Reuters

Fri Nov 27, 2015

(Adds Colombia saying it will appeal)

GENEVA Nov 27 A World Trade Organization dispute panel ruled against Colombia’s tariff on textiles, clothes and shoes on Friday, dismissing its argument that the measures were needed to fight -money laundering.

The WTO panel backed a complaint from Colombia’s neighbour Panama that the tariffs, which consisted of a fixed 10 percent and a variable component, breached the maximum allowable 35-40 percent tariff on those products.

Colombia’s Ministry of Trade and Industry immediately said it would appeal against the ruling.

Colombia had argued that the imported goods constituted “illicit trade” because they were imported as artificially low prices in order to launder money, vindicating its use of a higher tariff than was permitted under its WTO agreement.

But the panel said it had failed to demonstrate that the tariff was either designed or necessary to fight money laundering, and because the tariff did not apply to imports from various countries or trade zones with special trade deals, it was illegally discriminating against Panama.

Colombian Trade Minister Cecilia Alvarez-Correa said in a statement the ruling was an unfortunate hindrance to the battle against smuggling and illicit trade and there were “legal and logical inconsistencies” in the panel’s reasoning.

Panama brought the case to the WTO in 2013, having previously lodged two complaints against its neighbour. Colombia settled the first out of court in 2006, and Panama won the second dispute in 2009. (Reporting by Tom Miles, additional reporting by Julia Symmes Cobb in Bogota, Editing by Catherine Evans and Angus MacSwan
Read more at Reutershttps://www.reuters.com/article/colombia-panama-wto-idUSL8N13M36220151127#V9UliQx8567Yh1Hd.99