WT/DS461/21  
16 March  2017 
(17-1493) Page: 1/7 
 Original:  Spanish  
 
  COLOMBIA – MEASURES RELATING TO THE IMPORTATION  
OF TEXTILES, APPAREL AND FOOTWEAR  
RECOURSE TO ARTICLE 21.5 OF THE DSU BY PANAMA  
REQUEST FOR CONSULTATIONS  
The following communication, dated 9 March  2017, from the delegation of Panama to the 
delegation of Co lombia and the Chair person  of the Dispute Settlement Body, is circulated in 
accordance with Article 21.5 of the DSU . 
 
_______________  
 
 
My authorities have instructed me , with reference to the above -mentioned case, to accept 
Colombia's request for consulta tions under Article  21.5 of the DSU , dated  27 February  2017, and 
at the same time to request joint consultations on certain implementing measures not included in 
Colombia's request for consultations, pursuant to Article 21.5 and Article 4 of the Understand ing 
on Rules and Procedures Governing the Settlement of Disputes (DSU), Article 19 of the Agreement 
on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (Customs 
Valuation Agreement), and Article XXII of the General Agreement  on Tariffs and Trade 1994 
(GATT  1994).  
On 22 June 2016, the Dispute Settlement Body (DSB) adopted the Appellate Body report 
and the Panel report , as modified by the Appellate Body, in the case Colombia – Measures Relating 
to the Importation of Textiles, A pparel and Footwear (Colombia – Textiles ).1 The Panel and the 
Appellate Body found that Colombia's compound tariff, contained in Decree No. 456/20142, was 
inconsistent  with Article II:1(a) and II:1(b), first sentence, of the GATT 1994 , since in certain 
instances  it exceeded  the bound tariff rates in Colombia's Schedule of Concessions for imports of 
textiles and footwear classified in Chapters 61, 62, 63 and 643 of Colombia's Customs Tariff  
(Decre e No.  4297/20114). Consequently, the DSB recommended that Colo mbia bring the offending 
measure into conformity with its obligations under the GATT 1994.5 
Pursuant to  Article 21.3(c) of the DSU, on 8 August  2016 Panama requested that the 
reasonable period of time for compliance be determined through binding arbitratio n.6 During that 
arbitration, Colombia stated that the implementation process  would consist of the joint 
implementation of tariff measures and anti-money laundering  customs measures , to be 
implemented by issuing "two 'mutually supportive decrees ' as part of  the implementation 
process ".7 The Arbitrator appointed in accordance with Article 21.3(c) of the DSU determined that 
                                                
