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Preservation of bank accounts

Current fragmentation of national rules on enforcement severely hampers debt collection within the EU. Creditors seeking to enforce a civil court order in another EU country are confronted with different legal systems, procedural requirements and language barriers which entail additional costs and delays.

An obstacle for the European single market

These problems constitute an obstacle for the proper functioning of the European single market and may distort competition among businesses operating in EU countries.

Moreover, late payment and non-payment jeopardise the interests of businesses and consumers alike.

In practice, a creditor seeking to recover a monetary claim in Europe will most commonly try to do so by taking enforcement actions (attachment or preservation orders) against his/her debtor's bank account.

Such procedures exist in most EU countries and, if working efficiently, can be a powerful weapon against recalcitrant or fraudulent debtors.

However, under existing EU instruments, there is no bank attachment or preservation order which can be enforced throughout the EU.

Improving the efficiency of enforcing judgments in the EU

Seeking a remedy to this situation, the Commission has adopted a Green Paper on improving the efficiency of enforcing judgments in the EU, and more specifically the attachment of bank accounts.

In the Green Paper the Commission describes the problems inherent to the current situation and proposes the creation of a European system for the attachment/preservation of bank accounts as a possible solution.

The European Account Preservation Order (EAPO)

Regulation 655/2014 establishing a European Account Preservation Order procedure ("EAPO") establishes a new uniform European procedure for the preserving of bank accounts, which will allow creditors to preserve the amount owed in a debtor's bank account located in the EU. This order can be crucial in debt recovery proceedings because it would prevent debtors from removing or dissipating their assets during the time it takes to obtain and enforce a judgment on the merits.

The Regulation provides common rules relating to jurisdiction, conditions and procedure for issuing an order, how it should be enforced by national courts and authorities, the  remedies for the debtor and other elements of defendant protection.

The EAPO procedure allows for a single order to be made in the courts of one Member State which would be capable of 'freezing' any bank account of a debtor in any Member State. It thus makes it less cumbersome, lengthy and costly for a creditor to obtain provisional measures to preserve assets in bank accounts of their debtor located in another Member State.

The EAPO is available to the creditor in cross-border cases, as an alternative to instruments existing under national law.

The new European order allows creditors to preserve funds in bank accounts under essentially the same conditions in all Member States. The EAPO would be issued in an ex parte procedure, that is, without the debtor's knowledge. This would have a “surprise effect” which is essential for the effectiveness of the order– if the debtor is warned that the creditor wants to freeze his accounts, chances are that the money will have gone elsewhere by the time the order is issued and implemented.

The creditor can apply for the EAPO prior to obtaining a judgment on the merits of the case or when he has already obtained a judgment, court settlement or authentic instrument requiring the debtor to pay the creditor's claim. 

An important element of the Regulation which will make it easier for creditors to recover their claims is an access to information about bank accounts. If the creditor does not know with which bank the debtor holds an account in a certain Member State, he may use, under certain conditions, a special procedure for obtaining information about the account of the debtor.