WT/DS461/RW  
5 October  2018 
(18-6143) Page: 1/153 
 Original: Spanish   
 
  
COLOMBIA – MEASURES RELATING TO THE IMPO RTATION  
OF TEXTILES, APPAREL  AND FOOTWEAR  
RECOURSE TO ARTICLE 21.5 OF THE DSU BY C OLOMBIA  
RECOURSE TO ARTICLE 21.5 OF THE DSU BY P ANAMA  
REPORT OF  THE PANELS  WT/DS461/RW  
 
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  TABLE OF CONTENTS  
 
1   INTRODUCTION  ................................ ................................ ................................ ........  18 
1.1   Panel establishm ent and composition  ................................ ................................ ...........  19 
1.1.1    Establishment of the compliance panel requested by Colombia  ................................ ..... 19 
1.1.2    Establishment of the compliance panel requested by Panama  ................................ ....... 19 
1.1.3    Meeting prior to composition of the Panels  ................................ ................................ . 20 
1.1.4    Composition of the Panels  ................................ ................................ ........................  20 
1.2   Panel proceedings  ................................ ................................ ................................ ...... 21 
2   FACTUAL ASPECTS ................................ ................................ ................................ ..... 22 
2.1   Introduction  ................................ ................................ ................................ ..............  22 
2.2   Measures at issue according to Colombia  ................................ ................................ ...... 22 
2.3   Measures at issue according to Panama  ................................ ................................ ........  24 
2.3.1    Introduction  ................................ ................................ ................................ ...........  24 
2.3.2    Measures challenged by Panama as contained in Decree No.  1745/2016 ........................  24 
2.3.2.1    Scope and application of Decree No.  1745/2016  ................................ ......................  24 
2.3.2.2    The specific bond under Decree No.  1745/2016  ................................ .......................  26 
2.3.2.3    Special import regime under Decree No.  1745/2016  ................................ .................  27 
2.3.2.3.1    Documentary and certification requirements  ................................ .........................  27 
2.3.2.3.2    Authorized entry sites  ................................ ................................ ........................  29 
2.3.2.3.3    Import operations observers  ................................ ................................ ...............  29 
2.3.2. 3.4   Risk management  ................................ ................................ .............................  30 
2.3.3    Measures challenged by Panama as contained in Decree No.  2218/2017 ........................  30 
2.3.3.1    Scope and application of Decree No.  2218/2017  ................................ ......................  30 
2.3.3.2    The specific bond under Decree No.  2218/2017  ................................ .......................  33 
2.3.3.3    Special import regime under Decree No.  2218/2017  ................................ .................  33 
2.3.3.3.1    Documentary and certification requirements  ................................ .........................  34 
2.3.3.3.2    Entry controls  ................................ ................................ ................................ ... 36 
3   PARTIES' REQUEST S FOR FINDINGS AND R ECOMMENDATIONS  ................................  36 
4   ARGUMENTS OF THE  PARTIES  ................................ ................................ ...................  37 
5   ARGUMENTS OF THE  THIRD PARTIES  ................................ ................................ ........  37 
6   INTERIM REVIEW  ................................ ................................ ................................ ...... 38 
6.1   Introduction  ................................ ................................ ................................ ..............  38 
6.2   Colombia's specific requests for review  ................................ ................................ .........  38 
6.2.1    Descriptive part  ................................ ................................ ................................ ...... 38 
6.2.2    The question of which measures a re the ones "taken to comply" in the present 
proceedings ................................ ................................ ................................ ......................  38 
6.2.3    Panama's claims under Article XI:1 of the GATT 1994  ................................ .................  38 
7   FINDINGS  ................................ ................................ ................................ .................  39 
7.1   Preliminary issues  ................................ ................................ ................................ ...... 39 
7.1.1    Introduction  ................................ ................................ ................................ ...........  39 WT/DS461/RW  
 
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  7.1.2    The question of which measures are the ones "taken to comply" in the present 
proceedings ................................ ................................ ................................ ......................  39 
7.1.2.1    Arguments of the parties  ................................ ................................ ......................  39 
7.1.2.1.1    Colombia  ................................ ................................ ................................ ..........  39 
7.1.2.1.2    Panama  ................................ ................................ ................................ ...........  43 
7.1.2.2    Analysis by the Panel  ................................ ................................ ............................  49 
7.1.2.3    Conclusion  ................................ ................................ ................................ ..........  56 
7.1.3    The question of which measures are the ones on which the Panel should rule  .................  57 
7.1.3.1    Arguments of the parties  ................................ ................................ ......................  57 
7.1.3.1.1    Panama  ................................ ................................ ................................ ...........  57 
7.1.3.1.2    Colombia  ................................ ................................ ................................ ..........  59 
7.1.3.2    Analysis by the Panel  ................................ ................................ ............................  59 
7.1.3.2.1    The question of whether the Panel can make findings with regard to repealed 
measures  ................................ ................................ ................................ .........................  59 
7.1.3.2.2    The question of whether the specific bond and the special import regime with 
the characteristics provided for in Decree  No. 2218/2017 fall within the Panel's terms of 
reference  ................................ ................................ ................................ .........................  60 
7.1.3.2.3    The question of whether the Panel should rule on the measures with the 
characteristics of both decrees  ................................ ................................ ............................  61 
7.1.3.3    Conclusion  ................................ ................................ ................................ ..........  62 
7.1.4    The question of which claims are within the Panel's terms of reference  ..........................  62 
7.1.4.1    Conclusion  ................................ ................................ ................................ ..........  64 
7.2   The question of whether the tariffs of Decree  No. 1744/2016 are consistent with 
Article  II.1(a)  and Article II.1(b), first s entence, of the GATT 1994  ................................ .........  64 
7.2.1    Introduction  ................................ ................................ ................................ ...........  64 
7.2.2    Arguments of the parties  ................................ ................................ .........................  65 
7.2.2.1    Colombia  ................................ ................................ ................................ ............  65 
7.2.2.2    Panama  ................................ ................................ ................................ ..............  65 
7.2.3    Analysis by the Panel  ................................ ................................ ..............................  65 
7.2.4    Conclusion  ................................ ................................ ................................ .............  67 
7.3   Panama's claims under Article  XI:1 of the GATT 1994  ................................ ....................  68 
7.3.1    Introduction  ................................ ................................ ................................ ...........  68 
7.3.2    The text of Article  XI:1 of the GATT 1994  ................................ ................................ .. 68 
7.3.3    Legal test provided for in Article  XI:1 of the GATT 1994  ................................ ..............  68 
7.3.4    The question of whether the specific bond is inconsist ent with Article XI:1 of the 
GATT 1994  ................................ ................................ ................................ .......................  72 
7.3.4.1    Arguments of the parties  ................................ ................................ ......................  72 
7.3.4.1.1    Panama  ................................ ................................ ................................ ...........  72 
7.3.4.1.2    Colombia  ................................ ................................ ................................ ..........  75 
7.3.4.2    Analysis by the Panel  ................................ ................................ ............................  76 
7.3.4.2.1    The question of whether the specific bond is burdensome  ................................ ...... 78 
7.3.4.2.2    The question of whether the specific bond creates uncertainty  ................................  81 
7.3.4.2.3    The question of whether the specific bond is arbitrary  ................................ ............  83 WT/DS461/RW  
 
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  7.3.4.3    Conclusion  ................................ ................................ ................................ ..........  85 
7.3.5    The question of whether the special import regime is inconsistent with Article  XI:1 
of the GATT  1994 ................................ ................................ ................................ ..............  85 
7.3.5.1    Arguments of the parties  ................................ ................................ ......................  85 
7.3.5.1.1    Panama  ................................ ................................ ................................ ...........  85 
7.3.5.1.2    Colombia  ................................ ................................ ................................ ..........  88 
7.3.5.2    Analysis by the Panel  ................................ ................................ ............................  90 
7.3.5.2.1    Documentary and certification requirements  ................................ .........................  92 
7.3.5.2.1.1    Certification of intention to sell  ................................ ................................ .........  92 
7.3.5.2.1.2    Certification of the existence of the foreign supplier  ................................ ............  94 
7.3.5.2.1.3    List of distributors  ................................ ................................ ..........................  94 
7.3.5.2.1.4    Declaration by the legal representative of the customs agency  .............................  95 
7.3.5.2.1.5    Declaration by the importer or the importer's legal representative  ........................  96 
7.3.5.2.1.6    The question of whether the documentary and certification requirements 
contribute to the alleged limiting effect of the special import regime  ................................ ....... 97 
7.3.5.2.2    Presence of the importer, its legal representative or the importing company's 
agent during the customs inspection or examination (aforo) of the goods  ................................  98 
7.3.5.2.3    Authorized entry controls  ................................ ................................ ...................  99 
7.3.5.2.4    Import operations observers  ................................ ................................ ..............  100 
7.3.5.2.5    Incorporation of information on certain import operations in the  risk 
management system  ................................ ................................ ................................ ........  101 
7.3.5.2.6    Specific bond  ................................ ................................ ................................ ... 102 
7.3.5.2.7    Consequences of non -compliance with certain requirements provided for in 
Decree  No. 2218/2017  ................................ ................................ ................................ ..... 102 
7.3.5.2.8    Collective assessment of the elements of the special import regime challenged 
by Panama  ................................ ................................ ................................ ......................  104 
7.3.5.3    Conclusion  ................................ ................................ ................................ .........  104 
7.4   Panama's claims under Arti cle X:3(a) of the GATT 1994  ................................ ................  105 
7.4.1    Introduction  ................................ ................................ ................................ ..........  105 
7.4.2    The text of Article X:3(a) of the GATT 1994  ................................ ..............................  105 
7.4.3    The legal standard provided for in Article X:3(a) of the GATT 1994  ..............................  105 
7.4.3.1    The question of whether the legal instrument identified by the complainant is of 
the kind described in Article X:1 of the GATT 1994  ................................ ...............................  105 
7.4.3.2    The question of whether the legal instrument identified by the complainant is 
being "administered" by the respondent  ................................ ................................ .............  106 
7.4.3.3    The question of whether the legal instrument identified by the complainant is 
not being administered in a uniform, impartial or reasonable manner by the respondent  ..........  107 
7.4.4    Preliminary issue  ................................ ................................ ................................ ... 107 
7.4.5    The question of whether the administration o f the specific bond is inconsistent 
with Article X:3(a) of the GATT 1994  ................................ ................................ ..................  109 
7.4.5.1    Arguments of the parties  ................................ ................................ .....................  109 
7.4.5.1.1    Panama  ................................ ................................ ................................ ..........  109 
7.4.5.1.2    Colombia  ................................ ................................ ................................ .........  112 
7.4.5. 2   Analysis by the Panel  ................................ ................................ ...........................  114 WT/DS461/RW  
 
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  7.4.5.2.1    The question of whether the legal instrument identified by Panama is of the 
kind describ ed in Article X:1 of the GATT 1994  ................................ ................................ .... 114 
7.4.5.2.2    The question of whether the legal instrument identified by Panama is being 
"administered" by Colombia  ................................ ................................ ..............................  115 
7.4.5.2.3    The question of whether the specific bond in Decree  No. 2218/2017 is not 
being administered uniformly, impartially and reasonably  ................................ .....................  117 
7.4.5.2.3.1    Introduction  ................................ ................................ ................................ .. 117 
7.4.5.2.3.2    Panama's claims with respect to the "first level of administration"  .......................  118 
7.4.5.2.3.3    Panama's claims with respect to the "second level of administration"  ...................  123 
7.4.5.2.4    Conclusion concerning the consistency of the administration of the specific 
bond with Article  X:3(a) of the GATT 1994  ................................ ................................ ..........  125 
7.4.6    The question of whether the administration of the special import regime is 
inconsistent with Article  X:3(a) of the GATT 1994  ................................ ................................  125 
7.4.6.1    Arguments of the parties  ................................ ................................ .....................  125 
7.4.6.1.1    Panama  ................................ ................................ ................................ ..........  125 
7.4.6.1.2    Colombia  ................................ ................................ ................................ .........  127 
7.4.6.2    Analysis by the Panel  ................................ ................................ ...........................  129 
7.4.6.2.1    The question of whether Panama has identified a legal instrument of the kind 
described in Article X:1 of the GATT 1994 ................................ ................................ ...........  129 
7.4.6.2.2    The question of whether the legal instrument identified by Panama is being 
"administered" by Colombia  ................................ ................................ ..............................  129 
7.4.6.2.3    The question of whether the special import regime in Decree No. 2218/2017 is 
not being administered uniformly, impartial ly and reasonably  ................................ ................  132 
7.4.6.2.3.1    Introduction  ................................ ................................ ................................ .. 132 
7.4.6.2.3.2    Panama's claims with respect to the "first level of administration"  .......................  132 
7.4.6.2.3.3    Panama's claims with respect to the "second level of administration"  ...................  140 
7.4.6.2.4    Conclusion concerning the consistency of the administration of the special 
import regime with Article  X:3(a) of the GATT 1994  ................................ .............................  141 
7.5   Panama's claims under the Customs Valuation Agreement  ................................ .............  141 
7.5.1    Panama's claims under Articles 1, 2, 3, 5, 6  and 7.2(f) of the Customs Valuation 
Agreement  ................................ ................................ ................................ ......................  141 
7.5.1.1    Arguments of the parties  ................................ ................................ .....................  141 
7.5.1.1.1    Panama  ................................ ................................ ................................ ..........  141 
7.5.1.1.2    Colombia  ................................ ................................ ................................ .........  143 
7.5.1.2    Analysis by the Panel  ................................ ................................ ...........................  143 
7.5.1.2.1    The question of whether the use of the thresholds of Decree No. 2218/2017 
constitutes customs valuation  ................................ ................................ ............................  144 
7.5.1.3    Conclusion  ................................ ................................ ................................ .........  146 
7.5.2    Panama's claims under Article  13 of the Customs Valuation Agreement  ........................  146 
7.5.2.1    Arguments of the parties  ................................ ................................ .....................  146 
7.5.2.1.1    Panama  ................................ ................................ ................................ ..........  146 
7.5.2.1.2    Colombia  ................................ ................................ ................................ .........  147 
7.5.2. 2   Analysis by the Panel  ................................ ................................ ...........................  148 
7.5.2.2.1    Text of Article 13 of the Customs Valuation Agreement  ................................ .........  148 WT/DS461/RW  
 
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  7.5.2.2.2    The legal standard under Article  13 of the Customs Valuation Agreement  ................  149 
7.5.2.2.3    The question of whether the specific bond is inconsistent with Article 13 of the 
Customs Valuation Agreement  ................................ ................................ ...........................  149 
7.5.2.3    Conclusion  ................................ ................................ ................................ .........  151 
8   CONCLU SIONS AND RECOMMENDA TION  ................................ ................................ . 151  
 
  WT/DS461/RW  
 
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  LIST OF ANNEXES  
ANNEX A 
WORKING PROCEDURES O F THE PANELS  
Contents  Page  
Annex  A-1 Harmonized Working Procedures of the P anels 3 
ANNEX B 
ARGUMENTS OF THE  PARTIES 
Contents  Page  
Annex B-1 Integrated executive summary of Colombia  9 
Annex B-2 Integrated executive summary of Panam a 25 
ANNEX C 
ARGUMENTS OF THE THIRD PARTIES 
Contents  Page  
Annex C-1 Integrated executive summary of Ecuador  52 
Annex C-2 Integrated executive summary of the United States  54 
Annex C-3 Integrated executive summary of Honduras  59 
Annex C-4 Integrated executive summary of Japan  60 
Annex C-5 Integrated executive summary of the European Union  63 
 
  WT/DS461/RW  
 
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  CASES  CITED IN THIS REPOR T 
Short title  Full case title and citation  
Argentina – Footwear (EC)  Appellate Body Report, Argentina – Safeguard Measures on Imports of 
Footwear , WT/DS121/AB/R , adopted 1 2 January  2000, DSR 2000:I, p. 515  
Argentina – Footwear (EC)  Panel Report, Argentina – Safeguard Measures on Imports of Footwear , 
WT/DS121/R , adopted 1 2 January  2000, as modified by Appellate Body 
Report WT/DS121/AB/R, DSR 2000:II, p. 575  
Argentina – Hides and 
Leather  Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and 
the Import of Finished Leather , WT/DS155/R  and Corr.1 , adopted 
16 February  2001, DSR 2001:V, p. 1779  
Argentina  – Import Measures  Appellate Body Reports, Argentina – Measures Affecting the Importation of 
Goods , WT/DS438/AB/R  / WT/DS444/AB/R  / WT/DS445/AB/R , adopted 
26 January  2015 
Argentina – Import Measures  Panel Reports, Argentina – Measures Affecting the Importation of Goods , 
WT/DS438/R  and Add.1 / WT/DS444/R  and Add.1 / WT/DS445/R  and Add.1, 
adopted 2 6 January  2015, as modified (WT/DS438/R) and upheld 
(WT/DS444/R / WT/DS445/R) by Appellate Body Reports WT/DS438/AB/R  / 
WT/DS444/AB/R / WT/DS445/AB/R  
Argentina – Textiles and 
Apparel  Appellate Body Report, Argentina – Measures Affecting Imports of Footwear, 
Textiles, Apparel and Other Items , WT/DS56/AB/R  and Corr.1, adopted 
22 April 1998, DSR 1998:III, p. 1003  
Australia – Apples  Appellate Body Report, Australia – Measures Affecting the Importation of 
Apples from New Zealand , WT/DS367/AB/R , adopted 1 7 December  2010, 
DSR 2010:V, p. 2175  
Australia – Automotive 
Leather II (Article  21.5 – US) Panel Report, Australia – Subsidies Provided to Producers and Exporters of 
Automotive Leather – Recourse to Article 21.5 of the DSU by the United 
States , WT/DS126/RW  and Corr.1, adopted 1 1 February  2000, DSR 2000:III, 
p. 1189  
Australia – Salmon 
(Article  21.5 – Canada)  Panel Report, Australia – Measures Affecting Imp ortation of Salmon – 
Recourse to Article 21.5 of the DSU by Canada , WT/DS18/ RW, adopted 
20 March  2000, DSR 2000:IV, p. 2031  
Brazil – Desiccated Coconut  Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut , 
WT/DS22/AB/R , adopted 2 0 March  1997, DSR 1997:I, p. 167  
Brazil – Retreaded Tyres  Panel Report, Brazil – Measures Affecting Imports of Retreaded Tyres , 
WT/DS332/R , adopted 1 7 December  2007, as modified by Appellate Body 
Report WT/DS332/AB/R, DSR 2007:V, p. 1649  
Canada – Aircraft 
(Article  21.5 – Brazil)  Appellate Body Report, Canada – Measures Affecting the Export of Civilian 
Aircraft – Recourse by Brazil  to Article 21.5 of the DSU , WT/DS70/AB/RW , 
adopted 4 August  2000, DSR 2000:IX, p. 4299  
Canada – Continued 
Suspension  Appellate Body Report, Canada – Continued Suspension of Obligations in the 
EC – Hormones Dispute , WT/DS321/AB/R , adopted 1 4 November  2008, DSR 
2008:XIV, p. 5373  
Chile – Price Band System  Appellate Body Report, Chile – Price Band System and Safeguard Measures 
Relating to Certain A gricultural Products , WT/DS207/AB/R , adopted 
23 October  2002, DSR 2002:V III, p. 3045 (Corr.1, DSR 2006:XII, p. 5473)  
China – Raw Materials  Appellate Body Reports, China – Measures Related to the Exportation of 
Various Raw Materials , WT/DS394/AB/R  / WT/DS395/AB/R  / 
WT/DS398/AB/R , adopted 2 2 February  2012, DSR 2012:VII, p. 3295  
China – Raw Materials  Panel Reports, China – Measures Related to the Exportation of Various Raw 
Materials , WT/DS394/R , Add.1 and Corr.1 / WT/DS395/R , Add.1 and Corr.1 / 
WT/DS398/R , Add.1 and Corr.1, adopted 2 2 February  2012, as modified by 
Appellate Body Reports WT/DS394/AB/R / WT/DS395/AB /R / 
WT/DS398/AB/R, DSR 2012:VII, p. 3501  
Colombia – Ports of Entry  Panel Report, Colombia – Indicative Prices and Restrictions on Ports of Entry, 
WT/DS366/R  and Corr.1, adopted 2 0 May 2009, DSR 2009:VI, p. 2535  
Colombia – Textiles  Appellate Body Report, Colombia – Measures Relating to the Importation of 
Textiles, Apparel and Footwear , WT/DS461/AB/R  and Add.1, adopted 
22 June 2016 
Colombia – Textiles  Panel Report, Colombia – Measures Relating to the Importation of Textiles, 
Apparel and Footwear , WT/DS461/R  and Add.1, adopted 2 2 June 2016, as 
modified by Appellate Body Report WT/DS461/AB/R  WT/DS461/RW  
 
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  Short title  Full case title and citation  
Colombia – Textiles 
(Article  21.3(c))  Award of the Arbitrator, Colombia – Measures Relating to the Importation of 
Textiles, Apparel and Footwear – Arbitration under Article 21.3(c) of the 
DSU, WT/DS461/13 , 15 November  2016 
Dominican Republic – Import 
and Sale of Cigarettes  Panel Report, Dominican Republic – Measures Affecting the Importation and 
Internal Sale of Cigarettes , WT/DS302/R , adopted 1 9 May 2005, as modified 
by Appellate Body Report WT/DS302/AB/R, DSR 2005:XV, p. 7425  
EC – Bananas III  Appellate Body Report, European Communities – Regime for the Importation, 
Sale and Distribution of Bananas , WT/DS27/AB/R , adopted 
25 September  1997, DSR 1997:II, p. 591  
EC – Bananas III 
(Article  21.5 – Ecuador II)  Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas – Second Recourse to Article 21.5 of the DSU by 
Ecuador , WT/DS27/RW2/ECU , adopted 1 1 December  2008, as modified by 
Appellate Body Report WT/DS27/AB/RW2/ECU, DSR 2008:XVIII, p. 7329  
EC – Bananas III 
(Article  21.5 – Ecuador II)/ 
EC – Bananas III 
(Article  21.5 – US) Appellate Body Reports, European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Second Recourse to Article 
21.5 of the DSU by Ecuador , WT/DS27/AB/RW2/ECU , adopted 
11 December  2008, and Corr.1 / European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Recourse to Ar ticle 21.5 of 
the DSU by the United States , WT/DS27/AB/RW/USA  and Co rr.1, adopted 
22 December  2008, DSR 2008:XVIII, p. 7165  
EC – Bed Linen (Article 21.5 
– India)  Appellate Body Report, European Communities – Anti-Dumping Duties on 
Imports of Cotton -Type Bed Linen from India – Recourse to Article 21.5 of 
the DSU  by India , WT/DS141/AB/RW , adopted 2 4 April 2003, DSR 2003:III, 
p. 965  
EC – Chicke n Cuts  Appellate Body Report, European  Communities – Customs Classification of 
Frozen Boneless Chicken Cuts , WT/DS269/AB/R , WT/DS286/AB/R , adopt ed 
27 September  2005, and Corr.1, DSR 2005:XIX, p. 9157  
EC – Chicken Cuts (Brazil)  Panel Report, European  Communities – Customs Classification of Frozen 
Boneless Chicken Cuts, Complaint by Brazil , WT/DS269/R , adopted 
27 September  2005, as modified by Appellate Body Report WT/DS269/AB/R, 
WT/DS286/AB/R, DSR 2005:XIX, p. 9295  
EC – Chicken Cuts (Thailand)  Panel Report, European  Communities – Customs Classification of Frozen 
Boneless Chicken Cuts, Complaint by Thailand , WT/DS286/R , adopted 
27 September  2005, as modified by Appellate Body Report WT/DS269/AB/R, 
WT/DS286/AB/R, DSR 2005:XX, p. 9721  
EC – Fasteners (China)  Appellate Body Report, European Communities – Definitive Anti -Dumping 
Measures on Certain Iron or Steel Fasteners from China , WT/DS397/AB/R , 
adopted 2 8 July 2011, DSR 2011:VII, p. 3995  
EC – Hormones  Appellate Body Report, EC Measures Concerning Meat and Meat Products 
(Hormones) , WT/DS26/AB/R , WT/DS48/AB/R , adopted 1 3 February  1998, 
DSR 1998:I, p. 135  
EC – IT Products  Panel Reports, European Communities and its member States – Tariff 
Treatment of Certain Information Technology Products , WT/DS375/R  / 
WT/DS376/R  / WT/DS377/R , adopted 2 1 September  2010, DSR 2010:III, 
p. 933 
EC – Poultry  Appellate Body Report, European Communities – Measures Affecting the 
Importation of Certain Poultry Products , WT/DS69/AB/R , adopted 
23 July 1998, DSR 1998:V, p. 2031  
EC – Seal Products  Appellate Body Reports, European Communities – Measures Prohibiting the 
Importation and Marketing of Seal Products , WT/DS400/AB/R  / 
WT/DS401/AB /R, adopted 1 8 June 2014, DSR 2014:I, p. 7  
EC – Selected Customs 
Matters  Appellate Body Report, European Communities – Selected Customs Matters , 
WT/DS315/AB/R , adopted 1 1 December  2006, DSR 2006:IX, p. 3791  
EU – PET (Pa kistan)  Panel Report, European Union – Countervailing Measures on Certain 
Polyethylene Terephthalate  from Pakistan , WT/DS486/R , Add.1 and Corr.1, 
adopted 2 8 May 2018, as modified by Appellate B ody Report 
WT/DS4 86/AB/R  
Guatemala – Cement I  Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding 
Portland Cement from Mexico , WT/DS60/AB/R , adopted 2 5 November  1998, 
DSR 1998:IX, p. 3767  WT/DS461/RW  
 
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  Short title  Full case title and citation  
India – Autos  Panel Report, India – Measures Affecting the Automotive Sector , 
WT/DS146/R , WT/DS175/R , and Corr.1, adopted 5 April 2002, DSR 2002:V, 
p. 1827  
India – Patents (US)  Appellate Body Report, India – Patent Protection for  Pharmaceutical and 
Agricultural Chemical Products , WT/DS50/AB/R , adopted 16 January  1998, 
DSR 1998:I, p. 9  
India – Quantitative 
Restrictions  Panel Report, India – Quantitative Restrictions on Imports of Agricultural, 
Textile and Industrial Products , WT/DS90/R , adopted 2 2 September  1999, 
upheld by Appellate Body Report WT/DS90/AB/R, DSR 1999:V, p. 1799  
Indonesia – Import Licensing 
Regimes  Panel Report, Indonesia – Importation of Horticultural Products, Animals and 
Animal Products , WT/DS477/R , WT/DS478/R , Add.1 and Corr.1, adopted 
22 November  2017, as modified by Appellate Body Report WT/DS477/AB/R, 
WT/DS478/AB/R  
Japan – Alcoholic  
Beverages II  Appellate Body Report, Japan – Taxes on Alcoholic Beverages , 
WT/DS8/AB/R , WT/DS10/AB/R , WT/DS11/AB/R , adopted 1 November  1996, 
DSR 1996:I, p. 97  
Japan – Film Panel Report, Japan – Measures Affecting Consumer Photographic Film and 
Paper , WT/DS44/R , adopted 2 2 April 1998, DSR 1998:IV, p. 1179  
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of 
Certain Dairy Products , WT/DS98/AB/R , adopted 1 2 January  2000, DSR 
2000:I, p. 3  
Korea – Various Measures on 
Beef Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled 
and Frozen Beef , WT/DS161/AB/R , WT/DS169/AB/R , adopted 
10 January  2001, DSR 2001:I, p. 5  
Korea – Various Measures on 
Beef Panel Report, Korea – Measures Affecting Imports of Fresh, Chilled and 
Frozen Beef , WT/DS161/R , WT/DS169/R , adopted 1 0 January  2001, as 
modified by Appellate Body Report WT/DS161/AB/R, WT/DS169/AB/R, DSR 
2001:I, p. 59  
Mexico – Corn Syrup 
(Article  21.5 – US) Appellate Body Report, Mexico – Anti-Dumping Investigation of High Fructose 
Corn Syrup (HFCS) from the United States – Recourse to Article 21.5 of the 
DSU by the United States , WT/DS132/AB/RW , adopted 2 1 November  2001, 
DSR 2001:XIII, p. 6675  
Peru – Agricultural Products 
(Article 21.3(c))  Award of the Arbitrator, Peru – Additional Duty on Imports of Certain 
Agricultural Products – Arbitration under Article 21.3(c) of t he DSU , 
WT/DS457/15 , 16 December  2015  
Thailand – Cigarettes 
(Philippines)  Panel Report, Thailand – Customs and Fiscal Measures on Cigarettes from 
the Philippines , WT/DS371/R , adopted 1 5 July 2011, as modified by 
Appellate Body Report WT/DS37 1/AB/R , DSR 2011:IV, p. 2299  
US – Anti-Dumping and 
Countervailing Duties 
(China)  Appellate Body Report, United States – Definitive Anti -Dumping and 
Countervailing Duties on Certain Products from China , WT/DS379/AB/R , 
adopted 2 5 March  2011, DSR 2011:V, p. 2869  
US – Carbon Steel  Appellate Body Report, United States – Countervai ling Duties on Certain 
Corrosion -Resistant Carbon Steel Flat Products from Germany , 
WT/DS213/AB/R  and Corr.1, adopted 1 9 December  2002, DSR 2002:IX, 
p. 3779 
US – Certain EC Products  Panel Report, United States – Import Measures on Certain Products from the 
European Communities , WT/DS165/R  and Add.1, adopted 1 0 January  2001, 
as modified by Appellate Body Report WT/DS165/AB/R, DSR 2001:II, p. 413  
US – Continued Suspension  Appellate Body Report, United States – Continued Suspension of Obligations 
in the EC – Hormones Dispute , WT/DS320/AB/R , adopted 
14 Novem ber 2008, DSR 2008:X, p. 3507  
US – Continued Zeroing  Appellate Body Report, United States – Continued Existence and Application 
of Zeroing Methodology , WT/DS350/AB/R , adopted 1 9 February  2009, DSR 
2009:III, p. 1291  
US – COOL  Panel Reports, United States – Certain Country of Origin Labelling (COOL) 
Requirements , WT/DS384/R  / WT/DS386/R , adopted 2 3 July 2012, as 
modified by Appellate Body Reports WT/DS384/AB/R / WT/DS386/AB/R, DSR 
2012:VI, p. 2745  WT/DS461/RW  
 
- 11 - 
 
  Short title  Full case title and citation  
US – FSC 
(Article 21.5 – EC II)  Appellate Body Report, United States – Tax Treatment for "Foreign Sales 
Corporations" – Second Recourse to Article 21.5 of the DSU by the 
European  Communities , WT/DS108/AB/RW2 , adopted 1 4 March  2006, DSR 
2006:XI, p. 4721  
US – Gasoline  Appellate Body Report, United States – Standards for Reformulated and 
Conventional Gasoline , WT/DS2/AB/R , adopted 2 0 May 1996, DSR 1996:I,  
p. 3 
US – Large Civil Aircraft 
(2nd complaint)  
(Article 21.5 – EU) Panel Report, United States – Measures Affecting Trade in Large Civil Aircraft 
(Second Complaint) – Recourse to Article 21.5 of the DSU by the European 
Union , WT/DS353/RW  and Add.1, circulated to WTO Members 9 June 2017 
[appealed by the European Union 2 9 June 2017] 
US – Oil Country Tubular 
Goods Sunset Reviews  Appellate Body Report, United States – Sunset Reviews of Anti -Dumping 
Measures on Oil Country Tubular Goods from Argentina , WT/DS268/AB/R , 
adopted 1 7 December  2004, DSR 2004:VII, p. 3257  
US – Shrimp  Appellate Body Report, United States – Import Prohibition of Certain Shrimp 
and Shrim p Products , WT/DS58/AB/R , adopted 6 November  1998, DSR 
1998:VII, p. 2755  
US – Shrimp  
(Article 21.5 – Malaysia)  Appellate Body Report, United States – Import Prohibition of Certain Shrimp 
and Shrimp Products – Recourse to Article 21.5 of the DSU by Malaysia , 
WT/DS58/AB/RW , adopted 2 1 November  2001, DSR 2001:XIII, p. 6481  
US – Shrimp (Ecuador)  Panel Report, United States – Anti-Dumping Measure on Shr imp from 
Ecuador , WT/DS335/R , adopted on 2 0 February  2007, DSR 2007:II, p. 425 
US – Shrimp (Thailand)/  
US – Customs Bond Directive  Appellate Body Report, United States – Measures Relating to Shrimp from 
Thailand / United States – Customs Bond Directive for Merchandise Subject 
to Anti -Dumping/Countervailing Duties , WT/DS343/AB/R  / WT/DS345/AB/R , 
adopted 1 August  2008, DSR 2008:VII, p. 2385 / DSR 2008:VIII, p. 2773  
US – Shrimp (Thailand)  Panel Report, United  States – Measures Relating to Shrimp from Thailand , 
WT/DS343/R , adopted 1 August  2008, as modified by Appellate Body Report 
WT/DS343/AB/R / WT/DS345/AB/R, DSR 2008:VII, p. 2539  
US – Softwood Lumber IV 
(Article 21.5 – Canada)  Appellate Body Report, United States – Final Countervailing Duty 
Determination with Respect to Certain So ftwood Lumber from Canada – 
Recourse by Canada to Article 21.5 of the DSU , WT/DS257/AB/RW , adopted 
20 December  2005, DSR 2005:XXIII, p. 11357  
US – Softwood Lumber IV 
(Article 21.5 – Canada)  Panel Report, United States – Final Countervailing Duty Determination with 
Respect to Certain Softwood Lumber from Canada – Recourse by Canada to 
Article 21.5 [of the DSU] , WT/DS257/RW , adopted 2 0 December  2005, 
upheld by Appellate Body Report WT/ DS257/AB/RW, DSR 2005:XXIII, 
p. 11401  
US – Stainless Steel (Korea)  Panel Report, United States – Anti-Dumping Measures on Stainless Steel 
Plate in Coils and Stainless Steel Sheet and Strip from Korea , WT/DS179/R , 
adopted 1 February  2001, DSR 2001:IV, p. 1295  
US – Stainless Steel (Mexico) 
(Article 21.3(c))  Award of the Arbitrator, United States – Final Anti -Dumping Measures on 
Stainless Steel from Mexico – Arbitration under Article 21.3(c) of the DSU , 
WT/DS344/15 , 31 October  2008, DSR 2008:XX, p. 8619  
US – Upland Cotton  Appellate Body Report, United States – Subsidies on Upland Cotton , 
WT/DS267/AB/R , adopted 2 1 March  2005, DSR 2005:I, p. 3  
US – Upland Cotton 
(Article  21.5 – Brazil)  Appellate Body Report, United States – Subsidies on Upland Cotton – 
Recourse to Article 21.5 of the DSU by Brazil , WT/DS267/AB/RW , adopted 
20 June 2008, DSR 2008:III, p. 809  
US – Wool Shirts and 
Blouses  Appellate Body Report, United States – Measure Affecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R , adopted 2 3 May 1997, 
and Corr.1, DSR 1997:I, p. 323  
US – Zeroing (EC) 
(Article  21.5 – EC) Appellate Body Report, United States – Laws, Regulations and Methodology 
for Calculating Dumping Margins ("Zeroing") – Recourse to Article 21.5 of the 
DSU by the European Communities , WT/DS294/AB/RW  and Corr.1, adopted 
11 June 2009, DSR 2009:VII, p. 2911  
US – Zeroin g (EC) 
(Article  21.5 – EC) Panel Report, United States – Laws, Regulations and Methodology for 
Calculating Dumping Margins ("Zeroing") – Recourse to Article 21.5 of the 
DSU by the European Communities , WT/DS294/RW , adopted 1 1 June 2009, 
as modified by Appellate Body Report W T/DS294/AB/RW, DSR 2009:VII, 
p. 3117 WT/DS461/RW  
 
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  Short title  Full case title and citation  
US – Zeroing (Japan)  
(Article 21.5 – Japan)  Appellate Body Report, United States – Measures Relating to Zeroing and 
Sunset Reviews – Recourse to Article 21.5 of the DSU by Japan , 
WT/DS322/AB/RW , adopted 3 1 August  2009, DSR 2009:VIII, p. 3441  
  WT/DS461/RW  
 
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  EXHIBITS REFERRED TO  IN THIS REPORT  
Exhibit  Short title  Title 
COL–1/PAN –1 Decree  No. 1744/2016  Decreto  No. 1744 del Ministerio de Comercio, 
Industria  y Turismo de Colombia, de fecha 2 de 
noviembre de 2016, por el cual se modifica 
parcialmente el Arancel de Aduanas (Decree No.  1744 
of the Ministry of Trade, Industry and Tourism of 
Colombia, dated 2  November  2016, partially modifying 
the Customs Tariff) 
COL–2 Extract from 
Decree  No. 4927/2011  Extracto del Decreto  No. 4927 del Ministerio de 
Comercio, Industria  y Turismo de Colombia, de fecha 
26 de diciembre de 2011, por el cual se adopta el 
Arancel de Aduanas  y otras disposiciones (Extract from 
Decree No. 4927 of the Ministry of Trade, Industry and 
Tourism o f Colombia, dated 26  December  2011, 
adopting the Customs Tariff and other provisions)  
COL–4 Minutes of the 
299th session of the 
Triple A Committee  Acta de sesión 299 del Comité de Asuntos Aduaneros, 
Arancelarios y de Comercio Exterior (7 de octubre de 
2016)  (Minutes of the 299th Session of the Committee 
on Customs, Tariffs and Foreign Trade 
(7 October  2016))  
COL–6 Article 1 of Decree 
No. 3306/2006  Artículo 1 del Decreto No. 3306 del Ministerio de 
Comercio, Industria y Turismo, de fecha 25 de 
septiembre de 2006, por el cual se dictan disposiciones 
relacionadas con el Comité de Asuntos Aduaneros, 
Arancelarios y de Comercio Exterior (Article 1 of Decree 
No. 3306 of the Ministry of Trade, Industry and 
Tourism, dated 25  September  2006, enacting 
provisions related to the Committee on Customs, Tariffs 
and Foreign Trade)  
COL–10 Resolution 
No. 3269/2016  Resolución No. 3269 del Ministerio de Relaciones 
Exteriores, de fecha 20 de julio de 2016, por la cual se 
adopta el procedimiento para apostillar y/o legalizar 
documentos y se deroga la Resolución No. 7144 del 24 
de octubre de 2014 (Resolution No. 3269 of the Ministry 
of Foreign Affairs, dated 2 0 July 2016, adopting the 
procedure for apostilling and/or legalizing documents 
and repe aling Resolution No.  7144 of 2 4 October  2014) 
COL–12 Extract from the Official 
Journal of Colombia, 
2 November  2016 Extracto del Diario Oficia l de Colombia, de fecha 2 de 
noviembre de 2016, en el que se aprueba el Decreto 
No. 1745/2016 (Extract from the Official Journal of 
Colombia, dated 2 November  2016, approving Decree 
No. 1745/2016)  
COL–13 Extract from the Official 
Journal of Colombia, 
27 December  2017 Extracto del Diario Oficial de Colombia, de fecha 27 de 
diciembre de 2017, en el que se aprueba Ley 
No. 1874/2017 (Extract from the Official Journal of 
Colombia, dated 2 7 December  2017, approving 
Law No. 1874/2017)  
COL–17 Insurance policy of  
Colombiana Kimberly 
Colpapel  Póliza de seguro de Colombiana Kimberly Colpapel, 
aceptada por la DIAN de fecha de 11 de enero de 2018 
(Insurance Policy of Colombiana Kimberly Colpapel, 
accepted by the DIAN on 11  January  2018)  
COL–28/COL –29 DIAN presentation on 
customs fraud  Presentación de la DIAN, "Fraude aduanero . Comercio 
ilícito de confecciones, textiles  y calzado asociado al 
lavado de activos " (DIAN presentation, "Customs fraud, 
illicit trade in clothing , textiles and footwear associat ed 
with money laundering")  
COL–32 Actual cases of imports 
effected under the 
special regime guarantee  Casos reales de importaciones realizadas bajo la 
garantía del régimen especial (actual cases of imports 
effected under the special regime guarantee)  
COL–39 List of 802 import 
declarations  DIAN, relación de 802 declaraciones de importación con 
precios igual o por debajo de los umbrales establecidos 
en el Decreto No. 1745 de 2016  (DIAN , list of 802 
import declarations with prices at or below the 
thresholds established in Decree No.  1475 of 2016)  WT/DS461/RW  
 
- 14 - 
 
  Exhibit  Short title  Title 
COL–46 Article 1 of Resolution 
No. 000017/2017  Artículo  1 de la Resolución No. 000017 del 22 de marzo 
de 2017, por la cual se reglamenta el Artículo 6 del 
Decreto No. 1745 del 2 de noviembre de 2016 ( Article 
1 of Resolution No 000017 of 2 2 March  2017, regulating 
Article 6 of Decree No. 1745 of 2  November  2016)  
COL–47 Decree No.  349/2018  Decreto No.  349 del Ministerio de Hacienda  y Crédito 
Público de Colombia, de fecha 20 de febrero de 2018, 
por el cual se modifica n los Decretos 
No. 2685/1999  y No. 390/2016  y se dictan otras 
disposiciones (Decree No. 349 of the Ministry of Finance 
and Public Credit of Colombia, dated 20  February  2018, 
amending Decrees No.  2685/1999 and No. 390/2016 
and enacting other provisions)  
COL–53 Decision No. 378 Extracto de Comisión del Acuerdo de Cartagena, 
Decisión No. 378 de Valoración Aduanera  (Extract of the 
Commission of the Cartagena Agreement, Decision 
No. 378 on Customs Valuation)  
COL–54 Decision No. 379 Comisión del Acuerdo de Cartagena, Decisión No. 379 
de Declaración Andina de Valor  (Commission of the 
Cartagena Agreement, Decision No. 379 on the Andean 
Declaration  of Value ) 
COL–58 Communiqué on Decree 
No. 390/2016  DIAN, oficio sobre los artículos del Decreto 390 de 2016 
que se encuentran vigentes a 9 de abril de 2018 (DIAN, 
communiqué on the Articles of Decree No. 390 of 2016 
in force at 9 April 2018) 
COL–61 Import figures for goods 
under Decree 
No. 2218/2017  DIAN, cifras de importación de mercancías bajo el 
Decreto No. 2218/2017 (DIAN , import figures for goods 
under Decree No. 2218/2017)  
PAN–2 Decree  No. 1745/2016  Decreto  No. 1745 del Ministerio de Hacienda  y Crédito 
Público de Colombia, de fecha 2 de noviembre de 2016, 
por el cual se adoptan medidas para la prevención  y el 
control del fraude aduanero en las importaciones de 
confecciones  y calzado (Decree No. 1745 o f the Ministry 
of Finance and Public Credit of Colombia, dated 
2 November  2016, adopting measures for the 
prevention and control of customs fraud in connection 
with imports of clothing and footwear)  
PAN–3 Decree No.  2685/1999  Decre to No. 2685 del Ministerio de Hacienda  y Crédito 
Público de Colombia, de fecha 28 de diciembre de 1999, 
por el cual se modifica la legislación aduanera  (Decree 
No. 2685 of the Ministry of Finance and Public Credit of 
Colombia, dated 28  December  1999, amendin g the 
customs legislation)  
PAN–4 Decree No.  390/2016  Decre to No. 390 del Ministerio de Hacienda  y Crédito 
Público de Colombia, de fecha 7 de marzo de 2016, por 
el cual se establece la regulación aduanera  (Decree 
No. 390 of the Ministry of Finance and Public Credit of 
Colombia, dated 7  March  2016, establishing the 
Customs Statute)  
PAN–10 Extract from the DIAN 
webpage  DIAN, Normatividad, "DIAN combate el contrabando y 
la subfacturación de confecciones y calzado con la 
aplicación de los Decretos 1744 y 1745 del 2 de 
noviembre de 2016", disponible en www.dian.gov.co  
(DIAN , Regulations, "DIAN combats smuggling and 
underinvoicing of clothing and footwear through 
implementation of Decrees 1744 and 1745 of 
2 November  2016", available at www.dian.gov.co  
PAN–40 Resolution 
No. 4240/2000  Resolu ción No. 4240 de la Dirección de Impuestos y 
Aduanas nacionales, de fecha 9 de junio del 2000, por 
la cual se reglamenta el Decre to No. 2685 de 28 de 
diciembre de 1999 (Resolution No.  4240 of the National 
Customs and Excise Directorate, dated 9  June 2000, 
regulating Decree No.  2685 of 28  December  1999)  WT/DS461/RW  
 
- 15 - 
 
  Exhibit  Short title  Title 
PAN–43 Decree No.  2218/2017  Decre to No. 2218 del Ministerio de Hacienda  y Crédito 
Público de Colombia, de fecha 27 de diciembre de 2017, 
por el cual se adoptan medidas para la prevención  y el 
control del fraude aduanero en las importaciones de 
fibras, hilados, tejidos, confecciones  y calzad o (Decree 
No. 2218 of the Ministry of Finance and Public Credit of 
Colombia, dated 27  December  2017, adopting 
measures for the prevention and control of customs 
fraud in connection with imports of fibres, yarns, 
fabrics, clothing and footwear)  
PAN–44 Joint Circular 
No. 001/2018  Circular conjunta No.  001 del despacho de la Ministra 
de Comercio, industria y Turismo, de fecha 19 de enero 
de 2010, referente a la aplicación del Decre to 
No. 2218/2017 (Joint Circular No.  001 from the Office 
of the Minister of Tra de, Industry and Tourism, dated 
19 January  2010, referring to the implementation of 
Decree No.  2218/2017  
PAN–45 Decree No.  1786/2017  Decre to No. 1786 del Ministerio de Comercio, 
Industria  y Turismo de Colombia, de fecha 2 de 
noviembre de 2017, por el cual se modifica 
parcialmente el Arancel de Aduanas (Decree No.  1786 
of the Ministry of Trade, Industry and Tourism of 
Colombia, dated 2  November  2017, partially modifying 
the Customs Tariff  
PAN–46 "Two decrees 
strengthening customs 
control of footwear and 
clothing ", El Espectador  "Dos decretos que fortalecen control aduanero de 
calzado y ropa", El Espectador (2 de noviembre de 
2016)  ("Two  decrees strengthening customs control of 
footwear and clothing ", El Espectador  
(2 November  2016))  
PAN–50 "Entry of underinvoiced 
footwear into Colombia 
reduced by more than 
90%", Vanguardia  Y. Rodríguez Barajas, "Se redujo en más del 90% el 
ingreso  de calzado subfacturado en Colombia", 
Vanguardia  (Y. Rodríguez Barajas, "Entry of 
underinvoiced footwear into Colombia reduced by more 
than 90%", Vanguardia ) 
PAN–63 Resolution 
No. 2199/2005  
 Resolu ción No. 2199 de la Dirección General de 
Impuestos y Aduanas Nacionales, de fecha 30 de marzo 
de 2005, por la cual se reglamenta el artículo 74 -1 del 
Decre to No. 2685 de 1999 (Resolution No.  2199 of the 
National Customs and Excise Directorate, dated 
30 March  2005, regulating Article 74 -1 of Decree 
No. 2685 of 1999)  
PAN–64 Resolution 
No. 6934/2005  Resolu ción No. 6934 de la Dirección General de 
Impuestos y Aduanas Nacionales, de fecha 8 de agosto 
de 2005, por la cual se modifica la Resolu ción No. 02199 
del 30 de  marzo de 2005  (Resolution No.  6934 of the 
National Customs and Excise Directorate, dated 
8 August  2005, amending Resolution No.  02199 of 
30 March  2005)  
PAN–65 "New decree on customs 
control for textiles to be 
issued", Vanguardia  "Se expedirá un nuevo decreto de control aduanero 
para textiles", Vanguardia (17 de agosto de 2017)  
("New decree on customs control for textiles to be 
issued", Vanguardia  (17 August  2017))  
PAN–83 Communications 
between the parties in 
the arbitration under 
Article 21.3(c)  Comun icaciones entre las partes en el arbitraje según 
el párrafo 3 c) del artículo 21, Acta de sesión 
extraordinaria de la Comisión Interinstitucional de 
Lucha contra el Contrabando, página 4 . COL-ARB-02 
(Communications between the parties in the arbitration 
under Article  21.3(c), Minutes of the Special Session of 
the Inter -Institutional Commission against Smuggling, 
p. 4, COL -ARB-02) 
PAN–84 Decree No.  436/2018  Decre to No. 436 del Ministerio de Hacienda  y Crédito 
Público de Colombia, de fecha 6 de marzo de 2018, por 
el cual se modifica el Decre to No. 2218/2017  (Decree 
No. 436 of the Ministry of Finance and Public Credit of 
Colombia, dated 6  March  2018, modifying Decree 
No. 2218/2017  WT/DS461/RW  
 
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  Exhibit  Short title  Title 
PAN–104 Circular No. 0170 Circular No.  0170 de la DIAN, de fecha 10 de octubre 
de 2002 sobre la prevención y control al lavado de 
activos (DIAN Circular No.  0170, dated 
10 October  2002, on the prevention and control of 
money laundering  
 
  WT/DS461/RW  
 
- 17 - 
 
  ABBREVIATIONS USED IN THIS REPORT  
Abbreviation  Description  
Customs Valuation Agreement  Agreement on Implementation of Article VII of the General Agreement on 
Tariffs and Trade 1994  
DIAN Dirección de Impuestos  y Aduanas Nacionales de Colombia  (National 
Customs and Excise Directorate of Colombia)  
DSB Dispute Settlement Body  
DSU Understanding on Rules and Procedures Governing the Settlement of 
Disputes  
f.o.b.  free on board 
GATT 1994  General Agreement on Tariffs and Trade 1994  
kg kilograms  
MFN Most favoured nation  
NIT número de identificación tributaria (Tax Identification Number)  
RUT registro único tributario (Single Tax Register)  
Triple A Committee  Committee on Customs , Tariffs and Foreign Trade  
UAP usuarios aduaneros permanentes (Regular Customs Users)  
USD United  States dollars  
WTO World Trade Organization  
  WT/DS461/RW  
 
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  1  INTRODUCTION  
1.1.  This report contains the findings of the Panels established separately at the request of Colombia 
and Panama under Article 21.5 of the Understanding on Rules and Procedures Governing the 
Settlem ent of Disputes (DSU) . Both proceedings relate to Colombia's compliance with the rulings 
and recommendations made by the Dispute Settlement Body (DSB) in the original proceeding in 
Colombia – Measures Relating to the Importation of Textiles, Apparel and Footwear . 
1.2.  In the original proceeding, Panama challenged the imposition by Colombia of a compound tariff 
affecting imports of textiles, apparel and footwear . The tariff was regulated by Decree  No. 074 of 
the Ministry of Trade, Industry and Tourism of Colomb ia, dated 23  January  2013 
(Decree  No. 074/2013), which was subsequently amended by Decree No. 456 of the Ministry of 
Trade, Industry and Tourism of Colombia, dated 2 8 February  2014 (Decree  No. 456/2014).1 
1.3.  The Panel found that, in certain situations involving imports of products classified in 
Chapters  61, 62, 63 and 64 of the Colombian Customs Tariff2, the compound tariff constituted an 
ordinary customs duty which exceeded the levels bound in Colombia's Schedule of Concessions, and 
was therefore incon sistent with Article II:1(b), first sentence, of the GATT 1994 . It also found that 
in those instances, the compound tariff accorded less favourable treatment than that provided for in 
Colombia's Schedule of Concessions, in a manner inconsistent with Articl e II:1(a) of the GATT  1994. 
Lastly, the Panel also found that Colombia had failed to  demonstrate that the compound tariff was 
a measure necessary to protect public morals within the meaning of Article XX(a) of the GATT 1994 
or a measure necessary to secure  compliance with the Colombian anti-money laundering legislation, 
within the meaning of Article XX(d) of the GATT 1994.3 
1.4.  The Panel Report was circulated to Members on 2 7 November  2015. On 22 January  2016, 
Colombia notified the DSB of its decision to appeal  to the Appellate Body certain issues of law and 
legal interpretations developed in the report . In its report circulated to Members on 7 June 2016, 
the Appellate Body found that, for imports of products classified in Chapters 61, 62, 63 and 64 
(except for heading 64.06, but including tariff line 6406.10.00.00) of Colombia's  Customs Tariff, in 
the instances identified in the Panel Report, the compound tariff exceeded th e tariff rate s bound in 
Colombia's Schedule of Concessions, and was therefore inconsi stent with Articles II:1(a) and  II:1(b) 
of the GATT 1994, confirming the Panel's findings in that respect .4 In addition, the Appellate Body 
found that  Colombia had failed to demonstrate that  the compound tariff was a measure necessary 
to protect public morals w ithin the meaning of Article XX(a) of the GATT 1994 or necessary to  secure 
compliance with laws or regulations which are not inconsistent with the GATT 1994 within the 
meaning of Article XX( d) of that Agreement .5 Consequently, the Appellate Body recommended that 
Colombia bring the measure found to be inconsistent with the GATT 1994 into conformity with its 
obligations under that Agreement.6 
1.5.  At its meeting on 2 2 June 2016, the DSB adopted the Appellate Body Report and the 
Panel  Report, as modified by the Appellate Body Report.7 
1.6.  At the DSB meeting held on 2 1 July 2016, Colombia stated its intention to implement the DSB's 
recommendations and rulings and indicated that it would need a reasonable period of time to do so .8 
On 8 August  2016, Panama reques ted that the reasonable period of time be determined through 
binding arbitration pursuant to Article 21.3(c) of the DSU .9 On 30 August  2016, the Director -General 
appointed Mr Giorgio Sacerdoti to act as arbitrator under Article 21.3(c) of the DSU . Mr Sacer doti 
accepted this appointment by letter dated 5 September  2016.10 
                                                
1 Panel Report, paras. 1.1, 2.1 and 2.3.  
2 Extract from Decree No. 4927/2011 (Exhibit COL -2). 
3 Panel Report, Colombia – Textiles , paras. 7.189, 7.192 -7.194, 7.471, 7.537, 7.591 -7.592 and 8.2 -8.6. 
4 Appellate Body Report, Colombia  – Textiles, paras. 6.3.a and 6.3.b.  
5 Appellate Body Report, Colombia – Textile s, paras. 6.4 -6.11. 
6 Appellate Body Report, Colombia – Textiles , para. 6.12.  
7 DSB, Minutes of the meeting held on 22 June 2016, WT/DSB/M/380, para. 9.7.  
8 DSB, Minute s of the meeting held on 21 July 2016, WT/DSB/M/383, para. 2.2.  
9 Panama's request for arbitration under Article 21.3(c) of the DSU, WT/DS461/11.  
10 Note by the Secretariat on appointment of arbitrator under Article 21.3(c) of the DSU 
(WT/DS461/12).  WT/DS461/RW  
 
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  1.7.  On 15 November  2016, the Award of the Arbitrator was circulated to Members . The Arbitrator 
determined the reasonable period of time to be seven months from the date on which the DSB 
adopted the Panel and Appellate Body reports . Accordingly, the reasonable period of time expired 
on 22 January  2017.11 
1.8.  On 13 December  2016, Colombia notified the DSB of the adoption of Decree No. 1744 of the 
Ministry of Trade, Industry and Tourism of Colombia, date d 2 November  2016, partially modifying 
the Customs Tariff (Decree No. 1744/2016) .12 This Decree modified the tariffs applicable to imports 
of products classified in Chapters 61  and 62 of the Customs Tariff, and certain items in Chapter 64 . 
Colombia indicate d that it had fully complied with the DSB's recommendations and rulings adopted 
on 22 June 2016.13 
1.9.  On 9 February  2017, Panama filed a request with the DSB for authorization to suspend 
concessions or other obligations in the amount of US$210  million , pursuan t to Article 22.2 of the 
DSU.14 In a communication of 1 7 February  2017 to the DSB, Colombia challenged the request 
submitted by Panama .15 At its meeting on 2 0 February  2017, the DSB noted that the matter raised 
by Colombia in document WT/DS461/18 had been referred to arbitration, pursuant to  Article  22.6 
of the DSU.16 
1.1  Panel establishment and composition  
1.1.1   Establishment of the compliance panel requested by Colombia  
1.10.   On 9 Febru ary 2017, Colombia requested the establishment of a compliance panel under 
Article 21.5 of the DSU .17 At the DSB meeting on 2 0 February  2017, Panama objected to the 
establishment of the compliance panel requested by Colombia, arguing that no consultations h ad 
been held .18 Without prejudice to its position that, in this case, Article 21.5 of the DSU would not 
require the request for consultations as a preliminary to the panel request, on 27 February  2017 
Colombia requested consultations with Panama pursuant to  Article 21.5 and Article 4 of the DSU and 
Article XXII of the GATT 1994.19 
1.11.   At its meeting on 6 March  2017, the DSB referred to the original Panel, if possible, the matter 
raised by Colombia in document WT/DS461/17, pursuant to Article 21.5 of the DSU.20 
1.12.   The Panel's terms of reference are the following:  
To examine, in the light of the relevant provisions of the covered agreements cited by 
the parties to the dispute, the matter referred to the DSB by Colombia in document 
WT/DS461/17 and to make such findings a s will assist the DSB in making the 
recommendations or in giving the rulings provided for in those agreements.21 
1.13.   Australia, China, Ecuador, the European Union, Guatemala, Honduras, India, Korea, the 
Russian Federation, Chinese Taipei and the United States r eserved their third -party rights to 
participate in the compliance panel proceedings.  
1.1.2   Establishment of the compliance p anel requested by Panama  
1.14.   On 9 March  2017, Panama requested consultations with Colombia under Article 21.5 and 
Article 4 of the DSU, Articl e 19 of the Agreement on Implementation of Article VII of the General 
                                                
11 Award  of the Arbitrator, Colombia – Textiles (Article 21.3(c)), para. 4.1 ( WT/DS461/13).  
12 Exhibits COL -1/PAN -1. 
13 Communication from Colombia,  WT/DS461/15.  
14 Recourse to Article 22.2 of the DSU by Panama, WT/DS461/16.  
15 Recourse to Article 22.6 of the DSU by Colombia, WT/DS461/1 8. 
16 DSB, Minutes of the meeting held on 20 February 2017, WT/DSB/M/392 , para. 8.20 . 
17 Colombia's request for the establishment of a panel, WT/DS461/17.  
18 DSB, Minutes of the meeting held on 20 February 2017, WT/DSB/M/392 , para. 9.4 . 
19 Colombia's request for consultations, WT/DS/461/19.  
20 DSB, Minutes of the meeting held on 6 March 2017, WT/DSB/M/ 393, para. 1.14 . 
21 Note by the Secretariat on the constitutio n of the Panel established at the request of Colombia, 
WT/DS461/24, para.  2. WT/DS461/RW  
 
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  Agreement on Tariffs and Trade 1994 ( Customs Valuation Agreement ) and Article XXII of the 
GATT  1994.22 The consultations took place on 2 8 March  2017. 
1.15.   On 10 May 2017, Panama requested the establishment of a panel pursuant to Article 6 and 
Article 21.5 of the DSU.23 
1.16.   At its meeting o n 19 June 2017, the DSB referred to the original Panel, if possible, the matter 
raised by Panama in document WT/DS461/22, in accordance with Article 21.5 of the DS U.24 
1.17.   The Panel's terms of reference are the following:  
To examine, in the light of the relevant provisions of the covered agreements cited by 
the parties to the dispute, the matter referred to the DSB by Panama in document 
WT/DS461/22 and to make such findi ngs as will assist the DSB in making the 
recommendations or in giving the rulings provided for in those agreements.25 
1.18.   Australia, China, Ecuador, the European Union, Guatemala, Honduras, India, Indonesia, 
Japan, Kazakhstan, Korea, the Russian Federation, Sin gapore, Chinese Taipei and the United  States 
reserved their third -party rights to participate in the compliance panel proceedings.  
1.1.3   Meeting prior to composition of the Panels  
1.19.   On 24 July 2017, in the absence of a sequencing agreement, the WTO Secretariat met  with 
the parties to ascertain their intentions with regard to the conduct of the two compliance proceedings 
and the arbitration provided for in Article 22.6 of the DSU . As a result of the meeting and subsequent 
exchanges, the parties separately expressed  the following  points of view : 
a. Both compliance proceedings (including review by the Panels and possible subsequent 
appeal) would take place prior to the arbitration provided for in Article 22.6 of the DSU ; a 
single harmonized timetable would be adopted, wit h uniform deadlines for the 
presentation of written submissions by the parties and third parties ; a single joint 
substantive meeting would be held ; and a single report would be issued;  
b. Members that reserved their third -party rights solely in connection with the compliance 
proceeding initiated at Panama's request would also have access, for practical purposes, 
to the compliance proceeding initiated at Colombia's request.  
1.1.4   Composition of the Panels  
1.20.   Pursuant to Article 21.5 of the DSU, on 6 September  201726 both Panels were composed with 
the same members as the original Panel:  
Chairman:  Mr Elbio Rosselli  
Members:  Mr Carlos Véjar Borrego  
Mr Fabián Villarroel Ríos 
1.21.   For ease of reference, the term "Panel" will be used in the singular in this report to refer to 
both panels . If one panel needs to be referred to in particular, it will be expressly identified.  
                                                
22 Panama's request for consultations, WT/DS461/21.  
23 Panama's request for the establishment of a panel, WT/DS461/22.  
24 DSB, Minutes of the meeting held on 19 June 2017, WT/DSB/M/3 98, para. 6.9.  
25 Note by the Secretariat on the constitution of the Panel established at the request of Panama, 
WT/DS461/25, para. 2.  
26 On the same date, 6 September 2017, and in accordance with Article 22.6 of the DSU, the Arbitrator 
was constituted with the original panelists (Note by the Secretariat on recourse to Article 22.6 of the DSU by 
Colombia, WT/DS461/23).  WT/DS461/RW  
 
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  1.2  Panel proceedings  
1.22.   After consultation with the parties and in the light of the views expressed  by them (see 
para. 1.19 above), the Panel adopted harmonized working procedures on 15  September  2017.27 In 
particular, paragraph 5 of the harmonized working procedures provides that "[the] Panel shall hold 
a joint substantive meetin g and shall issue a single report concerning  both proceedings".  
1.23.   The Panel also adopted a harmonized timetable for both proceedings on 19  September  2017. 
The harmonized timetable was modified on 18  January, 2 3 March , 5 April, 25 Ma y, 14 June and 
20 July 2018. 
1.24.   In a communication dated 1 2 January  2018, Colombia stated that it was having difficulties in 
accessing some of the exhibits provided by Panama, since they were not available among the printed 
exhibits or in the CD -ROMs or the Digital Dispute Settlemen t Registry .28 In view of the foregoing, 
Colombia asked that Panama make available the exhibits concerned . In addition, considering that 
situation and the range of exhibits submitted by Panama to date, Colombia asked the Panel for an 
extension of the period of time for presenting respondent second written submissions . On 
16 January  2018, Panama submitted the exhibits requested by Colombia and stated that it had no 
objections to the request for extending the deadline . On 18 January  2018, the Panel established new 
deadlines for the presentation of respondent second written submissions and third -party 
submissions.  
1.25.   In a communication of 2 6 January  2018, Panama informed the Panel that it had taken 
cognizance of two new regulatory instruments issued by the Colombian  Government which were, on 
their face, related to the matters dealt with in this dispute . The instruments in question were Decree 
No. 2218 of the Ministry of Finance and Public Credit of Colombia, dated 27  December  2017, 
adopting measures for the preventio n and control of customs fraud in connection with imports of 
fibres, yarns, fabrics, clothing  and footwear (Decree No. 2218/2017)29, and Joint Circular 001 of the 
Ministry of Trade, Industry and Tourism of Colombia, dated 19  January  2018, on the administrat ion 
of Decree No. 2218/2017 .30 On 31 January  2018, Colombia requested that neither Panama's 
communication nor the exhibits should be deemed to have been submitted and that, otherwise, the 
period of time for presenting its second written submission as respon dent should be extended . On 
2 February  2018, Panama expressed its disagreement with those requests . On 6 February  2018, the 
Panel informed the parties that it rejected Colombia's request.  
1.26.   In a communication dated 1 5 March  2018, Panama informed the Panel that it had taken 
cognizance of the enactment of Decree No. 436 of the Ministry of Finance and Public Credit 
of Colombia, dated 6 March  2018, amending Decree No. 2218/2017 (Decree No. 436/2018).31 
1.27.   The Panel held a substantive meeting with the parties on 20 and 2 1 March  2018. The 
third-party session took place on 2 1 March  2018. 
1.28.   On 2 3 March  2018, the Panel, after consulting the parties and in order to preserve the 
procedural rights of Colombia, accorded to Colombia the possibilit y of presenting its arguments 
relating to Decree No. 2218/2017 in an additional written submission no later than 2 0 April 2018. 
1.29.   In a communication dated 4 April 2018, Colombia requested an extension of the deadline for 
responding  to the questions posed  by Panama and by the Panel . On 5 April 2018, Panama indicated 
that it had no objections to Colombia's request and asked that, if the request were approved, the 
time-limit for submitting comments on the re sponses  should be extended . On the same date, the 
Panel  set new time -limits for the submission of responses to qu estions from the Panel and the 
parties, and for the submission of comments on those responses.  
                                                
27 See the Panel's Working Procedures in Annex A -1. 
28 Specifically, Exhibits PAN -18, PAN -19 and PAN -20. 
29 Decree No. 2218/2017 (Exhibit PAN -43). 
30 Joint Circular No - 001/2018 (Exhibit PAN -44). 
31 Decree No. 436/2018 (Exhibit PAN -84). WT/DS461/RW  
 
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  1.30.   On 28 May 2018, the Panel issued the descriptive part of its Report to the Parties . The Panel 
issued it s Interim Report to the p arties on 26 June 2018. The Panel issued its Final Report to the 
parties on 26 July 2018 . 
2  FACTUAL ASPECTS  
2.1  Introduction  
2.1.  This dispute concerns certain measures adopted by Colombia subsequent to the adoption of 
the DSB's rulings and r ecommendations in the original proceeding, Colombia – Measures Relating to 
the Importation of Textiles, Apparel and Footwear .32 
2.2.  The Parties disagree as to which measures adopted by Colombia are "measures taken to 
comply" with the DSB's rulings and recommendations within the meaning of Article 21.5 of the DSU . 
In the light of that disagreement, the Panel will confine itself, in this section of its report, to 
describing the measures identified by Colombia and Panama as measures at issue . Insofar as the 
parties disagree on this or any other factual issue that needs to be resolved, the Panel will address 
it in its findings.  
2.2  Measures at issue according to Colombia  
2.3.  In its panel request, referring to its statement before the DSB mentioned in paragraph  1.8 
above, Colombia explains that it "replaced the compound tariff with an ad valorem  tariff that does 
not exceed Colombia's WTO bound tariffs, and in that sense, it h as brought the measure subject to 
the DSB's recommendations into compliance with its WTO obligations".33 
2.4.  Colombia refers to the adoption on 2 November  2016 of Decree No. 1744/201634 modifying 
the tariffs applicable to imports of products classified in Chapte rs 61 and 62 of the Customs Tariff, 
and certain items in Chapter 64 .35 Articles 1 to 3 of Decree No. 1744/2016, which are reproduced 
below, specify how the new ad valorem  tariffs operate:  
ARTICLE 1 . Establishment of a tariff of forty per cent  (40%) on impor ts of products 
classified in Chapters 61 and 62 of the National Customs Tariff, when the  declared 
f.o.b.  price is lower  than or equal to US$10 per gross kilogram.  
ARTICLE 2 . Establishment of a tariff of thirty -five per cent  (35%) on imports for which 
the declared f.o.b. price is lower than or equal to the threshold specified for the following 
tariff headings:  
TARIFF 
HEADING  US$/P AIR 
THRESHOLD  
6401 6 
6402 6 
6403 10 
6404 6 
6405 7 
 
Paragraph : For imports of subheading 6406.10.00.00 ("uppers") the tariff established 
in this article shall  be applied when the declared f.o.b. price is lower  than or equal to 
US$5 per gross kilogram.  
ARTICLE 3 . The products classified in Chapters 61, 62 and 64 of the Customs Tariff 
that are not subject to the tariff set forth in Articles 1 and 2 of this Decree shall be 
subject to the tariff provided for in Decree 4927 of 2011 and the amendments thereto.  
                                                
32 DSB, Minutes of the meeting  held on 22 June 2016 , WT/DSB/M/380 , para. 9.7.  
33 Colombia's request for the establishment of a panel, WT/DS461/17 , p. 1.  
34 Decree No. 17 44/2016 ( Exhibit s COL-1/PAN-1). 
35 Colombia's request for the establishment of a panel, WT/DS461/17 , p. 2.  WT/DS461/RW  
 
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  2.5.  As indicated in the aforementioned Article 3, for imports of produ cts classified in Chapters  61, 
62 and 64 of the Customs Tariff that are not subject to the  tariff set forth in Decree No.  1744/2016, 
the applicable tariff is the one provided for in Decree No. 4927 of the Ministry of Trade, Industry and 
Tourism of Colombia , dated 2 6 December  2011, adopting the Customs Tariff and other provisions 
(Decree No. 4927/2011) and the amendments thereto .36 The Decree in question, No. 4927/2011, 
contains the Colombian Customs Tariff in force since 1 January  2012.37 
2.6.  For imports of the other products that were subject to the compound tariffs introduced by 
Decree No. 456/2014, including the products classified in Chapter 63 of the Customs Tariff and those 
classified under the headings of Chapter 64 not mentioned above, the applicable tariff, as from 
2 November  2017, would be the one provided for in Decree No. 4927/2011 or any amending 
decree.38 
2.7.  The difference between the most-favoured -nation ( MFN) tariff applicable to imports of the 
relevant products wit h a free on board  (f.o.b. ) price equal to or lower than the thresholds provided 
for in Articles 1 and 2 of Decree No.  1744/2016 , and the MFN tariff applicable to imports with an 
f.o.b. price exceeding those thresholds , may be summarized as follows:  
Table 1: Difference between tariffs  
Product  MFN tariff where f.o.b. 
price does not exceed 
the respective threshold  MFN tariff where f.o.b. 
price exceeds t he 
respective threshold 
(Decree  No. 4927/2011  
and amendments thereto ) 
Chapter  61 40% 15% 
Chapter  62 40% 15% 
Chapter  63 No differentiated regime  
Headings 64.01 to 64.05  35% 15% 
Heading 64.06  No differentiated regime  
- Subheading  6406.10.00.00  35% 10% 
Source : Prepared by the Secretariat.  
2.8.  Article 6 of Decree No. 1744/2016 provides that the tariffs thereunder would be in 
force for a period of one year from the date of their entry into force, 2 November  2016. On 
2 November  2017, Colombia issued Decree No. 1786 of the Ministry of Trade, Industry and Tourism 
of Colomb ia, dated 2 November  2017, partially modifying the Customs Tariff (Decree 
No. 1786/2017) .39 Article 6 of Decree No. 1786/2017 establishes the same tariffs as Decree 
No. 1744/2016, which will be in force for a period of two years from the date of their entry  into 
force, 2 November  2017. 
2.9.  The determination of the thresholds under Decrees No. 1744/2016 and No. 1786/2017 is 
carried out on the basis of the thresholds previously in force under Decrees No. 074/2013, 
No. 456/2014 et seq., taking into account the pric es used by the National Customs and Excise 
Directorate of Colombia (DIAN) to establish the risk profiles and average price of imports in a period 
preceding the issuance of those decrees (the average in question being US$10.4/kg for clothing and 
US$6.8/pair  for footwear).40 
                                                
36 Decree No. 1744/2016  (Exhibits COL -1/PAN -1), Article 3 . 
37 Extract from Decree No. 4927/2011 (Exhibit COL -2). 
38 Colombia's second written submission  as complainant, para. 44.  
39 Decree No. 1786/2017 (Exhibit PAN -45). 
40 Colombia's response to Panel question No. 1 , para. 3 . WT/DS461/RW  
 
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  2.3  Measures at issue according to Panama  
2.3.1   Introduction  
2.10.   In its panel request41, Panama identifies as measures at issue, inter alia : 
a. The requirement of a security for the release of goods under Chapters 61, 62 and 64 of 
the Colombian Customs Tariff, when priced at or below certain thresholds (the "specific 
bond"), as contained in Decree No. 1745 of the Ministry of Finance and Public Cre dit of 
Colombia, dated 2  November  2016, adopting measures for the prevention and control of 
customs fraud in connection with imports of clothing and footwear (Decree 
No. 1745/2016)42; and 
b. The customs and tariff regime applicable to imports of goods under th ose Chapters, when 
priced at or below the thresholds established by Colombia in the above -mentioned Decree 
No. 1745/2016 (the "special import regime").  
2.11.   In its written submissions, Panama identifies as measures at issue the specific bond and the 
special imp ort regime, both with the characteristics described in Decree No. 1745/201643 and, 
following its enactment, with the characteristics described in Decree No. 2218/2017.44 
2.12.   Panama's request included two additional measures, namely the "entry restricted to speci fic 
ports of entry" and the "customs duty" (i.e. the ad valorem  tariff of Decree No.  1744/2016 described 
in section 2.2 above) . The respective claims were not subs equently developed by Panama . When 
consulted about this on 1 0 April 2018, Panama informed the Panel that it does not maintain its 
claims with regard to those measures.45 
2.13.   Set out below are the measures challenged by Panama, in relation to the corresponding 
regulations.  
2.3.2   Measures challenged by Panama as contained in Decree No. 1745/2016  
2.3.2.1   Scope and application of Decree No. 1745/2016  
2.14.   On 2 November  2016, Colombia issued Decree No. 1745/2016 "establishing mechanisms to 
strengthen the risk management system and customs control in the face of possible situations of 
customs fraud associated with imports of clothing and footwear" .46 Decree No. 1745/2016 entered 
into force on 2 November  2016, the date of its publication in the Official Journal47, and was repealed 
on 27 December  2017 by Decree No. 2218/2017 (see section 2.3.3.1  below) . The mechanisms 
established by Decree No. 1745/2016 are additional to the import requirements prescribed in 
Colombia's general import regime.48 
2.15.   With regard to the scope of Decree No. 1745/2016, Article 2 thereof provides as follows:  
ARTICLE 2 . Scope . Imports of products co nsisting of clothing and footwear under 
Chapters  61, 62 and 64 of the Customs Tariff, for which the declared f.o.b. price is lower than 
or equal to the threshold established in Article 3 of this Decree, shall be subject to the 
measures set out herein.  
 
