Bureau of Industry and Security Issues Proposed Rule to Amend License Exception TMP to Conform to the Time Limits of Mexico’s IMMEX Program

By Melissa Miller Proctor
 
On August 23, 2016, the Commerce Department’s Bureau of Industry and Security (BIS) published a proposed rule to align the time limit of License Exception Temporary Imports, Exports, Reexports and Transfers (TMP) with the time limit of Mexico’s Decree for the Promotion of Manufacturing, Maquiladora and Export Services (IMMEX) program. 

Under the U.S. Export Administration Regulations (EAR), License Exception TMP authorizes the export, reexport or in-country transfer of certain controlled commodities, software and technology for temporary use abroad without a license from the BIS. See 15 C.F.R. Section 740.9 of the EAR. Currently, such items must be returned no later than one (1) year after the date of export, reexport, or transfer if they are not consumed or destroyed during the period of authorized use abroad. However, this one-year period does not align with the time limits of Mexico’s IMMEX program, which allows imports of items for manufacturing operations for periods of time that may exceed eighteen (18) months. 

Mexico’s IMMEX program, which was created in 2006 through the merger of the Maquiladora program and the Temporary Import Program to Promote Exports (PITEX), is used by U.S. and foreign manufacturers to lower production costs by enabling them to temporarily import production materials into Mexico duty-free and without the restriction of quotas for manufacturing, processing and repair operations. Depending upon the types of commodities involved, the imported materials are allowed to remain in Mexico under the IMMEX program for eighteen (18) months or longer. The IMMEX timeframes are greater than the time limits provided for under License Exception TMP under the EAR.  As a result, U.S. exporters participating in the IMMEX program may use License Exception TMP for a one-year period, and then must either switch to using another EAR license exception or apply to the BIS for an export license that will address a longer time limit.

Accordingly, the BIS proposes to amend the time limits of License Exception TMP to correspond to the time periods authorized under the IMMEX program. That is, items temporarily exported or reexported under License Exception TMP of the EAR and imported into Mexico under the provisions of the IMMEX program would be authorized to remain in Mexico for up to four (4) years from the date of export or reexport. The proposed extended timeframe reflects the maximum available period that temporarily imported items may remain in Mexico under the IMMEX program, as well as the validity period of BIS export licenses generally.  Interested parties may submit comments to the BIS on the proposed rule until October 24, 2016.  For more details, see the proposed rule in 81 Federal Register 67505 (August 23, 2016).