WORLD TRADE  
ORGANIZATION  G/VAL/W/153 
27 October 2005 
 
 (05-4987) 
Committee on Customs Valuation Original:   Spanish 
  
 
NOTIFICATION UNDER ARTICLE 22 OF THE CUSTOMS  
VALUATION AGREEMENT 
 
US Questions Regarding Mexico's Legislation
 
 
 
 The following communication, dated 21 October 2005, is being circulated at the request of the delegation of Mexico.  
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A. E
STIMATED PRICES (G/VAL/W/129) 
1. In its responses to questions on estimated prices, Mexico states that "the estimated price 
mechanism is used only as a surety  mechanism", and "there is no other surety method other than 
estimated prices".  Also, Mexico states that estimat ed prices are used in reference to undervaluation.  
"Can Mexico confirm that if transaction valu e cannot be applied because there is no sale and 
deductive value is to be applied -- the "sur ety mechanism" would not be applied"  
 
 If the terms of Article 1 of the Agreement do not apply ,i.e. there is no sale for export, Mexico 
would use other valuation methods.  Consequently , if, for example, Mexico has lists for other 
transactions of identical goods, as  mentioned in Article 2, or transactions of similar goods, as 
referred to in Article 3, the question of a surety m echanism would not apply.  On the other hand, if the 
valuation cannot be made in accordance with Artic les 2 and 3 and it is necessary to utilize one of the 
other valuation methods and subsequent investiga tion is required, the surety mechanism can be 
applied in order to allow the rapid clearance of the goods pending the findings of the investigation.   
 2. Does Mexico use estimated prices as the only mechanism to apply when it suspects 
undervaluation?  Please explain whether, and if so, how Mexico applies Decision 6.1 of the 
Committee on Customs Valuation when it has reasons to  doubt to the truth or accuracy of documents 
submitted by an importer.   Estimated prices are one of the mechanisms u sed if there is reason to doubt the truth or 
accuracy of the importer's declaration, as provided  in Ministerial Decision 6.1.  In addition, on a 
post-entry basis, Mexico uses risk profile techni ques to select those transactions which, in the 
experience of the Customs Administ ration, are likely to involve a false declaration of value and/or 
fraud.  An independent private service provider is asked to verify these tr ansactions in order to 
determine whether or not there are in fact reasons to doubt the tr uth or accuracy of the importer's 
declaration.  If such reasons exist, the Mexic an Customs will bring proceedings against the importers 
pursuant to Ministerial Decision 6.1. 
 
3. In response to question 9, Mexico states that it does not use estimated prices to value 
merchandise, but always uses transaction value.  Pl ease clarify:  does this mean that the estimated G/VAL/W/153 
Page 2  
 
 pricing mechanism is not used to reject applicat ion of transaction value, or that application of 
transaction value is never rejected on the basis of estimated prices?   
 An estimated price as such is not used to reject  application of transaction value, as indicated 
in Article 1.  An estimated price may, however, ser ve as an indicator in order to decide whether there 
are reasons to doubt the importer's declaration or it s accuracy.  Nevertheless, in such cases, Mexico 
looks into the case in more detail and gives th e importer the opportunity to provide additional 
information pursuant to Ministerial Decision 6.1  It  is only after the investigation has been completed 
that a decision will be taken on whether or not to accept the importer's declaration. 
 
 It must be explained that, according to  the "Resolution establishing the mechanism for 
guaranteeing payment of taxes on goods subject to estimated prices by the Ministry of Finance and 
Public Credit", they are solely  used for reference purposes and ma y not serve to determine the 
taxable base for the general import tax. 
 B. P
OST-IMPORTATION VERIFICATION PRACTICES (G/VAL/W/132) 
1. In response to question 13, Mexico cites Article 17 and paragraph 6 of Annex III of the 
Agreement, which states in part that customs admi nistrations may need to make enquiries concerning 
the truth or accuracy of any statement, documen t or declaration presented to them for customs 
valuation purposes, and Members have the right to e xpect the full cooperation of importers in their 
enquiries. 
 
• What export or exporter documents are pr esented to Mexico customs for customs 
valuation purposes? 
 
  The usual customs documents are the in voice or any other document showing the 
price paid or payable and the packing list.  Tec hnical specifications are also presented where 
these are required   Where neces sary, a declaration of value as defined in Annex 18 with 
details on the valuation, including the elements to be found in Article 8 of the WTO Customs Valuation Agreement. 
 
• Also, does Mexico interpret "full coope ration of importers" to mean the full 
cooperation of importe rs and exporters? 
 
