Indicative Prices and Restrictions on Ports of Entry

Status: Concluded

Respondent: Colombia

Complainant(s): Panama,

Third Parties: Ecuador, Guatemala, Honduras, United States, China, European Communities, Turkey, India,

Dispute Number: DS366

Link to Dispute Site:

Complaint by Panama.

On 12 July 2007, Panama requested consultations with Colombia on (i) indicative prices applicable to specific goods and (ii) restrictions on ports of entry for certain goods.

Panama's request concerning indicative prices relates to a series of resolutions promulgated in June 2007 which establish a mechanism of indicative prices. More specifically, Colombia is alleged by Panama to require that importers of specific goods pay customs duties and other duties or charges and taxes based on the indicative prices, rather than on the valuation methods set out in Article VII of the GATT 1994 and the Agreement on Customs Valuation.

Moreover, Panama alleges that the tax base for Colombia's sales tax on imported products is based on the indicative price whereas the tax base for the sales tax on the like domestic products is based on the transaction value. According to Panama, the difference in tax bases therefore results in the imposition of a sales tax burden on imported products higher than that borne by the domestic like products.

Panama claims that imposition of indicative prices in the above-mentioned circumstances results in possible inconsistencies with Articles 1-7 and 13 of the Agreement on Customs Valuation as well as Article VII, Article II:1(a) and (b). and Article III:2 (or III:4) of the GATT 1994.

Panama further alleges that Colombia has not published the methodology for the establishment of the indicative prices. Panama considers that this is inconsistent with Colombia's obligations under Article X:1 of the GATT 1994.

Finally, Colombia's administration of its customs laws and the indicative prices is alleged to be conducted in a manner that is inconsistent with Colombia's obligations under Article X:3(a) of the GATT 1994.

In relation to restrictions on ports of entry, Panama's request for consultations is directed at a resolution of June 2007 which provides that all goods classifiable in Chapters 50-64 of the Customs Tariff coming from the Free Zone of Colon in Panama shall be entered and imported exclusively through the jurisdictions of the Special Customs Administration of Bogota and the Barranquilla Customs Office. This requirement does not apply to goods arriving directly from third countries. the regulation provides that with respect to these goods, the authorization of the customs transit procedure will not be appropriate. Furthermore, the import declaration applicable to these imports shall be presented prior to their arrival in the national customs territory but not more than 15 days in advance. If an importer does not comply with these requirements, it is subject to special procedures under Colombia's Customs Code, including the detention of goods.

Panama considers that these restrictions are inconsistent with Colombia's obligations pursuant to Articles XI:1, XIII:1, V:2, V:6 and I:1 of the GATT 1994.

On 24 July 2007, Honduras requested to join the consultations. On 25 July 2007, Guatemala requested to join the consultations. On 27 July 2007, Chinese Taipei requested to join the consultations. Subsequently, Colombia informed the DSB that it had accepted the requests of Guatemala, Honduras and Chinese Taipei to join the consultations.

On 14 September 2007, Panama requested the establishment of a panel. At its meeting on 28 September 2007, the DSB deferred the establishment of a panel. At its meeting on 22 October 2007, the DSB established a panel. Ecuador, the European Communities, Guatemala, Honduras, India, Chinese Taipei and the United States reserved their third-party rights. Subsequently, China and Turkey reserved their third-party rights. On 8 February 2008, the Panel was composed.

On 9 September 2008, the Chairman of the Panel informed the DSB that the Panel would not be able to complete its work within six months and that the Panel expects to issue its final report to the parties early in 2009.

Panel Proceedings
Brief Date Brief Description
05/22/2008 Third-Party Oral Statement of the United States (pdf)