The Saeima has adopted and the President promulgated the following laws: on the UNIDROIT Convention on international factoring article 1. 28 May 1988 the UNIDROIT Convention on international factoring (hereinafter referred to as the Convention) with this law is accepted and approved. 2. article. Assignment in accordance with the Convention's article 6 paragraph 1 will not be effective against the debtor, in the case of purchase-sales contract at the time of the conclusion of the company is located in the Republic of Latvia. 3. article. The law shall enter into force on the date of its promulgation. With the law put the Convention in English and its translation into Latvian language. 4. article. The Convention shall enter into force on its article 14 within the time and in order, and shall notify the Ministry of Foreign Affairs Gazette "journal". The law adopted by the Parliament in June 1997. The President of the Parliament instead of the President a. perfected in Riga on 8 July 1997, the UNIDROIT CONVENTION ON INTERNATIONAL FACTORING (Ottawa, 28 May 1988) the States parties TO this CONVENTION, conscious of the fact that international factoring has a significant role to play in the development of international trade, RECOGNISING therefore the importanc of adopting uniform rules to provide a legal framework that will facilitat international factoring , while maintaining a fair balance of interests between the different parties involved in factoring transactions, have AGREED as follows: CHAPTER I-sphere OF APPLICATION AND GENERAL PROVISION article 1 1 this Convention will govern. factoring contracts and assignments of receivable axis described in this Chapter. 2. For the purpose of this Convention, "factoring contract" means a contract concluded between one party (the suppliers) and another party (the factor) pursuan to which: (a) the supplier may or will assign it the factor of receivable arising from contracts of sale of goods between the suppliers and made it to the customer (debtor) other than those for the sale of goods to be primarily for their personal boughs , family or household use; (b) the factor is to perform at least two of the following functions:-finance for the suppliers, including loans and advance payments; -maintenance of accounts (ledgering) relating to the receivable; -collection of receivable; -protection against default in payment by the debtor; (c) notice of the assignment of the receivable is to be given to the debtor. 3. In this Convention the reference to "good" and "sale of goods" shall include services and the supply of services. 4. For the purpose of this Convention: (a) a notice in writing need not be signed but must identify the person by whom or in whose name it is given; (b) "notice in writing" includes, but is not limited to, telegram, telex and any other telecommunication capable of being reproduced in tangibl form; (c) a notice in writing is given when it is received by the addresse. Article 2 1. This Convention applies whenever the receivable assigned the contract to a factoring pursuan «arise from a contract of sale of goods between a supplier and a debtor whose places of business are in different States and: (a) those States and the State in which the factor has its place of business with the Contracting States; or (b) both the contract of sale of goods and the factoring contract is governed by the law of a Contracting State of the. 2. (A) A reference in this Convention to a party's place of business shall, if it has more than one place of business, mean the place of business which has the closes relationship to the relevant contract and its performance, having regard to the known or contemplated by it of circumstanc the parties at any time before or at the conclusion of that contract. Article 3 1. The application of this Convention may be excluded: (a) by the parties to the factoring contract; or (b) by the parties to the contract of sale of goods, as regards the receivable arising at or after the time when the factor has been given notice in writing of such exclusions. 2. Where the application of this Convention is excluded in accordanc with the previous paragraph, such exclusions may be made only as regards the Convention as a whole. Article 4 1. In the interpretation of this Convention, regard is to be had to its object and purpose s et forth in the preamble, to its international character and to the need to promote uniformity in its application and the observanc of good faith in international trade. 2. Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law. CHAPTER II-rights AND duties OF the parties article 5 As between the parties to the factoring contract: (a) a provision in the factoring contract for the assignment of existing or future receivable-shall not be rendered invalid by the fact that the contract does not specify them individually, if at the time of conclusion of the contract or when they come into the Office they can be identified the existenc the contract; (b) a provision in the factoring contract by which future receivable is assigned to operate a transfer the receivable to the factor of when they come into the existenc without the need for any new Act of transfer. Article 6 1. The assignment of a receivable by the supplier to the factor shall be effective not with standing any agreement between the supplier and the debtor prohibiting such assignment. 2. However, such assignment shall not be effective against the debtor when, at the time of conclusion of the contract of sale of goods, it has its place of business in a Contracting State which has made a declaration under article 18 of this Convention. 