Jan. 10 Latitude 38 Report
I usually provide links. I have learned that many people don't read 'em. Here's the entire report.
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Foreign Boat Impoundment Story Goes Mainstream
January 10, 2014 – Mexico
If you're tired of reading about the foreign boat impoundment fiasco in Mexico, you can imagine how sick we are of writing about it. But we'll soldier on until there is a resolution. The following are our comments to an AP news story that has appeared in Yahoo, the Washington Post, Fox News, MSN, and all over the place.
1. U.S. and Canadian boats are not left "in limbo." If impounded, they can be restricted to the dock to up to four months . . . at which point the Mexican government could decide to release, fine or confiscate them.
2. "Storming" the marinas wasn't an accurate characterization of what happened in late November. While AGACE agents arrived with marines armed with machine guns and a prison bus, and worked all through the night, the auditors were unfailingly polite. Indeed, they often told boat owners everything was fine, which is why some boat owners were so surprised to later find their boat on the impound list after all.
3. Big boats have been impounded, too. In just a short circle of our boat on Banderas Bay, five boats worth a total of more than $5 million have been impounded.
4. A Temporary Import permit does not prove ownership, a boat document does that. A TIP does not guarantee Mexico that a boat owner won't leave Mexico without their boat. Indeed, TIPs were created specifically to give foreign boat owners a legal means to leave Mexico without their boat. Having a TIP does not make it illegal to sell one's boat in Mexico, although there are legal guidelines that have to be followed.
5. It is indeed the responsibility of boat owners to comply with Mexican laws, which are easy to comply with. The problem was that if a boat owner wasn't aboard his or her boat, the auditors couldn't see some of the information they needed to see, and their default was to put most of these boats on the impound list. Even if the auditors were shown the necessary information when they visited again 10 days later, the boat stayed on the impound list. In the case of the marina we're in, AGACE discovered that 52 of the 53 boats they'd put on the list were in fact in compliance with Mexican law. Alas, they are still on the impound list and may be unable to move for four months.
In the last 17 years, our catamaran
Profligate has been cleared into virtually every port and marina in Mexico without a problem. Despite their being no change in the law with regard to TIPs, she was nonetheless impounded because nobody was aboard to show auditors things like the documentation number in the hull, engine serial numbers, and point out she's a custom-built boat and therefore doesn't have a brand or model name. Unfortunate and ridiculous.
6. In one case, a rep for the owner of a number of boats showed AGACE agents the same information for all the boats in his control. Most were not put on the impound list, but one inexplicably was.
7. A TIP is not a tax, it's a permit.
In the case of the AP story that appeared on the ABC International news site, the reader comments were devastating, citing a list of alleged abuses that would tend to make one's hair stand on end. Such as this one from Lou Kief: "In 1984 we came to Mexico on an old wooden sailboat we had rebuilt and spent the hurricane season in Puerto Vallarta's only marina at the time. We did all our paperwork to the letter, were good visitors, and waited for the weather to be favorable for us to continue our trip to the Panama Canal. While in Mexico, our "Temporary Import Permit" — which is issued for one year at that time — was set to expire. In bold letters at the bottom of the permit it said that it could be renewed at the port captain's office for an additional year for no fee. When I went to the port captain's office to get my free renewal, he told me it would cost $600 US dollars! I showed him the print where it said the renewal is free on the page. His reply: 'It is free but I'm going to make you go back to the United States to get it for free there. If you want it renewed here it will cost you $600 USD — that's how much you will spend on airfare to go to San Diego, hotels, meals.' It was extortion plain and simple, something officials in Mexico have been very good at for a long, long time."
Oh geez, just the kind of stories Mexico and fans of Mexico don't need to hear. Two points: 1) There weren't any Temporary Import Permits in 1984; and 2) 1984 was a long, long time ago, and Mexican port captains — and other civil servants — have become much, much more professional. While we're not saying bribes and corruption have disappeared in Mexico, we don't believe it's anything like it used to be.
