Insolvency and creditor rights (ICR) constitutes one of the twelve areas in which the joint World Bank and International Monetary Fund (IMF) Initiative on Standards and Codes undertakes assessments.
In order to carry out these assessments, the World Bank uses the World Bank Principles for Effective Insolvency and Creditor Rights Systems (Principles) and the UNCITRAL Legislative Guide on Insolvency Law (Legislative Guide). These two complementary texts represent the international consensus on best practices and set forth a unified standard for ICR systems. In addition, these texts serve as reference points for evaluating and strengthening countries’ ICR systems.
|World Bank Principles for Effective Insolvency and Creditor Rights Systems |
The Principles were developed in 2001 in response to a request from the international community in the wake of the financial crisis in emerging markets in the late 1990s. At that time, they constituted the first internationally recognized benchmarks to evaluate the effectiveness of domestic creditor rights and insolvency systems. The Principles were revised in 2005 and 2011.
The 2011 Principles have been reviewed and revised to incorporate updates to UNCITRAL’s Legislative Guide on Insolvency Law. In this regard, two new Principles (C16 and C17) have been added to reflect the best International Practice concerning the insolvency of Enterprise Groups.
|UNCITRAL Legislative Guide on Insolvency Law|
The UNCITRAL Legislative Guide was completed in 2004 with the goal of encouraging the adoption of effective national corporate insolvency regimes. The Legislative Guide focuses on the key elements of an effective insolvency law and presents a detailed series of Legislative Recommendations (“Recommendations”) which include a discussion of various options and approaches. The text of the Legislative Guide is available on the UNCITRAL website.
|Insolvency and Creditor Rights Standard|
The World Bank, and UNCITRAL, in consultation with the IMF, have prepared the Insolvency and Creditor Rights Standard for ICR ROSC assessments (the “ICR Standard”). The ICR Standard combines both the Principles and the Recommendations in one document.
This unified ICR Standard is available here:
Creditor Rights and Insolvency Standard (2011)
Creditor Rights and Insolvency Standard (2005)
|Insolvency and Creditor Rights ROSC Methodology|
The ICR ROSC assessments are carried out using this methodology (2011).