Mozambique

Mozambique law permits the creation of mortgages over certain classes of assets: e.g. aircraft and ships. These mortgages must be registered to be effective.

In relation to other categories of moveable property, a pledge (penhor) must be taken instead. Intangible property may also be pledged. Apart from a requirement of writing, there are no formalities required for the creation of a pledge.

The personal property security law of Mozambique differs from English law in a number of interesting ways.

Registration is generally not necessary (or indeed possible for publicity purposes), except in relation to pledges of shares, which must be registered at the Legal Entities Registry Office. Share certificates must be endorsed in favour of the security taker; an appropriate entry must be made in the company’s share register book; and share certificates must be delivered to the security taker.

The creation of security over future assets (e.g. receivables) requires additional steps to be taken, under Mozambique law. The general rule appears to be that security may only be created over presently existing property. Parties can enter into a written agreement under which they agree that security is to be taken over future receivables, but this security arrangement will only be effective once notice is given to the debtor.

Most unusually, security created in favour of a foreign creditor must be approved by and registered with the Central Bank of Mozambique. This requirement is seldom found in other jurisdictions, perhaps because it significantly increases transaction costs.

References

https://www.africanlawbusiness.com/publications/project-finance/project-finance-2016/mozambique/q-and-a#chaptercontent2

http://www.hrlegalcircle.com/xms/files/Publicacoes/2014/IFLR_Project_Finance_Report_2014_-_Mozambique.pdf

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