Amendment to Mexican Commerce Code Facilitates Registration of Liens Against Mobile Assets Located In Mexico

The Official Gazette of the Federation (the “Gazette”) published an amendment to the Mexican Commerce Code (Código de Comercio) by which foreign entities (and not only individuals) acting as pledgors who have not been previously recorded in the Public Registry of Commerce, may validly obtain a registration number from the Unique Registry of Mobile Asset Collateral (Registro Unico de Garantías Mobiliarias) (“RUG”), under which first priority liens on mobile assets located in Mexican territory and documented through Mexican security documents (i.e. Floating Lien Pledge Agreements) will be recorded in the RUG perfecting such first priority lien for purposes of third parties.

Unlike in the past, from the date in which the amendment is mandatory, foreign entities intending to grant a security interests on mobile assets located in Mexico to secure obligations under credit or loan agreements or any other kind of agreement, will be able to create liens on those assets for the benefit of their creditors and such liens will be publicized to have effects against third parties.

The amendment took effect the day after its publication in the Gazette.

 

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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