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Is Mexico Committing Nautical Tourism Suicide?

We sure hope not, although thanks to the actions of a new sub-agency of Hacienda (the Mexican IRS) called AGACE, it appears the country is on the verge of doing just that — and even worse, perhaps setting the stage for possible problems with the United States government.

In the last month AGACE, which was created by the new Peña Nieto administration to be auditors for foreign commerce, has been checking the paperwork of foreign boats in 12 marinas in Mexico. To be legal in Mexico without having to pay duty, foreign boat owners are required to possess their boat documentation, proof of clearing into Mexico, and a Temporary Import Permit, and have all these documents on file in the office of whatever marina the boat is in. This is perfectly reasonable.

According to a harbormaster who attended a big meeting in Mexico City yesterday with AGACE, Tourism, and other officials, 338 foreign boats were found to be out of compliance with these rules in just the 12 marinas that were checked. That’s a huge number, so let us give you a hint why.

We at Latitude 38, who have undoubtedly been the biggest promoters of nautical tourism to Mexico for the last 30 years, have had our catamaran Profligate put in what’s called ‘embargo precautorio‘, or precautionary embargo. It’s not that we didn’t have our boat documents; we did. It’s not that we don’t have a Temporary Import Permit; we have the same 20-year permit we’ve had for 17 years. It’s not that we can’t prove that we checked into Mexico because we have that document, too.

No, our ‘crime’ is that we weren’t on our boat when AGACE officials, backed by armed Marines, came through the marina checking paperwork. Much of Mexican law is based on Napoleonic Law, where you are considered guilty until you prove yourself innocent. Since we weren’t around to show our paperwork, AGACE assumed Profligate was not in compliance with Mexican law (guilty), and thus is now under ‘precautionary embargo’.

It gets even more ridiculous. When AGACE officials came around a week later, Doña de Mallorca was aboard, and showed them the documents. Nonetheless, Profligate is still on the embargo list.

Other boats were found to be out of compliance because of misspellings on documents made by officials in the United States or Mexico, because hull identification (HIN) numbers were painted over after many years, because AGACE officials who know nothing about boats didn’t know where to look for various identification numbers, and so forth.

Boats under ‘precautionary seizure’ are not allowed to leave the dock, as they are considered to be like foreign merchandise on which duty hasn’t been paid. 

There’s just one problem with this. Most of the vessels in question are U.S. documented vessels, and it’s our understanding that it’s illegal to impede the transit of such vessels unless a crime was committed. We can’t imagine the U.S. government is going to stand by with hands in pockets if 338 U.S. boats, worth tens millions of dollars, are illegally held for any period of time.

Surely, one would think, these minor problems could quickly be cleared up. Not so. At the meeting in Mexico City yesterday, AGACE gave no timetable for embargoed boats to be "liberated." But we’ve learned today that AGACE has up to four months, under their rules of operation, to assess the status of boats that have been seized. Consequently, there are cruisers who can’t move their boats, and there are foreign boat owners who won’t be able to take visiting family and friends sailing over the holidays. The damage to Mexico’s reputation will be growing by the day, and right at the height of tourist season.

To say boat owners are pissed off would be an understatement. Both Canadians and Americans are already starting to call their government representatives to protest. If you think marina owners, Mexico Tourism, and other business interests, such as those involved with real estate, like this, you couldn’t be more wrong. After all, it perpetuates the image of Mexico being a scary place, where tourists and retirees can’t feel safe or believe their assets are secure. We hope this matter is resolved very quickly, as we don’t think it accurately reflects on Mexico or even the Mexican government as a whole. But the damage will build with each passing day.

Please stay tuned.

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There are still a few opportunities to get some racing in before Christmas if you’ve gotten all of your holiday shopping done (see the next story if you haven’t).