The European cross- border bank account freezing regulation

1 How it works

On 18th January 2017, the Regulation (EU) No 655/2014 of the European Parliament and of the Council of 15 May 2014 establishing a European Account Preservation Order (“EAPO”) came into force.1

EAPOs will become an important tool for recovering cross-border debts across the European Union, with the exception of the United-Kingdom and Denmark, who have chosen to opt-out from the Regulation.2

EAPOs have been designed as an alternative to National procedures for obtaining protective measures.

A creditor may now freeze multiple bank accounts of his debtor that are located in several Member States with a single EAPO. This means that he no longer needs to obtain a court order within each Member State in which he would like to freeze an account.

On top of that, the creditor remains free to use any national attachment procedures, since EAPOs have been designed as additional and optional means for the creditor.

(a) Scope

The Regulation applies to pecuniary cross-border claims in civil and commercial matters only, i.e. in cases where a creditor is domiciled in one Member State and the bank account to be preserved is located in another Member State.3

The Regulation does not apply for claims related to bankruptcy, social security, wills and successions, arbitration and rights in property arising out of a matrimonial relationship.

EAPOs apply to funds on bank accounts held with credit institutions only but not to security accounts or accounts held with central banks.

(b) Procedural aspects

EAPOs are available for (i) claims that have already fallen due and (ii) claims that are not yet due, provided however that these claims arise from a transaction or an event that has already occurred and that their amount can be determined.

In order to obtain an EAPO, the creditor has to prove that his claim is in urgent need of judicial protection (i.e. proof of the mere non-payment is not sufficient to obtain an EAPO).

(c) Possibility to request information on the debtors’ bank accounts

The Regulation provides a mechanism allowing the creditor who has obtained a judgment, court settlement or authentic instrument to identify the debtor’s bank accounts, before an EAPO is issued.

This information will be provided upon request by the designated information authority of each Member State, i.e. the CSSF (Commission de Surveillance du Secteur Financier) in Luxembourg.

2 Advantages and disadvantages vis-à-vis a national freezing order

(a) Advantages for the creditor / disadvantages for the debtor

  • Possibility to freeze multiple bank accounts across the European Union with a single EAPO;
  • Possibility to obtain information of the debtor’s bank accounts, notwithstanding banking secrecy laws; and
  • Possibility to obtain an EAPO without recourse to a lawyer.

(b) Disadvantages for the creditor / advantages for the debtor

  • EAPOs apply only to funds on bank accounts held with credit institutions;
  • EAPOs are not available for national procedures with no cross-border element;
  • Possibility for the debtor to obtain the release of the account freeze by providing equivalent securities to the creditor;
  • Requirement to prove that the claim is in urgent need of judicial protection (this requirement does not exist for Luxembourg law governed attachment proceedings);
  • Requirement for the creditor to provide security in case the creditor has not yet obtained a judgment, court settlement or authentic instrument (this requirement does not exist for Luxembourg law governed attachment proceedings);
  • The freeze cannot exceed the amount determined in the EAPO, whereas a Luxembourg national freezing order will freeze all the money on the bank account; and
  • The transfer of the frozen monies at the end of the freezing procedure might prove challenging, since the transfer of the frozen assets remains subject to national law and since Luxembourg procedural law does, for the time being, not provide any enforcement mechanisms that are explicitly designed for the enforcement of EAPOs.


1 The Luxembourg draft bill n°7083 implementing the Regulation

2 Danish and British creditors should thus not have the possibility to request for an EAPO and bank accounts located in Denmark and the United-Kingdom may not be frozen.

3 In order to determine the Member State in which the bank account is located, the Regulation refers to the bank account’s IBAN (International Bank Account Number), or for a bank account which does not have an IBAN, the Member State in which the bank with which the account is held has its head office or, where the account is held with a branch, the Member State in which the branch is located.