EU Regulation No. 655/2014, dated 15 May 2014, established a European Account Preservation Order (“EAPO”) procedure to facilitate cross-border debt recovery in civil and commercial matters. Here are eight things you need to know about the Regulation:
- It came into force on 17 July 2014 and will be applied by participating Member State courts from 18 January 2017.
- Under the new procedure, a claimant will be able to obtain an EAPO in order to freeze the funds of a defendant held in an EU bank account in another Member State, without further applications being required.
- The Regulation does not apply to the UK and Denmark, which have opted out. This means the procedure will not be available for bank accounts held in, or to creditors domiciled in, the UK and Denmark.
- EAPOs are intended to be an alternative to protective measures available under national laws. They will be available before substantive proceedings on foot, during proceedings, or after a judgment is obtained.
- The application procedure for an EAPO will generally be without notice and on paper. A claimant must provide “sufficient evidence” there is an “urgent need” for such a measure and will usually be required to provide security for pre-judgment applications.
- The Regulation imposes extensive obligations on banks – they will be under an obligation to “freeze” accounts subject to an EAPO “without delay” and may also have to carry out certain searches in respect of a defendant’s bank accounts.
- The Regulation provides a significant degree of discretion for the Member State court when assessing whether or not to grant an EAPO.
- The Regulation is extremely detailed and it remains to be seen how it will be applied in practice.