MODEL LAW ON FACTORING
The Model Law was developed by the Model Law on Factoring Working Group, chaired by Professor Henry Gabriel (Unidroit Governing Council Member) and composed of 10 international legal experts in international secured transactions law, receivables finance, and factoring. The Working Group also included 24 institutional observers from 12 international, regional, industry and non-governmental organisations, and 8 individual observers.
Members of the UNIDROIT Model Law on Factoring Working Group
In addition, several international, regional and private organisations with expertise in factoring were invited to observe the Working Group:
The Working Group negotiated the UNIDROIT Model Law on Factoring over six sessions and several dozen intersessional and subgroup meetings between February 2020 and March 2023. The instrument also underwent an intensive public consultation process between June and October 2022, which allowed hundreds of stakeholders around the world to review the instrument and submit comments.
The UNIDROIT Model Law on Factoring (MLF) was adopted by the UNIDROIT Governing Council at its 102nd session (Rome, 10-12 May 2023).
First Working Group Meeting (1 – 3 July 2020)
The first session of the Working Group took place via videoconference between 1-3 July 2020. The first session was attended by 32 participants.
The documents from the first session can be found below:
Second Working Group Meeting (14 – 16 December 2020)
The second Session of the Working Group took place between 14-16 December 2020. The second session was attended by 30 participants.
The documents from the second session can be found below:
Third Working Group Meeting (26 – 28 May 2021)
The third Session of the Working Group took take place between 26-28 May 2021. The third session was attended by 32 participants.
The documents from the third session can be found below:
Fourth Working Group Meeting (1 – 3 December 2021)
The fourth Session of the Working Group took take place between 1-3 December 2021. The fourth session was attended by 30 participants.
The documents from the fourth session can be found below:
Fifth Working Group Meeting (16 – 18 May 2022)
The fifth Session of the Working Group took take place between 16-18 May 2022.
The documents from the fifth session can be found below:
At its 101st session (Rome, June 2022), the Governing Council approved the draft MLF for the purposes of launching a public consultation on the draft instrument and mandated the Secretariat to facilitate such consultation. UNIDROIT conducted a three-month consultation on the draft MLF between July and October 2022.
The purposes of the consultation were to:
The public consultation had three aspects:
Twenty-eight submissions were received during the consultation process, comprising 195 individual comments on the draft MLF. Submissions were received from stakeholders in twenty different countries, including twelve from Europe, six from Asia-Pacific, five from South America, four from North America and one from Africa.
UNIDROIT received fifteen submissions by private sector stakeholders, eight submissions from academic institutions and five submissions from Governments. The significant majority of the comments on the draft MLF received from stakeholders held a positive view of the draft MLF. Most stakeholders considered that the draft MLF provided a clear and effective legal framework that would better facilitate factoring transactions in their countries.
The full list of submissions is available here. The Secretariat also prepared an article-by-article summary for the Working Group. The Working Group considered the submissions received by stakeholders at its sixth session in November 2022 and made several revisions to the draft MLF.
Model Law on Factoring Online Consultation Paper: https://www.unidroit.org/wp-content/uploads/2022/08/Study-LVIII-A-draft-Model-Law-on-Factoring-consultation-document-29-July-1.pdf
Sixth Working Group Meeting (28 – 30 November 2022)
The sixth Session of the Working Group took place between 28-30 November 2022.
The documents from the sixth session can be found below:
Governing Council documents
The UNIDROIT Governing Council supervised the development of the UNIDROIT Model Law on Factoring. The relevant documents regarding the Model Law on Factoring considered by the Governing Council can be found here: