WT/DS461/22  
12 May 2017 
(17-2603) Page: 1/7 
 Original:  Spanish  
 
  COLOMBIA – MEASURES RELATING TO THE IMPORTATION  
OF TEXTILES, APPAREL AND FOOTWEAR  
RECOURSE TO ARTICLE 21.5 OF THE DSU BY PANAMA  
REQUEST FOR THE ESTABLISHMENT OF A PANEL  
The following communication, dated 10 May 2017, from the delegation of Panama to the 
delegation of Colombia and the Chair person  of the Dispute Settlement Body, is circulated in 
accordance with Article 21.5 of the DSU . 
 
_______________  
 
 
On 22 June 2016, the Dispute Settlement Body (DSB) adopted the Appellate Body Report 
and the Panel Report , as modified by the Appellate Body, in the case Colombia – Measures 
Relating to the Importation of Textiles, Apparel and Footwear (Colombia – Textiles ).1 The Panel 
and the Appellate Body found that Colombia's compound tariff, contained in Decree 
No. 456/20 142, was inconsistent  with Article II:1(a) and II:1(b), first sentence, of the General 
Agreement on Tariffs and Trade 1994 ( GATT 1994 ), since in certain instances  it exceeded  the 
bound tariff rates in Colombia's Schedule of Concessions for imports of texti les and footwear 
classified in Chapters 61, 62, 63 and 643 of Colombia's Customs Tariff  (Decre e No.  4297/20114). 
Consequently, the DSB recommended that Colombia bring the offending measure into conformity 
with its obligations under the GATT 1994.5 
Pursuant  to Article 21.3(c) of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes (DSU), on 8 August  2016 Panama requested that the reasonable period of 
time for compliance be determined through binding arbitration .6 During that arbitra tion, Colombia 
stated that the implementation process  would consist of the joint implementation of tariff 
measures and anti-money laundering  customs measures , to be implemented by issuing 
"two 'mutually supportive decrees ' as part of the implementation pro cess".7 The Arbitrator 
appointed in accordance with Article 21.3(c) of the DSU determined that the "reasonable period of 
time in the present dispute should include the time needed to enact both the tariff measure and 
the customs measure"8, and granted Colo mbia a "reasonable period of time " for compliance of 
seven months from the date of adoption of the Panel and Appellate Body reports .9 The reasonable 
                                                
