The enforcement procedure for pledges and mortgages, covering
movable and immovable property, has recently been amended to
clarify and streamline the enforcement procedure, including for
out-of-court enforcement, which was initially introduced by Federal
Law No. 306 - FZ on December 30, 2008.
On March 7, 2012, Federal Law No.405 - FZ "On Introduction
of Amendments to Certain Legislative Acts of the Russian Federation
in Part on Improvement of an Order of Enforcement of Pledged
Property" came into force (Law on Amendments). The Law on
Amendments introduced a number of changes and clarifications to the
previous legislation as described below:
Although the wording of the Law on Amendments is not crystal
clear, the most likely interpretation of the new law is that
out-of-court enforcement is now possible only upon first securing a
notary's executive endorsement, which, in turn, may only be
granted if the security agreement is certified by a notary. This
would need to be confirmed by practice. The only exception to this
law is when the collateral is held by the pledgee, in which case
the notary's executive endorsement will not be required for
Pledge and mortgage agreements may now set out a detailed
procedure on the levy of execution, which courts must apply;
It is no longer necessary to obtain the notarized consent of a
mortgagor for out-of-court enforcement; and
The term for registering a mortgage agreement has been reduced
to 15 days. If the mortgage agreement is notarized, the term for
registration is 5 days.
The following are some of the key clarifications provided by the
Law on Amendments:
Out-of-court enforcement of a participation interest pledge of
a limited liability company has been expressly confirmed; and
The right to include several options on the procedure of sale
of pledged property in a pledge agreement has been expressly
In accordance with the Law on Amendments, the notary's
executive endorsement is required to apply an out-of-court
enforcement procedure to mortgage agreements concluded before the
Law on Amendments came into force. However, no such requirement is
provided by the Law on Amendments in relation to pledges of movable
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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