For your seven billion dollars. The tongue of twice that exists. The risk is ninety percent. They are from SMEs that generate 80 per cent of your time and I would give you information on the most relevant foreign trade, fiscal and customs issues with a human touch. And let' s do a Truik, a podcast of maga TVs and Mexica Hi how are you good afternoon welcome. Let' s barter as it comes out at a telese magas event in
Mexico. I am very happy to greet you and good to welcome you to the month of August, the first month, the first day of the month of August, that we have barter, but well I wanted. I' m glad to say hello. Doctor Maximo, as you are, Hector, how you are. I' m so glad you' re joining us today to barter. And well Dani, today' s topic and barter is the importance of customs planning in foreign trade operations. So, if you' ll
allow me, I' m going to present your face. Dr Héctor Díaz is a PhD in Donor Law and Foreign Trade Law at the University Center for Legal Studies. He holds a degree in International Trade, a graduate of the Higher School of International Trade, with more than thirty years of experience in logistics and foreign trade. For nineteen years he worked in the Latin American mater company, where he developed in different positions. His last position in this company was
as the representative of regulatory matters for Latin America. He is also a professor at the University Center for Legal Studies, a member of the NIEM Member also of the National Logistics Committee of the Mexican Foreign Trade Council. CONCE participated in the National Committee of Technical Barriers to Trade of the Ministry of Economy and also
in the Technical Committee for the elaboration of Mexican official standards. At the Directorate - General of Standards, he conducts training courses on logistics and customs issues, as well as being a lecturer on international trade issues at different universities in our country. Currently he is a partner and commercial director of the firm ah J H Drivers of Customs and Logistics and Foreign Trade at the firm International Market Access
and Standards. He serves as Director of Operations and Accounts, already with the publication of the book entitled Functional Logistics in International Trade and is also co- author of the book called the topic commented. Hector, thank you so much today for being here, for joining us thanks to everyone who connects both on YouTube and our social networks. And I' ll tell you again. Today ' s barter is the importance of customs planning in foreign trade operations. Welcome
to Hector. On the contrary, Danie, thank you very much for the invitation, thank you very much for your audience, for this opportunity to share some time and some of the experience lived an honor. He' ll be here sharing stage with the Doctor maximum and with the other panel representatives. A big hug for them. Let' s get started. I have a little presentation itself that we can share later. And, well, you were already talking about the book. There it is available in the publishing house, which
we have there for the client discussion. And precisely within what is the logistic process, the different elements that make up the process, we find just the process of customs clearance as one of the most important elements. I always mention it like the neck of the bottle. What is the reason if, for some situation or we omit with s s the implications of this process or this element of the logistic process, it could have critical consequences to us at the
moment of what is the dispatch, of what is the logistic process. Why?
What is the reason if we do not consider from the beginning that the product must have or will have some implications in normative or legal matters, or some Mexican official norm, some permission from any of the secretariats, and we do not have it at the moment that the goods are already in the port, What it will bring as a consequence is additional costs, such as expenses of storage of arrears in the case of maritime traffic, storages in the case
of air traffic And besides, we would also have the problem of delay in the operation. If it is a commodity that already has a certain urgency to be delivered, it can be a situation that complicates everything and good we will enter into context what is customs clearance and we will see how important it has in everything that has to do with foreign trade. Regularly when we need a product, if we realize, in most cases, in many situations, many
of these products are of foreign origin. Around us. In products of daily consumption we are having this type of products and without perhaps on many occasions we are unaware of all the implications that have the fact that that product can reach our hands, either for personal consumption, for use in some production process or to provide some service. In some cases too and this we will find in
the same way at the time of export. We, when we are developing products now that the theme of the new shopping is very high, because also Mexican products that travel to other countries or that are destined to other countries have to comply with the regulations that are required to enter those markets. We think that the office is the fact of preparing a pediment, validating that expedition, paying taxes, submitting them to the mechanism, automated selection, it is up
to you to review or not. And already ready the release of the goods is like regular people or companies. Employers consider that it should be the clearance
of goods. However, entering into this matter, we will realize that there are a number of legal implications that must be taken into consideration when carrying out this element of the process, the customs law, the liba law, the Foreign Trade Act, the Federal Law on Rights, the law on excise duty on products and services, the different decrees and agreements of the secretariats and the Federal Tax Code as a supplementary law of the customs law, the general rules
of foreign trade, the income tax law, the anti- laundering law, the health laws, to mention a few. We could still talk about a lot more that are going to be involved in this issue. And well, here we' re going to talk about one of a super important law that connects with all of this, which is the General Import and Export Tax Act. On the understanding that the first data to be obtained or identified is the
