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Federal News Service

Washington, D.C.

OPERATOR: Welcome, and thank you for standing by. At this time, all participants are in listen-only mode. After the presentation, we will conduct a question-and-answer session. (Gives queuing instructions.)

This conference is being recorded. If you have any objections, you may disconnect at this time.

I would now like to turn the meeting over to Laura Gimenez. You may begin.

LAURA GIMENEZ: Good afternoon, everyone. My name is Laura Gimenez. I’m the commercial officer in Monterrey, Mexico. I will be moderating today’s session. We have three speakers lined up. Let me get started by introducing Ms. Karen Zens, our minister counselor for commercial affairs at the U.S. Embassy in Mexico City, who will deliver the welcoming remarks.

Karen, please.

KAREN ZENS: Thank you, Laura. I thank everyone for joining us today. As Laura said, I’m at the U.S. Embassy in Mexico. I’m in charge of the U.S. Department of Commerce’s Commercial Service operations here in Mexico. The Commercial Service is the part of the U.S. government dedicated to helping U.S. companies get started in exporting or open new markets for them. And we have a particular focus on small- and medium-sized companies, although we are happy to help all U.S. companies sell their products and services in markets overseas.

Mexico is one of the most important markets for U.S. exporters, and so we have a large operation in Mexico. We have four offices here in Mexico City at the embassy; in Monterrey, the office which has organized this webinar today; as well as Guadalajara and Tijuana.

We offer a variety of services to help U.S. companies: everything from identifying potential partners, doing background checks on those partners, organizing trade events, taking delegations to the United States and providing market information and market research. And in fact, we can customize services to the needs of our American-company clients.

Today’s webinar is an excellent example of one of our services, which is to bring very useful and practical information to help companies successfully export. This webinar today is really focusing on new exporters or new exporters to Mexico. So it is filled with very practical and basic information. Perhaps more experienced exporters already know this information, but it’s very important for companies to help them successfully export.

I’m particularly pleased that you’re joining us today to talk about Mexico, because Mexico unfortunately has been in the news for all the wrong reasons lately, whether it’s because of concerns about an upswing in violence along the border because the Mexican government has been taking on the drug cartels, and as a result, there has been additional increased violence; or because of the most recent problem, which is the flu epidemic, the H1N1 flu influenza, which could have started anywhere in the world, but unfortunately for Mexico started in Mexico.

And the Mexican government has been taking very aggressive measures to prevent its spread. And we applaud those measures. And now with the recent decision yesterday by the World Health Organization, they are encouraging all countries to take appropriate measures to prevent its spread.

Despite these not-very-positive newsworthy items, Mexico continues to be an outstanding market for U.S. companies. In fact, we exported $151 billion to Mexico last year. It’s our second-largest export market, second only to Canada.

So once again, I’m very pleased that you’ve joined us today. I think this is going to be a very helpful and informational webinar. And with no further ado, I’m going to turn it back to Laura so we get to the real speakers. Thank you all.

MS. GIMENEZ: Thank you, Karen.

In today’s program, I would like to introduce Manuel Velazquez, who is our trade specialist here in U.S. Marshals Service Monterrey, and also in charge of customs for Mexico.

Also with us is Rafael Peña, who is a Mexican custom broker and director general of Grupo EI. With 30 offices in Mexico, Grupo EI is one of the best alternatives in foreign trade, custom clearance and logistics. They offer management transportation, trade and services, supply-chain logistic analysis, HTC – (inaudible) – certification and other services.

Mr. Peña has over 20 years of experience in customs and is frequently the speaker in the U.S. about Mexican customs.

If you have any questions throughout the presentation, please use the chat feature on this webinar. And we will also take questions for you at the end of the session with a Q&A, and the operator will open up the line.

So Rafael and Manuel, why don’t you both start telling us what the five most common mistakes to avoid for new exporters are.

MANUEL VELAZQUEZ: Okay. Let’s start. I think it’s important to let you know that we have a lot of (attendants ?) now. And I think this could be nice. At the same time, this could be scary because, like Rafael said before, probably many people have scare about the Mexican custom. And this could be very good – (inaudible) – or very good information you know, what is the basics of the customs in Mexico.

And we’re going to start with a little introduction. Rafael?

LIC. RAFAEL PEÑA: Thank you, Manuel. Well, thanks, everybody, and thanks for the invitation. First of all, I want to tell you that this is a very – (inaudible) – of looking at the importations into Mexico, which is something good because it’s not boring. I’m not talking about articles or laws or anything. It’s just what happens in the day-to-day operation in the border.

And it starts also with saying that the reason why you see most of the warehouses on the American side is that in Mexico, the responsibility of the importations into our country is shared by the importer (of record ?) and we as the licensed custom brokers. It’s different than in the United States, because in the U.S., that’s what I know from our colleagues that we work together is that most of the – of something – if something happens in customs, they – (inaudible) – something happens, it’s more common to have a license of the importer (of record ?) canceled or suspended rather than the licensed broker itself.

So we as custom brokers in Mexico – that’s why you see a lot of verification – checking goods, checking documents. And that’s also a bad thing by the other hand, because it seems like we’re so bureaucratic. But that’s how the rules are in Mexico, and that’s – it’s the reason why as well. Most of the contraband come to Mexico and not go backwards. It’s just – or country (it’s from). So that’s why it’s like this.

We start it at the relationship. It’s very important. When the relationship starts between the U.S. seller to a Mexican buyer, most of U.S. sellers, they are selling goods using – just put in place, where I need to send my goods, and I’ll send them over there, and that’s about it. I don’t intend to know more about my merchandise than that.

It goes along much, much more than that. And many times, they don’t know that their merchandise gets stopped in the border, the reasons why their merchandise gets stopped. So it starts from – that’s why I always – I always recommend that you at least know or have some information who you’re selling to – if it’s a company, if it’s a person, if it exists, if it’s just a commercial people, if it’s a broker, if it’s anybody who – what kind of company does this – exists in the other side of the border? There’s just a person who wants to introduce something into our country, because that is a lot of help, also, you can attend or give them before even sending the goods to the border.

Okay. The must-know information before shipping the material – very, very important, and that – I’m going to put a – (inaudible) – to my presentation. Does the importer have an importing permit, which we call it – (in Spanish). Remember Spanish is like – (inaudible) – so I don’t if that’s a correct translation, but it’s an importer permit.

MR. VELAZQUEZ: It’s like the national record that provides you – the government – the government – the Mexican government provides to the Mexican importer in order to import in Mexico.

MR. PEÑA: Very simple questions. It has a lot – a lot of help – a lot of help to whoever’s buying your merchandise. Why is this? We get a lot of calls, even when you talk about air freight, for example, of a person that purchased the materials from the U.S. It arrives to the airport. He already paid for transportation. (Inaudible) – international air-freight transportation. And what happens when it gets to customs, happens that the importer recorder does not – the company or the person does have an importer (of record ?) permit.

So everything is just suspended without cost. You shouldn’t even ask for the goods to get through our (customs ?). So the main thing – those most important – (inaudible) – that I will always recommend of sellers to do from the United States.

Am I manufacturing the product, or am I reselling it? It happens a lot as well that when we get goods into the airports or into the border, we get an – (inaudible) – certificate. And when we go physically to check the goods, it says “China” or it says some place of Europe or any country. And that’s a big thing in Mexico; that’s a big problem in Mexico.

