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Net Traps Used to Protect the Vaquita

Our federal authorities are taking extreme measures in order to protect the “vaquita marina”, the small porpoise living in the Sea of Cortez that is already in the brink of extinction, with a new project consisting of dropping huge cement blocks with a reversed hook in the ocean floor in order to “trap” any net that is used in the area.

Although the northernmost part of the Sea of Cortez is a no tolerance zone for fishing nets, there have been many ships caught using them in the area, that’s why there is constant patrolling in the area from the Mexican navy and the Sea Shepherd NGO.

Authorities dropped 193 of these traps in the protected zone and they have set in place a program to look for lost nets in the ocean to avoid the possibility of a vaquita getting trapped in one of them.

Given the continued rate of bycatch and low reproduction of the vaquita, it is estimated that there are fewer than 10 vaquitas alive as of February 2022.

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Ecological Patrol Attacked By Fishermen

The crew of one of 12 vessels operated by Sea Shepherd fell under attack by poachers inside the Vaquita Refuge in the northern part of the Sea of Cortez. Sea Shephard is an international conservation society dedicated to saving marine wildlife. Their mission is to end the destruction of habitat and slaughter of wildlife in the world’s oceans.

Dozens of angry fishermen in pangas raced alongside the Sea Shepherd ship Farley Mowat, hurling objects and attempting to foul the ship’s propellers with their illegal nets.

Sea Shepherd for months has been patrolling, removing the gillnets set by fishermen catching totoaba. Totoaba bladders are sold on the black market in China for up to $10,000 per bladder.

Nets used to catch totoaba are a threat to critically endangered vaquita porpoises, and Mexico has banned gillnet fishing but allows Sea Shepherd to patrol the refuge as part of an effort to save the vaquita from becoming extinct. (The vaquita population is estimated at fewer than 30.) Totoaba are also threatened with extinction, mostly because of the damming of the Colorado river where they spawn. And the crazy Chinese believe they are a treatment for fertility, as well as circulatory and skin problems. The Mexican government pays the fishermen to not fish, but they can’t pay as much as the profit from selling the fish.

Sea Shepherd said in a news release that the tense incident involved 35 pangas swarming around the monitoring vessel until the Mexican Navy  zoomed in to help.

 Part of the news release reads:

 

The Sea Shepherd ship approached the pangas where obvious illegal poaching was taking place, as totoaba fishing gear was detected being loaded into a boat. The poachers attacked by hurling lead weights, anchors, trash, dead fish and even Tabasco sauce at the vessel and its wheelhouse windows in addition to Molotov cocktails they hastily prepared. They also sprayed gasoline at the ship and poured gas in the sea around the vessel.

Poachers then dropped one of their illegal gillnets in front of the bow of the moving Sea Shepherd vessel in an attempt to foul the ship’s propellers. Five angry poachers boarded the Farley Mowat and looted multiple objects from the vessel’s deck while it was temporarily immobilized.”

Sea Shepherd crew used fire hoses to keep poachers from entering the ship, while calls for assistance were made. Navy sailors stationed on the ship were under orders not to fire on the fishermen.

The fishermen began to disperse as a Navy helicopter arrived overhead. As the Farley Mowat got under way after its propellers were cleared of netting, the vessel was met by a Navy ship and the situation was brought under control. It was not clear if any arrests were made, or if anyone was injured.

Stated Sea Shepherd founder Paul Watson: “Sea Shepherd will not be deterred by violence. Our mission is to prevent the extinction of the vaquita porpoise and we will continue to seize the nets of poachers in the Vaquita Refuge. Sea Shepherd salutes the quick responsiveness of the Mexican Navy in defusing a dangerous situation”.

Welcome To the Northern Free Zone

One of the campaigns promises that gained more supporters around here for our new president, Andres Manuel Lopez Obrador (or AMLO for short), was the proposal of a new “Free Zone” along the northern border that would reduce taxes, increase the minimum wage 100% and lower fuel prices to try and match those in the USA.

