Law No. 6/2025 of 30 July on the Legal Regime of Movable Property Security

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Série I, N.° 31 B Quarta-We, 30 July 2025 Page 1 Extraordinary Number $ 1.00 OFFICIAL PUBLICATION OF THE DEMOCRATIC REPUBLIC OF TIMOR-LESTE Quarta-We, 30 July 2025 Série I, N.° 31 B SUMMARY NATIONAL PARLIAMENT:
Law No. 6/2025 of 30 July
Legal Regime of Movable Property Security ...... 1
LAW NO. 6/2025 of 30 July
LEGAL REGIME OF MOVABLE PROPERTY SECURITY
With a view to creating an environment favorable to private investment and, through this, to the economic development of the country, this law aims to achieve the following objectives: a) promote the granting of low-cost credit, increasing the availability of secured credit; b) allow debtors to use the full value of their assets to secure the granting of credit; c) enable the creation of security rights in a simple and efficient manner; d) treat uniformly different types of financiers and the various forms and contractual modalities of credit granting; e) allow the creation of security rights without dispossession of the guarantor with respect to all types of assets; f) increase certainty and transparency, through the registration of information relating to security rights in a general register of security rights; g) establish priority rules that resolve, with a high degree of certainty and normative predictability, conflicts between different security rights affecting the same asset; h) facilitate the efficient enforcement of a secured creditor's rights in the event of the debtor's default; i) expand the scope of party autonomy in stipulating the content of the security agreement; j) balance the interests of all persons involved in the contractual creation of security rights, namely the debtor/guarantor, the secured creditor, and third parties. In order to achieve these objectives, this law establishes the general regime of contracts through which parties create security interests on movable property, regardless of their specific configuration, whether it be pledge, financial leasing, assignment of credits, or any other type of security that the parties, in the exercise of their autonomy, wish to establish. The normative content of the proposed instrument comprises five essential matters: (i) the regulation of the contract itself through which the security right is created, establishing its conditions of validity and determining the rights and obligations of the parties; (ii) the definition of the modes through which security interests become effective against third parties – modes which are the possession of the asset on which the security interest is imposed, the registration of information relating to the security in the Central Registry of Information on Movable Property Security or in a specialized register if one exists; (iii) the creation of the Central Registry of Information on Movable Property Security and the regulation of the registration of information relating to the creation, modification, and extinction of security rights; (iv) the definition of priority rules that determine which right prevails when several incompatible rights simultaneously affect the same asset; (v) the regulation of the enforcement of security interests in the event of the debtor's default and insolvency. One of the most innovative aspects of the law is the creation of the Central Registry of Information on Movable Property Security, operating electronically,
online, and accessible to the public, where a creditor can submit information to alert other potential creditors (as well as other third parties) to the possible existence of a security right, ensuring, on the other hand, that such a right, if it really exists, is effective against third parties. The registration process will be fast, automatic, simple, and inexpensive, with characteristics different from the real estate registration process. Any potential creditor interested in establishing a security right over a specific asset can consult the Central Registry of Information on Movable Property Security for information indexed by the name of the guarantor, in order to verify whether the asset in question is or is not encumbered with security rights potentially established by it. The guarantor will normally also be the debtor, but it is possible that it is a third party who allocates a specific asset to the fulfillment of the obligation.

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Série I, N.° 31 B Quarta-We, 30 July 2025 Page 2 The Central Registry of Information on Movable Property Security will be available 24 hours a day, 7 days a week, and may be consulted by any person. The Central Registry of Information on Movable Property Security is intended to provide a mechanism through which secured creditors can make their security right effective against third parties, allowing the registration of information revealing the possible existence of security rights and establishing priorities among creditors and between them and other categories of third parties. This is not a register of rights, nor even a register of legal facts regarding certain assets, as is the case with the current real estate register. The (automated) registration of information is therefore not subject to any prior legality control, nor does it give rise to any administrative act. Another striking feature of the law is the innovative regime for the enforcement of security interests in the event of the debtor's default. As a rule, creditors are only willing to grant credit if they can rely on the recovery of what is owed to them in the event of default. Under the current law, a creditor who wishes to enforce a security interest and faces resistance from the debtor has no other lawful alternative other than the judicial route, which is usually slow and expensive. This limitation discourages the granting of credit. With the law now approved, the creditor (who remains entitled to resort to the courts, if that is their preference) can now enforce their security right, executing it extrajudicially, through a procedure that, being faster and more expeditious, does not fail to ensure respect for the rights of the debtor/guarantor and other creditors, in particular other secured creditors. Thus, the National Parliament decrees, under the terms of letter e) of paragraph 2 of Article 95 of the Constitution of the Republic, to have the force of law, the following:
CHAPTER I
GENERAL PROVISIONS
Article 1.
Object
1. This law establishes the legal regime for the use of movable property as security for the fulfillment of obligations, establishing the effectiveness, priority, and enforcement of security rights over movable property.
2. This law also creates the Central Registry of Information on Movable Property Security.
Article 2.
Scope of Application
1. This law applies to security rights over movable property, corporeal or incorporeal, established to ensure the fulfillment of obligations, regulating their effectiveness, priority, and enforcement, provided that:
a) The corporeal movable asset is located in national territory at the time of the creation of the security right; or b) The incorporeal movable asset has as guarantor a person domiciled in Timor-Leste at the time of the creation of the security right.
2. This law also applies, exclusively for the purposes of registration in the Central Registry of Information on Movable Property Security, to security rights established by law or judicial decision, when such registration is determined.
3. With the exception of Articles 59 to 70, this law also applies to definitive conventional assignments of receivables without a security function.
4. The following security rights are excluded from the scope of this law:
a) Consumer goods, except when encumbered by a financed acquisition security interest; b) Corporate participations, in accordance with Article 41 of the New Law of Commercial Companies.
Article 3.
Definitions
1. For the purposes of this law, the following are understood by:
a) "Security Agreement", the agreement, regardless of whether the parties designate it as such, concluded between the guarantor and the secured creditor through which a security right is established, including the definitive conventional assignment without security function of receivables; b) "Consumer goods", any goods used or intended to be used exclusively for personal, family, or domestic purposes; c) "Goods derived from the asset subject to security", any goods that have their origin:
i) In the asset subject to a security right, including what is received as a result of a sale or alienation by another means, lease, license, substitution, or enforcement of the object of the security, civil and natural fruits, insurance credits, amounts paid as compensation for damage, loss, prejudice, or lost profit caused to the object of the security; ii) In and goods that, in turn, have their origin in the derived goods referred to in the previous sub-letter (derived goods of derived goods); d) "Incorporeal movable asset", any movable asset insusceptible of being apprehended by the senses, namely rights and other legal positions and creations subject to intellectual property; e) "Movable asset", the movable thing, in accordance with Article 196 of the Civil Code, including however:

