Colombia Moves to Overhaul Customs Law as Counterfeit Goods and Unfair Competition Take a Toll

By Castillo Grau Abogados

Colombia is racing to pass a new customs sanctions law before a constitutional deadline expires on June 20, 2026, with trade associations and tax authorities having spent months hammering out a draft that would, among other things, sharpen the tools available to combat trademark counterfeiting and unfair commercial competition from smuggled goods.

The legislation, known formally as the Régimen Sancionatorio Aduanero, or Customs Sanctions Regime, was triggered by a ruling from Colombia's Constitutional Court. In its Sentence C-072 of 2025, the Court struck down key provisions of Decree Law 920 of 2023, which had delegated to the executive branch the authority to issue customs sanctions — a power the Court found belonged exclusively to Congress. The ruling gave lawmakers until June 20, 2026 to pass a replacement. Failure to do so would leave the country without an enforceable customs sanctions framework, a legal vacuum that trade lawyers warn could benefit criminal networks and paralyze enforcement operations.

Two separate bills had been circulating — one introduced by the government of President Gustavo Petro in late October 2025, and another backed by a group of lawmakers aligned with exporters. The texts were ultimately merged into a single initiative, which was socialized with private sector representatives at a meeting organized by the Dirección de Impuestos y Aduanas Nacionales, known as the DIAN, on April 9.

At the heart of the proposed legislation lies an acknowledgment that Colombia's formal economy has been losing ground to a parallel market sustained by smuggled and counterfeit merchandise. Industry representatives have long argued that weak customs enforcement distorts competition, punishing companies that pay tariffs and comply with intellectual property rules while allowing operators trafficking in fake or undeclared goods to undercut them on price. Trademark counterfeiting — the production and distribution of merchandise bearing unauthorized replicas of protected brand identifiers — has been singled out as a particularly damaging phenomenon.

In March 2026, police in Bogotá dismantled a clandestine workshop assembling counterfeit technology products, seizing more than 25,000 units of falsified materials including boxes, holographic seals, and internal labels. Authorities valued the haul at over 2.7 million dollars. Investigators noted that the operation was not isolated, and that similar networks had been disrupted in the preceding months.

Fenalco, the national retailers' federation, has described trademark falsification as one of the most persistent and damaging forms of illegal trade in the country, alongside under-invoicing — the practice of declaring imports at artificially low values to reduce tariff and tax obligations. Both practices function as subsidies for illegal operators, enabling them to sell below cost to legitimate competitors. 

The new bill attempts to address these dynamics through a stricter and more clearly defined sanctions structure. It introduces tougher penalties for conduct associated with smuggling, customs fraud, tax evasion, and related crimes such as money laundering.

Crucially for the business community, it also includes provisions intended to reduce the incentives that currently make counterfeiting and unfair competition attractive — specifically by making the consequences of those practices more certain and more severe. The trade association Analdex, which represents export-oriented companies, has emphasized that predictable enforcement is as important as the severity of sanctions themselves. Businesses operating in gray zones of the current framework, the association has argued, require clear rules to distinguish inadvertent procedural errors from deliberate fraud.

Sources: DIAN, Presidencia de la República; Analdex, Radio Nacional de Colombia.