CONTENTS

Chemexcil Activities ChemexcilWorkshop on IGST/ Un-utilized ITC refund on exports And AEO (Certification And Documentation) at Radisson Hotel, Bangalore on 12/07/2018 Brief report on Interactive session with the Commissioner of Customs (Exports), Air Cargo Complex, Mumbai on “Third Refund Fortnight from 16th July, 2018 to 30th July, 2018 to clear pending refunds” &“Authorised Economic Operator” on 24/07/2018 at Hotel Marine Plaza, Mumbai Brief report on Seminar on "Trade Finance & Forex Risk Management" in association with Kotak Mahindra bank on 27/07/2018 in Mumbai. Exim Updates REACH - REIMBURSEMENT OF 50% OF ECHA FEES INCURRED TO MEMBERS FOR REGISTRATION OF THEIR SUBSTANCES UNDER EU REACH DURING THE 3RD DEADLINE OF REGISTRATION I.E. 31ST MAY 2018 GST - CBIC Note on Simplified Returns and Return Formats (July 2018) DGFT - Amendment of Policy Conditions of Urea under Chapter 31 of the ITC (HS) 2017, Schedule - I (Import Policy) Non-tariff Measures applied by the countries of LAC region GST - Notifications pursuant to recommendations of 28th GST Council Meeting held on 21/07/2018 ADD Initiation of the Review by Korea Trade Commission (KTC) on the Need for the Continued Imposition of the Anti-dumping Duty on Ethyl Acetate originating from India IGST Refunds - Shipping Bill Wise IGST Refund Status at JNCH as on 16.07.2018 Imp - Details of IGST Refund Help Desk at FIEO Mumbai and Ahmedabad Office V. Imp - Recommendations of 28th GST Council Meeting held on 21/07/2018 Analysis with the view to identify and recommend WTO compliant exports promotion initiatives - reg IGST - Refunds Clarification in case of SB003 errors Extension of date in SB005 & other cases using officer Interface for rectification of errors till 30/06/2018 V.Imp- Inviting Pre-Budget Proposals for the Year 2019-20 JNCH - Monitoring of realisation of export proceeds on shipping bills on which drawback has been claimed & disbursed JNCH - Revised instructions for registration/ change in AD Code and bank account details (for PFMS) From Chairmans Desk - Information on new products and new markets being considered for exports by the members REIMBURSEMENT OF 50% OF ECHA FEES INCURRED TO MEMBERS FOR REGISTRATION OF THEIR SUBSTANCES UNDER EU REACH DURING THE 3RD DEADLINE OF REGISTRATION I.E. 31ST MAY 2018 DGFT Clarification on acceptance of any copy of Shipping Bill in lieu of EP copy of Shipping Bill for grant of EODC of Advance Authorisation SCOMET - Issuance of export authorisation/license by DGFT (Hqrs.) for export of SCOMET items DCPC - Twelve Chemicals identified for examination for making BIS standards mandatory DGFT - Introduction of new Para 3.24 in the Chapter 3 of the HBP 2015-20 SCOMET -Amendment in Appendix 3 (SCOMET Items) to Schedule-2 of ITC(HS) Classification of Export and Import Items, 2018 IGST Refunds - Shipping Bill Wise IGST Refund Status at JNCH as on 02.07.2018 / JNCH Scroll No. 6546 & Scroll No. 6569 ADD - Definitive Anti-Dumping Duty by European Commission on Imports of Oxalic Acid originating in India & PRC APTA Tariff concessions on import of goods of the description specified in column (3) of the Table hereto annexed and falling under the Chapter. Amendment in the Rules of Determination of Origin of Goods under the Asia-Pacific Trade Agreement. News & Articles Commerce Minister Suresh Prabhu says it is a misconception that India subsidise exports Re-Import of Exported Goods EXPORT STRATEGY-COLOMBIA

Chemexcil Workshop on IGST/ Un-utilized ITC refund on exports And AEO (Certification And Documentation) at Radisson Hotel, Bangalore on 12/07/2018

Shri Satish Wagh, Chairman,Chemexcil welcoming Smt Priya Patil, Deputy Commissioner, AP & ACC

A Sensitization Workshop on IGST/Un-utilized Refunds and Authorized Economic Operators (AEO) was organized on July 12, 2018 at Bangalore. Shri. Satish Wagh, Chairman, Chemexcil, welcomed the participants and two senior customs officials MrsPriyaPatil, Deputy Commissioner, AP & ACC and MrShafeeq, Assistant Commissioner, Bangalore East GST Commissionerate

To guide the exporters regarding the procedure and process of the IGST/ ITC refund, sensitize them to avoid hassles while applying for the refund and take appropriate measures to rectify the errors, the council had organized a "Workshop on Refund of IGST/Un-utilised ITC for Exporters" on 12th June 2018 at Hotel Radisson Hotel, Bangalore. The Council had invited Mrs Priya Patil, Deputy Commissioner and MrShafeeq, Assistant Commissioner. From the council side Shri Satish Wagh- Chairman, Shri S.G Bharadi-ED and other Officers/ staff of Chemexcil attended the Workshop. Highlights of the workshop Shri Wagh welcomed the esteemed participants and opined that the timing of the workshop was apt since Government has organized refund drive fortnight. He urged the members to make best use of this opportunity to clear their pending refunds. Smt Priya Patil, Assistant Commissioner and Shri Shafeeq, Assistant Commissioner, briefed regarding exporters who have mentioned IGST in 3.1(a) of GSTR-3B, She informed that in such cases the details are being sent to GSTN who will subsequently transmit to Customs EDI for processing. Exporters will have to later on submit a certificate from Chartered Accountant before 31st October, 2018 to the DC(IGST), at the port of export to the effect that there is no discrepancy between the IGST amount refunded on exports and the actual IGST amount paid on exports of goods for the period July 2017 to March 2018. Further, SmtPriyaPatil added that in cases where there is a short payment of IGST proof of payment shall be submitted to Assistant/Deputy Commissioner of Customs in charge of IGST at Customs. Later on they will submit a certificate from Chartered Accountant before 31st October, 2018 to the DC(IGST), Customs. She also informed that other errors like SB003, SB005 & SB006 are also being handled now during the drive. Replying to queries on short payment, supplementary claims and merchant exporter Notification, Smt Priya Patil advised that these are new queries and will have to be taken up with CBIC for final resolution. She also advised the council to send such representations with details for examination. Shri Shafeeq explained the entire procedure and process in detail and covered topics like Categories of Supply under GST, Zero rated supply, Pre-requisites for refunds, Returns and Refund Applications, Refund of un-utilised ITC, Refund of IGST Paid on Exports, Refund under 0.1% merchant exporter supply etc..

