EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

Annexes A and B are decisive in defining the scope of application of Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings. They list exhaustively those insolvency proceedings or insolvency practitioners, respectively, of the Member States’ laws, to which the Regulation applies. It is, therefore, of utmost importance that these Annexes are regularly updated in order to reflect the actual legal situation in the Member States.

Pursuant to Article 1(1), to point (4) of Article 2 and to recital (9) of the Regulation, national proceedings qualify as ‘insolvency proceedings’ in the context of the Regulation only if they are listed in Annex A thereto. Similarly, pursuant to point (5) of Article 2 and to recital (21) of the Regulation the persons and bodies that comply with the definition of ‘insolvency practitioner’ of the Regulation are listed in Annex B.

In October 2020, the Netherlands notified the Commission on recent changes of its domestic insolvency law introducing a new preventive insolvency scheme, as well as new types of insolvency practitioners. This was followed in December 2020 by notifications from Italy, Lithuania, Cyprus and Poland.

The Commission has carefully analysed the notifications of the said Member States in order to ensure compliance of the notifications with the requirements of the Regulation.

Regulation (EU) 2015/848 should therefore be amended accordingly.

•Consistency with existing policy provisions in the policy area

Regulation (EU) 2015/848 is an important instrument of civil judicial cooperation at EU level. The efficient treatment of cross-border insolvencies of debtors with their centre of main interests in a Member State requires that the scope of the Regulation reflects the actual state of play of domestic insolvency laws. This proposal aims at ensuring that the scope of the Regulation is adjusted to the actual legal framework of the Member States on insolvency by the time of its application. Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019 on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, and amending Directive (EU) 2017/1132 (Directive on restructuring and insolvency) establishes minimum standards both for preventive restructuring procedures available for debtors in financial difficulty, when there is a likelihood of insolvency, and for procedures leading to a discharge of debts incurred by over-indebted entrepreneurs and allowing them to take up a new activity. National insolvency proceedings transposing this Directive may be covered by the scope of Regulation (EU) 2015/848, if they comply with the requirements of the Regulation vis-à-vis national insolvency proceedings and are included in Annex A of the Regulation.

•Consistency with other Union policies

The Regulation has an important supportive role to the freedom of establishment, to the freedom to provide services and to the free movement of persons.

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

•Legal basis

The proposal is based on Article 81 (2) (a), (c) and (f) of the Treaty on the Functioning of the European Union.

•Subsidiarity (for non-exclusive competence)

Regulation (EU) 2015/848 falls under the shared competence of the European Union. Regulation (EU) 2015/848 provides for a comprehensive set of rules directly applicable to cross-border insolvency proceedings which are referred to in the Annex A and to types of insolvency practitioners referred to in Annex B.

The current proposal however merely modifies these Annexes in order to accurately reflect the content of national notifications and adapt the Annexes containing the lists of national procedures, or types of insolvency practitioners, respectively, in this field. These changes do not affect any of the obligations and rules set out in the Regulation itself.