GARNISHMENT OF BANK ACCOUNTS QUESTIONNAIRE National Report Greece Prof. Dr. Konstantin Kerameus/ Dr. Stelios Koussoulis (University of Athens)

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1 GARNISHMENT OF BANK ACCOUNTS QUESTIONNAIRE National Report Greece Prof. Dr. Konstantin Kerameus/ Dr. Stelios Koussoulis (University of Athens) Introduction Garnishment procedures in Greece cover both money claims and any other claims of the debtor against a third debtor and are regulated by articles of the Greek Code of Civil Procedure (hereinafter: the CCP), deviating to a significant extent from normal attachment procedures. Most importantly, they are not limited to garnishment of bank accounts, because there until recently prevailed the principle of total secrecy of bank accounts in Greece. This long-lived tradition prohibited the banks from providing any information on the contents of bank accounts and had, therefore, practically lead to the exclusion of enforcement against on accounts. More particularly, article 1 of law decree 1059/1971 stipulates that all bank accounts are secret and all credit institutions are not allowed to reveal any information in any way about deposits of their clients. Article 2 further specifies that revealing such information constitutes a criminal offence. This measure was taken in order to support the Greek economy and to increase credit trust. However, in practice it led, as already noticed, to the denial of banks to provide any information about bank accounts to creditors or proceed to the declaration required by article 985 CCP, in order for garnishment proceedings to advance. This practice was initially supported also by the Greek jurisprudence. The Areios Pagos had held that the above-mentioned law was not contrary to constitutional provisions and the banks legally refused to reveal information about bank accounts 1, as article 985 provided, although legal theory held otherwise. Finally, article 24 of the novel law 2915/ provided that secrecy of accounts is lifted in so far as the actual deposit of money in an account must be certified in order to satisfy the claim of a creditor through attachment. Accordingly, the Areios Pagos, 1 Areios Pagos, in plenary session, decision 3/1993, NoB 1995, Published in the Government Gazette A

2 in plenary session, decided that the right of the creditor to attach prevails over the right of the debtor and the credit institution to protect the secrecy of the accounts 3. It seems, therefore, that novel law 2915/2001 and recent jurisprudence have clarified the situation, providing for the lifting of secrecy in case of enforcement proceedings. It is a fact, however, that this provision has been moderately applied up to now, so the practice of garnishment of bank accounts is still new and not fully formed in Greece. 1. Competence of the enforcement organs 1.1 Enforcement proceedings in Greece are not carried out by the court, as in other legal systems. Following the French model of execution, most of the enforcement acts are performed by enforcement officers, i.e. a bailiff (huissier de justice) or a notary public. This is also the case for garnishment procedures, since the competent enforcement organ is always a bailiff Greek bailiffs are public officers. They are appointed upon successful completion of a yearly-organized examination on legal subjects. Other than that, no special educational qualifications are required, as for example a law degree, although graduates of Law Faculties do not need to take the examination 4. Greek bailiffs are responsible for performing, apart from enforcement acts, all official services of documents required by law. It is worth noting, therefore, that contrary to normal attachment proceedings, where the bailiff functions as a genuine enforcement organ, in garnishment procedures the bailiff is only a service organ, delivering to the garnishee and the debtor the order for garnishment drafted by the creditor 5. 3 Areios Pagos, in plenary session, decision 19/2001, DEE 2002, Article 2 of the law 2318/1995, published in the Government Gazette, A G. Nikolopoulos, Enforcement [in Greek], (Sakkoulas 2002), p

3 The enforcement court, on the other hand, only has a controlling function during the enforcement proceedings and is not considered to be the enforcement organ nor does it have any preventive function before enforcement action is taken. Its role is nevertheless very important in the course of the proceedings, since it is competent to declare the invalidity of a bailiff s enforcement action, after it has been performed and challenged by the debtor or a third party The question of jurisdiction, therefore, only arises in the Greek enforcement proceedings in case such remedies against illegal enforcement have been availed of. Particularly for garnishment procedures, it is stipulated that the internal local competence of the court, where the garnishee s statement is challenged, depends on the domicile of the garnishee. This is evident also due to the fact that the creditor is bound to appoint an attorney at the place of domicile or seat of the garnishee (article 983(1)(d) CCP) Garnishment is always performed, by virtue of a special law, in the precise branch office of the debtor s account, so the competent enforcement organ is a bailiff at the place of a branch office Again, a bailiff at the place of the independent subsidiary Jurisdiction depends only on the place, where the account was opened. The enforcement organ does not have jurisdiction for assets located in a different part of the territory See supra No No According to article 683 CCP, special jurisdictional grounds to safeguard enforcement are created at the place where the provisional or protective measure will be executed. 3

