WORLD TRADE
ORGANIZATIONG/SCM/N/95/CRI
G/SCM/N/99/CRI
8 July 2003
(03-3679)
Committee on Subsidies and
Countervailing MeasuresOriginal:  Spanish
SUBSIDIES
New and Full Notification Pursuant to Article XVI:1 of the
GATT 1994 and Article 25 of the SCM Agreement
AND
Updating Notification Pursuant to Paragraph 1(d) of the
Procedures for Extensions Under Article 27.4 for
Certain Developing Country Members
COSTA RICA
The following communication, dated 27 June 2003, has been received from the Permanent
Mission of the Republic of Costa Rica.
_______________
In accordance with the procedures agreed at the Doha Ministerial Conference in document
G/SCM/39 concerning the mechanism for the ex tension of export subsidy programmes and, in
particular, the provisions of paragraph 1(d) and paragraphs 3 and 4 of that document, the Government
of Costa Rica is submitting this updating notification concerning the programmes for which an
extension has been granted (see documents G/SCM/61 and 62).
In compliance with the standstill requirements, the programmes contained in this notification
have not undergone any modification.G/SCM/N/95/CRI
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CONTENTS
Page
Notificat ion ................................................................................................................... ........................ 1
ANNEXES
Law No. 7210, Article 23 as amended by Law No. 8262 of 2 May 2002 .......................................... 11
Decree No. 29962-H of 22 September 2001....................................................................................... 1 2
Decree No. 30124-H of 25 January 2002 .......................................................................................... .1 5
Decree No. 30407-H of 18 April 2002 ............................................................................................ ... 17
Decree No. 30849-H of 23 October 2002.......................................................................................... .1 9G/SCM/N/95/CRI
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A. STANDSTILL REQUIREMENTS OF THE PROCEDURES FOR EXTENSIONS UNDER ARTICLE 27.4
The programmes contained in this notification, which have been granted extensions under
Article 27.4 of the Agreement on Subsidies and C ountervailing Measures, have not been modified
with respect to the requirements of document  G/SCM/39.
B. THE DUTY -FREE ZONE REGIME
1. Description of the subsidy
The Duty-Free Zone Regime is the set of incentives and benefits offered by the State to
enterprises making new investments in Costa Rica, subject to compliance with the obligations set
down in Law No. 7210 and amendments thereto, and its implementing regulations. One of the
qualification criteria is the requirement that at least 75 per cent of the enterprise's production must beexported. The Regulations lay down the definition of "new investments in the country". The
establishment location of a group of enterprises operating as beneficiaries of this Regime is called a
"Duty-Free Zone", which is required to be a defined area, without a resident population, which is
authorised by the Executive to operate in this capacity.
2. Period of the notification
 This notification provides a description of the Duty-Free Zone Regime corresponding to
calendar year 2002.
 
3. Policy objective
The fundamental objective of the Law is to promote the socio-economic development of
Costa Rica by attracting foreign investment, domesti c investment and the promotion of exports. The
duty-free zone regime is an important economic instrument for raising the standard of living of the
population of Costa Rica, particularly by creati ng sources of employment and supporting human
development, with a special focus on less-developed areas of the country. This type of regime is
conducive to the establishment of enterprises performing a full range of operations and productionprocesses which contribute to the generation of wealth and technological know-how, and increase the
country's ability to be competitive internationally.
 
4. Background and authority
Duty-Free Zone Law, Law No. 7210 of 23 Novemb er 1990 (full text attached as an Annex to
Costa Rica's notification G/SCM/N/71/CRI of  5 March 2002) and amendments thereto1.
Regulations Implementing the Duty-Free Zone Law – Executive Decree No. 29606-H-
COMEX of 18 June 2001 (full text attached as an Annex to Costa Rica's notification
G/SCM/N/71/CRI of 5 March 2002) and amendments thereto2.
                                                     
1 The amendments to Law 7210 of 23 November 1990 are contained in Law 7467 of
20 December 1994, Law 7535 of 1 August 1995, Law No. 7638 of 30 October 1996, Law No. 4924 of
17 September 1997 and Law No. 7830 of 22 September 1998 (full texts of this legislation attached as Annexesto Costa Rica's notification G/SCM/N/71/CRI of 5 March 2002). Law No. 8262 of 2 May 2002 amendedArticle 23 of Law 7210; the changes are included in the annexed version of this Article.
2 The amendments to Executive Decree No. 29606-H-COMEX of 18 June 2001 are contained in:
Executive Decree No. 29962 of 22 September 2001 (attached as an Annex to this notification), Executive
Decree No. 30124 of 25 January 2002 (attached as an Annex to this notification), Executive Decree No. 30407G/SCM/N/95/CRI
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General Customs Law, Law No. 7557 of 20 October 1995, Section I, Chapter V (Duty-Free
Zone Regime3) and amendments thereto4.
 Regulations Implementing the General Customs Law, Chapter X (Duty-Free Zone Regime),
Executive Decree No. 25270-H of 28 June 19965 and amendments thereto6.
 
