Last updated: 26 April 2018
The development of commercial relations increases the difficulties encountered by creditors in collecting their claims from debtors in other EU countries.
To mitigate this risk, the EU has adopted Regulation no. 655/2014 of 15 May 2014 establishing a European Account Preservation Order procedure. Through this procedure and under certain conditions, the accounts of a debtor can be preserved at the creditor’s request. This Regulation also applies in Romania as from 18 January 2017.
Scope and field of application
A creditor from an EU Member State may obtain a Preservation Order, whereby the bank accounts of its debtor from another EU member State are blocked. Thus, the debtor is prevented from withdrawing or transferring the amount of money mentioned in the Order.
According to the Regulation, “Member State in which the bank account is maintained” means the Member State indicated in the account’s IBAN or, for a bank account which does not have an IBAN, the Member State in which the bank with which the account is held has its head office or, where the account is held with a branch, the Member State in which the branch is located.
The Preservation Order applies to pecuniary claims in civil and commercial matters. It does not extend, in particular, to revenue, customs or administrative matters or to the liability of the State for acts and omissions in the exercise of State authority.
Procedure for obtaining the preservation order
Creditors can obtain a Preservation Order in the two following cases:
• Before the creditor initiates proceedings in a Member State against the debtor on the substance of the matter, or at any stage during such proceedings up until the issuing of the judgment or the approval or conclusion of a court settlement;
• After the creditor has obtained in a Member State a judgment, court settlement or authentic instrument which requires the debtor to pay the creditor’s claim.
Depending on the case, jurisdiction to issue the Order belongs to the courts to which the creditor could submit the claim or to the courts that have already rendered a judgement requiring the debtor to pay the creditor’s claim.
The court issues the Preservation Order when the creditor has submitted sufficient evidence to satisfy the court that there is an urgent need for a protective measure because there is a real risk that, without such a measure, the subsequent enforcement of the creditor’s claim against the debtor will be impeded or made substantially more difficult.
The court issues a Preservation Order where the creditor has not yet obtained, in a Member State, a judgment, court settlement or authentic instrument requiring the debtor to pay the creditor’s claim if the following conditions are cumulatively met:
1. The creditor has submitted sufficient evidence to convince the court that he is likely to succeed on the substance of his claim against the debtor;
2. The creditor provides security for a sufficient amount, established by the court on a case-by-case basis.
The court WILL NOT issue the Preservation Order before the creditor provides the security. By way of exception, the court may dispense the creditor from the requirement to provide the security, if it considers that the provision of security is inappropriate in the circumstances of the case.
The Preservation Order is issued promptly, between 5 and 10 days from the submission of the application...
ADVANTAGES OF THE PROCEDURE
Some of the advantages of this preventive measure are:
• The fact that it takes place without the notification of the debtor and without a prior hearing thereof, which preserves the element of surprise and assures the creditor that the debtor will take no action to affect the funds available to him;
• The procedure is automatically recognized in all EU member States and the creditor is not required to follow any other special procedures;
• The procedure is enforceable and there is no need for an approval of its enforcement.
Therefore, a bank that has received a Preservation Order may apply it immediately and order, as the case may be:
• That the amount for which the Preservation Order was issued is not withdrawn or transferred by the debtor or any of its agents;
• If national law provides this option, the bank may transfer the amount in question into an preventive seizure account.