EC seeks cross-border debt collection solution

BRUSSELS - The European Commission recently proposed a new rule allowing firms better access when attempting to collect funds owing from one bank account to another in advance of a judgment. The Commission – the executive branch of the European Union – said that the proposal could mean up to $862 million a year in additional debt recovery from creditors who win judgments against debtors. The proposed Regulation would establish a new measure that would allow creditors to initiate a freeze on the amount owed in the debtor's bank accoun, thus preventing any withdrawal by the debtor before anny decision is made by the court. The innovation would increase the chance of collecting international debt and foster confidence in international trading within the EU's single market. Currently, businesses lose around 2.6 percent of their annual turnover to bad debts, according to EU Justice Commissioner Viviane Reding.