  The text in paragraph 6 of Annex 3 to the Agreement specifically states "[…] 
Members, subject to their national laws and pr ocedures, have the right to expect the full 
cooperation of importers in these enquiries."  It is thus clear that the scope of "national laws 
and procedures" applies to the subjects covered by Mexican customs legislation, in which the 
second paragraph of Article 1 of the Customs La w states that:  "Any person introducing 
goods into Mexican territory or taking goods th erefrom shall comply with the aforementioned 
provisions […]".  We consider, therefore that  only persons who introduce into or take goods 
from Mexican territory are obliged to comp ly with the tax obligations under these 
instruments.  Consequently, the customs aut horities have the right to their full cooperation 
when exercising their verification powers.  
 
  Although Mexico expects full cooperation from importers, it can only hope that exporters will cooperate voluntarily in the in terests of supporting their importer clients. 
 
2. In response to our first question of Question 14 asking for the nature of the contract between 
the Government of Mexico and any post-impor tation provider, Mexico responds that it has 
agreements with other governments to exchange information.  G/VAL/W/153 
 Page 3 
 
 
  
• What is the nature of any contract between  the Government of Mexico and a private 
party to collect information from exporters ?  In this regard, please confirm that 
Mexico views agreements between Mexico  and another government to exchange 
information as the basis for permitting for a private verification provider to demand 
information directly from an exporter outside  of Mexico regarding the valuation of 
goods imported into Mexico, and explain wh ether these agreements explicitly allow 
for such undertakings by private parties on behalf of Mexico. 
 
  The customs authority s upport programme requires a pr ivate service provider to 
assist the customs by collecting post-impor tation information on specific transactions 
by the Mexican customs authorities, for example the following: 
 (a) Existence of the seller in the country declared.  (b) Existence of the producer in th e country declared (where applicable). 
 
(c) Name and commercial level of the exporter in relation to the importer.  (d) Relationship between the buyer and seller if this affects the price paid or payable. 
 (e) Consistency between the documentation of the buyer and the seller. 
 
(f) Detailed description of the goods, includ ing technical and commercial specifications 
(where applicable). 
 (g) Details of restrictions and terms of sale.  
 
(h) Details of adjustments in accordance with Article 8.  
 Based on the information collect ed, the Mexican customs decides whether to proceed with an 
investigation pursuant to Ministerial Decision 6.1.  
 The contract with the private service provider is not related to agreements between Mexico 
and other governments.  The role of the private service provider is different in the sense that it 
collects information that is either in the public doma in or is voluntarily provided by the exporter. 
 
3. We do not understand Mexico's response to Qu estion 15.  It appears the term "post-
importation verification provider" was misinterpreted to mean something other than the entity 
carrying out the verification.  We will clarify our question: 
• What specific findings are expected from th e post-importation verification provider to 
the Government of Mexico as a result of the examination of exporters outside of 
Mexico?  For example, is there an e xpectation for certain specific types of 
information, or determinations of va luation under the Valuation Agreement? 
 
  See the reply to question B.2 above.  There are no expectations of receiving specific 
information other than that indicated in paragraph B.2.  The information obtained by the post-importation verification provider should be sufficient to confirm and uphold any doubts 
the customs might have concerning the truth an d accuracy of the statements, documents or 
declarations by the buyer. 
 G/VAL/W/153 
Page 4  
 
 4. In response to Questions 16 and 24, Mexico states that confidentiality of information 
provided by exporters is protected by Mexican la w, which provides for safeguarding of information 
by public officials. 
• Is information surrounding the valuation of imported goods, such as declared value, 
considered confidential info rmation under Mexico Law? 
 
  Article 69 of the Federation's Tax Code  states that declarations and information 
provided by taxpayers and related third parties is confidential, including information on 
valuation. 
 
• Can Mexico confirm that it does not provide  such information to non-government 
persons or entities, such as domestic industry association? 
 
  Article 16-A and 16-B of the Customs La w allow the Tax Administration Service to 
authorize private entities to deal with in formation and undertake related verification 
activities.  In such cases, the authorized en tities only have access to information concerning 
the activity authorized. 
 
• If such information relating to valuation of goods imported into Mexico is made 
available to non-government persons such  as domestic industry associations, please 
outline the circumstances and procedures for doing so, along with an explanation of 
the consistency of such a practice with  Article 10 of the Customs Valuation 
Agreement. 
 
 The confidentiality of the information is protected  by strict contractual obligations in the case 
of the customs support service.  The information will only be used for the activity authorized 
and all information collected by the verification provider is exclusively for the use of the 
administration.  It is not disclosed to the public  and is used to allow the customs to meet its 
obligations under the Customs Law and the WTO Customs Valuation Agreement.  As 
specified in Article 10 of the Customs Valuatio n Agreement, the inform ation is treated as 
strictly confidential and is used so lely for customs valuation purposes. 
 
