The European Account Preservation Order: Freezing a Debtor's Bank Account in Another EU Country Before They Move the Money

A Dutch wholesaler has a judgment against a customer in Spain who keeps promising to pay and never does. A German landlord has just discovered that the tenant who left owing three months' rent has moved to Italy and is closing accounts. A French consultant learns that the Portuguese start-up that owes her fees is about to distribute its last cash to shareholders. In each case the creditor knows, or strongly suspects, where the money is; the problem is that by the time an ordinary claim is decided the account will be empty. The European Account Preservation Order was created for exactly this moment.

This guide is written for individuals, freelancers and small and medium-sized businesses who are owed money by someone with a bank account in another EU Member State, and for the advisers helping them. It follows the text of Regulation (EU) No 655/2014 of 15 May 2014 establishing a European Account Preservation Order procedure, which has applied since 18 January 2017 (Article 54). It does not replace advice on the court, the fees and the practice in the country where the application is made or where the account is held, all of which vary and all of which a local debt recovery lawyer will know. It also does not cover the national freezing orders that each Member State continues to offer alongside the European one; the choice between the two is discussed at the end.

What the order does, in one paragraph

A European Account Preservation Order ("EAPO" or "Preservation Order") is a court order that requires a bank to block a specified amount in a debtor's account so that it cannot be transferred or withdrawn. It does not transfer the money to the creditor; it preserves it until the creditor obtains an enforceable judgment or other title and enforces it under national law. Its distinctive features are that it is issued on a uniform EU form, that it is granted without the debtor being notified or heard beforehand (Article 11), that it is recognised and enforceable in the other Member States without any declaration of enforceability (Article 22), and that the bank must act on it without delay (Article 24(1)). Two Member States are outside the system: Denmark does not participate, and the United Kingdom did not take part and has since left the EU. Ireland participates.

First question: is your case "cross-border" in the Regulation's sense?

The order is available only in a cross-border case, and Article 3 defines the term more narrowly than most people expect. A case is cross-border when the bank account to be preserved is maintained in a Member State other than (a) the Member State of the court to which the application is made, or (b) the Member State in which the creditor is domiciled. The test is applied on the date the application is lodged (Article 3(2)).

Three consequences follow. First, a creditor in Amsterdam applying to a Dutch court to freeze a Spanish account is in a cross-border case, because the account is outside the Member State of the court. Second, a creditor domiciled in Germany who applies to a Spanish court to freeze a Spanish account is also in a cross-border case, because the account is outside the Member State of the creditor's domicile. Third, a purely domestic freeze, where creditor, court and account are all in the same Member State, is not covered and remains a matter for national law alone. A creditor established outside the EU, for example in Türkiye, Switzerland or the United States, can use the procedure provided the court seised and the account are in participating Member States and the other conditions are met; the Regulation defines the cross-border element by reference to the court and the account, and a non-EU creditor's domicile is simply never the same as the account's Member State.

Which claims qualify

The Regulation applies to pecuniary claims in civil and commercial matters (Article 2(1)). Unpaid invoices, loans, rent, fees, damages and price refunds all qualify. It does not extend to revenue, customs or administrative matters or to State liability for acts of public authority. Article 2(2) excludes five fields: rights in property arising out of a matrimonial or comparable relationship; wills and succession, including maintenance obligations arising by reason of death; claims against a debtor who is already the subject of bankruptcy, winding-up or analogous proceedings; social security; and arbitration. Article 2(3) and (4) also exclude accounts that are immune from seizure under the law of the Member State where they are held, accounts operated within payment and securities settlement systems, and accounts held by or with central banks acting as monetary authorities.

The insolvency exclusion deserves emphasis. Once bankruptcy or winding-up proceedings have been opened against the debtor, the Preservation Order is no longer available; the creditor must file its claim in those proceedings instead. A debtor who is visibly heading towards insolvency is therefore a reason to act quickly, not to wait.

When you can apply: before, during or after the main claim

Article 5 makes the order available in two situations: (a) before the creditor starts proceedings on the substance against the debtor in a Member State, or at any stage during those proceedings until judgment is given or a court settlement is approved or concluded; and (b) after the creditor has obtained in a Member State a judgment, court settlement or authentic instrument requiring the debtor to pay.

The distinction between "before judgment" and "after judgment" runs through the whole Regulation. A creditor who already holds a judgment has an easier route: a lower evidential burden, a shorter decision deadline, discretionary rather than mandatory security, and access to the account-information mechanism described below. A creditor without a judgment can still obtain the order, but must show more, must lodge security, and must start the main proceedings within a fixed period.