1 Dispute Settlement Body, minutes of the meeting held on 22  June 2016 (WT/DSB/M/380), para. 9.7. 
See also Action by the Dispute Settlement Body, adoption  of the Panel report, as modified by the 
Appellate  Body report, in Colombia – Textiles  (WT/DS461/10).  
2 Decree of the President of the Republic of Colombia No.  456 of 28  February  2014 "partially amending 
the Customs Tariff" (Decree No.  456/2014).  
3 Except for heading 64.06, but including tariff line 6406.10.00.00 (uppers).  
4 Decree of the President of the Republic of Colombia No.  4927 of 26  December  2011, "adopting the 
Customs Tariff and other provisions" (Decree No.  4297/2011).  
5 Appellate Body report, Colombia – Textiles , para. 6.12.  
6 Request by Panama for Arbitration Under Article 21.3(c) of the DSU (WT/DS461/11).  
7 Award of the Arbitrator, Colombia – Textiles,  (Article 21.3(c)) , para. 3.34 (referring to Colombia's 
submission, para. 29) (emphasis added).  
8 Award of the Arbitrator, Colombia – Textiles,  (Article 21.3(c)), para. 3.42.  
9 Award of the Arbitrator, Colombia – Textiles , (Article 21.3(c)), para. 4.1.  WT/DS461/22  
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  period of time for compliance expired on 2 2 January  2017.10 Nevertheless , in Panama's view, 
Colombia has thu s far failed to comply  with the DSB's recommendations and rulings.  
On 2 November  2016, Colombia adopted two decrees that modify the tariff and customs 
regime for the importation of textiles and footwear : (i) Decre e No. 1744 of 2 November  2016 
"partially modifying  the Customs Tariff " (Decre e No. 1744/2016 ); and (ii) Decre e No. 1745 
of 2 Novembe r 2016 " adopting measures for the prevention and control of customs fraud in 
connection with  imports of apparel and footwear"  (Decre e No. 1745/2016 ). The adoption of these 
two decrees was recommended by the Committee on Customs, Tariffs and Foreign Trade  of 
Colombia at the same session , No. 299, of 7 October  2016.11 Moreover , both decrees refer 
expressly  to Decree No. 456/2014 containing  the compound tariff found to be i nconsistent with 
Colombia's WTO obligations.12 
Panama is of the opinion that these amendments, far from bringing the measure into 
conformity with Colombia's WTO obligations, perpetuate the nullification and impairment of 
benefits accruing to Panam a directly  or indirectly under the GATT 1994 . 
On 9 March  2017, Panama requested consultations with Colombia under Article  21.5 and 
Article 4 of the DSU, Article 19 of the Agreement on Implementation of Article VII of the General 
Agreement on Tariffs and Trade 1994 ( Customs Valuation Agreement), and Article XXII of the 
GATT  1994 with respect to certain implementing measures  resulting from the implementation of 
the DSB's rulings and recommendations  in this case . 
The consultations took place in Geneva on 2 8 March  2017. Unfortunately, the y failed to 
resolve the dispute . Consequently, Panama requests the establi shment of a panel under 
Article  21.5 of the DSU.  
I. MEASURES IN DISPUTE  
A. SECURITY FOR RELEASE OF GOODS  
Decree No. 1745/2016 introduces special customs controls fo r the importation of apparel 
and footwear classified in Chapters 61, 62 and 64 of Colombia's Customs Tariff when the declared 
f.o.b. value of such products is less than or equal to  the thresholds  established  in Article 3 of that 
Decree .13 No expiry date  has been set for Decree No. 1745/2016.  
 
In order to guarantee the payment of such customs duties and penalties  as may apply , 
Article 7 of Decree No. 1745/2016 provides that as a prerequisite for the release of the goods 
referred to in Article 3 of the Decree,  the importer shall furnish security in the form of  "a specific 
bank or insurance guarantee of 200% of the unit 'threshold' price established in [ ] Article [3], 
multiplied by the quantity  imported, for a period of three ( 3) years …" (hereinafter the secur ity). 
 
The same article also provides that "[s]hould the obligation to post a guarantee in a 
valuation dispute coincide with  the obligation mentioned in this article, the latter shall prevail and 
the procedures provided  for in the customs legislation  gover ning the approval, control and 
safekeeping  of guarantees shall apply in determin ing the customs value of the imported goods and 
the penalty".  
 
                                                
10 Award of the Arbitrator, Colombia – Textiles , (Article 21.3(c)), para. 4.1.  
11 See Recital 7 of t he preamble to Decree No.  1745/2016 and Recital 2 of the preamble to Decree 
No. 1744/2016.  
12 The preamble to Decree No.  1745/2016 points out that "the customs measures set forth in this 
Decree are applied to ensure continued compliance with the policy obje ctive pursued by the measures 
contained in Decree 456 of 2014  and the amendments thereto" . (Recital 8 of the preamble to Decree 
No. 1745/2016) (emphasis added). Similarly, the preamble to Decree No.  1744/2016 mentions that "bearing in 
mind that the impleme ntation period stipulated in Article 5 of Decree 456 of 2014 , extended by Decrees  515 
of 2016 and 1229 of 2016, expires on 1  November  2016, it is necessary to apply the exception provided for in 
Article 2, paragraph 2 of Law 1609 of 2013, in order to ensur e continued compliance with the policy objective 
pursued by that measure" . (Recital 3 of the preamble to Decree No.  1744/2016) (emphasis added).  
13 Articles 2 and 3 of Decree No.  1745/2016.  WT/DS461/22  
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  Thus, the security  has the following characteristics:  
 
