2 Insolvency Proceeding
| (35616)
16839/13
COM(13) 802
| Draft Council implementing Regulation replacing the lists of insolvency proceedings, winding-up proceedings and liquidators in Annexes A, B and C to Regulation (EC) No. 1346/2000 on insolvency proceedings
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| Legal base
Document originated
Deposited in Parliament
| Article 45 of Regulation No. 1346/2000; —;QMV
20 November 2013
5 December 2013
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| Department | Business, Innovation and Skills
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| Basis of consideration | EM of 17 December 2013
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| Previous Committee Report | None
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| Discussion in Council | Expected during the first half of 2014
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| Committee's assessment | Legally important
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| Committee's decision | Not cleared; further information requested
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Background
2.1 Regulation (EC) No. 1346/2000 (the Regulation)
provides for the co-ordination and administration of cross-border
insolvencies without harmonising national insolvency regimes.
It achieves this by allowing for one "main" set of proceedings
in a single Member State (where the debtor's Centre of Main Interests
"COMI" is situated), with other secondary, territorial
proceedings permitted in parallel in Member States where the debtor
has an establishment. The insolvency law of the Member State
of the main proceedings is applied to all proceedings. So, for
example, where the main proceedings take place in the UK, UK insolvency
law will be applied to assets and creditors in other Member States.
The current document
2.2 When Member States change their insolvency laws,
the three annexes to the Regulation listing types of national
insolvency proceedings (Annex A), national "winding-up"
proceedings (Annex B) and those permitted to be administrators
and liquidators under national laws (Annex C) need to be amended.
The Commission therefore proposes this implementing Regulation
to modify the annexes to reflect recent changes to the domestic
insolvency laws of Lithuania, Ireland, Greece, Luxembourg, Poland
and Portugal. The proposed changes also codify the annexes, reflecting
the accession of Croatia to the EU on 1 July 2013.
The Government's view
2.3 The Minister for Employment Relations and Consumer
Affairs (Jo Swinson) says that there are no specific policy implications
for the UK arising from the implementing Regulation and that having
proceedings brought within the Regulation is generally a positive
development as it provides for a more efficient and ordered regime
for cross border insolvency and increases legal certainty. This
is so long as the proceedings satisfy the definitions within the
Regulation and fall squarely within its scope. She says that enquiries
into the procedures proposed by the six Member States are continuing
but that historically amendments to the annexes have not been
controversial.
2.4 However, referring to Article 45 of the Regulation
which gives the Council the implementing power to amend the annexes,
she adds that departmental officials are currently considering
the application of the opt-in Protocol (No. 21) to the "implementing
measure".
Conclusion
2.5 Although we agree that the substantive modification
of the Regulation appears straightforward, we would be grateful
if the Minister could tell us:
i) whether the changes will have any impact
on UK insolvency practitioners;
ii) whether any jurisdictional implications
arise from the changes;
iii) whether the Treasury has been consulted
on the proposed changes; and
iv) on what basis the Government might consider
that the opt-in Protocol applies to an implementing measure even
though it does not (and cannot) directly cite a Title V legal
base, in this instance being based on the empowering provision
(Article 45) in the parent Regulation No. 1346/2000.
2.6 Pending the Minister's response, the document
remains under scrutiny.
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