1 Dispute Settlement Body, minutes o f the meeting held on 22  June 2016 (WT/DSB/M/380), para. 9.7. 
See also Action by the Dispute Settlement Body, adoption of the Panel report, as modified by the 
Appellate  Body report, in Colombia – Textiles  (WT/DS461/10).  
2 Decree of the President of the Rep ublic of Colombia No.  456 of 28  February  2014 "partially amending 
the Customs Tariff" (Decree No.  456/2014).  
3 Except for heading 64.06, but including tariff line 6406.10.00.00 (uppers).  
4 Decree of the President of the Republic of Colombia No.  4927 of 26  December  2011, "adopting the 
Customs Tariff and other provisions" (Decree No.  4297/2011).  
5 Appellate Body report, Colombia – Textiles , para. 6.12.  
6 Request by Panama for Arbitration Under Article 21.3(c) of the DSU (WT/DS461/11).  
7 Award of the Arbitrato r, Colombia – Textiles,  (Article 21.3(c)) , para. 3.34 (referring to Colombia's 
submission, para. 29) (emphasis added).  WT/DS461/21  
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  the "reasonable period of time in the present dispute should include the time needed to enact both 
the tariff measure and the customs meas ure"8, and granted Colombia a "reasonable period of 
time" for compliance of seven months from the date of adoption of the Panel and Appellate Body 
reports .9 
The reasonable period of time for compliance expired on 2 2 January  2017.10 Nevertheless , in 
Panama's  view, Colombia has thus far failed to comply  with the DSB's recommendations and 
rulings.  
On 2 November  2016, Colombia adopted two decrees that modify the tariff and customs 
regime for the importation of textiles and footwear : (i) Decre e No. 1744 of 2 November 2016 
"partially modifying  the Customs Tariff " (Decre e No. 1744/2016 ); and (ii) Decre e No. 1745 of 
2 Novembe r 2016 " adopting measures for the prevention and control of customs fraud in 
connection with  imports of apparel and footwear"  (Decre e No. 1745/2 016). The adoption of these 
two decrees was recommended by the Committee on Customs, Tariffs and Foreign Trade  of 
Colombia at the same session , No. 299, of 7 October  2016.11 Moreover , both decrees refer 
expressly  to Decree No. 456/2014 containing  the compou nd tariff found to be inconsistent with 
Colombia's WTO obligations.12 
Panama is of the opinion that these amendments, far from bringing the measure into 
conformity with Colombia's WTO obligations, perpetuate the nullification and impairment of 
benefits accr uing to Panam a directly or indirectly under the GATT 1994 . 
I. MEASURES IN DISPUTE  
A. SECURITY FOR RELEASE OF GOODS  
Decree No. 1745/2016 introduces special customs controls for the importation of apparel 
and footwear classified in Chapters 61, 62 and 64 of Col ombia's Customs Tariff when the declared 
f.o.b. value of such products is less than or equal to  the thresholds  established  in Article 3 of that 
Decree.13 No expiry date  has been set for Decree No. 1745/2016.  
 
In order to guarantee the payment of such custom s duties and penalties  as may apply , 
Article 7 of Decree No. 1745/2016 provides that as a prerequisite for the release of the goods 
referred to in Article 3 of the Decree, the importer shall furnish security in the form of  "a specific 
bank or insurance gua rantee of 200% of the unit 'threshold' price established in [] Article [3], 
multiplied by the amount imported, for a period of three ( 3) years …" (hereinafter the security ). 
 
The same article also provides that "[s]hould the obligation to post a guarantee  in a 
valuation dispute coincide with  the obligation mentioned in this article, the latter shall prevail and 
the procedures provided  for in the customs legislation  governing the approval, control and 
safekeeping  of guarantees shall apply in determin ing the customs value of the imported goods and 
the penalty".  
 
                                                
8 Award of the Arbitrator, Colombia – Textiles,  (Article 21.3(c)), para. 3.42.  
9 Award of the Arbitrator, Colombia – Textiles , (Article 2 1.3(c)), para. 4.1.  
10 Award of the Arbitrator, Colombia – Textiles , (Article 21.3(c)), para. 4.1.  
11 See Recital 7 of the preamble to Decree No.  1745/2016 and Recital 2 of the preamble to Decree 
No. 1744/2016.  
12 The preamble to Decree No.  1745/2016 points o ut that "the customs measures set forth in this 
Decree are applied to ensure continued compliance with the policy objective pursued by the measures 
contained in Decree 456 of 2014  and the amendments thereto" (Recital 8 of the preamble to Decree 
No. 1745/20 16) (emphasis added). Similarly, the preamble to Decree No.  1744/2016 mentions that "bearing in 
mind that the implementation period stipulated in Article 5 of Decree 456 of 2014 , extended by Decrees  515 of 
2016 and 1229 of 2016, expires on 1  November  2016,  it is necessary to apply the exception provided for in 
Article 2, paragraph 2 of Law 1609 of 2013, in order to ensure continued compliance with the policy objective 
pursued by that measure" (Recital 3 of the preamble to Decree No.  1744/2016) (emphasis add ed). 
13 Articles 2 and 3 of Decree No. 1745/2016.  WT/DS461/21  
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  Thus, the security  has the following characteristics:  
 
