LAW 677 OF 2001

(August 3)

Official Journal No. 44,509 of 4 August 2001

By means of which rules on exceptional treatments for territorial regimes are issued.

COLOMBIA CONGRESS

DECRETA:

CHAPTER I.

EXPORT ECONOMIC SPECIAL ZONES.

ARTICLE 1o. OBJECT. The purpose of this chapter is the creation of special legal conditions, for the promotion, development and execution of production processes of goods and services for export in the Special Economic Zones of Export that constitute by means of this law within the territorial limits of the municipalities, and their Metropolitan Areas created by law, of: Buenaventura, in the department of Valle del Cauca; Cucuta, in the department of Norte de Santander; Valledupar, in the department of Cesar; and Ipiales, in the department of Narino.

PARAGRAFO. 69 of Law 863 of 2003 >

ARTICLE 2o. DEFINITION. It is understood by Economic Special Zones of Export the spaces of the national territory corresponding to four established border municipalities.

In the previous article, which will be applied, to the new companies that are established, a special legal regime in economic and social matters to promote their development, in the benefit of the National progress, through the export of goods and services.

ARTICLE 3o. GEOGRAPHICAL SCOPE OF OPERATION. The territorial boundaries of each zone shall coincide with those of the municipalities listed in this Law.

ARTICLE 4. PURPOSE. By regulating, interpreting and applying the provisions that make up the regime applicable to economic activities in the areas referred to in Article 1or.; it shall be taken into account that its purpose The only one is to attract and generate new investments to strengthen the national export process by creating special conditions that favor the concurrency of private capital and encourage and facilitate the export of goods and services. services produced in the Colombian territory.

ARTICLE 5o. ACTIVITIES COVERED. The special scheme shall apply to industrial projects which have a direct connection with the purpose defined in the previous Article and whose duration is not less than five years.

However, the industrial projects to be developed using agricultural raw materials must export all the goods obtained with these raw materials from the start of the respective projects.

ARTICLE 6o. USERS. They may be users of the special economic export zones of the legal persons who conclude the contract of admission to the relevant area, regardless of their nationality.

In addition, legal persons who are legally established in Colombia with their own tax identification number, who are legally established in Colombia, will be considered users, who will advance the development, construction and infrastructure of services. basic, technological and civil, as well as those that are dedicated to the training of resources and specialized human potential, within the geographical scope of operation of the special economic zones of export.

ARTICLE 7o. ACCESS CONDITIONS. For an industrial project to qualify as eligible, it must meet the following requirements:

1. The investment should be new and therefore cannot consist of the relocation of domestic or foreign industry.

2. The investment should only be developed within the geographical scope of the municipalities declared as Special Export Economic Zones.

3. The minimum investment must be one million dollars from the United States of America (US$1,000,000) during the first two years, a figure that will have to be increased to one and a half million dollars from the United States of America (US$1,500,000). in the third year and finally will be increased to two million dollars from the United States of America (US$2,000,000) in the fourth year.

4. The investment must be completed within the first years of the project, in accordance with the commitments made in the respective admission contract.

5. At least eighty percent (80%) of the company's sales must be destined for the external markets.

6. Assume the obligation to comply with quantifiable commitments regarding the generation of certain number and type of jobs, incorporation of advanced technologies, chaining with national industry, permanence in the area, clean production and preserving, among others, economic, social and cultural aspects of the area, according to the characteristics of the project.

7. The National Government is empowered to review and adjust the access parameters, in order to ensure compliance with the object and purpose of the Special Export Economic Zones.

B. Legal persons wishing to bring forward projects for the training of resources and specialised human potential, urban infrastructure, road systems, public service networks and in general facilities to ensure the different modes of transport. transport, must meet the following requirements:

1. Description of the project to facilitate the installation of new enterprises that meet the purpose of the special export economic zones as defined in Article 4or. of this law.

2. Study of technical, financial and economic feasibility of the project, demonstrating the robustness of the project.

3. Determination of the composition or possible composition of society.

4. Obtain if necessary and depending on the project, work or activity in question, the respective Environmental License and/or the environmental administrative instrument that corresponds according to the established environmental regulations in effect.