Which court

Under Article 6(1), where no judgment has yet been obtained, jurisdiction lies with the courts of the Member State that have jurisdiction over the substance of the claim under the applicable rules, ordinarily the Brussels I Recast rules on civil and commercial jurisdiction. There is one important exception: where the debtor is a consumer who contracted with the creditor for purposes outside their trade or profession, only the courts of the Member State in which the consumer is domiciled may issue the order (Article 6(2)). Where the creditor already has a judgment or court settlement, jurisdiction lies with the courts of the Member State in which it was given or approved (Article 6(3)); for an authentic instrument, with the courts designated in the Member State where it was drawn up (Article 6(4)).

What the court must be shown: the two tests in Article 7

The court issues the order when the creditor has submitted sufficient evidence to satisfy it that there is an urgent need for a protective measure because there is a real risk that, without it, the subsequent enforcement of the claim will be impeded or made substantially more difficult (Article 7(1)). This is the risk test, and it must be met in every case. Vague fears are not enough; the creditor should describe concrete facts such as the debtor's moving of funds, the closure of business premises, the disposal of assets, repeated broken promises to pay combined with signs of financial distress, or a stated intention to relocate outside the reach of enforcement.

Where the creditor does not yet have a judgment, court settlement or authentic instrument, Article 7(2) adds a second test: the creditor must also satisfy the court that they are likely to succeed on the substance of the claim. In practice this means filing the contract, the invoices, the delivery or performance evidence and the correspondence in which the debtor acknowledges or fails to dispute the debt. The court may hold a hearing of the creditor and any witnesses if it considers that necessary, but the debtor is never heard at this stage.

The clock: 10 working days, or 5

Article 18 imposes deadlines on the court itself. Where the creditor has no judgment yet, the court must decide by the end of the tenth working day after the application was lodged or, where applicable, completed (Article 18(1)). Where the creditor already has a judgment, court settlement or authentic instrument, the deadline is the end of the fifth working day (Article 18(2)). If the court holds a hearing of the creditor, it must decide by the end of the fifth working day after the hearing (Article 18(3)). Where security is required, these deadlines apply to the decision fixing the security, and the order itself follows without delay once the security has been provided (Article 18(4)).

Security and liability: the price of an ex parte freeze

Because the debtor is not heard, the Regulation protects them in two ways. First, under Article 12(1), where the creditor has not yet obtained a judgment, court settlement or authentic instrument, the court must require the creditor to provide security in an amount sufficient to prevent abuse of the procedure and to compensate the debtor for any damage caused by the order for which the creditor is liable. The court may dispense with security only by way of exception, where it considers security inappropriate in the circumstances. Where the creditor already has a title, security is discretionary (Article 12(2)). The court informs the creditor of the amount and of the forms of security acceptable under its national law, and issues the order once the security is in place (Article 12(3)).

Second, Article 13 makes the creditor liable for any damage caused to the debtor by the order due to fault on the creditor's part, with the burden of proof on the debtor (Article 13(1)). In four situations fault is presumed unless the creditor proves otherwise: where the order is revoked because the creditor failed to start the main proceedings in time (unless the debtor paid or the parties settled); where the creditor failed to request the release of over-preserved amounts under Article 27; where the order turns out to have been inappropriate, or appropriate only in a lower amount, because the creditor did not comply with its duties under Article 16 concerning parallel applications; and where the order is revoked or enforcement terminated because the creditor failed to comply with the rules on service or translation (Article 13(2)). Member States may add further grounds of liability in national law (Article 13(3)), and the law of the Member State of enforcement governs the liability (Article 13(4)).

Starting the main claim: 30 days or 14 days, whichever is later

A pre-judgment Preservation Order is a bridge to a judgment, not a substitute for one. Under Article 10(1) a creditor who applied before starting proceedings on the substance must start them and provide proof of doing so to the issuing court within 30 days of lodging the application or within 14 days of the issue of the order, whichever is later. The court may extend the period at the debtor's request, for example to allow settlement. If proof is not received in time, the order is revoked or terminates and the parties are informed (Article 10(2)). Proceedings are treated as initiated when the document instituting them is lodged with the court, or, where the document must be served before lodging, when it is received by the authority responsible for service, provided the creditor takes the subsequent steps required of them (Article 10(3)). The failure to start proceedings in time also triggers the presumption of fault in Article 13(2)(a).

