On May 15-17th GERMELA took part in the 20th German-Arab Business Forum in Berlin. The event was organized by the German-Arab Chamber of Commerce (Ghorfa) in cooperation with the Union of Arab Chambers as well as the German Industry and Trade Chambers (DIHK) and Oman Chamber of Commerce and Industry. The conference at the Ritz Carlton in Berlin was held under the patronage of the German Federal Minister for Economic Affairs and Energy, H.E. Brigitte Zypries, who gave a keynote speech. More than 600 decision makers and renowned specialists from business, politics and science attended the high-level forum. Official partner country was the Sultanate of Oman.
Ghorfa was founded in 1976 as a joint initiative of trade chambers from Arab countries and German business circles. It represents all Arab trade chambers in Germany and aims to foster German-Arab trade relations. Since 2014, former German Federal Minister of Transport, Building and Urban Development, Peter Ramsauer, is serving as Ghorfa Chairman.
The Arab world but also Iran and Germany traditionally share close business ties. With approximately 400 million inhabitants and a gross domestic product of more than 2.7 trillion US dollars, the Arab world is an attractive market for business and investment. In turn, Germany is considered to be the strongest economy in Europe offering manifold business opportunities. In addition, German companies have gained an excellent reputation in the Arab world and play a valuable role in various modernization and diversification programs in the region. Also the Iranian market is attractive for German businesses but finding the balance between good relationships to the Arab world and Iran can be a tightrope. Our consultants are very familiar with this matter and work closely with organizations and agencies together to help decrease those tensions in the business world. The video by VOX below explains some of the fundamental political tensions between Iran and the Arab world.
First, a new Egyptian law governing the taking of security over movable assets was passed in November 2015 (i.e. the law no. 115 of 2015). The new movable securities law introduced the principle of non-possessory collateral security. Its broad scope includes movable assets as well as intangible assets such as receivables, credit notes and intellectual property rights.
According to the respective Executive Regulations, issued in December 2016, the Egyptian Financial Supervisory Authority will establish an electronic online-based registration system for all pledges established under the new law to be registered and published.
However, the registration of a pledge agreement is not mandatory and a lack of registration will not render the pledge void. Still, registration of a pledge will grant the creditor a secured first rank security over the pledged asset. Furthermore, the pledged asset will be excluded from the debtor's insolvency estate thus providing even better security to the pledgee, provided the respective pledge under the new law has been perfected and registered before the commencement of the insolvency proceedings.
In January 2017 the new Turkish law on movable property pledges in commercial transactions (i.e. the law no. 6750) entered into force. The new legislation's principal aim is to facilitate small and medium sized enterprises' access to financing solutions that come with little interference with business operations as well as minimal financial burden with regard to commercial collateral.
The two most important changes in the legal framework for commercial pledges pertain to its scope:
While formerly only financial institutions, sales enterprises operating on credit and cooperatives could act as a pledgee and only the owner of a commercial enterprise was allowed to enter into a pledge agreement as a pledgor, the new law substantially widens the personal scope of commercial pledges. Under the new law pledge agreements are namely divided into two distinct groups with regards to the personal scope. First, where a financial institution accepts a pledge as collateral, merchants, small traders, farmers, producer organizations and self-employed persons may act as pledgee. Secondly, merchants and small traders may enter into pledge agreements with each other. This means, that commercial pledge agreements are no longer restricted to contractual relationships vis-à-vis financial institutions, but can be utilized in an extensively broader spectrum.
The second amendment to the scope of commercial pledges deals with the assets that are qualified as pledgeable. Formerly, pledge agreements were strictly limited to specific assets such as commercial titles and trade names as well as local equipment assets. Under the new legal regime the scope of pledgeable assets includes all of the pledgor's tangible and intangible assets.
Turkey will also establish a new Pledged Movable Property Registry that will be responsible for the receipt and validation of the respective written pledge agreement as well as for registration, monitoring and facilitating an increased transparency of commercial pledges.
The United Arab Emirates (UAE) have created a new legal regime regarding the pledge of movables as security for a debt which entered into force in March 2017 (i.e. the law no. 20 of 2016). As opposed to the situation in most other middle eastern jurisdictions, the notion of disembodied pledges as well as pledges over movable and intangible assets is not entirely new to the Emirates' jurisdiction. Pledge agreements with such scope had been introduced to the UAE's law in 1993 by the Commercial Transactions Law (i.e. the law no. 18 of 1993) already. Still, the new law makes commercial pledges easier to handle by broadening the scope of admissible assets significantly and simplifying the procedures for pledges.
The scope of the new law covers any movable asset, tangible or intangible, existing or in the future.
Furthermore, the most important procedural step for creating a pledge over and asset will be registration of the pledge with the Security Registry. Once this registry is established – presumably on an electronic basis – no execution of an agreement before a notary public will be necessary anymore, as it was under the Commercial Transactions Law.