Understanding Rule 8: Strategic Use of Import Duty Exemptions in Mexico.

Within the framework of Mexico’s trade policy, Rule Eight has become a strategic tool that facilitates access to essential inputs, parts, and components for the national manufacturing industry. Established in the General Rules and Criteria on Foreign Trade issued by the Ministry of Economy, this provision allows domestic producers to request authorization to import goods under tariff codes different from those listed in the PROSEC Decrees, when such goods are necessary for their production process.

The importance of Rule Eight lies in its ability to provide flexibility within the tariff system, allowing it to adapt to the real needs of production chains, which often require inputs not originally covered under their authorized PROSEC sector. In doing so, the rule helps companies maintain operational continuity, reduce production costs, and avoid supply chain disruptions, while ensuring the legality and traceability of the imported goods.

Functionally, Rule Eight operates through an individualized authorization process, in which the company must technically justify the use of the input, demonstrate its connection to the final product, and comply with specific requirements through the Mexican Digital Foreign Trade Window (VUCEM). Once authorized, the company is permitted to import the input at a preferential tariff rate, under the terms established by the authorities.

Thus, Rule Eight serves not only a regulatory purpose, but also functions as an industrial policy mechanism, enabling companies to remain competitive in global markets while upholding the legal integrity and control principles of Mexico’s customs system.

Rule Eight, as established in the General Rules and Criteria on Foreign Trade issued by Mexico’s Ministry of Economy, allows domestic producers to import inputs or goods not included in PROSEC Decrees under preferential tariff treatment, as long as those goods are essential for their production processes. However, when it comes to sensitive goods, the application of Rule Eight is subject to stricter requirements and additional scrutiny, due to potential impacts on strategic sectors, public health, security, or revenue protection.

These are goods classified by the Ministry of Economy as having high commercial or regulatory sensitivity, such as:

• • Textiles and apparel (Chapters 50–63)
  • Footwear (Chapter 64)
  • Certain steel products (e.g., Chapter 72)
  • Agricultural, chemical, or plastic products
  • Goods subject to non-tariff regulations, import quotas, or anti-dumping measures

Such goods cannot be imported under PROSEC benefits by default and require specific approval through Rule Eight.

1. Individual request to the Ministry of Economy

A. Filed via the VUCEM platform under the “Rule Eight Application” module.

B. The request must include:

• • Technical justification for the input’s use in the production process.
  • Technical data sheets for both input and final product.
  • Explanation of why there is no viable domestic substitute.
  • Production flow diagram or Bill of Materials (BOM).
  • Import history, if applicable.

2. Review and validation by the Directorate General of Trade Facilitation

A. Authorities will assess:

• • Whether the input is genuinely necessary.
  • If domestic industry or the internal market would be adversely affected.
  • If reasonable national alternatives exist.
  • Compliance with other regulatory requirements (e.g., permits or NOMs).

For sensitive goods, the review is more rigorous and may involve industry consultations, volume restrictions, or quota considerations.

3. Issuance of authorization resolution

A. If approved, the resolution includes:

• • Limited validity (typically 12 months).
  • Authorized tariff code (HTS).
  • Maximum quantity permitted.
  • Specific preferential duty rate (usually 0% or reduced).
  • Restriction of use exclusively in production processes.

4. Compliance and audit monitoring

A. The company must:

• • Submit usage reports on imported goods.
  • Prove their transformation and final use.
  • Maintain proper inventory records (especially via Annex 24, if IMMEX).
  • Avoid resale or diversion of goods to the domestic market without prior authorization.

Noncompliance may lead to revocation of authorization, administrative penalties, and retroactive tax adjustments.

Rule Eight for sensitive goods is a tightly regulated mechanism that grants exceptional preferential access to critical inputs not covered under the PROSEC framework. Its proper use requires technical planning, full traceability, and strict legal compliance, as misuse can result in severe consequences and the loss of tariff benefits. It is not a mass-access program, but rather a targeted industrial policy tool that should be used responsibly and with thorough legal support.