Yacht racers and cruisers are trying to digest how their enjoyment of Mexican waters may be changing after a dragnet in which tax agents from AGACE, a division of Mexico’s IRS, swept through 12 marinas in eight ports along the country’s Pacific and Caribbean coasts looking for violations of import tax regulations.
In November, 338 foreign yachts — mostly American and Canadian — of 1,600 checked were impounded and weren’t going to be released until the owners or marina operators produced paperwork to satisfy Mexico’s legal requirements.
Owners of foreign cruising boats that visit Mexico and plan to stay must purchase a $70 Temporary Import Permit in lieu of paying an import tax and affix the TIP sticker to the boat. The permit is good for 10 years and allows an owner to return home and leave the boat in Mexico without paying a 16 percent import tax on it.
Owners also must carry the vessel’s federal documentation or state registration papers and Mexican immigration documents showing clearance into the country. Copies of the paperwork must be left with the marina in case authorities ask for them while an owner is away.
“These are not new requirements,” says Dennis Ross, an American who has cruised Mexico and now lives with his wife, Susan, in La Paz, where they run a marine services company. “There is a new sub-agency of Hacienda [the Mexican equivalent of the Internal Revenue Service] that instituted ‘inspections’ without warning boat owners or marina owners.”
President Enrique Peña Nieto’s administration has been cracking down on tax evasion of all kinds in a country where tax enforcement has been lax. AGACE is a relatively new agency set up to help carry out that policy. Critics of the aggressive enforcement of TIPs say it fails to take into account the importance of boating tourism to Mexico’s economy.
Cleve Hardaker, a San Diego sailor, won’t be doing the Newport-Ensenada Race for the first time in 20 years because of two developments: the impoundments and a policy introduced last fall that requires all boaters who enter Mexican waters — whether they plan to visit a port or not — to have a Mexican visa. Previously, boaters could visit for a long weekend and go as far south as Ensenada without a visa, Hardaker says.
“The effect is really to discourage people from going down there by boat,” he says. “There’s a risk now of getting your boat impounded. It’s really too bad. There’s a strong tradition of racing down to Mexico.”
Mexican tourism officials in Los Angeles, who have voiced anger and disappointment over the heavy-handed enforcement of the TIPs, have aggressively promoted racing and cruising along Mexico’s Pacific coast.
An AGACE announcement identified the cities where it checked boats as Cabo San Lucas and San José del Cabo, in Baja California Sur; Ensenada, in Baja California; La Cruz de Huanacaxtle, in Nayarit; San Carlos Nuevo Guaymas, in Sonora; Acapulco, in Guerrero; Puerto Vallarta, in Jalisco; and Benito Juárez, in Quintana Roo.
In the Nov. 26 sweep of the marinas and boatyards, tax agents checked for TIPs, made sure the hull identification numbers on the documents matched the HIN on the boat and checked to see whether information on the documents was consistent.
“There were a few boats that had inconsistent information, such as a transposed HIN, or in some cases the U.S. Coast Guard document did not have the HIN listed,” Ross says. “A small number of vessels apparently had not renewed their TIP or documentation. … Some of the marinas had apparently not followed through to make sure that they had copies of current documents.”
In case more audits follow, all of the marinas in La Paz have been reviewing their files to be sure they have everything in order, he says.
“We understand that in some cases the inspectors did not even ask owners or crew that were aboard at the time for clarification [of the anomalies they found],” he says. Part of the problem seems to have been that the inspectors were not familiar enough with HINs, Coast Guard documentation and state registration numbers, and the various documents related to boat ownership to resolve apparent anomalies.
In some cases boats were put in “precautionary embargo” simply because the owner or captain wasn’t there to show the tax agents where the HIN was engraved on the boat so they could check it against the HIN on the documents, says Chuck Baier, co-author of “The Great Book of Anchorages” and a longtime cruiser to Mexico. “In many cases, the proper paperwork was on file with the marina,” he says. “This is the reason for so much frustration by the boat owners.
“The AGACE inspectors seemed to have no idea where to look [for the HIN], and some numbers were in plain sight and easy to find,” he adds. “The inspectors either couldn’t see them or ignored them and tagged the boats, anyway.”
