Active Finishing Regime

General Aspects

This customs zone regulated by the Customs General Law No7557, articles 163 to 166 and its regulations which allow introducing merchandise into national customs territory with the suspension of all types of taxes and low yield warranty.

This merchandise must be submitted to transformation, repair, reconstruction, mounting, assembly or incorporation by packages, machinery, general transportation equipment or devices of higher technological and functional complexity or used for other analogue purposes, in the conditions established in the regulation and dispositions, which is, issued by a competent administrative entity.

Methods

This regime has two methods:

1. 100% re-exportation Method (direct or indirect):

Those companies that re-export their total production to third markets can adopt this method. Companies that adopt this method cannot sell their products in the local market nor in Central America.

This method allows the entry into national territory of all raw materials, machinery and equipment required for its productive process, with the suspension of all types of taxes, to be transformed, repaired, assembled, incorporated into other goods and then re-exported.

2. Re-exportation (direct or indirect) and local sales Method:

Those companies that re-export or sell their production, to companies covered under the Active Finishing Regime in the local market, under the terms and conditions previously authorized by the Ministry of Foreign Trade, can adopt this method. To sell products in the local market, the beneficiary of this method must pay the total amount of taxes corresponding to the definite importation of the merchandise.

This method allows companies wishing to sell their products in the local market or Central America, to benefit from the regime, for that production to be re-exported. Although, in order not to generate disloyal competition, production sold in national territory or in Central America, must pay all corresponding tariff and internal duties.

Merchandise Covered under the Active Finishing Regime

• For example; raw material, primary form, including mixed (prepared or semi-elaborated)
• Semi-elaborated products, merchandise destined to administrative activities (i.e. desks, computers, office supplies), specific of the operation area or beneficiary production.
• The necessary for the preparation of food, facilities necessary to serve them, training equipment, furniture and facilities, security, as well as medical care or rehabilitation, destined exclusively to staff directly related to the operation, production, administration and transportation process of the companies.
• Required manufacture or elaborated products, and commercial, industrial or scientific samples.
• Labels, tags or similar that are incorporated to product to be re-exported.
• Containers, packing material and shipping.
• Chemical materials or of other nature, that are determined in quantity and quality necessary for its use in the process, although they are consumed or used without being incorporated into the final products, except fuel.
• Machinery, equipment, pieces, parts, accessories and spares parts that directly intervene in the production process, associated materials, mechanical, electrical, measuring, check control or research machinery, i.e., used in company operations.
• Molds, jigs, matrix, utensils and other devices that serve as compliment to other devices.
• Samples, molds, patterns or similar indispensable articles for the production system and for personnel instruction.
• In all cases, it must deal with merchandise directly related to the generation of operative capacity.

The abovementioned merchandise stay period, is six months, except those contemplated in clause h) and i). Said period can be extended by PROCOMER upon request of interested party, only once and up to an equivalent period.

Stay period for merchandise expressed in clause h) and i) is five years, and automatically extended for equivalent terms.

Temporary Pasive Finishing

The temporary passive Finishing-exporting regime is a customs regime, which allows temporarily exporting merchandise that is circulating freely through national customs, to be transformed, elaborated or repaired abroad to be re-imported according to the corresponding regulatory dispositions.

For the effects of this regime, it is understood as compensatory products merchandise obtained abroad from those sent temporarily export for its passive Finishing.

The taxable base for the effects of determining customs tax obligation will result in the difference between compensating product value and the value of merchandise initially exported and the merchandise tariff classification.

In case of merchandise repair, the customs tax obligation shall be determined by the incorporated foreign merchandise value, plus foreign rendered services for its repair, in conformity to applicable fees, according to tariff classification of returned merchandise.