The Commission of the European Communities has issued a Green Paper relating to the attachment of bank accounts across the EU. The purpose of the Green Paper is to launch a consultation on this issue and it proposes, as a possible solution, the creation of a European system for the attachment of bank accounts.
The Green Paper was issued as a result of difficulties that the Commission had identified in cross-border debt recovery. Currently, execution of a court order after it has been declared enforceable in another member state is a matter of national law. Given the disparity in the laws of the member states regarding enforcement, efforts to collect cross-border debts are often hampered, with creditors incurring greater costs and facing delays due to differences in legal systems, procedural requirements and language barriers.
In practice, a creditor who wants to enforce a monetary claim in Europe, usually does so by obtaining an attachment over the debtor’s bank accounts. However, whilst debtors are able to move their monies instantaneously from one account to another and from one member state to another, creditors are not able to block the movement of such monies with equal rapidity.
Since the enforcement problems surrounding cross-border debt recovery are potentially an obstacle to the proper functioning of the internal market, community action in this area needed to be considered. A possible solution proposed by the Commission is the creation of a European order for the attachment of bank accounts which would allow a creditor to secure a sum of money due to or claimed by him, by preventing the removal or transfer of funds held to the credit of his debtor in one or several bank accounts within the territory of the EU.
The Green Paper sets out 23 questions on which it invites parties to comment on before 31 March 2007. The questions range from whether a community instrument for the attachment of bank accounts is needed to improve debt recovery in the EU, to, how the attachment of joint and nominee accounts should be dealt with.
Once comments have been received by the Commission, it intends to organise a public hearing. Whilst the decision as to whether or not to initiate legislation in this area would be subject to an impact assessment, the debate initiated by the Green Paper may result in EU action.
Please click here for the Green Paper.