23 January 2012

EBF considerations on the European Commission proposal for a regulation to establish a European Account Preservation Order (EAPO)

The European Banking Federation notes the European Commission Proposal for a Regulation to establish a European Account Preservation Order (EAPO). The EBF appreciates the efforts to provide for effective cross-border litigation.

Key Points:

Banks generally agree on the purpose to allow debt recovery at European level to function smoothly, but are uncertain as to the proven need for such an instrument. In particular, there is some concern that the introduction of a new self-standing European procedure would imply that banks would have to bear additional administrative burden and costs for its implementation and accommodate, in the future, two attachment regimes (national and European).

EBF strongly supports the position of the European Parliament1 that costs related to the use of the self-standing European procedure should be minimised and that banks should have covered the actual costs incurred.

It is not yet possible to foresee whether the national procedures, even though left unaltered, would not be in any case affected by the introduction of the proposed instrument.

The EBF is concerned about the imbalance between the parties, biased in favour of the claimants. This is particularly so as the conditions, for obtaining an order, are not adequate, potentially leading to instances of granting an order, when this could be per se inappropriate. As a result, the European instrument could create situations of abuse and with this exacerbate problems for the banks.

There is serious concern that this wide scope covering accounts holding financial instruments might cause unintended consequences in other sectoral directives in relation to securities, where further legislative work has been announced.      

Account should be taken of, and consistency ensured with, other on-going European initiatives, such as the Securities Law Directive, Brussels I and the recently presented Data Protection package.

According to Article 17, it is possible for a claimant who does not dispose of all of the account information to request that the competent authority of the Member State of enforcement obtain information on the account. As a result, any claimant can claim that the defendant has an account in a particular Member State. This situation can lead to an excess of fishing expeditions especially in the light of the fact that there is a strong likelihood that the information required under Article 16 may not always be available.

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