SECURITY OVER MOVABLES IN MEXICO
Contents
1. RUG permits the registration of an aviso preventivo a preventive notice that warns searchers of the intention to register a right shortly which will have a priority dating back to the time of the registration of the aviso The aviso is effective for only a short period As is apparent this arrangement is less flexible than that of the North American systems DR 2013 Universidad Nacional Aut noma de M xico Instituto de Investigaciones Juridicas Este libro forma parte del acervo de la Biblioteca Juridica Virtual del Instituto de Investigaciones Juridicas de la UNAM www juridicas unam mx http biblio juridicas unam mx 400 HARRY C SIGMAN On the other hand the RUG system provides more information to searchers and more certainty concerning the particular secured transaction but these benefits come at the price of the flexibility provided by the North American systems where the filing is effective to perfect with respect to one or more transactions limited not to a single underlying document but only by the collateral description The RUG registration provides a field for a statement of the maximum amount secured and currency The value of this field is far from clear and it may well function as a trap for the unwary secured creditor This is not a mandatory item and its voluntary nature is clearly labeled as such Moreover the form also calls for an indication whether or not the underly ing document foresees incrementos reducc2. de retenci n y otros prwilegios especiales conforme al C digo de Comer cto o las dem s leyes mercantiles rights arising under guaranty trust agreements rights of retention possessory liens and other special privileges in accor dance with the Code of Commerce and the other commercial laws These devices do not appear to be inapplicable to any particular type of personal property Registration in the RUG constitutes public notice for purposes of the RUG legislation and other legal regimes Moreover there is currently pending further legislation prepared by the Ministry of Economy to improve certain elements For example the cur DR 2013 Universidad Nacional Aut noma de M xico Instituto de Investigaciones Juridicas Este libro forma parte del acervo de la Biblioteca Juridica Virtual del Instituto de Investigaciones Juridicas de la UNAM www juridicas unam mx http biblio juridicas unam mx SECURITY OVER MOVABLES IN MEXICO 393 rent draft of the legislation adds a requirement of registration of sales of accounts n b the statement of motives refers to cesi n de cr ditos derechos de cobro incluyendo al factoraje financiero while the operative statutory text refers only to such financial factoring Current Mexican law art 426 of LGTOC provides that transmisi n de derechos de cr dito done with the purpose of financial factoring becomes effective against third persons upon notifica tion to the
3. Este libro forma parte del acervo de la Biblioteca Juridica Virtual del Instituto de Investigaciones Juridicas de la UNAM www juridicas unam mx http biblio juridicas unam mx SECURITY OVER MOVABLES IN MEXICO MEXICO S NEW REGISTRO UNICO DE GARANTIAS MOBILIARIAS RUG Harry C SIGMAN SUMMARY I Against this background let us consi der the rug Why do i think the rug is the best registry in la tin america II Some further details about the rug system particularly inscription of registrations ITI Some further details about the rug system particularly searching the record This paper is presented at the 16 Biennial Conference of the Internatio nal Academy of Commercial and Consumer Law generously hosted by the Universidad Nacional Aut noma de M xico This provides me the happy opportunity to publicize and praise the achievement by Mexico of the es tablishment of the RUG its single nationwide registry for security rights in movables organized and operated by the Secretar a de Econom a and which became operational in October 2010 The RUG is one of the best movables security registries functioning in the world The RUG is one of the two best registries in Latin America the other being that of Honduras which became operational effective January 2011 and is operated by the Chamber of Commerce of Tegucigalpa see http www garantiasmobiliarias hn It is searchable via the internet free of charge J D Har
4. account debtor without the need for a registration in any registry or a grant made before a fedatario p blico Also the proposed legislation may provide for registration against non Mexican entities that are not matricu lated under Mexican law The RUG is not presently well suited to deal with U S cross border financing of maquiladora production as the entity that ships the goods south and then receives the goods after processing in Mexico is the owner and if a legal person is not an acceptable grantor It is antici pated that this legislation will be adopted this coming December I AGAINST THIS BACKGROUND LET US CONSIDER THE RUG WHY DO I THINK THE RUG IS THE BEST REGISTRY IN LATIN AMERICA 1 The RUG is an all electronic system This avoids delays costs and risk of data entry or other error and other intervention by registry staff that inhere in systems involving paper regis trations This feature makes possible the speed low cost and other advan tages of the RUG Registrations are immediately effective and immediately indexed and searchable Experience in North America indicates that users migrate toward electronic filing when that is offered if the system design is user friendly and efficient Honduras has a well designed electronic system but is also designed to accept paper registrations 2 The RUG is available 24 7 for both searching and registering It provides registrants immediately upon registration with a certific
