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The annual USMCOC-NE Golf Outing has grown more popular every year. Co-organized by AXA, the outing held last August 8th, was a great opportunity to play golf and network with other members of the U.S.-Mexico business community. Great gifts and prizes were given away and raffled, among them hotel stays in Cancun, as well as ProShop Gift cards.

The USMCOC-NE organized a members-only roundtable discussion with Ambassador Ruben Beltran, Consul General of Mexico in New York in August. Ambassador Beltran led an outstanding discussion on the Mexico-United States bilateral agenda, including the most relevant topics such as the current Mexico’s drug war, the pending energy reform, the immigration agenda, the upcoming U.S. elections, and the economic projections for these two countries. The USMCOC-NE plans to hold these types of discussions on a regular basis in an effort to promote understanding and communication on bilateral issues between the two countries.

On September 12th the USMCOC-NE celebrated Mexico’s Independence Day with its annual gala. The celebration gathered around 300 people that enjoyed the cuisine of the best Mexican restaurants in New York: Amanda Smith Caterers, Café Frida, Crema, Dos Caminos, La Esquina, Maya, Mercadito, Mi Cocina, Pámpano, Rosa Mexicano, Toloache, Zarela and Zona Rosa. The Celebration also featured an open bar courtesy of Tequila Don Julio and Jose Cuervo, Corona and LA Cetto's wines, as well as Live Mariachi band music and dance. The Chamber was honored to have the Consul General of Mexico in New York, Amb. Ruben Beltran, conducting the ceremony of “el Grito”.

Mexico’s Custom and Trade Facilitation Seminar
By: Guillermo Sánchez Chao*

On past days the Northeast Chapter of the United States – Mexico Chamber of Commerce invited me to participate on its Mexico’s Custom and Trade Facilitation seminar held at New York City, same that resulted in a very gratifying experience for all the participants.

Being a Mexican lawyer in a United States forum represented a challenging experience, as my goal was to transmit the new measures taken by the Mexican government in order to improve its custom and trade policies while addressing a audience that is not fully familiarized with the Mexican legal system.

As such, my participation at the event was aimed to answer the questions that are typically posted in the American exporter’s mind while trading with a Mexican partner; questions that we all have to admit are more and more challenging as the trade between our two countries continues to increase in volume and value.

In this regard, one of the first questions that was arisen was involved with the main risks that an American exporter may face while trading into Mexico, the latter as there must be a consciousness that trading, although profitable, may involve potential contingencies to both trading partners (the American exporter and the Mexican importer).

Within the abovementioned framework it is important to point out, that one often missed out point on the United States – Mexico trade relation that may represent a contingency to the American exporters, is the obligation to comply with the Reviews of Origin as established at the North American Free Trade Agreement (NAFTA).

Considering the latter, it will be important to remember that under NAFTA the Mexican authorities may exercise their jurisdiction over an American exporter that has issued a Certificate of Origin under the scope of the aforesaid treaty, in order to verify whether or not the exported goods actually qualified as NAFTA originating, therefore performing a Review of Origin upon an American exporter via a questionnaire.

In this concern, the main problem for the American exporter facing a Review of Origin carried out by the Mexican government agency, is that they typically dismiss the questionnaire sent by such agency by virtue of which the information concerning the NAFTA origin qualification of a certain exported merchandize is being requested.

The aforesaid dismissal of the questionnaires, might be the natural and the most obvious course of action for the executive of an American exporting company, as such person will be facing a questionnaire issued by a foreign government requiring to answer questions that directly involve the manufacture of its exported goods.

However, the fact that an American exporter ignores and disregards said questionnaires will enable the Mexican authorities to issue a resolution declaring that the merchandizing described at the NAFTA Certificates of Origin issued by that exporter are false and henceforward null.

In this regard, to ignore the questionnaires sent by the Mexican government while carrying out a Review of Origin may result in further contingencies for the American exporter that can be characterized in a double liability.

