Secured transactions refer to transactions secured by collateral, which guarantees the fulfilment of an obligation to repay loans. Currently, Thailand recognises only a limited class of security that can be put up as collateral, effectively limiting the potential for greater credit availability in the economy. This article examines the types of security available under other jurisdictions as well as registration and common enforcement mechanisms with an eye towards potential use in Thailand.
United States: A large variety of assets or properties can be used as collateral, all of which are governed by Section 9 of the Uniform Commercial Code (UCC). These include immovable assets such as real estate, movable assets such as agricultural and consumer products and intangible assets such as goodwill and future advances. The creation of security must be evidenced by contract. Upon default, UCC-9 stipulates several methods of enforcement, the most common being repossession of the security and strict foreclosure.
Japan: Secured transactions can only be created over specific movable assets. Articles 85 and 86.2 of the Civil Code define movable assets as property that is not real estate. Such properties include construction machinery, aircraft and ships as well as inventory and intellectual property.
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