What is a pledge (pandrecht) under Dutch law?

Dutch term: Pandrecht | Legal basis: Articles 3:227-3:259 BW

A pledge (pandrecht) under Dutch law is a security right over movable property or receivables that gives the pledgee (pandhouder) a preferential right to the pledged asset if the debtor defaults. Pledges are regulated by articles 3:227 to 3:259 of the Dutch Civil Code.

Dutch law distinguishes between a possessory pledge (vuistpand), where the pledged asset is physically delivered to the pledgee, and a non-possessory pledge (stil pandrecht), which is created by a notarial deed or a registered private deed without transfer of possession. Non-possessory pledges over receivables are commonly used in financing arrangements. The pledgee has priority over unsecured creditors in insolvency.

Why it matters for international businesses

For supply chain finance and credit security arrangements under Dutch law, pledges over receivables and inventory are a standard tool alongside retention of title and bank guarantees.