5. Form of subsidy
The subsidy is essentially an exemption from payment of all taxes, consular fees and duties.
The subsidy is provided in the manner set out below.
The incentives granted by this regime are:
(a) Exemption from all tax and consular fees on imports of raw materials, manufactured
and semi-manufactured products, components and parts, packing and packaging
materials, and other goods and merchandise required for the operation of theenterprise;
(b) exemption from all tax and consular fees on imports of machinery, equipment,
accessories and spare parts, and on automotive vehicles required for the operation,
production, administration and transport activities of the enterprise;
(c) exemption from all tax and consular fees on imports of fuel, oil and lubricants
required for the operation of such enterprises;
(d) exemption from all tax relating to the export or re-export of products.  This
exemption is granted for the re-export from the Zones of production machinery and
equipment which entered pursuant to the law;
(e) exemption from payment of tax on capital and net assets, and payment of land tax;(f) exemption from sales and consumption tax on purchases of goods and services;
                                                                                                                                                                    
of 18 April 2002 (attached as an Annex to this notification),  and Executive Decree No. 30849 of
23 October 2002 (attached as an Annex to this notification).
3 Parts referred to attached as an Annex to Costa Rica's notification G/SCM/N/71/CRI of
5 March 2002. The full text is available for examination in the archives of the Legislative Division,Ms S. Aspinall, office 1028, telephone 739 51 09.
4 The amendments to the General Customs Law, Law No. 7557 of 20 October 1995, are contained in
Law 7900 of 3 August 1999 (available for examination in the archives of the Legislative Division).
5 Parts referred to attached as an Annex to Costa Rica's notification G/SCM/N/71/CRI of
5 March 2002.  The full text is available for examination in the archives of the Legislative Division.
6 The amendments to the Regulations Implementing the General Customs Law, Chapter X (Duty-Free
Zone Regime), Executive Decree No. No. 25270-H of 28 June 1996, are contained in Executive Decree 25295
of 17 June 1996 (available for examination in the archives of the Legislative Division), Executive Decree 26285
of 18 August 1997 (full text attached as an Annex to Costa Rica's notification G/SCM/N/71/CRI of5 March 2002), Executive Decree 26961 of 30 March 1998 (available for examination in the archives of theLegislative Division), Decree 27717 of 23 February 1999 (available for examination in the archives of theLegislative Division), Executive Decree 28242 of 30 September 1999 (available for examination in the archivesof the Legislative Division) and Executive Decree 28976 of 27 September 2000 (available for examination in
the archives of the Legislative Division).G/SCM/N/95/CRI
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(g) exemption from all taxes on remittances abroad;
(h) exemption from all taxes on profits, and any other taxes for which the tax base is
determined according to gross or net earnings, dividends paid to shareholders, orrevenue or sales;
(i) exemption from any municipal tax or business tax;(j) exemption from any taxes on imports or exports of commercial or industrial samples;(k) to enhance their business operations, enterprises covered by the Duty-Free Zone
Regime may freely execute all kinds of deeds and contracts in foreign currency with
respect to international transactions or transactions with other enterprises established
under the Duty-Free Zone Regime;
(l) enterprises based in relatively less-developed areas are entitled to a credit of 10 per
cent of the amount paid as wages and salaries during the previous year, with that
percentage decreasing by two percentage points per annum, through to its termination
in the fifth year;
(m) export processing enterprises operating as beneficiaries of the Duty-Free Zone
Regime which, on completion of four years of operation under that Regime, reinvest
in the country may be granted an additional exemption from payment of income tax,
for a percentage corresponding to the ratio of the reinvestment to the original
investment.
The above exemptions remain subject to fulfilment of certain specific requirements laid down
by Laws and Regulations, and international agreements signed and approved by the country.
 
6. Beneficiaries and mechanism
The following types of enterprise qualify for the Duty-Free Zone Regime:
(a) Export processing industries which produce, process or assemble for export or re-
export;
(b) export trading enterprises, with no production activity, which merely handle, re-pack
or re-distribute non-traditional merchandise and products for export or re-export;
(c) service industries and enterprises which export services to natural or legal persons
domiciled abroad, or provide the services to companies which are beneficiaries of
Duty-Free Zone Regime, in the latter case provided that the services are directly
related to the production process of the companies which are beneficiaries of the
Duty-Free Zone Regime;
(d) enterprises managing industrial parks where enterprises are to be based under the
Duty-Free Zone Regime, provided that the parks meet certain minimum conditions
regarding infrastructure and availability of services, in according with the Regulations
implementing the Law;
(e) enterprises or entities engaged in scientific research to raise the technological level of
the country's industrial or agribusiness activity and foreign trade;G/SCM/N/95/CRI
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(f) enterprises operating shipyards or dry or floating docks for the construction, repair or
maintenance of ships.
Export trading enterprises do not qualify for the exemptions under indents (g) and (h) of
section A.5 of this notification.  In this context it should be noted that the great majority of enterprises
operating under the Duty-Free Zone Regime are export processing industries rather than export
trading enterprises.
Banking, financial and insurance entities based in duty-free zones do not qualify for the
benefits of this Regime. Neither do natural or legal persons engaged in providing professional servicesqualify for the Regime.
There are several stages in the granting of Regime status:
(a) The natural or legal person wishing to join the Duty-Free Zone Regime is required to
submit the relevant application to the Corporation
7 (rights and obligations currently
vested in the Foreign Trade Promotion entity (PROCOMER)), pursuant to
Article 13(a) of Law No. 7638 of 30 Octobe r 1996), to be duly authenticated by a
Notary Public, and to be accompanied by detailed information on the pollution caused
by the process and its waste and the documents requested by the Board of Directorsof the Corporation. Generally speaking, a ll applications must comply with the
relevant instructions issued by the Corporation.
(b) The Corporation examines the application and information included, subject to
provision of all the required details, and forwards an opinion to the Board ofDirectors, which is then required to decide on the matter by no later than at the
ordinary meeting following receipt of the opinion, or at an extraordinary meeting if so
agreed by four of its members.
(c) At its discretion, the Corporation may seek specialist opinions from various State
institutions to assist its examination of the enterprise's application.
(d) If the recommendation is approved, it is then ratified by the Executive, by a
resolution citing the details specified in the Regulations implementing the Law.
7. Estimated amount of the subsidy
Since this subsidy involves exemptions from a number of different taxes and consular fees,
which vary according to the level of compliance with the specified requirements, the comprehensive
information required to estimate the amount of the subsidy is not available.
 
