International standards in insolvency have developed significantly over the last few years. The EBRD is closely involved in their development and adoption.
EBRD principles and guidance
The EBRD Core Principles of an Effective Insolvency System – available in English and Russian - aim to contribute to the further development and harmonisation of countries’ insolvency legislation by clearly articulating the general objectives of any commercial insolvency law reform, which may be adapted to the specific national context. These were updated in 2020 to reflect significant developments in insolvency practice.
The EBRD Insolvency Office Holder Principles – available in English and Russian - complement the EBRD Core Principles and highlight the main elements that should be considered by policymakers for the development of the insolvency office holder profession to support better implementation of insolvency frameworks.
More broadly, these principles seek to advance the integrity, fairness and efficiency of the insolvency law system by ensuring that appropriately qualified and regulated professionals take insolvency appointments. First published in June 2007, the EBRD Insolvency Office Holder Principles were revised in 2021 to take into account recent developments and to incorporate findings from both the EBRD assessment of the insolvency office holder profession and recent EBRD country projects.
World Bank principles and guidelines for effective insolvency and creditor rights systems
The World Bank with the assistance of international financial institutions, leading insolvency organisations and international insolvency experts has developed principles that underpin sound insolvency and creditors' rights around the world.
The EBRD and other organisations participated in conferences, workshops, and drafting sessions to complete the World Bank principles. They were first approved in April 2001 and revised in 2005, 2015 and recently in 2021 to help policymakers build and improve the insolvency and bankruptcy systems that support micro, small and medium enterprises (MSMEs).
The World Bank principles rely on the fundamental premise that sustainable market development requires access to affordable credit. Capital investment can only happen in an environment where parties can manage the insolvency risk associated with credit relationships.
The principles distil international best practice in the design of insolvency and creditor rights mechanisms and are used to benchmark strengths and weaknesses of existing systems. They allow flexibility in domestic policy choices and take comparative domestic laws and institutions into account.
UNCITRAL Model law on cross-border insolvency and legislative guide on insolvency law
The United Nations Commission on International Trade Law (UNCITRAL) adopted the Model Law on Cross-Border Insolvency in 1997.
The Model Law does not attempt to harmonise the substantive insolvency laws of participating jurisdictions, but provides a procedural framework to facilitate cooperation between courts and office holders in differing states. Countries are free to adopt and adapt the Model Law by modifying and excluding its provisions to accommodate local laws.
The central focus of the Model Law is to recognise and cooperate in cross-border insolvency. Unlike the EU Regulation on Insolvency Proceedings, the Model Law does not contain rules determining jurisdiction or choice of law.
From 2004 to 2013 UNCITRAL has developed a Legislative Guide on Insolvency Law as a reference point for lawmakers designing a strong insolvency, debtor-creditor regime, which includes out-of-court restructuring.
UNCITRAL has recently issued a Model Law on Recognition and Enforcement of Insolvency-Related Judgments with Guide to Enactment (2018) and a Model Law on Enterprise Group Insolvency with Guide to Enactment (2019). It is finalising the text of a Model Law on MSME insolvency.