4 2. The procedure for obtaining the garnishment order General requirements of enforcement proceedings are provided in articles CCP, stipulating that the amount of the claim must be exactly defined in the provisionally enforceable instrument, and the claim may not depend on a suspensive condition or a term, in order for enforcement to ensue. However, the claim against the garnishee may well depend on suspensive conditions or be only a probable or future claim not yet due, without enforcement proceedings being prohibited or suspended for that reason Before further enforcement action is taken, a time limit is provided, so that the debtor can comply with the order to execute the enforceable instrument. This time limit is, according to article 926 CCP, 3 working days, starting from the date when the debtor was officially notified to abide thereby, in the manner specified as following: According to articles 904 et seq. CCP, in order to initiate enforcement proceedings, a creditor must obtain an enforceable instrument against the debtor, bearing the enforcement formula, as inscribed by the court (918 CCP). Subsequently, he has to serve it to the debtor, inviting him to voluntarily comply with it. This first stage is also essential in case the creditor intends to proceed with garnishment instead of normal attachment. There is no need, however, for a separate enforcement instrument against the third creditor, in order to initiate garnishment proceedings There is no prescribed or often-used form The account to be seized must be generally indicated Ιndication of the debtor s name is usually sufficient Search orders are not permissible, because of the secrecy of accounts (see supra under introduction). 4

5 The branch office of the bank definitely has to be indicated, the precise account number is however not essential. If there are several bank accounts, garnishment may be imposed to any of them See infra The enforcement organ does not generally undertake any investigations. As mentioned above, in case of garnishment proceedings the bailiff is only an organ for service. The only thing he is compelled to control is the existence of a valid enforceable instrument Τhe creditor can only proceed with enforcement for the claim described in the enforceable instrument and is not entitled to ask for anything more at this stage, by providing additional proof Τhe debtor has no further right to a hearing before enforcement action is taken. He may only comply voluntarily with the enforcement order Article 982 CCP, however, stipulates that some items or claims are exempt from garnishment proceedings, i.e. (a) chattels in the hands of a third party, threatened by immediate destruction, (b) partnershares of business associations in partnership form, such as general or limited partnership (c) alimony claims, based on law or testament, as well as claims between spouses for contribution to the family needs (d) wages, pensions and insurance benefits, unless the claim to be satisfied by enforcement belongs to the previous category. The latter provision leads to the conclusion that salary accounts should be excluded from garnishment proceedings. In such cases, the creditor may attack the enforcement action at court by opposition and declare it void. Nullity as an automatic consequence of illegality, nevertheless, does not apply to enforcement action The debtor can request the preliminary seizure of the account, following the procedure of provisional measures. 5

6 2.6. If no recourses against enforcement acts are filed, the whole enforcement action can be effected in 2-3 months. The usual case, though, is that the debtor or third creditors file oppositions against enforcement acts, therefore proceedings are concluded in 2-3 years Not relevant in Greek law. 2.8 The costs of enforcement are covered from the final outcome of enforcement, more particularly they are subtracted from the final sum before it is distributed to the creditors. Τherefore the creditor does not need to advance the costs. 2.9 If the creditor applies solely for security measures, instead of initiating garnishment proceedings, there is no need to present an enforceable instrument against the debtor. Ηowever, if the creditor possesses an enforceable instrument, he has no legal interest to apply for provisionalprotective measures. 3. Commencement of garnishment: The garnishment order 3.1. A garnishment order is served to both the debtor and the garnishee. The said document, though, is not a normal attachment order. Article 983 CCP refers to a document containing an accurate description of the enforceable instrument, the claim to be enforced, the amount to be garnished and an order to the garnishee to refrain from any payment to the debtor. In the same document, the creditor must indicate an attorney, practicing law before the justice of the peace or single-member court of the place of the garnishee s domicile or seat, entitled to be served with all documents for the creditor, unless the creditor himself has his domicile at the same place See supra under There is an ambiguity in Greek legal theory as to the matter of substituted service being permitted in the enforcement proceedings. Because of the importance of the debtor s right to challenge enforcement 6

