In Italy, there are many ways to obtain the seizure of assets of a debtor or to secure assets during a claim.
In civil and commercial matters, a request for seizure may be filed before an Italian judge by any party to a dispute. As an example, it may be necessary to stop a trademark or a copyright infringment, or to put pressure on a debtor in order to collect a relevant commercial debt.
What is the Seizure of Assets?
The seizure of assets is the action or an instance of taking possession of something by force. An order of seizure may be issued by the Government, a civil or a criminal court, depending on the situation at issue.
Herein we will focus exclusively on seizures and similar remedies that may be obtained from civil courts in Italy with the aim to:
1) facilitate/obtain commercial debt collection, and/or
2) secure a civil or commercial claim
So, in a word, we will deal with interim measures and enforcement in Italy, under civil procedural rules (par. 480 et following Italian Civil Procedure Code).
Asset Seizure in Italy
In Italy, assets can be seized through:
- a) Interim measures, such as
- Precautionary seizure
- Judicial sequestration
- A European Account Preservation Order
- b) Enforcement measures, such as
- Attachment or foreclosure of movable property
- Attachment or foreclosure of immovable property
- Third-party’s attachment
- Consignment of movable property and release of immovable property
Which is the difference between interim and enforcement measures?
The main difference is that, in general, interim measures are:
– provisional measures (.i.e. effective for a limited time decided by the judge)
– which may be asked before or pending a judgment (also abroad) which should ascertain the right of the person or company which is seeking such judicial protection.
However, there are interim measures (so called anticipatory measures), which remain effective whether or not there is a trial pending, although they have not got the same force as a final judgment.
By way of example, in Italy, interim measures might be asked to block the debtor’s bank accounts, to stop a trademark or a copyright infringement, to secure evidence to be used in the main proceeding….
On the contrary, the enforcement measures can be sought only after the enforcing party has got an enforceable title. The enforceable title is a special document (i.e. a notarial deed) or a judgment (also a foreign judgment) ascertaining the existence of the right of the enforcing party. In Italy, the creditor (or any other rightholder) must have an enforceable title to attach the debtor’s property or to obtain the release of immovable property or the consignment of an asset.
Which interim measures are available under Italian law?
The content of the interim measures varies according to the type of danger they are designed to avert or the right they are aimed at protecting. For instance, they apply to the debtor’s assets such as movable or immovable property, but also to intellectual property and copyrighted works. The interim order to reinstate an unfairly dismissed worker, on the other hand, is an obligation to act.
Some interim measures are called “protective measures”: they are aimed at preserving the legal and factual situation existing at the time of the application, to ensure that the time needed to complete the main proceedings will not harm the claimant’s rights. Anticipatory measures, on the other hand, are designed to anticipate the effects of the final judgment in the main proceedings. Therefore, anticipatory
measures aim to prevent damages that could not subsequently be compensated.
Finally, section 700 of the Italian Code of Civil Procedure provides for urgent measures which may be asked when there is no other interim measure available under Italian law. This provision states that in case of imminent and irreparable harm, a party may request to the court the issuance of an urgent order which, in the circumstances of the case, would ensure provisionally the effects of the decision on the merit.
What are the conditions under which such measures may be issued?
Issuing of an interim measure is subject to two requirements:
(A) Periculum in mora, i.e. the well-founded fear that, pending a ruling on the merits, the right that the interim measure seeks to safeguard may be irreparably lost;
(B) Fumus boni juris, i.e. a credible case for the claim.
How long do they remain in effect?
Interim measures remain in effect until the delivery of the judgment in the main proceedings, which will replace them. It is important to underline that interim measures may be asked in Italy also if the main proceeding against an Italian party is taking place abroad or in Italy there is an asset to be preserved.
Depending on the type of interim measures required, they will continue to be valid in Italy.
Generally, protective measures lose their effect if the main proceedings are not initiated, or continued within the time limits laid down by the law or by the court. Anticipatory measures, including urgent measures under Section 700 of the Italian Code of Civil Procedure may continue in effect even where the main proceedings are not initiated or are initiated but subsequently discontinued.
What is a European Account Preservation Order?
In addition, in Italy Regulation (EU) 655/2014 establishing a European Account Preservation Order (EAPO) is applicable, to facilitate direct cross-border enforcement of monetary claims by allowing creditors to freeze monies in a defendant’s bank account across Europe. The procedure may be used in cross-border cases only, whereby the court carrying out the procedure or the country of domicile of the creditor must be in a different Member State than the one in which the debtor’s account is maintained.
