Cross Border Debt Recovery

On December 1, 2020, Legislative Decree No. 152/2020 entered into force, bringing Italian law into line with (EU) Regulation No. 655/2014, which establishes a procedure for the European Account Preservation Order. This procedure is aimed at facilitating cross-border debt recovery in civil and commercial matters.

One of the aspects of (EU) Regulation No. 655/2014 which helps to facilitate the attachment of bank accounts, and thus the recovery of the debt, concerns the issuance of the attachment order. The order is issued ex parte (inaudita altera parte) by the court of the Member State having jurisdiction on the matter and is notified, and thus enforced, against the bank where the debtor holds his current accounts and deposits. Hence, the order overrides the borders of the Member State where it was issued and produces a "surprise effect" so that the debtor does not rush to transfer his securities elsewhere. 

The aforementioned legislative decree integrates the provisions of (EU) Regulation 655/2014 by adapting the Italian legal system to the European one.

Among the main innovations introduced by the aforementioned legislative decree is that provided for in article 3 whereby, in order to obtain information on bank accounts, it is necessary to address the President of the Court of the place in which the debtor has his residence, domicile or head office, who orders the search for such information using the telematic methods referred to in article 492-bis of the Code of Civil Procedure. (telematic search of assets to be attached). This differentiates the attachment at issue from the classic one (article 671 of the Code of Civil Procedure) in which the problem of identifying the banks and accounts arises at the time of execution of the attachment and not at the time of its authorisation. In order to overcome the information gap, (EU) Reg. 655/2014 allows to request the judicial authority to obtain the information from the competent authorities in the Member State of enforcement.

It is also worth mentioning Article 5 of the Legislative Decree no. 152/2020 which concerns the execution of the European Account Preservation order. It is executed on bank accounts according to the procedure of third-party seizure (article 678 of the Code of Civil Procedure, which in turn refers to article 543 et seq. of the Code of Civil Procedure) following its notification or communication to the debtor. In the absence of a specific indication in the law provision, the locus rei sitae criterion seems to be applicable, to be identified, at the choice of the seizing creditor, at the head office or branch of the bank where the debtor's account to be seized is held.

Should one wish to appeal against the European Preservation Order (article 33 of EU Reg. 655/2014), Article 6 of Legislative Decree no. 152/2020 identifies the jurisdiction of the judge of the Member State of origin that issued the order ex parte (inaudita altera parte) (in Italy, the monocratic judge of the court has jurisdiction). In the case of opposition to the enforcement of the order, on the other hand, the court of the place where the debtor has his residence (in the case of a natural person) or his seat (in the case of a legal person) has jurisdiction. 

Subsequently, Article 9 of the Legislative Decree in question provides that in all proceedings relating to appeals, the parties must mandatorily be assisted by a lawyer. Finally, attention is drawn to article 10 of Legislative Decree no. 152/2020 which, referring to other rules, identifies the amount of the court fee (so called “contributo unificato”) for the institution of one of the proceedings provided for by (EU) Reg. 655/2014. The value of the court fee amounts to Euro 98.00 with increases in appeal proceedings.

The material in this article does not cover all aspects of the topics discussed. It is for informational purposes only and does not constitute, nor should it be construed as, legal advice or opinion.