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Support for debt recovery across borders

All Rights Reserved © Laura Doss/Corbis

Many small and medium-sized enterprises (SMEs) are reluctant to operate outside the borders of their own country, as they are afraid of encountering burdensome procedures when trying to claim payments for their products and services. SMEs often find it too daunting, complicated or expensive – because of consulting fees, legal counsel, document translation, etc. – to pursue legal action against companies or individuals in other Member States.

The European Commission has kicked off a campaign to inform SMEs how to take advantage of existing laws and tools in order to more easily and successfully pursue debtors in other countries.

‘These difficulties are especially damaging in the current economic crisis, when going abroad to do business is no longer merely an option, but in many cases a necessity to become more competitive,’ European Commission Vice-President Antonio Tajani said. ‘Facilitating the recovery of cross-border debts is key to addressing this issue at a time when Europe’s SMEs face particular obstacles to tapping cross-border markets.’

The EU already has a system of laws which are designed to help businesses with cross-border litigation, including legislation governing contractual obligations (the principle of free choice of law abides) and competent jurisdiction (generally the courts of that Member State in which the defendant is domiciled), as well as procedural tools for simplifying cross-border debt recovery. However, utilising the processes available is often daunting, and the Commission’s campaign will help SMEs tap into the legal resources at their disposal.

The European Commission is also organising a series of national events to provide SMEs that operate across borders with information on credit and claims management. The events will be held in all 27 EU Member States plus Croatia from March 2013 to June 2014.

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