European Account Preservation Order by a creditor on the bank accounts of a debtor

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European Payment Order forms

A creditor who holds a cross-border debt, as well as a valid debt instrument against the same debtor; may apply for a European Account Preservation Order in order to recover the debt.

This is a non-adversarial procedure, conceived as an alternative to national attachment procedures.

The debtor is:

  • not informed of the application for an account preservation order;
  • nor given the opportunity to be heard before the preservation order is issued.

The aim of the procedure is to make sure the debtor is temporarily unable to disburse any of the money in their bank accounts before a judge rules on the validity of the debt requiring payment.

The Account Preservation Order represents a guarantee for the creditor. The creditor can be certain that the assets will be frozen by the preservation order.

The European Account Preservation Order procedure can be combined with a European Order for Payment procedure.

Who is concerned

Any natural person or legal person holding a personal or business-related cross-border debt against a debtor (natural or legal person) living in an EU Member State (with the exception of Denmark) may apply for a European Account Preservation Order.

The European Account Preservation Order does not apply in Denmark. This means that:

  • a creditor residing in Denmark cannot apply for an attachment on an account held in Luxembourg;
  • a creditor residing in Luxembourg cannot apply for an attachment on an account held in Denmark.

Prerequisites

Cross-border dispute

A creditor's application for a European Account Preservation Order is admissible if it concerns a cross-border dispute. The cross-border nature of the dispute is assessed at the time of application for the account preservation order.

The creditor may be resident in the same EU Member State as the debtor, but the debtor's account must be held in a different EU Member State (with the exception of Denmark) as:

  • the State holding jurisdiction over the application; or
  • the State in which the creditor lives or is headquartered.

Example: A creditor and a debtor both live in Luxembourg, but the debtor's account is in France.

Permissibility

The account preservation order may be granted in the following 3 cases:

  • before the creditor has initiated legal proceedings in a Member State against the debtor; or
  • at any time during the legal proceedings until:
    • the decision in the legal proceedings is handed down;
    • a court settlement is approved by or concluded with the debtor; or
  • after the creditor has obtained, in a Member State, recognition of the debtor's obligation to pay, by means of:
    • a legal decision; or
      • a court settlement; or
      • an authentic act.

The creditor may apply directly to the judge:

  • if they hold a legal decision, court settlement or authentic act; or
  • if they have other documents which prove the existence of the debt.

A person with a debt without a debt instrument is a person whose debt has not been formalised by one of the following means:

  • a legal decision;
  • a court settlement;
  • an authentic act.

The creditor may not apply for an account preservation order if the debt arises from:

  • matrimonial or patrimonial regimes governing relationships comparable in effect to marriage (e.g. a civil partnership or a PACS);
  • wills and testaments and inheritances (including maintenance obligations resulting from a death);
  • social security debts;
  • arbitration decisions.

In addition, creditors may not make use of this type of attachment if bankruptcy, business liquidation or debt agreement proceedings have already been initiated against the debtor.

The European Account Preservation Order procedure cannot be initiated:

  • through the authorities in different EU Member States if the debtor holds bank accounts in those different States.

However, it can be initiated through the authorities of a single Member State if it concerns several bank accounts held by the debtor:

  • in the same bank; or
  • in different banks located in several Member States.

Unattachable monies

Monies exempt from attachment under the law of the Member State where the bank account is located cannot be seized.

Admissibility and validity of the application for an account preservation order

The creditor has grounds to take action, if:

  • they can prove the existence of a debt, and the amount thereof, by producing a debt instrument, or demonstrate the likely existence of the debt by any appropriate means;
  • there is proof of sufficiently serious circumstances jeopardising the recovery of the debt;
  • it is important that the debt be covered by a legal protection measure since, without an order, it would be more difficult to recover the debt, owing to genuine risks relating to the debtor's capacity to:
    • deplete their assets;
    • destroy or conceal their assets;
    • sell/cede their assets for less than their value, for an unusual amount or in an unusual way.

The creditor may choose to initiate an account preservation procedure on condition that their aim is to ensure:

  • the subsequent enforcement of a legal decision;
  • the enforcement of a legal decision, a court settlement or an authentic act requiring the debtor to pay the debt;
  • that debts which are not yet enforceable are paid, if they result from a past settlement or event, and the amount thereof can be determined. In particular, the latter guarantee pertains to debts in connection with proceedings:
    • in civil matters of delict or quasi-delict;
    • in civil matters seeking to remedy damage or obtain restitution further to an offence.

Otherwise, the creditor must first apply to a judge.

