The new legal provisions on the seizure of bank account balances

The aim of this text is to inform the reader about how the seizure of bank account balances will be processed in the wake of Ministerial Order No. 282/2013, of 29 August (hereinafter the “Ministerial Order”), as previously it was considered a lengthy and relatively inefficient process.

Currently, under the terms of the Ministerial Order, the enforcement officer requests the Bank of Portugal to make available information about the institutions that are legally authorised to receive bank deposits in which the Debtor holds bank accounts or deposits.

Based on the information obtained from the Bank of Portugal, the enforcement officer sends an electronic notice through the platform created for the purpose (https://penhorabancaria.mj.pt) to the credit institutions where the debtor has a bank account or deposit.

Following this notice, the process of seizing bank deposits is expected to be rapid, given the time limits stipulated for the purposes. Generally speaking, the process is as follows:

a) through the above-mentioned computer system, the enforcement officer makes a request to freeze the balance of the account or the debtor’s share of the balance up to the seizure limit and indicating at all times, at the risk of nullity, the full identification of the debtor, as well as the seizure limit, including the likely expenses of the enforcement. It should be noted that preference will be given to accounts of which the debtor is the only account holder and term deposit accounts;

b) Once the request has been made, the credit institution is considered to have been served notice on the date of receipt of the request¸ or on the following working day (unless there are technical issues which are not the fault of the credit institution in question)¸ and shall proceed to freeze the account by 23:59 of the day on which it is considered to have been served notice;

c)  Two working days after the date on which notice was served, the credit institution must inform the enforcement officer of the amount frozen, the amount of any existing balances and or the non-existence of an account or balance;

d) five days after the communication referred to in the preceding point, the enforcement officer must inform the credit institution which amounts are to be seized and which balances or accounts are to be unfrozen;

e) at the end of the opposition stage to the enforcement, the enforcement officer must make a request to the credit institution for the transfer of the seized amount, which will be effected using a payment reference number, or by means of a collection document (DUC) when the enforcement offer is an officer of the court (the amounts seized may also be transferred by wire transfer if the credit institution cannot make payments using payment reference numbers).

It should be noted that throughout the proceedings, the frozen/seized account may be allocated to the benefit or to the loss of the debtor, as there may be debits or credits resulting from credit or debit transactions that precede the freezing request which can only be transacted after the account is frozen.

Finally, unlike the provisions that were previously in force, at present only the big litigators (under the new Civil Procedure Code, these are “companies which filed 200 or more injunction applications, legal actions, processes or enforcements in the previous year”) must remunerate the credit institutions for their cooperation in the enforcement proceedings.

João Neto Peixe