The European Account Preservation Order has been issued. What happens to the debtor's money and what the creditor must do

A European Account Preservation Order under Regulation (EU) No 655/2014 has a single purpose: to prevent the debtor from transferring or withdrawing money from an account, up to the amount specified in the order (Article 1(1)). The money does not pass to the creditor; it stays in the debtor’s account and awaits a judgment and enforcement. Between the issue of the order and enforcement, however, several steps with short time limits fall on the creditor. A creditor unaware of them risks the order failing or becoming liable in damages.

1. The bank preserves, but only what is in the account

The bank implements the order without delay after it is served (Article 24(1)). It preserves the amount stated in the order by not permitting its transfer or withdrawal, or by transferring it to a dedicated account where national law so allows (Article 24(2)). Funds exceeding the amount in the order remain freely available to the debtor (Article 24(5)). If there is not enough money in the account, only what is there is preserved (Article 24(6)). If the debtor holds several accounts with the same bank and the money in them exceeds the amount specified in the order, savings accounts are preserved first, then current accounts held solely in the debtor’s name, and only then joint accounts (Article 24(7)). An amount in another currency is converted at the rate of the European Central Bank or of the central bank of the Member State of enforcement (Article 24(8)).

Joint accounts and accounts the debtor holds for a third party are preserved only to the extent that the law of the Member State of enforcement so allows (Article 30). Amounts exempt from seizure under that law are likewise exempt from preservation (Article 31(1)); in Slovakia this covers funds in accounts against which enforcement cannot be conducted (Section 7(2) of Act No. 54/2017 Coll.).

2. The bank’s declaration

By the end of the third working day following implementation of the order, the bank issues a declaration stating whether and to what extent it has preserved the funds; in exceptional circumstances, by the end of the eighth working day at the latest (Article 25(1)). If the order was issued in another Member State, the declaration is transmitted through the competent authority of the Member State of enforcement to the issuing court and to the creditor (Article 25(3)). This declaration is the creditor’s first news of whether anything was found in the account at all.

3. Any excess must be released at once

Where the order targets several accounts, or is implemented alongside a national preservation measure for the same claim, the banks may together preserve more than the amount stated in the order. The creditor is then obliged to apply for release of the excess as quickly as possible and by the end of the third working day following receipt of the declaration disclosing the excess at the latest (Article 27(1) and (2)). If it fails to do so, its fault is presumed as regards any loss the debtor suffers (Article 13(2)(b)). In Slovakia the application is received by the court that ordered enforcement of the order, and that court may also limit the preservation of its own motion (Section 8 of Act No. 54/2017 Coll.).

4. The debtor receives the application and all the evidence

After the funds are preserved, the order, the application for it and copies of all the documents the creditor submitted to the court are served on the debtor (Article 28(5)). Service is initiated by the court or by the creditor, depending on which of them the law of the Member State of origin requires, by the end of the third working day following receipt of the bank’s declaration (Article 28(2) and (3)); where a Slovak court issued the order, that same court serves a debtor seated in Slovakia, and for a debtor in another Member State it transmits the documents to the service authority there (Section 9(1) and (3) of Act No. 54/2017 Coll.). If the documents are not served on the debtor within 14 days of the preservation of the account, the debtor may apply for the order to be revoked (Article 33(1)(b)). Draft the application, then, in the knowledge that the debtor will read all of it. The other remedies available to the debtor are examined in our answer on how to challenge the preservation of an account.

5. The period for bringing proceedings

If you obtained the order before bringing proceedings, an application initiating proceedings on the substance must be filed and evidenced to the court within 30 days of the application for the order or within 14 days of its issue, whichever is the later (Article 10(1)). Otherwise the court revokes the order or terminates its enforcement (Article 10(2)) and the creditor’s fault as regards loss is presumed (Article 13(2)(a)). It is sensible to have the action ready when the application for the order is filed.

6. The order confers no priority

The order ranks equally with an equivalent national measure in the Member State of enforcement (Article 32). Slovak law adds a rule that must be reckoned with from the outset:

Enforcement of a preservation order has no suspensive effect on the conduct of enforcement proceedings, nor does it establish a right to preferential satisfaction from the preserved amount.

— Section 7(6) of Act No. 54/2017 Coll. (unofficial English translation)

If another creditor is conducting enforcement against the debtor’s account in Slovakia, the preserved amount will not stop it. The ranking of several orders against the same account is governed in Slovakia by the date of service on the bank, and where the funds are insufficient, preservation is pro rata (Section 7(5)).

7. When preservation ends and what follows

The money stays preserved until the court revokes the order, until its enforcement is terminated, or until a measure for the enforcement of a judgment you have obtained in the meantime becomes final (Article 20). After judgment, enforcement must be commenced in the state where the account is held, under that state’s rules, and the preserved money generally reaches the creditor only in the course of it; for accounts in Slovakia and Czechia our enforcement recovery service follows on.

Summary for the creditor

• Immediately after issue: monitor service of the order on the bank and the bank’s declaration.
• Within three working days of the declaration: apply for release of any excess and initiate service on the debtor if the creditor does this in the Member State of origin.
• Within 30 days of the application or 14 days of the order: bring the action if it has not been brought already.
• After judgment: commence enforcement in the state where the account is held.

We handle the application for the order, the evidence of risk and the subsequent proceedings under our European Account Preservation Order service. Where the account is held in Czechia, see also our answer on a debtor’s account with a Czech bank, and for Poland on preserving the account of a Polish debtor.