WT/TPR/S/254 Trade Policy Review 
Page 34 
  
III. TRADE POLICIES BY MEASURE 
(1) OVERVIEW  
1. Since its previous Trade Policy Review in  2005, particularly from 2010, Ecuador has 
proceeded with reforms of tariff and non-tariff measu res.  At the same time, however, more emphasis 
has been placed on the use of these and other measu res as instruments to implement its endogenous 
economic and social development strategy in accordance with new priorities, including import substitution in certain sectors.  Major changes have  included a reduction in the average level of MFN 
tariff protection, increased transparency in, and st reamlining of the government  procurement regime, a 
greater role for the State in the economy, and new production incentives. 
2. The tariff remains one of Ecuador's main trade policy instruments and an important source of 
tax revenue (13.3% of total tax reve nue in 2010).  As a result of customs tariff reforms, including the 
adoption of the HS 2007 tariff nomenclature, and chang es in the type, level, and distribution of rates 
of duties, the average applied MFN tariff rate fe ll from 11.4% in 2005 to 9.3% in 2011.  Whereas the 
average applied MFN tariff for industrial imports dropped from 10.6% to 7.6% that for agricultural products rose from 16.7% to 19.6%.  Some 53.5% of applied MFN tariff rates are currently in the 
range of zero to 5%, up from 38.7% in 2005.  Peak ad valorem  rates (affecting meat offal, rice, and 
milk and milk cream), remained unchanged.  The structure of tariff rates has become more complex and dispersed with the increase in the number of ad valorem  rates, and the adoption of compound 
duties;  it now involves 17 ad valorem , and 10 compound rates.  The tariff structure also remains 
characterized by tariff escalation, which means that  effective rates of tariff protection can be 
considerably higher than nominal tariff rates.   
3. Some 95% of tariff rates are ad valorem , which contributes to the tran sparency of the tariff.  
On the other hand, ad valorem  equivalents of non- ad valorem  rates, which in general tend to conceal 
relatively high tariff rates, were not available.  The fact that all tariff lines are bound imparts a high 
degree of predictability to the tariff;  however , the simple average of bound MFN rates (21%) 
considerably exceeds the average applied MF N rate (9.3%), providing the authorities with 
considerable scope for increasing applied MFN tariffs  within bindings, as has been the case during the 
review period.  Furthermore, 19 ten-digit lines exceed ed the bound rates by 5 to 15 percentage points;  
the use of compound duties on items bound on an ad valorem  basis, and the non-submission of their 
ad valorem  equivalents (AVEs) casts doubts on whether th ese rates are within their binding levels.  
Although tariff-rate quotas have remained in place for 17 agricultural items, they have not been used 
because of lower MFN applied rates and increases in wo rld prices of the items concerned.  Variable 
import levies continue to be applied to agricu ltural items originating in non-Community countries 
under the Andean Price Band System. 
4. Computerized customs clearance and other modernization efforts were undertaken to 
facilitate trade by, inter alia , reducing physical inspections, and instead focusing on import risk 
assessment;  the preshipme nt inspection regime was eliminated as of 2008. 
5. Import prohibitions and restrictions affect nume rous items but slightly fewer than in the 
previous TPR;  they apply mainly for reasons of human, animal or plant life or health, the 
environment, safety, or security.  In addition to institutional changes in the area of standards, new 
mandatory conformity assessment requirements, c onsisting of test reports and certificates of 
conformity for industrial products, were introduced in  2007.  The share of national standards that are 
identical to international standards is 3.6%.  No new mutual recognition agreements (a trade 
facilitation measure), were signed during the review period.  In 2009, action was taken to harmonize 
and coordinate the activities of entities involved in agri cultural health and food safety;  legislation was Ecuador WT/TPR/S/254 
 Page 35 
 
 
passed to ensure more flexible and user-friendl y management of the entire Codex Alimentarius 
legislation, and to regulate biotechnology.  A safe guard measure was taken during the review period 
against imports of windshields other than fro m developing countries, except for Colombia 
(September 2010), and safeguard measures we re taken for balance-of-payments purposes 
(January 2009-July 2010) in the form of qua ntitative restrictions, and tariff surcharges. 
6. Major legislative, procedural, and instituti onal changes were implemented in 2008 with a 
view to improving the transparency and efficiency  of Ecuador's public procurement regime;  as from 
2009, all government-controlled companies have b een subject to the new rules.  New online 
procurement procedures were introduced, but special procedures were mostly used albeit less often;  
open-call tendering was the second most used met hod.  Emphasis was placed on using government 
procurement as an industrial policy tool, and a series of preferences were adopted for local suppliers 
depending on local content and company size. 
7. To ensure domestic supplies and encourag e domestic processing, temporary export 
prohibitions are being used on rice and quantitative restrictions on exports of waste and scrap of 
certain ferrous and non-ferrous metals;  temporar y export surveillance affects leather and furs.  
Exports of bananas and coffee remain subject to in dustry levies;  exports (and production) of banana 
and plantains, cocoa, coffee, shrimp, and fish pr oducts remain subject to minimum reference or 
support prices paid to producers by buyers.  Ec uador maintains drawbacks, and as from 2010 a special 
economic development zone offers various tax c oncessions, including exemption from income tax;  
the latter replaced the maquila  and free zones regimes.   
8. To promote investment in domestic production activities, three classes  of tax incentives 
(general, sectoral, for depressed areas), incl uding income tax holidays, were introduced in 
December 2010 for new investment in priority an d selected import substitution sectors, as well as for 
small and medium-sized enterprises;  non-tax incen tives, involving concessional loans and grants, are 
also available.  Domestically produced milk a nd canned tuna, scad, sardine, and trout remain subject 
to a zero rate of value-added tax (IVA);  IVA co llected on imports provides a large part of IVA 
revenue.  A set of measures was introduced to enc ourage the renovation of public transport vehicle 
that were in poor state. 
9. Several articles of the 2008 C onstitution (Chapter II(2)) restrict competition by favouring 
state control or intervention in strategic activities,  thereby reversing the limited past privatization 
efforts.  As a result, state involvement in th e production and trade of certain goods and services 
remains significant, and is being strengthened in cer tain areas (e.g. mining, pharmaceuticals).  Public 
enterprises benefit from the same  tax status as various public sector bodies, which includes the 
income tax exemption and IVA refund provided under various laws.  As from 2007, Ecuador has 
intensified price controls for several sensitive consum er items and public utilities;  implementing this 
policy required the use of subsidies.  Action was taken to improve consumer  protection in several 
areas. 
10. Legislation on the protection of intellectual property rights was reinforced under the 2008 
Constitution and remains subject to substantive reform.  Registration procedures were improved 
through the introduction of electronic processing.  D espite intentions to issue compulsory licences for 
numerous pharmaceuticals and agrichemicals, only one such licence has b een issued so far. WT/TPR/S/254 Trade Policy Review 
Page 36 
  
(2) MEASURES AFFECTING IMPORTS  
(i) Registration and documentation requirements1 
11. All importers must register with Customs (SENAE, previously the CAE), and obtain a 
Taxpayer's Registration Number (RUC) issued  by the Internal Revenue Service (SRI).2  In May 2011 
there were 31,309 importers a nd 3,381 exporters registered with Customs.  SENAE registration 
allows access to the online services provided by the Interactive Foreign Trade System (SICE).  The 
following documentation is required to import pr oducts into Ecuador:  the commercial invoice, 
original or copy of the bill of lading or airway bill, insurance po licy in accordance with the Insurance 
Law, and the Andean value declaration;  a certificat e of origin (to qualify for tariff preferences when 
available), an import licence and/or the INEN-1 certificate (standards compliance) may also be 
required depending on the item.  Since October 2007, registration with the Central Bank has no longer 
been required. 
12. In recent years, Ecuador has actively pursued customs modernization efforts that seemingly 
led to a marked increase in the SENAE's ability to reach its objectives of increased revenue collection 
and reduced clearance times and costs (see below).3  In order to facilitate trade without neglecting 
customs controls, automatic inspection/appraisal , non-intrusive inspection/appraisal and advance 
clearance procedures were implemented to shorte n the time taken to release shipments;  these 
measures are based on import risk management.  As a result, the number of physical inspections dropped to 34.9% (1
st quarter 2011) from more than 70% in the past4;  in 2010, 11.6% of imports were 
subject to automatic inspection, whereby cl earance information is transmitted and checked 
electronically, and 44.8% to physical inspection of import documents only.  Between 2006 and 2010, 
revenues from duty and internal taxes collected  at the border rose from US$2.1 billion to 
US$3.1 billion.5 
13. A new customs facilitation regulation was a dopted as of May 2011 to further simplify 
customs procedures and reduce corruption.6  In September 2010 the authorities decided to implement 
                                                      
1 The customs regime is now based on the Decem ber 2010 Organic Code of  Production, Trade and 
Investment;  it is also governed by a number of decisions adopted by the members of the Andean Community, including customs control, intra-community customs cooperation and information exchange, training for 
customs authorities, and trade facilitation.  The Fo reign Trade and Investment Council (COMEXI) frames 
policy on import and export procedures, "in coordination with the Ministry of Finance and Public Credit".  Implementation of customs policy is the responsibility of the SENAE, which was administered by the Armed 
Forces from 2003 to 2005.  For more information on registration, documentation, and customs clearance 
procedures, see WTO document WT/TPR/S/148/Rev.1, 25 July  2005;  SENAE information online.  Viewed at:  
http://www.aduana.gov.ec/;  and Organic Code  of Production, Trade and Investment, Official Register  No. 351, 
29 December 2010. 
2 SENAE online information, " Procedimientos para importar ".  Viewed at:  
http://www.aduana.gob.ec/contenido/procImportar.html [1 0 November 2010];  and U.S. Commercial Service 
(2010). 
3 World Customs Organization online information, "WCO Support Ecuador Customs in planning for 
implementation of AEO Programme September 2010".  Viewed at:  http://www.wcoomd.org/home_ 
cboverviewboxes_cbnews1_ecuador16072010.htm [10 November 2010];  and WCO (2007). 
4 WTO document WT/TPR/S/148/Rev.1, 25 July 2005;  and U.S. Commercial Service (2010). 
5 SENAE online information, " Estadísticas de Recaudaciones:  Por Distrito ".  Viewed at:  
http://157.100.1 55.211/contenido/sig_cae/esta disticas/estadisticas.asp. 
6 Presidential Decree No. 758, Regulation on the Customs Facilitation Title of Book V of the Code of 
Production, Trade and Investment, 6 May 2011.  Exec utive or Presidential Decr ees may be viewed at 
Information System for Democratic Governance (SIGOB) online information, " Sistema de Información de 
Decretos Presidenciales ".  Viewed at:  http://www .sigob.gov.ec/decretos/. Ecuador WT/TPR/S/254 
 Page 37 
 
 
international agreements, such as the World Customs Organization (WCO) SAFE Framework of 
Standards to secure and facilitate international tr ade, and the Revised Kyoto Convention, parts of 
which were already incorporated into domestic legi slation;  in July 2011 their implementation was 
under consideration.  According to the WCO, in ti me, this will reinforce the administration's capacity 
to support the country's international trad e and socio-economic development objectives. 
14. The development of a new, transparent, effici ent, and paperless customs system is under way 
to ensure customs control and further facilitate tr ade.  SENAE's plans include the establishment of a 
customs system based on the Korean electronic clearance system (UNI-PASS) and, a Single 
Window/one-stop-shop facility (ECUA-PASS).7  This facility is intended to optimize and integrate 
into a single web portal all processes related to th e processing and issuance of control documents;  the 
facility is to be tested by November/December 2011.  In December 2010 a contract for restructuring 
and re-engineering SENAE's computer system was signed with KCingle-CUPIA (Korea Customs);  the authorities expect a drastic reduction in the import/export clearance time as well as significant 
savings for users. 
15. According to SENAE, the average clearance time dropped from 11.9 days (2007) to 6.5 days 
(January 2011).
8  According to the World Bank, in June 2010 Ecuador ra nked 130 (out of 
183 countries) in terms of ease of trading across borders;  its average import and export clearance indicators were close to those of other c ountries in Latin America and the Caribbean.
9  The average 
time to import was 29 days at a cost of US$1,332 per container, and the time to export was 20 days at a cost of US$1,345 per container.
10 
16. Smuggling, which was seemingly fuelled by, inter alia , the rise in indirect tax rates and 
balance-of-payments restrictions (sections (vii)(b ) and (4)(i)(a)), remains a concern.  Reportedly, 
between 2008 and 2009 the number of products that en ter the market without payment of customs 
tariffs and taxes rose;  during this period, as a re sult of intensified and efficient customs action in 
cooperation with the army11, seizure cases increased by 129%.12  In 2010, seizures attained 
US$87.9 million and consisted mainly of illicit drugs, textiles, motor vehicles, and footwear;  there 
have been more than 300 counterfeit-related seizu res involving mainly toys , handbags/wallets, motor 
vehicle accessories, etc., most of  which originated in China. 
17. As of 2008, the import risk analysis/assessment system run by the Customs replaced the PSI 
regime (requirement for pre-shipment inspection certificates, thus eliminating pre-shipment inspection by international verification companies (Bureau Veritas, COTECNA, ITS, and SGS)
13;  at present, 
SENAE commissions part of its physical inspectio n operations to these companies.  Cargoes for 
importers with a good track record and identified as "low-risk" are rarely inspected and are released 
with minimum delays upon arrival in Ecuador. 
                                                      
7 Presidential Decree No. 285, 18 March 2010. 
8 According to the author ities, clearance took an average of 11.6 days in December 2004 (WTO 
document WT/TPR/S/148/Rev.1, 25 July 2005). 
9 World Bank and International Finance Corporation (2010). 
10 World Bank and International Finance Corporation (2010). 
11 Since November 2009 an agreement between SENAE and the Ministry of Defence provides for the 
allocation of financial resources to the army for its support for anti-smuggling operations ( El Universo , "Armada 
se atribuye la captura de contrabando ", 25 June 2010.  Viewed at:  http://www.eluniverso.com/ 
2010/06/25/1/1447/armada-atribuye-captura-contrabando.html?p=1447&m=1704 [10 November 2010]). 
12 El Universo , "Decomiso de cargas por contrabando sube 129% ", 8 October 2009.  Viewed at:  
http://www.eluniverso.com/2009/10/08/1/1356/decomiso-c argas-contrabando-sube.html [10 November 2010];  
and U.S. Commercial  Service (2010). 
13 From January 1998 until 2008, pre-shipment insp ection was mandatory for all goods with a f.o.b. 
value of more than US$4,000, regardless of origin. WT/TPR/S/254 Trade Policy Review 
Page 38 
  
(ii) Customs valuation 
18. No major changes were brought to the regulatory framework during the review period.  
Customs valuation is governed by WTO rules and by Decision 571 of the Commission of the Andean Community and its implementing regulation, set forth in Resolution 846.
14  Upon its accession to the 
WTO, Ecuador availed itself of Article 20.1 of the Agreement on Customs Valuation in order to delay 
implementation of the Agreement for five years from 21 January 1996.15  Ecuador has notified its 
customs valuation legislation to the WTO16, but has not submitted replies to the checklist of issues on 
customs valuation17;  the authorities indicated their intention to meet this requirement. 
19. In accordance with the WTO Cu stoms Valuation Agreement's provisions on special and 
differential treatment, Ecuador decided to delay application of the computed value method until 
21 January 2004 and to adopt reservations on the application of certain disciplines.18 
20. Duties are determined on the basis of their c.i.f.  value using the transaction value method;  the 
authorities indicated that between 2010 and 2011 (A pril) 99.5% of imports were subject to this 
valuation method.  Where this method cannot be  used, Decision 571 lays down five alternative 
methods in the order prescribed by the WTO Ag reement on Customs Valuation.  The authorities 
indicated that the methods are applied in the order set in the Agreement, but Articles 5 and 6 may be 
inversed upon request of the importer and acceptance of the Customs.  Andean Community provisions 
explicitly forbid the use of mini mum prices in assessing customs value.19 
21. Customs clearance and valuation controls are operated only on the basis of declarations 
selected by a risk profiles system.  The authoriti es indicated that their import risk assessment tools 
take into account the provisions of Article 17 of the WTO Agreement on Customs Valuation in 
accordance with Decision 6.1 of the WTO Committee on Customs Valuation.  Ecuador's Value Data 
Base is used for studies or research on valuation-rela ted issues;  the main source of information is 
import price data extracted from the submitted Andean  customs valuation declarations (section (i)).  
Where there is "reasonable doubt" about the declared prices, the importer is informed in writing and given two options.  The first is to accept the SENAE's decision regarding reasonable doubt, in which 
case the importer may clear the goods after payment of the duties due, calculated on the basis of the 
highest reference price in the SENAE database.  Th e second option is to pay the duties on the basis of 
the declared value, and to submit a 30-day guara ntee equal to 120% of the difference between the 
duties calculated on the declared value and those de termined by the customs authorities.  Between 
April 2010 and April 2011, 1.3% of customs declarat ions were subjected to the process of "reasonable 
doubt";  according to the authorities, 40% of th ese cases related to under-invoicing, and their 
non-declared merchandise value was US$5.7 million, equivalent to US$2.3 million of evaded duty 
and internal tax revenue. 
                                                      
14 Andean Community Decision No . 571 of 12 December 2003;  and Andean Community General 
Secretariat, Resolution No. 846 of 6 August 2004. 
15 WTO document WT/Let/72, 11 April 1996. 
16 WTO documents G/VAL/N/1/ECU/1, 28 August 1995;  and G/VAL/N/1/ECU/2 and Rev.1, 
1 March 1996. 
17 WTO document G/VAL/5, 13 October 1995. 
18 WTO document WT/Let/72, 11 April 1996. 
19 Andean Community General Secretar iat Resolution No. 846, Article 45. Ecuador WT/TPR/S/254 
 Page 39 
 
 
(iii) Rules of origin 
22. Ecuador's rules of origin (ROOs) have not cha nged since 2005.  Ecuador applies preferential 
rules of origin within the Andean Community and LAIA (Chapter II(6)(ii)(a) and (b));  no 
non-preferential rules of origin are in place.20 
23. Under the Andean rules of origin regime21, the basic criteria for determining the origin of 
goods incorporating inputs from outside the Andean  Community consist of a change of tariff 
classification (four-digit HS heading) as a result of a production or transformation process, or the regional value content, expressed as a percentage derived from the ratio of the c.i.f. value of 
non-originating materials to the f.o.b. value of the goods for export.  In Ecuador, regional value 
content must be at least 40% of the f.o.b. value of the goods.  Ecuador (and the Plurinational State of 
Bolivia) benefits from special treatment in this ar ea, the regional-content requirement for exports of 
the other members of the Andean Community being 50%. 
24. A limited number of products are subject to  specific origin requirements.  These are 
established by the Andean Community General Secretar iat, on its own initiative or at the request of a 
member country, for "products that so require".
22  They may be less stringent than the basic criteria 
for determining origin.  Specific origin requirement s currently apply on auto motive, chemicals, and 
oilseeds products, among others. 
25. Agreements concluded within LAIA are governed  either by LAIA's general rules of origin23 
or have their own rules.  The general LAIA RO Os follow the same basic pr inciples for determining 
origin as those applied in the Andean Community , the ROOs in Ecuador's LAIA partial-scope 
agreement with Mexico contain some additions. 
(iv) Tariffs 
26. Under the Constitution, authority for amending the rates and nomenclature of tariffs lies 
solely with the Executive, although it has been tran sferred in part to certain bodies of the Andean 
Community.  As a member of the Andean Community , Ecuador is required, in theory, to align any 
changes in its tariff rates and nomenclature with am endments to the common external tariff – in force 
since 1995 – approved by the members of the Andean Community.  In practice, Ecuador and the other 
Community members seem to apply the common external tariff with many exceptions (section (a)). 
27. Ecuador uses the common customs classification system of the Andean Community, 
NANDINA, which has been based on the Harmoni zed Commodity Description and Coding System 
(HS07) since January 2007.24  In May 2011, Ecuador's tariff nomenclature comprised 7,241 ten-digit 
HS07 lines, 295 lines more than in 2005 (Table III.1). 
28. The customs tariff remains a major policy instrument for protection and tax collection 
purposes.  Between 2005 and 2010 revenue from tariffs  declined from 14.6% to 13.3% of total tax 
revenue as a result of increased revenue from income tax (Table III.5).25 
                                                      
20 WTO documents G/RO/N/1, 9 May 1995;  and G/RO/N/12, 1 October 1996. 
21 Andean Community Decisions Nos. 416 and 417 of 30 July 1997. 
22 Andean Community Decision No. 417, Article 1. 
23 LAIA Resolution No. 252, 4 August 1999. 
24 Andean Community Decision No. 653, 15 November 2006, updating the NANDINA nomenclature. 
25 In 2008, the trade-weighted average tariff rate was 8.9% (14.8% for agricultural and 8.3% for 
non-agricultural items) (WTO online information, "Sta tistics database:  Tariff profiles".  Viewed at:  WT/TPR/S/254 Trade Policy Review 
Page 40 
  