3. Nothing in paragraph 1 shall be affec any obligation of good faith owed table by the supplier to the debtor or any liability of the supplier to the debtor in respect of an assignment made in breach of the terms of the contract of sale of goods. Article 7 A factoring contract may validly provide axis between the parties for the transfer of theret, with or without a new Act of transfer of all or any of the supplier's rights deriving from the contract of sale of goods, including the benefit of any provision in the contract of sale of the goods to the supplier reserving title to the goods or creating any security interest. Article 8 1. The debtor is under a duty to pay the factor if, and only if, the debtor does not have knowledge of any other person's superior right to payment and notice in writing of the assignment: (a) is given to the debtor by the supplier or by the factor with the supplier's authority; (b) identify reasonably to the receivable's which have been assigned and the factor to whom or for whose account the debtor is required to make payment; and (c) relate to (a) the receivable arising under contract of sale of goods made at or before the time the notice is given. 2. the Irrespectiv of any other ground on which payment by the debtor to the discharge of the debtor factor from liability, payment shall be effective for this purpose if made in accordanc with the previous paragraph. Article 9 1. In a claim by the factor against the debtor for payment of a receivable arising under a contract of sale of goods the debtor may set up against the factors arising under that of all defence contract of which the debtor could have availed itself if such claim had been made by the supplier. 2. The debtor may also be against asser the factor any right of set-off in respect of claims existing against the supplier in whose favour the receivable aros and available to the debtor at the time a notice in writing of assignment conforming to article 8 (1) was given to the debtor. Article 10 1. Without prejudice to the debtor's rights under article 9, non-performance or defective or late performance of the contract of sale of goods shall not by itself entitl the debtor to recover a sum paid by the debtor to the factor if the debtor has a right to recover that sum from the supplier. 2. The debtor who has such a right to recover from the supplier a sum paid to the factor in respect of a receivable shall not be entitled to recover vertheles that sum from the factor to the exten to that: (a) the factor has not discharged an obligation to make payment to the supplier in respect of that receivable; or (b) the factors made such payment at a time when it knew of the supplier's non-performance or defective or late performance as regards the goods to which the debtor's payment relate. CHAPTER III-subsequent assignments article 11 1. Where a receivable is assigned by a supplier to a factor to a factoring pursuan contract governed by this Convention: (a) the rules set out in articles 5 to 10 shall, subject to the sub-paragraph (b) of this paragraph, apply to any subsequent assignment of the receivable by the factor or by a subsequent assigne; (b) the provision of articles 8 to 10 shall apply as if the subsequent assigne were the factor. 2. For the purpose of this Convention, the notice to the debtor of the subsequent assignment also notice of the constitut of assignment to the factor. Article 12 this Convention shall not apply to a subsequent assignment which is prohibited by the terms of the factoring contract. CHAPTER IV-FINAL PROVISION article 13 1. This Convention is open for signature at the concluding meeting of the Diplomatic Conference for the Adoption of the draft UNIDROIT Convention on International Factoring and International Financial Leasing and will remain open for signature by all States until 31 December 1990 at Ottawa. 2. This Convention is subject to ratification, acceptance or approval by States which have signed this Convention. 3. it is open for accession by all States which are not signatory States as from the date it is open for signature. 4. Ratification, acceptance, approval or accession is effected by the deposit of a formal instrument to that effect with the depositary. Article 14 1. This Convention enter into force on the first day of the month following the expiration of six months after the date of deposit of the third instrument of ratification, acceptance, approval or accession. 2. For each State that to accept, approve ratif, or accede to this Convention after the deposit of the third instrument of ratification, acceptance, approval or accession, this Convention enter into force in respect of that State on the first day of the month following the expiration of six months after the date of the deposit of its instrument of ratification, acceptance , approval or accession. Article 15 this Convention prevails over any treaty does not which has already been or may be entered into. Article 16 1. If a Contracting State has two or more territorial units in which different systems of law applicable in the relations to the matter deals with in this convention, it may, at the time of signature, ratification, acceptance, approval or accession, declare that this Convention is to extend to all its territorial units or only to one or more of them , and may substitute its declaration by another declaration at any time. 2. These declarations are to be notified to the depositary and are to state expressly the territorial units to which the Convention extend. 