Calling AEO a safety programme, Mrs Priya Patil exhorted all those engaged in international business to get AEO certified to endure in the competitive global trade environment. Almost 70- 80 countries have already joined AEO.She cautioned while expressing concerns over very few AEOs in the country in comparison with China and European Union. Mrs Priya Patil explained in detail the following benefits of AEO: Inclusion of Direct Port Delivery (DPD) of imports to ensure just-in-time inventory management by manufacturerclearance from wharf to warehouse; Inclusion of Direct Port Entry (DPE) for factory stuffed container meant for export by AEOs; Provision of deferred payment of duties – delinking duty payment and customs clearance; Mutual Recognition Agreements with other Customs Administration; Faster disbursal of drawback amount; Fast tracking of refunds and adjudications; Acceptance of self-certified copies of FTA/PTA origin related or any other certificates required for clearance; Paperless declarations with no supporting documents and Recognition by Participating Government Agencies (PGAs) and other stakeholders n Government of India has introduced Authorized Economic Operators (AEO) scheme as part of its obligation to World Customs Organization under the framework of Standards to Secure and Facilitate global trade (SAFE). The scheme envisages various benefits to different categories of economic operators. The intention is to give AEO certified operators preferential treatment in terms of lesser customs examination, relaxed procedural requirements etc. Authorized Economic Operators include inter alia manufacturers, importers, exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses and distributors. Any economic operator such as manufacturer, importer, exporter, logistics provider and CHA can apply for authorization, provided they fulfill and comply with certain provisions. The Workshop got excellent response with more than 38 Member Exporters. The participants asked several queries during the Workshop which were answered satisfactorily by the eminent panelists

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Brief report on Interactive session with the Commissioner of Customs (Exports), Air Cargo Complex, Mumbai on “Third Refund Fortnight from 16th July, 2018 to 30th July, 2018 to clear pending refunds” &“Authorised Economic Operator” on 24/07/2018 at Hotel Marine Plaza, Mumbai

Delays in IGST refunds/ un-utilised ITC on exports due to inadvertent errors etc has been a cause of concern amongst the exporters. As a service to the member-exporters, the council had organized an Interactive session with the Commissioner of Customs (Exports), Air Cargo Complex, Mumbai on “Third Refund Fortnight from 16th July, 2018 to 30th July, 2018 & “Authorised Economic Operator” Program.

The objective of this session was to create awareness about the “Third Refund Fortnight from 16th July, 2018 to 30th July, 2018 to clear pending refunds” & also make the trade aware of benefits of the “Authorised Economic Operator” program.

The seminar was graced by following:

Customs Officers
1. Shri S. Anantha Krishnan, Commissioner of Customs (Exports), Air Cargo Complex Mumbai
2. Shri Tapan Kumar, Joint Commissioner , Air Cargo Complex Mumbai
3. Shri Jaideep Dubey, Assistant Commissioner of Customs, Drawback, Air Cargo Complex
4. Other officers/ staff of Air Cargo Complex Mumbai

Council Representatives
1. Shri Satish Wagh, Chairman Chemexcil
2. Shri Ajay Kadakia, Vice Chairman Chemexcil
3. Shri S.G Bharadi, ED and other Officers/staff of Chemexcil
4. Member-exporters of chemexcil

Shri Wagh welcomedthe gathering and expressed happiness that CHEMEXCIL has organizedthis interactive session at the appropriate time when CBIC is Observing Third Refund Fortnight to Clear Pending Refunds" from 16th July 2018 to 30th July 2018 all over the Country for facilitating IGST/ Un-utilised refunds on exports. This initiative which is third such drive after the one in March & June is reallycommendable and will hopefully resolve liquidity issues of the exporters. He also thanked Shri S. Anantha Krishnan, Commissioner of Customs (Exports), Air Cargo Complex, Mumbai and his officers for sparing their valuable time for interaction with the participants.

Shri S. Anantha Krishnan, Commissioner of Customs (Exports), Air Cargo Complex, Mumbai informed that till date IGST refund disbursed @ ACC was aroundRs. 1572 cr. Total pending claims due to SB 005 errors isAmount-Rs 64.19 cr and Pending Claims due to PFMS rejection – Rs 19.58 Crs. He urged all the participants to kindly take note and if applicable submit the Annexure A for rectification of errors/ refund processing.

Shri Jaideep Dubey explained in detail the step wise process of refund and also took specific company wise queries. Wherever any deficiency was observed, he advised to do the needful for processing.

Shri Tapan Kumar made detailed presentation on AEO scheme and explained the process of application, documents needed, benefits etc.

The interactive session was attended by around 30 participants. They participants interacted with the Customs officers and where satisfied with the response. The session ended with vote of thanks followed by networking lunch.

Glimpses of the Interactive Session

Shri Satish Wagh, Chairman welcoming Shri S Anantha Krishnan, Commissioner (Exports), ACC Mumbai during interactive session on IGST refunds & AEO on 24.07.2018

Shri Ajay Kadakia, Vice Chairman welcoming Shri Tapan Kumar, Joint Commissioner ACC Mumbai during interactive session on IGST refunds& AEO on 24.07.2018

Shri S.G Bharadi, ED welcoming Shri Jaideep Dubey, Asst. Commissioner, DBK/ IGST, ACC Mumbai during interactive session on IGST refunds & AEO on 24.07.2018

Shri Satish Wagh, Chairman addressing the gathering during interactive session on IGST refunds & AEO on 24.07.2018

Shri S Anantha Krishnan, Commissioner (Exports), ACC Mumbai addressing the participants during interactive session on IGST refunds& AEO on 24.07.2018 in Mumbai

Shri Tapan Kumar, Joint Commissioner, Air Cargo Complex Mumbai making a presentation on AEO program

Shri Jaideep Dubey, Asst. Commissioner making a detailed presentation on IGST refunds during the seminar

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Brief report on Seminar on "Trade Finance & Forex Risk Management" in association with Kotak Mahindra bank on 27/07/2018 in Mumbai.

Volatility in Forex markets and high cost of export finance has been a cause for serious concern amongst the members exporters.

As a service to the members, the council had organised a knowledge seminar on "Trade Finance & Forex Risk Management" in association with Kotak Mahindra bank on 27/07/2018 in Mumbai.

The objective of this seminar was to create awareness about various aspects of "Trade Finance & Forex Risk Management" specially among MSME members so that they can take informed decisions about trade finance and risk management.

The seminar was graced by following:

Council Representatives
1. Shri Satish Wagh- Chairman Chemexcil
2. Shri Deepak Gupta- Deputy Director, Chemexcil
3. Member-exporters of chemexcil

Kotak Mahindra Bank Faculty
1. Shri Venu Gopal Rao Paidimarry- National Manager- Trade Finance, Kotak Mahindra Bank (KMB)
2. Shri RohitJethra- Sr. Vice President- Treasury, KMB
3. Shri Maneesh Srivastava- Vice President- Priority Banking, KMB
4. Shri Milind Gokral- Chief Manager- Privy Business Banking KMB
5. Shri Pankaj Kapoor,Sr Manager, KMB

Shri Maneesh Srivastava welcomedthe participants for the seminar and particularly thanked Shri Satish Wagh, Chairman for providing this opportunity to Kotak Mahindra Bank for interaction with our members.

Shri Venu Gopal Rao Paidimarrymade a comprehensive presentation on Trade Finance touching all the aspects of Trade Finance, credit risk including business with OFAC countries and also briefed about certain trade finance products of KMB which can be useful for exporters.

Shri RohitJethra explained in detail the dynamics of INR/ USD movement in India for the last few years and the important reasons for depreciation such as crude oil price, election, Trade war with US etc. He also explained the risk management products like forward contracts, options, FCTL etc.

