COLOMBIA – INDICATIVE PRICES AND RESTRICTIONS ON PORTS OF ENTRY
Document: ARB-2009-1/25 Arbitration under Article 21.3(c) of the Understanding on Rules and Procedures Governing the Settlement of Disputes
Date: 2 October 2009
Document codes: WT/DS366/13
Complainant: Panama
Respondent: Colombia
Third parties: China, Ecuador, EU, Guatemala, Honduras, India, Taiwan, Turkey, U.S.
Dispute stage: Panel
Agreements cited: Art. 1, 2, 3, 4, 5, 6, 7, 13  Customs valuationArt. VII, VII:1, III:2, X:3(a), XIII:1, V:6  GATT 1994

COLOMBIA – INDICATIVE PRICES AND RESTRICTIONS
ON PORTS OF ENTRY

ARB-2009-1/25

Arbitration
under Article 21.3(c) of the
Understanding on Rules and Procedures
Governing the Settlement of Disputes

Award of the Arbitrator
Giorgio Sacerdoti

AWARD OF THE ARBITRATOR

Parties

Colombia
Panama
 ARB-2009-1/25

 Arbitrator:

 Giorgio Sacerdoti

I. Introduction
1. This arbitration under Article 21.3 of the Understanding on Rules and Procedures Governing
the Settlement of Disputes (the "DSU") concerns the "r easonable period of time" for the
implementation of the recommendations and rulings of the Dispute Settlement Body (the "DSB") in
the dispute Colombia – Indicative Prices and R estrictions on Ports of Entry. 1 This dispute concerns
Colombia's use of indicative prices in customs proc edures and restrictions on ports of entry available
for imports of textiles, apparel, and footwear from Panama.
2. On 20 May 2009, the DSB adopted 2 the Panel Report, (the "Panel Report"). 3 The Panel Report contained, inter alia , the
following findings: (i) Article 128.5 e) of Decree 2685 of 28 December 1999 ("Decree 2685/1999") 4
and Article 172.7 of Resolution 4240 of 2 June 2000 ("Resolution 4240/2000")5 issued by Colombia's
Directorate of Taxes and National Customs ( Dirección de Impuestos y Aduanas Nacionales )
("DIAN"), as well as the various resolutions establis hing indicative prices, are inconsistent "as such"
with the methods of valuation set out in Article s 1, 2, 3, 5, 6, 7.2(b), and 7.2(f) of the Agreement on
Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (the "Agreement
on Customs Valuation ")6; and (ii) Resolution 7373 of 22 June 2007 ("Resolution 7373/2007") 7, as
amended by Resolution 7637 of 28 June 2007 8 (the "ports of entry measu re") is inconsistent with

1WT/DS366.
2WT/DS366/9.
3WT/DS366/R and Corr.1.
4(Colombia's Ministry of Finance) Ministerio de Hacienda y Crédito Publico, Decreto 2685 de 1999
(diciembre 28), Diario Oficial No. 43.834 de 30 de diciembre de 1999 (Panel Exhibit COL-1).
5(DIAN) Dirección de Impuestos y Aduanas Nacionales, Resolución 4240 de 2000 (junio 2), Diario
Oficial No 44.037 de 9 de junio de 2000 (Panel Exhibit COL-2).
6Panel Report, paras. 8.1 and 8.2.
7Dirección de Impuestos y Aduanas Nacionales, Reso lución 7373 de 2007 (junio 22), Diario Oficial
No. 46.678 de 3 julio de 2007 (Panel Exhibit PAN-34).
8Dirección de Impuestos y Aduanas Nacionales, Resolución 7637 de 2 007 (junio 28), Diario Oficial
No. 46.681 de 6 de julio de 2007 (Panel Exhibit PAN-36).

Article I.1, the first and second sentences of Article V:2, the first sentence of Article V:6, and
Article XI:1 of the General Agreement on Tariffs and Trade 1994 (the "GATT 1994").
9 The Panel
further rejected Colombia's defence that the ports of entry measure was justified under Article XX(d)
of the GATT 1994 as a measure necess ary to secure compliance with Colombia's customs laws and
regulations.10
3. At the DSB meeting of 19 June 2009, Colombia indicated its intention to implement the
recommendations and rulings of the DSB in this dis pute and stated that it would require a reasonable
period of time in which to do so.11
4. On 7 July 2009, Panama informed the DSB that consultations with Colombia had not resulted
in an agreement on the reasonable period of time for implementation. Panama therefore requested
that such period be determined through binding arbitration, pursuant to Article 21.3(c) of the DSU.
12
5. Panama and Colombia were unable to agree on an arbitrator as contemplated by footnote 12
to Article 21.3(c) of the DSU. Therefore, by le tter dated 24 July 2009, Panama requested that the
Director-General appoint an arbitrator pursuant to the authority conferred upon him by that provision.
The Director-General appointed me as Arbitrator on 30 July 2009, after consulting the parties. I
informed the parties of my acceptance of the appointment by letter dated 3 August 2009.13
6. Panama and Colombia have agreed that this Award will be deemed to be an award under
Article 21.3(c) of the DSU, notwithstanding the e xpiry of the 90-day period stipulated in that
provision.14
7. Colombia filed its written submission on 10 August 2009. Panama filed its written
submission on 17 August 2009. An oral hearing was held on 26 August 2009.

9Panel Report, para. 8.5.
10Panel Report, para. 8.7.
11WT/DSB/M/270, para.51.
12WT/DS366/10.
13WT/DS366/11.
14The 90-day period following the adoption of the Panel Report expired on 18 August 2009. By joint
letter dated 31 July 2009, Panama and Colombia agreed that any award of the arbitrator in this case that is not
made within 90 days of the adoption of the recomme ndations and rulings of the DSB shall nevertheless be
deemed to be an award of the arbitrator for the purposes of Article 21.3(c) of the DSU. (See WT/DS366/12)

II. Arguments of the Parties
A. Colombia
8. Colombia requests that I determine the "reasona ble period of time" for implementation of the
recommendations and rulings of the DSB in this disp ute to be 15 months from the date of adoption by
the DSB of the Panel Report, that is, until 20 August 2010.15
9. As a matter of principle, Colombia highlights that "the choice of the means of implementation
is the prerogative of the implementing Member." 16 Therefore, an implementing Member has a
"measure of discretion" in selecting the means of implementation, which includes the choice of either
"withdrawing or modifying" the inconsistent measure. 17 Thus, the view expressed by previous
arbitrators that "the reasonable period of time ... should be the shortest period possible within the legal
system of the Member" 18 must be read as a requirement to implement "the proposed new measure" 19
in the shortest period possible within that legal sy stem. Referring to previous arbitrations, Colombia
emphasizes that it is not within the arbitrator's ma ndate under Article 21.3(c) of the DSU to judge the
manner in which the implementing Memb er intends to achieve compliance. 20 Rather, my mandate as
arbitrator is limited to determining whet her the proposed period is "reasonable" 21 in the light of the
type of implementation selected.
10. Colombia also underscores that the two sets of legislative and regulatory measures concerning
customs control and enforcement challenged by Panama in this dispute "are related and are part of the
on-going fight against under-invoicing, contraband, and contraband-related money-laundering and
drug trafficking."22 Although Colombia is examining whethe r it would be possible to implement the

15Colombia's submission, paras. 3, 4, 45, 65, and 115.
16Colombia's submission, para. 23.
17Colombia's submission, para. 22 (referring to Award of the Arbitrator, Brazil – Retreaded Tyres
(Article 21.3(c)), paras. 57 and 58, where the ar bitrator stated that Brazil coul d "remain within the range of
permissible actions to comply" by lifting the import ban to remove the inconsistency with Article XI of the
GATT 1994 or by modifying the existing ban to rectify the inconsistencies with the chapeau of Article XX (in
turn referring to Award of the Arbitrator, Japan – DRAMs (Korea) (Article 21.3(c)), para. 37; and Award of the
Arbitrator, US – Offset Act (Byrd Amendment) (Article 21.3(c)), para.50)).
18Colombia's submission, para. 23 (quoting Award of the Arbitrator, EC – Hormones (Article 21.3(c)) ,
paras. 25 and 26).
20Colombia's submission, paras. 25 and 26 (referring to Award of the Arbitrator, EC – Export Subsidies
on Sugar (Article 21.3(c)) , para. 69; and Award of the Arbitrator, Japan – DRAMs (Korea) (Article 21.3(c)) ,
para. 27). Colombia also refers to the arbitrator's statement in Brazil – Retreaded Tyres (Article 21.3(c)) , that
his mandate related to the "time by when the implementing Member must have achieved compliance, not to the
manner in which that Member achieves compliance." Yet, the arbitrator considered that "when a Member must
comply cannot be determined in isolation from the chos en means of implementation" and thus relates to the
question of how a Member intends to comply. ( Ibid., para. 25 (emphasis omitted) (referring to Award of the
Arbitrator, Brazil – Retreaded Tyres (Article 21.3(c)), para. 47))
21Colombia's submission, para. 26.
22Colombia's submission, para. 27.

recommendations and rulings of the DSB through "a single revised measure concerning customs
control and customs enforcement that is sufficiently effective and comprehensive"
23, Colombia
outlines its proposed means of implementation separately for each of those sets of measures.
1. Proposed Means of Implementation
(a) Indicative Prices
11. With respect to the provisions of Decree 2685/1999 and its main implementing regulation
(Resolution 4240/2000) concerning the use of indica tive prices as a custom s control mechanism,
Colombia intends to implement the DSB's recomme ndations and rulings "by revising the design and
implementation of its customs control system base d on indicative prices to more clearly separate
customs valuation from the legitimate right to exercise customs control." 24 According to Colombia,
this means of implementation requires time-cons uming preparation and involves a complex legal
process that would entail the following four essential steps.
12. First, Colombia intends to identify and eval uate whether and to what extent various
provisions of Colombia's laws, re gulations, and administrative orders 25 may be implicated by the
DSB's recommendations and rulings and by the amendment of the indicative prices mechanism. 26 In
its analysis, Colombia will also consider Andean Community Decision 57127 and Andean Community
Resolution 846 28, which relate to customs control and pr ovide for the use of benchmark prices as
control mechanisms, because Andean Community la w has direct application under Colombian law. 29
Colombia estimates that this initial identification a nd evaluation stage will take about three months to
complete.
13. Secondly, Colombia will examine different alternatives to amend its existing indicative prices
system. This will include: an analysis of various international norms dealing with customs valuation
and customs control; a review of the experience of other countries facing similar problems and
whether they employ guarantee mechanisms; an examination of how to administer a guarantee

23Colombia's submission, para. 27.
24Colombia's submission, para. 28.
25Colombia refers specifically to Decree 2685/1999, Resolution 4240/2000, and (DIAN) Manual de
Valoración – Orden Administrativa 0005, dated 28 December 2004. (Colombia's submission, para. 30)
26Colombia's submission, paras. 30-32.
27Comunidad Andina, Decisión 571 – Valor en Aduana de las Mercancías Importadas (12 de
diciembre de 2003) (published in Gaceta Oficial, Año XX, No. 1023 (15 de diciembre de 2003) ) (Panel Exhibit
COL-5).
28Comunidad Andina, Resolución 846 (6 de agosto de 2004), Reglamento Comunitario de la Decisión
571 – Valor en Aduana de las Mercancías Importadas (published in Gaceta Oficial, Año XXI, No. 1103 (9 de
agosto de 2004)) (Panel Exhibit COL-6).
29Colombia's submission, para. 30.

system based on cash deposits; and an evaluation of whether a generalized system of advance import
declaration can be introduced. Colombia propos es to examine the WTO-consistency of different
alternatives and the practices of the World Custom s Organization (the "WCO") on customs valuation
and customs control. Colombia also intends to co nsult with various stakeholders in the Colombian
public and private sectors dealing with, and suffering from, illegitimate trade. 30 Subsequently, the
DIAN will elaborate specific drafting proposals for "a mechanism of customs control that is in line
with Colombia's international oblig ations, based on international prac tice, and which is effective in
combating the persistent problem of under-invoicing and contraband." 31 Colombia expects that this
stage of implementation will take six to nine months.
14. Thirdly, Colombia would implement the new measure into its computerized system of
customs administration, which provides customs admi nistrators with the software to conduct customs
verification and control, and enables the electronic filing of import declarations. Colombia estimates
that the integration of any new procedures in to its "sophisticated and highly integrated" 32
computerized customs administration system, which is required by Colombian Law 33, will likely take
up to four months.
15. As a fourth and final step, Colombia intends to train DIAN officials, importers, and other
users of its customs control system in orde r to familiarize them with the new mechanism. 34 Colombia
expects the initial training of DIAN officials to take two months.
16. In addition to specific steps to implement th e DSB's recommendations and ruling on the use
of indicative prices, Colombia intends to introduce le gal reforms to ensure that customs-related bank
or insurance guarantees are effectively available to importers in the context of its revised customs
control system. Colombia argues that amendments to its customs securities laws would fall within the
scope of proceedings under Article 21.5 of the DSU because of their "sufficiently close nexus"35 to the

30Colombia's submission, para. 36. Colombia submits that this consultation is required by the
constitutional principle of transparency in government administration set forth in Article 209 of the Constitution
of Colombia.
31Colombia's submission, para. 37.
32Colombia's submission, para. 39.
33Colombia's submission, para. 39. Colombia refers specifically to Article 5 of Decree 2685/1999 and
Resolution 457 of 20 November 2008 ("Resolution 457/2008") ((DIAN) Dirección de Impuestos y Aduanas
Nacionales, Resolución 457 de 2008 (noviembre 20), Diario Oficial No. 47.198 de 20 de noviembre de 2008
(Arbitration Exhibit COL-1)).
34According to Colombia, such training is "essential for the effectiveness" of its customs control
system, which is based on self-declaration by importers and must be consistently applied by all customs
authorities at all ports of entry. (Colombia's submission, para. 40)
35Colombia's submission, para. 42 (referring to Appellate Body Report, US – Softwood Lumber IV
(Article 21.5 – Canada) , para. 77; and Appellate Body Report, US – Zeroing (EC) (Article 21.5 – EC) ,
para. 203).

