WORLD TRADE  
ORGANIZATION  G/VAL/W/132 
10 March 2004 
 
 (04-1058) 
Committee on Customs Valuation Original:   Spanish 
  
 
REPLIES TO THE QUESTIONS FROM THE UNITED STATES TO MEXICO 
ON CERTAIN CUSTOMS VALUATION POLICIES 
 
  The following communication, dated 9 March 2004, is being circulated at the request of the 
delegation of Mexico. 
 
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Questions by the United States of America to Me xico concerning estimated prices (G/VAL/W/129)
 
 
1. According to G/VAL/W/121, if the claimed cu stoms value is below the estimated price, 
the good is presumed to be undervalued.  How is this consistent with Mexico’s 
obligations under the WTO Agreement on Customs Valuation? 
 Mexico establishes estimated pr ices pursuant to the right conferred on it as a Member by the 
provisions of the agreements of the World Trad e Organization (WTO), including the Agreement on 
Implementation of Article VII of the General Agre ement on Tariffs and Trade 1994, and pursuant to 
Articles 64 to 78 of Mexico's Customs Law.  
2. Are estimated prices used only as a surety mechanism? 
The estimated price mechanism is used only as a surety mechanism. 
 
3. Does Mexico calculate estimated prices for all goods imported into Mexico?  If not, on 
what percentage of goods does Mexico use estimated prices? 
 No, Mexico does not calculate estimated prices for all goods that it imports.  The estimated 
price mechanism is currently applied to 318 tariff positions, which account for approximately 
2 per cent of the tariff positions covered by the General Import and Export Tax Law (import tariff). 
 
4. Do estimated prices apply only to certain goods? 
 The estimated price mechanism is used only for imported goods in respect of which 
underevaluation has been detected. 
 
5. In G/VAL/W/121 it is stated, "when a decision has been made to apply an estimated 
price for a specific product, it is published in the Official Journal of the Federation."  How many such decisions have been made?  How long do these decisions remain in 
effect? 
 From 1994, when the Ministry of Finance and Public Credit (SHCP) in troduced the estimated 
price mechanism, to the present day, there have been a number of publica tions amending the Annex 
of estimated prices, the last of which dates back  to 22 October 2003.  These publications incorporate G/VAL/W/132 
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 and/or remove tariff positions or modify the estimat ed prices of tariff positions already incorporated.  
Having no pre-determined period of validity, estim ated prices are evaluated on an ongoing basis so 
that they can be adapted to  any economic changes affecting the prices of imported goods. 
 
6. Does Mexico have a separate surety mechanism besides the use of estimated prices?  If 
so, when is that method employed? 
There is no surety mechanism other than estimated prices. 
 
7. If an estimated price is used for surety purposes, in what percentage of import 
transactions subject to estimated pricing does it become the final appraised value? 
In no instances does the estimated price beco me the final value of the imported goods. 
 
8. In cases where the final appraised value is less than the estimated price, is the importer 
refunded the difference?  When and how does this occur?  
 It depends on the system used by the importe r.  There will be no refund where the importer 
uses irrevocable contingent lines of credit, earma rked accounts, customs accounts, mortgages etc., 
because these options require no disbursement of cash.   Where importers opt to use cash to cover the duty differential, the difference will be refunded 
to them together with any interest that has accr ued as from the date on wh ich the deposit was made.  
The refund will be made within six months of the date as from which the importer is no longer 
required to maintain the deposit, unless the cu stoms authority has not completed its enquiry. 
 
9. What methods of valuation are used for fi nal appraisement when estimated prices are 
employed to arrive at an amount for surety?  For example, what percentage of imports use transaction value, transaction value of  identical or similar merchandise, etc? 
 The customs value is the value used in the estimated price mech anism;  in no instances is any 
other method of valuation employed.  According to Article 1 of the Agreement on Implementation of 
Article VII of the General Agreement on Tariffs a nd Trade 1994, and Article 64 of Mexico's Customs 
Law, the customs value of imported goods shall be the transaction value, i.e. the price actually paid or 
payable for the goods.  10. In G/VAL/W/121 Mexico states that "est imated prices are of a general, non-
discriminatory nature and only provide a poin t of reference for the initiation of an 
investigation by the tax authority with regar d to valuation, on account of the presumed 
undervaluation of the goods."  How does this measure comply with Mexico’s obligations under the WTO Agreement?  
 Mexico fulfils its obligations under the WTO Agreement on the basis of Article 13 of the 
Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994. 
 
