Transparency of Debtors assets – guide

The European Commission on 6 March 2008 adopted a Green paper with the scope to launch a broad consultation among interested parties on how to improve the transparency of debtors’ assets in the European Union. The Green Paper describes the problems of the current situation and possible solutions.

The European Commission already noted the difficulties of cross-border debt recovery in its 1998 Communication “Towards greater efficiency in obtaining and enforcing judgements in the European Union”. Two years later, the Programme on Mutual Recognition stated that “it would in fact be much easier to enforce judgements within the European Union if it were possible to obtain accurate information on the debtor’s financial position. Measures could therefore be taken to enable precise identification of a debtor’s assets in the territory of the EU Member States.” The Study on making more efficient the enforcement of judicial decisions within the European Union which was prepared for the Commission in 2004 proposed several measures to improve the enforcement of judicial decisions in the European Union. Finally, on 24 October 2006, the European Commission adopted a Green Paper on improving the efficiency of the enforcement of judgements in the European Union: the attachment of bank accounts.

– The first is a system of declaration of the entire patrimony by the debtor. In some Member States, there is a similar system under which the debtor is also obliged to disclose his assets, but only to the extent necessary for the satisfaction of the claim.

– Other Member States, especially those where the debtor is not required to disclose his patrimony, allow access to search systems which provide specific information.In these jurisdictions, the required information is mainly obtained from registers. This system is applied very differently in terms of access to registers and other sources of information and by means of powers of inquiry and of examination.

• Drawing up a manual of national enforcement laws and practices

Such a manual could contain all the sources of information about a person’s assets which can be accessed in each Member State, the contact addresses of persons who can obtain access to that information if access is limited, the costs of access and other relevant details. This manual could be made available on the website of the European Judicial Network in civil and commercial matters.

• Increasing the information available in and improving access to registers (Commercial registers – Population registers – Social security and tax registers).

Currently, the information available in and access to registers differs significantly between Member States. Increasing that information and improving access to registers could enhance the transparency of debtors´ assets. However, access to registers might conflict with the rules on data protection and social and fiscal secrecy. In particular, information from social security and tax registers may be sensitive. Therefore, access to these data should take into consideration the specific legal conditions for the processing of sensitive data that may differ from one Member State to another.

• Exchange of information between enforcement authorities

In the absence of Europe-wide registers – one option could be to enhance cooperation between national enforcement authorities and introduce the direct exchange of information between them. Enforcement bodies in one Member State would be able to request the assistance of the competent bodies in other Member States. In this regard, the existing Community instrument on the mutual assistance of tax authorities could serve as a model.

A future Community instrument could provide a list of national enforcement authorities entitled to request information from registers in another Member State and could set time limits within which a request for information should be implemented. There could be standardised question and answer forms in all Community languages, and data could be exchanged electronically as far as possible.

If this option is pursued, it will be necessary to consider how to deal with the considerable differences in the information available to enforcement bodies. In some Member States enforcement authorities are not state-run and do not have access to public registers in their own Member States. Consequently, they could not provide appropriate information to enforcement authorities of other Member States.

Data protection rules are to be taken into consideration during mutual assistance procedures

• Measures relating to the debtor’s declaration.

A range of options exist:

One possibility would be a Community instrument setting out the obligation of Member States to introduce a procedure for the taking of a debtor’s declaration, but leaving them discretion as to the conditions under which such a declaration would have to be made..

Another option to be considered, therefore, is the introduction of a uniform “” which would oblige debtors to disclose all assets in the European Judicial area. The transparency of debtors’ assets should not be limited by the territoriality of the enforcement proceedings in the Member States, since within the European Judicial Area – in which the free movement of judgments is guaranteed – all assets of a debtor are in principle subject to enforcement.

The declaration could be given on a standard form available in all Community languages. Minimum (or even uniform) standards could be set for the conditions and content of the declaration and the related sanctions. As a result, creditors would have equal access to information about assets within the European Judicial Area, while debtors within the internal market would receive equal protection. In addition, “information shopping” within the European Judicial Area would be reduced.