Actualidad Panama

Modernizing the Secured Transactions System

Act 129/2013

This law adopts a mechanism fully in line with market realities. It establishes new rules regarding the mortgaging of movable assets, thereby amending Decree 2/1955, 24th May, which was very useful in its day, but fell into disuse as market requirements changed.

This standard, which was inspired by the OAS Inter-American Model Law on Secured Transactions, seeks to facilitate access to credit by extending the categories of secured transactions to the mortgaging of trade receivables; stocks and shareholdings in any kind of corporation; inventories; property rights; copyright, etc. It streamlines the system of transactions secured by moveable assets, establishing simplified registration procedures; faster implementation mechanisms and the possibility of successive mortgages, as well as eliminating the unnecessary red tape only too common for this type of operation.

The rule benefits both parties (lenders and borrowers), who, apart from increasing their range of mortgage options, can access operations faster and at lowers costs. This will definitely make banking more attractive. It will also give a boost to the country's competitiveness as it upgrades the system to meet international standards.