The Government has published its Brexit white plans on the future relationship between the UK and the European Union

Commenting on the document Duncan Swift, Vice-President of insolvency and restructuring trade body R3, said “It’s encouraging to see the Government take post-Brexit cross-border insolvency issues seriously, and we welcome both the commitment to seek a new agreement with the EU on civil judicial cooperation, and the specific inclusion of insolvency in any such deal.’

“Under the current framework, UK insolvency judgments and procedures are automatically recognised across the EU, and vice versa. This makes it relatively quick and cost-effective to resolve insolvencies when assets and insolvent companies are spread across Europe. It helps in all sorts of cases, from dealing with the insolvency of a major multinational corporation to hunting down assets squirrelled away overseas by a fraudster. Failure to replicate the current set-up post-Brexit would make it much harder to resolve cross-border insolvencies from the UK.”

“Without a deal, post-insolvency returns to creditors would be hurt, it would be harder to rescue businesses and jobs, it would be harder to tackle cross-border fraud, and the costs of cross-border insolvency procedures would go up. All this would have a very negative impact on the UK’s reputation as a place to invest, lend, and trade.”

“We look forward to working with the Government to ensure any deal meets the needs of the insolvency and restructuring profession and, crucially, UK creditors and other stakeholders affected by insolvency.”

UK Finance Chief Executive Stephen Jones said “The UK is currently the second largest exporter of services worldwide. Tens of thousands of customers and billions of euros of banking and capital markets services are reliant on the UK remaining Europe’s most interconnected financial centre. As the Government recognises in today’s White Paper, it’s entirely possible to use the tools and trust we have established during 40 years of membership of the EU to construct a new arrangement that preserves some of the benefits of close alignment without sacrificing political and regulatory autonomy.”

“However, as today’s paper makes clear, simply relying on existing equivalence arrangements will not provide financial institutions with effective market access that enables them to serve their customers. The Government is right to want to propose a new economic and regulatory arrangement which seeks to strengthen and expand the current third country regime.”

“Given the limited time available it is vital that both the UK and EU27 negotiators come to the table and focus on ensuring a legally enforceable agreement, delivering enhanced and expanded third country arrangements that enables meaningful cross-border market access in financial services. In this way firms on both sides of the Channel can continue to serve business and clients across the UK and Europe without risking financial stability.”

 

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