Table III.1  
Structure of the MFN tariff, 2005 and 2011  
(%) 
  2005 2011a Final bound 
1. Bound tariff lines (% of all tariff lines) 100.0 100.0 100.0 
2. Simple average applied rate 11.4 9.3 21.0 
 Agricultural products (HS01-24) 16.7 19.6 26.7 
 Industrial products (HS25-97) 10.6 7.6 20.0 
 WTO agricultural products 15.7 17.3 25.6 
 WTO non-agricultural products (excl. petroleum) 10.8 8.2 20.3 
 Textiles and clothing 18.1 14.3 28.4 
3. Domestic tariff "peaks" (% of all tariff lines)b 0.7 10.8 0.2 
4. International tariff "peaks" (% of all tariff lines)c 24.4 24.8 67.3 
5. Overall standard deviati on of tariff lines 7.0 11.0 8.2 
6. Coefficient of variation of tariff lines 0.6 1.2 0.4 
7. Duty-free tariff lines (% of  all tariff lines) 3.2 46.7 0.0 
8. Non- ad valore m tariffs (% of all tariff lines) 0.0 5.0 0.0 
9. Non- ad valorem  with no AVEs (% of all tariff lines) 0.0 5.0 0.0 
10. Nuisance applied rates (% of all tariff lines)d 0.0 0.0 0.0 
a The ad valorem  equivalents (AVEs) were not available from the aut horities, and lack of basic data did not allow the WTO 
Secretariat to calculate them.  Therefore estima tes contained in this table comprise only the ad valorem  component of the 
compound rates. 
b Domestic tariff peaks are defined as those exceed ing three times the overall average applied rate. 
c International tariff peaks are defined as those exceeding 15%. d Nuisance rates are those greater than zero, but less than or equal to 2%. 
Note:   The 2005 tariff is based on HS02 nomenclature, consis ting of 6,949 tariff lines;  the 2011 tariff is based on HS07 nome nclature, 
consisting of 7,241 tariff lines.  Calculations of the final bound tariff are based on 6,843 lines. 
Source:    WTO Secretariat calculati ons, based on data provided by the Ecuadorian authorities. 
29. The last applied customs tariff of Ecuador was submitted to the WTO's Integrated Database 
(IDB) in 2008 (tariff for the year 2007).26 
(a) Structure and level of applied MFN tariffs  
30. Since 2005 the customs tariff has become slightly  more complex through the addition of more 
tariff rates27 and 14-digit tariff lines with multiple rates.28  In July 2011 Ecuador's customs tariff, 
which is based on the Andean Co mmunity's common external tariff29, involved 17 ad valorem  duties, 
                                                                                                                                                                     
http://stat.wto.org/TariffProfile/WSDBTariffPFView.a spx?Language=E&Country=EC).  Between 2006 and 
2010 the average collected tariff, wh ich is the percentage deriving from the tariff revenue/total value of 
imported goods ratio, ranged from 4.2% (2008) to 6.1% (2009). 
26 WTO document G/MA/IDB/2/Rev.31, 27 April 2010. 
27 The 2005 Customs tariff consisted of 13 ad valorem  rates:  zero, 3%, 5%, 10%, 15%, 20%, 35%, 
36%, 38%, 40%, 45%, 72%, and 85.5%. 
28 The Customs tariff contains 171 ten-digit tariff lines  with an additional four digits (i.e. a total of 
14 digits) in order to cover multiple duty rates depending on the detailed product description under the same ten-
digit line (i.e. sub-lines under the same line).  For its  tariff analysis calculations in this report, the WTO 
Secretariat considered these lines as a single line, and used simple averages  of all rates under each line of this 
type. 
29 Ecuador may defer applying the common external tariff to the tariff lines listed in Annexes 2, 3, and 
4 of Andean Community Decision No. 465.  In October 2002, Ecuador and the other members of the Andean 
Community agreed on a common external tariff for 62% of the tariff lines .  However, the entry into force of the 
common external tariff has been post poned repeatedly;  its latest postp onement expires at end 2011 (Andean 
Community Decision No. 717, 8 September 2009). Ecuador WT/TPR/S/254 
 Page 41 
 
 
and 10 compound duties (Table III.1).30  Specific duties on four ten-digit tariff lines (new tyres), 
leftovers from the 2009/10 balance-of-payment measures (section (vii)(b)) were eliminated in early 2011.  Compound duties replaced the ad valorem  rates of 356 ten-digit tariff lines (textiles, clothing, 
footwear, tyres, television monitors, and projectors).
31  In November 2010, certain WTO Members 
requested Ecuador to submit the ad valorem  equivalents (AVEs) of its non- ad valorem  duties, but it 
has not yet done so.32  Tariff dispersion increased substantially, whichever way it is  measured 
(e.g. domestic tariff peaks, standard deviation, and co efficient of variation) (Table III.1).  Some 46.7% 
of tariff lines now carry a zero rate (Table III.1 and Chart III.1), 10.6% are subject to a rate of 20%, 
and 10.5% to a rate of 10%.  In 2011, its 17-tiered ad valorem  rate structure was concentrated into 
7 rates:  zero and 5% for most raw materials a nd capital goods;  10% or 15% for intermediate goods;  
and 20%, 25%, and 30% for most consumer goods.  In 2005, the rates of 5%, 10%, 15%, and 20% were more evenly distributed across tariff lines, a nd few lines were at zero.  As a result, the new 
structure continues to be characterized by increasi ngly pronounced tariff escalation in all branches of 
manufacturing except for non-metallic  mineral products (Chart III.2). 
3.2%35.5%
18.3% 18.5%23.8%
0.0% 0.0%0.7%0.0%46.7%
6.8%11.1%10.6% 10.6%
3.4%10.1%
0.7%0.0%
05001,0001,5002,0002,5003,0003,5004,000
Duty Free >0-5 >5-10 >10-15 >15-20 >20-25 >25-30 >30 emptyChart III.1
Frequency distribution of MFN tariff rates, 2005 and 2011
Number of tariff linesaPer cent
2005 number of lines (% of total)
2011 number of lines (% of total)
The total number of lines is 6,949 for 2005  and 7,244 for 2011.
WTO Secretariat calculations, based on data provided by the Ecuadorian authorities.a
Source : 
 
                                                      
30 According to the Customs tariff supplied by the Ecuadorian authorities for the preparation of this 
TPR, the ad valorem  rates consist of:  zero, 3%, 5%, 7.5%, 10%, 15%, 17%, 20%, 25%, 30%, 31.5%, 35%, 
40%, 45%, 54%, 67.5%, and 85.5%.  The ten compound duties comprise the following rates:  US$140.32 per 
unit plus 5% ad valorem ;  US$158.14 per unit plus 5% ad valorem ;  US$3 per unit plus 10%  ad valorem ;  
US$39.97 per unit plus 5% ad valorem ;  US$0.14 per net weight plus 5% ad valorem ;  US$5.5 per net weight 
depending on the item plus 10%  ad valorem ;  US$6 per unit plus 10%  ad valorem ;  US$73.11 per unit plus 5% 
ad valorem ;  US$0.63 per net weight plus 1% ad valorem ;  and US$0.83 per net weight plus 1% ad valorem . 
31 COMEXI Resolution No. 550, 23 February 2010. 
32 WTO document G/C/W/639, 18 November 2010. WT/TPR/S/254 Trade Policy Review 
Page 42 
  
n.a.n.a.
0510152025
Food,
beverages and
tobaccoTextiles and
leatherWood and
furniturePaper,
printing and
publishingChemicals Non-metallic
mineral
productsBasic metal Fabricated
metal
products and
machineryOtherChart III.2
Tariff escalation, by two-digit ISIC industry, 2005 and 2011
n.a.n.a.
0510152025
Food,
beverages and
tobaccoTextiles and
leatherWood and
furniturePaper,
printing and
publishingChemicals Non-metallic
mineral
productsBasic metal Fabricated
metal
products and
machineryOtherAverage applied rate in manufacturing
(11.5%)
Not applicable.
Calculations exclude AVEs for non- ad valorem rates.
WTO Secretariat calculations, based on data provided by the Ecuadorian authorities.n.a.
Note:
Source :Per cent
First stage of processing Fully processed Semi-processedPer cent
Average applied rate in manufacturing
(9.2%)2005
2011
 Ecuador WT/TPR/S/254 
 Page 43 
 
 
31. During the period under review, Ecuador's simple  average applied MFN tariff rate dropped 
from 11.4% to 9.3% (Table III.1).  According to the authorities, in 2007 and 2008 Ecuador reduced 
tariffs on 3,267 tariff lines and increased them on 1,612 lines.  Product categories that benefited from 
the tariff reductions included industrial capital goods, raw materials, and transport equipment.33  Most 
tariff increases were on durable and non-durable  consumer goods and included 940 products 
(e.g. foodstuffs, household and consumer appliances,  paper products, and construction materials) for 
which Ecuador raised the tariff to its WTO bound ra te (section (b)).  From January 2011, tariffs on 
motor vehicles, including hybrid cars, with engine sizes up to 3,000cc were increased by 5 percentage 
points (from 35% to 40%);  this increase was estima ted to affect around 67% of imported cars and 
raise sale prices by US$300-500 depending on the model.34  Agriculture continues to receive much 
higher tariff protection than non-agricultural product s;  the simple average applied MFN rate for 
agricultural products (WTO definition) in 2011 incr eased from 15.7% to 17.3% while the rate for 
non-agricultural products fell from 10.8% to 8.2% (Table III.1).  Peak ad valorem  rates remain 
unchanged since 2005, and affect meat offal (85.5%),  rice (67.5%), and milk and milk cream (54%). 
32. Variable import levies, affecting imports of cer tain agricultural items originating in countries 
outside the Andean Group, continue to be used under the Andean Price Band System, adopted in 
November 1994;  these levies vary inversely with in ternational prices.  In June 2011, the Andean 
Price Band system covered 13 "marker" products w hose international prices constitute the basis for 
the calculation of the price bands, and 156 derivativ es or substitutes of the "markers" (corresponding 
to about 2% of all tariff lines).  Levies are expressed in the form of additional ad valorem rates and, in 
certain cases, tariff cuts  or suspensions are foreseen.  Ac cording to Andean Group Decision 371, 
Members may adjust the levies whenever there are "s pecial" distortions in world prices of associated 
products.  In total, the levies, including any adjustment, may not exceed Uruguay Round bindings.  
Transparency has been ensured by the JUNAC, a sub-regional institution, which monitors and 
communicates price adjustments.  Information is available online35, and importers can calculate the 
total tariff due for their shipment 15 days in adva nce.  Moreover, amendments to the Andean Price 
Band System can be agreed only at sub-regional leve l.  The Andean Price Band System was discussed 
in the WTO Working Group for the Accession of Ecua dor;  Ecuador undertook to gradually eliminate 
the price band system within a seven-year period in accordance with the timetable annexed to its 
Protocol of Accession (i.e. starting in January 1996, with a total phase out by December 2001).36  In 
2006, following Colombia's and Peru's free-trade ag reement undertaking not to apply the system on 
agricultural goods originating in the United States, th e continuity of the Andean Price Band System 
was questioned at the Andean Community level.37 
                                                      
33 COMEXI online information, " Reforma Arancelaria:  Arancel Nacional Integrado ".  Viewed at:  
http://comexi.gob.ec/reforma_arancelaria.shtml;  and " Cuadro Reformas Arancelarias " .   V i e w e d  a t :   
http://comexi.gob.ec/docs/reforma s1.pdf. [4 January 2011]. 
34 El Universo , "El incremento de arancel del 5% se extiende a casi todos los vehículos ", 
23 December 2010.  Viewed at:  h ttp://www.eluniverso.com/ 2010/12/23/1/1356/incremen to-arancel-5-extiende-
casi-todos-vehiculos.html [8 June 2011]. 
35 CAN online information, " Desarrollo Productivo y Comercial:  Franja de Precios ".  Viewed at:  
http//www.comunidadandina.org/politicas/franja.htm. 
36 The authorities consider that Ecuador did not undertake to dismantle the Andean system of price 
bands at the time of its WTO accession.  They are of th e view that this commitment referred to their national 
tariff adjustment mechanism, which was dismantled in 1996.  They indicated that other trading blocks (e.g. MERCOSUR and the EU) recognize the validity of Ecuador's commitment in the context of the Andean 
Community.  This issue has also been explained by Ecua dor on several occasions, including at its first Trade 
Policy Review, in the General Council, and other levels of the WTO (WTO document WT/L/77, 14 July 1995). 
37 Andean Community (2006). WT/TPR/S/254 Trade Policy Review 
Page 44 
  
(b) Tariff bindings 
33. All tariff lines have been bound since Ecuador's accession to the WTO.  Approximately 98% 
of the tariff lines are bound at rates of 30% or less.  Duties on agricultural products (WTO definition) are bound at rates ranging from 5% to 85.5%;  the lowest bound rates on agricultural items mostly 
pertain to seeds and cereals, and the highest to cuts  and offals of certain types of poultry.  Duties on 
non-agricultural products are bound at levels ranging from 5% to 40%;  the lowest apply mainly to 
chemicals, pharmaceuticals, and fertilizers, and th e highest to motor vehicles.  Ecuador's average 
bound rate currently exceeds average applied MFN rat es by nearly 12 percentage points (Chart III.3);  
maximum gaps of up to 16-17 percentage points affect grains, dairy products and oil seeds.  
Differences between bound and applied rates provided scope to raise applied tariffs, especially in 
sensitive sectors (section (a)). 
0.05.010.015.020.025.030.035.0
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
Calculations exclude AVEs.  
WTO Secretariat calculations, based on data provided by the Ecuadorian authorities.Per centChart III.3                       
Average applied MFN and bound tariff rates, by HS section, 2005 and 2011
Note:
Source :01   Live animals & products        
02   Vegetable products
03   Fats & oils      
04   Prepared food, etc.
05   Mineral products06   Chemicals & products07   Plastic & rubber
08   Hides & skins
09   Wood & articles
10   Pulp, paper, etc.
11   Textiles & articles12   Footwear, headgear13   Articles of stones
14   Precious stones, etc.
15   Base metals and products
16   Machinery
17   Transport equipment18   Precision instrument19   Arms & ammunition
20   Miscellaneous manuf.
21   Works of art, etc.Average applied rate 2005  
(11.4%)
Average applied rate 2011
(9.3%)Average bound rate
(21.0%)MFN 2005
MFN 2011 
Bound
 
34. In 2011, of the tariff lines in Ecuador's Sche dule of Concessions CXXXIII that are strictly 
comparable to HS0238, applied MFN rates on 19  ten-digit lines (four in 2005)39, involving meat offal, 
chemicals, paper products, ceramics and motor vehicles, exceeded the bound rates by 5 to 
15 percentage points (Table III.2);  the authorities indicated that this is to be corrected upon 
completion of the HS02 transposition of Ecuador's binding commitments (see below), hopefully in the 
course of 2011.  Furthermore, the introduction of MFN compound duties (section (a)) on 356 items bound on an ad valorem  basis, and the non-submission of thei r AVEs, casts doubts on whether these 
                                                      
38 In 2011, 6,151 (about 85% of the HS07 tariff lines) were comparable. 
39 In 2005, these included live bovine animals, finish ing agents/dye carriers, an d motor vehicles for the 
transport of ten or more persons (WTO docu ment WT/TPR/S/148/Rev.1, 25 July 2005). Ecuador WT/TPR/S/254 
 Page 45 
 
 
applied rates are within their binding levels.  For 1,212 tariff lines (585 in 2005), the applied rates are 
the same as the bound rates. 
Table III.2 
Products for which applied MFN ta riff rates exceed their bound ratesa, 2011  
HS07 code 
item Product description HS02 code 
item MFN rate 
(%) Bound rate 
(%) Percentage 
points 
difference 
Products where the applied MFN duty is higher than the final bound duty    
0208.90.00.00 Other meat and edib le meat offal, fresh, chilled or frozen 0208.90.00 30 20 10 
3825.10.00.00 Residual products of the chemical industries;  municipal 
waste 3825.10.00 15 10 5 
3825.20.00.00 Residual products of the chemical industries;  sewage sludge 3825.20.00 15 10 5 
3825.30.00.00 Residual products of the chemical in dustries;  clinical waste 3825.30.00 15 10 5 
3825.41.00.00 Residual products of the chemical industries;  halogenated 3825.41.00 15 10 5 
3825.49.00.00 Other residual products of th e chemical industries 3825.49.00 15 10 5 
3825.50.00.00 Residual products of the chem ical industries;  wastes of metal 
pickling liquors, hydraulic fluids, brake fluids and anti-freeze 
fluids 3825.50.00 15 10 5 
3825.61.00.00 Residual products of the chemical industries, mainly 
containing organic constituents 3825.61.00 15 10 5 
3825.69.00.90 Other residual products of th e chemical industries 3825.69.00 15 10 5 
3825.90.00.00 Other residual products of th e chemical industries 3825.90.00 15 10 5 
4805.11.00.00 Semi-chemical fluting paper 4805.11.00 15 10 5 
4805.12.00.00 Straw fluting paper 4805.12.00 15 10 5 
4805.19.00.00 Other uncoated paper a nd paperboard 4805.19.00 15 10 5 
6906.00.00.00 Ceramic pipes, conduits, gutte ring and pipe fittings 6906.00.00 30 25 5 
7305.19.00.00 Other tubes and pipes (e .g. welded, riveted or similarly 
closed), having circular cross-sections, the external diameter 
of which exceeds 406.4 mm, of iron or steel 7305.19.00 20 15 5 
7308.90.90.00 Other structures (excl. prefabricated buildings of 
heading 94.06) and parts of structures. 7308.90.90 20 15 5 
8702.10.10.90 Motor vehicles for the transport of ten or more persons, 
including the driver, with internal combustion piston engine 
(diesel or semi-diesel) 8702.10.10 35 20 15 
8702.90.91.90 Other motor vehicles for the transport of ten or more persons, 
including the driver 8702.90.91 35 20 15 
9306.30.90.00 Other cartridges and parts thereof 9306.30.90 30 25 5 
Average percentage points difference    6.3 
a  Estimates based on lines that are strictly comparable be tween the HS07 classification (applied MFN customs tariffs) and the 
HS02 classification (bound tariffs). 
Source:    WTO Secretariat estimates, based on data  provided by the Ecuadorian authorities. 
35. Ecuador's Schedule of Concessions, originally  at HS92, has been transposed to the 
Harmonized Commodity Description and Coding System 2002.  The HS02 transposed Schedule was last examined at a multilateral review meeti ng on 2 December 2010, and in May 2011 the WTO 
Committee on Market Access was looking at how to finalize it.
40  In July 2011 the approval of one 
major trading partner was the only element missing to  conclude this transposition exercise.  Ecuador 
has not requested to be covered by waivers fro m Article II of GATT 1994 to implement domestically 
the HS2002 and HS2007 changes to its schedule of binding commitments. 
                                                      
40 WTO document G/MA/M/53, 7 June 2011. WT/TPR/S/254 Trade Policy Review 
Page 46 
  
(c) Tariff-rate quotas 
36. Under its commitment on minimum access opportunities contained in the WTO Agreement 
on Agriculture, Ecuador maintains, but does not use,  tariff-rate quotas (TRQs) in respect of 17 four-, 
six- or eight-digit lines involving turkeys, chicken cuts, wheat, barley, maize, sorghum, malt, starch, 
soybean oilcake, rapeseed oilcake, milk powder,  and glucose (Chapter IV(2)(iii)).  All products 
subject to TRQs are covered by the Andean Pri ce Band System.  In-quota rates range from 19% to 
45% while out-of-quota rates vary from zero to 85. 5% (Table AIII.1).  The legislation does not 
specify criteria for assigning quotas.  According to the authorities, these are generally allocated to 
importers on the basis of their historical consum ption, pursuant to an inter-ministerial agreement 
based on a recommendation from the Tariff Quota Comm ittee (Chapter IV(2)(iii)).  Tariff-rate quotas 
must be applied in conjunction with  a national output absorption requirement (Chapter IV(2)(iv));  in 
such cases, only importers that have purchased a portion of national output receive authorization to import the product under the tariff quota.  Tariff-ra te quotas were not utilized between 2006 and 2010 
as most applied MFN tariffs were lower than thei r in-quota rates, and increases in world prices 
reduced the import competitiveness of the products concerned.
41 
(d) Tariff preferences 
37. Ecuador grants duty-free treatment on all im ports from the Plurilateral State of Bolivia, 
Colombia, and Peru, provided that they comply w ith the Andean Community's origin requirements 
(section (iii)) similar treatment is provided on impor ts from the Bolivarian Republic of Venezuela.  
Ecuador also grants preferential treatment on imports from countries with which it has LAIA 
agreements (Table AIII.2 and Chapter II(6)(ii)(b)). 
(e) Tariff concession schemes 
38. In addition to the drawback, maquila , free-zone, and special economic development zone 
regimes (section (3)(iv)), Ecuador maintains a numbe r of special customs regimes that suspend the 
payment of duties and other taxes levied on im ports of goods, under certain conditions.  These 
regimes involve:  temporary importa tion with re-exportation in the same  state;  temporary importation 
for inward processing;  temporary customs storage;   duty-free replacement of previously imported 
goods for transformation or use for the production or  packaging of goods for export;  and certain 
goods for international trade fairs.42  Between 2006 and 2009, total customs tariff and internal tax 
revenue forgone under these regimes attained US$1.6 billion (an annual average of US$393.6 million). 
(v) Other charges affecting imports 
39. Imports remain subject to certain customs char ges, a so-called "redeemable quota" (until end 
2010), a contribution to the Children's Development Fund, and a tax on foreign exchange flight, in 
addition to customs tariffs and internal taxes, such as the value added tax (IVA) and the special 
consumption tax (ICE) (section (4)(i)(a)).  Domes tic products are not subject to the "redeemable 
quota" or the contribution to the Children's Development Fund. 
(a) Customs charges 
40. Ecuador applies a number of charges for customs services, including storage.  A laboratory 
analysis charge applies when the customs authority deems that goods need to be analysed in order to 
                                                      
