A new tool for the protection of creditors inside the EU finally came into force on 18 January2017 – EU Regulation no. 655/2014, dated 15 May 2014 – which enables creditors to obtain a European Account Preservation Order (EAPO) in order to seize deposits in a debtor’s bank account held in a different Member State.
Such procedure is aimed at protecting credit in cross-border transactions. Credit deriving from matrimonial relationships, wills, succession and vis a vis insolvent companies are excluded, as well as credit disputed in arbitration.
The EAPO can be issued:
- before the beginning of a proceeding on the merits or during its course. In such instance, the creditor shall prove i) that an urgency measure is necessary to recover the credit and that ii) the claim against the debtor may be welcomed on the merits and iii) provide for a guarantee;
- after the Court of the Member State issues a decision which orders the debtor to pay. In this case, the creditor must prove that an urgency measure is necessary in order to recover the credit.
The competence for issuing an EAPO is set as follows:
- if the creditor has not yet obtained a decision on the merits, the competent Court is the one that would be competent to decide on the merits;
- if the debtor is a consumer, the competence is reserved to the Court of domicile of the debtor;
- if the creditor already obtained a decision on the merits, the EAPO shall be requested to the Court of the Member State in which such decision was issued.
The procedure is very fast and simple:
- the judge issues a decision within five to ten working days (depending on whether or not the creditor already received a decision on the merits);
- if the request is rejected, the creditor can appeal the decision within thirty days;
- when issued, the EAPO is served to the bank that shall freeze the correspondent amount. Within three working days, the bank shall serve a declaration stating that the sums requested (if available) were blocked;
- afterwards, the debtor will be served with the EAPO, the relevant documents and the bank’s declaration. The debtor and third parties can file an appeal.
The procedure described above should be quick, however it will be up to the authorities of the Member States to comply with the strict deadlines provided for by the Regulation. Moreover, if no information regarding the debtor’s bank accounts is known to the creditor, a request can be made to the competent authority in order to identify the bank and the bank accounts. This tool will make it easier for creditors to protect their interest vis a vis foreign debtors, avoiding the slowness and bureaucracy of the enforcement proceedings of foreign decisions.