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  IV. TRADE POLICIES BY SECTOR 
(1) OVERVIEW  
1. Because of its contribution to employment and the generation of foreign currency,  
Colombia's agricultural sector is of key importa nce for the country's economic development.  
Agricultural policy currently focuses on boosting devel opment in rural areas, making agriculture more 
competitive and diversifying markets.  Colombia is  accordingly striving to make further progress in 
negotiating and implementing trade agreements.  Althoug h this is not declared explicitly, Colombia's 
agricultural policy also seeks to contribute toward s food security.  The agricultural sector benefits 
from domestic support programmes, access to loan s on preferential terms and debt refinancing 
programmes, subsidies for agricultural insurance and m itigation of exchange rate risks.  In addition, 
Colombia uses other mechanisms to enable producers to withstand fluctuations in global prices, for 
example, price stabilization funds. 
2. The aim of Colombia's mining policy is to reor ganize the institutional structure of the mining 
and energy sector, ensure adequate supplies of  hydrocarbons and electricity, and generate the 
resources needed to boost Colombia's development.  It gives national treatment for foreign investment 
in the mining and hydrocarbons sectors.  To obtain a contract for an exploration concession, foreign 
companies must set up a subsidiary domiciled in Colombia.  The hydrocarbons sector is a leading 
generator of foreign currency and is open to private investment, although the State-owned company 
ECOPETROL S.A. continues to play a key role in  extraction, refining, import, distribution and 
transport of petroleum and its by-products.  Colomb ia still subsidizes the sale of fuel on the domestic 
market.  Although it has been revised, this s ubsidy still represents a heavy fiscal burden. 
3. The electricity sector is also open to private participation, which accounts for 45 per cent of 
total generation.  During the period under revi ew, Colombia introduced the wholesale electricity 
market, adopting measures to deal with potential shortages. 
4. The manufacturing sector can also benefit from a number of export support programmes.  For 
certain manufactured goods, Colombia still uses referen ce prices as parameters to verify their declared 
value during customs inspection. 
5. In the financial sector, there are no legal limita tions on foreign capital holdings in commercial 
banks or insurance companies.  A special authoriza tion is required before insurance can be taken out 
with companies domiciled abroad.  The financia l institutions have main tained sound prudential 
indicators following the reforms introduced into the regulatory framework and the system of 
(prudential) supervision.  Colombia emerged su ccessfully from the 2008-2009 international financial 
crisis by taking measures such as postponement of th e distribution of profits and building up reserves 
to deal with any deterioration in companies' financia l situations, together with closer supervision.  It 
also made use of the countercyclical component provided in its regulations to respond to changes in the risk level.  Interest rates are generally dete rmined by the market, but are based on directives from 
the Financial Supervisory Authority (SFC). 
6. There are no restrictions on Colombian or foreign private capital holdings in the supply of 
telecommunications services.  Nevertheless, foreign firms must set up a subsidiary in Colombia in order to operate on the domestic market.  In 2009, Colombia introduced a new law to unify the legal 
framework for fixed and mobile telephony.  This ne w law is intended to promote investment in the 
sector and established a general authorization regime (and not authorization by service), together with 
a transitional period for phasing out the subsidies regi me for the low-income population.  Suppliers of WT/TPR/S/265 Trade Policy Review 
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  telecommunications services are free to fix their rates, but the Communications Regulatory 
Commission (CRC) has the right to intervene if th ere is insufficient competition or the quality or 
supply of services is not acceptable.  Some rates ar e monitored, however, and there is currently a 
ceiling for calls from fixed to mobile telephones. 
7. The goal of the policy on (scheduled) domestic transport of passengers is to make market 
access easier and so promote competition.  Colo mbia does, however, impose a maximum number of 
operators on each route, which depends on the number of passengers carried annually.  Airports are 
managed under a concession regime or by the departments/municipa lities where they are located.  
Cabotage air services are restricted to Colombian airc raft.  There is also a nationality requirement:  
90 per cent of the personnel employed by Colombia n airlines and agencies/branch offices of foreign 
airlines established in Colombia must be Colomb ian nationals.  This restriction applies under 
conditions of reciprocity. 
8. Access to the maritime transport market is b ased on the principle of reciprocity.  Nationality 
requirements exist for the crews of Colombian-regi stered vessels.  The captain, officers and 80 per 
cent of the crew on Colombian-registered vessels mu st be Colombian nationals.  Cabotage maritime 
transport is restricted to Colomb ian-registered vessels, although an authorization may be given to 
charter/lease a foreign-registered ship if no Colomb ian ships are available or suitable.  International 
and cabotage shipping companies set their rates a nd freight charges, but these must be communicated 
to the authorities, which may revise or reject th em.  The construction, maintenance and management 
of public and private ports are the responsibilit y of port management companies under a 20-year 
concession regime. 
9. There are registration requirements for the suppl y of certain types of tourism services.  
Suppliers of specified tourism services must pay a parafiscal contribution to promote tourism, and this has applied to shopping centres as well since 2011.  Colombian or foreign investors are eligible for a 
series of incentives, mainly for the rehabilitation or  building of hotels and the supply of ecotourism 
services. 
(2) A
GRICULTURE  
10. Colombia's agricultural sector is of prime im portance for the country's economic development 
and is deemed to be a strategic sector, both b ecause of its contribution to GDP and because it 
generates jobs and foreign currency.  Moreover, it has enormous growth potential as a large area of 
agricultural land is not yet farmed. 
11. In the late 1990s, the agricultural, forestry a nd fisheries sector suffered a profound crisis, 
following which its growth fell back compared to the rest of the economy.  Over the past decade, the 
sector grew by an average of 2 per cent annually co mpared to 4 per cent for the economy as a whole.  
After recovering during the period 2006-2007, from 2008 onwards it again stagnated, because of the 
international crisis according to  the authorities, before rebounding from 2010 onwards.  Despite this 
erratic growth, the agricultural sector accounted for 6.5 per cent of GDP in 2011 and is the 
third largest source of jobs in the economy:  some 18 per cent of the labour force works in agriculture, 
coming after trade (25.9 per cent) and local service s (19.6 per cent).  Agricultural exports accounted 
for 12.4 per cent of total exports (Table IV.1). Colombia WT/TPR/S/265 
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  Table IV.1 
Principal indicators for agriculture, 2005-2011  
 2005 2006 2007 2008 2009a 2010a 2011a 
Contribution to current GDP (%) 7.7 7.4 7.1 6.9 6.9 6.5 6.4 
Real growth rate (%) 2.8 2.4 3.9 -0.4 -0.7 1.0 2.2 
Employment (percentage of total employment)b 21.0 19.0 18.3 18.1 18.7 18.6 18.1 
Share of agricultural value added (%)        
Coffee products 11.4 11.4 10.9 10.1 9.2 11.7 11.6 
Other agricultural products  45.3 46.3 46.6 47.5 49.4 48.7 49.9 
Live animals and animal products 37.7 36.6 36.9 37.1 35.9 34.4 33.5 
Forestry, logging and related activ ities 5.6 5.7 5.6 5.4 5.4 5.2 5.0 
Exportsc        
Agricultural products (US$ millions) 4,599  4,922 5,858 6,693 5,971 5,757 7,059 
Agricultural products (percentage of exports) 21.7 20.2 19.5 17.8 18.2 14.5 12.4 
Agricultural products (rate of growth, %) 28.8 7.0 19.0 14.3 -10.8 -3.6 22.6 
Most important products (percentage of exports)c        
Coffee, not roasted, whether or not decaffeinated;  coffee husks 
and skins;  coffee extract, e ssences and concentrates and 
preparations based on such products or coffee-based 7.7 6.7 6.3 5.6 5.4 5.4 5.1 
Cut flowers and foliage 4.3 4.0 3.7 2.9 3.2 3.1 2.2 
Bananas (including plantains), fresh or dried 2.4 2.2 1.9 1.7 2.5 1.9 1.4 
Beet or cane sugar, not refined, in solid form 1.3 1.5 0.9 0.4 1.2 1.1 1.1 
Palm oil or fractions thereof 0.4 0.4 0.7 0.9 0.4 0.2 0.3 
Food products, n.e.s. 0.4 0.3 0.3 0.3 0.3 0.2 0.1 
Fish, frozen (excluding fillets and min ced fish) 0.3 0.2 0. 2 0.3 0.3 0.2 0.1 
Imports        
Agricultural products (US$ millions) 2,199  2,704 3,470 4,542 3,774 4,486 5,718 
Agricultural products (percentage of total imports) 10.4 10.3 10.5 11.5 11.5 11.0 10.5 
Agricultural products (rate of growth, %) 2.3 23.0 28.4 30.9 -16.9 18.9 27.5 
Agricultural trade bala nce (US$ millions) 2,400 2,218 2,388 2,151  2,197 1, 271 1,341 
a  Provisional data. 
b  Population employed. 
c  Includes re-exports for 2009 and 2010. 
Source :   National Administrative De partment of Statistics (DANE ), Comtrade database (SIT C, Rev.3) and information 
provided by the Colombian authorities.  
12. The recovery in the agricultural sector mainly to ok the form of an in crease in the area under 
cultivation and in the production of non-traditional products, which have become very important 
commercially, for example, fruit, special coffees, biof uels (African palm) and vegetables.  Sustainable 
growth will only be possible, however, if the bottl enecks in this sector can be overcome.  These 
include the following:  the low level of competitiven ess and output in some branches, the poor state of 
the rural infrastructure, inefficient use of land and water, the absence of mechanisms to market 
agricultural products, and lack of markets.1 
13. The reason for the high cost of agricultural pr oduction is the lack of flexibility in the cost 
structure, making it more vulnerable to the prices of inputs and products and fl uctuations in exchange 
rates.  The rise in the peso in  recent years has, however, lowered the cost of importing some 
inputs - agricultural chemicals, seeds and machiner y - but has not been translated directly into 
producer prices, while at the same time the higher cost of labour has mainly affected export crops 
such as coffee, flowers, sugar cane and palm oil, which are labour-intensive. 
14. The low level of competitiveness and output can ma inly be attributed to inefficient use of 
production factors, notably land and water, the low level of innovation in production systems and lack 
of investment in Colombian agriculture.  There ar e a number of factors which discourage investment, 
                                                      
1 National Department of Planning (2010b). WT/TPR/S/265 Trade Policy Review 
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  for example:  the absence of any tradition of managing the specific climate and market risks 
associated with agricultural activities;   limited access to and use of  information;  and problems in 
obtaining loans, particularly for small-scale produ cers.  Financial deepening in agriculture, 10.2 per 
cent in 2008, continues to be much lower than th at for the economy as a whole, which was 32.2 per 
cent that year.2 
15. A salient feature of Colombia's agricultural ma rkets is the lack of diversification and of 
competitiveness, both domestically and abroad.  Around  90 per cent of agricultural exports are made 
up of just seven products (coffee, flowers, fruit, bovine meat, sugar, processed foods, oils and fats).  
Although Colombia does not have an y problems regarding the availability of food as a whole, 
inasmuch as 90 per cent of domestic demand is met by domestic production, there are problems in 
terms of access to food for the low-income population, a situation that is to a large extent related to 
problems of regional distribution, transport and marketing.3 
16. The objective of the current national policy, set out in the 2010-2014 National Development 
Plan, is to make the economy more competitive.  The agricultural sector is viewed as one of the 
five sectors with high growth potential that will  catalyze the country's economic development.  
Agricultural policy, drawn up and implemented by the Ministry of Agriculture and Rural 
Development (MADR)4, currently focuses on developing mechanis ms to generate jobs and income in 
rural areas, making agricultural production more  competitive, equitable regional development, 
agricultural risk management, and the expansion an d diversification of domestic and foreign markets.5  
To achieve this, Colombia is seeking to make fu rther progress in negotiating and implementing trade 
agreements.  As an essential adjunct to the policy to expand and diversif y domestic and foreign 
markets, Colombia plans to continue with the pro cess of consolidating the agricultural health and food 
safety policy implemented by the Colombian Agricultural Institute (ICA). 
17. Many of the trade measures and support prog rammes for the agricultural sector are also 
intended to contribute towards food security, although this is not an explicit objective of Colombia's 
agricultural policy.  These measure s and programmes include export quotas and price controls;  
likewise, special programmes such as the 2008-2011 Coffee Policy Agreement, which has a 
component with programmes for sowing yellow mai ze and beans in coffee-growing areas, seek to 
improve food security in these areas and in the country as a whole.6 
(i) Measures at the border 
18. Tariff protection in the agricultural sector (WTO  definition) is much higher than in other 
sectors.  The gap in comparison with the industr ial sector has widened following the temporary 
reduction of tariffs on a wide ra nge of manufactures.  In 2010, the average tariff on agricultural 
products (WTO definition) was 18.3 per cent (16.5 pe r cent in 2006), higher than the protection given 
to non-agricultural products.  Although tariff protecti on for agricultural products fell to 14.5 per cent 
in August 2011, the decrease is much less than in  the case of non-agricultural products, on which the 
                                                      
2 National Department of Planning (2010b). 
3 National Department of Planning (2010b). 
4 The primary responsibility of MADR, created by Law No. 25 of 1913, is to draw up agricultural, 
fisheries and rural development policies, plans and pr ogrammes, in accordance with Articles 64, 65 and 66 of 
Colombia's Political Constitution (Decree No. 967 of 2001). 
5 MADR (2010a). 
6 Online information from MADR, " Políticas y Programas Misionales:  Apoyos Económicos y 
Financiamiento:  Caficultores ".  Viewed at:  http://www. minagr icultura.gov.co/07presupuesto/07a_ 
ein_caficul.aspx. Colombia WT/TPR/S/265 
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  average rate of applied MFN duties fell from 11. 3 per cent in 2006 to 7.2 per cent in April 2011 and 
4.9 per cent in August of the same year.  On aver age, the highest rates by WTO category applied to 
agricultural products, specifically animals and products of animal origin and dairy produce, at rates of 
25.2 and 55.5 per cent, respectively, in 2011 (fro m August onwards), and 32.4 and 58.9 per cent in 
2010, an increase in comparison with the rates applie d in 2006, which were 23.6 and 21.3 per cent, 
respectively.  The maximum tariff in 2010 was 11 9.1 per cent, which applied to seven lines in 
HS 02.07 (poultry meat and edible offal), while  the maximum rate in 2011 (from August onwards) 
was 98 per cent and applied to 14 lines in HS 04.02 (milk and cream, concentrated). 
19. Colombia still applies the A ndean Price Band System (SAFP) to agricultural products.  
In 2010, it applied to 163 tariff lines (0.9 per cent of  all tariff headings).  In general, the products 
subject to the price band are:  rice, barley, yello w maize, white maize, yellow soya beans, wheat, 
unrefined soya bean oil, unrefined palm oil, white sugar, raw sugar,  whole milk, chicken cuts and pig 
meat (Box IV.1).  In 2011, the SAFP applied to 141 tariff lines, but was suspended for rice, white 
maize and whole milk. 
Box IV.1:  Andean Price Band System (SAFP) for agricultural products 
By Decision No. 371 of November 1994, the Andean Community (CAN) established the SAFP for agricultural 
products with the aim of stabilizing import costs for a specific group of agricultura l products characterized by 
highly unstable international prices.  
The purpose of the SAFP is to exert a stabilizing effect by curbing the volatility of international prices for 
imported products, mitigating fluctuations in international prices.  The system operates by establishing a floor 
price (or lower band) and a ceiling price (or higher band).  When the international price is below the floor 
price, a special import duty is imposed, but when total im port costs exceed the higher limit, a tariff reduction is 
granted.  
The price band system covers a tota l of 154 products:  13 "marker" 
products and 141 related products.  The 
marker products are those "whose inte rnational prices are used to calcula te the bands" (Decision No. 371, 
Article 4).  Related products are those related to the production chain or substitute products similar to the 
marker product. 
 
The average c.i.f. prices r ecorded over the previous two weeks on the international ma rket are used to calculate 
the reference price that will determin e the band.  Reference prices rema in in effect for a fortnight and 
"constitute the taxable base for the application of import duties" (Decision No. 371, Article 9).  They are 
published by the CAN Secretariat.  The fortnightly report may be viewed on the following websites: 
www.dian.gov.co, www.agronet.gov.co or www.comunidadandina.org.  
The rules for calculating the reductions or additional duties are linked to the Common External Tariff (CET) 
and to changes in international prices in comparison with the floor and ceiling prices.  As provided by Article 11 of Decision No. 371, if th e reference price is lower than the c.i. f. floor price, an additional variable 
duty is imposed corresponding to the difference between the two, multiplied by one plus the CET for the 
marker product.  Similar treatment applies when the international price is above the ceiling price, but in that case, the tariff is reduced.  If the international price fa lls between the two limits (floor and ceiling prices), only 
the corresponding CET applies. 
 Source :  Directorate of Taxes and National Customs (DIAN) and CAN.  
20. During the period under review, Colombia notifie d the products subject to tariff quotas during 
the period 2006-2010 to the WTO.  These included:  meat, dairy produce, grains and cereals, soya WT/TPR/S/265 Trade Policy Review 
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  beans, oils and fats, and cotton.7  Colombia does not make use of these quotas as the applied tariff is 
below the in-quota tariff.  The system for allo cating quotas has not changed since 2006, with the 
exception of quotas for whey (HS subheading 0404101000) (Table IV.2). 
Table IV.2 
Agricultural tariff quotas 
Product HS heading Description of  import arrangement applicable 
Yellow maize 
White maize 
Other rice in the husk 
Husked rice 
Other semi-milled or wholly milled rice Broken rice Other sorghum 
Other soya beans 
Cotton 1005.90.11.00 
1005.90.12.00 
1006.10.90.00 
1006.20.00.00 
1006.30.00.90 1006.40.00.00 1007.00.90.00 
1201.00.90.00 
5201 The import quota is allocated on a competitive basis 
amongst participants registered with MADR.  Quota 
allocation is by means of public auctions in which 
importers take part through the bid registration system.
Meat of bovine animals, fresh 
Meat of bovine animals, frozen 
Meat and edible meat offal 0201 
0202 
0210 The import quota is allocated amongst importers who 
participated in previous auc tions, with a share reserved 
for new importers determin ed in accordance with the 
market situation. 
Cuts and offal, fresh or chilled 
Cuts of fowls of the species Gallus domesticus , frozen 
Cuts and offal, fresh or chilled 
Cuts of turkeys, frozen Cuts of ducks, geese or guinea fowl, fresh or chilled 
Cuts of ducks, geese or guinea fowl, frozen 0207.13 
0207.14 
0207.26 
0207.27 0207.35 
0207.36 An import licence is required from the Import 
Committee of the Ministry of Trade, Industry and 
Tourism (MCIT), the criterion for approval being 
protection of the domestic industry. 
 
Whey, partially or fully demineralized 0404.10.10.00 The import quota is allocated to applicants on a 
pro-rata  basis in accordance with their share of the 
total requests submitted to MADR. 
Source :  WTO documents G/AG/N/COL/35 of 9 June 2006 and G/AG/N/COL/35/Add.1 of 13 January 2011. 
21. In 2010-2011, Colombia only opened quotas for five products (0.1 per cent of all tariff 
headings), of which four were included in the government mechanism for administering agricultural 
quotas (MAC), which was set up in 2004 for imports  from countries not members of CAN and applies 
to the following products:  rice, yellow maize, white maize, soya beans, sorghum and cotton.8  During 
the period under review, Colombia imposed quotas under the MAC for yellow maize, white maize, 
soya beans and cotton lint.  Each year, MADR issu es a decree listing the products subject to quotas, 
the volume and the in-quota tariff.9  The quotas opened under the MAC are allocated through a public 
auction and using the MAC minimizes government inte rvention in the allocation of quotas.  Colombia 
uses the MAC to guarantee domestic supplies of certain products.10  If the importers taking part in the 
auctions also buy up a percentage of domestic pr oduction, they are eligible for a reduction in the 
in-quota tariff. 
22. The majority of products subject to tariff quotas are also subject to the SAFP;  of the 
163 tariff lines subject to the price band, 157 were also subject to tariff quotas.  Likewise, of the 
four products for which Colombia opened a tariff quota under the MAC in 2010 and 2011, 
three (yellow hard maize, white hard maize and soya beans) were also subject to the SAFP. 
                                                      
7 WTO documents G/AG/N/COL/37 of 9 October 2009, G/AG/N/COL/41 of 13 January 2011 and 
G/AG/N/COL/47 of 25 November 2011. 
8 Decree No. 430 of 2004. 
9 Decrees No. 2.333 of 2008, No. 4.676, No. 760 and No. 4.551 of 2009, No. 140, No. 2.770 and 
No. 4.662 of 2010 and No. 4.900 of 2011. 
10 Decrees No. 430 of 2004 and No. 4.900 of 2011. Colombia WT/TPR/S/265 
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  23. Colombia has reserved the right to apply the special safeguard clause in the WTO Agreement 
on Agriculture to 57 four-digit tariff headings, but has not yet used it. 
24. Some non-tariff measures also apply to the im port of agricultural products, for example, a 
series of import requirements, including licensing, authorization, import registration, and plant and 
animal health permits (Chapter III). 
25. In 2011, Colombia temporarily restricted the e xport of certain types of live cattle in order to 
restock herds and so increase the exportabl e supply of meat and meat products.11 
(ii) Domestic support and subsidies 
26. Colombia notified the WTO Committee on Agricultu re that it did not grant any subsidies for 
agricultural exports between 2006 and 2010.12  In 2010, it notified some agricultural support 
programmes aimed at boosting the sector's developm ent, as well as access to  loans, agricultural 
insurance and control and sanitary management of pests and diseases.  These measures are covered by 
Law No. 101 of 1993, which allows the Governme nt, when circumstances so warrant, to grant 
incentives directly related to production and the volumes produced to agricultural producers and 
fishermen, on a temporary and selective basis. 
27. Until 2010, when the me asure was suspended13, some agricultural products exported (for 
example, flowers, foliage, plantains, bananas, pa lm oil), and fisheries and aquaculture products (for 
example, shrimp, tilapia and trout) benefited from a sanitary incentive intended to support the control 
and sanitary management of pests and diseases.14  The support consisted of a payment per hectare, 
provided that the ICA received proof of proper ph ytosanitary management and the maintenance of 
jobs in the beneficiary sectors and that a specified  volume was exported, which varied according to 
the product.  Each year, MADR issued a resoluti on showing the total amount of the subsidy for each 
heading and the requirements, whether jobs or forei gn currency to be generated, in order to receive 
the subsidy.15  For example, for flowers and foliage, in 2010 MADR set aside Col$50 billion (around 
US$26.3 million) for this incentive, for which produc ers exporting US$1,000 or more of flowers in 
2009 and managing to maintain at least 80 per cent of the certified jobs over the period January to 
June 2009 were eligible.  Enterp rises whose personnel decreased by over 20 per cent lost the whole 
amount of the incentive.16 
28. Colombia makes use of price stabilization mechanis ms in order to deal with fluctuations in 
world prices for certain agricultural products.  Th e Price Stabilization Funds (FEPs), created by 
Law No. 101 of 1993, are intended to guarantee producers' incomes, regulate domestic production, 
and prevent price speculation, in addition to prom oting agricultural exports.  Currently, there are FEPs 
for five products:  cotton;  sugar;  cocoa;  meat , milk and their by-products;  and palm kernel oil.17  
                                                      
