About the regional survey

Reduced credit risk, supported by effective security, in vital in transition economies. Ten years ago the legal framework for non-possessory security over movables and intangibles in the former communist countries was virtually non-existent. Much progress has been made since then and some countries now have adopted laws which give the basis for developing a modern and economically efficient market for secured credit. Even in the most advanced countries progress is gradual.

The survey is intended to contribute to this process both by providing information to those who may want to take security and by assisting the analysis of necessary change. First produced in 1999, the regional survey is regularly updated.

For further information, see:

• Law in transition, Autumn 2000  
• Facts and figures by country

The survey covers consensual charges over movable and intangible property.

For immovable property, see the Mortgage Regional Survey. Particular regimes applicable to ships and aircraft have not been included as this would introduce too much specialist detail in a survey which is intended to be general. Other special regimes applicable to specific types of assets are mentioned in the notes. Security arising by operation of law or created by court or administrative act is not covered by the survey but is mentioned when relevant to priorities.

The survey does not cover personal security. It only looks at charges which give a proprietary right in the asset given as security. The survey is also limited to transactions which create a proprietary charge, that give the creditor the right to recover a claim by realising a charged asset It does not extend to other transactions which may have a similar economic effect, such as financial leases, retention of title, fiduciary transfers or factoring arrangements. This reflects the legal approach to secured transactions in most European jurisdictions.

Methodology and reasons for tabular approach

Five tables are used to give an immediate overview of the charges law in each country. The first table gives an overview of certain key elements of the charge which are then amplified in the following three tables covering creation, commercial effectiveness and the effect on third parties. An intentional distinction is made between the nature and effect of the charge as a proprietary right which is covered in the first four tables and the means by which it can be realised, the remedies, which is covered in the final table on enforcement.

The value of the survey is enhanced by a uniform approach to all countries and a high degree of consistency in the completion of the tables. The tables are initially completed on the basis of our own analysis of the relevant legal texts and other available information. Some of the questions are intentionally broad and this helped to ensure that specific criteria were consistently applied, failing which the ratings could have become meaningless. The draft tables were then discussed with a number of experts on the laws of each country and amended and adapted to take into account comments received.

Although a tabular presentation does not allow a detailed analysis of the law, this approach has a number of advantages:

• It enables a uniform method of assessment to be used for all countries which facilitates comparison and identification of those issues which are specific to a country and those which apply to transition countries generally.
• It puts emphasis on what has been achieved and what remains to be achieved, rather than just giving a general description.
• It makes the information readily accessible to a wide readership which, we hope, will not be limited to lawyers but will include government representatives and those involved in reform as well as a broad range of persons involved in commerce and finance.

The questions covered by the tables had to be defined and limited. Their drafting was guided by market reality more than by legal theory. Without precisely tracking the EBRD Core Principles for secured transactions laws, the survey for each country gives a reasonable indication of the extent to which they are upheld.

The explanatory notes  (0.1Mb) describe the methodological approach to the survey.

Comments

The EBRD has done its best to be accurate, consistent and fair. However, covering a large number of jurisdictions, combined with limited availability of some information and differing views expressed by those consulted will inevitably have led to some imperfections. Therefore, comments to SecuredTransactions@ebrd.com are highly appreciated.

Acknowledgements

We are indebted to those who have contributed intellectually and financially to the survey.