Improving the efficiency of the enforcement of judgments in the EU: attachment of bank accounts (debate) 
President
The next item is the report by Mr Lechner, on behalf of the Committee on Legal Affairs, on the Green Paper on improving the efficiency of the enforcement of judgments in the European Union: the attachment of bank accounts.
Kurt Lechner
rapporteur. - (DE) Madam President, that was an interesting debate. We now move on to a very different subject area. We will see if we can achieve an outcome sooner or later.
There is a saying which, I presume, is understood throughout Europe, namely that money does not bring happiness, but it does bring peace of mind. In that spirit, let me start by wishing all our citizens in Europe peace of mind.
However, if you are owed money by another person, if someone owes you money from a sale, damages or similar, this often gives cause for concern rather than peace of mind. Will the debtor evade his commitments? Will he conceal his money or his assets, perhaps at an even later hour than our debate this evening?
All Member States have procedures which aim to prevent this from occurring. They include attachments, injunctions, arrest and seizure: there are many different terms. Procedures vary very widely and the situation is extremely complicated, and there is of course the language issue as well. Anyone wishing to make use of Member States' various cross-border procedures may well find that the horse has bolted, or as we say in Germany, the hare is already on the other side of the hill. In other words, the debtor has had time to hide his assets.
This is now a widespread problem across Europe's borders, and it is becoming increasingly pressing given that we are all aiming for a single payment area with cash-free transactions. That means that the opportunities to hide assets on the other side of the hill are steadily growing. That is why the Commission has taken the initiative and, I would emphasise, is quite right to do so. It has presented a very good Green Paper which is comprehensive and detailed, albeit with some points which will undoubtedly require further clarification. That is still ahead of us and is the purpose of the hearing. At this stage, the European Parliament cannot deal with all aspects in detail, and neither can I, so I shall simply mention some of the key points.
First of all, although this can really be taken for granted, the report is only about the attachment of bank accounts and temporarily freezing bank deposits. It is not about final settlement. Secondly, it is only about financial assets held in bank accounts. It does not deal with injunctions or the attachment of other assets. That raises the question of whether our purposes would really be served through the harmonisation of 27 different systems. In my view, that would be an extremely unwieldy approach and would take forever to achieve. It encroaches on so many other areas that it would not be helpful. The right approach is what the Commission has in mind: an independent and additional European procedure, preferably in the form of a regulation, to exist in parallel to the national provisions, which would remain in force. I should also mention the 'Brussels I' Regulation at this juncture. The Regulation which already exists is not adequate. The creditor must not only demonstrate credibly and summarily that he has a claim but must also demonstrate the risk.
Our particular concern, which I share, is to protect the creditor. What I do not want, under any circumstances, is a situation in which creditors or third parties suffer harm precisely because we have a European regulation. That would reverberate on Europe itself. In some cases, attachment without just cause can destroy a person's livelihood. I would simply like to mention the main points: that a creditor may be liable for damages arising for the debtor, that the creditor should be obliged to institute the main proceedings within a fixed time limit, that the creditor may be required to provide security, that the debtor should be entitled to appeal, that a procedure should not be selected which takes an eternity but which is broadly in line with the previous proceedings, that there should be provisions preventing too much money being frozen for the benefit of the creditor, and that the debtor must be guaranteed the wherewithal to live on.
There is the problem of trust accounts. If there is to be any possibility of attachment here - and I will leave that open - they certainly need to be specially protected. The same applies to joint accounts, although this is not the same thing; in fact, the two are not directly related. The point is that it is also important to protect third parties, and special protection measures are required for any third parties involved.
I would just mention that standardised formal notices would be useful for banking communications and, in this connection, would like to conclude by saying that studies comparing the laws in force as well as detailed analyses are undoubtedly required. I would also, and specifically, like to thank the Commission for these comprehensive analyses and studies, and also thank all my colleagues. We worked together very well. I assume that there will be a broad consensus in favour of the report.
Franco Frattini
Vice-President of the Commission. - Madam President, I think the report is an interesting contribution to dealing with a very complex issue: the difficulty of cross-border debt recovery. I think the rapporteur, Mr Lechner, is to be congratulated for paving the way for a general European solution to the current fragmentation of national rules on enforcement, which severely hampers cross-border debt collection.
This situation is of particular concern to a creditor who has the misfortune of seeing his debtor swiftly moving his money out of a known account into another account in the same or another Member State. Therefore, the Commission welcomes Parliament's report.
I will carefully consider the main concerns expressed by the rapporteur and by Parliament in relation to the Green Paper. In particular, the form and the scope of the possible Community instrument, the effects of future procedure, the legal condition for granting an attachment order, the compensation of costs and the protection of debtors are important issues that have been highlighted by the rapporteur. I can confirm to you that any proposal or communication in this area will be preceded by an in-depth evaluation and impact assessment, in close cooperation with this Parliament.
