WT/DS461/13  
 
15 November 2016  
(16-6268) Page: 1/35 
  Original: English  
 
 COLOMBIA – MEASURES RELATING TO  THE IMPORTATION OF T EXTILES,  
APPAREL AND FOOTWEAR  
ARB-2016-1/31 
Arbitration  
under Article 21.3(c) of the  
Understanding on Rules and Procedures  
Governing the Settlement of Disputes  
 
Award of the Arbitrator  
Giorgio Sacerdoti  WT/DS461/13  
 
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Table of Contents  
1  INTRODUCTION  ................................ ................................ ................................ ...........  9 
2  ARGUMENTS OF THE PAR TIES  ................................ ................................ ....................  10 
3  REASONABLE PERIOD OF  TIME  ................................ ................................ ..................  10 
3.1  Mandate of the arbitrator under Article 21.3(c) of the DSU  ................................ .............  10 
3.2  Measure to be brought into conformity  ................................ ................................ ........  12 
3.3  Factors affecting the determination of the reasonable period of time  ................................  16 
3.3.1  Overview of the chosen means of implementation  ................................ ......................  16 
3.3.2  Analysis  ................................ ................................ ................................ ...............  20 
4  AWARD  ................................ ................................ ................................ ......................  30 
ANNEX A  Executive Summary of Colombia's Submission  ................................ ................  31 
ANNEX B  Executive Summary of Panama's submission  ................................ ..................  32 
 WT/DS461/13  
 
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  ABBREVIATIONS USED I N THIS AWARD  
Abbreviation  Description  
Appellate Body Report  Appellate Body Report, Colombia – Measures Relating to the 
Importation of Textiles, Apparel and Footwear , WT/DS461/AB/R   
Colombia's Customs Tariff  Adopted pursuant to Decree No. 4927 of 26 December 2011 , and 
subsequently amended by, for purposes of this dispute, Decrees 
No. 074 of 23  January  2013 and No.  456 of 28  February  2014  
Decree No. 074  Decree of the President of the Republic of Colombia No.  074 of 
23 January  2013, partially amending the Customs Tariff (Panel 
Exhibits PAN -2 and COL -16)  
Decree No. 456  Decree of the President of the Republic of Colombia No.  456 of 
28 February  2014, partia lly amending the Customs Tariff (Panel 
Exhibits PAN -3 and COL -17)  
Decree No.  1609/2005  Decree of the President of the Republic of Colombia No. 1609 of 
2015, amending the general guidelines for normative technique 
covered by heading 2 of Book 2, Part 1 of  Decree No. 1081 of 2015 
(Exhibit COL -ARB-7) 
Decree No.  3303/2006  Decree of the President of the Republic of Colombia No. 3303 of 
2006, establishing provisions in relation to the Committee on 
Customs, Tariff and International Trade Affairs (Exhibit COL -ARB-8) 
Decree No. 4927  Decree of the President of the Republic of Colombia No. 4927 of 
26 December 2011, adopting the Customs Tariff and other 
provisions (Panel Exhibit PAN -1, containing extracts of Chapters 61 
through  64)  
DIAN Dirección de Impuestos y Ad uanas Nacionales  
(National Customs and Excise Directorate)  
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  
Law No. 1 340/2009  Law No. 1340 of 2009, establishing rules for the protection of 
competition (Exhibit COL -ARB-9) 
Law No. 1609/2013  Law No. 1609 of 2013, establishing general standards for 
governmental modification of tariffs, rates and other provisions 
concerning the customs regime (Exhibit COL -ARB-4) 
Panel Report  Panel Report, Colombia – Measures Relating to the Importation of 
Textiles, Apparel and Footwear , WT/DS461/R  
Triple A Committee  Committee on Customs, Tariffs and International Trade Affairs  
WTO World Tr ade Organization  
 WT/DS461/13  
 
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  EXHIBITS CITED IN TH IS AWARD  
Panel Exhibits  Description  
PAN-1 Decreto del Presidente de la República de Colombia No. 4927 del 26  de 
diciembre de 2011, por el cual se adopta el Arancel de Aduanas y otras 
disposiciones  (extractos de los Capítulos 61 -64) 
(Decree of the President of the Republic of Colombia No. 4927 of 
26 December 2011, adopting the Customs Tariff and other provisions) 
(extracts of Chapters 61 through 64))  
PAN-2 / COL -16 Decreto del Presidente de la República de Colombia N o. 074 del 23  de enero 
de 2013, p or el cual se modifica parcialmente el Arancel de Aduanas  
(Decree of the President of the Republic of Colombia No.  074 of 
23 January  2013, partially amending the Customs Tariff)  
PAN-3 / COL -17 Decreto del Presidente de la  República de Colombia No.  456 del 28  de 
febrero de  2014, por el cual se modifica parcialmente el Arancel de Aduanas   
(Decree of the President of the Republic of Colombia No.  456 of 
28 February  2014, partially amending the Customs Tariff)  
 
Arbitration Exh ibits Description  
COL-ARB-1 
(comprising  
Exhibits COL -ARB-1a through 
COL-ARB-1j) Minutes and lists of attendees of the meetings of the group of officials 
selected by Colombia's Minister of Trade, Industry and Tourism held in June, 
July, and August 2016  
COL-ARB-2 Acta de Sesión Extraordinaria de la Comisión Interinstitucional de Lucha 
contra el Contrabando celebrada el 24 de agosto de 2016  
(Minutes of the meeting of the Inter -institutional Commission against 
Smuggling held on 24 August 2016)  
COL-ARB-3 Título VII de la Constitución de Colombia, Capítulo 1, Artículo 189  
(Title VII of the Colombian Constitution, Chapter 1, Article 189)  
COL-ARB-4 Ley No. 1609 de 2013, por la cual se dictan normas generales a las cuales 
debe sujetarse el gobierno para modific ar los aranceles, tarifas y demás 
disposiciones concernientes al régimen de aduanas  
(Law No. 1609 of 2013, establishing general standards for governmental 
modification of tariffs, rates and other provisions concerning the customs 
regime)  
COL-ARB-5 Ministe rio de Comercio, Industria y Turismo,  Informe en Materia de Defensa 
Jurídica Internacional relacionada con la problemática de contrabando y 
fraude aduanero, 1 de julio de 2016  
(Ministry of Trade, Industry and Tourism, Report on International Legal 
Defence  related to the smuggling and customs fraud problem, 1 July 2016)  
COL-ARB-6 Decreto del Presidente de la República de Colombia No. 4048 de 2008, por 
el cual se modifica la estructura de la Unidad Administrativa Especial – 
Dirección de Impuestos y Aduanas Nacionales, Artículo 3.12  
(Decree of the President of the Republic of Colombia No. 4048 of 2008, 
modifying the structure of the Special Administrative Unit  
– National Customs and Excise Directorate, Article 3.12)  
COL-ARB-7 Decreto del Presidente de la Re pública de Colombia No. 1609 de 2015, por 
el cual se modifican la directrices generales de técnica normativa de que 
trata el título 2 de la parte 1 del libro 2 del Decreto 1081 de 2015  
(Decree of the President of the Republic of Colombia No. 1609 of 2015, 
amending the general guidelines for normative technique covered by 
heading 2 of Book 2, Part 1 of Decree No. 1081 of 2015)  
COL-ARB-8 Decreto del Presidente de la República de Colombia No. 3303 de 2006, por 
el cual se dictan disposiciones relacionadas con el Comité de Asuntos 
Aduaneros, Arancelarios y de Comercio Exterior  
(Decree of the President of the Republic of Colombia No. 3303 of 2006, 
establishing provisions in relation to the Committee on Customs, Tariff and 
International Trade Affairs)  WT/DS461/13  
 
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  Arbitration Exh ibits Description  
COL-ARB-9 Ley No. 1340 de 2009, por medio de la cual se dictan normas en materia de 
protección de la competencia  
(Law No. 1340 of 2009, establishing rules for the protection of competition)  
COL-ARB-14 Resolución No. 00457 de 2008, por la cual se establecen los crite rios para la 
definición de procedimientos dentro de los procesos de la Dirección de 
Impuestos y Aduanas Nacionales y para la estandarización y normalización 
de los documentos soporte de los mismos  
(Resolution No. 00457 of 2008, establishing criteria for th e definition of 
procedures within the processes of the National Customs and Excise 
Directorate and for the standardization and normalization of their support 
documents)  
PAN-ARB-4 Publicidad de proyectos de normatividad 2016 del Ministerio de Comercio, 
disponible al: < http://www.mincit.gov.co/publicaciones.php?id=37103 >, 
visitado el 16 de septiembre de 2016  
(List of draft regulations during 2016 from the Ministry of Trade, Industry 
and Tour ism, available at: 
<http://www.mincit.gov.co/publicaciones.php?id=37103 >, accessed 16 
September 2016)  
PAN-ARB-5 Publicidad de proyectos de normatividad 2013 -2014 del Ministerio de 
Comerci o, disponible al: 
<http://www.mincit.gov.co/publicaciones.php?id=32381 >, visitado el  16 de 
septiembre de 2016  
(List of draft regulations during 2013 and 2014 from the Ministry of Trade, 
Industry and Tourism, available at: 
<http://www.mincit.gov.co/publicaciones.php?id=32381 >, accessed 16 
September 2016)  
PAN-ARB-6 Decreto del Presidente de la República No. 1704 de 28 de ago sto de 2015, 
por el cual se modifica parcialmente el Arancel de Aduanas  
(Decree of the President of the Republic No. 1704 of 28 August 2015, 
partially modifying the Customs Tariff)  
PAN-ARB-7 Decretos emitidos entre enero de 2013 y agosto de 2016 que modi fican el 
Arancel de Aduanas de Colombia  
(Decrees of the President of the Republic issued between January 2013 and 
August 2016 amending the Customs Tariff)  
 WT/DS461/13  
 
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  CASES CITED IN THIS AWARD  
Short Title  Full Case title and citation  
Argentina – Hides and Leather 
(Article 21.3(c))  Award of the Arbitrator, Argentina – Measures Affecting the Export of Bovine 
Hides and Import of Finished Leather – Arbitration under Article 21.3(c) of 
the DSU , WT/DS155/10 , 31 August 2001, DSR 2001:XII, p. 6013  
Australia – Salmon 
(Article  21.3(c))  Award of the Arbitrator, Australia – Measures Affecting Importa tion of 
Salmon – Arbitration under Article 21.3(c) of the DSU , WT/DS18/9 , 
23 February 1999, DSR 1999:I, p. 267  
Brazil – Retreaded Tyres 
(Article 21.3(c))  Award of the Arbitrator, Brazil – Measures Affecting Imports of Retreaded 
Tyres – Arbitration under Article 21.3(c) of the DSU , WT/DS332/16 , 
29 August 2008, DSR 2008:XX, p. 8581  
Canada – Pharmaceutical 
Patents (Article 21.3(c))  Award of the Arbitrator,  Canada – Patent Protection of Pharmaceutical 
Products – Arbitration under Article 21.3(c) of the DSU , WT/DS114/13 , 
18 August 2000, DSR 2002:I, p. 3  
Chile – Price Band System 
(Article 21.3(c))  Award of the Arbitrator, Chile – Price Band System and Safeguard Measures 
Relating to Certain Agricultural Products – Arbitration under A rticle 21.3(c) of 
the DSU , WT/DS207/13 , 17 March 2003, DSR 2003:III, p. 123 7 
China – GOES (Article 21.3(c))  Award of the Arbitrator, China – Countervailing and Anti -Dumping Duties on 
Grain Oriented Flat -Rolled Electrical Steel from the United States – 
Arbitration under Article 21.3(c)  of the DSU , WT/DS414/12 , 3 May 2013, 
DSR 2013:IV, p. 1495  
Colombia – Ports of Entry 
(Article 21.3(c))  Award of the Arb itrator, Colombia – Indicative Prices and Restrictions on 
Ports of Entry – Arbitration under Article 21.3(c) of the DSU , WT/DS366/13 , 
2 October 2009, DSR 2009:IX, p. 3819  
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 Rela ting to the Importation of Textiles, 
Apparel and Footwear , WT/DS461/R  and A dd.1, adopted 22 June 2016, as 
modified by Appellate Body Report WT/DS461/AB/R  
EC – Bananas III 
(Article  21.3(c))  Award of the Arbitrator, European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Arbitration under 
Article  21.3(c) of the DSU , WT/DS27/15 , 7 January 1998, DSR 1998:I, p. 3  
EC – Chicken C uts 
(Article  21.3(c))  Award of the Arbitrator, European Communities – Customs Classification of 
Frozen Boneless Chicken Cuts – Arbitration under Article 21.3(c) of the DSU , 
WT/DS269/13 , WT/DS286/15 , 20 February 2006  
EC – Export Subsidies on Sugar 
(Article 21.3(c))  Award of the Arbitrator, European Communities – Export Subsidies on Sugar 
– Arbitration under Article 21.3(c) of the DSU , WT/DS265/33 , WT/DS266/33 , 
WT/DS283/14 , 28 October 2005, DSR 2005:XXIII, p. 11581  
EC – Hormones 
(Article  21.3(c))  Award of the Arbitrator, EC Measures Concerning Meat and Meat Products 
(Hormones) – Arbitration under Article 21.3(c) of the DSU , WT/DS26/15 , 
WT/DS48/13 , 29 May 1998, DSR 1998:V, p. 1833  
EC – Tariff Preferences 
(Article  21.3(c))  Award of the Arbitrator, European Communities – Conditions for the Granting 
of Tariff Preferences to Developing Countries  – Arbitration under 
Article  21.3(c) of the DSU , WT/DS246/14 , 20 September 2004, DSR 
2004:IX, p. 4313  
Japan – DRAMs (Korea) 
(Article  21.3(c))  Award of the Arbitrator, Japan – Countervailing Duties on Dynamic Random 
Access Memories from Korea – Arbitration unde r Article 21.3(c) of the DSU , 
WT/DS336/16 , 5 May 2008, DSR 2008:XX, p. 8553  
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 the DSU , 
WT/DS457/15 , 16 December 2015  
US – 1916 Act (Article 21.3(c))  Award of the Arbitrator, United States – Anti-Dumping Act of 1916 – 
Arbitrati on under Article 21.3(c) of the DSU , WT/DS136/11 , WT/DS162/14 , 
28 February 2001, DSR 2001:V, p. 2017  
US – COOL (Article 21.3(c))  Award of the Arbitra tor, United States – Certain Country of Origin Labelling 
(COOL) Requirements  – Arbitration under Article 21.3(c) of the DSU , 
WT/DS384/24 , WT/DS386/23 , 4 December 2012, DSR 2012:XIII, p. 7173  WT/DS461/13  
 
