The European Account Preservation Order for debt recovery between EU countries
Regulation (EU) No 655/2014 — European Account Preservation Order
It aims to facilitate debt recovery between EU countries in civil and commercial matters.
It establishes a new procedure allowing a court in one EU country to freeze funds in the bank account of a debtor in another EU country.
A European procedure is established whereby a creditor is able to obtain a European Account Preservation Order (EAPO) that blocks funds held by the debtor in a bank account or accounts in another EU country(ies).The regulation has applied since 18 January 2017 with the exception of its Article 50, which has applied since 18 July 2016. Article 50 relates to the information to be supplied by EU countries, such as the courts that they designate to issue (Article 6(4)) and the authorities to enforce EAPOs.
Scope
The EAPO is available to citizens and businesses:
in cases between EU countries, i.e. when the account, at the date of application for an EAPO, is held in an EU country other than where the creditor is domiciled or the court seized is based;
as an alternative to national procedures, but does not replace them.
It applies to financial claims in civil and commercial matters, excluding the following matters:
revenue, customs or administrative matters and social security;
rights in property arising out of marriage or equivalent relationship, and wills and succession;
claims against a debtor who is the object of bankruptcy or insolvency proceedings, judicial arrangements, compositions or other similar proceedings.
Some categories of specially protected bank accounts are also excluded.
The EAPO is not available for creditors or bank accounts based in Denmark or the United Kingdom (1).
Procedure for obtaining an EAPO
The procedure is open before initiating proceedings on the substance of the matter against the debtor, during the proceedings or after obtaining a judgment, court settlement or authentic instrument requiring the debtor to pay.
The court competent to issue an EAPO is normally one that is competent to rule on the substance of the matter. Where the debtor is a consumer, the court competent to issue an EAPO to secure a claim relating to the consumer’s contract is the court of the EU country where the debtor is domiciled.
In all cases, the creditor must provide evidence to convince the court that there is a real risk that justifies the need to freeze the debtor’s account. If the creditor requests an EAPO before obtaining a judgment on the substance of the matter, sufficient evidence should also be given to the likely success of the substance of the claim.
A specific form is to be used in order to apply for an EAPO, together with all supporting documents.
Short time limits are set by which the different steps in the procedure must be completed; these vary depending on whether the creditor has already obtained a judgment or not.
The creditor has the right to appeal against a refusal to issue an EAPO.
In order to ensure the surprise effect and the usefulness of the EAPO, the debtor is not informed prior to its implementation.
The creditor who does not know the debtor’s account information can, under certain conditions, request the court to obtain account information from designated authorities in the EU country of enforcement.
Recognition, enforceability and enforcement of the EAPO
An EAPO issued in an EU country in accordance with the regulation should be recognised and enforceable in another EU country without any special procedure or declaration of enforceability.
There is an obligation on the bank to declare, by means of a specific form, whether the EAPO has led to the preservation of any of the debtor’s funds.
The creditor has a duty to request the release of any funds preserved that exceed the amount specified in the EAPO.
Some amounts may be exempt from seizure under the law of the country of enforcement, i.e. amounts necessary to ensure the livelihood of the debtor and of their family.
Safeguards for the debtor
In order to counterbalance the absence of a prior hearing, there are the following safeguards for the debtor against the abusive use of the EAPO:
remedies — including a right of appeal — to be able to challenge the EAPO as soon as the debtor is informed of the blocking of their accounts; and
rules on the provision of a security by the creditor — to ensure that the debtor can be compensated for any damage caused by the EAPO:
rules on the creditor’s liability for any damage caused to the debtor by the EAPO due to an error on the creditor’s behalf.
Forms
There are nine dedicated EAPO forms in total. Their content is set out in Implementing Regulation (EU) 2016/1823.
General rules
The regulation also addresses various related matters, including legal representation, court fees, costs supported by the banks, fees charged by authorities, data protection and language of documents.
The regulation does not affect the application of a number of related acts, such as Regulation (EC) No 1393/2007 (on the service of documents) and Regulation (EC) No 1206/2001 (on the taking of evidence).
BACKGROUND
The regulation follows a Green Paper on improving the efficiency of enforcing judgments in the EU. In it, the European Commission described how the fragmentation of national rules on enforcement negatively affected debt collection within the EU, and observed that in practice a creditor seeking to recover a monetary claim in Europe will most commonly try to do so by taking enforcement actions against the debtor’s bank account, and that such procedures exist in most EU countries.
