Expansion of Applicable Sphere: A way to Unif

pplier and the debtor) having their place of business in different countries. In other words, where the receivables arise from a contract of sale of goods between a supplier and a debtor whose places of business are in the same State, the UNIDROIT Convention could not apply, no matter the following assignment of receivables is to assignee in the same or different State. Thus leaving the international assignment of domestic receivables untouched. The problem, at its simplest, is twofold: first, inconsistency. For instance, in the case where a bulk assignment is made and where part of the receivables are domestic (supplier and debtor are in the same State) and part are international (supplier and debtor are in different State), if the supplier assigns the receivables to a party which is located in another State, the bulk assignment between the same supplier and the same assignee will be governed by two sets of laws and regulations: the portion of international receivables may be governed by the UNIDROIT Convention while the domestic one will be left to the jurisdiction of certain domestic law.

Secondly, leaving the international assignment of domestic receivables to the jurisdiction of various law systems of different States can make “commercial practice uncertain, time-consuming and expensive”. The assignee of receivables from a foreign State may not know which State’s law governs the transaction, and, if the law of the assignor’s State applies, the assignee’s rights would be subject to the vagaries of that foreign law. This no doubt would greatly impede the development of such transaction.

Cross-boarder receivables assignments call for a uniform law. From this point, the UNIDROIT convention does not satisfy this requirement once and for all, for which it has been highly criticized.

Based on former experience, UNCITRAL Convention’s sphere of application is enlarged. In the first article, it states this convention applies to assignments of international receivables and to international assignments

of receivables. And defines in article 3 that a receivable is international if, at the time of conclusion of the original contract, the assignor and the debtor are located in different States and an assignment is international if, at the time of conclusion of the contract of assignment, the assignor and the assignee are located in different States. Thus the internationality requirement of UNCITRAL Convention actually contains two internationality criteria, and the result is that this convention could be applied to all assignments of receivables with international elements, including: 1) international assignment of international receivables, where the assignor, assignee, and debtor are in three different countries; 2) domestic assignments of international receivables, where the assignor and assignee are in the same country, and the debtor is in another country; and 3) international assignment of domestic receivables where the assignor and debtor are in one country and the assignee in another country. In other words, the scope of UNCITRAL Convention covers all the assignment of receivables except pure domestic assignment of domestic receivables (i.e. where the assignor, the assignee and the debtor are in the same country) and it may be applied on a wide range of receivables financing in international trade.

b) Link to Contracting Party Requirement

Although internationalit

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