tariff classification of goods. Why? Why is it so important, because tariff classification is going to help us connect that thread, which connects all the legal implications that a product is going to have, from what import tariffs are, if it is subject to the payment of a VAT, if it is subject to a permit, if it is committed to a compensatory quota for the origin it has. All of this we' re going to identify through the tariff
fraction. Tariff classification will help us to cope with this situation or to know all the implications of importing a commodity and avoid such situations. Today, with what we know about online shopping, we often click on the comps button not knowing what the consequences are going to be, and this is reflected in a series of products abandoned in customs, precisely because they have implications with some health issue and that we cofeprist We have to process a permit or that we have
to certify under a rule. Just a few days ago, about a month ago, a customer who bought a watch one of the famous smar Watch on a digital platform came from Europe. The clock cost him$ 3, 500 and was subject to compliance with an official Mexican norm and there was no way to look at that compliance. The purchase of this product did not have to be discontinued because it had no way of covering the cost of compliance with that
standard. Such situations arise at the time of online shopping and we sometimes know
them precisely and put us in a complicated situation. Then the office has three times previous acts that we mentioned right within what is customs planning is to identify what are the implications, to know if it is subject to any label or some permit or some certification, to work from before the goods are even shipped, so that when they arrive at the port or airport or destination, we have already covered all those implications and thus avoid any situation that could hold the
goods at customs. Let us not remember that the most expensive hotel in the world is customs precisely and that is why it is very important that we take this part into consideration in order to avoid having to be paying costs of soul - cense delays. There are even times when we do not identify the amount of taxes that have to be paid or if the goods are subject to payment of a compensatory fee and suddenly that situation. Lack of financial resources can lead
to delays. No and as we commented not regularly in port customs the terminals have one by law they grant seven days free of storages from day eight. You have to pay a storage fee for each day that that product or that shipment is in the port terminal. Shipping companies also have a deadline for the importer to have to return that empty and clean container and if he does not return it, then he will have to pay a fee of delays that can
go from$ 150 to$ 200 per day. So let' s imagine that we have a standard, that an official Mexican norm that is subject to that product and that has to carry out testing methods that will take approximately sixty days. No And then, during those sixty days, discounting the seven days free of storage, all that you will have to pay for not having the certification of that product the same at the time of being looking at the issue
of delays. But besides, there is another situation. Article twenty- nine of the Duanera law tells us that after sixty days in the case of imports, it will be considered that the goods are already being abandoned tacitly speaking and this means that if the authority decides, it can dispose of that goods. If we have not withdrawn it, then those are the issues that arise if we do not identify all the implications it has for imports into our country or
any other country related to the subject of foreign trade. That is why planning is important, from the fact of saving or carrying a financial reserve to cover that tax commitment to the fact of complying with all permits authorizations procedures that have to be carried out to avoid this issue of delays. The next act is
from the office. That we know that the customs authorities have the power to ensure that all these requirements are being met and, if it is identified that any of them are not met, there may be an economic consequence or even confiscation of the goods when it comes to safety regulations or security regulations. And this obviously directly affects the assets of companies or importers. That is why it is very important to take that planning into account, precisely in order to avoid
any situation. And then, if we get rid of the subject of the review in the office, there are subsequent activities, which are the famous audits that the authorities can still do to claim any situation that arise up to here have some momentary doubts. Hector wasn' t born, so in the end we can ask a question session, certain places perfect maybe. I' m going too fast, you' re not going, all right, all right. Within the previous acts, I told them it is important to plan,
to take into consideration all these elements. And in order to carry out this planning, as I told you a moment ago, the first thing we have to do is identify an engineering enriching greeting, identify the tariff classification of the goods. Well, the tariff classification that is the base or, as I told you earlier, the thread that connects all the legal implications that must be fulfilled at the time that the merchandise is going to enter or even leave our
country, which is the tariff classification. Well, it' s this code that helps us identify and that' s based on the harmonized commodity coding system administered by the World Customs Organization. We find that it helps us to identify in an orderly manner and classify the goods, not as their name says, codify them. This system applies to everyone and we could say that all countries
that adhere to this harmonised system have this standardization or approval. As for the six- digit code at subheading level, all countries that are part of the World Customs Organization are going to have the same classification and, to say the least, if chapter ninety- five or heading ninety- five three tells us that there we are going to find all the toys in Mexico, in China,
