Identifier
Created
Classification
Origin
06BOGOTA717
2006-01-26 15:52:00
UNCLASSIFIED
Embassy Bogota
Cable title:  

COLOMBIA 2006 INVESTMENT CLIMATE REPORT

Tags:  ECON OPIC KTDB USTR CO 
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UNCLAS BOGOTA 000717 

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TAGS: ECON OPIC KTDB USTR CO
SUBJECT: COLOMBIA 2006 INVESTMENT CLIMATE REPORT

Openness to Foreign Investment:

UNCLAS BOGOTA 000717

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON OPIC KTDB USTR CO
SUBJECT: COLOMBIA 2006 INVESTMENT CLIMATE REPORT

Openness to Foreign Investment:


1. The Uribe administration stepped up the economic liberalization
begun in the early 1990's and is committed to an open investment
regime. Liberalization has progressed furthest in
telecommunications, accounting/auditing, energy, and tourism and to
a lesser extent, legal services, insurance, distribution services,
advertising, and data processing. Colombian law restricts the
movement of personnel in several professional areas, such as
architecture, engineering, law, and construction. For firms with
more than ten employees, no more than 10 percent of the general
workforce and 20 percent of specialists can be foreign nationals.
Nevertheless, attempts are underway to liberalize areas where
restrictions remain in force.


2. At this writing, negotiations for the US-Andean Trade Promotion
Agreement (USATPA) continue. The agreement will enhance
protections for U.S. investors and create new opportunities for
trade and investment.


3. The primary regulations governing foreign investment in Colombia
are Law 9 of 1991, Resolutions 51, 52, and 53 of the Council on
Economic and Social Policy (CONPES) and Resolution 21 of the Board
of Directors of the Central Bank. These regulations allow for free
foreign investment across the Colombian economy, except in sectors
related to national security and disposal of hazardous waste
products. Foreign investments, in general, receive the same legal
and administrative treatment as domestic investment. Foreign
investments in telecommunications, financial services, and oil and
mining sectors require sector-specific procedures, such as
investment registration and concession agreements with the
Colombian government, but are not restricted in the amount of
foreign capital permitted.


4. Decree 1844/2003 established that the type of investment, its
ultimate destination, and the type of currency regulates the
registration requirements. In December 2004, the Colombian
government attempted to stem speculative capital flows through a
decree, although it is difficult for the GOC to enforce and the
Finance Minister has publicly committed to remove it in the near
future. The letter of the law says that there are consequences for

expatriating portfolio investments and earnings before 12 months
have passed, but does not define the penalties nor who will enforce
them.


5. In July, 2005, the Colombian government adopted an investment
stability law, Law 963. This law guarantees investors that the
laws applicable to the investment at the time the investment is
made will remain in effect for a period between 3 and 20 years
depending on the type and amount of the investment. The minimum
dollar value of the investment is USD 1.2 million and those seeking
to benefit from this law are required to pay a fee based on the
progress of the investment. This law benefits investments in
manufacturing, agriculture, tourism, mining, petroleum,
telecommunications, construction, electricity production and
transmission, port and railroad development, and other activities
approved by a special committee. Portfolio investment is
specifically excluded from benefiting from Law 963 and the
investment stability guarantee does not include taxes, labor and
social security laws, financial services laws and the tariff
system.

Accounting and auditing:


6. Providers of accounting and auditing services must register in
Colombia. No restrictions apply to services offered by consulting
firms or individuals. Subsidiaries of U.S. based multinational
firms currently control 80 percent of the accounting market. The
signing of the USATPA will not substantially change market access
in this sector as U.S. companies currently dominate the market.

Advertising:


7. There are no local-content advertising requirements for
advertising on Colombian television, but the National Television
Commission charges foreign-made ads double the national rate for
airtime.

Audiovisual services:


8. Colombian television broadcast laws (Law 182/95 and Law 375/96)
require foreign investors to be actively engaged in television
operations in their country of origin. National broadcasters are
required to dedicate at least 70 percent of prime time to locally
produced programming. Outside of prime time, at least 50 percent
of programming must be locally produced except between the hours of
midnight and 10:00 am when no locally produced programming is
required. These quotas are being addressed in the USATPA
negotiations.


9. Television, radio broadcasting, movie production, and movie
reproduction fall under national-treatment limits. Key regulations
are Decree 2080/2000, Law 680/2001, Law 182/1995, Law 14/1991, and
Law 29. Foreign investment in television network and programming
companies is limited to 40 percent. Foreign operators are limited
by law to 25 percent ownership of radio broadcast programs. A
maximum of 10 percent foreign participation in local TV productions
is allowed and the participation of foreign artists in local TV
productions is dependent upon the reciprocity requirement.
National TV programs can be directed by foreign directors, in which
case the screen writers and starring actors must be Colombian
nationals. (If the director is Colombian then some writers and/or
starring actors may be foreign nationals). Bidding concessions for
programming in public television channels are only open to
Colombian nationals, and Colombian nationals are required to direct
and manage newspapers covering domestic politics.

Data processing and information:


10. A legal commercial presence is required to provide this service
in Colombia.

Banking


11. Foreign companies are permitted to own 100 percent of financial
institutions in Colombia. Foreign investors are required to obtain
approval from the Banking Commission before making a direct
investment of ten percent or more in any one entity. Portfolio
investments that will be used to acquire more than five percent of
an entity also require authorization. The use of foreign personnel
in financial institutions is limited to administrators, legal
representatives, and technicians. The USATPA under negotiation
aims to remove many of these restrictions.


12. Foreign banks seeking to operate in Colombia must establish a
local commercial presence and comply with the same capital and
other requirements as local financial institutions. Colombian
legislation limits the operation of banks and other financial
institutions by separating fiduciary, investment banking,
commercial loans, leasing, and insurance services, from banking
services. Current legislation (Law 389/1997) permits banking
institutions to develop such activities in the same
office/building, but the management of such services must be
separate.


13. Since 1999, banks operating in Colombia have been subject to a
minimum capital requirement because of Law 510/1999. This law
grants the government the right to intervene in institutions that
fail to meet these minimum performance requirements. Institutions
are required to register with the Financial Institutions Guarantee
Fund (FOGAFIN, FDIC-equivalent) and this law extended the terms and
time to liquidate a failing bank from 6 to 18 months.