Panel's findings. Moreover, in order to avoid any "omission"
36 in compliance, Colombia considers
that it needs to reform its customs control system so as to ensure that such guarantees are effectively
available to importers. Thus, Colombia submits that the development of such legal reforms must be
taken into account by the arbitrator in his determination, lest there would be "an unjustified disconnect
between the examination of [a] measure taken to comply in Article 21.5 DSU proceedings, and
measures taken to comply that are taken into cons ideration for the determination of the reasonable
period of time in Article 21.3(c) DSU proceedings."37
17. Colombia notes that customs securities are cu rrently governed by Colombia's Commercial
Code (Código de Comercio Colombiano) 38, and the process to amend such statute or to enact a new
law on customs securities will compri se the following stages: development of reasons for amending
the law; drafting of the actual reform proposal; transmission of the bill to the President's Legal
Office; review by the Legal Office of the President and other Ministries; amendments of the bill in
the light of comments received; renewed transmission of the revised bill to the relevant Ministries;
and review by the Customs, Tariff and International Trade Matters Committee (Comité de Asuntos
Aduaneros, Arancelarios y de Comercio Exterior) (the "Triple A Committee"). Thereafter, a
legislative process composed of four successive stages will be initiated before the Colombian
Parliament39, encompassing successive debates in the Chamber of Representatives and Chamber of
Senate, a debate in the special commissions of each Chamber, and a discussion in the full Chamber
for adoption. Colombia argues that an additional procedural stage may be needed if discrepancies
between the two Chambers of Parliament arise in or der to reconcile such differences. In Colombia's
estimation, the period of time required to reform Colombian law on customs securities would range
from 12 to 24 months.40
(b) Restriction on Ports of Entry
18. In respect of the ports of entry measure 41, Colombia proposes to devise a measure that does
not treat imports from Panama differently from thos e arriving directly from the country of origin, and
that does not constitute a prohibited restriction on imports, while ensuring the enforcement of its
customs laws in the most effective manner. Th is implementation would incorporate some "essential

36Colombia's submission, para. 43 (quoting Appellate Body Report, US – Zeroing (EC) (Article 21.5 –
EC), para. 205, in turn referring to Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada) ,
para. 67).
37Colombia's submission, para. 42.
38Decreto 410 de 1971, Diario Oficial No. 33.339 de 16 de junio de 1971.
39Colombia's submission, para. 44 (referring to Colombia's Law 5 of 1992 (El Congreso de Colombia,
Ley 5 de 1992 (junio 17), Diario Oficial No. 40.483 de 18 de junio de 1992)).
40Colombia's submission, para. 45.
41Resolution 7373/2007, as modified by Resolution 7637/2007.

aspects"42 of the existing measures, such as the advan ce import declaration, exemption for goods in
transit, and possibly some limitations on por ts of entry with generalized application. 43 C o l o m b i a
foresees the following steps in implementing such measure.
19. Initially, Colombia will evaluate the Panel's findi ngs of inconsistency in respect of different
aspects of the ports of entry measure and the Panel's rejection of Colombia's defence under
Article XX(d) of the GATT 1994. In the light of the Panel's finding that the ports of entry measure
did not sufficiently contribute to the achievement of its customs enforcement objective, Colombia will
examine what more effective alte rnative measures could be envisaged, and what better methods of
assessing their effectiveness in combating contraband could be developed. Colombia further proposes
to draw up an "inventory"
44 of the domestic norms affected by the Panel's findings, and to conduct a
comparative study of different methods of ensuring effective customs control in the light of the WTO
agreements and the relevant guidelines, decisions , and recommendations of the WCO. This will
include an examination of how other countries havi ng similar problems, apply customs control and
security-related limitations and impose conditions on ports of entry in a WTO-consistent manner. 45
Colombia estimates that this initial evaluation stage should take between four and six months.
20. Next, Colombia will define and develop, in cons ultation with the public and private sectors, a
mechanism to substitute the existing ports of entry measure. This will involve an "integrated study" 46
on security issues, in order to prepare additional por ts of entry to process goods with a high risk of
contraband, and a review of Colombia's transit re gime. Colombia emphasizes that such "concerted
action"47 will have to take into account the different stages of development and technical capacity of
Colombian customs authorities and the difficult so cio-economic and violence-related issues that
Colombia faces in certain regions. 48 Colombia estimates that the de velopment of a revised measure
could be completed within six months.
21. Finally, Colombia will implement the new measu re that replaces the ports of entry measure
into domestic law. According to Colombia, this process will involve the following steps: analysis of
the need to amend the norm in question and identifi cation of relevant provis ions in related legal
instruments affected thereby; drafting of the am endment; examination of its legal and technical
correctness; review of any requi red parallel changes; exchange of comments and suggestions; and

42Panama's submission, para. 47.
43Colombia's submission, para. 47.
44Colombia's submission, para. 50.
45Colombia's submission, para. 51.
46Colombia's submission, para. 52.
47Colombia's submission, para. 53.
48Colombia also suggests that, because most ports are under private concession, due regard must be
given to the contractual rights of port operators. (Colombia's submission, para. 53)

approval and inclusion of the corresponding adjustments.
49 Colombia emphasizes that the decision-
making process of the DIAN involves various departments responsible for technical, legal, and
policy-related aspects of the proposed amendment 50, other Ministries, and review by the Triple A
Committee.
22. In addition, Colombia warns against the "simplistic suggestion" 51 that there would be no need
for the Arbitrator to award the requested reasonabl e period of time based on the prior, very prompt,
removal of a ports of entry measure in 2006 fo llowing the conclusion of the Customs Cooperation
Protocol (Protocolo de Procedimiento de Cooperación e Intercambio de Información Aduanera entre
and Colombia. According to Colombia, the "broad and comprehensive" 52 customs cooperation
agreement reached with Panama at that time jus tified the "extra-ordinary, abbreviated procedure" 53
that allowed Colombia to remove the ports of en try measure in a shorter period of time than under
normal procedures.54 Colombia argues that the situation in th e present arbitration is distinct, insofar
as it is under no obligation "to simply remove the ports of entry measure". 55 Instead, Colombia
intends to design a "new and more permanent measure" 56 that will implement the DSB's
recommendations and rulings while se curing effective customs enforcement. Colombia adds that the
existing measure needs to stay in place until the new measure is designed.57
2. "Particular Circumstances"
23. Colombia recalls that Article 21.3(c) of the DSU establishes a guideline of 15 months for the
reasonable period of time for implementation, but th at "particular circumstances" may justify a longer
or shorter period. Referring to previous arbitra tions, Colombia considers that it would be up to
Panama to indicate the particular circumstances that would justify a departure from the 15-month

49Colombia's submission, para. 56.
50Colombia mentions the Subdirección de Gestión Técnica Aduanera , the Subdirección de Gestión de
Comercio Exterior, the Dirección de Gestión Jurídica, the Dirección de Gestión de Aduanas, and the Dirección
51Colombia's submission, para. 58.
52Colombia's submission, para. 59.
53Colombia's submission, para. 59. According to Co lombia, such abbreviated procedure consisted of
an executive decision by the President of Colombia to remove unilaterally the ports of entry measure, in use of
the particular powers assigned to him as highest author ity in international relations by Article 189 of the
Political Constitution of Colombia (Constitución Política de la República de Colombia de 1991).
54According to Colombia, the Customs Cooperation Prot ocol's failure to deliver the expected results
and Panama's refusal to comply with its obligations thereunder, resulted in the rapid reinstatement of essentially
the same measure. (Colombia's submission, paras. 60 and 61)
55Colombia's submission, para. 61.
56Colombia's submission, para. 61.
57Colombia's submission, para. 62.

guideline.58 Colombia acknowledges that previous arbi trators have found that the 15-month guideline
presents an "outer limit or maximum in a usual case" 59, and that it is not a rule from which arbitrators
may deviate only in "exceptional" 60 circumstances. However, Colo mbia considers that the 15-month
period should be viewed as a "benchmark" or "a framework within which" the calculation of the
reasonable period of time is performed. 61 Colombia also suggests that the structure of Article 21, and
the notions of flexibility and balance inherent in the term "reasonable", suggest that, where immediate
compliance is not practicable, compliance within a "reasonable" period of time is also "prompt".62
24. Colombia argues that the following four "p articular circumstances" warrant a reasonable
period of time equal to at least the 15-month guideline provided in Article 21.3(c) of the DSU.
(a) Need for Legislative and Regulatory Action
25. Colombia submits that the implementation of th e Panel's "as such" findings will require it to
amend its laws and regulati ons and to issue new rules of general application. Referring to previous
arbitrations, Colombia argues that its implemen ting measures involve "legislative and regulatory
decision-making", which entails "setting new rules" , and therefore are more time-consuming than
"administrative decision-making", which simp ly involves applying existing regulations. 63 Colombia
emphasizes that WTO Members cannot be expected to have recourse to "'extraordinary'
proceedings"64, and may follow "standard practice"65, to amend laws and regulations even when this is

58Colombia's submission, para. 69 (quoting Award of the Arbitrator, EC – Bananas III
(Article 21.3(c)), para. 19; and Award of the Arbitrator, EC – Hormones (Article 21.3(c)), para. 27).
59Colombia's submission, para. 70 (referring to Award of the Arbitrator, EC – Hormones
(Article 21.3(c)), para. 25).
60Colombia's submission, para. 71.
61Colombia's submission, paras. 71 and 72 (referring to Appellate Body Report, US – Softwood Lumber
IV, para. 92, where the Appellate Body interpreted the term "guideline" in Article 14 of the Agreement on
Subsidies and Countervailing Measures as a "framework within which [the calculation of a benefit] is to be
performed").
62Colombia's submission, para. 73.
63Colombia's submission, para. 79 (referring to Award of the Arbitrator, US – Gambling
(Article 21.3(c)), para. 35).
64Colombia's submission, para. 81 (quoting Award of the Arbitrator, Brazil – Retreaded Tyres
(Article 21.3(c)), para. 73, in turn referring to Award of the Arbitrator, Japan – DRAMs (Korea) (Article
21.3(c)), para. 25; Award of the Arbitrator, EC – Chicken Cuts (Article 21.3(c)) , para. 49; Award of the
Arbitrator, Korea – Alcoholic Beverages (Article 21.3(c)) , para. 42; Award of the Arbitrator, Chile – Price
Band System (Article 21.3(c)) , para. 51; and Award of the Arbitrator, US – Offset Act (Byrd Amendment)
(Article 21.3(c)), para. 74).
65Colombia's submission, para. 80 (quoting Award of the Arbitrator, Japan – DRAMs (Korea)
(Article 21.3(c)), para. 49; and Award of the Arbitrator, EC – Chicken Cuts (Article 21.3(c)), para. 79).

not required by law. Colombia adds that previ ous arbitrators have recognized the importance of a
"pre-legislative phase of internal inter-agency consultation"
66, which can also be time-consuming.
26. According to Colombia, the legal pr ocess of amending Decree 2685/1999 and its
implementing regulation (Resolution 4240/2000) will consist of the fo llowing four steps: (i) an
internal DIAN process, in which various DIAN departments 67 analyze the need to amend the relevant
norms and related legal instru ments (six to nine months); 68 (ii) evaluation of the new administrative
procedures of customs control and relea se of guarantees by various departments 69 of the Department
of Public Administration ( Departamento Administrativo de Función Publica ), pursuant to
Decree 4669 of 21 December 2005 ("Decree 4669/2005") 70 and paragraph 2 of Article 1 of Law 962
of 200571 (one to two months) 72; (iii) review of the implementing measure by the Ministry of Trade,
Industry and Tourism (Ministerio de Comercio, Industria y Turismo) , the Ministry of Finance
(Ministerio de Hacienda y Crédito Público), and the Triple A Committee (two to four months) 73; and
(iv) review and approval of the implementing me asure by the President's Office and by the Legal
Office, publication in the Official Gazette (Diario Oficial) , and amendment of any Resolutions
impacted by the implementing measure (up to three months).74
(b) Complexity of the Measure
27. Colombia argues that the complexity of ame nding measures related to customs control and
customs enforcement is another "particular circumstance" that justifies a period of implementation of
at least 15 months. Colombia points out that previous arbitrators considered that the "complex nature

66Colombia's submission, para. 82 (referring to Award of the Arbitrator, US – Hot-Rolled Steel
(Article 21.3(c)), para. 38; and Award of the Arbitrator, Chile – Alcoholic Beverag es (Article 21.3(c)) ,
para. 43).
67Required by Article 2 of Resolution 457/2008. (Colombia's submission, para. 87) For the DIAN
departments involved, see supra, footnote 50.
68Colombia's submission, paras. 86 and 87. See also supra, para. 20.
69Colombia argues that Articles 3-8 of Decree 4669/2005 require review of the proposed new
procedures by the Grupo de Racionalización y Autorización de Tramites and the Comités Sectoriales and
Comités Intersectoriales of the Department of Public Administration. (Colombia's submission, para. 88)
70Cámara de Representantes de Colombia, Decreto 4669 de 2005 (diciembre 21), Diario Oficial No.
46.130 de 22 de diciembre de 2005.
71El Congreso de Colombia, Ley 962 de 2005 (julio 8), Diario Oficial No. 46.023 de 6 de septiembre
de 2005.
72Colombia's submission, para. 88.
73Colombia's submission, paras. 89 and 90. According to Colombia, the role and responsibilities of the
Triple A Committee are set out in Decree 403 of 3 March 1993, Decree 2553 of 23 December 1999, Decree 210
of 3 February 2003, and Decree 3303 of 25 September 2006. (Colombia's submission, footnote 56 to para. 90
(referring to Arbitration Exhibit COL-5))
74Colombia's submission, paras. 91 and 92. According to paragraph 25 of Article 189 of the
Constitution of Colombia, it is the responsibility of the President to amend laws and regulations affecting the
customs regime and to regulate external trade.

