atradius debt collection handbook 2014

International Debt Collection HandbookEighth Edition - May 2014

ATRADIUS COLLECTIONS - INTERNATIONAL DEBT COLLECTION HANDBOOK · MAY 20142

TABLE OF CONTENTS

Copyright by Atradius Collections · 2014

http://www.atradiuscollections.com

ATRADIUS COLLECTIONS - INTERNATIONAL DEBT COLLECTION HANDBOOK · MAY 2014 3

TABLE OF CONTENTS

1 Introduction

1.1 AboutAtradiusCollections . . . . . . . . . . . . . . . 17

2 Australia

2.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . . 18 2.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 2.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 2.1.3 Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 2.1.4 Debt Collection Costs . . . . . . . . . . . . . . . . . . . . . 18 2.1.5 Prescription. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 2.1.6 Accepted and Most Common Payment Methods. . . . . . . . . . . . . . . . . . . . . . . . 19 2.1.7 Types of Companies . . . . . . . . . . . . . . . . . . . . . . 19 2.1.8 Sources of Information . . . . . . . . . . . . . . . . . . . . 20

2.2 RetentionofTitle. . . . . . . . . . . . . . . . . . . . . . . 20

2.3 SafeguardingMeasures . . . . . . . . . . . . . . . . . . 20

2.4 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . . 20 2.4.1 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 2.4.2 Required Documents. . . . . . . . . . . . . . . . . . . . . . 22 2.4.3 Legal Dunning Procedure . . . . . . . . . . . . . . . . . . 22 2.4.4 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 2.4.5 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

2.4.6 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

2.4.7 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . . 23

2.4.8 Interests and Costs in the Legal Phase . . . . . . . . 23

2.5 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

2.5.1 Enforcement in Debt . . . . . . . . . . . . . . . . . . . . . . 23

2.5.2 Enforcement in Movable Goods . . . . . . . . . . . . . 24

2.5.3 Enforcement in Immovable Goods. . . . . . . . . . . . 24


2.6 InsolvencyProceedings . . . . . . . . . . . . . . . . . . 24

2.6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

2.6.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

2.6.3 Required Documents. . . . . . . . . . . . . . . . . . . . . . 24

2.6.4 Expected Timeframe and outcome . . . . . . . . . . . 25

2.6.5 Limited Companies . . . . . . . . . . . . . . . . . . . . . . . 25

2.6.6 Unlimited Companies/Individuals . . . . . . . . . . . . 25

2.6.7 Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

2.7 ArbitrationandMediation . . . . . . . . . . . . . . . . 25

3 Austria

3.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . . 26 3.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 3.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 3.1.3 Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 3.1.4 Debt Collection Costs . . . . . . . . . . . . . . . . . . . . . 26

3.2 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . . 27 3.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 3.2.2 Required Documents. . . . . . . . . . . . . . . . . . . . . . 27 3.2.3 Legal Dunning Procedure . . . . . . . . . . . . . . . . . . 27

3.2.4 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 3.2.5 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 3.2.6 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . . 27 3.2.7 Interests and Costs in the Legal Phase . . . . . . . . 27

3.3 InsolvencyProceedings . . . . . . . . . . . . . . . . . . 28 3.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 3.3.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 3.3.3 Required Documents. . . . . . . . . . . . . . . . . . . . . . 28 3.3.4 Expected Timeframe and outcome . . . . . . . . . . . 28

4 Belgium




4.4 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . . 32 4.4.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 4.4.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 4.4.3 Required Documents. . . . . . . . . . . . . . . . . . . . . . 33 4.4.4 Legal Dunning Procedure . . . . . . . . . . . . . . . . . . 33 4.4.5 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 4.4.6 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 4.4.7 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 4.4.8 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . . 35 4.4.9 Interests and Costs in the Legal Phase . . . . . . . . 35

4.5 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 4.5.1 Enforcement in Debt . . . . . . . . . . . . . . . . . . . . . . 35


TABLE OF CONTENTS

4.5.2 Enforcement in Movable Goods . . . . . . . . . . . . . 36 4.5.3 Enforcement in Immovable Goods. . . . . . . . . . . . 36 4.5.4 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . . 36

4.6 InsolvencyProceedings . . . . . . . . . . . . . . . . . . 36 4.6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 4.6.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

4.6.3 Required Documents. . . . . . . . . . . . . . . . . . . . . . 37 4.6.4 Expected Timeframe and outcome . . . . . . . . . . . 37 4.6.5 Rescission in Case of Bankruptcy . . . . . . . . . . . . 37

4.7 ArbitrationandMediation . . . . . . . . . . . . . . . . 38 4.7.1 Mediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 4.7.2 Arbitration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

5 Brazil


5.2 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . . 41 5.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 5.2.2 Required Documents. . . . . . . . . . . . . . . . . . . . . . 41 5.2.3 Legal Dunning Procedure (“Protesto”) . . . . . . . . 41


5.3 InsolvencyProceedings . . . . . . . . . . . . . . . . . . 42 5.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 5.3.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 5.3.3 Required Documents. . . . . . . . . . . . . . . . . . . . . . 42 5.3.4 Expected Timeframe and Outcome . . . . . . . . . . . 42

6 Bulgaria





7 Canada

7.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . . 48 7.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 7.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 7.1.3 Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 7.1.4 Debt Collection Costs . . . . . . . . . . . . . . . . . . . . . 48 7.1.5 Prescription. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48


7.2.4 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

7.2.5 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49




7.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

7.3.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50


7.3.4 Expected Timeframe and Outcome . . . . . . . . . . . 50

8 Chile


8.2 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . . 53 8.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 8.2.2 Required Documents. . . . . . . . . . . . . . . . . . . . . . 53 8.2.3 Legal Dunning Procedure . . . . . . . . . . . . . . . . . . 53 8.2.4 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53


TABLE OF CONTENTS

8.2.5 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53




8.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

8.3.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54



9 China

9.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . . 56

9.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

9.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

9.1.3 Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

9.1.4 Debt Collection Costs . . . . . . . . . . . . . . . . . . . . . 56

9.1.5 Prescription. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

9.1.6 Accepted and Most Common Payment Methods. . . . . . . . . . . . . . . . . . . . . . . . 57

9.1.7 Types of Companies . . . . . . . . . . . . . . . . . . . . . . 57

9.1.8 Sources of Information . . . . . . . . . . . . . . . . . . . . 58



9.4 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . . 58

9.4.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

9.4.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . . 59


9.4.4 Legal Dunning Procedure . . . . . . . . . . . . . . . . . . 59

9.4.5 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

9.4.6 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

9.4.7 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60



9.5 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . 60






9.6.1 General Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

9.6.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61




9.6.6 Non-Limited Companies/Individuals. . . . . . . . . . 62

9.6.7 Pool of Creditors . . . . . . . . . . . . . . . . . . . . . . . . . 62

9.6.8 Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62


10 CzechRepublic

10.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . . 64

10.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

10.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

10.1.3 Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64


10.1.5 Prescription. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65





10.4 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . . 66

10.4.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

10.4.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . . 66


10.4.4 Legal Dunning Procedure . . . . . . . . . . . . . . . . . . 66

10.4.5 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

10.4.6 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

10.4.7 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66



10.5 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . 67






10.6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

10.6.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67






TABLE OF CONTENTS


10.6.8 Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68


11 Denmark



11.3 AchnowledgementoftheDebt. . . . . . . . . . . . 72

11.4 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . . 72 11.4.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 11.4.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . . 72


11.4.4 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

11.4.5 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

11.4.6 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73


11.5 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . 73




11.6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

11.6.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74




12 Finland


12.2 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . . 77 12.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 12.2.2 Required Documents. . . . . . . . . . . . . . . . . . . . . . 77 12.2.3 Legal Dunning Procedure (“Protesto”) . . . . . . . . 77

12.2.4 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

12.2.5 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77



12.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

12.3.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78


12.3.4 Expected Timeframe and outcome . . . . . . . . . . . 78

13 France

13.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . . 80 13.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 13.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 13.1.3 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 13.1.4 Debt Collection Costs . . . . . . . . . . . . . . . . . . . . . 80 13.1.5 Prescription. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 13.1.6 Accepted and Most Common Payment Methods. . . . . . . . . . . . . . . . . . . . . . . . 81 13.1.7 Types of Companies . . . . . . . . . . . . . . . . . . . . . . 81 13.1.8 Sources of Information . . . . . . . . . . . . . . . . . . . . 81



13.4 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . . 82 13.4.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 13.4.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

13.4.3 Required Documents. . . . . . . . . . . . . . . . . . . . . . 82 13.4.4 Legal Dunning Procedure . . . . . . . . . . . . . . . . . . 82 13.4.5 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 13.4.6 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 13.4.7 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 13.4.8 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . . 82 13.4.9 Interests and Costs in the Legal Phase . . . . . . . . 83

13.5 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 13.5.1 Enforcement in Debt . . . . . . . . . . . . . . . . . . . . . . 83 13.5.2 Enforcement in Movable Goods . . . . . . . . . . . . . 83 13.5.3 Enforcement in Immovable Goods. . . . . . . . . . . . 83 13.5.4 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . . 83

13.6 InsolvencyProceedings . . . . . . . . . . . . . . . . . . 83 13.6.1 General Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 13.6.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83


TABLE OF CONTENTS





13.6.7 Pool of Creditors . . . . . . . . . . . . . . . . . . . . . . . . . 84 13.6.8 Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84


14 Germany




14.4 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . . 88 14.4.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 14.4.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 14.4.3 Required Documents. . . . . . . . . . . . . . . . . . . . . . 89 14.4.4 Legal Dunning Procedure . . . . . . . . . . . . . . . . . . 89 14.4.5 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 14.4.6 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

14.4.7 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89



14.5 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . 90






14.6.1 General Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

14.6.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90






14.6.8 Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91


15 Greece


15.2 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . . 93 15.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 15.2.2 Required Documents. . . . . . . . . . . . . . . . . . . . . . 93 15.2.3 Payment Order . . . . . . . . . . . . . . . . . . . . . . . . . . 93



16 HongKong

16.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . . 96

16.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

16.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

16.1.3 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96


16.1.5 Prescription. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

16.1.6 Accepted and Most Common Payment Methods. . . . . . . . . . . . . . . . . . . . . . . . 96




16.3 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . . 97 16.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 16.3.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 16.3.3 Required Documents. . . . . . . . . . . . . . . . . . . . . . 98 16.3.4 Interests and Costs in the Legal Phase . . . . . . . . 98

16.4 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 16.4.1 Enforcement in Debt . . . . . . . . . . . . . . . . . . . . . . 98


TABLE OF CONTENTS



16.5.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98


17 Hungary

17.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . 100 17.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 17.1.2 Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 17.1.3 Debt Collection Costs . . . . . . . . . . . . . . . . . . . . 100 17.1.4 Prescription. . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 17.1.5 Accepted and Most Common Payment Methods. . . . . . . . . . . . . . . . . . . . . . . 101 17.1.6 Types of Companies . . . . . . . . . . . . . . . . . . . . . 101 17.1.7 Sources of Information . . . . . . . . . . . . . . . . . . . 102

17.2 RetentionofTitle. . . . . . . . . . . . . . . . . . . . . . 102

17.3 SafeguardingMeasures . . . . . . . . . . . . . . . . . 102

17.4 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . 102 17.4.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 17.4.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . 102 17.4.3 Required Documents. . . . . . . . . . . . . . . . . . . . . 102 17.4.4 Payment Order Procedure . . . . . . . . . . . . . . . . . 102 17.4.5 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 17.4.6 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

17.4.7 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 17.4.8 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . 103 17.4.9 Interests and Costs in the Legal Phase . . . . . . . 103

17.5 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . 103 17.5.1 Enforcement in Debt . . . . . . . . . . . . . . . . . . . . . 103 17.5.2 Enforcement in Movable Goods . . . . . . . . . . . . 103 17.5.3 Enforcement in Immovable Goods. . . . . . . . . . . 103 17.5.4 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . 103

17.6 InsolvencyProceedings . . . . . . . . . . . . . . . . . 103 17.6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 17.6.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 17.6.3 Required Documents. . . . . . . . . . . . . . . . . . . . . 104 17.6.4 Expected Timeframe and Outcome . . . . . . . . . . 104 17.6.5 Limited Companies . . . . . . . . . . . . . . . . . . . . . . 104 17.6.6 Non-Limited Companies/Individuals. . . . . . . . . 105 17.6.7 Pool of Creditors . . . . . . . . . . . . . . . . . . . . . . . . 105 17.6.8 Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

17.7 ArbitrationandMediation . . . . . . . . . . . . . . . 105

18 India

18.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . 106 18.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 18.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 18.1.3 Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 18.1.4 Debt Collection Costs . . . . . . . . . . . . . . . . . . . . 106 18.1.5 Prescription. . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 18.1.6 Accepted and Most Common Payment Methods. . . . . . . . . . . . . . . . . . . . . . . 106 18.1.7 Types of Entities . . . . . . . . . . . . . . . . . . . . . . . . 107 18.1.8 Sources of Information . . . . . . . . . . . . . . . . . . . 107



18.4 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . 107 18.4.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 18.4.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . 107 18.4.3 Required Documents. . . . . . . . . . . . . . . . . . . . . 107

18.4.4 Legal Dunning Procedure . . . . . . . . . . . . . . . . . 108 18.4.5 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 18.4.6 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 18.4.7 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 18.4.8 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . 108 18.4.9 Interests and Costs in the Legal Phase . . . . . . . 108

18.5 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . 109

18.6 InsolvencyProceedings . . . . . . . . . . . . . . . . . 109 18.6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 18.6.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 18.6.3 Required Documents. . . . . . . . . . . . . . . . . . . . . 109 18.6.4 Expected Timeframe and Outcome . . . . . . . . . . 109 18.6.5 Limited Companies . . . . . . . . . . . . . . . . . . . . . . 109 18.6.6 Unlimited Companies/Individuals . . . . . . . . . . . 109


19 Ireland

19.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . 110 19.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 19.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 19.1.3 Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 19.1.4 Debt Collection Costs . . . . . . . . . . . . . . . . . . . . 111

19.1.5 Prescription. . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 19.1.6 Accepted and Most Common Payment Methods. . . . . . . . . . . . . . . . . . . . . . . 111 19.1.7 Types of Companies . . . . . . . . . . . . . . . . . . . . . 112 19.1.8 Sources of Information . . . . . . . . . . . . . . . . . . . 112


TABLE OF CONTENTS



19.4 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . 112

19.4.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

19.4.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . 113

19.4.3 Required Documents. . . . . . . . . . . . . . . . . . . . . 113

19.4.4 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

19.4.5 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . 113

19.4.6 Interests and Costs in the Legal Phase . . . . . . . 113

19.5 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . 113

19.5.1 Enforcement in Debt . . . . . . . . . . . . . . . . . . . . . 113

19.5.2 Enforcement in Movable Goods . . . . . . . . . . . . 113

19.5.3 Enforcement in Immovable Goods. . . . . . . . . . . 114

19.6 InsolvencyProceedings . . . . . . . . . . . . . . . . . 114

19.6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114


19.6.3 Expected Timeframe and Outcome . . . . . . . . . . 114

20 Italy

20.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . 116

20.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

20.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

20.1.3 Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

20.1.4 Debt Collection Costs . . . . . . . . . . . . . . . . . . . . 116

20.1.5 Prescription. . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

20.1.6 Accepted and Most Common

Payment Methods. . . . . . . . . . . . . . . . . . . . . . . 117

20.1.7 Types of Companies . . . . . . . . . . . . . . . . . . . . . 117

20.1.8 Sources of Information . . . . . . . . . . . . . . . . . . . 118



20.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118

20.3.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . 118


20.3.4 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

20.3.5 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

20.3.6 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119



20.4 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . 120






20.5.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120

20.5.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 120



20.5.5 Limited Companies . . . . . . . . . . . . . . . . . . . . . . 121

20.5.6 Non-Limited Companies/Individuals. . . . . . . . . 121

20.5.7 Pool of Creditors . . . . . . . . . . . . . . . . . . . . . . . . 121

20.5.8 Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121


21 Luxembourg

21.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . 122

21.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

21.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

21.1.3 Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122



21.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123


21.2.3 Legal Dunning Procedure . . . . . . . . . . . . . . . . . 123

21.2.4 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

21.2.5 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123




21.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

21.3.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 124




TABLE OF CONTENTS

22 Mexico

22.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . 126 22.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 22.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 22.1.3 Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 22.1.4 Debt Collection Costs . . . . . . . . . . . . . . . . . . . . 126 22.1.5 Prescription. . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 22.1.6 Accepted and Most Common Payment Methods. . . . . . . . . . . . . . . . . . . . . . . 127 22.1.7 Types of Companies . . . . . . . . . . . . . . . . . . . . . 127 22.1.8 Sources of Information . . . . . . . . . . . . . . . . . . . 128



22.4 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . 128 22.4.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 22.4.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . 128 22.4.3 Required Documents. . . . . . . . . . . . . . . . . . . . . 129 22.4.4 Legal Dunning Procedure . . . . . . . . . . . . . . . . . 129

22.4.5 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 22.4.6 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 22.4.7 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 22.4.8 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . 129 22.4.9 Interests and Costs in the Legal Phase . . . . . . . 129


22.6 InsolvencyProceedings . . . . . . . . . . . . . . . . . 130 22.6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 22.6.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 22.6.3 Required Documents. . . . . . . . . . . . . . . . . . . . . 131 22.6.4 Expected Timeframe and Outcome . . . . . . . . . . 131 22.6.5 Limited Companies . . . . . . . . . . . . . . . . . . . . . . 131


23 Netherlands




23.4 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . 134 23.4.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 23.4.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . 134 23.4.3 Required Documents. . . . . . . . . . . . . . . . . . . . . 135 23.4.4 Legal Dunning Procedure . . . . . . . . . . . . . . . . . 135 23.4.5 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 23.4.6 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

23.4.7 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 23.4.8 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . 136 23.4.9 Interests and Costs in the Legal Phase . . . . . . . 136


23.6 InsolvencyProceedings . . . . . . . . . . . . . . . . . 137 23.6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 23.6.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 23.6.3 Required Documents. . . . . . . . . . . . . . . . . . . . . 138 23.6.4 Expected Timeframe and Outcome . . . . . . . . . . 138 23.6.5 Limited Companies . . . . . . . . . . . . . . . . . . . . . . 138 23.6.6 Non-Limited Companies/Individuals. . . . . . . . . 138 23.6.7 Pool of Creditors . . . . . . . . . . . . . . . . . . . . . . . . 138 23.6.8 Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138


24 Norway

24.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . 140 24.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 24.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 24.1.3 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 24.1.4 Debt Collection Costs . . . . . . . . . . . . . . . . . . . . 140


24.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 24.2.2 Required Documents. . . . . . . . . . . . . . . . . . . . . 141 24.2.3 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 24.2.4 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 24.2.5 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . 141 24.2.6 Interests and Costs in the Legal Phase . . . . . . . 141


TABLE OF CONTENTS

24.3 InsolvencyProceedings . . . . . . . . . . . . . . . . . 142 24.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 24.3.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

24.3.3 Required Documents. . . . . . . . . . . . . . . . . . . . . 142 24.3.4 Expected Timeframe and Outcome . . . . . . . . . . 142

25 Poland

25.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . 144 25.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 25.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 25.1.3 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 25.1.4 Debt Collection Costs . . . . . . . . . . . . . . . . . . . . 144 25.1.5 Prescription. . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 25.1.6 Accepted and Most Common Payment Methods. . . . . . . . . . . . . . . . . . . . . . . 145 25.1.7 Types of Companies . . . . . . . . . . . . . . . . . . . . . 145 25.1.8 Sources of Information . . . . . . . . . . . . . . . . . . . 146



25.4 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . 146 25.4.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 25.4.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . 146 25.4.3 Required Documents. . . . . . . . . . . . . . . . . . . . . 147 25.4.4 Legal Dunning Procedure . . . . . . . . . . . . . . . . . 147 25.4.5 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 25.4.6 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

25.4.7 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147



25.5 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . 148






25.6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148

25.6.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 148




25.6.6 Non-Limited Companies/Individuals. . . . . . . . . 149


25.6.8 Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149


26 Portugal

26.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . 150

26.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150

26.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 150

26.1.3 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150


26.1.5 Prescription. . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

26.1.6 Accepted and most Common Payment Methods. . . . . . . . . . . . . . . . . . . . . . . 151





26.4 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . 152 26.4.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 26.4.2 Required Documents. . . . . . . . . . . . . . . . . . . . . 152 26.4.3 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 26.4.4 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 26.4.5 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 26.4.6 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . 152 26.4.7 Interests and Costs in the Legal Phase . . . . . . . 152

26.5 InsolvencyProceedings . . . . . . . . . . . . . . . . . 153 26.5.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 26.5.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 26.5.3 Required Documents. . . . . . . . . . . . . . . . . . . . . 153 26.5.4 Expected Timeframe and Outcome . . . . . . . . . . 153

27 Romania

27.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . 154 27.1.1 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 27.1.2 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 27.1.3 Debt Collection Costs . . . . . . . . . . . . . . . . . . . . 154

27.2 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . 154 27.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154



27.2.4 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

27.2.5 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

27.2.6 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155



TABLE OF CONTENTS


27.3 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . 155 27.3.1 Enforcement in Movable Goods . . . . . . . . . . . . 155 27.3.2 Enforcement in Immovable Goods. . . . . . . . . . . 155 27.3.3 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . 155

27.4 InsolvencyProceedings . . . . . . . . . . . . . . . . . 156 27.4.1 General Facts . . . . . . . . . . . . . . . . . . . . . . . . . . 156

27.4.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 27.4.3 Required Documents. . . . . . . . . . . . . . . . . . . . . 156 27.4.4 Expected Timeframe and Outcome . . . . . . . . . . 156 27.4.5 Limited Companies . . . . . . . . . . . . . . . . . . . . . . 156 27.4.6 Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156


28 Russia


28.2 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . 160 28.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 28.2.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . 160 28.2.3 Required Documents. . . . . . . . . . . . . . . . . . . . . 160 28.2.4 Legal Dunning Procedure . . . . . . . . . . . . . . . . . 160

28.2.5 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160

28.2.6 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160

28.2.7 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161




28.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

28.3.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 161




28.3.6 Unlimited Companies/Individuals . . . . . . . . . . . 162


28.3.8 Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162

29 Singapore


29.2 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . 165 29.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 29.2.2 Required Documents. . . . . . . . . . . . . . . . . . . . . 165 29.2.3 Legal Dunning Procedure . . . . . . . . . . . . . . . . . 165

29.2.4 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

29.2.5 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165




29.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166

29.3.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 166


30 SlovakRepublic



30.2.4 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 30.2.5 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 30.2.6 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . 169 30.2.7 Interests and Costs in the Legal Phase . . . . . . . 169



TABLE OF CONTENTS

31 SouthAfrica

31.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . 172

31.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172

31.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 172

31.1.3 Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172



31.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173



31.2.4 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173

31.2.5 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173




31.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174

31.3.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 174



32 Spain

32.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . 176

32.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

32.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

32.1.3 Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176


32.1.5 Prescription. . . . . . . . . . . . . . . . . . . . . . . . . . . . 177

32.1.6 Accepted and Most Common

Payment Methods. . . . . . . . . . . . . . . . . . . . . . . 177






32.4.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

32.4.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . 178



32.4.5 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

32.4.6 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

32.4.7 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179

32.4.8 Legal Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179



32.5 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . 179


32.5.2 Provisional Enforcement . . . . . . . . . . . . . . . . . . 179

32.5.3 Enforcement of A Definitive Judgment . . . . . . . 180



32.6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

32.6.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 180




33 Sweden

33.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . 182

33.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182

33.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 182

33.1.3 Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182



33.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183


33.2.3 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183

33.2.4 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183




33.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184

33.3.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 184




TABLE OF CONTENTS

34 Switzerland



34.2.4 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 34.2.5 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 34.2.6 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . 187 34.2.7 Interests and Costs in the Legal Phase . . . . . . . 187


35 Tunisia

35.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . 190 35.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 35.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 35.1.3 Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190

35.2 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . 191 35.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 35.2.2 Required Documents. . . . . . . . . . . . . . . . . . . . . 191 35.2.3 Legal Dunning Procedure . . . . . . . . . . . . . . . . . 191 35.2.4 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191

35.2.5 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191


35.2.7 Interests and Costs In the Legal Phase . . . . . . . 191


35.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192

35.3.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 192



36 Turkey



36.2.4 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195 36.2.5 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195 36.2.6 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . 195 36.2.7 Interests and Costs In the Legal Phase . . . . . . . 195


37 Ukraine



37.2.4 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 37.2.5 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 37.2.6 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . 199 37.2.7 Interests and Costs In the Legal Phase . . . . . . . 199


38 Uk

38.1 UnitedKingdom . . . . . . . . . . . . . . . . . . . . . . . 202

38.1.1 AmicablePhase . . . . . . . . . . . . . . . . . . . . . . . . 202 38.1.1.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202


TABLE OF CONTENTS

38.1.1.2 Local Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 202 38.1.1.3 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202 38.1.1.4 Debt Collection Costs . . . . . . . . . . . . . . . . . . . . 203 38.1.1.5 Prescription. . . . . . . . . . . . . . . . . . . . . . . . . . . . 203 38.1.1.6 Accepted and Most Common Payment Methods. . . . . . . . . . . . . . . . . . . . . . . 203 38.1.1.7 Types of Companies . . . . . . . . . . . . . . . . . . . . . 203 38.1.1.8 Sources of Information . . . . . . . . . . . . . . . . . . . 203

38.1.2 RetentionofTitle. . . . . . . . . . . . . . . . . . . . . . 204

38.1.3 SafeguardingMeasures . . . . . . . . . . . . . . . . . 204

38.1.4 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . 204 38.1.4.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204 38.1.4.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . 204

38.1.4.3 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 38.1.4.4 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . 205 38.1.4.5 Interests and Costs in the Legal Phase . . . . . . . 205

38.1.5 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . 205 38.1.5.1 Enforcement in Debt . . . . . . . . . . . . . . . . . . . . . 205 38.1.5.2 Enforcement in Movable Goods . . . . . . . . . . . . 205 38.1.5.3 Enforcement in Immovable Goods. . . . . . . . . . . 205

38.1.6 InsolvencyProceedings . . . . . . . . . . . . . . . . . 206 38.1.6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 38.1.6.2 Required Documents. . . . . . . . . . . . . . . . . . . . . 206 38.1.6.3 Expected Timeframe and Outcome . . . . . . . . . . 206

38.2 Scotland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206

38.2.1 SummaryCauseActions . . . . . . . . . . . . . . . . . 206 38.2.1.1 Ordinary Actions . . . . . . . . . . . . . . . . . . . . . . . . 206 38.2.1.2 Defendant’s Responses . . . . . . . . . . . . . . . . . . . 206

38.2.2 EnforcementofDecrees . . . . . . . . . . . . . . . . . 207

38.2.3 TheDebtArrangementScheme. . . . . . . . . . . 207

38.2.4 ChargeforPayment . . . . . . . . . . . . . . . . . . . . 207

38.2.5 DetailedExaminationof AttachmentOrders . . . . . . . . . . . . . . . . . . . . . 207 38.2.5.1 How does the Sheriff officer Carry Out the Attachment?. . . . . . . . . . . . . . . . . . . . . . . . 207

38.2.5.2 Reporting the Attachment . . . . . . . . . . . . . . . . 207 38.2.5.3 Removal and Auction of Attached Articles . . . . 207 38.2.5.4 How to Attach Articles Kept in Dwelling Houses . . . . . . . . . . . . . . . . . . . . . . 207 38.2.5.5 Examination of Exceptional Attachment Orders . . . . . . . . . . . . . . . . . . . . . . 208 38.2.5.6 How is an Application for an Exceptional Attachment Order Made? . . . . . . . . . . . . . . . . . 208 38.2.5.7 What is the Effect of an Exceptional Attachment Order? . . . . . . . . . . . . . . . . . . . . . . 208

39 UnitedStatesofAmerica



39.3 LegalProcedures. . . . . . . . . . . . . . . . . . . . . . . 212 39.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 39.3.2 Legal System. . . . . . . . . . . . . . . . . . . . . . . . . . . 212 39.3.3 Required Documents. . . . . . . . . . . . . . . . . . . . . 212 39.3.4 Legal Dunning Procedure . . . . . . . . . . . . . . . . . 212 39.3.5 Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212

39.3.6 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 39.3.7 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 39.3.8 Expected Timeframe . . . . . . . . . . . . . . . . . . . . . 212 39.3.9 Interests and Costs in the Legal Phase . . . . . . . 212 39.3.10 Arbitration and Mediation. . . . . . . . . . . . . . . . . 213


39.5 InsolvencyProceedings . . . . . . . . . . . . . . . . . 214 39.5.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214 39.5.2 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 214 39.5.3 Required Documents. . . . . . . . . . . . . . . . . . . . . 214 39.5.4 Expected Timeframe and Outcome . . . . . . . . . . 214 39.5.5 Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214

LegalNotice . . . . . . . . . . . . . . . . . . . . . . . . . . 216

AtradiusCollectionsContactDetails. . . . . . . 217


1 INTRODUCTION

1 Introduction

Welcome

We are extremely proud to bring you the latest edition of the International Debt Collections Handbook. Released for the first time in 2008, this edition is brought to you with the addition of three new countries - Chile, South Africa and Ukraine. The ver-sion you hold in your hands today is now the 8th edition.

Since its launch, the International Debt Collections Handbook has established itself as a key tool for you and your business when it comes to making decisions concerning collections in a foreign country. International debt collection and country specific legal systems create challenges that affect every business. As a result, the International Debt Collections Handbook has proven to be an invaluable, highly demanded product for decision-makers in the collections and credit management industry. It supports you and your business by helping you select the right approach to debt collection and explains the diversity and complexity of coun-try specific debt collection approaches, often with an immense amount of detail.

This new edition now covers 38 countries and explains the dif-ferent stages of amicable settlement, financial regulations around collections, legal proceedings and insolvency procedures in every single country.

No business is immune to the risk of international trade and can be exposed to poor payment behaviour. As a result, maintain-ing and protecting cash flow is especially crucial for businesses. Having knowledge of amicable collections as well as the coun-try specific legal phases surrounding collections is therefore vi-tal for survival in these challenging times. With local expertise businesses can ensure that they are following a professional and successful approach, which is where the International Debt Col-lections Handbook can really help.

I am sure that you too will find the International Debt Collections Handbook a highly useful in-depth resource tool for supporting you and your business in all debt collections related decisions.

Kind regards,

Rudi De Greve Global Operations Director, Atradius Collections

TAB

LE OF CO

NTEN

TSIN

TRO

DU

CTIO

N


1 INTRODUCTION

1.1 About Atradius Collections

Atradius was originally founded as NCM in the Netherlands in 1925 and was created with the goal of improving trade for companies in the Netherlands. In Germany, Atradius’ roots stem from Gerling Credit, which was established in 1954 and operated solely out of Germany until 1962, when it opened its first inter-national office in Switzerland.

In Spain, Crédito y Caución was founded in 1929 and focused on growing steadily to become the dominant credit insurer and surety company on the Iberian Peninsula.

The heritage, knowledge and exemplary service standards of these three companies is now combined within the Atradius Group, creating Atradius Collections as a global leader in business-to-business debt collection.

With such a pedigree and global reach, Atradius Collections is equipped to not only leverage successful debt collection on behalf of our customers, but also sets out to maintain high standards in the market and has become a key player in the Business- to-business collections market.

As a consequence of being a separate division within the Atradius Group, Atradius Collections holds a strong position, sharing his-tory, knowledge and reputation, which helps ensure that we de-liver when it comes to collecting outstanding debts, outsourcing customer’s receivables management or guiding them along the route to growth.

Atradius Collections provides leading business-to-business col-lections services plus a range of solutions that cover receivables management needs. Their integrated worldwide network and op-erations are unique in the market, while their online collections management system allows customers to place and manage debts 24 hours a day, 365 days per year.

Having 20 offices and an extensive network worldwide, Atradius Collections serves over 14,500 customers and collects over 270 million euros per year. As a part of the Atradius Group, Atradius Collections looks back on over 85 years of global credit management industry experience, positioning then as a leading international trade invoice collection company

TAB

LE O

F CO

NTE

NTS

INTR

OD

UC

TIO

N


2.1 Amicable Phase

2.1.1 General Atradius Collections Australia maintains a professional collection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the col-lection process in-house, contacting both verbally and in writing whilst adhering to federal and state laws. Where there is a case of dispute, we aim to reach an amicable solution between creditor and debtor. We do this by analysing all contractual documents (e.g. signed contracts, orders, confirmations, invoices and deliv-ery notes as well as all standard terms that have been agreed upon). All investigations are completed with the assistance and agreement of our legal team.

2.1.2 Local Agent Although not commonly used in Australia, we can employ lo-cal agents to make field visits to your debtors in all areas of the country. However, due to the size of the country, it may not be economical in more remote regions. The agents we use will report back on any meetings they have with the debtor, as well as also providing a summary of the debtor’s business operations.

2.1.3 Interests Atradius Collections Australia is not allowed to automatically charge interest to debtors unless the client’s terms and condi-tions and/or contract specifically outlines the penalty for over-due payments. From a cultural point of view, Australian debtors very rarely agree to pay late payment interest and it is often used as a negotiation tool between debtors and collectors. However, if the matter becomes legal and we file proceedings in the Court for the debt’s recovery, then our claims will include a charge for overdue interest as agreed under each state’s laws and the court system. Again debtors will always reject paying any interest in the first instance.

2.1.4 Debt Collection Costs In Australia debt collection costs are not chargeable to debtors unless the client’s terms and conditions and/or contract specifically outline exactly which collection costs become the responsibility of the debtor and when. Again if the matter becomes legal and we file proceedings in court for the debt’s recovery, then our claim will include court fees and solicitors’ costs as agreed under each state’s laws and the court system. These will be charged to the debtor.

2 Australia

GDP (2014 EST.)

billion 1,436 $GDP GROWTH RATE, ESTIMATED 2014

-4.6%INDUSTRIES

Among the world’s largest and most technologically advanced producers of mining, industrial and transportation equipment, food processing, chemicals, steel

EXPORTS ANNUAL GROWTH RATE (2014 EST.)

6.5 %IMPORTS ANNUAL GROWTH RATE (2014 EST.)

-2.5 %SUCCESS RATES (1/2011-12/2013 EST.)

60.71 %

SOURCE: INTERNATIONAL MONETARY FUND,

WORLD ECONOMIC OUTLOOK DATABASE, OCTOBER 2013

ALL DATA IN USD

TAB

LE OF CO

NTEN

TSA

USTR

ALIA


2 AUSTRALIA

2.1.5 PrescriptionThe general prescription period in Australia for a simple contract debt is generally 6 years starting from the original due date of the debt. This means that a court will not hear an action for pay-ment where a debt is outstanding for more than 6 years. Legal action on such debts is barred by the statute. The time-period may start again, however, if the debtor either makes a payment or acknowledges the debt in writing. To have the effect of re-starting the clock, a signed acknowledgment must either be made by the debtor or a properly authorised agent of the debtor, acknowledging that the debt exists and is unpaid. Whether a docu-

ment constitutes sufficient acknowledgment of the debt to re-start the time period must be determined on a case-by-case basis. The limitation period for enforcing a Court Judgment is 12 years.

2.1.6 Accepted and Most Common Payment Methods The most common payment methods are bank transfer and cheque payment. We do not offer direct debit from debtor’s accounts.

2.1.7 Types Of Companies

Sole trader 77 An individual trading on their own

77 The sole trader owns all the business assets and is responsible for the liabilities of the business.

77 Liability is unlimited and includes all personal assets, including any assets the owner shares with another person.

Partnership 77 An association of people or entities running a business together, but not as a company.

77 It can be a normal partnership, a limited partnership or an incorporated limited partnership.

77 Apart from partners with limited liability, all partners are liable for financial obligations. This applies even if one partner incurs debts without the other partner’s knowledge or consent.

Trust 77 A business structure where a ‘trustee’ holds property or income for the benefit of others, called ‘beneficiaries’

77 Trusts have various complex structures, each with their own set of financial and legal obligations.

Proprietary Limited Company 77 A legal entity separate from its shareholders

77 Are regulated under the Corporations Law, which sets out substantial obligations for company directors.

77 Companies have limited liability, but directors can be personally liable under the Corporations Act 2001 if found to be fraudulent, negligent or reckless.

TAB

LE O

F CO

NTE

NTS

AU

STR

ALI

A


2 AUSTRALIA

2.1.8 Sources of Information In Australia we contract very experienced reporting agencies to assist with the assessment of the financial situation of debtors. Depending on the debtor’s legal form we can also find out further information, such as any property owned by them to determine the best course of action against a debtor. We also have numer-ous tracing agents who employ investigators where necessary to locate debtors and their assets.

2.2 Retention of Title The commencement of the Personal Property Security Act 2009 (PPSA) on 30 January 2012 has changed the way in which busi-nesses that regularly supply goods under retention of title (ROT) terms register their entitlement. Previously, ROT clauses were recognised at law and did not require registration – indeed regis-tration was not possible. Suppliers of goods that supplied under an effective ROT clause were able to recover goods not yet paid for upon the insolvency of the party in possession of the ROT goods. Now, under the Personal Property Securities Act 2009 (Cth), the supplier can register their interest on the PPS Register in order to protect that interest, and their right to repossess the goods, should the customer fail to pay. For continuous supply of goods situations, the supplier needs only to register once for each customer – not for every supply of goods.

The security interest arising from an ROT arrangement is referred to, in PPSA terminology, as a ‘purchase money security interest’ (PMSI). The importance of this type of security interest is that if duly registered within the legislated timeframes, it generally has a ‘super priority’ against other interests in a variety of circum-stances. For instance, a supplier who has a duly registered PMSI can potentially have priority over even previously registered security interests. A failure to register an ROT arrangement as a PMSI does not render it ineffective, however, but means it will not enjoy super priority against other interests. That is not to say that all ROT suppliers should necessarily try to register all of their ROT arrangements as PMSIs. Instead, ROT suppliers will need to consider carefully the benefits of registration against the nature and magnitude of the risk that the ROT arrangement is intended to address and their relationship with their customers, as well as the burden and cost of registration.

2.3 Safeguarding Measures In case a debtor is not able to satisfy your claim in a speedy manner, we can request the debtor to secure the debt in favour of our client. This can be done amicably and cost efficiently by providing deed of acknowledgement of debt - drafted by our solicitors and authenticated by a Justice of the Peace. This allows for the deed to be used as evidence of the debt if any legal action in the courts is disputed. If the debtor is a company we can request the directors sign personal guarantees allowing them a suitable longer term repayment plan (over 3 months). The debtor is also able to offer other means of security like mortgages, assignment of debts or assets.

2.4 Legal Procedures

2.4.1 Legal System

77 Debts of up to $40,000 AUD are recovered in the Local Court.

77 Debts of up to $750,000 AUD can be recovered in the District Court.

77 Debts exceeding $750,000 AUD are usually dealt with in the Supreme Court.

TAB

LE OF CO

NTEN

TSA

USTR

ALIA


2 AUSTRALIA

Flowchart of the Legal Process

TAB

LE O

F CO

NTE

NTS

AU

STR

ALI

A


2 AUSTRALIA

2.4.2 Required Documents In order to begin any legal procedure we require copies of the invoices and a clear statement of account indicating payments and credit notes that have been paid against the outstanding in-voices, as well as any contract or terms & conditions binding both parties. As the lawsuit proceeds further we may require further documentation such as copies of the contract, orders, confirma-tions, delivery notes and invoices etc, which can be requested when needed. In case of dispute, all notes of conversations be-tween creditor and debtor via letters and emails that may assist our lawyers should be kept. In the case of oral negotiations, we may require meeting or system notes about what was agreed.

2.4.3 Legal Dunning Drocedure Unless required by your contract (or personal guarantee), it is not necessary to send any letter of demand, reminder notice or other form of correspondence requesting payment before taking legal action. However, it is considered best practice to issue a form of pre-legal step before taking legal action to give the debtors a chance to pay before incurring costs. Many contracts require a demand for payment of formal termination for amounts to become due. It is best to comply but is not usually enforced by law.

2.4.4 LawsuitTo commence Court proceedings the creditor files a Statement of Claim. This document sets out the basic details of the debt and informs the debtor they need to pay the debt or to defend the matter within 28 days after service of the Statement of Claim. If the debtor does not file a defence and does not pay within that twenty-eight day period, then Judgment will be entered against them. The Plaintiff is free to commence proceedings in any Court but if the action is commenced in an “inappropriate Court” the Defendant may be able to transfer the proceedings to a more appropriate Court. We always try to issue legal proceedings in the state in which the debtor resides, so taking away their abil-ity to dispute the jurisdiction. The full legal costs and disbursements can be claimed in the statement of claim and they become payable upon issue of the statement of claim – not service. If a Defendant has not paid the amount claimed or filed a defence within 28 days of service of the statement of claim, the Plaintiff is entitled to apply for a default judgment against the Defendant. An application for a default judgment in a claim is made by filing a notice of motion. This must include an affidavit in support by an officer of the client and must take into account the indebted-ness of the Defendant. The affidavit in support of the notice of motion must be filed within 14 days of swearing, which can cause issues in cases where the client is located outside of Australia. A judgment can be enforced for 12 years, with interest accruing

from the day following the date of judgment. Some Defendants and their lawyers may want to delay the proceedings for as long as they can. This may be in the form of a request for particulars - a letter requesting details of the claim – such as whether the contract is written or verbal, copies of invoices and details of orders. Whilst it often is a delaying tactic, if it is straightforward to answer (and does not tactically damage the case) it is best to do so because the alternative (a fight about particulars) can add unnecessary costs and delays to the proceedings.

2.4.5 AppealAppeals from the Local Court are to the Supreme Court, thus making any application very expensive. Appeals must be lodged within 28 days of the date of the decision, or such other time as allowed by the Court.

It is also possible for judgment debtors to make an application to set aside a default judgment. To do so they have to serve evidence to prove two things:

77 That there is a reasonable explanation for why no defence was filed within the time allowed; and, more importantly

77 That there is an arguable defence to the claim.

It is not sufficient to only satisfy one of the factors, though there is definitely more weight placed on whether or not there is an ar-guable defence. It does not have to be a defence that will succeed but merely has to be arguable. It is not sufficient to swear that the Defendant has an arguable defence, it is necessary to state some facts in the affidavit that show that the proposed defence is reasonably arguable in the circumstances.

2.4.6 CostsCosts of the civil law procedures are determined by each of the state’s legislation and regulation and all differ slightly. All costs depend on the amount of the outstanding principal, which also determines which court the matter is started in. To issue a summons costs approximately $200 - $1,400 AUD in Court filing fees and $300 - $1,000 AUD in Solicitor’s costs - depending on the debt value. To then obtain a default Judgment will cost a further $200 - $600 AUD in Solicitor’s costs. Enforcement options will cost approximately $500 - $1,000 AUD for a Garnishee Order, Examination Notice or Writ for the Levy of Property. Bankruptcy and Wind Up Applications are significantly more expensive with the total process at times costing $5,000 - $8,000 AUD.

TAB

LE OF CO

NTEN

TSA

USTR

ALIA


2 AUSTRALIA

2.4.7 Expected TimeframeThe average duration of a normal standard legal process is be-tween 10 and 16 weeks, whereas a defended court procedure can take 12 months or longer, depending on the complexity of the case and the availability of the judge and the lawyers on both sides.

2.4.8 Interests and Costs in the Legal PhaseOut of court interests and costs & charges can only be charged if they are included in your written agreement or contract with your buyer before the transaction occurs, and it clearly outlines what the penalties will be for late payment. Even then it is not common for debtors to agree to pay any of these extra costs and they are often used to negotiate a quicker settlement of the ac-count. Under our local laws, no automatic costs and interest are allowed to be added to debts when being collected by a commer-cial debt collector. When legal action is filed through the Courts (a Statement of Claim) the legislation allows for a prescribed amount to be added to the debt to cover the Court Filing Fee, Solicitor’s drafting costs and prescribed interest. These are re-ferred to as ’scale costs’ and are legally added to the debt amount upon the filing of the Statement of Claim. In practice however, many debtors will only pay the invoiced debt amount of a State-ment of Claim and not pay the fees, costs and interest portion. This amount can be pursued further, but in reality, it is often not worth spending further money chasing these costs.

2.5 Enforcement

2.5.1 Enforcement in DebtThe creditor can enforce a court awarded judgment in the fol-lowing ways:

Garnishee Order

A garnishee order is an order made by the court to allow you to recover the judgment debt from the debtor’s bank account, wag-es or even people who owe money to the debtor. The person the order is addressed to (the employer, bank or person who owes money to the judgment debtor) is known as ‘the garnishee’. The most common garnishee order is for the judgment debtor’s wages or salary. This order tells the judgment debtor’s employer to take an amount of money from the judgment debtor’s wage and pay it to you until the whole judgment debt is paid off. As an enforce-ment tool, garnishee orders are not very successful, as they have very strict requirements attached to them and if all information is not 100% correct, they will often be rejected.

Examination Notice

If you are unsure about the judgment debtor’s financial position, you can ask the judgment debtor to provide you with information about their income and assets. This is done with an examination notice or an examination order, and can help you decide whether to take further enforcement action and what form that action should take. First you must file the motion at Court and then serve the debtor (or a director). The filing fee is approximately $100 AUD for an individual and $150 AUD for a corporation and the service fee varies depending on the debtor’s location.

Bankruptcy

If the debt is for more than $5,000 AUD you may start bankruptcy proceedings against the creditor. If a person is declared bankrupt, then all of their property (with some basic living exemptions) comes under the control of a trustee. You may then lodge proof of your debt (the judgment) with the trustee to receive a share of the profits from the sale of the debtor’s property. Before you commence bankruptcy proceedings consider whether the debtor owns enough property to make declaring them bankrupt worth-while. If they own real estate (check at the Lands Titles Office) or if they have a position that they will lose if declared bankrupt, then the threat of bankruptcy may force payment of the debt. The first step in bankruptcy proceedings is usually to serve the person with a bankruptcy notice. A bankruptcy notice is a form requiring the debtor to pay the debt within 21 days. Once 21 days have elapsed from the service of the bankruptcy notice on the debtor, a creditor’s petition must be lodged in the Federal Magistrates Court. The cost of bankrupting someone should be carefully considered as it may cost over $6,000 AUD.

Winding up a Company

Winding up is similar to bankruptcy. To wind up a company you must prove that it’s insolvent (unable to pay its debts) by issuing a statutory demand. If the judgment debtor does not respond to a statutory demand within 21 days, you can file an application for a winding up order. This is an expensive and complex way of enforcing the debt and is usually considered only as a last resort.

TAB

LE O

F CO

NTE

NTS

AU

STR

ALI

A


2 AUSTRALIA

2.5.2 Enforcement in Movable GoodsWrit for the Levy of Property

A Writ for the Levy of Property is an order for a sheriff to ‘seize’ and sell, at auction, personal property (not land) belonging to the debtor. The money from the sale of the goods is used to pay the judgment debt owed to you. In many cases the arrival of the sheriff with a writ will encourage the judgment debtor to avoid the sale of their property by making arrangements to pay you.

At this stage the debtor can either apply to set aside the judg-ment, make an instalment application to the Court or disagree with the outstanding amount of the judgment debt. The sher-iff charges $75 AUD for each address they visit, and for each time they visit an address. The cost for the sheriff to auction the seized goods is usually a flat fee of $50 AUD but may be more in some country areas due to advertising and auction expenses. If the sheriff needs to tow a car you will need to pay a deposit of around $300 AUD, which will not be refunded to you. If there are any special requirements, such as moving pianos, pool tables or heavy machinery, you may have to pay extra to the sheriff. Any expenses that the sheriff incurs in enforcing the writ will be payable by you. The sheriff also charges a levy of 3% of any monies made from auctioning the seized goods, payable to them after the auction. Any amount payable will be added to the judgment debt.

2.5.3 Enforcement in Immovable GoodsIf the debtor owns real estate the only possible way to access this asset is either through bankruptcy of an individual or the liqui-dation of a company. This is discussed further in 2.6 Insolvency Proceedings.

2.5.4 Expected TimeframeThe duration for the various enforcements options vary depend-ing on which action you choose. Some actions will be finalised in 6-8 weeks and others may take 6-9 months.

2.6 Insolvency Proceedings

2.6.1 GeneralInsolvency is determined on a cash flow basis or the ability to pay debts. This corresponds with the definitions contained in the Corporations Act, which states an entity is insolvent if it cannot pay its debts as they fall due. The inability to pay debts is linked directly to the inability to obtain immediate cash and to debts be-ing “due and payable”. The aim of an insolvency proceeding is to pay out all creditors equally by liquidating the assets of a debtor company or collecting the enforceable income of an individual who is declared bankrupt.

2.6.2 ProceedingsA Notice of Winding Up Application is issued to the registered office of a company when a creditor has filed in Court an ap-plication to wind up a company. This normally takes place after a creditor obtains judgment debt or following failure for a debtor company to comply with a statutory demand within 21 days. Once these events have started, a creditor may issue proceed-ings in the Federal Court or the Supreme Court to wind up the company. The process for issuing these proceedings is brought under Section 459P of the Corporations Act. If the Winding Up Application hearing takes place and the Court is satisfied that a company should be wound up, the Court makes an order for the company to be wound up and appoints an Official Liquidator. Normally, the appointed Liquidator has provided consent to be appointed prior to the hearing upon the request of the creditor (or their lawyers) making the Winding Up Application.

It is important that Directors are aware that once a Winding Up application commences, it’s normally based upon an act of in-solvency having taken place. If the Winding Up action is not dismissed and heard before a Court, the question of insolvency is usually taken into consideration. The creditors can then lodge their claim with the Liquidator and attempt to take back any goods delivered under retention of title. After the procedure starts, a claim-lodge is possible provided it occurs before the liq-uidation is finalised. The Liquidator can either accept or dispute the lodged debt. If the claim is disputed, the creditor may file a claim in court to prove the justification of his claim, if further documentation etc. does not convince the liquidator into con-firming the debt. At the end of the proceeding all creditors with confirmed debts may receive a dividend if there are any funds to be divided. Please note that the petition creditor’s legal costs that placed the debtor company into liquidation will be considered as a priority and paid back to the creditor first before any dividends are shared.

2.6.3 Required Documents

In order to lodge the claim on your behalf we are in need of:

77 Copies of invoices.

77 Copies of contracts.

77 Copies of orders, order confirmations and delivery notes.

77 Copies of general conditions of sales, should there be any.

77 Copies of any other correspondence that may verify the claim.

TAB

LE OF CO

NTEN

TSA

USTR

ALIA


2 AUSTRALIA

2.6.4 Expected Timeframe and OutcomeThe whole duration of insolvency proceeding cannot be predict-ed in Australia. They can take from a few days up to many years, depending on the complexity of the company and the liquida-tion.

2.6.5 Limited CompaniesProprietary Limited companies can either go into liquidation or company administration. Prior to being made insolvent the company directors may be able to call a halt to the liquidation proceedings and appoint an Administrator to relieve the pressure and stress that they are under. If this isn’t done and they do not respond to a statutory demand within 21 days you can file an ap-plication for a winding up order and appoint a Liquidator.

2.6.6 Unlimited Companies/IndividualsUnlimited companies are not very common in Australia and do not make a difference to the insolvency proceedings. They can be liquidated and the members bankrupted in the pursuit of a debt recovery. Bankruptcy generally lasts for a period of three years for individuals but can be extended in certain circumstances. There is a permanent record on the National Personal Insolvency Index (an electronic public register which can be accessed by anyone for a fee). Creditors are then notified of the bankruptcy and unsecured creditors must stop pursuing them for payment of the debt. A trustee will then be appointed and in order to pay the creditors, this trustee will:

77 Sell any assets (although they are able to keep certain types of assets)

77 Mandate contributions from their income once they earn over a certain amount, currently $48,000 AUD

77 Investigate their financial affairs and may recover property or monies that they have transferred to someone else for inadequate consideration

2.6.7 RescissionUnfair preferences usually involve transactions that discriminate in favour of one creditor at the expense of others. The aim of the law is to ensure creditors are treated equally by preventing any unsecured creditors from receiving an advantage over others. The general time frame in which payments may be classified as a preferential payment is 6 months prior to the date of Bankruptcy or Liquidation. Please note that the time frame is a guide and contains specific provisions that may alter the period that preferential payments may be recovered depending on several circumstances of each Bankrupt Estate or Liquidation. In addition, related party transactions may be void for a period anywhere up to 4 years prior to the date of Bankruptcy or Liquidation. If the liquidator disputes these payments, the creditor may be forced to refund them and can only lodge the corresponding debt instead.

2.7 Arbitration and MediationIf creditor and debtor agree on an alternative dispute solution they can attend an arbitration and mediation service. These are all private tribunals that look to serve the community, commerce and industry by facilitating efficient dispute resolution meth-ods including arbitration, mediation, conciliation and adjudica-tion. However these are not widely used within debt recovery in Australia.

TAB

LE O

F CO

NTE

NTS

AU

STR

ALI

A


3.1 Amicable Phase

3.1.1 General Atradius Collections Austria maintains a professional collection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the col-lection process in-house, contacting both verbally and in writing whilst adhering to federal and state laws.

3.1.2 Local Agent At this time we do not have the facility to visit debtors in Austria, but should this situation change, we will inform you immediately. However, if the debtor wishes to visit our premises, we will glad-ly arrange a face-to-face meeting to discuss the situation.

3.1.3 Interests Atradius Collections always charges interest to debtors calculated from the base rate set by the Austrian National Bank plus 9,2% on a daily basis (see European Directive 2000/35/CEE Article 3. Section 1d in conjunction with paragraph 456 Austrian trade law. From a cultural point of view, Austrian debtors are used to paying late payment interest, although the actual amount of the interest payment is considered a matter of negotiation between debtors and collectors.

3.1.4 Debt Collection Costs Collection Costs (“Inkassokosten”) can be charged according to § 1333 ABGB as damage for delay. Austrian cases are dealt with by our German subsidiary, so therefore we apply the same debt collection costs that are charged to German debtors, calculated on the basis of the RVG (Rechtsanwaltsvergütungsgesetz), the Ger-man statutory lawyers’ fees. Atradius Collections Germany will either forward all recovered debt collection costs to our client to reduce the claim, retain the cost or add them to the success fee. This will depend on the contractual agreement between the cli-ent and Atradius Collections.

3 Austria

GDP (2014 EST.)

billion 445 $GDP GROWTH RATE, ESTIMATED 2014

7.1 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of construction, machinery, vehicles and parts, food, metals, chemicals, lumber and wood processing, paper and paperboard, communications equipment, tourism



3.2 %SUCCESS RATES (1/2011-12/2013 EST.)

63.91 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSA

USTR

IA


3 AUSTRIA


3.2.1 GeneralEntering into legal procedure is possible without prior warning to the debtor. However, in Austria courts prefer to find settlements between the debtor and creditor.

3.2.2 Required DocumentsIn order to apply the legal dunning procedure, we require cop-ies of the contract, invoices and statements indicating payments and credit notes, which have been paid against the outstanding monies. In case of a regular lawsuit procedure, copies of all con-tractual documentation should be available starting with the contract, orders, order confirmations, delivery notes and invoices etc. Every step of the relationship between both parties should be provable by documentation. In case of dispute, all notes of conversations between creditor and debtor should be kept and given to our lawyers. In the case of verbal negotiations, we are in need of the visit/negotiations reports and names of any wit-nesses.

3.2.3 Legal Dunning ProcedureThe Austrian legal dunning procedure is a 1-step procedure for payment claims up to 75,000 EUR. The outcome is the Payment Order (Zahlungsbefehl). For a claim up to K¤ 10 the local court is the competent court, and for claims exceeding K¤ 10 the district court is the competent one. The Court releases a limited Payment Order (“bedingter Zahlungsbefehl.”) to be served to the debtor. The debtor can object against it within 4 weeks after delivery or pay the principal amount plus the interest within 14 days. If no objection is filed, the limited Payment Order becomes valid as a final Payment Order and the execution can be started. If an objection is filed within the 4-week deadline, the process will be transferred into a normal court procedure.

3.2.4 LawsuitThe regular lawsuit procedure is either initiated directly after amicable collection failed due to a dispute by the debtor or follows directly to the legal dunning procedure after the debtor appealed. Usually a written pre-procedure is issued. Both the plaintiff and the defendant exchange opinions and proofs by letter until the judge has the impression of having all relevant information in order to judge. In this case a hearing is scheduled during which both parties have to be present. After the oral hearing the judge sets a date to publish the final judgement. The parties will be informed about the outcome in writing by the responsible court.

3.2.5 CostsAll costs are dependant on the amount of the outstanding principal and are calculated taking into account amounts kept by each party. There are different fees that can apply during a procedure, which makes it difficult to predict the total costs. In addition to this, costs for witnesses and/or experts might also arise. Costs estimation will be provided on a case-by-case basis should legal actions become necessary.

3.2.6 Expected TimeframeThe average duration of a legal dunning process is between 8 and 12 weeks, whereas a court procedure can take up to 12 months or longer depending on the complexity of the case, as well as the availability of the judge and the lawyers on all sides.