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Série I, N.° 31 B Quarta-We, 30 July 2025 Page 3 (i) Agricultural products in the process of formation and growth; (ii) Trees to be felled and fruits to be harvested; (iii) Incorporeal assets, including intellectual property rights; (iv) Components of immovable property; (v) Negotiable instruments, investment securities, and negotiable titles; f) "Corporeal movable asset", the tangible movable asset, including money, negotiable instruments, investment securities, and negotiable titles, without prejudice to the provisions of paragraph 2; g) "Receivable", the right to the fulfillment of a monetary obligation, excluding the right to a payment emerging from a negotiable instrument, the right to a payment of funds credited in a bank account, and the right to a payment emerging from an investment security; h) "Secured creditor", the creditor holding a right secured by movable property; i) "Security right":
i) The right over a movable asset established through an agreement substantially intended to guarantee the fulfillment of an obligation, monetary or of any other nature, regardless of the designation given by the parties, allowing the creditor to be paid with priority from the value of the asset, in the event of maturity or default of the guaranteed obligation, namely the pledge, the pledge in favor of a pawnshop, the movable mortgage, financial leasing, the assignment of credits in security, the lease agreement with purchase option, the sale with reservation of ownership, the consignment as security, and any other legal transaction whose substance is the establishment of a security interest on a movable asset; ii) The right of the assignee of a receivable resulting from a definitive conventional assignment without security function; j) "Guarantor", the natural or legal person, whether the debtor themselves or a third party, who establishes a security right in favor of the secured creditor; k) "Financed acquisition security", the security right that affects the very asset whose acquisition is financed by the creditor, including cases where the creditor is the seller, supplier, financial lessor, or lender who advances funds specifically intended to finance the acquisition; l) "Mass of goods", the movable asset that results from the incorporation of several movable assets of the same nature, losing their own identity; m) "Obligor", the debtor of the receivable that is the object of a security right; n) "Component" of an immovable property, the movable thing, in accordance with paragraph 3 of Article 195 of the Civil Code, which is attached, fixed, or materially linked to the property, with a character of permanence, intended to satisfy the permanent needs of the property and in which the link has no defined temporal limit, other than that resulting from the laws of physics, which is not part of the structure of the property but increases its utility, serving to make the property more productive, safer, more comfortable, or more beautiful, such as tiles, roofing, central air conditioning installation, elevator, and solar panel. o) "Possession", the effective possession of a movable asset by a person or by their representative; p) "Product", the movable asset that results from the physical joining or union of a corporeal movable asset with one or more other corporeal movable assets or other processes, such as manufacturing, assembly, or transformation, in such a way that the assets involved in these processes lose their own identity; q) "Registration", the storage in the database of the Central Registry of Information on Movable Property Security of the information for registration submitted to it; r) "Public access register", the part of the database of the Central Registry of Information on Movable Property Security accessible to the public through search.
2. The reference to "corporeal movable assets" in letter f) of the previous paragraph, as well as in Article 16, does not include money, negotiable instruments, and negotiable titles.
Article 4.
Party Autonomy and General Rules of Conduct
1. The provisions inserted in Chapters II, III, V, and VI, with the exception of Article 54 and paragraph 2 of Article 58, are of a supplementary nature, and the parties may, by agreement reduced to writing, agree otherwise.
2. The agreement referred to in the previous paragraph is ineffective with respect to those who are not parties to it.
3. The rights provided for in this law must be exercised and the obligations provided for therein fulfilled in good faith and in terms that are commercially reasonable.
CHAPTER II
CONSTITUTION OF THE SECURITY RIGHT
Article 5.
Requirements of the security agreement and constitution of the security right
1. The security right is established through a security agreement.

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2. The security agreement effectively constitutes the security right if:
a) The guarantor has over the asset subject to the security some right on the basis of which they can legitimately constitute the security right; b) It is concluded in writing and signed by the secured creditor and the guarantor; c) It identifies the secured creditor and the guarantor and indicates their respective addresses; and d) It describes the asset subject to the security and the guaranteed obligation in a manner that allows for their reasonable identification.
3. For the purposes of the previous paragraph, it is considered sufficient that the description of the asset subject to the security is made by reference to all movable assets of the guarantor, present or future, or to a type of movable assets, without it being necessary to specifically individualize each of them.
4. It is also considered sufficient, for the purposes of paragraph 2, the description of the asset subject to the security or part of it by indicating a serial number that serves to identify it.
5. It is also considered sufficient, for the purposes of paragraph 2, that the description of the guaranteed obligation consists of a reference to all obligations, present and future, of the debtor towards the secured creditor.
6. The description of the guaranteed obligations is not necessary when the security agreement refers to a definitive conventional assignment without security function of receivables.
7. The security right can ensure the fulfillment of one or more obligations of any type, present or future, determined or determinable, conditional or unconditional, fixed or variable.
8. The security can be established on:
a) Any movable asset, corporeal or incorporeal; b) Any right over a movable asset susceptible of transmission, including undivided right or a share of co-ownership or community; c) A type of movable assets; and d) All movable assets of the guarantor.
9. Imprescriptible or inalienable assets under the law cannot be the object of security.
10. The security agreement may provide for the establishment of a security right over a future asset, with the right being constituted when the asset comes into existence or, if the asset already exists, when the guarantor acquires over it some right that legitimizes them to constitute the security right.
Article 6.
Security right over derived goods
The security right extends to the goods derived from the asset subject to the security.
Article 7.
Goods incorporated into a mass of goods or into a product
1. The security right over goods incorporated into a mass of goods automatically converts into a security right over that mass of goods, without the need for any contractual addendum or additional act of another nature, but limited to the proportion with which the quantity of assets subject to security contributed to the mass at the time of incorporation.
2. The security right over goods that are incorporated into a product automatically converts into a security right over that product, without the need for any contractual addendum or additional act of another nature, but limited to the value of the encumbered asset immediately before becoming part of the said product.
Article 8.
Goods that become components
The security right over movable assets that become components of immovable property remains after integration.
Article 9.
Goods that become accessories
The security right over movable assets that become accessories remains after their allocation to the principal asset.
Article 10.
Extinction of the security right
The security right is extinguished when all guaranteed obligations have been fulfilled or extinguished by another means, provided that the creditor is not still obliged, notably through a credit opening contract, to grant credit that gives rise to new obligations covered by the security right.
Article 11.
Contractual limitations on the establishment of security rights over receivables
1. Any provisions contained in the contractual conditions of the receivable that aim to prevent or limit the creation of a security right over the same are not opposable to the secured creditor nor constitute an impediment to the establishment of a security right over a receivable.
2. Neither the guarantor nor the secured creditor incurs liability for non-compliance with the contractual limitations referred to in the previous paragraph vis-à-vis the obligor, who, moreover, is not exempt from the duty to satisfy the receivable on which the security is imposed.

