COLOMBIA – MEASURES RELATING TO THE IMPORTATION OF TEXTILES, APPAREL AND FOOTWEAR NOTIFICATION OF AN APPEAL BY COLOMBIA UNDER ARTICLE 16.4 AND ARTICLE 17 OF THE UNDERSTANDING ON RULES AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES (DSU), AND UNDER RULE 20(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
Document: AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES (DSU), AND UNDER RULE 20(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
Date: 27 January 2016
Document codes: WT/DS461/6
Complainant: Panama
Respondent: Colombia
Third parties: Ecuador, El Salvador, EU, China, Guatemala, Honduras, U.S., Philippines
Dispute stage: Implementation & Compliance
Agreements cited: Art. II:1(b), II:1(a), VIII:1, X:3(a)  GATT 1994

COLOMBIA – MEASURES RELATING TO THE IMPORTATION
OF TEXTILES, APPAREL AND FOOTWEAR
NOTIFICATION OF AN APPEAL BY COLOMBIA
UNDER ARTICLE 16.4 AND ARTICLE 17 OF THE UNDERSTANDING ON RULES
AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES (DSU),
AND UNDER RULE 20(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
The following communication, dated 22 January 2016, from the delegation of Colombia, is being
circulated to Members.

Settlement Body ("DSB") of its decision to appeal certain issues of law and legal interpretations in
the Panel Report in Colombia – Measures Relating to the Importation of Textiles, Apparel and
Footwear (WT/DS461) ("Panel Report").
2. Pursuant to Rules 20(1) and 21(1) of the Working Procedures, Colombia files this Notice of
Appeal together with its Appellant's Submission with the Appellate Body Secretariat.
3. Pursuant to Rule 20(2)(d)(iii) of the Working Pr ocedures, this Notice of Appeal includes an
indicative list of the paragraphs of the Panel Report containing the alleged errors, without
prejudice to Colombia's ability to rely on other paragraphs of the Panel Report in its appeal.
4. Colombia seeks review by the Appellate Body of the following errors of law and legal
interpretation by the Panel in its Report and requests the following findings by the Appellate Body.
I. Review of the Panel's Findings under Article II of the GATT 1994 and Request for
Completion
5. The Panel erred in interpreting and applying Article II:1(b) of the GATT 1994 and failed to
make an objective assessment of the matter under Article 11 of the DSU in finding that "the
compound tariff, as regards the examples set out in paragraphs 7.164 and 7.180, exceeds the
levels bound in Colombia's Schedule of Concessions and is therefore inconsistent with the
obligation in Article II:1(b), first sentence, of the GATT 1994 not to impose on the import of
products of other Members 'ordinary customs duties in excess of those set forth and provided' in
Colombia's Schedule of Concessions".
1 The Panel erred because:
 it incorrectly concluded that it was not necessary to issue a finding on whether or not the
obligations of Article II:1 of the GATT 1994 are applicable to illicit trade. In proceeding in
this manner, the Panel failed to make an objective assessment of the matter under
Article 11 of the DSU2;

1 Panel Report, paras. 7.189, 7.192-7.194, and 8.2-8.4.
2 Panel Report, paras. 7.108 and 8.1.

 it improperly exercised judicial economy and violated Colombia's due process rights. By
exercising false judicial economy and failin g to respect Colombia's due process rights,
the Panel failed to make an objective assessment of the matter under Article 11 of the
DSU
3;
 it incorrectly found that Colombia's measure is "structured and designed to be applied to
all imports of the products concerned, withou t distinguishing between 'licit' and 'illicit'
trade" and that "no legal provision that ba ns the importation of goods whose declared
prices are below the thresholds established in Decree No. 456 has been identified". 4 In
making such findings, the Panel did not comply with Article 11 of the DSU. The Panel
erred further because such findings did not provide a valid basis for the Panel's ultimate
conclusion that it was not necessary for it to rule on whether Article II applied only to
licit trade
5;
 even on the assumption that Article II:1(b) were applicable to illicit trade, it erred in the
interpretation and application of Article II:1(b), and under Article 11 of the DSU, in
finding that it was not persuaded that Decree 456 "incorporates a legislative ceiling
which prevents the compound tariff resulting in duties that exceed the levels bound in
Colombia's Schedule of Concessions"
6;
 it improperly relaxed the burden of proof for Panama in establishing a prima facie case
under Article II.7 In proceeding in this manner, the Panel failed to comply with Article 11
of the DSU.
6. For the reasons provided above, Colombia re quests that the Appellate Body reverse the
Panel's finding that "the compound tariff, as regards the examples set out in paragraphs 7.164
and 7.180, exceeds the levels bound in Colombia's Schedule of Concessions and is therefore
inconsistent with the obligation in Article II:1(b), first sentence, of the GATT 1994 not to impose
on the import of products of other Members' ordi nary customs duties in excess of those set forth
and provide' in Colombia's Schedule of Concessions".
8 The Panel's finding under Article II:1(a) is
based entirely on its erroneous findings of inconsistency under Article II:1(b). Therefore, if the
Appellate Body were to agree with Colombia's request to reverse the Panel's findings under
Article II:1(b), Colombia requests that the Appella te Body also reverse the Panel's finding under
Article II:1(a).9 And, as a result of the above, the Appellate Body must also reverse the Panel's
conclusions in paragraph 8.2, 8.3, and 8.4 of the Panel Report.
7. If, as requested by Colombia above, the Appellate Body reverses the Panel's finding that it
was not necessary for the Panel to issue a finding on whether or not the obligations of Article II:1
of the GATT 1994 can be extended to illicit trade, Colombia requests the Appellate Body to
complete the legal analysis under Articles II:1(a) and (b) and make the following findings:
 Articles II:1(a) and (b) do not apply to illicit trade; and,
 because imports priced below the thresholds established in Decree 456 are imported at
artificially low prices that do not reflect market conditions, the compound tariffs
established in Decree 456 do not violate Articles II:1(a) and (b) of the GATT 1994.
II. Review of the Panel's Findings under Article XX of the GATT 1994 and Request for
Completion
8. The Panel erred in the interpretation and ap plication of Article XX of the GATT 1994 and
failed to make an objective assessment of the matter under Article 11 of the DSU in finding that

