zones in cross hairs during this election
By the CAFTA Report news staff
The Feb. 2 election is the starting point for proposing news taxes.
Among other concerns, foreign businesses here are watching what a new
government might do to tax preferences in the free trade zone. The fact
that many exporters do not pay taxes locally has been a topic in the
presidential campaign. Tax deals have been an incentive to lure firms
The finance minister, Edgar Ayales, said last week that his staff was
ready to start preparing new tax laws in conjunction with the staff of
whomever is elected.
If Johnny Araya Monge of the Partido Liberación Nacional wins,
Ayales most likely will continue as minster of Hacienda. The taxes that
will be created by news laws most likely will resemble those that
President Laura Chinchilla tried to put through earlier in her
Business people support Araya because the alternative seems to be
José María Villalta Florez-Estrada, of Frente Amplio. He
wants to renegotiate the free trade treaty with Central America and the
United States, seeks much higher taxes on businesses, has proposed
price controls and supports state ownership of many productive sectors.
— Jan. 25, 2014
arbitration suit promised against Costa Rica
By the CAFTA Report staff
Costa Rica has a $1 billion problem. That is the amount being tossed
around in an arbitration case expected to be filed shortly by Infinito
Gold Ltd. of Calgary, Canada.
The case will be arbitrated under the Costa Rica-Canadian free trade
treaty, not the Central American Free Trade treaty.
The Calgary firm complains, not without merit, that its concession for
the Las Crucitas open pit gold mine had been annulled by a lower court
despite prior higher court approvals.
Firm president John Morgan said in April that the Costa Rican
government has been notified of its intention to seek arbitration. That
notice appeared to be an effort to negotiate the case, but Costa Rica
did not seek to do that.
The mine has been opposed vigorously by local environmental activists,
Even now there is an online petition placed by a Canadian group. Mining
Watch, that has gained 300,000 signatures worldwide asking the firm to
refrain form arbitration.
The company said that it completed all the environmental, social and
technical studies and obtained all approvals required under Costa Rican
law to develop and operate the Las Crucitas Project. In February 2008,
the Secreteria Tecnica Nacional Ambiental approved a modified
environmental impact study while in May 2008, the Ministerio de
Ambiente y Energia confirmed the local subsidiary's exploitation
concession. On Oct.17, 2008, then-president Óscar Arias issued a
presidential decree declaring the Crucitas project to be in the
national interest, allowing a change of land use permit to be obtained
and for site clearing to commence.
The company added:
On April 16, 2010, in response to a claim brought by a public interest
group that had halted clearing and mine construction activities for 18
months, the constitutional chamber of the Supreme Court ruled that all
of the objections that had been raised against the project were without
merit with one exception that was resolved by the time the legal
process was completed. The constitutional chamber's decision, which had
involved a project site inspection in addition to oral hearings,
included 340 pages of reasons released in July 9, 2010, which addresses
all constitutional, legal and environmental/technical issues in depth.
Despite this complete and definitive ruling from the
constitutional court allowing the Crucitas Project to proceed,
the company's concession to develop Las Crucitas was annulled by a
decision made initially on Nov. 24, 2010, by a lower Costa Rican court,
the Tribunal Contencioso Administrativo, and affirmed on November 30,
2011 by the administrative chamber of the supreme court. The lower
court also sought an investigation targeting Arias and the
In its decision, the adminstrative chamber reached a conclusion that
was the opposite of the conclusion the constitutional court had reached
only a year and a half earlier, effectively upholding the tribunal's
decision to annul Infinito's concession and invalidate its
The case has had a negative effect on proposals by other companies to
do business in Costa Rica.
The Crucitas property in northern Costa Rica is believed to contain 1.8
million recoverable ounces of gold.
— Jan. 25, 2015
panel is sought in dispute with El Salvador
Special to The CAFTA Report
Costa Rica is seeking the creation of an arbitration panel under the
rules of the Free Trade Treaty with Central America and the United
The issue is the continuing refusal of the country of El Salvador to
apply duty preferences to Costa Rican imports, said the Ministerio de
Commerce officials have been in talks with their counterparts in El
Salvador, and the arbitration panel is the next step in the complex
process that will end with a ruling by the free trade commission set up
under the treaty,