5. ally transmitted Anotaci n The Honduras system deals with the latter situation in a slightly different manner The judiciary does not have such a direct access to the system it is the debtor having obtained a cancellation order from a judge who submits the cancellation form DR 2013 Universidad Nacional Aut noma de M xico Instituto de Investigaciones Jur dicas Este libro forma parte del acervo de la Biblioteca Juridica Virtual del Instituto de Investigaciones Juridicas de la UNAM www juridicas unam mx http biblio juridicas unam mx SECURITY OVER MOVABLES IN MEXICO 395 With respect to searching the RUG there is no requirement that a searcher establish a legitimate interest in order to gain access to the RUG data as is the case in many land and other traditional registries includ ing some recently established movables security registries e g New Zealand and Australia 5 Searching and registering at the RUG are both FREE OF COST The government agency responsible for government revenues and for determination of fees charged for government services in Mexico in the registry context it is wise not to leave this matter to the registry itself so as to discourage empire building conducted a study that indicated that based on an all electronic system with minimal need for employees other than monitoring operations and occasional IT work and a few clerks to an swer telephone calls the incremental cost of a registr
6. ate of registration bearing a time stamp and electronic signatures of both the registrant and the RUG in a form admissible in court and a registration is immediately automatically indexed so as to become searchable immediately upon registration This speeds up credit decisions and funding in the mar ketplace In Honduras the registration is also immediately indexed and be comes immediately searchable The registrant obtains an acknowledgment DR 2013 Universidad Nacional Aut noma de M xico Instituto de Investigaciones Juridicas Este libro forma parte del acervo de la Biblioteca Juridica Virtual del Instituto de Investigaciones Juridicas de la UNAM www juridicas unam mx http biblio juridicas unam mx 394 HARRY C SIGMAN of the registration which includes the registered data the date and time of registration and the registration number assigned by the registry 3 The RUG provides a single nationwide secured transactions database nico is sometimes mistranslated as unique suggesting it is different from all others in this context it means sole or single the only one This feature avoids all the legal logistical and other issues which would otherwise result from having multiple registries by geographic subdivi sions or otherwise This was no mean feat prior to the initiation of the RUG there were 269 local registration databases and the average time for achievement of registration was 17 days These re
7. ation transaction was less than US 0 05 This left the capital cost of the software and hardware to create and operate the system which effectively the government decided to subsidize in order to achieve the goal of facilitating credit for sme s Pre viously fees were set by each Mexican State and were typically based on a percentage of the registered amount of the secured debt averaging 2 essentially imposing a tax on secured credit inconsistent with the goal of the reform to reduce the cost of credit Not charging a fee has the added benefit of eliminating the need to deal with collections and avoids the cost of building a financial element into the software for the system Charging a high amount whether as a flat fee or a percentage of the credit is likely to thwart the goal of increased availability of credit at lower cost as it of ten results in either the failure to register which then reduces the revenue anticipated by the government forcing the secured party to either deny or reduce the desired credit or to go forward on an unsecured basis Not charging a fee based on the secured amount also removes a justification for including a field in the registration data for the maximum secured amount whether mandatory or as in Mexico voluntary inclusion of which then requires provisions in the law regarding the consequences of inclusion or failure to include this data In contrast Guatemala imposes very high registration fees fi
8. cted and as to be expected the report identified many potential hits in this case a fairly common name produced thirteen potential hits Thus in virtually a matter of seconds or at most minutes much useful data could be obtained at no cost Also learned was that the system does not strip out accents t e DR 2013 Universidad Nacional Aut noma de M xico Instituto de Investigaciones Juridicas Este libro forma parte del acervo de la Biblioteca Juridica Virtual del Instituto de Investigaciones Juridicas de la UNAM www juridicas unam mx http biblio juridicas unam mx SECURITY OVER MOVABLES IN MEXICO 399 a search of Sanchez without an accent will produce different non overlap ping results from a search of Sanchez The system is not case sensitive A printout can be generated of any of the screens referred to above However a prudent searcher will take the further step of requesting a Cer tificaci n obtainable without delay and at no cost This produces a pdf dis played on the screen and available for download by the searcher which con stitutes legal evidence of the registration in the RUG s records certifications issued by the RUG facilitate presentation of documentary evidence in legal proceedings The Certificaci n will be needed at the very least in the event of litigation judicial enforcement or bankruptcy Some additional comments on the RUG It should be noted that registration in the RUG relates to a pa
