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C. Ship Mortgage I. The Public Registrar Office with its Mercantile Section and Maritime Department, among others, is authorized by Law to register titles of vessels (certificate of construction or bill of sales) and naval mortgage on the recorded vessels or deletions thereof. This Registrar Office as an autonomous Public Entity, may issue Certification to that effect, which will have full proof against third parties. The Registrar may act by receiving (via fax or e-mail), request from Panamanian Consuls or local Attorneys, petitions for the "preliminary" registration of titles (bill of sale) or mortgage or the discharge thereof. After successfully recording in a preliminary form, the original instruments (which may be in a language, other than Spanish) executed and legalized by a notary with apostil or by the Consul Office, needs to be sent to Panama for a authorized Attorney for further Registration in a definitive form. To keep the validity of the date of first recording the mortgage alive, filing the definitive document, needs to be accomplished within six month period. The full protection of the Law, will then be obtained. II. To facilitate the financial aspect to owner, Law No. 14 was enacted, back in May 14 of 1980. This Law which amended the Commercial Code in matters of registration of titles and mortgages, standardized the procedure to record mortgages in a preliminary and definitive form. Panama had allowed since that year that the English text of a mortgage agreement will be accepted in a preliminary form. This Law allowed the parties to do a closing of a purchase or sale of a Vessel at any Consulate office. To further the flexibility of this procedure, by Executive Decree No. 203 of December 1, 1982, the Public Registrar Office in Panama, was authorized to work extraordinary hours to record preliminary title and mortgages. To that effect, the Consulates due to different time zones within Countries, may request the Registrar Office, to open and provide services in hours which will be acceptable to the solicitors. III. Law No. 43 of 1984 amended the original Law No. 14 of 1980 for preliminary process and with it various sections of the Commercial Code were modernized. The benefits are: 1) The mortgagee may be authorized by virtue of an express mandate included in the mortgage Deed (or loan agreement) to sell the vessel, in case of default by the mortgagor; for a defined price. This mandate in favor of the mortgagee eliminates the procedure of auction, as stated in most other jurisdictions, 2) The limit on the annual percentage of interest (2% per month) as previously enunciated in the Commercial Code was eliminated. 3) The formalities for recording and maintaining "rotating credits lines" was simplified. 4) Finally, the discharge of a recorded mortgage by ways of preliminary forms, was allowed.
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