On 29 March 2013 the Parliament of Samoa passed the Personal Property Securities Act 2013 (PPSA) into law.
The PPSA will reform the law relating to taking, registering and enforcing security over almost all kinds of property, except real property (other than transfers of interests in crops, timber to be cut or minerals to be extracted). The PPSA doesn’t apply to interests subject to the International Companies Act 1998.
The PPSA will cover a wide variety of transactions that secure an obligation with collateral, and will include mortgages, charges, retention of title arrangements and equipment leases. It also covers tangible and intangible assets, including intellectual property.
Schedule 7 to the Companies Act 2001, which provides for the creation of company charges, will be repealed and replaced by the PPSA; the very purpose of the PPSA is to provide a centralised register for all charges against movable property, whether owned by companies or individuals.
The PPSA provides for the establishment of a filing office (Registry) where notices of a security interest (Notice) may be filed to make public the secured party's claim of its interest in a debtor's collateral. By doing this, the secured party establishes its priority (subject to other means of perfection, discussed below) as of the date and time of filing. The Registry will consist of a web-enabled, electronic ‘notice board’ onto which Notices are entered.
The Registry is now in the process of being procured and implemented; this typically takes at least 6-9 months from the passing of such legislation.
Parties will have 90 days (approximately 3 months) from commencement of the PPSA to register their existing security interests or risk losing priority. This is significantly shorter when compared to PPS legislation in other jurisdictions (Australia has a two year transitional period while PNG has a 180 day period). If the registration occurs outside of the 90 day period, its priority will be measured from the date of filing.
Now that the PPSA has been passed into law, it’s vital that you begin preparing for its commencement. Presumably, commencement will be triggered once the Registry is established. Given the narrow 90 day transitional period window, businesses will need to be on top of the changes under the PPSA.
The Corporate and International Business team at Rockwell Olivier has experience across the Pacific and in Australia with the various PPS regimes. We can assist you in:
- identifying security interests and how best you can protect them;
- reviewing the terms and conditions of your contract, particularly where there is a “Retention of Title” interest or lease exceeding one year, as these may now be registered under the PPSA;
- amending your standard contracts to ensure that they are registerable under the PPSA as there are certain requirements for “security agreements”;
- advising on PPS matters generally under the PPSA;
- assisting with the registration of security interests and searches on the Registry when it goes live; and
- informing you as to the risks of not registering your security interests.
Some useful terms
The PPSA introduces some new terminology that’s important in understanding the operation of this new legislation. See the Schedule below for a discussion of some of the key terms.
Click here to see Schedule - Useful Terms.