8. Duration of the subsidy
The Regime benefits apply as from the point in time when Duty-Free Regime status is granted
to the enterprises applying for that status.  Except in the case of cancellation of Regime status by the
Ministry of Foreign Trade, relinquishment by the beneficiary enterprise and specific exceptions for
any of the incentives as set out below, Duty-Free Zone status is held for an indefinite term.
                                                     
7 "Corporation" means "Corporación de la Zona Franca de Exportaciones S.A." (Export Duty-Free
Zones Corporation, public limited company), pursuant to the General Customs Law, Law No. 7557 of
20 October 1995.G/SCM/N/95/CRI
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Of the incentives described in No. 5 of this notification, the following are subject to a specific
expiry date:
 
• Exemption from taxes on capital and net assets, and payment of land tax, for a period
of ten years.8
• exemption from all taxes on profits and any other tax for which the tax base is
determined according to gross or net earnings, dividends paid to shareholders orrevenue or sales
9, according to the following distinctions:
(a) For enterprises based in "relatively more developed areas", the exemption is 100 per
cent for a period of up to eight years, a nd 50 per cent for the following four years.
(b) For enterprises based in "relatively less developed areas", the exemption is 100 per
cent for a period of up to 12 years, and 50 per cent for the following six years.
(c) For export processing enterprises which, after operating for four years under the
Regime, make investments in Costa Rica, there is a possibility of a further exemption
of 75 per cent for up to four years, depending on the reinvestment amount.
• Exemption from all municipal tax and business tax for a period of 10 years.10
9. Trade effects of the subsidy
At the present time there are 158 enterprises receiving the benefits of Duty-Free Zone status.
Between them, those firms generated 50 per cent of the total exports of Costa Rica in 2002, as
compared with 1991, when 81 enterprises covered by the regime accounted for only 9.3 per cent of
total exports.
The vigorous activity of Duty-Free Zone firms can be seen not just from the quantity of
exports, which have grown by a factor of 13 over the last decade, but also from the positive impact on
the economy from the point of view of generating employment. Duty-Free Zone firms directly employ
approximately 34,000 workers, around three-quarters of whom are manual workers or citizens with a
low level of educational qualifications.
Along with this favourable socio-economic impact, the establishment of high-technology
enterprises has been conducive to technology transfer and the development of a significant
knowledge-based industry in the domestic market, plus a specialized and highly competitive labour
force.
                                                     
8 See section 5(e) of this notification.
9 See section 5(h) of this notification.
10 See section 5(i) and (m) of this notification.G/SCM/N/95/CRI
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Costa Rica:  Total Exports and Duty-Free Zone Exports
In Million US$
2000 2001 2002
Duty-Free Zone 2,997.3 2,377.5 2,657.3
Total exports 5,930.6 5,040.0 5,281.3
C. THE INWARD PROCESSING REGIME
1. Description of the subsidy
The inward processing regime is the Customs regime allowing the entry of merchandise into
the national Customs territory with suspension of all kinds of taxes, subject to lodgement of a
guarantee deposit.  The goods must be re-exported, within time-limits laid down in the relevant
regulations, after undergoing processing, repair, reconstruction, installation, assembly, or after being
incorporated in sub-assemblies, machinery, transport equipment in general or appliances with a higherdegree of technological or functional complexity, or after being used for other similar purposes, in
situations as laid down in regulations or provisio ns stipulated for this purpose by the competent
administrative authority.
Applications for a transition period for the Inward Processing Regime refer solely to
exemptions from import duties and indirect taxes meeting one of the conditions laid down in
paragraphs (g), (h) or (i) of Annex I to the SCM Agreement.
2. Period of notification
This notification provides a description of the Inward Processing Regime corresponding to
calendar year 2002.
3. Policy objective
The inward processing regime is designed to promote production, employment, and foreign
and domestic investment, which inevitably contributes towards increasing exports and domesticconsumption. The conjunction of all these aspects helps to achieve national development objectives
such as raising the standard of living of the population, increasing income levels, reducing
unemployment and increasing the country's productivity and ability to compete internationally.
 