41 WTO documents G/AG/N/ECU/24, 8 February 2010, and G/AG/N/ECU/26, 27 May 2011. 
42 For more details about these schemes, see WT O document WT/TPR/S/148/Rev.1, 25 July 2005. Ecuador WT/TPR/S/254 
 Page 47 
 
 
establish their tariff classification.   Clearance of goods under the speci al customs regimes (other than 
the industrial customs storage regime) is subject to a customs control charge. 
(b) Redeemable quota 
41. The redeemable quota requirement was eliminated on 31 December 2010.43  The redeemable 
quota was a compulsory deposit/contribution proporti onate to the import (export) value affecting 
goods from outside the Andean Community.  Accord ing to the Andean Court of Justice, the 
redeemable quota constituted a charge, and amounted  to a breach of obligations under the Andean 
legal system.44  The amount of the quota was equal to 0.025% of the f.o.b. value of the imports, but 
not less than US$5 per consignment.45  Once they had accumulated US$500 in paid-up redeemable 
quotas, importers obtained a certificate made out in that amount from the Export and Investment 
Promotion Corporation (CORPEI).  The certificates c ould be cashed in for their nominal value after 
10 to 30 years or earlier for a lesser amount.  The proceeds from the investment of redeemable quotas were used to partly finance CORPEI's activities (section (3)(v)).
46  Between 2005 and 2010, revenue 
from redeemable quotas on imports  and exports totalled US$41.5  million. 
(c) Contribution to the Children's Development Fund 
42. The contribution to the Children's Development Fund (FODINFA) remains  equal to 0.5% of 
the c.i.f. value of imports, regardless of their origin.47  Inputs for pharmaceuticals for human and 
veterinary use are exempt.  Annual revenue from c ontributions to the Children's Development Fund 
rose from US$50.9 million (2005) to US$91.4  million (2010). 
(d) Foreign exchange flight tax 
43. Since January 2008 a tax on foreign exchange fli ght has applied on all transfers abroad, at a 
rate of 1%, increased to 2% as of January 2010;  this rate is charged on the c.i.f. value of imports plus 
their customs-valuation-related adjustments.48  The authorities indicated that this general tax, 
equivalent to 4.9% of total tax revenue in 2010 (Table III.5), is in  line with their WTO obligations. 
(vi) Import prohibitions, restrictions, and licensing 
(a) Prohibitions 
44. Ecuador continues to prohibit certain imports, os tensibly for health, safety, and environmental 
protection purposes.49  The banned products (130 ten-digit ite ms) include several chemicals;  used 
clothing and footwear (HS 6309);  used tyres (HS 4012);  certain types of used vehicles and used parts thereof (HS Chapter 87);  certain types of used  engines (HS 8407 and 8408);  used automotive parts 
(heading HS 8409), except for certain re-manufactured parts;  and cooling, refrigerating, and freezing 
equipment using CFCs.  All these import prohibitions apply regardless of the origin of the goods.  
                                                      
43 Organic Code of Production, Trade and Investment, Official Register No. 351, 29 December 2010. 
44 The authorities indicated that Ecuador's Constitutional Court made the opposite ruling (Andean 
Community Resolution 179, 14 January 1999;  Acción de Incumplimiento  19-AI-99, 2 June 2000). 
45 Foreign Trade and Investment Law, Article 22. 
46 Foreign Trade and Investment Law, Article 22. 
47 Law No. 4, Official Register No. 122, 3 February 1997. 
48 SENAE online information, " Procedimientos para Importar ".  Viewed at:  
http://www.aduana.gov.ec/contenido/procImportar.html. 
49 COMEXI Resolution No. 450, 29 October 2008, and amendments contained in COMEXI 
Resolutions Nos. 465, 486, 491, 493, 496, 520, 528 , 553, 554, and 563 (COMEXI online information, 
"Resoluciones ".  Viewed at:  http://comexi.gob.ec/resoluciones.shtml). WT/TPR/S/254 Trade Policy Review 
Page 48 
  
Table salt imports were prohibited during 2005-09;   this prohibition, which affected mainly 
Colombian exports and was dealt with at the Andean  Community level, was replaced by a register of 
salt importers, import control, technical norms, and mandatory physical inspection requirements.50 
(b) Restrictions and licensing 
45. Under Ecuador's import licensing regime, pr ior import control, permit, licence or 
authorization is required for 1,364 ten-digit tariff items (2,260 including SPS requirements) 
(Chart III.4 and Table AIII.3).51  The licensing regime enforces compliance with provisions of various 
laws so that:  certain products carry no risk to hum an, animal, and plant life and health;  narcotics and 
psychotropic substances are used for lawful purpo ses;  arms and explosives for civilian use do not 
become a threat to peace and public safety;  vehicl es are not so heavy as to damage public highways;  
electrical plants are compatible with the nati onal grid;  and telecommunication equipment is 
compatible with the telecommunication networks .  The authorities indicated that the same 
requirements apply to domestically produced goods. 
46. Licensing applies to imports of all origins, excep t for certain agricultural items originating in 
Andean Community countries.  No licence is requi red for imports entering under a special customs 
regime (sections (iv)(e), and (3)(iv)(b) and (c)),  except in the case of hazardous wastes, agricultural 
products, and narcotics and psychotropic substances.   Import licences are approved by various bodies, 
depending on the product and its use (Table AIII.3).  Importers carry out licencing procedures directly 
with the relevant administrative bodies;  licences ar e verified later by SENAE.  The authorities expect 
import licensing procedures to be streamlined by December 2012 when the Single Window/one-stop 
shop facility (section (i)), a mechanism connecting elect ronically all institutions in charge of foreign 
trade operations, becomes operational.52 
47. Ecuador's notifications of its import licensing regime have been limited during the review 
period.  Since its accession, Ecuador has provi ded replies to the WTO Questionnaire on Import 
Licensing Procedures, a once every two years notification requirement, only in the years 2009 and 2010;  these replies cover only part of Ecuador's import licensing regime.
53  The authorities indicated 
that a notification has been under preparation, si nce the last quarter of 2010, with the technical 
support of the WTO Secretariat. 
 
                                                      
50 Court of Justice of the Andean Community Proceso  05-AI-2007;  COMEXI Resolution No. 532, 
15 December 2009;  and COMEXI Re solution No. 540, 11 January 2010. 
51 COMEXI Resolution No. 450, 29 October 2008, and amendments contained in COMEXI 
Resolutions Nos. 465, 486, 491, 493, 496, 520, 528 , 553, 554, and 563 (COMEXI online information, 
"Resoluciones ".  Viewed at:  http://comexi.gob.ec/resoluciones.shtml). 
52 Presidential Decree 285, 18 Ma rch 2010.  Executive or Presiden tial Decrees may be viewed at 
SIGOB online information, " Sistema de Información de Decretos Presidenciales " .   V i e w e d  a t :   
http://www.sigob.gov.ec/decretos/. 
53 WTO documents G/LIC/N/3/ECU/3, 12 October 2009;  and G/LIC/N/3/ECU/3/Add.1, 
19 April 2010. Ecuador WT/TPR/S/254 
 Page 49 
 
 
Chart III.4
Imports controls, 2011
(a)  By type of requirement
(b)  By product subject to import licensingImport 
authorization
5.8%Import licence
4.2%
Import permit
6.1%
Importer 
registration
44.5%Product registration
1.9%Product and
sanitary registration
3.1%
Sanitary registration
16.0%
SPS permit
18.4%
Inorganic 
chemicals
8.3%
Organic 
chemicals
18.8%Optical, 
photographic 
instruments
9.4%
Nuclear reactors, 
boilers
37.5%Misc. chemical 
products
17.7%Others
8.3%
 WT/TPR/S/254 Trade Policy Review 
Page 50 
  
Chart III.4 (end)
Source: Information provided by the Ecuadorian authorities.Mineral fuels 
& oils
1.8%
Arms & 
ammunition
30.5%Inorganic chemicals
7.2%
Organic chemicals
50.2%
Tanning extracts
1.3%Explosives
5.8%Others
1.8%(c)  By product subject to import authorization and import permit
Misc. chemical 
products
1.3%
 
(vii) Contingency measures 
(a) Anti-dumping and countervailing 
48. The legal framework governing anti-dumping a nd countervailing measur es consists of the 
relevant provisions of the WTO, the 2010 Organic Code of Production, Trade and Investment, the 
Regulation Implementing Part IV of the 2010 Organic Code54, and Andean Community Decisions 
Nos. 283, 456, and 457.  COMEX is empowered with administering anti-dumping and countervailing 
duties.  As from mid-2011 the Ministry of Foreign Affairs, Trade, and Integration has been responsible for conducting investigations.
55  The Andean Community General Secretariat conducts 
investigations on dumped or subsidized imports within the Andean Community legal framework, 
which covers imports both from member countries of the Andean Community and from non-member 
countries.56 
                                                      
54 Presidential Decree No. 733, Regulations implementing Book IV of the Code of Production, Trade 
and Investment, on matters of trade policy, control bodies and instruments, 11 April 2011;  the relevant sections 
of the Decree were notified to the WTO (G/A DP/N/1/ECU/3-G/SCM/N/1/E CU/3-G/SG/N/1/ECU/5, 
24 May 2011). 
55 Article 53 of the Presidential Decree No. 733.  The authorities indicated that the staff of a new 
Directorate of Trade Defence, of the Ministry of Foreign Affairs, Trade and Integration, is receiving specialized 
training by the WTO Secretariat (since 2010) and other entities from the region. 
56 In the case of non-member countries, the Andean Community rules cover only imports affecting a 
member country's production destined for export to another member country, and imports affecting the Ecuador WT/TPR/S/254 
 Page 51 
 
 
49. Since its previous TPR, Ecuador has not con ducted any investigations, or adopted or 
maintained any anti-dumping or c ountervailing measures, other than an anti-dumping investigation on 
imports of bi-axially-oriented polypro pylene film from Chile and Oman.57  Its latest semi-annual 
report on anti-dumping is dated Ma rch 2011 (previous reports was in 2000), and notifications to the 
WTO Committee on Subsidies and Counterva iling Measures indicate no countervailing action.58 
(b) Safeguard measures 
50. Ecuador's legal framework for safeguards now comprises the relevant provisions of the 
2010 Organic Code of Production, Trade and Investme nt, the Regulation Implementing Part IV of the 
2010 Organic Code (containing the relevant WTO provis ions), as well as Chapter XI of the Cartagena 
Agreement and Andean Community Decision 452.59  The Ministry of Foreign Affairs, Trade and 
Integration is now responsible for conducting safeguards investiga tions, and COMEX is entrusted 
with applying safeguard measures.  In approving application of a safeguard, COMEX must assess the 
measure in terms of "public interest".60 
51. During the review period, Ecuador initiated i nvestigations on imports of taps, cocks and 
valves for domestic use, textile products, ceramic products, tableware and k itchenware from China, 
and windshields.61  In September 2010, safeguard measures were adopted for a three-year period 
against imports of windshields (NANDINA item 7007. 21.00.00) in the form of a specific duty of 
US$12.72 per windshield in addition to the ad valorem  duty in force;  this measure, which was 
notified to the WTO, applies to all windshield im ports except those originating in developing 
countries (e.g. Chile and Peru) other than Colombia.62  At the Andean Community level, safeguards 
against imports of turkeys were implemented in  2010;  in May 2011 safeguards against imports of 
onions were awaiting the approval of the General Secretariat. 
                                                                                                                                                                     
production of several member countries that require remedial measures to be applied in more than one member 
country. 
57 WTO documents WT/TPR/OV/13, 24 November 2010;  and G/ADP/N/209/ECU, 4 March 2011.   
58 WTO documents G/ADP/N/59/ECU, 13 April 2000;  G/ADP/N/209/ECU, 4 March 2011;  and 
G/SCM/N/212/Add.1,  20 October 2010. 
59 Executive Decree No. 3497 stipulates that any safeguard measure imposed on a product will apply 
"regardless of the provenance" of the product.  Safeguard measures may take the form of ad valorem  or specific 
duties, or quantitative restrictions, alt hough a preference is expr essed for the former.  In the Andean Community 
system, Decision No. 452 allows safeguards to be applied to imports from outside the Community where the domestic industry of two or more members is affect ed.  The Andean Community General Secretariat is 
responsible for conducting safeguards investigations.  Furthermore, under Chapter XI of the Cartagena 
Agreement, a member countr y of the Andean Community may apply safeguard measures to imports from other 
member countries in order to rectify any balance-of-pay ments disequilibrium;  in the framework of the Andean 
Trade Liberalization Programme, in the ev ent of currency devaluation;  or when there is evidence of disruption 
of domestic production.  The Ca rtagena Agreement also allows A ndean Community Members to apply 
safeguards to certain agricultural products, listed in Decision No. 474.  For more details about legislation in this 
area, see WTO document WT/TPR/S/148/Rev.1, 25 July 2005. 
60 Executive Decree No. 3497, Article 327. 
61 WTO documents G/SG/N/16/ECU/2, 10 March 2006;  G/SG/N/16/ECU/1, 10 March 2006;  
G/SG/N/16/ECU/1/Suppl.1, 8 January 2008;  G/SG/N/16/ECU/3, 7 April 2008;  G/SG/N/16/ECU/4, 8 April 2008;  G/SG/N/16/ECU/4/Suppl.1, 9 Januar y 2009;  G/SG/N/6/ECU/8, 26 April 2010;  and 
G/SG/N/8/ECU/3/Suppl.1, G/SG/N/10/ECU/4/Suppl .1, and G/SG/N/11/ECU/1, 27 October 2010. 
62 COMEXI Resolution No. 587, 23 September 2010 (COMEXI online information, " Resoluciones ".  
Viewed at:  http://comexi.gob.ec/ reso_docs/resolucion587.pdf). WT/TPR/S/254 Trade Policy Review 
Page 52 
  
52. Ecuador has reserved the right to impose add itional duties on seven eight-digit tariff lines 
under the special safeguard provisions of the WTO Agreement on Agriculture.63  According to its 
notifications and to the authorities, it did not use any special safeguard provisions during the review 
period and does not intend to do so in the course of 2011.64 
53. In line with the relevant domestic legislati on, and WTO and Andean Community provisions, 
between January 2009 and 23 July 2010 Ecuador a pplied safeguard measures for balance-of-payments 
purposes in the form of quantitative restrictions and tariff surcharges on a large number of products, 
resulting in tariffs in excess of their bound rates.65  The authorities confirmed that all these measures 
were eliminated as scheduled.66 
(viii) Standards and technical regulations 
(a) Standards 
54. A new Ecuadorian Quality Control System La w No. 2007-76 was passed in 2007, bringing 
regulatory and institutional changes (see below);  the 2007 institutional changes were suspended by 
the 2010 Organic Code of Production, Trade and I nvestment, and in May 2011 the establishment of a 
new institutional framework depended on the revision of the regulation on institutional competences.  
The main instruments governing standardization, metr ology, certification, and verification consist of 
domestic legislation, which includes the relevant  provisions of the WTO Agreement on Technical 
Barriers to Trade, and various rules approved by  the member countries of the Andean Community.67  
Following concerns expressed by certain WTO Members at the March 2009 meeting of the Committee on Technical Barriers to Trade, Ecuador  provided explanations on the operation of new 
mandatory conformity-assessment requirements cons isting of test reports and certificates of 
conformity for industrial products including tyres, steel products, and automobile components;  these 
requirements were implemented unde r various articles of the Ecuador ian Quality Control System Law 
(No. 2007-76).
68  Ecuador indicated that this new conformity-assessment mechanism was to ensure 
that domestic as well as imported products were comp lying with the quality and safety requirements 
established by domestic legislation. 
                                                      
63 Schedule CXXXIII, Part I, Section I-A, contained in WTO documents WT/L/77/Add.1, 
20 July 1995;  WT/L/77/Add.1/Corr.1, 2 August 1995;  and WT/L/77/Add.1/Corr.2, 8 August 1995. 
64 WTO documents G/AG/N/ECU/22, 8 February 2010;  and G/AG/N/ECU/27, 27 May 2011. 
65 In response to concerns raised during meetings of the WTO Committee on Balance-of-Payment 
Restrictions, Ecuador agreed to replace most of the quan titative restrictions with pr ice-based measures and to 
progressively modify the level and scope of the measures as its balance-of-payments (BOP) situation improved.  
Ecuador committed initially to remove all trade measures imposed for BOP purposes no later than 
22 January 2010.  In line with thes e commitments, the authorities repl aced most, but not all, quantitative 
restrictions with price-based measures in June 2009.  COMEXI Resolution No. 487 replaced quantitative 
restrictions on 251 out of a total of 271 tariff lines.  Of the 251 products, 234 were subject to a 12% tariff 
surcharge in addition to the pre-"safeguard" tariff le vel;  the remaining 17 items under quota included:  
10 automotive products (parts of car assembly kits), with a 3% tariff surcharge;  apples, grapes, and pears, with 
a 10 cents/kg specific tariff;  and four tariff lines for tyres, which were subject to an 80 cents/kg specific tariff.  
On 11 February 2010, Ecuador issued a resolution to phase-out the measures by 23 July 2010 (WTO document 
WT/BOP/N/77, 27 July 2010 containing COMEXI Resolution No. 580, 22 July 2010). 
66 WTO document WT/BOP/W/35, 13 October 2010. 
67 For more details about legislation and instituti onal arrangements in this area, see WTO documents 
WT/TPR/S/148/Rev.1, 25 July 2005;  and G/TBT/2/Add.101, 22 June 2009. 
68 WTO documents G/TBT/W/308, 23 April 2009;  G/TBT/M/47,  5 June 2009;  and 
G/TBT/2/Add.101, 22 June 2009. Ecuador WT/TPR/S/254 
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55. As from May 2011 the Interministerial Comm ittee on Quality under MIPRO chairmanship, 
and technical support (Under-Secretariat on Quality),  coordinates and form ulates Ecuador's quality 
policies on standardization, metrol ogy, certification, and verification.69  Between 2007 and 2010 the 
National Quality Council (CONCAL) was the high est body of the Ecuadorian quality system.70  The 
Inter-ministerial Committee on Quality coordinates the activities of:  the Ecuadorian Institute of 
Standardization (INEN), which is responsible fo r regulation, standardization, and metrology 
activities71;  and the Ecuadorian Accreditation Agency (OAE), a MIPRO body that carries out 
accreditation activities in accordance wi th international guidelines.  Th e INEN has three laboratories, 
one for metrology and the others for chemistry, food analysis, and microbiology.  In May 2011, the 
Ecuadorian Accreditation Agency was processing accred itation applications from eight analysis and 
calibration laboratories.  Of the 70 laboratories accredited, 46  are private and 24  belong to the State.  
There are 12 certifying bodies and 4 inspection organizations. 
56. At the beginning of 2011, there were 530 (640 in  2004) mandatory and 1,906 (1,554 in 2004) 
voluntary "Ecuadorian technical standards" in force.  Of the mandatory standards, one third continues 
to belong to the food technology category (ICS 67).72  Chemical technology (ICS 71) accounts for 
7.2% (some 7% in 2004) of these standards;  a nd metallurgy (ICS 77) and petroleum (ICS 75) about 
10.6% (6% each in 2004);  and 51% (slightly over 40% in 2004) of voluntary Ecuadorian technical 
standards belong to the food technology (ICS 67), construction materials and building (ICS 91), and 
mechanical systems and components for general use (ICS 21) categories. 
57. Temporary Ecuadorian technical regulations ma y be formulated and approved in cases of 
emergency without prior public consultation.73  During the review period three emergency regulations 
were adopted and notified to the WTO;  they affect ed fire extinguishers, vehicles equipped with liquid 
petrol gas (LPG) engines, and fluorescent light bulbs. 
58. In January 2011, 3.6% of national standards were  identical to international standards and 30% 
were modified adoptions.  Interna tional equivalence remains high in, inter alia , conformity 
assessment, management systems and environmental quality, child care, toys, information technology, 
food safety, social responsibility, information and documentation, lamps, lighters, samples, motor 
vehicles, and clinical laboratories.  More than 42 product categories including cement, petrol, matches, break fluids, sanitary tubes, tyres, car  windshields, security glass, steel frames, household 
appliances, electricity transformers, spark plugs , incandescent light bulbs, and motor vehicles are 
subject to national INEN standards for health, safet y, and environmental protection purposes;  these 
standards are contained at the List of Goods Subject to Control.
74 
59. The use of quality management system standards such as ISO 9001 and ISO 14001 seems to 
be increasing.  In May 2011, there were 580 companies certified to ISO 9001. 
                                                      