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  Short Title  Full Case title and citation  
US – Countervailing Measures 
(China) (Article 21.3(c))  Award of the Arbitrator, United States – Countervailing Duty Measures on 
Certain Products from China – Arbitration under Article 21.3(c) of the DSU , 
WT/DS437/16 , 9 October 2015  
US – Offset Act (Byrd 
Amendment) (Article 21.3(c))  Award  of the Arbitrator, United States – Continued Dumping and Subsidy 
Offset Act of 2000 – Arbitration under Article 21.3(c) of the DSU , 
WT/DS217/14 , WT/DS 234/22 , 13 June 2003, DSR 2003:III, p. 1163  
US – Oil Country Tubular 
Goods Sunset Reviews 
(Article  21.3(c))  Award of the Arbitrator, United States – Sunset Reviews of Anti -Dumping 
Measures on Oil Country Tubular Goods from Argentina – Arbitration under 
Article 21.3(c) of the DSU , WT/DS268/12 , 7 June 2005, DSR 2005:XXIII, 
p. 11619 
US – Section 110(5) Copyright 
Act (Article 21.3(c))  Award of the Arbitrator, United States – Section 110(5) of the US Copyright 
Act – Arbitration under Article 21.3(c) of the DSU , WT/DS160/12 , 15 January 
2001, DSR 2001:II, p. 657  
US – Shrimp II (Viet Nam) 
(Article 21.3(c))  Award of the Arbitrator, United States – Anti-Dumpin g Measures on Certain 
Shrimp from Viet Nam  – Arbitration under Article 21.3(c) of the DSU , 
WT/DS429/12 , 15 December 2015  
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  
 
 WT/DS461/13  
 
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  WORLD TRADE ORGANIZATION  
AWARD OF THE ARBITRATOR  
 
 
Colombia – Measures Relating to the 
Importation of Textiles, Apparel and 
Footwear  
 
Parties:  
 
Panama  
Colombia  
 ARB-2016-1/31 
 
Arbitrator:  
 
Giorgio Sacerdoti  
 
 
1  INTRODUCTION  
1.1.  On 22 June 2016,  the Dispute Settlement Body (DSB) adopted the Appellate Body Report1 
and the Panel Report2, as modified by the Appellate Body Report,  in Colombia – Measures Relating 
to the Importation of Textiles, Apparel and Footwear .3 This dispute  concerns the imposition by 
Colombia of a "compound tariff" on the im portation of certain textiles, apparel, and footwear 
classified in Chapters 61 through 64 of Colombia's Customs Tariff.4 The compound tariff was 
introduced by Decree of the President of the Republic of Colombia No.  074 of 23  January  20135 
(Decree  No. 074),  which was subsequently "replace[d] and repeal[ed]"6 by Decree of the President 
of the Republic of Colombia No.  456 of 28  February  20147 (Decree  No. 456). Decree No.  456 
entered into force on 30  March 2014 for a period of two years.8 Decree No.  456 was ext ended , 
first, until 30 July 20169, and, subsequently,  until 1  November 2016.10 The Panel and the 
Appellate  Body found that, in the instances identified in the Panel Report11, the compound tariff 
exceeds the bound tariff rates in Colombia's Schedule of Conces sions, and is ther efore inconsistent 
with Article  II:1(a) and (b) of the  General Agreement on Tariffs and Trade 1994 (GATT  1994) .12 
1.2.  At the meeting of the DSB held on 2 2 June 2016, Colombia informed of its intention to 
implement the DSB's recommendations and  rulings in this dispute, and stated that it would need a 
reasonable period of time in which to do so.13 By letter dated 8 August 2016 , Panama  informed the 
DSB that  consultations with Colombia had not resulted in an agreement on the reasonable period 
of tim e for implementation pursuant to Article 21.3(b) of the Understanding on Rules and 
Procedures Governing the Settlement of Disputes ( DSU). Panama  therefore requested that this 
                                               
1 WT/DS461/AB/R.  
2 WT/DS461/R.  
3 WT/DS461/10.  
4 Panel Report, para. 2.1.  
5 Decree of the President of the Republic of Colombia No.  074 of 23  January  2013, partially amending 
the Customs Tariff (Panel Exhibits PAN -2 and COL -16). Decree No. 074 came into effect on 1  March  2013 and 
remained in force for one year. (Panel Report, para. 7.31)  
6 Panel Report, para. 7.37.  
7 Decree of the President of the Republic of Colombia No.  456 of 28  February  2014, partially amending 
the Customs Tariff (Panel Exhibits PAN -3 and COL -17). 
8 Panel Report, para s. 2.7 and 7.31. For the products concerned, Decree No. 456 modifies the Customs 
Tariff adopted pursuant to Decree No.  4927 of 26  December 2011, which establishes ordinary customs duties 
in Colombia. ( See Decree of the Pre sident of the Republic of Colombia No.  4927 of 26  December 2011, 
adopting the Customs Tariff and other provisions (Panel Exhibit PAN -1, containing extracts of Chapters 61 
through 64) ; see also Panel Report, para.  7.141 ) 
9 Appellate Body Report, para . 1.2. 
10 Colombia's response to questioning at the hearing. See also Panama's submission  (English 
translation) , para. 164. At the hearing in th ese arbitration proceedings, Colombia indicated that it intends to 
extend further the temporal scope of Decree No. 456 u ntil the issuance of the implementing measures, due to 
the need to keep pursuing its policy objective of combating money laundering. (Colombia's response to 
questioning at the hearing) As of the date of the circulation of this Award, neither party has info rmed the 
Arbitrator as to the measures that Colombia may have adopted in respect of the compound tariff after the 
expiry of Decree No. 456 on 1 November 2016.  
11 See infra, para. 3.13. 
12 Appellate Body Report, para . 6.3.a and b; Panel Report, paras. 7.189, 7.192 -7.194, and  8.2-8.4. 
13 WT/DS461/11. See also WT/DSB/M/380.  WT/DS461/13  
 
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  period be determined through binding arbitration pursuant to Article  21.3(c) of t he DSU.  Panama 
and Colombia were unable to agree on an arbitr ator within ten  days of the referral of the matter to 
arbitration. Consequently, by letter dated 19 August 2016, Panama requested the Director -General 
of the World Trade Organization (WTO) to appoint an arbitrator pursuant to footnote 12 of 
Article  21.3(c) of the DSU. The Director -General appointed me as the Arbitrator on 30 August  
2016, after consulting with the parties. The parties were informed of my acceptance of the 
appointment by letter date d 5 September  2016. 
1.3.  Colombia and Panama filed their written submissions, as well as executive summaries 
thereof, on 12 and 1 9 September  2016, respectively.14 By joint letter dated 19 September 2016, 
Panama and Colombia agreed that any award issued by the arbitrator, including an award not 
made within 90 days after the date of adoption of the recommendations and rulings of the DSB, 
would be deemed to be an award of the arbitrator under Article 21.3(c) of the DSU for determining 
the reasonable period of time f or Colombia  to implement the recommendations and rulings of the 
DSB. The parties elaborated on their positions and answered my questions at a hearing held on 
6 October 2016.  
2  ARGUMENTS OF THE PAR TIES  
2.1.  Annexes A and B to this Award contain the executive summa ries of the parties' submissions. 
Details of the parties' arguments are further described, as appropriate, in the analysis set out in 
this Award.  
3  REASONABLE PERIOD OF  TIME  
3.1.  This section begins by setting out the mandate of the arbitrator under Article 21.3( c) of the 
DSU, in light of the text of the DSU and past awards under Article 21.3(c). It then addresses the 
measure to be brought into conformity with the recommendations and rulings of the DSB . Finally,  
it examines  the parties' arguments on what constitut es a reasonable period of time for 
implementation in this dispute.  
3.1  Mandate of the arbitrator under Article 21.3(c) of the DSU  
3.2.  Article 21.3 of the DSU provides, in relevant part:  
If it is impracticable to comply immediately with the recommendations and ruli ngs [of 
the DSB], the Member concerned shall have a reasonable period of time in which to 
do so. The reasonable period of time shall be:  
... 
(c) a period of time determined through binding arbitration within 90 days after the 
date of adoption of the recomm endations and rulings. In such arbitration, a guideline 
for the arbitrator should be that the reasonable period of time to implement panel or 
Appellate Body recommendations should not exceed 15 months from the date of 
adoption of a panel or Appellate Body report. However, that time may be shorter or 
longer, depending upon the particular circumstances.15  
3.3.  Pursuant to Article 21.3(c) of the DSU, the  mandate of the arbitrator is to determine the 
time period within which the implementing Member must comply with the recommendations and 
rulings of the DSB. Certain provisions of the DSU provide guidance regarding this mandate as 
arbitrator. Article 21.1 of the DSU provides that "[p]rompt compliance with recommendations or 
rulings of the DSB is essential in order to ensure effective resolution of disputes". Moreover, t he 
introductory clause of Article 21.3 of the DSU stipulates that a reasonable period of time for 
implementation shall be available "[i]f it is impracticable to comply immediately with the 
                                               
14 Panama filed its written submission and executive summary in Spanish. English translations of 
Panama's submission and executive summary were prepared by the WTO Language s Documentation and 
Information Management  Division. In the original English version of this Award, we refer to these English 
translations . 
15 Fns 11 -13 omitted.  WT/DS461/13  
 
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  recommendation s and rulings [of the DSB]".  Therefore,  consistent with previous arbitrations under 
Article  21.3(c),  the reasonable period of time for implementation should , in principle, be the 
shortest period possible within the legal system of the implementing Member16, in light of the 
"particular circumstances" of a dispute.17 
3.4.  In determining the reasonable period of time, the means of implementation chosen by the 
Member concerned is a relevant consideration. Indeed, the question of "when  a Member must 
comply cannot be de termined in isolation from the means used for implementation."18 In order "to 
determine when a Member must comply, it may be necessary to consider how a Member proposes 
to do so."19 In this regard, it must be noted that p revious awards under Article  21.3(c) have 
indicated that the  implementing  Member has a measure of discretion in choosing the means of 
implementation that it deems most appropriate.20 While withdrawal of the inconsistent measure 
may be the preferred means to secure prompt compliance21, modificat ion of the measure is within 
the range of permissible actions available to the implementing Member.22 The implementing 
Member 's discretion, however, is not "an unfettered right to choose any method of 
implementation".23 Rather, it is relevant to consider, in  particular, "whether the implementing 
action falls within the range of permissible actions that can be taken in order to implement the 
DSB's recommendations and rulings".24 Thus, the means of implementation chosen must be apt in 
form, nature, and content t o bring the Member into compliance  with its WTO  obligations, in 
accordance with the guideline contained in Article 21.3(c) of the DSU .25 At the same time , as 
noted by one previous arbitrator,  "[o]bjectives that are extraneous to the recommendations and 
rulings of the DSB in the dispute concerned may not be included in the method if such inclusion 
were to prolong the implementation period."26  
3.5.  The findings by the panel and the Appellate Body in the underlying dispute offer relevant  
guidance  for determining whe ther the proposed implementing measures are apt to achieve 
compliance , inasmuch as they elaborate on  those aspects of the measure at issue that were found 
to breach WTO obligations.  In this respect, these findings are also relevant to the determination of 
the time frame that is required for implementation . 
3.6.  At the same time,  there are certain limitations on the mandate of the arbitrator under 
Article  21.3(c). Indeed,  it is beyond the arbitrator's mandate to determine the consistency with the 
covered agreemen ts of the measure  that the Member envisages to adopt in order  to comply  with 
the DSB's recommendations and rulings . This question, should it arise, is to be addressed in 
proceedings conducted pursuant to Article 21.5 of the DSU.27 Arbitration under Article  21.3(c) of 
                                               
16 See Awards of the Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.5; 
China – GOES (Ar ticle 21.3(c)) , para. 3.3; EC – Hormones (Article 21.3(c)) , para. 26; and Japan – DRAMs  
(Korea) (Article 21.3(c)) , para. 25.  
17 See Awards of the Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.5; and 
China – GOES (Article 21.3( c)), para. 3.3.  
18 Award of the Arbitrator, US – COOL (Article 21.3(c)) , para. 68. (emphasis original)  
19 Award of the Arbitrator, Japan – DRAMs (Korea) (Article  21.3(c)) , para. 26. (emphasis original) 
See also Award of the Arbitrator, US – COOL (Article 21. 3(c)), para. 68.  
20 See Awards of the Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.3; 
China – GOES (Article 21.3(c)) , para. 3.4; and Brazil – Retreaded Tyres (Article 21.3(c)) , para. 48.  
21 See Awards of the Arbitrators, Colom bia – Ports of Entry (Article 21.3(c)) , para. 77; Japan – DRAMs 
(Korea) (Article 21.3(c)) , para. 37; Australia – Salmon (Article 21.3(c)) , para. 30; and Argentina – Hides and 
Leather (Article 21.3(c)) , para. 40.  
22 See Awards of the Arbitrators, Colombia – Ports of Entry (Article 21.3(c)) , para. 77; and US – COOL 
(Article 21.3(c)) , para. 77.  
23 Award of the Arbitrator,  EC – Export Subsidies on Sugar  (Article 21.3(c)) , para. 69 . 
24 Awards of the Arbitrators,  US – Stainless Steel (Mexico) (Article  21.3(c)) , para . 42; Brazil – 
Retreaded Tyres (Article 21.3(c)) , para.  48; Japan – DRAMs (Korea) (Article 21.3(c)) , para. 27.  
25 See Award s of the Arbitrator s, US – Countervailing Measures (China)  (Article 21.3(c)) , para. 3.3; 
China – GOES  (Article 21.3(c)) , para. 3.2; an d Colombia – Ports of Entry (Article  21.3(c)) , para. 64.  
26 Award of the Arbitrator,  EC – Export Subsidies on Sugar  (Article 21.3(c)) , para. 69.  
27 See Award s of the Arbitrator s, US – Shrimp II (Viet Nam)  (Article 21.3(c)) , para. 3.3;  US – 
Countervailing Mea sures (China) (Article 21.3(c)) , para. 3.4;  and Japan – DRAMs (Korea) (Article 21.3(c)) , 
para. 27. WT/DS461/13  
 
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  the DSU is limited to determining the period of time within which implementation of the 
recommendations and rulings of the DSB must occur.28 
3.7.  According to the last sentence of Article 21.3(c), the "particular circumstances" of a dispute 
may affect  the calculation of the reasonable period of time, making it "shorter or longer".29 In 
considering the "particular circumstances" under Article 21.3(c), arbitrators in past disputes have 
found that the complexity of the implementation process and the nature  of the  implementation  
steps are relevant to the determination of the reasonable period of time.30 Previous arbitrators 
have also held that the implementing Member must utilize all of the flexibilities available within its 
legal system in order to implement  the relevant recommendations and rulings of the DSB in the 
shortest period of time possible.31 However, an implementing Member is not expected to utilize 
"extraordinary procedures" to bring its measure into compliance.32 Moreover, Article 21.2 of the 
DSU di rects an arbitrator to pay particular attention to "matters affecting the interests of 
developing country Members  with respect to measures which have been subject to dispute 
settlement" . With reference to Article 21.2 of the DSU33, previous arbitrators have recognized that, 
in determining the reasonable period of time under Article  21.3(c), an arbitrator should pay 
particular attention to matters affecting the interests of both the implementing  and the 
complaining  developing country Member or Members.34 
3.8.  With regard to the burden of proof, it is well established that the implementing Member bears 
the overall burden to prove that the time  period requested for implementation constitutes a 
"reasonable period of time".35 
3.2  Measure to be brought into conformity  
3.9.  The dispute underlying this arbitration  concerns Panama's challenge to the imposition by 
Colombia of a "compound tariff" on the importation of certain textiles, apparel, and footwear 
classified in Chapters 61 through 64 of Colombia's Customs Tariff.36 The compound  tariff is 
composed of an ad valorem  levy, expressed as a percentage of the customs value of goods, and a 
specific levy, expressed in units of currency per unit of measurement.37 The ad valorem  
component  of the compound tariff is 10% for all products regard less of their value . The specific 
                                               
