On 18 January 2017, a new European Regulation enters into force which makes it possible for creditors to freeze bank accounts of non-paying debtors in the whole European Union, with the exception of the United Kingdom and Denmark. It remains to be seen how this “European Account Preservation Order” will work out in practice, but in any event, it is a welcome addition to the procedural toolbox for cross-border debt recovery.

Prejudgment attachment
Internationally, Dutch procedural law concerning attachments and freezing orders is rather “creditor friendly”. It is relatively straightforward to attach almost any kind of asset (bank accounts, receivables, movable and immovable property etc.) in the Netherlands, before there is an actual judgment or payment order against the debtor in question. With regard to these “prejudgment attachments” the Dutch system differs greatly from many other legal systems within Europe, where – before there is a judgment – such measures are often far more difficult or even impossible.
The new Regulation makes the prejudgment attachment of bank accounts in international cases possible throughout Europe. In the terminology of the Regulation, the measure is called a preservation order. It requires a court order. The court has ten working days to decide upon the application by the creditor. The debtor will not be heard on the application.
Room for interpretation
The court will issue the preservation order if it is satisfied that “there is an urgent need for a protective measure in the form of a Preservation Order because there is a real risk that, without such a measure, the subsequent enforcement of the creditor’s claim against the debtor will be impeded or made substantially more difficult”. Clearly, this test leaves ample room for interpretation. It remains to be seen how this will be dealt with in practice. Moreover, there is a substantial chance the approach will vary from member state to member state. Ultimately, the European Court of Justice will have to provide clarity regarding its interpretation, but that will probably take a few years.
The process
The preservation order issued by the court is to be enforced by the local authorities in the member state where the bank account is kept. The enforcement of the order has the effect of freezing the bank account up to the amount of the creditor’s claim.
The new Regulation also provides interesting possibilities for the enforcement of judgments. For example, under certain conditions it imposes an obligation on the banks in member states to provide information about bank accounts kept by the debtor.
All in all, the entry into force of this Regulation provides for yet another interesting addition to the European procedural toolbox. It remains to be seen how it will work out in practice, but in any event, the Regulation strengthens the position of creditors vis-à-vis non-paying European debtors.