Unfair trade practices carried out by producing or exporting companies or countries are dumping and subsidies.
Customs duty applied to imports of products that restores the conditions of competition distorted by dumping (Decree 1750 of 2015, Article 1).
The Directorate of Foreign Trade of Colombia may order the collection of “anti-dumping” duties on the importation of any product subject to “dumping”, when it has been determined that this particular product causes or threatens to cause significant damage to national production or significantly delays the establishment of a branch of production in Colombia.
The duty amount is usually expressed as an ad-valorem percentage or by establishing a base price (Decree 1750 of 2015, Article 42).
The antidumping duty amount is set so that its amount is sufficient to eliminate the significant damage, the threat of significant damage or the significant delay in the establishment of a branch of production.
You therefore have to take the following into account:
1. The price of the imported product on the national market versus the price of the national product
2. The prices at which the product is currently being sold on the national market
3. The effect of the measures on the national market
The application of an antidumping duty cannot exceed the identified dumping margin (Decree 1750 of 2015, Article 43)
An antidumping measure may remain in force for a maximum of five (5) years, unless the reasons that originated it persist. The Colombian National Tax and Customs Directorate (DIAN) applies antidumping measures in accordance with the legal provisions and the resolution that imposes the rights, as well as the rules of collection, constitution of guarantees, procedures and tariff-matters related.
Under no circumstance should the carried out investigations impede the introduction of the merchandise on the national territory.
No product imported from the same country may be subject simultaneously to antidumping and countervailing duties, intended to remedy the same issue resulting from dumping or subsidies (Decree 1750 of 2015, Article 49).
In order to prevent damage being caused during the term of the investigation, the Directorate of Foreign Trade may apply provisional duties if it reaches the preliminary conclusion that there may very probably be dumping on the particular product that causes damage to the national industry. The Directorate carries out said action through a direct resolution that can only be directly revoked and after the investigated party exercises its defense, through the completion of questionnaires that are sent for this purpose.
Provisional duties are applied for four months, unless expressly requested, in which case they are applied for a period of six months. After an examination, when a duty below the margin of dumping is sufficient to eliminate the damage, the investigating authority may apply provisional duties for six months, or at the request of the party, for nine months.
The amount of provisional antidumping duties is indicated in the Resolution that fixes and applies them to any company importing this particular product causing damage to a branch of production in Colombia.
The Resolution is published in the Diario Oficial and communicated according to the format established in the first paragraph of Article 28 of Decree 1750 of 2015. Copy of this Resolution is sent to the National Tax and Customs Directorate (Decree 1750 of 2015, Article 44).
1. Evaluation of the complaint credibility to justify opening an investigation
2. Preliminary determination
3. Presentation of the final report
4. Essential facts
5. Conclusion of the investigation
1. Decree 1750 of September 1, 2015
2. Decree 2550 of July 15, 2010
3. Decree 991 of 1998
4. Decision 283 of March 21, 1991
5. Decision 456 of May 4, 1999
6. Internal Rules of the Commercial Practices Committee
Once it is evident that unfair practice causes or threatens to cause damage to national production or generates a significant delay in the establishment of any business sector in Colombia, the affected production sector can file a request for investigation with the Directorate of Foreign Trade (DCE), competent authority in those matters.
1. Citric Acid and Sodium Citrate
2. Low carbon steel wire rod
3. Polished or galvanized link chains (fixe-year re-examination)
4. Non-stainless tubes for casing and tubing
5. Galvanized smooth patches
6. High pressure decorative laminates
7. Radial and conventional tires for buses or trucks
8. Shovels, pickaxes and bars
9. Plasticizer DNOP
10. Wooden boards
11. Crockery and loose pieces of crockery and porcelain (fixe-year re-examination)
12. Extruded Aluminum Profiles
13. Flexible PVC films and rigid PVC films
It consists of a temporary import limitation, which can take the form of a tariff or a quantitative restriction and be applied to prevent or repair serious damage or the threat of serious damage to a sector of national production. It can also give a newly rising national production sector extra time to adjust to the conditions of competition with the international market. These measures must be appropriate to facilitate the economic adjustment of the industry, in such a way that economic and social benefits are higher than the costs derived from the measure.
A safeguard is adopted when it has been determined that imports of a certain product have increased by such amount and are carried out under conditions that cause or threaten to cause serious damage to the domestic industry that produces similar or directly competing products.
A. Investigation for the application of safeguard measures under Decree 152 of 1998
B. Investigation for the application of safeguard measures under Decree 1407 of 1999
C. Investigation for the application of bilateral safeguard measures under Decree 1820 of 2010
1. Decree 152 of January 22, 1998
2. Decree 1407 of July 28, 1999
3. Decision 452 of April 12, 1999
4. Decision 563 of June 25, 2003, article 97
1. Reception of complaint
2. Evaluation of the complaint credibility to justify opening an investigation
3. Investigation
4. Adoption of the final decision
There are two types of projects: unconventional energy sources projects (FNCE), according to Law 1715 of 2015, and environmentally sustainable projects that involve reducing the impact on natural resources.
Resolution 631 of 2015 regulates parameters and maximum allowed quantities of residual wastewater processing.
Decree 1076 of 2015, that includes environmental regulations, also regulates projects that require environmental licenses. Depending on the case, these licenses are processed before the National Environmental Licensing Authority (ANLA) or the Regional Autonomous Corporations.
A market study in conducted in order to determine the market potential of a product, a region or a sector, identify its competitors and the global level of competitiveness, and set technical basis for the design of a business plan.
A regional internationalization plan determines the ability to attract national or foreign investment through the analysis of the tax structure, land management, socio-economic studies and its concordance with development plans. Likewise, the productive and competitive potential of local goods and services is being determined.
