JD Group

The Ideal Logistics Company for the Maquiladora Industry

JD Group — Thu, 22 Feb 2024 18:06:47 +0000

The maquiladora industry in Mexico has experienced significant growth in the last two decades. With its strategic location, skilled labor force, and competitive costs, it has become an attractive destination for manufacturing companies worldwide looking to increase their profitability and proximity to the U.S. market.

However, for the maquiladora industry to function optimally, it is crucial to have a logistics company that can meet the unique needs of this sector. This article will explore the characteristics and advantages of an ideal logistics company for the maquiladora industry and how it can be a great differentiator in the supply chain.

The Importance of a Logistics Company for the Maquiladora Industry

The Maquiladora industry is characterized by manufacturing finished products or components for export, which involves planning and coordinating correctly, from purchasing raw materials to delivering finished products to customers. To simplify and optimize processes, the ideal logistics company should provide as many integrated services as possible, such as transportation, cross-dock, customs clearance, warehousing, and distribution. Below, we will explore the key characteristics that make a logistics company your strategic ally.

1. Experience in the Maquiladora Industry

It is critical that your supplier specializes in the industry and understands the needs and challenges to provide effective solutions. It starts with legal compliance in customs clearance, adding the quality and safety standards dictated by best practices in ISO-9000, C-TPAT, and AEO certifications.

2. Multimodal Management Capacity

The maquiladora industry involves a complex supply chain that can include multiple modes of transportation, such as road, rail, sea, and air. An ideal logistics company for the maquiladora industry must have the ability to manage these different modes of transportation efficiently and coordinate them effectively. These requirements include route optimization, selecting reliable suppliers, and managing customs procedures to ensure timely and smooth delivery.

3. State-of-the-art Technology and Real-Time Visibility

In the maquiladora industry, visibility and transparency in the supply chain are crucial elements. A logistics company must have the technology platforms and tools that allow real-time monitoring and tracking of shipments to achieve operational efficiencies and make quick and accurate decisions.

4. Warehouse Capacity and Inventory Management

The maquiladora industry often faces variations in peak season, and your strategic partner must have the proper facilities to support you without creating long-term commitments.

One of the critical characteristics of an ideal logistics company is to guarantee 100% inventory accuracy so that products are available when needed, avoiding unnecessary delays and costs.

5. Customer Service and Personalized Support

An ideal logistics company should offer exceptional customer service and be committed to continuous improvement and customer satisfaction.

In short, an ideal logistics company for the maquiladora industry should have sector-specific expertise, the ability to integrate different transportation methods, advanced technology for real-time visibility of your operation, elasticity in warehousing capacity, and a centralized focus on customer service.

By choosing the right logistics company, companies in the maquiladora industry can optimize their supply chain, reduce costs, and improve their competitiveness in the global marketplace.

Is your supplier the right logistics company?

Mexico’s Data Center Boom Amid Nearshoring Surge

JD Group — Thu, 22 Feb 2024 18:06:47 +0000

Mexico is becoming a data center nexus, driven by nearshoring. The global data center market is projected to hit $116.43 billion by 2027, growing at a 14.6% annual rate. Mexico’s data center investments are expected to exceed $1 billion by 2028, fueled by digital service demand, cloud computing, and the digital transformation of businesses.

The Key Factors for Mexico’s Data Center Appeal are:

Geographic Advantage: Mexico’s proximity to the U.S. offers logistical benefits. Regions like Querétaro, with lower environmental risks and seismic activity, are prime locations.
Real Estate Availability: The Bajío region provides ample land and competitive prices for data center development. Querétaro, with 486,000 square meters of industrial space under construction, leads in data center infrastructure.
Talented Workforce: Jalisco, Guanajuato, and Querétaro boast a skilled labor pool, with high manufacturing employment and a significant percentage of the workforce involved in IMMEX-export activities. Bilingual proficiency is notably high in Querétaro.
Economic Impact: The data center sector offers higher salaries compared to traditional manufacturing or distribution roles. Technical positions command salaries ranging from $20,000 to $100,000 MXN, depending on the role and English proficiency.
Security: Querétaro emerges as a secure location for data centers, outperforming other cities in safety assessments.

