WORLD TRADE  
ORGANIZATION  G/SCM/N/146/COL 
5 September 2006 
 
 (06-4267) 
Committee on Subsidies and 
Countervailing Measures Original:   Spanish 
 
 
 
SUBSIDIES 
 
Extension Under SCM Article 27.4 of th e Transition Period for the Elimination  
of Export Subsidies Pursuant to the Procedures in Document G/SCM/39  
 
Updating Notification  
 
COLOMBIA 
 
 
 The following communication, dated 29 August 2 006, is circulated at the request of the 
delegation of Colombia.  
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 In fulfilment of Colombia's transparency co mmitment under paragraphs  8 and 10(i) of the 
Decisions adopted on 13 December 2002 in documents  G/SCM/93 and G/SCM/94, and in fulfilment 
of the commitments undertaken in the Deci sions adopted on 8 December 2003 in documents 
G/SCM/93/Add.1 and G/SCM/94/Add.1,  we herewith submit the annual notification for the year 2005 
concerning the programmes "Special Import-Expor t System for Capital Goods and Spare Parts 
(SIEX)" and "Free-Zone Regime".   Colombia continues to comply strictly with its obligations not to modify these programmes so 
as to make them more favourable, including as to th e scope, coverage and inte nsity of benefits, than 
they were as at 1 September 2001. 
 
 As can be appreciated from documents  G/SCM/N/123/COL and G/SCM/N/128/COL of 
5 July 2005, Colombia has issued regulations fo r phasing out the programmes "Special Import-Export 
System for Capital Goods and Spare Parts (SIEX)" and "Free-Zone Regime".  
 On 30 December 2005, Colombia issued Law 1004, which establishes new criteria for free 
zones, such as being instrumental in job creation,  stimulating investment and fulfilling international 
commitments with regard to the phasing-out process.   Colombia thus continues to fulfil the commitm ents undertaken in the Decisions adopted on 
8 December 2003 in documents G/SCM/93/Add.1 and G/SCM/94/Add.1. 
 G/SCM/N/146/COL 
Page 2  
 
  A. SPECIAL
 IMPORT-EXPORT  SYSTEM  FOR  CAPITAL  GOODS  AND  SPARE  PARTS  
(SIEX) 
1. Description of the programme 
 This is a mechanism which provides for the duty-free import of capital goods and spare parts 
intended for the installation, expans ion or relocation of production units to be used in the manufacture 
of export goods.  It also provides for the duty-free import of components to be used in the production 
or assembly of capital goods or spare parts which are then used in the production of export goods. 
 
2. Period covered by the notification 
 2005. 
 
3. Policy objective and/or purpose of the subsidy 
 The objective of the programme is to s timulate Colombian exports, promote their 
diversification and contribute to technology transfer through the importation of capital goods. 
 4. Background and authority for the subsidy 
 - Article 173(c) of Decree-Law 444 of 1967 
 - Decree 688 of 1967  - Decree 631 of 1985  - Resolution 682 of 1995 of the Colomb ian Foreign Trade Institute (INCOMEX) 
 - INCOMEX Resolution 1860 of 1999 
 - Resolution 1964 of 2001 of the Ministry of Foreign Trade 
 - Resolution 0143 of 2002 of the Ministry of Foreign Trade  - Resolution 1148 of 2002 of the Ministry of Foreign Trade  - Resolution 011 of 2003 of the Ministry of Foreign Trade  - Decree 1811 of 2004 
 - Resolution 1914 of 8 September 2004 of the Ministry of Trade, Industry and Tourism 
 
5. Form of the subsidy 
 Complete exemption from customs duties on the import of the goods. 
 
6. To whom and how is the subsidy provided 
 All natural or legal persons responsible fo r production, export or trading enterprises or non-
profit entities registered in the National Register of Exporters are eligible.  The subsidy takes the form 
of exemption from the payment of customs duties levied upon importation of the capital goods and spare parts covered by the programme.  7. Subsidy per unit 
 In view of the nature and coverage of the programme, there are no statistics available which 
reflect the amount of the subsidy per unit.  However, the total amount of the customs duties that the Government forwent as a result of the benefits granted under the programme was US$27.8 million in 
2004 and US$28.4 million in 2005.  Meanwhile, exports by the SIEX beneficiary companies totalled 
US$7,926.5 million in 2004 and US$2,849.1 million in 2005. 
  G/SCM/N/146/COL 
 Page 3 
 
