What Is a Proforma Invoice? Is it Different from the Commercial Invoice?

Often used for commercial purposes in international transactions, it’s a typical document in global trade. However, it possesses some subtle but important differences from the Commercial Invoice, and getting to know them can assist you on preventing forthcoming hassles.

What Is a Proforma Invoice?

The proforma invoice is a commercial document often used in international transactions. It is basically a preliminary bill of sale (or commercial invoice) provided by an exporter, prior to a sale/shipment. In this document the seller will be informing the buyer on the most important information for shipping: the price, kinds and quantities of goods and usually includes the seller’s bank details to request payment.  Some other specifications can be included, such as the weight, size, and other cargo’s details. It not only acts as a contractual offer (which may be accepted by buyer´s transmission of a purchase order), but it is also intended to be exactly reproduced in the final commercial invoice, so that the buyer receives no surprises as regards, either the goods or the price.

In most countries the Proforma Invoice is required for issuing an import license or a foreign exchange allowance. If a letter of credit is the case, this document is frequently used to inform the buyer of the total amount for which the letter of credit has to be opened.

What Is the Difference Between the Proforma Invoice and Commercial Invoice?

These are very similar documents and very often interpreted as if they were the same. Nevertheless, there are some slight differences and it is important to get to know them so that you can evade future hassles.
Well, the main difference may be that the final quantity on the Commercial Invoice can be different. Furthermore, the quantity of products requested (from the Proforma Invoice) is often different to the actual quantity of goods that have been shipped (Commercial Invoice), but this is commonplace in the international trade realm. On the other hand, this difference in quantity of products supplied can be due to many reasons. Undoubtedly, the most usual is because suppliers can have manufacturing issues. Other reason is that the suppliers did not correctly plan how many products would actually fit inside shipping containers. 

So, after shipping the cargo, buyers, Freight Forwarders and Customs will require a set of shipping documents for clearing the goods into the country of import. Then, the seller will provide the buyer with a “set” of shipping documents. This includes a Bill of Lading, Commercial Invoice, Packing List and any other shipping documents which might be required.
Ultimately, both (Proforma and Commercial Invoice) are commercial documents and can be used for the very beginning of the transaction. However, the Proforma Invoice does not claim legal appraisal. Just the Commercial Invoice is considered of legal value.

Information for Including on Your Proforma Invoice

  • Exporter/seller information (name, address, phone number, etc.);
  • Importer/buyer information (name, address, phone number, etc.);
  • Method of dispatch – road, rail, air or sea freight;
  • Type of shipment – FCL, LCL, Breakbulk or other;
  • Port of loading (POL) and Port of discharge (POD);
  • Reference number and date;
  • Delivery date
  • Terms of payment
  • Product descriptions – including item codes, product descriptions, Unit Quantity, Unit Type, Price etc.;
  • INCOTERM – FOB, FCA, EXW, etc.;
  • Any additional information about the cargo;
  • Bank details (the Proforma Invoice can include bank details requesting the buyer to make a payment);
  • Name, date and signature of authorized company representative.

Why the Packing List is Important

Most of the time, it’s considered a type of appendix to the Commercial Invoice. Even though it is very often reluctantly issued, this document contains valuable details about the cargo, becoming an important document for the exporter, importer and customs broker.

But What is a Packing List?

In short, the packing list is a commercial document used in international trade which includes details about the contents of a package.
It is designed to let transport agencies, customs authorities, and customers know the contents of the package. Such details help each of these parties handle the package accordingly. It is also known as bill of parcel, unpacking note, packing slip, delivery docket, delivery list, manifest, shipping list, and customer receipt.

It is Not Legally Required

In many countries the packing list is not mandatory by the customs. Notwithstanding that fact, because it has some important details, it is highly recommended including the packing list in your shipment, once it makes the import/export process much easier for the shipper and customs.

So Why is It Important?

