Mexico is open for business
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Mexico is open for business

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  • Notes: If you have a product that sells well in the U.S., chances are good that you can sell in markets all over the world. Hello, I am WB, from the Commercial Section of the U.S. Embassy in Mexico. Every day my colleagues and I talk to people who make everything from dog shampoo to devises that kill water born deceases with pulses of light, and we help them find buyers, get financing, fill out shipping documents and learn how to make sale to new customers. If you thought about going global but you are too small or you think it is too complicated, give the Commercial Service a call. You may start by calling the Trade Information Center at 1-800-USA-TRADE 1-800-872-8723
  • FF: Logistics/documentation on your behalf with a power of attorney + confidentiality agreement. Can file AES direct export filings within the US. Ensure that your information is not illegally shared with a third party.
  • Notes: ALL exports MUST be screened PRIOR to release so it doesn’t go to the “bad boy” list. If Export licenses are needed or special provisions must be adhered to, apply with enough lead time. Export indicators go on the Pro-Forma and Commercial Invoice.
  • Tariff Treatment of Low Value Exports - Shipped Via Courier ServicesIn general, Mexico requires that the importer use a Mexican customs broker for all importations into Mexico. However, when low value shipments -- those valued at less than USD 2,000 -- are sent to Mexico via a courier or package service, this requirement may be waived. If the importer does not use a broker the shipment may be treated in the manner described below. If the exporter is interested in making the entry into Mexico using a broker, they should discuss the feasibility of this with both their importer and the courier service.Treatment of Goods made in the United States, Canada or ChileCourier services, using informal entry procedures in Mexico, may opt to pay import duties applied at a rate of 22.92% for goods that are imported into Mexico as long as those goods:i. have marks or labels which distinguish them as originating in a NAFTA country or Chile, or are accompanied by the applicable NAFTA certificate of origin.ii. are obtained from the countries of Canada, Chile or the United States.iii. do not exceed the numerical limit of goods listed below:electronic games 5clothing and accessories 10footwear 10sports equipment 2motorcycles and bicycles 1household appliances 5computer equipment parts 1computer programs 10professional equipment 2tools 5art objects, of a collection or antiques 3imitation jewelry 10jewels 15records, cassettes or compact disks 25books 150Please note that the 22.92% rate is an increase over the 1994 original 20.8% rate. While the tariff rate for low-value shipments is being phased out like other NAFTA tariffs, Mexico raised its value-added tax, the IVA, from 10 to 16%. This accounts for the increased low-value rate. In addition, up to 12 liters of alcoholic beverages may be imported via a courier service with the payment of import duties ranging from 53.84% to 107.32% depending on the strength of the alcoholic beverage if the alcoholic beverage has a mark or label identifying it as a product of Canada or the United States.Treatment of Goods Made outside of the United States, Canada or Chile. For low value shipments of goods made outside of the United States, Canada or Chile, courier services may opt to pay import duties applied at a rate of 38.92% for goods imported into Mexico, except for goods made in Colombia, Venezuela, Bolivia, and Costa Rica, for which the rate is 25.12%, as long as: I. the value of goods does not exceed the equivalent of $US 2,000.II. the shipment does not exceed the limits established for specific good listed above.Again, please note that the tariff has increased over the former 32.8% as a result of the increase in the IVA.In addition, up to 12 liters of alcoholic beverages may be imported via a courier service. Import duties range from 54.98% to 108.47% if the beverages originate in Colombia, Venezuela, Costa Rica, or Bolivia, and from 68.78% to 122.27% for beverages from all other countries, depending on the strength of the alcoholic beverage.(Note: to learn how to qualify your good and to obtain NAFTA certificate of origin visit www.export.gov/NAFTA). Also Note: Even though you export less than $1,000, your good needs to qualify for NAFTA duty rates.
  • Notes: ALL exports MUST be screened PRIOR to release so it doesn’t go to the “bad boy” list. If Export licenses are needed or special provisions must be adhered to, apply with enough lead time. Export indicators go on the Pro-Forma and Commercial Invoice.
