Colombia: New tracking system will help fight contraband sales

Colombia: New tracking system will help fight contraband sales

By Dialogo
February 15, 2012



BOGOTÁ, Colombia – The Colombian economy loses US$200 million annually to contraband sales of liquor, tobacco, and other undocumented products, according to the National Merchants Federation (FENALCO).
But the National Tax and Customs Directorate (DIAN) has taken a major step in its fight against contraband by creating the National System of Information and Tracking (SUNIR), which beginning in November, will track products so officials can understand how domestic and foreign products are smuggled and sold illegally.
“With the new system, all Colombians, retailers and distributors will know which products are legal, genuine, and have paid taxes,” said DIAN Director Juan Ricardo Ortega on Jan. 31, when the National Council on Economic Policy and Planning (CONPES) gave the green light to SUNIR.
Colombia previously relied on a conventional system of seals, which were easily forged, to indicate a product was legal.
SUNIR will consolidate all procedures and systems used to classify the importation, distribution, consumption and export of any goods coming in or out of Colombia.
All of the country’s 32 departments are expected to be in compliance with the system so the state isn’t shorted of any sales tax.
“[The] truly most important [aspect] of this system is that by controlling contraband, the country’s resources will grow, and thus we will have more revenue to invest in social and health [programs],” said Colombian President Juan Manuel Santos.
Santos predicted SUNIR will be “a success that will dramatically help to eliminate contraband in Colombia.”
SUNIR stems from a 2003 World Health Organization (WHO) Convention on tobacco control, which was ratified by Colombia in 2006.
Under the terms of the protocol, Colombia pledges to adopt legal, executive, and administrative measures to effectively eliminate the commercial sale of illegal products, and to control the origin of such items as beer, mixers, liquor, wines, aperitifs, and, along similar lines, cigarettes and tobacco products.
A new strategy

SUNIR’s main short-term goal is to merge information coming from all 32 departments and the Bogotá District with the DIAN and apply a uniform standard for registering, classifying, interpreting and consolidating data.
“With the new system we’ll know in real time what merchandise is legal, and we’ll be able to strike at the core of the smugglers’ operation accurately and effectively,” said Bernardo Escobar Yaver, head of DIAN’s Customs Division.
According to SUNIR’s action plan, released by CONPES, the following steps have been put in place:

Register product information;
Label taxable goods and products;
Count every unit produced;
Enter all related information about where the product originated into the system;
Verify the product’s origin, authenticity and destination;
Generate reports about products subject to sales taxes;
Implement follow-up and monitoring tools.


The system will use a digital tracking code, allowing citizens to track a product through websites, text messages, telephone or cell phone calls in order to ascertain its legitimacy and origin.
“The database to reach this phase of SUNIR has no precedents,” Ortega said. “For the first time, with the [digital] print and the merchandise number, Colombians will know whether what they’re buying is legitimate. A person who doesn’t find a registered digital print for the product will need to notify the government, which is better able to track those [responsible for] distributing the illegal merchandise. However, we’re still working out the details to encourage people to report on the business where they bought the illegal merchandise.”
According to CONPES, tax evasion relating to alcoholic beverages amounted to US$158 million in 2010.
Some of this tax evasion occurs in the popular commercial areas called “San Andresitos,” found in the large cities of Colombia, where merchants sell contraband clothing, cigarettes, liquor, accessories, and technological products at low prices.
David Rincón, a liquor dealer at one of the most popular San Andresitos in Bogotá, said SUNIR represents a major blow to the contraband industry.
“SUNIR will be a simple method to unify tracking and merchandise,” he said. “For some, this will mean their business is in fact over – because it’s true, there’s too much unchecked contraband – and once the system is in place, they’ll lose their money. But for those of us who operate within the law, we have nothing to fear.”
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