Overview

The Defense sector in Colombia offers opportunities for U.S. companies in both public and private procurement. Despite the current Petro Administration’s efforts to implement its strategic plan for Total Peace with criminal organizations, Colombia’s persistent security problems continue to shape the country’s agenda. Key factors that disrupt stability include: high coca production, public safety issues attributed to the guerrilla group ELN (Ejército de Liberación Nacional), the FARC (Spanish: Fuerzas Armadas Revolucionarias de Colombia) with disperse but active factions, BACRIM (Bandas Emergentes y Bandas Criminales) or criminal organizations, and the socio-economic impact from Venezuelan migrants.

All security and defense purchases for the Colombian Armed Forces are made through tenders publicized in Colombia Compra Eficiente, private invitations, and the Colombian Air Force Purchasing Agency (ACOFA). All governmental purchases for this sector are tied to the budget assigned to the Ministry of Defense.

As for Colombian manufactures in the defense sector, only the state entity Military Industry (INDUMIL) can manufacture and commercialize weapons, ammunition, explosives, and blasting accessories by constitutional mandate. Other state-industry members include: the Corporation of Science and Technology for the Development of the Naval and Maritime Industry (COTECMAR); the Corporation of the Colombian Aeronautics Industry (CIAC); and the Corporation for High Technology for Defense (CODALTEC), which focuses on improving technology in the defense sector.

The Colombian Defense Ministry has a budget of approximately USD 10.4 billion, which is equivalent to roughly 10 percent of the total Colombian budget for 2023 (USD 101 billion). Most of the defense budget is designated for operational activities, such as payroll, procurement of basic goods and services, and pensions. About four percent of the total budget (USD 416 million) will be invested in strengthening the security and strategic capacity of the Armed Forces, through the purchase of equipment, hardware, weapons, ammunition, and communication upgrades, and to carry out major scheduled maintenance or replacement for aging equipment. Colombia aspires to develop the local defense sector to reduce the county’s large defense trade deficit; however, efforts are constrained by a limited defense budget. The domestic defense sector is highly underdeveloped, only capable of producing small arms, ammunition, light weapons, and small, basic aircraft and patrol vessels, meaning that the vast majority of the Armed Forces’ needs are acquired through imports.

Current Administration Policy of Total Peace (Paz Total)

Colombian President Petro has made “Paz Total” a central goal of his administration. His proposal is a comprehensive plan that seeks to address the root causes of conflict in Colombia, including poverty, inequality, and impunity. The proposal’s main components are negotiating with all armed groups starting with the ELN, implementation of the FARC Peace Agreement, strengthening the rule of law, disarmament, demobilization, and reintegration of armed groups. This approach demanded a shift in focus, resources, and budget from military operations to social and economic projects and programs.

Guerrilla and Criminal Activity

In November 2021, the United States delisted the Colombian FARC from its list of foreign terrorist organizations.  The peace agreement between the Government of Colombia and the FARC resulted in a significant improvement in Colombia’s security situation; however, FARC dissidents, the ELN, guerrilla rebels, and criminal networks continue to pose serious threats, as bombings, extortion, kidnappings, and violence still surge within the country because of the control they have over the network of drug trafficking left behind by the FARC.  These groups can operate with relative impunity in some regions and areas of cities, where the presence of the state is lacking.

Volatile diplomatic relations and lax border security arrangements with neighboring states complicate Colombia’s security landscape. Poorly policed border regions with Ecuador and Venezuela have traditionally been a stronghold for Colombia’s terrorist organizations and criminal groups that can take advantage of the lucrative trade in illicit goods and substances. Nevertheless, the risk of interstate conflict is lowered by the fact that Colombia is a major U.S. ally in the region, which strengthens its security forces.

Coca Production

In 2022, coca cultivation in Colombia reached a record high of 204,000 hectares, up 43 percent from 2020. Of note, 48 percent of these cultivations are in areas of interest for conservation, including National Parks or indigenous reserves. The Government of Colombia banned aerial spraying in 2015 over concerns that the chemical agent used in spraying was carcinogenic. This policy will prevail throughout the current administration. Even though manual eradication will continue, Petro´s Administration reduced its coca crop eradication goal by 60 percent. The figure for 2023 is 20,000 hectares, compared to last year’s 50,000 hectares eradication goal, following Gustavo Petro’s guidelines, which demanded a profound change in the war on drugs.

U.S. Defense Assistance to Colombia

Under Plan Colombia, significant U.S. funding, technical assistance, and equipment support was provided to Colombian-led counternarcotics programs for drug eradication and interdiction. The Plan expired in 2012, but American support remains critical to Colombia’s Armed Forces, which today mostly comes from the U.S. State Department’s Bureau of International Narcotics and Law Enforcement (INL).

In 2022, Colombia was designated as a Major Non-NATO Ally of the United States. This special status carries economic and military privileges: advantages in the fields of defense trade and security cooperation, loans of material, supplies, and equipment for cooperative research and development, as well as enhanced cooperation in areas of interoperability, building integrity, training, and education.

Through the Foreign Military Sales Trust Fund, the U.S. Department of Defense provides equipment and training to the Colombian Military and Police through military assistance programs. Other sources of funding include the U.S. State Department and programs that it administers, such as INL programs. INL has been the main source of funding for equipment acquisition in Colombia since 1990 through private military consulting firms. These firms operate through an open market competitive bidding system, mainly focused on supporting the National Police for drug eradication/interdiction operations.