Since the first day of the year, this promise has become a reality, and you are now living in the new free zone for the northern border.

So, what does this mean for you? As a consumer, this means that you will now be paying 8% IVA on most products and services instead of the 16% you usually pay. For those of you unfamiliar with IVA, that’s the Mexican equivalent to the VAT in the US. Note that I said most; I will explain that later.

If you have a business, you will also have another benefit: Instead of paying the usual 30% on the ISR (income tax), you will now be able to receive credit for 10% of that. This means that you will only be paying 20% now.

Regarding gas prices, we have already seen some gas stations lowering their prices, since they have a special benefit in that they won’t be charging any VAT on gasoline and diesel; this reduced gas prices to exactly 16%. This reduction doesn’t actually match it to prices in the US, but it definitely closes the gap a little bit more.

Minimum wage was doubled to $176.72 pesos per day (about $9 USD); the older wage at $4.50 was a joke, and almost nobody was working for that.

Since the newly created Free Zone is defined by a decree and not a law, businesses must register for it and they will have to meet certain requirements; therefore, don’t shout bloody murder if you see 16% IVA in your ticket, since there is a possibility that some businesses don’t meet the requirements or just haven’t applied yet.

In order to be able to obtain the benefits businesses need to prove that at least 90% of their total sales are from the border region. They will also be asked to prove that they have a valid address in the region for at least 18 months. These two requirements are key in discouraging mainland businesses from establishing an address in the border just to obtain said benefits.

Businesses that are already established have until January 30th to file their application, and newly established businesses will have 30 days after registering their businesses with the SAT (which is the Mexican IRS).

The free zone objective is to increase competitiveness with the US, avoid migration and make it more attractive as an investment option.

If you were here back before 2014 you might remember that we already had lower taxes here in the border, but that benefit was removed by president Peña Nieto. At that time VAT in the area was 11%. This means that taxes now will be even lower than at that time.

Several analysts say that Northern Baja will benifit the most  from this new decree, as the biggest percentage of the population in the state lives near the border, and because all its municipalities are considered part of it.

For now, the decree will be valid only for 2019 and 2020. Surely, results will be analyzed after these two years and a decision will be made on whether to extend it or not.

Watch out for those Santa Ana winds

Health authorities from Baja are recommending staying at home when Santa Ana winds are active. Problems in the respiratory tract, eyes and skin have been reported during the winds, and thus they are recommending staying home with doors and windows closed.

Dr. David Perez, chief of medical services, stated that these winds affect the health because they carry a lot of dirt with them because of the severe dryness. He also recommended to stay away from street food during this condition, as it can get easily contaminated by pathogens in the wind and can induce gastric diseases.

Perez emphasized the importance of drinking enough water and making sure house pets have enough clean water, which should be changed more often to avoid having them drink contaminated liquids.

Mexican Land Trusts, Big IRS implications

I was intrigued by a recent presentation by a Mexican bank on the subject of Fideicomisos (land trusts). By way of a quick primer, ownership of real property in the “restricted zone” (100 km from borders, 50 km from shore) by a foreigner must be done through a Fideicomiso.

As it turns out, Mexican banks have a monopoly on this Fideicomiso business. The bank’s role is to hold the title to property on your behalf. One can direct the disposition of the property; sell, give away, or otherwise encumber the property. ‘Fidos’ are good estate planning vehicles from the Mexican perspective. At death, the property is transferred via the trust, perhaps a more efficient mechanism than Mexican probate.

Some banks appear to be pulling out of the “fido” market. When I asked why, I was told there is increased emphasis on anti-money laundering compliance by bank regulators, which to me means there may be a new spotlight on this market segment.

One of the reasons I attended was to see how much awareness there was on the part of bank officials on the federal income tax aspects of Fidos.  None. Zilge-ola. That means you, the person who may need to enter into a fido to own property, must pay special attention, because the bank won’t tell you.

