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December 22, 2016

BIS Extends Time Limit for Temporary Exports to Mexico under TMP

On December 1, 2016, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) issued a final rule that would align the time limit of License Exception Temporary Exports, Reexports, and Transfers (In-Country) (“License Exception TMP”), for certain temporary exports to Mexico, with the time limit of Mexico’s IMMEX[1] program—a program used by U.S. and foreign manufacturers to lower production costs by temporarily importing production materials into Mexico. The final rule implements the proposed rule (issued on August 23, 2016) without change.

License Exception TMP generally allows the trade community to temporarily export and reexport items subject to the Export Administration Regulations (EAR) without a license, provided that the items are returned within a year of export, reexport, or transfer (unless the items have been consumed or destroyed). As a result of the final rule, items temporarily exported or reexported under TMP and imported under the IMMEX program will be authorized to remain in Mexico for up to four years from the date of export or reexport.

The final rule becomes effective on January 3, 2017.

[1] Mexico’s Decree for the Promotion of Manufacturing, Maquiladora and Export Services (commonly known as “IMMEX”). In the final rule, BIS provided additional background information on the IMMEX program, stating that it was created in 2006 and “is the product of the merger of two previous Mexican economic policies: the Maquiladora program, which was designed to attract foreign investment by exempting temporary imports from taxes, and the Temporary Import Program to Promote Exports (PITEX), which incentivized Mexican companies to grow and compete in foreign markets by providing temporary import benefits.”