Presentation of EU Regulation 655/2014
Toolkit on the European Account Preservation Order procedure: Presentation of EU Regulation 655/2014
1. Source
E-justice portal
2. Presentation
On 27 June 2014 was published in the Official Journal of the European Union, the Regulation (EU) no 655/2014 of the European Parliament and of the Council of 15 May 2014 establishing a European Account Preservation Order procedure to facilitate cross-border debt recovery in civil and commercial matters.
This Regulation entered into force on the 18th of January 2017 in the Member States, except Denmark, Ireland and the United Kingdom.
Before this Regulation, procedural rules concerning enforcement were exclusively dealt with by the domestic laws of the Member States of the European Union.
The regulation concerning cross-border debt collection establishes a European Account Preservation Order Procedure, which is autonomous and with this Regulation is created a real shared enforcement area which signs the beginning of the European Judicial Law.
3. Legislation
The text of the Regulation is available here.
Commission Implementing Regulation (EU) 2016/1823 of 10 October 2016 establishing the forms referred to in Regulation (EU) No 655/2014 forms is available by clicking on this link.
Scope of the Regulation
Toolkit on the European Account Preservation Order procedure: Scope of application
1. Substantive scope (article 2)
This Regulation applies to pecuniary claims in civil and commercial matters in cross-border cases.
Are excluded from the scope of the regulation:
- Matrimonial relationship;
- Successions;
- Revenue, customs or administrative matters or to the liability of the State;
- Bankruptcy proceedings, social security, arbitration.
The Regulation also does not apply to bank accounts which are immune from seizure under the law of the Member State in which the account is maintained nor to accounts maintained in connection with the operation of any system as defined in point (a) of Article 2 of Directive 98/26/EC of the European Parliament and of the Council and to bank accounts held by or with central banks when acting in their capacity as monetary authorities.
2. Geographical scope (article 3)
2.1. Notion of cross-border dimension
The procedure applies only to matters having cross-border implications.
Article 3 defines cross-border litigation as a case in which the bank account or accounts to be preserved by the Preservation Order are maintained in a Member State other than:
- The Member State of the court seized of the application for the Preservation Order pursuant to Article 6; or;
- The Member State in which the creditor is domiciled.
2.2. Relevant moment for determining whether a case is a cross-border caseArticle 3.2 of the Regulation specifies that the date on which the application for the Preservation Order is lodged with the court having jurisdiction to issue the Preservation Order is the relevant moment to determine whether litigation is or not a cross-border case.
Procedure to obtain a Preservation Order
Toolkit on the European Account Preservation Order: Procedure
1. Jurisdiction (article 6)
1.1. Preservation Order delivered before obtaining a judgment, court settlement or authentic instrumentIn such a case, the preservation order is requested during a judicial procedure and article 6 specifies that jurisdiction shall lie with the courts of the Member State which have jurisdiction to rule on the substance of the matter in accordance with the relevant rules of jurisdiction applicable (See Regulation EU 1215/2012).
According to Paragraph 2 of the Regulation there is an exception when the debtor is a consumer who has concluded a contract with the creditor for a purpose which can be regarded as being outside the debtor’s trade or profession. In this sole hypothesis, jurisdiction shall lie only with the courts of the Member State in which the debtor is domiciled.
1.2. Preservation Order delivered after obtaining a judgment, court settlement or authentic instrument
If the creditor has already obtained a judgment, court settlement or authentic instrument, jurisdiction to issue a Preservation Order for the claim shall lie with the courts of the Member State in which the judgment was issued or the court settlement was approved or concluded.
2. Conditions for issuing a Preservation Order (article 7)
2.1. Urgency
The creditor has to prove that there is an urgent need for a protective measure in the form of a Preservation Order.
The risk should exist that without a Preservation Order the debt collection may be impeded or made substantially more difficult.
2.2. Evidence
The creditor has to submit sufficient evidence to satisfy the court that he is likely to succeed on the substance of his claim against the debtor.
