This means that credits in the form of supplier’s credit, intra-group loans and factoring or leasing activities would not fall within its scope.
The law also imposes a nullity sanction on certain clauses.Īccording to the preparatory works of the SME Finance Act, only “financial” credits fall within its scope.
#FACTORING INVOICES ADVANCEMENTS CODE#
The law among others provides that funding loss and breakage costs in credit agreements to SMEs must comply with the mandatory code of conduct for SMEs. the lender directs such activities to Belgium or to several countries including Belgium,Īnd such credit arrangement falls within the scope of those activities in Belgium.
#FACTORING INVOICES ADVANCEMENTS PROFESSIONAL#
Note however that a notification to or acknowledgement by the debtor after the assignor’s insolvency can no longer improve the factor’s ranking, given all creditor positions will be fixed on insolvency. It will however not be effective on the debtor if served after the debtor has paid the relevant receivable. The notification can even be served after the insolvency of the assignor. The debtor’s obligations can also only be validly discharged by payment to the assignee after such notification or acknowledgement.įinally, it is possible to only disclose the assignment at a later stage (for instance, in case of an event of default or enforcement event). The transfer will however only be perfected against third parties with a concurrent right, such as (second) assignees or pledgees, in case the debtor has been notified of the transfer or has acknowledged the transfer. Therefore, if for instance the factoring contract would be governed by Belgian law and if the assignor had its habitual residence in France, the Belgian law factoring agreement will also need to comply with any French law requirements to ensure it can be enforced against the creditors of the assignor. This is irrespective of the law chosen in the factoring agreement. Pending uniform legislation at EU level, Article 87, §3 of the Belgian Code of Private International Law currently states that the enforceability of an assignment of receivables against third parties (other than the debtor but including a bankruptcy trustee) is determined by the law of the State on the territory of which the assignor had its habitual residence at the time of the assignment. More information on this proposal and its current status can be found on EUR-Lex (). To reduce this complexity, the European Commission is currently working on a proposal to adopt uniform conflict of laws rules at EU level. Since these rules vary across jurisdictions and different private international rules refer to each other, structuring cross-border receivables financing transactions remains complex and requires detailed prior analysis of the potentially applicable legal regimes. Whilst Article 14 of the Rome I Regulation harmonises certain private international law rules with respect to the assignment of receivables, it does not provide for a uniform conflict rule as to which law should govern the enforceability of the assignment of a receivable against third party creditors of the assignor. The relationship between the assignee and the debtor, the conditions for the assignability of the receivables and the determination of when the debtor's obligations are discharged are governed by the law of the commercial contract with the debtor in accordance with Article 14(2) of the Rome I Regulation. Given the Rome I Regulation in principle grants parties the freedom to choose the applicable law of a contract, the law applicable in the contractual relationship between an assignor and an assignee will be the law chosen by the parties in the contract, subject to certain exceptions included in the Rome I Regulation. The relationship between an assignor (seller, originator) and an assignee (purchaser) under a voluntary assignment of receivables is governed by the law applicable to the factoring agreement in accordance with Article 14(1) of the Rome I Regulation.
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