 Its purpose is  to guarantee the payment of customs dut ies and any penalties that may 
apply ;14 
 It applies to imports of apparel and footwear classif ied in Chapters 61, 62 and 64 of 
Colombia's Customs Tariff when the declared f.o.b. value of such goods  is less than or 
equal to  the thresholds established in Article 3 of Decree 1745/2016 ;15 
 It consists of a specific bank or insurance guarantee of  200% of the corresponding unit 
threshold price multiplied by the quantity imported, for a three -year period ;16 
 It prevails in case s where  it coincides  with the obligation to post a guarantee in a 
valuation dispute ;17 and 
 It enters into force indefinitely as from 2 N ovember 2016 .18 
Panama understands that this measure is contained in the following legislation : 
 
(i) Decree No. 1745/2016; and  
(ii) Decree No. 4297/2011 of 26 December 2011 as regards the definition of the products 
covered by the nomenclature of Chapters 61, 62 and 64 of the Colombian Customs 
Tariff.  
B. ENTRY RESTRICTED TO CERTAIN PORTS  OF ENTRY  
Article 5 of Decree No. 1745/2016 provides that within ten days following the Decree's  entry 
into force, the National Customs and Excise Directorate (DIAN) shall determine th e locations  that 
are authorized to import apparel and footwear classified in Chapters 61, 62 and 64 of Colombia's 
Customs Tariff whose declared f.o.b. price is less than or equal to  the thresholds established in 
Article 3 of the Decree.19 No expiry date has  been set for Decree No. 1745/ 2016.20 
 
A DIAN Draft Resolution21 states that "the entry and importation of apparel and footwear 
classified in Chapters 61, 62 and 64 of the Customs Tariff and listed in Article 3 of Decree 1745 of 
2 November can only take plac e through public ports, airports and places of arrival located in the 
jurisdiction of the Sectional Directorates of Buenaventura, Cartagena and Santa Marta ".22 
 
Panama understands that this measure is contained in the following legislation : 
 
(i) Decree No. 1745 /2016;  
(ii) Decree No. 4297/2011 of 26 December 2011 as regards the definition of  the products 
covered by the nomenclature of Chapters 61, 62 and 64 of  the Colombia n Customs 
Tariff; and  
                                                
14 Article 7 of Decree No. 1745/2016.  
15 Articles 2 and 3 of Decree No. 1745/2016.  
16 Article 7 of Decree No. 1745/2016. Note that this article also states that "having provided  a general 
security  or not having  the obligation to do so shall not exempt the importer from the obligation mentioned 
herein."  
17 Article 7 of Decree No. 1745/2016.  
18 Article 11 of Decree No. 1745/2016.  
19 Articles 2 and 3 of Decree No. 1745/2016.  
20 Article 11 of Decree No. 1745/2016.  
21 DIAN Draft Resolution "adding a subparagraph to  Article 39 of Resolution 4240 of 2000". DIAN 
Resolution 4240 of 2 June 2000 regulates Decree 2685 of 28 December 1999 "amending the Customs 
Legislation". Article  39 of Resolution 4240 refers to " restrictions on entry of goods ". 
22 See Article 1 of the DIAN Draft Resolution (emphasis added). Although Panama understands that the 
DIAN did not issue the final resolution concerning the locations  authorized to import the apparel and footwear 
in question, the DIAN Draft  Resolution confirms that the ports of entry for these goods are to  be established. 
As explained further on, Panama reserves the right to challenge the DIAN's final resolution on this matter as 
well as any amendments, extensions or additions to this measur e. WT/DS461/21  
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  (iii) The DIAN Draft Resolution.23 
C. CUSTOMS TARIFF  
Decree No. 1744/2016 introdu ces a new customs regime for imports of apparel and 
footwear classified in Chapters 61, 62 and 64 of Colombia's Customs Tariff when the declared 
f.o.b. value of such products is less than or equal to  the thresholds established in that Decree.24 In 
principle , Decree No. 1744/2016 is valid for one year.25 
 
Article 1 of Decree No. 1744/2016 establishes a tariff of 40% ad valorem  for imports 
classified in Chapters 61 and 62 of Colombia's Customs Tariff whose declared f.o.b. price is less 
than or equal to 10 US do llars per gross kilogram.  
 