3 Panel Report, paras. 7.90, 7.108 and 8.1.
5 Panel Report, paras. 7.105-7.108 and 8.1.
6 Panel Report, paras. 7.186, 7.189, 7.192-7.194, and 8.2-8.4.
7 Panel Report, paras. 7.189, 7.192-7.194, and 8.2-8.4.
8 Panel Report, paras. 7.189, 7.192-7.194, and 8.2-8.4.
9 Panel Report, paras. 7.192 and 7.194.

Colombia has failed to demonstrate that its measure is justified under Article XX(a) and (d) of the
GATT 1994.10 The Panel erred because:
 it incorrectly interpreted and applied the terms "to protect public morals" in
subparagraph (a) and failed to make an objective assessment of the matter under
Article 11 of the DSU when it found that Colombia has failed to demonstrate that the
compound tariff is a measure to protect public morals,11 specifically:
o it erroneously imported elements of the "necessity" test to the assessment of
whether Decree 456 is a measure "to protect public morals;"
o even in the event that it was appropriate for the Panel to examine the contribution of
the measure, it developed and imposed an overly demanding standard of "to protect"
that is inconsistent with Article XX(a);
o it required Colombia to demonstrate that Decree 456 addressed the money
laundering problem in its entirety as oppose d to addressing the particular aspect of
money laundering targeted by Decree 456;
o it failed to properly the assess statistical evidence provided by Colombia
demonstrating the existence of undervalu ation and money laundering and thereby
acted inconsistently with Article 11 of the DSU;
o it misapplied "to protect" with regard to the text of the measure, the existence of
exclusions, the period of validity, the legal consequences of importing goods at prices
below the thresholds, and in regard to additional evidence.
 it incorrectly interpreted and applied the "necessity" requirement under
subparagraph (a) and failed to make an objective assessment of the matter under
Article 11 of the DSU in finding that Colombia has not demonstrated the contribution of
the compound tariff to the alleged objective of combating money laundering
12 and that
Colombia has not demonstrated that its compound tariff is necessary to combat money
laundering.13 The Panel's errors include:
o an erroneous assessment of the contribution of Decree 456 to the fight against
money laundering and, in particular, to the use of imports of apparel at artificially
low prices to launder money14;
o its failure to undertake a proper weighing and balancing of the factors involved in the
analysis of "necessity"; and
o failing to comply with its obligations under Article 11 of the DSU by disregarding
qualitative and quantitative evidence that amply demonstrated the contribution of
Decree 456 to the fighting money laundering through imports of apparel and
footwear at artificially low prices15;
 it incorrectly interpreted and applied subparagraph (d) of Article XX because the Panel's
findings under subparagraph (d) are entirely based on its erroneous findings under
subparagraph (a)16;
 it incorrectly interpreted and applied the chapeau of Article XX and failed to make an
objective assessment of the matter under Article 11 of the DSU in finding that "because
of the various exclusions from the application of the measure for imports originating in
countries with which Colombia has trade agreements in force, for imports into

10 Panel Report, paras. 7.592 and 8.5-8.7.
11 Panel Report, paras. 7.331-7.401 and 8.5.
12 Panel Report, paras. 7.409-7.445, 7.470, 7.471 and 8.5.
13 Panel Report, paras. 7.445, 7.470-7.471 and 8.5.
14 Panel Report, paras. 7.409-7.437.
15 Panel Report, paras. 7.354-7.355 and 7.414-7.430.
16 Panel Report, paras. 7.513-7.537 and 8.6.

Colombia's Special Customs Regime Zones and for imports under the 'Plan Vallejo', even
assuming that Colombia had succeeded in showing that its measure was provisionally
justified under Article XX(a) or Article XX(d) of the GATT 1994, the compound tariff is
not applied in a manner such that it meets the requirements of the chapeau of Article XX
of the GATT 1994".
17 The Panel also erred under Articles 6.2 in finding that Colombia's
arguments concerning Article XXIV were not within its terms of reference.
9. For the reasons provided above, Colombia requests that the Appellate Body reverse
paragraphs 7.592 and 8.5-8.7 of the Panel Report, which find that Colombia has failed to
demonstrate that its measure is justified under Article XX of the GATT 1994. 18 Colombia
additionally requests that the Appellate Body co mplete the analysis and find that Colombia's
measure is justified under Articles XX(a) and (d) of the GATT 1994.