Preliminary steps

Finding the magistrate having jurisdiction in the individual case

The territorial jurisdiction of the judge issuing an account preservation order depends on:

  • the territory where the debtor resides; or
  • the place where the contractual obligation has been or is to be enforced;
    In this case, the place of enforcement of the obligation depends on the application:
    • for sales of goods: the place in a Member State where the goods were, or should have been, delivered;
    • for the provision of services: the place in a Member State where the services were, or should have been, provided;
    • the territory in which the consumer is domiciled, if the debtor is a private consumer;
    • in matters of delict or quasi-delict: the territory in which the harmful event occurred or is likely to occur.

To obtain an account preservation order enforceable in Luxembourg, pertaining to:

  • a debt of less than EUR 15,000, the creditor must apply to the magistrate holding jurisdiction, namely:
    • Luxembourg; or
    • Esch-sur-Alzette; or
    • Diekirch.
  • a debt of more than EUR 15,000, the creditor must apply to the District Court holding jurisdiction, namely:
    • Luxembourg; or
    • Diekirch.

The civil procedure rules which apply are the rules of Luxembourg common law.

Before the competent magistrate, the creditor must file their application in the form of a petition. The procedure is verbal, and the parties do not necessarily need representation by a lawyer.

Before the competent district court, the creditor must file their application in the form of a summons. The procedure is written. The parties must be represented by a lawyer.

If jurisdiction lies with a different EU Member State, the rules of civil procedure to be followed are the common law rules of that State.

Absence of a debt instrument

If the creditor initiates the account preservation procedure before bringing legal proceedings, they must prove to the competent judge for attachment proceedings that they intend to initiate legal proceedings, and:

  • submit the case to the magistrate within 30 days of filing an application for an account preservation order; or
  • if the European Account Preservation Order has already been granted, refer the matter to the magistrate within 14 days.

If the creditor does not comply with the time limits, the preservation order will be revoked by the magistrate.

Finding the magistrate having jurisdiction in the individual case

The territorial jurisdiction of the magistrate depends on:

  • the territory where the debtor resides; or
  • the place where the contractual obligation has been or is to be enforced;
    In this case, the place of enforcement of the obligation depends on the application:
    • for sales of goods: the place in a Member State where the goods were, or should have been, delivered;
    • for the provision of services: the place in a Member State where the services were, or should have been, provided;
    • the territory in which the consumer is domiciled, if the debtor is a private consumer;
    • in matters of delict or quasi-delict: the territory in which the harmful event occurred or is likely to occur.

Application for information regarding the debtor's accounts

If the creditor does not know the debtor's bank account details, they must first collect a number of pieces of evidence before filing their application for an attachment order with the competent judge. The aim is to enable the judge to go to the authority in charge of locating the debtor's bank accounts which may be frozen.

In all cases, prior to the hearing, the creditor must ensure that they are in possession of:

The creditor is in possession of an enforceable act

The creditor must meet a number of conditions before they can obtain information pertaining to the debtor's accounts:

  • they must provide several elements of proof demonstrating that the debtor holds several accounts in a Member State. Such proof is admissible in any form, as long as it is pertinent and conclusive. It may be in the form of correspondence, bank statements, proof of payment, testimony, etc.;
  • the creditor must not know:
    • the name and/or address of the bank;
    • the IBAN or BIC of the account in question;
    • any other bank number enabling the bank to be identified.
The creditor holds an authentic act that is not yet enforceable

The creditor must collect documents to demonstrate to the judge that:

  • the amount that is to be attached under the preservation order is significant in light of the circumstances of the case (its significance in relative value rather than in absolute value is at issue);
  • it is crucial to obtain information on the debtor's accounts, because without that information, there is a danger that the debt may not be recovered;
  • without an account preservation order, the applicant's financial situation could worsen significantly.

In Luxembourg, the authority in charge of obtaining information from an executing Member State is the Financial Sector Supervisory Commission (Commission de surveillance du secteur financier - CSSF).

The authority in charge of gathering the information may encounter 2 scenarios:

  • either it obtains the information on the debtor's account, in which case, it reports to the judge;
  • or it is unable to obtain the information pertaining to the debtor's bank account: in this case, it informs the judge, who must immediately refund the creditor's monetary deposit.

The conditions governing the transfer of such information between the bank and the authority in charge of collecting the information vary from one Member State to another.

The debtor will only be informed of the procedure by their bank 30 days after the bank has forwarded the information to the authority seeking it, to ensure the European Account Preservation Order can be effectively enforced.

How to proceed

Filing the application for the European Account Preservation Order

The creditor must file their application with the competent judge using the 'Application for a European Account Preservation Order' form (Annex I) (see 'Online services and forms').

There must be no other parallel applications in progress. A parallel application for an attachment, filed by the creditor, is another application for a monetary attachment (for example, filed in a different country) for:

  • the same cause, i.e. the same contract or the same damaging event;
  • the same purpose, i.e. the same objective for which the application is filed;
  • the same debtor.

