On May 13, 2016, the Government of Canada announced that on May 11, 2016 the Canada Border Services Agency (“CBSA”) had signed a Mutual Recognition Agreement (“MRA”) with the Tax Administration of Mexican States. The MRA was signed at the World Customs Organization 3rd Global Authorized Economic Operators (AEO) Conference in Cancun, Mexico.
This means that Mexico will recognize Canada’s Partners in Protection (“PIP”) and permit expedited customs clearance to PIP members. Canada will recognized Mexico’s SAT’s Nuevo Esquema de Empresas Certificadas (“NEEC”) programs and permit expedited customs clearance to NEEC members..
The MRA expands the international trade network of accredited low-risk companies. The MRA between Canada’s PIP and Mexico’s NEEC programs means that:
- both countries apply similar security standards and site validation practices when approving companies for membership in their respective programs, and
- both countries recognize each other’s members and may grant them similar benefits.
Canada’s PIP Program is a cooperative trusted traveler program between the CBSA and private businesses engaged in importing and exporting activities (and suppliers thereto). The purpose of the PIP program is cross-border trade chain security and trade facilitation of legitimate cargo by reducing risks to Canada’s security, health, environment and economy from supplier to customer origin to destination. While the PIP Program clearly has a trade chain security objective, it also has as an objective the facilitated clearance of legitimate cargo and use of FAST lanes at the border.
The PIP Program is a voluntary program pursuant to which private businesses may apply and demonstrate that they pose low risk to trade chain security and, therefore, are trusted businesses. Private businesses must provide detailed information, which will be provided to the CBSA, the United States Department of Homeland Security and other governmental agencies. There is no statutory obligation to participate in the discretionary and regulatory PIP Program.
There is no membership fee to participate in the PIP Program. Participants in the PIP Program are required to satisfy terms and conditions in order to join the PIP Program. In addition, participants in PIP must continue to abide by the rules of the PIP Program in order to remain in the PIP Program.
The Canada-Mexico MRA aligns with the World Customs Organization’s SAFE Framework of Standards, which establishes standards for globally integrated supply chain security and facilitation for all modes of transport.
The CBSA has now signed five MRAs with other customs administrations, including the United States, Japan, Singapore and the Republic of Korea:
- June 2008 – U.S. Customs and Border Protection – Customs Trade Partnership Against Terrorism (C-TPAT) program
- June 2010 – Japan Customs and Tariff Bureau – AEO program
- June 2010 – Korea Customs Service – AEO program
- June 2010 – Singapore Customs – Secure Trade Partnership (STP) program
- May 2016 – Tax Administration Service of the United Mexican States – New Scheme of Certified Companies (NEEC)