11. Why does Mexico use a "margin of undervalua tion" to calculate estimated prices?   
 Mexico does not use a margin of undervaluatio n to calculate the estimated price.  The 
estimated price is calculated on the basis of interna tional references, free market conditions in respect 
of the goods under analysis and an average weighted import price obtained for the analysis. 
  G/VAL/W/132 
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 12. How long has Mexico been utilizing estimated prices in order to comply with Article 13 
of the Agreement? 
 Mexico has applied estimated prices since 28 February 1994.   
 Questions from the United States of America to  Mexico concerning post-importation verification 
practices  
 
13. What is the legal basis under the WTO Agreement on Customs Valuation for 
post-importation verifications of exporters?  What is the relevance of the information 
sought? 
 Article 17  of the Agreement on Implementation of Article VII of the General Agreement on 
Tariffs and Trade 1994 provides expressly that noth ing in the Agreement shall be construed as 
restricting or calling into question the rights of custom s administrations  to satisfy themselves as to the 
truth or accuracy of any statement, document or d eclaration presented for customs valuation purposes.  
Similarly, paragraph 6 of Annex III of the Agreement  states that Article 17 recognizes that in 
applying the Agreement, customs administrations may need to make enquiries concerning the truth or 
accuracy of any statement, document or declaration presented to them for customs valuation purposes, 
and that enquiries may accordingly be made which are, for example, aimed at verifying that the 
elements of value declared or presented to custom s in connection with a determination of customs 
value are complete and correct.  Members, subject to  their national laws and pr ocedures, thus have the 
right to expect the full cooperation of importers in these enquiries. 
 
 With regard to the relevance of the inform ation, as noted in the previous paragraph the 
information is obtained precisely in order to verify the truth or accuracy of any statement, document or declaration presented to customs administrations for customs valuation purposes, and to verify that 
the elements of value declared or presented to cu stoms in connection with a determination of customs 
value are complete and correct. 
 
14. Please provide the nature of the contract be tween the Government of Mexico and any 
post-importation verification provider.  How is it determined which exporter will 
undergo such a verification?  Does the operation  of this regime apply to the exporters of 
all Members, or only a limited number of Members? 
 The Government of Mexico, through informati on exchange agreements concluded with other 
national governments, seeks the cooperation of th e customs authorities of those governments in 
conducting enquiries concerning providers connected with  operations in respect of which it may have 
sound reasons to doubt the truth or accuracy of the st atement, document or declaration presented, or to 
doubt whether the elements of value declared or pr esented in connection with the determination of 
customs value are complete and correct. 
  The decision as to which exporter is to undergo verification is based on the inconsistencies or 
irregularities found in the accounting documents a nd records pertaining to the import operations 
provided by the domestic importer.  Neither the expo rters' nationality nor the number to be examined 
are determining criteria. 
 G/VAL/W/132 
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 15. What findings are expected from the post-i mportation verification provider to the 
Government of Mexico?  Will any legal recomm endations or determinations be included 
with any such findings?  On what legal basis will such determinations or recommendations be made? 
 To ascertain whether the commercial operation was actually carried out with that provider, on 
the date, and in accordance with the volumes and prices, given in the commercial document presented 
by the importer;  whether that document was actually  issued by the provider;  and whether that was 
the form in which the operation was documented.   No legal recommendations are made to the 
provider on the findings since the form in which operations are documented de pends on the legislation 
and usage and custom of the exporting country. 
 
16. What safeguards are provided with respect to confidentiality of information provided 
under the post-importation verifications of th e information that may be provided by an 
exporter? 
 Officials who intervene in the various form alities involved in applying tax provisions are 
required by Article 69 of the Federal Tax Code  to maintain total discretion regarding the 
declarations and other information submitted by tax payers or by third parties connected with them.  
Absolute confidentiality must thus be maintained concerning the information and the identity of its 
source.  The information may be disclosed only in co urt where some act by the authority is impugned.  
It should be noted that public officials found guilty of the offence of disclosure of a secret or a communication of which they are in possession by reason of their employment, post or position, are 
liable under Article 211 of the Federal Penal Code  to a prison term of from one to five years, a fine 
or suspension from office as appropriate.  
17. What is the legal basis and authority of th e post-importation verification provider in 
Mexico to operate in countries outside of Mexico?  Has Mexico obtained permission 
from other countries for such operations? 
 The legal basis is the international inform ation exchange agreements that Mexico has 
concluded with a number of countries.  Through th e formalities set out in these agreements, Mexico 
has obtained permission to verify the truth of any statement, document or declaration presented to it 
and to ascertain whether, in connection with dete rmining customs value, they are complete and 
correct. 
 
