Download the file - United Nations Rule of Law

cured creditors have priority to the proceeds fromthe sale of their collateral.Armenia: since March 2004, the debtor automaticallyloses control of his or her property to anadministrator on bankruptcy, increasing creditorrights.6. Introduce a new Leasing law:The development of leasing as a complementarytool to bank loans provides an alternative solution,which can significantly expand access tocapital for business.Benefits are: (a) an effective tool where capitalmarkets are less developed; (b) security arrangementsare simpler as it is provided by the leasedasset itself; (c) little cash is required, allowingthe lessee to conserve cash or use it as workingcapital; (d) tax incentives often make it possiblefor SMEs to reduce income before taxes; and(e) promotes investment in capital equipment,increases competition in the financial sector, andfacilitates the transfer of new technology.Serbia and Montenegro: since passing a new leasinglaw in May 2003, nine new leasing companieshave opened for business. They expect toissue US$170 million in leases this year, roughlyhalf of all SME finance in the country.Uzbekistan: the level of leasing transactions wasextremely small, now there are 23 leasing companiesfinancing SMEs.Kazakhstan: after amending the tax law in 2003,six new lessors opened: leasing deals grew fromUS$57 million to US$89 million within threemonths of the introduction of the new legislation,and the average deal size fell from US$190,000to under US$90,000, bringing leasing withinreach of more SMEs.Egypt: lease law introduced in 2000. Seven leasingcompanies cover most sectoral activities andmore than $5 billion of financial leasing activitieswere introduced in the financial market.7. Repeal the normative acts, which authorisebanks to carry out functions that are not appropriatefor financial intermediaries:Uzbekistan: banks act regularly as tax agents totrack timely tax payments and other mandatoryreturns by SMEs and to withdraw the outstandingamount of taxes and other payments owed tothe authority. Obviously, SMEs do not view banksas effective financial intermediaries. As a result,there is a need to repeal the normative acts,which authorise banks to carry out functions, thatare not appropriate.Enforcing Contracts1. Summary proceedings:Russia: the most popular reform in 2003 was theintroduction of summary proceedings for the collectionof small debt and other smaller commercialdisputes. In late 2002, 60 percent of debtcollection cases in Moscow used this procedure.A summary procedure typically takes two monthsfrom start to finish, nine months less than a generalprocedure.2. Introducing case management:Case management can be described as a procedurein which the judge follows the case fromstart to end, reduces delays and increases usersatisfaction. In addition, this is very important forcollection of debt. The average duration of debtcollection is five months in rich countries wherejudges actively manage the case, and nearly 18months in rich countries where judges don’t.Finland: an electronic system of recording waspart of the case management. A judge can followeach case at any moment, reducing the time ittakes to reach resolution.Slovakia: this system has been implemented250