He advised the members to avoid speculation and take an informed view on forex risk management.

The interactive session was attended by around 30 member-exporters.The participants interacted with the eminent experts from Kotak Mahindra Bank and where satisfied with the response.

The session ended with vote of thanks by Shri Satish Wagh, Chairman followed by Hi-Tea.

Glimpses of the Seminar on "Trade Finance & Forex Risk Management"

Shri Venu Gopal Rao, National Manager- Trade Finance, Kotak Mahindra Bank making presentation on Trade Finance during seminar in association with Kotak Mahindra Bank on 27.07.2018 in Mumbai

Shri Satish Wagh, Chairman Chemexcil attending the seminar on Trade Finance & Forex Risk Management

Overall view of seminar on Trade Finance & Forex Risk Management

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Exim Updates

REACH - REIMBURSEMENT OF 50% OF ECHA FEES INCURRED TO MEMBERS FOR REGISTRATION OF THEIR SUBSTANCES UNDER EU REACH DURING THE 3RD DEADLINE OF REGISTRATION I.E. 31ST MAY 2018

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GST - CBIC Note on Simplified Returns and Return Formats (July 2018)

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DGFT - Amendment of Policy Conditions of Urea under Chapter 31 of the ITC (HS) 2017, Schedule - I (Import Policy)

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Non-tariff Measures applied by the countries of LAC region

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GST - Notifications pursuant to recommendations of 28th GST Council Meeting held on 21/07/2018

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ADD Initiation of the Review by Korea Trade Commission (KTC) on the Need for the Continued Imposition of the Anti-dumping Duty on Ethyl Acetate originating from India

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IGST Refunds - Shipping Bill Wise IGST Refund Status at JNCH as on 16.07.2018

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Imp - Details of IGST Refund Help Desk at FIEO Mumbai and Ahmedabad Office

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V. Imp - Recommendations of 28th GST Council Meeting held on 21/07/2018

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Analysis with the view to identify and recommend WTO compliant exports promotion initiatives - reg

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IGST - Refunds Clarification in case of SB003 errors Extension of date in SB005 & other cases using officer Interface for rectification of errors till 30/06/2018

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V.Imp- Inviting Pre-Budget Proposals for the Year 2019-20

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JNCH - Monitoring of realisation of export proceeds on shipping bills on which drawback has been claimed & disbursed

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JNCH - Revised instructions for registration/ change in AD Code and bank account details (for PFMS)

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From Chairmans Desk - Information on new products and new markets being considered for exports by the members

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REIMBURSEMENT OF 50% OF ECHA FEES INCURRED TO MEMBERS FOR REGISTRATION OF THEIR SUBSTANCES UNDER EU REACH DURING THE 3RD DEADLINE OF REGISTRATION I.E. 31ST MAY 2018

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DGFT Clarification on acceptance of any copy of Shipping Bill in lieu of EP copy of Shipping Bill for grant of EODC of Advance Authorisation

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SCOMET - Issuance of export authorisation/license by DGFT (Hqrs.) for export of SCOMET items

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DCPC - Twelve Chemicals identified for examination for making BIS standards mandatory

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DGFT - Introduction of new Para 3.24 in the Chapter 3 of the HBP 2015-20

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SCOMET -Amendment in Appendix 3 (SCOMET Items) to Schedule-2 of ITC(HS) Classification of Export and Import Items, 2018

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IGST Refunds - Shipping Bill Wise IGST Refund Status at JNCH as on 02.07.2018 / JNCH Scroll No. 6546 & Scroll No. 6569

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ADD - Definitive Anti-Dumping Duty by European Commission on Imports of Oxalic Acid originating in India & PRC

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APTA Tariff concessions on import of goods of the description specified in column (3) of the Table hereto annexed and falling under the Chapter. Amendment in the Rules of Determination of Origin of Goods under the Asia-Pacific Trade Agreement.

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Commerce Minister Suresh Prabhu says it is a misconception that India subsidise exports

Union Minister for Commerce and Civil Aviation Suresh Prabhu today sought to dispel the notion of other countries that India subsidised its exports.

Prabhu said it was important to provide market access to the farmers for which the highest standard of safety was needed to overcome the non-tariff barriers (NTBs).

Union Minister for Commerce and Civil Aviation Suresh Prabhu today sought to dispel the notion of other countries that India subsidised its exports. He said that the government was merely trying to mitigate the adversities of the exporters, which did not tantamount to subsidising of exports from India, specifically farm products.

“It is a misconception that we subsidise our exports. We are fully WTO compliant and not at all violating those”, Prabhu said at a chat session organised jointly by Shefexil and a leading business daily here. He said that OECD countries were giving more subsidises to their farmers, particularly in the export of agriculture products.

Talking about agriculture exports, he said “should it not be so that when India exports its agriculture products to other countries, those importing nations deter themselves from subsidising those items”. Stressing on agriculture, Prabhu said it was important to provide market access to the farmers for which the highest standard of safety was needed to overcome the non-tariff barriers (NTBs).

The government was already working on a craft agriculture policy to double farmers’ income, he said. “The commerce department is already working on the development of standards. The standard in the Western countries is very high “, he said.

Unless the highest standard was not adhered to, it would be difficult to do exports, he added. He also said there would be no market access and realisation of better prices.

Prabhu also said that the ministry was also working on preparing an integrated logistics plan to reduce costs and increase speed and efficiency. Earlier speaking at a CII event, he said that the ministry was preparing separate plans for the manufacture of drones and planes in the country.

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(Source:https://www.financialexpress.com/economy/commerce-minister-suresh-prabhu-says-it-is-a-misconception-that-india-subsidise-exports/1235119/ dated 7th July-2018)

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Re-Import of Exported Goods

SN Panigrahi

In some occasions goods exported out of India are returned back for various reasons like

Cancellation of Export Order
For any Trade Disputes like Quality Reasons, Default of Payments, Non-Conformance to any Contractual Terms
After Exhibition/ Display in overseas Country
Return after Project / Contract Closure or Completion
Re-import of Exported Goods for Repairs, Reconditioning, Reprocessing
Imported Goods sent abroad within Warrantee Period and Re-import after repair
Because of some Certain Compliance / Regulatory / Restrictions in the Importing Country etc.,

SECTION 20 of Customs Act 1962, refers to Re-importation of Goods, which states If goods are imported into India after exportation therefrom, such goods shall be liable to duty and be subject to all the conditions and restrictions, if any, to which goods of the like kind and value are liable or subject, on the importation thereof. Thus according to this section normal customs duty under Section 12 of Customs Act, 1962 shall be payable on re-import of exported goods. However certain concessions and exemptions are available for Re-import as per following Notifications :

Let us here discuss about re-import on or after the 1st July 2017 - that is after implementation of GST. The general principle is that the exporters who re-import after export should not get away with any benefits which may have been given as an export incentive or exemption or any other benefits like duty drawback/rebate claims, export under bond or under other export incentive claims, duty exemption schemes, EPCG schemeetcand then these benefits should be recovered by way of duty.

