Mexico Adjusts Lubricants Ban and Permit Process
The Mexican Ministry of Energy (SENER) and Ministry of Economy published an agreement last week that modifies the October 23 decree (translated copy here) prohibiting importation into Mexico of 68 tariff categories of petroleum products, including lubricant base oils, finished lubricants and greases. The decree is intended to combat the illicit fuel market in Mexico.
The agreement adjusts the permit process in the decree. Importantly for ILMA members, it does not remove lubricant base oils, finished lubricants or greases from the list of restricted goods.
Here are key takeaways of the changes, which took effect immediately:
- Term. Prior permits for the import and/or export of products listed in the single annex to the decree shall be granted for periods of 60 days — for goods destined for sporting events and for research and testing — one year, and five years.
- Digital Window. All permit applications or extensions must be submitted and processed through the Mexican Foreign Trade Digital Window.
- Information requests. SENER may request at any time and from any institution, agency or third party, information related to the value chain of the covered products in order to determine the granting or rejection of a permit application and any renewals.
- Additional requirements. Permits will require additional information, including positive opinion regarding compliance with tax obligations, authorizations required to carry out the activity, technical specifications sheet, a letter of intent to purchase (if no import record) to justify the volume, and proof of the validity of the permit.
- Renewals. SENER includes an accreditation process for granting renewals, including the verification of the destination and use of the goods, as well as proof that the original conditions and the corresponding commercial relations still exist.
- Termination grounds. Termination of permits can be based on a number of conditions, including false declarations and submission of false documentation. There are penalties for administrative offenses.
ILMA continues to hear from members about difficulties in resuming shipments of lubricant products to customers and operations in Mexico. While some lubricant products are now getting across the U.S.-Mexico border, many issues remain. Please continue to update the ILMA office.
The Association also continues to discuss this matter with U.S. government. The U.S. Trade Representative is engaged with its counterparts in the Mexican government; however, the pathway to resolution is more difficult because the decision to issue the decree was made at the highest political levels. U.S. and Mexican officials will meet during this week’s Asia-Pacific Economic Cooperation Conference, and the decree is on the agenda for discussion.