3.2.7 Interests and Costs in the Legal PhaseOut of court interests and costs can be claimed as part of the outstanding during the legal procedure. Court costs and lawyers’ costs are also chargeable to the debtor when a judgement is made in favour of the creditor. In the case of a legal settlement the parties bear the costs of the corresponding proceedings in proportion to their prevailing or failing.

TAB

LE O

F CO

NTE

NTS

AU

STR

IA


3 AUSTRIA


3.3.1 GeneralThe Insolvency Procedures in Austria changed in 2010 and the new law is called the Insolvency Code (“Insolvenzordnung”).

The German Version of this Law can be found here:

http://www.ris.bka.gv.at/

3.3.2 ProceedingsThe central procedure is still the “Zwangsausgleich”, which has been rephrased to “reorganisation plan”. This is a special procedure where the debtor has to offer a minimum dividend to their creditors of 30%, which must be paid within two years. More than 50% of the creditors must agree to the reorganisation plan. These creditors - the majority of more than 50% headcount - must settle on a minimum 50% of the total outstanding amount. Both conditions (majority of heads and majority of outstanding amounts) must apply, and the court finally decides upon it. The insolvency procedure takes 2 to 12 months. The dividend payment can take up to two years. The average dividend in Aus- tria in 2009 was 9.7% of the debt. With the new insolvency law we do not yet have significant enough numbers to have a look at whether this figure has increased since 2010. The next 2 to 3 years will show whether the average dividend has be increased as intended. An insolvency procedure can be managed by a lawyer, the three privileged creditor associations KSV, AKV and Creditre-form or the creditor themselves.



77 The original power of attorney

77 Copies of invoices

77 Copies of contracts or

77 Copies of orders, order confirmations and delivery notes

77 Copies of general conditions of sales, should there be any

77 Copies of any other correspondence that may verify the claim

3.3.4 Expected Timeframe and OutcomeThe deadline to lodge claims is usually around 1-3 months de-pending on the complexity of the procedure and starts from the adjunction order (Insolvenzeröffnungsbeschluss).

TAB

LE OF CO

NTEN

TSA

USTR

IA


3 AUSTRIA

TAB

LE O

F CO

NTE

NTS

AU

STR

IA


4.1 Amicable Phase

4.1.1 General Atradius Collections Belgium maintains a professional collection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the col-lection process in-house, contacting both orally and in writing, whilst adhering to federal and state laws. Where there is a dis-pute, we aim to reach an amicable solution between creditor and debtor. We do this by analysing all contractual documents (e.g. signed contracts, orders, confirmations, invoices and delivery notes as well as standard terms previously agreed upon). All investigations are completed with the assistance and agreement of our legal team.

4.1.2 Local Agent When our in-house actions do not lead to a positive result, we will contact a local agent from our network. Each agent is respon-sible for a specific region or area, where their role is to contact debtors by visiting their address and providing us with infor-mation regarding the debtor’s situation and solvency. Agents are also permitted to receive payments from debtor. Agents have to keep us informed regarding the progress of the case and their final report will help us make a decision regarding the next ac-tions to be taken

4.1.3 Interests Atradius Collections Belgium always charges interest to debtors. The applied default rate is 12%, unless the interest rate foreseen in client’s sales conditions is higher. In that case, we will apply the client’s interest rate. From a cultural point of view, the re-covery of late payment interests in Belgium is quite difficult due to the interest payment being considered a matter of negotiation between debtors and collectors.

4.1.4 Debt Collection Costs

In Belgium we charge two types of collection costs:

77 Collection costs according to section 6 of the statute of 2 August 2002 on late payment: a fixed amount of 40 EUR (whatever the amount of the debt)

77 A penalty clause of 15% of the principal amount of the cliam submitted to Atradius Collections Belgium.

From a cultural point of view, Belgian debtors are not used to paying debt collection costs, though often the actual amount of these costs can be considered a matter of negotiation.

4 Belgium

GDP (2014 EST.)


5.6 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of engineering and metal products, motor vehicle assembly, transportation equipment, scientific instruments, processed food and beverages, chemicals, basic metals, textiles, glass, petroleum




88.07 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSB

ELGIU

M


4 BELGIUM

4.1.5 PrescriptionThe general prescription period in Belgium is 10 years. The stat-ute of limitations depends of the nature of the invoice. Some ele-ments like a legal summons can interrupt the prescription period.

4.1.6 Accepted and Most Common Payment MethodsThe most common payment method is a bank transfer. Artra-dius Collections also accepts drafts, but these are quite rare in Belgium. We do not offer the direct booking off from debtor ac-counts.

4.1.7 Types of Companies77 SA/NV

Joint stock company. At least two associates are required.

77 SPRL/BVBA Limited Liability Company. At least two associates are required.

77 SPRLU/EBVBA Limited Liability Company. One associate is required.

77 SCRI Cooperative Company Unlimited Liability of the associates. At least two associates are required.

77 SCRL Cooperative Company Limited Liability of the associates. At least two associates are required.

Liability of Founder(s) of a Company (Mostly SPRL/BVBA or SA/NV)

Generally the founders of a company cannot be held personally liable for the debts of the company. The founders have to keep enough capital at the disposal of the company to enable it to function normally for at least two years. If the company does not have enough capital at its disposal and it goes bankrupt within three years, the trustee in charge of the bankruptcy can sue the founders in court, which may hold them liable for some debts of the company.

Managerial Liability

Managers act on behalf of the company and engage the company but not themselves; so they cannot therefore be held person-ally liable for the debts of the company. However, they can be held liable if they made mistakes or errors in the exercise of their managerial function or if they did not respect the rules of the Belgian Code of Companies. To be held liable in these cases, the creditor can act against them, but has to establish the fault, the damages and the connection between them. In case of a bank-

ruptcy, a special kind of managerial liability exists. If the trustee in charge of the bankruptcy or the unpaid creditor can establish the gross misconduct of the manager(s) and if this misconduct caused wholly or partially the bankruptcy, the manager(s) can be held wholly or partially liable for the debts of the company. This kind of action is rarely successful, because of the difficulty of the burden of proof in these matters.

4.1.8 Sources of informationIn Belgium we have several sources of information at our disposal to obtain information on debtors:

77 External information provider We have access to official databases that provide us with information on companies such as address, insolvency status, bank account, a payment delays to the VAT administration and Social Laws, manager’s name and shareholders. Every official modification of the company will be available in that database.

77 Agent’s report As explained previously, our agents constitute a source of information by providing us with details on a debtor’s situation at their official address, their assets and reputation.

77 Bailiff’s report Our bailiffs are able to inform us regarding potential other seizures registered against the debtor (only available when a legal action has been already started).

77 Public registers We can contact public offices to know if debtors are owners of real estate and if mortgages are in place on those properties. We can then make a decision whether or not to take a real estate action.

77 Registration of address office A private debtor with no known address can be traced via the Registration of Address Office. Private persons are legally obliged to officially de-register when moving from one town to another, and to re-register in their new town. Occasionally some debtors do not follow this procedure and cannot be traced.

TAB

LE O

F CO

NTE

NTS

BEL

GIU

M


4 BELGIUM

4.2 Retention of TitleIn some cases (bankruptcy and temporary composition) reten-tion of title is possible and opposable to third parties. Stringent conditions have to be met.

In case of a bankruptcy, retention of title is regulated by section 101 of the statute on bankruptcy of 08.08.1997.

To be opposable to third parties :

77 The clause of retention of title must be established by a written document at the latest on the date of the delivery of the goods.

77 The clause has to be accepted by the buyer and the creditor has to be able to prove this if necessary.

77 The goods have to be movable and still be in possession of the buyer. In case of bankruptcy, the request to activate the retention of title has to be initiated by the creditor before the deposit of the first statement of verification of the claim.

Given the strict conditions and the fact that one or more condi-tions are rarely met, the use of retention of title in Belgium is often not very successful.

4.3 Safeguarding Measures The goal of these measures is to maintain, as much as possible, the condition of the debtor’s estate (mobile goods and/or real estate).

Normally, the creditor has to obtain from the competent Judge of Seizures an authorisation for the safeguarding measure in ques-tion.

However, in case of a protective seizure in the hands of a third party, the creditor does not need a special authorisation for this action. He can instruct a bailiff to seize the debtor’s bank account (with agreement of the bank) or to proceed to a protective sei-zure of the funds owed to the debtor by a third party. These two actions only need the correct paperwork. Naturally, it is impos-sible to know beforehand if the funds are still available on the debtor’s bank account or in the hands of the third party, owing money to the debtor. Therefore, this (very costly) option should be well considered beforehand, as it will cost around 500 EUR (or more).

If the creditor knows the debtor is going to sell all or a part of his real estate and he can establish the urgency, the creditor can request the competent Judge of Seizures to grant him permis-sion to proceed to a protective seizure on all or a part of debtor’s real estate This attachment is valid for three years and can be renewed for terms of three years (if necessary).

If the creditor learns a notary is selling all or a part of debtor’s real estate, he can ask a bailiff to deliver a special protective gar-nishment to the notary, notifying the latter of the creditor’s claim and of his intention to receive a dividend of the selling price. Any notary proceeding to sell (a part of) a debtor’s real estate on his behalf must check a special register, in which all the attachments on the real estate of debtor and seizures on debtor’s mobile goods are mentioned. Every notary must ask every creditor mentioned in this register if he is still a creditor and if so, the amount of his claim.

A debtor can offer to the creditor some kind of security like mortgages, assignment of debt or against debts as well. Assign-ments of debts or assets can be done via a contract, while mort-gages have to be registered by a notary.


4.4.1 General Legal action to recover receivables is based on the general prin-ciples of the Civil Code, (Code Civil/ Burgerlijk Wet- boek), the Commercial Code (Code de Commerce/Wetboek van Koophan-del) and the Judicial Code (Code Judiciare/Gerechtelijk Wet-boek) and on particular regulations in special circumstances or special cases. The most common insolvency proceedings (bank-ruptcy and judicial reorganization) are governed by special laws. Atradius Collections Belgium uses his own network of lawyers with which we work on a regular basis.

TAB

LE OF CO

NTEN

TSB

ELGIU

M


4 BELGIUM

4.4.2 Legal System

To determine which court will deal with the claim, depends on the total amount of the claim (interests and collections costs included):

77 A claim <1,860 EUR against a Merchant or non-Merchant debtor is handled by the Justice of the Peace

77 A claim >1,860 EUR against a Merchant debtor is handled by the Commercial Court

77 A claim >1,860 EUR against a Non-Merchant debtor is handled by the Court of First Degree

According to the rules of the judicial code, the action against the debtor in payment of the claim is brought before a competent court in the judicial district where the debtor has his official place of residence or his registered address (if the debtor is a company).

The plaintiff does not require representation by a registered attorney before any court except in front of the Constitutional Court.


The mandatory documents required to start a legal action in Belgium are:

77 Copies of the nvoices

77 Copy of the terms and conditions

77 Power of attorney signed by the client

In Belgium, a Power of Attorney is needed for each file and has to be signed by the creditor’s legal representative. The proxy must be drafted in the language of the legal proceedings (i.e. in French, Dutch or German).In disputed cases, it is highly recommended to present copies of the formal notices and/or reminders sent to the debtor, proof of orders or contracts, of delivery of the goods and any other document signed by the debtor in which he acknowl-edges the claim or the dispute.

The creditor should also be able to provide any notes of conver-sations between him and the debtor.

4.4.4 Legal Dunning Procedure In Belgium, sections 1338 to 1344 of the judicial code provide a summary procedure to obtain payment from the debtor. While the cost for initiating this procedure is rather low in comparison with a normal lawsuit, we do not use this procedure for the re-covery of receivables, because of the following disadvantages:

77 Necessity of a written and signed document by the debtor acknowledging the claim (and establishing the claim)

77 The whole claim cannot exceed 1,860 EUR

77 The claim has to be undisputed

77 Before the introduction of the request by the lawyer, the creditor has to send a special reminder to the debtor by registered letter; this letter has to meet very strict and formal conditions. If the content of the letter does not comply, the request of the creditor will be rejected as not admissible

77 The request to the competent court has to be signed by a lawyer

Constitutional Court

Court of Appeal Work Court

Court of FirstInstance

Justice of Peace

Commercial Court

DistrictCourt

Judicial Organisation in Belgium

TAB

LE O

F CO

NTE

NTS

BEL

GIU

M


4 BELGIUM

4.4.5 LawsuitIf the amicable collection has failed and the solvency of the debtor is satisfactory, we can, with approval of the creditor, initi-ate legal proceedings by bringing a lawsuit before the competent court against the debtor.

A summons is delivered by a bailiff to the debtor. By this docu-ment, the debtor is officially notified of the lawsuit. It contains the identity of the creditor, a summary of the raisons of the law-suit and a detailed statement of account and the amount to pay as well as the date of the introductory hearing and the hour and place of the hearing.

The legal procedure and the summons are prepared in-house by our legal team, which gives the necessary instructions to the bail-iff; who, after drafting the summons, delivers it to the debtor. After having received instructions from the legal team, the law-yer entrusted with the legal case, puts together the paper file for the court case and represents the creditor at the introductory hearing.

After examination of the summons, the file and all necessary documents, the court hears the lawyer and, if everything is in order, the court closes the case and has to render a judgement. If needed, the court can postpone the case in order to obtain an-swers from the creditor if questions or issues arise. Usually, the court renders its judgement a month after the hearing.

If the debtor is present (or represented by a lawyer) and does not dispute the claim, he usually requests the court to grant a payment plan. After having heard the creditor on this issue, the court will render a judgement.

If the debtor is present (or represented by a lawyer) and disputes the claim, the court establishes, at the request of the parties, a calendar to exchange written argumentations and a hearing date, on which both parties will plead their case. The timeframe of this calendar can vary from 3 to 6 months (or more); it can also be extended. After having heard the parties at the fixed hearing, the court will render its judgement at a given date. If no date is given, usually a judgement intervenes one month after the hearing.

4.4.6 Appeal In Belgium, you can bring an appeal before the competent court; which court depends on the amount of the claim and the quality of the debtor (merchant or not) as illustrated in the following table:

Amount of the debt

(interests and collection costs included)

Decision in First Degree Appeal Court

77 ≤ 1.250 EUR Justice of the Peace No appeal possible

77 > 1.250 EUR and ≤ 1.860 EUR Justice of the Peace Court of First Degree

77 > 1.860 EUR Non-commercial debt Court of First Degree Court of Appeal

77 > 1.860 EUR Commercial debt Commercial Court Court of Appeal

TAB

LE OF CO

NTEN

TSB

ELGIU

M


4 BELGIUM

4.4.7 Costs We have two types of costs in the frame of our legal actions:

Judicial costs

77 Summons and registration on the docket of the court: approximately 250 to 300 EUR

77 Indemnity of Procedure: this indemnity is granted by the court to the party obtaining what he asked for. The court determines the exact sum. This indemnity is charged back to the debtor, except if the court decides otherwise.

77 Costs and fees of legal representation. These costs are fixed depending on the importance of the case, the complexity of it, the duration and the tasks performed by the lawyer. These costs are not charged back to the debtor.

77 If a party uses a document that is not in the language of the legal proceedings, the other party and/or the court can ask the translation of this document. These translation costs are not charged back to the debtor.

77 In addition to these costs, any costs for witnesses and/or experts might also arise.

Enforcement costs

77 Costs of enforcement of a judgment by a bailiff are always charged back to the debtor. The amount of these costs varies, according to the number of enforcement actions the bailiff has to undertake. The enforcement costs will also be very high if enforcement on debtor’s real estate is decided.

77 Total costs of the enforcement process are difficult to estimate beforehand and to calculate. This estimation will be provided on a case-by-case basis, if enforcement actions should be deemed necessary.

77 If a non-Belgian judgement has to be enforced in Belgium, a special exequatur procedure has to be initiated before the competent court in order to obtain permission to enforce this foreign judgement in Belgium. Once obtained, this decision has to be notified to the debtor. If the debtor does not appeal, the permission is final and the foreign judgement can be enforced in Belgium.

4.4.8 Expected TimeframeThe time frame to get a judgement (enforcement not included) is on average four months. If there is a dispute and/or appeal, it can take up to one to several years to get a judgement.

4.4.9 Interests and Costs in the Legal PhaseIf a legal action is started, the applied interest rate is the rate given on the client’s terms and conditions. However, the court can reduce or cancel the interest laid out by the contract (e.g. lack of proof of acceptance by the debtor of the creditor’s terms and conditions of sale). The court may also decide to apply an-other type of interest to the debtor (the normal legal interest rate or the rate according to the statute of 02.08.2002 regarding late payment (being based on the European Directive 2000/35/CEE). The rate of the legal interest is fixed every year and com-municated in the Official Belgian Journal in the beginning of the year. The interest rate of the statute of 02.08.2002 is fixed and communicated every six months. Each court has its own practice on the accepted interest rate. On a case-by-case basis, we exam-ine which rate will be applied (taking into account the practice of the court).

The creditor can also claim collection costs (in Belgium known as “penalty clause”). Usually, the penalty clause is laid out in the contract between parties or in the creditor’s terms and conditions of sale. If this clause is questioned by the court and/or by the debtor, the creditor must establish the debtor knew this clause and agreed to it. If the court considers this not to be proven, the court can cancel this clause. Even if the acceptance of the clause is proven, the court can always reduce the percentage of the pen-alty clause. Each court has its own practice. On a case-by-case basis, we examine if a penalty clause will be applied and at which rate (taking into account the practice of the court).

4.5 Enforcement

4.5.1 Enforcement in DebtThe enforcement phase starts as soon as the debtor ignores the judgement decided by the court. The judgment is considered as final if the debtor does not lodge any appeal within 30 days from the date of notification of the judgement. In Belgium we use our own bailiff network; each bailiff is responsible for their own dis-trict and cannot enforce the judgement outside their district. It is the bailiff’s mission to notify the judgement and to handle the enforcement phase.

Our bailiffs have 3 options to enforce a title:

77 Enforcement in movable goods

77 Enforcement in immovable goods (real estate)

77 Seizures in hand of third parties if possible

TAB

LE O

F CO

NTE

NTS

BEL

GIU

M


4 BELGIUM

4.5.2 Enforcement in Movable GoodsThis is the standard procedure: the bailiff visits the debtor to seize debtor’s movable goods he can liquidate in favour of the creditor. The bailiff cannot seize movable goods necessary for the debtor’s basic daily needs. When the goods are seized, the bailiff fixes a date of sale. If the debtor did not pay before this date or an agreed payment plan is not respected, the bailiff takes the seized goods away to the auction room and sells them in an auc-tion on the date of sale. Frequently in Belgium, debtors make partial payments or offer a payment plan in order to avoid the sale. During the enforcement phase, the seizure is made once, but several consecutive dates of sale can be fixed on this basis to put pressure on the debtor if they do not comply with the agreed payment plan.

4.5.3 Enforcement in Immovable GoodsIf the debtor owns real estate and if the movable enforcement is not successful, we may seize debtor’s real estate and (try to) sell it. This process is very expensive and is not used very often. A debtor may be the owner of a property and have other preferen-tial creditors (who take the priority in case of payment coming in) and mortgages linked to those properties. It can take time to receive the required information from the Registration Office needed to prepare the property for sale.

4.5.4 Expected TimeframeOrdinary enforcement procedures (based on movable goods) generally take around 12 months. The timeframe for enforce-ment on real estate depend very much on the single course of the case, the court and possible buyers.


4.6.1 General

In Belgium we have 3 main types of insolvencies:

77 Bankruptcy

77 Liquidations

77 Temporary compositions: Law on Continuity of companies.

The insolvencies are validated by the court and the goal of these procedures is either to face a non-payment situation or to allow and facilitate the continuity of some companies. With the start of the proceeding, all individual enforcements are suspended.

4.6.2 ProceedingsBankruptcy

In Belgium only a debtor with the quality of merchant can be de-clared bankrupt. A trustee is appointed by the Commercial Court in the district where the debtor has their place of residence or registered address (in case of a company). The claim has to be lodged to the clerk of the Commercial Court within one year from the date of bankruptcy.

There are 3 types of declaration:

77 Unsecured creditor

77 Preferential creditor

77 With retention of Title: if we want to take some goods back

After verification by the trustee, the claim is accepted or not in the bankruptcy. The Commercial Court will decide in the case of any dispute. As soon as the trustee has clarified the debtor’s assets versus debts, he will be able to confirm to the creditor whether a dividend can be expected and deliver the document advising of the recoverability of the debt or not.

In case of a bankruptcy, it is very rare to obtain a dividend for unsecured debts in Belgium.

Liquidation

Liquidation is also considered as an insolvency procedure when sought by the debtor wishing to stop their commercial activi-ties. The main difference between liquidation and bankruptcy is that the liquidation is always asked for by the debtor. Another creditor may not request that a debtor goes into liquidation. A liquidator is appointed by the Commercial Court. The claim has to be lodged to the liquidator within the delay period noted by the court, which may vary from case to case.

After verification by the liquidator, the claim is accepted or not. The Commercial Court will decide in case of a dispute. As soon as the liquidator has clarified the debtor’s assets versus debts, he will be able to confirm to the creditor if a dividend can be expected or not.

In Belgium, it is very rare to obtain a dividend for unsecured debts.

There are 2 types of declaration:

77 Unsecured creditor

77 Preferential creditor

The Retention of Title can’t be referred to by creditors in case of liquidation.

TAB

LE OF CO

NTEN

TSB

ELGIU

M


4 BELGIUM

Temporary Composition

The former judicial composition has been replaced by the judicial reorganization based on the statute of 31.01.2009 on the conti-nuity of the companies.

In Belgium there are three types of reorganization:

77 amicable agreement (section 43),

77 collective agreement (sections 44 to 58)

77 transfer under the Court’s authority (sections 59 to 70).

77 most common and used type is the collective agreement.

In order to obtain a judicial reorganization, the debtor has to submit a request to the Court. If the reorganization procedure is opened, the duration of the “moratorium” will be usually 3 months with possible extension of between 6 and 12 additional months (section 38) in some specific cases.

At the end of this moratorium, in case of a collective agreement, the debtor is supposed to propose a payment plan to all his credi-tors. The plan has to be approved by the majority of creditors representing at least half of all sums due in principal. The debtor has to propose the reimbursement of at least 15% of the principal amount to each creditor. The maximum timeframe of the plan is 5 years. If the court validates the plan (it cannot change the con-tent of the Plan, but it can only verify if the formal conditions are met) this plan is opposable to all the creditors.

If the debtor does not follow the plan or if the creditor can prove debtor will not be able to respect the plan, any creditor can initi-ate legal proceedings to cancel the plan.

As for a judicial reorganization through transfer under the Court’s authority, it must be requested by the debtor or the Chief Pros-ecutor upon summons or by every person that holds an interest.


In order to lodge the claim the following documents are required:




77 Copies of the client’s sales terms and conditions

4.6.4 Expected Timeframe and OutcomeBankruptcies and liquidations can take several years, depend-ing on the complexity of the debtor’s company and situation. The procedure will close as soon as we receive news from the trustee or liquidator regarding the acceptance of the claim and our chances of receiving a dividend. For 95% of insolvencies in Belgium, we never recover any dividend after bankruptcies and liquidations.

As for the judicial reorganization (collective agreement), debtors propose mostly the bare legal minimum and nothing more. It is very rare to recover even this minimum amount. We observe also that a lot of debtors never execute the plan or when they do, the payments are very irregular. The reimbursement efforts of a lot of debtors do not last very long (they are in a delicate financial position) and, after a while, they file for bankruptcy.

4.6.5 Rescission in Case of BankruptcyPrior to 1997, a judgement declaring bankruptcy of a debtor, would automatically fix the date of cessation of payments by the bankrupt party, to a date 6 months prior to the date of the judgement declaring the bankruptcy. In order to safeguard the interests of creditors, the period between the cessation of pay-ments and the declaration of bankruptcy is deemed a ‘hardening period’ (“période suspecte”). Certain acts performed during this period that could be detrimental to the rights of the creditors are deemed null and void.

After 07.07.1997 the statute changed and the “hardening period” is no longer fixed automatically but only exists in special circum-stances. If the trustee in charge of bankruptcy finds or suspects that payments made in the hardening period by the bankrupt party to any third parties are detrimental to the rights of credi-tors, he can submit his matter to the court to have these pay-ments declared null or void. If so, the third party must refund any payments received to the trustee.

TAB

LE O

F CO

NTE

NTS

BEL

GIU

M


4 BELGIUM

4.7 Arbitration and MediationTo resolve a conflict between parties, creditors in Belgium have four different options: an amicable negotiation, a mediation, a judicial option (legal proceedings) and an arbitration.

4.7.1 MediationThe Belgian statute of 21.02.2005 provides a general minimal framework of rules and guaranties for all types or forms of medi-ation. The mediator is a neutral, independent and impartial third party that tries to help all parties find a definite solution to the conflict.

There are three types of mediation:

77 Judicial: the judge appoints a mediator (who has to be officially recognized by the Federal Commission of mediation). If an agreement is reached, the judge will recognize it. Afterwards, it can be executed voluntarily by the parties (or, if necessary, it can be enforced).

77 Voluntary: both parties (who are or are not involved in a legal proceedings) agree to try mediation following the rules and framework laid down in the Code of Civil Procedure. This means signing a protocol of mediation and using a recognised mediator. If an agreement is reached, both parties can ask the judge to make the agreement “official”.

77 “Free”: both parties agree to try mediation without following the rules and framework laid down in the Code of Civil Procedure. If this leads to an agreement, it will have the same value as a contract between parties.

4.7.2 ArbitrationArbitration is another way of resolving a conflict between parties. Both parties choose a private third party (arbitrator), who is not a member of the judiciary and who must offer the same guarantees as a judge (impartiality, neutrality and independence). Agreeing on a private arbitral tribunal has three advantages compared to a regular legal proceeding - it is generally speedier as the courts are less occupied, it’s more cost-efficient and the hearing and process are confidential. However, the costs and speed depend on the agreed procedure of arbitration between parties and the attitude of the parties during the arbitration. In general the cost can be very high.

Agreeing on arbitration also means the exclusion of the jurisdic-tion of the ordinary courts. Both parties voluntary accept to pass the conflict to the arbitrator and agree to abide by the decision. All parties concerned can provide the framework and rules of the arbitration process in the commercial agreement between them or in the terms and conditions of sale (if applicable between par-ties) or in any contractual document agreed to by both parties. Once the arbitrator has rendered the decision, and after it has become final, the enforcing party must ask the President of the Court of First Instance to grant exequatur of this decision. If the exequatur is granted and the other party does not appeal, the decision is enforceable. The same applies for the enforcement in Belgium of decisions of non-Belgian arbitrators.

TAB

LE OF CO

NTEN

TSB

ELGIU

M


4 BELGIUM

TAB

LE O

F CO

NTE

NTS

BEL

GIU

M


5.1 Amicable Phase

5.1.1 General Atradius Collections Brazil maintains a professional collection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the col-lection process in-house, contacting both verbally and in writing whilst adhering to federal and state laws.

5.1.2 Local Agent Through our local partner we currently offer a field service for visiting debtors at main cities in Brazil, such as: São Paulo, Join-ville, Porto Alegre, Rio De Janeiro, Curitiba, Recife, Belém, Cui-abá, Belo Horizonte and Goiânia. If a debtor is located outside cities listed above we might still be willing to perform a site visit, however travel costs must be covered by costumer and we will always try to keep travel costs as low as possible.

5.1.3 InterestsAtradius Collections Brazil always charges interest to debtors cal-culated from the legal interest rate applicable on due amounts in Brazil. These are currently 1% per month, plus tax not exceeding 2% percent of the debt,which can also be applied once because of the late payment. If a creditor has to pay higher interest to their bank we can apply this rate after we have this confirmed. From a cultural point of view Brazilian debtors are used to pay-ing interest.

5.1.4 Debt Collection CostsIn Brazil, debt collection costs at the amicable process can’t be charged, since it is not allowed by local regulations, however at the legal collection it is possible to charge them, amounts can differ depending on the city and are partially opt to the Judge.

5 Brazil

GDP (2014 EST.)


-1.2 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft, motor vehicles and parts, other machinery and equipment




68.36 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSB

RA

ZIL


5 BRAZIL


5.2.1 GeneralCivil law always takes precedence over common law practices. Although most Brazilian law is codified, non-codified statutes represent an important part of the system. Each state and mu-nicipality has its own judicial system where Magistrates deal with commercial and other civil cases in first instance. Decisions from state and municipal courts may be appealed through a federal court.


The mandatory original documents required to start a legal action in Brazil are:

77 Contract

77 Invoices

77 A clear statement of account indicating payments and credit notes which have been booked regarding the outstanding invoices

77 Purchase Orders

77 Proof of delivery

77 Notarized and Apostil Power of Attorney

If any documents are not written in Portuguese, a proper and certified translation of all documents will be required.

5.2.3 Legal Dunning Procedure (“Protesto”)This procedure is only applicable for monetary debts where the debtor can be traced. The responsible courts are the Justice of the Peace and Magistrates. In order to obtain an enforceable judge-ment by the legal dunning procedure a court order must be ob-tained and served to the debtor within the time frames stipulated in the civil process law. The debtor can appeal in both stages, which would then transfer the dunning procedure into a regular lawsuit procedure.

5.2.4 LawsuitThe regular lawsuit procedure is either initiated directly after amicable collection has failed or the debtor has disputed the ac-tion. There are three different proceedings that deal with unpaid debts according to Brazilian law. The proper action depends on all supporting documents being available.

5.2.5 CostsCosts of the civil law procedure (lawyer’s fees) are generally charged to the losing party by the judge, who also determines the amount of attorney’s fees to be awarded to the winning parties (from 10% to 20% of the claim). The court cost varies depending on the State and Municipality and are generally calculated from 1% to 2% of the claimed amount. Costs for witnesses and/or ex-perts might also arise so costs estimation will be provided on a case-by-case basis should legal actions become necessary.

5.2.6 Expected TimeframeThe average duration of a legal process depends on the complex-ity of the case, as well as the availability of the judge and the lawyers on all sides, but can last anywhere from several months up to a few years in execution proceedings.

5.2.7 Interests and Costs in the Legal PhaseOut of court interests and costs can be claimed as part of the outstanding monies due during the legal procedure. A legal in-terest rate of 1% per month is applicable on due amounts and there is no limit by law on how much to charge on legal costs. The judge will fix an amount of between 1% and 20% depending on the circumstances of the procedure. In the case of a legal set-tlement both parties bear the costs of the proceedings dependant on whether they win or lose the action.

TAB

LE O

F CO

NTE

NTS

BR

AZ

IL


5 BRAZIL


5.3.1 GeneralThe aim of the insolvency proceeding is to pay out all credi-tors the same percentage of the debt by liquidating the assets of a debtor’s company or collecting the enforceable incomes of a debtor who is declared bankrupt.

Generally there are 3 types of Insolvency proceedings:

77 77 Preventive reorganization

77 77 Suspensive reorganization

77 77 Bankruptcy

5.3.2 ProceedingsOnce the debtor or a creditor has filed for insolvency of the debtor, a preliminary liquidator is appointed to check if sufficient assets are available to cover the costs of the proceedings (court costs and costs of the liquidator). If these costs are deemed to be covered, the insolvency proceedings start and a preliminary liquidator will be appointed. If this procedure isn’t followed, the court will reject the declaration of bankruptcy due to insufficient assets. Creditors can then lodge their claim and take back any goods delivered under retention of title.

For goods in stock, the liquidator can choose whether to pay the original price to the creditor or to return the goods. After the pro-ceeding starts, a claim-lodge is possible within a given deadline. The liquidator can either accept the lodged debt or dispute it. If the claim is disputed the creditor may only file a claim in court to prove the justification of his claim if any further documentation produced fails to convince them into confirming the debt. The debtor’s company shall pay any priority creditors first, usually within 2 years from the plan’s approval.


In order to lodge the claim, the following documents are required:

77 Original notarized and apostil power of attorney

77 Invoices

77 Contracts or general conditions of sales, should there be any

77 Purchase orders, confirmations and delivery notes


5.3.4 Expected Timeframe and OutcomeThe deadline to lodge claims is between 1 to 3 months related to the specific Insolvency proceedings. The whole duration of an insolvency procedure is between 7 to 10 years.

TAB

LE OF CO

NTEN

TSB

RA

ZIL


5 BRAZIL

TAB

LE O

F CO

NTE

NTS

BR

AZ

IL


6.1 Amicable Phase

6.1.1 General Atradius Collections and local agents have a professional ap-proach to each case trying to establish relationship of confidence with debtors and to retain relationships between client and debt-or whenever possible. Scope of actions include (but is not lim-ited to) calls, sending reminder letters and attempts for realizing personal contact with the responsible person within the debtor company.

6.1.2 Local Agent The local agent is located in Sofia. At the present time we cannot offer a field service for visiting debtors across the whole country, but we can do so in high value cases. The agent can visit ad-dresses of debtors in Sofia, if phone contact is not possible to clarify the situation.

6.1.3 InterestsIn Bulgaria the legal interest to debtors can be calculated from the base rate set by the Bulgarian National Bank as at 1st of Jan-uary (for the first half of the year) and 1st of July (for the second half of the year) plus 10 % on a yearly basis. It is possible to include interest, which will be calculated differently, if this was agreed in the Contract between parties. Usually our clients, when submitting a debt collection case, also include interest calculated by them.

We include this in the debt amount in our reminder, but in the majority of the cases debtors do not pay this interest. From a cultural point of view, Bulgarian debtors are not used to paying late payment interests, though often the actual amount of the interest payment is considered a matter of negotiation between debtors and collectors.

6.1.4 Debt Collection CostsIn Bulgaria there is no legal ground to charge debt collection costs to debtors. In case the creditor has a special contractual agree-ment, such costs can be taken into account as long as the debtor actually agreed to the terms of Contract. From a cultural point of view, Bulgarian debtors are not used to paying debt collection costs.

6 Bulgaria

GDP (2014 EST.)


4.3 %INDUSTRIES

Leading industries are electricity, gas, water; food, beverages, tobacco; machinery and equipment, base metals, chemical products, coke, refined petroleum and nuclear fuel




52.83 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSB

ULG

AR

IA


6 BULGARIA


6.2.1 GeneralEntering into a legal procedure is possible without prior warning to the debtor. When it concerns commercial claims, the Statute of Limitation in Bulgaria is five years, calculated from the next day after due date of the invoice. The creditor with the claims concerning late payment has two options to initiate a legal pro-cedure against the debtor – via an ordinary court procedure or through a simplified legal procedure by submitting an application (proposal) for enforcement by the court.


List of documents, we require from our customers to start a court procedure:

77 Power of Attorney, verified by Notary and with APOSTILE

77 Extract from the trade registry of the company of creditor with the name of the responsible person, having the right to sign company documents. The same person should sign the POA. This document should also be verified by Notary and with APOSTILE.

77 Statement of account from the accounting department, with list of invoices and payments showing the final debt amount. The document should be signed and stamped

77 Copies of invoices, verified with signature and stamp

77 Copies of CMRs, verified with signature and stamp

77 Copies of the Swift bank documents with partial payments (if any), verified with signature and stamp.

6.2.3 Legal Dunning ProcedureThe simplified legal procedure can be an option for small claims, up to 12.500 EUR. The proposal for enforcement can be submit-ted based only on a statement of account or open invoices, di-rectly by creditor or via Attorney in law. After receiving the pro-posal for enforcement, the court issues a decision, which is sent to the debtor. If the debtor does not object to the enforcement decision, within two weeks after document being delivered, the court’s decision will become final. Courts can issue a Writ of en-forcement and the procedure continues with a Receiver (Bailiff). The actions of the Bailiff can be connected with additional costs. The most common enforcement measure is the blocking of debt-or bank accounts and transfer the balance by the debtor’s bank. If there is no possibility of collecting on the debtor’s bank accounts, other enforcement measures can be proposed, such as the sale of the debtor’s property, etc. The debtor can appeal in both stages of the simplified procedure. Such an appeal will transfer the dun-ning procedure into a regular lawsuit procedure.

6.2.4 LawsuitThe regular lawsuit procedure is either initiated directly when amicable collection fails due to a dispute by the debtor or follows directly to the legal dunning procedure after the debtor’s appeal in the simplified procedure. After the creditor settles the court tax in time and presents a lawsuit, supported with the documen-tation about the case, the court will set a date for examination of the case. All documents have to be legally translated into Bul-garian. When the claim is served upon the defendant, the legal proceeding are fully instituted. The defendant has to send his answer, supported with proof within one month, otherwise the court will issue a default judgment. When the court receives an-swers to the complaint from the defendant, it sets a date for court hearing. At the court hearing both parties present their proof and statements. If necessary, the judge can demand hearing of a wit-ness or a court expert (expertise will need to be paid addition-ally). If the court decides in the creditor’s favor and the debtor does not pay, the creditor can start an enforcement procedure on the ground of the final judgement.

6.2.5 CostsAll court fees have to be paid in advance and depend on the amount of the claim. In Bulgaria there is a fixed percentage of the court fee as follows:

77 For ordinary court procedure = 4 % on amount of claim

77 For simplified court procedure = 2 % on the amount of claim

Lawyer’s fees are also paid in advance and should be according to the Official Minimum Lawyers’ Tariff and also depend on the amount of debt. Legal translation of documents is 20 EUR/page minimum (depending on the language). The final cost estimation will be provided on case level when legal actions should become necessary.

6.2.6 Expected TimeframeThe average duration of a legal dunning process is about

12 weeks, whereas a court procedure can take up to 12 months or longer depending on the complexity of the case as well as the availability of the judge and the lawyers on all sides.

6.2.7 Interests and Costs in the Legal PhaseOut of court interest and costs can be claimed as part of the out-standing during the legal procedure. Usually courts acknowledge additional claims, but the outcome is highly dependable on the court and judge. In all cases the losing party has to bear the costs of the legal procedure.

TAB

LE O

F CO

NTE

NTS

BU

LGA

RIA


6 BULGARIA


6.3.1 GeneralThe aim of the insolvency proceeding is to pay all creditors with the same quota by liquidating the assets of a debtor company or collecting the enforceable income of an individual who is de-clared bankrupt.

6.3.2 ProceedingsAfter the debtor or a creditor files for insolvency of the debtor, a preliminary liquidator is appointed to check if sufficient assets are available to cover the costs of the proceedings (court costs and costs of the liquidator). If these costs are deemed to be cov-ered, the insolvency proceedings start and a liquidator will be appointed; usually this is the preliminary liquidator. Any other way, the court will reject the declaration of bankruptcy due to insufficient assets. The creditors can then lodge their claims and take back any goods delivered under retention of title. For goods on stock, the liquidator can choose whether to pay the original price to the creditor or to return the goods. After the proceed-ing starts, a claim-lodge is possible within a given deadline. The liquidator can either accept the lodged debt or dispute it. If the claim is disputed, the creditor may only file a claim in court to prove the justification of his claim, if further documentation etc. doesn’t convinced the liquidator into confirming the debt.







77 Copies of general conditions of sales, if there are any and


6.3.4 Expected Timeframe and OutcomeThe deadline to lodge claims is 1-3 months related to the com-plexity of the procedure and starts from the adjunction order. The whole duration of an insolvency procedure is at least 2-3 years.

TAB

LE OF CO

NTEN

TSB

ULG

AR

IA


6 BULGARIA

TAB

LE O

F CO

NTE

NTS

BU

LGA

RIA


7.1 Amicable Phase

7.1.1 General In the amicable phase we follow a collection process that is professional at all times with the objective to retain relationships between client and debtor whenever possible. Our staff of col-lection professionals carries out the first collection tier in-house. They pursue debtors verbally and in writing within the bounds of federal and state laws.

7.1.2 Local AgentAtradius Collections maintains direct contact with all debtors and clients whenever possible. However, if required, we have LDC contacts throughout Canada to assist in your collection needs. At the present time we cannot offer a field service for visiting debtors in Canada.

7.1.3 InterestsThe collection of interest is not permissible under Canadian law. However, if the Terms and Conditions of the contractual agree-ment between the client and debtor contain a clause that permits the collection of interest and costs, then it may be added to the overall debt. Canada’s Criminal Code makes it a crime to set an interest rate of over 60%.

7.1.4 Debt Collection CostsThe addition of collection costs is not permissible under Cana-dian law. However, if the Terms and Conditions of the contractual agreement between the client and debtor contain a clause that permits the collection of interest and costs, then it may be added to the overall debt. Canada’s Criminal Code makes it a crime to set an interest rate of over 60%.

7.1.5 PrescriptionThe general limitation of action for collection of past due debts varies from 2-6 years. Most of the country applies the 2 year limitation but some smaller provinces/territories, with limited exposure, does apply 6 years.

7 Canada

GDP (2014 EST.)


-3.1 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of transportation equipment, chemicals, processed and unprocessed minerals, food products, wood and paper products, fish products, petroleum and natural gas




40.50 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSC

AN

AD

A


7 CANADA


7.2.1 General Under the Canadian constitution, commercial law is generally within provincial jurisdiction. Certain exceptions exist such as interest, currency, bankruptcy and insolvency, which are gov-erned under federal law. Canada includes ten provinces and three territories that utilize the common law system that originated in Great Britain. Quebec is the only exception, they utilize a civil law system.

7.2.2 Required DocumentsIn order to start legal procedures, we are in need of certified copies of documents that support the claim, including any documents relevant to any dispute. These documents must be in Eng-lish and/or French and must bear authentication by Notary certification or affidavit by an expert if they have been translated from another language. Security costs may be required to cover any costs should the debtor be successful, if the plaintiff does not reside in specified provinces. If witnesses are necessary, phone or video conferencing services may be available. These are the basic requirements and may vary from province-to-province and territory-to territory.

7.2.3 Legal Dunning ProcedureTo assist our clients in reducing additional costs, the local attor-ney assigned to the debtor will attempt to collect monies prior to commencing any legal action. The attorney will use verbal and written communication within the bounds of federal and state laws, which may include negotiations on payment and/or set-tlement opportunities. The attorney will also complete due dili-gence to determine any future action. If the legal dunning phase fails the attorney will provide recommendations and/or sugges-tions for further actions.

7.2.4 LawsuitThe regular lawsuit procedure is either initiated directly after amicable collection has failed due to a dispute by the debtor, or follows directly after the legal dunning procedure if the debtor has appealed. Legal proceedings can take anywhere from a few months to a few years to complete. There are ten provinces and three territories, which have different legal proceedings and rules for carrying out the proceedings. In some provinces extensive pre-trial procedures, such as examinations for discovery are com-mon. These procedures provide opportunities to uncover dam-aging information about the debtor. Other provinces offer the ability to request settlement conferences at any stage of the legal proceedings.

7.2.5 CostsDue to the different provinces and territories throughout Canada, it is difficult to predict total costs. Legal costs generally depend on the amount of the outstanding principal debt and location of the debtor. Legal costs vary in each of the provinces and territo-ries from 450.00 CAD up to 6,000.00 CAD. Costs for witnesses or other experts might also arise. On average, a client may expect to pay 1,700.00 CAD to begin legal proceedings. Cost estima-tions will be provided on a case- by-case basis should legal ac-tion become necessary and actions will not commence without prior consent. Past history proves that legal action in Canada can become very costly for our clients.

7.2.6 Expected TimeframeThe average duration of a legal dunning process is between 8 and 12 weeks, whereas a court procedure can take 12 months or longer depending on the complexity of the case, and the avail-ability of the judge and lawyers on both sides.

7.2.7 Interests and Costs in the Legal PhaseAll or some portion of the costs is usually awarded to the suc-cessful party at the trial. Court fees, expert costs, witness fees and copying costs are recoverable in some provinces. Unfortu-nately, travel costs of the counsel to the place of trial are not generally recoverable, however, the necessary travel costs of witnesses, including parties may also be recoverable in specific provinces. Certain provinces also allow attorney’s fees and ad-ministrative charges to be claimed only if the contract makes ac-ceptable provision.

TAB

LE O

F CO

NTE

NTS

CA

NA

DA


7 CANADA


7.3.1 General The insolvency process is a legal proceeding that is dealt with under the provisions of the Bankruptcy and Insolvency Act. This Act is administered by the Office of the Superintendent of Bank-ruptcy at a federal level and only a Trustee licensed in bankrupt-cy by the Superintendent of Bankruptcy can handle the process of proposals and bankruptcies.

7.3.2 Proceedings

There are four main insolvency options:

77 Proposal – The proposal, formal or informal, is made to creditors who are owed money in an effort to settle the debt.

77 Bankruptcy – The assets of an individual or company are liquidated. Depending on the province, some assets are exempt from liquidation. Secured creditors are paid first followed by unsecured creditors, who may be paid with the remaining funds and if there is one, a dividend. In order to receive a dividend a proof of claim must be filed by the creditor within the timeline given by the Trustee.

77 Receivership – A secured creditor represented by the receiver takes control of the assets of the company. Once an audit is complete the company may operate under the receivership or the receiver can petition the company into bankruptcy.

77 Company Creditors’ Arrangement Act – A compromise or an arrangement is proposed between a debtor company and its unsecured creditors. Meetings of creditors, Trustees and shareholders may be ordered by the courts and the whole process can last for many years.


In order to lodge the claim on your behalf we need:



77 Copies of contracts

77 Copies of orders, confirmations and delivery notes



7.3.4 Expected Timeframe and OutcomeThe deadline to lodge claims varies from province to province. The whole duration of an insolvency procedure is between 1 to 3 years.

TAB

LE OF CO

NTEN

TSC

AN

AD

A


7 CANADA

TAB

LE O

F CO

NTE

NTS

CA

NA

DA


8 CHILE

8.1 Amicable Phase

8.1.1 General Atradius Collections Mexico follows a collection process that is professional at all times with the objective to retain relationships between client and debtor whenever possible. Our staff of col-lection professionals carries out the first collection tier in-house. They relentlessly pursue debtors verbally and in writing within the bounds of federal and state laws.

8.1.2 Local Agent We offer a strategic and competitive service including site visits to debtors in the area of Santiago, Chile. Local service is support-ed by a strategic partner who forms part of the Atradius Group.

In case the debtor is located out of Santiago City, we will gladly discuss if a site visit is needed, travel costs will be required and kept to the minimum.

8.1.3 Interests Atradius Collections always charges interest to debtors, the aver-age charge is from 7 to 8%; the base rate is set by The Superin-tendency of Banks and Financial Institutions (Superintendencia de Bancos e Instituciones Financieras, SBIF).

Despite the average charge set up by the SBIF parts can agree a different rate. In Chile since 1981 the law has set the maximum interest rate at 50% above the current or average interest rate (TIC). Hence, the maximum or Conventional Maximun Interest Rate (TMC) is 1.5 times the TIC.

From a cultural point of view, Chilean debtors are used to pay-ing late payment interest, though often the actual amount of the interest payment is considered a matter of negotiation between debtors and collectors.

8.1.4 Debt Collection Costs In Chile debt collection costs can be charged to debtors once 15 days of late payment has passed, costs can go from 9% to 3% depending on the total due amount. The percentage of collection costs for late payment are regulated by Law 19.496

From a cultural point of view, Chilean debtors are used to paying debt collection costs, though often the actual amount of these costs is considered a matter of negotiation.

8 Chile

GDP (2014 EST.)


-5.0 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of copper, lithium, other minerals, foodstuffs, fish processing, iron and steel, wood and wood products, transport equipment, cement, textiles




53.26 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSCO

UN

TRY

CH

ILE


8 CHILE


8.2.1 GeneralEntering into legal procedure is possible without prior warning to the debtor, however in civil procedures, before evidence is pro-duced, the judge is required to ask the parties whether there is a possibility of reaching an agreement, Usually it is just a formality since mediation is not strongly encouraged.

8.2.2 Required documents In order to start the legal collection process we are in need of originals of the contract, invoices and a clear statement of ac-count indicating payments and credit notes which have been booked regarding the outstanding invoices; for export debts,the original of bills of lading and apostil power of attorney are a must.

In case of an ordinary debt collection procedure copies of the complete contractual documentation (in addition to what has been listed at prior paragraph) should be available, such as or-ders, order confirmations, delivery notes, correspondence, etc. Basically every step of the relationship should be provable by documentation.

8.2.3 Legal Dunning Procedure This procedure is only applicable for money debts and only in case the debtor is traceable. Precautionary measures can be granted by the Court either before the trial begins or during the trial, when there are grave and qualify motives (art. 279 Civil Procedure Code) to believe that the defendant may be in serious trouble to fulfill his obligations if he is defeated.

If the precautionary measures request is filed before the begin-ning of the trial, the plaintiff has to give a surety or any other guarantee, to secure that the lawsuit will be filed within 10 days of this precautionary measure being granted. If the lawsuit is not filled, then the plaintiff is liable for all the damage this measure may cause and the fine the judge will impose for not filling the lawsuit. Courts in Chile usually only accept as guarantees bank deposits or mortgages on properties in a similar amount of the precautionary measure requested.

8.2.4 Lawsuit There are two debt collection court proceedings: accelerated debt collection and ordinary debt collection. An accelerated debt col-lection action is one supported by an expedient claim title. An expedient claim title is a document meeting specified formalities. In the absence of such title, an unsecured creditor must resort to an ordinary proceeding.

8.2.5 Costs All costs depend on the amount of the outstanding principal and are calculated regarding slices. There are different fees that can apply during a procedure, so there is not only a range regard-ing the amount outstanding but also a range regarding the pos-sible fees for each action. This makes it difficult to predict the total costs. In addition to this, costs for witnesses and/or experts might also arise.

For export debts it is important to mention that Courts in Chile do not admit documents written in a foreign language; therefore documents not written in Spanish should be filed with a certified translation.

Cost estimation will be provided case by case should legal actions become necessary.

8.2.6 Expected Timeframe The accelerated debt collection proceeding is faster than normal, taking one to three years, as compared to the ordinary debt col-lection process, which takes three to five years.

8.2.7 Interests and Costs in the Legal Phase Interests and Cost at the legal phase follows the same param-eters than the ones established for amicable collections and can be claimed as part of the outstanding debt during the legal pro-cedure.

The general rule states that the losing party is liable for lawyer’s fees and costs, but the ruling court may exempt it when it had plausible reason to litigate. Nevertheless, in practice, the courts determine an amount that the losing party must pay, which is just a fraction of actual legal fees and costs.

TAB

LE O

F CO

NTE

NTS

CH

ILE


8 CHILE


8.3.1 General The Bankruptcy Act allows the debtor and its creditors to come to a formal rescue agreement to avoid a potential bankruptcy or to halt an initiated bankruptcy. These agreements can provide for either a bankruptcy pre-emption process or a bankruptcy release process.

8.3.2 Proceedings As soon as bankruptcy is declared, individual debt collection actions and all pending legal actions are suspended. In excep-tional cases certain secured creditors may pursue individual debt collection procedures even after the bankruptcy declaration. In particular, for mortgage or pledge creditor’s individual debt col-lection actions may continue or be commenced under certain conditions in order to liquidate the asset in question and to ob-tain payment from the liquidation proceeds.

In General within a bankruptcy, the following sequence of events takes place:

77 The bankruptcy petition (voluntary or involuntary) is filed.

77 The court declares bankruptcy.

77 The automatic stay takes effect (individual collection actions are stopped).

77 Creditors of the bankruptcy are notified.

77 An interim trustee or receiver is appointed.

77 The debtor files schedules of assets and debts.

77 The creditors hold the first meeting and confirm or elect the permanent trustee or receiver.

77 Creditors file their claims for verification.

77 The trustee or receiver determines which property is subject to liquidation.

77 The trustee or receiver liquidates the assets included in the bankruptcy.

77 The trustee or receiver distributes the proceeds of the liquidation. The receiver must apply the funds available to pay the creditors in accordance with the applicable statutory priorities according to the five categories of claim specifically listed in the Civil Code.

77 The court closes the case after two years of approval of the trustee’s final account, provided that the debtor has acted in good faith.



77 The original power of attorney (properly apostil if granted out of Chile)

77 Original of invoices

77 Original of contracts or


77 Original of general conditions of sales, if there are any and


8.3.4 Expected Timeframe and Outcome The deadline to lodge claims goes from 1 to 2 months related to the complexity of the procedure and starts from the bankruptcy petition (voluntary or involuntary).

The average duration of liquidation is between 24 and 36 months. The whole duration of an insolvency procedure is between 3 and 6 years.

TAB

LE OF CO

NTEN

TSC

HILE


8 CHILE

TAB

LE O

F CO

NTE

NTS

CH

ILE


9.1 Amicable Phase

9.1.1 General China has had a vivid history around debt collections, which were prohibited by the Chinese government in the late 19th cen-tury. Today, the law is still in place. Therefore, debt collections officially doesn’t exist but companies do provide debt collections services, through specialized legal firms that are authorized to collect Chinese debts. Atradius Collections Hong Kong can pro-vide amicable collections services in China. Atradius Collections has offices in Hong Kong, which has the advantage of being ex-empt from Chinese mainland regulations but shares the same language, culture and time zone, and uses trusted Chinese part-ners. Choosing this route ensures a greater chance of success in collecting debt in China.

9.1.2 Local Agent In addition to collecting Chinese debts in Hong Kong, we also have a strong partnership network in China and we may offer a visiting service when necessary.

9.1.3 InterestsFrom a cultural point of view, Chinese debtors are not used to paying late payment interest charges, so during the first negotia-tions step, we usually don’t claim for this part. But when the case enters into litigation, we charge interest calculated from the loan rate set by the People’s Bank of China plus 30% to 50% (see The Reply of Supreme People’s Court on The Calculation Standard of Late Payment Penalty).

9.1.4 Debt Collection CostsFrom the point of view of the law, we do have the right to charge the costs arising from the collection of debt, but Chinese debtors will not expect to pay them if the debts are paid in the negotia-tion phase.

9 China

GDP (2014 EST.)


9.2 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of mining, iron, steel, aluminum, coal; machine building; textiles and apparel; petroleum; cement; chemicals; fertilizers; footwear, toys, and electronics; food processing; transportation equipment, including automobiles, rail cars and locomotives, ships, and aircraft; telecommunications equipment, commercial space launch vehicles, satellites




36.06 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSC

HIN

A


9 CHINA

9.1.5 PrescriptionThe general limitation of action regarding applications to a people’s court for protection of civil rights is two years, unless otherwise stipulated (see General Principles of The Civil Law of PRC Article 135). The limitation of action is one year for cases concerning the following: (1) claims for compensation for bodily injuries; (2) sales of substandard goods without proper notice to that effect; (3) delays in paying rent or refusal to pay rent; or (4) loss of or damage to property left in the care of another person.

The limitation period for claims against the carrier with regard to the carriage of goods by sea is one year, starting from the day on which the goods were delivered or should have been delivered by the carrier. The limitation period for claims against rail carriage is 180 days. There are no such stipulations regarding the invoice.

Interruption of the limitation: Any of the following cir-cumstances shall have the effect of interruption of statute of limitations:

77 A party directly serves a document of claim on the opposite party. The opposite party affixes their signature or seal on the document or it may be otherwise proved that the document reaches the opposite party which fails to affix the signature or seal on the document

77 A party makes a claim by correspondence or data message and the letter or data message reaches or should have reached the opposite party.

77 A party that is a financial institution deducts and collects the owed principal and interest out of the account of the opposite party.

77 The whereabouts of a party is unknown and the opposite party publishes an announcement of claim in a national medium or local influential medium near to the last known location of the party whose whereabouts is unknown.

These are only a few of the situations that may interrupt the limitation period, and there are many other stipulations that have the same effect detailed in The Provisions of the Supreme People’s Court on Several Issues concerning the Application of Statute of Limitations during the Trial of Civil Cases that come into force as of September 1, 2008.

9.1.6 Accepted and Most Common Payment MethodsThe most common payment methods are bank transfer and cheque payment.

9.1.7 Types of Companies

Limited liability company 77 Companies bear the liabilities for its debts with all its property.

77 Minimum capital of 30,000 RMB which can be paid in currency, in kind or intellectual property, land-use or other non-monetary properties;

77 The amount of the capital contributions in currency paid by all the shareholders shall be not less than 30% of the registered capital of the limited liability company.

77 The shareholders are responsible for the company to the extent of the capital contributions they have paid

Joint stock limited company 77 Companies bear the liabilities for its debts with all its property.

77 Minimum capital is usually 5,000,000 RMB.

77 The shareholders are responsible for the company to the extent of the shares they have subscribed to.

77 The company can be established by promotion or stock floatation.

TAB

LE O

F CO

NTE

NTS

CH

INA


9 CHINA

9.1.8 Sources of InformationIn China, lawyers can directly access financial data as well as other useful information on the debtors from the Industrial and Commercial Authorities. The financial data includes its balance sheets and income statements for every year. Other information includes the contact details of its shareholders or legal repre-sentative and their bank account etc. In most cases, we can find the information we need by ourselves, so a private investigator is not necessary.

9.2 Retention of TitleIn the Contract Law of PRC, it is usual for the seller to retain the ownership of the goods before the buyer has paid in full only when both parties have agreed to this in the contract. If there are no such stipulations, the ownership of the goods transfers to the buyer upon the delivery.

