© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
Mexican Customs Law
Amendments and Latest Developments
Adrienne Braumiller, Partner www.braumillerlaw.com
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
I. Mexican Customs Law Amendments
Ley Aduanera • Amendments published on December 9, 2013 • Some articles became effective the day after publication (Dec
10, 2013) Mexican Customs Broker: • Exporter/importer may conduct customs operations
o on their own; or o through a customs broker; or o through a legal representative
2
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
I. Mexican Customs Law Amendments
Pedimento • Filed electronically • Can be corrected as many times as needed
o Prior to activating the automated selection system o No sanctions will be imposed o SAT may still audit corresponding customs operations
Mexican customs may: • Send electronic notifications and request information • Audit company’s electronic files • Confiscate goods when:
o False name or address of foreign supplier is declared, or o Foreign supplier cannot be located abroad
3
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
I. Mexican Customs Law Amendments
IMMEX and bonded warehouses were VAT exempt January 1, 2015, 16% VAT has to be paid A, AA or AAA certifications, provide a credit for the VAT already paid • Significant impact is expected on the IMMEX finances and cash
flow • IMMEXs, their Mexican and foreign suppliers and clients need
to be well informed and advised on how to: o Minimize their finances and impact on cash flows o Obtain the certification o Seek a VAT credit or reimbursement from the Mexican customs
authorities
4
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
II. IMMEX .
5
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
II. IMMEX IMMEX’s responsibilities: • Maintain goods in the facility • Keep complete and accurate records • File reports • Implement automated inventory control system • Determine and pay the corresponding customs duties
6
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
II. IMMEX IMMEX are responsible for paying customs duties as set forth under: • Mexican Harmonized Tariff Schedule
o Ley de los Impuestos Generales de Importación y Exportación (LIGIE)
• Industry Promotion Sectors o PROSEC – reduction of duties for specific industries o 8th Rule – duty free for PROSEC entities
• Trade agremeents signed by Mexico o NAFTA:
NAFTA Article 303 for IMMEX Mexican general customs rules Rules for implementing NAFTA in Mexico * Is your company determining/paying the correct duties?
7
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
Mexico - the most free trade agreements in the world representing 90% of Mexican trade with more than 44 countries Most influential FTA is NAFTA Mexico’s FTA audit department is also the largest of its kind in the world • Over 170 employees exclusively dedicated to country of
origin audits to determine FTA eligibility
III. NAFTA Audits
8
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
Visits • Visits require:
o Written notification o Written consent o If an exporter or producer has not consented within 30 days,
preferential treatment may be denied • May include:
o The site that the goods or materials were produced o The place where records are stored and/or o The site from which the goods or materials were distributed
III. NAFTA Audits
9
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
Mexico’s FTA audit conducted 1000 NAFTA audits in 2013 • 99% of these audits involved American companies • 98% failed to provide adequate evidence of NAFTA
eligibility o Deficient recordkeeping by American companies o Some simply neglected to respond to the Mexican Government’s
requests for information and documentation, resulting in an automatic NAFTA certificate invalidation
III. NAFTA Audits
10
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
In most audits, Mexican Customs goes directly to the Producer of the good for the required evidence • If a U.S. producer fails to demonstrate NAFTA- originating
status, Mexican Customs will in turn invalidate all NAFTA certificates provided to its Mexican customers (i.e., Mexican importers).
If recordkeeping inadequate, Producer can request a production facility visit to prove originating status If goods don’t qualify, the Producer must notify all parties to whom a NAFTA certificate was sent to avoid penalties
III. NAFTA Audits
11
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
III. NAFTA Art. 303
Restricts the refund, waiver or reduction of import duties applicable to non-NAFTA originating goods imported in MX, CA or the US: • Used in the production process of goods • Substituted by similar or identical goods used in the
production process of goods o Subsequently exported to MX, CA or the US
12
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
III. NAFTA Art. 303 .
13
Importation into Mexico
Importation into US or CA
Exportation from Mexico
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
III. NAFTA Art. 303 Article 303 restriction does not apply to: • Non-NAFTA Originating goods imported by an IMMEX
and subsequently exported outside the NAFTA region
14
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
III. NAFTA Art. 303
Article 303 restriction does not apply to: • NAFTA originating goods imported by an IMMEX and
subsequently exported to the NAFTA region
15
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
III. NAFTA Art. 303
Mexican Customs will begin conducting NAFTA Article 303 audits The objective of these audits is to verify that duties are paid on non-NAFTA originating goods imported into Mexico and incorporated into a NAFTA-originated finished product.
16
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
III. NAFTA Art. 303
Recommendations • Implement an assesment to determine if your finished good
exported by IMMEX and imported into the US or CA have non-NAFTA materials
• Review customs records, bills of materials, invoices, contracts with suppliers
• Request NAFTA certificates from suppliers and ensure they are accurate and correct
• Do not wait until you are audited. Be proactive • If you do not know, ask!
17
© 2013 Braumiller Law Group, PLLC Any copying or distribution is prohibited.
Questions?
Adrienne Braumiller
Braumiller Law Group 5220 Spring Valley Rd., Suite 200
Dallas, TX 75254 (214) 348-9306
www.braumillerlaw.com
18