Secured transactions law reform in Russia: A tortuous but ultimately successful journey

Russian laws that provide for security rights over property have undergone significant reform in recent years. The changes were made with a view of making the legal provisions on security rights more coherent, comprehensive, legally efficient and market-oriented for the benefit of both lenders and debtors willing to obtain secured financing. The intention of this chapter is to share the experience and the directions of the reform, its hurdles and successes. The chapter describes the chronology, process and the scope of the reform in broad terms, with a view that the legal challenges that were faced and the approaches that were taken in Russia may be potentially useful elsewhere. The chapter shows that the pivotal factor in the secured transactions law reform in Russia has definitively been the reform of the Civil Code and the introduction of the Pledge Register Law. Although a good deal of uncertainty has surrounded these changes until the very end, the fact that they are clearly supporting market practices and reflected the market needs is testimony to the lawmakers’ intention to modernize the Russian legal system – perhaps in the context of turning Moscow into an international financial centre. The changes will definitely positively affect various types of secured financings.