  • Note: Most likely, export controls won’t apply to toys.
  • Notes: How long should copies of the Certificate of Origin be retained? In the US, the exporter is required to retain a copy of the Certificate (or the Original) for five years from the date of signature.The importer is required to retain the Certificate and all other documentation relating to the importation of the goods for 5 years after the importation of the goods. The facts asserted in the Certificate must be supported by adequate records relating to the goods, their materials and production.According to NAFTA, If documents must be kept beyond the five-year period it is only because the national customs authority (i.e., US, Canadian, or Mexican Customs) requires that the importer or exporter retain records for a longer period.Mexican customs can’t require a U.S. party to comply with their record-keeping requirements beyond the scope of NAFTA.  That responsibility would only apply to a Mexican party, unless:(for exports) The U.S. exporter is sending goods under DAP terms beyond the Mexican border, or sending DDU terms into Mexico, or sending via “DDP” terms through a Comercializadora.In Mexico, Mexican exporters must maintain a copy of the Certificate for 10 years.In Canada, Canadian importers and exporters are required to keep the Certificate for six years from the time of the transaction for the importer and six years from the date of signing for the Canadian exporter.http://www.nafta-sec-alena.org/en/view.aspx (Note: it most likely would not apply for toys…)
  • Note: Check to see if it makes business sense to get an ATA Carnet if you carry demo equipment, to many countries, often. A Carnet is an international customs and temporary export-import document. It is used to clear customs in 82 countries and territories without paying duties and import taxes on merchandise that will be re-exported within 12 months (in most cases).  Carnets are also known as Merchandise Passports or Passports for Goods. Mexico allows carnets but their cost depends on the insured value of the goods. By presenting an ATA Carnet document to foreign customs, you pass duty free and import tax free into a carnet country for up to one year. ATA Carnets also serve as the U.S. Certificate of Registration of goods (CBP 4455) upon re-importation.Most merchandise can be listed on a Carnet:Commercial SamplesProfessional Equipment (Tools of the Trade)Goods for Fairs & Exhibitions (limited to 6 months) To get more information about Carnets please call the CIB Carnet HelpLine℠at (800) ATA-2900/ (800)282-2900 see the LinkedIn ATA Carnet User & Discussion Group, or email at Info@ATACarnet.com. A carnet can be issued and delivered to an applicant within 1 day. Technically, a carnet cannot be extended beyond the validity period. However, in some instances foreign customs may allow a replacement carnet to be issued to extend the time the goods are in the carnet country. In all cases, the replacement carnet must be applied for prior to the expiration of the original carnet. On a USD8,700 piece of equipment coming into Mexico, the U.S. exporter would pay about USD400 for the ATA carnet and it is likely to last ONLY 6 months. Mexican Customs will list final data of re-exportation, but it is usually 6 months from entry date, but may vary.

Mexico is open for business Mexico is open for business Presentation Transcript

  • TOYS, DOLLS & GAMES SOUTH OFTHE BORDER
  • Reviving demand from the U.S. led the Mexicaneconomy out of the economic slump in 2010 andallowed the country to grow by some 4.0% per year inthe past two years. The improvements in the creditmarket and industrial activities have helpedconsumers and businesses regain confidence, while arecovering U.S. economy has propped up Mexico’sexports.
  • There has never been a bettertime to grow your business byselling abroad.Easy and Profitable Ways toExport if you do it right
  • Register on export.gov. Resources: A Basic Guide to Exporting 18part series webinar http://export.gov/basicguide and manymore…. Using Export Data to Find Markets andPrice How to Ship Your Product How to Write an Export Plan Resources You Should Know How to Find Valuable Stuff onexport.gov
  •  How to Find HS Codes and Calculate Dutiesand Taxes New Incoterms 2011 How to Identify International Markets forYour Productswww.export.gov/webinars “Taking Advantageof NAFTA” program
  • Suggestions to sell in MexicoU.S. Licensed Freight Forwarder and you Sell - Remember:Mexican importers need permits, you cannot send yourproducts “directly” to a customer if not registered. You willneed to identify a Mexican Customs broker to export toMexico unless your export is worth less than USD 2,000 andshipped via courier services.
