Why do banks compel relatives of hostages to bear the burden of their loans, and what measures should be taken to address this issue?

We discovered in this episode of the program «Free Our Relatives».

Civilian hostages are non-combatants detained, abducted, and taken prisoner by Russians in occupied territories. According to Dmytro Lubinets, the Ukrainian Parliament Commissioner for Human Rights, approximately 28,000 civilian Ukrainians were in Russian captivity as of last December. Their conditions and whereabouts remain unknown, as occupiers typically restrict them from corresponding with their families. Individuals are often apprehended on the streets, forcibly taken to detention centers, and subjected to improvised Russian torture chambers without due trial or investigation. Civilians seldom return through exchanges, as international law prohibits the detention of non-combatants, rendering them ineligible for standard prisoner of war exchange procedures.

We consulted with Yulia Polekhina, a lawyer and documentary filmmaker from the «Sich» Human Rights Group, to explore the property and financial challenges faced by civilian hostages upon their return from captivity.

What to do if a prisoner has an unpaid loan?

Yulia Polekhina: During the period of martial law in Ukraine, as decreed by the President of Ukraine, and within 90 days following its termination or cancellation, the borrower—i.e., the individual who assumed a loan obligation for money or any other form of credit obligation, or the person to whom the rights and obligations of this borrower have been transferred, or their legal representative—has the right to request the lender or a new lender to suspend the payment of this monetary obligation. This includes both the principal amount of the loan and associated interest, commissions, and other payments.

In essence, an application can be submitted to suspend the payment of a monetary obligation under a consumer loan agreement or other agreements specified in part 2 of Article 3 of the Law «On Consumer Lending».

Certain criteria must be met. For instance, the real estate, on the day of applying to suspend the payment of this monetary security, must be located in the temporarily occupied territory.

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Read also: What challenges do civilian prisoners encounter upon release?

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Presently, we confront a situation where an individual in Russian captivity with credit obligations tied to real estate is compelled to fulfill them. The application to suspend the payment of this monetary obligation is signed either by the borrower or their representative, either in person or via an electronic signature. The original documents are then sent to the lender.

This is where challenges arise. How does one navigate this situation when the borrower is in captivity and unable to personally apply a qualified electronic signature, sign documents, or send them to the lender? Additionally, the bank may insist that the borrower’s mother or wife settle the loan or its obligations under the agreement.

What would I suggest? Firstly, examine the documents under which the loan was issued. The bank possesses these documents, and if the bank contacts the family, these documents are accessible—there is no secrecy about them, just verification is needed.

What should we focus on?

It is essential to confirm that the bank has the right to contact the borrower’s relatives to demand debt repayment, whether they act as guarantors or property guarantors of the loan, etc. Without such obligations, the bank lacks legal grounds for such demands. In such cases, it is advisable to file an electronic appeal with the National Bank of Ukraine and complain about the bank’s actions, as these demands are unlawful.

However, if a relative of the person in captivity is a guarantor, they can leverage the provisions of the law on consumer loans. The concluding provisions of this law stipulate that when settling the estimated overdue debt during the period of martial law in Ukraine, the lender or new credit collector is obligated to adhere to certain ethical behavior requirements. One of these is refraining from initiating contact with a consumer who has indicated that they belong to a protected category, including prisoners of war and their families.

I have specifically verified that quite sizable banking institutions include a page on their official websites listing individuals within protected categories, along with the required documents that a person must provide.

What documents do you need to provide to the bank if a person is in captivity?

Yulia Polekhina: What are we doing? We are approached by a bank demanding repayment of loan obligations. We notify the bank of our intention to suspend cooperation for the period of martial law and within 90 days from the date of its termination, informing them of our affiliation as a borrower or a member of the borrower’s family to a protected category. Copies of supporting documents confirming that the person belongs to this protected category must be provided.

What are these documents?

The application itself. For family members of military personnel and civilians who are in captivity or missing under special circumstances, the information must come from the National Information Bureau, confirming illegal detention or confirmation from the ICRC. Alternatively, the person should be included in the register as someone who has lost contact or is missing.

In fact, there is no exhaustive list of documents that must be provided to confirm that a person is in captivity; you need to provide everything you have. This may include an extract from the register of persons missing under special circumstances, confirmation from the coordination headquarters that the person has been confirmed by the Russian side through the ICRC, or, for military officers, a potential fact of an internal investigation.

In other words, any official document that a person can provide is the basis for a loved one to apply for a suspension of the payment of this loan obligation.

Upon receiving such a notice, the financial institution is obliged to cease communication with the borrower’s family members; it is mandatory. According to current legislation, the bank must comply with this rule. Failure to do so may lead to intervention by the National Bank of Ukraine, acting as a regulator. The National Bank can take measures to influence the offending bank, possibly even revoking its license.

Additionally, we have an organization such as the Ukrainian Chamber of Commerce and Industry, tasked with certifying force majeure or force majeure circumstances. The CCI issued an order recognizing Russia’s military aggression against Ukraine, leading to the introduction of martial law, as extraordinary, unavoidable, and objective circumstances affecting both business entities and individuals under contracts, taxes, and other obligations. Fulfilling contractual obligations is currently impossible due to force majeure. This is also a potential avenue for settling credit obligations under the agreement. Until February 24, the CCI did not accept such documents.

