The UNCITRAL Model Law on Secured Transactions:

1.2. Preparation issues: complexity of the matter UNCITRAL adopted the STML in 2016, after several years of work (1975-1980 and 1992-2016): this indicates the extremely difficult preparation issues that its drafters had to deal with
Comprehensive scope-functional approach
Relative effectiveness of an SI (which abandons the erga omnes effects of property rights in civil law systems)
Effectiveness of SIs in receivables created in violation of an agreement (contravening the principle of party autonomy)
Registration: notice registration, asset based, for third-party effectiveness and priority
Institutional issues: registry system
Efficient enforcement, including out-of-court enforcement
Law applicable to creation, third-party effectiveness, priority and enforcement
Coordination with property law (SIs in receivables, NIs and NDs, bank accounts, non-intermediated securities, IP rights)
Coordination with insolvency law (the UNCITRAL Guides on ST and Insolvency Law)<br>

1.3. Preparation issues: coordination Coordination with property law
IP rights
Non-intermediated securities
Main difficulty: establish a common terminology and approach to basic issues

Coordination with texts of Unidroit and the Hague Conference: Joint Publication (2012)
Purpose: to ensure that a State can implement all these texts and have a comprehensive and consistent legal framework

Coordination with texts of the WB
A draft revised Creditor-Debtor Standard, referring also to the recommendations of the Secured Transactions Guide, was jointly prepared by the World Bank (Legal Vice-Presidency) and the UNCITRAL Secretariat

The fact that the STML was finally adopted by UNCITRAL suggests that all those issues were addressed to a generally satisfactory level<br>

2.1. Implementation issues: complexity and novelty of the STML The STML is a long and complex text that contains rules that are novel to many States

Examples include:
Comprehensive and functional approach
Relative effectiveness of security interests
Conceptual and institutional issues: assume et-based registry, notice registration, for third-party effectiveness and priority
Priority rules based on registration and exceptions based on possession, control agreement and notation in the books of the issuer
Out-of-court enforcement
Coordination with property and insolvency law
Applicable law issues<br>

2.2. Implementation issues: insufficient resources and coordination The STML has not been widely adopted yet because of
Its length, complexity and novelty
The lack of sufficient resources in UNCITRAL for technical assistance and capacity building
The lack of sufficient industry support
The lack of sufficient support by international finance institutions
The preparation of and insufficient coordination with new texts (Unidroit Model Law on Factoring)
The fact that the Joint publication of UNCITRAL, Unidroit and the Hague Conference on Security Interests and the World Bank Creditor-Debtor Standard have not been updated, despite the requests by UNCITRAL, in particular in 2016 and 2017

The fact that the STML has not been widely adopted yet suggests that these issues still need to be addressed<br>

3. Other issues: unification and harmonization of international trade law in times of change The UN is involved in the progressive harmonization of the law of international trade, because international trade is the other side of peace and stability and international trade law is the cornerstone of international trade

However:
International trade law requires international trade (not sanctions)
International trade requires peace and stability (not war and unrest)
Peace and stability requires consensus, at least on some basic issues (not abuse of the weak by the powerful)<br>

3. Other issues: unification and harmonization of international trade law in times of change In 1966, the UNGA decided to establish UNCITRAL on the basis of the findings of the Schmidthof Study that:
The progress in the unification and harmonization of the law of international trade had been rather slow
The developing countries of recent independence have had the opportunity to participate only to a small degree
None of the formulating agencies commanded world-wide acceptance or a balanced representation of countries
The coordination and co-operation among formulating agencies had been insufficient, with a considerable amount of duplication and waste of resources as a result
To the extent these problems still exist, the UN, UNCITRAL has still a valuable role to play in the promotion of the progressive harmonization of the law of international trade on the basis of equality and mutual benefit for the promotion of friendly relations among States (Preamble of the CISG and the UN Assignment Convention). But efficiency requires:
Balanced participation and consensus among all States, with developed and developing economies
Balanced treatment of all issues, including debtor/creditor issues<br>

Thank you!

Questions?




© Spyridon V. Bazinas<br>