                                                
41 Panama's request for the establishment of a panel  (WT/DS461/22 , sections I.A and I.C.  
42 Decree No. 1765/2016 ( Exhibit PAN -2). 
43 Panama's first written submission as complainant, para. 15. See also Panama's first written 
submission as respondent, paras. 5, 32 and 90(i); and  second  written submission  as complainant, paras. 57 
and 285.  
44 See for example, Panama's second written submi ssion as respondent, paras. 6 -11. 
45 Panama's response to Panel questions No s. 50 and 51.  
46 Decree No. 1745/2016  (Exhibit PAN -2), Article 1 . 
47 Extract from the Official Journal of Colombia, 2 November 2016 ( Exhibit COL -12). 
48 This regime is contained in Dec ree No. 2685 /1999 (Exhibit PAN -3) and Decree No. 390 /2016  
(Exhibit  PAN-4), and the amendments and regulations thereto. (Colombia's response to Panel question No. 12 , 
para. 36 .)  WT/DS461/RW  
 
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  2.16.   As indicated in Article 2 itself, the relevant thresholds are established  in Article 3 of the Decree  
in question . These thresholds differ from those established in Decree No. 1744/2016 , as described 
in paragraph 2.4 above . Article 3 of Decree No. 1745/2016 provides as follows:  
ARTICLE 3 . Thresholds for strengthening the risk management and customs control 
system . The measures provided for in this Decree shall be app licable to imported goods for 
which the declared f.o.b. price is lower  than or equal to the threshold determined for the 
following tariff headings and subheading:  
 
Clothing : 
 
TARIFF  
HEADING  GROSS 
US$/KG 
THRESHOLD  
61.01 10 
61.02 10 
61.03 6 
61.04 6 
61.05 5 
61.06 5 
61.07 3 
61.08 3 
61.09 3 
61.10 6 
61.11 7 
61.12 9 
61.13 10 
61.14 9 
61.15 3 
61.16 3 
61.17 4 
62.01 10 
62.02 10 
62.03 7 
62.04 5 
62.05 7 
62.06 7 
62.07 3 
62.08 5 
62.09 3 
62.10 9 
62.11 9 
62.12 5 
62.13 3 
62.14 3 
62.15 3 
62.16 3 
62.17 3 
 WT/DS461/RW  
 
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  Footwear:  
TARIFF  
HEADING  US$/PAIR  
THRESHOLD  
64.01 3 
64.02 2 
64.03 7 
64.04 3 
64.05 4 
 
TARIFF  
SUBHEADING  GROSS 
US$/KG 
THRESHOLD  
6406.10.00.00  2 
 
Paragraph : The Government shall revise the thresholds established in this Article annually 
or at shorter intervals when  foreign trade trends  so warrant . 
 
2.17.   In order to determine the thresholds of Decree No. 1745/2016, Colombia estimated the 
implicit price of imports (US$/net k g; US$/pair) per tariff heading . For this purpose, consideratio n 
was given to the prices used by the DIAN to establish risk profiles  and the information on 
monthly  imports  of products during the period 2010 -2017 (excluding imports registered under the 
re-import regime and the temporary import systems for inward proces sing). Using this information, 
the threshold was estimated in terms of the average value of the implicit price corresponding to the 
tenth percentile of each tariff heading group, for the period 2010 -2017.49 
2.18.   Article 9 of Decree No. 1745/2016 provides that, if in the course of ex post  control procedures, 
goods covered by Article 3 that have been shipped after its entry into force are found not to be in 
compliance with the requirements of that article, they shall be subject to seizure.50 
2.19.   During the period from 4 November  2016 to 3 1 December  2017, the total number of import 
declarations concerning products covered by Decree No. 1745/2016, independently of their declared 
f.o.b. price, was 332,744 . Of those import declarations, 331,942 cont ained prices above the 
thresholds and 802 contained prices below the thresholds.51 
2.20.   The Panel now proceeds to describe  the measures contained in this Decree which are 
challenged by Panama.  
2.3.2.2   The specific bond under Decree No. 1745/2016  
2.21.   This measure consists of  the requirement imposed on importers of clothing and footwear 
classified in Chapters 61, 62 and 64 of the Colombian Customs Tariff to post a specific bank or 
insurance guarantee in order to secure release of the imported goods when the declared f.o.b. pri ce 
is lower than or equal to a certain threshold . The specific bond is contained in Article 7 of Decree 
No. 1745/2016, which provides as follows:  
ARTICLE 7 . Guarantee . Once all the requirements stipulated in this Decree have been 
met, the importer, as a pr erequisite for the release of the goods referred to in Article 3 
of this Decree, shall furnish a specific bank or insurance guarantee of 200 % of the unit 
"threshold" price established in that article, multiplied by the quantity imported, for a 
period of th ree (3) years, for the purpose of guaranteeing payment of the customs taxes  
and penalties that may apply.  
                                                
49 Colombia's response to Panel question No. 1 , para. 4 . 
50 The concept of seizure is regulated under the general customs regime in Article 550 of Decree 
No. 390/2016. This article was amended by Decree No. 349/2018 (Exhibit COL -47). (Colombia's response to 
Panel question No. 40 , para. 219 .) 
51 DIAN prese ntation on  customs fraud (Exhibits COL -28 and COL -29); List of 802 import declarations 
(Exhibit COL -39); and  Colombia's response to Panel questions No. 6(a), para. 20, and No. 6(b), para. 21.  WT/DS461/RW  
 
- 27 - 
 
  The fact of having provided a general  guarantee or not having the obligation to do so 
shall not exempt the importer from the obligation mentioned here in. 
Should 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 custody of guarantees 
shall apply in determining the customs value of the imported goods and the penalty.  
Once the release has been authorized, if appropriate, the Customs Operation 
Management Division, or whichever service is acting on its behalf, shall submit to th e 
Inspection Management Division copies of the declaration together with supporting 
documents, and of the guarantee and the inspection report, in accordance with its remit.  
2.22.   Therefore, any importer of clothing  and footwear classified in Chapters 61, 62 and 64 of 
Colombia's Customs Tariff will be obliged to post a specific bank or insurance guarantee for an 
amount equivalent to 200 % of the corresponding threshold price, multiplied by the quantity imported  
(see para. 2.16 above) , in order to obtain the release of the imported goods when the declared f.o.b. 
price is lower than or equal to the threshold . The guarantee will have to be posted for a period of 
three  years . The fact of posting a general guarantee or not being obliged to do so does not exempt 
the importer from the obligation to post the specific guarantee stipulated in this article.  
2.3.2.3   Special import regime under Decree No. 1745/2016  
2.23.   This measure would comprise va rious aspects of the special import regime established under 
Decree No. 1745/2016, which is applicable to imports of clothing and footwear classified in 
Chapters  61, 62 and 64 of Colombia's Customs Tariff, when the declared f.o.b. value of the relevant 
imported products is lower than or equal to the thresholds established in Article 3 of that Decree 
(see para. 2.16 above) . The aspects in question would include the s pecific bond described as a 
separate measure in the previous section and other requirements set out in the articles referred to 
below.  
2.3.2.3.1   Documenta ry and certification requirements  
2.24.   Article 4 of Decree No. 1745/2016 establishes certain documentation and certif ication 
requirements, as follows:  
ARTICLE 4 . Importation . Natural or legal persons seeking to import into the national 
customs territory and/or to bring into a free zone goods from abroad consisting of 
clothing and footwear classified in the headings and s ubheading of the Customs Tariff 
listed in Article 3 of this Decree, at a price lower than or equal to the threshold specified 
in that article, shall be required to provide evidence to the Customs Operation 
Management Division (or whichever service is actin g on its behalf) of the Sectional 
Customs and Excise Directorate with jurisdiction over the place of arrival, that the 
following requirements  have been met : 
1. Without prejudice to submission of the advance declaration in the terms and in 
the manner prescribed by the National Customs and Excise Directorate, the 
importer, which must also be the consignee, shall be required, at least one month 
in advance of the arrival of the goods in the national customs territory, to submit 
for each shipment the ident ity and liability form, under such terms and conditions 
as may be specified by the National Customs and Excise Directorate for that 
purpose, accompanied by the following documents:  
(a) Certification from the foreign supplier, apostilled or legalized with a n official 
translation into Spanish, showing 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 Statute, 
and also providing the add ress, 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.  WT/DS461/RW  
 
- 28 - 
 
  (b) Apostilled or legalized certification, with an official translation into Spanish, 
of the existence of the foreign supplier, to be issued by the entity in the 
exporting country that keeps the official register of producers or traders . 
Should no such entity exist, the importer must testify to tha t fact under 
oath, which shall be deemed to be have been taken by the signing of the 
document, without prejudice to the supervisory and inspection powers of 
the National Customs and Excise Directorate.  
(c) List of distributors in Colombia of the good s to be imported, indicating their 
tax identification number (NIT), business name, address, telephone 
number and email address.  
(d) Declaration signed by the legal representative of the customs agency, 
where appropriate, certifying that they have conducted a bac kground check 
on the customer for the importer for which they are  to act as customs 
broker, and indicating how long the parties have worked together.  
(e) Declaration signed by the importer or the importer's legal representative, 
certifying the following:  
(i) that the value to be declared for the goods being imported 
corresponds to the price actually paid or payable;  
  (ii) the address of the storage facilities for the goods being imported;  
(iii) detailed information on the distribution and marketing chain i n 
Colombia for the goods being imported;  
(iv) that they are aware that the customs authority is entitled to submit 
the documents related to the import transaction to the Attorney 
General 's Office and the Financial Information and Analysis Unit 
(UIAF).  
2. Without prejudice to the presence of the customs representative from the 
customs agency, where action is taken through the latter, the importer, the legal 
representative or the agent of the importing company must be present for the 
process of customs inspec tion or examination  (aforo) of the goods . For this 
purpose, the importer's agent must be different from the customs agency . The 
absence of the importer, the legal representative or the agent of the importing 
company shall result in  the non-admissibility or  non-authorization of release.  
Paragraph 1 . The identity and liability form and the documents referred to in this 
article shall constitute supporting documents for the import declaration.  
Failure to submit or the extemporaneous submission of these documents shall result in  
the non -admissibility or non -authorization of release.  
Paragraph 2 . In the case of goods that are to be imported from a free zone to the 
remainder of the national customs  territory, the importer must be the same as the 
consignee whose name appears in the transport document with which the goods entered 
the free zone, unless it is a matter of products classified under subheading  6406100000 
and consigned to an industrial user  of goods or of goods and services.  
In the event that the consignee  and the importer are not the same , this will result in  
the non -admissibility or non -authorization of release.  
2.25.   Thus, in order to be able to import goods regulated by Decree No. 1745/2016 at  prices equal 
to or below the thresholds prescribed in that Decree (see paragraph 2.16 above), importers are 
required to submit a set of documents to the customs au thority at least one month in advance of 
the arrival of the goods in Colombian territory . Likewise, such importation requires the physical 
presence of the importer, the legal representative or the agent of the importing company, as WT/DS461/RW  
 
- 29 - 
 
  appropriate, during the process of customs inspection or examination of the goods . If the importer 
does not submit the required documents or does so extemporaneously, the goods cannot be 
released.  
2.3.2.3.2   Authorized entry sites  
2.26.   Article 5 of Decree No. 1745/2016 provides for the possibili ty of designating authorized sites 
for the entry of such goods in the following terms:  
ARTICLE 5 . Authorized entry sites . In order to strengthen customs control and the 
risk management system within the ten (10) days following the entry into force of this 
Decree, the National Customs and Excise Directorate shall establish by administrative 
decision the authorized sites for the importation of clothing and footwear classified in 
the headings and subheading of the Customs Tariff referred to in Article 3 of thi s Decree.  
2.27.   The DIAN would therefore be empowered to determine what would be the authorized sites for 
the import of goods under the decree within ten days following its entry into force . The DIAN did not 
determine the entry sites in accordance with this prov ision during the period of validity of Decree 
No. 1745/2016.  
2.3.2.3.3   Import operations observers  
2.28.   Article 6 of Decree No. 1745/2016 provides for the intervention of import operations 
observers in the following terms:  
ARTICLE 6 . Import Operations Observers . The National Customs and 
Excise  Directorate shall provide the Import Operations Observers with information to be 
constituted by resolution of that entity, which shall be issued within sixty  (60) calendar 
days following the entry into force of this Decree ; the resolution in question shall also 
establish the procedure for the provision of the information to the said observers.  
The observer shall provide cooperation and collaboration required by the 
customs  authority, including the technical report, where appropri ate, on the tariff 
classification, identification, quantity, description, weight and price of the goods, among 
other aspects.  
For the purposes of this Decree, the role of the observer shall be confined to analysing 
the information and generating alerts to the customs authority, as well as closely 
monitoring the conduct of the inspection or examination  procedure with respect to the 
goods classified under the headings listed in Article 3 of this Decree.  
The customs authority shall safeguard the confidentialit y of the information, taking into 
account the provisions of the Political Constitution and Laws 863 of 2003 and 1712 of 
2014 and other amending or supplementary regulations . 
2.29.   Decree No. 1745/2016 would therefore permit the participation of import operations  
observers, whose role is to analyse the information supplied and generate alerts to the customs 
authority, and also to closely monitor the inspection or examination  procedure  with respect to the 
corresponding goods.52 
                                                
52 The Colombian customs regime envisages the use of import operations obs ervers for all types of 
imports. The observers are members of Colombian private industry and are selected from lists of candidates 
submitted by the trade associations and approved by the Joint National Commission on Tax Management. The 
observers work volun tarily, at the request of the interested trade associations, generating no costs for the 
Colombian State. The observers make non -binding recommendations to the customs officials. (Decree 
No. 2685/1999 (Exhibit PAN -3), Article 74 -1 and Decree No. 390/2016 ( Exhibit PAN -4), Article 183.) See 
Colombia's response to Panel questions Nos. 38b, c, d and f, paras. 210 -215 and Resolution No. 6934/2005 
(Exhibit PAN -64). WT/DS461/RW  
 
- 30 - 
 
  2.3.2.3.4   Risk management  
2.30.   With respect to risk m anagement, Article 8 of Decree No. 1745/2016 provides as follows:  
ARTICLE 8 . Risk m anagement . Importers that declare goods consisting of clothing  
and footwear classified under the headings and subheading of the Customs Tariff listed 
in Article 3 of this De cree, at a price lower than or equal to the threshold specified in 
that Article, must be reported to the Operational Analysis Management Subdirectorate 
of the National Customs and Excise Directorate so that the information concerning such 
operations can be  incorporated in the risk management system.  
2.31.   Consequently, the DIAN will be informed of any importers of clothing and footwear classified 
in Chapters 61, 62 and 64  of Colombia's Customs Tariff at prices lower than or equal to the respective 
thresholds , so that these operations can be incorporated in the risk management system.53 
2.3.3   Measures challenged by Panama as contained in Decree No. 2218/2017  
2.3.3.1   Scope and application of Decree No. 2218/2017  
2.32.   On 2 7 December  2017, Colombia issued Decree No. 2218/2017 repealing D ecree 
No. 1745/2016 . Decree No. 2218/2017 establishes "mechanisms to strengthen the risk 
management system and customs control in the face of possible situations of customs fraud 
associated with imports of fibres, yarns, fabrics, clothing and footwear" .54 Decree No. 2218/2017 
entered into force on 27  December  2017, the date of its publication in Colombia's Official Journal .55 
The mechanisms established by Decree No. 2218/2017 are additional to the import requirements 
prescribed in Colombia's general import re gime.56 
2.33.   With regard to the scope of Decree No. 2218/2017, Article 2 thereof provides as follows:  
ARTICLE 2 . Scope . Imports of products consisting of fibres, yarns, fabrics, clothing  
and footwear under Chapters 52, 53, 54, 55, 56, 58, 59, 60, 61, 62, 63 and 64 of the 
Customs Tariff, for which the declared f.o.b. price is lower than or equal to the threshold 
established in Article 3 of this Decree, shall be subject to the measures provided for 
herein.  
2.34.   As indicated in Article 2 itself, the relevant thresholds a re established in Article 3 of the same 
decree , which provides as follows:  
ARTICLE 3 . Thresholds for strengthening the risk management and customs 
control system . The measures envisaged in this Decree shall apply to imported goods 
with a declared f.o.b. pr ice lower than or equal to the threshold prescribed for the 
following tariff headings and subheading:  
Yarns  
                                                
53 Panama's request for the establishment of a panel, WT/DS461/22, section D.  
54 Decree No. 2218/2017  (Exhibit PAN -43), Article 1. On 6 March 2018, Colombia issued Decree 
No. 436/2018 (Exhibit PAN -84) amending Decree No. 2218/2017. The second preambular paragraph of Decree 
No. 436/2018 explains that the purpose of the decree is "to provide some details co ncerning the conditions laid 
down in Decree 2218 of 2017 with respect to the goods subject to control therein". In particular, changes were 
made to some of the thresholds established in Article 3 (Thresholds for strengthening the risk management 
and custom s control system), the paragraphs of Article 4 (Importation) and the whole of Article 10 (Seizure 
and confiscation). Panama has not requested the Panel to rule on these changes.  
55 Colombia's response to Panel question No. 8, para. 26 and extract from the O fficial Journal of 
Colombia, 27 December 2017 (Exhibit COL -13). 
56 See footnote 48. TARIFF 
HEADING  US$/KG 
THRESHOLD  
5205 2.00 
5402 2.00 
5509 2.00 
5510 2.00 WT/DS461/RW  
 
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Fibres  
TARIFF 
HEADING  US$/KG 
THRESHOLD  
5503 1.00 
5504 1.00 
5505 1.00 
5506 1.00 
5507 1.00 
 
Fabrics  
TARIFF 
HEADING  US$/KG 
THRESHOLD  
5208 2.50 
5209 2.50 
5210 2.50 
5211 2.50 
5212 2.50 
5309 2.50 
5407 2.50 
5408 2.50 
5512 2.50 
5513 2.50 
5514 2.50 
5515 2.50 
5516 2.50 
5601 2.50 
5801 2.50 
5802 2.50 
5803 2.50 
5804 2.50 
5805 2.50 
5806 2.50 
5901 2.50 
5903 2.50 
5906 2.50 
5907 2.50 
5910 2.50 
5911 2.50 
6001 2.50 
6002 2.50 
6003 2.50 
6004 2.50 
6005 2.50 
6006 2.50 
 
Clothing  
HEADING  US$/KG 
THRESHOLD  
6101 10.00 
6102 10.00 
6103 5.00 
6104 8.00 
6105 5.00 
6106 5.00 
6107 5.00 WT/DS461/RW  
 
- 32 - 
 
  HEADING  US$/KG 
THRESHOLD  
6108 5.00 
6109 5.00 
6110 8.00 
6111 5.00 
6112 8.00 
6113 10.00 
6114 10.00 
6115 5.00 
6116 5.00 
6117 5.00 
6201 10.00 
6202 10.00 
6203 5.00 
6204 5.00 
6205 10.00 
6206 8.00 
6207 5.00 
6208 5.00 
6209 5.00 
6210 8.00 
6211 10.00 
6212 5.00 
6213 5.00 
6214 5.00 
6215 5.00 
6216 5.00 
6217 5.00 
 
Made  up textile articles  
HEADING  US$/ KG 
THRESHOLD  
6301 2.0 
6302 2.0 
6303 1.5 
6304 4.5 
 
Footwear  
HEADING  US$/P AIR 
THRESHOLD  
6401 3.0 
6402 3.0 
6403 8.0 
6404 3.0 
6405 4.0 
 
TARIFF 
SUBHEADING  US$/ KG 
THRESHOLD  
6406.10.00.00  2.0 
 
Paragraph : The Government shall revise the thresholds established in this article 
annually or at shorter intervals when  foreign trade trends so warrant . WT/DS461/RW  
 
- 33 - 
 
  2.35.   The thresholds of Decree No. 2218/2017 were determined in accordance with the same 
methodology applied in connection with Decree No. 1745/2016, as described in paragraph  2.17 
above.57 
2.36.   Article 1 0 of Decree No. 2218/2017 provides that, if in the course of ex post  control 
procedures, goods covered by Article 3 that have been shipped after its entry into force are found 
not to be in compliance with the requirements of that Article, they shall be sub ject to seizure . The 
seized goods may under no circumstances be the subject of legalization or recovery.58 
2.37.   The Panel now proceeds to de scribe the measures contained in this Decree that are challenged 
by Panama.  
2.3.3.2   The specific bond under Decree No. 2218/2017  
2.38.   This measure consists of the requirement imposed on the importer of clothing and footwear 
classified in Chapters 52, 53, 54, 56, 58, 59, 60, 61, 62, 63 and 64 of Colombia's Customs  Tariff, 
when a valuation dispute arises, to post a specific bank or insuran ce guarantee in order to secure 
release of the imported goods where the declared f.o.b. price is lower than or equal to a certain 
threshold . The specific bond is contained in Article 7 of Decree No. 2218/2017, as follows:  
ARTICLE 7 . Guarantee . In the case of goods covered by the scope of application of 
this Decree, if the valuation dispute arises in connection with the inspection or 
examination procedure, and it becomes necessary for that reason to delay the final 
determination of the customs value of the g oods, in accordance with Article 13 of the 
Customs  Valuation Agreement of the World Trade Organization, the importer may 
secure release by posting a guarantee sufficient to ensure payment of any customs 
taxes, penalties and interest that may apply . 
The gua rantee shall be accorded on a value equivalent to two  hundred  per cent  (200%) 
of the difference between the f.o.b. price declared by the importer and the result of 
multiplying the threshold unit price established in Article 3 of this Decree by the 
imported  quantity . 
The guarantee must be from a bank or insurance company . There shall be no possibility 
of posting a guarantee in the form of a monetary deposit.  
The period of validity of the guarantee shall be three (3) years.  
The fact of having provided a gener al guarantee or not having the obligation to do so 
shall not exempt the importer from the obligation mentioned herein.  
Once the release has been authorized, the Customs Operation Management Division, or 
whichever service is acting on its behalf, shall subm it to the Inspection Management 
Division copies of the import declaration together with supporting documents, and of 
the guarantee and the inspection report in accordance with its remit.  
2.39.   Thus, in cases where a valuation dispute arises in connection with th e inspection or 
examination procedure, the importer of clothing  and footwear will be obliged to post a specific bank 
or insurance guarantee for an amount equivalent to 200 % of the difference between the declared 
f.o.b. price and the result of multiplying t he threshold unit price (see paragraph 2.34 above) by the 
quantity imported, in order to secure the release of the imported goods when the declared f.o.b. 
price is  lower than or equal to that threshold . The guarantee must be constituted for a period of 
three years and may not be constituted in the form of a monetary deposit.  
2.3.3.3   Special import regime under Decree No. 2218/2017  
2.40.   This measure would comprise different aspec ts of the special import regime established by 
Decree No. 2218/2017, applicable to imports of clothing and footwear classified in Chapters 52, 53, 
                                                
57 See paragraph 2.17 above. Colombia's response to Panel question No. 1, para. 4.  
58 See footnote 50. WT/DS461/RW  
 
- 34 - 
 
  54, 55, 56, 58, 59, 60, 61, 62, 63 and 64 of Colombia's Customs Tariff, where the declared f.o.b. 
value of th e relevant imported products is lower than or equal to the thresholds established in  
Article  3 of that Decree (see para. 2.34 above) . Those aspects would include t he specific bond 
described as a separate measure in the previous section as well as other requirements contained in 
Articles 4, 5, 6 and 8 of Decree No. 2218/2017.  
2.41.   With regard to the requirements concerning the presence of import operations observers 
(Article 6) and risk management (Article 8), see sections 2.3.2.3.3 -2.3.2.3.4  of this Report, which 
describe such requirements with respect to identical provisions in Decree No.  1745/2016 . The Panel 
will now describe  the requirements contained in Articles 4 and 5 of Decree No.  2218/2017, which 
exhibit some discrepancies with respec t to the respective Articles 4 and 5 of Decree No. 1745/2016.  
2.3.3.3.1   Documenta ry and certification requirements  
2.42.   With regard to the documenta ry and certification requirements, Article 4 of Decree 
No. 2218/2017 provides as follows:  
ARTICLE 4 . Importation . Natural or legal persons seeking to import into the national 
customs territory and/or to bring into a free zone goods from abroad  consisting of fibres, 
yarns, fabrics, clothing and footwear classified in the subheadings of the Customs Tariff 
listed in Article 3 of  this Decree, at a price lower than or equal to the threshold specified 
in that Article, shall be required to provide evidence to the Customs Operation 
Management Division (or whichever service is acting on its behalf) of the Sectional 
Customs and Excise D irectorate with jurisdiction over the place of arrival, that the 
following requirements  have been met : 
1. Without prejudice to submission of the advance declaration in the terms and in 
the manner prescribed by the National Customs and Excise Directorate, t he 
importer, which must also be the consignee, shall be required, at least one month 
in advance of the arrival of the goods in the national customs territory, to submit 
for each shipment the identity and liability form, under such terms and conditions 
as may be specified by the National Customs and Excise Directorate for that 
purpose, accompanied by the following documents:  
(a) Certification from the foreign supplier, apostilled or legalized with an official 
translation into Spanish, showing 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  Statute, 
and 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.  
(b) Apostilled or legalized certification, with an official translation into Spanish, 
of the existence of  the foreign supplier, to be issued by the entity in the 
exporting country that keeps the official register of producers or traders . 
Should no such entity exist, the importer must testify to that fact under 
oath, which shall be deemed to have been taken by the signing of the 
document, without prejudice to the supervisory and inspection powers of 
the National Customs and Excise Directorate.  
(c) If the importer of the goods is to sell them in the same state, it must submit 
a list of the distributors of the go ods in Colombia, indicating their tax 
identification number (NIT), business name, address, telephone number 
and email address.  
(d) Declaration of the goods signed by the legal representative of the 
Colombian customs agency, indicating their tax identificat ion 
number  (NIT), business name, address, telephone number and email 
address, where appropriate, certifying that they have  conducted a 
background check on the customer for the importer for which they are  to WT/DS461/RW  
 
- 35 - 
 
  act as customs broker, and indicating how long th e parties have worked 
together.  
(e) Declaration signed by the importer or the importer's legal representative, 
certifying the following:  
(i) That the value to be declared for the good s being imported 
corresponds to the price actually paid or payable.  
(ii) The address of the storage facilities for the goods being imported.  
(iii) Detailed information on the distribution and marketing chain in 
Colombia for the goods being imported.  
(iv) That they are aware that the customs authority is entitled to submit 
the d ocuments related to the import transaction to the Attorney 
General's  Office and the Financial Information and Analysis Unit 
(UIAF).  
2. Without prejudice to the presence of the customs representative from the 
customs agency, where action is taken through the latter, the importer, the legal 
representative or the agent of the importing company must be present for the 
process of customs inspection or examination  of the goods.   
For this purpose, the importer's agent must be  different from the Customs 
Agency.   
The absence of the importer, the legal representative or the agent of the 
importing company shall result in  the non -admissibility or non -authorization of 
release.  
Paragraph  1. The iden tity and liability form and the doc uments referred to in this 
article shall constitute supporting documents for the import declaration.  
Failure to submit or the extemporaneous submission of these documents shall result in  
the non -admissibility or non -authorization of release.  
Paragraph 2 . In the case  of goods that are to be imported from a free zone to the 
remainder of the national customs territory, the importer must be the same as the 
consignee whose name appears in the transport document with which the goods entered 
the free zone, unless it is a matter of products classified under subheading 6406100000 , 
and consigned to an industrial user of goods or of goods and services.  
In the event that the consignee  and the importer are not the same,  this will result in  
the non -admissibility or non -authorization of release.  
Paragraph 3 . The special measures provided for in this Decree shall not apply to the 
goods specified in Article 3 hereof, owned by foreign companies or persons not resident 
in the country, which have been introduced from abroad to I nternational Logistical 
Distribution Centres, for distribution in their entirety to the rest of the world.  
2.43.   Thus, in order to be able to import goods regulated by Decree No. 2218/2017 at prices equal 
to or below the thresholds prescribed in that Decree (see paragraph 2.34 above), importers are 
required to submit a set of documents to the customs authority at least one month in advance of 
the arrival of the goods in Colombian territory . Likewise, such importation requires the physical 
presence of the importer, the legal rep resentative or the agent of the importing company, as 
appropriate, during the process of customs inspection or examination  of the goods . If the importer 
does not submit the required documents or does so extemporaneously, the goods cannot be 
released.  WT/DS461/RW  
 
- 36 - 
 
  2.44.   Pursu ant to Article 4, paragraph 3, of the above -mentioned Decree No. 2218/2017, the 
importation of goods owned by foreign companies or persons not resident in the country, which have 
been introduced from abroad to International Logistical Distribution Centres59 for distribution in their 
entirety to the rest of the world, is exempted from the special measures provided for in that Decree.60 
2.45.   Article 9 of Decree No. 2218/2017 prohibits the reshipment of goods subject to this Decree 
when they do not meet the requireme nts set out in Article 4.61 
2.3.3.3.2   Entry controls  
2.46.   Article 5 of Decree No. 2218/2017 provides for the possibility of establishing customs controls 
on the entry of goods in the following terms:  
ARTICLE 5 . Entry controls . In accordance with risk management system cri teria, the 
Special Administrative Unit of the National Customs and Excise Directorate (DIAN) may 
establish customs controls on the entry of goods referred to in this Decree . If measures 
restricting entry come to be established, they must be duly supported and justified in 
accordance with the analysis and technical report  stemming from the same risk 
management system.  
2.47.   Thus, the DIAN may establish customs controls on the entry of goods subject to the decree, 
in accordance with criter ia based on the Colombian risk m anagement system.  
3  PARTIES' REQUESTS FO R FINDINGS AND RECOM MENDATIONS  
3.1.  Colombia requests that the Panel find that it has complied with the DSB's recommendations 
and rulings in the original proceeding to bring its measures into conformity with its oblig ations under 
the GATT 1994.62 
3.2.  Panama requests that the Panel, considering the enactment and entry into force of Decree 
No. 2218/2017 in the course of this proceeding and the fact that the measures challenged by 
Panama are governed by that regulation, should  adopt:  
a. Findings on the measures with the characteristics contained in Decree No.  1745/2016 ; 
and 
b. Findings and recommendations on the measures with the characteristics contained in 
Decree No. 2218/2017.63 
3.3.  In particular, Panama requests the Panel to find that : 
a. The specific bond and the special import regime are Colombian "measures taken to 
comply" within the meaning of Article 21.5 of the DSU.64 
                                                
59 The International Logistical Distribution Centre s are public warehouses authorized by the DIAN, 
located in ports, airports or specialized logistical infrastructures, whe n the latter have authorized arrival sites, 
in which foreign or domestic goods may be entered for storage , as may  goods in the final st ages of a 
suspensive procedure or a processing and/or assembly procedure, which are to be distributed by reshipment, 
importation or exportation. (Decree No. 390/2016 (Exhibit PAN -4), Articles 111 et seq . and Colombia's 
response to Panel q uestion No. 14 , paras. 52 -54.) 
60 Decree No. 2218/2017 (Exhibit PAN -43), Article 4, para. 3.  
61 Ibid. Article 9.  
62 Colombia's first written submission as complainant, para. 39; first written submission as respondent, 
para. 139; second written submission as complainant, para . 138; and second written submission as 
respondent, para. 162.  
63 Panama's response to Panel question No. 49.  
64 Panama's first written submission as respondent, para. 90; second written submission  as 
complainant, para.  285; and second written submission  as respondent, para. 473.  WT/DS461/RW  
 
- 37 - 
 
  b. The specific bond requirement is inconsistent with Article XI:1 of the GATT 1994.65 
c. The specific bond requirement does  not meet the requirements of Article 13 of the Customs 
Valuation Agreement.66 
d. The specific bond is not administered in a uniform, impartial and reasonable manner, 
contrary to Colombia's obligations under Article X:3(a) of the GATT 1994.67 
e. The special import  regime is inconsistent with Article XI:1 of the GATT 1994.68 
f. The special import regime is inconsistent with Articles 1, 2, 3, 5, 6 and 7(f) and (g) of the 
Customs Valuation Agreement.69 
g. The special import regime gives rise to an administration of Articles 4 93 and 486 of Decree 
No. 390/2016 that is not uniform, impartial and reasonable, contrary to Colombia's 
obligations under Article X:3(a) of the GATT 1994.70 
h. The special import regime results in the application of substantial penalties for minor 
infringement s, in a manner inconsistent with Article VIII:3 of the GATT 1994.71 
i. Colombia has failed to demonstrate that the requirements of the specific bond and the 
special import regime are justified under Article XX of the GATT 1994.72 
3.4.  Consequently, Panama requests t he Panel to find that Colombia has not brought its compliance 
measures into conformity with its obligations under the GATT 1994 and to make the relevant 
recommendations in accordance with Article 19 of the DSU.73 
4  ARGUMENTS OF THE PAR TIES  
4.1.  The arguments of the parties are reflected in their executive summaries, provided to the Panel 
in accordance with paragraph 18 of the Working Procedures adopted by the Pa nel (see Annexes  B-1 
and B -2). 
5  ARGUMENTS OF THE THI RD PARTIES  
5.1.  The arguments of Ecuador, the European Union, Honduras, Japan and the United States are 
reflected in their executive summaries, provided in accordance w ith paragraph 20 of the 
Working  Procedures adopted by the Panel (see Annexes C -1, C-2, C-3, C-4 and C -5). Australia, 
China, Guatemala, India, Indonesia, Kazakhstan, Korea, the Russian Fe deration, Singapore and 
Chinese Taipei did not submit written or oral arguments to the Panel.  
                                                
65 Panama's first written submission as complainant, para. 73; first written submission as respondent, 
para. 90; second written submission  as complainant, para. 285; and second written submission  as respondent, 
para. 473.  
66 Panama's second written submission  as respondent, para. 473.  
67 Panama's first written submission as respondent, para. 90; second written submission  as 
complainant, para.  285; and second written submission  as respondent, para. 473.  
68 Panama's first written submissi on as complainant, para. 73; first written submission as respondent, 
para. 90; second written submission  as complainant, para. 285; and second written submission  as respondent, 
para. 473.  
69 Panama's second written submission  as respondent, para. 473.  
70 Panama's first written submission  as respondent, para. 90; second written submission as 
complainant, para. 285; and second written submission as respondent, para. 473 . 
71 Panama's second written submission  as respondent, para. 473.  
72 Panama's second written submission  as complainant, para. 285; and second written submission  as 
respondent, para.  473. 
73 Panama's first written submission as complainant, para. 74; first written submission as respondent, 
para. 91; second written submission  as complainant, para. 286; and second written submission  as respondent, 
para. 474.  WT/DS461/RW  
 
- 38 - 
 
  6  INTERIM REVIEW  
6.1  Introduction  
6.1.  On 26 June 2018, the Panel submitted its Interim Report to the parties. On 10  July 2018, 
Panama informed the Panel that it did not intend to request the review of any precise aspects of the 
Interim Report. Colombia did submit written requests for the review of s ome precise aspects of the 
Interim Report. Neither of the parties requested an interim review meeting. On 17  July 2018, 
Panama submitted comments on Colombia's requests for review.  
6.2.  In accordance with Article 15.3 of the DSU, this section of the Panel Report sets out the Panel's 
response to the requests made by Colombia and the comments submitted thereon by Panama at 
the interim review stage. The Panel modified aspects of its Report i n the light of Colombia's requests 
where it considered that it was appropriate to do so, as explained below. The Panel also corrected a 
number of typographical and other non -substantive errors, including those identified by Colombia 
with respect to footnot e 235 and paragraphs 2.7, 7.142  and 7.157 . 
6.2  Colombia's specific requests for r eview  
6.2.1   Descriptive part  
6.3.  Colombia suggests amending the wording of footnote 52 to paragraph 2.29 as follows: "The 
observers are members of Colombian private industry ] natural persons with knowledge of and 
experience in a productive economic sector ". Colombia also suggests referring to Exhibit PAN-64 in 
the plural. Panama opposes the request, indicating that the description of the observers as members 
of Colombian private industry stems from Colombian customs law and that the amendment would 
make it appear that the import operations observers could be linked to the DIAN. The Panel declines 
to make the amendments suggested by Colombia. In the Panel's view, the relevance of the role of 
the observers for this dispute lies in the fact that they are representatives of industry and not in 
their being natural persons  with knowledge of and experience in the sector. As for Exhibit PAN -64, 
it is a single exhibit containing various documents, not various exhibits.  
6.2.2   The question of which measures are the ones "taken to comply" in the present 
proceedings  
6.4.  With respect to para graph 7.67, Colombia suggests amending the wording of the last sentence 
as follows: "In all cases, moreover, there is the presumption  it is consider ed that imports at or below 
the level of the thresholds have a  high risk of being  unlawful in nature". Panama opposes this 
request, citing submissions from Colombia in which it is expressly indicated that it is suspicions that 
are involved. Panama therefor e requests that the original language be maintained or that the word 
"presumption" be changed to "suspicion". The Panel notes that the sentence in question refers to 
Colombia's arguments. It therefore accepts Colombia's request for review, making the neces sary 
adjustments to reflect this fact.  
6.5.  With respect to paragraph 7.72, Colombia suggests amending the wording of the first sentence 
as follows: "Th e fact that Decrees No. 1744/2016 and No. 1745/2016 are constructed around the 
presumption that  imports at or below the level of the thresholds are having a high risk of being  
unlawful in nature". Panama opposes this request for the same reasons as describ ed in the preceding 
paragraph. The Panel considers that, in this paragraph, a "suspicion" can indeed be referred to given 
that, as Panama points out, it is the term used by Colombia in its submissions and this assessment 
follows from the preceding paragrap hs. Consequently, the Panel decides to adjust the text by 
replacing the term "presumption" with "suspicion". The Panel also sees no difficulty in accepting 
Colombia's request to include the words "a high risk of being".  
6.2.3   Panama's claims under Article XI:1 o f the GATT 1994  
6.6.  With respect to paragraph 7.260 , Colombia suggests that the Panel amend the wording to 
indicate that the limited flexibility of the  regime is "alleged". Panama has made no objection to this. 
The Panel accepts Colombia's request for review, making the necessary adjustments to the wording 
of paragraph 7.260 . WT/DS461/RW  
 
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  7  FINDINGS  
7.1  Preliminary issues  
7.1.1   Introduction  
7.1.  It is a distinguishing feature of the present proceedings under Article  21.5 of the DSU that, as 
described in section 1.1 above, they have been initiated by both parties.74 This complicates the 
situation because there are two different panel requests in which the measures at issue and the 
claims are not the same.  
7.2.  The problem that forms the subject of the terms of reference in the present proceedings resides 
mainly in the fact that the parties are faced with the question of which measures are the ones taken 
by Colombia to comply with the recommendations and rulings of the DSB within the meaning of 
Article  21.5 of the DSU. Whereas Colombia argues that the only "measure taken to comply" is the 
replacement of the compound tariff by an ad valorem  one via Decree  No. 1744/2016, Panama 
maintains that the specific bond and t he special import regime with the characteristics envisaged in 
Decree No.  1745/2016, and subsequently in Decree  No. 2218/2017, are also "measures taken to 
comply".  
7.3.  The Panel 's first task will therefore be to settle the question of which measures are the o nes 
that Colombia has taken to comply. If from this analysis it is concluded that the specific bond and 
the special import regime with the characteristics envisaged in Decree  No. 1745/2016 fall within the 
Panel 's terms of reference, it will be necessary to  examine whether, as claimed by Panama, the 
specific bond and the special import regime with the characteristics envisaged in Decree 
No. 2218/2017, which replaces and repeals Decree  No. 1745/2016, are likewise within the Panel 's 
terms of reference. This al so raises the question of whether, as Panama requests, findings should 
be made with regard to the measures regulated by Decree  No. 1745/2016, as well as findings and 
recommendations concerning those regulated by Decree  No. 2218/2017.  
7.4.  Together with these fu ndamental issues relating to the Panel 's terms of reference, this section 
also addresses the question of whether the claims made by Panama in its panel request fall within 
the terms of reference of the panel established at the request of Colombia. Moreover , Colombia 's 
objections relating to the claims made by Panama under Article  VIII:3 of the GATT  1994 and 
Article  7.2(g) of the Customs Valuation Agreement will also be examined.  
7.5.  The analysis begins with the question of the measure or measures "taken to comp ly" by 
Colombia.  
7.1.2   The question of which measures are the ones "taken to comply" in the present 
proceedings  
7.1.2.1   Arguments of the parties  
7.1.2.1.1   Colombia  
7.6.  Colombia maintains that the compliance measure is Decree  No. 1744/2016. In its opinion, the 
customs bond and the customs formalities of Decree  No. 1745/2016 are very different in nature 
from the compound tariff declared to be inconsistent75 and fall outside the scope of these 
proceedings. For Colombia, the Article 21.5 procedure is limited to an assessment of "the exi stence 
or consistency with a covered agreement of measures taken to comply with the 
recommendations  and rulings of the DSB" and, therefore, the scope of the "measures taken to 
                                                
74 Although this situation could be described as exceptional in the light of previous practice, there are 
precedents; for example, in EC – Bananas  III and, more recently, US – Tuna II (Mexic o). In EC – Bananas  III, 
the European Communities initiated its own proceeding under Article  21.5, without the assistance of the 
complainant (United States). In the parallel case, Ecuador (another of the complainants) initiated a proceeding 
under Article  21.5. In  US – Tuna II (Mexico) , both the United States and Mexico in itiated Article  21.5 
proceedings which were dealt with jointly. Recently, there has been a case in which only the responding party 
instituted a compliance proceeding ( India – Agricultural P roducts (Article 21.5 – India)).  
75 Colombia 's first written submission as respondent, para. 19;  and opening statement at the meeting of 
the Panel as complainant, para.  13. WT/DS461/RW  
 
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  comply" must be determined with reference to the said recommendations and ruling s and the original 
measures at issue.76  
7.7.  Colombia points out that the measure which formed the subject of the findings of inconsistency 
has been withdrawn, resulting in the achievement of the "first objective of the dispute settlement 
mechanism" in accordan ce with Article 3.7 of the DSU.77 Colombia stresses that the 
recommendations and rulings of the DSB referred exclusively to the compound tariff applied to 
imports of certain items of apparel and footwear. That tariff has been repealed and replaced by new 
tariffs established by Decree  No. 1744, the decree which Colombia has notified as the measure taken 
to comply.78 According to Colombia, Panama, in its first written submission, in describing the result 
of the original proceeding, acknowledges that the DSB 's recommendations relate exclusively to the 
compound tariff.79 Given that Panama does not link the measures challenged with the 
recommendations and rulings of the DSB, the Panel should conclude that it has not been 
demonstrated  that the measures challenged fal l within the scope of Article  21.5.80 
7.8.  For Colombia, the text of Decree  No. 1745/2016 clearly shows that its purpose is to strengthen 
aspects of the administration and implementation of Colombia 's customs procedures to combat 
money laundering, terrorism and unfair competition. There is nothing in the text of the decree to 
indicate that it is a measure taken to comply with the recommendations  and rulings of the DSB. 
Colombia maintains that independent discussions of the decrees confirm that Decree  No. 1744/201 6 
was adopted to comply with the recommendations and rulings of the DSB  and that other measures 
intended for that purpose were not considered.81 Colombia argues that in the meeting no reference 
was made to the DSB 's recommendations and rulings when Decree  No. 1745/2016 was being 
discussed. In agreement with the representative of the DIAN, the measures were established to 
strengthen the risk management system and customs controls in the face of situations where there 
was a suspicion of customs fraud. The Comm ittee recommended the adoption of the measures of 
this Decree  "as a policy matter ".82 
7.9.  According to Colombia, Decree  No. 1745/2016 is significantly different in nature from the 
compound tariff at issue in the original proceeding and from the tariffs of Decre e No. 1744/2016. 
Decree  No. 1745/2016 establishes customs control measures and does not directly impose import 
tariffs. Even if this Decree, as a customs measure, might be relevant in the context of tariff collection, 
it is not a measure that regulates tar iffs and their levels, which is the subject of the original measure 
and the measure taken to comply.83 
7.10.   Colombia maintains that  Panama makes no attempt to link the challenged measures with the 
recommendations  and rulings of the DSB and fails to make a prima facie case that 
Decree  No. 1745/2016 is a "measure taken to comply". In the opinion of Colombia, Panama 's 
argument appears to be based on unconvincing ideas: the Article 21.3(c) proceedings and the claim 
that the challenged measures pursue the same policy objective as the original measure.84 Colombia 
notes that in the arbitration process Panama admitted that measures other than repeal or 
amendment of the compound tariff would not have the necessary links with the DSB's 
recommendations  and rulings to constitu te a "measure taken to comply" .85 For Colombia, there is 
no consistency between Panama 's assertion during the arbitration and its argument that the bond 
and the customs formalities are closely related to the recommendations and rulings of the DSB. The 
decision taken by the Arbitrator with respect to this argument is not relevant to this proc eeding.86 
For Colombia, recourse to the award of the Article 21.3(c) Arbitrator is out of place, since the latter 's 
                                                
76 Colombia 's first written submission as respondent, paras.  15-18; and second writt en submission as 
respondent, para.  39.  
77 Colombia 's opening statement at the meeting of the Panel as complainant, para.  15. 
78 Colombia 's first written submission as respondent, paras.  21-23; and second written submission as 
respondent, paras.  18-20. 
79 Panama's first written submission as complainant, para.  12. 
80 Colombia 's first written submission as respondent, para.  24. 
81 Colombia 's first written submission as respondent, paras.  25 and 28-30; and second written submission 
as complainant, paras.  17-18. 
82 Colombia 's first written submission as respondent, paras.  26-27; and second written submission as 
complainant, paras.  19-20. (emphasis added)  
83 Colombia 's first written submission as respondent, para.  33. 
84 Colombia 's first written submission  as respondent, para.  34. 
85 Award of the Arbitrator, Colombia –Textiles (Article  21.3(c)) , para.  3.23. 
86 Colombia 's first written submission as respondent, paras.  35-36; second written submission as 
complainant, paras.  21-22; and second written submission as r espondent, paras.  36-38. WT/DS461/RW  
 
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  terms of reference are very limited and concern only the determination of the reasonable period of 
time for the implementation of the recomme ndations and rulings of the DSB. They do not include 
the determination of a measure as "taken to comply" within the meaning of Article  21.5 of the DSU.87 
7.11.   Colombia argues that to accept that a new measure should be included in this proceeding 
solely because it shares a policy objective with the original measure would set a dangerous 
precedent. It would be an excessively broad interpretation of the scope of Article  21.5. The existence 
of a common objective is not a sufficient basis for such a characterization,  since Members can adopt 
numerous measures to pursue a similar policy objective. Colombia has a broad, comprehensive and 
multidisciplinary regime for fighting money laundering, of which the compound tariff formed part. It 
would be a misuse of Article  21.5 to allow any measure adopted by Colombia for that purpose  to be 
challenged in compliance proceedings.88 
7.12.   Colombia adds that, when a measure is declared to be inconsistent with WTO rules, the DSU 
expressly recognizes the right of the responding Member to a re asonable period of time in which to 
implement the DSB's recommendations and rulings, and even if this period proves to be insufficient 
or it is not possible to comply within it, the possibility of offering compensation, before being subject 
to the suspensi on of concessions or other obligations.89 If the Pan el were to find that 
Decree  No. 1745/2016  is inconsistent with Article  XI:1 of the GATT 1994, Colombia would be unfairly 
deprived of the right to a reasonable period of time to bring the Decree  into confor mity and negotiate 
compensation before becoming subject to the suspension of concessions or other obligations.90  
7.13.   Colombia maintains that Panama can initiate new proceedings at any time if it wishes to 
challenge the WTO consistency of Decree  No. 1745/2016. At this time, however, it is trying to bypass 
the rights and procedures established by the DSU by challenging Decree  No. 1745 /2016 .91 
7.14.   Colombia maintains that, in the original proceeding, Panama asked the Panel to make a 
suggestion for the implementation of the recommendations  and rulings of the DSB in accordance 
with Article  19.1 of the DSU, and specifically that it suggest the introduction of a "capping 
mechanism that ensures the observance of the relevant bound tariffs, or a return to the ad valorem  
tariff system, without exceeding the limits of 35% and 40% ad valorem  depending on the product ".92 
Decree  No. 1744/2016 repealed the compound tariff and established new tariffs that do not exceed 
Colombia 's Schedule of Concessions, as Panama requested. In attempt ing to challenge the measures 
of Decree  No. 1745/2016, Panama is seeking to obtain a remedy that it did not seek in the original 
proceeding.93 
7.15.   Colombia explains that the "matter" in the proceeding initiated by Colombia consists of the 
measures and claims se t out in document WT/DS461/17, in which Colombia explained that by means 
of Decree  No. 1744/2016 it had replaced the compound tariff with an ad valorem  one that did not 
exceed Colombia 's bound tariffs and, consequently had brought the measure into conformi ty with 
its obligations. The document in question mentions only the measure under  Decree  No. 
1744/2016  and the claims that were the subject of the recommendations  and rulings of the DSB 
(that is, Article s II:1(a) and II:1(b)  of the GATT  1994). Consequently , the terms of reference of the 
Panel entrusted with the proceeding initiated by Colombia are limited to examining the consistency 
of the measure taken to comply (Decree  No. 1744/2016) with Article s II:1(a) and II:1(b)  of the 
GATT 1994. Any other measures and claims are excluded from the terms of reference of the Panel 
in the proceeding initiated by Colombia (inclu ding the claims under Article  X:3(a) and Article  XI:1 of 
the GATT 1994).94 
                                                
87 Colombia 's first written submission as respondent, para.  37. 
88 Colombia 's first written submission as respondent, paras.  38-39; second written submission as 
complainant, para.  33; second written submission as respondent, para.  32; and opening statement at the 
meeting of the Panel as complainant, para.  20. 
89 Colombia 's first written submission as respondent, paras.  40-41. 
90 Colombia 's first written submission as respondent, para.  42; and opening statement at the meeting of 
the Pane l as complainant, para.  21. 
91 Colombia 's first written submission  as respondent, paras.  43 and 46. 
92 Panel Report, Colombia – Textiles , para.  7.593.  
93 Colombia 's first written submission as respondent, paras.  44-45. 
94 Colombia 's second written submission a s complainant, paras.  4-8 and 12-14; and opening statement 
at the meeting of the Panel as complainant, para.  23. WT/DS461/RW  
 
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  7.16.   Colombia acknowledges the existence of the "close nexus" theo ry established by the 
Appellate  Body. However, Colombia considers that in this case the DSB 's recommendations were 
limited to the compound tariff  and therefore bear no relation to the measures implemented through 
Decree  No. 1745/2016. Colombia adds that Panam a has failed to establish the existence of a close 
connection between the measure it seeks to challenge in the Article  21.5 proceedings, the measure 
declared as taken to comply, and the recommendations  and rulings of the DSB.95 
7.17.   According to Colombia, the us e of the "close nexus" test by Panama is contradictory since the 
premise of this test is that the measure examined is not a measure taken to comply. However, 
Panama repeatedly describes the specific bond and the special import regime as "measures taken 
to comply". Colombia maintains that these measures cannot simultaneously be measures taken to 
comply and "closely related" measures.96 In any event, even if Panama had adduced that these 
measures are "closely related"  measures and not "measures taken to comply ", it would still have 
failed to establish that they fall within the scope of the present proceedings.97 Colombia contests 
Panama 's line of argument with respect to the elements of the "close nexus" theory (timing, nature 
and effects).  
7.18.   As far as timing is c oncerned, Colombia maintains that the mere fact that a measure is 
introduced after the adoption of the DSB 's recommendations  and rulings does not mean that it is a 
"measure taken to comply". The fact that an instrument is adopted after the DSB 's recommenda tions 
enter into effect does not necessarily mean that that instrument automatically falls within the scope 
of Article  21.5. That would convert any measure introduced after the DSB 's recommendations  and 
rulings into a measure taken to comply, which would i nclude a possibly unlimited number of 
measures  and leave the responding Member forever subject to Article  21.5 proceedings. Likewise, 
the adoption of an instrument on the same day as the measure taken to comply  does not convert 
the former into another meas ure taken to comply. It is not reasonable to assert that any legislative 
or regulatory activity that takes place on the same day comprises measures taken to comply. This 
approach would encompass a broad range of measures bearing no relation to the 
recommen dations  and rulings of the DSB.98 
7.19.   With regard to "nature ", for Colombia the nature of the measures is substantially different 
and Panama is trying to circumvent this difference by means of an erroneous characterization of the 
measures. Colombia considers th e fact that the two measures were introduced under different legal 
regimes to be further evidence of their different nature. Decree  No. 1744/2016 is a tariff measure 
that establishes import tariffs and was adopted under Colombia 's tariff code. On the other  hand, 
Decree  No. 1745/2016 is a customs measure whose purpose is to establish a mechanism for 
strengthening the risk management and customs control system , and was adopted under a different 
legal regime (Law No. 1762 of 2015).99 Moreover, in its opinion, t he fact that the decrees were 
examined by the Committee on Customs, Tariffs and Foreign Trade ( Triple A Committee) does not 
mean that they are similar in nature, since this Committee has jurisdiction over a wide range of 
trade policy instruments. In fact, they were examined by the Committee  under different powers. 
Decree  No. 1744/2016  was examined under the powers conferred on the Triple A  Committee by 
paragraph  1 of Article  1 of Decree  No. 3303/2006,  and Decree  No. 1745/2016  was examined in 
accordance with  paragraph 2.100 Moreover, the drafting history of the two decrees  demonstrate s 
that the  Triple A Committee examined them separately and the minutes clearly indicate that the 
Committee  considered that Decree  No. 1744 /2016  was being proposed to comply with th e DSB's 
recommendations  and rulings .101 Colombia contends that the coverage of the two decrees  is not the 
same: Decree  No. 1744/2016 applies to all the products classified in Chapters 61  and 62 and in 
headings  64.01 -64.05, whereas Decree  No. 1745/2016 only a pplies to the products classified in 
Chapters 61, 62  and 64 that are imported at prices below certain thresholds. Likewise, Colombia 
                                                
95 Colombia 's response to Panel question No.  57, paras.  254-257; comments on Panama 's response to 
Panel question No.  57; and  additional written submission , para.  12. 
96 Colombia 's second written submission as complainant, para.  24; and second written submission as 
respondent, para.  17. 
97 Colombia 's second written submission as complainant, paras.  23 and 25. 
98 Colombia 's second written submission  as complainant, paras.  26-27; second written submission as 
respondent, para.  30; response to Panel question No.  57; comments on Panama's response  to Panel question 
No. 57, para.  255; and additional written submission , para.  13. 
99 Colombia 's second written su bmission as complainant, para.  29; and second written submission as 
respondent, para.  34. 
100 Decree No. 3306/2006 (Exhibit  COL-6), Article 1.  
101 Colombia 's second written submission as complainant, para.  30. WT/DS461/RW  
 
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  points out that the thresholds of the two measures are very different and that different rationales 
were used for determini ng them. The tariff thresholds are fixed in accordance with those bound by 
Colombia within the WTO for imports above the threshold, whereas the thresholds of the customs 
control measure were determined by taking into account the historica l level of imports  over a 
seven -year period.102  
7.20.   Colombia argues that WTO Members adopt a variety of measures in furtherance of a similar 
policy objective. An excessively broad interpretation of the scope of Article  21.5 would seriously 
undermine the rights of Members by subjecting them to the possibility of suspension of concessions 
without a reasonable period of time for broad categories of measures  and would have a "chilling 
effect" on the right of Members to regulate. The fact that a measure pursues the same public policy 
objective is not a sufficient reason to consider that a measur e is one taken to comply. Governments 
adopt a variety of measures that pursue the same public policy objective. Under this interpretation, 
each of these measures could fall within the scope of Article  21.5.103 
7.21.   With regard to effects, Colombia maintains that Panama does not provide any information 
concerning the "banking costs" of the customs bonds or of the so -called "logistical hindrances" of 
the special import regime.104 Nor does it offer any support for the assertion that the banking costs 
and the logistical  hindrances have trade -restrictive effects. Being uncorroborated, these claims do 
not constitute a basis for the Panel to examine the "effects" in assessing whether the customs bond 
and the special import regime are measures taken to comply . Colombia notes  that neither the 
Appellate Body nor the original panel referred to Decree  No. 1745/2016, much less to its effects.105 
7.22.   For Colombia, an opinion similar to that of Panama was rejected by the compliance panel in 
US – Large Civil Aircraft (2nd complaint) . That panel observed that "the close nexus test is not 
satisfied by merely identifying any links at all between the 'undeclared' measure and the declared 
measures taken to comply or the DSB recommendations and rulings".106  
7.23.   Colombia contends that in the previous cases in which it was determined that measures were 
"closely related", the links between the measures were significantly stronger. For example, 
administrative decisions adopted in the same anti -dumping or countervailing duty proceedings as 
the measure found  to be inconsistent in the original proceedings107, an import quarantine measure 
applied at sub -federal level after a similar quarantine measure at federal level had been found to be 
inconsistent108 and a loan109 to a company that had had been the recipient of a grant which had 
been found to constitute a subsidy in the original proceedings.110  
7.1.2.1.2   Panama  
7.24.   Panama  maintains that the "measure taken to comply" goes beyond the measure declared by 
Colombia  and that the requirement of a specific bond and the application of a special import regime 
to imports of textiles and footwear at prices equal to or lower than those determined by Colombia 
in Decree  No. 1745/2016 form part of the "measure taken to comply".111  
7.25.   Panama considers that the designation of certain measures by the r esponding party as 
"measures taken to comply" is not determinative of the compliance panels' terms of reference, since 
                                                
102 Colombia 's second written submission as complain ant, para.  31; comments on Panama 's response to 
Panel question No.  57; and additional written submission, para.  15. 
103 Colombia 's second written submission as complainant, para.  32; second written submission as 
respondent, para.  31; response to Panel question No.  57, para.  256; comments on Panama 's response to Panel 
question No.  57; and additional written submission, para.  14. 
104 Panama provides more information in this respect in its last submission as respondent.  
105 Colombia 's second written submission  as complainant, para.  34; and second written submission as 
respondent, para.  35. 
106 Colombia refers to the panel report in US – Large Civil Aircraft (2nd complaint) (Article  21.5 – EU), 
para. 7.67. (Second written submission as complainant, paras.  2-4). 
107 Appellate Body Reports, US – Zeroing (EC) ( Article  21.5 – EC), paras.  230-235; and US – Softwood 
Lumber  IV (Article  21.5 – Canada) , paras.  83-85. 
108 Panel Report, Australia – Salmon (Article  21.5 – Canada) , para.  7.10(22). 
109 Panel Report, Australia – Automo tive Leather II (Article  21.5 – US), paras.  6.4-6.5. 
110 Colombia 's second written submission as complainant, para.  4. 
111 Panama 's first written submission as respondent, para.  32; and opening statement at the meeting of 
the Panel, para.  37. WT/DS461/RW  
 
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  the latter may also encompass measures that the Member in question does not consider to serve 
that purpose. In Panama 's opinion, the meas ures taken to comply are not limited to those which 
"move in the direction of, or have the objective of achieving, compliance", so that even actions which 
move away from or impair compliance may be "measures taken to comply". Thus, these measures 
must be a ssessed "in their totality", for which purpose panels should assess them in their full context, 
including how they are introduced into, and how they function within, the particular system of the 
Member concerned. With respect to their enactment, for exampl e, declarations of government 
agencies indicating that an undeclared measure was introduced to comply with the 
recommendations  and rulings of the DSB may constitute evidence that the measure in question 
forms part of the "measures taken to comply".112  
7.26.   Panam a considers that an "undeclared measure" should be considered to be a "compliance 
measure" if there is an especially close link to the "declared measure". According to Panama, all the 
third parties that have replied to Panel questions agree on this point.113 In practice, Panama 
observes, such a connection has been determined between the two measures in terms of timing, 
nature and effects, as well as between the measures  and the recommendations  and rulings of the 
DSB.114  
7.27.   Thus, for Panama, the specific bond and the special import regime are "closely related" to the 
measure declared by Colombia  and the recommendations  and rulings of the DSB, and would 
therefore form part of the "measures taken to comply."115 Where timing is co ncerned, Panama points 
out that  Decrees  No. 1744/2016  and No. 1745/2016  were issued simultaneously on 
2 November  2016 ( 4 months and 11  days after the adoption of the DSB's rulings 
and recommendations), so that the measures contained in the two decrees  are closely related as 
regards the time of their appearance.  
7.28.   With regard to their nature, Panama maintains that the measures are "closely related" to each 
other and to the recommendations  and rulings of the DSB, since the two decrees:  (a) were 
recommended by the same Colombian regulatory body (Triple A Committee)  and at the same 
299th session of 7 October 2016116; (b) apply to the same products117; and (c) are being applied to 
achieve the public policy objective pursued by the old Decree  No. 456/2014 (which contai ned the 
compound tariff declared inconsistent). For Panama, Decrees  No. 1744/2016  and No. 1745/2016 
are two sides of the same coin. The preamble to Decree  No. 1745/2016 indicates that one of its 
underlying purposes was the need to implement new mechanisms that make it possible to counteract 
"behaviour [that] adversely affects the industrial  and commercial sector as a result of unfair 
competition with organizations which, among other things, evade the payment of customs 
taxes"  and that its adoption was neces sary in order to "achieve on a continuing basis the policy 
objective pursued by the measures provided for in Decree  456 of 2014  and its amendments".118 For 
its part, the third preambular paragraph of Decree  No. 1744/2016 states that its adoption is 
necessary  in view of the pending expiration of the "application period provided for in Article  5 of 
Decree  456 of 2014"  and "to achieve on a continuing basis the policy objective pursued by means 
of that measure".119 
                                                
112 Panama 's first written submission as respondent, paras.  22-23 and 41; and second written submission 
as complainant, paras.  8 and 24 -26 (referring to Appellate Body Reports, US – Zeroing (EC) (Article  21.5 – EC), 
para. 204; US – Softwood Lumber IV (Article  21.5 – Canada) , para. 67; and US – Upland Cotton  (Article  21.5 – 
Brazil) , para.  202).  
113 Panama 's response to Panel question No.  57 (referring to Ecuador 's third -party response to Panel 
question No.  6, and the third -party responses of the United States, Japan  and the European Union to Panel 
question No.  1). 
114 Panama 's response to Panel question No.  57 (referring to the Appellate Body Reports, US – Softwood 
Lumber IV (Article  21.5 – Canada) , para.  77; and US – Zeroing (EC) (Article  21.5 – EC), para.  204.)  
115 Panama 's first written submission as respondent, paras.  42-48; second written submission as 
complainant, paras.  10-12 and 16; Panama 's second written submission as respondent, paras.  90-101; and 
Panama 's opening statement at the meeting of the Panel, paras.  39-40. 
116 Decree No.  1745/2016 (Exhibit PAN -2), seventh preambular paragraph, and  Decree No.  1744/2016 
(Exhib its COL-1/PAN -1), second preambular paragraph.  
117 Decree No.  1744/2016 (Exhibits COL -1/PAN -1), Articles  1-2, and  Decree No.  1745/2016 
(Exhibit  PAN-2), Article  2. 
118 Panama 's second written submission as complainant, paras.  12 and  20-23. 
119 Decree No.  1744/2016 (Exhibits COL -1/PAN -1), third preambular paragraph; Panama 's first written 
submission as complainant, para.  14; and second written submission as respondent , paras.  71-72. WT/DS461/RW  
 
