Procedure : 2008/2233(INI)
Document stages in plenary
Document selected : A6-0252/2009

Texts tabled :

A6-0252/2009

Debates :

PV 21/04/2009 - 26
CRE 21/04/2009 - 26

Votes :

PV 22/04/2009 - 6.22

Texts adopted :


REPORT     
PDF 172kWORD 96k
6 April 2009
PE 418.248v02-00 A6-0252/2009

on the effective enforcement of judgments in the European Union: the transparency of debtors’ assets

(2008/2233(INI))

Committee on Legal Affairs

Rapporteur: Neena Gill

Rapporteur for opinion(*):

Antolín Sánchez Presedo, Committee on Economic and Monetary Affairs

(*) Associated committee – Rule 47 of the Rules of Procedure

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION
 EXPLANATORY STATEMENT
 OPINION of the Committee on Economic and Monetary Affairs (*)
 RESULT OF FINAL VOTE IN COMMITTEE

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the effective enforcement of judgments in the European Union: the transparency of debtors’ assets

(2008/2233(INI))

The European Parliament,

–   having regard to Article 65 of the EC Treaty,

–    having regard to the Commission's Green Paper of 6 March 2008 on the effective enforcement of judgments in the European Union: the transparency of debtors’ assets (COM(2008)0128),

–    having regard to the Commission's Green Paper of 24 October 2006 on improving the efficiency of the enforcement of judgments in the European Union: the attachment of bank accounts (COM(2006)0618) and Parliament's resolution of 25 October 2007 thereon(1),

–   having regard to its resolution of 18 December 2008 with recommendations to the Commission on e-Justice(2),

–    having regard to the opinion of the European Economic and Social Committee of 3 December 2008,

–   having regard to the opinion of the European Data Protection Supervisor of 22 September 2008,

–   having regard to Rule 45 of its Rules of Procedure,

–    having regard to the report of the Committee on Legal Affairs and the opinion of the Committee on Economic and Monetary Affairs (A6-0252/2009),

A. whereas, in accordance with the principles of subsidiarity and proportionality, the adoption of a Community instrument in the field of judicial cooperation in civil matters having cross-border implications can be considered only if it can be shown that on a national level it is impossible to remove an obstacle preventing the establishment or the functioning of the internal market,

B.   whereas late payment and non-payment of debts jeopardise the interests of businesses and consumers, especially where the creditor and the enforcement authorities have no information about the debtor's whereabouts or his or her assets; whereas this is exacerbated by the present economic climate, in which cash-flow is essential to the survival of businesses,

C.  whereas the problems of cross-border debt recovery may constitute a serious obstacle to the free circulation of payment orders within the EU and may impede access to justice; whereas, moreover, if judicial decisions cannot be enforced, the doing of justice is undermined together with standards of commercial morality,

D.  whereas, in general, debt recovery is a major problem, which is made worse where claims are of a cross-border nature, particularly for small businesses which do not have specialised lawyers or dedicated debt-collection departments at their disposal and are often placed in the invidious position of having to commit staff, scarce financial resources and, above all, time to this problem rather than to productive activities,

E.  whereas there are indications that the Late Payments Directive(3) is not sufficiently respected or known; whereas if that Directive were now updated and properly implemented it could have a considerable impact in reducing late payment or non-payment,

F.  whereas there are huge divergences under the different systems of national contract and insolvency law as to how creditors may secure their debt at the point of contract, particularly by the use of retention-of-title clauses or other such mechanisms which are sometimes circumvented because of those divergences,

G. whereas the adoption of Community legislation concerning the effective enforcement of judgments must apply to all debtors, without any distinction being made in advance between debtors acting in good or in bad faith,

H. whereas the avoidance, late payment and non-payment of debts is often exacerbated by insufficient care by the parties at the time of their pre-contractual and contractual dealings; whereas there is a need for greater emphasis on commercial awareness and the possible use of "European-style" optional clauses under the Common Frame of Reference (CFR) which would ensure that parties properly consider these issues at the beginning of their commercial relationship,