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3. The provisions of the previous paragraphs apply only to the receivable that constitutes a monetary obligation resulting from sales, lease, or service provision contracts.
Article 12.
Right to payment of funds credited in a bank account The establishment of a security right over a receivable that has as its object the payment of funds credited in a bank account is not obstructed by any agreement between the guarantor and the bank that limits in any way the right of the former to constitute a security right.
Article 13.
Negotiable instruments
The security right that has as its object a negotiable instrument covers the assets subject to the right incorporated in the instrument.
CHAPTER III
EFFECTIVENESS OF THE SECURITY RIGHT AGAINST THIRD PARTIES
Article 14.
Effectiveness vis-à-vis third parties
1. The security right is opposable to third parties:
a) If the initial registration information relating to it is introduced into the public access register; b) If the secured creditor is in possession of the assets that are its object; c) If it is registered in a specialized register referring to certain types of assets or rights.
2. For the purposes of the provisions of this article, competing creditors are considered third parties.
Article 15.
Effectiveness against third parties of the security right over goods derived from the asset subject to security
1. The effectiveness against third parties of the security right extends automatically, without the need for any other act, to rights over goods derived from the asset subject to the security, in accordance with the provisions of Article 6, provided that these consist of currency, receivables, negotiable instruments, or rights to the payment of funds credited in a bank account.
2. When, in accordance with the provisions of Article 6, the security right affects goods derived from the asset subject to the security other than those referred to in the previous paragraph, the security right over such derived goods is effective against third parties:
a) For 20 days after its emergence; b) Subsequently, only if the security right over the derived goods becomes autonomously effective against third parties, through one of the modes referred to in Article 14, before the end of the period specified in the previous letter.
Article 16.
Effectiveness against third parties of the security right over goods incorporated into a mass of goods or into a product If a security right over corporeal movable assets is effective against third parties and the same converts, in accordance with Article 7, into a security right over a mass of goods or product, it automatically becomes effective against third parties, without the need for any additional act.
Article 17.
Effectiveness against third parties of security rights over goods that become components If any asset becomes a component and the security right over the asset is opposable to third parties at the time of integration, the security right continues to be effective against third parties after such integration.
Article 18.
Security rights over goods that become accessories If any asset becomes an accessory and the security right over the asset is opposable to third parties at the time of allocation to the principal asset, the security right continues to be effective against third parties after such allocation.
Article 19.
Financed acquisition security over consumer goods The financed acquisition security right over consumer goods is effective against third parties from the moment of its establishment, without the need for any other act, without prejudice to the provisions of paragraph 2 of Article 42.
Article 20.
Security rights over negotiable instruments
If the security right over a negotiable instrument is opposable to third parties, the security right that extends to the corporeal movable asset covered by the instrument, in conformity with Article 13, is equally effective against third parties.
CHAPTER IV
CENTRAL REGISTRY OF INFORMATION ON MOVABLE PROPERTY SECURITY
Section I
General Provision
Article 21.
Operation of the Central Registry of Information on Movable Property Security
1. The Central Bank of Timor-Leste (BCTL) installs, operates, and

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2. The Movable Security Interests Information Registration Centre is a public registration service, of an electronic and automated nature, made available through an online platform and intended to fulfill the functions provided for in this law.

3. The creation of the Movable Security Interests Information Registration Centre does not affect the attributions of other State services responsible for public registers established by law, nor the competences of their respective bodies.

4. The date on which the Movable Security Interests Information Registration Centre begins operation is communicated by circular issued by the BCTL.

Section II
Registration

Article 22.
Purpose, object and effects of registration

1. The Movable Security Interests Information Registration Centre aims to give publicity to the creation, modification and extinction of security rights by the grantor, giving them effectiveness against third parties through such publicity.

2. The registration of information consists of the simple storage and publication of information by the creditor regarding the security rights referred to therein, not being a constitutive act of the security right nor creating a presumption of its existence.

3. The storage and publication of information for registration submitted by the creditor is not preceded by nor dependent on any control of the legality, validity or effectiveness of the facts or documents that may be the origin of the security rights to which they refer.

4. The Movable Security Interests Information Registration Centre does not guarantee the accuracy, reliability, consistency or authenticity of the registered information, which is the exclusive responsibility of the creditor who inserted them.

Article 23.
Grantor's authorization for registration

1. The effectiveness of the registration, consisting in the opposability to third parties of the security right referred to in the information for registration, depends on the authorization of the grantor, given in writing.

2. The effectiveness of the registration of the alteration information that adds assets to the object of the security or prolongs the effectiveness period of the registration of the information also depends on the authorization of the grantor, given in writing.

3. The effectiveness of the registration of the alteration information that adds a grantor depends on the authorization, given in writing, of the added grantor.

4. Any of the authorizations referred to in the preceding paragraphs may be given before or after the registration of the information for registration to which it refers.

