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Resources sector facing legislative shake-up PDF Print E-mail

img23Businesses need to check their processes, systems and contracts now.

 

The resources sector is set to face one of its biggest legislative shake-ups since the introduction of the GST.  The upcoming legislation will affect all companies in the sector, and impact on everything from joint venture arrangements to household gas meters.  

The Personal Property Securities Act 2009 (Cth) establishes a single national law governing security interests, and similar transactions, with respect to all tangible and intangible assets (including intellectual property) except land and some statutory licences.

'Under the upcoming legislation, the consequences can be severe if you own an asset, and are regarded as having a security interest, but don't register it,' said Allens Arthur Robinson (Allens) Partner David Maloney.

'If your counterparty goes into liquidation, then you could lose the asset, even though you own it.'

Mr Maloney said the legislation would affect all companies in the sector, and impact on everything from joint venture arrangements to household gas meters.

Allens Banking & Finance Partner Diccon Loxton said that while the legislation would not begin operation for another 10 months, businesses need to check their processes, systems and contracts now, given the scale of the changes.

'If you are a supplier of products or services, you may need to register your interests and redraft your supply terms,' said Mr Loxton.

'If you are a customer or recipient of goods or services, a very large number of interests can be registered against your company. You will need to therefore consider the terms of your negative pledge clause.

'Where your business takes "security interests", you will need to put in place records and systems to deal with enquiries and other requirements of the legislation. Your staff will need training and guidance on the new registration procedures and your businesses should compile inventories of existing security interests in order to register them.'

The first step for companies working in the resources sector should be to check financial arrangements and other potentially affected contracts.

'Where necessary, businesses will need to prepare new policies as to requirements for transactions and documentations, redrafting the standard terms of supply, identifying transactions that will need to be registered and identifying the assets affected,' said Mr Loxton.

www.aar.com.au