Notification No. 45/2017 – Customs; dt 30th June, 2017 covers different scenarios under which exports are made and applicable Customs Duty Payable upon Re-import of such goods. These provisions are shown in following Table :

Some Salient Features :

The above concessional duty or exemptions are applicable subject to certain conditions to be fulfilled. Some of them are :

This notification shall come into force with effect from the 1 st day of July, 2017

The goods are the same which were exported. The onus of proof is on the Re-importer with satisfactory evidence is produced before the authorities.

The Period of Re-import :

In case of goods exported under the Duty Exemption Scheme(DEEC/Advance Authorisation/DFIA) or Export Promotion Capital Goods Scheme(EPCG) or Duty Entitlement Passbook Scheme (DEPB) or any reward scheme of Chapter 3 of Foreign Trade Policy: Re-importation of such goods takes place within one year of exportation or such extended period not exceeding one more year.

In all other cases, the goods other than those exported under Duty Exemption Scheme(DEEC/ Advance Authorization/DFIA) or Export Promotion Capital Goods Scheme(EPCG) or Duty Entitlement Passbook Scheme (DEPB) or any reward scheme of Chapter 3 of Foreign Trade Policy :re-imported within three years after their exportation or within such extended period, not exceeding two years

Goods subject to Re-manufacturing or Reprocessing:

The goods shall not be deemed to be the same if these are re-imported after being subjected to re-manufacturing or reprocessing through melting, recycling or recasting abroad

The beneficial provisions in this notification shall NOTapply to re-imported goods in following cases :-

(a) which had been exported by a hundred percent export-oriented undertaking or a unit in a Free Trade Zone as defined under section 3 of the Central Excise Act, 1944 (1 of 1944);

(b) which had been exported from a public warehouse or a private warehouse appointed or licensed, as the case may be, under section 57 or section 58 of the Customs Act, 1962 (52 of 1962);

(c) which fall under the Fourth Schedule to the Central Excise Act, 1944 (1of 1944). (Non- GST Items)

Disclaimer : The views and opinions; thoughts and assumptions; analysis and conclusions expressed in this article are those of the authors and do not necessarily reflect any legal standing.

Author : SN Panigrahi, GST Consultant, Practitioner, Corporate Trainer & Author Can be reached @ snpanigrahi1963@gmail.com

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EXPORT STRATEGY-COLOMBIA

BRIEF OF COUNTRYCOLOMBIA Colombia was one of the three countries that emerged after the dissolution of Gran Colombia in 1830 (the others are Ecuador and Venezuela). A decades-long conflict between government forces, paramilitaries, and antigovernment insurgent groups heavily funded by the drug trade, principally the Revolutionary Armed Forces of Colombia (FARC), escalated during the 1990s. More than 31,000 former United Self Defense Forces of Colombia (AUC) paramilitaries demobilized by the end of 2006, and the AUC as a formal organization ceased to operate. In the wake of the paramilitary demobilization, illegal armed groups arose, whose members include some former paramilitaries. After four years of formal peace negotiations, the Colombian Government signed a final peace accord with the FARC in November 2016, which was subsequently ratified by the Colombian Congress. The accord calls for members of the FARC to demobilize, disarm, and reincorporate into society and politics. The accord also committed the Colombian Government to create three new institutions to form a “comprehensive system for truth, justice, reparation, and non-repetition,” to include a truth commission, a special unit to coordinate the search for those who disappeared during the conflict, and a “Special Jurisdiction for Peace” to administer justice for conflict-related crimes. The Colombian Government has stepped up efforts to expand its presence into every one of its administrative departments. Despite decades of internal conflict and drug-related security challenges, Colombia maintains relatively strong democratic institutions characterized by peaceful, transparent elections and the protection of civil liberties.

• OFFICIAL NAME: Republic of Colombia
• FORM OF GOVERNMENT: Republic
• CAPITAL: Bogotá
• POPULATION: 46,245,297
• OFFICIAL LANGUAGE: Spanish
• MONEY: Peso
• AREA: 439,619 square miles (1,138,910 square kilometers)
• MAJOR MOUNTAIN RANGES: Andes, Sierra Nevada de Santa Marta
• MAJOR RIVERS: Magdalena, Cauca, Atrato, Sinú

Colombia is nicknamed the "gateway to South America" because it sits in the northwestern part of the continent where South America connects with Central and North America. It is the fifth largest country in Latin America and home to the world's second largest population of Spanish-speaking people.

Colombia is a land of extremes. Through its center run the towering, snow-covered volcanoes and mountains of the Andes. Tropical beaches line the north and west. And there are deserts in the north and vast grasslands, called Los Llanos, in the east.

Dense forests fill Colombia's Amazon Basin, which takes up nearly the country's entire southern half. In northwest Colombia, a warm, wet, jungle-filled area called the Chocó reaches across the Panama border.

ECONOMY OF COLOMBIA

Colombia has a long history of democracy. Like the United States, the country is run by a president, who is elected every four years. Laws are made by a House of Representatives and a Senate.

Colombia's biggest trading partner is the United States, which buys 40 percent of the country's exports. Colombia sends a variety of items overseas, including coffee, bananas, oil, coal, gold, platinum, and emeralds.

One of Colombia's worst exports, though, is illegal drugs. With help from the United States, the Colombian government is carrying out Plan Colombia, a costly and wide-ranging effort to rid the country of the gangs, called cartels, that produce illegal drugs for sale around the world.

Colombia heavily depends on energy and mining exports, making it vulnerable to fluctuations in commodity prices. Colombia is Latin America’s fourth largest oil producer and the world’s fourth largest coal producer, third largest coffee exporter, and second largest cut flowers exporter. Colombia’s economic development is hampered by inadequate infrastructure, poverty, narcotrafficking, and an uncertain security situation, in addition to dependence on primary commodities.

Colombia’s economy slowed in 2017 because of falling global oil prices and lower oil production due to insurgent attacks on pipeline infrastructure. Although real GDP growth averaged 4.7% during the past decade, it fell to an estimated 1.8% in 2017. Declining oil prices also have contributed to reduced government revenues. In 2016, oil revenue dropped below 4% of the federal budget and likely remained below 4% in 2017. A Western credit rating agency in December 2017 downgraded Colombia’s sovereign credit rating to BBB-, because of weaker-than-expected growth and increasing external debt. Colombia has struggled to address local referendums against foreign investment, which have slowed its expansion, especially in the oil and mining sectors. Colombia’s FDI declined by 3% to $10.2 billion between January and September 2017.

Colombia has signed or is negotiating Free Trade Agreements (FTA) with more than a dozen countries; the US-Colombia FTA went into effect in May 2012. Colombia is a founding member of the Pacific Alliance—a regional trade block formed in 2012 by Chile, Colombia, Mexico, and Peru to promote regional trade and economic integration. The Colombian government took steps in 2017 to address several bilateral trade irritants with the US, including those on truck scrappage, distilled spirits, pharmaceuticals, ethanol imports, and labor rights. Colombia hopes to accede to the Organization for Economic Cooperation and Development.

CHEMICAL INDUSTRY IN COLOMBIA:

Colombia is roughly equivalent in size to New Mexico, Texas, and Louisiana combined. A unitary republic with 32 departments and a capital district, the country can be divided into five distinct geographic areas: the Andean, Caribbean, Pacific, Orinoquía, and Amazon regions (Figure 1). The Caribbean, Andean, Orinoquía, and Pacific regions are home to most of Colombia’s chemical production facilities. The Andean region has the highest concentration of industrial plants, while most oil production occurs in the Orinoquía region, which borders Venezuela.

