4. RESULTADOS DE LA INVESTIGACIÓN
4.2 ANÁLISIS DE LA INFORMACIÓN RECOLECTADA EN ENTREVISTA DIRIGIDA A
General considerations: The foundation of any modern secured transactions system is the legal basis upon which it is designed, constructed and operated. The legal framework determines all elements of the secured transactions regime, including execution of the security
agreement, the registration process, determination of the relative priorities among conflicting claims to collateral and the enforcement of such claims.
The risk of non-repayment is one of the key factors in a creditors’ determination whether to advance credit or not. A well-designed legal system based on sound public policies can reduce that risk, thereby encouraging creditors to provide credit under reasonable credit costs to the borrowers. However, there are examples of initiatives taken by a number of countries where a reform to secured transactions law resulted in additional barriers to access credit. Some of these resulted from inadequate legal reform in terms of secured transactions law or related legislation. (Examples include Poland, where the law required filing of hard-copy security agreements, and Madagascar, where the leasing law required filing of four copies of the registration documents.)
Section B of this chapter discusses the various components of modern legal systems that are designed to facilitate access to credit secured with movable property.
Modern and traditional systems: Modern secured transactions law was born in the United States and the introduction of article 9 in the Uniform Commercial Code was a departure from traditional common law. However, modern secured transactions laws are adaptable to any system whether based on the common law, the civil law or any other law system. Some states with undeveloped commercial law systems regard this area of reform as a product of developed nations and therefore too advanced or complicated. However, these systems have been implemented successfully in both developed and developing jurisdictions (e.g. USA, Canada, New Zealand, Albania, Romania, Bosnia and Herzegovina, Slovakia, Vietnam, China, Bulgaria and Cambodia). While a modern secured transactions system is important to any legal system regardless of its legal tradition, the approach to this reform must take into account the existing local conditions and customary practice. In addition to the main differences included in Box 6, challenges arising from different practices may include the following:
Legal environment—form over substance: Modern secured financing legislation typically determines its application based on the substance or economic rationale underlying of the transaction (USA, Albania), as opposed to legislation where the name or form of the transaction determines whether it is a secured financing transaction or
not (OHADA Uniform Act on Secured Transactions). Use of notaries: The mandatory use of notaries is more pervasive in civil law jurisdictions with undeveloped secured financing systems, where they play a central role in the execution of security agreements and registration procedures (e.g. Tajikistan and Indonesia). Other jurisdictions have abolished the mandatory role of notaries to reduce the cost and time for the creation of security interests without compromising the legal validity of the transactions (e.g. Romania and Bosnia and Herzegovina).
Fragmentation: One of the deficiencies that can render secured financing systems unsustainable is multiple sources of information regarding claims against the same movable property. This can happen when the information on claims against movables is not centralized, i.e. registration is fragmented among different registries for sub-national jurisdictions or among registries at different levels of government. The better practice is to centralize all secured transactions information in one place (with respect to movable property). With modern computerization, this
approach has proven very effective (e.g. The International Registry of Security Interests on Mobile Equipment, Romania, Cambodia and Bosnia and Herzegovina). Debtor classification—juridical persons versus individuals: In some jurisdictions there are separate registries for security in property of juridical persons (companies) and security in property of individuals. For example, in the Peoples Republic of China, security in the movable property of individuals is registered with the public notary, whereas security in the movable property of juridical persons is in registries wof the Administration of Industry and Commerce. In some jurisdictions, natural persons (including sole proprietorships) may not use their movable assets as collateral. These are jurisdictions in which security interests are registered in the Company Registry (i.e, UK’s Company Register and “Registres de Commerce et du Credit Mobilier” in Morocco, Mali, Madagascar, Burkina Faso, Togo, Chad, etc.). The recommended practice is to create a single depository of security interests for all types of legal and natural persons.
Box 6: Main Differences between jurisdictions with Undeveloped Commercial Law and those with Developed Commercial Law with Respect to Secured Financing
jurisdictions with undeveloped commercial law generally:
Adhere to strict legal forms such as the pledge or mortgage and their related formalities; 1.
Require possession of collateral by the creditor (if possessory pledge is the only form of security); 2.
Require traditional document registration (for example, the notarized credit agreement); 3.
Require specific description of property subject to an interest and preclude use of future property and 4.
changeable property as security; and
Protect debtors in enforcement to the point that enforcement becomes excessively costly and unlikely to 5.
succeed in timely manner.
43. The OHADA Uniform Act on Secured Transactions is currently being revised so this example might not be valid in a near future if the reform is successful.