Costa Rica WT/TPR/S/1
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IV. TRADE POLICIES AND PRACTICES BYMEASURE
(1) Overview
1. Between the1960s andthemid-1970s, aseries ofimport substitution policies wereimplemented
inCosta Rica. TheMeasures usedincluded highimport duties (including specific duties) ranging up
to150percent, sharply differentiating preferential tariffs forCACM, import surcharges andtariff
andincome taxexemptions. State intervention inawiderange ofeconomic activities increased.
2. Asnoted inChapter I,Costa Ricabegan aimplementing programme offiscal consolidation
andstructural reform inthemid-1980s. Aspartofthispackage, Costa Ricainitiated tradeliberalization
efforts in1986, fouryears before joining theGATT. Intheperiod 1986-90, anexport-promotion
cumimport-liberalization strategy reduced protection andincreased export subsidization. Allimport
tariffs wereconverted intoadvalorem duties andmaximum ratesbrought down to100percent,but
tariff dispersion peaked in1989, mainly duetotheexpansion ofthenumber ofdifferent rates. Tariff
escalation andpronounced discrimination against non-CACM imports wereresponsible, interalia,for
thenegligible increase inimport competition. Export incentives intheform oftaxcredits andtax
breaks toexporters aswellasfree-trade zoneandoff-shore assembly régimes wereestablished. Export
subsidization roseconsiderably through theCATs (taxcredit certificates) and,together withtheCBI
scheme (Chapter II),helped toboost non-traditional exports.
3. Since 1990, efforts havebeenmade toenhance Costa Rica'sinternational competitiveness and
reduce anti-export bias. There hasbeenfurther import liberalization, forexample, through reduction
oftariffprotection toanaverage 10.7percent,andtheelimination in1992oftariffsurcharges applied
forbalance-of-payments reasons. Thetariffstructure, based onthecommon CACM system (with some
ratedifferences) since November 1993, hasalsobeenrationalized.1While thereremains considerable
sectoral variation intariff rates, there isnooverall pattern ofm.f.n. tariff escalation, partly because
ofprotection forrawmaterials within theCACM countries. Restrictive import licensing requirements
were progressively reduced, andfinally eliminated inDecember 1994. Thescope ofexport duties
andtaxes hasbeenreduced, ashasthecoverage ofexport licences. There remain export taxes on
coffee, bananas andmeat. Export subsidies arebeing removed andgreater emphasis isbeing placed
onexport promotion techniques, withserious efforts being made tostreamline export procedures.
4. Theliberalization isexpected tobefurther strengthened byanumber ofchanges currently in
planning. These cover internal taxes, customs procedures, customs valuation, preshipment inspection,
government procurement, import andexport licensing, export quota allocation foragricultural products,
export promotion incentives andtheprotection ofintellectual property rights. However, certain
State monopolies remain inforce, andnoradical action isplanned fortheirelimination intheshort-term.
Thepossibility offurther tariff reductions could beconstrained byCosta Rica'sCACM membership.
Inview oftherecent opening oftheCosta Rican market, aswellastheimplementation ofthe
Uruguay Round Agreements, recourse tosafeguard andanti-dumping measures maynotbeexcluded
inthefuture, although thewidemargin between applied andbound m.f.n. rates(generally 45percent)
provides latitude fortheadjustment oftariffs.2
1Between1990and1993,tariffharmonizationwithinCACMledtoareductionintariffdispersion.According
totheauthorities, tariff dispersion increased again in1994 asaresult ofregional commitments undertaken in
theUruguay Round.
2Nosafeguard oranti-dumping measures have been used inthepastbyCosta Rica.WT/TPR/S/1
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5. Costa Rica'sunilateral trade liberalization efforts havenowbeensubstantially consolidated
bytheapproval oflegislation ratifying theUruguay Round results, theconclusion ofaFree-Trade
Agreement withMexico, andthepromotion ofcompetition andconsumer protection inDecember 1994,
asnoted inChapter II.
6. InApril 1995, Costa Ricaintroduced anumber ofnewtarifff anddomestic taxincreases:
atthetimeofwriting, fulldetails were notyetavailable.
(2) Measures Directly Affecting Imports
(i) Registration, documentation
7. Anauthorized customs broker oragent isrequired toclearalmost allcommercial shipments.
Compulsory recourse totheirservices willbewaived when thenewcustoms regulations ofCACM
(CAUCA II)enter intoforce (section (2)(vii)). InMarch 1992, when theforeign exchange market
wasliberalized, theneedforimport registration withtheCentral Bank waseliminated.
8. CustomsclearancedocumentationrequirementsforgoodsvaluedoverUS$25compriseacustoms
declaration(declaración aduanera ),acommercialinvoice,thebillofladingortheairwaybill,alabelling
certificate (certificado deetiquetado )andacustoms value declaration (declaración delvalor aduanero ).
Anewcustoms declaration form, based onISOstandards, wasintroduced inMarch 1995.
9. Other documentation mayberequired forimports incertain circumstances, forexample, a
certificateoforiginforgoodscoveredbyfree-tradeagreements,anexemptionnote(notadeexoneración )
foritems covered bytariff concession schemes authorized bytheMinistry ofFinance3,acertificate
ofanalysis (forflour, lardandseeds)4oranauthenticated health certificate (forliveanimals, including
pets). Items subject todifferent controls (seealsoSection IV(2)(xiv)) suchasfoodstuffs, medicines,
cosmetics, health products, toxic ordangerous substances andproducts, agricultural pesticides and
veterinary preparations mustbeaccompanied byacertificate ofregistration andanauthorization note
(notadeautorización ),issued bythecompetent Costa Rican Stateagency toallow themtoleavecustoms
warehouses (seebelow).5
10. Feesrelating toimport documentation arediscussed inSection IV(2)(v).
3MerchandiseundertheTemporaryAdmissionRégimealsorequiresanentryandexitdeclaration(declaración
deentrada ysalida )andacertificate ofcustoms guarantee (certificado deprenda aduanera ).Imports under
theFree Zones Régime aresubject toasingle declaration (póliza única )(Section IV(2)(ii)(e)). Nocustoms
declaration isrequired forgoods under these régimes.
4Thiscertificate must besigned bythechemist whomade theanalysis orbeprepared byalaboratory or
aninspection company inthecountry oforigin, andauthenticated byaCosta Rican Consulate.
5Registrationrequirementsfortheseitems,involvingbothdomesticproductionandimports,consistofsubmitting
totheMinistries ofHealth andofAgriculture andLivestock technical documentation from theproducer orthe
sanitary authorities oftheexporting countries. Thelatter needtobeauthenticated bytheCosta Rican consular
authorities; charges aremade forthis(Section IV(2)(v)).Costa Rica WT/TPR/S/1
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11. Allimports mustbestored atthecustoms warehouses (Almacén Fiscal )forinspection. Since
1990alackofstorage capacity inthese warehouses hasobliged theMinistry ofFinance toentrust this
taskto52officially designated enterprises (including afewpublic entities).6
12. Goods intransit, although exempt fromtariffs andother fiscal charges, aresubject toacustoms
services fee.Abond orguarantee must beposted, equivalent toallduties, taxes andother charges
which would needtobesettled ifthetransit goods werenotre-exported. Forgoods tobere-exported
onacarrier different from thatwhich brought thegoods intothecountry, are-export declaration,
accompanied bythecorresponding billoflading orwaybill, mustbepresented tothecustoms authorities
13. TheCosta Rican customs organization, procedures anddocumentation arebased ontheUniform
Central American Customs Code (Código Aduanero Centroamericano ,CAUCA). InJanuary 1993,
Costa Ricasigned theProtocol Modifying theUniform Central American Customs Code (Protocolo
deModificatioón alCódigo Aduanero Uniforme Centroamericano ,CAUCA II).CAUCA IIcovers
thesameissues astheprevious code. Itnowallows domestic legislation toaddress specific regulationary
matters inconformity withthenational interests ofeachcountry. While theimplementing legislation
wasapproved bytheEconomic Affairs Committee oftheLegislative Assembly on28June1994, it
hasstilltobepassed bythefullAssembly.
14. CustomslegislationandrelevantmattersareimplementedbytheGeneralDirectorateofCustoms
(Dirección General deAduanas )oftheMinistry ofFinance, except forimport/export documentation
procedures which arehandled byCENPRO, within theMinistry ofForeign Trade. Asingle-window
system forforeign trade andborder procedures (Sistema deVentanilla ÚnicadeComercio Exterior
ydeTraumatise Fronterizos ),became operational on16November 1994, thusallowing forsimplified
andprompt import procedures similar tothose affecting exports.7CENPRO administers thesystem.
15. Fines maybeimposed forminor infractions and/or mistakes inthefilling outofcommercial
invoices. Anyomission offalsification ofawaybill, billoflading orconsular invoice issubject to
finesranging fromUS$5 toUS$100.8Thenewdraftcustoms law(seebelow) provides forincreases
inthese levels toUS$100 andUS$500.
16. Appeals against decisions taken bytheCustoms canbeaddressed tothecompetent bodies of
theMinistry ofFinance, suchastheTariff Committee (Comité Arancelario ),theNational Committee
ofCustoms Valuation (Comité National deValoración )ortheTaxAdministration Tribunal (Tribunal
Fiscal Administrativo )depending ontheissue (tariff classification, customs valuation, ortaxation
matters). Thebillofthenewcustoms law(seebelow) provides fortheestablishment ofaNational
Customs Tribunal (Tribunal alAduanero Nacional )andaCustoms High Court (Tribunal Superior
Aduanero ).
6Tobecome anofficially designated enterprise, interested firms withnotlessthan10,000 square metres of
usable landandaminimum storage capacity of1,000 square metres must submit arequest totheMinistry of
Finance.ThedepositofaguaranteeofnotlessthanC/10million(US$62,500),aninsurancecontract,afeasibility
study andoffice space notlessthan30square metres forthecustoms officers arerequired.
7Decree 23141, 17March 1994.
8Dunn &Bradstreet Information Services (1992).WT/TPR/S/1
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17. Aprogramme forthemodernization ofCustoms, launched inJanuary 1993, encompasses the
introductionofnewlegislation,simplificationofprocedures,officeautomation,standardizationofcustoms
documents, stafftraining andorganizational restructuring.9Inthiscontext, abilltoadjust customs
procedures andtheorganization oftheCustoms service awaits theapproval oftheLegislative Assembly
(March 1995).10Bymid-1993 thecomputerized Customs Information System (Sistema deInformación
Adnuanero ,SIA), initiated inFebruary 1992, connected anumber ofcustoms offices inthecountry
andallowed, interalia,forimmediate calculation ofdutyandpayment controls, datacollection from
customs documents, accountancy ofthecustoms office andtheupdating ofthecustoms tariff. Staff
training oninternational trade, customs andHarmonized System rules, financed bytheInter-American
Development Bank, isbeing conducted byinternational consultants.
18. Currently, customs clearance takes aminimum ofonetotwodays, depending onthetypeof
merchandise, butthistimeshould bereduced when thecustoms modernization programme starts to
takeeffect.
(ii) Tariffs
(a) Structure
19. Since 15November 1993, Costa Ricahasapplied theCACM common tariff system (Sistema
Arancelario Centroamericano ,SAC), based ontheHarmonized System ofCommodity Description
andCoding (HS).11Currently, thetariff contains 6,107 eight-digit tariff items (compared to2,059
intheprevious tariff nomenclature, NAUCA II).12Toallow thetransposition ofitstariff binding
obligationstotheHS,theCONTRACTINGPARTIESwaivedCostaRica'sGATTArticleIIobligations
untiltheendof1994 (section IV(2)(ii)(c)).
20. TheMinistry ofEconomy, Industry andCommerce (MEIC) isresponsible formodifications
tothecustoms tariff. Thecustoms tariff ispublished bytheGovernment intheofficial journal
"LaGaceta "aswellasbycertain private companies.
21. Allduties areadvalorem, applied tothec.i.f. value ofimports. Customs duties andrelated
levies andcharges (seebelow) arecollected bytheCentral Bank orother State-owned banks onthe
basisoftheinformation contained intheimport declaration. They arepaidpriortocustoms inspection
andtheremoval ofmerchandise fromcustoms warehouses, andanyrevision oftheamount due,because
ofdifferences intariffclassification, customs valuation orapplied tariffs, canbesettled atalaterstage.
9Ministerio deHacienda (1994).
10Aamended textoftheCAM customs regulations (CAUCA II)isexpected tobeapproved bytheEconomic
Affairs Committee oftheLegislative Assembly shortly.
11Law 7346, 7June 1993; Decrees 22593-MEIC-H and22594-H MEIC.
12Theprevious CACM system (Nomenclatura Arancelaria Uniforme deCentroamerica ,NAUCA II)adopted
atCACM level in1985 onthecreation ofanewCentral American Tariff (Arancel Centroamericano), wasbased
ontheCouncil forCustoms Co-operation (CCCN) Nomenclature.Costa Rica WT/TPR/S/1
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22. Import duties constitute thesecond most important source (equal toone-fifth) ofCentral
Government revenue. Between 1990and1993theshare oftariffrevenue inCentral Government income
declined byabout onequarter tosome 19percent, orUS$207 million.13Theauthorities areofthe
viewthatthischange, which isalsoreflected intheratiooffiscal revenue from imports tothetotal
value ofimports (Chart IV.1), waspartly aresult oftherecent trade liberalization. The1994budget
projected collections ofUS$232 million.
(b) Tariff levels
23. Although Costa Rica'scustoms tariff isbased ontheCACM import tariff (Arancel
CentroamericanodeImportación),thejointtariffsystemallowsforsomedifferencesbetweenthenational
tariffs ofitsmembers. PartI(94percentoftarifflines) establishes fourrates, withminima andmaxima
of5and20percent. These areapparently common toall.PartII(4percentoftarifflines) comprises
mainlyagriculturalitems(rice,yellowmaize,vegetableoil,tuna,fertilizers,rawmaterialsformedicines,
pharmaceuticals) withdifferential rateswhich areintended tobeharmonized. PartIII(2percentof
tariff lines) consists ofproducts ofmajor fiscal revenue interest toGovernments; these areexcluded
fromtheharmonization process. Coverage ofPartIIIvaries bymember country; inthecaseofCosta
Rica, PartIIIencompasses motor vehicles, spirituous liquors, petroleum anditsderivatives.
13Figures based onContraloría General delaRepública (1994); seealsoChapter II.WT/TPR/S/1
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24. Rationalization ofthetariff structure wasinitiated byCosta Ricain1987, inthecontext of
thesecondstructuraladjustmentplan(PAEII,1986-1990),andcontinuedunderthecommonautonomous
tariffreduction commitment oftheCACM countries inNovember 1992. Asindicated inChart IV.1,
between 1986and1994thesimple average tariffwasprogressively reduced from42.7to10.7percent.
Table IV.1
Level andstructure oftheCosta Rican customs tariff, 1986-95
(Number oftariff linesandpercent)
Concept 1986 1989 1992 1993 1994a1995
1 Nominal tariff averageb22.3 16.8 15.9 11.6 10.7 11.2
2 Standard deviation 22.2 16.8 15.9 7.0 8.0 10.4
I 0% 0 0 0 0 0 0
II More than0%,upto10% 888 1,071 1,082 1,437 4,009 4,023
III More than10%, upto30% 366 432 461 572 1,783 1,699
IV More than30%, upto40% 160 183 307 46 307 186
V More than40%, upto60% 211 173 24 2 4 171
VI More than40%, upto100% 88 14 5 2 3 3
VII More than100% 0 0 0 0 0 25
Total 1,713 1,873 1,879 2,059 6,106 6,107
a Datacovers HS/SAC items; previous years arebased ontheNAUCA nomenclature.
b Average tariffratessupplied bytheMinistry ofForeign Trade fortheyears 1986, 1989, and1992differ considerably fromthese
rates; these are42.74 percent; 20.97 percentand13.29 percent, respectively.
Source: Ministry ofFinance; Ministry ofForeign Trade (data for1994).
25. TableIV.1indicatesdevelopmentsinthedistributionoftariffratesinrecentyears.InNovember
1994, a21-tier schedule, comprising applied ratesranging from 1to100percentwasinforce. In
1994, onlyabout 8percentoftariff lines(11agricultural and457industrial eight-digit HSitems,
consisting oftextiles; clothing; footwear; motor vehicles, including chassis, bodies, andparts; tyres;
oil;rice; sugar; andmolasses) were subject toratesabove 20percent. Thehighest tariffs of55
and100percentwerelevied ononlyfivetariff items, covering rice(husked, milled) andbodies for
passenger motor vehicles, including lorry cabs(Table AV.1).
26. InlateNovember andmid-December 1994, tariff peaks onfootwear andrawmaterials for
textiles wereeliminated, tobring theratesapplied toallitems contained inPartIoftheCentral American
Customs Tariff within theCACM agreed bandof5to20percent.14Tariffs onclothing wereraised
tothebound levelof55percenton1January 1995, inresponse totheindustry 'sdemand forprotection
against imports.15However, theyaretobeprogressively lowered to25percentby1January 1996.
14MEIC (1994), Decrees 23770-MEIC, 26October 1994; Decree 23928-MEIC, 14December 1994.
15Decree 23654-MEIC, 16August 1994.Costa Rica WT/TPR/S/1
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27. InJanuary 1995, anew28-tier tariffcame intoforce. Most ratesrange from1to100percent.
However, fortwoproduct groups where "tariffication" hasbeenapplied andimport licensing removed
under theUruguay Round Agreement onAgriculture, higher rateshavebeenintroduced; these are
dairy products, with arateof109percentandchicken pieces, with atariff of270percent
(Chapter V(1)).
