Background and Importance

The OAS Secured Financing Project supports the development of secured transactions laws and collateral registries throughout the Americas by enhancing the capacity of OAS Member States to implement legislative reforms and related policies.

Secured Transactions and Economic Development

Access to credit can provide a key source of capital for economic growth. An effective and efficient secured transactions regime plays a pivotal role in facilitating extension of credit to the private sector and reducing borrowing costs, mainly as a result of expanding the range of acceptable collateral beyond conventional sources (i.e., real property) and providing greater legal certainty for lenders as to priority and enforcement of security interests. As access to credit at lower costs becomes available to a wider range of economic actors, this can have significant impact for MSMEs and women-owned businesses, and serve to stimulate economic growth and development at large.

OAS Model Instruments

Regional uniformity and harmonization of secured transactions laws has been a subject of consideration by OAS Member States for some time. In 2002 and 2009, respectively, two instruments were adopted by means of the CIDIP legislative process, the Model Inter-American Law on Secured Transactions (CIDIP VI) and the Model Inter-American Registry Regulations (CIDIP VII).

Department of International Law (DIL)

Among its functions, DIL promotes and performs activities aimed at modernizing and harmonizing Member States’ legislation in areas of public and private international law. Through the OAS Secured Financing Project, DIL is assisting OAS Member States in the modernization and harmonization of their secured transactions legal frameworks based on these OAS models and other international instruments, and is thereby establishing the foundation for legislative harmonization and economic integration.

Progress by OAS Member States

A number of OAS Member States have made progress towards secured transactions reforms. Nevertheless, a significant number have limited capacity to do so. The OAS Secured Financing Project serves to fill that gap for those Member States that express interest by providing a capacity-building opportunity within the context of a broader reform initiative.

International Trade and Competition

On a list of commercial laws, secured transactions law is near the top of that list, as an essential component in creating a favorable business and investment climate. A robust and efficient secured transactions regime promotes confidence among lenders and enables local business to obtain the necessary capital for a quick response to supply constraints and competition in outside markets. Secured transactions reform is therefore instrumental in providing the necessary legal and institutional infrastructure for engaging in cross-border trade and economic development.