of implementing measures" 75 is a relevant factor in determin ing the reasonable period of time under
Article 21.3(c) of the DSU.
28. Colombia notes that the field of "anti-smugg ling" is heavily regulated by a series of
"interdependent and overlapping" re gulations affecting many sectors of activity, and when this is the
case, "adequate time will be required to draft the changes, consult affected parties, and make any
consequent modifications as needed". 76 Colombia adds that the amendment of both the indicative
prices mechanism and the ports of entry measure will call for an examination of the consequences of
those amendments on the "entire anti-smuggling legal framework".77 One previous arbitrator attached
"some significance" to an "examination of how proposed legislation will impact the existing
regulatory regime" for the process of adopting implementing legislation. 78 Colombia also sees
analogies with another arbitrator's statement that the "technical complexities" 79 of implementing a
regime for the allocation of anti-dumping duties is relevant as a "particular circumstance" for
determining the reasonable period of time.
29. Colombia rejects Panama's argument that th e implementing measure is not particularly
complex, because compliance can be achieved by a simple change of wording or the repeal of a
particular provision. Colombia recalls that it is not the arbitrator's task to pass judgment on the means
of implementation it has chosen and on whether a different method of implementation could have
achieved compliance in a shorter period. 80 Colombia contends further that its implementing
legislation may either increase the number of ports through which Panama's imports may enter, or
suppress the advance import declaration, while at the same time securing effective customs control
and enforcement. One arbitrator observed that the need to safeguard public morals and public order
"increase[d] the complexity of any legislative solution"81 that authorized internet gambling. Colombia

75Colombia's submission, para. 94 (quoting Award of the Arbitrator, EC – Export Subsidies on Sugar
(Article 21.3(c)) , para. 88, in turn referring to Award of the Arbitrator, Canada – Pharmaceutical Patents
(Article 21.3(c)), para. 50; and Award of the Arbitrator, US – Offset Act (Byrd Amendment) (Article 21.3(c)) ,
para. 60).
76Colombia's submission, para. 95 (quoting Award of the Arbitrator, Canada – Pharmaceutical Patents
(Article 21.3(c)), para. 50).
77Colombia's submission, para. 96.
78Colombia's submission, para. 96 (quoting Award of the Arbitrator, US – Gambling (Article 21.3(c)) ,
para. 46).
79Colombia's submission, para. 97 (quoting Award of the Arbitrator, US – Stainless Steel (Mexico)
(Article 21.3(c)), para. 61).
80Colombia's submission, para. 98.
81Colombia's submission, para. 99 (quoting Award of the Arbitrator, US – Gambling (Article 21.3(c)) ,
para. 47).

suggests that, similarly, in the circumstances of th is case, "[t]he more ports through which access is
allowed, the more safeguard legislation may need to be enacted to ensure that the anti-smuggling
objective is not nullified."
82
(c) Importance of the Measures in the Domestic System
30. Colombia argues further that the importance of the measures in the particular situation of
Colombia also justifies a period of time for implementation of at least 15 months. Colombia recalls
that the arbitrator in Chile – Price Band System considered that the "unique role and impact"
83 of the
price band system on Chilean society was a relevant factor in determining the reasonable period of
time.
31. According to Colombia, the Panel acknowledge d the existence of a serious problem of
contraband from Panama linked to money-laundering and drug trafficking, and recognized that under-
invoicing and smuggling was "a relatively more im portant reality for Colombia than for many other
countries".84 Colombia argues that the indicative prices a nd ports of entry measures were part of the
"set of regulatory measures"85 adopted to combat these problems that undermine the economic, social,
and political stability of Colombia. For Colombia, the importance of ensuring that new measures
address the complex economic, social, and political i ssues facing Colombia, and that such measures
"are integrated with minimal disruption to th e efficacy of the existing anti-smuggling regime" 86,
justifies the assessment of a longer period of time for implementation.
(d) Developing Country Status
32. Finally, Colombia argues that Article 21.2 of the DSU requires that Colombia's developing
country status be taken into account in the de termination of the reasonable period of time for
implementation. Referring to previous arbitrations , Colombia submits that Article 21.2 enjoins the
arbitrator to be "generally mindful" 87 of the difficulties that a developing country may face in
implementing the recommendations and rulings of th e DSB, such as "severe economic and financial

82Colombia's submission, para. 101.
83Colombia's submission, para. 103 (quoting Award of the Arbitrator, Chile – Price Band System
(Article 21.3(c)), para. 48).
85Colombia's submission, para. 104.
86Colombia's submission, para. 106.
87Colombia's submission, para. 108 (quoting Award of the Arbitrator, Argentina – Hides and Leather
(Article 21.3 (c)) , para. 51, in turn quoting Award of the Arbitrator, Chile – Alcoholic Beverages (Article
21.3(c), para. 45).

problems".88 Colombia also recalls that, in the "unusual circumstances" of Chile – Price Band
System, the arbitrator was not swayed towards e ither a longer or shorter period of time 89, because the
implementing Member had failed to indicate any "specific obstacles" that it was facing as a
developing country, and the complaining Member (that was also a developing country) was
experiencing "daunting financial woes" at that time. 90 In contrast, in the present case, Colombia
submits that it is a developing country "affected by the global economic crisis, in a continuing fight
against contraband-related money-laundering and drug trafficking", and that there is no evidence that
Panama is currently experiencing "daunting financial woes".91
33. In the light of the foregoing, Colombia requests that I determine the "reasonable period of
time" for implementation of the recommendations a nd rulings of the DSB in this dispute to be
15 months from the date of adoption by the DSB of the Panel Report, to expire on 20 August 2010.92
B. Panama
34. Panama requests that I determine the "reasonabl e period of time" for implementation of the
recommendations and rulings of the DSB in this disp ute to be four months and 19 days from the date
of adoption by the DSB of the Panel Report, that is, until 9 October 2009.
35. Panama argues that a joint reading of Articles 21.1 and 21.3 of the DSU suggests that
"prompt" compliance is equated with "immediate" comp liance. However, if it is "impracticable" to
comply immediately, Article 21.3(c) provides the implementing Member with a reasonable period of
time in which to do so. Panama submits that Colombia, as the implementing Member, bears the
burden of proving that the period of time it is requesting for implementation is "reasonable". 93
Panama considers that Colombia has failed to discharge this burden.
36. In determining the reasonable period of time for implementation, Panama submits that the
arbitrator should take into account the following "general principles" 94 elaborated by previous
arbitrators in determining the reasonable period fo r implementation in this case: the implementing

88Colombia's submission, para. 108 (referring to Award of the Arbitrator, Argentina – Hides and
Leather (Article 21.3(c)), para. 51; in turn quoting Award of the Arbitrator, Indonesia – Autos (Article 21.3(c)),
para. 24).
89Colombia's submission, para. 111 (referring to Award of the Arbitrator, Chile – Price Band System
(Article 21.3(c)), para. 56).
90Colombia's submission, paras. 111 and 112 (quoting Award of the Arbitrator, Chile – Price Band
System (Article 21.3(c)), para. 56).
91Colombia's submission, para. 113.
92Colombia's submission, para. 115.
93Panama's submission, para. 26 (referring to Award of the Arbitrator, Canada – Pharmaceutical
Patents (Article 21.3(c)), para. 47; Award of the Arbitrator, US – 1916 Act (Article 21.3(c)) , para. 32; and
Award of the Arbitrator, US – Offset Act (Byrd Amendment) (Article 21.3(c)), para. 44).
94Panama's submission, para. 28.

Member must commence implementation as from the date of adoption of the DSB recommendations
and rulings
95; the implementing Member has discretion in choosing the means of implementation 96,
but that discretion is not an "unfettered" right to choose any method of implementation; the mandate
of the arbitrator is limited to determining when compliance can be achieved, but such determination is
closely related to the question of how the Member intends to implement97; the implementing Member
must establish that the proposed period is the "sho rtest period possible" within its domestic legal
system to implement the recommendations and rulings of the DSB 98; although recourse to
"extraordinary" means of compliance is not required 99, the implementing Member is expected to use
all flexibility available within its domestic le gal system to implement the recommendations and
rulings of the DSB 100; the implementing Member must not in clude in its method of implementation
objectives that are extraneous to the speci fic recommendations and rulings of the DSB 101, such as the
larger objective of an overall reform of the affected domestic system 102 if such inclusion would
prolong the implementation period; and the impl ementing Member must not use the implementation
period to conduct studies or to consult experts to demonstrate the consistency of a measure already
found to be WTO-inconsistent.103
37. For Panama, the fact that Colombia may need to address the underlying problems of
combating customs fraud and contraband, money-launde ring, and drug trafficking, is not relevant to
determining the reasonable period of time. Panama emphasizes that the removal or modification of a
measure in the process of implementation is distinct from the removal of the "underlying economic or
social or other conditions" 104 that justified the adoption of that measure. Thus, "non-legal

95Panama's submission, para. 30 (referring to Award of the Arbitrator, EC – Chicken Cuts
(Article 21.3(c)), para. 66).
96Panama's submission, para. 30 (referring to Award of the Arbitrator, US – Stainless Steel (Mexico)
(Article 21.3(c)), para. 41; and Award of the Arbitrator, Brazil – Retreaded Tyres (Article 21.3(c)), para. 48, in
turn quoting Award of the Arbitrator, EC – Hormones (Article 21.3(c)), para. 38).
97Panama's submission, para. 30 (referring to Award of the Arbitrator, Brazil – Retreaded Tyres
(Article 21.3(c)), para. 47).
98Panama's submission, para. 30 (referring to Award of the Arbitrator, US – Stainless Steel (Mexico)
(Article 21.3(c)), para. 43; and Award of the Arbitrator, Brazil – Retreaded Tyres (Article 21.3(c)), para. 51, in
turn referring to Award of the Arbitrator, US – Offset Act (Byrd Amendment) (Article 21.3(c)), para. 44).
99Panama's submission, para. 30 (referring to Award of the Arbitrator, US – Stainless Steel (Mexico)
(Article 21.3(c)), para. 42; and Award of the Arbitrator, Brazil – Retreaded Tyres (Article 21.3(c)), para. 48, in
turn referring to Award of the Arbitrator, Japan – DRAMs (Korea) (Article 21.3(c)), para. 25).
100Panama's submission, para. 30 (referring to Award of the Arbitrator, US – Stainless Steel (Mexico)
(Article 21.3(c)), para. 42; and Award of the Arbitrator, Brazil – Retreaded Tyres (Article 21.3(c)), para. 48, in
turn referring to Award of the Arbitrator, Japan – DRAMs (Korea) (Article 21.3(c)), para. 25).
101Panama's submission, para. 30 (referring to Award of the Arbitrator, EC – Export Subsidies on Sugar
(Article 21.3(c)), para. 69).
102Panama's submission, para. 30 (referring to Award of the Arbitrator, EC – Tariff Preferences
(Article 21.3(c)), para. 48).
103Panama's submission, para 30 (referring to Award of the Arbitrator, Australia – Salmon
(Article 21.3(c)), para. 35, in turn quoting Award of the Arbitrator, EC – Hormones (Article 21.3(c)), para. 39).
104Panama's submission, para. 6 (referring to Award of the Arbitrator, Argentina – Hides and Leather
(Article 21.3(c)), para. 41).

considerations"105 should not be taken into consideration in determining the period of time for
implementation. If the implementing Member fail s to establish that the proposed period is the
shortest period possible for implementation within its domestic legal system, then the arbitrator has to
determine the shortest period possible on the basis of the evidence presented by the parties.106
1. Proposed Means of Implementation regard ing Indicative Prices and Ports of
Entry Restrictions
38. Panama criticizes Colombia for failing to provide the Arbitrator with adequate information on
the "proper scope" and "specific cont ent" of its implementing measure. 107 According to Panama,
Colombia is still merely reflecting upon how it might implement the recommendations and rulings of
the DSB.108 Panama recalls that it is incumbent upon the implementing Member to indicate the means
of implementation, because "the more information that is known about the details of the implementing
measure, the greater guidance to an arbitrat or in selecting a reasonable period of time." 109 In
indicating that it is still "studying its options", Colo mbia has failed to provide information even on the
"general thrust" of its implementing measures, thereby rendering the Arbitrator's task more
difficult.110
39. In addition, Panama submits that Colombia has not provided precise information as to the
length of time it requires for implementation. Ev en though Colombia initially requests a reasonable
period of time of 15 months 111, it subsequently refers to a reasonable period of time of " at least" 15
months.112 However, Panama suggests that the total num ber of months outlined by Colombia for the
implementation of the Panel's findings on the indica tive prices and ports of entry measures greatly
exceeds 15 months: between 27 and 42 months for indicative prices 113, and between 22 and 30
months for the ports of entry measure. 114 Panama adds that Colombia is not sufficiently clear on the

105Panama's submission, para. 7.
106Panama's submission, para. 32 (referring to Award of the Arbitrator, US – Stainless Steel (Mexico)
(Article 21.3(c)), para. 43; Award of the Arbitrator, Brazil – Retreaded Tyres (Article 21.3(c)) , para. 51 in turn
referring to Award of the Arbitrator, US – Offset Act (Byrd Amendment) (Article 21.3(c)), para. 44).
107Panama's submission, para. 35.
108Panama's submission, para. 35.
109Panama's submission, para. 36 (quoting Award of the Arbitrator, Chile –Price Band System
(Article 21.3(c)), para. 37).
110Panama's submission, para. 36.
112Panama's submission, para. 37 (referring to Colombia's submission, para. 65). (original emphasis)
113Panama's submission, para. 37 (referring to Colombia's submission, paras. 30-45).
114Panama's submission, para. 37 (referring to Colombia's submission, paras. 46-56 and 83-92).

steps and timeframe required to implement the Panel's finding on indicative prices, and provides
conflicting estimates of the timeframe required to implement the Panel's finding in respect of the ports
of entry restrictions.
115
40. Moreover, Panama argues that Colombia has fa iled to take any concrete steps towards
implementation since the adoption of the Panel Report by the DSB. Panama notes that the
implementing Member must commence implemen tation as from the date of adoption of the
recommendations and rulings of the DSB 116, and that, if the arbitrator perceives that it has not done
so, this should be taken into account in determining the reasonable period of time.117 If Colombia has
only undertaken preliminary internal discussions with respect to implementation, Panama argues that
"mere discussion is not implementation" and "[t]here must be something more to evidence that a
Member is moving toward implementation". 118 Thus, Panama submits that any delay caused by
Colombia's inaction to date cannot justify a longe r period for implementation. Panama emphasizes
further that, after the adoption of the recommendati ons and rulings of the DSB, Colombia adopted
Resolution 6816/2009 119, which extended the ports of en try measure until 31 December 2009. 120
According to Panama, absent such extension, the ports of entry measure would have lapsed, and
Colombia would have brought itself into conform ity. Thus, instead of undertaking steps towards
implementation since the time of adoption of the Pa nel Report by the DSB, Colombia has "decided to
maintain the WTO-inconsistent measure"121 and to postpone the implementation process.
41. Panama notes further that Article 3.7 of the DSU provides that "the first objective of the
dispute settlement mechanism is usually to secure th e withdrawal of the measures concerned". Thus,
according to Panama, withdrawal of the inconsis tent measures should be the preferred means of
implementation. Although Panama acknowledges that the implementing Member has "discretion in
selecting the means of implementation that it deems most appropriate" 122, it does not have
"an unfettered right to choose any method of implementation". 123 Therefore, the Arbitrator must

