Mexico’s Department of the Economy Publishes New Decree Establishing Requirements for Permanent Importation of Used Vehicles

On December 24, 2008, the Mexican Department of the Economy (Secretaria de Economía or SECON), published in the Official Journal of theFederation (Diario Oficial de la Federación or DOF) the new “Decree establishing conditions for the permanent importation of used vehicles” (the“Decree”). The Decree entered into force on January 1, 2009 and shall be effective until December 31, 2010. Such Decree nullifies previouslypublished decrees from August 22, 2005 and April 26, 2006, unifying in one single decree the conditions applicable to the permanent importation ofused vehicles into Mexico, including the border region and the country as a whole. The new Decree forms part of the measures implemented bySECON in order to modify Mexican customs rules for permanently importing used vehicles, in accordance with the provisions of the North AmericanFree Trade Agreement (NAFTA), which establishes that beginning on January 1, 2009 Mexico may not prohibit or restrict the importation of usedvehicles from the U.S. or Canada that are ten years old or older. Other measures adopted in the Decree include a new customs classification for usedvehicles (see the Decree amending Tariffs of the Law of General Importation and Exportation Duties (Ley de Los Impuestos Generales de Importacióny de Exportación) published in the DOF on January 24, 2008, and the corresponding amendment to Annex 2.2.1 of the Decree through which SECONissued Rules and Criteria of a General Nature in Foreign Commerce Matters (see DOF of December 29, 2008) which establishes the requirements forobtaining a permit from SECON in order to carry out such importations. The new Decree also provides for a 10% ad valorem rate on customsclassifications applicable to the permanent importation of used vehicles, exempting such vehicles from obtaining a prior permit and certificate of originso long as the vehicle identification numbers correspond to the manufacture or assembly of the vehicles in Mexico, the United States or Canada andshows the vehicles to be of a year-model that is ten years or more from the year of importation, and/or vehicles imported by residents of the borderregion which shall remain in such region (the year-model is between five and nine years from the time of importation). Notwithstanding the new rules,importers must still register their permanently imported used vehicles on the Public Vehicle Registry and are required to meet other non-age relatedrequirements such as restriction on circulation in the vehicles’ country of origin, the physical-mechanical conditions of vehicles, environmentalprotection, and demonstrating that the vehicles have not been reported as stolen.