  • Become aware of different negotiating styles,stating expectationsAssess market potential – use CS marketresearch (export.gov).The U.S. Commercial Service has a CommercialAssistant dedicated to the toy industry inMexico. Alejandra Calderon can reached byemail at Alejandra.Calderon@trade.com or byphone at 52-55-5140-2651Review import requirements and logistics – itwill affect your price
  • Check Mexican partner – contact CS Mexico(www.buyusa.gov/mexico) trade specialist per sector – ICPArrange meetings if need a distributor/agent in person orvirtually contact CS Mexico (GK)Visit Mexican trade fairs – contact CS Mexico for listingSelling to the Mexican government? – contact CS Mexico forstrategic support, high-level introductions, business cocktails withwho’s who and targeted advocacy
  • Trade Complaints? – Problems withCustoms? Problems getting paid?Contact CS Mexicofor assistance
  • A LOT ofconsiderationsbefore shipping,involve yourSales & MarketingTeam,OrderManagementTeam,R&D,Import ProceduresCountrycontrollers,ShippingLogisticsDivision,TradeCompliance,IT Groupswithinyourorganization
  • a) US HTS code – Harmonized Tariff ScheduleTIP(www.usitc.gov/tata/hts) or Schedule B code needed whenfiling export declaration (electronic export information orEEI (www.aesdirect.gov). Do it yourself, FF, use vendersoftware to submit EEI using a paid AES service provider orcreate your own AES program. Pre-Departure (Post-departure privileges requires approval from Census, CBP,BIX, DDTC and others).HS code is important because it will determine ifproduct needs an import permit and whether it isdutiable - confirm with Mexican Customs Broker!Imports are subject to a 16% value-added tax (VAT)plus a 0.8% ad valorem customs processing fee islevied on imports (11% VAT at border region)(www.census.gov/foreign-trade). (The processingfee does not apply to NAFTA-qualifying goods.)
  • b) INCOTERMS 2010: Business decision(www.iccwbo.org/incoterms/id3025/index.html)FOB applies to vesselsonly! Whomever isthe authorizedimporter of record isresponsible to sendproduct to theMexican Customsbroker or buyer.
  • c) Import Declaration along aCommercial InvoiceAll Mexican Imports should be accompanied by anImport Declaration along a Commercial Invoice (nota Pro-Forma), with correct Price (Value declaration).Importer keeps declaration. Price should includeduties, charges at the border, insurance, etc. (NOTtransportation after importation). Transaction Valuemethod mostly used. TIP: Don’t guess. VisitCustoms Border Protection (CBP) website. CBP usespro-forma invoices to assess duties/taxes andexamines goods, but the Mexican importer of recordis required to post a BOND and produce a commercialinvoice within 120 days from the date of entry. Makesure prices match everywhere, including the label!
  • d) Pro-FormaIf letter of credit (LoC) isinvolved, packing listforms and applicableairways bill or bill oflading should have allrequired informationdocumented per LoCrequirements or you willhave problems gettingpaid timely! Send copiesof commercial invoice toMexican broker andshipper in advanceIs a confirmed P.O.,including cost used as salesquote and usuallyconsidered a bindingagreement even though theprice might change inadvance of final sale. TheCommercial Invoice isneeded for the Customsclearance process andrequires the true value. Isused to record accountsreceivable for the sellerand accounts payable forthe buyer.
  • e) Export Control Classification Number (ECCN)Export Administrations Regulations (EAR) determinelevel of control needed for certain articles, technologyand software PRIOR to shipping.For lower products or productsthat do not need control “EAR99”is the code used by theDepartment of Commerce(DOC) Bureau of Industry andSecurity (BIS).