 Its purpose is  to guarantee the payment of such customs du ties and penalties as may 
apply14; 
 
 It applies to imports of apparel and footwear classified in Chapters 61, 62 and 64 of 
Colombia's Customs Tariff when the declared f.o.b. value of such products  is less than or 
equal to  the thresholds established in Articl e 3 of Decree 1745/201615; 
 
 It consists of a specific bank or insurance guarantee of  200% of the corresponding unit 
threshold price multiplied by the quantity  imported, for a three -year period16; 
 
 It prevails in case s where  it coincides  with the obligation t o post a guarantee in a 
valuation dispute17; and 
 
 It enters into force indefinitely as from 2 November  2016.18 
Panama understands that this measure is contained in the following legislation : 
 
(i) Decree No. 1745/2016 ; and 
(ii) Decree No. 4297/2011 of 2 6 December  2011 as regards the definition of the products 
covered by the nomenclature of Chapters 61, 62 and 64 of Colombia's  Customs Tariff.  
B. ENTRY RESTRICTED TO SPECIFIC  PORTS OF ENTRY  
Article 5 of Decree No. 1745/2016 provides that within ten days following the Decr ee's entry 
into force, the National Customs and Excise Directorate (DIAN) shall announce  the locations  that 
are authorized to import apparel and footwear classified in Chapters 61, 62 and 64 of Colombia's 
Customs Tariff whose declared f.o.b. price is less than or equal to  the thresholds established in 
Article 3 of the Decree .19 No expiry date has been set for Decree No. 1745/ 2016.20 
 
A DIAN Draft Resolution21 states that "the entry and importation of apparel and footwear 
classified in Chapters 61, 62 and 64 of  the Customs Tariff and listed  in Article 3 of Decree 1745 
of 2 November can only take place through public ports, airports and places of arrival located in 
the jurisdiction of the Sectional Directorates of Buenaventura, Cartagena and Santa Marta ".22 
 
Panam a understands that this measure is contained in the following legislation : 
 
(i) Decree No. 1745/2016;  
(ii) Decree No. 4297/2011 of 2 6 December  2011 as regards the definition of  the products 
covered by the nomenclature of Chapters 61, 62 and 64 of  Colombia's  Customs  Tariff; 
and 
                                                
14 Article 7 of Decree No.  1745/2016.  
15 Articles 2 and 3 of Decree N o. 1745/2016.  
16 Article 7 of Decree No.  1745/2016. Note that this article also states that "having provided a general 
security or not having the obligation to do so shall not exempt the importer from the obligation mentioned 
herein" . 
17 Article 7 of Decree No. 1745/2016.  
18 Article 11 of Decree No.  1745/2016.  
19 Articles 2 and 3 of Decree No.  1745/2016.  
20 Article 11 of Decree No.  1745/2016.  
21 DIAN Draft Resolution "adding a subparagraph to Article 39 of  Resolution 4240 of 2000". 
DIAN Resolution 4240 of 2  June 2000 regulates Decree 2685 of 28  December  1999 "amending the Customs 
Legislation". Article  39 of Resolution 4240 refers to "restrictions on entry of goods".  
22 See Article 1 of the DIAN Draft Resolution (emphasis added). Although Panama understands that the  
DIAN did not issue the final resolution concerning the locations authorized to import the apparel and footwear 
in question, the DIAN Draft Resolution confirms that the ports of entry for these goods are to be established. 
As explained further on, Panama r eserves the right to challenge the DIAN's final resolution on this matter as 
well as any amendments, extensions or additions to this measure.  WT/DS461/22  
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  (iii) The DIAN Draft Resolution.23 
c. CUSTOMS DUTY 
Decree No. 1744/2016 introduces a new tariff regime for imports of apparel and footwear 
classified in Chapters 61, 62 and 64 of Colombia's Customs Tariff when the declared f.o.b. value of 
such produc ts is less than or equal to  the thresholds established in that Decree .24 In principle, 
Decree No. 1744/2016 is valid for one year.25 
 
Article 1 of Decree No. 1744/2016 establishes a tariff of 40% ad valorem  for imports 
classified in Chapters 61 and 62 of Col ombia's Customs Tariff whose declared f.o.b. price is less 
than or equal to 10 US dollars per gross kilogram.  
 