Here’s the rub. What may work from a Mexican perspective may be sheer disaster from a U.S. tax perspective. Properly structured fidos (meaning they meet IRS requirements) are deemed to be “disregarded entities,” and the IRS will not bother you. When they are not, they become IRS ‘radioactive’. They become reportable foreign trusts. Every time there is an IRS reportable ‘anything’ you have better had done it right from the beginning.

“Good” fidos have only one property in them.  At the presentation it seemed like it was common to add more than one property per fido. Again, ok from the Mexican point of view, but runs afoul of IRS ‘safe harbors’. In fact, bank officials later confirmed they gladly would add properties to an existing fideicomiso, for a fee.

Another trait of “good” fidos:  They do nothing but hold title to property. Be wary of the bank doing other things for the property; managing it, paying taxes or other things. The IRS does not like that.

Food for thought:  New owner, new trust, or just substitute the name? Does one inherit the federal tax troubles of the last fido owner?

Orlando Gotay is a California licensed tax attorney (with a Master of Laws in Taxation) admitted to practice before the IRS, the U.S. Tax Court and other taxing agencies.  His love of things Mexican has led him to devote part of his practice to federal and state tax matters of U.S. expats in Mexico.  He can be reached at tax@orlandogotay.com or Facebook: GotayTaxLawyer.  This is just a most general outline. It is informational only and not meant as legal advice.

Dealing With An Emergency Here If You Don’t Speak Spanish

Expat911 is a smart phone app that was designed by expats for expats.  It is a service that covers you for all types of emergencies when at home, on the road or out for a night on the town.  It utilizes GPS location services which allow the operators to target your exact location.  Many of us may have the capability to say our home address to Mexico’s Spanish speaking 911 operators, but what happens when we are in an unfamiliar area?  How can you explain where you are when you have no idea what the names of the streets are in the area during your emergency?  Also, how will you explain in detail about the type of emergency you are having?

Expat911 is an app that works on Android and iPhone devices.  Within the app you have a profile with information that will speed up the process when reporting an emergency.  You have a basic medical profile which has your blood type, allergies and sicknesses.  There is also a contact area where users can add 1 US/Canada contact and 2 Mexico contacts.  Expat911 will notify these contacts after your emergency has been reported to Mexico’s 911 on your behalf.  This way your family back home will know about your situation and so will the people that you trust here in Mexico.  The Mexico contacts can be neighbors or local doctors that speak English.  Many times our neighbors can come to our aid while we are awaiting the emergency services to arrive.  The Mexico contacts can also be used for our insurance agents or medical air evacuation plans that we may have in place.

So how does Expat911 work during an emergency?  You only have to click on one of the 3 emergency buttons.  There is a button for Police, Ambulance and Fire.  Within seconds an English speaking operator will call your phone and verify the emergency.  If you do not pick up, then they will assume that this is a serious emergency and report to Mexico’s 911 on your behalf.  If you answer, they will verify some quick details about your emergency and then call Mexico’s 911 to report the emergency.  Once the emergency has been reported, they will then confirm this with the user.  At this time they will stay on the phone with you if you request them to, or they will start calling your emergency contacts.  So it is very simple to use during an emergency and all you have to do is click a button.  They will take care of the rest.  They also record all calls so that there is a record of the emergency being reported to Mexico’s 911 and the call with the user as well.

Expat911 does have a cost to use their service.  It is important to understand that this is a 3rd party service who worked directly with Mexico’s C4 and C5 offices around the country.  C4 and C5 are the agencies that handle all 911 calls in Mexico.  Expat911 has a direct line of communication with all local C4 and C5 offices nationwide.  It is also important to realize the value of this service.  An alarm in our home has a cost of 1,000’s of pesos to install.  Then we pay an average of 250 pesos per month to have the service in case our alarm goes off.  So the yearly fee of an alarm in Mexico is 3,000 pesos on average.  This alarm system will only cover your home and you while you are at home.  There is no translation services included with your alarm company and you are only covered for police emergencies.  This is why we see the huge value in Expat911 which has a cost of $ 99.00 per year.  That cost is under 2,000 pesos per year and will cover you everywhere within Mexico.  Plus Expat911 has the added benefits of being 100% English spoken and contacting your friends and loved ones during your emergency.

