Mozambique has recently established a legal regime for the use of movable securities as a guarantee of compliance of obligations and creates the Central Registry of Movable Securities.
This law was published 28 December 2018 and went into force 30 days after its publication, which was 27 January 2019.
The law in question, a new regime was established for the constitution of guarantees on movable assets, including the pledge, mortgage (securities on movable property subject to registration), assignment of collateral, financial leasing, sale with reservation of property and any other legal business of which its substance is the creation of a security on a movable asset.
Movable assets, which can provide as securities, cover movable assets, specific or generic, present or future, tangible or intangible, cash, agricultural products, credit and debit securities, mineral and petroleum resources, intellectual property rights, business inventory and, in general, other rights and assets not prohibited by law.
Its efficacy before third parties, as well as the degree of priority of the security, now relies on its registration with the Central Registry of Movable Securities, regardless of any likely registration to which the security is subject to before a specific Registrar Office.
The integration of the Central Registry of Movable Securities and other respective registry services must be included in a specific diploma approved by the Council of Ministers, which, to the best of our knowledge, has not yet been approved.
It is incumbent upon the Government to regulate the legal regime within the period of 90 days as of the 28 December 2018.
This new regime of movable securities deeply alters the regime of securities on movable assets, provided for in the Civil Code, as well as changes the generality of provisions, dispersed by other legal diplomas, concerning the regime of securities on assets and rights, including the efficacy, in relation to third parties, of the securities on movable assets subject to registration. The Civil Code shall, henceforth, be of subsidiary application.
All ongoing operations falling under the scope of the law in question must comply with the law within the period of 6 months counting from the date of entry into operation of the Central Registry of Movable Securities, under prejudice of losing priority of registration and level of competition of the security. The same period applies to the securities currently registered with the respective registrar offices or that refer to judicial or conventional securities on the following movable assets and rights subject to registration of ownership:
- Motor vehicles, railway vehicles; aircrafts and vessels; and
- Shareholdings.
Article compiled by Telmo Ferreira, partner at Mozambican member firm CGA Associados