Mexico’s electrical infrastructure capacity is crucial for sustaining data center growth. Major players like Amazon Web Services, Oracle, Microsoft, and potentially Google, are contributing to Mexico’s technological and economic advancement, positioning the country as a key player in the global digital economy and nearshoring industry.

Progress of the SAT on the entry into force of the CFDI CCP (Carta Porte).

JD Group — Thu, 22 Feb 2024 18:06:46 +0000

Criteria Highlights

Inland transportation in Sea or Air customs.

The SAT confirms that land transportation that enters a maritime or air customs office to present the goods before the MSA, is NOT considered an international transportation, therefore, the CFDI CCP that is issued must not declare the customs declaration number or the tariff fractions. Likewise, it clarified that the fiscal folio of this CFDI CCP is the one that must be declared when generating the DODA or PITA.

Domestic transportation

For domestic transportation of goods of foreign origin, it is not mandatory to declare the customs declaration number or the tariff items in the CCP of the CFDI.

Maritime-Rail Transportation

In this type of transportation, the SAT will review the cases where the Customs Broker will be exempted from declaring the fiscal folio of the CFDI CCP in the DODA.

Validation of CFDI CCP

The SAT informed that it is developing a validation in the system, in order to verify that the fiscal folio of the CFDI CCP that is declared in the DODA, is in force and that the CCP has been added.

IMMEX Operations

The declaration of the IMMEX program number *(as part of the description of the goods in the CCP),* must only be registered in the CFDI CCP when it is an international transport. In the case of domestic shipments by IMMEX companies, there is no obligation to declare the program number as part of the description of the goods in the CCP.

Issuer of the CFDI CCP

A FAQ will clarify that the person who issues the CFDI with CCP and/or whoever contracts the transportation service is obliged to provide the fiscal folio of this document to the Customs Broker, in order for it to be declared in the DODA or PITA.

Closing of consolidated customs declaration

In these operations, it will not be necessary to declare the fiscal folios of the CFDI CCP used in the transfer of goods of each consignment* (The second paragraph of the current “Frequently Asked Question” number 45 will be eliminated)

Presentation of goods before the MSA

The SAT clarified that the exceptions *(Local transfer or Federal jurisdiction sections for the transfer of goods and/or merchandise),* to issue the CFDI without the CCP; do not apply to the transportation that presents the merchandise before the MSA. He also informed that a modification to the RMF is planned to clarify this situation, as well as a frequently asked question.

Printed representation CFDI CCP

The SAT indicated that the carrier may carry a physical or digital printout of the CFDI CCP, and it is not mandatory to present it only in printed form.

IDCCP

The creation of the IDCCP *(folio of the CCP version 3.0), *is with the purpose that this data is declared in the future when generating the DODA, reason why the SAT is working in the corresponding development.

Version 3.1. CCP

The SAT is working on version 3.1 of the CCP *(publication in March-April 2024),* the objective of which is to address several areas of opportunity *(declare several customs regimes, consolidated cargo transportation, among others)

Departure Date/ Arrival Time

Regarding this attribute, the authority will review what should be understood by “estimated” date and time of departure or arrival of goods and/or merchandise from origin or destination.

Questions

In the case of foreign carriers that are not required to issue the CFDI CCP, what information will be declared in the DODA/PITA?

The field related to the fiscal folio of the CFDI will be left empty.

In maritime export operations, when the customs declaration is presented to the MSA and neither the merchandise nor the transportation is presented, is it mandatory to have a CFDI CCP?

No. For these operations a CFDI CCP is not required, since a vehicle with the merchandise is not presented to the MSA.

what legal weight do the frequently asked questions have, before any act of authority?

Frequently Asked Questions cannot be considered as a legal basis, notwithstanding the above, the customs authority discloses them as guidance criteria.