So it is very important to know that you should have your support in case you’re not the manufacturer, of showing what’s the correct origin or your merchandise. I am – if I am reselling the goods, do I already know the country of origin that goes along with what I sent previously? So if my product qualifies as NAFTA origin, that’s a lot – it is not the same that the origin or the country where I’m selling the goods from. You need to know if really you can extend a NAFTA certificate – if it qualifies for NAFTA, that goes along to another – probably another seminar completely – webinar of NAFTA. But it goes along with the NAFTA treaty between our countries. You cannot just extend a NAFTA certificate and sign for it and then get a responsibility if you are not sure that it qualifies – (inaudible).

I think it’s – could be interesting – you could say one or two advantage of – to be on a NAFTA – (inaudible). One of them is that you pay less duties per country. You just have to be NAFTA – the importer – the importer in Mexico.

MR. : Okay.

MR. PEÑA: In fact, it’s – for you, it’s good to compete, because if you’re competing with other countries, getting your products into Mexico, you have an advantage that typically you don’t pay import duties – well, as long as probably a month before – (inaudible) – before that month of those – (inaudible) – products that they change for paying duties into Mexico, but you don’t pay import duties into Mexico.

MR. VELAZQUEZ: Your client’s going to be more happy because of them –

MR. PEÑA: Of course. And that’s why – that’s why many times they ask for NAFTA, you give it, and you (shouldn’t ?) give the NAFTA. That’s why it’s very important to know if you qualify.

And another one is that typically also the permits, they’re a lot less, how can I say, mandatory, for the NAFTA region, for the NAFTA products as well.


MR. PEÑA: And as – (inaudible) – obviously, the shipping country is not always the country of origin. That’s also very typical in our day-to-day operations.

Do I know how to fill out a NAFTA certificate? If you don’t know how to fill it, it’s better to ask and to fill it the correct way instead of don’t do it correctly and then in the future operation or when the goods are – (inaudible) – to the border and you cannot apply for it, then you ask for – (inaudible) – NAFTA, then it’s a back and forth sending of documents.

MR. VELAZQUEZ: In this case, Rafael, who can help you to fill the NAFTA certification?

MR. PEÑA: Typically, even your commerce offices in your – in your city where you are or even the custom broker can send you an example saying – (inaudible) – like this. Just you put the description, the – (inaudible) – the classification A, B, C, D according to what the product is. And there’s always, even in the – what – (inaudible) – information, that you can get – (inaudible).

And if you still have – (inaudible) – either Manuel or myself, you can always – it is better to ask. I always say that.

Does the material goods require a special importing permit? That’s very important. If you’re telling me you’re sending a chemical, you will typically need a permit coming into Mexico. So it’s very important to know in advance if your product will need a special import permit into our country. That can always be known in advance – simple as sending a picture, sending the (MSDS ?) – well, I don’t know exactly the words of what is the chemical. It’s – (inaudible) – all those support help us to come to a – to a – (inaudible) – will help us to know if you need an import permit or not.

I always – and I should have said this in the beginning – but I always say that 90 percent of things to be done before getting a product into the country can be done in advance of the merchandise getting into the border. So all this can be done in advance. I’m sorry that I didn’t mention this.

This is also – (inaudible) – the insurance is so – under which definition – and believe me, there’s a lingo between crossing the border, between getting into a place in the border and then getting into a shipping – (inaudible) – in Mexico. That crossing of the bridge makes sure that it’s always covered by your insurance company. And if it’s covered, already – the insurance company you need to declare it because it’s part of the evaluation of the goods, so it’s also a very important thing.

I always ask to the importer so your merchandise has insurance. And they can go back and forth with the supplier and the transportation company. So it’s very important to know – (inaudible) – ship the goods.

Does the material shipped correspond to what was bought? Many times as well, they ask you for several amounts of material, and you’re going to send – (inaudible) – or – (inaudible) – sometimes according to you sending samples. It’s very important to know before it gets there.

MR. VELAZQUEZ: Because this is one of the big problems that we have here in Mexico. The Mexican authorities – I don’t know, they have like a special care about these kinds of situation where you send more product than the invoice says, right?

MR. PEÑA: Well, it’s – (inaudible) – contraband.


MR. PEÑA: (Inaudible) – mistake.

MR. VELAZQUEZ: This is – this very important to know.

MR. PEÑA: So it’s a big thing. In fact, I always say that if you’re going to ship something, always – (inaudible). You’re missing an extra amount of products from this kind of – (inaudible) – number, typically the shipper will know before they send or their department, but we never know until it gets to the border. So it’s more like we’re doing the examination work –


MR. PEÑA: – and all – most of the time, it can be known in advance.

When we talk about (statistics ?) before entering, mistake number one, from the goods that arrive to the border, some 100 percent of the goods that arrive – because I’m not – (inaudible) – very good sample of what I receive from many types of importers into Mexico, 30 percent of the goods arrive without a certificate of origin when they can apply for it.

Why is this so important? This is important because with – (inaudible) – the product in a very – (inaudible) – matter, I need to apply the NAFTA certificate to get that advantage as an importer of record in Mexico. If I don’t have the NAFTA certificate, then I will import it and pay duties for it.

MR. VELAZQUEZ: This is – this, I think, is important, because there are many companies that their product doesn’t apply as a NAFTA. They just – the only difference between a NAFTA product and a non-NAFTA product is they’re going to pay their duties, right?

MR. PEÑA: Yes. Besides that, there’s merchandise that you can always tell, if it says “Made in USA,” that it’s American, but you still don’t have enough to – (off mic).

MR. VELAZQUEZ: Oh, okay.

MR. PEÑA: They need to – (inaudible). They need to (clear ?) customs. Sometimes they have a – (inaudible) – it’s been stopped – (inaudible) – so they import it. They still have one year to go and claim those – (inaudible) – duties.

MR. VELAZQUEZ: Ah, this is a good point, that ID number.

MR. PEÑA: For the future. But what happens is that typically that year goes on and they never can – (inaudible).

MR. VELAZQUEZ: Oh, okay. Okay.

MR. PEÑA: So it is 30 percent of the merchandise that should apply for NAFTA – (off mic).


MR. PEÑA: Twenty-five percent of them are typically new – (inaudible) – numbers that we need to classify. And when I talk about classifying, it is physically going, opening the product, look at the product, ask for pictures, ask for information of what functions that it’s – what it’s made of, what materials it’s made of. So it’s a lot of information we need to know with a – (inaudible) – number. (Inaudible) – coming back. If I’m a seller, I’m sending my goods to one buyer in Mexico. And I typically send them these – (inaudible) – numbers. When I’m sending a new – (inaudible) – number, I can know it for my system. If I send – (inaudible) – saying I’m sending this part number or this part number substitutes, these are the ones – just 100 percent new. I’m sending you the information in advance to know what it is, what material its constituted of, what is it for. I can go ahead and classify it before it gets to my dock in the wharf.


MR. PEÑA: That’s a lot of information that can be advanced.

(Inaudible) – verify that 80 percent come with unusable commercial invoices. So we have to go and (protest ?) those invoices and make descriptions of what comes in the – in the invoice. Why is this? Because when I – (inaudible) – (PAR ?) number that’s in the invoice that does not have a description in English or Spanish – it could be in French as well – but in English or Spanish, I don’t know what the merchandise is. Even – I need to process – (inaudible) – means I need to type in the back of the invoice what I’m talking about, what the goods are, because in case of an inspection, they need to know what they’re – what they’re checking.

