The topic ‘EU Insolvency Law and Third Countries’ is as challenging as it is complex. The book bearing this title was published shortly after the summer of 2026. This long-awaited publication is the outcome of a research project that began in 2021 and was publicly launched in the autumn of 2023 as a joint initiative coordinated by Professors Alexander Trunk (University of Kiel, Germany) and Jasnica Garašić (University of Zagreb, Croatia). More than 50 scholars from 30 countries (both EU and non-EU) participated in the project; see https://www.eastlaw.uni-kiel.de/de/Insolvency_project (though the site itself contains little information). Dr. Kelvin Silvestri (Kiel University and Trento University) subsequently joined the editorial team.
The project’s result now lies before me: a book of over 900 pages featuring contributions from more than 30 authors from across Europe and beyond. Given the importance of the theme, the project received support from UNCITRAL, with the involvement of representatives from the European Commission and the Hague Conference on Private International Law (HCCH). The book contains the subtitle: ‘Which Way(s) Forward?’ A central focus was, evidently, the absence, which has existed for 25 years, of a satisfactory framework for handling cross-border insolvencies with effects extending beyond the EU.
In the book, the three editors seek a coherent approach to the impact of insolvencies and restructurings involving third countries, particularly to facilitate cross-border insolvency and restructuring processes for globally active business entities. With the upcoming review of the European Insolvency Regulation (EIR) – the recast is now more than a decade old – the publication could not have arrived at a more opportune moment.
Content of the book
In a short Foreword (p. 5) the editors indicate the purpose of the project, which was to develop fresh ideas – on the basis of comparative research – for steps which the EU might undertake in order to regulate cooperation with third countries in insolvency matters, taking into account also (and in particular) the global work of UNCITRAL in this field.
The general structure of the book covers a range of perspectives. They have been named: (1) general aspects, (2) domestic insolvency proceedings, (3) recognition of foreign proceedings, (4) concurrent proceedings, and (5) overarching issues. For all these individual topics a few authors provide their views. The editors also have invited contributions of (non-EU) authors concerning developments and ideas of regional organizations (OHADA and the Eurasian Economic Union) and national experiences and suggestions from individual countries (Argentina, Brazil, PR of China, North Macedonia, Russia, South Africa, South Korea, Switzerland and UK). In themselves, these are valuable contributions – albeit varying considerably in content and in length, ranging from 8 to 50 pages – given that the authors were generally asked to provide material for the development of fresh ideas.
Treatment
The primary purpose of the report (see also p. 34) is to give impulses to the EIR review process. Article 90 EIR 2015 (‘Review clause’), formulates as a task of the European Commission, that no later than 27 June 2027 (and every five years thereafter), the Commission shall present to the European Parliament, the Council and the European Economic and Social Committee a report on the application of the EIR, accompanied where necessary by a proposal for adaptation of the EIR. The editors also signal a more broad goal, in that the book’s scientific and practical direction is wider: just as the EIR 2015 is only one legal (and geographically limited) tool in the global structures of cross-border insolvency law, the purpose of the book is additionally to make a contribution to the further development of cross-border insolvency law on a global scale. You don’t expect the latter when you read the title and the subtitle of the publication. The editors explain that the major forum for such global work today is UNCITRAL, in which the EU is also represented: ‘Thus, the book is also hoped to contribute to UNCITRAL’s ongoing and future work’.
