Non-return -Annex 24-, Precautionary seizure, Inaccurate data (Added Value and Identifiers).
BACKGROUND
By means of a Home Visit order contained in official letter 110-08-01-00-00-**, with order number CCE58000**/**, issued within file 7S.-2****, issued by the Decentralized Administration of Foreign Trade Audit of the North Pacific, under the General Administration of Foreign Trade Audit, of the Tax Administration Service (hereinafter the authority), it was ordered that the company be responsible for the, the practice of the inspection procedure provided for in numeral 42 section III of the Federal Tax Code -HOME VISIT-; in order to verify compliance with the tax and customs provisions to which it is affected as a direct subject in matters of Export, Customs Processing Fee, Value Added Tax, as well as to verify the legal importation, possession or stay in the country of goods of foreign origin and compliance with non-tariff regulations or restrictions and official Mexican standards.
- PRECAUTIONARY SEIZURE – PAMA
On the basis of the above, through the Partial Act of Initiation drawn up, the Home Visit Procedure ordered in the official letter described in the previous point was notified and initiated.
PAMA 1
60 ASSETS SEIZED AS A PRECAUTIONARY MEASURE.
Since within the beginning of the procedure, merchandise of foreign origin was detected in the tax domicile of the company, and because at that time the corresponding documents were not exhibited to prove their legal stay, possession and/or importation, the precautionary seizure of the fixed assets of foreign origin inventoried in cases 01 to 60 was determined. With this, the Administrative Procedure in Customs Matters (PAMA), provided for in numeral 155 of the Customs Law, was opened independently.
Subsequently, on the occasion of the order of home visit applied to the company, an additional Certificate of Extension was drawn up, notifying the precautionary seizure of the goods located in two (2) addresses of the company:
PAMA 2
33 ASSETS SEIZED AS A PRECAUTIONARY MEASURE.
PAMA 3
25 ASSETS SEIZED AS A PRECAUTIONARY MEASURE.
It should be noted that in the case of the Home Visit Procedure in Foreign Trade matters, two autonomous procedures are opened, one which is the one contemplated by numeral 155 of the Customs Law, and refers to the Administrative Procedure in Customs Matters, in which the precautionary seizure of the assets was carried out and the other, is the Home Visit procedure or audit in foreign trade.
- HOME VISIT IN MATTERS OF FOREIGN TRADE
As part of the stages of conclusion of the Home Visit Procedure, by means of the LAST PARTIAL ACT of the procedure, the irregularities allegedly detected by the company and their possible legal consequences were disclosed:
In summary, the inconsistencies detected by the supervisory authority are the following:
Chapter I.
- A) Inaccurate data (Value Added)
For the period reviewed, it was observed that, in 3892 cases of goods manufactured, processed and/or repaired for export, inconsistent in 30 pedimentos Custom entry documents, in which the amount in quantity “0” was declared in the field “VAL. ADDED.”
Chapter II.
- A) Failure to return temporarily imported goods
For the period reviewed, it is presumed that there was an irregularity of omission in the return abroad of the various goods imported temporarily, thereby omitting the General Import Tax. 6273 cases.
- B) Inaccurate data (Value Added)
For the period reviewed, in which it was observed that, in 1587 cases of goods prepared, transformed and/or repaired for export inconsistent in 27 Custom entry documents, in which the amount in quantity “0” was declared in the field “VAL. AGGREGATE.”
- C) Inaccurate general data (Identifiers)
During the period reviewed, it was observed that in 21 export cases, the identifier “DE” (WASTE) is not completely and correctly declared.
It should be noted that these inconsistencies resulted in a presumption on the part of the company, calculated by the authority for the omission of contributions and fines in the amount of $2,115,****,***.00 pesos (figures in billions, expressed with *** for confidentiality of the information), which if not resolved, would be determined an updated tax credit in that amount.
ACTIONS CARRIED OUT
- PRECAUTIONARY SEIZURE – PAMA
By virtue of the foregoing, immediately on the date on which we were entrusted with the attention of the matter, the following actions were carried out to disprove the assumptions by which the precautionary seizure of fixed assets/machinery had been determined.
- Within the established legal period, in accordance with the provisions of paragraphs 1, 43, 46, 150 and 155 of the Customs Law in direct relation to 1, 8, 14 and 16 of the Political Constitution of Mexico, the allegations and evidence that are applicable in law in each of the proceedings were offered and exhibited; which were sufficient to disprove the grounds that allegedly gave rise to the decree of the precautionary seizure. Based on this, the following were made:
- Comprehensive analysis of the customs information and/or documentation with which it was intended to prove the legal stay and/or possession of the goods, for each of the cases seized as a precautionary measure in each PAMA.
- Implementation of an initial diagnostic audit, to determine the viability of the information available to the company.
- Daily development of work meetings with the company, to formulate and determine the strategy to be followed.
- Advice on the integration of documents and information that would be presented to the authority and formulation of legal strategy positions regarding those documents that were considered not sufficient to disprove the grounds for seizure.
- Preparation of the legal defense briefs, with which all the evidence necessary to disprove the assumptions of attachment was presented, making a deep confirmation that each document corresponded to each case.
