Panama: Retaliation Against Colombia

If the request by the Panamanian Ministry of Commerce and Industries is approved, a new tax of up to 40% could be established on the dividends distributed by Colombian companies.

Wednesday, November 15, 2017

In response to a decision by the Colombian government to extend the import tariff for footwear and textiles from Panama for two more years, the Panamanian Ministry of Commerce and Industries has asked the Foreign Ministry to apply the retaliation law, which has been in place since October of last year and which penalizes companies from countries that discriminate against Panama.

"... In November of last year Colombia issued two decrees. One of them adjusted the mixed tariff to the import of textiles and footwear which started a dispute over the limits allowed by the WTO, in the second, it established customs measures which led to a disagreement with the Panamanian authorities."

Laestrella.com.pa reports that "...The Cabinet Council will decide whether or not to apply a retaliatory measure.  Among them, according to Law 48, is application of a dividend tax of up to 40% on companies from States that take discriminatory actions against the country."

More on this topic

Tariff Conflict Between Panama and Colombia

March 2018

A little more than a month after the Panamanian government decided to raise import tariffs on various products as a measure of retaliation against the South American country, representatives from both governments reaffirmed their positions at a WTO hearing.

The outcome of the hearing will be announced by the WTO between August and September, according to the rules that govern the agency. 

Once Again the Problem with the Colombian Tariffs

November 2017

The South American country has extended the tariff of 35% and 40% on imports of footwear and textiles, respectively, for two more years, further complicating the outlook for companies in the Colon Free Zone.

Up until November 2019, the Colombian government will continue to apply the 35% tariff for footwear and 40% for textiles that enter the country at a value equal to or lower than a predetermined threshold.

Tension Growing Over Panama-Colombia Trade Dispute

January 2017

The Panamanian government has announced that until the dispute over tariffs is resolved, it will keep in abeyance the agreement signed with Colombia to buy two ships for $30 million.

As part of the trade dispute caused by the tariffs imposed by Colombia on imports of Panamanian footwear and textiles, the Varela administration has announced the suspension of a contract signed in October with Cotecmar, a company linked to the Colombian Defense Ministry.

Colombia Delays Elimination of Tariffs for CFZ

July 2016

For now, Colombia will not comply with the WTO ruling in favor of Panama in the conflict over tariffs on imports of footwear and textiles coming from Panama.

The conflict, which has affected the performance of the Free Trade Zone for more than two years still has no end in sight. Colombia expressed its intention to delay compliance with the ruling that forces the elimination of the mixed tariff,   "... Requesting an additional, unspecified, period in which to comply with the recommendations in the ruling in favor of Panama."

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