28 See Awards of the Arbitrators,  Peru – Agricultural Products  (Article 21.3(c)) , para. 3.6;  US – 
Countervailing Measures (China) (Article  21.3(c)) , para.  3.4; and China – GOES (Article  21.3(c)) , para.  3.2. 
29 See Awards of the Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.5;  
US – COOL (Article 21.3(c)) , para. 69; and EC – Chicken Cuts (Article 21.3(c)) , para. 49.  
30 See Awards of t he Arbitrators,  US – Shrimp II (Viet Nam)  (Article 21.3(c)) , para. 3.5;  US – 
Countervailing Measures (China) (Article 21.3(c)) , para. 3.19; US – Oil Country Tubular Goods Sunset Reviews 
(Article 21.3(c)) , para. 26; EC – Tariff Preferences (Article  21.3(c)) , para. 53; and EC – Bananas III 
(Article  21.3(c)) , para.  19. 
31 See Awards of the Arbitrators,  US – Shrimp II (Viet Nam)  (Article 21.3(c)) , para. 3.5;  US – 
Countervailing Measures (China) (Article 21.3(c)) , para. 3.5; China – GOES (Article 21.3(c)) , para. 3.4; US – 
Stainless Steel (Mexico) (Article  21.3(c)) , para. 42; Brazil – Retreaded Tyres (Article  21.3(c)) , para. 48; Japan 
– DRAMs (Korea) (Article  21.3(c)) , para. 25; and US – Offset Act (Byrd Amendment) (Article  21.3(c)) , 
para. 64. 
32 See Awards of the A rbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.5; 
China – GOES (Article 21.3(c)) , para. 3.4; US – COOL (Article 21.3(c)) , para. 70; US – Stainless Steel (Mexico) 
(Article 21.3(c)) , para. 42; Brazil – Retreaded Tyres (Article  21.3(c)) , para. 48; Japan – DRAMs (Korea) 
(Article  21.3(c)) , para. 25; and US – Offset Act (Byrd  Amendment) (Article  21.3(c)) , para. 74.  
33 Article 21.2 of the DSU reads:  
Particular attention should be paid to matters affecting the interests of developing cou ntry 
Members with respect to measures which have been subject to dispute settlement . 
34 See Award s of the Arbitrator s, Peru – Agricultural Products  (Article 21.3(c)) , para. 3.7;  US – COOL 
(Article  21.3(c)) , para.  71; Colombia – Ports of Entry  (Article 21.3( c)), para. 106; and EC – Export Subsidies 
on Sugar  (Article 21.3(c)) , para. 99.  
35 See Award s of the Arbitrator s, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.6; 
China – GOES (Article 21.3(c)) , para . 3.5; Canada – Pharmaceutical Patents ( Article 21.3(c)) , para. 47; US – 
1916 Act (Article  21.3(c)) , para. 33; and  EC – Tariff Preferences (Article  21.3(c)) , para. 27.  
36 Panel Report, para. 2.1. The relevant chapters of Colombia's Customs Tariff are: (i) Chapter 61 – 
"Articles of apparel and clo thing accessories, knitted or crocheted"; (ii) Chapter 62 – "Articles of apparel and 
clothing accessories, not knitted or crocheted"; (iii) Chapter 63 – "Other made up textile articles; sets; worn 
clothing and worn textile articles; rags"; and (iv) Chapter  64 – "Footwear, gaiters and the like; parts of such 
articles". (Ibid., fn 58 to para. 7.24)  
37 Appellate Body Report, para. 1.3; Panel Report, para. 2.4.  WT/DS461/13  
 
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  component varies depending on the product and the declared free  on board (f.o.b.) price in 
respect of two thresholds: (i) for products classified in Chapters  61, 62, and 63 (textiles and 
articles of apparel), and under tar iff line 6406.10.00.00 of Chapter 64 of the Customs Tariff 
(uppers of footwear and parts thereof, other than stiffeners), the specific levy is  US$5/kg when the 
declared f.o.b. price is US$10/kg or less, and US$3/kg when the declared f.o.b. price is greater  
than US$10/kg; and (ii) for products classified in Chapter 64 (footwear), with the exception of 
those under heading 64.06 (parts of footwear), the specific levy is US$5/pair when the declared 
f.o.b. price is US$7/pair or less, and US$1.75/pair when the de clared f.o.b. price is 
greater  than US$7/pair.38 When, in a single transaction, some goods under the same subheading 
are imported at prices at or below and others at prices above the respective threshold, the 
compound tariff payable is 10% ad valorem  plus t he highest specific levy applicable, 
i.e. US$5/kg  or US$5/pair, depending on the classification of the goods .39 Finally, with respect to 
certain imports of goods, the compound tariff does not apply.40 
3.10.  Before the Panel, Panama claimed that the compound tariff  imposed by Colombia is 
inconsistent with Article  II:1(a) and (b) of the GATT  1994 and Colombia's Schedule of 
Concessions.41 Furthermore, in response  to the defences invoked by Colombia, Panama requested 
the Panel to reject the argument that the compound ta riff is justified under the general exceptions 
set out in Article  XX(a) and Article  XX(d) of the GATT  1994.42 
3.11.  Colombia requested that the Panel reject Panama's claims in their entirety.43 
Colombia  contended that the compound tariff is a measure designed to c ombat illegal trade 
operations that are not covered by Article II:1 of the GATT 1994 and that Panama had not 
presented any evidence to establish  a prima facie  case that the compound tariff results in a breach 
of the levels bound in Colombia's Schedule of C oncessions.44 Colombia  maintained that, i n the 
event that the Panel were to find that the measure at issue is inconsistent with the  relevant  
obligations under Article  II:1, the measure is justified under the general exceptions set out in 
Article  XX(a) and A rticle XX(d) of the GATT  1994.45  
3.12.  The Panel found that the measure at issue is structured and designed to be applied to all 
imports of the products concerned, without distinguishing between "licit" and "illicit" trade, and 
that no provision in Colombia's le gal system bans the importation of goods whose declared prices 
are below the thresholds established in the measure.46 In light of these findings, the Panel did not 
consider it necessary to rule on Colombia's claim that the obligations contained in Article  II:1(a) 
and (b) of the GATT 1994 are not applicable to illicit trade.47 
3.13.  The Panel found that the compound tariff constitutes an ordinary customs duty that exceeds 
the levels bound in Colombia's Schedule of Concessions, and is therefore inconsistent with the 
first sentence of Article  II:1(b) of the GATT  1994, and accords treatment less favourable than that 
envisaged in Colombia's Schedule of Concessions, in a manner inconsistent with Article  II:1(a) of 
the GATT  1994,  in the following instances48: 
a. for imports of  products classified in Chapters 61, 62, and 63, and under tariff 
line 6406.10.00.00 of Chapter 64 of Colombia's Customs Tariff:  
                                               
38 Appellate Body Report, para. 1.3; Panel Report, para. 7.25.  
39 Appellate Body Report, para. 1.3; Panel Report, para. 7.26.  
40 The compound tariff does not apply to: (i) imports of goods from countries with which Colombia has 
signed free trade agreements, in which subheadings subject to Decree No. 456 have been negotiated; 
(ii) imports of goods entering cer tain regions of Colombia designated as Special Customs Regime Zones; or 
(iii) imports of goods under the Special Import -Export System s for Capital Goods and Spare Parts, also known 
as the "Plan Vallejo" (i.e.  production inputs, which are subsequently proce ssed or used to manufacture goods 
for export). ( Appellate Body Report, para. 1.3; Panel Report, paras. 7.27 -7.30)  
41 Appellate Body Report, para. 1.4; Panel Report, para. 3.1.  
42 Appellate Body Report, para. 1.4; Panel Report, para. 3.2.  
43 Panel Report, para . 3.4.  
44 Panel Report, para. 3.4.  
45 Panel Report, para. 3.4.  
46 Panel Report, para. 8.1.  
47 Panel Report, para. 8.1.  
48 Panel Report, paras. 8.2 -8.4. WT/DS461/13  
 
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  i. the tariff consisting of an ad valorem  component of 10% plus a specific component of 
US$5/kg, when the f.o.b. import price is U S$10/kg or less;  
ii. the tariff consisting of an ad valorem component of 10% plus a specific component of 
US$5/kg, when, in a single transaction, some products under the same subheading 
are imported at f.o.b. prices above and others at f.o.b. prices below the threshold of 
US$10/kg; and  
iii. with regard to subheading 6305.32, the tariff consisting of an ad valorem  component 
of 10% plus a specific component of US$3/kg, when the f.o.b. import price is greater 
than US$10/kg but lower than US$12/kg; and  
b. for imports of pr oducts classified under various tariff headings of Chapter 64 of 
Colombia's Customs Tariff subject to the measure at issue:  
i. the tariff consisting of an ad valorem  component of 10% plus a specific component of 
US$5/pair, when the f.o.b. import price is US$7 /pair or less; and  
ii. the tariff consisting of an ad valorem  component of 10% plus a specific component of 
US$5/pair, when, in a single transaction, some products under the same subheading 
are imported at f.o.b. prices above and others at f.o.b. prices below the threshold of 
US$7/pair.  
3.14.  Thus, according to the Panel, the ad valorem  equivalent of the compound tariff necessarily 
exceeds the levels bound in Colombia's Schedule of Concessions in the following circumstances:  
Products covered  Declared f.o.b. price  Formula for calculating the 
compound tariff  
Chapters 61, 62, and 63, and 
Chapter  64, tariff line 
6406.10.00.00  Prices of US$10/kg or less  10% ad valorem  plus US$5/kg  
Chapter  63, subheading 6305.32  Prices above US$10 and below 
US$12/kg  10% ad valorem  plus US$3/kg  
Chapters 61, 62, and 63, and 
Chapter 64, tariff line 
6406.10.00.00  Some prices above and others 
below US$10/kg when imported 
under the same subheading  10% ad valorem  plus US$5/kg  
Chapter 64, except for 
heading  64.06  Prices of US$7/pair or less  10% ad valorem  plus US$5/pair  
Chapter 64, except for 
heading  64.06  Some prices above and others 
below US$7/pair when imported 
under the same subheading  10% ad valorem  plus US$5/pair  
Source : Panel Report, para. 7.187.  
3.15.  With respect to Colombia's recourse to Article XX of the  GATT  1994, the Panel found that 
Colombia had failed to demonstrate that the compound tariff is a measure "designed" to protect 
public morals within the meaning of Article  XX(a), or "designed"  to secure compliance with 
Article  323 of Co lombia's Criminal Code  within the meaning of Article  XX(d).49 Despite having 
made these findings, the Panel indicated that, "in order to be exhaustive in its analysis", it would 
continue with its evaluation by assuming, for the sake of argument, that the co mpound tariff is 
"designed" to protect public morals, and "designed" to secure compliance with Article  323 of 
Colombia's Criminal Code .50 In the context  of its analysis of "necessity",  the Panel concluded that 
Colombia had failed to demonstrate that the com pound tariff is a measure "necessary" to protect 
public morals within the meani ng of Article  XX(a) of the GATT  1994, or "necessary" to secure 
compliance with Article  323 of Colombia's Criminal Code  within the meaning of Article  XX(d) .51 
                                               
49 Panel Report, paras. 7.401 and 7.519 . 
50 Panel Report, para s. 7.402  and 7.520 . 
51 Panel Report, paras. 7.471 , 7.536, and 8.5 -8.6. WT/DS461/13  
 
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  3.16.  Colombia appealed th e Panel's findings of inconsistency under Article  II:1(a) and (b) and 
the Panel's rejectio n of its defence under Article  XX(a) and  Article  XX(d) of the GATT 1994.  
Colombia principally argued that Article II:1 does not apply to what it considers to be illic it trade  – 
i.e. imports of products at artificially low prices for money laundering purposes. Additionally, 
Colombia argued that it should be allowed to maintain the compound tariff because it is a measure 
"necessary to protect public morals" within the me aning of Article XX(a) , and a measure 
"necessary to secure compliance" with laws and regulations that are not otherwise 
GATT -inconsistent within the meaning of Article XX(d).52 
3.17.  With respect to  the Panel's findings under  Article II:1(a) and (b) of the GATT 1 994, the 
Appellate Body reversed the Panel's finding that it was unnecessary for the Panel to issue a finding 
on whether Article  II:1 applies to illicit trade.53 In completing the legal analysis, the Appellate  Body 
consider ed that the text of Article  II:1(a ) and (b) does not exclude what Colombia classifies as 
"illicit trade ".54 The Appellate Body ultimately found  that, in the instances identified in 
paragraphs  7.164 and 7.180 of the Panel Report, the compound tariff exceeds the bound tariff 
rates in Colombia 's Schedule of Concessions, and is therefore inconsistent with Article II:1(a) 
and (b) of the GATT  1994.55 
3.18.  With respect  to the Panel's findings under Article XX(a) of the GATT 1994, the 
Appellate  Body reversed the Panel 's finding  that Colombia had failed to  demonstrate that the 
compound tariff is a measure "designed"  and "necessary"  to protect public morals.56 In completing 
the legal analysis, the Appellate Body found instead that, based on the Panel's findings,  the 
measure is indeed  "designed" to protect pub lic morals in Colombia within the meaning of 
Article  XX(a).57 Ultimately, however,  the Appellate  Body indicated that there was a lack of 
sufficient clarity with respect to several key aspects of the "necessity" analysis concerning the 
defence that Colombia presented to the Panel under Article XX(a), such as the degree of 
contribution of the measure at issue to the objective of combating money laundering and the 
degree of trade -restrictiveness of the measure. The Appellate Body considered that, without 
suffic ient clarity in respect of these factors, a proper weighing and balancing that could yield a 
conclusion that the measure is "necessary" could not be conducted. In light of these 
considerations, the Appellate Body concluded that Colombia had not demonstrate d that the 
measure at issue is "necessary" to protect public morals  within the meaning of Article  XX(a).58 
3.19.  With respect to the Panel's findings under Article XX(d) of the GATT 1994, the 
Appellate  Body found that the Panel erred in concluding that Colombia h ad failed to demonstrate 
that the measure is "designed"  and "necessary"  to secure compliance with laws or regulations that 
are not GATT -inconsistent.59 In completing the legal analysis, the Appellate Body found instead 
that the measure at issue is "designed " to secure compliance with  Article 323 of Colombia's 
Criminal  Code.60 Ultimately, however, on the basis of reasons similar to those indicated in the 
context of Article XX(a), the Appellate Body found  that Colombia had not demonstrated that the 
compound tar iff is a measure "necessary" to secure compliance with Article  323 of 
Colombia's  Criminal  Code, within the meaning of Article XX(d).61 
3.20.  With respect to the Panel's findings under the chapeau of Article XX of the GATT 1994, in 
light of  its earlier findings th at Colombia had not demonstrated that the compound tariff is 
provisionally justified under Article XX(a) or Article XX(d) of the GATT 1994, the Appellate Body did 
not consider it necessary to examine Colombia's claims on appeal pertaining to the chapeau of  
Article XX. The Appellate Body thus expressed no view on the Panel's reasoning and findings in 
that regard.62 
                                               
52 Appellate Body Report, paras. 5.1, 5.48, and 5.118.  
53 Appellate Body Report, para. 5.28.  
54 Appellate Body Report, para. 5.45.  
55 Appellate Body Report, para. 5.46.  
56 Appellate Body Report, para. 5.93.  
57 Appellate Body Report, para. 5. 100. 
58 Appellate Body Report, para. 5.116.  
59 Appellate Body Report, para. 5.13 6. 
60 Appellate Body Report, para. 5.141.  
61 Appellate Body Report, para. 5.150.  
62 Appellate Body Report, para. 5.153.  WT/DS461/13  
 