If we have a DODA made with a fiscal folio of the CFDI CCP, and the latter is cancelled after having generated the DODA, should the DODA be cancelled and a new one generated?

It was commented that in case the DODA has not been modulated, the DODA and the CFDI-CCP must be corrected, in order to have the correct information, however, if it is after the modulation, since the DODA has already been modulated, only the CFDI-CCP can be corrected.

what is the UUID?

It is the fiscal folio of a CFDI

In the case of logistics companies that subcontract transportation, what is the fiscal folio of the CFDI CCP that must be provided to generate the DODA / PITA?

The fiscal folio of the CFDI CCP that must be declared when generating the DODA or PITA, will be the one issued by the transportation company that provided the goods transportation service.

There are carriers that have national and foreign plates, the service is provided by a Mexican company and the payment is received abroad, in this case, what should I do?

Considering that the Mexican company provides the freight transportation service, it has the obligation to issue a CFDI CCP (regardless of the fact that the payment for the services is made abroad).

Mexico’s Big Opportunity in Semiconductor Manufacturing

JD Group — Thu, 15 Feb 2024 09:21:32 +0000

The relentless global demand for semiconductor chips, projected to exceed $1.2 trillion annually by 2032, underscores the critical role these components play across industries, from consumer electronics to advanced artificial intelligence systems. Amidst this burgeoning demand, geopolitical and military concerns in Taiwan, which commands a significant 60% of the global semiconductor market and 90% in specialized chips, have prompted a strategic pivot towards North America, particularly Mexico, for future chip manufacturing endeavors.

Mexico emerges as a compelling choice for semiconductor manufacturing, not for the complete fabrication process, which remains a complex and capital-intensive endeavor, but as a valuable collaborator in testing, packaging, and producing simpler chips. This pivot is buoyed by the United States’ legislative push through the CHIPS Act and the Inflation Reduction Act, aiming to revitalize North American semiconductor production. States like Arizona and Texas are at the forefront, with Mexico poised to provide essential support services, enhancing the regional semiconductor manufacturing ecosystem.

The strategic importance of localizing chip production is further highlighted by Tesla’s initiative to establish a gigafactory in Monterrey, Mexico. This move reflects a broader industry recognition of the advantages of proximity to semiconductor manufacturing facilities, especially as automobiles and other products increasingly integrate sophisticated chip technology.

Mexico’s evolving role in semiconductor manufacturing transcends geographical convenience. The country’s technological landscape has undergone significant transformation, propelled by the presence of major automotive and aerospace players. This shift has not only diversified Mexico’s manufacturing capabilities but also cultivated a workforce skilled in advanced manufacturing techniques. As North America seeks to expand its semiconductor industry, Mexico’s growing technological proficiency and skilled labor force present a compelling case for its inclusion as a key player in the sector.

However, the path to establishing North America, with Mexico as a pivotal partner, as a semiconductor powerhouse is fraught with challenges. The industry’s complexity and the substantial investment required underscore the need for strategic planning and long-term commitment. Strategies such as diversifying supply chains, forging strong supplier relationships, and optimizing inventory management are crucial for mitigating risks and ensuring a steady chip supply.

In conclusion, the semiconductor industry stands at a critical juncture, with Mexico positioned as a strategic ally in North America’s quest to secure and expand its semiconductor manufacturing capabilities. While the full-scale production of advanced chips in Mexico may not be immediate, the country’s strategic location, technological advancements, and skilled workforce make it an attractive partner in addressing the global demand for semiconductors. As the industry navigates this transformative era, Mexico’s role as a significant contributor to the semiconductor landscape is increasingly apparent, heralding a new chapter in global semiconductor manufacturing dynamics.