The qualification of the projects mentioned above will be carried out by a Committee composed of the Ministry of Foreign Trade, the National Planning Department and the Mayor of the municipality concerned. In the case of projects using agricultural raw materials, the Committee shall also be composed of the Ministry of Agriculture and Rural Development.

ARTICLE 8o. CONTRACT OF ADMISSION. The industrial projects which qualify as eligible by the Committee established by the National Government, shall enjoy the benefits set out in the first chapter of this Law, once they have subscribed the contract of admission within which the commitments made by the person concerned are defined. In order to subscribe to the contract, the persons concerned must constitute a legal person under any of the modes of commercial society. The Committee has thirty (30) days to approve or disapprove of the contract.

The contracts shall be signed by the legal representative of the company, by the Minister of Foreign Trade, the Director of the National Customs and Tax Directorate and the mayor on behalf of the municipality concerned.

They may also be invited by the National Government to sign special stipulations annexed to the contracts, other authorities which, through the contracts, seek to contribute to the development of the corresponding area.

The application of the special regime shall be conditional, in addition to the requirements set out in the second article of this law, to the fulfillment of the goals set out in the contract to promote the realization of the purposes for which it was created. the zone.

In the contract, commitments, terms, and indicators will be established to assess the progressive fulfillment of agreed goals.

The duration of each contract shall be agreed by the parties, but may not be less than five (5) years and not more than twenty (20) years. The extension of its validity will be subject to a prior assessment of compliance with the agreed objectives. It is up to the Committee to establish the National Government, to analyse the appropriateness of the possible extension of the scheme according to the evaluation of the results obtained with it.

ARTICLE 9o. COMPLIANCE POLICY. Once the admission contract has been signed, the project of which has been eligible, the interested party must constitute a guarantee of value of the Nation-Ministry of Foreign Trade-in order to strengthen the fulfillment of all the commitments entered into in the respective admission contract. The amount of the guarantee will be ten percent (10%) of the total investment.

When in the development of a project the importation of capital goods, machinery, equipment and its parts is required, it must be constituted by the term of permanence of the goods in the country, bank guarantee or insurance company in favor of The Directorate of National Taxation and Customs, up to a hundred percent (100%) of the value of the customs taxes that they would cause if they are imported by the modality of ordinary import. In this case the goods will be placed under restricted provision.

The guarantee is intended to ensure the payment of the customs taxes that are caused, in the event in which the deadlines indicated in the decision of default have not been submitted the goods to the respective mode of import or to their re-export, as well as when the commitments of exclusive destination of the goods for the purposes set out in the contract have been violated.

The introduction into the national customs territory without payment of the customs duties of the goods introduced in the special economic areas of export, the disposal of the same to persons other than those authorized in the legislation customs, or the destination for purposes other than those laid down in the contract, shall result in the apprehension and confiscation of the goods and the application of the penalties of the customs rules in force.

ARTICLE 10. OPERATING PRINCIPLES. following operating principles shall apply within the zones:

1. The benefits of the special scheme shall be effective in respect of users who commit themselves in the admission contract to achieving specific targets within specified time limits. The contract will set out the terms, technical references and indicators to evaluate the progressive fulfillment of the agreed goals. Those who fail to comply may apply for an additional period of time which may not exceed one third of the original period. The selection committee shall decide whether or not to grant it and under what conditions. If it persists in the non-compliance, the Nation-Ministry of Foreign Trade-will declare the non-compliance with the commitments by motion resolution, in which the suspension of all the benefits granted in the contract will be ordered the payment of a fine up to the total value of the guarantee and a period for the goods which have been introduced without the payment of the customs duties to be re-exported or subject to the import method. respective.

