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Mexican Export Scheme for Fresh Tomatoes

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Mexican Export Scheme for Fresh Tomatoes MEXICAN EXPORT SCHEME FOR FRESH TOMATOES To facilitate the implementation and operation of the agreement suspending the antidumping investigation on fresh tomatoes, the Government of Mexico has undertaken a comprehensive effort to bring order to the Mexican tomato industry – from farm to customer. As part of this effort, under the various legal authorities, the Government of Mexico now requires all exporters to demonstrate their accession to the suspension agreement and provide their signatory number before providing the authorization necessary for export; the Government of Mexico is tracking and monitoring tomato exports; and, exporters that do not comply with the legal requirements of the scheme will not get the export permit or will have their export permit cancelled. As a result, all of the past problems with non-signatory growers and non-grower exporters shipping signatory tomatoes without authorization will be eliminated. The authorization necessary for export (Export Notice) is issued by the Ministry of the Economy (SECON) – after full compliance with the requirements of the National Food Health, Safety and Quality Service (SENASICA) of the Ministry of Agriculture (SAGARPA) – and is required by Mexican Customs for export. An overview of the export scheme is provided below. Step 1: SENASICA / ADHESION NOTICE The Federal Law on Plant Health empowers SENASICA to require exporters of produce to submit evidence of their adherence to agricultural and packing best practices (Adhesion Notice).1 The information and documentation in the Adhesion Notice is submitted under oath and is subject to verification and on-site inspection. If the inspector finds any irregular or false data, the Adhesion Notice is denied or cancelled (in the event the verification is after its issuance). Once approved, the Adhesion Notice is valid for 8 months for the total volume specified by the applicant. 1 See Federal Law of Plant Health, Title II.B, p.21-22, attached hereto at Tab 1a. 1 The Adhesion Notice requires all exporters – grower, non-grower, packer or trader – to provide proof of accession to the suspension agreement and their suspension agreement signatory number.2 In addition, the Adhesion Notice also requires the following information and documentation from growers and packers that is also relevant to the implementation and operation of the suspension agreement:3 Production area in hectares Exact location with GPS coordinates and satellite maps of production area and packing operation Annual periods – planting to harvest Estimated production volume in tons, by planting period, by year Type of production – open field, greenhouse and shade house4 Tomato varieties produced Brand names used – domestically and for export Estimated volumes packed Tomato varieties packed Brand names packed – domestically and for export Documentation attesting to the legal authority to make statements for the entity listed on the application, the ownership or possession of the production unit and the legal authority to use the brand names (trademark, license agreement or trademark application). Traders and non-grower exporters are required to submit: Certified copy of the Adhesion Notice for each production and/or packing operation supplying the tomatoes.5 Documentation attesting to the legal authority to make commitments for the entity listed on the application, the ownership or possession of the production unit, the legal authority to use the brand names (trademark, license agreement or trademark application).6 Reports can be generated that include all of the above data. 2 See Adhesion Notice form, p.4, attached hereto at Tab 1. 3 Id, p1-4. 4 Note these designations are for the sole purpose of organizing on-site SENASICA verifications of the data and information submitted in the Adhesion Notice. There are no formal definitions of these terms or instructions on how to designate production on the Adhesion Notice. 5 Id, p.3. 6 Id, p.4. 2 Step 2: SECON / EXPORT NOTICE Once the exporter – grower, non-grower, packer or trader – has a certified Adhesion Notice from SENASICA, it can apply for authorization to export from SECON. The Foreign Trade Law empowers SECON to require prior clearances (Export Notice) for the exportation of commodities through a process of application and approval.7 The prior clearance is implemented by the following SECON rules: 8 • Rule 2.2.1 – Establishes the classification and codification of merchandise whose export is subject to the requirements of previous permission. It includes new provisions that the application for the Export Notice requires the attachment of, among other things, a valid Adhesion Notice.9 • Rule 2.2.2 – Sets forth criteria and