13 Feb 2018

UAE Federal Law No 20 of 2016 on the mortgage of movable property - Security registration is now available

Authored by: Valeria Lysenko

UAE Federal Law No 20 of 2016 on the mortgage of movable property - Security registration is now available

As earlier reported in January 2017 (http://www.hadefpartners.com/News/242/Tightening-the-Security-Belt), the UAE new moveables security regime was introduced by the UAE Federal Law No 20 of 2016 on the mortgage of movable property to secure debt (FL20).

FL20 requires registration of security interests in order to secure priority against competing interests. The registration is now available with the Emirates Movable Collateral Registry.

The Emirates Movable Collateral Registry allows free public searches of registered security. It also enables certified searches and registration of notices.

Registration of initial notices of security interests is enabled against assets of various security providers, both the primary obligors and third party security providers, including non-resident foreign persons (whether physical or legal) and UAE entities incorporated by decree. The description of the collateral is generally required to be specific.

Registration of notices attracts relatively nominal fees. Registration of notices of termination of security interests, including by court order, is free of charge.

Banks and other secured parties currently holding pledges over moveables by way of possession now have until 15 March 2018 to register their priority. They are advised to do so without delay. There is no extension of time granted as far as we are aware.