9. d fi deicomisos de garantia when the secured obligation exceeds 250 000 Mexican Pesos this figure is subject to a daily inflation adjustment the UDI unidad de inversion currently that is a multiple of almost 5 so the current figure is a value of approximately US 75 000 And naturally the state level registries were not eager to lose the registrations they serviced prior to the initiation of the RUG Also financial leasing companies resisted a requirement that such leases be registered A brief comment about Notarios functionaries appointed by the states who perform the roles traditional for notaries in the civil law world see http www notarios com mx and corredores p blicos generally translated as public brokers these are federally appointed persons who although dating back to decree of Emperor Carlos V of Spain today function under the Federal Law of Public Brokerage in force since 1993 they provide public faith and play various roles in the commercial marketplace see Attp www corredurtapiblica gob mx There are about 5 000 notarios and 370 corredores Significant modernization of Mexican substantive law proved difficult also or at least so it was argued by opponents because modern substan tive secured transactions law seemed impossibly inconsistent with historic concepts of incompatibility of security rights without dispossession of the debtor and notice filing seemed unacceptable in light of the historic op eration
10. dified form was added for this device This contrast illustrates the difficulty Mexico had to depart from the traditional registration On the other hand the legislation declared explicitly that the new prenda a nonpossessory right in movables was a real right While the new law required registration of the new prenda in order to achieve effectiveness against third parties it did not award prior ity over the other security devices then in use The trust fideicomiso had long been known in Mexican law and was used inter alia for security purposes The 2000 act introduced a statutory version of this device better tailored specifically for security purposes and making it a more reliable device Al though it became commonly used it was expensive to create among other things only financial institutions and warehouse operators are eligible to act as such trustees allowing them to charge monopolistic fees making it to a great extent unavailable for widespread use to support credit to sme s The trust document was to be registered under the name of the debtor trustor with the creditors who were the beneficiaries being designated by the trustor to the trustee but not necessarily being identified in the trust document and creditors were eligible to be trustees Under the reforms enacted during the first decade of this century a financial lease arrendamiento financiero a device theretofore not required to be registered was required t
11. e g financial factoring The electronic registration screen calls for a designation of not only the type of security right but also of collateral type selected by the registrant from a drop down menu gathered by the RUG for statistical purposes and a description of the collateral RUG statistics re types of collateral subject of registrations through June 30 2012 indicate the following distribution about 50 agricultural products about 25 machinery and equipment 13 motor vehicles 4 livestock 2 rights and receivables 1 inventory and 1 consumer products N b some of these categories might be over lapping The User Guide recommends that registrants copy and paste the collateral description from the underlying document on which the registra tion is based This advice may not only be prudent to prevent unintentional discrepancy but also provides assurance that the registrant will not be ac cused of providing misleading data an issue raised by certain Mexican law yers though not a likely issue in the North American systems 7 The RUG 1s very user friendly A Guia del Usuario para el uso del sitio a user s guide in Spanish of course is accessible at the RUG website In addition items on various screens have a question mark which when clicked provide examples and explanations and cite to the Reglamento The Honduras system is likewise very user friendly each screen has instructions as do the backs of the paper form
12. e purchase mon ey credit first introduced legislatively in a very rudimentary form by the Mexican 2000 legislation was theretofore managed either in a secret lien form in that registration was not required or by using title based devices such as conditional sales title reservation or financial leases or by specific priority rules inhering in particular security devices that functioned at least in part as purchase money transactions cr ditos refaccionarios avtos or habilit aci n are essentially production credit vehicles although not strictly confined to pure purchase money transactions Mexican substantive and registry law moved forward in a poorly coor dinated series of major and minor legislative and regulatory actions during the first decade of this century primarily in 2000 and 2003 until finally the actions establishing the RUG were taken during 2009 These actions are identified in fn 1 of Dale Beck Furnish Mexico s Emergent New Law of Secured Transactions Recent Developments 2000 2010 28 Ariz J of Int and Comp Law 143 2011 The reforms in the actions of 2000 did produce a few modernizations For example they added two new statutory security devices the prenda sin transmisi n de posesi n pledge without transfer of possession and the fideicomi so de garantia security trust the latter of which featured a form of summary execution that was extremely attractive when compared with the expensive and leng
