NEWSLETTER INTERNATIONAL TRADE - NOVEMBER-DECEMBER 2023

01 / 16 / 24

NEWSLETTER INTERNATIONAL TRADE – NOVEMBER – DECEMBER 2023

No. 5 / 2023

DOMESTIC SCOPE

Preliminary resolution of the ex officio sunset review proceeding of the antidumping duty imposed on imports of cut bond paper originated in Brazil.

On November 1, 2023, the Unit of International Trade Practices (“UPCI,” for its acronym in Spanish) within the Ministry of Economy released the Preliminary Resolution of the sunset review concerning the antidumping duty imposed on imports of cut bond paper from Brazil. This information was published in the Federal Official Gazette (“Official Gazette”).

To provide context, the Final Resolution of the antidumping investigation was issued on March 13, 2013, establishing a definitive antidumping duty of 37.78%. Subsequently, in March 2019, the validity of this antidumping duty was extended for an additional five years. In March 2023, the Ministry of Economy initiated the ex officio sunset review proceeding for the period spanning January to December 2022.

The Ministry of Economy identified a change in circumstances related to the margin of price discrimination, prompting the decision to proceed with the sunset review. A provisional antidumping duty of 6.74% has been imposed on imports of cut bond paper originating from Brazil, applicable to specific tariff codes. Importers demonstrating that the origin of their imports differs from Brazil are exempt from payment under Article 66 of the Foreign Trade Law (“LCE,” for its acronym in Spanish).

Qualified interested parties have a 20-business-day window to present additional arguments and evidence before the Ministry of Economy.

Agreement that amends the one that establishes the goods whose import and export is subject to regulation by the Ministry of Energy (“SENER”, for its acronym in Spanish).

On November 6, 2023, the Ministry of Economy officially published an agreement in the Official Gazette, amending the existing agreement that outlines the goods subject to regulation by the SENER.

This amended Agreement introduces 57 new tariff codes accompanied by their respective Commercial Identification Numbers, in addition to 11 pre-existing ones, totaling 68. Notably, Prior Permits for the import and/or export of petroleum products or hydrocarbons will now have varying durations: 60 calendar days for sporting events and testing, one year for research, and five years for other purposes. The revised terms also incorporate additional requirements such as traceability, exclusive customs, explanation of production processes, and customer data.

Applicants for Prior Permits are required to submit their applications through the Foreign Trade Single Window. The SENER commits to issuing a resolution approving or denying the Prior Permit within 12 business days from the application’s admission date. In cases where there is no notification of approval, the permit will be considered denied.

It’s essential to note that applications submitted prior to the agreement’s enforcement for the import or export of hydrocarbons or petroleum products will be processed in accordance with the regulations in effect at the time of submission. Furthermore, Prior Permits that were already granted before the agreement came into force will remain valid until their natural conclusion.

Agreement amending the agreement that suspends the collection of antidumping duties imposed on imports of ammonium sulfate originated in the United States and China.

On November 24, 2023, the Ministry of Economy announced an amendment to the agreement that suspended the collection of antidumping duties on imports of ammonium sulfate originating from the United States and China, irrespective of the country of export. This modification was formally published in the Official Gazette.

Providing context, the initial agreement was issued on May 24, 2022, outlining the suspension of antidumping duties on imports of ammonium sulfate from the United States and China. Subsequently, on November 24, 2022, an extension of the agreement until November 24, 2023, was published in the Official Gazette.

The Ministry of Economy has concluded that the conditions justifying the initial issuance of the agreement persist. Moreover, the Ministry remains committed to implementing strategies to mitigate the impacts of inflation and prevent a decline in the consumption levels of Mexican households.

Consequently, the Ministry of Economy has decided to extend the term of the Agreement for an additional year, with its expiration now set for November 24, 2024.

Final resolution of the proceeding for the review of the validity of the antidumping duty imposed on imports of amoxicillin trihydrate originated in India.

On November 30, 2023, the UPCI published the Final Resolution of the antidumping duty sunset review for imports of amoxicillin trihydrate originating in India, regardless of the country of export. This review builds upon the precedent set by the Final Resolution in November 2012, which initially established a definitive antidumping duty of 64.9%.