requirements for granting Export Notices. It includes a new provision that requires a valid Adhesion Notice for exporters that are producers or, for exporters that are not producers, an executed Purchase Agreement with the supplier to whom the Adhesion Notice was issued and the document providing the legal authority for use of brand names.10 • Rule 2.2.13 – Provides the required application form for the Export Notice that must be completed and submitted along with certain documentation.11 Information that is also relevant to the implementation and operation of the suspension agreement includes the following: Tariff number Volume to be exported Country of destination Adhesion Notice number Adhesion Notice expiration date Production volume specified on the Adhesion Notice SECON can generate reports that include exporter’s name, product, tariff line, port of export, Customs Broker, country of destination, and date of export with Customs official databases. This will require a Memorandum of Understanding between the U.S. Commerce Department and SECON. 7 See Prior Clearance, Quotas and Country of Origin Markings, Article 21, Foreign Trade Law, p. 8, attached hereto at Tab 2a. 8 See Prior Authorizations and Automatic Notifications, Chapter 2.2, Heading 2 (Foreign Trade Tariffs, Regulatory Matters and Non-Tariff Restrictions, Rules and Criteria, Economy Secretariat, August 25, 2009, attached hereto at Tab 2b. 9 See also Annex 2.2.1 (Tab 2c). 10 See also Annex 2.2.2 (Tab 2d). 11 See also Annex 2.2.13 (Tab 2). 3 Applications are made online through SECON’s digital window. The information and documentation in the Export Notice is submitted under oath. The data is validated by cross-checking against the data loaded by SENASICA into the same digital window. If there are any discrepancies, the Export Notice is not granted. SECON also has the authority to conduct on-site inspections through visits to exporters. In the event SECON finds any irregularity, inconsistency or non-compliance, it will cancel the Export Notice. Otherwise, it issues the Export Notice. In case of cancellation, SECON would immediately notify Customs to avoid any export under such Export Notice. Step 3: EXPORT PROCESS In accordance with Mexican Customs Law, the export declaration document must include the Export Notice authorization code.12 The Customs Brokers that submit all required information and documentation are charged with physically verifying that the merchandise matches with the information set in the official document containing the Export Notice (type of tomato, trademarks, among others). If correct, the Customs Broker will proceed with the customs clearance. All exports are then subject to random verifications by Customs. 12 See Annex 2.2.1, amended Article 10 at Tab 2c. 4 In the event that the Customs authority finds any irregularity, inconsistency or non-compliance, either with the export declaration or with the Export Notice, it would seize the merchandise and initiate an Administrative Customs Procedure, which could end in a fiscal penalty and depending on the infraction it could have criminal implications. Otherwise, Customs approves the export. Reports can be generated that include all export data and can be shared pursuant to the Mexico – United States Customs Memorandum of Understanding. Step 4: ENFORCEMENT Both SECON and SENASICA have the authorization to cancel the Adhesion or Export Notices if at any point the terms are not met. Without these documents, an export cannot occur. This can be done on an individual export basis, where discrepancies are noticed as the export moves through the procedure outlined above. In addition, SECON can notify Customs of any non-compliance or other irregularity, which can result in delisting of the exporter from the General Importers Registry. Finally, exporters that make fraudulent representations on their export documentation at any point in the process are also subject to a fiscal penalty and depending on the infraction it could have criminal implications, as well as delisting. Enforcing full compliance with the export scheme will be undertaken by the joint government industry working group. This group will be comprised of representatives from all the grower associations covering all exporters, as well as officials from SECON and SENSICA, and will meet formally once a month or as necessary. As part of this effort the group will undertake the following: Comprehensive review all the data – from SENASICA, SECON and, as permitted, Mexican Customs. Identify and address any inconsistencies or irregularities. Refer any infractions (either those discovered during monitoring exercises or those reported by the U.S. Department of Commerce) to SECON for investigation and, if validated, cancellation of the Export Notice or further referral to Customs for delisting.
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