Sharon Bowles  
Draftsman of the opinion of the Committee on Economic and Monetary Affairs. - Madam President, I welcome the Green Paper and look forward to an early follow-up on more concrete proposals.
It is clearly in the interests of fostering cross-border trade for businesses to have the confidence to be able to recover debt. Citizens also need that confidence at an individual and private level. My opinion received unanimous support in the Committee on Economic and Monetary Affairs, not because we reached hard-fought compromises, but because there was a common view from the outset. I am pleased that almost everything that we adopted has fitted into, or been covered by, the final report by the Committee on Legal Affairs, for which I thank the rapporteur.
Two points that did not make it into the report were the possibility of applying attachment to joint accounts and the investigation of optional domestic use of the cross-border provision. In a less prescriptive form, there is an amendment concerning joint accounts that has gained support elsewhere. It is clearly a loophole if a nominal joint account enables evasion of attachment orders, but genuine third party funds must be protected.
Concerning the optional domestic use of the cross-border provision, I note what colleagues in the Committee on Legal Affairs said about the measure only being possible cross-border, be that for legal reasons or for practical reasons of achieving something in a reasonable timescale. However, unless alternative remedies exist in those Member States where attachment is not possible, or is extremely difficult, there could be a competitive mismatch, at least from the business aspect, with the rather unusual situation of a cross-border business being better off than a domestic one. Perhaps Member States will take note of this and competition will deliver what we do not or cannot legislate for.
Panayotis Dimitriou  
Madam President, I welcome the Commission's initiative on the cross-border regulation of the attachment and temporary freezing of bank accounts. I congratulate you in particular, Mr Frattini, as the competent Commissioner for this initiative.
The Commission's Green Paper on this issue has laid down procedures for dealing with the problem, which arises when the enforcement of court judgments is avoided because of the operation or transfer of bank accounts outside national borders.
The measure under discussion is contained in the strategy for developing judicial cooperation between EU Member States. The measure is a move in the right direction; it must be completed soon with the submission of a relevant proposal. The cause of justice is not served if civil or criminal court judgments cannot be enforced. For this reason, the proposal relating to the attachment and freezing of cross-border bank accounts that is under consideration really contributes to the evolution and consolidation of justice. The European Parliament rightly takes a positive view of the Commission's initiative and of the judicial procedure under preparation.
The Lechner report and the opinions of the Committee on Civil Liberties, Justice and Home Affairs and the Committee on Finance set out the basic parameters for preparing a balanced proposal for a Council decision on the issue.
I congratulate Mr Lechner on his succinct but very informative and comprehensive report. As rapporteur for the Committee on Civil Liberties, I hold positions that essentially coincide with nearly all of his.
The report is expected to be approved by an overwhelming majority. It emphasises the need to meet the requirements for issuing a cross-border attachment order for bank accounts. It also stresses the concurrent need to protect the procedure against abuse and to provide guarantees of compensation to the alleged debtor if his order turns out to be to be null and void.
I believe that a freezing order can serve, at the end of court proceedings, as an enforcement measure for a final exequatur judgment. This is not Mr Lechner's view, but it must seriously be considered when the relevant Commission proposal is submitted, in the interests of preventing unnecessary duplication of proceedings.
I call on the Commission to proceed at once with preparation of the proposal on this issue.
Tadeusz Zwiefka
on behalf of the PPE-DE Group. - (PL) Madam President, Commissioner, an unquestionable weakness of the current provisions of enforcement legislation is the situation in which, having verified enforceability of a court order in another Member State, enforcement remains the exclusive competence of national legislation. Pursuant to Community legal acts currently in force there is no way of obtaining an order to attach a bank account that could be enforced across the territory of the entire European Union.
That is why a European system for an order allowing the attachment of bank accounts seems to be such an appropriate and necessary solution. It would allow creditors to secure the sums due or the value of their claim by making it impossible to withdraw or transfer funds deposited in one or many bank accounts across the territory of the European Union. Such a system should be created following the development of an additional independent procedure that would stand alongside national provisions with the proviso that it would only apply to cross-border issues. It is worth emphasising that such an order would only have a preventive effect. In other words, it would block the debtor's funds in the latter's bank account, without transferring them to the creditor's account.
The court must of course refrain from hearing or informing the debtor of the proceedings before attaching his or her bank account, otherwise the effect might be the opposite of what was intended.
The sum to be attached should be calculated on the basis of the creditor's claim. It should be emphasised, however, that the debtor must have the right to appeal the order issued, and the competent institution to hear that appeal should be the court where the order was issued.
