The European Account Preservation Order (EAPO) Regulation (Regulation (EU) No 655/2014) (the “Regulation”), is a recently introduced EU-wide instrument. It allows a plaintiff to obtain an order preserving a defendant’s bank account across the EU upon proof that the defendant is likely to prevent the enforcement of a future judgment against him. The European Commission initially proposed the EAPO in 2011 and it was finally voted by the European Parliament in 2014. The Regulation will become effective on the 18th of January 2017. The UK and Denmark, have chosen to opt out from the Regulation, meaning that their courts cannot issue such an order, neither do their banks have to follow such an order issued by the courts in other member states.
When can an EAPO be obtained?
The EAPO is solely intended for use in cross-border cases, situations in which the bank account or accounts to be preserved are located in a member state other than the member state of the court that issues the preservation order or the state in which the creditor is domiciled (Articles 2 and 3 of the Regulation). According to Article 5, EAPOs are available to applicants both pre-judgment, i.e. at any time prior to and during proceedings, and after the applicant has obtained a judgment. Jurisdiction to issue an EAPO lies with the courts of the member state that have jurisdiction on the substance of the matter or, when the applicant has already obtained a judgment, with the courts of the member state in which the judgment was issued (Article 6).
The requirements to obtain an EAPO
In order to obtain an EAPO, Article 7 specifies that the applicant must satisfy the court that there is an urgent need for an order because there is a real risk that, without such an order, the subsequent enforcement of the applicant’s claim against the respondent will be impeded or made substantially more difficult.
Additionally, in the case of an application for an EAPO before a judgment is issued, the applicant must also satisfy the court that he or she is likely to succeed on the substance of his or her claim against the respondent. In order to ensure the element of surprise essential to the successful operation of an EAPO, the respondent will not be informed about the application for an order nor be heard or notified prior to its issue and implementation (Article 11). Article 8 sets out the information required to make an application for an EAPO. It includes, inter alia, details concerning the applicant and the respondent, the amount for which an EAPO is sought, a description of the circumstances justifying the request, and all other supporting documentation. Furthermore, a declaration that the information provided by the applicant is true and complete is required. In addition, information identifying the bank where the respondent holds the account to be preserved must be submitted with the application. If this information is not available, the applicant may file a request, pursuant to Article 14, for the obtaining of account information from the designated information authority of the member state in which the applicant believes that the respondent holds an account.
To allow that mechanism to work, the member states are required to make available in their national law one or more methods for obtaining such information. These methods include an obligation on all banks to disclose whether the respondent holds an account with them or giving access to registers where that information is held by public authorities or administrations. Article 12 includes a requirement for the applicant to provide security for an amount sufficient to prevent abuse of the Regulation and to ensure compensation for any damage suffered by the respondent as a result of the order to the extent the applicant is liable for such damage. The court may dispense with this requirement if it considers it inappropriate. Where the applicant has already obtained a judgment, the court may require the applicant to provide security if it considers this appropriate. The effects of an EAPO According to Articles 22 and 23, an EAPO issued in a member state will automatically be recognised and enforceable in the other member states.
The order will be enforced in accordance with the procedures applicable to the enforcement of equivalent national orders in the member state of enforcement. Once the court grants an EAPO, the bank that holds the respondent’s account either prohibits any transfer of the amount of funds that the order specifies or transfers that amount to a separate account dedicated for preservation purposes (Article 24). The Regulation ensures that the preservation of the respondent’s account does not affect amounts which are exempt from seizure under the law of the member state of enforcement, such as amounts necessary to ensure the livelihood of the respondent (Article 31).
Furthermore, Article 32 provides that an EAPO shall have the same rank as an equivalent national order in the member state of enforcement. How are respondents protected? Articles 33 and 35 give to the applicant and the respondent various remedies for the revocation or modification of an issued EAPO. Under Article 33, a respondent may challenge an EAPO by applying for a review of the decision that granted it in the Member State where it was granted, on the grounds that the conditions for granting an EAPO were not met, the order was not properly served, the documents served did not meet the indicated language requirements, preserved amounts exceeding the amount of the order were not released, the claim of the applicant has been fully or partly paid, or a judgment on the substance of the matter dismissed the applicant’s claim.
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