Cross-border debts should become 'easier to recover'
Up to one million small to medium-sized enterprises (SME) in Europe fail to recover cross-border debts. The average amount of debt written off by these companies is €600. This means that €600m is lost to cross-border debts every year.
Due to the relatively small figure that the average SME is owed, they often find it more trouble than it’s worth to pursue complex lawsuits in foreign countries.
The European Account Preservation Order will help them by preventing debtors from removing or dissipating their assets while procedures to obtain and enforce a judgment are ongoing. The Order is enforceable across Europe and should make it easier to recover cross-border debt.
EU Justice Commissioner Viviane Reding said: "The vote sends 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."
The Commission's proposal must now be adopted by Member States in the Council, which is expected to happen in June.
Please contact Thomas Nolan if you would like more information about the issues raised in this article or any aspect of debt collection and credit control.