Dutch Senate approves act to prohibit non-assignment clauses

Key provisions of the act

The Act nullifies (nietig verklaren) any clause that prohibits the transfer or encumbrance of a monetary claim arising from, in short, the ordinary course of business, unless the claim falls under one of the specified exceptions. It covers prohibitions with both contractual and proprietary effects (contractuele- en goederechtelijke werking). The primary goal is to address the issue of limited access to credit for companies, which often struggle to use their receivables as collateral for loans or factoring. According to the Dutch government, the Act will enhance the liquidity and solvency of these companies.

Scope and exceptions

The Act applies to any monetary claims originating from the exercise of a profession or business (in beroep of bedrijf), such as invoices, rents, or fees. However, it excludes the following types of claims:

1. Claims arising in respect of bank accounts.
2. Claims from credit agreements involving multiple lenders, such as club-deal or syndicated financing structures.
3. Claims on or of certain regulated institutions, such as clearing institutions. (clearinginstellingen), central counterparties (centrale tegenpartijen), settlement agents (afwikkel instanties), clearing houses (verrekekeningsinstituut), or central banks.
4. Claims related to the payment of certain taxes (into a G-account).

Implementation timeline

Any prohibitions on assignments in contracts concluded after the Act comes into force will be null. For contracts concluded before the Act's effective date, prohibitions on assignment will remain valid for three months thereafter.

Key takeaways

1. Dutch companies, including SMEs, will have more assets available to secure financing.
2. The Dutch market will see an increase in asset-based financing opportunities.
3. Negative pledges and similar restrictions on dealings will generally remain outside the scope of the Act, except when the debtor also has a business or professional claim against a lender.

This legislative change represents a significant step towards improving access to credit for Dutch companies, fostering a more dynamic and flexible financial environment.