Article 2 of Decree No. 1744/2016 establishes a tariff  of 35% ad valorem  for imports 
classified under the tariff headings of Chapter 64 of Colombia's Customs Tariff whose declared 
f.o.b. price is less than or equal to the thresho lds established in that article.26 The paragraph under 
Article 2 provides that imports classified under tariff heading 6406.10.00.00 (uppers) whose 
declared f.o.b. price is less than or equal to 5 US dollars per gross kilogram shall be subject to a 
tariff o f 35%  ad valorem . 
 
Article 3 of Decree No. 1744/2016 states that "products classified in Chapters 61, 62 and 64 
of the Customs Tariff that are not subject to the tariff s set forth in Articles 1 and 2 of this Decree 
shall be subject to the tariff provided f or in Decree 4927 o f 2011 [ Colombia's Customs Tariff ] and 
its amendments".27 Certain goods are also exempted from the application of Decree 
No. 1744/2016.28 
 
Panama understands that this measure is contained in the following legislation : 
 
(i) Decree No. 1744/201 6; and  
(ii) Decree No. 4297/2011 of 26 December 2011 as regards the determination of products 
covered by the nomenclature of Chapters 61, 62 and 64 of Colombia's Customs Tariff.  
D. CUSTOMS AND TARIFF RE GIME APPLICABLE TO T HE GOODS WHOSE PRICE S ARE LESS THAN OR EQUAL TO THE 
THRESHOLDS ESTABLISH ED BY COLOMBIA  
Decree No. 1745/2016 and Decree No. 1744/2016 constitute a new customs and tariff 
regime applicable to imports of apparel and footwear classified in Chapters 61, 62 and 64 of 
Colombia's Customs Tariff when th e declared f.o.b. value of such products is less than or equal to  
the thresholds established in those decrees.29 
 
Under this regime, importers not only have to provide a security for release of the goods, 
use specific ports of entry, and pay customs duties amounting to 40% ad valore m (apparel) or 
35% ad valore m (footwear) ,30 but they also have to comply with documentary, certification, 
monitoring, and other requirements.  
                                                
23 DIAN Draft Resolution "adding a subparagraph to Article 39 of Resolution 4240 of 2000".  
24 Articles 1 and 2 of Decree No. 1744/2016.  
25 Article 6 of Decree No. 1744/2016 states that the Decree shall remain in force for one year starting 
on 2 November 20 16, and that once it has expired, the duties set fort h in Colombia's Customs Tariff ( Decree 
No. 4927/2011 and its amendments ) shall be reinstated.  
26 The thresholds established are the following: heading 6401 (6 US dollars per pair); heading 6402 
(6 US doll ars per pair); heading 6403 (10 US dollars per pair); heading 6404 (6 US dollars per pair); 
heading  6405 (7 US dollars per pair).  
27 That is, a tariff of 15% ad valorem . 
28 Articles 4 and 5 of Decree No. 1744/2016 exempt the following goods from the applicat ion of the 
Decree: (i) goods from a Special Customs Regime Zone or a free zone, provided such goods do not enter other 
parts of the country's customs territory, and (ii) residues and/or waste of commercial value  from the clothing 
industry  covered by the Plan Vallejo.  
29 Articles 2 and 3 of Decree No. 1745/2016, and Articles 1 and 2 of Decree No. 1744/2016.  
30 Note that Article 3 of Decree No. 1744/2016 provides that "products classified in Chapters 61, 62 and 
64 of the Customs Tariff that ar e not subject to the tariff set forth in Articles 1 and 2 of this decree shall be 
subject to the tariff prov ided for in Decree 4927 of 2011 [ Customs Tariff of Colombia]  and its amendments". WT/DS461/21  
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Regarding the documentary and certification requirements, Article 4 of Decree 1745/2016 
requires that for each shipment the importer submit to the Customs Operation Management 
Division, or whichever service is acting on behalf of the Sectional Customs and Excise Directorate 
with jurisdiction over the place of arrival, one month in advance, fi ve documents ,31 namely:  
 