Figure 1. Colombia’s Caribbean (blue), Orinoquía (yellow), Andean (purple), and Pacific (orange) regions are home to most of the country’s chemical process industries. The Amazon region (green) is known for its tropical rainforests.

Coal mining, petroleum production and refining, and beer production are important industries in the Caribbean region. Open-pit coal mining is based in the region’s Cesar and Guajira departments, while the port city of Santa Marta exports coal. Petroleum is processed at the Reficar refinery in Cartagena, and petroleum derivatives are produced at the Monómeros Colombo Venezolanos chemicals facility in Barranquilla. SABMiller, a multinational brewing and beverage company, has a significant beer production plant in Barranquilla.

The Andean region is the most urbanized and industrially developed. In the Antioquia department, cement, chemical, and food and beverage production are concentrated in the city of Medellín. GrupoNutresa, a leading producer of processed foods in Latin America, has a facility in the city, as does GrupoOrbis, the country’s paint and chemical products conglomerate. Postobón, Colombia’s largest beverage company, and Grupo Argos, the region’s largest cement producer, also have industrial works in Medellín.

Elsewhere in the Andean region, Ecopetrol processes oil at Barrancabermeja, the country’s largest oil refinery, which is supplied with 10,000 barrels per day (bpd) of crude from Infantas oil field, 4,000 bpd from the Provincia field, and 2,000 bpd from the Llanito field (1). Argos and Holcim, two dominant players in the Colombian cement industry, have production facilities in the Boyacá department, while in the capital city of Bogotá, Carboquímica’s plants supply raw materials for plastics and polyvinyl chloride production. Food and beverage and personal care manufacturers also have operations in the region. SAB Miller PLC has breweries in both Boyacá and Bogotá, and Belcorp Corp. and Quala S.A. produce cosmetics and personal care products in Bogotá.

Pacific region activities are centered in the Valle del Cauca department, where processed meats, refined sugar, and personal care products are promising industries. Crude oil production drives the Llanos region’s chemical industry, with the Quifa oil field yielding 56,000 bpd; the Rubiales field, 163,000 bpd; the Castilla field, 125,000 bpd; and the Chichimene field, 80,000 bpd (1).

History and key companies

Colombia’s chemicals industry started in the 1940s with the creation of the Institute for Industrial Promotion (Instituto de Fomento Industrial, IFI). Chartered to promote key industrial sectors, IFI supported the National Chlorine and Derivatives Co. (Compañía Nacional de Cloro y susDerivados), which was founded in 1942 (2). The chlorine industry developed rapidly in the Andean municipalities of Betania in Antioquia and Zipaquirá in Cundinamarca with construction of Colombian Soda Plant’s (Planta Colombiana de Soda) production facilities. Now known as Brinsa, the company maintains production facilities in Cartagena (Caribbean region) and Zipaquirá (Andean region).

As the country’s agricultural sector developed in the 1960s, demand for fertilizer grew, spurring growth in the chemicals sector. In 1967, the Colombia and Venezuela governments jointly created Monómeros Colombo Venezolanos, which built a caprolactam and compound fertilizer production plant in Barranquilla. This company is now controlled by Venezuela Petrochemicals (Pequiven). In 1956, Carboquímica had begun to produce aromatic solvents in Bogotá and, by 1962, expanded the facility to produce phthalic anhydride. The company continued to expand, opening a synthetic resins production facility in 1974. Today, Carboquímica is one of the leading Colombian companies in this chemical industry sector (2).

In the oil sector, Ecopetrol (EmpresaColombiana de Petróleos) was established in 1948 as a state-owned enterprise. In a historic event, Ecopetrol took over the International Petroleum Company’s Barrancabermeja refinery, operational since 1922 (3). In 2007, Ecopetrol became a mixed corporation, with 80% of stock owned by government and 20% held privately. In 2015, Ecopetrol’s new Reficar refinery began operations in Cartagena. It was initially conceived as an extension of an existing location. During facility construction, however, process specifications were modified so that the refinery could process heavier crude (18° API gravity). Reficar and Barrancabermeja today have the combined capacity to refine approximately 415,000 bpd.

Colombia produces about 1 million bpd of oil. According to the International Energy Agency (IEA), the country ranks as the 19th largest oil producer in the world and the fourth largest in Latin America after Brazil, Venezuela, and Mexico. Colombia is not a top crude oil refiner in the world or Latin America, ranking fifth in Latin America after Brazil, Mexico, Venezuela, and Argentina. The country had proven crude reserves of 2,300 million barrels as of 2014, enough to process and sell for about six years at current rates of exploitation.

As the Colombian consumer-product industry developed, alcoholic and nonalcoholic beverage production increased (2). Commercial beer production began in 1913 with the opening of the Águila Brewery in Barranquilla, followed in 1930 by the Bavaria Consortium in Bogotá. Bavaria acquired Águila in the 1970s and became Colombia’s largest beer producer. In 2005, Bavaria was acquired by SAB Miller PLC. Carbonated beverages are primarily produced in Medellín by Postobón, which was created when the Posada and Tobón families merged their companies. Postobón is now one of the country’s leading private companies, with a large product portfolio of soft drinks, fruit juices, bottled water, tea, and energy drinks.

Colombia does not have large basic-chemicals companies; however, it does have several consumer products companies with international presence. NOEL, a major producer of Colombian cookies, was founded in Medellín in 1916. Since 2005, it has been part of the Nutresa Group, a conglomerate of Colombian companies that produce cookies, ice cream, meat, chocolates, fast food, coffee, and pasta. The National Chocolate Co., a privately held producer of chocolate and chocolate products, was founded in 1920 in Medellín. The company became part of the Nutresa Group in 2009.

The Institute for Industrial Promotion (IFI) was instrumental in promoting the Colombian milk industry in several regions (2). INDUCOLSA, founded in 1952 in Valle del Cauca, is now known as IndustriaColombiana de Alimentos. Privately held Alpina was founded in the 1940s in the Andean region and has become a dairy sector leader. The COOLECHERA cooperative was founded in 1964 in Antioquia and is now called COLANTA. One of Alpina’s biggest competitors, COLANTA has approximately 7,000 associates and 12,000 producers (4).

Chemical industry economics

Total gross sales for the Colombian CPI, including consumer products and food and beverage industries, were $70.75 billion in 2014, which represents almost 19% of the country’s gross domestic product (GDP) of $378 billion, at current prices. Total gross sales, minus intermediate consumption, represent an added value of $26.6 billion. The National Manufacturing Survey (Encuesta Nacional Manufacturera), which evaluates the economic and productive performance of the country’s largest industrial enterprises, consolidates data for Colombia’s manufacturing industries (5). The survey only considers production activity. Mining, and activities where marketing adds value, are considered separately.

When industrial sales of processed food and plastic products are subtracted from total gross sales, the chemical sector represents $49 billion (13% of GDP), of which $22.8 billion correspond to petrochemical products. Bioethanol and biodiesel fuel production sales account for $650 million in sales. Refined petroleum products and consumer products, such as food, beverages, and personal care products, account for over half of the industry’s sales. Table 1 shows percentages of total gross sales for each of the main industrial chemical sectors.