Trade missions in Colombia are very useful to identify a potential market and make B2B contacts with potential clients.
A business model is a set of variables that define the way a company decides to approach and develop an international market, in order to create, deliver and capture value.
One country can have multiple customer segments; you would then have to approach each of them with a different value proposition. In order to do so, you must work on getting to know each segment, their needs and expectations. Likewise, you will need to benchmark your competition and understand the key differences between their offer and yours.
Once you have all of the below information, you will have to determine the kind of relationship you wish to build with your potential clients, as well as the channels, activities, resources and key partners that will help you deliver your value proposition to your customers.
In addition, it is important to run a cost efficiency analysis and create new ways of generating recurring incomes, allowing the company to be sustainable and profitable.
Finally, do not forget that business models have an expiration date; and if you are not in constant re-assessment and evolution, you will soon be replaced by dynamic competitors.
Exportation is the process through which a company sells goods or services to a customer abroad. This term has fallen short, being limited in many cases to the logistic process of shipping containers and reporting revenues. However, globalization imposes more challenges and it is no longer enough to ensure the arrival of products at the appropriate times and under predetermined conditions. More effort is now required to be successful on international markets.
This is how a broader concept emerges, implying greater commitment from companies: international markets development. This term goes beyond potential clients’ identification and commercial transactions’ closing. Internationalization requires:
– In-depth business model environment analysis
– Understanding of potential clients’ needs and habits
– Identification of key differences between existing offers and how to differentiate from a particular business model
… Allowing the company to penetrate, grow and survive on an international scale.
Internationalization depends on the corporate strategy and the firm’s growth expectations. Some companies are designed to offer global products and services while others only seek to sell production surpluses abroad.
If your company is no longer growing on a local scale, your profitability is decreasing and your competitors are leaving you behind, but you have production capacity left, internationalization is your best option.
Internationalization being a broader concept than export, you need to think about the best way to get your product / service to a foreign market. In order to do so, you have not only to develop or adapt a product / service to the needs of international clients, but to think about the most suitable location to develop your operations, identify key partners, access new resources and improve cost-effectiveness. Taking advantage of opportunities on external markets will make your company more competitive and profitable.
According to Law 1004 of 2005, a Free Trade Zone is defined as a geographical area delimited within the national territory, where industrial activities of goods and services or commercial activities take place, under a special regulation on tax, customs and foreign trade.
Tax benefits
– Single tax rate on taxable income of 20%, for industrial users of goods or services
– Remittance tax exemption on founds transferred abroad
– Exemption from sales tax of raw materials, parts of, supplies and finished goods sold from the National Territory to industrial users of goods or services of the Free Zone or between Free Trade Zone users, if it can be proven that those parts are necessary to the development of the company’s activity
– Dividends are exempt of income tax
Foreign Trade Benefits
– Capital assets or goods storage over indefinite period of time without tariff or customs duties
– Tariff exemption on foreign capital assets and their spare parts used for the development of the company’s work
– Free access to the national market for goods produced within the Free Trade Zone
– Merchandise permanently leaving the National Customs Territory to enter the Free Trade Zone are considered exports
– National suppliers receive subsidies to export to Free Zones
– Duties are only being charged on the foreign part of the good when being sold on the National Customs Territory
Permanent Free Trade Zone
A Permanent Free Zone is a defined area within which several companies (users) develop their industrial, commercial or tertiary activities. It is very similar to an industrial park.
Single Company Free Trade Zone or Permanent Special Free Trade Zone
The Single Company Free Trade Zone regime enables the declaration of a FTZ in favor of a specific new company, in any location within the country, for the development of an investment project with high economic and social impact. It can – amongst others – undertake the following activities:
– Goods
– Services
– Health services
– Agribusiness projects
– Ports
Transitory Free Zone
A Transitory Free Zone is authorized for the organization of fairs, exhibitions, congresses, seminars of international character with importance for the country’s economy and foreign trade.
There currently are 101 Free Zones in Colombia.
1. Law 1819 of December 29, 2016
2. Decree 2147 of December 23, 2016
3. Law 1004 of December 30, 2005
4. Decree 2685 of December 28, 1999 and its amendments
5. Decree 383 of February 12, 2007
6. Decree 4051 of October 23, 2007
7. Resolution 01 of December 3, 2007, issued by the Intersectoral Free Zones Commission
8. Resolution 5532 of June 24, 2008 of the DIAN
Operator-User
Legal entity authorized to direct, manage, supervise, promote and develop one or more Free Zones, as well as to qualify their users. In order to do so, the Operator-User will monitor the goods under customs control and authorize the entry and exit operations thereof, in accordance with the National Tax and Customs Directorate (DIAN).
Industrial Goods User
Legal entity installed exclusively in one or several Free Zones, authorized to produce, transform or assemble goods, through the processing of raw materials or semi-finished products.
Industrial Services User
Legal entity authorized to develop the following activities in one or several Free Zones:
– Logistics, handling, distribution, packaging, repackaging, labeling or classification
– Telecommunications; information technology systems for data capture, processing, storage and transmission
– Scientific and technological research
– Health assistance
– Technical support, maintenance and repair of equipment, ships, aircraft or machinery
– Audit, administration, brokerage, consulting
Commercial User
Legal entity authorized to develop activities of marketing, sales, storage or conservation of goods, in one or several Free Zones.
Services Providers
Companies that develop surveillance and maintenance services, nursery, coffee shops, financial institutions, restaurants, training centers, medical care, transportation of employees, and other services that are supporting the Free Zone operation. These companies do not get tax concessions, neither customs nor foreign trade benefits.
Industrial Goods Users and Industrial Services Users must be new legal entities and may simultaneously have both qualifications.