11 Decrees No. 2.000, No. 3.046 and No. 4.025 of 2011. 
12 WTO documents G/AG/N/COL/39 of 11 February 2010, G/AG/N/COL/39/Corr.1 of 9 March 2010, 
G/AG/N/COL/44 of 13 January 2011 and G/AG/N/COL/45 of 25 November 2011. 
13 Information provided by the authorities. 
14 Resolutions No. 116 of 2008 and No. 254 of 2009, Law No. 101 of 1993, Resolution No. 169 
of 2007 and other rules. 
15 Law No. 101 of 1993, resolutions and other rules. 
16 MADR (2010b). 
17 The FEP for cotton, which is managed by th e Colombian Cotton Confederation (CONALGODON);  
the FEP for centrifugal sugars, molasses obtained by extracting or refining sugar, and sugar syrups, managed by 
the Colombian Sugar Cane Growers' Association (ASOCAÑA);  the FEP for cocoa, managed by the National 
Federation of Cocoa Growers (FEDECACAO);  the FEP for promoting the export of meat, milk and their WT/TPR/S/265 Trade Policy Review 
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  The Funds operate by estimating a price for each product based, inter alia, on international prices in 
the relevant markets.  Depending on the estimated price, producers or exporters make "transfers" to 
the Fund or are compensated by the Fund, according to the price difference.  The Funds act as a savings and insurance scheme. 
29. Colombia has a National Coffee Fund which acts as a purchasing guarantee mechanism for 
coffee producers to ensure that they receive the be st possible price and can sell their whole crop.  
Moreover, in 2008, a programme was implemented to  protect coffee growers' incomes and guarantee 
them adequate remuneration.  Producers sign a price protection contract (CPP), which guarantees a 
minimum price of Col$600,000 (US$32) per 125 kg.
18 
30. In addition to the foregoing, there are three specific price stabilization programmes:  support 
for cotton, rice and milk.  The equalization progr amme for cotton prices, or the minimum guaranteed 
price for cotton, is a policy introduced in 2001 and implemented during the period 2003/2004 to protect Colombian farmers' incomes from fluctu ations in international prices by offering 
compensation for the price differential between ma rket prices (New York Exchange) and a minimum 
guaranteed price per tonne of lint.  The Government gives an incentive for storing rice so as to prevent 
prices falling as a result of the surpluses that normally  occur during the second half of each year.  The 
price of milk is regulated by means of a reference price, on which producers receive an increase or a reduction depending on the hygiene quality and the composition of the milk.
19 
31. In 2011, MADR decided that the price of ag ricultural inputs, specifically fertilizers and 
pesticides for agricultural use, should be made subj ect to the "monitored freedom regime" for prices.  
This regime allows prices to be freely determin ed throughout the distribution chain, although they 
must be communicated to MADR.  MADR can thus  determine whether it should intervene in any 
inputs market and make the product subject to the "regulated freedom regime", under which 
maximum selling prices are fixed for inputs.  If the maximum selling price is not observed, MADR 
may make the product subject to the "direct price cont rol regime", setting the price for all levels in the 
marketing chain by means of a resolution.  The Ministry may, however, only impose direct price 
control after having gone through the previous two stag es and if the conditions that led to its original 
intervention persist.  MADR stops intervening once it has been determined that  the conditions that led 
to its intervention have ceased to exist.20 
32. MADR also implements other support programm es to enable the agricultural and fisheries 
sector to contend with climate problems or to renew plantations, inter alia, so as to encourage 
investment in higher value crops and exports, as we ll as other programmes specifically for small and 
medium-sized producers (Table IV.3). 
                                                                                                                                                                     
by-products, managed by the Colombian Cattle Breeders' Federation (FEDEGAN);  and the FEP for palm kernel 
oil, palm oil and fractions thereof, managed by the Na tional Federation of Palm Oil Producers (FEDEPALMA). 
18 Online information from MADR, " Políticas y Programas Misionales:  Apoyos Económicos y 
Financiamiento:  Caficultores ".  Viewed at:  http://www.minagri cultura.gov.co/07presupuesto/07a_ein_ 
caficul.aspx. 
19 MADR, Resolutions No. 051 of 2003 and No. 012 of 2007.  National Dairy Council, Agreement 
No. 007 of 2002. 
20 Resolutions No. 387 of 22 December 2011 "estab lishing the pricing policy for agricultural inputs", 
No. 389 of 26 December 2011 "maki ng some fertilizers and pesticides fo r agricultural use subject to the 
monitored freedom regime", and No. 390 of 26 Decembe r 2011 "making veterinary medicines and biological 
products for livestock use subject to the monitored freedom regime". Colombia WT/TPR/S/265 
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  33. The Agriculture, Secure Income (AIS) Progr amme was implemented by MADR until 2010, 
when it was replaced by the Rural Development with  Equity Programme (DRE).  Its objective was to 
make the national agricultural sector more competiti ve, protect the incomes of producers affected by 
the distortions caused by foreign markets, and les sen rural inequalities.  The Programme made use of 
a number of tools such as the Special Line of Credit (LEC)21, the Rural Capitalization 
Incentive (ICR), the Technical As sistance Incentive (IAT) and the Public Irrigation and Drainage 
Assembly. 
34. The purpose of the DRE, implemented fro m 2010 onwards, is to provide small and 
medium-sized producers22 with support to improve their competitiveness, help lessen inequalities in 
the field and reinforce national food security.  Its main  components are:  the LEC;  the ICR;  the IAT;  
rural micro-credit;  support for irrigation and drainage projects;  and cofinancing of research and technological development.
23 
Table IV.3 
Incentives granted by MADR 
General programme Specific programme Description/objective 
Beneficiaries of 
support because of the effect of frost Incentives for 
flower-growers affected by frost The objective is to compensate for the losse s suffered by growers of flowers for export 
as a result of frost in Colombia  
Beneficiaries of the Forestry Incentive 
Certificate (CIF) CIF Support granted to cover part of the cost of planting and upkeep for producers who 
plant new commercial forests on land suitable for forestry.  The CIF's support 
concerns:  plantation of indigenous species:  75% of the cost;  plantation of exogenous 
species:  50% of the cost;  upkeep from the second to the 5
th year after plantation: 
50% of the cost;  upkeep of areas of natural woodland located within the plantation 
and forestry management, for 5 years:  75%. 
Coffee Policy Agreement Competitiveness 
programme 
Conversion of land 
 
 
ICR for coffee 
 
 
 
Fertifuturo programme 
 
 
Additional climate 
insurance subsidy for 
coffee-growers  
Continuity, sustainability 
and future programme The objective was to renew coffee bushes.  Support of Col$240 for fertilizer for each 
coffee bush replanted.  Granted up to 2011 
Incentive of Col$1 million/hect are for growers who desist from planting coffee bushes 
in less than optimal areas and take up other agricultural ac tivities, preferably 
producing food. 
The objective is to promote the production of higher value coffee.  The ICR consists of 
payment of up to 40% of loans to be used fo r investment in the infrastructure required 
to obtain quality certificates for coffee and to  produce special coffees of higher value. 
The aim is to encourage proper fertiliza tion of coffee bushes and increase their 
productivity.  MADR gave discounts for cash purc hase of fertilizer or paid the interest 
for purchases on credit terms.  Granted up to 2011. 
Coffee growers who take out insurance for th eir crops receive a subsidy for 60% of the 
cost of the premium and also reduced interest  rates for their loans in order to maintain 
and renew coffee bushes, as part of the LEC "Risk-free Coffee", offered by the 
Agrarian Bank 
The aim is to raise output by replacing old coffee bushes and planting new ones.  For 
this purpose, an ICR amounting to 40% is given to small-scale producers who replace 
up to 20% of their plantations, and 20% to medium-sized producers. 
                                                      
21 The terms for the LEC in the AIS  include a subsidized interest rate (Fixed Term Deposit (DTF) 
rate - 2 percentage points), and a term of up to 15 year s, including grace periods of up to three years.  The DTF 
rate represents the average interest rate on 90-day de posit certificates owned by Colombian banks.  The term 
and the grace period are determined by the income and ex penditure flows in the prod uction activity that is the 
subject of the investment financed. 
22 Small producers are those whose assets were equivalent to 145 times the current monthly legal 
wage (SMMLV) corresponding to Col$77,662,000 (US$40,800) in 2011, and medium-sized producers are those 
whose assets amounted to 5,000 SMMLV i.e. Col$2,678,000,000) (US$1.4 million) in 2011. 
23 MADR (2010a). WT/TPR/S/265 Trade Policy Review 
Page 136 
  
  General programme Specific programme Description/objective 
Fishing and 
aquaculture Fuel subsidy 
Incentive programme for 
the supply of aquaculture 
products for export Fuel price subsidy for industrial fishing vessels and aquaculture. 
To provide support to producers of shrimps, tilapia and trout intended for export, 
Colombia implements the Incentive programme for the supply of aquaculture export 
products 
Source :  Online information from  MADR " Políticas y Programas Misionales:  A poyos Económicos y Financiamiento:  
Incentivos de Flores por heladas ".  Viewed at:  
http://www.minagricultura.gov.co/07pr esupuesto/07a_inflor_hela.aspx;  " Políticas y Program as Misionales:  
Apoyos Económicos y Financiamiento:  List ados de Beneficios Agro Ingreso Seguro ".  Viewed at:  
http://www.minagricultura.gov.co/05r ecomendados/03_recomendado.aspx;  " Políticas y Programas Misionales:  
Apoyos Económicos y Financiamiento:  List ados de Beneficio Agro Ingreso Seguro:   MADR and Corporación 
Colombia Internacional (2009), Pesca y Acuicultura:   Colombia 2009 .  Viewed at:  
http://www.cci.org.co/ cci/cci_x/datos/BoletinesIncoder/Publicac iones/Informecompleto2009.pdf and MADR 
Resolution No. 157 of 2010. 
35. The LEC can be used to finance th e sowing of crops with a short li fe cycle, for example:  rice, 
white and yellow maize, sorghum, barley, oats, bean s, vetch, vegetables, fruit (except those benefiting 
from the ICR), soya beans, plantains, yucca, potato es, sesame, cotton, tobacco, groundnuts and achira.  
These lines of credit are at subsidized rates of inte rest:  the subsidy given by the Fund for Financing 
the Agricultural Sector (FINAGRO) varies depending on the producer's volume and ranges from 5 to 
7.5 per cent.24  FINAGRO states that at present there are no resources for this line. 
36. The ICR is a payment towards the balance of the principal of the loan taken out by the 
producer in order to carry out new investment  projects intended to upgrade infrastructure for 
production, agricultural and fisheries marketing, an d to finance the sowing of medium-yield crops.25  
The ICR is also granted according to the type of producer through a financial intermediary.26  Under 
the IAT, the Government subsidizes up to 80 per cen t of the value of agricultural technical assistance 
services for small and medium-sized individual producers.27 
(iii) Financing and insurance 
37. FINAGRO, created by Law No. 16 of 1990, is an autonomous entity specializing in managing 
agricultural and rural loans.  It finances the work ing capital and investment required for production, 
                                                      
24 Small-scale individual producers:  DTF rate + 1 per cent;  small associate producer:  DTF rate;  
medium-sized individual producer:  DTF rate + 2 per cent;  medium-sized associate producer:  DTF rate + 1 per 
cent;  medium-sized or large producer incorporating small producers:  DTF rate + 1 per cent.  The DTF rate 
represents the average interest rate on 90-day de posit certificates owned by Colombian banks.  See 
FINAGRO (2012), Chapter V:  Líneas especiales de crédito . 
25 The ICR may only be used for the following activities:  planting and cultivation of late yield crops;  
preparing land and managing hydraulic resources;  purchasing production machinery and equipment;  agriculture and aquaculture;  production infrastructu re;  primary processing and marketing of goods;  
development of biotechnology and its incorporation into production processes;  and forestry and pastoral 
production systems. 
26 Small producers:  40 per cent;  medium-sized producers:  20 per cent;  and medium-sized or large 
producers incorporating small producers (provided that they invest with a small producer and that the latter is 
responsible for 60 per cent of the project):  40 per cent. 
27 Online information from MADR, " Asistencia Técnica ".  Viewed at:  
http://www.minagricultura.gov.co/11contacto/preg_asist encia.aspx;  and information provided by the 
authorities. Colombia WT/TPR/S/265 
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  marketing and primary processing.28  The interest and discount rates on the loans depend on the type 
of producer requesting the loan, in accordan ce with the classification defined by FINAGRO 
(Table III.27).  The terms and grace periods for FINAGRO loans depend on the crop or production cycle of the activity to be financed.
29  FINAGRO also gives farmers emergency resources in case they 
lose their crops or livestock, for example, because of harsh winter weather.30  To combat the harsh 
winter in 2011, small producers severely affected were given relief amounting to up to 95 per cent of 
the capital balance. 
38. During the period 2008-2009, FINAGRO gave a special line of working capital loans at 
subsidized interest rates for some agricultural products wholly or partly intended for foreign 
markets.31  This line could be used to finance working capital, or for investment and payment of the 
financial liabilities of producers of bananas, plantains,  flowers, foliage, aroma tic herbs, shrimps, and 
of fish-farmers.  The production could be to tally or partly intended for foreign markets.32  T h e  
financing could cover up to 100 per cent of the capit alization requirements, the project's direct costs, 
or the payment of liabilities vis-à-vis  the financial sector, including capital plus the interest payable.  
The amount of the loan per beneficiary was de termined by the beneficiary and the financial 
intermediary. 
39. The Agricultural Guarantee Fund (FAG) guara ntees credits granted on FINAGRO terms for 
use in new agricultural projects.  When an application for a FINAGRO agricultural loan is made, the 
banking institution requires security to underwrite the commitment;  if no security is available or it is 
not sufficient or appropriate, FAG guarantees these commitments with the bank.  Since 2008, FAG 
has had a special account called the Special Expo rters' Guarantee Fund to provide security for 
FINAGRO loans through the LEC for exporters.33 
40. In view of the importance of the agricultural sector in Colombia, besides the loan programmes 
implemented by FINAGRO and the support given by FAG, there are other programmes to support the 
sector in general, in addition to special programm es.  The programme for agricultural debt relief for 
producers affected by the 2010-2011 Niña phenomenon (or PADA OLA INVERNAL Programme) 
allows some small and medium-sized agricultural pr oducers affected to renegotiate the loans taken out 
after 1 June 2010.34  The standardization of working capital and/or investment loans means 
consolidating debt and includes extending the original  term for repayment by at least one year, with a 
maximum of five years, including a one-year grace period.  The interest rate may not exceed the ceiling set in the indicative loan plan for each type of producer;  in the case of medium-sized 
                                                      
28 Production, marketing, processing and support services for agricultural, livestock, fisheries, 
fish-farming and forestry and rural activities can be fi nanced through FINAGRO, for example:  handicrafts, 
rural tourism, processing of precious metals and stones and mining. 
29 For further details, see MADR and FINAGRO (2011b). 
30 For further details, see MADR and FINAGRO  (2011a). 
31 The interest rate on loans granted under this scheme was the annual effective DFT rate, irrespective 
of the type of producer.  For loans granted using the fi nancial intermediary's own resources, for each transaction 
disbursed and registered with the Fund, FINAGRO gave 3.3 effective annual percentage points of subsidy on capital balances, irrespective of the type of producer.  This allowance was paid in line with the time-frame for 
the payment of interest agreed for each transaction.  For loans discounted with FINAGRO, the discount rate was 
the DTF rate, and for each discounted transaction, while it was in effect, FINAGRO gave financial intermediaries 2.3 effective annual percentage points on capital balan ces and FINAGRO received 1 per cent 
while the loans and the relevant discounts were in eff ect.  See FINAGRO (2012), Chap ter V:  Special lines of 
credit. 
32 National Agricultural Credit Commission, Resolution No. 32 of 2008. 
33 Ibid. 
34 Resolutions Nos. 1, 3 and 15 of 2011 of the National Agricultural Credit Commission. WT/TPR/S/265 Trade Policy Review 
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  producers, however, standardization will make the maximum rate of the annual effective DTF plus 
eight points the standard.  Relief, in the form of lo wer interest rates, may be for up to 100 per cent of 
the amount of the interest during the first year, up to 60 per cent in the second year for small producers, and up to 40 per cent for medium-sized producers.  For small producers, the reduction 
must not exceed a 9.5 per cent annual effective rate  on the interest payable over the first year, or 
5.7 per cent for the second year.  Likewise, for medium-sized producers, the reduction must not 
exceed 11.5 per cent annual effective rate for the firs t year or 4.6 per cent for the second year.  FAG 
guarantees operations under this Programme. 
41. In addition to the National Agricultural Cred it Commission, FINAGRO may renegotiate loans 
to small and medium-sized producers that have been disbursed as an LEC under the AIS Programme, 
provided that the subsidy rate determined for the or iginal loan and the schedul e of interest payments 
originally agreed, both for the principa l and the interest, remain in effect.
35  The restructuring applies 
to current loans that have not been repaid;  th e term and grace period may be extended, but may not 
exceed three years. 
42. Agricultural producers have to face a number of ri sk factors and uncertainties that can affect 
the stability of their incomes, for example, fluctua tions in prices for their products and inputs and the 
exchange rate trend, as well as the climate.  In orde r to deal with these situations, in addition to the 
DRE Programme and the other programmes mentione d above, there are various mechanisms intended 
to improve risk management and help to attract and retain private investment.36  In 2010, to protect 
the incomes of producers in the export sector con fronted by exchange rate fluctuations, MADR 
implemented a programme to protect the incomes of producers of exportable agricultural goods.  In 
2010-2011, MADR set aside Col$49 billion for an incentiv e to cover 60 to 80 per cent of the cost of 
insurance premiums for exchange rate fluctuations  so that producers growing flowers, bananas and 
plantains, as well as other exporters, could purchase in struments to enable them to offset exchange 
rate losses.37 
43. Agricultural insurance is a risk-mitigation me chanism by which agricultural producers may 
protect their investments, taking out insurance polic ies, either individually or collectively, through 
insurers, to protect themselves against climatic risks.38  In a resolution of the National Agricultural 
Credit Commission, the agricultural insurance progr amme and the subsidy for agricultural insurance 
premiums are determined annually, to be finan ced through the National Agricultural Risk Fund.39  
In 2011, the Government subsidized agricultural in surance, covering 30 to 60 per cent of the amount 
of the policy, but with a ceiling depending on the product (Table IV.4).40 
                                                      
35 Resolution No. 19 of 2009 of the National Agricultural Credit Commission. 
36 MADR (2010a). 
37 Some 75 per cent of the resources were allocated to these three products.  Online information from 
MADR, " Políticas y Programas Misionales:  Apoyos Económic os y Financiamiento:  Programa de Coberturas 
2010-2011:  Instructivo Técnico del Programa de Protección de Ingresos pa ra Productores de Bienes Agrícolas 
Exportables ".  Viewed at:  http://www.minagricultura. gov.co/07presupuesto/07a_din_cobertu.aspx. 
38 Agricultural insurance was introduced by Law No. 69 in 1993, and is managed by the National 
Agricultural Credit Commission. 
39 MADR, Resolution No. 000020 of 25 January 2011. 
40 National Agricultural Credit Commission, Resolution No. 1 of 2010. Colombia WT/TPR/S/265 
 Page 139 
 
 
  Table IV.4 
Agricultural sector 
Product Maximum area insured 
(hectares) Maximum value to be insured per hectare 
(Col$ millions) 
Crops with a short life cycle 40,500 16.0 
Medium-yield crops and late crops 20,000 18.6 
Forestry products 15,000 6.0 
Other crops with per hectare costs exceeding Col$40 million 200 100.0 
Disasters/micro-insurance 98,500 0.9 
Source : MADR, Resolution No. 20 of 2011. 
(3) MINING (INCLUDING HYDROCARBONS ) 
(i) Mining 
44. In 2011, the mining sector (including hydrocarbons) accounted for 10.3 per cent of GDP.  The 
mining sector is also an important generator of export revenue (see Chapter I).  Colombia is 
Latin America's leading producer and exporter of co al and one of the world's major exporters of 
emeralds.  It also produces gold, ferro-nickel, cement, steel and pla tinum.  The non-petroleum mining 
sector is almost entirely in the hands of the private sector, although the State still has control over petroleum. 
45. In 2010, Colombia produced 74.4 million tonnes of coal, and it is es timated that production 
in 2011 rose to 84.8 million tonnes, the highest le vel ever recorded.  Coal is mainly mined by 
Carbones del Cerrejón, Drummond and La Loma, wh ich account for over 90 per cent of Colombia's 
production.  As to nickel, 49.4 million tonnes were produced in 2010, while 53.6 tonnes of gold were 
also produced. 
46. The Ministry of Mining and Energy (MME) is responsible for formulating, implementing and 
regulating domestic policy on explorat ion, exploitation, and processing of minerals.  Previously, up to 
November 2011, the Colombian Geological and Mini ng Institute (Ingeominas) was responsible for 
issuing mining permits and ensuring that permit hol ders complied with the requirements, collecting 
royalties and undertaking basic exploration in orde r to assess the potential resources of the subsoil.  
These tasks are currently carried out by the Nati onal Mining Agency (ANM), recently created by 
Decree No. 4.134 of 3 November 2011, as a decentra lized special government agency, with its own 
legal status, assets and administrative, technical a nd financial autonomy, attached to the MME.  The 
ANM is now the new mining authority and is responsib le for contracts and for control of minerals, as 
well as for the Colombian Geological Service, more specifically activities related to assessment of the 
subsoil.  The ANM is responsible for managing th e State's mineral resources and for granting rights 
for their exploration and exploitation, as well as  for concluding, administering and monitoring 
concession contracts and other mining rights covering the exploration and expl oitation of State-owned 
minerals.  Another of its functions is to prepar e, implement and disseminate strategies to promote 
mineral exploration and exploitation and to make  proposals and support the MME in formulating 
government policy and in drawing up sectoral plans for mining.
41 
47. Non-renewable natural resources are the inalie nable and permanent property of the State, 
pursuant to Article 332 of the Constitution.  The Stat e may authorize Colombian or foreign natural or 
legal persons to engage in mining. 
                                                      
41 Decree No. 4.134 of 3 November 2011. WT/TPR/S/265 Trade Policy Review 
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  48. Colombia's current mining and energy policy is built around three central elements:  to 
reorganize and reinforce the institutional structure for mining and energy;  to guarantee supplies of 
hydrocarbons and electricity;  and to generate  resources to boost Colombia's development. 
49. Law No. 685 of 2001, or Mining Code, which is th e main legislation in this sector, guarantees 
foreign investors the principle of national treatment.42  Foreign companies wishing to obtain a mining 
concession must establish a subsidiary domiciled in Co lombia before they can conclude an agreement 
on an exploration and/or explo itation mining concession.  The Mining Code introduced far-reaching 
reforms into the regulatory framework, defining the economic offsets and determining the legal 
stability of contracts, which may not be amended in  any way by subsequent legislation.  The Code 
also introduced streamlined procedures and tec hnical and operating reports, and established the 
National Royalties Fund. 
50. Law No. 1.382 of 2010 amended various prov isions of the Mining Code.  For example, 
Article 18 of the Law added a paragraph to the Mi ning Code on the contractor's economic capacity, 
according to which, for projects covering over 150 hectares, before the mining project can move 
ahead, the interested party must prove its econo mic capacity in accordance with the parameters 
determined by the MME, which must be proportional to the area requested.  A Mining Control Fund 
was also set up with resources derived from payment of  the control and monitoring of mining rights.  
The payment includes the amount of the professional fees payable for carrying out the task proposed, 
and the total travel and accommodation expenses fo r the professionals needed to monitor mining 
rights.  Other legal amendments introduced during the period under review include Decree No. 2.715 
of 2010 (regulation of the legalization of trad itional mining) and Decrees No. 3.083 of 2007, 
No. 4.289 of 2009 and No. 700 of 2010, as well as Article 113 of Law No. 1.450 of 2011 (regulations on the direct loading of coal). 
51. Mining activities are subject to general taxes and to two special taxes, surface taxes and 
royalties.  Concessionaires must pay an annual surf ace tax corresponding to the whole area of the 
concession.  Its amount ranges from one to three mi nimum daily wages per hectare depending on the 
size of the concession.  The Mining Code also imposes payment of a roya lty for exploiting the 
minerals.  This consists of a fixe d percentage of the gross product expl oited that is the subject of the 
mining right, calculated at the mine face. 
52. The MME's Mining and Energy Planning Divisi on (UPME) issues resolutions every quarter 
determining the basic rates for payment of royalties.  During the period under review, a new internal 
procedure was set up for the payment, collecti on, distribution and drawing of royalties and 
compensation.  In addition, Resolution No. 180.507 of  1 April 2009 amended some of the criteria for 
determining the basic rate for payment of royalties on  coal for export, which is weighted by volume, 
with the corresponding quality indicators for each coal mining area in Colombia. 
53. Pursuant to Decree No. 2.407 of 2000, a 1 per cent tax is levied on the value of emeralds 
exported in order to finance programmes to deve lop the industry and for social and economic 
development in production zones.  The National Em eralds Fund is responsible for collecting the tax 
and administering this programme. 
54. With its 2010-2014 Multi-Year Investment Pl an, the MME hopes to raise the level of 
royalties collected from US$7 billion in 2010 to US$14 billion in 2020.  It is hoped to use these resources to upgrade the country's infrastructure, protect the environment and boost social 
                                                      
42 Articles 18 and 19 of Law No. 685 of 2001 and Decree No. 2.080 of 2000. Colombia WT/TPR/S/265 
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  development.  Efforts are also being made to in crease direct investment in the mining sector and 
finance a mechanism for buying up surplus production. 
(ii) Hydrocarbons (including petroleum products) 
55. In 2011, average crude petroleum production was 915,263 barrels/day, and 
968,000 barrels/day in December 2011.43  The authorities expect production to continue rising, up to 
1.25 million barrels/day in 2014.  In 201 1, production of gas was 1,032 million m3/day and is 
expected to rise to 1.35 million in 2014.  The grow th in crude petroleum production is to be achieved 
by means of a 100 per cent increa se in the transport capacity of pipelines as a result of a 
US$6.5 billion investment plan to be carried out between 2011 and the end of 2013.  As regards gas, 
US$1 billion is being invested to increase transport capacity. 
56. In Colombia, the company ECOPETROL S.A. is mainly responsible for producing crude 
petroleum either directly or through production-sh aring agreements with pr ivate oil companies.  
ECOPETROL S.A. is a semi-public company of a commercial nature, organized in the form of a 
Colombian public limited company, linked to the MME, in accordance with Law No. 1.118 of 2006.44  
In 2011, ECOPETROL S.A. produced 87 per cent of Co lombia's crude petroleum.  It has a share in 
the production of petroleum and natural gas by-p roducts.  In 2011, its exports amounted to 
US$17.5 billion, 73 per cent more than in 2010, wh ile sales to free zones am ounted to US$3.1 billion, 
a 52 per cent increase in comparison with the previous year. 
57. ECOPETROL S.A. acts as producer, administrato r and regulator of the petroleum industry, 
although Decree No. 1.760 of 2003 modified the compan y's basic structure and made it into a public 
limited company with shares, responsible only for exploration and the productio n of petroleum and its 
by-products.  ECOPETROL S.A. is currently orga nized as a public limited company linked to the 
MME, in accordance with Law No. 1.118 of 2006.  Its corporate purpose is "the development, in 
Colombia or abroad, of commercial or industrial activities that are relevant or related to the 
exploration, exploitation, refining, transport, st orage, distribution and marketing of hydrocarbons, 
their by-products and products".45 
58. Pursuant to Decree No. 4.299 of 2005, petroleum may be freely refined in Colombia.  
Nevertheless, the majority of the refining, trans port, import and storage infrastructure is owned and 
operated by ECOPETROL S.A.  Colombia has a 5,099 km long pipeline network and a 3,078 km 
multi-product pipeline network, both belonging to ECOPETROL S.A. and its associates.  It has 
three oil refineries, all owned by ECOPETROL S.A.  Their capacity will be increased in the near 
future.  In early 2012, two projects in this respec t were under way:  one to expand refining capacity at 
the Cartagena refinery to 165,000 barrels/daily, w ith investment of US$3.891 billion, which it was 
hoped would be ready in June 2013 , and another to modernize the Barrancabermeja refinery, with 
investment of US$3.386 billion, and commencement of operations in August 2015.   In the natural gas 
market, ECOPETROL S.A. and its subsidiaries ac count for over 60 per cent of production, while 
Chevron-Texaco has 20 per cent and other producers 20 per cent. 
                                                      