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  7.29.   Panama notes that on its website the DIAN stresses  that it is "combating the s muggling and 
underinvoicing of clothing and footwear by applying Decrees  1744 and 1745"120 and, with reference 
to certain measures, indicates that they were adopted "for the purpose of implementing 
Decrees  1744 and 1745". Accordin g to Panama, the DIAN recognizes that 
Decrees  No. 1744/2016  and No. 1745/2016 are a "single package" intended to combat "the 
smuggling and underinvoicing of clothing and footwear".121 Likewise, on the same day the 
decrees  were adopted, the Colombian Minister  of Trade, Industry and Tourism referred to these 
instruments as being used in conjunction, asserting that "the measures we are drafting … will enable 
us effectively to combat the illegal practices but, at the same time, we have taken good care to 
avoid an y adverse effect on formal trade and to comply fully with the instructions of the WTO".122  
7.30.   Panama considers the fact that Decree  No. 1744/2016 imposes a tariff, whereas 
Decree  No. 1745/2016 imposes customs measures, to be irrelevant as far as the analysis o f the 
nature of the measures is concerned. According to Panama, the nature of a measure is related to its 
basic or inherent characteristics, or to its character or qualities. Panama points out that, according 
to the statements made by Colombia in the origi nal proceedings and in the arbitration process, a 
basic or inherent characteristic of the compound tariff of Decree  No. 456/2014 was the protection 
of public morals through the campaign against money laundering and compliance with Colombian 
anti-money laun dering legislation. In these compliance proceedings Colombia maintains that the 
measures of Decree  No. 1745/2016 share the same inherent characteristic of protecting public 
morals  and securing compliance with Colombian anti -money -laundering legislation. Ac cordingly, for 
Panama, the measures contained in Decree  No. 1745/2016 are identical in nature to the measures 
in Decree  No. 456/2014.123 
7.31.   Panama also points out that Decree  No. 1745/2016 contains customs verification measures 
for the collection of the tariff in Decree  No. 1744/2016, so that from a narrowly tariff perspective as 
well, the measures of Decree  No. 1745/2016  and the tariffs of Decree  No. 1744/2016 are "closely 
related" with respect to their nature.124 
7.32.   With regard to effects, Panama argues that the tr ade restrictiveness, mitigated by the new 
tariff, continues to have an undermining effect through the measures of Decree  No. 1745/2016. In 
the original  proceedings, Colombia argued that "the compound tariff leads to an increase in the unit 
price of apparel  and footwear imports, thereby reducing the artificially high profit margin."125 
Panama considers that the costs  and logistical obstacles linked with the posting of a specific bond 
and the special customs regime are currently increasing import costs and, in some cases, completely 
deterring importers.  
7.33.   Panama also notes that "the adoption of the strategies" envisaged in the two 
Decrees  No. 1745/2016 and  No. 2218/2017 was based on the recommendation of the 
Inter-Institutional Commission against Smuggling, at its special session on 24 August 2016.126 In 
the minutes of that special session127 it is explained that the need to implement these "strategies" 
is closely connected with the recommendations  and rulings of the DSB and, according to Panama, it 
is made clear th at the customs measures of Decree  No. 1745/2016 combined with the tariff 
measures of Decree  No. 1744/2016 together constitute the compliance measure taken by Colombia 
to comply with the recommendations  and rulings of the DSB. Panama points out that in the minutes, 
among other things, it is proposed to work on strategies that are to be implemented by taking into 
account three ranges or thresholds .128 
                                                
120 Extract from the DIAN web page  (Exhibit  PAN-10). 
121 Panama's second written submission as complainant, paras.  14-15. 
122 Panama's second written submission as respondent, paras.  72 and  97; and "Dos decretos que 
fortalecen control aduanero de  calzado y ropa ", El Espectador  (Exhibit  PAN-46). 
123 Panama's second written submission as complainant, paras.  30-31. 
124 Panama's second written submission as complainant, para.  32. 
125 Appellate Body Report, Colombia – Textiles , para.  5.88 (referring to Panel Report, Colombia – Textiles , 
para. 7.410).  
126 Decree No.  1745/2016 (Exhibit PAN -2), sixth preambular paragraph and Decree  No. 2218/2017 
(Exhibit PAN -43), sixth preambular paragraph.  
127 Communications between the parties in t he Article 21.3(c) arbitration (Exhibit  PAN-83), and minutes 
of the special session of the Inter -Institutional Commission against Smuggling (Minutes COL -ARB-02). 
128 Panama 's response to Panel question No.  57. WT/DS461/RW  
 
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  7.34.   Moreover, Panama points out that the information submitted by Colombia itself demonstrate s 
that the tariff meas ure would have a close connection with these customs measures. The minutes 
of the Triple  A Committee session mention "customs verification measures" that form part of the 
tariff collection control mechanism. Nevertheless, adds Panama, neither Decree  No. 1744/2016 nor 
Colombia 's description of the measure contain any reference to these customs verification measures. 
Thus, the "customs verification measures" mentioned in the Triple A Committee session would have 
to be the measures of Decree  No. 1745/2016 disc ussed and adopted at the same session.129 
7.35.   According to Panama, Colombia misunderstands the jurisprudence of the close connection 
when it claims that the "measures taken to comply" cannot simultaneously be "closely connected 
measures". Panama explains that it  is using the jurisprudence on the "close connection" to 
demonstrate  that the specific bond and the special import regime are measures taken to comply. 
That is to say, if it is determined that an undeclared measure has the "close connection" it has to be 
understood that the measure is a "measure taken to comply"  and will fall within the scope of 
Article  21.5 of the DSU.130 According to Panama, if Colombia 's position that only those measures 
whose explicit purpose is compliance with the recommendations  and rul ings of the DSB could be 
considered "measures taken to comply", the Appellate Body 's jurisprudence on the "close 
connection" would have no utility.131 According to Panama, maintaining that a tariff can have a close 
connection only with a tariff would allow M embers easily to evade the compliance disciplines of 
Article  21.5 of the DSU by changing the "type" or "wrapping" of the measure, in an attempt to 
achieve compliance by means of one measure while the general conclusion of compliance with WTO 
law is undermi ned by means of another measure. For these reasons, if Colombia 's restrictive reading 
of Article  21.5 of the DSU were to be followed, the scope of these proceedings would be very 
limited  and lead to their becoming a mockery, together with the principle of prompt compliance with 
the recommendations  and rulings of the DSB.132 
7.36.   Panama considers it unconvincing and inappropriate that Colombia should have changed its 
position at different stages of the same dispute.133 Panama notes that during the binding arbitration  
under Article  21.3(c) of the DSU, Colombia explained that its compliance measure would consist in 
the joint application of tariff measures and non -tariff measures of a customs nature, in order to deal 
with money laundering,  and that it would therefore hav e recourse to two "mutually supportive 
decrees". Colombia indicated that action should not be limited to terminating the measure, but that 
attention should also be paid to other requirements for achieving specific public policy objectives. In 
fact, the Arb itrator disagreed with Panama 's argument that those aspects related to combating 
money laundering were "extraneous" to the recommendations  and rulings of the DSB  and agreed 
with Colombia that the "reasonable period of time in the present dispute should inc lude the time 
needed to enact both the tariff measure and the customs measure".134 In Panama 's opinion, the 
Arbitrator determined the reasonable period of time on the understanding that compliance included 
both aspects.135 
7.37.   According to the Appellate Body, the evaluation of the "measures taken to comply" in their 
totality includes their context and the way in which these measures are introduced.136 It has 
therefore indicated that statements by government agencies constitute evidence of a measure 
forming part of th e measures taken to comply.137 
7.38.   Moreover, so argues Panama, Colombia maintained a double standard with regard to the 
value of what was argued during arbitration, since in paragraphs 35 and  36 of its first written 
                                                
129 Panama 's second written submission as complain ant, paras.  13-14 and 19. 
130 Panama 's second written submission as respondent, paras.  103-106. 
131 Panama 's second written submission as complainant, paras.  25-26. 
132 Panama 's comments on Colombia 's response to Panel question No.  57. 
133 Panama 's second written submission as complainant, paras.  34 and 36. 
134 Award of the Arbitrator, Colombia – Textiles  (Article 21.3(c)) , paras.  3.34 and 3.41 -3.42 and  
Annex  A; and integrated executive summary of Colombia, paras.  1 and 3. 
135 Panama 's first written submission as compl ainant, para.  13; first written submission as respondent, 
paras.  37-39; second written submission as complainant, section II.D; and second written submission as 
respondent, para.  71.  
136 Appellate Body Report, US – Softwood Lumber IV (Article  21.5 – Canada) , para.  67. 
137 Panama refers to Appellate Body Report, US – Upland Cotton  (Article  21.5 – Brazil) , para.  202. 
(Panama 's first written submission as respondent, paras.  38-39.) WT/DS461/RW  
 
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  submission as respondent it mentions Panama 's arguments during arb itration and then, in 
paragraph  37 of the submission, maintains that referring to those arguments is "inapposite".138 
7.39.   Panama regards as irrelevant Colombia 's argument according to which accepting that a 
common policy objective brings a ne w measure within the scope of compliance proceedings would 
set a "dangerous precedent". For Panama, only those measures having a "close connection" with 
the declared measure and the recommendations  and rulings of the DSB could be regarded as 
measures taken  to comply.139 
7.40.   Panama considers that Colombia is mistaken in suggesting that including within the terms of 
reference of a compliance panel a measure which was not a subject of the original proceedings 
deprives it of its rights to a reasonable period of time for compliance (Article  21.3 of the DSU)  and 
to compensation negotiations (Article  22.2 of the DSU). The automatic right to a reasonable period 
of time arises only in the event of immediate compliance not being feasible.140 Moreover, argues 
Panama, the DSU d oes not establish a reasonable period of time for compliance or the possibility of 
negotiating compensation for "measures taken to comply". These rights do not exist at this stage of 
the process. The period was previously granted to introduce t hese measure s and expired on 
22 January 2017  and the negotiations to seek mutually acceptable compensation were conducted 
without bearing fruit.141 
7.41.   Panama points out that Colombia does not explain what it is referring to when it alleges that 
Panama is seeking to obtain a remedy that goes beyond what it was seeking to obtain in the original 
proceedings. The one and only remedy sought by Panama is that Colombia should fulfil its WTO 
obligations.142 Panama explains that, in the original proceedings, Panama requested as a reme dy 
the removal of the illegal tariff. This suggestion was rejected by the panel and the Appellate Body, 
since the Member responsible for implementing the recommendations  and rulings of the DSB enjoys 
a measure of discretion in choosing the means  and method  of implementation.143 However, the 
measures adopted by Colombia raise new concerns with regard to their consistency with the covered 
agreements, which did not previously exist. The Appellate Body has observed that " an Article  21.5 
panel could not properly c arry out its mandate to assess whether a 'measure taken to comply' is 
fully consistent with WTO obligations if it were precluded from examining claims additional to, and 
different from, the claims raised in the original proceedings".144  
7.42.   With respect to the panel requested by Colombia, Panama observes that its mandate is to 
examine "the matter referred to the DSB by Colombia" in document WT/DS461/24. Among other 
things, Panama points out that i n that document Colombia made express reference to the 
disagreemen t with Panama and Panama 's concerns relating to Colombian compliance. Thus, this 
disagreement and concerns have always been present (including through being expressly mentioned 
by Colombia)  and form an integral part of the "matter" before the panel request ed by Colombia.145 
According to Panama, there is no limitation that restricts the assessment solely to the measures  and 
claims that formed the subject of the original proceedings. Former panels have examined measures 
not mentioned in a panel request as being  measures closely related to those expressly mentioned. 
Thus, on the basis of its request, Colombia should have "reasonably expected that any further 
measures it [Colombia] would take to comply [with the recommendations and rulings] could be 
scrutinized by  the Panel".146 The mandate in Article  11 of the DSU for the panel to make an "objective 
assessment of the matter" means that the panel requested by Colombia should, at the very least, 
establish the nature of Panama 's disagreement and verify whether there is  any basis for it. Panama 
                                                
138 Panama 's second written submission as complainant, paras.  40-41. 
139 Ibid. paras.  43-46. 
140 Panama refers to  Award of the Arbitrator, Peru – Agricultural Products  (Article  21.3(c)) , para.  3.28. 
(Panama 's second written submission as complainant, paras.  47-49.) 
141 Panama 's second written submission as complainant, paras.  50-52. 
142 Ibid. par as. 53-54. 
143 Panama refers to  Award of the Arbitrator, US – Stainless Steel (Mexico) (Article 21.3(c)) , para.  42. 
(Panama 's second written submission as complainant, para.  55.) 
144 Panama cites Appellate Body Report, EC – Bed Linen  (Article  21.5 – India) , para. 79. (Panama 's 
second  written submission as complainant, paras.  55-56; and second written submission as respondent, 
paras.  27-29.) 
145 Panama 's second written submission as respondent, paras.  16-26; and opening statement at the 
meeting of the Panel, para.  36. 
146 Panama refers to Panel Report, Australia – Salmon (Article  21.5 – Canada) , para.  7.10. (Panama 's 
second written submission as respondent, para.  24.) WT/DS461/RW  
 
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  considers that "so blunt" an approach would not enable the compliance panel requested by Colombia 
to discharge its obligations under Article  11 of the DSU, since it would not be able fully to assess the 
matter of Colombian complia nce. An objective and complete assessment of compliance would not 
be possible if the panel could not assess the compliance of t he undeclared measures with 
WTO provisions other than Article  II of the GATT. Such an assessment would be based on an 
incomplete and indeed skewed or partial framework, since it would have been defined solely by one 
of the parties to the dispute.147 
7.43.   For Panama it is logical that questions of compliance with respect to undeclared measures 
should be covered by the terms of reference of the panel requested by Colombia. It is a general 
principle of law that no distinctions should be made where the law does not make any. In this 
respect, there is no objective reason either in the Understanding or in pure logic to make a distinction 
in cover age between undeclared measures and questions of compliance derived from those same 
measures.148 
7.44.   In Panama 's view, trying to exclude "undeclared measures" from the Panel 's terms of 
reference when the disagreement between the parties turned on those measures (and in any case 
it had been found that "closely connected measures" were involved) would be inconsistent with the 
requirement under Article  3.10 of the DSU that Members engage in "an effort to resolve" the dispute , 
and with the objective of Articles 3.3  and 21.1 to ensure "prompt compliance" with decisions.149 
Panama contends that it is a fiction that the panels have different terms of reference. For Panama, 
it is the same panel with the same members, with harmonized procedures as regards the submission 
of documents and evidence and the holding of meetings, and faced with a single substantive matter. 
In any event, both the specific bond and the special import regime, as well as the claims under 
Articles  X:3(a)  and XI:1 of the GATT and under Articles  1, 2, 3, 5 and 7 of the Customs Valuation 
Agreement, form part of the terms of reference of the panel requested by Panama.150 
7.45.   Panama argues that the measur es of Decrees  No. 1744/2016 and No. 1745/2016 are the 
continuation of the former compound tariff. Colombia has d evised a mechanism akin to that tariff, 
which is activated when import prices fall below certain thresholds prescribed by Colombia, as with 
the compound tariff. The effect of the new measures is  the same: they combine a price -sensitive 
component (an ad val orem duty) with a price -insensitive component (specific duty or specific bond 
and documentary requirements) for the purpose of discouraging imports of products at competitive 
prices in order to protect the domestic industry, using as justification the aim of c ombating money 
laundering.151 According to Panama, in adopting Decree  No. 456/2014 and Decrees No.  1744/2016 
and No. 1745/2016 Colombia based itself on the same conceptual  and diagnostic framework: that 
there would be certain thresholds which determine what is a real value and what is an "artificially 
low" value, because imports which enter at "artificially low prices" are used for money laundering.152 
The decrees  have the same structure: they use thresholds for determining which values are real  and 
which are " artificially low". This activates measures, which originally consisted of a compound tariff 
that imposed an ad valorem  levy and a specific levy and now consist of an  ad valorem tariff (via 
Decree  No. 1744/2016 ) and  multiple requirements involving specific charges (via 
Decree  No. 1745/2016 ), which together impose a burden greater than that of the specific levy of 
Decree  No. 456/2014, because of the costs associated with the new measures.153 
7.46.   According to Panama, the two decrees  have the same policy objective: t o combat money 
laundering within the framework of customs risk management (as indicated in the preamble to 
Decree  No. 1745)154 and the same effects: making imports of textiles and footwear at competitive 
prices more expensive and limiting imports. In the ori ginal proceedings, Colombia argued that 
Decree  No. 456/2014 was making money laundering operations more expensive and thus 
discouraging them. In the compliance proceedings , the differential tariff together with the specific 
charges of Decree  No. 1745/2016  increase the costs of imports at competitive prices, thereby 
                                                
147 Panama 's opening statement at the meeting of the Panel, paras.  36 and 44. 
148 Panama 's opening state ment at the meeting of the Panel, paras.  42-43.  
149 Panama 's second written submission as respondent, para.  25; and opening statement at the meeting 
of the Panel, para.  44. 
150 Panama 's second written submission as respondent, paras.  30-36; and opening statem ent at the 
meeting of the Panel, para.  46. 
151 Panama's second written submission as respondent, paras.  40-41. 
152 Ibid. paras.  42-45. 
153 Ibid. paras.  47-52. 
154 Panama 's second written submission as respondent, paras.  55-57. WT/DS461/RW  
 
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  discouraging their entry into Colombia and making them commercially unviable for traders. In fact, 
in 2017, the DIAN publicly announced as "good results" the reduction of imports for at least the  
footwear sector "thanks to measures such as Decree  1745".155  
7.47.   Panama argues that Colombia decided to split up its measure as a result of the declaration 
by the Appellate Body, transferring the matter of the "illegality" of imports below the threshold from 
the strictly tariff context to one in which there is no conflict with Article  II of the GATT. Thus, 
Decree  No. 1744/2016 responds to the rulings and recommendations of the DSB with respect to 
Article  II of the GATT,  while Decree  No. 1745/2016 responds to al l those of Colombia 's policy 
considerations that sought to justify the restrictions on imports created by the compound tariff.156 
7.1.2.2   Analysis by the Panel  
7.48.   As indicated in paragraph 7.5 above, the Panel 's first task will be to settle the question of 
which measure is the one taken by Colombia to comply or whether there is more than one. Colombia 
argues that the only "measure taken to comply" is the replacem ent of the inconsistent compound 
tariff by an ad valorem  one via Decree  No. 1744/2016. In i ts opinion, the recommendations and 
rulings of the DSB related exclusively to the compound tariff, which has been repealed and replaced 
by new ad valorem  tariffs est ablished by Decree  No. 1744/2016, the decree which Colombia has 
notified as the measure taken to comply.157 For its part, Panama does not dispute that the new 
ad valorem  tariffs established by Decree  No. 1744/2016 constitute a measure taken by Colombia to 
comply; however, for Panama, the specific bond and the special import regime with the 
characteristics envisaged in Decree  No. 1745/2016 are also measures taken to comply with the 
DSB's recommendations  and rulings.158 
7.49.   It should be pointed out that, ultimately, it is for the Panel and not the parties to decide which 
are the measures taken to comply.159 Although Colombia 's designation of a measure as one "taken 
to comply", or not, is relevant, it cannot be conclusive.160 Hence, although characterizing an act by 
Colombia as a measure taken to comply when the latter maintains otherwise is not something that 
should be done lightly, "a panel, in examining the factual and legal circumstances within which the 
implementing Membe r takes action, may properly reach just such a finding in some cases".161 If it 
were otherwise, an implementing Member would be able to avoid proceedings under Article  21.5 of 
the DSU simply by deciding what measures to notify, or not to notify, to the DSB.162 Conversely, nor 
is it up to the original complaining party alone, in this case Panama, to determine what constitutes 
the "measure taken to comply".163  
7.50.   There is a close connection between a panel 's terms of reference and the request for its 
establishment.164 In proceedings initiated under Article  21.5 of the DSU, as in the original dispute 
                                                
155 Panama refers to "Se redujo en más del 90% el ingreso de calzado subfacturado en Colombia ", 
Vanguardia  (Exhibit  PAN-50). (Panama 's second written submission as respondent, paras.  58-61.) 
156 Panama 's second written submission as respondent, paras.  63, 69 and 74.  
157 Colombia 's first written sub mission as respondent, paras.  21-23; and second written submission as 
respondent, paras.  18-20. 
158 Panama 's first written submission as respondent, para.  32; and opening statement at the meeting of 
the Panel, para.  37. 
159 The Appellate Body in EC – Bed Linen  (Article  21.5 – India)  indicated that "[w]e agree with the Panel 
that it is, ultimately, for an Article 21.5 panel – and not for the complainant or the respondent – to determine 
which of the measures listed in the request for its establishment are 'measur es taken to comply'". (Appellate 
Body Report, EC – Bed Linen (Article  21.5 – India) , para.  78.) 
160 Appellate Body Report, US – Softwood Lumber IV (Article  21.5 – Canada) , para.  73. See also 
ibid. para. 77 and Appellate Body Report,  US – Zeroing (EC) (Article  21.5 – EC), para.  204. 
161 Appellate Body Report, US – Softwood Lumber IV (Article  21.5 – Canada) , para.  74. 
162 Panel Report, Australia – Automotive Leather  II (Article  21.5 – US), para.  6.4. See also Appellate 
Body Report, US – Softwoo d Lumber IV (Article  21.5 – Canada) , para.  74 and footnote  111. 
163 Appellate Body Reports, EC – Bed Linen (Article  21.5 – India), para.  78; and US – Softwood 
Lumber  IV (Article  21.5 – Canada) , para. 73. See also Panel Reports, Australia – Automotive Leather  II 
(Article  21.5 – US), para.  6.4; and Australia – Salmon (Article  21.5 – Canada) , para.  7.10(22).  
164 The legal basis governing the panel request  is Article  6.2 of the DSU,  which states in relevant part 
that panel requests "shall identify the specific measures at issue  and provide a brief summary of the legal basis 
of the complaint  sufficient to present the problem clearly". As summarized by the Appellate Body in 
China  – Raw Materials , Article  6.2 serves a "pivotal function" in WTO dispute settlement  and sets out "two key 
requirements" that a complainant must satisfy in its panel request, namely: (a) the identification of the specific 
measures at issue; and (b) the provision of a brief summary of the legal basis of t he complaint, i.e. the claims, 
suffici ent to present the problem clearly. (Appellate Body Reports, China – Raw Materials , para.  219.) To be WT/DS461/RW  
 
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  settlement proceedings165, the "matter" referred to the panel consists of two elements: the specific 
measures at issue and the legal basis of the complaint (that is, the claim s).166 Thus, the panel 
request defines and  limits the scope of the dispute and hence the scope of the panel's jurisdiction. 
This means that only the measures identified in the panel request may be examined by the 
panel  and only in relation to their consisten cy with the provisions of the WTO agreements expressly 
mentioned in the request.  
7.51.   The complexity in the case of DSU Article  21.5 proceedings resides in the fact that the panel 's 
terms of reference are defined in relation not only to the panel request but a lso to the DSB's 
recommendations  and rulings in the original proceedings. This is because of the wording of 
Article  21.5 of the DSU, which calls for the application of the dispute settlement procedures and 
recourse to the original panel wherever possible " [w]here there is disagreement as to the existence 
or consistency with a covered agreement of measures taken to comply with the 
recommendations  and rulings". Thus, although Article  6.2 of the DSU is, in general, applicable to 
requests for the establishment of a panel under Article  21.5, it is necessary to adapt the 
requirements of Article  6.2, applicable to the original panel request, to the Article  21.5 panel 
request.167  
7.52.   In an Article  21.5 procedure, the "specific measures at issue" are measures "that have a  
bearing on compliance with the recommendations  and rulings of the DSB".168 This indicates that the 
requirements of Article  6.2 of the DSU, as they apply to an Article 21.5 panel request, "must be 
assessed in the light of the recommendations and rulings of t he DSB in the original panel proceedings 
that dealt with the same dispute".169 However, when the measures actually "taken" by the 
implementing Member are broader than the DSB's recommendations and rulings, there is no reason 
why the scope of the DSB's recomm endations and rulings should necessarily limit the scope of the 
"measures taken to comply".170 In fact, the scope of the Article 21.5 dispute settlement proceedings 
cannot  be reduced to the issue of whether or not the respondent has implemented the DSB 
recom mendation.171 On the contrary, these "proceedings involve, in principle, not the original 
measure, but rather a new and different measure which was not before the original panel".172 
7.53.   In the present proceedings it is questioned whether the specific bond and the  special import 
regime with the characteristics envisaged in Decree  No. 1745/2016 are part of the Panel 's terms of 
reference. There seems to be no doubt that they qualify as "specific measures at issue" in accordance 
with the requirements of Article  6.2 of  the DSU since, as noted in section 1.1.2  above, they are 
identified in Panama 's panel request.  
                                                
precise, the Appellate Body maintains that the "matter" referred to the panel consists of two elements: (a) the 
specific measures at issue; and (b) the le gal basis of the complaint (or the claims). (Appellate Body Report, 
Guatemala – Cement I , para.  72.) 
165 Appellate Body Reports, Guatemala – Cement I , para.  72; US – Carbon Steel , 
para. 125; and US – Continued Zeroing , para.  160. 
166 Appellate Body Report, EC – Bed Linen (Article  21.5 – India) , para.  78. See also Appellate Body 
Report, US – Upland Cotton ) (Article  21.5 – Brazil) , para. 201. 
167 In US – FSC (Article  21.5 – EC II) , the Appellate Body stated the following:  
The Appellate Body has, to date, not been c alled upon to determine the precise scope of the  
phrase "these dispute settlement procedures" in Article 21.5 and how it relates to Article 6.2 of 
the DSU. We do not consider it necessary, for purposes of resolving the present dispute, to 
determine the pre cise scope of this phrase. However, we are of the view that the phrase "these 
dispute settlement procedures" does encompass Article 6.2 of the DSU, and that Article 6.2 is 
generally applicable to panel requests under Article 21.5. At th e same time, given t hat 
Article  21.5 deals with compliance proceedings, Article 6.2 needs to be inte rpreted in the light of 
Article  21.5. In other words, the requirements of Article 6.2, as they apply to an original panel 
request, need to be adapted to a panel request under A rticle 21.5.  
(Appellate Body Report, US – FSC (Article  21.5 – EC II) , para.  59 (footnotes omitted)).  
See also Appellate Body Report, US – Zeroing (Japan) (Article  21.5 – Japan) , para.  109. 
168 Appellate Body Report, US – FSC (Article  21.5 – EC II) , para. 61. See also Appellate Body Report,  
US – Zeroing (Japan) (Article  21.5 – Japan) , para.  109. 
169 Appellate Body Report, US – FSC (Article  21.5 – EC II) , para.  61. See also Appellate Body Report, 
US – Zeroing (Japan) (Article  21.5 – Japan) , para.  109. 
170 Appellate Body Report, US – Upland Cotton (Article 21.5 – Brazil) , para. 202. 
171 Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil) , para.  40. 
172Ibid. para.  41. See also Appellate Body Reports , Mexico – Corn Syrup (Article 21.5 – US), 
paras.  78 and 80; and  EC – Bed Linen (Article 21.5 – India) , para.  79. WT/DS461/RW  
 
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  7.54.   The doubt that arises with respect to these measur es is whether they are "measures taken to 
comply" or, at least, measures "inextricably linked" and "clearly connected"173 to the measure 
declared to have been taken to comply by Colombia under Article  21.5 of the DSU, as Panama 
claims. In this respect, the A ppellate Body has concluded that "[i]t will ordinarily be necessary to 
consider first whether the measure at issue is in itself a measure taken to comply. Only if that 
analysis cannot provide a clear answer, is the analysis of US – Softwood Lumber IV (Arti cle 21.5 – 
Canada)  of application"174, that is to say, the analysis according to which it is determined whether 
the measure at issue not declared by the original respondent as a measure taken to comply is 
"inextricably linked"  and "clearly connected" to the measure declared as having been taken to 
comply by the original respondent.175 The Appellate Body has stressed that  the reasoning in 
US – Softwood Lumber IV (Article  21.5 – Canada) concerned the identification of measures closely 
connected with the declared "measure taken to comply" so as to avoid circumvention.176 Therefore, 
"if the measure at issue is found to constitute in itself a measure taken to comply, it will not be 
necessary to establish a 'particularly close relationship' of the measure at issue to th e declared 
measure taken to comply in order to subject the measure at issue to the scope of Article 21.5 of the 
DSU".177 
7.55.   In the present case, the only measure taken to comply "declared" by Colombia as such is the 
ad valorem  tariff imposed by Decree  No. 1744/ 2016. Panama does not dispute that this tariff 
constitutes a measure taken to comply. However, Panama maintains that the specific bond and the 
special import regime with the characteristics envisaged in Decree  No. 1745/2016 are also measures 
taken to compl y, although they have not been "declared" as such by Colombia.  
7.56.   The task of determining whether a measure at issue is a measure taken to comply by the 
original respondent when the latter denies it and has declared that another measure is the only 
measure taken to comply is not an easy one. Other panels, in similar situations, have opted to 
examine whether the measure at issue in question satisfies the test identified by the Appellate Body 
for establishing whether such a measure is "inextricably linked"  and "clearly connected"178 to the 
measure "declared" by the respondent as a measure taken to comply. In fact, some measures with 
a particularly close relationship to the declared "measure taken to comply" and to the 
recommendations  and rulings of the DSB may al so be susceptible to review by a panel acting under 
Article  21.5 of the DSU. Determining whether this is the case requires a panel to scrutinize these 
relationships, which may, depending on the particular facts, call for an examination of the timing, 
natur e and effects of the  various measures. This also requires a panel to examine the factual and 
legal background against which the measure declared by Colombia to constitute the "measure taken 
to comply" has been adopted. Only then is a panel in a position to  take a view as to whether there 
are sufficiently close links to characterize the specific bond and the special import regime with the 
characteristics envisaged in Decree  No. 1745/2016 as measures "taken to comply".179  
7.57.   Panama has relied on the above -mention ed parameters, timing, nature and effects , to make 
the case that both measures are measures taken to comply.180 
7.58.   The timing  of a measure is a relevant factor in determining whether it is sufficiently closely 
connected to a Member's implementation of the recom mendations  and rulings of the DSB.181 Thus, 
the fact that a measure is adopted simultaneously with, shortly before, or shortly after specific 
actions introduced by Members with a view to implementing the recommendations  and rulings of 
                                                
173 Appellate Body Report, US – Softwood Lumber IV (Article  21.5 – Canada) , paras.  81 (referring to 
Panel Report, US – Softwood Lumber IV (Article  21.5), para.  4.41)  and 90. 
174 Appellate Body Reports, EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article  21.5 
– US), para.  244. 
175 Appellate Body Report, US – Softwood Lumber IV (Article  21.5 – Canada) , paras.  81 (referring to 
Panel Report, US – Softwood Lumber  IV (Article 21.5 – Canada) , para.  4.41)  and 90. 
176 Appellate Body Reports, US – Upland Cotton (Article 21.5 – Brazil) , para.  205; and  EC – Bananas  III 
(Article  21.5 – Ecuador II) / EC – Bananas III (Article 21.5 – US), para.  245.  
177 Appellate Body Reports, EC – Bananas III (Article 21.5 – Ecuador II) /  EC – Bananas  III 
(Article  21.5 – US), para.  245. 
178 Appellate Body Report, US – Softwood Lumber IV (Article  21.5 – Canada) , paras.  81 (referring to 
Panel Report, US – Softwood Lumber IV  (Article  21.5 – Canada) , para.  4.41)  and 90. 
179 Appellate Body Report, US – Softwood Lumber IV (Article  21.5 – Canada) , para.  77. See also 
Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 207.  
180 See paras.  7.26-7.32 above.  
181 Appellate Body Reports , US – Softwood Lumber IV (Article  21.5 – Canada ), para.  84; and  US – Zeroing 
(EC) (Article 21.5 – EC), para.  225.  WT/DS461/RW  
 
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  the DSB may provide sup port for a finding that those measures are closely connected. Conversely, 
there might be situations where the fact that the alleged "closely connected" measure was taken a 
considerable time before the adoption of the recommendations  and rulings of the DSB will be 
sufficient to sever the connection between that measure  and a Member 's implementation 
obligations.182  
7.59.   As Panama points out183, Decrees  No. 1744/2016  and No. 1745/2016 were issued on the 
same day, 2 November  2016, more than four months after the adopti on of the rulings 
and recommendations of the DSB  and, coincidentally, on the same day as the signing of the 
arbitrator 's award in the arbitration under Article  21.3(c) of the DSU. Bearing in mind the observation 
by the Appellate Body that the timing of a m easure is a relevant factor in determining whether it is 
sufficiently closely connected to a Member 's implementation of the recommendations  and rulings of 
the DSB, the Panel considers that the measures contained in the two Decrees  are closely related 
with regard to their timing.  
7.60.   Likewise, the two D ecrees were recommended at the same session (the 299th session of 
7 October 2016) of the same Colombian regulatory body (Triple A Committee).184  
7.61.   The nature or subject matter  of the measure is also relevant to this examination. In previous 
proceedings consideration was given, within the nature analysis, to the fact that the related 
measures involved the same products185 and the use of the same methodology; this was the precise 
issue that was challenged in the original dispute, and which was the subject of the DSB rulings and 
recommendations.186 
7.62.   In this respect, Decrees  No. 1744/2016  and No. 1745/2016  apply to the same products187, 
namely, the products classified in Chapters 61, 62  and 64 (specifically headings 64.01, 64.02, 64.03, 
64.04  and 64.05  and subheading 6406.10.00.00) of the Colombian Customs Tariff.  
7.63.   Moreover, as the decrees themselves make clear, they seek to achieve the same public policy 
objectives as those pursued by the former Decree  No. 456/2014. As Panam a points out, the declared 
objective of the compound tariff of Decree  No. 456/2014 was to protect public morals by combating 
money laundering  and to secure compliance with Colombia's anti -money laundering legislation.188 
The preambles to Decrees  No. 1744/201 6 and No. 1745/2016 are explicit in this respect .  
7.64.   On the one hand, the preamble to  Decree  No. 1744/2016 reads as follows:  
Whereas, taking into account the fact that the implementation period provided for in 
Article  5 of Decree  456 of 2014, as extended by Decrees  515 of 2016  and 1229 of 2016, 
                                                
182 Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 225. Although "[a] s a whole, 
Article  21 deals with events subsequent to the DSB's adoption of recommendations and rulings in a particular 
dispute". (Appellate Body Report, US – Softwood Lumber IV (Article  21.5 – Canada) , para.  70 (original 
emphasis). See also Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 222). The timing  
of a measure cannot be determinative of whether it bears a sufficiently close nexus with a Member's  
implementation of the recommendations and rulings of the DSB so as to fall within the scope of a compliance 
proceeding. Since complia nce with the recommendations and rulings of DSB can be  
achieved before  the recommendations and rulings of the DSB are adopted, a compliance panel may  
have to review events pre -dating the adoption of those recommendations and rulings in order to  
resolve a d isagreement as to the 'existence' or 'consistency with a covered agreement' of such  
measures". (Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para.  224.)  
183 Panama 's first written submission as respondent, paras.  42-43; second written submis sion as 
complainant, para.  12; and second written submission as respondent, para.  95. 
184Decree No.  1745/2016 (Exhibit PAN -2), seventh preambular paragraph; and  Decree No.  1744/2016 
(Exhibits COL -1/PAN -1), second preambular paragraph.  
185 Appellate Body Repor t, US – Zeroing (EC) (Article 21.5 – EC), para.  240. 
186 In US – Zeroing  (EC) (Article 21.5 – EC), the methodology in question was zeroing in the calculation  
of margins of dumping. (Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para.  241 (cit ing Panel 
Report, US – Zeroing (EC) (Article 21.5 – EC), para. 8.104)). Similarly, in US – Softwood Lumber IV 
(Article  21.5 – Canada) , the Appellate Body found that the product that was subject to the three countervailing 
duty proceedings was the same,  and the "pass -through" methodology adopted by the USDOC was the same in 
two cases. (Appellate Body Report, US – Softwood Lumber IV (Article  21.5 – Canada) , para.  83). 
187Decree No.  1744/2016 (Exhibits COL-1/PAN -1), Articles  1 and 2; and Decree  No. 1745/2016 
(Exhibit  PAN-2), Article 2. 
188 Panama 's second written submission as complainant, paras.  30-31. WT/DS461/RW  
 
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  expires on 1 November 2016, it is necessary to implement the exception provided for 
in Article 2, paragraph 2, of Law 1609 of 2013, in order to achieve on an ongoing basis 
the policy objective pursued by this measure .189 
7.65.   Likewise, the preamble to  Decree  No. 1745/2016 states that:  
Whereas, taking into account the fact that the implementation period envisaged in 
Article  5 of Decree  456 of 2014, as extended by Decrees  515 and 1229 of 2016, expires 
on 1 November 2016, it is n ecessary immediately to implement the exception provided 
for in Article 2, paragraph 2 of Law 1609 of 2013, to the effect that the customs 
measures provided for in this Decree are applied in order to achieve on an ongoing basis 
the policy objective pursued  by the measures provided for in Decree  456 of 2014  and 
its amendments .190  
7.66.   On its website the Colombian DIAN emphasizes that it "combats the smuggling and 
underinvoicing of clothing and footwear by implementing Decrees  1744 and 1745"191 and, with 
reference to  certain measures, notes that they were adopted "for the purpose of giving effect to 
Decrees  1744 and 1745".192 This language shows  that the DIAN considers Decrees 
No. 1744/2016  and No. 1745/2016 to be measures having the same target, namely, to combat "the 
smuggling and underinvoicing of clothing and footwear". This view appears to be reinforced by the 
statements made by Colombian authorities in this respect. For example, on the same day the 
decrees  were adopted, Colombia 's Minister of Trade, Industry and To urism referred to 
Decrees  No. 1744/2016  and No. 1745/2016 as instruments to be applied jointly, asserting that "the 
measures we designed will enable us to combat illegal practices effectively, but at the same time we 
were careful not to adversely affect fo rmal trade and to comply fully with the WTO mandate".193 
7.67.   In addition, this Panel considers that the structure or methodology used in the decrees  is a 
reflection of their shared nature. Both Decree  No. 456/2014, which was examined in the original 
proceedings and Decrees  No. 1744/2016  and No. 1745/2016 establish tariffs or special measures 
applicable to imports of certain products at a declared price equal to or lower than certain 
predetermined thresholds. That is to say, the three decrees  operate in accordance  with thresholds 
established by Colombia on the basis of which special treatment is generated for the imports 
concerned.194 In all cases, moreover, Colombia considers that imports at or below the level of the 
thresholds have a high risk of being unlawful in nature.  
7.68.   The Panel considers that the fact that Decrees  No. 1744/2016  and No. 1745/2016 were 
introduced under different le gal regimes (the former in accordance with the Colombian Tariff Code 
and the latter under Law No. 1762/2015), as indicated by Colombia, does not affect the 
above -mentioned linkage. Likewise, the fact that one measure (Decree  No. 1744/2016) is an 
exclusivel y tariff measure whereas the other (Decree  No. 1745/2016) consists of customs control 
measures does not necessarily mean that they are unrelated in nature, as Colombia maintains. The 
Panel agrees with Panama in considering that Decree  No. 1745/2016 contain s customs verification 
measures for collecting the tariff in Decree  No. 1744/2016, so that even from a strictly tariff 
perspective, the measures of Decree  No. 1745/2016  and the tariffs of Decree  No. 1744/2016 are 
"closely related" in nature.195 
7.69.   As far as effects are concerned, in previous proceedings consideration was given to whether 
the effects of the measure were undermining the implementation of the DSB 's recommendations 
                                                
189 Decree No.  1744/2016 (Exhibits COL -1/PAN -1), third preambular paragraph. (emphasis added)  
190 Decree No.  1745/2016 (Exhibit PAN -2), eighth preambular paragraph. (emphasis added)  
191 Extract from the DIAN web page  (Exhibit  PAN-10). 
192 Panama's second written submission as complainant, para.  15. 
193 "Dos decretos que fortalecen control aduanero de calzado y ropa ", El Espectador  (Exhibit  PAN-46). 
194 This is also the understanding of the European Union, as a third party, which notes that the new 
mechanism is similar to that of the compound tariff, since it is also activated when the prices of imports fall 
below certain thresholds fixed by Colombia. Mo reover, for the European Union, the measures of the two decrees 
are Colombia 's response to the recommendations  and rulings of the DSB. If the compound tariff had not been 
declared inconsistent and  unjustified under Article  XX there would have been no reaso n to replace it with new 
measures. (European Union 's third -party written submission, paras.  11-20.) 
195 Panama 's second written submission as complainant, para.  32. WT/DS461/RW  
 
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  with respect to the measure originally challenged.196 In fact, although there are some limits to the 
scope of the compliance proceedings, "these limits should not allow circumvention by Members by 
allowing them to comply through one measure, while, at the same time, negating compliance 
through another".197  
7.70.   With respect to effects, Panama argu es that the trade restrictiveness mitigated by the new 
tariff is again having an undermining effect through the measures of Decree  No. 1745/2016. I n the 
original proceedings, Colombia argued that "the compound tariff leads to an increase in the unit 
price of apparel and footwear imports, thereby reducing the artificially high profit margin".198 In 
Panama 's opinion, the new  measures have the same effect: they combine a price -sensitive 
component (an ad valorem duty) with a price -insensitive component (specific duty or the 
requirement of a specific bond and documentary requirements) for the purpose of discouraging the 
importation of products at competitive prices in order to protect the domestic industry, using as 
justification the aim of combating money launderi ng.199  
7.71.   According to Panama 's reasoning, the Panel should conclude that the specific bond and the 
special import regime are restrictive in nature so that these measures may be regarded as connected 
with the measure taken to comply declared by Colombia. The a nalysis of the effects of the measure 
at issue to establish its connection with the measure declared does not require such a prior finding. 
The Panel 's analysis should instead be concentrated on establishing whether not considering the 
specific bond and th e special import regime to be part of the Panel 's terms of reference would enable 
Colombia to circumvent the recommendations  and rulings of the DSB.  
7.72.   The fact that  Decrees  No. 1744/2016  and No. 1745/2016 are constructed around the 
suspicion that imports at or below the level of the thresholds have a high risk of being unlawful in 
nature means that the effect of the specific bond and the special import regime under  
Decree  No. 1745/2016 is the same as the effect that the compound tariff had. This effect can be  
better understood if the ad valorem  tariff of Decree  No. 1744/2016 is also taken into account. The 
Panel agrees with the European Union that the combination of a price -sensitive aspect ( ad valorem 
tariff) and a price -insensitive one (bond and documentary requirements) could have the same effect 
as the compound tariff system.200 
7.73.   Furthermore, the Panel considers that, if it were determined that the measures contained in 
Decree  No. 1745/2016 were inconsistent with the covered agreements, those measures could 
actually undermine the implementation of the DSB 's recommendations with respect to the measure 
originally challenged. That is, if, as Panama maintains, the non -tariff elements of the measures were 
to operate, for example, as restrictions on the importation o f the restrictive products, the objective 
sought by means of the recommendations  and rulings of the DSB in the original proceedings would 
not be achieved in practice. The limits of the compliance proceedings should not allow circumvention 
by Members by all owing them to comply through one measure, while, at the same time, negating 
compliance through another.201 Consequently, the Panel considers that the measures would also be 
related with respect to their effects.  
7.74.   Once the timing, nature and effects have been  examined, the Panel should likewise examine 
the factual and legal background that formed  the basis for the adoption of the measure which 
Colombia has declared to constitute the "measure taken to comply". Only then will it be possible to 
take a view as to whether there are sufficiently close links to characterize the specific bond, together 
with the special import regime with the characteristics provided for in Decree  No. 1745/2016, as 
"measures taken to comply".202 
                                                
196 In US – Zeroing (EC) (Article 21.5 – EC), the Appellate Body  examined whether the use of ze roing in 
subsequent determinations could undermine implementation in respect of original investigations. 
(Appellate  Body Report, US – Zeroing (EC) (Article 21.5 – EC), para.  250.)  
197 Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada) , para. 71. 
198 Appellate Body Report, Colombia – Textiles , para.  5.88 (referring to Panel Report, Colombia – Textiles , 
para. 7.410).  
199 Panama 's second written submission as respondent, paras.  40-41. 
200 European Union 's third -party written submission, para.  16. 
201 Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada) , para.  71. 
202 Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada ), para.  77. See also 
Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 207.  WT/DS461/RW  
 
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  7.75.   There is factual and legal background that enables this Panel to determine that the measures 
contained in Decrees  No. 1744/2016  and No. 1745/2016 are closely related. First of all, the adoption 
of the two decrees  was recommended by the same Colombian aut hority, the Triple  A Committee, 
and at the sa me session (299th session held on 7 October 2016). This is confirmed by the preambles 
to the two decrees.  
7.76.   On the one hand, the preamble to Decree  No. 1744/2016 reads as follows:  
Whereas, having examined the recommendation made by the Committee on Customs, 
Tariffs and Foreign Trade at its 299th session of 7 October 2016 , the National 
Government resolved to establish … [.]203 
7.77.   On the other hand, in the preamble to Decree  No. 1745/2016 it is stated that:  
Whereas the Committee on Customs, Tariffs and Foreign Trade  at its 299th session of 
7 October 2016 recommended the adoption  of the measures incorporated in the present 
Decree.204 
7.78.   In the minutes of the said 299th session of the Triple A Committee it is stated that "[t]he 
Ministry presented a proposal for the collecti on of the tariff for imports of these goods, based on the 
definition of a price threshold".205 According to the minutes, this proposal considered an MFN tariff, 
a tariff bound with the WTO,  and customs verification measures. The Panel notes that these latter  
customs measures are not contained in Decree  No. 1744/2016. Therefore, it can only be concluded 
that, as indicated by Panama, these have to be the measures of Decree  No. 1745/2016. In addition, 
the Panel observes that according to the minutes:  
Once the to pics submitted by the DIAN  and the Ministry of Trade, Industry and  Tourism 
had been discussed, the Committee recommended, as a policy matter, the adoption of 
customs measures that make it possible to exercise more effective control over imports 
of clothing  and footwear products, in particular those imports where the values declared 
are abnormal, inexplicably low or unjustifiable in relation to the thresholds established. 
It also recommended that the tariff measures applied to these products be adjusted to 
comply with the recommendations  and rulings of the WTO Dispute Settlement Body.206  
7.79.   Moreover, the Panel notes that the preamble to Decree  No. 1745/2016 mentions that the 
adoption of the strategies envisaged therein was also recommended by another Colombian authority, 
the Inter -Institutional Commission against Smuggling, at a special  session held on 
24 August  2016.207 A reading of the minutes of that special session shows that the measures of 
Decree  No. 1745/2016 are clearly related to the recommendations  and r ulings of the DSB in the 
original proceedings. In this connection, after a brief summary of the original proceedings, the 
minutes state the following:  
Taking into account the above, since the WTO 's decision became known, the Ministry of 
Trade, Industry  and Tourism and the DIAN have been working on a series of preliminary 
strategies for implementing the recommendations of the DSB but which at the same 
time are effective against the use of imports of footwear, textiles  and clothing to launder 
money. Today the se strategies are being presented for consideration by the members 
of the Commission in order to be discussed and, if appropriate, considered among the 
possible implementation measures in relation to the WTO.208 
7.80.   Further on in the minutes it is noted that the  situation has led the DIAN on a preliminary basis 
to decide that work could be done on strategies that should be implemented by taking into account 
three ranges or thresholds, and mention is made of different customs strategies that could be applied 
to imports below the first threshold. These strategies include, inter alia , "[i]ntervening in the import 
                                                
203 Decree No.  1744/2016 (Exhibits COL -1/PAN -1), second preambular paragraph . (emphasis added)  
204 Decree No.  1745/2016 (Exhibit PAN -2), seve nth preambular paragraph.  (emphasis added)  
205 Minutes of the Triple A Committee 's 229th session (Exhibit  COL-4), p. 7.  
206 Ibid. p. 8.  
207 Decree No.  1745/2016 (Exhibit PAN -2), sixth preambular paragraph.  
208 Communications between the parties in the arbitrati on under  Article 21(c),  Minutes of  the special 
session of the Inter -Institutional Commission against Smuggling, p. 4. COL -ARB-02 (Exhibit  PAN-83). WT/DS461/RW  
 
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  operation in the process of inward clearance on the basis of criteria derived from the customs risk 
control system", "[s]trengthening the role of the observ er with respect to advance declarations", 
and "[i]ntensifying the work of identifying enterprises that have performed inward clearance at 
obviously low prices, for the purpose of carrying out a comprehensive analysis and generating inputs 
which make it pos sible to frame special cases for transmission to the Financial Information and 
Analysis Unit (UIAF) and the Attorney General's Office".209 
7.81.   For all of the above reasons, the Panel concludes that the specific bond and the special import 
regime with the ch aracteristics provided for in Decree  No. 1745/2016 are "inextricably 
linked"  and "clearly connected" to the measure declared by Colombia as having been taken to 
comply, that is to say, the ad valorem  tariff imposed by Decree  No. 1744/2016.   
7.82.   In addition, althoug h the Panel recognizes that the statements made by the parties in an 
arbitration proceeding under Article  21.3(c) of the DSU are not binding in subsequent procedures, it 
seems relevant to point out that during the arbitration under that article  Colombia st ated that it 
would "carry out the administrative processes required to enact the measures modifying the 
compound tariff and implementing improvements to Colombia 's customs control and supervision 
procedures"  and that "[t]wo mutually supportive decrees woul d have to be issued. One regarding 
the adjustment of tariffs and the other establishing the customs measures".210 
7.83.   The Panel observes that one of the arguments used by Colombia against the consideration of 
the specific bond and the special import regime as pa rt of the Panel 's terms of reference is that it 
would seriously impair its rights by subjecting it to the possibility of suspension of concessions 
without a reasonable period of time.211 The Panel considers that, after the original proceedings, 
Colombia was given a "reasonable period of time" to implement the recommendations  and rulings 
of the DSB  and that in the review of its  measure it could have confined itself to replacing the 
compound tariff with an ad valorem one. However, Colombia decided to adopt, in addition, the 
specific bond and the special import regime. In these circumstances, the lack of a new "reasonable 
period of time" does not give rise to the serious impairment of its rights alleged by Colombia. 
Moreover, it is a characteristic of compliance proceedings that "no reasonable period of time for 
implementation is available if the new measure taken to comply with the DSB 's 
recommendations  and rulings is found to be WTO -inconsistent".212 
7.1.2.3   Conclusion  
7.84.   For the reasons given above, the Panel concludes that  the specific bond and the special import 
regime with the characteristics described in  Decree  No. 1745/2016 are "inextricably 
linked"  and "clearly connected" to the measure declared by Colombia as taken to comply, that is to 
say, the tariffs imposed by Dec ree No. 1744/2016.   
7.85.   Once it has been concluded that the specific bond and the special import regime with the 
characteristics described in Decree  No. 1745/2016 fall within the Panel 's terms of reference, another 
problem arises as a result of the fact that t he Decree in question has been repealed and replaced by 
Decree  No. 2218/2017, as explained in Section 7.1.3.2.1  below. According to Panama, the spe cific 
bond and the special import regime with the characteristics provided for in Decree  No. 2218/2017, 
which replaces and repeals Decree  No. 1745/2016, are also within the Panel 's terms of reference. 
This likewise raises the question of whether findings s hould be made with regard to a repealed 
measure, as Panama requests.  
                                                
209 Communications between the parties in the arbitration  under  Article 21.3(c),  Minutes of the  special 
session of the Inter -Institutional Commission against Smuggling, pp. 6 -7. COL -ARB-02 (Exhibit  PAN-83). 
210 Award of the Arbitrator, Colombia – Textiles (Article 21(c) , para.  3.27. 
211 Colombia 's first written submission as respondent, para.  38. 
212 Appellate Body Report, US – Upland Cotton ) (Article 21.5 – Brazil) , para. 207. WT/DS461/RW  
 
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  7.1.3   The question of which measures are the ones on which the Panel should rule  
7.1.3.1   Arguments of the parties  
7.1.3.1.1   Panama  
7.86.   Panama considers that the Panel could and should make findings and recommendations 
concerning the measures in question on the basis of Decree  No. 2218/2017.213 For Panama, the fact 
that a regulation is introduced after a panel has been established does not deprive the panel of 
procedural competence to rule on what has b een defined as the measure at issue, regardless of the 
formal " raiment " in which that measure may be clad. Otherwise, adds Panama, the respondents 
could easily manipulate the outcome of disputes.214 
7.87.   Panama points out that Decree  No. 2218/2017 merely replaces  Decree  No. 1745/2016 
without changing the essence of the compliance measures, with regard to their nature as customs 
controls. Panama asserts that it would be wrong to say that Decree  No. 2218/2017 is a new 
"measure", since it is merely a new "legislative  act" that prolongs the applicability of already existing 
measures. Panama  maintains that the debate does not revolve around a "new measure" , since the 
measures challenged by Panama have always been the same: the specific bond and the special 
import regime . For Panama, since the essence of these measures was not changed by the adoption 
of Decree  No. 2218/2017, they continue to be the same undeclared compliance measures,  and 
Decree  No. 2218/2017 constitutes the legislative instrument with respect to which th e Panels should 
make rulings and recommendations.215 
7.88.   Panama states that the Appellate Body in Chile – Price Band System confirmed that panels 
may consider a measure that is the subject of legislative amendment in the course of the 
proceedings, provided that three requirements are met: (a) that the legislative amendment does 
not alter the essence of the measure; (b) that the panel 's terms of reference are sufficiently broad 
to include amendments to a measure;  and (c) that it may be relevant to examine whether the 
inclusion of any changes to a panel 's terms of reference is necessary to secure a positive solution to 
the dispute.216 
7.89.   Panama maintains that the first requirement would be met in this case since the issuance of 
Decree  No. 2218/2017 did not change the ess ence of the measures at issue which remain essentially 
the same in substance. For Panama, the present situation is very similar to that which arose in the 
original proceedings when Colombia replaced Decree  No. 074/2013 with Decree  No. 456/2014. In 
that ins tance, the original panel considered that the legislative change introduced by 
Decree  No. 456/2014 had not given rise to a change in the essence and character of the measure. 
Panama maintains that, similarly, the amendments introduced by Decree  No. 2218/20 17 did not 
change the essence of Decree  No. 1745/2016 for the following reasons: (a) both decrees  provide 
for a specific bond and a special import regime; (b) both decrees  apply to the same range of 
products, with new products added under the second decree ; (c) the two decrees  contain the same 
or very similar regulations; (d) both decrees  were issued by the President of the Republic of Colombia 
or delegated bodies with presidential functions citing the same basis in law; (e) the two decrees 
have practically  identical titles and were adopted by the President of the Republic of Colombia on 
the basis of a recommendation issued by the Triple A Committee; (f) the two decrees  are similar in 
validity since they are to remain in force indefinitely; (g) in the course  of the proceedings before the 
panels, Colombia affirmed that both decrees  pursue the same objective, namely, to combat 
underinvoicing and money laundering;  and (h) Decree  No. 2218/2017 replaces and repeals 
Decree  No. 1745/2016.217  
7.90.   Panama asserts that the s econd requirement established in Chile – Price Band System is met, 
since the terms of reference of the panels are broad enough to include amendments to a measure. 
Panama points out that in its request it explicitly included "any amendments, extensions or 
                                                
213 Panama 's response to Panel question No.  52. 
214 Panama 's respons e to Panel question No.  53 and comments on Colombia 's response to Panel 
question No.  53. 
215 Panama's opening statement at the meeting of the Panel, para.  40; and comments on Colombia 's 
response to Panel question No.  53. 
216 Panama 's response to Panel question  No. 52. 
217 Panama 's response to Panel question No.  52. WT/DS461/RW  
 
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  additions" to Decree  No. 1745/2016  and that, because Decree  No. 2218/2017 amends, extends or 
adds to Decree  No. 1745/2016, Decree  No. 2218/2017 is explicitly covered by the terms of 
reference of the panel requested by Panama. Panama adds that, in specifying  the legal consequences 
of non -compliance with the special import regime, Decree  No. 2218/2017 refines the provisions of 
Decree  No. 1745/2016. Panama also maintains that the text of Decree  No. 2218/2017 itself 
establishes that the decrees  are closely relat ed to each other, since Decree  No. 2218/2017 replaces 
Decree  No. 1745/2016, pursuant to  Article  12 of Decree  No. 2218/2017.218  
7.91.   With respect to the terms of reference of the panel requested by Colombia, Panama maintains 
that Decree  No. 2218/2017 is implicitl y covered under its terms of reference, since it is the legislative 
act in force that reflects the undeclared compliance measure, covered by virtue of the close nexus. 
Panama adds that it has demonstrated that the specific bond and the special import regim e are 
compliance measures not declared by Colombia, so that a legislative change in those measures that 
does not affect their essence does not alter that demonstration.219 
7.92.   Panama considers that the third requirement established in Chile – Price Band System  is met 
in this case since making findings with respect to the specific bond and special import regime on the 
basis of Decree  No. 2218/2017 would be of help in securing a positive solution to the dispute. 
Panama considers that the usefulness of any finding w ould be limited if the panels were to ignore 
the amendments of Decree  No. 2218/2017  and base themselves exclusively on the specific bond 
and special import regime in the way in which they were envisaged in the previous 
Decree  No. 1745/2016.220 
7.93.   Panama maintai ns that continuous legislative changes during the proceedings place the 
complainant in a situation of uncertainty and procedural disadvantage as compared with the 
respondent, which always has the possibility of changing its measures to avoid a guilty verdi ct. For 
Panama, the position of the Appellate Body that a panel is not required to rule on measures that did 
not exist at the time it was established makes sense in order to safeguard the procedural interests 
of the complainant  and spare it the obligation of constantly pursuing moving targets.221 The premise 
of this position, according to Panama, is the protection of the procedural interests of the complainant, 
so that if the complainant consents to a panel examining the same measure on the basis of a new 
legislative instrument, the panel in question should carry out that examination.222 
7.94.   Panama maintains that if the Panels do not examine the measures in question under 
Decree  No. 2218/2017, Panama would have to request a second compliance proceeding to assess 
the same measures, but with the clarifications or additions of Decree  No. 2218/2017, which would 
be an inefficient use of resources and the dispute settlement system and contrary to fundamental 
principles such as that of achieving a satisfactory settlement of  the matter in accordance with 
Article  3.4 of the DSU and prompt settlement and prompt compliance in accordance with 
Articles  3.3 and 21.1 of the DSU.223  
7.95.   Panama considers that the Panel should also make findings regarding the measures reflected 
in Decree  No. 1745/2016, since these were the measures in force at the time of establishment of 
the panels. Panama states that the importance of making findings regarding the measures in force 
at the time of establishment of the panels resides in a complaining party n ot having to adjust its 
pleadings in the course of a dispute in order to contend with the variable content of a disputed 
measure. Panama considers that making findings regarding the measures on the basis of 
Decree  No. 1745/2016 would lead to a positive sol ution to this dispute, since the legislative situation 
in Colombia with respect to imports of the products in question is changing constantly and there is 
a possibility of the Panel determining that it is not competent to make findings regarding the 
measur es on the basis of Decree  No. 2218/2017.224 
                                                
218 Idem.  
219 Panama 's response to Panel question No.  52. 
220 Idem.  
221 Panama refers to the Appellate Body report in Chile – Price Band System  and the panel report in 
Argentina – Footwear (EC) . (Panama 's response to Panel question No.  54.) 
222 Panama 's response to Panel question No.  54. 
223 Panama 's response to Panel question No.  54. 
224 Panama 's response to Panel question No.  52. WT/DS461/RW  
 
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  7.96.   Panama maintains that the matter referred to the Panel consisted of the questions included 
both in Colombia 's request and in Panama 's request. Panama asserts that the matter referred to the 
Panel by Colombia in its  request included Panama 's concerns relating to Colombia 's compliance with 
the recommendations  and rulings of the DSB, and that Panama 's request is explicit and describes 
the measures at issue as part of the matter.225 
7.1.3.1.2   Colombia  
7.97.   Colombia maintains that the bo nd and the special regime established in 
Decree  No. 2218/2017 are not compliance measures and therefore cannot be challenged under 
Article  21.5 of the DSU. Colombia states that, as explained with respect to Decree  No. 1745/2016, 
the recommendations  and rul ings of the DSB are limited to the compound tariff  and have no 
relationship with the measures implemented through Decrees  No. 1745/2016 and 
No. 2218/2017.226 
7.98.   Colombia considers that, in the event that the Panel determines that the measures contained 
in Decre es No. 1745/2016 and No.  2218/2017 form part of its terms of reference, it agrees with 
Panama that the Panel could and should formulate recommendations regarding the measures in 
question reflected in Decree  No. 2218/2017. Moreover, Colombia considers that the Panel should 
avoid making findings and  recommendations regarding Decree  No. 1745/2016, since it is no longer 
in force. Colombia requests the Panel to find that, as it is not in force, Decree  No. 1745/2016 cannot 
cause nullification or impairment.227 
7.99.   Colombia acknowledges that panels, within the framework of Article  21.5 of the DSU, have 
examined measures enacted after they were established when those measures incorporated the 
same conduct that was found to be WTO -inconsistent in the original proceedin gs. Colombia points 
out, however, that this interpretation is valid only with respect to those aspects of the new measure 
which are essentially identical with the previous measure and is not applicable to novel aspects of 
the measure.228 
7.1.3.2   Analysis by the Pane l 
7.100.   The Panel 's next task is to determine which measures it should examine: the specific bond 
and the special import regime with the characteristics provided for in Decree  No. 1745/2016,  and 
therefore "repealed"; the specific bond and the special import regi me with the characteristics 
provided for in Decree  No. 2218/2017, and currently in force; or both. Panama has requested the 
Panel to make findings with regard to the repealed measures and findings and recommendations 
with regard to the measures in force.  
7.1.3.2.1   The question of whether the Panel can make findings with regard to repealed 
measures  
7.101.   Panama requests the Panel to make findings with respect to the specific bond and the special 
import regime with the characteristics provided for in Decree  No. 1745/2016. These measures, 
which are identified in Panama 's panel request, were in force at the time of establishment of this 
Panel, but were repealed during the present proceedings. It is therefore necessary to examine 
whether the Panel is empowered to make findings  with regard to repealed measures.  
7.102.   Although we are engaged in compliance proceedings under Article  21.5 of the DSU, leaving 
aside the question of which measures are "measures taken to comply", the requirements of 
Article  6.2 of the DSU are applicable for d etermining the scope of the terms of reference of 
compliance panels.229 This provision requires that the specific measures at issue be "identified" in 
the panel request, but does not clarify whether they have to be in force at the time when the panel 
                                                
225 Panama 's response to Panel question No.  53. 
226 Colombia 's additional written submission, paras.  9 and 11. 
227 Colombia 's comments on Panama 's responses to Panel questions Nos.  49, 52  and 53. 
228 Colombia 's response to Panel questions No.  53, paras.  241-242, and No.  54, paras.  243-244; and 
comments on Panama 's response to Panel question  No. 54. 
229 Appellate Body Reports, US – FSC (Article 21.5 – EC II) , para.  59 and  US – Zeroing (Japan) 
(Article  21.5 – Japan) , para.  109. WT/DS461/RW  
 
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  makes i t findings. In this respect, the fact that a measure has been repealed does not settle the 
question of whether a panel can examine claims with regard to that measure.  
7.103.   It is important to stress that the deference accorded to a Member's exercise of its judgm ent 
in bringing a dispute is not entirely boundless, so that where a measure expires or is repealed during 
the panel proceedings, the panel, in the exercise of its jurisdiction, must objectively assess whether 
the "matter" before it, within the meaning of Article  7.1 and Article  11 of the DSU, has been fully 
resolved or still requires to be examined.230  
7.104.   By virtue of Article  11 of the DSU, every panel has a margin of discretion in the exercise of 
its inherent adjudicative powers. Thus, within this margin of d iscretion, it is for the panel to decide 
how subsequent modifications to the measure at issue, including its repeal, are to be taken into 
account.231  
7.105.   It is therefore appropriate to assess whether the matter before the Panel has been fully 
resolved by the re peal of Decree  No. 1745/2016. In this connection, the Panel observes that 
Decree  No. 1745/2016 has been repealed and replaced  by Decree  No. 2218/2017, which also 
includes a specific bond and a special import regime. In fact, Panama is requesting the Panel to 
make findings (and recommendations) in this respect. This implies that, in order to determine 
objectively whether the repeal of Decree  No. 1745/2016 has fully resolved the matter, it is first 
necessary to determine whether the specific bond and the spec ial import regime with the 
characteristics provided for in Decree  No. 2218/2017 fall within the Panel 's terms of reference and, 
if so, whether the Panel should make findings in that respect.  
7.1.3.2.2   The question of whether the specific bond and the special import  regime with 
the characteristics provided for in Decree  No. 2218/2017 fall within the Panel 's terms of 
reference  
7.106.   As described in Section 7.1.3.2.1  above, Decree  No. 2218/2017 not only repeals 
Decree  No. 1745/2016 but replaces it, thereby replacing certain aspects of the specific bond and the 
special import regime. Thus, the repeal and replacement accomplished by Decree  No. 2218/2017 
may be likened t o an amendment of Decree  No. 1745/2016. Therefore, and in line with the approach 
of previous panels, the jurisprudence relating to amendments made after the establishment of a 
panel would also apply to superseding or replacement measures, such as Decree  No. 2218/2017.232  
7.107.   It should be recalled in this respect that the Panel has powers to examine a legal instrument 
adopted after its establishment that amends a measure identified in the panel request, provided that 
the language of the panel request is broad eno ugh to include the amended measure and the 
amendment does not change the "essence" of the measure identified.233 
7.108.   The Panel observes that the language of Panama 's panel request explicitly provides for the 
inclusion in the panel 's terms of reference of "any po ssible amendments, extensions or additions". 
Thus, Panama intended that the request should cover amended or replaced measures.  
7.109.   The Panel also observes that Decree  No. 2218/2017 does not transform the specific bond 
and the special import regime into measur es different from the specific bond and special import 
regime of Decree  No. 1745/2016. Both measures continue to exist and entail the same legal 
consequences.  In fact, as described in paragraphs 2.38-2.39 above, Decree  No. 2218/2017 
continues to envisage the requirement of a specific bond for the relevant products (with some 
changes in product coverage234), although some particular characteristics of the specific bond, such 
                                                
230 In EU – PET (Pakistan) , the Appellate Body used similar language to refer to measures that had 
expired. (Appellate Bo dy Report , EU – PET (Pakistan) , para. 5.51.)  
231 Appellate Body Report, EU – PET (Pakistan) , para. 5.51. 
232 The panel in China – Raw Materials  considered that the legal approach originally developed in 
connection with amendments enacted after a panel's establishment "should also apply to replacement 
measures that are of the same essence as original measures specifically identified in the Panel R equest." 
(Panel Reports, China – Raw Materials , para.  7.16.)  
233 Appellate Body Reports, Chile – Price Band System , paras.  135-139; EC – Chicken Cuts , para.  157; 
and EC – Selected Customs Matters , para.  184.  
234 Whereas Decree No.  1745/2016 covers  clothing  and footwear classified in Chapters 61, 62  and 64 of 
the Colombian Customs Tariff  when the declared f.o.b. price is lower than or equal to a certain threshold, 
Decree  No. 2218/2017 covers fibres, yarns, fabrics, clothing  and footwear of Chapters 52, 53, 54, 55, 56, 58, WT/DS461/RW  
 
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  as the amount, have been modified.235 Likewise, Decree  No. 2218/2017 continues to envisage a 
special import regime for the rel evant products, although some specific aspects of the regime have 
been modified.236 Thus, in the view of this Panel, the specific bond and the special import regime 
continue to exist with some of their characteristics modified, but with no change to their "e ssence".  
7.110.   Therefore, the Panel considers that the specific bond and the special import regime with the 
characteristics provided for in Decree  No. 2218/2017 fall within the Panel 's terms of reference, 
because the language of Panama 's panel request is suffic iently broad and the essence of the original 
measures has not changed as a result of their being replaced.  
7.1.3.2.3   The question of whether the Panel should rule on the measures with the 
characteristics of both decrees  
7.111.   Once it has been concluded that the specific  bond and the special import regime with the 
characteristics provided for in Decree  No. 2218/2017 fall within the Panel 's terms of reference, the 
next step is to determine the measures on which findings should be made. It should be recalled that 
Panama is requesting that the Panel make findings with regard to the repealed measures and with 
regard to the measures that replace them.  
7.112.   In Section  7.1.3.2.1  above, it is explained that to determine whether the Panel should make 
findings concerning a repealed measure it should be objectively assessed whether the "matter" 
before it, within the meaning of Article  7.1 and Article  11 of the DSU, has been fully res olved through 
such repeal or has still to be examined.237 The Panel believes that making findings on the repealed 
measures would not resolve the matter before it, precisely because of the replacement of the 
repealed measures with other measures that are of t he same essence.  
7.113.   The Panel 's conclusion is supported by the object and purpose of the dispute settlement 
system, as laid down in Articles  3.4 and 3.7 of the DSU, to secure a positive solution to the dispute.238 
Indeed, the Panel considers that it should exa mine the specific bond and the special import regime 
with the characteristics provided for in Decree  No. 2218/2017 "to 'secure a positive solution to the 
dispute'  and to make 'sufficiently precise recommendations and rulings so as to allow for prompt 
compl iance'".239 The Panel recalls that "[i]f the terms of reference in a dispute are broad enough to 
include amendments to a measure —as they are in this case —and if it is necessary to consider an 
amendment in order to secure a positive solution to the dispute —as it is here —then it is appropriate 
to consider the measure as amended  in coming to a decision in a dispute".240 
7.114.   Panama requests that the Panel rule on both measures (repealed and replacement). Panama 
argues that making findings on the measures on the basis o f Decree  No. 1745/2016 would provide 
a positive solution to this dispute, because the regulatory situation in Colombia with respect to 
imports of the products in question is changing constantly and there is a possibility that the Panel 
might determine that  it is not competent to make findings on the measures on the basis of 
                                                