69 Presidential Decree No. 756, General Regulation on the Law on the Ecuadorian Quality System, 
6 May 2011.  Executive or Pres idential Decrees may be viewed at SIGOB online information, " Sistema de 
Información de Decretos Presidenciales ".  Viewed at:  http:// www.sigob.gov.ec/decretos/. 
70 Ecuadorian Quality Control System Law No. 2007-76, published on 22 February 2007. 
71 The INEN is a member of the International Organization for Standardization and the Pan-American 
Commission for Technical Standards, an associate memb er of the Inter-American  Accreditation Cooperation 
and the General Conference on Weights and Measures, a corresponding member of the International 
Organization of Legal Metrology, and the contact point for the CODEX Alimentarius Commission.  The 
Ecuadorian Accreditation Agency is an affiliate of th e International Laboratories Accreditation Cooperation. 
72 ICS = International Cla ssification for Standards. 
73 Decree No. 3497, Articles 209-211. 
74 Its latest version is contained in CONCAL Resolution 09-2009, Official Register  Supplement 
No. 563, 3 April 2009. WT/TPR/S/254 Trade Policy Review 
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60. Several items are subject to prior import author ization in order to ensure compliance with 
technical standards and sanitary and phytosanitary  (SPS) requirements (section (vi)(b)).  Physical 
inspection is carried out at the border to determin e the conformity of impor ted products with national 
INEN technical standards (see above).  The INEN  may carry out conformity checks on products 
(domestic as well as imported) that are subject to  mandatory Ecuadorian technical standards at the 
marketing stage, either on its own initia tive or following consumer complaints.  No data on standards 
enforcement (i.e. cases of non-compliance, products co ncerned) were available from the authorities. 
61. A Certificate of Recognition (Form INEN 1), issued by the INEN, is required for imports of 
products subject to prior control or authorization.75  To obtain the INEN-1, importers must submit one 
of the following certificates issued by accredited agen cies in the country of origin or shipment:  a 
Certificate of Product Conformity or Certificate of Inspection certifying compliance with Ecuadorian 
technical standards;  Certificate of Product Co mpliance or Certificate of Inspection certifying 
compliance with international standards or compulso ry technical regulations equivalent to Ecuadorian 
Technical Regulations or Mandatory Technical St andards;  or a Manufacturer's Declaration of 
Conformity (ISO 17050-1 format) in the case of compan ies registered with the Quality Certification 
System ISO 9001.  For imports of motor vehicles covered by ISO 9001 Quality System certification, 
the importer or consignee must also submit a gas- emissions report issued by a laboratory recognized 
by INEN.  Prior accreditation in Ecuador is not required for bodies certifying conformity with a foreign standard. 
62. Ecuador maintains a mutual recognition agreemen t with Colombia (expiring in 2012);  past 
agreements with Peru and the Bolivarian Republic of Venezuela were not extended.  The Andean 
Standardization Network is in place to enable memb er countries' standardization bodies to join forces 
for the purpose of preparing Andean standards or ha rmonizing national standards in "priority" sectors.  
At present there are 133 Andean standards:  approximately 30% (38 standards) are adapted from international standards and the remaining 70% ( 95 standards) are standards proposed by member 
countries.  All of them are voluntary. 
63. For purposes of public consultation, the INEN publishes draft Ecuadorian technical standards 
in its Bulletin , which is available online.
76  According to the authorities, in practice, WTO Members 
are allowed 60 days for public consultation.  Fo r Andean Community countries, the period of public 
consultation is 90 days, pursuant to Andean Community Decision 562.  Between 2006 and 2009, 
Ecuador made 51 notifications under the WTO Agreement on Technical Barriers to Trade (TBT), of 
which 42 under Article 2.9;  in most cases, the timeliness of submission allowed for a comment period 
of 60 days or more.77 
(b) Sanitary and phytosanitary measures 
64. Ecuador's Integrated System for Agricultural H ealth, Food Quality, and Safety (SISCAL) has 
been in operation since October 2009.  SISCAL aims  at harmonizing and coordinating the activities of 
entities involved in quality, agricultural health, and food safety.  It helps with the formulation and 
implementation of policies to promote safe food consumption, agricultural health, and quality 
management systems in food production.78 
                                                      
75 CONCAL Resolution 10-2009, Official Register  Supplement No. 563, 3 April 2009. 
76 INEN online information.  Viewed at:  http://www.inen.gob.ec/. 
77 WTO documents G/TBT/21, 2 March 2007;  G/TBT/23, 20 February 2008;  G/TBT/25, 
4 March 2009;  and G/TBT/28, 5 February 2010. 
78 WTO document G/SPS/GEN/982, 12 November 2009. Ecuador WT/TPR/S/254 
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65. The main legal provisions on animal and plant h ealth are found in domestic legislation, which 
also includes the relevant WTO rules, and various instruments approved by the member countries of the Andean Community and the Cartagena Agreement Board.
79  In October 2009 the national Codex 
Alimentarius system was being validated in or der to ensure more flexible and user-friendly 
management of the entire Codex legislation.80  An Organic Law on Food Sovereignty regulating the 
use of biotechnology entered in force in May 2009.81  Private-sector industries have worked with the 
authorities to develop implementing regulations that  would not impede trade in products derived from 
biotechnology. 
66. The Ecuadorian Agency for Agricultural Product Quality Assura nce (AGROCALIDAD) 
(previously SESA), which reports to the Ministry of Agriculture, Livestock, Aquaculture and 
Fisheries (MAGAP), undertakes technical consultati ons prior to setting SPS-related requirements and 
prohibitions in accordance with domestic legisla tion and Ecuador's commitments under international 
agreements.  AGROCALIDAD's reso lutions ensure coordination with other governmental agencies 
setting or implementing rules in this area (e.g. SENAE, SRI, Ministry of Public Health).   The 
authorities indicated that, in accord ance with the relevant provisions of the WTO SPS Agreement, all 
measures are based on scientific evidence and apply to both domestic and imported products.  No 
cost-benefit analysis is undertaken prior or subsequent to the adop tion of SPS measures. 
67. Ecuador's SPS standards, which are expected  to be met by imports from other Andean 
Community members, are listed in a sub-regional register.82  During the period under review, the 
Andean Community upgraded its sanitary regulati ons relating to animals, animal products, and 
by-products from cattle, horses, pigs, and birds;  ch anges were also made to the basic catalogue of 
pests and diseases of exotic animals of the sub-region.  Ecuador and the other members of the Andean Community maintain common SPS requirements for 31 agricultural products and most animals and 
animal products.
83  Harmonized requirements and procedures for the registration and control of 
chemical pesticides for ag ricultural use are in place.84  Some Andean Community standards applied to 
third countries seem to be different from those app lied to Andean Community members;  for example, 
differences in the requirements concern live animals,  animal products, plants, and plant by-products. 
68. Concerning animal health, Ecuador currently ma intains restrictions on imports of sheep and 
goats from countries affected by scrapie  (prurigo lumbar ), and poultry and their products from 
countries affected by bird flu ( avian influenza );  these restrictions may be lifted only by a resolution of 
the Secretary General of the Andean Community.  The authorities indicated that at present there are 
no BSE-related restrictions on impor ts of cattle and products thereof;  these imports are subject to 
sanitary requirements based on a 2005 risk-analysis stud y conducted at the Andean Community level.  
In most cases, the SPS certificate may be obtained qu ickly, and access is gran ted routinely/easily so 
long as the proper documentation is submitted.  The authorities indicated that SPS measures are based 
                                                      
79 For more details about legislation and institutional arrangements as well as pr ocedures in this area, 
see WTO document WT/TPR/S/148/Rev.1, 25 July 2005. 
80 WTO document G/SPS/GEN/982, 12 November 2009. 
81 Article 401 of the 2008 Constitution declares Ecuado r free of transgenic crops and seeds;  however, 
the same article grants the President the exclusive authority to allow imports of agricultural crops and seeds that 
may have been produced using genetic modification (Organic Law on Food Sovereignty, Official Register 
Supplement No. 583, 5 May 2009). 
82 These standards are listed in WTO document WT/TPR /S/148/Rev.1, 25 July 2005, Tables AIII.3 and 
AIII.4. 
83 The sanitary standards applying to trade between members of the Andean Community are set out in 
Cartagena Agreement Board Resolution No. 347, 18 February 1997.  The standards for imports from outside the 
Andean Community are contained in Cartagena Agreement Board Resolution No. 449, 23 January 1997. 
84 Andean Community Decision No. 436, 11 June 1998;  and Andean Community General Secretariat 
Resolution No. 630. WT/TPR/S/254 Trade Policy Review 
Page 56 
  
on pest-risk analysis and certificate refusals are backed by scientific evidence.  AGROCALIDAD 
staff has had sufficient training on the implemen tation of International Plant Protection Council 
(IPPC) and WTO SPS regulations. 
69. In addition to an import licence (section (vi)(b)), imports of animals, plants and their products 
must be covered by a certificate of animal or plant health issued by the national health authority of the 
country of origin.85  Plant health certificates may need to be accompanied by a fumigation or 
quarantine treatment certificate issued by the co untry of origin.  Once importation is approved, 
AGROCALIDAD issues a plant or animal health permit showing the treatment and requirements for the product to be granted entry.  Imports covered by a plant or animal health certificate are subject to 
physical inspection by AGROCALIDAD at the port of entry.  If the results of the physical inspection 
are satisfactory, AGROCALIDAD issues a phytosanitary release document. 
70. A sanitary certificate from the Ministry of Public Health (MSP) is required for imports of 
additives, processed foods, medicines, drugs, homeopathic products, medical appliances, and 
pesticides for domestic use.  The same certificate is required in order to market domestic products 
(Table AIII.3).
86  In addition, an import licence is requ ired from the MSP for additives, processed 
foods and their raw materials, medicines, co smetics, drugs, homeopa thic products, medical 
appliances, and pesticides for domestic use. 
71. Contrary to its past practice of non-notifi cation of SPS measures, between April 2005 and 
July 2010, Ecuador submitted 93 notifications under the WTO Agreement on the Application of 
Sanitary and Phytosanitary Measur es.  It also participated act ively in the work of the WTO 
Committee on Sanitary and Phytosanitary Measures through submissions on issues such as private 
and commercial standards, regulations on new f oods, and maximum residue limits (MRLs) for, inter 
alia, pineapples, coffee, and cocoa, as well as notifica tions on Ecuador's institu tional developments in 
this area.87 
(ix) Government procurement 
72. Since its previous TPR, Ecuador has implem ented major legislative, procedural, and 
institutional changes to its public procurement regi me, which remains an important instrument of 
economic policy.  In 2010, Ecuador's efforts and l eadership in implementing regulations in this area 
were acknowledged at regional level.88  Ecuador remains a non-signatory to the WTO Plurilateral 
Agreement on Government Procurement;  it provides neither preferential nor national treatment to 
foreign suppliers.  The authoriti es indicated that the GPA provisions on special and differential 
treatment for developing countries are not suffici ently attractive or favourable to Ecuador's 
development needs.  They maintain that Ecuador's  regulatory reform already led to the adoption of 
transparency and competition measures in this area, a nd therefore there is no need for an international 
                                                      
85 General Regulation of the Law on Animal Health, Article 14;  and Regulation of the Law on Plant 
Health, Article 4. 
86 COMEXI Resolution No. 183, Annex IV. 
87 WTO document G/SPS/53, 3 May 2010. 
88 In October 2010, INCOP was granted the Jose ph Francois Robert Ma rcello Award of the 
Inter-American Network on Government Procurement (RIC G);  the jury included representatives of the 
Inter-American Development Bank, the Organization of American States, and the Canadian International 
Development Agency (RICG online information, "New s".  Viewed at:  http ://www.ricg.org/en/forms/ 
display_news.aspx;  and INCOP online information, " Reconocimiento internacional al Ecuador en materia de 
liderazgo en compras públicas ".  Viewed at:  http://www.compraspu blicas.gov.ec/index.php?option=com_ 
myblog&show=Reconocimiento-int ernacional-al-Ecuador-en-mate ria-de-liderazgo-en-compras-
pAoblicas.html&Itemid=163 [20 January 2011]). Ecuador WT/TPR/S/254 
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commitment.  Furthermore, the authorities consid er that Ecuador promotes suppliers of goods and 
services with local content in a non-discriminatory manner. 
73. In 2010, the value of public pr ocurement contracts registered by the National Institute for 
Public Procurement (INCOP) (see below) tota lled almost US$6 billion (US$4 billion in 2009), 
equivalent to 11% of GDP (7.86% in 2009) and 28 % of total Government revenue (24.2% in 2009);  
these estimates include  procurement by government-controlled fi rms (i.e. more than 50% of the 
shares).89  In 2009, the main public entities or governme nt-controlled firms, in terms of procurement 
contracts value, were the military (FAE Comando General), Petrocomercial  (a subsidiary of 
PETROECUADOR), the Ministry of Transport, the telecommunications company (Corporación 
Nacional de Telecomunicaciones CNT S.A.), the m unicipality of Guayaquil, the Ecuadorian Social 
Security Institute, the military engineering corps,  the oil tanker fleet, the National Institute of 
Irrigation, and the Food Supply Programme.  In 2010, the main public bodies or companies, in terms 
of contracts value, were the Ecuadorian Social Se curity Institute, the Electricity Corporation of 
Ecuador-CELEC (Corporación Eléctrica del Ecuador), Petroindustrial, the CNT, the Ministry of 
Transport, and the Municipality of Guayaquil.  All these entities are subject to the National Public 
Procurement System rules (see below). 
74. Ecuador's 2008 Public Procurement Law, whic h set up the National Public Procurement 
System (SNCP), regulates a large part of public c ontracting for acquisitions, rent, public works, and 
professional and consulting services.90  In 2009, 6,128 public entities formed the SNCP91; this number 
dropped to 4,855 following a revision of the listing, as of 31 December 2010.  As from 2009, all 
government-controlled companies (e.g. fixed-line tele phony providers, and electr ic power generators 
and distributors) are subject to the rules on government procurement under the 2008 Public Procurement Law.
92  Contracts for exploration and exploitation of hydrocarbon resources, and 
purchases of strategic goods for national defence are not  covered by this law, but by the Hydrocarbons 
Law and the Armed Forces Law, respectively.  Sin ce 2008, INCOP has been in charge of the overall 
supervision of public contracting processes, though every process is managed independently by the 
contracting institution with its own budget and referral terms. 
75. Suppliers must be registered online (www.comp raspublicas.gov.ec) in the Single Registry for 
Suppliers (RUP).  The electronic procedure is manda tory and is the only means of participating in a 
public contracting process.  In 2010 there were 151,361 registered suppliers (109,939 in 2009) of 
which 70,721 were qualified s uppliers (76,277 in 2009).93  The Annual Procurement Plan, and the 
technical, financial, and other re levant information for project execution, and bid specifications, are 
available online (www.compraspublicas .gov.ec), and at each of the c ontracting agencies' websites.  
Offers must be in Spanish, using the format speci fied by the inviting agency, and delivered to the 
contracting agency in person or via the Internet.  Despite some additional information requirements94, 
                                                      
89 INCOP (2010a). 
90 Organic Law of the National Public Procurement System, Official Register  Supplement No. 395, 
4 August 2008. 
91 INCOP (2010a). 
92 Article 34 of Organic Law of Public Enterprises, Official Register  Supplement No. 48, 
16 October 2009. 
93 The authorities indicated that the 2009/10 drop in the number of qualified suppliers is because of 
their lack of complian ce with existing norms. 
94 In order for a company (even an Ecuadorian bran ch of a foreign company) to qualify as a state 
supplier or competent bidder, it must submit a list of share holders, stakeholders, or affiliates.  If any of them is a 
corporate entity domiciled in a "tax haven", the bidder or supplier will be disqualified immediately from any 
bidding process.  Branches must present a list of their headquarters' shareholders;  the authorities indicated that 
this measure was taken to minimize the number of contract s awarded to firms where re latives of State officials 
are involved. WT/TPR/S/254 Trade Policy Review 
Page 58 
  
the authorities indicated that biddin g has been significantly streamlined, inter alia , upon the 
introduction of online procurement procedures (see below). 
76. The legislation continues to provide for several  ordinary procurement procedures, such as 
bidding by invitation (selective tendering), open calls  for tenders, and direct contracting, depending 
on the type of procurement and cost, as well as thr esholds amounts equivalent to a factor of the 
estimated annual State Budget (Table III.3).  To st reamline and simplify the procurement of certain 
items, the 2008 Public Procurement Law establishe d online "dynamic" procurement procedures for 
direct purchases of "normalized" (i.e. standardi zed, homologated) goods and services listed in an 
Online Purchase Catalogue95, and an inverse online auction for "normalized" purchases not contained 
in the Catalogue through which any bidder may compete by discounting their price for a specific 
product required by a public institution.  Special pr ocurement procedures, based on selectivity criteria, 
apply to, inter alia , pharmaceutical products, emerge ncy purchases, and real estate.96  The most 
common procedures in 2010, in terms of share of to tal procurement under the SNCP, were the special 
procurement procedures (30.4%), open calls for tende rs (23.9%), the inverse online auction (14%), 
selective tendering (7.7%), direct contracting (1 .5%) and the Online Purchase Catalogue (2.3%).97  
Between February 2010 and February  2011, public procurement operati ons consisted of goods (41%), 
public works (29%), services (25%), consultancy (3 %), insurance (0.9%), and medicines (0.3%).  
According to INCOP, the correct use of electronic tools has permitted several public entities to carry 
out their procurement with full transparency, allowi ng for quality contracting and important savings.  
In 2010, the operation of the SNCP allowed bu dgetary savings of US$472 million;  the most 
important savings were made by, inter alia , CNT S.A., PETROECUADOR, Petrocomercial, CELEC, 
and the Ecuadorian Social Security Institute.98 
Table III.3 
Government procurement, 2011 
Subject of procurement Procedures Amounts 
Factor of the initial annual 
state Budget U.S. dollar as of March 2010 
Standardized goods and services Online Purchase Catalogue  - No thresholds 
 Direct (minimal value) contracting Below 0.000002 Less than US$4,256.41 
 Inverse online auction Below 0.000002 More than US$4,256.41 
 Direct (low value) contractinga Below 0.000002 Up to US$42,564.12 
 Bidding by invitationa From 0.000002 to 0.000015 From US$42,564.12 to 
US$319,230.93 
 Tenderinga Above 0.000015 More than US$319,230.93  
Table III.3 (cont'd)
                                                      
95 As of 31 December 2010, the Online Purchase Catalogue contained 2,351 product lines in six major 
categories:  motor vehicles;  office supplies;  printing equipment;  computer equipment;  cleaning supplies;  and 
support products for the disabled.  Periodically, INCOP selects suppliers of goods and services contained in the 
Online Purchase Catalogue.  A framework agreement between these suppliers and INCOP commits the former 
to meet the agreed price, quality, pl ace of delivery, and guarantees of the su pply;  in May 2011 , 94 suppliers had 
signed this type of agreement (Articles 43 and 47 of the Organic Law of the National Public Procurement 
System, Official Register  Supplement No. 395, 4 August 2008). 
96 Article 2 of the Organic Law of the National Public Procurement System, Official Register 
Supplement No. 395, 4 August 2008;  and General Regulation of the Organic Law of the National System of 
Public Procurement, Official Register  No. 230, 7 July 2010. 
97 INCOP (2010a). 
98 INCOP (2010a). Ecuador WT/TPR/S/254 
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Subject of procurement Procedures Amounts 
Factor of the initial annual 
state Budget U.S. dollar as of March 2010 
Non-standardized goods 
and services Direct (low value) contracti ng Below 0.000002 Up to US$42,564.12 
 Bidding by invitation From 0.000002 to 0.000015 From US$42,564.12 to 
US$319,230.93 
 Tendering Above 0.000015 More than US$319,230.93 
Public works Direct (low value) cont racting Below 0.000007 Up to US$148,974.43 
 Bidding by invitation From 0.000007 to 0.00003 From US$148,974.43 to 
US$638,461.86 
 Tendering Above 0.00003 More than US$638,461.86 
 Comprehensive fixed-price contracting Above 0.1% More than US$21,282,062.27 
Consultancy Direct contracting Below 0.000002 Up to US$42,564.12 
 Short list From 0.000002 to 0.000015 From US$42,564.12 to 
US$319,230.93 
 Competitive bidding Equal to or a bove 0.000015 More than US$319,230.93 
a If procurement through dynamic procedures is not feasible, these methods may be used. 
Source: INCOP (2010), Seminario taller:  sistema de contratación pública , March, Quito;  and information provided by 
the Ecuadorian authorities. 
77. Under the 2008 Public Procurement Law, which requires that priority be given to locally 
produced and supplied products and services, emphasi s was placed on using go vernment procurement 
as an industrial policy tool.99  Under a 2007 EcuaCompra progra mme that was never implemented, 
local suppliers' participation in public procuremen t contracts were envisaged to increase from 30% to 
more than 50% of the value by the year 2012.  In March 2009 and 2010 INCOP defined a series of 
preferences to local suppliers s ubject to local content- and company-size criteria (Table III.4).100  
These preferences, which range from 5% to 25% of  the contract value, provide advantages for 
competing against larger domestic suppliers as we ll as suppliers that cannot qualify as local.  In 2010 
procurement of goods with a local content exceed ing 40% and of services with local content above 
60% accounted for 19.8% and 79% of total contract  values, respectively.  For procurement of 
consultancy services, foreign supplie rs are considered only in the absence of domestic suppliers.  The 
procurement market in terms of contracts value in  2010 was shared as follows:  26% large firms, 11% 
medium sized firms, 30% sma ll firms, and 33% micro-firms.101 
                                                      