43 Online information from UPME, " Principales indicadores ".  Viewed at:  
http://www1.upme.gov.co/index.php/zona-de-i nformacion/principales-indicadores.html. 
44 Online information from ECOPETROL S.A.  View ed at:  http://www.ecopetrol.com.co/contenido. 
aspx?catID=30&conID=38178. 
45 Online information from ECOPETROL S.A., " Objetivos ".  Viewed at:  http://www.ecopetrol.com/. 
co/contenido.aspx?catID=30&conID=44712. WT/TPR/S/265 Trade Policy Review 
Page 142 
  
  59. The Constitution provides that hydrocarbons de posits are the inalienable and permanent 
property of the State.  The MME, through its Hydrocarbons Directorate, is responsible for adopting and regulating domestic policy on hydrocarbons.
46  It is also responsible for supervising operators and 
determining prices in the sector, with the excep tion of residential gas services, which are the 
responsibility of the Energy and Gas Regulatory Commission (CREG).  The National Hydrocarbons 
Agency (ANH), a body attached to the MME, was created by Decree No. 1.760 of 2003 to be 
responsible for:  administering areas with hy drocarbons deposits;  dr awing up, negotiating and 
concluding new exploration and e xploitation contracts for State-owned hydrocarbons;  collecting 
royalties and monetary offsets under the said contracts;  and determining the volumes and prices of 
crude petroleum to be refined domestically.  Th e ANH allocates new exploration and production areas 
to any company that meets the specified requirement s.  According to its statutes, the ANH is the 
authority responsible for promoting the optimum and sustainable use of Colombia's hydrocarbons 
resources, managing them as a whole and reconciling th e interests of society, the State and companies 
in the sector.47 
60. The various activities in the petroleum chain (refining, import, storage, wholesale distribution, 
transport and retail distribution) are open without r estriction to companies with Colombian or foreign 
capital.  The Law guarantees third parties access to the transport of crude petroleum through 
ECOPETROL S.A.'s system of pipelines and for pr oducts through its multi-product pipelines, as well 
as the right to build new connections to existing multi-product pipelines.48 
61. Since 1998, Colombia's policy has been gradual lib eralization of the price of regular petrol.49  
The selling price of petroleum products to final consumers conforms to two possible regimes:  
monitored freedom to set prices or regulated freedom.  The basic price is set by the MME using a methodology that takes into account the margins for each participant in the petroleum chain, 
international price trends for fuel, a nd variations in the exchange rate.
50  One other important factor 
when calculating the basic price is the global fuel ta x, which is a standing charge that is adjusted 
annually according to the inflation target defined by  the Bank of the Republic.  For petrol for motor 
vehicles and fuel oil for engines (diesel fuel),  the surcharges of 25 per cent and 6 per cent, 
respectively, on these products al so affect the basic price.51  In principle, the dismantling of specific 
subsidies should have come to an end in June 2010.  The authorities have indicated that this was not 
possible because of the sharp rise in international fuel prices that year and the dismantling continued 
                                                      
46 Online information from MME.  View ed at:  http://www.minminas.gov.co. 
47 Online information from the National Hydrocarbons Agency, " Misión y Visión " .   V i e w e d  a t :   
http://www.anh.gov.co/es/index.php?id=12. 
48 Law No. 681 of 9 August 2001. 
49 In 1999, the MME adopted a methodology for determining the price of petrol based on the parity of 
import prices at the port of Barrancabermeja, with m onthly adjustments according to the variation in the 
f.o.b. Gulf of Mexico coast price and the trend in the exchange rate.  Nevertheless, between 1999 and 2002, the Government did not reflect the variation in international fuel prices in the domestic prices, thereby giving 
ECOPETROL S.A. an economic subsidy.  Between 2002 and 2006, to avoid price fluctuations, a methodology 
was adopted based on the expected forw ard price of West Texas Intermediate (WTI) Gulf of Mexico coast oil, 
plus a refining margin of US$2.5 per barrel, which wide ned still further the gap between the international price 
and that on the Colombian domestic market.  In 2006, th e Government therefore decided to adopt as a reference 
the Gulf of Mexico coast market price for products of  Colombian quality and the cost of transport between the 
Colombian coast and the Gulf coast, with discounts depend ing on each product.  This was intended to speed up 
the process of dismantling implicit subsidies for liquid fuels. 
50 The costs which compose part of producers' income s were the f.o.b. Gulf coast price, international 
freight, insurance, tariffs, inspection costs, stamp duty and the fee for the Pozos Colorados Galán multi-product 
pipeline (which transports petrol from Santa Marta to Barrancabermeja).  See MME (2011). 
51 Laws No. 681 of 9 Au gust 2001 and No. 488 of 24 December 1998. Colombia WT/TPR/S/265 
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  in 2011.  By December 2011, 95.5 per cent of the subsidy for petrol for motor vehicles had been 
dismantled, while for diesel fuel the figure was 88 pe r cent.  The amount of the subsidies for petrol for 
motor vehicles fell from Col$5.1 trillion in 2008 (around US$2.7 billion) to some US$1.1 billion 
in 2011. 
62. The MME has an information system for liqui d fuels (SICOM), created by Law No. 1.151 
of 2007, which brings participants in the domestic  chain together in one information system and 
through which the marketing, distribution, transport and storage of liquid petroleum-based fuels, fuel 
alcohol and biodiesel fuel are organized, contro lled and harmonized.  SICOM keeps lists of major 
consumers and authorized agents in the chain.52 
63. The Petroleum Savings and Stabilization Fund remains in effect as a regional and sectoral 
development fund for production zones.  The Nationa l Royalties Fund, created in 1991, collected the 
income from royalties not directly  allocated to departments or municipalities, but was replaced 
in 2011 by the General Royalties Scheme.  This Scheme was created by Decree No. 4.923 of 2011 
and finances projects with a regional impact, including  those for fuel gas, using the income from the 
royalties assigned to it.  The Special Developmen t Fee Fund, created by Law No. 401 of 1997, 
amended by Law No. 887 of 2004, Law No. 1.151 of  2007 and Law No. 1.450 of 2011, and managed 
by the MME, is financed by res ources from the so-called Development Fee, which is the 3 per cent on 
the value of the tariff paid on gas that is actually tr ansported and is levied on all transporters in the 
Natural Gas Transport Scheme.  Its purpose is to  promote and co-finance projects to develop the 
infrastructure for using natural gas in  municipalities and in the rural sector.53 
64. Companies producing, transporting, distributing or  marketing fuel gas using the pipeline must 
contribute to the Solidarity Fund for Subsidies and Income Redistribution.54  Under Resolution 
No. 015 of 1997, CREG determined that the figure for the solidarity contribution for users in the 
industrial and commercial sectors was 8.9 per cent, and 0 per cent for fuel gas used to generate 
gas-based electricity, for the petrochemical indus try and for gas for vehicles.  Decree No. 4.596 
of 2011 provided that the industrial sector w as exempt from the solidarity contribution. 
65. The main changes introduced in to the legislation on hydrocarbons and gas are shown in 
Table IV.5. 
Table IV.5 
New legislation on hydrocarbons and gas, 2006-2011 
Legislation  Content 
Decree No. 2.400 of 2006  Regulating the construction of international interconnections for natural gas 
Resolution No. 180.196 of 2006  Issuing the technical regulations on sta tionary cylinders and tanks used for the public residen tial 
supply of liquefied petroleum gas (LPG) a nd the procedures for their maintenance 
Resolution No. 180.928 of 2006 Issuing the t echnical regulations applicable to servi ce stations supplying compressed natural ga s for 
use in vehicles  
                                                      
52 Online information from SICOM.  Viewed at:  http://www.sicom.gov.co/index.shtml. 
53 Online information from MME, " Fondo Cuota de Fomento ".  Viewed at:  
http://www.minminas.gov.co/minminas/gas.jsp?carga Home=3&id_categoria=124&id_subcategoria=265. 
54 In order to calculate the subsidies given to users through this Fund's resources, public-service 
suppliers of fuel gas supplied through the physical networ k must estimate annually the subsidies to be granted 
and the contributions to be invoiced  (and received from other marketing en tities) in the subsequent year and 
send in this estimate by the last week of April at the latest, pursuant to Decree No. 847 of 2001.  Law No. 1.428 
of 2010 modified the percentages of the subsidy for residential categories 1 and 2 of the household public 
service for fuel gas supplied by pipeline. WT/TPR/S/265 Trade Policy Review 
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  Legislation  Content 
Decree No. 2.629 of 2007 and 
Decree No. 4.892 of 2011 Establishing provisions to promote the use of biof uels in Colombia, and measures applicable to 
motor vehicles and other engine-powered mach inery and equipment which are fuel-operated 
Resolution No. 182.142 of 2007  Issuing the rules for the registra tion of producers and/or importers of biofuels for use in die sel 
engines and establishing ot her provisions concerning their mixture with diesel fuel of fossil origin 
Resolution No. 182.087 of 2007 Establishing th e technical and environmental requirements for bio-diesel fuels and their mixture  with 
diesel fuel 
Law No. 1.151 of 2007, amended by Law No. 1.450 of 2011  Creating the current SICOM of the MME 
Resolution No. 180.581 of 2008  Issuing the t echnical regulations for plants bottling LPG 
Law No. 1.274 of 2009  Law on the procedure for appraisal of petroleum concessions 
Decree No. 4.500 of 2009 Amending Article 5 of Decree No. 880 of 2007, dealing with the programmed rationing of natural 
gas or electricity 
Resolution No. 180.134 of 2009  Modifying the price structure for diesel fuel mixed with biofue l for use in diesel engines 
Resolution No. 181.495 of 2009  Regulating and controlling activities concerning the expl oration and exploita tion of hydrocarbo ns, 
maximizing their final recove ry and avoiding wastage 
Law No. 1.428 of 2010 Amending the percentage of the subsid y for household categories 1 and 2 of the public service for 
fuel gas supplied by pipeline 
Decree No. 2.100 of 2011 Establishing mechanisms to promote guaranteed supplies of natural ga s nation-wide and determining 
other provisions.  Provides incentives for explora tion and exploitation of hydrocarbons.  Promotes 
exports of natural gas 
Decree No. 4.915 of 2011 Amending Decree No. 4.299 of 2005.  The purpose of Decree No. 4.299 of 2005, amended by 
Decrees No. 1.333 of 2007 and No. 1.717 of 2008, is  to define the requirements, obligations and 
penalty system applicable to entities in the di stribution chain for petroleum-based liquid fuels 
Decree No. 4.596 of 2011 Implementing Article 102 of Law No . 1450 of 2011, establishing exemption from the solidarity 
contribution for the industrial sector 
Resolution No. 122-01 of 2011 Publishing the declaration of production of natural gas by producers and producer/suppliers 
Resolution No. 180.693 of 2011 Technical regulations for the storage of LPG in San Andrés Islands 
Resolution No. 180.780 of 2011 Technical regulations on st ationary tanks, depots, outlets and points of sale 
Resolution No. 181.704 of 2011 Establishing the calculation me thodology for determining the supply of natural gas index 
Source :  WTO Secretariat, based on inform ation provided by the authorities. 
66. Colombia's legislation regulates the export of na tural gas in order to ensure that domestic 
demand is satisfied.  Decree No. 2.100 of 15 June 2011 is particularly important, as it contains 
provisions on the priority to be given to domes tic consumption:  producers, producers/suppliers, 
traders and transporters must give priority to demand for gas for domestic consumption.  
Decree No. 2.100 also provides that exporters must give priority to the demand for natural gas for 
domestic consumption when there are "unavoidable r estrictions on supplies of natural gas or serious 
emergencies or programmed rationing of natu ral gas", making it necessary to suspend export 
commitments.  The Decree also provides that producers of gas from non-traditional sources may directly generate thermo-electricity that uses the gas they produce as a primary source and that MME, 
ANH and CREG may provide additional incentives to promote the exploitation and marketing of gas 
from non-traditional sources. 
67. Through its producers of natural gas, Colomb ia signed an agreement with the Bolivarian 
Republic of Venezuela to market natural gas. 
(4) E
LECTRICITY  
68. In December 2011, Colombia had 14,408 MW of  installed electricity generating capacity.55  
In 2011, the total volume of electricity gene rated was 58,620 GWh, of which 77.5 per cent was 
                                                      
55 Online information from UPME, " Principales indicadores ".  Viewed at:  
http://www.upme.gov.co/index.php/zona-de-informacion/princi pales-indicadores.html.  In 2011, 63.7 per cent Colombia WT/TPR/S/265 
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  generated in hydroelectric power stations, 15.9 per cen t in thermal stations, and 6.3 per cent in smaller 
or co-generating stations.56  Domestic demand for electricity was 57,157 GWh, producing a surplus 
that was exported, 1,294 GWh to Ecuador and 2 49 GWh to the Bolivarian Republic of Venezuela.57  
The authorities have indicated that in the future Colombia will also export electricity to Panama 
through an international interconnec tion with the capacity to transport 300 MW, which is expected to 
be completed in 2015. 
69. In 2011, 487 registered companies were gene rating electricity in Colombia, with private 
enterprises generating around 45 per cent of installe d capacity and government participation of 55 per 
cent.58  As far as marketing is concerned, there were 85 registered companies.  Regarding 
transmission, 110 companies with a grid covering 14,300 km and voltage of 220 KV or more were 
operating;  90 per cent of the grids belong to semi-public companies.  There are 30 companies 
distributing electricity of less than 220 KV through a grid covering 10,100 km. 
70. Law No. 143 of 1994 or the Electricity Law pr ovides for the separation of activities into 
four groups (generation, transmission, distribution and marketing), prohibits vertical integration (with 
the exception of those companies set up prior to th e enactment of the Law) and guarantees free access 
to transmission and distribution grids to any supplier,  generator or user that so requests.  Law No. 142 
of 1994 or Law on Household Public Services is in tended to create a market-oriented and competitive 
environment and to regulate the participants' business practices.  The sector's legal framework contains a number of provisions that seek to encourage competition and limit any dominant position, 
requiring that no company may provide more than one quarter of the installed generating and/or 
marketing capacity.
59 
71. State participation based on the public service model has a threefold role:  definition of 
energy policy, regulation, and monitoring and control.  It leaves the development of activities under the free entry and free competition regime in private hands.  MME is responsible for defining policy.  
UPME is in charge of developing strategic plans and energy expansion, including the National Energy 
Plan and the Expansion Plan for electricity genera tion and transmission, which is indicative as far as 
generation is concerned and mandatory in the case of  transmission.  Regulation and definition of the 
methodology used to calculate rates and pr omote free competition are CREG's responsibility.
60  The 
Supervisory Authority for Household Public Services  monitors and controls the supply of household 
public services.  The Administrator of the Commercia l Interchange System (ASIC) is responsible for 
managing the wholesale energy market and the Nationa l Dispatching Centre (CND) is responsible for 
planning, supervision and contro l of the integrated operation of  the generating and transmission 
resources of the National Interconnected System (SIN).61  The National Operations Council (CNO), 
                                                                                                                                                                     
of electricity came from hydraulic resources;  31.5 per cen t from thermal sources;  and 4.8 per cent from smaller 
or co-generating stations. 
56 Information provided by the authorities.  See also online information from X.M. S.A., " Descripción 
del sistema eléctrico colombiano ".  Viewed at:  http://www.xm.co/Pa ges/DescripciondelSistemaElectrico 
Colombiano.aspx. 
57 Further details on this sector may be viewed in  the online information from UPME.  Viewed at:  
http://www.upme.gov.co/Index2.htm. 
58 Online information from CREG, " Colombia y el sector eléctrico in cifras ".  Viewed at:  
http://www.creg.gov.co/cxc/secciones/colo mbia_cifras/colombia_cifras.htm. 
59 CREG, Resolution No. 001 of 2006. 
60 CREG is composed of eight members:  the Minist er for Mining and Energy, who acts as chair;  the 
Minister for Finance and Public Credit;  the Director of the National Planning Departme nt;  and five experts in 
energy matters, exclusively, appointed by the Pr esident of the Republic for four-year terms. 
61 CND, together with ASIC, belong to the XM public limited company and public services company, 
regulated by CREG. WT/TPR/S/265 Trade Policy Review 
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  composed of representatives of companies in the sector , deals with the technical aspects in the sector, 
while the Marketing Advisory Committee (CAC), co mposed of companies supplying electricity (as 
well as generating and/or distributing electricity and independent), assists CREG in monitoring and 
reviewing the commercial aspects of the wholesale elect ricity market (MEM).  The SIC is responsible 
for competition policy matters. 
72. MME is responsible for granting concessions fo r generation, interconnection and transmission 
grids among regions.  Under Law No. 143 of 1994, regional authorities give concessions for regional 
transmission and municipalities grant concessions for distribution, provided that there is no entity 
prepared to provide such services on the same terms.  The term of a concession contract is determined 
by the entity granting it in each case and may not  exceed 30 years, renewable for a maximum of 
20 years.  Concessions for the public electric ity service have only been granted in the 
non-interconnected zones of San Andrés and Amazon as (not connected to the national grid (SIN)). 
73. Pursuant to Law No. 143 of 1994, users are divided into regulated users and non-regulated 
users.  Electricity provided by suppliers to final u sers whose rates are regulated (regulated users) must 
be purchased by these companies on the MEM, either under long-term bilateral agreements (financial 
coverage contracts) or on the spot market (see below).  Electricity rates for regulated users are 
determined according to a regulated freedom regime under which CREG establishes the methodology 
for calculating the rates used by companies to dete rmine the maximum price for their services.  This 
price must reflect the costs of the production chain. 
74. Law No. 142 of 1994, or Law on Household Pub lic Services, provides for subsidies for the 
basic or subsistence consumption of  residential users belonging to the most vulnerable sectors of the 
population.  These users are subsidized through th e contributions of users in the higher-income 
sectors, and by commercial users and some industrial users (regulated or non-regulated), who pay 20 per cent over the cost of supplying the service fo r which they are billed.  In 2011, the electricity 
sector received subsidies amounting to Col$1.48 tr illion (around (US$800 million)).  The authorities 
have indicated that, in addition to the contributi ons made by higher-income household users and by 
business users and some industrial users, be neficiary household users will receive around 
Col$1.26 trillion in State contributions to cove r the total subsidies to  be granted in 2012. 
75. Electricity is sold on the MEM.  This is com posed of a series of systems for exchanging 
information among generators and s uppliers operating in the SIN, which enables them to conduct both 
short- and long-term buying and selli ng of electricity.  All the energy required to meet the demand of 
users connected to the SIN, represented by the suppl iers, goes through this market, and is provided by 
generators which connect their power  plants or generating facilities to the SIN.  Both generators and 
suppliers are MEM agents.  Generators must include  in the MEM all their power plants or generating 
facilities of 20 MW or over connected to the SIN and the electricity must be centrally dispatched by 
the CND.  All suppliers serving final users connected  to the SIN are obliged to conduct their energy 
transactions through the MEM.  Final users (regulat ed or non-regulated) may not participate directly 
in the MEM. 
76. Energy transactions in the MEM take the follo wing forms:  hourly transactions on the spot 
market;  bilateral financial contracts on energy;  and auctions for the purpose of allocating Reliability 
Charge Firm Energy Commitments (OEFs).
62  Generators may participate in one or all of these 
                                                      
62 Reliable Charge is a mechanism intended to ensure the reliability of supplies of electricity in the 
long term at efficient prices.  In th e course of auctions, generators are a llocated OEFs, giving them the right to 
an established and stable amount for a fixed term in exchange for the commitment to supply a defined volume of 
energy when spot prices exceed a threshold establis hed by CREG in advance, called the scarcity price. Colombia WT/TPR/S/265 
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  transactions.  This scheme of operations, as well as the rules for its functioning and participation, have 
remained the same since the MEM started to operate. 
77. With regard to transactions on the energy mark et, generators make a price offer each day and 
declare their availability for generation hourly , without taking into account the state of the 
transmission grid in a single nodal exchange.  The lowest offers are selected to supply demand hour 
by hour in an "ideal" dispatching system that does not incorporate any restrictions that may be present 
in the transmission grid.  The price offers made by generators taking part in the MEM must reflect the 
variable costs of generation and opportunity costs.  The latest price used to meet total demand for 
energy hourly is the price to be paid for all infra -marginal resources in the same hour and is called the 
spot price.  The demand for energy from suppliers not  covered by bilateral contracts must be paid at 
this spot price.  The ASIC is responsible fo r paying commitments and financial liabilities of 
participants in the market. 
78. The second method used for buying and selling energy is that of bilateral contracts, which are 
commitments undertaken by generators and suppliers to sell or buy energy at freely regulated prices 
and quantities and under contractual terms negotiated freely between th e parties.  The purpose of 
these contracts is to lessen exposure of both the supp lier and the end-user to price volatility on the 
spot market.  The physical delivery of the energy  committed in the contracts occurs via the spot 
market, so such contracts contain no dispatching commitment between the parties but only cover the 
price.  There are no restrictions on the amount of energy to which a generator or supplier may commit 
itself in bilateral contracts or on the time-frame  to be covered by such contracts.  The only 
requirement is that the contract should specify the volume to be used hourly by the ASIC for purposes 
of payment.  Energy bought by suppliers under bila teral contracts and intended for regulated users is 
governed by rules determined in such a way as to en sure competition among genera tors in this type of 
transaction, whereas the energy boug ht by suppliers for non-regulated users is negotiated at prices and 
on terms freely agreed between the parties.63 
79. Lastly, the purpose of auctions is to allocate OEFs between generators and investors in order 
to guarantee the reliability of supplies of firm ener gy over the long term at "efficient" prices, even 
when there is a critical hydrological situation.  In ideal dispatching, an agent with an OEF undertakes 
to generate a volume of energy daily whose maximu m amount is the energy determined in the OEF.  
OEFs are acquired by demand through transactions cen tralized by the ASIC.  They are allocated to 
various generators and investors through auctions.  They are only allocated to agents who possess or 
plan to possess generating facilities as of a fixed date  and who are selected at the auction, as well as 
existing generators.  Auctions are held four  years before the firm energy is required.64  The period 
during which the OEF remains in effect is decided by the owner or the commercial representative of 
the generating facility concerned, but it must be wi thin certain predetermined parameters.  If at the 
time of the auction:  (i) the generating facility has no t yet started to be built, the minimum term of the 
relevant OEF may be one to 20 years;  (ii) if the generating plant or facility is in the process of being 
                                                      
