WT/TPR/S/83 Trade Policy Review
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III. TRADE POLICIES AND PRACTICES BY MEASURE
(1) INTRODUCTION
1. Since the last review of Costa Rica’s trade policies, access to the Costa Rican market has
improved appreciably.  The average tariff fell from about 12 per cent in 1995 to 7 per cent in
March 2000.  Nevertheless, agricultural products continue to face a significantly higher average level
of tariff protection than other products – about 15 per cent as compared with less than 6 per cent fornon-agricultural products.  The According to the Government, the average tariff has continued to fall,
reaching a level one percentage point lower for both agricultural and industrial sectors in August
2000.  Costa Rica maintains import tariff quotas for agricultural products under its Uruguay Round
minimum access commitments.  However, the relative ly low levels of utilization of these quotas
suggest that they have failed to live fully up to expectations with regard to market accessopportunities.  Costa Rica has bound all its entire tariff, except for 5 tariff lines.  Most lines were
bound at a maximum of 45 per cent; the main exceptions are agricultural products, for which the
maximum is 233 per cent.
2. In addition to import duties and charges, imports are subject to various internal taxes, which
are applied uniformly, irrespective of the country of exportation.  Internal taxes are applied at thesame rates to domestic and foreign products, except in the case of certain beverages.  Likewise, the
internal marketing regime for spirits and alcoholi c drinks treats foreign products, except for those
from Mexico and Central America, differently from domestic products.
3. The use of non-tariff barriers seems fairly limited.  Costa Rica maintains import restrictions
and prohibitions on a small number of products, generally for reasons of health, security and
environmental protection.  Between 1995 and 2000, Costa Rica initiated four investigations for unfair
trade practices, none of which gave rise to the imposition of anti-dumping or countervailing duties.Likewise, with the exception of the special safeguard measures applied to common black beans and
rice, Costa Rica has not applied any safeguard measure, either in the context of the WTO or under
regional arrangements.  In 1998, the National Deregulation Commission ( Comisión Nacional de
Desregulación ) was set up to promote a better climate for trade and investment by simplifying
procedures and removing unnecessary obstacles.
4. With a view to encouraging exports, Costa Rica applies various special import procedures, in
particular the free zone regime.  Until the end of 1999, Costa Rica issued tax credit certificates
(Certificados de Abono Tributario, CAT)), which entitl ed enterprises to export subsidies subject to the
satisfaction of certain local content requirements.  At the beginning of 2001, Costa Rica was still
taxing banana exports, after having removed the taxes on coffee and meat exports in 1999.  SinceMay 2000, in agreement with the Association of Coffee Producing Countries, Costa Rica has been
retaining 20 per cent of its exportable coffee production.  With respect to measures applied in other
markets, Costa Rican exports of bananas to the European Union and of textiles and made-up textile
products to both the United States and Canada have been subject to tariff quotas.
5. The new competition legislation, adopted in the mid-90s, has led to a steady increase in
investigations.  However, competition remains rath er restricted in some important sectors.  For
example, although legally it does not have exclusive rights, the Agro-Industrial Sugar Cane League
(Liga Agrícola Industrial de la Caña de Azúcar) controls the marketing, both internal and external, of
sugar and honey produced in Costa Rica.  Likewise, there is a State monopoly on the importation,
refining and wholesale distribution of crude oil and its derivatives.  The State also intervenes by
controlling the prices of various goods and services, where market conditions do not appear to ensureCosta Rica WT/TPR/S/83
Page 27
a balanced relationship between the parties, as in the case of public utilities and the marketing of
various agricultural products such as coffee, bananas and sugar.
6. Costa Rica operates numerous promotion programmes which affect almost every sector of the
economy.  Incentives are generally provided through financing programmes or in the form of tax
incentives.  There are no estimates of the overall costs and benefits of the current promotion
programmes, but their diversity and tendency to proliferate raise questions about their complexity andeffectiveness.
7. Costa Rica protects intellectual property rights by means of a combination of international
and national provisions.  In 1995, the national regulations were revised and supplemented in order to
clarify their conformity with international commitments.  The numerous reforms and the new laws
adopted in recent years have been notified to the Council for TRIPS.
(2) M
EASURES AFFECTING IMPORTS
(i) Procedures
8. The Costa Rican customs regime is based on th e Uniform Central American Customs Code II
(CAUCA II, approved by Law No. 7485 of 6 April 1995) and on the General Customs Act (Law
No. 7557 of 20 October 1995) and its Regulations (E xecutive Decree No. 25270-H of 14 June 1996).
