With a view to receiving the advice and consent of the Senate to ratification, subject to certain declarations and understandings set forth in the enclosed report, I transmit herewith the United Nations Convention on the Assignment of Receivables in International Trade, done at New York on December 12, 2001, and signed by the United States on December 30, 2003. The report of the Secretary of State, which includes an overview of the proposed Convention, is enclosed for the information of the Senate.
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The Convention sets forth modern uniform rules governing the assignment of receivables for use in international financing transactions. In particular, the Convention facilitates the use of cross-border receivables financing by: (a) recognizing the legal effectiveness of a wide variety of modern receivables financing practices; (b) overriding certain contractual obstacles to receivables financing; and (c) providing clear, uniform conflict-of-laws rules to determine which country's domestic law governs priority as between the assignee of a receivable and competing claimants.
As a global leader in receivables financing, the United States actively participated in the negotiation of this Convention at the United Nations Commission on International Trade Law with the support of U.S. business interests. Drawing on laws and best practices prevalent in the United States and other countries where receivables financing flourishes, the Convention would promote the availability of capital and credit at more affordable rates and thus facilitate the development of international commerce. Widespread ratification of the Convention would help U.S. companies, especially small- and medium-sized enterprises, obtain much-needed working capital financing from U.S. banks and other lenders to export goods, and thereby help create more jobs in the United States.
The rules set forth in the Convention do not differ in any significant respect from those contained in existing U.S. law. In particular, in virtually all cases application of the Convention will produce the same results as those under the Uniform Commercial Code Article 9, which all States and the District of Columbia, Puerto Rico, and the Virgin Islands have enacted.
I recommend, therefore, that the Senate give early and favorable consideration to the Convention and give its advice and consent to ratification, subject to certain declarations and undertakings set forth in the enclosed report.
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