28. The1994tariffshowed noclearly defined overall pattern oftariffescalation; theaverage m.f.n.
ratesonrawmaterials, semi-processed andfullyprocessed goods were, respectively, 10.2, 8.4,and
12.1percent(Table AV.2). Thiswasconsistent withthepolicy objective ofprotecting rawmaterials
ofCACM origin (Chapter II)andwasmostevident infoodmanufacturing, industrial chemicals, non-
metallic minerals andother industrial goods. However, sectors ofexport interest totheCosta Rican
economyweresubjecttomorepronouncedtariffescalationfavouringlaterprocessingstages(e.g.textiles,
leather products, wood andpaper products).
29. Since early1994, theGovernment andtheprivate sector havebeendiscussing theestablishment
ofauniform tariff levelof15percentexcept forcapital goods andrawmaterials which would enter
dutyfree,thusensuringmoreneutralcross-sectoralprotection.ObligationsrelatingtoaCACMcommon
external tariff could inhibit moves inthisdirection, unless thetariff weretoberevised along thelines
ofCosta Rica'sownpolicy objectives.16Theaction taken byCosta RicainApril 1995seems tomove
against thispolicy direction.
(c) Tariff bindings
30. Onitsentry toGATT, Costa Ricacommitted itselftoreducing almost itsentire customs tariff
fromanimmediately applicable general bound levelof60percentto55percentby1993.17Certain
items (72agricultural and139industrial tariff lines) were exempt from thisgeneral rule. Some of
thesewereimmediately bound, while others weretoreach theirfinalbinding levelprogressively, within
athree- orfive-year period following accession, depending onthecase. Some ofthese levels remain
higher andsome lower thanthegeneral binding level.
16Under Article 26oftheCentral American Agreement ontheTariff andCustoms Régime (Convención sobre
elRégimen Arancelario yAduanero Centroamericano ),Costa Ricacanunilaterally modify itstariff for30days
when faced withfrequent andgeneralized supply problems withrespect torawmaterials andfinished goods,
market disruption, unfair trade practices oranyother emergency. Anylonger period oftariff modification is
subject toCACM authorization.
17Schedule LXXXV, GATT document L/6589/Add.1/Rev.1, 24November 1989. Initial negotiating rights
areheldbyAustria, Canada, theEuropean Union (12), Japan, New Zealand, certain Nordic countries (Finland,
Norway, Sweden), Switzerland andtheUnited States.WT/TPR/S/1
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31. Fortheperiod 26January to31December 1994, Costa Rica'stariffbinding obligations were
waived pending thetransposition ofitscustoms tariffintotheHarmonized System under NAUCA II,
andcompletion oftherelevant Article XXVIII procedures.18InJune1994, Costa Ricasubmitted the
newSchedule LXXXV andinvited interested parties forconsultations. Thetransposition wasfinalized
before theexpiry ofthewaiver andanewListwasannexed totheGeneva (1994) Protocol on
19December 1994.19
32. IntheUruguay Round negotiations, Costa Rica'sbinding commitments werestrengthened.
Between 1995and2004thegeneral levelofbound ratesistobereduced to45percent. Theexceptions
areindustrial andagricultural items, already excluded fromthegeneral levelofbindings intheschedule
ofaccession.Fortheseproducts,theratesremainset,mainlyinaccordancewithaccessioncommitments.
Other commitments, contained inCosta Rica'sSchedule andrelated totheAgreement onAgriculture,
arediscussed inthesections ontariff quotas, safeguard actions andexport subsidies.
33. ActionwasrequiredattheregionalleveltoimplementCostaRica'sUruguayRoundcommitments
oncertain items subject toCACM obligations. Inparticular, foritems subject totariffication, CACM
obligations needed tobewaived pending authorization atregional level. InNovember 1994, Costa Rica
andother CACM members modified therelevant provisions oftheCentral American Customs and
Tariff Agreement (Chapter II)andwereauthorized toimplement theirWTO tariffication commitments
onagricultural products, which involved different tariff bindings among CACM members.
(d) Tariff preferences
34. Asdiscussed inChapter II,Costa Ricagrants preferential tarifftreatment toimports originating
inCACM countries aswellasthose covered under bilateral agreements withtheDominican Republic,
Mexico andPanama. Preferences permit reductions inthem.f.n. ratebybetween 8and100percent.
35. In1992, imports ofUS$198 million, subject topreferential treatment, represented anestimated
lossofUS$47 million intariff revenue (Chart IV.2). Asaresult oftariff reductions atm.f.n. level,
thisamount hasremained basically unchanged since1989, despite theriseby41percentofpreferential
importsfromtheregion.Amongthevarioustariffconcessionorexemptionrégimes,regionalpreferences
were thesingle major cause oftariff revenue losses representing 29percentoftotaltariff revenue
forgone in1992.
18GATT document L/7403, 31January 1994.
19GATT document L/7463/Add.5, 22December 1994.Costa Rica WT/TPR/S/1
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WT/TPR/S/1
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(e) Tariff concessions
36. Since 1985, thenormal rateapplied onrawmaterials orotherproduction inputs maybereduced
to5percentorlessifnosupplies ofthese items areavailable inother CACM countries insufficient
quantity, quality orprice.20However, aproduct-specific approval byaJointCommittee (Comisión
Mixta )isrequired.21Where apersistent lackofregional supplies ofaspecific itemcanbedemonstrated
byaninterested party, theCommittee canrecommend continuous implementation oftheconcession
untildomestic producers provide evidence thatthedeficiency nolonger exists. Inthepast, this
concession wasfrequently usedandaffected soybeans, yellow maize, rice,wheat, kraftpaper, etc.
In1994therewere50orsosuchcases, covering packaging material, metal products (aluminium, iron,
steel), tobacco, vegetable fats,white maize, etc.
37. Since early1992, imports ofmachinery, equipment andinputs fortheagricultural andfisheries
sectors havebeenexempt from payment ofduty; fuelsusedincommercial fishing arealsoexempt.
Rawmaterials usedinmanufacturing inputs foragriculture andfisheries, andforpackaging ofbananas,
areexempt fromallother taxes andcharges butnotfromtariffs (Section IV(2)(v)). Regional supply
conditions,similartothosediscussedabovealsoapply.Theseconcessionswereexpectedtobeeliminated
upon entry intoforce ofthelawincorporating theUruguay Round results intodomestic legislation
(LeydeEjecución delActaFinal,alsodiscussed inChapter II).
38. Importsoftourism-relatedmachineryandequipment(includingaircraftparts),exceptfortransport
vehicles andfuelother thanthose originating inCACM countries, areexempt from tariffs.22
39. PurchasesofforeigngoodsbycertainStateagenciesandentities,andbysomeprivateenterprises
providing public services enter dutyfree.23
20Law7017, 16December 1985. Thistariff concession isapplied byallCACM countries. According to
theauthorities, differences indomestic production patterns andfrequent recourse tothismeasure havecontributed
toincreased tariff dispersion among themselves, particularly withrespect tocommon tariff rates ofPartIof
theCentral American tariff.
21TheCommittee, which meets every 15days, iscomposed ofrepresentatives ofthepublic andprivate sectors
(MEIC, Ministry ofFinance, andtheChambers ofIndustry andAgriculture).
22Law 6990, 30July1985; Law7293, 3April 1992.
23Law 7293, 31March 1992. Theobjective ofthislawistorationalize andreduce existing tariff andfiscal
concessions aswellastoconfine them toproductive activities ofnational interest.Costa Rica WT/TPR/S/1
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40. Three régimes provide duty-free entry forcertain items required intheprocessing ofexport
goods.24These are:
- theFree Zones Régime (Régimen deZonas Francas ),covering rawmaterials,
machinery, parts andequipment;25
- theExport Contracts Régime (Régimen deContratos deExportación ),covering raw
materials, processed andsemi-processed goods, packaging material andother goods,
notdomestically products, related tothecompany 'soperations;
- theTemporary Admission Régime (Régimen deAdmisión Temporal ),suspending the
payment ofimport duties onrawmaterials, components, labelling material, chemicals,
moulds, matrixes, processing machinery andequipment.
41. Thetotalvalue ofimports under tariffconcession andpreferential treatment régimes amounted
toUS$1.2billionin1992.Between1989and1992,theU.S.dollarvalueofimportsundertheserégimes
roseby28percent, while theirshare intotalimports fellfrom 56toabout 50percent.
42. Tariff concessions under theExport Contracts Régime areconsidered asthemostimportant
interms offorgone import dutyrevenue. Between 1989and1992theshare ofitems under thisrégime
ranged fromabout 13percenttomore than14percentoftotalimports. However, inthefirstquarter
of1993itdropped considerably, reflecting thefactthatnonewexport contracts hadbeensigned since
1992. Inthesame period, estimated tariff revenue forgone grew steadily toabout US$30 million,
falling inthefirstquarter of1993 toaround onefifthofthisamount.26
(iii) Tariff quotas
43. Under theminimum access opportunities oftheUruguay Round Agreement onAgriculture27,
tariffquotashavebeenintroducedtoensuretheentryofspecificquantitiesofcertainagriculturalproducts
atfinalbound ratessetat15,30,35,40,45,50or55percent. These ratesaretobeimplemented
progressively between 1995 to2004. During thisperiod, inaddition tothelowering ofthebound
tarifflevels, quota levels should beincreased byaround 67percentingeneral, except forafewitems.28
24Thesections ofChapter IVonother levies andcharges, localcontent requirements, free-trade zones, export
subsidies anddutyandtaxconcessions cover other aspects ofthese régimes.
25Between 1993 and1994 (August toAugust) imports bythefreezones grew bymore than19percent; at
theendoftheperiod theystood atUS$240 million. Thiswasduetotechnological improvements orexpansion
ofalready existing firms, butalsototheestablishment ofnew beneficiary companies. More than5percent
ofimports bythezones areofCosta Rican origin. Such domestic purchases rosebymore than42percentin
thesame period, reaching about US$13 million (CZFE SA,1994).
26Ministry ofFinance, Office ofFiscal Policy (Oficina dePolítica Fiscal ).
27Article 4,paragraph 2andAnnex 5oftheAgreement; PartISection I-BofSchedule LXXXV,
15April 1994.
28Thetariff quota forimports ofmilkandmilkcream sweetened concentrates willgrow by43percent. Zero
increase affects evaporated andcondensed milk, milkserum, dehydrated cheddar cheese andcertain other cheeses
aswellasyellow maize.WT/TPR/S/1
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Thestock exchange foragricultural commodities (Bolsa deProductos Agropecuarios SA,BOLPRO)
isusedforallocating these quotas (Chapter IV.(4)(iv)).
44. Until1July1993, under thepreferential tradeagreement maintained withPanama (Chapter II),
duty-free entry forcertain agricultural andindustrial items wasonlyassured forspecific quantities
atlevels setperiodically either inU.S.dollar value orquantity. Currently, astatistical check applies
onthese items.29
(iv) Import surcharges andsurtaxes
45. Import surcharges (sobretasas alaimportación ),which covered 43percentoftariff linesin
1987, mainly forbalance-of-payments purposes, wereeliminated on30March 1992. Thesurcharges
originally applied atanaverage rateof2.5percent, increasing to10percentin1990.30They did
notapply togoods originating inCACM countries.31
46. Ataxof1percentofcustoms value (Impuesto sobre elValor Aduanero ),wasestablished in
1984. Itisnowincorporated intheimport tariff, andcovered byCosta Rica'sUruguay Round Schedule
ofconcessions. Theproceeds ofthetaxareearmarked forwelfare, medical andchild carecentres.
(v) Other levies andcharges
47. In1994, feesrelating toimport documentation andregistration requirements included consular
legalization fees,costing US$160 forafullsetofshipping documents (commercial invoice andbill
oflading), andcertificates ofanalysis andhealth, costing US$40 each.32Animport declaration form
costC/500(US$3) or67percentmore thantheprice oftheequivalent document usedforexports.
Thecostofaletterofcredit was0.25to0.5percentofthec.i.f.value. Acombined stamp taxcovering
accountants 'stamps (timbre delcolegio decontadores privados )andstamps oftheNational Archives
andCustoms Brokers (timbre delosArchivos Nacionales ydelaAsociación deAgentes deAduana ),
setatafixed amount ofC/72(US$0.45), affects allimports.
48. Portfeesarelevied forcargo handling, mooring andstorage. Those related tomooring and
merchandise handling are45and58percenthigher, respectively, forimports thanforexports. All
feescharged bytheportauthorities arelevied onthebasis ofvolume, except forstorage feeswhich
contain anadditional advalorem element calculated onthec.i.f. value.
49. Customs warehouse andmerchandise handling charges, which arenotregulated bythe
Government, areclose tothefollowing rates: (i)consolidated loads, 0.09percentofthec.i.f. value
eachdayordependingonthenumberofdaysandforhandlingC/3,000(US$19)pertonne,(ii)palletized
load,0.45percentofthec.i.f. value permonth andforhandling C/1,000 (US$6) perpallet. Amonthly
insurance feeof0.05percentonthec.i.fvalue isalsocharged. These charges arealsocollected
bytheCentral Bank orother State-owned banks.
29MEIC (1994).
30GATT document L/6589, 27October 1989.
31Dunn &Bradstreet Information Services (1992).
32Dunn &Bradstreet Information Services (1992); Decree 23188-RE, 14March 1994. According tothe
budget, more thanUS$5 million maybecollected through consular fees.Costa Rica WT/TPR/S/1
Page 49
50. Thestructure ofcharges affecting imports intoCosta Rica, including internal taxes, isillustrated
inTable IV.2formilled rice,laminated steelandpassenger cars. Theadvalorem equivalents ofall
charges combined (excluding freight andinsurance), including theimport tariff, stand at55.7, 33.7and
92.8percent.
Table IV.2
Structure ofcharges onimports ofselected products, 1994
Milled rice Laminated steelaPassenger cara
Description Rate
percentValue Rate
percentValue Rate
percentValue
1Value f.o.b. 100.0 100.0 100.0
2Freight 13.8 13.8 10.0 10.0 10.0b10.0
3Insurance 1.1 1.1 1.4 1.5 5.0b5.0
4Value c.i.f. 114.9 111.5 115.0
5Import duty(onc.i.f. value) 40.0 46.0 14.0 15.6 20.0 23.0
6Other taxes orcharges (specific rate) 0.1 0.0
7Subtotal 161.1 127.1 138.0
8Import licence fee ... ... ... ... ... ...
9Letter ofcredit fee(onc.i.f. value) 0.2 0.3 0.5 0.6 0.5 0.6
10 Customs broker 'sfee(onc.i.f. value)c... 0.0 3.0 3.3 1.0 1.1
11 Consular fees n.a. n.a. n.a. n.a. n.a. n.a.
12 Portfees(specific rate) ... 4.3 ... 0.9 ... 0.0
13 Transport from Puerto Caldera toSanJosé ... 4.9 ... ... ... ...
14 Final value ofimport 170.6 131.9 139.7
15 Sales tax(onfinalvalue ofimport) n.a. n.a. 10.0 13.3 10.0 14.1
16 Selective consumer tax(onc.i.f. value) n.a. n.a. n.a. n.a. 47.0 54.0
17 IDA tax n.a. n.a. n.a. n.a. n.a. n.a.
18 IFAM tax n.a. n.a. n.a. n.a. n.a. n.a.
19 Wholesale costinCosta Rica 170.6 145.2 207.8
... Notavailable.
n.a. Notapplicable.
a Calculations made forashipment oflaminated steelsheets weighting approximately 5.5tons, andapassenger car,1300 cc,
ofapproximately 1.09tonnes.
b Estimated values.
c Except forricewhere aspecific rateapplies.
Source: Government ofCosta Rica.WT/TPR/S/1
Page 50Trade Policy Review Mechanism
51. According totheauthorities, general andproduct-specific internal taxes affect imported and
domestic goods equally.33Asdiscussed earlier, alltaxes aresettled withtheCentral Bank orother
State-owned banks.
52. Thesalestax(Impuesto sobre lasVentas ),introduced in196734,islevied atasingle rateon
virtually allgoods andservices, regardless oforigin.35Between 1991 and1994 itwasprogressively
reduced from 13to10percent.36Acurrent taxreform package proposes toincrease therateto
15percent.37Forimports, salestaxiscalculated onthesumofthecustoms value pluscustoms duties,
theselective consumption tax,customs warehouse feesandanyothercharge thatappears inthecustoms
clearance certificate. Fordomestic goods andservices, itapplies tothenetsalespriceplustheselective
consumption tax,whenever applied. Thesalestax,themostsignificant source ofrevenue forthecentral
Government, provided 35percentoftotalcurrent income orUS$373 million in1993.38Since 1985
thisshare hasvaried between 19and36percent. The1994Budget estimates projected salestaxreceipts
ofUS$350 million, reflecting thereduction intherate.
53. Theselective consumption tax(Impuesto Selectivo deConsumo ),introduced in1964, currently
applies to24percentoftariff linesat17ratesranging from 5to75percent.3993percentoflines
affected, mainly industrial goods, aresubject toratesofupto24percent; 64percentbearratesof
10,12or15percent. Only 54items (around 5percent) arecharged ratesof47percentormore.
Rates canbemodified byupto15percentevery sixmonths. Forimported goods, thetaxiscalculated
onthec.i.f. value, pluscustoms duties, consular andpostal charges. Fordomestic goods, thebasis
isthesalesprice charged towholesalers.
