Role and functions of AEGRM

The role of the Archive for Security Interests in Movable Property - AEGRM.

1. Function of ensuring priority

The concurrence among the mortgagees of the same asset, in other words the preference rank among the mortgagees or the priority rank that mortgage-secured creditors have versus unsecured creditors of the same debtor, is regulated in Art. 2.420 from the New Civil Code – The concurrence of security mortgages
(1) The rank of improved mortgages is determined according to the registration order or improvement of mortgages, with the exceptions stipulated by law.
(2) The improved mortgage is always preferred versus mortgages that have not been improved.

We have to mention that the publicity of the mortgage is not a scope per se; besides the publicity function that would be obviously nonsensical in the absence of the priority and preference function granted to such a secured creditor, the registration of the mortgage has also the effect of ordering the manner in which creditors are entitled to claim the receivable before other creditors by pre-determining the priority and preference rank. Additionally to the function of registering the mortgage, in certain cases, the registration and publicity of security mortgages is performed according to rules other than the general ones regulated by the New Civil Code, rules governing also the effects involved by this atypical publicity formula in regard to the priority and preference among creditors (see the section "Preference of the Tax Administration").

2. Besides the function of ensuring the priority, the other significant function of the Archive for Security Interests in Movable Property - AEGRM is such of warning potential creditors about previously concluded guarantee contracts.

In order to understand this function, a series of specifications have to be performed.
The activity of recording with the Archive for Security Interests in Movable Property - AEGRM of registration advices, carried out by persons authorized to perform such registrations as archive operators, does not suppose the performance of a legality control or such of a different nature in regard to the data recorded by the applicant in the form.
The registration of a security mortgage with the Archive for Security Interests in Movable Property – AEGRM briefly supposes the following procedure:

The creditor or his representative fills in the model form for the registration advice with the adequate data comprised in the security mortgage contract.

The archive operator proceeds to precisely register with the Archive for Security Interests in Movable Property - AEGRM the data comprised in the form filled in by the applicant without exerting the legality control thereupon¹; a legality control shall mean a verification of the consistency between the data recorded in the filled in form of the registration advice and such comprised in the contract and concurrently a verification of the validity of the concerned legal deed.

In accordance with the law, the registration of advice forms with the Archive for Security Interests in Movable Property - AEGRM is an obligation and “employees of the archive (archive operators) are not entitled and they cannot be compelled to take measures in regard to the accuracy of the information inserted in the Archive”, the entire liability for the data recorded in the form is incumbent on the person requesting the performance of the registration.

On the other hand, in accordance with art. 2.414 from the New Civil Code “the registration with the Archive renders no validity to a mortgage that is null and void”, so that, if there is actually no mortgage security contract or the content of the registration advices is not covered in the clauses of the security mortgage contract, the concerned registration shall not produce any effect.

What the archive operators verify is the adequate filling in by the applicant of the registration advice form and the applicant’s capacity of an interested person according to the law (of a creditor, debtor or legal/conventional representative thereof). As specified in a material drafted by the Iris Center (Center for Institutional Reform and the Informal Sector): 

“Operators do not see the contract and they do not know whether such really exists. These verifications would cause useless delays and complications. Even if the operator saw a handwritten contract – the law allows the conclusion of a security mortgage contact as a deed under private signature – there would still not be a certainty that this is a true contract, not a false one. Either thorough verifications that should impose the attendance of both parties (…), or an authentic deed would be necessary. Furthermore, operators would be liable for all such verifications and the entire procedure would be much more onerous. This is not necessary. On one hand, the Archive has only a warning function, so that in case a registration occurs in regard to a person, the potential creditor shall ask for additional information from the debtor or he shall make inquiries at other sources. On the other hand, an ill-intended person will not be able to perform a false registration, unless it designates itself as a creditor and thus the proof of its deed will be in a public database.”
 
3. Closely connected to the two functions of the Archive should be mentioned the public nature of the data recorded with the Archive for Security Interests in Movable Property - AEGRM.
The information recorded with the Archive for Security Interests in Movable Property - AEGRM is public and any person may search for information on a certain debtor or a certain asset, without paying any fee or procuring any previous access license. 
In accordance with the Regulation on the organization and operation of the Archive for Security Interests in Movable Property - AEGRM, adopted by Government Decision no. 802/1999 (amended and supplemented by Government Ordinance no. 89/2000 on certain measures for the licensing of operators and the performance of registrations with the Archive for Security Interests in Movable Property, published in the Official Gazette of Romania, Part I, no. 423 from 1 September 2000, Government Decision no. 350/2004 for the amendment and supplementation of Government Decision no. 802/1999 on adopting the Regulation for the organization and operation of the Archive for Security Interests in Movable Property,  published in the Official Gazette of Romania, Part I, no. 294 from 5 April 2004, Order of the Minister of Justice no. 1290/C/13 May 2004 for the approval of the guarantee advice forms on the registrations performed with the Archive for Security Interests in Movable Property and the instructions to fill in such forms published in the Official Gazette of Romania, Part I, no. 482 from 28 May 2004 by which was ordered the replacement of the forms comprised in Appendixes 1-4 to the Regulation by the forms comprised in Appendixes 1- 9 to the Order and the Order of the Minister of Justice no. 2034/C from 10 October 2011 for the approval of the registration advice forms on the recordings performed with the Archive for Security Interests in Movable Property and the instructions to fill in such forms published in the Official Gazette of Romania, Part I, no. 731 from 18 October 2011 by which was ordered the replacement of the forms comprised in Appendixes 1-9 to the Regulation by the forms comprised in Appendixes 1- 26 to the said order), “The Supervision Authority, by virtue of its supervision and regulation competences shall ensure (…) the direct and free access of the public to the reading and copying of the information recorded with the Archive without establishing other rules on the access and the procuring of information from the Archive”.
The Archive for Security Interests in Movable Property - AEGRM sets at disposal a search program by which can be procured precise data on the security interests registered with the Archive for Security Interests in Movable Property - AEGRM. 

As a general rule, the search shall be performed either according to the identification attributes of a person (potential debtor), or according to the description of the asset that is to be subject to the mortgage (search recommended especially in regard to vehicles described by the engine series and chassis number).  In case of a search having as a criterion the attributes of identifying the debtor, the results shall include all security mortgages set up by it to the benefit of the creditors. If no registration was found, the potential creditor may register the mortgage, having priority versus creditors, who will subsequently register mortgages in regard to the concerned asset.

If the search showed that there are previously registered mortgages, the creditor may request information from the debtor about the obligation secured by the mortgage registered with the Archive for Security Interests in Movable Property – AEGRM and he may request, on a case-to-case basis, the setting up of the mortgage on another asset or accept as a mortgage that very asset (if the value of the secured obligation previously assumed by the debtor is lower than the value of the asset).

In accordance with the above, situations may be thus encountered when the obligation secured by the mortgage registered with the Archive for Security Interests in Movable Property - AEGRM has already been executed by the debtor, whereas the creditor neglected to request the registration with the Archive for Security Interests in Movable Property - AEGRM of a relinquishment advice, as it is possible that the registration with the Archive for Security Interests in Movable Property - AEGRM should refer to a receivable or a legal deed for which the registration with the Archive for Security Interests in Movable Property - AEGRM does not represent a valid publicity method according to the law.

AEGREM.ro Team

Archive for Security Interests in Movable Property 

Notes
¹ Operators/agents may not refuse the registration with the Archive for Security Interests in Movable Property - AEGRM of a registration advice due to the reason that the registration with the Archive for Security Interests in Movable Property - AEGRM of that legal deed that is the subject matter of the registration advice is not a valid publicity method.