14. Other regulations of interest to this sector appear in Decree
2951/2004. This decree establishes that institutions must create a
commercial presence if their promotions target Colombian residents.
A banking relationship with a Colombian resident and a financial
entity abroad is permitted if the relationship was initiated by the
Colombian resident without any publicity or promotion in Colombian
territory. The FTA currently under negotiation seeks to eliminate
these restrictions.


15. As of October 2005, past-due loans accounted for 4.5 percent of
the total portfolio, compared with 5.7 percent in 2004, and banks'
return on equity rose to 22.6 percent as of October 2005.
Provisioning for past-due loans has increased and is above the
regional average because of a restructuring of the entire financial
sector.


16. Since the 1998-99 crisis, the number of financial institutions
in the country decreased from 109 to 51 in July 2005, mainly due to
mergers and acquisitions and efforts provide universal banking
services. In 2005, there were six mergers plus the creation of Gran
Banco Bancaf. As a direct result of these mergers and
acquisitions, the new institutions are expected to broaden their
distribution structures and offer clients more flexible schedules
and more branch offices. The financial sector as a whole is
investing in new methodologies for risk assessment and portfolio
management. Banks in general are being conservative, thus
provisioning additional resources for past-due loans. Nevertheless,
as of October 2005, the Colombian financial system had registered
profits of approximately US $2.9 billion, 26 percent higher than
the profits registered between January and October 2004.


17. Banking authorities continue to make progress in advancing the
implementation of the risk-based approach for capital adequacy in
line with the Basel II capital guidelines. Per IMF recommendations
to improve coordination and information sharing efforts, the
Banking and Securities Commissions initiated a merger process in
November 2005. The merger will improve the exchange of information
and allow for more effective monitoring, policymaking, and conflict
resolution.

Hydrocarbons:


18. The Colombian government is currently seeking to increase
exploration and investment. In 2003 the Colombian government
separated regulatory responsibilities from Ecopetrol, the state
owned oil company, to a government entity called the National
Hydrocarbons Agency (ANH). The ANH administers Colombia's
competitive process, allowing Ecopetrol to compete side by side
with foreign firms for hydrocarbon contracts. Foreign companies may
assume up to 100 percent of investment and risk activities in all
exploration and production contracts. Oil companies may obtain the
right to exploit fields for 30 years or until depleted, as well as
extend previous association contracts.


19. A new sliding-scale royalty rate on oil projects establishes a
5 percent royalty rate on the smallest oil fields and an upper
limit of 25 percent on larger fields. The lower royalty rate has
encouraged investments by small- and medium-sized operators, since
more than 80 percent of Colombia's fields contain less than 50
million barrels. The reforms have helped to renew interest in
Colombia's oil exploration sector, with the government signing a
record number of contracts with foreign oil companies during 2005.
As of late November 2005, a total of 48 exploration, production and
technical evaluation contracts had been signed between the ANH and
foreign investors, and an additional 13 contracts were in process.


20. Between 2004 and the third quarter of 2005, Ecopetrol and its
partners covered more than 7,000 Kms of seismic and drilled 37
exploratory wells. Exploration targets for 2006 are to explore an
additional 3,400 kms of seismic, drill 40 exploratory wells, and
discover 250 million barrels of new oil reserves. Ecopetrol's
assigned budget for exploration is approximately US $92.5 million
in 2004 and US $93 million in 2005. Current oil reserves are
approximately 1.47 billion barrels and are expected to last until

2010. In the first three quarters of 2005, Colombia exported US $4
billion worth of petroleum products, of which 71 percent or $2.8
billion went to the U.S. For 2004, Colombia exported US $4.2
billion worth of petroleum products, of which 80 percent went to
the U.S.


21. Colombia's first venture capital fund for oil exploration and
production was created in July 2005. The fund commenced operations
with a capital investment of US $58 million. Key investors are
Ecopetrol, financial institutions, oil exploration and production
companies, and private investors. The objective of the fund is to
reach $100 million in risk capital by the beginning of 2006 from
both foreign and domestic investors. Fund financing will be
primarily concentrated in minor fields with reserves below 50
million barrels. According to Ecopetrol, the probability of success
in exploration of oil fields in Colombia is close to 20%. To make
the fund more attractive, its partners have decided to include
production projects, enabling faster returns on investment and
diversified risk. The fund does allow financing up to 70% in
exploration projects and 30% in production projects.

Insurance:


22. Colombia permits 100 percent foreign ownership of insurance
firm subsidiaries. Firms must have a commercial presence locally to
sell policies other than those for international travel or
reinsurance. In addition, Colombia denies market access to foreign
marine insurers. The USATPA seeks to permit trans-border trading
of insurance (except for some types of insurance such as the
mandatory vehicle insurance or pension insurance) and the
possibility for foreign insurance and financial institutions to
establish branch offices in Colombia. The U.S. and Colombia have
agreed to give Colombian companies four years to restructure and
adapt to the new business conditions before U.S. companies are
allowed to enter the market.

Legal:


23. Provision of legal services is limited to those firms licensed
under Colombian law. Foreign law firms can enter the market by
forming joint ventures with local law firms. Legal services are
under discussion in the United States - Andean Trade Promotion
Agreement (USATPA) negotiations, but it is likely that a Colombian
legal license and a local office will still be required to provide
legal services locally.

Telecommunications:


24. Colombia currently permits 100 percent foreign ownership of
telecommunication providers. In WTO negotiations, Colombia made
fairly liberal commitments on basic telecommunications services and
adopted the WTO reference paper. However, Colombia specifically
prohibited "callback" services and excluded fixed and mobile
satellite systems. The license or concession for the supply of
telecommunications services is only granted to enterprises legally
established in Colombia.


25. Significant barriers to entry include high license fees ($150
million for a long distance license fee),cross subsidies,
commercial presence in Colombia and economic needs tests. The
Telecommunications Regulatory Commission (CRT) may require an
economic needs test for the approval of licenses in voice,
facsimile, e-mail, and other value-added services. The parameters
that determine "an economic needs test" are not clearly established
in Colombian legislation. CRT also maintains a system of crossed
subsidies where, for example, long-distance telephony subsidizes
local telephony. Low (subsidized) prices of local telephony and
high restrictive costs in the provision of long-distance telephony
limit the entry of new competitors. (Prices of international long-
distance calls in Colombia are 35 percent higher than the average
in developing countries, while prices of local calls are 25 percent
lower than the average in developing countries).


