Russia

Russia’s secured transactions framework is contained in their civil code. The most notable update to this framework occurred on the 1st of July 2014. One of the amendments comprised the introduction of a public, notice-based Register of Pledges of Movable Property. Although registration is implied to be voluntary, registration is necessary in order to make the right enforceable and protected. If registered, the asset in question is protected against third parties, unless the purchase is in good faith, which terminates the pledge. Non-possessory pledges are possible over movable assets, as well as tangibles, and intangible assets such as contractual claims, or rights to bank accounts. There is also availability for an out-of-court enforcement. This can be agreed between the parties, in order to realise the value within the pledged asset. This can be done by selling the asset in question by auction, or a private sale. One of the issues with this legal framework is that it clashes with other existing Mortgage law, which governs security interests over immovable property such as land. The amendments of July 2014 govern pledges generally, and they introduce a relaxation of formalities. For example, pledge agreements no longer have to include the value of the asset. Additionally, a general reference to the obligations that are being secured by the pledge is enough, a detailed description is unnecessary. However, Federal Mortgage Law has not been updated to be in line with this. In order to create a security interests over immovable property, it is still necessary that there is a detailed description of the nature and size of the obligation that that is to be secured by the property in question, as well as the value of the property. It is thus unclear whether the general provisions in the civil code should take precedence over the specific mortgage law. In this regard, a separate, comprehensive framework over security interests in movable property would be an improvement.

Click here to Access the Russian Civil Code (English Translation)

Click here to Access the Register of Pledges of Movable Property

Further Reading