WORLD TRADE
ORGANIZATIONG/STR/N/2/CRI
G/STR/N/3/CRI
2 November 1998
(98-4249)
Working Party on State Trading Enterprises Original:  Spanish
STATE TRADING
Updating Notification Pursuant to Article XVII:4(a) of the GATT 1994 and
Paragraph 1 of the Understanding on the Interpretation of Article XVII
COSTA RICA
The following communication, dated 19 October 1998, has been received from the Permanent
Mission of Costa Rica.
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In pursuance of Article XVII, paragraph 4(a) of the GATT 1994 and the Understanding on the
Interpretation of Article XVII of the GATT 1994, the Government of Costa Rica herewith submits theattached document updating its notification contai ned in document G/STR/ N/1/CRI.  This update
records the changes introduced during the periods from 30 June 1995 to 30 June 1996 and from
30 June 1996 to 30 June 1997.G/STR/N/2/CRI
G/STR/N/3/CRI
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UPDATING NOTIFICATION PURSUANT TO ARTICLE XVII:4(a)
OF THE GATT 1994 AND PARAGRAPH 1 OF THE
UNDERSTANDING ON THE INTERPRETATION
OF ARTICLE XVII
COSTA RICA
Pursuant to Secretariat document G/STR/ N/3, Article XVII:4(a) of the GATT 1994 and
paragraph 1 of the Understanding on the Interpretation of Article XVII, Costa Rica hereby notifies the
following changes in its State trading activities since the last full notification (G/STR/N/1/CRI),
during the periods from 30 June 1995 to 30 June 1996 and from 30 June 1996 to 30 June 1997.
I. ENUMERATION OF STATE TRADING ENTERPRISES
No change.
II. REASON AND PURPOSE FOR INTRODUCING AND MAINTAINING STATE
TRADING ENTERPRISES
No change.
III. DESCRIPTION OF THE FUNCTIONING OF THE STATE TRADING ENTERPRISE
The Law on the Regulatory Authority for Public Services (Law No. 7593 of 9 August 1996,
published in Official Journal (La Gaceta)  No. 169 of 5 September 1996), hereinafter referred to as the
ARESEP Law, has transformed the National Electricity Service (SNE) which is in charge, inter alia ,
of setting fuel prices.
Under this law, the Regulatory Authority for Publ ic Services will continue to set fuel prices,
but only in respect of domestic demand.
Thus, the Refinadora Costarricense de Petróleo S.A. (RECOPE) is given the authority to set
fuel prices for export without the endorsement of the Regulatory Authority for Public Services.
The criteria used by RECOPE to set fuel pric es for export are the same as those described in
the last notification with the following exceptions:
In the case of marine fuels (IFOs), the sales price is based on NOLA (high) + US$14,
regardless of the amount purchased.
In the case of fuel for companies transporting tourists by air, domestically or internationally,
and which have concluded tourist incentive contracts with the State pursuant to Executive
Decree No. 224863-H-TUR of 5 December 1995 published in La Gaceta  No. 22 of
31 January 1996, RECOPE sets the price (a preferential price) on the basis of the parameters
laid down in the said Decree as revised by Decree No. 25838-H-TUR of 20 February 1997,published in La Gaceta  No. 55 of 19 March 1997.
The parameters laid down in these Decrees are as follows:G/STR/N/2/CRI
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(i) For jet fuel, the price is calculated by taking the average weekly f.o.b. bulk price for
the Gulf coast (waterborne) published in Platt's Global Alert, plus US$0.04011/litre to
cover direct fuel handling costs.
(ii) For AV Gas, the price is calculated by taking the average weekly Maraven f.o.b. bulk
price published in Platt's Global Alert, plus US$0.04011/litre to cover direct fuel
handling costs.
RECOPE reviews the additional factor (US$0.04011/litre) once a year in order to adjust the
price formula as appropriate.
Regular procedure
The criteria and the regular procedure for setting local consumption prices remain the same
with the following exceptions:
It does not necessarily have to be during the first quarter of every year that RECOPE submits
its price-setting request for fuel.  The Regulati ons to the Law on the Regulatory Authority for
Public Services, of 6 January 1997 (Decree No. 25903-MINAE-MOPT published in
Supplement No. 14 to La Gaceta No. 62 of 1 April 1997), hereinafter the "Regulations to the
ARESEP Law", stipulate in Article 48 that "the regular setting of prices shall be understood torefer to the updates carried out at least once a year with a view to adjusting prices and rates to
costs and to the development and competitive wage parameters by which they are governed."
The submission of the request for the regular review of rates is no longer under the exclusive
authority of RECOPE.  Article 49 of the Regulations to the ARESEP Law stipulates that theregular review of rates may be conducted on presentation of a reasoned request by the
supplier (RECOPE), the organizations representin g user interests, or ex officio by the
Regulatory Authority for Public Services.
In order to process fuel price-setting requests, the Regulatory Authority must organize a
public hearing procedure.  It issues a notice of the hearing, at which all persons having a
legitimate interest or a subjective right may oppose the action by presenting a writtendocument specifying the reasons for their opposition together with supporting evidence.  The
Regulatory Authority must issue the final resolution within 30 calendar days following the
hearing.
The Regulations to the ARESEP Law state that the Regulatory Authority shall draw up a list
of associations for the defence of consumers or users, communal development associations or
other registered social bodies which are free to take part in the administrative procedures
conducted by the Regulatory Authority when they have a legitimate interest, and may
participate in hearings and question the rates and the quality and environmental standards
adopted or under review in the regulated services.
Special procedure
The special procedure for emergency price setting known as the "Formula for the Adjustment
of Domestically Sold Hydrocarbon Prices", Executive Decree No. 19870 MIRENEM of23 August 1990, remains in force.G/STR/N/2/CRI
G/STR/N/3/CRI
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In addition, the ARESEP Law defines special price setting as covering cases involving
significant changes in the economic environment, cases of force majeur  or cases in which the
conditions of the automatic adjustment models are fulfilled.
The Regulations to the ARESEP Law state in Article 50 that "special rate setting shall be
considered to be any such setting that is the resu lt of a significant change in the economic, social or
environmental parameters taken into consideration at the moment of approval".  The Article further
states that special price setting also includes price setting that is the result of the application of an
automatic adjustment model.  Such price setting may be carried out at the request of the suppliers or
ex officio by the Regulatory Authority.  Case s resulting from the application of an automatic
adjustment model are not subject to the above-mentioned hearings procedures.  In such cases, the finalresolution must be issued within ten working days following the initiation of the proceedings.
IV. STATISTICAL INFORMATION
The Annex to this Notification contains a statistical table which updates the table submitted in
the first notification.  It sets out comparative figures on imports, local refinery output, local sales andexports of crude oil and finished product, in quantitative and value terms, for the years 1995, 1996
and 1997.
V. REASON WHY NO FOREIGN TRADE HAS TAKEN PLACE (IF THIS IS THE
CASE) IN PRODUCTS AFFECTED
No change.
VI. ADDITIONAL INFORMATION
On 9 August 1996, the Law on the Regulatory Au thority for Public Services (Law No. 7593)
was adopted, and published in La Gaceta  No. 169 of 5 September 1996.  Under this Law, the
regulation of public services supply is applied equally to State and private entities.  The entity created
under the said Law, the "Regulatory Authority for Public Services", sets the prices and rates for public
services and monitors the implementation of standards pertaining to quality, quantity, reliability,
continuity, punctuality and optimum supply of such services.
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