articles | 15 June 2017 | M. Eliades & Partners LLC

The European Account Preservation Order Regulation (EAPO) 655/2014 – Facilitation Cross- Border Debt Recovery

The provisions of the EU Regulation setting up the new European Account Preservation Orders (Regulation No. 655/2014) will come into force on 18 January 2017. Under the new changes, creditors domiciled in participating EU Member States (which incorporates all Member States except for the UK and Denmark) will have the capacity to apply to freeze funds in a debtor's bank account in any other participating Member State using a single application form.

An EAPO is an order made by the Court of a participating Member State to prevent the transfer or withdrawal of funds up to a specified amount held by a debtor in a bank account in another Member State. Creditors will be able to apply for an EAPO before proceedings have been initiated, during proceedings or after judgment has been given.

Creditors apply by submitting a single standard form application (made without notice), even where they are applying in relation to multiple bank accounts or accounts in multiple jurisdictions. Applications must be submitted to the court of the Member State in which the judgment to be enforced was issued or, where an application is made prior to the initiation of proceedings or prior to judgment, to the courts of the Member State with jurisdiction to rule on the substance of the claim.

EAPOs will be granted only where a creditor submits sufficient evidence to satisfy the court that there is an urgent need for an EAPO because there is a real risk that, without one, the enforcement of the creditor's claim against the debtor will be impeded or made substantially more difficult. Where an application is made pre-judgment, a creditor will also need to convince a court that he is likely to succeed in the substance of his claim against the debtor. Debtors will have the right to apply to have an EAPO revoked or modified.

Once granted, an EAPO will impose obligations on the relevant bank(s) at which the debtor's account(s) are held. Banks must implement the terms of the EAPO without delay and must provide a declaration that the funds covered by the EAPO have been preserved.


In light of the fact that the EAPO is given without the prior notice of the debtor, the regulation provides safeguards in order to prevent abuse of the order.

Safeguards introduced include a requirement for the creditor to provide security in certain circumstances, and a provision that the creditor shall be liable for damage caused to the debtor by the EAPO where the creditor is at fault.

The court will have discretion as to the level of the security to prevent abuse of the order, however, where the application for an EAPO is made before the creditor has obtained judgment, the provision of security should be the rule, and otherwise it will be at the discretion of the court.

Time limits

The regulation sets out strict time limits within which courts shall have to decide on whether to issue EAPO’s. The court must issue its decision within 10 working days of the application being made, however where a creditor has already obtained judgment, the court must issue its decision within five working days of the making of the application. There is however provision for the deadlines to be extended for specific purposes, for example, where the creditor must provide security or where the Court decides that an oral hearing of the creditor is necessary.

For creditors this regulation will of course be a welcome development, a speedy way to ensure funds held in accounts in other EU member states will be available to enforce a judgment obtained either before or after the application for an EAPO. However there is a risk that this will be open to abuse and potential injustice; debtors could find their accounts frozen and their business financially paralysed without being given an opportunity to be heard by the court.

Author: Panayiotis Koussis, LLB, MSc, LPC

Trainee Lawyer at M. Eliades & Partners LLC

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