Reduce Costs and Save Money with NAFTA

JD Group — Fri, 02 Feb 2024 11:37:31 +0000

Passing a U.S. Customs NAFTA Verification

The U.S. Customs NAFTA Verification process begins when your company receives a CBP 28 “Request for Information”. This request will cover a specific U.S import entry and one or more part numbers. The request is often sent to both the U.S. Importer and the Mexican Maquila. Each request has a 30-day response deadline from the date of issuance. This is serious, since a failed verification can result in owing additional duties and penalties as far back as five years.

U.S. Importer Responsibilities

This information can vary, depending on the U.S. Customs Request. The following are examples of items that Customs may request:

• NAFTA Certificate of Origin for the finished good (be sure to include an e-mail contact in the “Producer” box)
• Bill of Materials (BOM), with origin, HTS classification and value for each component
• Product-specific information, including features and functions • Critical component NAFTA certificates of origin
• Detailed Production Process

We recommend that you assemble, review and validate all requested information. Even if U.S. Customs does not request all of the above information, this is an excellent opportunity to review and validate your NAFTA claims on those items that are under review. We further recommend that you present all information to U.S. Customs in a clean and well organized format.

Mexico Maquila Responsibilities

A NAFTA verification will often include a “NAFTA Verification of Origin Questionnaire”. This may be sent on the initial CBP 28 Request or on a second follow-up request. The information required in the NAFTA questionnaire covers how the product is made in Mexico for example:

Section 1 – Production Process – this covers how the product is made in Mexico, this information should be a step by step manufacturing process description. Diagrams or drawings are very helpful.

Section 2 – Non-Originating Materials or Components – this covers all components and parts used in the manufacturing process that are not NAFTA qualifying or are NAFTA qualifying with no NAFTA certificate of origin on file.

Section 3 – Originating Materials and Components – this covers all components and parts used in the manufacturing process that are NAFTA qualifying and include a valid NAFTA certificate of origin on file. NAFTA qualifying parts must be made in the USA, Canada or Mexico.

Section 4 – Additional Questions – This section requires detailed knowledge of the applicable NAFTA rule of origin. If unsure please call our office so that one of our NAFTA compliance experts can help explain.

Section 5 – Certification – This section must be signed and certified by a knowledgeable and experienced individual at your company, including signature, date, title and name of the company.

The NAFTA Questionnaire is a complex document that can sometimes be difficult to understand. Incomplete or wrong answers can seriously impact your NAFTA eligibility and generate a negative outcome. For any question please call us.

Additional Tips and Recommendations

– Respond on time! Customs grants 30 days to return the requested information. To avoid a delayed response, we recommend that you respond within 14 to 21 days. The earlier the better. If you absolutely need additional time, you can request an extension if time. A late response can result in a rejected NAFTA claim, additional duties and possible penalties.

– Provide complete responses to all requests and questions. Information should be in English, clear, easy to read and easy to understand.

• Highlighting part numbers and other relevant information on all documents.
• Checking and re-checking that all information supports and matches the NAFTA claim
• Using a 3-ring binder to organize the information within individual tabs

Consider a thorough review by an independent third party to validate and confirm your information. The goal is the pass the verification on the first presentation with no additional questions or challenges. The quicker U.S. Customs can approve your NAFTA claim the better for everyone.

– Deliver a hard-copy to U.S. Customs and maintain a complete copy for your own internal files

Work with us! As your U.S. Customs Broker we are here to help. We have the experience with the NAFTA Verification Process and no question is too big or too small.

® Copyright JD Group Integrated Logistics Services, 2015

Are you certain your valuation is correct? We can help with your Trade Compliance

JD Group — Fri, 02 Feb 2024 11:37:30 +0000

Trade Compliance is complicated and JD Group is here to help. Welcome to our series of trade compliance support articles specially designed to help you in managing trade compliance, avoiding surprises, reducing costs and achieving the best possible outcomes. We look forward to your questions and comments.

Valuation – Maquila / IMMEX Operations

When goods are imported into United States they are subject to certain requirements involving U.S. Customs. As part of the import entry process, all goods require correct and accurate valuation. It is the responsibility of the importer of record to use “reasonable care” to “enter,” “classify,” and “value” the merchandise and provide any other information necessary to enable US Customs to properly assess duties, collect accurate statistics, and determine whether all other applicable legal requirements are met.

