Import and Export Regulations for the Mining and Hydrocarbons Sectors - International Law Office

Imports
Ordinary Imports
Trade Programmes and Customs Benefits
Exports

Imports

There are no restrictions on the importation of goods except for those that require an import licence or whose importation is prohibited.

The goods that require a licence are indicated in a list issued by the government and can be divided into five main categories:

• non-reimbursable imports;

• used goods (including some remanufactured and refurbished goods);

• goods subject to customs duty exemptions;

• goods pertaining to the mining and hydrocarbon sectors; and

• goods imported by official entities.

However, there is a very limited list of goods prohibited from importation (eg, nuclear and toxic residues and biological, chemical and nuclear weapons).

Ordinary Imports

Import licenses
On the understanding that the importer has previously obtained the corresponding authorizations from the Ministry of Mining to carry out activities related to the mining and hydrocarbon sectors, in order to import capital goods, equipment and/or spare parts on an ordinary basis, the importer must obtain import licences in advance according as follows:

• When importing new goods relating to the mining and hydrocarbon sectors, the importer must obtain an annual import licence in advance from the Ministry of Trade before the authorization from the Ministry of Mining. This is because the importation of goods related to the mining and hydrocarbon sectors is controlled and restricted.

• When importing used goods (including some remanufactured and refurbished goods), the importer should obtain individual import licences. Only used goods that are not produced within the Andean Community countries (ie, Colombia, Ecuador, Peru and Bolivia) can be imported. Otherwise, the importer must obtain an authorization letter to import the used goods from the person or company that produces the goods, in order to obtain the licence.

• When claiming customs duty exemptions for goods, the importer must obtain an import licence, which can be either individual per import (for used goods) or annual (for new goods).

Intervention of a customs broker
All imports over $1,000 should be made through a customs broker. The customs broker is responsible for the truthfulness and accuracy of the information contained in the import declaration, including the customs duty and value added tax (VAT) benefits declared and the tariff classification reported. The importer, not the broker, is responsible for the customs value declared..

Import charges
Ordinary imports are subject to both customs duties and VAT.

The customs duty rates for machinery and equipment are 0%, 5%, 10%, 15% and 20% over the declared customs value. In addition, the importer may be able to claim exemptions for some capital goods and spare parts through an import licence. There is a list of about 400 items regarded as capital goods that are eligible for exemptions.

VAT accrues at 16% over the declared value once the applicable duty has been added. This can be avoided by the application of special customs programmes, such as short-term temporary import, or through the application of VAT benefits such as: (i) the VAT exemption that applies over temporary importation of heavy machinery for basic industries; or (ii) the VAT benefit that applies to ordinary imports of heavy machinery for basic industries (which consists of a tax payment deferral and a credit to the importer's corresponding income tax returns).

Trade Programmes and Customs Benefits

Temporary imports
Short term
The short-term temporary import regime applies to imports for up to nine months (in some cases this period may be extended up to one year). The short-term temporary import accrues neither duties or VAT. At the end of the term of import, the importer must re-export the goods (either abroad or to a Colombian free trade zone) or import it on a normal basis (in the latter case the importer will have to pay the related customs duties and VAT).

The importer must give customs a guarantee equivalent to 150% of the import charges (duties and VAT) that would accrue if the goods were imported on a normal basis.

The customs regulations allow the importer to use without limitation the short-term temporary import method for the same goods (eg, importation for a six-month term; exportation to a free trade zone; re-importation for another six-month term).

Long term
The long-term temporary import regime applies to imports for up to five years (in some cases this period may be longer). Long-term temporary imports accrue duties and VAT, but the total amount in the import declaration in dollars must be paid at the end of each term in pesos according to the exchange rate on the day of payment. For example, the total value of import charges for a five-year term temporary import is $100 which must be paid in 10 quotas of $10.

At the end of the term the importer must send the goods abroad (to a third country or a free trade zone) or import it on an normal basis. In the latter case, the importer will not have to pay customs duties and VAT unless it decides to terminate the duration of importation prematurely, in which case it must pay the pending instalments of import charges.

Only capital goods and their spare parts can be temporarily imported on a long-term basis.

Like the short-term temporary imports, the importer must give customs a guarantee equivalent to 150% of the import charges (duties and VAT) that would accrue if the goods were imported on a normal basis.

Inward duty-relief (Plan Vallejo)
Under this trade programme, mining and hydrocarbon sector companies usually import raw materials which are needed for the exploration and/or exploitation of oil or minerals and which are consumed in those processes (eg, dynamite and solvents).

The Plan Vallejo is an agreement under which the importer may import a certain amount of raw materials with duty and VAT exemptions. In exchange for the import charge benefits, the importer is obliged to export a certain amount of extracted oil or minerals in proportion to the raw materials consumed in the exploration and/or exploitation processes.

This inward duty-relief programme is granted only to companies that prospect for and exploit oil or minerals; it does not apply to companies that provide services to these sectors.

Special customs category of large importers
The customs category of 'large importers' is for companies that import a large volume (ie, companies that have made 100 import declarations or have imported no less than $5 million worth of goods in the 12 months before the date of the category request). For large tax payers the import value is reduced to $3 million. The benefits for importers who fall within this category are:

• the right to pay the duties and VAT in the first five days of the month after that in which import charges are accrued (ie, the goods are cleared without immediate payment of import charges, but the charges are paid within the first five days of the following month);

• the goods are not usually subject to customs inspection; and

• the guarantee obtained by the importer for payment of the corresponding import charges can be used to guarantee other customs obligations (eg, those for temporary imports).

Advance import declaration with direct unloading at the port/airport of arrival
Alternatively, the importer may anticipate the import process by submitting the import declaration in advance to customs no less than five days before the arrival of the goods. In addition, the existing customs regulations allow immediate customs clearance at the port or airport where the goods will be unloaded. Thus, the combination of an advance import declaration with direct unloading is a good strategy for importing goods on a timely basis.

Exports

As in the rest of South America, except Argentina, exports are not subject to any tax.

In Colombia, all exports over $1000 must be made through a customs broker.

For the mining and hydrocarbon sectors, capital goods that will be exported on an ordinary basis must be notified to the Ministry of Mining in advance.

Temporary exports
'Temporary export' is a special customs category enabling the temporary departure of goods for a specific term, at the end of which goods must be re-imported with no change in condition except for the normal wear and tear arising from their use. Under this category, temporary exporters should have a guarantee equal to 100% of the amount mentioned in the export declaration. No import charges will be payable when the goods are re-imported.

Temporary exports for repair
This customs category allows for temporary departure of goods for a specific term to be repaired. At the end of the authorized term the goods must be re-imported. Import charges will apply only to the value added to the goods abroad.

For further information please contact Alfredo Moreno at Lewin & Wills by telephone (+57 1 312 55 77) or by fax (+57 1 211 76 26) or by email (amoreno@lewinywills.com).