2. The enjoyment of the benefits derived from the special regime may also be conditioned, in the contract of admission, to the fulfillment of goals set out in the contract to promote the realization of the purposes for which the zone was created. These goals may be related to volume of exports, generation of certain number and type of jobs, incorporation of advanced technologies, chaining with national industry, permanence in the area, clean production and other aspects. economic, social and cultural priorities identified as priorities by the national or municipal authorities in accordance with their development plans.

3. The benefits referred to in this special scheme may be supplemented by other benefits laid down in laws, ordinances, agreements, decrees, resolutions or other administrative acts. In any case, the distribution of competences between the territorial entities, and in particular the municipal autonomy, will be respected. The above does not prevent the development of the coordination principle by the different territorial entities to the creation of administrative, tax, urban, or any other special conditions that facilitate the compliance with the purposes of each of the zones.

4. Within the zones, the activities of monitoring compliance with the agreements contained in the admission contracts shall be of a later nature and shall be aimed exclusively at the periodic evaluation of the results achieved.

Such activities will be exercised through private external audit mechanisms.

5. The rules governing international trade shall be strictly respected in the implementation of the admission contracts.

6. All public authorities shall endeavour to facilitate the development of the activities within the special economic export zones, they shall presume the good faith of their users and shall not require additional requirements as provided for in this Law. to grant the benefits of the same, in accordance with Articles 83 and 84 of the Constitution.

ARTICLE 11. Nation, the departments and the municipalities, through the competent authorities, will define through interinstitutional agreements the commitments they will make in relation to the generation of necessary and appropriate conditions for the efficient operation of the special economic areas of export. The agreements may be different in each case by reason of the specific characteristics of each municipality. The terms of the corresponding institutional arrangements shall be annexed to the contract of admission to the respective zone. Each territorial entity, through the competent authorities, shall issue the unilateral administrative acts in which it expresses its willingness to comply with each of the commitments entered into, as well as the means and time limits for the doing so.

The competent authorities will define in accordance with their public policies the object of such agreements and will pay special attention to the support that users will require in matters such as the construction of the physical infrastructure, the development and quality of public services, the efficient functioning of the information infrastructure, communications, the presence and effective action of security services. The above does not prevent users from participating in the performance of the corresponding activities and works in the terms that are agreed.

ARTICLE 12. EXTERNAL AUDIT. The industrial and infrastructure projects will have to contract an external audit with a company of recognized prestige, which will review at least once a year the commitments acquired in the contract of admission. Once elaborated, the reports should be forwarded to the Ministry of Foreign Trade and the National Planning Department.

ARTICLE 13. LEASING OF BUILDINGS. The entities of the Public Administration may conclude lease agreements, with industrial users who have concluded an admission contract, on their buildings which are not affected by the payment of their own obligations or social security obligations, for a term equal to the term of the contract, the lease fee of which shall correspond to the payment of taxes and other costs associated with the conservation and improvement of the respective land. At the end of the lease term, the state leasing entity shall not recognise any amount by way of improvements made to the buildings leased under this scheme.

Lease contracts, for which this article deals, may be extended for the duration of the contract of admission.

ARTICLE 14. DURATION. The special regime of the special economic areas of export will be fifty years, at the end of which it may be extended by decree issued by the National Government. The extension of its validity will be subject to a prior assessment that the respective area is meeting the objectives for which it was created. It is up to the Ministry of Foreign Trade, directly or through a special contract, to carry out the evaluation and prepare the relevant report to the President of the Republic.

ARTICLE 15. SPECIAL WORKING CONDITIONS.

(a) Work contracts to be concluded between workers and undertakings which have entered into an admission contract shall be governed by the substantive Code of Work;

(b) Companies which have entered into an admission contract with two (2) or more working shifts may set up days which may not exceed six (6) hours per day and thirty-six (36) per week, without any additional costs. night, not the planned one for Sunday or festive work. Notwithstanding the foregoing, the worker shall earn at least the statutory minimum wage and shall be entitled to a paid weekly rest day which must not necessarily coincide with Sunday;

c) Companies that have signed an admission contract, contributions on the wages of workers directly linked to these companies, the Colombian Family Welfare Institute, ICBF, the National Learning Service and The Compensation Boxes shall be 50% (50%) of those required by labour law, for the five (5) years following their establishment, without prejudice to the right of workers to the total of benefits and services to provide the respective entity.