What should the Invoice include: For US Customs purposes the commercial invoice from the IMMEX Operation in Mexico must include all elements of value:

• Material cost
• Labor / Overhead Costs
• Assists

For “Material” cost US Customs is looking for the actual cost for all materials used in the manufacturing / assembly / packaging / repair, etc. process of the imported merchandise. For most IMMEX operations the materials are consigned by the US parent company and are captured in the IMMEX inventory control systems that generate the commercial invoice for US Customs purposes. Most material costs are captured at standard cost.

For “Labor and Overhead” cost U.S. Customs is looking for all costs and expenses generated in Mexico that are related to the production of the imported merchandise. These costs must include all expenses reported in the IMMEX Financial Reporting system and are generally allocated on a per unit basis by labor minutes or hours. The following costs and expenses are generally excluded:

• Extraordinary and one-time Expenses
• Sales / Marketing Expenses

Some examples of the above include expenses related to a fire that occurred at the facility, damages to the structure per the result of natural disaster e.g. earthquake, severe storm, etc. or expenses related to sales or marketing activities undertaken in Mexico.

For “Assists” U.S. Customs is looking for all costs and expenses associated with any molds, tools, dies, machinery and equipment, reported on the financial records of the U.S. parent company and used for production purposes in Mexico. Most assist costs are captured on a scheduled basis of deprecation and allocated equally among all production activities.

Cost Update, Changes and Modifications

U.S. Customs recognizes that costs may change and that actual costs are not often available at the time of entry. We strongly recommend that all importers regularly review and update their costs. At the very least all costs must be updated on an annual basis. However, for some IMMEX operations with highly volatile commodities, such as metals, textiles or petroleum based products, quarterly updates may be a more effective option. Moreover, the addition or reduction of production lines may also require more frequent cost updates.

Final Tips and Recommendations

Establish a sound process to capture all relevant costs that make up the customs value, including accurate reporting of material, labor, overhead and assist costs on the commercial invoice
Establish a sound process with the US parent company to:
- A. Periodically review and update current costs
- B. Ensure that cost updates are properly reflected in the IMMEX system
Participate in the U.S. Customs Reconciliation Program. In our next Trade Compliance Support Article we will talk more about Reconciliation and how IMMEX companies can legally update and reconcile their reported values to actual cost.
Consider a thorough review by an independent third party to validate and confirm your valuation methodology and accurate reporting of all required values.
Finally, work with us! As your U.S. Customs Broker we are here to help. We have the experience and can provide the necessary guidance so that you accurately value your merchandise while complying with U.S. Customs rules and regulations, no question is too big or too small.

® Copyright JD Group Integrated Logistics Services, 2015

Trade Compliance is complicated and JD Group is here to help.

JD Group — Fri, 02 Feb 2024 11:37:29 +0000

Welcome to our series of trade compliance support articles specially designed to help you in managing trade compliance, avoiding surprises, reducing costs and achieving the best possible outcomes. We look forward to your questions and comments.

This is the Year for ACE… A brand new import platform from U.S. Customs and Border Protection.

The Automated Commercial Environment (ACE) system was designed and developed by US Customs and Border Protection with the sole purpose of having a single window to process importations into the United States. Although ACE has been under development for many years, it has now come to a point where 2015 is the year where ACE will become mandatory for all cargo release and entry summary processing.

From any internet accessible computer any importer with an ACE account can view all their Import Trade Data in real time.

As an ACE user, you have access to Import Entry Reports, US Customs Notices, Ports of Entry, Customs Brokers, etc. among many other data elements. ACE allows users to easily generate reports and export them to EXCEL or PDF for your convenience. Remember, as an Importer you are only able to view the information and not modify or transmit any data to US Customs. Only your designated U.S. Customs Brokers and Importer Self Filers may do so.