59, 60, 61, 62, 63  and 64 of the Customs Tariff, where the declared f.o.b. price is lower than or equal to the 
established threshold. Likewise, the thresholds of Decree No.  2218/2017 were adjusted using the same 
methodology as that used for est ablishing the thresholds of Decree No.  1745/2016.  
235 The specific bond provided for in Article  7 of Decree No.  1745/2016 is required for release of the 
goods covered by the decree;  it must be provided by a bank or insurance company; its amount is 200% of th e 
unit price of the established "threshold" multiplied by the quantity imported; it must be for a three -year term 
and its purpose will be to guarantee payment of such customs duties and penalties as may apply. As for the 
specific bond provided for in Artic le 7 of Decree No.  2218/2017, it is required for release of the goods covered 
by the decree if a dispute arises with respect to value in connection with the inspection or examination  
process; it must be provided by a bank or insurance company; its amount i s 200% of the difference between 
the f.o.b. price declared by the importer and the result of multiplying the unit price of the established threshold 
by the quantity imported; and it must be for a three -year term.  
236 We note that the requirements concerning the presence of import operations observers and risk 
management are identical in both decrees, the differences in the customs formalities are very minor, and 
Decree No.  2218/2017 introduced a prohibition on the reshipment of the covered goods if they do no t comply 
with the customs formalities.  
237 In EU – PET (Pakistan) , the Appellate Body used similar language to refer to measures that had 
expired. (Appellate Body Report, EU – PET (Pakistan) , para. 5.51.)  
238 Appellate Body Report, Chile – Price Band System , paras. 140-143. 
239 Appellate Body Report, Chile – Price Band System , para.  143. 
240 Appellate Body Report, Chile – Price Band System , para.  144. (original emphasis)  WT/DS461/RW  
 
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  Decree  No. 2218/2017.241 The Panel is not convinced by this argument of Panama. First, the Panel 
has already determined that Decree  No. 2218/2017 falls within its terms of reference, so th at 
Panama 's concern is baseless. Secondly, Panama has accepted that it is not necessary to make 
recommendations with regard to Decree  No. 1745/2016, and has thus recognized that these 
measures are no longer producing effects. Moreover, in the Panel 's opini on, Panama has not 
sufficiently demonstrated the risk of Colombia re -imposing the specific bond and the special import 
regime with the characteristics provided for in Decree  No. 1745/2016. Therefore, the Panel considers 
that making findings on the repealed  measures would amount to a purely academic exercise and 
that, in order to fulfil its mandate to resolve the matter before it, it must examine and make findings 
and, where appropriate, recommendations, with regard to the specific bond and the special impor t 
regime with the characteristics provided for in Decree  No. 2218/2017  and not those provided for in 
Decree  No. 1745/2016.  
7.115.   The Panel points out that, as indicated in paragraph 1.28 above, for the purpose of 
safeguarding Colombia's procedural rights, it gave the latter the opportunity to submit an additional 
written submission following the substantive meeting in order to respond to Panama 's claims 
regarding the measures with the characteristics provided for in Decree  No. 2218/2017. In fact, 
Panama had presented its claims relating to that Decree  in its second written submission as 
respondent, at a point in the procedure at which the timetable for the P anel's proceedings did not 
provide for further written submissions from the parties. The Panel believed that Panama could not 
have presented these arguments earlier since Decree  No. 2218/2017 entered into force during the 
period between the second written submission of the parties as complainant and the second written 
submission as respondent. Colombia made use of the opportunity provided by the Panel  and on 
20 April 2018 presented an additional written submission containing its arguments with respect to 
Decree No. 2218/2017.  
7.1.3.3   Conclusion  
7.116.   As indicated in paragraph 7.110  above, the Panel considers that the specific bond and the 
special import regime wit h the characteristics provided for in Decree  No. 2218/2017 fall within the 
Panel 's terms of reference, because the language of Panama 's panel request is sufficiently broad and 
the essence of the original measures has not changed as a result of their being replaced.  
7.117.   For the reasons set out above, the Panel concludes that, in order to fulfil its mandate to 
resolve the matter before it, it must examine and make findings and, where appropriate, 
recommendations with regard to the specific bond and the special i mport regime, with the 
characteristics provided for in Decree  No. 2218/2017  and not those provided for in 
Decree  No. 1745/2016.  
7.1.4   The question of which claims are within the Panel 's terms of reference  
7.118.   The Panel will now examine two issues: first, whether the  claims included by Panama in its 
written submissions but not identified in its panel request form part of its terms of reference;  and 
secondly, whether the claims included in Panama 's panel request fall within the terms of reference 
of the panel establish ed at Colombia 's request.  
7.119.   As is the case with the measures, there is a close relationship between the claims that can 
be invoked in a compliance proceeding and the panel request. The task of a compliance panel 
consists of examining the "consistency with a  covered agreement" of "measures taken to comply 
with the recommendations  and rulings" of the DSB. This "task is circumscribed by the specific claims 
made by the complainant when the matter is referred by the DSB for an Article 21.5 proceeding".242 
That is t o say that "[i]t is not part of the task of a panel under Article 21.5 to address a claim that 
has not been made".243 Therefore, Panama may not invoke claims of inconsistency with provisions 
of WTO agreements that it did not include in its panel request. The  Panel observes that Panama 's 
panel request does not contain claims with respect to Article  VIII:3 of the GATT 1994 nor with 
respect to Article  7.2(g) of the Customs Valuation Agreement. Given that Panama did not include 
these provisions in its panel reque st, they do not fall within this Panel 's terms of reference.  
                                                
241 Panama 's response to Panel question No.  52. 
242 Appellate Body Report, US  – Shrimp (Article 21. 5 – Malaysia) , para.  87. 
243 Ibid. para. 87. WT/DS461/RW  
 
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  7.120.   The claims to be considered by the compliance panel are also determined by the "measure 
taken to comply". Thus, "[i]f a claim  challenges a measure  which is not a "measure taken to comply", 
that claim  cannot properly be raised in Article 21.5 proceedings".244 The claims in relation to the 
specific bond and the special import regime included by Panama in its panel request would fall within 
its terms of reference, as this Panel has considered that they are closely connected with the measure 
declared by Colombia as having been taken to comply.  
7.121.   The problem resides in the objection raised by Colombia with regard to the consideration of 
the claims made in Panama 's panel request by the panel established at Colombia 's request. The 
Panel recalls that if the original com plainant considers that the measure taken to comply is 
inconsistent with provisions of the WTO agreements not covered in the request for the establishment 
of a panel by the implementing Member, it may file its own request for the establishment of a panel 
under Article 21.5 identifying those provisions that it considers should be examined by the 
Article  21.5 panel. It would then be for the compliance panel to determine whether the implementing 
measure violates the WTO agreements in ways different from the or iginal measure or whether 
certain claims fall outside the scope of Article  21.5 proceedings.245 Indeed, the original respondent 
that has taken a "measure taken to comply" cannot be expected to speculate as to the violations 
that could possibly be raised agai nst its measure by other Members, and this is not what the original 
respondent is expected to do if it initiates Article 21.5 panel proceedings.246  
7.122.   In the present proceedings, Panama has filed a panel request that includes those claims 
which it considers re levant in relation to the measures taken to comply. To accept Colombia 's 
position would mean that the Panel would be creating an artificial situation within which two different 
decisions would exist, one related to Colombia 's panel request, limited to the claims considered by 
the original panel, and one related to Panama 's request, with all the claims made by Panama. That 
might lead, among other things, to a possible contradiction in the decisions, with one determining 
that Colombia has brought its measures  into conf ormity with the recommendations and rulings of 
the DSU, and the other determining that Colombia has not yet done so. The Panel therefore rejects 
Colombia 's argument.  
7.123.    A final matter for examination in relation to the claims made by Panama is Col ombia 's 
argument according to which the Panel could not accept Panama 's arguments regarding the 
inconsistency of Colombia 's measures under the Customs Valuation Agreement because they were 
included in its submissions as respondent. In particular, Colombia maintains that the consequence 
of Panama having presented its arguments with respect to the claims of inconsistency with the 
Customs Valuation Agreement for the first time in its second written submission as respondent is 
that the claims must remain outsid e the Panel 's terms of reference.247 Colombia contends that 
Panama 's claims with respect to the Customs Valuation Agreement lie outside the terms of reference 
of the panel requested by Colombia because they would not be part of the "matter" submitted for 
consideration by the panel in the corresponding panel request.  For Colombia, these claims are not 
directed against Decree  No. 1744/2016  and were not identified by Colombia in its panel request, so 
that there is no legal underpinning that would allow Panama to  broaden the terms of reference of 
the Panel by presenting claims in its written submission as respondent.248 The Panel recalls its 
conclusion according to which the inclusion by Panama of such claims in its panel request is sufficient 
for them to be conside red as part of the terms of reference of the panel established at Colombia 's 
request, since they refer to measures closely connected with the measure declared by Colombia as 
taken to comply.  
7.124.   In its first written submission as respondent, Panama refers for  the first time to its claims 
under the Customs Valuation Agreement.249 Subsequently, in its second written submission as 
respondent, Panama develops its arguments concerning the  inconsistency with the 
Customs  Valuation Agreement of the specific bond and the  special import regime. However, as 
                                                
244 Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , para. 78. (original emphasis)  
245 Appellate Body Reports, Canada/US – Continued Suspension , para.  354. 
246 Appellate Body Reports, Canada/US – Continued Suspension , para.  353. 
247 Colombia 's comments on Panama 's response to Panel question No.  56. 
248 Colombia 's second written submission as complainant, para.  14; additional written submission, 
para. 28; response to Panel question No.  56, para.  250; and comments  on Panama 's response to Panel question 
No. 56. 
249 Panama 's first written submission as respondent, para.  66. WT/DS461/RW  
 
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  Panama points out, it presented the same arguments as complainant in its initial oral statement at 
the meeting with the Panel.250 
7.125.   In the light of the foregoing, the Panel rejects Colombia 's objection and considers Panama 's 
claims under the Customs Valuation Agreement to fall within the Panel 's terms of reference for both 
proceedings.  
7.1.4.1   Conclusion  
7.126.   For all of the above reasons, the Panel concludes that Panama 's claims with respect to 
Articles  VIII:3 of the GATT 1994  and 7.2(g) of the Customs Valuation Agreement do not fall within 
the Panel 's terms of reference, since Panama did not include them in its request for the establishment 
of a panel.  
7.127.   The Panel also concludes that Panama 's claims included in its panel request fall within the 
Panel's terms of reference in both proceedings.  
7.128.   Below, the Panel proceeds to examine whether, as Colombia requests, the ad valorem  tariff 
imposed by Decree  No. 1744/2016 is consistent with Article  II:1 of the GATT 1994. The Panel 's 
examination will continue with the analysis of Panama 's claims regarding the alleged inconsistency 
of the specific bond and the special import regime with the characteristics of Decree  No. 2218/2017 
under Articles  XI:1 and X:3(a) of the GATT  and Articles  1, 2, 3, 5, 6  and 7.2(f) of the 
Customs  Valuation Agreement. Should the Panel find the specific bond or the special import regime 
or both to be inconsistent with any of these provisions, it will consider the defence put forward by 
Colombia under subparagraphs (a)  and ( d) of Article  XX of the GATT 1994.  
7.2  The question of whether the tariffs of Decree  No. 1744/2016 are consistent with 
Article  II.1(a)  and Article II.1(b), first sentence, of the GATT 1994  
7.2.1   Introduction  
7.129.   In its panel request, Colombia indicated that, by means of  Decree  No. 1744/2016, it has 
replaced the compound tariff declared inconsistent with Articles  II.1(a)  and Article  II.1(b), first 
sentence, of the GATT 1994, with an ad valorem tariff that does not exceed the tariff rates bound in 
the WTO. Colombia maintai ns that it has there by brought the measure subject to the DSB 's 
recommendations into conformity with its WTO obligations.251  
7.130.   In this connection, Colombia has identified the tariffs applicable under 
Decree  No. 1744/2016 as the measure taken to comply with th e recommendations of the DSB  and 
has requested, with respect to this Decree, that this Panel find that Colombia has complied with the 
DSB recommendations  and rulings  in the original proceedings.252 For its part, Panama does not 
question that the tariffs prov ided for in Decree  No. 1744/2016 are a measure taken to comply253 nor 
does it make claims against these tariffs.254 
7.131.   This section will focus on Colombia 's request with respect to Decree  No. 1744/2016 that the 
Panel find that Colombia has complied with the recom mendations  and rulings of the DSB in the 
original proceeding.  
                                                
250 Panama 's response to Panel question No.  55. 
251 Colombia 's request for the establishment of a panel, WT/DS461/17, p. 2.  
252 Colombia 's first written  submission as complainant, para.  39.  
253 See, for example, Panama 's second written submission as complainant, para.  5. 
254 Panama 's response to Panel question No.  51. WT/DS461/RW  
 
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  7.2.2   Arguments of the parties  
7.2.2.1   Colombia  
7.132.   Colombia states that on 2 November 2016 it issued Decree  No. 1744/2016, which  repealed 
the compound tariff  and modified the tariffs applicable to imports of the  products classified in 
Chapters  61, 62  and 63 and certain headings of Chapter 64.255 
7.133.   Colombia maintains that the bound rate in its Schedule of Concessions for  products classified 
in Chapters 61  and 62 is 40% and that Decree  No. 1744/2016 sets an ad valorem  MFN tariff of 40% 
for imports of  products classified in Chapters 61  and 62 of the Colombian Customs Tariff when the 
declared f.o.b. import price is less than or equal to US$10 per gross kilogram. Colombia maintains 
that the tariff is consistent with the le vels bound in Colombia 's Schedule of Concessions and is 
therefore in conformity with the provisions of the first paragraph  of Article  II.1(b) of the 
GATT  1994.256 
7.134.   Colombia also states that in those cases where the import price of the products classified in 
Chapters  61 and 62 exceeds US$10, as in the case of imports of  products classified in Chapter  63, 
the MFN tariff will be that specified in Decree  No. 4927/2011, or any amending decree, which 
contains the Colombian Customs Tariff. Colombia maintains that in no case does the tariff rate 
applied to such products exceed the tariff rates bound in Colombia 's Schedule of Concessions, and 
that, therefore, the tariffs envisaged in Decree  No. 1744/2016 are consistent with the first paragraph 
of Article  II:1(b) of the GATT 1994.257 
7.2.2.2   Panama  
7.135.   For its part, Panama does not question that the tariffs applicable to the relevant products, 
contained in Decree  No. 1744/2016, are a measure taken to comply258, nor does it bring claims 
against those tariffs.259 In fact, Panama accepts that the imports covered are subject to an 
ad valorem  tariff at the level bound by Colombia with the WTO.260 
7.2.3   Analysis by the Panel  
7.136.   Before beginning its legal analysis, the Panel considers it appropriate to make 
two clarifications, th e first with respect to its terms of reference and the second with respect to its 
function.  
7.137.   The Panel observes, first, with respect to its terms of reference, that Decree  No. 1744/2016 
is the measure declared by Colombia as taken to comply with the rulings  and recommendations of 
the DSB261 and that Panama does not question that the tariffs provided for in Decree  No. 1744/2016 
are part of the measures taken to comply.262 In this respect, the Panel recalls its findings in 
paragraphs 7.114  and 7.116  above that Decree  No. 1744/2016 is one of the measure s taken to 
comply with the recommendations  and rulings of the DSB. Therefore, the Panel considers that 
Decree  No. 1744/2016 falls within its terms of reference.  
7.138.    Secondly, with respect to its function, the Panel notes that Panama does not refute 
Colombia 's claim that the tariffs provided for in Decree  No. 1744/2016 are consistent with 
Article  II:1(b) of the GATT 1994. However, the lack of a refutation of Colombia 's claim on the part 
of Panama does not exempt the Panel from its obligation under Article  11 of  the DSU to make an 
objective assessment of the matter before it.  
7.139.   In this connection, the Panel observes that, as has consistently been recognized within the 
WTO's dispute settlement system, the burden of proving a challenged measure 's inconsistency with 
                                                
255 Colombia 's first written submission as complainant, para.  19. 
256 Colombia 's first written submission as complainant, para.  30. 
257 Colombia 's first written submission as complainant, paras.  31-32. 
258 See, for example, Panama 's second written submission as complainant, para.  5. 
259 Panama 's response to Panel question No.  51. 
260 Panama 's response to Panel question No.  51. 
261 Colombia 's request for the establishment of a panel, WT/DS461/17, p. 2.  
262 See, for example, Panama 's second written submission as complainant, para.  5. WT/DS461/RW  
 
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  the invoked provisions of the covered agreements lies initially on the complaining party and, once 
the complaining party has established a prima facie  case for such inconsistency, the burden moves 
to the defending party, which must in turn refute the claime d inconsistency.263 It has also been 
consistently recognized that the burden of proof falls on the party who asserts a fact, whether the 
claimant or the respondent.264 
7.140.   These compliance proceedings create a special situation due to the fact that Colombia, as 
the respondent in the original proceedings, initiated its own proceedings under Article  21.5 of the 
DSU, claiming that its measure declared as taken to comply had corrected the inconsistencies found 
in the original proceedings. Therefore the burden of establ ishing a prima facie  case for the claimed 
consistency rests with Colombia.  
7.141.   In line with the above, the Appellate Body has considered that in Article  21.5 proceedings 
the original respondent has an onus to show  that its implementing measure has cured the de fects 
identified in the DSB 's recommendations  and rulings265 and that, to this end, the original respondent 
must give a clear description of its implementing measure and an adequate explanation regarding 
how this measure rectifies the inconsistencies found in the original proceedings, so as to place the 
panel in a position to make an objective assessment of the matter and, in the absence of rebuttal, 
to rule in favour of the original respondent.266 
7.142.   Considering these principles,  and in keeping with the approach  adopted by other panels267, 
even in the absence of any refutation on the part of Panama it is for the Panel to satisfy itself that 
Colombia has discharged the burden of showing that Decree  No. 1744/2016 is consistent with 
Article  II:1(b) of the GATT 1994  and with Article  II:1(a) of the GATT 1994.  
7.143.   Having clarified its terms of reference and its function, the Panel points out that, in the 
absence of claims by Panama against Decree  No. 1744/2016, the only relevant legal provisions with 
respect to that Decree  are those that were the subject of findings of inconsistency on the part of the 
panel in the original proceedings, that is, Article  II:1(a)  and Article II:1(b), first sentence, of the 
GATT 1994.  
7.144.   Therefore it will be the Panel 's task to determine whether, as Colombia claims, the tariffs 
provided for in Decree  No. 1744/2016 are consistent with Article  II:1(b) of the GATT 1994  and with 
Article  II:1(a) of the GATT 1994.  
7.145.   Article  II:1(a) of the GATT 1994 reads as follows:  
Each contracting party shall accord to the commerce of the other contracting parties 
treatment no less favourable than that provided for in the appropriate Part of the 
appropriate Schedule annexed to this Agreement.  
7.146.   As for the first sentence of Article II:1(b) of the GATT, it reads as follows:  
The products described in Part 1 of the Schedule relating to any contracting party, which 
are the products of territories of other contracting parties, shall, on their importation 
into the territory to which the Schedule relates, and subject to the terms, cond itions or 
qualifications set forth in that Schedule, be exempt from ordinary customs duties in 
excess of those set forth and provided therein.  
7.147.   While Article  II:1(a) of the GATT 1994 requires Members to accord to the commerce of other 
Members treatment no l ess favourable than that provided for in their Schedule of Concessions268, 
the first sentence of Article  II:1(b) prohibits Members from subjecting the products of other 
                                                
263 Appellate Body Reports , EC – Hormones , para.  98 and US – Wool Shirts and Blo uses, p. 16.  
264 Appellate Body Report, US – Wool Shirts and Blouses , pp. 14-18. 
265 Appellate Body Reports, US/Canada – Continued Suspension , para.  362. 
266 Idem.  
267 This approach has been used by other panels. See, for example, Panel Reports, US – Shrimp 
(Ecuad or), para.  7.11 and US – Shrimp (Thailand) , para. 7.21.  
268 Appellate Body Report, Argentina – Textiles and Apparel , para.  47. WT/DS461/RW  
 
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  Members, on importation, to ordinary customs duties in excess of those set forth in their  Schedule 
of Concessions.  
7.148.   The first sentence of Article  II:1(b) of the GATT 1994 prohibits a specific type of practice 
which will always be inconsistent with Article  II:1(a) , namely , the imposition of ordinary customs 
duties in excess of those set forth in  the Schedule of Concessions. Therefore, if a measure is 
inconsistent with Article  II:1(b) of the GATT 1994, it will necessarily be inconsistent with 
Article  II:1(a).269 
7.149.   As already explained in paragraphs 7.152 -7.154  above, Decree  No. 1744/2016 establishes 
a tariff of 40% on imports of products cl assified in Chapters 61  and 62 of the National Customs Tariff 
when the declared f.o.b. price is less than or equal to US$10 per gross kilogram.  
7.150.   Decree  No. 1744/2016 also establishes a tariff of 35% on imports with a declared f.o.b. price 
lower than or equa l to US$6 per pair for headings 64.01, 64.02  and 64.04; US$7 per pair for 
heading  64.05; US$10 per pair for heading 64.03;  and US$5 per gross kilogram  for 
subheading  6406.10.00.00 ("uppers").270 
7.151.   In addition, for imports of products classified in Chapters 61, 62  and 64 of the Customs Tariff 
which are not subject to the tariff established in Decree  No. 1744/2016, the tariff applicable will be 
that provided for in Decree  No. 4927/2011. The tariffs ap plicable in that decree  for Chapters 61 to 
64 never exceed 15% ad valorem .271  
7.152.   On the other hand, as the Panel found in the original proceedings, the duties bound by 
Colombia 's Schedule LXXVI, its Schedule of Concessions, are 40% ad valorem  for all subheadin gs of 
Chapters  61, 62  and 63, except for  those in subheading 6305.32, and for subheadings 
6405.20  and 6406.10;  and 35% ad valorem  for headings 64.01, 64.02, 64.03, 64.04  and 64.05, 
except for subheading 6405.20, and for subheading 6305.32.272 
7.153.   The Panel finds  that the tariffs envisaged in Decree  No. 1744/2016 in no case exceed the 
bound ad valorem  tariffs of 35%  and 40% in Colombia 's Schedule of Concessions. Accordingly, the 
tariffs envisaged in Decree  No. 1744/2016 are consistent with Colombia 's obligation, u nder the first 
sentence of Article  II:1(b) of the GATT 1994,  not to subject the products in question to ordinary 
customs duties in excess of those set forth in its Schedule of Concessions.  
7.154.   Furthermore, because the finding of inconsistency with Article  II:1(a) of the GATT 1994 in 
the original proceedings derived from the finding of inconsistency with the first sentence of 
Article  II:1(b) of the GATT 1994,  and in the absence of separate claims with respect to Article  II:1(a) 
of the GATT 1994, the Panel also f inds that the tariffs envisaged in Decree  No. 1744/2016 are 
consistent with Colombia 's obligation, under Article  II:1(a) of the GATT 1994, to accord to the 
commerce of the other Members treatment no less favourable than th at provided for in its 
Schedule  of Concessions.  
7.2.4   Conclusion  
7.155.   For the reasons set out above, the Panel concludes that Colombia has demonstrated that 
the tariffs provided for in Decree  No. 1744/2016 are not inconsistent with Colombia 's obligations 
under Articles  II:1(a)  and II:1(b), first sent ence, of the GATT 1994.  
                                                
269 Appellate Body Report, Argentina – Textiles  and Apparel , para.  45. See also Panel Reports, 
EC – IT Products , para.  7.747; EC – Bananas III (Article 21.5 – Ecuador II) , para.  7.394; EC – Chicken Cuts 
(Brazil) , para.  7.63;  and EC – Chicken Cuts (Thailand) , para.  7.63. 
270 See para.  2.7 above.  
271 See para.  2.7 above.  
272 Panel Report, Colombia – Textiles , para. 7.133.  WT/DS461/RW  
 
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  7.3  Panama 's claims under Article  XI:1 of the GATT 1994  
7.3.1   Introduction  
7.156.   Panama has challenged both the specific bond and the special import regime, claiming that 
they constitute restrictions on importation in contravention of Article  XI:1 of the GATT 1994.273 
Colombia considers that Panama has failed to demonstrate  that either of the two measures is 
inconsistent with Article  XI:1.274 
7.157.   The Panel will begin by examining the relevant legal provision and the applicable legal test. 
It will then analy se Panama 's claims with respect to the specific bond, starting with a summary of 
the arguments of the parties  and continuing with a legal analysis of each of the aspects challenged 
by Panama. Finally, the Panel will examine Panama 's claims with respect to the special import 
regime, again beginning with a summary of the arguments of the parties  and continuing with an 
analysis of each of the aspects challenged by Panama.  
7.3.2   The text of Article  XI:1 of the GATT 1994  
7.158.   The relevant part of Article  XI of the GATT 199 4 reads as follows:  
General Elimination of Quantitative Restrictions  
1. No prohibitions or restrictions other than duties, taxes or other charges, whether 
made effective through quotas, import or export licences or other measures, shall be 
instituted or maintained by any contracting party on the importation of any product of 
the territory of any other contracting party or on the exportation or sale for export of 
any product destined for the territory of any other contracting party.  
7.159.   By its terms, Article  X:1 "lays down a general obligation to eliminate quantitative 
restrictions" and prohibits Members "to institute or maintain prohibitions or restrictions other than 
duties, taxes, or other charges, on the importation, exportation, or sale for export of any p roduct 
destined for another Member".275 
7.3.3   Legal test provided for in Article  XI:1 of the GATT 1994  
7.160.   In the past, panels have examined alleged inconsistencies with Article  XI:1 of the GATT 1994 
by conducting a two -stage analysis. They have first examined whether  the complainant has 
demonstrated  that the measure at issue is a measure of the same kind as those covered by  
Article  XI:1 and, if this has been demonstrated , have subsequently examined whether the 
complainant has demonstrated that the measure at issue con stitutes a prohibition or restriction on 
importation (or exportation).276 Not all previous panels have considered a finding under this first 
stage to be necessary. By way of example, in Argentina – Import Measures , the panel considered 
that what is relevant in examining a measure within the context of Article  XI:1 of the GATT 1994 is 
whether the measure prohibits or restricts commerce and not the means by which that prohibition 
or restriction is made effective.277 In any event, the analysis must be carried out on a case -by-case 
                                                
273 Panama 's request for the establishment of a panel, WT/DS461/22.  
274 Colombia 's first written submission as respondent, section B; seco nd written submission as 
complainant, para.  87; and second written submission as respondent, para.  81. 
275 Appellate Body Report, Argentina – Import Measures , para.  5.216.  
276 Panel Reports, Argentina – Import Measures , para.  6.244; and India – Autos , para.  4.119 (referring 
to GATT Panel Report, Japan – Semi-conductors , para.  104). See also  Panel Report, India – Quantitative 
Restrictions , para.  5.142.  
277 The Panel reasoned as follows:  
The expression "whether made effective through quotas, import or exp ort licences or other  
measures" used in Article XI:1 of the GATT 1994 implies that the provision covers all measures 
that constitute import "prohibitions or restrictions" regardless of the means by which they are  
made effective. The reference to "quotas, i mport or export licences" is only indicative of some  
means by which import prohibitions or restrictions may be made effective. This does not imply 
that the scope of Article XI:1 of the GATT 1994 is limited to prohibitions or restrictions that are 
made effe ctive through quotas or import or export licences. What is relevant when examining a 
measure under Article XI:1 of the GATT 1994 is whether a measure prohibits or restricts trade, 
rather than the means by which such prohibition or restriction is made effec tive. In light of this WT/DS461/RW  
 
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  basis, taking into account the import (or export) formality or requirement at issue and the relevant 
facts of the case.278 
7.161.   Previous panels have considered that, in order to determine whether a measure falls within 
the scope of Article  XI:1 of the GATT 1994, it is necessary to examine the "nature" of the measure.279 
The text of  Article  XI:1 begins by excluding various measures from its scope, namely, "duties, taxes 
or other charges". Article  XI:1 goes on to indicate that its scope extends to "q uotas, import or export 
licences", together with a residual category of "other measures".280 With reference to this latter 
category of other measures, other panels have found that the concept of import restriction includes 
any measure that results in "any fo rm of limitation imposed on, or in relation to  importation".281 
However, although the expression "other measures" suggests that the coverage of Article  XI:1 is 
broad, the scope of application of this provision is not unfettered since it excludes "duties, tax es and 
other charges",  and "Article  XI:2 of the GATT 1994 further restricts the scope of application of 
Article  XI:1 by providing that the provisions of Article  XI:1 shall not extend to the areas listed in 
Article  XI:2".282  
7.162.   Article  XI:1 also stipulates that  the prohibition or restriction should be "made effective 
through" quotas , import or export licences, or other measures . This has led to the interpretation 
that Article  XI:1 covers measures through which a prohibition or restriction is produced or becomes 
operative.283 
7.163.   The term "prohibition" has been defined as a "legal ban on the trade or importation of a 
specified commodity", and the term "restriction" as "[a] thing which restricts someone or something, 
a limitation on action, a limiting condition or regula tion",  and, thus, generally, as something that 
has a limiting effect.284 As to whether a restriction is "on importation", the Panel agrees with previous 
panels that "in the context of Article XI:1 [of the GATT 1994] the expression "restriction… on 
importatio n" [may thus be appropriately read as] meaning a restriction "with regard to" or "in 
connection with" the importation of the product ".285  
7.164.   As indicated by its title, " General Elimination of Quantitative Restrictions ", Article  XI relates 
to "quantitative" re strictions. The use of the word "quantitative" indicates that only prohibitions and 
restrictions that limit the quantity or size of an imported (or  exported) product are included within 
                                                
reasoning, the Panel will commence by examining the claims raised by the complainants under 
Article XI:1 of the GATT 1994 irrespective  of whether this measure constitutes an import licence.  
(Panel Report, Argentina – Import Measures , para. 6.363.)  
 This approach was also used by the panel in Indonesia – Import Licensing Regimes . (Panel 
Report, Indonesia – Import Licensing Regimes , paras.  7.55 and 7.76.)  
278 Appellate Body Report, Argentina – Import Measures , para.  5.245.  
279 Panel Report,  Brazil – Retreaded Tyres , para. 7.372. See also Panel Report, Indonesia – Import 
Licensing Regimes , para.  7.42. 
280 Panel Report, Argentina – Hides and Leather , para.  11.17. See also Panel Report, Argentina – Import 
Measures , para.  6.246 (referring to GATT Panel Report, Japan – Semi-conductors , para.  104, and to Panel 
Report, Argentina – Hides and Leather , para.  11.17.)  
281 Panel Report, Colombia – Ports of Entry , para.  7.227 (referring to Panel Report, India – Autos , 
paras.  7.254 -7.263  and 7.265  and to Panel Report, Brazil – Retreaded Tyres , para.  7.371). (original emphasis)  
282 Appellate Body Report, Argentina – Import Measures , para.  5.219.  
283 The Appellate Body reasoned as follows:  
Article XI:1 of the GATT 1994 prohibits prohibitio ns or restrictions other than duties, taxes,  
or other charges "made effective through quotas, import or export licences or other measures".  
The Appellate Body has described the word "effective", when relating to a legal instrument, as "in  
operation at a gi ven time". We note that the definition of the term "effective" also includes  
something "[t]hat is concerned in the production of an event or condition". Moreover, the  
Appellate Body has described the words "made effective", when used in connection with  
governmental measures, as something that may refer to a measure being "operative", "in force",  
or as having "come into effect". In Article XI:1, the expression "made effective through"  
precedes the terms "quotas, import or export licences or other measures". This suggests to us 
that the scope of Article XI:1 covers measures through which a prohibition or restriction is 
produced or becomes operative.  
(Appellate Body Report, Argentina – Import Measures , para.  5.218 (referring to Appellate Body Reports, 
China  – Raw Materials , para.  356 and US – Gasoline , p. 23) (footnotes omitted)).  
284 Appellate Body Report, Argentina – Import Measures , para.  5.217 (referring to Appellate Body 
Report, China – Raw Materials , para.  319).  
285 Panel Report, India – Autos , para.  7.257. S ee also Panel Reports, Argentina – Import Measures , 
para. 6.458 and Indonesia – Import Licensing Regimes , para.  7.43. WT/DS461/RW  
 
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  the scope of this provision.286 Thus, Article  XI:1 of the GATT 1994 only  covers those prohibitions or 
restrictions that have a limiting effect on importation (or exportation). Previous panels have also 
similarly interpreted the concept of "restrictions"  and have concluded that Article  XI:1 is applicable 
to conditions that are "limiting " or have a "limiting effect".287 As regards how to elucidate the limiting 
effects of a measure, "[the] limitation [on importation or exportation] need not be demonstrated by 
quantifying the effects of the measure at issue"288; rather,  such effects ca n "be demonstrated 
through the design, architecture and revealing structure of the measure at issue considered in its 
relevant context".289 
7.165.   Some panels, in examining whether certain measures have a limiting effect on importation, 
have focused on whether thos e measures limited the competitive opportunities availa ble for the 
imported products. Thus, panels have attributed importance to such factors as the existence of 
uncertainty affecting exp ortation, whether the measures affect investment plans, whether they 
restrict access to import markets or make importation prohibitively costly or unpredictable, whether 
they constitute disincentives for imports, or whether there are unfettered or undefined powers to 
refuse an import licence.290  
                                                
286 The Appellate Body in Argentina – Import Measures considered that:  
The use of the word "quantitative" in the title of Article XI of the GATT 1994 informs the 
interpretation of the words "restriction" and "prohibition" in Article XI:1, suggesting that the 
coverage of Article XI includes those prohibitions and restrictions that limit the quantity or 
amount of a product being imported or expo rted. This provision, however, does not cover simply 
any restriction or prohibition. Rather, Article XI:1 refers to prohibitions or restrictions "on the 
importation … or on the exportation or sale for export". Thus, in our view, not every condition or 
burden placed on importation or exportation will be inconsistent with Article XI, but only those 
that are limiting, that is, those that limit the importation or exportation of products. Moreover, 
this limitation need not be demonstrated by quantifying the effe cts of the measure at issue; 
rather, such limiting effects can be demonstrated through the design, architecture, and revealing 
structure of the measure at issue considered in its relevant context.  
(Appellate Body Report, Argentina – Import Measures , para.  5.217 (referring to Appellate Body Reports, 
China  – Raw Materials , paras.  319-320) (footnotes omitted)).  
287 In India – Quantitative Restrictions the panel observed that the ordinary meaning of the word 
"restriction" is "a limitation on action, a limiting co ndition or regulation" (Panel Report, India – Quantitative 
Restrictions , para.  5.128). In India – Autos , the panel endorsed the interpretation of the term "restriction" used 
by the panel in India – Quantitative Restrictions , and concluded that "any form of  limitation  imposed on, or in 
relation to importation constitutes a restriction on importation within the meaning of Article XI:1" (Panel Report, 
India – Autos , para.  7.265 (original emphasis). This panel also asserted that the expression "limiting conditi on" 
used by the panel in India – Quantitative Restrictions  "is helpful in identifying the scope of the notion in the 
context of the facts before it. That phrase suggests the need to identify not merely a condition placed on 
importation, but a condition tha t is limiting, i.e. that has a limiting effect. In the context of Article XI, that limiting 
effect must be on importation itself." (Panel Report, India – Autos , para.  7.270.) The panels in Brazil – Retreaded 
Tyres , Dominican Republic – Import and Sale of Cigarettes  and Colombia – Ports of Entry  cited with approval key 
passages in the reports India – Quantitative Restrictions  and India – Autos  which clarified this rule. (Panel 
Reports, Brazil – Retreaded Tyres , para.  7.371; Dominican Republic – Import and S ale of Cigarettes , 
paras.  7.252  and 7.258; and Colombia – Ports of Entry , paras.  7.233 -7.235.) See also  Panel Report, Indonesia  – 
Import Licensing Regimes , paras.  7.45 and 7.47 -7.50. 
288 Appellate Body Report, Argentina – Import Measures , para.  5.217 (referr ing to Appellate Body 
Reports, China – Raw Materials , paras.  319-320.)  
289 Appellate Body Report, Argentina – Import Measures , para.  5.217 (referring to Appellate Body 
Reports, China – Raw Materials , paras.  319-320.)  
290 For example, in Argentina – Hides and L eather , the panel stated that "Article XI:1, like Articles I, II 
and III of the GATT 1994, protects competitive opportunities of imported products, not trade flows". (Panel 
Report, Argentina – Hides and Leather , para.  11.20.) In Brazil – Retreaded Tyres , the panel found a violation of 
Article  XI.1 in which the fines did not per se  impose a restriction on importation, but acted as an absolute 
disincentive to importation by penalizing it and making it "prohibitively costly". (Panel Report, Brazil – 
Retreaded Tyres , para.  7.370.) In Colombia – Ports of Entry the panel, referring to previous cases in which 
Article  XI.1 of the GATT 1994 had been discussed, affirmed that that provision was applicable to "measures 
which create uncertainties and affect investment pl ans, restrict market access for imports or make importation 
prohibitively costly, all of which have implications on the competitive situation of an importer". (Panel Report, 
Colombia – Ports of Entry , para.  7.240 (referring to GATT Panel Reports, EEC – Minimum Import Prices  and 
Canada – Provincial Liquor Boards (EEC) ; and to Panel Reports, Argentina – Hides and Leather and Brazil – 
Retreaded Tyres )). In China – Raw Materials , the panel, albeit in relation to export restrictions and in a finding 
which the Ap pellate Body declared of no legal effect due to concerns related to the terms of reference 
(Appellate Body Reports, China – Raw Materials , paras.  234 and 235), examined a licensing system and found 
that "a licence requirement that results in a restriction additional to that inherent in a permissible measure 
would be inconsistent with GATT Article XI:1. Such restriction may arise in cases where licensing agencies have WT/DS461/RW  
 
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  7.166.   Before beginning, the Panel t akes note of Colombia 's suggestion291 that in analysing the 
consistency of the specific bond and the special import regime with Article  XI:1 of the GATT 1994 
the context provided by a series of provisions should be taken into account. In particular, 
Articles  13292 and 17293 of the Customs Valuation Agreement, Article  7.3294 of the Trade Facilitation 
Agreement295, Article  VIII296 of the GATT  and the additional note to Article  VI.1297 of the GATT 1994. 
                                                
unfettered or undefined discretion to reject a licence application ". (Panel Reports, China – Raw Materials , 
para. 7.957.) In  Argentina – Import Measures  the panel found that some of the measures adopted by 
Argentina were creating "uncertainty as to an applicant's ability to import, [did] not allow companies to import 
as much as they desire[d] or  need[ed], but condition[ed] imports to their export performance and impose[d] a 
significant burden on importers that [was] unrelated to their normal importing activity". (Panel Report, 
Argentina – Import Measures , para.  6.479 ; finding upheld in Appellate Body Report, Argentina – Import 
Measures , para.  5.288.) Referring to the panel report in Dominican Republic – Import and Sale of Cigarettes , 
the panel in Argentina – Import Measures  observed that "not every measure affecting the opportunities for 
entering the market would be covered by Article XI [of the GATT 1994], but only those measures that 
constitute a prohibition or restriction on the importation of products, i.e. those measures which affect the 
opportunities for importation itself". Panel Report, Argentina – Import Measures , para.  6.458 (referring to 
Panel Report, Dominican Republic – Import and Sale of Cigarettes , para.  7.261). See also Panel Report, 
Indonesia – Import Licensing Regimes , para.  7.110.  
291 Colombia 's resp onse to Panel question No.  61; comments on Panama 's response to Panel question 
No. 62. 
292 Article  13 reads as follows:  
If, in the course of determining the customs value of imported goods, it becomes necessary to 
delay the final determination of such customs value, the importer of the go ods shall nevertheless 
be able to withdraw them from customs if, where so required, the importer provides sufficient 
guarantee in the form of a surety, a deposit or some other appropriate instrument, covering the 
ultimate payment of customs duties for whic h the goods may be liable. The legislation of each 
Member shall make provisions for such circumstances.  
293 According to Article  17: 
Nothing in this Agreement shall be construed as restricting or calling into question the rights of 
customs administrations to  satisfy themselves as to the truth or accuracy of any statement, 
document or declaration presented for customs valuation purposes.  
294 This Article  provides in relevant part :  
7.3.2 As a condition for such release, a Member may require:  
(a) payment of custo ms duties, taxes, fees, and charges determined prior to or upon arrival of 
goods and a guarantee for any amount not yet determined in the form of a surety, a deposit, or 
another appropriate instrument provided for in its laws and regulations; or  
(b) a guar antee in the form of a surety, a deposit, or another appropriate instrument provided 
for in its laws and regulations.  
7.3.3 Such guarantee shall not be greater than the amount the Member requires to ensure 
payment of customs duties, taxes, fees, and charge s ultimately due for the goods covered by the 
guarantee.  
7.3.4 In cases where an offence requiring imposition of monetary penalties or fines has been 
detected, a guarantee may be required for the penalties and fines that may be imposed.  
7.3.5 The guarantee  as set out in paragraphs 3.2 and 3.4 shall be discharged when it is no 
longer required.  
295 Although Colombia recognizes that the Trade Facilitation Agreement is not in effect for Colombia as it 
has not deposited an instrument of acceptance, Colombia consid ers that its measures can be explained in the 
light of that instrument and that therefore it has to be taken into account. (Colombia 's response to Panel 
question No.  61.) 
296 Article  VIII of the GATT 1994 relating to fees and formalities connected with impor tation and 
exportation states in relevant part:  
1. (a) All fees and charges of whatever character (other than import and export duties and other 
than taxes within the purview of Article  III), imposed by contracting parties on or in connection 
with importation or exportation shall be limited in amount to the approximate cost of services 
rendered and shall not represent an indirect protection to domestic products or a taxation of 
imports or exports for fiscal purposes.  
(b) …  
(c) The contracting partie s also recognize the need for minimizing the incidence and complexity 
of import and  export formalities and for decreasing and simplifying import and export 
documentation requirements.*  
297 The additional note to Article  VI.2 and VI.3 of the GATT 1994, which provides as follows in relevant 
part: 
1. As in many other cases in customs administration, a contracting party may  
require reasonable security (bond or cash deposit) for the payment of anti -dumping or  
countervailing duty pending final determination of the facts in any case of suspected  
dumping or subsidization.  WT/DS461/RW  
 
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  In particular, Colombia maintains that these provisions explicitly authorize the use of customs bonds 
and formalities such as those contested by Panama.  
7.167.   For its part, Panama considers that the inconsistency of a measure with Article  XI:1 of the 
GATT 1994 should be determined in the light of the limiting conditions which that measure imposes 
on imports within the meaning of Article  XI:1 of the GATT 1994, regardless of how the measure is 
characterized.298 However, Panama also considers that in some cases, the provisions of other 
covered agreements such as, for example, Article  7.3.3 of the Trade Facilitation Agreement can be 
used to interpret the scope of the restrictions covered by Article  XI:1 of the GATT 1994. In the 
particular case of Article  7.3.3 of the T rade Facilitation Agreement, Panama argues that this provision 
explains that the coverage of a customs guarantee should not be greater than that required or 
necessary to ensure payment of the customs duties, taxes and other charges due for the goods 
secure d.299 Likewise, Panama considers that Articles  I, II and  III of the GATT 1994 could be context 
for interpreting the terms of Article  XI:1 of the GATT 1994 given that they all have in common the 
purpose of protecting competitive opportunities for imported pro ducts.300 For Colombia, the object 
and purpose of Articles  I, II and III of the GATT 1994 are different and govern measures that are 
different in nature, have different purposes and produce a non -comparable effect.301 
7.168.   Although the parties and third parties302 do not fully agree on the interpretative value that 
should be accorded to other provisions when examining whether a measure has limiting effects on 
importation inconsistent with Article  XI:1 of the GATT 1994, the Panel recalls that "the provisions of 
the WTO  covered agreements should be interpreted in a coherent and consistent manner, giving 
meaning to all applicable provisions harmoniously".303 For example, Article  VIII:1(c) has already 
been considered as context for the interpretation of Article XI:1 of the G ATT 1994, and for what 
amounts to a restriction on importation within the meaning of the latter provision.304  
7.169.   In this respect, the Panel agrees that the findings under Article  XI:1 of the GATT 1994 cannot 
have as a consequence the prohibition of bonds and o ther customs formalities permitted by other 
provisions of the covered agreements. Therefore the Panel will examine the context provided by 
other provisions of the covered agreements in the event that the Panel 's interpretation might have 
such consequences.   
7.3.4   The question of whether the specific bond is inconsistent with Article XI:1 of the 
GATT 1994  
7.3.4.1   Arguments of the parties  
7.3.4.1.1   Panama  
7.170.   Panama305 claims that the specific bond constitutes a "restriction[]" on "importation" in 
violation of Article  XI:1 of the GATT 199 4, since its highly burdensome amount and the fact that it 
                                                
298 Panama 's response to Panel question No.  61. 
299 Panama 's response to Panel question No.  61. 
300 Panama 's response to Panel question No.  62(b) (referring to Panel Reports, Argentina – Hides and 
Leather , para. 11.20,  and Colombia – Ports of Entry , footnote 463).  
301 Colombia 's comments on Panama 's response to Panel question No.  62(b).  
302 United States ' third-party written submission, para.  46; European Union 's third -party response to 
Panel question No.  10, para. 25; and Japan 's third -party response to Panel question No.  10, para.  20.  
303 Appellate Body Report, Argentina – Import Measures , para.  5.236 (referring to Appellate Body 
Reports, EC – Seal Products , para.  5.123; US – Anti-Dumping and Countervailing Dut ies (China) , para.  570; 
and US – Upland Cotton , para.  549 (citing Appellate Body Report, Arg entina – Footwear (EC) , para.  81 and 
footnote 72, referring, in its turn, to Appellate Body Reports, Korea – Dairy Products , para.  81; US – Gasoline , 
p. 28; Japan – Alcoholic Beverages II , p. 15; and India – Patents (US) , para.  45)). 
304 Appellate Body Report, Argentina – Import Measures,  para. 5.233.  
305 The Panel notes that in Panama's first written submission as complainant, its first written submission 
as respondent, and its second written submission as complainant, Panama refers to Decree No.  1745/2016. 
After submitting Decree No.  2218/2017 as Exhibit  PAN-43, Panama begins referring to that Decree. In this 
connection, Panama explained in paragraph 11 of its second written submission as respondent that "[f]or the 
sake of simplicity, Panama refers in a general manner in this rebuttal to the "specific bon d" or the "special 
import regime", on the understanding that these are the same measures as are contained in Decrees No.  1745 
and No.  2218. Any reference it may make to a measure of the specific decree (i.e. the specific bond of Decree 
No. 2218) is normall y made to highlight specific aspects stemming from that decree." This summary of 
arguments uses the form in which Panama set forth its arguments, so that reference is at times made solely to WT/DS461/RW  
 
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  is required for each and every shipment act as a condition limiting importation of the textile and 
footwear products affected.306  
7.171.   Panama argues that Colombia imposes a "condition" on the importation  of textiles and 
footwear with a declared f.o.b. price lower than or equal to the thresholds established in Decree 
No. 1745/2016 by introducing the requirement to post a specific bond for imports of those products. 
This condition must be fulfilled for rele ase and importation of the goods, and it is not an automatic 
process since obtaining the bond is subject to conditions.307 Panama considers that this condition 
limits imports of the relevant products because it has an adverse impact on their "competitive 
opportunities".308 It also maintains that it nullifies competitive and imp ort opportunities for importers  
which are ineligible for a bank or insurance guarantee and which, prior to Decree No.  1745/2016, 
could import by merely paying the tariff, irrespective of their financial rating.309 The limiting nature 
of the condition stems, according to Panama, from its cost and burdensomeness, the uncertainty it 
creates in the import process and the arbitrariness of its coverage.310  
7.172.   For Panama, the specific bond is costly be cause posting it and keeping it in place for three 
years has a financial cost and a negotiation cost. The financial cost varies as it depends on the 
financing entity or insurance company issuing the bond, the importer 's risk profile and the magnitude 
of the insured transaction.311 In Panama 's opinion, by imposing this cost on certain imports Colombia 
is replicating the effect of the compound tariff because it imposes charges which, if converted into 
tariffs, would exceed the bound tariff levels.312 For Panama, the bond makes it prohibitively 
expensive to import the products affected by the measures.313 Panama maintains that, although 
Decree No.  2218/2017 alters the bond 's coverage, the cost of the bond remains excessive and 
discourages imports.314 
7.173.   Panama likewise ar gues that the obligation to post the specific bond also creates uncertainty 
because compliance with this obligation does not depend solely on the will of the importer but on 
the deci sion of a third party: the bank  or insurance company that issues the bond subject to certain 
conditions. 315 For Panama, importers cannot ensure they will always meet these conditions, so that 
obtaining the bond, as well as not being an automatic process, becomes uncertain and, therefore, 
access for the goods may be restricted.316 According to Panama, the uncertainty also stems from 
Colombia 's continual and unexpected regulatory changes modifying both the list of products affected 
by the measure and the import requirements.317 
7.174.   Panama considers that, by virtue of its design, the speci fic bond is arbitrary because its 
coverage does not bear any relation to the obligations it seeks to guarantee. In this connection, 
Panama points out that the specific bond 's coverage amounts to 200% of the threshold, rather than 
of the actual value of the  goods, multiplied by the quantity imported (under Decree No.  1745/2016), 
or to 200% of the difference between the declared value and the threshold price, multiplied by the 
quantity imported (under Decree No.  2218/2017)318, which results in an amount far gre ater than 
                                                
Decree No.  1745/2016, these being arguments presented prior to th e submission of Decree No.  2218/2017. 
However, the foregoing is without prejudice to the fact that arguments expressly referring to Decree 
No. 1745/2016 could also be applicable to Decree No. 2118/2017. Where that is the case, the Panel will 
address those arguments in its analysis concerning Decree No.  2218/2017.  
306 Panama 's request for the establishment of a panel, WT/DS461/22.  
307 Panama 's first written submission as complainant, para.  36; first written submission as respondent, 
para. 53; and second written submission as respondent, paras.  150-151. 
308 Panama 's second written submission as respondent, para.  136. 
309 Ibid. paras.  161-162 and 171 -172.  
310 Ibid. paras.  136 and 147. 
311 Panama 's first written submission as complainant, para.  37; first written submission  as respondent, 
para. 54; second written submission as complainant, para.  72; and second written submission as respondent, 
paras.  173-176. 
312 Panama 's second written submission as respondent, para.  180. 
313 Ibid. para.  184. 
314 Ibid. para.  188. 
315 Panama 's first  written submission as complainant, para.  40; first written submission as respondent, 
para. 55; and second written submission as complainant, paras.  97-99. 
316 Panama 's first written submission as complainant, para.  40; first written submission as respondent , 
para. 55; and second written submission as complainant, para.  100. 
317 Panama 's second written submission as respondent, paras.  199-211. 
318 Ibid. para.  139. WT/DS461/RW  
 
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  the principal obligations that the bond seeks to cover.319 Panama underlines that the bond lacks 
proportionality or substantiation, especially in the case of import ers that already have a general  
bond for all their import operations, since the gene ral bonds are constituted to cover the same 
obligations.320 In such cases, Panama considers that when the obligations to be guaranteed go 
beyond the scope of the general bond, the specific bond should only cover the excess that is not 
already covered by the existing general bond.321  
7.175.   In response to Colombia 's arguments, Panama points out that the specific bond is not 
permissible under WTO law  a priori , that a claim in respect of the bond does not imply a particularly 
heavy burden of proof for the complainant, t hat claims under Article XI:1 do not require the effects 
of the measure to be quantified, and that there is a clear disproportion between the specific bond 
and the obligations it secures.  
7.176.   On whether the specific bond is permissible a priori , Panama doubts that the bond is 
permissible and, even if it were, does not consider that this leads to a higher burden of proof. In any 
event, Panama points out that even if the specific bond did fall within the scope of application of 
Article 7.3.4 of the Trade Facilita tion Agreement, it would not be justified under that provision, since 
it is required in all circumstances, whether or not there is an offence.322 
7.177.   Concerning quantification of the effects of the measure, Panama argues that it has submitted 
evidence on the res trictive effects of the specific bond and the special import regime by explaining 
in detail how Decrees No.  1744/2016 and No.  1745/2016 perpetuate the restrictive effect of the 
compound tariff and by demonstrating that Decree No.  1745/2016 imposes specific  charges 
stemming from the costs of the specific bond and the costs of the documentary and personal 
attendance requirements in the special import regime.323 In any event, Panama considers that this 
requirement is at odds with Appellate Body jurisprudence, in  particular in Argentina – Import 
Measures . For Panama, it is not necessary to quantify the effects, but to demonstrate the limiting 
effects "through the design, architecture, and revealing structure of the measure at issue considered 
in its relevant conte xt".324 Panama argues that the specific bond imposes limitations on the quantity 
of imports because, these being high -demand, low -priced products, the extra cost resulting from 
the bond has an impact on domestic demand and causes a contraction of the volume of low -priced 
imports.325 Panama argues that the design, structure and architecture of the measure demonstrate  
that it imposes a condition limiting imports for the reasons mentioned above.326  
7.178.   On the disproportion between the specific bond and the obligations which the bond seeks to 
secure, Panama asserts that the customs duties, penalties and fines whose payment the bond seeks 
to cover do not need to be guaranteed; and that there can be consistency between the coverage of 
a bond and the actual contingencies to  be covered only if the amou nt of the bond is set on a 
case-by-case basis, and not a priori  on the basis of a predetermined quantity.327 On the first point, 
Panama asserts that the specific bond of Decree No.  1745/2016 could not guarantee the payment 
of cust oms duties on the declared value (tariff and VAT) since these are paid at the time of 
importation, as a prior condition for withdrawal of the goods.328 According to Panama, nor does it 
serve for instances of undervaluation of goods, since Colombian customs r ules already provide for 
guarantees to address such cases; nor to cover penalties and fines, since bonds to cover the latter 
may only be required when an offence has been detected.329 On the second point, Panama argues 
that the bond should not be based solel y on the threshold, but the amount already paid on the basis 
                                                
319 Panama 's first written submission as complainant, paras.  37-38; and first written submission as 
respondent, paras.  54 and 84. See also Panama 's second written submission as respondent, paras.  196-197. 
320 Panama 's first written submission as complainant, para.  39; and second written submission as 
respondent, paras.  139 and 192 -193. 
321 Panama 's second wr itten submission as complainant, paras.  93-94; and second written submission 
as respondent, paras.  192-194. 
322 Panama 's second written submission as complainant, paras.  61-66. 
323 Panama 's second written submission as respondent, paras.  126-127. 
324 Panama 's second written submission as complainant, paras.  69-70; and second written submission 
as respondent, para.  143. 
325 Panama 's second written submission as complainant, para.  70. 
326 Ibid. paras. 69 -70, 107  and 145. 
327 Ibid. para.  80. 
328 Panama 's second written subm ission as respondent, para.  191. 
329 Panama 's second written submission as complainant, paras.  83-84 and 86 -87; and second written 
submission as respondent, para.  191. WT/DS461/RW  
 
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  of the declared value should be deducted.330 Further, it adds that Colombia has failed to explain the 
reason justifying the rate of 200%.331  
7.179.   Panama concludes that Colombia  limits competitive opportu nities for textiles and footwear 
with declared f.o.b. prices equal to or lower than the thresholds of Article  3 of Decree No.  1745/2016 
by imposing a requirement that has a significant cost, is burdensome and creates uncertainty. 
Accordingly, Panama claims  that the obligation to post a specific bond is a "restriction" on 
importation inconsistent with Article  XI:1 of the GATT.332 
7.180.   With respect to the adoption of Decree No.  2218/2017, Panama considers that the limitation 
on market access imposed by the bond has been extended in that it is applicable to a larger number 
of products. Even if the text of Decree No.  2218/2017 provides that the bond is only required in 
cases where there is a dispute concerning value, Panama maintains that, de facto , the specific bond 
is applicable to all imports below the thresholds, which are considered as "artificially low" prices, and 
therefore continues to be a "necessary condition" for importation.333 
7.3.4.1.2   Colombia  
7.181.   Colombia334 considers that Panama has failed to demonstrate that the specifi c bond is 
inconsistent with Article  XI:1.335 Colombia contends that customs bonds are permissible instruments 
under the WTO Agreements, such as for example Article  13 of the Customs Valuation Agreement or 
Article  7.3 of the Trade Facilitation Agreement.336 Colombia also points out that the Ad note (to 
paragraphs 2 and 3) of Article  VI of the GATT 1994 provides for the use of customs bonds in 
connection with anti -dumping or countervailing duty proceedings.337 According to Colombia, the fact 
that customs bonds are permissible measures under WTO law means that they cannot in themselves 
constitute prohibited restrictions under Article  XI:1 and that, should Panama wish to demonstrate 
otherwise, the burden on Panama should be a "particularly heavy burden to discharge".338  
7.182.   Colombia adds that Panama has failed to substantiate the limiting effect of the measures at 
issue on imports.339 For Colombia, Panama has not offered any evidence of the "actual trade impact" 
of the specific bond, or that the specific bond limits the quant ity or amount of the imported 
product340, has not identified any quantitative limitation on imports of the products subject to the 
specific bond requirement, and has not provided evidence that the costs or uncertainty allegedly 
associated with the import pro cess result in a limitation on the quantities or amounts of the products 
that may be imported.341 Colombia points out that the costs to which Panama refers are applied and 
collected by private actors and, therefore, cannot be attributed to the Colombian Government. As 
the alleged restrictive effects of the bond stem from private actors, Colombia maint ains that they 
                                                
330 Panama 's second written submission as complainant, para.  85. 
331 Ibid. paras. 81  and 88. 
332 Panama 's first written submission as complainant, para.  41; and first written submission as 
respondent, para.  56. 
333 Panama 's second written submission as respondent, paras.  153-155. 
334 The Panel notes that in Colombia's first written submission as responde nt and its second written 
submission as complainant, Colombia refers to Decree No.  1745/2016. After Panama submitted Decree 
No. 2218/2017 as Exhibit PAN -43, Colombia began referring to that Decree as well. This summary of 
arguments uses the form in which C olombia set forth its arguments, so that reference is at times made solely 
to Decree No.  1745/2016, these being arguments presented prior to the submission of Decree No.  2218/2017. 
However, the foregoing is without prejudice to the fact that arguments expr essly referring to Decree 
No. 1745/2016 could also be applicable to Decree No. 2118/2017. Where that is the case, the Panel will 
address those arguments in its analysis concerning Decree No.  2218/2017.  
335 Colombia 's first written submission as respondent, s ection  B.  
336 Colombia 's first written submission as respondent, paras.  53-56; second written submission as 
complainant, paras.  48-51; and second written submission as respondent, paras.  41-42. 
337 Colombia 's first written submission as respondent, paras.  57-58; and second written submission as 
complainant, paras.  52-53. 
338 Colombia 's first written submission as respondent, paras.  59-60; and second written submission as 
complainant, para.  55. 
339 Colombia 's second written submission as respondent, para.  35. 
340 Colombia 's first written submission as respondent, paras.  61-62; second written submission as 
complainant, para.  57; and second written submission as respondent, para.  44. 
341 Colombia 's first written submission as respondent, para.  64; second written submissio n as 
respondent, paras.  53, 56, 57 and 74; and second written submission as complainant, paras.  59 and 65.  WT/DS461/RW  
 
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  cannot form the basis for a claim that the bond constitutes a "restriction" within the meaning of 
Article  XI:1.342 
7.183.   Colombia submits that Panama 's arguments have not been corroborated, since Panama has 
failed to substantiate the limiting effect  of the measures at issue on imports.343 For Colombia, 
Panama has not offered any evidence of the "actual trade impact" of the specific bond, or that the 
specific bond limits the quantity or amount of the imported product, has not identified any 
quantitative  limitation on imports of the products subject to the customs bond requirement, and has 
not provided evidence that the costs or uncertainty supposedly associated with the import process 
result in a limitation on the quantities or amounts of the products th at may be imported.344 
7.184.   Further, Colombia argues that there is a relationship between the amount of the specific 
bond and the obligations it seeks to guarantee.345 It adds that the imports subject to the specific 
bond are those suspected of having artificially low declared values, and that it is thus appropriate to 
use the threshold for the purposes of calculating the amount of the specific bond so as to ensure 
that importers do not avoid paying the applicable duties, fines or penalties.346 
7.185.   With respect to the app lication of the specific bond to importers that already have a general 
bond, Colombia explains that the latter bond may be insufficient in the case of a high level of imports 
at artificially low prices.347 
7.186.   With regard to the uncertainty that Panama claims is  created by the specific bond, Colombia 
responds that the involvement of persons other than the importer is customary in commercial 
transactions and cannot be considered a restriction within the meaning of Article  XI:1.348 Colombia 
adds that Panama has faile d to demonstrate that the requirements that the importer allegedly has 
to meet to obtain a customs bond are indeed requirements to obtain a customs bond .349 
7.3.4.2   Analysis by the Panel  
7.187.   As indicated in paragraph  7.157  above, the Panel 's task will be to determine whether, as 
Panama claims, the specific bond provided for in Article 7 of Decree No.  2218/2017 is inconsistent 
with Article  XI:1 of the GATT  1994 because it constitut es a measure that has a limiting effect on the 
importation of certain products comprising fibres, yarns, fabrics, clothing and footwear350 and limits 
the competitive opportunities of the importers and imported products.  
7.188.   The Panel notes that Panama has not d efined the category  of measures covered by 
Article  XI:1 in which the specific bond would fall. In this regard, Colombia, without prejudice to its 
objection to the possible inconsistency of the specific bond351, does not appear to have called into 
question th e fact that the bond may fall within the scope of Article  XI:1.  
7.189.   The Panel recalls that the prohibition of quantitative restrictions provided for in Article  XI:1 
refers explicitly to prohibitions or restrictions on the importation or exportation of a produ ct "whether 
                                                
342 Colombia 's second written submission as respondent, paras.  46-49. 
343 Ibid. para.  35. 
344 Colombia 's second written submission as respondent, paras.  53, 56-57 and 74; and second written 
submission as complainant, para.  65. 
345 Colombia 's first written submission as respondent, paras.  68-69; and second written submission as 
complainant, paras.  58-60. 
346 Colombia 's first written submission as respondent, para . 73. 
347 Colombia 's first written submission as respondent, para.  74; and second written submission as 
complainant, para.  64. 
348 Colombia 's first written submission as respondent, para.  76; second written submission as 
complainant, paras.  62-63; and second written submission as respondent, para.  52. 
349 Colombia 's first written submission as respondent, para.  77. 
350 As specified in the descriptive part, Article  2 of Decree No.  2218/2017 stipulates that the products 
covered are imports consisting of fibres, yarn s, fabrics, clothing and footwear under Chapters  52, 53, 54, 55, 
56, 58, 59, 60, 61, 62, 63  and 64 of the Customs Tariff for which the declared f.o.b. price is lower than or 
equal to the threshold established in Article  3 of that Decree.  
351 However, accordi ng to Colombia, because customs bonds are permissible measures under WTO law, 
they cannot in themselves constitute prohibited restrictions under Article  XI:1 and, should Panama wish to 
demonstrate otherwise, the burden on Panama should be a "particularly h eavy burden to discharge" 
(Colombia 's first written submission as respondent, paras.  59-60; and second written submission as 
complainant, para.  55). WT/DS461/RW  
 
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  made effective through quotas, import … licences or other measures". Given the broad scope of the 
term "other measures" and in the absence of any discussion on this point between the parties, the 
Panel considers it appropriate to examine whethe r Panama has demonstrated that the specific bond 
is trade -restrictive.352 
7.190.   The Panel recalls that Panama claims that the requirement to post a specific bond in order 
to obtain release of the imports covered by Decree No.  2218/2017 constitutes a condition that  limits 
imports of the products concerned. In Panama 's opinion, this limitation arises because requiring such 
a bond has an adverse impact on "competitive opportunities"353 for imports and nullifies 
opportunities to compete and import for importers that are ineligible for obtaining the bond.354 
Panama maintains that the limiting nature of this condition stems from its cost and burdensomeness, 
the uncertainty it creates in the import process, and the arbitrariness of its coverage.355 
7.191.   Undoubtedly, the requirement t o post a specific bond to authorize release of the goods in 
specified situations356 constitutes an import condition. However, the mere imposition of a condition 
on the import process does not imply a violation of Article  XI:1 of the GATT  1994. Indeed, "not e very 
condition or burden placed on importation … will be inconsistent with Article  XI:1, but only those 
that are limiting, that is, those that limit the importation … of products".357 While the conditions 
attached to the import of products often entail burde ns on importation, it is no less certain that they 
constitute a "routine aspect of international trade".358  
7.192.   Accordingly, the Panel 's analysis must not be confined to merely ascertaining the existence 
of an import condition, but must  focus primarily on determining whether the said condition has the 
limiting effects on the importation of products that Panama claims. Specifically, that the limiting 
nature of the condition stems from its cost and burdensomeness, the uncertainty which it creates in 
the import process, and the arbitrariness of its coverage.359 To this end, the Panel will examine the 
measure in question in terms of its design, architecture and revealing structure in its relevant 
context.360 
7.193.   As described in section  2.3.3.2  above, the specific bond consists in the requirement imposed 
on the importer of clothing and footwear classified under Chapters 52, 53, 54, 55, 56, 58, 59, 60, 
61, 62, 6 3 and 64 of the Colombian Customs Tariff, when a valuation dispute arises, to post a specific 
bank or insurance company guarantee in order to obtain release of the imported goods when the 
declared f.o.b. price is lower than or equal to a certain threshold.  The specific bond is set forth in 
Article  7 of Decree No.  2218/2017. From the wording of that text, the Panel may identify the 
following features in the design, architecture and structure of the specific bond:  
a. constitution  of the specific bond is necessar y for obtaining the release of goods under the 
headings listed in Article 3 of Decree No.  2218/2017 only in cases where a dispute arises 
with respect to value in connection with the inspection or examination  procedure that leads 
                                                
352 The Panel agrees with the panel in Argentina – Import Measures  that what is relevant when 
examining a mea sure under Article  XI:1 of the GATT  1994 is whether the measure prohibits or restricts trade, 
rather than the means by which such prohibition or restriction is made effective (Panel Report, Argentina – 
Import Measures , para. 6.363). This approach was also used by the panel in Indonesia – Import Licensing 
Regimes  (Panel Report, Indonesia – Import Licensing Regimes , paras.  7.55 and 7.76).  
353 Panama 's second written submission as respondent, para.  136. 
354 Ibid. paras.  161-162 and 171 -172.  
355 Ibid. paras.  136 and 147. 
356 In the case of valuation disputes in connection with the inspection or examination  process for impor ts 
of fibres, yarns, textiles, clothing and footwear under Chapters  52, 53, 54, 55, 56, 58, 59, 60, 61, 62, 63 and 
64 of the Colombian Customs Tariff for which the  declared f.o.b. price is lower than or equal to the threshold 
established in Article  3 of Decree No.  2218/2017 (Decree No.  2218/2017 (Exhibit  PAN-43), Article  2). It should 
be pointed out that the partie s disagree on whether the bond is required whenever the declared f.o.b. prices 
are lower than or equal to the established thresholds (Panama 's position) or only when the prices are lower 
than or equal to the established thresholds and, in addition, a valua tion dispute arises (Colombia 's position).  
357 Appellate Body Report, Argentina – Import Measures , para.  5.217. See also P anel Report, 
Argentina  – Import Measures , paras.  6.252 -6.254 (referring to  Panel Reports, India – Autos , para. 7.270 and 
China – Raw Mat erials , para. 7.917).  
358 Appellate Body Report, Argentina – Import Measures , para. 5.243.  
359 Panama 's second written submission as respondent, paras.  136 and 147. 
360 Appellate Body Report, Argentina – Import Measures , para. 5.217 (referring to  Appellate Body 
Reports, China – Raw Materials , paras.  319-320).  WT/DS461/RW  
 
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  to delaying the final deter mination of customs value with explicit reference to Article  13 of 
the Customs Valuation Agreement;  
b. the type of specific bond is confined to two categories: bank  or insurance company 
guarantee361;   
c. the amount  of the specific bond comes to 200% of the differ ence between the f.o.b. price 
declared by the importer and the result of multiplying the unit price of the threshold 
established in Article 3 of Decree No. 2218/2017 by the quantity imported;  
d. the duration  of the specific bond is three years;  
e. the purpose  of the specific bond is to guarantee payment of the customs taxes, penalties 
and interest that may apply; and  
f. the relationship  of the specific bond with a general bond is one of primacy, since having a 
general bond (or not being under the obligation to pos t one) does not exempt the importer 
from the obligation to post a specific bond in the cases indicated in (a) above.  
7.194.   Having identified the main features of the specific bond regime, the Panel will analyse 
Panama 's claims in this regard.  
7.3.4.2.1   The question of wh ether the specific bond is burdensome  
7.195.   Panama claims that the specific bond is costly and burdensome  because posting it and 
maintaining it for three years entails a financial cost and a negotiation cost which is excessive and 
discourages imports below the thresholds.362 In its arguments, Panama not only refers to the 
financial cost of posting the bond as e xcessive, and variable depending on the conditions laid down 
by the bank or insurance company issuing it, but also submits that its duration is excessive.  
7.196.   Colombia points out that Panama has not provided any evidence on the costs associated 
with the speci fic bond, and that its assertions are speculative. Colombia adds that if the costs are 
variable depending on factors such as the risk profile, then the costs are rationally related to such 
factors and thus cannot be excessive.363 Colombia also argues that th e costs to which Panama refers 
are applied and collected by private actors and therefore cannot be attributed to the Colombian 
Government. In its opinion, as the alleged restrictive effects of the bond stem from private actors, 
they cannot form the basis f or a claim that the customs bond constitutes a "restriction" within the 
meaning of Article XI:1.364  
7.197.   Before proceeding, the Panel believes it expedient to address this argument by Colombia 
that the costs arising from posting such a bond with private actors c annot be attributed to the 
Colombian Government, and would thus lie outside the scope of Article XI:1. The Panel understands 
that this argument goes to the fact that only measures attributable to WTO Members, and not to 
private actors, may be examined by t he Panel. Clearly, while the concept of "measure" subject to 
WTO dispute settlement under Article  3.3 of the DSU is broad, any measure challenged must meet 
the requirement of attribution to a Member in order to be subject to WTO dispute settlement.365  
7.198.   Howev er, this does not exclude from scrutiny under the DSU those decisions of private actors 
that are not independent of a measure of a Member.366 Indeed, "the intervention of some element 
                                                
