EU takes action to facilitate cross-border debt recovery

08:53, July 26, 2011      

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The European Commission launched on Monday a new legal instrument to help companies and individuals recover cross-border debt within the European Union (EU).

The instrument would establish a new European Account Preservation Order that would allow creditors to preserve the amount owed in a debtor's bank account within the EU.

This would raise the prospects of recovering debt as it would prevent debtors from dissipating their assets during the time it takes to obtain and enforce a judgment.

Matthew Newman, spokesman for EU Justice Commissioner Viviane Reding, explained at a press conference on Monday that if approved, the measure would be optional, in the sense that citizens would still be able to choose to resort to their national systems to recover their cross-border debts.

The proposal will be submitted to the European Council and the European Parliament for final approval and then member states will have about 12 months to translate the directive into law.

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