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A Control Agreement lets a lender maintain control over a debtor's financial accounts or securities while still allowing the debtor to use them. In Belgium, these agreements play a vital role in secured lending, especially under the Financial Collateral Law of 2004.

The agreement creates a three-way relationship between the lender, debtor, and account bank. When triggered by specific events like payment defaults, it gives the lender direct authority to freeze or access the accounts. Belgian banks commonly use these agreements in commercial lending to protect their interests while offering businesses flexibility in their day-to-day operations.

Consider implementing a Control Agreement when lending against financial assets like securities or bank accounts in Belgium. This agreement becomes essential in secured financing deals where the lender needs a safety net while allowing the borrower to continue using their accounts normally.

The timing typically aligns with loan closings or major refinancing events. Belgian banks particularly value Control Agreements when dealing with corporate borrowers who maintain significant cash deposits or investment portfolios. It offers crucial protection during financial distress, giving lenders immediate access to collateral if the borrower defaults on their obligations.

• Basic Account Control Agreement: Sets up standard three-party control over bank accounts, allowing normal business operations while protecting the lender's interests
• Securities Account Control Agreement: Specifically designed for investment portfolios and securities accounts, with provisions for trading activities
• Multi-Account Control Agreement: Covers multiple accounts across different Belgian banks under a single agreement, streamlining administration
• Hybrid Control Agreement: Combines control over both cash and securities accounts, popular among Belgian financial institutions for complex lending arrangements

• Lending Banks: Draft and enforce Control Agreements to secure their financial interests when providing loans or credit facilities
• Corporate Borrowers: Sign these agreements to maintain access to credit while allowing lenders security over their accounts
• Account Banks: Act as custodians and agree to follow the lender's instructions regarding account access and control
• Legal Counsel: Prepare and review agreements to ensure compliance with Belgian financial collateral laws
• Financial Officers: Manage day-to-day operations under the agreement's terms and coordinate between parties

• Account Details: Gather complete information about all financial accounts to be covered, including account numbers and types
• Party Information: Collect legal names, registration numbers, and authorized signatories of the lender, borrower, and account bank
• Security Terms: Define specific triggering events and control rights under Belgian financial law
• Operating Rules: Establish clear procedures for day-to-day account operations and emergency control measures
• Documentation: Prepare corporate resolutions and proof of authority for all signing parties
• Review Process: Use our platform to generate a compliant agreement that includes all required elements under Belgian law

• Party Identification: Full legal names and roles of lender, borrower, and account bank under Belgian law
• Account Details: Precise description of all financial accounts covered by the agreement
• Control Mechanisms: Clear procedures for implementing control rights and triggering events
• Notice Requirements: Formal communication protocols between all parties
• Governing Law: Explicit reference to Belgian Financial Collateral Law and jurisdiction
• Operating Terms: Day-to-day account access rules and restrictions
• Termination Provisions: Conditions and procedures for ending the agreement

A Control Agreement differs significantly from an Account Agreement in several key ways, though both deal with financial accounts in Belgium. While Control Agreements focus on establishing lender rights over specific accounts during secured lending, Account Agreements set up the basic relationship between a bank and its customer.

• Purpose and Scope: Control Agreements specifically protect lenders' interests in secured transactions, while Account Agreements cover general banking services and account operations
• Parties Involved: Control Agreements require three parties (lender, borrower, bank), whereas Account Agreements are typically between just the bank and account holder
• Legal Framework: Control Agreements fall under Belgian Financial Collateral Law, while Account Agreements operate under general banking regulations
• Enforcement Rights: Control Agreements grant specific intervention rights to lenders, but Account Agreements focus on standard account access and management rules