The new regulation n°655/2014 supporting the creation of a European bank account preservation order procedure came into force on 18 January 2017. This is now enforceable throughout the Member States of the European Union, excluding the United Kingdom and Denmark.
This regulation is binding and directly applicable in the Member States, like every European regulation.
It is an additional and optional means available to creditors, as they still have recourse to other national procedures for the same purpose.
A. Conditions
The following conditions must be met to obtain an order allowing the preservation order of a bank account:
- cross-border litigation: the bank account targeted by the order is open in another Member State than the one in which the request has been filed or the jurisdiction and the bank account are located in another Member State than the one where the creditor is domiciled;
- civil or commercial debt (except debts relating to marriage or inheritance plans, wills or estate, debts of a debtor against which a bankruptcy or a liquidation procedure has been filed, or debts relating to social security and arbitration);
- indisputable nature of the debt (if the request is not based on an enforceable title);
- threats on collection: later execution may be stopped or made noticeably more difficult; and
- no parallel request in other members’ jurisdictions.
The regulation allows a cross-border seizure to be obtained at any stage of the principal procedure, meaning that a protective attachment order is available before, during or even after a substantive proceeding.
B. Procedure
The procedure for obtaining a European protective attachment is not contradictory. Therefore, the debtor is only informed once the measurement has been effected, so that he can’t arrange for the disappearance of the funds.
Where to submit the application?
Without an enforceable title (a legal decision or authentic act, for example):
- in the substantive jurisdiction according to the Brussels Ibis Regulation;
- if the debtor is a consumer that has a contract outside his professional activity, before the court of his Member State of residence.
With an enforceable title:
- in the jurisdiction of the Member State in which the decision has been taken;
- where the judicial settlement has been approved or where an authentic deed has been concluded.
How to submit the application?
The order may be requested by means of a multilingual standard form.
If the creditor has not yet obtained an enforceable title, the creation of a guarantee by the creditor is the rule, except for extraordinary situations determined by the judge. The regulation doesn’t specify the amount of the guarantee required, but its purpose being to prevent the damage that would be done to the debtor in the event of a wrongful seizure, its amount can be in practice as high as the debt.
What are the details to be respected?
The jurisdiction has to rule on the request for seizure in a very short time frame:
- five days when a title has already been obtained;
- otherwise, 10 days;
- Without these deadlines being subject to a sanction.
If the jurisdiction refuses, the creditor will be able to appeal the decision within 30 days following the denial notification, and will do this before the competent appeal authorities in the Member State concerned.
The Bank has the option of:
- a three-day deadline to declare if and in what measure the order has allowed the protective seizure of the debtor’s funds;
- using the declaration form.
The creditor is obliged to:
institute a substantive proceeding:
- within 30 days of the making of the request;
or
- within 14 days of the issuance of the order, if that date is later;
ensure the release of the funds exceeding the amount that is stated in the order.
C. Right to information
The creditor must state the account number to be seized in his order’s request. Consequently, the ruling establishes a mechanism allowing the creditor to request that all necessary information is obtained by the authority in charge of the execution in this Member State. The practical aspects are left to the Member States.
D. Impact
Once the order has been issued, it will be considered as identical to an equivalent national measure and will be as such directly enforceable.
The debtor can then challenge the seizure in the substantive jurisdiction or in the enforcement jurisdiction where there is serious infringement of his rights (e.g. the seized goods are not seizable or the seizure clearly affects the public policy of the enforcing Member State).
The seizure prevents not only the debtor himself from disposing of the assets on his account but also other authorized people from arranging transfers from this account, such as a standing order or the use of a credit card.
Finally, it must be stated that the ruling includes several safeguard clauses benefiting the debtor and especially one requiring the creation of a guarantee for the creditor.
In addition, the debtor can prevent the seizure by providing an appropriate substituting collateral according to the law of the Member State which issued the order.