In order to make this decrease effective, the employer must inform the Ministry of Labor and Social Security of the novelty and must prove the fulfillment of the commitments to generate employment agreed upon in the contract of admission. also prove that they have not engaged in collective redundancies during the previous twelve (12) months. The Government shall regulate the relevant;

(d) In contracts of employment concluded between companies which have concluded an admission contract and their employees, the stipulation of an integral salary shall be valid, provided that the worker is paid more than three (3) legal minimum monthly salaries, and it can be agreed that the recognition of bonuses or commissions for operational results of the company or productivity of the respective worker is agreed within the same;

(e) The Associated Work Companies that are created to meet the demand of the companies that have signed an admission contract, will have as objective the production, marketing and distribution of goods and services, as well as the the provision of individual or joint services by its members;

(f) Companies which have entered into an admission contract for the purpose of developing specific projects in the area may enter into special agreements with the Seine, or with other entities enabling the human resource of the region to be trained and thereby facilitating their incorporation into these projects;

(g) In companies that have entered into an admission contract, contracts of limited-time work may be concluded, which shall be governed by the following provisions:

1. They may be held to work up to eighteen (18) hours a week, without the day being able to exceed nine (9) hours per day.

2. The parties may agree to the value of the remuneration for each hour of work. The salary, in addition to giving back the ordinary work, will compensate for the value of surcharges for festive or Sunday work, that of benefits and benefits such as legal premiums, unemployment and their interest, subsidies, except holidays.

The minimum value of the daytime hour, will be the eighth (1/ 8) part of the daily value of the legal minimum wage, increased by fifty (50%) as a reward for the factors already mentioned in the previous numeral.

3. The work that is to be carried out in the night, will have a surcharge of thirty-five percent (35%) on the value of the daytime ordinary hour.

4. When the day is extended by more than nine (9) hours per day, or eighteen (18) hours per week, the additional work will be settled with a surcharge of one hundred percent (100%) on the value of the ordinary hour.

5. The contract of limited-time work may not coexist with another contract of employment with the same employer, but the worker may conclude with another employer or other employers, a contract of employment under this modality, provided that companies without economic or social ties.

6. The employment contract may be concluded under any of the modalities provided for in the Substantive Labour Code and must always be written in writing. Compensation for unilateral termination without fair cause by the employer comprises loss of profit and emerging damage and will be as follows:

6.1 If this is a fixed term contract, or for the duration of the work, or contracted work, the provisions of article 64 of the Substantive Labor Code, subrogated, shall apply. by the numeral 3 of Article 6o. of Law 50 of 1990.

6.2 If this is an open-ended contract, the compensation shall be determined by multiplying by three (3) the value of the weekly hours agreed, for each year of service, and proportionally per fraction.

7. The Social Security in Health and Occupational Risks of the worker and his/her family, will be covered subject to the provisions of the Law 100 of 1993 or other forms of protection, prior to the approval of the Ministry of Labour and Social Security.

8. Contributions to the pension social security system will be made by the hours actually worked; every forty-eight (48) hours equals one week.

9. The employer must keep a record of the related workers, in which he will record the full name, the identification, the hours worked, the wages paid, the holidays enjoyed.

The Government may determine other records to be made by the employer in the register provided for in this numeral.

10. The consecutive work on Saturday, Sunday and Monday, may be extended to twenty-seven (27) hours per week, without exceeding nine (9) hours per day and without in this case there is a surcharge of the number 5 of this article.

11. The contract of work for hours with limited time may be concluded directly between the employer and the worker. Temporary service undertakings and associations of workers may not contract workers on a mission under this type of contract.

PARAGRAFO. All of the content of this article is of exclusive application to companies that have signed an admission contract to the Export Economic Special Zones.

ARTICLE 16. TAX REGIME.

