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President of Russia Vladimir Putin: Mr Aristov, how do you assess the situation in general?

Federal Bailiff Service Director Dmitry Aristov: Mr President, I wanted to thank you for this opportunity to report on the results the FBS has achieved in the main areas of its activity over the past period.

As I reported to you earlier, the service underwent a comprehensive reform in 2020 and 2021. The reform introduced changes to the legal status of the FBS personnel and was a success, with 51,000 employees reappointed to their positions. Currently we have a recruitment plan, and the new terms of employment are tougher than what we had previously; they are identical to those devised for law enforcement officers.

Vladimir Putin: What is the total number of your employees?

Dmitry Aristov: We have 66,000 officers, that is the permanent staff. The total number of employees is over 85,000, plus 2,700 structural divisions across the country.

We have done the same in the new constituent entities of the Russian Federation: the Donetsk People’s Republic, the Lugansk People’s Republic, and the Zaporozhye and Kherson regions. In accordance with your executive orders, January 1, 2023, was the starting point in our effort to establish main directorates in all regions of the Russian Federation. Now they are being staffed and will have 2,500 permanent staff members each; 50 percent already have the needed number of employees. We are using the combined recruitment principle, hiring both local personnel and people from other regions of Russia.

Under the federal constitutional laws on admission of these entities to the Russian Federation, there is no transitional period in our sphere. Since October, we have been performing in full our two main functions in conformity with our law: first, to ensure that the courts in these territories function in accordance with the established procedure – 63 courts in 73 buildings. Now, the Judicial Department and the Supreme Court are taking measures to ensure judicial protection of people’s rights in other places and regions, too, primarily in the Zaporozhye and Kherson regions. Our task is to coordinate our work with them in time and ensure the judicial system’s safety.

Additionally, we are making full use of the law on enforcement proceedings. In December 2022, with the assistance of State Duma deputies, the Government of the Russian Federation and the Ministry of Justice, we quickly passed a special law on applying the law on enforcement proceedings in these territories, and we are now making full use of it.

This law has one distinctive feature: court decisions on collection of unpaid loans granted by Ukrainian banks to population, shall not be enforced; the same concerns debts, due to be transferred to the Ukrainian budget. Consequently, we will not recover these debts from citizens.

Vladimir Putin: Do people know about this?

Dmitry Aristov: Of course, people know about this. You signed the law on December 29, and it entered into force from January 9. We are conducting explanatory work with the help of our employees. Quite recently, you signed a law banning the work of collector agencies on the territory of new regions of the Russian Federation, as regards debts accumulated before September 30, 2022. This primarily concerns Ukrainian debts; from now until 2026, collector agencies are not allowed to recover debt arrears.

We carried out the reform not just to raise the social status of our employees, improve guarantees, although this is, of course, very important. Average wages have soared by almost 90 percent and now stand at 73,000 rubles. The reform was primarily aimed at enhancing operating efficiency. The 2021 balance sheet and especially the 2022 balance sheet show that our work is becoming more effective.

We have such a major indicator as overall debt recovery volumes. In the past two years, these volumes have soared by two-thirds, and last year, they topped one trillion rubles, a critical milestone. We collected 1,100 billion rubles. In the past two years, gross debt recovery volumes increased by 400 billion rubles. Naturally, this is a very significant indicator. Of course, we still have a lot of work to do, and prosecutors’ offices are telling us about various shortcomings. Nevertheless, we are trying to do our job on time and in a conscientious manner.

In addition, the social commitments that we receive for enforcement are also being carried out. There is also a similar breakthrough in the increase of child support payments: in 2022, the amount we recovered grew by 50 percent compared to 2021. Overall, we recovered 48 billion rubles.

Vladimir Putin: By 50 percent?

Dmitry Aristov: Yes, from 33 billion in 2021 to 48 billion rubles in 2022. We believe this is one of the results of the reform – higher social guarantees for our employees. But clearly, staff turnover dropped by almost three times. This means more stability, but the pressure on people and their responsibility are increasing. Of course, some employees fail to take on this added pressure and quit, but new ones are being hired. In other words, we are working on our regular personnel, and in two or three years, this will allow us to work even more efficiently.

Mr President, considering that now enhanced measures are being taken against terrorism, we are also applying them to protect the courts in other regions of our big country. Unfortunately, there are numerous acts of telephone terrorism. We are working on this issue with relevant special services.

We are also detecting prohibited items. Last year, we recorded attempts to bring 450,000 prohibited items into courtrooms, and unfortunately, this number grew by one third. However, high vigilance allows us to avoid a disaster. We are working with all emergency services on evacuation procedures if needed. We have organised this work as well.

I would also like to report that in the past five years, 93 percent of debtors are the citizens – and a debtor is a citizen – they are people who found themselves in a difficult situation for objective reasons. Obviously, debts must be recovered but these debtors are in a complicated life situation. Therefore, our legislation and all improvements thereto are aimed at protecting the rights of these people rather than depriving them of their incomes.

Vladimir Putin: And means of subsistence.

Dmitry Aristov: Yes, means of subsistence.

One of the most important laws that was adopted recently is about keeping the subsistence minimum. We are keeping it. Overall, we kept 133 billion rubles as the subsistence minimum for our people in about 644,000 enforcement procedures.

In order to make management decisions and to analyse the situation in general, we drew up a basic profile of a debtor. So, low-income debtors who applied to keep their subsistence minimum are mostly women aged 40–50, with one child who have an only place to live, but they have a stable source of income, either a salary or a pension.

This subsistence minimum, which we keep, is generally equal to the average wage. It is now 15,700 rubles, that is, this is a very low-income and the low-paid category of the population, so they have no deferment, no instalments, no passports for foreign travel, so unfortunately people have to live in this situation.

Of all the categories of enforcement proceedings initiated, the one that causes concern is the increase of unpaid loans, including those submitted for enforcement to our service. We currently have 12.7 million documents for an amount of two trillion rubles in work. This is a lot.

An average debtor is a man or a woman of able-bodied age between 30–45; the average amount of debt is approximately 173,000 rubles per enforcement proceeding.

This category of debtors is not employed, has no official source of income, and also has the only place to live which, under the law of civil procedure, cannot be foreclosed. There is almost nothing to take from these people. Nonetheless, we are trying to…

Vladimir Putin: The question is how did they get into debt?

Dmitry Aristov: Yes, that is the question. We are analysing the situation. Many of them are people with debts from unpaid loans, including repeated debtors, but there are also people with debts coming from unpaid utility bills, payment arrears in the fuel and energy sector, those who borrow from their neighbours and fail to pay back and the neighbours go to court. That is a kind of “profession,” a professional debtor. Nevertheless, we must work with this category of people.

Vladimir Putin: It is up to the state to make sure that the people do not have such life situations.

The level of wages should be raised and people's well-being in general should be improved. The situation on the labour market is stable now, but nevertheless we must always think about this.

Nevertheless, at the same time, you have your own goals and objectives which you need to fulfil, but you must work with the people in a correct manner.

Dmitry Aristov: We need to act reasonably and rely on the law. Without that, unfortunately, we can cause irreparable harm to people. We understand this perfectly well.

When it comes to the development of digital transformation, there are people's rankings of public services on the Unified Portal of Public Services. So, as of December 2022, of the top three places, our services were rated first and second. I am pleased with this as a manager, but of course, in terms of demand, it would have been better if they had taken the last two places.

Vladimir Putin: That's exactly right.

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