Civil Section Minutes 2007


UN Convention on the Assignment of Receivables in International Trade 

Uniform Act and Revised Commentaries

Presenter: Kathryn Sabo, General Counsel, International Private Law Section, Department of Justice, Canada

At its August 2005 meeting, the Conference approved a pre-implementation report prepared by J. Michel Deschamps and Catherine Walsh on the UN Convention on the Assignment of Receivables in International Trade (the “Convention”). Acting on the recommendations in the Report, the Conference approved the establishment of a Working Group to prepare a Uniform Act to implement the Convention and to prepare complementary legislation. The Working Group was mandated to work with the National Conference of Commissioners on Uniform State Laws (NCCUSL) and the Mexican Uniform Law Centre with a view to coordinating implementation of the Convention in all three NAFTA countries.

In August 2006, the Working Group presented a final draft Uniform Act, with commentaries and related recommendations to the Conference. The Uniform Assignment of Receivables in International Trade Act was approved in principle, with final approval postponed until the final meetings on the joint project had taken place.

A joint meeting and consultation session was held in New York on October 16, 2006 which was aimed at determining whether industry supported ratification of the Convention in the United States. A further joint session was held in Chicago in November 2006. Thereafter, work continued by conference call through August 2007. The Chair specifically thanked the Working Group for its enthusiasm, and on behalf of the Working Group and thanked the Mexican Uniform Law Centre and NCCUSL for organizing and hosting the very productive joint meeting and conference calls.

The joint meetings between representatives of the ULCC Working Group and their U.S. and Mexican counterparts produced a consensus that implementation of the Convention in the three countries would produce significant benefits at two levels. First, it would substantially harmonize receivables financing law throughout the NAFTA region. Second, it would encourage other states to adopt the Convention so as to eventually bring about global harmonization. The joint discussions led to a modification to the commentary respecting section 2 of the Draft Uniform Act – the commentary now mentions article 23(3) of the Convention (dealing with a form of declaration). This is the only difference between the version submitted to the Conference in 2006 and the version submitted this year.

The Conference was reminded that, in its 2006 Report, the Working Group also submitted suggested complementary amendments to Personal Property Security Acts to remedy the incompatibility with the Convention that certain PPSA amendments proposed by Ontario would create.

The Working Group recommended:

1. That the Conference approve and adopt the Draft Uniform Assignment of Receivables in International Trade Act and commentaries set out in Appendix 1 to the Report, along with the proposed PPSA amendments set out in Appendix 2.

2. Should the Conference undertake work with respect to personal property security, it is recommended that the complementary amendments set out in Appendix 1 to the 2006 Report of the Working Group be considered and that implementation of the Convention be taken into account.

Discussion:

Ian Govey (Australia) noted that they would be looking with interest at the work that has been done on this joint project, as they are considering reforming their personal property securities legislation.

RESOLVED:

THAT the Uniform Assignment of Receivables in International Trade Act and amended Commentaries as presented to the Conference be adopted and recommended to the jurisdictions for enactment.

THAT the Civil Section Steering Committee continue to have under consideration the reforms to secured transactions legislation contemplated in the Report of the Working Group presented to the Conference at its August 2006 meeting and that they be addressed in connection with any project undertaken respecting secured transaction legislation.

Next Annual Meeting

2018 Conference (Centennial)

Delta Hotel

Québec City, QC

August 12 - 16, 2018