What are customs and what is their status in Colombia?

July 25, 2023

Customs monitor and regulate the movement of goods in and out of a country. Although they are not very popular, they play key roles in the country’s development, while protecting both public health and the environment.

customs, international trade, customs control, Más Colombia

In international trade, customs refers to the entities in charge of monitoring and controlling the traffic of goods entering and leaving a national territory.

Its main functions are to regulate the traffic of imported and exported goods, collect the corresponding taxes and tariffs on foreign trade, prevent the entry and exit of prohibited products, fight against customs fraud and control the entry of elements that may pose a danger to public health and the environment.

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Customs play a decisive role in the crucial gear of Colombia’s international trade. Among the cities and ports that house these gateways for the entry and exit of goods, Buenaventura, Cartagena and Bogota stand out as leaders.

The Customs Regime contemplates three types of customs

Customs in Colombia are regulated by the National Tax and Customs Directorate (DIAN) through the Customs Regime. This is the set of rules that regulate how to import or export, which are the agents involved in the logistic processes of trade, the responsibilities and requirements of each agent and the sanctioning regime of the system (here you can find the Customs Regime: Decree 1165 of 2019).

Types of customs

According to its work, the Customs Regime contemplates three types of customs: destination customs, in charge of receiving goods entering the national territory; departure customs, which are responsible for the exit of goods leaving the national territory; and transit customs, where goods circulate to other countries.

According to the foreign trade statistical information produced and compiled by the National Administrative Department of Statistics (DANE), between 2021 and 2022, three quarters of imports entered through Buenaventura (28%), Cartagena (26%) and Bogotá (21%). Of these, 95% were manufactured goods.

In terms of exports, between 2021 and 2022, Cartagena (46%), Buenaventura (10%), Santa Marta (10%), Riohacha (8%) and Medellín (7%) accounted for three quarters of the flow of goods abroad.

Depending on the mode of transport, customs can be classified as land, air and sea. In Colombia, DANE figures indicate that in 2022, 83% of export operations were recorded by sea, 11% by air, 4% by land and the remainder by fixed transport facilities (pipelines, cable, etc.).

Strategic importance of customs

Having strong customs is strategic for a country, as it allows to control and reduce the transit of illegal goods that may threaten public health and the environment or affect the domestic market.

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Customs is responsible for regulating international trade by establishing standards and requirements to be met by importing or exporting companies. This ensures that trade is conducted in a fair and equitable manner, promoting competitiveness and protecting national interests.

Another fundamental aspect is the protection of the national economy. Customs has the function of preventing the entry of goods that may damage the country’s economy or affect public health. This involves controlling and preventing the entry of counterfeit or adulterated products or those that do not meet established quality and safety standards.

In addition to regulating trade and protecting the economy, Customs also performs the important task of collecting taxes and duties on goods entering or leaving the country.

According to DIAN collection statistics, since 2000, revenue from tariffs has fallen by more than 70%, representing only 2.8% of national revenue in 2021. These resources are essential for financing public policies, developing infrastructure and services, and boosting the national economy.

Finally, the function of customs is to facilitate international trade. Through the implementation of advanced technologies, such as merchandise identification systems, scanners and computer systems, the inspection process is streamlined and allows for greater control of goods entering and leaving the country.

This helps reduce barriers and streamline customs processes, facilitating trade and promoting economic growth.

Customs modernization process slowed down in Colombia

Despite the fact that customs play a fundamental role in international trade, economic growth, competitiveness and the welfare of nations, in Colombia the authorities continue to postpone immediate tasks to improve their performance.

Recently the DIAN wanted to strengthen its staff in order to improve the administrative management of the system, including these entities, to combat phenomena such as evasion. However, Congress cut $200 billion pesos from this aspiration.

In view of this, the Director of the DIAN, Luis Carlos Reyes, pointed out the importance of having these resources to recover more than $100 billion pesos a year, which are being lost on account of evasion and corruption.