Frequently Asked Questions

What is COL-RICE?

Colombia Rice Export Quota, Inc. is a not-for-profit corporation formed to administer the tariff-rate quota (TRQ) for rice negotiated in the Colombia-United States Trade Promotion Agreement (TPA) that went into effect May 15, 2012. The company operates as an Export Trading Company (ETC) and has received an Export Trade Certificate of Review from the U.S. Department of Commerce covering its activities in administering the quota. COL-RICE uses an independent administrator to run its TRQ auctions.

How much is the quota and what are the tariffs?

The quota volume consists of 86,270 MT for 2014. Rice within the quota will enter Colombia duty free, while rice imports outside of the quota pay a duty of 80% through the year 2017. The quota volume rises gradually to 166,957 MT in 2029 and is eliminated in 2030. Beginning on January 1 of 2018 the tariff will be reduced in 13 equal annual stages until it is eliminated in 2030. The quota is assigned through an open-tender auction process.

How does the auction operate?

A schedule of COL-RICE auctions is available here. On the day of COL-RICE auctions, COL-RICE's independent administrator accepts electronic bids which specify the amount of quota rights and the price per metric ton that bidders would like to bid on. The quota is awarded to bidders offering the highest price per metric ton until the full amount of quota available in the auction has been allocated. Detailed auction instructions and eligibility requirements for participation are available here.

What is an Export Trading Company (ETC)?

An Export Trading Company is ". . . a person, partnership, association or similar organization, organized and operating principally for the purpose of (A) exporting goods produced in the United States; or (B) facilitating the exports of goods produced in the United States by providing one or more export trade services." » [15 U.S.C § 4002(a)(4)].

Who are the members of COL-RICE?

Members of COL-RICE are trade associations and rice research and promotion boards representing the rice industries of the United States and Colombia. A sixteen-member Board of Directors appointed by these Associations governs the Company.

How ‘fair’ is the system for companies not on the Board?

The system ensures fairness to all persons and provides no special benefits to companies who have a representative on the COL-RICE Board. The Certificate of Review issued by the Department of Commerce that entitles COL-RICE to operate under the Export Trading Company Act specifically stipulates that members of the Board of Directors may not be involved in determining the results of any auction or in issuing export certificates. Only the COL-RICE Administrator, its independent auditors and legal counsel can be involved in those determinations. The duties of the Board of Directors are to hire an Administrator, to provide general guidance about trade in rice that aids the Administrator in developing the auction system, and to ensure that the proceeds of the auction are disburse in accordance with the terms of the ETC certificate of review. In addition, COL-RICE is required to provide annual reports about its operations to the Department of Commerce and is subject to its oversight.

What happens after the auction?

Successful bidders in a COL-RICE auction may use their quota rights to import rice into Colombia duty-free. The rice must be accompanied by a TRQ Certificate, which will be issued by the Administrator upon request in the denominations that quota holders prefer. The certificates must be presented to Colombian Customs (DIAN) upon arrival of the shipments at the Colombian port.

What happens if a winning bidder can't use the total amount of the quota that it obtains in the auction?

Quota rights, including certificates issued for portions thereof, are fully transferable. If a party cannot use the entire amount of the quota that it obtained in the auction, it can sell or transfer that portion to another exporter, and provisions regarding such transfers are included in the Certificate of Review. Rules for transfer of the certificates can be reviewed on this website.

When will the awarded quota expire?

Certificates issued in the auctions will be valid for entry into Colombia through December 31 of the year in which they were issued.

Does COL-RICE assist bidders in obtaining and shipping rice?

No. COL-RICE’s sole functions are to operate the open-tender auction and to assist the Board of Directors in the allocation of auction proceeds. Successful bidders in COL-RICE auctions acquire rice and arrange for the export. COL-RICE has no role in the acquisition, sale or export of rice.

What are the auction proceeds used for?

Proceeds from the auction are used first to cover the administrative cost of the auction. Of the remaining proceeds, fifty percent are used to fund research projects for thebenefit of the rice industry of the United States and to fund market developmentand/or competitiveness projects for the benefit of the rice production sector ofthe Republic of Colombia.