I.    whereas it has been brought to Parliament's attention that there may be a serious problem in cross-border cases involving recalcitrant debtors, that is to say, persons who could pay their debts or discharge their liabilities but who do not do so or persons in respect of whom there is a risk that they will not pay what they owe even if judgment has been given against them; whereas it appears that such persons often hold substantial assets in different entities, nominees and trusts and successful enforcement cannot be obtained without the requisite information; whereas it is often necessary to obtain such information without alerting the recalcitrant debtor – who will often be in a position to remove assets to another jurisdiction at short notice,

J.    whereas it has further been brought to Parliament's notice that certain sovereign States do not honour arbitration awards or judgments handed down by the courts of another State, with the result that "vulture funds" have emerged which acquire this sovereign debt at a much reduced figure and then seek to make a profit from enforcement; whereas it might arguably be better and fairer to give the original creditors the means to obtain redress themselves,

K.  whereas it is argued that there are few States which have no assets at all outside their own borders and that, if the creditor has no prospect of obtaining enforcement in his or her own Member State (only) or in the State concerned, then the only effective redress is through courts abroad, particularly the courts in other Member States of the EU,

L.   whereas under the Brussels I Regulation(4) each Member State has its own provisional measures shaped and governed by its national law and ex parte orders are not the subject of mutual recognition and enforcement under that Regulation; whereas inter partes orders are given effect to by a recipient court with the nearest equivalent relief available from that court,

M.  whereas provisional measures include:(i) orders for disclosure of information about assets which may be made the subject of measures of execution of a judgment and (ii) orders preserving assets pending enforcement, and (iii) can also take the form of an interim payment order, giving the creditor immediate payment pending resolution of the underlying dispute,

N.  whereas the grant of provisional measures should be subject to conditions similar to those applied by the Court of Justice, namely the creditor would have to persuade the court that he has a justifiable claim on the merits (an enforceable right in the shape of a court order or authentic instrument or evidence of the claim making out a prima facie case – fumus boni juris), and to demonstrate urgency (a real risk that enforcement of the claim may be frustrated if the measure is not granted (periculum in mora)), and whereas the grant of such measures may be made subject to the lodging of security,

O.  whereas in small-scale cases, particularly where legal costs could otherwise be prohibitive, justice delayed is justice denied and whereas, in larger-scale cases, it can be the absence of information about assets which proves to be the greatest obstacle; whereas, therefore, recourse to provisional measures orders might well provide a neat solution in both types of cases,

P.   whereas, moreover, any Community action to make information available needs also to be considered in the context of these types of cases, in which lack of information causes serious injustice; whereas, unless there is information available to the creditor about the assets of a debtor (and a fortiori a recalcitrant debtor) which may be taken in enforcement of a judgment, the creditor will not be able to enforce it,

Q.  whereas, in practice, this problem is not confined to cases where there has already been a judgment which has not been honoured: it may also arise before claimants bring their claims,

R.   whereas, however, it is absolutely essential that any measures proposed should be proportionate; whereas, moreover, they should not merely replicate what can already be achieved through existing national measures and should be confined to cross-border claims, and unnecessary and inappropriate harmonisation should be avoided,

S.   whereas some concern has been expressed that certain of the ideas on the effective enforcement of judgments in the European Union through the transparency of debtors' assets could violate fundamental rights, including the right to privacy (data protection), undermine procedural safeguards and run counter to the constitutional traditions of many Member States,

T.   whereas any proposals made must be cost-effective and integrated into other areas of Community policy in order to avoid unnecessary duplication of effort,

1.  Welcomes the above-mentioned Commission Green Paper of 6 March 2008, because it contributes to the Lisbon Strategy;

2.  States that the lack of transparency in the information required to oblige debtors to fulfil their obligations is contrary to common principles of good faith and pecuniary liability; insists that inadequate knowledge of the national laws on enforcement procedures or their ineffectiveness is likely to slow down completion of a unified internal market and leads to unnecessary costs;

3.  Points out that late payment, non-payment and the problem of debt recovery damage the interests of creditor businesses and consumers, reduce confidence in the internal market and undermine legal action;