Article 2 of Decree No. 1744/2016 establishes a tariff of 35% ad valorem  for 
imports  classified under the tariff headings of Chapter 64 of Colomb ia's Customs Tariff whose 
declared f.o.b. price is less than or equal to the thresholds established in that article .26 
The paragraph under Article 2 provides that imports classified under tariff heading 6406.10.00.00 
(uppers) whose declared f.o.b. price is less than or equal to 5 US dollars per gross kilogram shall 
be subject to a tariff of 35 % ad valorem . 
 
Article 3 of Decree No. 1744/2016 states that "products classified in Chapters 61, 62 and 64 
of the Customs Tariff that are not subject to the tariff s set forth in Articles 1 and 2 of this Decree 
shall be subject to the tariff provided for in Decree 4927 o f 2011 [ Colombia's Customs Tariff ] and 
its amendments" .27 Certain goods are also exempted from the application of Decree 
No. 1744/2016.28 
 
Panama understan ds that this measure is contained in the following legislation : 
 
(i) Decree No. 1744/2016 ; and 
(ii) Decree No. 4297/2011 of 2 6 December  2011 as regards the determination of products 
covered by the nomenclature of Chapters 61, 62 and 64 of Colombia's Customs Tariff.  
D. CUSTOMS AND TARIFF RE GIME APPLICABLE TO G OODS WHOSE PRICES AR E LESS THAN OR EQUAL  TO THE 
 THRESHOLDS ESTABLISH ED BY COLOMBIA  
Decree No. 1745/2016 and Decree No. 1744/2016 constitute a new customs and tariff 
regime applicable to imports of apparel and f ootwear classified in Chapters 61, 62 and 64 of 
Colombia's Customs Tariff when the declared f.o.b. value of such products is less than or equal to  
the thresholds established in those decrees.29 
 
Under this regime, importers not only have to provide a securi ty for release of the goods, 
use specific ports of entry, and pay customs duties amounting to 40 % ad valorem  (apparel) or 
35% ad valorem  (footwear)30, but they also have to comply with documentary, certification, 
monitoring, and other requirements.  
                                                
23 DIAN Draft Resolution "adding a subparagraph to Article 39 of Resolution 4240 of 2000".  
24 Articles 1 and 2 of De cree No.  1744/2016.  
25 Article 6 of Decree No.  1744/2016 states that the Decree shall remain in force for one year starting 
on 2 November  2016, and that once it has expired, the duties set forth in Colombia's Customs Tariff (Decree 
No. 4927/2011 and its ame ndments) shall be reinstated.  
26 The thresholds established are the following: heading 6401 (6 US dollars per pair); heading 6402 
(6 US dollars per pair); heading 6403 (10 US dollars per pair); heading 6404 (6 US dollars per pair); 
heading  6405 (7 US dollar s per pair).  
27 That is, a tariff of 15 % ad valorem . 
28 Articles 4 and 5 of Decree No.  1744/2016 exempt the following goods from the application of the 
Decree: (i) goods from a Special Customs Regime Zone or a free zone, provided such goods do not enter othe r 
parts of the country's customs territory, and (ii) residues and/or waste of commercial value from the clothing 
industry covered by the Plan Vallejo.  
29 Articles 2 and 3 of Decree No.  1745/2016, and Articles 1 and 2 of Decree No.  1744/2016.  
30 Note that Article 3 of Decree No.  1744/2016 provides that "products classified in Chapters 61, 62 and 
64 of the Customs Tariff that 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 D ecree 4927 of 2011 [Customs Tariff of Colombia] and its amendments". WT/DS461/22  
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Regardi ng the documentary and certification requirements, Article 4 of Decree  
No. 1745/2016 requires that for each shipment the importer submit to the Customs Operation 
Management Division (or whichever service is acting on its behalf ) of the Sectional Customs an d 
Excise Directorate with jurisdiction over the place of arrival, one month ahead of time and in 
addition to the advance declaration and the identi ty and liability form, the following  
five documents31: 
 