As we have seen, the packing list might not be mandatory in your shipment. Even though, it can be the go-to document for importing or exporting. Check out some of the reasons:

  • It contains all the cargo details (weight, quantity, etc.), therefore, it is a count for the product that is being released;
  • It serves as a lead for the receiver/buyer when checking the received product;
  • It is used to create a booking with the international freight forwarder (or directly with the carrier), as well as an evidence of the international Bill of Lading.
  • It can be used as an evidence for the inland bill of lading;
  • It contains the required information for issuing the Certificate of Origin;
  • It backs issuance of the MSDS (Material Safety Data Sheet) if the goods are declared hazardous.
  • It serves as proof of a Material Safety Data Sheet, in the case that goods are deemed hazardous or dangerous.
  • It supports the customs broker’s checklist procedure, when comparing all the documents information;
  • It can be used as an auxiliary document for reimbursement under a LC (Letter of Credit).

Filling Out Your Packing List

Because this document is all about the cargo itself, it is important to include as much details about the shipment as possible. Check out some important details:

  1. Packing list number (normally the same as the Commercial Invoice);
  2. Commercial invoice reference;
  3. Issuance date;
  4. Order number;
  5. Exporter/seller information (name, address, phone number, etc.);
  6. Importer/buyer information (name, address, phone number, etc.);
  7. Notify party’s information;
  8. Cargo’s origin address;
  9. Cargo’s destination address;
  10. Total number of packages (boxes, cartoons etc.);
  11. A detailed description of each package;
  12. Unit weight (per box, case, cartoon, etc.);
  13. Unit volume (per box, case, cartoon, etc.);
  14. Total volume of the shipment (CBM, dimensions, etc.);
  15. Total gross and net weight.

An Introduction to Product Sourcing in Mexico

Sourcing products in Mexico can open up new opportunities for enterprises and can be a great alternative to China. Here are some key findings we’ve discovered along the way.

Location and Convenience 

Being a US neighboring country, Mexico is usually an attractive country for foreign investment, starting from SMEs to large corporations. Many North American companies are seeking alternatives to China as a result of COVID-19, and usually the first country that’s coming to mind is Mexico due to its proximity to the US and Canada but also because of the ease that the United States-Mexico-Canada-Agreement (USMCA) provides. Although labor costs may be slightly higher than those offered by China, everything’s usually balanced out at the end when comparing shipping costs and shipping times. For those seeking to improve their logistics and reduce transportation costs, thousands of “maquiladoras” (large factories) can be found in border cities like Tijuana, Baja California.

Industries and Products

The biggest and most mature industries in Mexico are:

  • Automotive
  • Maquiladoras
  • Food
  • Electronics
  • Aerospace
  • Metal mechanics
  • Textiles
  • Furniture
  • Clean Energy 
  • Furniture
  • Medical Devices

This means that manufacturers of almost any product can be found in Mexico and if it’s not being produced yet, many are willing to explore new business opportunities to expand their portfolio. Some industries like the automotive and textile, are more mature than others but every industry listed above is always experiencing constant growth. Larger foreign corporations can have the certainty that there are experienced factories across Mexico ready to produce in larger volumes with the expertise to elaborate high quality products that meet the demanding expectations of their clients. For smaller enterprises or SMEs there are also smaller producers willing to do business without having the pressure of mass production. No matter the size of the project, there are hundreds or even thousands of options for every industry in Mexico that are ready to take on any project.

Finding Suppliers Online

When starting the initial search for providers in Mexico it’s extremely important to take into account that there are thousands of options but they’re not as easy to find due to their weak digital presence. In Mexico, especially in the most industrialized cities, there are a variety of factories and industries to choose from, but their main marketing source is word-of-mouth or recommendation based. This means that when someone starts with the typical Google search, it’s probable that the results will consist of giant corporations. Usually it’s the big players that’ll translate their websites in English to attract foreign business and the smaller ones usually have their content in Spanish only, which can ultimately lead to less options. However, this doesn’t mean that it’s impossible to come across different options, but it’s necessary to know the various methods used to attract customers. Many businesses still run 1.0 internet websites and some even use Facebook entirely for business. Sure, this may seem a bit informal but it turns out that Mexican suppliers are very humble and trustworthy.

