The law applicable to third-party effects of assignments of claims: the U.N. Convention and the E.U. Commission Proposal compared

Introduction

In January 2019, the U.S. Senate consented to the ratification of the United Nations Convention on the Assignment of Receivables in International Trade (the "Convention")² by the US,³ thus creating a new impetus for the broad adoption and entry into force of the Convention.⁴ The Convention provides a set of uniform rules for the assignment of receivables in the context of international receivables finance transactions, such as asset-based lending, factoring, invoice discounting, forfaiting, securitization and project finance. The Convention contains substantive law rules on a number of issues, such as statutory prohibitions to the assignment of future receivables and of receivables that are not specifically identified (bulk assignments), contractual limitations to the assignment of trade receivables, and debtor-related issues. It also contains conflict-of-laws rules in particular on the law applicable to the third-party effectiveness and priority of an assignment of receivables.⁵