Issue 4, March 2013
Francesca Giannoni-Crystal, Vice-Chair of the Europe Committee
responsible for publications, and Guest...
Issue 4 Page 2
© 2013 ABA all rights reserved.
EUROPE UPDATE
About the Europe Committee
The Europe Committee seeks to enga...
Issue 4 Page 3
© 2013 ABA all rights reserved.
DISCLAIMER: The materials and information in this
newsletter do not constit...
EUROPE UPDATE
Issue 4 Page 4
© 2013 ABA all rights reserved.
A Call for a 21st Century Review Aimed at
Legitimizing Docume...
EUROPE UPDATE
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© 2013 ABA all rights reserved.
It seems perhaps not a difficult challenge, but if you
consid...
EUROPE UPDATE
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© 2013 ABA all rights reserved.
Excerpt from
Do the Right Thing (for your duty of
competency)...
EUROPE UPDATE
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© 2013 ABA all rights reserved.
example, less than 5,000 notaries in Italy, 3,000 in
Spain, 9...
EUROPE UPDATE
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© 2013 ABA all rights reserved.
Signature Verification and Attestation—
Context and Framework...
EUROPE UPDATE
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© 2013 ABA all rights reserved.
notary public, who only verifies a signer’s identity,
interve...
EUROPE UPDATE
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© 2013 ABA all rights reserved.
Uniform Law Commissioners in 1999, has been the
basis of leg...
EUROPE UPDATE
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© 2013 ABA all rights reserved.
contemplates within its definition of permissible
“consular ...
EUROPE UPDATE
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© 2013 ABA all rights reserved.
attestation of signatures to a limited caste of individuals
...
EUROPE UPDATE
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© 2013 ABA all rights reserved.
consular intercourse to deem that such persons may
attest si...
EUROPE UPDATE
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© 2013 ABA all rights reserved.
in the foreign jurisdiction, and (2) the notarial act is to
...
EUROPE UPDATE
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© 2013 ABA all rights reserved.
French Notaries
by Stéphane de Navacelle
The attributions of...
EUROPE UPDATE
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© 2013 ABA all rights reserved.
to them. Violation of the notary-client privilege rule is a
...
EUROPE UPDATE
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© 2013 ABA all rights reserved.
Competition with Lawyers
New possibilities for lawyers have ...
EUROPE UPDATE
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© 2013 ABA all rights reserved.
draftsperson, representing the interests of all the
parties ...
EUROPE UPDATE
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many ways with those performed by an American
lawyer, e.g. l...
EUROPE UPDATE
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allow notaries to also be admitted as attorneys. Two
states ...
EUROPE UPDATE
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UK. The cost of a real estate transaction in Germany is
also...
EUROPE UPDATE
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documents because in the common law tradition notaries
usual...
EUROPE UPDATE
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functions and powers equivalent to those accorded to
native ...
EUROPE UPDATE
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© 2013 ABA all rights reserved.
addition to the maker’s signature, the validation of a
notar...
ABA Section of International Law
ABA Section of International Law
ABA Section of International Law
ABA Section of International Law
ABA Section of International Law
ABA Section of International Law
ABA Section of International Law
ABA Section of International Law
ABA Section of International Law
ABA Section of International Law
ABA Section of International Law
ABA Section of International Law
ABA Section of International Law
ABA Section of International Law
ABA Section of International Law
ABA Section of International Law
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ABA Section of International Law

  1. 1. Issue 4, March 2013 Francesca Giannoni-Crystal, Vice-Chair of the Europe Committee responsible for publications, and Guest Editor Werner Kranenburg (Europe Committee Vice-Chair for Policy), bring to publication this fourth issue of EUROPE UPDATE, the “hot topics” newsletter of our Europe Committee of the American Bar Association’s Section of International Law. This issue presents materials on notaries and verification of signatures in cross-border practice, with a view to law reform discussion, taking up a proposal of the US Lawyers Practice Abroad Committee and extending it to incorporate consideration of notarial practices in various common and civil law jurisdictions, with attention to the Hague Apostille Convention and the Vienna Convention on Consular Relations. The members of our Europe Committee working group on notaries have found the comparative and international aspects of this project informative, as well as the contact with representatives of the Uniform Law Commission, the US State Department, the US Lawyers Practicing Abroad Committee and the leadership of our Section. We hope that you do as well, and take them as inspiration for further Europe Committee initiatives. Look for our Europe Committee leadership and members at the upcoming Washington, DC April 2013 meeting of our Section. Our Committee contemplates a committee dinner, and a committee breakfast, followed by an in- person Committee business meeting, that members not in Washington may join by conference telephone. Time and bridge number information are distributed through the Europe Committee listserve. Except for April, look for our monthly calls the first Tuesday of each month at 11 am Washington, DC/5 pm Paris time. We warmly welcome outreach from Europe Committee members who would like support in becoming more active volunteers in the work of our Committee. Patrick Del Duca, Florian Jörg, Europe Committee Co-Chairs Message from the Europe Committee A Note from the Editors © 2013 ABA all rights reserved. This issue highlights the work of our Committee’s policy group on notarization of signatures, convened under the leadership of Europe Committee Vice-Chair and Policy Officer Werner Kranenburg. It also serves as Continuing Legal Education material for the panel presentation at the Section of International Law Washington DC 2013 Spring meeting on notaries and cross-border practice. Look for further issues of our Europe Committee’s HOT TOPICS NEWSLETTER on subjects such as the Europe/China direct investment, European financial regulatory developments, and European debt restructuring. We welcome our Europe Committee members who wish to step forward as guest editors to organize further issues such as this one and others posted on the Europe Committee website. Francesca Giannoni-Crystal (fgiannoni-crystal@cgcfirm.com), Michael L. Balistreri (michael.balistreri@rhi.com), Editors CROSS-BORDER SIGNATURE VERIFICATION – CIVIL LAW NOTARIES & NOTARIES PUBLIC – HAGUE APOSTILLE CONVENTION – VIENNA CONVENTION ON CONSULAR RELATIONS Contents Policy Proposal 3 Do the Right Thing (for your duty of competency): Some Ethical and Practical Thoughts on “Notarization” in International Transactions 6 Signature Verification and Attestation—Context and Frameworks for Harmonization of Law 8 Comments of the U.S. Department of State on the Proposal by the U.S. Lawyers Abroad Committee to Amend the 2010 Revised Uniform Law on Notarial Acts, October 26, 2012 13 French Notaries 15 The Notary Public in Italy 17 Interaction of Civil Law and Common Law Notaries: The Mexican Experience 21 Notaries Public in England and Wales 25 Recent German Case Law on the Usage of Swiss Notary Work Product in Germany 30 US Lawyers Abroad Committee Proposed Reform of Uniform Law On Notarial Acts 32 U.S. Lawyers Abroad Committee Memorandum to Joint Editorial Board Interim Survey Findings 35 Notaries in Germany 19 Notaries Public in Scotland 28 A Call for a 21st Century Review Aimed at Legitimizing Documents in a Global Economy 4 EUROPE UPDATE
  2. 2. Issue 4 Page 2 © 2013 ABA all rights reserved. EUROPE UPDATE About the Europe Committee The Europe Committee seeks to engage lawyers conducting practices that touch Europe, including the various European countries, the European Union, and the institutions of the Council of Europe. It nurtures a community of lawyers sophisticated in cross-border matters, comparative law, and the continuously emerging transnational law of Europe, public and private. The Europe Committee’s activities include the sponsorship of programs at the Section of International Law’s seasonal meetings, hot topics teleconferences and newsletter presentations by experts on emerging developments of European law, exploration of legal policy and law reform topics, contribution to the Year in Review issue of The International Lawyer, and co-sponsorship of Section of International Law standalone and other programming. The Europe Committee’s membership is its most important asset. We encourage all Committee members to be involved in Committee activities and to communicate freely suggestions and ideas. Upcoming Events Director Interview Lev Kubiak, Director National Intellectual Property Rights Coordination Center (IPR Center) Wednesday, April 24 Breakfast Program 8:00 - 8:50 International Protection of Trademarks: Not Just for IP Lawyers Wednesday, April 24 11:00 - 12:30 Europe Committee dinner Wednesday evening following the reception Europe Committee Business Meeting Thursday April 25, 9-10, Glacier Room Year of the Snake: China’s New Copyright & Patent Reforms Thursday, April 25, 4:30-6:00 European law on cross-border lending, as navigated in its emerging market jurisdictions Friday, April 26, 2:30 - 4:00 VOLUNTEER to be a REPORTER for the Europe Committee HOT TOPICS Newsletter special edition covering the spring meeting! Contact guest editor Nathan Rice or the Committee Co-Chairs Washington DC Spring 2013 Meeting April 23 – 27 Of interest to Europe Committee members Among the programs to be presented at the American Bar Association’s Section of International Law 2013 Spring Meeting in Washington, DC are the following programs of which the Europe Committee is the primary organizing committee: Harmonization of EU laws: the Rocky Road of Integration on Finance, Privacy and Culture Tuesday, April 23, 11:00 - 12:15 What's in a name? That which we call a Notary, is it the same? Tuesday, April 23, 2:45 - 4:00 Europe Committee “Fun” Event Tuesday evening, April 23, following the reception Committee Leadership 2012-2013 Co-Chairs Patrick Del Duca Florian S. Jörg Immediate Past Chair Jason Lindbloom Vice Chairs Mattia Colonnelli de Gasperis Alexandra Darraby Pat English Francesca Giannoni-Crystal Tanya Jaeger-deForas Werner R. Kranenburg Maura McLaughlin JLN Murthy Giuseppe Rosa Steering Committee Members Charles Marvin Nancy Matos Elizabeth O’Connor Craig Redinger Anders Reitz Marie Scott Larry White Wilhelm Ziegler Senior Advisors Violeta Balan Malika Levarlet DISCLAIMER The materials and information in this newsletter do not constitute legal advice. EUROPE UPDATE is a publication that is made available solely for informational purposes and should not be considered legal advice. The opinions and comments in EUROPE UPDATE are responsibility solely of each author/contributor and do not necessarily reflect the view of the ABA, its Section of International Law, or the Europe Committee.
