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PROSEC DECREE
   
   
PROSEC Decree  
New Decree Aug. 2, 2002, reformed Sept. 4, 2002, reformed Dec. 31, 2002, 2002, July 10, 2003, December 31, 2003, March 23, 2004 and December 2, 2004, December 28, 2004, and January 3, 2005, Sept. 2005, Dec. 19, 2005, Jan. 20, 2006 -- November 29, 2006

November 29, 2006 last reform

The duties on some materials are reduced that belong to the electronic, furniture, toys, footwear, capital goods, photography, diverse industries, chemical, rubber and plastic, steel and iron, hides and leathers, automotive industry, textile and sewing materials sectors - some tariff classifications are cancelled or scheduled to be cancelled in 6 months to coincide with recent reforms to the General Tax Law for Importation and Exportation. 


Program of Sectoral Promotion
Programa de  Promoción Sectoral

Updated with the latest reform November 29, 2006


1. What is PROSEC?
PROSEC (Programas de Promocion Sectorial - Programs of Sectoral Promotion) is designed for manufacturers of specific products. A company that can take advantage of this program can import non-NAFTA originating goods and materials to be used in the production of specific products and pay 0-7% duty.

2. Who should apply for a PROSEC program?
PROSEC was designed to offset the negative impact of NAFTA Article 303 on manufacturers. Companies that, since the implementation of Article 303 on January 1, 2001, are paying duties on materials and goods that they use in the manufacturing process should analyze the benefits of applying for a PROSEC program in the appropriate sector.

3. How do companies know in which sector they should apply for the program?
Taking the tariff classifications (TIGI) of the materials and goods that they are importing (Specifically the goods that are non NAFTA originating and since the implementation of Article 303 of NAFTA are incurring duties) and look for those classifications in Article 4 of the PROSEC decree. The industrial sector in which the majority of those articles are found is the sector in which they should apply. See list of sectors below.

4. Can a company import goods and materials from sectors other than the one they are registered for?
No. Companies can only benefit from the tariff preferences of PROSEC on the articles they import that are listed in the Sector they have registered in.

5. What are the specific benefits of the program?
A company can import the goods and materials utilized in their production and pay duties of 0%- 7%.

6. What are the different sectors in the program?
I. Electrical Industry
II. Electronics Industry
III. Furniture Industry 
IV. Toy Industry, Recreational Toys, and Sporting goods;
V. Footwear Industry;
VI. Mining and Metallurgical Industry;
VII. Capital Goods industry;
VIII. Photographic Industry;
IX. Industry of Farm Machinery
X. Diverse Industries;
XI. Chemical Industry;XII. Industry of Manufacturers of the Rubber and Plastic
XIII. Iron and Steel Industry;
 
XIV. Industry of Pharmaceutical Chemicals, Medications, and Medical Equipment;
XV. Industry of Transport except the Automotive Industry and Automotive parts:
XVI. Industry of Paper and cardboard;
XVII. Industry of Wood;
XVIII. Industry of hides and leathers;
XIX. Automotive Industry and Automotive parts;
XX. Textile and Sewing Industry;
XXI. Chocolates; Sweets, and Similar items, and;
XXII. Coffee Industry.

7. What criteria should you use for analyzing your company's products? 
  • Destination of the finished products.
  • Origin of the materials
  • The duty (TIGI) for the importation of the materials
  • Whether or not the finished product can qualify as originating under NAFTA
  • The import duty in the U.S. and Canada.
8. What is the difference between the PROSEC Decree, the Maquiladora Decree, and the PITEX Decree?
The PROSEC Decree unlike the Maquiladora and PITEX decrees was designed based on the NAFTA. Any manufacturer authorized for an export program can also take advantage of  PROSEC.  PROSEC was created to offset the negative effects of Article 303. 

9. What has happened to temporary imports of materials and machinery since Article 303 went into effect on January 2, 2001?
The intent of NAFTA Article 303 is to not unduly extend tariff preferences  to non-NAFTA producers of materials. For manufacturers that utilize non-NAFTA originating materials or that export their products to non-NAFTA countries, they will continue to import temporarily.
 
 

10. What happens when non-NAFTA originating materials and components are incorporated into the products exported to the U.S. and Canada?
For these products the amount of duty to be paid is calculated on imported materials and components. Duty is paid on those non-NAFTA materials utilized in the manufacture of those products. (within 60 days of their export to the U.S. or Canada).

 

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