Different national enforcement procedures in EU Member States often slow down and significantly impede collection in cases of cross-border debt recovery.
The introduction of the European Account Preservation Order ("EAPO") allows creditors to secure collection of their claims in cross-border civil and commercial matters by freezing funds on debtor's accounts in other Member States. Creditors will be able to obtain the EAPO in their Member States and enforce it without the need for additional recognition in the Member State of the debtor's bank accounts.
Regulation (EU) No. 655/2014 of the European Parliament and of the Council on establishment of the procedure for the EAPO will begin to apply starting from 18 January 2017 with the purpose of simplifying cross-border debt recovery in civil and commercial matters ("Regulation").
The Regulation governs new European procedure for securing funds on debtors' bank accounts. The procedure will be implemented alongside the already existing national procedures and enable creditors to request from the competent courts in their Member States to issue the EAPO, which the creditors will then be able to enforce in other Member States without the need for additional recognition. The competent court in the issuing state will be obliged to decide on the issuance of the EAPO within five to ten days from the date a request is submitted, depending on the circumstances of the matter.
Creditors which are not aware of the existence of debtor's bank accounts in other Member States may file a request with the court from which they have requested issuance of the EAPO to provide them with the information on the debtor's bank accounts. The courts should obtain such information from a corresponding authority designated for that purpose in other Member States.
After the competent court in the Member State of issuance has issued the EAPO, the entity competent for securing funds on the debtor's accounts in the state of enforcement is obliged to enforce such EAPO and freeze the debtor’s account up to the amount provided in the EAPO. In order to avoid the possible use of funds on the bank account by the debtor, the debtor will be notified of the freezing of funds on the bank account only after the EAPO has been executed.
The process of enforcement of the EAPO will be executed through the procedure applied within the national framework for equivalent national orders of the Member States. To date, not all the Member States have adopted the necessary national legislation necessary for enforcement of the EAPO. In that respect, some Member States have not yet determined the local authority that will be in charge of the EAPO enforcement and providing information about debtors' bank accounts. Below is the list of authorities that have been designated to assume the role:
▪ Austria: District Court Vienna Inner City (Bezirksgericht Innere Stadt Wien)
▪ Bulgaria: Ministry of Justice and enforcement officers (Ministerstvo na pravosadieto i sadebni izpalniteli)
▪ Croatia: Croatian Financial Agency (Financijska agencija)
▪ Hungary: Hungarian Association of Court Bailiffs (Magyar Bírósági Végrehajtói Kar)
▪ Slovak Republic: Slovak District court of Banska Bystrica (Okresný súd Banská Bystrica).
Implementation of the EAPO will not cause abandonment of the existing national procedures for securing funds on the account, but instead, the creditors in cross-border matters will have the option of choosing between the EAPO and the existing national procedure. The unified procedure of securing funds on accounts for enforcement of claims in cross-border commercial and civil matters should certainly enable faster, simpler, economical and a more accessible way of debt collection for creditors, and a more secure environment for conducting business operations for entities doing business in other Member States.