Substantial reforms to Regulation (EC) 1346/2000 on insolvency proceedings were made under Regulation (EU) 2015/848 of 20 May 2015 on insolvency proceedings (recast) (the "Recast Insolvency Regulation"). The Recast Insolvency Regulation applies to insolvency proceedings commenced on or after 26 June 2017. Following changes to the insolvency laws in a number of Member States, the European Commission has adopted new Annexes A and B, which contain the details of the insolvency proceedings and insolvency practitioners falling within the scope of the Recast Insolvency Regulation.
A process can only be an "insolvency proceeding" within the meaning of and for the purposes of the Recast Insolvency Regulation if it is listed in Annex A of that Regulation – as Recital 9 makes clear, Annex A contains an exhaustive list of those insolvency proceedings which will benefit from the provisions of and be recognized under the Regulation. National insolvency procedures not listed in Annex A are not covered by the Recast Insolvency Regulation.
Equally, "insolvency practitioners" to whom the Recast Insolvency Regulation applies are defined in that Regulation and must be listed in Annex B.
Regarding Annex A, since January 2017, several Member States (including Croatia, Portugal and Belgium) have notified the European Commission of changes to their domestic law that introduce new types of insolvency proceedings. As these comply with the requirements of the Recast Insolvency Regulation, it was necessary to amend Annex A to include them. It was also felt that the modification of these national insolvency laws indicated a shared willingness of countries within the European Union to have an insolvency law with enhanced effectiveness.
Accordingly, Regulation (EU) 2018/946 of 4 July 2018 came into effect on 26 July 2018 and replaces Annex A. It introduces in particular:
- for Portugal, a "special procedure by agreement for payment" for debtors (other than companies) encountering serious financial difficulties without being insolvent;
- for Croatia:
- a pre-insolvency procedure enabling an accelerated financial restructuring;
- "an insolvency procedure for consumers" for debtors who are natural persons acting outside their professional activity; and
- "an extraordinary administrative procedure for businesses having a systemic importance for Croatia" (also known as the Lex Agrokor).
Furthermore, regarding Annex B, by virtue of a law which entered into force on 1 May 2018, Belgium reformed the powers of its judge delegated to the procedure. This modification to Belgian law requires that its judge delegated to the procedure be removed from the list of insolvency practitioners for Belgium in Annex B .
The Recast Insolvency Regulation (which may be consulted by clicking here) remains in effect. However, the most recent Annexes are those contained in Regulation (EU) 2018/946 of the European Parliament and of the Council of 4 July 2018 (which may be consulted by clicking here).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.