Prosec and Regla Octava in Mexico

Prosec and Regla Octava are production promotion programs in Mexico separate from the Maquiladora and Manufacturing Export Industry Program (IMMEX), but companies may use these three programs together.

On the one hand, Prosec (Programa de Promoción Sectorial) allows the importation of a defined set of goods for use in the production of specific products for certain industries, at an ad-valorem preferential tariff, regardless of whether the goods produced are destined for export or for the domestic market.

Preferential import duties under Prosec range from 0 to 10%, according to the U.S. International Trade Commission (USITC).

Preferential tariff rates under Prosec apply exclusively to the importation of goods in specific sectors for specific end uses.

As of April 2022, these sectors were «electrical; electronics; furniture; toys; toys, recreational toys, and sporting goods; footwear; mining and metals; capital goods; photographic; agricultural machinery; miscellaneous industries; chemical; and rubber and plastic goods; steel; pharmaceuticals; drugs and medical equipment; transportation, except automotive; paper and paperboard; wood; leather; automotive and automotive parts; textile and apparel; chocolates; candy and similar; coffee; and food.»

The Mexican government provides a list of components and final products by HS code for each of these sectors, specifying the types of imported components that may be used and the final products produced to qualify for preferential tariff treatment under each Prosec sector.

Regla Octava

Most Prosec participants are certified to source/produce in more than one Prosec sector.

Porsec companies are also eligible for additional Rule Eight benefits, which is part of the Prosec program.

A rule eighth permit allows companies to import goods at reduced duty rates that are not eligible for Prosec preferential duties.

Such eligible goods include machinery and equipment, inputs, materials, and parts and components that are related to products to be manufactured or assembled in Mexico.

These goods are imported under a single tariff subheading 98.02 «special operations».

In order to grant a rule eight permit, the Mexican Ministry of Economy requires that the goods be unavailable or insufficiently available in Mexico, among other criteria.

Eighth rule permits are limited to a specific HTS code, product description, use and intended volume.

If the intended volume is exceeded, companies may reapply for a new permit to cover the additional volume.

According to the USITC, the eighth rule application process is relatively easy and quick, in some cases taking only two days for approval.