  3. 3. Issue 4 Page 3 © 2013 ABA all rights reserved. DISCLAIMER: The materials and information in this newsletter do not constitute legal advice. EUROPE UPDATE is a publication made available solely for informational purposes and should not be considered legal advice. The opinions and comments in EUROPE UPDATE are those of its contributors and do not necessarily reflect any opinion of the ABA, their respective firms or the editors. respect of territorial sovereignty that prevented the initiative of the US Lawyers Practicing Abroad Committee, a fellow Section committee, from proceeding. With the benefit of the thoughtful contributions here presented, and as overviewed in the contribution of Patrick Del Duca in this newsletter, there are current opportunities for constructive law reform in respect of the Hague Apostille Convention, the Vienna Convention on Consular Relations, and most broadly the emerging international frameworks for treatment of electronic signatures, as well as model legislation directed specifically at American states. It is the current intention of our working group to prepare and to advance a proposed Report and Recommendation to the Council of our Section of International Law. The initial draft of the proposed Report would be based on Patrick Del Duca’s contribution, with the various further contributions in this newsletter serving as supporting documentation. An initial formulation of the recommendation follows: RESOLVED, that the American Bar Association supports modernization and simplification of the requirements and procedures related to verification of signatures in cross-border contexts. As we gather in Washington, DC at our Section’s 2013 spring meeting, we will find the occasion to confer, debate and refine this initial recommendation. On behalf of the Europe Committee as its policy officer, I take this opportunity to thank each of the contributors to the working group and this newsletter and to invite the readers of this newsletter to engage with our working group to carry forward the topic. Contributors this edition:Contributors this edition:Contributors this edition: Ann-Kristin Becker Law student Hamburg Prof. Nathan M. Crystal Charleston School of Law Charleston, SC Patrick Del Duca Zuber Lawler & Del Duca LLP Los Angeles Anna Engelhard-Caldwell Rechtsanwältin Hamburg Michael P. Clancy O.B.E. The Law Society of Scotland Edinburgh Francesca Giannoni-Crystal Crystal & Giannoni-Crystal, LLC New York City Islam Khan Barrister, Inner Temple London Werner R. Kranenburg Kranenburg London Dr Johannes Landbrecht LLB (London) Lalive Geneva Stéphane de Navacelle Navacelle Avocats Paris María Angélica Nieves S. Barrera, Siqueiros y Torres Landa Mexico City Alessandro Steinhaus Jenny & Partners Milan Linda Strite Murnane Franklin County Municipal Court Columbus, Ohio Juan Francisco Torres Landa R. Barrera, Siqueiros y Torres Landa Mexico City US Department of State US Lawyers Abroad Committee EUROPE UPDATE Since agreeing at the beginning of the current bar year to be the Europe Committee Vice-Chair serving as the Europe Committee’s policy officer, I have been gratified by the interest and cooperation of many Europe Committee members, the Europe Committee Co- Chairs Patrick Del Duca and Florian Jörg, and also of the policy officers of our Section Ron Bettauer and Yee Wah Chin, as I have attempted to carry forward the mandate entrusted to me. Having raised an initiative of the US Lawyers Practicing Abroad Committee of a few years ago that pertained to facilitation of the procedures for notarization of signatures across borders, but for US legal purposes, I promptly learned of a Europe Committee sponsored panel presentation at the upcoming spring meeting of our Section in Washington, DC. That panel, chaired by Europe Committee vice chair Francesca Giannoni-Crystal and Juan Francisco Torres Landa, a former Co- Chair of the Mexico Committee, will focus on differences in the conceptions of what a notary does in civil and common law systems. The working group in support of that panel quickly agreed to function as the core of the Europe Committee’s policy working group. This new working group then considered the issue of notarization of signatures in a wider context than that of the mere modification of model legislation on notaries public directed to the American states. Specifically, its input brought into focus the concerns of civil law jurisdictions in which notaries serve functions much broader than those of notaries public. In so doing, it also brought to the fore the concerns of Signature Attestation Policy Proposal by Werner R. Kranenburg
  4. 4. EUROPE UPDATE Issue 4 Page 4 © 2013 ABA all rights reserved. A Call for a 21st Century Review Aimed at Legitimizing Documents in a Global Economy by Linda Strite Murnane In February 2013, the United States Supreme Court heard arguments discussing the impact of the U.S. Constitution’s Fourth Amendment which prohibits unreasonable search and seizures, in the context of the taking of DNA evidence where there is not a reasonable suspicion of guilt and no warrant has been issued.(1) This case has little to do with notarizing documents or authenticating signatures, but it does bring into sharp focus the dilemma of determining how best to address scientific developments which were not necessarily part of the legal landscape at the time existing laws first came into existence. It is in that context that the ABA might benefit from looking at how the world has changed since the adoption of the Vienna Convention on Consular Relations of April 24, 1963, and the adoption of the Hague Convention of October 5, 1961, Abolishing the Requirement of Legalisation for Foreign Public Documents. If you consider that nearly half a century later, we are still functioning under the basic structures that existed before the information super highway changed all of our lives, and our legal practices forever, it becomes clear that the time is ripe for a review of the processes put in place to safeguard business, corporate, real property and personal transactions through uses of consular and notarial processes. The U.S. Lawyers Practicing Abroad Committee’s interest in this topic began in a response to a very basic need. As part of the increasingly global nature of law practice, law students have begun to participate globally in internships and externships in law firms, international organizations and other opportunities which are intended to make these students more responsive to the increasingly global demand for legal services which are not restricted to one’s own national borders. When those law students later apply for admission to a U.S. State bar, they are required to obtain an affidavit from their former international “employer” detailing what services they performed and whether they met at least minimum standards expected for a law student. Many of these interns are supervised in the international setting by attorneys or legal professionals whose law licenses, if they have one, or whose law credentials are not delivered from the United States. Those bar applicants who seek to take the New York State Bar exam, for example, are required to have that statement “notarized” under the U.S. definition of what a “notary” does. DISCLAIMER: The materials and information in this newsletter do not constitute legal advice. EUROPE UPDATE is a publication made available solely for informational purposes and should not be considered legal advice. The opinions and comments in EUROPE UPDATE are those of its contributors and do not necessarily reflect any opinion of the ABA, their respective firms or the editors. the ABA might benefit from looking at how the world has changed since the adoption of the Vienna Convention on Consular Relations of April 24, 1963, and the adoption of the Hague Convention of October 5, 1961, Abolishing the Requirement of Legalisation for Foreign Public Documents. If you consider that nearly half a century later, we are still functioning under the basic structures that existed before the information super highway changed all of our lives, and our legal practices forever, it becomes clear that the time is ripe for a review of the processes put in place to safeguard business, corporate, real property and personal transactions through uses of consular and notarial processes.
  5. 5. EUROPE UPDATE Issue 4 Page 5 © 2013 ABA all rights reserved. It seems perhaps not a difficult challenge, but if you consider that at an institution such as an international tribunal, there are as many as 80 to 90 interns, rotating approximately every three months, the “notary” requirement is fairly significant. When you add to this the consideration that obtaining an authenticated signature from a local “notissaren” could cost between 50 Euro and 300 Euro, a price which is not borne by the institution but by the supervising attorney in their personal capacity, the question arises whether this is potentially going to deter U.S. law students, or international entities from considering these students for these important educational opportunities. The concern was amplified when some international entities advised that they were unable to obtain appointments with U.S. Consulate notaries, whether due to security restrictions or due to workload limitations. This highlighted the “access to justice” issue which is linked to the existing international conventions on notarial acts. From these humble roots, the U.S. Lawyers Practicing Abroad Committee asked its members to detail any anecdotal evidence they might have of access to justice relating to the completion of business documents and records which might support a broader review of the existing conventions. The response was remarkable and provided extensive and detailed accounts of barriers to business and trade, and difficulties in serving clients whose interests are no longer confined within U.S. boundaries. When you consider that the existing conventions were adopted before the use of electronic and digital signatures, it seems that a comprehensive review of the tools considered necessary to safeguard the business, real property, and commercial transactions is more than overdue. The U.S. Lawyers Practicing Abroad Committee commends the work of the ABA Section of International Law’s Europe Committee and looks forward to productive dialogue on issues that will help to tackle this access to justice issue in the form of a policy resolution that addresses this issue for the 21st century. (1) Maryland v. Alonzo Jay King, Jr., 567 U.S. ___ (2012), oral arguments 27 Feb 2013. When you consider that the existing conventions were adopted before the use of electronic and digital signatures, it seems that a comprehensive review of the tools considered necessary to safeguard the business, real property, and commercial transactions is more than overdue. From these humble roots, the U.S. Lawyers Practicing Abroad Committee asked its members to detail any anecdotal evidence they might have of access to justice relating to the completion of business documents and records which might support a broader review of the existing conventions. The response was remarkable and provided extensive and detailed accounts of barriers to business and trade, and difficulties in serving clients whose interests are no longer confined within U.S. boundaries.