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  3.21.  The Panel and the Appellate Body recommended that the DSB request Colombia to bring its 
measure into conformity with its obligations under the GAT T 1994.63 
3.3  Factors affecting the determination of the reasonable period of time  
3.22.  Colombia submits that the reasonable period of time for implementing the 
DSB's  recommendations and rulings in the present dispute should be 12 months.  Colombia 
contends that this  time frame, which is within the  15-month  guideline foreseen  in Article 21.3 (c) of 
the DSU , is a reasonable period of time in light of the particular circumstances of this case, taking 
into account : the procedural steps set out  in Colombia's domestic regul atory framework ; the fact 
that the compound tariff is a measure seeking to combat money laundering falling within the scope 
of subparagraphs (a) and (d) of Article XX of the GATT  1994; the complexity of designing the 
implementation measure in light of the Panel and Appellate Body Reports ; and Colombia's  status 
as a developing country . 
3.23.  In response, Panama  considers that the  request of a  12-month period by Colombia is 
unfounded.  Panama contends that Colombia has failed to show that the proposed time period is  
the shortest period within its legal system for implementing the recommendations and rulings of 
the DSB.  In Panama's view, since the  Panel and the Appellate Body concluded that the compound 
tariff is inconsistent with Article II:1(a) and (b) of the GATT 1 994, Colombia's implementation 
obligation is limited to ensuring that its tariffs on the products at issue do not exceed the bound 
levels set out in its Schedule of Concessions. Panama thus considers that any action that is 
unrelated to or goes beyond the removal of the inconsistency with Article II:1(a) and (b) cannot 
be included in the reasonable period of time for implementation under Article 21.3(c)  of the DSU  
because it is "extraneous" to the DSB's recommendations and rulings.64 In Panama's opinion, the  
reasonable period of time for implement ing the DSB's  recommendations and rulings in this dispute 
should be  66 days. However,  according to Panama,  the establishment of a time period that would 
have already expired by the time the Arbitrator issued his awar d would result in the impairment of 
Panama's right to  suspend concessions  pursuant to  Article 22 of the DSU, since authorization to do 
so has to be granted within  30 days of the expiry of the reasonable period of time. Therefore, in 
order to prevent such i mpairment of its rights, Panama submits that the reasonable period of time 
under Article 21.3(c) should expire 13 days after the arbitration award in th ese proceeding s has 
been circulated to the WTO Membership . Panama elaborates  that, in prior instances , the minimum 
time within which  the Colombian authorities have carr ied out a tariff modification  is 13 days .65 
3.24.  The following  section  begins with an overview of the means and steps of implementation 
chosen by Colombia . Thereafter, I turn to analyse the parties'  specific arguments concerning the 
factors relevant for the determination of the reasonable period  of time to implement 
the DSB's  recommendations and rulings in this dispute.  
3.3.1   Overview of the chosen m eans of implementation  
3.25.  As indicated above, Colombia submi ts that the reasonable period of time for implementing 
the DSB's  recommendations and rulings in the present dispute should be 12 months. The relevant 
implementation process, as outlined by Colombia, consists of two consecutive stages of 
implementation. Eac h of th ese stages is expected to take 6 months. Colombia refers to the 
first stage as the "initial preparatory process"66, which , according to Colombia,  began immediately 
after the circulation of the Appellate Body Report in the underlying dispute.  As a starting point  in 
this process, Colombia's Minister of Trade tasked a team of officials with: (i) identifying and 
evaluating the different aspects of the measure that were declared to be WTO -inconsistent by the 
Appell ate Body and the Panel; (ii)  drawing an in ventory of domestic provisions affected by 
the DSB's findings; (iii) identifying implementation options; and (iv) defining a strategy and 
timetable for implementation.67 Colombia explains that this group of officials has met ten times 
                                               
63 Panel Report, para. 8.10; Appellate Body Report, para. 6.12 . 
64 Panama's submission (English translation), para. 125.  
65 Panama's submission (English translation), para. 178.  
66 Colombia's submission, heading III.B.1(a).  
67 Colombia's submission, para. 17. The group of officials selected by Colombia's Minister of Trad e to 
evaluate Colombia's implementation options started holding meetings on 24 June 2016, that is, two days after 
the adoption of the Panel and Appellate Body Reports. (Minutes and lists of attendees of the meetings of the 
 WT/DS461/13  
 
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  since the adop tion of the Panel and Appellate  Body Reports by the DSB on 22 June 2016 , and 
presented a report on its activities to Colombia's Inter -institutional Commission against Smuggling. 
This Commission held a meeting o n 24 August 2016  where it considered the report and de cided 
that two inter-agency working groups should be established to undertake two assessments.68  
3.26.  Colombia argues that t he first assessment by the working groups concerns the  design of the 
implementing tariff measure and, in particular, the identification o f two categories of thresholds 
that would be part of the  revised  tariff measure .69 Colombia maintains that modifying the 
compound tariff's thresholds requires conducting a rigorous economic analysis to ensure the 
proper calibration of the measure. In Colomb ia's view, conducting this analysis will take 
10 weeks.70 The second  assessment by the working groups concerns improvements to Colombia's 
customs control and supervision procedures  in the form of a n implementing  customs measure .71 
Colombia contends that "[t]hese improvements are needed to address , in particular,  the risks of 
money laundering associated with imports of apparel and footwear below the first threshold. "72 
Colombia indicate s that, whereas the design of  the tariff measure has been entrusted to a wor king 
group led by its Ministry of Trade, Industry and Tourism, the customs measure falls within  the 
responsibility of Colombia's Dirección de Impuestos y Aduanas Nacionales (DIAN) (National 
Customs and Excise Directorate) .73 Colombia asserts that "four mont hs (counted as of 24 August  
[2016]  when the Commission held its special session) will be required for the working groups to 
complete their analysis".74 The analysis and findings of the working groups will then be subject to 
approval by the officials that wi ll have to implement the measures.  For the foregoing reasons , 
Colombia concludes that the first stage should take 6 months as of  the adoption of the 
DSB's  recommendations and rulings.75 
3.27.  Colombia indicates  that, during the second stage  of implementation , it will "carry out the 
administrative processes required to enact the measures modifying the compound tariff and 
implementing the improvements to Colombia's customs control and supervision procedures".76 
Colombia explains that "[t]wo mutually -supportive decree s would have to be issued. 
One regarding the adjustment of tariffs and the other establishing the customs measures."77 
Therefore, t he second stage, as outlined by Colombia, consists of the following seven steps: (i) the 
issuance of a  recommendation by the C ommittee on Customs, Tariffs and International Trade 
Affairs (Triple A Committee) , which will require 2 weeks ; (ii) the preparation of the draft tariff 
decree, which will take 1 month and , concurrently , the preparation of the draft customs decree 
and its accompanying resolutions, which will require 2 months78; (iii) public consultations  with an 
estimated time of 2 weeks; (iv) the issuance  of an opinion by the Superintendent of Industry and 
Commerce on the potential impact of the proposed decree s on the condi tions of competition, which 
will require 2 weeks; (v)  the review and signature of the decrees by the Minister of Trade and the 
Minister of Finance , with an estimated time of 1 month; (vi) the review of the decrees by the 
Secretariat of the Office of the Pr esident of the Republic and the President's signature, which will 
                                                                                                                                               
group of officials selected by Co lombia's Minister of Trade, Industry and Tourism  held in June, July, and 
August  2016 (Exhibit COL -ARB-1)) 
68 Colombia's submission, paras. 18 -21. See also Minutes and lists of attendees of the meetings of the 
group of officials selected by Colombia's Minist er of Trade, Industry and Tourism held in June, July, and 
August  2016 (Exhibit COL -ARB-1); Minutes of the meeting of the Inter -institutional Commission against 
Smuggling held on 24 August 2016 (Exhibit  COL-ARB-2); and Ministry of Trade, Industry and Touris m, Report 
on International Legal Defence related to the smuggling and customs fraud pr oblem, 1 July 2016 
(Exhibit  COL-ARB-5). 
69 Colombia's submission, paras. 21 and 24.  
70 Colombia's submission, paras. 54 -55. 
71 Colombia's submission, paras. 22 and 24.  
72 Colombia's submission, para. 22.  
73 Colombia submits that s ome officials have been working in both groups  in order  to ensure consistency 
of the tariff and customs measures . (Colombia's submission, para. 22)  
74 Colombia's submission, para. 27.  
75 Colombia's submi ssion, paras. 26 -27. 
76 Colombia's submission, para. 28.  
77 Colombia's submission, para. 29.  
78 Colombia contends that the Dirección de Impuestos y Aduanas Nacionales (DIAN) (National Customs 
and Excise Directorate)  will have to prepare several resolutions in  addition to the customs decree. According to 
Colombia,  the preparation and review of these resolutions means that the internal process for the customs 
decree and accompanying resolutions is likely to take longer than the time period estimated above for th e tariff 
decree . (Colombia's submission, para. 33)  WT/DS461/13  
 
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  take 2 weeks; and (vii)  the publication and entry into force of the decrees, which will require 
1 month . Colombia estimates that the second stage will take 6 months .79 
3.28.  For its part, Panama argues that , under Colombian law, the period of 12 months requested 
by Colombia is not the shortest period possible to comply with the DSB's recommendations and 
rulings.  Panama point s out that , since  the DSB's  recommendations and rulings refer to the 
inconsi stency of the compound tariff with Article  II:1(a) and (b) of the GATT 1994, Colombia's 
implementation obligation is limited to removing this inconsistency, that is, to ensuring that its 
tariffs on the products at issue do not exceed the bound levels set o ut in its Schedule of 
Concessions . Consequently, Panama argues, any action that is unrelated to or go es beyond the 
removal of  the inconsistency with Article  II:1(a) and (b) cannot be  taken into account  in 
determining  the reasonable period of time for imple mentation under Article 21.3(c) of the DSU.  
Panama asserts that none of the implementing measures proposed by Colombia – the changes to 
the thresholds of the compound tariff and the improvements to its criminal policy on money 
laundering80 – are aimed at complying with  the recommendations and rulings of the DSB. In 
Panama's view, the two  types of measures proposed by Colombia seek to improve Colombia's 
criminal policy to combat money laundering , rather than to bring the measure at iss ue into 
conformity with Article  II:1(a) and (b).81 Indeed, n one of the implementing measures seeks to 
ensure that the compound tariff does not exceed Colombia's bound tariff rates. According to 
Panama, previous arbitral awards under Article 21.3(c) confirm that the reasonable peri od of time 
should not include the time to adopt measures that are not strictly necessary for or are unrelated 
to compliance with the DSB's recommendations and rulings.82 Panama also maintains that 
Colombia's implementation actions would seem to be aimed at justifying the measure at issue  
under Article XX (a) and  Article XX (d) of the GATT 1994. In this regard, Panama argues that 
no action proposed by Colombia aimed at ensuring that its measure is justified under Article XX 
should be taken into account for dete rmining the reasonable period of time for implementation in 
this dispute , bearing in mind that the Panel and the Appellate Body rejected Colombia's position 
that the measure was "necessary" under Article XX.83 
3.29.  With respect to the stages of the implementatio n process, Panama request s me to reject the 
6-month  period outlined  by Colombia for the first stage. In addition to arguing th at 
Colombia's  implementation actions in the context of the first stage are not relevant for complying 
with Article  II:1(a) and (b) , Panama asserts that Colombia does not provide any legal basis  under 
its domestic law  for: (i) the need to carry out these steps ; and (ii)  the proposed duration of these 
steps.84 With respect to the steps and time frames prop osed by Colombia for the second  stage, 
Panama maintains that Colombia confines itself to asserting that it needs 6 months without 
providing any basis in law or practice to justify the period requested. Thus, Panama argues, 
Colombia has not shown that the  time period  it request s for the second stage is the shortest 
period for implementing the recommendations and rulings of the DSB .85  
3.30.  Panama  considers that there are several "anomalies " in the steps and time frames proposed 
by Colombia  for the second stage .86 First, Panama maintains that, in  light of the flexibilities under 
Colombian law, the recommendation from the Triple A Committee could be issued within 7 days.87 
Second, Panama asserts that Colombia has not provided any legal basis to establish the 
mandatory nature or duration of the time frames regarding  step 2 (the preparation of the draft 
tariff decree) through step  6 (the review of the decrees by the Secretariat of the Office of the 
President of the Republic and the President's signature).  In Panama's view, the practice followed 
by Colombia in enacting and modifying the compound tariff does not support  the proposed time 
period of 3 months and 2 weeks. For Pan ama, the issuance of Decree  No. 074 and Decree 
                                               
79 Colombia's submission, paras. 28 -38. 
80 Panama's submission (English translation), para. 48.  
81 Panama's submission (English translation), paras. 44 -49. 
82 Panama's submission (English translation), paras. 53-59. 
83 Panama's submission (English translation), paras. 64 -68. 
84 Panama's submission (English translation), paras. 87 -91. 
85 Panama's submission (English translation), paras. 96 -99. 
86 Panama's submission (English translation), para. 100.  
87 Panama's submi ssion (English translation), paras. 102 -106. WT/DS461/13  
 
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  No. 45688 shows that steps 2 through 6 can be carried out in a maximum period of 37  days.89 
Third, Panama argues that  the following  two steps under  the second stage are unnecessary for the 
implementation of the  DSB's  recommendations and rulings: (i) the preparation of the draft 
customs decree and accompanying resolutions, because th ese inst ruments are irrelevant for the 
implementation of the recommendations and rulings of the DSB90; and (ii) the opinion of the 
Superintendent of Industry and Commerce, inasmuch as it is a discretionary step in the process of 
enacting the proposed tariff decree , which, in any event, could be conducted in parallel with other 
steps .91 Fourth, Panama  asserts that the  proposed public consultations are a discretionary step  
and, thus, they are  not essential for the modification of the compound tariff. Panama adds that, in 
the event that  this step were to be considered a  mandatory  one, the practice followed by Colombia 
in modifying the compound tariff reveals that the public consultations  step could be carried out in 
a period of 0 to 3 days.92 Finally, Panama argues that, instead of the 1-month period requested by 
Colombia, the decree modifying the compound tariff should enter into force immediately following 
publication in the Diario Oficial (Official Gazette ). While Panama understands that Colombian Law 
No. 1609/201393 provides that decrees enter into force between  15 and 90 days following their 
publication, this instrument also establishes that , in "special circumstances" , decrees shall enter 
into force immediately following publication in the Official  Gazette.94 In Panama' s view, in the case 
of tariff modification s, Colombia has considered the implementation of its WTO commitments to 
constitute "special circumstances" that justify an immediate entry into force of the relevant 
decrees following their publication.95 
3.31.  In light o f the above considerations, Panama maintains that Colombia should be granted a 
reasonable period of time of 66 days, given that this is the shortest period under  Colombian law 
for bringing the measure at issue into conformity with the  DSB's recommendations  and rulings . In 
the context of the first stage, Panama considers that the period proposed by Colombia to assess 
the Reports of the Panel and the Appellate Body and to design  the implementation options should 
not exceed 18 days .96 Moreover, Panama considers  that, depending on the implementation option 
selected by Colombia, the period for designing the implementing measure should be 0 days or 
1 day.97 Thus, i n total, the first stage should take 18 or 19 days.  In addition , Panama contends 
that, given that the t ime period requested by Colombia for the implementation of the second  stage 
was exaggerated and that some implementation steps are unnecessary, the implementation of  this 
stage should take 47 days .98 Therefore, Panama submits that the shortest period possib le for 
implementation of the recommendations and rulings of the DSB is 65 or 66 days, depending on 
the implementation option chosen by Colombia. According to Panama, the reasonable period of 
time for Colombia expired on 26  or 27  August  2016.99  
                                               
