Veto on the legal framework for guarantees overturned

In brief

The National Congress recently overturned a presidential veto to re-establish provisions set out in Bill of Law No. 4.188 of 2021, which was converted into Law No. 14.711/2023.

In more detail

The purpose of Law 14.711/2023, known as the Legal Framework for Guarantees, is to make it easier to locate the debtor’s assets and to speed up the procedures for their seizure and attachment, establishing, for example, the possibility of extrajudicial sale of mortgaged property and the powers of the guarantee agent.

Moreover, the veto concerns the possibility of extrajudicial search and seizure for movable property sold in trust as security by notaries who register titles and documents.

This possibility of search and seizure under Decree-Law No. 911 was vetoed on the grounds that it violated the reserved jurisdiction clause, as the Supreme Court had already ruled in ADI No. 1.668/DF.

A reading of the provisions that were once vetoed and have now been upheld reveals the need for further regulation so that enforcement measures can be fully implemented in an extrajudicial format. However, the legislator’s intention to make it easier to locate and seize certain assets offered as security cannot be denied  — and is even to be welcomed.

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