Update to IMMEX / Section 321 Mexico fulfillment program

I am told there was a meeting between the Mexican Government and fulfillment/3PL lobbying interests. A 90-day pause was discussed and seems likely to be announced. An official announcement is likely to be made this week (Mexico gov't remains on break until Jan 6).

If that happens, 3PLs will be able to import via NAPS avoiding the 35% duties. There would still be a 16% VAT on the goods, however the VAT is recoverable (albeit at a 5-6 month recovery).

Any inventory currently in Mexico will be grandfathered.

NAPS has received guidance from the Mexican Government on what needs to be done to reinstate its VAT Certification. They are currently working through the administrative steps and are expected to submit everything in the next few weeks. This will provide the 16% VAT shielding, though not the 35% duties.

Otherwise, if everything goes forward as announced, "taxes" would be 51% (35% + 16%) and brands would be required to comply with Mexican labeling requirements. If the 90-day pause goes into effect, brands would be able to import inventory with just 16% up front that *can* be recovered later.