WORLD TRADE
ORGANIZATIONG/SCM/N/48/COL
G/SCM/N/60/COLG/SCM/N/71/COL
7 January 2002
(02-0056)
Committee on Subsidies and
Countervailing MeasuresOriginal:  Spanish
SUBSIDIES
New and Full and Updating Notifications Pursuant to Article XVI.1 of the
GATT 1994 and Article 25 of the Agreement on
Subsidies and Countervailing Measures
COLOMBIA
The following communication, dated 31 December 2001, has been received from the
Permanent Mission of Colombia.
_______________
Pursuant to Article 21.5 of the Agreement on Subsidies and Countervailing Measures (SCM
Agreement) and Article XVI of the GATT 1994, Colombia hereby submits the new and full
notification of its programmes following the procedures laid down in document G/SCM/6.
In accordance with Article 25.7 of the SCM Agreement, this notification does not prejudge
either the legal status of the notified programmes under GATT 1994 and the SCM Agreement, the
effects under the SCM Agreement, or the nature of the programmes themselves.G/SCM/N/48/COL
G/SCM/N/60/COL
G/SCM/N/71/COL
Page 2
A. TAX REIMBURSEMENT CERTIFICATE (CERT)
1. Description of the programme
The Tax Reimbursement Certificate (CERT) is a measure designed to support exports,
consisting of a refund of indirect taxes paid by the exporter.
2. Period covered by the notification
1998, 1999 and 2000.
3. Policy objective and/or purpose of the subsidy
The objective is to stimulate minor or non-traditional exports.
4. Background and authority for the subsidy
- Law 48 of 1983
- Law 7 of 1991- Decree 446 of 1992- Decree 1608 of 1992
- Decree 1650 of 1992
- Decree 708 of 1995- Decree 955 of 1996- Decree 033 of 2001
5. Form of the subsidy
Refund of indirect taxes paid by the exporter.  Only that portion of the refund which exceeds
the amount of the indirect taxes paid by the exporter constitutes the subsidy.
6. To whom and how the subsidy is provided
The CERT is provided in the form of a freel y negotiable certificate in the name of the
exporter, who obtains it from the Banco de la República (Central Bank) through a financial
intermediary.  The certificates are valid for two years from the date of issue.  This incentive is
available to natural and legal persons who have show n that the goods eligible for the certificate have
been exported.
7. Subsidy per unit
US$67.4 million worth of CERTs were granted in 1998, US$74.6 million in 1999 and
US$54.4 million in 2000.  The level of subsidies during the same period was US$14.4 million in1998, US$12.3 million in 1999, and US$10.6 million in 2000.G/SCM/N/48/COL
G/SCM/N/60/COL
G/SCM/N/71/COL
Page 3
8. Duration of the subsidy
The subsidy component of the CERT programme was eliminated on 12 January 2001 by
Decree 033.
9. Statistical data on the impact of the programme
Year Total exports
under the CERT
programme (in
millions of US$)Value of the
incentive (in
millions of US$)Percentage of the
subsidy as a
proportion of the
exports coveredTotal Colombian
exports (in
millions of US$)
1998 2,119.7 14.4 0.68% 10,865
1999 2,492.3 12.3 0.49% 11,617
2000 1,754.4 10.6 0.60% 13,114
B. 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, expansion 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.
Finally, it provides for the deferred payment up to five years of the value-added tax (VAT) resulting
from the said import.
2. Period covered by the notification
1998, 1999 and 2000.
3. Policy objective and/or purpose of the subsidy
The objective of this programme is to stimulate 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 Colombian Foreign Trade Institute (INCOMEX)G/SCM/N/48/COL
G/SCM/N/60/COL
G/SCM/N/71/COL
Page 4
- INCOMEX Resolution 1860 of 1999
5. Form of subsidy
Complete exemption from customs duties on the import of the goods and deferred payment of
the value-added tax for a period of five years.
6. To whom and how the subsidy is provided
All natural or legal persons responsible for 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 andspare parts covered by the programme, and deferred payment up to five years of the VAT resulting
from the said importation.
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$49.2 million in
1998, US$60.3 million in 1999 and US$53.0 million in 2000.  Imports of capital goods under the
programme amounted to US$458.8 million in 1998, US$545.3 million in 1999 and US$512.5 million
in 2000.  Meanwhile, exports by the SIEX beneficiary companies totalled US$4,139.1 million in1998, US$5,494.1 million in 1999 and US$6,340.4 million in 2000.
