WORLD TRADE G/SCM/N/3/MEX
21November 1996
ORGANIZATION(96-4949)
Original: Spanish Committee onSubsidies andCountervailing Measures
SUBSIDIES
Notifications Pursuant toArticle XVI:1 oftheGATT 1994
andArticle 25oftheAgreement onSubsidies and
Countervailing Measures
MEXICO
Thefollowing communication, dated 18October 1996, hasbeenreceived fromthePermanent
Mission ofMexico.
_______________
Pursuant toArticle XVI.1 oftheGATT 1994andArticle XXV oftheAgreement onSubsidies
andCountervailing Measures, Ihavethehonour:
Toinform youthat,except fortheprogramme indicated below andcertain programmes in
theagricultural sector, Mexico considers thatnomeasures havebeentaken onitsterritory thatrequire
notification inconformity withArticle XVI.1 oftheGATT 1994andtheAgreement onSubsidies and
Countervailing Measures;
Tonotify theProgramme ofTemporary Imports toProduce Export Goods (PITEX). The
requisite information isattached;
TopointoutthatthiscommunicationismadewithoutprejudicetoMexico'sstatusasadeveloping
country Member oftheWTO andthatthesubsidies totheagricultural sector willbenotified forthe
purposes oftheWTO Agreement onAgriculture.G/SCM/N/3/MEX
Page2
PROGRAMME OFTEMPORARY IMPORTS TOPRODUCE EXPORT GOODS
1. Titleofsubsidy programme, ifrelevant, orbriefdescription oridentification ofthesubsidy
Programme ofTemporary Imports toProduce Export Goods (PITEX).
2. Period covered bythenotification
June1995 toMay1996.
3. Policy objective and/or purpose ofthesubsidy
Theprogramme hasbeencreated topromote export activity byMexican manufacturing firms
andinvolves drawback forexporters ofduties paidontemporary imports offuels, lubricants, factory
supplies, sparepartsandmachinery, equipment, moulds andtools, apparatus, equipment andaccessories
forresearch, safety, quality control, communications, training, electronic dataprocessing, etc.,
incorporated inexport goods orreturning abroad inthesame stateinwhich theywere imported.
4. Background andauthority forthesubsidy (including identification ofthelegislation under which
itisgranted)
Theprogramme isgoverned bytheDecree Establishing Drawback ofImport Duties for
Exporters, published intheOfficial Journal of11May1995.
5. Form ofthesubsidy (i.e.grant, loan, taxconcession, etc.)
Drawbackforexportersoftariffdutiesontemporaryimportsoffuels,lubricants,factorysupplies,
spare parts andequipment, machinery andequipment, instruments, moulds andtools, apparatus,
equipment andaccessories forresearch, safety, quality control, communications, training, electronic
dataprocessing, etc.,incorporated inexport goods orgoods which return abroad inthesame state.
6. Towhomandhowthesubsidyisprovided(whethertoproducers,toexportersorothers,through
what mechanism; whether afixed sumorfluctuating amount perunit; ifthelatter, how
determined)
Mexican natural orlegal persons established inMexico whoexport goods mayregister a
Programme ofTemporary Imports toProduce Export Goods, provided theyexport atleast10percent
oftheirtotalsalesortheequivalent ofUS$500,000 ayear.
Forthispurpose, exporters areclassed as:
(a) Direct exporters, namely, persons established inMexico whoexport goods inthesame
stateinwhich theywere imported orexport goods incorporating imported inputs;
and
(b) Indirectexporters,namely,suppliersofinputsincorporatedinproductstobesoldabroad
byfirms intheNational In-Bond (Maquiladora) Industry Register, firms withaPITEX
programme, foreign trade enterprises, orbyathirdparty issuing anendorsement and
submitting finalexport orders.
Under thisprogramme authorization isissued toimport three different categories ofgoods:
(i)fuels, lubricants, factory supplies, spare parts andequipment; (ii)machinery andequipment,G/SCM/N/3/MEX
Page3
instruments, moulds andtools; and(iii)apparatus, equipment andaccessories forresearch, safety,
quality control, communications, training, electronic dataprocessing, etc.
Toobtain drawback, exporters mustsubmit totheMinistry ofTrade andIndustrial Development
anapplication accompanied byvarious documents, suchasinformation, copies ofimport andexport
orders, salesinvoices, etc.