13. gistration offices still exist and may inter alia provide assistance to would be registrants at the RUG Honduras has a single registry operated by the Chamber of Commerce of Tegucigalpa which has an office open to the public in Tegucigalpa While there continues to be only one database the Chamber of Commerce of San Pedro Sula the second largest but primary commercial city in Honduras now functions as an ancillary office for receiving registration data on pa per Neither office retains paper once the data is entered into the database electronically the paper is returned to the registrant Thus in Honduras the database is fully electronic and intake can be transmitted from account holders electronically although to date there has been no application for an account by anyone and all registrations to date have been made via the Chamber so effectively the system provides a data entry service to those wishing to submit the data on paper 4 Accessibility to the RUG both for registering a security right and for searching is available to all Statistics indicate that by June 30 2012 over 85 of registrations had been transmitted directly to the RUG by creditors themselves with the re mainder being transmissions by a notary a corredor other federal and state officials and the judiciary who are empowered to cancel or modify registra tions e g upon determination that the grantor is entitled to cancellation by means of an electronic
14. iones o sustituciones of the collateral or the secured amount Such an indication should suffice to put the world on notice that any stated amount cannot be relied on Unless clarified by legislation the effect of including an amount that turns out to be less than the actual debt will have to await judicial development Moreover as noted above in some other countries unfortunately this item by reason of tradi tional practice in real property registries in which context it is often useful is mandatory and regrettably often becomes the base for calculating the registration fee DR 2013 Universidad Nacional Aut noma de M xico Instituto de Investigaciones Juridicas
15. ma de M xico Instituto de Investigaciones Juridicas Este libro forma parte del acervo de la Biblioteca Juridica Virtual del Instituto de Investigaciones Juridicas de la UNAM www juridicas unam mx http biblio juridicas unam mx 398 HARRY C SIGMAN To become a user eligible to submit registrations an electronic signature is required I was advised that obtaining an electronic signature is easy and in expensive and that the Tax Office has issued thousands of digital keys that people can easily carry on a USB in their pockets and that there are also five companies that issue these privately In Honduras searches can be done directly on the website without any previously established account but to submit registrations electronically a user account must first be established Available search criteria are the grantor s name the grantor s folio elec tr nico id for individual Mexican nationals this is usually that person s CURP Social Security collateral description and the number assigned by the RUG to a particular registration n mero de garant a o asiento A search request can include more than one criterion This feature is especially use ful if a response to an initial inquiry by grantor s name or by collateral description produces a large number of potential hits since it results in a narrower more focused search Submission of a grantor name consisting of only a given name and a surname patronymic produced a re
16. nt to the promulgation of the OAS Model Law Org of Am States Model Inter American Law on Secured Transactions 2002 see http www oas org dil cidip vi secured transactions_eng him In addition there is presently pending in Colombia a bill modernizing the substantive law and providing for a modern electronic registry expected to pass within the next few months Most modern efficient secured transactions laws depend on the support of a modern efficient registry A registry must of course be consistent with and implement substantive law rules but even a conceptually superb body of substantive law is unlikely to be efficient if it is dependent on an unsat isfactory registry Mexico has been struggling over the modernization of its secured transactions substantive law for two decades Indeed much of the credit for the advances that have been made to date belongs to our Acad emy colleague Boris Kozolchyk and his National Law Center for Inter American Free Trade see hitp vww natlaw com I recall coming to Mexico to participate in a conference in Hermosillo Sonora in March 1995 with Boris and Ron Cuming another Academy colleague Indeed much of what has been accomplished in Mexico may be attributed in no small part to Bo ris perseverance and dogged efforts Although this paper does not include an in depth study of the develop ment of Mexican substantive law relating to security over movables some description of that somewhat tor
