Center of Excellence to Boost Competitiveness in Colombian Automotive Sector

Alliance initiative to transform customs procedures

  • Alliance initiative involves establishing a Center of Excellence in Colombia, a virtual hub for specialised automotive industry knowledge within Customs
  • The Center will centralise and harmonise decision-making, regardless of port of entry
  • These changes will create a more fluid and operational relationship between the public and private sectors, resulting in reduced wait times at the border

“The creation of the Center of Excellence in the automotive sector clearly advances the agency’s mission to bring the tax and customs administration closer to the private sector and to the general public, as well as providing quality services appropriate to their needs, so that, together, the public and private sectors can better improve internal and external competitiveness, as a consequence of facilitating trade.”     Ingrid Diaz, Director of Customs of DIAN.

A new Center of Excellence concentrating on the automotive industry is expected to reduce costs and delays associated with moving automotive parts and final goods through Colombia’s ports of entry. The Colombian Customs and Tax Administration (DIAN), representatives from the private sector, and the Global Alliance for Trade Facilitation formally launched the Center today in Bogotá.

The Center, the first of its kind in Latin America, is a virtual hub for specialised automotive industry knowledge within DIAN. It represents a milestone achievement, resulting from close collaboration between public and private sector stakeholders. It was established by a presidential decree in 2020, which modified the country’s customs’ structures.

“The delays and costs associated with the importing of automotive parts seriously impede the automotive business and ultimately lead to higher prices for consumers,” said Alberto Macias, Executive Director of the Colombian Association of Auto Parts Manufacturers (ACOLFA). “This new Center will increase the competitiveness of the automotive industry, which is good news for everyone.”

As part of the initiative, the Alliance supported the creation of a new Division of Services and Trade Facilitation, which promotes coordination between the public and private sectors to streamline trade.

Today’s virtual launch brought together key public and private stakeholders to sign an historic public-private legal agreement cementing the transformation of the relationship between customs and the automotive industry.

“The launch of the Center of Excellence in Colombia represents a strong commitment to trade facilitation reform and the promise it holds for both the public and private sectors,” said Philippe Isler, the Alliance’s Director.“It also rewards the trust and collaboration by DIAN and the private sector, which together made this a reality. The Center will deliver lower costs for traders and the government, ultimately improving the competitiveness of Colombia’s automotive industry.”

The automotive sector plays a crucial role in Colombia, generating more than 16,300 jobs in the auto sector and almost 60,000 jobs in the wider economy. In addition, hundreds of micro, small, and medium-sized enterprises (MSMEs) play a key role in supplying the local operations of global carmakers.

However, mistrust between customs and the automotive industry manifested itself in inconsistencies in tariff classifications, a lack of harmonisation in the treatment of similar goods in different ports of entry, and decentralised information and appeals procedures.

DIAN’s import specialists and Colombian traders will now have access to new advanced rulings software that focuses on tariff classification, valuation, and rules of origin and serves as a single contact for the advanced rulings process.

By embracing advance rulings and with the new Center for the automotive industry, DIAN is helping to expedite border processing. Improved information sharing will also enhance trust between the public and private sectors, and the adoption of automated and paperless processes will lead to better security and enforcement.

As a result, the automotive industry is expected to see improved cargo movement and faster release times, reduced costs, and better uniformity for advance rulings across all ports of entry. Meanwhile, DIAN will be able to devote more resources to high-risk shipments.

The Center also contributes further to Colombia fulfilling its commitments under the World Trade Organization’s Trade Facilitation Agreement.

In time, DIAN plans to replicate this approach in other sectors. This will enable customs officials to work together with the private sector to bring solutions for industry-specific problems.

Private sector stakeholders, including ACOLFA as well as the National Business Association of Colombia (ANDI), the National Association for Sustainable Mobility (ANDEMOS), the Association of the Automotive Sector and its Parts Colombia (ASOPARTES), and the National Association of Foreign Trade (ANALDEX) also contributed to bringing this project to fruition.