Contract Law of PR:

77 Article 133. The ownership over a targeted matter is transferred upon the delivery of the targeted matter, unless the law provides otherwise or the parties stipulate otherwise.

77 Article 134. The parties may stipulate in a purchase and sale contract that the seller retains the ownership over the targeted matter if the buyer fails to pay the price or to perform other obligations.

9.3 Safeguarding MeasuresIf a debtor is not able to pay off the debts according to the con-tract, we may ask the debtors to make a written commitment to pay in instalments, offer a guarantee or a debt repayment plan. Such a commitment is valid and effective no matter whether it is authenticated by a notary or not. Notarial procedure can re-enforce the authority and legitimacy of the commitment, but this is rarely practiced in China. When a guarantee, pledge or a mortgage is established, a written contract is necessary. When a mortgage is established on a) buildings and other objects fixed to land b) the right to use construction land or c) the right to contracted management of such land as barren land etc, the mortgage registration shall be examined, and the mortgage right shall be established as of the date of registration.


9.4.1 GeneralIn China, private law regulates the relations between people or companies. There is no need to give a warning prior to starting a lawsuit, and when a case is sent to the court, there may be a pre-court procedure, which can be skipped before normal pro-ceedings begin.

TAB

LE OF CO

NTEN

TSC

HIN

A


9 CHINA

9.4.2 Legal System In China, the courts are divided into the Supreme People’s Court, the High People’s Courts, the Intermediate People’s Courts and the Basic People’s Courts. Generally, the Basic People’s Courts have jurisdiction as courts of first instance over civil cases, and the In-termediate People’s Courts shall have jurisdiction as courts of first instance over civil cases that have major impacts on the area under

their jurisdiction. The High People’s Courts shall have jurisdiction as courts of first instance over civil cases that have major impact on the areas under their jurisdiction. The Supreme People’s Court has the right to give interpretation on questions concerning specific application of laws and decrees in judicial proceeding.


The following conditions must be met when a lawsuit is brought:

77 The plaintiff must be a citizen, legal person or any other organization that has a direct interest in the case.

77 There must be a definite defendant.

77 There must be specific claim or claims, facts, and cause or causes for the suit

77 The name, gender, age, ethnic status, occupation, work unit and home address of the parties to the case. If the parties are legal persons or any other organizations, their names, addresses and the names and posts of the legal representatives or the principal heads.

77 The evidence and its source, as well as the names and home addresses of the witnesses. Original documents do not need to be provided.

When a lawsuit is brought, enough copies of the statement as well as other evidence shall be provided depending on the number of defendants to the court.

9.4.4 Legal Dunning ProcedureWhen a creditor requests payment of a pecuniary debt or recovery of negotiable instalments from a debtor, they may, if the following requirements are met, apply to the Basic People’s Court that has jurisdiction for an order of payment:

77 No other debt disputes exist between the creditor and the debtor.

77 The order of payment can be served on the debtor.

The debtor shall, within 15 days after receipt of the order of pay-ment, clear off their debts or submit to the People’s Court their dissent in writing. If the debtor has neither dissented from nor complied with the order of payment within the period specified in the preceding paragraph, the creditor may apply to the Peo-ple’s Court for execution. The order of payment is effective only when the debtor has failed to submit a dissent in writing within 15 days. Once such a dissent is submitted, the order of payment shall be terminated and the creditor shall bring an action.

Supreme People’s Court 77 Supreme People’s Court

High People’s Courts 77 Of provinces

77 Of autonomous regions

77 Of municipalities directly under the Central Government

Intermediate People’s Courts 77 Established in prefectures of a province or autonomous region

77 Established in municipalities directly under the Central Government

77 Of municipalities directly under the jurisdiction of a province or autonomous region

77 Of autonomous prefectures

Basic People’s Courts 77 County people’s courts and municipal people’s courts

77 People’s courts of autonomous counties

77 People’s courts of municipal districts

77 People’s courts of municipal districts

TAB

LE O

F CO

NTE

NTS

CH

INA


9 CHINA

9.4.5 Lawsuit

A lawsuit can only be initiated by a creditor.

Generally, a civil lawsuit brought against a citizen shall be under the jurisdiction of the People’s Court at the area where the de-fendant lives. If the place of the defendant’s address is different from that of their usual residence, the lawsuit shall be under the jurisdiction of the People’s Court of the place of their habitual residence. A civil lawsuit brought against a legal person or any other organization shall be under the jurisdiction of the people’s court of the place where the defendant has their domicile. A lawsuit brought on a contract dispute shall be under the jurisdiction of the People’s Court of the place where the defendant has their domicile or where the contract is performed. Not all stipulations on Jurisdiction are listed (see Civil Procedure Law of PRC).

9.4.6 AppealIf a party disagrees with a judgment made by a Local People’s Court of first instance, they have the right to lodge an appeal with the immediate Superior People’s Court within 15 days from the date on which the written judgment was served. When filing an appeal, a petition for the purpose shall be submitted. The con-tent of the appeal petition shall include the names of the parties, the names of the legal persons and their legal representatives or names of other organizations and their principal heads; the name of the people’s court where the case was originally tried; file number of the case and the cause of action; and the claims of the appeal and the reasons.

9.4.7 CostsAny party filing a civil lawsuit shall pay court costs according to the rules. In most cases, the litigation fees are borne by the losing party.

9.4.8 Expected TimeframeWhen a case is tried according to summary procedure, the Peo- ple’s Court shall conclude the trial within three months from the date of entering it on its trial docket. When a case is handled according to ordinary procedure, the People’s Court shall con-clude the case within six months from the date of accepting it. Where an extension of the period is necessary under special circumstances, a six-month extension may be allowed subject to the approval of the president of the court. Further extension, if needed, shall be reported to the People’s Court at a higher level for approval. The case on appeal shall be concluded within three months after docketing the case by the People’s Court.

9.4.9 Interests and Costs in the Legal PhaseInterests and costs in the legal phase can be claimed as well with the same rate above-mentioned in 9.1.3.

9.5 Enforcement

9.5.1 Enforcement in DebtThe parties concerned must comply with legally effective judgments or written orders in civil cases. If a party refuses to do so, the other party may apply to the People’s Court for execution, or the judge may refer the matter to the Execution Officer for enforcement. All fees arising from the enforcement will be borne by the debtor and the applicant doesn’t have to repay such fees.

9.5.2 Enforcement in Movable GoodsIf the debtor subjected to execution fails to fulfill the obligations according to the execution notice and the obligations specified in the legal document, the People’s Court shall be empowered to make inquiries with banks, credit cooperatives or other units that deal with savings into the accounts of the person subjected to execution and shall be empowered to freeze or transfer their de-posits. If the debtor subjected to execution fails to fulfill specified in the legal document, the People’s Court shall be empowered to seal-up, distrain, freeze, sell by public auction or sell off part of the property of the person subjected to execution for the fulfill-ment of his obligations.

9.5.3 Enforcement in Immovable GoodsAs same as the second paragraph in 9.5.2.

9.5.4 Expected TimeframeThe time frame for enforcements is usually less than six months, but it can be extended when necessary after it has been approved by the president of the court.

TAB

LE OF CO

NTEN

TSC

HIN

A


9 CHINA


9.6.1 General FactsWith the start of the preliminary proceeding, all individual en-forcements are suspended. Only when the insolvency proceeding will not be started, will individual enforcements be continued. The purpose of an insolvency proceeding is to pay out all credi-tors by liquidating the assets of a debtor company.

9.6.2 ProceedingsWhen a debtor is unable to pay off the debts due, its creditors may file an application for reorganization or liquidation by bank-ruptcy of the debtors with the People’s Court. Where the creditor files an application for bankruptcy, the People’s Court shall give a notice thereof to the debtor within 5 days of the receipt of the application. In case the debtor objects to such application, this notice shall be submitted to the People’s Court within 7 days of the receipt of the notice from the People’s Court. The People’s Court shall decide whether or not to accept the application with-in 10 days of the expiration of the objection term. The People’s Court shall designate an administrator when ruling on accepting an application for bankruptcy. The People’s Court shall inform the creditors who have definite addresses of the ruling within 25 days after making the ruling if it accepts the application for bankruptcy, and makes a public announcement. After the Peo-ple’s Court accepts the application for bankruptcy, the debtor cannot pay off debts to a specific creditor. The civil litigation or arbitration concerning the debtor that has started but has not yet ended shall be suspended after the People’s Court accepts the application for bankruptcy, and the litigation or arbitration shall proceed after the administrator takes over the debtor’s property. The civil litigation concerning the debtor after the People’s Court accepts the application for bankruptcy may only be instituted with the People’s Court that has accepted the application for bankruptcy.

9.6.3 Required DocumentsThe applicant shall submit an application form for bankruptcy and the relevant evidence to the People’s Court when filing an application for bankruptcy with the People’s Court.

The application form for bankruptcy shall contain:

77 The basic situations of the applicant and the party against whom an application is filed

77 The purpose of the application

77 The reasons and grounds of the application

77 Other matters that the People’s Court thinks should be contained.

Where an application is filed by the debtor, the debtor shall submit a description on its financial conditions, a detailed list of debts and credits, all relevant financial reports, and the settle-ment proposals and payment of the salaries and social security expenses of the employees of the bankrupt enterprise to the People’s Court.

9.6.4 Expected Timeframe and OutcomeUpon acceptance by the People’s Court of the application for bankruptcy, the administrator is entitled to discharge or continue the performance of the contracts that have been established be-fore the acceptance of the application for bankruptcy. When the administrator fails to give notice to the counterparts concerned within 2 months of the acceptance of the application for bankruptcy or reply to the counterparts concerned within 30 days of their request for notification, it shall be deemed that the relevant contracts shall be discharged. The People’s Court shall confirm the time limits of the creditors to declare credits after accepting the application for bankruptcy. The time limits of declaring the credit shall not be less than 30 days or exceed 3 months as of the date of the public announcement of the application for bank-ruptcy by the People’s Court. The debtor or the administrator shall, within 6 months of the date of the ruling by the People’s Court on the reorganization of the debtor, submit the draft reor-ganization plan to the People’s Court and the creditors’ meeting simultaneously. At the request by the debtor or the administrator with justified reasons upon the expiration of the term above, the People’s Court may rule on extension of such term for another three months. The whole duration of an insolvency procedure usually takes between 2 and 4 years or more.

TAB

LE O

F CO

NTE

NTS

CH

INA


9 CHINA

9.6.5 Limited CompaniesThe administrator shall, within 10 days of the conclusion of the bankruptcy proceedings, handle the procedures for the revoca-tion of registration of the bankrupt person at the registration authority by producing the ruling of the People’s Court on the conclusion of the bankruptcy proceedings. The Directors, Super-visors or Officers of the bankrupt enterprise that have violated their duties of loyalty and due diligence, and contributed to the bankruptcy of the enterprise shall bear the relevant civil liabili-ties. The person involved in the above-mentioned circumstances shall not act as the Director, Supervisor or Officer of any en-terprise within three years of the date of the conclusion of the bankruptcy proceedings.

9.6.6 Non-Limited Companies/IndividualsNon-Limited companies or individual debtors can’t declare insol-vency. They should bear the debts until it is paid off or released by the creditor.

9.6.7 Pool of CreditorsThere is no such term in Chinese law.

9.6.8 RescissionWhere the debtors and creditors have objection against the credit contained in the Credit Form, lawsuits may be instituted with the People’s Court that has accepted the application for bankruptcy. The salaries, medical and disability subsidies and pension ex-penses due to employees by the debtor, and the basic pension in-surance, basic medical insurance expenses owed to the individual accounts of employees, and compensations that shall be paid to the employees as prescribed by laws and administrative laws and regulations are not required to be declared, which shall be listed and posted to the public by the administrator after investigation. In case of objection to the records on the list, the employees may require the administrator to make corrections, and if no correc-tions have been made by the administrator, the employees may initiate lawsuits with the People’s Court.

9.7 Arbitration and MediationContracts related to foreign investments in China usually stipu-late that any disputes arising between the parties should be set-tled by friendly negotiation, followed by arbitration in the case of failure of agreement. Resolution of disputes by arbitration is also recognised in foreign related laws in China. Foreign related arbitrations in the People’s Republic of China are now mainly administered by the China International Economic and Trade Ar-bitration Commission (CIETAC).

According to the Arbitration Law of China, the arbitration agree-ment (which is usually set out as one of the clauses in the con-tract) must be in writing and contain the following particulars:

77 An indication of the intention to apply for arbitration.

77 The arbitral matters.

77 The selected arbitration commission.

Mediation is not usually used to resolve disputes in China.

TAB

LE OF CO

NTEN

TSC

HIN

A


9 CHINA

TAB

LE O

F CO

NTE

NTS

CH

INA


10.1 Amicable Phase

10.1.1 General Atradius Collections’ Czech Republic operation maintains a pro-fessional collection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the collection process in-house, contacting both ver-bally and in writing whilst adhering to federal and state laws. Where there is a case of dispute, we aim to reach an amicable solution between creditor and debtor. We do this by analysing all contractual documents (e.g. signed contracts, orders, confirma-tions, invoices and delivery notes as well as all standard terms that have been agreed upon). All investigations are completed with the assistance and agreement of our legal team.

10.1.2 Local Agent Atradius Collections Czech offers direct collection activity man-aged by a selected network of local agents who visit the debtors all over the country. Due to our experience this solution is par-ticularly successful for specific debtor’s categories like individual sole traders, shops and small companies. The local agents´ net-work can also help investigate and find an untraceable debtor.

10.1.3 Interests Interest rates should be specified in the contract between sup-plier and buyer. If it is not, the buyer can charge an interest rate on late payment based on the law. The interest rate is the same for all business relations and is prescribed by Civil law. It is cal-culated as the semi-annual amount of the repo-rate set by the Czech National Bank, plus seven percentage points (when delay started before 1st of July 2013) or plus eight percentage points (when delay started after 1st of July 2013). Atradius Collections Czech charges interest to debtors, both in the amicable and in ju-dicial phase. In a judicial proceeding, the interest rate is based on the law, if it is not contracted by parties, and courts will always award the interest that is required on the condition that the basic claim is accepted. From a cultural point of view, it can be difficult to get the total amount of interest from the debtor. Often, the interest is considered as matter of negotiation between debtors and collectors.

10 Czech Republic

GDP (2014 EST.)


0.1 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of motor vehicles, metallurgy, machinery and equipment, glass, armaments




66.40 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSC

ZEC

H R

EPU

BLIC


10 CZECH REPUBLIC

10.1.4 Debt Collection Costs When debtor´s delayed started after 1st of July 2013 the creditor can also demand a lump sum of collection costs at least in amount of 1.200,- CZK (approximately 40,- EUR).

10.1.5 Prescription

The general prescription period in Czech Republic is:

77 For contracts made before 31st of December 2013 after 4 years of maturity set by the original invoice for business-to-business claims, and after 3 years in business-to-consumer claims;

77 For contracts made after 1st of January 2014 after 3 years of maturity set by the original invoice regardless of character of claims.

The prescription period can be interrupted if a creditor starts le-gal procedure or proves written debt acknowledgement.


10.1.7 Sources of Information In the Czech Republic we contact credit reporting agencies to as-sess the financial situation of debtors. We combine this with our own phone contacts to get an accurate impression of a debtor’s financial situation and advise on the next step. All companies have to be registered in Trade Register with information about seat of company, owners, chairman of the company and basic capital. All information is available free of charge on the Internet and all companies are obliged to publish their financials in the Trade Register but unfortunately most of them don’t do it. Sole traders are registered in the Sole Trader Register, which is also available free of charge on the Internet. We often use the ser-vices of our agent network to gain more information if we can’t contact the debtor and we need to investigate their company. The agents provide us with photos, information about the activity in the debtor‘s company and new contacts.

10.2 Retention of Title Retention of Title must be agreed upon explicitly prior to delivery and must be in the form of a public charter made by a notary or at least in written form with officially authenticated signatures.

10.3 Safeguarding Measures In case a debtor is not able to satisfy your claim in a speedy manner, we can request the debtor to secure the debt in favour of our client. This can be done amicably and cost effectively by providing an acknowledgement of debt in writing authenticated by a notary and immediately enforceable in case the agreed pay-ment terms are not fulfilled. Corresponding costs are carried by the debtor. The debtor may also provide other means of securing receivables of the creditors for example by lien, surety or by as-signment of debts.

Sole trader 77 Unlimited liability of owner with business and private funds

77 In order to pursue such debtors, we need of full first and surname of the family, plus business registration number

Public company (verejna obchodni spolecnost, v.o.s.)

77 No minimum capital

77 Unlimited liability of company and partners

Limited partnership (komanditni spolecnost, k.s.)

77 Value of capital set according to partnership contract

77 At least one partner is liable unlimited with business and private funds

77 Limited partners are only liable with company capital

Limited company (spolenost s rucenim omezenym, s.r.o.)

77 Minimum capital 1 CZK (approximately 0,40 EUR)

77 Liability is limited up to amount of company capital

Joint-stock company (akciova spolecnost, a.s.)

77 Minimum capital 2,000,000 CZK or 80,000 EUR

77 Liability is limited to company capital

TAB

LE O

F CO

NTE

NTS

CZ

ECH

REP

UB

LIC


10 CZECH REPUBLIC


10.4.1 General Reminders for payment are usually sent to the debtor before court proceedings start but are not necessary according to law. However, without sending the reminder the creditor is not enti-tled to obtain legal costs from the debtor. Reminders also increase the chance of collecting money in amicable way. If the claim is not covered legal action may be issued. The contracting parties are also allowed to negotiate an arbitration clause or a particular court’s jurisdiction clause. If these clauses are not agreed upon, legal actions are handled by the District Court of the debtor.

10.4.2 Legal SystemThe quickest way to process legal action is to bring legal action demanding the court to issue the payment order (platební roz-kaz) or an electronic payment order (if claimed amount is up to 1 million CZK), which can be issued without a court hearing, and may be executed on condition that the debtor does not file a complaint within the period of 15 days since the payment or-der was deliver to the debtor. When the debtor files a complaint against a payment order or payment order can not be delivered to the debtor, the proceedings continue as an action for recovery, meaning the petitioner (the creditor requires the court to issue judgement). The court usually calls a hearing, which means that the legal proceeding takes longer time.

10.4.3 Required DocumentsIn order to start legal action we need following documents: the Original Power of Attorney granted before a Public Notary and Apostil according to the Hague Convention, the extract from the Trade Register, copies of any unpaid invoices, contracts, relevant orders, confirmations and transport documents (CMR´s) signed by buyer, general terms and conditions, current statements of accounts. These documents are also required for supporting claims arising from purchase contracts. Optional documents are copies of credit notes, any other correspondence, that may verify the claim, the contract of the debt’s transfer if the debt is claimed on behalf of a third company who is not the original seller of the un-paid goods. Documents required for legal actions are determined by the type of claim and its characters. It is helpful if the creditor has some security as acknowledgement of debt or a bill. In the amicable collection process, Atradius Collections Czech will try to obtain some security from the debtor, which can be helpful later for legal action.

10.4.4 Legal Dunning ProcedureThis procedure is only applicable for monetary debts when the debtor is traceable, and the payment order can be delivered to debtor in the Czech Republic. The debtor may file a complaint up to 15 days after the payment order was delivered to the debtor, which then transfers the dunning procedure into a regular law-suit procedure.

10.4.5 LawsuitThe regular lawsuit procedure is either initiated directly after amicable collection has failed due to a dispute by the debtor, or follows directly after the legal dunning procedure if the debtor filed a complained against payment order or if the payment order cannot be delivered to the debtor.

10.4.6 AppealAn appeal against the judgment is possible up to 15 days after the delivery of judgment.

10.4.7 CostsCourt fees account for 5% of the disputed amount, or 4% in case of electronic payment order, at least 1000 CZK (400 CZK in case of electronic payment order). The fee’s base is the basic claim, not including interest. Arbitration fees are established by a spe-cial arbitration rule. Lawyer’s fees depend on the form of legal action and the amount of the claim in dispute and can vary from 2% to 6% of the claim. Other costs can be accumulated with the translation of documents.

10.4.8 Expected TimeframeThe average duration of a legal dunning process is between 3 and 6 months, whereas a lawsuit can take 12 months or longer de-pending on the complexity of the case, and the availability of the judge and lawyers on both sides.

10.4.9 Interests and Costs in the Legal PhaseThe courts always award either interest on which the creditor and debtor agree upon or the statutory interests and also a lump sum of collection costs. The losing party also has to pay court fees and lawyer costs.

TAB

LE OF CO

NTEN

TSC

ZEC

H R

EPU

BLIC


10 CZECH REPUBLIC

10.5 Enforcement

10.5.1 Enforcement in Debt Legitimate court judgments and arbitration awards may be ex-ecuted by private executors in an execution proceeding, if the debtor does not fulfill the obligations imposed by court judgment or arbitration award. Execution proceedings comprise of two parts. The first part starts by presentation of a motion to an exec-utor and determines the question of formal requirements. After the motion is presented to the executor, the court shall author-ize the executor to start execution proceedings. For the second part, authorized executor carries out the execution proceeding. An execution can only be ordered on a basis of a motion submit-ted by the entitled party or by anyone who can prove that the entitlement was transferred to them. The execution proceedings end when all claims are fully paid, including all charges, or for a reason that the debtor has no property.

10.5.2 Enforcement in Movable GoodsEnforcement of decisions imposing payment of a sum of monies can be carried out by means of deductions of wages/salary and other income, assignment of receivables of a debtor, the sale of movable goods or the sale of a business. Choice of particular mean of execution depends on executor. In the case of a secured claim, a decision can be enforced by the sale of the of movable assets, bulk assets, groups of assets and residential or non-residential premises under ownership that have been given as security in accordance with specific legislation or by compulsory debiting of a money claim that was given as security or by recovery against other property rights given as security.

10.5.3 Enforcement in Immovable GoodsEnforcement of decisions can be carried out by means of the sale of immovable assets as well.

10.5.4 Expected TimeframeEnforcements generally take several months, sometimes several years, depending on way of enforcement and on complexity of case.


10.6.1 GeneralAn Insolvency proceeding may only start following an insolven-cy motion submitted by the debtor or by one of their creditors. In the first phase of insolvency proceedings, the court has to decide if the debtor is insolvent. A debtor is classed as insolvent when they have more than one creditor and unpaid invoices for more than 30 days due and the debtor is unable to pay his debts, or when there are more creditors and the amount of debts is higher than debtor´s assets. In the second phase of the proceeding, a court decides what is the most suitable way of solving the in-solvency of the debtor either bankruptcy, reorganization or dis-charge from debts. This procedure can last several years.

10.6.2 ProceedingsAfter the debtor or a creditor submits insolvency motion a court inspects debtor’s financial situation and decides if debtor is in-solvent or not. If the court declares the debtor insolvent then it also has to decide in which way the insolvency will be solved (bankruptcy, reorganization or discharge from debts – only for consumers) and invite all creditors to lodge their claims within 2 months since the declaration of insolvency is published or within 30 days since declaration of insolvency is published in case of solving the insolvency by discharge from debts. The de-cision and documents are published in the Insolvency Register, which is available for public viewing via the internet. All enforce-ment proceedings are suspended. An insolvency administrator is appointed to supervise and to inspect the proceedings. The in-solvency court or the administrator also has to inform all known foreign creditors about debtor´s insolvency and to invite these creditors to lodge their claims within 2 months or 30 days in case of solving the insolvency by discharge from debts (for each known foreign creditor these periods start when the invitation is delivered to this creditor). If the deadline to lodge the claim is missed, no claims will be added in to insolvency procedure. The insolvency procedure of business subjects can be solved in two basic ways. Bankruptcy can be used if the assets of the debtor are used to discharge claims and the debtor closes his business. This procedure is available for both individuals and legal enti-ties. The second option is reorganization, where the debtor must propose changes in their business, enabling them to pay their debts and run the business. Reorganization can be used only for big companies (annual turnover above 50 millions CZK or at least 50 employees).

TAB

LE O

F CO

NTE

NTS

CZ

ECH

REP

UB

LIC


10 CZECH REPUBLIC





77 Copies of delivery notes

77 Statements of account

77 Export of trade register





10.6.4 Expected Timeframe and OutcomeThe duration of insolvency procedures often take more than a year especially for more difficult cases. All updates and steps under-taken in insolvency proceedings may be found in the Insolvency Register.

10.6.5 Limited CompaniesLimited companies must file for insolvency when the company is insolvent (see point 10.6.1.). Insolvency law also defines the dan-ger of insolvency as an expected inability to pay, which means that the management already knows that within a certain time span the company will be unable to pay the due debts.

10.6.6 Non-limited Companies/IndividualsFor non-limited companies or individual debtors (sole traders) the law is applied in the same way as described above for limited com-panies.

10.6.7 Pool of CreditorsIf there are more than 50 creditors who lodged claims in to an in-solvency procedure, then the creditor committee is obliged to set up a pool of creditors. The Pool of creditors is to protect creditor rights in cooperation with the insolvency administrator.

10.6.8 RescissionThe insolvency administrator in bankruptcy can dispute legal actions by the debtor carried out up to three years prior to the dec-laration of bankruptcy.

10.7 Arbitration and MediationA faster and more confidential form of solving disputes is arbi-tration, where the parties to an arbitration contract agree that their dispute will be resolved by designated and independent arbitrator(s). In the Czech Republic there is for example: Rozhodci soud pri Hospodarske komore CR a Agrarni komora. The decision of the arbitrator(s) (arbitration award) is final and parties to and arbitration contract/clause in general can not appeal against the arbitration award.

TAB

LE OF CO

NTEN

TSC

ZEC

H R

EPU

BLIC


10 CZECH REPUBLIC

TAB

LE O

F CO

NTE

NTS

CZ

ECH

REP

UB

LIC


11.1 Amicable Phase

11.1.1 General Atradius Collections Denmark maintains a professional collection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the col-lection process in-house, contacting both verbally and in writ-ing whilst adhering to federal and state laws. Where there is a dispute, we aim to reach an amicable solution between creditor and debtor. We do this by analysing all contractual documents (e.g. signed contracts, orders, confirmations, invoices and deliv-ery notes as well as standard terms previously agreed upon). All investigations are completed with the assistance and agreement of our legal team

11.1.2 Local AgentWe offer a field service for visiting debtors in Denmark (except Bornholm). The purpose is to collect monies, negotiate settle-ments, get an acknowledgement of the debt, gather information about the debtor’s financial situation, and general information about their residence and place of business. Our client will re-ceive a report with all the information about the visit and a rec-ommendation of the next step for their case. The price for visit-ing debtors in Denmark is 850 – 1,250 DKK.

11.1.3 InterestsAtradius Collections Denmark always charges interest to debtors according to The Act of Consolidated Law on Interest on Overdue Payment 743 of 04.09.2002.

There are two alternatives:

77 To calculate the interest rate as agreed between creditor and debtor.

77 To calculate the interest rate according to Danish regulation based on the reference rate fixed by the National Bank of Denmark (+ 7% p.a.). This rate is fixed twice a year on 1st of January and 1st of July. The second rule will always occur if the interest rate is not agreed between the creditor and the debtor.

From a cultural point of view, Danish debtors are used to paying late payment interest fees.

11 Denmark

GDP (2014 EST.)


4.9 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of iron, steel, nonferrous metals, chemicals, food processing, machinery and transportation equipment, textiles and clothing, electronics, construction, furniture, shipbuilding and refurbishment, windmills, pharmaceuticals, medical equipment




73.61 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSD

ENM

AR

K


11 DENMARK

11.1.4 Debt Collection Costs In Denmark debt collection costs are chargeable to debtors representing the clients claim for late payment based on The Act of Consolidated Law Extrajudicial Collection Costs 601 of 12.07.2002. From a cultural point of view, Danish debtors are used to paying debt collection costs. Atradius Collections Den- mark passes all recovered debt collection costs to our client to reduce the claim, or adds them to the success fees, depending on the contractual agreement between the client and Atradius Collections.

11.1.5 PrescriptionThe general prescription period in Denmark is 3 years starting from the due date of the invoice. Transport claims prescribe with-in 1 year starting from the delivery according the CMR conven-tion of Geneva.

The limitation period is suspended or recommenced accord-ing to Law § 522 of 6th June 2007 if:

77 Negotiations between the obligor and the obligee are in progress in respect of the claim or circumstances giving rise to the claim and one party or the other refuses to continue the negotiations

77 A right to refuse performance occurs

77 There is a force majeure.

77 The obligor acknowledges the claim towards the obligee by part payment, payment of interest, the provision of security or in another way

77 A judicial or official act of execution is undertaken or applied for.

11.1.6 Accepted and Most Common Payment MethodsThe most common payment methods are bank transfers and cheque payments. We do not offer the direct booking off of pay-ments from debtor accounts, unless it is done through our Danish lawyer.


Enkeltmandsvirksomhed (sole trader/sole proprietorship)

77 Unlimited liability of owner with business and private funds

77 In order to pursue such debtors, we must have both the first and surname of the debtor.

Interessentselskab I/S (General partnership)


77 Unlimited liability of partners

Kommanditselskab K/S (General partnership)



Anpartselskab ApS (Private limited company) (Limited liability)

77 Minimum capital 80,000.00 DKK divided into shares


Aktieselskab A/S (Joint-stock company) (Limited liability)

77 Minimum capital 550,000.00 DKK divided into shares


TAB

LE O

F CO

NTE

NTS

DEN

MA

RK


11 DENMARK

11.1.8 Sources of Information In Denmark we contact credit-reporting agencies to assess the financial situation of debtors, including real estate and other enforceable assets. We combine this with our own phone con-tacts to get an accurate impression of a debtor’s financial situ-ation and advise on the next step. It depends on the legal form of the debtor whether we are also able to request information from public registers. All traders have to be registered at the Mu- nicipal Trade Office, and obtaining information from this office triggers an administrative fee, which varies from town to town. A debtor with an unknown address can be traced via the Regis-tration of Address office. Private persons are legally obliged to officially un-register when moving from one town to another, and to re-register in their new town. Occasionally some debtors do not follow this procedure and cannot be traced despite this being a punishable offence. As is the case with the Municipal Trade Office, the cost of the information from the Registration of Address office varies from town to town. Even if a debtor is untraceable we are still able to obtain a judgement through the official Gazette.

11.2 Retention of TitleRetention of title is rarely used in Denmark. Although it might have been agreed between debtor and creditor, it is rarely en-forceable in Denmark. The goods in question have to be specified in detail. The use of individual numbers as a general description is not sufficient.

11.3 Achnowledgement of the Debt (frivilligt forlig / skyldnererklæring)If a debtor is not able to satisfy the claim quickly, we request from them that they secure the debt in favour of our client. This can be done amicably and cost efficiently, by providing an ac-knowledgement of debt. In general, we arrange for a written pay-ment arrangement to be drawn up, followed by a special juridical document (Frivilligt Forlig), which allows us to instruct a Bailiff if the debtor does not fulfil his obligations according to the pay-ment arrangement. We prefer to spend time on finding an amicable solution, however, if the debtor is not co–operative, we will start legal action immediately. On the whole, we accept duration for payment arrangements of up to 10 months as this is the pe-riod most often granted to debtors by the Bailiff, but of course we try to shorten this period as much as possible.


11.4.1 GeneralThe Danish court system is governed by The Administration of Justice Act. The ordinary courts are organized in a three-tier hi-erarchy consisting of 82 local courts, 2 district courts and one supreme court.

Entering into legal procedure is only possible with a 10 days notice warning to the debtor, which must include:

77 10 days of notice

77 Name of the creditor

77 Specification of the debt (interest date, rate, cost etc.)

77 Warning that non-payment will lead to legal and further costs

11.4.2 Legal SystemFor debts below 100,000 DKK we can go directly to the Bailiff’s Court. If the debt is undisputed, the Bailiff will issue a payment order, which equals a judgement. This procedure is the cheap- est method of legal action as the court costs will be 700 DKK or 1,350 DKK plus lawyers’ fees. It is also the quickest procedure, taking up to 6 - 12 months on average. If a debtor disputes the debt, the file is always assigned for trail handling, no matter how serious the dispute is.

Debts above 100,000 DKK

A debt of this size always requires an external lawyer to file a claim form with the court. A judgement has to be obtained be-fore enforcement proceedings can be carried out. The cost for ob-taining a judgement depends on the size of the debt. It will cost 1,350 DKK plus 0.5% of the amount above 100,000 DKK plus lawyers’ fees. The timeframe is up to 6 -12 months on average. If a judgement is obtained and the debtor does not pay accordingly, the file will be handed over to the Bailiff’s Court for execution.

TAB

LE OF CO

NTEN

TSD

ENM

AR

K


11 DENMARK

11.4.3 Required Documents In order to apply the legal procedure we are in need of copies of the contract, invoices and a clear statement of account indicating payments and credit notes, which have been booked against the outstanding invoices. In case of a regular lawsuit procedure, cop-ies of the complete contractual documentation should be avail-able starting with the contract, orders, order confirmations, de-livery notes and invoices. Every part of the relationship between all parties should be provable by documentation. All notes and conversations between the creditor and debtor should be kept and provided to our lawyers in case of a dispute. In the case of any verbal negotiations, we will need copies of any reports and names of any witnesses.

11.4.4 LawsuitThe regular lawsuit procedure is either initiated directly after amicable collection has failed due to a dispute by the debtor, or follows directly after the legal dunning procedure if the debtor has appealed. A written pre-procedure is usually issued. Both the plaintiff and the defendant must exchange opinions and proofs by letter until the judge believes they have all relevant infor-mation needed to make a judgement. In this case a hearing is scheduled during which both parties must be present. After the hearing, the judge sets a date to publish the final judgement, and both parties will be informed about the outcome in writing by the court.

11.4.5 AppealAn appeal against the judgement is possible, which will trigger a second e verdict by the court of second instance (local court to district court; district court to high court). In case of third instance, the review will be restricted to a check whether or not statutes were applied correctly.

11.4.6 CostsCosts of the civil law procedure (court costs and lawyer’s fees) are determined by the Ministry of Justice. All costs depend on the amount of the outstanding monies. There are different fees that can apply during a procedure, which makes it difficult to predict the total costs. In addition to this, costs for witnesses and/or experts might also arise. A cost estimation will be provided on a case-by-case should legal action arise.

11.4.7 Expected TimeframeThe average duration of a legal court procedure can take up to 12 months or longer depending on the complexity of the case, and the availability of the judge and the lawyers on both sides.

11.5 Enforcement

11.5.1 Enforcement in DebtEnforcement proceedings are handled by a Bailiff’s Court and can only take place when there is a judgement or a written acknowl-edgement of the due debt from a debtor. The Bailiff will inves-tigate if the debtor has any assets that can be taken as security for the debt and can be sold by creditor following specific rules. The Bailiff will try to establish a payment arrangement with the debtor. Debtors will often try to delay the process by not at-tending the meeting in Bailiff’s Court. In such cases we have to wait until the police have traced the debtor and a new Bailiff’s Court meeting is held. The cost for enforcement proceedings de-pends on the size of the debt. It will cost 300 DKK + 0.5% of the amount above 3,000 DKK plus lawyers’ fees. The timeframe is up to 6 - 12 months on average.

11.5.2 Expected TimeframeThe timeframe is up to 6 - 12 months on average.

TAB

LE O

F CO

NTE

NTS

DEN

MA

RK


11 DENMARK


11.6.1 General The aim of the insolvency proceeding is to pay out all creditors with the same quota by liquidating the assets of a debtor com-pany or collecting the enforceable income of an individual who is declared bankrupt.

Insolvency Procedures in Denmark:

77 77 Enforced Dissolution

77 77 Reconstruction

77 77 Bankruptcy

77 77 Debt restructuring (personal liability)

11.6.2 ProceedingsAfter the debtor or a creditor files for insolvency of the debtor, a preliminary liquidator is appointed to check if sufficient assets are available to cover the costs of the proceedings (court costs and costs of the liquidator). If these costs are deemed to be cov-ered, then insolvency proceedings start and a liquidator will be appointed, usually this is the preliminary liquidator. If any other way is followed, the court will reject the declaration of bank-ruptcy due to insufficient assets. The creditors can then lodge their claim and take back any goods delivered under retention of title. For goods on stock, the liquidator can choose whether to pay the original price to the creditor or to return the goods. The creditors can then lodge their claim and take back any goods delivered under retention of title.

After the proceeding starts, a claim-lodge is possible within a given deadline. The liquidator can either accept the lodged debt or dispute it. If the claim is disputed, the creditor may only file a claim in court to prove the justification of his claim, if further documentation etc. does not convince the liquidator to confirm the debt. At the end of the proceedings, all creditors with confirmed debts will receive a dividend if there are enough assets in the estate. Often there will be no dividend paid at all.

11.6.3 Required DocumentsIn order to lodge the claim on your behalf in non-disputed claims, we only need copies of invoices.

11.6.4 Expected Timeframe and OutcomeThe expected timeframe for an insolvency estate in Denmark is 1-3 years.

11.7 Arbitration and MediationBoth arbitration and Mediation are use in Denmark in disputed files. Arbitration in Denmark is based on the rules of the UNCI-TRAL Model Law. In disputes where the parties agree to settle in accordance with the Arbitration rules, the Institute of Arbitra-tion decides in each dispute of arbitral tribunal. Another way of solving a dispute is by mediation. When the parties have agreed to mediation taking place under the rules of Mediation of Arbi-tration, then the mediator will make a judgement on the dispute that both parties must agree to.

TAB

LE OF CO

NTEN

TSD

ENM

AR

K


11 DENMARK

TAB

LE O

F CO

NTE

NTS

DEN

MA

RK


12.1 Amicable Phase

12.1.1 General Atradius Collections follows a collection process that is profes-sional at all times with the objective to retain relationships between client and debtor whenever possible. Our staff of collec-tion professionals carries out the first collection tier in-house. They relentlessly pursue debtors verbally and in writing within the bounds of federal and state laws.

12.1.2 Local Agent At the present time we cannot offer a field service for visiting debtors in the area of Finland. As soon as this changes we will in-form you. However in case debtors wish to visit our office we will gladly meet them to discuss the solution of their case face to face.

12.1.3 Interests Atradius Collections always charges interest to debtors calculated from the base rate set by the Finnish National Bank + 7 % p.a. on a daily basis.


77 To calculate interest rate as agreed between creditor and debtor.

77 To calculate interest rate according to Finnish regulation based on the reference rate fixed by National Bank of Finland (+ 7 % p.a.). This rate is fixed twice a year per. 1st of January and 1st of July The second rule will always occur if the interest rate is not agreed between the creditor and the debtor.

From a cultural point of view, Finnish debtors are used to paying late payment interests.

12.1.4 Debt Collection CostsIn Finland debt collection costs are chargeable to debtors representing the clients claim for late payment. From a cultural point of view, Finnish debtors are used to paying debt collection costs.

12 Finland

GDP (2014 EST.)


5.5 %INDUSTRIES

Leading industries include metals, electronics, machinery and scientific instruments, shipbuilding, pulp and paper, foodstuffs, chemicals, textiles and clothing




81.79 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSFIN

LAN

D


12 FINLAND


12.2.1 General

Entering into legal procedure is only possible with a 8 days notice warning to the debtor including:

77 8 days of notice


77 Specification of the debt (interest date, rate, cost ect.)

77 Non payment will lead to legal and further cost

The debt needs to be determined to be enforceable. If the debt is undisputed, the Bailiff will issue a payment order, this equals a judgement. If a debtor disputes the debt, no matter the rea-son or the seriousness of the dispute, the file is assigned for trail handling. If a judgement is obtained and the debtor does not pay accordingly, the file will be handed over to the Bailiff’s Court for execution.

12.2.2 Required DocumentsIn order to apply the legal procedure we are in need of copies of the contract, invoices and a clear statement of account indicating payments and credit notes which have been booked regarding the outstanding invoices. In case of a regular lawsuit procedure copies of the complete contractual documentation should be available starting with the contract, orders, order confirmations, delivery notes, invoices etc.. Basically every step of the relationship should be provable by documentation. In case of dispute also the “side conversations” between creditor and debtor should be kept and provided to our lawyers. In case of oral negotiations we are in need of the visit/negotiations reports and names of witnesses.

12.2.3 LawsuitThe regular lawsuit procedure is either initiated directly after amicable collection failed due to a dispute by the debtor of fol-lows directly to the legal procedure after the debtor appealed. Usually a written pre-procedure is issued. Both the plaintiff and the defendant exchange opinions and proofs by letter until the judge has the impression of having all relevant information in order to judge. In this case a hearing is scheduled during which both parties have to be present. After the oral hearing the judge sets a date to publish the final judgement. The parties will be informed about the outcome in writing by the responsible court.

12.2.4 CostsThere are different fees, which can apply during a legal proce-dure, which makes it difficult to predict the total costs. In addi-tion to this, costs for witnesses and/or experts might also arise. A cost estimation will be provided case by case should legal actions become necessary.

12.2.5 Expected TimeframeThe average duration of a legal process is up to 18 months or longer depending on the complexity of the case as well as the availability of the judge and the lawyers on all sides.

12.2.6 Interests and Costs in the Legal PhaseOut of court interests and costs can be claimed as part of the outstanding during the legal procedure. Normally the losing party has to bear the costs of the legal procedure if file goes to trial. In case of a legal settlement the parties normally bear their own costs for court fee and lawyer fee.

TAB

LE O

F CO

NTE

NTS

FIN

LAN

D


12 FINLAND

12.3.3 Required Documents In order to lodge the claim on your behalf in non-disputed claims, we need copy of invoices and a original signed power of attorney.

12.3.4 Expected Timeframe and Outcome The expected timeframe for an insolvency estate in Finland is 1-5 years.


12.3.1 General The aim of the insolvency proceeding is to pay out all creditors with the same quota by liquidating the assets of a debtor com-pany or collecting the enforceable income of an individual who is declared bankrupt.

Insolvency Procedures in Finland:

77 Reconstruction

77 Bankruptcy

12.3.2 Proceedings After the debtor or a creditor files for insolvency of the debtor, a preliminary liquidator is appointed to check if sufficient assets are available to cover the costs of the proceedings (court costs and costs of the liquidator). If these costs are deemed to be covered, the insolvency proceedings start and a liquidator will be appointed; usually this is the preliminary liquidator. Any other way, the court will reject the declaration of bankruptcy due to insufficient assets. The creditors can then lodge their claim and take back any goods delivered under retention of title.

After the proceeding starts, a claim-lodge is possible within a given deadline. The liquidator can either accept the lodged debt or dispute it. If the claim is disputed, the creditor may only file a claim in court to prove the justification of his claim, if further documentation etc. does not convince the liquidator into confirming the debt. At the end of the proceeding all creditors with confirmed debts will receive a dividend if any enough assets in the estate. Often the insolvency estate are closed with a very small no dividend at all.

TAB

LE OF CO

NTEN

TSFIN

LAN

D


12 FINLAND

TAB

LE O

F CO

NTE

NTS

FIN

LAN

D


13.1 Amicable Phase

13.1.1 General Atradius Collections France maintains a professional collection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the col-lection process in-house, contacting both verbally and in writing whilst adhering to state laws. Where there is a case of dispute, we aim to reach an amicable solution between creditor and debtor. We do this by analysing all contractual documents (e.g. signed contracts, orders, confirmations, invoices and delivery notes as well as all standard terms that have been agreed upon). All in-vestigations are completed with the assistance and agreement of our legal team.

13.1.2 Local Agent When our in-house collection efforts do not lead to a positive result, we will employ our agent network. They contact debtors to provide us with information regarding the debtor’s financial situation and solvency. The agents we use will report back on any meetings they have with the debtor, as well as providing a summary of the debtor’s business operations. The agent is able to collect money. If they negotiate a payment plan or full and final statement with the debtor they should ask Atradius Collections France for approval.

13.1.3 InterestAtradius Collections France always charges interest to debtors. This rate is set by the government and multiplied by 3.5 in ac-cordance with French law on the terms of payment.

13.1.4 Debt Collection CostsAtradius Collections France charges a fixed cost of 40 EUR per case in accordance with the European directive and a penalty clause of 10 % for the recovery’s costs. If the creditor has a spe-cial contractual agreement this can be taken into account as long as the debtor actually agreed to the terms. From a cultural point of view, French debtors are not used to paying debt collection costs and often the collection cost amount is used as a matter of negotiation between debtors and collectors.

13 France

GDP (2014 EST.)


5.4 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of machinery, chemicals, automobiles, metallurgy, aircraft, electronics; textiles, food processing; tourism




70.96 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSFR

AN

CE


13 FRANCE

13.1.5 Prescription In commercial matters the prescription period is five years, which may be interrupted by the undertaking of a legal procedure.

13.1.6 Accepted and Most Common Payment Methods The most common payment methods are cheque payment and bank transfer. We do not offer the direct booking off from debt-or’s accounts.


13.1.8 Sources of Information In France we contract very experienced reporting agencies to assist with the assessment of the financial situation of debtors. Depending on the debtor’s legal form we can also find out further information, such as any property owned by them to determine the best course of action against a debtor. We also have numer-ous tracing agents who employ investigators where necessary to locate debtors and their assets.

13.2 Retention of TitleFrance has very comprehensive, supplier-focused regulations on Retention of Title, which must be explicitly agreed upon prior to delivery. Most importantly, the debtor must acknowledge the retention of title before receiving their first invoice. Most companies include Retention of Title provisions (ROT) in their general trading conditions. In this case, the debtor must either sign these conditions in advance, or the client has to advise the debtor explicitly that the general trading conditions apply before sending the first invoice, e.g. with a note on the order confirma-

tion. It is vital to get proof that the trading conditions have been agreed to; otherwise the benefits of the more complex version of the French retention of title cannot be used for reducing the outstanding amount. The retention of title is used in most cases before insolvency proceedings arise. We should be able to prove the existence of the goods in the inventory of the debtor at the date of the insolvency judgment, which can prove beneficial dur-ing a judicial procedure.

13.3 Safeguarding MeasuresIn case a debtor is not able to satisfy your claim in a speedy man-ner, we can request the debtor to secure the debt in favour of our client. This can be done by providing a written acknowledgement of debt or by asking a special judge to allow us to take conserva-tory measures such as seizure of debtor’s bank account.

Entreprise individuelle 77 sole proprietorship with unlimited liability of owner with business and private funds

EURL (Entreprise Unipersonnelle à Responsabilité Limitée)

77 sole proprietorship with no minimum capital and liability limited to company capital

SASU (Société par Actions Simplifiées Unipersonnelle)

77 sole proprietorship with minimum capital of 37,000 EUR and liability limited to company capital

SARL (Société à Responsabilité Limitée) 77 company with limited liability with 2 to 100 partners, no minimum capital and liability limited to company capital

SNC (Société en Nom Collectif) 77 general partnership company with minimum of 2 partners, no minimum capital and unlimited liability of partners

SA (Société Anonyme) 77 public limited liability company with minimum 7 partners, minimum capital of 37,000 EUR and liability limited to company capital

SAS (Société par Actions Simplifiée) 77 simplified joint stock company with minimum capital of 37,000 EUR and liability limited to company capital

TAB

LE O

F CO

NTE

NTS

FRA

NC

E


13 FRANCE


13.4.1 General If the amicable phase fails to bring results, we will send a letter to the debtor advising them of our decision to start legal pro-ceedings. Our legal team will decide the best procedure to be un-dertaken depending on the documents that are available in the case and the position of the debtor (acknowledgment of debt, dispute, litigation).

13.4.2 Legal SystemFor disputes between traders or businesses, the Commercial Court (Tribunal de Commerce) is used. The judges are business people elected by their peers and evidence may be adduced by any appropriate means. For claims of an amount greater than 4000 EUR it is possible to appeal the first instance court decision.

13.4.3 Required DocumentsIn order to apply the legal dunning procedure we are in need of copies of the contract, invoices and a clear statement of account indicating payments and credit notes that have been booked against the outstanding invoices. In the case of a regular lawsuit procedure, copies of the complete contractual documentation should be available starting with the contract, orders, confirma-tions, delivery notes and invoices. Every step of the relationship between the debtor and creditor should be provable by docu-mentation.

13.4.4 Legal Dunning ProcedureThis type of procedure is used when the amount of the debt is fairly modest, and not disputed. It allows Atradius Collection France to obtain an injunction against the debtor (injonction de payer) without the presence of the debtor before the Court. It is a very simple, quick and inexpensive procedure that does not require a lawyer, unless the debtor disputes the debt after bailiff notification. It also allows Atradius Collections France to obtain an interim order (référé provision) with or without the presence of the debtor before the court. If the debtor is present and dis-putes, the judge may decide to close the case and ask the creditor to start the common procedure (assignation au fond) It is a very fast procedure but does require a lawyer to represent the creditor in the Court.

13.4.5 LawsuitThe regular lawsuit procedure is initiated directly after amicable collection has failed due to a dispute by the debtor or because the debtor has ignored payment demands. The main goals of legal ac-tion are to determine the existence and amount of the debt and to define the relationships between the creditor and the debtor. It will also decide if the outstanding amount is owed and if the debtor must pay it immediately or with a payment plan. It is usual practice to issue a pre-procedure notice. Both the plaintiff and the defendant exchange opinions and proofs by letter until the judge is happy that they have all the relevant information in order to come to decision. A hearing will then be scheduled and both parties must be present. After the hearing the judge sets a date to publish the final judgement, and both parties will be informed about the outcome in writing by the relevant court.

13.4.6 AppealThe plaintiff or defendant can appeal the judgement if they are not happy with it. One party can appeal the judgement within one month from the notification of the original judgment. Judges at the Court of Appeal will then rehear the case within two years.

13.4.7 CostsCosts of civil law procedures are determined by the court fees and the lawyer fees, which are fixed by each lawyer. The costs do not depend on the principal amount outstanding but on the complexity of the case, and we have negotiated preferential tariffs with our lawyer’s network. Cost estimation will be provided on a case-by-case basis should legal action become necessary. The costs of a legal dunning procedure are only 30% of a full court procedure.

13.4.8 Expected TimeframeA non-complex commercial case will take approximately eight to ten months to be heard, which can be doubled for complex com-mercial cases, a technical dispute or in the case of appeal. Some jurisdictions where the judicial system has been rated below the average performance of the country may take longer to judge cases, the expected timeframe of an appeal is almost two years.

TAB

LE OF CO

NTEN

TSFR

AN

CE


13 FRANCE

13.4.9 Interest and Costs in the Legal PhaseThere are two kinds of recovery costs in legal cases. These are the charged back costs that the debtor has to pay, which are of-ten liquidated by the judge, and in most cases, the costs derived from the judicial procedure and the notification’s costs. The sec-ond costs are those that cannot be charged back to the debtor, such as lawyers’ fees. Each party has to bear its own lawyer fees but the winning party could ask the judge to obtain an indemnity to compensate their expenses. In practice, the amount approved by the Court constitutes only a minor share of the expenses. This indemnity is charged to the debtor, and costs for experts might also arise.

13.5 Enforcement

13.5.1 Enforcement in DebtAfter the judgement is notified to the debtor, they have one month to appeal, after which the judgement becomes ‘executive’ meaning that a bailiff can start a forced execution. In France, only bailiffs have the authority to handle the enforcement of a judicial decision. At this stage, the debtor has no choice. They either have to pay or go bankrupt.

13.5.2 Enforcement in Movable GoodsThis is the standard procedure where the bailiff visits the debt-or to take away movable goods for liquidation in favour of the creditor. The bailiff cannot seize goods necessary for the debtor’s basic daily life or that enable them to maintain the business ac-tivity. The bailiff will always ask our opinion on the seizing and selling of the goods.

13.5.3 Enforcement in Immovable GoodsIf the debtor owns real estate, the bailiff can issue an order of attachment of real estate (saisie immobilière). In France very few companies own any real estate, so the enforcement in immovable goods is very rarely used.

13.5.4 Expected TimeframeEnforcement timeframes depends on the financial situation of the debtor.


13.6.1 General FactsThe legal definition of insolvency is when a debtor is not able to face up their due debts considering their available assets.

The two main procedures are:

77 Receivership

77 Bankruptcy

Receivership can be converted in bankruptcy, and in fact almost 90% of receiverships end in bankruptcy.

13.6.2 ProceedingsReceivership allows saving the debtor’s activity due to a continu-ation plan, meaning creditors can expect dividends. Bankruptcy means the liquidation of the assets when the situation is totally compromised meaning creditors cannot expect any dividends. The delay to lodge the claim is 2 months for French creditors and 4 months for foreign creditors from the date of publication in BODACC (official journal). The debt may also be disputed and convocation from the Court is planned to justify the debt.



77 The original power of attorney. Atradius Collections France needs to have a specific power of attorney. It must be in French, signed by the legal representative of the creditor, sealed with the commercial stamp, and must mention the name of the debtor

77 Copies of the complete contractual documentation should be available starting with the contract, orders, confirmations, delivery notes and invoices.

13.6.4 Expected Timeframe and OutcomeThe duration could be important, as it is mandatory to check the debt of all the creditors who lodged the claim before making proposition of plan of payment (in general in 10 years by annual payment). Almost 90% of the receiverships end by a bankruptcy.

TAB

LE O

F CO

NTE

NTS

FRA

NC

E


13 FRANCE

13.6.5 Limited Companies Consequences in the insolvency procedure for limited and Non-Limited companies are the same as the consequences for the re-ceiverships and bankruptcy proceedings for both kind of companies.

13.6.6 Non-Limited Companies/IndividualsConsequences in the insolvency procedure for Non-Limited and individual companies are the same as the consequences for the receiverships and bankruptcy proceedings for both kind of companies.

13.6.7 Pool of CreditorsThere are two creditor pools that the Court may decide to build. The first is made up of committees of credit institutions and the second one contains the main suppliers of goods or services. These committees are invited to comment on the draft of the recovery plan. The creditors’ representatives inform the creditors of the opening of the proceedings, receives their declarations of claims, and asks the bankruptcy judge to accept or reject these claims. They alone are empowered to perform acts in the collec-tive interests of the creditors.

13.6.8 RescissionThe suspect period starts on the date of cessation of payments and all acts of payment during this period may be declared void if the contracting party was aware of the cessation of payments.

13.7 Arbitration and MediationArbitration and mediation are allowable by law in France, but it is very unusual for either party to request them.

TAB

LE OF CO

NTEN

TSFR

AN

CE


13 FRANCE

TAB

LE O

F CO

NTE

NTS

FRA

NC

E


14.1 Amicable Phase

14.1.1 General Atradius Collections Germany maintains a professional collection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the col-lection process in-house, contacting both verbally and in writing whilst adhering to federal and state laws. Where there is a dis-pute, we aim to reach an amicable solution between creditor and debtor. We do this by analyzing all contractual documents (e.g. signed contracts, orders, confirmations, invoices and delivery notes as well as all standard terms previously agreed upon). All investigations are completed with the assistance and agreement of our legal team.

14.1.2 Local AgentAt this time, we do not have the facility to visit debtors in Ger-many, but should this situation change, we will inform you im-mediately. However, if the debtor wishes to visit our premises, we will gladly arrange a face-to-face meeting to discuss the situ-ation.

14.1.3 InterestsAtradius Collections Germany always charges interest to debtors calculated from the base rate set by the German national bank plus 8% on a daily basis (see European Directive 2000/35/CEE Article 3 Section 1d in conjunction with paragraph 288 section 2 German Civil Code). Where a creditor has to pay higher interest to their bank, we are able to ask for the higher rate. However, this rate needs to be confirmed by the bank in writing in case any legal action needs to be initiated. From a cultural point of view, German debtors are used to paying late payment charges, although the actual amount of the interest payment is considered a matter of negotiation between debtors and collectors.

14.1.4 Debt Collection CostsIn Germany, under German Civil Code paragraph 280 sections 2 and 3 and paragraph 286, debt collection costs are chargeable to debtors representing the client’s claim for late payment. If the creditor has a special contractual agreement, this can be taken into account as long as the debtor has previously agreed to the terms. From a cultural point of view, German debtors are used to paying debt collection costs, though often the actual amount of these costs is considered a matter of negotiation. Atradius Collections Germany will either forward all recovered debt col-lection costs to our client to reduce the claim, retain the cost or add them to the success fee. This will depend on the contractual agreement between the client and Atradius Collections.

14 Germany

GDP (2014 EST.)


6.6 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of iron, steel, coal, cement, chemicals, machinery, vehicles, machine tools, electronics, food and beverages, shipbuilding, textiles




66.77 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSG

ERM

AN

Y


14 GERMANY

14.1.5 PrescriptionThe general prescription period in Germany is 3 years starting at the end of the year the claim became due under section 195 in combination with section 199 I German Civil Code. Transport claims prescribe within 1 year starting from the delivery under the CMR convention of Geneva. The limitation period is suspend-ed or recommenced under Germany Civil Law paragraph 203 ff:

77 If negotiations between the obligor and the obligee are in progress in respect of the claim or the circumstances giving rise to the claim until one party or the other refuses to continue the negotiations

77 In the case of a right to refuse performance

77 In case of force majeure

77 The obligor acknowledges the claim towards the obligee by part payment, the payment of interest, the provision of security or in any other way or a judicial or official act of execution is undertaken or applied for.