CAUCA II establishes the basic customs legislation which must be applied in the signatory countries
in conformity with the requirements of the Cent ral American Common Market and the Convention on
the Central American Tariff and Customs Regime.  The General Customs Act regulates, on the basis
of community and international norms, the entry and exit of goods, vehicles and transport units, as
well as customs clearance and all that stems from it or from entry and exit.  The Regulations of the
General Customs Act contain the provisions necessary to apply both laws.
9. The General Customs Act lays down the objectives of the system of customs law, which include:
authorizing the proper collection of duties and the repression of illegal practices that undermine the
administration and control of foreign trade by the customs service; facilitating and expediting foreign
trade operations; and developing and enabling the implementation of the provisions of Central
American Common Market legislation and of the international conventions and treaties to which
Costa Rica is party.1
10. As a general rule, the lodging of a customs import declaration requires the intervention of a
customs broker and the declaration itself should contain the following information:  the identity of the
customs broker, the importer, the consignee, the exporter and the carrier; particulars of the country of
origin; a description of the goods; the location of the goods; the customs duty payable, any other
charges applicable, the exchange rate, and any relevant exemptions or tariff preferences; the conditionof the goods; details of the commercial invoice and any other documents necessary to check the
fulfilment of the tariff and non-tariff requirements; the value for customs purposes; the cost of
insurance and freight and the value declared on the invoice; the number and date of the bill of lading
or way-bill; and the customs procedure or treatment requested.
2  The customs declaration should be
accompanied by the commercial invoice (together with a translation if not in Spanish) and the bill of
lading or way-bill. Moreover, goods eligible for preferential treatment or subject to import controls
must be accompanied by additional documents such as certificates of origin, health certificates or
import permits (Section 2 (iii)).
                                                     
1 Law No. 7557, article 6.
2 Article 314, Executive Decree No. 25270-H of 14 June 1996.WT/TPR/S/83 Trade Policy Review
Page 28
11. Goods can be imported under the following customs procedures: outright (exportation,
importation and their variants – relief consignments, travellers' luggage, in-works clearance, etc.);
temporary (national and international customs transit, transhipment, transit by sea or air, customs
warehousing, repacking and sorting in a customs warehouse, temporary importation and exportation,
and onboard stores); procedures giving entitlement to relief from customs duties (free zones, re-
importation in the same state and re-exportation); processing (inward and outward); and drawback.3
12. Enterprises qualifying for in-works clearance or for the free zone, inward processing, express
delivery or duty-free shop procedures have the status of customs service auxiliaries.4  Subject to
authorization by the General Directorate of Customs, public entities may also carry out customs
clearance, on their own behalf or on behalf of another public entity.5
13. Decisions notified by customs, including the results of duty assessments, may be appealed
within three working days by the customs brok er, the consignee or the person to whom the
notification is addressed.  In principle, the competent customs office must give a ruling within three
working days of the lodging of an appeal.  If the ap plication for reconsideration is denied, in all or in
part, and an appeal is made to the hierarchical superior, the competent customs office must forward
the file to the General Directorate of Customs, which must rule within 15 days.  The administrativebody of last instance for appeals against decisions of the General Directorate of Customs is the
National Customs Tribunal (Tribunal Aduanero Nacional), an autonomous decision-making body
attached to the Ministry of Finance.
6
14. Between 1995 and 2000, the General Directorate of Customs received 3,758 administrative
appeals which gave rise to 2,862 resolutions.  The complaints made included complaints about undue
payment of internal taxes; miscalculated duties and taxes; tariff classification errors; discrepancies
with respect to the customs value of the goods and freight charges; penalties and fines; and
overpayments.  Between May 1998, when it was first set up, and October 2000, the National Customs
Tribunal gave 331 rulings.  Out of this total, at the beginning of 2001 only one case had been brought
before an administrative court whose decision was still pending.
15. The customs modernization programme begun in 1993 has produced significant results.
According to the Costa Rican authorities, the average customs clearance time (including only theactivities of the customs between the lodging of the declaration and the clearance of the goods) is one
hour.  Likewise, most customs offices are computeriz ed and 45 per cent of them are interconnected.
In October 2000, on average, 49 per cent of consignments were physically inspected.
7  According to
information provided by Costa Rican customs, for all customs offices the percentage of consignments
inspected on a random basis is approximately 5 per cent (general parameter); however, there are alsospecific parameters for certain importers.
