banks of Ukraine (IABU) has said the chief territorial department of justice in Kyiv interpreted incorrectly the decision of the Ukraine's Higher Administrative Court on factoring transactions. The incorrect interpretation was revoked, the IABU said.
"The IABU asked Ukraine's Justice Ministry to validate the grants of authority used by the chief territorial department of justice in Kyiv to issue letter No. 3/28/1172, dated January 29, 2016 and addressed to state-run and private notaries in Kyiv. In violation of Article 19 of the Constitution of Ukraine, the letter sets new requirements for endorsing transactions by notaries and changed market rules under which financial institutions can claim to overdue debts of borrowers," the association said.
The letter de facto prohibited notaries from endorsing agreements on assigning claims on mortgage agreements signed to secure implementation of credit agreements involving new mortgage holders. Lawyers said the letter amounted to a factoring ban imposed by the Justice Ministry.
"Notwithstanding the letter was not a regulatory document, it was used a short-term tool to pressure notaries who refused to endorse claim assignment agreements under mortgage agreements," the association said.
The chief territorial department of justice in Kyiv on February 11 said it had withdrawn its letter.