However, where the creditor has already obtained a judgment, court settlement or authentic instrument, these elements are proven by the decision he obtained itself.
3. Application for a Preservation Order (article 8)
Application shall be lodged using a multilingual standard form. This form contains many elements listed at article 8 of the regulation such as information about the parties, about the court, about the bank but also evidences, information about the procedure, about the debt. The idea is to analyse the seriousness of the request in order to avoid abuses.
According to article 41 of the Regulation, the creditor can fill in the form on his own but this might create problems considering the complexity of the application.
The claimant shall join to the application all the supportive documents and, if he has already obtained a judgment, court settlement or authentic instrument, a copy of this document with the elements assessing its authenticity.
The application and the relevant documents may be sent by any means of communication, including electronic, which are accepted under the procedural rules of the Member State in which the application is lodged.
4. Taking of evidence (article 9)
If the court considers that the evidence provided is insufficient, it may, where national law so allows, request the creditor to provide additional documentary evidence.
5. Initiation of proceedings on the substance of the matter (article 10)
The Regulation deals with two hypotheses:
- The procedure has been started at the date where the document instituting the proceedings is submitted to the court;
- The procedure is considered as started if the document has to be served before being lodged with the court, at the time when it is received by the authority responsible for service, provided that the creditor has not subsequently failed to take the steps he was required to take to have the document lodged with the court.
Article 10 of the Regulation specifies that where the creditor has applied for a Preservation Order before initiating proceedings on the substance of the matter, he shall initiate such proceedings and provide proof of such initiation to the court with which the application for the Preservation Order was lodged within 30 days of the date on which he lodged the application or within 14 days of the date of the issue of the Order, whichever date is the later.The creditor shall also give the evidence to the jurisdiction. Otherwise, the Preservation Order shall be revoked or shall terminate and the parties shall be informed accordingly.
6. Ex parte procedure (article 11)
It is important to note that the procedure is not contradictory. The idea is to benefit from the surprise effect and thus to protect the efficiency of the procedure.
7. Security to be provided by the creditor (article 12)
7.1. Preservation Order in a case where the creditor has not yet obtained a judgment, court settlement or authentic instrument
Where the creditor has not yet obtained a judgment, court settlement or authentic instrument, the court shall require the creditor to provide security for an amount sufficient to prevent abuse of the procedure.
The judge shall inform the creditor of the amount required and of the forms of security acceptable under the law of the Member State in which the court is located. It shall indicate to the creditor that it will issue the Preservation Order once security has been provided.
However, exceptionally, the judge may dispense with the provision of security.
7.2. Preservation Order in a case where the creditor has already obtained a judgment, court settlement or authentic instrument
Where the creditor has already obtained a judgment, court settlement or authentic instrument, the court may, before issuing the Order, require the creditor to provide security if it considers this necessary and appropriate in the circumstances of the case.
The European Account Preservation Order
Toolkit on the European Account Preservation Order: The Order
1. Decision on the application for the Preservation Order (article 17)
As soon as the court receives the request, it checks if the conditions and requirements of the regulation are fulfilled.
Where the creditor has not provided all the information the court may, unless the application is clearly inadmissible or unfounded, give the creditor the opportunity to complete or rectify the application within a period of time to be specified by the court.
If the creditor fails to complete or rectify the application within that period, the application shall be rejected.
Where all the conditions are fulfilled, the jurisdiction delivers the European Account Preservation Order in the amount justified by the evidence given by the creditor.
The Order may not under any circumstances be issued in an amount exceeding the amount indicated by the creditor in his application.
The decision on the application shall be brought to the notice of the creditor in accordance with the procedure provided for by the law of the Member State of origin for equivalent national orders.
2. Time-limits for the decision on the application for a Preservation Order (article 18)
2.1. The creditor has not yet obtained a judgment, court settlement or authentic instrument
Where the creditor has not yet obtained a judgment, court settlement or authentic instrument, the court shall issue its decision by the end of the tenth working day after the creditor lodged or, where applicable, completed his application.