  6. 6. EUROPE UPDATE Issue 4 Page 6 © 2013 ABA all rights reserved. Excerpt from Do the Right Thing (for your duty of competency): Some Ethical and Practical Thoughts on “Notarization” in International Transactions, 12 (2) GLOBAL JURIST 2012, Topics, ISSN (Online) 1934-2640, DOI: 10.1515/1934- 2640.1412, available at http:// www.degruyter.com/view/j/gj.2012.12.issue- 2/1934-2640.1412/1934-2640.1412.xml reprinted with permission (citations omitted) by Nathan M. Crystal and Francesca Giannoni-Crystal It is beyond doubt, that, when civil law countries use the word “notary” (or notario, notaio, notaire, Notar, etc.), the reference is to something different from a US “notary.” The word “notary” comes from Latin “notarius,” which means “rapidly written”; in the Roman Republic a transcriber who used a fast method of writing (“notae”) was called notarius. During the Roman Empire, notaries came to be connected with high officials, and they acquired therefore a enlarged status as a prominent profession. Notaries maintained a certain importance in Continental Europe in the Middle Ages, and during the Renaissance they were central figures of the law. This is still the case in civil law countries, but not so in common law countries, particularly the US. In the US, notaries are not professionals. A notary public or public notary (or simply a “notary”) is a public official delegated by the state some authentication powers. In common law countries, generally notaries administer oaths and affirmations, receive statutory declarations, witness and authenticate documents, take acknowledgments of deeds, and do other activities depending on the jurisdiction. In the US notaries are appointed by government authorities for a limited term (called “commission”). Unlike other common countries where the number of notaries is insignificant (e.g., 740 notaries in England), in the US the number is enormous (4.5 million). Indeed, in the US notaries are widely used for routine transactions. While in England and in other common law countries notaries are generally lawyers and must go through a special training, in the US notaries are predominantly lay people, who, depending on the jurisdiction, may or may not be required to attend a brief training seminar. In the US notaries are prohibited to practice law; lawyers, however, are allowed to be notaries. In civil law countries notaries (“civil law” notaries or “Latin notaries” or simply “notaries”) are public officials like the US notaries, but they are also law- trained, highly respected legal professionals. Notaries are generally distinct from lawyers -- in some countries, like Italy, lawyers are even expressly prohibited from being notaries; there are exceptions, however, notably Germany. Civil law notaries have generally the same or greater prestige than attorneys in the US. In addition, however, they enjoy a reputation of neutrality -- unknown to attorneys -- that can be compared to that of an ADR neutral. The requirements to become a civil law notary are quite extensive. Generally notaries attend the same law school as future lawyers and judges, but in some countries (e.g., Argentina), notaries attend a specific law school. After law school, notaries typically go through a period of training (e.g., 18 months in Italy, 2 years in France) with a notary official and take a highly selective state examination; only those ranking at the top become notaries because generally the number of notaries for a territory (“district”) is established by law. As a result, the number of notaries is quite low; for DISCLAIMER: The materials and information in this newsletter do not constitute legal advice. EUROPE UPDATE is a publication made available solely for informational purposes and should not be considered legal advice. The opinions and comments in EUROPE UPDATE are those of its contributors and do not necessarily reflect any opinion of the ABA, their respective firms or the editors. In the US, notaries are not professionals. . . . Civil law notaries participate substantively in transactions, while the role of their US counterparts is formal.
  7. 7. EUROPE UPDATE Issue 4 Page 7 © 2013 ABA all rights reserved. example, less than 5,000 notaries in Italy, 3,000 in Spain, 9,000 in France, 8,000 in Germany. Civil law notaries participate substantively in transactions, while the role of their US counterparts is formal. By law, civil law notaries generally must be present and authenticate property transfers, formation and incorporation of companies, bank loan contracts, donations of assets, drafting of wills, and many commercial transactions. In some countries the role of notaries might be greater. Civil law notaries are public officials. Their role as public officials, however, is wider than that of US notaries because of their ability to draft public instruments (also called “authentic instruments”). US notaries cannot issue public instruments, except in Louisiana and Puerto Rico, which have a civil law tradition, and in Florida and Alabama, which passed special statutes to this effect. By contrast, with some exceptions, the public instrument is the typical product of civil law notaries. A public instrument is a document that is drafted entirely by the notary. A public instrument has high probative value of the authorship of the document, of the parties’ declarations, and of the other facts that the notary certifies as happening in front of him. In addition, a public instrument has the “privileged enforceability . . . of a definitive judgment,” meaning that in case of a breach of an obligation by a party, the other party may start an enforcement procedure without waiting for a court decision on the breach. Moreover, in a few countries, public instruments are the only documents that can be entered into public registries. Public instruments are stored by the notary and generally are available to whomever requests them (hence the name of “public”). Besides issuing public instruments, civil law notaries authenticate private documents (“authenticated instruments”). An authenticated instrument is a written private document that is signed by its authors in front of a public official (in this case a notary) who certifies their identities after obtaining proper documentation. An authenticated instrument, like a public instrument, has a high probative value but only as to the identity of the signors. With some exceptions a private authenticated instrument can also be entered in the public registries. While a civil law authenticated instrument is essentially the same as a notarized document in the US, the participation of civil law notaries makes the document more persuasive. Civil law notaries as public officials are considered custodians of the “public trust” (or “legal certainty” or “authenticity”). As a result, the verification of parties’ identity and of powers of attorney is generally lengthier than in the US. In addition, because civil law notaries are also legal professionals, they have the mission to give legal advice. Notaries’ legal advice must be impartial. Civil law notaries, therefore, do not simply authenticate the signatures on a private instrument, they read the text, explain the legal consequences, and give impartial advice. Civil law notaries as public officials are considered custodians of the “public trust” (or “legal certainty” or “authenticity”). . . . Civil law notaries, therefore, do not simply authenticate the signatures on a private instrument, they read the text, explain the legal consequences, and give impartial advice. US notaries cannot issue public instruments, except in Louisiana and Puerto Rico, which have a civil law tradition, and in Florida and Alabama, which passed special statutes to this effect. A public instrument has high probative value of the authorship of the document, of the parties’ declarations, and of the other facts that the notary certifies as happening in front of him.
  8. 8. EUROPE UPDATE Issue 4 Page 8 © 2013 ABA all rights reserved. Signature Verification and Attestation— Context and Frameworks for Harmonization of Law by Patrick Del Duca As economic activities migrate into the cloud and across borders, verification of the identity of a signer, together with attestation of that verification in a form acceptable in jurisdictions outside that of the country of attestation, holds ever-increasing importance. Continued economic globalization and the evolution of cloud-based technology merit ongoing re-examination of the legal frameworks supporting verification and attestation. American Bar Association policy The American Bar Association’s House of Delegates recognized the value of such re-examination in 2011, when it endorsed the Uniform Law Commission’s Revised Uniform Law on Notarial Acts, which was promulgated for consideration by state legislatures in 2010. Likewise in 2011, the American Bar Association’s House of Delegates adopted a policy for the promotion of efforts to improve the legal frameworks globally for the conduct of secured lending, a subject matter with respect to which the formalities in many jurisdictions dealing with the identity of a signer can obstruct the efficient conduct of secured lending. The American Bar Association has the opportunity to adopt further policy statements to support update of the legal frameworks for the verification and attestation of signatures across borders. Common law notary public, civil law notary, and treaty regimes National legal systems have long contemplated verification of the identity of a signer, and attestation of that verification for subsequent use, through intervention of an individual exercising governmental authority. Within the United States, this is the predominant role of a notary public. Within civil law systems, such attestation is an important aspect of the role of a civil law notary. In each instance the verification of identity is accomplished predominantly by the attesting authority’s examination of identity documents presented at the time of signature. Legislation defines the figure of the verifying and attesting authority, and its obligations and powers. Treaties – notably the Hague Convention of October 5, 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents and the Vienna Convention on Consular Relations of April 24, 1963 – supplement private international law norms dealing with the significance of attestation of a signature’s verification outside the territory of the attesting authority. In civil law countries, notaries have additional responsibilities, typically to determine that the parties understand the significance of their legal act and that it is drafted in technically correct fashion. Generally the qualifications of a civil law notary, the hurdles to become a civil law notary, and the costs imposed on those who use a civil law notary’s services (often excise taxes as well as charges for professional services) are much greater than those associated with the limited services afforded by a notary public. Because of the public faith accorded to an act prepared before a civil law notary, their work deters and mitigates potential litigation more than when a DISCLAIMER: The materials and information in this newsletter do not constitute legal advice. EUROPE UPDATE is a publication made available solely for informational purposes and should not be considered legal advice. The opinions and comments in EUROPE UPDATE are those of its contributors and do not necessarily reflect any opinion of the ABA, their respective firms or the editors. Treaties – notably the Hague Convention of October 5, 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents and the Vienna Convention on Consular Relations of April 24, 1963 – supplement private international law norms dealing with the significance of attestation of a signature’s verification outside the territory of the attesting authority.
  9. 9. EUROPE UPDATE Issue 4 Page 9 © 2013 ABA all rights reserved. notary public, who only verifies a signer’s identity, intervenes. In many instances, a civil law notary’s involvement and the purposes served by that involvement extend well beyond the simple verification of the identity of a signer and the attestation of the fact of such verification.(1) By way of example, public recordation of documents conveying interests in real property in the United States generally requires notarized signatures. The notary public’s role with respect to such documents is simply to verify the identity of the signer and to attest in writing that person’s signature. Notarization is required to record a document, but does not necessarily determine ownership, which may be determined by unrecorded documents or other circumstances. In contrast, in a civil law jurisdiction, the signature of conveyance documentation prepared by, and in the presence of, a civil law notary is generally necessary to transfer ownership of interests in real property. In addition to assuring that a transfer of ownership occurs, the civil law notary must determine that the documentation is legally correct, assure that the parties understand the transaction that the documentation purports to effect, verify the identities of the signers of any documents, and attest to such verification. Obviously, civil law notaries receive substantially greater compensation than notary publics because of their more extensive responsibilities. In essence, the role of the civil law notary, while frontloading costs of effecting a transaction, is intended, by assuring greater legal certainty, to reduce the ultimate costs associated with litigation subsequent to a purported transaction.(2) National legal systems vary in the determination of the purposes for which signatures verified through an exercise of public authority are required. In the model of the United States, such signatures are typically required in connection with conveyances of interests in real property to be recorded in the public records of property ownership and also in connection with oaths sworn for various purposes. Various civil law jurisdictions require verified signatures for additional kinds of acts, including for example the establishment of charters of corporate entities, donations, and oftentimes the granting of security interests, even in respect of prospective collateral that is not real property.(3) Electronic signatures The increasingly transnational marketplace does not confine itself to the established mechanisms of verification of the validity of signatures, and the attestation of such verification, through public authorities. Secure electronic signatures are increasingly employed for the conclusion of contracts of many types. Private sector, for-profit businesses such as Symantec, McAfee, Rightsignature, Echosign (Adobe), Docusign, Silanis Technology, Sertifi and others, provide the framework for assurance of the validity of the electronic signature, and, increasingly, legislation contemplates recognition for legal purposes of the validity of such electronic signatures. UNCITRAL’s 2001 Model Law on Electronic Signatures has found resonance in a still-limited, but growing number of countries. In the United States, the Uniform Electronic Transaction Act (“UETA”), promulgated by the The increasingly transnational marketplace does not confine itself to the established mechanisms of verification of the validity of signatures, and the attestation of such verification, through public authorities. . . . Private sector, for-profit businesses such as Symantec, McAfee, Rightsignature, Echosign (Adobe), Docusign, Silanis Technology, Sertifi and others, provide the framework for assurance of the validity of the electronic signature, and, increasingly, legislation contemplates recognition for legal purposes of the validity of such electronic signatures.
