In response, Colombia argued that the imports affected by the compound tariff constitute “illicit trade” as they are imported at “artificially low prices” in order to launder money. In Colombia's view, Article II of the GATT 1994 does not apply to illicit trade and, therefore, the panel should reject Panama's claims under this provision. In addition, Colombia argued that Panama failed to make a prima facie case that the compound tariff is inconsistent with Article II:1(a) and (b), first sentence, of the GATT 1994.
The World Trade Organization has said that the Colombia's decision to impose import duties on textiles, apparel and footwear from Panama was#
Colombia also argued that, if the compound tariff were found to be inconsistent with Article II of the GATT 1994, it is justified under Article XX(a), as a measure necessary to protect public morals, or under Article XX(d), as a measure necessary to secure compliance with Colombia's laws against money laundering. (SH)
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