7 acts within such a short time limit, usually set by the law, this option should be excluded. It is also notable that Greek law does not provide for service performed through the post The delivery is initiated by the creditor, according to the general principle of disposition, applicable also in enforcement proceedings, and indicating that enforcement organs are allowed to proceed to enforcement action only if the creditor orders them to do so. The delivery is therefore only conducted by the bailiff, as mentioned above If the delivery to the garnishee is incorrect, the enforcement act is null and void 6. Article 987 provides that the garnishee can challenge the garnishment order also for the reason that it was not served on the debtor The service on the debtor is regarded as a subsequent step of the garnishment procedure. Article 983(2) CCP stipulates that this service has to take place within 8 days, starting from the date of service to the garnishee, otherwise the attachment is null and void. The debtor, therefore, retains the right to challenge the validity of garnishment through opposition, if he was not served with the garnishment order or was served after the expiration of the time limit. 4. Object of the garnishment order In principle all forms of bank accounts are included. The relatively new regulation of this topic (see supra before 1.) according to the article 24 of the law 2915/2001 makes no distinction as to the kind of the bank accounts falling in its scope. The relevant account balance is obviously the one existing at the time, when the enforcement order was delivered It seems that such a flexible form of garnishment, such as the one referring to future account balances would be incompatible with the general principles of the greek system of enforcement that requires a high standard of certainty as to the claim which will be garnished. The future 6 See particularly Tsikrikas, Problems of Service of Documents in the Enforcement Proceedings [in Greek], (Sakkoulas 2002), 262 et seq. 7

8 closing of an account, a future deposit or a deposit not yet due could be the subject of the garnishment, provided that the already existing basic legal relationship from which the future claim of the debtor will accrue could be clearly defined. In such a case the garnishment will remain in a state of pendency and take effect at the time when the future claim will be legally born The matter is relatively complicated and the answer depends mainly on the position to be adopted about the legal nature of the contract opening a credit or a charge account. The answer will be probably affirmative as long as the credit contract takes the form of a mere money delivery to the debtor or as a prepay or discount to a bill of exchange The access to the account is strictly limited to the amount of the enforcement order. On the other hand, secondary claims (e.g. interest of the claim to be enforced) and enforcement costs will be considered (art. 951 [2] CCP) As already mentioned above the access is indeed limited These questions are probably related to foreign systems of enforcement, where the garnishment leads to a complete freezing of the bank account and a subsequent prohibition of any account transaction or disposition of its content. In Greece this prohibition is only restricted to the amount of the enforcement order 8, so that the question of the account release and the procedure to be follwed does not arise Current accounts are really common in greek bank practice. It is usually a dependant, secondary contract following the primary, basic legal relationship between the bank and its debtors, which will be commonly a credit or a deposit contract. According to the articles 35 and 47 of the law decree of 17 of July 1923 and art. 112 of the Introductory Law of the Greek Civil Code current accounts may be freely, upon a notice of termination, terminated by the parts. 7 Pelagia Yessiou-Faltsi, Law of enforcement II, Special Part, 2001 (in Greek), p S. also infra