Expat911 has recently implemented a couples plan.  The first user pays the full amount upon registration.  They will then contact Expat911 to ask for a coupon code which will be used on their spouse or family members.  The user will be provided with a 50% off coupon code for any other family members that wish to use the service.  So it is not just limited to your spouse and can also be used for you children, brothers and sisters who may also be living here in Mexico with you.  All additional accounts have a fee of $ 49.50 which is 50% of the original rate.

Expat911 is already serving a large number of expats in Mexico.  They have active users in 11 states and are growing daily.  It is a great service for those of us who have not been able to develop a strong command of the Spanish language.  It is also great for those of us who do speak Spanish well enough, but might worry about the stress during an emergency hampering our ability to speak another language.  It is also a great aid when we are traveling to an area that is unfamiliar to us.

If you are interested in using this service, we highly recommend reaching out to the company.  You can visit their website here:  https://www.expat911.mx/ref/baja/  If you have any questions about the registration process or require assistance, then you can email them directly at info@expat911.mx.  You can also request a call from them by sending an email and setting up a time to speak with a representative.

Don’t Forget to Turn Back The Clock

Daylight savings time ends this Sunday, November 4 at 2:00AM, so don’t forget to turn back the clock one hour before going to bed on Saturday. You won’t want to miss an hour of your favorite Baja brunch buffet!

Northern Baja sets back the clock the same day as Southern California because of the huge commercial relations between the two areas. Almost every other city in the country already did it this past weekend (except for a few border towns).

Baja California was the only state in Mexico to observe the daylight savings adjustment for many decades, until 1996 when the rest of the country decided to join the party.

A new bill proposal in California’s Congress would give voters a chance to end daylight savings for good. If that goes through Baja would have to follow suit just as Sonora has done with Arizona since 1998.

National Survey for The Mexico City Airport Starts Today

From today and until October 28th, polls will be open in order for Mexican people to decide the faith of the deeply controversial new Mexico City airport.

There are just two options to vote from, one is to continue construction of the new airport in Texcoco and the other option would be to expand the current airport, the Toluca airport and build two more air strips in the military air base in Santa Lucia.

The construction is already ongoing or the Texcoco airport.
Construction is already ongoing on the Texcoco airport.

The poll is organized by Lopez Obrador or AMLO as he is better known, although he hasn’t stepped into office yet (he will do that on December 1st) he said he wanted to gain some time and ask people how they feel regarding the airport.

AMLO has been against the new airport from the start because, he says, it was just a monument to corruption since on the first phase the project was already over budget by over 5.5 billion USD. The total cost is said to be 15.5 billion USD.

The new airport was beautifully designed by Norman Foster, an internationally acclaimed architectural design group.

In Baja, several polls are installed in every municipality although the one in Rosarito was almost cancelled because the organizers were robbed of all the material from their truck a couple days ago.

VIDEO: Helicopter Crashes Into San Felipe Sea

A helicopter from the Mexican Marine crashed into the San Felipe sea this last Saturday at 3:40 PM during a surveillance operation that was focused on finding illegal fishermen, in an effort to protect the few vaquitas left.

The SEMAR (or Mexican Marine) informed that there were 12 people on board of the helicopter, 9 of them are not harmed, 2 were transferred to local hospitals in San Felipe with wounds, one more is critically wounded and another one hasn’t been found.

In a strange turn of events, the marines were promptly rescued by the same illegal local fishermen that they were chasing.

This is the third helicopter that has crashed in Baja since last year, after two police helicopters also crashed last year on land in different events.

Video here:

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