in Argentina, in the United States. It' s going to be exactly that ninety- five three for toys wherever they' re classified or wherever they' re going to be imported. In this way it is also possible to approve the identification of which type of regulations and restrictions will be required already
each country establishes it in a timely manner, naming them accordingly. In order to carry out the tariff classification, well, some technical information is required, mainly of the goods, and to answer some questions such as what it is, what it is for, what it is made of. These questions will help us to codify or identify in terms of the tariff fraction the goods and thus be able to associate them or link them to all the regulations and restrictions
to which they will be subject. As I mentioned, the World Customs Organization administers this harmonized system, which is the basis of the general import and export tax law. In six days, here we see the first two digits speak of the chapter, the three and four give us the game, the five and the six give us the sub game and then we would have eight digits
the tariff fraction and from two thousand twenty. In the sixth amendment, we find in the sixth amendment the niches, the commercial identification number that helps us with the statistical question mainly, although in some cases they also touch on the regulatory issue. But in general terms, this data will help us identify everything that has to do with tariff fractions. But first, before the topic, and the classification, it is also important to know the business model of the
company. Why. Because any company that intends to import a commodity must have a register on the importer' s register. In the first instance for goods in general. In order to be able to obtain this registration in the importer ' s register, it is obviously required that it be a company fulfilled in
its tax obligations, that has these. This favourable opinion of compliance with the declarations and good if it were to be so- called sensitive goods such as explosives, medicines, the textile industry, among others, would have to have a sectoral register or a register on a sectoral register, which is still a
little more demanding as to the information to be obtained. Similarly, if it is a company that has a promotion program such as the famous PROCEC or an Inmex program, it will have a special treatment, but that finally that also requires certain obligations on the part of that company and in the same way it has an OA BAJEPS certification and depending on the regime to which the goods are to be subjected, it will be the level of requirement regarding issues of regulations
and restrictions, it must comply. As we were saying, the tariff fraction is going to help us identify from the tariff that has to be paid if
it is. If it is a commodity that comes from a country with which Mexico has a free trade agreement, it will surely have a preferential rate in the same way if it has a sectoral promotion program, or if it is a commodity that is subject to payment of a compensatory fee, non- tariff regulations and restrictions, estimated prices, as with textiles or sensitive goods more commercial,
official Mexican hydrocarbon rules. If it is a commodity that can be used or handled under the transit or tax- deposit regime, there are also certain conditions for these. Or if they are goods that would have to be entered by an authorized customs office. All this we will find through the tariff fraction. How important it is that, in conclusion, this tariff fraction, good is the start of import and export processes show or reflect in the trade policy
of countries. He said that in the case of toys we have that the United States handles only three tariff fractions. They only worry if it is a toy that is aimed at children under three years of age or older and electrical toys. In the case of Mexico we have 36 tariff fractions for toys. In the case of Argentina there are about three hundred and fifty tariff fractions for toys depending on the trade policy that a country has, it is how one
sector is going to open up more. We could not see the example of textiles in the case of Mexico, which is even more complex in that sense. It will also help us identify non- tariff regulations and destructions. Taxes. Formalities of clearance, as we said authorized customs are the basis for the rules of origin. Free trade agreements also have a special chapter for current programmes,
such as the LIMEX process. We have chapter ninety- eight. They will also help us to do a skill analysis for importing and marketing a product. Later on, let' s look at that issue of feasibility, which we could say is super important for companies to identify that feasibility. It also serves to enable authorities to identify statistical information and determine how their trade balance is moving and helps us to have traceability to identify unfair practices or improper activities in
foreign trade. In the case of regulations, we will see how a large number of trarancelaria fractions are subject to some regulation or restriction by the Mexican National Customs Agency. In the case of the estimated prices, the sensitive goods sectoral patterns, all these goods will be subject to some regulation by the National Customs
Agency in the case of the Ministry of Economy. It' s still a little bit more complete on the subject, because we' re talking about over one hundred and seventy- seven percent of the seven thousand eight hundred fractions that our rate has are subject to some regulation by the Secretariat of Economy. And here we could be talking about one about regulation. And I' m going to give you an example of what happens to the NOMS in the case of
official Mexican standards. In Mexico we have a structure regarding the implementation of NOMS that goes by function, that is, vertically and not horizontally, and that makes a product subject to more than one or two official Mexican norms. What happens, for example, to toys? In the case of toys. We have to first the toy is subject to the norm zero fifteen, which is