63 Online information from CREG, " Características generales del Mercado Mayorista:  Transacciones 
en el MEM:  Contratos bilaterales ".  Viewed at:  http://www.cr eg.gov.co/cxc/secciones/mercado_ 
mayorista/contratos.htm. 
64 The time that elapses between announcement of the date of the auction for allocating OEFs and 
expiry of the term of the OEFs is classified into three peri ods:  (i) preselection;  (ii) planning;  and (iii) period of 
the commitment.  The preselection period ends on the day on which the auction is held and the planning period lasts for three years.  For project s whose construction exceeds the three years of the planning period, CREG 
allows investors to sell some of their future firm energy at  auctions held seven, six or five years before the firm 
energy under the project becomes available. WT/TPR/S/265 Trade Policy Review 
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  built or equipped, the OEF may have a term of one  to ten years;  and (iii) if it is operating 
commercially at the time of the auction, the OEF remains in effect for one year. 
80. The OEF is enforceable when the s pot price exceeds the scarcity price65, reflecting a critical 
situation for electricity supplies.  In such cases, an agent with an OEF must supply the energy to 
which it is committed through its own ge neration and, if this is insufficient, must buy energy from the 
so-called "safety rings"66 or buy it on the electricity market.  If an agent has tried the safety rings 
mechanisms and the electricity market but is still unab le to comply with its OEF, it has to compensate 
for the rationing introduced.  When the spot price does not exceed the scarcity price, the generator is 
paid with the reliability charge and the amount of  this remuneration per kno wn and stable unit of 
energy over a determined period results from the auction at which the OEF was allocated.67  T h i s  
payment is assessed and collected by the ASIC and pa id by users of the SIN through the rates paid to 
suppliers. 
81. At the subregional level, the exchange of elect ricity is regulated by CAN Decision No. 536, 
which prohibits the application of tariffs or other restrictions on imports or exports of electricity 
among CAN members.68  Imports and exports must be th rough a generating and/or marketing 
company set up in Colombia and through the wholesale market.69  Colombia has electricity 
interconnections with Ecuador and the Bolivaria n Republic of Venezuela, and will have an 
interconnection with Panama as of 2015.  The exch ange of electricity with non-members of CAN is 
regulated by CREG. 
(5) MANUFACTURES  
82. Since the previous review, the manufacturing sector's share of GDP has fallen slightly, from 
14.6 per cent in 2006 to 13.4 per cent during the third quarter of 2011.  The principal manufacturing industries are chemicals, petroleum refining, beverages, non-metallic products and textiles. 
83. MCIT's Directorate of Productivity and Comp etition is responsible for coordinating the 
National Productivity and Competition Policy for the manufacturing sector, by developing joint action 
by the public, private and academic sectors.  MCIT  coordinates supply chain competition agreements 
for motor vehicle parts/motor vehicles;  leather, footwear and manufactures thereof;  household 
appliances;  professional electronics;  mechanical engineering;  petrochemicals;  cosmetic and 
hygiene products;  pulp, paper and the graphic industry, inter alia .  Under the current Business 
Development Programme (PDE), the authorities are implementing a production transformation 
programme, identifying and devel oping emerging sectors and introducing a new targeted industrial 
strategy organized around sectoral committees whic h act as channels to facilitate communication 
among the parties. 
                                                      
65 This price is determined by CREG and updated monthly on the basis of variations in the price index 
for fuel, and indicates the moment at which the OEFs are enforceable.  It is also th e price at which the energy 
supplied will be paid when the OEFs are enfo rced.  See online information from CREG, " Obligación de Energía 
Firme:  Verificación del cumplimiento ".  Viewed at:  http://www.cre g.gov.co/cxc/secciones/obligacion_ 
energia_firme/ve rificacion.htm. 
66 The safety rings are a series of instruments whose purpose is to facilitate supplies to meet demand in 
critical situations and compliance with the OEFs of generators. 
67 Since its original regulation in 1996, for the former  capacity charge a term of  ten years was defined, 
which ended on 30 November 2006.  After expiry of this term and following approximately two years of 
studies, proposals and discussi on with industry and other interested parties, this  charge was replaced by the 
current reliability ch arge, applicable since 1 December 2006. 
68 CAN Decision No. 536 of 19 December 2002. 
69 CREG Resolution No. 057 of 19 May 1998. Colombia WT/TPR/S/265 
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  84. The PDE seeks to meet its objectives by means of four main elements:  (i) development of 
human capital;  (ii) adapting legisla tion and regulations to industry's needs;  (iii) boosting industry by 
attracting foreign investment to and developing th e sector, its trade associations and its management 
and promotion capacity;  and (iv) upgrading infrastructure.  The authorities have indicated that it is 
not intended to grant subsidies in order to ach ieve these objectives.  A strategy has also been 
implemented to bring the informal sector's activiti es into the formal sector so as to increase the overall 
productivity of the manufacturing sector.  Another stra tegy is to promote the domestic market through 
the "Buy Colombian" initiative.  As part of th e strategy, business round tables have been organized 
with broad participation at the national level, whic h include meetings to foster commercial dealings 
between entrepreneurs from MSMEs and strategic buyers. 
85. In addition, the National Planning Department coordinates the National Innovation Strategy, 
intended to bolster the country's innovative capacity, in  particular that of its production sector.  The 
aim of this Strategy is to appropriate and adap t technology, generate va lue in organizations and 
research and development relevant to Colombia's spec ific needs.  With this in view, several lines of 
action have been defined, including the cr eation of an innovation and development 
unit (INNpulsa Colombia) to provide better tools for promoting innovation. 
86. According to the ISIC definition70, the average MFN tariff applied by Colombia to 
manufactures fell sharply during the period under revi ew, from 12.3 per cent in 2006 to 8.2 per cent in 
April 2011 and 6.2 per cent in August of the same year. 
87. Colombia still applies a number of trade pr otection measures (see Chapter III(2)(viii)) on 
manufacturing sector imports.  Between 2006 and 2011, Colombia initiated 23 anti-dumping 
investigations and applied 11 new definitive measures;  at 30 June  2011, Colombia had 12 measures 
in force, all applying to imports from China.   Colombia also uses non-automatic licensing (see 
Chapter III(2)(vii)).  Licensing applies irr espective of the origin of the product. 
88. Under the automotive agreement with Ecuador , the automotive industry has continued to 
benefit from certain measures such as the 0 per cen t tariff on vehicles for assembly.  Furthermore, 
under this agreement, the tariffs on automobiles,  minibuses carrying fewer than 16 passengers and 
small trucks (with a total load of less than 4.537 tonnes) are 35 per cent less than the MFN tariff, the 
tariffs on assembled vehicles are up to 35 per cent,  the import of second-hand vehicles is banned, and 
VAT rates for certain imported vehicles are higher. 
89. Even though Colombia has not used minimum pr ices since 2003, it still uses reference prices 
as a control measure to verify the prices declared for imported goods.  Currently, there are reference 
prices for 51 sectors in the economy, many of them in manufacturing, for example, footwear, textiles, made-up articles, vehicles, iron and steel, and plast ics.  Since 2004, Colomb ia has used indicative 
prices as a sub-category of reference prices.  Th e use of these indicative prices is mandatory for 
certain imports of textiles, made-up articles and footwear originating from all countries other than 
those with which Colombia has signed fr ee trade agreements (Chapter III(2)(ii)). 
90. The manufacturing sector is eligible for va rious export support programmes, under which 
users are given tax concessions and benefit from st reamlined customs procedures.  One such is the 
free zone programme.  Three types of free zone can  be established in Colombia:  permanent zones, 
special permanent zones and transit zones.  Th ere are minimum requirements on investment, assets 
and employment (see Chapter III(4)(iv)).  Exporters of  manufactured goods also have the right to total 
or partial refund of indirect taxes, charges and cont ributions subject to an application to the Bank of 
                                                      
70 ISIC, Revision 3, groups 15 to 37. WT/TPR/S/265 Trade Policy Review 
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  the Republic for a tax reimbursement certificate (CERT), and may also take advantage of the 
Vallejo Plan, which gives full exemption from tari ffs and VAT for temporary import of inputs, raw 
materials, intermediate goods, capital goods and spare parts, provided that they are used to produce 
goods for export or to provide services directly re lated to the production or  export of such goods. 
(6) SERVICES  
91. In 2011, services accounted for around two thirds (54 per cent) of Colombia's GDP.  
Colombia has a deficit in trade in services.  In 2010, imports of business services amounted to 
US$7.981 billion and exports to US$4. 446 billion.  Both imports and exports grew at an average rate 
of 10.8 per cent between 2005 and 2010. 
92. Colombia adopted specific commitments in five  of the 12 GATS sectors:  business services;  
telecommunications services;  construction and related engineering services;  financial services;  and tourism and travel-related services.  It took pa rt in the negotiations on telecommunications and 
financial services after the Uruguay Round and its commitments in both these areas appear in the Fourth and Fifth Protocols to the GATS.  Colomb ia established exemptions to the principle of 
MFN treatment as regards telecommunications, audiovisual services, financial services and land 
transport.
71 
93. As part of its horizontal commitments under the GATS, Colombia reserved the right to 
maintain restrictions on ownership of real es tate by foreigners in border regions, along the 
Colombian coastline and in the islands of the San Andrés and Providencia archipelago.  It undertook 
to allow up to 10 per cent of unskilled workers and 20 per cent of skilled employees or specialists, 
administrative staff or persons in posts of r esponsibility in companies employing more than 
ten persons to be foreigners. 
94. During the services negotiations in the Doha R ound, Colombia submitted an initial offer in 
September 2003 and a revised offer in July 2005.72 
95. Since 1998, Colombia and the other CAN me mbers have had a general framework of 
principles and rules for liberalization of trade in services in the Andean region, contained in 
Decision No. 439.73  The liberalization process is based on a negative list approach under which 
measures contrary to the market access and nati onal treatment provisions in Decision No. 439 are 
listed in an inventory.  The inventories of meas ures maintained by each country were adopted in 
October 2001.74  Colombia's inventory comprises 75 measur es, nine of which apply to all sectors.  
The remaining measures apply to business services, financial services, teaching services, 
environmental services, transport services and communications services. 
(i) Financial services 
(a) Market features 
96. In December 2011, Colombia's financial sect or comprised 69 credit institutions, including 
23 banks.  There were also 61 insurance compan ies and 51 insurance broke rs, 159 other financial 
institutions such as trusts and stock-brokers.  De spite the large number of institutions, the trend 
                                                      
71 WTO documents GATS/EL/20 of 15 April 1994 and GATS/EL/20/Suppl.1 of 28 July 1995. 
72 The initial offer is contained in WTO docu ment TN/S/O/COL of 18 September 2003. 
73 CAN Decision No. 439 of 11 June 1998. 
74 Idem ., Decision No. 510 of 30 October 2001. Colombia WT/TPR/S/265 
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  towards concentration of financial institutions has continued, particularly in the case of banks, as 
already indicated during the previous review.  Colo mbia's largest bank, the Bank of Colombia, holds 
21.7 per cent of the assets in the banking sector, an d the second bank, the Bank of Bogotá, 14 per 
cent.  Together, the five largest banks hold 63 per cent of assets.  Similarly, in the insurance sector, 
two insurance companies hold around 40 per cent of the assets in the life insurance branch and four 
have around one half of the assets in the general insurance branch. 
97. In November 2011, the financial system's assets, including funds managed by entities 
overseen by the SFC amounted to Col$724.57 tr illion (US$372 billion), 15 per cent above the level a 
year earlier, corresponding to annual real growth of 10.64 per cent.75  Of these funds, 
Col$405.44 trillion were assets belonging to entiti es overseen by the SFC and Col$319.13 trillion 
were funds managed by monitored entities (for exam ple, mutual funds).  The assets of loan 
institutions amounted to Col$322.5 trillion (Col$359.7  trillion if the specialized official institutions 
are included) (Table IV.6).  Assets and funds managed by trust companies and pension funds 
amounted to Col$102.5 and Col$102.9 trillion, respectively. 
Table IV.6 
Structure of the financ ial sector, December 2011 
Establishment Number of 
establishments Assets 
Loan establishments   69 Col$359.686 billion  
  (% of total assets) 
Banks 23 76.8 
Colombian private capital 13 55.4 
Foreign private capital 9 16.3 
Public capital 1 5.1 
Financial corporations  4 1.3 
Colombian capital 2 1.2 
Foreign capital 2 0.1 
Commercial financing companies 24 8.6 
Cooperatives 7 1.2 
Specialized official institutionsa 11 12.0 
Insurance companies   115 Col$35.541 billion 
  (% of total assets) 
Life insurance companies 19 30.6 
General insurance companies 23 62.5 
Capitalization companies 5 4.3 
Insurance and reinsurance brokers 54 0.9 
Insurance cooperatives 2 1.3 
Agencies of foreign reinsurers in Colombia 12 .. 
Other financial institutions   159 Col$10.208 billion 
  (% of total assets) 
General deposit warehouses  4 5.3 
Managers of pension and retirement funds 12b 27.5 
Managers of low value payment systems 6 3.6 
Specialized foreign exchange intermediation and financial services 
companies 2 0.3 
Trust companies 27 18.7 
Investment management companies 10 0.7 
Stockbrokers 55 41.7 
Mutual funds 43 0.8 
Other (suppliers of infrastructure) 13 1.4 
                                                      
75 SFC (2011). WT/TPR/S/265 Trade Policy Review 
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  Establishment Number of 
establishments Assets 
Total 356 Col$405.435 billion 
.. Not available. 
a Second tier institutions, including Bancóldex and FOGAFIN , FINDETER, FEN, FINAGRO, ICETEX, FONADE, the National 
Savings Fund, FOGACOOP, FNG and the Military Housing Fund. 
b Six private institutions and six public institutions (entities managing the joint aver age-premium plan with defined benefit).  
Source : SFC. 
98. In response to the international financial cr isis, in late 2008 a nd early 2009 financial 
institutions were requested to defer the distribution of  profits and to build up reserves to deal with any 
deterioration in their financial situation.  The c ountercyclical component provided for in Colombia's 
regulations was used to address changes to the risk situation (see below).  Moreover, risk 
methodologies were revised, and in some instan ces updated in the light of recent international 
experience, together with some elements of the Credit Risk Management Scheme (SARC), security 
valuation and losses caused by unsecured consumer credit default. 
(b) Legal framework, sectoral policies and WTO commitments 
99. Article 335 of Colombia's Constitution provides th at financial, stock market and insurance 
activities, to the extent that they involve handling,  utilizing or investing deposits, are activities of 
public interest, and therefore require State authori zation, as prescribed by law.  The Constitution also 
states that, when intervening in su ch activities, the Government must foster democratization of loans. 
100. The Constitution also specifies how responsibiliti es are shared among the various authorities 
which issue regulations on the conduct of financ ial activities.  The Congress of the Republic is 
empowered to enact framework laws to regulate fi nancial, stock market and insurance activities, as 
well as the handling, utilization and investment of resources deposited by the public.  On the basis of 
these framework laws, the Executive may issue decrees to regulate financial activities:  these decrees 
have wider scope than ordinary decrees and are in the form of decrees having force of law, in other 
words, legal rules with force of law issued by the Executive in exercise of its general regulatory 
powers without the need for prior authorization from the Legislature. 
101. The Constitution also provides that the Executive is responsible, in accordance with the law, 
for the inspection, oversight and control of persons engaged in financial, st ock market or insurance 
activities or any other activity involving the handling,  utilization or investment of resources deposited 
by the public.  This function is exercised through Co lombia's SFC, a technical body with financial and 
administrative autonomy, which issues general regula tions contained in resolutions and circulars in 
order to inform the institutions concerne d how they should conduct their activities. 
102. The Bank of the Republic acts as the central bank.  It is organized in the form of a legal 
person under public law, with administrative, financ ial and technical autonomy, and is subject to a 
legal regime specific to it.  The following are the basic functions of the Bank of the Republic:  to 
regulate the supply of money, international exchange  and credit;  issue the legal currency;  manage 
international reserves;  act as lender of last resort  and banker for loan establishments;  and serve as the 
Government's fiscal agent.  The Bank of the Republic 's Board of Directors is the highest monetary, 
exchange and credit authority which, subject to the framework laws enacted  by Congress, issues 
resolutions and circular letters in this respect.  Thes e regulations are also of a special nature and their 
status is similar to that of a law. Colombia WT/TPR/S/265 
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  103. To summarize, the regulations applicable to th e financial sector are organized according to a 
line of authority, i.e.:  at the top, Colombia's Po litical Constitution;  next, the framework laws enacted 
by the Congress of the Republic, ordinary legislation,  resolutions and circular letters issued by the 
Bank of the Republic in exercise of its functions, and decrees having force of law issued by the 
Government in exercise of its special powers, such as the Basic Statute of the Financial System.  At 
the next level down are the regulatory decrees issu ed by the Government to implement framework 
laws and, finally, circulars and resolutions issu ed by the SFC in exercise of its inspection and 
oversight responsibilities. 
104. Pursuant to Article 2 of Decree No. 4.712 of 2008, the Ministry of Finance and Public Credit 
is in charge of defining, formulating and im plementing the country's economic policy, including 
financial, exchange, monetary and credit policy, without prejudice to the role given to the Board of 
Directors of the Bank of the Republic or the res ponsibilities it exercises through designated or related 
bodies in order to conduct activities requiring State intervention in financial, stock market or 
insurance activities or any other activities concerni ng the handling, utilization or investment of 
resources derived from public savings and the national treasury.  The Ministry of Finance and Public 
Credit coordinates financial, monetary, credit, exchange and fiscal policies with the Board of 
Directors of the Bank of the Republic. 
105. The Ministry of Finance and Public Credit is also responsible for preparing draft decrees and 
issuing resolutions, circulars and other administrative  acts of a general or specific nature required to 
carry out its functions;  for helping to control and detect money-laundering op erations;  regulating the 
public securities market through the SFC;  participatin g in drawing up regulations for financial, stock 
market, insurance and cooperative activities and any other activities concerning the handling, 
utilization or investment of resources derived from public savings, in coordination with the SFC or the 
Supervisory Authority for Economic Solidarity, and also in drawing up social security regulations;  and managing the resources of the Regional Author ities' National Pension Fund (FONPE).  The SFC 
and the Supervisory Authority for Economic Solidarity  are attached to the Ministry of Finance and 
Public Credit. 
106. The minimum capital requirements for the various types of financial institution are 
determined by law, in accordance with Article 80 of the Basic Statute of the Financial System.  They 
are updated annually to reflect inflation, measure d by the increase in the CPI, furnished by DANE 
(Table IV.7), and calculated by the corresponding multiplication in millions of pesos. 
Table IV.7 
Minimum capital requirements for entities  subject to SFC co ntrol and oversighta, 2006-2011 
(Col$ millions, unless otherwise indicated) 
Type of establishment 2006 2007 2008 2009 2010 2011 (Nov)
Banking establishments 56,823  59,369  62,748  67,561  68,913  71,098  
Financial corporations 20,665  21,591  22,820  24,571  25,063  25,858  
Commercial financing companies 14, 638  15,294  16,165  17,405  17,754  18,317  
Trust companies 4,309 4,503  4,760  5,126  5,229  5,395 
Pension fund management companies 8,612  8,998  9,510  10,240  10,445  10,777  
Retirement fund management companies 4,309  4,503  4,760  5,126  5,229  5,395  
Pension and retirement management fund comp anies 12,918  13,497  14,265  15,360  15,668  16,165  
Other financial establishments 3, 447  3,602  3,807  4,099  4,181  4,314  
Foreign exchange dealersb  5,168  5,400  5,708  6,145  6,269  6,468  
Inflation at Decemberc (%) 4.48 5.69 7.67 2.00 3.17  
a As provided by Article 80 of Law No. 795 of 2003. 
b External Resolution No. 8 of 2000 of the G overning Board of the Bank of the Republic. 
c Annual variation in the total national weighted  average CPI at December, calculated by DANE. 
Source :   SFC. WT/TPR/S/265 Trade Policy Review 
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  107. Savings and loan cooperatives, which are authori zed to provide financial services only to their 
members and are supervised by the Supervisory Authority for Economic Solidarity, must have 
minimum amounts of capital, known as "minimum social contributions in the solidarity sector", pursuant to Article 42 of Law No. 454 of 1998.  As  is the case for financial institutions, these amounts 
are updated annually according to Article 80 of the Basic Statute of the Financial System. 
108. Savings deposits are guaranteed by the Fina ncial Institutions Guar antee Fund (Fogafin), 
created by Law No. 117 of 1985, which is an aut onomous legal person under public law of a unique 
nature, subject to monitoring by the SFC.  Fogafin' s overall objective is to preserve the trust shown by 
depositors and creditors in regist ered financial institutions, mainta ining balance and economic equity 
and preventing unjustified economic or  other benefits accruing to share holders and managers that are 
harmful to the financial institutions.  Fogafin is  empowered to act to strengthen the registered 
institutions financially and to participate temporarily in their capital. 
109. Fogafin is also in charge of organizing and implementing the Deposit Insurance Scheme and, 
consequently, for buying up the obligations of ins titutions being liquidated or providing finance for 
those with savings in such institutions.
76  The Deposit Insurance Scheme is a mechanism which, 
before any financial institution registered with  Fogafin is liquidated, guarantees depositors the 
recovery of all of part of their deposits.  If a re gistered financial institution is liquidated and taken 
over by the SFC, the deposit insurance is paid out by  Fogafin.  The institutions registered with 
Fogafin and covered by the insurance consist of ba nks, financial corporations, finance companies and 
other institutions whose establishment has been authorized by the SFC. 
110. In January 2012, the maximum insurance cover was Col$20 million per depositor, applicable 
independently for each financial institution register ed.  The deposit insurance is financed through the 
premiums paid by the institutions registered.  The premiums correspond to 0.3 per cent annually of 
the amount of their liabilities to the public and are pa id quarterly;  in some situations, there may be 
additional charges or refunds.77  The following products are covered by the insurance:  current 
account deposits, simple deposits, fi xed-term deposit certificates (C DT), savings deposits, special 
savings accounts, mortgage bonds, special deposits , collection banking services, and unemployment 
funds managed by the National Savings Fund. 
111. The SFC requires that supervised institutions should formulate and implement a Market Risk 
Management System (SARM) to enable them to identify, assess, control and monitor such risks 
effectively.  Such a system should enable the in stitutions monitored to adopt timely decisions for 
appropriate risk mitigation and, where applicable, to  determine the appropriate amount of capital to be 
maintained in relation to the risk level of each  institution.  The SARM implemented by loan 
institutions, special official institutions and high er-level cooperative bodies and that relating to own 
account operations and own resources of stockbrokers mu st enable them to manage their market risk 
satisfactorily and calculate the amount of capital  they need to maintain to cover it.  The 
                                                      
76 For further details, see online information from Fogafin.  Viewed at:  https://www.fogafin.gov. 
co/Web/Formularios/Public/Content/ frmContent.aspx?id=119&padre=90. 
77 Pursuant to the current legal requirements, Fogafin gives a refund or makes an additional charge for 
premiums based on the annual CAMEL status of each en tity, calculated according to a system of weights and 
ratings.  Each indicator has a range of one to five, in which one is the minimum number of points and five the 
maximum.  In order to receive a refund, the in stitution's average CAMEL cl assification must exceed 
three points.  The refund corresponds to a percentage ranging from 0.01 to 50 per cent of the amount paid during the year immediately preceding as a deposit insurance pr emium.  If the institution's classification is less than 
three, it has to pay an additional amount corresponding to a percentage ranging from 0.01 to 50 per cent of the 
amount paid during the previous year as a deposit insurance premium. Colombia WT/TPR/S/265 
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  SARM implemented by trust companies, pension and retirement fund management companies, 
investment management companies, average pr emium plan management institutions, insurance 
companies and capitalization companies must permit them to manage the market risk independently, 
both as regards the company's cash flow and the joint funds or portfolios they ma nage.  In general, the 
SARM must take into account the following market risk s:  interest rate in legal currency;  interest 
rates;  exchange rates;  share prices;   and investment in joint portfolios. 
112. In order to deal with any external s hocks, among Colombia's individual provisions78, besides 
a pro-cyclical component corresponding to the share of the individual provision in the loan portfolio that reflects the credit risk of each debtor therein, there is an individual countercyclical component 
corresponding to the share of the individual provision  that reflects possible ch anges in the credit risk 
of debtors when these shares fall still further.  This provision is constituted in order to lessen the impact of unforeseen circumstances. 
113. Government policy on the financial system is b ased on three elements:  financial inclusion, 
development of the capital market, and prudential polic y.  As far as financial inclusion is concerned, 
the Ministry of Finance and Public Credit, to gether with the Ministry of Information and 
Communications Technology (MINTIC) and the vari ous industries concerned, have embarked upon 
the task of raising the level of formalization and facilitation for mass access to financial services, by using new technology and lowering the costs of tran saction services.  In order to boost the level of 
formalization, the Government has promoted the in troduction of credit records for clients in order to 
facilitate access to loans, together with revision of the existing guarantee scheme.  The capital market 
development policy has focused on building a long-ter m vision in order to develop the capital market 
as an efficient source of financing for the pr oduction sector, raising the level of financial 
intermediation and promoting its role as a supplier of  risk transfer mechanisms.  Another objective is 
to make the capital market into an investment a lternative for savings in the economy.  The 2010-2014 
National Development Plan pinpoints the need fo r progress in defining the vision and overall policy 
for developing the capital market in support of the production sector.  For this purpose, a policy 
document (CONPES) will be implemented, defining strategies that cover aspects such as the regime 
to protect investors, the operation of the fixed and variable income market, the development of 
investment vehicles, risk transfer mechanisms and the securities market infrast ructure.  It is also 
planned to consolidate the process of convergence with international accounting standards.  The 
authorities have indicated that, in December  2012, the International Financial Reporting 
Standards (IFRS) and the International Accounting St andards (IAS) will come into effect for issuers 
of securities and bodies of public interest.
79  In December 2011, the Government issued the 
regulations that enable voluntary convergence with the IFRS.80 
114. As regards prudential measures, the Ministry of Finance and Public Credit has drawn up a 
programme of regulatory reforms whose priority is to revise the capital quality and solvency 
requirements for all financial industries.  It is expected that these reforms will come into effect 
gradually by type of industry.  This process, as well as the impact of the possible reforms on the 
financial system's stability, is discussed in the T echnical Subcommittee of the Financial Monitoring 
Committee, composed of the Ministry of Finance,  the SFC, the Bank of the Republic and Fogafin.  
                                                      
