Like many other European countries, Greece welcomes business and investment from overseas, but for many small and medium sized enterprises (SMEs) the prospect of operating outside the borders of its own country can be very daunting.
This uncertainty can be caused by a number of factors, including possible language difficulties, cultural differences, a lack of knowledge of the legal systems operating in other countries and the need to source local expert advice from professionals such as lawyers or accountants.
In the current economic downturn, going abroad to countries such as Greece to do business can offer a life-line to companies struggling to find a big enough customer base in their home country. Many businesses may also be finding that they have no choice but to operate abroad if they wish to remain competitive. The European Union has a population of around 500 million, making it one of the biggest marketplaces in the world and an ideal destination for ambitious companies that are eager to expand their business operations.
One particular fear SMEs may have about operating internationally is how to ensure they receive payment for the goods or services they provide to customers in another country. If payment is not forthcoming and a debt recovery situation develops, the company may be unsure how to go about finding a lawyer and taking legal action to ensure all money owing to it is recovered.
The European Commission (EC) is aware that these issues and concerns can create barriers to overseas business, and is taking action to promote the operation of SMEs across international borders.
International debt recovery
One such measure from the EC is the launch of a new initiative that aims to support SMEs in recovering debts across borders, by advising them how to make use of existing laws and mechanisms to effectively tackle overseas debtors. The campaign is running in Greece as well as the other 26 EU Member States, and also in Croatia.
"With this campaign we wish to encourage small enterprises to operate beyond their borders,” explained European Commission Vice President Antonio Tajani, who is responsible for Industry and Entrepreneurship. “Facilitating the recovery of cross-border debts is the key to addressing this issue at a time when Europe’s 21 million SMEs face particular obstacles to tapping cross-border markets.”
“Their uncertainties are mainly due to the lack of knowledge of existing mechanisms for reducing the risk involved in cross border contracts, insufficient credit management processes, or even cultural differences in doing business between different Member States," he added.
Using existing laws
There are already a number of laws in place across the EU that are designed to support businesses in dealing with cross-border disputes that could potentially lead to litigation.
These laws have been developed to help businesses resolve issues such as contractual obligations and to establish competent jurisdiction in the event of a dispute.
In determining cross-border contractual obligations in the EU, the principle of free choice of law applies. This principle says that:
“If no law is chosen by the parties, the law applicable to sales contracts in respect of movables, services, franchise or sales contracts will be determined by the domicile of the party providing the characteristic performance.”
In terms of competent jurisdiction, EU laws dictate that in a dispute, jurisdiction will usually rest with the court of the country in which the defendant is domiciled. If an SME is in a situation where it needs to enforce a cross-border claim in court, the court of the country in which the customer is domiciled will normally be deemed to be the competent court. However, in certain situations it may also be possible for the SME to take legal action in another Member State’s court.
Procedures are also already in place in EU Member States to help businesses in debt recovery across international borders.
Legal expertise at a local level
Each Member State may apply these EU laws and procedures slightly differently, and understanding these complexities can be challenging for businesses looking to operate internationally. Law firms in Greece such as Kosmidis & Partners Law Firm have English speaking lawyers that are fully qualified to help overseas businesses overcome these barriers. Our lawyers can advise companies operating in Greece in the interpretation and application of these laws to ensure any business transactions, including debt recovery, are conducted as quickly and efficiently as possible.
Improving trade mark registration
The EC has also recently taken action to improve the trade mark registration system across the EU.
Trade marks are an important legal tool, and a properly registered trade mark can become one of a company’s most important assets. It allows a business to distinguish itself from its competitors and gain a real competitive edge by:
- enabling customers to easily identify the source of the goods or services,
- providing customers with a guarantee of consistency and quality, and
- assisting in a company’s marketing and advertising strategy by forming a key part of a company’s brand identity.
Failing to properly register a trade mark could have very serious consequences for a business. It could allow a competitor to seize the opportunity to register the trade mark for itself and use it to promote its own goods and services.
The level of demand for trade mark protection across the EU is very high. Figures from the EC show that there were approximately 540,000 trade mark applications made in 2011. The figures also show that, as of March 2013, there were around 9.8 million trade marks listed in registers throughout the EU.
In light of how important trade marks are for business, the EC has proposed a series of reforms that are designed to encourage business innovation by ensuring companies have greater trade mark protection against counterfeits.
"Trade marks were the EU’s first success in intellectual property rights,” said Internal Market and Services Commissioner Michel Barnier. “The harmonisation of Member States' laws in 1989 and the creation of the Community trade mark in 1994 paved the way for other tools for intellectual property protection, such as design protection and the unitary patent.”
“Today, 20 years later, I am very proud to announce that our trade mark system has stood the test of time. There is no need for a major overhaul: the foundations of our system remain perfectly valid. What we are aiming for is a well-targeted modernisation to make trade mark protection easier, cheaper, and more effective," he concluded.
The EC’s proposed revisions include:
- Streamlining and harmonising the trade mark registration procedure across all Member States, and using the existing Community trade mark system as a benchmark;
- Bringing the existing provisions up to date, and increasing legal certainty by removing any ambiguities and incorporating the case law that has been established over time by decisions of the Court of Justice of the European Union;
- Enhancing the tools that are available to tackle the problem of counterfeit goods being transported across the EU; and
- Putting measures in place to encourage greater cooperation between the trade mark offices located in each Member State and the EU trade mark agency (the Office for Harmonisation in the Internal Market). This would allow for a greater convergence off their practices and enable common tools to be developed.
According to the EC, these changes would make trade mark systems across Europe more accessible and efficient, and would therefore encourage business innovation and growth.
Kosmidis & Partners Law Firm has a team of highly experienced lawyers that are able to advise clients on all aspects of trade mark law in Greece, including the registration of a trade mark and how to seek damages in the event of a breach of trade mark protection.
The EC’s trade mark proposals will now be passed to the European Parliament and the European Council for adoption. The EC hopes the new proposals will be adopted by the spring of 2014. Member States will then have two years to implement the new rules of the Directive into national law.