In November 2018, the antidumping duty was extended for an additional five years, and by November 2021, it was announced that the definitive antidumping duties would be eliminated unless a domestic producer requested a new review. Fersinsa GB, S.A. de C.V. expressed its interest in October 2022, prompting the Ministry of Economy to initiate the sunset review in November 2022, covering the period from October 2021 to September 2022.

Following a comprehensive assessment, the Ministry of Economy determined that there are insufficient grounds to conclude that the elimination of the antidumping duty would lead to the recurrence of unfair trade practices. Consequently, the Ministry declared the proceeding concluded and eliminated the definitive antidumping duty of 64.9% for imports of amoxicillin originating in India, specifically those entering through certain tariff codes.

Preliminary resolution of the ex officio sunset review of the antidumping duty on imports of metallized plastic balloons originated in China.

On December 12, 2023, the UPCI published the Preliminary Resolution of the ex officio sunset review process for the antidumping duty on imports of metallized plastic balloons originating in China. This review was initiated following the June 2018 Final Resolution, which had imposed a definitive antidumping duty of US $37.8 per kilogram.

In June 2023, the Ministry of Economy declared the commencement of the sunset review and ex officio review of the antidumping duty. The review period encompassed January 1 to December 31, 2022. Notably, only Convertidora Industrial, S.A.B. de C.V., representing domestic production, participated in the process, as no Chinese company expressed interest.

After careful consideration, the Ministry of Economy determined that exports from China to Mexico exhibited continued price discriminatory behavior. Consequently, the Ministry decided to proceed with the review without modifying the existing antidumping duty. Interested parties are granted a 20-business-day window, starting from the date of publication in the Official Gazette, to submit additional arguments and evidence in accordance with the Regulations of the Foreign Trade Law (“RLCE,” for its acronym in Spanish).

Resolution of initiation of the sunset review and the ex officio review of the antidumping duty on imports of seamless steel pipe originated in China.

On December 22, 2023, the UPCI announced in the Official Gazette the initiation of the sunset review and ex officio review of the antidumping duty applied to imports of seamless steel pipe originating in China. This measure encompasses various tariff items under the Tariff of the Law of General Import and Export Taxes (“TIGIE,” for its acronym in Spanish) and stems from the Final Resolution of the antidumping investigation dating back to January 2014. The resolution had established a definitive antidumping duty of US$1,568.92 per metric ton.

In September 2023, Tubos de Acero de México, S.A. expressed its interest in having the Ministry of Economy initiate the sunset review, proposing the period from October 2022 to September 2023. Subsequently, the Ministry of Economy decided to commence the proceeding, focusing on that specific period for the ex officio examination and review. The analysis includes a retrospective period from October 1, 2018, to September 30, 2023.

Throughout the proceeding, the definitive antidumping duty will remain in effect, and interested parties are provided with a 28-business-day window to demonstrate their legal interest. During this time, they can submit responses, arguments, and relevant evidence, following the stipulations outlined in articles 11.2, 11.3, and 11.4 of the Antidumping Agreement, as well as articles 70 and 89 F of the LCE.

Resolution of initiation of the sunset review proceeding and the ex officio review of the undertakings assumed by the exporters Posco and Hyundai Hysco Co. Ltd. on imports of cold rolled steel sheet originated in Korea.

On December 22, 2023, the UPCI published the Resolution in the Official Gazette, marking the initiation of the administrative proceeding for the sunset review and ex officio review of the undertakings of exporters Posco and Hyundai Hysco Co. Ltd. concerning imports of cold rolled steel sheet originating in the Republic of Korea. This comprehensive review encompasses various tariff codes within the TIGIE and traces its roots back to the initiation of the antidumping investigation in October 2012.

In response to a request from an interested party, the preliminary investigation in June 2013 led to the imposition of provisional antidumping duties on imports of cold rolled steel sheet from Korea. Subsequently, in December 2013, the undertakings of exporters Posco and Hyundai Hysco Co. Ltd. were accepted, resulting in the suspension of the investigation without the imposition of antidumping duties. Following a sunset review in November 2019, it was decided to uphold the undertakings for an additional five years.