9 The main legal effect of the current account is the loss of the legal independence and individuality of the mutual claims of the contracting parts. In this sense claims included in a current account may not be individually pursued or assigned and they are not subject (individually) to prescription or statutory limitation In Greece the garnishment procedure and the enforcement order are not specifically limited because of the existence of an account current. The agreement to an account current does not bring any major differentiations to the enforcement proceedings. Some authors argue that the garnishment order includes a cancellation (termination) of the account current on behalf of the creditors 9. This sharp consequence is being critisized from another opinion in the theory, which appears to be more founded. The garnishment order cannot bring the end of a contractual agreement mainly affecting third parts such as the bank. The bank has also no right to terminate the account current because of the garnishment. This remark is merely of minor importance, because as already mentioned the bank may terminate the account (upon notice of termination) freely. The most troubling issue about the garnishment of an account current is the object of the garnishment. There is no doubt that the final balance of the account after its closing may be garnished, also as a future claim even before the closing of the account. But there has been a wide dispute in Greece, if the current balance of the account at the time of the delivery of the garnishment order may be garnished too. The affirmative answer seems to be the right one. This would cause severe logistical problems, which could be solved only at the end of the periodical closing of the account usually taking place every three or six months The legal relation between an assignment and the garnishment of a claim against a bank, such as the claim of the enforcement debtor from an account current is a rather complicated one. The assignment may 9 The whole discussion in Pelagia Yessiou-Faltsi, Law of enforcement II, Special Part, 2001 (in Greek), p. 910 and Spiros Psychomanis Bank Law, 2001, p

10 concern future claims 10 too, an instrument mainly used in the commerce as a security for debt. The crucial factor for the solution of the problem is offered from the combined appliance of art. 460 Greek Civil Code and art. 984 [1] CCP. It is the time of the announcement of the assignment to the third part, here the bank. So, if the announcement of the assignment to the bank takes place before the delivery of the garnishment order, the claim could no more become the subject of the garnishment. Comes the garnishment order first, then no place remains for an assignment because of the prohibition of art. 984 [1] CCP. The effectiveness of a possible disposition of the claim depends exclusively on the time priority between the announcement of the assignment and the delivery of the garnishment order to the bank Joint accounts are regulated by the Law 5638/1932. Article 4 of this Law creates the irrebuttable presumption that in case of a garnishment the co-owners of a bank account will be deemed to have equal shares on the deposited sum 12. Thus the garnishment order should only be restricted to the percentage owned by the enforcement debtor and the remainder will be at the free disposition of the co-owners. If the whole sum of the deposit is, erroneously, garnished in contrast to the art. 4 and its stipulated presumption the co-owners may protect themselves by attacking the garnishment through the recourse of opposition of art. 936 CCP There is no specific regulation in the field of the garnishment concerning the fraudulent conveyances of debtor s assets. Such dispositions should be attacked by the creditors, following the procedure regulated in Art. 939 Greek Civil Code in order to achieve the cancellation 10 Provided that the future claim is satisfactorily definable. The assignment of a future claim is admissible, even if the legal relationship from which the claim will derive in future time does not yet exist, in Apostolos Georgiadis, Debt Securities, 2001, p The whole issue is heavily disputed in Greece. For a quick summary of the discussion in Pelagia Yessiou-Faltsi, Law of enforcement II, Special Part, 2001 (in Greek), p There is also a strong opinion in the legal theory, that the assignment of the claim should in any case remain effective and take priority over the garnishment, even if the announcement of this disposition takes place after the delivery of the garnishment order to the bank. 12 Spiros Psychomanis Bank Law, 2001, p , Panagiotis Mazis, NoB (greek law journal) 50 [2002], 641, K. D. Kerameus / D. G. Kondylis / N. Th. Nikas, Code of Civil Procedure: Supplement to the Article-by Article Commentary (in Greek), 2003, Art. 982 No

