An important reform of the Belgian law on securities on movable goods took place in 2013. The new regime will enter into force no later than 1 December 2014.
Simplification of the rules applicable to security
The aim of the legislator was mainly to simplify and render more coherent the rules applicable to security rights. In this regard, the reform will lead to:
- a unification of the provisions applicable to pledges;
- a generalisation of the validity of the retention of title clause previously confined to bankruptcy proceedings;
- enshrining of the right of retention in the Belgian civil code recognised as a security right.
No dispossession requirement for the establishment of a pledge
The most important change is the abolition of the requirement of dispossession for the constitution of a pledge and the establishment of a disclosure regime based on registration with a national pledge register to render the pledge binding against third parties.
Besides, this new so-called "register pledge", the establishment of a pledge with dispossession for tangible goods will still be possible under the former conditions.
Other significant changes
The two following changes are also worth noting:
- the simplification of the enforcement proceeding in the framework of B2B pledges. The intervention of a judge is no longer required to enforce a pledge. Upon the initiative of the debtor, the enforcement may be subject to the control of the judge who will appreciate if such enforcement was done in good faith and was economically justified;
- the introduction of a concept similar to the UK security trust. A third party is now entitled to conclude a pledge agreement on behalf of one or more beneficiaries.
All pledges with dispossession established under the provisions of the former law will remain binding against third parties with effect from the date of the entering into possession. On the contrary, business pledges will have to be registered in the pledge registry within twelve months from the entry into force of the new provisions of the Belgian civil code to remain binding against third parties.