EU Challenges Colombia at WTO Over Import Measures for Spirits

The EU filed a WTO challenge last week against Colombia, citing tax and regulatory measures that it claims adversely affect imported spirits, such as whiskies, liqueurs, and cordials. According to the consultations request (DS502), spirits sold in Colombia are subject to either a national excise tax on consumption or a local charge derived from the “fiscal monopoly over spirits.” The tax and the charge are both determined based on a beverage’s degree of alcohol – with any beverage with more than 35 percent alcohol per volume prompting an increase in the tax or charge. Colombia primarily produces spirits such as rum and aguardiente, which have 35 percent or less alcohol per volume, while the EU alcoholic beverage exports to Colombia are made up primarily of whiskies, liqueurs, and cordials, which all tend to fall above this alcohol threshold. Brussels therefore argues in its consultations request that the fiscal regime, while “on its face origin neutral,” actually leads to an “unjustified imposition of a higher fiscal burden on like or directly competitive and substitutable imported spirits than the one applied on domestically produced spirits such as rums and aguardientes.” The European Union claims that as a result of such policies, Colombia...