Law No. 19/2018, of 28 December 2018, which approved the Legal Regime on the Creation of Security Interests over Moveable Assets and creates the Security Interests Registration Central, has just come into force.
The Law significantly amends the civil law regime and perfection rules applicable to the creation of security interests. Inter alia, the following features are worth noting:
- Security interests may be created over cash, agricultural products, debt securities, mineral and oil resources (to finance the relevant exploration and extraction operations), intellectual property rights and any other moveable assets or part thereof;
- Security interests over certain moveable assets shall now be registered with a new entity (which is still to be implemented): the Security Interests Registration Central;
- Security interests over moveable assets are created by means of a written agreement, which does not need to be entered into as a notary deed;
- It is now possible to create security interests over inventories and to create a generic security interest over all assets of the debtor, as well as over its future assets;
- Pledges over bank accounts shall be perfected by means of a “control agreement”. The Law defers the exact scope and rules applicable to “control agreements” to additional regulations to be approved by the Council of Ministers;
- The “pactum commissorium” (i.e., the creditor’s right to automatically appropriate the pledged asset in case of default) is now admissible in certain circumstances;
- The Law expressly allows extra-judicial enforcement “by any means agreed by the parties in the contract”.
The full application of the Law is still dependent on (i) the Security Interests Registration Central being set up and functioning and (ii) additional regulations being approved by the Council of Ministers. Existing security shall be amended or (re) perfected in accordance with the new requirements within 6 months after the Security Interests Registration Central starts operating.
If you require a copy of the Law and / or a more detailed overview of the new legal regime, please contact: email@example.com