So it’s just like also the rules you have in your country that has to (come with a description ?) and you have to put in the merchandise – (inaudible) – mostly about the same. Just we ask always to try to put them as clear as we can.

MR. VELAZQUEZ: There’s a fine if you don’t provide on a – you know, on a clear invoice? Or why so – you know, why it’s too high, the percentage of – to see these unusual commercial invoice – why?

MR. PEÑA: It’s just because the systems of the – of the sellers are very – (inaudible) – very strict, that you cannot type in information. So they go like that – the merchandise – (inaudible) – like that, but in the border, most of the time even the sellers don’t know what kind of work needs to be done to those invoices.

MR. VELAZQUEZ: They need to be in communication with the people from the export side.

MR. PEÑA: So, as I say, if that information can be done in advance, it will always prevent – (inaudible) – time from – (inaudible) – the invoices. Okay.

Packaging, it’s a big thing always. Forty percent of the goods that we receive in our warehouses, they come with packaging that is damaged, that it’s – something’s broken – that we need to – (inaudible) – so it’s also a big problem in the border.

All this – (inaudible) – so we’re trying to avoid – (inaudible) – across as fast as we can.

Okay. This is – was the introduction. Now we’re going to start with mistake number one. That is misclassification. I think this is one of the key factors of – to have a successful and happy export experience in Mexico.

Okay. I put an example here of some – (inaudible) – schedule or – (inaudible) – that sometimes even with a NAFTA certificate, they send – (inaudible) – certification, they don’t get to the border, we go and find out that it’s another classification.

MR. VELAZQUEZ: I think it’s interesting because I think we have many people who are – (inaudible) – export – (inaudible).

MR. PEÑA: Okay. The – (inaudible) – is a number named now by the World Customs Organization that all the goods should be classified in that – (inaudible) – a world-wide (code ?). Some of them variate by the end of the two or four numbers –

MR. VELAZQUEZ: I think the internationals are the six, first number, and then we have the other two for Mexico. And the other two – (inaudible) – but right now we are working with – (inaudible).

MR. PEÑA: Yes, yes. So whenever there’s a difference, there’s two things that happen. I cannot apply to NAFTA if there’s a difference even – (inaudible) – or I just import it with a correction, because I am – (inaudible) – broker. Is it one, legal, liable for the – (inaudible) – in Mexico? Either they change the NAFTA certificate or they (put ?) me – or they send me the backup information saying no, no, no. (Inaudible) – this is not a plastic part. This is about – because of this, this, this or that.

MR. VELAZQUEZ: The characteristics.

MR. PEÑA: Then, the characteristics, the information, a brochure – I recommend always to have websites. I remember – and I gave this example as well – I remember importing for a customer that needs to have a website when he can always go and change your part number and look at the product with all the information there. So you can always get the – (inaudible) – correct.

MR. VELAZQUEZ: You know, because this – (inaudible) – important and – (inaudible) – factor here that, it depends your industry. I understand. You know, the same, if you are sending a screw or, I don’t know – it depends for which industry is – (inaudible) – classification. (I understand that ?).

MR. PEÑA: Not just the classification, Manuel. One – (inaudible) – could have a permit –


MR. PEÑA: And the other one will not have a permit.


MR. PEÑA: So even if – if you think that – (inaudible) – you can use, send your goods, you get stopped on the border, then there’s another criteria – (inaudible) – certification. I mean, that merchandise can get stopped until you get the permit. So you’re talking about time, about sending the information back and forth. Again, you can always have this information in advance.


MR. PEÑA: A simple catalog description, function of the – what it’s made of, can be a very, very exact – (inaudible) – of what we are planning to – (inaudible).

MR. VELAZQUEZ: And – (inaudible) – because we know that there’s some certificate like this – (inaudible) – of, say – (inaudible) – of (pre-sales ?) and you go (not easy ?) because they – (inaudible) – no?

MR. PEÑA: Yes.

MR. VELAZQUEZ: Okay. (Inaudible.)

MR. PEÑA: Number two.

MR. VALUEZQUEZ: Valuation.

MR. PEÑA: Valuations. Mexico is – it’s sometimes complicated on determining the value of the goods. Most of the goods have a market value. So that market value should be the one – (inaudible) – on the imports into Mexico.

Obviously, the country of origin influences on the duty because it impacts the value (upon ?) Mexican customs. But what I recommend is that when you’re going to send something with a discount, or you’re going to send something for free because they’re going to – (inaudible) – a sample of something, it’s right to communicate to the (reporter ?) or to the broker so they will always know why is that different.

I’m going to give you an example. I remember importing some scooters into Mexico. So when we got to customs, even though it was a green light, they say they had a suspicious undervaluation of the goods. So they stopped the merchandise. It was 7:00 in the afternoon. They say – (inaudible) – I need – I could let you go, but if it’s okay with you, I need to verify this valuation with the supplier.

I could – I could be strict on my (customs ?) employee to let me go, but, you know, you always work with those guys every day. So I said, okay, I have nothing to hide. Go ahead and check the valuation.

What they did next day is they went on the web and looked at the values of the goods. And then they say, well, these are 30 percent under price of a typical market value. They called the supplier from Mexican customs. And they said, we’re going to need – (inaudible) – for this importer of record. Can you verify that these goods cost this amount or this much? They say yes, it was a special offer that we did this month. And you’re exactly right; that invoice that you’re looking at is the correct valuation.

Okay, thank you, and then they let me go. So valuation is also a big thing in Mexico that you will always need to check. And by the other hand, sometimes it’s not on the (hands ?) of the – of the seller. Sometimes the importer of record can go and put some liquid paper to the invoice, put it undervalue, import it and pay less duties for it. That’s a very common thing – I’m sorry to say this – with people that they don’t have a good accounting information in the company. And why do I say this? Because importing something that you pay $100 for it and you’re importing it on $80 for it, it’s not even deductible for the Mexican customs. So they don’t have – they don’t – they don’t know – they don’t have something to prove that what – (inaudible) – is what they import for.

So it’s a very, very – (inaudible) – that even a seller that can always recommend the importers in Mexico, they don’t do that because that’s (not ?) a problem. It’s also – it can be a problem by the seller don’t know, and then in one or two weeks, they’re being asked by customs, is this correct?

In fact, the other example that you – that you can put – (inaudible) – Manuel, the next –


MR. PEÑA: – slide. (Inaudible) – this was a copy that we get from another – a company was audited from the Mexican customs because of value.

MR. VELAZQUEZ: The Mexican customs agency has some kind of power to go with American suppliers?

MR. PEÑA: That’s a very good – (inaudible). There’s been now, like, eight to 10 years that Mexican customs and American customs share information.

MR. VELAZQUEZ: Oh, okay.

MR. PEÑA: And this is part of the NAFTA treaty, but they do share information as much as – as Mexico has, like, five or six offices in the U.S., sharing information and backwards, in and out. Why is this? Because there were a lot of invoice that they didn’t cross into Mexico, that they stayed in your country. And by the other hand, there were a lot of merchandise that we were told it was certain kind of goods that they can from – (inaudible) – and there were another kind of goods that they were contraband.

So if they find out that this will be helpful for both countries, they share a lot of information. So in this case, Manuel, when customs – and this was steel companies – steel has a lot of (problems ?). I – (inaudible) – connected, but when you talk about their production in “molino” – how do you say “molino” in English?

MR. VELAZQUEZ: (Inaudible?)

MS. : Mill? Mill?