Cultural Business Communication

In Mexico the business culture is more traditional and antiquated than in more developed nations and direct face-to-face interactions are preferred. Mexico has obviously globalized along with the rest of the world, but faster responses can be expected by phone or even better in person, than via email. Gaining mutual trust is a determining factor and personal relationships tend to lead to better results  It’s also important to note that the concept or sense of time is different in Latin America compared to “Western Countries.” Generally speaking, Mexicans are more flexible with time and a perfect example of this is the acceptability of being up to 30 minutes late to a meeting or not sending a quick response to email requests. Initial processes might take longer overall, but this isn’t usually a limitation, and instead just a different way of working but once trust is established these differences can easily be solved.

Sourcing Agents

Even though it’s possible for foreigners to navigate through Mexican suppliers, the entire experience can be improved through a sourcing agent. Someone who knows the culture and the language can easily eliminate the cultural or language barriers and make processes much quicker. This doesn’t mean that Mexican suppliers don’t speak English or can’t adapt to other cultures. Many actually speak English and the culture as a whole is very welcoming to foreigners. They tend to get very excited about collaborating with foreign companies and easily adapt to their needs. Having someone to help with the entire process simply makes things more efficient and it helps avoid misunderstandings.

What Is a Commercial Invoice

As a legal document, it is one of the most important in international trade. The Commecial Invoice is provided by the shipper and serves as a contract and an evidence of sale between the buyer and seller.

The commercial Invoice contains information about the shipment, including mainly a description, the value of the goods and also the shipper information. A commercial invoice is part of the documentation for importing or exporting and it is, therefore, required for customs clearance purposes to calculate and assess the duties and taxes due.

But make no mistake, unlike the B/L (Bill of Lading) the commercial invoice does not indicate the ownership of goods nor does it carry a title to the goods being sold.

The commercial invoice is mainly used for detailing the price, value, and quantity of the goods that are being sold. It should also include the trade or sale conditions agreed upon by both buyer and seller of the transaction being carried out.

It can also be necessary for payment purposes (e.g. in the event of payment via Letter of Credit) and may need to be issued by the buyer to its bank to instruct the release of funds to the seller for payment.

Different Types of Invoice

The commercial invoice is considered the official document when exporting or importing. It means that the information detailed in the CI (Commercial Invoice) should be the final information. However, it can be adjusted if needed.
Besides the commercial invoice, there are other documents, which are not considered official documents, therefore, they can’t be used for dealing with the customs, for example. The two most popular documents are: Pro-forma Invoice and the Purchase Order.

Pro-forma Invoice — It’s very similar to an estimate or a quote. The pro-forma invoice gives your buyer an estimate of the costs of products or services they’re purchasing.

Purchase Order — It contains the details similar to those found on an invoice, but it’s issued by a buyer to serve as an offer to the seller.

Both the Pro-forma Invoice and Purchase Order are considered “Pre-Invoice”, they are a type of “commercial invoice draft”.

Be Aware When Filling Out Your Commercial Invoice

Because it is a legal document, it is legally required to fill it out accurately. If there is any failure to do so, it might result in lengthy hold-ups and shipping delay. Remember that the CI is used for customs declaration purposes, so any misinformation may lead to underpayment of the correct amount of duties and taxes due and their legal ramifications.

Information Required for Shipping

As we’ve noticed, filling out the commercial invoice is clearly an important task. Given that, it is extremely important to make sure that the information described is clear and precise.

