Jim McNamara of MaquilaLogistics made an important presentations on Customs Reconciliation at The Offshore Group's annual Manufacturing in Mexico Summit. This information is of critical importance to parties looking to import and export to and from Mexico.

1. M AQUI L OGISTICS Email: jmcnamara@maquilogistics.com Jim McNamara Principle / U.S. Customs Broker 6620 S. 33 rd St. Bldg. J McAllen, TX 78503 Phone: 956-630-6377 Fax: 956-630-6617 Cell: 956-227-3928 594 S. Vermillion Brownsville, TX 78521 Phone: 956-504-6440 Fax: 956-504-2665 Home: 956-618-5155 514 Nafta Blvd. Laredo, TX 78045 Phone: 956-753-389 Fax: 956-753-3204 420A Pan American Dr. El Paso, TX 79907 Phone: 915-858-8865 Fax: 915-858-8068 As presented at The Offshore Group’s Manufacturing in Mexico Summit. www.offshoregroup.com

8. Historical Perspective on Reconciliation Recap of problems with Cost Submission process: 1) With no specific written procedures for handling and limiting . extensions, the yearly submissions were sometimes submitted . 7 or 8 months after the year close. 2) “Block Appraisement” was not provided for under U.S. . . . … Customs law. If Customs gave refunds these refunds ... . . . . . . should only be calculated on an entry by entry basis, not on . . on only the last 1 or 2 months entries. 3) Process was manual, did not interface with other processes . . . that affected duties. Double refunding possible. 4) No trackability of receipts, no automated history of filing, of . . status, or of actions taken to resolve “+ or –”.

9. Reconciliation Prototype - In response to GAO audit, U.S. Customs devised a “better . . mousetrap” for the cost submission called “Reconciliation”. - Voluntary program available to those importers who use . . estimated information at time of entry or in instances in . . . . which certain information required to make proper entry of . . goods, is unknown at time of entry. - Many different reasons why entries need to be reconciled . Value, 9802, NAFTA, “Court pending” classification issues) . . The concept of “Reconciliation” was expanded to cover . . . . . various type of situations and not just cost submissions. - As presented at The Offshore Group’s Manufacturing in Mexico Summit. www.offshoregroup.com

11. Reconciliation Prototype - Flagging; two options o Blanket (never use this) o entry-by-entry (only “viable” approach) - Two types of reconciliation entries: ° Aggregate – can use this if no duty impact or you . . owe money to U.S. Customs. ° Entry by entry – use this if you want a refund from . U.S. Customs. - As presented at The Offshore Group’s Manufacturing in Mexico Summit. www.offshoregroup.com

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