5. A security agreement reduced to writing is sufficient to satisfy the requirement of the grantor's authorization.

6. It is not required of the creditor who submits the information for registration to present the document proving the grantor's authorization.

Article 24.
Sufficiency of a single information for registration for multiple security rights

A single information for registration may simultaneously cover multiple security rights, arising from one or more security agreements.

Article 25.
Prior registration

The information for registration may be registered before the creation of the security right to which it refers, including before the conclusion of any security agreement.

Article 26.
Production of effectiveness of the registration of information

1. The registration of initial information or alteration information produces effects from the date and time when they become accessible, through search by any interested party, in the public access register.

2. The registration of cancellation information produces effects from the date and time when the information to which it refers ceases to be accessible, through search by any interested party, in the public access register.

Article 27.
Effectiveness period of the registration of information for registration

1. The registration of initial information is effective for the time set by the secured creditor in the corresponding field of the electronic form, and may not exceed five years.

2. The effectiveness period of the registration of initial information may be extended up to 90 days before its expiry, by submitting alteration information that indicates, in the corresponding field of the electronic form, the duration of the extension, which may not exceed the maximum duration of five years.

3. The effectiveness period may be extended more than once, without limit on extensions.

4. The registration of alteration information for extension of the initial period extends the effectiveness of the initial information from the moment when the current period would have expired if the alteration information had not been registered.

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Article 28.
Mandatory submission of alteration or cancellation information

1. The secured creditor must submit for registration alteration information that removes an asset from the description of the asset subject to the security whenever:

a) The grantor has not authorized the introduction of registration information relating to that asset and the secured creditor has been informed by him that he will not authorize such registration;

b) The grantor revokes the authorization previously given for the introduction of registration information relating to that asset, provided that no security agreement relating to that asset has been concluded; or

c) The security agreement to which the registered information refers has been modified so as to release that asset from the security right that affected it.

2. The secured creditor must submit for registration cancellation information whenever:

a) The registration of the initial information was not authorized by the grantor and the secured creditor has been informed by him that he will not authorize the registration of the initial information;

b) The grantor revokes the authorization previously given for the registration of initial information, provided that no security agreement has been concluded; or

c) The security right to which the information refers has been extinguished.

3. The secured creditor may not demand or accept any amount for compliance with the obligations imposed in letters a) and b) of paragraph 1 and letters a) and b) of paragraph 2.

4. If the conditions provided for in paragraphs 1 and 2 are met, the grantor may request the secured creditor, in writing, properly identifying himself and identifying the initial information in question, to submit for registration the appropriate alteration or cancellation information.

5. The secured creditor may not demand or accept any amount for satisfying the grantor's request made under the terms of the preceding paragraph.

Article 29.
Autonomous action for alteration or cancellation of registration

1. If the secured creditor does not comply with the grantor's request under the terms of paragraph 4 of the previous article within five business days after its receipt, the grantor may request the competent court to summon the secured creditor to register the alteration or cancellation information, within five business days.

2. The process is always of an urgent nature, preceding any other non-urgent judicial service, and must be decided in the first instance within a maximum period of 60 days.

3. The opposition is raised within 10 days and the lack of opposition determines the confession of the facts articulated in the request.

4. With the petition and the opposition, evidence is offered, and no more than three witnesses may be produced.

5. The testimonies are recorded if any of the parties has requested recording in the petition or in the opposition.

6. Once the opposition is presented, the production of the requested evidence or evidence determined ex officio by the judge proceeds, when necessary.

7. The final hearing may only be postponed, on a single occasion, in the case of lack of legal representative of any of the parties, and must take place within the five subsequent days.

8. The absence of any summoned person whose testimony is indispensable, as well as the need to carry out any evidentiary diligence during the hearing, only determines the suspension of the hearing at the appropriate time, with a date immediately set for its continuation.

9. From the decision rendered, an appeal of aggravation lies, with immediate elevation and in the same records, which has a merely devolutive effect.

10. In case of refusal or non-compliance with the summons within the period fixed by the court, the court may order the Movable Security Interests Information Registration Centre to register the alteration or cancellation information.

11. If the action is judged procedent, the responsibility for costs falls exclusively on the secured creditor.

Article 30.
Alteration or cancellation information not authorized

The effectiveness of the registration of alteration or cancellation information does not depend on the authorization of the secured creditor.

Article 31.
Data protection

1. When collecting or otherwise processing personal data for the purpose of introducing information for registration, the secured creditor only uses personal data strictly necessary for that purpose, obtaining them directly from the holder of the personal data in question or from a third party who has been duly authorized by that holder.

2. Secured creditors and the entity responsible for the Movable Security Interests Information Registration Centre must comply with and observe the legal regime applicable in matters of protection, processing and circulation of personal data, as well as the protection of privacy in the field of electronic communications.

Section III
Errors and alterations after registration

Article 32.
Errors in information for registration

1. When initial or alteration information contains an error in the identification of the grantor, its registration is only ineffective if the error is such that the information for registration cannot be found through a search using the correct identification of the grantor.

2. Errors in the initial or alteration information that do not relate to the identification of the grantor do not affect the effectiveness of the registration, unless they are capable of inducing materially relevant error in someone who acts with reasonable diligence when conducting a search in the public access register.

3. The error in the identification of a grantor does not entail the ineffectiveness of the registration of information with respect to another grantor correctly identified.

Article 33.
Alteration of the grantor's identification after registration of initial information

The alteration of the grantor's identification after the registration of the initial information does not affect its effectiveness, nor the priority derived from it.

Article 34.
Transmission of the asset subject to security after registration

The effectiveness against third parties and the priority of a security right resulting from the registration of the corresponding information are not affected by the transmission, after registration, of the asset subject to the security right, the security right continuing, notwithstanding the transmission, to encumber it, without prejudice to the provisions of Article 42.

Article 35.
Management of improper removals in the registration of information

1. The entity responsible for the Movable Security Interests Information Registration Centre must, ex officio and without delay, restore to the public access register any data that it has improperly removed from the registered information.

2. The entity responsible for the Movable Security Interests Information Registration Centre must send a copy of the registered information to anyone identified therein as grantor and secured creditor, within 10 business days after registration or restoration.