● Certification from the foreign supplier, legalized, with an official Spanish translation, 
providing evidence of the intention to sell to the importer in Colombia and indicating, 
where appropriate, the type of economic relationship with the importer in accordance 
with the Tax Code, also providing the address , telephone number and email address 
of the supplier as well as the six -digit tariff subheading containing the detailed 
description of the products to be exported, the quantity, and their respective prices .32 
 
● Certification of the existence of the foreign supplier, legalized, with an official Spanish 
translation, issued by the foreign entity that keeps the official register of producers or 
commercial agents  or, should no such entity exist, by the foreign suppl ier under 
oath.33 
 
● List of distributors in Colombia of the imported goods, including their Tax 
Identification Number (NIT), business name, address, telephone number and email 
address.34 
 
● Declaration signed by the legal representative of the Customs Agenc y, where 
appropriate, certifying that they have conducted a background check on the customer 
for the importer, established how long the parties have been working together, and 
acted as customs broker.35 
 
● Signed  declaration by the importer or the importer' s legal representative certifying the 
following : (i) that the value to be declared for the imported goods corresponds to the 
price actually paid or to be paid ; (ii) the address of the storage facilities for the 
imported goods ; (iii) detailed information on  the distribution and marketing chain for 
the imported goods in Colombia ; (iv) that they are aware that the customs authorities 
are entitled to submit the documents related to the import transaction to the Office of 
the Public Prosecutor and the Financial Information and Analysis Unit (UIAF).36 
 
Regarding the special monitoring requirements, Article 8 of Decree No. 1745/2016 states 
that "importers that declare goods  … indicated in Article 3 of this Decree, at a price lower than or 
equal to the threshold esta blished in that Article, must be reported to the Operational Analysis 
Management Sub -Directorate of the National Customs and Excise Directorate so that the 
information concerning such operations can be incorporated in the risk management system" . 
Furthermo re, Article 6 of the same Decree provides that "import operations observers" shall 
"examine the information [provided by DIAN] and alert the customs authorities, and also closely 
monitor the inspection and valuation process with respect to the goods classi fied under the 
headings listed in Article 3 of this Decree".  
 
Panama understands that this measure is contained in the following legislation:  
 
(i) Decree No. 1745/2016;  
(ii) Decree No. 1744/2016;  
                                                                                                                                                  