On November 7, 2023, Ternium México, S.A. de C.V. (“Ternium”) expressed its interest in initiating the sunset review of the commitments. The Ministry of Economy responded by setting the review period proposed by Ternium from October 1, 2022, to September 30, 2023, with a retrospective analysis spanning from October 1, 2019, to September 30, 2023. Interested parties are granted 28 business days to prove their legal interest and submit responses, arguments, and relevant evidence as stipulated by regulations.

Preliminary resolution of the antidumping investigation proceeding on imports of steel rebars with threaded ends originated in China.

On December 22, 2023, the UPCI published in the Official Gazette the Preliminary Resolution of the antidumping investigation on imports of steel rebars with threaded ends originated in China, regardless of the country of export.

The initiation of this investigation was prompted by a request filed on May 24, 2023, by Clavos Nacionales México, S.A. de C.V. and Clavos Nacionales CN, S.A. de C.V. The investigation specifically covers steel rebars threaded in low, medium carbon, or unhardened alloy, with a diameter equal to or greater than 6.4 mm (1/4 inch) but less than 38.1 mm (1½ inch) and a length equal to or greater than 152.4 mm (6 inches).

The Resolution issued on June 9, 2023, officially declared the initiation of the antidumping investigation, covering a period of investigation from January 1 to December 31, 2022 and a period of injury analysis from January 1, 2019 to December 31, 2022.

In the preliminary findings, the Ministry of Economy has determined that there are sufficient indications to suggest that imports of the investigated product were made under conditions of price discrimination during the investigated period, posing a threat of injury to the domestic industry. Consequently, provisional antidumping duties have been imposed on imports of steel rebars with threaded ends originating in China. These duties vary depending on the exporting company, ranging from 8.02% to 48.08%.

Importers obligated to pay these duties can be exempted if they provide evidence that the country of origin of the merchandise is other than China. Qualified interested parties have a 20-business-day window to appear before the Ministry of Economy and Commerce, presenting arguments and supplementary evidence.

Decree amending the various Sector Promotion Programs (“PROSEC”, for its acronym in Spanish).

On December 27, 2023, a Decree was issued and published in the Official Gazette, amending the existing Decree that establishes various PROSEC (Sectoral Promotion Programs). The primary focus of this reform is the adaptation of PROSEC, driven by the challenges faced by the textile and apparel industry in Mexico.

In September 2023, the country’s primary supplier of polyester fiber ceased its operations, leading to a substantial shortage of this critical input for the industry’s production. To address this situation, adjustments to the provisions of PROSEC were deemed necessary, incorporating new tariff codes to alleviate the effects of the shortage and support the continued operations of the affected sectors.

Specifically, the amendment introduces tariff codes 3907.61.01 and 3907.69.99 to the Rubber and Plastics Manufacturing Industry and the Textile and Apparel Industry sectors. These tariff codes pertain to polyester fiber and its manufacture, with a specified viscosity index greater than or equal to 78 ml/g for the former and covering various types of polyesters and epoxy resins for the latter.

The amendment establishes a preferential rate of 9% for these newly included tariff codes, aiming to facilitate access to the raw materials essential for production in the sectors affected by the shortage.

Decree that modifies the exemption from import duties and grants administrative facilities to several items of the families’ food basket.

On December 27, 2023, a Decree was published in the Official Gazette, amending the existing Decree that provides exemptions from import duties and grants administrative facilities for various goods essential to the basic food basket and the fundamental consumption of families (“families’ food basket”).

As a background, on January 6, 2023, a Decree was initially published in the Official Gazette, temporarily exempting customs duties and providing administrative facilities for several goods within the families’ food basket. Subsequent amendments on May 18 and June 23, 2023, extended these benefits until December 31, 2023.

This latest amendment, effective one day after its publication, further extends the validity of the temporary exemptions from customs duties and administrative facilities for essential products until December 31, 2024. The decision aims to sustain the implementation of measures geared towards mitigating the effects of the prevailing inflationary trend.

Final Resolution of the proceeding for the sunset review of the antidumping duty imposed on imports of chicken leg and thigh, originated in the United States.

On December 27, 2023, the UPCI published the final resolution in the Official Gazette, marking the conclusion of the administrative procedure for the sunset review of the antidumping duty imposed on imports of chicken leg and thigh originating in the United States, regardless of the country of export. These imports enter through tariff codes 0207.13.04 and 0207.14.99 of the TIGIE, or any other applicable tariff code.