115Panama's submission, para. 38 (referring to Colombia's submission, paras. 37, 91, and 92).
116Panama's submission, para. 39 (referring to Award of the Arbitrator, EC – Chicken Cuts
(Article 21.3(c)), para. 66).
117Panama's submission, para. 41 (quoting Award of the Arbitrator, US – Section 110(5) of the
118Panama's submission, para. 42 (quoting Award of the Arbitrator, EC – Chicken Cuts
(Article 21.3(c)), para. 66).
119Panama's submission, para. 43 (referring to Arbitration Exhibit PAN-6).
120Panama's submission, para. 43.
121Panama's submission, para. 44.
122Panama's submission, para. 46 (quoting Award of the Arbitrator, Japan – DRAMs (Korea)
(Article 21.3(c)), para. 25).
123Panama's submission, para. 46 (quoting Award of the Arbitrator, Brazil – Retreaded Tyres
(Article 21.3(c)), para. 48, in turn quoting Award of the Arbitrator, EC – Export Subsidies on Sugar
(Article 21.3(c)), para. 69).

consider whether "the implementing action falls with in the range of permissible actions that can be
taken in order to implement the DSB's recommendations and rulings." 124 According to Panama, any
action other than the withdrawal of the indicative prices and ports of entry measures would fall
outside the permissible range of actions for implem entation. This is because any action to replace the
"payment" under the indicative prices measure with a compulsory "guarantee" system would fall foul
of Article 13 of the Agreement on Customs Valuation .
125 Similarly, any measure that maintains
restrictions on the ports available for entry of goods from Panama would be in consistent with Article
XI of the GATT 1994. 126 Moreover, the implementing Member is expected to use all the flexibility
available in its domestic legal system to implem ent, without having recourse to "extra-ordinary"
means.127 According to Panama, Colombia can withdraw the measures through ordinary
administrative means.
42. Furthermore, Panama considers that Colombia does not have to undertake a comprehensive
reform of its customs control and enforcement re gime in order to implement the recommendations
and rulings of the DSB. Panama contests Colombia 's argument that the Panel's findings on the use of
indicative prices "impact a large number of provisi ons in the Customs Statute and in Resolution 4240
dealing with the importation process, customs control, release subject to guarantees and customs
valuation."128 For Panama, the Panel's findings were specific to Article 128.5 e) of Decree 2685/1999,
Article 172.7 of Resolution 4240/2000, and the various Resolutions that establish indicative prices on
goods from Panama, which were found to be inconsistent with Articles 1, 2, 3, 5, 6, 7.2(b), and 7.2(f)
of the Agreement on Customs Valuation . Thus, Colombia's obligations to implement extend only to
those measures. Panama also disputes Colombia's allegation that implementation of the
recommendations and rulings of the DSB will requi re amendment of the guarantee provisions of
Colombia's Commercial Code. In Panama's view, it is not clear how such amendment would ensure
that guarantees would effectively be made available by bank and insurance companies.
129 According
to Panama, the Panel declined to rule on whethe r the payment provided for in Article 128.5 e) of
Decree 2685/1999 constituted a guarantee within the meaning of Article 13 of the Agreement on
Customs Valuation .130 Furthermore, if Colombia wished to amend its guarantee provisions for
customs purposes, it is not clear why this could not be done by amending its customs regulations.

124Panama's submission, para. 46 (quoting Award of the Arbitrator, Brazil – Retreaded Tyres
(Article 21.3(c)), para. 48, in turn quoting Award of the Arbitrator, Japan – DRAMs (Korea) (Article 21.3(c)) ,
para. 27).
125Panama's submission, para. 46.
126Panama's submission, para. 46.
127Panama's submission, para. 47 (referring to Award of the Arbitrator, Brazil – Retreaded Tyres
(Article 21.3(c)), para. 48).

43. Panama also dismisses Colombia's argument that the Panel's findings may have affected "the
basic legal premise"
131 of the ports of entry measure, namely, Article 41 of Decree 2685/1999, as
further regulated by Article 39 of Resolution 4240/2000, which authorizes limiting the number of
ports of entry, if necessary, for purposes of customs control and enforcement. Panama notes that
Article 41 of Decree 2685/1999 was not within the Panel's terms of reference, and therefore Colombia
does not have to amend this provision in order to br ing itself into conformity. Panama argues that the
relevant consideration is whether the implem enting measure is required by the relevant
recommendations and rulings of the DSB.
132 Thus, although Colombia retains the discretion to work
"on the larger task" 133 of revising its customs control regime, fo r Panama, that task is not a relevant
consideration for the Arbitrator's determination of the reasonable period of time for implementation of
the specific recommendations and rulings of the DSB.
44. Panama further stresses that previous arbitrator s have declined to take into consideration
"non-legal factors" 134 that were not specifically required by domestic law for the withdrawal or
modification of the measures at issu e. Therefore, in Panama's view , the following "non-legal factors"
are not relevant for the Arbitrator's determination of the reasonable period of time: consultations with
the public and private sectors on the application of Colombia's new customs control system 135;
changes to Colombia's computeri zed system of customs control 136; and training of users and DIAN
officials in the new mechanism.137
2. "Particular Circumstances"
45. Panama also recalls that Article 21.3(c) provides a guideline that the reasonable period of
time should not exceed 15 months, but arbitrators may depart from such guideline depending on the
"particular circumstances" of the case. According to Panama, previous arbitrators have considered the
following particular circumstances in determining the reasonable period of time for implementation:
whether the means of implementation are administrative or legislative 138; whether the proposed

132Panama's submission, para. 53 (quoting Award of the Arbitrator, EC – Tariff Preferences
(Article 21.3(c)), para. 31).
133Panama's submission, para. 54 (referring to Award of the Arbitrator, Argentina – Hides and Leather
(Article 21.3(c)), para. 47).
134Panama's submission, paras. 56 (referring to Award of the Arbitrator, US – Offset Act (Byrd
Amendment) (Article 21.3(c)) , para. 61; and Award of the Arbitrator, EC – Export Subsidies on Sugar
(Article 21.3(c)), para. 69).
135Panama's submission, para. 55 (referring to Colombia's submission, para. 36). Panama also argues
that Article 209 of the Constitution of Colombia provides for only general principles of transparency and does
not require specific consultations with the private sector. (Ibid., para. 56)
138Panama's submission, para. 31 (referring to Award of the Arbitrator, EC – Hormones
(Article 21.3(c)), para. 25).

means of implementation are complex or simple; whether there are legally binding, as opposed to
discretionary, component steps for implementation 139; and whether the Member has enacted similar
implementing legislation in the past.140
(a) Need for Legislative and Regulatory Action
46. Panama disagrees with Colombia that implemen tation of the recommendations and rulings of
the DSB requires both legislative and regulat ory action. Panama emphasizes that both
Decree 2685/1999 and Resolution 4240/2000 are admini strative acts issued by the Executive Branch
of the Colombian Government, and therefore no legisl ative action is required to modify or withdraw
provisions of these legal instruments. 141 In addition, because Colombia is not required to amend the
guarantee provisions of its Commercial Code in or der to implement the recommendations and rulings
of the DSB, delays associated with legislative procedures are not relevant for the Arbitrator's
determination.
47. Panama recalls that only the specific measures foun d to be inconsistent by the Panel need to
be brought into conformity. 142 Panama submits that the period of time suggested by Colombia to
withdraw or modify such instruments does not co nstitute the "shortest possible period" within its
domestic legal system 143, because it is not clear whether all the steps outlined by Colombia are
required.
48. In particular, Panama contests Colombia's argume nt that an amendment to specific articles of
Decree 2685/1999 will require an internal DIAN decision-making process 144, pursuant to Article 2 of
Resolution 457 of 20 November 2008 ("Resolution 457/2008").145 Panama adds that Article 2 sets out
procedures for the introduction of a new requirement 146, whereas the modification or withdrawal of
the indicative prices and ports of entry measures will not entail such new requirement. Panama also
questions Colombia's estimation that the internal DIAN decision-making process will take six to nine

139Panama's submission, para. 31 (referring to Award of the Arbitrator, EC – Hormones
(Article 21.3(c)), paras. 49-52).
140Panama's submission, para. 31 (referring to Award of the Arbitrator, US – Gambling
(Article 21.3(c)), para. 55).
141Panama's submission, para. 58.
142Panama lists Article 128.5 e) of Decree 2685/1999; Article 172.7 of Resolution 4240/2000; various
specific Resolutions establishing indicative prices fo r certain products; and Resolution 7373/2007, which
provides the legal bases for the ports of entry measure. (Panama's submission, para. 64)
143Panama's submission, para. 72.
144Panama's submission, para. 65 (referring to Colombia's submission, para. 86). According to Panama,
that provision is applicable only to administrative acts, documents, and forms of the DIAN, and therefore does
not apply to amendments to Decree 2685/1999, which is, rather, a Decree issued by the President of Colombia.
145Dirección de Impuestos y Ad uanas Nacionales, Resolución 457 de 2008 (noviembre 20), Diario
Oficial No. 47.198 de 20 de noviembre de 2008 (Arbitration Exhibit COL-1).
146Panama's submission, para. 66 (referring to Article 2 of Resolution 457/2008).

months, because neither Resolution 457/2008 nor Administrative Order No. 0002 of 8 May 2009
147
indicate any specific timeframes other than a period of 13 working days for the "formalisation of the
procedure".148 Panama suggests further that any amendments to the regulations at issue need not be
subject to review by the Department of Public Administration, pursuant to Decree 4669/2005, because
Article 2 of Resolution 457/2008 does not appear to require such an evaluation procedure. In any
event, Panama notes that Decree 4669/2005 does no t provide for any specific timeframe, despite
Colombia's estimation that its revi ew will take one to two months.
149 In addition, Panama is of the
view that Colombia has failed to provide any ev idence in support of its assertions that: (i) the
Ministry of Trade, Industry and Tourism (Ministerio de Comercio, Industria y Turismo) and the
Ministry of Finance (Ministerio de Hacienda y Crédito Público) are required to review and approve
the implementing measure 150; (ii) the President's Office will ha ve to approve the draft new measure
before review by the Legal Office of the President, signature by the President, and publication in the
Diario Oficial151; and (iii) modification of the relevant Resolutions should take up to three months.152
49. Panama posits further that Colombia can withdraw or modify Article 128.5 e) of
Decree 2685/1999 relating to indicative prices through ordinary administrative means, because the
President of Colombia has the authority to amend Decree 2685/1999 after having heard the views of
the Triple A Committee. 153 Although Colombian law provides no specific timeframes for the
amendment of that Decree, according to Article 3 of Decree 3303/2006, the Triple A Committee shall
meet in ordinary session every three months, or ex traordinarily at any time at the behest of its
President (the Vice-Minister of Trade).154
50. Similarly, Panama points out that Artic le 28.6 of Decree 4048/2008 provides the Deputy
Directorate of Technical Customs Management of Colombia's Customs Administration with the
authority to establish, modify, and withdraw reference prices, including indicative prices. 155
Likewise, Panama suggests that Article 6.12 of Decree 4048/2008 provides the Directorate General of

147(DIAN) Direccion de Gestion Organizacional – Orden Administrativa 0002, dated 8 May 2009.
para. 4.4.6 of (DIAN) Direccion de Gestion Organizacional – Orden Administrativa 0002, dated 8 May 2009).
150Panama's submission, para. 69 (referring to Colombia's submission, para. 89; Decree 210/2003; and
Decree 4646/2006).
151Panama's submission, para. 70 (referring to Colombia's submission, paras. 91 and 92).
153In particular, Panama notes that the President has such authority under Article 189.25 of Colombia's
Constitution, Article 3 of Law 6 of 1971, and Article 2 of Law 7 of 1991. (Panama's submission, para. 73)
154Panama's submission, para. 74.
155Panama notes that Article 28.6 of Decree 4048/ 2008 replaced Article 23 of Decree 1071/1999 as
establishing such authority. (Panama's submission, para. 78)

the DIAN "full discretion" to withdraw or modify both Resolution 7373/2007 and
Resolution 4240/2000.156 None of these provisions provides for specific timeframes, or requires
participation of other governmental agencies in the decision-making process.
51. Furthermore, Panama contends th at Colombia's previous repeal of similar indicative prices
and ports of entry measures as a result of a mutually agreed solution with Panama illustrates that the
measures at issue in this dispute can be withdrawn or modified almost immediately. Panama observes
that, when it reached a mutually agreed solu tion with Colombia on 31 October 2006, Colombia
withdrew the indicative prices and ports of entr y measures on 1 November 2006. Panama contends
that Colombia is now in a legal position to take similar administrative action, without recourse to
extraordinary procedures. Panama rejects Colo mbia's argument that the current situation is
"fundamentally different", because, in its view, th e legal authority under Colombian law to withdraw
or modify the measures at issue is the same. 157 Panama observes further that, contrary to Colombia's
suggestion, the repeal of the ports of entry meas ure in 2006 was not the result of "extra-ordinary,
abbreviated procedures" involving the President's authority under Article 189 of the Constitution of
Colombia, but was rather issued by the Director-G eneral of the DIAN, in exercise of his ordinary
functions.158
(b) Complexity of the Measure
52. Panama disagrees with Colombia that the alleged complexity of the measures relating to
Colombia's customs control and customs enforcem ent constitutes a "particular circumstance" that
justifies a period of implementation of at least 15 months. 159 Panama considers that the measures
"in and of themselves"160 are not complex, and that the process for amending them is not complex. In
Panama's view, what may be "complex" is the "contentiousness" of these measures in Colombia. 161
However, several arbitrators have dismissed the "contentiousness" of a measure as a "particular
circumstance" in their determination of the reasonable period of time.162

156Panama notes that Article 6.12 of Decree 4048/2 008 replaced Article 19(i) of Decree 1071/1999 as
establishing such authority. (Panama's submission, paras. 81-83)
158Panama's submission, para. 88. According to Panama, the DIAN's Director-General had authority
pursuant to Decrees 1071/1999 and 2685/1999.
160Panama's submission, para. 92. Panama notes that Article 128.5 e) of Decree 2685/1999 and
Article 172.7 of Resolution 4240/2000 each consist of only one paragraph, and Resolution 7373/2007 comprises
only two pages.
161Panama's submission, para. 92.
162Panama's submission, para. 92 (referring to Award of the Arbitrator, US – Offset Act (Byrd
Amendment) (Article 21.3(c)) , para. 61; and Award of the Arbitrator, Chile – Price Band System
(Article 21.3(c)), para. 47).

