07/22/2021 | Press release | Distributed by Public on 07/22/2021 06:10
For information only - not an official document
22 July 2021
VIENNA, 22 July (UN Information Service) - At its fifty-fourth session, the United Nations Commission on International Trade Law (UNCITRAL) adopted the Legislative Recommendations on Insolvency of Micro and Small Enterprises (the Legislative Recommendations) and approved the draft commentary to the Legislative Recommendations in principle. The texts are part of UNCITRAL's ongoing series of insolvency texts as well as texts aimed at reducing the legal obstacles encountered by micro, small and medium-sized enterprises (MSMEs) throughout their life cycle.
The Legislative Recommendations were prepared to assist States with establishing a simplified insolvency regime to address the insolvency of individual entrepreneurs and micro and small businesses of an essentially individual or family nature with intermingled business and personal debts (collectively referred to as MSEs). They offer simple, expeditious and low-cost mechanisms for liquidation of non-viable MSEs or reorganization of viable MSEs, while providing safeguards against possible abuses.
The text is expected to be highly relevant to COVID-19 economic recovery. Despite temporary relief measures implemented by States, insolvencies of MSEs are expected to rise dramatically because lockdowns and other measures implemented by States to contain the COVID-19 pandemic have reduced demand for products and services and have also disrupted supply chains, particularly in sectors where MSEs operate (e.g. private household and personal services, small retail shops, small hospitality businesses).
The Legislative Recommendations will appear in an annex to the report of the session (A/76/17) and separately on the UNCITRAL website at https://uncitral.un.org/en/texts/insolvency. The commentary is expected to be finalized during the December session of UNCITRAL Working Group V (Insolvency Law) and published together with the Legislative Recommendations under the title 'UNCITRAL Legislative Guide on Insolvency Law for Micro and Small Enterprises' as part five of the UNCITRAL Legislative Guide on Insolvency Law and as part of the UNCITRAL MSMEs text series.
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 uncitral.un.org.
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For information, please contact:
José Angelo Estrella Faria
Principal Legal Officer and Head, Legislative Branch