One of the challenges in project financings in Thailand has been the absence of any legal security interest in inventories and work-in-progress, on bank accounts or moveable property that is not subject to mortgage. Thai law provides only traditional forms of security: mortgages of land and buildings, pledges, mortgages of registered machinery, vessels, aircraft and several other types of property, and sales with right of redemption.
On July 9 2009, upon the request of the Ministry of Finance, the Cabinet approved in principle the draft Business Security Act, a bill to provide security for creditors in a range of assets including moveable property. The bill has been passed to the Council of State for review, and may be substantially amended to avoid conflicts with existing laws governing mortgages and pledges, and to be more administrable in practice.
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