Let me pause here to make an observation. I question whether this approach is entirely fortunate, given that the book employs throughout all its contributions a sort of dual-track treatment (EU – UNCITRAL). This does not fully do justice to the current framework of the Insolvency Regulation, which has been ingrained in the EU and its insolvency and restructuring practice for a quarter of a century. The editors acknowledge this, for instance by pointing out that ‘recognition’ functions differently as a legal concept in the EU compared to the Model Law on Cross-Border Insolvency (MLCBI). In the MLCBI, the term ‘recognition’ (of foreign insolvency proceedings) carries a different meaning: it describes a specific form of judicial assistance for foreign insolvency proceedings that entails a significant degree of judicial discretion. In the EU, by contrast, ‘recognition’ is based solely on the principle of recognizing insolvency proceedings (Article 19 EIR 2015) and the effects associated with that recognition (Article 20 EIR 2015). They appear to have had problems with the terminology (some authors even maintained the terminology common in their own national systems (!)) and that added to the legal conceptual differences within the civil Law tradition, recognition of foreign judgments (or proceedings) is seen as a legal category different from judicial assistance and largely devoid of judicial discretion. As the term ‘recognition’ is understood differently in the EIR and the MLCBI, the preface concludes that it is important to analyse in detail in which aspects the approaches of both texts (EIR and MLCBI) concur and in which they differ: ‘From such comparison, recommendations to the legislator can be derived’ (p. 36).
As an aside, I am uncertain about the project-involvement of UNCITRAL. A place has been reserved (pp. 13-16) for a ‘greeting’ from the UNCITRAL Secretariat, where it is said that this greeting ‘… does not imply endorsement of specific proposals or conclusions of editors or other contributors expressed in the book’. The editors themselves write (p. 5): ‘We received an endorsement by the UNCITRAL Secretariat’. In any case, it is about the strength of the proposals themselves.
EU competence to regulate
The editors further note that it is an open and disputed question whether the EU has the legislative competence to regulate matters of cross-border insolvency law relating to non-EU countries. The editors refrain from taking a position on this issue, ‘… as this is more an institutional and political question’ than an issue concerning the concrete content of such rules or recommendations (p. 899). They appreciate the implications of these limitations on their work, because if the EU does possess the legislative competence, it can in principle utilize its full range of legal instruments – specifically regulations, directives, and international treaties (with non-EU countries). In the realm of cross-border insolvency law in Europe, Brexit has, of course, been a cold and harsh divorce between the EU and the UK. How does the EU intend to restore these existing insolvency-law ties? We do not know. In the years leading up to 2026, no initiatives have been presented (by the European Commission or others) to address the poor state of the relationship between the EU and the UK, let alone with other third countries. The issue is, of course, broader, given that international business and investment are expanding geographically, both more widely and more deeply. With the EIR review process in mind, there certainly seems to be a need to understand what the EU is legally permitted to do.
In the vast majority of Member States, insolvency law forms part of general private law. What is the EU permitted to do in this area? I recently learned that EU policy in the field of private law is primarily aimed at ensuring the proper functioning of the internal market, including the removal of obstacles to the exercise of fundamental freedoms. While this policy certainly affects relations with non-EU states, it does so mainly in the areas of regulatory private law and private international law (conflict-of-laws). In recent literature, it has been submitted that the EU’s underlying external private law policy is presently ignored in two ways:
(i) legal instruments including unilateral scope rules which bring persons or events in third states within the scope of the respective instrument (and which should promote the regulatory objectives at issue, e.g. the relationship on the Brussels Ibis regulation and non-EU domiciled defendants. On 1 September 2026, the European Commission launched an open public consultation and a call for evidence as part of the formal review of Regulation (EU) No 1215/2012). See https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/15792-Jurisdiction-rules-and-recognition-and-enforcement-of-judgments-Brussels-Ia-Regulation-review-_en. Views are being accepted until 26 November; and
(ii) agreements on private law matters which are concluded by or on behalf of the EU with third states. Recently Kohler noted (in the published English summary): ‘However, institutional weaknesses and the Union’s notorious lack of competence make it difficult to develop a coherent external private law policy. In the field of conflict-of-laws, the conclusion of multilateral agreements makes the unilateral extension of EU rules to situations involving third states not redundant. There is no discernible political will to extend the Union’s powers in the field of private law and thereby change the conditions under which the EU’s external private law policy is currently formed’, see Christian Kohler, Zur Außenprivatrechtspolitik der Europäischen Union, RabelsZ 2025, 89(3), p. 451–482.