Negotiation Field

  • Invoice number
  • Invoice date
  • Order number
  • Total sale amount
  • Currency
  • Payment instructions

Exporter and Importer Details

  • Exporter/seller information (name, address, phone number, etc.)
  • Exporter/seller’s tax identification number (eg. VAT, EORI, etc.)
  • Importer/buyer information (name, address, phone number, etc.)
  • Importer/buyer’s tax identification number (eg. VAT, EORI, etc.)
  • Notify party’s information

About the Shipping of the Merchandise

  • Bill of Lading number
  • Forwarding agent
  • HS code
  • Clear description of goods (no. of packages, units, weight, etc.)
  • Incoterm under which the merchandise has been sold
  • Origin of merchandise
  • Insurance
  • Date of exportation, means of transport, and final destination
  • Shipper’s signature
Sample Commercial Invoice

What Is a Bill of Lading

It is considered the most important shipping document concerned to the import and export process.  Nevertheless, most shippers do not quite understand its meaning or the types of bill of lading that are issued along the supply chain. 

The bill of lading (B/L or BoL) is a highly important paper in the shipping and logistics industry.  It is a legal document issued by a carrier to a shipper that details the type, quantity and destination of the goods being carried.

It provides evidence or proof of shipment, indicating the owner of the cargo. Also, the bill of lading is an evidence of Contract of Carriage, receipt of goods and document of title to the goods. Hence, the owner of the cargo (the holder of the B/L) has the legal rights to claim the goods or arrange transfer ownership of it to another party in the supply chain.

Authorized Signature

This document must be signed by an authorized representative from the carrier, shipper, and receiver and always be conducted with the shipped goods.

It can be issued as Negotiable and Non-Negotiable

Negotiable: a straightforward instruction is provided to make the delivery of the goods to anyone having the possession of the original copy of the BL, which indicates the title and control of the freight. As a negotiable bill, the consignee/notify or its agent has to present an original copy of the B/L at the discharge port for customs purpose, otherwise, it will not be released.

Non-negotiable bill:  In this case, it indicates a specific consignee/notify to whom the cargo will be shipped and delivered. Nevertheless, it does not serve the ownership of the goods. Here the assigned consignee/ notify can claim the cargo by confirming their identity.

Categories of B/L

There are several subdivisions and formats of bill of lading that carriers can issue along the supply chain. Some of the most used categories are:

  1. House Bill of Lading
  2. Surrender Bill of Lading
  3. Straight Bill of Lading
  4. Master Bill of Lading
  5. Blank Bill of Lading

What is “Freight Collect” and “Freight Pre-Paid”?

The bill of lading will always be issued on “Freight Collect” or “Freight Pre-Paid” terms.  These terms refer to which party will be paying for the International Freight costs.

Freight Collect: the freight charges will be ‘collected’ by the Consignee.
Freight Pre-Paid: the rates will be ‘pre-paid’, which means that the shipper will be billed for the freight charges.

Note that the carrier must receive the payment of the shipping charges (by either party) before they release the cargo to the Consignee/Notify.

To make it easier to understand, we have some common examples upon INCOTERMS for each type of term:
 
Common INCOTERMS for Freight Collect: EXW, FCA, FAS, FOB;
Common INCOTERMS for Freight Pre-Paid: CFR, CIF, CPT, CIP, DAT, DAP, DDP.

Bill of Lading information:

Right below you can find an example format and the image of a bill of lading:

  • Shipper’s details: company name, address and contact;
  • Consignee: company name, address and contact;
  • Notify Party:  normally, the Notify party is the same as Consignee, hence it is marked as “same as consignee”.  This field can be used to notify any third parties that need to be made aware of the shipment updates, progress and delivery;
  • Carrier: company name, logo, address, contact details, Terms and Conditions of carriage;
  • B/L Number – the unique B/L number issued by the Shipping Company or Freight Forwarder that is arranging the carriage of the cargo;
  • Vessel Name and Voyage number;
  • Place of Receipt, Port of Loading, Port of Discharge, Place of delivery, Final destination;
  • Container Number, Seal Number, Shipping Marks & Numbers, Description of goods, Gross Weight, Cubic Measurement (m3), Special Instructions (such as cargo classification);
  • Payment Terms: Freight Prepaid or Freight Collect;
  • INCOTERM: FOB, EXW, FCA, etc.;
  • Place and Date of Issue, Signature;

Terms and Conditions of Carriage (usually on subpages).