88 Panama indicates that the compound tariff was issued and modified by means of Decree No.  074 and 
Decree No. 456 , which makes them the best reference s for determining the reasonable period in this dispute . 
(Panama's submission (English translation), paras. 108 -109) 
89 Panama's submission (English translation), paras. 112 -120. 
90 Panama's submission (English translation), paras. 123 -128. 
91 Panama's submission (English translation), paras. 129 -132. Panama doubts  whether the intervention 
of the Superintendent of Industry and Commerce is relevant for the modification of a tariff , and asserts that, in 
any event, this step could be carried out simultaneously with other steps envisaged by Colombia. (Ibid., 
paras.  133-134) 
92 Panama's submission (English translation), paras. 137 -141. Panama also considers that this step 
could be carried out simultaneously with the review and signature of the decrees by the Minister of Trade and 
the Minister of Finance. (Ibid., para. 142)  
93 Law No. 1609 of 2013, establishing general standards for governmental modification of tariffs, rates 
and other provisions concerning the customs regime (Law No. 1609/2013) (Exhibit COL -ARB-4). 
94 Panama's submission (English translation), para. 144.  
95 Panama 's submission (English translation), paras. 145 -146. 
96 Panama's submission (English translation), para. 158.  
97 Panama considers that one of the implementation options available to Colombia would be to return to 
the ad valorem  tariff existing prior to the e nactment of Decree  No. 456. Under this implementation option, 
Panama considers that the time that should be included in the calculation of the reasonable period of time 
should be 0 days. Alternatively, Panama argues that , if Colombia were to opt for the es tablishment of a 
capping mechanism, the time that should be included in the calculation of the reasonable period of time should 
be 1 day. 
98 Panama's submission (English translation), paras. 169 -171. 
99 Panama's submission (English translation), para. 172.  WT/DS461/13  
 
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  3.32.  However, as indicated above100, Panama further argues that the establishment of a time 
period that would have already expired by the time  the Award in the present proceedings is  issued 
would result in the impairment of Panama's right to suspend concessions pursuant to A rticle 22 of 
the DSU, since authorization to do so must be granted within 30 days of the expiry of the 
reasonable period of time. Therefore, in order to prevent such impairment of its rights, 
Panama  submits that the reasonable period  of time should expire 13 days after the Award in this 
arbitration  has been circulated to the WTO Membership.101 
3.3.2   Analysis  
3.33.  As Arbitrator under Article 21.3(c) of the DSU, my mandate  is to determine the time  period 
within which Colombia must comply with the recommendations and rulin gs of the DSB in this 
dispute.  It is well established that the implementing Member has a measure of discretion in 
choosing the means of implementation it deems most appropriate. At the same time, the chosen 
means of implementation must be capable of bringi ng the Member into compliance with its 
WTO obligations.  The findings by the Panel and the Appellate Body in the underlying dispute offer 
relevant guidance for determining whether the proposed implementing measures are apt to 
achieve compliance, and , accord ingly, for the determination of the time frame that is required for 
implementation.  At the same time,  following previous arbitrators, I note that  objectives or 
measures  that are "extraneous " to the  findings by the Panel  and the Appellate Body adopted by 
the DSB cannot justify prolonging the reasonable period of time .102 In any event , I am mindful that 
the assessment of the WTO -consistency of the compliance measures eventually implemented is 
the domain of compliance proceedings under Article 21.5 of the DSU.  Moreover, the implementing 
Member is expected to use the flexibilities within its legal system to achieve  compliance within  the 
shortest period of time possible for implementation. However, the implementing Member is not 
expected to utilize "extraordinary p rocedures" to bring its measures into compliance.103 In 
determining the reasonable period of time, the particular circumstances of the dispute should be 
taken into account, including the complexity of the implementation process and the nature of the 
steps to  be taken for implementation. With these considerations in mind, I turn now to review the 
relevant factors for determining the reasonable period of time in this dispute in light of the parties' 
arguments.  
3.34.  The determination of the reasonable period of time in the present dispute is closely related 
to the  nature of  Colombia's compliance obligations. Indeed, the parties dis agree on  the scope of 
the compliance obligations that the DSB's recommendations and rulings impose on Colombia. 
Colombia argues that the particular circumstances relevant for de termining the reasonable 
period  of time in this case  include the fact , recognized by the Appellate Body,  that the compound 
tariff is a measure designed to combat money laundering within the scope of paragraph (a) and 
paragraph (d) of Article XX of the GATT  1994. Colombia contends that it is entitled to comply with 
the DSB's  recommendations and rulings by devising a measure that complies with Article II:1(a) 
and (b) of the GATT 1994 and, at the same time, addresses the l egitimate policy objective that the 
original measure sought to address  – i.e. combating money laundering. Colombia maintains that, 
in light of the objective pursued by the compound tariff, it cannot simply terminate the measure or 
allow it to lapse.104 Instead, Colombia foresees issuing two  "mutually -supportive decrees"105 as 
part of the implementation process. The first measure would adjust the compound tariff with a 
view to making it compliant with  Colombia's tariff bindings  under Article II of the GATT 1994,  while 
seeking to address the continuing risks of money laundering posed by imports at artificially low 
prices. Colombia asserts that the second measure  it proposes  would seek to improve 
                                               
100 See supra, para. 3.23.  
101 Panama's submission  (English translation) , paras. 177 -178. 
102 See Award s of the Arbitrator s, EC – Export Subsidies on Sugar  (Article 21.3(c)) , para. 69; and EC – 
Tariff Preferences  (Article 21.3(c)) , paras. 29-33. 
103 See Awards of t he Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.5; 
China – GOES (Artic le 21.3(c)) , para. 3.4; US – COOL (Article 21.3(c)) , para. 70; US – Stainless Steel (Mexico) 
(Article 21.3(c)) , para. 42; Brazil – Retreaded Tyres (Articl e 21.3(c)) , para. 48; Japan – DRAMs (Korea) 
(Article  21.3(c)) , para. 25; and US – Offset Act (Byrd  Amendment) (Article  21.3(c)) , para. 74.  
104 Colombia's submission, para. 4.  
105 Colombia's submission, para. 29.  WT/DS461/13  
 
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  Colombia' s customs control and supervision procedures  so as to addres s the risks of money 
laundering associated with imports of apparel and footwear .106  
3.35.  For its part , Panama contends that , since the DSB's recommendations and rulings refer to 
the inconsistency of the  compound tariff with Article  II:1(a) and (b) of the GATT 19 94, Colombia's 
implementation obligation is limited to removing this inconsistency, that is, to ensuring that its 
tariffs on the products at issue do not exceed the bound levels set out in its Schedule of 
Concessions. Consequently, Panama argues  that any a ction that is unrelated to or goes beyond the 
removal of  the inconsistency with Article  II:1(a) and (b) cannot be included in the reasonable 
period of time for implementation under Article 21.3(c)  because it would be  "extraneous" to the 
DSB's  recommendatio ns and rulings . In particular, Panama considers that the customs measure 
proposed by Colombia is not aimed at complying with the recommendations and rulings of the 
DSB. Rather, this measure seeks to improve Colombia's criminal policy to combat money 
launde ring, instead of bringing the measure at issue into confo rmity with Article  II:1(a) and  (b).107 
3.36.   I note that the parties to this dispute disagree not only on the time required by Colombia 
for the implementation of the DSB's recommendations and ruli ngs, but  also on the type of 
measures that Colombia may be able to adopt in order to comply with the DS B's recommendations 
and rulings . As stated by previous arbitrators under Article 21.3(c),  the means of implementation 
chosen by the implementing Member must be apt  in form, nature, and content to bring the 
Member into compliance with its WTO obligations within a reasonable period of time, in accordance 
with the guideline contained in Article  21.3(c).108 At the same time, as I have noted above, 
objectives or measures t hat are "extraneous" to the findings by the Panel and the Appellate Body 
adopted by the DSB cannot justify prolonging the reasonable period of time.109 Therefore, I am 
required  to examine the findings of the Panel and the Appellate  Body adopted by the DSB to  
ascertain whether the decrees  proposed by Colombia – i.e. the tariff decree  and the customs 
decree  – fall within the range of measures that would  be capable of achieving  prompt  compliance 
with the DSB's recommendations and rulings in light of those findin gs. If this is the case, the time 
necessary for Colombia to implement these measures could not be considered as exceeding the 
reasonable period of time.  
3.37.  The Panel found that the compound tariff constitutes an ordinary customs duty that, in 
certain instance s110, exceeds the levels bound in Colombia's Schedule of Concessions, and is 
therefore inconsistent with the first sentence of Article  II:1(b) of the GATT  1994, and accords 
treatment less favourable than that envisaged in Colombia's Schedule of Concessions, in a manner 
inconsistent with Article  II:1(a) of the GATT  1994.  In relation to Colombia's recourse to 
justification under Article XX of the  GATT  1994, the Panel found that Colombia had failed to 
demonstrate that the compound tariff is a measure "designed" to protect public morals within the 
meaning of Article  XX(a), or "designed" to secure compliance with Article  323 of 
Colombia's  Criminal Code  within the meaning of Article  XX(d).111  
3.38.  Colombia appealed the Panel's findings of inconsistency under Article  II:1(a) and (b) and 
the Panel's rejection of its defence under Article  XX(a) and Article XX(d) of the GATT 1994.  With 
respect to Article II:1(a) and (b) of the GATT 1994, the Appellate Body ultimately 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, the compound tariff exceeds the 
bound tariff rates in Colombia's Schedule of Concessions  in the instances identified in 
paragraphs  7.164 and 7.180 of the Panel Report , and is therefore inconsistent with Article II:1(a) 
and (b) of the GATT  1994.112 With respect  to the Panel's findings under Article XX(a) of the 
                                               
106 Colombia's submission, paras. 8 and 22.  
107 At the oral hearing, Panama clarified that it would not object to the inclusion of some time for 
enacting the proposed tariff measure within the reasonable period of time, provided that such measure would 
be accompanied by some form of capping mechanism to ens ure that Colombia's bound tariff rates are not 
exceeded.  
108 See Award s of the Arbitrator s, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.3; 
China – GOES  (Article 21.3(c)) , para. 3.2; and Colombia – Ports of Entry (Article  21.3(c)) , para. 6 4. 
109 See Award s of the Arbitrator s, EC – Export Subsidies on Sugar  (Article 21.3(c)) , para. 69; and EC – 
Tariff Preferences  (Article 21.3(c)) , paras. 29-33. 
110 See supra, para. 3.13 . 
111 Panel Report, paras. 7.410 and 7.519 . 
112 Appellate Body Report, para. 6.3 . WT/DS461/13  
 
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  GATT  1994, the Appellate  Body reversed the Panel's finding that Colombia had failed to 
demonstrate that the compound tariff is a measure "designed" and "necessary" to protect public 
morals.113 In completing the legal analysis, the Appellate Body found that the measure is indeed  
"designed" to protect public morals in Colombia within the meaning  of Article  XX(a). However, in 
the context of the "necessity" analysis, the Appellate  Body ultimately found that Colombia had not 
demonstrated that the compound tariff is a measure "necessary " to protect public morals within 
the meaning of Article  XX(a).114 The Appellate Body made similar findings in the context of 
Article  XX(d) of the GATT 1994 .115 The Panel and the Appellat e Body recommended that the 
DSB request Colombia to bring its measure into conformity with its obligations under the 
GATT  1994.116 
3.39.  The above  findings  are, in my view, instructive for  my consideration  of the scope of 
Colombia's implementation obligations . This, in turn, will be relevant for my determination of the 
reasonable period of time that Colombia may be granted for implementation.  I note  that both the 
Panel and the Appellate Body concluded that, in certain instances, the compound tariff is 
inconsistent with Colombia's obligations under Article II:1(a) and (b) of the GATT 1994 . Turning to 
the findings under Article XX, I recall that the Ap pellate Body reversed  the Panel 's finding  that the 
compound tariff is not "designed" to combat money laundering.117 In completing the legal analysis, 
the Appellate  Body went on to  find that the compound tariff is not incapable of combating money 
laundering, thereby recognizing that there is a relationship between that measure and the 
protection of public morals. On this basis, the Appellate Body found that the compound tariff is 
"designed" to protect public morals in Colombia within the meaning of Article  XX(a).118 A similar 
set of findings w as made under Article XX(d).119  
3.40.  While  the Appellate Body ultimately found fault with Colombia's compound tariff, it 
recognized that there is a relationship between the compound tariff and the objective of combat ing 
money laun dering  in Colombia . I recall that the implementing Member has a measure of discretion 
in choosing the means of implementation that it deems most appropriate120, as long as they are  
apt in form, nature, and content to bring the Member into compliance with its  WTO obligations.121 
In light of this guidance and the recognition that the compound tariff seeks to combat money 
laundering,  I consider that Colombia has a range of implementation options, which include the 
adoption of a measure that continue s to pursue the  policy objective of combating money 
laundering  in a WTO -consistent manner . Therefore, in determining the reasonable period of time, 
it is relevant , in my view,  that the DSB's recommendations and rulings imply that Colombia may 
decide to adopt  measures pur suing  the policy objective of combating money laundering, as long as 
they are apt in form, nature, and content to bring Colombia into compliance with its obligations 
under the GATT  1994.   
3.41.  Consequently, I disagree with Panama 's argument  that the proposed customs measure and 
those aspects of the tariff measure that relate to the policy objective of combating money 
                                               
113 Appellate Body Report, para. 5.93.  
114 Appellate Body Report, paras. 5.100, 5.117, and 6.4-6.7. 
115 See supra, para. 3.19 . The Appellate Body did not consider it necessary to examine Colombia's 
claims on appeal pertaining to the chapeau of Article XX.  
116 Appellate Body Report, para. 6.12; Panel Report, para. 8.10.  
117 Appellate Body Report, para. 5.93.  
118 The Appellate Body found, in particular, that, when several findings by the Panel are read together, it 
is clear from its analysis that the compound tariff is  not incapable of combating money laundering, such that 
there is a relationship between that measure and the protection of public morals. The Appellate Body 
understood the Panel to have recognized that at least some goods priced at or below the thresholds could be 
imported into Colombia at artificially low prices for money laundering purposes, and would thus be subject to 
the disincentive created by the higher specific duties that apply to such goods.  (Appellate Body Report, 
para. 5.99)  
119 Similarly, in the context of Article XX(d), the Appellate Body indicated that, when several findings by 
the Panel are read together, it is clear from its analysis that the compound tariff is not incapable of securing 
compliance with Article 323 of Colombia's Criminal Code, such that there is a relationship between that 
measure and securing such compliance.  (Appellate Body Report, para. 5.140)  
120 See Awards of the Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.3; 
China – GOES (Article 21.3(c)) , para. 3.4; and Brazil – Retreaded Tyres (Article 21.3(c)) , para. 48.  
121 See Award s of the Arbitrator s, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.3; 
China – GOES  (Article 21.3(c)) , para. 3.2; and Colombia – Ports of Entry (Article  21.3(c) ), para. 64.  WT/DS461/13  
 