In light of the EIR-review, it is particularly unsatisfactory that uncertainty persists regarding the EU’s jurisdiction vis-à-vis non-EU states in the field of general private law, including insolvency and restructuring law.
Reflections
I now focus on the topics where the editors have developed their own views. In a final chapter (pp. 897-939) they present ‘reflections’ as to the major outcomes of the study. It covers all topics addressed in the book (general aspects, domestic proceedings, recognition of foreign proceedings, concurrent proceedings, overarching issues). It also considers the contributions of the (non-EU) authors of the book on regional or national experiences and suggestions. The editors indicate that by ‘reflections’ they do not mean that they directly formulate recommendations. No, the editors ‘… show some preferences or suggestions which could be used as basis for recommendations.’
Sometimes these reflections limit themselves to specify certain options which the EU legislator might exercise, explaining pros and cons of such options and possible further consequences. When the editors felt that certain proposals might cause discussions, they also took possible objections into account and give them a voice within the reflections. Although the reflections and other conclusions are mainly directed to the European Commission, they are also conceived as an analytical toolbox for UNCITRAL, giving an input into UNCITRAL’s existing and draft Models Laws. In their objective the editors are certain: should the EU follow the recommendations formulated in these reflections, this would lead to a significant approximation between the European Insolvency Regulation (EIR) and UNCITRAL’s model laws dealing with issues of cross-border insolvency. In their duo-track approach, the editors conclude that at the same time, UNCITRAL might take account of some of these reflections in its future work on cross-border insolvency regulation on a global scale.
It is remarkable that these ‘reflections’ refrain from direct recommendations, however the editors certainly show some preferences or make suggestions which could be used as basis for recommendations. With the wide range of perspectives offered by the topics and the authors (mostly researchers, but also legal practitioners and judges), the book serves as a treasure trove (others may be less charitable and say: a grab bag) of insights regarding the questions that arise within the broad field of EU international insolvency law and third countries. In my experience, when it comes to the legislative drafting process, specific recommendations for each topic make the crucial difference between merely indicating a direction and providing truly usable input for legislation. A specific recommendation clarifies exactly what the proposer believes needs to change, rather than just identifying a problem that warrants attention. Specific recommendations allow for concrete language (and translation), making the subject easier to discuss and to evaluate, limiting room for interpretation, and making the use of concrete examples more testable. In any case, the editors did not do this. I will now discuss a few of their proposals.
General issues
Under this heading, the editors bring together matters that must be decided prior to establishing specific rules governing cross-border insolvency proceedings. It is particularly valuable for legislators to have these matters outlined. These are the following:
- Should relations with third countries be addressed systematically and in greater detail in future EU legislation?
- Which instrument(s) should be used?
- What is the fundamental regulatory approach: (a) the EIR or UNCITRAL model laws as a starting point? (b) minimum standards or best practices?, and (c) what would be the sphere of application, i.e. the scope of the subject matter to be regulated (the editors adopt an open-door policy covering consumer and business insolvency, liquidation, or restructuring, and suggest including banking and insurance insolvencies)? I see this somewhat differently. Given the distinctive nature of restructuring plans, I advocate for structuring this mechanism – which is currently difficult to fit into the existing framework at both EU and UNCITRAL levels – as a separate, autonomous regulation with its own approach regarding third countries. In a forthcoming book, ‘Restructuring Plans’ (Wolters Kluwer, 2026), I will further address this matter, see https://bobwessels.nl/blog/2026-09-doc1-restructuring-plans-my-forthcoming-book/).
- Relationship with national legislation (e.g., opt-out/opt-in)
- Relationship with other subject areas and EU texts
- Role of ‘principles of international insolvency law’
- Universal vs. territorial scope
- Location of assets
- Distinction between main and non-main (insolvency) proceedings, including subgroups
The multitude of issues alone illustrates the immensely challenging task the editors have undertaken (also incorporating the fresh ideas they have solicited from their authors).