54. Theselective consumption tax,thethirdmostimportant source ofCentral Government revenue,
supplied about 16percentoftotalincome orUS$168 million in1993.40Between 1989 and1993
itsshare intotalgovernment income remained relatively stable. However, in1994, theGovernment
isestimated tohavecollected US$212 million fromthistax;thisriseisexplained bygrowth inimports.
33Tentaxesgeneratemorethan90percentoffiscalrevenue.Nevertheless,thetaxstructureremainscomplex
asitcontains more than150different taxes which provide lessrevenue thantheexpenditure required fortheir
administration. TheMinistry ofFinance hasproposed theelimination of60suchtaxes within atwo-year period.
Abill(Proyecto deAjuste Tributario ),currently withtheLegislative Assembly, isexpected toeliminate 26taxes
immediately after itsentry inforce.
34Law 3914, 17July1967.
35Around14percentoftheeight-digitHStariffitemscontainedinCostaRica'scustomstariff(450agricultural
and285industrial goods) areexempt from thetax.
36Law 6826, 8November 1982 asamended byLaws 7218, 16January 1991 and7293, 31March 1992.
The10percentratewasimplemented on1January 1994.
37Latin American Economy andBusiness, November 1994.
38Figures based onContraloría General delaRepública (1994).
39Law 3282, 21April 1964; Law 4961, 10March 1972; Law 6789, 3August 1982; Law 6820,
3November 1982; Law7293, 31March 1992.
40Contraloría General delaRepública (1994).Costa Rica WT/TPR/S/1
Page 51
55. Apart fromexports, exemptions frompayment ofsalesandselective consumption taxes cover
imports under theFreeZone(for10years only), Export Contracts41andTemporary Admission régimes
products contained intheBasket ofBasic Consumer items; certain inputs foragriculture, fisheries
andthepharmaceuticalindustry;itemsimportedbycompaniescoveredbythetourismincentivesrégime;
medicines andmedical equipment; anditems purchased bytheexecutive, legislative andjudicial
authorities.42Thislastexemption applies onlyinrespect oftheselective consumption tax.
56. TheIFAM (Impuesto delInstituto deFomento yAsesoría Municipal )tax,introduced in1961,
andtheIDA(Impuesto delInstituto deDesarrollo Agrario )tax,introduced in1982, arecollected mainly
onalcoholic beverages, certain bottled waters andcigarettes.43Therevenue isusedtofinance the
activities oftheInstitute ofMunicipal Development andCounselling (IFAM) andtheAgrarian
Development Institute (IDA).
57. TheIDAtaxisapplied atratesof2.5percentoncigarettes, 5percentonbeers, 8percent
onfermented beverages, whiskies, rum, ginandother spirituous beverages, and10and14percent
onbottled waters containing sweeteners. Itisassessed onthec.i.f. value plustherelevant amount
oftheselective consumption tax.TheIFAM taxischarged atauniform rateof10percentonthe
c.i.f. value plustheimport duty. There arenoexemptions from thepayment oftheIDAorIFAM
taxes.
58. Twotransfer taxes, introduced in1987, affect transport equipment suchasmotor vehicles,
aircraft andpleasure boats.44Thetaxonusedvehicles (Impuesto alTraspaso deVehículos Usados )
islevied at5percentontheimport value andthetax-exempt vehicles tax(Impuesto alTraspaso de
Vehículos Exonerados )isapplied atarateof30percentonthevalue citedinanofficial listpublished
bytheMinistry ofFinance. According todatafrom theNational Accountancy Office (Ministry of
Finance), between 1991and1993thesetaxes, together withthevehicle ownership annual tax(Impuesto
alaPropiedad deVehículos ),represented anaverage ofUS$23 million eachyear. These taxes were
expected tocollect US$31 million in1994.
59. Acement consumption tax(Impuesto alconsumo decemento ),introduced in1983, ischarged
at5percentonthesalesprice ofcement. Sales forsocial purposes (e.g., forworkers 'housing) and
exports areexempt. Itwasexpected tocollect US$126,250 in1994.
(vi) Preshipment inspection
60. Currently, nopreshipment inspection system isusedbyCosta Rica, although itisunder
consideration.
41Thistaxconcession alsoincludes domestically purchased goods which areincorporated intotheexported
product.
42Decree 21561-H, 28August 1992.
43GATT document L/6050, 20October 1986.
44Law 7088, 30November 1987.WT/TPR/S/1
Page 52Trade Policy Review Mechanism
(vii) Customs valuation
61. Since 1985Costa Ricahasusedamixed customs valuation system.45Itcombines methodologies
provided under theBrussels Definition ofValue46andArticle VIIoftheGATT. Although the"normal
price" (Brussels Definition) isthebasis forcustoms valuation purposes, theprice declared onthe
commercial invoice orrelevant documentation isalsoaccepted. Thenormal price canbe:thenormal
commercial price under fully competitive conditions (precio usual decompetencia ),theestimated
transaction price (precio probable decompraventa ),therealtransaction price (precio efectivo de
compraventa )andtheprice setonthebasis ofrental contracts (precio determinado conbaseenel
contrato ocontratos dealquileres ).Apart fromthese methods, noother instruments (e.g., reference
orminimum import prices) areused.
62. TheCustoms authorities cancheck, verify andmake necessary adjustments tothedeclared
customs value, bymeans ofadministrative resolution, within 90daysfollowing thepayment ofimport
duties andcharges.47Asmentioned earlier, appeals against valuation decisions canbeaddressed
subsequentlytotheCustomsauthorities,theNationalCommitteeofCustomsValuation(ComitéNacional
deValoración )andtheCommittee onAdministrative Disputes (Comité Contenciosa-Administrativa ).
63. Anewcustoms valuation regulation (Reglamento deValoración Aduanera ),currently under
preparation attheCACM level, should enter intoforce soon. Itistoincorporate theprovisions of
theUruguay Round Agreement oncustoms Valuation intodomestic legislation, placing greater emphasis
onthedeclared transaction value thanunder thepresent method. Preparations forimplementing the
newrulesinclude therestructuring oftheCustoms Valuation Department (Departamento deValoración
Aduanera )oftheDirectorate General ofCustoms (Ministry ofFinance); training courses foritsstaff
byinternational consultants; andtheacquisition ofcomputer andtelecommunications equipment
necessary forrunning thedatabase required forthenewsystem.
(viii) Import prohibitions
64. Costa Rica operates import prohibitions onhealth, security andenvironmental grounds.
Consequently, imports ofpsychotropic substances, narcotics, illicit drugs, mercury-based fungicides
against coffee plant diseases, diethylstilboestrol, firearms, chemical weapons, certain dogs(e.g.the
American PitBullTerrier andtheStaffordshire Terrier), ozone depleting substances prescribed by
theMontreal Protocol andendangered species offauna andfloralisted under CITES areprohibited.
Imports ofusedbagsandallother types ofusedcontainers, including agricultural products packed
insuchmaterial, arebanned.48
45Law 7005, 27September 1985.
46Under thismethod, thevalue fordutyistheso-called normal price (precio normal )ofthemerchandise,
which istheprice thatthegoods would fetch, atthetimewhen thedutybecomes payable, onasaleunder open
market conditions between aseller andabuyer independent ofeach other (GATT document L/6050,
20October 1986).
47Nodataareavailable onthefrequency, content andnumber ofcases related totheadjustment ofdeclared
value.
48Dunn &Bradstreet Information Services (1992).Costa Rica WT/TPR/S/1
Page 53
65. Abanonimports ofallfoodstuffs containing coffee asaningredient, introduced in1953, has
beenabolished under thelawincorporating theUruguay Round results intodomestic legislation (Ley
deEjecución delosAcuerdos delaRonda Uruguay ,seeChapter II).
66. Newprohibitionsmayresultfromtheenforcementofrecentlyadoptedlegislation49,incorporating
intodomestic legislation theprovisions oftheBasle Convention onTransboundary Movements of
Hazardous Wastes andTheir Disposal, andthepassing intolawoftheRegional Agreement on
Transboundary Movement ofHazardous Wastes (Acuerdo Regional sobre Movimiento Transfronterizo
deDesechos Peligrosos )ofDecember 1992.
(ix) Import licensing
67. Import licensing hasbeenusedformany years toprotect national producers ofagricultural
products. However, since 1991, inlinewithGATT accession commitments (Chapter II),theproduct
coverage oftherégime hasbeenprogressively reduced. Forexample, import licensing requirements
onsugar, sorghum, beans, bovine meat, cattle, visceras, leather, fat,flours andonions wereabolished
during thisperiod.
68. Until theywereeliminated bytheUruguay Round implementing legislation, 51four-digit HS
items (agricultural andtextile products) werecovered byanon-automatic import licensing régime aimed
atprotecting domestic production. These prior import authorizations weregranted whenever itwas
estimated thatnational producers could notmeet domestic demand. Milk andproducts thereof,
originatinginCACMorcountrieswithwhichCostaRicamaintainspreferentialagreements,wereexempt
from import licensing requirements.50
69. Thefollowing institutions andproducts were involved inimport licensing procedures: the
MEIC fordairy products, sisalropeandfibres, jutefabrics andbags, theMinistry ofAgriculture and
Livestock forpoultry products, theNational Seeds Office (Oficina Nacional deSemillas ,ONS), for
seeds; theNational Production Council (Consejo Nacional deProducción ,CNP), forpigproducts,
certain beans (frijoles ),wheat, white andyellow maize, tobacco, theCoffee Institute (ICAFE) forcoffee
inallforms, andtheNational RiceOffice (Oficina Nacional deArroz ,ONA, forriceinallforms.
However, under theUruguay Round implementing legislation, remaining licensing requirements were
tariffied witheffect from 1January 1995.51Nolicensing requirements, other thanthose relating to
thedistribution oftariff quotas nowapply inCosta Rica. These licences areissued byCOMEX on
thebasis oftitlesorbonds auctioned inthestock exchange foragricultural products (BOLPRO) and,
according totheauthorities, areinconformity withtheprovisions oftheAgreement onImport Licensing
Procedures.
(x) Import quotas
70. Noquantitative restrictions currently apply toimports.
49Law 7438, 6October 1994.
50Article 2,Decree 20578-MEIC, 9July1991.
51Law onImplementation oftheUruguay Round Agreements, No.7473, 20December 1994.WT/TPR/S/1
Page 54Trade Policy Review Mechanism
(xi) State trading
71. Costa Ricahasnotsubmitted anynotification under paragraph 4(a)ofGATT Article XVII,
covering State-trading activities.
72. According totheauthorities, theCNPistheonlypublic entity involved intrading andmarketing
activities (Section IV(4)(iv)). Private importation ofyellow maize hasbeenpossible since 1992. In
late1994, theCNP'sactivities covered rice(together withtheONA)52,wheat, yellow maize anddried
beans. Table IV.3provides details ofCNP'strade-related activities withrespect tothese items for
theperiod 1988-1994. Itslastimports ofyellow maize andricetookplace inDecember 1994 and
March 1995, respectively. Henceforth, theCNPisexpected toimport wheat, flourorother derivatives
onlyincaseoflackofsupplies.53TheCNPusespublic procurement procedures suchaspublic tenders,
private tenders anddirect purchases (Section IV(2)(xv)).
73. Since themid-1980s, State involvement inproduction andingoods andservices hasbeen
progressively reduced through thesaleorliquidation ofsubsidiaries oftheStateowned holding company
theCosta Rican Development Corporation (Corporación Costarricense deDesarrollo ,CODESA).54
Table IV.4summarizes theiractivities andaction taken inthisrespect.
74. Currently, State participation intheeconomy appears tobelimited tothepublic entities and
activities indicated inTable IV.5. Asstated inChapters IIandV,certain activities suchaspower
generated from publicly owned waters, coaldeposits, oilfields, hydrocarbons, radioactive minerals
andwireless services canalsobeexploited byfranchised companies thatareauthorized bylaw.55
Although airports, railways andwharves areexclusively State-owned andoperated, asof1993
authorization forconstruction andexploitation ofnewinstallations canbegranted.56
52TheAgro-Industrial Sugar Cane League (Líga Agrícola Industrial deCaña deAzúcar )(seesection ())
andtheNational Rice Office (ONA) areinvolved inmarketing board operations forsugar exports tothe
United States andriceimports inCosta Rica, respectively.
53Decree 23993-MEIC-MAG, 9February 1995.
54Law 7330, 17March 1993. Forexample, shares ofcompanies such asCATSA (sugar andanhydrous
alcohol),CementosdelPacífico(CEMPASA)(cemen t)andFertilizantesdeCentroamérica(FERTICA)(fertilizers)
were soldtoorganized civilgroups such asco-operatives, unions andother associations.
55Forexample, theNational Liquors Company (Fábrica Nacional deLicores ,FANAL), theState-owned
monopoly fortheproduction ofethyl alcohol anditsuseinliquor orindustrial production (including processing
ofrawrums) cangrant franchises forprocessing ofliquors. Since 1984, ninefirms have obtained franchises.
56Article28oftheRegulationonPublicContracting(ReglamentodeContrataciónAdministrativa);Law7329,
25February 1993. (Seealsosection IV(2)(xv)).Costa Rica WT/TPR/S/1
Page 55
Table IV.3
Trading andmarket activities oftheConsejo Nacional deProducción ,1988-94
(Tonnes andorigin ordestination)
Product 1988 1989 1990 1991 1992 1993 1994
Husked rice
Imports (byCNP and
OficinaNacional del
Arroz)27,520.8
US,
Thailand33,486.8
US... ... 36,000.00
US49,382.0
US59,282.6
US,
Ecuador
Wheat
Imports 100,511.9
US132,772.8
US121,911.3
US150,829.2
US132,394.1
US148,906.9
US146,148.8
US
White maize
Imports bytheprivate
sector613.9 ... ... ... 5,000.0 5,250.0
Mexico18,533.5
Mexico
Domestic purchases 46,774.0 42,094.0 31,761.0 23,690.0 12,956.0 7,177.0 5,558.0
Yellow maize
Imports (bytheCNP
andprivate sector)121,879.0 144,633.0 171,147.0
US193,365.0
US207,677.0
US239,001.0
US309,087.0
US
Domestic purchases 1,980.0 2,914.0 462.0 112.0 206.0 23.0 10.0
Dried beans, black
&red
Imports 8,275.9
Mexico,
Argentina,
Chile,
Guatemala6,078.7
US... 9,190.0 ... 7,018.0
Domestic purchases 13,066.09 11,240.0 21,717.32 15,172.0 16,368.43 16,223.49 14,690
Exports 8,725.0 ... 2,509.4
US,
Brazil... ... 7,506.0 ...
... Notavailable
Source: Consejo Nacional deProducción.WT/TPR/S/1
Page 56Trade Policy Review Mechanism
Table IV.4
Status ofCODESA holding companies, 1984-95
Firm Activity Situation
Goods
Agro-industry AGROPALMITO Palmetto processing Sold 1986
ALCORSA Cotton processing Under liquidation process
CATSA Sugar production Sold 1989
CONSOLIDACION Agro-industry Liquidated 1988
DAISA Agro-industry Liquidated 1991
INGENIO GUANACASTE Sugar production Liquidated ...
Fisheries ACUACULTURA Prawn farming Under liquidation process
ATUNES DECOSTA RICA Tuna fishing Sold 1987
ATUNES DEL PUERTO Tuna fishing Liquidated 1988
Light industry AZUFRERA GUANACASTE Sulfate production Liquidated 1980
GUANACAL Limestone extraction Liquidated 1988
PESCA ESCAMA Fishproducts Liquidated 1988
PETROLAC Oilindustry Liquidated 1988
STABAPARI Wood processing for
construction purposesUnder saleprocess
SUBPRODUCTOS DEL CAFE Coffee subproducts Sold 1985
TERRENOS DEORO Gold extraction Sold 1987
Heavy industry ALUNASA Aluminium production Sold 1987
CEMPASA Cement production Sold 1994
CEMVASA Cement production Liquidated 1991
FERTICA Fertilizers production Sold 1994
Services
Financial services BOLSA NACIONAL DE
VALORES
PUESTO DEBOLSA Stock exchange agency Under saleprocess
Trading CONEXPO Marketing goods abroad Liquidated 1988
DISCOCEM Cement distribution Liquidated 1984
MACASA Wood &finished products Sold 1987
MULTIFERT Fertilizers trade Transfer tothepublic sector
andliquidated1987
PANCAFE Coffee products trade Liquidated ...
