American cruising sailor Tom Spencer has told his personal story of the arrival of tax investigators into the Coral Marina in Mexico last November. He said he didn’t think much about it , but noticed that inspectors were checking all the boats in the marina. He didn't dream that was was taking place would have such far-reaching and damaging repercussions.
What was taking place would soon confound all visiting cruising sailors, some of whom had been visiting Mexico in their boats for many years. Mexican tax authorities impounded more than 300 foreign-owned yachts, and some of them remain tied up by under the embargo today, infuriating owners.
Richard Spindler, publisher of Latitude 38, a monthly magazine for sailors, also had his yacht impounded and led a publicity campaign aimed at freeing the boats.
'I had one gentleman come by the boat and ask to see some papers,' Spencer told Kansas Evening News. 'I said, ‘What do you want to see?’ He said, ‘Where’s the serial number of the boat?’ I said I didn’t know, just look around.'
The problem, Spindler said, is that the Mexican government agents had little knowledge of sailing boats, unaware that those built before 1972 were not required to have hull identification numbers. Even after that date, vessels built in Europe or Asia often don’t have such a number.
The impounding of 337 mostly foreign-owned sailboats and yachts at 11 marinas around Mexico on Nov. 26 has affected not only hundreds of American and Canadian boat owners but also marinas, crews, dry docks and, more broadly, Mexico’s reputation as a safe and reliable destination for boat lovers.
Nearly half the vessels have subsequently been freed. But at least 190 remain impounded, tied up in red tape and confusion in raids that initially seemed aimed at rooting out tax cheats and boat thieves.
Like many retired American sailors cruising Mexican waters, Spencer had difficulty communicating in Spanish with the federal tax agent the morning he came asking questions. But some things needed no explanation. Mexican marines posted at each wharf 'had their big rifles out,' and tax agents seemed to mean business.
Spencer started to worry. He contacted the person who surveyed his cutter rig when he bought it back in 1999, asking where he could find the Hull Identification Number, equivalent to a VIN on an automobile.
'He said it’s probably on the starboard side of the hull,' Spencer recalled.
It was too late. Spencer’s 48-foot boat, Symphony, like 336 other mostly foreign-owned sailboats and yachts, was legally impounded, unable to leave harbor.
'There were four dinghies that they also impounded,' said Arnulfo Espinoza Rodriguez, the dock master at the Coral Marina. They were the exception. Most of the seized boats were large vessels, a few worth millions of dollars, but 'the vast majority are in the hundreds of thousands of dollars.'
Many boat owners were not at the marina that day. Since the marina is on the Pacific coast of the Baja Peninsula, only 70 miles south of the U.S. border, owners often leave vessels docked here while living elsewhere.
Moreover, boat owners are not required to pay tax or duty if they have a 10-year Temporary Import Permit, which costs around $50.
Marina owners naturally grew incensed at the harm the seizures were doing to their industry, and the lengthy delays in releasing impounded boats. Some boat owners are known to have left in the dead of night, not willing to stay around at Mexico's pleasure.
Many boat owners won't speak out about the problem, fearing reprisals. 'Until the boat is safe and in my hands I will not breathe a sigh of relief nor will I speak to anybody about my experience,' one Canadian owner said recently.