Arrangement of Sections



   1.   Short title

   2.   Interpretation

   3.   Application and non-application of Act

   4.   Conflict of laws

   5.   Bankruptcy and insolvency proceedings

   6.   Supremacy of Act


   7.   Establishment of Collateral Registry Office and administration of Act

   8.   Functions of Registrar

   9.   Delegation of functions

   10.   Officers of Collateral Registry Office

   11.   Establishment of Collateral Registry and storage of information

   12.   Financing statements and registration

   13.   Information required to register financing statement

   14.   Non-registration of financing statement

   15.   Effect of registration

   16.   Confirmation statement

   17.   Invalidity of registration of financing statement

   18.   Validity of registered financing statement

   19.   Duration of registration and renewal

   20.   Transfer of financing statement

   21.   Amendment or discharge of financing statement

   22.   Discharge of registration relating to consumer goods

   23.   Demand by debtor to amend or discharge registration

   24.   Amendment or discharge by court order

   25.   System malfunction

   26.   Access to Collateral Registry, inspection and copies

   27.   Evidentiary provisions

   28.   Certificate of status of registered financing statement

   29.   Appeal against decision of Registrar

   30.   Oaths and affirmations

   31.   Registrar to appear in legal proceedings

   32.   Regulations on registration processes and procedures


   33.   Creation of security interest and effectiveness

   34.   Security agreements

   35.   Description of collateral in security agreement

   36.   Effectiveness of security interest generally

   37.   Creation of security interest in after-acquired movable property

   38.   Continuation of security interest to proceeds or, commingled property

   39.   Rights of debtor in collateral

   40.   Debtor may transfer collateral

   41.   Effectiveness of security interests in after-acquired movable property

   42.   Ineffectiveness of assignment clauses

   43.   Security interest created in negotiable document


   44.   Perfection of security interests

   45.   Continuity of perfection

   46.   Continuation of perfection of security interest in proceeds

   47.   Temporary perfection of security interest in proceeds

   48.   Continuation of perfection in transferred collateral

   49.   Perfection with respect to negotiable document, negotiable instrument and investment security certificate

   50.   Perfection where goods with bailee

   51.   Security interest in farm products


   52.   Priority of security interests in same collateral

   53.   Same priority for original collateral and proceeds

   54.   Transfer of security interest not to affect priority

   55.   Voluntary subordination of priority

   56.   Priority in secured obligations and advances

   57.   Priority of purchase money security interest in collateral or proceeds

   58.   Priority between purchase money security interests

   59.   Priority of purchase money security interest in fixtures

   60.   Priority of security interest in goods prior to accession

   61.   Priority of security interest in processed or commingled goods

   62.   Priority of security interest in bank account

   63.   Priority of security interest transferred by debtor

   64.   Priority of creditor who receives payment

   65.   Priority of purchaser of negotiable instrument, investment security or negotiable document

   66.   Priority of interest of assignee of account receivable

   67.   Rights of buyer or lessee of goods

   68.   Priority of lien over security interest relating to same goods

   69.   Priority of judgment creditor and lien holder over unperfected security interest


   70.   Application of Part

   71.   Registration of enforcement notice

   72.   Secured creditor taking possession and disposing collateral

   73.   Secured creditor rendering collateral unusable

   74.   Secured creditor applying collateral in satisfaction of secured obligation

   75.   Disposal of collateral by secured creditor

   76.   Duty of secured creditor disposing collateral

   77.   Power of disposal in negotiable document and related goods

   78.   Method of disposal of collateral

   79.   Notice of disposal of collateral

   80.   Extinguishment of subordinate security interest after disposal

   81.   Secured creditor to give statement of account to debtor

   82.   Distribution of proceeds after disposal

   83.   Proposal and notice of retention

   84.   Objection to notice of retention

   85.   Redemption of collateral by entitled persons

   86.   Debtor reinstating security agreement


   87.   Rights, duties and obligations to be exercised in good faith and commercial reasonableness

   88.   Amendment of financing statement to indicate content of commercial document

   89.   Entitlement to damages for breach of obligation

   90.   Exemption from liability for actions or omissions

   91.   Secured creditor to provide information to debtor

   92.   Service of documents or notices

   93.   Fraudulent financing statement

   94.   Submission of frivolous, malicious, etc financing statement

   95.   Falsification of entries in register

   96.   Altering of documents

   97.   Deceiving or influencing Registrar or officer

   98.   Administrative penalty

   99.   General penalties

   100.   Regulations

   101.   Collateral Registry Office to be reporting entity