26. Interconnection and trunk access policies and guidelines are
not transparently formulated and applied by the regulatory
authority, which further limits competition for the provision of
local, long-distance and mobile services. Colombia has an open
mobile telecommunications market for Personal Communications
Services (PCS) competition. The government issued a PCS license to
new competitor Colombia Movil (Ola),effectively ending Colombia's
mobile telecommunications duopoly and opening the door for
competition (Telefonica and Comcel currently share approximately 80
percent of the cellular market). Colombia Movil, owned by state-run
Empresa de Telecomunicaciones de Bogota (ETB) and Empresas Publicas
de Medellin (EPM),received a 10-year concession to develop the
market and competes against current cellular providers. The USATPA
negotiations currently underway seek to further liberalize this
market.

Transportation:


27. Article 1458 of the Commercial Code of 1971 prohibits any
foreign ownership interest in commercial ships licensed in
Colombia. Article 1490 of the Commercial Code restricts the
percentage of FDI in maritime agencies to 30 percent, and Article
1426 restricts foreign ownership in national airline or shipping
companies to 40 percent.


28. Trans-border transportation services are also restricted in
Colombia. Land cargo transportation must be provided by natural or
legal persons with commercial presence in the country and licensed
by the Ministry of Transportation. Colombia's law permits
international cabotage companies to provide cabotage services "only
when there is no national capacity to provide the service." Cargo
reserve requirements in transport have been eliminated. However,
the Ministry of Foreign Trade reserves the right to impose
restrictions on foreign vessels of those nations that impose
reserve requirements on Colombian vessels.

Investment Screening:


29. The Colombian government largely eliminated investment
screening, and the mechanisms that still exist are considered
routine and non-discriminatory. Regulations grant national
treatment to foreign and domestic direct investors alike. Some
sectors still require a concession agreement from the appropriate
Colombian government entity. The Colombian Economic and Social
Policy Council (CONPES) reserves the right to identify sectors of
economic activity where the government may or may not admit foreign
capital participation.


30. Foreign investments must be registered with the Central Bank's
foreign exchange office within three months of the transaction date
to ensure repatriation of profits and remittances and to access
official foreign exchange. All foreign investors, like domestic
investors, must obtain a license from the Commission of Companies
and register with the local Chamber of Commerce. Generally, foreign
investors may participate in privatization of state-owned
enterprises without restrictions. Colombia imposes the same
investment restrictions on foreign investors that it does on
national investors. A commercial presence in the country (defined
as a registered place of business, a branch, or an agent) is a
standard requirement for conducting business in Colombia. Foreign
investors can participate without discrimination in government-
subsidized research programs. In fact, most Colombian government
research has been done in connection with foreign institutions.

Other factors which may impact investment:


31. Law 145/1999 provides the Colombian government with the power
of "economic intervention" in the operation of all companies
(public, private, local, or foreign) permanently located in
Colombia. This law promotes solutions along the lines of U.S.'s
"Chapter 11" bailouts for companies with financial problems which
face possible liquidation or bankruptcy. Restructuring agreements
impose strict regulations on companies (e.g., financial operations
unrelated to the company's activity may not be performed without
previous authorization from all the parties involved in the
transactions.)


32. Since the passing of this law in December 2004, the Colombian
government intervened in 914 enterprises. These companies
registered assets totaling approximately US 4.8 billion and
liabilities totaling approximately US 3.4 billion and employed
approximately 65,000 workers. Of all the companies intervened, 665
reached restructuring agreements, which called for restructuring of
corporate governance practices and outlined a payment program to
meet their obligations and avoid insolvency. The remaining
companies were found bankrupt and are currently being liquidated.

Andean Community CET:


33. In December 2005 the Andean Community decided to postpone the
consolidation of its free trade area until January 31 of 2006. This
delay was due in part to the ongoing US-ATPA negotiations with
Colombia, Ecuador and Peru. The Andean Community adopted a Common
External Tariff through Commission Decision 370 of November 26,

1994. All the countries except Peru signed the Decision. The common
external tariff (CET) has a four-tier structure, with 5, 10, 15 and
20 percent tariff levels, and a series of tariff deferral
agreements that allow member countries to move away from the basic
structure. From January 31, 2006, all member countries agreed to
adopt a new CET simplified on a three-tier structure with 5, 10,
and 20 percent tariff levels, according to Decision 535 of 2002.
Colombia's average official tariff for 2005 was 12 percent ad-
valorem. Most non-agricultural products and services (both locally
produced and imported) are also subject to a 16 percent value added
tax.


34. Colombia, Venezuela and Ecuador have a special automotive
regime featuring duty free import of all automotive parts,
accessories, and motor vehicles. Such products from other
countries face a common external tariff of 35 percent for passenger
vehicles, 15 percent for mass transit and cargo vehicles, and three
percent for Completely Knocked Down (CKD) parts. The Andean auto
regime of November 1999 provided for the common external tariff
rates described above, and for regional content requirements
included in the policy, which are to increase from the current
average of 23 percent to a maximum of 34 percent by the year 2009.


35. On July 2, 1996, the Andean Community members adopted a common
regime for access to genetic and biological resources, with the
goal of promoting the conservation, development, and sustainable
use of biological and genetic diversity. This remains a sensitive
topic in the USATPA negotiation.

Other Regional Trade Agreements:


36. As noted above, Colombia is already engaged in the USATPA
negotiation with Peru and Ecuador. This negotiation aims to
increase market access and investor protection for U.S. companies.
The Andean Trade Preferences and Drug Eradication Act (ATPDEA)
retroactively renewed and built upon the expired Andean Trade
Preferences Act (ATPA). ATPDEA is set to expire at the end of

2006.


37. ATPDEA provides duty-free entry of approximately 6,500 product
categories from Colombia into the U.S. Previously excluded products
such as vacuum-packed tuna fish, textiles and apparel now enjoy
duty-free access to the U.S. market upon compliance with government
requirements. The President can expand the list of included
products with approval an advisory committee and concurrence from
the U.S. International Trade Commission. Goods must meet a value-
added requirement of 35 percent, up to 15 percent of which may be
accounted for by U.S. content in terms of cost or value.


38. Colombia exported US $4.0 billion under ATPDEA in 2004, versus
US $2.9 billion in 2003. Between January and October 2005, Colombia
exported US $3.8 billion, an increase of 13 percent over the same
period last year. Total Colombian exports to the U.S. were US $7.5
billion between January and October 2005. 50 percent of Colombian
exports to the U.S. entered through ATPDEA between January and
October of 2005. US exports have also grown by almost a billion
dollars since ATPDEA entered into effect in late 2002.


