Doing Business in Mexico, English

International Trade in Mexico

24 Aug , 2020  

Our third chapter of Doing Business in Mexico, International Trade, will provide a general overview of ton Mexican International Trade Policy considering international context, as well as customs aspects.

This chapter includes the following sections:

  1. Mexican International Trade Policy and Customs
  2. Tariff Policy
    1. MFN Tariffs or Duties
    2. Preferential Tariffs in Free Trade Agreements
      1. CPTPP
      2. USMCA
      3. New EU-Mexico Agreement
    3. Duty Deferral, Drawback and Preferential Tariffs in Trade Instruments
      1. IMMEX
      2. Trade Promotion Instruments
      3. PROSEC
        1. Eight Rule
        2. Free Trade Zones in Mexico
    4. Other Taxes affecting imports
      1. Customs Processing Fee
      2. Value-added Tax
      3. The Special Tax on Production and Services
      4. The Tax on New Motor Vehicles
  3. Non-Tariff Barriers
    1. Import Prohibitions
    2. Licensing System
    3. Other Non-Tariff Barriers on Imports
    4. Import Quotas
    5. Exports Tariff & Non-Tariff Export Barriers
  4. Recent Changes to Mexican Trade Policy
  5. Customs
    1. Customs Brokers and Customs Agencies
    2. Single Customs Window
    3. Requirements to Import and Export in Mexico
    4. Special International Trade Registries
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1. Mexican International Trade Policy and Customs Law

As a member of international organizations and Free Trade Agreements, Mexico has, to a certain extent, a predictable trade and customs policy. Mexican laws on customs and trade are normally compatible with international rules. The President and his ministers are not only in charge to apply these laws, but they also have powers to regulate international trade and customs, including emergency actions.

Since the inception of the World Trade Organization and the North American Free Trade Agreement, Mexico’s trade and customs legal framework has not been subject to a substantial overhaul; seldom reforms particularly to the customs law have occurred from time to time.

However, Mexico is currently embracing modern free trade agreements, such as the Comprehensive and Progressive Transpacific Partnership (CPTPP) or USMCA, that have and will bring certain legal changes in intellectual property, de minimis, e-commerce, etc.  

Needless to say, trade and customs programs or regulations are subject to frequent changes that seek to adapt to new trends, risks, or policy objectives. Mexico has in place, for instance, duty deferral and tariff reduction programs that allow manufacturing or export-oriented industries to be more competitive. However, such programs are subject to strict government controls.

2. Tariff Policy

Mexico is a party to the World Customs Organization and to the International Convention on the Harmonized Commodity Description and Coding System (HS Convention).

As a result of the sixth amendment to the HS, Mexican congress discussed a new law that replaced its General Import and Export Tariff Act (LIGIE, acronym in Spanish), i.e. Mexico’s Harmonized Tariff Schedule. The Ministry of Economy conducted an exhaustive review and proposed to compact or unfold tariff items for statistical purposes into 10 digits that will be called Commercial Identification Number, instead of an 8 digit tariff item (known as fracción arancelaria). The new General Import and Export Tariff Act was published on July 1, 2020.

2.1 MFN Tariffs or Import Duties

Mexico’s average WTO bound tariff is 35%, and duties rates vary from 0% to 100%. According to Mexico’s most recent Trade Policy Review (2017), the average MFN tariff on agricultural and non-agricultural products was 14.3% and 4.6%, respectively. The General Import and Export Tariff Act establishes the import tariff or “General Import Tax” (Impuesto General de Importación, or IGI) as well as the export tariff “General Export Tax” (Impuesto General de Exportación, or IGE).

….

2.2 Preferential Tariffs in Free Trade Agreements

Mexico has an extensive network of Free Trade Agreements (FTAs) with 50 countries and is also a party to regional agreements within the framework of the Latin American Integration Association (ALADI).