 
  8. Duration of the subsidy 
 Up to 31 December 2006, under paragraph 10 of  the Decision adopted by the Committee on 
Subsidies and Countervailing Measures (G/SCM/94).  
9. Statistical data on the impact of the programme 
Year Imports of capital goods 
under the programme 
(in US$ million) Exports by companies 
benefiting from the notified 
programme (in US$ 
million) Value of the incentive 
(fiscal sacrifice)  
(in US$ million) Total Colombian exports 
(in US$ million) 
1998 458.8 4,139.1 49.2 10,865 
1999 545.3 5,494.1 60.3 11,617 
2000 512.5 6,340.4 53.0 13,114 
2001 379.8 5,630.2 60.81 13,320 
2002 228.3 5,462.4 34.91 12,902 
2003 387.7 6,350.0 27.92 13,092 
2004 243.3 7,926.5 27.83 16,729 
2005 264.64 2,849.13 28.41 21,187.1 
 
 1 Source :  Information Systems Office, Minist ry of Trade, Industry and Tourism. 
 2 Source :  National Customs and Excise Directorate (DIAN). 
 3 Source :  National Administrative Depart ment of Statistics and National Customs and Excise Directorate 
 (DANE-DIAN).  Prepared by the Office of Ec onomic Research (OEE), Ministry of Trade. 
 4 Source :  SIEX - Recorded Imports, Ministry of Trade. 
 
B. FREE-ZONE  REGIME  (ZF) 
1. Description of the programme 
 The Industrial Free Zones for Goods and Servi ces are specified geographical areas within the 
national territory, the purpose of which is to prom ote and develop the process of industrialization of 
goods and the supply of services intended primarily for foreign markets.  2. Period covered by the notification 
 2005. 
 
3. Policy objective and/or purpose of the subsidy 
 The objective of the programme is to promote foreign trade, generate employment and 
foreign exchange and to serve as a focus for i ndustrial development in the regions concerned. 
 
4. Background and authority for the subsidy 
 - Law 7 of 1991 
 - Decree 2233 of 1996  - Decree 727 of 1997 
 - Decree 918 of 2001 
 - Law 677 of 2001 G/SCM/N/146/COL 
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   - Resolution 1001 of 2002 of the Ministry of Foreign Trade 
 - Law 863 of 2003, Article 69  - Law 1004 of 2005  
5. Form of the subsidy 
 For industrial users in the free zones, the proportionate share of revenue obtained from 
foreign market sales is exempted from income tax a nd supplementary taxes.  Nor is the remittance tax 
applied to earnings from industrial activities carried ou t within the free zones.  Goods introduced into 
the free zones are considered to be outside the na tional territory for the pur poses of the customs duties 
applicable to imports and taxes on exports. 
 
6. To whom and how is the subsidy provided 
 The subsidy is granted to industrial users of goo ds, that is, to foreign or national legal persons 
legally established in Colombia with their own tax identification number, who carry out their 
activities – consisting in the manufacture, production, processing or assembly of goods for sale 
primarily on foreign markets – exclusively within th e respective free zone.  The subsidy is granted in 
the form of an exemption from income tax and supplementary taxes on the portion of the income 
obtained from foreign market sales.  
7. Subsidy per unit 
 No statistical information is available that reflects the amount of the subsidy per unit.  
However, the total amount of the income and s upplementary tax exemption was US$42.9 million in 
2004 and US$35.4 million in 2005.  
8. Duration of the subsidy 
 Up to 31 December 2006, under paragraph 10 of  the Decision adopted by the Committee on 
Subsidies and Countervailing Measures (G/SCM/93). 
 
9. Statistical data on the impact of the programme 
Year Exports under the notified programme
(in US$ million) Value of the incentive 
(fiscal sacrifice) 
(in US$ million) Total Colombian exports 
 (in US$ million) 
1998 341.9 13.0 10,865 
1999 359.0 19.2 11,617 
2000 471.2 40.9 13,114 
2001 329.0 48.21 13,320 
2002 369.7 53.51 12,902 
2003 389.6 13.51 13,092 
2004 132.3 42.91 16,729 
2005 139.01 35.41 21,187.1 
 
 1 Source :  National Customs and Excise Directorate (DIAN). 
 
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