2.2. The creditor has already obtained a judgment, court settlement or authentic instrument
Where the creditor has already obtained a judgment, court settlement or authentic instrument, the court shall issue its decision by the end of the fifth working day after the creditor lodged or, where applicable, completed his application.
2.3. Extension of the delay
In three cases, the court can decide to issue its decision after the 5 or 10 days period:
- When it is necessary to proceed to hearings of the creditor or of witnesses;
- When the creditor has to provide security, the court shall issue its decision without delay once the creditor has provided the security required;
- When a request for the obtaining of account information was made, the court shall issue its decision without delay once it has received the information provided that any security required has been provided by the creditor by that time.
3. Form and content of the Preservation order (Article 19)
3.1. Form
The order is issued using the appropriate form. Commission Implementing Regulation (EU) 2016/1823 of 10 October 2016 (available by clicking on this link) contains all the standard forms necessary for the application of the Regulation creating the European order for the attachment of bank accounts
Where the Preservation Order concerns accounts in different banks, a separate form shall be filled in for each bank.
3.2. Content
The form shall consist of two parts:
3.2.1. Part A
Part A, to be provided to the bank, the creditor and the debtor, shall include:
- The name and address of the court and the file number of the case;
- Details of the creditor;
- Details of the debtor;
- The name and address of the bank concerned by the Order;
- If provided the account number of the debtor;
- If relevant the account number obtained by means of a request pursuant to Article 14;
- The amount to be preserved by the Order;
- An instruction to the bank to implement the Order;
- The date of issue of the Order;
- In the event of voluntary payment, the account number of the creditor where the amount can be transferred;
- Information on where to find the electronic version of the form to be used for the declaration
3.2.2. Part B
Part B, to be provided to the creditor and the debtor in addition to the information pursuant to Part A:
- A description of the subject matter of the case and the court’s reasoning;
- The amount of the security provided by the creditor, if any;
- Where applicable, the time-limit for initiating the proceedings on the substance of the matter;
- Where applicable, an indication as to which documents must be translated;
- Where applicable, an indication that the creditor is responsible for initiating the enforcement of the Order and consequently, where applicable, an indication that the creditor is responsible for transmitting it to the competent authority of the Member State of enforcement and for initiating service on the debtor
- Information about the remedies available to the debtor.
4. Duration of the preservation order (article 20)
There is no fixed term for the preservation order. The Preservation Order shall remain preserved:
- Until the Order is revoked;
- Or, until the enforcement of the Order is terminated;
- Or, until a measure to enforce a judgment, court settlement or authentic instrument obtained by the creditor relating to the claim which the Preservation Order was aimed at securing has taken effect with respect to the funds preserved by the Order.
Request for the obtaining of account information
Toolkit on the European Account Preservation Order: Request for information
To reduce unnecessary procedures and to avoid proceedings concerning too many banks, the regulation organises, under certain conditions, a mechanism to allow the claimant, who does not have all the information required by article 8, to obtain them.
Article 14.1 of the Regulation states the creditor who obtained an enforceable judgment, court settlement or authentic instrument and who does not have the information concerning the bank account can request the court with which the application for the Preservation Order is lodged to request that the information authority of the Member State of enforcement obtain the information necessary to allow the bank or banks and the debtor’s account or accounts to be identified.
Article 14.1 of the Regulation allows the creditor whose judgment, court settlement or authentic instrument is not yet enforceable to obtain the information concerning a bank account provided that the amount to be preserved is substantial taking into account the relevant circumstances, and the creditor has submitted sufficient evidence to satisfy the court that there is an urgent need for account information.
The creditor that did not obtain a judgment, court settlement or authentic instrument cannot obtain the information concerning the bank account.
According to the Regulation, each Member State shall adapt its national law by choosing among different methods:
An obligation on all banks in its territory to disclose, upon request by the information authority, whether the debtor holds an account with them;
Access for the information authority to the relevant information where that information is held by public authorities or administrations in registers or otherwise;
The possibility for its courts to oblige the debtor to disclose with which bank or banks in its territory he holds one or more accounts
Any other methods which are effective and efficient.