MR. PEÑA: Mill, yes. On their production mill, they say, well, this mill, it’s in the United States and – (inaudible) – wasn’t Ukraine or Russia or somewhere else. And then it’s very difficult for Mexican customs to know just by seeing – (inaudible) – goods –

MR. VELAZQUEZ: If they originate from there.

MR. PEÑA: Yes, because it doesn’t – (inaudible) – made in this particular – (inaudible). So what they do, that they go ahead and tell American customs we’re going to audit this supplier in the U.S. And they go by this outsourced company – they go and they audit the supplier they use. And believe me, they are always working together. So you would receive a visit even from Mexican companies with an American authority – (inaudible).

MR. VELAZQUEZ: This is interesting to say – the Mexican government – (inaudible) – Mexican customs bureau has resources to go there, no? (Inaudible) – many companies who will start to – (inaudible) – into Mexico know that.

MR. PEÑA: Not just that, Manuel. Mexican customs, even what you hear about them, they change a lot. What the – (inaudible) – that you hear or companies calling you that they have their merchandise stopped in the border, just think about this. Just 10 percent of the goods are being (revised ?). From those 10 percent, you get hundreds of calls every month. So imagine the other 90 that – it’s – (inaudible) – simple. It’s – (inaudible).

So that’s why they share a lot of information so that they – as long as they don’t check the goods in that particular moment or in the future, those kinds of audits can happen pretty – (inaudible).

MR. VELAZQUEZ: Oh, okay.

MR. PEÑA: You were talking about – when we talk about systems, customs – (inaudible) – systems so they know what you imported at what price, what description, what specification, how much you pay for duties. If you imported temporary – (inaudible) – to my – (inaudible) – in Mexico. If that material went out, if it didn’t went out.

So you have all the information in the system that will go along and be shared with the American customs. And then they go together and go and – (inaudible) – supplier. And I have been participating (backwards ?) also. I remember American customs coming and (visiting ?) one of my customers in Mexico because they have some questions. (Inaudible.) I’m not talking about a document. They have their permit and all the legality support. The customer called me and said, can you – (inaudible) – with this? I – (inaudible) – the company with American customs. They think that this is terrible. Can you show me your manufacture process, where your raw materials come from, documents, or where you purchase your raw materials, if they qualify for NAFTA.

So there’s a lot of information with this kind of – (inaudible). So you can get along with your – (inaudible) – importation once or twice, but sooner or later, if you’re – (inaudible) – supplier or you’re an importer in Mexico, they will catch you. Believe me.

MR. VELAZQUEZ: Okay. We move to the next one. And we are in the NAFTA (certification ?) of origins.

MR. PEÑA: Yes, I mentioned this, Manuel, because it’s an important – very, very important factor, as you mentioned before, of paying or not paying duties. So when you send a NAFTA certificate, make sure that it’s filled out correctly with the complete export information – sometimes the producer, they lack a detailed description of the goods as well – address, zip code, company name, tax ID, signature is very important.

A very important thing, Manuel, is that a NAFTA certificate for the importer of recorder in Mexico, he needs to have it in his file in original.

MR. VELAZQUEZ: This is important.

MR. PEÑA: That’s very – even sellers can tell you how many times are they being asked for a NAFTA certificate in (origin).

MR. VELAZQUEZ: The Mexican importer.

MR. PEÑA: The Mexican importer.

MR. VELAZQUEZ: This is – so – (inaudible) – if I’m going to purchase a company in the U.S. in exactly the same – the same characteristics of companies, I get in advance a company sending me without asking for them a monthly or a yearly NAFTA certificate in original form and importations – I really appreciate that, because their import-export clerk or manager is very busy with many things. When he finds out he cannot apply NAFTA from anything that already – that already is being imported in a year passed, and then I cannot apply for it.

This is – I think this is very important to let them know – to all kind of companies in particular, the new ones for the market, the new ones for export, that this is on a – on a – I think an approach that’s in the document that they – (inaudible) – help Mexican importers to have everything in, you know, a file – (inaudible). And they could help them in a very simple way just sending this information.

MR. PEÑA: Yes, it does make a difference.


MR. PEÑA: It does make the difference.

MR. VELAZQUEZ: It is important to know. Next, documentation. (Inaudible) – I think this is a key one.

MR. PEÑA: Yes, very important. Unreadable commercial invoices – sometimes we’re getting invoices with writing, handwriting on it, descriptions only by – (inaudible) – number. You can never tell what’s the description of the goods. We mentioned it.

Documents arrive after the material arrives – I always ask why we receive most of the invoices in the border with the goods, even after the goods arrive. (Inaudible) – coming from Chicago to Valero (sp), I’m driving at least three days, four days, according to the transportation company. Why can’t I – don’t get the documents in advance?

And – (inaudible) – same questions 15 or 20 years after I started as a broker. And I don’t know if it’s that they send it to the importer of recorder or the importer doesn’t send them to us. I don’t know if it’s just – it’s just a common thing of doing it and saying, well, I won’t put it in an envelope and ship it with the merchandise. But that – in the past when you didn’t have Internet and attachments, well, I understand it’s just another expense. But now that you can advance that information easy, why –

MR. VELAZQUEZ: But who wants to require these documents? The Mexican importer, or is it a U.S. exporter who wants to send in advance to the customs broker –

MR. PEÑA: Well, I recommend that – even they’re – they are dealing with an importer of record in Mexico, if they can advance the documents so the custom broker that is going to work with the merchandise in the border, it’s a lot of help and makes a lot of difference as well.

So that’s – those are the things that help us speed up an importation, because then – or a copy page – copy page from – on an email for the importer or record as well as the customs broker.


MR. PEÑA: Because we can receive the documents in advance.

MR. VELAZQUEZ: I understand. (Inaudible) –

MR. PEÑA: (Inaudible) – very, very (clear ?), but believe me, if you could see that invoice – (inaudible) – it will be – (inaudible) – you can see on the screen, it’s very difficult to know what is the merchandise – (inaudible).

MR. VELAZQEUZ: Lack of description – (inaudible). Next. Again, just to be clear about these – (inaudible) – documentation.

MR. PEÑA: Readable, clear, constant descriptions, unified part number, unit of measurements, quantity – in the packing list as well – readable descriptions, PAR number, quantity, weight, unit of measurement – all those – these – all these information is very helpful for us.

MR. VELAZQUEZ: Could it be in Spanish or in English or –

MR. PEÑA: Yes. In English is fine, Manuel, as long as we have it.


And you can add over a pre-alert, that he can put here when it’s short or over. Short – (inaudible) – or over – (inaudible). It will be very helpful as well that we can go and find out where’s the shortage instead of counting and making sure that the merchandise is – that it’s in the invoice, is the one that is coming to – (inaudible, cross talk) –

MR. PEÑA: Oh, okay.

MR. VELAZQUEZ: – that we can match.

MR. PEÑA: That’s a great point.

MR. VELAZQUEZ: We are in the – (inaudible) – number five, and I think this is one of the – with the custom broker, it’s very important to know that you’re going to work with a well-established customer base here, whether you have –

MR. PEÑA: Okay, it’s been publicated (ph) and been a lot of advertisements that when you ship merchandise out of the United States, with a certain amount over a thousand dollars, I think or over $2,000, you are forced – it’s mandatory that you do a shipper’s export declaration. It is mandatory. It’s not something that you want to or not want.

I can tell you something, Manuel. Many times, shipper’s export declarations are being done right now without people knowing that it’s being done. So every time a seller sends merchandise to Mexico, these documents is being filed through your customs systems. It’s like a validation process, and then it can cross the bridge.