A. Industrial projects that are qualified as eligible in the Economic Special Zones of Export will have equivalent treatment to industrial users of goods or services, Industrial Free Trade Zones and The following incentives shall be provided, inter alia, by the Services:

1. 13 of Law 1004 of 2005 >

Payments, credits and transfers abroad for the purposes of interest and technical services performed by commercial companies, are not subject to a withholding tax * nor do they cause income tax * and remittances * *, always and where such payments are directly and exclusively linked to the industrial activities carried out by the companies established for the implementation of the projects.

2. In customs matters, special regulations shall be applied for industrial users of goods and services in a free zone, respecting and complying with the commitments to be made under the Cartagena Agreement, in particular those aimed at implementing the Andean Common Agricultural Policy (PACA).

PARAGRAFO. It is understood by industrial projects, those activities intended to manufacture, produce, transform or assemble goods for sale, as well as the provision of services.

B. Infrastructure projects that are qualified as eligible in the Economic Special Zones of Export will be exempt from income tax and complementary, corresponding to the income that they obtain in the development of the activities that they were authorized to exercise within the respective Zone.

ARTICLE 17. PROMOTING SOCIETIES. In each of the zones there may be a promoting society, the function of which will be to represent these areas in the selection committee, as well as to promote and facilitate the operation of the special regime.

CHAPTER II.

MAICAO, URIBIA AND MANAURE SPECIAL CUSTOMS REGIME ZONE.

ARTICLE 18. 1 of Law 1087, 2006. The new text is as follows: > Imports of goods into the Special Customs Regime Zone of Maicao, Uribia and Manaure, except as provided in paragraph 2o of this Article shall be subject only to the payment of an Income Tax Merchandise, which will be collected, administered and controlled by the National Customs and Tax Directorate. The value of the national revenues will be transferred by the Nation to the department of La Guajira, which will be exclusively destined for social investment within its territory.

109 of Law 788 of 2002. The new text is as follows: > The tax rate in this article will be four percent (4%).

PARAGRAFO 1o. This tax will be settled and paid in the form set by the National Government.

PARAGRAFO 2o. The Income Tax on the goods referred to in this Article shall be without prejudice to the application of the excise duty in respect of the Act 223 of 1995 or to the rules which add or modify it, which must be cancelled in port on the taxed products to be introduced to the Special Customs Regime Zone Maicao, Uribia and Manaure to the rest of the national territory. The department shall exercise the respective control.

1 of Law 1087 of 2006. The new text is as follows: > Foreign products taxed with the consumption tax that is covered by Law 223 of 1995 and which are introduced to the Special Customs area of Maicao, Uribia and Manaure under the Franchise mode to be used for third countries by means of the export invoice, shall not generate such taxes, and the health certificate shall be deemed to be approved with the health certificate or the free-selling certificate of the country of origin.

PARAGRAFO 3o. 1 of Law 1087 of 2006 > At least ten percent (10%) of the total of the collection will be allocated to social investment in the area of Bahia Portete-municipality of Uribia.

ARTICLE 19. Create the Development Fund for La Guajira, as a special account without legal status attached to the Ministry of Finance and Public Credit that has the purpose of managing the resources from the income tax to the goods through a Superior Council, composed of a delegate of the Ministry of Finance, a delegate of the Comptroller General of the Republic, the Governor of the Department of La Guajira, the Mayors of the municipalities of Maicao, Uribia and Manaure, a representative of the traders in the region and a representative of the indigenous people.

The National Government shall regulate the operation, composition, appointment of its members, the allocation of the Fund's resources and the control over it.

ARTICLE 20. Except for the income tax on merchandise, imports for exclusive use in the Zone, capital goods, machinery, equipment and parts intended for the construction of works public infrastructure, works for economic and social development, as well as capital goods for the establishment of new industries or the expansion of existing ones in the area.

For the purpose, who intend to import the goods referred to in this Article, they must register with the customs administration of the jurisdiction of the Special Customs Regime Area of Maicao, Uribia and Manure and constitute a a guarantee that the capital goods, machinery, equipment and parts thereof shall be intended exclusively for the purposes specified in the preceding paragraph, in the terms and conditions laid down by the national government for its importation.