361 Decree No.  2218/2017 explicitly rules out the possibility of the specific bond taking the form of a 
monetary deposit.  
362 Panama 's second written submission as respondent, para.  188. 
363 Colombia 's first written submission as respondent, paras.  64-67. 
364 Colombia 's second written submission as respondent, paras.  46-49. 
365 Appellate Body Report, Argentina – Import Measures , paras.  5.100  et seq.  
366 Panel Report, Indonesia – Import Licensing Regimes , para.  7.6 and footnote  350. In that report, the 
panel also explained that in Korea – Various Measures on Beef , the measure at issue required retailers to make 
a choice as to what to sell. The panel found that "a government regulation contravenes a Member 's 
obligatio ns … if … it forces  economic operators to make certain choices" (Panel Report, Korea – Various 
Measures on Beef , para. 635) (boldface original). This decision was upheld by the Appellat e Body 
(Appellate  Body Report, Korea – Various Measures on Beef , para. 146). In Japan – Film, the panel found that WT/DS461/RW  
 
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  of private choice does not relieve [a Member] of responsibility under the GATT 1994".367 The Panel 
hence considers that the fact that the costs of the specific bond, a measure imposed by Decree 
No. 2218/2017, stem from importers negotiating with private entities would not exclude them from 
the scope of the examination.  
7.199.   The Panel t hus proceeds with its analysis of the alleged burdensomeness of the financial 
costs linked to the posting of the specific bond. The Panel recalls that, in order to elucidate the 
limiting effects of a measure, "[the] limitation [on importation or exportatio n] need not be 
demonstrated by quantifying the effects of the measure at issue"368; rather, such limiting effects 
can be demonstrated through the design, architecture, and revealing structure of the measure at 
issue considered in its relevant context.369  
7.200.   Analysis of the wording of Article  7 of Decree No.  2218/2017 does not allow the Panel to 
conclude that the financial cost of posting the specific bond is excessively burdensome. The provision 
in question regulates only the formula to be used to determine t he amount to be guaranteed, and 
not the costs, which will depend on each financial entity or insurance company. As Colombia points 
out, customs bonds are permissible measures under WTO law370 and are instruments which 
Colombia uses in other situations in whi ch a valuation dispute may arise concerning any imported 
product.371 Consequently, Panama must demonstrate that this bond in particular is excessively 
burdensome such as to constitute a restriction on importation within the meaning of Article XI:1 of 
the GAT T 1994.  
7.201.   With regard to the financial cost of posting the bond, the parties have presented different 
examples in which the relative weight of the bond in relation to the total cost of the import 
transaction varies significantly. In some, the bond represents  a considerable relative weight in 
relation to the operation guaranteed; in others, a relatively low sum that might even not cover the 
obligations it seeks to guarantee.  
7.202.   Panama submits examples that show the cost of the specific bond provided for in Decre e 
No. 1745/2016 as having a substantial weight in relation to the rest of the costs incurred in respect 
of the import transaction372 and emphasizes that, despite the changes in the calculation of the bond 
introduced by Decree No.  2218/2017, the weight of the  bond remains unchanged.373 According to 
Panama, the costs incurred for posting the bond include: (a) payment of a premium or financial 
commission that varies from institution to institution; (b) payment of a stamp tax amounting to 
0.5% on the value containe d in the document; (c) value added tax (VAT); and (d) ancillary costs for 
processing of the request.374 Panama uses the hypothetical example of a monthly commission of 
0.75% on the total amount guaranteed plus VAT at 19%. If this 0.75% commission is multipli ed by 
the duration of the guarantee (3 years, or 36 months), adding in the 19% VAT and the 0.5% stamp 
tax on the 36 months of commission, Panama contends that the effective tariff of the bank guarantee 
would come to 32.27% of the amount guaranteed for a pe riod of three years.  
                                                
"administrative guidance that creates incentives or disincentives largely dependent upon governmental action 
for private parties to act in a particular manner" may constitute a governmental measure (Panel Report , 
Japan  – Film, para. 10.45 (citing GATT Panel Report, Japan – Semi-conductors , para. 109)).  
367 Appellate Body Report, Korea – Various Measures on Beef , para. 146. 
368 Appellate Body Report, Argentina – Import Measures , para. 5.217 (referring to Appellate Body 
Reports, China – Raw Materials , paras.  319-320.)  
369 Idem.  
370 Colombia 's first written submission as respondent, paras.  59-60; and second written submission as 
complainant, para.  55. 
371 Colombia 's response to Panel que stion No.  23, paras.  92-94. 
372 Exhibits PAN -18, PAN -19 and PAN -20 and Panama 's second written submission as respondent, 
paras.  175-183. 
373 Panama 's second written submission as respondent, para.  187. 
374 Ibid. para. 175.  WT/DS461/RW  
 
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  Table 2: Example from Panama  
Hypothetical example submitted by Panama  
Monthly commission for the 36 -month 
period of validity of the bond  27 (0.75% monthly commission * 
36 months) = 27)  
VAT 5.13 (19% VAT on 27, i.e. the total 
commission)  
Stamp tax  0.135 (0.5% stamp tax on 27, i.e. 
the total commission)  
Total : 32.27% (32.265)  
Source:  Panama's second written submission as respondent, para.  176. 
7.203.   This percentage would be applied on the coverage required by Article  7 of Decree 
No. 2218/2017, i.e. 200% of the difference between the f.o.b. price declared by the importer and 
the result of multiplying the threshold unit price established in Article  3 of that Decree by the quantity 
imported.375 
7.204.   Colombia, for its par t, maintains that the costs of the bond are significantly lower than those 
put forward by Panama and that the figures and calculations advanced by Panama are erroneous.376 
Colombia produces data on a real case of importation where the declared f.o.b. price l ay below the 
thresholds in Article  3 of Decree No.  2218/2017, in which the weight of the premium in relation to 
the f.o.b. value is 1%377: 
Table 3: Example from Colombia  
Example submitted by Colombia  
F.o.b. value  (US$)  14,830.40  
Guaranteed value (US$)  10,659.20  
Premium (US$)  203.92  
Premium as a percentage of the 
f.o.b. value : 1.4%  
Source:  Colombia's oral statement at the Panel meeting as respondent, para.  26. 
7.205.   The examples provided by the parties confirm that the analysis of the degree of 
burdensomeness of the bond in relation to the import transaction for which it is to be posted cannot 
be carried out in abstracto but has to be made on a case -by-case basis  
7.206.   Beyond these conflicting examples, the Panel does not find in the record any explanation by 
Panama addressing how these additional costs translate into a limitation on imports. The Panel 
consequently has no evidence in the record to characterize the specific bond provided for in Article  7 
of Decree No.  2281/2017 as "costly" or "burdensome" on account of excessive financial costs that 
go beyond routine costs inherent in the import process to the point of constituting a limiting condition 
on imports. The Panel r ecalls that the imposition of import conditions that may involve a charge is 
a routine aspect of international trade and does not necessarily imply any violation of Article  XI:1 of 
the GATT  1994.378  
7.207.   Nor does the Panel have any arguments or factual elements allowing it to determine whether 
the formula established by Colombia to set the bond (200% of the difference between the declared 
f.o.b. value and the threshold price, multiplied by the quantity imported) results in a limitation on 
imports. While the juris prudence has certainly established that it is not necessary to quantify the 
                                                
375 Panama points out that when the decla red value is equal to the threshold, the coverage of the bond 
is zero . (Panama 's second written submission as respondent, para.  187.)  
376 Colombia 's statement at the meeting of the Panel as respondent, paras.  25-26. 
377 Actual cases of imports effected under the bond of the special regime (Exhibit COL -32). Colombia 
provides information on more actual cases governed by Decree No. 1745/2016 . 
378 Appellate Body Report, Argentina – Import Measures , para.  5.217. See also  Panel Report, 
Argentina  – Import Measures , paras. 6.252 -6.254 (referring to  Panel Reports, India – Autos , para. 7.270 and 
China – Raw Materials , para.  7.917).  WT/DS461/RW  
 
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  limiting effects to find a violation of Article XI:1, it has also been established that such quantification 
may constitute a relevant factual element in a panel 's analysis under Ar ticle XI:1. In the present 
case, the Panel considers that the example submitted by Panama does not provide sufficient 
supporting evidence to conclude that the burdensomeness or cost of the specific bond in itself results 
in a limiting effect on imports.  
7.208.   Furthermore, as Colombia has explained379, if there is a dispute concerning the value of the 
goods with a suspicion  of underinvoicing, it is natural and logical that the amount of the bond be 
calculated on the basis of a reference value. In point of fact, the taxes and other charges would not 
be calculated on the basis of the declared value, but on the basis of corrected values, so there is 
de facto a prospect that the specific bond might not be sufficient to cover all the costs of release.  
7.209.   Therefore, in the Pa nel's opinion, Panama has failed to demonstrate that the costs arising 
from posting of the specific bond discourage imports of the products in question below the 
thresholds.  
7.210.   With regard to the three -year duration  of the specific bond, Panama considers it t o be 
excessive in comparison with other bonds provided for in Colombia 's customs legislation. Colombia 
responds that the bond does not necessarily remain in place for three years, but is lifted when, 
following the valuation review by the Colombian authorit ies, the declared value is accepted.380 
According to Colombia, the duration is set on the basis of the time -frame within which the import 
declaration becomes firm, which is three years from the date of acceptance of the declaration. The 
Colombian customs aut hority thus has three years to issue a Special Customs Demand.381  
7.211.   The Panel notes that Panama questions the duration of the bond but fails to explain how the 
said duration impacts on the alleged restrictive nature of the bond within the meaning of Article X I:1 
of the GATT 1994. Nor does Panama adduce  arguments or evidence to substantiate the alleged  
limiting effects of the bond on importation on account of its duration. Conversely, Colombia 's 
explanation to the effect that the duration is set on the basis of  the time -frame within which the 
import declaration becomes firm appears reasonable. The Panel further notes that, although the 
duration of the bond is three years, it only has to be posted once, paying the premium and relevant 
expenses, but not the total amount guaranteed. It does not involve, for example, the retention of a 
sum of money to be refunded after three years, as would be the case for a cash deposit for the total 
value of the bond. Therefore, in the opinion of this Panel, Panama has failed to de monstrate that 
the requirement to post the specific bond for a duration of three years is excessive such as to result 
in a restriction on imports.  
7.212.   Consequently, the Panel rejects Panama 's claim that the specific bond provided for in 
Article  7 of Decree No . 2218/2017 is "costly" or "burdensome" to the point of constituting a limiting 
condition on imports.  
7.3.4.2.2   The question of whether the specific bond creates uncertainty  
7.213.   Panama contends that the specific bond creates uncertainty because it is to be posted when  
a valuation dispute is triggered in connection with the inspection or examination  procedure and it is 
granted subject to the conditions laid down by a bank or insurance company.382 Panama also points 
to additional uncertainty stemming from constant regulato ry changes.383 
7.214.   The Panel takes note of the difference of opinion between the parties as to when the posting 
of the specific bond becomes obligatory. On the basis of the wording of Article 7  of Decree 
No. 2218/2017, the bond would only have to be posted in th e event of a valuation dispute.  
                                                
379 Colombia 's response to Panel question No.  18. 
380 Colombia 's response to Panel question No.  18, para.  83 (referring to Article  254 of Decree 
No. 2685/1999 (Exhibit  PAN-3) and Article  173 of Resolution No.  4240/2000 (Exhibit  PAN-40)). 
381 Colombia's response to Panel question No.  20, para.  89. 
382 Panama 's first written submission as complainant, para.  40; first written submission as respondent, 
para. 55; and second written submission as complainant, paras.  97-99. 
383 Panama 's second written submission as respondent, paras.  199-211. WT/DS461/RW  
 
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  7.215.   Panama contends, however, that in practice the specific bond is requested a priori  for all 
transactions covered by Decree No.  2218/2017.384 This would mean that the Colombian customs 
authorities would necessarily determine th e existence of a valuation dispute whenever clothing and 
footwear classified under Chapters 52, 53, 54, 55, 56, 58, 59, 60, 61, 62, 63  and 64 of Colombia 's 
Customs Tariff are imported below the relevant threshold. Panama finds support for this 
interpretati on of how the specific bond functions in practice under Decree No.  2218/2017 in the fact 
that Colombia 's own legislation stipulates that, in the case of ostensibly low prices, the declarant is 
requested to post a bond or to opt to adjust the import declaration to the actual negotiated price.385  
7.216.   Panama further refers the Panel to an inspection report which, in its opinion, shows that the 
bond is requested by virtue of the f.o.b. values of the imports lying below the thresholds in Article  3 
of Decree No . 2218/2017, regardless of the existence of a valuation dispute.386  
7.217.   Colombia denies that the situation is as described by Panama.387 In this respect, Colombia 
reported the following:  
According to the information supplied by the Subdirectorate for External Tra de of the 
Customs Management Department, 138 import declarations were submitted at or below 
the thresholds established in Decree No.  2218/2017. Of these, 105 declarations, or 
76%, obtained release, among which a valuation dispute arose for 12 imports, givi ng 
rise to the posting of 12 specific bonds. For the remaining 33 import declarations, or 
24%, release was not authorized.  
Above the threshold, 60,866 import declarations were submitted according to 
information from the Economic Studies Unit.388 
7.218.   It does not appear to the Panel that the wording of the Colombian legislation to which 
Panama refers or the aforementioned inspection report offer convincingly substantiate Panama 's 
assertion that the specific bond is necessarily required whenever clothing and footwea r classified 
under Chapters  52, 53, 54, 55, 56, 58, 59, 60, 61, 62, 63  and 64 of Colombia 's Customs Tariff are 
imported into Colombia below the relevant threshold. In point of fact, the data submitted by 
Colombia appear to contradict Panama 's assertion.  
7.219.   Therefore, the Panel considers that Panama has failed to demonstrate that the posting of a 
specific bond under Article  7 of Decree No.  2218/2017 is required for all importation of the relevant 
products under the respective threshold. In any event, the Panel  does not consider this aspect to be 
dispositive as to whether the specific bond, by allegedly causing uncertainty, constitutes a limiting 
condition on imports.  
7.220.   Another of the arguments put forward by Panama in respect of the alleged uncertainty 
created b y the posting of the specific bond is the fact that the bond is granted subject to conditions 
set by a bank or insurance company.389  
7.221.   As in relation to the burdensomeness of the guarantee, Colombia responds that if Panama 
is arguing that the alleged restrict ive effects of the bond stem from private actors, these cannot 
form the basis for a claim that the bond constitutes a "restriction" within the meaning of 
Article  XI:1.390  
7.222.   In line with the Panel 's conclusions in paragraphs  7.197 -7.198  above, the intervention of 
some element of private choice does not relieve Colombia of responsi bility under the GATT 1994.391 
                                                
384 Panama 's response to Panel question No.  52. See also Panama 's comments on Colombia 's response 
to Panel question No.  1. 
385 Panama 's comments on Colombia 's response to Panel question No.  1, para.  6 (referring to Decree 
No. 2685/1999  (Exhibit PAN -3), Article 128, point 5.1.3.).  
386 Panama 's comments on Colombia 's response to Panel question No.  8, para.  1 and response to Panel 
question No.  52 (referring to the Colombiana Kimberly Colpapel insurance policy (Exhibit  COL-17)). 
387 Colombia 's response to Panel questions Nos.  12, 15 and  21.  
388 Figures for imports of goods under Decree No.  2218/2017 ( Exhibit  COL-61). 
389 Panama 's first writ ten submission as complainant, para.  40; first written submission as respondent, 
para. 55; and second written submission as complainant, paras.  97-99. 
390 Colombia 's second written submission as respondent, para.  51. 
391 Appellate Body Report, Korea – Various Measures on Beef , para. 146. WT/DS461/RW  
 
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  Hence, the fact that importers negotiate the bond with private entities would not exclude it from the 
scope of the review.  
7.223.   Coming back to examination of the alleged uncertainty caused by having to post the bond 
through private  actors, the Panel observes that it is quite common for customs bonds to be issued 
by a bank or insurance company, and it is they that will set the conditions that the importer must 
fulfil to obtain the bond. As will be seen in greater detail in section  7.3.4.2.3  below, and as some 
third parties have pointed out, other provisions of WTO agreements provide for the possibility of 
requesting importers to post customs b onds.392 This is the case in Article  13 of the Customs Valuation 
Agreement and Article  7 of the Trade Facilitation Agreement, where provision is made for posting 
guarantees in the form of sureties, deposits or other appropriate instruments provided for in th e 
laws and regulations of the importing Member. In the Panel 's opinion, a banking or insurance 
company bond is among the appropriate instruments provided for in Colombian legislation and in 
that of many other WTO Members. Thus, the Panel does not believe t hat the mere fact that the bond 
must be of one of the two types serves to create uncertainty.  
7.224.   The Panel understands that the fact that certain parties may not be able to fulfil certain 
conditions  attached to the import process  does not turn them per se into conditions having limiting 
effects on importation, in contravention of Article  XI:1. As stated earlier, the imposition of import 
conditions that may involve a charge is a routine aspect of international trade and does not 
necessarily imply any violation of Article  XI:1 of the GATT  1994.393  
7.225.   In this case, the Panel does not consider that Panama has sufficiently explained how the 
posting of a bond through a bank or insurance company creates uncertainty for importers of the 
products covered by Decree No.  2218/ 2017. Therefore, in the Panel 's opinion, Panama has failed to 
demonstrate that the posting of the specific bond through a bank or insurance company constitutes 
a limitation on imports.  
7.226.   Another of the arguments put forward by Panama is the alleged addition al uncertainty 
stemming from constant regulatory changes affecting the specific bond. Panama refers first to 
Decree No.  074 of 23 January 2013, which introduced the compound tariff on the importation of 
textiles, footwear and clothing, which was subsequent ly replaced by Decree No.  456 of 28  February 
2014, declared inconsistent with WTO rules in the original proceedings. Panama then refers to 
Decrees No.  1744/2016 and No.  1745/2016 and to the latter 's replacement by Decree 
No. 2218/2017.394 The Panel notes, firstly, that the changes involved in these actions are changes 
relating to the measures at issue, i.e. Decrees No.  1744/2016, No.  1745/2016 and No.  2218/2017. 
In this respect, while Decrees No.  1744/2016 and No.  1745/2016 were issued on 2 November 2016, 
Decree No.  2218/2017 was issued on 27 December 2017, i.e. more than a year later. The Panel 
doubts, first of all, that the changes in the measures at issue can be considered as "constant". 
Secondly, the Panel does not consider that Panama has demonstrated that the said regulatory 
changes have created the uncertainty that Panama alleges.  
7.227.   Consequently, the Panel rejects Panama 's claim that the specific bond provided for in 
Article  7 of Decree No.  2218/2017 creates uncertainty to the point of constituting a limiting condition 
on imports.  
7.3.4.2.3   The question of whether the specific bond is arbitrary  
7.228.   Panama argues that the specific bond is arbitrary  because it lacks proportionality, since its 
coverage bears no relation to the obligations it seeks to gua rantee. Panama also argues that the 
lack of proportionality is more flagrant in those cases where the importer has already posted a 
general bond. The Panel will examine these arguments below . 
7.229.   With regard to the lack of proportionality in relation to the ri sk covered, Panama claims that  
the amount of the bond is not proportional to the obligations to be covered, as it is determined on 
                                                
392 European Union 's third -party written submission, para.  25; third -party statement, para.  17; and 
United States ' third-party written submission, paras.  45-47.  
393 Appellate Body Report, Argentina – Import Measures , para. 5.217. See also Panel Report, 
Argentina  – Import Measures , paras.  6.252 -6.254 (referring to  Panel Reports, India – Autos , para. 7.270 and 
China – Raw Materials , para. 7.917).  
394 Panama 's second written submission as respondent, paras.  199-211. WT/DS461/RW  
 
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  the basis of a fixed formula.395 Panama points out that the coverage of the specific bond, which 
amounts to 200% of the differe nce between the declared value and the threshold price, multiplied 
by the quantity imported, is far greater than the principal obligations that the bond purports to 
cover.396 Panama questions whether the specific bond is meant to guarantee payment of customs  
taxes and penalties. This is because, according to Panama, customs duties are paid before a 
valuation dispute is identified and bonds may not guarantee the payment of penalties before offences 
are detected.397 
7.230.   Colombia, on the other hand, considers that all  the elements of the bond (insurable interest, 
insurable risk, amount of the insurable risk, parties involved, premium, etc.) have a direct 
relationship with the import operation that is being guaranteed and the value recorded in the 
corresponding customs declaration.398 Colombia points out that, since the o bligation that it is sought 
to guarantee (imposition of customs taxes, penalties and interest after a customs investigation) is a 
future and uncertain one399, the guarantee is set on the basis of an indicati ve value, without there 
being total certainty that the bond will cover 100% of those obligations.400  
7.231.   The indicative value to which Colombia refers is the 200% prescribed in the regulation, and 
according to Colombia meets the criterion of sufficiency within the meaning of Article  13 of the 
Customs Valuation Agreement and Article  7 of the Trade Facilitation Agreement.401 By way of 
example, Colombia indicates that in certain cases the penalties can be as high as 150 or 200% of 
the valuation of the imported goods.402 Colombia also clarifies that the change in calculation of the 
value of the bond following the entry into force of Decree No.  2218/2017 results in a lower guarantee 
amount than had been provided for in Decree No.  1745/2016403, and thus correspon ds more 
accurately to the value  that would be generated by the risk of non -payment of the customs duties.404  
7.232.   The Panel concurs with Colombia as to the difficulty of establishing ex ante a bond that seeks 
to guarantee future and uncertain aspects like duties and potenti al penalties and interest that will 
be payable once the valuation dispute is settled. The Panel considers that there is an element of 
uncertainty inherent in any valuation dispute, since it is not known at the start of the dispute what 
the final determinat ion will be. This situation makes it difficult to be more precise at the time of 
setting the amount of the bond. The Panel appreciates that in the event of a dispute concerning the 
value of goods when there is a suspicion of underinvoicing, it is understan dable that the amount of 
the bond be calculated on the basis of a reference value, since the duties and other charges would 
not be calculated on the basis of the declared value, but rather of corrected values, so there is 
de facto a possibility that the sp ecific bond may not be sufficient to cover all the costs of release.  
7.233.   Therefore, in the Panel 's opinion, Panama has failed to demonstrate the lack of 
proportionality of the coverage in relation to the obligations it seeks to guarantee.  
7.234.   Panama also argues th at the lack of proportionality is more flagrant in the case of importers 
that already have a general bond to cover the same obligations.405 Colombia, for its part, explains 
that the specific bond forms part of a special regime that it applies preferentially over the general 
regime of the Customs Statute.406 According to Colombia, the specific bond and other bonds provided 
for in Colombia 's customs system, including the general bond, are unrelated.407 Colombia asserts 
                                                
395 Panam a's response to Panel question No.  52. 
396 Panama 's first written submission as complainant, paras.  37-38; and first written submission as 
respondent, paras.  54 and 84. See also Panama 's second written submission as respondent, paras.  196-197. 
397 Panama 's com ments on Colombia 's response to Panel question No.  9. 
398 Colombia 's response to Panel question No.  9, para.  28. 
399 Ibid. para.  29. 
400 Ibid. para.  30. 
401 Colombia's response to Panel question No.  18, para.  74. 
402 Colombia's response to Panel question No.  9, para . 29. 
403 The Panel recalls that while in Decree No.  1745/2016 the coverage of the bond amounted to 200% of 
the threshold unit price multiplied by the quantity imported, in Decree No. 2218/2017 the coverage amounts to 
200% of the difference between the f.o.b . price declared by the importer and the result of multiplying the 
threshold unit price.  
404 Colombia 's response to Panel questions No.  13(c), para.  48 and 15(a)(  i), para.  57 and comments on 
Panama 's response to Panel question No.  52. 
405 Panama 's first written submission as complainant, para.  39; and second written submission as 
respondent, paras.  192-193. 
406 Colombia's response to Panel question No.  15(a)(ii), para.  60. 
407 Colombia's response to Panel question No.  17(b), para.  69. WT/DS461/RW  
 
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  that the specific bond was explicitly linked t o the valuation dispute guarantee, pursuant to Article  13 
of the Customs Valuation Agreement and consistent with Article  17 of that same instrument.408 
7.235.   With respect to the relationship with other bonds, the fact that there are other bonds that 
cover similar situations does not necessarily imply that there is any duplication since, as Colombia 
indicated, they may apply to different products in different circumstances. In this instance, Colombia 
indicates that the specific bond is part of a special regime that prevails over the general regime. Nor 
does the fact that other guarantees display different characteristics in terms of their amount, 
duration, etc., support the conclusion that the coverage of the specific bond is arbitrary.  
7.236.   In the Panel 's opinion, Panam a has failed to explain how the allegedly arbitrary design of 
the bond has a limiting effect on imports. Consequently, the Panel rejects Panama 's contention that 
the specific bond provided for in Article  7 of Decree No.  2218/2017 is arbitrary to the point of 
constituting a limiting condition on imports.  
7.3.4.3   Conclusion  
7.237.   Having examined the reasons put forward by Panama to substantiate the alleged 
inconsist ency of the specific bond  with Article  XI:1 of the GATT  1994, pertaining to its 
burdensomeness, the uncertain ty it might create and its arbitrariness, as well as its design, 
architecture and revealing structure in its relevant context, the Panel considers that Panama has 
failed to adduce sufficient arguments and documentary evidence to enable it to find that the 
obligation to constitute a specific bond with the characteristics of Article  7 of Decree No.  2218/2017 
has limiting effects on imports.  
7.238.   For the reasons set out above, the Panel concludes that Panama has failed to demonstrate 
that the specific bond provide d for in Article  7 of Decree No.  2218/2017 has limiting effects on 
imports in a manner inconsistent with Article  XI:1 of the GATT  1994.  
7.3.5   The question of whether the special import regime is inconsistent with Article  XI:1 
of the GATT  1994  
7.3.5.1   Arguments of the pa rties 
7.3.5.1.1   Panama  
7.239.   Panama409 claims that the special import regime constitutes a "restriction[]"on "importation" 
in violation of Article  XI:1 of the GATT  1994, since the collective application of more onerous customs 
and tariff measures to textile and footwear pro ducts with prices lower than or equal to the thresholds 
established by Colombia has a paralysing effect on imports of the products concerned.410  
7.240.   Panama argues that the special import regime, by its design, structure and architecture, 
limits the capacity of certain importers and affects the competitive position of imported products 
priced at or below the thresholds, for the following reasons: (a) it  excludes from the import process 
importers that do not obtain the specific bond; (b) it limits the capacity of importers by imposing 
burdensome requirements; (c) it ascribes a risk status to importers that declare goods at or below 
the established thresho ld price; (d) it requires the presence of the importer, its legal representative 
                                                
408 Colombia 's comments on  Panama 's response to Panel question No.  52. 
409 The Panel notes that in Panama's first written submission as complainant, its first written submission 
as respondent, and its second written submission as complainant, Panama refers to Decree No.  1745/2016. 
After submitting Decree No.  2218/2017 as Exhibit PAN -43, Panama begins referring to that Decree. In this 
connection, Panama explained in paragraph 11 of its second written submission as respondent that "[f]or the 
sake of simplicity, Panama refers in a genera l manner in this rebuttal to the "specific bond" or the "special 
import regime", on the understanding that these are the same measures as are contained in Decrees No.  1745 
and No.  2218. Any reference it may make to a measure of the specific decree (i.e. th e specific bond of Decree 
No. 2218) is normally made to highlight specific aspects stemming from that decree." This summary of 
arguments uses the form in which Panama set forth its arguments, so that reference is at times made solely to 
Decree No.  1745/201 6, these being arguments presented prior to the submission of Decree No.  2218/2017. 
However, the foregoing is without prejudice to the fact that arguments containing an express reference to 
Decree No.  1745/2016 could also be applicable to Decree No. 2118/2 017. Where that is the case, the Panel will 
address those arguments in its analysis concerning Decree No.  2218/2017.  
410 Panama 's request for the establishment of a panel, WT/DS461/22.  WT/DS461/RW  
 
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  or its agent during the customs inspection or examination  of the goods, with the attendant costs 
that this entails; (e) it authorizes the presence of an import operations obse rver paid by the local 
industry; (f) it prescribes a specific bond which entails a considerable cost; (g) it creates uncertainty 
in terms of the restriction on ports of entry; and (h) if the requirements of Article  4 are not met, it 
does not allow reshipme nt, recovery or legalization, with the result that the DIAN may dispose of 
the goods after a period of "legal abandonment".411 
7.241.   Panama argues that the component conditions of the special import regime impose 
significant monetary, logistical and, possibly, tra nsaction costs on the import process. The costs 
stem from the requirement to post a specific bond of 200% of the threshold unit price multiplied by 
the quantity imported, valid for three years412, together with the requirement to produce five 
documents and c ertificates one month in advance of importation for each shipment: (a) translation 
costs for the five documents and certificates413; (b) apostille or legalization costs  for the 
five documents and certificates, as appropriate; (c) logistical costs of complyin g with the 
documentary and certification requirements involving various actors; (d)  banking cost  arising from 
the rates charged by Colombian banks; and (e)  additional costs  stemming from the required 
attendance of the importers themselves or the profession al hired for the purpose during the physical 
inspection of the goods for the release authorization .414 These costs are significant and have a 
restrictive effect on imports.415 The aforementioned costs are recurrent, since they apply to each 
importation.416 
7.242.   In particular, regarding the costs associated with the translation requirement, Panama points 
to the lack of availability of official translators for certain languages in Colombia, which effectively 
restricts the importation of goods from countries with languag es for which no official translator is 
available, as the submission of translated documentation is necessary for processing the entry of 
goods into Colombia.417 Panama adds that the lack of availability of official translators in the 
importer 's city has an i mpact on processing time and cost.418 Panama does not deem it reasonable 
to require official translations from languages for which there are no official translators in Colombia, 
and to require them multiple times, as in the case of certification of the exist ence of the supplier, 
when they have been submitted recently.419 Panama also calls into question the fact that such 
translations are only requested for imports covered by Decrees No.  1745/2016 and 
No. 2218/2017.420 
7.243.   With respect to the costs associated with the  certification requirement, Panama considers 
that they are costs arising from unnecessary red tape since the information appears in other import 
documents.421 Panama points out that to the costs of certification per se  must be added the hidden 
logistical cos ts (i.e. planning and logistical organization costs and implementation costs) which push 
up the transaction costs even further.422 
                                                
411 Panama 's first written submission as complainant, para.  56; and second written submission as 
respondent, paras,  219 and 232. See also Panama 's first written submission as complainant, para.  55. 
412 Panama 's second written submission as respondent, para.  280. 
413 Panama 's first written submission as complainant, para.  57; and seco nd written submission as 
respondent, paras.  241-246. 
414 Panama 's first written submission as complainant, paras.  57-58 and 60; first written submission as 
respondent, para.  60; second written submission as complainant, para.  149; and second written submissi on as 
respondent, paras.  281-285. 
415 Panama 's first written submission as complainant, para.  61; and second written submission as 
respondent, para.  281. 
416 Panama 's first written submission as complainant, paras.  57-58; and first written submission as 
respon dent, para.  60. 
417 Panama 's second written submission as complainant, paras.  124-125. See also Panama 's second 
written submission as respondent, para.  242. 
418 Panama 's second written submission as complainant, para.  127. See also Panama 's second written 
subm ission as respondent, para.  242. 
419 Panama 's second written submission as complainant, para. 131; and second written submission as 
respondent, paras.  245-246. 
420 Panama 's second written submission as respondent, para.  244. 
421 Panama 's second written submissio n as complainant, paras. 134 -136; and second written submission 
as respondent, para.  250. 
422 Panama 's second written submission as complainant, paras.  142-143; and second written submission 
as respondent, para.  259. WT/DS461/RW  
 
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  7.244.   Panama argues that these costs generated by the special import regime are unjustified and 
make importation more difficult and m ore expensive, adversely affecting the competitive position of 
the imported products.423 The lack of justification concerns particularly importers with a general 
bond, which are requested to post an additional specific bond.424  
7.245.   Panama adds that, inasmuch as C olombia requires that the quantity, price and port of entry 
of the goods be set one month in advance of the importation, the special import regime deprives 
importers of flexibility to respond to changing market circumstances or external factors, which 
affects available competitive opportunities for the imported products.425 According to Panama, this 
limiting condition stems from the design of the regime, in particular the requirement to complete 
the formalities of Article  4 of Decree No.  1745/2016.426 Panama ex plains that Colombian customs 
law does not allow adjustments to the quantity with resubmission of the documentation. Prior 
authorization may only be granted by the DIAN.427 Any change in quantity, price or port of entry 
that occurs during the 30 days prior t o the importation results in non -authorization of release and 
subsequent importation of the goods.428 Panama considers that extra costs are created for  importers 
due to the penalties  entailed by seizure of the goods429, expropriation of the goods430, or the 
amendment and submission of new documents.431 These extra costs would have an impact on 
domestic demand such as to stifle exports.432 Furthermore, the fact that the documentation has to 
be submitted one month in advance makes the importation commercially unvia ble in a high -turnover 
market such as Colombia 's.433 
7.246.   In addition to the limitations which the special import regime entails on account of its high 
cost and rigidity, Panama argues that the uncertainty introduced by the regime gives rise to an 
additional limi tation. Panama argues that the uncertainty stems from the frequent changes in 
Colombia 's customs regulations, the introduction of possible restrictions on ports of entry434, and 
the obtainment of certain documents and the necessary credit rating in order to obtain the specific 
bond.435 With respect to the regulatory changes, Panama identifies the changeover from a compound 
tariff regime to a hybrid one that includes an ad valorem  tariff and a special import regime, and the 
changes stemming from the adoption of Decree No.  2218/2017, which affect the products and tariff 
headings covered by the measures, the thresholds, the calculation of the specific bond and the 
penalties for failure to comply with the requirements set out in that Decree.436 
7.247.   Panama considers that t he regime discourages the import of the relevant goods as it obliges 
importers to decide between importing under a costly and uncertain import process; modifying the 
declared values in order to pass the thresholds and avoid application of the regime; or no t importing 
and looking for an alternative domestic supplier.437 In Panama 's opinion, the high turnover of imports 
of clothing and footwear reinforces the limiting condition of the regime.438 
7.248.   With respect to the nature of its claim, Panama explains, in respons e to Colombia, that the 
claim under Article  XI:1 relating to the special import regime is distinct, independent and separate 
                                                
423 Panama 's first written submission as co mplainant, para.  60; first written submission as respondent, 
para. 61; and second written submission as respondent, para.  250. 
424 Panama 's first written submission as complainant, para.  60; and first written submission as 
respondent, para.  61. 
425 Panama 's first written submission as complainant, paras.  62 and 67 -68; and second written 
submission as respondent, para.  268. 
426 Panama 's first written submission as complainant, para.  62; and first written submission as 
respondent, para.  62. 
427 Panama 's second written submission as complainant, paras.  151-153. 
428 Panama 's first written submission as complainant, para.  63. 
429 Panama 's second written submission as complainant, para.  158; and second written submission as 
respondent, para.  269. 
430 Panama 's second writt en submission as respondent, para.  271. 
431 Panama 's first written submission as complainant, para.  65. 
432 Panama 's second written submission as complainant, para.  158. 
433 Panama 's second written submission as respondent, para.  272. 
434 Ibid. paras.  289-290. 
435 Ibid. para.  291. 
436 Ibid. paras.  286-288. 
437 Panama 's first written submission as complainant, para.  69; and first written submission as 
respondent, para.  64. 
438 Panama 's first written submission as complainant, para.  71; and first written submission as 
respondent, para.  64. WT/DS461/RW  
 
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  from the claim relating to the specific bond. Contrary to Colombia's assertion, Panama states that 
the viability of each of the two  claims is not dependent on the other.439 
7.249.   In response to Colombia 's statements on the burden of proof, Panama does not consider 
that there are "permissible" measures that call for a particular burden of proof in the event of claims 
against them.440 Panama reca lls that the Appellate Body in Argentina – Import Measures did not 
exclude formalities or requirements under Article  VIII of the GATT  1994 from the scope of application 
of Article  XI:1.441 
7.250.   Panama insists on the fact that the present dispute relates to measur es that have limiting 
effects on importation comparable to the measures analysed by the panels in Indonesia – Import 
Licensing Regimes  and Indonesia – Chicken , especially in regard to the requirement to set the 
quantity, price and port of entry of the good s one month in advance without any possibility to change 
them.442  
7.251.   Likewise, Panama maintains that Colombia is imposing a system of minimum import prices, 
equal to the thresholds in Article  3 of Decree No.  1745/2016, which is inconsistent with Article  XI:1 
of the GATT  1994. According to Panama, the regime adversely affects the conditions of competition 
for imports of products below the threshold because it creates a strong incentive for importers to 
purchase goods above the minimum import price so as to escap e application of Decree 
No. 1745/2016.443  
7.252.   Lastly, Panama concludes that the conditions imposed by the special import regime are 
burdensome, are costly, give rise to unnecessary charges, introduce uncertainty, reduce flexibility 
and discourage importation. T herefore, Panama claims that the special import regime imposes a 
limiting condition on importation inconsistent with Article  XI:1 of the GATT.444 
7.3.5.1.2   Colombia  
7.253.   Colombia445 argues that Panama has improperly challenged the same measure twice, since 
it is challenging under Article  XI:1 both the specific bond and the special customs regime, of which 
the said bond is a component.446  
7.254.   Colombia considers that Panama has not made a separate claim against the special import 
regime excluding the specific bond. Thus, as Panama h as failed to demonstrate that the specific 
bond is inconsistent with Article  XI:1, and since the said bond is an integral part of the special import 
regime, the Panel must dismiss the claim against the special import regime.447  
7.255.   Colombia argues that customs formalities are permissible under WTO law and that, 
therefore, their imposition cannot in itself constitute a prohibited "restriction" under Article  XI:1. 
According to Colombia, the duties, costs or administrative fees associated with those formalities 
                                                
439 Panama 's second written submission as complainant, paras.  113-114; and second written submission 
as respondent, para.  224. 
440 Panama 's second written submission as complainant, para.  118. 
441 Ibid. para.  119 (referring to Appellate Body Re port, Argentina – Import Measures , para. 5.237).  
442 Panama 's second written submission as complainant, paras.  160-163. 
443 Panama 's second written submission as complainant, paras.  171-175; and second written submission 
as respondent, paras.  293-294. 
444 Panama 's first written submission as complainant, para.  72; and first written submission as 
respondent, para.  65. 
445 The Panel notes that in Colombia's first written submission as respondent and its second written 
submission as complainant, Colombia refers to Dec ree No.  1745/2016. After Panama submitted Decree 
No. 2218/2017 as Exhibit PAN -43, Colombia began referring to that Decree as well. This summary of 
arguments uses the form in which Colombia set forth its arguments, so that reference is at times made solely 
to Decree No.  1745/2016, these being arguments presented prior to the submission of Decree No.  2218/2017. 
However, the foregoing is without prejudice to the fact that arguments expressly referring to Decree 
No. 1745/2016 could also be applicable to Decree No. 2118/2017. Where that is the case, the Panel will 
address those arguments in its analysis concerning Decree No.  2218/2017.  
446 Colombia 's first written submission as respondent, para. 81; and second written submission as 
complainant, para.  67. 
447 Colombia 's first written submission as respondent, paras. 83 -84; second written submission as 
complainant, paras. 69 -70; and second written submission as respondent, paras.  56-57. WT/DS461/RW  
 
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  cannot, "without more", give rise to a prohibited restriction under Article  XI:1.448 Panama has failed 
to demonstrate that these costs have a limiting effect on imports.449 Colombia argues that, to prove 
a violation of Article  XI:1 in respect of instruments that are permissible under WTO law, the burden 
on Panama should be a particularly heavy burden to discharge.450  
7.256.   On the requirement relating to the translation of certificates, Colombia argues that it is 
reasonable and that the fees involved are not charged by th e Colombian Government.451 Colombia 
considers that what is not reasonable is to expect there to be an official translator for every language 
in every port. Colombia remarks that the lack of official translators for certain languages cannot be 
attributed to t he Colombian Government. In any event, Colombia points out that there is a procedure 
in place to solve the problems arising from the lack of an official translator in a given language.452 
Lastly, in respect of this requirement, Colombia maintains that the fa ct that translation is requested 
only for the import of certain products does not constitute a restriction within the meaning of 
Article  XI:1.453 
7.257.   Regarding the requirement for certification of documents, Colombia argues that this is 
permissible under Article  8 of the GATT 1994, so this requirement and the associated costs do not 
constitute prohibited restrictions under Article  XI:1.454 Likewise, it points out that Panama refers to 
certification costs that are determined and collected by Panama itself, which thu s cannot give rise 
to a restriction on the part of Colombia under Article XI:1. Colombia explains that this requirement 
is not unnecessary, since it is used to verify information contained in other documents; and considers 
that the fact that Panama referre d to this requirement as a "charge" places the requirement outside 
the scope of application of Article  XI:1.455 
7.258.   With respect to the requirement to indicate the type of economic relationship between the 
supplier and the importer, Colombia asserts that it does  not necessarily imply the hiring of an 
external professional, with the attendant cost, and reiterates that this is necessary information that 
may affect the reliability of the customs information provided.456 
7.259.   In regard to the requirement that the importer, its legal representative or an agent be 
present during the inspection of the goods by Colombia 's customs authorities, Colombia argues that 
this is intended to safeguard the importer 's due process rights and to ensure that the importers are 
not in fact shel l companies engaged in fraudulent operations. Colombia adds that Panama has failed 
to prove that this requirement imposes additional costs; and, in the event that costs are incurred, 
they are charged by private actors. Nor does Colombia consider that Panam a has proven the limiting 
effects of this requirement on imports .457 
7.260.   As regards the allegedly limited flexibility of the special import regime, Colombia responds 
that the importer remains free to import the quantity it wants and to change this quantity.458 
                                                
448 Colombia 's first written submission as respondent, paras. 85 -86 and 92; second wri tten submission 
as complainant, paras. 71 -72; and second written submission as respondent, para. 59.  
449 Colombia 's first written submission as respondent, para.  94. 
450 Colombia 's first written submission as respondent, para. 87; and second written submission  as 
complainant, para.  73. 
451 Colombia 's first written submission as respondent, para. 89; and second written submission as 
complainant, para.  42. 
452 Colombia refers to Article  6 of Resolution No. 3269/2016,  which stipulates in relevant part that: 
"Where the  document is drawn up in a language for which there is no official translator certified in Colombia, 
the citizen shall request certification from  the Ministry of Foreign Affairs that there is no official translator, in 
order to be able to submit the transl ation of the document carried out by another translator, whose signature 
must legalized before a public notary" (Colombia 's second written submission as respondent, para.  64 
(referring to Resolution No.  3269/2016 (Exhibit  COL-10)). 
453 Colombia 's second writ ten submission as respondent, paras.  60-66. 
454 Colombia 's first written submission as respondent, paras.  90-91; and second written submission as 
complainant, para.  76. 
455 Colombia 's second written submission as respondent, paras.  67-69. 
456 Ibid. para.  70. 
457 Colombia 's first written submission as respondent, paras.  95-96; second written submission as 
complainant, paras.  81-82; and second written submission as respondent, paras.  72-74. 
458 Colombia 's first written submission as respondent, para.  97; and second wri tten submission as 
complainant, para.  83. WT/DS461/RW  
 
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  7.261.   Colombia states that the measures challenged by Panama are of a different nature and have 
different characteristics from the measures examined in Indonesia – Import Licensing Regimes , 
Indonesia – Chicken  and Peru – Agricultural Products , so that there is no b asis for the comparisons 
that Panama draws between those disputes and the present dispute.459 
7.262.   Colombia concludes by asserting that Panama has failed to establish that the special import 
regime in Decree No.  1745/2016 is inconsistent with Article XI:1 of the GATT 1994.460 
7.3.5.2   Analysis by the Panel  
7.263.   As indicated in paragraph  7.157  above, the Panel 's task consists in determining whether, as 
Panama claims, the special import reg ime provided for in Article  7 of Decree No.  2218/2017 is 
inconsistent with Article  XI:1 of the GATT  1994 because it constitutes a measure that has a limiting 
effect on the importation of certain products consisting of fibres, yarns, fabrics, clothing and 
footwear461 and limits the competitive opportunities of the importers and imported products. It is 
important to stress that Panama has challenged the special import regime as a whole462, rather than 
the component requirements separately.  
7.264.   The Panel notes that Pa nama has not defined the category  of measures covered by 
Article  XI:1 in which the special regime would fall. In this regard, Colombia, without prejudice to its 
objection as to the possible inconsistency of the regime, does not appear to have called into q uestion 
the fact that the special regime may fall within the scope of Article  XI:1. 
7.265.   The Panel recalls in this respect that the prohibition of quantitative restrictions provided for 
in Article  XI:1 refers explicitly to prohibitions or restrictions on the im portation or exportation of a 
product "whether made effective through quotas, import … licences or other measures". Given the 
broad scope of the term "other measures" and in the absence of any discussion on this point between 
the parties, the Panel conside rs it appropriate to examine whether Panama has demonstrated that 
the special import regime is trade -restrictive.463 
7.266.   Panama argues that the special import regime, by its design, structure and architecture, 
limits the capacity of some importers and affects the competitive position of products imported at 
prices below or equal to the thresholds.464 As previously explained, the Panel will keep in mind in its 
analysis that "not every condition or burden placed on importation … will be inconsistent with 
Article  XI, but only those that are limiting, that is, those that limit the importation … of products".465 
While the conditions attached to the import of products often entail burdens on importation, it is no 
less certain that they are "a routine aspect of internation al trade".466 
7.267.   The Panel will proceed to examine the measure at issue on the basis of its design, 
architecture and revealing structure in its relevant context.467 
                                                
459 Colombia 's second written submission as respondent, paras.  75-80. 
460 Colombia 's second written submission as complainant, para.  87; and second written submission as 
respondent, para.  81. 
461 As indicated in the desc riptive part, Article  2 of Decree No.  2218/2017 stipulates that the products 
covered are imports consisting of fibres, yarns, fabrics, clothing and footwear under Chapters  52, 53, 54, 55, 
56, 58, 59, 60, 61, 62, 63 and 64 of the Customs Tariff for which th e declared f.o.b. price is lower than or 
equal to the threshold established in Article  3 of that Decree.  
462 See, for example, Panama 's first written submission as complainant, para.  70 and second written 
submission as respondent, para.  33. 
463 The Panel agrees with the panel in Argentina – Import Measures  that what is relevant when 
examining a measure under Article  XI:1 of the GATT  1994 is whether the measure prohibits or restricts trade, 
rather than the means by which such prohibition or restr iction is made effective. (Panel Report, Argentina – 
Import Measures , para. 6.363.) This approach was also used by the panel in Indonesia – Import Licensing 
Regimes.  (Panel Report, Indonesia – Import Licensing Regimes , paras.  7.55 and 7.76.)  
464 Panama 's first written submission as complainant, para.  56; and second written submission as 
respondent, paras.  219 and 232. See also Panama 's first written submission as complainant, para.  55. 
465 Appellate Body Report, Argentina – Import Measures, para.  5.217. See also Panel Report, 
Argentina  – Import Measures , paras.  6.252 -6.254 (referring to Panel Reports, India – Autos,  para. 7.270 and 
China – Raw Materials , para. 7.917).  
466 Appellate Body Report, Argentina – Import Measures , para. 5.243.  
467 Ibid. para.  5.217 (refe rring to Appellate Body Reports, China – Raw Materials , paras.  319-320).  WT/DS461/RW  
 
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  7.268.   As described in section  2.3.3.3  above, the special import regime challenged by Panama is 
composed of different elements governed by Articles  4 to 8 of Decree No.  2218/2017:  
a. documentary and certification requirements (Articl e 4.1 of Decree  No. 2218/2017);  
b. presence of the importer, its legal representative or the importing company 's agent during 
the process of customs inspection or examination  of the goods (Article  4.2 of Decree 
No. 2218/2017);  
c. possibility of establishing cust oms controls on entry of the goods (Article  5 of 
Decree  No. 2218/2017);  
d. participation of local observers in the import process (Article  6 of Decree  No. 2218/2017);  
e. posting of a specific bond in cases of valuation dispute to obtain release of the goods 
(Article 7 of Decree No.  2218/2017); and  
f. incorporation of information concerning import operations in the risk management system 
(Article  8 of Decree No.  2218/2017).  
7.269.   Panama also refers to the provisions of Decree No.  2218/2017 relating to reshipment 
(Article  9) and seizure and confiscation (Article  10). As Panama itself acknowledges, these are not 
actually requirements linked to the import process, but rather the consequences ensuing from failure 
to comply with certain documentary requirements prescribed in De cree No.  2218/2017.468 The Panel 
considers it necessary to examine these aspects, too, since they are part of the design and structure 
of the special import regime and, as such, may help us elucidate whether, as Panama argues, the 
special import regime has l imiting effects on imports that constitute a violation of Article  XI:1 of the 
GATT  1994.  
7.270.   Before examining each of the requirements that make up the special import regime 
challenged by Panama, the Panel will address the parties ' discussion on the consequen ces of the fact 
that one of the requirements of the special import regime identified by Panama (the specific bond 
provided for in Article  7 of Decree No.  2218/2017) has also been challenged as an independent 
measure under Article  XI:1 of the GATT  1994.  
7.271.   Indeed, Colombia maintains that Panama has improperly challenged the same measure twice 
under Article  XI:1 since it is challenging the specific bond as such and as a component of the special 
import regime. For Colombia, Panama 's claim against the special imp ort regime is dependent on its 
claim with respect to the specific bond. Hence, Colombia contends that the claims in respect of the 
special import regime should be dismissed in the event that the Panel finds that the specific bond is 
not inconsistent with A rticle XI:1.469 
7.272.   Panama, for its part, considers that the claim under Article  XI:1 in respect of the special 
import regime is distinct, independent and separate from the claim relating to the specific bond.470  
7.273.   In the Panel 's opinion, as Panama argues, the spec ific bond, on the one hand, and the special 
import regime (including the bond), on the other, constitute different measures on which Panama 
may submit separate claims under Article  XI:1 of the GATT 1994. It is not unusual for complainants 
to challenge a me asure comprising various elements collectively and any of those elements 
separately.471 In the instant case, Panama has challenged the special import regime, comprising 
several requirements, collectively , and only one of those requirements, the specific bond , separately. 
Hence the Panel considers that the findings with respect to one of the elements of the special import 
regime (i.e. the specific bond) do not preclude it from examining and making findings on the whole 
set of requirements that make up the spec ial import regime. In this sense, the Panel considers it 
necessary to distinguish between the part and the whole: the fact that one part of a measure is not 
                                                
468 Panama 's second written submission as respondent, para.  421. 
469 See paras.  7.253 -7.254  above . 
470 See para.  7.248  above.  
471 See, for example, Indonesia – Import Licensing Regimes .  WT/DS461/RW  
 
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  inconsistent with a particular provision does not necessarily imply that the whole of which it is a  part 
will receive the same legal assessment in the light of that provision.  
7.274.   In view of the foregoing, the Panel will analyse the constituent elements of the special import 
regime so as to be able to assess whether, taken together, they constitute a measur e inconsistent 
with Article  XI:1 of the GATT  1994 as claimed by Panama.  
7.3.5.2.1   Documentary and certification requirements  
7.275.   As described in section  2.3.3.3.1  above, Panama  challenges as an integral part of the special 
import regime a series of documentary and certification requirements that the importer of the 
products covered by Decree No.  2218/2017 has to fulfil for each shipment at least one month in 
advance of the arriv al of the goods on Colombian customs territory. Those requirements include 
certification of intention to sell, certification of the existence of the foreign supplier, list of 
distributors, declaration by the legal representative of the customs agency and d eclaration by the 
importer or the importer 's legal representative, and they have to be submitted together with the 
identity and liability form.  
7.276.   Below, the Panel will describe each of the documentary and certification requirements 
contained in the special i mport regime challenged by Panama and the parties ' comments as to 
whether the Colombian authorities have access to the requested information through other sources.  
7.3.5.2.1.1   Certification of intention to sell  
7.277.   Article  4.1(a) of Decree No.  2218/2017 stipulates that th e importer shall submit for each 
shipment, at least one month in advance of the arrival of the goods on Colombian customs territory, 
the identity and liability form accompanied by, among other documents, the following certification:  
Certification from the foreign supplier, apostilled or legalized, with an official translation 
into Spanish, 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 
accordan ce with the Tax Statute, 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 . 
7.278.   With respect to the information relating to the intention to sell , Panama states that it is found 
in the supporting documents accompanying every customs declaration for importation and must be 
presumed to be authentic and true unless there is evidence to  the contrary.472  
7.279.   Colombia responds, for its part, that the information contained in the supporting documents 
is different from that requested in Article  4.1(a) in that it is the customs agency or the importer that 
registers the intention to sell in import declarations, whereas it is the exporter that issues the 
certification of intention to sell. Colombia deems it essential to have this certification from the 
exporter before the goods arrive in the country in order to detect and prevent operations linked to  
money laundering since, for example, it can help avoid the use of foreign companies without their 
knowledge or fictitious import companies in Colombia. Colombia adds that in the general customs 
regime the authenticity of the supporting documents is determ ined after the goods have been 
released, which would not enable money laundering operations to be prevented. Colombia 
emphasizes that the purpose of requiring this information before the goods arrive on Colombian 
customs territory is to compare the informa tion provided by the importer with that provided by the 
exporter, which must be presumed to be authentic and true unless there is evidence to the 
contrary.473 
7.280.   With respect to the information relating to the type of economic relationship  between the 
supplier/exporter and the importer, Panama states that this information is required in the Andean 
Declaration of Value (boxes  87, 88 and 89). Also, Panama notes that the fact that the information 
                                                
472 Panama 's response to Panel question No.  48 (referring to Decree No.  390/2016 (Exhibit  PAN-4), 
Article  215).  
473 Colombia 's comments on Panama 's response to Panel question No.  48. WT/DS461/RW  
 
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  on economic relationship refers to the Colombia n Tax Statute probably implies recourse to the 
services of an expert.474  
7.281.   Colombia responds that this information is not available in other import documents under 
the general regime and that it is necessary in order to minimize the risks of money laundering using 
chains of related companies.475 Colombia explains that the information contained in the Andean 
Declaration of Value has a different and more limited scope and purpose. Colombia identifies two 
main differences between the information contained in the An dean Declaration of Value and that 
required in Article  4.1(a) of Decree No.  2218/2017: (a)  in the Andean Declaration of Value, it is the 
customs agency or the importer that indicates the economic relationship, whereas in the case of th e 
requirement under A rticle 4.1(a) it is the exporter directly; and (b) the economic relationship criteria 
in the Andean Declaration of Value are different from those provided for in the Colombian Customs 
Statute, the latter being more specific and relevant for detecting and p reventing money laundering 
through related companies acting as a front.476 Colombia again stresses that a highly relevant aspect 
is that the information comes from the exporter and is used to compare it with that provided by the 
importer. Colombia considers that the assistance of an expert would not necessarily be required to 
comply with this requirement, and points to its right to exercise the supervisory authority of customs 
administrations pursuant to Article  10 of Decision No.  379 of the Andean Community.477  
7.282.   With respect to the address, telephone number and email address of the supplier/exporter,  
Panama states that this information is required in the import declaration478 and points out that 
Colombia acknowledges that the information required by Article  4.1 of the decrees in question may 
be obtained from other documents, while disagreeing on the validity of the information those 
documents provide.479 Colombia indeed recognizes that some of the information is available in the 
import declaration and its supporting  documents, but invokes its right to be able to compare, through 
the exporter, the information provided by the importer.480 As Colombia had mentioned before, one 
of the main differences is that the information contained in the import declaration is provided by the 
customs agency or the importer, whereas that required in Article  4.1(a) is provided directly by the 
foreign supplier/exporter. Moreover, the information relating to the requirement under Article  4.1(a) 
is received before the goods arrive, which make s it possible to activate the risk management 
system.481 
7.283.   With respect to the information on the six-digit tariff subheading,  detailed description of the 
product, quantity and price,  Panama states that it is required in the import declaration, in the Andean 
Declaration of Value and in the commercial invoices and other supporting documents.482 While 
Colombia recognizes that some information is available in supporting documents submitted by the 
customs agency or the importer, it deems it necessary to request the information from the 
supplier/exporter in order to address possible false statements in the supporting documents 
accompanying import declarations and the Andean Declaration of Valu e. Furthermore, Colombia 
remarks that the information in the import declaration and the Andean Declaration of Value is 
insufficient, having a different purpose and scope.483 
                                                
474 Panama 's response to Panel question No. 48. 
475 Colombia 's response to Panel question No.  48. 
476 In this connection, Colombia compares, on the one hand, the criteria laid down in Article  15.4 of 
Decision No.  378 and box  49 of the Annex to Decision No.  379 with, on the other, those provided for in 
Article  260-1 of the Colombian Customs Statute (see Decision No.  378 (Exhibit  COL-53), and Decision No.  379 
(Exhibit COL -54)). 
477 Colombia 's comments on Panama 's response to Panel question No.  48. 
478 Panama 's response to Panel question No.  48. 
479 Panama 's comments on Colombia 's response to Panel question No.  48. 
480 Colombia 's response to Panel question No.  48 and comments on Panama 's response to Panel 
question No.  48. 
481 Colombia 's comments on Panama 's response to Panel question No.  48. 
482 Panama 's response to  Panel question No.  48 (referring to boxes  59, 77, 78 and 91 of the import 
declaration and boxes  53, 54, 55, 57 and 58 of the Andean Declaration of Value).  
483 Colombia 's response to Panel question No.  48 and comments on Panama 's response to Panel 
question N o. 48. WT/DS461/RW  
 
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  7.3.5.2.1.2   Certification of the existence of the foreign supplier  
7.284.   Article  4.1(b) of Decree No.  2218/2017 stipulates that the importer shall submit for each 
shipment, at least one month in advance of the arrival of the goods on Colombian customs territory, 
the identity and liability form accompanied by, among other documents, the following certificat ion: 
Certification of the existence of the foreign supplier, apostilled or legalized, with an 
official translation into Spanish, which shall be issued by the entity in the country of 
export that keeps the official register of producers or traders. Should n o such entity 
exist, the importer must testify to that fact under oath, which shall be deemed to have 
been taken with the signing of the document, without prejudice to the supervisory and 
inspection powers of the National Customs and Excise Directorate . 
7.285.   Panama states that this information is found in the invoices and other supporting documents 
accompanying the import declaration required under Article  215 of Decree No.  390/2106. Panama 
points out that the fact that this certification may be replaced by a de claration from the importer 
shows that the requirement is not imperative.484  
7.286.   Colombia responds that this information is not available in other import documents required 
for the general regime, and points to the need to obtain this information directly from the 
supplier/exporter before the goods arrive in Colombia in order to prevent criminal organizations from 
using in their import declarations the names of foreign companies without their consent or using 
foreign companies or importers that are shell compani es.485 Colombia emphasizes that the 
information in the import declaration or the supporting documents is information provided by the 
importer or the customs agency, whereas the information required by Article  4.1(b) of Decree 
No. 2218/2017 comes directly fro m the foreign supplier/exporter. Colombia again invokes its right 
to compare the information received from different sources for the purpose of preventing money 
laundering.  
7.287.   As regards the possibility that the information from the supplier/exporter, like t hat in the 
import declaration and supporting documents, may be falsified, Colombia explains that the 
probability of falsification is lower because the certification is issued by the "[e]ntity in the exporting 
country that keeps the official register of pro ducers or traders" and, in addition, the document has 
to be apostilled. Colombia also disagrees with Panama on the added value of the apostille for the 
purposes of detecting and preventing document fraud. Whereas Panama considers that the apostille 
does no t add any value in terms of avoiding fraud, Colombia maintains the opposite, since the 
apostille certifies not only the authenticity of the signature but also the capacity of the person signing 
the document and, where applicable, the identity of the seal o r stamp the document bears. As to 
the option allowing a sworn statement in lieu of the certification issued by the entity in the exporting 
country that keeps the official register of producers or traders, Colombia asserts that this 
requirement may discoura ge imports based on registers of non -existent exporters and deter criminal 
organizations from using the names of companies in another country to engage in illegal activities.486 
7.3.5.2.1.3   List of distributors  
7.288.   Article  4.1(c) of Decree No.  2218/2017 stipulates that the importer shall submit for each 
shipment, at least one month in advance of the arrival of the goods on Colombian customs territory, 
the identity and liability form accompanied by, among other documents, the following information:  
[L]ist of distributors of t he goods in Colombia indicating their tax identification number 
(NIT), business name, address, telephone number and email address. [if the person 
importing the goods will be selling them in the same state]  
7.289.   Panama acknowledges that this information cannot b e obtained by other means. 
Nonetheless, Panama considers that this information should not be required and that, in any event, 
it should not be made available to local import operations observers. Panama doubts whether the 
importers are able to indicate the  final destination of the products one month before the goods arrive 
                                                
484 Panama 's response to Panel question No.  48. 
485 Colombia 's response to Panel question No.  48. 
486 Colombia 's comments on Panama 's response to Panel question No.  48. WT/DS461/RW  
 
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  in Colombia and points out that requesting this information creates unnecessary rigidity for 
importers.487  
7.290.   Colombia, first of all, draws a distinction between this requirement and the one provided for 
in Article  4.1(e) relating to the distribution chain. Then, Colombia explains that this information is 
necessary in order to verify the existence of the distributors, since there have been cases in which 
companies have faked the marketing of i mported products with fictitious dealers in Colombia.488 
Colombia considers that this information deters criminals from using shell companies in its territory 
as well as enabling it to investigate possible offences. Colombia denies that this information is m ade 
available to the local import operations observer. Colombia considers it likely that the importers 
know who the potential distributors of their imports are, and reiterates that it does not ask for the 
final destination of the products in the marketing chain, but solely the distributors that will be dealing 
directly with the importer. Colombia concludes by specifying that the list of distributors can be 
corrected after it has been submitted.489 
7.3.5.2.1.4   Declaration by the legal representative of the customs agency  
7.291.   Article  4.1(d) of Decree No.  2218/2017 stipulates that the importer shall submit for each 
shipment, at least one month in advance of the arrival of the goods on Colombian customs territory, 
the identity and liability form accompanied by, among other docum ents, the following declaration:  
Declaration signed by the legal representative of the Colombian customs agency for the 
goods, indicating their tax identification number (NIT), business name, address, 
telephone number and email address, where appropriate, certifying that they have 
conducted a background check on the customer for the importer for which they are to 
act as customs broker and established how long the parties have worked together.  
7.292.   Panama states that the NIT and the business name of the customs agency are required in 
the import declaration (boxes  25 and 26). Panama points out that when the declaration is submitted 
through a customs agency, the "customs mandate" will normally contain the NIT, business name 
and principal place of business as well a s the identity card of the customs agency's legal 
representative. Further, Panama points out that the DIAN has access to the address, telephone 
number and email address of the customs agency's legal representative through the customs 
agency 's entry in the Single Tax Register (RUT), since all customs users, including customs agencies, 
are obliged to register in the RUT. Regarding the customer background check, Panama asserts that 
the law presumes compliance with the obligation to "know the customer" without the need for those 
involved to have to confirm such compliance.490 Moreover, customs agencies have the legal 
obligation to preserve for five years, from the date of submission and acceptance of the declaration, 
the supporting documents and official bank paym ent receipts and the customs mandate and power 
of attorney contract, where granted, which for Panama means that the DIAN has access to the 
relevant information on the relationship between customs agencies and importers.491  
7.293.   Colombia, for its part, states tha t the information in the import declaration is insufficient and 
that neither the customs mandate nor the information in the RUT contain a declaration to the effect 
that the customs agency has conducted a background check on the customer.492 Colombia explains  
that Colombian regulations require that customs users obtain the requisite background information 
on the customer in order, inter alia , to prevent illicit activities on the part of customs agencies. 
According to Colombia, the certificate required by Artic le 4.1(d) ensures compliance with the 
regulations.493 
                                                
487 Panama 's response to Panel question No.  48. 
488 Colombia 's response to Panel question No. 48. 
489 Colombia 's comments on Panama 's response to Panel question No.  48 (referring to the provisions of 
Decrees No.  2685/1999 and No.  390/2016 (Exhibits  PAN-3 and PAN -4) and Articles  10 of Decree 
No. 1745/2016 and 11 of Decree No.  2218/2017 (Exhibits  PAN-2 and PAN -43)). 
490 Decree No.  2685/1999 (Exhibit  PAN-3), Article  27-1; Resolution  4240/2000 (Exhibit  PAN-40), 
Article  14-3; and Circular No.  0170/2002 (Exhibit  PAN-104), para.  5.2. 
491 Panama 's response to Panel question No.  48. 
492 Colombia 's comments on Panama 's response to Panel question No.  48. 
493 Colombia 's response to Panel question No.  48 and comments on Panama 's response to Panel 
question No.  48. WT/DS461/RW  
 
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  7.3.5.2.1.5   Declaration by the importer or the importer 's legal representative  
7.294.   Article  4.1(e) of Decree No. 2218/2017 stipulates that the importer shall submit for each 
shipment, at least one month in advance of the arrival of the goods on Colombian customs territory, 
the identity and liability form accompanied by, among other documents, the following declaration:  
Signed declaration by the importer or the importer 's legal representative, certifying the 
following:  
(i)That the value to be declared for the goods being imported corresponds 
to the price actually paid or payable.  
(ii) The address of the storage facilities for the goods being imported.  
(iii) Detailed information on the distribution and marketing chain i n 
Colombia for the goods being imported.   
(iv) That they are aware that the customs authority is entitled to submit 
the documents related to the import transaction to the Attorney General's 
Office and the Financial Information and Analysis Unit (UIAF).  
7.295.   In respect of the information on the value of the goods , Panama maintains that it is found 
in the import declaration (box  78), in the Andean Declaration of Value (box  83), and in the invoices 
and the supporting documents .494 Colombia does not contest this, but points to the importance of 
having this information before the goods arrive in order to have time to examine the information in 
the light of its risk management system and to compare it ex post facto  with the value indicated in 
the import declaration and t he supporting documents.495 
7.296.   With reference to the address of the storage facilities , Panama considers that such detailed 
information should not be required, since the importers already provide information on the 
department or area of destination of the impor ts in the import declaration (box  56) and no  similar 
information is requested for products of domestic origin.496 Colombia, for its part, considers that this 
information, which is not recorded in the import declaration, is necessary to avoid cases where the 
company recorded in the import declaration as exporter does not exist or has no knowledge of the 
transaction, or to identify import companies that are shell companies or, although mentioned, are 
not participating in the import transaction. Likewise, Colomb ia clarifies that it does not request the 
address of the warehouses, as Panama says, but the address of the places where the goods remain 
stored pending delivery to the distributor.497 
7.297.   As far as the information on the distribution and marketing chain  is concerned, Panama 
considers that this information should not be required, and that Colombia fails to explain how it is 
that the list of distributors is totally different from the information on the distribution chain.498 
According to Colombia, this requi rement, which is not to be confused with the provisions of 
Article  4.1(c) (list of distributors), conforms to a legal mandate laid down in the new anti -smuggling 
statute.499 
7.298.   With regard to the declaration of awareness  that the Colombian customs authority is entitled 
to submit the documents related to the import transaction to the Attorney General's Office and the 
Financial Information and Analysis Unit, Panama asserts that this information serves no purpose, 
since it repeats an objective fact, namely that Col ombian criminal law applies to everyone.500 
According to Colombia, the importance of this declaration resides in the fact that it warns persons 
and customs agencies that are thinking of engaging in illicit transactions of the consequences 
thereof.501 
                                                
494 Panama 's response to Panel question No.  48. 
495 Colombia 's comments on Panama 's response to Panel questio n No.  48. 
496 Panama 's response to Panel question No.  48. 
497 Colombia 's comments on Panama 's response to Panel question No.  48. 
498 Panama 's response to Panel question No. 48 and comments on Colombia 's response to Panel 
question No.  48. 
499 Colombia 's comments on  Panama 's response to Panel question No.  48. 
500 Panama 's response to Panel question No.  48. 
501 Colombia 's comments on Panama 's response to Panel question No.  48. WT/DS461/RW  
 
