Background

On July 10, 2014, the Ministry of Finance and  Public Credit published on the Federal Official Gazette an amendments to the Foreign Trade General Rules ("FTGR") and their Annexes. Among other changes, this amendment sets forth that, as of July 25, 2014, importers of certain types of goods must now declare if such goods are protected by a trademark registration and if the importer is or not the titleholder of the trademark registration. The importer shall declare now the number  corresponding to the authorization granted by the Mexican Patent and Trademark Office (IMPI)

Notwithstanding the foregoing, on July 24, 2014, the Tax Administration Service ("SAT") published on its website Informative Bulletin P041, by means of which the SAT clarifies certain doubts and inquiries regarding operations subject to the obligation of declaring the "MC" code. Also, by means of the publication of Informative Bulletin P041, the term for making this obligation enforceable is extended. 

The full text of the amendment to the FTGR can be found in the following link:http://www.sat.gob.mx/sala_prensa/boletin_tecnico/Documents/Boletin2014_P041.pdf

The full text of the Bulletin published by the SAT can be found in the following link:http://www.sat.gob.mx/sala_prensa/boletin_tecnico/Documents/Boletin2014_P041.pdf 

Implications

Based on the amendments to the FTGR and their Annexes, as of the date in which this obligation is effective, importers of cigarettes, alcoholic beverages, medicaments, perfumery products, purses and wallets, apparel goods, footwear, caps, glasses and watches must declare on the import declarations, certain information regarding the trademark of the goods to be imported.

As a result of the publication of Bulletin P041 of the SAT, the date in which the obligation of declaring the "MC" code and the commercial brand of the product will become effective will not be July 25, but will be changed to the date in which the new amendments to the FTGR in which certain issues that were not clear on the publication of July 4th are clarified.

Facts to consider Pursuant to the provisions of the publication of July 4, 2014, importers of cigarettes, alcoholic beverages, medicaments, perfumery products, purses and wallets, apparel goods, footwear, caps, glasses and watches must declare on the import declaration, in addition to the trademark of the goods to be imported, the following information:

  • If the goods are protected by a trademark;
  • If the product has a trademark but such trademark is not registered in Mexico;
  • If the products have a trademark and the importer is the titleholder of such trademark. In this case the importer must also declare the number corresponding to the trademark registration;
  • If the importer has the authorization for the use and distribution of the trademark. In this case the importer must declare the number corresponding to the authorization granted by IMPI;

Clarifications to the Original Publication

Since the publication of July 4, 2014 generated certain doubts among taxpayers, on Bulletin P041, the SAT made the following clarifications:

  • Only nominative trademarks (i.e., those that identify the product based on its name) must be declared;
  • When a product is protected based on its nominative trademark, such trademark, the "MC" code and the corresponding complement must be declared. It should be noted, however, that enclosing or attaching the documents related to the trade mark (e.g., copy of the license agreement or the authorization issued by the Mexican Patent and Trademark Office) will not be necessary;
  • It will be possible to carry out the importation of goods even if such goods do not have a trademark, the product is protected by a trademark in other countries but not in Mexico or when a distributor is not the titleholder of the trademark or does not have the authorization for the use of such trademark (also known as "parallel imports"); and,
  • When besides a trademark the product has another distinctive sign, the trademark must be declared in the corresponding import declaration.

Conclusion

By means of Bulletin P041, the authority clarifies certain doubts regarding the application of the "MC" code and the term for making this obligation enforceable is extended until the date in which the corresponding corrections are duly published in the Federal Official Gazette.

As soon as the new amendment to the Rule and the "MC" code and its complements are duly published in the Federal Official Gazette, we will shared them with you for your reference.

Before registering a license agreement it is important to consider its implications in connection with taxes, transfer pricing and intellectual property matters, considering for instance, the way in which such registration would be canceled, if applicable.