The Mexican government has stepped up efforts to prevent the
undervaluation of imported goods and is now actively using reference prices for
that purpose. This policy currently applies to textile, apparel and footwear
items. Shipments of affected goods not accompanied by documentation sufficient
to confirm the correct value could be seized and/or subject to penalties.
Although this mechanism was created in December 2011 after the elimination of
the transition duties that were in place on a range of mainland Chinese goods,
the number of associated seizures has increased recently.
Mexico's Tax Administration Service (Servicio de Administracin Tributaria, or
SAT) has determined that in 2011 68 percent of textile, apparel and footwear
items imported from mainland China, Hong Kong, Taiwan and other suppliers were
entered at prices lower than the cost of raw materials used in their
production. To discourage this practice, SAT has implemented a programme known
as "Precios de Referencia" (reference prices) with respect to 413
tariff lines for textile items and 59 tariff lines for footwear. These
reference prices are determined on a computed value basis but will not be
published in the Diario Oficial and importers will not have access to
them. The specific tariff lines subject to reference prices have not been made
publicly available either.
SAT officials have emphasised in several forums in Mexico that the reference
prices are only used to analyse the risk of importers using lower values and
are not used in deciding whether to reject or accept the value declared in
entry summaries. However, if the merchandise is imported at a price lower than
the reference price, Mexican Customs will require the importer to have a
guarantee of import duties based on the reference price.
When an importer becomes aware that the price agreed with its supplier is low
it must obtain the proper documents to support that price and notify the
customs broker of this situation. The broker will then include in the pedimento
the code "PV" (prueba de valor, or proof of value) indicating that it
has the documentation to prove the transaction value and clear the shipment
through customs. In this context Mexican Customs require the commercial invoice
as well as the following documents.
light of this new practice and the fact that the reference prices will remain
unpublished, foreign suppliers of affected goods are advised to provide Mexican
importers proper documentation to demonstrate the accuracy of the value
declared during the import transactions. Otherwise, the merchandise could be
seized and penalties could apply. Moreover, when goods are seized the
importer's import licence is temporarily suspended, preventing the importer
from conducting import operations for up to four months.
is also worth mentioning that Mexico's National Apparel Industry Chamber (CNIV)
has held discussions with the SE to assess the possibility of implementing an
arrangement to better monitor and control imports of undervalued apparel. That
mechanism would be similar to the arrangement that has been agreed for mainland
Chinese footwear, with the main difference being that it would apply to apparel
from all sources and not just mainland China. CNIV President Sergio Lpez de la
Cerda has indicated that such a mechanism should be in place by the end of May
and would involve the establishment of reference prices on a range of apparel
This article was
originally published in the Stitch Times, July, 2012.
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