The preservation of foreign bank accounts is made easier
- Leo Peeters
- Commercial Law , Finance and Banking , Insolvency Law
- foreign bank account , (EU) 655/2014 , cross-border debt recovery , EU , seizure , withdrawal of funds , account information
This is provided for in the Regulation (EU) No 655/2014 of 15 May 2014 establishing a European Account Preservation Order procedure to facilitate cross-border debt recovery in civil and commercial matters, which came into effect as from 18 January 2017.
The preservation is a seizure that can be carried out before a court’s decision.
The purpose is to prevent the debtor to withdraw the funds out of his bank account before being forced by a court’s decision to pay a debt.
It is also important that the debtor is not informed about the creditor’s application beforehand.
It is not complicated to initiate a preservation procedure on a Belgian bank account. However, a creditor dealing with a foreign debtor or a Belgian debtor holding a foreign bank account was often reluctant to initiate a preservation procedure because he had to turn to a foreign court. As a result, many debts were not collectable from a practical point of view and many debts were therefore dropped.
As from 18 January 2017, each Belgian consumer or company will be able to request a European account preservation order from a Belgian judge. With this order, the preservation can be carried out on one or more bank accounts held by a debtor in another state of the European Union.
The preservation prevents the transfer or withdrawal of funds held by his debtor in his bank account.
The regulation is only applicable to debts in civil and commercial matters, when the preserved
bank account is held in a member state other than the member state in which the creditor is
resident or of the court where the application for the preservation order is filed.
The regulation does not apply to Denmark and the United Kingdom.
If the cross-border condition is missing, the regulation does not apply and gives way to the national rules regarding preservation.
The application for the preservation order has to be lodged with the court having jurisdiction
to rule on the substance of the matter. To that end, a standard form should be used.
The creditor has to submit sufficient evidence to satisfy the court that:
In order to ensure the surprise effect, the procedure is unilateral. The debtor should not be informed about the creditor’s application nor be heard prior to the issue of the order.
At the same time, the Regulation provides for a number of safeguards to prevent abuse of this
In this way, it will be possible that the damage the debtor could possibly suffer as a result of the preservation could be compensated if the creditor is liable for that damage. To this end, a security can be required from the creditor. The burden of proof of the creditor’s liability shall lie with the debtor.
However, according to the regulation, the fault of the creditor shall be presumed in the following cases:
Sometimes a creditor knows that the debtor holds one or more accounts with a bank in another member state without knowing neither the name, the address of the bank or the IBAN. In that case, the regulation sets out a mechanism allowing the creditor to request that the information needed to identify the debtor’s account be obtained by the court, before a preservation order is issued, from the designated information authority of the member state in which the creditor believes that the debtor holds the account.
The creation of a European account preservation order is a further step to facilitate
cross-border debt recovery.
It goes without saying that we remain available if you are having trouble recovering amounts from your foreign debtors.