Unpaid invoices, products ordered from a supplier abroad not delivered? To force a recalcitrant creditor domiciled abroad or in Europe to pay his debt, the formal notice remains a recourse available to you, an essential amicable step before taking legal action. For this official act to have legal value, certain drafting rules must be respected. Here are some insights on how to collect your foreign receivables.
A formal notice: a prior official act before any legal proceedings
According to article 1344 of the French Civil Code, a formal notice is an “official act by which a creditor asks his debtor to fulfil his obligations”.
It is a document issued by a creditor or a bailiff and whose purpose is to collect a debt. It requests that the debtor to regularize his/her situation within a specific period of time, under penalty of legal proceedings (articles 56 and 58 of the Code of Civil Procedure). The formal notice must be sent by registered letter (LR) with acknowledgement of receipt (AR).
The formal notice to a debtor is an essential preliminary step, in the event that legal proceedings are initiated if the debtor refuses to pay. Indeed, the assessment constitutes evidence that can be presented to the court or competent tribunal before the initiation of an order for payment procedure.
For greater efficiency, the formal notice is ideally drafted by a lawyer or a bailiff. It is even more formal if the registered letter is written and stamped by a bailiff.
It follows specific drafting rules (precise terms) and must include several elements:
- The subject of the formal notice (claim for payment),
- A deadline for the payment of the claim,
- The term “Formal notice” must be clearly stated,
- The applicant’s contact details and signature (copy of the CNI).
Only in the event of a refusal to pay following the formal notice can the order for payment procedure be initiated by the creditor.
Initially, a formal notice remains a simplified recovery procedure, a simple way to settle a dispute amicably.
The European payment order (EPO)
When a customer or supplier residing in a Member State of the European Union refuses to pay a debt, the creditor is entitled to initiate a European Payment Order (EPO) procedure.
A notice of assessment which remains a simplified procedure (and less onerous than a court action) to obtain prompt payment from a debtor residing abroad.
There is no minimum amount to launch an EPO. The plaintiff must complete the order for payment form (download form A) and send it to the court registry (or hand-deliver it). The court reviews the case. In some cases, it may require additional elements to arbitrate the dispute: it then sends the claimant Form C to be completed. Within 30 days of receipt of the file, a response is sent.
If the Commission refuses, this decision is generally reasoned. The applicant may then contest this refusal by completing Form F or by another means of recovery.
What are the conditions for launching a European order for payment procedure?
- The debt or claim must concern a legal entity or individual not residing in the same country (European Union except Denmark);
- Before launching such a request, the creditor must ensure that the debtor is neither in receivership nor in judicial liquidation;
- The creditor company’s registered office is located abroad in one of the countries of the European Union (Luxembourg, Portugal, Spain, etc.);
- To have its validity recognized, the order for payment must be formalized in a contract or an acknowledgement of debt.
The EPO is only valid for the recovery of debts related to the activity of a company. In some areas, such as the recovery of tax, administrative, customs, matrimonial and VAT debts, or the payment of maintenance or other payments, this recourse is impossible.
The cost of an IPE request is €37.07: an amount to be paid by the creditor (plaintiff) to the clerk of the commercial court. The latter validates the injunction and makes it enforceable in the country where the creditor is domiciled, without the need for it to be validated by another court of first instance.
The European Enforcement Title (EEO) is the court decision rendered by the court, in civil or commercial matters, which concerns cross-border claims and allows the enforcement of the decision without having to return to the court.
Your creditor is abroad, sworn translation is essential
In the context of a judicial process, particularly if it involves a foreign country or jurisdiction, the sworn translation of official documents is required. For a formal notice procedure, it is even essential to validate its authenticity and legal value with the competent authorities. The expert translator’s seal guarantees the conformity of the original document, a process that promotes a better circulation of official documents within the Member States of the European Union.
The letter of formal notice is an important prerequisite for possible legal proceedings. In the event of refusal, the European Payment Order (EPO) is the “logical” continuation of the procedure for recovering the debt from a customer abroad. The applicant must provide the competent authorities of the country with a copy of the EPO. Nevertheless, due to the complexity of the international law of each State, the debtor may avoid it. To maximize the chances of success of this procedure, it is advisable to use a lawyer to complete the injunction (formal character) and a legal translation agency in order to better argue your case with the judge abroad who will examine the case and decide on the follow-up to your request.