Glossary

• Author: United Nations Commission on International Trade Law
• Pages: 45-48

Section two. Commentary 45

distress to MSEs and create incentives for early debt restructuring negotiations (e.g.

tax relief from debt write-os).

21. Generally, constitutional, cultural, social and economic norms of the State

will dictate policy choices for devising a simplied insolvency regime. Regional

integration dynamics and concerns that domestic MSEs would consider relocating

their business to other jurisdictions to access more friendly regimes (“forum shop-

ping”) may also be relevant in that regard.

5. Institutional support

22. Not all measures aimed at mitigating the challenges faced by MSEs in nan-

cial distress are capable of legal resolution. A combination of institutional measures

may be required to ensure that a simplied insolvency regime is eective in

practice.

23. In particular, the proper institutional and administrative structures and

human resources should be in place to operate and administer a simplied insol-

vency regime. Eective implementation and the operational ecacy of a simplied

insolvency regime will also be enhanced by standardized online procedures and

forms and sample documents and by appropriate interaction of relevant State

bodies and systems at the administrative level. In addition, training may need to

be provided, on the one hand, to State authorities and insolvency practitioners

with the aim of building the capacity in the public and private sectors necessary

to handle specicities of MSE insolvencies, and on the other hand, to MSEs to

increase their nancial and business management literacy and awareness of their

obligations in the vicinity of and during insolvency.

24. Many insolvency reforms aimed at lowering barriers for access to insolvency

by MSEs are complemented by other institutional support to MSEs, in particular

debt counselling, mediation services and assistance with application for com-

mencement of insolvency proceedings and compliance with disclosure obligations

under insolvency law.

II. Glossary

25. e following paragraphs explain the meaning and use of certain expressions

that appear frequently in the MSE Insolvency Guide. ey, as well as other terms

used in the MSE Insolvency Guide, should be read in conjunction with the terms

and explanations used in other parts of the Guide: