Introduction: Transfer of Property in Kind to State Ownership
A highly specific and one of the most significant mechanisms within enforcement proceedings is the transfer of property in kind directly to state ownership. This rigid procedure is executed in cases where the state (typically represented by the tax authority or another state agency) holds a substantial financial claim against the debtor, but the forced realization of the seized property at a public auction, even after multiple attempts, concludes entirely without success. In such challenging circumstances, in order to successfully cover the outstanding debt, the legislation explicitly provides for the direct, physical transfer (in kind) of the property to the state. This powerful mechanism is also widely utilized in criminal cases during the mandatory confiscation of property or as part of the rigorous fight against the legalization of illicit income. The entire process is strictly regulated and requires the highly coordinated operational work of numerous state agencies.
What the Service Covers
During the complex process of transferring property in kind to state ownership, the legal service comprehensively covers the robust representation of the debtor or the state institutions themselves throughout highly bureaucratic and legal procedures. The specialized service deeply involves obtaining and legally analyzing the official acts confirming the absolute failure of previous auctions to conclusively establish the lawful grounds for the transfer in kind. Furthermore, the service covers active participation in the precise valuation of the property, since the exact determined value is directly deducted from the existing (e.g., tax) debt. The service also entails strategic communication with the relevant structures of the Ministry of Economy and Sustainable Development (specifically the Property Management Agency), strict control over the execution of acceptance-delivery acts, and guaranteeing the flawless legal registration of the state's ownership rights in the Public Registry as the new legal owner.
Common Scenarios and Practical Examples
In practical terms, the most prevalent scenario involves massive accumulated tax liabilities. A large company accumulates millions of Lari in debt to the state budget, prompting the Revenue Service to place a strict lien on its valuable real estate (such as vast plots of land or an old industrial facility). An initial auction is scheduled, followed by repeated auctions, yet no buyer appears on the market. At this critical juncture, the state officially decides to retain these physical assets in ownership as direct compensation for the debt. A second typical scenario is intrinsically linked to criminal cases—where a court verdict mandates the immediate confiscation of a luxury villa or a fleet of vehicles acquired through corrupt means. The executioner seamlessly ensures the transfer of this property in kind to the National Agency of State Property for subsequent management. A third scenario involves the confiscation of imported goods that severely violated customs regulations, which are then permanently converted into state property.