1. Credit and claims management In practice for cross-border transactions within the EU

2. A.Become personally involved B. Engaging third parties – extrajudicial debt collection C. Court enforcement of the claim 6. Claims collection options 2

3. A.Become personally involved B. Engaging third parties – extrajudicial debt collection C. Court enforcement of the claim 6. Claims collection options 3

4. I. Timing The company will pay special attention to: set up a methodology of permanent detection of outstanding invoices and a quick reaction; not send dozens of reminders; set and respect a strict timeframe for the follow-up of outstanding claims in a pre- contentious stage; adapt the tone of the speech to their customer.

5. II. Reminder letter with customer satisfaction survey The content of the letter should always be oriented towards enquiring as to the customer’s satisfaction with the company’s performance and polite reference to the imminent payment date: -the customer gains the impression that he is taken seriously, and - the customer is politely reminded that the invoice is still outstanding. The customer can therefore actively report any defects in the goods not yet notified and voice his concerns.

6. III. Notice of default on the outstanding invoice / reminder Formal request to the debtor who has not fulfilled his obligation at the expiry date: the seller asks for the immediate payment or within a fixed time limit, plus late payment interest and a contractual penalty. It will be stated that in the absence of voluntary payment, the debtor will be summoned to appear before the competent court to hear the case.

7. III. Notice of default on the outstanding invoice / reminder Differences might exist between EU Member States concerning the possible formalism of this kind of letter, its content, the time limit or the question to know whether it is a mandatory step before any legal proceedings.

8. III. Notice of default on the outstanding invoice / reminder Content: clear and unequivocal. It shall contain: Identity of the company, business number, contact details; Clear description of the nature of the debt; Clear description and an explanation of the amounts claimed from the customer (including the late payment interests and penalties); and Mention that, should the customer still not pay by the deadline, the company shall carry on the collection of debt (including by legal proceedings and/or seizures).

9. III. Notice of default on the outstanding invoice / reminder Sending: registered mail, bailiff, notary. Late payment interests: at the interest rate stipulated by the contract or at the legal interest rate.

10. IV. Further procedures – telephone reminder No other activities during the telephone call; advisable to familiarise in detail with the claim prior to the phone call; Appropriate time for the call; Speak with the correct person; Directly refer to the goods/services provided and enquire as to the reasons for the delayed payment; An acceptable instalment plan can be offered; Every single agreement from the customer to pay the outstanding debt, in full or through instalments, should automatically be followed by a written confirmation.

11. A.Become personally involved B. Engaging third parties – extrajudicial debt collection C. Court enforcement of the claim 6. Claims collection options 11

12. I. Commissioning a debt collection agency Debt collection agency ( DCA): natural or legal person whose business consists in the amicable collection of debts. Technical assistance : DCA will intend to recover the unpaid debts on behalf of a third party without having contributed to the signing of the original agreement; Sale of a claim: implies the assignment of a claim from the original creditor to the DCA.

13. I. Commissioning a debt collection agency 1. Debt collection (technical assistance) DCA operations are likely to be organised in the following “procedural stages”: Order recording / claim clarification; Pre-court collection; If necessary, legal enforcement of the claim via court enforcement procedures (national differences must be considered here since under certain circumstances this may not be possible); Post-court collection (if the claim was legally enforced by the court);, Monitoring process / long-term collection.

14. I. Commissioning a debt collection agency Two main legal requirements concerning consumer protection in debt collection processes 1. Obligation to register 2. Prohibited practices

15. I. Commissioning a debt collection agency 2. Sale a claim (e.g. factoring) Possible to either: sell individual claims or entire claims packages or portfolios - i.e. all export claims or certain other claims defined otherwise (such as by export region, product groups, etc.) and to make money by selling them: once or on a regular basis. Factoring: sale of claim prior to its maturity date.

16. I. Commissioning a debt collection agency 3. Profitability and limit Technical assistance - Advantages:time saving - Disadvantages: cost; when the claim is contested Sale of claim - Advantages: time saving and cash-flow - Disadvantages: cost

17. II. Engaging a lawyer May be recommended for cross-border legal disputes, especially if it is conceivable that the customer will not pay and that there will be a case before the national courts or an arbitration court and/or the customer raises objections to the claim. Before starting legal proceedings, parties should also consider trying to come to a prior amicable solution through mediation.

18. II. Engaging a lawyer Lawyers are organised into regional or trans- regional Bars. Membership of these Bars is obligatory. Check with lawyer what the associated costs are: fees and expenses of the lawyer, costs of proceedings and translation costs (as cross- border cases must be submitted in the official language of the target country), as well as the possibility of demanding back the costs from the defaulting customer.

19. A.Become personally involved B. Engaging third parties – extrajudicial debt collection C. Court enforcement of the claim 6. Claims collection options 19

20. I. Proceedings before the national court (1) Legal proceedings on the merits Jurisdiction clause Legal venue before “own” national courts (B2B) No jurisdiction clause Brussels I Regulation rules

21. I. Proceedings before the national court (2) Injunctions and provisional measures Precautionary measures Interim payments or interim performance Provisional execution National law Jurisdiction

22. I. Proceedings before the national court (2) Injunctions and provisional measures Provisional measures Against the debtor's assets Precautionary measures, interimpayments, provisional execution National law To protect the creditor's interests until final judgment is given

23. I. Proceedings before the national court (3) Recognition and enforcement Recognition: judgment (in broad sense) has same value in other Member States. Not be granted if: manifestly contrary to the public order of the other Member State there was a breach in the right of defence it is irreconcilable with a previous judgment

24. 3) Recognition and enforcement Enforcement: need for an exequatur. The applicant provides the judge in the Member State where he/she wishes to enforce: a certified copy of the judgment (translated if necessary) a certificate of the court of origin identifying court and parties If granted, it may take the following forms: Attachment of goods Attachment of bank assets Assignment of earnings Execution against real property I. Proceedings before the national court

25. 3) Recognition and enforcement Exequatur is refused if judgment: contrary to public policy; given in default of appearance and defendant was not served in sufficient time to arrange defense; irreconcilable with an earlier judgment already given in the Member State in which enforcement is sought; if the judgment conflicts with Brussels I Regulation. Brussels I recast: no need for exequatur from January 2015! I. Proceedings before the national court

26. II. European procedures Set of instruments to facilitate litigation procedures concerning cross-border claims in the EU (except in Denmark):

27. II. European procedures Advantages of EU procedures Less expensive Faster Disadvantages of EU procedures National courts are not well acquainted with them yet

28. II. European procedures (1) The European Enforcement Order for Uncontested Claims Based on Regulation 805/2004 A type of “judicial passport”: need for a previous judgment; court settlement or authentic instrument.

29. II. European procedures (1) The European Enforcement Order for Uncontested Claims Procedure: Certification judgment; Court settlement; or authentic instrument Enforcement Review only in exceptional cases

30. II. European procedures (2) The European Order for Payment Procedure Based on Regulation 1896/2006 Only one application is necessary The claim must be monetary and uncontested

31. II. European procedures (2) The European Order for Payment Procedure Applicationbe fore competent court Application is reviewed Service of the order Enforcement Review only in exceptional cases Rejection Additional information

32. II. European procedures (3) The European Small Claims Procedure Based on Regulation 861/2007. Claims not exceeding EUR 2,000.00 (excluding interest, expenses and disbursements).

33. II. European procedures (3) The European Small Claims Procedure ApplicationDebtor replies Additional info; or Hearing; or Judgment Enforcement of judgment Review only in exceptional cases