Mandatory Dates

May 1st 2015: As of this date, it is mandatory to use ACE for all electronic import and export manifest filings for all transportation modes.

February 28 2016: As of this date, it is mandatory to use ACE for all electronic cargo release and related entry summary filings.

October 1st 2016: As of this date, it is mandatory to use ACE for all remaining electronic portions of the CBP cargo process.

It is important that you communicate with all your U.S. Customs Brokers to make sure they are ACE ready. Here at JD Group we are already using ACE to transmit our cargo releases and entry summaries. Our internal systems are fully prepared and operational to meet all ACE requirements.

How to get ACE ready

A great thing about ACE for importers is that it’s Free and User Friendly; all you have to do is register your company information. We strongly recommend that all importers setup and maintain their own ACE portal account. Here are 3 easy steps to get ACE Ready:

Visit: www.cbp/gov/trade/automated
- a.) Click Apply for an Account
Fill out the ACE application
- a.) Complete your Company Importer Information
- b.) Provide a Company Officer Information
- c.) Provide a Point of Contact Information Available (ACE user)
- d.) Sign and Submit (via email)
Once the application is submitted you will receive a notification from US Customs with instructions to access your secure ACE portal account. U.S. Customs will automatically upload your import trade data for up to five years.

If you have trouble setting up your ACE account, don’t hesitate to contact us at JD Group, we are more than happy to help you through the entire process.

® Copyright JD Group Integrated Logistics Services, 2015

ACE Update February 2016 Trade Compliance is complicated and JD Group is here to help.

JD Group — Fri, 02 Feb 2024 11:37:28 +0000

This is the Year for ACE…A brand new import platform from U.S. Customs and Border Protection

The Automated Commercial Environment (ACE) system was designed and developed by US Customs and Border Protection with the sole purpose of having a single window to process importations into the United States. Although ACE has been under development for many years, it has now come to a point where 2016 is the year where ACE will become mandatory for all cargo release and entry summary processing.

ACE is not only for U.S. Customs Brokers, U.S. Customs and Border Protection and other U.S. government agencies (FDA, USDA, FCC, etc.); it is also available to US Importers to gain real-time visibility on all import activity into the United States. From any internet accessible computer any importer with an ACE account can view all their Import Trade Data in real time. As an ACE user, you have access to Import Entry Reports, US Customs Notices, Ports of Entry, Customs Brokers, etc. among many other data elements. ACE allows users to easily generate reports and export them to EXCEL or PDF for your convenience. Remember, as an Importer you are only able to view the information and not modify or transmit any data to US Customs. Only your designated U.S. Customs Brokers and Importer Self Filers may do so.

Mandatory Dates

US Customs and Border Protection is actively preparing the Trade Community (i.e. Customs Brokers, Importers, Freight Forwarders, OGA’s etc.) for the Mandatory Transition Dates during 2016.
CBP is working to complete and deploy core trade processing capabilities in ACE by December 2016, a timeline supported by the White House Executive Order issued on February 19, 2014. As part of this transition, several mandatory dates have been established requiring trade users to file electronic data to ACE in lieu of legacy systems.

The mandatory dates are aligned to different filing functions for CBP’s trade partners. They can be categorized by manifest filings, entry filings, entry summary filings, Partner Government Agency (PGA) filings, and remaining electronic portions of the CBP cargo process. Below, we have outlined which mandatory dates have criteria that will impact trade parties within cargo processing categories. By selecting a date, you will be taken to more details about the capabilities and filing requirements on that date.

With these dates approaching quickly, it is critical for members throughout the trade community to understand how they will be impacted and to prepare accordingly. CBP is encouraging everyone affected to complete transitioning as soon as possible to ensure readiness well in advance of the updated mandatory dates. To determine any impacts to your business, please review the information below to understand upcoming changes and how to prepare.