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  laundering are  "extraneous" to the recommendations and rulings of the DSB .122 On the contrary, 
I consider that the time needed to enact these decrees  should be included in the calculation of the 
reasonable period of time for implementation under Article 21.3(c) of the DSU.   
3.42.  Having concluded that the calculation of the reasonable period of time in the present dispute 
should  include the time needed to en act both the tariff mea sure and the customs measure, I  turn 
next to  examine  the various steps of the legal process to modify the compound tariff  outlined by 
Colombia . 
3.43.  Before analysing  in detail the implementation steps described by Colombia, I  consider it 
important to recall the statement of the arbitrator in Chile – Price Band System  that the 
implementing Member must "at the very least" promptly take concrete steps towards 
implementation from the date of adoption of the panel or Appellate  Body reports by t he DSB.123 
Accordingly, in making my determination as to the reasonable period of time for implementation,  
I will take into account the action s taken  by Colombia in the period of time between the date of 
adoption of the Panel and Appellate Body Reports by th e DSB and the initiation of these arbitration 
proceedings.  
3.44.  Colombia's proposed implementation process is divided in two stages.  The first stage is 
referred to by Colombia as the "initial preparatory process".124 Colombia began this process 
immediately after the adoption of the Panel and  Appellate Body Reports by requesting a group  of 
officials to analyse the Panel and Appellate Body Reports and to  evaluate how to implement the 
recommendations and rulings of the DSB.125 This group of officials, composed of repre sentatives 
of, inter alia , the Ministry of Trade, Industry and Tourism, and the DIAN, held several meetings  to 
identify implementation options and define a timetable for implementation . These officials also 
presented a report on the group's  activities126 to Colombia's Inter -institutional Commission against 
Smuggling127, which held a special session on 24 August 2016  to discuss possible strategies to 
address problems of smuggling, money laundering , and customs fraud in apparel and footwear , in 
relation to the im plementation of the DSB's recommendations and rulings.  At this session, the 
Commission decided that inter -agency working groups should be created  to establish an 
implementation plan  and timetable.128 Colombia indicates that one of the working groups is taske d 
with identifying the categories of thresholds that would be part of the revised tariff . In particular, 
Colombia maintains that it needs to identify : (i) a first threshold of prices that are artificially low 
and thus that do not reflect market conditions because th ese price s cannot reflect costs of 
production; and (ii) a second threshold of prices that are low, but above the first threshold, 
reflecting a range of prices that will be  subject to  close supervision, albeit not as tight as that 
envisaged for prices below production costs .129 According to Colombia, identifying these thresholds  
requires conducting an economic analysis , which  will take 10 weeks.130 The second  working group  
is tasked with  designing a customs measure to improve Colombia's customs control  and 
supervision procedures. Colombia indicates that  this working group will need to analyse how to 
improve various aspects of Colombia's customs control and supervision procedures, including  
                                               
122 Panama's submission (English translation), para. 125.  
123 Award of the Arbitrator, Chile – Price Band System (Article 21.3(c)) , para. 43. See also Award s of the 
Arbitrator s, Colombia – Ports of Entry (Article 21.3(c)) , para. 79;  and US – Section 110(5) Copyright Act 
(Article  21.3(c)) , para. 46.  
124 Colombia's submission, heading III.B.1(a).  
125 The group of officials selected by Colombia's Minister of Trade to evaluate Colombia's implementation 
options started holding meetings on 24 June 2016, that  is, two days after the adoption of the Panel and 
Appellate Body Reports. (Minutes of the meetings of the group of officials selected by Colombia's Minister of 
Trade, Industry and Tourism held in June, July, and August 2016 (Exhibit COL -ARB-1)). 
126 See Mini stry of Trade, Industry and Tourism, Report on International Legal Defence related to the 
smuggling and customs fraud problem, 1 July 2016  (Exhibit COL -ARB-5). 
127 The Inter-institutional Commission against Smuggling  is an inter -agency body composed of 
repre sentatives from the Ministry  of Trade, Industry and Tourism , the Ministry of Finance, the General 
Prosecutor 's Office, the National Police, the DIAN, the Ministry of Foreign Affairs, the Ministry of Agriculture, 
the Superintendence of Industry and Commerce , the Superintendence of Transportation and Ports, and the 
Financial Information and Analysis Unit. (Colombia's submission, para. 19)  
128 Colombia's submission, para. 20. See also Minutes of the meeting of the Inter -institutional 
Commission against Smuggling  held on 24 August 2016  (Exhibit COL -ARB-2), p.  7. 
129 Colombia's submission, para. 21.  
130 Colombia's submission, paras. 21 and 54 -55. WT/DS461/13  
 
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  strengthening customs controls based on risk assessment criteria , and close supervis ion of  the 
price and origin of the imported goods .131 
3.45.  In my view, the initial preparatory process described by Colombia appears to be in line with 
the need to take concrete steps towards implementation from the date of adoption of the pan el or 
Appellate  Body reports by the DSB. Indeed, Colombia promptly establishe d an institutional 
framework tasked with  proposing and coordinating an administrative plan of action for 
implementation. In this regard, a previous arbitrator  observed that  "consu ltations within 
governmental agencies … are typically a concomitant of lawmaking  in contemporary polities"132, 
and therefore should be taken into account in determining  the reasonable period of time for 
implementation. This guidance is relevant  and instructi ve. Thus, I consider the work conducted by 
the various groups of officials in the Colombian Government during the first stage relevant to my 
determination.  In this regard, I observe that Panama does not dispute that, for the purposes of the 
preparatory sta ge, Colombia needs to analyse the Panel and Appellate Body Reports  in order to  
identify its implementation options and establish a roadmap .133  
3.46.  Colombia contends that the first stage should  take 6 months in total as of the adoption of 
the DSB's recommendatio ns and rulings.134 This time period includes the 4 months that, according 
to Colombia, will be required for the working groups to complete their analytical work .135 I agree 
that the determination of the reasonable period of time should include time to conduct the 
preparatory process described by Colombia, which includes time for the relevant government 
authorities to review and analyse the DSB's recommendations and rulings, as well as time to 
evaluate how to implement these recommendations and rulings . I also r ecognize that some of the 
tasks envisaged by Colombia, such as the economic analysis to design the new thresholds of the 
revised tariff, may entail a significant degree of complexity.  For instance, Colombia explained at 
the hearing that the process of iden tifying the new thresholds  involve s examining extensive  
economic information from domestic and foreign  sources to determine the correct prices for each 
threshold .136 However,  the arguments and evidence submitted by the parties have convinced me 
that some of the preparatory steps envisaged by Colombia could be pursued in parallel  and within 
shorter time frames . Therefore, I am not convinced that Colombia requires 6 months to conduct 
this work. Rather, I consider that the first stage described by Colombia c an be completed in less 
than 4 months.  
3.47.  Turning to the second stage, Colombia indicates  that, during th is second stage , it "will carry 
out the administrative processes required to enact the measures modifying the compound tariff 
and implementing the improvemen ts to Colombia's customs control and supervision 
procedures".137 I recall that Colombia envisages the following seven steps for  the second stage : 
(i) the issuance of a recommendation by the Triple A Committee; (ii) the preparation of the draft 
tariff decree and of the draft customs decree and its accompanying resolutions; (iii) public 
consultations; (iv) the issuance of an opinion by the Superintendent of Industry and Commerce on 
the potential impact of the proposed decrees on the conditions of competition; ( v) the review and 
signature of the decrees by the Minister of Trade and the Minister of Finance; (vi) the review of the 
decrees by the Secretariat of the Office of the President of the Republic and the President's 
signature; and (vii) the publication and e ntry into force of the decrees. Colombia estimates that 
the second stage of implementation will take 6 months.138 
3.48.  The parties' arguments and evidence show that some  of the component steps  of the 
second  stage are  administratively mandated.  Indeed, Colombia ha s established that , before the 
tariff measure and the customs measure can be enacted,  certain legal prerequisites  must be 
                                               
131 Colombia's submission, paras. 22 -24. 
132 Award of the Arbitrator , Chile – Price Band System (Article 21.3(c)) , para. 42.  See also Award of the 
Arbitrator,  Colombia – Ports of Entry (Article 21.3(c)) , para. 80.  
133 Panama's submission (English translation), para. 152. I also note that Panama disagrees  with 
Colombia as regards the time allocated for the first stage.  
134 Colombia's su bmission, para. 27.  
135 Colombia's submission, para. 27.  
136 Colombia explains that this assessment includes determining the costs production of the products at 
issue and the prices in the international market for those products. (Colombia's response to questi oning at the 
hearing)  
137 Colombia's submission, para. 28.  
138 Colombia's submission, paras. 28 -38. WT/DS461/13  
 
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  fulfilled . For instance, pursuant to Decree No. 3303/2006, the preparation of the decrees requires  
a recommendation from the  Triple A Committee.139 I also note that , following the recommendation 
by the Triple A Committee, the tariff decree and the customs decree must be prepared by, 
respectively, the Ministry of Trade, Industry and Tourism, and the DIAN .140 Moreover, 
Decree  No. 1609/2015 est ablishes certain legal formalities that have a bearing on some of the 
steps outlined by Colombia, including public consultations, the issuance of the opinion by the 
Superintendent of Industry and Commerce, the review and signature of the decrees by the 
Minister of Trade and the Minister of Finance, and the review of the decrees by the Secretariat of 
the Office of the President of the Republic .141 Finally, as established  in Law No. 1609/20 13, 
enactment of the decrees at issue requires the signature by the Pres ident of Colombia and  
subsequent publication in the Official Gazette  and entry into force.142 
3.49.  I consider it important to offer some additional remarks regarding two of the steps 
mentioned above  – i.e. public consultations ; and the opinion of the Superintende nt of Industry and 
Commerce. With regard to public consultations, Colombia argues that, pursuant to 
Decree  No. 1609/2015, draft decrees must be subject to public consultations before being 
enacted.143 Panama counters that Decree No. 1609/2015 is only applica ble to situations where in 
accordance with the law  public consultations are required, and that Colombia has not established 
that any law mandates public consultations prior to enactment of the proposed tariff and customs 
decrees.144 At the hearing, Colombia indicated that Article 8 of Law No. 1437/2011 requires that 
the proposed decrees are subject to public consultations.145 In response, Panama stated that, 
while this provision in Law No.  1437/2011 does refer to public consultations, it provides the 
implementi ng authority with the discretion to decide whether or not it wishes to elicit comments 
from the public.146 In this context, I note that, in its submission, Panama refers to a number of 
past instances where the Ministry of Trade, Industry and Tourism held pub lic consultations in 
enacting decrees related to tariffs , ranging from  0 days – where comments were requested for the 
same day – to 3 days. According to Panama, the period of time for public consultations concerning 
the modification of Decree No. 456 was 3  days.147 As indicated by Panama, it appears that, in 
several instances, the Colombian authorities have held public consultations prior to issuing a 
decree related to the imposition of tariffs. The examples identified by Panama show that the 
periods of time devoted to public consultations have indeed been rather short. At the same time, 
I consider it important to underscore that these examples also demonstrate that the relevant 
Colombian authorities have conducted public consultations in the process of enacti ng decrees. As 
noted by one arbitrator, "the controlling principle is that the 'reasonable period of time' should be 
                                               
139 Colombia's submission, para. 30; Decree of the President of the Republic of Colombia No. 3303 of 
2006, establishing provisions in relation to the Committee on  Customs, Tariff and International Trade Affairs 
(Decree No.  3303/2006) (Exhibit COL -ARB-8). 
140 Colombia's submission, paras. 31 -32; Decree of the President of the Republic of Colombia No. 1609 
of 2015, amending the general guidelines for normative techniqu e covered by heading 2 of Book 2, Part 1 of 
Decree No. 1081 of 2015 (Decree No.  1609/2005), Articles 2.1.2.1.6 and 2.1.2.1.7 (Exhibit COL -ARB-7); 
Decree of the President of the Republic of Colombia No. 4048 of 2008, modifying the structure of the Special 
Administrative Unit – National Customs and Excise Directorate, Article 3.12 (Exhibit COL -ARB-6); Resolution 
No. 00457 of 2008, establishing criteria for the definition of procedures within the processes of the National 
Customs and Excise Directorate and for  the standardization and normalization of their support documents 
(Resolution N o. 00457/2008) (Exhibit  COL-ARB-14). 
141 Decree No. 1609/2005, Articles 2.1.2.1.6, 2.1.2.1.7, 2.1.2.1.9, 2.1.2.1.14, and 2.1.2.1.17 
(Exhibit  COL-ARB-7). 
142 Colombia's submission, p ara. 37; Title VII of the Colombian Constitution, Chapter 1, Article 189 
(Exhibit COL -ARB-3); Law No. 1609/2013 (Exhibit COL -ARB-4). 
143 Colombia's submission, para. 34.  
144 Panama's submission  (English translation) , para. 137.  
145 Colombia's response to questio ning at the hearing.  
146 Panama's response to questioning at the hearing.  
147 Panama's submission (English translation), paras. 139-141. See also Publicidad de proyectos de 
normatividad 2016 del Ministerio de Comercio, disponible al: 
<http://www.mincit.gov.co/publicaciones.php?id=37103 >, visitado el 16 de septiembre de 2016 (List of draft 
regulations during 2016 from the Ministry of Trade, Industry and Tourism, available at: 
<http://www.mincit.gov.co/publicaciones.php?id=37103 >, accessed 16 September 2016) (Exhibit 
PAN-ARB-4); and Publicidad de proyectos de normatividad 2013 -2014 del Ministerio de Comercio, disponible 
al: <http://www.mincit.gov.co/publicaciones.php?id=32381 >, visitado el  16 de septiembre de 2016 (List of 
draft regulations during 2013 and 2014 from the Ministry of Trade, Industry and Tourism, avai lable at: 
<http://www.mincit.gov.co/publicaciones.php?id=32381 >, accessed 16 S eptember 2016) 
(Exhibit  PAN-ARB-5). WT/DS461/13  
 