14.1.6 Accepted and Most Common Payment MethodsThe most common payment methods are bank transfer and cheque payments. Atradius Collections also accept banker’s drafts although these are very rare in Germany. We do not offer the direct booking off from debtor accounts.


Einzelunternehmen (sole trader/sole proprietorship)


77 In order to pursue such debtors, we need the full first and surname of the debtor

GbR (Gesellschaft bürgerlichen Rechts) (Civil law partnership)



77 Usually non-business or small-business activities

OHG (offene Handelsgesellschaft) (General partnership)



KG (Kommanditgesellschaft) (Limited partnership)


77 At least one partner is liable, with business and private funds


PartG (Partnergesellschaft) (Professional (service) partnership)


77 Partners have to be independent professionals (e.g. lawyers, doctors, architects)

UG (Unternehmergesellschaft) (Entrepreneurial company with limited liability)

77 No minimum capital, however 25% of yearly earnings must be accumulated until 25,000.00 EUR are reached

77 Liability limited to company capital

GmbH (Gesellschaft mit beschränkter Haftung) (company with limited liability)

77 Minimum capital 25,000,00 EUR in the form of cash but also assets such as cars or company equipment

77 Partners only are liable with company capital

AG (Aktiengesellschaft) (company on shares)

77 Minimum capital 50,000.00 EUR divided into shares


TAB

LE O

F CO

NTE

NTS

GER

MA

NY


14 GERMANY

14.1.8 Sources of Information In Germany we contact credit-reporting agencies to assess the financial situation of debtors, including real estate and other en-forceable assets. We combine this with our own phone contacts to get an accurate impression of a debtor’s financial situation and advise on the next step. It depends on the legal form of the debt-or whether we are also able to request information from public registers. All traders have to be registered at the Municipal Trade Office, and obtaining information from this office triggers an ad-ministrative fee, which varies from town to town. All companies with a limited liability have to register with the trade register at a competent court, which can be accessed online. We have direct access and can obtain any additional information on sharehold-ers, historic developments and balance sheets published there. A debtor with an unknown address can be traced via the Reg-istration of Address office. Private persons are legally obliged to officially un-register when moving from one town to another, and to re-register in their new town. Occasionally some debtors do not follow this procedure and cannot be traced, despite this being a punishable offence. As is the case with the Municipal Trade Office, the cost of the information from the Registration of Address office varies from town to town. In order to trace a non-registered debtor and / or in case of potential fraud, we may engage the services of a private investigator from an experienced agency we have a relationship with.

14.2 Retention of TitleGermany has very comprehensive, supplier-focused regulations on Retention of Title, which must be explicitly agreed upon prior to delivery. Most importantly, the debtor must acknowledge the retention of title before receiving their first invoice. Most compa-nies include Retention of Title provisions (ROT) in their general trading conditions. In this case, the debtor must either sign these conditions in advance, or the client has to advise the debtor ex-plicitly that the general trading conditions apply before sending the first invoice, e.g. with a note on the order confirmation. It is vital to get proof that the trading conditions have been agreed to; otherwise the benefits of the more complex version of the German retention of title cannot be used for reducing the out-standing amount.

There are three different kinds of Retention of Title:

77 Basic ROT: The goods supplied remain the legal property of the supplier until full payment. The supplier can/must get the goods back.

77 Increased ROT: Open account retention. In the course of ongoing business relations, the supplied goods remain the legal property of the supplier until all outstanding amounts from the open account or business relations have been fully paid

77 Extended ROT: Assigned to the supplier in advance. Please note: In accordance with §354a of the Commercial Code, an advance assignment is effective despite a non-assignment agreement between the purchaser and any third parties.

14.3 Safeguarding MeasuresIn case a debtor is not able to satisfy your claim in a speedy man-ner, we can request the debtor to secure the debt in favour of our client. This can be done amicably and cost effectively by provid-ing an acknowledgement of debt - authenticated by a notary and immediately enforceable in case the agreed payment terms are not honoured. Corresponding notary costs have to be carried by the debtor, and the notary will send the enforceable engrossment directly to us. In exceptional cases, the cost of obtaining such a title is advanced by us, e.g. if the debtor is not capable of doing so. Costs are then charged back to the client. Approaches like this have to be evaluated on a case-by-case basis and are dependent on the outstanding principal amount. The debtor is also able to offer other means of security like mortgages, assignment of debts or assets. Contracts must be drawn up for Assignment of debts or assets, while mortgages have to be registered by a notary.


14.4.1 GeneralThe modern German legal system is composed of public law, which regulates relations between citizens and the state; and civil law, which regulates the relations between two people or companies. Entering into legal procedure is possible without prior warning to the debtor. However, all courts are trying to me-diate between creditor and debtor, and in order to shorten the amicable phase of the legal proceedings, they may ask for proof that all pre-court efforts did not reach a conclusion, and will ask to see all prior correspondence in order to reach a fast and final judgement.

14.4.2 Legal SystemMatter of the case and amount of monies owed divides Court jurisdiction. This scheme is a simplified extract of the German jurisdiction usually applicable for cases regarding outstanding money. The plaintiff does not require representation by a regis-tered attorney before a local court (for claims up to 5,000 EUR), although professional legal representation is mandatory before any other court.

TAB

LE OF CO

NTEN

TSG

ERM

AN

Y


14 GERMANY

14.4.3 Required Documents In order to apply the legal dunning procedure, we require copies of the contract, invoices and statements indicating payments and credit notes, which have been paid against the outstanding mon-ies. In case of a regular lawsuit procedure, copies of all contractu-al documentation should be available starting with the contract, orders, order confirmations, delivery notes and invoices etc. Every step of the relationship between both parties should be provable by documentation. In case of dispute, all notes of con-versations between creditor and debtor should be kept and given to our lawyers. In the case of oral negotiations, we are in need of the visit/negotiations reports and names of any witnesses.

14.4.4 Legal Dunning ProcedureThis procedure is only applicable for monetary debts when the debtor is traceable. The Berlin-Wedding court is responsible for non-German clients while various competent local courts are re-sponsible for German cases. In order to obtain an enforceable judgement by the legal dunning procedure, first the court or-der (Mahnbescheid) and secondly the enforcement order (Voll-streckungsbescheid) need to be applied one after the other and served to the debtor within time-frames stipulated in the Ger- man civil process law. The debtor can appeal during both stages, which would transfer the dunning procedure into a regular lawsuit procedure.

14.4.5 LawsuitThe regular lawsuit procedure is either initiated directly after amicable collection has failed due to a dispute by the debtor, or follows directly after the legal dunning procedure if the debtor has appealed. A written pre-procedure is usually issued. Both the plaintiff and the defendant must exchange opinions and proofs by letter until the judge believes they have all relevant informa-tion needed to make a judgement. In this case a hearing is sched-uled during which both parties must be present. After the hearing the judge sets a date to publish the final judgement, and both par-ties will be informed about the outcome in writing by the court.

14.4.6 AppealAn appeal against the judgement (the threshold is 600 EUR) is possible, which will trigger a second verdict by the court of sec-ond instance (local court to district court; district court to higher regional court). In case of third instance, the review will be re-stricted to a check whether or not statutes were applied correctly. Any later amendments of facts or proof are not permissible.

14.4.7 CostsAny costs incurred by the civil law procedure (court costs and lawyer’s fees) are determined by the provisions of the RVG (Law for lawyer fees) and the GKG (Law for court fees) and not subject to any negotiation. All costs are dependant on the principal out-standing amount and are calculated taking into account amounts kept by each party. There are different fees that can apply during a procedure, which makes it difficult to predict the total costs. In ad-dition to this, costs for witnesses and/or experts might also arise. The costs of the legal dunning procedure are usually 20% to 40% than that of a full court procedure. Costs can be kept down if the debtor does not react to court summons and accepts the claims.

14.4.8 Expected TimeframeThe average duration of a legal dunning process is between 8 and 12 weeks, whereas a court procedure can take 12 months or long-er depending on the complexity of the case, and the availability of the judge and lawyers on both sides.

14.4.9 Interests and Costs in the Legal PhaseOut of court interests and costs can be claimed as part of the outstanding monies during the legal procedure. Nowadays, ap-proximately 60% of the German courts award this additional claim, but the outcome depends on the court and judge. In all cases the losing party has to bear the costs of the legal procedure according paragraph 91 ff. German Civil Process Law. In case of a legal settlement the parties bear the costs of the corresponding proceedings in proportion to their prevailing/failing.

Extract of the German jurisdiction

TAB

LE O

F CO

NTE

NTS

GER

MA

NY


14 GERMANY

14.5 Enforcement

14.5.1 Enforcement in Debt The creditor can block the bank account of the debtor or block the debtor’s claims against tax offices, life insurances, the debtor’s em-ployer, and shares in a business, corporate shares, or any possible claim the debtor may have against any third party. This usually proves very effective, and can save costs when enforced as part of the judgement. Very specific information, like bank account de-tails, the name and address of the employer and any information about corporate shares or shares in businesses are required for this kind of enforcement. In all cases, the court where the garnishee is residing is responsible for the single enforcement action.

14.5.2 Enforcement in Movable GoodsThis is the standard procedure where the bailiff visits the debtor to take away movable goods he can liquidate in favour of the creditor. The bailiff cannot seize goods necessary for the debtor’s basic daily life or that enable them to maintain their business activity. If these types of goods are not available, the bailiff will demand a statu-tory declaration from the debtor. If they refuse, and do not appear before the bailiff for the appointment set up for the affidavit, the creditor needs to file for an arrest warrant before court. The war-rant will then be executed by the bailiff, supported by the police. The warrant is used to obtain the statutory declaration from the debtor and can only be obtained every three years.

14.5.3 Enforcement in Immovable GoodsIf the debtor owns real estate, it is possible to receive a record of the claim in the land register and to then either force the attach-ment, the attachment and sale or in case there are tenants, the se-questration of the real estate by court order. All of these processes are more expensive than those mentioned previously, and it can be a long process to get a copy of the record. Afterwards, it can also take time to sell or sequestrate the land and real estate.

14.5.4 Expected TimeframeEnforcements for monies generally take only four to eight weeks. Enforcements into movable goods, however, often need six to nine months in the western parts of Germany and nine to twelve months in the eastern parts of Germany, due to a lack of bailiffs and large backlogs. The time frame for enforcements into real es-tate depend very much on the single course of the case, the court, possible banks and, of course possible buyers.


14.6.1 GeneralInsolvency proceedings - whether regular insolvency, insolvency plan or individual insolvency are a kind of a collective enforce-ment for all the creditors of one debtor. With the start of the pre-liminary proceedings, all individual enforcements are suspended, and only when the insolvency proceedings will not be started, will individual enforcements continue. The aim of the insolvency pro-ceedings is to pay out all creditors with the same quota by liquidat-ing the assets of a debtor or company or by collecting the enforce-able income of an individual who is declared bankrupt.

14.6.2 ProceedingsAfter the debtor or a creditor files for insolvency of the debtor, a preliminary liquidator is appointed to check if sufficient assets are available to cover the costs of the proceedings (court costs and costs of the liquidator). If these costs are deemed to be covered, then insolvency proceedings start and a liquidator will be appoint-ed, usually this is the preliminary liquidator. If any other route is followed, the court will reject the declaration of bankruptcy due to insufficient assets. The creditors can then lodge their claim and take back any goods delivered under retention of title. For goods on stock, the liquidator can choose whether to pay the original price to the creditor or to return the goods. For the extended re-tention of title, the insolvency practitioner liquidates the goods or claims and pays out these creditors retaining VAT and a commis-sion of 9% of the revenues.

After the proceeding starts, a claim-lodge is possible within a given deadline. All claims lodged are checked before the first hearing, usually within three month after the start of the proceeding. If the claim-lodge is done after the deadline, the claim cannot be checked before the first hearing and a second hearing close to the end of the proceedings (in general after two to four years) has to be announced. For these late lodges, additional costs of 15 EUR arise and the confirmation of the debt will be delayed. The liquida-tor can either accept the lodged debt or dispute it. If the claim is disputed, the creditor may only file a claim in court to prove the justification of his claim, if further documentation etc. does not convince the liquidator to confirm the debt. At the end of the pro-ceedings, all creditors with confirmed debts will receive a dividend, on average between 5% and 8% of the original claim. In less than 50% of the proceedings a dividend higher than 2% is distributed.

TAB

LE OF CO

NTEN

TSG

ERM

AN

Y


14 GERMANY



77 The original power of attorney.

77 Copies of invoices.

77 Copies of contracts.

77 Copies of orders, order confirmations and delivery notes.



14.6.4 Expected Timeframe and OutcomeThe deadline to lodge claims is 1-3 months depending on the com-plexity of the procedure, and starts from the adjunction order (In-solvenzeröffnungsbeschluss). The check for the claim lodge takes place 1-3 months after the deadline for the claim lodge. The total duration of an insolvency procedure is between 4 and 7 years. In Germany the case will be closed after the Insolvency Practitioner has accepted the claim after it has been lodged.

14.6.5 Limited Companies

Limited companies will file for insolvency for three main reasons:

77 The first one is inability to pay, which does not automatically mean that a buyer’s assets do not cover all debts. Under special circumstances, it could be the case that only the actual liquidity does not cover the due debts but in general the company’s expected liquidity would.

77 The second reason is expected inability to pay which means that the management already knows that within a certain time span the company will be unable to pay the due debts.

77 The third reason is accounting insolvency, which means that buyer’s assets do not cover the debts.

14.6.6 Non-Limited Companies/IndividualsFor non-limited companies or individual debtors, it is not obliga-tory to declare bankruptcy. Nevertheless, they can declare bank-ruptcy for the reason of inability to pay or the expected inability to pay. Costs for the proceedings will be covered by the assets or the liable persons may request for a respite of the costs. If the in-solvency proceeding is confirmed, the debtor has the right to claim the annulations of all pending debts after a period of six years. During this period all enforceable incomes have to be paid to the appointed liquidator who will distribute funds to all creditors on a pro rata basis.

14.6.7 Pool of CreditorsIf a bigger company goes bankrupt, the actual insolvency proceedings will often be accompanied by a second set of proceedings called pool of creditors. In this case, the creditors join in a pool agreement usually founded by the credit insurance companies or banks. The aim of the pool is to accumulate all the claims of credi-tors who delivered goods under the retention of title clause. The creditors have to prove that the retention of title was agreed. They then transfer their rights to the pool arrangement and participate in the refunds from the sale of all secured goods with a quota of their confirmed credit.

14.6.8 RescissionThe liquidator can dispute payments by the debtor carried out within three months prior to the declaration of bankruptcy. A longer period, up to 10 years, is possible for some special forms of payment. If the liquidator disputes these payments, the creditor has to refund them and can only lodge the corresponding debt instead.

14.7 Arbitration and MediationIf creditor and debtor agree on an alternative dispute solution there are two options available: arbitration and mediation or conciliation. Agreeing on a private tribunal has a number of ad-vantages compared to a regular legal proceeding; it’s speedier as the courts are less occupied and there is no appeal, plus it’s more cost-efficient and the hearing and process is confidential. However, agreeing on arbitration also means exclusion of the jurisdiction of the ordinary courts. Arbitration in Germany is based on the rules of the UNCITRAL Model Law of International Commercial Arbitra-tion and is run by either the ordinary courts, chambers of com-merce or a professional arbitrator.

The choice belongs to both parties agreeing on arbitration. The second way of solving a dispute is by mediation or conciliation proceedings, which focus on finding the root cause of the dispute in order to find constructive agreements and solutions for both creditor and debtor. Mediation or conciliations are carried out by professional organisations like the Chambers of Industry and Com-merce or by professional mediators. There are now more and more attorneys who specialize in mediation. The new agreement is not a judgement but a kind of contract.

TAB

LE O

F CO

NTE

NTS

GER

MA

NY


15.1 Amicable Phase

15.1.1 GeneralWe have several attorneys and debt collection partners acting for us on the Greek territory and collecting our claims out of Court or in Court. The collection process commences with a double regis-tered letter to debtor´s address, followed by an initial telephone call and also investigations are made through internet sources and local contacts.

15.1.2 Local AgentAll our attorneys / agents in Greece are in a position to check debtor’s solvency examining in particular the Court Registries, the Land Registry and the Registry of Mortgages for a fee amounting to 150 EUR. Furthermore personal visits to the debtor can be organised in the area of Athens and Thessaloniki for sig-nificant outstandings.

15.1.3 InterestsContractual interests can be charged to the debtor. If no con-tractual agreement was made we generally apply an interest of 8.75 % p.a. in accordance with the European Directive 2000/35/ CEE which has become Greek law by Presidential Decree.

15.1.4 Debt Collection CostsAmicable collection costs can only be asked if these were con-tractually agreed between creditor and debtor.

15 Greece

GDP (2014 EST.)


3.2 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of tourism, food and tobacco processing, textiles, chemicals, metal products; mining, petroleum




30.85 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSG

REEC

E


15 GREECE


15.2.1 GeneralDepending on the available documents and if the open debts are disputed by debtor there is the possibility to apply a payment order at court or to sue out an ordinary procedure.


In order to apply a payment order we need:

77 Notarised Acknowledgement of Debt

77 or a private acknowledgement of debt with tax stamps

77 or original bill of exchange, promissory letter, bounced cheque

77 or copy invoice and proof of delivery, possibly in original, signed by the debtor on receipt of the goods, or any document from the debtor or transporters proving receipt of the goods (e.g. sale ex-works)

In case of regular lawsuit procedure copies of the complete con-tractual documentation should be available starting with the con-tract, orders, order confirmations, delivery notes, invoices etc.

15.2.3 Payment OrderIn order to start the procedure a payment order need to be ap-plied at the Court of 1st Instance or with the Justice of Peace ac-cording to the amounts claimed. After examination of the docu-ments the Court being of the opinion that the debt is legally due for payment will issue a Payment Order within 50/60 days (more or less depending on the workload), which is immediately, en-forceable if the debtor does not oppose. The debtor has 15 days after notification of the Payment Order to file his objection. In case of objection the proceeding will be transferred into the ordinary legal procedure.

15.2.4 LawsuitIf sufficient documentation as described above cannot be pro-vided or the payment order could not be sued out the ordinary legal procedure has to be applied at court. The civil proceedings start with filing a writ with the court indicating full identity of the parties, details (description of the goods, prices etc) and legal basis of the claim. If there is no written contract ( e.g. purchase) are present the basis of the claim has to be proved either by wit-nesses or an affidavit. All claims are dealt with by a Chamber of the District Court. In case the claim is less than 80,000 EUR the process is judged by one judge. When the claim amounts are equal to or more than 80,000 EUR the process is judged by three judges.

15.2.5 CostsAll costs depend on the amount of the outstanding principal and are calculated regarding slices. There are different fees, which can apply during a procedure, so there is not only a range re-garding the amount outstanding but also a range regarding the possible fees for each action. This makes it difficult to predict the total costs. In addition to this, costs for witnesses and/or experts might also arise.

15.2.6 Expected TimeframeThe average duration of a payment order process is between 8 and 12 weeks, whereas an ordinary procedure can take up to 12 months or longer depending on the complexity of the case as well as the availability of the judge and the lawyers on all sides. According to experience the ordinary procedure with one judge is faster, the jugement will be delivered in approx 2-4 months.

15.2.7 Interests and Costs in the Legal PhaseAs far as the legal procedure is concerned, interests are claimed according article 293 of the Greek Civil Code and the enforce-ment law number 166/2003 which both define that the rate of interest is calculated according to the rate of interest applied by the European Central Bank accrued by 7 points. The older the debt is, the higher the interest. During the legal procedure, ac-cording to article 423 of the Greek Civil Code, the debtor has the obligation to pay first the legal expenses, then the legal interests and then the capital.

TAB

LE O

F CO

NTE

NTS

GR

EEC

E


15 GREECE


15.3.1 GeneralThe initiation of bankruptcy proceedings is the long-term inabil-ity of the company to meet its overdue financial obligations. Ac-cording to the new Greek Insolvency Code, which came in Sep-tember 2007, the possibility exists to file an application for Article 99 of the Insolvency with the aim to reorganize the company.

15.3.2 ProceedingsThe new Regulation particularly aims at continuation and reor-ganisation of the company’s counterbalance between liquidation of the assets and reorganisation of the debtor company, equal treatment of the creditors and prevention of the insolvency. The Plan is examined by the court within 20 days from its submission. The creditors decide about the acceptance of the plan with a ma-jority of 60% of the claims. In this amount a percentage of 40% representing the privileged claims must be included. The expected dividends for creditors are around 20%. If the Article 99 proce-dure fails (or if the process did not take place at all) the debtor can enter bankruptcy. In order to enter bankruptcy, the debtor must have a financial inability to pay creditors and a permanent incapability of recovering from many debts. The lodging of claims in the insolvency procedure is done by our local lawyers as the procedure is quite complex in Greece and all lodgings have to be made in Greek. The bankruptcy process is quite a lengthy one.

15.3.3 Required Documents77 Copies of invoices signed by the creditor and authenticated

by a Notary Public certifying the signature and confirming that the copy is a true copy of the original remaining unpaid according to company’s official books. The document should bear the Apostil of the Hague Convention. However a certified copy of the invoice is not required if the buyer has accepted a bill of exchange or signed a promissory letter duly stamped

77 Furthermore a witness of the creditor might need to testify before the Court

77 Power of Attorney notarised and stamped with the Apostil of the Hague Convention

15.3.4 Expected Timeframe and OutcomeThe time frame for the completion of the procedure of corporate restructuring cannot be accurately estimated because it has re-cently started being applied but it is likely to be similar to the time frame estimated for the procedure of conciliation. The outcome of the procedure of conciliation and procedure of bankruptcy, it is very poor.

TAB

LE OF CO

NTEN

TSG

REEC

E


15 GREECE

TAB

LE O

F CO

NTE

NTS

GR

EEC

E


16.1 Amicable Phase

16.1.1 General Atradius Collections Hong Kong deals directly with the collection processes, through its experienced and professional debt collec-tors. Hong Kong is a cosmopolitan city with a mix of foreign and local capital companies from large multinationals to small me-dium enterprises. Our collectors are proficient to determine the best strategy with which to pursue payment from many different types of debtors. The legal languages are Chinese and English, with Cantonese as the country’s most widely spoken language, with traditional Chinese the most common written language. All written correspondence is sent to debtors in English. Hong Kong has a small geographical area and our collectors can perform site visits to debtors if the situation requires it. It is not com-mon practice to charge late payment interest during the amicable phase, as debtors usually refuse to pay.

16.1.2 Local AgentWe can use a local agent or LDC to trace the status of the debtor, who will make a site visit possible to debtors if appropriate. A trace report is used to find out all information on the debtor, like are they still trading how many staff do they have in the office? As well as producing a trace report, LDC can also help to collect monies.

16.1.3 InterestThere is no statue regulation governing interest charges. It is freely negotiable between the buyer and the seller, and should be clearly stipulated in the contact.

16.1.4 Debt Collection CostsIn Hong Kong, debt collection costs are not chargeable to debtors unless stipulated in the contract or obtained by the judgement from the court.

16.1.5 PrescriptionThe general prescription period in Hong Kong is 7 years starting from the last payment chasing action date.

16.1.6 Accepted and Most Common Payment MethodsThe most common payment methods are bank transfer and

cheque payment.

16 Hong Kong

GDP (2014 EST.)


7.3 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of iron, steel, coal, cement, chemicals, machinery, vehicles, machine tools, electronics, food and beverages, shipbuilding, textiles




33.28 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSH

ON

G KO

NG


16 HONG KONG


16.1.8 Sources of Information In Hong Kong only the company registration information is made public. No financial information is available. A Credit information agency can provide a company credit report with more informa-tion. This information is from their own sources or can be gath-ered during an interview with the company, so the accuracy of the details cannot be guaranteed.

16.2 Retention of TitleThe use of retention of title is not common in Hong Kong, espe-cially for small and medium enterprises. The ROT clause must be stipulated in any contract otherwise it is difficult to enforce.


16.3.1 GeneralThe Hong Kong legal system uses British Common Law inherited from the United Kingdom when Hong Kong was still a British colony. Once amicable collection is proven to be unsuccessful, we would evaluate the situation thoroughly in order to determine if legal actions are recommended. Legal action in Hong Kong is considered effective and inexpensive. Once our solicitor receives the case, they will serve legal demand letters to the debtor, while also contacting them to establish if there is any chance of settling the matter without starting legal action. If debtor still fails to settle the debt at this stage, legal action will commence.

16.3.2 Legal SystemThere are 3 types of courts in Hong Kong: Small Claims Tribunal, District Court and High Court.

Small Claims Tribunal

Deals quickly, informally and inexpensively with claims not ex-ceeding HK$50,000. Although the Tribunal is a court, the rules and procedures are less strict than in most other courts and no

legal representation is allowed. The filing fee is less than HK$120 depends on the claimed amount.

District Court

This deals with claims not exceeding HK$1,000,000.

High Court

This deals with claims with amounts above HK$1,000,000.

Small Claims Tribunals are not allowed by law to employ any third party, as representatives including solicitors, meaning the claimant should attend the court hearings themselves. For other Courts, legal procedures are commenced by serving a Writ of Summons to the Defendant, who will normally have 14 days to file a defence. A notarised Statement of Claims is required. If the defendant files a defence or request for a payment plan due to financial difficulties, the claimant has 14 days to reply.

If both parties could not enter into a consent, the Judge may call for court hearings before granting a judgement. If the defendant does not respond to the summons before the deadline, the claim-ant may apply for a default judgement. However, if the defend-ant files an opposition to the default judgement after it has been served with a satisfactory explanation, the court may allow the setting aside of the judgement and reactivate the procedures as stated above.

On 1st January 2010, a new Practice Direction on mediation came into effect. It applies to all civil proceedings in the Court of First Instance and the District Court. Mediation is a voluntary process in which a trained, impartial third person or mediator, helps the parties in dispute to reach an amicable settlement that is respon-sive to their needs and acceptable to all side. Parties are strongly encouraged to explore the possibility of mediation before tak-ing their dispute to court. Once a court judgement is obtained in favour of the claimant, we will carefully evaluate what type of enforcement is most effective and favourable to the client.

Sole proprietorship 77 Unlimited liability of owner with business and private funds

Partnership 77 No minimum capital



Limited company (Entrepreneurial company with limited liability)

77 Minimum capital is HK$2

77 Liability limited to company capital

TAB

LE O

F CO

NTE

NTS

HO

NG

KO

NG


16 HONG KONG

16.3.3 Required Documents For the legal procedure we are in need of copies of the contract, invoices and a clear statement of account indicating payments and credit notes, as well as all correspondence between the buyer and the seller.

16.3.4 Interests and Costs in the Legal PhaseLegal costs and interests are chargeable to the defendant, and also depends on the court judgment.

16.4 Enforcement

16.4.1 Enforcement in DebtThe most common types of enforcement include:

Writ of Fieri Facias

77 Appoint Bailiffs to attend the debtor’s registered premises to seize the debtor’s goods for sale.

77 The proceeds of the sale of the goods would be used in part payment of the Judgment debt

77 If a third party claims to own the goods, then the third party may raise an action claiming ownership of the same

Examination Order

77 A verbal interview is conducted with the Director of the debtor firm in order to obtain further information on the financial status of the company

Garnishee Order

77 To seize any monies contained in the debtor’s bank account

77 However, we have to prove that the debtor’s bank account has a credit balance. So this stage of enforcement is always completed after the Examination Order has finished.

Prohibition Order

77 If we suspect that the Directors of the debtor company may leave the country, we may apply for a prohibit order to prevent them leaving Hong Kong. The Immigration Officer will detain the targeted person once we know they intend to depart Hong Kong.

77 Sufficient evidence should be provided in order to grant a Prohibition Order by the court

77 As it can be seen to be a contradiction of the Law of Human Rights, a Prohibition Order is very difficult to be granted

Bankruptcy / Winding-up Petition

77 To wind-up (limited liability company) or bankrupt (unlimited liability company or an individual) the debtor

77 This a relatively costly procedure.

77 As an unsecured creditor, we should carefully evaluate the chance of getting any dividend

16.4.2 Expected TimeframeIt generally takes one to two months.


16.5.1 GeneralThere is only one type of insolvency proceeding in Hong Kong, and no bankruptcy protection in Hong Kong.

16.6 Arbitration and MediationArbitration and mediation are not very common in Hong Kong, and only large companies will include this requirement in their business contract.

TAB

LE OF CO

NTEN

TSH

ON

G KO

NG


16 HONG KONG

TAB

LE O

F CO

NTE

NTS

HO

NG

KO

NG


17.1 Amicable Phase

17.1.1 General Atradius Collections Hungary maintains a professional collection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carries out the col-lection process in-house, contacting both verbally and in writing whilst adhering to federal and state laws. In case of any dispute, we aim to reach an amicable solution between creditor and debt-or. We do this by analyzing all contractual documents (e.g. signed contracts, orders, confirmations, invoices and delivery notes as well as all standard terms that have been agreed upon). All in-vestigations are completed with the assistance and agreement of our legal team. We may decide during the collection process that a personal visit to the debtor would add value, and we are able to do this ourselves in the Budapest area. For other areas we employ an external agent, who works under the strict control of Atradius Collections Hungary at all times. The agents we use will report back on any meetings they have with the debtor, as well as also providing a summary and photos of the debtor’s business operations. Generally our external agents don’t collect any mon-ies directly.

17.1.2 InterestsAtradius Collections Hungary always charges interest to debtors fixed by the Act IV of 1959 on the Civil Code of the Republic of Hungary . From 15th of March 2014, a new Civil Code Act V of 2013 came into effect. The regulation of the interest remains the same. According to the law the interest for late payment shall be calculated by the central bank base rate of the issuing country of the currency (if the invoices are in EUR than the base rate of the European Central Bank) in effect on the first day of the calendar half-year to which it pertains, plus 8%. If a creditor en-quires about a higher interest rate, we can only offer this if it has been confirmed by contractual documents. From a cultural point of view, Hungarian debtors often use the actual amount of the interest payment as matter of negotiation.

17.1.3 Debt Collection CostsThe Directive 2000/35/EC of the European Parliament and the Council has been incorporated into the Hungarian Civil Code since 01/07/2013 according to which we can charge 40 EUR as collections cost to the debtor. Further collection costs are charge-able, but there is no regulation fixed by the local law. The basis of any charges must be proven by contractual documents signed by the debtor. From a cultural point of view, Hungarian debtors are not used to paying debt collection costs and these costs are considered a matter of negotiation.

17 Hungary

GDP (2014 EST.)


-0.5 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of mining, metallurgy, construction materials, processed foods, textiles, chemicals, motor vehicles equipment




63.93 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSH

UN

GA

RY


17 HUNGARY

17.1.4 PrescriptionThe general prescription period in Hungary is 5 years starting from the due date of the claim. Transport claims prescribe within 1 year starting from the delivery according the CMR convention of Geneva. The limitation period can be suspended according to rules of the Hungarian Civil Code by amicable (proved!) collec-tion steps (till 15th of March 2014), the debtor’s acknowledge-ment of the claim or payment agreement, starting the legal or arbitration process and registering the claim in bankruptcy pro-cedure. After the new changes of Hungarian Civil Code came into force from 15th of March 2014, only a legal procedure can stop the prescription.

17.1.5 Accepted and Most Common Payment Methods The most common payment methods are bank transfer and cheque payment.


Egyéni cég (Private company) 77 With only 1 owner, unlimited liability or limited liability with the company capital (no minimum capital)

77 A company without legal entity

Bt. (Betéti Társaság) (Limited partnership) 77 No minimum capital

77 At least one partner is liable non-limited with business and private funds


77 Company without legal entity

Kft. (Korlátolt Felelősségű Társaság) (Company with limited liability)

77 Minimum capital of 500,000 HUF in the form of monies but also assets like cars or company equipment. According to the new Hungarian Civil Code, from 15th of March 2014, Minimum capital will be 3.000.000 HUF. After 15th of March 2014, a new company with limited liability can be established with minimum 3.000.000 HUF capital. Existing companies with less than 3.000.000 HUF capital have to increase their minimum capital by 15th of March 2016 at latest, but if they do any time of modification after 15th of March 2014, they have to increase the capital simultaneously with the first modification.


77 Company with own legal entity

Rt. (Részvénytársaság) (Corporation) 77 Minimum capital 5,000,000 HUF for closed corporation

77 20,000,000 HUF for public corporation divided into shares


77 Company with its own legal entity

TAB

LE O

F CO

NTE

NTS

HU

NG

AR

Y


17 HUNGARY

17.1.7 Sources of Information In Hungary we contact credit reporting agencies to assess the financial situation of debtors, including real estate and other enforceable assets. We combine this with our own phone contacts to get an accurate impression of a debtor’s financial situa-tion and advise on the next step. It depends on the legal form of the debtor, whether we are also able to request information from public registers. All companies have to register with the trade register at a company court, which can be accessed online. We have direct access to this and other company databases that can provide us with additional information on shareholders, historic developments and balance sheets, associated companies and payment experiences. We continuously monitor the solvency of the debtor in case of any insolvency so that we can immediately take action to keep to the legal deadline of lodging the claim.

17.2 Retention of Title Retention of title as a safeguarding measure. To be used to the advantage of any supplier it must be agreed upon prior to deliv-ery in written form. A Retention of Title clause has to be explic-itly written into the contract and signed by both parties before any delivery.

17.3 Safeguarding Measures In case a debtor is not able to satisfy your claim in a speedy manner, we can request the debtor to secure the debt in favour of our client.

In Hungary the following guarantees have the highest importance in the business practice:

77 Acknowledgement of debt, authenticated by a notary and immediately enforceable in case the agreed payment terms are not honoured.

77 Mortgages or assignments of debts or assets

77 Absolute guarantee of debtor’s shareholder(s) and/or associated companies

77 Assignment of debtor’s claim with debtor’s absolute guarantee


17.4.1 GeneralThe modern Hungarian legal system is composed of public law, which regulates relations between citizens and the state; and civil law, which regulates the relations between two people or companies. Entering into a legal procedure is sometimes possi-ble without prior warning to the debtor. However, all courts are trying to mediate between creditor and debtor, and in order to shorten the amicable phase of the legal proceedings, they may ask for proof that all pre-court efforts have not been successful, and will ask to see all prior correspondence in order to reach a fast and final judgment.

17.4.2 Legal SystemThe responsibility of jurisdiction is divided by the matter and/ or by address of the parties, and/or by the amount of the case. Significant changes in the legal system and court responsibilities are valid since 01.01.2012 based on Act CLXI 2011.

17.4.3 Required DocumentsIn order to apply the legal procedure, we require copies of the contract, invoices and statements indicating payments and credit notes, which have been paid against the outstanding monies. In case of a regular lawsuit procedure, copies of all contractual documentation should be available starting with the contract, or-ders, order confirmations, delivery notes and invoices etc. Every step of the relationship between both parties should be provable by documentation. In case of dispute, all notes of conversations between creditor and debtor should be kept and given to our lawyers. In the case of oral negotiations, we are in need of the visit/negotiations reports and names of any witnesses.

17.4.4 Payment Order ProcedureThis procedure has to be submitted to the notary public and the notary public sends it to the debtor. The payment order is en-forceable if the debtor does not appeal within 15 days after re-ceiving the payment order. If a debtor appeals the payment order procedure, it then becomes a regular lawsuit procedure. If the amount of the debt is less than 1.000.000 HUF then the creditor has to start with a payment order procedure.

TAB

LE OF CO

NTEN

TSH

UN

GA

RY


17 HUNGARY

17.4.5 LawsuitThe regular lawsuit procedure is initiated either directly after amicable collection has failed, due to a dispute by the debtor, or follows directly after the legal dunning procedure if the debtor has appealed. A written pre-procedure is usually issued. Both the plaintiff and the defendant must exchange opinions and proofs by letter until the judge believes they have all relevant informa-tion that is needed to make a judgment. In this case a hearing is scheduled during which both parties must be present. After the hearing the judge sets a date to publish the final judgment, and both parties will be informed about the outcome in writing by the court.

17.4.6 AppealAn appeal against the judgment is possible, which will trigger a verdict by the court of second instance.

17.4.7 CostsCourt costs of a payment order process are generally 3% of the claim amount but minimum 5.000 and maximum 300.000 HUF and 6% of the lawsuit debt (but minimum 15.000 and maximum 1.500.000 HUF). Court costs of an appeal on the court judgment are generally 8% of the debt (but minimum 15.000 and maximum 2.500.000 HUF). The minimum and maximum amounts for court costs are determined by law, and enforcement court costs are generally between 1%-3% of the claim amount. Lawyer’s costs are a matter of negotiations based on the court process and its complexity. We can provide our customers with competitive of-fers from external lawyer partners. A cost estimation will be pro-vided on a case-by-case should legal actions become necessary.

17.4.8 Expected TimeframeThe average duration of a legal dunning process is between 30 and 120 days (in cases without an appeal from the debtor), whereas a court procedure can take 1-3 years or longer depend-ing on the complexity of the case and the availability of the judge and the lawyers on both sides.

17.4.9 Interests and Costs in the Legal PhaseOut of court interests and costs can be claimed as part of the outstanding monies during the legal procedure. The successful claiming of the costs is highly dependable on the court and the judge. In all cases the losing party has to bear the costs of the legal procedure. In case of a legal settlement the parties bear the costs of the corresponding proceedings in proportion to their prevailing/failing.

17.5 Enforcement

17.5.1 Enforcement in DebtThe enforcement procedure is executed progressively. The credi-tor/executor can block the bank account of the debtor or request payment from the debtor’s salary from its employer. This type of enforcement requires very specific information like bank account details and the name and address of the debtor’s employer.

17.5.2 Enforcement in Movable GoodsThis is the standard procedure where the bailiff visits the debtor to take away movable goods that can be liquidated in favour of the creditor. The bailiff cannot seize goods which are necessary for the debtor’s basic daily life or that enable them to maintain their business activity.

17.5.3 Enforcement in Immovable GoodsThis is the standard procedure if enforcement is not successful in debt and in movable goods. If the debtor owns a real estate, it is possible to receive a record of the claim in the land register and then either force the attachment and sale or in case there are ten-ants, the sequestration of the real estate by court order.

17.5.4 Expected TimeframeEnforcements into monies are usually the quickest procedures if the debt is covered and all necessary information is available. The expected timeframe is between 3-9 months. The timeframe for enforcements into movable goods and real estate is difficult to es-timate, as it depends on the single course of the case, the available goods, the court, possible banks and of course possible buyers.


17.6.1 GeneralInsolvency proceedings - whether regular insolvency, insolvency plan or individual insolvency are a kind of a collective enforce-ment for all the creditors of one debtor. With the start of the pre-liminary proceedings, all individual enforcements are suspended, and only when the insolvency proceedings will not be started, will individual enforcements continue. In spite of numerous changes of the Insolvency Act XLIX of 1991 the Hungarian in-solvency law still remains ineffective. The number of liquidation procedures shows a continuous yearly growing trend with 2012 over 20,000 recorded cases. The chance of receiving a dividend in liquidation for unsecured creditors - without having any special guarantees - is less than 1%. Bankruptcy procedures (with the aim of reorganization via settlement with the creditors) can still not reach a significant number in Hungary.

TAB

LE O

F CO

NTE

NTS

HU

NG

AR

Y


17 HUNGARY

17.6.2 ProceedingsThe aim of the bankruptcy procedure is to reorganize the debtor company under strict law control via repayment agreements to all creditors that lodged their claim within the 30 days period after the official notification. A liquidation procedure can be ini-tiated by the debtor company itself or by a single creditor. It is mainly an administrational legal procedure, which aims to the liquidation of a company; therefore the initiation of this proce-dure has strict legal requirements and it is only applicable for claims without any prior dispute. A petition has to be filed to the court along with the documents proving the legal base of the claim. If the petition is judged as valid, the court sends an official notice to the debtor to pay the creditor’s claim, otherwise the insolvency will be declared. In case the debtor acknowledges the debt, further payment extension of 45 days can be granted by the court.

If the debtor fails to keep the deadline set by the court or the par-ties could not agree on any settlement to suspend the liquidation procedure, the insolvency will be officially published. The aim of a regular insolvency proceeding is to pay out creditors by liqui-dating the assets of a debtor company. At the end of the process the debtor company will be cancelled from the company register.

After official publication of the insolvency procedure the credi-tors can then lodge their claim within the given deadline and take back any goods delivered under a valid retention of title. For goods on stock, the liquidator can choose whether to pay the original price to the creditor or to return the goods.

The insolvency practitioner can either accept the lodged debt or dispute it. If the claim is disputed, the creditor may only file a claim in court to prove the justification of his claim, if further documentation etc. does not convince the insolvency practition-er to confirm the debt. The registration fee to lodge any claim in liquidation (payable to the competent court) is 1% of the claim amount. If a creditor does not want to lodge the claim within the insolvency procedure and to pay the 1% registration fee, the creditor can request the insolvency practitioner to issue a dec-laration of irrecoverability, which is required by the tax office to write off the claim. The fee for the declaration is 2,000 HUF + VAT (27%). Atradius Collections Hungary can provide its cus-tomers with the monitoring of any potential insolvency in order to be able to lodge the claim within the required term and to represent the creditors in the process.



77 An original power of authority


In case of any dispute raised by the liquidator:





17.6.4 Expected Timeframe and OutcomeThe deadline to lodge a claim in an insolvency procedure is 40 days calculated from the publishing date of the process. The liquidator confirms the registration of the claim after receiving all relevant documentation – the closing balance sheet, analytics, inventory list etc - from the management of the debtor company. In Hungary all creditors are ranked into categories from A to H. Unsecured creditors are ranked in category F and all categories between A-E (e.g. banks, employees, and authorities) have to be paid out in full before an unsecured creditor can get any divi-dend unless a full and final settlement has been agreed with the creditors.

Within 75 days after the publishing of the procedure the insol-vency practitioner has to arrange a creditors’ meeting. The whole duration of a liquidation procedure is between 3 and 7 years. A simplified insolvency procedure takes app. 1-2 years. In this case there are no assets and/or documents which enable the in-solvency practitioner to carry out the insolvency procedure in a regular way.

17.6.5 Limited CompaniesLiability is generally limited to company capital. However, in spe-cial lawsuit procedure, the liability of (even previous) sharehold-ers and management can be judged by the court if any malice can be proved. In the case of such a final court decision (previous) shareholders and management are liable for the insolvency loss-es with their personal assets. Additional consequences of such a court decision is a ban on them holding a shareholder or manage-ment position in another or a new company for 5 years.

TAB

LE OF CO

NTEN

TSH

UN

GA

RY


17 HUNGARY

17.6.6 Non-limited Companies/IndividualsFor Non-limited companies liability is not limited. Any Nonlim-ited shareholder is liable for insolvency losses with their own assets. Individual insolvency does not exist in the Hungarian legislation.

17.6.7 Pool of CreditorsIn insolvency and bankruptcy procedures, creditors can join in a pool agreement, with the aim of representing and protecting the interests of the creditors during the procedure and controlling the activity of the insolvency practitioner.

17.6.8 RescissionThe insolvency practitioner can dispute and claim back payments by the debtor carried out prior to the publishing of the insolven-cy. If the insolvency practitioner disputes these payments with success in a lawsuit procedure, the creditor has to refund them and can only lodge the corresponding debt instead.

17.7 Arbitration and MediationIf the creditor and the debtor agree on an alternative dispute res-olution there are two options available: arbitration or mediation. Arbitration in Hungary is organized by the Chamber of Industry and Commerce (Kereskedelmi és Iparkamara). Agreeing on arbi-tration has advantages compared to a regular legal proceeding; it’s speedier as the courts are less occupied and there is no ap-peal, plus it’s more cost-efficient and the hearing and process is confidential. The decision of the arbitration can be enforced as a final court decision. The other way of solving a dispute is by mediation or conciliation proceedings, which focus on finding the root cause of the dispute in order to find constructive agreements and solutions for both creditor and debtor. Mediation or concili-ations are carried out by professional mediators. There are now more and more attorneys who specialize in mediation. The new agreement is not a judgment but a kind of contract. Mediation activity is regulated by Act LV of 2002.

TAB

LE O

F CO

NTE

NTS

HU

NG

AR

Y


18.1 Amicable Phase

18.1.1 General We have been actively involved in amicable debt collection for the last 20 years. We follow proven principles of negotiations. Keeping a close contact with the debtor, we are able to evaluate genuine cash flow problems and stalling excuses for non-pay-ment. Field visits and face to face meetings with the debtors are an integral part of our collection initiative.

18.1.2 Local AgentWe do have local agents in almost all major cities in India and also in neighbouring countries like Sri Lanka and Bangladesh. Our lo-cal agents are fully equipped to conduct field visits and face to face meetings with the debtors and if necessary they also do skip trace services. Indian Courts generally award interest @ 6% p.a., unless another figure is otherwise agreed between the Creditor and Debtor in an agreement/arrangement clearly specifying the rate of interest to be charged on the overdue amount. It is not customary for the debtors in India to pay interest on the debt amount especially for recoveries in amicable phase. Thus in pre-legal recoveries interest portion is not recoverable.

18.1.4 Debt Collection CostsIt is not customary for the debtors in India to pay collection costs especially in recoveries in the amicable phase. Thus in pre-legal recoveries, collection costs are not payable by the debtors. How-ever Indian Courts while passing a judgment may order the debt-ors to reimburse legal/collection costs to the creditors.

18.1.5 PrescriptionLimitation Act, 1963 governs the period of prescription, the limi-tation period is three years from the due date of an invoice, how-ever the same gets extended for further period of three years on each acknowledgment of the debt by the debtor.

18.1.6 Accepted and Most Common Payment MethodsMost common payment methods include payment by wire trans-fer and payment by drafts/banker’s cheque.

18 India

GDP (2014 EST.)


6.7 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, pharmaceuticals




46.69 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSIN

DIA


18 INDIA

18.1.7 Types of EntitiesThe following are the most common forms of business entities:

77 Sole Proprietorship These types of entities are owned by a sole proprietor. Proprietor of a Sole Proprietorship entity has an unlimited liability to pay to its debtors.

77 Partnership Firm A partnership firm in India is governed by the Partnership Act, 1932. Two or more persons can form a partnership subject to a maximum of 20 members. Partners of the firm have unlimited business liabilities.

77 Limited Liability Partnership (LLP) It is governed by Limited Liability Partnership Act, 2008 and partners of LLP have limited liabilities.

77 Private Limited Company A private limited company is considered as a separate legal entity than its shareholders and a private limited company can be formed with the help of minimum 2 members and the liability of a shareholder is limited to the unpaid value of its share capital.

77 Public Limited Company A public limited company can be formed with the help of minimum 7 members and the liability of its shareholder is also limited to the unpaid value of its share capital.

18.1.8 Sources of InformationTools to investigate the financial situation includes physical searches/enquiry at the location of the debtors, public registers, local sources and news and enquiry from Court.

18.2 Retention of TitleThe retention of title principle is when a negative lien is retained at times, which prohibits the debtor from disposing of or deal-ing with the plant & machinery/goods for which full payment has not been made. Restrictions are also imposed upon the crea-tion of a charge over plant & machinery/goods delivered when payment has not been made on such plant & machinery/goods. A charge over plant & machinery/goods is created and is filed before Registrar of Companies and it is also recommended that retention of title may be specifically stipulated by contract. The local circumstances make it extremely difficult to recover posses-sion of delivered goods for unpaid price and consequently most suppliers insist upon advance payments or letters of credit or other negotiable instruments.

18.3 Safeguarding MeasuresSafeguarding measures include taking an acknowledgment of a debt from the debtor and a promise to pay (it does not require a notarisation). Further a charge/lien on the goods supplied or other assets is another way to safeguard the interest of the sup-plier. Likewise a bank guarantee (of a reputed bank) may also be obtained.


18.4.1 GeneralWhilst we maintain a high success rate with amicable recoveries but if necessary we have the ability to initiate legal action and arrive at a successful conclusion – via the court. Whether or not to initiate legal action and which particular type of proceedings should be initiated depends on the facts of a particular case. In India, legal proceedings are generally protracted in nature and can be initiated immediately after amicable collection fails. There is no need to issue a prior notice before initiating a recovery suit (unless the debtor is a Government organisation), however a prior notice is mandatory for initiating winding up proceedings.

18.4.2 Legal SystemIndia’s judicial system has the Supreme Court of India at the top, it is also the highest Court of India. It is followed by 21 High Courts of respective states with district judges sitting in District Courts and Magistrates of Second Class and Civil Judge (Junior Division) at the bottom of the judicial system’s hierarchy.

18.4.3 Required DocumentsFor proper understanding of a case and for initiating legal action, all supporting documents pertaining to that case are required. We require a Power of Attorney in our favour duly signed and notarised by the creditor. Further documents such as Sales Con-tracts, Purchase Orders, Proforma Invoices, Commercial Invoices, Bills of ladings/Airway Bill, statement of account and the entire correspondence exchanged between the creditor and debtor (let-ters or emails) and any other document(s) which may be relevant for the claim are required. Further considering the facts of the case our lawyers may ask for any other relevant document.

TAB

LE O

F CO

NTE

NTS

IND

IA


18 INDIA

18.4.4 Legal Dunning Procedure A recovery proceeding is instituted before the Court. A recovery suit is filed against a debtor (both in case of a company and an unincorporated entity) in the territorial jurisdiction of a Court in which debtor carries on its business. The prime objective of filing a recovery suit is to recover the debt amount. It is considered to be a protracted proceeding (generally takes minimum 4-8 years for conclusion) and in a recovery suit the representative of credi-tor (supplier) has to appear before the Court few times for deposi-tion. Further a recovery proceeding is more costly than a winding up proceeding as it involves a hefty amount of Court fees which is deposited before the Court and different Courts has different rates of Court fees and is calculated on the basis of claim amount. Further all the supporting documents are to be filed in original.

18.4.5 LawsuitA recovery suit is filed by the creditor before the Court against the debtor for recovery of the debt amount. After preliminary hearing Court issues a notice to the debtor. Debtor appears be-fore the Court and thereafter files a written statement (reply to plaint). Thereafter in an evidence stage, witnesses of both credi-tor and debtor depose before the Court and their cross examina-tion is also carried out. After the evidence stage, the matter is argued and a judgment is passed by the Court. Thereafter the said judgment/ decree is enforced against the debtor. In a wind-ing up proceeding, the Learned Judge after preliminary hearing issues a notice to the debtor company giving them a liberty to file their reply. After completion of pleadings, the Learned Judge hears the arguments and may admit the petition and appoint an Official Liquidator. Thereafter Court directs publication of notice in local newspaper and thereby invites creditors/shareholders of the company to support or object the winding up proceedings to appear before the Court on a fixed date. After such hearing, the Court passes a winding up order. Basically the purpose of wind-ing up proceeding is to wind up a company, however it has been seen that after filing of a winding up petition, debtor’s generally resolve the matter amicably.

18.4.6 AppealA party to the suit who is adversely affected by the decree/order of a Court can file an appeal against that order or judgment in an appellate Court. It is the amount determined by the first Court, which determines the forum of appeal. If the forum of appeal is High Court in that case an appeal is to be filed within 90 days from the date of decree or order. If the forum of appeal is any other Court in that case an appeal is to be filed within 30 days from the date of decree or order

18.4.7 CostsIt is not feasible to give an estimate of legal costs as it depends on many factrs including complexity of case. Legal cost involves, inter alia, the following costs:

77 Court Fees Different Courts have different rates of Court fees and are calculated on the basis of claim amount.

77 Attorney Fees Fees paid to lawyers for handling the matter and for appearing before the Court.

77 Process Serving A nominal fee is paid towards the delivery of the courts’ summons, notices and other such documents to the concerned parties.

77 Drafting Fees paid to lawyers for drafting of plaints, petitions, applications, written statement/ objection, reply, rejoinder and other miscellaneous documents.

77 Publication costs Costs for publication the notices in the newspapers as directed by the Court.

77 Miscellaneous There are other miscellaneous expenses such as costs of notary public, photocopying, stamping fees etc.

18.4.8 Expected TimeframeA recovery suit is protracted in nature and generally takes mini-mum 4-8 years for conclusion. A winding up proceeding gener-ally concludes in 2-4 years

18.4.9 Interests and Costs in the Legal PhaseIt is the discretion of the Judge whether or not to award interest and costs to the creditor, but Courts in India while passing the judgment are empowered to award interest and may also direct the debtor to reimburse legal/collection costs to the creditor.

TAB

LE OF CO

NTEN

TSIN

DIA


18 INDIA

18.5 EnforcementA decree can be enforced by delivery of any property specified in the decree, by attachment and sale, or by sale without at-tachment of any property, by arrest and detention in civil prison of the judgment-debtor, or in such manner as the nature of the relief may require. A decree can by executed by the court which passed it or by the court to whom it is forwarded for execution. A decree can be executed by filing an execution petition before the court. Further, the limitation period for filing an execution petition is 12 years from the date of decree. The estimated time for conclusion of an execution petition is 2-4 years. When the decree-holder makes an application for attachment of movable property belonging to the judgement-debtor, he has to also an-nex with the application, an inventory of the property to be at-tached, containing a reasonably accurate description of the prop-erty. Where an application is made for the attachment of any immovable property of the judgement-debtor, It should contain an accurate description of such property.


18.6.1 GeneralBankruptcy laws in India, especially in case of sick companies is predominantly remedial and ameliorative in so far as it empower the quasi judicial body for this very purpose to make appropriate measures for the revival and rehabilitation of potentially viable sick industrial companies and for liquidation of non viable companies.

18.6.2 Proceedings

Companies in India are governed by the following insolvency and restructuring regimes:

77 Winding-up or liquidation under the Companies Act 1956;

77 Schemes of arrangement or compromise under the

Companies Act; and

77 restructuring of ‘sick’ companies (companies whose accumulated losses are equal to or exceed their net worth) in certain specified industries under the Sick Industrial Companies (Special Provisions) Act 1985.

Winding-up/liquidation is used to realise the debtor’s assets for distribution to its creditors and members. Although the other two methods can be categorised as corporate rescue mechanisms, schemes of arrangement and compromises are primarily designed for internal restructuring and reorganisation of the debtor. While winding-up and schemes of arrangement are carried out under the aegis of the courts, the Board for Industrial and Financial Reconstruction has been set up for the restructuring/rescue of sick companies.

18.6.3 Required DocumentsFor proper understanding of a case and for initiating legal action, all supporting documents pertaining to that case are required. We require a Power of Attorney in our favour duly signed and notarised by the creditor. Further documents such as Sales Con-tracts, Purchase Orders, Proforma Invoices, Commercial Invoices, Bills of ladings/Airway Bill, statement of account and the entire correspondence exchanged between the creditor and debtor (let-ters or emails) and any other documents that may be relevant for the claim are required.

18.6.4 Expected Timeframe and OutcomeA winding up proceedings generally concludes in 2-4 years. Fur-ther rehabilitation of a sick company takes a longer time and in normal course it concludes in minimum 4-5 years, but in case of complex matters and where numerous creditors are involved it has been seen that it may stretch even for 5-7 years. The out-come of these proceedings generally depends upon the assets held by the company and its overall liabilities.

18.6.5 Limited CompaniesSame as point 18.6.2

18.6.6 Unlimited Companies/IndividualsProvincial and Presidential Insolvency Act governs the insolven-cy proceedings for non incorporated entities, it is more prolonged in nature.

18.7 Arbitration and MediationIf a contract between the supplier and the debtor has an arbitra-tion clause in it, then in such a case arbitration proceedings are to be initiated. Arbitration procedures are very similar to court proceedings. The only difference being that there are no hurdles of the strict rules of procedure or law of evidence, yet legally binding. After the claim is filed by the supplier and the debtor files its reply, the arbitrator may ask both the parties to carry out evidence of their witnesses, and then after hearing both the parties decides the case and passes an award. Thereafter award needs to enforced against the debtor. Mediation proceedings are another form of alternative dispute resolution (ADR), it is a way of resolving disputes between two or more parties with concrete effects. Typically, a third party, the mediator, assists the parties to negotiate a settlement. Generally these days, Courts are also referring matters to the Mediator.

TAB

LE O

F CO

NTE

NTS

IND

IA


19.1 Amicable Phase

19.1.1 General Our collectors initially try to collect the debt by a cycle of tel-ephone calls and letters without recourse to legal action. We al-ways try to obtain payment of the debt in full but if required will negotiate with you to agree a payment plan or a settlement figure. In the event that we consider it necessary to escalate be-yond amicable collection we must support this process in Ireland by the issue a Letter before Action, which is the start of the legal process. This is not used in all cases, only those where the col-lector considers that the debtor has the ability to pay and needs some strong evidence of our intentions. If there is no positive response to the Letter before Action and we consider it costs ef-fective to do so, we will reccomend that we issue proceedings in the local court. This has to be done in Ireland by one of our legal partners although Atradiius will continue to be the point of con-tact for the client. It is necessary in Ireland for the solicitor to is-sue an Affidavit of debt to be completed by the claimant and re-turned on headed paper. Once proceedings are issued, the court will decide on whether to uphold the claim and in doing so we are able to apply for a judgement against the debtor. This judgement is published in Stubbs to make the judgment public for those who wish to view it. Once judgment has been awarded, the case will pass to the enforcement officer to pursue. It is worth noting that the court process in Ireland and particularly the enforcement is not a speedy process and can be costly. We will advise you on a case by case basis whether we consider it cost effective to pursue this course of action.