What if a prisoner of war has no relatives and a penalty is charged upon his return from captivity?

Yulia Polekhina: The procedure remains the same. This individual also falls under the category of protected persons, and the bank may not have been aware of their captivity. Therefore, this person needs to provide all necessary documents confirming their time in captivity.

To accomplish this, a person who has returned from captivity must, first and foremost, restore their identity documents. Secondly, they must report to the police, who will certify the fact of their appearance, especially if someone has reported the illegal detention, and not just relatives can report it.

If no criminal proceeding exists, one must be initiated. The person acts as both an applicant and a victim in this case.

Subsequent steps involve various examinations concerning the physical, psychological, and psychiatric condition after torture or captivity.

Afterward, the individual should apply to the interdepartmental commission to establish the fact of deprivation of personal liberty due to the armed aggression of the Russian Federation against Ukraine. However, it is crucial to note that to establish this fact, a person must provide evidence of a violation of the Geneva Convention relative to the Protection of Civilian Persons. If no proceedings have been initiated, it is evident that such evidence will not be available. In the absence of interrogation as a witness, no protocol or information from the investigation department will be collected, unfortunately.

How to restore documents for property under occupation?

Yulia Polekhina: Absolutely all agreements, transactions, and acts issued by the occupation authorities are illegal. Our legislation explicitly states this, and there is also a presidential decree that nullifies all actions of the occupation authorities. Anything endorsed by the occupiers is null and void, requiring no challenge.

I see several options if, for instance, a home is seized or looted during the occupation. I have a client who was detained in the Zaporizhzhia region, not released as part of the Coordination Centre’s activities. While her story is quite interesting, she is aware that her house was robbed, and everything valuable was taken. Despite some colleagues suggesting it makes no sense, I believe it’s necessary to approach law enforcement agencies and provide testimony. We have initiated a criminal investigation into the burglary.

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Read also: Why do the occupiers release some prisoners and keep others — the story of a released prisoner from Kherson

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Firstly, restoring title documents is essential. There are nuances to consider. Generally, in case of lost title documents, a duplicate can only be issued by the entity that originally issued the document. If, for instance, a sale and purchase agreement were executed with a public notary in Melitopol, theoretically, we should contact them for a duplicate. However, this is not feasible. The only reason a duplicate cannot be issued by the original entity is if it has been liquidated or terminated. In such cases, the document is issued by a legal successor or a specific archival institution.

Sometimes, we may not recall who certified our documents. In such cases, we can obtain this information by ordering a paid information certificate from the State Register of Real Property Rights, costing almost UAH 40 and can be ordered through Diia. This certificate may contain complete data if the property was registered after 2013. For archival data from the register of rights functioning before 2013, or data on real estate, which might not be available, contacting the archives of the Bureau of Technical Inventory before 2013 is recommended.

If this proves impossible, filing a claim with the court for the recognition of ownership of real estate or establishment of a legal fact is an option.

While there are general recommendations on preserving Ukrainian documents and transferring them to safe places for storage, this is not always possible.

It is crucial to note that relatives of a prisoner cannot take action on the restoration of property documents unless they possess a power of attorney in advance. However, armed with information about the seized property, they can approach the police and initiate a criminal investigation.

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As a reminder, at the fourth meeting of advisers in Davos, the Ukrainian Parliament Commissioner for Human Rights, Dmytro Lubinets, urged the international community to urgently consolidate efforts to return home all Ukrainians illegally taken by Russian occupiers.

The Ombudsman stressed that the task is to return home all Ukrainians who were taken prisoners of war and illegally deported by Russia. Therefore, the international community, he said, ‘must immediately consolidate its efforts in this direction.’ He noted that in Davos, our partners heard the voices of Ukrainian children whom we have brought home, relatives of civilians abducted and illegally detained by Russia. They were shocked by what they heard.

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In times of war, the program «Free our relatives» tells the stories of people, cities, villages, and entire regions that have been captured by Russian invaders. We discuss the war crimes committed by the Kremlin and its troops against the Ukrainian people.

The program is hosted by Igor Kotelianets and Anastasia Bagalika.

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This publication is made possible by the generous support of the American people through the United States Agency for International Development (USAID) in the framework of the Human Rights in Action Program implemented by Ukrainian Helsinki Human Rights Union. Opinions, conclusions and recommendations presented in this publication do not necessarily reflect the views of USAID, the United States Government. The contents are the responsibility of the authors.

USAID is the world’s premier international development agency and a catalytic actor driving development results. USAID’s work demonstrates American generosity, and promotes a path to recipient self-reliance and resilience, and advances U.S. national security and economic prosperity. USAID has partnered with Ukraine since 1992, providing more than $9 billion in assistance. USAID’s current strategic priorities include strengthening democracy and good governance, promoting economic development and energy security, improving health care systems, and mitigating the effects of the conflict in the east.

For additional information about USAID in Ukraine, please call USAID’s Development Outreach and Communications Office at: +38 (044) 521-5753. You may also visit our website: http://www.usaid.gov/ukraine or our Facebook page at https://www.facebook.com/USAIDUkraine.