Vera Jourova – Photo EC
(BRUSSELS) – Businesses, particularly small and medium-sized enterprises (SMEs), will be able to benefit from new EU rules to recover debt from debtors in other EU countries which came into force on Wednesday.
About 600 million Euros are lost every year due to long and costly legal procedures preventing companies to recover money they are owed outside their home country.
The proposed European Account Preservation Order (EAPO) can help companies by offering them a simple and cost-effective way to block funds that are owed.
Unpaid bills can seriously affect the bottom line of a company, says the EU’s Commissioner for Justice and Consumers Vera Jourova: “As a former entrepreneur, I know that Particularly small businesses often cannot afford the legal support necessary to bring back the money they are owed”.
“Thanks to the European Account Preservation Order, businesses and citizens will be able to recover millions in cross-border debts by requesting that the amount owed to them is blocked on the debtor’s bank accounts”.
Currently a business that is owed money from a business partner in another EU country has to request the blocking of the amount by a court in the business partner’s Member State according to the local rules and procedures.
This implies substantial and cost-intensive legal support, often too expensive particularly for SMEs.
The new procedure will be quicker, cheaper and more efficient for creditors.
Courts will have a maximum of 10 days to issue an EAPO and debtors will not be informed in advance of the preservation order. This guarantees that assets are not moved around or squandered and remain available for reimbursement. The EAPO issued in one Member State will be recognised in all other Member States and standard forms will be available, keeping legal and translation costs low.
European Account Preservation Order - faster, cheaper and more efficient debt recovery