3. When, under paragraph 1, improperly removed data are restored, the affected information produces effects as if the removal had not occurred.

4. Without prejudice to the provisions of the preceding paragraph, the security right to which the affected information refers does not enjoy priority over the right of a competing creditor who has, in the meantime, been constituted on the same asset, provided that this creditor has acted relying on the results of a search carried out in the public access register before the restoration of the data provided for in paragraph 1 and did not have actual knowledge, at the time its right was constituted, of its improper removal.

Section IV
Organization of the Movable Security Interests Information Registration Centre and the public access register

Article 36.
Computerized registration system for information

1. The computerized registration system for movable security interests information is designed and operated in such a way as to ensure the automatic and immediate insertion of any information for registration as soon as the following conditions are met:

a) Correct completion of all mandatory information fields, through the electronic form;

b) Payment of the due fee.

2. If the information is not immediately registered under the terms of the preceding paragraph, the interested party may request the entity responsible for the Movable Security Interests Information Registration Centre to make the missing registration within five business days.

3. Once the period provided for in the preceding paragraph has expired, the interested party may, within 10 business days, request the competent court, under the terms provided for in Article 29, to summon the entity responsible for the Movable Security Interests Information Registration Centre to effect the registration within a maximum period of five business days.

Article 37.
Removal of information from the public access register and archiving

1. The entity responsible for the Movable Security Interests Information Registration Centre must remove from the public access register the information after the expiry of the effectiveness period of the introduction of the information for registration, in accordance with Article 27, or after the registration of cancellation information, in accordance with Article 28.

2. Except as provided in the preceding paragraph, the entity responsible for the Movable Security Interests Information Registration Centre may not remove from the public access register the information registered therein.

3. The entity responsible for the Movable Security Interests Information Registration Centre must archive the information removed from the public access register, in accordance with paragraph 1, for 21 years, in order to ensure its recoverability during that period.

Article 38.
Integrity of information in the public access register

1. Except as provided for in Articles 35 and 37, the entity responsible for the Movable Security Interests Information Registration Centre may not alter or remove from the public access register data contained in registered information.

2. The entity responsible for the Movable Security Interests Information Registration Centre must take all reasonable measures to preserve all information contained in the public access register and to reconstruct it in case of loss or damage.

CHAPTER V
PRIORITY OF THE SECURITY RIGHT

Article 39.
Scope of application

1. The provisions of this chapter only apply to priority relations between security rights and between these and other rights of third parties constituted by security agreement.

2. Priority relations between security rights constituted by security agreement and other security rights, notably rights constituted by force of law or judicial decision, are regulated by the law that specifically provides for them, without prejudice to the provisions of Article 44.

Article 40.
Concurrent security rights on the asset subject to security

Without prejudice to the provisions of Article 46, priority between concurrent security rights on the same asset subject to security is determined according to the following rules:

a) Between security rights that have become effective against third parties through the introduction of information for registration in the Movable Security Interests Information Registration Centre, priority is determined by the order of registration, regardless of the order of creation of the security rights; and

b) Between the security right that has become effective against third parties through registration and the security right that has become effective against third parties through possession, priority is determined by the order of registration or possession, whichever occurred first.

Article 41.
Concurrent security rights on assets derived from the asset subject to security

A security right on assets derived from the asset subject to security that is opposable to third parties under the terms of Article 15 has the same priority over a concurrent security right as the security right on the object from which they derive.

Article 42.
Concurrent security rights with rights of buyers or other acquirers or lessees

1. The security right effective against third parties continues to encumber the asset on which it falls when it is sold or transmitted by any other means or leased, being opposable to the buyer, acquirer or lessee, except when:

a) The secured creditor, by agreement, consents to the release of the asset subject to security;

b) The asset subject to security is sold, alienated or leased in the normal course of business of the seller, alienator or lessor, provided that, at the time of the conclusion of the sales contract or lease contract, the buyer or lessee did not have actual knowledge of the existence of the security.

2. Consumer goods are acquired or leased free of any purchase money security interest encumbering them, unless this becomes opposable to third parties, under the terms of Article 14, before the conclusion of the sales or lease contract, as the case may be.

Article 43.
Impact of the grantor's insolvency on the priority of a security right

A security right that, under this law, is opposable to third parties at the time of the opening of the grantor's insolvency proceedings continues to be opposable to third parties and maintains the priority it had before the opening of the insolvency proceedings, unless another credit has priority under the legal regime applicable in matters of insolvency.

Article 44.
Concurrent security rights with the right of the attaching creditor

1. If an attachment falls on the asset subject to security within the framework of an enforcement proceeding, the right of the creditor with an executive title enjoys priority over the right of the secured creditor if the attachment was carried out before the security right became effective against third parties.

2. If the security right becomes effective against third parties before or at the same time as the asset subject to security was attached, the security right enjoys priority, but this is limited to the highest of the following values:

a) The value of the credit granted by the secured creditor before he receives written notification that the asset subject to security has been attached; or

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b) The value of the credit that the secured creditor has promised to grant, under an irrevocable commitment to grant credit in a fixed amount or in an amount to be determined according to a specific formula, if the promise was made before the secured creditor receives written notification that the asset subject to security has been attached.

Article 45.
Conflict with rights subject to specialized registers

In the event of a conflict between rights subject to information registered in the Movable Security Interests Information Registration Centre and rights subject to specialized registration relating to certain types of movable property, the latter prevail, even if the registration is subsequent.

Article 46.
Purchase money security interest concurrent with security rights of another nature

A purchase money security interest has priority over a security right of another nature that competes with it constituted by the same grantor, provided that:

a) The creditor with purchase money security interest is in possession of the goods; or

b) The initial information relating to the purchase money security right is registered in the public access register within 15 days after the grantor has obtained possession of the goods.

Article 47.
Security right on component parts

The security right on component parts that becomes opposable to third parties under this law has priority over any security constituted on the immovable property:

a) When the security right under this law becomes opposable to third parties before the security constituted on the immovable property;

b) When the security right under this law becomes opposable to third parties before the installation of the component parts on the immovable property.

Article 48.
Security right on accessory thing

Without prejudice to the provisions of this law, a security right on an accessory thing that is opposable to third parties has priority over any security rights that affect the principal movable asset.