So now it’s just that I can know that each certain type of export entry – certain kind, not as a – how can I say that? – a formal – but it’s also a document that needs to be filed before your goods crossing from U.S. to Mexico.

And this is – this is American authorities and we as forwarders need to go and attend an exam and pass and get on a conversation to be able to do a shipper’s export at origin. In fact, there’s fines in many things for avoiding doing a correct shipper’s exportation – export declaration.

MR. VELAZQUEZ: What about the people who send their products through the – I don’t know, a courier service: DHAL (sic), FedEx, or –

MR. PEÑA: If the goods are over X amount of dollars, many of the times, the same couriers are doing it for us.

MR. VELAZQUEZ: Oh, okay. Perfect.

MR. PEÑA: But it’s under their name. Their name is being registered as being the exporter and the one sending from the U.S.

MR. VELAZQUEZ: Oh, okay. It is –

MR. PEÑA: Many times we have – because not knowing these requirements, we have negligence of the exporter regarding signature of POA. A POA is a power of attorney that we need. We need the power of attorney to file those – it’s like, people authorizing me to do shipper’s export declaration under their name.

Delayed clearing of the shipment in the border without a power of attorney – I will never do an exportation. The merchandise will never get out of my warehouse in the border.

MR. VELAZQUEZ: I think that a good thing here or a special thing to say is that you could have – the American exporter could have several power of attorney, right?

MR. PEÑA: Yes.

MR. VELAZQUEZ: But if you work with several brokers or several forwarders –

MR. PEÑA: Yes. You can always – I don’t think there is a restriction on that – (inaudible, cross talk).

MR. VELAZQUEZ: Okay. This is good.

MR. PEÑA: Well, in each part of an implementation process, when we go and implement an importer in Mexico, we contact the sellers in the U.S., send them an e-mail presenting ourselves and telling them, you need to sign me this power of attorney. You need to do this. We’re going to be doing exportations under your name.

And 50 or 60 percent of the time we have problems to get this POA each time because they don’t know that these are the restrictions. They think it’s about – (inaudible) – and others think that – (inaudible). It’s just missing information that people have.

MR. VELAZQUEZ: Okay, well, like, you know this. We (are) going to talk about five mistakes. But we, when we start to talking about this, we find other – like, as a clue, we want to give you –

MR. PEÑA: As a bonus. (Chuckles.)

MR. VELAZQUEZ: As a bonus, I’m saying number six because we find out that it’s very important to let you know about this one.

MR. PEÑA: Before that, I just want to mention that – what it says, that it’s an obligation to report all the material that will be exported to our country.

MR. VELAZQUEZ: Yes, yes, yes, yes. It is important that they –

MR. PEÑA: The next one is an example of power of attorney that deals – that is being dealt by the seller, by the people that is attending this webinar, they are the one responsible for dealing these kinds of power of attorney.

And the next one is the shipper’s export declaration that we file with American system – with American customs.

MR. VELAZQUEZ: Okay. They receive these documents from the customer up there. Or –

MR. PEÑA: We do it as a forwarding agency in U.S., other than we are for receiving goods. We can file it, not just – it can be done by an American broker; it can be done by a forwarder and even, I think, it can be done by a transportation company. But we need your authorization to be able to file shipper’s export declaration.

And this is mistake number six. There was a big – there was a big issue about packaging recently, about the famous – (inaudible). And we will talk about it later. But it’s important to know that in the border, we are – we get material without labeling, many times without a part number, without description, so when you go into a verification of saying, this is the invoice, and you go ahead and look at the part, you can never tell which part is what and how can you do a verification of the good.

So I always recommend you need to label it. Many times when it’s barcoded, we can always go and scan it and that’s a lot of help that we can put into our system as well. And label the shipment – suggestions: at the top of one of the piece – also, per carton – sometimes just comes the box and inside the box it’s a little box, and inside that little box, it’s more little boxes there. So all the information that can be labeled on the side can be –

(Cross talk.)

MR. PEÑA: Yeah, merchandise should be packed and marked, like part numbers.

And also a good quality of packages is also – remember that when you talk about an importation into Mexico, you’re talking about many people that interfere in this. You’re talking about U.S. sellers, a transportation company that is – if it’s LTL or less than a truckload, it goes to several of these division centers. So it’s a transportation company, it’s a warehouse on the border, then it’s a trucking company in Mexico and then a final destination.

So you’re talking about five or six times that that merchandise is being handled. If it’s inspected in customs, then you’re adding another layer over there. So a good packing is very important as well. (Audio break.)

I just put an example there of discrepancies. Sometimes what fits in outside the packing, outside the box is not where it fits inside. So it’s fixing again, compact it, put on our carton, put on our label and doing that also within the border will be cost and will be time.

MR. VELAZQUEZ: And, arguably, I think that Mexican customs officers have to know, pointing out these kind of shipments because if you are having these discrepancies or mistakes, they want to point out that shipment.

MR. PEÑA: That always happens when a – they start with the importer. They say, well, this importer record always have this – not liable information. And so the first thing they do is they start inspecting you more merchandise, so instead of the 10, you get to 15, 20 and it goes over.

Or in the future, they can start again in presenting information and saying, can you go and check if particulars are there? Because it’s a common mistake that this happens.

What I was talking about the wood pallets should be fumigated before shipping out the material. And this is – the three – (inaudible) – right now. They should be stamped with the official seal. And all the pallets should be fumigated in order to clear – it’s a known that it’s not –

MR. VELAZQUEZ: It’s just also in NAFTA.

(Cross talk.)

MR. PEÑA: There’s a standard that needs to be accomplished. Also with timing and investing in money, I have always an inventory of pallets in my warehouse because I – this always happens. So between the shipping of 20 pallets, out of those 20, five or 10 will be missing this.

MR. VELAZQUEZ: But who needs to inform to the exporter that they require this kind of pallets?

MR. PEÑA: Manuel, if they’re sending it to Mexico, they need it. Okay? So they need this particular stamped, fumigated pallet. It’s a must. It’s a must.

MR. VELAZQUEZ: Plastic does not have these requirements. Plastic pallet, it’s important to note, does not have these kind of requirements, even though it’s a lot more expensive. But you’re right; they don’t have these requirements.

MR. PEÑA: It’s just for the – (inaudible); the wood for the – (inaudible). That’s why it’s – even though it’s not for carpeting; it’s just for wood.

MR. VELAZQUEZ: In this case, if they are the more popular – the wood is the more popular pallet to introduce –

MR. PEÑA: Ninety-five percent of the goods are being exported in wood, unfortunately, because of the – (inaudible).

MR. VELAZQUEZ: Yeah. Okay. We have here, one of the – like, the summary of all these mistakes and suggestions.

In, like, your knowledge, the custom broker has to have a special card to work with you. If you don’t have a well-known and trustful (ph) custom broker to work with, you’re going to have a lot of problems. And this is why we suggest to you that you need to work with us on a very well-known custom broker that know the Mexican side and the U.S. side.

MR. PEÑA: Yes. Most of the mistakes, as I say, can be avoid (ph). And if you really trust that the guy that receives this merchandise on the border, it’s a professional company with professional people that work over there, that they help you, they really help you, you can always get good advice every time you ship your goods.

And even we get audited by some of our customers in our warehouses. And they – we always learn from them. They teach us many things. And they always learn from us and say, if you go and do this, you can spend less time in the border for crossing your goods.