3. If, by virtue of a declaration under this article, this Convention extend to one or more but not all of the territorial units of a Contracting State, and if the place of business of a party is located in that State, this place of business, for the purpose of this Convention, is considered not to be in a Contracting State , unless it is in a territorial unit to which the Convention extend. 4. If a Contracting State makes a declaration under paragraph 1, of the Convention is to extend to all territorial units of that State. Article 17 1. Two or more Contracting States which have the same or closely related legal rules on matters governed by this Convention may at any time declare that the Convention is not to apply where the supplier, the factor and the debtor have their places of business in those States. Such declarations may be made jointly or by reciprocal unilateral declarations. 2. A Contracting State which has the same or closely related legal rules on matters governed by this Convention as one or more non-Contracting States may at any time declare that the Convention is not to apply where the supplier, the factor and the debtor have their places of business in those States. 3. If a State which is the object of a declaration under the previous paragraph subsequently become a Contracting State, the declaration made will, as from the date on which the Convention enter into force in respect of the new Contracting State, have the effect of a declaration made under paragraph 1, provided that the new Contracting State joins in such declaration or makes a reciprocal unilateral declaration. Article 18 (A) A Contracting State may at any time make a declaration in accordanc with article 6 (2) that an assignment under article 6 (1) shall not be effective against the debtor when, at the time of conclusion of the contract of sale of goods, it has its place of business in that State. Article 19 1. Declarations made under this Convention at the time of signature are subject to confirmation upon ratification, acceptance or approval. 2. Declaration and confirmation of the declarations to be in writing and to be formally notified to the depositary. 3. A declaration takes effect simultaneously with the entry into force of this Convention in respect of the State concerned. However, a declaration of which the depositary receive formal notification of such entry into force after takes effect on the first day of the month following the expiration of six months after the date of its receipt by the depositary. Reciprocal unilateral declarations under article 17, take effect on the first day of the month following the expiration of six months after the receipt of the latest declaration by the depositary. 4. Any State which makes a declaration under this Convention may withdraw it at any time by a formal notification in writing addressed to the depositary. Such attention is to take effect on the first day of the month following the expiration of six months after the date of the receipt of the notification by the depositary. 5. (A) withdrawals of a declaration made under article 17 of the inoperativ in relations to render the withdrawing State, as from the date on which the withdrawals takes effect, any reciprocal unilateral declaration or joint made by another State under that article. Article 20 of the reservation is permitted except with the those expressly authorised in this Convention. Article 21 this Convention applies when the assigned receivable pursuan to a factoring contract «arise from a contract of sale of goods concluded on or after the date on which the Convention enter into force in respect of the Contracting States referred to in article 2 (1) (a), or the Contracting State or States in it referred paragraph 1 (b) of that article , provided that: (a) the factoring contract is concluded on or after that date; or (b) the parties to the factoring contract have agreed that the Convention shall apply. Article 22 1. This Convention may be denounced by any Contracting State at any time after the date on which it will enter into force for that State. 2. the Denunciation is effected by the deposit of an instrument to that effect with the depositary. 3. A denunciation takes effect on the first day of the month following the expiration of six months after the deposit of the instrument of denunciation with the depositary. Where a longer period for the denunciation to take effect is specified in the instrument of denunciation it takes effect upon the expiration of such longer period after its deposit with the depositary. Article 23 1 this Convention shall be deposited. with the Government of Canada. 2. The Government of Canada shall: (a) inform all States which have signed or acceded to this Convention and the President of the International Institute for the Unification of private Law (UNIDROIT) of: (i) each new signature or deposit of an instrument of ratification, acceptance, approval or accession, together with the date thereof; (ii) each declaration made under articles 16, 17 and 18; (iii) the withdrawals of any declarations made under article 19 (4); (iv) the date of entry into force of this Convention; (v) the deposit of an instrument of denunciation of this Convention together with the date of its deposit and the date on which it takes effect; (b) transmit certified true cop to of this Convention to all signatory States, to all States acceding to the Convention and to the President of the International Institute for the Unification of private Law (UNIDROIT) IN WITNESS WHEREOF the undersigned, being duly authorised by plenipotentiar to their respectiv in Governments, have signed this Convention. Done at Ottawa, this twenty-/8 day of May, one thousand nine hundred and eighty-eight, in a single original, of which the English and French texts are equally authentic.