Article 49.
Future assets

The priority of a security right covers all assets described in the initial or alteration information registered in the public access register, even if they are assets that come into existence or are acquired by the grantor after registration.

Article 50.
Future obligations

Without prejudice to the provisions of Article 44, the priority of a security right benefits all secured obligations, including obligations constituted after the production of effects of the security right against third parties, whether future obligations or obligations resulting from advances of funds to which the creditor has committed in a previous credit granting contract.

Article 51.
Knowledge by the secured creditor of concurrent security rights

The priority of a security right constituted under this law is not affected by any knowledge that the secured creditor may have of a concurrent security right.

Article 52.
Security rights on negotiable instruments

1. The security right on a negotiable instrument that becomes opposable to third parties by possession of the same has priority over the security right on the same instrument that becomes opposable to third parties through the introduction of information for registration in the Movable Security Interests Information Registration Centre.

2. The negotiable instrument is transmitted free of the security rights that encumber it, including those referred to in information for registration introduced in the Movable Security Interests Information Registration Centre, if the acquirer takes possession thereof, upon payment, without knowledge that the transmission of the instrument violates the rights of the secured creditor under the security agreement.

Article 53.
Cash and funds credited to bank account

The acquirer who obtains possession of cash values or who receives a transfer of funds credited to a bank account acquires rights over the amount received, subject to no security right, unless he has actual knowledge that the transfer violates the rights of the secured creditor under the security agreement.

Article 54.
Priority of security right on assets covered by negotiable instruments

The security right on assets opposable to third parties by possession of the negotiable instrument incorporating the right to their delivery has priority over a concurrent security right opposable to third parties by any other method.

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CAPÍTULO VI
RIGHTS AND OBLIGATIONS OF THE PARTIES AND OF
OBLIGATED THIRD PARTIES

Article 55.
Obligation of the secured creditor to return the collateral With the extinction of the security interest, the secured creditor who is in possession of the collateral must return the collateral to the grantor or deliver it to the person designated by the grantor.

Article 56.
Right of the secured creditor to inspect the collateral The secured creditor who is not in possession of the collateral has the right to inspect it if it is in the possession of the grantor.

Article 57.
Right of the grantor to obtain information

1. Within 10 days of receiving a written request from the grantor to that effect, the secured creditor, except when it concerns the assignee of a definitive assignment of credit without a security function, must send to the grantor, to the address specified in the request:
   a) A statement of the obligation that is secured; and b) An updated description of the collateral.
2. The secured creditor may charge a commercially reasonable amount for each response to a request, in accordance with the preceding paragraph, considering the resources used in preparing and issuing the requested statement and documents.

Article 58.
Bank accounts

1. The creation of a security interest over a right to payment of funds credited in a bank account:
   a) Does not affect the rights and obligations of the bank without its consent; and b) Does not oblige the bank to provide the secured creditor or other third parties with any information about the bank account.
2. Any set-off rights of the bank over a bank account opened by it are not affected by any security interest that it itself holds over the right to payment of funds credited in the same account.

CAPÍTULO VII
ENFORCEMENT OF THE SECURITY INTEREST

Article 59.
Rights after default

1. In the event of default, the grantor and the secured creditor have the right to exercise:
   a) Any right provided for in the provisions of this chapter; b) Any other right provided for in the security agreement or in any legal provisions, except to the extent that it is incompatible with the provisions of this law.
2. Before default, the grantor or the debtor may not unilaterally waive any of their rights arising from the provisions of this chapter, and contracts or clauses that in any way limit or exclude them are null and void.

Article 60.
Judicial and extrajudicial enforcement

1. The secured creditor may exercise its rights after default through judicial means, in accordance with the provisions of this chapter and the Code of Civil Procedure.
2. The secured creditor may also exercise its rights after default through extrajudicial means, provided that it does so in compliance with the provisions of this chapter.
3. The security agreement that meets the requirements set forth in Article 5 and has been registered in accordance with this law constitutes an executive title for the delivery of a specific thing, in accordance with and for the purposes of item c) of paragraph 1 of Article 669 of the Code of Civil Procedure, provided that the enforceable obligation is certain, liquid, and due.

Article 61.
Right of affected persons to terminate the enforcement of the security interest

1. The grantor, any other person with a right over the collateral, or the debtor has the right to terminate the enforcement of the security interest, by paying or fulfilling the entire secured obligation, including:
   a) The costs determined by the court, if the secured creditor has exercised its rights after default through a judicial process; and b) The reasonable cost of enforcing the security interest, if the secured creditor has exercised its rights after default through extrajudicial means.
2. The right to terminate enforcement may be exercised at any time until the first of the following events:

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a) The sale or transfer by other means, acquisition, or collection of the collateral by the secured creditor; or b) The conclusion of an agreement by the secured creditor for the sale or transfer by other means of the collateral.

Article 62.
Right of a senior secured creditor to assume enforcement

1. Notwithstanding the commencement of enforcement by another creditor, a secured creditor whose security interest has priority over that of the creditor who initiated the enforcement has the right to assume enforcement at any time, until the first of the following events:
   a) The sale or transfer by other means, acquisition, or collection of the collateral by the creditor who initiated the enforcement; or b) The conclusion of an agreement by that creditor for the sale or transfer by other means of the collateral.
2. The right of the senior secured creditor to assume enforcement includes the power to enforce by any means permitted to a secured creditor under this law.
3. This article does not apply if the secured creditor exercises its rights through judicial means.

Article 63.
Right of the secured creditor to take possession of the collateral

1. Without prejudice to the provisions of Articles 700 to 703 of the Code of Civil Procedure and the rights of whoever holds possession that must prevail, the secured creditor, in the event of default, has the right to take possession of the collateral.
2. The exercise of the right provided for in the preceding paragraph through extrajudicial means depends on the cumulative verification of the following conditions:
   a) The grantor having consented in writing that the secured creditor take possession of the collateral through extrajudicial means; b) The secured creditor having notified the grantor in writing and any person in possession of the collateral of the default and its intention to take possession thereof; and c) At the time the secured creditor attempts to take possession of the collateral, the possession can be carried out without the use of force.
3. The consent referred to in item a) of the preceding paragraph may be provided in the security agreement.
4. The notification referred to in item b) of paragraph 2 is not made if the collateral is perishable or susceptible to rapidly decreasing in value.
5. If a senior secured creditor is in possession of the collateral, a junior secured creditor does not have the right to take possession thereof.

