Learn what you need before sending cargo to Mexico, and learn how to plan and control the risks of cross border business.
Are you new to international trade and want to start expanding into new markets?, don’t look any further, you should consider Mexico as your first destination. This can give you access to a market of nearly 128 million consumers.
We have seen many small-medium size businesses that make great quality and innovative products, with huge growth potential on markets to the south but don’t move forward either because the sellers do not want to take the risk of doing the export or the buyer does not have a clue on how to import the products, and good business is left on the table.
It’s important to understand that even thought there is a close business relationship between Mexico and the US, and the new USMCA trade agreement is just around the corner, there are some things that need to be taken in account before shipping: packaging, documents, and customs requirements can cause problems and delays ranging from a couple of days to several weeks.
But don’t worry, we are here to help and to show you the best practices to ship into Mexico without any hassle, so you can take advantage of a growing middle class and young market.
The first step in the export compliance process to determine who has jurisdiction over your exports. A misstep here could very well lead to fines, loss of export privileges, and even land legal problems. The first step is to know which set of regulations you need to be concerned about and which agency’s guidelines you must follow.
Product classification codes, which are used by the Census Bureau through the Automated Export System (AES) for trade statistic purposes and are also used at the country of import for assessing duties and taxes, also allows the importer to understand what labels, permits, and certifications will be needed to get the cargo into Mexico.
Before shipping off your cargo, be sure to have all export documents in order which include: letter of instructions, bill of lading (BOL), commercial invoice, certificate of origin, and packing list. Our customs team helps you double-checking the information to avoid unnecessary delays on documents re-work.
To avoid any delays and additional costs in warehouse inspections, re-packaging, and re-labeling at the border, is important to understand what are the necessary packaging and labeling requirements to comply with Mexican customs authorities. Working with Compass allows you to be prepared for this process.
The exported products may need special permits and/or certification to be imported into Mexico, these have to be filed and be under the name of the importer. The filing and approval process can take from weeks to several months.
You will need to have an established company under mexican law with import permit to act as your importer of record (IOR), if cargo value is $5,000 USD or less a person can act as IOR but with some restrictions. In the case of the following categories: textiles, steel, steel products, chemicals, and shoes a special import permit is required for each of the categories.
If your customer cannot comply with the requirements to have an import permit, there are trading companies that can support the process in a legal and transparent way.
The synchronization between US and mexican customs broker, transport, warehouse, exporter, importer, and the authorities must be perfect and at great speed to avoid additional costs and problems, not to mention unfulfilling the service promise made to the customer. Compass works as an orchestrator to make sure there are no problems during the whole process, allowing you to have peace of mind and make the business successful.
There are different challenges and risks on both sides of the border, and it’s important to have the proper insurance to cover exactly what can go wrong in each country, there are not many companies that offer a cross border risk management products, our risks team is here to help and provide the solution you exactly need.
Good planning helps to mitigate most of the risks and operations can have, but practice makes perfect. Standard operating procedures (SOP) are important to allow the process to improve over time.
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