  10. 10. EUROPE UPDATE Issue 4 Page 10 © 2013 ABA all rights reserved. Uniform Law Commissioners in 1999, has been the basis of legislation in each of the states, except for Illinois, New York and Washington, which have legislated independently. UETA applies only where the parties agree to conduct a transaction by electronic means, and provides for the legal equivalence of electronic records and signatures to their paper counterparts. Specifically as to the activity of notaries public, UETA removes the stamp/seal requirements, but does not eliminate the other requirements of notarization, such as presence of the notary in the room with the person signing the document or verification of the person’s identity. Further, the federal Electronic Signatures in Global and National Commerce Act (“ESIGN”), adopted in 2000, provides that “a signature, contract, or other record … may not be denied legal effect, validity, or enforceability solely because it is in electronic form” and a contract may not be denied legal effect, validity, or enforceability “solely because an electronic signature or electronic record was used in its formation.” As under UETA, ESIGN allows electronic signatures of notaries to be given the same effect as manual signatures provided that they conform with other relevant norms. The European Union legislation analogous to ESIGN is Directive 1999/93/EC of the European Parliament and of the Council of December 13, 1999 on a Community framework for electronic signatures. International channels of signature recognition Movements of persons, goods and services, and capital across borders have long presented the challenge of how to provide and recognize attestations of the validity of signatures across borders. In addition to the “full faith and credit” model of the United States, and the European Union model of harmonization through directives and regulations, several channels exist for recognition by one jurisdiction of an attestation of the verification of the identity of a signer in connection with a signature abroad. Treaties The Hague Convention of October 5, 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents (the “Hague Apostille Convention”), widely ratified, contemplates recognition of the attestation of signatures. Its mechanism for such recognition involves an apostille. The apostille is a certification by a national governmental authority, recognized pursuant to the treaty, of the validity of the attestation of a signature by a relevant authority of that country. Through the Hague Convention, an attestation of a signature by a California notary public, for example, can be recognized in France or Mexico, both countries along with the United States that have ratified the Hague Convention. The attestation is presented to the relevant French or Mexican authorities together with an apostille, in the form specified by the treaty, pursuant to which one of the American authorities recognized by the treaty, namely the California Secretary of State, affirms that the California notary public is indeed in good standing and pursuant to relevant law, able to verify the identity of the signer and attest that such person has indeed provided the relevant signature in the notary public’s presence. Foreigners, by virtue of unfamiliarity with domestic law and practices, as well as perhaps barriers of language and reluctance of their home jurisdiction to accept acts of other legal systems, may not readily make use of the mechanisms of a legal system for attestation of signatures in instances when such an attestation is required for purposes of their home jurisdiction. Recognizing this reality, the Vienna Convention on Consular Relations of April 24, 1963, widely ratified, In addition to the “full faith and credit” model of the United States, and the European Union model of harmonization through directives and regulations, several channels exist for recognition by one jurisdiction of an attestation of the verification of the identity of a signer in connection with a signature abroad.
  11. 11. EUROPE UPDATE Issue 4 Page 11 © 2013 ABA all rights reserved. contemplates within its definition of permissible “consular intercourse” that consular officials may within consular premises attest the validity of signatures for purposes of their country’s legal system. In general, within the legal systems of the states that have ratified this treaty, the treaty trumps provisions of law that would accord a monopoly on such attestation to domestic legal actors or that would define the activity of such attestation by non-domestic legal actors as an infringement on territorial sovereignty. Private international law mechanisms Non-treaty mechanisms complement the Hague Apostille Convention and the Vienna Consular Relations Convention in respect of recognition of extraterritorial attestations of signatures. So-called “legalization” of a signature may be accomplished outside the Hague Apostille Convention by certification of an attestation by a foreign ministry official of the country in which the signature is made and attested, subsequently further attested by a consular official in that country of the country in which the attestation is to be used. Thus, for example, Canada is one prominent country that has not ratified the Hague Apostille Convention, and accordingly as a precondition to the use within Mexico of an attestation of the validity of a signature accomplished in Canada, Mexico requires “legalization” of signatures granted in Canada, first through attestation by a Canadian official within its foreign ministry and then by a Mexican consular official in Canada. There are further paths to the recognition of attestations of signatures across jurisdictions. In the United States, the full faith and credit clause of its federal constitution is the basis for recognition of an attestation of a signature by a notary public of one jurisdiction in any of the other jurisdictions in the United States. Further, the national legal systems of civil law jurisdictions with some frequency determine that an act by a notary of another jurisdiction is appropriate for use within the national legal system. Subsumed within acts accepted of broad reach, e.g. the recognition of acts of conveyance of corporate ownership interests, may be attestation of a signature. Thus for example, a variety of acts of notaries of Switzerland’s German-language cantons are routinely recognized in Germany, although such recognition has been litigated. In the United States, Louisiana by virtue of its roots in the French legal system has “civil law notaries” with some power to draft documents, Puerto Rico with roots in the Spanish Civil law system has civil law notaries who must be trained as lawyers, and Alabama and Florida have adopted statutes establishing the figure of a “civil law notary”, intended to be accorded attributes sufficient to enable such a civil law notary’s acts to be recognized as equivalent to those of notaries in civil law jurisdictions abroad, even without reliance on the Hague Apostille Convention. They follow the Model Civil Law Notary Act of the National Association of Civil Law Notaries, founded in 1998. Civil law jurisdictions outside the United States may be more likely to recognize the acts, including attestation of the verification of the identity of a signer, of “civil law notaries” from these jurisdictions of the United States, even outside the Hague Apostille Convention, than they would acts of the, to them unfamiliar and limited, figure of the notary public. Law reform opportunities In regard to whose attestations of signatures might be accorded significance, arguments that rigidities of territorial sovereignty and professional monopoly well- served the interests of legal certainty have clear historical justification. In a world of restricted communications, isolated legal systems, and limited literacy even among merchants, restriction of Further, the national legal systems of civil law jurisdictions with some frequency determine that an act by a notary of another jurisdiction is appropriate for use within the national legal system.
  12. 12. EUROPE UPDATE Issue 4 Page 12 © 2013 ABA all rights reserved. attestation of signatures to a limited caste of individuals exercising public authority, and further limiting extraterritorial use of such attestations to controls exercised through diplomatic frameworks based on concepts of territorial sovereignty, may have made eminent sense. However, in the current globalized economy, such limitations are increasingly subject to debate as burdens on economic activity and perhaps as restraints on trade. The question is whether the restrictions serve a purpose that outweighs the associated burden. Although the model of territorial monopoly for a civil law notary is argued to be critical to assuring the full panoply of notarial services and the associated benefits, this argument is not readily sustainable in respect of the narrow function of the verification of signatures and the attestation of such verification. Indeed, Mexico is an example of a civil law country that features the civil law notary in the classic sense, but also the figure of corredores publicos, whose role is more narrowly limited, principally to the verification of signatures and the attestation of that verification. Further, France since 2011 has contemplated the acte d’avocat, involving mere verification and attestation of signatures by a lawyer, formerly exclusive province of a notaire. In the age of the cloud, limitation of the attestation of signatures to those exercising public authority, and restriction of the right to attest signatures by territory, each appear as potentially outmoded concepts. A contemporary approach would eliminate the notion of territoriality, simultaneously allowing co-existence and equality of public and private attestations of the verification of a signature. A number of legal instruments, including model legislation and treaties, would be the target of reform efforts to achieve such an approach. United States Within the United States, the Revised Uniform Law on Notarial Acts of the Uniform Law Commission and the Model Civil Law Notary Act of the National Association of Civil Law Notaries would be focuses. The Revised Uniform Law on Notarial Acts might be explored as one instrument into which to incorporate a 2009 proposal of the US Lawyers Abroad Committee of the American Bar Association’s Section of International Law, namely the concept that a lawyer in good standing be authorized to verify and to attest the verification of a signature for purposes of the jurisdiction in which the lawyer is admitted to practice, such faculty to be a complement to the action of notaries. Although not incorporated in the 2010 text of the Revised Uniform Law on Notarial Acts, the concept of mutual recognition of signature attestation services, without regard to the seat from which they are rendered, would echo results achieved in the areas of corporate law and the Uniform Commercial Code through harmonization of choice of law rules and mutual recognition of entities. The Model Civil Law Notary Act has thus far found resonance in only two states. Its further refinement and the consequent further adoption of civil law notary statutes would be designed to increase, outside the framework of the Hague Apostille Convention, the recognition outside of the United States of attestations of signatures in the United States. Treaty reform A path more broadly to set aside parochial and outdated conceptions of sovereignty in multiple countries, would mean to address the issue of recognition of signatures and their attestations through the United Nations International Law Commission, with a view to supplementation or amendment of the Vienna Convention on Consular Relations. The focus of interest would be to incorporate concepts such as mutual recognition of the work of anyone authorized under domestic law to attest signatures, and broadening the concepts of Within the US, the Revised Uniform Law on Notarial Acts of the Uniform Law Commission and the Model Civil Law Notary Act of the National Association of Civil Law Notaries would be focuses of interest.
