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Colombia Again Temporarily Extends Compound Tariff System for Imports of Apparel and Footwear

The Colombian government has again temporarily extended, through 1 November 2016, its compound tariff system on apparel, footwear and textile made-ups. Under this system, apparel valued at or below US$10 per kilogramme is subject to a 10 percent ad valorem duty and a specific duty of US$5 per gross kilogramme, while apparel valued at more than US$10/kg is subject to a 10 percent ad valorem duty and a specific duty of US$3/kg. In the case of footwear, shoes valued at or below US$7 per pair are subject to a 10 percent ad valorem duty and a specific duty of US$5 per pair, while shoes valued at more than US$7 per pair face a 10 percent ad valorem duty and a specific duty of only US$1.75 per pair. Imports under heading 6406 (parts of footwear) are exempt from the mixed duty system, except for tariff line 6406.10.0000 (footwear uppers).

The WTO Appellate Body confirmed on 7 June that this compound tariff system results in certain circumstances in duties in excess of the bound rates set forth in Colombia’s schedule of concessions. It also ruled that Colombia failed to demonstrate that its compound tariff is a measure (i) necessary to protect public morals within the meaning of Article XX(a) of the General Agreement on Tariffs and Trade or (ii) necessary to secure compliance with Article 323 of Colombia’s Criminal Code within the meaning of Article XX(d) of the GATT. In light of this ruling, the Colombian government is currently assessing the eventual modification or replacement of the offending measures in a way that does not undermine its on-going fight against money laundering.

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