The initial Final Resolution of the antidumping investigation on imports of chicken leg and thigh from the United States was published in August 2012. In response, the Ministry of Economy established definitive antidumping duties, distinguishing between imports from specific companies and other exporters.

Subsequent appeals and reviews were filed before a Binational Panel, leading to adjustments in the antidumping duties in 2017. In 2018, the first sunset review was conducted, extending the validity of the antidumping duty for an additional 5 years, although it was temporarily suspended due to the Avian Influenza virus contingency.

In 2021, Bachoco, S.A. de C.V. expressed its interest in initiating a new sunset review, and in 2022, the Resolution declaring the initiation of the proceeding was published. After a thorough analysis, the Ministry of Economy concluded that the elimination of the antidumping duty would lead to the continuation of price discrimination and injury to the domestic industry. Consequently, the Ministry of Economy declared the sunset review proceeding concluded and determined to extend the validity of the definitive antidumping duty for another 5 years, starting on August 7, 2022.

Publication of the General Foreign Trade Rules for 2024 (“GFTR for 2024”) and its Appendix 13.

On December 28, 2023, the GFTR for 2024 and its Appendix 13 were published in the Official Gazette and came into effect on January 1, 2024, with the exception of specific provisions.

Key updates and modifications encompass various aspects:

The fines outlined in Appendix 13 have been reviewed and adjusted to account for the cumulative increase in the National Consumer Price Index.
Two new grounds for suspension related to tax status and Value Added Tax withholdings are now incorporated into the Importers’ Registry.
The validity of the list of importers dealing with goods in the families’ food basket has been extended until March 2025, as a measure to counteract the ongoing inflationary trend.
For individuals needing to make a one-time import without registration, the authority may request information within 10 days, and the absence of a response will be considered as the filing of the request.
Rule 3.1.41 has been introduced in Appendix 22, providing detailed instructions for completing the customs declaration.
Concerning the Customs Processing Fee, it is clarified that operations of diplomatic missions will be considered as carried out by foreigners.
Goods originating from countries within the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”) will be subject to a fixed rate according to the Federal Duties Law, provided that requirements such as the declaration of the country of origin/destination and seller/buyer country, along with the presentation of documents complying with the characteristics of the CPTPP, are met.

Final resolution of the antidumping investigation proceeding on imports of cold rolled steel sheet originated in Vietnam.

On December 28, 2023, the UPCI published the Final Resolution of the antidumping administrative proceeding in the Official Gazette, focusing on imports of cold-rolled steel sheet originating in the Socialist Republic of Vietnam, regardless of the country of export.

The initiative for this investigation began in February 2022 when Ternium formally requested the initiation of an investigation into unfair international trade practices, particularly price discrimination, concerning imports of cold-rolled steel sheet from Vietnam. The request was accepted, and the proceeding was officially declared initiated in July 2022, covering a period of investigation from October 1, 2020, to September 30, 2021.

Upon thorough examination, the Ministry of Economy determined that there were sufficient grounds to support the assertion that imports of cold-rolled steel sheet from Vietnam were conducted under conditions of price discrimination, posing a threat of injury to the domestic industry. Furthermore, it was anticipated that in the immediate future, imports could substantially increase, further displacing the domestic industry.

Consequently, the Ministry of Economy declared the proceeding concluded and imposed definitive antidumping duties on imports of cold-rolled steel sheet from Vietnam. These duties are specified as 11.64% for imports from Hoa Phat Steel Sheet Co., Ltd., 25.64% for imports from Posco Vietnam Co., Ltd., and 79.24% for all other exporting producers.

Importers required to pay the definitive antidumping duty have the option to be exempted from it if they can provide evidence demonstrating that the country of origin of the merchandise is other than Vietnam.

REGIONAL SCOPE

Decree enacting the Agreement between Mexico and Costa Rica on Technical Cooperation and Mutual Assistance in Customs Matters.

On December 7, 2023, the Decree enacting the Agreement between the United Mexican States and the Republic of Costa Rica on Technical Cooperation and Mutual Assistance in Customs Matters was published in the Official Gazette.

As background, on February 29, 2016 it was signed ad referendum by the President of the Republic in Mexico City. The agreement was approved by the Senate on November 14, 2017 and notifications were made to Costa Rica on January 31, 2018 and November 10, 2023.

