11.6.2003 Official Journal of the European Union L 143/33 (Acts whose publication is not obligatory) COMMISSION COMMISSION DECISION of 20 May 2003 on suspending the examination procedure concerning obstacles to trade, consisting of trade prac- tices maintained by the Republic of Colombia in relation to imports of motor vehicles (2003/421/EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EC) No 3286/94 of 22 December 1994 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community's rights under international trade rules, in particular those established under the auspices of the World Trade Organisation (), as amended by Regulation (EC) No 356/95 (%), and in particular Article 11(2) thereof, Whereas: 1 ) () O] 0 On 7 July 2000 Volkswagen AG lodged a complaint pursuant to Article 4 of Regulation (EC) No 3286/94 (hereinafter referred to as the ‘Regulation’. Volkswagen AG alleged that Community exports of motor vehicles to the Republic of Colombia are hindered by an obstacle to trade within the meaning of Article 2(1) of the Regulation. The alleged obstacle to trade was constituted by the general Colombian tax law of 1996 (as amended) (Esta- tuto Tributario), which provides for a distinction between vehicles assembled or manufactured in Colombia and those manufactured or assembled outside Colombia for the purposes of the application of VAT. This law stipu- lated that the vehicles in the category up to 1400 cc manufactured or assembled in Colombia are subject to a VAT rate of 20 % compared with a VAT rate of 35 % for imported cars. The Commission decided, after consultation of the Advi- sory Committee established by the Regulation, that the complaint contained sufficient evidence to justify the initiation of an examination procedure. Consequently, an examination procedure was initiated on 18 August 2000 (). L 349, 31.12.1994, p. 71. L 41, 23.2.1995, p. 3. C 236, 18.8.2000, p. 4. () The investigation provided sufficient evidence for asses- sing that: — the Republic of Colombia is in breach of its obliga- tions deriving from Article 1I1.2 of GATT 1994. Therefore, the practice contested by the complainant appeared to be an obstacle to trade within the meaning of Article 2(1) of the Trade barriers Regula- tion, — the above described discriminatory VAT regime imposed by Colombia on imported cars causes adverse trade effects within the meaning of Article 2(4) of the Trade barriers Regulation. Accordingly, as a result of the examination procedure, it was found that action was necessary, in the interests of the Community, to remove the adverse trade effects resulting from obstacles to trade maintained by Colombia. In order to ensure the exercise of the Community's rights under international trade rules, it appeared reason- able to explore with the Colombian side the possibility for an amicable solution, also in consideration of the difficult political and economic situation of Colombia. In December 2001, the European Commission and Colombia reached an understanding according to which Colombia committed itself not to increase the present tax differential vis-a-vis imported motor cars up to 1400 cc and to eliminate the abovementioned VAT differential by 1 July 2005. Under these conditions, the Commission committed itself not to initiate WTO dispute settlement procedures as regards the measures covered by the Trade barriers Regulation investigation. The arrangement stated that it remained without preju- dice to the legal position of the European Community and Colombia.