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  7.3.5.2.1.6   The quest ion of whether the documentary and certification requirements 
contribute to the alleged limiting effect of the special import regime  
7.299.   Panama maintains that the contribution of the documentary and certification requirements 
described in the above sections to  the limiting effect of the special import regime stems basically 
from three factors: (a) the costs involved (translation, legalization or logistics); (b) the rigidity they 
impose on the importer by obliging him to submit the documentation one month in adv ance; and 
(c) the fact that the information furnished by the documents required under Article  4.1 of Decree 
No. 2218/2017 may be obtained through other documents.502  
7.300.   Colombia responds that not only are the translation and certification requirements 
permissi ble under WTO law, but they are also reasonable.503 Colombia asserts that the information 
furnished by the documents required under Article  4.1 of Decree No.  2218/2017 cannot be obtained 
through other documents requested in cases of imports subject to the ge neral regime. This is 
because the information contained in the customs import declaration is not sufficient and does not 
have the same purpose and scope as that requested under Article  4.1 of Decree No.  2218/2017. In 
addition, Colombia stresses that the ai m of the documentary requirements challenged by Panama is 
to corroborate the information contained in the customs declaration ahead of the arrival of the goods 
in Colombia, thus allowing it to conduct a prior risk analysis so that it may take action in cas es of 
import transactions suspected of constituting money laundering.504 
7.301.   The Panel notes that there are significant differences between the parties in respect of 
specific aspects such as the lack of availability of official translators in Colombia for some l anguages, 
whether the same information required under Article  4.1 of Decree No.  2218/2017 is found in other 
documents, or whether having to submit the documents one month in advance really does deprive 
the importers of flexibility.  
7.302.   The Panel refers to Col ombia 's explanations on the procedure laid down in Colombia 's 
regulations for cases where there is no certified official translator for a given language in 
Colombia505 and the fact that Panama admits that not all the information required under Article  4.1 
of Decree No.  2218/2017 is always available in an import document.506 Nor does Panama question 
an aspect that Colombia qualifies as necessary, namely that the information be available in advance 
of the arrival of the goods in order to leave time to analyse it and trigger the alerts that may be 
necessary in each case.507  
7.303.   In the light of the foregoing, and focusing on the arguments submitted by Panama, which 
refer to the costs, the rigidity of having to submit documentation one month in advance and the 
availabilit y of the information in other documents, the Panel considers that Panama has failed to 
sufficiently demonstrate the contribution of these documentary and certification requirements to the 
alleged limiting effect of the special import regime. The Panel also  recalls that the existence of 
general requirements for the importation of goods is a routine aspect of international trade, as is 
the existence of special requirements for certain products, for purposes of risk analysis. Even if such 
requirements constitu te additional burdens for the importer, they are part of day -to-day foreign 
trade operations.508 
7.304.   It should be made clear in this respect that the Panel makes no finding in relation to these 
documentary and certification requirements, but confines itself to a nalysing them in the context of 
a broader examination of the special import regime, as challenged by Panama, and its consistency 
                                                
502 Panama 's first written submission as complainant, para.  72; first written submission as respondent, 
para. 65; and comments on Colombia 's response to Panel question No.  48. 
503 Colombia 's first written submission as respondent, paras,  89-91; and second written submission as 
complainant, paras.  75-76.  
504 Colombia 's response to Panel question No.  48 and comments on Panama 's response to Panel 
question No.  48. 
505 See footnote  452 above.  
506 See, for example, paras.  7.289  and 7.296 -7.298  above. 
507 See, for example, Colombia 's second written submission as respondent, para.  133.  
508 Appellate Body Report,  Argentina – Import Measures,  para. 5.217. See also Panel Report, Argentina 
– Import Measures , paras.  6.252 -6.254 (referring to Panel Reports, India – Autos , para. 7.270 and China – 
Raw Materials , para. 7.917).  WT/DS461/RW  
 
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  with Article  XI:1 of the GATT  1994. The Panel will now move on the next element of the special 
import regime.  
7.3.5.2.2   Presence of the importer, its legal representative or the importing company 's 
agent during the customs inspection or examination  (aforo ) of the goods  
7.305.   As described in section  2.3.3.3.1  above, one of the elements of the special import regime 
challenged by Panama consists in the obligation for the importer, its legal representative or the 
importing company 's agent to be prese nt during the customs inspection or examination  of goods 
imported below the thresholds in Article  3 of Decree No.  2218/2017. If they are not present, release 
of the goods will not be admissible or will not be authorized. This requirement is set forth in 
Article 4.2 of Decree No.  2218/2017.  
7.306.   Panama maintains that this requireme nt entails additional costs that are significant and 
recurrent, thus discouraging this type of imports.509 Panama points out that, under the general 
import regime, their presence is only required in cases of physical  examination , and not for the 
examination of documents.510 Panama questions Colombia 's claim that this requirement guarantees 
due process, considering that it is tantamount to admitting that due process is not guaranteed in 
other  import transactions where the presence of the importer, its legal representative or the import 
company 's agent is not required. Panama understands that this requirement and the explanation 
given by Colombia relating to guaranteeing due process are linked to the presence of the local 
observer during the inspection or examination  process.511  
7.307.   Colombia responds that the costs or administrative burdens associated with customs 
formalities do not in themselves constitute prohibited restrictions under Article  XI:1 of the 
GATT  1994, and considers that Panama has not succeeded in demonstrating the restrictive effects 
of this requirement.512 Colombia argues that due process is guaranteed by allowing the importer, its 
legal representative or the importing company 's agent to be present for the customs inspection or 
examination  of the goods and, thus, to observe the implementation of the process, defend their 
position and provide information to the customs authorities, as appropriate. Colombia adds that 
fulfilment of this re quirement enables it to verify that the companies involved in the import 
transaction are not shell companies or companies usurping the identity of other legally incorporated 
companies.513 Colombia indicates that the physical presence of the declarant, which in the majority 
of cases is the importer, is required "since direct participation is permitted in Colombia".514  
7.308.   The Panel observes that Panama bases its entire argument in relation to this requirement 
on the fact that it implies an additional cost in the im port process; a cost which, in its opinion, does 
not serve any purpose given that it is not requested in other import contexts. Colombia, for its part, 
does not deny that this requirement entails a cost, but considers it to be linked to a customs formality  
which is in itself not contrary to Article  XI:1 of the GATT  1994.  
7.309.   The Panel does not find in the record sufficient explanation by Panama as to why and to 
what extent this requirement contributes to the limiting effect of the special import regime. Panama  
merely asserts that this requirement implies a cost, a fact that Colombia does not deny, but does 
not provide the Panel with sufficient evidence to conclude that the cost arising from this requirement 
exerts any limiting effect on importation. In the Pane l's opinion, Panama has failed to sufficiently 
demonstrate the contribution of this requirement to the alleged limiting effect of the special import 
regime. The Panel also recalls that the existence of general requirements for the importation of 
goods is a  routine aspect of international trade, as is the existence of special requirements for certain 
products, for purposes of risk analysis. Even if such requirements constitute additional burdens for 
the importer, they are part of day -to-day foreign trade ope rations. Therefore, the Panel does not 
                                                
509 Panama 's first written submission as complainant, paras.  57-61; and first written submission as 
respondent, para.  60. 
510 Panama 's comments on Colombia 's response to Panel question No.  35 (referring to Article  218 of 
Decree No.  390/2016 (Exhibit  PAN-4)). 
511 Panama 's comments on Colombia 's response to Panel question No.  35. 
512 Colombia 's first written submission as respondent, paras.  85-86 and 92; second written submission 
as complainant, para s. 71-72; and second written submission as respondent, para.  59. 
513 Colombia 's response to Panel question No.  35(a), paras.  189-191. Colombia indicates that cases 
have been reported where the companies entered on the import declaration as  importer are ficti tious or 
non-existent, or importers are named which are not involved in the import process.  
514 Colombia 's response to Panel questions Nos.  35(d) and 35(e), paras.  194-195. WT/DS461/RW  
 
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  consider it necessary to pursue its analysis by examining the parties ' disagreement as to whether 
or not this requirement fulfils the function of guaranteeing due process in the customs inspection or 
examination  of goods imported under the thresholds, as Colombia explains.  
7.310.   It should be made clear in this respect that the Panel makes no finding in relation to this 
requirement, but confines itself to analysing it in the context of a broader examination of the special 
import regime, as challenged by Panama, and its consistency with Article  XI:1 of the GATT  1994. 
The Panel will now move on the next element of the special import regime.  
7.3.5.2.3   Authorized entry controls  
7.311.   As described in section  2.3.3.3.2  above, one of the elements of the special import regime 
challenged by Panama consists in the possibility of Colombia putting in place customs controls on 
the entry of goods imported at prices b elow the thresholds in Article  3 of Decree No.  2218/2017, 
which could lead to establishing measures restricting entry, whenever they are duly justified on the 
basis of the risk management system. This requirement is set forth in Article  5 of Decree 
No. 2218/2017.  
7.312.    Panama maintains that the possibility of establishing "measures restricting entry" 
constitutes a "monitoring" requirement which creates uncertainty regarding the conditions of entry 
of goods and which, when assessed together with the rest of the r equirements in the special import 
regime, discourages importation of the products covered by Decree No.  2218/2017 at prices equal 
to or lower than the thresholds established in that Decree.515  
7.313.   Colombia indicates that the customs controls to which Article  5 of Decree No.  2218/2017 
refers include a set of measures designed to combat money laundering, the financing of terrorism, 
unfair competition and smuggling which are implemented at different stages of the customs control 
process.516 According to Colombia, the  "measures restricting entry" referred to in Article  5 of Decree 
No. 2218/2017 come within the DIAN 's authority to carry out all actions it considers necessary on 
the basis of its risk management criteria, be they controls, authorizations, physical inspect ions and 
documentary examinations for goods that are entering via specified places, laboratory analysis, 
scans, police operations, etc.517 
7.314.   The Panel observes that Panama founds its arguments in respect of this requirement on the 
alleged uncertainty that is created for importers by the possibility of Colombia deploying "measures 
restricting entry" of goods with declared f.o.b. prices below the  thresholds. However, Panama fails 
to explain why and to what extent this possibility contributes to the limiting effect of the special 
import regime. The Panel considers that the mere possibility that a measure restricting entry may 
be adopted, in abstrac to, without further explanation or substantiation, does not constitute a 
sufficiently solid basis to conclude that the requirement creates such uncertainty as to contribute, 
together with the rest of the challenged requirements in the special import regime , to limiting 
imports. Therefore, in the Panel 's opinion, Panama has failed to sufficiently demonstrate the 
contribution of this requirement to the alleged limiting effect of the special import regime .  
7.315.   As with the previous requirements, the Panel makes no  finding in relation to this 
requirement, but confines itself to analysing it in the context of a broader examination of the special 
                                                
515 Panama 's response to Panel question No.  50, and comments on Colombia 's response to Panel 
question No.  36. Specifically, Panama ascribes the uncertainty and lack of predictability to two factors: "the 
conditions of geographical access to the Colombian market, and the transport costs associated with such 
access".  
516 Colombia's response to P anel question No.  37(a), para.  200. By way of example, Colombia mentions 
possible applicable measures such as prior checks (physical or non -intrusive recognition of the goods and 
means of transport entering Colombian customs territory in order to detect go ods that are undeclared or whose 
importation is prohibited); checks during the customs clearance process (physical or documentary inspection in 
order to verify the data contained in customs declarations, the existence and legal requirements of supporting 
documents, the nature of the goods, their description, state, quantity, weight, verification of origin, tariff 
classification and collection of samples, among others); and subsequent checks or inspection (verifications, 
studies, investigations seeking to es tablish customs compliance on the part of foreign trade operators, 
declarants, the accuracy of the data recorded in customs declarations submitted by a declarant during a 
specified period of time) (Ibid. para. 204).  
517 Colombia 's response to Panel question No. 37(b), para.  206. WT/DS461/RW  
 
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  import regime, as challenged by Panama, and its consistency with Article  XI:1 of the GATT  1994. 
The Panel will now move on the next element of the special import regime .  
7.3.5.2.4   Import operations observers  
7.316.   As described in section  2.3.3.3.1  above, one of the elements of the special import regi me 
challenged by Panama consists in the presence of observers from local industry in the process of 
inspection or examination  of goods imported below the price thresholds in Article  3 of Decree 
No. 2218/2017. The role of these observers is to analyse the i nformation provided to them by the 
DIAN518, generate alerts to the customs authority, and observe the implementation of the inspection 
or examination  process. This requirement is set forth in Article  6 of Decree No.  2218/2017.  
7.317.   For Panama, the import operatio ns observer has access to commercially sensitive 
information contained in the import declaration and its  supporting documents, without any measures 
being applied to ensure confidentiality. Also, Panama points out that Colombia has failed to 
demonstrate  that the local observers are present in import operations for clothing, textiles and 
footwear above the price thresholds in Article  3 of Decree No.  2218/2017.519  
7.318.   Colombia indicates that observers are also present for import operations above the 
thresholds and imports of other products apart from those covered by Decree No.  2218/2017.520 
Colombia explains that it is the trade associations which request the presence of observers, and that 
the DIAN is the body responsible for authorizing such presence on the basis o f a list put forward by 
the trade associations to the Joint National Commission on Tax and Customs Management.521 
According to Colombia, the recommendations of these observers are not binding on customs officials 
and the information on import operations that  is provided to the observers is not subject to any 
confidentiality protection mechanism given that in Colombia "the information in customs declarations 
is not subject to the duty of reserve".522  
7.319.   The Panel understands that the role of the import observers i s not exclusive to the special 
import regime instituted by Decree No.  2218/2017, but has existed since before that in the general 
import regime in force.523 Indeed, the role of import observers is mentioned in various provisions of 
Colombian customs legislat ion without restricting their presence to the imports covered by Decree 
No. 2218/2017. For example, Article  4 of Resolution No.  2199/2005 states the following:  
Authorization : The Subdirectorate for External Trade shall, by means of a reasoned 
resolution, authorize Import Operations Observers, indicating the type of goods on 
which they will work, the customs jurisdictions in which they will operate and the period 
of validity of the authorization, on the basis of the lists of eligible officials approved by 
the Joint National Commission on Tax and Customs Management.  
Import Operations Observers may start performing duties within the scope of their 
competence, subject merely to presentation of the authorizing resolution duly 
accrediting them and prior coordinat ion with the respective Customs or Tax and 
Customs Administrator.  
The Observers ' authorization may be cancelled before the term of its period of validity, 
at the request of the trade association, the Joint National Commission on Tax and 
                                                
518 The information that the DIAN provides to the observers:  
[S]hall consist of the entries in the Import Declarations submitted by importers of products under 
tariff headings  61, 62 and 64 of the Customs Tariff, comprising the Form num ber, Tax 
identification number of the importer, Surnames and name or business name of the importer, 
Tax identification number of the declarant, Business name of the authorized declarant, Type of 
declaration, Name of the exporter or foreign supplier, Code o f country of provenance, Exchange 
rate, Tariff subheading, Code of country of origin, Agreement code, Gross weight in kilograms, 
Net weight in kilograms, Physical unit code, Quantity, F.o.b. value in US$, Customs value, Self -
assessment and description of t he goods, Declaration acceptance number and Date.  
(Article 1 of Resolution No.  000017/2017 (Exhibit  COL-46) 
519 Panama 's comments on Colombia 's response to Panel question No.  38. 
520 Colombia 's response to Panel questions Nos.  38(b) and 38(c), paras.  210-211. 
521 Colombia's response to Panel questions Nos.  35(d), para. 212 and 38(e), para.  214. 
522 Colombia 's response to Panel questions Nos.  38(a), para. 209 and 38(f), para.  215. 
523 Decree No.  2685/1999 (Exhibit  PAN-3), Article  74-1 (article added by Decree No.  2373/2004).  WT/DS461/RW  
 
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  Customs Management or the Director -General of the National Customs and Excise 
Directorate , and the cancellation shall be notified to the Observer and to the trade 
association which nominated him/her.524 
7.320.   Article  183 of Decree No.  390/2016, for its part, provides as follows:  
Import and/or export observers . The National Customs and Excise Directorate  may 
allow the presence of observers during the course of the import and/or export 
examination process, at specific authorized points of entry and/or exit, as well as in 
such cases as may be determined by the National Customs and Excise Directorate . 
The observers shall be selected from lists of candidates put forward by the trade 
associations, appro ved by the Joint National Commission on Tax and Customs 
Management (or whichever service is acting on its behalf).  
The observer 's duties shall be confined to closely observing the implementation of the 
process of examination  of a specified type of goods. T he customs aut hority must 
safeguard the legal  confidentiality of information, taking into account the terms of 
Article  497 of this Decree, and observers shall be given such access to information as 
may be determined by the National Customs and Excise Direc torate . 
The observer shall provide collaboration and cooperation required by the customs 
authority, including the technical report where appropriate, on the tariff classification, 
description, identification, quantity, weight and price of the goods, among other 
aspects.  
The National Customs and Excise Directorate  shall regulate the requirements governing 
participation in this process.525 
7.321.   The Panel considers this point to be relevant, in that Panama, in arguing its claim as to the 
restrictive nature of the sp ecial import regime, draws numerous comparisons with the general 
customs regime. In this connection, from the evidence submitted, the role of import observers is 
also framed within the general regime.  
7.322.   In any event, even if the presence of the import obser ver were confined to the imports 
covered by Decree No.  2218/2017, Panama has failed to explain how such presence during the 
process of inspection or examination of the goods and the fact that the observers have access to 
certain information relating to imp ort operations within their area of operation might prompt the 
Panel to find the special import regime to have a limiting effect. Therefore, in the Panel 's opinion, 
Panama has failed to sufficiently demonstrate the contribution of this requirement to the a lleged 
limiting effect of the special import regime.  
7.323.   As with the previous requirements, the Panel makes no finding in relation to this 
requirement, but confines itself to analysing it in the context of a broader examination of the special 
import regime, a s challenged by Panama, and its consistency with Article  XI:1 of the GATT  1994. 
The Panel will now move on the next element of the special import  regime.  
7.3.5.2.5   Incorporation of information on certain import operations in the risk 
management system  
7.324.   As described i n section  2.3.3.3  above, one of the elements of the special import regime 
challenged by Panama consists in the incorporation in the risk management system of impor t 
operations for goods under the headings listed in Article  3 of Decree No.  2218/2017 at prices lower 
than or equal to the threshold in that article. This requirement is s et forth in Article 8 of 
Decree  No. 2218/2017.  
7.325.   Panama points out that the act of impo rting certain products at competitive prices 
stigmatizes the importers of those products since their risk profile and rating are affected even 
                                                
524 Resolution No.  2199/2005 (Exhibit  PAN-63). 
525 Decree No.  390/2016 (Exhibit  PAN-4). WT/DS461/RW  
 
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  though the imports in question are not being underinvoiced or serving as a means of money 
laundering.526  
7.326.   Colombia explains that the information incorporated in the risk management system is based 
on the information contained in the import declarations and alerts.527 According to Colombia, the 
consequences of being part of the system relate to the foreign trade operators ' risk profiles and 
ratings.528 
7.327.    The Panel does not find in the record any explanation by Panama as to why the incorporation 
of information on certain import operations in the risk management system contributes to the 
limiting effect of the special import re gime. Nor does it find evidence allowing it to reach any 
conclusion in that regard or indicating what effects on the risk profile and rating are associated with 
incorporation in the risk management system. Panama does not adduce arguments or evidence of 
the alleged "stigma" attached to importers of goods at declared f.o.b. prices below the thresholds, 
nor of the limiting effects of this stigma on importation. Moreover, it is usual for customs 
administrations of the Members to feed their databases with infor mation on import operations, for 
the purposes of risk analysis. Therefore, in the Panel 's opinion, Panama has failed to sufficiently 
demonstrate the contribution of this requirement to the alleged limiting effect of the special import 
regime.  
7.328.   As with the p revious requirements, the Panel makes no finding in relation to this 
requirement, but confines itself to analysing it in the context of a broader examination of the special 
import regime, as challenged by Panama, and its consistency with Article  XI:1 of th e GATT  1994. 
The Panel will now move on the next element of the special import  regime.  
7.3.5.2.6   Specific bond  
7.329.   A final element identified by Panama as being an integral part of the special import regime 
is the specific bond provided for in Article  7 of Decree No.  2218/2017. Unlike the other elements of 
the special import regime, Panama has challenged the specific bond separately. The Panel recalls 
that, after examining the latter claim in detail in section  7.3.4 above, the Panel found that Panama 
had failed to make a prima facie case that the specific bond provided for in Article  7 of Decree 
No. 2218/2017 is inconsistent with Article  XI:1 of the GATT  1994. Therefore, as it has not been 
demonstrated that the requirement to post a specific bond has limiting effects on imports, the Panel 
does not consider it necessary to examine this requirement anew with a view to determining whether 
it contributes to the alleged limiting effe cts of the special import regime.  
7.3.5.2.7   Consequences of non -compliance with certain requirements provided for in 
Decree  No. 2218/2017  
7.330.   As previously mentioned, the special import regime contains provisions on reshipment 
(Article  9 of Decree  No. 2218/2017) and sei zure and confiscation (Article  10 of Decree 
No. 2218/2017) of the imported goods. These provisions govern the consequences of failure to 
comply with certain requirements provided for in Decree No.  2218/2017.529 More specifically, 
Article  9 stipulates that no n-compliance with the requirements of Article  4 of Decree No.  2218/2017 
results in prohibition of reshipment of the imported goods. Similarl y, Article  10 provides that 
non-compliance with one or other of the requirements of Decree No.  2218/2017 results in seizure 
of the goods, which may not under any circumstances be legalized or retrieved.  
7.331.   Panama claims that the consequences of failing to comply with certain requirements, such 
as not allowing reshipment of the goods, are disproportionate. Panama further em phasizes that 
mere failure to comply with one or more of the requirements of Decree No.  2218/2017 does not turn 
the import transactions in question into illicit transactions and that, even so, they are subjected to 
measures such as prohibition of reshipmen t of the goods.  
7.332.   Colombia, for its part, explains that the prohibition of reshipment only applies to imports 
below the price thresholds in Article  3 of Decree No.  2218/2017 which have failed to meet any of 
                                                
526 Panama 's comments on Colombia 's response to Panel question No.  39. 
527 Colombia 's response to Panel question No.  39(a), para.  216. 
528 Colombia's response to Panel question No.  39(b), para.  218. 
529 Decree  No. 2218/2017 ( Exhibit  PAN-43). WT/DS461/RW  
 
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  the requirements set forth in that Decree. Accordi ng to Colombia, this requirement responds to some 
high-risk importers' practice of asking for extensions of storage periods and making requests for 
reshipment so that, once approved, the goods enter Colombia through other ports. Colombia 
considers that the  prohibition of reshipment does not limit the quantities or volumes of imported 
goods, but constitutes a sanction provided for in Colombian customs law to deal with fraudulent 
practices.530  
7.333.   The Panel notes that the wording of Articles  9 and 10 of Decree No.  2218/2017 appears to 
leave little room for doubt as to the consequences of non -compliance with certain requirements: 
(a) no reshipment of goods with declared f.o.b. prices below the thresholds which do not meet the 
documentary and certification requiremen ts provided for in Article  4 of the Decree (Article 9); and 
(b) goods with declared f.o.b. prices below the thresholds which do not meet the requirements 
provided for in Decree No.  2218/2017 will be seized (without any possibility of subsequent 
legalizatio n or retrieval).  
7.334.   The parties appear to differ on whether it is possible to amend or correct non -compliance.531 
It can be inferred from Colombia 's responses that, in the event of non -compliance with the 
documentary and certification requirements: (a)  correcti ons may be made to the documentation 
submitted to the customs authorities pursuant to Decrees  No. 2685/1999 and No.  390/2016532; and 
(b) there can be no rectification of errors pertaining to documentation not submitted or submitted 
outside the deadline; this  results in the non -admissibility or non -authorization of release, and the 
goods consequently remain in a state of legal abandonment.533 
7.335.   In cases of legal abandonment of goods, the Panel notes that the general regime established 
in Decrees No.  2685/1999 and No. 390/2016 provides for the possibility of retrieving them by 
submitting a declaration of legalization.534 If the deadline for retrieval passes without a declaration 
of legalization having been submitted, the DIAN may dispose of the goods, which become 
government property.535 
7.336.   Analysing Colombia 's customs legislation submitted by the parties and, in particular, Decrees 
No. 2685/1999  and No. 390/2016, the Panel notes that Colombia has regulated other situations, 
beyond those provided for in Decree No.  2218/2017 , in which imported goods are not reshipped or 
retrieved.536  
7.337.   Panama 's principal claim refers to the lack of proportionality between the prescribed 
penalties (no reshipment, legalization or retrieval of seized goods) and the infringements that give 
rise to those penalties, which, according to Panama, may be very minor and e asy to deal with, for 
example, a missing document relating to the import transaction or late presentation thereof.  
7.338.   Leaving aside the fact that, contrary to what Panama has claimed, small errors can be 
corrected, in the Panel 's opinion the severity of puni shments for failure to comply with domestic law 
is a prerogative of governments, and all importers have to know that they may face possible 
sanctions if they fail to comply with particular customs obligations. The sanctions laid down in the 
legislation of the WTO Members are not identical. In fact, in some countries customs fraud is 
punishable by imprisonment; while in others, the punishment may take the form of monetary 
penalties or other mechanisms. Thus, it is not the Panel 's place to dictate to Colombia  what type of 
punishment should be included in its legislation.  
                                                
530 See para.  2.45 above.  
531 In its response to Panel question No.  33 and its additional written submission relating to Decree 
No. 2218/2017, Colombia asserts that documentation may indeed be corrected or supplemented ("certain kind 
of minor errors in the import docu ments") pursuant to Article  234 of Decree No.  2685/1999 (Exhibit PAN -3). 
Panama asserts that it is not possible to make corrections (Panama 's first written submission as complainant, 
paras.  62-68; second written submission as complainant, paras.  150-158; a nd second written submission as 
respondent, paras.  268-269 and 337 -338).  
532 Colombia 's response to Panel question No.  33, para.  182. 
533 Colombia 's response to Panel question No.  34, paras.  183-184. 
534 Decree No.  2685/1999 (Exhibit  PAN-3), Article  115, para.  1 and Article  231. 
535 Decree No.  2685/1999 (Exhibit  PAN-3), Article  115, para.  1 and Decree No.  390/2016 
(Exhibit  PAN-4), Article  211. 
536 Decree No.  390/2016 (Exhibit  PAN-4), Articles  140 and 229. WT/DS461/RW  
 
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  7.339.   In any event, the Panel does not find in the record sufficient factual elements to allow it to 
enter into an assessment of the proportionality of the penalties in relation to the events that trigger 
them. Nor does it find any explanation from Panama of the extent to which the existence of these 
penalties contributes to the limiting effect on importation of the special import regime. What is more, 
the Panel considers that the establishment of p enalties is usually geared primarily to discouraging 
non-compliance with certain rules. While it undoubtedly cannot be ruled out that a very strict penalty 
regime might create such rigidity as to ultimately discourage imports, the Panel considers that 
Panama has failed to present arguments or sufficient evidence to allow it to conclude that the 
provisions relating to reshipment (Article  9) and seizure and confiscation (Article  10) contribute to 
the special import regime exerting limiting effects on imports.  
7.340.   Therefore, in the Panel 's opinion, Panama has failed to sufficiently demonstrate the 
contribution of these penalties to the alleged limiting effect of the special import regime.  
7.341.   As in the previous cases, the Panel makes no finding in relation to the cons equences of 
non-compliance, but confines itself to analysing it in the context of a broader examination of the 
special import regime, as challenged by Panama, and its consistency with Article  XI:1 of the 
GATT  1994. The Panel will now move on the next eleme nt of the special import  regime.  
7.3.5.2.8   Collective assessment of the elements of the special import regime challenged 
by Panama  
7.342.   In the previous sections, the Panel has analysed separately each of the different elements 
of the special import regime challenged by Panama: the documentary and certification requirements; 
the presence of the importer, its legal representative or the importing company 's agent during the 
customs inspection or examination  of the goods; entry controls; the presence of observers from 
local industry during the process of inspection or examination of the goods; the incorporation of 
information on certain import transactions in the risk management system; the specific bond; and, 
in addition, the sanctions relating to reshipment and seizure and confiscation.  
7.343.   The Panel recalls that if an import formality or requirement does not itself limit the 
importation of products independently of the limiting effects of another restriction, then that import 
formality or requirement cannot be said to produce t he limiting effect and, thus, it will not amount 
to a "restriction" captured by the prohibition in Article  XI:1.537  
7.344.   In all cases, the Panel has taken the view that Panama has failed to sufficiently demonstrate 
how these elements contributed to the alleged l imiting effect on imports of the special import regime. 
When it comes to examining the elements collectively, the Panel again considers that Panama has 
failed to submit sufficient arguments or evidence to explain why it considers that the interaction of 
all the elements of the special import regime identified results in an import regime that has limiting 
effects on imports.  
7.3.5.3   Conclusion  
7.345.   Having examined the set of claims submitted by Panama to substantiate that the special 
import regime is inconsistent with Ar ticle XI:1 of the GATT  1994, the Panel considers that Panama 
has failed to present sufficient arguments and documentary evidence to allow it to reach a finding 
that the special import regime comprising the elements described in Articles  4 to 10 of Decree 
No. 2218/2017 has limiting effects on imports.  
7.346.   For the reasons set out above, the Panel concludes that Panama has failed to demonstrate 
that the special import regime provided for in Articles  4 to 10 of Decree No. 2218/2017 has limiting 
effects on imports i n a manner inconsistent with Article  XI:1 of the GATT  1994. 
                                                
537 Appellate Body Report, Argentina – Import Measures,  para. 5.244.  WT/DS461/RW  
 
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  7.4  Panama's claims under Article X:3(a) of the GATT 1994  
7.4.1   Introduction  
7.347.   Panama claims that both the specific bond and the special import regime are not 
administered in a uniform, impartial and reasonable manner, so that these measures are inconsistent 
with Article X:3(a) of the GATT 1994.538 Colombia replies that Panama has failed to demonstrate 
that Colombia administers a legal instrument described in Article X:1 of the GATT  1994 in a 
non-uniform , partial or unreasonable manner.539 
7.348.   The Panel will begin by examining the relevant legal provision and the applicable legal 
standard. It will go on to clarify the scope of Panama's claims under this provision. It will then 
analyse Panama's claims with respe ct to the specific bond, beginning with a summary of the 
arguments of the parties and continuing with a legal analysis of each of the aspects challenged by 
Panama. Finally, it will examine Panama's claims with respect to the special import regime, likewise  
beginning with a summary of the arguments of the parties and continuing with an analysis of each 
of the aspects challenged by Panama.  
7.4.2   The text of Article X:3(a) of the GATT 1994  
7.349.   Article X:3(a) of the GATT 1994 provides in relevant part:  
Publication and Administration of Trade Regulations  
3.(a) Each contracting party shall administer in a uniform, impartial and reasonable 
manner all its laws, regulations, decisions and rulings of the kind described in 
paragraph  1 of this Article.  
7.350.   This provision obliges Me mbers to administer in a uniform, impartial and reasonable manner 
a series of legal instruments as defined in Article X:1 of the GATT 1994. This obligation relates to 
"certain minimum standards for transparency and procedural fairness in the administration  of trade 
regulations…".540 Hence, allegations of violation of this provision are serious and "should not be 
brought lightly, or in a subsidiary fashion".541 
7.4.3   The legal standard provided for in Article X:3(a) of the GATT 1994  
7.351.   In the Panel's opinion, in order to  substantiate a claim of inconsistency with Article X:3(a) 
of the GATT 1994, the complaining party must demonstrate th e following three elements: 
(a) existence of a legal instrument of the kind described in Article X:1 of the GATT 1994; (b) that 
the legal instrument in question is being administered by the respondent; and (c) that the 
administration of that legal instrument by the respondent is not uniform, impartial or reasonable. In 
fact, as is explained in paragraph 7.359 below, it would be sufficient to  prove that the legal 
instrument is not administered in any of the three manners (uniformly, impartially or reasonably) to 
reach a conclusion of inconsistency with this provision. The Panel reviews below each of the 
three  elements mentioned.  
7.4.3.1   The question of whether the legal instrument identified by the complainant is of 
the kind described in Article X:1 of the GATT 1994  
7.352.   The first step in the Panel's analysis centres on establishing whether the complainant has 
identified a law, regulation, judicial decisio n or administrative ruling of the kind referred to in 
Article X:1 of the GATT 1994. This provision refers to "[l]aws, regulations, judicial decisions and 
administrative rulings of general application, made effective by any [Member], pertaining to the 
classification or the valuation of products for customs purposes, or to rates of duty, taxes or other 
charges, or to requirements, restrictions or prohibitions on imports or exports or on the transfer of 
payments therefor, or affecting their sale, distribution,  transportation, insurance, warehousing 
                                                
538 Panama's request for the establishment of a Panel, WT/DS461/22.  
539 Colombia's second written submission as complainant, para. 89; and second written submission as 
respondent, para. 82.  
540 Appellate Body Report, US – Shrimp , para. 183.  
541 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 217.  WT/DS461/RW  
 
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  inspection, exhibition, processing, mixing or other use", and to "[a]greements affecting international 
trade policy which are in force between the government or a governmental agency of [a Member] 
and the government or governmental agency of [another Member]".  
7.353.   The phrase "laws, regulations, judicial decisions and administrative rulings" reflects an 
intention on the part of the drafters to include a wide range of measures that have the potential to 
affect trade and tra ders. The instruments covered by Article X:1 of the GATT 1994 range from 
imperative rules of conduct to the exercise of influence or an authoritative pronouncement by certain 
authoritative bodies, and the coverage of Article X:1 of the GATT 1994 therefore extends to 
instruments with a degree of authoritativeness issued by certain legislative, administrative or judicial 
bodies.542 
7.4.3.2   The question of whether the legal instrument identified by the complainant is 
being "administered" by the respondent  
7.354.   If the examina tion under the first step reveals that the legal instrument identified by the 
complainant is of the kind described in Article X:1 of the GATT 1994, the Panel would be called upon 
to consider whether the complainant has demonstrated that the legal instrumen t in question is being 
"administered" by the respondent.  
7.355.   It is important to emphasize that the obligation in Article X:3(a) of the GATT 1994 refers to 
the "administration "543 of the rules identified by the complainant, rather than to their substantive 
conten t.544 Therefore, the requirements of uniformity, impartiality and reasonableness do not relate 
to the laws, regulations, judicial decisions and administrative rulings themselves, but rather to the 
administration of those laws, regulations, decisions and ruli ngs.545 
7.356.   Although normally the administration of a legal instrument is revealed by the way in which 
it is put into practice by the relevant authorities, there are occasions where the legal instrument 
concerned is administered by means of another legal instrum ent. In that case it is  necessary to 
distinguish between the legal instrument being administered and the legal instrument that regulates 
the application or implementation of that instrument. While the substantive content of the legal 
instrument being admin istered is not challengeable under Article X:3(a), it is possible to challenge 
the legal instrument that regulates the application or implementation of the legal instrument being 
administered, if it is alleged that the legal instrument regulating such appl ication or implementation 
leads to a lack of uniform, impartial or reasonable administration of the legal instrument being 
administered.546 
7.357.   Accordingly, it is possible to challenge a legal instrument as such  under Article X:3(a) of the 
GATT 1994, when the su bstantive content of that legal instrument regulates the application or 
implementation of  rules covered by Article X:1 of the GATT 1994. In order to prove that the legal 
instrument identified is inconsistent as such  with Article X:3(a) of the GATT 1994, t he complainant 
must demonstrate that the provisions of that legal instrument necessarily lead  to a lack of uniform, 
impartial, or reasonable administration. For that purpose, it would not be sufficient for the 
complainant to merely to cite the provisions o f the legal instrument identified; rather, it must 
discharge the burden of substantiating how and why those provisions necessarily lead to 
impermissible administration of the legal instrument of the kind descr ibed in Article X:1 of the 
GATT  1994.547 
7.358.   The admi nistrative processes that govern the application of  legal instruments of the kind 
described in Article X:1 of the GATT 1994 may constitute relevant evidence for establishing whether 
a legal instrument is administered in a manner consistent with Article X:3 (a) of the GATT 1994.548 
Likewise, Article X:3(a) may cover violation claims based on an administrative process. In such 
                                                
542 Panel Reports, EC – IT Products , paras. 7.1026 -7.1027.  
543 The Panel observes that, whereas the Spanish text of Article X:3(a) of the GATT 1994 uses the term 
"aplicará", the t erm "shall administer" is used in the English text and the term "appliquera" is used in the 
French text.  
544 Appellate Body Report, EC – Poultry , para. 115. See also Appellate Body Report, EC – Selected 
Customs Matters , para. 219.  
545 Appellate Body Reports, EC – Bananas III , para. 200 and EC – Selected Customs Matters , para. 219.  
546 Appellate Body Report, EC – Selected Customs Matters , paras.  200-201. 
547 Idem.  
548 Appellate Body Report, EC – Selected Customs Matters , para. 225.  WT/DS461/RW  
 
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  cases, and similarly to when a legal instrument is challenged as such , it is not sufficient that the 
complainant merely recites the featu res of the administrative process. The complainant will also 
have to show how and why those features necessarily lead  to impermissible administration of the 
legal instrument of the kind described in Article X:1 of the GATT 1994.549 
7.4.3.3   The question of whether th e legal instrument identified by the complainant is not 
being administered in a uniform, impartial or reasonable manner by the respondent  
7.359.   If the second stage review reveals that the complainant has shown that the legal instrument 
in question is being "admi nistered" by the respondent, the Panel would be called upon to examine 
whether the complainant has shown that the administration by the respondent of the legal 
instrument identified by the complainant is not uniform, impartial or reasonable. The Panel agre es 
with previous panels that the requirements of uniformity, impartiality and reasonableness are legally 
independent and that the administration of the relevant rules must satisfy each and every one of 
these criteria.550 This means that it would be sufficien t that the complainant demonstrate that the 
administration of the legal instrument is not uniform or impartial or reasonable, in order for the 
Panel to be required to find that the instrument is inconsistent with Article X:3(a) of the GATT 1994.  
7.360.   With regar d to the requirement of uniform administration , the Panel observes that the term 
"uniform" is defined as "of one unchanging form, character, or kind; that is or stays the same in 
different places or circumstances, or at different times".551 The Panel agrees with previous panels 
that this requirement of uniform administration relates to "uniformity of treatment in respect of 
persons similarly situated"552 and to the fact that "their laws are applied consistently and 
predictably".553 
7.361.   With regard to the requirement of impartial administration , the term "impartial" is defined 
as "not favouring one party or side more than another; unprejudiced, unbiased; fair".554 The Panel 
agrees with previous panels in considering that this requirement of  impartial administration relates 
to an "application or implementation of the relevant laws and regulations in a fair, unbiased and 
unprejudiced manner".555, 556 
7.362.   Lastly, with respect to the requirement of reasonable administration , the Panel observes that 
the term "reasonable" is defined as "in accordance with reason", "not irrational or absurd", 
"proportionate", "sensible", "not asking for too much", "within the limits of reason, not greatly less 
or more than might be thought likely or appropriate" and "articu late".557 The Panel agrees with 
previous panels in considering that this requirement of reasonable administration relates to 
"administration that is equitable, appropriate for the circumstances and based on rationality".558 The 
analysis of a claim of violation  of the requirement of reasonableness entails a consideration of the 
factual circumstances specific to each case, for which purpose it is necessary to examine the features 
of the administrative act at issue, in the light of its objective, cause or the rati onale behind it.559 
7.4.4   Preliminary issue  
7.363.   Before beginning the analysis of Panama's claims under Article X:3(a) of the GATT 1994 with 
respect to the specific bond and the special import regime, the Panel needs to clarify the scope of 
                                                
549 Ibid. para. 226.  
550 Panel Report, Argentina – Hides and Leather , para. 11.86.  
551 Panel Report, US – COOL , para. 7.876 (referring to The Shorter Oxford English Dictionary  
(Sixth  Edition), Oxford University Press, Vol. II, p. 3440  (2007) ). 
552 Panel Rreport, US – Stainless Steel (Korea) , 6.51.  
553 Panel Report, Argentina – Hides and Leather , para. 11.83. See also Panel report, US – COOL , 
para. 7.876.  
554 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.899 (referring to The New Shorter Oxford 
Dictionary  (Fifth Edition), Oxford University Press, Vol. I, page 1325 (2002) ). 
555 Panel Report, Thailand – Cigarettes (Philippines), para. 7.899.  
556 Panel Report, China – Raw Materials, para. 7.694 . (The Appellate Body declared the Panel's analysis 
moot and of no legal effect on procedural grounds .) 
557 Panel Report, Dominican Republic – Import and Sale of Cigarettes , para. 7.385 (referring to The New 
Shorter Oxford English Dictionary  (Fifth Edition), Oxford University Press, Vol. II, page 2496 (2002)) . 
558 Panel Reports, China – Raw Materials , para. 7.696. (The Appellate Body declared the Panel's analysis 
moot and of no legal effect on procedural grounds.)  
559 Panel Report, US – COOL , para. 7.851.  WT/DS461/RW  
 
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  those claims. Colombia reque sts the Panel to reject Panama's claims under this provision because 
the measure which, according to Panama, is being administered does not fall within the Panel's 
terms of reference, as it is not mentioned in any of the panel requests and is not a measure  taken 
to comply with the recommendations and rulings of the DSB stemming from the original 
proceedings.560 
7.364.   The Panel will begin by examining Panama's Panel request, in which it puts forward its claims 
under Article  X:3(a) of the GATT 1994 in the following m anner:  
(iii) Insofar as the security for release of the goods is not applied in a uniform, impartial 
and reasonable manner, this measure is inconsistent with Article  X:3(a) of the 
GATT  1994.  
… 
(iii) Insofar as the customs and tariff regime applicable to go ods whose prices are less 
than or equal to the thresholds established by Colombia is not applied in a uniform, 
impartial and reasonable manner, this measure is inconsistent with Article  X:3(a) of the 
GATT 1994.  
7.365.    Panama is therefore apparently challenging t he consistency of the specific bond and the 
special import regime with Article  X:3(a), because they are allegedly not administered in a uniform, 
impartial and reasonable manner.  
7.366.   In its written submissions, Panama has defined its claims differently: Panama asserts that 
Colombia's general customs legislation is contained in Decrees No.  2685/1999 and No.  390/2016, 
and that Decree No.  390/2016 is administered by means of Decrees No.  1745/2016 and 
No. 2218/2017 in a manner that is not uniform, not impartial and not reasonable.561 Together with 
this new configuration of its claims, Panama still includes arguments in which the challenged 
administration is that of the specific bond and the special import regime.  
7.367.   In the Panel's opinion, the change of language used by P anama when arguing that the 
administration of Decree No.  390/2016 by Decrees No.  1745/2016 and No.  2218/2017 is 
inconsistent with Article  X:3(a) transforms the nature of the claim, since it no longer appears to be 
speaking of the administration as such of the specific bond and the special import regime  in 
accordance with the language of the panel request.  
7.368.   The Panel recalls that there is a close link between the terms of reference of a panel and the 
request for its establishment submitted by the complaining party. Article  6.2 of the DSU provides, 
in relevant part, that panel requests shall "identify the specific measures at issue and provide a brief 
summary of the legal basis of the complaint sufficient to present the problem clearly".562 Taken 
together, the sp ecific measures at issue and the claims constitute the "matter referred to the DSB", 
which is the basis for the terms of reference of panels under Article  7.1 of the DSU.563 Fulfilment of 
these requirements "is not a mere formality"564, so that errors in the p anel request cannot be "cured" 
                                                
560 Colombia's additional written submission, paras.  30-31 and 94; opening statement as complainant at 
the meeting o f the Panel, paras.  17-18; and opening statement as respondent at the  meeting of the Panel, 
para. 45. 
561 Panama's first written submission as respondent, paras.  76-78; second written submission as 
complainant, paras.  271-273; second written submission as re spondent, p ara. 301; and response to 
Panel  question No.  63. 
562 The legal basis governing the panel request is Article  6.2 of the DSU. As outlined by the Appellate 
Body in China – Raw Materials , Article  6.2 serves a "pivotal function" in WTO dispute settlement and sets out 
"two key requirements" that a complainant must satisfy in its panel request, namely: (a) the identification of 
the specific measures at issue; and (b) the provision of a brief  summary of the legal basis of the complaint, 
i.e. the claims, sufficient to present the problem clearly. (Appellate Body Reports, China – Raw Materials , 
para. 219.) In particular, the Appellate Body holds that the "matter" referred to the Panel consists o f 
two elements: (a) the specific measures at issue; (b) the legal basis of the complaint (or the claims). 
(Appellate Body Report, Guatemala – Cement  I, para.  72.) 
563 Appellate Body Reports, Guatemala – Cement  I, para.  72; US – Carbon Steel , para.  125; and  
US – Continued Zeroing , para.  160. 
564 Appellate Body Reports, China – Raw Materials , paras.  219-220 and 233 (referring to Appellate Body 
Reports, Brazil – Desiccated Coconut , p. 25; US – Carbon Steel , paras.  125-126; Australia – Apples , para.  416; WT/DS461/RW  
 
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  subsequently and, therefore, the measures not identified and claims not included or included 
deficiently in the panel request cannot be the subject of consideration by the Panel.565 
7.369.   In this case, the Panel concludes that Panama 's claim that Decree No.  390/2016 is applied 
in a manner inconsistent with Article  X:3(a) of the GATT 1994 through Decree No.  2218/2017 does 
not fall within the Panel's terms of reference. Therefore, the Panel will limit its analysis to the claims 
made by Panama under Article  X:3(a) of the GATT 1994, as defined in its panel request.  
7.370.   The Panel now turns to consider the question of whether, as Panama alleges, the 
administration of the specific bond is inconsistent with Article  X:3(a) of the GATT 1994.  
7.4.5   The que stion of whether the administration of the specific bond is inconsistent with 
Article X:3(a) of the GATT 1994  
7.4.5.1   Arguments of the parties  
7.4.5.1.1   Panama  
7.371.   Panama claims that the specific bond requirement is not administered by Colombia in a 
uniform, impartial and reaso nable manner in accordance with Article X:3(a) of the GATT 1994.566 
7.372.   Panama asserts that Colombia's general customs legislation is contained in Decrees 
No. 2685/1999 and No. 390/2016, and that Decree No. 1745/2016567 is a special rule within 
Colombian customs l egislation, which establishes specific requirements for imports of textiles and 
footwear under headings 61, 62 and 64, with prices equal to or below the established thresholds. 
Panama indicates that it is challenging Decree No. 1745/2016 as a legal instrum ent that governs 
the administration of the specific bond requirement, but not the requirement of the bond as such.568 
7.373.   Panama argues, more specifically, that Article 8 of Decree No. 390/2016 is administered by 
Decrees No. 1745/2016 and No. 2218/2017. Panama c ontends that Decree No. 390/2016 is the Tax 
Statute of Colombia and is therefore a regulation of general application covered by Article X:1 of the 
GATT 1994. Panama states that Decree No. 390/2016 establishes the guidelines that are to govern 
the interacti on between the customs administration and the interested parties in the import and 
                                                
Guatemal a – Cement  I, paras.  72-73; US – Continued Zeroing , para.  160; US – Zeroing (Japan) (Article  21.5 – 
Japan) , para.  107; and EC and certain member States – Large Civil Aircraft , para.  786.)  
565 Although defects in the panel request cannot be "cured" in the par ties' subsequent submissions, 
these submissions, and in particular the first written submission of the complainant, can be consulted to 
confirm the meaning of the terms used in the panel request. (Appellate Body Reports, China – Raw Materials , 
para. 220 (r eferring to Appellate Body Report, EC – Fasteners (China) , para.  562, referring in turn to 
Appellate  Body Reports,  EC and certain member States – Large Civil Aircraft , para.  642; EC – Bananas III , 
para. 143; and US – Carbon Steel , para.  127)) . 
566 Panama's f irst written submission as respondent, para. 76; second written submission as 
complainant, para. 271; second written submission as respondent, para. 335; and opening statement at the 
meeting of the Panel, para. 20.  
567 The Panel notes that in Panama's first written submission as complainant, its first written submission 
as respondent, and its second written submission as complainant, Panama refers to Decree No. 1745/2016. 
After submitting Decree No. 2218/2017 as Exhibit PAN -43, Panama begins referring to that  Decree. In this 
connection, Panama explained in paragraph 11 of its second written submission as respondent that "[f]or the 
sake of simplicity, Panama refers in a general manner in this rebuttal to the "specific bond" or the 
"special  import regime", on th e understanding that these are the same measures as are contained in 
Decrees  No. 1745 and No. 2218. Any reference it may make to a measure of the specific decree (i.e. the 
specific bond of Decree No. 2218) is normally made to highlight specific aspects ste mming from that decree." 
This summary of arguments uses the form in which Panama set forth its arguments, so that reference is at 
times made solely to Decree No. 1745/2016, these being arguments presented prior to the submission of 
Decree No. 2218/2017. Ho wever, the foregoing is without prejudice to the fact that arguments expressly 
referring to Decree No. 1745/2016 could also be applicable to Decree No. 2118/2017. Where that is the case, 
the Panel will address those arguments in its analysis concerning Dec ree No. 2218/2017.  
568 Panama's first written submission as respondent, paras. 76 -78; and second written submission as 
complainant, paras. 271 -273. WT/DS461/RW  
 
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  export of goods in Colombia, for which reason the way in which the customs administration handles 
this interaction is a matter of application of the Customs Statute.569 
7.374.   Panama  argues that, in the context of the general provisions of the Customs Statute, 
Article  8 of Decree No. 390/2016 establishes the so -called guarantee mechanism as an accessory 
obligation to the customs obligation, to ensure payment of duties and taxes, penal ties and interest 
deriving from the failure to comply with a customs obligation.570 Panama points out that the same 
rule does not stipulate how the guarantee is to be applied, but entrusts that function to the DIAN, 
so that any act prescribing the type of gu arantee that is to be posted is an act of administration of 
the Customs Statute.571 
7.375.   Panama adds that these decisions, which in normal circumstances should be the subject of 
discretionary application, on a case -by-case basis, by the DIAN, are now taken a prio ri by 
Decrees  No. 1745/2016 and No. 2218/2017. Panama points out that Article 7 of both Decrees gives 
practical effect to Article 8 of Decree No. 390/2016, by specifying the type of guarantee that must 
be posted in respect of imports covered by these decre es in order to ensure payment of any duties 
and taxes, penalties and interest that may apply, as a consequence of non -compliance with the 
obligations and responsibilities set out in Colombia's Customs Statute.572 
7.376.   Panama argues that, in any case, if the Panel  were to consider that Decrees No.  1745/2016 
and No. 2218/2017 are not of the nature of acts administering Article 8 of Decree  No. 390/2016, 
this would mean that Decrees No. 1745/2016 and No. 2218/2017 would impose a substantive 
requirement (i.e. posting o f a specific bond for relevant imports) and, at the same time, the specific 
parameters for its administration (i.e. the requirement that the specific bond be provided by a 
banking entity or insurance company; and that it be valid for three years; and the a mount of 
coverage). Panama considers that the fact that the substantive requirement and the parameters for 
its administration are in the same instrument should not affect the applicability of Article X:3(a) to 
Decrees No. 1745/216 and No. 2218/2017. Panama  adds that the application of Articles XI:1 and 
X:3(a) of the GATT 1994 is not mutually exclusive.573 
7.377.   Panama contends that there are two levels of administration of Article 8 of Decree 
No. 390/2016: a first level of administration, which concerns the determi nation and regulation of 
the kind of guarantee that must be posted, i.e., the specific bond; and a second level of 
administration which concerns the administrative processes and specific procedures for obtaining 
the specific bond, which is delegated to thi rd parties (banks or insurance companies).574 
7.378.   With regard to the first level of administration,  Panama alleges first of all, that the specific 
bond requirement is not administered in a uniform manner, since it applies solely to textiles and 
footwear of headi ngs 61, 62 and 64 with prices equal to or lower than the thresholds established in 
Article 3 of Decree No. 1745/2016, and not to imports of other products in a similar situation, such 
as spirits and cigarettes. Panama considers that, in order to administer  the specific bond requirement 
uniformly, the importation of all products in a similar situation, namely those that can be used by 
criminal organizations that engage in customs fraud, should be made subject to the same 
requirement. Panama argues that it wo uld appear that the only reason why Colombia does not apply 
the specific bond requirement to imports of these other products is because the measure at issue 
was designed to address the needs of the beneficiary industrial sectors.575 
                                                
569 Panama's second written submission as respondent, para. 301, and response to 
Panel  question  No. 63. 
570 Panama 's second written submission as respondent, para. 302, and response to 
Panel  question  No. 63. 
571 Panama's second written submission as respondent, para. 303, and response to 
Panel  question  No. 63. 
572 Panama's second written submission as respondent, paras. 3 04-305; and response to Panel question 
No. 63.  
573 Panama's second written submission as respondent, paras. 306 -308; and response to Panel question 
No. 63.  
574 Panama's second written submission as respondent, para. 309.  
575 Panama's first written submission as respondent, paras. 80 -83; second written submission as 
complainant, paras. 275 -278; second written submission as respondent, paras. 312 -313; and opening 
statement at the meeting of the Panel, para. 21.  WT/DS461/RW  
 
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  7.379.   Panama also alleges a lac k of uniform administration, since the coverage of the specific bond 
does not apply uniformly. Panama maintains that when goods have a real f.o.b. price lower than the 
threshold, an overestimation  of the product's value is obtained by multiplying the quantity by the 
threshold. In Panama's opinion, since the real (lower) value of the goods is ignored when calculating 
the bond, and the (higher) threshold price is used, an artificially high base price is obtained which 
must then be multiplied by 200%, so that Colombia treats in the same manner products with a 
different value, i.e. products in different situations. Panama does not consider that the establishment 
of fixed parameters for determining the coverage of the bond is consistent with an administratio n to 
guarantee principal obligations with various amounts, as occurs with the entry of imports at different 
prices.576 
7.380.   Panama also alleges a lack of uniform administration due to the fact that the specific bond 
is activated on the basis of thresholds establi shed for individual four -digit tariff headings, despite 
the existence within each heading of a multiplicity of diverse products of differing nature and differing 
quality, for which reason Colombia applies the same treatment to products as dissimilar as men 's 
and boys' suits, ensembles, jackets, blazers, trousers, bib and brace overalls, breeches and shorts, 
all of which have as their only common feature the fact of coming under heading  62.03.21.577 
7.381.   Panama claims, secondly, that the specific bond requirement i s not applied impartially, owing 
to the use of the figure of 200% to calculate the coverage of the bond. Panama contends that the 
percentage is fixed irrespective of the characteristics and possible contingencies of each transaction, 
and that to take it fo r granted that the value of the customs taxes together with possible penalties 
will always be equivalent to 200% of the threshold price multiplied by the corresponding quantity of 
shipped goods is prejudicial and inequitable.578 
7.382.   Panama claims, thirdly, that the specific bond requirement is not administered in a 
reasonable manner, since a specific bond has to be constituted in cases where a general bond is 
provided. Panama asserts that legal persons recognized as Regular Customs Users (UAP) will be able 
to pos t a general bond to cover all their transactions as UAP with the DIAN, so that there is no 
apparent reason why it might be appropriate to the circumstances that the UAP should additionally 
post a specific bond.579 
7.383.   Panama also alleges a lack of reasonable adm inistration, owing to the fact that the specific 
bond of Decree No.  2218/2017 covers the difference in prices and not the difference between the 
taxes already paid and the taxes payable on the basis of the threshold. Panama asserts that, for 
that reason, a  much higher amount is guaranteed than is appropriate to ensure payment of the 
customs taxes, penalties and interest that may apply.580 
7.384.   With regard to the second level of administration , Panama claims, firstly, that the  specific 
bond requirement is not admin istered uniformly, since Colombia delegates the processing and 
management of the specific bond to banking entities and insurance companies, omitting to establish 
general criteria for observance by these third parties of the requirements for applying for th e bond, 
and the considerations relevant to its approval. Panama contends that, as a result, each banking 
entity or insurance company by itself determines the management fees, the credit requirements 
applicable to the importer and the relevant factors for d etermining whether to approve or refuse the 
granting of the bond.581 
7.385.   Panama claims, secondly, that the specific bond requirement is not administered reasonably, 
because the guarantee has to come from a bank or insurance company. Panama sees no reason 
why imp orters should have to lodge a bank or insurance guarantee instead of, for example, a cash 
deposit, or not be given the opportunity to choose the kind of guarantee they wish to lodge in order 
                                                
576 Panama's first written submission as respondent, par a. 84; second written submission as 
complainant, para. 279; and second written submission as respondent, paras. 314 -315. 
577 Panama's opening statement at the meeting of the Panel, para. 21.  
578 Panama's written submission as respondent, paras. 85 -86; second w ritten submission as 
complainant, paras. 280 -281; second written submission as respondent, paras. 316 -318; and opening 
statement at the meeting of the Panel, para. 23.  
579 Panama's first written submission as respondent, paras. 87 -88; second written submissi on as 
complainant, paras. 282 -283; and second written submission as respondent, paras. 319 -320. 
580 Panama's second written submission as respondent, paras. 325 -328. 
581 Ibid. paras. 330 -331. WT/DS461/RW  
 
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  to provide sufficient guarantee of payment of the principal debt,  as is allowed by Article 221.3.2 of 
Decree No.  390/216.582 
7.4.5.1.2   Colombia  
7.386.   Colombia maintains that Panama has failed to demonstrate that Colombia administers a 
legal instrument of the kind described in Article  X:1 of the GATT 1994 in a non -uniform, partial or 
unreasonable manner.583, 584 
7.387.   Colombia maintains that, although Panama submitted claims against Article  8 of 
Decree  No. 390/2016, the latter does not form part of the Panel's terms of reference since it is not 
included in any of the panel requests. Colombia add s that the Customs Statute of Colombia, and in 
particular Article  8 of Decree No.  390/2016, is not a measure taken to comply with the 
recommendations and rulings of the DSB stemming from the original proceedings, as it was 
published before the Appellate Bo dy report in the original proceedings was circulated, and is not 
currently in force.585 
7.388.   Colombia asserts that, as is acknowledged by Panama, when a Party challenges a legal 
instrument that administers another measure, the latter measure is excluded from the scope of 
Article  X:3 (a) of the GATT 1994. Colombia argues that Panama's claim is directed against the 
customs guarantee of Decree No.  1745/2016, but Panama neither explains nor demonstrates that 
Decree No.  1745/2016 administers another legal instrument. C olombia adds that, in Panama's own 
description of the operation of the customs guarantee established in Decree No.  1745/2016, it does 
not characterize Decree No.  1745/2016 as an instrument administering requirements established in 
other instruments, rather , it describes Decree No.  1745/2016 as the measure establishing the 
requirements.586 
7.389.   Colombia adds that general and specific bonds have been provided for in customs legislation 
since well before the DSB decision, since Decree No.  2685/1999 already entailed a  customs 
guarantee regime. Colombia states that each of the special guarantees provided for in Colombia 
legislation operates independently of the general regime. In Colombia's view, Article  8 of Decree 
No. 390/2016 and Decrees No.  1745/2016 and No.  2218/20 17 have separate applications and the 
one is not dependent on the other. Colombia notes that Article  8 of Decree  No. 390/2016 states that 
"[f]or each of the types of guarantee listed in this article the special rules in force governing each of 
them are to be applied", so that Article  8 allows the application of special rules such as Decree 
No. 1745/2016 and Decree No.  2218/2017.587 
7.390.   For these reasons, Colombia requests that the Panel find that Panama has failed to establish 
that Decree No.  1745/2016 falls with in the scope of Article  X:3(a) of the GATT 1994.588 
                                                
582 Ibid. paras, 332 -333. 
583 Colombia's second written submission as co mplainant, para.  89; and second written submission as 
respondent, para.  82. 
584 The Panel notes that in Colombia's first written submission as respondent and its second written 
submission as complainant, Colombia refers to Decree No.  1745/2016. After Panama submitted 
Decree  No. 2218/2017 as Exhibit PAN -43, Colombia began referring to that Decree as well. This summary of 
arguments uses the form in which Colombia set forth its arguments, so that at times reference is made solely 
to Decree No.  1745/2016, these b eing arguments presented prior to the submission of Decree  No. 2218/2017. 
However, the foregoing is without prejudice to the fact that the arguments expressly referring to 
Decree  No. 1745/2016 could also be applicable to Decree  No. 2118/2017. Where that is  the case, the Panel will 
address those arguments in its analysis of Decree  No. 2218/2017.  
585 Colombia's additional written submission, paras.  30-31 and 94; opening statement as complainant at 
the meeting of the Panel, paras.  17-18; and opening statement as  respondent at the meeting of the Panel, 
para. 45. 
586 Colombia's second written submission as complainant, paras.  90-92; and second written submission 
as respondent, paras.  83-85. 
587 Colombia's additional written submission, paras.  96-97. 
588 Colombia's second  written submission as complainant, para.  94; and Panama's second written 
submission as respondent, para.  86. WT/DS461/RW  
 
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  7.391.   Colombia maintains that, in any event, even if Decree No. 1745/2016 fell within the scope 
of Article X:3(a), it would be consistent with that provision.589 
7.392.   With respect to the requirement of uniform administr ation, Colombia contends that in 
Argentina – Hides and Leather  the Panel dismissed the complaining party's argument that it was 
improper for Argentina to construct a special set of procedures for administering its export laws for 
only one type of product ( hides), and held that, as all exports of hides were uniformly subject to the 
same procedures, there was no non -uniform administration.590 
7.393.   Colombia maintains that the same logic applies in the context of the customs bond 
requirement, since the requirement app lies to all apparel and footwear under certain value 
thresholds, and all importers of these products can expect treatment of the same kind, in the same 
manner, both over time and in different places and with respect to other persons.591 
7.394.   Colombia thus affirms  that the comparison with other products is not appropriate because it 
is not required by Article X:3(a) of the GATT 1994. Colombia also contends that textiles,  clothing 
and footwear imported at prices below the thresholds differ from other products becau se of the high 
risk of their being used to launder money through underinvoicing, for which reason they require 
differential treatment, and uniformity of treatment does not require identical results when the facts 
differ.592 
7.395.   Colombia adds that the guarantees established by Decrees No s. 1745/2016 and 2218/2017 
operate in a standardized and uniform manner since importers have available the entire bank and 
insurance guarantee market operating in Colombia, and  the rules for obtaining such legal guarantees 
are clea rly defined and are not the fruit of a whim or arbitrary approach on the part of the 
administration. Colombia also contends that the goods subject to the guarantee and the thresholds 
are clearly defined in the decrees.593 
7.396.   With regard to the requirement of im partial administration, Colombia asserts that Panama 
has not explained why it considers the measure to be partial and, more specifically, why the fact 
that the percentage set out in the bond requirement is fixed means that the requirement is not 
impartial.  Colombia maintains, therefore, that Panama has not discharged its burden of 
substantiating how and why those provisions necessarily lead to administration that is not impartial. 
Colombia adds that the measure applies equally to all importers of covered ap parel and footwear.594 
7.397.   Colombia also contends that the specific bond applies impartially to all importers of the 
covered goods, irrespective of their origin, so that it does not favour any one country or party more 
than another, and is unprejudiced, unbiased  and fair. Colombia argues that textiles, clothing and 
footwear imported at prices below the thresholds differ from other imports because they are at high 
risk of being used for money laundering through underinvoicing, and require differential treatment. 
Colombia also argues that a rigorous and objective method was used to determine the thresholds, 
and that there is no evidence that that method was designed to favour any country in particular.595 
7.398.   With regard to the reasonable administration requirement, Colom bia maintains that the 
criteria for determining the amount to be guaranteed, including the figure of 200%, are based on 
reasonableness and sufficiency, in the light of the possible risks that may arise if the customs taxes 
and any penalties that may apply are not collected. Colombia adds that the nature of general bonds 
is totally different from that of the specific bond, since where imports at artificially low prices 
constitute an important share of total imports, the general bond would be insufficient, an d this makes 
it necessary to request special bonds even when the importer has a general bond. Colombia asserts 
that it used specific examples, in COL -22, COL -18 and COL -17, to show how general bonds might 
                                                
589 Colombia's second written submission as complainant, para. 94 and second written submission as 
respondent, para. 87.  
590 Colombia's second written  submission as complainant, paras. 96 -97; second written submission as 
respondent, paras. 89 -90; and additional written submission, para. 101.  
591 Colombia's second written submission as complainant, para. 98; second written submission as 
respondent, para. 9 1; and additional written submission, para. 104.  
592 Colombia's additional written submission, para. 105.  
593 Colombia's additional written submission, para. 103.  
594 Colombia's second written submission as complainant, paras. 99 -100 and second written submissio n 
as respondent, paras. 92 -93. 
595 Colombia's additional written submission, paras. 111 -112. WT/DS461/RW  
 
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  not be sufficient to cover the payment of the custo ms taxes and penalties that might apply, and that 
the penalties to be imposed could amount to 150% of the assessed value of the goods.596 
7.399.   Colombia points out that the specific bond meets the requirement of reasonableness, when 
its features are examined in th e light of its objective, which is to guarantee the payment of any 
customs taxes and penalties that may be due, and considering the high risk that exists that the 
goods to be imported at ostensibly low prices are used for money laundering.597 
7.400.   With respect to  Panama's claims concerning the requirements of uniform and reasonable 
administration as regards the second level of administration,  Colombia maintains that Panama does 
not specify the uniformity criterion to which it refers; that the fact that the bond is  provided by 
insurance or banking entities is a logical consequence of the nature of the instrument (insurance 
contract); and that if this type of instrument were prohibited by Article X:3(a) of the GATT 1994, 
Article 13 of the Customs Valuation Agreement,  Article VII of the GATT 1994 and Article 7 of the 
Trade Facilitation Agreement would be inapplicable. Colombia adds that bonds are an instrument 
used by many customs administrations around the world to guarantee payment of tariffs and other 
taxes, and tha t bank guarantees and policies for the fulfilment of legal provisions are appropriate 
instruments for the granting of bonds vis-à-vis customs authorities, which are widely used by 
importers and traders. Colombia also alleges that the financial system  opera tes freely and that the 
insurance companies and banks grant similar treatment in respect of persons similarly situated, 
depending on the risk.598 
7.4.5.2   Analysis by the Panel  
7.401.   As indicated in paragraph 7.351.    above, the Panel's task will be to determine whether, as 
alleged by Panama, the specific bond is not administered by Colombia in a uniform, impartial and 
reasonable manner in accordance with Article X:3(a) of the GATT 1994.599 
7.402.   As is explained in section 7.4.3.1    above, the Panel will begin by examining whether Panama 
has identified a legal instrument of the kind described in Articl e X:1 of the GATT 1994. If so, it will 
determine whether Panama has demonstrated  that the legal instrument identified is being 
administered by Colombia. If the answer to the latter question is also affirmative, it will examine 
whether Panama has demonstrat ed that the legal instrument identified is not being administered in 
a uniform, impartial or reasonable manner.  
7.4.5.2.1   The question of whether the legal instrument identified by Panama is of the kind 
described in Article X:1 of the GATT 1994  
7.403.   The first question th at the Panel has to consider is whether the legal instrument identified 
by Panama is of the kind described in Article X:1 of the GATT 1994. Panama has identified two 
instruments: first, Decree No. 390/2016 and, alternatively, Decree No. 2218/2017 itself.  
7.404.   With regard to Decree No. 390/2016, Panama explains that the Decree contains the Customs 
Statute of Colombia and that it is therefore a regulation of general application covered by Article X:1 
of the GATT 1994.600 As was observed in section 7.4.4   above, the possible inconsistency of the 
administration of the general customs regime with Article X:3(a) of the GATT 1994 does not fall 
within the Panel's terms of reference.  Irrespective of the foregoing, the Panel observes that Decree 
No. 390/2016 is a legal instrument "establishing the customs statute".601 Article 1 thereof, entitled 
"Scope", indicates that the Decree "regulates the legal relationships established between the  
customs administration and parties involved in the entry, duration, transfer and exit of  goods to and 
                                                
596 Colombia's second written submission as complainant, paras. 101 -103; second written submission as 
respondent, paras. 94 -95; and additional written submission, paras. 119 -123. 
597 Colombia's additional written submission, para. 118.  
598 Colombia's additional written submission, paras. 124 -127. 
599 Panama's first written submission as respondent, para. 76; second written submission as 
complainant, para. 271; second writ ten submission as respondent, para. 335; and opening statement at the 
meeting of the Panel, para. 20.  
600 Panama's second written submission as respondent, para. 301, and response to Panel Question 
No. 63. 
601 Decree No. 390/2016 (Exhibit PAN -4). WT/DS461/RW  
 
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  from the [Colombian] customs territory.602 In this respect, Decree No.  390/2016 undoubtedly falls 
within the scope of Article X:1.  
7.405.   Panama identifies anothe r alternative instrument in case the Panel were to consider that 
Decree No. 2218/2017 governing the specific bond is not of the nature of an act administering 
Article  8 of Decree No. 390/2016. According to Panama, that instrument would be Decree 
No. 2218/2 017 itself, which imposes at the same time a substantive requirement and the specific 
parameters for its administration.603 
7.406.   Decree No. 2218/2017 is a legal instrument "adopting measures for the prevention and 
control of customs fraud in connection with impor ts of fibres, yarns, fabrics, clothing and 
footwear".604 Article 1 thereof, entitled "Purpose" , states that the Decree "establishes mechanisms 
to strengthen the risk management system and customs control in the face of possible situations of 
customs fraud as sociated with imports of fibres, yarns, fabrics, clothing and footwear, irrespective 
of the country of origin and/or provenance" .605 
7.407.   In the Panel's opinion, by establishing mechanisms to strengthen the risk management 
system and customs control in the face o f possible situations of customs fraud associated with 
imports of fibres, yarns, fabrics, clothing and footwear, Decree No. 2218/2017 also falls within the 
"laws, regulations, judicial decisions and administrative rulings of general application [which 
Colombia has brought into force], pertaining to the classification or the valuation of products for 
customs purposes, or to rates of  duty, taxes or other charges, or to requirements, restrictions or 
prohibitions on imports or exports or on the transfer of paym ents therefor, or affecting their sale, 
distribution, transportation, insurance, warehousing inspection, exhibition, processing, mixing or 
other use ". 
7.408.   For the foregoing reasons, the Panel considers that Panama has discharged the initial burden 
of identifyi ng a legal instrument of the kind described in Article X:1 of the GATT 1994.  
7.4.5.2.2   The question of whether the legal instrument identified by Panama is being 
"administered" by Colombia  
7.409.   Having established that the legal instruments identified by Panama are of the kind described 
in Article X:1 of the GATT 1994 and, therefore, fall within the scope of Article X:3(a), the Panel will 
examine whether Panama has demonstrated  that those instrume nts are being "administered" by 
Colombia.  
7.410.   As was observed in section 7.4.4   above, the possible inconsistency of the administration of 
the general customs regime thr ough the specific bond with Article X:3(a) of the GATT 1994 does not 
fall within the terms of reference of the Panel. Irrespective of the foregoing, Panama's argument 
that Article 8606 of Decree No. 390/2016, which regulates customs guarantees, is administer ed by 
                                                
