Unlawful Practices of International Commerce and Its Resolution
The law defines unlawful practices as the importing of goods with discriminatory prices or goods subject to subsidies in the country of origin or point of departure that cause or threaten to cause an injury to national production. If unlawful practices are determined, the goods may be subject to compensatory quotas, regulations and restrictions or safeguard measures.
The importing of goods with discriminatory prices is defined as the introduction of goods into the national territory at a price less than normal market value. The normal market value of the exported goods to Mexico is the price comparable to the identical or similar goods that are destined to the internal market of the country of origin in the course of normal commercial operations.
The Ministry of Economy will consider that a foreign government has given a subsidy when such government gives to any public or private entity engaged in commerce a benefit or benefits that give such entity an unfair international competitive advantage, unless it is an internationally accepted practice.
Compensatory quotas are imposed to discourage importation through unlawful practices. In the event that the Ministry confirms that a provisional compensatory quota is warranted, the payment of such quota or authorized guarantees must be paid by the individuals or legal entities that imported the goods through unlawful practice.
Annual Revision of Compensatory Quotas
Definitive compensatory quotas that have been imposed to stop the threat of injury caused by discrimination of import prices or subsidies should be revised annually by petition of the interested party and can be revised at any moment by the Ministry of Economy. These revisions should be published in the Federal Gazette and communicated to the interested parties.
Promises by the Exporter and Governments
The interested parties may participate in the revision procedures. In order to prevent the compensatory quotas, the exporter may voluntarily promise to modify prices or cease exportation, or the government of the exporting country can eliminate or limit the subsidy.
Safeguard measures temporarily regulate or restrict the importing of identical or similar goods which directly compete with the products produced nationally, with the purpose of preventing a serious economic injury caused to national producers.
The Ministry of Economy will have 30 days starting from the presentation of the request to initiate the investigation for the determination of unlawful practices and compensatory quotas. The requesting party will have 20 days from the receipt of the notification to deliver the data or documents that the Ministry requests. The Ministry will then have an additional 130 days to issue a preliminary resolution, before the provisional resolution is determined, which should be communicated to the interested parties and published in the Federal Gazette. The Ministry will then have another 130 days to dictate the final resolution, before the definitive resolution is determined, which in turn should be communicated to the interested parties and also published.
Once the definitive compensatory quota is established, the interested parties can request the Ministry of Economy to determine if the goods in question are subject to it. In the event that the goods are subject to the quota, the Ministry shall allow the other interested parties to participate in the proceedings and should answer the petitioning party in accordance with the procedures established in the rules which will have the character of a final resolution. The resolution shall be communicated to the interested parties and published in the Federal Gazette.
The law prevents the imposition of compensatory quotas and safeguard measures without first having heard from the interested parties. Foreign exporters and foreign entities can also be considered as interested parties.
Infractions and Administrative Sanctions
Sanctions are imposed if a party falsifies, omits, fraudulently alters or is grossly negligent in providing data or documents or if, among others, he divulges and utilizes confidential information. Violation of these provisions can result in sanctions being imposed which range from the value of the imported goods to 180 times the present minimum salary in the Federal District.
This text was provided by Santistevan Abogados S.A. de C.V.
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