Civil Law Countries
No civil law country recognizes a unified security interest remotely similar to the broad U.S. security interest or the English floating charge, let alone a family of specialized security interests that can together attach the same types of property. The two countries that come closest are the Netherlands and Germany, but even then, their equivalents are overly hypertechnical, require mountains of expensive paperwork to create multiple security devices (the very evil that UCC Article 9 was designed to address) and are still narrower than Article 9.
Most civil law countries recognize some kind of security interest, but it is normally severely restricted in that it applies only to certain types of movable property, the property has to be specifically described in rigorous detail, the creditor has to publicize the interest in a burdensome fashion, the creditor's enforcement rights upon default are quite weak, and so on. Even worse, the concept of a floating lien that attaches to after-acquired property and accounts receivable is either unavailable or is tightly restricted in scope in most civil law countries.
Unfortunately, many civil law countries do not recognize security interests or, for that matter, priority among creditors, with the result that loans are either priced accordingly as unsecured debt or are simply unavailable. This is one reason why it is so difficult for entrepreneurs to raise money (whether by way of equity or debt) and build startups in much of the world. In those countries, investors are always essentially unsecured and are thus hesitant to invest, and in event of default are more likely to resort to extralegal methods for recovery (or, if all the money is gone, revenge).
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Famous quotes containing the words civil law, civil, law and/or countries:
“Just what is the civil law? What neither influence can affect, nor power break, nor money corrupt: were it to be suppressed or even merely ignored or inadequately observed, no one would feel safe about anything, whether his own possessions, the inheritance he expects from his father, or the bequests he makes to his children.”
—Marcus Tullius Cicero (106–43 B.C.)
“If we love-and-serve an ideal we reach backward in time to its inception and forward to its consummation. To grow is sometimes to hurt; but who would return to smallness?”
—Sarah Patton Boyle, U.S. civil rights activist and author. The Desegregated Heart, part 3, ch. 3 (1962)
“Who to himself is law, no law doth need, Offends no law, and is a king indeed.”
—George Chapman (c. 1559–1634)
“We are the sons and daughters of the world they saved. [Now is our moment] to make common cause with other countries to ensure a world of peace and prosperity for yet another generation.”
—Bill Clinton (b. 1946)