• The Personal Property Securities Act (2009)(PPSA) is a new federal law in Australia that governs taking, registering and enforcing security over all personal property other than land or buildings. It covers all moveable tangible assets including vehicles, plant machinery, crops and most other forms of personal property. It also covers certain intangible assets such as shares, intellectual property and contractual rights.
• The PPSA adopts a nationalistic and parochial approach to the registration of interests in personal property, and creates a single registry in Australia for personal property securities interests, with few exceptions.
• The PPSA also captures interests that are not subject to formal registration currently, such as leases and retention of title clauses under a line of credit arrangement.
Statutory Review of Personal Property Securities Act 2009
• In April 2014, the Attorney General of Australia announced its intention to review the PPSA.
• The review will consider the operation and effect of the PPSA on third parties and will focus on the impact on small businesses.
• The PPSA represented a substantial change and reform to the existing law in Australia concerning the registration of interests in personal property. The PPSA created a single national regime and registration mechanism for registering security and ownership interests in personal property and uniquely applies to creditors and owners alike. Secured lending utilizing personal property as collateral represents an important segment of the Australian credit market.
• The PPSA established a uniform and single national regime for the creation, registration, priority and enforcement of security interests in personal property to which it applies.
• The PPSA was intended to reduce the costs of borrowing and increase the range of property available to secure financing in Australia, especially for small businesses.
Issues/Concerns with PPSA
• The PPSA unfairly and without due process, compensation or remedy at law deprives legitimate owners of title to their personal property by the simple failure by the owner to record its ownership interest with the Australian National Registry. This deprivation of title is at odds with the law in the US, Great Britain and most of the western world.
• The Australian government has failed to educate US businesses who enter the Australian market to conduct business– making it difficult for businesses small or large to appreciate the risks created by the PPSA.
• The PPSA has resulted in an increase in cost of borrowing for businesses.
• The PPSA increases regulatory and administrative burdens for businesses.
• The PPSA has resulted in a lack of awareness and understanding of the PPSA and its applicability.
• Australia is one of the largest trading partners with the United States with goods and private services trades totaling $65 billion in 2012 alone.
• Sales of services in Australia by majority U.S.- owned affiliates is estimated at well over $51.2 billion.