39. Colombia also has a free trade agreement between Colombia,
Mexico, and Venezuela, referred to as the G-3. Colombia has a Trade
Complementarity Agreement with Chile, under which 95 percent of
bilateral trade has duty-free status. The Andean Community
concluded and signed a free trade agreement with the member nations
of Mercosur on 16 December 2003. Colombia is a member country of
the World Trade Organization (WTO).


40. The Latin American Integration Association (ALADI) was
partially completed by the signing of Paraguay, Uruguay and the
Central American Common Market (CACM) countries (Costa Rica,
Guatemala, El Salvador, and Honduras) as well as Panama, Cuba and
CARICOM. Agreements negotiated with CARICOM have had limited effect
and have not been fully implemented. Colombia has also negotiated
five bilateral investment treaties of which only one has entered
into effect (see below "Bilateral Investment Agreements" for more
details). Colombia also has signed other bilateral agreements to
stimulate trade and ensure most favored nation treatment with
Hungary, the Czech Republic, Romania, Russia, Malaysia, Indonesia,
India, China, South Korea, Algeria, Kenya, Egypt, Morocco, Israel,
and the Ivory Coast. Colombia has been an active participant in
the Free Trade Area of the Americas (FTAA) negotiations.

Conversion and Transfer Policies:


41. As of December 24, portfolio capital must remain in Colombia
for at least one year. No other restrictions apply to transferring
funds associated with foreign investment. Foreign investment into
Colombia must be registered with the Central Bank within three
months of the transaction date. The government permits full
remittance of all net profits regardless of the type or amount of
investment (previously limited to 100 percent of the registered
capital). There are no restrictions to the expatriation of revenues
generated from 1) the sale or closure of a business, 2) a reduction
of investment, or 3) transfer of a portfolio. Colombian law
authorizes the government to restrict remittances in the event that
international reserves fall below three months' worth of imports.
Reserves uninterruptedly have been consistently at least double
that level for decades.

Expropriation and Compensation:


42. Colombian law guarantees indemnification in expropriation
cases.

Dispute Settlement:


43. Law 315/ 1996 authorizes the inclusion of an international
binding arbitration clause in contracts between foreign investors
and the GOC and Decree 1818/1998 allows for alternative dispute
resolution. The law allows contracting parties to agree to submit
disputes to international arbitration, provided that the parties
are domiciled in different countries; the place of arbitration
agreed by the parties is a country other than the one where they
are domiciled; the subject matter of the arbitration involves the
interests of more than one country, and the dispute has a direct
impact on international trade. The law allows the parties to set
their own arbitration terms including location, procedures, and the
nationality of rules and arbiters.


44. Foreign investors find the arbitration process in Colombia
complex and dilatory, especially with regard to enforcement of
awards. Despite Colombia's commitment to international arbitral
conventions and its domestic legal framework for arbitration and
resolution of disputes, foreign companies have continued to endure
lengthy dispute settlement processes. Consequently, there have been
cases in which foreign investors have won arbitrations, only to
have the losing party seek their annulment by the Council of State,
a judicial body. The Council has ruled that until it decides on
such requests, arbitration awards are not final, and do not need to
be paid. Colombia is a member of the New York Convention on
Investment Disputes, the International Center for the Settlement of
Investment Disputes (ICSID),and the Multilateral Investment
Guarantee Agency (MIGA).

Performance Requirements/Incentives:


45. Apart from export incentives relating to the operation of
special or free zones, Colombian law and/or regulations do not
currently impose specific TRIMs-regulated performance requirements.

Incentives:


46. Based on Colombian notifications to the WTO, the WTO Committee
on Subsidies identified the following Colombian programs as export
subsidies: (1) Plan Vallejo and (2) the CERT program. Plan Vallejo
allows duty-free entry of capital goods and materials to be used in
the production of export goods. In order to qualify, the producer
must show that at least 70 percent of the product produced by the
newly acquired capital good is exported. In the case of raw or
partially finished materials, the producer must export in value,
1.5 times that of the imported materials.


47. The tax reimbursement certificate (CERT) program has been
frozen since 2002. The program, intended to promote non-
traditional export products, provided negotiable certificates to
exporters based on the level of exports. Since 2002, however, the
program has not been operational, but remains on the tax books.


48. Faced with a revaluation of the peso that affected flower and
banana exports, the Uribe Administration enacted a program to help
these exporters purchase mechanisms to help them counter potential
exchange risk. The program offers banana and flower exporters 200
pesos for every dollar of goods exported to the United States
(current exchange rate: USD 1 = CP 2250) to purchase either options
or dollars in the futures market to hedge against future exchange
rate fluctuations. The eligibility period for this subsidy expired
on February 28, 2005. However, in September 2005 the Minister of
Agriculture announced that the government was seeking resources for
continuing with this type of export subsidy in 2006.

Export credit:


49. The foreign trade bank (BANCOLDEX) provides funds for working
capital and equipment purchases dedicated to the production of
exported goods. BANCOLDEX also provides discount loan rates to
foreign importers of Colombian goods.

Import Licenses:


50. Colombia has two import licenses. All importers are required to
complete a standard import registration form known locally as the
"Registro de Importacin". These forms are for record
keeping/statistical purposes and are available at the Ministry of
Foreign Trade. The other license applies to closely monitored,
sensitive products such as precursor chemicals and weaponry.


51. Colombia imposes discretionary import licensing to ban imports
of milk powder and poultry parts. The Colombian Government also has
local purchase requirements for rice, yellow corn, white corn, and
cotton. Agriculture is one of the most sensitive areas in the
USATPA negotiations.


52. The majority of "used" goods, such as personal computers, cars,
tires, and clothing, are effectively prohibited from import, and
those that are allowed (e.g., used medical equipment),are subject
to prior licensing. The US seeks entry of used and remanufactured
goods under the USATPA.

Promotion:


53. PROEXPORT is the Government's foreign investment and export
promotion agency. It provides information on market access and
business opportunities and organizes international trade shows and
missions. During the last few years, PROEXPORT has been making
efforts to diversify Colombian exports, which have been
traditionally concentrated in coffee, petroleum, coal and flowers.
PROEXPORT is much like the United State Foreign Commercial Service
in that it provides planning and training strategies for medium and
small companies to overcome obstacles of exporting goods and
services. There are fourteen PROEXPORT offices abroad and four
commercial representatives domestically provide information about
36 different countries. These offices attend and organize events,
fairs, and provide commercial guides to enter foreign markets.