                                                     
3 Law No. 7557, article 110.
4 Law No. 7557, article 49.
5 Law No. 7557, article 51.
6 Law No. 7557, articles 198-205.
7 This figure does not include the customs office of Peñas Blancas, because of database problems, or
the Anexión and Golfito customs offices, which are not computerized.  The figure of 49 per cent includescustoms declarations in which the value is not established by the importer.  Because of their nature these arealways selected for physical examination.  Ex officio  declarations are also included.Costa Rica WT/TPR/S/83
Page 29
(ii) Customs valuation and rules of origin
(a) Customs valuation
16. Between 1995 and 2000, Costa Rica used a mixed customs valuation system which combined
the methods of the Brussels Definition with those of Article VII of the GATT.  On 5 September 2000,
new legislation on the customs value of goods, based on the provisions of the Agreement on
Implementation of Article VII of the GATT 1994, entered into force with the publication of LawNo. 8013, which added a new title (Title XII – Customs Value of Imported Goods) to the General
Customs Act.
17. The new legislation allows the customs value to be determined, whether the importer requests
it or not, on the basis of the unit price for goods not sold in Costa Rica in the condition as imported
(cf. Article 5.2 of the Agreement on Implementation of Article VII of the GATT).  The customs value
includes the costs and charges specified in article 8.2 of the Agreement on Implementation of Article
VII of the GATT 1994 (cost of transport to the port or place of importation; loading, unloading and
handling charges associated with the transport of the goods to the port or place of importation; and the
cost of insurance).  Under the Costa Rican legi slation, Costa Rica will postpone the application of
article 1.2 (b) (iii) and article 6, which both relate to the determination of the customs value on thebasis of a computed value, for a period of not more than three years starting from 1 January 2000.
The General Customs Act requires importers to register with the National Customs Valuation and
Inspection Authority (Órgano Nacional de Valoración y Verificación Aduanera).  The obligation upon
importers to register dates from 1 September 1996.  Duly authorized customs officials are allowed
access to the Register to corroborate the information provided by an importer in his declaration and to
carry out any necessary investigations.
(b) Rules of origin18. Costa Rica applies preferential rules of origin defined in various trade agreements to which it
is party; however, it does not apply any non-preferential rules of origin.  Preferential rules of  origin
are defined in the following treaties:  Chapter V of the Costa Rica-Mexico Free Trade Agreement
(Law No. 7474 of 20 December 1994); the Regulations of the Free and Preferential Trade Agreement
between the Republics of Costa Rica and Panama (Executive Decree No. 17188-MEIC of26 April 1996); and the Central American Regulation on Rules of Origin (Executive Decree
No. 26833-MEIC of 20 March 1998) and Annex I (Specific Rules of Origin) to Executive Decree
No. 24712-MEIC of 15 November 1995.  Moreover, two treaties in process of being adopted, with
Chile and the Dominican Republic (see Section (iii) (c) below), also contain specific provisions on
rules of origin.
8
19. The preferential rules of origin applied by Costa Rica to goods not produced wholly in the
territory covered by a preferential trade agreement vary with the treaty and often with the nature of the
goods but, generally speaking, are based on the broad principle of change of tariff classification
supplemented by ancillary rules.  The latter generally include requirements relating to the value of
regional content, which can be calculated in accordance with the transaction value method or the netcost method.  The Costa Rican Government has pointed out that although the Central American
Regulation on Rules of Origin adopted within the framework of the Central American Common
Market contains provisions concerning the value of regional content, these provisions are not being
applied in practice.
                                                     
8 Chapter IV of the Central America-Dominican Republic Free Trade Agreement (Law No. 7882 of
9 June 1999) and Chapter 4 of the Central America-Chile Free Trade Agreement (draft Law No. 13809 of7 December 1999).WT/TPR/S/83 Trade Policy Review
Page 30
(iii) Tariffs
(a) Structure and levels
20. Costa Rica accords at least MFN treatment to all its trade partners.
21. Costa Rica applies the Central American Import Tariff, which contains the nomenclature for
the official classification of goods (Sistema Arancelario Centroamericano, SAC), together with the
import duty rates and the rules for the application of  its provisions.  This tariff is common to the
member countries of the Central American Co mmon Market (CACM).  The SAC is based on the
Harmonized Commodity Description and Coding Syst em (HS).  The second revision of the HS was
incorporated in the SAC on 1 September 1996 by Resolution No. 22-96 adopted on 22 May 1996 by
the Council of Ministers Responsible for Economic Integration and Regional Development (Consejo
de Ministros Responsables de la Integración Económica y Desarrollo Regional, COMRIEDRE).
22. The duties applied and changes in them must be approved by the Central American Tariff and
Customs Council (Consejo Arancelario y Aduanero Centroamericano).  The Second Protocol to the
Central American Tariff and Customs Conven tion, signed on 5 November 1994, allowed CACM
member countries to apply to third parties a tariff of more than 100 per cent on agricultural products
tarifficated in the Uruguay Round.  Later, the Third Protocol, signed on 12 December 1995,authorized the application of a zero-rate tariff to ra w materials.  At the same time, it became an agreed
objective of external tariff policy to arrive at levels of 0 per cent for raw materials and 15 per cent for
finished products, with intermediate levels of 5 and 10 per cent.