  13. 13. EUROPE UPDATE Issue 4 Page 13 © 2013 ABA all rights reserved. consular intercourse to deem that such persons may attest signatures for purposes of their own legal systems without regard to territorial location. Supranational and regional organizations Supranational and regional organizations will benefit from addressing the issue of frameworks for signature verification and attestation. The European Union, the Organisation pour l’Harmonisation en Afrique du Droit des Affaires (OHADA), and the Organization of American States are examples of such organizations that offer frameworks for relevant law reform. Conclusion The traditional concepts of notarial verification and attestation of signatures under domestic and international law merit re-examination for purposes of coordination with emerging technology and transnational commercial practices. Their supplementation with complementary mechanisms and their direct redefinition under domestic law, international treaties, customs and practices among merchants and relevant non-governmental organizations, as well as the law of supranational and regional organizations such as the European Union, offer the promise of lightening outmoded and unnecessary impediments to economic activity dependent on cost-effective and timely verification of signatures. (1) See Patrick Del Duca, To Create a Lien Priority: UCC Notice-Filing vs. Civil Law Notary Public Writing, 44 UNIFORM COMMERCIAL CODE LAW JOURNAL 33 (2011). (2) Id. (3) See Patrick Del Duca, CHOOSING THE LANGUAGE OF TRANSNATIONAL DEALS: PRACTICALITIES, POLICY AND LAW REFORM (American Bar Association, 2010). (4) OFFICIAL JOURNAL L13/12 (Jan. 19, 2000), as amended by Regulation (EC) no. 1137/2008 of the European Parliament and of the Council of October 22, 2008, L 311/1 (Nov. 21, 2008). Comments of the U.S. Department of State on the Proposal by the U.S. Lawyers Abroad Committee to Amend the 2010 Revised Uniform Law on Notarial Acts October 26, 2012 The U.S. Lawyers Abroad Committee has proposed an amendment to Section 14 (“Foreign Notarial Act”) of the 2010 Revised Uniform Law on Notarial Acts. The proposal purports to authorize the performance of notarial acts in a foreign jurisdiction by an individual who (1) is an attorney licensed to practice law, in good standing and in active status, in a state, district, or territory of the United States, and (2) is resident in the foreign jurisdiction where the notarial act is performed. Under this proposal, such a notarial act would have the same effect under the law of any state of the United States as if the act had been performed by a notarial officer of that state. The proposal is motivated by the perception that persons residing in foreign jurisdictions who require a notarial act that will have legal effect in the United States encounter difficulty in obtaining notarial services. The paper from the U.S. Lawyers Abroad Committee acknowledges two types of concerns that have been raised in response to the proposal. The first has to do with whether the U.S.-admitted attorney performing a notarial act in a foreign jurisdiction should be licensed as a notary in a U.S. state. The second has to do with the sovereignty of foreign States. This paper addresses that latter concern. The Committee suggests that concerns about infringement of foreign State sovereignty are satisfactorily addressed because (1) the U.S.-admitted attorney is lawfully resident and engaged in legal work DISCLAIMER: The materials and information in this newsletter do not constitute legal advice. EUROPE UPDATE is a publication made available solely for informational purposes and should not be considered legal advice. The opinions and comments in EUROPE UPDATE are those of its contributors and do not necessarily reflect any opinion of the ABA, their respective firms or the editors. The traditional concepts of notarial verification and attestation of signatures under domestic and international law merit re-examination for coordination with emerging technology and transnational commercial practices.
  14. 14. EUROPE UPDATE Issue 4 Page 14 © 2013 ABA all rights reserved. in the foreign jurisdiction, and (2) the notarial act is to have legal effect only in the United States, and not in the foreign jurisdiction. On these bases, it is asserted that “sovereignty concerns are substantially alleviated.” This, however, overlooks a fundamental reality: foreign States generally regulate who may perform notarial acts in their territory. One cannot assume that relevant laws or regulations would exempt individuals on the basis of their nationality, or because the notarial act is to have legal effect in a third country. The American Society of Notaries has published guidance to U.S. notaries on “Understanding Your Jurisdictional Limits” (see www.asnnotary.org/? form=jurisdictionissues). That guidance includes the following with regard to notarial acts performed in other U.S. states: One misperception we address regularly is the thought that a notary commissioned in state “A” may notarize while geographically located in state “B,” so long as the document is for use in state “A.” The problem here is that the notary does not hold a notarial commission from state “B,” therefore he/she is not authorized to notarize there regardless where the document is to be used. It doesn’t matter if the document(s) will be recorded in commissioning state “A,” or if the notary is performing services (signing agents, for example) on behalf of a company that is domiciled in state “B.” The notary may notarize only when he/she is within the geographic boundaries of commissioning state “A,” and could only notarize within the geographic boundaries of state “B” if he/she also held a notary commission issued by state “B.” We would submit that these concerns about jurisdictional limits of U.S. notaries apply equally, if not with greater force, when the notary is present in a foreign country as opposed to a different U.S. state. The State Department is concerned that the Committee’s proposal does not adequately take into account foreign State sovereignty concerns, and that if the proposal were implemented, individuals performing such notarial acts could be at risk of civil and/or perhaps criminal penalties for the performance of regulated services without authorization. Key points:  The sovereign authority to govern the performance of official acts such as notarials is possessed by each State within its jurisdiction and cannot be granted solely by a law enacted in another State.  A U.S. law that purports to authorize persons to perform official acts in foreign jurisdictions could be viewed as disregarding the sovereignty of foreign States.  Even if a person is authorized to perform legal services in a foreign State, it may be the case that such services do not include notarial functions.  Persons performing notarial acts in a foreign State without authorization under the law of the jurisdiction in which they are located may be in violation of the law and subject to civil or criminal sanction.  The Department of State is very concerned with the welfare of U.S. citizens overseas and cautions them to abide by local laws when traveling or residing overseas.  In States where the Vienna Convention on Consular Relations is in force, U.S. Consular Officers are authorized to perform notarial services in accordance with the Convention.  In States that are not Parties to the Convention, performance of notarial services is regulated by the domestic laws of those States.  Notarial services are available at U.S. Embassies and Consulates worldwide regardless of the nationality of the requestor and are offered by appointment or on a walk-in basis depending on location and workload.  In States where the Hague Apostille Convention is in force, locally notarized documents may be authenticated for use in the United States through the relatively simple Apostille process.
  15. 15. EUROPE UPDATE Issue 4 Page 15 © 2013 ABA all rights reserved. French Notaries by Stéphane de Navacelle The attributions of a French notary, a notaire, extend well beyond those of an American notary public. One key difference is that a French notary, much like a lawyer, has a duty to provide legal advice to his or her client. In 2012, the 9311 French notaries advised over 20 million clients, in connection with capital transactions exceeding €600 billion in aggregate, and drafted over four million actes authentiques (authentic documents). For some specific transactions, the involvement of a notary is mandatory, under penalty of nullity of the act, e.g., lease of an establishment that serves alcohol, a marriage contract, an act for the recognition of a child, specific wills, and mortgages on real property.(1) Notaries are also required to register acts constituting liens over real property in specific public registries (hypothèques), not as a condition of validity, but for purposes of opposability to third parties.(2) A French notary is a public officer and has a mission of public authority for authentication and conservation of acts. Notaries are located throughout the country according to a geographic distribution determined by the Minister of Justice and are paid emoluments for the creation of authentic acts by the notary’s clients at a rate set by the State.(3) In France, notaries are responsible for issuance of the “authentic instrument” pursuant to which debtors acknowledge the enforceability of claims against them that is a basis of a European Enforcement Order (“EEO”).(4) Authentication of documents The acte authentique (authentic document) is an act with the seal of the State that is authoritative over those who have signed it and for third parties, including government agencies. The authentication is highly effective because it is proof of date and content and can be challenged only if the validity of document is in question. In addition to drafting acts, notaries are responsible for the conservation of acts that are filed before them. Acts must be kept for a 75 year period or up to 25 years after the date of death of the parties.(5) French notaries are also required to issue interested persons, e.g. beneficiaries, enforceable copies and copies of acts that they have received. Notaries may not issue copies to any other third parties without a court order. Main areas of practice With respect to family law, the French notary’s role includes registering wills, authenticating important acts such as marriage contracts, settlements between spouses, significant donations, and recording inheritance agreements. They keep records of transactions and impartially advise all parties about estate planning issues. In the field of property law, French notaries also have a prominent role in land registration. In fact, only French notarial acts, authentic documents established by a competent administrative authority, and court orders, give rise to an opposable transfer of land. A notary is required to formalize negotiations for sale, including the signature of pre-contractual agreements, and of real property transactions. A French notary maintains records of real estate transactions, collects taxes (including on capital gains relating to the sale of real estate), and drafts deeds that serve as proof of ownership. With respect to company law, the role of a French notary includes the formalization of specific corporate resolutions. More generally, some contracts containing an obligation to pay a sum of money can be made enforceable if authenticated by a notary. In such instances, the creditor may be able to obtain payment without a court decision. Professional secrecy Much like lawyers, notaries are bound by a strict rule of notary-client privilege that extends to all matters assigned DISCLAIMER: The materials and information in this newsletter do not constitute legal advice. EUROPE UPDATE is a publication made available solely for informational purposes and should not be considered legal advice. The opinions and comments in EUROPE UPDATE are those of its contributors and do not necessarily reflect any opinion of the ABA, their respective firms or the editors. One key difference is that a French notary, much like a lawyer, has a duty to provide legal advice to his or her client.