602 Idem.  
603 Panama's second written submission as respondent, paras. 306 -308, and response to Panel Question 
No. 63.  
604 Decree No. 221/2017 (Exhibit PAN -43). 
605 Idem.  
606 Article 8 of Decree No. 390/2016 states the following in relevant part:  
Scope. The guarantee is an o bligation ancillary to the customs obligation, which is used to ensure 
payment of duties and taxes, penalties and interest resulting from non -compliance with a 
customs obligation provided for in this decree.  
Guarantees shall be managed through the electron ic information services, under the terms and 
conditions laid down by the National Customs and Excise Directorate.  
Guarantees may be comprehensive or specific. Comprehensive guarantees cover the obligations 
assumed by the declarant or foreign trade operator , in respect of various operations or customs 
formalities; specific guarantees support compliance with obligations in connection with one 
particular operation or formality.  
Guarantees may take one of the following forms:  
1. Monetary deposit or any other me ans of payment authorized by the National Customs and 
Excise Directorate.  
2. Insurance company guarantee.  
3. Bank guarantee.  WT/DS461/RW  
 
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  Decree No. 2218/2017 is not convincing.607 In fact, Article 8 of Decree No. 390/2016 states that 
"[the] guarantee is an obligation ancillary to the customs obligation, which is used to ensure payment 
of duties and taxes, penalties and interest resultin g from non -compliance with a customs obligation 
provided for in this decree."608 This article also states that guarantees may be comprehensive or 
specific and that they may take the form of a monetary deposit, an insurance company guarantee, 
a banking instit ution guarantee, an open promissory note with letter of instructions, a mercantile 
trust guarantee, an endorsement of securities as collateral, or another form of guarantee that 
provides sufficient security for compliance. It also stipulates that for each of the guarantees listed 
in that provision, "the special rules in force governing each of them shall apply" and that the DIAN 
"shall determine the type of guarantee that is to be constituted in accordance with the corresponding 
customs obligation."  
7.411.   Article  7 of Decree No. 2218/2017, which governs the specific bond, prescribes that "[in] 
the case of goods covered by the scope of application of this decree, if the valuation dispute arises 
in connection with the inspection or examination  procedure, and it beco mes necessary for that 
reason to delay the final determination of the customs value of the goods… the importer may secure 
release by posting a guarantee sufficient to ensure payment of any customs taxes, penalties and 
interest that may apply." As explained  in section 2.3.3.2 above, this provision prescribes the 
particular features of the guarantee, i.e. that it will be accorded on a value equivalent to 200% of 
the difference between the f.o.b. price declared by the importer and the result of multiplying the  
established threshold unit price by the quantity imported; that it must be from a bank or insurance 
company; and that it will have a term of three years.  
7.412.   The Panel observes that, even though Article  8 of Decree No.  390/2016 provides for 
guarantees to ensu re the payment of duties, taxes, penalties and interest stemming from a customs 
obligation, and the form such guarantees may take, it does not specifically create a guarantee that 
has to be administered. In fact, the same article provides for special rules  to govern each of the said 
guarantees and empowers the DIAN to establish the type of guarantee that is to be constituted.  
7.413.   This Panel considers, on the other hand, that it is Decree No.  2218/2017 itself which creates 
a specific bond to be administered by t he Colombian customs authorities. In other words, this specific 
bond exists, in substance, by virtue of Decree No.  2218/2017, and not by virtue of Article  8 of 
Decree  No. 390/2016.  
7.414.   In effect, Decree No.  2218/2017 creates a special regime for a certain grou p of products, 
namely, yarns, fibres, fabrics, clothing, made up textile articles and footwear priced at or below the 
thresholds, which contains a set of special rules applicable to the import of such products, rules 
which include the specific bond.609 This special regime exists by virtue of Decree  No. 2218/2017 and 
                                                
4. Open promissory note with letter of instructions, only for declarants and foreign trade 
operators authorized or graded by the Na tional Customs and Excise Directorate in accordance 
with the provisions of Article 35 of this decree.  
5. Mercantile trust guarantee.  
6. Endorsement of securities as collateral.  
7. Any other form of guarantee that provides sufficient security for the paymen t of duties and 
taxes, penalties, and interest, where applicable, as required by the National Customs and Excise 
Directorate.  
For each of the types of guarantee listed in this article, the special rules in force governing each 
of them are to be applied.  
The National Customs and Excise Directorate shall determine the type of guarantee that is to be 
posted in accordance with the corresponding customs obligation. In any event, in the case of 
disputes concerning value, origin or tariff classification, only guar antees in monetary deposit 
form shall be accepted, when persons with a high risk profile are involved.  
… 
Anyone who has posted a comprehensive guarantee shall not, as long as it remains in force, be 
obliged to post specific guarantees, except where guarant ees replacing a precautionary measure 
are concerned.  
607 Panama's second written submission as respondent, para. 301; and response to Panel question 
No. 63. 
608 Decree No. 390/2016 of (Exhibit PAN -4), Article 8.  
609 Decree No.  2218/2017 is a decree "adopting mea sures for the prevention and control of customs 
fraud in connection with imports of fibres, yarns, fabrics, clothing and footwear". Article  1 of the Decree, 
entitled "Purpose", provides that the Decree "establishes mechanisms to strengthen the risk managem ent and 
customs control system in the face of possible situations of customs fraud associated with imports of fibres, 
yarns, fabrics, clothing and footwear, irrespective of the country of origin and/or provenance."  WT/DS461/RW  
 
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  not by virtue of Decree No.  390/2016. Thus, the administration by the DIAN of this special import 
regime, including the administration of the specific bond, constitutes an administration of Decree 
No. 2218/2017, and not an administration of Decree No.  390/2016.  
7.415.   In addition to the above, the Panel observes that Colombia submitted an official letter from 
the DIAN Directorate of Legal Management, addressed to the Foreign Trade Directorate of the  
Colombian Ministry of Industry and Tourism610, which lists the articles of Decree No.  390/2016 in 
force at 9  April 2018. The list does not include Article  8 of the latter Decree. Panama has not refuted 
this evidence submitted by Colombia.  
7.416.   Panama has argued  that, in any event, if the Panel were to consider that Decree 
No. 2218/2017 is not of the nature of an act administering Article 8 of Decree No. 390/2016, this 
would mean that Decree No. 2218/2017 would impose a substantive requirement and, at the same 
time, the specific parameters for its administration.611 
7.417.   The Panel notes in this connection that Panama has challenged Decree No. 2218/2017, under 
Article X:3(a) of the GATT 1994, as a legal instrument governing the administration of the specific 
bond, but not  the manner in which the Colombian customs authorities apply or administer the bond 
in practice. In fact, Panama has submitted no evidence as to how the Colombian customs authorities 
administer the specific bond requirement in practice. In other words, Pan ama argues that various 
aspects of the specific bond, as contained in Decree No. 2218/2017 itself, give rise to the 
non-uniform, partial and unreasonable administration of the specific bond.  
7.418.   The Panel recalls that, as was explained in paragraphs 7.356.   -7.357.    above, it is possible 
to challenge a legal instrument as such  under A rticle X:3(a) of the GATT 1994, when the substantive 
content of that legal instrument regulates the application or implementation of the rules covered by 
Article X:1 of the GATT 1994, but that, in order to establish such a claim, the complainant must 
discharge the burden of substantiating how and why those provisions necessarily lead  to 
impermissible administration of the legal instrument in question. Therefore, the Panel cannot 
disregard the possibility that some aspects of the specific bond, as contained in 
Decree  No. 2218/2017, may necessarily lead to the non -uniform, non -impartial or unreasonable 
administration of that legal instrument and, in particular, of the specific bond.  
7.419.   For this reason, the Panel will now consider whether Panama has demonstrated  that the 
challenged aspects of the specific bond contained in Decree No. 2218/2017 necessarily lead  to 
impermissible administration of the specific bond contained in Decree No. 2218/2017.  
7.4.5.2.3   The question of whether the specific bond in Decree  No. 2218/2017 is not being 
administered uniformly, impartially and reasonably  
7.4.5.2.3.1   Introduction  
7.420.   As previously explained, Panama has made a series of claims of inconsistency with 
Article  X:3(a) of the GATT 1994, with respect to various aspects of the specific bond  contained in 
Decree  No. 2218/2017 . 
7.421.   The Panel observes that Panama has identified two levels of administration with respect to 
the specific bond: (a) a first level, which, according to Panama, concerns the determination 
and regulation of the type of bond required;  and (b ) a second level, which, according to Panama, 
concerns the administrative processes and actual procedures for obtaining the specific bond.612 
7.422.   Without entering into an examination of the relevance of the classification used by 
Panama,  and with a view to facil itating the analysis of the various claims that have been made, the 
Panel will use the classification proposed by Panama for the purposes of its analysis.  
                                                
610 Official letter on Decree  No. 390/2016 (Exhibit COL -58). 
611 Panama's second written submission as respondent, paras. 306-308, and response to Panel question 
No. 63.  
612 Panama 's second written submission as respondent, para.  309. WT/DS461/RW  
 
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  7.4.5.2.3.2   Panama 's claims with respect to the "first level of administration"  
 Claim with respect to the lack o f uniform administration  
7.423.   Panama makes various claims according to which the specific bond requirement is not  
administered uniformly because: (a) it only applies to the importation of textiles and footwear 
classified in Chapters 61, 62  and 64 of Colombia 's Customs Tariff at prices equal to or lower than 
the established thresholds; (b) the amount of coverage of the bond disregards the real value of the 
goods and uses the threshold price;  and (c) the bond is activated on the basis of thresholds 
established per  four-digit tariff heading. The Panel will examine each of these arguments below.  
7.424.   With respect to the first argument, Panama claims that the administration of the specific 
bond requirement is not uniform because it only applies to the importation of textil es and footwear 
classified in Chapters 61, 62  and 64 of the Colombian Customs Tariff at prices equal to or lower than 
the established thresholds. Panama argues that this bond does not apply to the importation of other 
similarly situated products, as is the  case with spirits and cigarettes, which can also be used by 
criminal organizations that engage in customs fraud.613  
7.425.   For its part, Colombia maintains that the specific bond requirement is administered 
uniformly, because it is applied to the importation of a ll apparel and footwear  below specified 
threshold values,  and all importers of these products can expect treatment of the same kind, in the 
same manner, both over time and in different places and with respect to other persons.614 
7.426.   Colombia adds that the factu al assumptions applicable to the textiles and footwear sector 
are substantially different from those of other sectors exposed to illicit trade. According to Colombia, 
the specific bond is of particular importance for counteracting money laundering through 
underinvoicing, while other kinds of smuggling call for different strategies. Colombia asserts that 
Panama 's claim disregards the technical process and the practical reasons that led to the measure 
being designed to have a limited scope of application. Colombia also maintains that the Colombian 
authorities have been unable to establish that money laundering, as opposed to customs fraud, is 
involved in other kinds of underinvoicing,  and that Colombia has demonstrated its problem with the 
laundering of mon ey through the underinvoicing of footwear, textiles  and clothing.615 
7.427.   Panama 's argument with respect to the lack of uniformity of the specific bond appears to 
relate to the lack of uniformity in the Colombian customs legislation, due to the fact that Colombia  
does not apply the specific bond requirement to other products which, according to Panama, are 
similarly situated. As observed in section  7.4.4 above, the possible inconsistency of the 
administration of the general customs regime with Article  X:3(a) of the GATT 1994  does not fall 
within the Panel 's terms of reference. Moreover, as explained in paragraph  7.410  above, Panama 's 
argument according to which Article  8 of Decree  No. 390/2016 is being administered through 
Decree  No. 2218/2017 is not convincing.  
7.428.   Therefore, the Panel will confine itself to analysing Panama 's argument according to which 
it is the content of Decree  No. 2218/2017 that is not uniformly administered. In this respect, as 
previously explained, the Panel agrees with other previous panels in considering that the 
requirement of uni formity means "uniformity of treatment in respect of persons similarly 
situated"616 and that the laws are applied consistently and predictably.617 In the specific 
circumstances of the present dispute, this uniform administration obligation imposed by  
Article  X:3(a) of the GATT 1994 requires Colombia to apply the specific bond requirement in 
Decree  No. 2218/2017 consistently and predictably, by according uniform treatment to all the 
operations covered by that Decree  which are in a similar situation. It does not appear to this Panel 
that the uniform administration requirement of Article  X:3(a) of the GATT 1994 obliges Colombia to 
                                                
613 Panama 's first written submission as respondent, paras.  80-83; sec ond written submission as 
complainant, paras.  275-278; second written submission as respondent, paras.  312-313; and opening 
statement at the  meeting of the Panel, para.  21. 
614 Colombia 's second written submission as complainant, para.  98; second written submission as 
respondent, para.  91; and additional written submission, para.  104. 
615 Colombia 's additional written submission, para.  130. 
616 Panel Report US – Stainless Steel (Korea) , para.  6.51. 
617 Panel Report Argentina – Hides and Leather , para.  11.83.  WT/DS461/RW  
 
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  impose the specific bond requirement on other products not included in the scope of application of  
Decree  No. 2218/2017 which, in Panama 's opinion, are in a similar situation.  
7.429.   The Panel recalls that, in any case, the obligation in Article  X:3(a) of the GATT 1994 relates 
to the administration of the laws and regulations rather than to their substantive content.618 
Accordingly, the uniformity requirement does not relate to the substance of Decree  No. 2218/2017 
but to its administration. In this connection, in the Panel 's opinion, a claim with respect to the 
coverage of products subject to the specific bond would hav e to do with a substantive characteristic 
of the specific bond  rather than with the way in which the specific bond is administered.619 
7.430.   For these reasons, the Panel rejects Panama 's argument that the specific bond requirement 
is not administered uniformly bec ause of the product coverage.  
7.431.   Panama also claims that the specific bond requirement is not being administered uniformly, 
because its amount of coverage is not uniformly applied. Panama maintains that if the goods have 
a real f.o.b. price below the threshol d, multiplying the quantity by the threshold gives an 
overestimated value for the product. For Panama, since for the calculation of the bond the real 
(lower) value of the goods is disregarded and the (higher) threshold price is used, an artificially high 
base price is obtained, which must then be multiplied by 200%, so that Colombia is treating in the 
same way products with a different value, that is, in different situations.620 
7.432.   For its part, Colombia points out that the measure was modified by 
Decree  No. 2218/2017  and that, under this new decree, the value of the bond is determined in 
accordance with the difference between the import value and the threshold, so that Panama 's claim 
is not relevant in the light of the new measure.621 
7.433.   The Panel observes that Panama challenges the coverage amount of the specific bond, 
because "the real (lower) value of the goods is disregarded and the (higher) threshold price is used." 
Firstly, it should be made clear that what Panama describes as the "real value" of the goods is 
actually the declared value of the goods, which might not be their "real value" in the event of 
underinvoicing or overinvoicing. The Panel understands that this argument relates to the specific 
bond with the characteristics described in Decree  No. 1745/ 2016, which, as described in 
section  2.3.2.2  above, amounted to 200% of the threshold unit price multiplied by the quantity 
imported. The Panel reca lls that, for the reasons set out in section 7.1.3.2  above, the Panel has 
decided to rule only on the specific bond with the characteristics describ ed in Decree  No. 2218/2017.  
7.434.   The Panel also observes that, as described in section 2.3.3.2  above, the specific bond 
provided for in Decree  No. 2218/ 2017 no longer has the characteristic challenged by Panama, since 
the coverage now amounts to 200% of the difference between the f.o.b. price declared by the 
importer and  the result of multiplying the unit price of the threshold. Thus, taking into consider ation 
the f.o.b. price declared by the importer, which Panama has described as the "real value" of the 
goods, Panama 's argument that the "real value" of the goods is disregarded no longer has any basis 
in fact.  
7.435.   The Panel recalls that, in any event, the ob ligation in Article  X:3(a) of the GATT 1994 relates 
to the administration of the laws and regulations, rather than to their substantive content.622 
Therefore the uniformity requirement does not relate to the substance of Decree  No. 2218/2017, 
but to its admi nistration. In the opinion of the Panel, a claim with respect to the amount of coverage 
of the specific bond has to do with a substantive characteristic of the specific bond  rather than with 
the way in which the specific bond is administered.623 
                                                
618 Appellate Body Report, EC – Poultry , para.  115. See also Appellate Body Report, EC – Selected 
Customs Matters , para.  219. 
619 Appellate Body Reports, EC – Bananas III , para.  200 and EC – Selected Customs Matters , para.  219. 
620 Panama 's first written submissio n as respondent, para.  84; second written submission as 
complainant, para.  279; and second written submission as respondent, paras.  314-315. 
621 Colombia 's additional written submission, para.  131. 
622 Appellate Body Report, EC – Poultry , para.  115. See also A ppellate Body Report, EC – Selected 
Customs Matters , para.  219. 
623 Appellate Body Reports, EC – Bananas III , para.  200 and EC – Selected Customs Matters , para.  219. WT/DS461/RW  
 
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  7.436.   Accordingly,  this Panel rejects Panama 's argument that the specific bond requirement is not  
administered uniformly  because of its  amount of coverage.  
7.437.   Panama also argues that the specific bond requirement is not  administered uniformly 
because it is activated on the bas is of thresholds established per four -digit tariff heading, despite 
the fact that each heading covers a variety of products that differ in nature and quality, so that 
Colombia is treating dissimilar products in the same way.624 
7.438.   As previously explained, the P anel considers that the uniform administration obligation 
requires Colombia to apply the specific bond requirement in Decree  No. 2218/2017 consistently and 
predictably, by according uniform treatment to all the covered operations in a similar situation.  
7.439.   It does not seem to the Panel that the uniform administration requirement of Article  X:3(a) 
of the GATT 1994 obliges Colombia to achieve a greater level of detail in the tariff headings with 
regard to the respective thresholds upwards of four digits. In othe r words, the Panel does not 
consider that the fact that Colombia has fixed the thresholds with respect to tariff headings 
necessarily gives rise to the non -uniform administration of the specific bond contained in 
Decree  No. 2218/2017, within the meaning of  Article  X:3(a) of the GATT 1994.  
7.440.   In any event, the Panel recalls that the obligation in Article  X:3(a) of the GATT 1994 relates 
to the administration of the laws and regulations, rather than to their substantive content.625 
Therefore, the uniformity requir ement does not relate to the substance of Decree  No. 2218/2017, 
but to its administration. In this respect, in the Panel 's opinion, a claim with regard to the 
determination of the thresholds has to do with a substantive characteristic of the specific bond  rather 
than with the way in which the specific bond is administered.626 
7.441.   In the light of the foregoing, the Panel rejects Panama 's argument that the specific bond 
requirement is not administered uniformly because it is activated on the basis of thresholds 
established per four -digit tariff heading.  
7.442.   For all the above reasons, with respect to the aspects of the specific bond which Panama 
characterizes as the "first level of administration", the Panel concludes that Panama has failed to 
demonstrate  that the specif ic bond requirement in Decree  No. 2218/2017 is being administered in 
a non-uniform manner, inconsistent with Article  X:3(a) of the GATT 1994.  
Claim with respect to the lack of impartial administration  
7.443.   Panama claims that the specific bond requirement is not  administered impartially, because 
of the use of the 200% percentage for calculating the coverage amount. Panama argues that the 
percentage is fixed independently of the characteristics and possible contingencies of each 
transaction, and that to assume tha t the value of the customs taxes together with any penalties will 
always be equivalent to 200% of the threshold multiplied by the quantity of the goods in the 
corresponding shipment is prejudiced and unfair.627 
7.444.   For its part, Colombia maintains that Panama ha s not explained why the fact that the 
percentage established in the specific bond requirement is fixed means that the requirement is not 
impartial, and Panama has therefore failed to discharge the burden of substantiating how and why 
those provisions neces sarily lead to an administration that is not impartial. Colombia adds that the 
measure is  applied equally to all importers of the apparel and footwear covered.628 
7.445.   As previously explained, the Panel agrees with past panels in considering that the impartial 
administration requirement in  Article  X:3(a) relates to the administration of the relevant laws and 
                                                
624 Panama 's opening statement at the meeting of the Panelg, para.  21. 
625 Appellate Body Report , EC – Poultry , para.  115. See also Appellate Body Report, EC – Selected 
Customs Matters , para.  219. 
626 Appellate Body Reports, EC – Bananas III , para.  200 and EC – Selected Customs Matters , para.  219. 
627 Panama 's first written submission as respondent, paras. 85 -86; second written submission as 
complainant, paras. 280 -281; second written submission as respondent, paras. 316 -318; and opening 
statement at the Panel meeting, para. 23.  
628 Colombia 's second written submission as complainant, paras. 99 -100; and  second written submission 
as respondent, paras. 92 -93. WT/DS461/RW  
 
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  regulations in a just, fair, objective, unbiased and unprejudiced manner .629 Therefore, the impartial 
administration obligation imposed by  Article  X:3(a) of t he GATT 1994, in the specific circumstances 
of this dispute, requires Colombia to administer the specific bond requirement in 
Decree  No. 2218/2017 in a just, fair , objective, unbiased and unprejudiced manner.  
7.446.   In this respect, the Panel observes that Panama  challenges the coverage amount of the 
specific bond, due to the fact that it is equal to 200% of the threshold multiplied by the quantity of 
the goods in the corresponding shipment. This Panel believes that this argument relates to the 
specific bond with the characteristics described in Decree  No. 1745/2016, which amounted to 200% 
of the threshold unit price multiplied by the quantity imported. The Panel recalls that, for the reasons 
given in section 7.1.3.2  above, the Panel has decided to rule only on the specific bond with the 
characteristics described in Decree  No. 2218/2017.  
7.447.   The Panel observes that the specific bond provided for in Decree  No. 2218/2017 no longer 
has the characteristic challenged by Panama, since, as described in section 2.3.3.2  above, the 
coverage now amounts to 200% of the difference between the f.o.b. price declared by the importer 
and the result of multiplying the threshold unit price. For these reasons, Panama 's argument no 
longer has any basis in fact.  
7.448.   In any event,  and as previously explained in analysing Panama 's claim  concerning the lack 
of uniform administration of the specific bond, the Panel considers that a claim with respect to the 
coverage amount of the specific bond has to do with a substantive characteristic of the specific 
bond rather than with the way in whic h the specific bond is administered.  
7.449.   For these reasons, the Panel rejects Panama 's argument that the specific bond requirement 
is not  administered impartially, because of the coverage amount.  
7.450.   In conclusion, with respect to the aspects of the specific bond which Panama describes as 
the "first level of administration", the Panel finds that Panama has failed to demonstrate  that the 
specific bond requirement in Decree  No. 2218/2017 is administered in a manner that is not impartial,  
inconsistently with Article  X:3(a) of the GATT 1994.  
Claim with respect to the lack of reasonable administration  
7.451.   Panama claims that the specific bond requirement is not administered reasonably, because: 
(a) a specific bond has to be constituted in cases in which there is a general bon d; and (b) the 
amount of the specific bond of Decree  No. 2218/2017 covers the difference in prices and not the 
difference between the taxes already paid  and the taxes payable on the basis of the threshold. The 
Panel will examine each of these arguments bel ow. 
7.452.   With respect to the first argument, Panama claims that the specific bond requirement is not  
administered reasonably because a specific bond has to be constituted in cases in which there is a 
general bond. Panama argues that the legal persons recognized  as regular customs users (UAP) will 
be able to post a general bond that will cover all their transactions as a UAP with the DIAN, so that 
there is no apparent reason why it might be appropriate to the circumstances for the UAP also to 
have to lodge a spec ific bond.630 
7.453.   For its part, Colombia maintains that where imports at artificially low prices constitute an 
important share of total imports, the general bond would be insufficient. Colombia asserts that it 
has made clear with concrete examples, in COL -22, COL-18 and COL-17, how general bonds might 
not be sufficient to cover the payment of customs taxes and any penalties that might apply,  and 
that the penalties to be imposed could amount to 150% of the assessed value of the goods.631 
7.454.   In this respect, Panama responds that Colombia implicitly recognizes that where it is not a 
matter of cases in which artificially low prices constitute an important share of total imports, the 
                                                
629 Panel Reports, Thailand – Cigarettes (Philippines) , para. 7.899; and China – Raw Materials , para. 
7.694. (The Appellate Body declared the panel 's analysis moot and of no legal effect on procedural g rounds.)  
630 Panama 's first written submission as respondent, paras. 87 -88; second written submission as 
complainant, paras. 282 -283; and second written submission as respondent, paras. 319 -320. 
631 Colombia 's second written submission as complainant, paras. 1 01-103; and second written 
submission as respondent, paras. 94 -95. WT/DS461/RW  
 
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  specific bond contingencies would normally be covered by the coverage of the general bo nd.632 
Panama adds that even if because of the magnitude of the textiles and footwear transactions a 
producer with a general bond was unable to cover the amount of the specific bond, there is no reason 
why that producer should be required to surrender the wh ole of the specific bond if part of the 
amount covered could still be covered by the general bond.633 
7.455.   As previously explained, the Panel agrees with past panels in considering that the reasonable 
administration requirement relates to "administration that is equitable, appropriate for the 
circumstances and based on rationality".634 Therefore the obligation concerning reasonable 
administration imposed by  Article  X:3(a) of the GATT 1994, in the specific circumstances of this 
dispute, requires Colombia to administe r the specific bond requirement in Decree  No. 2218/2017 in 
a manner that is equitable, appropriate for the circumstances and based on rationality.  
7.456.   The Panel recalls that Panama has challenged Decree  No. 2218/2017 as a legal instrument 
that governs the admi nistration of the specific bond, so that it is for Panama to satisfy the obligation 
to substantiate how and why the fact of requiring a specific bond when there is already a general 
bond necessarily leads to unreasonable administration.  
7.457.   The Panel understan ds that, on some occasions, the general bond could be sufficient to cover 
all of an importer 's transactions with the DIAN as a UAP. However, as Colombia has explained and 
Panama appears not to have contested, on other occasions, the bond could be insuffici ent. Moreover, 
as Colombia has explained, the general bond is cross -cutting in its application, is an import 
processing facility accorded to a certain type of importer,  and is intended to ensure the total payment 
of the duties, taxes, penalties and interes t that result from non -compliance with a customs 
requirement. On the other hand, the specific bond, although also intended to ensure the total 
payment of duties, taxes, penalties and interest that may apply, seeks to confront the problem of 
money launderin g in specific sectors.635 In the Panel 's opinion, the fact that Colombia additionally 
requires the specific bond is not sufficient to conclude that the administration of that specific bond 
is not appropriate for the circumstances or is not based on rationali ty. In other words, Panama 's 
argument according to which the fact of requiring the specific bond in cases in which there is already 
a general bond necessarily leads to unreasonable administration of the specific bond is  unconvincing.  
7.458.   For these reasons, the  Panel rejects Panama 's argument that the specific bond requirement 
is not being administered reasonably because the specific bond is required in those cases in which 
there is already a general bond.  
7.459.   With respect to the second argument, Panama alleges lack  of reasonable administration 
because the amount of the specific bond in Decree  No. 2218/2017 covers the difference in prices 
and not the difference between the taxes already paid and the taxes payable on the basis of the 
threshold. Panama asserts that, be cause of this, an amount much greater than that appropriate for 
ensuring the payment of customs taxes, penalties and interest payable is being guaranteed.636 
7.460.   As already explained, this Panel considers that a claim with respect to the amount of 
coverage of th e specific bond has to do with a substantive characteristic of the specific bond  rather 
than with the way in which the specific bond is administered.  
7.461.   Assuming that the amount of coverage of the specific bond can be seen as a question of 
administration, the  Panel observes that Panama appears to suggest that a "reasonable" amount for 
the specific bond would be that which covered the difference between the taxes already paid and 
the taxes payable, on the basis of the threshold. The Panel  recalls that , from Col ombia 's point of 
view, the values of the transactions covered by the specific bond are subject to a suspicion  of 
underinvoicing for money laundering. Therefore, they could be subject to a valuation dispute and 
the correction of the declared prices. Panama 's argument appears to disregard the fact that at the 
time of posting the specific bond it is impossible to know what will be the exact amount of the taxes 
payable if the declared prices are corrected, apart from the need to cover any penalties and interest  
                                                
632 Panama 's second written submission as respondent, paras. 321 -322. 
633 Panama 's second written submission as respondent, paras. 323 -324. 
634 Panel Reports, China – Raw Materials , para. 7.696. (The Appellate Body declared the Panel 's analysis 
to be moot and of no legal effect on procedural grounds.)  
635 Colombia 's response to Panel question No.  17(b), para. 70.  
636 Panama 's second written submission as respondent, paras. 325 -328. WT/DS461/RW  
 
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  that might be incurred, which are also unknown at the time of posting the specific bond. Therefore, 
the Panel considers that Panama has failed to demonstrate  that the amount of coverage of the bond 
chosen by Colombia necessarily gives rise to the unreas onable administration of Decree 
No. 2218/2017.  
7.462.   For these reasons, the Panel rejects Panama 's argument that the specific bond requirement 
is not being administered reasonably because of its amount of coverage.  
7.463.   In conclusion, with respect to the aspects of the  specific bond that Panama characterizes as 
the "first level of administration", the Panel concludes that Panama has failed to demonstrate  that 
the specific bond requirement in Decree  No. 2218/2017 is administered unreasonably, in a manner 
inconsistent wit h Article  X:3(a) of the GATT 1994.  
7.4.5.2.3.3   Panama 's claims with respect to the "second level of administration"  
Claim with respect to the lack of uniform administration  
7.464.   Panama claims that the specific bond requirement is not administered uniformly because 
Colombia  delegates the processing and management of the specific bond to banks and insurance 
companies, while omitting to establish general criteria for  observance by these third parties of the 
requirements for applying for the specific bond and the considerations  relevant to its approval. 
Panama maintains that, consequently, each bank or insurance company  determines for itself the 
management charges, the credit requirements for the importer,  and the relevant factors for 
determining whether the granting of a specif ic bond should be approved or refused.637 
7.465.   Colombia maintains that Panama does not specify the uniformity criterion in question. 
Colombia explains that the fact that the bond is provided by insurance companies or banks is a 
logical consequence of the nature o f the instrument (insurance contract)  and that if instruments of 
this kind were prohibited by Article  X:3(a) of the GATT, then Article  13 of the Customs Valuation 
Agreement, Article  VII of the GATT 1994  and Article  7 of the Trade Facilitation Agreement wou ld be 
inapplicable. Colombia also maintains that the financial system operates freely and that insurance 
companies and banks accord similar treatment in respect of persons  similarly situated, depending 
on the risk.638 
7.466.   The Panel agrees with other previous pan els in considering that the uniformity requirement 
calls for "uniformity of treatment in respect of persons similarly situated"639 and consistent and 
predictable application  of the laws.640 Thus, the obligation concerning uniform administration 
imposed by  Article X:3(a) of the GATT 1994, in the specific circumstances of this dispute, requires 
Colombia to administer the specific bond requirement in Decree  No. 2218/2017 consistently and 
predictably, by according uniform treatment to all the covered products that are in a similar situation.  
7.467.   The Panel is not convinced that the fact of requiring that the specific bond for guaranteeing 
the payment of  customs obligations be obtained from a bank or an insurance company is intrinsically 
inconsistent or unpredictable and therefore inconsistent with Members ' obligations. A bank or 
insurance company bond is established by means of a contractual relationship between private 
parties,  and it is customary for the bank or insurance company to scrutinize the particular situation 
of the applicant in order to decide, firstly, whether to grant a bond and, secondly, the amount it will 
charge for that service. It does not seem to the Panel that, in the light of Panama 's arguments and 
in the specific circumstances of this dispute, the re quirement that the specific bond be administered 
uniformly can be interpreted as requiring that Colombia establish a level of specific financial 
regulation for banking or insurance institutions or limit the freedom of those financial institutions to 
take d ecisions with respect to their potential customers, for the purpose of ensuring uniformity of 
specific treatment. It is the Panel 's opinion that in these circumstances uniformity of treatment 
relates to requiring the same kind of bond, that is, a bank or i nsurance company bond, for all 
transactions covered by the obligation to post the bond.  
                                                
637 Panama 's second written submission as respondent, paras. 330 -331. 
638 Colombia 's additional written submission, paras. 124 -127. 
639 Panel Report US – Stainless Steel (Korea) , para. 6.51.  
640 Panel Report Argentina – Hides and Leather , para. 11.83.  WT/DS461/RW  
 
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  7.468.   Therefore, the Panel rejects Panama 's argument that the specific bond requirement is not  
administered reasonably because Colombia  delegates the processing and manageme nt of the 
specific bond to banks and insurance companies.  
7.469.   In conclusion, with respect to the aspect of the specific bond which Panama describes as 
being the "second level of administration", this Panel concludes that Panama has failed to 
demonstrate  that t he specific bond requirement in Decree  No. 2218/2017 is administered in a 
non-uniform manner, inconsistent ly with Article  X:3(a) of the GATT 1994.  
Claim with respect to the lack of reasonable administration  
7.470.   Panama claims that the specific bond requirement is not  administered reasonably because 
of the requirement that the bond be obtained from a bank or insurance company. For Panama, there 
is no reason why importers should have to lodge a bank or insurance company bond rather than, 
for example, a monetary de posit, or not be given the opportunity to choose the kind of bond they 
wish to lodge in order to provide a sufficient guarantee of payment of the principal obligation, as 
allowed by Decree  No. 390/2016.641 
7.471.   Colombia maintains that  bonds are an instrument used  by many of the world 's customs 
authorities to ensure the payment of tariffs and other taxes and that bank bonds and policies 
covering compliance with legal provisions are suitable instruments, widely used by importers and 
traders, for providing guarantees  vis-à-vis the customs authority.642 
7.472.   As previously explained, the Panel agrees with past panels in considering that, in the specific 
circumstances of this dispute, the reasonable administration obligation imposed by  Article  X:3(a) of 
the GATT 1994 requires C olombia to administer the specific bond requirement in 
Decree  No. 2218/2017 in a manner appropriate for the circumstances and based on rationality.  
7.473.   The Panel recalls that the obligation contained in Article  X:3(a) of the GATT 1994 relates to 
the administra tion of laws and regulations, rather than to their substantive content.643 Accordingly, 
the uniformity requirement relates not to the substance of Decree  No. 2218/2017, but to its 
administration. In this respect, a claim with regard to the kind of bond reque sted has to do with a 
substantive characteristic of the specific bond  rather than with the way in which the specific bond is 
administered.644 Even if it could be seen as a question of administration, the Panel observes that 
Colombia has explained why it cons iders that requiring the specific bond to be obtained from a bank 
or insurance company could help in achieving the objective of Decree  No. 2218/2017 as follows: 
"[t]he request for bonds in the knowledge that there is a prior risk study by the insurance com pany 
or bank is effective in combating technical smuggling by underinvoicing, customs fraud and money 
laundering, because the importers have to undergo a personal risk investigation by the insurance 
company or bank."645 Moreover, the Panel agrees with Colomb ia that bank and insurance company 
bonds are instruments used by many of the world 's customs authorities to ensure the payment of 
customs obligations. In the light of these explanations, the Panel does not find any lack of rationality 
in the regulatory cho ice made by Colombia.  
7.474.   Therefore, the Panel rejects Panama 's argument that the specific bond requirement is not  
administered reasonably because the bond has to be obtained from a bank or insurance company.  
7.475.   In conclusion, with respect to the aspect of the sp ecific bond which Panama describes as the 
"second level of administration", this Panel concludes that Panama has failed to demonstrate  that 
the specific bond requirement in Decree  No. 2218/2017 is administered unreasonably, in a manner 
inconsistent with Ar ticle X:3(a) of the GATT 1994.  
                                                
641 Panama 's second written subm ission as respondent, paras. 332 -333. 
642 Colombia 's additional written submission, paras. 124 -127. 
643 Appellate Body Report, EC – Poultry , para. 115. See also Appellate Body Report, EC – Selected 
Customs Matters , para. 219.  
644 Appellate Body Reports, EC – Bananas III , para. 200; and EC – Selected Customs Matters , 
para. 219. 
645 Colombia 's response to Panel question No.  19(c), para. 86.  WT/DS461/RW  
 
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  7.4.5.2.4   Conclusion concerning the consistency of the administration of the specific bond 
with Article  X:3(a) of the GATT 1994  
7.476.   For all the reasons given above, the Panel concludes that Panama has failed to demonstrate  
that the specific bond provided for in Article  7 of Decree  No. 2218/2017 is  administered  in a 
non-uniform, non -impartial or unreasonable manner, inconsistently with Article  X:3(a) of the 
GATT  1994.  
7.4.6   The question of whether the administration of the special  import regime is 
inconsistent with Article  X:3(a) of the GATT 1994  
7.4.6.1   Arguments of the parties  
7.4.6.1.1   Panama  
7.477.   In its panel request, Panama claimed that the special import regime is not  applied in a 
uniform, impartial and reasonable manner, and is therefore inconsist ent with Article  X:3(a) of the 
GATT 1994.646 Subsequently, Panama argued that the administration of the risk management 
system and customs controls via the special import regime is inconsistent with Article  X:3(a) of the 
GATT 1994.647 
7.478.   Panama maintains that Dec ree No. 390/2016 is the Colombian Customs Statute and 
therefore a regulation of general application covered under Article  X:1 of the GATT 1994. Panama 
asserts that, by means of the special import regime, Colombia administers Articles  493 and 486 of 
Decree  No. 390/2016, which govern the risk management system and customs control.648 
7.479.   Panama argues that the text of Article  1 of Decree  No. 1745/2016  and 
Decree  No. 2218/2017 makes it clear that their purpose is to give practical effect to the risk 
management syste m and customs control, where it is a question of imports covered by the 
corresponding decrees.649 
7.480.   Panama points out that the administration of the risk management system and customs 
controls comprises two levels: a first level, which concerns the determinati on and regulation of the 
mechanisms for strengthening the risk management system and customs control in the face of 
possible customs fraud situations associated with the relevant imports, that is, the requirements of 
the special import regime such as docum entary requirements, the participation of import operations 
observers in customs controls, the limitation of the importer 's capacity for action or horizontal rigidity 
of the regime,  and the specific bond;  and a second level, which concerns the specific adm inistrative 
processes for satisfying these requirements, such as, for example, the procedures necessary for 
establishing a specific bond, which partially involves the intervention of third parties (banks or 
insurance companies, translators, lawyers and reg istry offices).650 
7.481.   With respect to the first level of administration , Panama claims, first of all, that the risk 
management system and customs controls are not  administered uniformly  because, given that the 
thresholds are  determined on the basis of conversat ions between government officials and the 
private sector, the customs risk management system is administered arbitrarily. Panama notes that, 
for fixing the thresholds, Colombia  uses the four -digit tariff heading, despite knowing that each 
heading comprises  a multiplicity of relevant products, so that Colombia is according the same 
treatment to dissimilar products which have in common only the fact t hat they all fall under 
heading  62.03.651 
                                                
646 Panama 's request for the establishment of a panel, WT/DS461/22.  
647 Panama 's second written submission as respondent, para. 339.  
648 Panama 's second written submission as respondent, paras. 340 -344; and response to Panel question 
No. 63. 
649 Panama 's second written submission as respondent, paras. 345 -346; and response to Panel question 
No. 63. 
650 Panama 's second written submission as respondent, para. 348.  
651 Panama 's second written submission as respondent, para. 351.  WT/DS461/RW  
 
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  7.482.   Panama also claims that applying the specific bond requirement only to  imports with prices 
equal to or lower than the thresholds and not to imports of other products liable to underinvoicing 
and smuggling, means that the specific bond is not being uniformly administered.652 
7.483.   Panama maintains that concerns that Colombia is treat ing products with different values in 
the same way are also generated by the application of the system of risk management and customs 
controls, since when the value of the imported goods is less than the threshold price, Colombia 
disregards the real (lower ) value of the goods and uses the (higher) threshold price, to obtain an 
artificially high base price which must then be multiplied by 200%.653  
7.484.   Secondly, Panama claims that the risk management system and customs controls are not 
administered impartially, be cause of the participation of import operations observers in the customs 
control of the covered goods under Article  3 of Decrees  No. 1745/2016 and  No. 2218/2017.654 
Panama maintains that the lack of inherent fairness of this aspect is sufficient to demonstra te the 
existence of partial administration, due to the following:  
a. the import operations observer represents the interests of the local industry association655;  
b. the fees of the import operations observer are borne by the industry association so that 
there i s a contractual relationship, which places it objectively in a situation of conflict of 
interest and seriously compromises the impartiality of any action taken during customs 
controls on the relevant goods656;  
c. considering the observer 's experience and knowl edge, it is reasonable to assume that his 
or her alerts, technical opinions and recommendations will be taken seriously into account 
by the customs officer responsible for customs inspection in his assessment of the 
goods657;  
d. the DIAN is obliged to inform t he Joint Commission (which includes the association) about 
the actions of the import operations observers658; 
e. an expert representing the associations can submit an alert, technical opinion or 
recommendation to the customs officer responsible for customs insp ection systematically 
as part of the decision -making structure659;  
f. the import operations observers are able to raise alerts to the customs authority, closely 
observe the conduct of the process of inspection or examination  of the goods, offer 
technical opini ons and  make recommendations they consider relevant to the inspector in 
charge, so that the probability of the domestic industry interfering in the process of 
verification of the imported goods is high660;  
g. the import operations observer forms part of the DI AN's decision -making mechanism, 
since the powers granted to the observer by the Colombian legislation contribute to the 
DIAN's decision -making with respect to the release of the goods661; and  
h. Panama has concerns with respect to the use which the import opera tions observer might 
make of certain confidential information contained in some of the supporting documents 
for the import declaration, such as the list of distributors and the certification of value, 
storage and distribution.662 
                                                
652 Ibid. para. 352.  
653 Panama 's second written submission as respondent, para. 353.  
654 Ibid. paras. 354 -358. 
655 Panama 's second written submission as respondent, para. 359.  
656 Ibid. para. 360.  
657 Ibid. paras. 361 -363. 
658 Panama 's second written submission as respondent, para. 364.  
659 Panama 's second written submission as respondent, para. 365.  
660 Panama 's second written submission as respondent, paras. 366 -367. 
661 Ibid. para. 368.  
662 Ibid. para. 369.  WT/DS461/RW  
 
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  7.485.   With respect to the specific  bond requirement as an element of the special regime, Panama 
also argues that Colombia 's presumption that the value of the customs  taxes together with any 
penalties (principal obligations) will always be equivalent to 200% of the threshold multiplied by t he 
quantity of goods in the corresponding shipment is a biased and unfair opinion and  therefore results 
in impartial administration.663 
7.486.   Thirdly, Panama claims that the risk management system and customs controls are not 
administered in a  reasonable manner be cause the requirement for an  apostilled or legalized official 
translation of the certification of existence abroad for each shipment is unreasonable. For Panama, 
there is no apparent reason why such certification should be required for each shipment or why  
copies should not be acceptable.664 
7.487.   Panama also alleges lack of reasonable administration because the requirement to provide 
certification of intent ion to sell is unreasonable. Panama considers that the sales invoices already 
ensure that the supplier declar ed by the importer is really the source of the imported products and 
are much more relevant for obtaining this information than the certification of intent ion to sell 
because they provide evidence of the final outcome of the transaction.665 
7.488.   Furthermore, Pana ma claims lack of reasonable administration due to the rigidity of the 
special import regime, since importers cannot make changes in the quantity, price or port of entry 
any later than 30 days before importation and since, in the event of these parameters being 
modified, a declaration of correction will not be accepted, and the goods will be seized. Panama 
questions what would be the sense of requiring such detailed information with respect to the quantity 
and price of the goods 30 days in advance, consider ing that the advance declaration serves to give 
early notice of the same information.666 
7.489.   In addition, Panama maintains that the special regime set out in Decree  No. 2218/2017 is 
worse, owing to the fact that non -compliance with the documentary requirements results in the 
seizure of the goods, without the possibility of their being legalized, recovered or reshipped, so that 
a minor error can result in the loss of the goods.667 
7.490.   With respect to the specific bond requirement as an element of the special import reg ime, 
Panama maintains that this requirement is not being administered reasonably, since it is necessary 
to post a specific bond in those cases in which there is already a general bond.668 
7.491.   With respect to the second level of administration of the risk managem ent system and 
customs controls, Panama claims that the risk management system and customs controls are not 
being administered reasonably because Colombia is delegating the processing and management of 
the specific bond to banks and insurance companies, wh ile omitting to establish general criteria for 
compliance by these third parties with  the requirements for applying for a specific bond and the 
factors relevant for its approval.669 
7.4.6.1.2   Colombia  
7.492.   With respect to Panama 's claim concerning the uniform administration requirement, 
Colombia maintains that the methodology for calculating the thresholds was based on the use of 
technical criteria and was  not, as asserted by Panama, agreed with the private sector. Colombia 
states that the methodology was socia lized with the private sector, but at no point was determined 
jointly with the private sector, and the criteria used were not the result of chance.670 
7.493.   Colombia also maintains that the factual circumstances in the textile and footwear sector 
are substantially  different from those in other sectors exposed to illicit trading. Colombia maintains 
that the specific bond is of special importance for fighting money laundering through underinvoicing 
                                                
663 Panama 's second written submission as respondent, para. 371.  
664 Panama 's second written submission as respondent, paras. 372 -373. 
665 Panama 's second written submission as respondent, para. 374.  
666 Panama 's second written submission as respondent, paras. 375 -381. 
667 Panama 's second written submission as respondent, paras. 382 -387. 
668 Panama 's second written submission as respondent, para. 388.  
669 Panama 's second written submission as respondent, para. 390.  
670 Colombia 's additional written su bmission, para. 129.  WT/DS461/RW  
 
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  and that other kinds of smuggling require different strategies. Colom bia asserts that Panama 's claim 
disregards the technical process and practical reasons that led to the measure being designed to 
have a limited scope of application. Colombia also submits that the Colombian authorities were 
unable to establish that money l aundering, if not customs fraud, is involved in other types of 
underinvoicing, and that Colombia has demonstrated its problem with money laundering through 
the underinvoicing of footwear, textiles and clothing.671 
7.494.   Colombia also points out that the measure wa s modified by Decree  No. 2218/2017  and that, 
under this new Decree, the value of the bond is determined in accordance with the difference 
between the import value and the threshold, so that Panama 's claim is not relevant in the light of 
the new measure.672 
7.495.   With respect to Panama 's claim concerning the impartial administration requirement, 
Colombia maintains that Article  183 of Decree  No. 390/2016 establishes that the import operations 
observers do not represent the interests of traders opposed to importers or  exporters,  and that the 
trade associations which propose such observers are also importers or exporters of the goods. 
Colombia adds that the observers are selected from lists of candidates submitted by the associations, 
approved by the Joint National Comm ission for Tax and Customs Management and that their function 
is limited to closely observing the conduct of the process of evaluating a specific type of goods and 
providing their collaboration and cooperation when requested  by the customs authority, inclu ding a 
technical report with respect to the tariff classification of the product, the identification and 
description of the product, and the quantity, weight and price of the goods. Colombia indicates that, 
in short, the observer provides support for the c ustoms inspector in carrying out the examination 
process.673 
7.496.   Colombia adds that the function of the import operations observers is geared to offering 
support for the work of combating smuggling, underinvoicing and any other kind of practice that 
might consti tute customs fraud, and that if what Panama means to say is that the risk management 
system is discriminatory because it detects those presenting a risk of committing customs fraud by 
means of underinvoicing and money laundering, it would be right, but thi s kind of discrimination is 
not contrary to WTO rules.674 
7.497.   Colombia also asserts that the role of the observers has been envisaged in the Colombian 
customs legislation since well before Decree  No. 390/2016; that the observers are available for all 
sorts of op erations and are not restricted to any particular sector; that the use of observers is totally 
voluntary; that they operate at the request of the importing trade association; that the association 
pays their fees; and that in no way do they constitute a req uirement for the importation of goods. 
Colombia argues that, for these reasons, the role of the observer in the importation of goods covered 
under Decrees  No. 1745/2016  and No. 2218/2017 does not favour one party or one side more than 
another, is objective , unbiased, fair and just, as evidenced by Exhibits COL -16 and COL-21.675 
7.498.   With respect to Panama 's claim concerning the reasonable administration requirement, 
Colombia states that it has amply demonstrated the necessity and reasonableness of the 
requirement for an apostilled or legalized official translation of the "certification of existence abroad" 
for each shipment in its fight against illicit trading. Colombia maintains that it is important to have 
certification of existence because many front companies a broad offer to carry out fictitious 
transactions and customs cooperation is currently insufficient to verify the existence of a foreign 
supplier.676 
7.499.   With regard to the requirement to furnish certification of intent ion to sell, Colombia says that 
it has shown  that the sales invoice can easily be forged and does not provide the degree of certainty 
that Colombia seeks to ensure in controlling its imports,  and that numerous abuses in connection 
                                                
671 Colombia 's additional written submission, para. 130.  
672 Colombia 's additional written submission, para. 131.  
673 Colombia 's additional written submission, paras. 133 -135. 
674 Colombia 's additional written submission, paras. 136 -137. 
675 Colombia 's additional written submission, paras. 138 -139. 
676 Colombia 's additional written submission, para. 141.  WT/DS461/RW  
 
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  with the provision of false information in import documents have led Colombia to request more 
information.677 
7.500.   With respect to Panama 's argument concerning the rigidity of the system, Colombia 
maintains that under the Colombian customs regime it is possible to correct and amend a certain 
kind of minor errors in the import docu ments, so that Panama is misreading the legislation in 
question, in particular Article  234 of Decree  No. 2685/1999, which permits the correction of the 
import declaration.678 
7.501.   With regard to reshipment not being permitted and the seizure of the goods, Colombi a 
maintains that Panama is forgetting that these goods are used for the purpose of carrying out illicit 
trading operations and that allowing reshipment of the goods would lead to the same goods entering 
through a different Colombian port with false papers.  Colombia adds that, considering that the 
objective of the measure and the reason for it is the control of goods deriving from illegal 
transactions, the prohibition on reshipment is reasonable in the light of its objective, cause and 
basis. Colombia adds t hat if Panama 's claim is that the risk management system is unreasonable 
because it makes it possible to detect violators of Colombian customs law, Panama 's argument 
simply demonstrates the risk that Colombia is trying to prevent, namely that of there bein g importers 
who go on deliberately violating the Colombian legislation by laundering money and doing violence 
to society.679 
7.4.6.2   Analysis by the Panel  
7.502.   As indicated in paragraph 7.143  above, the Panel's task will be to determine whether, as 
Panama claims, the special import regime is not applied in a uniform, impartial and reasonable 
manner and is therefore inconsistent with Article X:3(a) of the GATT 1994.680  
7.503.   As explained in section 7.4.3.1  above, the Panel will begin by examining whether Panama 
has identified a legal instrument of the kind described i n Article X:1 of the GATT 1994. If so, it will 
proceed to determine whether Panama has demonstrated that the legal instrument identified is being 
administered by Colombia. If the reply to this last question is also affirmative, it will examine whether 
Panama has demonstrated that the legal instrument identified is not being administered in a uniform, 
impartial or reasonable manner.  
7.4.6.2.1   The question of w hether Panama has identified a legal instrument of the kind 
described in Article X:1 of the GATT 1994  
7.504.   The firs t question to be examined by the Panel is whether the legal instruments identified 
by Panama are of the kind described in Article X:1 of the GATT 1994. As the Panel has already 
explained with respect to the specific bond, Panama has identified Decree No. 3 90/2016 and, in the 
alternative, Decree No. 2218/2017, as legal instruments of the kind described in Article X:1 of the 
GATT 1994 .681 
7.505.   For the same reasons as set out in its analysis concerning the specific bond in 
Section  7.4.5.2.1  above, the Panel considers that Panama has met its initial burden of identifying a 
legal instrument of the kind described in Article X:1 of the GATT 1994.  
7.4.6.2.2   The question of w hether the legal instrument identified by Panama is being 
"administered" by Colombia  
7.506.   Having established that the legal instruments identified by Panama fall within those 
described in Article X:1 of the GATT 1994 and hence  within the scope of Article X:3(a), the Panel 
will examine whether Panama has demonstrated that those instruments are being "administered" 
by Colombia.  
                                                
677 Colombia 's additional written submission, para. 142.  
678 Colombia 's additional written submission, para. 143.  
679 Colombia 's additional written s ubmission, paras. 144 -146. 
680 Panama's request for the establishment of a panel, WT/DS461/22.  
681 Panama's second written submission as respondent, paras.  340-344; and response to Panel question 
No. 63.  WT/DS461/RW  
 
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  7.507.    As observed in Section  7.4.4 above, the possible inconsistency of the administration of the 
general customs regime through the special import regime  with Article X:3(a) of the GATT 1994 
does not fall within the Panel 's terms of reference. Irrespectiv e of the foregoing, Panama's argument 
that, by means of the special import regime, Colombia is administering Articles 493 and 486 of 
Decree No.  390/2016, which regulate the risk management system and customs control, is not 
convincing.682 Panama argues that the text of Article  1 of Decrees No. 1745/2016 and 
No. 2218/2017 makes it clear that their purpose is to give practical effect to the risk management 
system and customs control, where it is a question of imports covered by the corresponding 
decrees.683 
7.508.   With respect to customs control, Article 486 of Decree No. 390/2016684 provides that 
customs control comprises a series of measures to be applied in order to ensure fulfilment of the 
regulations within the remit of the customs administration, that customs control s shall bear on 
foreign trade operations and the parties involved therein, and that such controls shall be carried out 
selectively, using the most effective technological means, inspection equipment and risk 
management techniques.  
7.509.   Article 486 further provi des that customs controls may in particular consist in examining 
goods, taking samples, verifying customs declaration data and the existence and authenticity of 
supporting documents, examining the accounts and other records of foreign trade operators, 
inspecting means of transport, inspecting luggage and goods carried by persons, and carrying out 
investigations and other similar acts.  
7.510.    Article 1 of Decree No. 2218/2017, entitled "Purpose", provides that the said Decree 
"establishes mechanisms for strengthen ing the system of risk management and customs control in 
the face of possible situations of customs fraud associated with imports of fibres, yarns, textiles, 
clothing and footwear, irrespective of the country of origin and/or provenance."  
7.511.   The Panel notes that, although Article 486 defines the term customs controls and describes 
the form that such customs controls can take, it does not specifically establish a form of customs 
control that has to be applied.  
7.512.   In the Panel's opinion, it is Decree No. 2218/2017  itself which establishes a special system 
of customs control to be applied by the Colombian customs authorities with respect to imports of 
the products covered. In other words, the customs control system that applies to imports of the 
products covered exi sts, in essence, by virtue of Decree  No. 2218/201 7, and not by virtue of 
Article  486 of Decree No. 390/2016, as Panama claims.  
7.513.   With respect to the risk management system, Article 493 of Decree No.  390/2016685 
provides that the DIAN: a) may use risk managemen t practices and procedures in order to prevent 
                                                
682 Panama's second written submission as respondent, paras. 340 -344; and response to Panel question 
No. 63.  
683 Panama's second written submission as respondent, paras. 345 -346; and response to Panel question 
No. 63. 
684 Article 486 of Decree No. 390/2016 provides as follows:  
Customs control . Customs control co mprises a series of measures to be applied in order to 
ensure fulfilment of the regulations  within the remit of  the Customs Administration.  
Customs controls shall bear on foreign trade operations and the parties involved therein. Such 
controls shall be tho se that are  essential  to achieve the institutional objectives  and shall be 
carried out selectively, using the most effective technological means, inspection equipment and 
risk management techniques to optimize the administrative effort. Electronic techniqu es shall be 
used for exchanging information between customs administrations and with other official bodies.  
Customs controls may in particular consist in examining goods, taking samples, verifying 
customs declaration data and the existence and authenticity  of supporting documents, examining 
the accounts and other records of foreign trade operators, inspecting means of transport, 
inspecting luggage and goods carried by persons, and conducting investigations and other similar 
acts. 
685 Article 493 of Decree No.  390/2016 provides as follows:  
Risk management system . The National Customs and Excise Directorate may use risk 
management practices and procedures with a view to preventing or combating the use or 
directing of trade for purposes which undermine national s ecurity or breach customs legislation.  
To this end, and with due observance of the rules on habeas data and the handling of personal 
information, the National Customs and Excise Directorate shall use databases for holding WT/DS461/RW  
 
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  or combat the use or directing of trade for purposes which undermine national security or breach 
customs legislation; b) shall use databases for holding information on, among other things, 
operations and persons acting before it , in order to assess the security of the foreign trade logistics 
chain; and c) shall, in implementing the risk management system to ensure the enforcement of 
customs obligations, focus its control activities on high -risk operations.  Article 493 of Decree 
No. 390/2016 accordingly allows for the implementation of risk -monitoring mechanisms, 
establishment of control measures at goods entry and exit points, and use of other duly recognized 
international mechanisms.  
7.514.   Specifically with resp ect to, among other things, the control of money laundering, Article  493 
of Decree No. 390/2016 provides for monitoring of the cross-border movement of high -risk goods 
and allows for controls to be carried out within the framework of multilateral agreement s ratified by 
the Colombian Government.  
7.515.   The Panel observes that, although Article 493 authorizes the DIAN to use risk management 
practices and procedures and provides for the form that such risk management can take, it does not 
specifically establish a for m of risk management that has to be applied .686 
7.516.   In the Panel's view, it is Decree No. 2218/2017 itself which establishes a special risk 
management methodology to be applied by the Colombian customs authorities. In other words, the 
risk management methodology  that applies to imports of the products covered exists, in essence, 
by virtue of Decree No. 2218/2017, and not by virtue of Article 486 of Decree No. 390/2016.  
7.517.   Decree No. 2218/2017 establishes a special regime for a specific group of products, namely 
yarns, fibres, textiles, clothing, made up textile articles and footwear with prices below the 
thresholds, which contains a set of special rules applicable to the import of said products and 
including a special risk management and customs control methodology. This special regime exists 
by virtue of Decree No. 2218/2017 and not by virtue of Decree No. 390/2016, as Panama claims. 
Hence, the administration by the DIAN of this special import regime constitutes an administration of 
Decree No. 2218/2017, and not an a dministration of Decree No. 390/2016.  
7.518.    Panama has argued, at least with respect to the specific bond, that, in any case, if the Panel 
were to consider that Decree No. 2218/2017 is not an act administering Decree No.  390/2016, this 
would mean that Decree No . 2218/2017 imposes a substantive requirement and, at the same time, 
the specific parameters for its administration.  
7.519.   The Panel notes in this regard that Panama has, under Article X:3(a) of the GATT 1994, 
challenged Decree No. 2218/2017 as a legal instrumen t which regulates the application of the special 
import regime, and not the way in which the Colombian customs authorities apply or administer that 
regime in practice. In fact, Panama has not furnished evidence as to how the Colombian customs 
                                                
information on, among other things , operations and persons acting before the Entity, in order to 
assess the security of the foreign trade logistics chain.  
In implementing the risk management system, the National Customs and Excise Directorate 
shall, with a view to ensuring the enforcement of customs obligations, focus its control activities 
on high -risk operations, in the interests of safeguarding and facilitating international trade . It 
may accordingly implement risk -monitoring mechanisms, establish control measures at goods 
entry and exit  points, and use other duly recognized international mechanisms.  
With respect to environmental protection, health protection, agricultural health, border security, 
preventing the proliferation of weapons, controlling money laundering and the funding of 
terrorism, the cross -border movement of high -risk goods shall be monitored. Such monitoring 
may be carried out within the framework of multilateral agreements ratified by the Colombian 
Government.  
Any allusion that other customs regulations may make to the ri sk administration system is to be 
understood as referring to the risk management system established in this Decree.  
Paragraph . The risk management system of the National Customs and Excise Directorate may 
be coordinated with the risk management systems of the other control bodies related to customs 
and foreign trade operations, such as Migración Colombia, ICA [Colombian Agricultural Institute], 
INVIMA [National Food and Drug Surveillance Institute] and the National Police.  
686 The Panel notes that whereas Art icle 493 of Decree No.  390/2016 provides that any allusion that 
other customs regulations may make to the risk administration system is to be understood as referring to the 
risk management system established in that decree, it does not see in said decree a  risk management system 
to be administered within the meaning of Article  X:3(a) of the GATT 1994.  
 WT/DS461/RW  
 
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  authorities a pply the special import regime in practice. Panama argues that various aspects of the 
special import regime, in Decree No. 2218/2017, give rise to the non -uniform, partial or 
unreasonable administration of the risk management and customs control system und er that regime.  
7.520.   The Panel recalls that it is possible to challenge a legal instrument as such  under 
Article  X:3(a) of the GATT 1994, when the substantive content of that legal instrument regulates 
the administration of the rules covered by Article  X:1 of t he GATT 1994, but that, to establish its 
claim, the complainant must discharge the burden of substantiating how and why those provisions 
necessarily lead to  impermissible administration of the legal instrument in question. The Panel 
cannot therefore exclud e that some aspects of the special import regime in Decree  No. 2218/2017 
might necessarily lead to the non -uniform, non -impartial or unreasonable administration of that legal 
instrument, and, in particular, of its risk management and customs control system . An examination 
therefore follows as to whether Panama has demonstrated that the aspects of the special import 
regime in Decree  No. 2218/2017 that it is challenging necessarily lead to  impermissible 
administration of the provisions governing that regime, as contained in Decree  No. 2218/2017.  
7.4.6.2.3   The question of w hether the special import regime in Decree No. 2218/2017 is 
not being administered uniformly, impartially and reasonably  
7.4.6.2.3.1   Introduction  
7.521.   As previously explained, Panama has made a series of claims of inco nsistency with 
Article  X:3(a) of the GATT 1994, with respect to various aspects of the customs control and risk 
management system of the special import regime, as contained in Decree  No. 2218/2017.  
7.522.   As in the case of the specific bond, Panama has identified  two levels of administration with 
respect to the customs control and risk management system of the special import regime: (a)  a first 
level of administration, which, according to Panama, concerns the determination and regulation of 
the mechanisms for stre ngthening the risk management system and customs control in the face of 
possible customs fraud situations associated with the relevant imports, that is, the requirements of 
the special import regime such as documentary requirements, the participation of im port operations 
observers, the horizontal rigidity of the regime, and the specific bond; and (b) a second level of 
administration, which, according to Panama, concerns the specific administrative processes for 
satisfying these requirements, such as, for ex ample, the procedures necessary for establishing a 
specific bond, which partially involves the intervention of third parties (banks or insurance 
companies, translators, lawyers and registry offices).687 
7.523.   Without entering into an examination of the relevance o f the classification used by 
Panama,  and with a view to facilitating the analysis of the various claims that have been made, the 
Panel will use the classification proposed by Panama for the purposes of its analysis.  
7.4.6.2.3.2   Panama's claims with respect to the "fi rst level of administration"  
Claim with respect to the lack of uniform administration  
7.524.   Panama makes various claims according to which the special import regime, insofar as the 
risk management system and customs controls are concerned, is not being administe red uniformly 
because: a) the thresholds are determined on the basis of conversations between government 
officials and the private sector; b) the thresholds are determined on the basis of four -digit tariff 
headings; c) the specific bond applies only to the  importation of textiles and footwear classified  
under headings 61, 62 and 64 of Colombia 's Customs Tariff at prices equal to or lower than the 
established thresholds; and d) the amount of coverage of the bond disregards the real value of the 
goods and use s the threshold price. The Panel will examine each of these arguments below.  
7.525.   With respect to the first argument, Panama claims that the administration of the risk 
management system and customs controls of the special import regime is not uniform because, 
                                                
687 Panama's second written submission as respondent, para.  348. WT/DS461/RW  
 
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  given that the thresholds are determined on the basis of conversations between government officials 
and the private sector, the customs risk management system is administered arbitrarily.688  
7.526.   For its part, Colombia maintains that the methodology was based on the use of technical 
criteria and was  not, as asserted by Panama, agreed with the private sector. Colombia states that 
the methodology was socialized with the private sector, but at no point was determined jointly with 
the private sector and the criteria u sed were not the result of chance .689 
7.527.   As previously explained, the Panel agrees with past panels in considering that the uniformity 
requirement commits Members to "uniformity of treatment in respect of persons similarly 
situated"690 and to consistent and predictable application of the laws.691 
7.528.   It is this Panel's understanding that Panama's argument with respect to the lack of uniformity 
of the risk management system and customs controls relates to the lack of uniformity in the 
Colombian customs legislation, owing to the fact that , in Panama's view, the thresholds of the special 
import regime were established arbitrarily. As observed in Section 7.4.4 above, the possible 
inconsistency of the administration of the general customs regime with Article  X:3(a) of the 
GATT  1994 does not fall within the Panel 's terms of reference. Moreover, as explained in 
paragraph  7.507  above, Panama's argument according to which Articles 483 and 496 of Decree 
No. 390/2016 are being administered through Decree  No. 2218/2017 is not convincing.  
7.529.   In the Panel's opinion, the ob ligation concerning uniform administration in the specific 
circumstances of this dispute requires Colombia to administer  the risk management and customs 
control system of the special import regime in Decree  No. 2218/2017 consistently and predictably, 
by ac cording uniform treatment to all the covered operations that are in a similar situation. It does 
not seem to the Panel that the uniform administration requiremen t of Article  X:3(a) of the 
GATT  1994 obliges Colombia to establish the thresholds of the specia l import regime in a particular 
manner.  
7.530.   Furthermore, the Panel considers that the fact that Colombia announces the thresholds, 
which correspond to the commercial risk profiles determined by the DIAN, may help to give greater 
predictability to the special i mport regime.  
7.531.   As to the evidence submitted by Panama, the Panel does not consider that a newspaper 
article relating to textiles, which reports that Colombia's Minister of Trade, Industry and Tourism 
stated that "[t]he Government and textile companies are e xploring tools to assist the sector in the 
area of customs control, as has been done in the clothing sector"692 is sufficient evidence to establish 
that the thresholds are determined on the basis of conversations between government officials and 
the private sector.  
7.532.   In any event, as already explained above, a claim with respect to the determination of the 
thresholds has to do with a substantive characteristic of the special import regime  rather than with 
the way in which that regime is administered.  
7.533.   For the above reasons, the Panel rejects Panama's argument that the risk management 
system and customs controls of the special import regime are not uniformly administered because 
                                                
688 Panama presents as evidence an article published in the Vanguardia  newspaper dated 
17 August  2017, referring solely to textiles (yarns), in which the following is stated:  
"The Government and textile companies are exploring tools to assist the sector in the area of 
customs control, as has been done in the clothing sector", said the Minister.  
Textile companies and the Government will work with the DIAN on the decree, which will set a 
price threshold for the importation of textile products such that those entering below the 
specified threshold will be subject to control by the customs authorities.  
The Minister went on to explain that "[t]he limit has not yet been set, but the Ministry is working 
on it as of now. In due course, the draft decree will be published for 15 days for comments by 
the various stakeholders, after which, following any observatio ns and adjustments, it will be 
forwarded for the respective signatures".  
("New decree on customs control for textiles to be issued", Vanguardia  (Exhibit  PAN-65)). 
689 Colombia's additional written submission, para.  129. 
690 Panel Report, US – Stainless Steel (Korea) , para.  6.51. 
691 Panel Report, Argentina – Hides and Leather , para.  11.83.  
692 "New decree on customs control for textiles to be issued ", Vanguardia (Exhibit PAN -65). WT/DS461/RW  
 
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  the thresholds are determined on the basis of conversations between government offic ials and the 
private sector.  
7.534.   Panama also argues as to a lack of uniformity in the administration of the risk management 
system and customs controls because the thresholds are determined on the basis of four -digit tariff 
headings. According to Panama, Colom bia accords the same treatment to dissimilar products which 
have as their only common feature the fact of coming under heading 62.03.693 The Panel recalls that 
it has already addressed a similar argument with respect to the specific bond. For the same reason s 
as set out in paragraphs 7.439 -7.441  above, in the context of the claims relating to the specific 
bond, the Panel rejects Panama's argument.  
7.535.   Panama also claims that the fact of applying the specific bond requirement only to impo rts 
with prices equal to or lower than the thresholds and not to imports of other products liable to 
underinvoicing and smuggling, means that the specific bond, as an aspect of the special import 
regime, is not being administered uniformly.694 The Panel refe rs to its findings on this matter in 
paragraphs 7.427 -7.430  above, in the context of the claims concerning the specific bond, which are 
equally applicable to consideration of the bond as part of the special import regime. The Panel 
therefore rejects Panama's argument, in the context of the clai ms concerning the risk management 
system and customs controls, that the specific bond requirement is not administered in a uniform 
manner, owing to the fact that it applies solely to textiles and footwear under headings 61, 62 and 
64 with prices equal to o r lower than the thresholds, and not to other products similarly situated.  
7.536.   Panama maintains that concerns that Colombia is treating products with different values in 
the same way are also generated by the application of the system of risk management and cu stoms 
controls, since when the value of the imported goods is less than the threshold price, Colombia 
disregards the real (lower) value of the goods and uses the (higher) threshold price, to obtain an 
artificially high base price which must then be multipl ied by 200%.695 For the same reasons as set 
out in paragraphs 7.433 -7.436  above in connection with the claims concerning the specific bond, 
the Panel rejects Panama's argument, in the context of the claims concerning the risk management 
system and customs controls, that the specific bond requirem ent is not being administered uniformly  
because of the bond 's amount of coverage . 
7.537.   In conclusion, with respect to the aspects of the special import regime which Panama 
characterizes as the "first level of administration", the Panel concludes that Panama has  failed to 
demonstrate  that the risk management system and customs controls of the special import regime, 
as contained in Decree No. 2218/2017, are administered non -uniformly, in a manner inconsistent 
with Article X:3(a) of the GATT 1994.  
Claim with respec t to the lack of impartial administration  
7.538.   Panama makes various claims according to which the special import regime is not being 
administered impartially owing to: a) the participation of import operations observers in customs 
controls; and b) the use of th e 200% percentage for calculating the coverage amount of the specific 
bond as part of the special import regime. The Panel will examine each of these arguments below.  
7.539.   With respect to the first argument, Panama claims that the risk management system and 
customs controls are not administered impartially, because of the participation of import operations 
observers in the customs control of the covered goods under Article  3 of Decrees  No. 1745/2016 
and No. 2218/2017.696 Panama maintains that the lack of inherent fairness of this aspect is sufficient 
to demonstrate the existence of partial administration.697 
7.540.   For its part, Colombia maintains that Article  183 of Decree  No. 390/2016 establishes that 
the import operations obser vers do not represent the interests of traders opposed to importers or 
exporters,  and that the trade associations which propose such observers are also importers or 
exporters of the goods. Colombia adds that the observers are selected from lists of candida tes 
submitted by the associations, approved by the Joint National Commission for Tax and Customs 
                                                
