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Lenders always seek to protect their interests over their loans or security when borrowers go into liquidation. However, it has increasingly been of interest to borrowers to know what happens to the loans or security when lenders go into liquidation. The statutory right of set-off in liquidation in Hong Kong in these circumstances was dealt with by the Judicial Committee of the Privy Council in Tam Wing Chuen & Anor v Bank of Credit & Commerce Hong Kong Ltd (in Liquidation) [1996] 1 HKC 692.

Baker & McKenzie's Warsaw office has merged with the local office of Detroit-based firm Dickinson, Wright, Moon, Van Dusen & Freeman. The move follows Dickinson Wright's decision to concentrate on its US offices. The Warsaw office was the firm's only foreign base. The merger brings Baker & McKenzie's staff in Poland to 33 lawyers. For more information see the Polish country survey.

The Prevention of Terrorism (Jersey) Law 1996 came into force in Jersey (with the exception of certain provisions thereof) on July 1 1996. The Law proscribes organizations involved in terrorism, contains powers to exclude certain persons from Jersey, includes offences of providing financial assistance for terrorism and provides for the investigation of terrorist activities.

What is the relationship between a participant in a secured loan and the debtor when the debtor becomes bankrupt? This question has troubled many participants concerned that they may not be able to assert rights in the collateral during the course of the bankruptcy proceeding.

The government has taken steps to encourage insurance companies to provide offshore insurance services in Labuan's International Offshore Financial Centre. Although reaction in the banking market to the possibility of setting-up offshore had been good, only six insurance companies had moved to the centre.

The Finance Ministry has recently revised its policy relating to the issue of Foreign Currency Convertible Bonds (FCCBs) and ordinary shares (through the Depositary Receipt mechanism). It has substantially relaxed its policy on Euro-issues including clearance to non-bank finance companies to access the European market. Under the revised guidelines, non-bank financial companies registered with the Reserve Bank of India have been permitted to float Euro-issues. The new guidelines are expected to promote greater flexibility.

The following is a summary of recent developments:

Ruling in favour of the international chemical group Bayer AG, the Court of First Instance has suspended the Commission decision of January 10 1996 which stated that the activities of Bayer Spain and Bayer France, subsidiaries of Bayer AG, constituted an 'agreement' contrary of Article 85 of the EC Treaty.

The Banking (Amendment) Act, passed on May 21 1996, will require locally-incorporated banks to raise their minimum shareholders' funds to approximately US$1 billion from the current minimum of approximately US$540 million.

The major Hong Kong conglomerates are in the grips of spin-off fever. Cheong Kong, Henderson Land, New World Development and Wai Kee Holdings have all streamlined their operations in the past year through the use of spin-offs.