Is Wirecard a Bank? An interesting decision, based on the EAPO Regulation for international preservation orders

A recent decision of the Dutch Court* based on the EAPO Regulation (655/14)

in which the discussion (amongst other issues) concerned the questions whether Wirecard is a ‘Bank’ in the meaning of the EAPO Regulation and if an urgent need for a preservation Order exists under the given circumstances.

Creditor has primarily demanded that the preliminary relief judge withdraw the prejudgment bank attachment, in particular because the conditions or requirements set out in the regulation are not met, since amongst other omissions, the following conditions have not been met in the present bank attachment:

-1 the EAPO-Reg does not apply, because Wirecard, under which a prejudgment attachment has been levied against Creditor, is not a “bank” within the meaning of the Regulation

-2 there is no urgent need for the Preservation Order, as there is no risk that later collection of the claim will be made impossible or seriously hampered

Ad 1) EAPO-Reg not applicable?

Under the EAPO-Reg, there is a “bank” if the requirements of being a credit institution within the meaning of Article 4 (1), under 1 of Regulation (EU) No. 575/2013 on prudential requirements for credit institutions and investment firms (see art. 4 under 2 EAPO-Reg). There must therefore be “an undertaking the business of which consists in taking deposits or other repayable funds from the public and granting credits for its own account”.

Creditor states that Wirecard is an internet payment service provider that is comparable to Adyen or Mollie, that it does not attract money from the public and does not grant credit for its own account.

The preliminary relief judge is of the opinion that Creditor has made its assertion insufficiently plausible.

First, Wirecard did not state in its bank statement with regard to the attachment in question that it is not a credit institution within the meaning of the Regulation. She simply stated which monies are in Creditor’s account with her. If Wirecard did not regard itself as a “bank” within the meaning of the EAPO-Reg, a different course of action would have been obvious.

Second, Wirecard’s website states that it focuses on both private individuals and companies, that it engages in private banking, and that it is a full-service bank.

The preliminary relief judge therefore assumes that Wirecard does meet the requirements of a “bank” within the meaning of the EAPO-Regulation.

Ad 2) no urgent need for a prejudgment bank attachment?

The creditor must provide sufficient evidence to convince the court that there is an urgent need for a protective measure in the form of a Preservation Order, in view of the real risk that, without a such a measure, the subsequent recovery of the creditor’s claim against the debtor is made impossible or more difficult. 

Creditor has not stated that it has other assets – than the bank account on which the seizure was seized – from which Debtor could recover later, in a sentencing judgment. This means that the confiscated bank account appears to be the only asset for which recourse is possible.

In addition, Wirecard issued two bank statements in quick succession:

  • on February 12, 2020, she stated that the seizure had hit an amount of almost € 610,000
  • on February 14, 2020, she stated that the seizure had not hit target, because the funds would belong to so-called “end users”.

Creditor has not disputed the assertion of Debtor that this revision is a consequence of the fact that Creditor has contacted the bank to inform it that the funds would belong to third parties on the basis of agreements made. The correctness of this latest bank statement is part of a discussion between Debtor and Wirecard. In any case, Creditor has made future recourse by Debtor of its claim more difficult by this procedure. This means there is a sufficiently urgent need for a bankruptcy order.

Conclusion: The Court decided that there are no grounds to revoke the bankruptcy order, so that the primary claim will be dismissed. Since there is no bank statement showing that the amount seized is too high, the alternative claims must also be dismissed. The amount seized by the Preservation order will remain in custody at Wirecard, during the term of the Court proceedings between Debtor and Creditor. 

*Dutch Court/Rechtbank Midden-Nederland C/16/496271/KG ZA 20-40, ECLI:NL:RBMNE:2020:2301, 24 June 2020 

For more information on (international) account preservation measures