Theamount ofimport duties refunded totheexporter iscalculated asfollows:
(a) Theamount paidinnational currency forimport duties issplitbetween theselling rate
ofthepesoinrelation totheUnited States dollar onthedateonwhich thepayment
wasmade;
(b) Theresult oftheabove ismultiplied bythebuying rateinrelation totheUnited States
dollar onthedateonwhich therefund isauthorized. Theresulting amount istheamount
innational currency payable totheexporter astherefund ofimport duties.
Similarly, ifinputs orgoods thatadirect orindirect exporter hassentabroad subsequently
return toMexico, theexporter mustrepay theamount ofimport duties hehasbeenrefunded oriscredited
withanyovercharges.
7. Subsidy perunit,orincases where thisisnotpossible, thetotalamount ortheannual amount
budgetedforthatsubsidy(indicating,ifpossible,theaveragesubsidyperunit).Whereprovision
ofperunitsubsidy information (fortheyearcovered bythenotification, theprevious year,
orboth) isnotpossible, afullexplanation
Ithasnotbeenpossible toobtain unitfigures orthetotalorannual amount budgeted forthis
programme because theMinistry ofFinance andPublic Credit (responsible formaintaining theregisters)
keeps these general datawithout aspecific breakdown. Accordingly, PITEX programmes maybe
mixed withdataontemporary imports under non-PITEX programmes.
8. Duration ofthesubsidy and/or anyother time-limits attached toit,including thedateof
inception/commencement
Itisgranted onlyfortemporary imports ofinputs toproduce thegoods forexport. Therefore,
theduration ofthesubsidy isindefinite.
9. Statistical datapermitting anassessment ofthetradeeffects ofthesubsidy. Thespecific nature
andscope ofsuchdataislefttothejudgement ofthenotifying Member. Totheextent possible,
relevant and/or determinable, however, itisdesirable thatsuchinformation include statistics
ofproduction, consumption, imports andexports ofthesubsidized product(s) orsector(s)
Forthereasons indicated under item7above, theinformation requested isnotavailable and,
accordingly, cannot beprovided.G/SCM/N/3/MEX
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DECREE ESTABLISHING PROGRAMMES OFTEMPORARY IMPORTS TOPRODUCE
EXPORT GOODS, AND AMENDMENTS AND ADDITIONS THERETO
WHEREAS
Programmes ofTemporary Imports toProduce Export Goods (PITEX) wereestablished under
theDecree published intheOfficial Journal of3May1990, andhaveoperated insuchawayasto
indicate possible changes inprocedures soastoprovide further administrative facilities;
Itisnecessary tosimplify foreign trade procedures sothattheexporter 'ssupplier hasaccess
tothesame benefits asthefinalexporter; and
Itisnecessary togrant administrative facilities sothatmedium- andsmall-sized enterprises
cansupply inputs tobeexported byfirms withexport promotion programmes, thefollowing ishereby
issued:
DECREE ESTABLISHING PROGRAMMES OFTEMPORARY IMPORTS TOPRODUCE
EXPORT GOODS, AND AMENDMENTS AND ADDITIONS THERETO
Article 1.(Amended)
TheProgramme ofTemporary Imports toProduce Export Goods ishereby established and
willbeadministered bytheMinistry ofTrade andIndustrial Development.
Article 2.(Amendment ofparagraph IIIandaddition toparagraph VIII)
Forthepurposes ofthisDecree, thefollowing shallbetaken tomean:
I. Ministry: TheMinistry ofTrade andIndustrial Development;
II. Exporters: Natural orlegalpersons manufacturing non-petroleum products, established
inMexico andcarrying outdirect orindirect exports;
III. Indirect exporters: Suppliers ofinputs incorporated inproducts tobesoldabroad by
firms intheNational Industry Register In-Bond, firms withaProgramme ofTemporary
Imports toProduce Export Goods orregistered asForeign Trade Enterprises;
IV. Programme: TheProgramme ofTemporary Imports toProduce Export Goods;
V. Plant: Industrial premises thatareidentifiable because theyhaveproduction installations
physically independent oftherestofthefirm;
VI. Specific export project: Themanufacture ofaproduct different fromtheothers produced
bythefirm;
VII. Waste: Theremains oftemporarily imported goods thatcannot beincorporated inthe
products obtained andtheportion ofsuchgoods thatislostorconsumed intheproduction
process;G/SCM/N/3/MEX
Page5
VIII. Export certificate: Adocument evidencing indirect exports, issued byfirms inthe
National In-Bond (Maquiladora) Industry Register thathaveaProgramme, orForeign
Trade Enterprises, inaccordance withtheformat established bytheMinistry ofFinance
andPublic Credit andpublished inthedecision laying down theGeneral Fiscal Rules
forForeign Trade.
