December 12, 2016
In early 2017 the creditors around the EU will have a new tool in their arsenal for cross-border debt recovery – the European Account Preservation Order or the EAPO. The Regulation No.655/2014 of the European Parliament and of the Council of 15 May 2014 establishing a European Account Preservation Order (the Regulation) will apply as of 18 January 2017.
The EAPO is a transnational protective measure aimed at attaching the bank accounts of the debtor to secure the enforcement of the subsequent claim of the creditor, i.e. to prevent the debtor from hiding the funds, from which further recovery of the debt could be made. Upon the date of application of the Regulation, a creditor will be able to obtain the EAPO to preserve the accounts of the debtor located in another Member State of the EU. For instance, a creditor is planning to raise a claim in Latvia against a debtor, which maintains a bank account in Italy. In this case, the creditor may obtain the EAPO in Latvian courts to preserve the accounts of the debtor in Italy. Once issued, the EAPO will be immediately recognised and enforceable in the other Member States without any special formalities.
Previously, creditors wishing to secure their claim in the form of attaching the debtor’s bank accounts in another Member State were facing difficulties caused by the differences in the laws of the Member States relating to provisional and protective measures. The EAPO, however, resolves only some of the common problems in cross-border provisional measures around the EU because, as the name of the Regulation suggests, it relates to the attachment of funds only.