4. Background and authority
General Customs Law, Law No. 7557 of 20 October 1995, Chapter VI (Processing
Regimes)11 and amendments thereto12.
Regulations Implementing the General Customs Law, Chapter XIII (Inward Processing
Regime), Executive Decree No. 25270-H of 28 June 199613, and amendments thereto14.
                                                     
11 Parts referred to attached as an Annex to Costa Rica's notification G/SCM/N/71/CRI of
5 March 2002.  The full text is available for examination in the archives of the Legislative Division.
12 Cf. footnote 4.
13 Parts referred to attached as an Annex to Costa Rica's notification G/SCM/N/71/CRI of
5 March 2002.  The full text is available for examination in the archives of the Legislative Division.
14 Cf. footnote 6.G/SCM/N/95/CRI
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Regulations on the Inward Processing and Duty Refund Regimes, Executive Decree
No. 26285-H-COMEX of 19 August 1997 (full text atta ched as an Annex to Costa Rica's notification
G/SCM/N/71/CRI of 5 March 2002 ), and amendments thereto15.
5. Form of subsidy
The inward processing subsidy allows the entry of merchandise into the national Customs
territory with suspension of all kinds of taxes, subject to lodgement of a guarantee deposit.  The goods
must be re-exported, within time-limits laid down in the relevant regulations, after undergoing
processing, repair, reconstruction, installation, assembly, or after being incorporated in sub-
assemblies, machinery, transport equipment in ge neral or appliances with a higher degree of
technological or functional complexity, or after being used for other similar purposes, in situations as
laid down in regulations or provisions stipulated for this purpose by the competent administrative
authority.
6. Beneficiaries and mechanism
To qualify for the Regime, the enterprise must choose one of the options available:
 
(a) 100 per cent re-export option: enterprises choosing this option may not sell their
products on the domestic market;
(b) re-export and domestic sale option: under this option enterprises may sell the goods
on the domestic market or simply re-export them.
Enterprises operating under the "domestic sale" option are required to pay the full tax payable
for the definitive importation of the goods.  Similarly, on the entry of the machinery and equipmentunder the regime, they are required to pay the proportion of tax corresponding to the percentage of
sales on the domestic market as a ratio of the total sales of the enterprise.
The obligations for regime beneficiaries include the following: to submit reports on all their
operations to the Management of PROCOMER; to keep a log of operations carried out under the
regime; prior to commencing operations, to apply to the Directorate-General of Customs for
permission to operate as a Customs Agent; to keep goods entering under the regime in authorizedpremises or plants; to keep a separate inventory control system and accounting records for operations
carried out under the regime; to comply with Customs legislation requirements, etc.
7. Estimated amount of the subsidy
The information required to estimate the amount of the subsidy granted under this regime is
not available.
 
8. Duration of the subsidy
The Regime benefits apply as from the date of issue of the authorization to commence
activities under the Inward Processing Regime.  Except in the event of the revocation of the Regime
                                                     
15 The amendments to the Regulations Implementing the Inward Processing and Duty Refund Regimes,
Executive Decree No. 26285-H-COMEX of 19 August 1997, are contained in Executive Decree 27329 of26 August 1998 and Executive Decree 29055 of 31 October 2000 (full texts attached as an Annex to Costa
Rica's notification G/SCM/N/71/CRI of 5 March 2002).G/SCM/N/95/CRI
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by the Ministry of Foreign Trade, or relinquishment by the enterprise covered by the Regime, the
benefits granted by this Regime continue for an indefinite term.
 