UNIDROIT Convention on international FACTORING (Ottawa, 28 May 1988) Member States to this Convention, conscious of the fact that the international factoring plays an important role in the development of international trade, recognising the importance, therefore, to adopt certain common rules, to provide a legal framework that will facilitate international factoring, at the same time ensuring a balance between the different interests of the parties to the factoring transaction. Have agreed as follows: chapter I scope of application and general provisions article 1 1. this Convention governs the factoring contract and assignment agreements as described in this chapter. 2. This Convention '' factoring agreement "means a contract concluded between the one side (supplier) and the other party (the mediator) and under which (a) the supplier or the intermediary will ced ced claims arising from the purchase-sales contract concluded between a supplier and its customers (debtors), except those who bought goods mainly for their own personal, family or household purposes, (b) the mediator must take at least two of the following features :-financing of the supplier, including loans and advance payments-invoicing service for claims-recovery,-protection against debtor default of payment, (c) notification of the assignment is to transfer the debtors. 3. for the purposes of this Convention, the reference to "goods" and "sales of goods" includes services and service delivery. 4. within the meaning of this Convention: (a) written notice need not be signed, but to identify the person who provided it or on whose behalf it is provided; (b) the "written communication" includes telegram, telex and any other types of telecommunications that are rendered tangible way, but this list is not final; (c) the written notice is given when it is received by the recipient. 2. Article 1 of this Convention are applicable. when claims that ceded under the factoring agreement, stemming from the purchase of goods – the contract of sale between the supplier and the debtor whose companies are located in different countries and these countries: (a), and of the country in which the intermediary company, is the Contracting States; or (b) purchase-sales of goods contract and factoring is regulated by the legislation of a Contracting State. 2. This reference to the parties in the Convention business location, in case it has more than one business location, will mean the location of the company that has the most direct connection with this contract and its performance, having regard to the circumstances known to the parties or the expected conditions at any time before the conclusion of the contract or at the time of its conclusion. 3. Article 1 of This Convention. can be cancelled: (a) factoring; or (b) the purchase of goods – the parties to the contract of sale, for claims that arise when the mediator provided a written notice of cancellation or of the application of the Convention then. 2. If the application of this Convention has been cancelled in accordance with the preceding paragraph, the waiver may be made only with respect to the Convention as a whole. 4. Article 1 of the Convention. in interpreting, must take into account its object and purpose, which are laid down in the preamble, to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade. 2. Questions concerning this Convention adjustable questions, but not directly resolved, it must be resolved in accordance with the General principles on which the Convention is based or, in the absence of such principles, in accordance with the case law, which is applied in accordance with international private law. Chapter II rights and obligations of the parties article 5 Parties factoring factoring in: (a) the Treaty provisions on existing or anticipated assignability of claims will not be made null and void, if the contract does not specify them individually, if at the time of conclusion of the contract or when they occur, they can be identified in the contract. (b) the provision of factoring, which anticipated claims are ceded to, works for the transfer of the claims mediator when they occur, without having to do any new Act of transfer. 6. Article 1 of the supplier's Assignment to the intermediary will be valid notwithstanding any agreement between the supplier and the debtor, prohibiting the assignment. 2. However, the assignment will not be valid in respect of a debtor, the purchase-sales at the time of conclusion of the contract the company is located in a Contracting State that has issued a notification in accordance with article 18 of this Convention. 3. Nothing in paragraph 1 shall not affect any obligation of the supplier's good will against the debtor or any supplier's liability in respect of the debtor before the assignment made in breach of a purchase-sales contract terms. 7. the article factoring can reasonably predict all or any of the supplier's rights arising from the purchase contract of sale, the transfer-to another with or without a new Act of transfer, including any condition of the purchase-sales contract which reserves the ownership of the goods to the supplier or produce any rights to property as collateral. 