As to query 1, the editors and, from their perception, all members of the research project share the view that the EU should pass some basic common rules or at least recommendations on cross-border insolvency cooperation (this latter term is to be understood broadly and contains all matters of cross-border insolvency law relating to non-EU countries) with all other states, with the view of promoting, and if necessary guiding the development of this area of the law of its Member States. Leaving aside the question about the legislative competence of the EU to regulate matters of cross-border insolvency law relating to non-EU countries, the editors point to the major options the EU has in this respect. They distinguish four, which is helpful for future discussions:
1 Add a new Chapter on relations with non-EU countries to the EIR 2015 during the EIR 2026/2027 review. This approach is proposed by Susan Block-Lieb and Christoph G. Paulus, ‘Europe and beyond: What can the EIR learn from the UNCITRAL Model Law?’ (pp. 125-159). Evidently, the advantage is to have a uniform solution for all EU members rather soon, which would not hinder – the editors add – a reasonable degree of flexibility, e.g. by giving space for legislative action by Member States on defined issues.
2 Adopt a directive on this matter, which would complement the EIR and give even more flexibility to Member States.
3 Limit EU action to soft law, e.g. a recommendation to Member States to adopt UNCITRAL Model Laws dealing with cross-border insolvency or other recommendations. Also, treaties might be, in addition, a feasible approach in relations with some countries such as Denmark, Switzerland, EEA countries or the UK, taking inspiration from examples, such as the Lugano Convention.
4 Even if the EU would not pass a legislative act, it should at least prepare recommendations on minimum standards and best practices that the autonomous international insolvency law of each Member State should certainly include. This option stresses, the editors believe, the importance of international insolvency law for the economy and the proper functioning of the international market.
A few observations here. The fourth option is a weak solution. The reasoning rests on a rather one-sided view of statutory legislation. Does it consider enough the needs of global businesses, ‘foreign’ creditors, and ‘foreign’ investors? This option also undermines the EU’s ‘Union’ ideal. It saddles foreign investors, creditors, and the like with additional costs. The need for international legal advice – which entails time and substantial fees – slows down business transactions and investments, as it perpetuates a patchwork of differing Member State rules. Given twenty-five years of virtual inaction within the Member States themselves, allowing this passivity to continue for many more years is certainly not the logical course of action.
I regret to say that Block-Lieb and Paulus have not (nor have the editors) taken note of a report of the late Prof. Ian Fletcher and me (Ian Fletcher and Bob Wessels, ‘Harmonization of Insolvency Law in Europe’, Report Netherlands Association of Civil Law, Deventer: Kluwer 2012), published in 2012, in which the proposal to incorporate the full Model Law in a regulation (an EU legal instrument with the effect that it is binding Member States automatically), as had been made by INSOL Europe, was regarded as an error. Both the nature and the original effect of the MLCBI (drafted as a supportive soft law tool for individual countries), as well as the fact that certain matters may have been included in national legislation of Member States (be they followers of the Model Law or having drafted their own systems, such as Germany, Spain, Belgium) would only justify – we submitted in 2012 – the use of a directive as the medium for bringing about harmonization of the laws of the Member States in relation to insolvency proceedings originating in non-EU states. Now, almost 15 years later, we should realise that the EU is one of the players in an enormous geopolitical shift. This necessitates to also think about other solutions. I will turn to this matter later.
