Legal Context
The Democratic Republic of Congo (hereinafter "DRC") has been a member of the legal framework of the Organisation for the Harmonisation of Business Law in Africa (OHADA) since 12 September 2012.

The integration of the DRC into OHADA has had significant repercussions on its legal system. Upon the treaty's entry into force, all Uniform Acts promulgated by OHADA were automatically incorporated into the Congolese legal corpus. These texts, which cover various aspects of business law, are directly applicable throughout the DRC territory, without requiring any additional adoption or transposition procedure into domestic law.

Among the OHADA Uniform Acts is the one pertaining to the organisation of securities ("AUS"), adopted on 15 December 2010. This act constitutes the legal basis for securities in the OHADA space and provides a unified legal framework for taking security in 17 other African countries. This article presents the essential aspects that practitioners and investors should be aware of.

Common Types of Securities

The Uniform Act regulates several types of securities that guarantee the payment of a debt. These securities are divided into three main categories: personal securities, movable securities, and immovable securities.

Personal securities include suretyship, where a third party commits to fulfilling the debtor's obligation in case of default, and autonomous guarantee, which is an independent commitment from the principal obligation, payable on first demand.

In the category of movable securities, one finds the pledge of tangible movable property, which relates to tangible movable assets such as inventory or vehicles, and the pledge of intangible movable property, which may concern receivables, bank accounts, shareholder rights and securities, intellectual property rights, or even business assets.

There are also ownership-based securities, such as retention of title, which suspends the transfer effect of a contract until full payment, assignment of receivables as security, and fiduciary transfer of money.

Among specific movable securities, there is the right of retention, which allows a creditor to retain a debtor's property until full payment, and privileges, which are preferential rights granted by law to certain creditors.

Finally, immovable securities include mortgages, which encumber real property, and immovable privileges, similar to movable privileges but relating to immovable property.

Perfection of Securities

The perfection of securities is an essential process to ensure their legal effectiveness and enforceability against third parties. It varies according to the nature of the asset concerned but generally involves a registration procedure in a public register. For movable securities, registration with the Trade and Personal Property Credit Register (RCCM) is often required, thus ensuring the publicity of the security; in the specific case of pledges of receivables, formal notification to the debtor or their participation in the contract is necessary to make the security effective.

Finally, for immovable securities such as mortgages, registration with the Land and Property Registry is essential, thus formalising the charge on the immovable property and informing potential third parties of the existence of this security, which helps establish the creditor's priority in case of default or insolvency proceedings.

Enforcement of Securities

The main methods of enforcing securities offer creditors different options to recover their claims in case of debtor default. These mechanisms, designed to balance creditors' rights and debtor protection, are divided into three principal modalities:

Firstly, the forfeiture agreement allows the creditor to become the owner of the encumbered property if the debtor fails to fulfil their obligations. This provision offers a quick recovery route, but it comes with an important restriction: it is formally prohibited for the debtor's primary residence, which constitutes an essential protection to prevent individuals from becoming homeless in case of financial difficulties.

Secondly, judicial attribution offers the creditor the possibility to request from the court the attribution of the property in payment of the debt. This procedure involves the intervention of a judge, who assesses the situation and may decide to attribute the property to the creditor as settlement, thus ensuring judicial control over the enforcement process.

Finally, forced sale represents the classic procedure and is often used as a last resort. It involves the seizure of the property through judicial means, followed by a public auction. This process, although longer and more complex, guarantees a certain transparency and potentially allows obtaining the best price for the seized property, in the interest of both the creditor and the debtor.

These three enforcement methods form a comprehensive legal arsenal, allowing the response to be adapted to the specific situation of each default case, while maintaining a balance between recovery efficiency and the protection of debtors' fundamental rights.

Insolvency and Creditor Hierarchy

OHADA law has established a comprehensive legal framework to address situations of insolvency and corporate restructuring. This system aims to balance the protection of creditors' interests and the possibility of recovery for viable companies.

Firstly, OHADA law favours preventive approaches. The conciliation procedure offers a confidential and flexible framework allowing a company facing financial difficulties to negotiate with its main creditors under the aegis of a conciliator appointed by the court. This approach aims to find amicable solutions before the situation deteriorates further.

Preventive settlement, on the other hand, is a more formal procedure intended for companies which, without being in a state of cessation of payments, are experiencing a difficult but not irremediably compromised economic and financial situation. This procedure allows the company to benefit from a suspension of individual proceedings and to develop a recovery plan under the supervision of an expert.

In the event of proven insolvency, OHADA law establishes a clear hierarchy of creditors. Secured creditors, i.e., those benefiting from securities on the company's assets, enjoy a privileged rank in the order of repayment. However, this privilege is tempered by the existence of so-called "super-privileged" claims. The latter, generally related to employee wages or certain tax claims, take precedence even over secured claims, thus reflecting social and public interest considerations.

An important aspect of OHADA insolvency law concerns the suspect period. This period, set at six months before the official opening of insolvency proceedings, is subject to particular attention. Legal acts and transactions concluded during this period are examined with great vigilance. Some of these acts may be declared null and void if they are deemed prejudicial to creditors' interests or if they were concluded under abnormal conditions. This provision aims to prevent fraudulent manoeuvres or favours granted to certain creditors to the detriment of others just before the opening of proceedings.

Points of Attention

Local Specificities

Although OHADA harmonises securities law, certain national particularities remain, especially in terms of registration. Indeed, the legislation of each State may provide for a particular regime of securities concerning certain assets. This is the case in the DRC, where mining assets and aircraft have a specific regime in terms of securities regarding their constitution, registration, and enforcement.

Future Assets

Securities may cover future assets, provided they are sufficiently identified. This identification must be precise enough to allow unambiguous recognition of the concerned assets once they exist. For example, it may involve future harvests of an agricultural operation, receivables to arise from a contract under negotiation, or machines that will be acquired as part of an investment plan.

Security Agent

The role of security agent is recognised in the Democratic Republic of Congo, facilitating syndicated financing. Only national or foreign financial institutions or credit establishments can have the quality of security agent. The security agent acts in its own name but for the benefit of the creditors who have designated it for this purpose. The designation act, which must be established in writing, must include, under penalty of nullity, certain mentions such as the determination of the guaranteed obligations, the identity of the creditors and the agent, or the duration of the mission.

Conclusion

In conclusion, although the OHADA framework provides a solid basis for taking security in the DRC, the success of operations largely depends on a cautious and well-informed approach. The combination of rigorous due diligence and the expertise of local advisors constitutes the best strategy to successfully navigate this complex and dynamic legal environment, thus maximising the chances of effectively securing investments and transactions in the Democratic Republic of Congo.