99 Although there is no formal discrimination against foreign suppliers, Articles 25 and 52 of the 2008 
Public Procurement Law establishes that INCOP should set criteria for minimum participation by local 
suppliers. 
100 Micro enterprise (1-9 employees, sales or gros s income less than US$100,000, assets up to 
US$100,000);  small enterprise (10-49 employees, sales or gross income ranging from US$100,000 to less 
US$1 million, assets from US$100,001 to US$750,000);  and medium enterprise (50-159 employees, sales or 
gross income ranging from US$1 million to US$5 million, assets from US$750,001 to US$4 million) (INCOP online information, " Margen de Preferencia Producción Nacional ", 27 January 2009.  Viewed at:  
http://www.compraspublicas.gob.ec/index.php?op tion=com_content&task=view&id=183&Itemid=102 
[20 January 2011];  and INCOP (2010b). 
101 INCOP (2010a). WT/TPR/S/254 Trade Policy Review 
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Table III.4 
Margins of preference to domestic suppliers, 2011 
Beneficiary Margin of preference in relation to 
Local-value-added requirements Domestic suppliers Foreign suppliers 
Domestic enterprises    
Large-scale - 10% >40% on goods 
>60% on works and services 
Medium-sized 5% (large-scale) 15% >40% on goods 
>60% on works and services 
Micro and small (MSEs) 5% (medium-sized) 
10% (large-scale) 20% >40% on goods 
>60% on works and services 
Local enterprises - MSEs 5% (MSEs) 
10% (medium-sized) 
15% (large-scale) 25% >40% on goods 
>60% on works and services 
>15% of local value added 
Source: INCOP (2010), Seminario taller:  sistema de contratación pública , March, Quito. 
78. Procurement through the Online Purchase Catal ogue requires a purchase order and a delivery 
record;  direct (low value) contracting requires an  invoice;  and other contracts take the form of a 
document signed by the parties.  Guarantees for procurement contract are set at 5% of the contract's total amount;  for non-standardized services and public work contracts, the guarantee is increased by 
an amount equal to 20% of the difference between the reference value and the actual amount of the 
contract.  Guarantees can be given by a bank or fi nancial institution or in the form of insurance 
policies, first mortgage of real estate, government bonds or certificates of time deposits.  A technical 
guarantee is required for contracts re lating to procurement or installation of equipment, machinery or 
vehicles, or relevant works to ensure their quality and proper functioning.  Contracts are signed by the 
contracting public institution after their revision and award, and require no further approval by any 
other authority
102;  a specific clause in the contract indicates th at arbitration must be authorized by the 
Attorney General. 
(x) Local content 
79. Ecuador maintains local-content policy objec tives.  Under the 2010 Organic Code of 
Production, Trade and Investment the ministry in charge of the industrial policy and the agency 
responsible for public procurement (INCOP) are required to develop appropriate mechanisms to 
control the national content in the contracting of go ods and services, as well as in investment projects 
in strategic sectors.  A regulation was issued in this respect in June 2010.103  Ecuador maintains that it 
has no new trade-related investment measures (TRI Ms) and that existing measures are published in 
the Official Register .104  Although the September 1999 Complementarity Agreement for the 
Automotive Sector between Ecuador, Colombia, an d the Bolivarian Republic of Venezuela does not 
contain sub-regional content require ments, its implementing Resolution 323 of the General Secretariat 
of the Andean Community deals with sub-regiona l origin and content matters.  In 2010 Ecuador 
denounced this agreement, which has been into fo rce since January 2000 for a renewable ten-year 
period, with effect from 1 September 2011 (Chapter IV(5)).105  Under this agreement, from 2009 to 
September 2011 a 24.3% local-content requirement w as in place for automobiles assembled in the 
signatory countries in order to qualify for reduced duties on imports.106 
                                                      
102 The 2008 Law eliminated the re quirement for contract awardees  to obtain approval from the 
Attorney General and the Controller prior to being awarded a government contract. 
103 Article 102 of the 2010 Organic Code of Production, Trade and Investment. 
104 WTO document G/TRIMS/N/2/Rev.20,  3 September 2010. 
105 WTO documents G/TRIMS/N/1/ECU/1, 2 April 1996, and WT/TPR/S/148/Rev.1, 25 July 2005. 
106 Andean Community Resolution 323, 26 November 1999. Ecuador WT/TPR/S/254 
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(3) MEASURES AFFECTING EXPORTS  
(i) Registration and documentation 
80. Exporters must register at the online page of the SENAE;  the registration with and the visto 
bueno  of the Central Bank were eliminated in 2007 as a result of the amendment of the Organic Law 
on the Customs.107  Similarly to importers (section (2)(i)), they must obtain an RUC number issued by 
the Internal Revenue Service, which is automatic a nd valid indefinitely.  To monitor and ensure the 
availability of sufficient raw material supplies for the domestic industry, as from 2007 exporters of 
waste and scrap of ferrous and non-fe rrous metals, leather and furs have  been required to register with 
MIPRO.108  A customs broker is required for exports  by public entities (section (4)(iv)) and for 
exports subject to special regimes,  such as temporary export for re-im portation in the same state, and 
temporary export for outward processing. 
81. Documentation requirements comprise the Single Customs Declaration for Export (DAU), the 
original commercial invoice, bill of lading, and othe r transport documents;  in certain cases a prior 
export authorization or a certificate of origin may be  required depending on the type of product and/or 
destination (e.g. preferential treatment).109  Similarly to imports, export documentation is processed 
electronically via the SICE.  No data were available on the share of exports that undergo physical 
inspection by Customs or the average time for export clearance  with the authorities. 
(ii) Export levies and reference prices 
82. Since 1998, banana exports have been subject to  a levy of 0.7% on their f.o.b. value;  the 
proceeds from this levy originally financed th e activities of CORPECUADOR, the public entity in 
charge of reconstruction in areas damaged by the El Niño  climatic phenomenon, but at present they 
are transferred to MAGAP.110  Exports of unground coffee, roasted unground coffee, and roasted 
ground coffee are subject to a contribution of 2% of their f.o.b. value111;  these proceeds go to the 
National Coffee Board (COFENAC).  The redeemab le quota requirement on exports was eliminated 
as of 31 December 2010;  it amounted to 0.15 per 1,00 0 of their f.o.b. value, except for petroleum and 
petroleum products, which were subject to  a redeemable quota of 0.05 per 1,000.112 
83. Exports of bananas and plantains113, cocoa114, coffee115, shrimp, and fish products remain 
subject to minimum or reference prices.  The value declared on the single export form may not be less 
                                                      
107 Central Bank of Ecuador online information, " Comercio Exterior ".  Viewed 
http://www.portal.bce.fin.ec/vto_bueno/Com ercioExterior.jsp [22 January 2011]. 
108 COMEXI Resolutions Nos. 400 and 402, 13 September 2007;  and SENAE online information, 
"Procedimientos para Exportar desde Ecuador ".  Viewed at:  http://www.aduana.gov.ec/contenido/ 
procExportar.html [24 January 2011]. 
109 Prior authorization is required for exports of roundwood and specimens of wild flora and fauna and 
their products, for environmental protection purposes.  Fo r exports of coffee and coco a, a quality certificate is 
issued by the National Coffee Board (COFENAC) or the National Association of Coco a Exporters.  Certificates 
of origin are issued by MIPRO, the Ecuadorian Export Federation (FEDEXPOR) or the chambers of commerce 
or industry designated by MIPRO.  For more details, see WT/TPR/S/148/Rev.1, 25 July 2005. 
110 Law 120, Official Register  Supplement No. 378, 7 August 1998;  and Agreement 204, Official 
Register  Supplement No. 273, 7 September 2010.  Viewed  at:  http://www.corpecuador.gov.ec/descarga/ 
LeydeCreacion.pdf;  and http://www.derechoecuador.com/index.php ?=com_content&task=view&id=5729& 
Itemid=597 [24 January 2011]. 
111 Special Law on the Coffee Sector, Article 8, Official Register  No. 657, 20 March 1995. 
112 Organic Code of Production, Trade and Investment, Official Register  No. 351, 29 December 2010. 
113 Law to Promote and Control the Production and Marketing of Bananas, Plantains (Barraganete), and 
related Musaceas Plants Destined for Exportation, and its implementing regulations. WT/TPR/S/254 Trade Policy Review 
Page 62 
  
than the price set for each product.  The price for bananas is based on a "minimum support price" that 
banana exporters must pay producers,  which is usually set in an in ter-ministerial agreement between 
the MAGAP and the MIPRO (Chapter IV(2)(v) and Tabl e IV.1);  the authorities indicated that it was 
not a minimum reference price and it had no relevance to exports or their destination.  For cocoa and 
coffee, the minimum f.o.b. reference price for ex ports is set by an inter-institutional commission, 
comprising representatives of the MIPRO, the MAGAP, and the National Association of Cocoa 
Producers;  the authorities indicated that these pr ices, which are those set at the New York Stock 
Exchange and are revised on a weekly basis, ar e used only for settlement purposes by the Central 
Bank of Ecuador, and serve only as a reference for the marketing of these products in the domestic 
market.116  They also indicated that these are reference prices rather than minimum prices. 
(iii) Export prohibitions, licensing, and other restrictions 
84. Ecuador maintains export restrictions on cer tain products pursuant to the Convention on 
International Trade in Endangered Species of Wild  Fauna and Flora, the Basel Convention on the 
Control of Transboundary Movements of Hazardous Wastes and Their Disposal, and the Montreal Protocol on Substances that Deplete the Ozone Laye r.  Export restrictions remain in place on exports 
of goods that form part of Ecuador's cultural, artistic, archaeological, and historical heritage. 
85. To ensure domestic supplies, and there by possibly assist downstream processing of the 
products concerned, temporary export prohibitions a nd quantitative restrictions affected certain items 
during the review period.  Rice exports were prohibited for 90 da ys in 2007, and temporarily in 
June 2008;  exports of 20,000 tonnes of polished ri ce to the Bolivarian Republic of Venezuela under a 
sale contract signed in May 2008 were not affected by this prohibition.
117  Following the introduction 
of a register of exporters to secure domestic supp lies to certain industries (section (i), Chapter II(5)), 
exports of waste and scrap of certain ferrous a nd non-ferrous metals have been restricted since 
February 2010 by annual quotas:  for stainless steel (1,125 tonnes for 2010-11) and non-ferrous 
metals (14,112 tonnes);  in June 2010 export quotas fo r virtually all restricted items were increased by 
10%.118  As from July 2010 exports of waste and scrap  of aluminium, bronze, ferrous metals other 
than stainless steel have been prohibited. 
86. To protect the environment, exports of r oundwood are prohibited except in limited quantities 
for scientific and experimental purposes.119  Prior authorization for these export is issued by the 
MAGAP.  The exportation of semi-finished forest pr oducts is authorized only when "domestic needs 
and the minimum levels of industria lization therefore have been met".120  In such cases, prior 
authorization is obtained from the MAGAP and the MIPRO. 
                                                                                                                                                                     
114 Law No. 79, Official Register  No. 93, 2 October 1981. 
115 Special Law on the Coffee Sect or, and Executive Decree No. 2855, Official Register  No. 736, 
12 July 1995. 
116 Executive Decree No. 1720-A, Official Register No. 369, 2 July 2004. 
117 Agreement 105, 26 June 2008, Official Register  No. 385, 21 July 2008.  Viewed at:  
http://www.derechoecuador.com/i ndex.php?option=com_content&ta sk=view&id=4586#N105;  and 
Agreement 091, 3 June 2008, Official Register  No. 364, 20 June 2008.  Viewed at:  
http://www.derechoecuador.com/inde x.php?option=com_content&task=v iew&id=4526 [24 January 2011]. 
118 Agreement 10 342-A, 8 September 2010, Official Register  No. 287, 27 September 2010.  Viewed at:  
http://www.derechoecuador.com/inde x.php?option=com_content&task=view&id=5867&Itemid=597;  and 
Agreement 10 338, 22 June 2010, Official Register  No. 252, 2 August 2010.  Viewed at:  
http://www.derechoecuador.com/index2.php?option=co m_content&do_pdf=1&id=5687 [24 January 2011]. 
119 Law No. 74 on Forestry and the Conservati on of Natural Areas and Wildlife, Article 45, Official 
Register  No. 64, 24 August 1981. 
120 Law on Forestry and the Conservation of  Natural Areas and Wildlife, Article 46. Ecuador WT/TPR/S/254 
 Page 63 
 
 
(iv) Tax concessions 
87. In 2010, Ecuador changed its dr awback scheme, and replaced its maquila  and free zone 
regimes with special economic development zones that offer various tax concessions to neutralize 
adverse effects of tariffs on exports.121 
(a) Drawback regime 
88. The complex drawback regime applies to dom estic and foreign exporters registered as 
taxpayers in Ecuador, except exporters of hydrocar bons.  Eligible exporters must register with 
Customs, submitting a list of the inputs used in th e manufacture of each of their export products and a 
certificate from the Internal Revenue Service (SRI) showing the ratio of their export value to total 
sales.  The certificate is used in determining the amount of the refund to the exporter.  The refund 
consists of the customs duties, th e FODINFA charge, IVA, and ICE ta xes, proportionate to the use of 
the input, and it should not exceed 5% of the f. o.b. value of the exported goods.  No specific 
reimbursement rates have been set.  Exporters ma y request additional refund of any amount in excess 
of this in a future application or after one year.  The number of beneficiaries rose from 214 in 2009 to 388 in 2010, total reimbursements passed from US$ 785,234 to US$1.4 million, and the covered f.o.b. 
export value grew from US$584.7 million to US$1.3 billion;  the overall average drawback rate 
remained stable at 1%-1.3% of the export value.  The main produ cts benefiting from drawback were 
non-electrical domestic appliances of iron or steel (stov es, ranges, grates, etc.), preparations used in 
animal feeding, new tyres, and bananas. 
(b) Maquila  regime 
89. The maquila  regime was eliminated with the passing of the 2010 Organic Code of Production, 
Trade and Investment.  The regime, which cove red industrial processes or services for the 
manufacture, transformation or repair of goods of foreign origin for subse quent re-export, provided 
for suspension of duties and other indirect taxes on imports of inputs and equipment
122, and of other 
requirements (e.g. import permits) pending exportation.  MIPRO was the main agency responsible for operating the regime.  The majority of maquila  operations in Ecuador seem to have been in the 
textiles and fish processing subsectors.  The maquiladoras  had a low level of export performance due 
to the impact of the dollarization of the eco nomy on labour costs and therefore on their 
competitiveness in the region, especially vis-à-vis  Central American countries.  No data on the duty 
revenue forgone or employment-im ports-exports generated by this re gime were available from the 
authorities. 
(c) Free zone regime 
90. While the free zone regime was eliminated with the passing of the 2010 Organic Code of 
Production, Trade and Investment, the exemptions fro m income tax (thereby subsidizing exports) or 
any other tax replacing it, provincial and municipal ta xes, and any other such tax, remain in place for 
firms registered before 1999, and the exemption is  valid until 2019.  It also allows for indefinite 
exemption from duties and other taxes on imports of  inputs, equipment, and other requirements.  
Since October 2007, goods entering free zones have b een subject to control by SENAE.  The regime 
covers processing of goods for export or re-export;  international marketing of goods for import, 
export or re-export;  and provision of "internationa l" services, including tourist services.  Companies 
operating in a free zone may export their output to the customs territory of Ecuador after payment of 
                                                      
121 For more details about these regimes, see WT O document WT/TPR/S/148/Rev.1, 25 July 2005. 
122 Equipment needed for assembly operations could also be imported free of duties, although a bond 
had to be deposited. WT/TPR/S/254 Trade Policy Review 
Page 64 
  
duties and other import taxes.  Both the entities ad ministering free zones and the user companies are 
eligible for these advantages.  The National C ouncil for Free Zones (CONAZOFRA) was responsible 
for framing general policy for the operation and supervision of free zones until December 2010;  at 
present the Sectoral Council for Production formulates policy in this area, and a technical unit of 
MIPRO supervises and controls the operation of the free zones.  Currently, the free zone scheme is in 
a transition period;  the zones that remain in operation for the remainder of their concession period 
may continue their activities by migrating to the operational framework of the recently set special 
economic development zones ( ZEDE) scheme (section (d)). 
91. According to CONAZOFRA, by 2007 the free zones had not met the objectives set by the 
relevant legislation or expectations in terms of  employment, investment, exports, and technology 
transfer;  the authorities considered that this was due to lack of promotion of the free zones at the 
national and international level.  Furthermore, the authorities indicated that a large number of free 
zone firms used this scheme as a means for ta x evasion.  In addition, the SRI, which does not 
recognize all tax exemptions granted under the free z ones scheme, has claimed payment of the income 
tax from free zone users.  Those who did not pay ha ve been taken to court and should have to settle 
them at the end of their cases, thus contribut ing to unnecessary uncertainty for enterprises and 
investors.123  Following a screening policy implemented by CONAZOFRA, imports by free zone 
firms to the Ecuadorian market have fallen since end 2007.124  In June 2010, 11 free zones were in 
place, of which 8 were operational125;  according to set objectives, all zones were expected to create 
33,014 jobs, but so far there have been only 8,6 34.  In 2009, 69 firms were using the free zones 
regime, 56 of which were operational;  most of th eir activities related solely to services (32 firms).126  
In 2009, they generated merchandise exports of US $193.2 million, mostly comprising fish and fishery 
products, and flowers;  free zone exports were d estined mainly for the EU.  Imports from the free 
zones into the local market were valued at US$77. 9 million, and brought Ecua dor indirect tax revenue 
of US$74.3 million, from payment of customs duties (43%), IVA (54%), and ICE (3%).  As a result of the screening policy, imports and consequently  the resulting tax revenue has dropped since 2008.
127  
(d) Special economic development zones 
92. In response to concerns over the operation of  the free zones scheme, the December 2010 
Organic Code of Production, Trade and Investme nt introduced the special economic development 
zones (ZEDE) regime.  This encompasses importa nt objectives of the Agenda for the Productive 
Transformation (ATP) 2010-13 (section (4 )(ii)(c), Chapters II(8) and IV(5))128, such as promotion of 
export-focused production, comprehensive territori al development, and the creation of quality 
employment.  ZEDEs are also expected to, inter alia , diversify domestic production and exports, 
including those of innovative products.129  Three types of ZEDEs may be established:  (1) for 
biodiversity, electronic innovation, energy or envi ronmental improvement projects and technology;  
                                                      
123 It seems that persuading the tax authority to resp ect the tax benefits conferred by the free trade zone 
law has been burdensome and time consuming, therefore affecting the expansion of this regime (CONAZOFRA, undated a). 
124 CONAZOFRA (undated a). 
125 In July 2011, the following zones were operational:  ZOFRAMA, METROZONA, ZONAMANTA, 
ZOFRAGUA, ZOFRAPORT, TAGSA, CORPAQ, and TURISFRANCA.  Non-operational zones were 
ECUAZOFRA, and POLIFRANCA, which is in the process of cancelling its concession, and ZOFREE's concession was terminated in Febr uary 2011 (information supplied by the authorities;  and CONAZOFRA, 
undated d). 
126 CONAZOFRA (undated a). 
127 CONAZOFRA (undated b). 
128 Sectoral Council fo r Production (2010). 
129 Articles 34 to 52 of the Organic Code of Production, Trade and Investment, Official Register  
No. 351, 29 December 2010. Ecuador WT/TPR/S/254 
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(2) for industrial-diversification projects, i nnovative production methods intended to produce goods 
for export and/or import substitution, using quality  employment;  and (3) for logistics services 
(including cargo storage, inventory management, por ts management, national or international goods 
distribution, and maintenance of aeroplanes or boats ).  An enterprise operating in a ZEDE may claim 
a tax credit for value-added taxes paid in the acqui sition of commodities, goods, and services that are 
to be used in production processes.  Such enterp rises may import duty-free goods and services related 
to their businesses at the ZEDE.  In addition, they ar e not liable for taxes on capital or interest paid on 
foreign loans from internati onal financial institutions. 
(v) Export promotion and marketing support 
93. Under the December 2010 Organic Code of  Production, Trade and Investment the 
responsibilities of the Export Promotion and Investment Corporation (CORPEI)130 were transferred to 
the Export and Foreign Investment Institute (PRO ECUADOR) under the Ministry of Foreign Affairs, 
Trade and Integration.131  The Institute is now responsible  for planning, coordinating, and 
implementing export promotion, and for attracti ng foreign investment,  and for export-related 
consultancy, training, and trade intelligence.  Th e Institute provides advice to the priority export 
sectors and those with export potential.  It coordinat es, prepares, and monitors trade fairs, visits, and 
other national trade promotion events, and pr ovides information on market-access conditions, 
business opportunities, and support tools for increasi ng exports.  The Institute organizes training on 
trade issues, and implements programmes focuse d on the insertion of medium and small-sized 
enterprises and other stakeholders into Ecuador's export pattern.  To support export development, it, 
inter alia , prepares business reports, market research studies, international trade statistics and 
analysis, monthly statistical bulletins, and factsheet s.  The Export and Foreign Investment Institute 
operates a network of 27 commercial offices that s upport its activities abroad;  it is also assisted by 
the 6 regional offices of the Ministry of Foreign Affairs. 
(vi) Export finance, insurance, and guarantees 
94. The National Finance Corporation (CFN), a st ate-owned development bank, runs a credit 
service called Direct Credit (until 2007 called FOPEX) in charge of different loan applications from 
various sectors.  Since July 2009, a line of credit called DICOMEX (Foreign Trade Division) has provided loans of up to 20% of the value of the "t echnical" assets of the beneficiary, to finance by 
activities related to the shipment of goods for e xport or the production of goods or services by 
companies established in Ecuador.  CFN provides loans of up to US$20 million (individual firms) or 
US$40 million (economic group);  loans above US$2 m illion must be approved by its Board.  The 
CFN grants the loans through financial intermediaries , and the rates paid by the end-borrowers are up 
to 4 percentage points higher than the CFN rates.   CFN concessional credit is offered for a one-year 
term with disbursements of up to 180 days, an d at interest rates ranging from 7.5% to 8.75%.
132  
Between July 2009 and May 2011 DICOMEX cred its to exporters (a nd importers) totalled 
US$53.67 million. 
                                                      
