Center of Excellence Drives Colombia Auto Trade

Carolina Acosta, Alliance Colombia representative, on how public private partnership achieved trailblazing reform

Carolina Acosta, Alliance representative for Colombia

In a trade facilitation first for a developing country, Colombia has made private sector input integral to establishing and operating a permanent Center of Excellence for the automotive industry, providing consistency in how the Customs and Tax Administration (DIAN) classifies and treats car and truck parts.

Almost two years after the Alliance successfully concluded its work on the project – including supporting Colombia in achieving the necessary regulatory change for an initial launch – DIAN and various trade associations representing the automotive sector have now agreed to sustain it.

Formal Agreement

DIAN and the automotive industry associations (ANALDEX, ANDI, ANDEMOS, ACOLFA, and ASOPARTES) signed a formal agreement to this effect on November 8. The parties also have ambitions to replicate the Center of Excellence model across other industry sectors.

Under this agreement, DIAN through the Division of Services and Trade Facilitation, aimed at promoting and institutionalising ongoing public-private engagement by adopting a client service approach, replacing a regime focused mainly on compliance.

Modelled on similar best practice in the United States and Japan, the Center creates a virtual hub for specialised automotive industry knowledge within DIAN. Aside from creating greater transparency, centralising and harmonising Customs’ decision-making can further nurture a relationship between the public and private sectors in the auto industry based on mutual understanding and trust.

Public Private Partnership

Working as part of the newly created Division of Services and Trade Facilitation, the Center of Excellence will also contribute to the country’s broader trade ambitions. By promoting public-private dialogue and sectoral training on a permanent basis, the Center will allow customs officials to specialise in the logistics and operation of various industry sectors, while encouraging voluntary private sector compliance with customs regulations.

The dedicated DIAN officials employed in the division will be able to impart technical skills to their colleagues elsewhere in the agency, while also transmitting experience of how best to engage and exchange knowledge with the private sector.

Also, because the Center’s decisions will be enforced at national level, these will contribute to a reduction of time and cost for traders at all the country’s borders.

The Center is the culmination of Alliance work in catalysing continuous public-private sector engagement to identify common ground in tackling identified obstacles to trade. DIAN officials will now set about realigning day-to-day customs operations under the aegis of the new Center, coordinating with the private sector to ensure operations contribute to the streamlining of procedures and unified criteria.

Future Initiatives

Prior to this, it would have been impossible to introduce reforms such as advance import declarations, and advance rulings on tariff classification, origin, and valuation. It is also worth noting that it may pave the way for future initiatives that will benefit Colombia-based importers, auto part producers and assemblers.

As someone who has been involved with this project since Day One, I celebrate the perseverance, commitment, and dedication of everyone who has worked so hard in making this Center a permanent reality, particularly DIAN and the relevant private sector associations.

The Center reflects the power of public-private engagement in achieving sustainable, co-created structural trade facilitation reforms. It should also encourage other countries across the region to follow suit, using this as a template to further their own trade facilitation ambitions.