There was also a different story in the Orange County Register:
1. Auditors weren't coming looking specifically for HINs (which are hull identification numbers), but primarily for Temporary Import Permits, document numbers in the hull and such. Unfortunately, the Mexican officials don't realize that HINs are poor indicators of anything, as boats built in the U.S. before 1974 don't have them, nor do most boats from many countries in Europe. In many other cases, the HIN number was ground out when the boat hull was sanded for repainting. Additionally, many hull numbers, even by companies such as Catalina, were inscribed with cheap engraving tools. As such, it's easy for anybody to put any hull number on any boat. That's why the document number permanently affixed to the hull is the U.S. Coast Guard standard.
2. The quotes from Juan Hussong, our friend from Ensenada, made it appear that he and the owners of impounded boats are at cross purposes: "Juan Hussong, a Mexican national with homes in both San Diego and Ensenada, had his boat inspected and cleared during the audit. He argues that the boat owners are responsible for the correct documentation. The marina managers are worried because they think they are going to lose customers, but honestly, it’s a new government and we have a new president, and they are trying to make things legal."
We agree with Juan that owners are responsible for correct documentation, which is why we and the overwhelming majority of foreign boat owners have it. It's so easy and inexpensive to get, why wouldn't anybody have it? The problem was that if nobody was aboard to show auditors evidence of compliance, the boat was put on the impound list — and stayed their even if the auditors were later shown the evidence within the prescribed time.
Hussong is also right about the new president and attitude toward tax collection in Mexico. Mexico has long had one of the lowest tax collection rates in the world, and the abuses are rampant. But the thing is, the abuses are primarily with regard to income and real estate taxes. Unlike the fateful assumption made by AGACE, cruisers sailing around in Mexico with a TIP are not tax cheats.
What's next? One would hope that the tremendous negative publicity will help resolve the issue quickly. AGACE has sent most of the impounded boat's TIPs to Banjercito for verification, and is soon going to learn that they are not fraudulent, and the owners of the impounded boats are in Mexico legally and don't owe any tax. Hopefully AGACE will swallow their pride, with a big help from Tourism and others, and the boats will be released.
Sometimes, however, Mexican agencies can be stubborn. As such, there is no guarantee that AGACE won't respond by hitting all the other marinas in Mexico, such as the three big ones in La Paz, the three in Mazatlan, two more big ones in the Vallarta area, as well as Barra, Ixtapa and others. If they do, and they heed the same standards as they did auditing boats in the first eight marinas, there could soon be more than 1,000 foreign boats impounded in Mexico.
The Register article notes that Mary Baker, owner of the Mary Conlin Company in Newport Beach, which specializes in boat documentation services, is advising clients not to go to Mexico at this time. Rafael Alcantara, Harbormaster at Riviera Nayarit in La Cruz, encourages U.S. mariners to come to Mexico, noting that AGACE hasn't conducted a raid since late November.
We at
Latitude 38 aren't giving any advice. Given all the negative publicity, we can't imagine that AGACE and Mexico would double down on this blunder. Then again, it's unimaginable that they ever made the blunder in the first place. After all, as we pointed out, cruisers are Mexico's greatest goodwill ambassadors. To have so severely punished innocent goodwill ambassadors has been a disaster.
The 32nd biennial San Diego to Vallarta Yacht Race is slated for March 13-21, and so far there are 22 superb entries. Presumably most of whom will stay for MEXORC, an event the Mexican government usually pours millions into. Given what's happened, and what might happen, it's unclear if entries will drop out or what. We hope the whole mess is resolved before then, and that Mexico starts a road back to redemption with a great Vallarta Race and a great MEXORC.
What about the Ha-Ha? We expect there will be a 21st Annual Ha-Ha at the end of October, but only because we expect this fiasco will be long over by then. Obviously we would have no interest in luring anyone to Mexico if we felt there was any significant chance their boat would be recklessly impounded or confiscated.
What to do if your boat is in Mexico now? Given the terrible publicity the first raid has generated, we can't imagine there will be others. But you never know. If might be cheap insurance to put copies of all your documents and TIP, as well as directions to the document number in your hull, and the HIN number — assuming your boat was ever given one — in a plastic bag and tape it to your lifelines. We know it sounds crazy, but these are crazy times, and others have decided to do it.
- latitude / richard