ZONA FRANCA Operations ofindustrial zones Transfer tothepublic sector 1986
Transport FECOSA Railtransport Liquidated 1988
LACSA Airtransport Sold 1987
NAMUCAR Maritime transport Transfer tothepublic sector
andliquidated1987
SANSA Airtransport Sold 1987
TEMPISQUE FERRY BOAT River transport Liquidated 1991
TRANACO Airtransport Liquidated 1988
TRANSMESA Passenger transport Transfer tothepublic sector 1986
Other services CENTRO DEFERIAS Fairs &conventions centre Liquidated 1988
FLEMAR Maritime freight chartering Liquidated 1987
GUACAMAYA Tourism Liquidated 1988
INMOBILIARIAS TEMPORALES Realestate Liquidated 1991
MINASA Mining Transfer tothepublic sector 1986
SEDEMAT Machinery &Transport Liquidated 1988
... Notavailable
Source: Government ofCosta Rica.Costa Rica WT/TPR/S/1
Page 57
Table IV.5
State involvement intheCosta Rican economy, 1995
A.MONOPOLIES
GOODS
Fábrica Nacional deLicores (FANAL) Liquor production
MINASA Mining
Energy
Refinadora Costarricense dePetróleo (RECOPE) Oilimports, refining, distribution andmarketing
Instituto Costarricense deElectricidad (also incharge of
telecommunications) (ICE)Generation, transmission anddistribution ofelectricity
Empresa deServicios Públicos deHeredia Generation, transmission anddistribution ofelectricity
Compañia Nacional deFuerza yLuzS.A.(CNFL) Generation, transmission anddistribution ofelectricity
Junta Administradora delServicio Eléctrico deCartago Generation, transmission anddistribution ofelectricity
SERVICES
Banking
Banco Nacional deCosta Rica Current accounts anddemand deposits
Banco deCosta Rica Current accounts anddemand deposits
Banco Anglo CostarricenseaCurrent accounts anddemand deposits
Banco Crédito Agricola deCartago Current accounts anddemand deposits
Banco Popular ydeDesarrollo Comunal. Compulsory savings account forworkers
Insurance
Instituto Nacional deSeguros (INS) Insurance
Transport, ports
TRANSMESA Passenger transport
Instituto Costarricense deFerrocarriles Railtransport
Instituto Costarricense dePuertos delPacifíco Portadministration
Junta deAdministración Portuaria deQuepos Portadministration
Junta deAdministración Portuaria ydeDesarrollo Económico dela
Vertiente AtlánticaPortadministration
Telecommunications
Radiográfica Costarricense S.A.bRadio telephony, radio telegraphy andtelephone and
telegraph communications
Gambling
Junta deProtección Social deSanJosé Lotteries
B.ENTITIES WITHOUT MONOPOLY RIGHTS
Consejo Nacional deProducción (CNP) Marketing ofwheat andother seeds
Banco Hipotecario delaVivienda Support ofhousing loans
Instituto Nacional deFomento Cooperativo Promotion ofco-operatives
Instituto deFomento yAsesoria Municipal Credit andconsultancy tomunicipal authorities
Comisión Nacional dePréstamos paraEducación Education loans
Corporación Costarricense deDesarrollo (CODESA) Holding company (seeTable IV.4)
Instituto Nacional deVivienda yUrbanismo Housing allocation andurban planning
a Tobeliquidated.
b ICE'ssubsidiary.
Source: MIDEPLAN.WT/TPR/S/1
Page 58Trade Policy Review Mechanism
75. Abill,submitted totheLegislative Assembly on14September 1993 andcurrently withits
Economic Affairs Committee (Comisión deAsuntos Económicos ),provides fortheprivatization of
theStateliquor company, FANAL. Itisexpected tobeapproved in1995andtheprocess ofprivatization
should startninemonths following publication ofthelaw. Some shares should bedistributed among
employees, while itisintended thatothers besoldthrough public auction. Thisshould allow forsome
competition inalcohol production andtrade. Theenterprises, Radiográfica SAandICE, maybe
privatized inthenearfuture.57Noprivatization plans existfortheStateoilandinsurance companies,
RECOPE andINS.58Criteria forfurther privatization wereincluded intheabandoned Third Structural
Adjustment Programme (PAE III)(Chapter I).
76. Allrestrictions ontherights oftheCNP, theAgro-Industrial Sugar CaneLeague (section (xii)),
ONA, theNational Liquor Company (Fábrica Nacional deLicores ,FANAL) andsimilar bodies to
engage intrading activities were eliminated bythenewCompetition Law(LeydePromoción dele
Competencia yDefensa Efectiva delConsumidor (Section IV(4)(vi)).59
(xii) Import cartels
77. Asmentioned inChapter II,Article 46oftheConstitution doesnotallow anytypeofmonopoly,
including those established bylaw,torestrict thefreedom totrade orcarry outother activities in
agriculture andindustry. TheState isrequired toundertake whatever action isnecessary toimpede
suchrestrictive practices. Law18of9June1915 prohibits anyaction intended tothreaten, restrict
orprohibit freecirculation, trade, manufacturing oragricultural activities within oroutside thecountry.
Fines ofuptoC/20,000 andimprisonment maybeimposed.
78. TheAgro-Industrial Sugar Cane League, aprivate sector non-profit organization (sugar cane
producers andsugar mills), isresponsible forpurchasing, storing anddistributing andexporting sugar
andsugar products. TheLeague hasnoexclusive import rights. TheMinisters ofAgriculture and
Livestock andMEIC participate inthework oftheLeague 'sBoard.
57Latin American Weekly Report, 15September 1994.
58Latin American Economy andBusiness, July1994. In1993 and1994 RECOPE 'smonopoly status was
challengedbytheprivatesectorNationalAssociationforEconomicDevelopment(AsociaciónNacionaldeFomento
Económico, ANFE )which considered itunconstitutional. Alawratifying RECOPEs monopoly, established in
theearly 1970s, wasenacted inAugust 1993. InApril 1994 ANFE appealed totheconstitutional court against
theviolation oftheprinciple offreedom toengage inbusiness inthissector. Theoutcome ofANFE 'ssuitcould
alsoaffect theINSandthetelecommunications monopoly (Latin American Weekly Report, 5May 1994).
59Article 2Title IIoftheBill.Costa Rica WT/TPR/S/1
Page 59
(xiii) Countertrade
79. Countertrade arrangements require a90-day barter licence (licencia detrueque60)granted by
theMEIC, following approval bytheTechnical Commission onBarter, composed ofrepresentatives
oftheMinistry, theCentral Bank andtheChamber ofIndustries.61Imports under barter deals may
onlyberawmaterials, capital goods foruseinproduction oressential consumer products. Foreign
exchange surrender requirements apply when nomerchandise isimported.
80. Recourse tobarter trade arrangements hasbeenintensified since 1983 when theregulations
oftheBarter Trade Lawentered inforce. Themainreasons were: totradewithcountries whose foreign
exchange andpayments régimes favoured barter rather thannormal trade operations; toobtain raw
materials against exports ofmanufactured goods; ortoliquidate coffee surpluses. Nicaragua and
countries,non-membersoftheInternationalCoffeeOrganization,wereamongCostaRica'smostfrequent
partners inthese operations.
81. Between 1990and1994, 10barter arrangements generated exports andimports withanf.o.b.
value ofUS$9 million andUS$7 million, respectively. Apart fromcoffee exports totheUnited States
andEuropean andMiddle Eastcountries, which represented more thantwothirds ofthetotalf.o.b.
value, items suchasbeverage concentrates (Coca Cola, Fanta), vitamin mixtures foranimal feed,
fertilizers, packaging material andtyres weresenttoNicaragua, Guatemala andHonduras. Chassis
forbuses fromArgentina, Brazil, Spain andHungary andbuses fromBrazil, compensating forcoffee
exports, attained 62percentoftheimport value. Imports fromthethree Central American partners
covered bovine meatextracts, cotton seedflour, natural rubber andplastic kitchen andtableware.
(xiv) Standards andother technical requirements
82. InCosta Ricatheformulation andimplementation ofstandards arebased onm.f.n. andnational
treatment principles.
83. Currently, theprivate sector contributes totheformulation ofindustrial standards andthe
elaboration ofregulations through theInstituto deNormas Técnicas deCosta Rica(INTECO), aprivate
institution withpublic sector participation andISOmembership. TheStandards Office (Oficina Nacional
deNormas Técnicas yUnidades deMedida ,ONNUM), oftheMEIC isentrusted withthetechnical
aspects ofstandardization andensures thatlegitimate objectives arepursued inthisarea. Itprovides
legalrecognition oftechnical standards, including those prepared byINTECO, andalsoco-ordinates,
inco-operation withtheCOMEX, work related tointernational negotiations onstandardization.
84. Testing laboratories areaccredited byONNUM. Forcertain products, otherspecialized public
sector agencies alsointervene inthestandardization process. These agencies issue authorizations for
removal ofgoods fromCustoms warehouses, inthecaseofproducts subject tocompulsory registration
andbearing internationally recognized certificates (ofconformity, unrestricted salesandother relevant
health orsanitary provisions), issued inthecountries oforigin.62
60Thelicence isrenewable foranother 90days.
61Law3527,15July1965;Decree14125-MEIC,14Decemb er1982;Dunn&BradstreetInformationServices
(1992).
62These are:theDepartment ofFood Control (Departamento deControl deAlimentos ),(foodstuffs), the
Department ofNarcotics (Departamento deDrogas Estupefacientes, Controles yRegistros ),(every fiveyears
formedicines, cosmetics andhealth products); andtheRegistry ofToxic Substances (Departamento deRegistro
deSustancias Tóxicas yMedicina delTrabajo ),(toxic ordangerous substances andproducts) oftheMinistry
ofHealth;theDirectorate-GeneralforPlantHealth(DirecciónGeneraldeSanidadVegetal),(agriculturalpesticides)WT/TPR/S/1
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85. Costa Ricamainly usesinternational standards suchasthose ofISO, Codex Alimentarius,
International Organization ofLegal Metrology, andtheInternational System ofUnits, aswellasregional
norms, suchasthose ofthePan-American Standards Commission (COPANT), andnorms from
developed countries, especially theUnited States. Around 149compulsory technical regulations are
currently inforce. Sanitary andphytosanitary regulations apply toanimal andvegetable products and
by-products, foodstuffs, medicines, cosmetics, health products, toxic ordangerous substances and
products, agricultural pesticides andveterinary preparations.
86. Ingeneral, domestically produced goods mustmeettechnical regulations inforce. There have
beencases where international standards havebeenconsidered unsuitable forCosta Ricabecause of
lackoftechnology toprove andverify suchstandards. These problems havebeenprogressively resolved
bydeveloping better systems ofquality control. Internationally agreed norms onfluidmilk(Codex
Alimentarius) aretobeadopted soonwhile those onsoaparenotapplied inCosta Rica.
87. Dataoncompliance withstandards foranaverage fourtofiveproducts areverified eachmonth
onthebasisofwarehouse samples.63Theintroduction ofthesingle window forimports (section (3)(i))
should reinforce compliance, asitwillrequire display ofthelabelling certificate (certificado de
etiquetado) orthecertificate ofconformity withdomestic technical regulations.
88. TheFree Trade Agreement with Mexico (Chapter II)establishes procedures formutual
recognitionoftestingproceduresandcertificatesendorsedbybothcountries.Whenbothsystemsbecome
compatible, testing ofeachshipment willnolonger berequired.
89. Themain policy objective forthefuture istheestablishment ofanefficient standardization,
metrology,testingandqualityguaranteesystemwhichcancontributetotheimprovementofbothexported
anddomestically consumed goods. Inthiscontext, theGovernment plans tousetothefullest extent
possible allavailable national resources including universities andpublic andprivate sector institutions
orotherorganizations. Itenvisages thecreation ofanational network oftesting laboratories, thetraining
andaccreditation ofquality inspectors andconsultants, andfinally theestablishment ofquality stamps
andregistration orcertification offirms withguaranteed quality.
90. Thenewcompetition law,(LeydePromoción delaCompetencia yDefensa Efectiva del
Consumidor) wasenacted on20December 1994. Itmakes compulsory theuseofthesame
documentation, procedural, control andother requirements relating tohuman, animal andplanthealth,
public security, theprotection oftheenvironment andquality standards, forallgoods irrespective of
theirorigin. Suchrequirements arenotintended toconstitute barriers totrade. Proposed newlegislation
onphytosanitary protection wasalsosubmitted totheLegislative Assembly inlate1994.
91. Thelegislation stipulates specific labelling requirements foritems other thanfoodstuffs,
agricultural pesticides, animal feed,medicines, cosmetics, health products, pre-packed foodstuff, food
additives andalcoholic beverages. Allproducts mustbelabelled inSpanish anddenominated inthe
metric system. Nospecial requirements fororigin marking apply inCosta Ricawhile alabelling
certificate (certificado deetiquetado ),issued byONNUM must accompany allshipments ofgoods
(imports andexports).
andtheDepartmentforVeterinaryProducts(DepartamentodeInscripción,Constatación,deCalidadyFiscalización
deMedicamentosVeterinarios),(veterinaryproducts)oftheMinistryofAgricultureandLivestock;andtheNational
Seeds Office (Oficina Nacional deSemillas) ,(seeds).
63In1993, ONNUM checked thequality ofgoods suchastextiles, edible oils,electric cables, beers, toilet
paper, ground coffee andtyres; corrected 1,541 setsofbalances andmeasured theweight of1,527 items; verified
whether labels provided correct information for6,775 items; andchecked compliance withquality norms for
goods contained inthebasic items basked (section (4)(iv)).Costa Rica WT/TPR/S/1
Page 61
(xv) Government procurement
92. Asstated inChapter II,Costa Ricaisnotasignatory oftheUruguay Round Agreement on
Government Procurement.
93. Public procurement legislation, applying topurchases oftheCentral Government andthe
Municipal authorities, isfound inthedetailed provisions oftheRegulations onAdministrative Contracts
(ReglamentodelaContrataciónAdministrativa)theMunicipalCode(CódigoMunicipal)andtherecently
enacted laws64onpublic works (LeydeConcesión deObras Públicas )andservice companies65(Ley
deSociedades Anónimas Laborales ).
94. TheProcurement byStateenterprises isgoverned byrulescontained intheRegulation onthe
Functioning ofStateTrading Enterprises (Reglamento sobre elFuncionamiento deEmpresas Estatales
Estructuradas como Empresas Mercantiles ).These enterprises aresimply advised toseekfairand
reasonable pricing, andarerequired toannounce through thedaily press theclosing dates foroffers
tobemade. TheComptroller-General 'sOffice (Contraloría General )canexpostrevise contracts
concluded bythese entities.
95. Thelegislation provides fortransparency bypublication ofcallsfortender, mostly intheofficial
journal, "LaGaceta ".Inprinciple, thelegislation doesnotcontain anypreferential margins or
procedures favouring domestic suppliers orproducts, except for:goods andservices produced bya
solenational producer andwhich areoffered atwholesale price66;andpublic works contracts where
there aresimilar offers bydomestic andforeign bidders.67Theuseofsimilar principles cannot be
confirmed forthepurchases ofpublic enterprises.
96. InCentral Government purchases, boththeordering agency andtheNational Supply Agency
(Proveeduría Nacional )oftheMinistry ofFinance mayintervene. Thelatter isthemain purchasing
body responsible fororganizing allstages oftheprocurement procedure. Itstores supplies, receives
orders byallagencies, andtransmits alladjudications andappeals totheComptroller-General 'sOffice.
TheMunicipalauthoritiesmanagetheirpurchasesindependentlybutcaninformtheComptroller-General's
Office, which hasaccess tothisinformation intheevent ofappeals andadjudications. Whenever
appropriatetheIFAM(section(2))undertakespurchasesformunicipalauthorities(e.g.heavymachinery)
soastoobtain better prices; italsoprovides finance forsuchpurchases.
64Law 7404, 3May 1994; Law7407, 8May 1994.
65Theseenterprises,inwhichtheStatemayholdamaximumcapitalparticipationof20percent,mayprovide,
inter alia,cleaning, surveillance, building maintenance, catering, secretariat, calculation, storage, laboratory
analysis, printing, entertainment, public relations, training andtransport services, aswellasawide range of
professional services.
66Direct purchase procedures areusedinthiscase. Thisprocedure seems tobeused inexceptional cases
suchasthepurchase ofoxygen andacetylene forhospitals (from Almacén Miller ),dynamite (from Lodinsa)
andfuels(fromRECOPE).Nodetaileddataonthistypeofpurchasingareavailablebecausenopriorauthorization
isrequired bytheComptroller-General 'soffice ortheNational Supply Agency.
67Article14ofLaw7404givespreferencetodomesticcontractors.UnderArticle8,foreigncompanieswhich
areawarded apublic work contract must either move theirheadquarters inCosta Ricaorestablish alocal stock
company (sociedad anónima ).WT/TPR/S/1
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97. Sixprocedures, notapplicable toState enterprises, areavailable forcentral government and
municipal purchases ofgoods orservices:
(a) Public oropenbidding, applying tocontracts forvalues exceeding US$31,000, isthe
mostwidely usedprocedure. Itisalsousedforgranting franchises forpublic services
oradjudicating public works contracts. Under Chapter IV,TitleIIIoftheRegulation
onPublic Contracting (Reglamento deContratación Administrativa ),bidders are,in
principle, obliged todeposit aparticipation guarantee (garantía departicipación )
equivalent toanamount varying from 1to5percentoftheir price quotation
(cotización );thewinner ofthebidmust deposit a5percentcompletion guarantee
(garantíadecumplimiento).GuaranteesaredepositedasbondsattheNationalInsurance
Office (Instituto Nacional deSeguros ,INS)oroneoftheState banks;
(b) Itemspecific orselective tendering isusedforpre-qualified bidders;
(c) Competition based onprevious records (concursos deantecedentes) ,which isused
incontracts forprofessional ortechnical services where priceisnotadecisive element.
Under Article 180oftheAdministrative Contracts Regulation, thisprocedure isnot
available forsuch services asnotarial, legal aid,medical assistance, mass media
transmissionorpublicnotices,tradebrokerage,expertiseandotheractivitiesdetermined
bytheComptroller-General;
(d) Thesimpler, private tendering procedure, (licitación privada) ,usedforcontracts of
lessthanUS$31,000;
(e) Directpurchaseorcontracting(contractacióndirecta),usedinexceptionalcircumstances
mainly forpurchases valued atlessthanUS$17,900, goods orservices produced by
asingle national supplier andoffered atwholesale prices items bought frequently or
regularly, exclusive orunique items produced byspecific companies ornotsubject
tocompetition, genuine parts, security devices, armsandammunition, goods provided
bypublic entities withmaximum remittance of10percentofthevalue; printing of
money, fiscal andsimilar value titles; machinery repairs; andemergency
circumstances. Nodataisavailable onpurchases andvalues involved;
(f) Purchase ofminor goods, usedforpurchases ofurgently required goods valued atnot
more thanUS$465. Forthis,alimited fund(cajachica),exists inevery Ministry.