It’s an alternative to existing legal procedures in each EU country.
It makes EU debt recovery easier: the procedure is quick and happens without informing the debtor (ex parte). This ‘surprise effect’ stops debtors from moving, hiding, or spending the money.
The Regulation applies in all EU countries except for Denmark.
Which are the enforcement measures available in Italy?
In Italy, tangible assets and money of the debtor can be subject to enforcement through:
- attachment of movable property from the debtor
- third-party’s attachment
- attachment of immovable property
- Consignment (movable assets) and release (immovable assets)
Under Italian law, to proceed with enforcement, you must:
- have an enforceable title;
- send a notice to the debtor, known as ‘precetto’, or writ of enforcement, fixing a 10 days final deadline for voluntary compliance.
- Start the enforcement proceeding
Herein, we will deal with said passages:
1. Which are the enforceable titles under Italian law?
The enforceable title is the document ascertaining the existence of a creditor’s right.
Section 474 of Italian Code of civil procedure identifies the following enforceable titles:
- judgments;
- acts and documents which are expressly enforceable under Italian law;
- private agreements signed by the parties before a notary or a public officer,
concerning obligations to pay a certain sum of money stated therein;
- promissory notes and other negotiable instruments;
- notarial deeds and other public acts.
In Italy, judgments and judicial orders are enforceable when they are issued, even if they are opposed or appealed.
Moreover, a European Payment Order in civil and commercial matters which has not been opposed by the debtor within 30 days is automatically enforceable in Italy.
1.1 What is the peculiarity of the Italian Payment Order?
Italian Payment Order is issued by the judge at the request of the creditor and generally becomes enforceable if not opposed within 40 days by the debtor.
However, under certain circumstances, an Italian Payment Order may be immediately enforceable for the benefit of the creditor.
Therefore, at the latter’s request, based on a written recognition of debt by the debtor or sufficient written evidence, the Italian judge will issue a payment order that is immediately enforceable. So the creditor will start enforcement by surprise, seizing the debtor’s assets. This is done at the creditor’s risk because the debtor will have 40 days to oppose it and start an ordinary judicial proceeding. If the debtor is successful in demonstrating that the creditor was not entitled to ask for the payment order (i.e. the debt was paid or set off before the legal action, the legal action could not be brought before an Italian court. Etc….), the enforcement will be stopped and, in the end, the creditor will have to pay damages. However, in many cases, when some assets are seized, commercial debtors acknowledge that they can not delay payment further and find a way to satisfy their creditors.
2. The notice to the debtor (so called “Precetto”)
As already mentioned, enforcement must be preceded by a formal warning to the debtor called“precetto”. This document states all the sums to be paid by the debtor, including interests and legal fees.
3. The seizure of the assets
If the debtor does not pay within 10 days from said notice, the creditor can start enforcement, choosing the legal solution he feels most appropriate:
- attachment of movable property,
- third party’s attachment,
- or attachment of immovable property.
He is also allowed to act simultaneously by seizing movable and immovable assets and the money and goods of the debtor which are due by third parties.
The debtor is entitled to file an opposition to the judge in order to limit or contest the validity of the enforcement process.
In practical terms, the attachment consists of an injunction directed at the debtor, by the Italian bailiff.
Attachment of movable assets takes place at the debtor’s domicile and other places belonging to him;
Third-party’s attachment takes place at the third party’s premises. The third-party is typically a bank or a company that detains money or goods of the debtor. The third-party must freeze immediately the assets or money belonging to the debtor and declare within 10 days to the creditor the amount of money or goods of the debtor in its possession; such assets will be finally transferred to the creditor, by order of the judge of the enforcement, at the end of the proceeding.
Asset Recovery and other legal services about the seizure of assets
Our law firm is specialized in asset recovery, to the benefit of Italian and foreign clients.
If it is necessary, we can ask the Italian judges for interim measures and European orders, in Italy and abroad, to seize the assets and/or freeze the bank accounts of civil and commercial debtors, or to stop other infringements (i.e. intellectual property infringements).
If the debtor does not pay and the creditor has already an enforceable title, we can follow the enforcement proceeding in Italy, in the following forms:
– seizure and sale of movable assets
– seizure of assets held/receivables payable by third parties to the debtor
– seizure of moto or auto-vehicles owned by the debtor (registered in the Italian public register)
– seizure of real estate properties.
As a law firm dealing with international contracts and debt collection, we may support your company along all the phases and indicate the strategy which is more appropriate and rapid in your specific case.
For information, contact us!
Do you want to know what to do if a customer doesn’t pay? Read our article!