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Annex 24 / Anexo 24Inventory Control System for IMMEX Companies

Introduction1. Understanding Anexo 242. Rules, Regulations & Requirements3. Examples & Common mistakes4. Concequences (Customs fines & others)5. Best practice recommendations

The automated inventory control (Anexo 24), requires the following :

Chapter I. Minimum information for the inventory control system

Chapter I : Obligations of the importer.Keep an automated Inventory Control System

Article 59 LA

1. Comply with its Regulations in accordance to the foreign trade rules ( RCGMCE 4.3.2) regarding inventory control of goods imported temporarily.

2. Have an automated inventory control system that maintains balances of temporary imported materials and exported finished products.

3. The system shall generate annual reports that comply with the reporting requirements established by Customs and the Mexico department of commerce.

Anexo 24Chapter I. Minimum information required for the inventory control system

A - CATALOGS : - General Information of the importer of record / responsible

party- Raw materials- Finished goods

B – CUSTOMS MODULE : - Module of entry to customs information (temporary import)- Module of information about the used materials .- Module of customs information for outputs (returns, destruction, donations, regime changes, scrap,

etc...)- Module of assets (equipment, machinery)

C – REPORT MODULE : - Report of goods entry of temporary imports- Report of goods output of temporary imports- Report of balance of temporary imports- Report of used materials

• Verify merchandise

• Packing list

USA Warehouse

• Process Pedimento (IMPO)

MX Customs • Input Inventory• Verify Pedimento VS

Real• Manufacture: Finished

good OR Service• Output Inventory

Maquiladora

• Process Pedimento (EXPO)

MX Customs

• Deliver merchandise

Customer

Anexo 24 Anexo 24 Operational Process Diagram

Others

Examples & Common mistakesAll these mistakes affect inventory

Anexo 24

BOM

Anexo 24 Examples & Common mistakes

Component ID Description Qty

L1-T Lid 1

LA12-PT Water Label 1

B10-ER Plastic bottle R 1

Component ID Description Qty

L1-T Lid 1

LA12-PT Water Label 1

B10-EH Plastic bottle H 1

Wrong BOM (System VS Real)

BOTTLE-1L – Annex System BOTTLE-1L – Real used in line production

This should be another BOM

Production requested 1000 the finished good BOTTLE-1L

Raw material Description Balance System Required Real Used New Balance

L1-T Lid 10,000 1000 1000 9,000

LA12-PT Water Label 14,000 1000 1000 13,000

B10-ER Plastic bottle R 0 1000 0 -1000

Inventory result

Anexo 24 Examples & Common mistakes

Pedimento VS Real+/- Materials received

Qty: 1,000

Pedimento

VS

Qty: 1,100Reported in the system but not correction was made for customs purposes

Real input

Anexo 24 Examples & Common mistakes

Scrap

a) Quality control rejection:It’s necessary make a virtual transfer of scrap of finished good.

In the production process

c) Liquid spilled by the machine:It’s necessary to specify in your BOM, the waste that would be deducted in the process.

b) Damaged raw materials:It’s necessary make a virtual transfer or a goods return.

Anexo 24 Examples & Common mistakes

Transfer of materials from one company to the other without the required paperwork and inventory control.

Virtuals

Not doneOutput Company 1

Input Company 2

Consequences

Anexo 24

Anexo 24Consequences

The consequences of failing to keep a proper inventory (Anexo 24) are:

176, Chapter I: Excess of merchandisePenalty of 130% to 150% of foreign trade taxes omitted

176, Chapter X: No PedimentoPenalty of 70% to 100% of the merchandise

144 A, Chapter II: Cancellation of IMMEX

185 A: No inventory control systemPenalty of $ 14,650 to $ 29,310 MXP

Best practice recommendations

Anexo 24

Thank you!

Joffroy Group