Interlaw Ltd., an Elite* global law firm network, is delighted to present this survey of how practices differ across the world when a lender takes security or collateral over moveable property. Terminology can be an issue here - some talk of "security", others of "collateral" or "charge"; some call the assets in question "moveable", others talk of "personal property"; and that's before we bring other languages into consideration. By whatever name called, we're considering taking security for finance over such things as vehicles, plant and equipment, receivables, contractual rights - in other words both tangibles and intangibles, but generally not land and buildings.
With the globalisation of commerce and finance, it is of vital importance to lenders and other financiers to understand that the opportunities for taking collateral in their home jurisdictions may not exist in other jurisdictions or indeed that they may be greater in other jurisdictions. While no one can be an expert in all jurisdictions, it will be helpful to have some advance feel for what might be on offer elsewhere.
This survey has been prepared by Interlaw Member law firms that participate in the network’s Banking and Finance Special Business Team. It is written in in layman's terms for the finance professional.
We start with some teaser questions - " Lenders Beware - Did you Know?" - highlights of what seems normal in one jurisdiction but which may cause consternation in another.
In some jurisdictions, for example, a lender can take a floating charge, valid as a security over all a debtor's assets from time to time without the need to specify those assets individually. Other jurisdictions would regard that as anathema. The Interlaw member firms can guide you through this labyrinth wherever you are or your debtor's assets are.
Five questions are then answered for each jurisdiction:
- How do you secure moveables (also known as personal property, moveable assets or collateral) both tangible and intangible in your jurisdiction?
- What, generally, is the priority of different types of security available for these types of assets?
- What taxes, duties or other fees are payable on these securities?
- What, generally, is the method of enforcement of these securities?
- What other issues should be considered when looking at securing such assets?
We hope you find this useful as a quick reference guide. But it is only a guide. Nothing in what follows should be relied on as legal advice; it is not intended as such. However, each contributing firm would be delighted to hear from you and expand on the simplified summaries given in this survey.
* Chambers & Partners ranks Interlaw as an “Elite” Global Law Firm Network, the highest ranking awarded.