In brief
The commencement of the Personal Property Security regime means important changes to the way companies transact business in Papua New Guinea. Partner Karla Fraser and Senior Associate Sarah Kuman report.
PPSA legislation comes into force
The Papua New Guinea Personal Property Security Act 2011 (the PPSA), commenced on Wednesday 4 May 2016.
We have been advised that the PPS Regulations commenced on 5 May 2016, but we are yet to see the official gazette notice in which the notice of commencement is published.
Commencement of the PPSA and the Regulations, follows the official launch of the Papua New Guinea Personal Property Securities Register (the PPSR) in January this year.
With the commencement of the PPSA, the Instruments Act (Chapter 254) and the Hire Purchase Act (Chapter 252) have now been repealed. All instruments and transactions formerly registered and registrable under both Acts, should now be registered under the PPSA on the PPSR.
Similarly, charges formerly registered and registrable under Part XIII of the Companies Act, should now be registered on the PPSR (although technically the amendments to the Companies Act to repeal part XIII are yet to become operative).
Amendments to the Stamp Duties Act (Chapter 117) that provide for the exemption of transactions registrable under the PPSA, are also yet to commence.
Effect of commencement
Now that the PPSA has commenced operation, parties will have until 31 October this year to register all pre-existing security interests created any time up until (and including) 3 May 2016, or risk losing priority.
Security interests arising on and from 4 May 2016 should be registered immediately on the PPSR to best protect the priority position in relation to that interest.
The PPSR
The PPSR is now live and parties may access it at https://www.ppsrpng.com/
The PPSR is an on-line registry on which secured parties will be able to register their security interests arising under the PPSA. The PPSR will be administered by the Investment Promotion Authority.
To begin registering security interests, parties must first register for a PPSR user account and set up a pre-paid account from which PPS registration fees will be paid.
Next steps
It is important that businesses have scoped their potential exposure to the PPSA, and have policies and processes in place to start registering interests on the PPSR.
If you would like to discuss the new law or its impact on your business or operations, please contact one of the people below.
We will send out a further Client Update once we receive evidence of commencement of the PPS Regulations, as well as the amendments to the Companies Act and Stamp Duties Act.