The Challenges

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 increased costs, with knock-on effects for consumers.

 

What We Did

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 classifies and treats components. The Center has become a virtual hub for specialised automotive industry knowledge within DIAN. By centralising and harmonising decision-making on an industry-specific basis, it has created 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.

 

The Impacts

Establishing a Center of Excellence in Colombia is a win for the government, the private sector, and the wider population. Aside from building unprecedented trust through public-private collaboration, it brings many other tangible benefits, including:

  • improving predictability and harmonise customs processing across all ports of entry
  • establishing a single point of contact that will streamline administrative processes, eliminating duplicate work and reducing requests for information
  • enhancing Customs’ knowledge of ruling on key automotive industry practices and importers’ specific commodities
  • reducing costs for both traders and government through quicker release times and fewer holds or examinations
  • improving the competitiveness of the Colombian automotive industry, making it more attractive to investors.