Taxes:


54. The main types of tax incentives offered include preferential
import tariffs, tax exemptions and credit or risk capital from the
government. One example of a tax incentive offered by the Colombian
Government is the deductibility of income from new investments in
agricultural businesses dedicated to the cultivation of fruits,
anchovies, rubber, and cacao. Another deduction available is
income from new investments in environmental enhancements and
controls once these investments are accredited by the environmental
authority. Some fiscal incentives are available for investments
created to generate new employment or production in areas impacted
by recent natural disasters.


55. Tax and fiscal incentives are often based on regional
considerations. For example, border areas have certain protections
because currency movements in neighboring countries can severely
harm local economies. Likewise, export-oriented companies and
other industrial firms are provided fiscal and tax incentives where
the general reduction in tariffs have hurt their businesses. Local
governments also offer special incentives, such as tax holidays, to
attract industry from other areas. Most applications for fiscal
incentives are made directly to the agency involved. Tax incentives
do not require special application; companies need only to qualify
under the rules indicated in the process of filing a tax return.

Performance Requirements:


56. In December 2002, Colombia accepted the WTO Committee on
Subsidies and Countervailing Measures' decision to phase out all
export subsidies in free trade zones by December 31, 2006. However,
free trade zones and special import-export zones will maintain
their special customs and foreign exchange regimes. In September
2005, the GOC presented a bill to Congress, that if approved, would
impose a 25 percent income tax on free zones (lower than the normal
35 percent tax) after December 31, 2006, and would maintain the
exemption on the 7 percent remittance tax for free zones in the
country.

Non-Tariff Barriers:


57. The provision of legal services is limited to law firms
licensed under Colombian law. Foreign law firms can operate in
Colombia only by forming a joint venture with a Colombian law firm
and operating under the licenses of the Colombian lawyers in the
firm. Colombia permits 100 percent foreign ownership of insurance
firm subsidiaries. Insurance companies must maintain a commercial
presence in order to sell policies other than those for
international travel or reinsurance. Economic needs tests are
required when foreign providers of professional services operate
temporarily in Colombia. Moreover, residency requirements restrict
trans-border trade of certain professional services, such as
accounting, bookkeeping, auditing, architecture, engineering, urban
planning, and medical and dental services. For firms with more than
ten employees, no more than ten percent of the general workforce
and 20 percent of specialists may be foreign nationals. Companies
seeking to sell information provision services must establish a
commercial presence in Colombia. Foreign educational institutions
must have resident status in Colombia in order to receive
operational authority from the Ministry of Education. The USATPA
negotiations are focusing on eliminating many of these barriers to
service trade.

Standards, Testing, Labeling And Certification:


58. The Colombian Ministry of Foreign Trade requires specific
technical standards for a variety of products. The specifications
are established by the Colombian Institute of Technical Standards
(ICONTEC),a private non-profit organization, which provides
quality certification and technical support services. ICONTEC also
serves as an Underwriters Laboratories (UL) inspection center.
ICONTEC is a member of the International Standards Organization
(ISO) and the International Electrotechnical Commission (IEC).
Resolutions 1190 through 1194 issued by the Ministry of Economic
Development eliminated mandatory compliance to technical standards
on approximately 90 percent of the products previously subject to
such requirements. Certificates of conformity are no longer a
prerequisite for importing most products that are subject to
technical standards.


59. According to U.S. industry, Colombian requirements for product
registrations to bring new products into the market are excessive
and often take as long as six to eight months to fulfill. Colombia
maintains trade-restricting requirements for listing of ingredients
by percentage on pet food. In some cases, unjustified SPS measures
have been implemented to restrict U.S. exports. For example,
Colombia has maintained restraints on U.S. exports of cattle and
beef that are not based on risk assessments or otherwise comply
with WTO SPS obligations. Since December of 2003, U.S. beef has
been banned in Colombia on the basis of BSE (Bovine Spongiform
Encephalopathy). However, this ban continues to be enforced without
adequate scientific justification.


60. U.S. companies retailing nutritional supplements in Colombia
continue to experience problems due to the lack of legislation that
establishes clear parameters for sanitary registration. Colombia
does not have a specific classification for nutritional
supplements, causing nutritional supplements to be registered as
nourishing products or medicines. In those categories, the products
must meet certain requirements that nutritional supplements don't
have.

Government Procurement:


61. Colombia is not a signatory of the WTO Agreement on Government
Procurement. The USATPA under negotiation seeks to increase
transparency and guarantee national treatment for U.S. firms
participating in government tenders.


62. The Government Procurement and Contracting Law, Law 80/93,
sets guidelines for the selection of suppliers requiring the use of
public tenders. To sell to the GOC, foreign firms must register
with the chamber of commerce and appoint a local representative.
Registration must be renewed annually and includes certification of
experience, finances, technical expertise, and organization. Such
statements serve to qualify and classify suppliers based on "bona
fide" criteria. The registration requirements make the process
particularly costly for foreign firms, who need to demonstrate a
commercial presence in Colombia to participate in government
procurement.


63. One of the main problems in the application of Law 80 is that
there are exceptions, which generate uncertainty among investors.
Law 80 does not apply to contracts for the exploration and
exploitation of renewable or non-renewable natural resources, the
commercialization of said resources, or activities performed by
state companies involved in these sectors. Contracts for the
exploration and exploitation of renewable and non-renewable natural
resources, and all those contracts related to telecommunications,
radio, and courier services are governed by special legislation.
In these cases, in addition to public tenders and "direct purchase"
mechanisms, the state usually selects suppliers through licensing
procedures.


64. Law 816/2003 was enacted to promote national industries in
government procurement. Law 816 mandates that all public entities
adopt criteria that support national industries and grants
preferential treatment to bids that incorporate Colombian goods or
services. Under Law 816, national companies are given a 10 to 20
percent "bonus" in their evaluation score, and foreign companies
using Colombian goods or services are given a 5 percent to 15
percent bonus. Bids without any Colombian component are scored
between 5 percent and 20 percent lower than national ones.
Additionally, Law 816 requires foreign suppliers without local
headquarters in Colombia to obtain certification from a Colombian
mission overseas that government procurement laws in the home
country meet reciprocity requirements. To date, this new system,
which lacks an established certification process, has proven to be
a barrier against the participation of U.S. suppliers in government
procurement contracts.

