By Brenda Cordova, Braumiller Law Group Mexico Legal Counsel
In Mexico, a customs regime is the destination or treatment for goods subject to customs control in accordance with the nature and purposes of a customs operation. Companies with an IMMEX program may perform operations under the so-called customs regime of “temporary importation for elaboration, transformation or repair under a maquila program”. This name by itself implies several facts to consider. For example, since the importation of materials is temporary, these should not stay in the country for consumption because they must be returned abroad within a specific period of time, and the specific reason they were imported into Mexico must occur. Thus, if the IMMEX was authorized to produce goods classified under a specific harmonized tariff code, it must import and use the materials to produce such goods only and in accordance with the authorized production process. Also, to be able to control and monitor these as well as the destination of the materials and goods, production processes, periods of times, import duty, value added tax, etc., a detailed inventory and customs and tax recordkeeping is needed.
To comply with these and any other requirements, IMMEX must observe a broad set of rules and guidelines. However, all starts with identifying the correct codes to be listed on the corresponding pedimento1, because depending on these, one will be in a better position to identify those requirements, including the data, information and documentation needed to manage and trace operations, show consistency and comply with the law.
A considerable amount of information and data on the pedimento is declared by means of various codes. The code that identifies the IMMEX customs regime is “ITE”. This must be declared at the very top of the pedimento corresponding to a customs operation. Also, there are additional hundreds of codes to identify the customs checkpoint, means of transportation, countries, currencies, units of measure, trade and non-trade barriers, type of containers, valuation methods, forms of payments, guarantees, hazardous materials, identifiers for various operations, scenarios under customs regimes, among others. These can be found under Annex 22 of the General Foreign Trade Rules.
For example, 76 codes subdivided in 176 scenarios exist just to identify the different scenarios under the various customs regimes. The specific codes under the IMMEX customs regime are:
- IN
- to temporarily import goods for the elaboration, transformation or repair
- to return to Mexico goods produced by an IMMEX program after being rejected by the foreign recipient due to defects or different specifications.
- AF
- to temporarily import fixed assets
- RT
- To return goods produced under an IMMEX program
- To return goods in the same condition as imported into Mexico
- To return special options incorporated into vehicles exported by the automotive industry under an IMMEX program.
Within the above 76 codes and subdivisions, there are other codes an IMMEX could use depending on the customs operation and business transaction. For example, if the IMMEX performs a virtual transfer2 with another IMMEX, it could use code “V1”, if the virtual transfer is performed by a certified IMMEX to a Mexican resident that will import the good for consumption, it could use code “V5”, or if the IMMEX needs to correct a pedimento it could use the “R1” code, or to transfer scrap for donation it could use code “V9”. Thus, identifying the correct code may be a complex task because there are many more different codes, and it could be possible that a code for a specific IMMEX operation may not be available in the law, or as the case may be, that two or more codes may seem to potentially apply or even conflict with a single operation.
Regardless, depending on the codes declared on the pedimento, the IMMEX will be required to show consistency between these codes and the other information and data declared on the pedimento, as well as in documentation to be attached to the pedimento and/or maintained in its inventory and recordkeeping.
Therefore, selecting and declaring the appropriate code is critical to identifying the requirements and documentation needed to manage and trace IMMEX operations, ensuring conformity and legal compliance. Having the assistance of experienced professional advisors is crucial in this regard. In the event of an inspection, audit, or review, a Mexican customs officer will typically examine the pedimento codes to determine the specific customs regime, operation, and circumstances involved. This, in turn, will help assess the obligations and formalities that apply to the regime and verify whether the IMMEX is in compliance with the law.
Disclaimer: This publication is presented to you for informational purposes only and is not intended to provide legal guidance or advice. Please email us if you need specific information regarding the above or give us a call, we are happy to speak with you.
1A Pedimento is a MX customs document generated and submitted before Mexican Customs electronically. It includes information regarding the duties, taxes and fees including regulations as well as the traffic, customs regime, and other data about the compliance with formalities for the entry and extraction of goods in and out of Mexico.
2A virtual transfer can be explained as a legal fiction of the law about an import, export or return of goods without the need to present the goods physically before MX customs. Instead, the corresponding documents and data is submitted before the authority. Generally, under a virtual transfer an IMMEX is allowed to transfer the temporarily imported goods to another IMMEX for specific purposes.