17. ntified on a single registration fideicomisos for example often involve more than one creditor Duration of the registration s effectiveness vigencia is designated by the registrant g 60 months The system accommodates designation of up to 9999 months surely the need for such a lengthy duration is highly improb able and might be subject to attack at least by the grantor as false informa tion The period initially designated by the registrant is modifiable by the subsequent registration of a renewal or decrease In the absence of a desig nation by the registrant the registration is nevertheless processed and the RUG automatically assigns one year duration III SOME FURTHER DETAILS ABOUT THE RUG SYSTEM PARTICULARLY SEARCHING THE RECORD In the course of preparing this paper a search was run via the internet from a personal computer in the U S It was fast simple and cost free and apparently comprehensive indeed it offered a complete image of each dis covered registration for immediate viewing and or downloading All that was required a one time procedure was becoming a Registered User this required only an e address and designation of a password created by the prospective user An account was authorized within seconds by return e mail conferring Registered User status This enabled proceeding with a search and no electronic signature or other requirements were imposed DR 2013 Universidad Nacional Aut no
18. o be registered in the Registro P blico de Comercio or another applicable registry Now that device must be registered in the RUG Also during that time in 2007 Mexico ratified the Cape Town Con vention accepting the notion of registration of title retention and financial leases of aircraft DR 2013 Universidad Nacional Aut noma de M xico Instituto de Investigaciones Juridicas Este libro forma parte del acervo de la Biblioteca Juridica Virtual del Instituto de Investigaciones Juridicas de la UNAM www juridicas unam mx http biblio juridicas unam mx 392 HARRY C SIGMAN Thus even after almost a decade of reform efforts Mexico lacks a co herent clear structure of one or more security devices with a clear system of priorities and until the establishment of the RUG lacked a single registry covering all such devices Finally three actions during September and October 2010 Decreto Acu erda and Aclaraci n al Acuerda resulted in the RUG as it is operational today The final Regulations that established the RUG specify a list of security and security like devices under the general heading of garant as mobiliartas which continue to be available and are not superseded by a unitary security interest but are required to be registered in the RUG in order to be effec tive against third parties Thus a single national registry was established in which one would find substantially all types of effective competing securit
19. of registries which served to validate the underlying legal document itself to constitute the transaction embodied in the document to give the arrangement public faith and to provide publicity vis a vis third parties This traditional function involved the participation of notaries as well as the an lisis y calificaci n by registry officials rigorous screening examination to assure completeness and validity of documents submitted for registra tion for which services both the notaries and the registrars charged fees It is important to note however that the OAS Model Law designed for use in countries with legal traditions similar to those of Mexico demonstrates that these are not insurmountable obstacles Honduras did a fine job of adopting a comprehensive modern movables security law based largely on the OAS Model Law It should also be noted that Mexican delegates to the OAS played a significant role in the OAS deliberations Indeed the diplo matic conference that approved the 2009 OAS Model Registry Regulations was chaired by a Mexican Rodrigo Labardini who also is the current chair of Uncitral Working Group VIs effort to produce a Technical Legislative Guide on the Implementation of a Security Rights Registry Guide intended DR 2013 Universidad Nacional Aut noma de M xico Instituto de Investigaciones Juridicas Este libro forma parte del acervo de la Biblioteca Juridica Virtual del Instituto de Investigaciones Juridica
20. port in dicating results found for three persons with those same names but also an additional name element most likely matronymics This suggests that the search logic is not a literally exact match as is the case in some U S filing offices but responded with at least some matches that include the requested name but have at least certain additions The three additional registrations reported were identified by the number assigned by the RUG to the regis tered security right n mero de garant a o asiento the transaction number as signed by the RUG to that filing n mero de operaci n the type of the trans action e g an initial registration inscripci n the name of the grantor the grantor s id or when the grantor does not have one the number assigned by the RUG to the grantor for RUG purposes the date and time of the re ported transaction and the collateral type to see the collateral description would require calling up a copy of the registration This data might allow disregard of any or all of the three discovered registrations and alterna tively it enables the searcher to extend the search by calling up a copy of one or more of the indicated filings showing all of its information including an identification of the specific security right that is the subject of the regis tration Other search logic information derived from that computer session is that a search request that submitted only a surname was not reje
