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Due to the broad activity that Mexico had at the end of 2018 in relation to the signing of the USMCA and the entry into force of a new Free Trade Agreement, such as the CPTTP, TMC considers is important to return to the topic of how to take advantage of a wide network of Treaties and Commercial Agreements, and the proper way to apply the tariff preferences under their application.
In the framework of Free Trade Agreements and International Commercial Agreements signed by Mexico today, is established the elimination or reduction of import taxes in the countries to which goods obtained or manufactured in Mexico are exported and qualify as originating.
The process to determine that a good qualifies as originating is known as Certification of Origin, which consists, depending on the case, of one or two stages.
When in the Treaty or International Commercial Agreement it is established that the certificate of origin applicable to such Treaty or Agreement, only be completed and signed by the Exporter or by the Producer of the good, only the Validation stage must be fulfilled Certificate of origin, which is made only by the exporter.
On the other hand, if in the Treaty or Agreement, it is specifically established that the applicable certificate of origin must be completed and signed by the Exporter or the Producer of the property and additionally be stamped and signed by the competent governmental authority (Ministry of Economy), the following two stages must be managed:
1. Product registration.
2. Validation of Certificate of origin
It is important to highlight that the steps mentioned above, its processing must be done through the Single Window System (VUCEM), web portal through which the Mexican authority will be handling the respective approval of the registration of products as well as the issuance and approval of the respective certificates of origin.
With the purpose that the interested parties correctly locate the manner in which the process to apply a tariff preference should be handled under the FTAs and Trade Agreements that Mexico has to date, pursuant to the aforementioned mechanism, below A breakdown of this process is presented:
• TREATIES AND AGREEMENTS TO WHICH ONLY ONE STAGE /
WITH CERTIFICATE OF ORIGIN FORMAT IS APPLIED:
• North American Free Trade Agreement (NAFTA).
• Free Trade Agreement between Mexico and Israel.
• Free Trade Agreement between Mexico and Costa Rica, El Salvador, Guatemala,
Honduras and Nicaragua.
• Agreement of Economic Complementation N 66 celebrated between Mexico and
• TREATIES AND AGREEMENTS TO WHICH ONLY ONE STAGE APPLIES / WITHOUT
PRE-ESTABLISHED CERTIFICATE OF ORIGIN FORMAT:
• Trans-Pacific Partnership Treaty (CPTTP): Certification to be handled in any
• TREATIES AND AGREEMENTS TO WHICH TWO STAGES ARE APPLIED:
• Free Trade Agreement between Mexico and Colombia.
• Free Trade Agreement between Mexico and European Union.
• Free Trade Agreement between Mexico and Uruguay.
• Free Trade Agreement between Mexico and the States of the European Free
• Agreement for the Strengthening of the Economic Association between
Mexico and Japan.
• Commercial Integration Agreement between Mexico and the Republic of Peru.
• Free Trade Agreement between Mexico and Panama.
• Agreement of Economic Complementation No. 6 celebrated between Argentina
• Economic Complementation Agreement No. 51 between Cuba and Mexico.
• Economic Complementation Agreement No. 53 between Brazil and Mexico.
• Agreement of Economic Complementation No. 55 celebrated between Mercosur
• Partial Scope Renegotiation Agreement No. 29, concluded between Ecuador and
• Partial Scope Renegotiation Agreement No. 38, concluded between Mexico and
• Regional Tariff Preference Partial Scope Agreement No. 4.
• Countries that grant us a tariff preference under the Generalized System of
Preferences, GSP: Canada, New Zealand, Russia and Belarus.
• Treaty between the Countries of the Pacific Alliance.
• INVOICE DECLARATION:
The Declaration in invoice is an option that provides the authority so that those shipments abroad that are greater than €6,000 euros, in the body of a commercial invoice or in the delivery order or in any other commercial document, can be handled a declaration together with an authorized exporter number, through which it can be identified as a proof of origin for the application of tariff preferences.
In order to make use of this option, the interested party must obtain the approval from the respective authority (Ministry of Economy), which grants a number that exporters can use in their operations. The modalities that exist for the use of this mechanism are mentioned below:
• Exporters that operate under the IMMEX Decree.
• Exporters that send products abroad worth $ 150,000 USD.
• Exporters of perishable products.
• Exporters of artisan products.
The Treaties signed by Mexico which consider the use of an invoice declaration are the follows:
• Free Trade Agreement with the European Union.
• Free Trade Agreement between Mexico and the States of the European Free
VALIDATION OF CERTIFICATES OF ORIGIN
In the case of Mexican exporters who have business relationships with companies abroad, as part of the process of interaction with these partners, there is a need for a certificate of origin to be requested as part of the required documentation. According to the client’s needs, it can be used to:
• Application of tariff preferences.
• Demonstrate that the product (s) that it protects were manufactured in Mexico
and not to obtain reductions in import taxes in the destination markets.
The certificate of origin formats are established in each of the Free Trade Agreements and International Trade Agreements signed by Mexico and there is no Single format applicable to all the International Trade Agreements or Agreements of reference.
The benefit for having a certificate of origin is to obtain a competitive advantage in international markets since the importer of products abroad can obtain a reduction of up to 100% of import taxes.
In order to obtain a certificate of origin, it is necessary that in principle the interested parties (exporters) have authorized a Product Registry, as mentioned in previous lines, with which they are able to issue such certificate guaranteed (certificate) by the Mexican authority.
It is important to mention that not all certificates of origin are freely reproduced. The following formats are made with special features and can’t be reproduced:
Treaty, Agreement or Scheme Format Name
FTA with European Union Certificate of Movement of Goods EUR-1
FTA with European Free Trade Association Certificate of Movement of Goods EUR-1
Countries that grant tariff preferences in the Generalized System of Preferences (GSP) Form “A”
Agreement for the strengthening of the Economic Association between Japan and Mexico Certificate of origin Mexico – Japan Agreement.
DOCUMENTATION / INFORMATION THAT SUPPORTS THE ISSUANCE OF CERTIFICATES OF ORIGIN:
As part of the commitments covered by all the Agreements and Commercial Agreements signed by Mexico, there is one that implies to preserve documentation and information that serves as the basis for the issuance of certificates of origin, invoice declarations or certificates of origin (evidence of origin) based on which preferences are applied by the clients.
Keeping the aforementioned information and documentation is due to the authorities in charge of monitoring the correct handling and use of the aforementioned evidence, at all times have the power to carry out reviews, so it is always recommended to have well organized, classified and available this information.
It is also necessary to mention that as part of the commitments that are held at the time of issuance of a proof of origin, it is related to keeping the material / BOM (Bill of Materials) list up-to-date at all time and area responsible for feeding such system, notify the person in charge of issuing the proofs of origin, any change in relation to the supply of inputs for the manufacture of the object of the emission of the proof of origin, since such change could alter the analysis for compliance with the rule of origin and with it the issuance of the aforementioned documents, in such case, the issuer would have the obligation to inform its clients to those who have issued a proof of origin, which from the day on the change of supply was made, the good that sells it, is no longer susceptible to receive preferential treatment under the FTA or Commercial Agreement through which it has issued the proof originally.
TMC Legal® professionals, we are at your disposal to support you with the interpretation and compliance with the aforementioned provisions.
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