The Federal Government today announced a review of cross-border insolvency law, including possible adoption of an international model law aimed at improving the chances of tracing assets overseas and returning them to Australia.
The Parliamentary Secretary to the Treasurer, Senator Ian Campbell, said the international model law would help streamline cross-border insolvencies.
"As it stands, the differences in legal systems between countries make it difficult and expensive for Australian liquidators to conduct insolvencies that involve assets, creditors and businesses spread across national borders," he said.
"Adoption of the international model would be a marked improvement on the existing procedure and could help overcome blockages that occur between countries in insolvency administration.
"There have been enormous changes to the way international trade is conducted in recent years and we cannot afford to ignore the need to ensure Australia has adequate processses and laws in place to cope quickly and efficiently with cross-border insolvencies."
Senator Campbell said the review was the next phase of the Government's Corporate Law Economic Reform Program. It would be called CLERP 8.
He said he planned to introduce legislation before the end of this year. A discussion paper would be released to stakeholders next month as part of a consultation process.
Senator Campbell said there was wide support within Australia for the model, developed over three years by the United Nations International Commission on Trade Law. Those in support included the Insolvency Trustee Service of Australia, Insolvency Practitioners' Association of Australia, Law Council of Australia and the judiciary.
He said the key objectives of the model were:
- Co-operation between courts and other authorities.
- Increased legal certainty for trade and investment.
- Protection of the interests of creditors.
- Protection and maximisation of the value of assets.
- Increasing the prospects of rescuing financially-troubled businesses, protecting investment and saving jobs.
"Over the past decade the international community has devoted much attention to improving financial frameworks to keep up with the rapidly changing ways business is now conducted," Senator Campbell said.
"Global economic integration and technological change have created both opportunities and new risks for Australian business. The adoption of efficient cross-border insolvency laws is an important aspect of our efforts to build a sounder international framework to address those risks."
CANBERRA
25 June 2002
Contact:
Wayne Grant 02 6277 3955 or 0407 845280
http://parlsec.treasurer.gov.au