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Mexico Adopts New Measures to Prevent Undervaluation of Imported Footwear

Monday, September 08, 2014
Sandler, Travis & Rosenberg Trade Report

The Mexican government on Aug. 29 issued a decree announcing a new set measures aimed at preventing the undervaluation of imported footwear and enhancing the productivity and competitiveness of domestic footwear manufacturers. Although the decree does include a list of specific tariff lines, a Sept. 1 amendment to  Mexico’s general foreign trade rules confirms that the footwear targeted by this action is classified under HTSMX 6401.10.01, 6401.92.01, 6401.92.99, 6401.99.01, 6401.99.02, 6401.99.99, 6402.19.01, 6402.19.02, 6402.19.03, 6402.19.99, 6402.20.01, 6402.91.01, 6402.91.02, 6402.99.01, 6402.99.02, 6402.99.03, 6402.99.04, 6402.99.05, 6402.99.06, 6402.99.99, 6403.19.01, 6403.19.02, 6403.19.99, 6403.20.01, 6403.40.01, 6403.51.01, 6403.51.02, 6403.51.99, 6403.59.01, 6403.59.02, 6403.59.99, 6403.91.01, 6403.91.02, 6403.91.03, 6403.91.04, 6403.91.99, 6403.99.01, 6403.99.02, 6403.99.03, 6403.99.04, 6403.99.05, 6403.99.06, 6404.11.01, 6404.11.02, 6404.11.03, 6404.11.99, 6404.19.01, 6404.19.02, 6404.19.03, 6404.19.99, 6404.20.01, 6405.10.01, 6405.20.01, 6405.20.02, 6405.20.99, 6405.90.01 and 6405.90.99.

Among other things, the decree authorizes the Ministry of Economy and the Ministry of Finance and Public Credit to carry out the following permanent actions to prevent and combat undervaluation in the footwear import market:

- gather any relevant information to prevent, detect and punish undervaluation practices, and identify any goods subject to surveillance for undervaluation reasons;

- develop a specialized risk analysis methodology that results in assertive reviews, including by designating authorized ports of entry to process footwear imports (the following ports have been designated to process footwear imports effective Oct. 1, 2014: Mexico City International Airport, Ciudad Hidalgo, Lázaro Cárdenas, Manzanillo, México, Guadalajara, Nuevo Laredo, Tijuana and Veracruz);

- coordinate actions with qualified persons recognized for their work in the field of risk analysis by specialized academic institutions, business associations, and international organizations and foreign governments;

- establish non-tariff regulations and restrictions on footwear imports in accordance with the Foreign Trade Law, including automatic prior licenses;

- require footwear importers to be listed in a sector-specific registry (this requirement has already been adopted and will enter into force on Oct. 1, 2014); and

- develop mechanisms to monitor the customs value of imported footwear, including by establishing measures such as estimated prices and alert prices that guarantee the collection of any tax liabilities.

The decree also authorizes the Ministry of Economy to advise the domestic footwear industry associations about the feasibility of pursuing trade remedy actions against imported footwear, including antidumping and safeguard proceedings. Moreover, Mexican authorities have decided to postpone from Jan. 1, 2015 to Jan. 31, 2019 the scheduled reduction from 30 percent to 20 percent in the MFN duty rate for footwear classified under HTSMX 6402.19.01, 6402.20.01, 6402.91.01, 6402.99.01, 6402.99.02, 6402.99.04, 6403.91.99, 6403.99.02, 6403.99.03, 6403.99.04, 6404.11.01, 6404.11.02, 6404.11.99 and 6404.19.02.

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