Car Crisis

Not to let things get too idylic, the following e-mail arrived today. By way of background, people who live here and buy property here typically file with the Mexican government for an FM-3. This is a migratory document that allows you to live here full time if you have sufficient income but you are not allowed to work here. It is mainly aimed at retirees. Two of the perks of having an FM-3 are (or should I say were) that if you buy property here and spend more than 6 months here you can sell your property and not pay any capital gains taxes. In addition, each holder of an FM-3 is allowed to bring one car or truck from outside the country and assuming you properly register it with the Mexican government at the border, you are allowed to keep it here as long as you are a resident.

As of the first of the year all of this changed. New legislation which was passed without consulting anyone in the industry here effectively removed the tax free status from a great many of the people who bought their property under the old rules. The real estate industry is in a tizy because this has put a damper on real estate transactions because no one knows what the new law really means and people who sell their property are faced with extreme tax bills when their understanding was that it was a tax free transaction. This is killing a huge number of real estate transactions.

This e-mail today effectively kills another understanding that the government had with it's foreign citizens. The draconian nature of the reversal effectively means that you can be stopped while driving your car which according to your understanding was totally legal and for which you have all of the legal paperwork and they can confiscate it and fine you the cost of the car in addition to which they don't have to return it to you. I don't use the word draconian lightly. As you can see from the letter below our dear friends in the real estate industry are running scared. To collect $200 to $400 from each person who owns a car here in the hopes of obtaining a further document that protects you from having your legal property seized is nothing short of blackmail. And to pay this to the two consultants recommended by the government and who are little more than government stooges is nothing short of rewarding the government for screwing you.

One final item. According to Mexican law foreigners are not allowed to own property within 20 kilometers of the coast. A law was passed recinding this by allowing foreigners to set up a trust with a Mexican bank which holds their deed. It is good for 50 years and is renewable. It can also be willed to your heirs. So my question is this: if the other two things which were part of the law and guided our decision making process in deciding to buy and live here have now evaporated and evaporated in a draconian and egregious way, how can we be assured that our trusts are sacrosanct? The thing to keep in mind is that most things of this type are very fragile and "good will" and "predictability" are essential to create an atmosphere of trust. Without that trust the very industry that supports the whole Bay of Banderas will stagnate and decline affecting all of the citizens of the Bay area. Maybe that old fairy tale, "The Goose that Laid the Golden Egg". should be required reading.

Dear fellow agents (and perhaps your clients who are still here),

In an effort to get to the bottom of our latest bureaucratic scare i.e. the alleged seizing of imported vehicles from FM3 holders, we attended a semi official meeting yesterday and would like to share with you the findings and action items learned there. For example, contrary to rumors there are far less vehicles that have been confiscated so far.

By way of qualification Claudia Cadena, the former Director of Hacienda and Ana Catalina Fenyvesi the former Director of Vallarta Immigration, chaired the meeting (they are presently legal and administrative consultants). The Customs department referred these ladies to us upon our inquiry whereby we confirmed (thru customs) that the seizures were indeed legitimate. According to Ana and Claudia a letter was sent last week from a Federal Agency in Mexico City to all jurisdictions in Mexico outlining a new “interpretation” of the regulation that previously allowed FM3 holders to use a foreign plated vehicle.

The new interpretation is that all holders of FM3s (yes, including retired FM3) are not allowed to have a foreign plated vehicle. Indeed only tourist visas (FMT) and certain FM2 categories are considered valid. If stopped by a Federal agent, they may confiscate your vehicle and levy a fine equal to 100% of the value of the vehicle (amazingly payment of this fine does not return said vehicle). Apparently there’s yet another cumbersome legal procedure that may result in the vehicle being returned, and would probably take upwards to 6 months.

So what can we do about it:

As the effect of this new interpretation is so outrageous the consensus is that it would probably be reversed, in time, and Ana and Claudia suggest that the immediate action would be to obtain an “Amparo”, like a “cease and disease order” form the judge. This would apparently prohibit a Federal official from seizing your vehicle until such time that this matter becomes either better defined or revoked. Naturally, this is their livelihood and while they suggest a fee of $400USD per applicant, they will treat the Real Estate Community and their clients as a “group” and charge $200USD per applicant (assuming our group is at least 100 people), to be paid as follows: 50% against reception of documentation and the 50% remaining at the signature of the “Amparo”

In order to apply, you will need to provide the following documents either originals and a copy, or copies certified by a Mexican Notario,

Passport
FM3
Automobile title (or International Registration, sales invoice and loan document if financed)
The 2 import documents you received at the border (the sealed documents issued by S.H.C.P. and S.A.T.)
Phone numbers and email addresses

If you choose to participate in this group action please respond by email no later that close of business Wednesday so we can get a count. We’ll let you know later where to drop your documents. It must be expressly understood that this action is in no way being endorsed by Coldwell Banker or its principals nor is the firm particularly endorsing this consulting firm.

