The Uniform Commercial Code (“UCC”) is a United States code and, as such, it can only provide coverage in US territory. Mexico’s secured financing laws are more complex than the UCC in the U.S. First of all, there is no central registry in Mexico to search for liens filed against either company’s real property or assets, although Mexico implemented a system in 2010 called the RUG (Registro Unico de Garantias), where liens on movable property can be searched on a national level. The RUG system has limitations, but it is one tool we employ when searching for liens in Mexico. For instance, the RUG itself is only for liens on movable property, while liens on real estate can be filed in many different ways, including at the Public Registries. Recently more Mexican registries are requiring lien filers to file at the RUG, and are not providing lien searches, but are referring requestors to search at the RUG. In the case of Mexico, liens and pledges are recorded in the domicile of the asset, property or borrower. Since there are limitations on the information/searches we have access to, for high dollar or high risk transactions, we would recommend conducting a full due diligence search through our correspondent law firm.
Searching for liens at the RUG is relatively easy and fast; it is helpful to have the person’s full name, or the company’s exact name or registration number. We typically search multiple ways to ensure we capture any liens.
To provide the most comprehensive publicly available information, IBCF recommends searches in three locations – (1) in the Public Registry (where the company is recorded). Liens against the corporation’s assets, and pledged against money borrowed could be registered in the Public Registry of Commerce, and/or (2) liens on movable property can be recorded in the RUG (Registro Unico de Garantias), and/or (3) a “lien/litigation search”, a search which comprises other public sources/databases where liens, judgments and bankruptcies might be recorded. For example, the Diario Oficial, where all legal notices should be published, is included in this search. Please note that the turnaround time varies upon locale. Once we have confirmed the company location, we can then give a better estimate of how long it would take to receive the information.
Please note that perfecting or registering liens on moveable property in Mexico requires that the lien documents conform to Mexican Commercial Code, and are written in Spanish. All search results will be received in Spanish. In cases where the lender is in the U.S. and the collateral is in Mexico, we recommend attorney review by our Mexican counsel to ensure the lender’s rights are protected in Mexico.
Please consult our specialists to find out more about how we can help you with lien searches and the Mexican Commercial Code. Don’t forget that IBCF offers official translations from Spanish to English and English to Spanish, a service which is integral to these transactions.
For additional information, please contact us and a corporate specialist will contact you shortly.