4.  Supports an integrated and effective strategy based on the principles of "better lawmaking", and considers that the objective to be achieved should be payment that ensures non-discrimination, the protection of sensitive data and legal guarantees with proportionate measures that provide the requisite transparency and significantly reduce processing and management costs;

5.   Insists that, besides publicly available information, the creditor should have access to the data required – subject to supervision by, or with the assistance of, a competent authority – in order to initiate the enforcement procedure and recover the debt by procedures readily applicable throughout the internal market;

6.   Agrees with the Commission that cross-border debt recovery through enforcement of judicial decisions is a major internal market problem, but considers that the solutions mooted by the Commission need further work in order adequately to address the most difficult problem, that of recalcitrant debtors;

The proposal to draw up a manual of national enforcement laws and practices

7.   Observes that such a manual might be laborious and expensive to produce and update, that, for individuals seeking redress, it might be easier to have one regime to deal with, and that in the majority of cases creditors will have to seek advice from lawyers in the relevant foreign jurisdiction; considers that, nevertheless, a streamlined version may be useful in the absence of a workable cross-border regime;

8.   Strongly believes that the publication of national directories of foreign lawyers exercising their internal market rights under Directives 77/249/EEC(5) and 98/5/EC(6) would be useful; points out that such national directories could be linked to a Commission website and could be complementary to the manual;

Increasing the information available in, and improving access to, public registers

9.   Is opposed to providing unjustified, indiscriminate and arbitrary access to all kinds of data held on population, social security and tax registers, and in favour of an adequate and proportionate framework designed to ensure the effective enforcement of judgments in the European Union;

10. Argues that access to population registers (where they exist) might be useful for tracing hapless private individuals who default on maintenance payments or personal loans, and for avoiding abuses;

11. Considers that, whilst improved access to social security and tax registers has been a successful innovation in certain jurisdictions, it is necessary also to ensure observance of the rules on data protection and confidentiality; points out that this is a sensitive matter to the public; notes, moreover, that there may well be legal problems in using information for a purpose other than the purpose for which it was collected;

12. Observes, in addition, that tax returns and social security records are confidential in many Member States and that the idea of a register, with all the risks which it entails of records going astray, would not be welcomed there and would be regarded as an abuse of executive power;

13. Maintains that, if the proposal were disproportionate to the end sought, it could be open to abuse and could constitute a violation of the right to privacy;

Exchange of information between enforcement authorities

14. Considers that the idea of improved cooperation between public enforcement bodies may be worth exploring further, but points out that such bodies do not exist in all the Member States;

The debtor's declaration

15. Takes the view that a debtor’s declaration can usefully form part of the procedure for enforcing a judgment, where it can be backed by sanctions under national law;

16. Considers that there is no need for Community action in this area, as long as it is not proved that the Member States' existing instruments are not efficient;

Other measures

17. Suggests that consideration could be given to the idea of introducing a form of Community provisional measure additional to those of national courts; considers that this could take the form of a simple, flexible procedure to which effect could be given throughout the EU, thereby avoiding delay and unnecessary expense; takes the view that it would also be effective and fair to non-parties;

18. Proposes that such a measure could apply to arbitration claims as well and could also be taken into account in the context of the forthcoming review of the Brussels I Regulation;

19. Calls on the Commission to treat this matter as a priority and to carry out (a) a detailed appraisal of the problem, (b) a feasibility study of possible Community instruments and (c) an impact assessment of possible Community-law remedies confined to trans-border aspects; considers that the Commission's inquiry should also identify and duly justify the proper legal basis for any Community instrument proposed, which should be limited to cross-border cases and be complementary to and not interfere with the application of purely national remedies in this area;

20. Urges the Commission fully to consider pre-contractual and contractual measures that could be linked with the development of the CFR and any optional instrument deriving therefrom, so as to ensure that parties to European cross-border contracts consider issues of late payment and non-payment when contracting;

21. Eagerly anticipates the review of the Late Payments Directive and urges the Commission to proceed with this as quickly as possible, given the current economic climate;

22. Suggests that a study should be carried out of the divergent national legal approaches to retention of title and other similar mechanisms, with a view to ensuring their mutual recognition;

23. Suggests that a party who has acquired proprietary rights recognised in a court judgment should be able to enforce those rights under the same conditions as the information provider.

o

o        o

24. Instructs its President to forward this resolution to the Council, the Commission and the parliaments of the Member States.