18. From whom will the post-importation veri fication provider obtain the necessary 
information for a post-importation audit?  If  from the exporter, what national law of 
Mexico and what laws of other countries give  the post-importation verification provider 
the authority to obtain the information and for exporters to provide the requested 
information? 
 In the domestic legislation, the last paragraph of Article 69 of the Federal Tax Code  
establishes that through an information exchange agreement signed by the Minister of Finance and 
Public Credit, the relevant information may be furn ished provided that it is used only for tax purposes, 
and will accordingly be subject to fiscal secrecy.  Article 54 of the same Code provides that in 
determining unpaid taxes, in the absence of proof to  the contrary the Ministry of Finance and Public 
Credit will treat facts or omissions known by foreig n fiscal authorities as true.  Thus, where such an 
agreement is applied it confers authority to obtain information through the mechanisms and 
authorities specified in the agreement.   G/VAL/W/132 
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 19. What information will an importer/exporter be asked to provide to the post-importation 
verification provider?  Are there penalti es which result when the exporter or importer 
does not provide the requested information?  Please confirm that there will be no other 
consequences related to importations based  on an exporter not responding to such a 
request.  If there will be consequences, please  describe them, along with the legal basis 
under the WTO Agreement on Customs Valuation. 
 Only information related to commercial operati ons and their documentation.  Where a foreign 
exporter fails to provide information, recourse li es to the bodies established for the purpose in the 
information exchange agreements, through the authoriti es of the country in question.  In the case of a 
domestic importer, pursuant to the power conferre d on the authority by tax law and the obligation 
under Articles 30 and 67 of the Federal Tax Code  to keep accounting receipts and records of 
operations for up to five years, failure to provide  the documentation required by the authority is an 
infringement under Article 81(1)  punishable by a fine under Article 82(1)  of the Federal Tax Code.  
Only where there are additional factors related to the introduction or removal of goods from the national territory will there be contraband  or tax fraud , which are offences punishable by 
imprisonment  as prescribed under the Federal Tax Code.  In the absence of any of the acts so 
defined, the penalty applied will be the fine for infringement.  
20. Will the post-importation verification provider contact other parties that may be 
relevant to an importation transaction as well as, for example, the manufacturer, selling 
agent, seller, etc.?  If so, are these parties obligated to provide the post-importation 
verification provider with the requested info rmation?  What are the consequences for 
not providing the requested information? 
 If the third parties are domiciled abroad, the arrangements described above in connection with 
the information exchange agreements apply.  If they are nationals, as already stated they are subject to 
the provisions of Article 69 of the Federal Tax Code cited above.  In any event, the third parties will 
be related to the operations under investigation, wh ich means that they are obligated to provide the 
documentary information requested by the authorities for the purpose of verifying the truth and accuracy of the customs declarations.  The authorit y being bound to strict confidentiality regarding the 
information and its source, as already stated, tax payers are under obligation to comply with the 
authority's requirements and refusal to do so amounts to the infringement defined in Article 81(1) of 
the Federal Tax Code  punishable by fine under Article 82(1) of the same Code .  It should be noted 
that the instance is one of refusal to provide in formation not of denial of connection with the 
operations under investigation, confirmed by the authority itself.  
21. Is the importer notified by the Governme nt of Mexico of a post-importation 
verification? 
 Yes, as it is deemed an act of molestation under Article 16 of the Political Constitution of 
the United States of Mexico,  under which an authority is require d to give persons written notice in 
advance of any act which may molest them, stating th e legal basis and reasons therefore;  this includes 
specifying the purpose and scope of the verification.  
22. Is the importer notified by the Government  of Mexico on the post-importation 
verification findings including the in formation provided by the exporter? 
 Yes, through the procedures established in the tax and customs legislation by virtue of the 
confidentiality by which the authority is bound.  It is important to note that information provided by 
third parties, whether or not they are connected  with the import operations, constitutes a means of 
verifying the accuracy and truth of the elements  presented by the importer to substantiate the 
determination of customs value. G/VAL/W/132 
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23. How does an importer appeal a decision ma de by the post-importation verification 
provider?  How does an exporter appeal a decision made by the post-importation 
verification provider? 
 Pursuant to the last paragraph of Article 78-C of the Customs Law , domestic importers may 
appoint legal representatives to address the sources of information of third parties.  Domestic 
importers are also able to challenge a decision thr ough one of two available ch annels:  they may apply 
either to the authority that issued it to rescind th e decision, or to the Federal Tax and Administrative 
Court to quash the decision.  The same two bodies are available to domestic exporters.  Foreign 
importers or exporters whose rights or interest s are affected by a decision deriving from a post-
importation verification may appeal the decision in the same manner as any national. 
 
24. What information will be kept confidential by the post-importation verification 
provider?  Please provide the specific nature of any or all restrictions mandated by the 
Government of Mexico for treatment of su ch information by the post-importation 
verification provider.  If there are none rel ated to the contractual relationship between 
Mexico and the post-importation verification provider, please explain why.  If there are 
such restrictions please describe the proce ss by which the Government of Mexico will 
ensure that such a mandate is being followed. 
 Any information provided by related third pa rties or independent persons must be kept 
confidential in accordance, as stated above, with:  Article 69 of the Federal Tax Code .   
Furthermore, as already noted such information ma y be disclosed only in court, since it constitutes 
"fiscal secret" and any official who discloses it without legal grounds is accordingly guilty of disclosure of secret or communication under Article 211 of the Federal Tax Code,  punishable under 
the same article by imprisonment of from one to five years, a fine, or suspension from office as appropriate. 
 
25. What is the legal remedy provided by the G overnment of Mexico to an exporter for a 
breach of confidentiality or misuse of in formation obtained by the post-importation 
verification provider?  What consultative process is provided by the Government of 
Mexico for Members whose exporters may be affected by a breach of confidentiality? 
 The first part of the question has been answer ed in the replies above.  The Government of 
Mexico has established no consultative process for Members whose exporters may be affected by 
disclosure of confidential information, since the so le aim is to verify the truth and accuracy of 
information supplied by domestic importers and it has no direct responsibility for enforcement of the 
legal provisions that apply to foreign exporters.  
 
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