DOCUMENTS
Regulation (EU) No 655/2014 of the European Parliament and of the Council of 15 May 2014 establishing a European Account Preservation Order procedure to facilitate cross-border debt recovery in civil and commercial matters (OJ L 189, 27.6.2014, pp. 59-92)
Commission Implementing Regulation (EU) 2016/1823 of 10 October 2016 establishing the forms referred to in Regulation (EU) No 655/2014 of the European Parliament and of the Council establishing a European Account Preservation Order procedure to facilitate cross-border debt recovery in civil and commercial matters (OJ L 283, 19.10.2016, pp. 1-48)
Regulation (EC) No 1393/2007 of the European Parliament and of the Council of 13 November 2007 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (service of documents), and repealing Council Regulation (EC) No 1348/2000 (OJ L 324, 10.12.2007, pp. 79-120)
Successive amendments to Regulation (EC) No 1393/2007 have been incorporated into the original document. This consolidated version is of documentary value only.
Green Paper on improving the efficiency of the enforcement of judgments in the European Union: the attachment of bank accounts (COM(2006) 618 final, 24.10.2006)
Council Regulation (EC) No 1206/2001 of 28 May 2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters (OJ L 174, 27.6.2001, pp. 1-24)
European order for payment procedure
Regulation (EC) No 1896/2006 — creating a European order for payment procedure
The regulation creates a European order for payment procedure for claims not contested by the defendant. This simplifies, speeds up and reduces the costs of litigation in cases involving more than one EU country.
It also permits the free circulation of European orders for payment which are recognised and enforced in all EU countries.
It applies to all EU countries except Denmark.
Scope
The European order for payment (EOP) procedure applies to all civil and commercial matters in cases where at least one of the parties lives in an EU country different from the one where the application for an order is made.
The procedure does not apply to certain issues:
revenue, customs or administrative matters,
state liability for acts and omissions in the exercise of state authority,
matrimonial property regimes,
bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, and judicial arrangements,
social security,
claims arising from non-contractual obligations, unless there was an agreement between the parties or an admission of debt; or they relate to liquidated debts arising from joint ownership of property.
Application process
The regulation includes a standard form to apply to a court for an EOP.
The claim must be for a specific amount which is due at the time the application is submitted.
The jurisdiction of courts is determined by the rules set out in Regulation (EC) No 1215/2012.
The court to which an application has been made considers whether the various conditions have been met (the cross-border nature of the case in civil and commercial matters, the jurisdiction of the court, etc.) as soon as possible, as well as whether the claim appears to be well-founded.
The court must inform the applicant of its reasons for rejecting a claim. In that case, there is no right of appeal, but the claimant may make a new application for an EOP or use another procedure available under the law of an EU country.
Issuing an EOP
If the conditions are met, the court issues the EOP as soon as possible and normally within 30 days of the lodging of the application.
An EOP is issued solely on the basis of the information provided by the claimant if the claim appears to be well-founded.
Unless the defendant lodges a statement of opposition with the court issuing it, it is automatically recognised and enforced in other EU countries without any further possibility of opposing its recognition.
Enforcement procedures are governed by the national law of the EU country in which the enforcement of the EOP is requested.
Serving an EOP on a defendant
An EOP is served on a defendant in accordance with the national law of the country in which it is served. The possible methods of serving the EOP, either with or without proof of receipt by the defendant, are set out in the regulation.
Opposing an EOP
The defendant may lodge a statement of opposition with the court that issued the order for payment. This must be sent within 30 days of service of the EOP.
When a defendant lodges a statement of opposition, ordinary civil proceedings continue before the competent courts of the EU country in which the EOP was issued, unless the claimant does not want to continue proceedings.
The defendant may apply for a review of the EOP before the competent court after the expiry of the 30-day time limit for lodging a statement of opposition, if:
the order for payment was served without acknowledgement of receipt by the defendant and not in sufficient time to prepare a defence,
the defendant was prevented from objecting to the claim by reason of force majeure or due to extraordinary circumstances,
the order for payment was clearly wrongly issued.
If the court rejects the defendant’s application, the EOP remains in force. If, on the other hand, the court decides that the review is justified, the EOP becomes null and void.
It entered into force on 12 December 2008.
ACTS
Regulation (EC) No 1896/2006 of the European Parliament and of the Council of 12 December 2006 creating a European order for payment procedure (OJ L 399, 30.12.2006, pp. 1–32).
Successive amendments to Regulation (EC) No 1896/2006 have been incorporated in the basic text. This consolidated version is of documentary value only.
Report from the Commission to European Parliament, the Council and the European Economic and Social Committee on the application of Regulation (EC) 1896/2006 of the European Parliament and of the Council creating a European Order for Payment Procedure (COM(2015) 495 final of 13.10.2015)