Alternative Staging Regime, an option to comply with USMCA rules of origin for passenger vehicles and light trucks.

On April 30, 2020 the Mexican Ministry of Economy published in the Federal Official Gazette a decree announcing guidelines and requirements for passenger vehicles and light trucks producers to file petitions to use the alternative staging regime in order to comply with the new applicable rules of origin under the USMCA to receive preferential duty treatment.   All those interested producers must submit applications for the alternative staging regime no later than July 1, 2020.

 

The USMCA provides a transition period of 3 years, which annually increases the regional value content (RVC) -including steel and aluminum content-, and labor value content (LVC).   However, the alternative staging plan is also provided by virtue of Article 8 of Annex 4-B of USMCA which is an alternative plan to comply with rules of origin to expand the transition period for up to 5 years (2 years more).

 

Finally, it is expected that USMCA enters into force on July 1, 2020.

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