It is specified that all authorities participating in obtaining information act expeditiously.
Enforcement of the European Preservation Order
Toolkit on the European Account Preservation Order: Enforcement
1. Recognition and enforceability (article 22)
Preservation Orders issued in a Member State in accordance with this Regulation shall be recognised in the other Member States without any special procedure being required and shall be enforceable in the other Member States without the need for a declaration of enforceability.
2. Execution by the bank and declaration of the bank (articles 23 to 27)
2.1. Enforcement of the Preservation Order (article 23)
The regulation insist on the role of the competent authority of the Member State of enforcement that shall act without delay.
Moreover, where the Preservation Order was issued in a Member State other than the Member State of enforcement, it shall be transmitted to the competent authority of the Member State of enforcement.
2.2. Implementation of the Preservation Order (article 24)
As soon as the bank receives the Preservation order, it shall implement it without delay and preserve the amount specified in the Order either by ensuring that that amount is not transferred or withdrawn or where national law so provides, by transferring that amount to an account dedicated for preservation purposes.
It should be mentioned that any funds held in the account which exceed the amount specified in the Preservation Order shall remain unaffected by the implementation of the Order.
Article 24.8 of the Regulation also takes into account the issue of the difference of currency.
2.3. Declaration concerning the preservation of funds (article 25)
By the end of the third working day following the implementation of the Preservation Order, the bank shall issue a declaration using the declaration form indicating whether and to what extent funds in the debtor’s account have been preserved and, if so, on which date the Order was implemented. In case of exceptional circumstances, an extension of eight days is possible if the bank could not issue the Order within three days.
Where the Order was issued in the Member State of enforcement, the bank shall transmit the declaration to the issuing court and to the creditor.
Where the Order was issued in a Member State other than the Member State of enforcement, the declaration shall be transmitted to the competent authority of the Member State of enforcement that shall transmit the declaration to the creditor by the end of the first working day following the receipt or issue of the declaration.
The last paragraph of article 25 specifies that upon request by the debtor the bank or other entity responsible for enforcing the Preservation Order shall, disclose to the debtor the details of the Order. The bank or entity may also do so in the absence of such a request.
2.4. Liability of the bank (article 26)
The regulation does not deal with the issue of the liability of the bank for failure to comply with its obligations and leave this question to the Member State.
3. Prerequisite for execution
3.1. Service of the Order to the bank (article 23 §3)
3.1.1. Preservation Order issued in the State of enforcement
According to article 23§1 of the Regulation, the Preservation Order shall be enforced in accordance with the procedures applicable to the enforcement of equivalent national orders in the Member State of enforcement.
3.1.2. Preservation Order issued in a Member State other than the Member State of enforcement
According to the Regulation, where the Preservation Order was issued in a Member State other than the Member State of enforcement, the transmission shall be performed be in accordance with Article 29 to the competent authority of the Member State of enforcement.
When the relevant authority receive the documents, it shall enforced the Order in accordance with the national procedures applicable.
3.2. Service on the debtor (article 28)
The Preservation Order shall be served on the debtor but also all the documents sent to the jurisdiction or to the relevant authority in order to obtain the Order.
Article 48 a) of the Regulation excludes explicitly the use of the EC Regulation 1393/2007, especially for the purpose of articles 23 §3, 6 and 28 §1, 3, 5 and 6.
The Regulation states that the documents to be served are:
- The Preservation Order using parts A and B of the form referred to in Article 19(2) and (3)
- The application for the Preservation Order submitted by the creditor to the court
- Copies of all documents submitted by the creditor to the court in order to obtain the Order
It shall be noted that where the Preservation Order concerns more than one bank, only the first declaration pursuant to Article 25 showing that amounts have been preserved shall be served on the debtor in accordance with this Article. Any subsequent declarations pursuant to Article 25 shall be brought to the notice of the debtor without delay.The Regulation deals with four means of service:
3.2.1. Where the debtor is domiciled in the Member State of origin
Where the debtor is domiciled in the Member State of origin, service shall be effected in accordance with the law of that Member State.