Tracing of debtors in Ireland can also present problems due to the lack of availability of census type information. Where there is a dispute, we aim to reach an amicable solution between creditor and debtor. We do this by analysing all contractual documents (e.g. signed contracts, orders, confirmations, invoices and deliv-ery notes, as well as standard terms previously agreed upon.

19.1.2 Local AgentThere is currently no availability for a field service to visit debt-ors in Ireland.

19 Ireland

GDP (2014 EST.)


5.4 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of pharmaceuticals, chemicals, computer hardware and software, food products, beverages and brewing; medical devices




49.17 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSIR

ELAN

D


19 IRELAND

19.1.3 Interests Late Payments in Commercial Transactions Regulations 2012

The purpose of these Regulations is to give legal effect to Direc-tive 2011/7/EC of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions. That Directive repeals, with effect from 16 March 2013, an earlier Directive from 2000 (Directive 2000/35/EC) on combating late payment in commercial transactions European Communities (Late Payment in Commercial Transactions) (S.I. No. 580 of 2012) which was signed by Minister for Jobs, Enterprise and Innovation, Mr. Richard Bruton, T.D., on 22 December 2012 transposed this Directive and came into effect on 16 March 2013.

The Regulations repeal, with effect from 16 March 2013, the Eu-ropean Communities (Late Payment in Commercial Transactions) Regulations 2002 (S.I. No. 388 of 2002) which transposed Direc-tive 2000/35/EC).

Applicable Interest Rate

The Regulations, which apply equally to the public and private sectors, provide an entitlement to interest if payment for com-mercial transactions is late.

The Regulations provide that unless otherwise specified in an agreed contract, the interest rate will be the European Central Bank main refinancing rate (as at 1 January and 1 July in each year) plus 8 percentage points.

The ECB rates in force on 1 January and 1 July apply for the fol-lowing six months in each year.

Only one rate will apply to a late payment – that is the rate in force on the payment date.

With effect from 1 January 2014 the late payment interest rate is 8.25% per annum (that is based on the ECB rate (as at 1 Jan 2014) of 0.25% plus the margin of 8%). That rate equates to a daily rate of 0.023%. Penalty interest due for late payments should be calculated on a daily basis.

The ECB rate can be checked on the Central Bank and Financial Services Authority of Ireland website www.centralbank.ie.

The main provisions of the revised legislation are:

77 I. Public authorities must pay for the goods and services that they procure within 30 days or, in very exceptional circumstances, within 60 days.

77 II. Enterprises should pay their invoices within 60 days, unless they expressly agree otherwise and if it is not grossly unfair to the creditor.

77 III. Enterprises are automatically entitled, without the necessity of a reminder, to interest for late payments plus compensation costs.

77 IV. The statutory interest rate for late payment is increased

77 V. Enterprises can challenge grossly unfair terms and practices

Source: Department of Jobs, Enterprise and Innovation

19.1.4 Debt Collection Costs As well as interest the supplier may also charge an amount to compensate for the costs of collecting late payments. The amount of compensation that can be claimed is determined by the amount outstanding as follows:

Amount Owed Compensation

Up to EUR 999 ......................................EUR 40 EUR 1,000 to 9,999 .....................EUR 70 EUR 10,000 and over ..................EUR 100

19.1.5 PrescriptionStatute of Limitations 1957

This outlines the time limit within which a creditor can chase a debtor for outstanding debts. Creditors are given a fixed period of 6 years to chase their debtors, which is outlined in the Statute of Limitations 1957, and after this time it is no longer possible to pursue their debt.

19.1.6 Accepted and Most Common Payment MethodsIreland still operates on payment by cheque, although the pre-ferred method is by Bank Transfer. If possible for long running payment plans we will seek Standing Order or Direct Debit but there is natural resistance to this by debtors.

TAB

LE O

F CO

NTE

NTS

IREL

AN

D


19 IRELAND

19.1.7 Types of CompaniesThere are a number of company types and each has its own par-ticular requirements, each of which are listed below. One of the prime reasons why legal actions fail is because clients do not

know the trading style of their debtor. An account opening form is highly recommended in order to support any legal action re-quired at a future time

19.1.8 Sources of InformationLimited Companies must register with the Official Register Com-panies House. Sole traders and partnerships are not required to do so. We are able to use several credit reference agencies in or-der to find out commercial details on Limited companies. In the case of individuals we are primarily reliant upon a trace agent to undertake personal on-line searches and qualify this information by means of calls to neighbours and other businesses.

19.2 Retention of Title There are 2 Types of Retention of Title

Simple and All Monies

77 Simple – title of the goods only passes to the buyer in respect of payment for each invoice relating to those goods

77 All monies – title of the goods only passes when the buyer has paid for all goods supplied

We will advise clients to enforce their retention of title. In the case of all monies the goods must be identifiable and for this reason it is not possible for Atradius Collections to enforce ROT on behalf of our customers, however, we will assist in any way we can.

19.3 Safeguarding Measures Occasionally a debtor will offer a personal guarantee for the debt but it is important to note that this must be legally enforceable.


19.4.1 General The process for litigation in the Republic of Ireland is very similar to that of the UK, however, it is sometimes more lengthy and costly to take action in Ireland. Depending upon whether your debt is insured or un-insured will affect the initial stages of legal action. If your debt is insured and you have complied with all obligations under your policy then in most cases the Credit In-surance will contribute towards legal costs. You will still be con-sulted about the legal action but where a claim has been paid then Credit Insurance will direct such action. If Credit Insurance does not cover your debt then we will require you to agree legal action and costs in writing prior to commencement of litigation. We will also ask you to make payment on account for legal ac-tion, particularly if the case is defended.

Sole trader 77 This is a business run by one individual. They are personally liable for the debt but in order to issue legal proceedings we must first be sure of the identity of the individual, such as name and, if possible date, of birth.

Partnership 77 Business run by at least 2 individuals who have joint and several liability. Again we need to be sure of the correct identity of the individuals in order to pursue them legally. In these businesses each partner is responsible for the debt and can be pursued for the totality.

Limited Company 77 This is a company run by Directorship. We can only pursue the company and not the individuals themselves.

TAB

LE OF CO

NTEN

TSIR

ELAN

D


19 IRELAND

19.4.2 Legal System The process begins with the issue of two 7-day letters, each seeking payment from the debtor prior to formal litigation.

There are 3 levels of court depending upon the value of the debt

77 District Court – up to EUR 6,350

77 Circuit Court – up to EUR 38,093

77 High Court – over EUR 38,093

Should the debtor fail to respond to the 7-day letter, then the so-licitor will issue a Civil Bill to the Court for service on the debtor – this process can take up to 6 – 8 weeks depending on the loca-tion of the court in proximity to the solicitor and the volume of court cases. Once the Civil Bill has been served to the debtor, they can return a Notice of Intention to Defend. This means that the solicitors will seek details of the defence and the case will be referred to the Master for a hearing. The exact route, like the UK court system, depends on the nature and severity of the defence. The debtor is allowed a period of 21 days to respond to the Bill, and if there is no response to the Bill, then an affidavit of debt is issued to the client.

Affidavit of Debt

This is a compulsory document in Ireland and must be signed by an official of the client who has sufficient awareness of the debt. At this time it is also necessary to confirm the exact amount of the debt. The sworn affidavit is returned to the court by the so-licitors and a return date set by the Court, which could be up to 3 months from the submission of the affidavit. The solicitors will then seek judgement and the enforcement procedure will begin once this is issued.


77 Copy invoices

77 Statement of account

77 Delivery documents

77 Account opening form

77 Contractual terms

77 Any correspondence from debtor regarding non-payment of the debt

19.4.4 Costs These will differ greatly depending upon the type of legal action necessary. In any case, our experienced collectors will have a full discussion with you regarding costs and timescales before legal action is commenced. Certain legal costs like some of the court costs can be charged to the debtor. The decision to allocate costs lies with the judge but in most cases approximately 60 – 70% of all costs are charged to the debtor’s account after successful judgement. We offer a highly competitive, fixed tariff for stand-ard cases. Should the case become defended at any time then the solicitor’s costs for dealing are charged at an hourly rate. This depends entirely on the nature of the case and the seniority and experience of the legal advice needed. Costs can range from 150 EUR to 500 EUR per hour. It is not possible at the start of the case to make an exact estimation of costs but it is clear to see that heavily-defended costs can easily equal or in exceed the value of the debt itself. For this reason we will advise on some form of negation and/or mediation.

19.4.5 Expected TimeframeOn average, pre legal actions like the LBA takes 14 days after is-sue. Litigation action takes approximately 12 weeks for a stand-ard case to reach judgement. Sheriff coverage in Ireland is limited and enforcement is often a very prolonged procedure taking as long as 6 to 12 months.

19.4.6 Interests and Costs in the Legal PhaseThe solicitor will continue to add statutory interest and costs to the debt.

19.5 Enforcement

19.5.1 Enforcement in DebtA judgement does not necessarily lead to a successful collection. The enforcement officer will visit the premises to try and col-lect the monies. The normal enforcement procedure is via collec-tion by the Sheriff, but the Judgment itself is also published in Stubbs, a publication that is readily available to all and contains details of all judgments issued.

19.5.2 Enforcement in Movable GoodsIf the debtor is not able to make any payments then the Sheriff can seize goods relating to the business as payment towards the debt through a notification of seizure, followed by the seizure itself. Goods are sold by the Sheriff to realize funds, however, any costs involved in making the sale are deducted from the monies recovered.

TAB

LE O

F CO

NTE

NTS

IREL

AN

D


19 IRELAND

19.5.3 Enforcement in Immovable GoodsIf the debtor owns property then we can apply for a Judgement Mortgage. This means that the property cannot be sold without first discharging the debt. There can be several judgement mort-gages against a single property so it is advisable to check the likelihood of success before incurring additional costs.


19.6.1 GeneralThere are a variety of insolvency types within Ireland, ranging from a Voluntary arrangement offering a fixed percentage pay-out to creditors or administration where an administrator is ap-pointed to try and trade out the company, to liquidation where all assets are liquidated. A company can move between these states and we can best advise on a case-by-case basis. If we establish that your debtor has become insolvent we are able to register your debt with the insolvency practitioner and if it is judged that there will be dividends at some point in the future, we can moni-tor the debtor to claim the dividends when appropriate. How-ever, there is a procedure that operates only in Ireland called an Examinership. It runs for a period of 100 days under the pro-tection of the Court. An Insolvency Practitioner or Liquidator is appointed to review the failing business and make proposals for consideration by creditors. Any proposals agreed by the creditors must then be ratified by the court and the court issues a report agreeing to the same and detailing the amount of any dividend payable.

19.6.2 Required Documents77 Copy invoices

77 Copy orders, order confirmations and delivery notes


19.6.3 Expected Timeframe and OutcomeClaims usually need to be lodged in a formal insolvency within 6 months. The IP will write direct to the client in the first in-stance. Insolvencies can last up to 5 years.

TAB

LE OF CO

NTEN

TSIR

ELAN

D


19 IRELAND

TAB

LE O

F CO

NTE

NTS

IREL

AN

D


20.1 Amicable Phase

20.1.1 General Atradius Collections Italy maintains a professional collection pro-cess, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the collection process in-house, contacting both verbally and in writing whilst adhering to federal and state laws. Where there is a case of dis-pute, we aim to reach an amicable solution between creditor and debtor. We do this by analysing all contractual documents (e.g. signed contracts, orders, confirmations, invoices and delivery notes as well as all standard terms that have been agreed upon). All investigations are completed with the assistance and agree-ment of our legal team.

20.1.2 Local AgentAtradius Collections Italy can assist you with direct collection activity. This is managed by a selected network of local agents, who can visit debtors across the country in order to collect your monies. This solution has proven to be successful for medium to low amounts, for individual sole traders, shops and small compa-nies in particular sectors such as food, textiles, clothes and shoe. The local agents‘ network can also investigate locally in order to search for an untraceable debtor.

20.1.3 InterestAtradius Collections Italy always charges interest to debtors at 8.50% on daily basis (European Directive 2000/35/CEE – D. Lgs. 9th October 2002 n. 231). Interests is always requested at both the amicable judicial phases. From a cultural point of view, Italian debtors very rarely agree to paying late payment interest and it is often used as a negotiation tool between debtors and collectors. Often they tolerate some delays in the payment of the invoices (see particular sectors, such as clothes, shoes and food).

20.1.4 Debt Collection CostsDue to contract laws, the collection convention between Atradius Collections and the creditor must be signed, so that another per-son cannot be linked to the tariff. The law allows us to request collection costs but if we do so without specify the amount, in-cluding the legal tariff of lawyers, it is not seen as valid. There are strong cultural roadblocks against paying for collection costs and we cannot claim them back in court, as there is no jurisprudence for us to do so.

20 Italy

GDP (2014 EST.)


4.8 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of tourism, machinery, iron and steel, chemicals, food processing, textiles, motor vehicles, clothing, footwear, ceramics




46.46 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSITA

LY


20 ITALY

20.1.5 PrescriptionThe prescription period of a credit is 10 years (art. 2946 Civil Code), which can be interrupted by the creditor notifying the debtor about the interruption of the prescription and asking for payment. Once this has been received, the period of prescription would be calculated again. For a shipping contract or contract of carriage, the prescription period is 1 year and for transport contracts from a non-European country, the prescription period is 18 months.

20.1.6 Accepted and Most Common Payment Methods The most common payment methods are bank transfers and cheques. We will also accept drafts issued directly by the debtors, not from a third party.

20.1.7 Types of Companies In Italy there are two main types of companies: partnerships and capital companies.

The partnerships are:

The capital companies are:

For the individual company the owner is a person who has an unlimited liability for the debts incurred in this activity. They are minor entrepreneur, craftsman and farmer.

Società semplice (ss) 77 Non-liability of partners

77 The company has to be registered in the special section of the “Registro delle imprese”

Società in nome collettivo (s.n.c.) 77 Non-limited liability of partners

77 Has to be registered in the ordinary section of the “Registro delle Imprese”

Società in accomandita semplice (S.a.s) 77 Non-limited liability only for the declared Non-limited partner (socio accomandatario)

77 Has to be registered in the ordinary section of the “Registro delle Imprese”

Società a responsabilità limitata (S.r.l.) 77 Minimum capital 10,000.00 EUR

77 Registered at “Registro delle Imprese”

77 Liability limited of partners

Società di capitali (S.p.a.) 77 Minimum capital subscribed 120,000.00 EUR

77 Registered at “Registro delle Imprese”

77 Liability limited of partners

Società in accomandita per azioni (S.a.p.a.) 77 Registered at “Registro delle imprese”

77 Liability limited for partners “accomandanti”

77 Liability unlimited for partners “accomandatari”

TAB

LE O

F CO

NTE

NTS

ITA

LY


20 ITALY

20.1.8 Sources of Information Atradius Collections Italy can evaluate the solvency of a debtor and the financial situation of companies. To investigate in a more accurate way, we can add some extra services for our clients such as bank account research, officially booked goods research such as vehicles, crafts, estates research and estimation in the public registers. All these elements can help to create a clear picture of the debtor’s situation and so we can advise what is the best way to collect your money. In order to trace a debtor, we check the information registered at the Chamber of Commerce, and we can ask for the certificate at the town Council. We can also en-trust the local agents of our network to investigate locally. At the Chamber of Commerce we can obtain all information referring to the company such as the legal form, legal address, names of shareholders and the status of insolvency.

20.2 Safeguarding MeasuresDuring the amicable phase, it is very important that we have the signed acknowledgement of the debt signed by the debtor, be-cause this allows the creditor to obtain the injunction decree with the provisional enforcement reducing. Another possibility is to ask the debtor to issue a title when we agree a payment plan with them. If the title is protested, we can start the legal action and avoid the first phase of the action (injunction decree), so reducing time and costs. We can also obtain a debtor mortgage, registered through a contract with a notary, once we have found out about their real estate.


20.3.1 GeneralAtradius Collections Italy can supply a professional network of experienced law firms in Italy to act in the judicial credit collec-tion activity. This network covers all of the country and is able to manage the legal actions in all Court districts. The lawyer first sends a warning letter (“Lettera Monitoria”) to the debtor by reg-istered letter, so there is proof of delivery. If the debtor doesn’t pay or reply thereby disputing the debt, the judicial phase will start with the injunction decree (decreto ingiuntivo).

20.3.2 Legal SystemThe Italian judicial system adheres to a civil law system. For cred-it collections we refer to the Italian Civil Code (Codice Civile), which contains and implements all the rules of commercial law and Civil Action Code (Codice di procedura Civile) that govern civil trials in Italy. The judicial organisation foresees several kinds of judges, according to the amounts of credit involved (Justice of the Peace, One-Judge-Tribunal, Tribunal). Traditionally, any legal action starts at the Court district of the debtor. The ordinary Civil Action is rarely used to collect credit founded on a written docu-ment, such as an invoice. The proceeding is very long and can last for several years. It is also expensive due the lawyer’s fees, wit-ness examinations and evidence analyses involved in the case. The main purpose of the ordinary Civil Action is to determine the existence of the credit that is due and the relations between par-ties. If the credit is based on documents, the law allows us to use a faster and cheaper procedure called the summary judgement (decreto ingiuntivo) that requires only limited intervention from a judge unless the debtor opposes to the petition. These are the most common ways of collecting credit in Court.


In order to start a legal action, the documents we need are:

77 Readable copy of unpaid invoices

77 Readable copy of transport documents signed by debtor (CMR)

77 If there aren’t CMR signed by debtor, the abstract from Accountancy Book authenticated by a public notary

77 Original power of attorney, enclosed in the petition, signed by the legal representative of the creditor.

TAB

LE OF CO

NTEN

TSITA

LY


20 ITALY

20.3.4 LawsuitThe first phase of the legal action is the Petition of the injunction Decree. This has to be filed in Chancery together with all the en-closed documents as evidence. The judge examines the petition and if he agrees, he issues an Injunction decree. This process can take up to four or five months. The original documents are taken into the Chancery, and an authorised copy is sent to notify the debtor’s last known address within 60 days from the issue of de-cree. When the debtor receives the decree, he has 40 days to op-pose it, and if they file for opposition, the civil trial starts. It is a very long process, as phases required by the Italian Code must be followed so that the Judge can issue the judgement. When there is no opposition raised, the decree becomes executive and the creditor can claim for the attachment of goods from the debtor. The executive seal is added to the decree and the Chancery will issue the Writ of Execution (precetto). Both documents have to be notified to the debtor. The creditor has to start forced execu-tion within 90 days (pignoramento). If the debtor does not pay or oppose the debt within five days from receiving the decree, the lawyer brings in the executive Injunction decree, the order of injunction to pay and proof of notification to a bailiff. If the creditor has unpaid cheques or promissory notes, they can start directly with the Writ of Execution.

If a debtor opposes the Injunction decree or the ‘writ of execu-tion’, the summary judgement is suspended and an ordinary civil action takes place. The creditor has to answer to the opposition with a proper statement of defence (comparsa di costituzione e risposta). During the first hearing, the judge will evaluate the statements of both parties and the documents. He can decide to declare the temporary execution of the injunction opposed (provvisoria esecuzione), and, the summary judgement process will start again with the next steps (writ of execution, attach-ment, etc.) while the civil action takes place in parallel. When the creditor receives a temporary execution from the judge, they have almost won the legal action and the ordinary civil action will end shortly afterwards.

20.3.5 AppealAn appeal against an ordinary civil action can be filed to the Court in the area of jurisdiction where the Judge who issued the judge-ment resides or to the Supreme Court. In case of notification of the judgement, it is possible to file an appeal within 60 days from the notification (short term). If there isn’t the notification of the judgement, the term is 1 year (for the legal actions started before on 04.07.2009) or 6 months (for the legal actions started after on 04.07.2009) from the issue date of the judgement (long term).

20.3.6 CostsAll costs are dependant on the principal amount outstanding and are calculated taking into account amounts kept by each party. There are different fees that can apply during a procedure, which makes it difficult to predict the total costs. In addition to this, costs for witnesses and/or experts might also arise.

20.3.7 Expected TimeframeThe average duration of a legal action in Italy is 18 months, whereas an ordinary civil action can take 2/3 years depending on the complexity of the case.

20.3.8 Interest and Costs in the Legal PhaseThe injunction decree has to mention the amount of the credit to collect, the interest (calculated on the basis D. Lgs. 9th October 2002 n. 231) and the legal fees (calculated on the basis of differ-ent ranges). When the petition is notified to the debtor, they are ordered to pay the total amount mentioned. During the ordinary civil action, the party who loses the judgement is condemned to pay the costs of the legal procedure (art. 91 ss. Civil Action Code).

TAB

LE O

F CO

NTE

NTS

ITA

LY


20 ITALY

20.4 Enforcement

20.4.1 Enforcement in Debt The enforcement in debt requires an act of the creditor to be signed by the bailiff, who will notify the debtor and the third party. This document has to confirm the details oft the creditor and the credit, the list of goods or monies subjected to the en-forcement (the debtor cannot dispose of them), and the domicile election of the creditor in the city of the Court. The enforcement can refer to different types of credit like bank accounts, goods located at a third party and, on the basis of limits fixed by the law, any salary and retirement pension.

20.4.2 Enforcement in Movable Goods

The bailiff visits the debtor at his address to find out if goods can be seized. It is foreseen by the law that:

77 The execution cannot be made against certain goods (unseizable goods)

77 The bailiff can visit the debtor only during the time fixed by the law, i.e. between 07.00 and 21.00

77 The bailiff cannot proceed during holiday periods.

77 The goods that can be taken by the bailiff are money, jewellery, and credits. The other goods must be given to the official receiver.

77 The costs are fixed and they depend on the value of the goods found by the bailiff.

20.4.3 Enforcement in Immovable GoodsBefore proceeding with the enforcement in immovable goods, you should value the debtor’s real estates and how easy it is to proceed because this procedure is very long and very expensive. The enforcement in immovable goods consists of the notification and recording to the debtor of a document that contains the im-movable goods and rights submitted at the execution. After the notification, the bailiff gives the original copy of the document to the land registrar for registration. After 10 days from the execu-tion, the creditor can ask for the sale of the immovable goods.

20.4.4 Expected TimeframeFor the enforcement into movable goods, the duration of the pro-cedure depends on the number of auction sales the Judge feels are necessary to sell the goods. The enforcement in immovable goods is a very expensive and time-consuming measure, often lasting several years. Usually this procedure is used for high amounts, above 100,000.00 EUR only


20.5.1 GeneralOn the basis of the elements required by the law, an insolvency procedure can be started at the Court nearest to the head office of the debtor, following the request filed by the debtor, creditors or the Public Prosecutor (ex officio). The main types of insolven-cy procedures in Italy are bankruptcy (fallimento) and judicial composition with creditors (concordato preventivo).

20.5.2 Proceedings

We can analyse in detail the two main types of the insol-vency procedure:

77 Bankruptcy. In Italy, not all debtors can be declared bankrupt. According to Italian law, small debtors like individual shops and small-scale farmers cannot be declared bankrupt. Neither can small owner-managed firms where the personal work weighs heavier than the value of the goods involved. A creditor can ask for bankruptcy of a debtor if their credit is above 30,000 EUR and the debtor has a turnover of 200,000 EUR minimum. The debtor also should not have been removed from the Chamber of Commerce for more than 1 year. After the check of all petitions filed at the Court within the term fixed, the debt situation will be fixed with a Judge’s sentence and the very long procedure of the liquidation of the bankrupt’s assets can take place.

77 Composition with creditors. To avoid bankruptcy, the debtor can ask the Court directly to be admitted to the insolvency procedure. The debtor’s petition must include how much they can pay to the creditors as a percentage of their debt. This offer has to be approved by the majority of the creditors (considering the amount of each credit) and should then be validated by the Court. After that, the insolvency practitioner starts to liquidate the assets according to the payment plan.


In order to lodge the bankruptcy claim on your behalf we are in need of:

77 Readable copy of unpaid invoices

77 Readable copy of transport documents signed by debtor (CMR)

77 If there aren’t CMR signed by the debtor, the abstract from the Accountancy Book authenticated by a public notary.

For the composition with creditors, we have to communicate to the insolvency practitioner the amount of the credit, and file copies of any documents that prove the credit (copy invoices).

TAB

LE OF CO

NTEN

TSITA

LY


20 ITALY

20.5.4 Expected Timeframe and OutcomeFor the bankruptcy procedure, the petition to lodge to the claim can be:

77 On-time (“tempestiva”). It has to be filed at the Court at least 30 days before the first hearing fixed by the Court and is checked during this hearing

77 Late (“tardiva”). It has to be filed at the Court after the first term fixed but within 12 months of the filing of the enforceability decree for the statement of liabilities.

The average duration of a bankruptcy procedure is 6/7 years.

Regarding the composition of monies with creditors, it is first necessary to communicate the amount of the credit to the in-solvency practitioner and before the hearing is fixed for the creditors, each creditor has to vote (positive or negative) to the proposal after the hearing. After validation by the Court, the in-solvency practitioner can start with the liquidation that will usu-ally take 2/3 years.

20.5.5 Limited CompaniesThe declaration of bankruptcy for a limited company has an ef-fect only for the company and not for individual persons, as they are only responsible for their own goods and real estates.

20.5.6 Non-Limited Companies/IndividualsRegarding Non-Limited companies, the partners are declared bankrupt by the judgement that declares the bankruptcy of the company. The Court proceeds to appoint one Judge and one Trus-tee. On the basis of the criteria foreseen by the article n. 1 L.F., a minor entrepreneur cannot be declared bankrupted.

20.5.7 Pool of CreditorsThe pool of creditors is appointed by the Judge within 30 days of the declaration of bankruptcy. The pool is composed of three to five creditors, who have to represent the quality and quantity of the credits in a balanced way. The pool has to check the activity of the trustee, to authorize the actions and to give advice for the case foreseen by the law or after the request by the Court or the Judge. The decisions have to be agreed by the majority within 15 days of the request.

20.5.8 Rescission

On the basis of the article 67 L.F., there are two groups of payments that can be disputed by the trustee:

77 Some payments made by the debtor to the creditor within one year prior the declaration of the bankruptcy where the creditor proves that he didn’t know the insolvency status of the debtor.

77 Other payments made by the debtor to the creditor within six months prior to the declaration of the bankruptcy. For these cases, the trustee has to prove that the creditor knew the insolvency status of the debtor.

If the trustee disputes the payment and it is one of the payments mentioned by the law, the creditor has to refund it.

20.6 Arbitration and MediationAs well as the ordinary procedure, a creditor and debtor have two other alternatives to solve a dispute:

77 Arbitration (art. 806-840 Civil Action Code). The parties could agree to entrust the dispute to an arbitration hearing. An arbitration clause must be included explicitly in the contract (it mustn’t be presumptive); otherwise the competency of the arbitration may be called into question after the dispute. The arbitration must be convenient for both parties, and be managed by arbitrators that both parties trust and be able to a majority easily. Decisions taken by arbitrators (award) must pass the certification of the Court in order to be effective between the parties. It will always stay a private act, with the same effects as a judgement.

77 Mediation (D. L. n. 28 on 4/03/2010, implementing law n. 60/2009, according to the European Directive n. 2008/52/CE). The target is to drive parties to an agreement. In Italy, mediation was recently indicated by the law as a necessary step for some matters before starting a judgment (“binding mediation”), optional for other kind of matters (“optional mediation”) and necessary during some procedures in accordance with the order of the Judge (“judicial mediation”). Mediation could be a convenient alternative because the whole proceeding should be concluded in 4 months; the costs are lower than an ordinary proceeding, and both parties are directly involved in the search for a satisfactory solution. The agreement issued by the successful mediation is as enforceable as that of a judgement. Arbitration and mediation are managed by specialized organizations, which are more flexible and place the utmost importance on finding possible solutions.

TAB

LE O

F CO

NTE

NTS

ITA

LY


21.1 Amicable Phase

21.1.1 General Atradius Collections Luxembourg maintains a professional collection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the collection process in-house, contacting both orally and in writing whilst adhering to federal and state laws.

21.1.2 Local AgentWhen our in-house collection efforts do not lead to a positive result, we will employ our agent network. They contact debtors to provide us with information regarding the debtor’s financial situation and solvency. The agents we use will report back on any meetings they have with the debtor, as well as also providing a summary of the debtor’s business operations.

21.1.3 InterestsAtradius Collections Luxemburg always charges interest to debt-ors. The applied default rate is 12% except if the interest rate foreseen in client’s sales conditions is higher. In that specific case, we apply the client’s interest rate. From a cultural point of view, the recovery of late payment interest in Luxembourg is quite dif-ficult and is often used as a negotiation tool between debtors and collectors.

21.1.4 Debt Collection Costs

In Luxembourg we charge two types of collection costs:

77 Collection costs according to the European Statute 2011/7/ UE dated 16/02/2011. This is a fixed amount of 40 EUR (regardless of the amount of the debt)

77 A penalty clause of 10% of the principal amount introduced.

21 Luxembourg

GDP (2014 EST.)


7.2 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of banking and financial services, iron and steel, information technology, telecommunications, cargo transportation, food processing, chemicals, metal products, engineering, tyres, glass, aluminium




72.23 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSLU

XEM

BO

UR

G


21 LUXEMBOURG


21.2.1 General Legal actions to recover receivables are based on the general principles according to the Civil Code (Code Civil), the Commer-cial Code (Code de Commerce) and the Judicial Code (Code de Procédure Civile).

There are different courts in Luxembourg, and the competency of each court depends on:

77 The amount of the claim

77 The place of the residence of debtor


The mandatory documents required for a legal action are:

77 Copy of the invoices

77 Copy of the terms and conditions of sale

77 Power of attorney signed by the client

It is also best practice to produce a copy of the contract, proof of orders and delivery of the goods, copies of any formal notices and reminders sent to the debtor, and other written document signed by the debtor in which they acknowledge the claim. In case of dispute, notes of all conversations between the creditor and debtor should be kept and provided to our lawyers.

21.2.3 Legal Dunning ProcedureThe summary procedure in Luxembourg has to be launched by the Justice of the Peace.

This procedure is not always appropriate for the recovery of receivables for the following reasons:

77 The claim must be undisputed

77 The whole claim cannot exceed 10,000 EUR.

77 There are particular formal conditions around the request form you have to fill in, such as proof of the capacity of the person signing for the creditor and the documents you have to produce.

21.2.4 Lawsuit

There are 2 options for a regular lawsuit in Luxembourg:

77 The Summary procedure – this is the quickest and most popular in Luxembourg

77 The Substantive procedure - there is no written intervention here, and may become a problem for disputed cases.

21.2.5 Costs77 Summons and inscription in the Court’s calendar costs approx

250 EUR.

77 Indemnity of procedure is fixed by the court and may vary from case to case. These costs are rechargeable to the debtor, except if the Court decides otherwise.

77 Costs and fees of legal representation costs depend on the importance of the case, and its complexity. They are not chargeable to the debtor.

77 Costs of enforcement depends on the number of actions a bailiff has to take, and are charged to the debtor.

A general cost estimation for cases in Luxembourg is difficult to give but can be provided on a case-by-case basis should legal ac-tion become necessary.

21.2.6 Expected TimeframeThe average duration for the various enforcements is four months but can take longer in the case of dispute or appeal.

21.2.7 Interests and Costs in the Legal PhaseOnce a legal action has started, the applied interest rate is the rate stated in the client’s terms and conditions. However, the Court can reduce or cancel this interest rate if there is no signed acceptance of the terms and conditions by the debtor. A pen-alty clause as stated in the agreed terms and conditions is also claimed. However, the Court can reduce or cancel this interest rate if there is no signed acceptance of the terms and conditions by the debtor. We also claim collection costs according to the European Statute 2011/7/UE dated 16/02/2011. This is a fixed amount of 40 EUR regardless of the size of the debt.

TAB

LE O

F CO

NTE

NTS

LUX

EMB

OU

RG


21 LUXEMBOURG


21.3.1 General

In Luxembourg, there are 3 types of insolvencies:

77 Bankruptcy

77 Compositions

77 Controlled Administration

Each insolvency is validated by the court with the goal of facing a non-payment situation or to allow and facilitate the continuity of some companies ability to trade. At the start of a proceeding, all individual enforcements are suspended.

21.3.2 ProceedingsBankruptcy: Only a debtor with the quality of a merchant can be declared bankrupt in Luxembourg. The Commercial Chamber of the District Court assigns a trustee and each creditor has to lodge their claim to the Clerk of the court within their agreed timeframe. After verification by the trustee, all claims are either accepted or rejected, and the Commercial Chamber of the Dis-trict Court will decide in the case of dispute. Composition: This is a very rarely used procedure. Only a debtor with the qual-ity of a merchant can be granted a composition in Luxembourg. The debtor presents a composition request simultaneously to the Commercial Chamber of the District Court and at the High Court of Justice. The request includes a list of all creditors. Af-ter reviewing the case, the Court will either accept or reject the temporary stay. If the request is accepted, the Court appoints a practitioner and all creditors are invited to Court to give their opinion about the request. A detailed report is then drafted and the Court can only grant a definitive stay to the debtor if the majority of the creditors have agreed. The High Court of Justice determines the duration of the definitive stay.

Controlled Administration: Any merchant, whose credit is weak-ened, can ask the Court to grant them Controlled Administration to reorganise their business or to help liquidate their assets. A request is presented to the Commercial Chamber of the District Court. Once accepted, a judge is appointed to draft a report with-in a court-agreed timeframe. After the submission of this report by the judge, the Court hears the merchant and rejects or accepts the request. If the Court grants the Controlled Administration of the debtor, all their assets are put under the control of a court ap-pointed judge who has to finalise a timeframe fixed by the Court, a detailed plan of reorganisation or liquidation of the assets of the debtor. This plan is communicated to all creditors who have to notify within 15 days, whether they agree or disagree, and will be approved by the court if a majority of creditors approve it.



77 Copy of the invoices

77 Copy of the terms and conditions of sale

77 Statement of account

77 The signed power of attorney (if asked for)

21.3.4 Expected Timeframe and OutcomeThe expected timeframe of insolvencies is different from case-to-case depending on the decision of the court and on the com-plexity of each company. One year is a strict minimum. As far as the outcome is concerned, the chances of recovering a dividend in bankruptcies are very poor (5%). Recovery rates are higher in the Composition and Controlled Administration as a plan is usually proposed by the debtor to all creditors. The amount pro-posed by the debtor will vary in each case.

TAB

LE OF CO

NTEN

TSLU

XEM

BO

UR

G


21 LUXEMBOURG

TAB

LE O

F CO

NTE

NTS

LUX

EMB

OU

RG


22.1 Amicable Phase

22.1.1 General Atradius Collections Mexico maintains a professional collection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the col-lection process in-house, contacting both verbally and in writing whilst adhering to federal and state laws. We do this by analyzing all contractual documents (e.g. signed contracts, orders, confir-mations, invoices and delivery notes as well as all standard terms that have been agreed upon). All investigations are completed with the assistance and agreement of our legal team.

22.1.2 Local AgentSite visits in Mexico City are performed by our professional col-lectors and our local partners who can currently visit 19 of the country’s 31 states.

22.1.3 InterestsAtradius Collections Mexico always charges interest to debtors. If our costumer has previously agreed a specific rate with a debtor will charge that rate; If no interest rate has been agreed current legal rate of 6% per annum is charged. From a cultural point of view Mexican debtors are not used to paying moratorium inter-est on an amicable basis, and often the actual amount of interest is used as a matter of negotiation between debtors and collectors. Payment of interest can be enforced only through a legal process.

22.1.4 Debt Collection CostsIn Mexico debt collection costs can be charged to debtors but there is no specific rate or amount established for this. If the creditor has a special contractual agreement this can be taken into account as long as the debtor actually agreed to the terms. From a cultural point of view Mexican debtors are not used to paying collection costs on an amicable basis, and often the collection costs amount is used as a matter of negotiation between debtors and collectors. From the legal point of view payment of collection costs can be enforced only through a formal legal process.

22.1.5 PrescriptionThe statute of limitations states that the time limit for enforcing commercial transactions in Mexico is one year for retail sales, and ten years for wholesale starting at the end of the year the claim became due. Prescription also depends on the document to be enforced. The time frame to enforce bounced cheques is for six months once it has been rejected by the debtor’s bank due to insufficient funds; cheques should be presented for payment (at the bank) no later than fifteen days starting at the cheque

22 Mexico

GDP (2014 EST.)


2.3 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing, motor vehicles, consumer durables, tourism




49.02 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSM

EXICO


22 MEXICO

payment date, in order an additional penalization of 20% can be claimed. For promissory notes the Statute of Limitations timescale is generally three years after the account is overdue, increasing to four years for international promissory notes in ac-cordance with the United Nations Convention on International Promissory Notes and International Bills of Exchange.

22.1.6 Accepted and Most Common Payment Methods The most common payment methods are bank transfer and cheque payment.


Limited liability Stock Corporation (Sociedad Anónima / SA)

77 This is the most common type of business entity in Mexico.

77 It usually may adopt the form of a fixed capital company (S.A.) or of a variable capital company (S.A. de C. V.). The principal difference between the two is that the latter one can increase or decrease its capital within limits established in the by-laws.

77 The shareholder’s liability is limited to their stock interest in the company and the directors are fully liable for the diligent administration of the company.

77 There must be at least two shareholders and a minimum capital of $ 50,000 (fifty thousand Mexican pesos), of which 20 percent must be paid at the time of incorporation.

77 The shares, which represent the capital stock of the company, are freely transferable and can be traded publicly, after the corresponding filings have taken place.

Limited liability Company (Sociedad de ResponsabilidadLimitada, S. de R.L.)

77 This type of company has the same limited liability as an S.A.

77 This type of company must have at least two partners and no more than 50.

77 The minimum capital is only $ 3,000 pesos of which 50 percent needs to be paid at the time of incorporation and the option of variable capital can be established

Civil enterprise (Sociedad Civil, S.C.) 77 This type of company is used by Professional service providers, such as lawyers and accountants

77 There are no minimum capital requirements.

77 There are no limits on the number of partners in a Civil Enterprise, but each one is jointly and personally liable for obligations and debts.

Branch sucursal 77 Instead of incorporating an entity in Mexico, some companies choose to register their existing foreign company as a branch in Mexico.

77 The branch must registered with the Public Registry of Commerce

77 The foreign company will also be responsible, along with all its assets, for any liabilities that it incurs in Mexico.

Subsidiary (Subsidiario) 77 Unlike a branch, a subsidiary is actually a separate legal entity from the parent company. Establishing a Mexican subsidiary shields the parent company from liability.

TAB

LE O

F CO

NTE

NTS

MEX

ICO


22 MEXICO

22.1.8 Sources of Information In Mexico it is very complicated to obtain a debtor’s financial situation, as private companies are not obliged to publish their fi-nancial statements. We are able to request information from vari-ous public registers; all traders have to be registered at the Public Registry of Commerce in the state where they were incorporated. Information from this office carries an administration fee, which may vary from town to town. At the Public Registry of Com-merce it is possible to get both a company’s incorporation details, as well as details on their real estate and other enforceable assets.

22.2 Retention of TitleMexico has very comprehensive, supplier-focused regulations on Retention of Title, which must be explicitly agreed upon prior to delivery. Most importantly, the debtor must acknowledge the retention of title before receiving their first invoice.

Not many companies include Retention of Title provisions (ROT) in their general trading conditions. There are two different kinds of Retention of Title:

77 Basic ROT: The goods supplied remain the legal property of the supplier until full payment. The supplier can/must get the goods back.

77 Increased ROT: Open account retention. In the course of ongoing business relations, the supplied goods remain the legal property of the supplier until all outstanding amounts from the open account or business relations have been fully paid.

22.3 Safeguarding MeasuresIn case a debtor is not able to satisfy your claim in a speedy manner, we can request the debtor to secure the debt in favour of our client. This can be done amicably and cost effectively by providing an acknowledgement of debt authenticated by a no-tary and immediately enforceable in case the agreed payment terms are not honoured. Corresponding notary costs have to be carried by the customer in the first instance and can be recharged to the debtor later on. Approaches like this have to be evaluated on a case-by-case basis and are dependent on the outstanding principal amount. The debtor is also able to offer other means of security like mortgages, assignment of debts or assets. Contracts must be drawn up for Assignment of debts or assets, while mort-gages have to be registered by a notary.


22.4.1 GeneralThe modern Mexican legal system is composed of public law, which regulates relations between citizens and the state, and civil law, which regulates the relations between two people or companies. Mexico has adopted the use of codes, like the fed-eral Civil Code and the Commercial Code, although each state has adopted its own codes with each area aligned to the Federal laws. In case of any discrepancy the Federal law will override the civil law.

22.4.2 Legal SystemThe structure of the court system in Mexico distinguishes be-tween courts of “ordinary jurisdiction” (including, civil, commer-cial and criminal jurisdiction) and administrative courts or courts of “special jurisdiction”. Courts of ordinary jurisdiction include the federal courts and state courts. At the federal level, the Mexi-can Supreme Court is the highest court and decides the most im-portant cases in the country. Next in authority and significance are the Circuit Courts, which take up cases on appeal and amparo cases. District Courts have jurisdiction over amparo cases in the first instance, and function as courts of ordinary jurisdiction on matters of federal law, such as commercial law cases. State law establishes the structure and function of the courts in each state in Mexico. In general terms, state courts are organized in the fol-lowing manner: the highest appellate court is known as the Su-perior Court of Justice, followed by the Courts of First Instance, which deals with civil hearings, and criminal and commercial cases. Then there are minor courts of special jurisdiction, such as the family courts and bankruptcy courts (unlike in the U.S., where bankruptcy matters fall under the jurisdiction of federal bankruptcy courts). The jurisdiction is divided by the matter of the case and the amount of monies it’s dealing with. Usually, a collection lawsuit should be started at the State court nearest to the debtor’s address, unless both parties had agreed a specific jurisdiction or it was left to the creditor to choose.

TAB

LE OF CO

NTEN

TSM

EXICO


22 MEXICO

22.4.3 Required Documents In order to start an ordinary legal procedure, each step of the relationship between debtor and creditor should be provable by documentation.

Therefore we need the original following documents:

77 Invoices

77 Delivery notes and/or bills of lading

77 A clear statement of account indicating payments

77 Credit notes that have been booked against the outstanding monies

77 A notarized and apostilled power of attorney.

It is worth mentioning that Courts in Mexico do not allow simple or scanned copies in a lawsuit, so original documents are needed. If the documents are not written in Spanish a proper and certified translation of all documents will be required.

Original or certified copies of the following documents may be asked for but are not compulsory:

77 Contract

77 Purchase orders

77 Bills of landing

77 Relevant correspondence between creditor and debtor.

In order to start an executive legal procedure we need either the original promissory note(s) or bounced cheques with a special endorsement wording. No notarized and apostilled Power of at-torney is needed if the lawsuit can be supported either with a promissory note or bounced cheque.

22.4.4 Legal Dunning ProcedureIn Mexico the “Legal dunning procedure” does not exist. How-ever to make a stronger payment request it is acceptable to issue a formal payment request through a Public Notary. Notary fees should be covered by customer and may vary from town to town.

22.4.5 LawsuitThe regular lawsuit procedure is initiated directly after amicable collection has failed due to a dispute by the debtor or because the debtor has ignored payment demands. In Mexico, mediation or arbitral procedures are not used for collection purposes, and a lawsuit can be filed directly.

22.4.6 AppealAn appeal against the judgement is possible, which will trigger a verdict by the court of second instance (Circuit Courts). Only cases of over $240,000 Pesos (Aprox 14,000.00 EUR) can be ap-pealed. In the case of third instance (Amparo), a review request should be made to the District Courts or even the Mexican Su-preme Court, depending on the case jurisdiction and amount.

22.4.7 CostsAll costs are dependant on the amount of the outstanding princi-pal and are calculated taking into account amounts kept by each party. There are different fees that can apply during a procedure, making it difficult to predict the total costs. In addition to this, costs for witnesses and/or experts might also arise. Cost estima-tion will be provided on a case-by-case basis should legal action become necessary.

22.4.8 Expected TimeframeThe average duration of a legal process is between 1 to 3 years depending on the complexity of the case as well as the availabil-ity of the judge and lawyers on all sides. Legal processes started using a promissory note or bounced cheque as a main support can be shorter compared to a process started using as a support due invoices.

22.4.9 Interests and Costs in the Legal PhaseOut of court interest and costs can be claimed as part of the out-standing monies during the legal procedure. If no specific inter-est rate was agreed by the parties, then an annual 6% rate will be applicable. In all cases the losing party has to bear the costs of the legal procedure that have been calculated by the plaintiff. These must be based on the Code of Civil Procedures provisions and can’t be higher than 20% of the claimed amount.

TAB

LE O

F CO

NTE

NTS

MEX

ICO


22 MEXICO

22.5 Enforcement

22.5.1 Enforcement in Debt The creditor can block the bank account of the debtor only if can be proved in court the risk of misappropriation of the funds. However, the difficulty with blocking the debtor’s bank account lies with being able to obtain the debtor’s bank information, as it is not public in Mexico and banks are not obliged to provide it.

22.5.2 Enforcement in Movable GoodsEnforcement can be made once a final judgment is obtained, however through an executive collection procedure movable goods to secure payment of the debt can be appointed at the moment the debtor is served, it is also possible to take the goods away to avoid debtor misuse, but cannot be sold or liquidated until a final judgment is dictated. For ordinary procedures en-forcement can be made until a judgment is obtained.

22.5.3 Enforcement in Immovable Goods

This is the standard and most common procedure in Mex- ico. If the debtor owns real estate, it is possible to receive a recording of the claim in the land register and to then either force:

77 The attachment

77 The attachment and sale

77 In case there are tenants, the sequestration of the real estate by court order.

All of these processes are more expensive than those previously mentioned especially the recording of the claim in the land reg-ister. However, it is the most efficient way to ensure a payment.

22.5.4 Expected TimeframeEnforcements into monies usually take several months. However, once a debtor’s bank account is enforced (blocked) this usually forces the debtor to make a payment offer. The time frame for enforcements into real estate depend very much on the single course of the case, the court, possible banks and, of course pos-sible buyers


22.6.1 GeneralAs per the Commercial Insolvency Law (“CIL”), insolvency pro-ceedings will contemplate both reorganization and liquidation. Reorganization is requested if the entity is declared commercially insolvent. The aim of the insolvency proceedings is to pay out all creditors with the same percentage of the debt by liquidating the company’s assets or by collecting the enforceable incomes.

22.6.2 ProceedingsAfter the debtor or a creditor files for a reorganization or liquida-tion we will be permitted to use the lender’s collateral as agreed upon in the corresponding security agreements. If the entity is declared commercially insolvent the conciliatory stage is acti-vated in order for acknowledged creditors to attempt to reach a Reorganization Agreement. During this stage, the Concilia-tor must prepare a list of creditors and determine the amount, order, and level of preference of their credits. In this stage the Conciliator (appointed by the Federal Institute of Specialists in Bankruptcy) should also coordinate the execution of the Reor-ganization Agreement between the entity and its creditors. The suspension lasts until the conciliation stage is terminated, this is usually within 180 calendar days, which may be extended to an additional 180 days under certain circumstances. During the conciliatory stage the debtor may seek financing as usual, but any new credit and security agreements must be approved by the Conciliator. Administrative enforcement proceedings of tax credits will be suspended, but the competent tax authorities may be willing to take safeguards measures to secure tax credits pay-ments.

Management. During the conciliatory stage the management of the company will remain with to debtor although the Conciliator will supervise the books and all operations, and will decide on the termination of pending contracts. They will also approve with the prior input of the “Interventors” (person appointed by credi-tors with oversight capacity) the contracting of new credits, the establishment or substitution of guaranties and the sale of assets when those are not inherent to the day-to-day running business. Date of Retroaction: This law refers to a concept called “date of retroaction”, (also known in English as the “suspicious period”) which exists to determine if during a previous period acts that may have defrauded creditors were performed or are presumed to have been performed. As a general rule, the date of retroac-tion will be two hundred and seventy (270) calendar days prior to the date of the declaration of commercial insolvency. However, the judge at the request of the Conciliator, the Interventors or any creditor may establish a prior date as the date of retroaction. The Acknowledged Creditors are classified into ranks according to the nature of their credits, and the Commercial Insolvency Law

TAB

LE OF CO

NTEN

TSM

EXICO


22 MEXICO

(“CIL”) contemplates that payment of these credits is made based on their level of preference. No payment may be made to a credit of one rank without previously having liquidated those from the previous ranks, according to the priority established for them.

With regard to Credits with Collateral (Secured Credits), only the following Credits against the Estate will have preference:

77 The Preferential Labour Credits - wages or salaries and accrued benefits for the period of two (2) years prior to the date of declaration of commercial insolvency.

77 Legal fees incurred for the defense or recovery of property subject to guarantee or on which the privilege falls.

77 The necessary expenses for the replacement, conservation and sale of such property subject to guaranty.

77 Credits against the Estate.



77 The original power of attorney properly notarized and apostil

77 Original invoices

77 Original contracts (if exists)

77 Clear copies of orders, confirmations and delivery notes

77 Clear copies of general conditions of sales, should there be any

77 Clear copies of any other correspondence that may verify the claim.

22.6.4 Expected Timeframe and OutcomeThe deadline to lodge claims is 180 days and is activated once the debtor files the reorganization or liquidation request. The whole duration of an insolvency procedure is between 5 and 10 years.

22.6.5 Limited CompaniesLimited companies will file for insolvency for three main reasons. The first one is inability to pay, which does not automatically mean that a buyer’s assets do not cover all debts. Under special circumstances, it could be the case that only the actual liquid-ity does not cover the due debts but in general the company’s expected liquidity would. The second reason is expected inability to pay which means that the management already knows that within a certain timespan the company will be unable to pay the due debts. The third reason is accounting insolvency, which means that buyer’s assets do not cover the debts.

22.7 Arbitration and MediationIf creditor and debtor agree on an alternative dispute solution there are two options available: arbitration or mediation. In me-diation, an unbiased third party known as the mediator assists both parties by conducting private interviews and negotiations to discuss settlement opportunities and facilitate an agreeable solution. In arbitration, disputes are brought before a neutral third party known as the arbitrator who after carefully reviewing all of the relevant information issues a final decision in favour of one of the parties. Both arbitration and mediation must employ a neutral third party and both agreements can be see as binding; both mediation or arbitration fees and expenses should be cov-ered by both parties.

Mexican Commercial Code contains a provision, which regulates arbitration. Mediation is done by professional organisations like the Mexico City National Chamber of Commerce (CANACO) Chambers of Industry and Commerce. The new agreement is not a judgment but a kind of contract.

TAB

LE O

F CO

NTE

NTS

MEX

ICO


23.1 Amicable Phase

23.1.1 General Atradius Collections Netherlands maintains a professional col-lection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the collection process in-house, contacting both verbally and in writ-ing whilst adhering to federal and state laws. We will also visit debtors in person if we feel this would add value, such as agreeing on payment plans. Where there is a case of dispute, we may call on experienced Dutch Legal team of legal collectors, who each have Master’s Degrees in law, to help us. They mainly take a consultative role but may take over the case if the dispute is mainly related to legal aspects. In the event that mediation by legal collectors might not lead to an agreement and legal proceedings are indicated, the file will always be dealt with by the Dutch Legal team.

23.1.2 Local AgentAtradius Collections Netherlands does not offer a general service for visiting debtors through a local agent, but on case level it will always be possible that (legal) collectors visit debtors, whereas debtors are always welcome to visit our office in order to discuss case solutions face to face. However, if the debtor wishes to visit our premises, we will gladly arrange a face-to-face meeting to dis-cuss the situation. We can provide customers with a high qual-ity professional network of experienced lawyers and/or law firms (LDCs) in the Netherlands at very competitive rates. The LDC net-work covers the whole of the Dutch territory and LDCs are able to carry out all legal actions in all District Courts. We can also offer the services of a high-quality network of professional and experienced bailiffs, who are appointed by law to carry out the enforcement of verdicts/judgments.

23.1.3 InterestsAtradius Collections Netherlands always charges debtors with in-terest calculated at 12% per-annum on a daily basis. This percent-age is higher than embodied in the European Directive concerning legal business interests, but is in accordance with clauses in the majority of purchase conditions and/or other business conditions. Interest will always be claimed in both the amicable and judicial phases. In the Netherlands, it is common practice to receive in-terest on overdue invoices and there are rarely discussions as to the liability of the debtor when paying interest. In Court, inter-est payments are considered as a justified demand in relation to overdue accounts. If the creditor is able to prove that business or purchase conditions are applicable, interest can be charged at 12% per annum. In the event that no specific conditions were agreed, it is possible to request the interest according the European Direc-tive, and in the Netherlands the so-called legal business interest rate, which is variable.

23 Netherlands

GDP (2014 EST.)


4.8 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of agroindustries, metal and engineering products, electrical machinery and equipment, chemicals, petroleum, construction, microelectronics, fishing




90.86 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSN

ETHER

LAN

DS


23 NETHERLANDS

23.1.4 Debt Collection Costs In the amicable phase Atradius Collections Netherlands is able to collect the customer’s invoices, interest and to a certain extent collection costs. Debtors are charged an extra 15% collections costs over the principal amount and we are fully focussed on col-lecting costs within the bounds of law and jurisprudence. From a legal point of view the collection costs can only be recovered from the debtor on a scale related to the principal amount, which has been entrusted for collection. If successful in collecting the principal amount, it is possible to recover a certain amount of collection costs from the debtor through legal proceedings. The Court uses a tariff table related to the legal proceedings in or-der to identify what amount of collection costs can be recovered from the debtor. It is a complicated issue in jurisprudence and there is usually just a small amount granted, despite clauses in a written agreement and/or purchase conditions. In fact the judge is free to condemn the debtor to pay collection costs as long as they are considered reasonable, but the granted costs are nor-mally a part of the provision agreed with customers. In 2012 a bill was passed in which is set out the levels of collections costs to be paid by private persons/consumer debtors who are in default. These specific legal collections costs are more or less aligned with jurisprudence. It should be noted that the legal collections costs also apply in the B-2-B segment as long as parties do not agree otherwise. Since legal proceedings concerning collection costs are time consuming and costly for debtors and creditors, we are quite successful in reaching for agreements with debtors in respect to the collections costs.

23.1.5 PrescriptionDutch law has several terms on prescription of the debt, the most common of which relates to commercial (business) claims (pur-chase, rendering services, contracting etc.). For these transac-tions the general prescription term is 5 years, calculated from the due date of the invoice. Prescription can be opposed by regis-tered mail and/or a written announcement through a bailiff, with the effect that a new term of 5 years will commence. It has to be noted that the creditor has to prove that the debtor received the announcement. Exceptions are possible, for example the trans-port sector where shorter terms of prescription of debt are used, according to the CMR-Treaty.

23.1.6 Accepted and Most Common Payment MethodsThe most common payment method is a bank transfer. In inter-national cases a cheque payment can be accepted by Atradius Collections Netherlands.

23.1.7 Types of CompaniesLike most other countries, the Netherlands has two major groups of companies.

The first group are the so-called ‘persons’ companies:

77 Companies with a sole owner (eenmanszaak). The owner is fully liable for debts, as well as their private assets.

77 Companies with several natural persons/partners involved (vennootschap onder firma, or in short VOF). The Partners are fully liable for business funds, and private assets;

77 Companies with a managing and stil partner (commanditaire vennootschap, or in short CV). The Managing partner is fully liable for business funds and private assets, whereas stil partner is only liable for company capital;

77 Companies as professional partnership, partners are natural persons executing a profession (e.g. lawyers, doctors, architects etc.). The Partners are together fully liable for the total business debt and private funds/assets.

The second group are Limited companies or legal person/legal entity from which the most common are:

77 Besloten vennootschap or in short B.V.;

77 Naamloze vennootschap or in short N.V.

For these companies the (managing) directors are not liable with their private assets, unless there is documented proof of mis-management.

23.1.8 Sources of InformationAtradius Collections Netherlands works in close co-operation with experienced information agencies and its network of bailiffs to evaluate the solvency of debtors. Using online checks with public registers, we can gather information about the financial situation of debtors including any officially booked goods, es-tates and other assets. Additional information can be obtained on shareholders, historic (financial) developments and balance sheets. We can decide on a case-by-case level whether to hire a private investigator. Investigating the debtor’s financial situation is useful for determining which legal action might lead to any result in the end.

TAB

LE O

F CO

NTE

NTS

NET

HER

LAN

DS


23 NETHERLANDS

23.2 Retention of Title The Netherlands has a creditor-focussed regulation on Retention of Title (ROT). According to law, a creditor can appeal to the so called “recht van reclame”, which results in a rescission from the contract with the obligation to return the goods to the creditor, also in the situation that the debtor went bankrupt. To appeal to this right the creditor has only a 6-week term calculated from the due date of the invoice. The most common is stipulating a reten-tion of title through a clause in the general purchase conditions. In order to use such a clause to the advantage of the creditor, the specific clause or general conditions must be agreed upon before or, at the latest, at the moment the contract was concluded. The creditor should be able to produce written evidence that the con-ditions were handed over to the debtor, e.g. by means of a line in the order confirmation.

