17 October 2005
United States Adopts UNCITRAL Model Law on Cross-Border Insolvency
VIENNA, 17 October (UN Information Service) - With the entry into force of a new Chapter 15 of its Bankruptcy Code today, the United States has become the ninth jurisdiction to adopt legislation based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency.
The UNCITRAL Model Law on Cross-Border Insolvency, adopted in 1997, is designed to assist Member States to equip their insolvency laws with a modern, harmonized and fair framework to address instances of cross-border insolvency more effectively. Those instances include cases where the insolvent debtor has assets in more than one State or where some of the creditors of the debtor are not from the State where the insolvency proceeding is taking place. The Model Law respects the differences among national procedural laws and does not attempt a substantive unification of insolvency law. It offers solutions that help in several modest, yet significant ways. These include the following: foreign assistance for an insolvency proceeding taking place in the enacting State; foreign representative's access to courts of the enacting State; recognition of foreign proceedings; cross-border cooperation; and coordination of concurrent proceedings.
The Model Law and its guide to enactment were drafted by the UNCITRAL's Working Group on Insolvency Law, approved and adopted by the Commission in May 1997 and endorsed by the United Nations General Assembly in December 1997.
The Model Law has now been adopted by Eritrea, Japan, Mexico, Poland, Romania, South Africa, the United States, British Virgin Islands (overseas territory of the United Kingdom), and within Serbia and Montenegro, by Montenegro. Countries actively considering adoption of the legislation include Australia, India, New Zealand and the United Kingdom.
The United Nations Commission on International Trade Law (UNCITRAL) is the core legal body of the United Nations system in the field of international trade law. Its mandate is to remove legal obstacles to international trade by progressively modernizing and harmonizing trade law. It prepares legal texts in a number of key areas such as international commercial dispute settlement, electronic commerce, insolvency, international payments, sale of goods, transport law, procurement and infrastructure development. UNCITRAL also provides technical assistance to law reform activities, including assisting Member States to review and assess their law reform needs and to draft the legislation required to implement UNCITRAL texts. The UNCITRAL Secretariat is located in Vienna, Austria, and maintains a website at www.uncitral.org
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For information contact:
Clift, Senior Legal Officer