The agents also did not seem to be aware that some boats — for instance, foreign ones or those built before 1972 — do not have the 12-digit HIN. They did not have any policy for exempting those boats from the HIN requirement, Baier says.
In a written statement, Ulises Osvaldo Tomas Canseco, speaking for AGACE chief Luis Lara, blamed the marinas for not making sure boats in their custody had the necessary paperwork in order and on file to show that they had entered Mexico legally, that their ownership was legal and that they had complied with Mexican tax regulations.
Canseco went on to say that once authorities see the paperwork and it is in order they can release a boat. However, Mexican law allows them to take as long as 120 days to decide this. That’s a problem for boats that are in Mexico to race in the MexORC or Banderas Bay Regattas in Puerto Vallarta in March or to prepare for the annual Pacific Puddle Jump — an extended cruise to the South Pacific in company with other yachts, also in March.
As of mid-January, AGACE had begun releasing yachts whose owners were able to prove that they are complying with Mexican law. On Jan. 10 the tax agency released 16 yachts from Opequimar Marine Center, a boatyard in Puerto Vallarta with 250 boats in upland storage. The yard manager delivered the boats’ documentation to authorities in Mexico City within 10 days of the impoundments.
“He went to Mexico City in person and shared all the documents and certificates for the boats,” says Coral Luezya, the yard’s sales and promotions manager.
It took about a month, including the extended Christmas/New Year’s holiday, for the boats to be released.
She says the facility is asking customers who have their boats there to keep a notarized copy of the documents on board, another notarized copy in the yard’s files and the originals in their own safekeeping. And, she says, the boatyard is advising owners to make sure all of the information on the documents is consistent and correct and that they leave with the documents some instructions for where to find the boat’s HIN.
Another 10 boats that were impounded at Island Global Yachting’s Cabo San Lucas Marina were released Jan. 13 after marina operators presented AGACE with the proper documentation, according to press reports.
“The boats that don’t have the proper documentation will be fined, but we have been told that nobody is going to lose their boat,” says Tere Grossman, president of the Marina Association of Mexico and owner, with husband Ed, of Marina San Carlos in Sonoro. “As president of the marina association, I went to Mexico City to talk with the administrator of the AGACE … and he said that he would try to lift the liens as soon as possible.”
The association’s lawyer, who used to work for the tax office, is in Mexico City working full time on lifting the embargoes. “Unfortunately, the wheels of the bureaucracy move slowly,” Grossman says, “but I am sure that the boats that are able to prove they had their TIP in order will be OK.” She says those that didn’t have a TIP were given 10 days to apply for one online. Those that otherwise are not in compliance will be fined, she says.
Grossman says 92 boats were impounded at her own marina. “Marina San Carlos has proved that all of the boats in our marina have the TIP or have applied for one, except for a couple that have been abandoned,” she says. In some cases, the marina went ahead and applied and paid for TIPs for boats to expedite their release.
At the marinas AGACE checked, “some boats were unfairly impounded for mistakes that were made by the office that prepares the TIP, which is Banjercito, but in other cases it was the client’s fault for not having a TIP, having an expired TIP or having it at home instead of at the marina,” Grossman says. “It is true that the AGACE could have let us know that they were going to check the papers so we could be prepared, but it is also true that many of the boat owners don’t take Mexican law seriously, and even if we at the marina insist that they get a TIP and leave a copy of it at the marina, they don’t think it’s important and neglect to do it. We have a very hard time getting some of them to comply with Mexican law.”
Grossman describes the TIP enforcement campaign as a “fiasco” for Mexican tourism and for Mexico in general, although she and others also note that the Mexican regulations are not unreasonable and it is the visiting boater’s responsibility to abide by them.
“My personal opinion is that one of the problems was it was the first time that they were auditing boats, and they had a hard time [finding] the hull number, as some boats don’t have them,” she says.
“And they were not sure what numbers they were looking for, and the personnel at Banjercito [the agency that issues the TIPs] would just put any number they could find [on the TIP document], which was not the same that the inspector found,” she adds. “I am sure that they regret the damage that they have done, but they still have to follow the legal procedure to lift the temporary embargoes.”
March 2014 issue