98. Under exceptional circumstances, suchasinnational emergencies, thenumber ofbidders can
belimited.
99. Following analysis ofoffers, bidders 'prices maybeconsidered asunacceptable whenever these
areexcessively high(15percentabove normal market prices) oroutofreach; ruinous forthebidder
orbelow cost; or,constituting dumping prices.
100. Appeals arepermitted foreachpublic tender andaftertheirresolution newoffers, often under
newspecifications, must besubmitted. Depending onthevalue ofthecontract, appeals relating to
central government contracts canbedirected totheadministration, inparticular theNational Supply
Agency (Proveeduría Nacional) ortheComptroller-General 'sOffice.Costa Rica WT/TPR/S/1
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101. AnAutomated Information System (Sistema deInformación Automatizado ),introduced
progressivelyasfromJune1993,allowstheNationalSupplyAgency(ProveeduríaNacional)tomaintain
asuppliers registry (Registro deProveedores )andproducts list(Catálogo deArtículos );tofollow
thedifferent procurement procedure stages; tocollect information ontheprocurement procedures
anditems purchased eachyearbyagency. Thesystem isnowoperational, andterminals should be
installed inallministries bytheendof1996.
102. Overall thepublic procurement market forgoods andservices ofCosta Ricawasworth
US$1.4 billion in1993(Chart IV.3).68Ithasalsobeenexpanding rapidly, although detailed dataare
notavailable. Asanillustration, from1991to1993procurement bytheCentral Government doubled,
reaching US$90 million. Non-professional services became anincreasingly important component.
In1993,procurementrepresentedmorethan40percentoflocalauthorityspending.Themainpurchases
under public procurement in1993weretheCentral Government, localauthorities, public institutions
providingspecializedservices,non-financialpublicentities,financialpublicentitiesandpublicenterprises
established asstock companies (sociedades anónimas) .
103. Between May1993 andApril 1994 purchases bytheNational Supply Agency were carried
outthrough public bidding (168contracts), private tendering (404contracts) anddirect purchases
(4,390 contracts); theyrepresented 45percentofthenational budget expenditure forgoods and
services.69Chart IV.4, which excludes Stateenterprises, constitutes anattempt toillustrate themajor
public sector buyers ofimported items forown-consumption orresale (State trading) purposes, but
further statistics onprocurement methods, origin ofpurchases orsuppliers (domestic orforeign) are
notavailable.
104. Although existing procedures forgovernment procurement seemtohavebeenslowandcostly,
theauthoritiesconsiderthattheoverallexperiencehasbeenpositive.Apublicprocurementbill(Proyecto
deLeydeContratación Administrativa )70wasunder examination bytheLegislative Assembly inlate
1994 andshould bepromulgated asalawin1995. Thisforthcoming law,arevision oftheexisting
system, should cover allprocurement carried outwithpublic funds, including thatofpublic entities
andState enterprises. TheNational Supply Agency istobecome thenationwide supervisory body
onpublic sector procurement. Ingeneral, theproposed changes areanattempt toachieve uniform
andsimpler procedures, based onprinciples suchasunrestricted competition, promptness, transparency
andnon-discrimination.
68Figures based onContraloría General delaRepública (1994).
69Ministerio deHacienda (1994).
70Bill11840 published on13October 1994.WT/TPR/S/1
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Costa Rica WT/TPR/S/1
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(xvi) Local content requirements
105. Local content requirements constitute themain condition forgranting taxcredit certificates
(CATs) under theExport Contracts régime (sections (2)(ii)(e) and(3)(x)). Ashare of35percentin
local content or"national value added" (valor agregado nacional )isrequired toobtain thehighest
bonus rateunder therégime. Otherwise lower ratesapply, based onconcordance tables setbythe
National Council onInvestment (Consejo Nacional deInversiones ).Local content requirements are
expected todisappear by1999, when therégime isscheduled tobefullyeliminated.
(xvii) Rules oforigin
106. Since 1March 1993, theCentral American Regulation onRules ofOrigin (Reglamento de
Orígen Centroamericano deMercancías )hasbeenapplied. Toqualify asCACM origin, aproduct
musteither meetchange intariff classification requirements onthebasisofsubstantial transformation
orhaveaminimum domestic value added of25percent. InCosta Ricasimple precise andeasily
verifiable criteria areusedfordetermining origin. A35percentofdomestic value added inthecountry
oforigin isrequired forpreferential arrangements other thanCACM. Anumber ofitems processed
from rawmaterials ofnon-CACM origin areexempt from theminimum requirement of25percent
regional content.71InMarch 1995, thelistofthese items wassubject tonegotiations atregional level.
71MEIC (1994).WT/TPR/S/1
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(xviii) Anti-dumping andcountervailing dutyactions
107. While Costa Ricafirstintroduced legislation inthisareain1959, current provisions were
establishedin1993.(Thereisnomodificationtoanti-dumpingrulesintheUruguayRoundimplementing
legislation butspecial legislation isexpected in1995). These consist ofCACM provisions which are
based onrelevant rulesoftheGeneral Agreement andtheTokyo Round codes.72TheDirectorate of
Unfair Business Practices andSafeguard Measures (Dirección dePrácticas deComercio Desleal y
Medidas deSalvaguardia ,DPCDMS), oftheMEIC isthebody responsible fortheadoption and
implementation ofanti-dumping andcountervailing measures.
108. Todetermine injury thecausal linkbetween prejudice, orthreat thereof andincreased imports
oftheproduct inquestion must beobjectively demonstrated. When imports ofaspecific product
originating inmore thanonecountry aresubject simultaneously tounfair tradepractice investigations,
theimpact ofthese imports canbeevaluated onacumulative basis, depending ontheirimportance
andrôleinthecompetition between similar domestic andforeign products. Ifthedumping or
subsidization margin islessthan1percent, investigations areterminated.
109. Petitions foranti-dumping orcountervailing action canbeinitiated byoneproducer oragroup
orassociation ofproducers, representing atleast25percentofthedomestic production forlocal
consumption. Following priorappraisal ofthecasebytheDPCDMS, theinitiation oftheinvestigation
iscommunicated tointerested parties andpublished intheofficial journal "LaGaceta "andadaily
newspaper ofmajor importance.
110. Provisional measures, intheformoftariffincreases nothigher thantheprovisionally estimated
dumping orsubsidy margin, canbeadopted inthecourse oftheinvestigation. These measures can
remain inforce foramaximum ofsixmonths, extendable inexceptional cases forasimilar period.
Anti-dumping andcountervailing duties cannot beapplied simultaneously onthesame product.
111. Noanti-dumping orcountervailing cases havebeeninitiated under thecurrent legislation.
112. Prior to1994, anti-dumping duties atratesof10percentand55percentonthec.i.f. value
wereintroduced against imports ofglazed tilesfromBrazil andchocolate barsfromtheUnited States
overperiods ofoneandtwoyears, respectively.73TheMEIC wasresponsible forcarrying outrelevant
producers.
72These aretheCACM provisions oftheRegulation onUnfair Trade Practices andSafeguard Measures
(Reglamento dePrácticas deComercio Desleal yMedidas deSalvaguardia )andExecutive Decree 21984-MEIC,
8February1993(ChapterII:definitionofdumping;ChapterIII:definitionofsubsidies;ChaptersIV:definition
ofprejudice; andChapter V:procedures relating tounfair trade practices).
73These cases have been based onprovisions ofDecree 18098, 19April 1988. Thefirstcasewasraised by
thedomesticproducerCeramicaIndustrialdeCentroaméricaSA(ceramics)on6March1989;dutieswereimposed
between 20April 1990 and10April 1992 when theywere abolished asprior dumping conditions hadceased.
Thesecond case, initiated inFebruary 1990 upon request ofGallito Industrial SAagainst imports of
chocolate bars(byProductos Nestlé SA)fromtheUnited States, ledtotheimplementation ofcompensatory duties
between 9October 1991 and9July1993, when, following Nestlé 'sappeal, these were repealed.Costa Rica WT/TPR/S/1
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(xix) Safeguard actions
113. Domestic legislation onsafeguard action, firstintroduced in1993, isbased onrelevant CACM
provisions, drawn upwithreference toGATT Article XIXandtheUruguay Round Agreement on
Safeguards.74TheDPCDMS isalsotheGovernment body responsible foradministering cases of
safeguard action.
114. Thelegislation stipulates thatincreased imports canresult fromunforeseen developments and
theeffect ofinternational orregional commitments. Serious prejudice todomestic production is
determined byconsidering allrelevant factors suchas:profitability; employment situation; thegrowth
ofincreased imports oftheproduct concerned; themarket shares ofimports; andchanges inthelevel
ofsales, production, productivity, capacity utilization, profits andlosses andemployment. Threat
ofserious injury must bebased onsubstantiated factsandnotonallegation. There must alsobea
direct causal linkbetween increased imports oftheproduct inquestion andserious injury orthreat
thereof todomestic production.
115. Asforanti-dumping andcountervailing cases, petitions foradopting safeguard action canbe
initiated byoneproducer, oragroup orassociation ofproducers representing atleast25percentof
thedomestic production forlocalconsumption. Interested parties areinvited tosubmit information
totheDPCDMS which carries outtheinvestigation anddetermines themeasures tobeadopted. The
termination oftheinvestigation must benotified totheinterested parties andSIECA, andmust be
published intheofficial journal "LaGaceta ".
116. Provisionalsafeguardmeasures,consistingexclusivelyoftariffincreases(guaranteedbydeposits),
canbeadopted atapreliminary stageoftheinvestigation oncecircumstances aredefined. Theduration
ofsuchmeasures cannot exceed 30days, unless otherwise decided bytheCentral American Tariff
andCustoms Council (Consejo Arancelario yAduanero Centroamericano ,CAAC).
117. Definitive measures areaimed atpreventing orremedying injury andatassisting adjustment.
Their duration andnature issimilar tothatofprovisional measures, except thatthedefinitive measures
canalsotaketheform ofnon-tariff measure. With respect tomeasures ofaduration ofmore than
oneyear, subject toCAAC 'sapproval, a"sunset clause" requires annual adjustments tophase outthe
measure. Thisistoallow theindustry concerned more timetoadjust.
118. Theadoption ofeither provisional ordefinitive measures mustbejustified andnotified tothe
CACM Secretariat notlaterthaneight daysaftertheirentry intoforce.
119. Nosafeguard measures havebeenadopted under current legislation.
120. TheSpecial Safeguard Provisions oftheUruguay Round Agreement onAgriculture75,allowing
fortheimposition ofanadditional dutyabove thebound tarifflevelwhen adetermined trigger volume
orprice levelisnotattained, cover 76eight-digit HStariff items, which, untiltheendof1994, were
subject toimport licensing requirements. These were abolished atthebeginning of1995.76
74Thesearecontainedinthesamelegalinstrumentsasprovisionsonanti-dumpingandcountervailing(Regulation
onUnfair Trade Practices andSafeguard Measures andExecutive Decree 21984-MEIC, 8February 1993
(Chapters VIandVII)).
75Article 5andPartISection IofSchedule LXXXV, 15April 1994.
76These comprise mainly pigmeat andliver, poultry meat, meat preparations andcanned meat, sausages,
dairies, eggs, beans, maize, rice, stearin, sugar andtobacco.WT/TPR/S/1
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(xx) Balance-of-payments measures
121. Under Article 26oftheCentral American Agreement ontheTariff andCustoms Régime, when
confronted withserious balance-of-payments disequilibrium, Costa Ricacanunilaterally modify its
tariffs overaperiod of30days. Sofarnosuchaction hasbeentaken.
(xxi) Other measures
122. Since March 1992, noprior import deposit requirements haveapplied inCosta Rica.77
123. Thenumberofliquorstoreslicensedtosellforeignordomesticalcoholicbeveragesisdetermined
bylaw.78
124. Smuggling, apersistent problem inCosta Rica, isattributed toseveral factors, including the
high level offiscal charges facing imports, theinefficiency ofthecustoms services (recently
re-organized), thelackofsevere penalties forsmugglers, etc.Despite concern overlosses caused by
smuggling tofiscal revenue, noestimates orother information wereavailable fromtheGovernment.
Itishoped thatthenewcustoms lawwillhelpinthefight against smuggling mainly through the
expansion oftheactivities ofthecustoms police outside thecustoms warehouses, thelarger finesand
penalties, computerization andstafftraining.
(3) Measures Directly Affecting Exports
(i) Registration, documentation
125. Registration requirements apply toexporters ofitems subject tolicensing (seebelow). These
exporters havetoberegistered bytheinstitutions granting theexport licences.
126. Phytosanitary controls arecarried outprior toexportation byofficials oftheMinistry of
Agriculture (Departamento Fitosanitario deExportación, Dirección General deSanidad Vegetal )who
issue therelevant certificate onlywhen thegoods arefreeofanydisease.79Exports ofanimals and
products thereof mustbeaccompanied byasanitary certificate, onthebasisofahealth andvaccination
status report prepared byaveterinary surgeon. Todemonstrate compliance withthesanitary measures
inforceintheforeign market, theintending exporter mustpresent adocument showing thatimportation
isauthorized inthatmarket.
127. Documentation requirements forexports consist ofthesingle export form (formulario único
deexportación ),thecommercial invoice, thebilloflading andthelabelling certificate (certificado
deetiquetado ).Exports ofgoods under theTemporary Admission andFreeZones régimes arenot
subject toanexport form (section (2)(ii)). Provisional shipment authorization isgranted forloading
merchandise during weekends andholidays attheports ofCaldera andLimón.
77Amendments ofArticles 2and5oftheRegulation onforeign exchange operations ontheinter-bank market
(Reglamento paralesOperaciones conDivisas delMercada Interbancario) ,29January and5February 1992.
78Article 11ofLaw10,7October 1936. Licences aredistributed inanon-discriminatory manner inthe
national territory, except forcapitals ofsmall cantons ortowns withmore than1,000 inhabitants (other than
capitals ofprovinces), where alicence tosellforeign liquors isgranted forevery 500inhabitants, while that
relating todomestic beverages requires only300inhabitants. Inother words, intowns of1,001 inhabitants,
there canbethree stores selling domestic liquors against twoforforeign.
79Generally, acertificate costs C/386.Costa Rica WT/TPR/S/1
Page 69
128. CENPRO, which ispartofCOMEX, isresponsible forincreasing theefficiency ofexport
procedures. Itadministers thesingle window system forexports (ventanilla única deexportación )
which concentrates allexport formalities inoneplace.80Fivesuchoffices arelocated inSanJosé,
theairport JuanSantamaría andtheports ofCaldera andLimón, andthePeñas Blancas frontier
checkpoint. Theaverage timeforadministrative procedures isnowfiveminutes.81
(ii) Export taxes, charges andlevies
129. Licensing fees, affecting certain items, arelevied onthef.o.b. value, rather thanona
cost-recoverybasis.82Inthiscontext,theMinistryofNaturalResources,EnergyandMines(MIRENEM)
charges ratesof3percentonwildfauna items, suchasfishandbutterflies, 5percentonother wild
fauna andflora, including CITES-covered vegetable species, and10percentonwildanimal species
covered byCITES.83Revenue fromthesefeesisusedtosupport thepublic entity which isresponsible
forexport controls ofthese species. There areplans toamend thissystem. With respect toitems
subject toimport quotas bilaterally agreed under theMultifibre Arrangement, theTextile Quotas Office
(Oficina deCuotas Textiles )imposes specific amounts oflicensing feesdepending ontheexport value
involved. These aresetatUS$5 (foritems withanexport value ofuptoUS$2,000), US$15 (foran
export value from US$2,001 toUS$6,000) andUS$25 (foranexport value above US$6,000). The
export form isavailable atC/300(US$2) perpad. With twoexceptions, portfeesonexport goods
aresimilar tothose affecting imports (section (2)(v)).
130. Apart fromthetaxesaffecting exports ofcoffee, bananas, meatandcattle (Table IV.6) allfiscal
measures onexports wereeliminated upon theentry intoforce ofthelawincorporating theUruguay
Round results intodomestic legislation (Article 3oftheLeydeEjecución delosAcuerdos delaRonda
Uruguay ,seeChapter II)on20December 1940.
131. Duties arecollected bytheCentral Bank. Export duties ortaxes arenolonger either an
important source ofgovernment revenue orasignificant taxburden (Chart IV.5). Between 1989and
1993 theshare ofexport duties andtaxes intotalgovernment income wasreduced byhalftoaround
3percent, orUS$28 million in1993.84Thiswasmainly duetothedecline ininternational coffee
prices. Estimated revenue for1994 isexpected toexceed US$38 million, because oftherecovery
incoffee prices.
132. Thelonger termdecline infiscal revenues fromexports isshown inChart IV.6, covering the
period 1980-92.
80Forcoffee exports, ICAFE isthebody responsible forsingle export office andform procedures.
81COMEX (1994a).
82Fees onwildflora andtextile items arecalculated onanf.o.b. value basis. Fees onwildanimal species
arebased onthevalue added during theperiod ofcaptivity.
83Article 31ofDecree 22545-MIRENEM, 30August 1993.
84Based onContraloría General delaRepública (1994).WT/TPR/S/1
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Table IV.6
Export taxes, 1995
Product Rate Advalorem
equivalent (percent)
Coffeea13.0
ForICAFE 1percentofthef.o.b. value
Central Government 12percentonthef.o.b. value
(depending oninternational coffee prices)
Bananas US$1 perbox(18.14 kg.)
