As technology evolves and the world becomes more dynamic, financial instruments available, such as easy-to-get-and-use cards that allow online payments and money transfers, low cost money exchange and fast online shopping, are used by a greater number of people. But, on the other hand, money used via such financial instruments might be of interest for others as well.
More precisely, a question arises: can the money passing by a REVOLUTionary account linked to a card be claimed by the card owner’s creditors? This questions is of huge practical interest for Romania since this is a significant market for the providers of such REVOLUTionary facilities.
In a general sense, a problem that creditors run into when trying to recover money owed by debtors is that of foreclosure. Forced enforcement in Romania refers to a legal procedure by which a bailiff assesses the claims contained in the enforceable titles, in order to obtain, in kind or by equivalent, the fulfillment of the debtor’s obligations.
This procedure is used when a person or entity voluntarily fails to fulfill an obligation established by an enforceable title, such as a court order or contract. Enforcement can be ordered in various situations, such as the recovery of debts, the eviction of a home or the recovery of assets.
Enforcement procedures are regulated by the Civil Procedure Code, starting with art. 622 and are subject in some way to the control of the courts. The bailiff is the one who implements these procedures and acts at the creditor’s request, ensuring the compliant and legal execution of all enforcement acts within this procedure.
Enforcement may involve, according to art. 624 of the Code of Civil Procedure, the pursuit of the movable and immovable assets of the debtor or belonging to third parties held liable, under the law, for the debtor’s obligations, in order to satisfy the creditors, as well as the delivery to the creditors of the assets, provided in the enforcement title, that are owned without right of debtor.
It is important to note that they can be enforced the obligations whose object consists in the payment of a sum of money, the delivery of an asset or its use, the abolition of a construction, a plantation or other work, the entrustment of the minor, the establishment of the home and visiting him or in taking another measure established by the enforceable title . Also, the debtor’s income and assets can be subject to enforcement if, according to the law, they are traceable and only to the extent necessary to realize the creditors’ rights.
Without going into too many details of the procedure, it must be stated that enforcement can only be started when the claim is certain, liquid and enforceable. Term claims, as well as conditional ones, cannot be enforced, but they can participate, under the law, in the distribution of the sums resulting from the enforcement of the assets belonging to the debtor.
Returning to the enforced pursuit of the debtor’s assets, there is a situation that raises problems in practice, namely seizure. Amounts of money, securities or other traceable intangible movable assets owed to the debtor or held on his behalf by a third person or that the latter will owe him in the future, based on existing legal relationships, as well as tangible movable assets of the debtor held by a third party on his behalf are subject to enforcement by attachment.
Art. 781 para. (2) of the Code of Civil Procedure shows the fact that in the case of seizure of money from bank accounts, both the creditor balance of these accounts and future receipts may be subject to enforcement by seizure, in compliance with the limits provided for in art. 729, if applicable. In order to resort to this method of forced execution, a request from the creditor is required, addressed to the competent bailiff, who will proceed to seize the sums of money from the debtor’s bank accounts, without a summons, based on the decision approving the forced execution.
Thanks to the evolution of technology, more and more people have the opportunity to benefit from bank accounts opened at foreign banking institutions, on the territory of third member states of the European Union. Basically, those interested can open a bank account in a foreign country, without physically traveling to that country, only through a means of remote communication.
These foreign bank accounts work like bank accounts opened at a banking institution in Romania, with the possibility of associating several debit cards with them, be they physical or, more recently, even virtual. Therefore, those who open such bank accounts can easily withdraw money as well as make payments, both online with the card and in stores, as well as withdraw cash from third-party ATMs.
In such a situation, the entire enforcement procedure becomes quite difficult, since the seizure of the sums of money in the accounts opened in foreign countries, members of the European Union, can no longer be carried out according to the procedure established by the Romanian Civil Procedure Code. This circumstance is due to the fact that the Romanian authorities do not have jurisdiction over foreign banking institutions, thus the bank accounts opened at these institutions are protected from the enforced execution procedure initiated according to the Romanian Civil Procedure Code.
Both the creditor and the bailiff can rely on the provisions applicable in Romania in this matter only for the forced execution of goods and sums of money from bank accounts located on the territory of Romania. If the goods are located in the territory of another member state, or in the case of bank accounts opened in the territory of another member state, the enforcement procedures are regulated by the legislation of the member state of enforcement. In this sense, for the seizure of accounts opened in foreign member countries of the European Union, it is necessary to start the enforcement procedure applicable in these states, as provided by art. 20 para. (1) from EC Regulation no. 805/2004 of the European Parliament and the Council of 21.04.2004.
