Currently, the Colombian Tax and Customs Office (DIAN) is redesigning the Colombian free trade zone regime, for this, in the last month it has prepared both a Decree bill intended to adjust some specific matters necessary for the preparation of the regime to new commercial challenges and a draft Resolution (the “Proposal”) which purpose is to regulate some articles of Decree 2147/2016 (free trade zones regime) in order to facilitate the regime operability. The main changes brought by the mentioned drafts are the following:

Resolution Draft

Main adjustments are:

In such cases in which the destruction request is executed by the FTZ industrial or commercial user and these are not the owners of the goods, the request must include the authorization from the owner of the goods.  

Once the destruction of the goods is conducted, the FTZ operator user must record it in the FTZ stock control system. 

In such cases in which the destruction request is executed by the FTZ industrial or commercial user and these are not the owners of the goods, the request must include the authorization from the owner of the goods.   Once the destruction of the goods is conducted, the FTZ operator user must record it in the FTZ stock control system. 

The decision accepting the voluntary abandonment would indicate the actions the applicant must follow in order to turn the goods in, in accordance with their characteristics or nature and the delivery time. As a consequence, having accepted the abandonment, the interested party would pay the expenses derived from this action.

Regarding the FTZ Goods Movement Form (GMF), this would be authorized once the clearance permit or removal of the relevant import return is obtained.

In case the goods were subject to industrial processes, the GMF would need to include the amount and features of the re-entering raw materials, inputs or intermediate goods, together with the information of the goods produced or transformed in the rest of the country, based on the goods that temporarily were outside the FTZ.

In such cases in which the destruction request is executed by the FTZ industrial or commercial user and these are not the owners of the goods, the request must include the authorization from the owner of the goods.  
Once the destruction of the goods is conducted, the FTZ operator user must record it in the FTZ stock control system. 

In such cases in which the destruction request is executed by the FTZ industrial or commercial user and these are not the owners of the goods, the request must include the authorization from the owner of the goods.  
Once the destruction of the goods is conducted, the FTZ operator user must record it in the FTZ stock control system. 

Regarding the re-entry of goods that temporarily leave the FTZ towards the rest of the national customs territory, a GMF would be required, indicating the goods re-entering and the GMF number authorizing the temporary exit.

1. Regarding the customs regime for Free Trade Zones (FTZ), the Proposal confirms the possibility for FTZ industrial users to act as Importers of Record (IOR) of goods produced and/or manufactured within the FTZ facilities. However, the Proposal indicates that such operation must be conducted under the principle of exclusivity, hence import must correspond to sales of such goods made from the FTZ.

   Although the Proposal’s goal is clear, such restriction may result contrary to the development of business with companies operating from FTZ’s.

   Also, the Proposal establishes the possibility for FTZ industrial users to import the replacement parts or replacement materials directly related to the goods produced or transformed within the FTZ. 

   In any case income resulting from the sale of such goods may not exceed 20% of total income corresponding to the revenue generating activity. 

2. The “FTZ Forms” for the movement of goods may be corrected to modify aspects such as the physical units’ quantity, description and cost of the goods, provided it is made within 5 business days after the Form authorization date, for which, the number and date of the Form subject to correction together with the corresponding justification must be indicated.

3. Regarding goods destruction, the FTZ operator user (both for permanent and temporary FTZ) having products in serious state of impairment, decomposition, total damage, or total loss, must inform the customs authority with jurisdiction on the FTZ 2 business days before the goods destruction.

   In such cases in which the destruction request is executed by the FTZ industrial or commercial user and these are not the owners of the goods, the request must include the authorization from the owner of the goods.  

   Once the destruction of the goods is conducted, the FTZ operator user must record it in the FTZ stock control system. 

4. Regarding the recently created “voluntary abandonment” possibility, the Proposal indicates that whoever has the right to dispose over the goods may produce a request in writing to DIAN with jurisdiction where the products are located. Such request must be made 10 business days before the “legal abandonment” of the goods apply and should not cover items mentioned in article 91 of Decree 2147/2016.

   The decision accepting the voluntary abandonment would indicate the actions the applicant must follow in order to turn the goods in, in accordance with their characteristics or nature and the delivery time. As a consequence, having accepted the abandonment, the interested party would pay the expenses derived from this action.

5. The Proposal regulates the termination of activities both for FTZ users and FTZ themselves. In this sense, specific rules on the stock deposition are set. It also establishes a special procedure for stock management when the FTZ user losing the qualification is the FTZ operator user.

6. At the same time, according to the Proposal, the Resolution establishes the proceeding to be followed when the goods are moved to facilities next to a “Single enterprise” FTZ, for which it would be necessary for the imported product to follow the production line and in case of inspection or physical review the customs officer could conduct it regardless of the production stage.

   Regarding the FTZ Goods Movement Form (GMF), this would be authorized once the clearance permit or removal of the relevant import return is obtained.

7. Regarding the re-entry of goods that temporarily leave the FTZ towards the rest of the national customs territory, a GMF would be required, indicating the goods re-entering and the GMF number authorizing the temporary exit.

   In case the goods were subject to industrial processes, the GMF would need to include the amount and features of the re-entering raw materials, inputs or intermediate goods, together with the information of the goods produced or transformed in the rest of the country, based on the goods that temporarily were outside the FTZ.

Decree draft

This regulation will introduce important changes to consider, some of the most important are listed below: 

1. Regulates the possibility for non-free trade zone users to provide services to industrial users without implying the latter are outsourcing the activities for which they were qualified as such.

   This important change boosts the economies of scale and the productive chains with individuals and companies operating outside the free zone.

2. The scope of the annual audits is extended, verifying, among other factors, the corporate, financial and accounting situation of the operator user, and checking this user is not economically or corporately linked with its industrial users.

   Even though this obligation could be understood from the current regulation, DIAN is eager to have a greater control capacity.

3. Regulates the FTZ Forms establishing that they can be corrected anytime without penalty (this must be regulated through a Resolution produced by DIAN).

4. Considers the possibility for industrial users to store, without legal breaches, replacement parts and materials directly related to the goods produced or processed in the free zone.

5. Adjust the sanctions regime, modifying the value of some of the penalties and changing the scope of others. 

6. The entry into force of Decree 2147/2016 will be postponed until November 30th 2019. 

In accordance with the above, the proposed Resolution and Decree would regulate the previous situations that have been provided in Decree 2147/2016. Notwithstanding, it is necessary to indicate that, as the relevant adjustments are made to this regulation proposal, modifications may arise or be removed from the proposed Resolution or from the Decree project.