Article 3.
Exporters mayobtain authorization foraprogramme entitling themtotherights setoutinthis
Decree.
Article 4.
Foreign trade enterprises withavalid registration issued bytheMinistry maytakepartin
programmes under theterms ofthisDecree forspecific export projects.
Article 5.
Thefollowing imports shallbeallowed under theprogramme:
I. Rawmaterials, parts andcomponents wholly intended toform partofexport goods;
II. Packaging,packing,containersandtrailerbodieswhollyintendedtocontainexportgoods;
III. Fuels, lubricants, factory supplies, spare partsandequipment consumed intheproduction
oftheexported goods.
IV. Machinery equipment, instruments, moulds andtoolsintended fortheproduction process
andequipment usedformaterials directly related toexport goods;
V. Apparatus, equipment andaccessories forresearch, industrial safety, quality control,
communications, personnel training, electronic dataprocessing andfortheprevention
andcontrol ofenvironmental pollution andother items connected withtheproduction
oftheexported goods.
Article 6.
I. TheMinistry, through theDirectorate-General ofForeign Trade Services anditsregional and
federal coordination offices, shallauthorize programmes referred tointhisDecree, onthefollowing
basis:
I. Importation ofgoods covered byArticle 5,paragraphs I,IIandIIIofthisDecree shall
beauthorized forexporters whose annual foreign salesamount tomore thanUS$500,000
ortheequivalent inother currencies, orwhoexport products which account foratleast
10percentoftotalsales.
II. Importation ofgoods referred toinArticle 5,paragraphs IVandVofthisDecree shall
beauthorized forexporters whose annual foreign salesaccount foraminimum of80per
centoftotalsales.
Thepercentages referred tointhisArticle mayalsobecalculated withreference toplant or
tospecific export projects, inwhich casetheprogramme mayapply onlytosuchplant orprojects.G/SCM/N/3/MEX
Page6
Inthecaseofprogrammes authorized forspecific export projects, exports oftheproduct shall,
bytheendofthesecond yearofoperation oftheprogramme, offset atleastthevalue oftheimports
ofthegoods covered byArticle 5,paragraphs IVandVofthisDecree.
Article 7.(Rescinded)
Article 8.(Rescinded)
Article 9.(Amended)
TheMinistry shall, indecisions authorizing programmes, specify thepercentages ofwaste
declared bythebeneficiary, which mustbetheactual amount andmaybededucted fromthetemporary
importation.
TheMinistry ofFinance andPublic Credit mayverify thedeclared amounts ofwaste and,where
appropriate, shallinform theMinistry ofanyrequisite adjustments tothepercentage established in
theprogramme.
Thegoods referred toinArticle 5,paragraph IIIofthisDecree shallbeconsidered astotal
waste and,accordingly, theprogramme beneficiary shallnotberequired todemonstrate return abroad,
provided heguarantees thattheywereimported intheactual amounts andvalues concerned. Excess
amounts shall beliable topayment ofduties, andtaxes andrelated charges under theapplicable
legislation.
Article 10.(Amended)
Aprogramme beneficiary maymake useofthepremises provided forinthecustoms regulations
inorder toexport andimport products atvarious custom postsandunder oneormore items. Similarly,
hemayusethefirstin,firstoutsystem tofacilitate customs clearance ofthegoods.
Article 10A. (Addition)
Goods transferred toafirmwhere programme intheNational In-Bond (Maquiladora) Industry
Register ortoaforeign trade enterprise [......]onpresentation oftheexport certificate issued bythe
firm.
Theissue oftheexport certificate doesnotrequire anyimport orexport permit; however,
allofthegoods covered bythecertificate must beexported, directly orindirectly.
Article 11.(Second paragraph amended)
Exporters carrying outtemporary imports ofgoods under thisDecree shallnotberequired
toownthem.
TheMinistrymayauthorizepersonsotherthantheprogrammebeneficiarytocarryoutadditional
processing, provided theymeettheconditions established intheprogramme.
Similarly, authorization maybeissued forgoods referred toinArticle 5,paragraphs IVandV
ofthisDecree tobesold, ceded orrented toathirdparty under acontract, provided suchgoods are
intended fortheprocessing ofexport products andfulfil therequirements ofArticle 6,paragraph II
ofthisDecree, forwhich purpose acertificate ofjointliability foranyresulting taxfiscal credits will
beneeded, pursuant toArticle 26,paragraph VIIIoftheFiscal Code oftheFederation.G/SCM/N/3/MEX
Page7
Inbothcases, theMinistry shall notify theMinistry ofFinance andPublic Credit ofthe
authorizations.