Investment Barriers:


65. Investment screening is limited and the processes are generally
routine and non-discriminatory. Telecommunications, financial
services, and oil and mining sectors require specific registration
procedures for foreign investors but there are no restrictions to
the amount of foreign capital that may be invested in these
sectors.


66. Some large U.S. companies have expressed concern over certain
rulings on anti-trust and competition issues by the Commission of
Industry and Commerce (SIC). There are few opportunities to appeal
these decisions, and the legal procedures are time consuming and
costly.


67. As a result of a 2004 decree restricting short-term capital
flows, all foreign investment must be registered with the Central
Bank's foreign exchange office within three months to ensure the
right to repatriate profits and remittances. All investors, foreign
and national, must obtain a license from the Superintendent of
Companies and register their interest in a business with the local
chamber of commerce.

Tariff Barriers:


68. Many customs duties and most non-tariff barriers have been
eliminated. The ATPA will dismantle the remaining barriers
immediately upon entry into force, or after a brief transition
period. Current duties have been consolidated into three tariff
levels:
-- Level 1 - 0 to 5 percent for capital goods, industrial goods
and raw materials not produced in Colombia,
-- Level 2 - 10 percent on manufactured goods with some
exemptions,
-- Level 3 - 15 to 20 percent on consumer and "sensitive" goods,
where international prices surpass the price-band ceiling, tariffs
are reduced; when prices drop below the price-band floor, tariffs
are raised. The price-band has affected local competitiveness and
has dampened consumption via higher local prices. Andean Community
variable duties have become an important barrier to imports of U.S.
products into Colombia, but should be eliminated or mitigated in
the USATPA. Processed food imports from Chile and country members
of the Andean Community (Peru, Ecuador, Bolivia, Venezuela) enter
duty-free.


69. Colombia assesses a discriminatory value-added tax (VAT) of 35
percent on whiskey aged for less than 12 years, which is more
characteristic of U.S. whiskey, compared to a rate of 20 percent
for whiskey aged for 12 or more years, most of which comes from
Europe.

Right To Private Ownership And Establishment:


70. Colombia's Constitution explicitly protects individual rights
against state actions and upholds the right to private property.
Protection of Property Rights:


71. Colombia has been on the Special 301 "Watch List" every year
since 1991. Key concerns include lax customs enforcement and the
inability to conclude legal cases against traffickers or
counterfeiters. Colombia, a WTO member, has ratified legislation to
meet its obligations under the Uruguay Round Agreement on Trade-
Related Aspects of Intellectual Property Rights. Colombia is a
member of the World Intellectual Property Organization (WIPO),the
Paris Convention for the Protection of Industrial Property, the
Berne Convention for the Protection of Literary and Artistic Works,
the Treaty on the International Registration of Audiovisual Works,
and the 1978 Union for the Protection of New Plant Varieties, and a
signatory to the Patent Cooperation Treaty. Further IPR
protections will be an integral part of the ATPA. The USG is
working with Colombia to improve enforcement and prosecution of IPR-
related matters.


72. In Colombia, the granting, registration, and administration of
intellectual property rights (industrial property and copyright)
are carried out by four different government entities. Colombia
currently lacks a unified IPR registration system. The Commission
of Industry and Commerce (SIC) acts as the Colombian patent and
trademark office. The Colombian Agricultural Institute (ICA) is in
charge of the issuance of plant variety protection-related and agro-
chemical patents. The Ministry of Social Protection is in charge of
the issuance of phamaceutical patents, while the Ministry of
Justice is in charge of the issuance of literary copyrights. Each
of these entities suffers from significant financial and technical
resource constraints. Moreover, the lack of uniformity and
consistency in IPR registration and oversight procedures limits the
transparency and predictability of the IPR enforcement regime.
The USATPA will strengthen and modernize Colombia's IP regime. Key
areas are increased enforcement, stronger patent and data
protection, and more modern trademark and copyright regimes.

Patents and Trademarks:


73. Colombia is a member of the Inter-American Convention for
Trademark and Commercial Protection. Enforcement of trademark
legislation in Colombia is showing some progress, but contraband
and counterfeiting are widespread. The Commission of Industry and
Commerce acts as the local patent and trademark office in Colombia.
This agency was given the control of the government's IPR policy.
However, the agency suffers from inadequate financing and
personnel, having only 16 patent examiners for the whole country.
The staff has a high turnover rate, resulting in a large backlog of
trademark and patent applications. This has led to a large number
of appeals. The patent office at the Commission believes that the
number of new patent and trademark applications (currently 1,600
patent and 15,000 trademark requests per year) will double in the
next two or three years, without considering the increase in
applications that the signing of the USATPA with the U.S. would
likely produce.

Copyrights:


74. Andean Community Decision 351 on the protection of copyrights
has been in effect in Colombia since January 1, 1994. Law 44/1993
extends protection for computer software to 50 years but does not
classify it as a literary work. Law 44 and Colombia's civil code
include some provisions for IPR enforcement and have been used to
combat infringement and protect rights. Colombia is a member of the
Berne and Universal Copyright Conventions, the Buenos Aires and
Washington Conventions, the Rome Convention for the Protection of
Performers, Producers of Phonograms and Broadcasting Organizations,
the Geneva Convention for Phonograms, the WIPO Copyright Treaty,
and the WIPO Performances and Phonograms Treaty. It is not a member
of the Brussels Convention relating to the Distribution of Program-
Carrying Signals Transmitted by Satellite.


75. Colombia's Criminal Code of 2001 includes copyright
infringement as a crime, and significantly increased jail terms for
violators from three to five years. The code also contains
provisions regarding the violation of technological protection
measures and rights management information, both key obligations of
the WIPO treaty. Colombia has also created a Special Investigative
Unit within the Prosecutor General's Office dedicated to
intellectual property rights issues. This unit began functioning in
November 1999 and has 60 cases under investigation on different
issues including usurped trademarks, counterfeit pharmaceuticals,
pirated books, CD's, and movies, violations to industrial secrecy,
and cases against pirate television programming broadcasters.


