Do the Right Thing (for your duty of competency): Some Ethical and Practical Thoughts on "Notarization" in International Transactions

Abstract

International trade and the role of lawyers in international transactions have increased dramatically in the last few decades, and projections indicate even greater growth. To comply with their ethical and legal duties of competency in international transactions, lawyers must have a certain level of direct knowledge; lawyers do not comply with their duty of competency by hiring and blindly relying upon foreign counsel. There are too many cultural, linguistic, and legal differences between countries to justify a lawyer in relying exclusively on the knowledge of foreign lawyers (what we would call “indirect knowledge”).This article focuses on a frequently misunderstood area in which an international lawyer should have direct knowledge -- the authentication of documents by notaries either overseas when the document is to be used in the US (“inbound”) or in the US when the document will be sent overseas (“outbound”).The concept of a notary in civil law countries is quite different from that in the common law system. In civil law countries notaries are public officials, like US notaries, but their role as public officials is wider than US notaries because of their ability to draft public instruments (also called “authentic instruments”). Civil law notaries are also legal professionals who do not simply authenticate signatures on private instruments, they give impartial advice. Finally, the number of civil law notaries is radically smaller than the number in the US – for example, 8000 in Germany.Because of these differences, problems with regard to notarization can arise in either (i) “inbound” transactions, i.e. when a party is required to supply a document from a civil law country to be used in a US transaction (for example, a power of attorney from a resident in a civil law country) or (ii) in “outbound” transactions, i.e. when a party must supply a document from the US to be used in a civil law transaction (for example a document certifying that a US resident has been bequeathed real estate located in a civil law country).With regard to “notarization of documents,” the duty of competency in our view requires lawyers to know the important differences between civil law and common law notaries; the fact that notarization by a civil law notary may be time consuming, expensive, and even unnecessary for many US transactions; and practical ways to deal with notarization problems in inbound and outbound transactions.