As a creditor, how do I get my money if my debtor banks abroad?

Attaching the debtor's assets abroad comes with a variety of obstacles. The creditor has to go to the court of the member state where the debtor banks to make an attachment. So that the creditor has to deal with a foreign legal system in addition to a foreign court. Based on new rules, seizing the creditor's bank account elsewhere in Europe will become easier as of Jan. 18, 2017. Indeed, an attachment order can be made in Dutch, before a Dutch judge and with one's own Dutch lawyer.

Seizure in Europe simplified

The procedure for issuing a European bank attachment can be used before and during trial (so-called precautionary, protective attachment) but also after a court has ruled on monetary claims in civil and commercial matters in a cross-border context.
The regulation allows the Dutch court to issue a so-called attachment order allowing the creditor to seize the bank account of a debtor in another member state. An important advantage here is that the creditor does not have to be familiar with the bank where his debtor banks, it is sufficient to indicate where it is suspected that the debtor banks.

How does the creditor seize the debtor with a foreign bank account?

I will discuss some key points of the procedure. First of all - in brief - a request can be submitted to the preliminary relief judge of the court using a standard form. The condition is that - as is already common in the Netherlands - the creditor has already obtained a court decision or has started or will start legal proceedings. In addition, it is not mandatory to be represented by a lawyer.

However, the regulation has a further condition that is not common in the Netherlands for bank attachments. Namely, the creditor must convince the court that there is an urgent need for the attachment, given the real risk that without this attachment, the subsequent collection of the creditor's claim against the debtor will be hindered or made impossible. In the Netherlands we are familiar with this requirement for, among other things, the attachment of (un)movable property, registered shares and bearer rights.
If a prejudgment attachment is made and the creditor has therefore not yet obtained a court decision on his claim, the creditor must first of all provide sufficient evidence to convince the court that his claim is likely to be upheld. In addition, the creditor must provide (financial) security in an amount sufficient to prevent abuse of the proceedings. The court may depart from this only if the court finds the provision of security inappropriate. How this security should be provided depends on national law. Thus, in the Netherlands, for example, security can be provided in the form of a deposit or a bank guarantee. The court makes an estimate of the possible damages a debtor may incur as a result of the attachment, and security should then be provided for that amount.
Once the attachment order is obtained, it must still be put into effect. This is done according to the procedures in effect in the state where it is to be enforced. If the debtor banks in Germany or France, the creditor must have the bank attachment order - as in the Netherlands - served by a bailiff. In England, the bank attachment order must also be served, but there is no special officer in charge of serving the attachment documents.

Conclusion

The conclusion is that the assessment framework for the European bank attachment is heavier than for the Dutch bank attachment. Firstly, because the creditor must prove that there is an urgent need because otherwise possible recourse will be hindered. In addition, the creditor must provide (financial) security when levying a prejudgment attachment. This may discourage creditors from using the attachment order.

So the procedure itself has been simplified but whether it will actually become easier to obtain an attachment order remains to be seen.