European Cross-Border Debt Recovery: European Account Preservation Order Procedure Enters into Force
On 18 January 2017, Regulation 655/2014 of 15 May 2014 establishing a European Account Preservation Order procedure to facilitate cross-border debt recovery in civil and commercial matters (the EAPO Regulation) entered into force.
The EAPO Regulation allows a creditor, domiciled in one Member State, to request the courts of a Member State to issue a European Account Preservation Order (the EAPO). This order preserves the funds held by a debtor in a bank account located in another Member State and prevents a debtor from jeopardising the creditor’s claim by transferring or withdrawing those funds.
The application for an EAPO should be made by a creditor through a standard multilingual form filed before, during or after the legal proceedings have taken place. The creditor must file his application before the courts of the Member State which either had jurisdiction to rule on the substance of the case or which rendered the judgment, the court settlement or the authentic instrument which serve as the basis for the EAPO. Importantly, however, if the debtor is a consumer, jurisdiction to issue the EAPO only lies with the courts of the Member State in which the debtor is domiciled.
In order to be successful, a requesting creditor will need to show that there is an urgent need to preserve the funds. In the case where the creditor has not yet obtained a judgment, a court settlement or an authentic instrument which guarantees the authenticity of the claim, the creditor will also have to show that he is likely to succeed on the substance of his claim against the debtor. In addition, if the creditor has applied for an EAPO before initiating proceedings on the substance of the matter, he must initiate such proceedings within 30 days of the date on which he lodged the application, or within 14 days of the date of the issue of the EAPO (whichever date is the later).
The court reviewing an application for an EAPO will have to issue its decision on whether to grant the EAPO by the fifth working day following the application. However, in cases where the creditor has not yet obtained a judgment, a court settlement or an authentic instrument relating to the substance of the case, the court will have ten working days, following the application, to issue its decision.
Importantly, the procedure leading to the issuance of an EAPO is conducted through ex-parte proceedings, without the debtor being notified of the existence of the application made by the creditor.
Once the EAPO has been issued by the relevant court, the enforcement procedure varies subject to the Member State in which the enforcement is sought. Each Member State has appointed an authority responsible for the enforcement of the EAPO. In Belgium, only bailiffs act as the competent authority to address the EAPO to the relevant bank and serve it on to the debtor.
The EAPO procedure is applicable in all Member States of the European Union, with the notable exceptions of Denmark and the United Kingdom which have both opted-out of the EAPO Regulation.