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November 2018

International Coordination on Secured Transactions Law Reform

Improving Access to Credit – A Video Explanation

The Department of International Law participated in the Second Conference on International Coordination of Secured Transactions Law Reforms: Advancing Global Reforms and Building a Uniform System held October 16-17 in Madrid, Spain. Attendees included representatives from the World Bank Group/International Finance Corporation, United Nations Commission on International Trade Law (UNCITRAL), Institute for the Unification of Private Law (UNIDROIT), European Bank for Reconstruction and Development (EBRD), US Agency for International Development (USAID), Japan International Cooperation Agency (JICA), plus numerous academics and judges. The conference was co-sponsored by the Universidad Carlos III de Madrid, the Kozolchyk National Law Center1 and the International Insolvency Institute and was the follow-up to the initial conference that had been held in Philadelphia in 2017.

The focus of this second conference was to build on the initial introductory discussions and to report on progress in various reform initiatives. It has been widely recognized that multiple reform efforts, which are frequently contemporaneous and at times duplicative, could be better orchestrated to maximize resources and achieve the goals of economic law form at state level as well as greater harmonization at regional and international levels. Remarks by the OAS representative were based upon recommendations that have been elaborated elsewhere and subsequent developments. The most recent example from the Americas is Peru, which has a new secured transactions law as of September 10, 2018.

These efforts are pursuant to the mandate from the OAS General Assembly “to promote the Model Law on Secured Transactions among member states” … and to do so “in collaboration with other organizations and associations that work in this area (including) UNCITRAL and UNIDROIT (among others)” International Law, AG/RES. 2909.

An important issue that was discussed is complementarity of international instruments. For example, Article 1 of the OAS Model Law allows states to exclude certain types of assets from its scope and under that model, certain economies in the region have excluded intermediated securities, a subject that was also specifically excluded from the UNCITRAL Model Law. Accordingly, effective coordination enables states to use other instruments specific to intermediated securities to complement both of these pre-existing models. 

Along a similar line, and of note for OAS Member States, is the forthcoming UNIDROIT diplomatic conference in November 2019 in Pretoria, South Africa to adopt the “MAC Protocol” which is an extension of the Convention on International Interests in Mobile Equipment. Known as the “Cape Town Convention”, this treaty with 77 contracting states establishes an international legal regime for security interests in high-value mobile equipment (such as aircraft, etc.); the new protocol will extend its application to Mining, Agriculture and Construction equipment. The Cape Town Convention and its Protocols are often used by states to supplement the domestic secured transactions law applicable to the broader spectrum of moveable collateral in general. This serves as yet another example of the value of cooperation in the development of private international law instruments. 

Another initiative related to the foregoing is the Asia-Pacific Financial Forum (APFF) which was proposed by the APEC (Asia-Pacific Economic Cooperation) Business Advisory Council, launched in 2013, and which reports to APEC Finance Ministers. As a platform for private-public collaboration “to accelerate development of integrated financial markets” in the region, one of its work streams is support for legislative and regulatory reforms in secured transactions and warehouse receipts financing. The Department is currently exploring possible collaboration.

1 Also known as “NatLaw” and formerly the National Center for Inter-American Free Trade.

For further information on this matter, please contact the Department of International Law of the Secretariat for Legal Affairs of the OAS +1 202 370 0743. 

» For more information about the OAS Secured Transactions Project, please visit our Website

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