are not extended to sale and lease-back arrangements, although this type of leasing contract is extremely similar to the pure security transfer of ownership. The attempts in case law to draw a distinction between these two types of transactions, mentioned by some reporters under part

(c) of case 14, remain unconvincing. A number of country reports also mention factoring as a method to overcome the restrictions on security rights over claims.30

II. Persisting differences

1. General attitude towards security rights in movables

Despite the common tendencies just mentioned, there still exist a number of areas where substantial differences of principle persist. Taken together, these differences amount to a general dividing line between one group of jurisdictions, e.g. Austria, France, Belgium, Portugal, Italy, Spain, the Netherlands, Scotland and the three Nordic countries, which opt for a rather narrow interpretation of common principles such as publicity, specificity, the mandatory character of property law rules and the prohibition of the pactum commissorium and which, as a consequence, adopt a comparatively hostile attitude towards non-possessory security rights, and other jurisdictions (e.g. Germany, Greece, England and Ireland) where such principles are either wholly neglected or interpreted in a more generous way so as to allow for non-possessory security rights that have been developed praeter legem by practice. This difference in tendency will be considered in greater detail in the following paragraphs.

2. Significance of the principle of publicity

The principle that proprietary rights must in some way be made public to the outside world because of their enforceability erga omnes generally exists in all jurisdictions which have been covered in this volume. For proprietary rights in movables, the traditional means to comply with the principle of publicity is the transfer of possession. Yet, as has just been pointed out (supra pp. 652 ff.), the significance of possession in performing the publicity function has gradually declined. Even more

30See Greek report, case 12(a) (4) and (5); Italian report, case 12(a) and (b); Irish report, case 12(a).

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importantly, for the greater part of suitable collateral, a transfer of possession in order to publicise a security right does not represent a practical possibility. However, leaving aside for a moment simple retention of title, the various jurisdictions reacted differently to this common phenomenon. The greater number of jurisdictions either have introduced special non-possessory security rights which are publicised through registration and -- as a consequence -- deny the validity of non-publicised non-possessory security rights (e.g. France, Belgium) or deny such validity without providing for practical substitutes (e.g. Austria, Spain, Italy). A small minority of EU Member States, namely Germany and Greece, have effectively ceased to adhere to the principle of publicity as far as the various extensions of retention of title and the security transfer of ownership are concerned. A special case in this context is Dutch law: it has abandoned the security transfer of ownership, among other reasons because of its hidden character, but replaced it with the stil pandrecht, which is no less hidden since it only requires a notarised deed or an entry into a registry which is not open to inspection by interested members of the public.31

In the national reports, the different attitudes towards the principle of publicity can most prominently be observed in the context of retention of title in raw material, coupled with a products clause,32 retention of title with an all-monies clause33 and in the cases dealing with the question of creating a non-possessory security interest in equipment (case 10) and stock-in-trade (case 11).

3. Significance of party autonomy in matters of property law

Another principle of property law which most jurisdictions are usually said to adhere to is the mandatory character of property law rules. Again, however, this common principle is enforced to differing degrees. A good example is provided by case 7. There, the question arises of whether the parties can contract around rules on specificatio in order to give the seller under retention of title a security right in the newly manufactured products. German and Greek law effectively allow a derogation by the parties from the rules on specificatio, the Italian, Scots and South African reporters have expressed some reservations as to such a

33 See comparative observations, case 9(a) (ii).

possibility, whereas in all other jurisdictions it seems clear that a purported extension of retention of title into products manufactured by the buyer would amount to a hidden charge and thus be unenforceable vis-à-vis third parties.

4. Significance of the prohibition of ‘pactum commissorium’

The prohibition of the ‘pactum commissorium’ is another principle which is known to all jurisdictions but adhered to differently. The principle is used as an argument against the possibility of the security transfer of ownership, e.g. in France, Portugal and Italy,34 whereas in German law, where it can likewise be found among the rules on pledges (see § 1229 BGB), it has never been regarded as a reason for not admitting the validity of security ownership.35

5. Notification requirements in relation to assignments or charges of claims

Despite the tendencies of convergence with respect to the assignment of claims described on pp. 649 ff., it is still true that a major dividing line exists between those jurisdictions which, in order for the assignment to be valid as against third parties, require the debitor cessus to be notified or to obtain a formal acceptance by him (France, with respect to assignments outside the Loi Dailly, Italy, Scotland and the three Nordic countries) and those jurisdictions which dispense with such formal requirements or replace them with less cumbersome ones (Germany, Austria, Greece, France, as far as assignments under the Loi Dailly are concerned, Belgium, Portugal, the Netherlands, England, Ireland, and South Africa).36 This difference still stands in the way of making effective use of claims as collateral in international cases, i.e. cases where either the assignment or the claim has an international character.

34As to Italian law, see, from a comparative perspective, most recently Greving, Der Treuhandgedanke bei Sicherungsübertragungen im italienischen und deutschen Recht 64 ff.

35See case 10, German, French, Portuguese and Italian reports as well as comparative observations, parts (a) to (c).

36See comparative observations, case 12.