8. Article 1. The debtor is obliged to pay an intermediary, then, and only then, if the debtor is not aware that any other person has more rights to payment, and written notice of the assignment: (a) the debtor is provided from the supplier or from an intermediary with the supplier's authorisation, (b) acceptable to identify claims which have been ceded to and intermediary who or where the debtor must make bill payments and (c) apply to claims arising from the purchase agreement, sales-concluded during the performance of the notice or before. 2. Notwithstanding any other grounds on which the debtor payment intermediary released debtors from liability, payment will be valid if it is carried out in accordance with the preceding paragraph. 9. Article 1 of the claim against the debtor. the intermediary for the payment of claims arising from the purchase contract of sale, the debtor-to can use all types of defence resulting from this agreement, and which the debtor could use, if such a request would be made by the supplier. 2. the debtor may still defend against any counterclaims by the intermediary of the rights against the supplier, subject to the existing requirements that interest claims incurred and available to the debtor at the time when the written notice of the assignment in accordance with article 8, paragraph 1, was given to the debtor. 10. Article 1 without prejudice to the rights of the debtor, which is expressed in article 9, item purchase-sales contract failure or incomplete, or late execution itself does not give the debtor the right to recover the sum of money paid by the debtor, if the debtor to the intermediary is entitled to recover that amount from the supplier. 2. where the debtor has the right to recover from the supplier the amount of money paid to the intermediary in respect of the claims, however, entitled to recover that amount from the intermediary, if: (a) the mediator is not released from the obligation to make payment to the supplier in respect of this claim; or (b) the mediator made such payments at a time when it knew about the breach by the supplier or their incomplete or late execution of performance relating to the goods to which the debtor's payment applies. Chapter III following divestitures article 11 1. If the supplier assigns the claims mediator under the factoring agreement, which is regulated by the Convention: (a) the provisions referred to in articles 5 and 10, in accordance with point (b) of this section, shall apply to any subsequent assignment from an agent or from a subsequent successor. (b) article 8 and 10 the terms works as the following successor would be the mediator. 2. For the purposes of this Convention, the notification of the debtor about the assignment also includes the following assignment statement to the intermediary. Article 12 this Convention will not be applied to the following assignment, which was banned by the factoring agreement. Chapter IV final provisions article 13 1. this Convention is open for signature by the diplomatic Conference on the UNIDROIT draft Convention on international factoring and international financial leasing, the adoption of the final meeting and will remain open for signature by all States until 1990 in Ottawa December 31. 2. this Convention is subject to ratification, acceptance or approval by States which have signed it. 3. This Convention shall be open for accession by all States which have not signed this Convention from the date it is open for signature. 4. Ratification, acceptance, approval or accession is effected by submitting an official document depository. Article 14 1 this Convention shall enter into force on the first day of the month following the expiry of six months after the third instrument of ratification, acceptance, approval or accession. 2. for each State which ratifies, accepts, approves or accedes to this Convention after the third instrument of ratification, acceptance, approval or accession, this Convention shall enter into force for that State on the first day of the month following the expiry of a period of six months from the moment of submission of its instrument of ratification, acceptance, approval or accession. Article 15 this Convention shall not prevail over any agreement which has already been concluded or are being closed. Article 16 1. If a Contracting State has two or more territorial units in which different rights apply to the system as regards the matters dealt with in this Convention, the public signing of the instrument of ratification, acceptance, approval or accession, the moment can declare that this Convention is applied to all its territorial units or only to one or more of them and may modify its message, making another statement at any time. 2. The notification shall be communicated to the depositary and shall be clearly indicated to the territorial units to which the Convention is applied. 3. Where, in accordance with the notice, which in accordance with this article, this Convention is applied to one or more territorial units, but not to all Contracting national territorial entities and, if the company is located in the country, then for the purposes of this Convention, it is considered that this company is not located in a Contracting State only if it is not located in a territorial unit to which this Convention applies. 