9. Trade effects of the subsidy
At present, there are 80 active enterprises benefiting under the Inward Processing Regime.  In
2002, this Regime provided employment for about 15,000 people and contributed around 6 per cent of
total exports.
In 2002, about 88 per cent of exports under the Inward Processing Regime were sent to the
North American market, the balance going to So uth American and Central American countries,
among others.
It should be noted that a considerable proportion of the firms operating under this regime are
located in areas with little urban development, and accordingly represent a very significant source of
employment for the area.
Costa Rica:  Total Exports and Inward Processing Exports
In Million US$
2000 2001 2002
Inward processing 392.3 345.0 332.4
Total exports 5,897.5 5,040.0 5,281.3G/SCM/N/95/CRI
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Duty-Free Zone Regime Law
Law No. 7210
...
Article 23
Domestic enterprises providing enterprises based in Duty-Free Zones with services, domestic
raw materials, and products, parts or components partly or completely manufactured within the
country shall neither charge nor withhold sales or selective consumption tax on these transactions.Domestic providers shall only record and set down, in the corresponding tax return, the amount of
exempt transactions, whether sales or consumption.
 (Amended by Law No. 8262 of 2 May 2002)
...G/SCM/N/95/CRI
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DECREE NO. 29962-H-COMEX
THE PRESIDENT OF THE REPUBLIC AND THE MINISTERS
OF FOREIGN TRADE AND FINANCE
Under the powers conferred upon them by Article 140, indents (3) and (18) of the Political
Constitution; Article 27, paragraph 1 and Article 28, paragraph 2, indent (b) of the General Public
Administration Law, Law No. 6227, of 2 May 1978; Article 2, indents (g), (h) and (i) and Article 8 ofthe Law establishing the Ministry of Foreign Trade and establishing the Costa Rica Foreign Trade
Promotion Entity, Law No. 7638 of 30 October 1996, and the Duty-Free Zone Regime Law, Law No.
7210 of 23 November 1990, and amendments thereto.
whereas :
1. The expansion of foreign trade operations is one of the factors in Costa Rica's
development inasmuch as it promotes exports;
2. the duty-free zone regime attracts foreign investment thereby helping to raise living
standards by creating new sources of employment with a positive impact on the
quality of life of Costa Ricans;
3. it is necessary to develop facilitative measures to promote commercial ties between
domestic enterprises and duty-free zone regime beneficiaries so as to enable them tobecome more competitive;
4. under Article 23 of the Duty-Free Zone Regime Law No. 7210 of 23 November 1990
and the amendments thereto sales by domestic enterprises to enterprises operating
under the duty-free zone regime are deemed to be exports;
5. the treatment as exports accorded to sales by domestic enterprises to enterprises
operating under the duty-free zone regime are compatible with the provisions of
Article 9 of the General Sales Tax Law according to which exports are exempt,  a
status identified with non-liability to tax.  Consequently, from this standpoint, no
exemption formalities are required, which is consistent with the State's interest in
advancing the process of deregulation;
6. supervision of the General Sales Tax and the Selective Consumption Tax to which
domestic goods and goods cleared for home use are subject when marketed is the
responsibility of the Directorate-General of Taxation, in accordance with its powers;
7. according to Executive Decree No. 29606-H-COMEX, published in La Gaceta
No. 121 of 25 June 2001, duty-free zone enterprises must send electronically to the
local customs authority a monthly Duty-Free Zone Customs Declaration for each
domestic supplier.  This notwithstanding, since the request for Customs information
(RIS) available in the National Customs Service records a quantity of information notrequired for local purchases, it is necessary to amend the decree in question to make it
consistent with the aim of facilitating and expediting the processing of local purchase
transactions,G/SCM/N/95/CRI
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now therefore ,
DECREE
Article 1.  Article 50 of Executive Decree No. 29606-H-COMEX, published in La Gaceta
No. 121 of 25 June 2001, is hereby amended to read as follows:
"Article 50.  Transactions carried out under the provisions of the preceding article
need not be accompanied by a Duty-Free Zone Customs Declaration for each such purchase. The
arrangements whereby General Sales Tax and Selective Consumption Tax are not payable shall be
based on valid supporting documents issued by the domestic supplier enterprise and by the purchase
order or equivalent document duly issued by the duty-free zone regime beneficiary.
Duty-free zone enterprises shall send electronically to the Foreign Trade Promotion Entity, in
the format and using data media specified by the latter, a report on the local purchases of materials
and merchandise made from domestic suppliers, submission of printouts not being required.  The
operations reported shall not be included in the Directorate-General of Taxation form D-151 "AnnualDeclaration of Customers and Suppliers" establis hed by Resolution No. 08-97 of the Directorate-
General of Taxation of 23 July 1997 (0800h).
This report must be submitted within the first 10 business days of each month, with
information on the local purchases made in the immediately preceding month; it shall take the form ofa sworn statement and PROCOMER shall send the corresponding information quarterly to Banco
Central de Costa Rica and annually to the Directorate-General of Taxation, as the basis for the
necessary retrospective verification procedures.
The beneficiary enterprise shall retain the local purchase documents and information for the
prescriptive period indicated in Article 51 of the Code of Tax Rules and Procedures.
In the case of the purchase of public or private services on which tax is payable, the
beneficiary must submit a monthly report to Procomer, in the format and using data media as
specified by Procomer for this purpose; Procomer sh all forward the report to the Ministry of Finance
and Banco Central de Costa Rica."
Article 2.  Article 51 of Executive Decree No. 29606-H-COMEX, published in La Gaceta