C/1.50(orUS$0.0094) perbox(18.14 kg.)10.16
Fixed export price including
twotaxesbTax1(CORBANA): US$0.05 perbox
Tax2:1percentonf.o.b. value
Official price (1July1994): US$5.29 perbox(18.14 kg.)
Official price (1995): US$6.0 perbox(18.14 kg.)
Meat 1percentonf.o.b. value
C/25(orUS$0.16) permetric tonne1.008
Cattle 1.0
Cows destined tonofree-trade
countries1percentonf.o.b value
a Decree 23974-MEIC-MAG-H, 20January 1995
b ThetaxofUS$0.02 perbunch andonecharge (forSigatoka disease control) arenotcollected atpresent.
Source: Government ofCosta Rica.
Costa Rica WT/TPR/S/1
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(iii) Minimum prices
133. Only bananas aresubject tominimum export prices, which haveapplied since 1975. This
measure isaimed atimproving marketing conditions while preserving abalance ofinterests between
domestic producers andtransnational fruitcompanies.85Theminimum export pricemayvarydepending
onfluctuations ininternational market prices. Fortheperiod between 15February 1994and31June
1994, itwassetatUS$5.29 perboxof18.14 kg.,including certain export taxes (seeTable IV.6);
thetraditional fallintheworld priceduring thesecond semester ofeachyearisrelated totheavailability
ofsubstitute fruit. ByMarch 1995, theexport price wassetatUS$6 perbox.
(iv) Export prohibitions
134. According totheCosta Rican authorities, export prohibitions areapplied forreasons suchas
national security, public order, cultural andenvironmental protection. They cover arms, chemical
andbacteriological weapons, articles ofarchaeological value, endangered species under CITES, ozone-
depleting substances under theMontreal Protocol, certain "original" seeds (fundación ),psychotropic
substances, narcotics, andillicit drugs.
85Thisrégime replaced thepractice ofpurchase contracts which were signed between domestic producers
andthetransnationalfruitdistributingcompanies.Thischangewasintendedtocreateamoreequitabledistribution
ofrents and,therefore, fairreturns forthelocal producers.WT/TPR/S/1
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135. Exports ofwood logsand15wood varieties (e.g., Bombax, Breadnut tree,Guaiacum, Guapinal,
Mahogany, andOak) arebanned. These wood varieties form partofthegroup ofproducts subject
toenvironment-related prohibitions under CITES provisions. InMarch 1995, abillforthesuppression
oftheexport banonwood logswasbefore theLegislative Assembly.
136. On13September 1990, anexport banwasplaced onforest products made fromendangered
wood varieties, forenvironmental reasons.86
(v) Export licensing
137. Since20December1994,whenthelawonthepromotionofcompetitionandconsumerprotection
wasapproved, mostexport licences havebeeneliminated. Theexceptions relate tohealth, security,
quality andenvironmental controls orareincompliance withmultilateral andinternational commitments
(seesections (iv),(vi) and(viii). Inexceptional circumstances, andwhenever themarket mechanism
cannot copeadequately withasituation which causes orisabout tocause adomestic supply problem,
temporary export (orimport) licences canbeintroduced forasix-month period (butextendable).
138. Until recently, domestic supply considerations affected exports ofcertain goods usedeither
asproduction inputs orforbasic population needs. Thegranting ofalicence depended ontheresults
ofastudy, prepared bythecompetent Ministry, onwhether domestic producers could meetlocaldemand
atthetimewhen theapplication wassubmitted. Thelicence wasdelivered ifthere were surpluses.
Noquotas wereusedandnospecific quantities werereserved fordomestic consumption. Inprinciple,
licences wereissued within 24hours.87Between 1990 and1994, allapplications forexport licences
were approved bythecompetent institutions.
139. Toprevent deforestation, exports ofcertain forest products arecontrolled byautomatic licences
issued bytheMinistry ofNatural Resources, Energy andMines, while others areprohibited (seeabove).
Tocollect information ongold, thesame ministry grants licences forgoldexports. Similar licences
arealsoissued bytheAgro-Industrial Sugar CaneLeague forsugar exports totheUnited States market
(inviewofthequota, Chapter V),theICAFE forcoffee andtheCosta Rican Floricultural Association
(Asociación Costarricense deFloricultores )forflowers.
140. Exports oftextiles andclothing, other thanthose covered bybilateral agreements inthecontext
oftheMFA, aresubject tolicensing requirements forstatistical purposes only. Licensing orprohibition
applies toitems covered byCITES (Convention onInternational Trade inEndangered Species ofWild
Fauna andFlora). Asdiscussed earlier (section (ii)),theissueofexport licences under theMFA and
CITES agreements involve value-based fees.
86Law 7174, 16July1990; Law7317, 7December 1992.
87Thefollowing institutions were responsible forexport licensing inthisarea: theMEIC (palm oil,tuna,
coconuts andproducts thereof, metal waste andscrap, vegetable fibres, banana production inputs, palm oilsoap,
metal bars, brown sugar loaf(panela), honey, sugar by-products, X-ray plate waste, salt,vegetable fat,coffee
(ground ortoasted), wheat flour andfoodforpoultry); theMinistry ofAgriculture andLivestock (bees, queen
beesandproducts thereof andanimal feed); theCNP (meat, tobacco); Poultry Development Group (Junta de
Fomento Avícola ,products andderivatives); andtheNational Seeds Office (Oficina Nacional deSemillas ,seeds).Costa Rica WT/TPR/S/1
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(vi) Export quotas
141. ICAFE, theprivate sector institution representing coffee producers, processors, exporters and
roasters (Chapter V),fixes theannual export quota forthecrop, taking intoaccount domestic
consumption needs andinternational commitments (seesection (viii). The105processing companies
areobliged toselltheirauthorized quantities either tobuyers from abroad ortoexporters within a
fixed period.88Quotas areallocated onthebasisoftheprevious cropshare ofeachestablishment less
anamount destined fordomestic consumption andanother amount representing theshare heldback
under theretention plan(Chapter V).
142. Astockexchangeforagriculturalcommodities(BolsadeProductosAgropecuariosSA,BOLPRO)
isusedforquota allocation purposes (section (4)(iv)).
(vii) Export cartels
143. Asdiscussed earlier (section (2)(xii)), sugar isexported bytheAgro-Industrial Sugar Cane
League.
(viii) Voluntary restraints, surveillance andsimilar measures
144. Costa Ricahasnobilaterally negotiated voluntary export restraints onagricultural products.
Forthe1993/94 cropCosta Ricaretained 20percentofitsexport volume ofcoffee, complying with
itscommitments under theretention planoftheAssociation ofCoffee Producing Countries.89
145. CostaRicamaintainstwobilateralagreementsundertheMultifibreArrangement(seeChaptersII,
VandVI). Oneagreement provides forquotas intheUnited States market forCosta Rican cotton,
wool andman-made fibre apparel suchasshirts, blouses, trousers, slacks, skirts, shorts andsuits.
Thesecond agreement covers exports ofunderwear toCanada. These restraints aretobeintegrated
intoGATT under theprovisions oftheUruguay Round Agreement onTextiles andClothing. Textile
quotadistribution,basedonpastexportperformanceandquotautilization,isadministeredbytheNational
Council fortheAdministration ofTextile andApparel Quotas (Consejo Nacional deAdministración
deCuotas Textiles yRopa Confeccionada) .Adetailed regulation ensures thatunused quotas arere-
distributed andestablishes penalties forfraud.90
(ix) Measures maintained byimporting countries
146. Atariff quota affects banana exports totheEU(seeChapters VandVI)onthebasis ofthe
1994Framework Agreement onBananas. Costa Ricawasgranted ashare of23.4percent,thelargest
individual country share, intheEU'sannual global tariff quota. In1995, theglobal tariff quota is
expected tobeincreased byaround 5percent, toreach 2.2million tonnes. Thein-quota tariff rate
88ICAFE (1994).
89TheAssociation ofCoffee Producing Countries (Asociación dePaíses Productores deCafé),established
inSeptember 1993 ataMinisterial conference inBrasilia, iscomplementary totheInternational Coffee
Organization. Itrepresents producers from Africa, America andAsiawhoareresponsible for85percentof
world coffee production. TheAssociation 'sretention plan(seeChapter V),aresponse tothepersistent decline
ininternational coffee prices andthenon-respect oftheeconomic clauses oftheInternational Coffee Agreement
in1989, setsexport restrictions of10or20percentoftheexport volume according toworld price developments
(ICAFE, 1994; Ministerio deAgricultura yGanadería ,1994).
90Decree 22751-COMEX, 27October 1993.WT/TPR/S/1
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issetatECU 75pertonne. TheAgreement isintended toapply until31December 2002, andprovides
forconsultations withLatin American producers during theyearprior toconclusion.
147. Sugar quotas apply toexports totheUnited States, andoperate through direct contracts between
theAgro-Industrial Sugar Cane League andU.S.importers. Forthe1992/93 crop, theprice earned
fromexports totheUnited States wasUS$19.90 perquintal, ortwice theworld market price. Between
September 1990andSeptember 1994, theaverage monthly quota forCosta Ricawasreduced byhalf.91
148. Since 1989, exporters ofmilkanditsderivatives havenotbeenabletobenefit fromU.S.import
quotas (Section 22oftheAgricultural Adjustment Act,1933); these werebased onhistorical records,
dating backtothe1950s, which excluded non-traditional exporters suchasCosta Rica. Market access
forCosta Rican liquid milkandliquid yoghurt (which falloutside ofthequota scheme) hasbeenimpeded
because oflackofinformation onsanitary norms andtechnical regulations governing imports ofthese
products, aswellasthecosts relating toaccreditation ofproducers withtheFDA andUSDA. Inthe
context oftheUruguay Round, Costa Ricanegotiated withtheUnited States animport quota forcheeses
tobeapplied from 1995.
149. Theentry intoforce inJuly1989 ofnewlabelling requirements forimports ofconcentrated
fruitjuices intheUnited States, requiring theinclusion onthelabelofthename ofthecountries where
theproduct wasextracted, affected considerably theexport competitiveness ofsmall suppliers such
asCosta Ricaandledtopricedrops inthedomestic market.92U.S.companies import small quantities
ofjuicefromvarying sources tocomplement localproduction and,therefore, frequent labelchanges
increase production costs.
150. Until 1994, Costa Rican exports ofmeat totheUnited States were subject toquantitative
restrictions based onatrigger level. According toprivate sector representatives, theoperation ofthe
newsystem ofquota allocation formeatinthismarket, based on1986/88 levels under theUruguay
Round Agreement, willbenefit existing exporters, andanyCosta Rican exports ofthese items would
beatover-quota rates.
(x) Export subsidies
151. Nosector- orproduct-specific export subsidies persearegranted inCosta Rica.
152. Costa Rica'scommitment under theAgreement onAgriculture93consists ofreducing byabout
24percentthebudgetary outlays fortaxcredit certificates (Certificado deAbono Tributario ,CAT)
tonon-traditional agricultural products, andsuppressing therevenue tax(Impuesto alaRenta )
holiday/exemption within aten-year period starting from 1995 (seesection (xi)).
(xi) Duty andtaxconcessions
153. Apart fromexempting exports fromsalesandselective consumption taxes, nogenuine drawback
system applies inCosta Rica. Thethree export incentive régimes (Free Zones, Export Contracts,
Temporary Admission) focus ontariffandotherfiscal concessions which havebeenmentioned inearlier
sections ((2)(ii)(e), (2)(v) and(3)(xvi)). Exports under these régimes areexempt from export taxes.
91Líga Agrícola Industrial delaCaña deAzúcar (1994). Costa Rica'sshare intheU.S. sugar import quota
declined from 1.9to1.4percentofthetotal fortheperiod 1988 to1994.
92Federal Register, Volume 54,No.133, 13July1989.
93Article 9paragraph (2)(b)(iv); PartIVSection IIIofSchedule LXXXV, 15April 1994.Costa Rica WT/TPR/S/1
Page 75
154. TheExport Contracts régime wasoriginally introduced in1984 andamended in1988 inan
attempt toreduce theanti-export biasofthetrade régime. Itconsisted ofcontracts expiring in1996
signed between theGovernment anddomestic producers ofnon-traditional items exported tocountries
outside theCACM.94
155. Inaddition tothetariff concession discussed earlier, these export contracts alsoallowed for:
(i)deduction of100percentoftherevenue tax(Impuesto alaRenta )onnetprofits obtained from
theexport ofnon-traditional items tothird markets -eliminated under LawNo.7293 of31March
1992; (ii)exemption fromtherevenue taxonmaterials, inputs andpackaging fornon-traditional exports
tothirdmarkets; (iii)exemption fromtherevenue taxonmachinery andequipment; (iv)exemption
fromtherevenue taxonvehicles above twotonnes; (v)thegranting ofataxcredit certificate (Certificado
deAbono Tributario ,CAT) onnational value added -eliminated on1December 1992; (vi)accelerated
depreciation (never applied inpractice); (vii)special portcharges (never granted inpractice);
(viii) simplified procedures (never granted inpractice andovertaken bythesingle window system for
exports); and(ix)arebate of50percentofthisamount paidfortheacquisition ofshares orstocks
inafirmexporting 100percentofitsproduction. Atpresent onlyelements (ii),(iii)and(iv)aregranted
onnewexport contracts.
156. Taxcredit certificates (CATs), issued onthebasis ofcontracts prior to1992 bytheCentral
Bank, canbeusedforpaying direct orother, indirect taxes, andareimmediately negotiable. Since
1992, theannual amounts granted under CATs haveranged between 7and11.5percentofthef.o.b
export value ofgoods destined fornon-CACM markets. Rates varyinrelation totheshare oflocal
content (seesection (2)(xvi)) theperiod inwhich thecontract wassigned, andthedestination asstipulated
bytheregulations issued bytheNational Council forInvestment (Consejo Nacional deInversiones ).95
TheCAT ratesdecline progressively untiltheexpiry ofthecontract.
157. Between 1990, peakyear, and1993 theshares ofCAT funding intotalcentral government
expenditure andGDPwerereduced byhalf; in1993theystood ataround 3percentand0.6percent,
respectively, orUS$41 million. Domestic investors wereresponsible forabout 98percentoftotal
investment infirms benefiting from theexport contracts régime; foreign investment participation
originated mainly fromtheUnited States, theNetherlands, Italy, Brazil, Chile andMexico. Thebroad
sectoral breakdown ofCAT benefits intheperiod 1990-93 isshown inChart IV.7.96
158. Asstated earlier, since 2December 1992, nonewCATs havebeengranted. Allremaining
export contracts willexpire in1996, except forcontracts where thebeneficiary hasopted forareduction
ofitsCAT amount against anexpiry datesetin1999. AtthattimetheGovernment willhavefulfilled
itsobligations under individual contracts andwillbeabletoabolish theentire Export Contracts régime.
94Thisrégime istemporary andreserved fornon-traditional exports. Itscurrent legal basis isLaw6955,
2March 1984, asamended byLaw7092, 21April 1988 andLaw7257, 17September 1991.
95Until 1990 theCAT rateunder allcontracts could alsovaryaccording tothedestination. Amaximum
rateof15percentapplied toexports totheUnited States, Puerto Rico, Honduras andPanama butthisratecould
beincreasedto20percentforotherdestinationsifthelocalcontentexceeded50.5percent.Since7January1992,
companies covered byexport contracts under these terms havebeensubject toreduced CAT ratesof10.5 percent
and14percent, respectively.
96Specific products covered included ornamental plants, flowers andfoliage, fruitandvegetables, fish,
crustaceans andmolluscs, dried fruit, vegetable preparations, ground coffee, medicinal herbs, dried flowers,
foodstuffs, textiles, clothing, leather items, wood andpaper products, rubber andplastic products, machinery,
equipment, metal andnon-metallic products. CENPRO, Department ofEconomic Studies (Departamento de
Estudios Económicos. )WT/TPR/S/1
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159. TheTemporary Admission (maquila )régime deals withgoods entering thecustoms territory
forprocessing andthenre-export. Finalproducts maynotbesoldonthedomestic market.97Temporary
admission isauthorized forperiods of3months to5years (extendable) depending onthetypeofimport
product. In1994, 120firms benefited from thescheme. Between 1986 and1993 thevalue added
toprocessed exports under thisrégime tripled, reaching US$116 million in1994.98
160. TheNational Council forInvestment (Consejo Nacional deInversiones ,CNI), ofCENPRO,
aninstitution oftheCOMEX, administers therégimes ofExport Contracts (Contratos deExportación )
andofTemporary Admission (Admissión Temporal ).CNIapproves thegranting ofexport contracts
orprogrammes; co-ordinates withother public bodies specific elements (deadlines, terms, benefits)
oftheExport Contracts; approves andrecommends totheCentral Bank thegranting ofCATs; reduces
theCAT ratewhenever necessary; andapproves thegranting ofTemporary Admission treatment.
ItsSecretariat deals withtechnical aspects oftherégimes andtheelaboration ofexport plans and
programmes.
161. Since 1994, acomputerized information system (Sistema Integrado deAutomatización dela
Secretaría Técnica ),permits compilation andprocessing ofdataonexport contracts, annual reports,
andtheTemporary Admission régime.99
97These off-shore assembly activities, areaimed attaking advantage ofdomestic wage levels, labour skills,
infrastructure, public services orother production resources which otherwise would beunderutilized. They
areestablished foraperiod offiveyears (extendable).