The mining industry represented an added value of $31 billion in 2014. When compared to the industry’s $26.6 million, it shows the Colombian economy’s strong dependence on its mining sector.

Employment. Colombia’s CPI sectors, represented in Table 1, provide about 270,000 of the 582,000 manufacturing jobs available in 2014. More than 90,000 jobs were in the processed food industry.

Exports. Colombia registered exports of $54.8 billion in 2014, with a strong dependence on mined products. The country exported 314 million bpd of crude oil, 89,085 ton/yr of coal, and 48.1 ton/yr of gold, representing 70.1% of total annual exports. Figure 2 shows Colombia’s top export destinations for mining commodities and crude oil, including the U.S. (26.8% of exports), the European Union (18.4%), and China (14.3%) (6).

Figure 2. Mining products, such as coal and gold, account for about 70% of Colombia’s exports, which are shipped to the U.S., the European Union, and China, among other countries.

Colombia exports chemical products to many countries (Figure 3), including Ecuador (16.3% of exports), Venezuela (11.8%), and the U.S. (11.2%). Table 2 summarizes the country’s top chemical exports for 2014 (6). Pharmaceuticals accounted for about $450 million in exports, followed by propylene polymer ($392 million), and vinyl chloride ($324 million)

Figure 3. Colombia exports various chemical products to countries including Ecuador, Venezuela, and the U.S

Corporate Sales. The 2014 gross sales for Colombia’s leading companies are listed in Table 3(7). Ecopetrol, for which the Colombian state is the largest shareholder, reported total sales of about $29 billion, followed by Bavaria with $2.3 billion in beer sales, and Drummond with $1.6 billion in coal revenues.

The future

Colombia does not have a highly developed chemicals industry. Between 2008 and 2014, high global prices for minerals and petroleum favored the development of these sectors at the expense of others. In 2014, however, with falling international prices and the devaluation of the peso, Colombian leadership realized that the country could not concentrate all its efforts and investments on oil and mining. Colombia then began to develop its production capabilities for consumer products such as food, drinks, toiletries, and cosmetics. Moving forward, these products will provide significant added value to the nation’s economy.

When global prices are again favorable, mining will likely offer economic development opportunities for Colombia. The industry, however, needs to address the environmental and social impact of illegal gold mining activities. The effects left by nonregulated exploitation are substantial, and inhibit the country’s social development.

Colombia invested heavily in Reficar’s construction, which eventually cost $8 billion. While the country’s investment promises to increase the value of the chemical industry, value creation depends on reaching projected production levels, and doing so efficiently. Colombia’s current oil reserves are also a concern. It is imperative that the country invest in finding new oil and gas wells and investigate exploiting nontraditional production wells.

Given its geographical position, diversity of agricultural products, and reasonable labor costs, Colombia can be competitive in developing its food, beverage, and consumer products industries, as long as it is committed to the necessary investment and research. The agricultural sector, which provides raw materials for the country’s consumer products industry, also requires ongoing investment. The required economic investments, which offer a path to prosperity for Colombia, are of a manageable size and do not require taking on excessive debt. It may also be possible to find national and international investors willing to assume the moderate risk of these sectors. (Source:-https://www.aiche.org/resources/publications/cep/2017/november/past-present-and-prospects-colombias-chemicals-industry )

MARKET CHALLENGES-COLOMBIA

The majority of U.S. made products are not subject to import duties under the U.S.-Colombia Trade Promotion Agreement (TPA) of 2012. For those products still subjected to import duties, most will see tariffs incrementally phased out by the year 2023. Despite the elimination of many market barriers by the TPA, U.S. companies still face challenges to doing business in Colombia. This is particularly the case with extractive industries like oil/gas and mining as well as professional services. Moreover, Colombia has been on the United States Trade Representative (USTR) Special 301 “Watch List” every year since 1991, reflecting ongoing challenges in the enforcement of intellectual property rights.

Environmental licenses must be obtained in order to execute certain projects in sectors such as mining and oil exploration, and the process is often time-consuming, burdensome, and can take up to several years to complete, with many licenses never being granted. Companies in these sectors must frequently go through a process called consultaprevia in which indigenous and other ethnic groups must be consulted before projects can be carried out in their communities. This process can also take up to several years with many projects ultimately being denied. The iniciativa popular, or local referendum, is a mechanism used by local communities to oppose activities by companies in the extractive industries, with several recent high-profile cases resulting in the shuttering of major operations.

A ruling in 2016 by Colombia’s Constitutional Court allows local government officials broad authority to stop projects in the oil/gas and mining industries out of concern for the environment, among other justifications. Since the ruling, local governments have established “protected areas” where U.S. companies in the extractive industries had operations, thus suspending these projects indefinitely. The pervasiveness of informal and illegal mining in Colombia and the environmental damage that accompany it tarnish the image of the mining industry in general and generate resistance to legitimate mining concerns that adhere to environmental standards and labor regulations.

Regulations and standards are another area of concern for U.S. businesses in Colombia. There is a tendency for regulations to change without adequate notification given to the World Trade Organization, industry, and other relevant stakeholders. Moreover, the comment period normally required for stakeholders to voice their opinions on the proposed regulatory change tends to be insufficient. Consequently, U.S. companies are uncertain how to comply with new regulations and some recently proposed regulations have blocked U.S. companies from the Colombian market entirely. In the area of standards, there have been proposals to adopt European standards at the exclusion of U.S. standards as well as proposals to require standards tests to be conducted by Colombian testing laboratories when no such laboratories exist in Colombia.

The government procurement process in Colombia continues to pose barriers for U.S. companies as a lack of transparency and competitive bidding conditions in the public tender process have resulted in U.S. bidders being excluded from key projects such as infrastructure development and project management. The Colombian government is making efforts to address this issue through initiatives such as CompraEficiente and the Global Procurement Initiative (GPI).

Although the TPA eliminated most barriers to U.S. exports of manufactured products, barriers still exist for U.S. professional services firms in Colombia:

• A commercial presence is required to provide information processing services and to bid on Colombian government contracts.

• Economic needs tests are required when foreign providers of professional services operate temporarily; residency requirements restrict trans-border trade of certain professional services such as accounting, bookkeeping, auditing, architecture, engineering, urban planning, and medical and dental services.

• In order to offer services, international banking institutions are required to maintain a commercial presence in Colombia through subsidiary offices.

• Insurance companies are restricted from offering policies to underwrite risk on government sponsored infrastructure projects due to Colombian regulations that do not recognize insurance policies as equivalent to bank guarantees.

• Only firms licensed under Colombian law may provide legal services; foreign law firms can operate in Colombia by forming a joint venture with a Colombian law firm and operating under the licenses of the Colombian lawyers in the firm.

• Telecommunications barriers to entry include cross subsidies, the requirement for a commercial presence in Colombia, and an economic needs test.

(Source:https://www.export.gov/article?id=Colombia-market-challenges)

EXPORTING TO COLOMBIA - MARKET OVERVIEW

The Republic of Colombia is the fourth largest economy in Latin America, after Brazil, Mexico, and Argentina, and has the third largest population with approximately 49 million inhabitants. Aided by major security improvements and steady economic growth in recent years, Colombia has increased its commercial and investment ties to the United States, Europe, Asia and the rest of Latin America.