   102.   Savings and transitional provisions



to provide for the creation of security interests in movable property so as to contribute to economic development; harmonise secured transaction laws; provide for harmonisation of conflict of laws in order to promote the financing of international trade and make security interests effective against third parties; enhance the availability of low-cost secured credit to allow debtors to use the full value inherent in their assets to support credit; establish a Collateral Office and Collateral Registry for a single comprehensive registration regime for secured transactions in movable property; establish streamlined procedures for obtaining security interests and reducing transaction costs by minimising formalities; ensure effectiveness of security agreements and enforceability of security agreements and interests; provide for perfection of security interests; to establish the determination of priority between security interests; and provide for matters connected with, or incidental to, the foregoing.

[6th April, 2016]

Act 3 of 2016.


1.   Short title

This Act may be cited as the Movable Property (Security Interests) Act.

2.   Interpretation

   (1) In this Act, unless the context otherwise requires—

“accession” means goods that are physically attached to other goods without losing the identity of each group of goods which maintain their original identity;

“account debtor” means a person liable for payment of an account receivable and includes a guarantor or other person with secondary liability for payment of the account receivable;

“account receivable” means a right to payment of a monetary obligation, excluding a right to payment evidenced by a negotiable instrument and to payment of money credited to a bank account;

“after-acquired property” means movable property that a debtor acquires after the conclusion of a security agreement;

“Agency” means the Patents and Companies Registration Agency established under the Patents and Companies Registration Agency Act, 2010;

“assignee” means a person to whom an assignment of an account receivable is made;

“bank” has the meaning assigned to it in the Banking and Financial Services Act;

“bank account” means an account, maintained by a bank or financial institution, to which monies for a customer are credited, and includes monies received by the bank but not yet credited into the customer’s account;

“Board” means the Board of the Agency constituted in accordance with the Patents and Companies Registration Agency Act;

“collateral” means movable property, whether tangible or intangible, that is subject to a security interest;

“Collateral Registry” means the Registry established in accordance with section 11;

“Collateral Registry Office” means the Collateral Registry Office established in accordance with section 7;

“commercial consignment” means a consignment where a consignor has reserved an interest in goods that the consignor has delivered to the consignee for the purpose of sale, lease or other disposition and both the consignor and consignee deal in the ordinary course of business in goods of that description, excluding an agreement under which goods are delivered to an auctioneer for sale;

“commingled properties” means goods mixed with goods of the same kind to become part of a product or mass so as to have lost their original identity in the product or mass;

“company” has the meaning assigned to it in the Companies Act;

“competing claimant” means a secured creditor of a debtor that is competing with another secured creditor in the same collateral;

“confirmation statement” means a confirmation by the Registrar that the requirements, as provided for under this Act or regulations issued under this Act, for the registration of a financing statement or an amendment to a registered financing statement have been complied with;

“consumer goods” means goods that a debtor predominantly uses or intends to use for personal, family or household purposes;

“control agreement” means an agreement between a bank or financial institution with a debtor who is a customer of the bank or financial institution and a secured creditor, in which the bank or financial institution has agreed to follow instructions from the secured creditor without the further consent of the debtor;

“debtor” means a person who creates a security interest to secure that person’s obligation or that of another person and includes a—

   (a)   lessee under a financial lease;

   (b)   buyer that acquires goods whose title is to be retained by the seller;

   (c)   grantor of any charge, chattel mortgage, pledge or lien in movable property;

   (d)   consignee who receives goods from another person under a commercial consignment; and

   (e)   seller of accounts receivable and a lessee under an operating lease where the receivables or the object that is subject of the lease does not secure an obligation;

“default” means the occurrence of an event that, under a security agreement, gives a secured creditor the right to enforce a security interest;

“equipment” means a tangible asset used by a person in the operation of its business, and includes plant and machinery;

“farm product” includes—

   (a)   crops grown, growing or to be grown, harvested and their produce and fruit;

   (b)   timber, both standing and growing;

   (c)   fish stocks, livestock, bees and poultry and the produce and progeny thereof;

   (d)   seeds, fertilisers and manure; and

   (e)   other supplies and equipment used or produced in a farming operation;

