In the European Union, the European Insolvency Regulation (EIR) determines the jurisdiction for a debtor's insolvency proceedings, the law applicable to those proceedings and provides for mandatory recognition of the proceedings in other EU member states.

The COVID-19 pandemic continues to drag on. Finland is currently in a three-week lockdown, and experts predict that we will have to adopt even more stringent measures before enough of the population has been vaccinated.

At the same time, companies that have been struggling with the pandemic for over a year already have to keep looking for ways to improve their liquidity. There is still no certainty over when we will be able to return to normal.

Temporary Respite for Payment Still in Force

The COVID-19 pandemic hit Finland’s economy hard last spring. The restrictions and recommendations issued to stem the pandemic led to an unexpected drop in turnover and cashflow in many sectors.

The tenth anniversary of the EU Council Regulation on insolvency proceedings (EC No 1346/2000) has arrived amidst wide debate surrounding whether the regulation remains valid and current in its existing form. The European Commission recently launched a consultation examining the current insolvency regime in Europe.

Retention of title clauses are clauses by which the title to property to be sold is retained by the seller until the purchase price has been paid in full. This is an exception to the general rule provided in the Finnish Sale of Goods Act, according to which the title to property is transferred to the buyer at the same time as possession.

Finland implemented the EU resolution and recovery regime for credit institutions and investment firms by the deadline at the turn of the year. The Finnish regulations apply to all local banks and intermediaries until 1 January 2016 when the most significant Finnish financial institutions will become part of the EU’s Single Resolution Mechanism (SRM).