Mexico Free Trade Agreement, USMCA, NAFTA, TLCAN, TMEC, Alianza del Pacífico, Pacific Alliance, European Union, CPTPP, International Trade, FTAs, Mexico, Mexican Law Firm, Mexican Lawyers, WTO, Top Mexican Lawyers

The main FTAs and trade agreements to which Mexico is currently a party are as follows:

  • United States–Mexico–Canada Agreement (USMCA).
  • European Union-Mexico Free Trade Agreement, which is in the process of being modernized.
  • Comprehensive and Progressive Transpacific Partnership (CPTPP) in force between Australia, Canada, Japan, Mexico, New Zealand, Singapore, and Vietnam; Brunei, Chile, Malaysia, and Peru have not yet ratified the FTA.
  • Pacific Alliance with Colombia, Chile, and Peru.
  • FTA with Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.
  • FTA with the European Free Trade Association (Iceland, Liechtenstein, Norway, and Switzerland).
  • FTA with Israel.
  • FTA with Uruguay.
  • FTA with Japan.

….. Read more

3. Duty Deferral, Drawback and Preferential Tariffs in International Trade Instruments

Long before NAFTA came into existence, Mexico had into effect duty deferral policies that allowed manufacturing companies, known as maquiladoras, to import goods, such as raw materials, parts, containers, etc., without paying import duties. The maquiladoras had to use said imported goods in the production of exported manufactured goods and, in turn, they could temporally import said goods and defer customs duties.

Eventually, NAFTA introduced drawback provisions to promote the use of regional goods and “to reduce the incentive for third countries to use a NAFTA country as an ‘export platform.” Article 303 NAFTA, replicated in article 2.5 USMCA, introduced a general prohibition on refunding or exempting customs duties owed on non-originating goods imported into the territory of a party.

In essence, these provisions have as a purpose to avoid double ‘taxation’ on non-originating materials that are used as an input in the production of a finished good subsequently exported to another NAFTA or USMCA party.

Thank you for your interest, if you wish to continue reading please fill out the form below or contact us.

For more information about VTZ Law Firm services, visit our website or contact us info[@]vtz.mx

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English, News

Army Forces in Charge of Customs in Mexico? – The Trading Room

17 Jul , 2020  

Mexican Economic Newsletter, International Trade News in Mexico

Issues at Mexican Customs and Ports?

Customs is a source of concern for the current administration, which has had three customs directors so far. On Monday, the President recognized that his administration has not been able to control corruption at customs. According to his statements, synthetic drugs are entering through the port of Manzanillo, Mexico’s most important port, while “anti-corruption” actions are taking place in the Nuevo Laredo customs.

 

While visiting Manzanillo today, President AMLO made a “general” announcement in his daily press conference that the armed forces will be “in charge” of the customs located in land or ports because they have been poorly “managed”. The specificities of the plan as well as what will be the powers of the armed forces at customs are yet to be announced.

 

In the words of the president:

 

“We have taken the decision… that the land and sea customs will be in charge of the Ministry of Defense, and the Ministry of the Navy will be in charge of the customs in the ports.”

 

This is not the first time that armed forces have intervened in customs or ports. For instance, we recall that the Ministry of Navy took “control” of the Lazaro Cardenas Port and Manzanillo in 2013 and 2014 (news reports in Spanish), respectively. Furthermore, a decree was published in the Official Gazette that authorized the intervention of the navy in the ports in 2014, but their powers were limited to “policing in ports”. Nevertheless, we are aware that during this period international operations, such as exports regarding certain products (e.g. minerals),  faced “difficulties” at customs.

 

Based on past experiences, we wonder whether importers or exporters in Mexico will face difficulties if the operation of customs or ports is indeed in charge of Mexican armed forces.

 

Experts propose to review internally USMCA

 

On Tuesday, Reforma published an article where experts called to review USMCA internally and periodically. Among the experts, Adrian Vázquez, our managing partner, considered that this review would allow to evaluate, for instance, if imports are integrating value chains or displacing national production.

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English, News

Best Lawyers in Mexico – Trade and Tax

4 Dec , 2019  

The Best Lawyers in Mexico 2020, Los Mejores Abogados de México 2020, Guía Ranking de Abogados, International Trade,, Tax Law, Trade Law, Adrian B Vazquez Eduardo Zepeda Grimaldo, Recognized Lawyers,

The Best Lawyers in Mexico (2020 Edition)

This Tuesday, December 3rd, 2019, our firm was informed that the 11th Edition of The Best Lawyers in Mexico was publicly released.

