Special Features: International Trade Regulations

Trade barriers (tariffs, non tariff barriers and import taxes)

Traditional policies on trade and economic incentives directed agricultural and manufacturing production toward import-substitution until the end of the 1980's. Today, Panama's, nominal tariff duties are the lowest in the region. Panama averages 9% in tariffs rates.

The country has also made significant progress in eliminating quantitative restrictions. From 1991 to 1996, the Government of Panama enacted a trade liberalization program, with the following initial objectives

• To reduce the ceiling on import tariffs to 40 percent for industrial products and 50 percent for agro-industrial products.
• To eliminate all specific import tariff rates
• To eliminate quantitative, import restrictions for agricultural products and replace them with tariff quota protection.

The Government accomplished these objectives and went further by setting an import tariff ceiling of 15%, effective on January 1, 1998. Some exemptions exist for agricultural products and a few other products such as automobiles.

Panama is a full member of the World Trade Organization, (WTO). However, our import duty structure is significantly lower than the one negotiated for WTO accession.

Custom Valuation

Panama assesses import duties on an “ad valorem” basis. The ad valorem system uses the declared C.I.F. value as the basis for import duty calculations and in some cases utilizes historical price information as a reference.

In addition to the duty, all imports into Panama are subject to a 5 percent transfer or value tax (ITBM) levied on the C.I.F. value, plus import duty, and other handling charges. Pharmaceutical, foods and school supplies are exempt from the ITBM tax.

In 1995, Panama changed it international trade classification system from the Customs Cooperation Council Nomenclature (CCCN) and Brussels Tariff Nomenclature (BTN) to the Harmonized System (HS)

Import Licenses

No import licenses are required in Panama. Any company holding a commercial license can freely import goods into Panama. A commercial or industrial license is required by individuals or companies engaged in commercial or industrial activities.

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