- Submission of the documents to the authority.
- Attending follow-up meetings before the authority in conjunction with representatives of the company, in which the solution of the matter was being managed.
- It should be noted that in order to prove the legal stay and/or possession of the seized cases and since in some of the cases it was applicable, various benefits that the company has as it is certified under the AOE and VAT and IEPS modality were additionally asserted.
The foregoing, since the Company has and has had since August 2005 and within the period of carrying out the importation of the seized fixed assets with the Certification of Companies in the Authorized Economic Operator (AEO) modality, importer and/or exporter item, as well as with the VAT and IEPS Certification; it was established for those cases in which the supporting documentation was not sufficient to disprove the assumptions of seizure (22 out of 118 cases), that the seized goods were correctly imported in compliance with all the formalities of the procedure; It was then evident that the documents exhibited to prove the legal stay and/or possession (invoice and pedimento) were sufficient to disprove the cases of precautionary seizure, since said documents were processed under the benefits granted by the aforementioned certifications, which were always and have been in force in favor of the company; since the company, through its foreign trade area, carries out active and permanent work to maintain the continuity of the aforementioned certifications.
In itself, one of the main benefits granted by these certifications and which was effectively enforced, is the ease of carrying out the customs clearance of the goods for their temporary importation or introduction, according to the regime they operate, without declaring or transmitting in the pedimento, electronic document, in the invoice, in the shipping document or in an attached relationship, the serial numbers, model, part or brand; it is therefore proven that the documents exhibited fully distorted the cases of embargo and in addition, that the company fully complied with the obligations in terms of inventory control ANNEX 24, as demonstrated before the authority.
With regard to the other seized cases, the corresponding documentary supports were integrated, mainly, Import Pedimento and Commercial Invoice, with which the assumptions of seizure were reliably distorted, in terms of numeral 146 of the Customs Law.
- HOME VISIT- FOREIGN TRADE
- Immediately, the preparation of the legal defense strategy to disprove the irregularities detected began.
- An intensive internal audit procedure was implemented in order to integrate the documentary supports that would disprove the irregularities detected.
- Regarding the inconsistencies in ANNEX 24, the Stratego team initiated a very thorough procedure of automatic and manual review of the 6,273 cases in Annex 24 that were identified with inconsistencies, proceeding to correct them and corroborating the elements to solve the irregularities detected. It should be noted that achieving the correction of this total number of cases represented 536 hours of continuous work between different members of our Audit area.
- With respect to the other inconsistencies detected (Inaccurate General Data (Identifiers) and Inaccurate Data (Added Value)), the documentary supports that reliably disproved the presumptions made by the authority were collected one by one and the legal arguments that supported disproving these inconsistencies were formulated.
- Subsequently, the legal defense briefs were prepared and presented, with which it was supported that the irregularities detected had been distorted.
- Following the above, personal steps were taken before the authority, to follow up on the promotions, supports and allegations presented.
RESULTS
- PRECAUTIONARY SEIZURE – PAMA
As a result of our intervention and the legal strategies implemented; regarding the three (3) Administrative Procedures of Precautionary Attachment (PAMA) through various official letters numbers 110-08-01-00-***, issued by the Audit Administration, it was definitively resolved in favor of the company that the assumptions of precautionary attachment were distorted, for ALL the cases seized; consequently, the seizures made were annulled and no sanctions were imposed or tax credits were determined to be paid by the company.
In this sense, these procedures were resolved in a FAVORABLE way in the administrative stage.
HOME VISIT
Due to the strategies implemented, through FINAL ACTS, the supervisory authority determined in the first instance to consider the irregularities detected in ANNEX 24 (cases of non-return ) to be SOLVED in their entirety; obtaining a very significant favorable result since these irregularities made up the largest percentage of the cases detected.
By means of a resolution contained in official letter number 110-08-****; the authority resolved to distort ALL the irregularities detected by the company and therefore, annulled the pre-determined tax credit.
In this sense, these procedures were resolved in a FAVORABLE way in the administrative stage.
CONCLUSIONS
- With respect to the 3 (three) Administrative Procedures of precautionary seizure:
A favorable resolution was obtained in the administrative stage for each procedure, avoiding the
payment of the tax credits predetermined by the authority and ensuring in favor of the company the ownership of the embargoed goods as well as the continuity of its IMMEX Program.
- Regarding the Home Visit procedure:
A favorable resolution was obtained in the administrative stage, avoiding the determination and possible payment of a predetermined tax credit in the amount of $2 ́ 115, ***, ***.** (figures in billions, expressed with – for confidentiality of the information).
With the above, indirectly WE ALSO ENSURED CONTINUITY IN THE DIFFERENT PROGRAMS AND AUTHORIZATIONS of our client:
- IMMEX
- OAS
- VAT & IEPS Certification
- Importers Registry
- Exporters Registry
- Digital stamp
- Among others
Which, having definitively determined the tax credit, would have been suspended or canceled as a direct consequence of the debt owed by the company.
However, with the actions exercised by our Firm, the aforementioned audit procedure was resolved in the ADMINISTRATIVE stage WITHOUT the determination of tax credits or imposition of penalties.
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