Provision should also be made for derogations from enforcement to allow the basic needs of the debtor and his or her family to be met. Clearly, at that stage, additional comparative legal analysis would be required, as many aspects call for further investigation. Nonetheless, the fact remains that the introduction of a Community legal procedure such as a European order for the attachment of bank accounts aimed at streamlining the implementation of monetary claims and improving effectiveness would be a milestone along the road to the creation of a European economic and judicial area.
In conclusion, I should like to congratulate Mr Lechner on an outstanding and well-prepared report. The House must be well aware, of course, of how difficult it is to change Union provisions, particularly in this field.
Manuel Medina Ortega
on behalf of the PSE Group. - (ES) Madam President, I want to begin by congratulating my colleague, Mr Lechner, on the excellent report he has produced: it is both balanced and moderate.
Here at this time of the night, I cannot help but think about what attachment means. In practice, in day-to-day life, normally the creditors are large institutions with a great deal of economic power while the debtors are usually people in a much weaker economic situation. Indeed, one of the nicest poems in the Spanish language is dedicated to the attachment of a poor unfortunate worker.
It is true that if there are no attachments - if creditors do not have the possibility of recovering their claim - those who need credit will not be able to get it. Since I think we are all a bit bored, I am going to tell you a story about one of the dictatorships we had in Spain, that of General Primo de Rivera. He believed that attachment of the assets of military personnel was an insult to the military profession. He therefore banned the attachments of accounts of military personnel. As a consequence, the banks refused to lend money to the military, and the military then had to ask the General to allow them to be subject to attachments again.
That is only a story, however. I believe that Mr Lechner has managed to achieve a balance in terms of the protection of debtors' rights, but I still have one question, and Mr Frattini will probably be aware of what I want to say in this respect.
When it comes down to it, the large debtors, the people who are involved in major financial operations and who end up owing billions to thousands of defenceless people, those large debtors do not usually have their accounts in a bank in Belgium, Brussels or Strasbourg, or even in London. They usually have them in tax havens.
This, of course, is not covered by the provisions of the Commission's Green Paper. However, since I know that Commissioner Frattini has an interest in this matter, I will put the question to him: would it not be advisable to come up with a way of ensuring that these large international criminals who ruin the lives of thousands of families could also have their assets attached?
As I said, this is a scenario that is outside the scope of the Green Paper, outside the scope of what we are discussing tonight. However, since the main topics already appear to have been discussed very clearly by the previous speakers and by Commissioner Frattini himself, I think that it is something that we must examine. I am sure that Commissioner Frattini will have something to add in this respect.
In conclusion, I just want to reiterate once again my congratulations to Mr Lechner: I think that he has produced a balanced report and that the position of debtors, of poor debtors, which means most citizens, is guaranteed. I hope that the Commission will soon present us with a legislative text that enables the cross-border credit market to continue to function.
Diana Wallis
on behalf of the ALDE Group. - Madam President, I too would like to congratulate Mr Lechner on his report. I want to start with, as it were, a confession. Before I arrived in this House I was a lawyer. In fact I was not only a lawyer, but a lawyer dealing in debt collecting, often cross-border.
My experience in this area is that the most damage is caused to small enterprises that have plucked up courage to trade cross-border, and are then ruined by a bad debt and a professional debtor hiding in another country. I therefore consider this initiative to be a way, if we can get it right, of boosting Europe's economy and encouraging cross-border trade.
We have to get tough. The payment order was a step in the right direction. This is the next piece in the jigsaw. However, I have two points to make. First of all, we are dealing with cross-border cases only. We accept the reality of that constraint, but what I do not want to see is creditors having to make two applications to courts: one in respect of debtors in the home country, followed by another in a different country, cross-border. That may give the debtor warning and it may cause all sorts of complications. We therefore need to ensure that there are concurrent procedures available.
Secondly, this is, of course, a balance of interests between the creditors and the debtors. We have a good system in England, under which when you are given such an interim measure, you have to provide an undertaking to the court, in damages, to respect the interests of third parties. This may be the bank that has to organise the attachment, or a third party that might hold a joint account. I would recommend a system along those lines.
I commend the report and the ideas in it. I believe it could do much to boost Europe's economy if we get things right.
Marek Aleksander Czarnecki
on behalf of the UEN Group. - (PL) Madam President, the Green Paper on improving the efficiency of the enforcement of judgments in the European Union represents a further stage in the development of a European area of justice. I endorse the view put forward by the rapporteur in this report and support the introduction of a swift and effective procedure for obtaining an order for attachment of bank accounts in the European Union. In the context of ongoing integration in the Single Euro Payments Area, a legal provision of this nature seems to be both appropriate and desirable.
In view of the many difficulties involved in investigating claims, it is my belief that the European Union should introduce an independent additional procedure that would stand alongside national provisions. Such a procedure ought to apply only in cross-border cases and relate solely to funds in bank accounts and not to other assets. It is simply a case of provisionally securing a creditor's claim, not of finally settling it. Unjustified attachment may have serious consequences for the debtor and impact negatively on confidence in the European legal system.