First, the American exporter may face a civil liability concerning the Mexican importer, the latter as if the Certificates of Origin are declared null by the Mexican authorities the Mexican importer will be bound to pay the general import tax and several fines, as it could be considered that a NAFTA preference was wrongfully applied.

Consequently, if the Mexican exporter is able to establish that the general import tax and fines it was bound to pay by its government are directly linked with the dismissal of the questionnaires by the American exporter, said exporter may be facing a civil liability before its trading partner.

Secondly, the American exporter might be facing a liability before the American government, as it can be considered that such exporter issued a false document in order to allow another person to qualify for a tax preference.

Derived from the latter, during my participation at the aforementioned seminar, I tried to address the attention of the audience to the importance of taking seriously the Review of Origin questionnaires sent by the Mexican government, even more considering that in past days the Mexican Tax Authorities have stated that they will increase the number of this reviews.

Nevertheless, my participation at the seminar was not circumscribed to alert the American exporters on the risk they may face while trading with Mexico, on the contrary, one good share of the questions asked concerned the opportunities that are now being presented considering the new Custom and Trade Facilitation policy to be enforced by the Mexican government.

The Mexican government and some of its agencies envisioned the aforesaid facilitation policy in order to increase its competitiveness, making Mexico more attractive to traders and foreign investors.

As such, this new Custom and Trade Facilitation policy will involve four main fronts of action, same that concern tariffs, the tariff classification system, the non tariff regulations and paperwork simplification and elimination.

Regarding tariffs, the Facilitation policy envisions a framework in which almost all the imports into Mexico will be import tax exempted and only the more sensible imports will be levied.

The latter, under the logic that at present day almost 80% of the Mexican imports are carried out applying a Free Trade Agreement preference, and consequently the general practice while importing a certain merchandize is not to apply the general import tax rate that was established but the aforementioned preference.

Also the aforementioned Facilitation plans cover a reduction on the Mexican tariff classification system, same that on present day is composed on a eight digits code (the Harmonized System code plus two additional numbers), considering that at presently most of the classification controversies comprise not the classification number under the Harmonized System but the two additional numbers that have been added by the Mexican government.

Consequently, the reduction of the Mexican tariff classification system will make easier for the foreign exporters to trade with their Mexican partners as they will have the certainty that if a certain product is correctly classified in accordance with the Harmonized System, no classification controversies will arisen in this concern with the Mexican authorities.

Even more, said Facilitation plans also provide the simplification non tariff regulations concerning the Mexican Official Standards, drawing a plan to reduce the excessive number of scattered regulations that have to be complied amalgamating them in just a few understandable documents.

Additionally, the Facilitation plans comprise the simplification and reduction of paperwork foreseeing the possibility of digital filing and decision processes at the Ministry of Economy; same that will help to expedite compliance and resolution processes.

Moreover, during my participation I was able to notice great interest from the participants regarding the opportunities that American investors might take advantage of, considering the abovementioned Custom and Trade Facilitation Plans.

In this regard, I pointed out that one of the forthcoming opportunities for investing in Mexico is the logistics sector. The latter, considering that any changes on Custom and Trade policies in Mexico will give rise to the necessity of having specialized logistics counseling.
Derived from the above, and considering that the logistics counseling sector in Mexico is underdeveloped at present time, the opportunity to embrace it by the American investor is not to be missed, considering that nowadays the negotiations concerning the uniformity of custom procedures at the NAFTA region will gain relevance.

Finally, I would like to thank everyone at the Northeast Chapter of the United States – Mexico Chamber of Commerce for the opportunity to participate at the Custom and Trade Facilitation in Mexico Seminar, I am convinced that this kind of exercises, beyond being a great experience for everyone that participated in it, will help to improve the dynamic commercial relationship between both countries and will increase the understanding of each other.

*Lead Partner of the International Trade and Customs practice at Chevez, Ruiz, Zamarripa y Cía., S.C.

August 2008
Friday 8th
Golf Outing

Tuesday 13th
Roundtable Discussion with Amb. Ruben Beltran

September 2008

Friday 12th
Mexico's Independence Day Gala

Wednesday 17th
Mexico's Customs and Trade Facilitation


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