What Does a Customs Broker Do?

Due to the complexity of importing and exporting goods, many companies hire customs brokers to act as their agents.

Importing and exporting goods are activities which help to maintain the countries’ economy and provide the population with the things they need. These global markets are what prevent people from seclusion and make our lives easier and more comfortable.

In order to regulate these transactions every country has the responsibility to create its legislative structure, controlling what comes in and out. The customs department is the one in charge to assure that what is coming in and out is duly allowed. Here is where the customs broker comes into action.
The customs broker (also known as Customs Brokerage) is a third-party company which works with these major departments to ensure their clients are not breaking any rules. They will act on behalf of the importer/exporter, preparing and submitting all the required documents for clearing goods through customs.

Why Should You Use a Customs Broker?

Notwithstanding that in some countries there is no legal requirement to use a customs broker to clear your goods, it is highly recommended. Why? Let’s imagine you’ve just bought your first car and its engine has broken down. Regardless of your bad luck, you probably wouldn’t consider fixing it by yourself, right? First because you have no knowledge to do it, and also because you could cause even more damage to the engine — once you don’t understand its intricacies. The most sensible thing to do here is to call a mechanic — someone who understand the engine’s complexity — and have him fix the engine for you. Well, the customs broker is the one who deals with the intricacies of the government’s regulations on your behalf. They will be in charge of tackling all the paperwork, securing passage through a customs examination in the shortest possible time, and minimizing the hassle and risks of loss at the lowest possible cost.

How is It Charged?

Normally customs brokers will charge a “brokerage fee”, this fee is usually determined as a percentage of the value of the imported shipment. There is also the possibility to negotiate a set rate/fee between the importer and the customs broker, based on complexity of customs entries, frequency of customs entries and customs value of imported goods.

The United States-Mexico-Canada (USMCA) Agreement – In Effect on 1 July 2020

On 24 April 2020 the Trump Administration notified Congress that the United States Mexico Canada (USMCA) Agreement will take effect on 1 July 2020. We give a summary of its key provisions and what its potential effects might be.

A. History – NAFTA and the USMCA

The USMCA is the replacement for the North Atlantic Free Trade Agreement, the trilateral trade agreement that was signed in 1992 by the United States, Mexico, and Canada. The NAFTA agreement eliminated tariffs on most products traded between the three countries and liberalised trade in agriculture, textiles, and automobile manufacturing. This integrated the three economies closely together and led to Mexico becoming a ‘nearshoring’ destination for many US and Canadian companies. The agreement also focused on protecting intellectual property, establishing dispute resolution mechanisms, and implementing labour and environmental safeguards.

In 2017, President Trump demanded that the NAFTA agreement should be re-negotiated as part of his plan to bring more jobs back to the US. He was particularly critical of Mexico’s low labour costs which he saw as giving an unfair trading advantage to Mexico. After he threatened to withdraw the US from the agreement, Mexico and Canada agreed to renegotiate the agreement. On November 2018, the three countries signed the final draft of the 2,325 page USMCA agreement which was to take effect in 2020.

The last 2 years were extremely turbulent, with Canada and the US placing retaliatory tariffs on one another in 2018, and the USA threatening in 2019 to raise tariffs against Mexico should they fail to stem the inflow of Central American migrants trying to enter the US through Mexico. However on 10 December 2019, the three nations agreed to additional amendments and on 16 January 2020, the US Senate approved the final USMCA.

B. What does the USMCA do?

The USMCA’s provisions address these key areas:

  • Intellectual property protection and digital trade
  • Financial services and currency regulation
  • Labor rights
  • Environment protection
  • Manufactured goods
  • Agriculture products

We summarise the changes that are likely to affect importers the most.

