『동산·채권 등의 담보에 관한 법률』의 주요쟁점

The Main Issues in the Act on Security of Movable Property, Receivables, etc. - A Discussion on the Legislative Process

The Act on Security of Movable Property, Receivables, etc.(“the Act”) is a groundbreaking change in the law of security rights, as the Act allows security rights on movable properties or receivables that are pledged as collateral to be registered. Following the 1997/1998 East Asian financial crisis, the Korean legal community began discussing the way to use movables and receivables as collateral, and a growing number of people called for an introduction of a legal system that enables the use of properties other than immovable for security purposes. Many legal scholars including myself voiced the need to reform the security rights system on movables and receivables. The Ministry of Justice formed the Special Subcommittee to Legislate Security System of Movables and Receivables on March 5, 2008. It took more than a year for the Subcommittee to draft and submit the bill “the Act on Security of Movable Property, Receivables, etc.,” to the Ministry of Justice on March 18, 2009. The Act was enacted on June 11, 2010 and came into effect on June 12, 2012. The Act introduces new types of security rights for movables and receivables. The Act also acknowledges pre-existing security rights on movables and receivables such as pledge and transfer of ownership for security purposes. Accordingly, the introduction of the Act does not deny the security rights acknowledged in the old system. If the new law did not acknowledge the old security rights and totally replaced the old law, as the UCC Article 9 did in the United States, the old security rights system would have been abruptly terminated. One of the key elements in reforming the law on movables and receivables lies in introducing a new publication method. According to the Civil Code, publication means for a movable property pledge is delivery (Article 330), and the publication means for pledge of rights and assignment of receivables is notification to the debtor or the consent of the debtor (Articles 346 and 450). Under the Act, security rights on movables or receivables shall be registered as “security rights.” There were some provisions in the bill that the Subcommittee regarded sufficiently rational but were possibly inconsistent with the Civil Code. These provisions are shelved for now, and they may be included in the Act after the Civil Code is amended.