Security interests in movable assets are similar to pledges with the added advantage whereby the debtor remains in possession of the asset which acts as collateral.  New regulations have been introduced in Panama in an effort to promote access to credit via an increase in movable asset securities.  These regulations are also intended to simplify the formalities required to create movable asset securities.

These new regulations are based on the Inter-American Law on Secured Transactions which has been adopted by several other countries in the region.

Some of the features of the new regulations include;

– Under certain conditions being able to create a security interest in movable assets without the need for a public deed
– The possibility to create a security interest in movable assets in respect of intangible assets such as trademarks, patents and copyrights
– A security interest in a movable asset may be converted into a pledge and a pledge and be converted into a security interest in a movable asset
– Multiple security interests may now be created over a single movable asset
– Rules are now defined regarding the priority of security interests in movable property guaranteed by the same asset
– Funds may now be returned to the consumer if the value of the assets exceeds the balance of the obligation

The first laws which regulated security interest in movable property came into force in Panama in 1955 and it is hoped that the above overhaul will increase access to credit while significantly lowering costs.