98COMEX (1994a).
99COMEX (1994a).Costa Rica WT/TPR/S/1
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(xii) Export finance
162. Costa Ricadoesnotundertake anypreferential export finance.
(xiii) Export insurance andguarantees
163. Export credit insurance (Seguro deCrédito alaExportación )isexclusively offered bythe
National Insurance Office (Instituto Nacional deSeguros ,INS), theState-owned insurance monopoly.
Itcovers buyer andcountry risksinvolved inexport credits forgoods andservices.
(xiv) Export promotion, marketing assistance
164. Non-traditional products benefit mostfromexport promotion efforts. Theinstitutions involved
inexport promotion activities areCENPRO andCNI, aswellastheCorporation oftheFreeExport
Zones (Corporación delaZona Franca deExportación SA,CZFE) (seebelow).
165. CENPRO100participates intheformulation ofexport andinvestment promotion policies and
isentrusted withtheirimplementation. Italsoprovides information onforeign markets (including export
statistics) toexporters, organizes trademissions andparticipates intradefairsabroad.101Thefinancial
contribution oftheprivate sector toCENPRO 'sbudget ranged from 15toabout 28percentinthe
period 1990-94.
166. Costa Rica'spresent export promotion programme, the"Plan5000deExportación "initiated
inJanuary 1995, isaimed atincreasing exports toUS$5 billion bytheyear2000. Thisistobeattained
throughproductselectionbasedonanevaluationofworldmarketsandCostaRica'sproductionpotential,
including intheservices sector. Apart fromproviding detailed market analysis, support measures will
comprise theestablishment ofnewexport incentives, theimprovement oftheinfrastructure forexports,
thereduction ofadministrative barriers andtheidentification oftechnological requirements oftheexport-
oriented activities.
167. ICAFE promotes coffee consumption andexports. Between 1993 and1994, itparticipated
intrade fairsandsimilar activities inCanada, Japan andtheUnited States.102
(xv) Export performance requirements
168. Noexport performance requirements apply atpresent inCosta Rica.
169. Although legislation, inforce since 1976, allows fortheintroduction ofexport increment
certificates (CIEX), nobudgetary outlays haveeverbeenauthorized. These certificates could, in
principle, provide anexporting firmwithamounts equivalent to10percentofitsincrease inexports
(f.o.b. value) relative toprevious year.
100CENPRO wascreated inFebruary 1968 anditsNational Council forInvestment (CNI) twenty years later.
Council members arefrom theprivate andpublic sectors.
101Between 1990 and1993, CENPRO organized twocommercial visits abroad (Puerto Rico, Colombia) and
participation in27international trade events abroad (Canada, Chile, Finland, France, Germany, Japan, Mexico,
Netherlands, Spain, United States) for356beneficiaries (COMEX (1994a).
102ICAFE (1994).WT/TPR/S/1
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(xvi) Free-trade zones, export processing zones
170. Thefree-zones régime isconsidered bytheauthorities tobeanimportant export promotion
tool,aswellashelping togenerate jobs,improve realwages, foster technology transfer, boost foreign
exchange earnings, attract investment anddiversify export markets. Thisrégime wasintroduced in
1981 andlastreformed in1990.103Itisadministered andmonitored bytheCorporation oftheFree
Export Zones (Corporación delaZona Franca deExportación SA,CZFE), amixed company with
51percentpublic shareholding. TheCZFE isresponsible forproviding infrastructure forthe
establishment andtheoperation offreezones.
171. Apart fromthefiscal concessions discussed above, enterprises established infreezones benefit
from on-site customs services; independent management offoreign currency; aten-year exemption
fromtaxes oncapital andother assets, realestate transfer, aswellasterritorial, municipal andpatent
taxes; andatemporary degressive exemption fromtaxes onprofits (100percentforeight ortwelve
years and50percentforthefollowing fourorsixyears, thelonger period applying tofirms located
inzones inless-developed areas). Qualifying firms canengage inprocessing ormarketing ofexport
goods,supplyandexportofservices,shipyardactivities,andscientificresearchonindustrialtechnology.
Upto40percentofafirm'soutput canbesoldonthedomestic market.
172. Currently, ninezones areoperational104,while theestablishment ofafurther zoneinTurrialba,
isunderpreliminaryevaluation.Nootherzonesareplannedforthenearfuture.Thirty-threeenterprises,
notestablished within afreezone, areoperating under thefree-zones régime (section (4)(v)).
173. Between 1986and1993thenumber ofenterprises established within thefreezones grewfrom
11to134,while thenumber ofpersons employed rosebymorethan12-fold to18,500; inAugust 1994,
therewere141suchenterprises, with20,370 employees.105In1993, thesefirms weremainly engagedin
processing106,marketing, services andmanagement activities. Netexports (domestic value added on
goods exported) ofthese enterprises increased steadily fromUS$2 million in1986 toUS$73 million
in1993.10784percentofexports intheperiod August 1993 -July1994 were directed tothe
United States.108
103Decree 20355-H-COMEX, 2April 1991; Law7293, 4March 1992; Law7210, 23December 1990.
104Theoperational zones andtheirground occupancy ratesare:Saret/Alajuela (100 percent), BES(5.5per
cent), Zeta/Cartago (60percent), Metropolitana/Heredia (75percent), Montecillos (25percent), LaValencia
(20percent), Limón (25percent), Puntarenas (20percent), andUltrapark/Heredia (25percent). The
BES/Alajuela zone wasbuilt andowned byinvestors from Chinese Taipei (COMEX (1994a).
105CZFE SA(1994).
106According to1994 datafrom theCZFE, 43percent offree-zone companies were engaged intextiles,
electronics, foodstuffs andjewellery manufacturing.
107COMEX (1994a).
108CZFE SA(1994).Costa Rica WT/TPR/S/1
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(4) Measures Affecting Production andTrade
(i) Adjustment assistance
174. Under aprogramme forfinancing small-scale agricultural production (Programa de
Financiamiento alPequeño Productor Agropecuario )109,technical assistance isgranted tooffset bank
commission (involving asaving ofabout 1.5percentonloancosts). Theprogramme isoperated by
theCentral Bank, theBanco Nacional deCosta Rica(aState-owned commercial bank), andtheMinistry
ofAgriculture andLivestock. Maximum amounts forloans aresetatUS$21,875 perfamily farm
andUS$125,000 forassociations orco-operatives. Theprogramme, initiated inJuly1994, isfinanced
jointlybyChina(US$15million)andtheCentralBank(US$6.2million).BytheendofSeptember1994,
anamount ofUS$8.3 million wasallocated to1,897 producers. While mostwerecropfarmers (61per
cent), thelarger partofthebenefit (51percent)wascaptured bylivestock producers; thelatterreceived
loans which were onaverage 74percenthigher thantheformer.
175. Credit programmes operated exclusively byState-owned banks provide loans withalleviated
guarantee, documentation andprocedural conditions forsmall manufacturing firms. These loans are
directed tocompanies presenting proposals aimed atraising their productivity, quality and
competitiveness.In1993,loansamountingtosomeUS$30million(about27percentlessthanrequested)
wereapproved for54firms, located mainly intheSanJoséGreater Metropolitan Area. These firms
wereinvolved intheproduction offoodstuffs, beverages, chemicals, clothing, paper andleather articles
orintheprocessing ofwood, minerals andmetals.110
176. Noother adjustment, modernization orlabour mobility incentives apply currently inCosta
Rica. TheGovernment foresees theintroduction ofcertain incentives formodernization and
transformation ofsmall andmedium-size industrial companies withhighgrowth potential. These may
focus mainly oneasing access tocredit, theestablishment ofanIndustrial Modernization Fund (Fondo
delModernización Industrial ),providing support intheform ofnon-subsidized credit ortechnical
consultations andthecomputerization ofinformation ofinterest totheindustry.
(ii) Assistance forresearch anddevelopment (R&D)
177. In1993, support forR&D wasconcentrated mainly onthecomputerization ofmanufacturing
processes, software foreducation, software protection andbiotechnology.
178. Currently, incentives aredesigned toencourage individuals orfirms engaged inresearch,
university orpost-graduate studies, theelaboration oftechnology transfer projects, andparticipation
ofscience andtechnology fairs.111They taketheform ofwage supplements, fellowships, premiums
toenterprisesdistinguishedfortheirtechnologicalprogress,creditprogrammesfornewtechnology-based
companies andother financial contributions. Thescheme, operated bytheMinistry ofScience and
Technology (MICIT), isfinanced bytheScientific andTechnological Development Fund (Fondo de
Desarrollo Científico yTecnológico ).Between 1993 and1995 thefund'sannual budget grew by
250percenttoreach US$468,750.
109Theprogramme covers agricultural, livestock, agro-industrial andfisheries andrelated activities.
110MEIC (1994); Investment under Law7017.
111Law 7169, 29June1990; Law7293, 31March 1992. Between 1990 and1992 twodifferent régimes
have benefited researchers andcompanies. Incentives forthelatter consisted oftariff andfiscal concessions.WT/TPR/S/1
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179. In1993, aprogramme (Consejo Nacional paralaInvestigación Científica yTechnológica -
ConsejoNacionaldeRectores,CONICIT-CONARE)withthefinancialparticipationoftheInter-American
Development Bank allowed foratotal investment inscience andtechnology ofmore than
US$13million.112Thesefundswereusedtobuildand/orpurchaseequipmentforuniversitylaboratories,
todeveloplabourspecialization,toinstallatechnologyandscientificinformationnetwork,andtosupport
technological innovation projects andother related activities.
180. Intheagricultural sector, research iscarried outeither byStateinstitutions suchastheMinistry
ofAgriculture andLivestock, theUniversity ofCosta Rica, theNational University, theNational Rice
Office, andtheNational Seeds Office, orregional institutes liketheTropical Agronomic Research
andStudy Centre (Centro Agronómico Tropical deInvestigación yEnseñanza ,CATIE) andtheInter-
American Institute forAgricultural Cooperation (Instituto Inter-Americano deCooperación parala
Agricultura ,IICA).
(iii) Production assistance, taxconcessions
181. TheInstitute forAgricultural Development (Instituto deDesarrollo Agrario ,IDA) purchases
agricultural land, partofwhich isallocated topeasant farmers. In1993, under theProgramme for
Acquisition ofLand (Subprograma deAdquisición deTierras ),7,515 hectares were purchased and
distributed to2,523 families. Under theOwnership Programme (Subprograma deTitulación ),
7,202 property titleswereattributed for15,344 hectares. TheIDAandtheMinistry ofAgriculture
alsopurchased shares inasugar plant andaunitforprocessing ofroots andtubercles forthebenefit
ofsmall andmedium-size agricultural producer co-operatives.113
182. According totheauthorities, theState-owned insurance monopoly, theINS, provides crop
insurance services (Seguro deCosechas )atnon-subsidized rates. Thecropinsurance scheme isfinanced
totheextent of75percentfromINS'sprofits fromotherinsurance branches andthebalance isfinanced
from special public funds (Reserva deContingencias Agrícolas ).114Ingeneral, therevenue from
insurance feeshasnever covered sufficiently INS'scosts forthisprogramme; however, results vary
between sectors.115
183. Thecostsofservices (e.g., analyses ofanimal andvegetable substances, soilanalysis, preventive
disease tests, research) provided toproducers bytheMinistry ofAgriculture andLivestock areannually
adjusted toreflect pastyear'sinflation. Equivalent services areprovided byprivate laboratories at
similar prices.
184. Apart from export promotion activities described earlier, allsubsidies aimed atpromoting
industrial production were eliminated inApril 1992.116
112Ministerio deCiencia yTecnología (1994).
113Ministerio deAgricultura yGanadería (1994).
114Effortstoreduceriskscomprisetechnicalassistance,geographicaldistributionofcrops,theuseofappropriate
technology andselection ofoptimal planting periods.
115Positive financial results wereobtained withcrops suchastobacco, cassava andricewhile experience with
export crops hasnotbeen particularly satisfactory.
116These were introduced under Law7017, 16December 1985 andsuppressed byLaw7293, 31March 1992.Costa Rica WT/TPR/S/1
Page 81
185. Since 1985 fiscal incentives, available tohotel, airandwater transport, tourist agencies and
carrental companies, have been granted. The extent oftheincentives depends onthe
balance-of-payments situation, theutilization ofdomestic inputs, theimpact onemployment andregional
development, etc.117
(iv) Pricing andmarketing arrangements
186. Until December 1994, when itsprice-fixing operations ceased, minimum producer support
prices werefixed fordried beans, white maize andtobacco bytheCNP, anautonomous Stateagency
created in1956topromote production ofcertain agricultural goods. Between 1989and1994, CNP's
domestic purchases ofdifferent types ofmaize (white, yellow andforanimal feed)andred,dried beans
(frijol rojo)declined dramatically, while thatofblack, dried beans (frijol negro )almost doubled
(Table IV.3).118
187. From 1956 to1992, inpursuance ofprice stabilization objectives theCNP wasengaged in
resale activities withrespect tocertain manufactured fooditems included inthebasket ofbasic food
items(canastabásica).Resaleactivitiesoncommercialtermswereoperatedthroughawholesalenetwork
(Bodegas deMayoreo )andretail shops (expendios )owned byCNP. Direct salestoconsumers have
ceased andCNP'sretail shops weretransferred toco-operatives. Thewholesale network wasclosed
down andistobereplaced bystrategic supplies centres (Centros deAbastecimiento Estratégico )in
thecontext ofplans forafoodsecurity programme (Programa deAbastecimiento Estratégico ).
188. Under theUruguay Round Aggregate Measurement ofSupport (AMS) obligations onthe
production ofagricultural products, Costa Ricaiscommitted tocutting financial support todomestic
producers by15.4percentbetween 1995 and2004, toUS$15.9 million.119Thisamount would be
thehighest possible level oftheexpenditure devoted todomestic support measures. Incalculating
theinitial amount oftheAMS, expenditure destined toprice fixing andcompulsory purchase bythe
CNPofwhite maize, yellow maize, riceandsorghum hasbeentaken intoaccount. According todata
fortheyears 1986 to1988, domestic support prices foryellow andwhite maize items varied from
70to100percentabove international prices. Inthecaseofdried beans, theywere28percentlower.
117Law 6990, 30July1985; Law7293, 3April 1992.
118Data supplied bytheEconomic Studies Department (Departamento deEstudios Económicos )oftheCNP.
119Article 3oftheAgreement onAgriculture; PartIVSection IofSchedule LXXXV, 15April 1994; Tables
6and8accompanying thepartoftheSchedule relating toAMS commitments.WT/TPR/S/1
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189. Until December 1994, domestic producer prices ofliquid milk, bovine meat, rice120,palmoil
andfat,flourforbread making121,andcement werefixed bylawbytheMEIC (Table IV.7). Prices
forproducts other thancement were setonthebasis ofanupdated costpattern (modelo decostos )
established bydecree andcalculated taking intoaccount optimum production, production output and
costvariables.122Cement prices were established onthebasis ofproduct costs andmade public by
Decree.Nodistinctionismadebetweendomesticandimportedgoods,exceptthatimportedmilkpowder
wasnotsubject toprice fixing. Under thenewcompetition lawofDecember 1994, price fixing is
nowlimited tomarkets subject tomonopolies oroligopolies. Suchprice fixing would beundertaken
bytheexecutiveontheadviceofthecompetitioncommission(ComisiónparaPromoverlaCompetencia).
Inprinciple, theprice fixing isnotmeant toexceed sixmonths, butisextendable.
190. Since May1994, consumer prices forsugar andsugar products, previously setbyMEIC and
subject toimport licensing requirements, havebeenfixed bytheAgro-Industrial Sugar Cane League
onthebasisofacostpattern representing 62.5percentofthetotalcostoftheproduct. Profits from
theLeague 'sdomestic salesandexports areshared among sugar caneproducers andsugar mills.
191. Theprices ofcertain basic goods andservices (bienes deconsumo básico ),contained inthe
May1994ModernBasketofConsumeritems(CanastaBásicaModerna),123aremonitoredbytheMEIC,
butprice fixing isnowrestricted under thenewcompetition law. Thesystem, established in1975,
didnotdistinguish between domestic andforeign goods andwasaimed atprotecting thepurchasing
power andtheliving standards oflow-income families against market imperfections andcartels.124
Thesystem involved continuous monitoring andanalysis ofmarket prices, theeducation andinformation
ofconsumers, andtheperiodic revision ofcostpatterns toallow productivity gains tobepassed on
totheconsumer. Whenever major price increases occurred aprice could beimmediately fixed by
decree. ByNovember 1994, outof58products under monitoring, onlythree(coffee, tomatoes, floor
polish) were subjected toanalysis. Noprice wasfixed under thisrégime in1994.
120Between 1988/89 and1992/93, fixed prices forriceincreased byanoverall 22percent. Forthisperiod,
fixed prices were lower thanimport prices by1to5percent, except for1993. Thefixed price stood at
US$256 pertonne, or62percenthigher thanthec.i.f. value ofunhusked ricefrom theUnited States (Oficina
Nacional deArroz (1993).
121Bread isexcluded fromprice fixing toavoid subsidization ofmills. Plans existtoincrease tariffs onwheat.
122Thefollowing decrees contain formulas ormethodologies usedforthecalculation ofprices ofmeat(22356-
MEIC, 30May 1994), fresh fruit(19783-MEIC-MAG, 6July1990), flour forbread making (21849-MEIC,
18December 1992), milk(18361-MEIC-MAG, 18July1988) andrice(22462-MEIC-MAG, 17August 1993).
