Despite the efforts mentioned above to consolidate and simplify its tariff rate schedule, Colombia's numerous economic integration agreements have fostered overlapping tariff application. For example, a product may be subject to more than ten different duties depending on whether it comes from a member of the Andean Community, the Latin American Integration Agreement, or the Caribbean Community. Approximately 97 percent of the Colombian Harmonized Tariff Schedule (CHTS) products can be imported without an import license, but import tariffs and VAT still apply. Colombia’s harmonized tariff schedule book lists all applicable import duties.
Although the implementation of the Unified Portal for Foreign Trade (VUCE) has significantly streamlined the paperwork process for imports and exports, Colombia’s bureaucracy still constitutes a barrier to trade for both local and foreign companies. Pilferage in customs warehouses and robberies of trucks persists, but cases have decreased dramatically. Colombian customs can detain shipments indefinitely because of improper tariff schedule classification, incorrect address, or typing errors. When mistakes are made by the exporter or importer, the goods may be refused entry into Colombia and be returned at considerable expense to the exporter or importer. Colombian customs statutes provide for significant fines and penalties for light infringement of procedures and errors in freight forwarding documents by customs agencies (Agencias Aduaneras). U.S. freight forwarders and intermediaries are subject to the same sanctions and penalties as Colombia’s agents and brokers.
Non-Tariff Barriers to Agricultural Trade
Import licenses issued by the Ministry of Commerce, Industry and Tourism (MINCOMERCIO): Most agricultural product import licenses issued by the Ministry of Commerce are issued automatically and are "free". However, there are a number of agricultural products that need pre-approval before the Ministry of Commerce will issue an import permit. These pre-approvals are regulated by the Ministry of Agriculture through the issuance of a sanitary or phytosanitary certificate for imports. For example, if the Ministry of Agriculture (MOA) determines that corn imports are not needed because they may negatively affect domestic prices, it can refuse to issue a phytosanitary certificate and thus the Ministry of Commerce will not issue the import permit. In the case of food products imported for human consumption, it is the Ministry of Social Protection that provides the pre-approval. Most of the agricultural products that need pre-approval are those products included in the price ban system.
Resolution 04 of June 12, 1998, issued by Ministry of Commerce, placed seasoned poultry parts (chicken, turkeys, and other birds) under the “pre-approved” licensing system which requires prior approval of the import license before the product is allowed to be imported into Colombia. Prior to this, seasoned poultry parts were under the “free” import regime, which resulted in automatic issuance of import licenses by Ministry of Commerce. Since 1994, import licenses for raw, unprocessed chicken and turkey parts have been routinely denied.
The Ministry of Social Protection has a zero tolerance salmonella policy which has resulted in a number of U.S. poultry shipments to Colombia to be rejected and destroyed in the past. However, over the past year, INVIMA, the Ministry’s regulatory agency, has implemented a policy to allow mechanically deboned poultry (MDM) products to enter Colombia for further processing even if they test positive for salmonella. MDM imports are sampled and then sealed by INVIMA agents at the port of entry, strictly monitored while in transit, and verified as being processed at an approved pre-designated processing plant. Since this policy has been implemented, no US shipment of MDM poultry products has been rejected. The policy does not currently apply to raw poultry meat other than MDB poultry meat. U.S. exporters have raised concerns that inconsistency and lack of permanency in this policy will lead to changes in policy implementation in the future resulting in rejected shipments.
The MOA’s Absorption Requirement:
To ensure an ample supply of basic grains, the Ministry of Agriculture (MOA) has created a quota system to allow for the import of a limited quantity of grains at zero duty. A condition to import under the quota is the importer must purchase a certain volume of local grain production under a specified absorption mechanism called the ‘Mechanism for Assigning the Quota or MAC”.
Under the MAC the Ministry of Agriculture (MOA) conducts three or four auctions per year to assign the quota to interested buyers. Prior to the auction, the Ministry of Agriculture (MOA) announces the “absorption” ratio of imports-to-local production. This ratio is calculated based upon expected local production and demand. For example, in 2009 the government allowed for the purchase of over 2.0 million tons of yellow corn at a ratio of 6 tons of imported corn for every one ton of local corn purchased. Feed millers, poultry producers and distributors submitted bids at the auction for the volume of imports desired knowing how much local corn they would need to buy. Before any imports could be made under the quota, the importer must show Customs that it purchased the required local production. This system sets a minimum price for local corn at the international price plus the out-of-quota-duty and freight. During periods of low domestic production farmers can distort market prices by requesting a premium knowing that importers need their product to be able to import. The out-of-quota duty is the greater of either 5 percent or the Andean Price Band duty. The CTPA will eliminate the price band system and quota auctions, and simplify the overall import process making it more transparent.
