What is foreign trade?

Foreign trade is the purchase/sale of goods and services between countries, as regulated by trade treaties, agreements, and organizations such as the WTO (which regulates international trade relations).

What is customs clearance?

Customs clearance refers to the acts and formalities surrounding the entry/exit of goods between nations. Different customs traffic and systems are set forth in customs legislation by customs officers and consignees, addressees, owners, holders or payees in imports operations and senders in export operations, customs brokers and special customs clearance agents.

What is a free trade zone area?

A free zone area is a building where the foreign trade merchandise handling, storage, custody, loading and unloading, taxation and customs-clearance activities are performed.

What are some common kinds of customs traffic?

Merchandise may be introduced or extracted from national territory by ocean, land air, river, mail, pipeline, cable or satellite.

What are the different categories of customs systems?

Official customs systems classifications include:

  • Final (A1), (A3), (C1), (C2), (D1), (K1), (L1), (V2) and (V5)
  • Temporary (A2), (A6), (J2), (H2),(H3) and (J1)
  • In-Bond Warehouse (A4), (A7), (A8), (G1), (C3), (H4), (H5) and (K2)
  • Transformation in In-Bond Warehouse (M1), (M2) and (J3)
  • Internal Transit (T3), (T6), (T7), (T8) and (R3)
  • Strategic In-Bond Warehouse

Who are the major parties in the customs process?

Major parties in the customs process include foreign trade governing bodies, customs brokers, and special customs clearing agents. Foreign trade operations are regulated by governing bodies such as the Secretariat of Revenue and Public Credit (through its decentralized agency, SAT) and the Secretariat of the Economy. Customs brokers are authorized by SHCP for third-party clearance of merchandise in accordance with customs law. Special customs clearing agents are similar to customs brokers, but they can only work from their employer's customs office, with the employer holding unlimited liability over the agents.

What are the different kinds of customs taxes?

Customs taxes may be classified as:

  • IGIE- Ad-Valorem, fixed and mixed rate
  • IVA- fixed rate
  • IEPS.- fixed rate
  • COUNTERVAILING DUTIES- quota
  • DTA - fixed rate, percentage
  • ISR - Expenses (deductibility of purchases) and Income (accumulation of foreign sales)

What is a customs declaration?

This fiscal document proves that the merchandise was legally imported or exported. The taxpayer uses it to declare taxes, which permits he is subject to, and the conditions of the declared customs operation.

What are the functions of the importing party?

The importing party must maintain a number of critical documents, data, and record-keeping processes. Examples include Foreign Trade Tax payments, registration in the Importing Party Roster (and the appropriate Specific Sector Roster), information to prove merchandise's place of origin, and the correct tariff information to import merchandise. This party is also responsible for processing its operations before customs, making use of customs declarations (and other related documents),and granting Letters of Appointment to the relevant customs broker.

What are incoterms, and what are they used for?

Incoterms are the terms commonly used in Foreign Trade, as established by international rules. They're used to express the importers’ and exporters’ responsibilities, determine the documents to be processed by each party, and help determine customs value for import tax calculations. The incoterms you'll see in customs transactions include:

  • Ex-works, ex-factory, ex-warehouse
  • FCA (free carrier)
  • FAS (free alongside ship)
  • FOB (free on board)
  • C&F or CFR (cost & freight)
  • CIF (cost, insurance & freight)
  • CPT (carriage paid to)
  • CIP (carriage and Insurance paid to)
  • DAF (delivered at frontier)
  • DEQ (delivered ex quay - duty paid)
  • DDU (delivered duty unpaid)
  • DDP (delivered duty paid)

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