78 Defined in paragraph 1.3.4.1.1. of the SFC's Basic Accounting and Financial Circular - Calculation 
of individual provisions under reference models. 
79 Public interest bodies are those which receive, handle or manage resources from the public, for 
example, banking institutions, financial corporations, co mmercial financing companies, financial cooperatives, 
capitalization companies, insurance companies or pension fund management companies. 
80 Decree No. 4.946 of 2011 issuing provisions on the exercise of voluntary application of international 
accounting and financial reporting standards. WT/TPR/S/265 Trade Policy Review 
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  The authorities have indicated that, through this programme, it is sought to achieve a proper balance 
between an ambitious policy for inclusion and ac cess to financial services (including the capital 
market), its sustainability and the stability of the financial system. 
115. In its WTO commitments, Colombia include d an exemption from the principle of 
MFN treatment for financial services by making access to the financial services market by foreign 
suppliers subject to the existence of "satisfactor y possibilities of access" for Colombian suppliers in 
the country of origin of the foreign suppliers.  Colombia's specific commitments indicate that 
authorization for financial establishments is subject  to an economic needs t est.  The establishment of 
branches is not allowed, and the supply of fina ncial services requires prior government approval.81  
Colombia undertook not to impose limitations on cross-border supply or consumption abroad for 
reinsurance and retrocession services.  The commitments on the presence of natural persons do not go beyond those in the horizontal commitments. 
(c) Banking services 
116. The Ministry of Finance and Public Credit is  involved in regulating banking activities in 
coordination with the SFC or the Supervisory Aut hority for Economic Solidarity.  According to the 
Basic Statute of the Financial System, the SFC's ma in task is to inspect, supervise and control the 
institutions composing the financial system.  The SFC may issue resolutions, external circulars and circular letters to the institutions subject to its s upervision.  The Bank of the Republic is the highest 
exchange, monetary and credit authority, as provide d by Law No. 31 of 1992 (see Chapter I(2)(iii)). 
117. Colombia has made a number of reforms to the legal framework for its banking sector since 
the previous Review in 2006 (Table IV.8).  The most important laws remain Law No. 45 of 1990 and 
Law No. 35 of 1993, which establish the legal basis fo r the functioning of the financial sector.  During 
the period under review, Law No. 1.328 of 2009 was introduced, inter alia, to deal with the 
2008-2009 global financial crisis by  reinforcing the SFC's activities and supervisory responsibilities 
(see below). 
Table IV.8 
Principal legislation governing bank ing and securities activities 
Legislation Content 
Law No. 45 of 1990 issuing rules on financial 
intermediation, regulating insurance activities, 
giving certain powers, a nd issuing other provisions  Structural reform of Colombia's financia l system.  Liberalization of markets and 
internationalization of the economy, introduction of the multi-bank model.  
Authorizes loan establishmen ts to participate in owners hip of institutions managing 
portfolios, engaged in trust fund activ ities, managing pensions and retirement 
funds, selling insurance and broking.  Al so contains provisions on insurance 
activities:  general;  criteria for access to insurance activities;  requirements for 
engaging in insurance activities;  annulment or suspension of authorization permits;  
dissolution and official insurance.  
Law No. 35 of 1993 establishing general rules and 
indicating therein the objectives and criteria to be 
observed by the National Government in regulating 
financial, stock market and insurance activities and any other activity concerning the handling, 
utilization or investment of resources deposited by 
the public, and issuing othe r provisions on financial 
and insurance matters Regulates intervention, inspection, su pervision and control by the National 
Government over financial, stock mark et and insurance activities.  Defines 
procedures for selling government shares in financial institutions and insurance 
establishments. 
                                                      
81 WTO document GATS/SC/20/Suppl.3 of 26 February 1998. Colombia WT/TPR/S/265 
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  Legislation Content 
Law No. 510 of 1999 issuing provisions concerning 
the financial and insurance system, the public 
securities market, the Supervisory Authorities for Banking and Securities, a nd granting certain powers Reform of the financial system, includi ng changes to the takeover regime and 
requirements for establishing financial institutions.  It also creates a new long-term 
mechanism for housing loans.  This Law was amended and partly repealed by Laws No. 676 of 2001 and No. 964 of 2005, and by Article 54 of Decree No. 775 
of 2005. 
Law No. 546 of 1999 issuing rules on housing, 
indicating the overall objectives and criteria to be 
observed by the National Government in regulating a 
special mechanism for its financing, creating tools for savings to be used for such financing, 
determining measures rela ting to taxes and other 
costs for building and buying and selling of housing, and issuing other provisions Amends the structure for financing housing by introducing a so-called constant real 
value unit (UVR), which is used to ad just the value of loans over time in 
accordance with living costs (C PI).  The Law authorizes CONPES to determine the 
methodology for calculating the value of the UVR.  Currently, this value is 
calculated by the Bank of the Republic for each day of the year.  Develops models 
and structures for mortgages and enc ourages the development of government 
guarantees for loans for social housing. 
Law No. 795 of 2003 modifying certain rules in the Basic Statute of the Financial System, and issuing other provisions Introduces changes to institutions that preserve and protect public trust, the 
exclusion of assets and liabilities and gra dual dismantling of operations.  It also 
reforms the sanctions regime.  Includes ru les on the following issues:  conflict of 
interest regime, rules of conduct for mana gers, users' rights to information, and 
authorizes loan establishments to carry out two new operations:  non-trust management of portfolios and residential leasing operations. 
Law No. 964 of 2005 issuing general rules and 
indicating therein the objectives and criteria to be observed by the National Government in regulating 
the handling, utilization or investment of resources 
deposited by the public in th e form of securities, and 
issuing other provisions (Securities Market Law) Issues provisions on:  objectives and cr iteria for intervention by the National 
Government involving the handling or inve stment of resources deposited by the 
public in the form of securitie s, activities in the securitie s market and the concept of 
value, supervision of the overall s ecurities market information system, 
compensation schemes and fulfilment of obligations, accounts records and 
securities transactions, central counterpa rty risk houses, self-regulation of the 
securities market, protection of investors,  violations, administrative penalties and 
sanctions procedure. 
Law No. 1.328 of 2009 issuing rules relating to 
financial, insurance and securities market matters, 
and other provisions Introduces a regime to protect financial consumers including, inter alia , the 
following topics:  rights and obligations, Financial Consumers Service 
Scheme (SAC), provision of information to consumers and clauses on abusive 
practices.  It also makes changes to th e Colombian pension scheme by creating a 
multi-fund system, which must take into account  the risk profile of those affiliated.  
The Law authorizes loan institutions to  carry out two new operations (granting 
loans in order to take over control of  other companies or associations and 
conducting leasing and rental operations w ithout purchase options) and classifies 
the former exchange houses as financial services companies, changing their legal 
title to "exchange intermediation and speci al financial services companies" and 
authorizing them to conduct new opera tions, making them non-banking agents.  
The Law also introduces changes to ensure compliance with Colombia's 
commitments under trade integration agreemen ts with other countries with a view 
to liberalizing trade in financial services .  The Law gives the SFC the authority to 
carry out comprehensive and consolidated supervision. 
Decree No. 663 of 1993 updating the Basic Statute 
of the Financial System, amending its headings and 
numbering Regulatory text incorporating all the legisl ation applicable to the financial sector 
and, as a compilation of laws, has force of law.  The Statute has been updated over 
time by incorporating laws enact ed subsequent to its adoption. 
Decree No. 2.555 of 15 July 2010 compiling and 
reissuing rules on the financial, insurance and 
securities market sector, and issuing other provisions New updated compilation of the main rule s governing the financial and insurance 
sector. 
Source : SFC. 
118. As the financial sector is deemed to be of public interest according to the Constitution, an 
authorization permit must be obtained from the SFC in order to set up and operate a bank in 
Colombia, including the subsidiary of a foreign bank.   The requirements for the permit are set out in 
the Basic Statute of the Financial System and incl ude, in addition to the cr iteria for establishment and 
minimum capital requirements, a study proving sa tisfactorily that the company is viable.  The 
requirements do not differ according to the origin of the capital, except in the case of applications to 
set up a subsidiary of a foreign bank, in which case the SFC is empowered to seek information in 
order to be sure that the subsidiary will be the subject of supervision on the part of the competent 
foreign authority jointly with th e parent company, in accordance w ith generally accepted international 
principles. WT/TPR/S/265 Trade Policy Review 
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  119. Before giving a new financial institution a permit to operate, the SFC must publish a 
notification of the intention to set up the instituti on in a national newspaper, giving as a minimum the 
names of the persons it is proposed to associate in the business, the name of the planned institution, 
the amount of its capital and the place in which it w ill operate;  this notification must be published 
twice, at a seven-day interval.  The SFC has six months in which to take a decision and issue the 
permit.82  The SFC may refuse a permit when an application does not meet the requirements laid 
down in the law or when, in its view, the appli cants have not provided satisfactory proof of the 
character, responsibility, suitability and financial solven cy of the persons taking part in the operation.  
An authorization permit issued to a bank by the SFC is for an indefinite period and may not be 
assigned.  In 2011, the minimum capital required to set up a bank in Colombia was 
Col$71,098 million (arou nd US$37.4 million). 
120. There are no legal limitations on private cap ital holdings in commercial banks, including 
foreign capital.83  Foreign investors may hold capital in ins titutions subject to control and supervision 
by the SFC, taking up or buying shares, bonds convertib le into shares or cooperative contributions in 
any amount.  With the exception of matters relati ng to the transfer of resources abroad, foreign 
investment in Colombia shall, for all purposes, be treated in the same way as investment by 
Colombian citizens.  Foreign banks may set up a subsidiary or open a representative office in Colombia, but not a branch.  All banks domiciled in Colombia, including subsidiaries of foreign 
banks, must be set up in the form of comme rcial public limited companies or cooperative 
associations.
84 
121. In order to promote their products in Colo mbia, banks with foreign capital must be 
established in Colombia.  Establishment in Colomb ia gives the right to supply the same services as 
banks with Colombian capital, as the services whic h banks may offer do not differ according to the 
origin of their capital.  Colombian residents may ma ke deposits with foreign ba nks without an official 
authorization, but they must register with the Bank of the Republic in order to obtain a loan from a foreign bank.
85  Pursuant to Decree No. 2.951 of 2004, there are no restrictions on the amount of 
transactions with foreign establishments. 
122. There are no legal limitations on the number of banks that may operate in Colombia, nor on 
the number of agencies which banks may open once established in Colombia.  An authorization from 
the SFC must be obtained in order to open or close an agency.  The ser vices which banks may offer 
are set out in the Basic Statute of the Financial Syst em.  SFC authorization must also be obtained in 
order to open a representative office of a foreign bank.  The requirements for such a permit are set out 
in Decree No. 2.951 of 2004.  Representative offices  must have a representative for Colombia, and are 
not subject to minimum capital requirements. 
123. Any transaction by national or foreign investors intended to acquire 10 per cent or more of the 
paid-up shares of any body subject to SFC supervis ion, whether carried out in one or more operations, 
requires approval from the SFC, which must ensure th at the transfer of the shares will be to the 
public's advantage.  SFC approval is not necessary when the persons seeking to buy shares or bonds to 
be converted into shares in the same institution have obtained such approval within the three years 
preceding the date of the transaction in question. 
                                                      
82 Basic Statute of the Financial System, Article 53. 
83 Basic Statute of the Financial System , Article 91. 
84 Basic Statute of the Financial System , Article 53. 
85 Articles 24 and 55 of Resolution No. 8 of the Bank of the Republic of 2000. Colombia WT/TPR/S/265 
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  124. The SFC must be notified of any mergers of  financial institutions.  After receiving 
notification of the merger, it may object within tw o months thereafter, but may only do so in the 
following cases:  if the takeover company or the new company does not comply with the minimum 
capital requirements laid down in the law;  if the takeover company or the new company does not 
comply with the appropriate levels of assets or solv ency rules in force;  if, as a result of the merger, 
the takeover company or the new company is able to  maintain or fix unfair prices, limit services or 
prevent, restrict or distort free competition in the markets in which it participates, either as a parent 
company or through one of its subsidiaries (provide d that the takeover company or the new company 
covers at least 25 per cent of the corresponding market);   or if the merger might be contrary to the 
public interest or the stability of the financial system. 
125. Financial institutions, with the exception of fina ncial corporations, may have a holding in the 
capital of:  trust companies, stock-brokers, general deposit warehouses and companies managing 
pension and retirement funds;  and in companie s providing technical or administrative services, 
including security, management of custodial accounts and related services, collection services and companies providing computer systems and services.
86  Their holdings in such financial services 
companies may not be less than 51 per cent, exce pt in the case of deposit warehouses.  Total 
investment by a bank in other companies may not exceed 100 per cent of its capital, capital reserves and capital revaluation account. 
126. The banking intermediation margin fell from 9 per cent in 1995 to around 7 per cent in 2005.  
This partly reflects resurgent competition and the ma rked improvement in the quality of portfolios in 
recent years.  The lower loan risk of companies and consumers as a result of growing macroeconomic 
stability has also helped to narro w the margin.  Nevertheless, measu res such as the tax on financial 
transactions and mandatory investment by loan  establishments, for example, in agricultural 
development instruments, has meant that the interm ediation margin has not narrowed still further and 
that the cost of credit has remained at a relativ ely high level (see also Chapters I and IV(2)). 
127. Interest rates in general are determined by the market, except for those covered by legal 
provisions.  Nevertheless, the SFC a pproves a current bank interest rate each month on the basis of the 
information supplied by financial establishments for the previous month.  Pursuant to Article 884 of 
the Commercial Code and Decree No. 2.555 of 2010, the interest rates that banks charge on loans and 
loan arrears may not exceed one and a half times the current bank interest rate, which serves as a 
benchmark, i.e. an annual effec tive rate of 50.18 per cent for microcredit and 29.88 per cent for 
consumer and ordinary loans.  These figures result from SFC approval of the annual effective current 
bank rate of interest of 33.45 per cent for microc redit and 19.29 per cent for consumer and ordinary 
loans for the period from 1 October 2011 to  30 September 2012 and from 1 January to 
31 March 2012, respectively.  Interest on housing loan s is also subject to ceilings determined by the 
Bank of the Republic.
87 
128. The prudential indicators for banking have remained sound throughout the period under 
review.  Average solvency (risk-weighted capita l adequacy ratio) rose to 14.6 per cent in 
November 2011, above the average for the previous  decade (14.12 per cent) and notably in excess of 
the regulatory minimum, which is 9 per cent.  Non-performing loans represented 2.8 per cent in 
November 2011.  The level of coverage of  non-performing loans was 163.5 per cent in 
                                                      
86 External Circular No. 007 of 1996, Title I, Chapter VII, paragraph 2.2. 
87 Law No. 546 of 1999. WT/TPR/S/265 Trade Policy Review 
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  November 2011.88  The improvements in the prudential indicator s are to a large extent the result of the 
reforms to the regulatory and supervisory framework. 
129. In 2011, regulated financial in stitutions continued to record relatively high profits, even 
though these were less than for 2010.  The profits  from managed funds, on the other hand, plummeted 
in 2011 compared to the previous year (Table IV.9). 
Table IV.9 
Return on assets and return on equity of supervised institutions and managed funds, 2010, 2011 
(Percentage) 
Type of intermediary November 2010 November 2011 
Return on assets Return on 
equity Return on 
assets Return on 
equity 
Loan establishments  2.2 15.9 2.1 15.4 
Insurance industry  4.6 17.9 1.6 6.7 
Pension and retirement fund management companies  19.1 24.6 11.9 15.1 
Trust companies  17.7 23.4 16.1 21.9 
Stock market companies  2.3 12.5 2.0 8.9 
Brokers on the Colombian Securities Market (BVC)  2.4 13.4 2.0 9.2 
Brokers on the Colombian Commodities Exchange (BMC)  -4.1 -6.2 1.1 1.7 
Investment fund management companies  13.1 15.5 13.7 20.4 
Suppliers of infrastructure  6.6 8.4 5.2 7.0 
Special official establishments  1.3 7.9 1.0 6.3 
Profitability (companies)  2.6 2.1 15.61  13.3 
Pension and retirement funds  14.8 15.0 -1.1 -1.1 
Mandatory pension funds  15.8 15.9 -0.8 -0.8 
Voluntary pension funds  7.4 7.8 -2.7 -2.8 
Retirement funds  11.6 11.7 -2.6 -2.6 
Mutual investment funds  12.6 13.2 -2.3 -2.4 
Funds managed by trust companies  3.8 3.9 3.5 3.6 
Profitability (funds)  10.1 10.4 1.0 1.0 
Source : SFC. 
130. The authorities have indicated that the broad lines of the supervisory process implemented in 
Colombia comply with the standards proposed in  Pillar 2 (supervisory process) of the Basel II 
document.89  As far as capital requirements are concerne d, in Colombia, the minimum capital to assets 
weighted by credit risk is 9 per cent, compared to  the 8 per cent proposed in Basel II.  In order to 
calculate the denominator (weighted assets by cred it risk), Colombia has adopted a standard method 
using the scheme proposed in Basel II, but has re frained from differentiating between establishments 
that have different external classification levels, as Basel II suggests.  The authorities have indicated 
that a working group composed of members of th e financial security network is working on bringing 
Colombia's standard model closer to that proposed  by the Basel Committee in the Basel II document. 
131. The authorities have also indicated that Colomb ia has not adopted an internal model method 
to calculate exposure of banks to credit risk for the purposes of the minimum capital requirements, 
other than the suggestions in Basel II.  Colo mbia uses a VaR methodology to calculate the 
capital/market risk ratio but has not adopted a capital/operating risk system. 
                                                      
88 SFC (2011). 
89 The Basel II document proposes a banking regulation scheme consisting of three pillars:  minimum 
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  132. The Basic Statute of the Financial System oblig es banks to adopt control mechanisms in order 
to ensure that their transacti ons are not used to launder money.90  Such mechanisms must meet the 
minimum requirements set out in the SFC's External Circular No. 040 of 2004.91  The Financial 
Information and Analysis Division, under the Mini stry of Finance and Public Credit, draws up and 
implements policies to detect, prevent and combat money laundering. 
133. Since 1998, Colombia has imposed a tax on the majority of financial transactions.92  The tax 
on financial movements (GMF) was designed to be a temporary mechanism to finance the emergency 
measures adopted during the financial crisis.  Th e rate is 0.4 per cent and applies to banking 
operations such as withdrawing cash or transferring resources between financial products, and to joint 
portfolios.  The current Government planned to scal e down the tax until it is to tally abolished in 2018. 
134. As to loans granted by banks, in 2011, ar ound 30.2 per cent were for consumption, 23 per 
cent for industry, 12 per cent for trade and 8.6 per cent for the purchase of re al estate.  Agricultural 
credit accounted for only 2.1 per cent of commercial banks' portfolios (Table IV.10). 
Table IV.10 
Trend in the net loans portfolio and receipt of de posits in the commercial banking sector, 2006-2011 
(Col$ millions and percentage) 
 2006 2007 2008 2009 2010 2011 
Assets 158,399,694 188,256,597 219,376,834 239,021,692 274,852,167 309,644,395 
Total loans 100,067,986 126,945,637 149,424,717 152,980,095 178,707,292 203,629,327 
US$ equivalent 44,697 63,008 66,601 74,835 93,396 114,164 
Loans by economic sector (% of total loans) 
Agriculture 1.91 1.87 1.86 2.25 2.22 2.1 
Industry 22.91 22.76 25.72 24.26 23 23.04 
Services 22.13 21.36 19.88 19.88 22.47 21.5 
Real estate 9.2 8.63 8.22 8.9 7.86 8.62 
Trade 13.72 13.37 12.97 12.91 12.61 12 
Consumption 28.5 30.27 29.37 29.6 29.37 30.21 
Other 1.65 1.75 1.98 2.26 2.47 2.5 
Total deposits in Colombian and 
foreign currency 106,384,507 125,461,052 147,694,464 157,474,234 172,313,435 190,899,721 
US$ equivalent 47,519 62,271 65,830 77,034 90,029 107,027 
Maximum interest rates (% annual) 32.08 33.93 33.93 36.89 44.00 32.08 
Loans (%) 13.04 16.61 17.72 9.92 8.23 10.96 
Deposits (%) 6.75 8.82 10.25 4.22 3.47 4.00 
Source : SFC. 
(d) Insurance services 
135. The SFC is also responsible for supervising Co lombia's insurance sector.  During the period 
under review, some reforms to the sector's legal fra mework were introduced, the main ones being Law 
No. 1.28 of 2009 or Financial Re form Law in 1997 (Table IV.11). 
                                                      
90 Articles 102-107. 
91 Chapter XI, Title I. 
92 Article 29 of Decree No. 2.331 of 1998 and Laws No. 633 of 2000 and No. 863 of 2003. WT/TPR/S/265 Trade Policy Review 
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  Table IV.11 
Principal laws regulating insurance activities 
Legislation Description 
Law No. 45 of 1990  Issues rules on financial intermediation, regulates insu rance activities, giving certain  powers, and determines 
other provisions  
Law No. 35 of 1993 Establishes general rules and indicates ther ein the objectives and criteria to be observed by the National 
Government in regulating financial, stock market a nd insurance activities and any other activity concerning 
the handling, utilization or investment of resources deposited by the public, and issues other provisions on 
financial and insurance matters 
Law No. 795 of 2003 Adapts certain rules in the Basic Statute of the Financial Sector, and determines other provisions 
Law No. 964 of 2004 Determines general regul ations and indicates therein the objectives  and criteria to be observed by the Nati onal 
Government in regulating activities relating to the handl ing, utilization or investme nt of resources deposited 
by the public in the form of secu rities, and issues other provisions 
Law No. 389 of 1997 Amends Articles 1.036 and 1.046 of the Commercial Code 
Law No. 1.328 of 2009 Issues rules on financial, insuran ce and securities market matters, and other provisions 
Decree No. 2.555 of 
15 July 2010 Compiles and reissues rules on the financial, insuran ce and securities market sector, and determines other 
provisions 
Source : SFC. 
136. In order to be able to provide insurance servi ces in Colombia, insura nce companies must be 
legally established in the country.  SFC authorization must be obtained to set up and operate an 
insurance company in Colombia.  The requirements for the permit and the procedures followed by the 
SFC when granting it are the same as those for banks.  Permits are granted to provide specified types 
of insurance.  Companies authorized to provide personal life insurance or reinsurance may not offer 
other types of insurance. 
137. In 2011, the minimum capital required to set up an insurance company was Col$6,480 million 
(around US$2.8 million), except for companies which only provide export credit insurance, for which 
the minimum capital was Col$5,775 million.93  The minimum capital required to set up a reinsurance 
company was Col$25,916 million (approximately US$11. 3 million).  To these amounts must be added 
the technical capital required to operate in each t ype of insurance, which ranges from Col$708 million 
for transport insurance to Col$2,122 million for automobile insurance.94 
138. The requirements relating to solvency margin s and technical reserves laid down in the 
legislation apply equally to companie s with Colombian or foreign capital. 
139. In general, pursuant to Article 61 of Law No . 1.328 of 2009, Colombian residents may not 
conduct insurance operations in Colombia with fo reign companies not authorized to engage in 
insurance activities in Colombia.  Foreign insurance companies may solely and exclusively provide in 
Colombian territory or to Colombian residents insu rance relating to international maritime shipping, 
international commercial aviation and space launching and freight (including satellites), to cover risks 
relating to the goods being transported, the vehi cle transporting the goods and any liability arising 
therefrom, as well as insurance covering goods in  international transit.  The SFC may impose 
mandatory registration on foreign insurance compani es wishing to offer such insurance in Colombia 
or to Colombian residents.  Except for the af orementioned cases, foreign insurance companies may 
not offer, promote or advertise their services in Co lombia or to Colombian residents.  Pursuant to 
Article 188 of the Basic Statute of the Financial System, the SFC may grant exceptions and, for reasons of general interest, to authorize a comp any to conduct insurance activities in Colombia 
                                                      
