1. SOME TRADE PROGRAMS AND TRADE
AGREEMENTS WITH PREFERENTIAL
ORIGIN
By
ALFREDO MORENO DAVILA
www.customs-trade.com
Jan. 2014

2. SOME TRADE PROGRAMS

3. Purpose and Scope
Some Trade Programs for your consideration:
– Temporary Import regime
– Customs Categories for Large Importers
(“UAP”) and for Large Exporters (ALTEX)
– Free Trade Zone in the company´s facility
– Inward Duty Relief (“Plan Vallejo”)
Trade agreements with preferential origin
January 14, 2014

4. Temporary Import Regime
BENEFITS:
Short term temporary import regime.
Possibility to import certain goods with no
customs charges (for a period up to 9
months).
Long term temporary import regime.
Possibility to import certain capital goods and
their spare parts with deferral of the customs
charges (customs duties and VAT) for a period
up to 5 years.
January 14, 2014

5. Short Term Temporary Import
Regime
Some specifics:
– It allows the possibility of importing goods up to 6
months extended up to 9 months without having to
pay import charges (duties and VAT
– However, those import charges should be liquidated
in pesos in the import declaration at the time of
entry.
– The law requires to establish a guarantee from an
insurance company for the value of the import
charges.
– Term: 6 months extended up to 9 months.
– Lists of goods: In the Customs Statute.
January 14, 2014

6. Long Term Temporary Import
Regime
Some specifics:
– It is a special form of entry/regime for goods.
– It accrues import charges (duties and VAT) at
the time of entry and they should be paid in
biannual installments according to the number
of quotas indicated in the import declaration.
– Those import charges should be liquidated in
the import declaration in USD dollars and the
corresponding quota should be paid in pesos
at the exchange rate of the due date.
AMD January 14, 2014

7. Long Term Temporary Import
Regime
Some specifics (cont.):
– A guarantee from an insurance company must be
obtained for the 150% of value of the import
charges.
– Term: Up to 5 years (more years requires
previous authorizations by Customs)
– Lists of goods in the Customs Statute
– Reparation or replacements are allowed.
AMD January 14, 2014

8. Customs Categories for Large Importers
and for large exporters
(“UAP” and “ALTEX”)
MAIN BENEFITS FOR UAP:
1. No customs inspections at the entry
2. 30 day deferral to pay import charges liquidated in
import declarations reported within a specific month.
Imports made in April, the duties and VAT shall be paid in
May.
3. Possibility to have customs bonded warehouses for
processing.
4. Guarantee required by DIAN would cover any future

9. Customs Categories for Large Importers
and for large Exporters
(“UAP” and “ALTEX”)
REQUIREMENTS ( for provisional UAP):
1.To demonstrate future importation goods for a
minimum value of FOB USD 5 million (USD 3
million for high tax contributors)
2.To have a net worth of COL. $ 1000 million
3.To demonstrate that the company is a subsidiary
of a foreign company
January 14, 2014

10. Customs Categories for Large Importers
and Exporters (“UAP” and “ALTEX”)
MAIN BENEFITS FOR ALTEX:
1. No customs inspections at the entry except for the
cases in which the customs consider otherwise
2. Possibility to have customs bonded warehouses for
processing.
3. Guarantee required by DIAN would cover any future
custom guarantee requirements except for seizures
and forfeitures.
4. Possibility to make partial loads with just one global
shipment authorization.
January 14, 2014

11. Customs Categories for Large Importers
and Exporters (“UAP” and “ALTEX”)
MAIN REQUIREMENTS ( for ALTEX):
1.To demonstrate exports for a minimum value of
FOB USD 2 million; and that exports represent no
less than 30% of total sales within a period of 12
months before the date of the ALTEX request. OR
2.To demonstrate exports for a value of USD 21
million in the same period indicated above.
January 14, 2014

12. Trade Programs - Free Trade Zones
• Geographic areas designated by the government for
the purpose of promoting industrialization of goods
and services, new investments and employment
generation.
• How to have access: by obtaining the qualification of
industrial free trade zone user (of goods and/or
services).
• Income taxes benefit: Reduction from 33% to 15%. Of
the applicable income tax corporate rate.
• Custom benefits :
– From the rest of the world to a FTZ ( no importation)
– From the rest of the national territory to a FTZ
(exportation)
– From a FTZ to the rest of national territory
importation)
January 14, 2014

13. Trade Programs - Free Trade Zones
• The Customs Statute allow companies to have their
own FTZ at their facilities.
• Main Requirements:
– New investment for a value of USD 44.3 million
approx.
– 150 new direct job positions
– Full compliance with current laws (enviromental,
labour, municipal, customs, tax, etc).
– Submission of a detailed and complex project to the
Government.
– It may take about 1 year for approval.

14. Inward Duty Relief – Plan Vallejo
•This is a sort of mutual benefit agreement with the
Colombian Customs DIAN.
•On the one hand, the company will be benefited with
no customs charges (customs duties and VAT) at the
entry of raw materials and supplies or it will be
benefited with VAT deferral at the entry of certain
capital goods.
•On the other hand, the customs will demand full
transformation of the raw materials into finished goods
to be exported to third countries. As to the import of
certain capital goods, the customs will require the
company to export 1.5 times of the FOB value of those
capital goods.

15. TRADE AGREEMENTS WITH
PREFERENTIAL ORIGIN

16. TRADE AGREEMENTS WITH
PREFERENTIAL ORIGIN

17. Trade Agreements with Preferential
Origin
• Preferential origin determines whether goods are entitled to
special trade benefits under a trade agreement
• Trade agreements come in various forms: multilateral,
bilateral, and unilateral
– ALADI
– CAN (Ecuador, Bolivia, Peru and Colombia)
– FTA México
– FTA Chile
– FTA CAN-MERCOSUR
– FTA Salvador, Honduras, Guatemala
– FTA EFTA Countries (Iceland, Norway, Swiss
Confederation and Liechtenstein).
– FTA USA,
– FTA EUROPEAN UNION,
– FTA Canada,
January 14, 2014
–

18. Trade Agreements, Cont’d
As a general rule, to claim a preference under a trade
agreement:
• Goods must be eligible for preference under the
agreements.
• They must satisfy the relevant rule of origin.
(Agreements specify criteria that must be satisfied so
that products are eligible for preferential treatment.
These criteria specify the working or processing that
must be carried out by the manufacturers. When
these rules of origin are complied with, the resultant
products acquire “originating status” and this
enables them to benefit from preferential treatment
on export or import.)
January 14, 2014

19. Trade Agreements, Cont’d
As a general rule, to claim a preference under
a trade agreement:
• They must normally be transported directly from the
export country to the import market.
• They must be accompanied by documentary
evidence of origin such as a Certificate of Origin.
However, each Agreement has its own terms.
January 14, 2014

20. ALFREDO MORENO DÁVILA
Abogado LL.M
U. Andes - U. Ottawa - U Carleton
Aduanas y Comercio Internacional
alfredomorenodavila@customs-trade.com
www.customs-trade.com
January 14, 2014