  • f) Mexico does not require a Certificate ofOrigin BUT if the product qualifies toreceive benefits under the North AmericanFree Trade Agreement (NAFTA), theexporter has to prepare it and send copiesto Mexican Customs broker to claim NAFTAtariff rate (if less than USD 1,000 statereason on Commercial Invoice). To classifyunder NAFTA see Rules of Origin(http://tcc.export.gov/Trade_Agreements/All_Trade_Agreements/NAFTA_Part2_Chapter4.asp
  • US COMMERCIAL CONTACTS Get in contact with your closest U.S. Export AssistanceCenter (USEAC) - Sacramento EAC - Tel: 916-566-7011 -Mobile: 916-202-7425 - E-mail: Anthony.Hill@trade.gov Contact mexicobic@trade.gov Aliza Totayo 615-736-2225; Geoffrey Bogart 858-467-7052; Robert Queen 915-929-6971 Questions? Call Trade Information Center at 1-800-USA-TRADE = 1-800-872-8723 or Roza Pace, at 202-482-1354 E-mail: roza.pace@trade.gov E-mail: tic@trade.gov (Trade Information Center)
  • TARIFFS Mexico has eliminated all tariffs on toy products (NAICS 33993).This sector includes dolls, video games, billiard tables andbowling equipment, as well as traditional toys. Mexico canexercise the right to restrict the number of companies that havethe right to import toys to Mexico as well as the types andquantities that these companies can import.
  • Intellectual Property Rights In accordance with the WTO agreement onTrade-Related Intellectual Property Rights(TRIPs), Mexico is obligated to comply withinternationally accepted norms forprotecting and enforcing the intellectualproperty rights of U.S. and other foreigncompanies and individuals under Mexicanlaw.
  • Intellectual Property Rights Even though Mexico needs to strengthen their enforcement activitieson patents, trademarks, and copyrights, having a valuable brandalways helps since there is nothing better than the original. However,in Mexico you will want to defend your product against knock-offs.According to the Mexican Confederation of Industrial Chambers,contraband from China is prevalent. It is advisable to protect your intellectual property through localMexican law and it is advisable to hire a local counsel in order to do so.Please check IPR Toolkit at the Stopfakes.gov website. Continuedinnovation, bringing products to the market that shifts the people’sparadigms while capturing their imagination, offering bettersolutions while delighting them and helping them grow will alwayshelp to ensure your continued success too.
  • Technical Barriers to Trade & Non-Technical Barriers toTrade (Product Standards & Labeling Requirements)Most of the Mexican standards and certificatesare in line with U.S. standards. MandatoryTechnical Regulations to guarantee safety (NOMs)include labeling requirements for “informedconsumption reasons.” Voluntary Standards (NMX)are issued by recognized national standardizationbodies to promote quality. Reference Standards(NRs) are drawn for products and services subject ofgovernment procurement. Hot line for labelinquiries in Mexico: 525-729-9486.