123Thisbasket comprised goods suchascertain meat, fishandsausage items; rice,soupnoodles, bread (pan
pequeño ),cornmeal pancakes (tortilla )andpasta; certain vegetables; oranges andbananas; pasteurized milk,
white cheese andeggs; margarine, vegetable oilandvegetable butter; sugar; salt;coffee; toilet paper, soap,
detergent andfloor polish; toothpaste, razors, sanitary towels, anddeodorants; andservices-related items such
aswater,electricity,rentsandbustransport.Othergoodsarecoveredonaseasonalbasis.Theseincludeclothing,
footwear, textbooks andmaterial forschoolchildren (from February toMarch); footwear, trousers, shirts and
blouses formen, women andchildren (Christmas period) (Decree 23357-MEIC, 30May 1994).
124UndertheConsumerProtectionLawof28February1975(LeydeProteccióndeConsumidor),establishing
price controls, awiderange ofgoods werecovered. Since 1990, withtheobjective ofderegulating theeconomy,
thenumber ofgoods subject toprice controls have been progressively andsubstantially reduced.Costa Rica WT/TPR/S/1
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Table IV.7
Fixed profit margins fordomestic traders, asofMarch 1994
(Percent)
Importer or
WholesalerRetailer
Foodstuffs
Rice, red,black andbrown (bayo)beans 3.00 10.00
Ordinary sugar 4.50 12.00
Pasteurized fluidmildwith2%fat;domestic powdered milk 5.00 10.00
Beef(cuts governed bythecostpattern) 5.00 15.00
Butter; maize andwheat flour 5.00 12.00
Top-grade, selected andpackaged brand-name beans 10.00 10.00
Housing construction materials
Black wire; concrete andclayblocks (other thanornamental); nailswithheads; bricks, floor
tilesandmosaic tiles; galvanized roofing sheets nos.28and30;unshaped ironrodsofa
nominal diameter ofupto1.26cm.(nos. 2,3and4)andplain rodsofanominal diameter of
6mm.(no.2);glass, clear andfluted, 2and3mm.10.00 15.00
Tubes andpipes ofgalvanized ironorPVC, 12mm., andshaped parts thereof; PVC pipes for
sanitary useof31,50and74mm., specification SDR-32.5, andof100mm., SDR-5, and
shaped parts thereof; single-pair electrical wire; TWwireof6to14WG; rectangular and
octagonal PVC conduit boxes; PVC conduit pipeofupto25mm.andshapes thereof20.00 20.00
Manual equipment foragricultural use
Spreaders, ploughs andback-pack spray pumps 25.00 15.00
Tools foragricultural use
Hoes, mattocks, clasp knives forpruning orgrafting, knives andmachetes, axes, seeddrills,
blade files, mallets, shovels, spades, picks, pickaxes, andrakes foragricultural use10.00 15.00
Chemicals foragricultural use
Insecticides, fungicides, herbicides, agricultural andindustrial fertilizers, foliage nutrients,
biostimulants, humectants anddefoliant aidsandgrowth andmaturity regulators25.00 15.00
Educational books inhard cover
Cheap edition dictionaries, school andcollege textbooks andreference books, university text
books andreference books20.00 20.00
School uniforms
Shirts, blouses, trousers, skirts andoveralls ofthestandard school uniform 10.00 20.00
Basic necessities forschool children
Plasticine orcolouring sets,coloured pencil boxes withuptosixpencils, thick paper and
cardboard, brass school compasses withsmall pencil, small crayola boxes withuptosixunits,
exercise books, small flatplastic squares ofupto15cm.,liquid glueforschool useupto
150cc.(transparent orwhite), "Bic" or"Kilométrico" disposable ballpoint pens, "Mongol" black
leadpencils, wood orplastic flatrulers ofupto30cm.,small plastic ormetal pencil sharpeners
withonehole, school poster paints (sixcolours), round-ended school scissors, andflat
180 plastic school protractors20.00 20.00
Miscellaneous
Grey Portland andPuzzolano cement 5.00 5.00
Agricultural machinery andequipment 10.00 15.00
Feedstuffs forpoultry, cattle andswine; cured hides andskins forshoe-making andleather
goods12.00 12.00
Kerosene 15.00 15.00
Pressed orunwoven blankets 20.00 20.00
Seeds forsowing; bond paper andnewsprint, plain orlined, letter size,medicaments included in
theCCSS basic schedulea25.00 25.00
Rural vehicles andparts thereof; parts foragricultural machinery andequipment 25.00 30.00
Medicaments notincluded intheCCSS basic schedule 30.00 30.00
a CCSS refers totheState runsocial security institution (Caja Costarricense deSeguro Social ).
Source: Decree 23160-MEIC.WT/TPR/S/1
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192. Minimum monthly ordaily wages arefixed andadjusted twice ayear(1January andJuly)
forawiderange ofactivities including agriculture, mining andquarrying, construction, manufacturing,
electricity, retailtrade, transport andrelated services, computation, professional services, administrative
clerks andtailors. ThenewGovernment granted 8percentand10percentwageincreases inJuly1994
andJanuary 1995.
193. Since 1September 1992, astock exchange foragricultural commodities (Bolsa deProductos
AgropecuariosSA,BOLPRO),asubsidiaryofthenationalstockexchange(BolsaNacionaldeValoresSA,
BNV), hasoperated asanintermediary fortrading these items.125BOLPRO 'srôleistomaintain a
transparent andefficient marketing system which benefits producers, traders, manufacturers and
consumers through fairprices, minimal costs, regular supplies andup-to-date andreliable market
information. By1994, more than5,000 operations, worth US$20 million, werecarried outinvolving
rice, yellow maize, wheat, coffee, potatoes, agro-chemicals, fertilizers andcalcium carbonate.
Transactions within BOLPRO covered onequarter oftotalexports ofthetraded items. Asmentioned
earlier, thereareplans touseBOLPRO forpublic sector procurement andforquota allocation purposes
inthecontext ofWTO orregional commitments onagricultural trade.
(v) Regional assistance
194. Current efforts topromote industrialization incertain regions, specified inadecree issued by
theMinistry ofPlanning andEconomic Policy (MIDEPLAN), involve providing thesame benefits
asthose available forcompanies established inFreeZone orless-developed areas (seeearlier). The
extension ofthese benefits outside specific parks, introduced inApril 1991, isaimed atdiscouraging
further migration oftheactive population from rural areas toCosta Rica'scentral valley.
195. Between November 1990 andtheendof1995, special measures, directed atfirms covered
bythefree-zones régime andestablished inless-developed areas, arebeing applied.126They consist
ofa15percentdiscount ontheannual wage expenditure ofthefirmintheform ofinterest-free
registered bonds (BONZFREX), which canbeusedforpaying either Central Government taxes or
public sector dues. Thisdiscount, applicable forafive-year period, istobeprogressively reduced
by2percentage points annually inthefirstfiveyears andsettled inthelastyear. Interested firms
canapply tobeconsidered forbenefits under thescheme notlaterthantheendof1995. Twocompanies
havebeengranted BONZFREX bonds sofarwhile byMarch 1995 theapplication fromathirdfirm
wasunder examination.
125Forty percentofBOLPRO 'sshares areowned bytheBNV, 10percentbytheCNP andtherestmay
beowned bytheprivate orpublic sectors. BOLPRO, located inSanJosé, has22brokers whorepresent all
sectors oftheeconomy, including State banks.
126FreeZonesLaw(LeydeZonasFrancas)7210,23Decemb er1990;Decree20355-H-COMEX,2April1991.Costa Rica WT/TPR/S/1
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(vi) Competition policy
196. Legislationagainstrestrictivebusinesspracticesandinfavourofconsumerprotectionwasinitially
passed in1915andmodified in1975and1994, asdiscussed above.127Itmainly defined thefunctions
oftheMEIC andtheCosta Rican Tourism Institute (Instituto Costaricense deTurísmo )inregulating
profit margins and/or prices forcertain goods andservices inatransparent manner, while ensuring
adequate supplies forthedomestic market. Italsosetouttheobligations ofallmerchants, allowed
forpriceinspections, established penalties (fines andpenal procedures) forspeculators, andsupported
consumer information campaigns through themedia.
197. In1993, there were21,058 inspections, toverify whether maximum profit margins orretail
prices complied withtheconsumer protection legislation. These inspections ledto113trials for
speculation orother offences. Practices relating tothemarketing ofgoods andrendering ofservices
weresubject to1,357 consumer complaints.128Inthecontext ofderegulation anintensive advertising
campaign, aimed ateducating, informing andguiding theconsumer onissues suchasprices, guarantees,
labelling, expiry dates, quality, parts andlegal defense, wascarried outbyMEIC. Anumber of
comparative studies were alsoundertaken tohelpconsumers.129
198. Withtheobjective ofprotecting moreeffectively thelegitimate rights andinterests ofconsumers
andoffostering andpreserving competition, asnoted previously, thenewlawonthePromotion of
Competition andtheEffective Defense oftheConsumer (LeydePromoción delaCompetencia yDefensa
Efectiva delConsumidor )130waspromulgated inDecember 1994. Itsprovisions cover awiderange
ofmeasures affecting production anddomestic andforeign trade.131Iteliminates licences or
authorizations aswellasnationality-based restrictions relating tocommercial activities. Itdefines,
prohibits andsanctions allmonopoly practices which impede orlimitcompetition ortheaccess ofnew
entrants tothemarket, orencourage thedeparture fromthemarket ofexisting competitors. Consumer
protection should bestrengthened asthenewlawmore clearly defines consumer rights, producers;
merchants 'andservice suppliers 'obligations, andtherôleoftheState, andestablishes prohibitions
andrequirements onspecific salespractices.
199. Under thelaw,twoCommissions, theCommission forthePromotion ofCompetition (Comisión
paraPromover laCompetencia )andtheNational Consumers Commission (Comisión Nacional del
Consumidor ),bothunder theMEIC, arecreated tomonitor theimplementation ofitsprovisions.
Complaints aretobeaddressed tothese commissions before recourse tojudicial bodies.
127Decree 18,8June 1915; Law5665, 28February 1975.
128MEIC (1994).
129Thesemainlycoveredfish,meat,vegetables,certainfruits,cosmetics,householdelectricappliances,clothing,
toysandschool materials.
130Law 7472, 20December 1994.
131Provisions other thanthose strictly related tocompetition policy arediscussed intherelevant sections of
thisChapter.WT/TPR/S/1
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(vii) Enforcement ofintellectual andindustrial property rights
200. Theprotection ofintellectual andindustrial property rights isguaranteed under Article 47of
theConstitution. Costa Ricaisasignatory toalmost allmajor international orregional agreements
andconventions onintellectual property, trademarks, copyrights andpatent protection, andisaWorld
Intellectual Property Organization (WIPO) member.132
201. Industrial property (patents, trademarks, trade names) andintellectual property (copyrights)
aretheresponsibility oftheRegistry ofTrademarks andPatents (Registro deMarcas yPatentes ),an
agency oftheMinistry ofJustice. TheMinistry ofInterior (Ministerio deGobernación )monitors radio
andtelevision transmissions, issues broadcasting permits andprotects therights ofbroadcasters from
interference orunauthorized retransmissions.133
202. Legal oradministrative action canbetaken against infringement ofindustrial property rights
under theCentral American Convention onIndustrial Property (Convenio Centroamericana parala
Protección delaPropiedad Industrial ).TheGovernment ofCosta Ricadoesnotpossess anystatistical
information onproduction, imports andexports ofcounterfeit goods.
(a) Patents
203. Costa Rica'spatent legislation allows a12-year, non-extendable patent, fromthedateofgranting
thepatent, foranyinvention, whether forgoods orprocesses.134However, thepatent duration for
many products considered tobeofpublic interest islimited tooneyear.135Foreign patent applicants
receive protection fortheremaining period oftheexisting patent inthecountry where thepatent was
firstrecorded, uptothenormal Costa Rican limitof12years.136Nopatent protection isgranted to
plantoranimal varieties, anyessential biological process, ormicrobiological processes andproducts.
204. Costa Ricahasabroad compulsory licensing régime which obliges thepatent owner tolicense
itsuseiftheinvention isnotlocally exploited ormanufactured. Thepatent owner hasnorighttotake
legalaction against infringing imports untillocalmanufacture hasbegun. Where itisdeemed tobe
132Thefollowing conventions havebeensigned byCosta Ricaindifferent areas: (i)patents andtrademarks,
theRiodeJaneiroConventiononPatents,IndustrialDesigns,TrademarksandLiteraryandArtisticProperty(1906),
theCentral American Treaty onIndustrial Property (25May 1970); and(ii)theCopyrights Title 17USC
(19October 1899 and9April 1910), theMexico City Convention (27January 1902), theBuenos Aires
Convention (11August 1910), theInter-American Convention fortheRights ofAuthor (1946), theUniversal
Copyright Convention (6September 1952), theRome Convention fortheProtection ofPerformers, Producers
ofPhonograms andBroadcasting Organizations (1961), theBerne Convention fortheProtection ofLiterary and
ArtisticWorks(ParisAct1971),theConventionfortheProtectionofProducersofPhonograms(29October1971)
andtheCentral American Convention (1982).
133Law 1758, 19June 1954.
134Law6867,12Decemb er1983.Protectionincludesimprovementsonalreadypatenteditemsorprocedures.
135These include: medicines, substances andarticles fortherapeutic applications, pharmaceuticals, chemical
andagriculturalfertilizers,agri-chemicals(pesticides),veterinarypreparations,andallbeverageandfoodproducts.
136Costa Ricabecame asignatory oftheParis Convention fortheProtection oftheIndustrial Property, the
primary international agreement forextending national treatment toforeign patent applicants, inJuly1993. As
stated inChapter II,itisexpected tobepassed bytheLegislative Assembly during 1995.Costa Rica WT/TPR/S/1
Page 87
inthepublic interest, dependent patent compulsory licensing andtheexpropriation ofpatent maybe
possible under thelegislation. Sofarthere hasbeennoexperience withrespect tothese provisions.
205. Domestic legislation istobebrought intoconformity withtheprovisions oftheUruguay Round
Agreement onTRIPS. During thepreparatory work onthelawincorporating theUruguay Round
results intodomestic legislation (Chapter II),thepharmaceuticals industry expressed concerns over
thenegative impact oftheAgreement onTRIPS foritsactivities. Certain domestic producers considered
theprovisions onpatent protection tobecontrary totheirinterests.
206. Bylate1994, newlegislation onindustrial secrets (LeydeSecreto Industrial )andinventions
andindustrial design (LeydeInvenciones, Modelos deUtilidad, Dibujos yModelos Industriales )was
submitted forapproval totheLegislative Assembly.
(b) Trademarks
207. Trademarks, service marks, tradenames andslogans canberegistered andprotection isgranted
forarenewable period of10years. Judicial precedents protect well-known brands ortrade names,
eventhough theywerenotpreviously registered inCosta Rica. Sanctions existintheConstitution,
civil, mercantile andpenal codes forinfractions including thedisclosure oftrade secrets.
(c) Copyrights
208. Copyrights areprotected from moral andfinancial damages from unauthorized publication,
duplication orreproduction ofbooks, paintings, recordings, films, music, etc.137Authors 'rights are
protected fortheauthor 'slifetime plus50years.
209. ComputerprogrammeshavebeenregisteredinCostaRicasince1990.InMay1994,therelevant
legislation wasamended toincorporate explicit reference tosuchitems, providing more effective
protection fortherights ofowners.138Currently, more thansixtycomputer programmes areregistered
inCosta Rica.
210. Problems caused byalackofclarity onthescope ofprotection forworks embodied insatellite
transmissions andthehighly detailed provisions governing thecontractual relations between copyright
ownersandusers,seemtohavebeenresolvedin1993whendomesticbroadcastersconcludedagreements
ondirect ordeferred transmissions withcompanies intheUnited States.
137Law 6683, 14October 1982.
138Articles 1,4(n)and103ofLaw6683 (LeydeDerechos deAutor yDerechos Conexos )were amended
byDecree 7397, 3May 1994.WT/TPR/S/1
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(viii) Other measures
211. Since 1986, incentives havebeenprovided bymeans oftaxcredit certificates forreafforestation
(Certificados deAbono Forestal, CAF) andforest protection activities inareas where thesoilisnot
suitable foranyother economically sustainable operations. CAF certificates, similarly totheCATs
(seeearlier), areimmediately negotiable (atthenational stock exchange) interest-free titlesissued by
theDirectorate General forForestry (Dirección General Forestal )oftheMIRENEM andcanbeused
forpaying direct orindirect taxes. Fixed amounts aregranted, ranging fromUS$500 toUS$750 per
hectare, andaredisbursed overaperiod offiveyears insubsequent instalments of50,20,15,10and
5percentofthetotalamount.
212. CAFs aretocontinue tobeemitted untilanewfinancial instrument, theNational Forest Fund
(FondoNacionaldeFinanciamientoForestal),becomesoperational.AccordingtodatafromtheMinistry
ofFinance, between 1989 and1993 theannual government spending onCAFs roseeightfold-fold in
U.S.dollar terms, totalling US$23 million forthewhole period; in1993 itstood atUS$9 million
orabout 1percentoftotalGovernment expenditure. Ageneral forest tax(Impuesto General Forestal )
of10percentonthevalue ofevery cubic metre ofnon-cut wood isalsolevied. Wood fromprivate
plantations isexempt.
213. Since 1990, treecutting andproduction oflogshave been subject toannual licences for
environmental reasons. Thismeasure which wastoensure observance ofdomestic regulations, had
limited impact because ofnegative externalities suchasillegal treecutting.