As reported in the seventh edition of this Banking Newsletter, the Belgian parliament passed legislation a few years ago modernising its existing laws on security over movables (Belgian Act of 11 July 2013 on security over movables).
The major benefits of the new legislation will be that:
- it will no longer be a mandatory requirement to perfect a pledge over movables by dispossession; instead, it will be possible to perfect such a pledge by registration in a national register;
- the (high) registration taxes that are currently levied on the floating charge (pand op handelszaak/gage sur fonds de commerce) will be replaced by a (yet to be determined but in all likelihood much lower) cost compensatory fee (retributie/redevance);
- a pledge over a floating pool of assets will be possible in respect of all movables; the existing limitation of floating charges to 50% of the inventory will be lifted;
- a pledge over movables will no longer be prejudiced by the commingling or transformation of the movables;
- it will expressly recognise the use of a security agency structure so that reliance on a parallel debt structure will no longer be required;
- the pledgee/security agent role will no longer be restricted to EU financial institutions (which is especially useful in light of Brexit); and
- the process of enforcing pledges over movables will be simplified; court intervention will no longer be mandatory.
The legislation was originally set to enter into force by no later than 1 December 2014. However, it was postponed to 1 January 2017 in November 2014.
On 15 July 2016, the Belgian government approved a preliminary draft bill seeking to amend the new legislation. The preliminary draft bill has not yet been published, and is still subject to advice by the Council of State and, subsequently, discussion in and approval by the Belgian parliament.
The amendments included in the preliminary draft bill are predominantly technical and clarificatory in nature. The most important amendment is without doubt that the date of entry into effect of the new legislation is proposed to be further postponed until 1 January 2018 (or such earlier date as decided by the executive). The background of this second postponement seems to be that it is taking more time than expected to set up the new national register of pledges.