The agreement serves as a foundational framework for cooperation between the customs authorities of both countries, aiming to enhance their technical and operational capacities. It outlines collaboration in the following key areas:

Personnel development: Both countries’ customs authorities will collaborate to promote personnel development programs, including initiatives such as customs training schools, study plans, in-service training programs, courses, seminars, or academic events focusing on customs matters.
Exchange of information: The customs authorities of both nations are authorized to exchange customs-related information concerning the enforcement of customs legislation, the prevention and investigation of customs crimes, and the protection of fiscal interests.
Mutual assistance: Both countries’ customs authorities may provide mutual assistance in the performance of their customs functions. This includes support in the conduct of investigations, exchange of evidence, and the execution of precautionary measures.

The agreement officially took effect on December 10, 2023.

Agreement announcing Decision 1/2023 of the Mexico-United Kingdom Joint Committee of November 1, 2023.

On December 7, 2023, the Ministry of Economy published in the Official Gazette the Agreement announcing Decision 1/2023 of the Mexico-United Kingdom Joint Committee dated November 1, 2023.

Decision 1/2023 extends the application of the existing provisions on extended cumulation of origin, pursuant to paragraph 7 of Article 3a of Annex III of Decision 2/2000 of the Economic Partnership, Political Coordination and Cooperation Agreement between the United Mexican States, on the one hand, and the European Community and its Member States, on the other hand, concluded at Brussels on December 8, 1997 (“Incorporated Agreement”), until the entry into force of a new bilateral free trade agreement between Mexico and the United Kingdom.

The extended cumulation of origin facilitates exporters from Mexico and the United Kingdom to blend inputs from both countries in the production of a product that satisfies the origin requirements of a free trade agreement.

Decision 1/2023 is scheduled to enter into force on January 1, 2024.

Notice of Termination of North American Free Trade Agreement (“NAFTA”) Binational Panel Review of the Final Resolution of the Injury Determination on Imports of Structural Steel originated in Mexico.

On December 13, 2023, the Secretariat of the Mexican Section of the Free Trade Agreements issued a notice regarding the termination of the NAFTA Binational Panel review of the Final Resolution of the Injury Determination on Imports of Structural Steel from Mexico, identified by file number USA-MEX-2020-1904-04.

In accordance with the NAFTA Section 1904 (Binational Panel Review) Rules of Procedure, the Secretariat published the Notice of Termination. It further specified that the panelists were relieved of their duties as of September 28, 2023.

Resolution that modifies the General Rules related to the application of the customs provisions of the CPTPP and its annex.

On December 22, 2023, the Ministry of Economy published a resolution in the Official Gazette, introducing amendments to the General Rules governing the application of customs provisions of the CPTPP and its annex. The key modifications cover various aspects:

Definition of Non-Originating Merchandise: Rule 3.1 is introduced, providing a definition for non-originating merchandise as those that do not comply with the provisions outlined in Chapters 3 and 4 of the CPTPP.
Submission of Certification of Origin: Importers seeking preferential customs duties treatment are required to submit a valid certification of origin, adhering to the stipulations outlined in Chapter 3 of the CPTPP.
Prohibition of Subsequent Claims: Importers are prohibited from making subsequent claims for preferential customs duty treatment for the same importation based on a certification of origin issued by the exporter or producer.
Importer’s Certification Responsibility: Importers are mandated to certify the origin of a good with supporting information or with reasonable confidence in the documentation provided by the exporter or producer.
Documentation Retention: Importers must retain related documentation and valid certifications of origin for a minimum of 5 years, demonstrating that the merchandise originated and qualifies for preferential tariff treatment.
Customs Authority Powers: The resolution specifies the powers of the customs authority to suspend preferential tariff treatment for the importer in cases of false declarations regarding the origin of a good.
Importer Inclusion in Verification Processes: Importers are included in the dispatch and notification to customs authorities during verifications of origin, utilizing the tax mailbox as a means of contact.
Changes to the Annex: Amendments allow the importer to serve as the certifier and data recorder, especially if different from the original certifier.

The amendments became effective on December 29, 2023.

Resolution that amends the General Rules related to the application of the customs provisions of the Agreement between the United Mexican States, the United States of America and Canada (“USMCA”) and its annexes.