(c) Importance of the Measure in the Domestic System
53. Panama also dismisses the importance of the indicative prices and ports of entry measures in
Colombia's domestic system as a "particular circumstance" justifying a reasonable period of time of at
least 15 months. Panama distinguishes the facts before the arbitrator in Chile – Price Band System
from the facts of this dispute. In that dispute, the fact that Chile's price band system had been a
"cornerstone of its agricultural policy for almost 20 years" led the arbitrator to find that it was so
"fundamentally integrated"
163 into the policies of Chile that its "unique role and impact" on Chilean
society was taken into account as a relevant circumst ance. In contrast, Colombia's indicative prices
and ports of entry measures have been adopted in the course of the last five years.164 Thus, in the light
of the "recent vintage" of those measures, Panama submits that Colombia has not demonstrated their
"unique role and impact" on Colombian society.165
(d) Developing Country Status
54. Finally, Panama submits that the Arbitrator s hould not take into account Colombia's status as
a developing country in determining the length of time allowed for implementation. 166 Panama also
emphasizes that, although the arbitrator in Chile – Price Band System recognized that Chile may have
faced obstacles as a developing country in its implementation of the recommendations and rulings of
the DSB, Argentina similarly faced "hardship" as long as the WTO-inconsistent measure was
maintained, and therefore decided not to take Chile 's developing country status into consideration.
167
Thus, Panama suggests that Colombia has not demonstrat ed that it is in a "dire economic or financial"
situation that would justify an exte nded period of time for implementation. 168 Rather, it is Panama's
own status as a developing country being adversel y affected by WTO-inconsistent measures for the
last five years that should be taken into account.
55. In the light of the foregoing, Panama requests that I determine the reasonable period of time
for implementation of the recommendations and rulings of the DSB in this dispute to be 4 months and
19 days from the adoption by the DSB of the Panel Report, to expire on 9 October 2009.

163Panama's submission, para. 92 (referring to Award of the Arbitrator, Chile – Price Band System
(Article 21.3(c)), paras. 46 and 48).
165Panama's submission, para. 92.
166Panama's submission, para. 93 (quoting Award of the Arbitrator, Indonesia – Autos (Article 21.3(c)),
para. 24). Panama argues that, in Indonesia – Autos, the particular circumstance that led the arbitrator to grant
additional time for implementation was the "dire economic and financial situation" faced by Indonesia, rather
than its developing country status.
167Panama's submission, para. 94 (quoting Award of the Arbitrator, Chile – Price Band System
(Article 21.3(c)), para. 56).
168Panama's submission, para. 95.

56. Alternatively, Panama requests that I determine two separate reasonable periods of time for
implementation of the recommendations and rulings of the DSB: a longer period of time for the
indicative prices measure, considering that an amendment to Decree 2685/1999 may require
Presidential action and review by the Triple A Committ ee; and a shorter period of time for the ports
of entry measure, given that Resolution 7373/200 7 and subsequent extens ions may be modified
exclusively by the DIAN through ordinary administrative procedures.169
III. Reasonable Period of Time
A. Preliminary Matters
1. Procedural Issue
57. Before turning to the question of the reasonable period of time for implementation, I address a
preliminary issue raised during the oral hearing in these arbitration proceedings. Attached to the
written version of its opening statement, Colombia submitted Exhibits COL-6 to COL-11, which
contained evidence that had not been previously submitted with its written submission. Panama
objected to the introduction of such evidence at th e oral hearing stage. Panama argued that the
introduction of new evidence at such a late stage in the proceedings could potentially infringe upon its
due process rights, for it did not have adequate time to review and comment on such evidence.
Colombia responded that the evidence submitted at the oral hearing was intended to rebut allegations
made by Panama in its written submission, and therefore did not raise any due process concerns.
58. Upon review of the evidence submitted by Colomb ia during the oral hearing, I determined
that Exhibit COL-6 contained a chart that outlined , in summarized fashion, the particular steps
proposed by Colombia in its written submission for implementation of the recommendations and
rulings of the DSB. A similar chart had been submitted by Panama in paragraph 37 of its written
submission. I therefore decided to admit the char t contained in Exhibit COL-6 as evidence in these
proceedings. I did not consider it necessary to rely on the evidence contained in Exhibits COL-7 to
COL-11 in reaching my determination.
59. Also during the oral hearing, I asked Colo mbia to produce evidence in support of its
contention that an Inter-Institutional Working Group (Grupo de Trabajo Interinstitucional) had been
established on 17 April 2009 with the objective of examining different alternatives for the
implementation of the recommendations and rulings of the DSB. In response, Colombia submitted an

169Panama's submission, paras. 99-101 (referring to Award of the Arbitrator, US – Gambling
(Article 21.3(c)), para. 41). Panama notes that the arbitrator in that case discussed whether more than one
reasonable period of time could be determined under Article 21.3(c), while ultimately not deciding that
question.

Ayuda Memoria produced by the Ministry of Trade, Industry and Tourism of Colombia, which
contained the minutes of the first meeting of the Working Group, and a list of attendees. I decided to
admit this document as relevant evidence in these proceedings.
2. Mandate of the Arbitrator

60. The Panel Report in this dispute was adopted by the DSB on 20 May 2009. On 19 June 2009,
Colombia informed the DSB of its intention to comply with the recommendations and rulings, but
stated that it would need a reasonable period of time in which to do so. 170 As the parties failed to
agree on a period of time for implementation, the Di rector-General consulted with the parties and
appointed me as Arbitrator on 30 July 2009 to dete rmine a reasonable period of time. I accepted the
appointment on 3 August 2009.
61. Article 21.3 of the DSU establishes that, if it is "impracticable" for a Member to comply
"immediately" with the recommendations and rulings of the DSB, then that Member "shall have a
reasonable period of time in which to do so". My task as Arbitrator in these proceedings is to
determine such reasonable period of time, taking due account of the relevant provisions of the DSU
and, specifically, of the following directions set forth in Article 21.3:
... The reasonable period of time shall be:
(c) a period of time determined through binding arbitration .... In
such arbitration, a guideline for the arbitrator should be that the
reasonable period of time to implement panel or Appellate Body
recommendations should not exceed 15 months from the date of
adoption of a panel or Appellate Body report. However, that
time may be shorter or longer, depending upon the particular
circumstances. (footnotes omitted)
62. I am mindful of the context in which Article 21.3(c) appears. Article 21.1 of the DSU
provides that "prompt compliance" is essential fo r the effective resolution of WTO disputes.
Furthermore, the introductory paragraph of Article 21.3 indicates that a "reasonable period of time"
for implementation shall be available only if "it is impracticable to comply immediately" with the
recommendations and rulings of the DSB. I agree with the arbitrator in EC – Hormones that these
contextual elements suggest that the "reasonable period of time" within the meaning of Article 21.3 of
the DSU "should be the shortest period possible w ithin the legal system of the [implementing]
Member."
171

170WT/DSB/M/270, para. 51.
171Award of the Arbitrator, EC – Hormones (Article 21.3(c)), para. 26.

63. It is generally accepted that my mandate in th ese Article 21.3(c) proceedings is limited to
determining the "reasonable period of time" for im plementation in the underlying WTO dispute. In
fulfilling this limited mandate, I acknowledge th at the implementing Memb er has a measure of
discretion in selecting the means of implementation th at it deems most appropriate. Like previous
arbitrators before me, I consider that my mandate relates to the time by when the implementing
Member must achieve compliance, not to the manner in which that Member achieves compliance. 172
Yet, when a Member must comply cannot be determined in isolation from the chosen means of
implementation. In order "to determine when a Member must comply, it may be necessary to
consider how a Member proposes to do so." 173 Thus, in making my determination under
Article 21.3(c), the means of implementation ava ilable to the Member concerned is a relevant
consideration.174
64. While an implementing Member has discretion in selecting the means of implementation, this
discretion is not "an unfettered right to choose any method of implementation". 175 I n m y v i e w ,
implementation of the recommendations and rulings of the DSB in th is case is an "obligation of
result", and therefore the means of implementation cho sen must be apt in form, nature, and content to
effect compliance, and should otherwise be consistent with the covered agreements.176 Thus, although
I am mindful that it falls within the scope of Ar ticle 21.5 proceedings to assess whether the measures
eventually taken to comply are WTO-consistent, in making my determination under Article 21.3(c) I
must consider "whether the implementing action falls within the range of permissible actions that can
be taken in order to implement the DSB's recommendations and rulings." 177 Moreover, I agree with
the arbitrator in EC – Export Subsidies on Sugar that "the chosen method must be such that it could be
implemented within a reasonable period of time in accordance with the guidelines contained in

172See Award of the Arbitrator, US – Stainless Steel (Mexico) (Article 21.3(c)), para. 41; Award of the
Arbitrator, Brazil – Retreaded Tyres (Article 21.3(c)), para. 47; Award of the Arbitrator, Japan – DRAMs
(Korea) (Article 21.3(c)), para. 26; Award of the Arbitrator, EC – Chicken Cuts (Article 21.3(c)), para. 49; and
Award of the Arbitrator, Canada – Pharmaceutical Patents (Article 21.3(c)), para. 41.
173Award of the Arbitrator, Japan – DRAMs (Korea) (Article 21.3(c)), para. 26. (original emphasis)
174Award of the Arbitrator, Japan – DRAMs (Korea) (Article 21.3(c)), para. 27.
175Award of the Arbitrator, EC – Export Subsidies on Sugar (Article 21.3(c)), para. 69.
176See Award of the Arbitrator, EC – Hormones (Article 21.3(c)) , para. 38. See also Award of the
Arbitrator, US – Stainless Steel ( Mexico) (Article 21.3(c)), para. 41; Award of Arbitrator, Brazil – Retreaded
Tyres (Article 21.3(c)), para. 48; Award of the Arbitrator, Japan – DRAMs (Korea) (Article 21.3(c)), para. 25
(referring to Award of the Arbitrator, EC – Chicken Cuts (Article 21.3(c)) , para. 49, in turn referring to Award
of the Arbitrator, Canada – Pharmaceutical Patents (Article 21.3(c)) , paras. 41-43; Award of the Arbitrator,
Chile – Price Band System (Article 21.3(c)) , para. 32; Award of the Arbitrator, EC – Tariff Preferences
(Article 21.3(c)), para. 30; Award of the Arbitrator, US – Oil Country Tubular Goods Sunset Reviews
(Article 21.3(c)), para. 26; Award of the Arbitrator, US – Gambling (Article 21.3(c)) , para. 33; and Award of
the Arbitrator, EC – Export Subsidies on Sugar (Article 21.3(c)), para. 69).
177Award of the Arbitrator, Japan – DRAMs (Korea) (Article 21.3(c)), para. 27.

Article 21.3(c)."
178 In addition, while the implementing Member is free to initiate wider reforms of its
municipal law in the process of implementing of the DSB's recommendations and rulings, such
objectives do not justify a longer implementation pe riod. My determination as to the reasonable
period of time for implementation of these recommenda tions and rulings must focus on the shortest
period possible within the legal system of the impl ementing Member to bring the particular measures
found to be inconsistent into conformity with its WTO obligations.179
65. As other arbitrators in the past, I also consider that the implementing Member is expected to
use whatever flexibility is available within its legal system to promptly implement the
recommendations and rulings of the DSB. 180 This is justified by the importance of fulfilling the
obligation to comply immediately with the reco mmendations and rulings of the DSB, which have
established that certain measures are inconsistent w ith a Member's WTO obligations. However, this
does not necessarily include recourse to "extraordinary" procedures.181
66. Further, I note that the parties have offered di verging views on the allocation of the burden of
proof under Article 21.3(c) of the DSU. Colombia argues that it was incumbent upon Panama, as the
party requesting deviation from the 15-month guidelin e provided in Article 21.3(c), to demonstrate
the "particular circumstances" justifying a shorter period of time for implementation. 182 Panama
responds that Colombia, as the implementing Member , bears the burden of proving that the period of
time it requests for implementation is "reasonable".183
67. I am guided by previous arbitrators' awards that place the burden on the implementing
Member to demonstrate that, if immediate compli ance is impracticable, the period of time it proposes
constitutes a "reasonable period of time". 184 However, this does not ab solve the other Member from

178Award of the Arbitrator, EC – Export Subsidies on Sugar (Article 21.3(c)), para. 69.
179See Award of the Arbitrator, EC – Tariff Preferences (Article 21.3(c)), para. 31.
180See Award of the Arbitrator, US – Stainless Steel (Mexico) (Article 21.3(c)), para. 42; Award of the
Arbitrator, Brazil – Retreaded Tyres (Article 21.3(c)), para. 48; Award of the Arbitrator, Japan – DRAMs
(Korea) (Article 21.3(c)), para. 25 (referring to Award of the Arbitrator, EC – Chicken Cuts (Article 21.3(c)) ,
para. 49, in turn referring to Award of the Arbitrator, Chile – Price Band System (Article 21.3(c)) , para. 39;
Award of the Arbitrator, EC – Tariff Preferences (Article 21.3(c)), para. 36; and Award of the Arbitrator, US –
Offset Act (Byrd Amendment) (Article 21.3(c)), para. 64).
181See Award of th e Arbitrator, US – Stainless Steel ( Mexico) (Article 21.3(c)) , para. 42 (referring to
Award of the Arbitrator, Brazil – Retreaded Tyres (Article 21.3(c)), para. 48, in turn referring to Award of the
Arbitrator, Japan – DRAMs (Korea), para. 25; Award of the Arbitrator, EC – Chicken Cuts, para. 49; Award of
the Arbitrator, Korea – Alcoholic Beverages (Article 21.3(c)) , para. 42; Award of the Arbitrator, Chile – Price
Band System (Article 21.3(c)) , para. 51; and Award of the Arbitrator, US – Offset Act (Byrd Amendment)
(Article 21.3(c)), para. 74).
182Colombia's submission, para. 69.
183Panama's submission, para. 27.
184See Award of the Arbitrator, Japan – DRAMs (Korea) (Article 21.3(c)), para. 28 (referring to Award
of the Arbitrator, Canada – Pharmaceutical Patents (Article 21.3(c)), para. 47; and Award of the Arbitrator, US
– 1916 Act (Article 21.3(c)), para. 33).