commercial information for toys. And if on that label tells us that the label should bring the data from the given range to which the toy is directed, if it has small parts, warn the parents that there is a risk that the child can suffocate with those small parts if it is a functional toy, that that toy, when it is using it, the child has to be under the surveillance of an adult and details of that type. No. But it is also subject to the nom two fifty- two which speaks of the
limits of bioavailability in coating metals that paints are used to paint toys. No. Why, Because regularly these paints have some heavy metals like lead, barium, cadmium, selenium, arsenic, which must be monitored and controlled for this
type of products. Why, Because the toy is considered as if it were a food and is even regulated by the Health Secretariat by the limits of bioavailability of these heavy metals, then this norm two, two, fifty and two sets out what are those limits that can be used in the paints that bring
the toys. We already have two rules, but if it is an electric or electronic toy, we are talking about going to the one that talks about electronic products in general, or not to the three in the case of electrical products in general. And this brings with it that it is also subject to the nom zero twenty- four that speaks of commercial information for electrical and electronic products, a manual for use when bringing batteries and all indications and recommendations for
those products, must also be complied with. We already have five official Mexican regulations. But if it were also a radio cons toy that is handled through, for example, a drone or a remote control cart, we are talking that it has a radio communication system that will force compliance with the number two
hundred and eight of radio communication equipment. We are already talking about six official Mexican rules for a toy and so we could talk about computers and other types of products that are also subject to more than one official Mexican norm, unlike what happens, for example, in Europe, which is only norm n seventy - one, with its four sections, which must be complied with for all toys in general, or in the case of the United States, the STM
nine six three is the only standard for toys and that makes it first much longer, complex and also costly to comply with these kinds of regulations. This is no reason why the new Law on Quality Infrastructure aims to change this regulatory structure in our country, precisely in order to reduce this over regulation that is taking place and that makes products more expensive to import into our country. Well,
compliance with all these regulations. There are fifty customs that we have in our country where the goods are going to enter and that, well, there we have them mainly in the north, precisely because of the intensity with which we have the trade with our neighbour on that side, because obviously more customs are. Nineteen customs on the northern border, two on the southern border, seventeen maritime. Also important are the most important customs. Here we come again
Laredo, Ciudad, Juárez, Tijuana. The first three are from the north too and, well, as I was saying, the importance of having this identification from the beginning from the tariff fraction so that I can really know how
much it will cost me to import that product. I always worry a little how it is that merchants manage to configure the price of the product and determine even the cost to which they are going to give it the sale price, considering an important margin of profitability, knowing by identifying all these implications that have the import of a product, because it would be important to identify this part and to have a clarity in the communication regarding the arrival of these goods and,
therefore, to flow this information and manage more effectively all the permits or authorizations that are required for the fulfillment for the waste. What points should we
consider here? I put in a short list. We will see it have the register of importers or sectoral registry, identify the customs procedure to which these goods are to be imported, the tariff classification, comply with customs formalities and apply trade facilitation measures, know the origin of the goods, identify the customs value, which is the basis for the calculation of taxes, comply with all tariff obligations and other contributions, comply with non- tariff measures and know which
obligations are imposed. As far as the means of transport and linking that part of the linconterm is also very important and here I told you that it is important to know this feasibility or to identify this feasibility or feasibility in every way
in the operational question. If we have enough resources, human resources to be able to carry out the operation, the full technical knowledge of the goods that we are going to import, the financial determination, what is super important, what profitability will actually generate me and the times that I have to be able
to reach these goods. This will depend heavily on the type of transport that I am going to handle, the legal policy, I told you the legal implications that it has and the commercial aspect, to know what is the price that the competition gives, to know if I am within the margins, to know if my product is going to be competitive, how I can determine the
issue of costs. It is also important to know that the volume of the packing for the cost of the freights we have to distribute it in the quantity of parts that we can bring into it within a container, within the shipment the cost of the goods. All these elements will help us to know the real cost of import, international transport, insurance and, in this way,
be able to identify whether the import cost in all directions. No. That is why it is important to carry out this planning precisely in order to have all the elements, avoid delays and know fully what the real cost of the
operation is. One of the topics that I have been identifying in recent years and that it is very important to recommend is that, many times, in the logistics chain, that is, in the interaction between the adbanal agent and the importing company, on many occasions it is not possible to connect that communication.