130 Until end 2010, CORPEI's export pr omotion activities were funded in part from the proceeds of the 
redeemable quota applied to imports and exports (sections (2)(v)(b) and (3)(ii)). 
131 Article 95 of the Organic Code of Production, Trade and Investment, Official Register  No. 351, 
29 December 2010;  Executiv e Decree No 757 (Regulation of the struct ure and institutionalization of productive 
development, investment, and development mechanisms and instruments established by the Organic Code of 
Production, Trade and Investment), 6 May 2011, Official Register  Supplement No. 450, 17 May 2011.  
Executive or Presidential De crees may be viewed at SI GOB online information, " Sistema de Información de 
Decretos Presidenciales ".  Viewed at:  http://www .sigob.gov.ec/decretos/. 
132 CFN online information, " Financiamiento de Exporta ción PRE y POST Embarque ".  Viewed at:  
http://www.cfn.fin.ec/index.php?option=com_content&vi ew=article&id=920&Itemid=679 [27 January 2011]. WT/TPR/S/254 Trade Policy Review 
Page 66 
  
95. No state-run export insurance or guarantee pr ogrammes are in place.  Private-sector entities 
are authorized by the Superintendency of Banks and Insurance to provide these services under market 
conditions.133  The December 2010 Organic Code of Production, Trade and Investment requires the 
establishment of an export credit insurance mechan ism run by a public-sector financial institution.134 
(4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Taxation 
96. Indirect taxes remain Ecuador's majo r source of tax revenue (Table III.5).135  The value-added 
tax (IVA) is the main indirect tax, followed by cu stoms duties and the special consumption (or excise) 
tax (ICE);  in 2010, IVA and ICE revenue collect ed on imports accounted for 42.6% and 21.6% of 
total revenue from these taxes, respectively.136  In 2010, non-tax government revenue from oil sector 
activities was equivalent to about 51% of to tal tax revenue, up from about 38% in 2006. 
Table III.5 
Structure of tax revenue, 2005-10 
(US$ million and %)  
 2005 2006 2007 2008 2009 2010a 
Total tax revenue (US$ million) 3,741  4,244 4,749 6, 570 7,257  8,654 
Direct taxes 26.6 26.8 28.2 37.0 36.3 29.0 
Income tax 25.0 25.2 26.7 35.6 34.7 27.2 
Property tax 1.6 1.6 1.5 1.5 1.6 1.8 
Indirect taxes 73.3 73.1 71.7 62.9 63.7 67.7 
Value-added tax (IVA) 52.8 52.5 52.8 43.0 41.6 43.3 
Special consumption tax (ICE) 5.9 6.1 4.6 7.2 6.2 6.1 
Customs duties 14.6 14.6 14.3 12.0 12.7 13.3 
Tax on foreign exchange flight 0.0 0.0 0.0 0.7 3.2 4.9 
Other taxes 0.1 0.1 0.1 0.1 0.0 3.3 
Memorandum       
Oil revenue (US$ million) 1,567 1,603 1,764 4,642 2,455 4,410 
a  Provisional.  
Source:   Ministry of Finance, Ecuador. 
(a) Indirect taxes 
Value added tax (IVA) 
97. The IVA, a value-added tax levied on consumption,  is charged at a rate of 12% on the transfer 
and importation of goods and services at each stag e of processing;  Ecuador applies the destination 
                                                      
133 Executive Decree No. 1793, Official Register  No. 365, 28 June 2004. 
134 Article 94 of the Organic Code of Production, Trade and Investment, Official Register  No. 351, 
29 December 2010. 
135 Central Bank of Ecuador online information, " Índice del Boletín Anuario No. 31 ".  Viewed at:  
http://www.bce.fin .ec/docs.php?path=./documentos/Publicacione sNotas/Catalogo/Anuari o/Anuario31/IndiceAn
uario31.htm [24 January 2011]. 
136 SRI online information, " Servicio de Rentas Externas:  Estadí sticas:  Estadísticas Generales de 
Recaudación ".  Viewed at:  http://www.sri.gob.ec/web/gue st/estadisticas-generales-de-recaudacion?p_p_id= 
busquedaEstadisticas_WAR_Bibliot ecaPortlet_INSTANCE_2yRc&p_p_lif ecycle=1&p_p_state=normal&p_p_
mode=view&p_p_col_id=column-3& p_p_col_count=2&_busquedaEstad isticas_WAR_BibliotecaPortlet_ 
INSTANCE_2yRc_com.sun.faces.por tlet.VIEW_ID=%2Fpages%2FbusquedaEstadistica.xhtml&_busquedaEsta
disticas_WAR_BibliotecaPortlet_IN STANCE_2yRc_com.sun. faces.portlet.NAME_SPAC E=_busquedaEstadist
icas_WAR_BibliotecaPortlet_INSTAN CE_2yRc_ [24 Ja nuary 2011]. Ecuador WT/TPR/S/254 
 Page 67 
 
 
principle.137  Its valuation base is usually the sales price less ordinary customer discounts and rebates, 
the value of goods and packaging returned by the cu stomer and, in the case of hire-purchase, interest 
and insurance premiums.  The assessment base for impor ts is the c.i.f. value plus duties and any other 
tax, charge, surcharge or expenditure stated in the import declaration and other relevant documents, 
including the ICE.  Imports and domestic sales of certain goods and services, as well as their export 
are zero-rated.138  According to the SRI online information and the previous TPR of Ecuador, 
domestically produced milk and canned tuna, scad, sardin e, and trout remain zero rated for IVA;  the 
authorities indicated that this measure precedes Ecuador's accession to the WTO and undertook to 
take corrective action when revi sing other tax-related matters.139 
Special consumption tax (ICE) 
98. The ICE is an excise tax levied on the consumption of certain goods and services, whether 
domestic or imported (Table III.6);  ICE coverage has expanded to more goods and services, and its 
rates, some of which have been raised considerab ly since the last TPR of Ecuador, range from 5% to 
300% depending on the product.140  Exports are exempt from the ICE.  The ICE's valuation basis is 
the sales price set by the domestic producer or impor ter minus the IVA, or the reference value set by 
the SRI for alcoholic beverages.  The resulting sales price should not be less than the ex-factory or the 
ex-customs value plus a "notional" margin for marketing of 25%.  The authorities indicated that the same rates of marketing margins apply to domestic  and foreign goods.  The retail price of products 
subject to the ICE must be marked on product labels.  The authorities indicated that in the course of 
2011 a tax reform is to convert the ad valorem  ICE rates for alcoholic beverages and tobacco products 
to compound or specific rates;  rates are to be pro portionate to the alcoholic content of the beverage. 
                                                      
137 Internal Taxation Law, Article 51. 
138 Zero-rated IVA goods include:  unprocessed, unt ransformed, and untreated foodstuffs;  several 
types of domestically produced milk;  bread, sugar, unrefined cane sugar, salt, butter, margarine, oats, cornflour, 
noodles, flour for human consumption, and edible oils ot her than olive oil;  certified seeds, bulbs, live plants, 
cuttings and roots;  fishmeal, balanced foods, sweetened preparations of a kind used in animal feedings, and other;  fertilizers, insecticides, pesticides, fungicides, herbicides, plant oil used against black sigatoka, 
anti-parasite and veterinary products, and inputs therefor;  wheeled tractors of up to 200 horsepower, ploughs, 
harrows, grippers, pourers, harvesters;  seeders, grass cutters, portable fumigation pumps, sprinklers, and sprayers for irrigation equipment;  medicines and drugs for human use (including inputs therefor);  packaging 
and labels for the manufacture of medicines for human or veterinary use;  bond paper and newsprint paper, 
newspapers, magazines, books, and supplementary material of a kind sold with books;  fluorescent lamps;  airplanes and helicopters for commercial use;  and exports.   Zero-rated services incl ude:  financial and stock 
exchange services;  public electricity, drinking water, sewage, and waste collection services;  health, education, 
religious, funeral, and book printing services;  health and life insurance;  state-supp lied administrative services;  
public entertainment;  road tolls;  and exported services.  For more details, see SRI online information, 
"Información sobre Impuesto:  IVA:  Hecho generador y tarifas ".  Viewed at:  http://www.sri.gob.ec/web/ 
10138/151 [27 January 2011]. 
139 Paragraph 2 of GATT Article III stipulates that impor ts "shall not be subject, directly or indirectly, 
to internal taxes or other internal charges of any kind in excess of those applied, directly or indirectly, to like domestic products".  Internal Taxation Law, Article 55.  For more details, see SRI online information, 
"Información sobre Impuesto:  IVA:  Hecho generador y tarifas ".  Viewed at:  http://www.sri.gob.ec/ 
web/10138/151 [27 January 2011]. 
140 Internal Taxation Law, Title Three. WT/TPR/S/254 Trade Policy Review 
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Table III.6 
ICE rates, by product, 2004 and 2011 
Product 2004 2011 
No. of ten-digit items subject to 
the ICE 
(corresponding tariff heading) Rate 
(%) No. of ten-digit items subject to 
the ICE 
(corresponding tariff heading) Rate 
(%) 
Cigarettes   4 (2402) 150 
Light 1 (2402) 77.25   
Dark 1 (2402) 18.54   
Beer 1 (2203) 30.9 1 (2203) 30 
Aerated beverages 1 (2201) 
1 (2202) 10.3 1 (2201) 
2 (2202) 10 
 
Alcoholic beverages other than beer 5 (2204) 
2 (2205) 
1 (2206) 2 (2207) 
16 (2208) 26.78 5 (2204) 
2 (2205) 
1 (2206) 2 (2207) 
16 (2208) 40 
 
Perfumes and toilet waters   1 (3303) 20 
Video games   1 (9504) 35 
Firearms, sporting guns, and ammunition   1 (9301) 
2 (9303) 7 (9306) 300 
 
Incandescent lamps   5 (8539) 100 
Motor vehicles for the land transport of goods up to 3.5 tonnes 1 (8702) 
9 (8703) 
4 (8704) 
7 (8705) 6 (8711) 5.15   
Motor vehicles for the land transport of 
goods up to 3.5 tonnes as follows:     
Vans with a retail sales price of up to 
US$30,000   1 (8702) 5 
Motor vehicles with a retail sales price 
of up to US$20,000   9 (8703) 5 
Motor vehicles other than vans with a 
retail sales price of more than US$20,000 up to US$30,000   4 (8704) 15 
Motor vehicles with a retail sales price 
of more than US$30,000 and up to 
US$40,000   7 (8705) 25 
Motor vehicles with a retail sales price 
of more than US$40,000   6 (8711) 35 
Airplanes, helicopters, water scooters, 
motor tricycles and quadricycles, yachts, 
and recreational craft 1 (8703) 
7 (8802) 
1 (8901) 
4 (8903) 10.3 1 (8703) 
7 (8802) 
1 (8901) 
4 (8903) 15 
Casino services, casino halls, gaming halls 
(bingo machines), and other gambling 
services n.a.  n.a. 35 
Dues, membership fees, shares, and the 
like charged to members and users of 
social clubs for services, of an overall amount exceeding US$1,500 per year n.a.  n.a. 35 
Telecommunication and radio services n.a. 15.0  - 
Paid television services   n.a. 15 
n.a. Not applicable. 
Note: Legal basis:  Law on the Internal Tax Regime. 
Source:  Information provided by SENAE;  and WTO (2005), Trade Policy Review:  Ecuador , Geneva. Ecuador WT/TPR/S/254 
 Page 69 
 
 
(b) Direct taxes 
99. Ecuadorian and foreign companies with local subs idiaries in Ecuador are subject to corporate 
income tax at 25%;  this rate is lowered to 15% if the company acquires new equipment and/or 
machinery.  The tax applies to a company's profits after 15% of these profits have been distributed to 
employees, as required by law.  The December 2010 Organic Code of Production, Trade and 
Investment includes a provision that will cut the co rporate tax rate by 1 percentage point per year until 
it reaches 22% in 2013.  As from December 2007, a 70% windfall gains tax is levied on a monthly 
basis (since January 2010) on extraordinary income  earned by companies that have signed contracts 
with the Government for the exploration and e xploitation of non-renewable resources (e.g. mining, 
petroleum)141;  this tax is considered a deductible expe nse for income-tax purposes.  In addition to 
these taxes, as from the passing of the 2009 Mining  Law (Chapter IV(3)), all mining concessionaires 
pay a minimum 5% royalty on sales of all primary and secondary minerals. 
(c) Tax incentives 
100. In December 2010, in addition to tax con cessions discussed earlier (section (2)(iv)(e) and 
(3)(iv)), three types of tax incentives were introdu ced by the Organic Code of Production, Trade and 
Investment to promote investment in domestic production activities, for various purposes including 
import substitution.142  The Code classifies tax incentives as:  general, sectoral, or for depressed areas. 
101. The general incentives consist of progressive 3% income tax reduction;  incentives for the 
special economic development zones (section (3)(iv)(d ));  additional deductions in the calculation of 
income tax, to stimulate productivity, innovation, and eco-efficient production;  payment facilities for 
taxes on foreign trade;  deduction, in the calculation of income tax, of the additional compensation for 
the payment of subsistence wages;  exemption from the foreign exchange flight tax on the financing 
of external transactions (section (2)(v)(d));  five-y ear exemption from the advance payment of income 
tax requirement on all new investments in pre- defined priority and selective import-substitution 
sectors (Chapter II(2)(b))143;  and reform of the calculation of the advance payment of income tax. 
102. The sector-specific and equitable regional deve lopment incentives apply to the sectors that 
contribute to the change in the "energy pattern/mat rix" (i.e. diversification of energy sources), to 
strategic import substitution, to export promotion, and to rural de velopment throughout the country 
and urban development.  They consist of full inco me tax exemption for five years on new investments 
in the pre-defined priority sectors. 
103. Investment in depressed areas is granted an additional incentive of 100% deduction of the 
cost of hiring new workers for a period of five years. 
                                                      
141 Article 164 of the Tax Equity Reform Law, 29 December 2007. 
142 Article 24 of the Organic Code of Production, Trade and Investment, Official Register  No. 351, 
29 December 2010. 
143 These pre-defined priority sectors consist of new investment in jurisdictions outside Quito and 
Guayaquil, at the following sectors:  agriculture and forestry products;  biotechnology and applied software;  
fresh, processed or frozen food;  logistics services;  metal-mechanics;  petrochemicals;  pharmaceuticals;  
renewable energies.  The strategic import substitutio n as defined by the presidency are fertilizers, 
agrochemicals, pesticides and fungicid es, soaps, detergents and cosmetics, other chemicals, ceramics, tiles and 
floors, textiles, clothing, footwear, leather, manufacture of  radio, television, phones, electronics in general, and 
electrical appliances. WT/TPR/S/254 Trade Policy Review 
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104. All these incentives are being implemented th rough Executive Decrees passed in April and 
May 2011144;  they provide details on the priority sector s for new investment as well as those subject 
to strategic import substitution (Chapter II(2) and (5)).  Preliminary studies indicate that these measures will represent forgone tax revenue estimated  at US$336 million, an amount to be recovered 
as from 2014 through tax revenue ge nerated from the new investment.  The authorities are aware that 
such mechanisms are seldom cost-eff ective at least in the short-term. 
105. Following the amendment of the Public Finance Law and the Internal Tax Regime Law, tax 
incentives for new tourism projects under the Law on Tourism were suspended in 2010.
145  At present, 
the only incentives to the tourism sector are those contained in the 2010 Internal Tax Regime Law, 
i.e. IVA refunds for tourists and for services rendered to the sector.  No data are available on the 
beneficiaries of or benefits (e.g. employment, busin ess generated) from these incentives, or estimates 
of forgone tax revenue, because the authorities indi cated that these incentives have never been used. 
(ii) Other forms of production assistance 
106. According to its latest WTO notifications, Ecua dor did not grant any specific subsidies within 
the meaning of the Agreement on Subsidies and Countervailing Measures, or export subsidies on 
agricultural products, until 2009.146 
107. In addition to tax incentives through export processing promotion regimes and other special 
customs regimes (sections (i)(c), (2)(iv)(e), a nd (3)(iv)), Ecuador continues to provide non-tax 
incentives through concessi onal loans and grants. 
(a) Loan programmes 
108. The 2010 Organic Code of Production, Trade and Investment provides for the introduction of 
programmes to finance, at preferential interest rates, long-term working capital loans and worker 
participation in their firm's capital.147  These loans are to be funded by  the CFN (section (3)(vi)).  No 
data were available on the estimated cost of these loans. 
                                                      
144 Executive Decree No. 732 (Amendments to the Regulation for the internal tax system, Regulation 
for implementing the tax on the exit of foreign exchange, and Regulation for the implementation of the rural land tax), 11 April 2011, Official Register  Supplement No. 434, 26 April 2011;  Executive Decree No. 757 
(Regulation of the structure and institutionalization of productive development, investment, and development 
mechanisms and instruments established by the Organic Code of Production, Trade and Investment), 6 May 2011, Official Register  Supplement No. 450, 17 May 2011.  Ex ecutive or Presidential Decrees may be 
viewed at SIGOB online information, " Sistema de Información de Decretos Presidenciales ".  Viewed at:  
http://www.sigob.gov.ec/decretos/. 
145 These measures included:  exemption from payment of taxes resulting from the incorporation of a 
company and other financial transactions, and from taxes relating to the transfer of property ownership to the 
company;  duty-free importation of aircraft, boats, and ve hicles used for transporting tourists, for a specified 
period, provided there is no domestic availability thereof;   and the possibility to deduct from income tax, within 
certain limits, external payments made to promote inb ound tourism.  The projects needed to be located in 
economically underdeveloped rural areas and constitu te touristic activities "which warrant accelerated 
promotion".  Law No. 97, Official Register  Supplement No. 733, 27 Decem ber 2002;  Law on Tourism, 
Article 34. 
146 WTO documents G/SCM/N/186/ECU, 11 November 2009;  and G/AG/N/ECU/23, 
9 February 2010. 
147 Articles 60 and 68 of the Organic Code of Production, Trade and Investment, Official Register  
No. 351, 29 December 2010. Ecuador WT/TPR/S/254 
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109. Several loan programmes are made available by the main public institutions that administer 
such programmes, i.e. the CFN (section (3)(vi)) and the National Development Bank (BNF).  The CFN granted loans under its direct credit, worki ng capital, and multisectoral (small-scale activities) 
programmes.  Grace periods, the amount, and inter est rates depend on the programme, the type of 
investment, and the size of the enterprise.  Prefer ential interest rates range from 8.75% to 11.5%;  
these rates may be up to 16.06 percentage points less than commercial rates.
148  
Government-sponsored financing via the CFN includ es credit for commerce, fishing, foreign trade, 
housing, industry, mining, services, small industry and crafts, tourism, and transport.  CFN credit lines 
for these activities have been limited:  the Gove rnment raised the credit lines from US$425.9 million 
in 2008 to US$486.9 million in 2 009 and to US$506.2 million in 2010.  The BNF also provides credit 
for the country's productive sectors, especially agri culture, fisheries, and craftsmen/artisans.  The 
BNF's preferential interest rates under its multiple  programmes range from 5% to 11%;  these rates 
may be up to 20.5 percentage points less than the commercial rates.149  Between 2005 and 2010, its 
loan portfolio grew fivefold from US$145.3 million to US$735.6.  Since March 2007, the Government has also offered the so-called 5-5-5 cr edit:  a US$5,000 credit, at 5% interest for five 
years, subsidized by the BNF.  The programme was to benefit 1 million micro-entrepreneurs;  
however, according to the BNF, it had been extende d to only 12,019 persons in 2009 and to 9,384 in 
the year to end-August 2010. 
(b) Grants 
110. Since October 2010, the National Secretariat for Science and Technology (SENACYT) has 
provided funding of up to 100% to public entities and private enterprises for the purchase of 
equipment and fellowship payments to research personnel.
150  SENACYT's last open call to 
universities, polytechnics, and research groups was held  in 2008, and targeted research projects in six 
strategic areas (human development, energy, ag ricultural development, environment, natural 
resources, and information and communications tec hnology).  As a result, 68 projects were approved 
and led to total disbursements of US$59.8 milli on.  These projects generated investment of 
US$9.4 million in 2008, US$26 million in  2009, and US$16 million in 2010. 
(c) Other 
111. According to its WTO notifications, Ecuador  has not provided domestic support to its 
agricultural producers since 2006, except for a US$103 million subsidy for the purchase of 
agrichemical inputs through the Socio Siembra programme for the years 2008 and 2009.151  Domestic 
producers of bananas are supported by a minimu m support price to be observed by exporters 
(section (3)(ii)), but it seems that banana exporters sometimes pay less than the statutory price, since 
Ecuador always produces more than it can export.152 
112. Under a Programme for the Renovation of the Automobile Park (RENOVA, 
Chapter IV(5)(i)), imports of 11,425 completely knoc ked down kits of public transport vehicles (e.g. 
vans, trucks, buses, and passenger vehicles) we re allowed duty-free entry between 2007 and 
                                                      
