In December of 2013, Panama enacted Law 129: “Ley 129, Que Promueve El Acceso Al Crédito Y Moderniza El Sistema De Garantías Mobiliarias A Través De La Hipoteca Sobre Bien Mueble Y Dicta Otras Disposiciones”. This was the most significant legal update of the sector since 1955. This law amends the 1955 law as well as introduces new provisions that increase the scope of assets that may be used as security interests. Security interests may now be used to guarantee different kinds of obligations, both future and present and determinable or determined. Similarly, it allows anything (movables, intangibles, tangibles and future assets) to be used as the subject matter of security interests, including inventory and intellectual property rights. Article 5 explains that anything that holds economic value may be used to secure an obligation under the Act. The law was modelled after the OAS Inter-American Model Law. It also establishes out-of-court enforcement in cases of default, if the sale of an asset results in an amount exceeding the value of the secured obligation, Article 48 provides a right for the debtor to demand a return of the excess. Additionally, the law created a public register (Registro Publico), whereby parties may register the agreements giving rise to security interests. Parties may register their interests online, and these registrations are public and accessible on the website. This has decreased unnecessary formalities and expenditure, as previous to this law, it was required to sign agreements before a notary to validly create security interests.

Click here for a PDF version of the law (Spanish)

Click here for a PDF version of an English translation of the law

Click here for the register (Registro Publico)

Last Checked October 2020

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