93 Article 80 of the Basic Statute of the Financial System and Law No. 795 of 2003. 
94 Decree No. 1.222 of 2003. Colombia WT/TPR/S/265 
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  without necessarily being established there.  This cl ause will be repealed as of 15 July 2013 when 
Article 101 of Law No. 1.328 of 2009 comes into force. 
140. Natural or legal persons resident in Colombia may take out any type of insurance abroad, with 
the exception of social-security-related insurance;  mandatory insurance;  insurance for which the 
party insured must, prior to taking out the insurance,  prove that he already has mandatory insurance;  
and insurance in which the party insured is a State body.  Nevertheless, the Government is 
empowered to determine the conditions under whic h government bodies may take out insurance with 
foreign insurance companies. 
141. Likewise, foreign insurance brokers may engage in intermediation in Colombian territory or 
for Colombian residents solely in resp ect of the aforementioned insurance. 
142. There are no legal limitations on private ca pital holdings, including capital from abroad, in 
insurance companies.  Foreign in surance companies may set up a subsidiary or open a representative 
office in Colombia, but not a branch.  All insu rance companies domiciled in Colombia, including 
subsidiaries of foreign companies, must be set up in the form of commercial public limited companies 
or cooperative associations. 
143. There are no legal limitations on the number of insurance companies that may operate in 
Colombia, nor on the number of agencies which in surance companies established in Colombia may 
open.  An authorization from the SFC must be obtained in order to open or close an agency.  There are no differences between the types of service that insurance companies with Colombian or foreign 
capital may supply. 
144. For reinsurance, reinsurers regi stered in the Register of Foreign Reinsurers and Reinsurance 
Brokers kept by the SFC may provide services to Co lombian clients.  Such companies may operate 
from abroad provided that they comply with the af orementioned registration requirements;  they may 
also choose to open a representative office in Colombia.  The criterion taken into account by the SFC 
when examining an application for inclusion in the Re gister is the status given to the company by an 
eligible international agency.  The Legal Basic Circular  lists the eligible agencies and the criteria to be 
met by agencies that are not listed.  At December 2011, 260 companies were listed in the Register of 
Foreign Reinsurers and Reinsurance Brokers;  15 of these had a representative office in Colombia. 
145. An authorization permit from the SFC must also be obtained in order to open a representative 
office of an insurance or reinsurance company.  The requirements for such a permit are the same as 
those for banks.  Such offices must have a repr esentative for Colombia and are not subject to 
minimum capital requirements. 
146. There is no official control of the policies a nd premiums of insurance companies, but they 
must comply with the principles laid down in the Basic Statute of the Financial System.  Insurance 
companies must send models of their policies to the SFC. 
147. The nominal value of premiums in the insura nce industry, including insurance cooperatives, 
amounted to Col$11.851 trillion in 2010 (some US$6,223 million).  Just over 60 per cent was in the 
general insurance branch, while the remainde r related to life insurance (Table IV.12). WT/TPR/S/265 Trade Policy Review 
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  Table IV.12 
Total premiums per branch, 2006-2011 
(Col$ millions)  
Branch  2006  2007  2008  2009  2010  2011  
Life 3,094,136  3,426,359 4,658,624 5,283,690 5,138,138  2,943,447
Personal life 312,723 340,780 366,979 387,909 430,362 210,831 
Joint life 641,309 767,716 850,980 936,597 1,016,264 585,695 
Other life insurance  1,682,744 1,740,810 2,777,179 3,215,291 2,889,697 1,657,133 
Accident and sickness 498,377 576,470 679,569 776,152 861,696 468,020 
Damages  4,165,448  4,740,282 5,166,927 5,617,478 6,116,814  3,355,974
Fire and allied insurance 638,562 660,965 725,846 852,0 85 952,356 495,619 
Vehicles and automobiles 1,444,923 1,667,827 1,727,906 1,740,031 1,892,732 976,451 
Other general insurance  2,477,391 2,813,500 3,169,016 3,565,932 3,875,385 2,189,014 
Bonds  295,455  359,615 350,872 537,031 595,758  309,381
Total  7,555,038  8,526,257  10,176,423  11,438,199  11,850,709  6,608,802  
Source : Information provided by the Colombian authorities.  
(ii) Telecommunications 
148. During the period under review, Colombia made important changes to its telecommunications 
legislation.  In late July 2009, it enacted La w No. 1.341 of 2009 (Information and Communications 
Technology Law, or ICT Law), which conso lidated the legal framework for the sector.95  T h e  
ICT Law repealed the legislation previously in force.96  It also recognizes that "the supply of 
telecommunications networks and services is a public service under State ownership".97  This Law 
replaced the previous system which differentia ted between services and included three regimes 
depending on the type of service (tariff freedom, monitored freedom and regulated tariffs) by a 
general tariff freedom regime.  Law No. 1.341 of 2009, together with Decree No. 4.948 of 2009, 
constitutes the legal framework for In ternet services.  The authorities have indicated that the Law also 
focuses on promoting investment in the information and telecommunications technology sector.  Over the period 2005-2011 there was large-scale investment in the sector, amounting to around Col$26.5 trillion (US$14,700 million), three quarters of  which was private investment (Table IV.13). 
Table IV.13 
Investment in the telecommunications sector, 2005-2011  
(Col$ billions) 
Investment 2005 2006 2007 2008 2009 2010 2011 
Private 2.495 3.083 2.394 3.330 2.810 3.189 3.626 
Public  809 809 809 809 809 809 758 
Total 3.304 3.891 3.202 4.138 3.619 3.998 4.384 
Source : Information provided by the Colombian authorities. 
149. MINTIC (formerly the Ministry of Communications) is responsible for formulating 
telecommunications policy.  Market regulation is the responsibility of the CRC (formerly the 
                                                      
95 Guerra (2009). 
96 Namely, Decree No. 2.870 of 2007 implementing the convergence of tel ecommunications services 
and networks, Decree No. 2.926 of 2005 (amending Decree No. 2.542 of 1997) implementing switched long-distance basic public telephony services (national and international), Decree No. 575 of 2002 
implementing the supply of personal communications services, PCS, Law No. 555 of 2000 regulating the supply 
of personal communications services, PCS, Law No. 422 of 1998 (amending Law No. 37 of 1993) regulating the supply of mobile telephony services, Decree No. 1.900 of 1990 implementing the supply of telecommunications 
services and Law No. 72 of 1989 defining the re gime for telecommunications services concessions. 
97 Law No. 1.341 of 2009. Colombia WT/TPR/S/265 
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  Telecommunications Regulatory Commission), which is  attached to the Ministry.  All telephony 
operators pay 0.1 per cent of their gross income to CRC for the regulatory services provided.  The 
National Spectrum Agency (ANE), under MINTIC a nd created by the ICT Law, carries out technical 
control of the radio spectrum, but it is MINT IC's responsibility to allocate frequency bands.98 
150. There are no limitations on Colombian or fore ign private capital holdings in the supply of 
telecommunications services.  In order to opera te on the domestic market, however, foreign 
companies must set up a br anch office in Colombia.99 
151. Under the legislation in force up to 2009, a s upplier had to request a concession, licence or 
other authorization depending on the telecommunications service it wished to supply.  These were 
granted for up to ten years (renewable) through a sel ection process, mainly in the form of an auction 
in the case of mobile telephony and at the request of the party for other telecommunications services, 
depending on availability in the spectrum.  The pe rmits granted were renewed for the same term 
originally granted provided that the supplier met th e requirements laid down in the legislation.  
The 2009 ICT Law has provided a general authoriza tion regime for the supply of telecommunications 
networks and services subject to payment of offsets.100  Consequently, since 2009, new suppliers or 
those opting for the new regime in Law No. 1.341 have  been generally authorized provided that they 
are registered in the Register of Suppliers of Telecommunications Networks and Services 
(ICT Register) kept by MINTIC.101  Registration can be done on line102 and applies to each supplier of 
networks or services, but not to each of the services to be supplied, and the information contained therein is available to the public.
103  Once MINTIC has checked th e veracity of the documents 
provided by the supplier when registering, it is listed in the ICT Register and may then start 
operating.104  All legal persons providing or intending to provide telecommunicati ons networks and/or 
services, as well as natural or legal persons holding permits for the use of scarce resources, as defined in Article 5 of Decree No. 4.948/09, including Inte rnet service providers (ISP), must be listed in the 
ICT Register. 
152. Suppliers who were granted a concession prior to the ICT Law have been able to keep it until 
its expiry or to opt for the new authorization regime.
105  The authorities have pointed out that the 
advantage of opting for the authorization regime is  that the supplier may provide telecommunications 
networks and services without the need for author ization permits for each of them as the radio 
spectrum is not linked to the service to be s upplied;  moreover, the payment of offsets for 
telecommunications services has been modified, cha nging from the previous figure of 3.3 per cent of 
net income to 2.2 per cent of gross income under th e new regime.  The authorities have indicated that, 
of the 4,736 telecommunications concession holde rs existing at the end of January 2010, by 
February 2012, 876 suppliers of telecommunications networks and services had been given a general 
authorization and 395 were listed in the ICT Register. 
                                                      
98 Law No. 1.341 of 2009 . 
99 Article 469 of the Commercial Code, Decree No. 410 of 1971 and Law No. 671 of 2001. 
100 Law No. 1.341 of 2009 and Lizcano Ortiz (2010). 
101 Law No. 1.341 of 2009 , and Guerra (2009). 
102 Decree No. 4.948 of 2009, Article 8. 
103 Decree No. 4.948 of 2009 , Article 7 and online information from MINCIT, " Respuesta a 
inquietudes sectoriales, radicación 351273 del 11 de mayo 2010 ".  Viewed at:  
http://www.andesco.org.co/site/assets /media/camara/financiera/Doctrina/ConceptoContraprestaciones.pdf. 
104 Decree No. 4.948 of 2009, Article 10. 
105 Law No. 1.341 of 2009, Article 68. WT/TPR/S/265 Trade Policy Review 
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  153. Permits to use the radio spectrum are issued by  MINTIC for a period of up to ten years, 
through an objective selection procedure.106  At least three months before the permit to use the 
spectrum expires, the supplier may request its renewal for the same period as that originally granted;  
renewal is neither automatic nor free of charge.  Pe rmits may be transferred subject to authorization 
by the Ministry.107 
154. Authorized suppliers and those holding concessions pay an offset for providing 
telecommunications networks and servi ces and for using the radio spectrum.108  MINTIC determines 
the amount for each offset in a resolution.  The off set for providing telecommunications networks and 
services is 2.2 per cent of the quarterly gross income of authorized suppliers and 3.3 per cent of the 
net income of those maintaining their concessions.109  A formula is used to calculate the offset for use 
of the radio spectrum.110  The offsets go towards the Inform ation and Communications Technology 
Fund (formerly the Communications Fund), which mainly finances universal access to telecommunications services, particularly for low-income sectors of the population.  Some of the Fund's resources help to finance the activities of the ANE.
111  At the end of 2011, the Fund's 
budgetary resources amounted to Col$1.04 trillion (US$58 million). 
155. Until the enactment of the ICT Law in late Ju ly 2009, Colombia had a subsidies regime 
intended to facilitate access by low-income sectors of the population to switched basic public (fixed) 
telephony services (TPBC), and to mobile local  telephony services in the rural sector.112  The regime 
consisted of making medium-high/high-income user s, as well as commercial and industrial users, 
subsidize low-low/low-income users.113  Even though the 2009 ICT Law repealed the subsidies 
regime, there is a five-year transitional pe riod which began at the end of December 2009.114  During 
this period, suppliers of local switched basi c public telephony services (TPBCLE) do not pay the 
offset to the Information and Communications Tech nology Fund, but, to replace the subsidy, it goes 
to facilitate access by low-income users to TPBC services, mobile local telephony services and 
Internet and broadband services.115  During the transitional period, if the amount of the offset turns out 
to be insufficient to replace the subsidy, the resources of the Information and Communications 
                                                      
106 Although Law No. 1.341 of 2009 allows the direct allocation of the radio spectrum when "the 
general interest" or "extension of coverage" are paramount, in 2010 the Constitutional Court declared these 
expressions to be unenforceable, thus limiting MINTIC's power directly to grant permits to use the spectrum 
solely to that of ensuring continuity of service and for the time strictly necessary to enable the authorities to follow an objective selection procedure. 
107 Decree No. 1.341 of 2009, Articles 11 and 12. 
108 Decree No. 1.341 of 2009 , Articles 10 and 13. 
109 MINTIC, Resolution No. 290 of 2010, Article 2, and Decree No. 1.972 of 2003. 
110 For further details, see MINTIC, Resolution No. 290 of 2010, Article 5, and Decree No. 1.972 
of 2003. 
111 Law No. 1.341 of 2009. 
112 Law No. 142 of 1994 , Article 1. 
113 Law No. 142 of 1994, Article 87.3, and WTO (2006).  The subsidies regime classifies users into 
six categories depending on their level of income:  category 1:  low-low;  category 2:  low;  category 3:  
medium-low;  category 4:  medium;  category 5:  medium-high;  and category 6:  high (Law No. 142 of 1994, 
Article 102). 
114 Law No. 1.341 of 2009, Articles 69 and 73, and Decree No. 5.052 of 2009. 
115 Law No. 1.341 of 2009, Article 69, Decree No. 5.052 of 2009 and Law No. 1.450 of 2011, 
Article 58. Colombia WT/TPR/S/265 
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  Technology Fund are used to cover the deficit.116  If, on the contrary, there is a surplus, this goes to 
the Fund.117 
156. The subsidy only covers basi c subsistence consumption.118  This is expressed in minutes and 
is determined by the CRC in a resolution (Table IV.14).119  Suppliers offering price plans that offer 
minutes over and above the basic subsistence cons umption only receive subsidies for the minutes 
which fall within the basic subsistence consumption.   For suppliers offering unlimited calls plans, the 
subsidy is:  (i) the result of the supplier's av erage revenue per minute during the preceding year 
compared to the number of minutes corresponding to basic subsistence consumption;  or (ii) the 
amount of the domestic single subsidy per line (Table IV.14).120  As an example of the amount of the 
subsidy, the authorities indicated that between the end of January and the end of October 2010, a total 
of Col$54,761 million (around US$30.5 million) was pa id out to suppliers pursuant to Law No. 1.341 
of 2009 and Law No. 1.450 of 2011.  In connection with this review, the authorities indicated that MINTIC's policy is to transfer the current subsidi es for telephony to Internet access.  It is proposed 
that the subsidies remain in effect under a tr ansitional regime for a period of five years. 
Table IV.14 
Subsidies in the telecommunications sector since 2006  
User Period Basic consumption (minute) Domestic single subsidy per line 
(Col$) 
Category 1 (low-low income) 01.01.2006-30.09.2011 200 n.a.a 
 01.10.2011-30.10.2012 100  3,692.9 
 31.01.2012-30.01.2013 75 2,.769.7 
 31.01.2013-30.04.2014 50 1,846.4 
 31.01.2014-30.01.2015 25 923.2 
 As of 2015 0 0.0 
Category 2 (low income) 01.01.2006-30.09.2011 200 n.a.a 
 01.10.2011-30.10.2012 100  2,954.3 
 31.01.2012-30.01.2013 75 2,215.7 
 31.01.2013-30.04.2014 50 1,477.1 
 31.01.2014-30.01.2015 25 738.6 
 As of 2015 0 0.0 
n.a. Not applicable. 
a The domestic single subsidy per line started to come into e ffect in October 2011 and only a pplies to unlimited calls plans (C RC, 
Resolution No. 3.140 of 2011). 
Source : CRC Resolutions No. 3.052 and No. 3.140 of 2011.  
157. Suppliers are free to fix their rates, but the CRC may regulate prices when there is not 
sufficient competition, when there is a breakdown in  the market or when the quality of the services 
offered does not correspond to the levels required, but it must do so in accordance with the procedures 
stipulated in the aforementioned Law.121  From 2006 (Resolution CRC No. 1.250 of 2005) up to the 
end of July 2009 (Resolution CRC No. 2.063 of 2009) , there was a regime of monitored rates for 
                                                      
116 Law No. 1.341 of 2009 , Article 69, and Law No. 1.450 of 2011, Article 58. 
117 Law No. 1.341 of 2009, Article 69. 
118 CRC Resolution No. 87 of 1997, Article 5.3.1.  Basic subsistence consumption is defined as 
consumption intended to meet the basic needs of low-income users. 
119 Law No. 142 of 1994, Article 99.6, and CRC, Resolution No. 3.052 of 2011. 
120 CRC Resolution No. 3.140 of 2011.  The national single subsidy per line started to come into effect 
as of October 2011 and only applies to the so-called "unlimited plans", prepayment services which include 
unlimited communication throughout Colombia. 
121 Law No. 1.341 of 2009, Article 23. WT/TPR/S/265 Trade Policy Review 
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  fixed telephony in Colombia;  this regi me only applied in certain municipalities.122  All suppliers had 
to register their rates.  Suppliers providing switched basic public telephony services and having a 
market share exceeding 60 per cent were subject to  a regulated rates regime.  This regime even 
applied when there was not sufficient competition.123  Since 2009, rates for fixed telephony services 
have been freely determined.  Colombia has a monitored rates regime under which the CRC imposes a 
ceiling rate (excluding VAT and the additional tran sport charge) on calls from fixed to mobile 
telephones.124  Since 2005, a gradual decrease in the ceili ng rate per minute has been noted (Col$392 
in 2005 and Col$153.97 in 2012).125 
158. When a supplier interconnects to the fixed or m obile network of another supplier, he has to 
pay an access charge.  Since 2007, the CRC has fixe d the maximum amount of this charge.  The 
supplier is also obliged to inform  its clients of the charges paid.126  The CRC is planning to lower 
access charges to mobile networks in stages from 2012 up to 2015.127  The authorities have indicated 
that this measure has led to a decrease in mobile ra tes paid by users to make calls to a network other 
than that of their supplier. 
159. Since 2008, suppliers have been obliged to allo w the physical infrastructure such as telephone 
poles and lines to be shared under leasing contracts.  The monthly leasing charge, published in a CRC 
resolution, is adjusted annually on the basis of the producer price index (PPI) determined by DANE.  
A supplier which lends its physical facilities to anot her supplier may also require that the arrangement 
remain in place for a minimum period of up to one year and an offset of a reasonable amount to be agreed between the parties.
128  The authorities have pointed out that sharing infrastructure helps to 
eliminate the fiscal and regulatory problems of installing new telecommunications network 
infrastructure. 
160. Digital portability has existed in Colombia si nce 2002 when a decree provided that suppliers 
of fixed and mobile telephony services were ob liged to provide clients with this service.129  In 2008, 
however, the Government issued a law under which the implementation of digital portability became 
mandatory.130  Mobile digital portability has been implemen ted since 29 July 2011;  the legal deadline 
expires on 31 December 2012, but the CRC has drawn up a timetable to speed up its 
implementation.131  For fixed telephony services, digital por tability has not been introduced because 
the studies conducted by the CRC determined that it was neither technically nor economically viable. 
161. In Colombia, there are 26 fixed telephony op erators and seven mobile telephony operators 
(Table IV.15).  The market is led by two groups:  América Móvil through Telmex (fixed services) and 
                                                      
122 CRC Resolution No. 1.296 of 2005. 
123 CRC  Resolution No. 1.250 of 2005, Article 5.2.2. 
124 CRC Resolutions No. 3.497 of 2011, Article  1, and No. 87 of 1997, Article 5.8.2. 
125 CRC Resolutions No. 1.296 of 2005, No. 2.156 of 2 009, Article 1, and No. 3.497 of 2011, Article 1. 
126 CRC Resolutions No. 1.763 of 2007 and No. 2.585 of 2010. 
127 CRC Resolution No. 3.136 of 2011, Article 1. 
128 CRC  Resolution No. 2.014 of 2008. 
129 Decree No. 25 of 2002, Article 40. 
130 Law No. 1.245 of 2008.  The authorities have indicated in this regard that, although Decree No. 25 
of 2002 already provided that digital portability was an obligation on telecommunications operators even if one changed from one operator to another which provided  the same telecommunications service as far as the 
numbering of universal personal telecommunications (UPT ) and services was concerned, this Decree did not 
include rules on digital portability for fixed or mobile telephony, as Law No. 1.245 of 2008 has done. 
131 Online information from CRC, " Respuestas a preguntas frecuentes sobre portabilidad numérica ".  
Viewed at:  http://www.portabilidad.gov.co/index.ph p?option=com_content&view=category& layout=blog& 
id=6&Itemid=5. Colombia WT/TPR/S/265 
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  Comcel (mobile services);  and Grupo Telefóni ca through Colombia Telecomunicaciones (fixed 
services) and Movistar (mobile services).132  Comcel and Movistar have been providing 3G services 
since 2008.133  Comcel's share of the mobile telephony ma rket remained stable  (65 per cent market 
share) during the period under review.  The majo rity of Colombian users have fixed telephony 
services contracts with Colombia Telecomunicaciones or ETB.134  Broadband services are mainly 
available in the larger cities and there is growing inter est in mobile Internet on the part of users.  In 
January 2011, the Government announced that the spectrum frequency would be increased so as to 
foster new technology.  Five operators share 90 per cent of the Internet market (Comcel-Telmex, 
ETB, Movistar-Colombia Telecomunicaciones, Tigo and UNE).135 
Table IV.15 
Telecommunications indicators, 2006-2011 
Service 2006 2007 2008 2009 2010 2011a
Operators of public 
telecommunications services       
Local fixed telephony  31 31 31 27 26 26 
Mobile telephony 3 3 3 3 4 4 
National long-distance telephony 8 7 7 7 8 8 
International long-distance telephony 10 9 9 12 10 11 
Internet service providers 47 47 42 42 42 45b 
Fixed telephony       
Number of fixed lines in service 7,861,857 7,984,290 8,053,796 7,473,867 7,186,165 7,157,756 
Density of fixed lines in service 
(telephones/100 inh.) 18.11 18.18 18.12 16.62 15.79 15.55 
Fixed telephony rates (US$)       
Local household installation costs 28.59 38.64 .. 43.12 .. .. 
Local business installation costs 40.69 43.84 88.12 .. .. .. 
Monthly rate for household lines 4.91 5.44 8.51 6.83 11.32 11.17 
Monthly rate for business lines 5.85 7.67 15.38 22.89 17.75 34.98 
Cost of a national long-distance call 
per minute  0.12 0.10 0.07 0.08 0.11 0.08 
Cost of an outgoing international 
long-distance call per minute 0.31 0.31 .. 0.34 0.38 0.36 
Mobile telephony       
Number of cellular subscribers 
(millions) 29,762,715 33,941,118 41,364,753 41,154,631 44,477,653 46,200,421b 
Teledensity (telephones/100/inh.) 68.57 77.20 93.06 91.50 97.4 100.3b 
.. Not available. 
a Figures for the first three quarters. 
b Whole of 2011. 
Source : Information provided by the Colombian authorities. 
162. In February 2009, the CRC decided that Com cel was occupying a dominant position in the 
market for outgoing mobile calls, based on the fact  that it had a high and persistent share of the 
                                                      
132 CRC (2010). 
133 Online information from the United States International Trade Administration, 
"Telecommunications Market Snapshot:  Colombia".  Viewed at:  http://web.ita .doc.gov/ITI/itiHome.nsf/9b 
2cb14bda00318585256cc40068ca69/33e888803bbeec978525788c0047fbe1/$FILE/telecom%20market%20snap shot-colombia.pdf. 
134 CRC (2010). 
135 Online information from the United States International Trade Administration, 
"Telecommunications Market Snapshot:  Colombia".  Viewed at:  http://web.ita .doc.gov/ITI/itiHome.nsf/9b 
2cb14bda00318585256cc40068ca69/33e888803bbeec978525788c0047fbe1/$FILE/telecom%20market%20snap 
hot-colombia.pdf;  and CRC (2010). WT/TPR/S/265 Trade Policy Review 
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  market that allowed it to act independently of the relevant market signals.  The CRC decided to take a 
regulatory measure under which the mobile rate plan s offered by Comcel to its clients would be 
determined according to a tariff schedule th at would be reviewed by the Commission.136  It also 
obliged Comcel to make a wholesale offer availa ble to suppliers of content and applications.137  The 
authorities have indicated that it is considered that  the situation in the outgoing mobile calls market 
has not changed compared to that identified in 2009 and therefore the CRC is currently reviewing the 
situation to impose new measures on Comcel. 
163. Five submarine cables give Colo mbia international connections.138  Since April 2009, 
operators of submarine cable heads have been obl iged to give other operators commercial access 
opportunities.  Operators of submarine cable h eads may freely determine the charges for access.139 
164. The following are exempt from payment of VAT:  monthly local basic subsistence 
consumption telephony invoiced to low-low/low-in come users, services from public telephones and 
Internet connection and access services for low-low/low/medium-low-income users.140 
(iii) Air transport and airports 
(a) Air transport 
165. In Colombia, air transport is the responsibility of the Ministry of Transport and the Special 
Administrative Division for Civil Aviation (Aerocivil).  The Ministry of Transport formulates policies for the transport sector.
141  Aerocivil comes under the Ministry of Transport and is the authority in the 
area of aeronautics which promotes and regulates th e development, coverage  and growth of civil 
aviation, the industry and aeronautical research, in  order to guarantee national and international 
geographical connectivity.  Aerocivil coordinates ai r transport policy with the Ministry.  It also 
authorizes the building of airports and provides navigation and aeronautical telecommunications services.
142 
166. Air transport in Colombia is governed by the Commercial Code (Book V)143, Colombia's 
Aviation Regulations (RAC) and international agre ements.  The RAC are issued by Aerocivil and 
bring together all the provisions on aeronauti cal activities and on Colombian and foreign entities 
engaged in aeronautics.144  Since the previous Review of Colombia in 2006, the RAC have frequently 
                                                      