11 of these transactions. In the meantime and until the final judgment over these deceiving conveyances falls, they should make use of the provisional remedies against the third persons, such as the attachment or the pretrial garnishment. Because of the continuing existence of the bank secrecy 13 for persons which are not entitled to the enforcement 14, the bank is not allowed to give any information about the accounts of third persons different from the debtor. This result is however ameliorated through the use of the pretrial garnishment ordered by the court as a provisional measure. By using this procedural weapon and imposing a pretrial garnishment against the third recipients, the creditors may achieve the same effect and get the information needed about such accounts from the bank. Provided that the action against fraudulent conveyances according to art. 939 Greek Civil code succeeds, the creditors will not need any new title against the third recipients. The title against the debtor will then not only be sufficient, but also the only one available way of enforcement after the cancellation of the conveyances according to the Greek substantive law. 5. Effect of the garnishment order 5.1. As mentioned above (supra 3.1), the garnishment order also contains an order to the garnishee to refrain from any payment to the debtor, therefore as of the moment of service the garnishee is prohibited from doing so, but only for the exact amount of money, which has been attached. Article 984(2) CCP provides that the garnishee may neither discharge his debt to the debtor nor set off a claim against the attached one. Any act of disposal does not develop legal effect towards the creditor. Furthermore, the garnishee is appointed custodian (984[3] CCP) With the service of the document on the debtor, his power of disposal is suspended (984[1] CCP). Any act of alienation or other disposal, including the assignment of rights, is considered null and void and does not develop any legal effects or commitment towards the creditor. The debtor is, 13 See supra Introduction 14 And the creditors are not entitled to enforcement against the third recipients of the debtor s assets. 11

12 however, not prevented from filing an action or initiating enforcement against the third party The creditor obtains no lien. The principle of first come-first serve is not strictly applicable. However, there are significant indications of a mild form of that principle, especially at the stage of distributing the garnished claim Α garnishment initiated by one creditor may not prevent a subsequent attachment of the same account by another creditor contrary to attachment otherwise, which has this effect according to Greek enforcement law. Therefore competing garnishments by other creditors are to be considered However, there is a time limit for competing garnishments to be considered: After the claim has been deemed to have been assigned to the creditor (see infra ), subsequent assignments do not have a legal effect, since they are imposed on an object, which no longer belongs to the debtor The claim is not transferred to the creditor as of its attachment. Only after the bank has proceeded to make an affirmative declaration within 8 days or after a final decision on the recourse against this declaration has been rendered, an automatic assignment to the creditor takes place by operation of the law (988 CCP) The legal status of the garnishee 6.0 The service of the document on the garnishee is an essential prerequisite of garnishment, which is otherwise considered as non-existent The declaration of the garnishee is an essential part of garnishment proceedings. 15 Athens Court of Appeals, decision 5916/1978, NoB 1979, See Kerameus/Kondylis/Nikas/(-Nikolopoulos), Code of Civil Procedure: Article-by-Article Commentary (in Greek) II (2000), article 985 nr Yessiou-Faltsi, Civil Procedure in Hellas, (Sakkoulas-Kluwer, 1992),

13 This declaration does not need to be requested by anyone, the obligation operates by virtue of the law, according to article 985 CCP, stipulating that the bank must perform such declaration The garnishee must perform a declaration within 8 days from the day of service of the garnishment order on him irrespective of when the garnishment order was served on the debtor. The declaration can be made orally at the justice of the peace of the garnishee s place of domicile or seat and the court clerk drafts a relevant report The garnishee must declare the existence or lack of the bank account, i.e. whether the amount attached is at his hands As mentioned above (see supra under 4.2.), the otherwise existing secrecy of the account is only lifted for the exact amount of the enforcement instrument. Therefore the bank cannot reveal the total balance of the account if it goes over the amount attached Since only the name of the creditor is sufficient for the garnishment of his account, the precise account number not being essential, additional bank accounts of the debtor should be equally declared by the garnishee If the declaration of the garnishee is affirmative, i.e. acknowledging his debt to the debtor, the bank must also describe the exact legal nature of the contract, as well as any existent objections or rights against the debtor Additionally, the garnishee must state if another attachment has been laid on the same account by another creditor, as well as the name of the competing creditor and the amount involved The garnishee declaration can be either in the affirmative or in the negative sense. Its legal effects are connected to this distinction Missing declaration is not treated as an acknowledgment, but as a negative declaration, meaning that the garnishee does not acknowledge the claim. 13