Since the implementation of the U.S.-Colombia Trade Promotion Agreement (TPA) in May 2012, U.S. exports to Colombia initially increased substantially but have decreased over the last two years due to a combination of factors, with the main contributor being a depreciation of the Colombian currency that resulted from lower global oil prices (the county’s principal export), a drought, and a national strike by transportation workers. Nonetheless, certain U.S. exports to Colombia continue to see strong growth, especially agricultural products like pork, chicken, seafood, soy products, dairy, and beans. Colombia’s ranking as an export market for U.S. agricultural products jumped from 24th place in 2011 to 12th place in 2016. Agriculture exports to Colombia from the United States were valued at USD 2.38 billion in 2016, more than double their 2011 value. Cereals, especially corn, saw the greatest gain in real terms.

Other U.S. exports to Colombia that have enjoyed significant growth since the implementation of the TPA include aircraft and aircraft parts, which benefited from the elimination of a five percent tariff. These exports surged to an average of nearly USD 700 million per year over the period 2012-2016, up from USD 334 million in 2011. Exports of pharmaceutical products, which amounted to USD 200 million in 2011, have averaged USD 270 million per year under the TPA.

Political stability, a growing middle class, the signing of the peace accord between the government and the Revolutionary Armed Forces of Colombia (FARC) guerrillas, and a vastly improved safety and security environment have supported an optimistic outlook and moderate economic growth in recent years in Colombia.

The drop in commodity prices, adverse weather conditions, and labor strikes slowed economic output in 2016. Gross Domestic Product (GDP) growth slowed to two percent in 2016 and foreign direct investment is estimated to have decreased slightly to USD 11.6 billion. Over half of Colombia’s global exports are petroleum products and lower oil prices are expected to continue taking a toll on the country’s economy in 2017, with annual GDP growth projected at 1.8 percent and foreign direct investment expected to slow to USD 9.8 billion.

Colombia’s inflation rate was 5.75 percent in 2016 (and nearly nine percent in July of that year), again due in large part to low oil prices, drought, and labor strikes. This prompted Colombia’s Central Bank to raise its benchmark interest rate to 7.75 percent at the end of 2016. Inflationary pressures have since eased and the Central Bank has repeatedly lowered short term interest rates at each of its board meetings in 2017. On April 28, the Central Bank reduced the benchmark interest rate from 7.0 to 6.5 percent, a 50 basis-point cut that exceeded analysts’ expectations and marked the fourth reduction in five months. Inflation stood at 4.66 percent in April 2017 and Central Bank analysts predict a short term inflation rate of 4.49 percent by December 2017.

The passage of a tax reform package at the end of 2016 helped to prevent a possible downgrade in Colombia’s credit rating by shoring up the country’s public finances, which have been negatively impacted by the drop in oil revenue. Fitch Ratings affirmed Colombia’s BBB credit rating and revised its outlook from negative to stable in March 2017. A consequence of the tax reform, however, was depressed consumer spending since the reform included a rise in the value-added tax from 16 percent to 19 percent.

The United States is Colombia’s largest trading partner and Colombia was the 22nd largest market for U.S. exports in 2016. U.S. exports to Colombia in 2016 were valued at USD 13 billion, a decline of almost 20 percent compared to the prior year. Due to Colombia’s close ties to the United States and Colombians’ appreciation for the quality and reliability of U.S products, consumers in Colombia often favor U.S. products and services over those of our foreign competitors. However, Colombia is a price-sensitive market and price often dictates purchasing decisions. Consequently, Chinese products are increasingly capturing market share and China is now Colombia’s second largest trading partner.

Extractive industries such as coal mining and oil and gas exploration and production are the principal areas of U.S. foreign direct investment in Colombia (though the amount of investment in these sectors dropped significantly in 2016), followed by consumer goods, high tech, franchising, and tourism.

Over the next decade there will be greater investment in infrastructure projects ranging from roads, airport modernization, port construction and expansion, and major hotel developments. A sample of the major U.S. companies in Colombia includes: Drummond, Chicago Bridge and Iron, General Electric, General Motors, Occidental Petroleum, Chevron, ExxonMobil, ConocoPhillips, Microsoft, Unisys, Kimberly Clark, Johnson and Johnson, Goodyear, Kraft, 3M, Pfizer, Baxter, Corning, Marriott, and Sonesta Collection Hotels.

The Colombian Government has implemented bilateral or multilateral trade agreements with most countries in the Western Hemisphere, including the United States and Canada. Colombia also has trade agreements with the European Union, the Pacific Alliance (Colombia, Chile, Mexico and Peru), and South Korea. Agreements with Panama and Israel are pending ratification, and negotiations with Japan and Turkey are ongoing.

The U.S.-Colombia Trade Promotion Agreement entered into force in May 2012 and immediately eliminated import tariffs on 80 percent of U.S. exports of consumer and industrial products to Colombia, with remaining tariffs to be phased out over ten years. Other provisions include stronger protection for U.S. investors (legal stability), expanded access to service markets, greater intellectual property rights protection, market access for remanufactured goods, increased transparency, and improved dispute settlement mechanisms (arbitration).

Colombia has five commercial hubs in the country: Bogotá, Medellin, Cali, Barranquilla, and Cartagena. In contrast to the majority of Latin American countries that have one or two major cities, Colombia offers U.S exporters access through multiple commercial hubs, each of which has its own American Chamber of Commerce. While these cities and many other secondary cities offer unique market opportunities, they are close enough via air routes that it is common to have one partner (agent, distributer, or representative) cover the entire country.

(Source: https://www.export.gov/article?id=Colombia-Market-Overview)

COLOMBIA - MARKET OPPORTUNITIES

The post-peace accord environment in Colombia is expected to generate a period of stability and economic prosperity that will see development of several key sectors, including infrastructure, tourism, job training, education, and rural development.

Colombia's extensive, ongoing infrastructure projects will generate demand for project financing, logistics, construction equipment for public roads and airports, water treatment, water supply, electric power generation, oil and gas exploration and pollution control equipment, air navigational and port security aids, railway construction, transportation equipment, security and defense items and services, and mass transit systems. The city of Bogotá is in the early stages of developing a metro rail system and continues to expand its bus rapid transit system.

The consortium OPAIN was awarded a contract in 2006 for upgrades and expansion of Bogotá’s El Dorado International Airport, and these renovations are ongoing. There have also been proposals to develop a second airport in the Bogotá area, El Dorado 2. Several regional international airports in Colombia are undergoing upgrades and expansions, and all concessionaires are seeking equipment to modernize their facilities.

The United States Trade and Development Agency (USTDA) and the United States Export Import Bank (EXIM) support U.S. companies as they craft solutions to development challenges and make inroads in key sectors such as oil and gas, petrochemicals, renewable energy, telecommunications, and ports. USTDA grants have resulted in significant contracts being awarded to U.S. companies at Colombia’s two oil refineries. EXIM’s commitment of USD one billion to Ecopetrol and USD 2.8 billion to Reficar for its refinery project has provided myriad export opportunities for U.S. exporters of oil and gas equipment and services. USTDA grants for customs security and operational enhancements at the ports in Cartagena, Buenaventura, and Puerto Salgar should also increase prospects for U.S. exporters.