Therefore, the enforcement procedures are regulated by the legislation of the member state of enforcement, it is not possible to start the procedure in one state, for the forced execution of goods located on the territory of another state. It should be noted that a judgment certified as a European Enforcement Order is enforced under the same conditions as a judgment pronounced in the Member State of enforcement. In this sense, the mentioned regulation provides in art. 20 para. (2) a series of obligations owed to the creditor, in order to start the foreclosure procedure.
Thus, the creditor undertakes to provide the enforcement authorities in the enforcement Member State with:
(a) a copy of the judgment, which meets the necessary conditions to establish its authenticity;
(b) a copy of the European enforcement title certificate, which meets the conditions necessary to establish its authenticity;
(c) as the case may be, a transcript of the European enforcement title certificate or a translation of it in the official language of the Member State of enforcement or, if that Member State has more than one official language, in the official language or in one of the official languages of the judicial proceedings of the place where enforcement is sought, in accordance with the law of that Member State, or in another language which the Member State of enforcement shall declare that it can accept. Each Member State may indicate the official language(s) of the European Community institutions, other than its own, in which it accepts the certificate to be completed. The translation is certified for compliance by a person authorized in this regard in one of the member states.
Finally, the problem arises when these foreign banking institutions want to expand on Romanian territory, through branches, thus starting all the necessary procedures in order to obtain the authorization of the National Bank of Romania. Thus, in practice, we end up in the situation where these foreign banking institutions register their branches on Romanian territory, which, for various reasons including opportunity, do not become operational, so as to administer and manage the bank accounts opened by Romanian citizens foreign parent company. These branches end up having a purely administrative role, having no responsibilities regarding the relationship between the client and the parent company, so the accounts opened on the territories of foreign states, members of the European Union, continue to remain under the management of foreign banking institutions, not being administered by the branches opened in Romania.
Returning to the seizure of the sums of money in these foreign accounts, enforcement can only be started on the basis of EC Regulation no. 805/2004 of the European Parliament and the Council of 21.04.2004, not being allowed to evade these provisions by issuing an address for the establishment of seizure , pursuant to art. 783 para. (1) of the Civil Procedure Code, addressed to the branches of foreign banking institutions located on the territory of Romania.
In such a situation, the branches located on the territory of Romania, which do not administer and do not manage the bank accounts opened on the territory of a foreign state, have no way to comply with the request for the establishment of the seizure. Thus, in practice, we arrive at the formulation of a request to validate the seizure, which is resolved by the competent court . In this sense, it should be mentioned that, according to art. 56 para. (1) of the Civil Procedure Code, any person who has the use of civil rights can be a party to the lawsuit, and according to art. 43 para. (1) from Law no. 31/1990 regarding commercial companies , the branches are dismembered without legal personality of the companies and are registered, before starting their activity, in the Trade Register of the county in which they will operate.
Of course, according to art. 56 para. (2) of the Code of Civil Procedure, associations, companies or other entities without legal personality may be sued, if they are established according to the law. This last phrase, if they are constituted according to the law , has an important role in the present discussion. When a branch is set up strictly for administrative purposes, without a delegation of powers, so without it acquiring rights and obligations specific to the activity of the parent company, in connection with which certain disputes arise, the branch is not set up with the aim of is subrogated to the parent company. Therefore, in the absence of an express delegation regarding these rights and obligations, the branch does not acquire the procedural capacity of use.
Therefore, one of the solutions encountered in practice is that of admitting the exception of the lack of procedural capacity to use and rejecting the request to validate the attachment for these reasons.
In other words, when resolving this request, it must be taken into account, in addition to the previously presented aspects, regarding the lack of procedural capacity to use and the fact that ignoring EC Regulation no. 805/2004 of the European Parliament and the Council of 21.04.2004 by an individual can still be excused, however, when even an authority ignores this regulation, there are serious infringements on the rights of those to whom the regulation confers some protection.