• Would Mexico’s law protecting confiden tiality of information apply to a post-
importation verification provider located  outside of Mexico and conducting 
verifications of exporters outside of Mexico? 
 
 The customs contractually obliges a priv ate service provider to comply with the 
confidentiality requirements.  Th ese confidentiality requirements are similar to those already 
incumbent on private service providers under the Agreement on Preshipment Inspection.  
Furthermore, Article 69 of the Federation's Tax Code contains provisi ons on the protection of 
confidentiality of information prov ided by third parties relating to the taxpayer, including exporters.  
Consequently, even when export information is obtai ned voluntarily in the country of export, the way 
in which it will be used in the country of import is protected in the same way as information provided 
by any Mexican taxpayer. 
 
5. Concerning the response to Question 17, our unde rstanding of exchange agreements is that 
they relate to the exchange of information between governments. 
  Agreements among Governments and the agreement between the Mexican 
Government and the customs private service provider  are not related.  The role of the private 
service provider is to conduct an independent enquiry into the facts and a study of the  G/VAL/W/153 
 Page 5 
 
 
 information obtained in order to  provide a basis for the future investigation, by the Mexican 
Customs Administration where relevant. 
 
• Please explain how such government-to-govern ment agreements provide a basis for a 
private party to act on behalf of Mexi co in obtaining business-confidential export 
information from a business outside of Mexico for purposes of customs valuation 
determinations. 
 
 The information requested is not related to industrial secrets nor does it imply any 
confidential commercial information but, as  already explained in the reply to 
question 3, it relates solely to the price, quantity and quality of the goods, as well as 
all the transactions between the foreign supplier and the Mexican importer over a 
specified period. 
 
6. In response to Question 19 on what information importers/exporters will be asked to provide 
to the post-importation verification providers, Mexico  states only "informatio n related to commercial 
operations and their documentation," which is a very broad category. 
• Please provide the specific information or data elements that are sought from 
exporters by post-importation verification providers under such arrangements, and 
please explain their relevance to customs va luation determinati ons on imported goods 
in accordance with the Agre ement on Customs Valuation. 
 
 As already mentioned, the information or dat a obtained from the foreign exporter only relate 
to the price, quantity and quality of  the goods, as well as all  the tr ansactions by the Mexican importer 
over a specified period.  The relevan ce of this information for verifying the legal determination of the 
customs value is solely for the pur pose of confirming that the commercial  documents (invoices), and 
the provider, confirm that the price is the correct one, which is consistent with Article 17 of the 
Agreement providing for the right of customs administr ations to satisfy themselves as to the truth and 
accuracy of any statement, document or declar ation presented for customs valuation purposes. 
 
 The type of information usually obtained by the private service provider is used according to 
the terms mentioned in paragraph B.2 above.  The info rmation is obtained either from the exporter or 
from another source of information.  All the inform ation is relevant for the customs valuation or for 
identifying possible cases of fraud or possible reas ons for doubting the truth or accuracy of the 
importer's declaration.  
7. Export value information is not generally require d to be based on the application of the WTO 
Valuation Agreement.  Thus for most countries fo r export value there is no transaction value, no 
provisions for assists, royalties, etc. and no hierarchy of methods. 
 
• Please explain the purpose of obtaining such information from exporters and its use 
for purposes of verifying customs valuation of importations in accordance with the application of the Customs Valuation Agreement. 
 
 As already indicated several times, the purpose is to confirm the veracity of the sales 
transactions for export to Mexico  by means of the certified documentation given to the provider.  
Foreign authorities, under agreements on avoidi ng double taxation and preventing income tax 
evasion concluded by Mexico with other governme nts, transmit to us commercial documents on 
transactions with the Mexican importer and the certified documentation given to the provider 
essentially allows us to ascertain the price, quantity  and quality of the goods, as well as the total G/VAL/W/153 
Page 6  
 
 number of transactions between the foreign s upplier and the Mexican importer over a specified 
period of time so that we can verify the trut h and accuracy regarding imports into Mexico. 
  The customs requires the private service prov ider to obtain information on export prices 
solely in cases of fraud.  Otherwise, the private ser vice provider is required to obtain information on 
the specific value of the transaction, e.g., the tr ansaction value for export, information on royalties, 
assists, etc.     The export price information may be used:  (a) as an indicator for identifying transactions 
where there may be doubts concerning the truth or accuracy of the importe r's declaration – these 
cases will be the subject of future investigation based on Ministerial D ecision 6.1;  or (b) application 
of the "fall-back" method.  The determination of  value for customs purposes is always conducted in 
strict compliance with the Customs Valuation Agreement. 
 
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