MR. VELAZQUEZ: So the must-dos that I put here – well, I recommend that you know your Mexican client, not just sell them and that’s it.

Ask your custom broker for our specifications – very important. As I mentioned, you can always have a card specification before getting to the border. For – (inaudible) – classifications and pictures, Web links, catalogs – many information that can be done in advance, telling to clients the terms of responsibility, who pay the freight – (inaudible) – conditions, equal terms that is probably part of many, many mistakes. Those FOBs, equal terms applied in the border, at least in coming in trucks, shouldn’t be light. In at least 70 percent of the invoices come with FOB. They just apply for ocean – (coughs) – for those kinds of mistakes.

And you know, here, I think it’s important to know that we’re dealing with the equal terms of the responsibility. It is part of the door-to-door activity, you know, from the U.S. company and the Mexican because if the Mexicans say, no, I want that you provide me, you know, send me the shipment in my door, I think they could do working with a custom broker who has that experience to, you know, to –

MR. PEÑA: Yet, if it could make the difference, Manuel, and you need to send your goods – (inaudible) – in a particular company, Mexico probably is just a physical person or is just a person at a small company, there’s always a legal way of doing it correctly because there needs to be an importer record and then that importer record needs to supply that company. So everything has to be documented correctly. And it has to be, in an accounting term, very well-filed for getting the goods.

(Inaudible) – then after the certificate will always help you send – sell your merchandise in Mexico, you qualify for NAFTA, obviously. Same idea with a copy of documents required: the invoice and packing list. But remember to send it in advance. (Inaudible) – more – (inaudible) – if you send it in advance.

Send documents to custom broker before the material arrives at the border. Again, power of attorney, NAFTA – believe me – many times we receive the goods over there, we didn’t even know who was the supplier and we need to start from zero when we receive a good from a –

Get the power of attorney, get a NAFTA certificate, get an invoice so if they – if I am an importer record in Mexico and I’m already buying from a company in the U.S., that company in the U.S. has the document – the proper document, he could be advancing those documents to that particular forwarder in the border. And the reason that he’ll be surprised, saying, well, I received this – I received this seller because he’s advancing me a lot of information that will help me before the goods arrive to the border.

Label each package with the correct part number. We mention it. And the wooden pallet should be fumigated as well. And, believe me, if these most two things are being done by you, I guarantee you that 80 or 90 percent can be speed up very, very much regarding the importation – (inaudible).

MR. VELAZQUEZ: It’s important to know that every product has their own mind. No, I think you need to – have to know that for each different import – textiles, to import steel, to import food – and I think this is why it’s important that you know that there’s some kind of flexibilities here.

MR. PEÑA: You’re right, Manuel. Regarding each sector, even chemicals have their own – their own life – (chuckles) – I can tell you. Metals, produce, even raw materials itself – (inaudible – importations in Mexico to manufacture. So all these kinds of importations can be worked as long as we have the support even with the importer or the seller.

And many times, if the seller already made a commitment to send a company – that happens a lot as well, Manuel, that a seller made a commitment on sending the merchandise to Mexico City, to Guadalajara, to Monterrey. So the buyer is waiting for these goods – (inaudible) – so he – take into account that you will do everything for him.

So that’s why these – it’s not good to be negotiated – you negotiated for being a deal with the importer since you start making the – (inaudible) – in Mexico.

MR. VELAZQUEZ: Okay. Well, thank you very much, Rafael. I think it’s time for the questions now. If you have any questions?

MS. GIMENEZ: Operator, please open the line for Q&A.

OPERATOR: Thank you. (Gives queuing instructions.)

MS. GIMENEZ: And we already have a few questions that I’ll go ahead and ask our speakers. And somebody wants to know what do you mean by “unusable commercial invoice”? Please give more detailed information. What is “unusable”?

MR. PEÑA: Okay. When you send an invoice with – can we go to slide number 11?

When we send an invoice that it’s not clear on what it comes in the shipment – that one, yes, thank you, Manuel – this is not usable for me for being imported. So what we do physically is that we go on the back of the invoice and we type the description, the value because this is an official document, right? It will be a document that can be revised or checked in an inspection in customs. In fact, you leave a complete file in customs for the future, well – (inaudible) – or whatever.

So what we meant by this is that when you do a correct description of part, number, goods, unit price in the invoice, these invoices are the ones used for the importation. We need – we don’t need to retype it or to put – in fact, it’s just like a protect of the invoice.

When you type it and you need to sign, a responsible thing – I am protecting this invoice because it wasn’t clear in time for it. So in case there is a problem in customs, you are responsible for protecting that invoice. It usually means that, well, this information is probably mostly about the same, so that’s why we really appreciate when we have complete information in the invoice.

MS. GIMENEZ: Do we have any questions, Operator?

OPERATOR: Yes, thank you. Our first question from the phones is from Jeannette (sp).


Q: Yes, I actually have two questions. I’m unclear as to who does the power of attorney. Is it the seller? Is it the broker? Is it the forwarding company? Who actually does the power of attorney?

MR. PEÑA: Okay, for shipper export declaration, sending your goods into Mexico, for the U.S. purpose for U.S. customs, the seller does the power of attorney. And I’m talking about for shipwreck, for –

For importing goods in Mexico, there’s a power of attorney as well that we need to get from the importer in Mexico. So one is done by the seller to be the exportation from your country to Mexico. And the other one is done – is being done by the importer.

I didn’t mention this in the presentation because that’s something that we get. It’s an authorization to do importations under the name of the importer record in Mexico. So your question was for the shipper export declaration in U.S. – it’s you as the seller.

Q: And is there an online document that you can download so that – for the power of attorney?

MR. PEÑA: Well, in the presentation, there’s a sample.

Q: So you can make one off of that sample?

MR. PEÑA: Yes. Yes. They’re going to have the presentation?

MS. GIMENEZ: Yes. You will have the presentation.

MR. PEÑA: Yeah. You will be receiving this presentation, Jeannette (ph).

Q: Okay.

MR. PEÑA: In fact, if you need to e-mail me so I can send you a format as well, no problem.

Q: Okay. And then my other question is, how do you find a good company, whether it’s the custom brokers or the forwarder? Because I had one experience where – I’ve only shipped into Mexico once – and I had the forwarding company online with my sales representative from Mexico and the LTL carrier. And not once did the forwarding company tell me that he could also do the brokerage end of it.

So when my Mexican sales rep found a broker, they were in two different warehouses. And I had all the documents sent to everybody prior to. And when it got down to the forwarding agent, then the broker said, well, why is it there? Why didn’t it come here? And it fell apart when it hit the border.

MR. VELAZQUEZ: In that case, we have on a contact list with several customs brokers that we could share with you. Obviously, we met before with these companies. They are very reliable. But you need to check to – we have on a – there’s on our website that you could see the record of these companies and how they are, you know, doing the visas here in Mexico.

I don’t know what – could you comment about that, Rafael?

MR. PEÑA: Well Manuel, to be honest, it depends on who’s paying for the services. If the importer records in Mexico is the one – is the one responsible for getting his goods into Mexico, he’ll be the ones that are telling you, send it to these particular brokers. It’s your responsibility to leave – to put your merchandise into Mexico in the door of the buyer.

Q: On the LTL carrier?

MR. PEÑA: Well, you need to find – while it’s many companies and travel companies, or somebody that could do that importation to Mexico. Now, if your commitment is getting your goods into Mexico, remember, visas do not work like in the U.S. that you can have a bond as an American company and import into Mexico. It is a very different scenario. In Mexico, you need to be a legal, established company with your importer records filed and authorized by the Mexican government. So you need to find the correct ways of getting that particular, how do you say –

MR. VELAZQUEZ: Trading company.

