This is a best prospect industry sector for this country. Includes a market overview and trade data.
The Defense and Security sectors in Colombia offer opportunities for U.S. companies in both public and private procurement. Colombia’s persistent security problems continue to shape the country’s agenda, namely: high coca production and public safety issues attributed to the guerrilla National Liberation Army (Spanish: Ejército de Liberación Nacional, ELN), The Revolutionary Armed Forces of Colombia (Spanish: Fuerzas Armadas Revolucionarias de Colombia, FARC) and FARC dissidents, criminal organizations (Spanish: Bandas Emergentes y Bandas Criminales, BACRIM), and the socio-economic problems from Venezuela.
All security and defense purchases for the Colombian Armed Forces are made through tenders publicized in Colombia Compra Eficiente (CCE), private invitations, and the Colombian Agency of Purchases for the Air Force, ACOFA. All governmental purchases for this sector are tied to the budget assigned by the Ministry of Defense. As for Colombian manufacturers, only the state entity Industria Militar (INDUMIL) can manufacture and commercialize weapons, ammunition, explosives, and blasting accessories by constitutional mandate. Other industry members include- The Corporation of Science and Technology for the Development of the Naval and Maritime Industry (Spanish: Corporación de Ciencia y Tecnología para el Desarrollo de la Industria Naval Marítima y Fluvial, COTECMAR), who works to develop the Maritime and Naval Industry, The Corporation of the Colombian Aeronautics Industry (Spanish: Corporación de la Industria Aeronáutica Colombiana, CIAC) who manufactures and develops the aeronautical industry, and also the Corporation for High Technology for Defense (Spanish: Corporación de Alta Tecnología para la Defensa, CODALTEC) who focuses on improving technology in the defense sector.
The Colombian Defense Ministry has a budget of approximately USD 10.9 billion, which is equivalent to roughly 12 percent of the total Colombian budget for 2022. While most of the defense budget will be designated for operational activities, such as payroll, procurement of basic goods and services, and pensions. About four percent of the total budget (USD 528 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 local industry is capable of producing small arms, ammunition, light weapons, and small, basic aircraft and patrol vessels.
Guerrilla and Criminal Activity
In November 2021, the United States removed Colombia’s FARC from its list of foreign terrorist organizations, recognizing the peace agreement between the Colombian state and the former Revolutionary Forces. The peace agreement with 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.
In 2017, coca cultivation in Colombia reached record high levels (since 2001) of approximately 218,000 hectares. By 2020, this area decreased to 143,000 hectares. Forty-eight 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 decision prevailed during the Petro Administration. However, the Administration will continue with manual eradication.
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 the INL program. 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 goods and services for security and national defense made in Colombia by local manufacturers over goods made by foreign manufacturers. However, under Chapter Nine of the National Treatment Caveat of the U.S.-Colombia Trade Promotion Agreement (TPA), 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 TPA. 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. American companies should inform the U.S. Commercial Service of Embassy Bogotá of their intentions to bid on a Request for Proposal and, if appropriate, apply for formal Advocacy through the U.S. Department of Commerce.
The United States continues to enjoy a privileged relationship with Colombia for military equipment acquisitions. However, competitors from France, Germany, Russia, Canada, Brazil, Israel, New Zealand, 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 2021 represented 30,7 percent of Colombia’s total imports of military equipment (42,8% more than in 2020), France has 52 percent and Germany has seven percent.
The Colombian military maintains high standards for its equipment, which has historically been a great opportunity for U.S. exporters. However, 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.
The National Police is expanding its activity in civilian and urban surveillance. There are opportunities for the improvement of strategic mobility, weapons, security, and protection (armored vests, helmet and riot shields, grenades, among others, and technological developments (ballistic fingerprint information systems, portable radios, predictive crime models, among others).
Like other armed forces, Colombia continues to upgrade equipment in all branches of the military, making it an attractive market for a variety of products and services:
- Acquisition and upgrade of aerospace capabilities, SIGINT, and COMINT from space (Colombia signed the Artemis Accords with NASA for space cooperation)
- 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 terrains
- Artillery: modernization of existing equipment and possible purchase of additional systems
- Riverine and maritime watercrafts
- Tactical and survival equipment and vehicles to better control national territory and sensitive border areas.
- Radio communication 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
- Maintenance of naval assets, ammunition, batteries for torpedoes, navigation systems, field equipment, amphibious vehicles, steel for shipbuilding, and maintenance of docks and facilities.
- Construction of the new headquarters for the security, and defense sector (Fortaleza Project), technological services, integrated communications, cyber defense capabilities, cybersecurity material, and data centers
- High tech medical equipment and devices
Customs, Regulations, and Standards
Import Tariff: The majority of defense and military equipment have no tariffs due to the implementation of the U.S.-Colombian TPA. 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.
- Feria Internacional de Seguridad: Bogotá, Colombia August 24th – 26th, 2022 https://securityfaircolombia.com/
- Expodefensa; Bogotá, Colombia November 27th – 29th, 2023 https://www.expodefensa.com.co/
- F-Air: Rionegro, Antioquia July 12th – 16th, 2023 https://f-aircolombia.com.co/
- ColombiaMar 2023 (dates TBD) https://colombiamar.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
Defense Commercial Assistant
+57 (322) 729-2528