If you are a U.S. lender or business extending credit to a Mexican company, understanding how to secure your interest in Mexico is essential. A UCC‑1 filing in the U.S. does not protect your security interest in Mexico. Without taking the correct legal steps, your collateral could be exposed to other creditors—or even lost.
This guide explains:
- Why UCC filings don’t work in Mexico
- How to properly secure a pledge through Mexico’s RUG registry
- Best practices for cross‑border lending and secured transactions
Why UCC Filings Are Not Valid in Mexico
The UCC (Uniform Commercial Code) system in the U.S. allows creditors to file a UCC‑1 financing statement to give public notice of a security interest.
However, Mexico does not recognize UCC filings. Key reasons include:
- Jurisdiction Limitations – A UCC‑1 is only valid where it is filed, usually the debtor’s home state in the U.S.
- No Public Notice in Mexico – Mexican creditors do not check U.S. UCC databases, so your filing offers no protection there.
- Risk of Losing Priority – A Mexican creditor who files locally can obtain priority over your U.S. filing.
Bottom line: To protect your collateral in Mexico, you must use Mexican law and registries.
Meet the RUG: Mexico’s Answer to the UCC
The Registro Único de Garantías Mobiliarias (RUG) is Mexico’s electronic registry for movable asset security interests. Think of it as Mexico’s version of a UCC filing.
Key Benefits of the RUG System
- National, free, and online – File and search 24/7
- Immediate effect – Filings take effect instantly
- Notice-based – Only basic information is required; full contracts are not filed
- Priority by filing date – “First in time, first in right,” just like Article 9 of the UCC
Collateral You Can Secure Through RUG
- Inventory and equipment
- Accounts receivable
- Vehicles and machinery
- Certain intellectual property rights
Note: Real estate, vessels, and aircraft have separate registries and require additional filings.
Step‑by‑Step: How to Secure a Credit Transaction in Mexico
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Draft a Mexican non‑possessory pledge agreement
- Your U.S. contract alone is not enough; you need a Mexican‑law pledge agreement to be enforceable.
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File the security interest in RUG
- Foreign lenders must file through a Mexican attorney with a FIEL (e‑signature) credential.
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Search for existing liens
- Always search RUG and any pre‑2010 local registries to avoid conflicts with prior liens.
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Monitor and renew your filings
- RUG filings can expire if not renewed; track expiration dates to preserve priority.
Common Mistakes to Avoid
- Relying only on UCC‑1 filings – Offers zero protection in Mexico
- Skipping lien searches – Older liens may still be active in local registries
- Incorrect pledge documentation – Must comply with Mexican secured transactions law
- Missing asset‑specific registries – Boats, planes, and real estate require extra filings
Why Work with Attorney Pati Galarza?
Navigating cross‑border lending and secured transactions in Mexico requires local expertise. Attorney Pati Galarza specializes in:
- Drafting enforceable Mexican pledge agreements
- Filing and managing RUG registrations
- Performing lien searches and due diligence for U.S. and international lenders
By working with a qualified Mexican attorney, you ensure that your security interests are perfected and protected against third parties.
Take the Next Step to Secure Your Collateral in Mexico
Do not risk losing your priority because of a U.S.‑only filing.
Contact Pati Galarza today for assistance with:
- RUG filings
- Cross‑border loan structures
- Secured transactions in Mexico
Schedule a Consultation and protect your investment in Mexico the right way.