The Servicio de Administración Tributaria (SAT) has racheted up international trade inspections in Mexico
International trade inspections in Mexico experience an uptick.
The Mexican Tax Administration Service (SAT) has increased the number and frequency of international trade inspections in Mexico for the purpose of ensuring that companies that import items follow applicable laws and meet legal taxation requirements. This development is especially pronounced in areas that have to do with the temporary importation of goods to be incorporated into subsequently exported products, NAFTA Certificates of Origin and the valuation of imported merchandise.
The inspection regime has become more stringent
Mexico’s SAT has put a team into place that consists of nine hundred accountants, auditors and analysts for the purpose of increasing the number of international trade inspectors in Mexico that work to ensure businesses’ compliance with the laws governing the import of merchandise into the country. As a result of the dedication of additional manpower and financial resources to this effort, in 2014 the SAT conducted more than two hundred audits for the purpose of verifying compliance with NAFTA rules of origin regulations, ensuring the submission of correct valuation statements by importers and making certain that goods imported temporarily under the IMMEX program were treated in accord with defined rules.
International trade inspections by the Servicio de Administración Tributaria (SAT) uncovered more than one hundred cases in which Mexican importers that procured articles of clothing from US vendors claimed benefits, when no valid NAFTA Certificates of Origin were available to support the duty free entry of the goods into Mexico. In many of these instances, it was determined that, although the items were sourced from businesses located in the United States, the goods were produced in countries such as China, Pakistan, India or other non-NAFTA signatory nations. As a result of these findings, the Tax Administration Service was able to recover approximately US $128 million in unpaid duties at the current US Dollar – Mexican Peso rate of exchange.
As a result in the increase of international trade inspections in Mexico companies have been more conscientious in making sure that they have taken the appropriate measures in order to comply with applicable rules and regulations during the current year. At a meeting of the Instituto Mexicano de Ejecutivos de Comercio Exterior (IMECE), or Mexico’s Institute of Trade Executives, which took place on Thursday, June 4, 2015, Alfredo Hernandez Vazquez, the administrator of audit operations for the Servicio de Administración Tributaria’s Administración General de Auditoría de Comercio Exterior (AGACE), reported that, since the beginning of 2015 until the present date, only twenty-seven companies have been cited for trade infractions associated with irregularities linked to temporary importations, Certificates of Origin and the undervaluation of merchandise. The acronym AGACE translates into English as the “General Administration for International Trade Audits.”
Textiles is the sector of most concern
According to Hernandez, the textile sector is the area of international trade within which the application of the SAT’s rules is the most challenging for that agency and its officials. He made it clear in his comments that “the goal of increasing inspections is to create a perception of risk, so that businesses and individuals that import items into Mexico do so in compliance with published rules in order to avoid fines and other sanctions.”
In order to lessen the risk of encountering difficulties during SAT international trade inspections in Mexico, companies and individuals that import goods into the country should take extra care in order abide by the rules and regulations having to do with temporary imports, Certificates of Origin and product valuation. Those requiring advice or assistance should contact the international trade experts at the Tecma Group of Companies.