Colombia

In progress

The automotive industry is critical to the Colombian economy, supporting almost 60,000 jobs. In addition, hundreds of micro-, small, and medium enterprises (MSMEs) depend on the local operations of global carmakers.

But inconsistencies in how parts are treated by customs and inefficient information and appeals procedures at ports have increased costs, with knock-on effects for consumers.

What we are doing

The Alliance worked with the Colombian Customs and Tax Administration (DIAN) and the private sector to create a Center of Excellence to provide consistency in how customs will classify and treat components. The Center will become a virtual hub for specialised automotive industry knowledge within DIAN. By centralising and harmonising decision-making on an industry-specific basis, it creates a more fluid and operational relationship between the public and private sectors.

Our project involved:

• establishing a working group comprising customs officials and representatives of the automotive industry to direct and oversee the Center’s work
• assisting with the institutional setting-up of the Center
• testing and launching the Center
• providing experts to assess the impact of the Center on external users and on customs clearance

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

Benefits

Colombia has much to gain from the new Center.

The Private Sector stands to benefit from:

• improvements in cargo movements, resulting in quicker release times and fewer on-the-spot inspections
• reduced costs and fewer delays in cargo receipt
• increased awareness of applicable regulations
• the same treatment across all ports of entry
• elimination of duplicate paperwork
• fewer requests for information
• increased uniformity on decisions about classification, valuation and advanced rulings
• a centralised, responsive inquiries and appeals process

In turn, DIAN stands to benefit from:

• elimination of unnecessary duplicate paperwork
• a shift of port of entry focus that should free up scarce resources to concentrate on high-risk shipments
• single point of contact for inquiries (particularly beneficial for local exporters and importers who often lack the resources to tackle obstacles at the border)
• cross-functional expertise, which will increase Customs’ learning, leading to more effective enforcement

Importantly too, the people of Colombia stand to benefit:

• vehicle assemblers – leading to job creation
• local parts manufacturers and suppliers
• indirect, downstream jobs
• consumers – through cheaper vehicles

Monitoring and evaluation

We are evaluating the project’s impact. Key indicators include:

• reduction in the number of valuation and classification disputes
• reduction of time and cost for border clearance
• savings per customer, generated partly by shorter average cargo release times at the border, which will lead to money saved on total transport and logistics costs

Project Structure