(1)

OJ C 263 E, 16.10.2008, p. 655.

(2)

Texts adopted, P6_TA(2008)0637.

(3)

Directive 2000/35/EC of the European Parliament and of the Council of 29 June 2000 on combating late payment in commercial transactions (OJ L 200, 8.8.2000, p. 35).

(4)

Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ L 12, 16.1.2001, p. 1).

(5)

Council Directive 77/249/EEC of 22 March 1977 to facilitate the effective exercise by lawyers of freedom to provide services (OJ L 78, 26.3.1977, p. 17).

(6)

, Directive 98/5/EC of the European Parliament and of the Council of 16 February 1998 to facilitate practice of the profession of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained (OJ L 77, 14.3.1998, p. 36).


EXPLANATORY STATEMENT

What is behind the Commission's consultative document is the concern that problems of cross-border debt recovery may be an obstacle to the free circulation of payment orders within the European Union and impede the proper functioning of the Internal Market. "Late payment and non-payment jeopardise the interests of businesses and consumers alike. This is particularly the case when the creditor and the enforcement authorities have no information about the debtor’s whereabouts or his assets."

Recalcitrant debtors can be a major problem everywhere in the European Union, particularly for small businesses, which do not possess large resources (contracts with specialist lawyers, debt collection departments). Where the problem can be resolved is where the debtor has assets in the Union and it is possible to trace them and bring legal proceedings. Whether the Commission's proposals, which are limited, would succeed in improving the situation to any great extent is doubtful.

In so far as the content of the Green Paper is concerned, the Commission suggests drawing up a Manual of National Enforcement Laws and Practices, which would be available on the European Judicial Network.

Secondly, the Commission asks about the possibility of increasing the information available in and improving access to commercial registers.

This could be dealt with under the proposals for European e-justice, on which Parliament has already given its views.

In the third place, the idea is mooted of increasing access to population registers.

Fourthly, the Green Paper asks whether enforcement authorities should be given better access to social security and tax registers. This has been used in certain jurisdictions with some success, but there are possible conflicts with data protection and confidentiality.

Fifthly, the Commission suggests that cooperation between public enforcement bodies might be improved.

Sixthly, the idea is put forward of a "European Assets Declaration", which would oblige debtors to disclose all their assets in the European judicial area, backed possibly by sanctions.

Lastly, your rapporteur has responded as follows to the Commission's request for other measures which might be considered.

She considers that creditors could benefit by the introduction of a simple, flexible procedure which could be effective throughout the EU for obtaining provisional measures in the shape of (1) an order to disclosure of information about assets which may be made the subject of measures of execution of a judgment; (2) an order preserving assets pending enforcement.  Such measures could take the form of an interim payment order which gives the creditor immediate payment pending resolution of the underlying dispute.

If the Committee considers that this would be an avenue worth exploring, your rapporteur would suggest that a study be commissioned of provisional measures in the EU which would consider:

(1) How the present national systems work in practice: the study could be limited to one common-law country and a representative sample of civil law countries, to include a least one Eastern European system.

(2) Improvements to the existing systems which might usefully be considered.  To this end, the study should be prepared to look at systems inside and outside the EU. 

(3)  Areas where further cooperation between Member States could be beneficial.  For example the study should identify gaps in the availability of provisional measures in the systems, comparative expense and effectiveness, and whether the position might usefully be improved. 

(4) How provisional orders could be integrated into the workings of the banking system.  Often banks are involved as non parties to the underlying dispute and a provisional orders system should be designed so as to fit in with how banks operate.

(5)  Possible effects of data protection rules, regulatory requirements, and confidentiality.  For example could release of information cause regulatory problems for a non party in another State?

