In brief
Papua New Guinea's personal property securities reform has passed into law but will not come into force until a security interest register is established. Senior Associate Sarah Kuman reports.
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Timing
It is now expected that the PNG Personal Properties Security Act (the PPSA) may not be implemented until mid-2015.
The PPSA was passed into law on 9 December 2011 and there were plans for the Act to commence in mid-2014 after an implementation phase that included procurement and establishment of a personal property securities (PPS) register, preparation of PPS Regulations and a public information process.
The PNG Government had expected the implementation phase to take six to nine months. However, since June this year, implementation of the PPSA has been on hold while the PNG Government resolves a number of issues related to the establishment of the PPS register. Our latest update from the PNG Treasury Department, which is overseeing the implementation phase, is that implementation will now not be achieved in 2014 and will be pushed into next year.
The PPSA will reform the law in PNG relating to security over almost all property, except land and interests in mining and oil and gas tenements.
When the PPSA commences operation, parties will have six months to register security interests, or risk losing priority.
Companies with operations in Australia will be aware that this period is significantly shorter than the equivalent period for the transition under Australia's PPS law, which had a two-year transition period for registration of existing interests. Further, the PNG Government does not propose to provide for automatic 'migration' of security interests already registered under existing laws, such as registered company charges.
Next steps
We will provide further updates when we have more information on the likely commencement date. If you would like to discuss the new law or its impact on your business or operations, please contact one of the people below.