Our personal impression is that while many legal entities will probably crop up with similar solutions Claudia and Ana’s past positions enhance their ability to cut thru the red tape and get to the right people. We also believe that if we can keep using our cars for the next several months, until this hopefully blows over, the fee is palatable.

Read comments below

Comments

[Ed]

Valiene,

You are welcome to send this out to anyone concerned.

Victoria

**********

As a result of the recent flurry of mails regarding FM3 holders
driving foreign-plated cars, I have consulted a lawyer on the subject
who has read and interpreted the law.

The law permits FM2 and FM3 holders (of both rentista and working
status) to have a foreign vehicle here, of course as long as all
their papers are in order for both self and "temporarily imported"
vehicle.

The proposed action by some consultants to request an "amparo" (a
federal protection) is a questionable situation. In order to file an
amparo a responsible authority has to be cited as having threatened
or charged an individual. One cannot file an amparo on an event that
has not occurred against them, or a supposed future event nor is an
amparo likely to be accepted by a federal judge if its submitted
against an unnamed authority.

Lic. J. Felix Zarate is at our service to interpret and explain the
law and provide a letter for a nominal fee of US$50.00 that could be
carried on your person in Spanish along with the appropriate articles
of the law cited, to present to the authorities if you were ever
stopped.

For your information, Lic. Zarate formerly worked with the division
of hacienda responsible for confiscating vehicles.

If you wish to communicate with me by phone or e-mail, I can arrange
the letter and, if required, any interview you might want to have
with Lic. Zarate. You should provide the title to your vehicle, the
passport # and the FM3 number and migratory status of the person to
which it is registered. You should have in order your "permiso de
importacion termporal de vehiculos" and any other documents received
at the time you brought your vehicle in.

In my case, I feel safer travelling with a letter that explains what
I presonally might not be able to explain in Spanish. If you would
like that sense of comfort too, please communicate with me.

Atentamente,

Victoria Pratt

[Ed]

Hello All -

Well, as expected the response has been vigorous. However, allow us to make one clarification.... We are not soliciting signatories for some kind of lawsuit! While Anna Catalina and Claudia may have plans to eventually institute a legal action, THE ONLY SERVICE THEY WERE SOLICITING IS THE "AMPARO" (the cease and desist order, which supposedly will prevent a seizure if stopped). It is meant to be temporary, until the matter is cleaned up or a solution is clearly announced.

Meanwhile, we came across the following announcements from the Guadalajara American Consulate and the PV Canadian (Kelly is on vacation...) which may be of interest. You will see that a meeting of the real authorities is scheduled for tomorrow, and Claudia has supplied the Lyne Benoit (the honorary Canadian Consul) with a legal opinion supporting the validity of the auto use BASED ON THE PUBLISHED LAW.

We also spoke to the American Consulate in Gda. Their response is that they still don't have an official answer and will forward it as soon as they know. Their policy forbids any legal advice, so they could not comment on the effectiveness or validity of the AMPARO. They also advise us to wait for the official announcement....and not drive the cars. Also, as Lyne states below, not to react to unofficial opinions about this (which, I guess includes this email...hmmm...).

We think we'll give it a couple more days. But that's our personal opinion. If you'd like to proceed now, you may contact Anacatalina or Claudia directly at 224-1225 (9-2,4-6) or claudiagcadena@hotmail.com. Mention you're with the Real Estate “group” to get the rate ($100 down, $100 with the Amparo. Good Luck!

Bob and Lisa

[Ed]