● Certification from the foreign supplier, legalized, with an official Spanish translation, 
providing evidence of the intention to sell to the importer in Colombia and indicating, 
where appropriate, the type of economic relationship  with the importer in accordance 
with the Tax Code, also providing the address, telephone number and email address 
of the supplier as well as the six -digit tariff subheading containing the detailed 
description of the products to be exported, the quantity, and their respective prices ;32 
 
● Certification of the existence of the foreign supplier, legalized, with an official Spanish 
translation, issued by the foreign entity that keeps the official register of producers or 
commercial agents  or, should no such entity exist, by the foreign suppl ier under 
oath.33 
 
● List of distributors in Colombia of the imported goods, including their Tax 
Identification Number (NIT), business name, address, telephone number and email 
address.34 
 
● Declaration signed by the legal representative of the Customs Agenc y, where 
appropriate, certifying that they have conducted a background check on the customer 
for the importer, established how long the parties have been working together, and 
acted as customs broker.35 
 
● Signed  declaration by the importer or the importer' s legal representative certifying the 
following: (i) that the value to be declared for the imported goods corresponds to the 
price actually paid or to be paid; (ii) the address of the storage facilities for the 
imported goods; (iii) detailed information on  the distribution and marketing chain for 
the imported goods in Colombia; (iv) that they are aware that the customs authorities 
are entitled to submit the documents related to the import transaction to the Office of 
the Public Prosecutor and the Financial Information and Analysis Unit (UIAF).36 
 
Regarding the special monitoring requirements, Article 8 of Decree No. 1745/2016 states 
that "importers that declare goods  … indicated in Article 3 of this Decree, at a price lower than or 
equal to the threshold esta blished in that Article, must be reported to the Operational Analysis 
Management Sub -Directorate of the National Customs and Excise Directorate so that the 
information concerning such operations can be incorporated in the risk management system". 
Furthermo re, Article 6 of the same Decree provides that "import operations observers" shall 
"examine the information [provided by DIAN] and alert the customs authorities, and also closely 
monitor the inspection and valuation process with respect to the goods classi fied under the 
headings listed in Article 3 of this Decree".  
 
Panama understands that this measure is contained in the following legislation:  
 
(i) Decree No. 1745/2016;  
(ii) Decree No. 1744/2016;  
(iii) Decree No. 4297/2011 of 26 December 2011, as regards the definition o f the products 
covered by the nomenclature of Chapters 61, 62 and 64 of Colombia's Customs Tariff; 
and 
                                                                                                                                                  