148 CFN online information.  View ed at:  http://www.cfn.fin.ec. 
149 BNF online information, " Tasas de interés activas Periodo Febrero del 2011 ".  Viewed at:  
http://www.bnf.fin.ec/index.php?option=com_ content&view=article&id=156&Itemid=101. 
150 Ministerial Agreement 382, 6 September 2010, Official Register  No. 296, 8 October 2010.  Viewed 
at:  http://www.derechoecuador.com/index.php?op tion=com_content&task=view&id=5884&Itemid=600 
[1 February 2011]. 
151 WTO document G/AG/N/ECU/21/Rev.1, 6 September 2010. 
152 There are 7,334 producers, but only a handful of exporters with oligopsony power 
(Chapter IV(2)(v)).  This often leads to strikes by the banana producers. WT/TPR/S/254 Trade Policy Review 
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end-September 2010.  In addition, domestic car assembly operators committed to sell their vehicles 
destined for public transport of pe rsons and goods at pre-set prices.153  Concessional loans to finance 
the purchase of these vehicles was provided by CFN, at a rate of 9%.  Between 2008 and 2010, US$80.8 million were disbursed to implement th e RENOVA Programme, aimed at eliminating 
vehicles that had been in use for more than 30 years. 
113. Subsidies are allocated through a reduced pric ing policy affecting basic foodstuffs and public 
utilities (section (iii)(b)).  The authorities indicated th at subsidized preferential rates/prices for fuel 
and electricity are applied horizontally, i.e. they are spread across the entire population rather than 
directed to specific activities;  between 2006 and 2010 the cost of fuel price subsidization (selling 
price much lower than purchase/import price) ra nged from US$1.3 billion (2 009) to US$2.1 billion 
(2010).  Electricity tariffs for the lowest-energy r esidential users, and agricultural, industrial, and 
commercial activities have been cross-subsidized pa rtly through higher rates for larger residential 
consumers (e.g. US$0.089-US$0.09 5/kwh depending on the company) (Chapter IV(4)(ii) and 
Table IV.5);  the budgetary costs of subsidized electricity pricing were US$259.3 million in 2009 and 
US$255.8 million in 2010. 
114. The December 2010 Organic Code of Production, Trade and Investment establishes a 
comprehensive framework for the development of  micro, small, and medium-size enterprises 
(MIPYMES).
154  The Code defines MIPYMES and requir es that government procurement practices 
under the SNCP (section (2)(ix)) are used to support their activities.155  Support for MIPYMES is 
aimed, inter alia, at closing the productivity and e xport capacity gaps between companies and sectors, 
and integrating/inserting their growing labour force to the formal labour market.156  It is provided in 
the form of programmes to finance pre-inve stment activities (e.g. diagnostic projects), 
production-related infrastructure, and technical assi stance;  public investment in these programmes 
exceeded US$250 million in 2010.  In 2011, a single register was established for micro and SMEs (RUM), and a National Guarantee Fund is envisaged to facilitate access to credit.
157  No data were 
available on the contribution of MIPYMES in GDP, total employment, or foreign trade. 
115. Under the 2010 Agenda for the Productive Transformation (ATP)158, three new programmes 
were established for enterprises in th e 14 priority sectors (section (i)(c)).159  The EmprendEcuador 
programme is to support 240 enterprises to become  medium-sized firms by providing them with 
start-up capital up to an amount of US$50,000.  The CreEcuador programme is to invest temporarily in activities where investment is much need ed to increase production and production-related 
                                                      
153 MIPRO online information.  Viewed at:  http://www.micip.gov.ec/index.php?option=com_ 
content&view=article&id=265&Itemid=122;  and MIPRO online information, " Convenio por el que se 
establece el programa de re novación del parque automotor ".  Viewed at:  http://www.micip.gov.ec/images/ 
stories/CONVENIO_PROGRAMA_DE_RENOVACION_DEL_PARQUE_AUTOMOTOR.pdf 
[1 February 2011]. 
154 In 2010, medium-sized enterprises employed 2% of the total labour force, small businesses 10%, 
and microenterprises 69%. 
155 Articles 53 to 56, and 62 to 67 of the Organic Code of Production, Trade and Investment, Official 
Register  No. 351, 29 December 2010. 
156 Sectoral Council fo r Production (2010). 
157 Executive Decree No. 757 (Regulation of the structure and institutionalization of productive 
development, investment, and development mechanisms and instruments established by the Organic Code of 
Production, Trade and Investment), 6 May 2011, Official Register  Supplement No. 450, 17 May 2011.  
Executive or Presidential De crees may be viewed at SI GOB online information, " Sistema de Información de 
Decretos Presidenciales ".  Viewed at:  http://www .sigob.gov.ec/decretos/. 
158 Sectoral Council fo r Production (2010). 
159 Sectoral Council fo r Production (2010). Ecuador WT/TPR/S/254 
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infrastructure.  The InnovaEcuador programme is to invest up to US$ 300,000 for the use of 
high-impact technology by firms in the priority sectors. 
116. Innovation policies and technology are seen as the pillars of systemic and international 
competitiveness.160  In recent years, the authorities have tr ipled public investment in research and 
development;  currently at 0.44% of GDP, they intend to raise it to 1% of GDP by 2013.  Only 39% of 
Ecuador's non-oil exports involve manufactures;  under the ATP (Chapter II(2) and (5)), the authorities aim to raise this share to 50% by 2013,  through innovation and productivity improvements. 
(iii) Competition, price, and consumer protection policy 
(a) Competition policy 
117. Under the 2008 Constitution, the State can regulat e, control, and intervene in exchange and 
economic transactions whenever necessary;  it can impose punishments for the exploitation, 
profiteering, monopolization, speculative intermedia tion of goods and services, as well as all forms of 
damage to economic rights and the public and collective good.
161  The State can also set a price policy 
to protect the national production, and establish sanction mechanisms to avoid any monopoly or 
oligopoly practice162, abuse of dominant position, and other practices of unfair competition.  The 2008 
Constitution allows the State to control strategic areas of the economy, such as telecommunications, 
natural resources, transport, hydr ocarbon refining, the radio spectru m, and water, among others, thus 
explicitly excluding these activ ities from any competition rules.163  Moreover, subsequent legislation 
to be passed in the course of 2011 (see below) can  expand the exemptions to areas considered as 
strategic.  The authorities indicated that state- owned enterprises are subject to competition rules. 
118. The Andean Community's legal framework (Decisions 608 and 616 below) and Executive 
Decree 1614-2009 constitute the sole comprehensive set  of rules for implementing competition policy 
at national level.  No changes were made to th e domestic laws that contain general provisions on 
competition policy during the review period.  Alth ough a variety of domestic  laws address general 
competition issues, no single comprehensive comp etition law exists.  The Foreign Trade and 
Investment Law prohibits any practices or arrangements that restrict free competition.  The Law on 
Companies prohibits the establishment of compan ies "that tend towards monopoly of the means of 
subsistence or of a branch of an industry by m eans of trade practices directed towards that end".164  A 
number of sectoral laws also cont ain provisions on competition policy. 
119. No significant national antitrust laws are in pl ace.  The exception to the general lack of 
antitrust regulation is in transport, where the Tr ansit and Ground Transport Law specifically prohibits 
any company from operating a service that transports both passengers and cargo.  In July 2011, a draft 
Law on Control of Market Power was about to be sen t to the National Assembly.  It provides for the 
establishment of an autonomous Superintendency of Control of Market Power, control of 
anti-competitive economic concentration, and prohi bition of and penalties for abuse of dominant 
position, arrangements restricting competition, and un fair competition practices/behaviour.  The law 
                                                      
160 Sectoral Council fo r Production (2010). 
161 Article 335 of the 2008 Constitution.  Viewed at:  http://www.asambleanacional.gov.ec/ 
documentos/constitucion_de_bolsillo.pdf [2 February 2011]. 
162 In addition, Article 304 of the 2008 Constitution stipulates that monopolistic and oligopolistic 
practices, particularly those of the private sector, and othe rs that affect the functioni ng of the markets should be 
avoided. 
163 Article 313 of the 2008 Constitution.  Viewed at:  http://www.asambleanacional.gov.ec/ 
documentos/constitucion_de_bolsillo.pdf [2 February 2011]. 
164 Article 3 of the Codification Law on Companies, Official Register  No. 312, 5 November 1999. WT/TPR/S/254 Trade Policy Review 
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is to be passed during 2011.165  In the meantime, the Andean Community antitrust rules 
(Decision 608, see below) are in force. 
120. Mergers are treated as operational acts between companies.166  The legislation applies equally 
to mergers of companies within th e same industry as to mergers of companies in different industries.  
Prior to a merger, one or both of the companies must approve their dissolution(s) and vote for the 
merger in an extraordinary general meeting of  shareholders.  A judge or the head of the 
Superintendency of Companies must publicly certify a merger.  Little precedent exists for court cases 
in this area.  During the review period, major me rgers took place in state-controlled activities, e.g. 
telecommunications.   
121. In line with relevant constitutional provisions , in November 2008, the authorities intended to 
establish a commission to investigate media oligopolies and monopolies167;  a government-sponsored 
audit of radio-station concessions stated that num erous frequencies had been handed out illegally and 
would be returned to the State.168  No information on progress in this respect (i.e. commission, 
frequencies) was available from the authorities. 
122. Competition policy forms part of the MIPR O portfolio.  Since 27 March 2009 MIPRO's 
Directorate of Competition of the Under-Secretariat of Competition and Consumer Protection has 
been the investigating authority in competition matt ers, and has undertaken some sectoral studies (e.g. 
pharmaceuticals, section (b)).  The authorities indicate d that its staff is well qualified and subject to 
ongoing training by similar foreign agencies (e.g. in the United States, Spain).169  In some cases, 
sectoral legislation provides for the establishment of  regulatory bodies with responsibilities in the area 
of competition policy (e.g. telecommunications).170  Nevertheless, the lack of a specialist body 
                                                      
165 Draft Organic Anti-Monopoly Law.  Viewed  at:  http://www.derechoecuador.com/images/ 
stories/2010-38/20100922_LEY%20ORGANICA%20ANTI%20MONOPOLIO.pdf [2 February 2011]. 
166 Articles 337-344 of the Law of Companies No. 312, November 1999;  and Economist Intelligence 
Unit (2009). 
167 Banana exporters, bankers, media owners, cem ent producers and mobile -telephone companies are 
considered as being in a monopoly or oligopoly positi on (see also section (iv)).  For example, a few large 
companies dominate banana exports, and two companie s dominate the cement market.  Other such cases are 
those of cigarette and beer producers as well as supermarket services chains.  The authorities indicated that they do not share this view (Economist Intelligence Unit, 2009;  El Universo , "LFC asevera que Ecuador vive un 
oligopolio ", 26 September 2005.  Viewed at:  http://w ww.eluniverso.com/2005/09/ 26/0001/9/710620F6DC6 
D448C8F7F5C6482B30404.html [7 June 2011];  El Universo , "LFC dice que hay oligopolio en banca ", 
27 September 2005.  Viewed at:  http://www.eluniverso.com/2005/09/27/0001/9/391B7DC26BAE4B13 
AB7B93E85B01F10D.html [7 June 2011];  El Universo , "La banca alista diálogo formal con el Gobierno ", 
26 March 2007.  Viewed at:  http://www.eluniverso.com/2007/03/26/0001/9/8F3B58F6FDE841FC8B3FFA 6874CBB9C6.html [7 June 2011];  El Universo , "Ecuador quiere regular monopolios ante ola de 
especulación ", 17 July 2007.  Viewed at:  http://www.e luniverso.com/2007/07/17/0001/9/6C7DB44F1FA542 
60A61E4CFEFBC204F1.html [7 June 2011];  El Universo , "Correa recibió propuesta del Conartel ", 
16 October 2007.  Viewed at:  http://www.eluniverso.com/2007/10/16/0001/8/DAF685D050884D9DBE 
B15B737F95EF36.html [7 June 2011];  El Universo , "Correa denuncia oligopolio de cementeras de Suiza y 
Francia en Ecuador ", 3 November 2007.  Viewed at:  h ttp://www.eluniverso.com/2007/11/03/0001/9/ 
D4CDDAFFB2CB4F8CA8173F05C4C1DE1A.html [7 June 2011];  and  ElUniverso , "Gobierno pule proyecto 
de Ley Antimonopolios ", 11 November 2008.  Viewed at:  http://www.eluniverso.com/2008/11/11/0001/8/ 
BCE7CA28DA3645A79D9D39C8CBA71B5F.html [7 June 2011]. 
168 Executive Decree No. 1445, Official Register  No. 479, 2 December 2008;  and Economist 
Intelligence Unit (2009). 
169 Executive Decree No. 1614-2009, 27 March 2009, and MIPRO online information, " Competencia y 
Defensa del Consumidor:  Competencia ".  Viewed at:  http://www.micip.gov.ec/index.php?option=com_ 
content&view=article&id=449&Itemid=129 [22 January 2011]. 
170 WTO document WT/TPR/S/148/Rev.1, 25 July 2005. Ecuador WT/TPR/S/254 
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responsible for implementing the full range of gene ral competition policy provis ions in various laws 
could make it difficult to enforce them.  In 2010, ac quittals were issued for an insurance-related case 
(SOAT), and two price-fixing practices by a domes tic airline (LAN Ecuador);  punitive action was 
taken against the pharmaceuticals company Pfizer  for anti-competitive conduct.  In July 2011, 
18 cases were open or under preliminary investigati on by Ecuador's competition policy authority. 
123. Within the Andean Community framework, Ecua dor is signatory to Decision 608, which 
applies where practices affect competition in more than one member country171;  as from 2009, this 
regulatory framework has also applied to domestic  competition matters.  The Decision seeks notably 
to prevent or correct distortions to competition r esulting from concerted restrictive practices or abuse 
of dominant position, including:  price fixing;  limitations on production, distribution, exports, 
imports, technical development, and investments;  market-sharing arrangements;  the non-supply of 
inputs to companies also competing for the market of the end-product;  and making the conclusion of 
contracts subject to the acceptan ce of additional obligations.  Deci sion 608 does not cover mergers.  
Its implementation is the responsibility of the Gene ral Secretariat of the Andean Community, which 
has the authority to conduct investigations at the request of member countries or affected companies. 
(b) Price policy 
124. The 2008 Constitution provides for a price policy.   The Organic Law on Consumer Protection 
authorizes the President of the Republic, "in excep tional cases", to control temporarily the prices of 
goods and services.  The President may exercise th is authority, inter alia, "when the country's 
economic situation has given rise to an unjustified increase in prices".172  All prices controlled under 
this law must be reviewed every six months or when ever an interested party so requests.  The same 
law requires that, in fixing prices, consideration be given to the effects that the control measure might have on supply. 
125. As from 2007, Ecuador has somewhat intensif ied price-setting actions for certain sensitive 
consumer items and public utilities;  implementin g this policy required the use of subsidies.
173  The 
authorities indicated that in order to cope with th e 2008 rise in world prices of commodities, the prices 
of basic foods like milk, wheat flour, rice, and agri chemicals were fixed temporarily;  there has been 
no price fixing for these items since 2008.  Between  August and October 2008, the Government also 
set maximum prices for noodles, sugar, t una, vegetable oil, oats, and chicken.174  Prior to 2007, 
bananas, coffee, cocoa, fuels, and pharmaceutical s had controlled prices.  Electricity and telephone 
tariffs remain subject to official price controls ( section (ii)(c)).  By contrast, all cooking gas, diesel, 
petrol, and public transport remain subsidized.  Petr ol wholesalers, retailers, and distributors earn a 
maximum combined gross profit of 13%, lowered from 18% in 2003.  Medicine prices have been 
frozen since 2005;  the Ministry of Public Health  sets prices for new medicines as they enter the 
                                                      
171 Andean Community Decision No. 608, 29 March 2005. 
172 Organic Law on Consumer Protection, Article 54.   The authorities defined the term "unjustified 
increase in prices" as an "undue price escalation";  th ey also indicated that lega l and economic analyses are 
undertaken to understand retail price changes during a certain period, in order to determine whether the price of 
the product under investigation is the outcome of a paralle l agreement between companies,  or price fixing due to 
an abuse of dominant position. 
173 Analysts say that such subsidies strain fiscal sustainability and note common abuse (Economist 
Intelligence Unit, 2010). 
174 El Universo , "Gobierno fija precios para doce productos ", 29 August 2008.  Viewed at:  
http://www.elunivers.com/2008/08/29/0 001/9/0E6307C5DC0743F29A E0DAFDCF384F0F.html [7 June 2011];  
El Universo , "Precio oficial causa retiro de productos ", 2 September 2008.  Viewed at:  
http://www.eluniverso.com/2008/09/02/0001/9/FAF2557D994F41F1A4F099416267004F.html [7 June 2011]. WT/TPR/S/254 Trade Policy Review 
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market.175  No comprehensive data were available from the authorities on the operation and annual 
budgetary costs of subsidies discussed in this para graph and used to support Ecuador's price policy 
since 2005. 
126. Although no studies have been conducted on the level of competition in the Ecuadorian 
economy, 16 market studies were prepared in 2009,  mainly by the Consumer Defence Directorate 
(DIDECO);  most of these studies targeted price developments in the domestic market for beef, bread, table salt, sugar, maternity milk, me dicines, and automotive spare parts.
176 
(c) Consumer protection 
127. The Organic Law on Consumer Defence sets b asic consumer rights, vendor's obligations, 
basic product information requirements (e.g. labe lling content), credit facilities rules, judicial 
procedures, and penalties.  The Law prohibits cer tain types of advertis ement and sale practices.177  As 
from 2009, MIPRO's Under-Secretariat of Competition,  particularly DIDECO, has been entrusted 
with consumer protection matters.178  DIDECO provides assistance to consumers online or by free 
phone calls.  Since 2009, DIDECO has dealt with 473 complaints relating to breach of warranty, 
display of retail prices, unsolicited services, billing for excessive consumption, misleading 
advertising, and prohibited practices affecting te lecommunications, electrical appliances, automotive 
products, tourism, finance, health, food, and air transport. 
(iv) State-owned entities 
128. The 2008 Constitution seems to have reversed pa st privatization intentions and put more 
emphasis on state intervention in strategic economic activities.179  The Constitution requires 
state-owned enterprises to be established to ensure the management of strategic sectors, the provision 
of public services, the sustainable use of natural resources or public goods, and development of other 
economic activities.180  It also allows for concessions in strategic sectors to so-called mixed 
companies where the State holds a majority stake,  although these provisions may be sidestepped in 
exceptional situations181, where private sector or "popular a nd solidarity economy" enterprises may be 
                                                      