Article 64.
Special procedure for appropriation after default

1. If the secured creditor has the right to take possession of the collateral after default, but its exercise depends on the use of force, the secured creditor may request the competent court to seize the collateral and deliver possession thereof to the secured creditor.
2. The petition referred to in the preceding paragraph must be accompanied by:
   a) The security agreement; b) Proof of registration; c) Any supplementary evidence necessary to demonstrate that the secured obligation is certain, liquid, and due; d) The name and contact information of the grantor; and e) Any elements necessary to locate and effect the seizure of the collateral.
3. Upon verification of the existence, validity, and efficacy of the executive title in the possession of the secured creditor, the court orders, without prior hearing of the grantor, the seizure and delivery of the collateral to the secured creditor within the time limit set by the court.
4. The court communicates the seizure and delivery order referred to in the preceding paragraph to the grantor at the time of seizure, or, if that is not possible, within a maximum of five working days, noting the legal time limit to file an objection, in accordance with the following paragraph.
5. The grantor may oppose the seizure and delivery by filing an objection, within 20 days from the communication by the court, following, with due adaptations, the provisions of Articles 694 to 696 of the Code of Civil Procedure.
6. If the order for seizure and delivery of the collateral to the secured creditor violates the possession or any right incompatible with the realization or scope of the diligence of which a non-party to the case is the holder, the injured party may assert such rights by filing third-party objections, following, with due adaptations, the provisions of Articles 286 to 294 of the Code of Civil Procedure.

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Article 65.
Integral parts

1. Without prejudice to the provisions of Article 63, the secured creditor, after default, may take possession of the collateral that is an integral part, removing the relevant integral part from the real property.
2. When removing the integral part, the secured creditor must do so in a manner that does not cause more damage to the real property than reasonably necessary.
3. If the secured creditor removes an integral part, in accordance with paragraph 1, it must reimburse any holder of a legitimate interest in the real property, other than the grantor, for any damage caused to them, except for damages resulting from a reduction in the value of the real property due to the absence of the integral part.
4. The amounts paid as compensation by the secured creditor acting with reasonable diligence are considered enforcement expenses.

Article 66.
Enforcement against accessory items

1. Without prejudice to the provisions of Article 63, the secured creditor, after default, may take possession of an accessory item that is the subject of the security interest, removing the accessory item from the principal property to which it has been attached.
2. The secured creditor must effect the possession referred to in the preceding paragraph in a manner that does not cause more damage to the principal property than reasonably necessary.
3. If the secured creditor removes an accessory item, in accordance with paragraph 1, it must reimburse any holder of a legitimate interest in the principal property, other than the grantor, for any damage caused, except for damage resulting from a reduction in the value of the principal property resulting from the removal of the accessory item.
4. The amounts paid as compensation by the secured creditor acting with reasonable diligence are considered enforcement expenses.

Article 67.
Right of the secured creditor to alienate the collateral

1. After default, the secured creditor has the right to sell or, by any other means, alienate, lease, or license the collateral.
2. If the secured creditor decides to exercise the right provided for in the preceding paragraph through judicial means, the Code of Civil Procedure applies.
3. If the secured creditor decides to exercise the right provided for in paragraph 1 through extrajudicial means, it has the power to determine the method, form, time, place, and other relevant aspects for the sale or other form of alienation, lease, or license, including the possibility to sell or alienate by any other means, lease, or license the collateral, by unit, by lots, or in its entirety.
4. If the secured creditor decides to exercise the right provided for in paragraph 1 through extrajudicial means, it must notify its intention in writing:
   a) To the grantor and the debtor; b) To any person with a right over the collateral who informs the secured creditor of such right, in writing, at least two days before the notification is sent to the grantor; c) To any other secured creditor who has obtained registration in the Movable Security Information Registry of information regarding a security interest over the collateral, at least two days before the notification is sent to the grantor; and d) To any other secured creditor who was in possession of the collateral when the secured creditor took possession thereof.
5. The notification referred to in the preceding paragraph must be made at least 20 days before the sale or other form of alienation, lease, or license and must contain:
   a) A description of the collateral; b) A statement of the amount necessary, at the time of notification, to satisfy the secured obligation, including interest and reasonable enforcement costs; c) A statement that the grantor, any other person with rights over the collateral, or the debtor has the right to terminate the enforcement process, as provided for in Article 61; and d) A statement of the date from which the collateral will be sold or otherwise alienated, leased, or licensed, or, in the case of a public auction, the date, place, and form of alienation.
6. The notification referred to in paragraph 4 is not made if the collateral is perishable or susceptible to rapidly decreasing in value.

Article 68.
Distribution of the proceeds from the alienation of the collateral and liability of the debtor for any remaining debt

1. If the secured creditor decides to exercise the right provided for in Article 67 through judicial means, the distribution of the proceeds from the sale or other form of alienation, lease, or license of the collateral is determined by the court, in accordance with the procedural rules in force, observing the provisions of Articles 39 to 54.
2. If the secured creditor decides to exercise the right provided for in Article 67 through extrajudicial means:
   a) The secured creditor who initiated the enforcement must apply the proceeds of the enforcement to the payment of the outstanding balance of the secured obligation, after deduction of the reasonably incurred enforcement expenses; b) Except in the cases provided for in the following item, the secured creditor who initiated the enforcement must deliver the remaining proceeds of the enforcement to any subordinate competing secured creditor who has previously notified it of its credit, up to the amount of that credit, and remit any remaining balance to the grantor; c) When there are two or more subordinate secured creditors who have notified the secured creditor who initiated the enforcement of the existence of their credit, and regardless of whether there is any dispute regarding the right or priority of any competing subordinate secured creditor, the secured creditor who initiated the enforcement must deposit any excess value in a credit institution to the order of the court, followed by distribution in accordance with the procedural rules in force, but observing the provisions of Articles 39 to 54.
3. The debtor remains liable for any amount that remains in debt after the application of the net proceeds of the enforcement to the payment of the secured obligation.

