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New European regime for preserving accounts

Today, EU Regulation No 655/2014 of 15 May 2014 (“the Regulation”) takes effect. It establishes a European Account Preservation Order (“EAPO”) procedure with the purpose of facilitating cross-border debt recovery in civil and commercial matters.

It is intended to operate as an alternative to domestic remedies, by allowing certain creditors in one participating Member State to freeze a debtor’s assets located in bank accounts in another participating Member State without first obtaining a court order within that state.

Applications can be made prior to commencing proceedings without notice to the debtor (as well as during proceedings and after judgment) and may give creditors the chance to obtain information about debtors’ bank accounts.

There are limitations to the scope and application of the EAPO regime which will be tested in the early months and years of the new EAPO regime, when its interpretation and utilisation is interpreted by Courts across Europe. However, used creatively, we believe that EAPOs should prove to be a useful tool for the identification and preservation of debtors’ assets, and for the enforcement of judgments where a debtor has bank accounts in certain EU member states.