Guides To Trading Safely in the New Europe
A series of reports has been launched to help British exporters protect themselves from bad debts whilst doing business with three of the EU's newest members, Poland, Hungary and the Czech Republic.
Atradius, a leading credit insurance and credit management specialist, says the Eastern European countries offer great trade potential for UK businesses. But Atradius warns that if UK companies do not understand local credit procedures, they could end up out of pocket exporting to the EU accession countries.
So Atradius has published detailed Country Reports on the Czech Republic, Poland and Hungary providing important intelligence such as the country credit rating and economic outlook, recommended payment options and advice on how to reduce the risk of a bad debt.
Atradius says there are significant differences in business procedures that UK companies should bear in mind. For example:
Â·In the Czech Republic recovering a debt in court can take almost a third
longer than the rest of Europe - 300 days compared with an average of 229
in the EU
Â·Insolvency takes even longer in the Czech Republic - more than nine years compared with an average of less than two years elsewhere in Europe
Â·In Poland collection letters or dunning letters are not always effective, a collection agency will be more successful in recovering a debt
Â·If a debt dispute goes to court in Poland, it can be expensive and lengthy - cases take on average 1,000 days, almost five times longer than normal
Â·In Hungary collection reminders are more effective if signed by a local lawyer - debtors can be charged interest of 7% over the bank base rate
Â·Insolvency legislation in Hungary suffers from a lack of debtor control - in 95% of insolvency cases there are not enough assets to satisfy creditors
Chris Davies, Atradius Senior Group Economist, says: "The EU accession countries offer some of the biggest and most lucrative trading opportunities for UK businesses. But just because they are now members of the EU it does not mean that doing business there is the same as trading with a UK customer.
"There are different laws and business procedures, and the legal system is often inefficient. If UK companies do not check out the partner they are trading with and don't understand local laws, they could end up waiting longer to be paid or might end up not getting paid at all."
The new overviews are the latest in a series of Country Reports published by Atradius. Also newly published are country overviews on Spain and the Netherlands, which join previous reports on export markets including France, Germany and the US.
Each Country Report features useful websites for additional information, such as each territory's central bank and national statistics office, as well as English translations of key credit management terms for each of the countries covered.