And this brings a consequence because we remember that we, because we have to make use of the annual people, that is the expert everything that has to do with the office and this, obviously, has to tell us to listen you are your merchandise, according to the classification, is subject to this
permission, to this authorization. You have to pay this tax. In other words, this is a joint work that requires a very timely communication in all the elements of the logistic chain, from the supplier, the buyer and the logistic actors, within them, in the adbanal people, so that good planning and an orchard execution can be achieved in the dispatch of the goods, identify all the implications and manage in time and form the permits is super important.
Unfortunately, companies, people working in agencies often have a significant workload and suddenly fail to assertively communicate these kinds of situations. And this brings a consequence because many times the importer is more focused on the marketing of their products and does not care about these situations. Turns out nobody cares. And until the shipments to customs arrive, then we' re already running around with you urging this
permission and it' s already costing me this. And this is how unfortunately happens, because of this lack of communication between the different elements of the process and that it is suddenly necessary to align this communication well, precisely to avoid these losses that it has mine to affect the entire logistic chain, because if a company that is constantly carrying out imports suddenly has this situation of cost delays,
because obviously it ceases to have that competitiveness and runs the risk of even decreasing its imports or even disappearing. This is why communication and teamwork between all the elements that make up the process, whether internally or externally, is very important. Many times internally the policies that each department carries. For example, the finance area says no. I have a policy to schedule payments 30 days in advance and if you don' t file the application, I can'
t do it by tomorrow. And well, we know that customs doesn' t fund taxes and if we don' t have that quick reaction time, because we' re going to be starting to run the risk of generating additional costs that weren' t contemplated and that little by little they' re going to reduce the profitability of the business to a point where we' re already
talking about a loss rather than a utility in that project. No, and that, therefore, without taking into account the issue of the delivery of the product in time, which is also super important, because if it were a product of temporality, suddenly arriving already with fifteen days of delay, because it no longer serves much, already it is left that merchandise lags behind and becomes
a loss. We said, in the case of the toy industry, that the toy, without being a food, is also a perishable, because after January 6, in the case of Mexico, the toy that continues in the shelf. That toy is already lost and will no longer be sold at the price intended, because people are no longer looking for toys. It' s
not like the product you' re looking for after January 6. So, that' s why it' s important to have him on the shelf early, meeting all the requirements that have to be met in order to be there at that point of sale. All right. I think we' re already at the end. Excellent way you' re missing plates. No, no, okay, okay. I want it, or you' re saying it right now. If they' re reporting inconsistency on the Internet. We take no inconsistencies. I' d like to know here I see an assistant who
' s raising his hand. I don' t know if you can put your questions and answers to us they' re also telling us here and sending me the question via Facebook. It is also part of the planning is to know the products and statistics that are handled where they can find information about the products that are mainly imported. In Mexico there is a system XABI, it is called that helps us to identify that. If there is a platform called trade maps, well, that applies globally, it has the record of all
the operations that countries run. Either of those two, in the case of Mexico, the ZIAB and for any other country can be the Trade Maps. Excellent, because I think everything was very clear here. I haven' t seen any questions around here I don' t know if in this case you Enrique who is very important to you too. If there' s a question
here, I' m sorry I' m seeing myself. It tells you there is a table where you can consult the NOMS, yes, it is dual- use, etcetera, for a faction in specific health mactor health rather than a table. We have attached point four one of the rules of trade to the rules of Secretariat of Economics Forgiveness. Attachments four, one, two, four, one is where we will identify or link the tariff fraction with the rules to which they are subject. And I don' t know if
you want to make a comment, Enrique. Yeah, listen to my dear Hector. What a good presentation you gave us that good keys and what good data you give us, how interesting, how important to see I definitely say the ones we manage the dinner classification. Many times we focus on knowing the
