European Parliament paves the way for cross-border debt recovery
16 Apr 2014 02:46 PM
The European Parliament has voted in plenary to
back an initiative by the European Commission that will cut red tape for
companies and contribute to growth in the EU. The European Account
Preservation Order will help businesses recover millions of euros that are
currently lost each year in cross-border debts.
"Today's votes send one clear message:
Europe is simplifying procedures for companies and helping them save time and
money. Small and medium-sized enterprises are the backbone of
European economies – having an easy procedure in place
for businesses to quickly recover outstanding debts across borders is
crucial," said Vice-President Viviane Reding, the EU's
Justice Commissioner.
The
European Parliament endorsed the Commission's proposal for a
Regulation establishing a European Account Preservation Order (IP/11/923). The proposal will help ensure that businesses recover
millions of euros in cross-border debts by allowing creditors to preserve the
amount owed in a debtor's bank account.
Around 1 million small businesses struggle to recover
cross-border debts in the EU's Single Market. This equates to up to
€600 million lost every year in debts that are unnecessarily written off.
For small businesses it is often too difficult and expensive to pursue complex
lawsuits in foreign countries. With the European Account Preservation Order
debtors will be prevented from removing or dissipating their assets while
procedures to obtain and enforce a judgment are ongoing. The Preservation Order
will be effective Europe-wide and will greatly improve the prospects of
successfully recovering cross-border debt.
Next steps: The European
Parliament’s Legal Affairs Committee (JURI) voted to back the
Commission’s proposal (MEMO/13/481) on 30 May 2013. Ministers endorsed the proposal in the
Justice Council in March (MEMO/14/155). Following yesterday's European Parliament vote in
plenary, to become law, the Commission's proposal must now be adopted by
Member States in the Council (voting by qualified majority), which is expected
to happen in June.
For
more information
Homepage of Vice-President Viviane Reding, EU Justice
Commissioner: http://ec.europa.eu/reding
Follow the Vice-President on Twitter: @VivianeRedingEU
European Commission – Civil justice
policy: http://ec.europa.eu/justice/civil/index_en.htm
Follow EU Justice on Twitter: @EU_Justice