Trade Lawyers

In this new edition, our partners Adrian B. Vazquez and Eduardo Zepeda Grimaldo are recognized as one of the Best Lawyers in the Trade Law practice. We note that Mr. Vázquez has received this recognition since 2008, meanwhile Mr. Zepeda since 2013.

 

Tax Lawyer

In addition, Mr. Zepeda was simultaneously recognized as a Best Lawyer in Tax Law practice. As our clients and friends know, Mr. Zepeda advises maquiladora/IMMEX companies regarding the tax implications of their customs and business operations.

The Best Lawyers in Mexico 2020, Los Mejores Abogados de México 2020, Guía Ranking de Abogados, International Trade,, Tax Law, Trade Law, Adrian B Vazquez Eduardo Zepeda Grimaldo, Recognized Lawyers,

Recognitions

We congratulate our partners for this new recognition as leading Mexican lawyers, which adds up to the additional awards received this year, for instance, Chambers and Partners and Legal 500.

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News

ADRIÁN VÁZQUEZ, Árbitro y Mediador Registrado por FICM

15 Nov , 2019  

Federation of Integrated Conflict Management, FICM, Centro de Resolución de Controversias a nivel global. Arbitraje Comercial Internacional, Mediación, Adrián Vázquez, México, Best Lawyer, Arbitration, Arbitraje, Mediación, Mediation

Centro Para Disputas Comerciales: FICM

Adrián Vázquez Benítez, Socio Director de VTZ, fue aceptado por el FICM (Federation of Integrated Conflict Management) para fungir como árbitro, mediador o negociador en disputas comerciales.

El FICM es un consorcio global que cuenta con un sistema innovador en la gestión de conflictos y resolución de controversias en diversos sectores tales como medio ambiente, corporativo, infraestructura, comercial, gobierno, propiedad intelectual, entre otros.

Este consorcio cuenta con más de 600 expertos entre los que se encuentran jueces retirados, expertos en industria, mediadores y árbitros calificados, y abogados procedentes de más de 50 países.

El FICM lidera el cambio en la forma en que las disputas deben prevenirse y resolverse en el mundo moderno de hoy.

FICM, Federation of Integrated Conflict Managment, Arbitraje, Mediación, Mexico

Arbitraje, Mediación y Negociación

Adrián Vázquez ofrece apoyar a las personas y empresas en asuntos relacionados con temas contractuales, corporativos, asuntos industriales, infraestructura, propiedad intelectual y derechos de autor, así como propiedad. Invitamos que conozcan el perfil de Adrián Vázquez  en el FICM.

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News

FORO NACIONAL DE COMERCIO EXTERIOR DE INDEX

7 Oct , 2019  

FORO COMERCIO EXTERIOR, Futuro de México en la integración con América Latina y Asia, Mejores prácticas de auditoría preventiva en Comercio Exterior, Entrada en Vigor del TMEC, Aranceles al acero y aluminio, El futuro de las certificaciones IVA-IEPS, OEA ante la 4T

El próximo martes 15 de octubre se llevará a cabo el Primer Foro Nacional de Comercio Exterior de Index , donde a través de diversos paneles de expertos se abordarán los puntos más relevantes que inciden actualmente en la dinámica del Comercio Internacional.

VTZ participará como aliado estratégico en este Primer Foro Nacional que se llevará acabo en el Hotel Fiesta Americana Toreo en la Ciudad de México.

¡Aún estás a tiempo de registrarte!

https://index.smartsara.mx/es/registro/foro-nacional-de-comercio-exterior-de-index

FORO COMERCIO EXTERIOR, Futuro de México en la integración con América Latina y Asia, Mejores prácticas de auditoría preventiva en Comercio Exterior, Entrada en Vigor del TMEC, Aranceles al acero y aluminio, El futuro de las certificaciones IVA-IEPS, OEA ante la 4T

 

 

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Reports

Reporte de Comercio Exterior Junio 2019

1 Jul , 2019  

Reglas Generales de Comercio Exterior para 2019, Cupos para exportar e importar vehículos automotores ligeros y cuotas compensatorias

En esta ocasión nuestro Reporte se refiere a los siguientes temas:

  1. Reglas Generales de Comercio Exterior para 2019
  2. Cupo para exportar e importar vehículos automotores ligeros
  3. Cuotas compensatorias

Descarga el reporte en PDF

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News

Implications of Brexit and Vietnam Ratifies CPTPP: Trading Room

16 Nov , 2018  

This week on the Trading Room:

  • Brexit Draft Agreement: Trade Implications

On Wednesday 14 of November, the draft Brexit agreement between the UK and EU was published. Though there is a debate about the likelihood of its approval in the British parliament and the numerous topics that are covered, what interests us is the possible international trade implications of this agreement with third countries like Mexico….. See More.