Andean Price Bands: On April 1, 1995, Colombia implemented the common Andean Community price band (variable import duty system). It covers 13 broad product classifications (rice, barley, yellow corn, white corn, soybeans, wheat, crude palm oil, crude soybean oil, white sugar, raw sugar, milk, chicken parts, and pork meat) and 153 additional select commodities that are considered substitutes. In theory, the system covers domestic producers and consumers from volatile world prices by raising import duties when import prices are low and lowering duties when prices are high.
Under the Andean Community price band system, the price band duty rate, or total applied duty rate, is calculated as the basic import duty rate plus the variable duty rate. The Ministry of Trade sets the basic duty rate each December for the following year. The variable duty rate is calculated as the percentage difference between the price band reference price and the floor or ceiling price making up the price band. The Andean Community, using a 60-month rolling average international price based on the period April 1 to March 31, calculates the floor and ceiling prices of the price band. The reference price is the average international price, which is updated every two weeks.
When the reference price falls below the floor price, the variable duty (or surcharge) is added to the basic import duty resulting in a higher applied duty rate. Conversely, when the reference price exceeds the ceiling price, the variable duty is subtracted from the basic duty rate making for a lower applied duty rate. Once the price band duty rate is calculated, the rate is applied to the reference price to obtain a per-ton duty value. That duty value is then applied to the volume of product imported.
The Andean Community price band system lacks transparency and can be manipulated to provide arbitrary levels of import protection. For example, adjustment factors for freight, insurance, and other unspecified costs are not transparent and provide latitude for manipulation of ceiling, floor, and reference prices. In many cases, it is impossible for an exporter to estimate the final import duty.
Often, the appropriate reference price is not used to assess the import duty. For instance, the ceiling and floor prices for chicken parts are based on U.S. whole broiler prices and the reference price is based on U.S. leg quarter prices. This method increases the likelihood that the reference price will fall below the floor price and the additional surcharge will be added to the import duty. For soft wheat, the floor and ceiling prices are based on hard red winter wheat, which tends to result in a higher import duty for soft wheat, since hard wheat is generally more expensive than soft wheat.
The U.S. government considers the application of this system to be inconsistent with Colombia's WTO obligations. Unfortunately, WTO binding import duties are often times higher than the applied price ban duty, making it difficult to argue against the price band system. The CTPA would eliminate the Andean Price Band system for the above-mentioned products and by-products and significantly reduce the bounded tariff level. There will be tariff rate quotas for some sensitive commodities and a period of several years for a gradual reduction in import duties.
Sanitary and Phytosanitary Measures:
Colombia agreed in the CTPA negotiations to lift the BSE-related ban on U.S. beef from cattle of all ages, and some organs (livers, kidneys, and stomachs). In compliance with the CTPA commitments for U.S. beef, the GOC issued decree 3755 of October 27, 2006 establishing the sanitary conditions for imports of U.S. beef and beef products. Simultaneously, Decree 3752 of October 27, 2006, defines the bovine specific risk materials, such as brains, eyes, and the spinal cord.
INVIMA handles sanitary aspects related to processed food trade, including monitoring of domestic beef slaughtering and processing plants. INVIMA is also developing regulations regarding living modified organisms (LMOs) in food products and food ingredients. Non-processed products that are fresh or frozen do not need to be registered with INVIMA, but do need a sanitary permit from the Colombian Agricultural Institute (ICA). ICA is responsible for the issuance of sanitary import permits for animal products, vegetables, fruits, and grains.
The GOC issued law 1255 of November 28, 2008, as a legal framework for preserving Colombia’s poultry industry sanitary conditions. This legislation deals mainly with the local conditions for poultry production and distribution, but Article 17 bans imports of poultry products from countries or zones with non-reportable outbreaks of Avian Influenza and Newcastle disease. It also stipulates a risk assessment to be undertaken by ICA before a resolution is issued to allow resumption of poultry product imports. The USG continues questioning the lack of clarity regarding the way the risk assessment will be conducted and what the approximate timeline will be for import bans to be lifted.
Product Health Registration: All processed retail food items, including products imported in bulk for repackaging for retail use without further processing, must be registered and approved by INVIMA. Food products that are sold to restaurants, institutions, or to processors do not need to be registered with INVIMA, but according to the interpretation given by INVIMA of Decree 4764 of December 30, 2005, the importers of such products have to fulfill some bureaucratic requirements. INVIMA charges a registration fee ranging from USD 676 to USD 1,670 per product. According to Decree 3075 of 1997, product registration is not required for:
• Products that are not subject to any processing, such as grains, fruits, fresh vegetable, honey, etc.