Entry Filings (Cargo Release) * March 31, 2016 / May 28, 2016 / Summer 2016***

Entry Summary Filings (CF 7501)** March 31, 2016 / May 28, 2016 / Summer 2016***

Remaining Portions of CBP Cargo Process / October 2016

PGA Filings March 31, 2016 / May 28, 2016 / Summer 2016***

* JD Group is filing 100% of Entry’s (excluding some PGAs that are not functional yet)

** JD Group is filing 100% of Entry Summary’s (including 100% of PGAs)

***Food and Drug Administration (FDA) filings will continue to be allowed in ACS to provide more time for industry to transition to ACE. Further information will be provided on the mandatory filing in ACE for FDA data.

For more information visit

http://www.cbp.gov/trade/automated/ace-mandatory-use-dates

How to get ACE ready

1.Visit: www.cbp/gov/trade/automated

a.Click Apply for an Account

2.Fill out the ACE application

a.Complete your Company Importer Information
b.Provide a Company Officer Information
c.Provide a Point of Contact Information Available (ACE user)
d.Sign and Submit (via email)

3.Once the application is submitted you will receive a notification from US Customs with instructions to access your secure ACE portal account. U.S. Customs will automatically upload your import trade data for up to five years. If you have trouble setting up your ACE account, don’t hesitate to contact us at JD Group, we are more than happy to help you through the entire process.

Save Money and Reduce Costs with the Chapter 98

JD Group — Fri, 02 Feb 2024 11:34:20 +0000

Save Money and Reduce Costs with the Chapter 98 Programs

There are a number of special programs available to importers to significantly reduce costs and save money. Duty-free or reduced duty treatment is available through programs such as the North American Free Trade Agreement (NAFTA) and use of so-called Chapter 98 Programs. There are several Chapter 98 options that an importer can use; this article will cover a brief description of the 5 most popular programs.

9801.00.1010 U.S. Packaging Material

Subheading 9801.00.1010, HTSUS covers the return of U.S. Packaging Material. On the southern border 9801 is commonly used for declaring the value of U.S. origin packaging materials that are exported to Mexico and used to package a finished product (the exported good).

Requirements

Imported Item has to be of U.S. Origin
Imported Item cannot be advanced in value or improved in condition while abroad

Supporting Documents

Manufacturer’s Affidavit
NAFTA Certificate of Origin
U.S. Importer Declaration (19 CFR10.103)

Duty Treatment

Duty Free
MPF Free

9801.00.10XX U.S. Goods Returned

Subheading 9801.00.10XX, HTSUS covers items of U.S. origin returned to the United States without any improvement in value or condition. On the southern border 9801 is commonly used to cover those U.S. origin parts, components and machinery, which are no longer needed in Mexico and are returned. Please remember to use the correct statistical classification (last 2 digits) which is based on the underlying HTS classification of the returned item.

Requirements

Imported Item has to be of U.S. Origin
Imported Item cannot be advanced in value or improved in condition while abroad

Supporting Documents

Manufacturer’s Affidavit
NAFTA Certificate of Origin
U.S. Importer Declaration (19 CFR10.103)

Duty Treatment

Duty Free
MPF Free

9801.00.2000 U.S. and Foreign Items Returned to the U.S.

Subheading 9801.00.2000, HTSUS covers articles of any origin, previously imported to the U.S., exported from the U.S. and returned back to the U.S. without having been advanced in value or improved in condition. Because this program also requires that the item be under a lease arrangement, it is widely used on returns from Maquilas/IMMEX companies which automatically qualify for the lease status.

Requirements

Previously imported into the US and duty paid
Imported Item cannot be advanced in value or improved in condition while abroad
Original Importer, original exporter and present importer must be the same party

Supporting Documents

CBP 7501 Entry Package
U.S. Importer Declaration (19 CFR10.103)
Electronic Export Information
CBP 7501 Entry Package

Duty Treatment

Duty Free
MPF Free

9802.00.5060 Repairs and Alterations

Subheading 9802.00.5060, HTSUS covers articles returned to the United States after having been exported for qualifying repairs or alterations. This program is commonly used on the southern border in support of repair, refurbishing, upgrading or other qualifying operations.