Other opportunities for exporters include: agricultural products like cotton, wheat, and pork; automotive parts and accessories; aviation parts and accessories; computer hardware and software services; IT equipment and services; electrical power systems; safety and security equipment; food and beverage processing and packaging equipment; medical equipment; plastics materials and resins; oil and gas equipment; mining equipment; and franchising.

(Source:https://www.export.gov/article?id=Colombia-market-opportunities)

COLOMBIA’s FTA INVOLVEMENT

Colombia is a relatively open, free market economy that is party to many free trade agreements (FTAs) worldwide. It has signed free trade agreements with many of its biggest trading partners including the United States and the European Union, and is a founding member of the Pacific Alliance regional trade bloc.

Free trade agreements in force

1. Pacific Alliance (founding member, along with México, Perú and Chile)
2. Panama - Colombia Agreement
3. Canada–Colombia Free Trade Agreement[1]
4. El Salvador, GuatemalaHonduras – ColombiaFree Trade Agreements
5. United States-Colombia Free Trade Agreement
6. Colombia – European free trade association (Efta) agreement
7. Colombia – European Union Association agreement

Trade organization membership
1. Pacific Alliance (founding member)
2. Andean Community
3. Caribbean Community (CARICOM) Agreement
4. World Trade Organization
5. Latin American Integration Association

(Source: https://en.wikipedia.org/wiki/Colombia_trade_agreements )

COLOMBIA - IMPORT REQUIREMENTS AND DOCUMENTATION

Overseas exporters should be aware that their importers in Colombia must follow the basic steps below to complete an import transaction into Colombia:

• Buy and fill out the Import Registration form. File the Import Registration form with Ministry of Commerce, Industry and Tourism. The form requires a complete product description and tariff classification.
• Customs inspects the merchandise, when they consider it necessary, and then authorizes withdrawal of goods.
• Fill out the “Andean Custom Value Declaration” (DeclaraciónAndina de Valor enAduana) when the import value is equal to or more than US$ 5,000 FOB.
• Fill out the Import Declaration ('Declaración de Importación'). When the import value is equal or more than US$ 1,000, Customs Brokers should do all the paperwork and get the shipment out of Customs.
• Go to an authorized financial entity and pay the import duties, VAT, surcharges, and other fees.
• Make arrangements with a Customs Agency to receive the merchandise and get it out of customs. The following are the main steps to be followed:
• Make arrangements with a financial entity to pay for the imported goods. Ask the exporter to ship goods to a Colombian port.
• Obtain approval from Ministry of Commerce, Industry and Tourism for the Import Registration Form or Import License (in the few cases when this is required).
• Present all documents to customs.
• Request the Cargo Manifest from the transportation firm.
• The importer must keep import documents for a period of no less than five years.
• When required, obtain import permits from pertinent government agencies. For example: Ministry of Social Protection (for medicines), Ministry of Agriculture (for certain food products), and Civil Aviation Department (for aircraft).

Import Declaration

The importer must submit an import declaration to the DIAN (Customs). This declaration includes the same information contained on the import registration form and other information such as the duty and sales tax paid, and the bank where these payments were made. This declaration may be presented up to 15 days prior to the arrival of the merchandise to Colombia or up to two months after the shipment's arrival. Once the import declaration is presented and import duties are paid, customs will authorize the delivery of the merchandise.

Customs officials are responsible for inspecting merchandise to verify that the description and classification are consistent with the importer's declaration. A customs inspection group often performs after-clearance random investigations to detect fraud, foreign exchange irregularities, and tax evasion. Major customhouse brokers have a customs office in their own bonded warehouses where most clearance procedures are completed before the merchandise is delivered to the customers.

To carry out an export, the exporter must:

1) Remit the pro-forma invoice,
2) Obtain acceptance of conditions from the client (letter of credit, draft bill),
3) Negotiate (through a local financial institution) the letter of credit/draft bill from the endorsing foreign bank,
4) Present (to Ministry of Commerce, Industry and Tourism) a form known as “Registration as National (local) Producer, Export Offer and Determination of Origin,”
5) Present the certificate of origin (when necessary) with copy of the commercial invoice, and other certificates required by the country of destination (textile visa, phytosanitary certificates, etc.), and
6) Complete and present the export declaration form, also known as shipping authorization of final export declaration, with all attachments as required.

Products that require special documentation include: vegetables, plants, fruits, animals, gold, emeralds, oil, coal, nickel, platinum, textiles, products exported through the General System of Preferences (GSP), and products exported through any free trade agreement.

Most of Colombia’s foreign trade procedures have been streamlined through the Unified Portal for Foreign Trade (VUCE), which gives users access to forms, online payments and follow-up on requests and processes related to an import or export operation.

(Source:https://www.export.gov/article?id=Colombia-Import-Requirements-and-Documentation).

GDP (purchasing power parity):$712.5 billion (2017 est.),$700.6 billion (2016 est.), $687.2 billion (2015 est.)

Industries: -Textiles, food processing, oil, clothing and footwear, beverages, chemicals, cement; gold, coal, emeralds.

Exports: -$36.79 billion (2017 est.), $33.38 billion (2016 est.)

Exports Commodities: -Petroleum, coal, emeralds, coffee, nickel, cut flowers, bananas, apparel.

Exporting Partners: - US 33.5%, Panama 6.3% (2016)

Imports: -$44.68 billion (2017 est.), $43.24 billion (2016 est.)

Import Commodities: -Industrial equipment, transportation equipment, consumer goods, chemicals, paper products, fuels, electricity.

Import Partners: - US 26.4%, China 19.1%, Mexico 7.5%, Brazil 4.7% (2016)

(Source:https://www.cia.gov/library/publications/resources/the-world-factbook/geos/co.html)

CHEMEXCIL EXPORTS TO COLOMBIA for the years 2015-16, 2016-17 & 2017-18

DYES TOP ITEMS EXPORTS TO COLOMBIA

DYE INTERMEDIATES TOP ITEMS EXPORTS TO COLOMBIA

List of supplying markets for a product imported by Colombia

Product: 32 Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring ...

INORGANIC CHEMICALS TOP ITEMS EXPORTS TO COLOMBIA

List of supplying markets for a product imported by Colombia

Product: 28 Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, ...

ORGANIC CHEMICALS EXPROTS TO COLOMBIA

List of supplying markets for a product imported by Colombia

Product: 29 Organic chemicals

AGROCHEMICALS TOP ITEMS OF EXPORTS TO COLOMBIA

List of supplying markets for a product imported by Colombia

Product: 38 Miscellaneous chemical products

COSMETICS AND TOILETRIES TOP OF ITEM OF EXPOORTS TO COLOMBIA

List of supplying markets for a product imported by Colombia

Product: 33 Essential oils and resinoids; perfumery, cosmetic or toilet preparations

ESSENTIAL OILS TOP ITEMS EXPORTS TO COLOMBIA

List of supplying markets for a product imported by Colombia

Product: 34 Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial ...

List of supplying markets for a product imported by Colombia

Product: 15 Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal ...

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