  16. 16. EUROPE UPDATE Issue 4 Page 16 © 2013 ABA all rights reserved. to them. Violation of the notary-client privilege rule is a crime(6) and a violation of the rules of a professional ethics, which may lead to disciplinary sanctions.(7) However, in addition to the obligation to cooperate with tax authorities(8)and to respond to specific court orders, notaries must report to the national financial intelligence unit (TRACFIN) any suspicion of money laundering.(9) A notary may not inform a client that such a report was made. Rules of professional ethics In addition to specific constraints related to public service, notaries must comply with rules of professional ethics. A notary can be held civilly liable for damages resulting from any wrongdoing committed in the course of the notary’s functions.(10) A rule of solidarity among notaries applies to the civil liability. Payment made pursuant to a notary’s civil liability will be made by an institution funded by contributions by all French notaries.(11) A notary who fails to inform a client of uncertainties and dangerous aspects of a transaction may face disciplinary sanctions. If a notary commits a serious criminal offense, e.g., embezzlement or fraud, the notary will likely be more heavily sanctioned than an ordinary citizen.(12) Foreign authentic acts A foreign authentic act is generally presumed valid in France;(13) however, French law provides French notaries a monopoly on the authentication of acts in certain fields, e.g. mortgages on real property.(14) Outside such a monopoly, the foreign act produces its effects in France if the interest requiring authenticity is recognized in France. Moreover, whether the foreign act is enforceable in France is established by determining whether the foreign notary played a role in respect to the act analogous to the role that a French notary would have played respecting the act.(15) The European Regulation on EEOs provides a clear basis for recognition in France of a notarial act created in another EU Member State to constitute an EEO.(16) The EEO is an act drafted or registered as an authentic instrument, the authenticity of which attaches to the signature and the content of the act. The EEO is established by an authorized public authority or any other authority specifically authorized to do so. The European Regulation on EEOs precludes European Union Member States in which an act is proof of signature only from creating an EEO. This is consistent with the approach under French law that for a foreign act to be enforceable, the authentication must pertain to the content of the document as well as the signature. Documents drawn up by a French notary meet the definition of an EEO. A French notarial act in respect of an EEO can be enforced in any EU Member State. The creditor needs only to apply to the authorities in charge of enforcement in the Member State in which the creditor desires the act to be enforced. Electronic signatures Pursuant to the law of March 13, 2000 electronic documents can now serve as evidence, i.e., an electronic document can have the same probative force as a paper document. On August 10, 2005 a decree was issued to allow notaries to use electronic documents. The first authentic electronic act was signed in October 2008. In practice, the act is computerized, read on screen by the notary, signed by the parties on an electronic tablet and approved by a notaire with an encrypted USB key that contains identification and signature of the notaire. The parties must be present in person (or have sent a proxy itself notarized by a notaire) so the interest is only limited. Other than saving time and being more eco-friendly, this act does not change much. It is imaginable that, as long as the person can be clearly identified (thought a USB key or teleconference) that an authentic act could be signed from a distance. There is no indication that notaires, or anyone else in France, is in favor of such an evolution. Moreover, whether the foreign act is enforceable in France is established by determining whether the foreign notary played a role in respect to the act analogous to the role that a French notary would have played respecting the act.
  17. 17. EUROPE UPDATE Issue 4 Page 17 © 2013 ABA all rights reserved. Competition with Lawyers New possibilities for lawyers have increased competition between the two professions. Introduced by legislative reform in 2011,(17) an act of lawyer (acte d’avocat) is a document drafted and signed by the parties and countersigned by a lawyer. As such, it is an act that has enhanced probative force compared to a private agreement between parties. This act attaches probative value to the identity of the parties and is opposable to persons whose rights derive from the rights of the parties to the act, although unlike a signature before a US notary public, it is not opposable to third parties generally. (1) Art. 504, General Tax Code; Art. 265-2, 316, 971, 1394 and 1601-2, Civil Code; Art. L.143-20, al.2, Commercial Code. (2) Art. 4 of the Decree no. 55-22 of January 4, 1955. (3) Decree no. 78-262 of March 8, 1978. (4) Council Regulation (EC) no. 805/2004 of April 21, 2004. (5) Art L.211-4, Inheritance Code. (6) Art. 226-13, Criminal Code. (7) Art. 3.4, Règlement national et inter-cours du notariat approved by the Minister of Justice, July 21, 2011; Cass. Crim. March 3, 1938, DH 1938. 341. (8) Art. 806, General Tax Code. (9) The TRACFIN (Traitement du Renseignement et Action contre les Circuits FINanciers clandestins) is a national financial intelligence unit established in 1990. Upstream of the judicial phase, the unit’s main mission is to collect, analyze and investigate the “declarations of suspicions” reported by professionals required to do so, for the purpose of transmission to enforcement authorities. In addition, TRACFIN collects information, which is analyzed and investigated before being reported to enforcement authorities when a crime is thought to have been committed. (10) Art. 1382, Civil Code. (11) Decree no. 55-604 of May 20, 1955. (12) Art. 314-3 and 441-4 al. 3, Criminal Code. (13) The French authorities can require the legalization of foreign public documents to certify the authenticity. In this case, if a document originates from a country that has signed the Hague Convention of 5 October 1961 abolishing the requirement of legalization for foreign public documents, it will be accompanied by an apostille certification. (14) Art. 2128, Civil Code. (15) P. Callie, L’acte authentique établi à l’étranger, REVUE CRITIQUE DE DROIT INTERNATIONAL PRIVE 377 (2005). (16) European Community Regulation no. 805/2004 of April 21, 2004 on the European Enforcement Order. (17) Law no. 2011-331 of March 28, 2011. The Notary Public in Italy by Alessandro Steinhaus The role of an Italian notary, a notaio, is generally to avoid fraud in legal documents. The position of notaio accordingly incorporates elements of the work and duties both of a public official and of a specialized professional. The public function of the notaio includes the preparation of acts between living parties and of testamentary instruments, the conferral of public faith upon such documents, the custody of them, and the issuance of copies, certificates and extracts.(1) Because a notaio exercises the power of a public official, a document created with the participation of a notaio is a “public act”.(2) Such a writing provides conclusive evidence of the declarations of the parties and of the conclusion of the act so attested. That is, such a writing is invested with publica fides, the public trust resulting from the delegation by the State to the notaio of the power to authenticate and to certify. Only a charge of forgery (querela di falso) can overturn the probative value accorded to the source of the document, the creation of the document, and in particular the date and place in which the document was constituted.(3) The notaio thus plays an important role not only as to instances for which the law mandates the intervention of the notaio, such as donations, corporate and partnership charters, and corporate mergers,(4) but also in any instance where the evidentiary effects of a notaio’s participation in the conclusion of a writing may have value. This latter aspect of the activities of a notaio is closely associated with the elements of the notarial role pursuant to which the notaio functions as a professional service provider to the parties. In this regard, the notaio operates as an experienced DISCLAIMER: The materials and information in this newsletter do not constitute legal advice. EUROPE UPDATE is a publication made available solely for informational purposes and should not be considered legal advice. The opinions and comments in EUROPE UPDATE are those of its contributors and do not necessarily reflect any opinion of the ABA, their respective firms or the editors.
  18. 18. EUROPE UPDATE Issue 4 Page 18 © 2013 ABA all rights reserved. draftsperson, representing the interests of all the parties before the notaio, quite unlike the role of an attorney who would have a duty of loyalty only to the attorney’s specific client or clients.(5) The duty of the notaio is the creation of a document that reflects the will of all the parties in the best possible way and with the highest degree of legal certainty attainable.(6) The public and private dimensions of the notaio’s activity correspond to a notaio’s duty to provide service to anyone who requests it and the prohibition against providing service in respect of any document contrary to law, good custom, or public order.(7) Should registration of a foreign act within a notaio’s records be desired for evidentiary purposes, the notaio is required to make specific findings as to the act.(8) The notaio must ascertain whether the act has been received or authenticated by a suitable foreign equivalent, and that it is either a public act or an authenticated private writing (atto pubblico or scrittura privata autenticata). If not, the document will be deemed, and have the effect of, an unauthenticated private writing (scrittura privata non autenticata).(9) The notaio must determine that the parties’ intended use of the document requires its recordation in the notaio’s registry, and that it has been legalized.(10) The notaio must assess whether the act is contrary to public order or to any imperative norm of Italian law (ordine pubblico and norme di applicazione necessaria).(11) Legalization is not required if the law provides an exemption, e.g. for an act signed by an Italian diplomatic or consular representative, or when the act bears an apostille in conformity with the Hague Convention of October 5, 1961.(12) In conformity with the general rule that all notarial acts be drafted in Italian, the act must also be translated into Italian.(13) An exception pertains to German language acts to be used within Trentino-Alto Adige, an Italian Special Statute region within which there are provisions of constitutional status for bilingualism. In that region, the law allows the drafting of notarial acts in German as well as in Italian.(14) The same is true for French in the Special Statue region of Val d’Aosta. Registration in a notaio’s records of an act bearing a signature incorporated by a foreign authority, e.g. an American notary public, presents particular issues. Many legal scholars maintain that such authentication might be recognized as valid under Italian law only if it is ascertained that the powers and the operational procedures followed by such a foreign authority are analogous to those of a notaio under Italian law.(15) In this view, with the obvious challenges, it must be established that the foreign authority verified the identity of the parties while in the foreign authority’s presence, the foreign authority undertook the same control of the lawfulness of the act as would have a notaio, and finally, the foreign authority’s role in the foreign legal system is in the relevant instance equivalent to that of a notaio in Italy.(16) Thus, given the intrinsic differences between the roles and the activities of a notaio under Italian law and of an American notary public, the acceptance for purposes of Italian law of an act bearing a signature authenticated by an American notary public is not automatic; rather, a specific inquiry must be made for each case.(17) To assure the proficiency necessary in the provision of this public service, the license to be a notaio is accorded only to persons who have earned a law degree, completed an apprenticeship, and passed a competitive examination.(18) Each notaio is assigned to a specific notarial district and prohibited to practice outside it, in order to prevent competition.(19) This rule is linked with the numerical limitation on the notarial positions available for each district.(20) Although the notaio is a public official,(21) the notaio is not a public employee. The notaio accordingly receives no governmental salary, but rather is remunerated by the fees of the notaio’s clients, according to a fee schedule set by law.(22) In summary, the services of a notaio are required when the law mandates a notaio’s involvement for the underlying transaction to be valid. In other instances, a notaio’s services are highly beneficial even if not strictly required. The services of a notaio overlap in
