WORLD TRADE  
ORGANIZATION   
G/SCM/Q2/COL/12 
28 September 2011  
 
(11-4718) 
Committee on Subsidies and Countervailing Measures Original:   Spanish 
  
 
SUBSIDIES 
 
Replies to the Questions Posed by the UNITED STATES
1  
Regarding the New and Full Notification of COLOMBIA2 
 
 
 The following communication, dated 26 September 2011, is being circulated at the request of 
the delegation of Colombia.  
_______________ 
 
  In this document, Colombia provides its replie s to the questions posed by the United States 
regarding the new and full notification submitted pursuant to Article XVI:1 of the GATT 1994 and 
Article 25 of the Agreement on Subsid ies and Countervailing Measures (ASCM) 
(G/SCM/N/186/COL-G/SCM/N/220/COL). 
 
 Colombia confirms the terms of its notification in the sense that during the periods 2007-2009 and 2009-2011 it did not grant any subsidies and, c onsequently, no measures are in force within its 
territory that need to be notified under the above-m entioned provisions.  On this understanding, it has 
replied to the questions posed by the United St ates in the order in which they were submitted. 
 
Questions posed by the United States 
  Publicly available information indicates th at Colombia administ ers several support 
programmes that may meet the notification requirements set forth under Article 25 of the SCM Agreement.  Please explain why the programm es below should not be notified or provide 
the information required under Article 25 of the SCM Agreement.  
1. Tariff Concessions 
  Page 37, paragraph 62 of the Secretariat's  Report for Colombia's 2006 Trade Policy 
Review (TPR), WT/TPR/S/172 (18 October 2006), states that Colombia operates several special 
customs regimes that provide tariff concession s to importers under "certain conditions."  For 
example, tariff exemptions are provided to the hydrocarbons and mining industries. 
 
Answer 
  Colombia did not notify these measures as they do not constitute subsidies under the terms of 
the ASCM.  On the contrary, they simply involve offering tariff concessions to importers according to 
the type of product or activity concerned, in a non-discriminatory manner and without subjecting them 
to export commitments. 
                                                      
1 G/SCM/Q2/COL/11. 
2 G/SCM/N/186/COL-G/SCM/N/220/COL. G/SCM/Q2/COL/12 
Page 2  
 
   
 Colombia emphasizes, in particular, that these tariff concessions are granted in exercise of its 
right, as a WTO Member, to determine its tariff and trade policy.  We recall that in India – Additional 
Import Duties  the Appellate Body stated that, " Tariffs are legitimate instruments to accomplish 
certain trade policy or other objectives such as to  generate fiscal revenue.  Indeed, under the 
GATT 1994, they are the preferred trade policy inst rument, whereas quantitative restrictions are in 
principle prohibited.  Irrespective of the und erlying objective, tariffs are permissible under 
Article II:1(b) so long as they do not exceed a Member's bound rates " (para. 159). 
  Lastly, it should be recalled that measures of  this sort are a customary international 
community practice recommended by institutions such  as the World Customs Organization and are, to 
a large extent, reflected in international treaties as practices for simplifying and harmonizing customs 
procedures (Protocol of Amendment to th e Kyoto Convention, as revised in 1999). 
 
2. Special Economic Export Zones (ZEEE) 
  Page 69, paragraph 208 of the Secretariat's Report for Colombia's 2006 
TPR, WT/TPR/S/172 (18 October 2006), states that  to be eligible for the ZEEE programme, 
80 per cent of sales must be destined for foreign  markets.  Please explain how this programme 
conforms to Colombia's obligations under Article 3 of the SCM Agreement. 
 Answer 
 
 The ZEEE programme was not notified as it does not constitute a subsidy under the terms set 
forth in the ASCM.  This is because Article 13 of Law No. 1004 of 2005 repealed section A, 
subparagraph 1, of Article 16 of  Law No. 677 of 2001, which established a tax incentive for ZEEEs 
consisting of the exemption from income tax of the proportionate share of revenue obtained from 
foreign market sales.  As a result of this change in  the law, the export-relate d tax benefits provided for 
ZEEEs were repealed.  
3. High Export Users (ALTEX) 
 
 Page 70, paragraph 217 of the Secretariat's Report for Colombia's 2006 TPR, WT/TPR/S/172 (18 October 2006), states th at VAT exemptions were provided, for any 
enterprise classified as a "high export user, " on its imports of industrial machinery not 
produced in Colombia and intended for processi ng raw materials.  Please explain how this 
programme conforms to Colombia's obligations under Article 3 of the SCM Agreement. 
 
Answer 
  The ALTEX programme was not notified as it doe s not constitute a subsidy under the terms 
set forth in the ASCM insofar as it does not prov ide any benefit to ALTEX.  This is because 
Article 428 of Colombia's Tax Code establishes, as it does for ALTEX, exemptions from the Sales 
Tax on imports for importers of industrial machiner y, without subjecting them to ALTEX status or 
any other condition relating to the status or activity of an exporter.  
4. Bancoldex 
 
 Page 71, paragraphs 223-224 of the S ecretariat's Report for Colombia's 2006 
TPR, WT/TPR/S/172 (18 October 2006), state that Bancoldex provides various types of financing services for enterprises in the export chain, including supplier post-shipment credit.  
Please explain how this programme conforms to Colombia's obligations under Article 3 of the SCM Agreement.  G/SCM/Q2/COL/12 
 Page 3 
 
 
   
Answer 
  The programmes and credit lines granted by B ANCOLDEX were not notified as they do not 
constitute subsidies insofar as they do not involve  a financial contribution providing a benefit under 
the terms set forth in the ASCM.  BANCOLDE X programmes and credit lines apply unsubsidized 
market rates and the government does not cover, in  full or in part, the costs incurred in obtaining 
them.  
__________