On Wednesday 10 May 2023, the Governing Council adopted the UNIDROIT Model Law on Factoring at its 102nd session in Rome, Italy. Initially proposed by the World Bank Group in 2018, the Model Law on Factoring was negotiated over a three-year period by a Working Group chaired by Governing Council Member Professor Henry Gabriel and composed of international legal experts representing different legal systems.
The Model Law on Factoring is a complete, self-standing legal framework designed to provide a set of black-letter law rules for States that have not yet implemented a modern, comprehensive secured transactions registry. The Model Law on Factoring will be a key instrument for States looking to facilitate trade finance, access to credit and economic development in an increasingly difficult international economic environment. The Model Law on Factoring has already been recognised as one of three key pillars of the “Financial Inclusion in Trade Roadmap” by the World Trade Board. The MLF will be launched at the FCI’s 55th Annual Meeting in Morocco in September 2023, once it has undergone a final proofing process.
The UNIDROIT Model Law on Factoring as adopted by the Governing Council is available here: https://www.unidroit.org/wp-content/uploads/2023/04/C.D.-102-5-Model-Law-on-Factoring.pdf. Further information on the Model Law on Factoring is available on the UNIDROIT website: https://www.unidroit.org/work-in-progress/factoring-model-law/.