Belgium: Assignment of public procurement receivables simplified – new opportunities for factoring and securitization industries?
02 October 2017
In the past, receivables arising from public procurement were not assignable as a matter of principle, except under limited circumstances and strict conditions. Moreover, the purchasers of such receivables were second-ranked by law behind a series of creditors of the seller (such as the worker and the subcontractors), with no exceptions.
This restrictive regime, which has existed for more than 25 years, has not been maintained by Belgian lawmakers in implementing under Belgian law the new public procurement set of rules (EU Directives 2014/24 and 2014/25 dated 26 February 2014). The new law dated 17 June 2016 on public procurement and its implementing royal decrees (which entered into force on 30 June 2017) no longer contain provisions on the assignment of public procurement receivables. This observation was stressed by the Council of State on rendering its opinion on the draft new law and decrees, but this did not seem to concern the lawmakers.
In the absence of any specific restriction on the assignment of public procurement receivables, we must conclude that the lex generalis of the Belgian civil code now applies. This “assignment friendly” regime enables the sale of receivables by mere agreement between the seller and the purchaser. Such sale will become enforceable vis-à-vis the third party debtor (i.e. the public authority) by means of a mere notification (which is not compulsory, meaning that the sale can be kept silent) and vis-à-vis the other third parties by the mere conclusion of the sale agreement.
This game-changing repositioning should be noted by the factoring and securitization industry.
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