West coast yachtsmen and brokers are very aware that entering into Mexico for a pleasure cruise requires filling out paperwork to create an MTIP (Mexico Temporary Import Permit). The US requires non-US flagged boats to fill out a US cruising permit. It is a standard procedure when visiting a foreign country to arrive with a Q flag, follow their laws and when admitted fly their country courtesy flag.

What you may not know is that there are some big differences between how the U.S. and Mexico receive visiting yachts and if you are not careful it can cause a lot of grief. 

The CYBA (California Yacht Brokers Association) now requires the owner of any boat listed for sale to answer if the vessel has ever been to Mexico. If the answer is “yes” the owner needs to have the MTIP paperwork (physical hard copy) ready and available for cancellation at closing. I have taken this concern one step further and include the following language in my purchase and sale agreements to learn about each vessel’s Mexico history as part of the due diligence I perform for my buyers:

If SELLER has traveled to Mexico with VESSEL and has an MTIP (Mexico Temporary Import Permit), SELLER agrees to and is responsible (at SELLER expense) to cancel the MTIP and to provide proof of this cancelation to BUYER and BROKERS before CLOSING.

Recently I got a frenzied call from a fellow IYBA Florida broker who sold a boat I had previously been associated asking for my help in tracking down previous owners. Both the new owner and broker were innocently naïve that this vessel had previously been entered into the Mexican web-based tracking system.  Additionally, neither the broker, nor the client had ever heard about the MTIP paperwork and were completely taken by surprise.

When the unsuspecting buyer cleared into Mexico (months after the purchase and after transiting the Panama Canal then heading north) he was caught up in a very serious violation with severe and immediate consequences. Since the previous owner (not my client) had never cancelled the MTIP the Mexican authorities impounded the vessel and threatened the new owner with incarceration.  Thus launched a series of phone calls trying to find the illusive MTIP paper, an incredibly important document required to resolve this situation that appears to be lost. A US marine attorney is trying to assist, but this is a situation that could have and should have been avoided. 

Coincidentally, I just closed on a 55’ trawler in Florida. It had cruised on the U.S. west coast and come through the Canal to Florida so had obviously traveled through Mexico. We knew about the MTIP when the boat was listed (question in the CYBA listing agreement) and reminded the seller about the MTIP upon receipt of the offer through the purchase agreement clause above.

Once we had acceptance after survey, the seller forwarded the original MTIP document to the maritime attorney in San Diego and paid a very reasonable fee of $300 for the MTIP to be cancelled. My customers will be free to clear in to Mexico with a clean slate and can start afresh by filling out a new MTIP.

Please review the importance of understanding MTIPs with your fellow brokers and consider

a) Asking your sellers about MTIPs when they list and,

b) Including language requesting MTIP cancellation at closing when you write up an agreement.

Article Author: Jeff Merrill, CPYB