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Slovenia

Security interest law in Slovenia

Table of contents
  1. Guarantees
  2. Security
  3. Perfection
  4. Enforcement
Slovenia

Guarantees

1. Can an intercompany guarantee be granted?

1.1 Upstream? 

Yes, subject to limitations.

1.2 Downstream?

Yes

1.3 Lateral?

Yes, subject to limitations.

2. Can a guarantee be given under foreign law (e.g. English law)?

Yes, but such choice of law might be considered not valid if there is no foreign link at all.

3. Any special arrangements (e.g. to deal with transfer pricing/corporate benefit)?

Yes, in particular statutory capital maintenance rules, financial assistance rules, transfer pricing rules and the rule of tax deductibility are applicable.

Security

4. Can a security interest be granted in the following type of asset?

4.1 Real property

Yes

4.2 Shares (privately held)

Yes

4.3 Shares (marketable securities)

Yes

4.4 Receivables

Yes

4.5 Bank account

Yes

4.6 IP/Trademark

Yes

4.7 Equipment/Plant/Machinery

Yes

4.8 Inventory

Yes

4.9 Insurance

Yes

4.10 Rights under a contract

Yes, but only transferable property rights.

5. Can security interests be granted to a foreign lender?

Yes

6. Can multiple security interests be granted over the same asset?

Depending on the type of security, e.g. on the same asset several pledges/mortgages may be created with different rank, while in case of fiduciary property or assignment in security no additional security interest can be granted by the debtor over such asset.

7. Can a security interest be granted to secure liabilities of a holding company, a subsidiary or any other affiliate?

Upstream and lateral under limited circumstances; downstream yes.

Perfection

8. In order to be enforceable against third parties, must a security interest be?

8.1 Notarised?

Depending on the type of security; e.g. mortgage, non-possessory pledge of movables, pledge of business share in limited liability company, fiduciary transfer of movables, fiduciary assignment of receivables require involvement of a notary; in some cases notarisation of signatures would suffice, in other agreement in a form of a notarial record or directly enforceable notarial record is required. Certain types of security do not require notarisation, e.g. pledge over receivables or other rights under contracts, pledge over shares/other securities, possessory pledge of movables.

8.2 Registered?

Depending on the type of security.

8.3 Other?

Depending on the type of security, e.g. pledge of receivables or other rights under contracts require notification to the debtor of such pledged right; if the real estate is not registered in the land register, publication in the Official Gazette of the Republic of Slovenia shall be necessary; in case of possessory pledge of movable (pignus) or a pledge on the bearer materialised securities require handing over of the asset to the pledgee.

9. Does registration in most cases protect the secured creditor against the debtor’s subsequent dealings with the secured asset?

Yes

10. Is there any stamp or similar tax or duty payable on the security document?

For certain security notary costs, tax and registration costs.

Enforcement

11. For a security interest to be legally enforceable which items must be filed as part of the registration or notarisation process?

11.1 Entire security agreement? 

Yes

11.2 Names of pledgor and pledgee?

Yes

11.3 Description of secured asset in general terms?

The description has to be individual and definite, except for security interest over stocks.

11.4 Description of each individual secured asset?

Yes, except for security interests over stocks, but the place and value of secured stock has to be indicated.

11.5 Documents concerning ownership of secured asset?

No

11.6 Documents concerning debt in respect of which the asset is being secured?

Yes in the notarisation process.

12. Can a right to enforce security arise: 

12.1 When the secured debt is unpaid and due? 

Yes

12.2 When there is some other breach of the pledge/security agreement?

Yes

12.3 When the debtor becomes insolvent?

No, unless this is specified by the pledge/security agreement as a default. After insolvency proceedings are initiated, only certain securities may still be enforced by the creditor.

13. Can the creditor enforce its security interest by taking possession of the asset and selling it without court assistance?

Yes, if agreed between parties in writing.

14. Is an instrument for direct enforcement necessary/available/market practice?

Depending on the type of security interest.

15. Are powers of attorney to the secured party used to facilitate a sale of secured assets in an enforcement situation?

Yes, in certain cases.

16. If a sale is permitted without court assistance does it have to be made by public auction?

The assets may be sold by public auction, at the stock exchange or at market price. The mortgage created in a form of a directly enforceable notarial deed may also be sold by notarial sale. Security created under the Financial Collateral Act (implementing the EU directive on financial collateral arrangements) may be sold also by other appropriate manner.

17. Can a transfer of all or part of the debt be made without affecting the security over the assets? 

Depending on the type of security; accessory securities (e.g. pledges) will automatically be transferred together with the secured debt.

18. Is there anything else of which a lender should be aware as unusual or particularly difficult?

Certain security interest require a form of a directly enforceable notarial record; in such cases the underlying finance documents defining details of the secured claim have to be attached in Slovenian translation, which can lead to substantial translation costs. 
The court enforcement proceedings can be time consuming and costly.