Finding the account: the Article 14 information request

Many creditors know that the debtor banks in a particular country without knowing the bank or the account number. Article 14 offers a solution to creditors who already hold an enforceable judgment, court settlement or authentic instrument: within the application for the order they may ask the court to request the information authority of the Member State of enforcement to obtain the information needed to identify the bank and the account. The creditor must substantiate why they believe the debtor holds an account in that Member State and provide all relevant information they have; an insufficiently substantiated request is rejected (Article 14(2)). Exceptionally, a creditor whose title is not yet enforceable may make the request where the amount is substantial and there is an urgent need because enforcement is likely to be jeopardised, leading to a substantial deterioration of the creditor's financial situation (Article 14(1), second subparagraph). Member States obtain the information through their own mechanisms, for example by requiring banks to disclose whether the debtor holds an account with them or through access to public registers. Where an information request is made, the court decides on the order without delay once the information arrives (Article 18(5)).

What happens at the bank

A bank that receives the order, or the corresponding instruction under national law, must implement it without delay (Article 24(1)). It preserves the amount specified either by ensuring that it is not transferred or withdrawn from the account, or, where national law so provides, by transferring it to a dedicated preservation account (Article 24(2)). Transactions already pending at the moment of receipt may be settled first, but only if they settle before the bank issues its declaration. Where the order names the debtor but not the account number, the bank must identify the debtor's accounts itself; if it cannot identify an account with certainty and the number was not obtained through an Article 14 request, it does not implement the order (Article 24(4)).

By the end of the third working day after implementation the bank must issue a declaration on the EU form stating whether and to what extent funds have been preserved and on what date; in exceptional circumstances the deadline is the end of the eighth working day (Article 25(1)). The declaration goes to the issuing court and to the creditor, directly or through the competent authority of the Member State of enforcement (Article 25(2) and (3)). The bank must disclose the details of the order to the debtor on request (Article 25(4)).

Two protections operate at this stage. Amounts that are exempt from seizure under the law of the Member State of enforcement, typically a subsistence minimum for individuals, are exempt from preservation too, either automatically or on the debtor's application depending on that law (Article 31). And where the order covers several accounts, or follows equivalent national orders for the same claim, the creditor has a duty to request the release of over-preserved amounts by the end of the third working day after receiving a declaration showing the excess (Article 27); failing to do so triggers the presumption of fault.

Service on the debtor and the debtor's remedies

The debtor learns of the order only after the freeze. Under Article 28 the order, the application, the creditor's supporting documents and the bank's declaration must be served on the debtor, and service must be initiated by the end of the third working day after the declaration showing that funds were preserved is received; where the debtor is domiciled in another Member State, the documents are transmitted to that State's competent authority, which arranges service under its own law. Documents are accompanied by translations where required.

The debtor's remedies are divided between the Member State of origin and the Member State of enforcement. Before the court of origin, under Article 33(1), the debtor may have the order revoked or modified on the grounds, among others, that the Regulation's conditions were not met; that the order and accompanying documents were not served within 14 days of the preservation of the account (curable within 14 days of the creditor learning of the application); that the language requirements were not respected; that over-preserved amounts were not released; that the claim has been paid in full or in part; that the substantive judgment dismissed the claim; or that the judgment, settlement or instrument relied on has been set aside. The debtor may also seek a review of the security decision (Article 33(2)). In the Member State of enforcement, under Article 34, the debtor may have enforcement limited where exempt amounts were not correctly taken into account, or terminated where the account falls outside the Regulation's scope, where enforcement of the underlying title has been refused or its enforceability suspended, where the grounds in Article 33(1)(b) to (g) apply, or where enforcement would be manifestly contrary to that State's public policy.

How the order compares with the alternatives

Practical guidance

• Choose the route before you file. If you hold a judgment, the European order gives you a five-working-day decision, discretionary security and the account-information request. If you do not, weigh the mandatory security and the 30-day deadline against the speed of an ex parte freeze; a national order in the debtor's own country may sometimes reach more assets.
• Build the risk file, not just the debt file. Article 7(1) is the test most applications fail. Document what the debtor is doing with their money and why enforcement later would be impeded.
• Have the security ready. The court will name the amount and the acceptable forms; the order issues only once security is lodged. A bank guarantee or deposit arranged in advance saves days.
• Diary the deadlines from day one. Thirty days from the application or fourteen from the order to start the main claim; three working days to request release of any excess; the debtor's fourteen-day service ground. Each of them ends the order or creates liability if missed.
• Ask for no more than the claim and its accessories. Over-preservation is both a duty to correct and a presumption of fault.
• Plan enforcement. The order preserves; it does not pay. Once you have an enforceable title, enforcement against the frozen funds follows the law of the Member State where the account is held.

The Preservation Order was designed to be usable by a creditor without a lawyer, and the standard forms make a straightforward case manageable. Where the amount is significant, the debtor is likely to fight, or the account is in a country whose enforcement system you do not know, a debt recovery lawyer in the Member State of the court or of the account will usually earn their fee in the speed of the freeze and the avoidance of the liability traps that the Regulation sets for a careless creditor.

Frequently asked questions