(6) Fairness to non parties (such as asset holders or holders of information) who are not parties to the underlying case but who may be affected by a provisional order. (For example could there be exposure to claims arising from compliance with the order?)

(7) What EC system is likely to be acceptable to Member States?


OPINION of the Committee on Economic and Monetary Affairs (*) (15.12.2008)

for the Committee on Legal Affairs

on the effective enforcement of judgements in the European Union: the transparency of debtors' assets

(2008/2233(INI))

Rapporteur(*): Antolín Sánchez Presedo

(*) Associated committee - Rule 47 of the Rules of Procedure

SUGGESTIONS

The Committee on Economic and Monetary Affairs calls on the Committee on Legal Affairs, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1.  Welcomes the Commission Green Paper on "Effective enforcement of judgments in the European Union: the transparency of debtors’ assets" (COM(2008)0128), because it contributes to the Lisbon Strategy;

2.  States that the lack of transparency in the information required to oblige debtors to fulfil their obligations is contrary to common principles of good faith and pecuniary liability; insists that inadequate knowledge of the national laws on enforcement procedures or their ineffectiveness is likely to slow down completion of a unified internal market and leads to unnecessary costs;

3.  Points out that late payment, non-payment and the problem of debt recovery damage the interests of creditor businesses and consumers, reduce confidence in the internal market and undermine legal action;

4.  Supports an integrated and effective strategy based on the principles of 'better lawmaking', and considers that the objective to be achieved should be payment that ensures non-discrimination, the protection of sensitive data and legal guarantees with proportionate measures that provide the requisite transparency and significantly reduce processing and management costs;

5.  Insists that, besides the public information, the creditor should have access to the data required – subject to supervision by, or with the assistance of, a competent authority – in order to initiate the enforcement procedure and recover the debt by procedures readily applicable throughout the internal market;

6.  Advocates a manual of enforcement laws and practices, increasing and improving the information available in registers, and access to these registers under Community or national operating rules, the exchange of information between enforcement authorities and the investigation of other appropriate measures;

7.  Suggests that the party who has acquired proprietary rights recognised in a court judgment be able to enforce these rights under the same conditions as the information provider.

RESULT OF FINAL VOTE IN COMMITTEE

Date adopted

11.12.2008

 

 

 

Result of final vote

+:

–:

0:

30

1

0

Members present for the final vote

Zsolt László Becsey, Pervenche Berès, Sharon Bowles, Udo Bullmann, Manuel António dos Santos, José Manuel García-Margallo y Marfil, Robert Goebbels, Donata Gottardi, Louis Grech, Benoît Hamon, Othmar Karas, Wolf Klinz, Christoph Konrad, Hans-Peter Martin, Sirpa Pietikäinen, John Purvis, Bernhard Rapkay, Heide Rühle, Antolín Sánchez Presedo, Olle Schmidt, Margarita Starkevičiūtė, Ieke van den Burg, Sahra Wagenknecht

Substitute(s) present for the final vote

Mia De Vits, Janusz Onyszkiewicz, Bilyana Ilieva Raeva, Theodor Dumitru Stolojan, Kristian Vigenin

Substitute(s) under Rule 178(2) present for the final vote

Michael Gahler, Monica Giuntini, Catiuscia Marini


RESULT OF FINAL VOTE IN COMMITTEE

Date adopted

31.3.2009

 

 

 

Result of final vote

+:

–:

0:

19

0

0

Members present for the final vote

Carlo Casini, Bert Doorn, Monica Frassoni, Giuseppe Gargani, Lidia Joanna Geringer de Oedenberg, Neena Gill, Klaus-Heiner Lehne, Hans-Peter Mayer, Manuel Medina Ortega, Hartmut Nassauer, Aloyzas Sakalas, Francesco Enrico Speroni, Diana Wallis, Jaroslav Zvěřina, Tadeusz Zwiefka

Substitute(s) present for the final vote

Nicole Fontaine, Georgios Papastamkos, Jacques Toubon, Renate Weber

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