MR. PEÑA: Trading company to import it, and then getting it into your customer.

Q: So if I e-mailed you, you could send me the website with the list of companies?

MR. PEÑA: Yes, of course.

Q: Okay. Okay. All right, thank you.

MR. PEÑA: You’re welcome.

MS. GIMENEZ: Operator, any other questions?

OPERATOR: Yes. Your next question comes from Elsa Robinson (ph).

Q: I just had one question on the packing list where you listed that you need to put the weight. Is it the net and gross weight, or do you just need the gross weight?

MR. PEÑA: It’s appreciable. We really appreciate that you put both but gross weight is fine. And not – and I tell you this because even in Mexican customs as well as in American customs, they have the big weight stations that when they have weights that’s in loads, I don’t trust that these particular merchandise that they viewed it upon the weight that’s more difficult. It weighs that – the amount that they (are coming in ?). So gross weight, it’s enough. But we really appreciate it if you could put both.

Q: In the U.S., you have to put the net and the gross on the packing list when you’re importing because customs also looks at the weight of the unit to also verify, you know, the product. Because if you’re bringing in nails, you know, a nail should only weigh one – you know, like 1/10 of a pound. And they compare that to the shipment. So that’s why I asked. Is it net and growth?

MR. PEÑA: Okay. If the product pays duty upon weight, you need to put both, you’re right. But if you’re talking about a machine, that it pays for its own particular HTF or – (inaudible) – specification, and the weight is not so important. We can put a gross weight with no problem.

Q: Thank you.

MR. PEÑA: You’re welcome. Operator, other questions?

OPERATOR: Yes. Your next question comes from Eliza Herrera (ph).

Q: I’m sorry. That was a power-of-attorney, and I got the answer.

MR. PEÑA: Okay.

Q: Yeah.

OPERATOR: Okay. And then we have a question from Alberto Diaz.

MR. PEÑA: Alberto Diaz.

Q: Yes, Alberto Diaz. Listen, in case of an audit from customs, either U.S. or Mexican, on the certificate of origin or the NAFTA certificate, who is ultimately responsible for that information?

MR. PEÑA: The one – that issue, the NAFTA certificate – if you as the seller were the one issuing the NAFTA certificate, you are responsible, Alberto. And even if you are producer and you can show that you are the producer and your production lines or procedures, or you have the support from who you purchased the merchandise from, you can – you can always tell that it’s an origin product. But you are the one responsible if you issue the certificate of origin.

What is important as well, Alberto, is that if somebody in Mexico, they use your letterhead or your NAFTA certificate or a copy, and they were the ones that did that NAFTA certificate under your name, you have – you just need to prove that that happened because I’m sorry to say this, but those things happen – (inaudible) – it’s very common.

Q: Okay, thank you.

MS. GIMENEZ: On that certificate question, can I give a NAFTA certificate if the equipment is made in Germany but repaired in the U.S.?

MR. PEÑA: Okay. The origin never changes. If you tell me that you’re going to transform a complete transformation of a good, that’s different. So you – we need to go back to the rules of origin. But the origin of the goods never change. And even that’s important. If we import – and I have a company that imports little microphones to do these phones, and they import from Japan, and they import from Japan through U.S., and they pay the duties for U.S., then when they come to you, to Mexico, they need to pay again the duties because the origin is never – is never lost.

So what I recommend is you bring it in – (inaudible) – in the U.S., and let’s import it so you just pay once for the goods. When you go back, we need to go to the rules of origin to make sure that that phone plug qualifies now as a Mexican product, because the microphone is just a little part. But it is – it is important also that the origin is the correct one.

MS. GIMENEZ: Operator?

OPERATOR: Yes. At this time, there are no further questions.

MS. GIMENEZ: I have a few more. Rafael, does the seller ship the goods directly to the broker? Or why do you say that you receive materials without knowing who the seller is?

MR. PEÑA: The shipper or the seller sends materials typically direct to the broker. What I mean by the broker is to be a warehouse in any border – let’s talk about your south border, any border. So we receive a lot of materials knowing – without knowing who the importer is; sometimes just with a packing slip, with a packing slip saying this XYZ company in the U.S. is sending this particular merchandise to my forwarding agency. It arrives at my warehouse and I don’t know even the seller, and I don’t know who the buyer is in Mexico.

MR. VELAZQUEZ: Or it could be the other side. You know, you’re being contracted by a – by a Mexican company, and the Mexican company asks you, and you don’t know where is – which is the American seller, or you could know.

MR. PEÑA: Sometimes, Manuel, as long as we know that it’s regular cargo, we accept the goods and then get further notice: Two weeks after, then somebody calls you, oh, and by the way, I sent you this merchandise, and I was – I’m going to sell it to this particular company into Mexico. So that particular information can be done in advance, a pre-alert saying, I’m sending you these goods for this importer in Mexico; I’ll send my shipment, or contact these companies in Mexico, so you can do all your work. Or that particular company in Mexico, that they are expecting it from our company. They know the procedures, but he never told me that he was expecting some goods a week after we authorized it in our system.

MS. GIMENEZ: Okay. Another certificate question: Can I create my own NAFTA certificate? And if so, what information should I include?

MR. PEÑA: Okay, did we include – no, we didn’t include the example. Mark (ph), can we send –

MR. : Yes.

MR. PEÑA: Okay. We will send a NAFTA sample. It’s very easy to fill it out. And in case you have questions, please e-mail us. But even we can send it with the instructions of how to fill it out. I think it would be better for them to have the format and the instructions how to fill it out.

MS. GIMENEZ: And also, you could always visit and click on the website for information on tariffs, whether it be classification, et cetera. And we’re also – the Department of Commerce is only a phone call away, by calling 1-800-US-TRADE.

MR. VELAZQUEZ: And we have the market research. We have all the research into this. At the Commercial Service, we do provide on market research, we – these kind of topics that can help you directly to make the export more successfully.

MS. GIMENEZ: Another question that we have is, if a shipment is held up at the border by customs and is impounded, what are the options available to help secure the release of the shipment?

MR. PEÑA: Okay. And I think Manuel gets a lot of calls on this matter. If the – if the product gets held at customs, it’s because it’s already a legal procedure. Depends on what kind of fine, but typically when it’s stopped at customs and they hold it, even – they’re taking information, is the example I made, or they are already making that a legal procedure to keep the goods for – because that’s the fine that they got.

Let’s talk about when they have over-merchandise. If it doesn’t exceed 10 percent of over-merchandise, you pay the fine and you get your goods. If you’re (not scared ?) at all, and if it exceeds – even if it’s a totally different product of what you declared, then you get your merchandise fined, you know, 100 percent. You don’t get your goods back. Even, you pay your fine, and then those goods, they go in to be part of the government. Then they do – retail it, or they do other things with it.

But that’s why we need to be very careful before answering. You know, it depends on what kind of fine you are being involved in.

MS. GIMENEZ: Thank you. Operator, can you repeat the procedures for making a phone – for opening the phones?

OPERATOR: (Gives queuing instructions.) One moment, please, for the first question.

MS. GIMENEZ: Well, I’ll keep asking questions. Is my company liable if the Mexican importer alters the value of the merchandise?