  1. De Minimis Threshold
  • The UMSCA increases the tax-free threshold for Mexico and Canada. Mexico will provide USD $50 tax free de minimis while Canada will raise their de minimis level from C$20 to C$40. Mexico will also allow duty free shipments up to the value of USD$117. The US’ threshold reamins at USD $800. As most small to medium size businesses have shipments exceeding these de minimis thresholds, it is unlikely that the new changes is going to significantly change the existing customs procedures and taxes they face.

2. Automotive Rules of Origin and Regional Value Content

  • In order to qualify for zero tariffs, the total North American content of a vehicle must be 75% (up from 62.5% under the NAFTA agreement). 70% of all the steel, aluminium and glass used in the production of the automobile must originate in North America.
  • A proportion of the vehicle must be produced using an average labor wage of USD $16/hour (this will require Mexico to ensure that a minimum wage of USD$16/hour is instituted).

3. Certification of Origin

  • Importers will not be required to complete a formal certification document and can instead use informal documentation e.g. commercial invoices. These can be completed by the importer, exporter or producer.

4. Intellectual Property

  • The general provisions goes towards strengthening copyright and patent protections for US creators and innovators. They also aim to curtail digital piracy and illegal copying of digital content.

The rest of the USMCA provisions concern enhancing environment protections, increasing the US’ access to Canada’s dairy markets, and requiring Mexico to make it easier for workers to form unions.

How to find your USA-Mexico tariff rate

Here’s a short guide to help you with finding the tariff rate for importing from Mexico to the USA, and how to compare it against the current US-China tariffs.

When sourcing from Mexico, the first thing you’re going to want to know is what your tariff rate is going to be. If you’ve been sourcing from China, then you’re probably having a wild rollercoaster time with trying to navigate through the US’ constantly changing tariffs on Chinese imports. At present, the US and China have reached a Phase 1 trade deal which still leaves most Chinese imports with tariff rates at 25%. The Phase 1 trade deal operates mainly to reduce tariffs on agricultural goods from 15% to 7.5%. Weaver and Tidwell L.L.P have prepared an excellent summary table which links you to the official lists of affected imports.

Generally tariff policy announcements can be found on the Office of the United States Trade Representative’s website and actions taken China is contained in the ‘‘Section 301 Investigations’ section. The USA’s tariff rates and import-related information can be found on the United States International Trade Commission’s Dataweb.

As these websites can be fairly tedious to navigate through, I thought I’d prepare a guide to show you where to get your tariff rate for importing in the US. We’re going to focus on finding the US’ tariffs on Mexican products.

Finding the US tariff rate on Mexican products

  1. Go to the UITC’s Dataweb – Once there, go to ‘ HTS Search’

HTS stands for ‘Harmonised Tariff Schedule of the United States’ and it’s the US’ system for classifying goods and assigning each good with a classification number e.g. apparel made out of reptile leather has the HTS code 4203.10.20. You use this code to find out your tariff code.

2. Find your product’s HTC code

If you don’t know your product’s HTS code, then you may want to consult with a customs agent. It’s fairly straightforward if you were importing leather shoes (which has its own HTS code), but a bit more ambiguous if you had a product which could fall into different HTS categories.

For example, you have a belt that has a mother-of-pearl buckle. It could be classified as ‘accessories’ (HTS 3926.20), ‘women’s belts of leather or of composition, each valued at $7.00 or more’ (HTS 9902.16.64, if it was a women’s belt made of leather).The US Customs though classified it as 9601.90.2000 – ‘worked ivory, bone, tortoise-shell, horn, antlers, coral, mother-of-pearl and other animal carving material, and articles of these materials (including articles obtained by molding): other: worked shell and articles thereof’ – due to its mother-of-pearl buckle.

To find your HSC classification code, you can do the following:

  • Primary Method – Using DataWeb’s HTS Search: In HTS Search, simply key in a few keywords that describe your product and you will get a list of possible classification categories. Try to keep your terms as broad as possible in the beginning before refining it further. Here’s an example for apples:

Note that the HTS Database has been updated to reflect the US’ 2019 tariffs on Chinese imports. To get the most recent changes to tariff rates in light of the continuing US-China trade negotiations and find out whether your product may be affected, you can go to this official page.