Article 12.(Amended)
Aprogramme beneficiary mayobtain authorization tochange theimport system forgoods
referred toinArticle 5,paragraphs IVandVandapply theduty, exchange rateandvalue ofsuch
goods effective onthedateofthechange ofsystem, inconformity withtheCustoms Law.
Authorization maybeissued tosellonthehome market products made withgoods imported
under theprogramme, uptoanamount upto30percentofthevalue oftheexports under thefirm's
programme. Suchanauthorization shallrequire thefirmtomaintain apositive foreign currency balance
inoperating itsprogramme.
TheMinistry shall, where appropriate, issuepermission forfinalimportation oftheproducts
concerned, onpayment ofthecorresponding customs duties fortheimported inputs incorporated in
theproducts covered bytheauthorization.
Ifinputs imported under theprogramme arethesubject ofconcessions tothecountry oforigin,
pursuant totradeagreements andtreaties signed byMexico, thecorresponding preferential tariffshall
apply, provided theprogramme beneficiary produces thecertificate oforigin.
Article 14.(Rescinded)
Article 15.
TheMinistry mayauthorize firms operating under theDecree onthePromotion andOperation
oftheIn-Bond Export Industry, published inOfficial Journal of22December 1989, tobenefit from
thisDecree forplant andprojects other thanthose registered under thatsystem oronexpress
relinquishment bythefirmofthebenefits ofthatDecree. Inthelatter case, theMinistry ofFinance
andPublic Credit andtheMinistry shall, eachwithin itscompetence, specify theconditions, time-limits
andguarantees forcompliance withtheundertakings entered intoasanin-bond industry inregard to
customs, tax,foreign exchange andother matters.
Article 16.
Temporary imports andexports carried outunder theprogramme donotrequire priorspecific
administrative authorization orpermits ofanykind, unless theprogrammes include goods subject to
suchrequirementsongroundsofnationalsecurityorforsanitary,phytosanitary,agriculturalorecological
reasons. Inanyevent, exemption frompermits andauthorization under thisArticle iswithout prejudice
tocompliance withother legalprovisions applicable.
Article 17.
Duringtheeffectivedurationoftheprogrammes,exportersmaysubmitasubstantiatedapplication
forthem tobeexpanded ormodified, forthepurpose ofincorporating import andexport goods not
originally covered bytheprogramme.
TheMinistry shallinform theMinistry ofFinance andPublic Credit oftheterms under which
theapproved programme hasbeenamended orexpanded, within notmore thanthree working days
ofapproval.G/SCM/N/3/MEX
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Article 18.
TheMinistry 'sregional andfederal coordination offices mayauthorize programmes under the
rules issued forthatpurpose.
Article 19.
Interested parties wishing toobtain authorization, oranamended orexpanded programme shall
submit adulysubstantiated application totheMinistry, inaccordance withtheinstructions issued for
thatpurpose.
Article 20.(First paragraph andparagraph IIIamended andparagraph VIsupplemented)
Theprogramme authorization shallinclude thefollowing:
I. Scope andtheeffective duration oftheprogramme;
II. Exported andtemporarily imported goods covered bytheprogramme;
III. Theperiods forwhich temporarily imported goods mayremain inMexico;
IV. Percentages ofwaste, lossandcustoms treatment thereof;
V. Undertakings andobligations; and
VI. Effective duration oftheprogramme under commitments entered intobyMexico in
international agreements andtreaties.
Article 21.(Amended)
Theprogramme beneficiary shalleachyearreport totheMinistry theforeign tradetransactions
under theprogramme, notlaterthanthelastworking dayofApril, inaccordance withtheinstructions
issued forthatpurpose.
Thesubmission ofthisreport doesnotrelieve beneficiaries oftheobligation tomaintain acheck
ontheirinventories, asstipulated intheCustoms Law, andtokeepfortheMinistry ofFinance and
Public Credit therelevant documents fortheperiod stipulated intheFiscal Code oftheFederation.
Article 22.
Intheevent offailure byexporters tocomply withthisDecree ortheterms established inthe
approval oftheirprogrammes, theMinistry ofFinance andPublic Credit andtheMinistry shall, each
within itscompetence, cancel theprospective programme andimpose anyfines under therelevant
provisions.
Article 23.
TheMinistry ofFinance andPublic Credit andtheMinistry areauthorized, eachwithin its
competence, toissue thenecessary provisions fortheimplementation ofthisDecree.
PUBLICATION: Official Journal, 3May1990 and11May1995.