Mexico sourcing agent or getting matched with manufacturers: who does the work and who carries the origin risk

Three arrangements that go by similar names

Look for a way into Mexican manufacturing and you will meet three arrangements. Each puts you in a different place in the chain, so it pays to know which one is on the table.

A sourcing agent works for you. It shortlists factories, passes on your specification, follows production and checks the goods before they head north. You place the order, the contract is between you and the factory, and the agent sends a separate bill for its own work.

A match puts you in touch with the plant. A matching service suggests plants that fit your request and names each one, and the rest is between you and the plant you choose: the quote, the contract, the deposit and the follow-up. Nobody is paid to follow production for you, so you do that yourself or hire an inspection company for it.

A shelter hosts production under its own program. Mexico's export manufacturing program, IMMEX, is granted to legal entities resident in Mexican territory^[1]. One of its modes is the shelter, or albergue, which applies when one or more foreign companies supply it with the technology and the production materials, without the latter operating the Program directly^[1]. The decree is in Spanish, and both phrases are our translation. In other words, the foreign company provides the technology and the materials, while the Mexican company holds the program. That suits a business ready to run its own production in Mexico. A brand that wants finished goods by the order is usually choosing between the first two.

Who answers for a USMCA origin claim

Duty treatment under the USMCA is often part of the case for buying from Mexico. The rules of origin decide whether a product qualifies. A separate set of rules decides who vouches for it, and those rules are the same whichever arrangement you pick:

• Who can certify. A claim rests on a certification of origin completed by the importer, exporter, or producer^[2]. It can be given on an invoice or any other document, except an invoice or commercial document issued in the territory of a non-USMCA country^[3]. So if a go-between bills you from outside the three USMCA countries, the certification has to travel as a separate document.
• Who signs. It must be signed by a responsible official of the importer, exporter, or producer, or by the importer's, exporter's, or producer's authorized agent having knowledge of the relevant facts^[3]. A sourcing agent that is not itself the importer, exporter or producer can sign only as the authorized agent of one of them, and only if it knows the facts.
• When you need it. It must be in the possession of the importer at the time the claim for preferential tariff treatment is made^[3], so if you claim at entry, collect it before the goods are entered.
• Who is liable. The importer is responsible for the truthfulness of the claim and of all the information and data contained in the certification of origin^[4]. If CBP asks for the evidence behind a producer's or an exporter's certification, the importer must provide to CBP, or arrange for the direct submission by the exporter or producer of, information relied on by the exporter or producer in preparing the certification^[4].
• How long to keep it. The importer keeps its records for a minimum of five years from the date of importation of the good^[5].
• Where CBP checks. CBP can go to the source, including through verification visits to the premises of the exporter or producer in Mexico or Canada in order to request information, including documents, and to observe production processes and facilities^[6].

So the arrangement changes who gathers the paperwork, not who answers for it. With an agent, you collect the certification and its backup from the factory, with the agent's help. With a direct contract, you collect them from the plant yourself, and can ask whether the producer will answer CBP directly if asked, which the rules allow. In both cases the claim, and the risk that goes with it, stays with the importer. What a claim takes, and what it saves against a Chinese quote, are covered in Mexico vs China manufacturing.

What US customs does with the agent's fee

Goods of Mexico pay the extra duty in the US additional duties row of Mexico at a glance, above, unless they are entered duty free under the USMCA or fall under another exception listed in that row. That duty is charged as a percentage of the goods' customs value, so it matters whether an agent's fee counts as part of that value. A real buying agent's fee does not, as long as you pay it to the agent and not as part of the plant's price: CBP says bona fide buying commissions are not included in the transaction value of the imported merchandise^[7]. Whether an agent is real turns on who controls the purchase. Among the control factors CBP lists is this one: could the buyer purchase from the manufacturers without using the services of the agent (if the answer is no, the agent may be a selling agent)^[7]. Ask it of any go-between that wants every order to run through it, including one that offers to place your work with plants under its own export program. A written agency agreement helps, but CBP adds that it is more important to consider whether the parties are actually doing what they agreed to do^[7].

Whether or not the goods enter duty free, the fee belongs on the paperwork. US customs rules require each invoice of imported goods to set out all charges upon the merchandise itemized by name and amount, including freight, insurance, commission, cases, containers, coverings, and cost of packing^[8]. Keep the agent's bill separate from the plant's invoice, and give both to your customs broker.

Labor rights are enforced plant by plant

The USMCA adds a labor tool that works at the level of a single plant. Its rapid response mechanism provides for expedited enforcement of workers' free association and collective bargaining rights at the facility level^[9]. The US trade office says it provides any interested party with the opportunity to petition the U.S. government to start a case on the basis of sufficient, credible evidence that workers' rights are being denied at a specific facility in Mexico^[10], and a USTR fact sheet reports its use at facilities that span various industries, including automotive, garments, mining, food manufacturing, and services^[10]. Where a plant does not meet key labor obligations, the mechanism provides for the suspension of USMCA tariff benefits or the imposition of other penalties, such as denial of entry of goods from businesses that are repeat offenders^[9].

For a buyer, the risk sits with a plant rather than with Mexico as a whole. Whichever arrangement you use, ask how the workforce at the producing plant is represented, whether the plant has faced a case under the mechanism, and what the fallback is if its goods are held at the border.

Checking a Mexican company before you pay it

Mexico's own export rules show which checks matter, and most of them run through its tax authority, the SAT. The decree and the tax code are in Spanish, so the rule wording in this section is our translation. An IMMEX plant may send temporarily imported materials to other persons so that they carry out export sub-manufacturing operations^[1], but it first has to register those companies and show that each one holds a current positive opinion issued by the SAT^[1] on its tax compliance and is not on the lists published by the SAT under articles 69 and 69-B^[1].

One of those lists targets a risk every buyer should check for: a company that bills for goods it cannot make. Under Mexico's tax code, when the tax authority finds that a company has been issuing tax invoices without having the assets, staff, infrastructure or material capacity, directly or indirectly, to provide the services or to produce, sell or deliver the goods covered by those invoices^[11], the transactions on those invoices are presumed not to exist. Companies that cannot rebut the presumption are named publicly: the code says a list will be published in the Diario Oficial de la Federación and on the website of the Tax Administration Service^[11].

Before you pay a Mexican agent or plant, ask for its current compliance opinion from the SAT, check its name against those published lists, and ask whether it runs the same checks on any plant or workshop it sends your work to.

Which arrangement fits

• An agent fits when you want someone in Mexico to shortlist plants, follow production and help collect the origin paperwork, and the order is large enough to carry its fee.
• Getting matched fits when you want your own contract with the plant from the first quote and are ready to follow production and collect the origin paperwork yourself.
• A shelter fits when you plan to run production in Mexico and can supply the technology and the materials.

With an agent or a direct contract you are normally the importer of record, so the USMCA claim and its records are yours either way. For how agents charge and what to ask one before signing, see sourcing agent vs going direct to the factory.

We are not an agent. We introduce brands to Mexican manufacturers that fit the request, each one named, and the contract stays between you and the plant you pick; if no plant fits, we say so. Introductions are free for brands. Tell us the product, the quantity and whether it has to qualify under the USMCA, and the plants quote you directly.