8. Duration of the subsidy
The duration of the notified programme is subject to Colombia's rights and obligations under
the WTO Agreements and in particular the SCM Agreement.
9. Statistics on the impact of the programme
Year Imports of capital
goods under the
programme
(in millions of
US$)Exports by
companies
benefiting from the
notified
programme (in
millions of US$)Value of the
incentive
(fiscal sacrifice)*
(in millions of
US$)Total Colombian
exports
(in millions of
US$)
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
*Because the statistics are lacking, the value of the incentive does not include the deferred
VAT payment component.G/SCM/N/48/COL
G/SCM/N/60/COL
G/SCM/N/71/COL
Page 5
C. FREE ZONE REGIME (ZF)
1. Description of programme
The Industrial Free Zones for Goods and Services 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
1998, 1999 and 2000.
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 industrial 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
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 and supplementary taxes.  Nor is the remittance tax
applied to earnings from industrial activities carried  out within the free zones.  Goods introduced into
the free zones are considered to be outside the national territory for the purposes of the customs duties
applicable to imports and taxes on exports.
6. To whom and how the subsidy is provided
The subsidy is granted to industrial users of goods, that is, to foreign or national legal persons
legally established in Colombia with their own tax identification number and who carry out their
activities - consisting in the manufacture, production, processing or assembly of goods for sale
primarily on foreign markets - exclusively within the respective free zone.  The subsidy is granted in
the form of an exemption from income tax and supplementary taxes on the portion of the incomeobtained 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 supplementary tax exemption was US$13 million inG/SCM/N/48/COL
G/SCM/N/60/COL
G/SCM/N/71/COL
Page 6
1998, US$19.2 million in 1999 and US$40.9 million in 2000.  Sales to foreign markets from the free
zones amounted to US$341.9 million in 1998, US$359 million in 1999 and US$471 million in 2000.
8. Duration of the subsidy
The duration of the notified programme is subject to Colombia's rights and obligations under
the WTO Agreements and in particular the SCM Agreement.
9. Statistical data on the impact of the programme
Year Exports under the notified
programme
(in millions of
US$)Value of the incentive
(fiscal sacrifice)*
(in millions of US$)Total Colombian exports
(in millions of US$)
1998 341.9 13.0 10,865
1999 359.0 19.2 11,617
2000 471.2 40.9 13,114
*Because the statistics are lacking, the valu e of the incentive does not include the amounts
resulting from non-payment of tariffs and VAT on capital goods and spare parts introduced into thefree zones.
D. 
TRANSPORT COMPENSATION MECHANISM (MCT)
1. Description of the programme
The MCT is a measure designed to encourage exports to countries that do not have direct
transport services by paying part of the freight costs to the country of destination.  The basis for
payment under this mechanism is the freight charge authorized in advance by Proexport Colombia.
2. Period covered by the notification
1998, 1999 and 2000.
3. Policy objective and/or purpose of the subsidy
The objective is to stimulate exports to countries that do not have regular and efficient direct
transport services and to facilitate access to new markets for a period of five years.
4. Background and authority for the subsidy
- Proexport Resolutions 003 and 004 of 1993
- Proexport External Circular 002 of 1993- Proexport Circular P-TRN 9075 of 1994G/SCM/N/48/COL
G/SCM/N/60/COL
G/SCM/N/71/COL
Page 7
5. Form of subsidy
For the first three years of its implementation, the MCT will refund 26 per cent of the total cost of
freight to the country of destination.  During the remaining two years, it will refund 13 per cent of thevalue indicated.
6. To whom and how the subsidy is provided
The subsidy is paid to exporters who meet the requirements for benefiting from the MCT.
Payment is made against evidence of the charges paid sent to Proexport Colombia by the exporters
not later than 120 days after shipment.
7. Subsidy per unit
In 1998, the MCT amounted to US$350 thousand, in 1999 to US$210 thousand and in 2000,
to US$290 thousand.  Exports benefiting from the mechanism totalled US$19 million in 1998,
US$10.1 million in 1999 and US$10.6 million in 2000.
8. Duration of the subsidy
The programme was set up in 1983 and revised in 1993.  It applies to each product destination
for five consecutive years from the date on which it was first utilized.  The duration of the notified
programme is subject to Colombia's rights and obligations under the WTO Agreements and in
particular the SCM Agreement.
9. Statistical data on the impact of the programme
Year Exports under the notified
programme
(in millions of US$)Value of the incentive
(millions of US$)Total Colombian exports
(millions of US$)
1998 19.5 0.35 10,865
1999 10.1 0.21 11,617
2000 10.6 0.29 13,114
__________