  19. 19. EUROPE UPDATE Issue 4 Page 19 © 2013 ABA all rights reserved. many ways with those performed by an American lawyer, e.g. legal counseling related to transactions. A notaio will typically have knowledge and experience in a wide range of areas of private law, valuable in particular for the consummation of transnational legal transactions. Thus, collaboration with a notaio can often be useful in order to expand an American lawyer’s advocacy function, as the notaio can provide an impartial counsel to all the parties, while the lawyer can concurrently advocate on behalf of the lawyer’s specific client, which nonetheless benefits from the notarial impartiality. (1) Art. 1, Law no. 89 of February 16, 1913. (2) Id. (3) Art. 2700, Civil Code. (4) Articles. 782, 2328, 2504 and 2521 Civil Code. (5) Art. 47, Law no. 89 of February 16, 1913. See also G. Casu and G. Siccherio, LA LEGGE NOTARILE COMMENTATA 6-10 (2010). (6) G. Petrelli, L’indagine della volontà delle parti e la «sostanza» dell’atto pubblico notarile, RIVISTA DEL NOTARIATO, no. 1/2006. (7) Articles 27 and 28, Law no. 89 of February 16, 1913. (8) Art. 106 (4), id. (9) G. Casu and G. Siccherio, at 499-500. (10)Id. at 501. (11) As provided by Art. 28, Law no. 89 of February 16, 1913. See G. Casu and G. Siccherio at 502. (12) Id. (13) Art. 54, Law no. 89 of February 16, 1913. (14) Art. 30, Presidential Decree no. 574 of July 15, 1988. (15) A. Chianale, La forma degli atti autentici stranieri, RIVISTA DEL NOTARIATO, no. 1/2008. See also G. Petrelli, Pubblicità legale, apparenza e affidamento nel diritto internazionale privato, ATTI NOTARILI NEL DIRITTO COMUNITARIO INTERNAZIONALE, Vol. I, 321 (2011, UTET) and Ockl, Le scritture private autenticate provenienti dall’estero, GLI ATTI PROVENIENTI DALL’ESTERO. ATTI DEL CONVEGNO, Milan, 2007, at 35. (16) Id. at 38. See also Marcoz, Il deposito degli atti esteri, la legalizzazione e l’Apostille, GLI ATTI PROVENIENTI DALL’ESTERO. ATTI DEL CONVEGNO, Milan, 2007, at 63, and Scalamogna, Forma e pubblicità per gli atti formati all’estero relativi a società italiane, GLI ATTI PROVENIENTI DALL’ESTERO. ATTI DEL CONVEGNO, Milan, 2007, at 87 and 91. (17) A. Chianale, La forma degli atti autentici stranieri, in RIVISTA DEL NOTARIATO, no. 1/2008 (18) Art. 5, Law no. 89 of February 16, 1913. (19) Art. 27, id. (20) Art. 4, id. (21) Art. 1, id. (22) Art. 74, id. Notaries in Germany by Anna Engelhard-Caldwell German notaries (Notar if a man and Notarin if a woman) are highly regarded in Germany. They serve an essential public function as independent and neutral officers of the court system and a private function as impartial drafters of various agreements and testaments. In Germany other than state courts and federal courts, only German notaries are authorized to attest to the validity of signatures and to certify documents in Germany. Their actions are governed by law, not by the needs or demands of an individual or party. A German notarial attestation is considered to be an act of public authority and may be accomplished only by a German notary. If a US notary public or an American lawyer were to attest to the validity of a signature in Germany, German law would view such an attestation as a violation of international law principles pertaining to its territorial sovereignty. Articles 3 and 5 (f) of the Vienna Convention on Consular Relations identify notarization as a consular function limited to performance at consular posts. Any notarial activity, including attestation of the validity of a signature, performed by a notary public from a foreign country on German territory, is invalid. Indeed, anyone not a German notary who purports to attest to the validity of a signature in Germany would be subject to criminal charges pursuant to §132 of Germany’s Penal Code (Strafgesetzbuch, StGB) for the unauthorized assumption of authority. The ministries of justice in the various German states govern notaries. Notaries report to the presidents of the local superior court and of the court of appeals. Nine of the sixteen German states require that a notary be admitted as a notary only; while five states DISCLAIMER: The materials and information in this newsletter do not constitute legal advice. EUROPE UPDATE is a publication made available solely for informational purposes and should not be considered legal advice. The opinions and comments in EUROPE UPDATE are those of its contributors and do not necessarily reflect any opinion of the ABA, their respective firms or the editors.
  20. 20. EUROPE UPDATE Issue 4 Page 20 © 2013 ABA all rights reserved. allow notaries to also be admitted as attorneys. Two states have separate notarial territories that allow either attorney-notaries or only notaries who do not practice law. Those notaries admitted as attorney-notaries are required to strictly separate their impartial notary function from their attorney function. Notaries are appointed permanently but must resign by age seventy. The federal chamber of notaries (Bundesnotarkammer, BNotK) is a public entity. Its members are the twenty- one local notary chambers (Notarkammern) whose membership consists of the notaries admitted in their territories. The BNotK oversees several specific notarial registries, such as the central registry for care planning (Zentrales Vorsorgeregister), the central registry for testaments (Zentrales Testamentsregister), the site for electronic communication among notaries (NotarNet) and the German Notarinstitut (DNotI), as a member site. Notaries are especially qualified and experienced legal officers. They must have passed both the first and second legal state exams (qualification to serve as a lawyer and/or, in theory, as a judge), worked a minimum of five years as an attorney, successfully completed a comprehensive examination (since May 2011), and served 160 hours under an experienced notary. New notary appointments are dependent upon a vacancy in the particular geographic area where the notary resides and are subject to bidding in connection with proof of personal suitability and performance on the comprehensive examination. There are about 8,000 notaries in Germany. The geographic location of a notary’s office is regulated by law in order to assure that the entire population has convenient access. The average distance between any community and a notary’s office is seven to eight kilometers anywhere in Germany, including rural areas. Notarization is legally required in many instances to assure that transactions with far-reaching personal and economic consequences are undertaken only subject to, and with the benefit of, notarial supervision and intervention. It is the duty of a notary to fully explain the contents of an agreement or document to all parties. The notary has the duty to ascertain that all parties are treated fairly and to assure that inexperienced participants are not disadvantaged. The goal is to accomplish a balanced agreement in terms of rights and legal drafting options. By law, notaries are involved in real estate transactions, marriage and divorce contracts, adoption, last wills, gift contracts, estate distribution, the establishment of a corporation (Gründung einer Gesellschaft), commercial r e g i s t r y e n t r i e s (Handelsregisteranmeldung), living wills, health care power of attorneys, and various alternative dispute resolution vehicles such as divorce agreements, disputes among heirs, and arbitration. Notaries have the authority to render documents legally enforceable. For example, arbitration awards can be made executable by notarization, thus eliminating the need to have a court issue a writ of execution. Notaries can administer oaths, issue receipts and safeguard valuables. Due to the public character of the office, notaries are not allowed to refuse their services unless there is a convincing reason for the refusal. The fees for notarization are set in the law on costs of non-contentious jurisdiction (Kostenordnung, KostO; Gesetz über die Kosten in Angelegenheiten der Freiwilligen Gerichtsbarkeit). While the fees depend on the value of the transaction, they are lower than in France or the Nine of the sixteen German states require that a notary be admitted as a notary only; while five states allow notaries to also be admitted as attorneys. Two states have separate notarial territories that allow either attorney-notaries or only notaries who do not practice law. Those notaries admitted as attorney-notaries are required to strictly separate their impartial notary function from their attorney function.
  21. 21. EUROPE UPDATE Issue 4 Page 21 © 2013 ABA all rights reserved. UK. The cost of a real estate transaction in Germany is also low, comparing the notarial fees to the total cost of US real estate transactions, in which a real estate attorney (and not a notary) handles the closing and title insurance is customarily used. Professor Peter L. Murray of Harvard University was commissioned by the Council of EU Notaries (C.N.U.E.) to perform an independent study in 2007. His report stated that the average cost for a notary in a real estate transaction in Germany was less than 1% of the overall cost, and less than in the US. He found that Germany, when compared to the UK or the US, had a higher level of reliability concerning real estate registry entries, a lower likelihood of real estate litigation, and no need for the extra expense of title insurance. A simple attestation costs ten euros. Most routine attestations, such as the attestation for an entry in the merchants’ registry, cost twenty-one euros, or forty-two euros if the attestation is supplemented by legal consultation, document drafting and execution of entry. Overall, the German notarial system has been praised for a high level of transparency, quality of notarial documentation and low risk of litigation in connection with contract defects. Various German and European legal professionals dispute the World Bank’s view (published in Doing Business Reports) that notarial consultation, attestation and certification is no longer feasible and too expensive. The German consensus is that the lawfulness of a country is measured by the efficiency and validity of its infrastructure involving its citizens’ ability to enter into contracts which cannot be questioned and/or broken. Notaries are seen as an essential component in the prevention of unnecessary litigation and the reliability of public registries such as the merchants’ registry (Handelsregister) and real estate registries (Grundbuch). Good faith (guter Glaube) is viewed as the basis for good business, and German notaries foster the public’s expectation of good faith in the viability of contracts and registry entries. Interaction of Civil Law and Common Law Notaries: The Mexican Experience by Juan Francisco Torres Landa R. and María Angélica Nieves S. Here we consider how the differences between the Mexican civil law notary and the figure of notary public prevailing in the United States can trigger some difficulties in international transactions. We will list some examples of what happens in our daily activities where these differences materialize and what may be some practical recommendations. International Agreements: a. The Hague Apostille Convention (the “Convention”): The Hague Convention Abolishing the Requirement for Legalisation for Foreign Public Documents, known as the Apostille Convention, has 72 member countries. The Apostille replaces the formalities of a full legislative/domestic certification process and is only valid when issued by a competent authority in each member country. The Apostille is used to certify the authenticity of public documents, such as birth, marriage and death certificates, extracts from commercial registers, patents, court rulings, notarial acts and notarial attestation of signatures, and academic diplomas issued by public institutions, among other documents listed in Article 1 of the Convention. The Convention’s Article 3 states that the Apostille certifies: (i) the authenticity of the signature; (ii) the capacity in which the person signing the document has acted; and (iii) the identity of the seal or stamp which it bears. It does not extend so far as to attest to the contents in the document. The usual problem that emanates from the use of the Apostille is that the certification will not cover the actual contents of the document being certified. The difference is material when it comes to notarized DISCLAIMER: The materials and information in this newsletter do not constitute legal advice. EUROPE UPDATE is a publication made available solely for informational purposes and should not be considered legal advice. The opinions and comments in EUROPE UPDATE are those of its contributors and do not necessarily reflect any opinion of the ABA, their respective firms or the editors.
