Promoting reforms: Chamber efforts help streamline Customs procedures.

Although the Mexican Customs Administration has taken enormous strides to modernize its service to facilitate the efficient flow of goods into the country since the implementation of Nafta, importers know there is still much that can be done to create the 21st century agency Mexico needs to maintain its global competitiveness. At some points of entry, Customs authorities keep bankers' hours while importers continue to be frustrated at the thought that one minor error on a customs declaration can mean not only lengthy and costly delays, but also substantial fines and forthcoming audits.

The results of a survey of AMERICAN CHAMBER/MEXICO member companies in 2003 showed that Customs is one of the areas where members feel improvements can be made in order to strengthen the country's global competitive position. Modernizing Customs procedures, shortening border-crossing times, reducing delays and providing more flexibility in amending declarations were some of the specific reforms to which AMCHAM members pointed. Businesses are adamant that achieving positive results in these areas can reduce the cost of doing business in Mexico--making the country a more attractive place to invest and trade.

The Chamber's Competitiveness Working Group took on the responsibility of compiling member concerns about these issues, formulating recommendations for resolving problems and presenting them to the Mexican government as a catalyst for producing necessary changes. After more than a year of effort, the Chamber has succeeded in effecting several of the recommended Customs changes it has advocated.

Several of the Chamber's recommendations focused upon creating additional Customs advantages for Certified Companies. The Certified Company program provides a more streamlined and efficient passage through Customs procedures for those companies that meet certain pre-established conditions. Expanding the benefits of the program for those companies already certified while broadening the base of companies eligible to meet certification requirements were two of the Chamber's principal recommendations.

GETTING RESULTS

The Customs Administration has responded positively to the Chamber's suggestions by allowing Certified Companies to rectify certain fields on import declarations that are normally not rectifiable. Changes in Customs regulations also allow Certified Companies the possibility of changing tariff schedules for merchandise that has been deemed inappropriately declared during Customs inspections.

Perhaps more importantly, the Certified Company program is being expanded to include more companies in addition to the very large importers that already receive its benefits. Specifically, the amount of imports required to be eligible for the program is being lowered so that medium-sized importers can take advantage of the program. Likewise, express delivery companies are now eligible to enter the program.

Another major benefit the express courier companies have received lies in the fact that the declared value of a package that would prompt a Customs inspection has been raised from US$1.00 to US$50.00. This allows for a much faster and more efficient service by companies such as UPS and FedEx.

WORK TO DO

Some of the recommendations made by the Chamber's working group still have not been resolved, although the Customs Administration is aware of them and negotiations are ongoing. For example, the Mexican government has still not implemented recommendations that would allow the express delivery industry to separate fiscal from physical release.

Currently, payment and document submission is done before merchandise is inspected. The carriers finance duties and taxes, merchandise is cleared and money is reimbursed through COD to the carrier during delivery. The Chamber has recommended that Customs separate release for delivery from final submission of goods declaration, supporting documents and payment of duty.

AMCHAM also continues to work on improving Customs hours of service. At some ports of entry, Mexican Customs does not work hours that are convenient to importers and, on the border, does not maintain the same hours as its U.S. counterparts just a few meters away.

Although many of these reforms may seem simple at first glance, achieving their implementation is an arduous process. The results have been worth the effort, however, as companies are decreasing the cost of their operations and creating more efficient logistics chains. The result for Mexico is the development of a more favorable business climate conducive to attracting investment and creating jobs.

For more information about Mexican Customs and the Certified Company Program, please contact him at the AMERICAN CHAMBER/MEXICO on: 5566-2807 or 5592-4668

Gary Deaton is AMCHAM's policy analysis director.