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ABSTRACT (OECD PMR and Notaries):

The civil law notaries represent a particular case inside the professional services because they are delegated by the State to provide a public service within the administration of the Justice (their particular function is also recognised by the EU legislation). Notaries ensure the compliance with the law and the credibility and certainty of the public registers. Notaries can be seen as ex ante judges since the notarial authentication ensures that the content of the document complies with the law conferring to it probative and enforcement power. Besides underlining the particular functions of notaries as public officers, this paper analyses the features of the PMR indicator and highlights the possible constraints and biases of its criteria when applied to notarial services (considering the public services provided as delegated of the State and the benefits for the consumer). As it concerns notarial activity, the level of regulation (because of the nature of its public function as described above) should forcibly be higher than the other PMR analysed professions. Many criteria defined by the PMR indicator are, in this case, to be considered as a protection of the consumer rather than an obstacle to the proper functioning of the market (since the notarial service is offering a “public good”). Therefore, if we apply the PMR to the notarial profession, we highly risk depriving the community and citizens of the ex ante legal security (removing the protection especially to the vulnerable parties). If we compare the level of the notarial regulation (as expressed by the PMR) with some World Bank indicators, we can also observe an interesting aspect: “low level of regulation” does not seem to be more correlated with better quality and lower costs, while a “higher level of regulation” is more often associated with better performances in terms of quality, costs, and speediness of the procedures.

In particular, the author presented a regression analysis showing the following main points:

1) there is a trend of negative correlation between the level of regulation of notaries and the indicators of World Bank measuring time and procedures of real estate transfers (core activity of the civil law notaries). This means that at the increase of the regulation, notaries provider their services in a faster way and with less procedures.

2) There is a trend of positive correlation between level of regulation of notaries and the quality of real estate transfer. This means that at the increasing of notarial regulation, the quality of the real estate transfer (infrastructure and legal certainty) is increasing.

3) There is a more significant negative trend of correlation between level of regulation of notaries and the final cost paid by the consumer for the real estate transfer. This means that at the increasing of the notarial regulation, the cost paid by the consumer decreases.

Furthermore:

A) In order to show the comparison with other countries, aggregate scores (indicators about time, procedures, quality and cost) of countries adopting civil law notaries in real estate transfers, were compared with the score of countries adopting other systems. The comparison show average scores in favour of countries adopting civil law notaries for all the indicators.

B) As concerns compliance with FATF Anti-money laundering standards, countries adopting civil law notaries show better compliance than countries adopting other systems as concerns real estate transfers (moreover, there is a trend of positive correlation between AML compliance and level of notarial regulation) N.B. the analysis was made on a cluster of countries adopting "civil law notaries" (UINL) in the real estate transfer. Civil law notaries are legal experts who control, besides the identity of the party, the legal content of the transaction documents and take care of the whole process of the real estate transfer. On the other side, Notary Publics (typically used in common law jurisdiction) usually take care of the authentication of signature without providing legal advice and guaranteeing the compliance with the law of the legal content of the documents.