  22. 22. EUROPE UPDATE Issue 4 Page 22 © 2013 ABA all rights reserved. documents because in the common law tradition notaries usually do not certify anything but the identity of the persons appearing, whereas civil law notaries will actually certify the contents, accuracy and legality of the information included in the respective notarial act. Once this difference is recognized, the Mexican practitioner must assure that the inbound document meets the required certifications, even before the foreign notary provides the notarization, so that upon receipt in Mexico it will meet the local needs because the mere participation of the notary will likely not suffice. In the case of outbound documents, the foreign practitioners must know that the document will be lengthier and more complicated than usual, precisely due to the Mexican notary’s full involvement in the legal contents and accuracy. b. Protocol on Uniformity of Powers of Attorney which are to be Utilized Abroad (the “Protocol”): Countries that are parties to the Protocol are the Pan-American Union, including the United States, Brazil, Colombia, El Salvador, Mexico and Venezuela, but not Canada. The Protocol’s Article 1 sets out the procedure to be followed in the preparation of a power of attorney on behalf of a natural person, third person, or a judicial person. This article states that the official (notary, registrar, clerk of court, judge, or any other upon whom the law of the respective country confers such functions) must certify from personal knowledge the identity of the appearing party and also that party’s legal capacity to execute the relevant instrument. If the certification of the power of attorney involves a third party representing the signer, or a legal entity, then further requirements must be fulfilled, such as certifying that: (i) the third party has the authority to represent such legal entity; (ii) the legal entity’s name, organization, home office and legal existence; and (iii) that the purpose of the instrument is within the scope of purposes or activities of the legal entity. Moreover, the Protocol’s Article 5 which states that the powers granted in any of the member countries of the Pan-American Union, executed in accord with the rules of the Protocol, must be given full faith and credit, provided, however, that they are legalized in accordance with the special rules provided for that purpose. This provision also recognizes that notaries duly commissioned as such under the laws of their respective countries must be deemed to have authority to exercise The usual problem that emanates from the use of the Apostille is that the certification will not cover the actual contents of the document being certified. when it comes to notarized documents because in the common law tradition notaries usually do not certify anything but the identity of the persons appearing, whereas civil law notaries will actually certify the contents, accuracy and legality of the information included in the respective notarial act. Mexico’s Supreme Court issued a binding precedent in relation to the formal requirements that according to the Protocol should apply, . . . the powers granted by foreign companies in order to have effect in Mexico, must state that the notary’s function, or its equivalent, is not limited to mere references to the documentation used to grant the power of attorney, but rather also must involve the examination and legal assessment of the value of the documents shown to the notary, so that the notary’s statement thus constitutes a certification that the principal has sufficient authority to deliver the instrument, and thus meets the elements of the intrinsic validity of a power of attorney.
  23. 23. EUROPE UPDATE Issue 4 Page 23 © 2013 ABA all rights reserved. functions and powers equivalent to those accorded to native notaries by the laws and regulations of other member nations without prejudice. This last part can cause some problems, since, on this basis, the validity of an inbound power of attorney granted by a non-lawyer U.S. notary public in principle should not be challenged in Mexico. Due to the above, Mexico’s Supreme Court issued a binding precedent in relation to the formal requirements that according to the Protocol should apply, stating therein that the powers granted by foreign companies in order to have effect in Mexico, must state that the notary’s function, or its equivalent, is not limited to mere references to the documentation used to grant the power of attorney, but rather also must involve the examination and legal assessment of the value of the documents shown to the notary, so that the notary’s statement thus constitutes a certification that the principal has sufficient authority to deliver the instrument, and thus meets the elements of the intrinsic validity of a power of attorney.(1) The latter means that there is a further level of requirements for inbound powers of attorney, as absent the required certification on the corporate chain of authority, the document will either not be recognized or its validity will be questioned upon use in Mexico. In the case of outbound powers of attorney, the problems are less because the process in Mexico will involve full details of the corporate chain of authority and thus the other nations will, in most circumstances, not have a problem recognizing full compliance with both the Protocol and other associated requirements to confirm the authority of the person granting the power of attorney. c. Practical Problems in Notarial Practice of Mexico and Abroad: Concerning a legal entity, the Protocol requires that the power of attorney contain a statement as to the authority of the Board of Directors to grant powers of attorney, which is a problem for common law countries, since powers of attorney are less customarily used, and as such, company by-laws will rarely make specific reference to the authority of the board to grant powers of attorney. This limitation normally leads a common law notary to either omit the topic altogether (creating a problem for an inbound power of attorney) or to make legal conclusions concerning whether the by- laws express general powers sufficiently broad to grant the authority to the Board, which is something that a non-attorney notary public rarely does and is probably not legally trained to do so, or in some jurisdictions of the United States even prohibited from so doing. Another common practice in Mexico is that powers of attorney must make a specific reference to Federal Civil Code article 2554 in order to be valid and fully enforceable. This reference is sometimes objected to, as a foreign notary public in a common law jurisdiction is often reluctant to make a reference that may involve having to “certify” the law of Mexico, something such a notary cannot do. An additional event concerning which problems frequently arise pertains to wills. While in the United States, only the maker’s and the witness’ signatures are necessary to validate such an instrument, in Mexico, in the Protocol’s Article 5 the states that the powers granted in any of the member countries of the Pan-American Union, executed in accord with the rules of the Protocol, must be given full faith and credit, provided, however, that they are legalized in accordance with . . . for inbound powers of attorney, . . . absent the required certification on the corporate chain of authority, the document will either not be recognized or its validity will be questioned upon use in Mexico.
  24. 24. EUROPE UPDATE Issue 4 Page 24 © 2013 ABA all rights reserved. addition to the maker’s signature, the validation of a notary public is required. Moreover a will granted abroad will not be recognized in Mexico for in rem actions (probate proceedings related to real property) and thus a probate proceeding in which a Mexican court will ascertain the rightful heirs is required. A practical solution to this problem is the use of “mirror wills”, which are identical wills drafted in each country, so that the non recognition is not an issue, and each will only deals with the property pertaining to the country in which it is issued. Another example of problems that have arisen in Mexican notarial practice relates to Canada. As mentioned above, Canada is not a signatory to the Protocol. Therefore, for a Canadian individual or corporation to grant a power to be used in Mexico, there are two options: (i) grant the power of attorney in Canada in accord with the laws of the province in which the power is granted; or (ii) grant the power according to Mexican law, before an officer at the Mexican Embassy or Consulate. A further limitation is that Canada is also not a party to the Apostille Convention, which creates additional logistic problems that must be addressed. Because the Apostille is not an option in respect of Canada, such instruments must be legalized with the nearest Mexican Consulate. Mexico has asserted a reservation in respect of the Protocol, concerning the provisions of its Article 4, stating that “aliens who are required, for the performance of certain acts, to enter into the agreement or waiver referred to in Section I of Article 27 of the Political Constitution of the United Mexican States, must grant a special power of attorney, expressly including as one of its provisions the agreement and waiver above- mentioned.” This provision, also known as the “Calvo Clause”, is a required covenant that must be included in inbound powers of attorney for acts that involve the need to make such reservation, i.e., the purchase of real property, the creation of legal entities, etc., as otherwise the representation process will be limited in Mexico, and it will be necessary to re-do the power of attorney. In light of the foregoing, it is clear that the Convention and the Protocol have facilitated the notarization of documents, executed before foreign notaries for use in Mexico and vice-versa, however, numerous problems persist in practice. This situation merits an effort among countries to harmonize these differences and to facilitate international transactions among all countries, regardless of their legal system. Conclusions Having seen the significant differences between the notarial function of civil law and common law countries, it is important for lawyers to gather information and accumulate experience on the subject matter. In particular, practitioners must devise practical ways to deal with notarial problems that may arise in any type of international operation, either inbound or outbound. In our experience the conflicts that exist between notarial practices around the world cannot be ignored. Lawyers that work in cross-border transactions cannot overlook to recognize the complexities that the need for notarial instruments triggers. Anticipating those issues and working towards preventive solutions are most definitely advisable actions, as the consequences can be quite damaging if the conflicts materialize. (1) Binding precedent of Mexico’s Supreme Court of Justice no. 205452, June 1994 (Poderes otorgados por sociedades en el extranjero para surtir efectos en México. Requisitos formales que deben contener según el Artículo I del Protocolo sobre Uniformidad del Régimen Legal de los Poderes).. Canada is not a signatory to the Protocol. . . . for a Canadian . . . to grant a power to be used in Mexico, there are two options: (i) grant the power of attorney in Canada in accord with the laws of the province in which it is granted; or (ii) grant it according to Mexican law, before an officer at the Mexican Embassy or Consulate. Because the Apostille is not an option in . . . Canada, such instruments must be legalized with the nearest Mexican Consulate.

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