76. The International Intellectual Property Alliance (IIPA)
estimates that, in 2004, piracy levels in Colombia for recorded
music reached 71 percent with damages to U.S. industry estimated at
US $51.6 million. Motion picture piracy captured 75 percent of the
market and losses were valued to be around US $40 million.
According to the Business Software Alliance (BSA),piracy of
business software in 2004 resulted in losses for legitimate
industry in Colombia of close to US $81 million. Estimated damage
to U.S. industry due to book piracy was US $6 million in 2004,
according to IIPA. Efforts to combat piracy through raids and other
enforcement measures are hindered by a judicial system that fails
to actively prosecute cases or issue deterrent criminal sentences.
Border enforcement, another facet to piracy, is also weak.


77. Concerns about television piracy have decreased due to a
relative successful licensing and inspections carried out by the
Colombian National Television Commission (CNTV). However, MPAA
reports that there is increasing concern about the continued growth
of optical disc piracy in Colombia. The video piracy rate in the
VHS format caused some audiovisual producers to simply abandon the
VHS market. MPAA member companies returned to the market as
increased purchases of DVD hardware players drove demand for DVDs.
However, optical disc piracy has grown considerably and threatens
the new legitimate DVD market.

Transparency of the Regulatory System:


78. Colombian legal and regulatory systems are generally
transparent and consistent with international norms. Colombia's
civil codes define commercial entities' legal rights and outline
enforcement procedures regarding commercial activities. Enforcement
mechanisms exist, but historically the judicial system has not
taken an active role in adjudicating commercial cases. The 1991
Constitution provided the judiciary with greater administrative and
financial independence from the executive branch, and Colombian
courts have tended to behave more independently and unpredictably
ever since. The Colombian judicial system continues to be clogged
and cumbersome.


79. In 2004, Colombia began moving to an oral accusatory system.
The legal reforms seek to reduce impunity by making criminal
investigations and trials more efficient. The new system separates
the investigative functions assigned to the Office of the Attorney
General from trial functions.


80. The U.S. Department of Justice has provided US $80 million
dollars under the Justice Sector Reform Program (JSRP) to assist
Colombia in the design and implementation of the criminal judicial
system reforms. More than 2,400 human rights prosecutors and
technical experts have been trained and state of the art criminal
forensic equipment has been provided to support their
investigations. In addition, more than 3,500 prosecutors, police
investigators and judges have been trained on the criminal judicial
system reform, with more than 14,000 to be trained by 2006 with
U.S. Government assistance.

Efficient Capital Markets and Portfolio Investment:



81. Following the crisis of 1999, bailouts for failing banks were
partially financed through a controversial tax on financial
transactions. The tax was originally set at 2 percent but has since
been increased to 4 percent for the period beginning in 2004 and
ending in 2007. The tax on financial transactions is applied to
all withdrawals from checking and savings accounts, including
accounts with the Central Bank. Savings accounts for the purchase
of low-income housing, transactions on the inter-bank market, and
the sale or purchase of foreign currency are exempt from the tax.
Electronic securities transactions, including stock market
transactions are also exempt from the tax.

Related Party Transactions:


82. Decree 663 stipulates that the financial institution's board of
directors must unanimously approve loans to a financial
institution's principal officers, their relatives or shareholders
with a five percent or greater stake. Loans to related parties
(except those made to employees as part of health, housing,
education, or similar programs) must not be offered at terms more
attractive than those offered to non-related parties. Financial
institutions are prohibited from making loans to broker-dealer,
fiduciary, and pension fund management subsidiaries.

Stocks and Bonds:


83. The Colombian securities market is small but has enjoyed high
growth in recent years. Only the largest of Colombia's companies
participate in the local stock or bond markets, with the majority
meeting their financing needs through the banking system, by
reinvesting their profits, and through suppliers' credit.
Institutional investors, particularly the private pension funds
that mobilize the largest share of national savings (accounting for
9% of GDP),concentrate their holdings in government paper and AAA-
rated commercial paper. The government also envisions revising the
regulation of private pension funds to allow them to participate
more actively in the capital markets. The Colombian Securities
Commission and Exchange oversees the exchange, regulates market
intermediaries, broker's fees, and the financial disclosure of
listed companies.


84. In 2005, the government sought to design and implement a new
set of policies and reforms to channel savings towards productive
investment. Law 964/2005 regulates public markets and authorizes
the Colombian Securities and Exchange Commission (SEC) to regulate
the development of capital markets. The fifth chapter of the law,
Investors' Protection, addresses some of the most pressing
corporate governance issues faced by Colombian business owners.
Key components of the chapter include regulations regarding the
composition of boards of directors, the interests of minority
shareholders, disclosure of shareholders' agreements, audit
committees, and participation levels of independent board members.


85. The second set of reforms includes a restructuring of the
commissioning bodies that govern the entire financial sector.
Reforms should update the operational regulations to meet
international standards and strengthen enforcement. Adoption of
these standards along with the consolidation of the commissions
should be complete by mid-2006.

Political Violence:


86. The U.S. Secretary of State has designated three Colombian
groups, the Revolutionary Armed Forces of Colombia (FARC),the
National Liberation Army (ELN),and the United Self-Defense Forces
of Colombia (AUC),as Foreign Terrorist Organizations. These groups
have carried out bombings and other attacks in and around major
urban areas, including against civilian targets. In addition, the
United States designated the FARC and the AUC as significant
foreign narcotics traffickers under the Kingpin Act. Terrorist
groups have also targeted critical infrastructure (water, oil, gas,
and electricity),public recreational areas, and modes of
transportation.


87. President Uribe has introduced measures to restore law and
order, intensifying the offensive against guerrilla groups in order
to weaken them militarily and force them into political
negotiations. This has put the guerrilla groups on the defensive,
forcing them to retreat to their jungle strongholds during 2003-04.
Fortunately, the number of civilian casualties in rural areas
associated with the conflict has decreased. Security in the main
urban areas has also as security forces root out of most urban
militia groups. Despite these efforts, evaluations of the FARC,
which is financed by narcotics trafficking, have not demonstrated
significantly weakened military strength. Military deaths totaled
the following for each respective year: 684 in 2002, 605 in 2003,
and 589 in 2004. Military personnel killed between January and
November of 2005 total 617. According to the CUT, one of
Colombia's leading labor unions, approximately 300 union members
and leaders were threatened with death, displaced, or killed
between January and October 31, 2005. Although 2005 is the year
with the lowest number of kidnappings in the last decade, and
around half that of last year (730 as of November 2005),there are
still 5,491 kidnapped persons in the country according to
Fondolibertad and Pais Libre foundations. 1999 was the most violent
year with 3,328 kidnappings. Since then the number of kidnappings
has steadily declined to 1,440 cases in 2004. Piracy, another
crime associated with armed insurgent groups, also decreased from
1,582 cases in 2003 to 928 in 2004. The number of piracy cases as
of November 2005 was 642, according to the Ministry of Defense.
According to the same source, the total number of terrorist acts
has significantly decreased since 2002: dropping from 1,645 in
2002, to 1,257 in 2003, 724 in 2004 and 552 as of November 2005.


