Debt collection and attachment in EU, new rules in Italy

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Foreign debt collection finally finds an effective remedy, in EU member countries. Thanks to the legislative decree approved on Sunday, 18.10.20, by the Council of Ministers, implementing Regulation (EU) No. 655/2014.

The new procedure applies only to transnational cases, that is, those in which the court processing the application for an attachment order is located in one member state and the bank account subject to the order is held in another member state.

Debt collection and attachment of current accounts in EU

Reg. EU 655/14 established ‘a procedure for a European bank account preservation order to facilitate cross-border debt recovery in civil and commercial matters.’ (1)

The Council of Ministers, at the proposal of European Affairs Minister Vincenzo Amendola and Justice Minister Alfonso Bonafede, gave final approval to a legislative decree adapting national rules to the provisions of Regulation (EU) No. 655/2014.

European attachment order

The creditor is entitled to obtain a European order for the attachment of sums held by the debtor in bank accounts also present in other EU member states. Through a fast-track procedure alternative to the procedure established by national law. Inaudita altera parte, when the conditions are met.

The procedure applies to pecuniary claims in civil and commercial matters, including those arising from professional services and labor activities. With the exclusions that follow:

– receivables from debtors subject to insolvency proceedings (bankruptcy, composition, receiverships and various types of insolvency proceedings provided for in different national regimes),
– State liability for acts and omissions in the exercise of official authority (reg. EU 655/14, Article 2.1),
– claims arising from arbitrations,
– tax, customs and administrative credits,
– social security,
– property rights arising from relations between spouses or more uxorio relationships,
– Wills, successions, and mortis causa obligations.

Excluded are from seizure ‘Bank accounts that are exempt from seizure under the law of the member state where the account is held‘ and amounts at financial institutions that do not take deposits (e.g., institutions that provide financing for export and investment projects or projects in developing countries, or provide financial market services. EU Reg. 655/14, Article 2.3).

Procedure

The process can be activated:

– Before or at any stage of the trial on the merits, or
– after a court decision, court settlement, or public act imposing a payment obligation on the debtor (reg. EU 655/14, Articles 5 et seq.)

The judicial authority competent to issue an attachment order is generally the one competent to rule on the merits of the claim. Where the debtor is a consumer, jurisdiction lies with the court of the member state where the debtor is domiciled.

Uniform time limits for the decision on the application for an attachment order are defined in Article 18 of Reg. EU 655/14. An attachment order issued in one member state is recognized and enforceable in the other member states without the need for a special procedure or declaration of enforceability (reg. EU 655/14, Article 22).

Bank account information

Following the establishment of the claim (by court decision, court settlement or enforceable public act), if the creditor ‘has reason to believe that the debtor holds an account or accounts with a bank in a particular member state, but does not know the name and/or address of the bank, nor the IBAN, BIC or other banking reference that would enable the bank to be identified, may request the court with which the application for an attachment order is filed to request that the information authority of the member state of enforcement obtain the information necessary to enable the identification of the bank or banks and the debtor’s account or accounts‘ (reg. EU 655/14, Article 14).

Conditions

The creditor must produce sufficient evidence to convince the court that there is a concrete risk that justifies freezing the debtor’s bank account. (2)

Credits may also be not yet due, ‘provided that such claims arise out of a settlement or event that has already taken place and the amount can be established, including claims falling within the subject matter of intentional or negligent torts and actions for damages or restitution arising out of criminal torts‘. (3)

The ability to act without prior hearing of the debtor is counterbalanced by special safeguard mechanisms. Various forms of appeal-including the possibility of objecting to the attachment order following its service (4)-but also the possibility for the judge to require the creditor to deposit a bond to cover any damages, should he or she lose. (5) Without neglecting the rights of third parties. (6). Finally, a number of cases of presumed creditor liability are introduced (reg. EU 655/14, Article 13).

Updates will follow.

Dario Dongo

Notes

(1) Regulation (EU) no. 655/2014 of the European Parliament and of the Council 15514 establishing a procedure for a European Account Preservation Order to facilitate cross-border debt recovery in civil and commercial matters. Su https://eur-lex.europa.eu/legal-content/IT/TXT/?qid=1603028120002&uri=CELEX%3A32014R0655
(2) The so-called periculum in mora occurs when ‘enforcement of an existing or future court judgment could be prevented or made significantly more difficult because there is a real risk that, before the creditor is able to obtain enforcement of an existing or future court judgment, the debtor may have dissipated, concealed, or destroyed his or her assets or disposed of them below value, to an unusual extent, or through an unusual action‘ (reg. EU 655/14, recital 14, article 12)
(3) Reg. EU 655/14, recital 12
(4) Reg. EU 655/14, Articles 33-37
(5) ‘In cases in which the creditor has not yet obtained a court decision, court settlement, or public instrument requiring the debtor to pay the claim asserted by the creditor, the provision of a guarantee should be the rule, and the court should grant a dispensation from this obligation or require the provision of a guarantee of a lesser amount only on an exceptional basis if it finds that the guarantee is inappropriate, unnecessary, or disproportionate in the circumstances of the case‘ (EU reg. 655/14, recital 18, article 38)
(6) Reg. cited above, Article 39