136 CRC Resolutions No. 2.062 of 2009 and No. 2.066 of 2009. 
137 CRC Resolution No. 2.067 of 2009 and Decree No. 2. 870 of 2007, Article 10.  A wholesale offer is 
a business plan which an operator makes generally available and which sets out the reasonable and 
non-discriminatory commerci al, economic and technical conditions under which it offers the necessary elements 
such as minutes, bandwidth or similar elements wholesale to  third parties so that they can provide services to the 
public (Decree No. 2.870 of 2007). 
138 CRC (2010). 
139 CRC Resolution No. 2.065 of 2009. 
140 Tax Statute, Article 476, and Law No. 142 of 1994, Article 102. 
141 Decree No. 2.053 of 2003, Article 1. 
142 Decree No. 260 of 2004, Articles 1, 2 and 5. 
143 Decree No. 410 of 1971. 
144 Colombian Aviation Regulations, Part I. Colombia WT/TPR/S/265 
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  been modified in order to implement the pr ovisions of the International Civil Aviation 
Organization (ICAO).145 
167. The aim of government policy on domestic (scheduled) passenger transport is to liberalize 
and streamline market access in order to promote competition.  Since 2003, Colombia has, however, 
imposed a maximum number of operators per route that depends on the number of passengers carried 
annually.146  Since 2006, a maximum of three operators have been authorized to provide services on 
routes carrying less than 100,000 passengers, five on routes that carry from 100,000 to 
400,000 passengers, and six on routes carrying over 400,000 passengers.147  The authorities have 
indicated that the policy on access to the (schedul ed) domestic market for freight is free access 
throughout Colombia, with freedom to decide  on frequencies and no limit on the number of 
companies. 
168. Colombia has so far signed 34 bilateral ai r transport agreements and one multilateral 
agreement (CAN).  It has signed 12 new agreem ents since 2006 and has revised some others 
(Table AIV.1).148  The authorities draw attention in particular to the implementation of the new open 
skies agreement negotiated with the United States , which will come into effect in 2013 after a 
transitional period that began in 2011.  The term s for the agreements concluded and revised by 
Colombia implement new guidelines issued by the Ministry of Transport in 2009.149  In the area of 
passenger transport, the guidelines are the following:  application of the multiple designation principle 
allowing the operation of routes by several airlines;   the granting of fifth freedom rights;  the 
determination of rates according to the "country of origin" clause, which allows a party to reject the 
rates when the flight starts in its territory, unlik e the dual approval clause, which requires that parties 
agree on rates;  and implementation of corporate arrangements which allow airlines to share aircraft under a code share regime (Table AIV.1).  As to  the carriage of freight, the new guidelines in the 
agreements focus on the multiple designation principl e, the granting of fifth freedom rights and free 
scheduling, as well as charter flights.
150  Colombia emphasizes that the agreements negotiated have 
resulted in an unlimited number of freight flights and at least seven weekly passenger flights in order 
to promote tourism in particular.  In this respect,  Colombia gives free access to airports in tourist 
destinations (Armenia, Ba rranquilla, Cartagena, San Andrés and Santa Marta).151 
169. In 2004, CAN members mutually undertook to grant fifth freedom rights for scheduled and 
non-scheduled cargo flights within the Andean subr egion.  CAN members grant the free exercise of 
fifth freedom traffic rights for non-scheduled freight flights outside the subregion and for scheduled 
passenger, freight and mail flights, separately or combined, with the granting of rights being subject to 
bilateral or multilateral negotiations.152  In this connection, in January 2012 negotiations were held 
between Colombia and Ecuador and resulted in the expansion of mixed pass enger, mail and freight 
                                                      
145 Article 37 of the 1944 Chicago Convention and Decree No. 260 of 2004.  See also online 
information from Aerocivil, " Normatividad:  Reglamentos Aeronáuticos de Colombia (RAC) ".  Viewed at:  
http://portal.aerocivil.gov.co /portal/page/portal/Aerocivil_Portal_Int ernet/normatividad/rac/indice_general. 
146 Online information from Aerocivil, " Política Aerocomercial:  Revisión de la Política 
Aerocomercial ".  Viewed at:  http://portal.aerocivil.gov.c o/portal/page/portal/Aerocivil_Portal_Internet/ 
normatividad/politica_aerocomercial. 
147 Aerocivil, Group for the Assessment of Aerocomm ercial Projects, Record of meeting 33, 13 and 
15 March 2006. 
148 Olivera et al. (2011). 
149 For further details, see Ministry of Transport (2009). 
150 Ministry of Transport (2009). 
151 Ministry of Transport (2009)  and Olivera et al. (2011), "Annex 4". 
152 CAN Decision No. 582 of 2004, Articles 2 and 7. WT/TPR/S/265 Trade Policy Review 
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  services;  it was agreed that, outside the CAN, both Colombia and Ecuador will exercise fifth freedom 
rights throughout America, except for the United States and Canada. 
170. Air traffic in Colombia is governed by the prin ciple of reciprocity where there is no relevant 
international agreement.  In such  cases, Aerocivil authorizes foreign airlines to operate provided that 
the country of origin gives Colombian airlines reciprocal treatment.153  The principle of reciprocity 
governs scheduled passenger flights between  Colombia and Canada, and Guatemala.154 
171. Domestic passenger traffic is provided by six ai rlines:  Aerolínea Anti oquia, Aires, Avianca, 
Copa Airlines Colombia (AeroRepública operating under the name Copa Airlines), Easy Fly and 
Satena.  International routes are operated by 26 airlines.  In all, 11 Colombian companies and 
15 international companies currently provide freight services;  passenger airlines carry 45 per cent of 
domestic freight and 14 per cent of international freig ht.  Avianca is still the largest company in terms 
of domestic and international tran sport of passengers and freight.  In 2010, it carried 54.4 per cent of 
the passengers on domestic flights and 34.6 per cent of  passengers on international flights.  Coming 
much further down the scale as regards international transport is Copa Airlines Colombia, which came 
in second place with 9.75 per cent of passengers carried.155  Through its subsidiary Tampa, Avianca 
has 32 per cent of the international freight market, way above LANCO, a Colombian freight airline 
owned by LAN Chile, which has 8 per cent of the market.156 
172. Any domestic or foreign airline wishing to provide scheduled or non-scheduled commercial 
transport services must obtain an operating permit from Aerocivil.  These permits are for an indefinite 
term and may be cancelled if they are revoked by  Aerocivil or the airline withdraws.  Only 
Colombian legal persons may apply for operating permits.157  Likewise, any aircraft operating in 
Colombian airspace must be registered in the National Aviation Register in order to obtain a 
registration certificate from Aerocivil's National Aviation Registration Office.158  O n l y  
Colombian natural or legal pers ons owning and/or operating airc raft may undertake registration 
formalities.  Colombia recognizes the registration certificates issued by ICAO member States if a 
Colombian airline operates foreign aircraft within Colombia or abroad.  Aircraft registered in 
Colombia or abroad but operating within Colomb ia acquire Colombian nationality.  Permission from 
Aerocivil is required to import aircraft.159 
173. Cabotage air transport is restricted to Colombian aircraft.160  There are also nationality 
requirements.  Ninety per cent of the personnel of Colombian airlines and agencies/branches of 
foreign airlines established in Colombia must be Colo mbian nationals.  This restriction is subject to 
                                                      
153 Commercial Code (Decree No. 410 of 1971), Article 1870, and Colombian Aviation Regulations, 
Part II, paragraph 3.6.3.3.2.2. 
154 Olivera et al. (2011). 
155 OECD (2011). 
156 Online information from Aviacol.com, " Entrevista al Presidente de Avianca Fabio Villegas ", 
22 September 2009.  Viewed at:  http://www.aviacol.net /articulos-de-aviacion/articul os-de-opinion/entrevista- 
entrevista-presidente-de-avianca-fabio-villegas.html. 
157 In order to obtain an operating permit, the co mpany must prove its admi nistrative, technical and 
financial capacity in relation to the activities it intends to conduct and such conditions must be maintained as 
long as it holds an operating permit.  Technical capacity is determined by the operating permit and the operating specifications issued by Aerocivil's Ai r Safety Secretariat in the Ministry of Transport.  Operating permits are 
issued for five years, and are automatically renewed fo r the same period.  Operating permits for air carriers 
issued by Aerocivil are for an indefinite term  until they are revoked or voluntarily annulled. 
158 Colombian Aviation Regulations, Part XX. 
159 Colombian Aviation Regulations, Part XX. 
160 Commercial Code (Decree No. 410 of 1971), Article 1.785. Colombia WT/TPR/S/265 
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  reciprocity, in other words, it does not apply if the country of origin of the foreign airline does not 
impose similar restrictions on Colombian airlines.  Aerocivil may also decide not to apply this 
restriction if it can "duly" justify its decision.161  The captain of a Colombian-registered aircraft must 
be a Colombian citizen.  Colombia has not imposed restrictions on foreign capital holdings in national 
airlines since 1991. 
174. Aerocivil is the body responsible for authorizi ng domestic and international charter flights for 
passengers and freight, provided that there is no "u ndue competition" with scheduled services.  The 
operator of a charter flight must obtain an operating permit from Aerocivil and inform the latter of the 
number of passengers or the volume and nature of the freight.162 
175. Even though a new general law on competiti on was introduced in 2009, the Constitutional 
Court's interpretation of Law No. 1.340 of 2009 maintained Aerocivil's exclusive competence to 
authorize certain commercial operations by airlines, including code-sharing contracts, joint operation 
or the use of chartered aircraft.163  Since 2006, Avianca has entered into a number of mergers to 
enable it to consolidate its operations in the regional  aviation market (Table IV.16).  Its merger with 
TACA in particular created the third largest airline in Latin America.164  There has been no case of 
anti-competitive trade practices since 2006.165 
Table IV.16 
Mergers and acquisitions in the air transport market, 2009-2010 
Year Parties Description Objective 
2009 Avianca and TACA (El Salvador) Cons olidation.  Authorization was given 
through the business operation called a 
contribution contract Strategic alliance to position the companies at 
the global level 
2010 Avianca and SAM (Colombia)a Merger by absorptio n To improve competitiveness and lower costs 
2010 Avianca and TACA, and AeroGal 
(Ecuador) Acquisition  To consolidate Avianca-TACA's operations in 
Latin America 
2010 LAN (Chile) and Aires Acquisition  To participate in the Colombian passenger 
market  
a SAM was an Avianca subsidiary. 
Source : WTO Secretariat and information provided by the Colombian authorities.  
176. Aerocivil determines tariff policy for na tional and international air transport.166  Until 2007, 
there was a floor-rates scheme for airlines providing  scheduled national and international passenger 
transport.  In 2007, Aerocivil liberalized the mi nimum rates in support of the government policy to 
promote tourism.  The authorities have indicated that liberalization of the floor led to a 27.7 per cent 
decrease in the cost of domestic air tickets a nd 17 per cent for international routes.  Although 
Aerocivil allows airlines freely to determine the minimum ticket price, it still controls their maximum 
                                                      
161 Commercial Code (Decree No. 410 of 1971), Article  1.803.  According to the authorities, this has 
only happened occasionally in order to meet temporary shor tages of pilots or technici ans available to fly certain 
types of aircraft. 
162 Colombian Aviation Regulations, Part III. 
163 Law No. 1.340 of 2009, Articles 6 and 8.  In April 2011, the Constitutional Court declared 
admissible the paragraph in Article 8 of Law No. 1.340, stating that the general rule on SIC's exclusive competence did not apply to aviation-related competition, but was an exception to it so that Aerocivil would 
retain its rights in respect of free competition among airlines. 
164 Online information from IATA, "Remarks of Giov anni Bisignani at ATAC Breakfast Bogota", 
17 March 2011.  Viewed at:  http://www.iata.org /pressroom/speeches/page s/2011-03-17-01.aspx. 
165 OECD (2011). 
166 Ministry of Transport, Decree No. 260 of 2004, Article 5. WT/TPR/S/265 Trade Policy Review 
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  level.167  If an airline wants to apply a rate above th e maximum, it must justify this to Aerocivil, 
explaining the grounds for its request.168 
177. Domestic freight rates can be determined freely and are generally fixed on the basis of the 
flying time for the aircraft providing the service.169  International freight rates are subject to ceilings 
per kilo, per route and per product. 
178. The legislation allows the State to grant subs idies to the aviation industry, but solely to 
State-owned enterprises.170  The authorities have indicated that during the period under review the 
Government did not grant any subs idies to the aviation industry. 
(b) Airports 
179. Colombia has 581 airports, of which 70 belong to Aerocivil, 344 are private and 167 are the 
responsibility of departments/municipalities.  Ther e are 11 international airports.  The airport at 
Bogotá handles the majority of domestic and international passenger and freight traffic.171  T h e  
building of the "coffee airport", commenced in 2004 and financed by the Government, Aerocivil and 
the competent regional entities, has not yet finished.  The airport, which will handle international medium-haul flights, will give the departments/ municipalities in the "coffee zone" a centre for 
transporting freight, as well as an opportunity to develop the region's tourism potential.
172  The "coffee 
airport" is expected to start operating in 2014. 
180. Companies holding concessions must be Colombian firms specializing in the activity 
concerned.173  Government holdings in such companies must not exceed 50 per cent174;  the legislation 
does not impose any limit on foreign investment.  Concession contracts are awarded for 15 to 
25 years175 and their extension must be approved by CONPES.176  The concession holder pays 
Aerocivil for use of the airport infrastructure, either  a fixed amount, a percentage of gross income or a 
combination of the two, depending on the contract negotiated.177  The income generated by 
concessions enables Aerocivil to finance investme nt and operating costs for loss-making airports, 
invest in air safety and control and help to maintain regional airports.178  The Delegated Supervisory 
                                                      
167 Aerocivil, Resolution No. 3.299 of 2007.  The authorities have indicated that, as far as maximum 
rates are concerned, variations in domestic air ticket prices  are authorized subject to a request from the airline;  
the parameter to be taken into account is the CPI over one year, and the surcharges for certain inputs such as 
fuel and factors that affect costs such as  devaluation are also taken into account. 
168 OECD (2011). 
169 Online information from Aerocivil, " Normatividad:  política aerocomercial:  documentos:  Política 
tarifaría nacional/internacional ".  Viewed at:  http://portal.aer ocivil.gov.co/portal/page/portal/ 
Aerocivil_Portal_Internet/normatividad/politica_aerocomercial/Documentos.  Aerocivil Resolution No. 00994 
of 28 February 2012 provided that rates and fuel charges could be freely determined. 
170 Commercial Code (Decree 410 of 1971), Article 1863, and WTO (2006). 
171 Colombian Chamber of Infrastructure (2009) and Ríos Plata (2011). 
172 CONPES (2009a). 
173 Decree No. 1.647 of 1994, Article 3. 
174 Ibid. 
175 Olivera et al. (2011). 
176 Law No. 1.150 of 2007, Article 28.  The provisions on granting extensions can be found in 
Decree No. 3.460 of 2008. 
177 Olivera et al. (2011). 
178 CONPES (1994). Colombia WT/TPR/S/265 
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  Authority for Concessions, part of the Ports and Transport Supervisory Authority, oversees 
compliance with the obligations on the infrastructure and services by concession holders.179 
181. Although the purpose of the concession regime is  to modernize and upgrade infrastructure, 
the costs incurred through cancellation or delays re main high.  In this connection, the additional 
charges on airlines for cancellation or delays amounted to Col$474 billion in 2010.180  In a survey 
carried out by Bogotá's Chamber of Commerce, users of passenger and freight terminals at Bogota airport drew attention to certain shortcomi ngs in the baggage ha ndling and ground services.
181 
182. In the airports it owns, Aerocivil fixes and co llects the fees for airport services, i.e. airfield 
rights and flight protection services.182  It updates the fees annually by means of a resolution.183  The 
fees are determined according to the gross volum e of the operation and, for domestic flights only, 
according to the volume of the goods and the num ber of passengers using the airport annually.184  
Aerocivil imposes a surcharge on the fees when fli ghts (both domestic and international) operate 
between 6 p.m. and 6 a.m. (5 per cent surcharge) or  outside the times indicated in the Aeronautical 
Information Publication (surcharge corresponding to  40 times the current legal minimum wage or the 
equivalent in United States dollars).185  Flights coming from certain Ecuadorian, Peruvian and 
Venezuelan airports going to certain Colomb ian airports are subject to domestic fees.186 
183. Aerocivil also determines the airport taxes in the airports it owns, but does not collect them.  
The airlines are responsible for collecting this tax.187  Between 2007 and 2011, airport taxes gradually 
rose from Col$3,700-10,000 to Col$4,500-12,000 for domestic routes and US$33 to US$35 for international routes.
188  Passengers boarding at certain Colombian airports going to certain 
Ecuadorian, Peruvian and, up to 2010, Venezuelan airports, pay a preferential international airport 
tax.189  Airlines receive a commission for collecting the airport tax provided that they transfer the 
amounts collected within the time-l imits determined by Aerocivil.190  The commission for collecting 
the airport tax is 6 per cent for international tax not  included in the ticket price, and 3 per cent when it 
is included;  and 5 per cent for domestic flights. 
                                                      
179 Decree No. 1.016 of 2000, Article 13, and online information from the Ports and Transport 
Supervisory Authority.  "Our Institution:  Superintendencia Delegada de Concesiones ."  Viewed at:  
http://www.supertransport.gov.co/s uper/index.php?option=com_content& view=article&id=181&Itemid=193& 
lang=en. 
180 Olivera et al. (2011). 
181 Online information from the Bogotá Chamber of Commerce, " Resultados de la encuesta de 
servicios del Aeropuerto El Dorado realizada por la CCB ", 29 January 2010.  Viewed at:  http://www.ccb.org. 
co/contenido/sala_prensa.aspx?catID=569. 
182 Ministry of Transport, Decree No. 260 of 2004, Article 5, and Aerocivil, Resolution No. 318 
of 2011. 
183 Online information from Aerocivil, " Normatividad:  Resolución ".  Viewed at:  http://portal. 
aerocivil.gov.co/portal/page/portal/Aer ocivil_Portal_Internet/normatividad. 
184 Category A:  international airports (over 300,000 passengers);  category B:  
50,000-300,000 passengers;  and category C:  fewer than 50,000 passengers (Decree No. 1.647 of 1994, 
Article 1).  See also Aerocivil, Resolution No. 318 of 2011, Article 1. 
185 Aerocivil, Resolution No. 318 of 2011, Articles 6 and 8. 
186 Aerocivil, Article 7. 
187 Aerocivil, Resolution No. 6.251 of 2008, Article 3. 
188 Aerocivil, Resolutions No. 317 of 2007, Article s 10 and 11, and No. 318 of 2011, Articles 10 
and 11. 
189 Aerocivil, Resolutions No. 228 of 2010, Article 10, and No. 318 of 2011, Articles 10 and 11. 
190 Aerocivil, Resolution No. 6.251 of 2008, Article 12. WT/TPR/S/265 Trade Policy Review 
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  184. In private airports or those under a concession,  Aerocivil only collects the flight protection 
service fee.  The airfield rights and the airport taxes are paid directly to the owner or holder of the 
concession provided that Aerocivil has previously approved the rates.191 
185. Aerocivil allocates slots.  An airline which has used at least 85 per cent of its slots may opt 
for renewal.  If two airlines are competing for the same slot, preference will be given to the airline 
already operating this slot on other days of the week  or to the airline that has complied most faithfully 
with its slots.  Aerocivil's air transport o ffice may authorize airlines to exchange slots.192  Pursuant to 
Resolution No. 07466 of 22 December 2011, priority when allocating slots will be given to scheduled 
flights that have to operate in accordance with a pa rticular itinerary, and 80 per cent of the slots will 
be reserved for these. 
186. When buying an air ticket, the passenger pays a series of taxes and ch arges which include the 
airport tax, VAT, the fuel surcharge and the administrative fee.  Some passengers, however, are exempt from payment of airport taxes (for example, passengers in transit, diplomats, crew members). 
187. Since 2003, Aerocivil has regulated the collection of the fuel surcharge, which accrues to the 
airline providing the service.
193  This is mandatory for passenger tr ansport but optional for freight, and 
for the latter is payable per kilo carried.  For passen gers, it depends on the type of aircraft used on 
domestic routes and the distance covered on international routes.194  Aerocivil determines the 
surcharge each month and publishes it on its we bsite, in accordance with Resolution No. 3.672 of 
8 July 2011.195  When determining the surcharge, a refere nce price and the distance covered is taken 
into account for international routes and, until 2008, this also applied to domestic routes.196  Since 
2008, the technical specifications of the aircraft (turboprop or jet) providing the service have been 
taken into account for domestic routes rather than the distance covered.  Travel agencies collect the 
fuel surcharge on behalf of airlines through the sale of air tickets.197  Travel agencies have been 
compensated by the airlines for the additional cost s incurred in collecting the surcharge since 2008.  
As of July 2009, this compensation amounted to 1 per cent of the amount collected;  in August 2008 and July 2009, agencies received 2 per cent.
198 
188. Since 2006, an administrative fee for issuing air tickets has been imposed ;  this is paid to 
travel agencies or to the airlines themselves when they sell tickets directly.  For international routes, 
the administrative fee depends on the price of the ticket;  in 2006, it was between US$5 and US$27, rising to US$15-US$95 from 2009 onwards.  For domestic routes, the rate was Col$40,037 until 
31 March 2012, irrespective of the cost of the ticket.
199  This amount is adjusted annually according to 
the variation in the CPI. 
189. Passengers taking international flights from Colo mbian airports must also pay national stamp 
duty and an exit tax in addition to the fuel su rcharge and the administrative fee, with some 
                                                      
191 Aerocivil, Resolution No. 318 of 2011, Article 17. 
192 Colombian Aviation Regulations, Part III. 
193 Aerocivil, Resolution No. 839 of 2003.  This is currently governed by Resolution No. 3.897 of 
31 August 2005 for international freight and by Resolution No. 2.941 of 27 June 2008 for passengers. 
194 OECD (2011). 
195 Online information from Aerocivil, " Normatividad:  Resoluciones ".  Viewed at:  http://portal. 
aerocivil.gov.co/portal/page/portal/Aer ocivil_Portal_Internet/normatividad. 
196 Aerocivil, Resolutions No. 2.941 of 2008, Articles 2-4, and No. 897 of 2005, Article 1. 
197 Aerocivil, Resolution No. 3.422 of 2008. 
198 Aerocivil, Article 1. 
199 Aerocivil, Resolution No. 3.596 of 2006, Article 3. Colombia WT/TPR/S/265 
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  exceptions.200  The national stamp duty is paid by Colomb ians and foreigners re sident in Colombia 
leaving Colombian territory.  The Government determines the amount annually by decree and it is collected by the airlines.
201  The national stamp duty is currently US$34.202  The exit tax is paid at the 
airport by all passengers leaving Colombia (US$33 for stays of less than two months and double for 
longer visits).  Some airlines, however, include it in the cost of the air ticket.203 
190. Since 2006, with some exceptions, foreign passenge rs arriving in Colombia have had to pay a 
tourism tax.  During the period under review, th is tax rose from US$5 to US$10 from 2009 onwards.  
It will be US$15 from 2012 onwards.  The airlines co llect this tax and pay it to the Ministry of 
Finance and Public Credit each quarter.204 
191. Any Colombian or foreign lega l person planning to provide airport ground handling services 
for arrivals, parking and departures of aircraft , persons, goods or baggage, as well as for their 
handling or dispatching or transit maintenance and ot her facilities required at airports by operators of 
Colombian or foreign aircraft flying to or from Colombia, must apply for and obtain the corresponding operating permit from Aerocivil in the Ministry of Transport.  There are minimum capital requirements for obtaining the permit, which vary according to the service to be provided.
205  
Colombian or foreign commercial air services compan ies may receive, dispatch and maintain their 
own aircraft without obtaining a special permit from Aerocivil when this is covered by their operating 
specifications.  The supply of such services to othe r companies or aircraft requires compliance with 
the criteria laid down.  Since 2009, Aerocivil has issued permits for five years, with automatic 
renewal.206  Prior to this, renewal was not permitted  and the period for providing the service was 
three years.207  Where the supply of ground services includes the dispatch of aircraft, dispatchers must 
be Colombian nationals unless a special exemption is given.208  These authorizations are contained in 
the operating specifications and/or general operating manual for the respective airline. 
(iv) Maritime transport and ports 
(a) Maritime transport 
192. In Colombia, three ministries are responsible for maritime transport:  the Ministry of Defence, 
the Ministry of Transport and MCIT.  The Ministry  of Transport is in charge of formulating and 
adopting policies, plans, programmes, projects and economic regulation relating to transport, transit 
and infrastructure for modes of transport, and te chnical regulations on transport and transit in 
Colombia.209  The General Maritime Directorate (DIMAR) under the Ministry of Defence is 
responsible for implementing maritime transpor t policy and for overseeing and controlling such 
                                                      
