No CrossRef data available.
Article contents
Colombia – Measures Relating to the Importation of Textiles, Apparel and Footwear (DS461)
Published online by Cambridge University Press: 23 April 2018
Abstract
In this paper, we examine the recent WTO dispute Colombia – Measures Relating to the Importation of Textiles, Apparel and Footwear. The dispute centers on the appropriate use of trade measures to target trade-related money laundering, the WTO consistency of such measures, and an ancillary question of appropriate time for remedies to be applied. The economics of the measures employed do not directly target the ostensible justification for the measures, while Colombia failed to convince the Panel and Appellate Body of key points related to the necessity of the measures taken. There has been success targeting trade-related money laundering following from cooperation of customs authorities and financial regulators to more directly target the agents involved. There may be a role for the WTO, in the form of steps taken to encourage such cooperation (as in Argentina – Measures Relating to Trade in Goods and Services). The basic lesson is that second best, blunt, and likely misdirected policies are not easily justified at the WTO, though more direct measures may be.
- Type
- Review Article
- Information
- Copyright
- Copyright © Joseph Francois And Janet Whittaker 2018
References
1 Appellate Body Report, Colombia – Measures Relating to the Importation of Textiles, Apparel and Footwear (Colombia–Textiles), DS461, AB-2016-1, June 2016.
2 Panel Report, Colombia – Indicative Prices and Restrictions on Ports of Entry (Colombia–Ports of Entry), WT/DS366/R, April 2009, para. 2.2.
3 Ibid., para. 2.2.
4 Ibid., para. 2.5.
5 Ibid., para. 2.3.
6 Ibid., para. 2.3.
7 Ibid., para. 2.4.
8 Panel Report, Colombia – Measures Relating to the Importation of Textiles, Apparel and Footwear (Colombia–Textiles), WT/DS461/R, 27 November 2015, paras. 2.4–2.7, 7.19, 7.32–7.34.
9 Ibid., para. 7.107.
10 Ibid., para. 7.30.
11 Ibid., paras. 2.37, 7.24–7.26, 7.36–7.40.
12 Ibid., para. 7.87.
13 Ibid., para. 7.87.
14 Ibid., para. 7.199.
15 Ibid., para. 7.200.
16 Ibid., para. 7.88.
17 Ibid., para. 7.93.
18 Ibid., paras. 7.94–7.103.
19 Ibid., paras. 7.105–7.107.
20 Ibid., para. 7.108.
21 Ibid., para. 7.109.
22 Ibid., paras. 7.193–7.184.
23 Ibid., paras. 7.332–7.339.
24 Ibid., para. 7.401.
25 Ibid., paras. 7.344–7.353.
26 Ibid., paras. 7.354–7.361.
27 Ibid., paras. 7.362–7.376.
28 Ibid., paras. 7.377–7.387.
29 Ibid., paras. 7.390–7.391.
30 Ibid., para. 7.399.
31 Ibid., para. 7.401.
32 Ibid., paras. 7.402–7.408.
33 Ibid., para. 7.412.
34 Ibid., para. 7.423.
35 Ibid., paras. 7.424–7.430.
36 Ibid., para. 7.437.
37 Ibid., paras. 7.438–7.471.
38 Ibid., paras. 7.500–7.508.
39 Ibid., para. 7.517.
40 Ibid., para. 7.524.
41 Ibid., paras. 7.525–7.528.
42 Appellate Body Report, Colombia–Textiles, para. 5.28.
43 Ibid., para. 5.45.
44 Ibid., para. 5.47.
45 Ibid., para. 5.67.
46 Ibid., para. 5.67.
47 Ibid., para. 5.81.
48 Ibid., para. 5.86.
49 Ibid., para. 5.87.
50 Ibid., para. 5.88.
51 Ibid., para. 5.89.
52 Ibid., paras. 5.95–5.117.
53 Ibid., para. 5.132.
54 Ibid., para. 5.149.
55 Panel Report, Colombia–Ports of Entry, para. 2.6.
56 Ibid., para. 2.7.
57 Ibid., para. 2.8.
58 Ibid., para. 2.13.
59 Ibid., para. 2.14.
60 Ibid., paras. 2.16–17, 2.19.
61 Ibid., para. 2.19.
62 Note: this is potentially beyond the scope of our paper, but Colombia–Ports of Entry is the first case in which the relevant provisions of the Customs Valuation Agreement and the issue of indicative prices were analyzed by a WTO Dispute Settlement Panel or the Appellate Body.
