European Cross-Border Attachment Order Added to Italian Protective Tools for Creditors
Italy has fully integrated the European Account Preservation Order into its procedures alongside existing protective tools available to creditors, who can now also request that their debtors' bank accounts in the European Union be frozen directly by the account bank.
On October 18, 2020 Italy adapted its civil procedure rules to incorporate the European Account Preservation Order ("EAPO") (introduced by EU Regulation 655/2014, in force since January 2017 ("the Regulation")) as an additional protective measure in favor of creditors.
The Regulation—directly applicable in all EU Member States except Denmark and the United Kingdom, and overcoming the legislative differences among Member States—introduced the EAPO as a new cross-border attachment order allowing creditors to freeze debtors' liquidity wherever located in the European Union.
At any stage of an enforcement proceeding, or even before initiating one, creditors may request that the competent local court issue an EAPO absent any hearing involving the debtor. The EAPO, directly executive once notified to the debtor, instructs the debtor's account bank to immediately freeze liquidity on the debtor's accounts up to an amount equal to the creditor's claim. As a result, thanks to the speed with which the attachment is achieved, the EAPO effectively prevents the debtor from scattering or relocating its liquidity. The debtor may, nevertheless, request,inter alia, that the creditor grant a guarantee covering possible damages suffered by the debtor as a consequence of the EAPO.
A creditor may obtain an EAPO in one Member State only, provided that:
- The debtor's accounts are opened in a Member State different from that in which the creditor has its domicile or initiated the enforcement proceeding;
- The creditor's claim is a civil or commercial one (e.g., no bankruptcy or tax claims); and
- The creditor is able to prove the title—or at least the existence—of its claim (fumus bonis iuris) and a founded threat to the full satisfaction of said claim if not through an EAPO (periculum in mora).
If it did not do so before requesting the EAPO, the creditor must initiate a full enforcement proceeding soon after the EAPO is executed, otherwise the order's effects will automatically cease. Nonetheless, if the debtor specifically asks for it and the EAPO expressly authorizes it, the account bank may transfer the debtor's assets directly to the creditor's accounts listed under the EAPO.
Rachele Perez, in the Milan Office, assisted in the preparation of this Alert.