No. 121 of 25 June 2001, is hereby amended to read as follows:
"Article 51.  For the purpose of preparing th e sworn statement on sales tax (form D-104), the
domestic supplier shall report sales made to duty-free zone regime beneficiary enterprises in boxNo. 20 "Sales for export" so that they do not form pa rt of the tax base. The Ministry of Finance shall
use this information and check it against the information forwarded by PROCOMER from the
monthly local purchase report, or in the case of services the report produced by the beneficiary
enterprise.
In addition to the information in its sales records as required under the legislation on General
Sales Tax, the domestic supplier shall also provide the number of the purchase order or equivalentG/SCM/N/95/CRI
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document issued by the duty-free zone enterprise and the date of the document, in cases where its
customer was an enterprise covered by the duty-free zone regime."
Article 3.  Article 53 of Executive Decree  No. 29606-H-COMEX, published in La Gaceta
No. 121 of 25 June 2001, is hereby amended to read as follows:
"Article 53.  As the documentary basis for a sale to a regime beneficiary, a domestic supplier
of services, materials and merchandise shall be required to provide the purchase order or equivalent
document, as laid down in Article 50 of these Regulations. The supplier must keep copies of invoices
to duty-free zone enterprises with the "receive d as specified" endorsement in the correct order.
The sale invoice of the domestic supplier must show, in addition to the usual details, the
number and date of the beneficiary's purchase order or the equivalent document.
Article 4.  Transitional Clause IV of Exec utive Decree No. 29606-H-COMEX, published in
La Gaceta No. 121 of 25 June 2001, is hereby amended to read as follows:
"Transitional Clause IV.  Until such time as the Foreign Trade Promotion Entity makes the
required adjustments for the transmission of the local purchases and services report required
of duty-free zone enterprises,  the latter shall use the procedure currently in place.  In any
event, these adjustments must be made with in a maximum period of two months from the
entry into force of this Decree."
Article 5.  Transitional Clause V of Executive Decree No. 29606-H-COMEX, published in La
Gaceta No. 121 of 25 June 2001, is hereby repealed.
Article 6.  To apply as from publication.
Done in the Presidency of the Republic.  San José, on the twenty-second day of September in
the year two thousand and one.
MIGUEL ANGEL RODRÍGUEZ ECHEVERRÍA.  Minister  of Finance, Alberto Dent Zeledón, and
Minister of Foreign Trade, F. Tomás Du eñas Leiva—One—(Application No. 520)—C-24220—
(D29962-83097).G/SCM/N/95/CRI
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DECREE NO. 30124-H-COMEX
THE PRESIDENT OF THE REPUBLIC AND THE MINISTERS
OF FOREIGN TRADE AND FINANCE
Under the powers conferred upon them by Article 140, indents (3) and (18) of the Political
Constitution; Article 27, paragraph 1 and Article 28, paragraph 2, indent (b) of the General Public
Administration Law, Law No. 6227 of 2 May 1978; Article 2, indents (g), (h) and (i) and Article 8 of
the Law establishing the Costa Rica Foreign Trade Promotion Entity, Law No. 7638 of
30 October 1996, and the General Customs Law, Law No. 7557.
whereas :
1. The duty-free zone regime is an instrument for making investment in our country
more attractive and hence a fit mechanism for generating more opportunities andsources of employment for Costa Ricans and improving their standard of living;
2. the rules governing the duty-free zone regime must be consistent with the
environmental and health regulations so as not to impede the processing of the
enterprises' rubbish and waste;
3. in order to promote sustainable development and the environment it is necessary to
modify the present rules relating to the processing of the waste of duty-free zone
enterprises, so as to harmonize it with the plans for waste processing,
now therefore ,
D
ECREE
Article 1.  Article 79 of Executive Decree No. 29606-H-COMEX is hereby amended to read
as follows:
"In accordance with the provisions of Article 16 of Law No. 7210 and amendments thereto,
any beneficiaries deciding to dispose of scrap, by-products or waste must notify the
municipality for the location where they are based to that effect, in writing. [Personnel of] the
municipality must come to collect the scrap, by-products or waste within a period of threedays as from such notification, and shall draw up a deed, to be signed by the official at the
Customs post.
If [personnel of] the municipality fail to appear within the above deadline, or if the
municipality indicates it is not interested in taking possession of these items, the beneficiarymay donate them, destroy them or arrange for their inward clearance, subject to payment of
tax in accordance with the provisions of this Chapter.
Municipalities may conclude agreements with beneficiaries for the purpose of authorizing
them to deliver directly to a third party, designated by the municipality and expresslyspecified in the agreement, the scrap, by-products or waste whose disposal has been decided.G/SCM/N/95/CRI
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The said authorization may be granted for renewable periods of six months maximum and
shall be used as a substitute for the deed to be signed by the official at the Customs post.
Once the parties have signed the agreement, the duty-free zone regime beneficiary enterprise
shall not be required to notify the municipality every time it decides to dispose of scrap, by-
products or waste, as long as it is delivered directly to whoever has been designated in the
agreement, on the terms and conditions set out therein.
Regime beneficiaries may dispose freely of the packing and packaging of materials, goods,
machinery and equipment purchased under the regime."
Article 2.  To apply as from publication.
Done in the Presidency of the Republic.  San José, on the twenty-fifth day of January in the
year two thousand and two.
MIGUEL ANGEL RODRÍGUEZ ECHEVERRÍA.  Minister of Foreign Trade, F. Tomás Dueñas
Leiva, and Acting Minister of Finance, Ed gar Robles Cordero—One—(Application No. 02455)—
C-14870—(D30124-6575).G/SCM/N/95/CRI
