Notice of initiation of an examination procedure concerning an obstacle to trade, within the meaning of Council Regulation (EC) No 3286/94, consisting of trade practices maintained by Colombia in relation to the imports of motor vehicles
Date: 2000-08-18
Institutions: European Commission
Subjects: Colombia, EU Member State, VAT, import, motor car, restriction on competition

C 236/4

EN

Official Journal of the European Communities

18.8.2000

Notice of initiation of an examination procedure concerning an obstacle to trade, within the
meaning of Council Regulation (EC) No 3286/94, consisting of trade practices maintained by
Colombia in relation to the imports of motor vehicles

(2000/C 236/05)

On 7 July 2000 the Commission received a complaint,
pursuant
to Article 4 of Council Regulation (EC) No
3286/94 (1) (hereinafter (cid:145)the Regulation(cid:146)).

Currently, the Colombian law stipulates that the vehicles in
the category up to 1 400 cc manufactured or assembled in
Colombia are subject to VAT rate of 20 % compared with
VAT rate of 35 % for imported cars.

1. Complainant

The complaint is lodged by Volkswagen AG, departments
S(cid:252)damerika/Afrika
Corporate
Government Relations (K-SL), in the interest and on behalf
of Volkswagen AG, Seat SA, Spain and Audi AG, Germany.

Region

(K-SR)

and

Volkswagen AG, Seat SA and Audi AG are Community
enterprises in the sense of Articles 2(6) and 4(1) of the
Regulation.

2. Product

The products in question are motor vehicles designed for
the transport of persons of cubic capacity up to 1 400 cc,
covered by the codes of the Combined Nomenclature (CN)
8703 21 10, 8703 21 19, 8703 22 00 and 8703 31 10.

The examination which the Commission is initiating may
also cover other products in respect of which interested
parties, which make themselves known within the time
limits mentioned below (see section 8), provide evidence
that the alleged practices are applicable in relation to such
products.

3. Subject

The complaint concerns a trade barrier allegedly caused by
the Colombian tax law, notably its VAT regime, which
adversely affects the Community exports of the products
in question to the Colombian market. More specifically,
the Colombian tax law
according to the complainant,
discriminates against
imported motor vehicles of cubic
capacity up to 1 400 cc.

4. Allegation of obstacles to trade

The complainant claims
the General
that,
Colombian Tax Law (Estatuto Tributario) provides for a
distinction between vehicles assembled or manufactured in
Colombia and those manufactured or assembled outside
Colombia for the purposes of the application of the VAT.

since 1996,

(1) Council Regulation (EC) No 3286/94 of 22 December 1994 laying
common
down Community procedures
the
commercial policy in order
Community’s rights under international trade rules,
in particular
those established under the auspices of the World Trade Organi-
sation (OJ L 349, 31.12.1994, p. 71), as last amended by Council
Regulation (EC) No 356/95 (OJ L 41, 23.2.1995, p. 3).

in the
to ensure

field of
the

exercise of

the

Volkswagen AG contends
abovementioned
Colombian practices constitute an obstacle to trade since
the Colombian VAT regime contravenes Article III.2 of the
GATT 1994.

that

the

In conclusion, it appears that Colombia could be in breach
of its obligations under the abovementioned provision of
the GATT 1994. Under such circumstances, there appears
to be prima facie evidence of an obstacle to trade within the
meaning of Article 2.1 of the Regulation.

5. Allegation of adverse trade effects

suffering, and is
The complainant contends
threatened with further, adverse trade effects within the
meaning of Article 2(4) of the Regulation.

that

is

it

The complainant assedrts that the measure at issue forces
the dealers of imported vehicles to sell their products at a
price on average 15 % higher than the one they could
pratise if
they could enjoy the same VAT rate as the
dealers of domestically produced or assembled cars. As a
result of
in
the discriminatory VAT regime,
Colombia of cars produced by the complainant have
decreased considerably.

imports

the private cars market. Moreover,

Volkswagen AG argues that the category of motor vehicles
affected by the discrimination in questionis
the most
important one in Colombia and represents approximately
two-thirds of
the
adverse effects of the challenged measure are not limited
to the category directly concerned, but
the
whole Colombian car market. In fact, exclusion from the
most widespread and important sector makes difficult the
penetration of the market in its entirety.

they affect

Under such circumstances, there appears to be prima facie
evidence of adverse trade effects as defined in Article 2(4) of
the Regulation.

6. Community interest

The principle of national treatment provided for by Article
III of the GATT 1994 is one of the most important and
basic WTO obligations. If practices like the Colombian one
went unchallenged they would constitute an extremely
negative precedent for the respect of WTO provisions.

18.8.2000

EN

Official Journal of the European Communities

C 236/5

the significant adverse trade
the challenged measure appears to have on the
is considered to be in the Community’s

Thereupon, also in view of
effect
Community,
interest to initiate an examination procedure.

it

7. Procedure

decided,

consultation of

the Advisory
Having
after
Committee established by the Regulation,
there is
that
sufficient evidence to justify initiating an examination
procedure for the purpose of considering the legal and
factual
issues involved, and that this is in the interest of
the Community, the Commission has commenced an exam-
ination in accordance with Article 8 of the Regulation.

Interested parties may make themselves known and make
known their views in writing, in particular by addressing the
specific issues raised by the complaint, and by providing
supporting evidence.

Furthermore,
request

the Commission will hear parties who so
in writing when making themselves known,

provided that they are a party primarily concerned by the
result of the procedure.

This notice is published in accordance with Article 8(1)(a) of
the Regulation.

8. Time limit

Any information relating to the matter and any requests for
hearings should be sent in writing to:

European Commission
Directorate-General for Trade
Mr Alistair Stewart, DG Trade E/3
DM 24 (cid:151) 05/77
Rue de la Loi/Wetstraat 200
B-1049 Brussels
Fax (32-2) 295 65 05.

Any such information or request for a hearing should reach
the Commission not later than 30 days following the publi-
cation of this notice.