88. The demobilization of paramilitary groups has begun through the
government's passage of the Peace and Justice Bill in June 2005.
Over 16,000 combatants, mostly AUC, have demobilized so far. While
narcotics and guerrilla-related violence account for part of the
country's violence, common criminals are responsible for an
estimated 75 percent of the reported murders.

Corruption:


89. The government's Comptroller General estimates that corrupt
activity drains $6 million per year from Colombia's economy.


90. "Transparencia por Colombia", the local chapter of Transparency
International (TI),has implemented a number of anti-corruption
programs including: an ethics program, an entrepreneurial program
and ethics program in an effort to reverse these trends. The
ethics program seeks to develop a managerial development tool for
small and medium enterprises to promote ethical practices and
transparency. The entrepreneurial program seeks to build
methodologies for the effective implementation of ethics strategies
via leadership, entrepreneurial ethics training and the creation of
reporting and consulting systems. A program entitled Integrity
Islands, consisting of curtailing and preventing corruption risks
in specific organizational processes.


91. USAID has also sponsored several anti corruption programs in
Colombia. The current USAID-funded anti-corruption project is a
three-year, $8 million contract aimed at increasing transparency,
efficiency, and public management within Colombia's government
institutions at the national, departmental, and municipal levels as
well as more fully engaging citizens as partners in overseeing the
performance of their government.

Bilateral Investment Agreements:


92. Colombia has negotiated and signed five bilateral investment
treaties: Cuba (1994),Great Britain (1994),Peru (1994),Spain
(1995),and Chile (2000). Of these, only that with Peru has entered
into effect. The agreement with Chile has not been ratified by the
Chilean Congress. The other three have not entered into effect
because the Colombian Constitutional Court declared certain
provisions relating to expropriation unenforceable. Colombia is
currently negotiating other bilateral investment treaties with
Italy, France, Canada, China, Switzerland, Germany, Netherlands and
Japan. A key aspect of the FTA under negotiation is the inclusion
of all the obligations of a BIT in the Investment chapter.

OPIC and Other Investment Insurance Programs:


93. In Colombia, OPIC maintains a portfolio of US $1.7 billion.
More than 3,137 jobs and close to US $1 billion in government
revenues are expected to result from current OPIC-supported
projects. Examples of the type and scale of investment projects
handled by OPIC in Colombia include construction of power plants,
natural gas pipelines, and gold mining operations. OPIC joined
Chase Manhattan Bank and other lending institutions to support K &
M Engineering and Consulting Corporation in the Mamonal project
(now owned by KMR Power Corporation),a natural gas-fired
generation facility being built in Cartagena. This project received
$35 million in OPIC financing and more than US $56 million in
political risk insurance. Other examples of projects currently
supported are two Citibank projects on financial and
telecommunication services worth more than US $67.4 million in
insurance, a Chase Manhattan Bank telecommunications project with
US $200 million in insurance, one Energy Initiatives Inc. gas-fired
power generation project worth US $150 million, and another gas-
fired power generation project by Los Amigos Leasing Company, Ltd.
worth US $200 million. In September 2002, OPIC's board approved a
US $200 million loan guaranty for Citibank to establish a lending
facility for Latin America, with initial focus on Colombia,
Bolivia, Ecuador, Paraguay, Peru and Uruguay. In June 2003, OPIC
provided a US $2.2 million loan to Etek International Corporation
for the establishment of security network management and monitoring
infrastructure in Colombia and other Latin American countries
(Argentina, Brazil, and Chile).

Foreign Trade Zones/Free Ports:


94. The Colombian government provides incentives for importers of
capital goods using a number of drawback and duty deferral
programs. Examples of these programs are the "free trade zones" and
"special import-export systems" located throughout the country.
Using these zones provides importers with duty-free entrance of
capital goods and materials to be used in production of export
goods. The Colombian government regards duty-free zones as poles of
industrial, commercial, tourist and technological development,
focused largely on overseas markets. There are currently 12 duty-
free zones in Colombia, where more than 350 companies operate,
generating exports of approximately US $1.5 billion annually. The
state does not participate in the operation of duty-free zones, but
there are special tariffs established for duty-free zone that
finance operations. Most companies operating in duty-free zones
manage operations with large-scale production and a high degree of
labor specialization.


95. Foreign capital investments in duty-free zones are entitled to
unrestricted repatriation of capital and profits. Investors are
exempt from paying sales tax from the sale of goods and services on
the official exchange market, and from income and remittance taxes
related to foreign sales. Goods traded within duty-free zones are
considered outside of Colombian territory for import-export tariff
purposes. Colombia has made commitments to abide by the provisions
of the GATT Subsidies Code by phasing out any inconsistent export
subsidies, including the import-export system for machinery and the
free trade zones. In compliance with WTO standards, as of January
2007, several of the free trade zone tax benefits will be
eliminated. A 25 percent income tax on businesses operating in
free zones (lower than the usual 35 percent tax) will be imposed
after December 31, 2006. Businesses operating in the free trade
zones would maintain their exemption from the 7 percent remittance
tax, tariffs and the value-added tax. Foreign currency exchange
will remain unrestricted, and additional benefits for commitments
to comply with environmental and technologic standards are being
studied.

Foreign Direct Investment Statistics:


96. Total FDI is expected to reach US $4 billion in 2005. In 2004,
the United States, followed by Spain, Panama and Venezuela ranked
as Colombia's largest investor. The United States has been the
main foreign investor in Colombia since 1999. In 2004, U.S.
investment in Colombia reached US $874.2 million, representing 43
percent of total FDI that year, while the stock of U.S. investment
in Colombia between 1994 and 2004 amounted to approximately US $4.3
billion according to Proexport/Coinvertir. U.S. FDI in Colombia is
primarily in the manufacturing, mining and wholesale sectors.

END