To prevent any parallel proceedings, the creditor must include 2 declarations with their application for an account preservation order:

  • a declaration which, if applicable, indicates:
    • any other applications that have been filed with a different court or a different authority, seeking an equivalent order at national (rather than transnational) level, against the same debtor, for the purpose of securing payment of the same debt; or
    • if they have already obtained such an order;
  • a declaration listing any applications for a European Account Preservation Order which have been rejected because they were deemed inadmissible and/or unfounded.

After filing the application, the creditor will be summoned by the clerk of the competent court.

Testimony as a means of proof is acceptable. The creditor and/or their witnesses will be heard if the judge deems it necessary.

During the European Account Preservation Order proceedings, if the creditor obtains a national attachment order against the same debtor for the same debt, they must:

  • immediately inform the judge dealing with the European Account Preservation Order;
  • immediately inform the judge dealing with that order of any future implementation of the order at national level;
  • inform the judge of any equivalent national application for an attachment order which has been rejected because it was deemed inadmissible or unfounded.

The judge overseeing the European Account Preservation Order will assess whether it is still worthwhile issuing that order either wholly or partly, depending on the specifics of the case.

Supporting documents

The creditor's application must be accompanied by copies of the following supporting documents:

  • the legal decision; or
  • the court settlement; or
  • the authentic act.

If the creditor is not in possession of one of these documents, they may submit any relevant document to prove the validity of their application, such as:

  • invoices; or
  • acknowledgements of debt.

In producing the documents proving the validity of their application, the creditor must conform to the means of communication accepted by the Member State in which the competent judge sits.

When the creditor has not provided all the requisite information and documents, the judge can require the creditor to supplement or rectify the application within a time limit set by the judge. If the creditor fails to comply with that request within the specified time limit, the application for an account preservation order will be rejected.

Creditor's monetary deposit

To prevent abuse of the system, the judge ruling on an account preservation order may require the creditor to put down a monetary deposit before granting that order.

That deposit must be paid if the creditor has not yet obtained a debt instrument, i.e. a decision, a court settlement, or an authentic act.

The means of payment accepted for the monetary deposit depend on the Member State where the competent judge sits.

Decision and content of the account preservation order

The judge will hand down their decision, at the latest, on the 5th working day after the day on which the creditor filed or supplemented their application.

The order is issued to the creditor.

Appealing a decision to refuse an order

The creditor may appeal the judge's decision using the 'Appeal against a decision on a remedy' form (Annex IX) (see 'Online services and forms').

In Luxembourg, for any initial order, the creditor may file their appeal with:

The creditor has 15 days to file their appeal, from the date of notification of the initial order.

If the judge wholly rejected the application for an order, the appeal procedure will operate in the same manner as that in the first instance: without the debtor being informed of the procedure.

Notification to the debtor

When the debtor:

  • is domiciled in the same Member State as that in which the Account Preservation Order was issued: notification of the order is served by the judge or the creditor, depending on the law of the competent Member State;
  • is domiciled in a different Member State to that in which the Account Preservation Order was issued: the attachment order procedure is forwarded by the judge or creditor to the competent authority for acknowledgement, transfer and notification of the order in the State in which the debtor is domiciled. That authority will then take the necessary steps to ensure that notification of the documents is served in accordance with the law of that Member State.

In Luxembourg, the attachment order is notified to the debtor by a bailiff.

When the European Account Preservation Order applies to multiple banks, only the first declaration stating that an attachment has been obtained for the amounts will be served on the debtor by the judge or creditor.

Any subsequent declaration indicating that other monies have been attached is brought immediately to the debtor's attention.

Implementation of the account preservation order by the bank

Once a final decision has been handed down and all avenues of appeal exhausted, the judge will send a copy of the order to the bank, which will immediately freezes the debtor's account(s) up to the value of the claimed sum.

The bank will then report the following information to the judge, within 3 to 8 working days from the implementation of the order:

  • whether or not a preservation order has been implemented on the target accounts;
  • the amount frozen;
  • the date on which the order was implemented.

If the debtor's account is held in a different Member State to the State in which the creditor lives or is headquartered, the bank will send the declaration:

  • to the judge who issued the order, by any appropriate means;
  • to the creditor, by registered post with confirmation of receipt, or by equivalent electronic means.

When the debtor's account is held in a Member State other than that of the jurisdiction applied to for the account preservation order, the bank will send its declaration to the competent authority in the State where the bank is headquartered.

In Luxembourg, that authority is the Financial Sector Supervisory Commission.

If the creditor has obtained the freezing of an amount that exceeds their debt as specified in the order, they must take all necessary steps to release that excess, using the 'Request to release over-preserved amounts' form (Annex V) (see 'Online services and forms'). The creditor must take action within 3 days of receiving the declaration.

Online services and forms

Online services

European Payment Order forms

on the European e-Justice Portal

Other language(s)

Who to contact

Magistrate's Court

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District Court

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Related procedures and links

Procedures

Links

Legal references

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