25.03.2017. European Account Preservation Order comes into force

Company News

18 January 2017, a regulation establishing a European Account Preservation Order (EAPO) was brought into force to facilitate cross-border debt recovery in civil and commercial matters. It enables a claimant to make a single application to the courts of one EU member state to obtain an order that will “freeze” monies held by a defendant in bank accounts across all participating member states.

EAPOs are intended to be an alternative to protective measures available under national laws and can be sought in “cross-border” civil and commercial proceedings before the courts of all participating member states. The application for an EAPO can be made at any stage of the main proceedings, even before main proceedings have been issued.

An applicant must satisfy the court that there is urgency for such an order to be made. Article 7 (1) of the Regulation states: “The court shall issue the Preservation Order when the creditor has submitted sufficient evidence to satisfy the court that there is an urgent need for a protective measure in the form of a Preservation Order 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 UK and Denmark have not opted into the regulation. However, UK and Danish account holders in participating member states will be affected, as will UK and Danish banks operating in participating member states.