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Aiding Exports to Mexico for IMMEX Operations is Aim of BIS Rule

Friday, December 02, 2016
Sandler, Travis & Rosenberg Trade Report

The Bureau of Industry and Security has issued a final rule that, effective Jan. 3, will align the time limit of license exception TMP (temporary imports, exports, reexports, and transfers (in-country) with the time limit of Mexico’s IMMEX program.

License exception TMP currently allows for the temporary export and reexport of various items subject to the Export Administration Regulations as long as they are returned no more than one year later, unless they are consumed or destroyed during the period of authorized use abroad. Other than a four-year period for certain personal protective equipment, this one-year limit extends to all items shipped under license exception TMP.

However, this one-year period does not align with the time constraints of Mexico’s Decree for the Promotion of Manufacturing, Maquiladora, and Export Services (IMMEX) program, which provides quota- and tax-free treatment for items temporarily imported and manufactured, transformed, or repaired before reexport on a time limit that may exceed 18 months. BIS states that this discrepancy reduces the efficacy of both policies and thus hinders the shipment of items subject to the EAR to and from Mexico.

BIS is therefore amending its regulations to authorize items temporarily exported or reexported under license exception TMP and imported under the provisions of the IMMEX program to remain in Mexico for up to four years. According to BIS, this period accommodates the maximum available time that temporarily imported items may remain in Mexico under IMMEX and is in parallel with the validity period of BIS licenses. This change should reduce the paperwork burden on exporters but BIS does not believe it will lead to a significant increase in exports to Mexico.

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