EAPOAs of January 18, 2017, a new procedure for collection of receivables called the European Account Preservation Order (EAPO) was introduced in the Bulgarian legislation. The reasons for the adoption of the new European Account Preservation Order for Bulgaria are the transposition of an European regulation – Regulation (EU) № 655/2014 of the European Parliament and the Council of 15 May 2014 in the norms of the Bulgarian Civil Procedure Code (CPC).
The European Account Preservation Order (EAPO) is an alternative measure for the creditor to quickly seize funds in the debtor’s bank accounts within the European Union.
At the same time, it provides sufficient guarantees to protect the debtor’s rights against abuse by the creditor. This is done by filing an application for annulment with the competent court in certain cases, which we will discuss below.
1. In what cases can it be issued?
The European Account Preservation Order (EAPO) applies to monetary claims in cross-border civil and commercial matters, with the exception of tax, customs or administrative cases, as well as cases in which the State is held liable for acts or omissions in the exercise of state authority. European Account Preservation Order (EAPO) is used in cases where the creditor is domiciled in one Member State and the court and the bank account to be seized are located in another. Or when the court hearing the application is located in one Member State and the bank account subject to the preservation order is in another member State.
2. Competent court
The court of first instance shall have jurisdiction to hear the dispute on the merits if the issue of EAPO is requested before the dispute on the merits is brought to court. There is a possibility to issue a EAPO in any stage of the case, including during its consideration before the last instance court – the Court of Cassation.
3. Grounds for issuance
The creditor should provide sufficient evidence. Its purpose is to prove to the court that there is an urgent need for a protective measure. The creditor also must establish a guarantee to prevent abuse of the procedure. The guarantee can be cash, bank or a mortgage. In any case, it is a precautionary measure for the debtor, since at this stage he is not notified of the application for an attachment. Nor is the creditor heard before the order is issued. This is done in order to ensure the “surprise effect” for the debtor. The effect is in favour of the creditor who is trying to collect his debt. Ultimately, the new legal instrument aims not only to satisfy the creditor’s interest, but also to establish a balance in his relationship with the debtor.
If the creditor has no enough information about his debtor or his bank account, he has the opportunity to ask the court to obtain the necessary information.
This is requested by the court in which the application for the seizure order was filed. The court, in turn, asked the information authority of the Member State of enforcement (in Bulgaria it is the Ministry of Justice) to obtain information on the debtor’s bank and account. All bodies involved in obtaining the information are obliged to act. The deadlines for issuing a EAPO vary depending on whether or not the creditor has obtained a court decision. They are 5 or 10 working days after the creditor has submitted an application.
4. Recognition and enforcement
An attachment order issued in a Member State shall be recognized in the other Member States without the need for a special procedure. It is enforceable in other Member States without a declaration of enforceability. The bailiff /enforcement agent/ is the authority competent to execute the attachment order.
Once the bank receives the attachment order, it executes it immediately. It must ensure that this amount is not transferred or withdrawn from the account and transfer the amount to a special attachment account. Under certain conditions, the bank is allowed (if requested by the debtor) to release the seized amount and transfer it to the creditor’s account. The debtor is notified promptly upon enforcement of the attachment.
5. Available remedies
The remedies against the EAPO are:
1) Application to the competent court for annulment or amendment; or
2) Application to the competent court or to the bailiff/enforcement agent for termination or restriction of the execution of the order in the presence of certain conditions.
3) It is also possible for the debtor and the creditor to jointly apply to the court that issued the attachment order to revoke or amend the latter or to the bailiff /enforcement agent to terminate or limit the execution of the order.
The court that issued the attachment order may, on its own initiative, amend or revoke the order due to changed circumstances.
The EAPO is a binding EU legal instrument applicable directly. It establishes a new European procedure for cross-border cases. It allows for efficient and fast seizure of funds in bank accounts. The procedure is an additional tool for protecting the creditor. He is free to use any other procedure under his national law to obtain an equivalent protective measure.