The Colombian Congress approved Law 80 in 1993, under which preferential treatment is given to Colombian-made goods and services for security and national defense over foreign-made products. Under Chapter Nine of the National Treatment Caveat of the U.S.-Colombia Trade Promotion Agreement (CTPA), U.S. companies are to be treated as locals when they participate in public bids, eliminating the disadvantage they used to face prior to implementation of the CTPA. Typically, some non-sensitive equipment may be procured through Colombia Compra Eficiente, but most sensitive hardware, which is the majority of purchases, is acquired through private invitations, a process that is not always transparent or easily understood by many foreign companies.

The United States continues to enjoy a privileged relationship with Colombia for military equipment acquisitions; however, competitors from France, Germany, Brazil, Canada, Israel, México, and the United Kingdom are also important players and are increasingly gaining market share. The Colombian Military tends to use standardized equipment and values relationships, quality, warranties, interoperability, and familiarity with the equipment. According to official estimates, the U.S. import market share in 2022 represented 27.6 percent of Colombia’s total imports of military equipment.

The Colombian military maintains high standards for its equipment, which has historically been a great opportunity for U.S. exporters. The United States could lose market share in the future due to more competitive bidding from foreign manufacturers and corruption in the procurement process. U.S. manufactured fabrics are already losing market share in certain sectors such as specialized fabrics for uniforms, which are increasingly being sourced from China.

Leading Sub-Sectors and Opportunities

Colombia continues to be a defense equipment importer via state-owned entities; INDUMIL (arms, ammo, explosives), CIAC (aviation), CODALTEC (technology), and COTECMAR (naval). These entities can be key partners for U.S. companies that are willing to do technology transfers as their new policy is to improve their capabilities and become an exporter to the region; however, Colombia will maintain a large defense trade deficit for the foreseeable future given the highly underdeveloped nature of its local defense sector.

Like other armed forces, Colombia continues to upgrade equipment across its service branches, making it an attractive market for a variety of products and services:

• Small arms and ammunition: including rifles, pistols, and machine guns. They are also looking to acquire new types of ammunition, such as armor-piercing rounds and high-explosive rounds.
• Armored vehicles: tanks, armored personnel carriers, and armored trucks
• Aircraft: fighter jets, attack helicopters, and transport aircraft
• Naval vessels: The Colombian Navy is looking to acquire riverine and maritime watercrafts, such as frigates, corvettes, and patrol boats, as well as maintenance of naval assets docks and facilities, ammunition, batteries for torpedoes, navigation systems, field equipment, amphibious vehicles, and steel for shipbuilding.
• Communication and intelligence equipment: radio communication systems, radars, and surveillance systems.
• Tactical and survival equipment: armored vests, helmet and riot shields, grenades, among others
• Technological equipment: ballistic fingerprint information systems, portable radios, predictive crime models, among others
• Acquisition and upgrade of aerospace capabilities, SIGINT, and COMINT from space (Colombia signed the Artemis Accords with NASA for space cooperation in 2022)
• Technology transfers, data center services, COC, software, and hardware, cybersecurity
• Upgrades, parts, and support for Blackhawk, Huey, Airbus, Bell, Cessna, ATR, CN 235, and ATR-42 fleets
• Construction of Command-and-Control Centers in Bogota and other cities
• All types of equipment used for demining, especially light hand-held devices to be used in rugged terrain
• Artillery: modernization of existing equipment and possible purchase of additional systems
• Equipment for manual eradication of illicit crops
• Combat material and equipment for special forces, anti-explosive groups, and information and communication technologies to integrate intelligence information systems
• Construction of the new headquarters for the security, and defense sector (Fortaleza Project) by 2026, technological services, integrated communications, cyber defense capabilities, cybersecurity material, and data centers
• High tech medical equipment and devices

Customs, Regulations, and Standards

The majority of defense and military equipment have no tariffs due to the implementation of the CTPA.  Companies are encouraged to check the Harmonized Code (Schedule B) to better understand the tariffs and taxes they would have to pay to export to Colombia. Corruption and lack of transparency in public procurement are the largest non-tariff trade barriers for American companies in Colombia.

Trade Events

ColombiaMar, March 8th – 10th, 2023 https://colombiamar.co/

Feria de la Seguridad Integral July 5th – 7th, 2023 (annual)  https://congresoccs.org.co/

F-Air: Rionegro, Antioquia July 12th – 16th, 2023 (biannual) https://f-aircolombia.com.co/

Feria Internacional de Seguridad, August 16th – 18th, 2023 (annual) https://securityfaircolombia.com/ 

Fire Expo Latam, Medellín, September 20th – 21st, 2023 https://fireexpolatam.com/

Expodefensa; Bogotá, Colombia November 27th – 29th, 2023 (biannual) https://www.expodefensa.com.co/

For additional information, including market analysis, trade events, and the products and services that the U.S. Commercial Service can provide to help you succeed in the Colombian market, please contact:

U.S. Embassy Bogotá

Lina Contreras

Commercial Assistant

Lina.contreras@trade.gov  

+57 (322) 729-2528

https://www.trade.gov/colombia