Draft legislative guide on secured transactions

(c ) Colloquium on Reform of Secured transactions Law the draft UNCITRAL Legislative Guide on Secured Transactions (Clermont Ferrand, France 23 April 2004)

A legal system that supports secured credit transactions is critical to reducing the perceived risks of credit transactions and promoting the availability of secured credit.

Recommendations of the draft Legislative Guide on Secured Transactions

Recommendations of the draft legislative guide on secured transactions

K. Harmonize secured transactions laws, including conflict of laws rules

(f) The possible repercussions for secured transactions and secured creditors in the way in which corporate groups are treated in insolvency.

This Guide adopts terminology to express the concepts that underlie an effective secured transactions regime.

Furthermore, to the extent complete harmonization of national secured transactions laws might not be achieved, conflict rules would be particularly useful to facilitate cross border transactions.

The recommendations of the Guide are addressed to national legislators considering reform of domestic secured transactions laws.

This is most likely the case in States whose secured transactions regime is not up to date.

The purpose of this Guide is to assist States in the development of modern secured transactions laws with a view to promoting the availability of low cost secured credit.

These examples represent only a few of the numerous forms of secured credit transactions currently in use, and an effective secured transactions regime must be sufficiently flexible to accommodate many existing methods of financing, as well as methods that may evolve in the future.

These transactions are essentially non possessory security rights, and they are primarily used in States where the secured transactions law has not yet appropriately recognized non possessory security rights.

However, in developing its secured transactions law, a State should take account of the increasing importance and economic value of intellectual property assets to companies seeking to obtain low cost secured credit.

(dd) Consultations with German Ministry of Justice on the draft Legislative Guide on Secured Transactions (Berlin, Germany 15 November 2004)

Subject to the limitations discussed in the following paragraph, the secured transactions law would apply to security interests in intellectual property rights.

(cc) Bank account means, subject to law other than secured transactions law, an account maintained by a bank into which funds may be deposited.

A key to a successful legal regime governing secured transactions is to enable a broad array of businesses to utilize the full value inherent in their assets to obtain credit in a broad array of credit transactions.

To best promote the availability of low cost secured credit, the Guide suggests that secured transactions laws should be structured to enable businesses to utilize the value inherent in their property to the maximum extent possible to obtain credit.

In this regard, the Guide adopts two of the most essential concepts of successful secured transactions laws, the concepts of priority and effectiveness against third parties.

(dd) Intellectual property right includes, subject to law other than the secured transactions law, patents, trademarks, service marks, trade secrets, copyright and related rights and designs.

(b) The record of the registry is centralized that is, it contains all notices of security rights registered under the secured transactions law of the enacting State

In the spirit of providing practical, effective solutions, the Guide explores and develops the following key objectives and themes of an effective and efficient secured transactions regime.

3. Also commends the Commission for the approval of the substance of the recommendations of the draft legislative guide on secured transactions, which has been designed to facilitate secured financing, thus promoting increased access to low cost credit and enhancing national and international trade

In conjunction with that session, an informal presentation was made of the recently completed secured transactions law in the Slovak Republic, which was supported by the World Bank and by EBRD.

Often weapons are diverted from poorly secured government stockpiles by corrupt officials or thieves, but frequently transactions are facilitated by illicit brokers taking advantage of poor or non existent import and export controls.

Security rights in such assets are not excluded but, in the case of any inconsistency between such a special law and secured transactions law, the special law (e.g. the special registration system) prevails.

(c) Secured obligation means the obligation secured by a security right.

As regards the reporting obligation, the CTC has noted that no convictions have been secured in Thailand for failing to report suspicious transactions and that a maximum fine of 300,000 Baht may be imposed.

Set forth below are short examples of the types of secured credit transactions that the Guide is designed to encourage, and to which reference will be made throughout the Guide to illustrate specific points.

At the same time, the Guide takes into account that other legislation may protect the legitimate interests of consumers or other persons and specifies that a secured transactions regime should not override such legislation.

Essential to this balance is a close coordination between the secured transactions and insolvency law regimes, including provisions pertaining to the treatment of security rights in the event of a reorganization or liquidation of a business.

Adoption of legislation based on the recommendations contained in the Guide will result in harmonization of secured transactions laws (through the adoption of similar substantive laws which will facilitate the cross border recognition of security rights).

Valuation of secured claims

Note to the Working Group The insolvency chapter will need to address other terms used in the Insolvency Guide and the Secured Transactions Guide the definition of security interest and security right , for example, differ in the two texts.

Commercial transactions

Financial transactions

4. Also commends the Commission for the progress made in the work on the draft legislative guide on secured transactions, on model legislative provisions on interim measures in international commercial arbitration and on issues of electronic contracting and transport law

At its second session (Vienna, 17 20 December 2002), the Working Group considered chapters VI, VII and IX (A CN.9 WG.VI WP.2 and Add.6, 7 and 9) of the first preliminary draft guide on secured transactions, prepared by the Secretariat.

The Working Group, which is preparing a draft legislative guide on secured transactions, has held until the thirty eighth session of the Commission, in 2005, seven one week sessions during which it considered draft chapters of the legislative guide prepared by the Secretariat.

(w) Negotiable instrument means, subject to law other than secured transactions law, an instrument that embodies a right to payment, such as a promissory note or a bill of exchange, which satisfies the requirements for negotiability under the law governing negotiable instruments.

(c) Foreign exchange transactions

Repos are financing transactions.

Sale and leaseback transactions