merchandise and classify it. But what comes next is all this that you just told us right now how important and how interesting all these things are, which has since then that you need to be the business sector and you need everything that comes with all those lines, how interesting to the rules of presentation, everything, I say and definitely the classification for dinner and is the important point
in any operation. I don' t also say many times I' ve met people who suddenly talk to me and tell me hey I' ve stuck in customs, such merchandise. I say what you' re missing, not because it' s what got me, but it needs a banal agent. Aren' t you already fried? You' re already fried. And, like you said, you' re gonna go through like a week can happen, you can spend three, four months and if you haven' t already
lost the merchandise, then what big problems there are. And people, then, must have that understanding, this logistics that you or you talked about all that time, this logistics and all that important. This and all that, that brings you to the classification in dinner. And now I' ve had the logistics more than important. Thank you, Hector, and we really liked your presentation. I really liked this, Dani Te, I' m going to ask that it' s a copy of this presentation, because I'
d like to see it and study it a little bit more. In the depths of all this data that Hector gives us, not the CIAVI me, don' t keep the statistics east. All that I handled when I was in the economy and we also fought a little bit over the question that tariff classification and is a little different from statistical classification. But all this takes us and all this gives us important information. Thank you, Hector, happiness.
It' s a hug and I was very happy to see you, no, thank you very much to you engineer, because thank you always, because you are part of the inspiration of being here sharing. Thank you, and now if you were a student, you got over it. Master. Thank you, a hug, a good hug. In this case. I don ' t know if anyone else wants to make any other comments and obviously, doctor you want some comments ahead. Thank you, Daniela, Dr Diaz,
for many congratulations. Thank you, first of all, for the kind mention you make to me and I am very fond of Enrique' s congratulations. It has really been a very instructive talk, It is simple and, for the same reason, of a great content and a great transmission of knowledge. With your films, you are shown by the erudition you have in the matter of foreign trade and the dates, the numbers of the rules, which is not so easy, for example, the last of the Secretariat of Economy to
see this list, etcetera. I congratulate him very much for this talk, which leaves us with a magnificent taste of mouth and a good learning. Thank you, Dr Diaz. Thank you very much, Doctor Maximo. There is no doubt that it is a challenge for me to be here in front of great speakers at national level, and it is a pleasure to be able to share a real honour, to be here. The honor is ours and thank
you so much you really wanted. I would like to ask a question, Hector, to whom we are being asked who can release a list of the countries that follow the nomenclature of the on class at the starting chapter level that we handle in Mexico or what interesting question. Well, I think we should go to the World Customs Organization page and there we can see all the countries that belong to that organization and have been subject to the system ahead. Doctor
maximum. There are two hundred and two who carry the harmonized system. Many are in their capacity as observers, but they have more countries and should be noted. This is the harmonized system that the UN itself, the United Nations, has, because of the importance of trade in the world. Thank you, Hector, for allowing me to buy two hundred and four between countries, associations and conglomerates like the European Union. And all that, you fool right
now. Practically if it' s marmonized, everybody uses it. There' s no day today, two of them joined yesterday. That' s why I had the data of two hundred and two. It' s interesting, interesting fact. Note and I sometimes processed the certificate to LADI for Brasilia, Argentina and even though they are also within what is the harmonized system for LADY.
You have to deal with the swimsdiper. It is not interesting that part that we have to find the link between the smokenized system and the naladiza to be able to process a certificate of origin of aladi We have reached the end of today' s trache. Thank you so much for joining us. This was let' s barter via are an event tes tels magísi Mexico. If you like this talk, don' t forget to share each event with your
contacts so that we continue to spread knowledge and stay up to date. Find all our talks through our online education platform, entering www FTAs Mexico com mx in the course section, where you can see them again without things. If you are interested in any specific topic. Send us a message through the social networks of magas hotels in Mexico and we will look for an expert who can clarify your doubts. This was let' s do a creec.