producing evidence in support of its contention that the period of time requested by the implementing
Member is not "reasonable", and a shorter period of time for implementation is warranted.
3. The Measures Found to be Inconsistent by the Panel
68. For the purposes of these Article 21.3(c) arbitr ation proceedings, I refer to the relevant
findings of the Panel:
• Article 128.5(e) of Decree 2685/1999, Article 172.7 of Resolution 4240/2000, as well as
various Resolutions establishing indicative prices185, by mandating the use of indicative prices
for customs valuations purposes, are inconsistent "as such" with the obligation to apply, in a
sequential manner, the methods of valuation provided in Articles 1, 2, 3, 5, and 6 of the
Agreement on Customs Valuation186;
• Article 128.5(e) of Decree 2685/1999, Article 172.7 of Resolution 4240/2000, as well as
various Resolutions establishing indicative pri ces, by mandating the use of the higher of two
values, or a minimum price, as the customs valu e of subject goods, are inconsistent "as such"
with Articles 7.2(b) and 7.2(f) of the Agreement on Customs Valuation187; and
• Resolution 7373/2007, as amended by Resolution 7637/2007 188 (the "ports of entry measure")
is inconsistent with Article I:1, the first and second sentences of Article V:2, the first sentence
of Article V:6, and Article XI:1 of the GATT 1994.189
69. The Panel further rejected Colombia's defence that the ports of entry measure was justified
under Article XX(d) of the GATT 1994 as a measure n ecessary to secure compliance with Colombia's
customs laws and regulations. 190 Although the Panel considered th at the ports of entry measure was
designed to secure compliance with Decree 2685/1999 and Resolution 4240/2000 191, and recognized
the importance of combating under-invoicing and money-laundering associated with drug

185Resolution No. 7510/2007, as modified by Resolution No. 11412/2007; Resolution No. 7511/2007;
Resolution No. 7509/2007, as modified by Resolution No. 11414/2007; Resolution No. 7512/2007, as modified
by Resolution No. 11415/2007 and Resolution No. 7513/2007. (See Panel Report, para. 7.36) During the course
of the oral hearing, the parties confirmed that some of the measures establishing indicative prices had been
replaced by Resolutions 8812/2008 (Arbitration Exhibit PAN-3) and 5516/2009 (Arbitration Exhibit PAN-4).
186Panel Report, paras. 7.152 and 8.1.
187Panel Report, paras. 7.153 and 8.2.
188Resolution 7373/2007 was extended until 30 June 2009 by Resolution 1749/2008 (Arbitration
Exhibit PAN-5) and until 31 December 2009 by Resolution 6816/2009 (Arbitration Exhibit PAN-6).
189Panel Report, para. 8.5.
190Panel Report, para. 8.7.
191Panel Report, para. 7.543.

trafficking
192, the Panel found that Colombia had not est ablished that the ports of entry measure
contributed to combating customs fraud and contraband in Colombia.193
70. The Panel Report was issued to the parties on 15 April 2009 194, was circulated to WTO
Members on 27 April 2009, and was adopted by the DSB on 20 May 2009. The Panel recommended
that Colombia brings its measures into c onformity with its obligations under the Agreement on
Customs Valuation and the GATT 1994.
195
B. Factors Affecting the Determination of the Reasonable Period of Time under
Article 21.3(c) of the DSU
1. Proposed Means of Implementation
(a) Colombia
71. With respect to the use of indicative prices for customs valuation purposes, Colombia
proposes to implement the DSB's r ecommendations and rulings under the Agreement on Customs
Valuation by "revising the design and implementation of its customs control system based on
indicative prices to more clearly separate customs valuation from the legitimate right to exercise
customs control."196 According to Colombia, this is likely to incorporate "a revised system of customs
control based on database prices that will not serve as the basis for customs valuation." 197 Colombia
argues that the process for modifying its customs control system would entail the following sequential
steps:
• identification and evaluation of whether and how various provisions of Colombia's laws,
regulations, and administrative orders may be impacted by the Panel's rulings and by the
amendment of the indicative prices mechanism. 198 Colombia estimates that this step could be
completed in three months;

192Panel Report, para. 7.566.
193Panel Report, paras. 7.585, 7.588, and 7.618. In the light of these findings, the Panel did not address
the introductory clause of Article XX of the GATT 1994.
194Panel Report, para. 1.8. I also note that the Pane l issued its Interim Report to the parties on 4 March
2009.
195Panel Report, para. 8.10.
196Colombia's submission, para. 28.
197Colombia's submission, para. 28.
198Colombia's submission, paras 30-32.

• examination of possible alternatives to reform Colombia's customs control system 199,
consultations200, and elaboration of a specific drafting proposal to amend Decree 2685/1999
and Resolution 4240/2000. The elaboration of a specific drafting proposal would be subject
to the DIAN's internal decision-making process, pursuant to Article 2 of Resolution 457/2008
and Administrative Order 0002 of 08 May 2009 (six to nine months)201;
• examination of revised customs procedures by the Department of Public Administration,
pursuant to Decree 4669/2005 (one to two months)202;
• examination of proposed amendments to Decree 2685/1999 and Resolution 4240/2000 by the
Comité de Asuntos Aduaneros , Arancelarios y de Comercio Exterior (the "Triple A
Committee") (Decree 3303/2006), the Ministry of Trade, Industry and Tourism (Decree
210/2003) and the Ministry of Finance (Decree 4646/2006) (two to four months)203;
• review of the amendments to Decree 2685/199 9 and Resolution 4240/2000 by the Legal
Office of the President, signature by the Preside nt, and publication of the amendments in the
Official Gazette (Diario Oficial)204 (one month);
• amendment of specific Resolutions establishing indicative prices (three months)205;

199According to Colombia, this step includes: analysis of various international norms on customs
valuation and customs control, including the experience of countries facing similar problems; examination of
how to administer a customs control system based on cash deposits; examination of which "other appropriate
instrument" could be imposed as a guarantee mechanism under Article 13 of the Agreement on Customs
Valuation and Article 51(1) of Andean Community Resolution 846, implementing Andean Community
Decision 571; examination of WTO-consistency of different approaches; examination of the World Customs
Organization ("WCO") practices on customs valuation, control and enforcement; and examination of whether a
generalized system of an advance import declaration can be designed. (Colombia's submission, paras. 33-35)
200Colombia argues that the constitutional principle of transparency in government administration
provided in Article 209 of the Constitution of Colombia requires that the public and private sectors are consulted
on a new system of customs control. (Colombia's submission, para. 36)
201According to Colombia, the DIAN's internal d ecision-making process consists of the following
steps: preparation of an initial draft of amended text; review of its legal and technical correctness; review of
proposed parallel changes in respect of related legal norms; exchange of comments and suggestions; and
approval and inclusion of corresponding adjustments into a new final proposal. Colombia argues that this
process involves several departments of the DIAN, including the Technical Sub-Directorate (Subdirección de
Gestión Técnica Aduanera) , the Sub-Directorate for External Trade (Sub-Dirección de Gestión de Comercio
Exterior), the Directorate for Legal Affairs (Dirección de Gestión Juridica) , the Directorate for Customs
Management (Dirección de Gestión de Aduanas) and the General Directorate (Dirección General). (Colombia's
submission, paras. 86 and 87)
202Colombia's submission, para. 88 and Arbitration Exhibit COL-4.
203Colombia's submission, paras. 89 and 90.
204Colombia's submission, paras. 91 and 92 and Arbitration Exhibit COL-6.
205Colombia's submission, para. 92.

• implementation of the new measure into Colo mbia's computerized system of customs
administration (four months)
206; and
• internal training of customs administration officials (two months).207
72. In addition to the steps describ ed above, Colombia intends to reform the provisions of its
Commercial Code dealing with customs securities in order to ensure that bank or insurance guarantees
are effectively available to importers in the contex t of its revised customs control system. According
to Colombia, the process for amending its Commercia l Code would include the following stages:
development of reasons for amending the law; drafting of the actual reform proposal; transmission of
the bill to the President's Legal Office; review by the Legal Office of the President and other
Ministries; amendments of the bill in the light of comments received; renewed transmission of the
revised bill to the relevant Ministries; and review by the Triple A Committee. 208 Thereafter, a
legislative process composed of four successive stages would be initiated before the Colombian
Parliament.209 Colombia estimates that the amendment of its customs securities laws would take
between 12 and 24 months.
73. With respect to the ports of entry measure , Colombia proposes to implement the Panel's
findings under the GATT 1994 by amending its measu re in a manner that does not treat imports
arriving from Panama differently from those arriving directly from the country of origin, while at the
same time ensuring the enforcement of its customs laws. Towards this end, Colombia contemplates
incorporating into its revised measure some "essen tial aspects" of the ports of entry measure, such as
the advance import declaration, the exemption for goods in transit, and possibly certain limitations on
the ports of entry in a measure of "generalized application".210
74. Colombia argues that the process for revising its ports of entry measure would encompass the
following steps:
• a preliminary evaluation stage, consisting of an evaluation of the Panel's findings and the
impact of their implementation on different la ws and regulations, as well as a comparative

206Colombia's submission, para. 39. Colombia argues that this particular stage is required by Article 5
of Decree 2685/1999 and by Resolution 457/2008.
207Colombia's submission, para. 40.
208Colombia's submission, para. 44.
209Colombia's submission, para. 44 (referring to El Congreso de Colombia, Ley 5 de 1992 (junio 17),
Diario Oficial No. 40.483 de 18 de junio de 1992 (Law 5 of 1992)).
210Colombia's submission, para. 47.

study of different methods for securing customs control, in the light of the WTO agreements
and relevant guidelines, decisions, and recommendations of the WCO (four to six months)211;
• definition and development of a mechanism to substitute the ports of entry measure in
consultation with the public and private sectors. 212 The elaboration of a specific drafting
proposal would be subject to the DIAN's in ternal decision-making process, pursuant to
Article 2 of Resolution 457/2008 and Administrative Order 0002 of 08 May 2009 (six
months)213;
• examination of proposed new procedures by th e Department of Public Administration,
pursuant to Decree 4669/2005 (one to two months)214;
• examination of the proposed new mechanism by the Triple A Committee (Decree 3303/2006),
the Ministry of Trade, Industry and Tourism (Decree 210/2003), and the Ministry of Finance
(Decree 4646/2006) (two to four months)
215; and
• signature by the President, review by the Lega l Office of the President, and publication of the
amendments in the Diario Oficial (one month)216.
75. At the oral hearing, Colombia explained that, although in its estimation the implementation of
the recommendations and rulings of the DSB coul d take any time between 15 and 28 months, it was
willing to use all flexibility available within its dom estic legal system to achieve compliance within
the 15-month guideline provided in Article 21.3(c) of the DSU.
(b) Panama
76. Panama argues that "any implementing action other than withdrawal of the measure would
fall outside the permissible range of actions for implementation." 217 Panama recalls that withdrawal
of the inconsistent measures is the preferred mean s of implementation under Article 3.7 of the DSU.
Panama acknowledges that Colombia has discretion in selecting the means of implementation, but

211Colombia's submission, paras. 49-51.
212According to Colombia, this stage involves: an in tegrated study into port and airport security;
review of the potential benefits of generalizing the advance import declaration; review of Colombia's transit
regime to ensure compliance with Colombia's international obligations; and consideration of the different stages
of development and technical capacity of customs authorities and related socio-economic conditions.
(Colombia's submission, paras. 52-54)
213For a description of the DIAN's inte rnal decision-making process, see supra, footnote 201 to
paragraph 71
214Colombia's submission, para. 88 and Arbitration Exhibits COL-4 and COL-6.
215Colombia's submission, paras. 89 and 90 and Arbitration Exhibit COL-6.
216Colombia's submission, para. 91 and Arbitration Exhibit COL-6.
217Panama's submission, para. 46.

maintains that Colombia's proposed means of im plementation do not fall within the "range of
permissible actions that can be taken in or der to implement the DSB's recommendations and
rulings".
218 Panama reasons that any measure that replaces the payment of duties under
Article 128.5 e) of Decree 2685/1999 with a compulsory guarantee system would be inconsistent with
Article 13 of the Agreement on Customs Valuation. Similarly, Panama contends that any measure that
maintains any restrictions on the ports of entry wo uld fall afoul of Article XI of the GATT 1994.
Panama underscores that similar measures were wit hdrawn by Colombia in 2006 within a very short
period of time, and therefore considers that one w eek following the issuance of this Award, that is,
4 months and 19 days from the date of adoption of the Panel Report, would be sufficient for Colombia
to complete implementation in this case.
(c) Analysis
77. Initially, I observe that Article 3.7 of the DSU provides that "the first objective of the dispute
settlement mechanism is usually to secure withdrawal " of the WTO-inconsistent measures. Hence, I
agree with Panama that withdrawal of the inc onsistent measures is the "preferred" means of
implementation and certainly falls within the range of permissible actions. However, I do not exclude
that Colombia could bring itself into conformity with the recommendations and rulings of the DSB by
modifying both the indicative prices mechanism a nd the ports of entry measure in a manner that
rectifies the particular WTO-inconsistencies identified by the Panel. In my view, modification of both
the indicative prices mechanism and the ports of entry measure is within the "range of permissible
actions"
219 available for Colombia to implement the r ecommendations and rulings of the DSB in this
dispute. I draw guidance from the arbitrator in US – Offset Act (Byrd Amendment) , who stated that
the implementing Member "may choose either to withdraw or modify" 220 the WTO-inconsistent
measure in exercising its discretion to select the a ppropriate means of implementation. In addition,
the question of the WTO-consistency of measures even tually taken by Colombia to comply with the
recommendations and rulings of th e DSB is beyond my mandate in these proceedings, and would fall
within the purview of Article 21.5 proceedings.
78. Accordingly, I make my determination on the basis of the shortest period of time possible
within Colombia's domestic legal system to modi fy the indicative prices mechanism and the ports of
entry measure so as to bring them into conformity with its WTO obligations. In so doing, I follow the

