Mexico G3 Agreement by ezu17074

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									                            Customs & International
                            Trade Practice




   US-Mexico Trade & Logistics

Tools for Streamlining your Logistics &
         Customs Procedures


           Armando Beteta
           El Paso, Texas
           March 21, 2008
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    Strategic Customs Planning

    Objective
    • Trade Agreements and Supply Chain-
      Related Tax Planning in Latin America:
      – Strategic Analysis
      – Planning
      – Implementation



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Strategic Customs Planning (Inbound-Outbound)

       Origin-
       Origin-                   Production
                                 Production                   Distribution
                                                              Distribution

    Raw Materials
    Raw Materials                  Mexico
                                   Mexico                   Bolivia
                                                            Bolivia
        USA
        USA                      Guatemala
                                 Guatemala                  Ecuador
                                                            Ecuador
       Japan
       Japan                      Venezuela
                                  Venezuela                 Nicaragua
                                                            Nicaragua
      Germany
      Germany                       Brazil
                                    Brazil                  Chile
                                                            Chile
       China
       China                      Argentina
                                  Argentina

      • How much duty paid? In production country? In destination
      • How much duty paid? In production country? In destination
        countries?
        countries?
      • Where are raw materials from – do they qualify for a trade
      • Where are raw materials from – do they qualify for a trade
        preference or special program in production country?
        preference or special program in production country?
      • Where will finished products go – do they qualify for a trade
      • Where will finished products go – do they qualify for a trade
        preference?
        preference?
      • What processing will occur – enough to qualify?
      • What processing will occur – enough to qualify?
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      • Preference for manufacturing locations?
      • Preference for manufacturing locations?           e                  #
    Strategic Customs Planning
    Manufacturing Hub
    Inbound                      Outbound
                                   (Finished Goods)

      Raw Materials              Manufacturing/Distribution
      • Trade programs           • Trade agreements
      • Trade agreements
      Finished Goods             Distribution only
      • Trade agreements         • Trade agreements (limited)




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    Strategic Customs Planning

    Key Definitions


     • Trade Agreements: provide imported raw material and
       finished goods with a preferential duty rate (tariff
       elimination or reduction). Proper origin and
       certification requirements, which vary according to
       each agreement, must be fulfilled in order to make a
       preferential duty claim.


     • Trade Programs: special customs regimes that allow
       importers (manufactures/distributors) to defer or
       eventually waive the imposition of duties and value-
       added tax (where applicable) on raw materials/finished
       goods imported for the production or distribution of
       goods.
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Trade Programs

    • Temporary Import Regimes (IMMEX)
    • Bonded Warehouses
    • Drawback
    • “Mexican FTZ” (RFE)
    • ALTEX Program - Highly Exporting User
      – (“Usuario Altamente Exportador”)
    • PROSEC Program (“Programa de
      Promoción Sectorial”) - Mexico
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    Trade Agreements


    • Companies may take advantage of
      considerable tariff reductions under various
      free trade agreements that impact their
      Mexican manufacturing and distribution
      markets
    • These benefits do not come automatically
    • To qualify for preferential duty rates:
      – Satisfy the specific FTA rule of origin for the particular
      – Satisfy the specific FTA rule of origin for the particular
        product, and
        product, and
      – Satisfy certification and/or recordkeeping
      – Satisfy certification and/or recordkeeping
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    Rules of Origin


• Tariff Shift


• Regional Value Content (“RVC”)


• Tariff Shift and / or RVC

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                                                                                                               Suriname, Trinidad & Tobago
Latin America Trade Agreement Matrix
Latin America Trade Agreement Matrix




                                                                                                                                         Antigua & Barbuda, Bahamas




                                                                                                                                                                                                                                                                                  St. Vincent & The Grenadines
                                              Entered Into Force




                                                                                                                                                                                                                                                                                                                                                Dominican Republic
                                                                                                                                                                                                                                                   St. Kitts & Nevis, St. Lucia
                                                                                                                                                                                                                             Jamaica, Montserrat
                                              Negotiations




                                                                                                               El Salvador




                                                                                                                                                                                         Dominica, Grenada




                                                                                                                                                                                                                                                                                                                            Trinidad & Tobago
                                                                                                               Costa Rica

                                                                                                               Guatemala
                                                                                          Venezuela
                                              Completed




                                                                                                               Nicaragua


                                                                                                                                                                      Barbados, Belize
                                                                   Argentina




                                                                                                               Honduras
                                                                               Colombia
                                                                   Paraguay




                                                                                                                                                                                                                                                                                                                                                                     Puerto Rico
                                                                   Uruguay



                                                                               Ecuador




                                                                                                               Panama



                                                                                                                                                                                                             Guyana, Haiti
                                              Planned




                                                                                                      Mexico
                                                                               Bolivia
                                                                   Brazil




                                                                                                                                                                                                                                                                                                                 Suriname
                                                                                                               Cuba
                                                                                                               Chile
                                                                               Peru
    Regional Scope Agreement                                               A L A D I
                                                                             Andean
    Customs Unions                                                 Mercosur Community                                      CACM                                                          CARICOM
    Free Trade Areas
    Andean Community - Brazil                                        X         XX X X X
    Brazil - Mexico                                                  X                                X
    CACM - Chile                                                                                                   XXXXXX
    CARICOM - Dominican Republic                                                                                                         XXXXXXXXXX
    Chile - Colombia                                                             X                                 X
    Chile - Ecuador                                                                  X                             X
    Chile - Mercosur                                               XXX X                                           X
    Chile - Mexico                                                                                    X            X
    Chile - Venezuela                                                                     X                        X
    Costa Rica - Mexico                                                                               X                X
    G3 (Colombia, Mexico, Venezuela)                                             X        X           X
    Mexico - Nicaragua                                                                                X                           X
    NAFTA (US -PR-, CA, MX)                                                                           X                                                                                                                                                                                                                                                               X
    Northern Triangle                                                                                 X                    XXX
    Andean Community* - US                                                      X X X
    Andean Community** - MERCOSUR                                  XXXX        XX X X X
    CACM - Panama                                                                                                      XXXXXX
    Colombia - Canada                                                            X
    Colombia - European Union                                                    X
    MERCOSUR - Mexico                                              XXXX                               X
    * Colombia, Ecuador and Peru only



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    ** Colombia, Ecuador and Venezuela only
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                                                                                                                                                                                                                                                                                                                                                                               #
Current Trade Agreements


NAFTA           G2                     MERCOSUR
             Colombia
                                        Argentina
Costa Rica    Bolivia
                                         Brasil
Nicaragua      CHILE
                                          Peru
ISRAEL        Salvador,
                          Mexico
             Guatemala,
             Honduras

 EFTA        Uruguay




European        Japan
 Union


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Other Current Customs Topics

     Classification




     Valuation




     Transshipment (Bonded Warehouse)

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                          Customs & International
                          Trade Practice




Armando Beteta
Director of CIT
Latin America Business Center
Ernst & Young, L.L.P.
(214) 969-8596
armando.beteta@ey.com




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