There are two kinds of Retention of Title:

77 Basic ROT: The goods supplied remain the legal property of the supplier until full payment. The supplier can get the goods back whenever there is a payment default.

77 Increased ROT: Open account retention. In the course of ongoing business relations the supplied goods remain the legal property of the supplier until all outstanding amounts from the open account or business relations have been paid fully.

The most common is the open account retention (increased ROT), to be stipulated by contract or a clause in applicable purchase conditions. We note that whenever a debtor is not cooperative in returning goods it will be necessary to go to court in order to get an approval from the judge to take back the goods using a bailiff.

23.3 Safeguarding MeasuresAccording to Dutch law, a petition with the District Courst must be filed before starting a legal procedure so it is possible to seize assets from the debtor. The creditor is obliged to start the legal proceedings within a fortnight after the date of the seizure, or it will be considered expired. Seizures will also expire if the debtor goes bankrupt. Once the creditor has a verdict, the assets seized can be liquidated by a bailiff. During the procedure the debtor is not allowed to do anything with the seized assets. Preservative seizure might also be considered if it is known that a third party has to pay an amount to the debtor and it might be possible to go over to a seizure under this third party, meaning they are not al-lowed to pay the debtor to ensure the funds are available for the creditor. The debtor is also able to offer other means of security like mortgages, assignment of debts or assets, either through a contract or via a notary.


23.4.1 GeneralAll rules concerning commercial private law are codified in the Dutch Civil Code (Burgerlijk Wetboek), whereas rules concern-ing procedures/courts/competencies and so on are dealt with in the Civil Process Code (Wetboek van Burgerlijke Rechtsvorder-ing). Entering into legal procedure is possible without prior for-mal warning to the debtor. However all courts demand evidence that there have been pre-court efforts in order to try to get pay-ment and/or to come to an amicable settlement. During these pre-court efforts an announcement to start legal proceedings is common and should be done.

23.4.2 Legal System

The judicial organisation recognises several kinds of Courts, whereas competencies are, related to the amount or level of the claim. The system includes the following courts:

77 County Court, one judge tribunal (Kantongerecht) ;

77 Tribunal or District Court (Rechtbank) ;

77 Court of Appeal (Gerechtshof) ;

77 Supreme Court (Hoge Raad).

For Collections, it should be noted that for disputed civil claims up to the amount of 25,000 EUR, the Dutch legal collectors can handle the legal procedures themselves in front of the County Court. Beyond this amount, the District Court is deemed as com-petent and the law prescribes an obligatory legal representative or lawyer. We manage these procedures through our LDC net-work, whereas the legal team will monitor the lawyers involved.

TAB

LE OF CO

NTEN

TSN

ETHER

LAN

DS


23 NETHERLANDS

23.4.3 Required Documents In order to apply the legal dunning procedure or filing a petition for bankruptcy, Atradius Collections Netherlands needs copies of the contract, invoices and a clear statement of account.

In case of a regular lawsuit procedures that are normally related to disputed cases, copies of the complete contractual documentation or proof of relationship have to be supplied, such as:

77 Written agreements

77 Order confirmations

77 Purchase conditions

77 Invoices

77 Delivery notes

77 Correspondence

77 Other relevant information/evidence to rebut the dispute

77 Information about witnesses (names, surnames, residences)

77 Description of the dispute

77 Counter arguments from the creditor as towards the dispute.

In case of dispute, all notes of conversations between creditor and debtor via letters and emails that may assist our lawyers should be kept. Every document supporting the claim or thesis to be defended has to be submitted to the court with the writ of summons, as has the names and residences from witnesses in the writ of summons.

23.4.4 Legal Dunning ProcedureThe Netherlands does not have a legal dunning procedure but if the debt is undisputed it is possible to use a very specific legal action in order to press the debtor to payment on a short term. The most effective and least costly procedure is filing a petition for bankruptcy. For this procedure, we need to hand over the file to one of our LDCs, it must be done by a lawyer. The petition is designed to put so much pressure on the debtor that if there are any monies, they will be paid with preference to the creditor that filed the petition. As an alternative, it might be possible to come to a payment plan, as these are also very efficient actions. We usually know within a month whether any monies can be collected.

23.4.5 LawsuitLegal proceedings in the Netherlands are always related to dis-puted matters. For legal proceedings, a written approval from the customer will be sufficient so a formal power of attorney is not necessary. Before starting legal action, collectors investigate the debtor’s financial situation and if it is considered that there are assets that can be taken in the enforcement once a verdict has been received, the file will be handed over to one of the legal col-lectors. The legal collector will then study the case, contact the customer and give them advice how to act further from a legal point of view. If documents are missing or additional evidence needs to be supplied, the legal collector will ask the customer to supply the relevant information. The legal collector can han-dle the procedure for claims up to 25,000.00 EUR and for larger claims the fully documented file will be sent to one of the lawyers (LDCs) in the Atradius Collections Netherlands’ network. Once the summons is completed by either the legal collector or LDC, the debtor will be notified by a bailiff (obligatory) and immedi-ately presented to the Court. In procedures before the County Court debtors can defend themselves, whereas in procedures be-fore the District Court and beyond, they must be representated by a lawyer. Once the writ of defence has been presented, it is usual practice for the Court to direct a personal appearance of all parties and their legal representatives to gather further in-formation about the facts and to try to come to an agreement between them. If no settlement can be concluded the procedure will continue, usually with further written documents, witness statements and the appointment of an expert etc. until the Court has a clear view on all details and can reach a final judgment.

23.4.6 AppealAn appeal against the judgement (the threshold is 1,750.00 EUR) is possible, which will trigger a second verdict by the court of sec-ond instance (local court to district court; district court to court of appeal). In case of third instance, the review will be restricted to a check whether or not statutes were applied correctly. Any later amendment of facts or proof are not permissible.

TAB

LE O

F CO

NTE

NTS

NET

HER

LAN

DS


23 NETHERLANDS

23.4.7 Costs The costs for legal proceedings are firstly related to the amount of the outstanding debt and are determined by the Court follow-ing a complex legislative tariff table using a wide range of calcu-lations. The losing party will be liable for Court costs as well as a legislative fee for procedural assistance according to the tariff table. The fee is related to the number of legal handlings in the procedures and does not take into account the real legal fees. The way the legislative fee is calculated makes it difficult to predict the total costs, as does the complexity of the case, the number of court appearances, and the eventual hearing of witnesses and the appointments of experts have to be taken into account. When-ever legal actions are necessary a cost estimation will be provided on case-by-case level. The difference between legislative fees de-termined by the Court and the legal fees for LDCs and/or our legal collectors will be collected from the customer’s account and cannot be recovered from the debtor. The costs of filing a petition for bankruptcy is approx 1,250 EUR.

23.4.8 Expected TimeframeThe average duration of a regular lawsuit is dependant on what incidents might occur and can vary from about 8 months when there are no specific hearings, up to a minimum of 18 months de-pending on the complexity and hearing all of the witnesses and experts. The availability of the judge and the lawyers on all sides has influence on the timeframe. The timeframe for the outcome of filing a petition for bankruptcy is approx 4-6 weeks.

23.4.9 Interest and Costs in the Legal PhaseAny Interest calculated from the date of the writ of summons, court costs and legal fees can all be claimed as part of the out-standing monies during the legal procedure. In all cases the los-ing party has to bear the costs of the legal procedure. If a claim is granted for a part of the claim, the Court can decide that both parties have to bear costs in proportion to their prevailing or fail-ing of the case. In case of a legal settlement it is common that parties bear their own costs (e.g. lawyers and court fees) of the proceedings.

23.5 Enforcement

23.5.1 Enforcement in DebtIn the Netherlands, only a bailiff is authorized to take care of the enforcement of judgments, within the boundaries of the law. Atradius Collections Netherlands has a network of professional and experienced bailiffs covering the whole country. Based on a judgment a bailiff can seize part of a debtor’s salary, block the bank account of the debtor or their claims against tax offices, life insurances and shares in a business, corporate shares, or any possible claim the debtor may have against any third party. Very specific information, like bank account details, the name and address of the employer and any information about corporate shares or shares in businesses are required for this kind of en-forcement

23.5.2 Enforcement in Movable GoodsThis is the standard procedure where the bailiff visits the debtor to take away movable goods he can liquidate in favour of the creditor. The bailiff cannot seize goods necessary for the debtor’s basic daily life or that enable them to maintain their business activity.

23.5.3 Enforcement in Immovable GoodsIf the debtor owns real estate, it is possible to receive a record of the claim in the land register and to then either force the attach-ment, the attachment and sale or in case there are tenants, the sequestration of the real estate by court order. All of these pro-cesses are more expensive than those mentioned previously, and it can be a long process to get a copy of the record. Afterwards, it can also take time to sell or sequestrate the land and real estate.

23.5.4 Expected TimeframeEnforcements into monies are usually time consuming. In order to receive monies it is often necessary to agree to long-term pay-ment plans. The alternative may be selling goods, which may not always lead a net result. An attachment on salary may receive small instalments of funds, and the total timeframe of an en-forcement can fluctuate from 3 to 24 months.

TAB

LE OF CO

NTEN

TSN

ETHER

LAN

DS


23 NETHERLANDS


23.6.1 GeneralBankruptcy

All debtors can be declared bankrupt at their own request or at the request of just one creditor, provided that evidence is sup-plied to the Court that more than one debt is left unpaid by the debtor. Insolvency proceedings - whether regular insolvency, in-solvency plan or individual insolvency are a kind of a collective enforcement for all the creditors of one debtor. With the verdict of the Court the bankruptcy is established with the result that all proceedings and enforcements (also from a preservative kind) will be suspended. The aim of the insolvency proceedings is to pay out all creditors with the same percentage of the debt by liquidating the assets of a debtor or company or by collecting the enforceable income of an individual who is declared bankrupt

Besides bankruptcies there are two other types of insolvencies:

Suspension of Payment

Companies and/or natural persons who are temporarily in a po-sition where they are not able to pay their debts might file a petition for a suspension of payment. The Court often allows a provisional suspension for a certain period (2 – 6 months), after which the debtor has to submit all records about their financial situation, as well as a plan towards the future and how they will meet obligations towards creditors.

Law Enforced Composition with Creditors for Natural Persons’ Debts (WSNP)

This insolvency procedure is related to natural persons (owners of small shops, farmers etc.) who are personally liable for debts. Dutch Law provides such debtors with the possibility to request to the Court that they be allowed to enter a WSNP. Fulfilling certain obligations towards good faith, the Court can allow such debtors to enter a WSNP by appointing a kind of official receiver, who is monitored by a member of the Court.

23.6.2 ProceedingsBankruptcies

The Court who declared the debtor bankrupt will appoint an of-ficial receiver, as well as a member from the Court who will moni-tor the official receiver. The official receiver will act on behalf of the creditors and can implement several (business) actions with approval of the member of the Court, to liquidate the assets in fa-vour of the creditors. All creditors must lodge their claim with the official receiver and take back any goods delivered under reten-tion of title. For goods in stock, the official receiver can choose whether to pay the original price to the creditor or to return the goods. In case goods will be returned, there might be the request to pay an insolvency contribution varying from 4-9% of the in-voiced value. This contribution has been sanctioned in jurispru-dence but has to be deemed as reasonable. There is no specific deadline for lodging the claim, but it is advised that creditors do so as soon as possible also to prevent goods delivered with reten-tion, from being liquidated. All claims lodged are checked by the official receiver and if agreed are placed on a list of “recognised creditors”. The official receiver may dispute a claim and a specific procedure might follow, but this depends whether there is any dividend for creditors is expected. At the end of the proceeding the official receiver will inform the Court about the settlement or ending of the bankruptcy. Most insolvencies are ended without any dividend for non-privileged creditors. If there is a dividend available it usually will be a small percentage of the debt varying from 1% to 20% of the original claim.

Suspension of Payment

Like in bankruptcy claim, creditors have to lodge their claims with the official receiver. If it’s judged that there are possibilities to reach a positive outcome in the future, including a payment plan for the debts, the suspension will become definitive. It is also possible to come to an agreement with creditors, which then has to be approved by the majority of creditors for each debt and the Court. With a payment plan approved by the Court or a composition the suspension will end. However, many suspen-sions become bankruptcies.

Law Enforced Composition with Creditors for Natural Persons’ Debts (WSNP)

Creditors have to lodge their claims as described above. The of-ficial receiver has to determine in which capacity the debtor has to pay instalments for a period of three years. After this period and, provided that the debtor did meet his obligations as agreed with the official receiver, the total reserved amount will be di-vided amongst creditors in a full and final settlement. It should be noted that if a natural person has been declared bankrupt it often comes – on request from the debtor - to a transfer to the WSNP. Most of the time the creditors will receive just a small percentage of their debts (varying from 1% to 10%).

TAB

LE O

F CO

NTE

NTS

NET

HER

LAN

DS


23 NETHERLANDS


In order to lodge the claim on behalf of customers we do not need an official/original power of attorney, but what is required is at least:



77 Order confirmations and delivery notes

77 Copies of general conditions of sales

23.6.4 Expected Timeframe and OutcomeIn the Netherlands there is no specific deadline to lodge claims, but it is advised to act as soon as possible on acknowledgements of any insolvencies. A bankruptcy procedure normally lasts between 1 and 5 years, depending on the size of the insolvent company and the quantity of assets to be liquidated etc. The du-ration of a suspension of payment also depends on several fac-tors such as the economic outlook etc. and usually last between 2 – 24 months. The total timeframe for law-enforced composition with creditors for natural persons’ debts is normally 3 years.

23.6.5 Limited CompaniesThe main reason for a filing of a petition for bankruptcy at either their own request or on request from creditor(s) is the debtor’s inability to pay, which is supposed to be the case when at least two debts (of a reasonable amount) remain unpaid. Filing a peti-tion for bankruptcy on request of a creditor is normally an ef-ficient action to get payment.

23.6.6 Non-limited Companies/IndividualsFor non-limited companies with personally liable partners or in-dividual debtors, it is not common to request for a bankruptcy themselves. Filing a petition for bankruptcy against these debt-ors on request of creditor(s) is merely used as an efficient collec-tions tool.

23.6.7 Pool of CreditorsIn the Netherlands there is no legislation towards pools of credi-tors. In practice, however, such pools exist on a voluntary ba-sis especially when a bigger company goes bankrupt. A pool of creditors is mainly founded by credit insurance companies and/or the largest creditors, with the aim of accumulating all claims of creditors who delivered goods under the retention of title clause, instruct official receivers to take the appropriate legal action against managing directors if there are grounds for mismanage-ment.

23.6.8 RescissionThe official receiver can dispute any juridical act by the debtor carried out 1 year before the date of the insolvency on a volun-tary basis, and from which the debtor knew or had to know that this would damage the position of creditors. It is assumed that the debtor has this knowledge if the legal act was executed 1 year before the date of the insolvency. If the liquidator disputes these legal acts, which includes payments, the creditor has to indemni-fy the official receiver or refund payments. The creditor can only lodge the corresponding claim/debt instead. If a creditor receives payment the moment they knew that a petition for bankruptcy was already filed against the debtor, the creditor is obliged to refund the monies on request of the liquidator.

23.7 Arbitration and MediationIf creditor and debtor agree on an alternative dispute solution there are two options: arbitration and mediation or conciliation.

Agreeing on a private arbitral tribunal has advantages compared to a regular legal proceeding:

77 It is faster as the courts are less occupied and there are usually no appeals.

77 Generally more cost-efficient.

77 Expertise for certain branches (e.g. contracting, engineering, graphical industry, metal industry etc).

77 Informal way of fact finding, whereas process and hearings are confidential.

77 There is no obligation to be represented by a lawyer (legal collectors from Atradius Collections Netherlands can handle arbitration procedures regardless of the amountt of the outstanding amount).

However agreeing on arbitration also means exclusion of the ju-risdiction of the ordinary courts. The second way of solving a dis-pute is by mediation or conciliation proceedings, which focus on finding the root cause of the dispute in order to find constructive agreements and solutions for both creditor and debtor. Media-tion or conciliations are carried out by professional organisations like the Chambers of Industry and Commerce or by professional mediators. There are now more and more attorneys who special-ize in mediation. Also the legal collectors from Atradius Collec-tions Netherlands often act as mediators in order to try to solve a dispute and create a solution/settlement. The new agreement is not a judgement but a kind of contract.

TAB

LE OF CO

NTEN

TSN

ETHER

LAN

DS


23 NETHERLANDS

TAB

LE O

F CO

NTE

NTS

NET

HER

LAN

DS


24.1 Amicable Phase

24.1.1 General Atradius Collections Denmark maintains a professional collection process in Norway, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the collection process in-house, contacting both verbally and in writing whilst adhering to federal and state laws.

24.1.2 Local AgentAt this time, we do not have the facility to visit debtors in Nor-way, but should this situation change, we will inform you im-mediately. However, if the debtor wishes to visit our premises, we will gladly arrange a face-to-face meeting to discuss the situ-ation.

24.1.3 InterestAtradius Collections always charges interest to debtors calculated from the base rate set by the Norwegian National Bank, plus 10% on a daily basis.



77 To calculate the interest rate according to Norwegian regulation based on the rate fixed by National Bank of Norway (+ 10% p.a.). This rate is fixed twice a year on 1st of January and 1st of July. The second alternative will always occur if the interest rate is not agreed between the creditor and the debtor.

From a cultural point of view, Norwegian debtors are used to paying late payment interests.

24.1.4 Debt Collection CostsIn Norway debt collection costs are chargeable to debtors repre-senting the clients claim for late payment. All costs depend on the amount of the outstanding debt. From a cultural point of view, Norwegian debtors are used to paying debt collection costs.

24 Norway

GDP (2014 EST.)


0.3 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of petroleum and gas, food processing, shipbuilding, pulp and paper products, metals, chemicals, timber, mining, textiles, fishing




70.49 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSN

OR

WAY


24 NORWAY


24.2.1 General

Entering into a legal procedure is only possible with a written notice to the debtor that must include:

77 14 days notice period


77 Specification of the debt (interest date, rate, cost etc.)


The debt needs to be determined to be enforceable. If the debt is undisputed, the Bailiff will issue a payment order, which equals a judgement. If a debtor disputes the debt, the file is assigned for trial handling regardless of the reason or seriousness of the dispute. If a judgement is obtained and the debtor does not pay accordingly, the file will be handed over to the Bailiff’s Court for execution. Wage retention is the toughest measure the enforce-ment office can enforce. This requires the debtor’s employer to withhold a certain portion of their salary, and send the money to the bailiff, who then report the amount to the creditors.

24.2.2 Required DocumentsIn order to apply the legal procedure we are in need of copies of the contract, invoices and a clear statement of account indicat-ing payments and credit notes that have been booked against the outstanding invoices. In case of a regular lawsuit procedure, copies of the complete contractual documentation should be available starting with the contract, orders, confirmations, deliv-ery notes and invoices etc. Every stage of the relationship must be provable by documentation. In case of dispute, all notes of conversations between creditor and debtor via letters and emails that may assist our lawyers should be kept. In the case of oral negotiations, we need reports and names of witnesses and visits to the creditor.

24.2.3 LawsuitThe regular lawsuit procedure is either initiated directly after amicable collection has failed due to a dispute by the debtor, or follows directly after the legal dunning procedure if the debtor has appealed. A written pre-procedure is usually issued. Both the plaintiff and the defendant must exchange opinions and proofs by letter until the judge believes they have all relevant infor-mation needed to make a judgement. In this case a hearing is scheduled during which both parties must be present. After the hearing the judge sets a date to publish the final judgement, and both parties will be informed about the outcome in writing by the court.

24.2.4 CostsAll cost depend on the amount of the outstanding debt. There are different fees that can apply during a legal procedure, which makes it difficult to predict the total costs. In addition to this, costs for witnesses and or experts might also arise. A cost estima-tion can be provided on a case-by-case basis should legal action become necessary.

24.2.5 Expected TimeframeThe average duration of a legal process is up to 12 months or longer depending on the complexity of the case, as well as the availability of the judge and the lawyers on all sides.

24.2.6 Interest and Costs in the Legal PhaseOut of court interests and costs can be claimed as part of the out-standing monies during the legal procedure. Normally the losing party has to bear the costs of the legal procedure if it goes to trial. In the case of a legal settlement the parties normally bear their own costs for court and lawyer’s fees.

TAB

LE O

F CO

NTE

NTS

NO

RW

AY


24 NORWAY


24.3.1 General The aim of the insolvency proceedings is to pay out all creditors with the same percentage of the debt by liquidating the assets of a debtor or company or by collecting the enforceable income of an individual who is declared bankrupt.

Insolvency Procedures in Norway:

77 Enforced Dissolution

77 Reconstruction

77 Bankruptcy

24.3.2 ProceedingsAfter the debtor or a creditor files for insolvency of the debtor, a preliminary liquidator is appointed to check if sufficient assets are available to cover the costs of the proceedings (court costs and costs of the liquidator). If these costs are deemed to be cov-ered, then insolvency proceedings start and a liquidator will be appointed, usually this is the preliminary liquidator. If any other way is followed, the court will reject the declaration of bankrupt-cy due to insufficient assets. The creditors can then lodge their claim and take back any goods delivered under retention of title. For goods on stock, the liquidator can choose whether to pay the original price to the creditor or to return the goods. After the pro-ceeding starts, a claim-lodge is possible within a given deadline.

The liquidator can either accept the lodged debt or dispute it. If the claim is disputed, the creditor may only file a claim in court to prove the justification of his claim, if further documentation etc. does not convince the liquidator to confirm the debt. At the end of the proceeding all creditors with confirmed debts will receive a dividend if there are enough assets in the estate. Often there is no dividend at all.

24.3.3 Required DocumentsIn order to lodge the claim on your behalf in non-disputed claims, we need only copies of invoices.

24.3.4 Expected Timeframe and OutcomeThe expected timeframe for an insolvency estate case in Norway is 1-3 years. Often insolvency estate cases are closed with no dividend at all.

TAB

LE OF CO

NTEN

TSN

OR

WAY


24 NORWAY

TAB

LE O

F CO

NTE

NTS

NO

RW

AY


25.1 Amicable Phase

25.1.1 General Atradius Collections Poland maintains a professional collection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the col-lection process in-house, contacting both verbally and in writing whilst adhering to federal and state laws. Where there is a case of dispute, we aim to reach an amicable solution between creditor and debtor. We do this by analysing all contractual documents (e.g. signed contracts, orders, confirmations, invoices and deliv-ery notes, as well as all standard terms that have been agreed upon). All investigations are completed with the assistance and agreement of our legal team.

25.1.2 Local AgentAtradius Collections Poland offers direct collection activity man-aged by a selected network of local agents who visit debtors all over the country. They can visit debtors at their place of business, and report back on their financial situation. The local agents’ net-work can also help investigate finding an untraceable debtor.

25.1.3 InterestAtradius Collections Poland always charges interest to debtors calculated from the base rate set by: for invoices issued before 27th of April 2014 interests are calculated by the Polish Civil Code (13% per year) and from the date 28th of April 2013 - inter-est rate for late payment of tax (variable, in 2014 t is 10%). The interest is claimed in both the amicable and in judicial phases. Atradius Collections Poland may request the client’s approval re-garding collecting the interest and may ask the client to provide with an ‘Interest Note’ (on debtor’s request). It is often best prac-tice not to ask for interest to be added after the principal amount has been paid in full.

25.1.4 Debt Collection CostsIn Poland debt collection costs can be added for the invoices is-sued after 28th of April 2013 with the amount of 40 EUR.

25.1.5 PrescriptionIn general, a creditor or debt collector gives up their right to col-lect a debt after three years from the due date of the debt. Debts under sale contracts become prescribed within two years and one year for transport invoices. For services that require periodic in-

25 Poland

GDP (2014 EST.)


5.5 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of machine building, iron and steel, coal mining, chemicals, shipbuilding, food processing, glass, beverages, textiles




60.22 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSP

OLA

ND


25 POLAND

voicing, such as rental, telephone and internet agreements, the time period is 3 years. The Polish Civil Code defines that the spe-cific terms of the statute of limitation of debt depends on the type of contract. After the expiration of the statute of limita-tion, the creditor can file against the debtor but the debtor can ask the judge to dismiss the suit on the grounds that the statute of limitation has expired. The prescription period can be inter-rupted if a creditor starts legal procedure or proves written debt acknowledgement.

25.1.6 Accepted and Most Common Payment Methods The most common payment method is bank transfer. We do not offer the direct booking off from debtor accounts.


Jednoosobowa działalność gospodarcza (sole trader/sole proprietorship)


77 SC (spółka cywilna) (Civil law partnership)




SP.J. (spółka jawna) (General partnership)



SP.K (spółka komandytowa) (Limited partnership)


77 At least one partner has unlimited liability with business and private funds


S.K.A. (Spółka komandytowo-akcyjna) private unlimited with share capital

77 Minimum capital 50,000 PLN

77 At least one partner has unlimited liability with business and private funds

SP.P. (Spółka partnerska) (Professional (service) partnership)


77 Partners are independent professionals, such as lawyers, doctors or architects.

SP. Z O.O. (Spółka z ograniczoną odpowiedzialnością) (company with limited liability)

77 Minimum capital 5,000.00 PLN

77 Partners only are liable with company capital

S.A. (Spółka akcyjna) (company on shares)

77 Minimum capital 100,000 PLN divided into shares


TAB

LE O

F CO

NTE

NTS

PO

LAN

D


25 POLAND

25.1.8 Sources of Information In Poland we contact credit reporting agencies to assess the fi-nancial situation of debtors, including real estate and other enforceable assets. We combine this with our own phone contacts to get an accurate impression of a debtor’s financial situation and advise on the next step. It depends on the legal form of the debtor whether we are also able to request information from public registers. All private enterpreneurs have to be registered at the Municipal Trade Offices and can be traced via website: https://prod.ceidg.gov.pl/CEIDG/CEIDG.Public.UI/Search.aspx. All companies with a limited liability have to register with the trade register at a competent court, which can be accessed on-line; https://ems.ms.gov.pl/krs/wyszukiwaniepodmiotu?t:lb=t. We have direct access and can obtain any additional information on shareholders, historic developments and published balance sheets . A debtor with an unknown address can be traced via the Registration of Address office. Private persons are legally obliged to officially un-register when moving from one town to another, and to re-register in their new town. Occasionally some debtors do not follow this procedure and cannot be traced, despite this being a punishable offence.

25.2 Retention of TitleIn Poland, a Retention of Title is applicable to movable goods only. The seller retains ownership of the goods delivered to the buyer until the full purchase price has been paid and it is mainly used for safeguarding installment sale agreements. The retention of title must be stipulated in writing and notarized with a certi-fied date in order to make it insolvency-resistant, so goods to which the title is retained do not become part of the bankrupt’s estate. However, it does not provide protection against acquisi-tion by a third party.

25.3 Safeguarding MeasuresIn case a debtor is not able to satisfy your claim in a speedy man-ner, we can request the debtor to secure the debt in favour of our client. This can be done amicably and cost effectively by provid-ing an acknowledgement of debt authenticated by a notary and immediately enforceable in case the agreed payment terms are not honoured. Corresponding notary costs have to be carried by the debtor. The debtor is also able to offer other means of secu-rity like mortgages, assignment of debts or assets. Contracts must be drawn up for Assignment of debts or assets, while mortgages have to be registered by a notary.


25.4.1 GeneralIt is obligatory to send a written request for payment to the debtor before starting any legal action in court. Where both par-ties in the dispute are conducting business activities, these cases are reviewed by the commercial courts. This kind of legal pro-cedure was established in 2011 to speed up the court’s decision. Some simplified legal procedures can be also run by E-Court in Lublin. Poland was a signatory of European Council Regulation (EC) 805/2004 which allows the creditor to enforce European Enforcement Order (EEO). Atradius Collections provide service of obtaining in Creditors country and enforcement of EEO in debtors country.

25.4.2 Legal SystemThe Polish legal system has two types of court: The Arbitral Court and The Commercial Courts. We can also proceed electronically through the E-court. If there is not the chance for amicable col-lection to take place, we have to send a prejudicial reminder to the debtor before legal action is started, as requested by the court.

Arbitral Court

To proceed in front of the Arbitral Court it is necessary to have a contract/agreement arbitral clause mentioned. This proceeding is expensive but faster. When the judgment is issued the creditor must apply for an enforcement clause before any execution can be started.

Common Court

There are two types of proceedings that go before the Com- mon Court:

77 Injunction Procedure According to the Code of Civil Procedure, a creditor can file an action for writ of payment. Courts can issue the writ of payment without the need for a court hearing if the documents attached to the action include, but are not limited to, the agreement between creditor and debtor concerning payment, the debt is recognized by the debtor, the invoices were accepted by the debtor and have been signed and stamped, and proof from the post office that the invoices were delivered to the debtor. The court can also grant the writ of payment with an attached agreement, proof of fulfillment and delivery to the debtor of an invoice. This procedure is easier and faster for the creditor, as the court will usually issue the writ of payment within one to three months unless the debtor lodges an objection, and the case will then be examined in the ordinary procedure court. It is cheaper for the creditor as the court fee is 1.25% of claim value, and if the debtor appeals they also have to pay the court fee.

TAB

LE OF CO

NTEN

TSP

OLA

ND


25 POLAND

77 Writ proceeding (postępowanie upominawcze) If the Client can provide us only with invoices, proof of delivery/CRM, a statement of account, proof of the debtor’s address and the extract from trade registry (but there is no debt recognised and debtor hasn’t signed invoices) we can proceed with the writ proceedings. The court can also issue writ of payment without a court hearing once it has checked all of the documents. This procedure is more expensive for the creditor (court fee is 5%), and debtor doesn’t have to pay the court fee if they appeal. If there is an appeal, the case is transferred to the common court for an ordinary procedure. 75% of court fee is returned to the Creditor once a decision is reached.

25.4.3 Required Documents77 Any invoices signed by the debtor with proof of the delivery

of the goods, regarding sale transactions, invoices must not be older than 2 years from the invoice due date. We would also like the client to provide us with the document (by post) confirming that the invoice has been delivered to the debtor if possible.

77 Confirmation of the debt signed by the debtor (if it was)

77 Contracts between parties with terms and condition of contracts

77 Order made by the debtor in writing

77 Confirmation of order by the creditor

77 Document confirming disputes

77 Correspondence between parties

77 Fulfilled and signed proof of address (always in attachment) signed by the people entitled to represent the client’s company

77 Current extract from the creditor trade registry which statue person(s) who have the right to represent the creditor’s company and sign the power of attorney

77 Transport documents (CMR, WZ)

In Poland it is possible to start the legal process with copies of documents (the law allows the lawyer who runs this case to sign copies). The crucial point is that the signature of the person or persons on the proof of address is the same as mentioned in the Extract from Client Trade Registry. Without this the court can reject our legal action (for formal reasons).

25.4.4 Legal Dunning ProcedureTo obtain an enforceable judgment, we need to get the court order first and the enforcement clause needs to be applied and served to debtor. The debtor can appeal which would then trans-fer the dunning procedure into a standard lawsuit procedure.

25.4.5 LawsuitThe regular lawsuit procedure is either initiated directly after amicable collection has failed due to a dispute by the debtor, or follows directly after the legal dunning procedure if the debtor has appealed. A written pre-procedure is usually issued. Both the plaintiff and the defendant must exchange opinions and proofs by letter until the judge believes they have all relevant informa-tion needed to make a judgement. In this case a hearing is sched-uled during which both parties must be present. After the hearing the judge sets a date to publish the final judgement, and both par-ties will be informed about the outcome in writing by the court.

25.4.6 Appeal An appeal against the judgement is possible, which will trigger a second verdict by the court of second instance (local court to district court; district court to higher regional court).

25.4.7 Costs A creditor filing an action to court is obliged to pay a court fee. There are three main types of court fees - flat rate fees, propor-tional fees and basic fees - and the type of fee depends on the object of the action. In the case of actions for payment, the credi-tor has to pay the proportional fee, which is 5% in respect of mon-etary suits (not less than PLN 30 and no more than 100000 LN (approx. 7 to 24.000 EUR). The court fee must be paid before filing an action to the court and the proof of payment must be attached to the statement of action. If the case is considered in the proceed-ings for the writ of payment, the fee is 25% of the proportional fee mentioned above, not less than PLN 30 (1.25% of claim value).

Lawyer fees depend on claimed amount (principal amount, without interests):

To 500 PLN ......................................................................... 60 PLN Above 500 PLN to 1,500 PLN .......................................... 180 PLN Above 1,500 PLN to 5,000PLN ........................................ 600 PLN Above 5,000 PLN to 10,000PLN ................................... 1,200 PLN Above 10,000 PLN to 50,000 PLN ................................ 2,400 PLN Above 50,000 PLN to 200,000 PLN .............................. 3,600 PLN Above 200,000 PLN ...................................................... 7,200 PLN

The debtor is always charged back with all the court procedure costs in the sentence.

TAB

LE O

F CO

NTE

NTS

PO

LAN

D


25 POLAND

25.4.8 Expected Timeframe The average duration of a legal dunning process is between 2 weeks and 4 months, whereas a court procedure can take up to 12 months or longer depending on the complexity of the case, if debtor raises any objections.

25.4.9 Interests and Costs in the Legal PhaseOut of court interest can be claimed back as part of the outstand-ing debt during the legal procedure.

25.5 Enforcement

25.5.1 Enforcement in DebtThe bailiff, on behalf of creditor can block the bank account of the debtor and ask for the debtor’s claims against tax offices, life insurances, the debtor’s employer, and shares in a business, cor-porate shares, or any possible claim the debtor may have against any third party. This usually proves very effective, and can save costs when enforced as part of the judgement. Very specific in-formation, like bank account details, the name and address of the employer and any information about corporate shares or shares in businesses are required for this kind of enforcement.

25.5.2 Enforcement in Movable GoodsThis is the standard procedure where the bailiff visits the debtor to take away movable goods he can liquidate in favour of the creditor. The bailiff cannot seize goods necessary for the debtor’s basic daily life or that enable him to maintain his business activ-ity.

25.5.3 Enforcement in Immovable GoodsIf the debtor owns real estate, it is possible to receive a record of the claim in the land register and to then force the attachment and sale. In case there are tenants, the sequestration of the real estate by court order. All of these processes are more expensive than those mentioned previously, and it can be a long process to get a copy of the record. Afterwards, it can also take time to sell or sequestrate the land and real estate.

25.5.4 Expected TimeframeEnforcements for monies generally take 2-3 months. Enforce-ments into movable goods, however, often need five to ten months. The time frame for enforcements into real estate depends very much on the single course of the case, the court, possible banks and, of course possible buyers.


25.6.1 GeneralInsolvency proceedings - whether regular insolvency, insolvency plan or individual insolvency are a kind of a collective enforce-ment for all the creditors of one debtor. With the start of the pre-liminary proceedings, all individual enforcements are suspended, and only when the insolvency proceedings will not be started, will individual enforcements continue. The aim of the insolvency proceedings is to pay out all creditors with the same percentage of the debt by liquidating the assets of a debtor or company or by collecting the enforceable income of an individual who is de-clared bankrupt.

In 2013 Polish Legislation Office began work on the new law, which will multiply various types of insolvencies, will change obligations of Creditors and management of the bankrupt com-pany. The new law will be implemented end of 2014/beginning of 2015.

25.6.2 ProceedingsThere are two major types of insolvency in Poland, insolvency with liquidation of debtor’s assets and insolvency with the pos-sibility of arrangement. Bankruptcy can be announced when the debtor fails to pay debts as they fall due, or when the total amount of the debts exceeds the value of the debtor’s assets. Either Creditors or the debtor may file for bankruptcy of the debtor. Upon completing the list of liabilities, a plan is drawn up for the distribution of debtor’s assets. It specifies the sum to be distributed, the list of all liabilities and the amount due to every creditor. Liabilities are paid in a specific order; tax and other pub-lic duties are paid first, together with employee salaries. Secured Creditors will receive their payments first. The duration of the bankruptcy proceedings depends on many factors, such as the number of creditor and the debtor’s assets and takes at least one year. Instead of liquidation, the bankruptcy proceedings may be finalized by an arrangement between the debtor and their credi-tors. The debtor, under the of a court, is entitled to restructure their debt if there is reasonable doubt that in the near future the debtor will be unable to pay their financial obligations even if they can currently pay their debts. Under this mechanism, the debtor has to prepare a restructuring plan regarding their debt, assets and employees. If the restructuring plan is approved at a meeting of creditors, the debtor will be exempt from the obliga-tion to pay their debts for a period of time, in order to improve their financial situation and to avoid liquidation. Cost of lodging claim by lawyer is 1800PLN (450 EURO).

TAB

LE OF CO

NTEN

TSP

OLA

ND


25 POLAND


In order to lodge the claim on your behalf please provide us with:




77 Copies of orders, o confirmations and delivery notes



77 Extract from trade register of the Client

25.6.4 Expected Timeframe and OutcomeThe deadline to lodge claims is usually 1-3 months. The check for the claim lodge takes place 3-6 months after the deadline for the claim lodge. The whole duration of an insolvency procedure is between 3 and 5 years.

25.6.5 Limited CompaniesLimited companies are obliged to file for insolvency when they have the inability to pay or an expected inability to pay, which means that the management already knows that within a certain time span the company will be unable to pay the due debts.

25.6.6 Non-Limited Companies/IndividualsFor Non-Limited companies or individual debtors, it is not ob-ligatory to declare bankruptcy. Nevertheless, they can declare bankruptcy for the reason of inability to pay or the expected inability to pay. The law for individuals on this was changed in 2010. The costs for the proceeding will be covered by the assets, or the liable persons may request for a respite of the costs.

25.6.7 Pool of Creditors

25.6.8 RescissionThe liquidator can dispute payments by the debtor carried out generally within six months prior to the declaration of bank-ruptcy.

25.7 Arbitration and MediationIf both the creditor and debtor agree on an alternative dispute solution there are two options available: arbitration and media-tion or conciliation. Agreeing on a private tribunal has a number of advantages compared to a regular legal proceeding; it’s speed-ier as the courts are less occupied and there is no appeal, plus it’s more cost-efficient and the hearing and process is confidential. The mediator cannot be asked to be a witness in court either. Although it can shorten the duration of disputes before court, mediation is not very popular in Poland. The main reason for this situation is that mediation has existed in Polish law only from December 2005. Also, the mediator fee was also settled in the Act and for court mediation it is calculated as 1% of claim value but not higher than 1,000 PLN (about 250 EUR). This meant that price is too low to have experts in these proceedings. It is very important that afterwards commercial Court approves the agree-ment resulting from mediation proceedings so that the agree-ment can be treated as the enforcement title.

Arbitration is conducted on the basis of the arbitration clause in contract/terms and condition or agreement with the debtor. Unless any special regulations state otherwise, the parties may submit any disputes for settlement in arbitration, except for ali-mony cases. Submission of a dispute for arbitration requires an agreement of the parties specifying the subject of the dispute or the legal relationship triggering the dispute. The settlement concluded by arbitration court has to be approved by the com-mercial court and then after granting an enforcement clause, can be treated as the enforcement title.

TAB

LE O

F CO

NTE

NTS

PO

LAN

D


26.1 Amicable Phase

26.1.1 GeneralOnce we have tried all the amicable recovery actions; sending letters by mail to the debtor along with a fax, several phone calls and e-mails and we cannot collect the debt within 30 days, we will analyse whether we should file a lawsuit and if we see advis-able, we will send the case to a lawyer.

26.1.2 Local AgentAt this present time we are using our external lawyer’s service for visiting debtors in Portugal, divided into then North and South. However, the debtor can visit our office in Madrid and we are happy to discuss the solution of the case on a face-to-face basis.

Lawyers fees depend on the recovered amount, applying to this one a percentage fixed by contract.

Note we always need the prior acceptance of the client to entrust the case to a lawyer.

26.1.3 InterestIn amicable recovery, it is always difficult to collect costs and interests from debtors. Should these costs be established in the client’s General Conditions of Sale (GCS), we will have a better chance of claiming it. In Portugal in the amicable phase, we can settle an agreement with or without interest, depending on the payment plan in place. In legal proceedings, there is always inter-est to claim. For this 1st semester/14 calculating interest stands at 7.25%.

26.1.4 Debt Collection CostsSome of our clients will issue regular debit notes to their clients for other costs involved with their credit’s late payment that may not be connected to the GCS. If these debit notes are not refused by the debtors, they may be used against those debtors if they contest the validity and fairness of such amounts and practice. Concerning the maximum costs that we can charge in the amica-ble phase, there are no specific limitations to such costs but they are supposed to be reasonable and proportional to the debt size. We usually advise that it is best practice to allow a EUR 40 fee to cover administrative costs.

26 Portugal

GDP (2014 EST.)


5.1 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of textiles, clothing, footwear, wood and cork, paper, chemicals, auto-parts manufacturing, base metals, dairy products, wine and other foods, porcelain and ceramics, glassware, technology, telecommunications; ship construction and refurbishment; tourism




59.88 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSP

OR

TUG

AL


26 PORTUGAL

26.1.5 Prescription

According to Portuguese law, there are two prescription pe-riods regarding the invoices covering the supply of goods:

77 The ordinary delay, which is of 20 years (article 309 of the Civil Code)

77 The delay of 2 years, which is only of application on the traders’ credits resulting from goods sold to non-traders (article 317 of the Civil Code).

26.1.6 Accepted and most Common Payment Methods77 Bank transfer to AC bank account/Clients bank account.

77 Cheque addressed to AC/Client.

26.1.7 Types of Companies77 “Sociedade Anónima” or S.A. – The minimum corporate

capital for these kind of companies is 50.000,00 EUR.

77 “Sociedade por Quotas” or Lda- In this case, the minimum is 5.000,00 EUR.

26.1.8 Sources of InformationIn Portugal we have access to information contained into the CYC database, which includes financial reports and a risk evaluation of Spanish, Portuguese and Brazilian companies. Using infor-mation from these reports, together with our own information (ex. Credit reports), we can get an accurate impression of a debt-or’s financial situation and advise on the next step of the process. The information contained in these reports includes the Official accounts in the last years (with gains and loss) that companies have to present annually, volume of sales, incomes, etc.

Once gathering CYC experience, credit reports with the financial/economic information and the communication provided by cli-ent, we advise next steps writing a final report with a resume of all our efforts. In this moment if the debtor is traced, has a sol-vent company, has assets and if still is open and trading we study the viability of the legal actions as the last resource.

26.2 Retention of TitleAccording to the Portuguese civil code (Art. 409- “Reserva de Dominio”), it is possible to reserve the legal ownership of the goods to the supplier by making depend such ownership from a certain fact (usually, the full payment of the goods in question by incorporating in the contract a retention of title clause.

To be valid, such clause has to be laid down in writing and be expressly accepted by the buyer. If the buyer has not definitely accepted it, the clause may be disputed by the buyer, even at a legal level.

On the other hand, if the contract’s purpose is something subject to a registration (land, real estate), the retention of title clause will also have to be registered to be effectively opposable to third parties.

Legally, we should point out that the seller having sold goods with retention of title is protected against the legal measures, which may come to affect them. Such is the case in the executive or insolvency proceedings.

26.3 Safeguarding MeasuresIn the scope of the negotiations we will always try to obtain a private document signed by debtor recognizing the debt. The document can be signed by a Notary, but normally this is not done due to the high costs for both parties, although it could be carried out in case of high amounts or as per client request. The main objective if the document is signed by the debtor is that can be used in a future legal claim, as proof. Debtors are able to offer another form of security like mortgages, assignment of debt or bank guarantees as well.

TAB

LE O

F CO

NTE

NTS

PO

RTU

GA

L


26 PORTUGAL


26.4.1 GeneralCurrently we are using both the Atradius lawyers as well as CYC lawyers. To establish whether it is advisable to start a procedure, we will evaluate if it’s cost-effective given the amount of the debt compared to the amount of costs and time. We also start to assess the debtor’s solvency and activity, and if a debtor is not trading nor has any asset, it makes no sense to prepare for a possible legal action.


In order to apply the legal procedure we need the required documents:

77 Power of attorney

77 Copies of Invoices

77 CMR or S/L or AWS

77 Original cheques or bills of exchange issued by the debtor

77 Any document signed by the debtor in which they acknowledge the debt.

26.4.3 LawsuitOnce we have decided to start a legal procedure, we will deter-mine which kind of legal procedure would be best to claim the debt.

There are two types:

77 Injunção (simple claim): We normally use this kind of legal procedure for non- disputed debts, as it is faster and less expensive.

77 Acção Declarativa (claim): We normally use this legal procedure when we expect strong opposition from the debtor, and if the court issues a favourable judgment, we can execute with collection costs

In order to start the legal action, we will prepare a draft of the Power of attorney that the client has to sign. A Public Notary’s involvement is not requested in Portugal but needs to be signed by the client and printed on their headed paper.

26.4.4 AppealIn the case a party disagrees with a judgment, they have the right to lodge an appeal to the immediate Superior Court.

The most common appeal in Portugal is “Recurso de Apelação” – 676º Civil Procedure Code) and must be done within 10 days from the notification of the original Judgment.

26.4.5 CostsCosts of the civil law procedure (court costs) are determined by the Court and not subject to any negotiation. All costs depend on the outstanding principal amount and are calculated regarding percentages. There is a range of different fees that can apply dur-ing a procedure dependant on the amount of monies outstand-ing, and a range of fees for each action. This makes it difficult to predict the total costs, and costs for witnesses and experts may also arise. A cost estimation can be provided on a case-by-case should legal action become necessary.

26.4.6 Expected TimeframeA minimum of 6 months - 3 months for giving a summons - is the normal timescale for the procedure, depending on whether or not the debtor is quickly served.

To obtain a final decision from the Portuguese Court could take more than 1 year (it would depend as well on the complexity of the case, availability of the Judge and lawyers strategy).

26.4.7 Interests and Costs in the Legal PhaseIn Portugal in the amicable phase, we can settle an agreement with or without interests, depending on the payment plan in place.

Note as soon as we approach the debtor, we always mention that interests will be added to the amount under recovery. In the scope of negotiations, we apply interests at the legal rate. Sometimes, due to the period over which the debt is to be paid, or bearing in mind the debtor’s difficult financial situation, we waive part of them.

In legal proceedings, there is always interest to claim.

TAB

LE OF CO

NTEN

TSP

OR

TUG

AL


26 PORTUGAL


26.5.1 GeneralWhoever has a credit against a debtor may file for their insol-vency, arguing that the debtor is in a situation not allowing them to pay their overdue obligations (producing the relevant proof afterwards).

To prove the credit against a debtor, the applicant may exhibit invoices, arguing default, unpaid bills of exchange or cheques.

The aim of the insolvency proceeding is to pay out all creditors with the same percentage of debt value by liquidating the assets of the debtor company or collecting the enforceable income of an individual who is declared bankrupt.

26.5.2 ProceedingsDue to the increasing number of insolvencies in Portugal, the State has created a new process that allows a company to recover before entering in definitive insolvency - Special Appeal Process Revitalization (PER) in accordance with article 17-C of the Code Of Insolvency and Corporate Recovery (CIRE).

The debtor has to submit a request to the Court of Justice to establish a PER committing to getting a settlement with its credi-tors to implement measures of financial restructuring and con-solidation, throughout an agreement of payment of its debts, so as to achieve the company financial recovery. From the moment of the official publication of PER, we have 20 days to lodge the credits into the Practitioner.

Concerning Insolvency, once the debtor has applied for it and we know the insolvency procedure’s data, we usually prepare the draft of the writ that our client must complete, sign and send to Practitioner/Court. We send this writ by mail to the client with instructions on how to lodge the credit. We cannot lodge credits on behalf of our clients, as a specific power is required in Portugal to act on behalf of another or company in Insolvency Procedures.

In Portugal steps may take with urgency in order to get clients credit included on the general list of creditors, on time estab-lished by Law (30 days after the official publication in the Official States Bulletin).

Once the Practitioner receives all claims credits, he must present a payment plan that should establish: renegotiation of the prin-cipal with the unsecured creditors; period over which the pay-ments shall be made; support request from the unsecured credi-tors (suppliers), among other matters.

After that, a Creditors’ meeting shall therefore deliberate on keeping the company in business, the liquidation being suspend-ed; the company’s present management to be kept in office; de-manding the debtor to put forward the insolvency plan.

Proceedings will take a very long time and normally creditors do not get paid from this kind of proceedings (if any, could be 40% for approx 7-8 years). Of course, the proposal offered to credi-tors will not start to be paid until 2 years after termination of the legal proceedings, which means that, at the end of day, the total time span could be 10 years.



77 Power of attorney

77 Invoices copies

77 CMR or S/L or AWS

77 Original cheques or bills of exchange issued by the debtor

77 Any document signed by the debtor in which they acknowledge the debt.

26.5.4 Expected Timeframe and OutcomeThe deadline to lodge claims after publication in the Official State Gazette is one month. The whole duration of an insolvency pro-cedure is between 2 and 10 years.

TAB

LE O

F CO

NTE

NTS

PO

RTU

GA

L


27.1 Amicable PhaseAtradius Collections Romania maintains a professional collection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the col-lection process in-house, contacting both verbally and in writing whilst adhering to federal and state laws.

27.1.1 Local AgentWe can employ local agents to make field visits to your debtors in all areas of the country, primarily to assess their business opera-tion and location. They can also negotiate during meetings with debtors, assess their solvency, conduct financial investigations and obtain credit reports. Our agents are based in our Bucharest office and, if necessary will make personal visits at our clients’ request.

27.1.2 InterestAccording to Romanian law, the rate for international contracts is 6%. If a contract has been drawn up between our client and the debtor, we can apply the interest that is stated in the contract.

27.1.3 Debt Collection CostsIn Romania, the chances of receiving collection costs are very low.


27.2.1 GeneralWe apply simplified procedures if the debt is acknowledged by the debtor through signed and stamped invoices and contract. A normal court procedure occurs after we have made the concilia-tion procedure first, requiring more time and higher costs. There are two or three jurisdictional levels, depending on the value of the debt. All parties can appeal one or two times, depending on the value of the debt, which requires one judge at the Court of first instance, and two or three in the case of appeal.

27 Romania

GDP (2014 EST.)


6.6 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of electric machinery and equipment, textiles and footwear, light machinery and auto assembly, mining, timber, construction materials, metallurgy, chemicals, food processing, petroleum refining




63.45 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSR

OM

AN

IA


27 ROMANIA

27.2.2 Required DocumentsWe require originals or certified copies of certain documents, which must be authorized by notary, if the judge’s requests them.

Documents include:







27.2.3 Legal Dunning ProcedureThe legal dunning procedure is only required by law in the pay-ment injunction procedure before filing the application and is used a last approach before starting the procedure.

27.2.4 LawsuitThese are used for urgent procedures and have lower costs. The debt must be acknowledged by the debtor through signed and stamped invoices and a contract. A normal procedure occurs af-ter we have started the conciliation procedure and involves more time and higher costs. Late in 2012, the Civil Code was changed to allow the simplifying and shortening of legal procedures.

27.2.5 AppealThe parties that lose can appeal the entire or part of the decision, and will have to pay half of the court cost of the first instance fee. An appeal is then made at the next level Court.

27.2.6 CostsAn initial LDC fee, all court, translation and transport fees are included in the court fees.

27.2.7 Expected TimeframeMost cases last between one to a few months, depending on its location. Common law procedures last between one to four years. A Payment injunction lasts 45-60 days. Insolvency procedures take anywhere from one to four years and a preventive concor-dat procedure will take 18 months

27.2.8 Interests and Costs in the Legal PhaseIf there is a written contract, foreign law is chosen, it will be enforced, otherwise the legal interest rate of 6% per annum will apply. We always ask for legal costs to be added onto the debtor’s costs.

27.3 EnforcementAn Enforcement Bailiff costs 300-1,000 euro. If a debtor does not pay voluntarily after receiving the judgment sentence from the court, a lawyer will have to file for a new legal procedure. A Forced Execution Proceeding or enforcement, is needed for searching the debtor’s assets or banking accounts, and is per-formed only by a legal executor, which can be an individual per-son or specialized office

27.3.1 Enforcement in Movable GoodsThese are done after a Bailiff evaluation and a local expert’s help.

27.3.2 Enforcement in Immovable GoodsThese are done after a Bailiff evaluation and a local expert’s help.

27.3.3 Expected TimeframeMost procedures last a few months, depending on the assets.

TAB

LE O

F CO

NTE

NTS

RO

MA

NIA


27 ROMANIA


27.4.1 General Facts These are opened at the request of either the debtor or credi-tors. A Judicial Administrator is appointed, who will control the debtor’s activity. The Administrator is guided by the judge.

27.4.2 ProceedingsA creditor can ask for insolvency proceedings to be opened or they can lodge a claim to an already opened insolvency proce-dure. The procedure will be closely monitored by a lawyer and may require the creditor to be present at hearings and creditors’ meetings.

27.4.3 Required DocumentsWe require certified copies, like in a legal procedure

27.4.4 Expected Timeframe and OutcomeInsolvency proceedings usually last about 3 years. If the debtor’s debt is reorganized, then payments can be made to the creditors. If they become bankrupt, then assets are sold and the creditors paid from the proceeds.

27.4.5 Limited Companies77 Will be subject to reorganization or liquidation.

77 Non-Limited companies/individuals

77 There is no legislation in place for individuals yet.

27.4.6 RescissionOnly transfers of debt from up to 3 years before that were made with the intention to defraud the creditors can be cancelled.

27.5 Arbitration and MediationThis process is becoming more popular, and must be done through a lawyer or mediator. Arbitration is usually heard by the Court of Arbitration under the Chamber of Commerce and Industry of Romania. Since 2007, the mediation institution was created and mediators were authorized to work but is still in its early stages in Romania. Arbitral Court procedures are quite expensive.

TAB

LE OF CO

NTEN

TSR

OM

AN

IA


27 ROMANIA

TAB

LE O

F CO

NTE

NTS

RO

MA

NIA


28.1 Amicable Phase

28.1.1 General As professionals in collection we are in a position to provide a first class service and individual treatment and analysis of each case in order to successfully recover the overdue debt.

Collections is marked by:

77 Clear and concise letters to the debtor;

77 Professional phone collectors;

77 Hard but fair and legal approach to the debtor;

77 Follow-up of payment plans;

77 Trace and investigation tools via our Credit information department;

77 Influence on the debtor’s business reputation;

77 In-house case analysis supported by our legal team;

77 Many years experience.

28.1.2 Local AgentAdditionally, we offer an extra service of a meeting with the debtor at their office where the client will be represented by our local lawyers, who will run the negotiations on a case. Taking into account the size of the country, it should be noted that the fee for a visit will include transport and accommodation costs.

28.1.3 InterestsThe business culture is not to pay the interest fee, so it is difficult to achieve and amicable solution and obtain a payment.

If however, an agreement is reached and the debtor is ready to pay the interest fine, as per the currency control and regulations, it is necessary:

77 To sign an additional agreement on the matter of payment of the interests;

77 To confirm these changes in the currency deal passport;

77 To issue an invoice from the creditor in the amount of interest;

77 To reconcile the payment with the debtor’s bank.

28.1.4 Debt Collection CostsThe debt collection costs are not chargeable to debtors in Rus-sia, as there is no such law present for now. So, the payment of debt collection costs depends only on the contractual agreement between the creditor and the debtor.

28 Russia

GDP (2014 EST.)


-1.2 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of mining, coal, oil, gas, chemicals, and metals; machine building; defense industries including radar, missile production, shipbuilding; road and rail transportation equipment; communications equipment; agricultural machinery, construction equipment; electric power generating and transmitting equipment; medical and scientific instruments; consumer durables, textiles




12.48 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSR

USSIA


28 RUSSIA

28.1.5 PrescriptionThe general prescription period in Russia is 3 years. Transport claims are valid for 1 year. Still, the expiry does not prohibit a claimant from bringing a claim to a court, but the respondent may then request the court to dismiss the claim on the basis of the expiry of the limitation period.

28.1.6 Accepted and Most Common Payment Methods The most common payment methods are bank transfers. Cheques are not used that often. Private persons may tend to pay in cash.


There are other legal forms of rare occurrence: ODO Obsh-chestvo s dopolnitelnoy otvetstvennostyu, PK Proizvodstvehhiy

kooperativ, UP Unitarnoe predpriyatie, Polnoe tovarishchestvo, Toverishchestvo na vere.

28.1.8 Sources of Information We can supply you with the relevant information regarding the creditworthiness and actual state of the debtor. As we are pro fessionals in credit information, our and our local agent’s are highly skilled in Russia covering most remote places, we can pro-vide you with information you need, according to the interna-tional standards. Our information is derived from a variety of sources, including commercial and other registers, public listings and press. We confirm it by our own analysis and research.

A standard credit report contains the following data:

77 Complete registration data and the company’s history;

77 Offices addresses, telephone and fax numbers, e-mail addresses

77 Business activities, products/services provided, trademarks;

77 Import and export data, main suppliers and clients;

77 Information about the shareholders and administration

77 Data on subsidiaries and affiliated companies

77 Last year balance sheet and profit and loss account, bankers

77 Negative information, legal claims, current debts

77 Creditworthiness and credit recommendation

The information sources

Official data:

77 State registers,

77 Federal Statistics Board,

77 Courts.

Secondary sources:

77 Mass-media,

77 Internet,

77 Accessible databases.

77 Directly from the company reported.

Business Ethics precludes the disclosure of the name of our cli-ent, who has ordered the report.