14 In case of such lawsuit, the creditor has again the burden of proving the existence of the account, if the bank had produced a negative declaration or no declaration at all Τhe garnishee declaration can be challenged by opposition within 30 days as of the date it was made. According to article 986 CCP, this opposition is filed by the creditor with the court of general territorial competence for the garnishee, provided that the garnishee produced a declaration in the negative sense or the declaration is missing Concerning a missing declaration, see supra under Incorrect declaration must be attacked by opposition If the creditor fails to file the opposition or fully assert his objections, he becomes devoid of his rights to challenge the honesty of the bank s declaration in any future procedure Article 986, combined with 985(3), explicitly provides for the obligation of the garnishee to pay damages to the creditor, if the former s declaration was incorrect or missing It is not necessary for the creditor to prove the garnishee s fault 19, but it is essential that all facts constituting the cause of the damage be stated, including the facts supporting illegality and causality (article 914 of the Civil Code) The extent of liability depends on the exact damage incurred by the creditor due to the incorrect or missing declaration The request for damages can be filed either in the opposition against the declaration of the garnishee or in a separate action to be filed with the competent court Τhe garnishee can assert all the objections he has against the debtor, concerning his claim, as well as all objections contained in article 987 CCP, i.e. that the garnishment order did not contain all the essential data 18 Areios Pagos, decision 15/1993, NoB 1993, Three-member District Court of Athens, decision 11212/1972, ArchN 1973,

15 of article 983 (see supra under 3.1.) or that it was not served on the debtor If erroneous payments to the debtor are performed before the assignment of the claim to the creditor (see supra under ), there is a violation of an order provided for by article 983 CCP, therefore the creditor is protected by virtue of this article. Erroneous payments after the assignment to the creditor are treated as payments made to a nonbeneficiary and can be also claimed on the basis of an action for unjust enrichment No special expenses are caused to the garnishee due to garnishment proceedings. Trial costs in case of opposition are imposed on the parties by the court, depending on the outcome. 7. Debtor s protection (immunities) 7.1. Salary accounts cannot be garnished, according to article 982(2) CCP. See supra under No enforcement can take place on salary accounts Any garnishment performed upon an immune object stated in article 982(2) CCP is null and void and can be recalled through opposition. Other than that, there are no exemption limits The debtor can challenge all illegal enforcement acts through opposition, filed within a time limit, as generally provided in articles 933 et seq. CCP Protective provisions of articles 933 et seq. apply only upon application of the debtor No special provisions exist, concerning disbursement of an allowance for living costs There is no special need for protection of the garnishee. 20 Athens Court of Appeals, decision 10484/1984, Dike 1985,

16 8. The collection of the claim In case of a non-contested declaration in the affirmative sense, and provided that the attached claim is considered to be sufficient, the bank must pay the claim to the creditor The claim is, as of this point, transferred to the creditor He is empowered to collect it immediately No further decision of any enforcement organ is essential in this case According to article 989 CCP, the affirmative declaration of the garnishee constitutes an enforceable instrument. In case a negative declaration of the garnishee is attached by opposition, the decision rendered is of course also an enforceable instrument, as of the time it constitutes res judicata Competing creditors who attached the same bank account have significant rights. According to article 988 CCP, in case the attached claim is sufficient to satisfy the creditor who initiated the garnishment proceedings, as well as any other creditor who laid a subsequent attachment on the same claim, the bank is obligated to discharge all the debts. If, nevertheless, the amount of the attached claim is not sufficient to satisfy all creditors, the bank must proceed with the public deposit of the amount, within 8 days as of the service of the writ of garnishment to the debtor or 30 days, if the debtor is domiciled in a foreign country or his domicile is unknown. This amount is subsequently distributed to the creditors The priority principle does not seem to apply in this case. According to the wording of article 988 CCP, the sum seized is distributed among all participating creditors, provided that they attached the claim within a time limit of eight days as of the service of the writ of garnishment to the debtor In this case, article 974 CCP is applicable, i.e. a list of the creditors and their classification has to be drafted. The registration of further claims takes place according to the information provided by the bank in its declaration. Any attachments imposed on the account 16