“financial contract” means any spot, forward, future, option or swap transaction involving interest rates, commodities, currencies, equities, bonds, indices, financial instruments, repurchase or securities lending transactions and any other transaction similar to a transaction referred to, entered into or used in financial markets or commodity markets, and includes any combination of the transactions referred to;

“financial institution” has the meaning assigned to it in the Banking and Financial Services Act;

“financial lease” means a lease of a tangible asset, other than a negotiable instrument or negotiable document, that is the object of a lease agreement, and includes a hire-purchase agreement, where—

   (a)   the lessee automatically becomes the owner of the tangible asset;

   (b)   the lessee may acquire ownership of the tangible asset by paying no more than a nominal price; or

   (c)   the tangible asset has no more than a nominal residual value;

“financing statement” means a document, in the prescribed form, containing the information specified in section 13, that effects a registration to perfect a security interest in collateral;

“fixture” means a tangible asset that is physically attached to immovable property without losing its separate identity, excluding improvements;

“hire-purchase agreement” has the meaning assigned to it in the Hire-Purchase Act;

“immovable property” means land or other property that cannot be moved and includes an object so firmly attached to the land that it is regarded as part of the land;

“improvements” includes a building or any other structure of whatever kind on land;

“intangible asset” includes movable property, a financial contract, incorporeal rights, excluding goods, documents of title, securities, monies and negotiable instruments;

“inventory” means tangible assets that are—

   (a)   held for sale or lease in the ordinary course of business; and

   (b)   raw materials or work-in-process;

“investment security” means a security defined in the Securities Act and includes an instrument issued in bearer or registered form as a type commonly recognised as a medium for investment and a share or other interest in the property or enterprise of the issuer;

“land” has the meaning assigned to it in the Lands Act;

“land lease” has the meaning assigned to the word “lease” in the Lands Act;

“money” means the currency authorised as legal tender by the Bank of Zambia, in accordance with the Bank of Zambia Act;

“movable property” includes goods, intangibles, securities, money, negotiable instruments and negotiable documents;

“negotiable document” means a document, such as a warehouse receipt or a bill of lading, that embodies a right to delivery of tangible assets and satisfies the requirement for negotiability under the law governing the document;

“negotiable instrument” means an instrument, such as a cheque, bill of exchange or promissory note, that embodies a right to payment and satisfies the requirements for negotiability under a law governing negotiable instruments;

“officer” means an employee or agent of the Agency;

“operating lease” means an agreement, that exceeds one year, relating to a transaction in which the leased asset has a useful life at the end of the lease term, the lessee does not have an option to purchase the leased asset at the end of the term of the lease for a nominal price and title to the leased asset is not transferred to the lessee automatically at the end of the lease term;

“perfected security interest” means a security interest that has become effective against third parties by control, possession, registration or temporarily, as provided in this Act;

“possession” means the possession of collateral by a secured creditor that is not in actual or apparent possession or control of a debtor or a debtor’s agent;

“priority” means the right of a secured creditor to derive the economic benefit of a security interest in preference to the right of a competing claimant;

“proceeds” means identifiable or traceable movable property received in respect of a collateral, and includes what is received as a result of a sale, other disposition, collection, lease or license of the collateral, including proceeds, natural fruits, revenues, dividends, distributions, insurance proceeds and claims arising from defects in, damage to, or loss of, the collateral or other disposition of the collateral;

“purchase money security interest” means—

   (a)   a security interest in collateral taken or retained by a seller or financial lessor to secure all or part of the purchase price of the collateral;

   (b)   a security interest taken by a person who provides credit to enable a debtor to acquire the collateral if such credit is in fact so used;

   (c)   an interest of the lessor under an operating lease with a term that exceeds one year; or

   (d)   an interest of a consignor who delivers goods to a consignee under a commercial consignment, excluding a transaction of sale and lease back to the seller;

“registered financing statement” means a financing statement that has been registered in the Collateral Registry in accordance with section 12;

“Registrar” means the person appointed Registrar in accordance with the Patents and Companies Registration Agency Act, 2010;

“search” means an electronic examination of the records contained in the Collateral Registry;

“secured creditor” means a person in whose favour a security interest is created, and includes a—

   (a)   financial lessor;

   (b)   seller who reserved title to the goods sold;

   (c)   chargee under any type of charge, chattel mortgagee or holder of any type of consensual lien; and

   (d)   buyer of accounts receivable, commercial consignor and an operating lessor under an operating lease where the ac

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