ARTICLE 21. The entry and exit of goods from the Special Customs Regime Zone shall be subject to compliance with the customs formalities and requirements established by the National Government.

ARTICLE 22. The provisions of this law shall not apply to imports of vehicles, which shall be subject to the corresponding customs duties and shall be subject to the import arrangements. Ordinary that grants them free disposition.

ARTICLE 23. The introduction of goods from the Special Customs Regime Zone of Maicao, Uribia and Manaure, to the rest of the national territory, will cause customs duties. When the taxes are paid out, the percentage of sales tax that is caused by the respective operation shall be deducted, the percentage of the income tax to the goods that has been cancelled in the import of the goods to the Zone, except that the sales tax has been returned.

For merchants domiciled in the rest of the national territory who have acquired goods pursuant to this law, the sales tax discount that proceeds under the Tax Statute shall be made for the total value of the VAT caused in the operation.

ARTICLE 24. Travelers from the Special Customs Regime Zone of Maicao, Uribia and Manaure will have personal and non-transferable right to enter the rest of the national customs territory, as Accompanied baggage, new items by the value to be fixed by the National Government, with the payment of the following single tax ad valorem:

a) Twelve percent (12%) on the customs value of the goods increased with the value of the consumption tax cancelled by the introduction of the goods to the Zone. This single ad valorem charge shall apply from 1. of July 2000, until 30 November 2001;

b) 9% (9%) on the customs value of the goods increased with the value of the consumption tax cancelled by the introduction of the goods to the Zone. This single ad valorem charge shall apply from 1. of December 2001, until 30 November 2002;

c) Six percent (6%) on the customs value of the goods increased with the value of the consumption tax cancelled by the introduction of the goods to the Zone. This single ad valorem charge shall apply from 1. December 2002.

PARAGRAFO. The liquidation of the lien will be done in the manner determined by the National Government.

ARTICLE 25. The departure of foreign goods from the Special Customs Regime Zone of Maicao, Uribia and Manaure to other countries, will not generate the return of the income tax on merchandise. caused by its import.

CHAPTER III.

SAN ANDRES, PROVIDENCE, AND SANTA CATALINA.

ARTICLE 26. The consumption tax rate that treats the 1995 223 Act for domestic products entering the San Francisco Archipelago department. Andrés, Providencia and Santa Catalina, will be ten percent (10%).

ARTICLE 27. Commercial companies domiciled in the Archipelago department of San Andrés, Providencia and Santa Catalina that meet the requirements laid down in the first chapter, except for contained in literal A numerals 1, 3, and 5 of item 7or. of this law and subscribe to the respective contract of admission, they will have an equivalent treatment to the industrial projects qualified as eligible within the Economic Special Zones of Export. The government will regulate the relevant.

ARTICLE 28. For the application of Article 310 of the Political Constitution, it must be understood by departmental income, all current income of the department, except for resources that are specifically assigned to the constitutional provision.

ARTICLE 29. Delete from article 134 of Law 633 of 2000 the Expression: "article 27 of Act 191 of 1995."

ARTICLE 30. VALIDITY. This law governs from the date of its publication.

The President of the honorable Senate of the Republic,

MARIO URIBE ESCOBAR.

The Secretary General of the honorable Senate of the Republic,

MANUEL ENRIQUEZ ROSERO.

The President of the honorable House of Representatives,

BASILIO VILLAMIZAR TRUJILLO.

The Secretary General of the honorable House of Representatives,

ANGELINO LIZANO RIVERA.

COLOMBIA-NATIONAL GOVERNMENT

Publish and comply.

Dada en Bogotá, D. C., 3 August 2001.

ANDRES PASTRANA ARANGO

The Minister of Finance and Public Credit,

JUAN MANUEL SANTOS CALDERÓN.

The Minister of Foreign Trade,

MARTHA LUCIA RAMIREZ DE RINCON.