Requirements

Exported from the U.S.
Qualifying Repair or Alteration

Supporting Documents

Electronic Export Information (EEI)
Importer and Exporter Declarations (19 CFR 10.24)

Duty Treatment

Duty Free
MPF Free

Country

Mexico & Canada

9802.00.8068 U.S. Goods Assembled Abroad

Subheading 9802.00.8068 HTSUS covers article assembled abroad with U.S. origin parts or components. On the southern border this options is commonly used by Maquilas/IMMEX companies on those items that do not otherwise qualify for NAFTA. The value of all U.S. origin parts/components (ready for assembly) are eligible for zero duty.

Requirements

U.S. Origin parts and components
Condition Ready for Assembly
Components Assembled

Supporting Documents

Manufacturer’s Affidavit
NAFTA Certificate of Origin
Physical appearance, (photos, drawings, sketches)
Commercial Invoice
Importer and Exporter Declarations (19 CFR 10.24)

Duty Treatment

Duty Free
- General Duty Rate
MPF Free
- .34%

Country

All countries: Value of exported goods
All countries: Value of Assembly plus Non-U.S. materials and U.S. materials not in a condition ready for assembly

The information in this article is general in nature and is not intended to constitute a legal or binding recommendation. Before engaging in any special program we strongly recommend that you consult with JD Group or another trade professional.

Trade Compliance Support May 2016

JD Group — Fri, 02 Feb 2024 11:34:19 +0000

Trade Compliance is complicated and JD Group is here to help. Welcome to our series of trade compliance support articles specially designed to help you in managing trade compliance, avoiding surprises, reducing costs and achieving the best possible outcomes. We look forward to your questions and comments.

Biggest Change ever for the U.S. 9801.00.10XX Program

As of April 25, 2016 the rules and requirements for what is eligible under Subheding 9801.00.10XX, HTSUS will dramatically change. The new law expands the universe of articles that may be potentially imported duty-free by amending subheading 9801.00.10, previously for American goods returned, to allow the duty-free entry of any article, regardless of origin, that is exported and returned within three years of exportation, provided it is not advanced in value or improved in condition while abroad.

Old 9801.00.10XX

Requirements

• Product must be of U.S. Origin
• Cannot be advanced in value or improved in condition

Supporting Documents

• Manufacturer’s Affidavit or NAFTA certificate of origin
• Foreign Shipper / Importer’s Declarations

Commonly used in the following situations

Returns of U.S. Origin Raw Materials
Returns of U.S. Origin Machinery / Equipment
Packaging Operations of U.S. Origin Goods
Segregating returned U.S. Origin Packaging

New 9801.00.10XX

Requirements

• Item was exported within the last 3 years
• Cannot be advanced in value or improved in condition

Supporting Documents

• Export Documentation e.g. AES Record, Import Pedimento, Bill of Lading
• Foreign Shipper / Importer’s Declarations

Commonly used in the following situations

Returns of Raw Materials (Any Origin)
Returns of Machinery / Equipment (Any Origin)
Packaging Operations of returned goods (Any Origin)
Segregating returned Packaging (Any Origin)

Impact on Existing 9801 Programs

With the new law the following 9801 program will become obsolete for items that are being returned within 3 years from the date of export. As of April 25, all items currently being imported under the following 9801 programs can now be imported under the 9801.00.10XX program provided the items are within 3 years from the date of export and have not been advanced in value or improved in condition while abroad.

9801.00.2000

9801.00.2500

The Big Benefits for all Maquila/IMMEX Operations

• In our opinion Manufacturer’s Affidavits or NAFTA Certificates of Origin are no longer required when goods of any origin are returned within 3 years.
• Non-US Origin goods that are returned in their exact same condition can now be entered under the 9801 program
• If you perform any “kitting” or “packaging” operations in Mexico you may be able to significantly reduce your import duties by foregoing your current U.S. “inbond”operations.