Therefore, ignoring the regulation is completely contrary to Union law, including violating a constitutional principle, namely the supremacy of European law. Thus, according to art. 148 para. (2) of the Romanian Constitution, as a result of the accession to the European Union, the provisions of the constitutive treaties of the European Union, as well as the other binding community regulations, have priority over the contrary provisions of the internal laws, respecting the provisions of the act of accession. It is shown in para. (3) the fact that the provisions of paragraphs (1) and (2) apply, accordingly, also to the accession to the revision acts of the constituent treaties of the European Union. In any case, according to para. (4), the Parliament, the President of Romania, the Government and the judicial authority guarantee the fulfillment of the obligations resulting from the act of accession and from the provisions of paragraph (2).
This principle of the supremacy of Union law is established including at the Union level. Therefore, according to art. 288, second paragraph of the Treaty on the Functioning of the European Union, the regulation has general applicability. It is binding in all its elements and directly applicable in each Member State.
It should be noted that, according to the jurisprudence of the Court of Justice of the European Union, the national court that must apply, within its competence, the provisions of Community law has the obligation to ensure the full effect of these rules, removing, if necessary, ex officio the application to any contrary provision of the national legislation, even later, without having to request or wait for its prior removal by legislative means or by any other constitutional procedure [1].
In the view of the Court, the treaties created a European legal system which is an integral part of the legal systems of the member states and has a binding character for them. With the creation of the European Communities and then the European Union, the member states transferred the rights and obligations deriving from the treaty from their internal legal system to that of the Union, limited their sovereignty and created a body of legislation binding both for citizens them as well as for themselves.
Therefore, Member States cannot adopt national laws that contradict European Union legislation, without calling into question the very legal basis of the European Union. If they do, however, EU law should prevail over national laws and take precedence over them in the national courts of the country concerned.
Moreover, the principle of supremacy of Union law applies to all binding acts of the European Union, regardless of whether they represent primary legislation, such as treaties, or secondary legislation, such as directives, regulations, decisions or CJEU case law. This principle affects all national acts, regardless of their nature, be they regulations, decisions, ordinances, or acts issued by the executive or legislative power of a member state, even if they were adopted after the European Union act in question[2], including affecting the provisions of a constitution national laws that contradict the Union law [3].
Or, in this context, ignoring EC Regulation no. 805/2004 of the European Parliament and the Council of 21.04.2004 constitutes a violation of both the Romanian Constitution and the Union law, a matter which in practice is not taken into account when imposing the seizure on the sums of money in the bank accounts opened in the territory other states. Thus, it is up to the national courts to correctly apply the applicable legal rules in this situation and to apply especially the Union law. On the other hand, it is up to individuals to consult beforehand with a lawyer specialized in the field, in order to determine what is the best strategy to approach in a situation like the one described above.
To conclude with, there is nothing REVOLUTionary in the Romanian civil procedure, as this procedure must comply with European law and follow the legal path for the foreclosure of funds managed by employing innovative financial instruments available.
This article was prepared, for the blog of the civil society of lawyers Costaș, Negru & Asociații, by Mr. Bogdan Ioan Mihai Șuta (Cluj Bar Association), Ms. Clara Dohotar (Bucharest Bar Association) and Dr. Cosmin Flavius Costaș (Arad Bar Association).
Costaș, Negru & Asociații is a civil society of lawyers with offices in Cluj-Napoca, Bucharest and Arad, which offers assistance, legal representation and consultancy in several practice areas through a team composed of 20 lawyers and consultants. Details regarding legal services and team composition can be found on the website https://www.costas-negru.ro. All rights for the materials published on the company’s website and through social networks belong to Costaș, Negru & Asociații, their reproduction being permitted only for informational purposes and with correct and complete citation of the source.
[1]CJEU, judgment of 9.03.1978, Amministrazione delle finanze dello Stato v Simmenthal (case 106/77);
[2]CJEU, judgment of 9.03.1978, Amministrazione delle finanze dello Stato v Simmenthal (case 106/77).
[3] CJEU, judgment of 17.12.1970, Internationale Handelsgesellschaft mbH v. Einfuhr- und Vorratsstelle für Getreide und Futtermittel . Request for a preliminary ruling: Verwaltungsgericht Frankfurt am Main – Germany (case 11-70), judgment of 12.04.1984, Wünsche Handelsgesellschaft GmbH & Co. against the Federal Republic of Germany . Request for a preliminary ruling Verwaltungsgericht Frankfurt am Main (case 345/82).