  • Vietnam Ratifies CPTPP

On Monday 12 of November, Vietnam ratified the Comprehensive and Progressive Transpacific Partnership (CPTPP), so now there are 7 countries that have ratified it. The Mexican textile and footwear industry must not be happy… See More.

 

Esta semana en Trading Room:

  • Borrador del Acuerdo Brexit: Implicaciones Comercio Exterior

El miércoles 14 de noviembre se publicó el borrador del acuerdo “Brexit” entre el Reino Unido (RU) y la Unión Europea. Si bien se debate sobre la probabilidad de su aprobación en el parlamento británico y abarca muchos temas, lo que nos interesa del acuerdo son las posibles implicaciones de comercio exterior con terceros países como México… Ver más.

  • Vietnam Ratifica el CPTPP

El lunes 12 de noviembre, Vietnam ratificó el Tratado Integral y Progresista de Asociación Transpacífico (CPTPP), por lo que ahora son 7 países que lo han ratificado. La industria textil y de calzado de México no debe estar contenta… Ver más.

 

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English, News

Who’s Who Legal: Adrian Vázquez a Leading Individual on International Trade & Customs 2018

13 Nov , 2018  

Whos Who Legal, Mejores Top Abogados de Comercio Exterior en México 2018, Top International Trade Lawyers in Mexico

Top International Trade & Customs Lawyers in Mexico

Trusted international law ranking agency, Who’s Who Legal, issued its “Trade & Customs 2018: Analysis“, in which it lists the world’s top trade and customs practitioners from over 45 countries.

VTZ is proud to announce that our managing partner, Adrian Vázquez, is considered a leading individual in Latin America. According to the publication,

Peers in the Mexico, the USA and Europe laud Adrián Vázquez at Vazquez Tercero & Zepeda as a “leader in this area, with really deep legal knowledge”. His expertise lies in trade remedy investigations and intentional trade matters.

After knowing about this recognition, Adrian Vázquez said that is was an honor to appear in the 2018 Who’s Who legal research in Trade & Customs.

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English, News

VTZ: Top-Tier firm in The Legal 500 Latin America

6 Sep , 2018  

Top Despacho de Abogados en mexico, comercio exerior, Top law Firm in Mexico, Guide Legal 500, Ranking de Abogados

The 2018 ranking of The Legal 500 Latin America was published yesterday and our firm VTZ was recognized as a top-tier Mexican law firm in the practice International Trade and Customs.

Our Managing Partner, Adrian Vázquez is listed as leading lawyers. Furthermore, the Legal 500 recommends other five VTZ members, Eduardo ZepedaEduardo González EspinosaVerónica Vázquez Bravo, Emilio Arteaga Vázquez and Hector Vázquez-Tercero. We are proud of all of our members and this result.

We invite you to visit the guide in the following link: The Legal 500 – IT&C – Mexico

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English, News

Again in Reuters: International trade in goods and services in Mexico

16 Jul , 2018  

Vazquez Tercero & Zepeda (VTZ) have contributed for the second time with Thomas Reuters Practical Law in the guide regarding International Trade in Goods and Services in Mexico.

Our Managing Partner, Adrián Vázquez, as well as our associates, Mariana Malvaez and Emilio Arteaga, responded to a Q&A guide that covers key matters relating to the regulation of international trade in Mexico, such as

  • Recent Trends, e.g. Mexico’s presidential elections;
  • Trade agreements and negotiations; e.g. the Comprehensive and Progressive Transpacific Trade Agreement (CPTPP)
  • Rules relating to the supply of services;
  • Imports and exports requirements;
  • Trade remedies; and
  • International trade restrictions.

To access the guide, click the following link: International Trade in Goods and Services in Mexico.

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