Choosing the Right Valuation Method for MVE: Decision Guide

Why valuation method selection matters for MVE

Format E2 (MVE) requires you to declare which valuation method was used to determine the customs value of your imported goods. Mexico follows the WTO Customs Valuation Agreement, which establishes six methods applied in sequential order. Declaring the wrong method — or failing to justify why Method 1 doesn't apply — is one of the top reasons for customs audits and MVE rejections.

Method 1: Transaction Value (used in 90%+ of cases)

The transaction value is the price actually paid or payable for the goods when sold for export to Mexico, adjusted for additions (freight, insurance, royalties, assists) and permitted deductions. This is the primary method and must be used unless specific conditions prevent it. You can use Method 1 when there is a genuine sale, the price is not influenced by conditions that cannot be quantified, and the buyer and seller are not related — or if related, the relationship did not influence the price.

When Method 1 doesn't apply

• No sale: Goods sent on consignment, free of charge, or for processing/repair.
• Related parties: Buyer and seller are related and the relationship influenced the price.
• Conditions on sale: Restrictions on use/disposition, price depends on conditions that can't be valued, or proceeds of resale accrue to seller.
• Insufficient documentation: The transaction price cannot be properly documented or verified.

Method 2: Transaction Value of Identical Goods

If Method 1 doesn't apply, use the customs value previously accepted for identical goods (same in all respects: physical characteristics, quality, reputation) exported to Mexico at approximately the same time. Adjustments are made for commercial level and quantity differences. This method requires access to historical import data for comparison.

Method 3: Transaction Value of Similar Goods

Similar to Method 2 but uses goods that are not identical but closely resemble them in characteristics, components, and function. The similar goods must be commercially interchangeable with the goods being valued. Like Method 2, this method requires historical data and is adjusted for commercial level and quantity.

Methods 4, 5, and 6: Deductive, Computed, and Fallback

Method 4 (Deductive): Based on the selling price of identical/similar goods in Mexico, minus deductions for profit, taxes, duties, and transport. Method 5 (Computed): Based on cost of production plus profit and general expenses. Method 6 (Fallback): Flexible application of any previous method with reasonable adjustments. Methods 4 and 5 can be applied in reverse order at the importer's request.

Decision flowchart

1. Is there a genuine sale for export to Mexico? → Yes → Are buyer and seller unrelated (or related but price uninfluenced)? → Yes → Use Method 1.
2. No genuine sale or relationship influenced price → Are there recent imports of identical goods? → Yes → Use Method 2.
3. No identical goods → Are there recent imports of similar goods? → Yes → Use Method 3.
4. No similar goods → Can resale price in Mexico be determined? → Yes → Use Method 4.
5. No resale data → Can production costs be obtained from the producer? → Yes → Use Method 5.
6. None of the above → Use Method 6 (flexible application with documentation).

How Camtom helps with method selection

Camtom's MVE module includes an interactive decision tree that guides you through the method selection process. Answer a series of yes/no questions about your transaction and Camtom will recommend the appropriate method, pre-fill the justification section of Format E2, and flag any documentation you need to support your choice.