218Panama's submission, para. 46 (quoting Award of the Arbitrator, Brazil – Retreaded Tyres
(Article 21.3(c)), para. 48, in turn quoting Award of the Arbitrator, Japan – DRAMs (Korea) (Article 21.3(c)),
para. 27).
219Award of the Arbitrator, Japan – DRAMs (Korea) (Article 21.3(c)), para. 27.
220Award of the Arbitrator, US – Offset Act (Byrd Amendment) (Article 21.3(c)), para. 50. (emphasis
omitted)

guidance of the arbitrator in Canada – Pharmaceutical Patents that "the legally binding, as opposed
to the discretionary, nature of the component step s leading to implementation should be taken into
account"221, and have weighed each of the component steps and timeframes proposed by Colombia
accordingly.
79. In making my determination, I also pay heed to the statement of the arbitrator in Chile – Price
Band System that the implementing Member must "at the very least" promptly take concrete steps
towards implementation from the date of adoption of the panel or Appellate Body reports by the
DSB.222 Accordingly, I should take into account any action or inaction by Colombia in the period of
time comprised between the date of adoption of th e Panel Report by the DSB and the initiation of
these arbitration proceedings when determining the reasonable period of time for implementation.
80. Since the adoption of the Panel Report, Co lombia has established an Inter-Institutional
Working Group (Grupo de Trabajo Interinstitucional), composed of representatives of the Ministry of
Trade, Industry and Tourism, and of the DIAN, to evaluate how to implement the recommendations
and rulings of the DSB. This initiative, in my opinion, goes beyond mere "internal discussions" 223, as
argued by Panama, insofar as it establishes an ins titutional framework responsible for proposing and
coordinating an administrative plan of action for impl ementation. As noted by a previous arbitrator,
"consultations within governmental agencies ar e typically a concomitant of lawmaking in
contemporary polities" 224, and therefore should be taken into account when fixing the reasonable
period of time for implementation. Therefore, I cons ider the work of such Inter-Institutional Working
Group relevant to my determination.
81. I note further that during the oral hearing Co lombia informed that the Inter-Institutional
Working Group has concluded its work. I am theref ore satisfied that Colombia has completed all
preliminary evaluation stages outlined in its implementation proposal 225, and therefore is expected to
speedily proceed with the legal pr ocess necessary to bring the measures found to be inconsistent into
conformity.

221Award of the Arbitrator, Canada – Pharmaceutical Patents (Article 21.3(c)), para. 51. (emphasis
omitted)
222Award of the Arbitrator, Chile – Price Band System (Article 21.3(c)), para. 43. See also Award of
the Arbitrator, US – Section 110(5) Copyright Act (Article 21.3(c)), para. 46.
223Panama's submission, para. 42 (quoting Award of the Arbitrator, EC – Chicken Cuts
(Article 21.3(c)), para. 66).
224Award of the Arbitrator, Chile – Price Band System (Article 21.3(c)), para. 42.
225This includes the assessment of domestic laws impacted by implementation of the Panel's findings,
comparative studies, studies of WTO-consistency of poss ible alternatives, WCO practices, and consistency of
implementing measures with Andean Community law.

82. Turning to the legal process necessary to modify the measures found to be inconsistent by the
Panel, Colombia has established to my satisfact ion that a number of the component steps for
implementation seem to be administratively mandate d. Specifically, Colombia has shown that the
process for modifying both the indicative prices mechanism and the ports of entry measure consists
of: (i) an internal decision-making process with in the DIAN, pursuant to Resolution 457/2008 and
Administrative Order 0002
226; (ii) review of any new customs procedures by the Department of
Public Administration, pursuant to Article 2 of Decree 4669/2005 227; (iii) review of new measures by
the Triple A Committee, the Ministry of Trade, I ndustry and Tourism, and the Ministry of Finance,
pursuant to Decrees 3303/2006, 210/2003, and 4646/2006 228; and (iv) signature by the President of
Colombia and publication in the Diario Oficial.229
83. However, I also observe that the various regulations brought to the fore by Colombia do not
seem to prescribe minimum mandatory timeframes, and when they do, such timeframes are rather
short. For example, as Panama points out, Article 2, paragraph 3 of Resolution 457/2008 establishes a
period of 13 working days for the "formalization of procedures" within the DIAN, but otherwise does
not seem to set minimum periods for the DIAN's decision-making process. Likewise, Colombia has
not established that Decrees 4669/2005, 210/2003, a nd 4646/2006 provide for specific time-limits for
the reviews of the Department of Public Administration, the Ministry of Trade, Industry and Tourism,
and the Ministry of Finance, respectively. Si milarly, Articles 3 and 4 of Decree 3303/2006 establish
that the Triple A Committee can meet between re gular sessions at any time, within 5 days of a
meeting being called by its President.
230 Therefore, I consider that Colombia's administrative
decision-making process is "characterized by a considerable degree of flexibility" 231, and expect
Colombia to make use of such flexibility in order to ensure prompt compliance with the
recommendations and rulings of the DSB.
84. In addition, some of the steps outlined by Co lombia seem duplicative, and many could be
pursued in parallel, to the extent that they are not necessarily seque ntial. For example, a careful
review of Article 2 of Decree 3303/2006 reveals th at representatives of the Ministry of Trade,
Industry and Tourism and the Ministry of Finance, as well as the Director-Gen eral of the DIAN, are
members of the Triple A Committee. This, in my view, significantly reduces the time necessary to
seek additional review of the implementing measures by those Ministries, whose views are likely to

226Colombia's submission, paras. 86 and 87 and Arbitration Exhibits COL-1 and COL-2.
227Colombia's submission, para 88 (referring to Arbitration Exhibit COL-4).
228Colombia's submission, paras. 89 and 90 (referring to Arbitration Exhibit COL-5). See also
Arbitration Exhibit PAN-11.
229Colombia's submission, paras. 91 and 92.
230In this respect, I do not consid er that convening a meeting of the Triple A Committee between
regular quarterly sessions amounts to recourse to "extraordinary procedures".
231Award of the Arbitrator, US – 1916 Act (Article 21.3(c)), para. 39.

be taken into account within the ambit of the Tr iple A Committee. Simila rly, I consider that
additional time will not be necessary for the ela boration of specific DIAN Resolutions modifying the
existing indicative prices mechanism, because such amendments could be prepared in tandem with the
reform of the underlying Decree 2685/1999 and of Resolution 4240/2000, and simply be enacted
shortly after the publication of the amended measures in the Diario Oficial.
85. On the other hand, I am not convinced that a broad reform of numerous provisions of
Colombia's Commercial Code concerning customs secu rities is relevant for my determination, as
suggested by Colombia. It may well be the case that Colombia considers it desirable to reform its
customs securities statutes in order to ensure that gua rantees are effectively available in the context of
its revised customs control system. However, th e relevant recommendations and rulings of the DSB
concern the use of indicative prices for customs valu ation purposes and certain restrictions on ports of
entry. I find the situation here analogous to the one faced by the arbitrator in EC – Tariff Preferences,
where the European Communities proposed a wider refo rm of its Generalized System of Preferences
("GSP") scheme as part of its implementation of th e recommendations and rulings of the DSB in that
dispute.
232 In rejecting the relevance of such wider refo rm for his determination, the arbitrator held
that his "determination as to the reasonable period of time for implementation ... must have regard
only to the shortest period possible within the legal system of the European Communities to bring the
Drug Arrangements into conformity with its WTO obligations."
233 Therefore, "[t]he mere fact that the
European Communities ... decided to incorporate the task of implementation within the larger
objective of reforming its overall GSP scheme [could not ] lead to a determination of a shorter, or
longer, reasonable period of time."234
86. Similarly, the mere fact that Colombia contem plates a wider reform of its customs securities
statutes together with the implementation of the DSB's recommendations and rulings cannot lead to a
determination of a longer period of time, insofa r as the measures that have to be brought into
conformity are the indicative prices mechanism and the ports of entry measure. In any event, even
assuming that the reform of Colombia's statutory provisions on customs securities is relevant for my
consideration, Colombia explained during the oral hearing that such legislative reforms can be
enacted within the same timeframe estimated for the completion of the remainder of its regulatory and
administrative implementing measures.
87. Finally, I do not attribute significance to st eps such as the implementation of the revised
measures into Colombia's computerized system of customs control and the training of DIAN officials

232See Award of the Arbitrator, EC – Tariff Preferences (Article 21.3(c)), para. 29.
233Award of the Arbitrator, EC – Tariff Preferences (Article 21.3(c)), para. 31.
234Award of the Arbitrator, EC – Tariff Preferences (Article 21.3(c)), para. 31.

to familiarize them with the revised customs control mechanism. These particular steps seem
consequential, rather than pre-requi sites, to the enactment of Colombia 's modified measures. In this
context, I concur with the statement of the arbitrator in Canada – Pharmaceutical Patents that "the
determination of a 'reasonable period of time' must be a legal judgement based on an examination of
relevant legal requirements"
235 for the enactment of the impl ementing measures. Colombia's
component steps of incorporating its revised meas ures into its computerized system of customs
control and the training of offici als in the new system, are merely derivative, or consequential, upon
the completion of the legal process necessary to the enactment of the implementing measures, and
thus, in my view, do not justify a longer period of time for implementation.
2. Particular Circumstances

(a) Need for Legislative and Administrative Action
88. I turn to the specific "particular circumstan ces" that, according to Colombia, justify a
reasonable period of time of "at least" 15 months to implement the recommendations and rulings of
the DSB. Initially, Colombia argues that the impl ementation of the Panel's "as such" findings will
require it to amend its laws and regulations and to issue new rules of general application. Referring to
previous arbitrators, Colombia argues that its im plementation will involve "legislative and regulatory
decision making", which entails "setting new rules" and is therefore more time-consuming than
"administrative decision-making", which simply involves applying existing regulations.236
89. Panama responds that Colombia has the flex ibility to implement the recommendations and
rulings of the DSB exclusively thro ugh administrative means. Panama notes that all the measures
found by the Panel to be inconsistent with Colomb ia's WTO obligations are administrative acts issued
by the Executive Branch of the Colombian Govern ment. Therefore, Panama emphasizes that the
authority to amend Decree 2685/1999, Resolution 4240/2000, and Resolution 7373/2007, as well as
various Resolutions establishing indicative prices, rests with Colombia's administrative authorities. 237

235Award of the Arbitrator, Canada – Pharmaceutical Patents (Article 21.3(c)), para. 52.
236Colombia's submission, para. 78 (referring to Award of the Arbitrator, US – Gambling
(Article 21.3(c)), para. 35).
237According to Panama, the authority to modify Artic le 128.5 e) of Decree 2685/1999 rests with the
President of Colombia, pursuant to paragraph 25 of Ar ticle 189 of Colombia's Cons titution, having heard the
views of the Triple A Committee; Paragraph 12 of Article 6 of Decree 4048/2008 confers upon the Director-
General of the DIAN, the authority to amend Resolution 7373/2007 and Article 172.7 of Resolution 4240/2000;
and paragraph 6 of Article 28 of Decree 4048/2008 grants the Sub-Directorate of the Customs Technical
Management ( Subdirección de Gestión Técnica Aduanera ) the authority to modify various Resolutions
establishing indicative prices. (Panama's submission, paras. 73, 76, 81, and 83)

Panama adds that Colombia's expedient repeal of similar measures following a mutually agreed
solution reached with Panama on 31 October 2006 illustrates that Colombia can withdraw the
measures at issue in this dispute almost immediately.
90. Initially, I agree with the distinction made by Colombia following the guidance of the
arbitrator in US – Gambling that "[l]egislative action will, as a general rule, require more time than
regulatory rulemaking, which in turn will normally n eed more time than implementation that can be
achieved by means of an administrative decision." 238 Thus, in making my determination, I consider
that legislative means are generally more time-cons uming than regulatory rulemaking, which in turn
is more lengthy than simple administrative action. In the light of the proposed means of
implementation outlined by Colombia, it seems reas onable to assume that Colombia will have to
engage in a certain degree of regulatory rulema king in order to modify both its customs control
system and its ports of entry measure. This acti on, in my view, may be more time-consuming than
mere administrative decision on the basis of existing rules.
91. However, I am not persuaded that implementa tion of the recommendations and rulings of the
DSB in this dispute will also require legislative act ion. The only action that according to Colombia
would entail a legislative process is an amendment to the provisions of its Commercial Code dealing
with custom securities. As noted earlier, I do not co nsider that this element of a broader reform of
Colombia's customs control system can lead to the assessment of a longer period of time for
implementation insofar as the recommendations and ru lings of the DSB concern the use of indicative
prices for customs valuation purposes and certain restrictions on ports of entry.
92. With the exception of the legislative process required for the amendment of Colombia's
Commercial Code, all other implementing steps proposed by Colombia require regulatory or
administrative rulemaking, in the sense that they can be accomplished solely by the Executive Branch
of the Colombian Government.
239 Indeed, as Panama points out, the authority to amend the measures
found to be inconsistent by the Panel rests either with the President of Colombia, under Article 189,
paragraph 25, of Colombia's Political Constitution, or with various DIAN officials, pursuant to Decree
4048/2008. Accordingly, I consider that Colomb ia's implementation of the recommendations and
rulings of the DSB can be accomplished in a shorte r period of time than would have been necessary
had recourse to legislative means been required.