200 OECD (2011). 
201 Aerocivil, Resolution No. 6.251 of 2008, Articles 2 and 3. 
202 Online information from the Colombian Association of International Airlines, " Guía al pasajero:  
Impuestos ".  Viewed at:  http://alaico.org/2010/www/interna.php?id=102.  Resolution No. 11.963 of 
17 November 2011 and Law No . 1.111 of 27 December 2006. 
203 Online information from Experiencia Colombia, " Impuestos turísticos ".  Viewed at:  
http://www.experienciacolombia.com/i mpuestos-turisticos.php?Colombia. 
204 Law No. 1.101 of 2006, Article 4. 
205 Colombian Aviation Regulations, Part  III, paragraphs 3.7.2 and 3.7. 3.  Viewed at:  http://portal. 
aerocivil.gov.co/portal/pls/ portal/!PORTAL.wwpob_page.show?_docname=29219721.PDF. 
206 Colombian Aviation Regulations, Part III, paragraphs 3.7.2 and 3.7.3. 
207 WTO (2006). 
208 Colombian Aviation Regulations, Part III, paragraph 3.7.3.1.1. 
209 Decree No. 087 of 17 January 2011, and online information from MCIT, " Normatividad  Servicios 
de transporte ".  Viewed at:  https://www.mincome rcio.gov.co/publicaciones.php?id=14803. WT/TPR/S/265 Trade Policy Review 
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  activities.210  The Ports and Transport Supervisory Author ity, a body attached to the Ministry of 
Transport, has the task of inspecting, supervising and controlling the supply of the public transport 
service, its infrastructure and services.211  MCIT's main task in relation to maritime transport is to 
provide leadership, coordinate with the other comp etent authorities and participate in the relevant 
international negotiations as maritime transport services are included in the WTO services sectoral 
classification list. 
193. Colombia's current legislation has been in force since 2001 and provides that access to the 
maritime transport market is subject to the principle of reciprocity.212  If there is no reciprocity, the 
Ministry of Transport, in cooperation with DIMAR a nd MCIT, is empowered to restrict in full or in 
part access to Colombia's maritime transport market.213  When assessing the need  to impose measures, 
the Ministry of Transport must take into acc ount "Colombia's international trade interests".214  The 
authorities have indicated that Colombia did not rest rict access to its international maritime transport 
market during the period under review. 
194. At the regional level, if third countries impose re strictions or discrimi nate against maritime 
transport companies belonging to CAN members, th ey in turn may, jointly, restrict access to 
international maritime traffic for companies estab lished in the countries imposing the restrictions.215  
The authorities have indicated that there was no such occurrence during the period under review. 
195. Cabotage maritime transport is restricted to Colo mbian-registered vessels.  Nevertheless, if no 
vessel is available or suitable, DIMAR may authoriz e the chartering or leasing of a foreign-registered 
vessel for certain services.216  The authorities have indicated that no preference is given to a particular 
registration.  The concept of national registration extends to CAN countries on the basis of 
reciprocity.  Currently, foreign-registered vessels ac count for 10 per cent of total cabotage traffic, 
given that such services are infrequent.  For th e purposes of this Review, the authorities have 
indicated that there has been an increase in the number of exceptions to the cabotage restrictions. 
196. There has been no change to the procedure for registering a vessel in Colombia since 2001, 
when the current legislation came into force.  Only  the owners of vessels are authorized to register 
them and must be natural or lega l persons established in Colombia.217  Registration may be either 
permanent or temporary.  Temporary registration is for a maximum of six months and is granted while 
the permanent registration procedure is being completed.218  After six months have elapsed following 
temporary registration, the documen tation required for definitive registration must be completed;  if 
this is not the case, registration is rejected.  There is no fee for temporary registration, but the fee for 
permanent registration depends on the v essel's tonnage, pursuant to Resolution 
No. 0129 DIMAR-DIGEN of 6 May 2008.  Registrati on applications are made to the port authorities 
where the register is kept.  In the case of tem porary registration alone, applications may be made 
                                                      
210 Decree-Law No. 2.324 of 1984, Articles 4 and 5. 
211 Online information from the Ports and Transport Supervisory Authority.  Viewed at:  
http://www.supertransporte.gov.co/ super/index.php?option=com_conten t&view=article&id=180&Itemid=192&
lang=en. 
212 Decree No. 804 of 2001, Article 46. 
213 Decree No. 804 of 2001, Article 49. 
214 WTO (2006). 
215 CAN, Decision No. 390 of 1996, Article 4. 
216 Decree No. 3.887 of 2008, Article 1. 
217 Commercial Code (Decree No. 410 of 1971), Article 1.458, and Law No. 730 of 2001, Article 2. 
218 Law No. 730 of 2001, Articles 17 and 20, and in formation provided by the Colombian authorities. Colombia WT/TPR/S/265 
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  to DIMAR.219  Registration is issued by DIMAR.  Both Colombian and foreign vessels may be 
registered;  once the latter have been re gistered, they become Colombian vessels.220  The following 
must also be registered:  the purchase, sale and bu ilding of vessels;  mortgage deeds, encumbrances 
and impoundment;  financial leasing;  and charter of a vessel.221 
197. Colombian and foreign international mar itime transport companies, as well as 
Colombian cabotage companies, must have authoriz ation and an operating permit issued by DIMAR;  
for non-scheduled transport of passengers or cargo, a special operating permit is given.  Authorization 
and operating permits, as well as sp ecial operating permits, are given for all types of transport:  
international or cabotage;  passenger;  or combined  cargo and passenger transport.  The authorization 
and operating permit are for an i ndefinite term, provided that the company respects the conditions 
originally required for their granting;  permits, in cluding special permits, may not be transferred.  In 
order to obtain any type of permit to operate in Colombia, foreign shipping companies must have a shipping agent in Colombia, as required by the Commercial Code.
222  Colombia currently has 
215 international maritime transport shipping compan ies (including operators and non-operators), of 
which 98 are Colombian and carry only 2 per cent of Co lombia's international maritime traffic.  The 
total number of maritime transport compani es (national and international) is over 600. 
198. DIMAR applies a controlled freedom regime for international maritime transport rates, but 
neither regulates nor fixes them.  International ma ritime transport and cabotage companies determine 
their own rates and freight charges, but must info rm DIMAR of these, which registers them and may, 
either ex oficio or at the request of parties, revise them or object to them.223  Domestic maritime 
transport rates are controlled by the Ministry of  Transport and the Ports and Transport Supervisory 
Authority (see below).  Cabotage freight rates ar e set by the shipping companies themselves by 
tonne (or kilo), by port and by product.224 
199. Colombian international maritime transport companies are authorized to join liner 
conferences.  Liner conferences which include Colomb ian ports are open and also allow the parties to 
adjust their rates independently.225  These must be registered with DIMAR and the rates 
communicated to it.226  The conferences must appoint a repr esentative domiciled in Colombia and 
accredited by DIMAR.  The latter may reject a liner conference registration if its provisions involve practices that are contrary to Colombia's competition policy;  if there is no reciprocity for Colombian enterprises from the other signatory countr ies;  or if the supply of services to or from 
Colombian ports is prohibited.
227  Five liner conferences are currently registered228, four fewer than 
in 2007, and they carry 80 per cent of Co lombia's international maritime traffic. 
200. Charter, association or tie-in contracts for Colombian-registered vessels signed by companies 
domiciled in Colombia, as well as contracts for vessel repair or maintenance services, are exempt 
                                                      
219 Decree No. 730 of 2001, Article 17. 
220 Commercial Code (Decree No. 410 of 1971), Articles 1.437 and 1.439. 
221 Law No. 730 of 2001, Article 13. 
222 WTO (2006). 
223 Decree No. 804 of 2001, Articles 11, 41 and 42. 
224 Decree No. 804 of 2001, Article 43. 
225 Allowing the free entry or w ithdrawal of Colombian compan ies (Decree No. 804 of 2001, 
Articles 36 and 39). 
226 Decree No. 804 of 2001, Articles 36, 38 and 42. 
227 Online information from MCIT, " Normatividad:  Servicios de transporte ".  Viewed at:  
https://www.mincomerc io.gov.co/publicaci ones.php?id=14803. 
228 Online information from DIMAR, " Zona de Consultas y Descargas:  Conferencias marítimas ".  
Viewed at:  http://www.dimar.m il.co/VBeContent/newsdetailmore.asp?id=1288&idcompany=146. WT/TPR/S/265 Trade Policy Review 
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  from the fiscal stamp duty.229  There is no VAT on registration or payment of flag registration of 
vessels.230 
201. There are nationality requirements for the cr ews of Colombian-registered vessels.  The 
captain, officers and 80 per cent of the rest of the crew of Colombian-registered vessels must be of 
Colombian nationality.231  Nationals of CAN member countries are exempt from this requirement and 
are regarded as Colombians. 
202. Any foreign-registered vessel arriving in a Colombian port must have a shipping agent 
accredited by DIMAR, who represents  the shipowner in Colombia.232  There are no nationality 
restrictions for shipping agents, although there is  an establishment requirement for the company 
representing them in Colombia, which has to have  a commercial operating licence from DIMAR.  In 
Colombia, foreign-registered vessels are not authoriz ed to provide port services in Colombian waters.  
DIMAR may, however, authorize them to supply such services for a renewable period of six months, but it may not exceed one year, if there are no suitable Colombian vessels.
233 
(b) Ports 
203. The Comprehensive Plan for the Physical, Port  and Environmental Infrastructure of Coastal 
Zones lists eight main port areas:  Barranquilla, Bu enaventura, Cartagena, Santa Marta, Morrosquillo 
Gulf, La Guajira, San Andrés Island and Tumaco.234  The Plan has also identified the potential of 
Urabá Gulf as a major port.235 
204. The State owns five major ports (Barranquilla , Buenaventura, Cartagena, Santa Marta and 
Tumaco).  Law No. 1 of 1991 determined the legal framework for private sector participation in the 
management, development and cons truction of maritime ports.  In implementation of this Law, 
in 1993 the ports belonging to the State and opera ted by the Colombian ports company (Colpuertos) 
were handed over to regional port companies (SPR ) under a concession for a period of 20 years.  
Consequently, the construction, maintenance and management of both public and private ports is 
currently the responsibility of port companies under a 20-year concession regime.  Nevertheless, if a port company requires more than 20 years to recover the value of its initial investment or if it makes 
new investments, a concession for a longer peri od may be granted, but may not exceed 30 years. 
205. The Ministry of Transport is responsible for Co lombia's port infrastructure, but any plan for 
port expansion must be approved by CONPES.  In  the case of port concessions, the latter is the 
highest body if there is opposition.  CONPES may reject a plan for reasons of national interest, 
because of the impact on port costs or on the comp etitiveness of exports, for geographical or strategic 
reasons, or because of its potential impact on pr ices for Colombian consumers.  Once CONPES has 
approved a plan, it is adopted by regulatory decree.  Through these plans, the Ministry defines the port 
                                                      
229 Law No. 730 of 2001, Article 30. 
230 Idem. , Article 32. 
231 Decree-Law No. 2.321 of 1984, Article 99. 
232 Commercial Code (Decree No. 410 of 1971), Articles 1.455 and 1.489-1.494. 
233 Decree No. 1.423 of 1989, Article 38.  DIMAR, pr ess release of 31 August  2011.  Viewed at:  
http://www.dimar.mil.co/VBeCont ent/library/documents/DocNewsNo5512DocumentNo9233.PDF. 
234 The major port areas are geographi cal areas in the coastal zone wher e there is the highest density of 
port structure existing or being developed, or where future ports are planned.  The major port areas are:  Barranquilla, Buenaventura, Cartagena, Morrosquillo Gulf , Guajira, San Andrés Isla nd, Santa Marta, Tumaco 
and Urabá Gulf. 
235 CONPES (2009b). Colombia WT/TPR/S/265 
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  investment required to facilitate trade and lowe r port costs which affect the competitiveness of 
Colombian products.236  In 2009, CONPES approved a 2009-2011  port expansion plan providing for 
investment of Col$551,105 million to upgrade access routes to ports.237  This was the only port 
expansion plan approved during th e period under review.  In 2007,  however, other CONPES policies 
were implemented to make Colombia's ports more effi cient;  this is part of the initiative to facilitate 
trade and improve the Colombian economy's competitiveness.238  In view of the importance of coal as 
an export, in 2008 a strategy was implemented to increase capacity at certain maritime ports for the 
transport of coal.239 
206. Port companies operating in private ports are free to determine their rates, but must 
communicate them to the Delegated Supervisory Authority for Ports.240  In order to be granted a 
concession, the applicant must set up a port public lim ited company, with the building, operation and 
management of ports, inter alia , as its corporate purpose.  Capital may be private, public or mixed. 
207. In the case of Government-owned ports opera ted under a concession, port companies' rates 
are determined according to the requirements adopted  by the Ministry of Transport in 1993 under a 
regime of controlled freedom to determine rates.  Rates must be competitive, cover the costs of the 
port company and allow it to be profitable, and mu st be registered with the Ports and Transport 
Supervisory Authority.  The same rates are char ged for import, export or cabotage.  They are 
registered with the Delegated Supervisory Authorit y for Ports, published twice yearly in two national 
newspapers and adjusted every two years.241  The Supervisory Authority may reject the rates and 
request that they be modified if they do not comp ly with the requirements laid down or are 25 per cent 
higher than the "competitive rate" it has determined for each port company.242  Nevertheless, if it is 
decided that the number of port companies is sufficient and the infrastructure so permits, freedom to set rates may be authorized.
243 
208. The concession regime requires all port companies to  pay an offset to the State (80 per cent) 
and to the municipality where the port is located ( 20 per cent) for the use and exploitation of public 
areas.244  An additional offset is paid to the Stat e if the port for which the concession is granted 
already has infrastructure.245  The offsets are calculated accordi ng to a formula defined in the port 
expansion plans.246  During the period under review, the calculation methodology established in 1993 
did not change.247  In 2008 and 2010, however, two new methodologies were introduced to calculate 
the value of the offsets for those regional por t companies which renegotiated their concession 
contracts (Barranquilla, Buenaventura and Santa Marta) or for companies managing coal ports.248  
These offsets are fixed in United States dollars.  Th e offsets accruing to the State, which amounted to 
                                                      
236 Law No. 1 of 1991, Article 2. 
237 CONPES (2009b). 
238 CONPES (2007, 2008c and 2008d). 
239 CONPES (2008b). 
240 Law No. 1 of 1991, Article 19. 
241 Ministry of Transport, Resolution No. 723 of 1993, Articles 10, 13 and 14. 
242 For further details on calculation of the rates, s ee Ministry of Transport, Resolution No. 723 of 
1993, Article 14. 
243 Law No. 1 of 1991, Article 20. 
244 Decree No. 856 of 2003, Article 1.  In the case of the port at San Andrés, 20 per cent is paid to the 
department as there is no municipality on the island. 
245 CONPES (2009b). 
246 Decree No. 856 of 2003, Article 1. 
247 For further details, see CONPES (1993), "Annex C". 
248 For further details, see Decree No. 1.873 of 2008 and CONPES (2010b). WT/TPR/S/265 Trade Policy Review 
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  US$17 million in 2009, are paid to the National Hi ghways Institute (INVIAS), which is responsible 
for maintaining land and river access routes to ports.249 
209. There has been a steady increase in port tra ffic since 2007.  Almost 500 million tonnes of 
goods were handled between 2007 and 2010, of which 94 per cent were for foreign trade 
(Table IV.17).  Bulk cargo accounted for 80 per cent of  general cargo traffic;  over half of this was 
coal and one quarter petrol eum and petroleum products.250 
Table IV.17 
Port traffic, 2007-2010 
(Tonnes) 
 2007 2008 2009 2010 
Foreign trade 106,958,203 115,587,558 111,303,950 131,884,906 
Imports 19,695,101 21,309,615 19,478,862 21,938,929 
Exports 87,263,102 94,277,943 91,825,088 109,945,977 
Cabotage 466,101 393,111 404,540 353,009 
International transit 3,734,238 5,606,582 7,480,327 10,659,811 
Total  111,158,542 121,587,251 118,824,731 142,897,726 
Source : Ports and Transport Supervisory Authority (2010), Movimiento de carga por los puertos de Colombia:  Informe 
Consolidado Año 2009 , April.  Viewed at:  http://www.supertransport.gov. co/super/index.php?option= 
com_phocadownload&view=cat egory&id=177&Itemid=375& lang=en;  Ports and Transport Supervisory 
Authority (2011), Movimiento de carga en los puertos marítim os colombianos:  Informe Consolidado Año 2010 , 
January.  Viewed at:  http://www.s upertransport.gov.co/super/phocadownloa d/Estadisticas/Puertos/Informe 
Consolidado%202010%20Definitivo_1.pdf;  and information provided by the Colombian authorities. 
(v) Tourism 
210. In 2010, hotel and restaurant services accounted for 2.7 per cent of GDP, and in 
December 2011 the number of persons employed in the trade, hotels and restaurants sector (12-month average) was 5.5 million.  There were almost 2.5 million visitors to Colombia in 2010 (2 million in 2006), who generated US$2.7 million in revenue (US$2 million in 2006).
251 
211. Law No. 300 of 1996 or the General Tourism La w regulates Colombia's tourism sector.  It 
underscores the importance of tourism for Co lombia's economic and social development.252 
212. MCIT has formulated tourism policies, advised by the National Tourism Committee 
since 2011.253  It also coordinates the preparation of the Sectoral Tourism Plan (PST) with the 
National Planning Department and regional authoriti es.  Subject to acceptance by CONPES, the PST 
is incorporated into the National Development Plan, which sets out the guidelines for government 
policy.254  Since 2006, MCIT has submitted a PST for the period 2008-2010 and has proposed another 
covering the period 2011-2014 called "T ourism:  factor of prosperity for Colombia".  The 2008-2010 
PST proposes strategies to make Colombia's t ourism products more competitive, focusing, inter alia , 
                                                      
249 CONPES (2009b).  Since 2009, INVIAS has not been responsible for access channels to the port of 
Barranquilla, which are now the responsibility of the Re gional Autonomous Corporation of Río Grande de la 
Magdalena (Cormagdalena) and it therefor e received 60 per cent of the offset s;  the remaining 40 per cent went 
to municipalities for reforestation and maintenance of  aqueducts and sewage systems (Law 1242 of 2008, 
Article 64). 
250 Ports and Transport Supervisory Authority (2011) and CONPES (2009b). 
251 Information provided by the authorities and MCIT (2011b). 
252 Law No. 300 of 1996, Article 1. 
253 Decree No. 210 of 2003, Article 1, and MCIT, Resolution No. 557 of 2011. 
254 Law No. 300 of 1996, Article 16. Colombia WT/TPR/S/265 
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  on improving the quality of tourism services and infrast ructure, developing specialized products to be 
offered, encouraging investment  and promoting skills training.255  The 2011-2014 Plan continues to 
build on the strategy to improve competitiveness in  areas such as reinforcing the national and regional 
institutional structure, improving the quality of t ourism services and destinations, developing human 
talent in light of tourism dema nd and generating jobs, upgrading the infrastructure and connectivity, 
attracting investment, and developi ng and promoting specialized products, all this within the context 
of sustainable development of tourism.  MCIT has also implemented a tourism quality programme 
under which it certified 423 provider s of tourism services in 2010. 
213. Before starting up, suppliers of 13 categories of tourism services must register, on line, in the 
National Tourism Register kept by the Chambers of Commerce.256  Only suppliers with establishment 
certificates and legal representation, as well as a business registration number issued by a Chamber of Commerce, may seek registration in the National Tour ism Register.  After the application has been 
received, there are 30 days in which to issue the registration certificate.
257  The information in the 
Register is available to the public and service provide rs must update it annually;  failure to do so leads 
to sanctions such as an order to close the establishment, issued by MCIT to the local or municipal 
magistrate.258  Both listing in the Register and updating entries are free of charge.259  B y  
December 2011, the National Tourism Register ha d 14,727 registrations, most of them tourist 
accommodation (47 per cent) and travel agencies (28.3 per cent).260 
214. As of 2013, tourist guides will have to take pa rt in professional training courses in order to 
update their registration.261  In addition to being listed in the National Tourism Register, in order to 
provide services a tourist guide must be in possession of a professional tourist guide permit, which is 
issued by the Professional Council of Tourist Guides.262  The formalities for obtaining the permit 
require the applicant to deposit with the Colombian Agrarian Bank, in the name of the Council, an 
amount equivalent to 15 current legal daily minimum wages.263  If an applicant resides outside 
Bogota, he must also pay a further Col$264,450 fo r administrative formalities.  A professional permit 
is indefinite.264  Foreign tourist guides may exercise in Colombia provided that they observe the 
requirements in Colombian legislation.  They must  obtain a professional tourist guide permit and be 
listed in the National Tourism Regi ster.  Guides may exercise throughout  Colombia;  the cost of their 
services is fixed freely and is not regulated.  Fo reign travel agencies may establish an agency or 
subsidiary in Colombia;  they must be register ed with the Chamber of Commerce and in the Single 
Tax Register (RUT) and meet the othe r municipal or local requirements. 
                                                      
255 MCIT and the National Planning Department (2011) and MCIT (2008b). 
256 Law No. 1.101 of 2006, Article 12;  and online information from MCIT, " Registro Nacional de 
Turismo ".  Viewed at:  https://www.mincomercio.g ov.co/minturismo/publi caciones.php?id=12184. 
257 Decree No. 2.074 of 2003, Articles 4 and 6. 
258 Decree No. 2.074 of 2003, Articles 1 and 11.  If the owner changes or the establishment is sold, the 
Register is updated immediately. 
259 MCIT, Resolution No. 236 of 2005. 
260 Online information from MCIT, " Estadísticas de turismo ".  Viewed at:  https://www. 
mincomercio.gov.co/pub licaciones.php?id=16590. 
261 MCIT, Resolution No. 4.896 of 2011. 
262 Decree No. 503 of 2007, Articles 3 and 4. 
263 Online information from MCIT, " Registro Nacional de Turismo ".  Viewed at:  https://www. 
mincomercio.gov.co/minturism o/publicaciones.php?id=12184. 
264 Decree No. 503 of 2007, Article 7. WT/TPR/S/265 Trade Policy Review 
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  215. Colombia has 6,928 accommodation facilities liste d in the National Tourism Register, of 
which almost 90 per cent are independent facilities.   The major chains present in Colombia are 
Estelar, Decamerón, Dann, GHL and Royal, which each have 15 facilities.265 
216. Several incentives are available to investors, as well as to Colombian and foreign tourists in 
Colombia.  Suppliers of ecotourism services (which ha ve been practising since 2003) are exempt from 
payment of income tax for a period of 20 years, as are the suppliers of hotel services.  The latter may 
remain exempt for 30 years if they provide servi ces solely in hotels built or rehabilitated between 
2003 and 2007.266  Investors may also be eligible for the Vallejo Plan for services and for deductions 
from payment of taxes and parafiscalg contributions gr anted by the Government in order to encourage 
business development and job creation.267  Foreign tourists are also eligible for VAT refunds when 
buying certain goods268 and they pay a rate of 10 per cent (instead of 16 per cent) for hotel services.269  
There are also 15 per cent discounts on hotel rates a nd at least 50 per cent on the cost of entry to 
Government-owned tourism sites for Colombia n and foreign tourists over 62 years of age.270 
217. Suppliers of 21 categories of tourism services must pay a parafiscal contribution to promote 
tourism.271  This contribution has also applied to shopping centres since 2011.272  It is equivalent to 
2.5 per mille of the income of the service provide r, with the exception of bars and restaurants for 
tourists273, which pay 1.5 per mille, and airlines, wh ich pay US$1 per passenger on international 
flights going to or coming from Colombia.274  This contribution is used to finance the Tourism 
Promotion Fund.275  In 2010, the total amount of the contribution was Col$23,500 million.276  The 
promotion of tourism is also financed by collec ting a tourism tax that h as been paid by foreign 
passengers travelling to Colombia on international flights, with some exceptions, since the end 
of 2006.  This revenue goes to programmes to prom ote tourism implemented through Proexport or the 
Tourism Promotion Fund, depending whether they  are of international or national scope.277  In 2010, 
revenue from the tourism tax amounted to Col$16 billion (Col$7 billion in 2008).278 
218. Municipalities with fewer than 100,000 inhabita nts and of considerable cultural value may 
introduce a "tourism toll" on access routes to tourism si tes.  This must not exceed the current legal 
daily minimum wage for public or commercial vehi cles and half the current legal daily minimum 
wage for private vehicles.  The funds collected are intended for the conservation of tourism sites.279  
The authorities have indicated that, so far, no to urism tolls have been introduced in Colombia. 
                                                      
265 World Tourism Organization and Iberoa merican General Secretariat (2009). 
266 Proexport (2010b). 
267 Law No. 1.429 of 2010. 
268 Made-up articles and footwear, perfume, leather goods, compact discs, handicrafts, liquor and food, 
toys, emeralds and hand-made jewellery. 
269 Proexport (2010b). 
270 Law No. 1.171 of 2007 and MCIT, Resolution No. 4.322 of 2011. 
271 Law No. 1.101 of 2006, Article 3, and Decree No. 1.036 of 2007, Article 1. 
272 MCIT, Resolution No. 4.895 of 2011. 
273 Those bars and restaurants situated in certain tourism sites and whose annual invoicing exceeds 
500 current monthly minimum wages (MCIT, Resolutions No. 347 and No. 348 of 2007). 
274 Law No. 1.101 of 2006, Article 2, and Decree No. 1.036 of 2007. 
275 Decree No. 1.036 of 2007, Article 2. 
276 MCIT and National Planning Department (2011). 
277 Law No. 1.101 of 2006, Articles 4-6, and Decree No. 1.782 of 2007. 
278 MCIT and National Planning Department (2011). 
279 Law No. 300 of 1996, Article 25. Colombia WT/TPR/S/265 
 Page 185 
 
 
  219. Colombia has signed tourism cooperation agreem ents with Chile, Cuba, Jamaica, Mexico, 
Romania and Spain.280 
                                                      
280 Online information from MCIT, " Documentos internacionales ".  Viewed at:  
https://www.mincomercio .gov.co/minturismo/pub licaciones.php?id=12190. Colombia WT/TPR/S/265 
 Page 187 
 
 
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