63 Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef (Korea–Various Measures on Beef), WT/DS161/AB/R and WT/DS169/AB/R, December 2000.
64 Panel Report, Colombia–Ports of Entry, 7.511 (quoting Appellate Body Report, Korea–Various Measures on Beef, para. 157).
65 Panel Report, Colombia–Ports of Entry, para. 7.516.
66 Ibid., para. 7.518.
67 Ibid., para. 7.543.
68 Ibid., paras. 7.546–7.549 (citing Appellate Body Report, Korea–Various Measures on Beef, paras. 161–165, 182; and Appellate Body Report, Brazil–Retreaded Tyres, WT/DS332/AB/R December 2007, paras. 151, 156, 182).
69 Panel Report, Colombia–Ports of Entry, para. 7.550.
70 Ibid., para. 7.551.
71 Ibid., paras. 7.551, 7.553, 7.554.
72 Ibid., para. 7.556.
73 Ibid., para. 7.542.
74 Ibid., para. 7.576.
75 Ibid., para. 7.576.
76 Ibid., para. 7.577–7.588.
77 Ibid., para. 7.586.
78 Ibid., para. 7.587.
79 Ibid., paras. 7.616–7.617.
80 Ibid., paras. 7. 585, 7.588, 7.618.
81 Ibid., para. 7.620.
82 In the arbitration under Article 21.3(c) of the DSU in Colombia–Ports of Entry (ARB-2009-1/25), the Arbitrator (again Prof Giorgio Sacerdoti) – like the Panel – recognized the importance of the legitimate objectives put forward by Colombia. However, in response to Colombia's claim that the importance of the measure in its domestic legal system was a ‘particular circumstance’ justifying a longer period of time for implementation, the Arbitrator found that Colombia had not established either that the indicative prices or ports of entry measure operated as ‘essential pillars’ of the regulatory regime it had enacted to combat under-invoicing, smuggling, and contraband or how the relative importance of these measures in its overall customs control and enforcement framework impact the implementing process so as to justify the grant of a longer reasonable period of time for implementation. Award, para. 98.
83 Mavroidis, Petros C. et al. , ‘Ask for the Moon, Settle for the Stars’, 16(2), World Trade Review (2017), 395–425CrossRefGoogle Scholar.
84 Notably, consistent with all cases, Colombia as defending Member did request substantially more time than Panama – 299 days (assuming Panama's proposal of 66 days) or 206 days (assuming Panama's proposal of 13 days following circulation of the Award). However, Colombia did not request the full 15-month period referenced in Article 21.3(c) – this is the first dispute since 2000 (Canada–Patent Term (Article 21.3(c) of the DSU) in which a less than 15-month period was requested. Additionally, the reasonable period of time established in the Award is shorter than the average reasonable period of time negotiated under Article 21.3(b) (9.38 months) and the average reasonable period of time awarded by Arbitrators under Article 21.3(c) (11.43 months).
85 See International Narcotics Control Strategy Report: Volume II Money Laundering and Financial Crimes, United States Department of State Bureau for International Narcotics and Law Enforcement Affairs 2016; ‘Panama: Detailed Assessment Report – FATF Recommendations for Anti-Money Laundering and Combating the Financing of Terrorism’, International Monetary Fund 2016.
86 See ‘Así ingresaba a Colombia textiles de contrabando el cartel de Sinaloa’, Economía, 11 July 2017; ‘Los Angeles area toy company pleads guilty to money laundering conspiracy’, Department of Homeland Security, ICE Financial Crimes, 28 September 2012.
87 See ‘Tackling a Panamanian Money Laundering Organization: OFAC Sanctions the Waked Money Laundering Organization, Colombia Arrests the Leader and Panama Seizes Assets’, Akin Gump client alert, 9 May 2016; ‘La confesión de Nidal Waked’, La Prensa, 20 October 2017.
88 Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, AB-1998-4, WT/DS58/AB/R, October 1998.
89 Panel Report, Columbia–Ports of Entry, para. 5.44.
90 Appellate Body Report, Argentina–Financial Services, WT/DS453/AB/R, 14 April 2016.
91 Panel Report, Argentina–Financial Services, WT/DS453/R, September 2015, paras. 2.60–2.61.