17 after the time limit of 8 or 30 days from service of the writ of garnishment are not taken into consideration In case the account contains a sufficient amount for all the creditors, after the enforcement costs are abstracted, there is no question of distribution, since all creditors have a right to collect their claims. When the amount is not sufficient a notary, acting as an enforcement organ, distributes the amount proportionally, according to the classification of the creditors. Each creditor obtains a certain percentage of his claim, depending on the total number of creditors. 9. Information in law and fact Unfortunately, there is no data See supra under introduction If an amount of ,- is pursued in enforcement: The costs for the bailiff, acting as a service organ, vary from 10 to 20, plus 1,40 a page for the attachment report The costs of an attorney depend upon the contract with the client and vary according to the specific acts that will be required. Usually, such cost is calculated on the basis of a percentage of 2-3% of the claim Enforcement costs are ultimately carried exclusively by the debtor. 10. Cross-border garnishment of bank accounts 10.1 A cross-border garnishment of bank accounts is generally permissible in Greece When the garnishee has a seat in a foreign country, the permissibility of cross-border garnishment depends on the applicable law of the country, where the bank is situated In case of garnishment proceedings against a debtor domiciled abroad, article 988(1) CCP provides, as mentioned above (supra 17

18 8.2.), that the garnishee must pay the seized claim to the creditor within 30 days as of the service of the writ of garnishment to the debtor. Therefore a cross-border garnishment against a debtor abroad is permitted, with the time-limit before the assignment of the claim being extended, so that the foreign debtor can effectively provide any objections The main reason for an account distraint to be inadmissible would be the territoriality of the enforcement act An additional reason could well be that, according to the construction of the Greek law of enforcement, the main territorial connection seems to be the residence of the garnishee In cross-border garnishment of bank accounts, the enforcement act is delivered to both the debtor and the garnishee, according to Regulation 1348/00/EC Under the basic law of garnishment bearing on bank accounts, such garnishment may take place only in the branch office where the relevant account is held. However, in recent years, and particularly after law 2915/2001, the validity of such local limitation is under attack. It cannot be excluded that the courts would hold such local limitation to be no longer valid and accordingly to expand the effectiveness of a garnishment served on the head office to accounts held in any branch office of the same bank as well General According to the basic conception of the Greek law on enforcement, garnishment is perceived as a private activity deployed by the prosecuting creditor rather than a judicial or administrative one. Under this conception, there is neither room nor need for any judicial act like the German Pfändungsbeschluß to come in. The initiative to garnishment as well as its development depend on a game of actions and reactions expected from the creditor and the garnishee without any intervention by courts in advance. If within this game something goes wrong, it is up to the parties to avail 18

19 themselves of a judicial remedy (opposition) in order to bring the situation to the attention of the court. Only then there can be a judgment or any other judicial act which could seek recognition. Otherwise there is no judicial act fit for recognition. Applicable law Since we are talking about a procedural activity by the parties starting in Greece, the normal lex fori principle will apply with the consequence that as a matter of principle Greek law of enforcement would be applicable to vast aspects of garnishment, initially in Greece. There may be some marginal aspects of garnishment which because of a particularly substantive connection would be subject to the normal conflict rules. However, they would be rather the exception, since the whole mechanism of garnishment is understood as a procedural device submitted to the application of lex fori Talking about changes of circumstances occurring ex post facto, the applicable law seems to be the one under which the decision producing the enforceable instrument was rendered in the first place. If this decision is a foreign one, then the respective procedural law should find application. No examples of institutional or other cooperation between the foreign court and a corresponding domestic one seem to exist As a matter of principle, provisional attachment and definitive attachment on the basis of an enforcement instrument are separate remedies without any significant mutual impact. Provisional attachment is only a security, while definitive attachment is integrated into the normal course of enforcement proceedings. An exception to this principle of mutual independence seems to be adopted by virtue of article 722(2) CCP. Under this provision, the creditor who obtained a provisional attachment is, as soon as judgment on the main action for the claim becomes final, considered to become the lawful holder of the underlying substantive right. 19

20 As for the practical example under number 2 is concerned, its answer under Greek law emerges from what has been already said and is the following: The first garnishment will follow its course since the objections by the garnishee that the claim under garnishment has been transferred to another creditor proved to be unfounded. The second creditor who would like to attach the sun of of the same account may do so and thus join in the garnishment proceedings under the regular conditions of any garnishment. 20