Bill on the abolition of the prohibition on pledging submitted to the Lower House of Parliament
On 2 June 2020, the bill concerning the Pledging Prohibitions (Abolition) Act (Wet opheffing verpandingsverboden (the "Act")) was submitted to the Lower House of Parliament. The Act is aimed at prohibiting clauses that are used in trade to assign or pledge monetary claims. Once the Act enters into force, it will no longer be possible to make use of prohibitions on the assignment or pledging of monetary claims arising from the exercise of a profession or a business.
An important goal of the Act is to give SMEs in particular greater access to credit. For SMEs, the possibility of assigning or pledging monetary claims is often excluded. This can lead to difficulties, especially when a business cannot pledge its monetary claims to a credit institution and thus cannot attract financing.
With the entry into force of the Act, two additional paragraphs will be added to Section 3:83 of the Dutch Civil Code. The proposed new Section 3:83 (3) of the Dutch Civil Code stipulates that provisions aimed at excluding the transferability or pledgeability of a monetary claim, or at preventing the assignment or pledging of a monetary claim, will be null and void.
The proposed new Section 3:83 (4) of the Dutch Civil Code subsequently stipulates which claims are not covered by the prohibition and whereby a prohibition of assigning or pledging is therefore still permitted. This concerns monetary claims:
- by virtue of a current or savings account;
- by virtue of a credit or loan agreement in which several parties are involved on the lender's side (so-called syndicated loans),
- from or to a clearing house or a central counterparty, a settlement agent, or a central bank;
- under an agreement as referred to in Sections 34(3) and 35(5), or 35a(4) of the Collection of State Taxes Act 1990 shall be paid into a bank account held for the payment of wage tax, value added tax and social insurance contributions (a so-called G-account).
Both new and existing clauses stipulating that it is forbidden to alienate or pledge a monetary claim shall be subject to the Act. Although there is a short transitional period, existing terms will be null and void with effect from 3 months after the Act comes into force.
It is not yet clear when the Act will enter into force, but it is expected that this will be at the beginning of 2021 at the earliest.