I therefore believe that particular care should be taken to protect the debtor. This could involve, for instance, submission of security by the creditor, the right to object, limiting the amount liable or even a requirement for the creditor to submit an application for court proceedings to be brought regarding the main action.
Lidia Joanna Geringer de Oedenberg
(PL) Madam President, the provisions relating to enforcement legislation are often described as the Achilles' heel of the European system of justice concerning civil cases. To date, no legislative motion has been submitted regarding the actual means of enforcing judgments. Enforcing a court order after establishing its enforceability in another country is still the exclusive competence of national law.
The current variations between the principles for debt recovery in individual Member States of the European Union seriously hinder the recovery of cross-border debts. Creditors seeking enforcement of an order in another country are confronted with unfamiliar legal systems and legal requirements. They also have to cope with the language barrier, which entails additional costs and delays the enforcement procedure. Difficulties relating to the recovery of cross-border debts hinder the free movement of payment orders within the Union and impact negatively on the proper operation of the internal market. Payments that are delayed or never made endanger the interests of companies and consumers alike.
The Commission's proposal to introduce a single European legal instrument that would be independent of national legislation and stand alongside it therefore seems to be entirely appropriate, if not essential. Article 65(c) of the Treaty establishing the European Community could serve as the legal basis for such a document.
In this connection, pursuant to the provisions of the Green Paper, the creditor should have the right to submit an application for an order to be issued for the attachment of bank accounts before the start of the main proceedings. In view of the provisional nature of the procedure, the creditor should, however, be required to justify his or her claim and also the urgent need for an attachment order to be issued. Unjustified attachment can of course have very serious implications for a debtor, and can even deprive the latter of the means with which to satisfy his or her basic needs.
Other important issues are a debtor's right to contest the order and setting the amount to be paid. Setting a single limit for the sum to be exempted from enforcement at European Union level does not seem to be a good idea. Such decisions should remain within the competence of the legal system of the debtor's home country.
As regards serving orders for the seizure of assets from bank accounts, it is important to ensure that uniform standards concerning communication between courts and banks are established within the European Union. It seems essential to regulate the matter of recovery of cross-border debts by way of adoption of the relevant legal act. It is, however, important not to overlook the need to first undertake an in-depth study of the provisions already in force in individual Community countries and to assess the effectiveness of alternative solutions in relation to European provisions.
I should like to conclude by thanking Mr Lechner for a well-considered and well-prepared report.
Andrzej Jan Szejna
(PL) Madam President, the problem of effective enforcement of monetary claims across the territory of the European Union is very important in terms of ensuring proper functioning of the internal market. It is worth considering Community action in this regard. There is a very important saying that was impressed on me when I was a trainee lawyer, according to which when we do someone a favour we become indebted to them. This is sometimes true. Delaying payments or failing to make them altogether endangers the interests of companies and consumers alike. The differences in the efficiency of debt recovery that currently exist within the European Union can threaten the competitiveness of companies whose activities extend beyond the borders of a particular Member State.
The systems for enforcing orders differ between individual Member States. In some states they are more effective than in others. As things stand at present, a debtor may almost instantly transfer funds from accounts known to the creditor to other accounts located in the same country or in another Member State. This makes it practically impossible for creditors to block those funds. Furthermore, creditors seeking enforcement of an order in another Member State are confronted with a different legal system and procedural requirements. The language barrier and cost of the proceedings represent additional obstacles.
I therefore believe that we should respond positively to the proposal to create a European system to attach bank accounts. Bearing in mind the increasing integration in the Single Euro Payments Area, legal regulation of this type is both appropriate and essential. I would like to thank Mr Lechner for this report. I am sure it will represent a turning point in the Union's legal system.
Franco Frattini
Vice-President of the Commission. - (IT) Madam President, ladies and gentlemen, just a brief remark about the comments made by Mr Medina Ortega and also to thank everyone who has spoken. This European instrument, this European attachment order that is under discussion, really could complement national legislation and hence deal with the serious infringements of creditors' rights that occur on a transnational basis.
I very much agree with Mr Medina Ortega about the fact that we must give thought to attachment, or protection, as it were, in respect of people who take refuge in tax havens.
Clearly, as you are all aware, Europe has no unilateral power to act. What we must work towards, in my opinion, is closer cooperation between the judiciary, the financial investigation authorities and the major banking groups which operate in these so-called tax havens. We need to convince those countries' governments that it is ultimately in their interest to cooperate with the European Union.
Therefore, even if we do not have an active instrument in the near future, a unilateral tool to counter the system of tax havens, we ought to be able to use the instrument of democracy, on the one hand, and that of judicial and financial cooperation, on the other, to tackle what is a very real problem.
President
The debate is closed.
The vote will take place tomorrow.