238Award of the Arbitrator, US – Gambling (Article 21.3(c)), para. 35.
239For the distinction between legislative and administrative processes, see Award of the Arbitrator, EC

93. During the oral hearing, Colombia argued that some of the measures found to be inconsistent
by the Panel, particularly Decree 2685/1999, have the status of " Leyes Marcos" under municipal law.
According to Colombia, such Leyes Marcos have the status of legislation under Colombian law and,
for this reason, require a more time-consuming modification process. Although Decree 2685/1999
may have a certain status under Colombian law, I ha ve not been persuaded that amendment of such
Leyes Marcos cannot be accomplished by the Executive Br anch. Indeed, Colombia has not argued
that legislative action is required to amend Decree 2685/1999; rather, it has argued that Presidential
action is required.
94. Moreover, I agree with Panama that the pr evious repeal of similar measures in 2006
demonstrates that Colombia retains considerable flexibility to implement the recommendations and
rulings of the DSB exclusively through administrative means. Colombia is correct in arguing that the
circumstances surrounding the previous repeal of similar measures were "fundamentally different"
240,
insofar as the measures were withdrawn as a re sult of the execution of a Customs Cooperation
Protocol between Colombia and Panama. In additi on, as noted earlier, I agree with Colombia that
implementation through modification—rather than wit hdrawal—of the measures at issue, is within the
range of actions that can be taken to implement th e recommendations and rulings of the DSB. At the
same time, however, with the exception of the authority necessary to modify Decree 2685/1999, I
consider that Panama has demonstrated that the legal authority to modify the measures found to be
inconsistent by the Panel is not substantially different from the one used by Colombia to repeal
similar measures in 2006. 241 For this reason, I attribute some significance to the previous repeal of
similar measures in reaching my determination.242
(b) Complexity of Implementing Measures
95. Colombia argues further that the complexity of amending measures relating to customs
control and enforcement is a "particular circumstance " that would justify a longer period of time for
implementation. Colombia suggests that the field of anti-smuggling is heavily regulated by a series of
"interdependent and overlapping" 243 regulations that may have to be modified as a result of its

240Colombia's submission, para. 61.
241Indeed, Colombia repealed similar measures in 2006 through Resolutions 12950/2006 and
12956/2006, and Resolution 13034/2006. These Resolutions were taken by various DIAN officials pursuant to
the authority conferred upon them by Articles 23 and 19(i) of Decree 1071/1999. These provisions were
replaced by paragraph 12 of Article 6 and paragraph 6 of Article 28 of Decree 4048/2008, which currently
provide the DIAN's Director-General and Sub-Director of Customs Technical Management with the authority to
regulate customs matters and modify reference prices. At the oral hearing, Colombia confirmed that these
provisions serve as the current basi s for the authority previously confe rred on DIAN officials by Decree
1071/1999. (Panama's submission, paras. 75-84 and Arbitration Exhibits PAN-12 and PAN-13)
242In a similar vein, see Award of the Arbitrator, US – Gambling (Article 21.3(c)), para. 55.
243Colombia's submission, para. 95.

implementation. Colombia adds that the amendm ent of both the indicative prices mechanism and the
ports of entry measure may impact the "entire anti-smuggling legal framework" 244, whilst its
concurrent objective that the implementing measure s secure customs control and enforcement render
implementation particularly complex.
96. Panama disagrees with Colombia that the alleged complexity of measures relating to
Colombia's customs control and enforcement cons titutes a "particular circumstance" justifying a
longer period of time for implementation. Pa nama considers that the measures "in and of
themselves"245 are not complex, nor is the process for amending them complex. For Panama,
Colombia's arguments relate to the "contentiousn ess" of these measures in Colombia, a factor that
several arbitrators have dismissed as a "particular circumstance" in their determination of the
reasonable period of time.
246
97. In response to questioning at the oral hearing, Colombia provided a list of the legal provisions
that it considers may be impacted by its implemen tation of the recommendations and rulings of the
DSB. This list consisted of several diffe rent provisions of Decree 2685/1999 and Resolution
4240/2000247, as well as Resolution 7373/2007, as amended. In my view, the fact that a number of
provisions in Decree 2685/1999 and Resolution 4240/2000 may be impacted by the amendment of the
specific provisions found to be inconsistent by th e Panel does not render implementation particularly
complex. I am not persuaded that modifying different provisions of the same legal instruments cannot
be done with the same legal process regardless of wh ether it concerns a few or many provisions of
that legal instrument. To the contrary, the fact that amendments to the WTO-inconsistent measures
may impact other provisions of the legal instruments in which they are contained seems to be part and
parcel of any regulatory decision-making process.
98. Colombia has identified customs control and enforcement concerns in the areas of anti-
smuggling, contraband, drug trafficking, and under-i nvoicing as an element that adds complexity to
its implementation of the recommendations and rulings of the DSB. 248 Although I recognize, like the
Panel, the importance of such legitimate objectives , Colombia has not identified which additional
laws and regulations could be impacted by the amendments of th e measures that have been found to
be inconsistent with its WTO obligations, nor h as Colombia sufficiently expounded the nature or

244Colombia's submission, para. 96.
245Panama's submission, para. 92.
246Panama's submission, para. 92 (referring to Award of the Arbitrator, US – Offset Act (Byrd
Amendment) (Article 21.3(c)), para. 61; and Award of the Arbitrator, Chile – Price Band System
(Article 21.3(c)), para. 47).
247Colombia listed, inter alia, Articles 121, 237, 253, 254, 502, 502.1, and 548 of Decree 2685/1999,
and Articles 170, 431.1, 431.2, 503, and 507 of Resolution 4240/2000.
248Colombia's submission, para. 93.

effect of that impact or interconnection. Absen t specific demonstration that implementation would
impact a "myriad of interc onnected and overlapping laws"
249 concerning customs control and
enforcement, I am not able to conclude that the implementation process would be as complex as
Colombia suggests. Accordingly, I attach little significance to this element as a "particular
circumstance" justifying a longer period of time for implementation.
(c) Importance of the Measure in the Domestic System
99. Colombia refers to the importance of the me asures in its domestic legal system as a third
"particular circumstance" justifying a longer peri od of time for implementation. According to
Colombia, the Panel acknowledged th e existence of a serious probl em of contraband from Panama
linked to money-laundering and drug trafficking, and recognized that under-invoicing and smuggling
are "a relatively more important reality fo r Colombia than for many other countries". 250 F o r
Colombia, the importance of ensuring that new measures address the complex economic, social, and
political issues facing Colombia, and that such meas ures "are integrated with minimal disruption to
the efficacy of the existing anti-smuggling regime" 251, justifies the assessment of a longer period of
time for implementation.
100. Panama dismisses the importance of the indicative prices mechanism and the ports of entry
measure in Colombia's domestic system as a "parti cular circumstance" justifying a longer period of
time for implementation. Panama distinguishes the facts of this dis pute from the facts in Chile –
Price Band System , where the arbitrator found that the price band system was so "fundamentally
integrated"252 into the agricultural policies of Chile over a period of 20 years that its "unique role and
impact" on Chilean society was taken into account as a "particular circumstance". In contrast,
Colombia's indicative prices mechanism and the ports of entry measure have been adopted in the
course of the last five years, and therefore Colo mbia has not demonstrated their "unique role and
impact" on Colombian society.253

249Award of the Arbitrator, US – Gambling (Article 21.3(c)), para. 46.
251Colombia's submission, para. 106.
252Panama's submission, para. 92 (referring to Award of the Arbitrator, Chile – Price Band System
(Article 21.3(c)), para. 47).
253Panama's submission, para. 92.

101. At the outset, I recognize that combating under-invoicing, smuggling, contraband, and
money-laundering associated with drug trafficking is of the utmost importance for Colombia. I recall
that the Panel noted that "combating under-invoicing and money laundering associated with drug
trafficking is a relatively more important realit y for Colombia than for many other countries." 254 At
the same time, I also note that the Panel was unabl e to conclude that the ports of entry measure
contributed to combating customs fraud and contraband in Colombia.255
102. In support of its request for a longer period of time for implementation due to the importance
of the measures at issue, Colombia re lies on the award of the arbitrator in Chile – Price Band System,
where the arbitrator considered that the importance of the price band system in Chilean society was a
"particular circumstance" justifying a longer period of time for implementation. The arbitrator found
that:
... the longstanding nature of the [price band system], its fundamental
integration into the central agricultural policies of Chile, its price-
determinative regulatory position in Chile's agricultural policy, and
its intricacy, I find its unique role and impact on Chilean society is a
relevant factor in my determina tion of the "reasonable period of
time" for implementation.
256
I find these considerations persuasive and consider it incumbent upon Colombia to demonstrate the
"unique role and impact" 257 of the challenged measures in Colombia's customs control and
enforcement regime in order to justify a longer period of time.
103. However, Colombia has not established in what way the indicative prices mechanism and the
ports of entry measure operate as "essential pillars" 258 of the regulatory regime it adopted to combat
under-invoicing, smuggling, and contraband. Even if this were the case, Colombia has not
demonstrated how the relative importance of th ese measures in its overall customs control and
enforcement framework for combating under-invoi cing, smuggling, and contraband impact the
implementing process in a manner that justifies th e assessment of a longer reasonable period of time
for implementation.

254Panel Report, para. 7.566.
255See Panel Report, paras. 7.588 and 7.618.
256Award of the Arbitrator, Chile – Price Band System (Article 21.3(c)), para. 48.
257Award of the Arbitrator, Chile – Price Band System (Article 21.3(c)), para. 48.
258Colombia's submission, para. 8.

(d) Developing Country Status
104. Finally, both Colombia and Panama argue that Article 21.2 of the DSU requires me to take
into account their respective status as developing countries in determining the reasonable period of
time for implementation. Colombia argues that its status as a "developing country affected by the
global economic crisis, in a continuing fight ag ainst contraband-related money-laundering and drug-
trafficking"
259 warrants the assessment of a longer reasonable period of time, whilst Panama's
developing country status is irrelevant because Panama has not demonstrated it is currently
experiencing "daunting financial woes". 260 In contrast, Panama considers that Colombia has not
demonstrated that it is in a "dire economic or financial situation" 261 that would justify a longer period
of time for implementation; instead, it is Pana ma's own status as a developing country adversely
affected by WTO-inconsistent measures that should be taken into account.
105. Article 21.2 of the DSU provides:
Particular attention should be paid to matters affecting the interests of
developing country Members with respect to measures which have
been subject to dispute settlement.
106. I recognize that Colombia's developing country st atus might affect the time within which it
can implement the recommendations and rulings of the DSB. However, like past arbitrators, I
consider that Article 21.2 of the DSU directs arbitrators acting under Article 21.3(c) to pay
"'[p]articular attention' to 'ma tters affecting the interests' of both an implementing and complaining
developing country Member or Members" 262, given that the scope of this provision is not textually
limited to either of these parties. For this reas on, in a situation where both the implementing and the
complaining Member are developing countries, the requirement provided in Article 21.2 is of little
relevance, except if one party succeeds in demonstrating that it is more severely affected by problems
related to its developing country stat us than the other party. In this case, I do not consider that either
Colombia or Panama have demonstrated that th e challenges they face as developing countries are
relatively more severe than the ones faced by the other party.
107. For this reason, the developing country status of both parties has not swayed me to either a
longer, or a shorter, "reasonable period of time".

259Colombia's submission, para. 113.
260Colombia's submission, para. 113 (quoting Award of the Arbitrator, Chile – Price Band System
(Article 21.3(c)), para. 56).
261Panama's submission, para. 95 (referring to Award of the Arbitrator, Indonesia-Autos
(Article 21.3(c)), para. 24.
262Award of the Arbitrator, EC – Export Subsidies on Sugar (Article 21.3(c)), para. 99.

108. Finally, I note Panama's alternative request that I determine two separa te "reasonable periods
of time": a longer period of time for the indicative prices mechanism, considering that an amendment
to Decree 2685/1999 may require Pr esidential action and review by the Triple A Committee; and a
shorter period of time for the ports of entry me asure, because Resolution 7373/2007 and subsequent
extensions may be modified exclusively by the DIAN through ordinary administrative procedures.263
109. In US – Gambling , the arbitrator did not exclude the possibility that an arbitrator might be
able to establish separate reasonable periods of time for separate measures. 264 Irrespective of whether
Article 21.3(c) would permit me to establish two different reasonable periods of time for the two
different measures at issue, I do not consider it appr opriate, in this arbitration, to determine separate
periods of time for bringing the indicative prices mechanism and the ports of entry measure into
conformity.
IV. Award
110. In sum, I consider that Colombia has promp tly initiated and already concluded preliminary
evaluation steps in the 4 months and 12 days that have lapsed to date since the adoption of the
recommendations and rulings of the DSB, and shoul d have started speedily with the regulatory
process necessary to modify its WTO-inconsistent measures. 265 In addition, I conclude that Colombia
has sufficient flexibility to modify its indicative prices mechanism and its po rts of entry measure,
including review of its implementing measures by di fferent organs of its Executive Branch, within a
few months. Subsequently, a limited amount of ti me will be necessary for Colombia to procure the
signature of its amending measures by the Presi dent, and their subsequent publication in the Diario
Oficial. Further steps, such as the implementati on of the amended measures in Colombia's
computerized customs administration system and the training of DIAN officials, for the reasons stated
above, do not justify the assessment of a longer reasonabl e period of time. On this basis, I consider
that Colombia can implement the DSB's reco mmendations and rulings by the beginning of
February 2010.

263Panama's submission, paras. 99-101.
264Award of the Arbitrator, US – Gambling (Article 21.3(c)) , para. 41. In particular, the arbitrator was
not persuaded that the mere use of the indefinite article "a" in the phrase "a reasonable period of time" suffices
to establish definitively that an arbitrator is authorized to determine only a single reasonable period of time for
implementation in a dispute. Nor was he persuaded that it is possible to determine two separate reasonable
periods of time in respect of the same measure. (original emphasis)
265As I have noted earlier, any measure of a legislativ e character that Colombia may wish to adopt in
order to amend its customs securities laws, although not strictly required to implement the recommendations and
rulings of the DSB, can be accomplished in the same period of time estimated by Colombia for its regulatory
amendment of the measures at issue (see supra, paras. 85, 86 and 91).

111. Accordingly, I determine that the reasonable period of time for Colombia to implement the
recommendations and rulings of the DSB in this dis pute is eight months and 15 days from the date of
adoption of the Panel Report. The reasonable period of time will thus end on 4 February 2010.

Signed in the original at Geneva this 15th day of September 2009 by:

Giorgio Sacerdoti
Arbitrator