ARBEJDSDOKUMENT FRA KOMMISSIONENS TJENESTEGRENE RESUMÉ AF RAPPORTEN OM KONSEKVENSANALYSEN [ ] Ledsagedokument til forslag til direktiv om harmonisering af visse aspekter af insolvenslovgivningen

EN EN
EUROPEAN
COMMISSION
Brussels, 7.12.2022
SWD(2022) 396 final
COMMISSION STAFF WORKING DOCUMENT
EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT
Accompanying the document
Proposal for a Directive
harmonising certain aspects of insolvency law
{COM(2022) 702 final} - {SEC(2022) 434 final} - {SWD(2022) 395 final}
Offentligt
KOM (2022) 0702 - SWD-dokument
Europaudvalget 2022
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Need for action
Insolvency proceedings aim at ensuring an orderly winding down or restructuring of
companies in financial and economic distress. The EU has already legislated in the area of
insolvency. However, existing EU legislation only covers pre-insolvency and debt-discharge
measures (captured by the recent Restructuring and Insolvency Directive) and rules on
applicable law in cross-border insolvency cases (set out in the Insolvency Regulation). As a
result, substantive national insolvency law remains widely differing across Member States.
The wide differences in national insolvency regimes are an important obstacle to the single
market for capital in the EU. They pose difficulties for cross-border investors who need to
obtain information about - and be able to compare - 27 insolvency laws, in order to consider
them in their investment decisions (and reflect in the cost of capital). Furthermore, national
insolvency regimes continue to differ in terms of efficiency, notably regarding the time it
takes to liquidate a company and the value that can eventually be recovered. Data sources
analysed in this Impact Assessment suggest that procedures in some Member States suffer
much more from delays and yield considerably less efficient outcomes than the best
performers in the EU. This divergence ties closely with low predictability of the outcome of
insolvency procedures, which leads to higher information and learning costs for investors and
poses a significant barrier to cross border investments. This ultimately prevents efficient
allocation of capital and hinders the development of the Capital Markets Union (CMU).
This initiative follows-up on Action 11 of the 2020 Capital Markets Union Action Plan, where
the Commission committed to making the outcome of cross-border investment more
predictable as regards insolvency proceedings. It aims to harmonise targeted aspects of
substantive law on corporate (non-bank) insolvency in order to make insolvency regimes
more efficient and reduce information and learning costs for cross border creditors resulting
from the lack of harmonisation. It also aims to facilitate cross-border investments and
competition while safeguarding the orderly functioning of the single market as mandated by
Article 114 TFEU.
Member States’ different starting points, legal traditions and policy preferences imply that
reforms at national level in substantive insolvency law are unlikely to lead to sufficient
convergence, despite some reforms launched in the past years. Therefore, action at the
European level is required to ensure that the problem is addressed.
Possible solutions
Two packages of policy options were identified based on input from a group of experts on
restructuring and insolvency law, a dedicated study and stakeholder views. These sources of
evidence, as well as the data from the benchmark study carried out by the European Banking
Authority in 2020 and the World Bank Doing Business indicators, were also used to compare
the options and assess their impacts. The two options considered are a targeted harmonisation
option (Option 1) and a more comprehensive harmonisation option (Option 2), both
implemented via a directive. The option of only issuing a recommendation was discarded as
being unlikely to address the identified problem.
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The proposed options target the three key dimensions of insolvency law: (i) the recovery of
assets from the liquidated estate, (ii) the efficiency of procedures and (iii) the predictable and
fair distribution of recovered value among creditors. They cover, in particular, issues related
to transaction avoidance, asset tracing, directors’ duties and liability, the sale of a company as
a going concern (‘pre-pack’), the insolvency trigger, a special insolvency regime for micro
and small enterprises, the ranking of claims and creditors’ committees. Option 2 includes all
elements covered in option 1, complemented by more ambitious measures across the three
key dimensions mentioned above.
The analysis assesses the options in relation to three objectives: whether they (i) allow a
higher recovery value, (ii) lead to a shorter duration of insolvency proceedings and (iii) reduce
legal uncertainty and information costs. The analysis also considers carefully their cost-
effectiveness and coherence.
Impacts of the preferred option
Based on the comparison of effectiveness and efficiency, option 1 (targeted harmonisation
through a directive) is selected as the preferred option. The detailed analysis found that a
more comprehensive harmonisation (Option 2) would yield higher benefits with regard to two
of the three objectives, but this would also come at a higher cost, notably in terms of potential
inconsistencies with other pieces of law (property law, company law, labour law). The
targeted harmonisation (Option 1) would deliver comparable benefits (to Option 2) but in a
more cost effective manner.
The preferred option is expected to bring significant economic benefits for investors
(creditors), companies, including SMEs, and, in general, the wider economy. Creditors will in
particular benefit from expected higher value recovery as well as reduced information and
learning costs. Investors from third countries will enjoy similar benefits, making it more
attractive for them to invest in the EU. Companies across the EU will face more uniform
insolvency regimes and lower legal uncertainty about what will happen if they become
insolvent. Micro and small companies will benefit directly from the creation of a special
alleviated insolvency regime that will be more proportional to their needs.
The qualitative and quantitative assessment suggests that the targeted harmonisation could
lead to significant reductions in both costs and time of recovery. This is expected to boost
recovery rates by about 1.5 percentage points, which, when extrapolating empirical estimates
in economic studies, could lead to a reduction of funding costs by 1.5 basis points and an
increase in cross-border portfolio asset holdings by about 1.5 percentage points. When
quantified on the basis of available data and plausible assumptions, direct and indirect
benefits are expected to exceed 10 billion EUR annually. Meanwhile, the total costs are
expected to be limited (and would largely accrue to Member States). Some indirect costs are
also expected for companies due to a higher liability of directors. The initiative may also
positively, although marginally, affect digitalisation, transition to a climate-neutral economy
and Sustainable Development Goals.