  • The United States and Canadian Safety Marks (likeU/L, ETL, CSA) are not recognized in Mexico and NOMsare required for electronics/electrical products forhome, office and factory computers local area network(LAN) equipment to be able to commercialize theseproducts. Even though the NMX NOM Mark is aVoluntary Mexican product safety mark, it is usuallyrequired in governmental tenders and a requirement forthe majority of electronic items, since it certifies thatthe product meets the local safety requirements. Theshipper needs to ensure that their products are NOMcompliant.Technical Barriers to Trade & Non-Technical Barriers toTrade (Product Standards & Labeling Requirements)
  • The certification process is administered by theSecretariat of Economy’s Direccion General de Normas(DGN) who authorizes all independent certificationbodies. There are several laboratories accredited byEMA (Entidad Mexicana de Acreditacion) and approvedby COFEPRIS (Comision Federal de Sanidad) that canperform safety tests in-country. Their reports aresubmitted to the clients who, in turn, present them toCOFEPRIS.Technical Barriers to Trade & Non-Technical Barriers toTrade (Product Standards & Labeling Requirements)
  • There are three major classifications for certificationpurposes:securitychemical tests andlabeling.Depending on the types of products more than one NOMmay be required, from more than one Secretariat (i.e., NOM-015-SCFI-2007 covers labeling for toys for commercialinformation per Secretariat of Economy, NOM-252-SSA1-2011covers labeling and metals on toy products per Secretariat ofHealth).Technical Barriers to Trade & Non-Technical Barriers toTrade (Product Standards & Labeling Requirements)
  •  The regulatory environment is Mexico isconstantly changing, exporters are encouraged tocheck with a Mexican broker for any newregulations made. The NOM certificates shouldbe received prior to importation. Samples areneeded for testing. A number of products aresubject to the mandatory standards (NOMs) set bythe Mexican government, including:MANDATORY STANDARDS NORMS
  •  Tires, toys and school supplies – Please note thatpencils are not only subject to comply with NOMregulations but a sanitary notice from theMexican Secretariat of Health is required beforeshipment. Lighting fixtures Local telecommunication products, wired(phones, etc.) and wireless (cellular) Imports of electricity propane, natural gas orbattery power products
  •  Compact discs, recorded and unrecorded Sound recording equipment (CD writers) andothers. Another local standard contacts of interest“Sociedad Mexican de Nomalizacion yCertificacion, SC – NORMEX (Mexican Standardsand Certification Society). For more information,please visit Normas Oficiales Mexicanaswww.economia-noms.gob or Servicio deAdmnistracion Tributaria (SAT).
  • Antidumping & Fines If U.S. Customs have reasons to doubt the truth oraccuracy of declared values they will look atAutomated Export System (AES) export filing andwill probably conduct an audit on the U.S.exporter. If Mexican Customs is suspicious of aproduct being undervalued they will check withthe U.S. seller. U.S. and Mexican Customs shareall information and Mexican Customs have officesin the United States and can audit you too.
  •  Your product may qualify to be non-dutiable butit will be taxable. If a product is valued more thanUSD 200, free, temporary shipment, going forrepairs, sample, bonded warehouse, dutydrawback, foreign trade zone, sold “on specialoffer” or on loan, please make sure it is duly notedin the INCOTERMS or somewhere in thecommercial invoice. If the U.S. export does nothave a legal presence, the importer of record paysfor the importation.Antidumping & Fines
  • Antidumping & Fines To avoid fines and having your shipment impounded,avoid discrepancies between commercial invoices andlabels. TIP: If Mexican Customs seize yourmerchandise because you over shipped less than 10%than the declared value, you may be fined and get theproducts back. If the discrepancy is for more than10% of the declared value, you are likely to pay a heftyfine and your products will be impounded –forever- bythe Mexican authorities.
  • Reporting Problems & Trade AgreementsMonitoring While U.S. toy companies have not reported anyproblems exporting to Mexico and enjoy no tariffs,they can still encounter non‐tariff barriers.Companies that encounter problems exporting areencouraged to report their problem to theInternational Trade Administration’s TradeCompliance Center. The U.S. Department ofCommerce working in conjunction with USTR and theCommercial staff at Embassies abroad have resolvednumerous non‐tariff trade barriers for U.S. companiesincluding issues pertaining to import licenses, safetystandards, and labeling requirements.
  • Reporting Problems & Trade AgreementsMonitoring The Trade Compliance Center(www.trade.gov/tcc) is your one-stop shop forgetting U.S. government assistance in resolvingthe trade barriers or unfair situations youencounter in foreign markets. Policy questionsrelated to this industry should be directed to thetoy industry analyst at Jamie.Ferman@trade.govor at 202-48-25783.
  • QUESTIONS?
  • U.S. Commercial Service MexicoWanda BarquinCommercial Attachéwanda.barquin@trade.gov