Preservation of bank accounts within the European Union will be simplified via new regime in 2017

June 28, 2016

The court may provide information about the debtor’s bank accounts abroad

New regulation makes cross-border debt recovery in civil and commercial litigation easier on the territory of the member-states.

The cross-border debt collection in civil and commercial lawsuits will be much simplified from January 18th, 2017, when the new Regulation No.655/2014 of the European Parliament and of the Council enters in force. This regulation establishing for the first time a European Account Preservation Order (EAPO) procedure. It will enable usage of effective legal instruments for securing litigation claims, as well for granting effectiveness of enforcement of judgment in situations, where there is bank account of the debtor, maintained in another country-member of the EU. Simply said, it will be easier to freeze foreign bank accounts of the debtor for securing a claim, or for securing judgment debt in relation to prospective execution procedure against the debtor’s assets.

The European accounts Preservation Order procedure in the form of protective measure has been established as alternative method for security, compared to the similar national legal instruments for defense. The role of the issued EAPO is to prevent the eventual intentions of the debtor (personally or acting via authorized by him proxies) to jeopardize the creditor’s interests via eventual transferring or withdrawing funds from their own bank accounts, maintained in another country-member of the EU. Obtaining EAPO is available as an option in all phases of the litigation process – where the creditor would be interested to secure prospective proceedings, as well during a pending lawsuit, and also in cases where court decision (or similar) has already been obtained and the judgment creditor needs to secure its enforcement.

When applying for EAPO, the creditor should present sufficient proofs that there is a real risk for the successful enforcement of the court judgment. When the lawsuit is still pending, the claimant should present also strong evidences leading to the conclusion that it is likely that he/she will reach a decision in their favor. A security in specified amount could be requested by the court prior issuing the order. During the procedure of obtaining EAPO, there are also instruments available to applicants, to receive information about the particular details of the foreign bank accounts, held by the debtor.

The issued European accounts Preservation Order will have direct and effective legal force in the country where the bank account exists, without any need of additional recognition or approval. It is important to note that the EAPO will not apply as an option on arbitration lawsuits, administrative cases, inheritance lawsuits, insolvency procedures, etc. As well this Regulation won’t apply in the United Kingdom and Denmark so freezing bank accounts of debtors held in these two countries won’t be possible under the above procedure. The issued European accounts Preservation Order could help for debt recovery in Bulgaria and in the rest of the countries-members of the European Union: Austria, Belgium, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Lithuania, Latvia, Luxemburg, Malta, Poland, Portugal, Romania, Slovakia, Spain, Sweden and The Netherlands.

In conclusion, in our opinion as practicing litigators, the new procedure will be beneficial for claimants on cross-border cases as it may improve the effectiveness of the litigation procedure in Bulgaria on these cases. The European accounts Preservation Order will be good option for the local creditors, whose debtors reside on the territory of the European Union. Contact us for more information.
*The present article represents only theoretical construction and personal interpretation of its author and it should not be considered, or accepted as any type, or form, of legal advice or legal consultation

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