21. rticular document legal act acto o contrato which creates a particular type of security right identifying the type of right the date of the underlying document the details concerning the Instrumento P blico number and identity of the notary or corredor who formalized the document required if the secured amount exceeds a statutory minimum and at the option of the registrant the terms and conditions of the document The document and its details are neither submitted to nor examined by the RUG it is the registrant who supplies this data to the public record without verification by the RUG This feature is consistent with Mexico s preservation at the substantive law level of different types of security rights rather than put them all into one functionally defined security interest along the lines of UCC Article 9 and the Canadian PPSA s This is consistent with the traditional notion of the registry as a place where an existing legal right is being registered rather than using the registry as a notice board or warning flag that a right may ex ist now or may come into existence in the future which will enjoy a priority based on the date of the filing This feature also precludes the submission to the RUG for inscription of a registration until the right has been legally created by the specified legal acto or contrato To facilitate the possibility of a pre creation warning flag often valuable for legitimate business reasons the
22. s DR 2013 Universidad Nacional Aut noma de M xico Instituto de Investigaciones Juridicas Este libro forma parte del acervo de la Biblioteca Juridica Virtual del Instituto de Investigaciones Juridicas de la UNAM www juridicas unam mx http biblio juridicas unam mx SECURITY OVER MOVABLES IN MEXICO 397 II SOME FURTHER DETAILS ABOUT THE RUG SYSTEM PARTICULARLY INSCRIPTION OF REGISTRATIONS The registration requires identification by name nombre denominaci n o razor social as well as by the folio electr nico of the otorgante the grantor of the security right and if the otorgante is not also the deudor the person who owes the secured obligation identification of the deudor The RUG creates an id for individuals for RUG purposes if they don t have one In contrast in Honduras the only official search and the only one with legal consequences is by the id although a search by name is possible for infor mational purposes In the U S UCC Article 9 also distinguishes between an obligor and a debtor the latter is defined as A person having an interest in the collateral whether or not the person is an obligor i e the grantor of the security interest there is no separate identification of the obligor on the UCC fi nancing statement and U S citizens do not have official national id s thus for searchers and filers the weight on the debtor s name is much greater Multiple creditors may be ide
23. s de la UNAM www juridicas unam mx http biblio juridicas unam mx 390 HARRY C SIGMAN to assist countries wishing to implement the U N Comm n on Int Trade Law UNCITRAL Legislative Guide on Secured Transactions U N Sales No E 09 V 12 2010 herein Uncitral Legislative Guide Unlike the Uniform Commercial Code in the states of the United States of America and the Personal Property Security Acts in the Cana dian provinces and unlike the OAS Model Law and the Uncitral Legislative Guide Mexican substantive law to this day has not adopted a unitary secu rity interest based on a functional approach Rather it embraces a variety of different security devices which were developed over time under Mexican federal or state law to provide modes of financing particular activities and which had have different rules concerning not only collateral coverage but whether a public registration was required where it was to take place even registrations with respect to a particular device that were required under the federal Commercial Code were filed in a state run registry pursuant to a Coordination and Cooperation Agreement between the Mexican Ministry of the Economy and each individual state and what was achieved by such registration including priority vis a vis competing creditors For example there was no specific statutory purchase money super priority similar to the that found in the North American laws the need to facilitat
24. thy enforcement procedures available in the case of other security DR 2013 Universidad Nacional Aut noma de M xico Instituto de Investigaciones Juridicas Este libro forma parte del acervo de la Biblioteca Juridica Virtual del Instituto de Investigaciones Juridicas de la UNAM www juridicas unam mx http biblio juridicas unam mx SECURITY OVER MOVABLES IN MEXICO 391 devices These two new devices and the other modifications were placed in the LGTOC the Commercial Code and other related statutes By means of the Reglamento del Registro P blico de Comercio issued in 2003 there was instituted a national Svstema Integral de Gestion Registral SIGER This did not create a new registry but in essence provided a national elec tronic data transmission and storage system replacing paper and produc ing a national uniformity While this did not constitute a single national registry it was a first step towards notice filing by providing for a simple pre codified form for electronic registration this form however was ap plicable only with respect to the new statutory prenda and the new rules did not require such registration for all forms of security devices Moreover the form was in addition to not in lieu of submission of the underlying docu mentation for calificaci n by the registrar Registration with respect to the new security trust device required the submission of the entire trust document eventually a pre co