For some questions (under query 1 or 2) that will need to be resolved, see my blog https://bobwessels.nl/blog/2016-10-doc12-should-the-eu-adopt-uncitral-model-law-on-cross-border-insolvency/. Moreover, the suggestion glosses over cross-border restructuring plans based on contractual principles too readily. A few provisions in the MLCBI – including the definition of ‘foreign proceeding’ – are not, or are insufficiently, aligned with insolvency systems that have gained traction over the last decade and increasingly rely on preventive restructuring, schemes of arrangement, and other rescue tools. The MLCBI should be amended in this regard. On this subject recently, see Scott Atkins & Rodney Bretag, ‘The UNCITRAL Model Law on Cross-Border Insolvency: Enhancing Consistency, Predictability and Convergence at a Time of Global Divergence’, ICR 2026(1), pp. 1–11. See also the proposals in the book discussed here by Gerard McCormack, ‘UK schemes, plans and international recognition’ (pp. 883–895). In my forthcoming book ‘Restructuring Plans’ (see the blog I referred to earlier), I am presenting my own proposal comprising forty-five recommendations for an EU Restructuring Regulation. These recommendations form the basis for an EU legislative instrument aimed at providing a coherent and effective cross-border system for restructuring plans. It includes proposals on how to deal with non-EU insolvency proceedings and restructuring processes.
As to query 8, concerning location of assets, the editors are favouring to follow the EIR 2015’s location rules in Article 2(9)(i-viii) EIR 2015 also in autonomous international insolvency law, including any modification that the EU might consider as to the criteria for localizing intangible assets that are presently not listed in Article 2 (such as cryptocurrencies and non-fungible tokens). Presently, the MLCBI does not contain such rules. As part of the review process for the EIR, I would start with the UNIDROIT Principles on Digital Assets and Private Law, adopted and published in 2023; see https://www.unidroit.org/work-in-progress/digital-assets-and-private-law/#. See very recent Cayetana Santaolalla Montoya, Digital Asset Custody and Private International Law: Control, Property and Cross-Border Coordination (Atelier, 2026).
Domestic (insolvency) proceedings
The research also distinguishes between domestic (insolvency) proceedings, including those insolvency proceedings that exist in national states, and which must be coordinated or cooperate with ‘foreign’ (insolvency) proceedings in some way. The EIR has known such proceedings for a quarter of a century, such as secondary proceedings and territorial proceedings. I question whether this alignment is entirely appropriate. Although territorial in nature, secondary proceedings should structurally serve the main proceedings—the latter being, after all, dominant (see Recital 48 EIR 2015). The assertive, and not infrequently idiosyncratic, approach adopted by insolvency practitioners in national proceedings is, in fact, out of place within the context of secondary proceedings.
The book contains, among other things, an educational and cautious contribution by Alexander Trunk, ‘Domestic insolvency proceedings and non-EU countries – general report’ (pp. 191-254). The general reflection of the editors is to make a legal choice whether some of the proposed rules on insolvency proceedings in relation with non-EU countries should be included in Chapter I of the EIR (e.g. in Article 3) or in a separate new Chapter of the EIR, if the EU were to adopt such an approach in recognizing the legal effects of insolvency proceedings opened in third countries.
As the concept of COMI today has come to be accepted globally as a reasonable jurisdictional standard for main insolvency proceedings, the editors propose that the EIR should keep to this standard also in cases when the debtor’s COMI is located outside the EU. Rightly they warn for the situations of positive or negative conflicts of (international) jurisdiction. For example, when both an EU Member State and a third country regard themselves as the place where the debtor’s COMI is located (positive conflict) or in a case where a company has its registered seat in State B, but its COMI in State A, and neither A nor B would be entitled, under their respective laws, to open an insolvency proceeding (negative conflict). They also comment generally on the condition to be imposed for international jurisdiction (establishment, only the existence of assets plus additional conditions or jurisdiction based on significant contacts of the debtor with the EU), as this would contribute to making the EU an attractive forum for corporate restructurings.
In the category of domestic insolvency proceedings, the editors also touch upon the topic of conflict-of-laws or law applicable, where they distinguish three questions:
- Should there be overarching rules or separate rules for domestic and foreign proceedings?