OOO Obshchestvo s Ogranichennoy Otvetstvennostyu (limited liability company)

77 Minimum capital currently is 10,000 RUB;

77 Company is liable for its debts by its whole property;

77 Owners/Shareholders bear the risk of loss at amount of their shares ;

77 OOO is the most popular legal form in RF (about 80% of all registered commercial organization). It is used mainly for small and average business.

ZAO Zakrytoe Aktsionernoe Obshchestvo (Private joint-stock company)

77 Minimum capital currently is 10,000 RUB;

77 Company is liable for its debts by its whole property.

77 Owners/Shareholders bear the risk of loss at amount of their shares.

OAO - Otkrytoe Aktsionernoe Obshchestvo (Public Joint-Stock Company)

77 Minimum capital currently is 100,000 RUB

77 Company is liable for its debts by its whole property.

77 Owners/Shareholders bear the risk of loss at amount of their shares.

TAB

LE O

F CO

NTE

NTS

RU

SSIA


28 RUSSIA

28.2. Legal Procedures

28.2.1 General The Russian legal system is composed of the civil law, which reg-ulates the relations between two people or companies. Entering into a legal procedure is possible without prior warning to the debtor. The letter about possibility of legal actions can be sent to the debtor as the last and final reminder in the end of amica-ble collection and such a letter can be used as the prove that all pre-court efforts were fruitless, however, presence of such let-ter doesn’t guarantee that the court`s decision will be received faster.

28.2.2 Legal System

The jurisdiction is divided in accordance with the condi-tions of the contract:

77 The Arbitrage court - which solves the disputes between companies – has 3 instances and the decision of lowest instance court can be appealed in the highest instance court;

77 The Commercial court – in case the parties have agreed to solve the dispute in this court and such agreement is mentioned in the contract. This court has only one instance and its decision is final and can’t be appealed.


The list of necessary documents for legal actions:

77 the contract signed by the parties with all appendixes;

77 all unpaid invoices;

77 the statement of account indicating payments and credit notes which have been booked regarding the outstanding invoices;

77 the transporting documents with the debtor`s mark proving the goods receipt and the customs declarations;

77 the correspondence and other documents related to the debt.

The Russian legislation also requires providing the extract from the register about the creditor company indicating the persons having the right to sign documents in the company. This docu-ment must not be issued more than 30 days before the claim is submitted and the claim wouldn’t be accepted without this docu-ment. Also we would need the power of attorney for our lawyer to represent the creditor. All documents have to be provided in copies, assured by the notary, or original documents as it is nec-essary to translate all papers into Russian. The originals also have to be shown to the court during the first session. If some docu-ments are missing, it is necessary to provide explanations about this fact.

The contract is the main document, which proves the coopera-tion fact between parties, it sets basic cooperation conditions, regulates the payment order, sets the stipulated court place etc.

Till the end of 2013 the legislation of Russia had the exact clause with the requirement to have the written contract in the deal between parties in case if one of these companies is the foreign company. Otherwise the deal would be considered as non-valid. This clause was excluded from the legal acts in the end of 2013, but the law was not adapted in the legal system.

The currency legislation of Russia still sets that the Russian com-pany has to have the contract with the foreign company in order to open and use the currency deal passport which is necessary to make the payment abroad. Therefore it is still important for the foreign customers to sign the Contract with Russian companies.

28.2.4 Legal Dunning ProcedureThe legislation of Russian Federation doesn’t set the possibility of such kind of a procedure.

28.2.5 LawsuitThe regular lawsuit procedure is initiated directly after amicable collection has failed due to a dispute by the debtor. The claim is being submitted to the court and the court checks the documents and the grounds of the claim. If the claim is prepared and sub-mitted correctly, the court announces the date of session, which both parties have to be present. If it is necessary, the court may postpone the session and announce the date of another hearing. The parties will be informed about the outcome in writing by the responsible court. In case the Commercial court solves the dis-pute, the parties have to select the judge from each side.

28.2.6 AppealIt is possible to appeal against the court`s decision to the second or third instance court. In the second instance court the objec-tions against decision of the first instance court can be submitted with additional facts etc, but in the third instance it is possible to appeal against the requirements of legislation incorrectly used by the court, any new information or fact wouldn’t be taken into consideration. The appellation petition has to be submitted to the court and in terms indicated by the first instance court. The deci-sion of Commercial court can’t be appealed.

TAB

LE OF CO

NTEN

TSR

USSIA


28 RUSSIA

28.2.7 CostsCosts of the civil law procedure (court costs and fees) are deter-mined by the provisions of the civil law and not subject to any negotiation. All costs depend on the amount of the outstanding. There are different fees, which can apply during a procedure. It difficult to declare exact total sum of litigation costs. An exact cost estimation will be provided case by case should legal actions become necessary.

28.2.8 Expected TimeframeThe average duration of the court procedure can take at least 6 months and longer depending on the complexity of the case as well as the availability of the judge.

28.2.9 Interests and Costs in the Legal PhaseOut of court interests and costs can be claimed as part of the out-standing during the legal procedure. The outcome is highly de-pendable on the court and judge. Usually the court awards maxi-mum interest of 10% of the principal amount in case those were requested from the debtor, however, there isn’t 100% guarantee that the interests will be awarded. The request of interests will increase the amount of court fee. The defendant has to bear the court fee of the legal procedure in accordance with the Civil Pro-cess Law of Russian Federation. Other expenses (i.e. the experts fee etc.) can be requested from the debtor, however, the decision if those are awarded from the debtor depends on the court.


28.3.1 General

There are 2 kinds of insolvency:

77 The monitoring stage – so called financial rehabilitation, the company has to provide a debt repayment plan and an internal administrator is appointed by the court. If the plan is fulfilled the company continues to operate.

77 The bankruptcy procedure – the court appoints the administrator who prepares the creditor’s list, receives the documents etc. The company is liquidated once the procedure is over.

28.3.2 ProceedingsThe claim has to be submitted within 1 month since the court makes decision to start any insolvency procedure.

If the Claim is not submitted in this Term:

77 if financial rehabilitation is started – the creditor`s claim is not being rejected and the court makes decision on it only if the second stage is started (the creditor is being included in the 3rd list of creditors). If the financial rehabilitation is successfully completed, then it is possible to submit the claim in the general order.

77 if the bankruptcy procedure is started – the court decides if the creditor`s claim submitted after the deadline can be accepted or not (if the claim is accepted, the court also decides the list of creditor’s the claim will be included in – 3rd or 4th).

The Lines of Creditor`s:

77 1st line – protected creditors;

77 2nd line – maintenance (salary, taxes etc.);

77 3rd line – non-protected creditors;

77 4th line – other creditors.

28.3.3 Required DocumentsIn order to lodge the claim on your behalf we are in need of the documents, requested in the point 28.4.3.

TAB

LE O

F CO

NTE

NTS

RU

SSIA


28 RUSSIA

28.3.4 Expected Timeframe and OutcomeThe deadline to lodge claims is 1 month from the date when the information about court`s decision is published in the official sources. The whole duration of an insolvency procedure can’t be predicted exactly. The minimal term of financial rehabilita-tion procedure is 6 months and it doesn’t have maximal term. The outcome also can’t be predicted exactly and depends on the debtor company`s state at the moment when insolvency started.

28.3.5 Limited CompaniesIf the financial rehabilitation is successful, the internal adminis-trator is cancelled and the company continues its usual business activity. However, if this stage is not successful, the bankruptcy procedure is started and it finishes with the liquidation of the company.

28.3.6 Unlimited Companies/IndividualsThis kind of companies has the same consequences of insolvency procedure as the companies listed in the point 28.6.5.

28.3.7 Pool of CreditorsThe pool of creditor`s is not used in the Russia.

28.3.8 RescissionThe administrator can dispute the payments made during the insolvency procedure, however, it is very rare, as all payments made need to be confirmed by the administrator and the debtor’s bank informed as insolvency doesn’t allow any payment that is not confirmed by the administrator.

TAB

LE OF CO

NTEN

TSR

USSIA


28 RUSSIA

TAB

LE O

F CO

NTE

NTS

RU

SSIA


29.1 Amicable Phase

29.1.1 General Atradius Collections Singapore maintains a professional collec-tion process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the collection process in-house, contacting both verbally and in writing whilst adhering to federal and state laws.

29.1.2 Local Agent We can employ local agents to make field visits to your debtors in all areas of the country, primarily to assess their business opera-tion and location. The charge to use agents is typically around 15% of the debt’s recovery and varies depending on the age and size of the debt. Under local laws, the creditor must have the invoice to action any skip trace or agent visit.

29.1.3 Interests Atradius Collections uses any clauses or agreements made be-tween parties in a credit application or terms and conditions as the basis for any interest charges. From a cultural point of view, Singaporean debtors very rarely agree to pay late payment inter-est and it is often used as a negotiation tool between debtors and collectors.

29.1.4 Debt Collection Costs In Singapore debt collection costs are chargeable to debtors if the creditor has a special contractual agreement in place and the debtor has agreed to the terms in writing. From a cultural point of view, Singaporean debtors very rarely agree to pay collec-tion costs, and they are often used as a negotiation tool between debtors and collectors. Given the high legal costs in this region’ Atradius Collections does not recommend any legal enforcement purely of collection costs.

29 Singapore

GDP (2014 EST.)


2.8 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of electronics, chemicals, financial services, oil drilling equipment, petroleum refining, rubber processing and rubber products, processed food and beverages, ship repair, offshore platform construction, life sciences, entrepot trade




34.37 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSSIN

GA

PO

RE


29 SINGAPORE


29.2.1 General Our solicitors must issue a statutory letter of demand for pay-ment. It is practical to prove to the court that all pre-court efforts of collection yielded no result by revealing all prior correspond-ence to the debtor. The court will then advise whether to issue a statement of claims on the debtor. Quotes will be provided to Atradius for these court actions that reflect the seriousness of the case placed with them.

29.2.2 Required DocumentsIn order to begin any legal procedure we require copies of the in-voices and a clear statement of account indicating payments and credit notes that have been paid against the outstanding invoic-es, as well as any contract or terms and conditions binding both parties. As the lawsuit proceeds further we may require further documentation such as copies of the contract, orders, confirma-tions, delivery notes and invoices etc that can be requested when needed. In case of dispute, all notes of conversations between creditor and debtor via letters and emails that may assist our lawyers should be kept. In the case of oral negotiations, we may require meeting or system notes about what was agreed.

29.2.3 Legal Dunning ProcedureIn Singapore, our solicitors or local agents will always send a formal letter of demand with the attached documentation when taking action on a file.

29.2.4 LawsuitOnce the regular lawsuit procedure has commenced, our solici-tors will serve a statement of claim for the value of the debt on the debtor. The debtor may formally defend these proceedings within an allotted time, which will have an impact on cost and time-lines involved. Once a hearing is scheduled, our solicitor will rely on affidavits from the client to support the case although the client may be required to attend directly at some point in the case. Cases in Singapore are expensive and will often require multiple hearings before the Court decides on judgement and a decision on costs.

29.2.5 CostsCosts of proceedings are high in Singapore. Individual costs can be provided on a case-by-case basis should legal action become necessary. All previous communication between the client and debtor, and the amount, size and age of the debt will influence the quote.

Our solicitors charge around $1,000 SGD for a statutory letter of demand, and the cost of issuing a statement of claim is either charged as a percentage of the debt or an agreed flat figure for this phase depending on the file.

It is difficult to predict total costs in Singapore, as there is a long turnover period in the Courts, and extra hearings may be sched-uled. There may be extra costs that arise for witnesses and ex-perts if the debtor disputes the case.

29.2.6 Expected TimeframeThere is a long holdover in the Courts and it is not uncommon for a case to run for between 1-3 years through the Courts, needing multiple hearings before a final Judgement is handed down. This obviously depends on the complexity of the case as well as the availability of the judge and the lawyers on all sides.

29.2.7 Interests and Costs in the Legal PhaseThe decision of awarding costs and court interest will be in the hands of the courts, and specific details should be raised with our solicitors who can provide you with their expert opinion. In case of a legal settlement, both parties bear the costs of the corre-sponding proceedings in proportion to their prevailing or failing in the case.

TAB

LE O

F CO

NTE

NTS

SIN

GA

PO

RE


29 SINGAPORE


29.3.1 GeneralSingapore’s primary insolvency laws relating to corporations ap-pear in the Companies Act 2006 (the Companies Act). These laws are based on principles found under U.K. (English) and Austral-ian law. A debtor can be liquidated either through a creditor’s voluntary liquidation proceeding or a court-ordered compulsory liquidation.

29.3.2 ProceedingsThe insolvency regime in Singapore includes a number of cred-itor-focussed features that are common to the U.K. insolvency regime, including the taking of security by a floating charge over all - or substantially all - of a debtor’s assets, and out-of-court foreclosure procedures known as receivership. In Singapore, se-curity may be given over all types of corporate assets and can be enforced both outside and within insolvency proceedings. Provided that the creditor has registered the security with the Registry of Companies within the requisite period, the security will be enforceable in the debtor’s insolvency. The overriding ob-jectives of Singapore’s insolvency laws are to restore the debtor to profitable trading where practicable and maximize the return to creditors as a whole if the company itself cannot be restored to profitable trading. The procedure will also look to establish a fair and equitable system for claims ranking and asset distribution among creditors and to provide a way to hold any persons guilty of mismanagement or misconduct within a company responsible for their acts. After all assets of the company have been assessed and realised, the liquidator will adjudicate all the claims lodged against the company and admit or reject them accordingly. Any surplus left over after paying the creditors and costs of liquida-tion will be returned to the shareholders. Expert legal opinion by our solicitors is highly recommended.

Required Documents








29.3.3 Expected Timeframe and OutcomeThe whole duration of an insolvency procedure can take any-where between 1 to 5 years. Singapore’s insolvency laws protect the priority of secured creditors, who have priority over virtually all other claims against a debtor. Extra national considerations regarding asset location can also affect recovery prospects. We would recommend getting our solicitors’ professional opinion re-garding liquidation of the company.

TAB

LE OF CO

NTEN

TSSIN

GA

PO

RE


29 SINGAPORE

TAB

LE O

F CO

NTE

NTS

SIN

GA

PO

RE


30.1 Amicable Phase

30.1.1 General Atradius Collections Slovakia maintains a professional collection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the col-lection process in-house, contacting both verbally and in writing whilst adhering to federal and state laws. Where there is a case of dispute, we aim to reach an amicable solution between creditor and debtor. We do this by analysing all contractual documents (e.g. signed contracts, orders, confirmations, invoices and deliv-ery notes as well as all standard terms that have been agreed upon). All investigations are completed with the assistance and agreement of our legal team.

30.1.2 Local Agent Atradius Collections offers direct collection activity managed by a selected network of local agents who visit the debtors all over the country. Due to our experience this solution is particu-larly successful for specific debtor’s categories like individual sole traders, shops and small companies. The local agents’ network can also help investigate and find an untraceable debtor.

30.1.3 Interests Interest on late payment rates should be specified in the contract between supplier and buyer. If it is not, the supplier can charge statutory interests on late payment, whose rate is based on law. The interest rate is the same for all business relations. For con-tracts made before 31th January 2013 it is calculated as the main refinancing operations (fixed rate) of the European Central Bank, plus eight percentage points, and for contracts made after 31th January 2013 as the main refinancing operations (fixed rate) of the European Central Bank, applicable on the first day of delay, plus nine percentage points or as the main refinancing operations (fixed rate) of the European Central Bank, applicable to the first day of relevant half-year, plus eight percentage points. Atradius Collections charges interest to debtors, both in the amicable and in judicial phase. In judicial proceedings the interest rate is based on the law, if it is not contracted by parties, and courts award the interest that is required on the condition that the basic claim is accepted.

30.1.4 Debt Collection Costs The creditor can also demand a lump sum of collection costs in amount of 40,- EUR.

30 Slovak Republic

GDP (2014 EST.)


6.3 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of metal and metal products; food and beverages; electricity, gas, coke, oil, nuclear fuel; chemicals and manmade fibers; machinery; paper and printing; earthenware and ceramics; transport vehicles; textiles; electrical and optical apparatus; rubber products




34.66 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSSLO

VAK

REP

UB

LIC


30 SLOVAK REPUBLIC


30.2.1 General Reminder letters for payment are usually sent to the debtor be-fore court proceedings start. Reminders, however, increase the chance of collecting money in an amicable way. If the debt is not fulfilled within a period stated in a reminder letter, legal action is brought. The contracting parties may also negotiate an arbitra-tion clause or a particular court’s jurisdiction clause (only in in-ternational contracts). If these clauses are not agreed upon, legal actions are handled by the District Court of the debtor.

30.2.2 Required DocumentsIn order to start legal action, we need the following documents: the Original Power of Attorney granted before a Public Notary and Apostil according to the Hague Convention, the extract from the Trade register of creditor, copies of any unpaid invoices, con-tracts, relevant orders, orders´ confirmations and transport docu-ments (CMR´s) signed by the buyer, general terms and condi-tions, current statements of accounts. These documents are also required for supporting claims arising from purchase contracts. Optional documents are copies of credit notes, any other corre-spondence, that may verify the claim, the contract of the debt’s transfer if the debt is claimed on behalf of a third company who is not the original seller of the unpaid goods. Documents required for legal action are determined by the type of claim and its char-acter. It is helpful if the creditor has some security as acknowl-edgement of debt or a bill. In the amicable collection process, Atradius collections will try to get some security from the debtor, which can be helpful during legal proceedings.

30.2.3 Legal Dunning ProcedureThis procedure is only applicable for monetary debts when the debtor is traceable and the payment order can be delivered to the debtor in the Slovak Republic. The debtor may file a complaint up to 15 days after the payment order was delivered to debtor, which then transfers the dunning procedure into a regular law-suit procedure.

30.2.4 LawsuitThe regular lawsuit procedure is either initiated directly after amicable collection has failed due to a dispute by the debtor, or follows directly after the legal dunning procedure if the debtor filed a complaint against payment order or if the payment order can not be delivered to the debtor.

30.2.5 CostsCourt fees are 6% of the disputed amount, at least 16,50 EUR, max. 33193,50 EUR. The fee’s base is the basic claim, not includ-ing interest but including contractual penalty if demanded by the creditor. Arbitration fees are established by a special arbitration rule. Lawyer’s fees depend on the form of legal action and the amount of the claim in dispute and can vary from 2% to 4% of the claim. Other costs can be accumulated with the translation of documents.

30.2.6 Expected TimeframeThe average duration of a legal dunning process is between 3 and 6 months, whereas a court procedure can take 12 months or longer depending on the complexity of the case, and the avail-ability of the judge and lawyers on both sides.

30.2.7 Interests and Costs in the Legal PhaseThe courts always award either interest on which the creditor and debtor agreed upon or the statutory interest and also a lump sum of collection costs. The losing party also has to pay court fees and lawyer costs.

TAB

LE O

F CO

NTE

NTS

SLO

VAK

REP

UB

LIC


30 SLOVAK REPUBLIC


30.3.1 General An Insolvency proceeding may only start following a bankruptcy or restructuring motion submitted by the debtor themselves or by one of their creditors. If the court decides that the debtor is insolvent, the debtor is declared bankrupt or restructuring is per-mitted. A debtor is insolvent either when they have more than one creditor, unpaid invoices for more than 30 days due and the debtor is unable to pay their debts, or when there is more than one creditor and the amount of debts is higher than assets of the debtor. This procedure may last several years.

30.3.2 ProceedingsAfter the debtor or creditor submits a bankruptcy motion, the court checks the debtor’s financial situation and decides if the debtor is insolvent or not. If court find that the debtor is insol-vent, it declares bankruptcy. The decision is published in the Busi-ness Journal, which is available for public viewing via the Inter-net. All enforcement procedures have to be stopped at that point. An administrator is appointed to supervise and to inspect the bankruptcy proceedings. Administrator has to inform all known foreign creditors about debtor´s bankruptcy and to invite these creditors to lodge their claims. Creditors may lodge their claims within 45 days since the declaration of bankruptcy is published. If this deadline is missed, creditors may still lodge their claims, but they cannot exercise their rights as creditors. Bankruptcy can be used if the assets of the debtor are used to discharge claims and the debtor closes their business. This procedure is avail-able for both individuals and legal entities. Restructuring after the debtor or creditor submits a restructuring motion, the court checks the debtor’s financial situation. The debtor must propose changes in his business, enabling them to pay the debts and keep the business in restructuring. If requirements are met, court per-mits restructuring proceedings. The decision is published in the Business Journal, which is available for public viewing via the Internet. All enforcement procedures have to be stopped at that point. An administrator is appointed to supervise and to inspect the restructuring proceedings. The administrator has to inform all known foreign creditors and invite them to lodge their claims. Creditors may lodge claims within 30 days since the permission of restructuring is published. If this dead line is missed, no claims will be added in to insolvency procedure and claims that were not lodged cannot be enforced anymore. This procedure is usually used for bigger companies.


In order to lodge the claim on your behalf we need the following documents:



77 Copies of delivery notes

77 Statements of account

77 Extract from Trade register





30.3.4 Expected Timeframe and OutcomeThe whole duration of a bankruptcy procedure often takes more than a year especially for more difficult cases. Important updates and steps undertaken in bankruptcy or restructuring proceedings may be found in Business Journal.

TAB

LE OF CO

NTEN

TSSLO

VAK

REP

UB

LIC


30 SLOVAK REPUBLIC

TAB

LE O

F CO

NTE

NTS

SLO

VAK

REP

UB

LIC


31.1 Amicable Phase

31.1.1 General South African Law has Roman Dutch origins and the debt collec-tion process is well entrenched within the system. The South Af-rican prescription period (‘Statute of Limitations’) is 3 years from the date upon which the debt became due and payable. However, due to the fact that South Africa remains a third world country, corruption and fraud remain rife and a weak currency greatly af-fects the debtor’s ability and/or willingness to pay.

31.1.2 Local agent Our local agent is a firm of attorneys based in Cape Town who specialize in debt recovery and are well connected across South Africa, with colleagues and investigators in most urban centres. Upon receipt of an instruction, the local lawyers will carry out some brief ‘background’ investigations on the debtor, whereafter an informal telephone call and/or formal letter of demand will be sent. Should a reply not be forthcoming, we normally recom-mend a site visit.

31.1.3 Interests South Africa has an extremely stringent Credit Act in terms of which an entity must be registered as a credit provider with the National Credit Regulator to be able to charge interest on an ac-count. Once interest is charged the transaction is governed by the Credit Act which makes the simple task of collecting a debt much more stringent. As such, interest cannot be charged on a simple ‘out of court’ collection, even if the parties have agreed to same. However, once court action commences, legal interest of 15.5% per annum can be charged as from date of service of the summons to date of final payment of the debt. PLEASE NOTE that South Africa does apply the in duplum rule whereby interest charged may never exceed the original debt amount.

31.1.4 Debt collection costs We do not charge collection costs to debtors in South Africa.

31 South Africa

GDP (2014 EST.)


1.0 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of mining (world’s largest producer of platinum, gold, chromium), automobile assembly, metalworking, machinery, textiles, iron and steel, chemicals, fertilizer, foodstuffs, commercial ship repair




42.24 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSSO

UTH

AFR

ICA


31 SOUTH AFRICA


31.2.1 General Depending upon the outcome of the amicable debt collection procedure, documents available, debt amount and the debtor’s solvency, a recommendation will be offered as to whether or not it appears economically viable to move to legal action.

31.2.2 Required documents Original invoices and orders are obviously always the most valu-able but copies will in most instances also suffice. In some in-stances, notarised and legalized and will have to comply with the requirements of the Hague Convention (per member countries) and/or the requirements of both South Africa and the country involved (for non-member countries). Please note that a Power of Attorney is not a requirement but the debtor’s attorneys may request same in which case it will have to be provided.

31.2.3 Legal dunning procedure A letter of demand is sent to which the debtor can respond in whichever way. Should they be in agreement that the debt is due and payable, a settlement agreement can be entered into where-by the debtor can settle the debt either in a lump sum or by way of monthly instalments. This agreement will then form the basis of the court action, should it be necessary.

31.2.4 Lawsuit A lawsuit commences with the issuing of a summons, which is served upon the debtor by the sheriff (bailiff) of the court.

Upon receipt of summons the debtor either opts to defend the action or not. Should they not defend – the default judgment can be applied for after 10 days of service of the summons.

In the event that they do defend, summary judgment can be ap-plied for within 15 days from the date of receipt of the Notice of Intention to Defend. Summary Judgment can, however, only be applied for when the claim is for a liquidated amount i.e. in respect of an unpaid invoice. In this application the Plaintiff will state belief that the Debtor only entered an appearance to defend with the intention to cause delay and that the debtor does not have a defence in law. The Debtor will then be required to con-cisely state its defence in the form of an affidavit. PLEASE NOTE that the merits of the matter will not be argued at this application and if the Debtor can show that it has even minimal grounds for a defending, the court will not grant the Summary Judgment. In that event, the matter will have to proceed to trial.

31.2.5 Costs Litigation costs in South Africa are quite high and a prospective plaintiff should keep in mind that should the litigation be unsuc-cessful, the plaintiff will also be liable for the costs of the Debtor, in the same way that the Debtor would be liable for the costs of the Plaintiff should the Debtor be unsuccessful in defense. The problem, however, is that more often than not the debtor is un-able to settle such costs orders. Moreover, because the Plaintiff is not a South African entity and does not own any attachable assets in South Africa, the Debtor will more likely than not re-quest “security” for its costs should the Plaintiff be unsuccessful in its litigation.

It is extremely difficult to provide an estimation of court fees as much depends upon factors such as whether expert witnesses will have to be called to give evidence at the trial.

However, it may normally be assumed that that EUR 7500 will be sufficient to take the matter up to opposed Summary Judgment stage, whereafter the position may be reviewed and a decision taken as to whether the matter should be continued.

Please note further that the EUR 7500 does not include execu-tion costs which costs may vary considerably.

31.2.6 Expected timeframe A trial (not taking into account an appeal) normally takes be-tween 3 – 5 years as the court rolls in South Africa are heavily congested; but Summary Judgment / Default Judgment normally take between 3 – 6 months.

31.2.7 Interests and costs in the legal phasePlease see 31.1.3 and 31.2.5 above.

TAB

LE O

F CO

NTE

NTS

SOU

TH A

FRIC

A


31 SOUTH AFRICA


31.3.1 General In South Africa, there are different “acts of insolvency”; non-payment of an account and/or an admission that a company is not able to settle a debt is considered to constitute such an act. In these circumstances the creditor may apply to the court to have the debtor liquidated.

PLEASE NOTE that in South Africa there are secured and un-secured creditors: Secured creditors are normally banks; these creditors are paid first and only in the event that there is some-thing left will the remainder of the estate be split proportion-ally between the unsecured creditors. Should the estate not be enough to settle the secured creditors then the unsecured credi-tors who proceeded with the proving of a claim will be required to contribute to the claims of the secured creditors. Accordingly it is important to ensure that no chance of ‘contribution’ exist at the time of proving a claim.

PLEASE NOTE FURTHER that if ownership of goods remained vested in the supplier until such time as payment has been re-ceived, then the goods will be sold and the supplier paid from the proceeds; any remaining proceeds will vest in the estate. Such vesting of ownership must be proved by way of a contract and the necessary claim documents (to be supplied by the liquidator) will have to be completed.

31.3.2 ProceedingsVoluntary Liquidation – this is done by the debtor through the passing of a special resolution, which is registered with the Reg-istrar of companies, who forwards same to the Master of the High Court who in turn appoints a liquidator who will attend to the winding up of the entity. The winding up process may take a while.

Hostile Liquidation – in this instance a creditor will apply to court to have the debtor liquidated. This is done by means of a motion, which must be served upon all known creditors, South African Revenue Service, Master of the Court, Registrar of Companies and/or any other interested parties. The court will then grant an interim order, which must be published in the government gazette and local newspapers. On the return date for the interim orders any party who wishes to oppose the application must advise the court accordingly whereafter the matter will be postponed for argument. Once the court has heard argument it will either grant the liquidation or not. This process, depending upon whether or not it is opposed, can take anything between 6 months and 2 years. This is also dependent upon the court hearing the ap-plication. Only after the liquidation is confirmed will the master appoint a liquidator who will then wind up the estate.

31.3.3 Required Documents Invoices and/or correspondence evidencing the debtor’s inability to settle the debt. Once the application is granted and a liquidator appointed the claim forms will have to be completed and lodged; if proof of ownership exists, this will have to be provided with the claim form.

31.3.4 Expected Timeframe and OutcomePlease see 31.3.1 and 31.3.2 above.

TAB

LE OF CO

NTEN

TSSO

UTH

AFR

ICA


31 SOUTH AFRICA

TAB

LE O

F CO

NTE

NTS

SOU

TH A

FRIC

A


32.1 Amicable Phase

32.1.1 General Atradius Collections Spain maintains a professional collection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the col-lection process in-house, contacting both verbally and in writ-ing whilst adhering to federal and state laws. Where there is a dispute, we aim to reach an amicable solution between creditor and debtor. We do this by analysing all contractual documents (e.g. signed contracts, orders, confirmations, invoices and deliv-ery notes as well as standard terms previously agreed upon). All investigations are completed with the assistance and agreement of our legal team.

32.1.2 Local Agent Currently we are working with the C&C network lawyers who, when the collector’s management is unsuccessful but the debtor is located and there is a possibility to try to increase the pressure against debtor, continues with this pressure making personal vis-its, calls and sending requirements of payment.

There is no specific cost to pay for the visit and only in the event that the lawyer in this phase of the recovery receives the mon-ies owing, will extra success fees be charged. Because of this, we always need the ac ceptance from the client before entrusting a case.

The extra cost will depend of the recovered quantity, applying a percentage fixed by contract with every attorney. If the actions taken by the attorney are also unsuccessful, they will send us a final report with a resume of all efforts, including the financial information to study the viability of the legal action.

32.1.3 Interests Atradius Collections Spain always charges interest to debtors, which is calculated from the base rate set by the Spanish national bank, or any other amount that has been agreed by contract. From a cultural point of view, Spanish debtors are not used to paying late payment interest, and the actual amount of the in-terest payment is considered a matter of negotiation between debtors and collectors. We try to negotiate the payment of these interest amounts in the amicable phase.

32 Spain

GDP (2014 EST.)


4.2 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of textiles and apparel, food and beverages, metals and metal manufactures, chemicals, shipbuilding, automobiles, machine tools, tourism, clay and refractory products, footwear, pharmaceuticals, medical equipment




40.74 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSSPA

IN


32 SPAIN

32.1.4 Debt Collection Costs In Spain debt collection costs are chargeable to debtors repre-senting the client’s claim for late payment damage based on the Spanish Civil Code and Commercial Code. If the creditor has a special contractual agreement this can be taken into account as long as the debtor has agreed to the terms. From a cultural point of view, Spanish debtors are not used to paying debt col-lection costs, though often the actual amount of these costs can be considered a matter of negotiation. As with interest charg-es, Atradius Collections Spain always includes the cost in their claims, but when it is disputed, it then becomes a legal action, so we have to judge whether it is worth starting the legal case due to the cost.

32.1.5 PrescriptionThe general prescription period in Spain is 15 years, starting from the day after the invoice is due. This is according to article 943 of the Spanish Commercial Code in combination with 1964 of the Spanish Civil Code. Transport claims prescribe within 6 months starting from the date of obligation of payment, according the article 951 of the Commercial Code.

The prescription period is suspended when:

77 When the creditor claims payment judicially.

77 By extrajudicial claim of the creditor by fax or notary requirement

77 By any act of acknowledgment of the debt made by debtor.

This is Subject to Spanish Civil Law, Article 1973

The prescription has to be claimed by the debtor in the legal pro-ceeding and cannot be declared officially by the Court, as it is a renounceable benefit for the debtor.

32.1.6 Accepted and Most Common Payment MethodsThe most common payment method is bank transfer either to our or the client’s bank account. Atradius Collections also accepts cheque, but in this case we try that was issued directly to client. We do not offer the direct booking off from debtor accounts.

32.1.7 Types of CompaniesThe common types of companies in Spain are:

77 “Sociedad Limitada”, or S.L. – the minimum corporate capital for these kind of companies is 3,000 EUR.

77 “Sociedad Anonima”, or S.A. – in this case, the minimum is 60,000 EUR

In both, shareholder’s assets are not affected by the company’s debt and it is necessary to prove in the presence of a Judge that the administrators are following bad practices. This can be very hard to prove.

77 A third less popular, type of business is a Community. This type of company is quite different to a S.L and S.A. In Communities, the co-owners’ assets are affected by company´s debt if the company does not have enough assets to pay all its debts.

32.1.8 Sources of InformationIn Spain we have access to information contained into the C&C database, which includes financial reports and a risk evaluation of Spanish, Portuguese and Brazilian companies. Using informa-tion from these reports, together with our own information, we can get an accurate impression of a debtor’s financial situation and advise on the next step of the process. The information con-tained in these reports is the Official accounts (with gains and loss) that companies have to present annually. If we need a more-detailed report containing legal information, a study of the tra-jectory and so on, we have to pay an extra 15 EUR should this be necessary before starting the legal action.

After putting together the C&C experience and the information provided by client, the debtor is easy to trace if they’re still trad-ing. If we think is advisable to have a complete report for the legal action, we will send a local agent to make a personal visit to debtor to find more information about the reasons for non-payment of the debt. In Spain we do not use Private Investiga-tion agencies because we use other tools to find the companies or the goods at no extra cost, or we can use the court’s own agencies if we are in a legal procedure. In our opinion, we don’t feel that a Private Investigator could do much more to locate a debtor that we could.

TAB

LE O

F CO

NTE

NTS

SPA

IN


32 SPAIN

32.2 Retention of Title This is not a common title in Spain. Having a contract of this type is not binding between parties, unless the contract has been signed by a Public Notary it is not an executive title, so we have to follow the normal legal procedure. This means starting a de-clarative procedure where the Judge will have to recognize our right for covering the debt or removing the merchandise. If the merchandise has been seized, it will be necessary to start a spe-cial legal procedure called “Tercería de Dominio”, in which we will have to prove our right for divesting ownership and posses-sion to a third party.

32.3 Safeguarding MeasuresWe will always try to obtain a document signed by debtor recog-nizing the debt. This does not have to have a Notary’s signature. If it is signed by the debtor it can be used in any future legal claim. The document can be signed by a Notary, but we would not advise it due to the cost for both parties. Debtors are able to offer another form of security like mortgages assignment of debt or against debts as well. Assignments of debts or assets can be done via a contract while mortgages have to be registered by a notary.


32.4.1 GeneralThe modern Spanish legal system is composed of public law, which regulates the relations between a citizen and the state or two bodies of the state and civil law, which regulates the rela-tions between two people or companies. Entering into legal pro-cedure is possible without prior warning to the debtor, but is not normal practice because the number of legal procedures in Spain are very low and become expensive if there is a dispute. It is always better to exhaust all the amicable options before starting legal action.

32.4.2 Legal SystemIn Spain the jurisdiction is divided by matter of the case. For cases regarding outstanding monies the section in charge is the civil one. In the first instance, presided over by 1 Judge, we will obtain a final decision that can be appealed in the Second In-stance (in this case is a collegiate body composed of three judges) in the presence of the Regional Court, called Tribunal Superior de Justicia. In all cases we have to take into account that the ad-dress considered for fixing the competence will be the debtor’s address. The third instance in Spain is strictly restricted and any claims that do not the criteria will be rejected. We have also to mention that it is necessary to pay a legal tax that depends of the outstanding amount.

32.4.3 Required DocumentsIn order to apply the legal dunning procedure we are in need of original versions of the contract, invoices and a clear statement of account indicating payments and credit notes, which have been paid against the outstanding invoices. In case of a regular lawsuit procedure, originals of the complete contractual docu-mentation should be available starting with the contract, orders, order confirmations, delivery notes and invoices etc. Every stage of the relationship between debtor and creditor should be prov-able by documentation. In case of dispute, all notes of conversa-tions between creditor and debtor should be kept and provided to our lawyers. In the case of any verbal negotiations, we would request that the dates and notes of any visits and negotiation reports should be kept, along with the names of witnesses. It is also necessary to obtain a Power of Attorney on behalf Atradius Collections Spain and our lawyers and attorneys, including the Hague Convention Apostille, if our client is not from Spain.

32.4.4 Legal Dunning ProcedureThis procedure is only applicable for monetary debts (less than 250,000 EUR) and only when the debt is due and payable. The responsible court is the first instance local court. In these cases the debt is not disputed so the Court only declares the creditor’s right and urges to debtor to pay the principal and the interests. If debtor does not agree and can present an opposition, we will have to start an ordinary proceeding (either Ordinario or Verbal, depending on the amount). This is not a second instance because the first Judge only has to declare that the Monitorio proceeding is not possible and the plaintiff must start the Ordinary proceed-ing, but does not make a decision about the debt.

32.4.5 LawsuitThe regular lawsuit procedure is either initiated directly after ami-cable collection has failed and if the solvency of the debtor is satis-factory. Usually a written pre-procedure is issued. Both the plain-tiff and the defendant exchange opinions and proofs by letter until the judge is satisfied they have all the relevant information needed to come to a judgement. A hearing is then scheduled at which both parties have to be present. After the verbal hearing, the judge sets a date to publish the final judgement, and both parties will be in-formed about the outcome in writing by the responsible court.

32.4.6 AppealAn appeal against the judgement is possible, which will trigger a verdict by the court of second instance (local court to district court; district court to higher regional court). In case of third in-stance, the review will be restricted to a check whether or not the statutes were applied correctly. Any amendment of facts or proof is not possible.

TAB

LE OF CO

NTEN

TSSPA

IN


32 SPAIN

32.4.7 CostsUsing the C&C lawyers’ network has allowed us to reduce our legal costs, as we have a contract with them offering preferen-tial tariffs. All costs depend on the outstanding principal amount and are calculated using percentages. There is a range of different fees that can apply during a procedure dependant on the amount of monies outstanding, and a range of fees for each action. This makes it difficult to predict the total costs, and costs for witness-es and experts may also arise. A cost estimation can be provided on a case-by-case should legal action become necessary. The cost also depends of the kind of procedure, which is linked to the reaction of the debtor (inactivity, opposition, etc.). Efforts are taken are to keep the costs lower, at least when the debtor simply does not react thereby accepting the claims.

32.4.8 Legal TaxesThe Spanish Government has issued a new law adding special taxes to the legal actions. These taxes have to be paid in the same moment that we present a legal action; in contrary, our petition won’t be transacted by the Court.

The cost of the tax will be:

77 A fix part - depending of the judicial procedure. The procedures more common for our claims are the Monitorio proceeding, which cost is 100 EUR, and the Ordinary one, with a cost of 300 EUR but we have to consider that the cost of the Appeal is 800 EUR.

77 A variable one depending of the claimed amount: from 0 EUR to 1.000.000 EUR the added cost will be of 0.25% of this amount.

These taxes are not rechargeable to the debtor and can not be reimbursed in any case, except if both parties get an agreement during the legal process, in which cases the 60% of the tax paid will be returned.

32.4.9 Expected TimeframeThe average duration of a legal process depends of the kind of procedure and if the case is in the first instance or in second one. A final decision may arrive in 3 months but in some cases it can take more than a year to obtain the Court´s judgement.

32.4.10 Interests and Costs in the Legal Phase(No legal taxes are considered) It is not possible to start a legal proceeding only for the interest or cost, but these will always be included in any final collection amounts. When a debtor is con-demned to pay the principal monies, the legal interest fees are normally included in the judgment. The Spanish Civil Code allow judges to condemn the losing party to bear the costs of the legal procedure and includes it in all claims, but this often depends on the Judge criteria if he feels the debtor has acted with bad faith. In case of a legal settlement, the parties bear the costs of the corresponding proceedings in proportion to their prevailing or failing.

32.5 Enforcement

32.5.1 Enforcement in DebtThe creditor can block the bank account of the debtor or block their claims against tax offices, life insurances, employer, shares in a business, corporate shares or any possible claim the debtor may have against any third party. This usually proves very ef-fective and often surprises the debtor. In order to save costs, it is possible to only enforce part of the judgement. Very specific information such as the bank account details, name and address of the employer, information about corporate shares or shares in businesses are required for this kind of enforcement. In all cases the court where the garnishee is residing is responsible for the single enforcement action.

32.5.2 Provisional EnforcementThe Spanish law allows the provisional enforcement of the judgement when the condemned defendant presents the appel-lation and this is admitted. To put it into effect, it has to be asked by writ to the same court of first instance that has issued the judgement, and can be enforced once the final judgement is pro-nounced. The warrant is used to obtain the statutory declaration from the debtor.

TAB

LE O

F CO

NTE

NTS

SPA

IN


32 SPAIN

32.5.3 Enforcement of a Definitive Judgment When the judgment is definite, it is possible to ask for it to be enforced if the condemned has not paid the due money within 20 days of the publication of the judgment. The condemned can present opposition to this enforcement alleging the caducity of the action, the payment of the fulfillment of the judgment. With-out more requirements of payment, the debtor’s assets will be seized. The assets can be designated by the applicant if they are known. If not, we will ask to Court to locate them, indicating the Banks, Public Organisations or Companies that could make it easier to locate the assets. Once the assets have been located, they will be auctioned and the amount due will be delivered, returning the balance to the condemned party. The cost of this phase will be paid by the condemned after their assets have been liquidated. Until then the applicant, will have to pay them.

32.5.4 Expected TimeframeThe time frame for enforcements is hardly estimable at all, as it depends very much on the single course of the case, the court, the localization of the assets, possible banks and of course possi-ble buyers. Patience is definitely needed for these because it can be longer that the principal proceedings.


32.6.1 GeneralInsolvency proceedings, whether “abbreviated” insolvency, an ordinary insolvency plan or necessary insolvency are a kind of a collective enforcement for all creditors of one debtor. With the start of the preliminary proceeding, all individual enforcements are suspended and only when the insolvency proceeding will not be started will individual enforcements continue. The aim of the insolvency proceeding is to pay out all creditors with the same percentage of debt value by liquidating the assets of the debtor company or collecting the enforceable income of an individual who is declared bankrupt.

32.6.2 ProceedingsRecently, a new type of insolvency procedure has been intro-duced in Spain, managed by an Insolvency Mediator, more flexible and with a briefer period for insolvencies of small dimen-sion (less than 50 creditors and less than 5 million of liabilities).

The principal characteristics are:

77 1. The payment plan cannot have a wait longer than 3 years.

77 2. The reduction cannot be higher than 25 %.

77 3. It must include an offer of negotiation of the conditions of loans and credits. If the agreement is approved for the creditors, the Mediator will have to monitor his fulfilment.

In contrary, the Mediator will present the ordinary insolvency in the Court.

Pre-insolvency

Debtor will communicate to the Court the situation of insolvency and will propose a payment plan to all creditors. If it is accepted, it will be homologated by the Court. If the debtor’s proposal does not obtain the 3/5 of the acceptation, or the payment plan is not complied, the debtor will have to start the ordinary insolvency proceeding.

Ordinary Insolvency.

The first step is communicating the insolvency to the Court. This can be done directly by the debtor (abbreviated or voluntary insolvency) or by a creditor (necessary insolvency). The Judge will study the documents and confirm the insolvency situation, in which case all others actions against the debtor will be sus-pended or continue.

The Court will appoint the Trustee of Bankruptcy, who will act like administrators of the company during the proce-dure. They should be composed of:

77 One lawyer or a law firm.

77 One economic expert.

77 One of the bigger creditors, normally a Bank.

The insolvency will be published in the Official State Gazette, and the date of publication is very important because creditors will have one month (in voluntary and ordinary insolvencies) or 15 days (in the abbreviated proceedings) for lodging their cred-its. Once the term for lodging the credit is finished, the Trustee in Bankruptcy will prepare a financial report, with the list of all credits and the balance with active and passive claim to the com-pany. If any creditor thinks that their right is not recognized in full, they can present an incident before the Trustee in Bank-ruptcy. Only when all incidents are solved and the Trustee in

TAB

LE OF CO

NTEN

TSSPA

IN


32 SPAIN

Bankruptcy prepares the definitive report including the result of the incidents, can the procedure will continue.

If the company has enough assets for a payment plan, they will present an agreement to the creditors that normally includes a discount and a payment plan for the balance. The creditors can accept or reject the plan, and present to the Court their decision. If a debtor gets more than a 50% agreement from all creditors, the agreement will be accepted by the Court, and will affect all creditors (not only those who signed it). However, if the debtor does not have enough assets or does not get 50% of favourable votes, the company will be liquidated and the creditors will re-cover their debts depending on the total amount recognized and qualification of their credits.




77 Duplicated of invoices

77 Actualized statement of account

77 Original contracts

77 Copies of orders, confirmations and delivery notes (in case our credit was not recognized, we will need the originals for presenting the incident)



32.6.4 Expected Timeframe and OutcomeThe deadline to lodge claims is 15-30 days related to the kind of procedure, and starts from the publication of the insolvency in the Spanish Official Gazette. The check for the claim lodge takes place 3-6 months after the deadline for the claim lodge but de-pends on the incidents presented, as the Trustee in Bankruptcy has to check all of them before issuing a final report with the list of credits. The whole duration of insolvency depends on the pay-ment plan agreed or the time needed to liquidate the company. It should be between 5 and 10 years. In Spain, the case is open until all payments have been received by the client or we verify we have no option of recovery. If the case is very small or we have several cases against same debtor, we will keep open the bigger case until it’s satisfied.

32.7 Arbitration and MediationIf the creditor and debtor agree on an alternative dispute solu-tion there are two options available: arbitration and mediation or conciliation. Agreeing on a private arbitral tribunal has three advantages compared to a regular legal proceeding; it is speedier as the courts are less busy and there is no appeal. It is also more cost-efficient and the hearing and process are confidential. How-ever, agreeing on arbitration also means the exclusion of the ju-risdiction of the ordinary courts.

Arbitration in Spain is based on the rules of the Arbitration Law on 26th December 2003 and is done by either the ordinary courts, Chambers of Commerce or a professional arbitrator. Both parties must agree on how the arbitration process is carried out. The second way of solving a dispute is by mediation or concili-ation proceedings, which focus on finding the root cause to the dispute in order to find constructive agreements and solutions and create a win-win situation for both creditor and debtor. Me-diation or conciliations are done by professional organisations like the Chambers of Industry and Commerce or by professional mediators. The resulting agreement is not a judgement and par-ties can ignore the mediator’s advice if they wish.

TAB

LE O

F CO

NTE

NTS

SPA

IN


33.1 Amicable Phase

33.1.1 General Atradius Collections Sweden maintains a professional collection process in Sweden, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the collection process in-house, contacting both verbally and in writing whilst adhering to federal and state laws.

33.1.2 Local Agent At this time we do not have the facility to visit debtors in Sweden, but should this situation change, we will inform you immediately. However, if the debtor wishes to visit our premises, we will gladly arrange a face-to-face meeting to discuss the situation.

33.1.3 InterestsAtradius Collections always charges interest to debtors calculated from the base rate set by the Swedish National Bank plus 8% on a daily basis.



77 To calculate the interest rate according to Danish regulation based on the reference rate fixed by National Bank of Sweden (+ 8 % p.a.). This rate is fixed twice a year per. 1st of January and 1st of July. The second rule will always occur if the interest rate is not agreed between the creditor and the debtor.

From a cultural point of view, Swedish debtors are used to paying late payment interest.

33.1.4 Debt Collection CostsIn Sweden debt collection costs are chargeable to debtors rep-resenting the client’s claim for late payment. You can charge 180 SEK for a collection file and further costs if the files are as-signed for the court. From a cultural point of view, Swedish debt-ors are used to paying debt collection costs.

33 Sweden

GDP (2014 EST.)


4.0 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of iron and steel, precision equipment, wood pulp and paper products, processed foods, motor vehicles




76.52 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSSW

EDEN


33 SWEDEN


33.2.1 General

Entering into legal procedure is only possible with a 4-days notice period to the debtor that must include:

77 4 days of notice


77 Specification of the debt (interest date, rate, cost)


The debt needs to be proven, to be enforceable. If the debt is undisputed, the Bailiff will issue a payment order, which equals a judgement. If a debtor disputes the debt, the file is assigned for trail handling whatever the reason or seriousness of the dis-pute. If a judgement is obtained and the debtor does not pay accordingly, the file will be handed over to the Bailiff’s Court for execution. Wage retention is the most effective measure used by the enforcement office. This requires the debtor’s employer to withhold a certain portion of their salary so that it can be sent to the bailiff by the employer, who can then advise of the amount to the creditors.

33.2.2 Required DocumentsIn order to apply the legal procedure we are in need of copies of the contract, invoices and a clear statement of account indicat-ing payments and credit notes that have been paid against the outstanding invoices. In case of a regular lawsuit procedure cop-ies of the complete contractual documentation between creditor and debtor should be available, including the contract, original power of attorney, orders, order confirmations, delivery notes, and invoices. Every step of the relationship should be provable by documentation. In case of dispute, all notes of conversations between creditor and debtor should be kept and given to our lawyers. In the case of verbal negotiations, we are in need of the visit/negotiations reports and names of any witnesses.

33.2.3 LawsuitThe regular lawsuit procedure is either initiated directly after amicable collection has failed due to a dispute by the debtor of follows directly to the legal dunning procedure after the debtor appealed. Usually a written pre-procedure is issued. Both the plaintiff and the defendant exchange opinions and proofs by letter until the judge has the impression of having all relevant information in order to judge. In this case a hearing is sched-uled during which both parties have to be present. After the oral hearing the judge sets a date to publish the final judgement. The parties will be informed about the outcome in writing by the re-sponsible court.

33.2.4 CostsYou can charge 160 SEK for a collection file and further costs if the file is assigned to the court. There are different fees that can apply during a legal procedure, depending on the amount out-standing and also a range of possible fees for each action, making it difficult to predict the total costs. In addition to this, costs for witnesses and/or experts might also arise. A cost estimation can be provided on a case-by-case basis should legal action become necessary.

33.2.5 Expected TimeframeThe average duration of a legal process can be 12 months or long-er depending on the complexity of the case and the availability of the judge and the lawyers on both sides.

33.2.6 Interests and Costs in the Legal PhaseOut of court interest and costs can be claimed as part of the out-standing debt during the legal procedure. Normally the losing party has to bear the costs of the legal procedure, and where there is a legal settlement the parties normally bear their own costs for court fee and lawyer fee.

TAB

LE O

F CO

NTE

NTS

SWED

EN


33 SWEDEN


33.3.1 General The aim of the insolvency proceeding is to pay out all creditors with the same percentage of their debt by liquidating the assets of a debtor company or collecting the enforceable income of an individual who is declared bankrupt.

Insolvency Procedures in Sweden:

77 Enforced Dissolution

77 Reconstruction

77 Bankruptcy

33.3.2 ProceedingsAfter the debtor or a creditor files for insolvency of the debtor, a preliminary liquidator is appointed to check if sufficient assets are available to cover the costs of the proceedings of the court costs and the liquidator. If these costs are deemed to be cov-ered, then insolvency proceedings will start and a preliminary liquidator will be appointed. If this procedure is not followed, the court will reject the declaration of bankruptcy due to insuf-ficient assets. The creditors can then lodge their claim and take back any goods delivered under retention of title. After the pro-ceeding starts, a claim-lodge is possible within a given deadline. The liquidator can either accept the lodged debt or dispute it. If the claim is disputed, the creditor may only file a claim in court to prove the justification of their claim if further documentation received does not convince the liquidator to confirm the debt. At the end of the proceeding all creditors with confirmed debts will receive a dividend provided there are enough assets in the estate. Often with estate insolvency proceedings, no dividends are paid.

33.3.3 Required DocumentsIn order to lodge the claim on your behalf in non-disputed claims, we only need copies of invoices.

33.3.4 Expected Timeframe and OutcomeThe expected timeframe for an insolvency estate in Sweden is 1-3 years. Often with insolvency proceedings, no dividends are paid.

TAB

LE OF CO

NTEN

TSSW

EDEN


33 SWEDEN

TAB

LE O

F CO

NTE

NTS

SWED

EN


34.1 Amicable Phase

34.1.1 GeneralAtradius Collections follows a collection process that is profes-sional at all times with the objective to retain relationships be-tween client and debtor whenever possible. Our staff of collec-tion professionals carries out the first collection tier in-house. They relentlessly pursue debtors verbally and in writing within the bounds of federal and state laws.

34.1.2 Local AgentAt the present time we cannot offer a field service for visiting debtors in the area of Switzerland. Services are headed from the office in Germany. As soon as this changes we will inform you.

34.1.3 InterestsAtradius Collections Switzerland always charges interest to debt-ors calculated either based on the contractual agreement be-tween client and debtor or based on the legal interests rate of 5% p. a. From a cultural point of view, Swiss debtors consider paying interests a matter of negotiation.

34.1.4 Debt Collection CostsThe debt collection costs are charged to debtors, calculated on the basis of the recommendation of the Swiss Debt Collection Union. Collection costs represent the claim of the client to the debtor based on the payment delay of the debtor and include in-terest and costs resulting from the late payment. AC forwards all recovered debt collection costs to our client to reduce the claim, or retains the costs instead or adds them to the success fees. This depends fully on the contractual agreement between the client and AC, the Debt Collection Agreement.

34 Switzerland

GDP (2014 EST.)


6.6 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of machinery, chemicals, watches, textiles, precision instruments, tourism, banking, and insurance




42.01 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSSW

ITZER

LAN

D


34 SWITZERLAND


34.2.1 GeneralIt has to be noted that Switzerland demands a “pre-legal” sum-mon to debtors in order to be able to pursue the debtor in a regu-lar legal proceedings. Details can be found under legal dunning procedure.

34.2.2 Required DocumentsIn order to apply the legal dunning procedure we are in need of copies of the contract, invoices and a clear statement of account indicating payments and credit notes which have been booked regarding the outstanding invoices. In case of a regular lawsuit procedure copies of the complete contractual documentation should be available starting with the contract, orders, order con-firmations, delivery notes, invoices etc. Basically every step of the relationship should be provable by documentation. In case of dispute also the “side conversations” between creditor and debt-or should be kept and provided to our lawyers. In case of verbal negotiations we are in need of the visit/negotiations reports and names of witnesses.

34.2.3 Legal Dunning ProcedureBefore being able to sue a debtor mandatory “pre-legal” actions have to be initiated before the administrative official debt col-lection authority called Office des Poursuites or Betreibungsamt. The Office notifies to the debtor a summons (Zahlungsbefehl) to pay within 20 days or to make opposition (Rechtsvorschlag) within 10 days. If no payment is made and in absence of opposi-tion, the creditor can request the debt collection office to attach debtor’s assets or a Bankruptcy Petition can be filed if the debtor is a legal person or a merchant. The costs for this part of the legal procedure cannot be charged to the debtor.

34.2.4 LawsuitThe regular lawsuit is either initiated after opposition to the legal dunning procedure or directly in case of complex cases. In this case, summons are served to the plaintiff, a conciliation hearing is scheduled at which the actions can be asked. After this written submissions to court are exchanged to the party. A further hear-ing is scheduled after which a judgement is issued based on the evidence gathered during the whole procedure.

34.2.5 CostsIn Switzerland, the fees of lawyers are quite high and generally calculated on an hourly basis. The fees depend on the seniority of the lawyer handling the case. The court costs can also repre-sent a substantial percentage of the claim, between 5% and 10% or more depending on the case. Costs may vary from canton to canton. All this means that the cost aspect should be seriously taken into consideration before starting an ordinary procedure in Switzerland. A cost estimation will be provided case by case should legal actions become necessary.

34.2.6 Expected TimeframeFour to six months before execution is necessary in the proce-dure before the debt collection office, providing that no oppo-sition is made. Execution takes another three or six months or more. Summary procedure to lift opposition can last more than six months plus execution. Ordinary proceedings can last from one to three years or even longer depending on the case.

34.2.7 Interests and Costs in the Legal PhaseCourt costs are generally chargeable to the debtor if the case is won, but not the attorneys’ fees. These depend upon the judge’s decision whether debtor bears them in full, partially or not at all.

TAB

LE O

F CO

NTE

NTS

SWIT

ZER

LAN

D


34 SWITZERLAND


34.3.1 GeneralThe aim of the insolvency proceeding is to pay out all creditors with the same quota by liquidating the assets of a debtor com-pany or collecting the enforceable income of an individual who is declared bankrupt.

