Initiatives to stem illicit trade in Mexico

Throughout this chapter, we will share the experience of Mexico through the Tax Administration Service’s efforts to tackle illicit trade. The chapter is divided into four sections. Section 6.2 will focus on briefly looking at the history of the Tax Administration Service, including the issue of contraband at the border between Mexico and the United States. We will further explain how the General Administration for Foreign Trade Audit was created along with how it is structured and encompasses legal attributions. We believe that by analyzing the background of the situation, its origin, its development, the main interests of the actors involved, and specific target areas, we can later provide substantive criticism or applaud the programs and projects proposed by the Tax Administration Service. Section 6.3 intends to demonstrate how state power can curb illicit trade by implementing specific enforcement strategies, developing risk models, conducting effective investigations and performing the necessary intelligence to detect patterns of illicit trade. In addition, it describes how we plan and program audit and control procedures to verify the degree of compliance with tax and customs obligations. Basically we will describe the main programs implemented by the Tax Administration Service in Mexico. Section 6.4 will include positive outcomes through enforcement strategies and international examples of collaboration. A specific example is Enforcement Working Groups (working internationally), which entails the participation of specialized agencies in the private sector. We will illustrate how initiatives based on international cooperation and joint work between the Tax Administration Service and other federal agencies have achieved great results in combating illicit trade. Finally, Section 6.5 will address the Mexican perspective and its priorities regarding illicit trade. Although many achievements have been made, there are many areas of opportunity, including policy recommendations, which require our undivided attention and are currently being considered by Mexico’s government.