Valiene,

My name is Damian Duran, I am originally from Albuquerque, NM, but have lived most of my life in Puerto Vallarta ( 25 yrs). I, as most of you, have an american car. Today I was able to have a face to face meeting with the Head of Aduana here in Puerto Vallarta, Sr. Colorado. As you know or may not know, Aduana (customs) are heading the operation against foreign plated cars. He told me, that holders of an FM3 rentista can operate a foreign-plated car. FM3's have subcategories: To find what kind of FM3 you have simply go to the page with your photo on it (page 5) and at the bottom of the page you will find "Actividad Autorizada" if it states "VIVIR EN ESTA CIUDAD DE UNA SUMA MENSUAL NO MENOR AL EQUIVALENTE A LOS 250 DIAS DE SALARIO MINIMO VIGENTE EN EL D.F." this means you have an FM3 RENTISTA, and CAN have a foreign-plated car. If anything else is stated instead of the above, you are not allowed to operate a foreign-plated car.
Only Aduana and Hacienda have the right to check documentation on foreign-plated cars, nobody else!
As told to me by Sr. Colorado, this operation is conducted primarily against holders of FM3's that have a working status subcategory. Reason being, that these people are working and receiving income in Mexico and are not allowed to have a foreign-plated car. This is stated in the law , which is not a new law, but a law that is finally going to be enforced.
One more thing that should be checked is the temporary importation document issued by Banjercito. This document should state that the car in question was imported with an FM3 rentista.

Hope this helps,

Damian Lange Duran

[eddie IV]

wild wild west, i tell ya.

[Ed]

From: Tavenner, John S [mailto:TavennerJS@state.gov]

Sent: Tuesday, April 27, 2004 4:30 PM

We have been trying to get answers from Mexican officials in PuertoVallarta and Guadalajara regarding this issue. There is some confusion even among these officials, and we are pressing them to provide clarification.
This is what we have learned from these officials at this point:
No US citizens reportedly have had their vehicles seized under this campaign, although we understand a vehicle owned by a Canadian citizen was seized.
Authorities in Puerto Vallarta want to ensure that the import status of vehicles brought into Mexico by foreigners matches the immigration status of these foreigners.
Foreigners who originally drove into Mexico as tourists and who subsequently obtain an FM-2 or FM-3 must update the status of their vehicle permits to reflect this changed immigration status
One of the key issues is whether the foreigner can get the vehicle permit updated locally or must drive back to the border. (Point 1.1.10 copied below from Mexican Customs website briefly explains that it is possible to get extensions locally.) This is still to be
clarified, but if the person's immigration paperwork expired before the vehicle permit was updated, then the person will have to drive back to the border to get the proper permit (even if the person subsequently obtained an FM-2 or FM-3).
Each case is looked at on its own merits, and circumstances usually vary from case-to-case (for example, persons who work while on a tourist permit are not treated the same as those who only started working after they obtained the proper permit)
Again, there is confusion on these points with the Mexican authorities themselves, and we are trying to get these points clarified.
Regards,
John Tavenner
Chief - American Citizen Services
U.S. Consulate General Guadalajara
Phone (from U.S.) 011-52-333-825-1717 (from Mexico) 01-33-3825-1717
Fax (from U.S.) 011-52-333-825-1951 (from Mexico) 01-33-3825-1951

Importance: High
Cars of foreigners
Just to let you know this is what we are informing the Canadians up to now. I have been on the phones and working on this since Wednesday and hope to get clear answers.
To all Canadian citizens,
This Canadian Consulate has been working on trying to obtain information from Customs and Hacienda authorities regarding the campaign on cars with foreign plates. We will be meeting on Thursday morning with Hacienda, Customs and Immigration officers regarding this issue, as it is urgent to get a clear picture of the situation. It is clear chaos originated from this campaign and there has been no clear directions given by the
authorities as any real solution offer to the problem. We hope on Thursday to be able to produce a clear guideline as what can be done and where you can complain as well if needed. We respect the Mexican authorities but we need to understand their position in order to do so. From what we have been told until now and this need to be confirm, the
following cars with foreign plates are illegal and seized if:
Owner of the car has a FM3 as a worker
Owner of the car came in as a tourist on a FMT and changed is immigration status to FM3 but never went out of Mexico to reenter with the new immigration status.
Owner who entered Mexico with their FM3 as worker and were given by Custom
the status of Turista on the temporal importation permit.
We realize that until today it did seems legal so this Consulate is trying to understand the situation. Everyone affected by these measures should know where to stand and be aware of what they should do. We will also request the authorities if possible to provide a written statement or guidelines for the public in general. For the moment do not drive your car as you know you are at risk if you belong to one of the three categories I mentioned. We would also like to recommend you not to listen to everything everyone around you says as this situation is clearly becoming out of control. Many people talks, give opinions or advices not really knowing what his going on.
We can ensure you this Consulate has been working hard on making calls with authorities and is really hoping there will be a way of fixing this problem without affecting every Canadian who drove down with his/her car and who works at the moment. We were under the understanding that the law in Mexico entitle the "visitor no imigrante" including all categories were entitle to drive their car in Mexico. It seems the major issue with the authorities is that only the no imigrante rentista can drove down his car to Mexico. We hope to get back to everyone soon with proper information on the campaign as a guideline of laws applicable to foreigners driving down their cars in Mexico .
Please do not hesitate to contact us via email if possible, phone or directly at the Consulate and let us know if you have any concerns.
Best Regards,
Lyne Benoit
Honorary Consul of Canada
Edificio Obelisco , Local 108
Blvd. Fco. Medina Ascencio #1951
Zona Hotelera Las Glorias
Puerto Vallarta, Jalisco
Mexico C.P. 48300
Tel: 52 (322) 293 0098 / 293 0099
Fax: 52 (322) 293 2894
Email: vallarta@canada.org.mx