Article 69.
Acquisition of the collateral by the secured creditor

1. After default, the secured creditor may propose, in writing, the acquisition of one or more components of the collateral to satisfy the secured obligation in whole or in part.
2. The secured creditor must send the proposal:
   a) To the debtor and the grantor; b) To any person with a right over the collateral who informs the secured creditor of such right, in writing, at least two days before the proposal is sent to the grantor; c) To any other secured creditor who has obtained the submission of information for registration regarding the security interest over the collateral, at least two days before the proposal is sent to the grantor; and d) To any other secured creditor who was in possession of the collateral when the secured creditor took possession thereof.
3. The proposal includes:
   a) The indication of the amount necessary, at the time the proposal is submitted, to satisfy the secured obligation, including interest and reasonable enforcement costs, as well as the amount of the secured obligation that is proposed to be satisfied; b) A statement that the secured creditor intends to acquire the collateral described in the proposal to satisfy the secured obligation in whole or in part; c) A statement that the grantor, any other person with rights over the collateral, or the debtor has the right to terminate enforcement, as provided for in Article 61; d) The indication of the date from which the secured creditor will acquire the collateral.
4. If, within 10 days of receiving the proposal issued by the secured creditor, the latter does not receive any written objection from any person with the right to receive the proposal in accordance with paragraph 2, the collateral is considered, for all purposes, acquired by him.
5. The secured creditor who has submitted a proposal to acquire the collateral to satisfy the secured obligation in part only acquires the collateral if it receives written consent from all persons with the right to receive the proposal, in accordance with paragraph 2, within 45 days after each of them has received the proposal.
6. The grantor may request the secured creditor to submit a proposal in accordance with paragraph 1, and if the secured creditor accepts the grantor's request, it must proceed in accordance with paragraphs 1 to 5.

Article 70.
Acquired rights over the collateral

1. If the secured creditor resorts to judicial means to sell or otherwise alienate the collateral, the respective buyer or transferee acquires the collateral, subject to or free of existing encumbrances, as determined by the court.
2. If the secured creditor sells or otherwise alienates the collateral through extrajudicial means, the buyer or transferee acquires the grantor's right over the collateral free of the rights of the enforcing secured creditor and any other competing creditor, except for rights that have priority over the right of the enforcing secured creditor.
3. If the secured creditor leases or licenses the collateral through extrajudicial means, the lessee or license holder has the right to the benefit of the lease or license during its validity period, but their right is not enforceable against creditors with rights that have priority over the right of the enforcing secured creditor.

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4. If the secured creditor sells or otherwise alienates, leases, or licenses the collateral without complying with the provisions of this chapter, the buyer or other acquirer, lessee, or licensee of the collateral acquires the rights or benefits described in paragraphs 2 and 3, provided that they did not have actual knowledge of a violation of the provisions of this chapter that materially prejudiced the rights of the grantor or another person.

Article 71.
Enforcement of security interests over receivables and credit and investment instruments

1. After default, the secured creditor with a security interest over a receivable, a credit instrument, a right to payment of funds credited in a bank account, or an investment instrument has the right to demand, at any time, as soon as the corresponding obligation becomes due, payment to the obligor of the receivable or credit instrument, to the bank in which the account of the funds credited therein is opened, or to the respective issuer of the investment instrument.
2. The secured creditor may exercise the collection right provided for in the preceding paragraph before default if the grantor consents.
3. The secured creditor who exercises the collection right in accordance with paragraphs 1 or 2 may also enforce any personal or proprietary right that secures or supports the satisfaction of the credit or right incorporated in the instrument that is the subject of the security interest.
4. If the security interest consists of the right to payment of funds credited in a bank account, the secured creditor may only collect or enforce its security interest by judicial order, unless otherwise agreed by the institution that received the deposit.
5. The collection right of the secured creditor, in accordance with paragraphs 1 to 4, is subject to the provisions of Article 58.

Article 72.
Collection of receivables by the assignee

1. In the case of a definitive assignment without a security function of a receivable, the assignee has the right to demand payment from the obligor at any time, as soon as the payment becomes due.
2. The assignee who exercises the collection right, in accordance with the preceding paragraph, also has the right to enforce any personal or proprietary right that secures or supports the satisfaction of the credit.
3. The collection right of the acquirer, in accordance with paragraphs 1 and 2, is subject to the provisions of Article 58.

CAPÍTULO VIII
TRANSITIONAL AND FINAL PROVISIONS

Article 73.
Operation of the Movable Security Information Registry

1. Without prejudice to the specific powers of the Government, the BCTL must issue, within a maximum of 180 days after the publication of this law, the regulations, instructions, and other acts necessary for its execution, namely for the purpose of installation, operation, and maintenance of the Movable Security Information Registry, including how the information for registration must be submitted and inserted into the public access registry and how searches can be performed.
2. The BCTL approves, within three (3) months from the date of entry into force of this law, a code of good practices to be observed by secured creditors regarding the protection, treatment, and circulation of personal data, in order to ensure an adequate level of personal data protection within the Movable Security Information Registry.

Article 74.
Promotion of the objectives of this law
The BCTL adopts the measures it deems appropriate to promote the development in Timor-Leste of markets and financing products that use movable property as collateral, within the limits of its attributions and legal powers.

Article 75.
Temporal application

1. This law applies to security interests created after its entry into force.
2. The security legal relationships existing at the date of entry into force of this law and any disputes regarding security interests created before that date are governed by the applicable prior legislation.
3. Without prejudice to the preceding paragraphs, the parties to security agreements existing at the date of entry into force of this law may agree to register them in the Movable Security Information Registry, from which date this law applies to them.

Article 76.
Subsidiary law
Omitted cases are subsidiarily governed by the Civil Code and the Code of Civil Procedure.

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Article 77
Entry into force

1. Without prejudice to the provisions of the following paragraph, this law enters into force one year after its publication.
2. Articles 73 and 74 enter into force the day following the publication of this law.
   Approved on June 17, 2025.
   The President of the National Parliament,
   Maria Fernanda Lay
   Promulgated on July 29, 2025
   Publish it.
   The President of the Republic,
   José Ramos-Horta