Consultation on the interconnection of business registers



                      Response from:

                  LEASEUROPE
           267, Avenue de Tervuren 1150 Brussels
               Email : r.bhatiani@leaseurope.org
          Tel: +32 2 778 05 68 Fax: +32 2 778 05 78
               Leaseurope ID: 16013361508-12
Directorate General for Internal Market and Services
Unit for Company Law, Corporate Governance and Financial Crime
European Commission

By Email: MARKT-COMPLAW@ec.europa.eu

                                                                    Brussels, 29 January 2010

Dear Sir/Madam,

Re: Leaseurope's consultation response on the inter-connection of business registers

Leaseurope welcomes the European Commission's Green Paper launching a public
consultation on possible ways to improve access to information on businesses across the EU.

Access to understandable and accurate company information is key in facilitating different
forms of cross-border business.

In light of the benefits of improved access to business registers (some of which are outlined in
this paper), Leaseurope encourages the Commission to continue its work on the
interconnection of business registers thereby helping business growth and encouraging
greater volumes of B2B transactions.

I stay at your disposal to answer any question you may have on our response; alternatively
feel free to contact my colleague Ravi Bhatiani (r.bhatiani@leaseurope.org - tel: 02 778
0562).

Yours sincerely,




Tanguy van de Werve
Director General




About Leaseurope

Leaseurope brings together 47 member associations representing the leasing, long term
and/or short term automotive rental industries in the 34 European countries in which they are
present. The scope of products covered by Leaseurope's members ranges from hire
purchase and finance leases to operating leases of all asset categories (automotive,
equipment and real estate) and includes the short term rental of cars, vans and trucks.

It is estimated that Leaseurope represents approximately 96% of the total European leasing
market and the firms represented via its member associations granted new leasing volumes
of over 330 billion in 2008. Leaseurope estimates that its leasing member associations
financed over 6 million cars during 2008 and at the year's end owned a fleet of 16.1 million
cars. Close to 40% of new car registrations today has been financed by leasing companies.

The Federation's mission is to represent the European leasing and automotive rental industry,
ensuring the sector's voice is heard by European and international policy makers. Leaseurope
also seeks to promote the leasing and automotive rental products and produces European
level statistics describing the markets it represents.




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THE BENEFITS OF IMPROVED ACCESS TO BUSINESS REGISTERS

          Understandable company information is required for M&A purposes

The parties to complex corporate transactions (such as in a mergers & acquisitions scenario)
require understandable and up to date company information.

          Easy access           to    business       registers      would       enhance       creditworthiness
          assessments

Facilitating cross-border company searches to better assess the creditworthiness of a
potential lessee (based abroad) would allow a lessor to make a better assessment of that
potential lessee's ability to honour a lease agreement.

          Information contained in business registers can facilitate the fight against fraud

An added benefit of promoting better access to business registers and the company
information held therein (such as annual reports/accounts/information on company directors)
is that such information can also be used in fraud prevention. This is particularly true when
assessing those risks presented by smaller businesses and start-ups.

In particular, the presence of directors names on official registers (e.g. on lists of registered
voters) can be used to help confirm the identity of a potential lessee and thus guard against
fraud.

          Better access to business registers facilitates investigation of manufacturers
          and dealers

Generally there are three parties to a typical leasing transaction (lessor, lessee and
manufacturer/dealer).

Better access to business registers would help lessors to investigate the manufacturers
and/or the dealers of a leased asset, particularly in a cross-border context. Such
investigations are particularly useful to ensure that a lessor:

     1. has good title to the leased asset; and
     2. can carry out all its contractual obligations under the lease agreement.

1) Ensuring good title to the leased asset

In the current economic climate with rising levels of insolvency it is crucial for a lessor to have
good title to the leased asset.

For example, if a dealer has delivered equipment to a lessee before paying the original
manufacturer and then becomes insolvent, the manufacturer may in certain circumstances1
be able to repossess the asset even though the lessor has already paid the dealer of the
leased asset.

2) Ensuring a lessor's ability to carry out all its contractual obligations

If a lessor concludes a leasing transaction that specifies the maintenance/servicing of the
leased asset, the continued solvency of the manufacturer may be key for a lessor to respect
the maintenance aspect of the lease agreement.

This is generally true where that manufacturer is (inter alia) the sole provider of unique spare
parts/specialist knowledge or has implemented a bespoke outsourced service facility for the
asset specified in the lease agreement.



1
 E.g. where there is a legal `right to retain', or a charge has been placed over the equipment by the manufacturer,
until payment has been received from a dealer.

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Hence, in order to investigate the solvency of a dealer (and/or a manufacturer), there should
be easy access to appropriate company searches and accounts information.


RESPONSE TO SPECIFIC CONSULTATION QUESTIONS

          Both options 1 & 2 contained within the Green Paper have convincing aspects

Option 1

As mentioned above, improved access to business registers has many benefits. These are
made possible through the better interconnection of these registers. Accordingly, Leaseurope
supports the objectives of the BRITE project2.

Option 2

Leaseurope believes that the key advantage of IMI is that the 27 Member States already
participate in the system.

Option 3

Subject to a full cost benefit analysis, option 3 (a combination of options 1 and 2) is
optimal.

It would allow lessors to take full advantage of the work already carried out by the European
Commission and the members of the BRITE consortium. In parallel, the European
Commission's goal of enabling access to reliable information on companies in all Member
States, preferably in all official languages of the EU could be realised.

This option should also make it possible to search for information on a company or a group of
companies active in different Member States without having to access the relevant national or
regional registers one-by-one.

An added benefit of this option is that a consistent quality of service across the EU 27 would
exist.

That being said, the European Commission must ensure that national laws on data protection
are observed and that the costs for such a system are kept down.

          Adherence to Better Regulation is key

Any Commission initiative in the field must be carried out in accordance with the Better
Regulation Principles whose importance was recently reaffirmed by the conclusions of the
Competitiveness Council meeting of 3-4 December 2009.




2
  BRITE is aimed at developing and implementing an advanced and innovative interoperability model, an ICT service
platform and a management instrument for business registers to interact across the EU, focusing in particular on the
cases of cross-border seat transfers, mergers and on the better control of branches of companies registered in other
Member States.

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