Consequently, imports of the products in question whose f.o.b. value exceeds  the established thresholds are 
subject to a 15 % ad valorem  tariff.  
31 Article 4(1) of Decree No.  1745/2016.  
32 Article 4(1)(a) of Decree No.  1745/2016.  
33 Article 4(1)(b) of Decree No.  1745/2016.  
34 Article 4(1)(c) of Decree No.  1745/2016.  
35 Article 4(1)(d) of Decree No.  1745/2016.  
36 Article 4(1)(e) of Decree No.  1745/2016.  WT/DS461/22  
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  (iii) Decree No. 4297/2011 of 2 6 December  2011, as regards the definition o f the products 
covered by the nomenclature of Chapters 61, 62 and 64 of Colombia's Customs Tariff ; 
and 
(iv) the DIAN Draft Resolution.  
II. LEGAL CLAIMS  
The implementing measures adopted by Colombia are inconsistent with its obligations under 
the Agreement Estab lishing the World Trade Organization (WTO Agreement) . Specifically, the 
measures display the following inconsistencies:  
A. SECURITY FOR RELEASE OF GOODS 
(i) This measure is a "restriction [ ]" on "importation" in violation of Article XI:1 of the 
GATT  1994 in that its inordinately high  amount and the fact that it is required for each  
and every shipment operate as a condition that limits the importation of the textile and 
footwear products concerned.  
(ii) Insofar as  the security is imposed because "it becomes  necessary  to delay the 
determination  of the value " of the goods, th is measure is inconsistent with Article  13 of 
the Agreement on Customs Valuation  in that  it exceeds the amount necessary "to cover 
the ultimate payment of customs duties for which the goods may be l iable".  
(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.  
B. ENTRY RESTRICTED TO S PECIFIC PORTS OF ENT RY 
(i) This measure is a "rest riction [ ]" on "importation" in violation of Article  XI:1 of the 
GATT  1994 in that it limits the entry into Colombia of the textile and footwear products 
concerned to specific  ports of entry.  
(ii) Insofar as the entry restricted to specific ports of entry is no t applied in a uniform, 
impartial and reasonable manner, this measure is inconsistent with Article X:3(a) of the 
GATT  1994.  
C. CUSTOMS DUTY  
(i) Insofar as  the security provided for in Decree No. 1745/2016 covers the payment of the 
relevant customs duties , the "tariff" provided for in Decree 1744/2016 would be a "duty 
or charge" other  than ordinary customs duties inconsistent with Article  II:1 (b), 
second  sentence, of the GATT  1994.  
(ii) Insofar the customs duty is not applied in a uniform, impartial and reasonable m anner, 
this measure is inconsistent with Article X:3(a) of the GATT 1994.  
D. CUSTOMS AND TARIFF RE GIME APPLICABLE TO G OODS WHOSE PRICES AR E LESS THAN OR EQUAL  TO THE 
THRESHOLDS ESTABLISH ED BY COLOMBIA  
(i) This measure is a "restriction [ ]" on "importation" in violation of Article XI:1 of the 
GATT 1994  in that the joint application of more onerous customs and tariff measures to 
textile and footwear products whose prices are less than or equal to the thresholds 
established by Colombia has a paralyzing effect on i mports of the products concerned.  
(ii) Moreover, th is more burdensome  customs and tariff regime operates in practice as an 
incentive to raise the prices  of the goods artificially , introducing de facto  minimum 
customs values in violation of Articles  1, 2, 3, 5, 6 and 7.2(f) of the Agreement on 
Customs Valuation . WT/DS461/22  
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  (iii) Insofar as the customs and tariff regime applicable to goods whose prices are less than 
or equal to the thresholds established by Colombia is not applied in a uniform, impartial 
and reasonable manner, thi s measure is inconsistent with Article X:3(a) o f the 
GATT  1994.  
Panama has identified the rules which, in its view , underpin the measures at issue . 
Nevertheless, this list is without prejudice to any other rules, administrative or judicial  decisions, 
acts, practices, guidance or guidelines issued by Colombia that may be relevant in examining this 
dispute . Accordingly, the scope of this request covers all of the aforementioned rules as well as 
any possible amendments, extensions or additions where applicable . 
 Given the inconsistencies described above, pursuant to Article 3.8 of the DSU, Panama 
considers that the measure at issue nullifies or impairs the advantages accruing to Panama under 
the provisions mentioned in this request.  
 
 Panama requests that, purs uant to Articles 6 and 21.5 of the DSU, the DSB establish a panel 
to examine this matter . Panama further requests that the panel be given the standard terms of 
reference provided for in Article 7.1 of the DSU.  
 
 Panama asks that this request for the establ ishment of a panel be included in the agenda of 
the DSB meeting scheduled for 2 2 May 2017. 
__________