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  'the shortest period possible within the legal system  of the Member to implement the relevant 
recommendations and rulings of the DSB'. "148 The legal system of the implementing Member 
includes, in my view, those legal norms that stem from administrative practice in addition to those 
found in legislative or administrative rules. Moreover, as is the case  in respect of the inter -agency 
implementati on process devised by Colombia, conducting public consultations during the rule -
making process is commonly associated with good governance practices in "contemporary 
polities"149, and should , in the present case , be taken into account when determining the 
reasonable period of time for implementation. However, as I explain in more detail below, while I 
do not object to this step, I  have some reservations about the time  frame proposed by Colombia.  
3.50.  Turning to  the step of obtaining an  opinion from the Superintend ent of Industry and 
Commerce, Panama contends that  this is a discretionary step in the implementation of the 
recommendations and rulings of the DSB, because Article 7 of Law  No. 1340/2009 clear ly states  
that the Superintendent " may issue a prior opinion on  draft governmental regulatory measures 
that may have an impact on free competition".150 While I agree that the Superintendent has the 
discretion to decide whether or not to issue an opinion in a given case, Article 7 also makes clear 
that the authorities responsible for preparing the draft decrees will inform  the Superintendent of 
the administrative acts that they intend to enact.151 In my opinion, this clar ifies that 
Colombian  authorities are required to inform the Superintendent, an independent authority152, 
before enact ing a new measure when the proposed measure may have an impact on competition 
in the market. In the present case, the Superintendent has already announced  that he will issue an 
opinion as to whether the proposed decrees ha ve an impact on the con ditions of competition in 
Colombia.153 On this basis, I conclude that , while some aspects of the legal framework related to  
obtaining an  opinion from the Superintendent of Industry and Commerce may involve a 
discretionary component,  I disagree with Panama's position that  this step is unnecessary  in the 
present case . However , as explained below , I have some reservations about the time  frame 
proposed by Colombia.  
3.51.  Turning to the time periods envisaged by Colombia, I observe that  some of the legal 
instruments  it identified  as the legal basis for various steps of the second stage do not appear to 
prescribe any minimum mandatory time frame s, and , for those that do, such time frames are 
shorter than the time requested by Colombia in the  present arbitration . For examp le, 
Decree  No. 1609/2015 does not seem to establish any minimum mandatory time frames for the 
relevant officials within the Ministry of Trade, Industry and Tourism to prepare the draft tariff 
decree and its explanatory document. Moreover, Colombia has not established that 
Decree  No. 1609/2015 provide s for a minimum time period to carry out public consultations  in 
respect of the draft tariff and customs decree s. Similarly, Law No. 1340/2009  does not appear to 
require the Superintendent of Industry and Commer ce to issue his opinion on the potential impact 
of the proposed decrees on the conditions of competition in the market within a specific 
time frame.  The same observation can be made with respect to the review of the draft tariff 
decree by the Ministry of T rade, Industry and Tourism and the review of the draft customs decree 
and its accompanying resolutions by the DIAN. Furthermore,  with respect to the preparation of the 
customs decree by the DIAN,  I observe that , while  Article 2 of Resolution No. 00 457/2008154 
establishes a period of 13 working days for the "formalization of procedures" within the DIAN, this 
resolution  does not  otherwise seem to set minimum periods for the DIAN's decision -making 
proce ss. Similarly, Articles  3 and 4 of Decree  No. 3303/2006 esta blish that the Triple A Committee 
can meet between regular sessions at any time, after 5  days of a meeting being called by its 
president.  These considerations, in my view, show that, as the arbitrator in Colombia – Ports of 
Entry  also noted, Colombia's  legal process for enacting the tariff decree and the customs decree is 
                                               
148 Award of the Arbitrator, Chile – Price Band System (Article 21.3(c)) , para. 34 (quoting Award of the 
Arbitrator, US – 1916 Act (Article 21.3(c)) , para.  32. (emphasis added)  
149 Award of the Arbitrator , Chile – Price Band System (Article 21.3(c)) , para. 42.  See also Award of the 
Arbitrator,  Colombia – Ports of Entry (Article 21.3 (c)), para. 80.  
150 Panama's submission (English translation), para. 131 (quoting Law No. 1340 of 2009, establishing 
rules for the protection of competition (Law No. 1340/2009), Article 7 (Exhibit COL -ARB-9)). (emphasis added 
by Panama)  
151 Law No. 1340/2009 ( Exhibit COL -ARB-9). See also, Panama's submission (English translation), 
para. 130. 
152 Colombia's response to questioning at the hearing.  
153 Colombia's response to questioning at the hearing.  
154 Exhibit COL -ARB-14. WT/DS461/13  
 
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  "characterized by a considerable degree of flexibility" .155 Thus, there appears to be a certain 
amount of flexibility within the normal administrative process that Colombia may be  expect ed to 
utilize in good faith in order  to ensure prompt compl iance with the recommendations and rulings of 
the DSB.  
3.52.  It appears that some of the steps outlined by Colombia could be carried out  in parallel, to 
the extent that they are not necessarily sequential . Furthermore , there seems to be a degree of 
overlap in the composition of some of the Colombian authorities that take part in the  various steps 
of the  decision -making process  leading to the enactment of  the decrees . For instance, Article 2 of 
Decree No. 3303/2006 reveals that representatives of the Ministry of Trade, Industry and Tourism 
and the Ministry of Finance, as well as the Director -General of the DIAN, are members of the 
Triple  A Committee .156 A review of the minutes of the special session of Colombia's  
Inter-institutional Commission against Smuggling also shows that representatives of some of the 
entities in charge of various implementation steps were present, such as representatives from the 
Ministry of Trade, Industry and Tourism  and the Superintenden ce of Industry and Commerce, as 
well as  the Director -General of the DIAN.157 In my opinion, t he time needed  to seek additional 
review of the implementing measures by th ese entities  could be  reduced , given that the views of 
these entities are likely to be tak en into account within the ambit of the  Inter-institutional 
Commission against Smuggling and the  Triple  A Committee. Indeed, in view of the extensive 
preparatory work during the first stage and the  decision -making process related to the 
recommendation of t he Triple  A Committee , I consider that the time frames for the following steps 
outlined by Colombia  could be shorten ed without compromising the ability of the relevant 
authorit ies to carry out the relevant  tasks: the drafting of the tariff decree by the Mi nistry of 
Trade, Industry and Tourism  and the drafting of the customs decree and its accompanying 
resolutions by the DIAN ; the issuance of the opinion by the Superintendent of Industry and 
Commerce ; and the review and signature of the decrees by the Minist er of Trade and the Minister 
of Finance.  
3.53.  In addition, I recall that Colombia estimates that the preparation of the customs decree and 
its accompanying resolutions will take 2 months.158 Colombia indicates that it will prepare the 
customs decree and the accom panying resolutions in parallel . Colombia nevertheless  foresees 
requiring more time for this step of the process  (i.e. 2 months)  than for the preparation of the 
draft tariff decree  (i.e. 1 month) .159 Colombia has not established that there is a mandatory 
minimum time  period under Colombian law for the DIAN to draf t the customs decree and its 
accompanying resolutions. I reiterate that some of the  implementation  steps could be carried out  
in parallel , and that there is a degree of overlap in the compo sition of some of the groups of 
Colombian  authorities that take part in this process. In light o f these considerations, while 
I acknowledge Colombia's efforts in preparing the customs decree and its accompanying 
resolutions in tandem, I would also expect Colombia to  make use of all possible synergies and 
flexibilit ies in the decision -making process so that it may prompt ly bring itself into  compliance with  
its WTO obligations.  Therefore, Colombia may be expected to prepare the tariff decree, on the one 
hand, and the c ustoms decree  and its accompanying resolutions, on the other hand,  in parallel and  
within a shorter  time frame  than the one proposed by Colombia .  
3.54.  I turn now to Colombia's proposed implementation steps f or the final part of the 
second  stage.  Colombia indic ates that it requires 2 weeks for the review of the decrees by the 
Secretariat of the Office of the President of the Republic and the President's signature .160 Pursuant 
to Decree  No. 1609/2015 , draft decrees subject to the President 's signature  must comply w ith 
certain legal formalities before being signed by the President of Colombia . Prior to  being submitted 
for signature  by the President , draft decrees must be sent to the Secretariat of the Office of the 
President of the Republic  together with an explanato ry document addressing various issues, such 
as the historical background and reasons for the enactment of the measure, a descript ion of the 
measure's scope of application, and an analysis of the measure's  legal validity . If a draft decree 
                                               
155 Award of the Arbitrator,  Colombia – Ports of Entry  (Article 21.3(c)) , para. 83 (quoting Award of the 
Arbitrator , US – 1916 Act (Article 21.3(c)) , para. 39 ). 
156 Decree No.  3303/2006 (Exhibit COL -ARB-8). 
157 Minutes of the meeting of the Inter -institutional Commission against Smuggling on 24 August 201 6 
(Exhibit COL -ARB-2), pp. 1 -2. 
158 Colombia's submission, para. 33.  
159 Colombia's submission, fn 23 to para. 33.  
160 Colombia's submission, para. 37.  WT/DS461/13  
 
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  does not fulfil all the required legal formalities , it must be returned to the competent authority for 
the necessary adjustments to be made.161 In my view, g iven the need to guarantee that the 
process of preparing the decrees adhere s to the required legal formalities, the 2-week period for 
the review of the decrees by the Secretariat of the Office of the President of the Republic and the 
President's signature does not seem to be excessive .  
3.55.  At the same time, I note that Colombia requests 1 month for the publication of the dec rees 
in the Official Gazette  and their entry into force. This time  frame, in my view, may not be fully 
warranted in light of the requirements under Colombian law for the publication and entry into force 
of decrees. Indeed, as acknowledged by Colombia, Arti cle 2 of Law No. 1609/2013 provides that 
decrees will enter into force between 15 and 90 days after their publication.162 In light of this 
requirement, it would be reasonable to expect that the entry into force of the tariff and customs 
decrees could  take pl ace no later than 15 days after their publication in the Official Gazette . 
Panama  argues that, since Law No. 1609/2013 also establishes that in "special circumstances" 
decrees shall enter into force immediately following publication, ensuring compliance  with 
Colombia's  WTO commitments justifies an immediate entry into force for  the proposed tariff and 
customs  decrees .163 I note that Panama provided evidence of several decrees  prepared by 
Colombia's Ministry of Trade, Industry and Tourism related to tariff mod ifications that entered into 
force immediately after their publication.164 Therefore, since Colombia is able to use the flexibility 
foreseen  in Article 2 of Law  No. 1609/2013  – as has been done in the past in relation to tariff 
modifications  – Colombia shoul d use such flexibility to  follow the same practice in order to ensure 
prompt compliance with the DSB's recommendations and rulings  in this dispute . 
3.56.  Having  examin ed all the arguments and evidence regarding the time frames for carrying out 
the various steps under  the second stage,  while I am persuaded  that the se steps outlined by 
Colombia are warranted in order to enact the tariff decree and the customs decree, I am not 
convinced that Colombia cannot complete all of these steps in less than  6 months.  Indeed, I recall 
that Colombia's normal administrative process includes  a certain amount of flexibility, which 
Colombia may be expected to utilize in good faith in order to ensure  prompt  compliance with the 
recommendations and rulings of the DSB. Moreover, some of  the steps outlined by Colombia could 
be carried out  in parallel, to the extent that they are not necessarily sequential. Furthermore, 
there seems to be a degree of overlap in the composition of some of the groups of Colombian 
authorities involved in the v arious steps of the decision -making process leading to the enact ment 
of the decrees. On this basis , I consider that the second stage described by Colombia can be 
completed in less than  4 months.   
3.57.  Finally,  both Colombia and Panama submit  that Article 21.2 o f the DSU requires me to take 
into account their respective status as developing countries as a "particular circumstance []" in 
determining the reasonable period of time for implementation  in the present case . As noted by  
past arbitrators, Article 21.2 of t he DSU directs arbitrators acting pursuant to  Article 21.3(c) to pay 
"'[p]articular attention' to 'matters affecting the interests' of both an implementing and 
complaining develo ping country Member or Members"165, given that the text of this provision does 
not limit its scope of application to either of these parties .  
3.58.  Colombia argues, in particular, that it is on the verge of signing a Peace Agreement and 
thus putting an end to the longest running internal conflict in Latin America. Colombia maintains 
that i mplementing the Peace Agreement will require adopting a comprehensive  package of 
institutional and other legal changes, which will put significant strains on the limited resources that 
                                               
161 Colombia's submission, paras. 31 and 37; Decree No. 1609/2015 , Articles 2.1.2.1.6, 2.1.2.1.7 , 
and 2.1.2.1.17  (Exhibit COL -ARB-7). 
162 Colombia's submission, para. 37; Law No. 1609/2013, Article 2, para. 2 (Exhibit COL -ARB-4). 
163 Panama's submission (English translation), paras. 143 -145. 
164 Panama's submission (English translation), paras. 146 -148 (referring to Decre to del Presidente de la 
República No. 1704 de 28 de agosto de 2015, p or el cual se modifica parcialmente el Arancel de Aduanas 
(Decree of the President of the Republic No. 1704 of 28 August 2015, partially modifying the Customs Tariff) 
(Exhibit PAN -ARB-6); and Decretos emitidos entre enero de 2013 y agosto de 2016 que modifican el Arancel 
de Aduanas de Colombia (Decrees of the President of the Republic issued between January 2013 and 
August  2016 amending the Customs Tariff) (Exhibit PAN -ARB-7). 
165 Award s of the Arbitrator s, Colombia – Ports of Entry  (Article 21.3(c)) , para. 106  (emphasis omitted) ; 
EC – Export Subsidies on Sugar (Article 21.3(c)) , para. 99  (emphasis omitted) . WT/DS461/13  
 
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  the Colombian Government has at its disposal as a developing country.166 At the hearing, 
Colombia added that, in the present case, implementation of the DSB's recommendations and 
rulings has a more severe impact on Colombia as a developing country because the compound 
tariff addresses money laundering, an aspect linked to Colom bia's internal conflict .167 In this 
respect, I observe that I have already taken into account that the compound tariff seeks to combat 
money laundering in my determination of the reasonable period of time by accepting the means of 
implementation proposed by Colombia.168 At the same time , I also  agree with Panama that the 
question of compliance with the DSB's  recommendations and rulings is not related to the complex  
legislative reform that Colombia may need to carry out in the framework of its peace process. 
Therefore, I disagree with Colombia's argument that the package of legal and institutional changes 
that it may need to implement  as part of the peace process should  have a bearing on the 
determination of  the reasonable period of time  for implementation .  
3.59.  For its part, Panama contends  that the compound tariff has  resulted in  serious injury to 
Panama.  In particular, Panama submits  that the compound tariff has resulted in lost sales, jobs , 
and businesses related  to trade in clothing and footwear in the Colón Free  Trade Zone.169 In my 
view, Panama has not demonstrated that the alleged lost sales, jobs , and businesses are a 
consequence of the compound tariff. Thus,  Panama's argumentation has not swayed me to 
conclude that Panama's status as a developing country requir es having a shorter period of time for 
implementation in the present dispute . 
3.60.  Moreover, a s indicated in  the Colombia – Ports of Entry  award under Article 21.3(c) , in a 
situation where both the implementing and the complaining Member are developing countrie s, the 
requirement provided in Article 21.2 is of little relevance, except if one party succeeds in 
demonstrating that it is more severely affected by problems related to its developing country 
status than the other party  with respect to measures that have been subject to dispute 
settlement .170 In the present case, in determining the reasonable period of time, I have recognized  
that the  means of implementation  chosen by Colombia may comprise  measures seeking to combat 
money laundering . Beyond this recognition , I do not consider that either Colombia or Panama have 
demonstrated that the challenges each of them faces as a developing countr y are relatively more 
severe than the ones faced by the other party.  Consequently, the developing country status of 
both parti es does not alter my conclusion as to what I consider to be the  reasonable period of time 
for implementation in the present dispute.  
                                               
166 Colombia's submission, para. 64.  
167 Colombia's response to questioning at the hearin g. 
168 See supra , paras. 3.40 -3.41.  
169 Panama's submission (English translation), para. 187. Panama contends that, in 2015 alone , the 
compound tariff has caused Panama a loss in sales of US$135.6 million in relation to trade in clothing, and 
US$74.1 million i n relation to trade in footwear , as well as a loss of 5,717 jobs in August 2016 compared with 
the level of employment recorded in December 2015 . Panama also argues that the compound tariff has led to 
the closing down of many businesses linked to sales of f ootwear, apparel and textiles  in the Colón Free Trade 
Zone. (Ibid.)  
170 Award of the Arbitrator,  Colombia – Ports of Entry  (Article 21.3(c)) , para. 106.  WT/DS461/13 
 
