Legal implications of secured transaction law in Myanmar: a study on creation and perfection of security rights

A secured transaction involves the mutual agreement between a debtor and a creditorto extend credit by creating a security right in a movable asset. The secured transactionregimes worldwide are designed to allow movable assets to be used as collateral. In Myanmar, both movable and immovable secured lending is currently governed under different legislations, namely, the Transfer of Property Act 1882 (“TPA”), Myanmar Contract Act 1872 (“MCA”), and Myanmar Companies Law 2017 (“MCL”). The TPA, the principal legislation regulating property law in Myanmar, primarily focuses on the formalities for the creation and perfection of mortgages and charges on immovable property while the MCA, the law of contract supplements the purposes of property law. The MCL regulates mortgages and charges over company assets under specific methods of creation and perfection. While enforceable provisions exist across different legislations, there is a lack of legal mechanism for ensuring the effectiveness of the creation and perfection of security interests over movable assets in Myanmar. In addition, the absence of regulation to establish a centralized registry system to duly record the security rights of the creditors further complements the issues of the secured transaction laws. In modern financing practice, where multiple laws govern different types of security interests, it is essential to achieve functional equivalents regardless of the collateral type. This independent study, therefore, aims to explore “Why does the secured transaction regime in Myanmar require legal reforms to establish a unified legal framework for creating and perfecting security rights in any movable assets regardless of the types?”