Consequently, imports of the products in question whose f.o.b.  value exceeds  the established thresholds are 
subject to a 15% ad valorem  tariff.  
31 Article 4(1) of Decree No. 1745/2016.  
32 Article 4(1)(a) of Decree No. 1745/2016.  
33 Article 4(1)(b) of Decree No. 1745/2016.  
34 Article 4(1)(c) of Decree No. 1745/2016.  
35 Article  4(1)(d) of Decree No. 1745/2016.  
36 Article 4(1)(e) of Decree No. 1745/2016.  WT/DS461/21  
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  (iv) the DIAN Draft Resolution.  
II. LEGAL CLAIMS  
The implementing measures adopted by Colombia are inconsistent with its obligations under 
the Agreement Estab lishing the World Trade Organization (WTO Agreement). Specifically, the 
measures display the following inconsistencies:  
A. SECURITY FOR RELEASE OF GOODS 
(i) This measure is a "restric tion[]" on "importa tion" in violation of Ar ticle XI:1 of the 
GATT  1994 in tha t it imposes an unnecessary and highly onerous requirement, based 
on an excessive and arbitrary coverage and applicable to each and every shipment of 
the products in question. This is unquestionably a condition that limits the importation 
of the textile an d footwear products concerned.  
(ii) Insofar as  it is claimed that the security is imposed because it is "necessary to delay" 
the determination  of the value of the goods, the measure is inconsistent with Article  13 
of the Agreement on Customs Valuation. The mea sure is imposed in all circumstances, 
even when the customs duties have been assessed and there is no need to delay the 
determination of customs value. Moreover, its coverage exceeds what is necessary to 
secure "the ultimate payment of customs duties for w hich the goods may be liable".  
B. ENTRY RESTRICTED TO S PECIFIC PORTS OF ENT RY 
(i) This measure is a "restriction []" on "importation"  in violation of A rticle XI:1 of the  GATT 
1994 in that it limits the entry into Colombia of the textile and footwear products 
concerned to a specific number of ports of entry among all those  that are  equipped for 
the purpose.  
C. CUSTOMS DUTY  
(i) Insofar as  the security provided for in Decree No. 1745/2016 covers the payment of the 
duty, which is therefore assessed following the release  of the goods, the customs duty 
provided for in Decree 1744/2016 and collected prior to the release of the goods would 
in effect be a " duty or charge " other  than ordinary customs duties, and would be 
inconsistent with A rticle II:1(a) and II:1(b) , second se ntence, of the GATT  1994.  
D. CUSTOMS AND TARIFF RE GIME APPLICABLE TO G OODS WHOSE PRICES AR E LESS THAN OR EQUAL  TO THE 
THRESHOLDS ESTABLISH ED BY COLOMBIA  
(i) The customs and tariff regime as a whole operates as a "restriction []" on "importation " 
in violation of  Article XI:1 of the  GATT 1994. The joint application of excessively 
onerous customs and tariff measures to textile and footwear products whose prices are 
less than or equal to the thresholds established by Colombia limits the entry 
possibilities and has a  paralyzing effect on imports of the products concerned.  
(ii)  Moreover, the customs and tariff regime as a whole imposes such burdens and 
requirements  as to limit the possibility for traders to declare the value actually paid or 
to be paid for the transactions  in question when they do not exceed the thresholds, 
essentially creating an incentive to increase the value of the goods artificially. 
Consequently, the regime results in a disregard for the fundamental disciplines of 
customs valuation contained in Articl es 1, 2, 3, 5 and  6, and in the introduction of a 
system which provides for acceptance of the higher of two alternative values, of 
minimum customs values, and of arbitrary or fictitious values , in violation of 
Article  7.2(b), (f) and (g) of the Agreement o n Customs Valuation . WT/DS461/21  
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  Panama advises that during these consultations there will be other matters it would like to 
explore with Colombia, matters that relate to other obligations of Colombia under the WTO 
Agreement , for instance the matter of the uniform, im partial and reasonable administration of 
these and other measures that affect international trade in goods, in the light of Article X: 3(a) of 
the GATT 1994. With a view to facilitating a wide -ranging exchange of views, Panama would like to 
note for the rec ord that these matters are also covered by the scope of this request for 
consultations.  
Panama has identified the rules which, to its knowledge, underpin the measures at issue. 
However, it relies on Colombia's cooperation in confirming, during the consulta tions, the relevance 
of those rules, or in identifying others that may be relevant in providing a better understanding of 
the facts. Consequently, the list contained in this request is without prejudice to any other rules, 
administrative or legal decisions , acts, practices, guidance or guidelines issued by Colombia that 
may be relevant in examining this dispute. Accordingly, the scope of this request covers all of the 
aforementioned rules as well as any possible amendments, extensions or additions where 
applicable.  
Consider ing the urgency of this matter both for Colombia and for Panama, I would suggest 
that the missions in Geneva agree as rapidly as possible on the date, time and venue for these 
consultations.  
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