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  4  AWARD 
4.1.  In light of the foregoing considerations, I determine that the "reasonable period of time" for 
Colombia to implement the recommendations and rulings of the DSB in this dispute is 7 months, 
from 22 June 2016, that is, from the date on which the DSB adopted the Panel and Appellate Body 
Reports in this dispute. Therefore, the reasonable  period of time will expire on 22 January 2017. 
Signed in the original at Geneva this 2nd day of November 2016 by: 
 
 
 
 
________________________ 
Giorgio Sacerdoti 
Arbitrator WT/DS461/13  
 
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  ANNEX A  
EXECUTIVE SUMMARY OF  COLOMBIA'S SUBMISSIO N  
1. Colombia estimates that it will require a period of 12 months  to im plement  the DSB's 
recommendations and rulings. Colombia is considering two consecutive stages of implementation. 
The first stage has been initiated and will take 6 months . As part of this stage, Colombia will 
evaluate the specific changes that need to be i ntroduced to the compound tariff and to its customs 
control and supervision procedures. The second stage will consist of the enactment of two sets of 
measures, the first modifying the compound tariff and the second introducing improvements to 
Colombia's cu stoms control and supervision procedures. This stage will take 6 months .  
2. This period is within the guideline provided in Article 21.3 (c) and is a reasonable period of 
time in light of the particular circumstances of this case.  
3. Firstly, as confirmed by t he Appellate Body, the compound tariff is a measure to combat 
money laundering falling within the scope of subparagraphs (a) and (d) of Article XX, and 
contributes to the fight against money laundering. The fact that the compound tariff is a measure 
to fight money laundering is relevant for the determination of the reasonable period of time as this 
means that the measure cannot simply be terminated. To simply terminate the measure would 
imply endorsing a criminal activity (money laundering), exposing Colomb ian citizens to the 
criminal consequences of this activity, and ignoring the government's duty to enforce the Criminal 
Code, including Article 325. Further, the modification of the compound tariff or its replacement 
with alternative measures requires coord ination and consultations with a number of agencies 
within the Colombian government.  
4. Secondly, the complexity of implementation has been recognized as a relevant factor in 
determining the reasonable period of time. In this case, designing the implementatio n measure in 
light of the findings made by the Appellate Body and the Panel is extremely complex as it will 
require a rigorous economic analysis to ensure the proper calibration of the measure.  
5. Thirdly, Panama's newly adopted Cabinet Decree No. 28 has gen erated significant 
antagonism internally in Colombia and undermined political support for the process of 
implementation, and will likely increase the domestic scrutiny of the implementation measures that 
Colombia may take.  Press reports indicate that the t ariff increase is aimed at products in which 
Colombia is a significant supplier of Panama, and suggest that it is a retaliatory measure against 
Colombia for its alleged failure to comply with the Appellate Body and Panel's findings in this case. 
This puts a premium on the need for appropriate internal consultations and will make it more 
difficult to expedite the process.  
6. Fourthly, Colombia is on the verge of putting an end to the longest running internal conflict 
in Latin America by signing a Peace Agreeme nt with the FARC on September 26, 2016. Colombia's 
internal conflict has been fuelled by the enormous profits of the drug trade, which are repatriated 
through money laundering operations such as those at issue in this dispute. Money laundering thus 
has a s ignificant negative impact on Colombia's welfare and development. The process related to 
the Peace Agreement puts significant strains on the limited resources that the 
Colombian  government has at its disposal as a developing country as this will require or ganizing a 
referendum in a short period and enacting a large package of institutional and legal changes to 
give effects to the terms of the Peace Agreement. By contrast, Panama has been one of the fastest 
growing economies worldwide. Colombia is therefore more severely affected by the problems 
related to its developing country status than Panama and this factor should be considered in 
determining the reasonable period of time.  
 WT/DS461/13  
 
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  ANNEX B  
EXECUTIVE SUMMARY OF  PANAMA'S SUBMISSION*  
I. INTRODUCTION  
 
1. In its sub mission, Colombia requested a reasonable period of time for implementation of 
12 months . Panama considers that this period of time is unfounded. In the opinion of Panama, the 
correct period of time is 66 days . However, the establishment of a time period th at would have 
already expired by the time the Arbitrator issued his award would result in the impairment of 
Panama's right to apply retaliatory measures under Article 22 of the DSU, since authorization to do 
so expires 30 days after the expiry of the reaso nable period of time. Therefore, in order to prevent 
such impairment to Panama's rights, and given the particular circumstances of these proceedings, 
Panama would not object if Colombia were granted an additional 13 days from when the award is 
issued to ta ke the relevant steps to ensure compliance with the recommendations and rulings of 
the DSB.  
II. WHAT HAS TO BE IMPLEMENTED IN THIS DISPUTE IS A VERY SPECIFIC MATTER  
 
2. Colombia's implementation obligation is limited to removing the compound tariff's 
inconsis tency with Article II of the GATT 1994, that is, to ensuring that the tariff applicable to the 
affected products does not exceed the bound levels set out in the Schedule of Concessions. This 
issue could not be clearer.  
3. Accordingly, any period of time for c arrying out action that is unrelated to or goes beyond 
the removal of the inconsistency with Article II of the GATT 1994 cannot be included in the 
reasonable period of time that is the subject of this arbitration. None of the measures suggested 
by Colombia  seek to ensure that the compound tariff ceases to exceed its bound tariff rates; 
instead they focus on refining and improving Colombia's criminal policy to combat 
money  laundering.  
4. Furthermore, the period of time should not be considered for implementing any action 
proposed by Colombia that seeks to ensure that its measure is justified by Article XX of the GATT. 
As has been argued, the only valid actions for the purposes of calculating the reasonable period 
are those that genuinely seek to ensure that the import tariffs on the products in question respect 
Colombia's bound tariff rates in light of the interpretation of Article II given by the Appellate  Body.  
III. THE 12 -MONTH PERIOD REQUESTED BY COLOMBIA IS NOT THE SHORTEST 
PERIOD  POSSIBLE  
 
A. THE STEPS AND TIME PERIODS PROVIDED FOR STAGE 1 OF IMPLEMENTATION 
PROPOSED BY COLOMBIA MUST BE DISMISSED AS UNFOUNDED  
 
5. Colombia requests a period of six months for the first stage of its implementation process, 
which would involve two areas of action. Both areas, howeve r, are actions unrelated to the 
implementation of the rulings and recommendations of the DSB. Both are aimed at improving 
Colombia's criminal  policy on money laundering, which is extraneous to ensuring that Colombia's 
tariffs do not exceed the bound rates.  Accordingly, these actions, as described, are not relevant to 
the implementation of Colombia's obligations under Article II of the GATT 1994.  
6. Even assuming for the sake of argument that the processes envisaged in Stage 1 did 
deserve to be included in the calculation of the reasonable period of time, Colombia does not 
provide any basis for: (i) the need to carry out these steps; and (ii) the proposed duration of 
these  steps.  
7. To conclude, Panama requests the Arbitrator to dismiss the time periods contained i n 
Stage  1. Panama will explain below the time  frame that corresponds to Stage 1.  
                                               
* This text was originally submitted in Spanish by Panama.  WT/DS461/13  
 
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  B. THE STEPS AND TIME PERIODS ENVISAGED FOR STAGE 2 PROPOSED BY 
COLOMBIA ARE ALSO UNFOUNDED  
 
8. Colombia confines itself to asserting that it needs six months  to implement the s teps 
described in Stage 2, once again without providing any basis. Panama maintains that Colombia has 
not shown that the requested reasonable period of time is the shortest period for implementing the 
recommendations and rulings of the DSB. This may be sum marized in the following table:  
STAGE 1: DESIGN OF THE MEASURE  
Step Comment by Panama  
Step 1: Establishment of Trade Ministry task force 
responsible for reports and design of roadmap.  Step necessary for reviewing Panel and Appellate 
Body decisions. Colom bia's time period lacks basis.  
Step 2: Consultation with Inter -Institutional 
Commission Against Smuggling. Establishment of 
working groups to design the implementing measure 
and subsequent approval.  Criminal policy matter, implementation of 
anti-money -laundering law or security, unrelated to 
the required tariff modification.  
STAGE 2: ENACTMENT OF THE MEASURE  
Step Comment by Panama  
Step 1: Recommendation of the Triple A Committee  Step appropriate; time period has no basis  
Step 2:  
(i) Preparation of Trad e Ministry decree  
 
(ii) Preparation of DIAN decree; issuing of DIAN 
resolution   
(i) Step appropriate  
 
(ii) Criminal policy matter, implementation of 
anti-money -laundering law or security, 
unrelated to the required tariff modification.  
Step 3: Publication of draft decree for 
public  comment  Discretionary factor; in any case, period excessive  
Step 4: Opinion of the Superintendent of Industry 
and Commerce  Step discretionary and irrelevant  
Step 5: Signature by Minister of Trade and Minister 
of Finance  Step ap propriate; time period has no basis  
Step 6: Approval and signing by President  Step appropriate; time period has no basis  
Step 7: Entry into force  Discretionary factor; time period without basis in 
recent practice  
 
IV. A PERIOD OF 66 DAYS IS THE SHORTEST  PERIOD FOR COLOMBIA TO BRING ITS 
MEASURE INTO CONFORMITY WITH WTO LAW  
 
A. STAGE 1: DESIGN OF THE MEASURE  
 
1. Review of the reports and design of the initial roadmap  
 
9. Panama considers that the time period that should be allocated for the assessment of the 
Appellate Body and Panel  reports and for designing a roadmap should not exceed 18 calendar 
days, as that is the period to be found in Colombia's evidence for the design of the 
so-called  "roadmap".  
2. Design of the implementing measure  
 
10. Taking into account the main areas of work identified by the Trade Ministry in step 1 and in 
light of Panama's considerations that the fulfilment of criminal policy objectives cannot provide a 
basis for granting a reasonable period of time for compliance with obligations unde r Article II of 
the GATT 1994, of the three areas of work identified by Colombia only one is relevant. That area of 
work is the one that concerns the "tariff measure compatible with the GATT  1994".  WT/DS461/13  
 
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  11. In the tariff context, the implementation options that may  be compatible with Article II of 
the GATT are limited. There are two known options:  
a. To let the compound tariff expire : Panama considers that for the design of an 
implementing measure based on returning to the already existing ad valorem  tariff, the 
alloca ted time period should be zero (0) days, since the measure being designed 
already  exists.  
b. A "capping mechanism" to ensure that the ad valorem equivalents of specific duties 
would not exceed the tariff bindings : Colombia would not need more than one day to 
design this capping mechanism, as the only thing required would be to establish certain 
"equilibrium prices", which involves a simple arithmetical process.  
12. Taking into account the actions and options adopted by Colombia in Decree No.  1229, 
Panama considers  that Colombia has a period of zero (0) days for the design of a measure. 
However, if Colombia were to opt for the establishment of the capping mechanism, the time period 
would be one (01) day.  
13. Consequently, Panama considers that for Stage 1, the correspon ding time period is 18 or 
19 days, depending on the implementation option selected by Colombia.  
B. STAGE 2: ENACTMENT OF THE MEASURE  
 
14. Panama considers the time period of six months  requested by Colombia for the 
implementation of the seven steps of Stage 2 to be excessively divorced from the practice of 
modifying the compound tariff; this would indicate that some steps are unnecessary, that they can 
be conducted in parallel, or that their time periods have increased without any basis. Panama 
concludes that, on the basis of the objective evidence, the implementation of Stage 2 would 
require 47 days.  
15. Considering that for Stage 1 the appropriate time period is 18 or 19 days, and that for 
Stage  2 the appropriate time period is 47 days, Panama takes the position t hat the shortest period 
possible for implementation of the recommendations and rulings of the DSB is 65 or 66 days, 
depending on the implementation option chosen by Colombia, as from 22  June 2016. Therefore, 
the reasonable period of time for Colombia expir ed on 26 or 27  August  2016.  
16. While, objectively, it would be correct to set a reasonable period of time corresponding to 
that date, such a finding in isolation would give rise to impairment of Panama's rights under 
Articles  22.2 and 22.6 of the DSU.  
C. SPEC IAL CIRCUMSTANCE OF THE CASE: IMPAIRMENT OF PANAMA'S RIGHTS  
 
17. As the possibility of obtaining compensation (Article 22.2) and recourse to the suspension of 
concessions or other obligations (Article 22.6) are conditional upon the expiry of the reasonable 
period of time (and in the latter case, the submission of the request within 30 days of the expiry of 
the reasonable period of time), a finding by the Arbitrator that the reasonable period of time 
expired on 27  August  2016, would have the effect of diminishin g Panama's rights under these 
provisions. This  situation would be contrary to the object and purpose of these DSU rules and to 
Article  3.5 of the DSU.  
18. Taking this situation into account, which in Panama's view qualifies as a 
special  circumstance of the cas e within the meaning of Article 21.3(c), Panama requests the 
Arbitrator to recognize that Colombia should have brought its measure into conformity by 
27 August  2016. However, in view of the fact that the establishment of a time period that had 
already expi red would affect Panama's  rights under Articles 22.2 and 22.6 of the DSU, Panama 
considers that the reasonable period of time should be established prospectively from the issuing 
of the award. Thus, Panama suggests that the reasonable period should expire 13 days after the 
arbitration award has been issued and circulated. Panama bases the period of 13 days on the 
minimum period used by Colombia to process a tariff modification from the submission of the 
proposal to the Triple A Committee until its entry int o force following promulgation by the 
President. This was the case of Decree No.  343/2016 by which Colombia modified its tariff.  WT/DS461/13  
 
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  V. THE PARTICULAR CIRCUMSTANCES CITED BY COLOMBIA DO NOT APPLY  
 
19. Colombia's first argument is that the recent measures taken by  Panama make 
implementation more complicated. This argument is unfounded.  
20. Colombia does not adequately explain how this argument could have an impact on the 
concrete stages of the implementation process. Colombia asserts that the situation could 
undermine political support for the implementation process. This type of consideration is political 
and has no place in a technical arbitration that should be based objectively on what a 
Member's  legal system and practice require to implement its WTO obligations. Th e criterion of 
"contentiousness" and "political sensitivity" of an implementing measure are not relevant 
"particular circumstances" within the meaning of Article 21.3(c).  
21. Colombia's second argument is that it is a developing country, which would justify a longer 
reasonable period of time. This argument is also unfounded. Panama does not question the 
complexity of the political process which Colombia is undergoing. However, the clear fact is that 
the question of compliance with the rulings and recommendation s of the DSB is something that 
has nothing whatsoever to do with the political and legislative reform that Colombia has to carry 
out in the framework of its peace process. In any case, the issue in question affects Panama just 
as much as, if not more serio usly than, Colombia . 
VI. CONCLUSION  
 
22. Colombia has failed to show that the proposed time period is the shortest period within its 
legal system for implementing the recommendations and rulings of the DSB. A reasonable period 
of time of 66 days is amply suffi cient and perfectly reasonable for Colombia to implement the 
recommendations and rulings of the DSB. However, owing to the circumstances of the case 
relating to the possible impairment of Panama's rights under Article 22 of the DSU, Panama will 
not oppose,  on an exceptional basis, the Arbitrator granting 13 days from the date of issue of his 
award for Colombia to bring the compound tariff into conformity with Article II of the GATT 1994.  
23. In the present case, while Colombia has discretion in deciding on the manner of 
implementation of these recommendations and rulings, its obligation is confined to ensuring that 
the tariff applicable to the products affected by the compound tariff does not exceed the tariff 
rates bound in its Schedule of Concessions.  
________ __