A move by the European Commission to improve transparency of
debtors’ assets will be welcomed by vehicle leasing companies, says
Ravi Bhatiani.
The European Commission is determined to improve debtors’ assets
transparency across the EU. In a recently-published Green Paper,
the Commission set out a number of different ways to access
information on debtors’ assets.
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Access to information on a debtor’s financial situation and the
whereabouts of his assets is an important issue for European
finance and leasing companies. The lack of access to, or
availability of, information on debtors’ assets strongly hampers
domestic as well as cross-border debt recovery, ultimately
affecting lenders’ risk management, including recovery rates.
Efficient cross-border asset and debt recovery for lenders
financing vehicles is of particular importance. This is because
vehicles can easily be stolen, hidden or moved from one European
country to another. For example, out of the 907,112 vehicles that
were reported stolen across the EU27 in 2006, 30 per cent – over
270,000 vehicles – were never recovered.
One of the measures proposed by the Commission to combat such
problems is the introduction of a European Assets Declaration.
Leaseurope, the trade body representing the leasing industry at
European level, supports such an initiative in principle. Lessors
and other types of asset finance providers to businesses and
consumers remain the owners of the assets they lease or otherwise
finance. Accordingly, these assets should be indicated separately
from a debtor’s own assets within any debtor assets
declaration.
Leaseurope has emphasised this point with the European
Commission and is in contact with the European Parliament, which is
due to give its opinion on the Commission’s proposals.
It is hoped that the European institutions will recognise the
importance of catering to the specific needs of the leasing
industry. In today’s difficult economic and financial environment,
the obvious advantages of leasing constitute a powerful incentive
to do so.
The author is a legal adviser at Leaseurope