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AMENDMENTS TO THE REGULATIONS IMPLEMENTING THE DUTY-FREE ZONE
REGIME LAW NO. 30407-H-COMEX
THE PRESIDENT OF THE REPUBLIC AND THE MINISTERS
OF FINANCE AND FOREIGN TRADE
Under the powers conferred upon them by Article 140, indents (3) and (18) of the Political
Constitution; Article 27, paragraph 1 and Article 28, paragraph 2, indent (b) of the General Public
Administration Law, Law No. 6227 of 2 May 1978; Article 2, indents (g), (h) and (i) and Article 8 of
the Law establishing the Ministry of Foreign Trade and establishing the Costa Rica Foreign Trade
Promotion Entity, Law No. 7638 of 30 October 1996, and amendments thereto, and Articles 50 and175 of the General Customs Law, Law No. 7557 of 5 October 1995.
whereas :
1. The expansion of foreign trade operations is one of the factors in Costa Rica's
development inasmuch as it promotes exports;
2. the duty-free zone regime attracts foreign investment thereby helping to raise living
standards by creating new sources of employment with a positive impact on the
quality of life of Costa Ricans;
3. with the passage of time, needs arise in relation to the authorized areas on which
enterprises covered by the duty-free zone regime are located, leading to their
extension or reduction to permit the establishment of new covered enterprises or
make more rational use of the area available, always with a view to promotingindustrial development and maintaining appropriate controls;
4. it is necessary to incorporate in the Regulations Implementing the Duty-Free Zone
Regime Law provisions that suitably regulate the extension and reduction of the total
available area of parks intended exclusively for service-providing or marketing
enterprises and the area of those intended for export processing enterprises and
enterprises of other categories specified in Article 17 of Law No. 7010 and itsamendments, the aim being to facilitate the growth of the total available area of such
parks or its reduction under conditions calculated to ensure optimum control over
such areas and the possible refunding in favour of the Treasury of sums which may
have been exempted in the process of developing the park,
now therefore ,
D
ECREE
Article 1.  An Article 22 bis shall be added to the Regulations Implementing the Duty-Free
Zone Regime Law, Executive Decree No. 29606-H-COMEX of 22 September 2001 and amendments
thereto, to read as follows:
"Article 22 bis.  Enterprises administering duty-free zone parks may extend or reduce the area
of the park, respectively, provided that they comp ly with the following conditions and requirements:G/SCM/N/95/CRI
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(a) The area added must be contiguous with the area previously authorized as a duty-free
zone.  Moreover, the resulting total area following extension or reduction must
always be maintained as a property, or properties, independent for registration
purposes. Reductions that affect the minimum infrastructure required for an industrialpark to be authorized as a duty-free zone or the minimum total available building area
required for parks intended exclusively for service-providing or marketing enterprises
shall not be accepted.
(b)  If the area is to be extended by adding one or more buildings or specific floors in a
building, the land on which such buildings are situated must also be contiguous with
the area of the park previously authorized as a duty-free zone.  Where floors in abuilding are added or excluded, the building must be subject to the horizontal
ownership regime and only complete floors may be added or excluded; if a floor is
divided into several subsidiary property units, they must all be added or excluded, as
the case may be.
(c) The park area resulting from the extension or reduction must be such that it can be
subjected to the necessary procedures for controlling the entry and exit of persons and
goods, in accordance with the General Customs Law and the corresponding
operational policies of the Directorate-General of Customs.
(d) If the property or properties to be added do not belong to the enterprise administering
the park, the application shall be accompanied by a document in which the owner
expressly agrees that the good or goods in his ownership shall be assigned to the
duty-free zone regime and undertakes to comply, where appropriate, with the laws
and regulations governing the duty-free zone regime, as required by Procomer and theDirectorate-General of Customs.  The fact that the enterprise administering the park is
not the registered owner of one or more of the properties that make up the park shall
not limit or diminish its responsibilities and obligations as administrator, within the
terms of Law No. 7210 and its amendments and these Regulations, and the
administrating enterprise must therefore adopt all the contractual provisions necessary
in its relations with the owners and/or lessees of properties that make up the park.
(e) If the infrastructure or buildings of the area it is wished to exclude have been built
using any form of statutory tax concession provided for development enterprises and
duty-free zone park administrators, the applicant enterprise shall proceed to refund
the taxes corresponding to those concessions, as determined by the Ministry of
Finance.  The area reduction application shall not become effective until such taxeshave been refunded.
(f) For the purposes of indent (ch) of Article 17 of Law No. 7210 and its amendments, it
shall be considered that an enterprise covered by the duty-free zone regime is set up
in a park if it operates within the area authorized as a park, whether as owner orlessee.  The administrating enterprises shall inform Procomer and the Directorate-
General of Customs of any change in the ownership or occupation of the area
authorized as a park, by such means and in such form as these bodies may specify.
(g) The conditions and requirements laid down in this article shall apply, where
appropriate, to applications for the authorization of new parks and to existing parks."
Article 2.  To apply as from publication.G/SCM/N/95/CRI
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DECREE NO. 30849-H-COMEX
THE PRESIDENT OF THE REPUBLIC AND THE MINISTERS
OF FINANCE AND FOREIGN TRADE
Under the powers conferred upon them by Articles 140, indents (3) and (18) and 146 of the
