Foreign vessels of «extraordinary specialization» are exempt from the requirement of flagging in Mexico, being able to provide cabotage service indefinitely, renewing the temporary navigation permit as many times as necessary.
In 2022, according to information from the World Trade Organization, nine foreign vessels of «extraordinary specialization» provide cabotage service, for example, to transport people and materials to Pemex platforms.
The transportation of goods and people in jurisdictional waters and cabotage service must be provided by Mexican controlled shipping companies (51% of the capital) and in Mexican vessels.
In the case of cabotage, if there are no Mexican shipping companies or vessels or they cannot provide the service, the Dirección General de Marina Mercante (DGMM) may authorize foreign shipping companies and/or vessels to perform these operations.
In these cases, the DGMM issues a temporary navigation permit, for an initial duration of three months, which may be renewed for up to two years.
At the end of the two years, in order to continue providing cabotage services, the foreign vessel must be flagged in Mexico.
Foreign Vessels
According to the Maritime Navigation and Commerce Law (Articles 8 and 39), the Secretary of the Navy (Semar), only if the Federal Economic Competition Commission (Cofece) determines that there are no effective competition conditions in a relevant market, may: establish the bases to regulate the rates and reserve, totally or partially, certain international cargo transportation, so that this service may only be performed by Mexican owners or Mexican shipping companies with Mexican vessels.
This reservation can only be maintained as long as there is a lack of competition and effective competition.
There were no cargo reservations during the last four years.
According to the authorities, Mexico’s international traffic is mainly operated by foreign vessels.
To promote the development and participation of the Mexican merchant marine, Mexico continues to provide support to the Mexican shipping industry and Mexican shipping companies through the Fund for the Development of the Mexican Merchant Marine (Fondemar).
The support provided consists of bank guarantees covering up to 50% of the amount of the credit obtained up to a maximum amount of US$5 million; higher amounts can be guaranteed if approved by the DGMM.
During the last four years, Fondemar resources were not used.
Mexico maintains limitations on the nationality of personnel working on board Mexican-flagged vessels.
In this regard, all crew aboard Mexican vessels must be of Mexican nationality.