- Will the basic conflicts rule be the lex fori concursus, yes or no?, and
- The query about the necessity and number of specific conflict rules.
They explain (regarding query 1) that their treatment reflects the structure of the EIR, to deal with conflict-of-laws with separately in the context of domestic proceedings and recognition of foreign proceedings, which aligns with the planned new UNCITRAL Model Law on applicable law in insolvency proceedings (work in progress). They follow the basic rule of lex fori concursus (Article 7(1) EIR 2015) and the enumeration of topics (Article 7(2) EIR 2015) as being accepted worldwide, also already in the UNCITRAL Legislative Guide on Insolvency Law (recommendation 31).
As to query 3, specific conflict rules, the EIR contains a number of specific conflicts rules dealing with third parties’ rights in rem, set-off, reservation of title (Article 8-10 EIR 2015, these are ‘not affected by’ the opening of insolvency procedures to which the lex forum concursus applies) and a group of other legal matters (e.g. contracts relating to immoveable property, contracts of employment, transaction avoidance and rights subject to registration (see Articles 11-14, 16-18). These refer to the applicability of the law of the ‘Member State’ (or just the law of ‘the state’, with the note that the 20 ‘authentic language versions’ of the EIR formulate different references as to ‘Member State’ or ‘state’).
The UNCITRAL Legislative Guide on Insolvency Law applies as main principle the lex fori concursus and originally allowed only a few exceptions (the effects of insolvency proceedings on the rights and obligations of the participants in a payment or settlement system or in a regulated financial market and rules regarding the rejection, continuation and modification of employment contracts). The number of these exceptions have been growing, but the exclusions that the EIR recognizes is in the current version of the UNCITRAL draft Model Law on Applicable Law in Insolvency Proceedings not reached. These derogations are ‘universal’ in the sense that they do not contain a limitation to the lex fori concursus or to particular foreign countries. The editors indicate three options: (a) to ’universalise’ the special conflicts rules, e.g. apply them also to the law of non-EU countries [as proposed by Fabriès-Lecea, ‘Europe’s approach to international insolvency law at a time for choosing legal methods’, pp. 59-74), (b) leave them as they are. This would give greater weight to the lex fori concursus and leave the defence of certain protective policies to the respective non-EU countries, e.g the forum rei sitae or to non-EU forums for employment disputes, or (c) to align future EU conflicts rules on insolvency matters with the forthcoming UNCITRAL Model Law on Applicable Law in Insolvency Proceedings, ‘… possibly retaining some conflicts rules with a limitation to the law of EU Member States where a particular strong interest to provide for ‘local’ (inner-EU) protection is seen (p. 914).
In general, here the editors recommend harmonizing the specific conflict-of-law rules of the EIR with the (future) conflict-of-law rules currently being developed by UNCITRAL in its Draft Model Law on Applicable Law in Insolvency Proceedings. That process is moving quickly. It seems to me that, as long as that text is not yet final, it would be wiser to reserve judgment. Moreover, given the ongoing harmonization of national substantive insolvency law in the EU across Member States – driven by the implementation of Directive 2026/799 and the resulting alignment regarding certain exceptions (such as avoidance actions) – a future review of the EIR might well allow the conflict rules to function with fewer exceptions.
An interesting option is that, given the wide variety of factual situations in insolvency matters, the EU should introduce an escape clause regarding conflict-of-laws in insolvency – similar to Article 4(3) of the Rome I Regulation or Article 4(3) of the Rome II Regulation – allowing the judge, in exceptional cases, to apply the law of the State with which the case is manifestly more closely connected, rather than the ‘lex fori concursus’ or any other law otherwise designated as applicable. Their argument is that the existence of such an escape clause would align the EIR’s conflict-of-law rules with other EU legislation on the subject. However, given that I take party choice in restructuring processes as my starting point, I would object to such an exception.
[to be continued at Bob Wessels blog on www.bobwessels.nl]