Political Constitution; Article 28, paragraph 2, indent (b) of the General Public Administration Law,
Law No. 6227 of 2 May 1978; Articles 11, 165 and 166 of the Central American Uniform Customs
Code II, Article 144 of the General Customs Law, Law No. 7557 of 8 November 1995, Article 263 of
the Regulations Implementing the General Customs Law, Executive Decree No. 25270-H of
14 June 1996 and amendments thereto, and Articles 28 and 76 of the Regulations Implementing the
Duty-Free Zone Law, Executive Decree No. 29606-H-COMEX.
whereas :
1. Article 11 of the General Customs Law, Law No. 7557, published in La Gaceta
No. 212 of 8 November 1995, confers upon the Directorate-General of Customs thepower to issue guidelines and policies for the activities of the customs and other
agencies for which it is responsible;
2. Articles 165 and 166 of the General Cu stoms Law permit the temporary admission of
the units used to transport goods subject to customs controls;
3. Article 144 of the General Customs Law establishes that transit ends with the
effective delivery of the goods at their destination, it being the responsibility of the
customs official or the person authorized to receive the goods immediately to inform
the competent authority of the condition of the packages and the security devices andof the fulfilment of the other transit requirements;
4. the transport units used for customs transit may enter and move about the national
territory under cover of the temporary admission procedure, subject to compliance
with the formalities required, although they may not be used for internal transit
operations;
5. Article 76 of the Regulations Implementing the Duty-Free Zone Regime Law
establishes the requirements for the movement of goods between the principal plant
and a satellite plant but does not envisage the possibility of using temporarily
admitted transport units for delivering the goods  to the satellite plant, under the terms
of the freight contract;
6. the last paragraph of Article 28 of the Regulations Implementing the Duty-Free Zone
Regime Law requires the use of the Duty-Free Zone Customs Declaration for
movements of goods between the principal plant and a warehouse, overlooking the
fact that some of these movements take place within the same park;
7. according to Article 9(b) of the General Customs Law, one of the objectives of the
National Customs Service is to support the development of foreign trade;
8. it is in the interests of the Executive Power to further the development of duty-free
zone enterprises, through facilitation and hence lower production costs, so as to
promote competitiveness without recourse to subsidies;G/SCM/N/95/CRI
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9. it is therefore necessary to amend Articles 28, 67 and 76 of the Regulations
Implementing the Duty-Free Zone Regime Law,
now therefore ,
DECREE
Article 1.  The second paragraph of Article 28 of the Regulations Implementing the Duty-Free
Zone Regime Law, Executive Decree No. 29606-H-COMEX, is hereby amended to read as follows:
"Article 28.  Warehouses shall be authorized only within an industrial park where there is not
sufficient space in the principal plant. If the warehouse is located in an industrial park under a
jurisdiction different from that of the principal plant, Customs controls shall be applied by the
Customs office in whose jurisdiction the said principal plant is located. Imports and exports may notbe carried out from such warehouses. For goods movements between the principal plant and the
warehouse, the Duty-Free Zone Customs Declaration shall be used; it shall not be required if both are
located within the same industrial park.  The above without prejudice to the internal controls and
adequate inventory records which the enterprise is required to maintain for monitoring purposes."
Article 2.  Article 67 of the Regulations Implementing the Duty-Free Zone Regime Law,
Executive Decree No. 29606-H-COMEX, shall be amended to read as follows:
"Article 67.  Any movement of materials and merchandise involving a Customs procedure
shall require completion of the Duty-Free Zone Customs Declaration, except for donations, purchasesof services and movements of materials and merchandise between the principal plant and a warehouse
when both are located within the same industrial park.  This without prejudice to the internal controls
and adequate inventory records which the enterprise is required to maintain for monitoring purposes.
A copy of the declaration must be submitted by the enterprise or the Customs office, as applicable, to
PROCOMER.
Customs seals supplied by PROCOMER must also  be used, except in the case of temporary
inward clearance operations, donations, sub-contracting arrangements, local purchases or transfers or
sales between enterprises located in the same industrial park.  The use of Customs seals shall not be
required for movements of materials and merchandise between the principal plant and warehouses
located within the same industrial park."
Article 3.  A second paragraph shall be added to Article 76 of the Regulations Implementing
the Duty-Free Zone Regime Law, Executive Decree No. 29606-H-COMEX, to read as follows:
"Article 76.  Transport units admitted temporarily into the national territory and carrying
goods the final destination of all or part of which is a satellite plant may be used to perform the freightcontract signed, insofar as so agreed between the parties and reflected therein, whenever such goods
are covered by a way-bill which expressly specifies the satellite plant as the final destination.  The
above shall be subject to the completion in the parent plant of the controls, inspections and other
formalities necessary for clearance and subsequent transfer to the satellite plant and compliance with
the provisions of Article 67 of these Regulations."
Article 4.  To apply as from publication.G/SCM/N/95/CRI
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Done in the Presidency of the Republic.  San José, on the twenty-third day of October in the year two
thousand and two.
ABEL PACHECO DE LA ESPRIELLA.  Acting Mi nister of Finance, Silena Alvarado
Viquez and Minister of Foreign Trade, Albe rto Trejos Zúñiga—One—(Application No. 6322)—
C-22320—(D30849-90180).
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