175 Congress has periodically frozen pharmaceuticals pr ices at the behest of the executive office 
(Economist Intelligence Unit, 2009). 
176 MIPRO online information, " Estudios ".  Viewed at:  http://www.m icip.gov.ec/images/stories/ 
CUADRO_PARA_EM.xls [22 January 2011]. 
177 Amended Organic Law of Consumer Defence, Official Register  No. 544, 9 March 2009.  Viewed at:  
http://www.mipro.gov.ec/images/stories/LEY _ORGANICA_DE_DEFENSA _DEL_CONSUMIDOR.pdf 
[2 February 2011]. 
178 MIPRO online information, " Competencia y Defensa del Consumidor:  Competencia ".  Viewed at:  
http://www.micip.gov.ec/index.php?option=co m_content&view=article&id=449&Itemid=129 
[22 January 2011]. 
179 The authorities indicated that the 2008 Constitution has put more emphasis on state intervention, the 
control and regulation of strategic sectors, and investment in infrastructure projects, due to the lack of private 
sector investment in these areas.  According to the authorities, this lack of investment caused significant delay in 
the development of infrastructure in  strategic sectors, thus affecting the population and the economy's 
competitiveness. 
180 Articles 315 and 316 of the 2008 Constitution.  Viewed at:  http://www.asambleanacional.gov.ec/ 
documentos/constitucion_de_bolsillo.pdf [2 February 2011]. 
181 Article 100 of the December 2010 Organic Code of Production, Trade and Investment stipulates 
that, whenever necessary and appropriat e to meet public interest requirem ents, and in the absence of economic 
or technical capacity, or when demand cannot be satisfied by public or mixed enterprises, the President of the 
Republic may exceptionally authorize the State or its in stitutions to delegate to private sector or "popular 
economy and solidarity" operators, the management of strategic sectors and the provision of public utilities such Ecuador WT/TPR/S/254 
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involved in accordance with the provisions of th e relevant law.  Past privatization efforts 
(Chapter IV(6)(i)) were reflected in the Law on Modernisation of the State and the Economic 
Transformation Law;  these laws were repealed.182 
129. The authorities indicated that in past decades, th ere has been a weakening of the role of the 
State, underpinned by a privatization trend;  th is process distorted the notion of public-good, and 
deepened social inequality.  Under the National Pl an for Good Living (Chapter II(2) and (5)), the 
State is to guarantee the proper functioning of the ma rket, and has a privileged role in the distribution 
and universal provision of a range of goods and pub lic services.  In line with this objective, the 
Government has undertaken a process to recover an d strengthen the State's capabilities in planning, 
regulation, control, and redistribution of wealth.  According to the authorities, the repositioning of the 
State's role in the economy and the strengthening of its institutions set the right conditions for 
economic expansion.  The definition of prioriti es and a development strategy, pave the way for 
changing Ecuador production pattern and for reachi ng the objectives of the "Good Life".  Public 
investment (Chapter I(1), (2), and (3)(ii)) is a key element for Ecuador's development, especially 
investment directed into strategic sectors and pub lic infrastructure, a main requirement for expanding 
the production and qualit y of goods and services. 
130. The Organic Law on Public Enterprises, passed in 2009183, aims, inter alia, at ensuring 
compliance of public enterprises with the objectiv es set by the State, as well as regulating their 
economic, financial, administrative, and managerial autonomy.  It creates the legal framework for the 
State to establish support, subsidies or other tempor ary advantages for the benefit of certain economic 
and social sectors.  Under the Law, public enterp rises are urged to generate profits through their 
economic activities.  To expand, they must have access to advanced technologies and achieve 
productivity goals in all areas of their operations.  P ublic enterprises benefit from the same tax status 
available to the public sector, including income tax exemption, and IVA reimbursement on purchases 
of local or imported goods and services.184  The law also deals with mergers and liquidations of public 
enterprises as well as specific issu es affecting certain public enterprises, e.g. in the electricity and 
telecommunications sectors. 
131. State involvement in the production and trade of  goods and services remains significant and is 
being strengthened (e.g. in telecommunications, natu ral resources) as a result of constitutional and 
legislative changes.185  In July 2011 there were 299 state-owned companies (including 185 municipal 
                                                                                                                                                                     
as electricity, and road, rail, port, ai rport, and other infrastructure.  Article 98 of the Code provides for 
non-discrimination in the electricity sector. 
182 The Law on Modernisation of the State No. 50 ( Official Register  No. 349), 31 December 1993, and 
its regulations issued in March 1994, set the foundations for eliminating public-sector monopolies and for 
privatizing public services.  The Economic Transformation Law No. 4, March 2000, allowed for the sale of 
majority stakes in the state-owned electricity and telecommunications companies to the private sector 
(Economist Intelligence Unit, 2009;  and WTO document WT/TPR/S/148/Rev.1, 25 July 2005). 
183 Organic Law on Public Enterprises, Official Register  Supplement No. 48, 16 October 2009.  Viewed 
at:  http://www.derechoecuador.com/index.php?op tion=com_content&task=view&id=5190&Itemid=553 
[2 February 2011]. 
184 Paragraph 2 of Article 9, Article 54, and Article 73 of the Internal Tax Regime Law;  and parts (d) 
and (e) of Article 125 of the 2010 Organic Code of Production, Trade and Investment. 
185 Some of the largest public enterprises, created since 2008 or resulting from mergers in order to 
operate in key economic sectors are:   the Corporación Nacional Eléctri ca (2008), Corporación Eléctrica del 
Ecuador (March 2009) and Empresa Pública Estr atégica Hidroeléctrica del Litoral (June 2010)  in the energy 
sector;  newspaper El Telégrafo  (2008), tabloid publication Periódico Popular PP , El Verdadero  (August 2010), 
and Empresa Pública Televisión y Radio de Ecuador  (December 2009) in media;  Empresa Pública Nacional de 
Minería (Enami) (December 2009) in mining;  Empres a Pública PETROECUADOR (April 2010) and Empresa WT/TPR/S/254 Trade Policy Review 
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firms), including PETROECUADOR, FLOPEC and TAME  (Chapter IV(4)(i) and 6(v)).  The State 
was also a shareholder in other companies operating in very diverse sectors, including cement, electricity, telecommunications, broadcasting, transp ortation, tourism, financial services, mining, oil 
refining, water and sewage, agricultural products, and miscellaneous manufactures 
(e.g. pharmaceuticals).  Financial transfers to st ate-owned enterprises were budgeted at not less than 
US$63.5 million for 2011.
186  Between 2006 and 2010, exports by state-owned entities rose from 
US$29.6 million to US$9.5 billion;  the main  exporting entities in 2010 were PETROECUADOR, 
TAME, the BNF, and ECUDOS (sugar refinery).  Imports by public entities also increased, from US$249.2 million to US$1.7 billion;  the main  importing entities were PETROECUADOR, FLOPEC, 
and the electricity company CELEC.  No data were  available from the authorities on the contribution 
of state-owned enterprises to GDP or employment. 
132. According to its WTO notification, Ecuador do es not consider that it has maintained any 
state-trading enterprises corresponding to the relevant WTO definitions since 1996.
187  In the context 
of the present review, the authorities reiterated that no state-owned or private companies enjoy exclusive privileges that affect the leve l or direction of imports or exports. 
(v) Intellectual property rights 
133. Since its last Review, Ecuador has not ch anged its international commitments on the 
protection of intellectual property rights (IPRs);  it participates in 9 out of 24 treaties administered by the WIPO.
188  The authorities indicated that Ecuador's status as a developing country and a 
beneficiary/user of intellectual property from de veloped countries provide no reason for undertaking 
additional international commitments in this area. 
134. The 2008 Constitution reinforced protection of IPR (particularly domestic IPR) by prohibiting 
all forms of appropriation of collective knowledge in the areas of science , technology, and ancestral 
knowledge;  it also prohibited the appropriation of  resources containing genetic biodiversity and 
agri-biodiversity.189  No other changes were made to Ecua dor's legal framework on IPRs during the 
review period.190  The Law on Intellectual Property of 1998 a nd its regulations govern intellectual and 
                                                                                                                                                                     
Pública Petroamazonas (April  2010) in hydrocarbons;  Enfarma (Decem ber 2009) in pharmaceuticals;  and the 
CNT (September 2008) and Telecsa (August 2010) in telecommunications. 
186 Ministry of Finance online information, " Presupuesto general del Estado consolidado por item ".  
Viewed at:  http://finanzas.gob.ec/PRESUPUE STO_2010-2014/PRESENTAC ION%20PROFORMA%202011 
%20ASAMBLEA/PGE_2011/PGE_archivos/CUADROS_DE%20_REPORTES/ITEM%20G.pdf 
[2 February 2011]. 
187 WTO documents G/STR/N/2/ECU, G/STR/N/ 3/ECU, G/STR/N/5/EC U, G/STR/N/6/ECU, 
G/STR/N/8/ECU, and G/STR/ N/9/ECU, 1 July 2010. 
188 For more details on Ecuador's participa tion in WIPO treaties, see WTO document 
WT/TPR/S/148/Rev.1, 25 July 2005;  and WIPO online information, "Contracting Parties:  Ecuador".  Viewed at:  http://www.wipo.int/treaties/ en/ShowResults.jsp?country_id=51C &start_year=ANY&end_year=ANY& 
search_what=C&treaty_all=ALL [2 February 2011]. 
189 Article 322 of the 2008 Constitution.  According to the Chamber of Commerce of Quito, the 
constitutional provisions prohibiting the appropriation of an cestral (traditional) knowledge  on biodiversity are in 
conflict with the pharmaceutical and agri cultural development of the country, and cause additional difficulties in 
the negotiation of a free-trad e agreement with the EU ( El Universo , "Propiedad intelectual y patentes son 
"temas pendientes" en acuerdo Ecuador-UE ", 6 April 2011.  Viewed at:  http://www.eluniverso.com/2011/04/ 
06/1/1356/propiedad-intelectual-patentes-son-temas-pendientes-acuerdo-ecuador-ue.html [8 June 2011]. 
190 Ecuador's legal framework consists of the:  Law on Intellectual Property, Official Register  No. 320, 
19 May 1998;  Andean Community Decision No. 345, 21 October 1993, regarding common provisions on the 
protection of the rights of breeders of new plant varieties;  Andean Community Decision No. 351, 17 December 1993, regarding common provisions on co pyright and neighbouring ri ghts;  Andean Community Ecuador WT/TPR/S/254 
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industrial property rights.191  According to the authorities, the minimum IPR protection under the Law 
on Intellectual Property are very extensive comp ared with those required by the WTO TRIPS 
Agreement.  Industrial property protection is also  regulated by Andean Community Decisions.  The 
relevant Andean Community Decisions are now impl emented in all the countries of the sub-region, 
and supersede conflicting national re gulations.  Furthermore, the authorities consider that the Andean 
Community Common Intellectual Property Regime allows the IPR system to be used as a "people development" mechanism, in line with the fl exibilities available under the TRIPS Agreement. 
135. Ecuador has notified and replied to questions on its IPR legislation, but it has not submitted 
any WTO notifications in this area since 2004.  During the review period, Ecuador participated 
actively in the work of the TRIPS Council, in pa rticular the annual review of the 30 August 2003 
Decision on the implementation of paragraph 6 of the Doha Declar ation on the TRIPs Agreement and 
Public Health.
192  It benefited from technical assistance on IPRs provided by WIPO and OECS, 
including on bio-piracy matters.193 
136. In 2009, the Ecuadorian Intellectual Property Institute (IEPI), which handles patent, plant 
breeding, trade mark, and copyright registrations as well as enforcement procedures, eliminated its 
backlog of applications for trade mark registration and reduced the standard time to register a trade 
mark from two years to three months.  All its trade mark and patent archives have been digitized, and 
IEPI is working to fully digitize the application process. 
(a) Industrial property 
Patents 
137. Ecuador's IP law grants patent protection for products or processes for 20 years from the date 
of filing, and non-renewable.  Industrial designs and models have a ten-year term of protection.  In 
infringement cases, the burden of proof lies with the alleged infringer.194 
138. Several patent-related concerns  seem to relate to branded pharmaceuticals.  Ecuador 
continues to approve the commercialization of new dr ugs that are the bioequivalent of patented drugs, 
thereby denying the originator companies eff ective patent protection for innovative drugs.  A 
modification to the Health Code in late 2006 perm its the granting of sanitary registrations without 
regard to whether a medication is patented;  the au thorities clarified that:  a sanitary registration does 
not constitute a guarantee for the marketing of an item, linking sanitary registration and the 
Intellectual Property Office is not a TRIPS commitm ent, and two different branches of law (public 
and private) are involved.  Under the 2000 Law on Production, Import, Marketi ng and Sale of Generic 
Drugs for Human Use and its 2005 Codification, gove rnment entities must buy only generic drugs, 
and drugstore gross profit margins on branded medici nes were lowered to 20%, while the margins for 
                                                                                                                                                                     
Decision No. 391, 2 July 1996, on the common regime for access to gene tic resources;  and Andean Community 
Decision No. 486, 14 September 2000, on the common industrial property regime.  For more details on 
legislation and procedures in this area, see WTO document WT/TPR/S/148/Rev.1, 25 July 2005. 
191 The IP law provides protection for industrial designs and extends protection to trade secrets and 
geographical indications.  Semiconductor chip layouts, plant varieties, and other biotechnology products are also 
protected. 
192 This Decision is a "waiver" removing limitations  on exports under compul sory licence to countries 
that cannot manufacture the pharmaceuticals themselves (WTO online information, "T RIPS and public health".  
Viewed at:  http://www.wto.org/englis h/tratop_e/trips_e/pharmpatent_e.htm#declaration [2 February 2011]). 
193 WTO document IP/C/W/549/Add.5, 4 February 2011. 
194 Article 240 of Andean Community Decision 486, 14 September 2000. WT/TPR/S/254 Trade Policy Review 
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generic drugs were maintained at 25%195;  furthermore national pharmaceutical firms must produce at 
least 20% of generic drugs, and drugstores are require d to devote a certain percentage of shelf space 
to generic pharmaceuticals. 
Compulsory licensing 
139. Article 154 of the IP law and Andean Co mmunity Decision 486 set the conditions for 
granting a compulsory licence.196  The President may submit a patent for compulsory licensing for 
reasons of public interest, emergencies or nati onal security, while recognizing the owner's rights, 
including the right to royalty payments.  The I EPI may authorize compulsory licences in cases that 
have been judicially declared contrary to free co mpetition, particularly those that involve abuse of 
market dominance on the part of a patent holder. 
140. In 2009, two decrees, one of which invoked the relevant provisions of the Article 31 of the 
TRIPS Agreement and the 2001 Doha Declaration on TR IPS and Public Health, allowed for the issue 
of compulsory licences for medicines and agrichemicals.197  The IEPI Resolution 10-04 P-IEPI issued 
on 15 January 2010, provides details of the pr ocess and requirements for obtaining compulsory 
licences for patented pharmaceutical products.  In  April 2010, IEPI Resolution No. 000001 DNPI 
IEPI (Compulsory Licence) specified that the licence is for the manufacture, offering for sale, sale or 
use of the product, and its importation for these pur poses, and that it is intended for non-commercial 
public use (i.e., public hospitals).  In June 2010 , Ecuador informed extensively the WTO TRIPS 
Council of the developments relating to pharmaceuticals.198  Similar regulations are being developed 
for agrichemicals.  These interventions were on th e grounds of national-health interests;  they are 
expected to lead primarily to lower prices for me dicines and agrichemicals, but also increase local 
production.  The authorities indicated that the state-owned National Pharmaceutical Company 
(Enfarma) is among other applicants for compul sory licences.  Only one compulsory licensing 
agreement has been signed (as at December 2010), to  produce ritonavir, an anti-retroviral drug to 
combat the HIV/AIDS virus.  This compulsory  licence was granted on 14 April 2010 to Eskegroup 
SA, the local distributor for Cipla, an Indian ge neric pharmaceutical producer, for the time that was 
left on the patent, i.e. until 30 November 2014.199  Eskegroup will pay royalties to Abbott 
Laboratories (the owner of the patent) for use of the compulsory licence.  The compulsory licence has 
already yielded savings to the Government:  the Mi nistry of Health has made a purchase of lopinavir 
and ritonavir, which could show a US$150,000 discount on the original offer. 
Parallel imports 
141. During the review period Ecuador has not used the system of parallel imports.  Similarly to all 
Andean Community countries, patent protection does not include the right to prevent third parties from trading a patented product after that product has been introduced in the market of any Andean 
Community country by the patent holder or by an other person with his consent or economically 
                                                      
195 Article 4 of the Codification of the Law of Production, Import, Marketing and Sale of Generic 
Drugs for Human Use, 17 November 2005. 
196 For more details on rules and procedures in this area, see WTO document WT/TPR/S/148/Rev.1, 
25 July 2005. 
197 Executive Decree 118, 23 Octobe r 2009;  Executive Decree 181, 21  December 2009.  Executive or 
Presidential Decrees may be viewed  at SIGOB online information, " Sistema de Información de Decretos 
Presidenciales ".  Viewed at:  http://www .sigob.gov.ec/decretos/. 
198 WTO document IP/C/M/63, 4 October 2010. 
199 Intellectual Property Watch online information,  "Ecuador Grants Firs t Compulsory Licence For 
HIV/AIDS Drug", 22 April 2010.  Viewed at:  http ://www.ip-watch.org/weblog/2010/04/22/Ecuador-grants-
first-compulsory-licence-for-hivaids-drug/ [2 February 2010]. Ecuador WT/TPR/S/254 
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connected with him.200  Where the patent protects a biological material capable of being reproduced, 
the patent does not extend to the biological material obtained by reproduction, multiplication or propagation of the material, provided that this w as necessary to use the mate rial in accordance with 
the purposes for which it was introduced in trade, and that the material so obtained is not used for 
multiplication or propagation purposes.   
Trade marks 
142. The IPR law and the Andean Community ru les provide protection for well-known trade 
marks.  Trade mark registration is permitted for re newable ten-year periods and may be renewed from 
six months prior to expiry until six months.  A tr ade mark registration may be cancelled without the 
consent of the trade mark owner if it is not used for a period of three years.  According to the IEPI, at 
present there are fewer registrations of unauthorized copies of well-known trade marks. 
(b) Copyright 
143. Printed and recorded works are protected under the IPR law for the life of the author plus 
70 years, non-renewable.  Computer programs and soft ware are also protected.  Copyright registration 
is not compulsory.  Under the 2010 Organic Law on Higher Education software distribution 
companies must grant preferential tariffs for program s subject to compulsory licensing used by higher 
education institutions for study purposes;  higher ed ucation institutions are required to incorporate the 
free use of software in their programmes.
201 
(c) Enforcement 
144. Ecuador views combating piracy and counterfe iting as a legitimate objective, but saw IPR 
enforcement as a tool for development that shoul d be limited to the commitments under the TRIPS 
Agreement.  It is of the view that more should be  done against bio-piracy in the multilateral trading 
sphere.202 
145. Despite a relatively comprehensive legal framewo rk and IEPI's efforts, enforcement against 
IPRs infringement remains a challenge.203  According to the authorities, this is due to the lack of 
initiative of the vast majority of rights holders in launching legal or administrative actions;  for 
example, no rights holders participated in the IEPI 's 27 film copyright protection actions.  There is 
local trade in pirated audio and video recordings, computer software, and counterfeit activity of brand 
name apparel.  According to a May 2010 study by the BSA and IDC, software piracy in Ecuador was 
estimated at 67% in 2009, up 1 percentage point from 2008204;  this was the sixth lowest piracy rate in 
Latin America, although 4 percentage points higher than the average in the Latin American region.  
The study estimated that the commercial value of  the pirated goods surged from US$35 million to 
US$65 million, equivalent to 1% of the va lue of pirated goods in Latin America. 
146. The national police and the SENAE are responsible for carrying out IPR enforcement orders, 
but it has sometimes been difficult to have court orders enforced.  Between 2007 and April 2011, 
more than 1,000 border enforcement operations took place;  most were undertaken ex officio in the 
                                                      
200 Article 54 of the Andean Decision 486. 
201 Article 32 of the Organic Law on Higher Education, Official Register  Supplement Nº 298, 
12 October 2010. 
202 WTO document IP/C/M/63, 4 October 2010. 
203 Ecuador has been on the Special 301 Watch Li st of the Office of the United States Trade 
Representative since 2003 (USTR 2010;  and U.S. Commercial  Service, 2010). 
204 BSA/IDC (2010). WT/TPR/S/254 Trade Policy Review 
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absence of the rights holders concerned (due to thei r apparent lack of interest), thus complicating 
IEPI's and SENAE's task in determining the IP R infringement.  Most border enforcement action 
concerns copyright infringement;  for example, in 2010, out of a total of 189 cases 104 were copyright 
violations.  IEPI may take enforcement actions th rough an administrative process that can result in 
sanctions and/or interception of counterfeit goods by SENAE.  IEPI administrative actions have 
averaged 50 cases per year since 2005;  most were initiated upon request of the rights holders.  Since 
2010, the IEPI has taken ex officio action to iden tify and fight major market ing channels for illegal 
copies of audiovisual products.  Following a joint raid with the SRI, 165 shops selling counterfeit or 
pirated goods were closed in mid-2011. 
147. Under its Strategic Plan against Piracy, the I EPI has taken action to reduce copyright piracy 
since 2009.  The plan includes public-awareness-rais ing campaigns, and dissemination of information 
on IPRs issues to public- and private-sector entities;  its activities include partic ipation in various fairs 
and events.  The Ecuador Original Campaign is, inter alia, aimed at raising awareness of the effects of 
purchasing illegally produced goods.  The Ecuador Cr eates Campaign is directed at all stakeholders, 
and emphasizes the citizen's role in protecting IPRs as an element of economic and social 
development of the country.  Furthermore, the I EPI has provided copyright-related training adjusted 
to the needs of government entities such as the Judi cial Police, the Attorney General's Office, and 
SENAE.  As a result of increased awareness, c opyright registrations rose from 2,473 in 2009 to 
3,508 in 2010;  similarly, requests for copyrigh t-related action increased progressively from 6 in 2005 
to 42 in 2010. 
148. The courts are the usual forum for settling disp utes, despite the existence of the Intellectual 
Property Committee.  This court, specifically design ed for IPRs disputes, seeks to reach an agreement 
rather than to send the case to th e civil/criminal courts.  Arbitration organizations, such as those set up 
by the Chamber of Commerce, also handle cases.  Penalties and fines are particularly low;  the 
authorities indicated that they are being revised.  Violators of rights may face prison terms of three 
months to three years, and fines from US$1,314 to  US$13,145;  for illegal use of commercial name 
penalties are prison terms of one month to two y ears, and fines of US$657 to US$6,572.  Between 
2005 and 2010, fines imposed for copyrights viola tions totalled US$53,330;  the proceeds were used 
to finance IEPI's activities.