3. Now that you’ve found your HTS code, you’re pretty much there!

Once you’ve keyed in your HTS code, you’ll find a table with ‘Rates of Duty’ listed on the right. That’s where you’ll find your tariff rate! If your product qualifies for special tariff rates due to trade agreements (read: sometimes free), you’ll find these rates in the ‘Special’ column.

In the table above, ‘MX’ stands for Mexico and you’ll see that for apparel items, there are no tariffs if the products come from Mexico! This is because the North Atlantic Free Trade Agreement, just replaced by the United States Mexico Canada Agreement, reduces or eliminates tariffs on imports from Mexico to the US. This is one of the major reasons why Mexico is particularly advantageous as a ‘Make in Mexico’ location.

The ‘General’ column sets out the tariffs that will apply generally unless there is a special trade agreement that sets out different tariff rates. That means that if you do not see ‘MX’ in the ‘Special’ column, you can expect the General rates to apply. You don’t have to worry about Column 2 as that does not apply to Mexico. For more information about how the ‘Rates of Duty’ table operates, you can read this document.

Mexico COVID Update – April 13, 2020

We update you on the current COVID-19 coronavirus situation in Mexico, with particular regard to the effect on industry activities.

As of 13 April 2020, the number of COVID cases in Mexico stands at 4,661 with Mexico City having the highest number of confirmed cases (1,328). The rest of the states in Mexico average around 200 cases. So far there have been 296 deaths.

Current COVID Measures in Mexico

On 31 March 2020, the Mexican federal government declared a national health emergency and issued a decree which only permits essential activities to be undertaken. Non-essential activities are to be suspended until 30 April 2020.

There is quite an extensive list of permitted essential activities but here is a summary of those relevant to business and to industry:

  • Activities related to the medical sector, including the manufacturing of supplies, medical equipment and health care technology. This includes those parties involved in the supply chain for such services and products.
  • Infrastructure, transportation and logistics services e.g. energy, water, cargo and passenger transportation, airports, ports, are permitted.
  • Chemical industries, agriculture, and businesses producing cleaning products are permitted to continue.
  • Activities that are in the fundamental sectors of the economy, the suspension of which could have irreversible effects on the economy.

Individual states have also adopted social distancing measures such as:

  • Closing non-essential businesses e.g. restaurants and cafes, movie theatres.
  • Requiring people to stay at home and not travel for non-essential purposes.

Travel restrictions

The US and Mexican governments have agreed that US citizens and lawful permanent residents can return to the US. Individuals traveling for essential reasons i.e. to work in the US, engage in lawful cross-border trade, are also permitted to enter the US. Please note however, that individual states in the US will have their own quarantine requirements.

Travel to Mexico is not advised. There are quarantine requirements for international visitors arriving via air. While it is still possible for US citizens to enter Mexico through the land crossings, we also do not recommend this because the border controls are in a state of confusion at the moment. It will also be hard to maintain social distancing. Domestic travel within Mexico is also not advised.

Impact on business and industry

Businesses had already implemented their own COVID measures before the federal government made the emergency declaration. Many instructed their staff to work from home. In some factories, examples of the COVID measures implemented were: working with a reduced workforce, checking the temperature of any person before he or she enters the facility, instructing staff to maintain distance from one another and also reconfiguring the workplace to enable social distancing, and getting the staff to wear protective gear.

As the federal government’s declaration has significant ambiguities on which activities are considered ‘fundamental to the economy’, many factories and industries continue to function and maintain a ‘business as usual’ trading approach as much as possible. From what we can see, on the ground level, individual businesses are making their own decisions on whether they want to continue operating. Some companies, like Endeavour Silver, have decided to suspend their operations until 30 April 2020.

We will continue to update our readers of the COVID situation.