Mexican Fiscal Traffic Light
Have you ever wondered how shipment inspection works at customs? Have you ever had your cargo inspected? Have you asked yourself why some shipments get flagged while others don’t?
To begin with, when it comes to international trade, the 2 countries involved will have their own national security regulations, hence they will carry out their own cargo examination procedures at each of their customs. The US and Mexico in this case have quite different processes.
Let’s start on the American side where the U.S. Customs and Border Protection (CBP), is entitled to examine any shipments imported into the United States and the importer is required to bear the cost of the cargo exams performed. Even though the CBP does not disclose any details about the verification process due to national security risk, we know that some examinations are completely random. However, there is a record that keeps track of importers and exporters, so if for instance labeling issues were once found in your cargo, you are more likely to be inspected in the future. Moreover, first time importers are usually inspected.
On the Mexican side, the Tax Administration Service or SAT implements an automated selection mechanism module or fiscal traffic light, which is a control system whose objective is to ensure that merchandises entering the Mexican territory comply with import and export regulations (tax payment, paperwork, standards, etc).
How does it work?
It basically looks like a traffic light with a red and green light only. Once your cargo is presented at the module, the system is activated to determine if the customs inspection should be performed. If you get a green light, your goods will be automatically released for customs clearance, but in case of red light the physical examination of your cargo and paperwork will be performed.
But are these inspections completely random? Not necessarily, the Mexican Customs Authority may determine and release an inspection order depending on several factors including: type of merchandise, harmonized tariff code, and the importer and/or exporter’s record.
The verification process begins once the entry form validation of Mexico’s entry form is submitted to the Customs Authority, who validates and issues a barcode that is then printed on the form. The goods are then presented at the customs where they will go through the first random verification module whereby the mentioned barcode is scanned to determine if your cargo is ready for customs clearance or if it will be inspected. This process is then repeated at a second module. The process ends once non-tariff requirements are fulfilled and taxes are paid.
Although we will not be able to bypass the inspection procedures, companies with certifications such as Customs-Trade Partnership Against Terrorism (C-TPAT) receive preferential treatment if their shipments are moved to a Centralized Examination Station (CES), in other words they will be moved to the front of the line.
EP America is C-TPAT certified and complies with all governmental regulations in both Mexico and the US, enabling us to guide your freight through this process. If you have experienced delay issues due to non-compliance in the past, call us to receive a free consultation.