• Products of animal origin that are not subject to any processing (however each shipment of meat and meat products must be approved by ICA in order to be imported)
• Products used as raw materials by the food industry or Hotels, Restaurants and Institutions sector in food preparation.
A processed product is defined by the government as having been subjected to processing that resulted in a change in its internal structure. INVIMA registration of processed foods requires: (1) a written document from the manufacturer stating that it manufactures the product, and (2) a certificate of free sale stating that the products are approved for human consumption in the United States. This certificate needs to be issued by a U.S. government (state, local, or federal) health authority. Although not strictly required, INVIMA registration is facilitated if a description of the manufacturing process and a list of the ingredients is submitted, including any additives, preservatives, and dyes. Since Colombia implemented The Hague Convention of October 5, 1961 with Law 455 of August 4, 1998, facilitating import documentation, the above listed documents must carry an “apostille” stamp. The “apostille” stamp fee amounts to USD 20 each and it is produced by different authorities in each State, i.e. a Notary or a State Secretary or Under Secretary. This procedure replaced the notarization by the Colombian Embassy or a Consulate in the United States and by the Ministry of Foreign Affairs in Bogotá. A translator approved by the Ministry of Foreign Affairs must translate these documents into Spanish. INVIMA registration generally takes three working days to complete (although this can be much longer in some cases). The registration process can be done through INVIMA’s website . Tariff rates for registration and other services by INVIMA can also be checked at this site.
After analyzing the documents provided by the importer, INVIMA may request additional information. Some importers complain that this procedure may result in additional requirements that become non-tariff barriers to trade. INVIMA may take product samples from the shelf to conduct laboratory tests.
Registration is valid for ten years but only for the applicant (exporter or importer) and the manufacturer specified in it. Whenever the U.S. exporter wants to change its Colombian importer, there are two possibilities: (a) If the U.S. exporter is the applicant for the INVIMA registration, he must submit an application for registration modification to INVIMA (about USD 52); (b) If the Colombian importer is the applicant, the U.S. exporter must initiate a new registration process, specifying the new importer(s). Afterwards, the exporter may change his importer(s) whenever he deems it advisable. The U.S. exporter must apply through his legal representative in Colombia.
INVIMA registration is valid only for the specifications (e.g., product description and size) mentioned in the registration. If another presentation of the same product is to be imported, the registering company needs to inform INVIMA in writing of the new product.
Sanitary Permit: Products used as raw materials by the food industry sector in food preparation do not need an INVIMA registration, but they do need a sanitary permit from ICA and comply with Colombian labeling regulations. ICA is responsible for the issuance of import sanitary permits for animal products, vegetables, fruits, grains, pet food, dairy products, and agricultural inputs, including seeds. Genetically modified organisms (GMOs) for plantings have to be approved by the National Technical Committee (CTN-Bio) in which ICA is a member. The ICA permit details the zoo-sanitary or phytosanitary (SPS) import requirements for the specific product.
The Colombian importer must first obtain the import permit from ICA, before requesting an import license from the Ministry of Commerce, Industry and Tourism. ICA resolution 414 of 2002 requires that the sanitary export certificate issued by the exporting country sanitary authority be dated later than ICA’s import permit. For ICA approval, the product must: (1) come from a USDA inspected facility, (2) be free of disease, (3) be inspected by USDA prior to its shipment and be accompanied by a USDA health export certificate, and (4) be inspected by an ICA veterinarian upon arrival in Colombia.
Colombian importers must provide a sanitary import permit to the U.S. exporter for submission to the USDA, before products are shipped. USDA will then issue a sanitary export certificate referencing the listed requirements in ICA's import permit. No shipments should be loaded or transported without the submission of the sanitary permit. In the case of meat and meat products, the USDA Food Safety and Inspection Service (FSIS) maintain an inventory of current sanitary requirements for different importing countries. Both FSIS and USDA’s Animal and Plant Health Inspection Service (APHIS) place Colombian sanitary requirements on their respective web pages.
Additional Sanitary Registration Requirements: U.S. exporters should be aware that sanitary registration must also be obtained for pharmaceuticals, cosmetics, and household insecticides and similar products. The registration with INVIMA must be obtained before exporting the products to Colombia and the procedure takes between three to six months. Colombia requires sanitary registration for both locally manufactured and imported products. For more information contact: INVIMA, Deputy Directorate for Licenses and Registry, Carrera 68D # 17-21, Bogotá DC, Colombia, Tel. (57-1) 294-8700, Fax (57-1) 294-8700 Ext. 3930,
Pre-Shipment Certification: In 1999, the Colombian Government eliminated requirements for the prior inspection and certification of imported food products at loading ports as part of an effort to ease import procedures.