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Amnesty for “Chocolate” Cars in Mexico

Mexican President Andrés Manuel López Obrador recently signed a decree to regularize used cars that were imported into Mexico illegally, also known as “chocolate” cars.

The reprieve that allows owners of “chocolate” cars to pay a one-time fee of 2,500 pesos ($124) to formally legalize and register their vehicles, only applies to cars that were already in the country at the time the decree's entered into force on October 19, 2021.

While this seems like a good measure that favors mostly low-income owners of those kinds of vehicles, most of the cars had been smuggled and many may be stolen. Up to 25 percent of the country’s total vehicle fleet is in fact unregistered cars, mainly from the United States, illegally imported into the country and driven with perhaps forged or retired plates.

Those protesting against the new law have argued adverse effects on the local economy and the drop of new car production and sales, putting at risk 2 million jobs of people working for car manufacturing companies. In addition, an overall impact of the decree on crime is up for debate as many have criticized that it apparently endorses more illegal activities and allows organized crime to launder foreign cars already in their possession, as well as a negative impact on environmental pollution and the health of residents due to their high mileage and age.

López Obrador stated that legalizing “chocolate” cars would help poor families that need them to get to work, alleging that “they use these because they can’t afford to buy a car from an agency…”. “With these cars, they may take their kids to school”, he said.

© 2023 Foley & Lardner LLPNational Law Review, Volume XI, Number 356
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About this Author

Erika Padilla Foley Gardere Arena in Mexico City Transactions Corporate
Associate

Erika Padilla is an associate at Foley Gardere Arena in Mexico City. She has experience in tax and customs litigation and controversy, representation before tax and customs authorities, corporate and international taxation (tax planning and consulting). She also has corporate counsel experience with knowledge in the legal needs of a corporation from the inside, such as drafting, reviewing and negotiating all types of contracts and legal documents, including finance and banking agreements, providing legal advice to the commercial and investment departments and developing the organization’s...

52-55-5284-8546
Marcos Carrasco Menchaca International Trade Attorney
Partner

Marcos Carrasco-Menchaca provides advisory and consulting services related to international trade compliance, customs, free trade agreements, customs litigation and taxation on foreign trade, as well as rendering services in international business transactions and administrative litigation.

Marcos has broad experience in advising the implementation of governmental exportation programs, such as the registration of companies in the Mexican Maquila Program (IMMEX), VAT certification, Sectorial Promotion Programs (PROSEC) and Drawback, among others.

A recognized international...

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