Business in Cameroon | Since February 16, 2024, Cameroon and 16 other member states of the Organization for the Harmonization of Business Law in Africa (OHADA) have authorized seizures of livestock, business assets, electronic money holdings, movable property belonging to third parties, and negotiable debt securities. This decision follows the revision of OHADA’s uniform act on simplified debt recovery procedures and enforcement measures. Legal professionals note that this revision comes 25 years after the adoption of the original text, which limited debt recovery to eight types of seizures: movable assets, debts, standing crops, claims, preemptive rights, securities, and share rights.
“If a debtor fails to repay a loan and owns a herd of cattle, these can now be seized and sold by the creditor to recover the debt,” explained Eyike Vieux, magistrate, writer, and law teacher, during a training session on the practical aspects of the uniform act held from June 10 to 12, 2024, in Douala by the Professional Training Center for Mediation, Negotiation, and OHADA Law in Cameroon (SCP Cefomen).
Similarly, the revised text introduces procedures for seizing businesses. “The seizure renders the business assets unavailable. It cannot be sold or encumbered, but operations can continue under a trustee who collects revenues. If a private sale doesn’t occur within 15 days, the assets may then be auctioned,” specifies the document.
The revision also includes provisions for conservatory seizures of assets stored in movable property belonging to third parties, including cash in safes owned by third parties such as those held in credit institutions and similar entities. Upon seizure, “access to the safe is only possible in the presence of the bailiff who conducted the seizure, with the option to affix seals,” according to the text.
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Furthermore, OHADA’s revised act extends seizures to negotiable debt securities. “Within 8 days, failure to comply results in nullification; the conservatory seizure must be notified to the debtor by an act that includes, under penalty of invalidity, mention of the court’s authorization or the title under which the seizure is executed,” the text prescribes. Notably, negotiable debt securities (NDS) are financial instruments issued at the discretion of the issuer, tradable on a regulated market or over-the-counter, each representing a right to a claim.
Lastly, the act broadens the scope of debt seizures to include claims representing electronic money holdings. This extension notably covers funds lodged in mobile payment accounts, constituting claims by account holders against payment institutions or electronic money institutions holding these accounts.
Legal experts assert that expanding the types of assets subject to seizure aims to enhance debt recovery capabilities. Eyike Vieux argues that these new provisions come at a time when Cameroon struggles with debt recovery. According to the 2022 report from the Technical Rehabilitation Commission (CTR), a finance ministry body, the Cameroon Debt Recovery Company (SRC) worked on nine court decisions totaling CFA 46.297 billion that year, aiming to recover CFA 10.325 billion. However, the state’s enforcement arm for debt recovery only retrieved CFA 5.395 billion, a 17% drop from the CFA 6.5 billion recovered in 2021.