4. If a Contracting State shall not be made a notification in accordance with paragraph 1 of this article, the Convention is extended to all territorial units of that State. 17. Article 1 of the two and the number of Contracting States to apply analogous or similar provisions with respect to the matters governed by this Convention, it may at any time notify the non-applicability of the Convention, if the vendor, the intermediary and the debtor company are located in these countries. Such notifications may be made jointly or both sides making reciprocal unilateral declarations. 2. a Contracting State with respect to the matters governed by this Convention, the provisions of which are the analogous or similar to one or more States which are not parties to this Convention may at any time notify the non-application of the Convention, if the vendor, the intermediary and the debtor company are located in these countries. 3. If the State in respect of which the statement is made in accordance with the preceding paragraph, later becomes a Contracting State, then the notice with the date on which this Convention enters into force in respect of the new Contracting State, such notification, which in accordance with 1. focal points, provided that the new Contracting State joins in such declaration or makes a reciprocal unilateral statement to the Foundation. Article 18 the Contracting State may at any time, in accordance with article 6, paragraph 2, to announce that the assignment under paragraph 1 of article 6 shall not be valid against a debtor when the contract on purchase-sales of goods at the time of its establishment in that country. 19. Article 1 of this Convention in accordance with the notice, the time of signing, must approve the instrument of ratification, acceptance or approval. 2. approval of the notice and the notice is made in written form and must be officially notified to the depositary. 3. the notification shall take effect simultaneously with the entry into force of this Convention in the country concerned. However, the notice for which the official report of the depositary receives after such entry into force, shall enter into force on the first day of the month following the expiry of six months after the date on which it has been received by the depositary. Unilateral statements on a reciprocal basis, in accordance with the article 17, shall enter into force on the first day of the month following the expiry of six months after the date on which the Depositary Government has received the last statement. 4. any State which has made a notification in accordance with this Convention may withdraw it at any time by a formal notification in writing addressed to the depositary. The withdrawal shall take effect on the first day of the month following the expiry of six months after the date on which the depositary has received the notification. 5. the notice of revocation, which in accordance with article 17, the following cancellation effective date also any joint or unilateral communication between the expiry of that in accordance with this article shall be made by another State. Article 20 no reservations except those that are specifically for in this Convention. Article 21 this Convention applicable if claims that ceded under the factoring agreement, stemming from the purchase of goods – contract of sale concluded on the date or after the Convention enters into force in respect of the Contracting States referred to in article 2 (1) (a), or the Contracting State or States that referred to paragraph 1 of this article, (b), on the assumption that: (a) a factoring contract was concluded on or after that date; or (b) factoring contract parties have agreed that the Convention will apply. Article 22 1. Any Contracting State may denounce this Convention at any time after its entry into force, in that country. 2. Denunciation shall take effect when submitting the documents to the depositary. 3. the denunciation shall take effect on the first day of the month following the expiry of six months after the date on which the depositary has received the notification of denunciation. If the notification contains the longer period of entry into force of the denunciation, the denunciation shall take effect upon the expiry of this extended period after the depositary has received such notification. 23. Article 1 of the Convention is passed. storage in the Government of Canada. 2. The Government of Canada: (a) inform all States which have signed or acceded to this Convention and the International Institute for the unification of private law, the President of: (i) each new signature or deposit of instruments of ratification, acceptance, approval or accession and the date when it is made, (ii) any notification made under the 16, 17 and 18 articles, (iii) each of the notification made pursuant to article 19 (4) (iv) the date of entry into force of this Convention, (v) the denunciation of this Convention together with the submission filing date and the date of entry into force, (b) transmit certified copies of this Convention to all States which have signed it, all countries which are parties to the Convention and the International Institute for the unification of private law to the President. In witness thereof, the undersigned authorised representatives that are authorised by the Government respectively, have signed this Convention. ADOPTED in Ottawa, one thousand nine hundred and eighty-eighth year of the twenty-eighth day of may, in a single copy, of which the English and French texts are equally authentic.