On December 22, 2023, the Resolution amending the Resolution that establishes the General Rules related to the application of the customs provisions of the USMCA and its annexes was published in the Official Gazette. These amendments took effect on December 29, 2023.

The amendment impacts 11 rules, introduces 3 new rules, and modifies Annex 1. The changes encompass various aspects, including:

Definition of Uniform Regulations: Rule 1, section XIX, introduces the definition of Uniform Regulations.
New Rule for Importer’s Preferential Tariff Treatment Request: Rule 25.3 is added, allowing importers to request preferential tariff treatment based on their certification of origin.

Adjustments to Existing Rules: Rules 30, 33, 42, 62, 63, 63.2, 63.3, 72, 85, and 87 are adjusted, addressing concerns such as the preservation of documentation, verifications of origin, notifications, and minimum requirements for certification of origin, among others.
Modifications to Annex 1: Annex 1 undergoes changes to accommodate the possibility of the importer serving as the certifier. It specifies the inclusion of the importer’s data in cases where it differs from the original certifier.

These amendments, effective from December 29, 2023, aim to refine and clarify various aspects of the customs provisions in the context of the USMCA.

Agreement announcing Decision No. 116 of the Administrative Commission of the Free Trade Agreement between the United Mexican States and the Republic of Colombia (“Mexico-Colombia FTA”).

On December 28, 2023, the Ministry of Economy published in the Official Gazette the Agreement announcing Decision No. 116 of the Administrative Commission of the Mexico-Colombia FTA.

The Administrative Commission of the Mexico-Colombia FTA has chosen to implement updates to Article 6-03, specifically focusing on the Rules of Origin. These updates pertain to Sections B (Specific Rules of Origin) and C (Table of Tariff Codes) of the Annex to the FTA. The modifications align with the changes introduced in the Sixth Amendment to the Harmonized System, 2017 version.

MULTILATERAL SCOPE

Establishment of dispute settlement panel to examine the duties imposed by the European Union (“EU”) on imports of biodiesel from Indonesia.

On November 27, 2023, the Dispute Settlement Body of the World Trade Organization (“WTO”) accepted Indonesia’s request to establish a panel to examine countervailing duties imposed by the EU on imports of biodiesel from Indonesia. The EU implemented these countervailing duties in 2022 after an investigation concluded that Indonesian biodiesel imports were distorting the European market.

Indonesia alleges that the definitive countervailing duties on biodiesel imports from Indonesia and the investigation leading to their imposition are inconsistent with the Agreement on Subsidies and Countervailing Measures and the General Agreement on Tariffs and Trade 1994 (“GATT 1994”).

Specifically, Indonesia claims that the EU failed to provide sufficient evidence demonstrating that biodiesel imports from Indonesia were causing material injury to the European biodiesel industry. Additionally, Indonesia alleges that the EU did not calculate the countervailing duties correctly.

Several countries, including the United States, United Kingdom, Norway, Russia, Thailand, Singapore, Japan, Canada, China, Argentina, and Turkey, have reserved the right to participate as third parties in the panel proceedings.

Panel issues report on duties imposed by Turkey on certain products from the United States.

On December 19, 2023, the WTO circulated the report of the panel in the case “Turkey – Additional Duties on Certain Products from the United States” (DS561), initiated by the United States.

This dispute centers around additional duties imposed by Turkey on certain products originating from the United States. The United States filed the complaint on July 16, 2018, contending that Turkey’s measures were inconsistent with certain provisions of the GATT 1994.

The United States highlighted a modification in the additional duty measure, asserting that Turkey increased duty rates for 21 of the 22 affected tariff codes. According to the United States, this exceeded the limits outlined in Turkey’s Schedule of Concessions and was higher than the initially imposed duties.

After requesting consultations in July 2018, the United States called for the establishment of a panel in December 2018. The panel was set up in January 2019, and its final report was circulated on December 19, 2023. The process experienced delays due to the COVID-19 pandemic.

The panel concluded that Turkey’s measure was inconsistent with GATT 1994 as it did not immediately and unconditionally grant U.S. products the benefit of the lower tariff rates. Additionally, it found that the additional duties violated GATT 1994 by imposing customs duties exceeding those specified in Turkey’s Schedule, thereby providing less favorable treatment to U.S. imports.