34.3.2 ProceedingsThe forced liquidation of all debtor’s assets and distribution of the proceeds to the creditors according to their ranking. Credi-tors are invited to lodge proof of debt with the Bankruptcy Office (Konkursamt) generally within 30 days from the Bank-ruptcy Declaration. Late lodging is not possible. The trustee in bankruptcy is appointed by the Assembly of Creditors, which decides whether it will be a particular person or a specialized of-ficer belonging to the Bankruptcy Office. The creditors receive a certificate of loss (Verlustschein) if their claim is not satisfied in the bankruptcy. In case the debtor has requested a moratorium and composition (Sursis concordataire or Nachlaßstundung) the judge who will grant the moratorium after examining the restruc-turing plan, the balance sheet, the trading account and the state of the bookkeeping. An officer/trustee will be appointed to con-trol the activities. Inventory will be made; the creditors will have to lodge their claims. The moratorium is granted for four or six months but a prolongation up to 24 months is possible. During the moratorium period, a payment plan or composition proposal is worked out. The proposal is accepted if the majority of credi-tors representing at least 2/3 of the claims have voted in favour or 1/4 of creditors representing at least 3/4 of the claims. After the acceptance of the proposal by the creditors, it will have to be ratified by the court.


In order to lodge the claim the following documents are needed:





77 Copies of general conditions of sales, if there are any and


34.3.4 Expected Timeframe and OutcomeThe whole duration of an insolvency procedure is between one to five years. In case of a moratiorum, dividends of around 20 to 25% can be expected.

TAB

LE OF CO

NTEN

TSSW

ITZER

LAN

D


34 SWITZERLAND

TAB

LE O

F CO

NTE

NTS

SWIT

ZER

LAN

D


35.1 Amicable Phase

35.1.1 General As with all Maghreb countries, Tunisia is not an easy place to collect debts. Many Tunisian debtors try to avoid payment with a range of delaying tactics, which debt collectors have to deal with. Judges, legal system, courts’ organization are far from being ef-ficient, much to the detriment of creditors. Due to the events of the Arab Spring in 2011, collection opportunities are becoming worse. Political settling of scores between sympathizers and op-ponents to ex-President Ben Ali has led to destruction, vandal-ism and fire of assets and commercial premises, which has forced many companies out of business. Atradius Collections Tunisia maintains a professional collection process, focusing on the re-lationship between client and debtor at all times. Our team of collection specialists carry out the collection process in-house, contacting both verbally and in writing whilst adhering to federal and state laws.

35.1.2 Local Agent Our collectors may take the decision to increase the pressure through local agents always out of court, if in-house debt col-lection attempts fail. These agents may appoint a bailiff who will send an out of court formal notice for payment to the debtor, and will organise a visit if appropriate. Depending on the specific details of the case, this local agent may be a lawyer who will continue to try to come to a settlement without the need for a court case.

35.1.3 Interests During the amicable phase, it is prohibited to transfer any kind of amounts (interests & costs) that do not correspond to those men-tioned in the sales and customs documents, even if both parties agree. The only transferable sums are limited to the value of the goods indicated in invoices. Consequently interest and costs are not transferable to the creditor, even if agreed by both parties. It only becomes possible to transfer the interest and contractual indemnities resulting from the agreement of the parties in the frame of a legal procedure. In commercial dealings, parties may agree on commonly used interests (used in their business), on condition that it does not reach a level that can be considered as usurious. The date from which this interest will begin to be applied can be fixed by the parties in their agreement. In com-mercial business, the interest rate varies generally between six and ten percent, and cannot be capitalized.

35 Tunisia

GDP (2014 EST.)


-1.5 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of petroleum, mining, tourism, textiles, footwear, agribusiness, beverages




71.89 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSTU

NISIA


35 TUNISIA


35.2.1 General Depending on the outcome of the amicable debt collection pro-cedure, the documents available and debtor’s solvency, Atradius Collections will always make the most sensible recommendation as to whether or not it is worthwhile and economical to start legal proceedings.

35.2.2 Required DocumentsTunisian law requires original documents - invoices, orders, and shipping documents. However, a judge can accept “certified true copies” of the documents made by a third authority (Notary, Municipality), which can be problematic. Documents must be in French or Arabic language otherwise translation costs will be invoiced.

35.2.3 Legal Dunning ProcedureA Payment Order is the quickest procedure but it can only be used if the claim cannot be disputed. To be able to use this proce-dure, we need to view documents like bills of exchange, a written acknowledgment of the debt and unpaid cheques

35.2.4 LawsuitAn ordinary lawsuit is the most frequent used legal procedure in the absence of undisputable documents. This procedure can be very long and complex, and are frequently adjourned due to law-yers’ delaying tactics, extreme formality, bureaucracy of the legal system and judges and missing documentation. Enforcement of the final judgment is often very problematic if the debtor does not pay voluntarily to avoid attachments of movable or immov-able assets or seizure of his bank accounts. Most of the time, the legal procedure is so long that debtors have enough time to organize their insolvency.

35.2.5 CostsCourt costs are not particularly high in Tunisia. There is very lit-tle difference if we proceed with a Payment Order or a Writ of Summons. Creditors have to pay the costs of the Bailiff Notary plus 50 EUR. Creditors also have to settle the registry fees and judgment stamp, which are fixed fees of 100 EUR for the Writ and 50 EUR for the Payment Order. The party who appeals a judgment has to pay a 20 EUR appeal fee and 50 EUR to summon the adversary to appear. Registry fees and stamp for the judge-ment in appeal are also fixed fees to be paid by the winning party of 40 EUR. Lawyers’ fees depend on the specific case, varying 400 EUR to 1000 EUR and an extra appeal 500 EUR to 1,000 EUR for an appeal. Execution costs and fees vary considerably depending on the execution methods used.

35.2.6 Expected TimeframeA judgement is usually obtained 2 years or more depending on case specificity. The debtor can still appeal the decision, which can add to the case’s time.

35.2.7 Interest and Costs in the Legal PhaseThe legal interest rate, which is currently six percent in commer-cial matters, is fixed by the central bank according to the eco-nomic and financial situation. The interest can be granted by the court without having been the object of a pre-condition but this interest will begin to run only from the date of the summons up to full payment. Attorney’s fees are charged back to the debtor.

TAB

LE O

F CO

NTE

NTS

TUN

ISIA


35 TUNISIA


35.3.1 General The aim of an insolvency proceeding is to pay out all creditors equally by liquidating the assets of a debtor company or col-lecting the enforceable income of an individual who is declared bankrupt.

35.3.2 ProceedingsThe bankruptcy can be declared either on the written declaration of the debtor, or on summons of a creditor. The court can also take the initiative to pronounce the bankruptcy of the debtor. From the declaration of the bankruptcy, the creditors lodge their claims to the receiver (syndic) with a recapitulative listing of the attached documents with evidence of the debt. Creditors who do not produce their claims within eight days from the decree in bankruptcy, are warned by insertions in newspapers and by letters of the receiver that they have fifteen days left in which to lodge their claims. If the creditor is located outside the Tuni-sian territory, the deadline for declaration of debt is increased by thirty days. If the debt is disputed by the receiver (syndic), the creditor is informed by registered letter. The creditor then has a deadline of eight days to supply their written or verbal expla-nations. Once the checking of the claims made by the receiver is ended - which must be within 3 months from the decree in bankruptcy - the receiver sends to the Clerk’s Office the state-ment of debts. The Clerk’s Office then warns the creditors of the deposit of this statement by letter, indicating the sum for which their claim appears there. The Clerk’s Office informs the creditors whose claims are disputed by registered letter.

35.3.3 Required DocumentsThe creditor must lodge the debt with a recapitulative listing of the attached documents and evidences of the debt. This listing must be certified true, and has to be signed by the creditor or their representative. The file can be sent to the receiver, by reg-istered letter with acknowledgement of receipt.

35.3.4 Expected Timeframe and OutcomeThe whole duration of an insolvency procedure is hard to define, and depends on each case’s details. They can take several years to complete, often with very poor results.

TAB

LE OF CO

NTEN

TSTU

NISIA


35 TUNISIA

TAB

LE O

F CO

NTE

NTS

TUN

ISIA


36.1 Amicable Phase

36.1.1 GeneralAtradius Collections Turkey maintains a professional collection process, focusing on the relationship between client and debtor at all times. Our team of collection specialists carry out the col-lection process in-house, contacting both verbally and in writing whilst adhering to federal and state laws.

36.1.2 Local AgentWe use two experienced local debt collection attorneys as a debt collection company on our behalf. They can also represent us in court if legal action becomes unavoidable. They provide a com-prehensive collection service, including double-registered letters, faxes, collection calls, personal visits and debtor credit reports.

36.1.3 InterestContractual interest can usually be claimed. If no interest rate has been agreed contractually, the legal and default interest rate is set as per the maximum interest rate applied to foreign exchange accounts set by the Turkish public banks. As these rates fluctuate daily our lawyers advised to apply an average rate of 6%, and if the claim is in Turkish currency, the interest rate is significantly higher (approx. 20% p.a.)

36.1.4 Debt Collection CostsCollection costs can only be demanded from the debtor if these have been contractually agreed between creditor and debtor.

36 Turkey

GDP (2014 EST.)


-7.3 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of textiles, food processing, autos, electronics, mining, steel, petroleum, construction, lumber, paper




52.36 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSTU

RK

EY


36 TURKEY


36.2.1 GeneralThe Civil courts of 1st instance cover all civil cases other than those assigned to the Peace Courts. The Turkish judicial system is composed of High Courts, Courts of Appeal and the Supreme Court of Appeal, which is the last instance for reviewing judge-ments rendered by the lower courts. Even though the Turkish legal system is well organized and efficient, it can still be a slow process as debtors usually appeal and appoint experts to repre-sent them.

36.2.2 Required DocumentsIn order to proceed with the payment order a Power of Attorney is required, which must be notarised and legalised by the local Turkish Consulate. It is also possible to have the Power notarised and then have the apostil of the Hague convention applied. Original or original certified copies of all commercial documents, such as copy of invoices are required. In case of regular law-suit procedure, copies of the complete contractual documenta-tion should be available starting with the contract, orders, order confirmations, delivery notes, invoices as well as exchanges of correspondence. In the case of verbal negotiations we are in need of the visit and negotiations report, together with the names of witnesses.

36.2.3 Legal Dunning ProcedureThe first step is to get a Payment Order issued through the Bail-iff’s Office nearest to where the debtor is located. The debtor is summoned to pay or to declare their objections within 7 days from the serving of the Payment Order. If they fail to do so, they take the risk that all their assets are going to be attached.

The debtor has 3 options:

77 Pay the amount due and the disbursements

77 File an objection

77 Keep silent

If the debtor stays silent, the creditor will apply to the Bailiff’s Office and attach movable and immovable properties including bank accounts.

36.2.4 LawsuitIn cases where the debtor files an objection, no enforcement will be initiated and the creditor has to apply to the Commercial Court. It is also possible for the client to apply for the lawsuit di-rectly without applying for the Payment Order first. Fines can be imposed to debtors who have objected in bad faith provided the creditor can prove the bad faith. Parties will submit their peti-tions and replies, and in most cases the court will send the file to experts. Parties can then submit their objections to the expert’s report. The court will render its judgement after considering and examining all written petitions relating to the objections and al-legations by the parties, which can take a considerable time. If the court decides that the objection made by the debtor is not justified and the debtor appeals the decision, it is possible to pick up the enforcement. An appeal does not stop the enforcement unless the debtor submits a Bank Guarantee for the claim amount to the Bailiff’s Office.

36.2.5 CostsWe generally expect a fee of 20% of the claim to be paid to our attorney, 5% for Court costs and administrative expenses, and a further 15% attorney’s fees only on the collected amount only. If there is no collection, we just pay 5% of the claim amount for court costs, administrative expenses and research etc. The court costs are determined by the provisions of the Harclar Kanunu, laws nr. 492 (law for Turkish fees).

36.2.6 Expected TimeframeThe average duration of a legal dunning process is approx 8 months, whereas a court proceeding can take up to 3 – 4 years depending on case and circumstances.

36.2.7 Interests and Costs in the Legal PhaseIn the case of legal action, the Turkish judge may decide to dis-miss any interest claim depending on the circumstances sur-rounding the case, any dispute or the debtor’s financial situation. In all cases the losing party has to bear the costs of the legal pro-cedure according to art. 417 I Usul Hukuk Muhakemeleri Kanunu (Turkey Civil Process Law). In case of partially winning, the costs will be divided between the parties.

TAB

LE O

F CO

NTE

NTS

TUR

KEY


36 TURKEY


36.3.1 GeneralThe creditor will be seeking to get all the assets of the debtor liq-uidated in order to pay of all the debts. As the assets will not be sufficient to meet all the debts, creditors will be paid a percent-age of the monies owed to them on a pro-rata basis. However, as a bankruptcy would mean that the debtor no longer has any control over their company, the strategic implications of bank-ruptcy are much more important than the practical results. Un-protected creditors are mainly forced to act as renegade creditors for getting their money paid and therefore bankruptcy is usually engaged in order to make the debtor yield to the threat of bank-ruptcy, rather then for the sake of bankruptcy itself. Bankruptcy action will be started as an individual action by the creditor and will remain as an individual action right up to the moment the court declares the debtor bankrupt. This enables the initiating creditor to stall or stop the bankruptcy procedure in return for a payment or settlement.

36.3.2 ProceedingsA bankruptcy order of payment is served to the debtor. Regard-less of the debtor’s response to the order of payment, the credi-tor must take the matter to court and it has to be the court who will decide if bankruptcy will be declared against the debtor. The Court proceeding will be between creditor (as claimant) and debtor (defendant). However, any other third party creditors (other creditors) who believe that the outcome of the case will have an effect on them can ask the judge to accept them in the proceedings as parties with limited participation capacity. The creditor (claimant) has full control over the case and can decide to continue alone or to abort the case right until the moment the Court declares the debtor bankrupt. Once this happens, the creditor will no longer have sole control over these matters and all creditors will have to decide together. It will be the liquidators, who will have the power to make decisions from the moment of bankruptcy onwards. As soon as the debtor is declared bankrupt all creditors will be informed about the decision, and are now able to lodge their claim within a deadline of 1 month. In any event, if there is a dispute between the debtor and the creditor, the court must first resolve this dispute completely. A bankruptcy can be declared only after all disputes have been resolved by the Court (as an integrated phase of the bankruptcy case).

36.3.3 Required DocumentsCopies of invoices signed by the creditor and authenticated by a Public Notary certifying the signature that confirms the copy is a true copy of the original remaining unpaid according to the company’s official books. The document should bear the Apostil of the Hague Convention. However, a certified copy of the in-voice is not required if the buyer has accepted a bill of exchange or signed a promissory letter duly stamped. A Power of Attor-ney that has been notarised and stamped with the Apostil of the Hague Convention is also required.

36.3.4 Expected Timeframe and OutcomeA bankruptcy claim will typically take about one year from the start of the bankruptcy’s declaration if the debtor does not fight against it. If the debtor fights, it will take closer to 18 months. The actual liquidation can take anywhere from a few months to many years. The shorter the period is, the less likely it will be for an ordinary creditor to get any dividends paid. If the estate is complex and rich in assets, it may then take many years for it to be liquidated, but in such a case the chances of a dividend would be much higher for an ordinary creditor.

TAB

LE OF CO

NTEN

TSTU

RK

EY


36 TURKEY

TAB

LE O

F CO

NTE

NTS

TUR

KEY


37.1. Amicable Phase

37.1.1 General As professionals in collection we are in a position to provide the first class service and individual treatment and analysis of each case in order to successfully recover the overdue debt.

37.1.2 Local Agent Additionally, we offer an extra service of a meeting with the debtor at his place where your Client will be represented by our lawyers, who will run the negotiations on a case.

Taking into account the size of the country, it should be noted that the fee for a visit will include transport and accommodation costs.

37.1.3 Interest The business culture is not to pay the interest fee, so it is difficult to get a payment of it amicably.

If however an agreement is reached and the debtor is ready to pay the interest fine, as per the currency control and regulations, it is necessary:

77 to sign an additional agreement on the matter of payment of the interests;

77 to confirm these changes in the currency deal passport;

77 to issue an invoice from the creditor in the amount of interest;

77 to reconcile the payment with the debtor’s bank.

37.1.4 Debt Collection Costs The debt collection costs are not chargeable to debtors in Ukraine, as there is no such law present as for now. So, the payment of debt collection costs depends only on the contractual agreement between the creditor and the debtor.

37 Ukraine

GDP (2013 EST.)


0.9 %INDUSTRIES

Among the world’s largest producers of coal, electric power, ferrous and nonferrous metals, machinery and transport equipment, chemicals and food processing


-8.3 %IMPORTS ANNUAL GROWTH RATE (2013 EST.)


13.62 %



ALL DATA IN USD

UN

ITED K

ING

DO

MTA

BLE O

F CON

TENTS

UK

RA

INE


37 UKRAINE


37.2.1 General The Ukrainian legal system is composed of the civil law which regulates the relations between two people or companies.

Entering into legal procedure is possible without prior warning to the debtor. The letter about possibility of legal actions can be sent to the debtor as the last and final reminder in the end of amicable collection and such letter can be used as the prove that all pre-court efforts were fruitless, however, presence of such letter doesn’t guarantee that the court`s decision will be received faster.


The list of necessary documents for legal actions:

77 the contract signed by the parties with all appendixes;

77 all unpaid invoices;

77 the statement of account indicating payments and credit notes;

77 the transporting documents with the debtor`s mark proving the goods receipt and the customs declarations;

77 the correspondence and other documents related to the debt;

77 the extract from register about creditor company;

77 the power of attorney for our lawyer to represent the creditor.

All documents have to be provided in copies, assured by the notary, or original documents as it is necessary to translate all papers into Russian. The originals also have to be shown to the court during the first session.

If some documents are missing, it is necessary to provide expla-nations about this fact.

37.2.3 Legal Dunning Procedure The legislation of Ukraine doesn’t set the possibility of such kind of a procedure.

37.2.4 Lawsuit The regular lawsuit procedure is initiated directly after amicable collection failed due to a dispute by the debtor.

The claim is being submitted to the court and the court checks the documents and the ground of claim. If the claim is prepared and submitted correctly, the court announces the date of ses-sion which both parties have to be present. If it is necessary, the court may postpone the session and announce the date of another hearing. The parties will be informed about the outcome in writing by the responsible court.

In case the Commercial court solves the dispute, the parties have to select the judge from each side.

37.2.5 Costs Costs of the civil law procedure (court costs and fees) are deter-mined by the provisions of the civil law and not subject to any negotiation.

All costs depend on the amount of the outstanding. There are different fees which can apply during a procedure. It is difficult to declare exact total sum of litigation costs.

An exact cost estimation will be provided case by case should legal actions become necessary.

37.2.6 Expected Timeframe The average duration of the court procedure can take up to 6 months (at least) and longer depending on the complexity of the case as well as the availability of the judge.

37.2.7 Interests and Costs in the Legal Phase Out of court interests and costs can be claimed as part of the outstanding during the legal procedure. The outcome is highly dependable on the court and judge. Usually the court awards in-terests maximum amounted 10% from the principal amount in case those were requested from the debtor, however, there isn’t 100% guarantee that the interests will be awarded. The request of interests will increase the amount of court fee.

The defendant has to bear the court fee of the legal procedure in accordance with the Civil Process Law. Other expenses (i.e. the experts fee etc.) can be requested from the debtor, however, the decision if those are awarded from the debtor depends on the court.

UN

ITED

KIN

GD

OM

TAB

LE O

F CO

NTE

NTS

UK

RA

INE


37 UKRAINE


37.3.1 General

There are 2 kinds of insolvency:

77 The monitoring stage – so called financial rehabilitation, the company has to provide the debt repayment plan and the internal administrator is being appointed by the court. If the plan is fulfilled the company continues to operate.

77 The bankruptcy procedure – the court appoints the administrator who prepares the creditor`s list, receives the documents etc. The company is being liquidated once the procedure is over.

37.3.2 Proceedings The claim has to be submitted within 1 month since the court makes decision to start any insolvency procedure.

If the claim is not submitted in this term:

77 if financial rehabilitation is started – the creditor`s claim is not being rejected and the court makes decision on it only if the second stage is started (the creditor is being included in the 3rd list of creditors). If the financial rehabilitation is successfully completed, than it is possible to submit the claim in the general order.

77 if the bankruptcy procedure is started – the court decides if the creditor`s claim submitted after the deadline can be accepted or not (if the claim is being accepted, the court also decides the list of creditor`s the claim will be included in – 3rd or 4th).

37.3.3 Required Documents In order to lodge the claim on your behalf we are in need of the documents, requested in the point 37.2.2.

37.3.4 Expected Timeframe and OutcomeThe deadline to lodge claims is 1 month and starts from the date when the information about court`s decision is published in the official sources.

The whole duration of an insolvency procedure can’t be predict-ed exactly.

The outcome also can’t be predicted exactly and depends on the debtor company`s state at the moment when insolvency started.

TAB

LE OF CO

NTEN

TSU

KR

AIN

E


37 UKRAINE

TAB

LE O

F CO

NTE

NTS

UK

RA

INE


38.1 United Kingdom

38.1.1 Amicable Phase

38.1.1.1 General Our collectors try to collect the debt without recourse to legal ac-tion by telephone and letters. We always try to obtain payment of the debt in full but will negotiate with you to agree a payment plan or a settlement figure. In order to support this process in the UK we must issue a Letter before Claim, which is the start of the legal process. This is not used in all cases, only those where the collector considers that the debtor has the ability to pay and needs some strong evidence of our intentions. In England and Wales we can issue a copy of the proceedings that will be sent to the court in the event that the debtor fails to make payment. Where there is a dispute, we aim to reach an amicable solution between creditor and debtor. We do this by analysing all con-tractual documents (e.g. signed contracts, orders, confirmations, invoices and delivery notes as well as standard terms previously agreed upon). All investigations are completed with the assis-tance and agreement of our legal team.

38.1.1.2 Local Agent There is currently no availability for a field service to visit debt-ors in the UK.

38.1.1.3 Interest Late Payment of Interest Act

This act sets out to assist businesses faced with late payment problems. It does this by adding a number of rules to contracts between businesses. It is important to realise that this legislation only applies to a commercial debt. It does not apply when one of the parties is not acting as a business, for example sales to a private individual/consumer. The debt should be one that has arisen in the course of business. Both parties should be busi-nesses, commercial entities or public sector organisations. Inter-est is claimed at the Bank of England rate currently at 0.5% plus 8%. The rate is listed as the UK clearing bank base lending rate in the Financial Times and is also known as the repo-rate. The rate that applies is the rate in-force at the end of the day that the payment was due.

38 United Kingdom

GDP (2014 EST.)


11.5 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of machine tools, electric power equipment, automation equipment, railroad equipment, shipbuilding, aircraft, motor vehicles and parts, electronics and communications equipment, metals, chemicals, coal, petroleum, paper and paper products, food processing, textiles, clothing, other consumer goods




58.79 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSU

NITED

KIN

GD

OM


38 UNITED KINGDOM

38.1.1.4 Debt Collection Costs As well as interest, the supplier may also charge an amount to compensate for the costs of collecting late payments. The amount of compensation that can be claimed is determined by the amount outstanding as follows:

Amount Owed Compensation

Up to GBP £999 ...........................GBP £40 GBP £1,000 to £9,999 .................GBP £70 GBP £10,000 and over ................GBP £100

Change made under the Late Payment of Commercial Debts Regulations 2013 (Regulations) with effect from the 16th March 2013.

A supplier over and above the listed compensation costs may also claim any “reasonable costs“ incurred in recovering the debt as compensation.

38.1.1.5 Prescription The Limitations Act 1980

This outlines the time limit within which a creditor can chase a debtor for outstanding debts. This Act only applies when no con-tact has been made between the creditor and the debtor within the given time limit and only applies to residents of England and Wales. Creditors are given a fixed period of 6 years to chase their debtors, which is outlined in the Limitations Act 1980, and after this time it is no longer possible to pursue their debt.

38.1.1.6 Accepted and Most Common Payment MethodsThe UK still operates on payment by cheque, although the pre-ferred method is by Bank Transfer. If possible for long running payment plans we will seek Standing Order or Direct Debit but there is natural resistance to this by debtors.

38.1.1.7 Types of CompaniesThere are a number of company types and each has its own par-ticular requirements, which are listed below. One of the prime reasons why legal actions fail is because clients do not know the trading style of their debtor. An account opening form is highly recommended in order to support any legal action required at a future time.

77 Sole trader This is a business run by one individual. They are personally liable for the debt but in order to issue legal proceedings we must first be sure of the identity of the individual, such as name and, if possible date, of birth.

77 Partnership Business run by at least 2 individuals who have joint and several liability. Again we need to be sure of the correct identity of the individuals in order to pursue them legally. In these businesses each partner is responsible for the debt and can be pursued for the totality.

77 Limited Company This is a company run by Directorship. We can only pursue the company and not the individuals themselves.

38.1.1.8 Sources of InformationLimited Companies must register with the Official Register Com-panies House. Sole traders and partnerships are not required to do so. We are able to use several credit reference agencies in or-der to find out commercial details on Limited companies. In the case of individuals we are primarily reliant upon a trace agent to undertake personal on-line searches and qualify this information by means of calls to neighbours and other businesses.

TAB

LE O

F CO

NTE

NTS

UN

ITED

KIN

GD

OM


38 UNITED KINGDOM

38.1.2 Retention of Title There are 2 Types of Retention of Title

Simple and All Monies

77 Simple – title of the goods only passes to the buyer in respect of payment for each invoice relating to those goods

77 All monies – title of the goods only passes when the buyer has paid for all goods supplied

We will advise clients to enforce their retention of title. In the case of all monies the goods must be identifiable and for this reason it is not possible for Atradius Collections to enforce ROT on behalf of our customers, however, we will assist in any way we can.

38.1.3 Safeguarding Measures Occasionally a debtor will offer a personal guarantee for the debt but it is important to note that this must be legally enforceable.

38.1.4 Legal Procedures

38.1.4.1 General Within the United Kingdom there are several different and sepa-rate legal jurisdictions:

England and Wales; Scotland and Northern Ireland. While in general you can take the same actions in each country, these are the following differences:

77 Different solicitors

77 Different timescales

77 Different costs.

Generally speaking, the first stage of legal action in every ju-risdiction is the issuing of a Letter Before Claim (LBC). This is a letter sent to the debtor from the solicitor informing them that should they not make payment in full, legal proceedings will be issued.

If the LBC is not successful there are three main options:

77 County Court Judgement (CCJ)

77 Full Court Proceedings, generally a trial

77 Making a company insolvent, often called winding them up.

However, in the last option, there is no guarantee that making a company insolvent will recoup any of your monies. There are two steps to successfully recover your monies in the UK by tak-ing legal action. The first is obtaining the judgement and then the second is the enforcing of that judgement. Depending upon whether your debt is insured or un-insured will affect the initial stages of legal action. If your debt is insured and you have com-plied with all obligations under your policy then in most cases the Credit Insurance will contribute towards legal costs. You will still be consulted about the legal action but where a claim has been paid then Credit Insurance will direct such action. If Credit Insurance does not cover your debt then we will require you to agree legal action and costs in writing prior to commencement of litigation. We will also ask you to make payment on account for legal action, particularly if the case is defended.

38.1.4.2 Legal SystemCourt Process For Obtaining a Judgement in England and Wales

TAB

LE OF CO

NTEN

TSU

NITED

KIN

GD

OM


38 UNITED KINGDOM

38.1.4.3 CostsThese will differ greatly depending upon the type of legal action necessary and the jurisdiction in which we are taking action. In any case, our experienced collectors will have a full discussion with you regarding costs and timescales before legal action is commenced. Certain legal costs like some of the court costs can be charged to the debtor. The decision to allocate costs lies with the judge but in most cases approximately 60 – 70% of all costs are charged to the debtor’s account after successful judgement. We offer a highly competitive, fixed tariff for standard cases. For England and Wales, we are able to issue the Letter before Claim and proceedings from Atradius Collections. This offers a further cost reduction to the client and has proved to be most successful. Should the case become heavily defended at any time however, then it must be transferred to a solicitor. Legal costs for defended cases are charged at an hourly rate. This depends entirely on the nature of the case and the seniority and experience of the le-gal advice needed. Costs can range from GBP150 to GBP500 per hour. It is not possible at the start of the case to make an exact estimation of costs but it is clear to see that heavily-defended costs can easily equal or in exceed the value of the debt itself. For this reason we will advise on some form of negation and/or mediation. Indeed the UK Government has recently ruled that all cases must partake in some form of mediation before going to litigation. Details of this process are not yet available but we are currently working with a UK wide provider of these services to explore the possibility of providing up to date information and advice to our clients.

38.1.4.4 Expected TimeframeOn average pre legal actions like the LBC take 14 days after issue. Litigation action takes approximately 12 weeks for a standard case to reach judgment. The case is then transferred to the High Court to obtain the relevant documentation to proceed to en-forcement. This can take another 3 – 4 weeks. Enforcement can take up to an additional 12 weeks but depends entirely on the Sheriff’s ability to make contact.

38.1.4.5 Interests and Costs in the Legal PhaseThe solicitor will continue to add statutory interest and costs to the debt.

38.1.5 Enforcement

38.1.5.1 Enforcement in DebtThere are two steps to successfully recovering your monies in the UK, the first of which is obtaining the judgement followed by the enforcing of that judgement. There are several options for enforcement but the most common is via an Enforcement officer or Sheriff. Once a judgement is obtained, then enforcement action can be taken. A judgement does not necessarily lead to a success-ful collection. The enforcement officer will visit the premises to try and collect the monies, this can be a lengthy process lasting over several months.

38.1.5.2 Enforcement in Movable GoodsIf the debtor is not able to make any payments then the Sheriff can seize goods relating to the business as payment towards the debt through a notification of seizure, followed by the seizure it-self. Goods are sold by the Sheriff to realize funds, however, any costs involved in making the sale are deducted form the monies recovered.

38.1.5.3 Enforcement in Immovable GoodsIf the debtor owns property then we can apply for a Judgement Mortgage. This means that the property cannot be sold without first discharging the debt. There can be several judgement mort-gages against a single property so it is advisable to check the likelihood of success before incurring additional costs

TAB

LE O

F CO

NTE

NTS

UN

ITED

KIN

GD

OM


38 UNITED KINGDOM

38.1.6 Insolvency Proceedings

38.1.6.1 GeneralThere are a variety of insolvency types within the UK, ranging from a Voluntary arrangement offering a fixed percentage pay-out to creditors or administration where an administrator is ap-pointed to try and trade out the company, to liquidation where all assets are liquidated. A company can move between these states and we can best advise on a case-by-case basis. If we establish that your debtor has become insolvent we will advise you wheth-er there is any hope of a payment from them. We will also regis-ter your debt with the insolvency practitioner, and if it is judged that there will be dividends at some point in the future, we can monitor the debtor to claim the dividends when appropriate.

38.1.6.2 Required Documents77 Copy invoices

77 Copy orders, order confirmations and delivery notes


38.1.6.3 Expected Timeframe and OutcomeClaims usually need to be lodged in a formal insolvency within 6 months. The IP will write directly to the client in the first in-stance. In the UK Insolvencies can last up to 5 years.

38.2 Scotland Generally all straightforward debt actions will be taken in the Sheriff Court of the defendant’s residence or the court where the defendant trades.

38.2.1 Summary Cause ActionsA court action is commenced by the claimant preparing a sum-mons on a pre-printed form. Supporting invoices or a statement of account should be produced to the court along with the sum-mons. A copy of the summons will require to be served (issued) on the defender. This is done by the claimant’s lawyer – usually by recorded delivery post – and thereafter by sheriff officer if postal service is unsuccessful. With any summons there will be two critical dates -the return date and calling date. Generally the return date is the day when the defendant must return any docu-ment to the court whilst the calling date (always 7 days after the return date) is the date the case will call in court for a hearing. What happens if the claim is undisputed? If in response to the summons the defendant does nothing, the pursuer can ask for judgment (known as minuting for decree) by completing a pre-printed form. Judgment will be granted at the ‘calling date’. The court takes about three weeks to send the judgment to the claim-ant’s lawyer. However, where appropriate (in cases where the de-fender is an individual or small trader) the defender may admit liability and offer to make payment of the debt by instalments or by a deferred lump sum – known as a Time to Pay Direction or Time to Pay Order.

38.2.1.1 Ordinary ActionsUnlike summary cause there are no pre-printed forms. The writ will be drafted and forwarded to the court. The defender has 21 days after service of the writ to decide what action to take.

38.2.1.2 Defendant’s ResponsesThere are various ways the defendant can respond to the service copy writ. They can do nothing meaning the claimant can, on the expiry of 21 days, minute for decree. If the defendant admits the claim and makes a payment offer, the claimant completes the appropriate form and sends it to the court. If the offer is unac-ceptable, the case will call in court and the court will decide if the application should be granted. The court takes about three weeks to send the judgment to the claimant’s lawyer.

TAB

LE OF CO

NTEN

TSU

NITED

KIN

GD

OM


38 UNITED KINGDOM

38.2.2 Enforcement of DecreesThe responsibility for enforcing sheriff court decrees falls on sheriff officers. The generic term for Scottish enforcement is known as ‘diligence’. Different measures are employed depend-ing on whether the defendant’s moveable property is situated either out with or within a dwelling house. The effectiveness of diligence can best be described as a ‘filtering process’ with the slow payers settling earlier on in the enforcement regime. Judge-ment enforcement in Scotland was radically reformed by the Debt Arrangement and Attachment (Scotland) Act 2002 and will be enhanced following implementation of the Bankruptcy and Diligence (Scotland) Act 2007. The legislation deals more sym-pathetically with individual consumer debtors but commercial debtors have less protection.

38.2.3 The Debt Arrangement SchemeA central feature of the 2002 Act is the Debt Arrangement Scheme available to individuals and sole traders, allowing them the opportunity of repaying their debts in a managed way over a given period of time without the threat of enforcement. Such individuals should have surplus income to repay their debt by instalments. During the existence of a DAS judgement, enforce-ment and applications for the debtor’s bankruptcy will be pro-hibited. It will also be considered incompetent to carry out judge-ment enforcement whilst an application is being considered.

38.2.4 Charge for PaymentBefore commencing judgement enforcement, the sheriff officer serves a charge, which is a formal written request, on the de-fendant. It requests payment of the principal debt, interest and charges, and requires that it be paid within 14 days.

38.2.5 Detailed Examination of Attachment OrdersAttachment orders will most often be used for business-to-business debts where it is obvious goods are out with a dwell-ing house. How does the Act define dwelling house? There is no definition of ‘dwelling house’ but it does not include: A garage, even although it forms part of the structure or building, which consists of or includes the dwelling house, or other structures or buildings used in connection with the dwelling house. The effect of this is that all items stored within a garage, including a car, can be attached by an attachment order even although it is obvious the debt may be consumer.

38.2.5.1 How does the Sheriff Officer Carry Out the Attachment?Entry and valuation.

The enforcement officer enters the property and values the articles being attached at a price, which they are likely to fetch if sold on the open market.

38.2.5.2 Reporting the AttachmentThe attachment must then be reported to the court within 14 days (s.18).

38.2.5.3 Removal and Auction of Attached ArticlesOnce the report of the attachment has been received by the sheriff, arrangements can be made for the removal and sale of the articles. The officer gives seven days notice to the debtor of the date specified for the articles’ removal and may open, shut and lock fast places for this purpose. Any articles which were attached but not removed will no longer be subject to the attach-ment order. The auction of the removed articles shall not take place until at least seven days after the articles have been re-moved. There are various actions in relation to the attached arti-cles, which are unlawful after their attachment and prior to their removal such as their removal, their gift, damage or destruction. In these circumstances a further attachment may be competent. Can a debtor stop the process? The debtor can make an applica-tion to the sheriff requesting the attachment should be lifted on the grounds that the aggregate value of the attached articles is substantially below the aggregate of the prices they are likely to fetch if sold at auction.

38.2.5.4 How to Attach Articles Kept in Dwelling HousesTo provide improved debtor protection, the Act has introduced the Exceptional Attachment Order. However, if granted, an ex-ceptional attachment order will still allow for the debtor’s goods being valued and attached by the order, which can thereafter be removed for auction and subsequent sale.

TAB

LE O

F CO

NTE

NTS

UN

ITED

KIN

GD

OM


38 UNITED KINGDOM

38.2.5.5 Examination of Exceptional Attachment Orders Unlike attachment orders which, in effect, will be available to creditors on demand on all occasions (although subject to condi-tions), an exceptional attachment order will only be granted on a specific application being made by the creditor to the sheriff. Creditors should note that a whole host of items are exempt leav-ing only ‘luxury’ items being capable of attachment. Before com-mencing the procedure a charge for payment has to be served.

38.2.5.6 How is an Application for an Exceptional Attachment Order Made?An Exceptional Attachment Order will only be granted on appli-cation by the creditor, which the sheriff may grant on there being certain matters satisfied, and also that there are exceptional cir-cumstances. If these exceptional circumstances exist the sheriff will grant the order. However, the order will only apply to ‘non-essential’ assets of the debtor kept in any dwelling house speci-fied in the application. What are the exceptional circumstances? The exceptional circumstances that must exist before granting an exceptional attachment order are an effort to encourage less in-trusive enforcement. They include negotiations, arrestment and earnings arrestment (attachment of earnings), which should be first attempted. Also the sheriff must be satisfied that there is a reasonable prospect the sum recovered from an auction of the debtor’s non-essential assets would be at least aggregate to a rea-sonable estimate of any chargeable expense, minus £100. Sub-ject to exceptional circumstances existing, what matters will the sheriff take into account in deciding whether to make the order?

These include: The nature of the debt, and in particular, whether the debt incurred relates to any tax or duty or any trade or busi-ness carried on by the debtor. Whether the debtor resides in the dwelling house specified in the application. Whether the debtor carries on a trade or business in that dwelling house. Whether money advice has been given to the debtor. Any agreement be-tween the debtor and creditor for the settlement of the debt, and whether a time to pay direction or time to pay order has been entered into but not adhered to. So subject to the condi-tions of the Act being fulfilled, the sheriff may more readily grant an exceptional attachment order in relation to the jobbing builder who carried on business from his house (essentially a commercial debt) as opposed to a consumer who has fallen into arrears with credit card repayments.

38.2.5.7 What is the Effect of an Exceptional Attachment Order?

The exceptional attachment order shall have the following effects:

77 To authorise the attachment, removal and auction of the debtor’s non-essential assets kept in any dwelling house specified in the application. It will also specify a period during which the order is executed.

77 Empower the officer to open shut and lock fast places for the purposes of executing the order. The officer must be satisfied there is a person in the house not younger than 16 and capable of understanding the procedures being carried out. Failing this forced entry can still be taken subject to four days notice being given.

Does the sheriff have any other powers? Before deciding wheth-er to make an exceptional attachment order, the sheriff may make an order for a visit to the debtor by a person specified for the purpose of giving money advice to the debtor, or such other order as the sheriff may think fit. When are the attached articles removed? The sheriff officer shall ‘unless it is impractical to do so immediately remove any article attached by an exceptional attachment order from the dwelling house’. Where, however, it is impractical to remove the articles immediately then the sheriff officer shall give more notice to the debtor for the date arranged for their removal. When can the articles be sold and can the debt-or redeem them? Articles cannot be auctioned until seven days have passed since their removal from the dwelling house. Within the seven-day period the debtor can redeem the goods at the value fixed by the sheriff officer, the consequences being that once so redeemed the article will cease to be attached.

TAB

LE OF CO

NTEN

TSU

NITED

KIN

GD

OM


38 UNITED KINGDOM

TAB

LE O

F CO

NTE

NTS

UN

ITED

KIN

GD

OM


39.1 Amicable Phase

39.1.1 General Atradius Collections USA maintains a professional collection pro-cess, focusing on the relationship between client and debtor at all times. We pursue debtors within the bounds of federal and state laws and liaise with clients and the relationship manage-ment team to ensure that we service our clients efficiently and effectively. Collectors work to ensure that, if the initial collec-tion phase is not productive, the file is adequately documented to fully utilize the second tier of the collection process, the legal phase. Where there is a dispute, we aim to reach an amicable solution between creditor and debtor. We do this by analysing all contractual documents (e.g. signed contracts, orders, confir-mations, invoices and delivery notes as well as standard terms previously agreed upon). All investigations are completed with the assistance and agreement of our legal team.

39.1.2 Local AgentWe have a network of local attorney’s to assist with collections if necessary. Currently we do not offer debtor site visits in the USA.

39.1.3 InterestsAtradius Collections USA may charge interest back to debtors. Currently, we add 4% interest to each case placed with our of-fice. However, in most states, if no signed contractual agreement exists then we cannot exert legal means to collect the interest. If the contractual interest is greater than 4% than the interest we charge will match that of the agreed amount. US based debtors are not used to paying interest. Often the actual amount of the interest is considered a negotiation tool between debtors and col-lectors.

39.1.4 Debt Collection CostsCollection costs cannot be added to a case unless a signed con-tractual agreement exists between debtor and client. However, even if the contractual agreement includes collection costs they are often used as a negotiation tool between debtors and collec-tors.

39 United States of America

GDP (2014 EST.)


4.3 %INDUSTRIES

Among the world’s largest and most technologically advanced producers of high-technology, petroleum, steel, motor vehicles, aerospace, telecommunications, chemicals, electronics, food processing, consumer goods, lumber, mining




43.65 %



ALL DATA IN USD

TAB

LE OF CO

NTEN

TSU

NITED

STATES


39 UNITED STATES

39.1.5 Prescription The statute of limitations governs the time period within which a lawsuit must be commenced. Statutes of limitation vary from state to state, and generally are between 2 and 10 years for an open account or sale of goods, and between 3 and 15 years for a written contract.

77 The limitation period is suspended or recommenced if the debtor acknowledges the balance by partial payment or

77 Legal action is undertaken prior to the expiration of the statute.

39.1.6 Accepted and Most Common Payment Methods The most common payment methods are bank transfers, wire transfers and check payments.


39.1.8 Sources of Information In the USA we have the ability to assess the status of debtors businesses including real estate and other assets through busi-ness reports and in-house skip tracing. In combination with our own phone contacts, we can obtain an accurate impression of a debtor’s financial situation and we are able to recommend next steps. In most of the fifty states companies register with the Sec-retary of State, which can be accessed online. We have direct access to these websites and can obtain additional information on shareholders, status and some corporate developments, which may be published. A debtor with an unknown address can be traced by our in-house skip tracing efforts. We are able to access many different websites to assist in locating the debtor including business financial reports and insolvency websites. We also have the ability to employ external skip tracing agencies for additional information for additional fees.

39.2 Safeguarding MeasuresA client can safeguard their debt from US based debtors by hav-ing a signed personal guarantee in place upon sale of goods or services. A signed personal guarantee gives creditors the right to pursue personal assets if the debtors company defaults.

Sole Proprietorship (sole trader/proprietorship)

77 No legal distinction between owner and business

77 Owner has unlimited responsibility for all losses and debts

Limited Liability Company (LLC) 77 Legal form of company that provides limited liability to its owners

77 The owners of the LLC, called members are protected from some or all liability for acts and debts of the LLC depending on state shield laws

77 The principals of LLC’s can use many different titles (i.e., member, manager, managing member, managing director, chief executive officer, president, and partner). As such, it can be difficult to determine who actually has the authority to enter into a contract on the LLC’s behalf

Corporations 77 Corporations are created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members

77 Shareholders of business corporations have “limited” liability for the corporation’s debts and obligations

77 Several different types of corporations exist (i.e., C Corporations, S Corporations, LLC’s, etc.)

TAB

LE O

F CO

NTE

NTS

UN

ITED

STA

TES


39 UNITED STATES


39.3.1 General The judicial system in the United States is unique as it is actually made up of two different court systems: the federal court system and the state court systems. While each court system is respon-sible for hearing certain types of cases, neither is completely in-dependent of the other, and the systems often interact. Solving legal disputes and maintaining legal rights are key goals of both court systems.

39.3.2 Legal SystemThe US legal system is comprised of 51 separate legal systems: the federal court system and the court systems of the 50 states. The vast majority of commercial collection matters are handled through State and County Courts.

39.3.3 Required DocumentsIn order to apply the legal dunning procedure we are in need of a clear statement of account indicating payments and credit notes, which have been booked regarding the outstanding invoices. In case of a lawsuit procedure the attorney assigned will require copies of the complete contract, orders, order confirmations, de-livery notes, invoices etc. Every step of the relationship should be provable by documentation. In case of dispute also the “side conversations” or email conversations between debtor and client should be kept and provided to the assigned attorney.

39.3.4 Legal Dunning ProcedureThis is most commonly known as the initial legal procedure. The attorney assigned to the case is required to take efforts to collect or settle the outstanding debt prior to commencing any legal ac-tions. If the debtor fails to respond or pay the outstanding debt in the initial phase then the attorney will provide recommenda-tions and suggestions for further action and costs of same. Once an attorney is involved the attorney will charge a commission fee on any collected amount.

39.3.5 LawsuitOnce the attorney receives the suit requirements and any nec-essary documentation, he will prepare the summons and com-plaint, and file both with the clerk of the court. It is advisable that lawsuits are filed nearest to the debtor’s location. All courts require personal service of process upon the debtor and most courts require that the defendant be served with the summons and complaint within 90 to 180 days of when the lawsuit is filed. The courts will frequently dismiss the lawsuit if the debtor is not served within the state’s statutory period of time for service of process.

39.3.6 AppealAppeals are limited to cases in which there is a legal dispute as to how the law is applied to the facts of the case. Factual issues cannot be appealed.

39.3.7 CostsUS legal collections are handled by local attorneys on a contin-gency fee basis. Our attorney will submit to us his recommen-dations and suit requirements. The suit requirements consist of court costs and a non-contingent suit fee where the non-contin-gent suit fee can be up to 5% of the balance placed for collection. That amount is credited toward an overall contingent suit fee of 10% plus the previously mentioned commission fee charged on any collected amount. The only exception to the contingency fee arrangement is if the account is heavily disputed, or if the debtor files a counterclaim against our client. An attorney then must defend the client against the counterclaim and in those cases the chosen attorney will require compensation at an hourly rate.

39.3.8 Expected TimeframeThe average duration of a legal dunning process is between 7 and 30 days, whereas a court procedure can take up to 2 years or longer depending on the complexity of the case as well as the backlogs of the courts in that jurisdiction.

39.3.9 Interests and Costs in the Legal PhaseUnless the creditor has a signed contractual agreement allowing interest, it is only allowed by the courts once judgment has been filed. All other fees and collection costs are at the discretion of the presiding judge and in most cases are never allowed.

TAB

LE OF CO

NTEN

TSU

NITED

STATES


39 UNITED STATES

39.3.10 Arbitration and MediationIt would be rare, unless included in a signed contractual agree-ment, to use arbitration or mediation prior to filing a lawsuit against the debtor. The US courts are increasingly backlogged. More courts are requiring that parties to a lawsuit submit to non-binding mediation or arbitration before a case will be allowed to proceed to trial. Mediation or arbitration is an informal process by which an arbitrator or mediator meets with the parties’ at-torneys and one or two witnesses for each side. The parties each present their documentary evidence and one or two witnesses.

The mediator/arbitrator will discuss the strengths and weakness-es of each party’s case and will make a recommendation about a probable outcome at trial. If both parties agree with the recom-mendation, a settlement agreement is submitted to the court. The recommendation of the mediator or arbitrator is non-binding, and either party can choose not to accept the recommendation. Nevertheless, there is one important consideration for the party that chooses not to accept the recommendation. If that party re-ceives a lesser result at trial than what the mediator/arbitrator recommended, that party must pay the opposing party’s attor-ney’s fees.

39.4 Enforcement

39.4.1 Enforcement in DebtAfter the Court enters the judgment order, our attorney records the judgment in the public record. The recording makes the judgement a lien against the debtor’s current or after-acquired property. Judgement liens will remain valid and enforceable from 5 to 25 years after the date of entry, depending on the jurisdic-tion. Post-judgment interest accrues from the date the judgment was entered, at the state’s statutory rate, if the Court includes post-judgement interest in the judgement order. Our attorney will engage in post-judgement discovery if he is unable to locate attachable assets for the judgement debtor. Post-judgement dis-covery can include interrogatories, requests to produce financial documents, and depositions of the debtor’s principals, in order to learn the nature, extent and locations of the debtor’s assets. If the debtor does not respond to post-judgement discovery re-quests, the court can issue a body attachment for the judgment debtor’s principal. If that becomes necessary, the principal will be held in jail until he gives sworn testimony in court about his assets.

39.4.2 Enforcement in Movable GoodsThe judgment must be served upon the defendant through ser-vice of process, after which the Court will enter a writ of ex-ecution. The writ of execution allows the judgement creditor, through the court and local sheriff or bailiff, to garnish bank ac-counts, seize and sell property, and in some states, place a keeper in the debtor’s business to seize all monies received on the days that the keeper is present. All out-of-pocket costs to execute on the judgement are chargeable to the judgement debtor. Costs may include garnishment fees, sheriff or bailiff fees, keeper fees, and any fees involved in seizing and selling the judgement debt-or’s property.

39.4.3 Enforcement in Immovable GoodsIf the debtor owns real estate, it is possible to receive a record-ing of claim in the land register and to then if attachable, either force; the attachment, the attachment and sale or, in case there are tenants the sequestration of the real estate by court order. All of these processes are more expensive than the others and requires patience. Recording of claims could take several weeks to one month and afterwards having the land or real estate up for sequestration or sale and sold could take several months to several years.

39.4.4 Expected TimeframeEnforcements of movable goods have a wide time frame. It could take four to six weeks to receive funds on the placement of a keeper and up to six months or longer on seizing and eventually selling any assets. This time frame will vary within the 50 States. The time frame for enforcements of real estate is the most dif-ficult to estimate. In most cases there are other creditors such as financial institutions ahead of us. The most difficult phase of this process is finding a buyer willing to pay market value for the real estate. In many cases, property could go unsold for months if not years.

TAB

LE O

F CO

NTE

NTS

UN

ITED

STA

TES


39 UNITED STATES


39.5.1 General Bankruptcies are controlled by federal law, which prevents any collection effort or litigation from proceeding, so long as the bankruptcy petition is pending. More bankruptcies are being filed as ‘no asset’ bankruptcies, in which the debtor gives a sworn statement that there are no assets to satisfy creditors. Creditors are not allowed to file proofs of claim in a ‘no asset’ bankruptcy, unless the bankruptcy trustee locates assets. In that case, the bankruptcy court will notify creditors to submit proofs of claim. In bankruptcy filings where there are assets and creditors file proofs of claim, it can take from 12 to 24 months to learn if the creditor will receive distributions from the bankruptcy estate.

39.5.2 ProceedingsThere are two different types of bankruptcy proceedings.

77 Chapter 7 – Liquidation A Chapter 7 filing is the most common form of bankruptcy. Liquidation involves the appointment of a Trustee who collects the non-exempt property of the debtor, sells it and distributes the proceeds to the creditors. Because each state allows for debtors to keep essential property, most Chapter 7 cases are “no asset” cases meaning there are not sufficient non-exempt assets to fund a distribution to creditors. When there are assets available for liquidation a proof of claim may be filed. The proof of claim must normally be filed within 90 days of the original file date of the bankruptcy.

77 Chapter 11, 12 & 13 – Reorganization Bankruptcy under Chapter 11, 12, or 13 are more complex reorganization and involves allowing the debtor to keep some or all of their property and to use future earnings to pay off creditors. Proofs of claims are required to be filed for consideration of any payout or dividends.

Chapter 7 or Chapter 13 is usually filed by consumers or person-al guarantors and Chapter 11 is normally filed by companies or corporations. Individuals filing Chapter 11 are allowed, but rare. Chapter 12 is similar to Chapter 13 but is available only to farm-ers and fisherman in certain situations and a chapter 12 generally has more generous terms for debtors.


In order to file the claim on your behalf we are in need of:



77 Copies of statement of account and

77 The original claim form signed by the original creditor

39.5.4 Expected Timeframe and OutcomeThe deadline to file claims is normally within 90 days of the original filing date of the proceedings. It may take 12-24 months to find out if any dividends are available for distribution. The duration of a bankruptcy proceeding is between 6 months and 5 years.

39.5.5 RescissionIn the Preferential Payment Period or 90 days prior to the file date of the bankruptcy the trustee can dispute payments made by the debtor to the original creditor. If the trustee disputes these payments, the creditor has to refund them and can only file a claim for the corresponding debt instead.

TAB

LE OF CO

NTEN

TSU

NITED

STATES


39 UNITED STATES

TAB

LE O

F CO

NTE

NTS

UN

ITED

STA

TES


Legal NoticeThis document and the information contained herein are con-fidential and provided for informational purposes only. Neither this document nor the information contained herein may be modified or reproduced, disclosed or redistributed, in whole or in part, by mail, facsimile, electronic or computer transmission or by any other means to any other person except as required by appli-cable law or with the prior written consent of any of the Atradius Collections entities. The information contained in this document is subject to change without notice. By using this document you agree to be bound by the limitations set out in this Legal Notice. This document is not intended to provide legal advice or facts, and should not be relied on or treated as a substitute for specific advice concerning individual situations. As the user, the onus is on you to exercise and to verify the accuracy, completeness or relevance of such information and to obtain specific (legal) ad-vice regarding your individual case. The scope of any services to be provided by Atradius Collections depends on the specific terms and conditions of the underlying agreement with Atradius Collections. No rights can be derived from the content of this document.

The information contained in this document has been obtained from sources, which Atradius Collections believes to be reliable. Atradius Collections has not independently verified the truth or accuracy of this information. As a result, the information in this document is provided ‘as is’ without warranty of any kind and Atradius Collections provides no representation or warranty, whether express or implied, as to the accuracy, reliability, completeness or fitness for any particular purpose of any information contained in this document. In addition, Atradius N.V., its subsidiaries, affiliates and controlling persons do not accept any liability whatsoever for any loss or damage as a result of errors or omissions in the information, or for damages resulting from use, misuse or inability to use the information in this document. This document may provide references to other web sites for your convenience in locating related information and services. These web sites have not necessarily been reviewed by Atradius Col- lections and are maintained by third parties over which Atradius Collections exercises no control. Accordingly, Atradius Collec-tions expressly disclaims any responsibility for the content, the accuracy of the information, the quality of products or services provided by or advertised on these third party web sites.

Copyright Atradius

TAB

LE OF CO

NTEN

TSLEG

AL N

OTIC

E


Atradius Collections Contact DetailsAtradius Collections Head Office

David Ricardostraat 1 1066 JS Amsterdam Tel. + 31 (0)20 553 2000

Atradius Collections Australia

Level 5, Export House 22 Pitt St, Sydney NSW 2000 Tel. + 1 800 737 638

Atradius Collections Belgium

Avenue Prince de Liège, 74-78 5100 Namur Tel. + 32 (0)81 324 313

Atradius Collections Brazil

Av. Angélica, 2546 – Conjunto 81 - 8th floor, CEP 01228-200 São Paulo, Brasil

Atradius Collections Canada

1 City Centre Drive, Suite 310 Mississauga, Ontario L5B 1M2 Tel. + 1 905 804 4229

Atradius Collections Czech Republic

Amazon Court, Karolinská 661/4 186 00 Praha 8 Tel. + 420 236 089 257

Atradius Collections Denmark

Sluseholmen 8A 2450 København SV Tel. + 45 3326 5001

Atradius Collections France

44, Avenue Georges Pompidou 92596 Levallois-Perret Tel. + 33 (0) 141 05 75 71

Atradius Collections Germany

Opladener Straße 14, D-50679 Köln Tel. + 49 (0)221 2044 3666

Atradius Collections Hong Kong

4306 Central Plaza 18 Harbour Road, Wanchai Tel. +852 3657 0909

Atradius Collections Hungary

Fehérvári út 50-52 H-1117 Budapest Tel. + 36 (0)1 382 7892

Atradius Collections Ireland

43b Yeats Way Park West Business Park Dublin 12 Tel. + 353 1 242 0100

Atradius Collections Italy

Via Roberto Bracco 6 20159 Milano Tel. + 39 02 63241 528

Atradius Collections Mexico

Av. Miguel Ángel de Quevedo 696 Villa Coyoacán, Coyoacán CP 04000 México D.F. Tel. + 52 (55) 5484 0022

Atradius Collections Poland

ul. Prosta 70 00-838 Warszawa Tel. + 48 (0)22 395 4700

Atradius Collections Singapore

8 Shenton Way #31-02 Singapore 068811 Tel. + 65 6372 5300

Atradius Collections Spain

Paseo de la Castellana, 4 - 4ª planta 28046 Madrid Tel.: + 34 91 590 23 78

Atradius Collections Sweden

Rådmansgatan 69, PO Box 6800 113 86 Stockholm Tel: +46 8 566 221 00

Atradius Collections Switzerland

Klausstrasse 43 CH-8034 Zürich Tel. +41 (0) 43 300 63 73

Atradius Collections UK

3 Harbour Drive Capital Waterside Cardiff Bay - CF10 4WZ Tel. + +44 29 20 82 47 00

Atradius Collections USA

1200 Arlington Heights Road, Ste. 410 Itasca, IL 60143 Tel. + 1 888 283 8718

TAB

LE O

F CO

NTE

NTS

CON

TAC

T

AtradiusCollectionsHeadOfficeDavid Ricardostraat 1

1066 JS Amsterdam The Netherlands

Tel. + 31 (0)20 553 2000

www.atradiuscollections.com

http://www.atradiuscollections.com