25. tured history is necessary particularly since the establishment of the RUG has finally made the current underlying sub stantive law much more usable more despite that body of law than because of its halting modifications It is necessary to have a picture of the substan tive law to understand what the RUG has accomplished Over the past two decades many efforts were made to modernize Mex ico s substantive law These were vigorously resisted in particular by those with vested interests in the status quo such as the notaries who under the pre existing law and practice played a key role in drafting and register ing commercial documents and effectively functioned much to their profit as gatekeepers to secured status and to such registration as existed They would seem still somewhat to be gatekeepers not to the RUG but to a credi tor s gaining secured status at least insofar as Ley General de T tulos y Op DR 2013 Universidad Nacional Aut noma de M xico Instituto de Investigaciones Juridicas Este libro forma parte del acervo de la Biblioteca Juridica Virtual del Instituto de Investigaciones Juridicas de la UNAM www juridicas unam mx http biblio juridicas unam mx SECURITY OVER MOVABLES IN MEXICO 389 eraciones de Cr dito General Law on Negotiable Instruments and Credit Transactions LG TOC arts 365 and 404 respectively require ratifica tion before them of signatures on prendas sin transmisi n de posesi n an
26. vard University 1963 Mr Sigman has taught at USC and UCLA Law Schools in Los Angeles and has given seminars and guest lectures at law faculties through out the world An experienced practitioner as well he has been a member of the California Bar for almost 50 years specializing in commercial law He was a member of the Drafting Committee that prepared Revised UCC Article 9 and of the Joint Review Committee that prepared the 2010 Amendments to Article 9 as well as a U S Delegate with respect to the UN Receivables Convention and the Uncitral Legislative Guide on Secured Transactions and he has consulted to numerous governmental agencies and NGO s on secured transac tions law and filing systems 387 DR 2013 Universidad Nacional Aut noma de M xico Instituto de Investigaciones Juridicas Este libro forma parte del acervo de la Biblioteca Juridica Virtual del Instituto de Investigaciones Juridicas de la UNAM www juridicas unam mx http biblio juridicas unam mx 388 HARRY C SIGMAN 24 7 registrations bear a small fee all registrations to date have been sub mitted through the Chamber as no member of the public has applied for an electronic user account I will provide additional comments about the Honduran registry I also mention in passing that Guatemala Chile and Peru are the three other Latin American countries that have made some reform efforts in the field of security rights in movables during the past decade subseque
27. xed to pro duce revenue for the government this clearly has made the registry far less useful and is clearly counterproductive to the underlying goal of making more credit available to sme s In 2009 Guatemala had only 566 registra tions Honduras avoided the temptation to emulate Guatemala it charges a DR 2013 Universidad Nacional Aut noma de M xico Instituto de Investigaciones Juridicas Este libro forma parte del acervo de la Biblioteca Juridica Virtual del Instituto de Investigaciones Juridicas de la UNAM www juridicas unam mx http biblio juridicas unam mx 396 HARRY C SIGMAN fee of only the equivalent of approximately US 12 00 not enough to deter use of the system and searches in Honduras are free As of August 1 2012 Honduras had over 6 500 registrations 6 Substantially all incluswe scope of security rights required to be registered at the RUG Registration at the RUG covers substantially all types of de facto se curity rights and substantially all types of collateral including motor vehi cles although in Mexico creditors claiming cars as collateral often utilize a technique of blank endorsement of transfer documents to enhance enforce ment in the event of default Honduras has a car registry that issues license plates and collects taxes but this does not appear to be a registry for own ers or secured parties I must say substantially because there are still some items not included in the RUG s coverage
28. y rights over movables and in which registration would itself render the credi tor s security right regardless of type effective against third parties The enumerated list of security devices covered by registration in the RUG is specified by a drop down element on the mandatory pre codified form a form that in the RUG exists only electronically the last of which is a catch all of other special privileges although it is not clear to what this refers possibly to some privileges that appear to exist under Mexican insol vency law but it is clearly an expansive element not a limiting one The list comprises prenda sin transmisi n de posesi n nonpossessory pledge la derivada de un cr dito refaccionario o de habilitaci n o avio the derivative of rights arising under types of production credit agreements la derwada de una hipoteca n dustrial the derivative of an industrial mortgage this device is available only to banks la constituida sobre una aeronave o embarcaci n rights in airplanes or vessels la derivada de un arrendamiento financiero rights arising under financial leases cl usula de reserva de dominio en una compraventa mercantil de bienes muebles que sean susceptibles de identificarse de manera indubitable title reservation clause in a commercial purchase and sale agreement covering movable goods which are capable of being indubitably identified and la derwada de un fideicomiso de garantia derechos
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