MR. PEÑA: As long as you can prove that you were not the one altering that value of the goods, you will always (sic) be liable. But that needs to be proven in a legal procedure. I recommend – I need to – I need to recommend that it is better not to sell to a company that fixes the goods, the value of the goods, because he will always be in some kind of trouble. And by the other hand, it can be, as well, your trouble, or at least getting audited. You have no need for that.

So as long as you’re selling to somebody that he fixes his invoices, you are not selling to a real – to a reliable company.

MS. GIMENEZ: Perfect. Operator, any questions?

OPERATOR: Our first question comes from Jeanette (ph). Your line is open.

Q: Yes, one more question concerning the NAFTA. Where do you find out if your product qualifies as a NAFTA –

MR. PEÑA: Okay. Jeanette, this is – this is – this comes with the NAFTA rules of origin. It’s a complete – “un tema separado” –

MR. : (Off mic) –

MR. PEÑA: It’s a separate topic, Jeanette. But you send your request very – I can send you what are the rules of origin to Mexico – try to send them – because they are long, and they are sometimes not very understandable. But it’s by value, by where the contents, the hand labor that is done. So there’s many, many ways of classifying that as NAFTA, if it does classify.

MR. : And who will certify you as a NAFTA product –

MR. VELAZQUEZ: No, not normally. That certificate is just under your responsibility, as long as you can prove you are qualifying those NAFTA rules. So there’s a specific topic, Laura, that – Jeanette, that you – that you need to make sure you qualify for NAFTA. If there’s a product in particular you want to send it from the USA, well, this is in the contents, this is my product, these raw materials are made here, this – or made there, my hand labor is this percent. We can always as well help you with that.

Q: Okay, thank you.

OPERATOR: Our next question comes from Holentino (ph). Your line is open.

Q: Hello, this is Tino. You’ve gone through a couple of scenarios that I have often come up with, which is, I am a distributor of equipment, industrial equipment. And most of my customers are in Mexico. And in doing so, I have to go out and request calls from vendors. They could be manufacturers, and also distributers for manufacturers. And I always request, you know, the quote, and request from them if they could provide a NAFTA certificate of origin or the information to fill out a NAFTA certificate of origin. And they always tell me, yes, they can, or they’ll tell me, no, we can’t.

But when the products arrive at the border, they tell me they cannot provide it, contradicting what they said before. And sometimes not only that, but sometimes the product is made in China instead of the United States. What do you do in situations like that? Or who’s – I know I am – I’m responsible for filling out the certificate of origin, but what do you do in cases like that?

MR. PEÑA: You are located in United States, right?

Q: Yes, I am.

MR. PEÑA: The questions you will be – that you’re re-selling the goods?

Q: Yeah, I’m re-selling the goods.

MR. PEÑA: Re-selling.

Q: Yeah.

MR. PEÑA: In that particular case, you are a distributor of somebody that will not issue a certificate of origin, then you cannot issue it. You cannot do a certificate of origin as well.

Q: Yeah, but you – what do you do when you already bought the goods, they already told you they would provide you a certificate, and suddenly, when the product is already here, then they tell you it’s not?

MR. PEÑA: That’s also very common. You know, but my recommendation is to – you need – well, I don’t know how much you know the companies you distribute for, but I think it’s more – it’s more important for them to sell rather than anything else, you know, because it’s a big thing. Yes, you’re right, we have many examples that we can – merchandise in the border we cannot process; nobody wants to issue the certificate of origin. And then, instead of paying zero, it goes to 20 or 25 or 30 percent.

Q: That’s what it ends to, right? Because that’s what – that’s what’s been my experience. I get a product – let’s say, just to put an example, a name of a company “X,” and they even issue me a NAFTA certificate where they – it’s a general NAFTA certificate where they list all their equipment that they sell. So I have to go and pick the one that I bought from them and put it on my NAFTA certificate. But then when the product gets here, it’s made in China.

MR. PEÑA: Well, that’s the commercial side as well. But I think – well, it can be – it can be two things. I can (rely ?) on not knowing what they’re doing. And – (inaudible) – doing it on purpose, and saying, well, I’m going to issue it anyway. And that – believe me, in the border, it happens a lot. We get a NAFTA certificate, we go physically to the goods, and they say China or they say somewhere else.

But that’s the commercial side between you and who sell it to you, because regarding border, you cross it, you will have a problem on the border.

Q: Yeah. It’s a commercial what?

MR. PEÑA: It’s a commercial issue that the –

Q: Yeah, okay.

MR. PEÑA: It’s a commercial deal. It’s not something that legally you can do against them. Just they’re telling you something, they shouldn’t be issuing you a certificate. The best thing here that they don’t – they don’t tell you on their – until they sell it to you.

Q: Okay. No, I know – I know where some of the companies that I deal with, they take note, and then they correct. But some of them just keep on doing the same thing. So I have to go tell my customer, hey, I’m sorry, it’s made in China. You have to pay your duty first.

MR. PEÑA: Is this the same – is it the same as the other – as the other case, that they give you a NAFTA certificate for something that is not from the NAFTA zone, that’s not – (inaudible)? So even if it’s not very well if you go and physically tell that the merchandise is from China, even though they’re very good guys with you and they give it to you, well, it’s not – it’s not correct – the same way.

Q: Yeah, that situation happens with people that want to export, but they don’t know where the product comes from, and they still do a NAFTA certificate and it’s not made in the United States, and – but they – but they give it to you. Then you give it to your – (inaudible) – order. And then, they go, sorry, this came in with something that says here, “Made in Germany.” Then you’re in trouble.

MR. PEÑA: I’ll recommend you something: Get this presentation – get this presentation and send it to them. (Laughter.) (Inaudible.)

Q: Yeah. No, no. I tell them that – you guys are – you don’t know what you’re doing. You’re not supposed to issue a NAFTA certificate if it’s not made in the NAFTA region zone. And I get with them – just yesterday, I had a big case, because I bought a $3,000 furnace and the guys didn’t want to issue a NAFTA certificate. But they said on the phone, we will provide a NAFTA certificate upon purchase. So here I am, stuck with the furnace, because they don’t want to provide it.


MS. GIMENEZ: And unfortunately, that is not uncommon.

Q: It’s not. No.

MS. GIMENEZ: Well, Rafael, Manuel, thank you so much for a comprehensive and tactical presentation. If anyone in the audience still has any questions, feel free to e-mail Manuel, myself or Rafael.

MR. VELAZQUEZ: The information there –

MS. GIMENEZ: Everyone in the presentation – in the – in the webinar will be receiving the recorded presentation, as well as the audio, in the next several days.

Like Karen mentioned, the U.S. Commercial Service, with over a hundred offices in the U.S. and 80 throughout U.S. embassies and consulates, can help your company increase sales to new markets. Our dedicated staff will help you get started to increase your sales internationally. We can help you by providing world-class market research, introduce you to qualified buyers and distributors, and counsel you on every step of the export process.

If you are a new-to-export company, please take advantage of our 1-800-USA-TRADE phone number, where our dedicated staff can inform you about general exporting counseling, sources of international market research; again, give you insights on tariffs, classifications and so on. You can also reach one of our hundred export-assistance centers near you by visiting, and you can reach us in Mexico by

With this, thank you very much for your participation. You’ll receive a two-question survey that – I encourage you to respond. This will help us improve our service. The next webinar is scheduled for May 28th and will cover essential documentation for exporting to Mexico. Thank you very much and have a wonderful day.

MR. VELAZQUEZ: Thank you.

MR. PEÑA: Thanks for the invitation.


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