693 Panama's second written submission as respondent, para.  351. 
694 Ibid. para.  352. 
695 Panama's second written submission as respondent, para.  353. 
696 Panama's second written submission as respondent, paras.  354-358. 
697 Ibid. paras.  359-369. WT/DS461/RW  
 
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  Management and that their function is limited to closely observing the conduct of the process of 
evaluating a specific type of goods and providing their collab oration and cooperation when requested  
by the customs authority, including a technical report with respect to the tariff classification of the 
product, the identification and description of the product, and the quantity, weight and price of the 
goods. Colo mbia indicates that, in short, the observer provides support for the customs inspector in 
carrying out the examination  process.698 Colombia argues that the role of the observer in the 
importation of goods covered under Decrees  No. 1745/2016  and No. 2218/201 7 does not favour 
one party or one side more than another, is objective, unbiased, fair and just, as evidenced by 
Exhibits COL -16 and COL-21.699 
7.541.   The Panel observes that, pursuant to Article 6 of Decree No.  2218/2017700, the DIAN shall 
provide the import operat ions observers with certain information established by the DIAN itself. 
Pursuant to Resolution No. 000017 of 22 March 2017701, issued by the DIAN itself, that information, 
which is located in the records of the import declarations submitted by the importers of the covered 
products, consists in: form number, the importer's tax identification number (NIT), the importer's 
family name and first name or business name, the declarant's tax identification number, business 
name of the authorized declarant, type of dec laration, name of the exporter or supplier abroad, code 
of the country of provenance, exchange rate, tariff subheading, code of the country of origin, 
agreement code, gross weight in kilograms, net weight in kilograms, physical unit code, quantity, 
f.o.b. value in dollars, customs value, self -assessment and description of the goods, declaration 
acceptance number and date.  
7.542.   Article 6 of Decree No. 2218/2017 also indicates that the observer "shall provide cooperation 
and collaboration required by the customs  authority, including the technical report, where 
appropriate, on the tariff classification, identification, quantity, description, weight and price of the 
goods, among other aspects" . 
7.543.   Furthermore, Article 6 of Decree No. 2218/2017 specifies that the role of  the observer "shall 
be confined to analysing the information and generating alerts to the customs authority, as well as 
closely monitoring the conduct of the inspection or examination  process" with respect to the covered 
goods. It also specifies that the customs authority shall safeguard the confidentiality of the 
information, taking into account the content  of other relevant legal provisions.  
7.544.    Article  183 of Decree No.  390/2016702 and Article  74-1 of Decree No.  2685/1999703, for 
their part, specify that the o bservers shall be selected from lists of candidates submitted by the 
trade associations, approved by the Joint National Commission for Tax and Customs Management, 
chaired by Colombia's Minister of Finance.  
7.545.   As previously explained, the Panel agrees with pas t panels in considering that the impartial 
administration requirement in  Article  X:3(a) relates to the administration of the relevant laws and 
                                                
698 Colombia's additional written submission, paras.  133-135. 
699 Colombia's additional wri tten submission, paras.  138-139. 
700 Article  6 of Decree No.  2218/2017 provides as follows:  
Import Operations Observers . The National Customs and Excise  Directorate shall provide the 
Import Operations Observers with information to be constituted by resolutio n of that entity, 
which shall be issued within sixty  (60) calendar days following the entry into force of this Decree; 
the resolution in question shall also establish the procedure for the provision of the information 
to the observers.  
The observer shall p rovide cooperation and collaboration required by the customs  authority, 
including the technical report, where appropriate, on the tariff classification, identification, 
quantity, description, weight and price of the goods, among other aspects.  
For the purp oses of this Decree, the role of the observer shall be confined to analysing the 
information and generating alerts to the customs authority, as well as closely monitoring the 
conduct of the inspection and examination  process with respect to  goods under the headings 
listed in Article 3 of this  Decree.  
The customs authority shall safeguard the confidentiality of the information, taking into account 
the provisions of the Political Constitution and Laws 863 of 2003 and 1712 of 2014 and other 
amen ding or supplementary rules.  
701 Article  1 of Resolution No. 000017/2017 (Exhibit  COL-46). 
702 Decree  No. 390/2016 ( Exhibit  PAN-4). 
703 Decree  No. 2685/1999 ( Exhibit  PAN-3). WT/DS461/RW  
 
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  regulations in a just, fair, objective, unbiased and unprejudiced manner .704 Therefore, the impartial 
administratio n obligation imposed by  Article  X:3(a) of the GATT 1994, in the specific circumstances 
of this dispute, requires Colombia to administer its special import regime in Decree  No. 2218/2017 
in a just, fair , objective, unbiased and unprejudiced manner.  
7.546.   The Pane l recalls that Panama has challenged Decree  No. 2218/2017 as an instrument which 
governs the administration of the special import regime, so that it is for Panama to discharge the 
burden of substantiating how and why the existence of the role of the observ ers necessarily leads 
to non -impartial administration of the special import regime in Decree No. 2218/2017.  
7.547.   On the basis of the relevant legal provisions, this Panel notes five important characteristics 
of the role of the import operations observers:  
a. They are selected from lists of candidates submitted by the trade associations and 
approved by the Joint National Commission for Tax and Customs Management.  
b. Their function is confined to analysing the information provided by the DIAN and 
generating alerts to th e customs authority, as well as closely monitoring the conduct of 
the inspection or examination  process with respect to the covered goods.  
c. As part of those functions, when so requested by the customs authority, they may submit 
technical reports on the tari ff classification, identification, quantity, description, weight 
and price of the goods, among other aspects.  
d. Observers receive detailed information consisting in the importer's personal particulars 
and information on the products to be imported.  
e. The custo ms authority is duty bound to safeguard the confidentiality of the confidential 
information, pursuant to Colombia's relevant legislation.  
7.548.   The Panel also notes that the import operations observers do not decide whether goods are 
to be subject to the special  import regime. In other words, the observers are not empowered to 
have any say in the operations until the goods are declared to be below the thresholds and have 
physically arrived in Colombia. When goods are presented to them, there is already, for the 
Colombian authorities, a suspicion  of underinvoicing. Their participation does not, therefore, 
determine that the special import regime is to be applied.  
7.549.   The Panel understand s that Panama has concerns as to the interests of the import operations 
observers, their capacity to influence and how the information received is used. However, in the 
Panel's opinion, the characteristics of the role of the import operations observers, as presented in 
the relevant legislation, are not sufficient to demonstrate that the existence of that role necessarily 
leads to non -impartial administration of the special import regime in Decree No. 2218/2017. To be 
able to determine whether the intervention of the import operations observers leads to non -impartial 
administration of the special import regime, the Panel would require evidence as to the manner in 
which the observers are selected in practice, how they cooperate with the customs authority in 
practice, how they are able to influence the actions of the customs officers, etc. Pa nama has not 
provided relevant evidence in that regard. The Panel recalls that claims of violation of Article X:3(a) 
are serious and "should not be brought lightly"705, for which reason it rejects Panama's argument 
that the risk management system and the cus toms controls of the special import regime are not 
administered impartially because of the participation of import operations observers.  
7.550.   With respect to the specific bond requirement as an element of the special import regime, 
Panama also claims that Colom bia's presumption that the value of the customs taxes together with 
any penalties (principal obligations) will always be equivalent to 200% of the threshold multiplied 
                                                
704 Panel Reports, Thailand – Cigarettes (Philippines) , para.  7.899 and China – Raw Materi als, 
para. 7.694. (The Appellate Body declared the Panel's analysis moot and of no legal effect on procedural 
grounds.)  
705 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para.  217. See also 
Appellate Body Report, US – Shrimp , para.  183. WT/DS461/RW  
 
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  by the quantity of goods in the corresponding shipment is a biased and unfair opinion an d therefore 
results in impartial administration.706 
7.551.   For the same reasons as set out in paragraphs 7.445 -7.449 above in relation to the claims 
concerning the specific bond, the Panel rejects Panama's argument, in the context of the claims 
concerning the risk management and customs control system, that the specific bond requirement is 
not administered impartially, because of the coverage amount .  
7.552.   In conclusion, with respect to the aspects concerning the special import regime which 
Panama characterizes as the "first level of administration", the Panel concludes that Panama has 
failed to demonstrate  that the risk management system and customs controls of the special import 
regime in Decree No. 2218/2017  are administered in a non-impartial  manner, inconsistently with 
Article  X:3(a) of the GATT 1994.  
Claim with respect to the lack of reasonable adminis tration  
7.553.   Panama makes various claims according to which the special import regime is not  
administered reasonably owing to: (a) the requirement for an apostilled or legalized official 
translation of the certification of existence abroad for each shipment; (b ) the requirement to provide 
certification of intent ion to sell; (c) its rigidity, since importers cannot make changes in the quantity, 
price or port of entry any later than 30 days before importation and since, in the event of these 
parameters being modif ied, a declaration of correction will not be accepted and the goods will be 
seized; and (d) the requirement to furnish a specific bond in those cases in which there is already a 
general bond. The Panel will examine each of these arguments below.  
7.554.   Panama cla ims that the risk management system and customs controls are not being 
reasonably administered because the requirement for an  apostilled or legalized official translation of 
the certification of existence abroad for each shipment is unreasonable. For Panam a, there is no 
apparent reason why such certification should be required for each shipment or why copies should 
not be acceptable.707 
7.555.   Colombia states that it has amply demonstrated the necessity and reasonableness of the 
requirement for an apostilled or lega lized official translation of the "certification of existence abroad" 
for each shipment in its fight against illicit trading. Colombia maintains that it is important to have 
certification of existence because many front companies abroad offer to carry out fictitious 
transactions and customs cooperation is currently insufficient to verify the existence of a foreign 
supplier.708 
7.556.   As previously explained, the Panel agrees with past panels in considering that the reasonable 
administration requirement relates to "a dministration that is equitable, appropriate for the 
circumstances and based on rationality".709 Therefore, the obligation concerning reasonable 
administration imposed by  Article  X:3(a) of the GATT 1994, in the specific circumstances of this 
dispute, require s Colombia to administer its special import regime in Decree No. 2218/2017 in a 
manner that is appropriate for the circumstances and based on rationality.  
7.557.   The Panel recalls that Panama has challenged Decree  No. 2218/2017 as an instrument which 
governs the administration of the special import regime, so that it is for Panama to discharge the 
burden of substantiating how and why the requirement to obtain an apostilled or legalized official 
translation of the certification of existence abroad for each shipment  necessarily leads to 
unreasonable administration of the special import regime in Decree No. 2218/2017.  
7.558.   In the Panel's opinion, the fact of requiring an apostilled or legalized official translation of 
the certification of existence abroad for each shipment  does not appear to be inherently 
unreasonable and as such inconsistent with WTO obligations. Panama considers it unreasonable for 
Colombia to impose this requirement, when it could opt not to require certification for each shipment 
or to accept copies of the certification. The Panel understand s that Panama would prefer that its 
                                                
706 Panama's second written submission as respondent, para.  371. 
707 Panama's second written submission as respondent, paras.  372-373. 
708 Colombia's additional written submission, para.  141. 
709 Panel Reports, China – Raw Materials , para. 7.696. (The Appellate  Body declared the Panel's analysis 
moot and of no legal effect on procedural grounds.)  WT/DS461/RW  
 
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  commercial operators not have to comply with the requirement to submit an apostilled or legalized 
official translation of the certification of existence abroad for each shipment. Ho wever, it does not 
find this argument to be sufficient to establish that the requirement in question necessarily leads to 
unreasonable administration of the risk management and customs control system of the special 
import regime.  
7.559.   Furthermore, Colombia has explained that it is important to have a certificate of existence 
abroad since many front companies abroad offer to carry out fictitious transactions. In the light of 
this explanation, the Panel does not consider the imposed requirement to be inappropriate  for the 
circumstances or not to be based on rationality.  
7.560.   For the above reasons, the Panel rejects Panama's argument that the risk management 
system and customs controls of the special import regime are not being reasonably administered 
because of the requ irement to obtain an apostilled or legalized official translation of the certification 
of existence abroad for each shipment.  
7.561.   Panama also alleges lack of reasonable administration of the special import regime because 
of the requirement to provide certifica tion of intent ion to sell. Panama considers that the sales 
invoices already ensure that the supplier declared by the importer is really the source of the imported 
products and are much more relevant for obtaining this information than the certification of intent ion 
to sell because they provide evidence of the final outcome of the transaction.710 
7.562.   Colombia says that it has shown that the sales invoice can easily be forged and does not 
provide the degree of certainty that Colombia seeks to ensure in controlling its imports,  and that 
numerous abuses in connection with the provision of false information in import documents have led 
Colombia to request more information.711 
7.563.   The Panel recalls once again that it is for Panama to discharge the burden of substantiating 
how and why the requirement to provide certification of intent ion to sell necessarily leads to 
unreasonable administration of the special import regime in Decree No. 2218/2017.  
7.564.   As in the previous instance, the  Panel does not find the fact of requiring certifi cation of 
intent ion to sell to be inherently unreasonable or incoherent and as such inconsistent with WTO 
obligations. Panama considers it unreasonable for Colombia to impose this requirement, when it 
could opt not to pursue this requirement and be satisfi ed with a sales invoice. The Panel understand s 
that Panama would prefer that its commercial operators not have to comply with the requirement 
to submit certification of intent ion to sell. However, in its opinion, this argument is insufficient to 
establish that the requirement in question necessarily leads to unreasonable administration of the 
risk management and customs control system of the special import regime.  
7.565.   Furthermore, Colombia has explained that the sales invoice, as an alternative suggested by 
Panama, can easily be forged and does not provide the degree of certainty that Colombia seeks to 
ensure in controlling its imports,  and that numerous abuses in connection with the provision of false 
information in import documents have led Colombia to request  more information. In the light of this 
explanation, the Panel does not consider the imposed requirement to be inappropriate for the 
circumstances or not to be based on rationality.  
7.566.   For these reasons, the Panel rejects Panama's argument that the risk manag ement and 
customs control system is not administered reasonably because of the requirement to provide 
certification of intent ion to sell.  
7.567.   Panama also alleges lack of reasonable administration due to the rigidity of the special import 
regime, since importers cannot make changes in the quantity, price or port of entry any later than 
30 days before importation and since, in the event of these parameters being modified, a declaration 
of correction will not be accepted and the goods will be seized. Panam a questions what would be the 
sense of requiring such detailed information with respect to the qua ntity and price of the goods 
30 days in advance, considering that the advance declaration serves to give early notice of the same 
information.712 Comparing it w ith the regime that is governed by Decree  No. 1745/2016, Panama 
                                                
710 Panama's second written submission as respondent, para.  374. 
711 Colombia's additional written submission, para.  142. 
712 Panama's second written submission as respondent, paras.  375-381. WT/DS461/RW  
 
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  maintains that the special regime set out in Decree  No. 2218/2017 is worse, owing to the fact that 
non-compliance with the documentary requirements results in the seizure of the goods, without  the 
possibility of their being legalized, recovered or reshipped, so that a minor error can result in the 
loss of the goods.713 
7.568.   Colombia maintains that under the Colombian customs regime it is possible to correct and 
amend a certain kind of minor errors in the import documents, so that Panama is misreading the 
legislation in question, in particular Article  234 of Decree  No. 2685, which permits the correction of 
the import declaration.714 
7.569.   With regard to reshipment not being permitted and the seizure of the good s, Colombia 
maintains that Panama is forgetting that these goods are used for the purpose of carrying out illicit 
trading operations and that allowing reshipment of the goods would lead to the same goods entering 
through a different Colombian port under fa lse papers. Colombia adds that, considering that the 
objective of the measure and the reason for it is the control of goods deriving from illegal 
transactions, the prohibition on reshipment is reasonable in the light of its objective, cause and 
basis. Colo mbia adds that if Panama 's claim is that the risk management system is unreasonable 
because it makes it possible to detect violators of Colombian customs law, Panama 's argument 
simply demonstrates the risk that Colombia is trying to prevent, namely that of  there being importers 
who go on deliberately violating the Colombian legislation by laundering money and doing violence 
to society.715  
7.570.   The Panel recalls that Panama has challenged Decree No. 2218/2017 as an instrument which 
governs the administration of th e special import regime, so that it is for Panama to discharge the 
burden of substantiating how and why the requirement for information on the quantity, price or port 
of entry of the goods, 30 days in advance and with subsequent modifications to that infor mation not 
being permitted, necessarily leads to unreasonable administration of the special import regime in 
Decree No. 2218/2017.  
7.571.   In the Panel's opinion, the fact of requiring information on the quantity, price or port of entry 
of the goods, 30 days in ad vance and with no subsequent modifications to the information being 
permitted, does not appear to be inherently unreasonable or incoherent and as such inconsistent 
with WTO obligations. Panama considers it unreasonable for Colombia to impose this requireme nt, 
when it could opt not to require this information 30 days in advance or  to allow modifications to the 
information prior to the arrival of the goods in Colombia . The Panel understand s that Panama would 
prefer that its commercial operators not  have to co mply with this requirement. However, it does not 
find this argument to be sufficient to establish that the requirement in question necessarily leads to 
unreasonable administration of the risk management and customs control system of the special 
import regi me. 
7.572.   Furthermore, Colombia has explained that the purpose of imposing these documentary 
requirements is to corroborate, before the arrival of the goods in Colombia, the information 
contained in the customs declaration, thereby enabling it to conduct a prior  risk analysis so that it 
may take action in cases of import operations suspected of constituting money laundering, and that 
it is possible to correct and amend a certain kind of minor errors in the import documents.716 In the 
light of this explanation, the Panel does not consider the imposed requirement to be inappropriate 
for the circumstances or not to be based on rationality.  
7.573.   For these reasons, the Panel rejects Panama's argument that the risk management system 
and customs controls of the special import r egime are not being administered reasonably because 
of the requirement to provide information on the quantity, price or port of entry of the goods 30  days 
in advance and because subsequent modifications to that information are not  permitted.  
7.574.   As regards the  consequences in the event of failure to submit or the extemporaneous 
submission  of the documents, the Panel does not consider that the requirement of reasonableness 
makes it incumbent on WTO Members to establish a certain level of penalties for failure to  comply 
                                                
713 Ibid. paras.  382-387. 
714 Colombia's additional written submission, para.  143. 
715 Colombia's additional written submission, paras.  144-146. 
716 Colombia's response to Panel question  No. 48, paras.  231-232; and comments on Panama 's 
response to Panel question  No. 48. WT/DS461/RW  
 
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  with customs obligations. In the Panel's opinion, each WTO Member has the sovereign freedom to 
establish the level of penalties it deems appropriate for non -compliance with customs obligations.  
7.575.   For the above reasons, the Panel rejects Panama's argu ment that the risk management 
system and customs controls of the special import regime are not administered reasonably because 
of the consequences of non -compliance.  
7.576.   Panama also alleges lack of reasonable administration of the special import regime because  
of the requirement to constitute a specific bond in cases in which there is a general bond.717 The 
Panel has already had the opportunity to examine and reject this line of argument by Panama in the 
context of the claims concerning the specific bond and ther efore refers to its reasoning in 
paragraphs  7.455 -7.458  above.  
7.577.   In conclusion, with respect to the aspects concerning the special import regime which 
Panama characterizes as the "first level of administration", the Panel finds that Panama has failed 
to demonstrate  that the risk management system  and customs controls of the special import regime 
in Decree No. 2218/2017 are administered  unreasonably, in a m anner inconsistent with 
Article  X:3(a) of the GATT 1994.  
7.4.6.2.3.3   Panama's claims with respect to the "second level of administration"  
Claim with respect  to the lack of reasonable administration  
7.578.   Panama only presents an  argument  concerning the lack of reasonable administration of the 
special import regime under Article  X:3(a) of the GATT 1994 with respect to the second level of 
administration. In particular , Panama claims that the risk management system and customs controls 
are not administered reasonably, because Colombia  delegates the processing and management of 
the specific bond to banks and insurance companies, while omitting to establish general criter ia for 
observance by these third parties of the requirements for applying for the specific bond and the 
considerations relevant to its approval.718 
7.579.   Colombia maintains that the fact that the bond is provided by insurance companies or banks 
is a logical conseq uence of the nature of the instrument (insurance contract);  and that if instruments 
of this kind were prohibited by X:3(a) of the GATT 1994, then Article  13 of the Customs Valuation 
Agreement, Article  VII of the GATT and Article  7 of the Trade Facilitation  Agreement would be 
inapplicable. Colombia also maintains that the financial system operates freely, and that insurance 
companies and banks accord similar treatment in respect of persons similarly situated,  depending 
on the risk .719 
7.580.   As previously explained, the Panel agrees with past panels in considering that the obligation 
concerning reasonable administration imposed by Article X:3(a) of the GATT 1994, in the specific 
circumstances of this dispute, requires Colombia to administer the specific bond requireme nt in 
Decree No. 2218/2017 in a manner that is appropriate for the circumstances and based on 
rationality.  
7.581.   The Panel is not convinced that the fact of requiring that the specific bond for guaranteeing 
the payment of the customs debts be obtained from a ban k or an insurance company is intrinsically  
unreasonable and therefore inconsistent with WTO Members ' obligations. A bank or insurance 
company bond is established by means of a contractual relationship between private parties,  and it 
is customary for the ba nk or insurance company to scrutinize the particular situation of the applicant 
in order to decide, firstly, whether to grant a bond and, secondly, the amount it will charge for that 
service. Similarly to Panama's claim with respect to a lack of uniform ad ministration, it does not 
seem that, in the light of Panama 's arguments and in the specific circumstances of this dispute, the 
requirement that the specific bond be administered reasonably can be interpreted as requiring that 
Colombia establish a level of specific financial regulation for banking or insurance institutions or limit 
the freedom of those financial institutions to take decisions with respect to their potential customers.  
                                                
717 Panama's second written submission as respondent, para.  388. 
718 Panama's second written submission as respondent, para.  390. 
719 Colombia's additional written submission, paras.  124-127. WT/DS461/RW  
 
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  7.582.   For the above reasons, the Panel rejects Panama's argument that the risk m anagement 
system and customs controls of the special import regime are not administered reasonably because 
Colombia  delegates the processing and management of the specific bond to banks and insurance 
companies.  
7.583.    In conclusion, with respect to the aspect co ncerning the special import regime which 
Panama characterizes as the "second level of administration", the Panel notes that Panama has failed 
to establish that the risk management system and customs controls of the special import regime in 
Decree No. 2218/ 2017 are administered unreasonably, in a manner inconsistent with Article X:3(a) 
of the GATT 1994.  
7.4.6.2.4   Conclusion concerning the consistency of the administration of the special 
import regime with Article  X:3(a) of the GATT 1994  
7.584.   For all the reasons given above , the Panel concludes that Panama has failed to demonstrate  
that the special import regime provided for in Articles 4 to 10 of Decree No. 2218/2017 is  
administered in a non -uniform, non -impartial or unreasonable manner, inconsistently with 
Article  X:3(a) o f the GATT 1994.  
7.5  Panama's claims under the Customs Valuation Agreement  
7.585.   Panama has made claims of inconsistency with the Customs Valuation Agreement with 
respect to the special import regime  and the specific bond. In particular, Panama claims that: (a)  the 
special import regime is inconsistent with Articles  1, 2, 3, 5, 6  and 7.2 (f) of the Customs Valuation 
Agreement because it operates in practice as an incentive to raise the prices of the goods artificially, 
introducing de facto  minimum customs values in v iolation of those provisions; and that (b) the 
specific bond is inconsistent with Article 13 of the Customs Valuation Agreement insofar as it is 
imposed because "it becomes necessary to delay the determination  of the value" of the goods, since 
it would exc eed the amount necessary "to cover the ultimate payment of customs duties for which 
the goods may be liable" .720 
7.586.   The Panel will begin by examining the claims relating to the special import regime.  
7.5.1   Panama's claims under Articles 1, 2, 3, 5, 6  and 7.2(f) of th e Customs Valuation 
Agreement  
7.5.1.1   Arguments of the parties  
7.5.1.1.1   Panama  
7.587.   Panama claims that the special import regime is an instrument created to address import 
valuation, and that the thresholds reflect what Colombia considers in effect to be a minimum, but 
genuine,  import value, irrespective of the application of the methodologies provided for in Articles  1, 
2, 3, 5, 6  and 7 of the Customs Valuation  Agreement. Panama maintains that Colombia is rejecting 
a priori  any declared value that is equal to or lower than the thresholds it has itself established.721 
7.588.   According to Panama, the facts indicate that Colombia authorizes the release of the goods 
only if payment of the customs duties is assured for a hypothetical value that is not based on the 
application of any of the va luation methods provided for in the Customs Valuation Agreement. This 
would result in a customs valuation for the establishment of a guarantee for customs duties that are 
to be paid, without this valuation being adjusted to the case -by-case analysis requir ed, based on 
the particular conditions of each sale. Panama does not consider that Members have given "carte 
blanche" for the national authorities to establish amounts of coverage not subject to any discipline. 
Panama maintains that if that were the case, the disciplines of the Customs Valuation Agreement 
could easily be circumvented by requiring guarantees with a coverage that bears no relation to the 
primary obligation that has to be guaranteed.722 
                                                
720 Panama's request for the establis hment of a panel, WT/DS461/22, sections II.A(ii)  and II.D(ii).  
721 Panama's second written submission as respondent, paras.  436 and 450. 
722 Panama's opening statement at the meeting of the Panel, paras. 26  and 29. WT/DS461/RW  
 
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  7.589.   Panama bases part of its argument on the conclusions of the  panel report in Colombia – 
Ports of Entry , as it considers that the system of reference prices (indicative prices) in that dispute 
has the same characteristics in terms of product scope and lack of sensitivity to product differences 
or the specific circumstances of transactions as in this case.723 In Panama's view, the thresholds do 
not reflect any of the valuation methods set out in the Customs Valuation Agreement or take into 
account the individual circumstances of the imports. According to Panama, a n importer declaring a 
value equal to or lower than the thresholds would inevitably be made subject to prohibitive 
consequences for importation, and its options would be even more limited than in Colombia – Ports 
of Entry , as "correction" and re -exportatio n would be impossible.724 Consequently, Panama contends 
that either customs duties are collected on the basis of a value higher than the thresholds, or the 
goods are not imported into Colombian customs territory. In practice, customs duties should not be 
collected on the basis of a value equal to or below the thresholds, which amounts to saying that the 
thresholds operate as "minimum prices" that are inconsistent with Article 7.2(f) of the Customs 
Valuation Agreement.725 Panama therefore claims that by its desi gn, structure and architecture, the 
special import regime would penalize the importation of products for which the price actually paid 
or payable, or another price resulting from the application of other valuation methods, is equal to or 
below the threshol ds.726 
7.590.   Panama adds that, in the context of this market, importing goods at higher prices would 
certainly be a commercially viable option. Panama would not, however, consider this a legally viable 
option for importers. In any case, Panama suggests that if Col ombia were to contend that such 
"overvaluation" or "correction" took place with a view to avoiding the application of the special import 
regime, it would take this as an acknowledgement that the effect of this regime is such that it has 
led importers to ig nore the "price actually paid or payable" for their goods and accept the minimum 
value given by the thresholds.727 
7.591.   Panama also puts forward arguments regarding the specific bond, as, in its understanding, 
this bond is systematically required on the basis of the thresholds for all imports, and  is required in 
consideration of the final collection of customs duties.728 Panama takes the view that if a customs 
authority considers it necessary to delay the final determination of the customs value, and thus to 
require  a guarantee if the importer decides to withdraw the goods, the establishment of this 
guarantee must be subject to the disciplines of the Customs Valuation  Agreement, in particular 
Articles 1, 2, 3, 5, 6  and 7.729 In this respect, Panama states that the dete rmination of the coverage 
of the specific bond takes not the slightest account of the substantive provisions governing the 
determination of the value of the goods. Panama points out that in Colombia – Ports of Entry , the 
panel confirmed that the customs au thorities were required to apply the valuation methods on a 
case-by-case basis, so as to reflect the particular conditions of the sale in question.730 
7.592.   Panama sees no reason why this principle does not apply to the determination of the 
coverage of a guarantee  under Article 13 of the Customs Valuation Agreement. Panama notes, 
however, that this case -by-case consideration is impossible to observe when coverage is required 
a priori  for the specific bond, as this coverage is predetermined on a fix ed basis in the t ext of Article  7 
of Decree No.  2218/2017, which, by definition, does not take into consideration the particular 
circumstances of each import. Panama takes the view that without making this evaluation, the 
Colombian authorities would not have the necessary information to implement the valuation methods 
of the Customs Valuation Agreement and establish whether or not it is necessary to delay the 
valuation, and determine the appropriate scope of the guarantee.731 In Panama's view, establishing 
two absolute, fixed  and unique factors (both the figure of 200% and the threshold amount) for a 
range of products and transactions of different types, with no possibility of adjusting them to the 
                                                
723 Panama's second written submission as respo ndent, paras.  454-455 (referring to Panel Report, 
Colombia – Ports of Entry , paras.  7.142  and 7.150).  
724 Panama's second written submission as respondent, para.  456. 
725 Ibid. para.  457. 
726 Ibid. para.  458. 
727 Panama's second written submission as respondent, p aras. 459-460. 
728 Ibid. para.  461. 
729 Panama's comments on Colombia's response to Panel question No.  61. 
730 Panama refers to Panel Report, Colombia – Ports of Entry , para.  7.142. (Panama's second written 
submission as respondent, para.  462.)  
731 Panama's second  written submission as respondent, paras.  463-464. WT/DS461/RW  
 
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  circumstances of each transaction, would not allow for the use of the valuation  methods provided 
for in the Customs Valuation Agreement.732 
7.593.   Independently of this, Panama notes that Article  222 of Resolution No.  4240733 regulates the 
time of valuation under Colombian law, which would be the date of physical inspection or the date 
when the  import declaration is submitted. Panama therefore maintains that by establishing a priori  
that the coverage shall be established on the basis of criteria that do not form part of the 
case-by-case analysis, Colombia is acting inconsistently with Articles 1 , 2, 3, 5, 6  and 7 of the 
Customs Valuation  Agreement.734 
7.5.1.1.2   Colombia  
7.594.   Colombia argues that Panama's claim would not be supported by these provisions. According 
to Colombia, while Articles 1 to 7 of the Customs Valuation Agreement establish customs valuation 
methods, they do not regulate the time of the valuation or establish the exclusive criteria that could 
result in a customs authority delaying the valuation; nor do they regulate the amount of the 
guarantees that may be required by a customs authority. Colo mbia emphasizes that Decrees 
No. 1745/2016  and No. 2218/2017 bear no relation to valuation methods and that the Colombian 
customs authorities correctly apply the methods established in the Customs Valuation  Agreement.735 
7.595.   According to Colombia, the methodolog ies established in Article 1 et seq . of the Customs 
Valuation Agreement concerning transaction value are applicable to valuation disputes arising during 
the process of inspection or examination  referred to in Decree  No. 2218/2017. Therefore, Panama's 
asser tion that the special import regime is an instrument created to address import valuation and 
that the thresholds reflect a minimum import value regardless of the provisions of the Customs 
Valuation Agreement is incorrect. Colombia maintains that the thresh olds established in Decrees 
No. 1745/2016  and No. 2218/2017 do not constitute a price standard or minimum prices, and do 
not judge the acceptability of the declared price.736 
7.5.1.2   Analysis by the Panel  
7.596.   The Panel's task is to determine whether, as Panama alleges , the special import regime with 
the characteristics described in Decree No. 2218/2017 is inconsistent with Articles  1, 2, 3, 5, 
6 and 7.2(f) of the Customs Valuation Agreement because it operates in practice as an incentive to 
raise the prices of the goods artificially, introducing de facto  minimum customs values in violation 
of these provisions.737 Colombia submits that Panama's claim would not be supported by these 
provisions because Decree No.  2218/2017 does not relate to valuation methods.738 
7.597.   The Panel there fore notes that the parties disagree with respect to the application of Customs 
Valuation Agreement Articles  1, 2, 3, 5, 6  and 7.2(f)  to the special import regime, specifically on the 
question of whether Colombia would be conducting a customs valuation by using the thresholds in 
Decree No.  2218/2017. Given that the provisions invoked by Panama (Articles  1, 2, 3, 5, 
6 and 7.2(f) of the Customs Valuation Agreement) establish the various valuation methods 
permitted under the Customs Valuation Agreement, it wil l be necessary to begin by resolving 
whether Colombia's use of the thresholds constitutes customs valuation. If, indeed, the Panel were 
to determine that it did not constitute customs valuation, the provisions invoked by Panama would 
not be applicable, as maintained by Colombia.  
                                                
732 Panama's opening statement at the meeting of the Panel, para.  28. 
733 Article  222 provides  that "[f]or the purpose of determining the customs value of imported goods, the 
time of valuation shall be taken t o be the date of physical inspection prior to release or, failing that, the date of 
submission of the import declaration". (Resolution No. 4240/2000  (Exhibit  PAN-40)). 
734 Panama's comments on Colombia's response to Panel question No.  61. 
735 Colombia's additi onal written submission, paras.  160-161 and 171; and statement as respondent at 
the meeting of the Panel, paras.  52-53. 
736 Colombia's additional written submission, paras.  169-170. 
737 Panama's request for the establishment of a panel, WT/DS461/22, section II .D(ii).  
738 Colombia's additional written submission, paras.  160-161 and 171; and statement as respondent at 
the meeting of the Panel, paras.  52-53. WT/DS461/RW  
 
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  7.5.1.2.1   The question of whether the use of the thresholds of Decree No. 2218/2017 
constitutes customs valuation   
7.598.   As indicated above, Articles  1, 2, 3, 5, 6  and 7.2(f) of the Customs Valuation Agreement 
establish the various valuation method s permitted under the Agreement. Broadly speaking, these 
valuation methods are to be used in sequential order , with the transaction value holding primacy  as 
a valuation method (Article 1). Where the transaction value of the imported goods cannot be used, 
the valuation methods provided for in Article 2 (transaction value of identical goods), Article 3 
(transaction value of similar goods), Article 5 (deducti ve method)  and Article  6 (computed value) 
must be used. Pursuant to Article  7 of the Agreement, if the customs value cannot be determined 
using these valuation methods, the customs authorities have to determine the value using 
reasonable means consistent w ith the principles and general provisions of the Customs Valuation 
Agreement and the GATT 1994 and on the basis of data available in the country of importation. In 
any event, the value may not be based on certain elements listed in paragraph 2 of the Artic le, 
which include "minimum customs values" (Article 7.2(f)).  
7.599.   Regarding what is meant by "customs valuation", the Panel notes that the Customs Valuation 
Agreement does not provide a definition for this concept. The term "customs value of imported 
goods" is,  however, defined in Article 15.1(a) of the Agreement as "the value of  goods for the 
purposes of levying ad valorem  duties of customs on imported goods". The Panel agrees with the 
analysis made by a previous panel in that "customs valuation" should be unde rstood as the process 
of determining the monetary worth or price of imported goods for the purpose of levying customs 
duties.739 Therefore, the two central aspects within the concept of customs valuation are (a) the 
value of the goods, which is used (b) for the purposes of levying ad valorem  customs duties.740 
7.600.   The Panel will examine whether the thresholds established in Decree No.  2218/2017 
represent the "value of the goods"  and whether Colombia's customs authorities collect customs 
duties on the basis of these  thresholds.  
7.601.   The Panel notes that, according to Panama, there would be  only two possible scenarios 
when the declared f.o.b. import price for products subject to Decree No.  2218/2017 is equal to or 
below the thresholds set out in that decree: either custom s duties are collected on the basis of a 
value higher than the thresholds, or the goods do not enter Colombian territory.741 
7.602.   On examination, it is seen that the text of Decree No. 2218/2017 does not provide that 
payable customs duties shall be calculated on the basis of the thresholds, or that these thresholds 
shall replace the declared values for obtaining the transaction value. According to Article 3 of the 
decree, as examined above in paragraph 2.35.   of this Report, the thresholds are used to determine 
whether the measures contemplated in the decree have to be applied to a particular import, that is, 
                                                
739 In Colombia – Ports of Entry , the panel reasoned as follows:  
The Panel notes that the Customs Valuation Agreement  does not provide a definition for customs 
valuation. Article 15 of the Customs Valuation Agreement  does however include a definition of 
"customs value". The term "customs value of imported goods" is defined in Article 15.1(a) of the 
Customs Valua tion Agreement  as "the value of the goods for the purposes of levying ad valorem  
duties of customs on imported goods". The Panel believes that this definition of customs value is 
useful in understanding what customs valuation means within the Customs Valua tion Agreement . 
Following Article 31 of the Vienna Convention on the Law of Treaties " ("VCLT"), the Panel shall 
look at the ordinary meaning of the relevant concepts present in this definition.  
The Panel will first assess the concept of "valuation" which i s defined as "[t]he action of 
estimating or fixing the monetary value of something" or as "[t]he process of determining the 
value of a thing or entity". The term "value", in turn, is defined in the Oxford English Dictionary  
as "[t]hat amount of a commodity , medium of exchange, etc., considered to be an equivalent for 
something else" and the term "value" is defined in the Black's Law Dictionary  as "[t]he monetary 
worth or price of something; the amount of goods, services or money that something will 
command in an exchange".  
In light of the dictionary definitions of valuation and value, as well as the definition of customs 
value provided in Article 15 of the Customs Valuation Agreement , the Panel considers that the 
ordinary meaning of the concept of customs va luation is straightforward. Essentially, customs 
valuation involves the process of determining the monetary worth or price of imported goods for 
the purpose of levying customs duties.  
(Panel Report, Colombia – Ports of Entry , paras.  7.81-7.83 (footnotes om itted)).  
740 This conclusion is also reached in Panel Report, Colombia – Ports of Entry , para.  7.84. 
741 Panama's second written submission as respondent, para.  457. WT/DS461/RW  
 
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  whether the special import regime has to be applied.742 As analysed in  section 2.3.3.3  above, this 
regime considers a number of aspects, including additional documentary and certification 
requirements, the presence of import operations observers and the provision of the specific bond. 
In the Panel's opinion, none of the aspects of the special import regime refer to the determination 
of the customs value of imported goods within the meaning of Article 15.1 of the Customs  Valuation 
Agreement.  
7.603.   Regarding Panama's references to the panel report in Colombia – Ports of Entry , the Panel 
notes that there are certain key differences between the role of the thresholds of Decree 
No. 2218/2017 and the role of the indicative prices in  that dispute. The main difference is that under 
Decree No. 2218/2017, importers of goods are not required to pay customs duties in an amount 
determined on the basis of the thresholds, as was the case with the indicative prices in that dispute. 
On the cont rary, in the present case, the ad valorem  customs duties to be paid by an importer are 
to be determined in accordance with the general rules of Colombian customs law.   
7.604.   Thus, the Panel does not consider there to be an a priori  rejection of any declared valu e 
equal to or below the thresholds established in the decree, nor does it consider that the special 
import regime imposes on the imports concerned customs duties higher than those due. The Panel 
finds no support for Panama's assertion that the thresholds e stablished in the decree operate as 
minimum prices. The Panel considers that Panama has failed to provide evidence to demonstrate  
that importers of the products classified in Decree No.  2218/2017 whose declared f.o.b. price was 
equal to or below the establ ished thresholds, have been required to pay ad valorem  customs duties 
higher than those that would be payable according to the respective transaction value or another 
price resulting from the application of the valuation methods of the Customs Valuation Ag reement.  
7.605.   As mentioned above in paragraph 7.217 , Colombia's DIAN reported that since the entry into 
force of Decree No.  2218/2017, a total of 105 imp ort declarations with declared prices equal to or 
below the thresholds established in the decree (corresponding to 76% of total imports with values 
equal to or below the thresholds) have obtained release authorization from the Colombian authorities 
and tha t valuation disputes have arisen in only 12 of those cases.743 In the Panel's view, this means 
that in all the other cases where no valuation dispute arose, the value declared by the importer was 
ultimately the value accepted as the customs value and used to  determine the ad valorem  customs 
duties payable. The existence of these imports would thus appear to prove that the thresholds 
established in Decree No. 2218/2017 do not operate as "minimum prices".744 
7.606.   In light of the foregoing, it is the Panel's understand ing that the final amount of the 
ad valorem  customs duties accruing from the importation of the products classified in Decree 
No. 2218/2017 with a declared f.o.b. price equal to or below the thresholds established therein, does 
not depend on these thresholds. Therefore, the thresholds do not constitute the value  of the goods, 
which is used for the purposes of levying  ad valorem  custo ms duties.  
7.607.   Panama also argues that if a customs authority considers it necessary to delay the final 
determination of customs value and to require a guarantee for the withdrawal of the goods, the 
establishment of this guarantee should be subject to the dis ciplines of Articles 1, 2, 3, 5, 6  and 7 of 
the Customs Valuation Agreement. In that case, Colombia would be in violation of this obligation, 
since, according to Panama, the coverage of the specific bond would have been predetermined on 
the basis of fixed absolute factors, without taking into account the specific circumstances of each 
import.745 
7.608.   While there is a link between the guarantee and the valuation methods insofar as the final 
amount of the customs duties in respect of which the guarantee assures paym ent will have to be 
determined in accordance with these valuation methods, the Panel does not find any provision in 
the text of the relevant articles of the Customs Valuation Agreement that requires a Member's 
                                                
742 This is also noted by Panama when stating that "[t]he result of this comparison in the sense  that the 
declared value is equal to or lower than the threshold, will necessarily lead to the application of [the] special 
import regime". (Panama's second written submission as respondent, para.  452.)  
743 Figures for goods imports under Decree No. 2218/2017 ( Exhibit  COL-61). 
744 Furthermore, during the period November -December 2017, the DIAN reported 802 clothing and 
footwear declarations below the respective thresholds. Only 49 of these declarations are the subject of ongoing 
valuation dispute invest igations. (Colombia's response to Panel question No. 6(a), para. 20, and 6(c), para. 22; 
and List of 802 import declarations (Exhibit  COL-39)). 
745 Panama's second written submission as respondent, paras.  463-464. WT/DS461/RW  
 
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  customs authorities to use the valuation metho ds established in Articles 1, 2, 3, 5, 6  and 7 of the 
Agreement in order to determine the coverage of a guarantee that permits goods to be withdrawn. 
The Panel is therefore not convinced by Panama's argument that a customs valuation is being 
conducted for the establishment of the specific bond.  
7.609.   The Panel takes the view that the provision of a valuation dispute guarantee must be 
requested, by definition, before the final value of the goods has been clarified in accordance with 
the valuation methods establis hed in the above -mentioned Articles. In the same way, Article 13 of 
the Customs Valuation Agreement, for example, refers to the possibility of withdrawing imported 
goods upon the posting of a guarantee "[i]f, in the course of determining the customs value of 
imported goods, it becomes necessary to delay the final determination of such customs value". As 
mentioned above in paragraph 7.232 , in the event  of a dispute concerning the value of the goods 
where there is a suspicion  of underinvoicing, the amount of the guarantee is understandably 
calculated on the basis of an approximate reference value. In view of the foregoing, it is the Panel's 
understanding  that the determination of the coverage of the specific bond does not correspond to 
customs valuation and does not therefore need to be subject to the valuation methods of Articles 1, 
2, 3, 5, 6  and 7 of the Customs Valuation Agreement.  
7.5.1.3   Conclusion  
7.610.   For the reasons set out above, the Panel concludes that Panama has failed to demonstrate 
that the thresholds established in Decree No.  2218/2017 represent the "value of goods" by virtue of 
which Colombia's customs authorities collect customs duties, or that the us e of the thresholds 
corresponds to a customs valuation operation or that the special import regime operates as an 
incentive to raise the prices of goods artificially.  
7.611.   The Panel therefore concludes that the special import regime provided for in Articles 4 to 10 
of Decree  No. 2218/2017 does not fall within the scope of Articles  1, 2, 3, 5, 6  and 7.2(f) of the 
Customs Valuation Agreement in the manner described by Panama. Consequently, the Panel rejects 
Panama's claims under each of those articles.  
7.5.2   Panama's c laims under Article  13 of the Customs Valuation Agreement  
7.5.2.1   Arguments of the parties  
7.5.2.1.1   Panama  
7.612.   Panama claims that the specific bond is inconsistent with Article 13 of the Customs Valuation 
Agreement insofar as it is imposed because "it becomes necessary to delay the determination of the 
value" of the goods, in that it would exceed the amount necessary "to cover the ultimate payment 
of customs duties for which the goods may be liable".746 
7.613.   Regarding the inconsistency of the specific bond described in both decree s with Article 13 of 
the Customs Valuation Agreement, Panama argues that the specific bond requirement and the bond's 
coverage would not be in keeping with the case -by-case approach required by that article. Panama 
argues that the coverage of the specific bond would not meet the requirement to cover the "ultimate 
payment of customs duties for which the goods may be liable". In Panama's view, this provision 
does not foresee the possibility of requiring a guarantee beyond that which relates to the payment 
of customs duties. The 200% coverage required by Colombia would exceed the scope of Article 13, 
as it would not take into account the circumstances of each and every case.747 According to Panama, 
Article  13 would not authorize the requirement of a guarantee to cover penalties, for example, and 
Article 7.3.4 of the Trade Facilitation Agreement would allow for a customs guarantee to be required 
to cover penalties only "[i]n cases where an offence … has been detected ".748 
7.614.   For Panama, the use of the threshold as refer ence value is not in keeping with specific import 
characteristics and is not therefore a valid reference value for determining the coverage of the 
guarantee. In Panama's view, if the threshold were the relevant criterion for determining acceptable 
                                                
746 Panama's request for the establishment of a panel, WT/DS461/22, section II.A(ii).  
747 Panama's second written submission as respondent, para.  468. 
748 Ibid. para.  469; and Panama's opening statement at the meeting of the Panel, para.  30. (emphasis 
original)  WT/DS461/RW  
 
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  values, the coverage of the specific bond would have to be established for the amount of the duties 
to be levied on the basis of a value slightly higher that the threshold, minus the customs duties paid 
on the basis of the declared value. Panama concludes that, in  that case, the coverage amount would 
be less than the coverage of 200% of the threshold price for th e quantity imported (Decree 
No. 1745/2016), or 200% of the difference between the threshold price and the value declared for 
the imported quantity (Decree  No. 2218/2017).749 
7.615.   Lastly, Panama also notes that Colombia might not require the collection of customs duties 
for products entering from countries with which Colombia has signed economic integration 
agreements. If the reason for the specific bond were the ne ed to ensure due payment of customs 
duties, there would be no need to require this bond for imports to Colombia that receive duty -free 
treatment, as those customs duties would not exist.750 
7.5.2.1.2   Colombia  
7.616.   Colombia maintains, first of all, that Article 13 should be  under stood in the context of 
Article  17 of the Customs Valuation Agreement, which stipulates that nothing in the Agreement may 
be read as restricting the rights of customs administrations to check information presented in relation 
to value.751 
7.617.   Colombia cite s the panel report in US – Certain EC Products , stating that this clarified that 
"Article 13 of the Customs Valuation Agreement allows for a guarantee system when there is 
uncertainty regarding the customs value of the imported products, but is not concern ed with the 
level of tariff obligations as such".752 
7.618.   Colombia adds that the guarantee under Decree No.  2218/2017 is also based on the criterion 
of sufficiency. The uncertain future event of Decree No. 2218/2017 corresponds to the customs 
taxes and penalties that may apply. The insured event is the potential payment of obligations that 
forms part of the condition of uncertainty and that takes place after the release of the goods, and 
for a period of up to three years, which ensures that the DIAN has effective control. As with any 
other insurance contract, the future and uncertain event may result in the payment of an amount 
less than, equal to or greater than the maximum amount of the guarantee .753 
7.619.   Colombia goes on to say that as with any other insurance contract , the future and uncertain 
event is indeterminate, which is why a maximum reference value is needed; in this case, the 
maximum reference value is the legal provision of 200%. This percentage is an indicator, as it is 
impossible, when a dispute arises, to d etermine with millimetric precision a priori  what the value to 
be paid might be in the hypothetical event of a penalty being imposed for an administrative customs 
offence, or an official value correction or revision assessment in accordance with the proced ure set 
forth in the customs regulations. Colombia adds that in Decree No. 2218/2017, the amount of the 
guarantee is reduced, which means that in some cases where the penalty is very high, it may not 
be possible to cover the total payment of penalties.754 
7.620.   Colombia states that to read Article 13 of the Customs Valuation Agreement as a provision 
that prohibits guarantees to cover other duties or penalties is very limited. The fact that Article 13 
contemplates the use of guarantees expressly for the payment of c ustoms duties does not mean 
that the use of guarantees to cover other taxes or penalties is prohibited. This reading would be 
logical, since the purpose of the guarantee is to ensure that any obligations the importer may have 
towards the customs authority are met.755  
                                                
749 Panama's second written submission as resp ondent, paras.  470-471. 
750 Panama's opening statement at the meeting of the Panel, para.  31. 
751 Colombia's additional written submission, para.  174; and opening statement as respondent  at the 
meeting of the Panel, para.  55. Article 17 of the Customs Valuatio n Agreement reads as follows:  
Nothing in this Agreement shall be construed as restricting or calling into question the rights of 
customs administrations to satisfy themselves as to the truth or accuracy of any statement, 
document or declaration presented for customs valuation purposes . 
752 Colombia's additional written submission, para.  176 (citing Panel Report, US – Certain EC Products , 
para. 6.77) . 
753 Ibid. paras.  178-179. 
754 Ibid. paras.  184-186. 
755 Colombia's additional written submission, para.  188. WT/DS461/RW  
 
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  7.621.   Colombia adds that Members have not interpreted Article 13 in such a restrictive manner. 
The Trade Facilitation Agreement is not in force for Colombia, and yet it is clear to Colombia that its 
measures can also be explained in the light of that instrument. Article 7.3 of the Trade Facilitation 
Agreement establishes that: " As a condition for such release, a Member may require […] a guarantee 
in the form of a surety, a deposit, or another appropriate instrument provided for in its laws and 
regulati ons". Article 7.3.3 provides that: " Such guarantee shall not be greater than the amount the 
Member requires to ensure payment of customs duties, taxes, fees, and charges ultimately due for 
the goods covered by the guarantee ". Article  7.3.4 elaborates on this notion by addressing penalties 
and, regarding this particular aspect,  stipulates that a guarantee may be required for any penalties 
and fines imposed  by the customs authority, establishing that: " In cases where an offenc e requiring 
imposition of monetary penalties or fines has been detected, a guarantee may be required for the 
penalties and fines that may be imposed ". In Colombia's view, this shows that WTO Members have 
recognized that the customs authorities may require a guarantee not only to cover the payment of 
customs duties, but also to cover taxes, fees and charges, and penalties. In short, Colombia contends 
that its measures fulfil the obligation to establish the guarantee and its operation, while enabling 
these gu arantees to serve the purpose of covering customs duties and the penalties that may result 
from offences committed during the conduct of these proceedings.756 
7.622.   Colombia maintains that claiming that Article 7.3.4 of the Trade Facilitation Agreement 
allows a cu stoms guarantee to be imposed to cover penalties only in "cases where an offence […] 
has been detected " is an interpretation inconsistent with the very nature of a guarantee, the purpose 
of which is to cover the eventuality provided for in the insurance co ntract. Customs offences cannot 
be detected in advance, as the procedure required would be costly. The above -mentioned provisions 
cannot be read to mean that the customs authority predicts the final value to be paid. The most it 
can do is to make a reasona ble estimate of what that final value would be, which in the case under 
examination is established through the Colombian measures. A customs authority is not required to 
perfectly anticipate the results of a value determination that has not yet been conclu ded, insofar as 
it entails the application in time of an exhaustive valuation methodology.757 
7.623.   Colombia concludes that Article 13 of the Customs Valuation Agreement and Article 7.3 of 
the Trade Facilitation Agreement expressly permit the use of guarantees to cover the payment of 
tariffs, taxes and penalties.758 
7.5.2.2   Analysis by the Panel  
7.624.   The Panel's task is to determine whether, as Panama claims, the specific bond is inconsistent 
with Article 13 of the Agreement on Customs Valuation insofar as it is imposed because " it becomes 
necessary to delay the determination of the value" of the goods, in that it would exceed the amount 
necessary "to cover the ultimate payment of customs duties for which the goods may be liable".759 
Colombia contends that WTO Members are entitled t o require a guarantee for payment of customs 
duties, fees and charges, and penalties, and that the specific bond is based on the sufficiency 
criterion to cover these obligations.  
7.625.   The Panel will begin by examining the relevant legal provision and the applic able legal 
standard.  
7.5.2.2.1   Text of Article 13 of the Customs Valuation Agreement  
7.626.   Article  13 of the Customs Valuation Agreement stipulates the following:  
If, in the course of determining the customs value of imported goods, it becomes 
necessary to delay the final  determination of such customs value, the importer of the 
goods shall nevertheless be able to withdraw them from customs if, where so required, 
the importer provides sufficient guarantee in the form of a surety, a deposit or some 
other appropriate instrume nt, covering the ultimate payment of customs duties for 
                                                
756 Colombia's additional written submission, para.  189; and opening statement as respondent at the 
meeting of the Panel, para.  59. 
757 Colombia's additional written submission, para.  190; and Colombia's opening statement as 
respondent at the meeting of the Panel, para. 60. (emphasis original)  
758 Colombia's closing statement as respondent at the meeting of the Panel, para.  1. 
759 Panama's request for the establishment of a panel, WT/DS461/22, section II.A(ii).  WT/DS461/RW  
 
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  which the goods may be liable. The legislation of each Member shall make provisions 
for such circumstances.  
7.627.   This provision therefore enables importers to withdraw goods in situations where their value  
is questioned, through the provision of a guarantee.  
7.5.2.2.2   The legal standard under Article  13 of the Customs Valuation Agreement  
7.628.   Article  13 of the Customs Valuation Agreement enables importers to withdraw imported 
goods on which a determination is pending, upo n provision of sufficient guarantee where so required 
by the customs authority.760 In customs administration, security is required upon entry of 
merchandise when there is some uncertainty about the actual amount of liability that may be lawfully 
owed by the importer. Such a security is intended to provide a protection against the non -payment 
risk that might arise from the differences between the amount collected at the time of importation 
and the liability that may be finally determined.761 
7.629.   The Panel notes that  the Article 13 guarantee is not concerned with the level of tariff 
obligations as such, since the guarantee is provided specifically when there is uncertainty regarding 
the ultimate actual amount of the customs duties due, for the purpose of securing thei r payment.762 
7.630.   It follows from the text of Article  13 of the Customs Valuation Agreement that the guarantee 
must be sufficient, take the form of a surety, a deposit or some other appropriate instrument, and 
cover the ultimate payment of customs duties for whi ch the goods may be liable.  
7.631.   The Panel will analyse whether the specific bond fails to meet the requirements of Article 13 
of the Customs Valuation Agreement.  
7.5.2.2.3   The question of whether the specific bond is inconsistent with Article 13 of the 
Customs Valuation  Agreement  
7.632.   Article 13 of the Customs Valuation Agreement gives importers the right to withdraw goods 
from customs even where it has been necessary "to delay the final determination of such customs 
value". The Panel notes that Panama does not claim that thi s possibility does not exist for importers 
or that the Colombian customs authorities do not allow such withdrawal. Panama's claims relate to 
the second aspect of this article. That is, the obligation of importers to provide sufficient guarantee 
in the form  of a surety, a deposit or some other appropriate instrument, covering the ultimate 
payment of customs duties for which the imported goods may be liable, where so required.  
7.633.   As stated in paragraph 7.630  above, the guarantee must be sufficient, take the form of a 
surety, a deposit or some other appropriate instrument, and cover the ultimate payment of customs 
duties for which the goods may be liable. T he focus of Panama's claims is that the coverage of the 
specific guarantee would not meet the requirement of "covering the ultimate payment of customs 
duties for which the goods may be liable". Panama considers that the calculation of the guarantee's 
cover age does not take into account the circumstances of each case. Panama also claims that 
Article  13 of the Customs Valuation Agreement does not foresee the possibility of requiring a 
guarantee amount beyond that which relates to the payment of customs duties , to cover possible 
penalties, for example. Regarding the latter claim by Panama, the Panel observes that Panama refers 
                                                
760 In Thailand – Cigarettes (Philippines) , the panel reasoned that:  
The determination to impose a guarantee under Article 13 of the Customs Valuation Agreement 
is not a mandatory procedural step that needs to be taken to arrive at a final customs value.  
Rather, as the text of Article 13 stipulates, a guarant ee is a tool in the form of a surety or a 
deposit that enables importers to withdraw their goods from customs when it becomes necessary 
for a customs office to delay the final determination of the customs value of the imported goods. 
The guarantee should a lso be sufficient to cover the  customs duties for which the goods may  
ultimately  be liable.  
In this context, we consider that the imposition of a guarantee is a distinct decision purported to 
play a specific role, namely to secure the payment of final cus toms duty.  
(Panel Report, Thailand – Cigarettes (Philippines) , para.  7.1039.)  
761 Appellate Body Report, US – Shrimp (Thailand) / US – Customs Bond Directive , para.  221. 
762 Panel Report, US – Certain EC Products , para.  6.77. WT/DS461/RW  
 
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  to provisions of the Trade Facilitation Agreement to interpret the obligations under Article 13 of the 
Customs Valuation Agreement.  
7.634.   Colombia, for its part, claims that the fact that Article 13 of the Customs Valuation 
Agreement contemplates the use of guarantees expressly for the payment of customs duties does 
not mean that the use of guarantees to cover other taxes or penalties is prohib ited. A textual analysis 
of the provision and the absence of exceptions or prohibitions therein would appear to indicate that, 
as argued by Colombia, such a prohibition does not exist. Furthermore, an analysis of the immediate 
context of Article 13, that i s, the other provisions of the Customs Valuation Agreement, supports 
such a conclusion.  
7.635.   Panama requests that the Panel interpret the scope of Article 13 of the Customs Valuation 
Agreement taking into account the wording of Article  7.3.4 of the Trade Facili tation Agreement. 
According to Panama, this would lead the Panel to conclude that Article 13 of the Customs Valuation 
Agreement should be interpreted as prohibiting the imposition of guarantees that cover possible 
penalties in cases where an offence has no t yet been detected. Leaving aside the question of whether 
a provision of the Trade Facilitation Agreement may serve as context for the interpretation of a 
provision of the Customs Valuation Agreement when one of the parties has not ratified the former, 
it does not seem to the Panel that the wording of Article  7.3.4 supports Panama's conclusion. Indeed, 
the article in question provides that "[i] n cases where an offence requiring imposition of monetary 
penalties or fines has been detected, a guarantee may be  required for the penalties and fines that 
may be imposed ." The provision allows a guarantee to be required where an offence has been 
detected. It does not indicate that a guarantee may be required only in that situation.  
7.636.   The Panel agrees with Colombia in that the fact that Article 13 of the Customs Valuation 
Agreement contemplates the use of guarantees expressly for the payment of customs duties does 
not mean that the use of guarantees to cover other taxes or penalties is prohibited under that article.  
7.637.   Regarding Panama's claims relating to the calculation of the coverage of the guarantee, the 
Panel reiterates that, in accordance with Article 7 of Decree No. 2218/2017, the amount of the 
specific bond corresponds to 200% of the difference between the declare d f.o.b. price and the result 
of multiplying the unit price of the respective threshold by the quantity imported. In the Panel's 
view, this shows that the amount of the specific bond is not a fixed value for all cases, but that it 
actually varies for each import, since a key element in its calculation is the difference between the 
declared f.o.b. price and the respective threshold. As is logical, the declared f.o.b. price is specific 
to each import and does not depend on the customs authorities, which makes  it a factor determined 
on a case -by-case basis.  
7.638.   Panama maintains that the use of the threshold as a reference value is not in keeping with 
specific import characteristics and that it is not therefore a valid reference value for determining the 
coverage of  the guarantee. According  to Panama, if the threshold were the relevant criterion for 
determining acceptable values, the coverage of the specific bond would have to be established for  
the amount of the duties to be levied on the basis of a value slightly h igher than the threshold, 
minus the customs duties paid on t he basis of the declared value.  
7.639.   In this regard, the Panel notes that, as indicated above, Article 13 of the Customs Valuation 
Agreement refers to "sufficient" guarantee. Colombia in fact claims th at the guarantee under Decree 
No. 2218/2017 is based precisely on the criterion of sufficiency. In this respect, Colombia explains 
that the future event insured by the guarantee is the payment of customs taxes and any penalties 
that may apply, and that, as  with any other insurance contract, the future and uncertain event may 
result in the payment of an amount less than, equal to or greater than the maximum amount of the 
guarantee.763 
7.640.    The Panel echoes the Appellate Body's ruling in this respect in that "in cu stoms 
administration, security is required upon entry of merchandise when there is some uncertainty about 
the actual amount of liability that may be lawfully owed by the importer".764 Strictly speaking, 
practically any hypothetical exercise could demonstrate  that the guarantee will hardly ever coincide 
                                                
763 To support this assertion, Colo mbia provides an actual example of  a clothing import under 
heading  62.10 with a declared f.o.b. price lower than the respective threshold. (Colombia's additional written 
submission, paras.  180-183; and Colombiana Kimberly Colpapel  insurance policy (Exhibi t COL-17)). 
764 Appellate Body Report, US – Shrimp (Thailand) / US – Customs Bond Directive , para.  221. WT/DS461/RW  
 
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  exactly with the amount ultimately payable by an importer. As pointed out by Colombia, it is 
impossible, when a dispute arises, to determine with millimetric precision a priori  what the value to 
be paid might b e in the hypothetical event that a penalty were to be imposed. It cannot be excluded 
that in some cases where penalties are very high, the guarantee might not cover their payment. 
This would occur in particular where the difference between the declared f.o .b. price and the 
respective threshold was small. In this regard, it should be noted that, according to Colombia, the 
penalties for non -compliance in certain cases can be as high as 150% or 200% of the assessed  value 
of the imported goods.765 
7.641.   The Panel recalls that Article 13 of the Customs Valuation Agreement is not concerned with 
the level of tariff obligations pending determination, but merely allows for a guarantee system when 
there is uncertainty regarding the customs value of the respecti ve goods. The Panel also reiterates 
the arguments already made in section 7.5.1.2.1  above, to the effect that, for the reasons explained 
therein, t he determination of the coverage of the specific bond, while linked to the value of the 
goods, is not a customs valuation operation. Hence, the determination of its coverage cannot be 
expected to coincide exactly with the customs duties ultimately due.  
7.642.   Furthermore, the Panel is not convinced by Panama's argument that the specific bond should 
not be required for goods from countries with which Colombia has signed economic integration 
agreements. The products might not be covered by the agreement or might not  be entirely exempt 
from duties. It may also be that the final determination of the origin of imported goods forms part 
of the customs valuation process and is therefore pending at the time when the guarantee is 
requested. This means that there will not ne cessarily be certainty as to the applicability of the 
respective exemptions at that particular time. Furthermore, it should be noted that the specific bond 
under Decree No. 2218/2017 also serves to cover any possible penalties and that imports of goods 
from countries with which Colombia has signed economic integration agreements may also be 
subject to penalties if an offence is detected.  
7.643.   The foregoing is particularly important if it is considered that the provisions of the Customs 
Valuation Agreement are to  be understood in the context of Article 17 of that Agreement. That is, 
that none of these provisions should be construed "as restricting or calling into question the rights 
of customs administrations to satisfy themselves as to the truth or accuracy of an y statement, 
document or declaration presented for customs valuation purposes".  
7.5.2.3   Conclusion  
7.644.   For all the reasons given above, the Panel concludes that Panama has failed to demonstrate 
that the specific bond provided for in Article 7 of Decree No. 2218/2017 is inconsistent with Article  13 
of the Customs Valuation Agreement.  
8  CONCLUSIONS AND RECO MMENDATION  
8.1.  For the reasons set forth in this Report, the Panel concludes as follows:  
8.2.  With respect to its terms of reference, the Panel concludes that:  
a. the specific bond  and the special import regime with the characteristics described in Decree 
No. 1745/2016 are "inextricably linked"  and "clearly connected" to the measure declared 
by Colombia as taken to comply, that is, the tariffs imposed by Decree No.  1744/2016;  
b. the sp ecific bond and the special import regime with the characteristics provided for in 
Decree No.  2218/2017 fall within the Panel's terms of reference, as the language of 
Panama's panel request is sufficiently broad and the replacement of the original measures  
has not changed their essence;  
c. in order to fulfil its mandate to resolve the matter before it, it has to examine and make 
findings and, where appropriate, recommendations, concerning the specific bond and the 
                                                
765 Colombia's response to Panel question No.  9, para. 29.  WT/DS461/RW  
 
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  special import regime with the characteristics  provided for in Decree No.  2218/2017,  not 
the characteristics provided for in Decree No. 1745/2016;  
d. Panama's claims regarding Article VIII:3 of the GATT 1994  and Article  7.2(g) of the 
Customs Valuation Agreement do not fall within the Panel's terms of re ference, as Panama 
did not include these provisions in its panel request; and  
e. Panama's claims in its panel request fall within the Panel's terms of reference in both 
proceedings.  
8.3.  With regard to Decree  No. 1744/2016, the Panel concludes that Colombia has demonstrated 
that the tariffs provided for in that Decree are not inconsistent with Colombia's obligations under 
Articles II:1(a)  and II:1(b), first sentence, of the GATT 1994.  
8.4.  Regarding Panama's claims under XI:1 of the GATT 1994, the Panel concludes that : 
a. Panama has failed to demonstrate that the specific bond provided for in Article 7 of Decree 
No. 2218/2017 has limiting  effects on imports in a manner inconsistent with Article XI:1 
of the GATT 1994; and  
b. Panama has failed to demonstrate that the special i mport regime provided for in Articles  4 
to 10 of Decree No.  2218/2017 has limiting effects on imports in a manner inconsistent 
with Article XI:1 of the GATT 1994.  
8.5.  With regard to Panama's claims under Article X:3(a) of the GATT 1994, the Panel concludes 
that: 
a. Panama's claim that Decree No.  390/2016 is administered in a manner inconsistent with 
Article X:3(a) of the GATT 1994 through Decree  No. 2218/2017 does not fall within the 
Panel's terms of reference;  
b. Panama has failed to demonstrate that the specific b ond provided for in Article 7 of Decree 
No. 2218/2017 is administered in a non -uniform, non -impartial or unreasonable manner, 
inconsistently with Article X:3(a) of the GATT 1994; and  
c. Panama has failed to demonstrate that the special import regime provided  for in Articles  4 
to 10 of Decree No. 2218/2017 is administered in a non -uniform, non -impartial or 
unreasonable manner, inconsistently with Article X:3(a) of the GATT 1994.  
8.6.  Regarding Panama's claims under the Customs Valuation Agreement, the Panel conclude s as 
follows:  
a. the special import regime provided for in Articles 4 to 10 of Decree  No. 2218/2017 does 
not fall within the scope of application of Articles 1, 2, 3, 5, 6  and 7.2(f) of the Customs 
Valuation Agreement in the manner described by Panama. The Pa nel therefore rejects 
Panama's claims under each of those Articles; and  
b. Panama has failed to demonstrate that the specific bond provided for in Article 7 of Decree 
No. 2218/2017 is inconsistent with Article 13 of the Customs Valuation Agreement.  
8.7.  In view of  the foregoing, having found that the tariffs provided for in Decree No. 1744/2016 
are not inconsistent with Colombia's obligations under Articles II:1(a)  and II:1(b), first sentence, of 
the GATT 1994, and that Panama has failed to demonstrate that the spe cific bond and the special 
import regime are inconsistent with the WTO Agreement, the Panel concludes that Colombia has 
implemented the recommendations and rulings of the DSB in Colombia – Measures Relating to the 
Importation of Textiles, Apparel and Footw ear to bring its measure into conformity with its 
obligations under the WTO Agreement.  WT/DS461/RW  
 
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  8.8.  Having found that Panama has failed to demonstrate that Colombia has acted inconsistently 
with its obligations under the WTO Agreement, the Panel considers that no recom mendation under 
Article 19.1 of the DSU is necessary, and makes none.  
__________