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Supply chain finance in the EU: Part 2 – fixing enforceability: conflicts of law, true sale and an interoperable e‑notice regime
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Cross-border supply chain finance (SCF) in the EU is critically vulnerable to legal uncertainty primarily due to divergent member state rules governing receivable assignments debtor defences set-off and “true sale” characterisation. This fragmentation hinders enforceability reduces advance rates (the amount of the loan advanced) and complicates recoveries thereby exposing a significant structural gap within the Single Market. This article outlines a practical legal blueprint for a targeted EU SCF Regulation designed to address these challenges comprehensively. The proposed framework includes a clear conflicts-of-law rule for third-party effects and priority calibrated debtor-defence and set-off treatment and objective safe-harbour criteria for true sale. Furthermore it details an interoperable electronic notice (e-notice) regime crucial for establishing opposability (when the debtor becomes officially aware of the new arrangement) fixing priority and preventing double-pledging across the EU. This harmonised approach promises to transform the current fragmented landscape...
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