Service shall be initiated by the issuing court or the creditor, depending on who is responsible for initiating service in the Member State of origin, by the end of the third working day following the day of receipt of the declaration pursuant to Article 25 showing that amounts have been preserved.
3.2.2. Where the debtor is domiciled in a Member State other than the Member State of origin
Where the debtor is domiciled in a Member State other than the Member State of origin, the issuing court or the creditor, depending on who is responsible for initiating service in the Member State of origin, shall, by the end of the third working day following the day of receipt of the declaration pursuant to Article 25 showing that amounts have been preserved, transmit the documents referred to in paragraph 1 of this Article in accordance with Article 29 to the competent authority of the Member State in which the debtor is domiciled. That authority shall, without delay, take the necessary steps to have service effected on the debtor in accordance with the law of the Member State in which the debtor is domiciled.
The competent authority shall inform the issuing court or the creditor, depending on who transmitted the documents to be served, of the result of the service on the debtor.
3.2.3. Where the debtor is domiciled in the Member State of enforcement
Where the Member State in which the debtor is domiciled is the only Member State of enforcement, the documents referred to in paragraph 5 of this Article shall be transmitted to the competent authority of that Member State at the time of transmission of the Order in accordance with Article 23(3). In such a case, that competent authority shall initiate the service of all documents referred to in paragraph 1 of this Article by the end of the third working day following the day of receipt or issue of the declaration pursuant to Article 25 showing that amounts have been preserved.
The competent authority shall inform the issuing court or the creditor, depending on who transmitted the documents to be served, of the result of the service on the debtor.
3.2.4. Where the debtor is domiciled in a third State
Where the debtor is domiciled in a third State, service shall be effected in accordance with the rules on international service applicable in the Member State of origin.
4. Preservation of joint and nominee accounts (articles 30)
Funds held in joint and nominee accounts may be preserved under this Regulation only to the extent to which they may be subject to preservation under the law of the Member State of enforcement.
5. Amounts exempt from preservation (article 31)
Amounts that are exempt from seizure under the law of the Member State of enforcement shall be exempt from preservation under this Regulation. It is the case whereas the amounts are exempted from seizure with or without any request from the debtor
6. Ranking of the Preservation Order (article 32)
The Regulation states that the Preservation Order shall have the same rank, if any, as an equivalent national order in the Member State of enforcement.
7. Right to provide security in lieu of preservation (article 38)
Upon application by the debtor:
- The court that issued the Preservation Order may order the release of the funds preserved if the debtor provides to that court security in the amount of the Order, or an alternative assurance in a form acceptable under the law of the Member State in which the court is located and of a value at least equivalent to that amount;
- The competent court or, where national law so provides, the competent enforcement authority of the Member State of enforcement may terminate the enforcement of the Preservation Order in the Member State of enforcement if the debtor provides to that court or authority security in the amount preserved in that Member State, or an alternative assurance in a form acceptable under the law of the Member State in which the court is located and of a value at least equivalent to that amount.
Bibliography
Vade Mecum sur la saisie conservatoire europйenne des avoirs bancaires : Bibliographie
- F. Georges, Le règlement UE n° 655/2014 créant une ordonnance européenne de saisie conservatoire, Revue Luxembourgeoise de bancassurfinance, Kluwer, 2015, p. 137-143
- E. Guinchard, De la première saisie conservatoire européenne. Présentation du règlement n°655/2014 instituant une procédure d’ordonnance européenne de saisie conservatoire des comptes bancaires, RTD eur. 2014. 922
- G. Payan, La nouvelle procédure européenne de saisie conservatoire des comptes bancaires, Lamy Droit de l’exécution forcée, Lettre d’actualités n° 85 (sept. 2014)