Enforcement Procedure For Pledged Property Modified

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