On Monday 30 October 2023, UNIDROIT celebrated the launch of the Model Law on Factoring in Marrakesh, Morocco. The new international instrument was launched at the FCI 55th Annual Meeting, the largest international event for the global receivables finance industry. The launch event featured a presentation by UNIDROIT Secretary-General Ignacio Tirado and Senior Legal Officer William Brydie-Watson, as part of a special session on “Factoring Legal and Regulatory Frameworks”. The Model Law on Factoring was discussed throughout the week-long FCI event and generated significant interest among participants.
The UNIDROIT Model Law on Factoring (MLF) was adopted by the UNIDROIT Governing Council at its 102nd session in May 2023. The MLF provides a complete, self-standing legal regime that facilitates factoring transactions. The instrument comprises of a set of black-letter law rules that is primarily aimed at States that have not yet fully implemented a modern, comprehensive secured transactions legal framework. For States that have undertaken prior secured transactions reforms, the MLF provides rules that could further strengthen their legal framework and encourage factoring, the assignment of receivables, and trade finance.
The UNIDROIT Model Law on Factoring is available in two official languages: English and French. Several unofficial translations of the instrument are also being developed.
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 institutional observers from international, regional, industry and non-governmental organisations, and individual observers. 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.
As the leading voice of the factoring industry and under the leadership of Secretary-General Peter Mulroy, FCI was a key stakeholder in the development of the Model Law on Factoring, participating as an observer in the expert Working Group that developed the instrument, and facilitating several international events during the public consultation. UNIDROIT looks forward to future collaboration with FCI in the promotion and implementation of the UNIDROIT Model Law on Factoring.
Now that the UNIDROIT Model Law on Factoring has been adopted and launched, UNIDROIT has begun work on a Guide to Enactment to assist States in their implementation of the new instrument. The first Working Group for the Guide to Enactment will be held in April 2024.
Further information on the UNIDROIT Model Law on Factoring is available here: https://www.unidroit.org/instruments/factoring-model-law/. Further information on the launch event and the FCI Annual Meeting is available here: https://fci.nl/en/event/55th-annual-meeting-marrakech?language_content_entity=en.