The Colon Free Zone Crisis

Venezuela's debt for $1.1 billion and the loss of 80% of the footwear market in Colombia has led to the closure of businesses and the loss of thousand jobs.

Thursday, September 12, 2013

Added to this is a 20% decrease in sales from the Free Zone, as two of its main markets have shrunk by 50% for some companies and up to 80% for items such as shoes.

Panamaamerica reports that "the complicated situation has led the guild to ask the Panamanian government for immediate action to halt the decline of their business, including retaliatory actions with Colombia, a more aggressive plan to collect the debt from Venezuela, reduced Entry fee for containers as well as updating the laws for this zone in order to make it more competitive. "

Users of the Colon Free Zone have also requested some benefits such as removing the charge for containers entering, cutting taxes, levies and charges and ending the discriminatory treatment to buyers. "We asking for measures that can be implemented, albeit on a temporary basis to help ease the situation," said Severo Sousa from the Users Association.

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More on this topic

Activity in Colon Free Zone Down 24%

April 2014

The free zone must reduce its high trade dependence on Colombia and Venezuela and seek for new markets for re-exports to improve its performance.

Lack of trade diversification has meant that activity in the Colon Free Zone (CFZ) in the first quarter of 2014 has shrunk by 24% compared to the same period last year.

Not Raining, But Pouring in CFZ-Venezuela Trade

March 2014

Businessmen in the CFZ expect that the break in relations between the countries will further hinder the recovery of $2 billion owed ​​by Venezuelan companies.

On Wednesday, Venezuelan President Nicolas Maduro announced the severance of diplomatic relations with Panama," freezing "all further trade and economic relations with the Central American nation.

No Progress On Venezuela's Payments to CFZ

September 2013

While the debt of $1.2 billion has been left unpaid, traders in the Colon Free Zone are looking for better customers in Chile, Peru and Brazil.

On 12 August, the first bilateral meeting between Panama and Venezuela agreed that both parties would share documents so that commercial records could be verified, however, to date the Venezuelans have not submitted any.

Verification of Billing to Venezuela by CFZ

August 2013

For two weeks the national commission will be examining the validity of the debt documented as owed by Venezuelan businessmen to Panama exporters.

Prensa.com reports: "... the parties have agreed that Venezuela will send the records of more than 600 entrepreneurs who trade with the Colon Free Zone (CFZ), and then compare them with the data belonging to users of the Panamanian zone".

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