Brussels, 30/10/2007 (Agence Europe) - On Thursday 25 October, Parliament adopted an own initiative report responding to the Commission Green Paper which provides for setting up a procedure quickly to block bank transfers at the request of the creditor in cases where there is doubt over the debtor's integrity.
In giving their backing to the report by Kurt Lechner (EPP-ED, Germany), MEPs gave their broad support to the Commission initiative of October 2006 “aimed at establishing a cross-border European procedure for temporarily freezing bank deposits”, in addition to national arrangements already in place in member states (see EUROPE 9292). They felt, however, that the transfer should only be blocked temporarily and not cancelled. Although cross-border bank transfers have increased considerably in number over the last few years within the Single Euro Payment Area (SEPA), temporary freezing has not been harmonised at European level, and difficulties are experienced in terms of both legislation and language. This causes problems since measures have to be taken quickly to be effective (before the debtor can cash the transfer). Although the text adopted supports the Commission proposal, MEPs highlighted some points which, they believe, should be picked up in future legislation: - there should only be temporary freezing of bank deposits and, under no circumstances, should there be reimbursement of the creditor; - it should only be a summary procedure and it has to be demonstrated that the creditor's rights are in jeopardy; - this procedure must be followed, within a set time limit, by main proceedings brought by the plaintiff in the member state where the account is held; - the rights of the debtor have to be guaranteed, particularly with regard to damage to his reputation and he must be guaranteed the wherewithal on which to subsist; - consideration should be given to creditor liability where a bank account has been frozen without good reason; - lastly, time limits should be introduced to ensure orders to freeze deposits are carried out quickly (notification of the bank the following day and processing within 24 hours of identification of the account).
After the adoption of the report, the Italian Banking Association (ABI) said in a press release that it supported the new European procedure insofar as it leaves “unaltered” already existing national regulations. While this procedure must effectively offer better protection to the creditor, the debtor must not be forgotten, the ABI says. “This procedure must not be used to squeeze debtors,” said an ABI representative who welcomed MEPs' stance on this point. A further essential point, according to the ABI is the principle of rapid recovery of credit, in that late payments and non-payments compromise the interests of businesses and consumers. (B.C.)