[Ed]

April 29th 2004
TEMPORARY IMPORTATION CAR PERMIT CRISIS
This morning there was a meeting between this Consulate ,
Hacienda , Customs, American Consulate
and immigration authorities. Since
last week we have been
in contact with the local authorities and
the Embassy is also in contact with the authorities in
Mexico city. We can reassure everyone that we
are trying to obtain clear answers as we realized that
until now anyone with a FM3 could have a car
from Canada or the States. We were told by the local
authorities this morning that they received clear
orders to stay on standby and stop everything for the
moment as they are analyzing the origin of the crisis. After
this
meeting we understand that the interpretation of whom is
entitle to have a car from Canada or
United
States is unclear due to an interpretation of the customs
law. We would also like to clarify that 4
vehicles (2 Americans - 2 Canadians) were seized until now
and as we said before we should not be
listening to everyone who has something to say.

We were told that hopefully in the next 24 to 72 hours we
will receive clear guidelines from customs
authorities and we will stay in touch with them until than.
At this moment we believe we have done
all we could do and we need to wait to hear back from the
authorities and there is nothing else
that
can be done. Everyone should not use their car meanwhile,
stay calm and wait to obtain an update
from this Consulate or from the authorities. We will
strongly suggest that everyone does not take any
measures until there is a clear guidelines as nobody can
provide any solutions or suggest actions to
take until a resolution is obtained .

Best Regards,

Lyne Benoit
Honorary Consul of
Canada

[Ed]

The following is from the US consulate in Guadalajara:
At a meeting today (4/29) in Puerto Vallarta, Mexican customs/treasury
officials indicated the following:
- the legal advisor from Servicio de Administración Tributaria (SAT) in
Puerto Vallarta is currently at the SAT headquarters Mexico City trying to
verify any possible modification to current Mexican Customs Law regarding
vehicle importation requirements.
-  the campaign to check vehicles in Puerto Vallarta was ordered directly
from Mexico City, although the officials at the meeting did not wish to
provide a copy of the order nor the name(s) of the officials who ordered it.
-  These officials said they would need at least three days to prepare and
issue an official statement regarding the campaign and guidelines for
complying with the law.
We will continue to press Mexican officials for further clarification on
this important issue.

From:FRANKLIN
Tropicasa Realty
President, AMPI 2002-2004 (PV Board of Realtors)
 Subject: " NIGHT OF THE ADUANA" -- THE END!
Well, as you probably all know this has been a NIGHTMARE dealing with the fiasco in relation to the foreign-plated cars for the past week. However, it appears it’s OVER!
Credit should go first to Mel Bornstein for breaking this news first on the “resolution” of the matter – which should have never begun in the first place. In any case, confirmation has been received by us through the head of Customs here at the PV Airport, Sr. Miguel Colorado, that the “order has been lifted” in relation to foreign-plated vehicles. In other words, ALL people who have FM-3s are FREE to drive their cars within the country of Mexico and, more importantly in Vallarta … as it supposed to be and as it states in the Ley de Aduana, Article 106.
We are still attempting to pursue written confirmation from Mexico City, which should be coming down shortly. However, in the meantime, we have been told directly that no further action will be taken against LEGALLY IMPORTED foreign-plated vehicles!
Thanks to all of you who worked so diligently on this and who applied the appropriate pressure in all the necessary areas in getting this matter resolved. We were told repeatedly by Mexico City that any action taken locally to impound legally imported vehicles for people who held active FM-3s (no matter what their migratory status) was completely illegal. It seems that somebody finally got the message.
The title of this message was given to me by a good friend, Hank from Chiles Restaurant. I thought it was just too humorous not to share.
Now, it seems, we all have plenty of reason to wave to each other when we’re driving down the highways and byways of our adopted home, Mexico.
As AAA would say, “Happy Motoring”.