WORLD TRADE
ORGANIZATIONG/SCM/Q3/COL/22
17 October 2003
(03-5511)
Committee on Subsidies
and Countervailing MeasuresOriginal:  Spanish
SUBSIDIES
Requests Pursuant to Article 27.4 of the Agreement on
Subsidies and Countervailing Measures
Questions Posed by Ecuador
The following communication, dated 14 October 2003, has been received from the Permanent
Mission of Ecuador.
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DRAFT DECISION ON EXTENDING THE TRANSITION PERIOD FOR COLOMBIA'S
SUBSIDY PROGRAMMES
Questions relating to Colombia's compliance with its obligations under the Decisions of the
Committee on Subsidies and Countervailing Measures, dated 13 December 2002, documents
G/SCM/93 and G/SCM/94.
A. SPECIAL IMPORT -EXPORT SYSTEM FOR CAPITAL GOODS AND SPARE PARTS (SIEX)
1. Colombia's 2002 notification regarding SIEX (document G/SCM/N/95/COL) makes no
reference to the fact that the Colombian subsidization programme also provides for the deferred
payment, over a period of five years, of the value-added tax (VAT) generated by imports of capital
goods and spare parts and components intended for or used in the installation, expansion or relocation
of the relevant production units to be used in the production of export goods, as stated in thenotification made by Colombia for the year s 1998, 1999 and 2000 (document G/SCM/N/60/COL).
Could Colombia explain what measures it is taking, independently of Resolution No. 011,
with regard to the dismantling of  subsidies granted under SIEX, particularly those relating to the
deferred payment of VAT for a period of five years?
Could Colombia explain in more detail, and provide statistical data on, the amount of the
benefit which Colombian exporters are receiving from the five-year deferment of the payment of
value-added tax, as this information is missing from the notification for 2002, document
G/SCM/N/95/COL?
Could Colombia explain the second article of Resolution No. 011, which empowers the
competent authorities to give annual approval to  existing programmes or programme modifications
applicable to capital goods and spare parts, up to the annual value of the subsidy notified by Colombia
for 2000 to the Committee on Subsidies and Countervailing Measures?G/SCM/Q3/COL/22
Page 2
Is it to be understood that the provision contained in the second article of Resolution No. 011
also covers the deferred payment, for up to five years, of the value-added tax on imports of capital
goods, spare parts and components?
2. Section 8 of Colombia's notification for 2002 (document G/SCM/N/95/COL) states that
subsidies under the SIEX programme shall remain in force until 31 December 2006, in accordance
with paragraph 10(i) of the Committee's Deci sion (document G/SCM/94).  However, without
prejudice to Colombia's rights under the aforementioned decision, what the latter says is that the
transition period for the elimination of the export subsidies shall not be extended  beyond 2006,
provided that the Committee, in its review, verifies compliance with the phasing-out commitments
accepted by Colombia and with the purposes and conditions set out in paragraphs 1(d) and 1(e) of the
Procedures for Extensions (document G/SCM/39).
Could Colombia explain what subsequent measures it will take to phase out the SIEX in
accordance with the commitments undertaken in document G/SCM/94?
3. Resolution No. 011 provides for exceptions to the conditions laid down in the first and second
articles of the Resolution with regard to applications under the SIEX involving final export goods inthe services sector.
Could Colombia provide details of what goods are included in the services sector and of the
considerations justifying the exclusion of such goods from the Committee's Decision contained in
document G/SCM/94?
B. 
FREE -ZONE REGIME (ZF)
1. Section 4 of the notification submitted by Colombia for the year 2002 (document
G/SCM/N/99/COL) refers to a resolution, No. 1001, amending the free-zone regime.
Could Colombia provide the text of the above-mentioned resolution and explain to what
extent, if at all, and without reference to the draf t decree, the resolution conforms with the provisions
of document G/SCM/93 of 17 December 2002?
2. Section 5 of Colombia's notification for 2002 (document G/SCM/N/99/COL) lists among
other subsidies the non-application of the remittance tax on earnings from industrial activities carried
out in free zones, a subsidy which is also included in the notification submitted by Colombia for the
years 1998, 1999 and 2000 (document G/SCM/N/60/COL).
Could Colombia explain for what reason the draft Presidential Decree contains no measures
for the phasing out of the subsidies granted under the free-zone (ZF) regime in relation to the non-
application of the remittance tax on earnings from industrial activities carried out in free zones?
Could Colombia provide details and statistical data on the amount of the benefit which
Colombian exporters are receiving from the non-application of the remittance tax on earnings fromindustrial activities carried out in free zones, as this information is missing from the notification for
2002, document G/SCM/N/99/COL?G/SCM/Q3/COL/22
Page 3
3. Section 8 of Colombia's notification for the year 2002 (document G/SCM/N/99/COL) states
that subsidies under the free-zone (ZF) regime shall remain in force until 31 December 2006, in
accordance with paragraph 10 of the Committee's Decision (document G/SCM/93).  However,
without prejudice to Colombia's rights under the a bove-mentioned Decision, what the latter says is
that the transition period for the elimination of the export subsidies shall not be extended  beyond
2006, provided that the Committee, in its review, verifies compliance with the phasing-out
commitments accepted by Colombia and with the purposes and conditions set out in paragraphs 1(d)
and 1(e) of the Procedures for Extensions (document G/SCM/39).  In this connection, Colombia has
merely submitted a draft Presidential Decree for the reform of its legislation on free zones.
Could Colombia explain why, having failed to comply with the time-limits established in
paragraph 10 of the Committee Decision (document G/SCM/93), which provides for the obligation toreform the relevant legislation by 30 June 2003, it prejudges the Committee's Decision regarding
possible extension of the transition period for the elimination of subsidies under the free-zone (ZF)
regime until 31 December 2006, as is clear from the draft Presidential Decree submitted?
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