9
23. The general parameters of tariff policy were  specified in COMRIEDRE Resolution No. 26-96
of 22 May 1996, which established the following ad valorem tariff levels:  zero per cent for raw
materials and intermediate and capital goods not produced in the region; 5 per cent for raw materials
produced in the region; 10 per cent for intermediate and capital goods produced in the region; and15 per cent for finished goods.  Each member of the CACM has established its own programme of
tariff reduction for intraregional trade which, in the case of Costa Rica, ended in January 2000 for all
products other than the agricultural products tarifficated in the Uruguay Round.
24. In March 2000, the Costa Rican tariff contained 7,926 ten-digit tariff lines.  All import duties
are ad valorem and are applied to the c.i.f. value of  the goods.  Moreover, there is an additional tariff
of 1 per cent applied to the c.i.f. value of all imports, with the exception of those covered by the Free
Trade Treaties signed by Costa Rica with Mexi co and Panama, goods of CACM origin and goods
included in the WTO Information Technology Agreement (ITA).
10
25. In accordance with the tariff reduction programme approved at regional level, Costa Rica’s
average tariff has steadily decreased from 11.7 per cent in 1995 to 7 per cent in 2000 (Table III.1).Likewise, in conformity with CACM objectives, the great majority of tariff rates fall within the zero
to 15 per cent band, and about half are at the zero or 1 per cent level.
11  So far, the products which
have benefited from the largest tariff reductions are raw materials, intermediate products and capital
goods not produced in Central America.
                                                     
9 COMRIEDRE Resolution No. 13-95 of 12 December 1995.
10 Import tax introduced by Law No. 6946 of 13 January 1984.
11 In most cases, these lines have a zero rate of import duty, but they are subject to the 1 per cent tax
introduced by Law No. 6946.Costa Rica WT/TPR/S/83
Page 31
Table III.1
Trend of the average MFN tariff, 1995-2000a
Group 1995 1996 1997 1998 1999 2000
Agricultural productsb17.1 17.1 18.6 17.4 16.3 14.8
Other products 10.6 10.2 8.2 7.4 5.6 5.6
Total 11.7 11.3 9.7 8.9 7.1 7.0
a Calculated on the basis of the tariff levels in effect in January 1995, March 1996, February 1997, March 1998, February 1999
and March 2000.
b Defined in accordance with Annex I to the WTO Agreement on Agriculture.
Source: Ministry of Foreign Trade and WTO Secretariat estimates.
26. The tariff lines for agricultural products (defined in accordance with Annex I to the WTO
Agreement on Agriculture) are much more broa dly distributed than those for other products
(Chart III.1 and Table III.2).  Partly as a result of this greater dispersion, the average tariff foragricultural products is substantially higher than for other products.  The agricultural products with a
higher level of protection include the following:  meat of swine and some of its products (HS 02.03
and 02.10);  meat and edible offal of poultry (HS 02.07);  dairy produce (HS 04);  onions and shallots
(HS 07.03); leguminous vegetables (HS 07.13);  potatoes (HS 07.01, 07.10, 20.04 and 20.05);  rice
(HS 10.06);  sausages and prepared meat (HS 16. 01 and 16.02);  and sugar (HS 17.01) and molasses
(HS 17.03).
27. Costa Rica defines its own tariff policy within  the framework and guidelines established at
CACM level.  Reflecting these guidelines, the average tariffs applied in various manufacturing sectors
reveal a clearly expressed pattern of tariff rate escalation (Chart III.2).
(b) Tariff bindings
28. In the Uruguay Round, Costa Rica bound most tariff lines, 82 per cent of its entire customs
tariff, at a maximum level of 45 per cent ad valorem ; the products, mainly agricultural, which
received differential tariff treatment in Costa Rica’s Protocol of Accession, were not bound.  Thus,
alkylbenzenes and mixed alkylnaphthalenes (HS 38.17) and books, brochures and similar printed
matter (HS 49.01) remained unbound.  Costa Rica has transposed its Schedule of Commitments from
HS-92 to HS-96 and the new Schedule, having been approved by Members, is now in the process of
being published.
(c) Tariff preferences
29. In August 2000, Costa Rica was granting preferential tariff treatment to imports from the
CACM, Panama and Mexico (Table III.3).  Moreov er, at the end of October 2000, two other free
trade treaties were in the process of being approved by the legislature: the Free Trade Agreement
between Central America and the Dominican Repu blic (Law No. 7882 of 8 July 1999), awaiting
approval in the Dominican Republic, and the Free Trade Agreement between Central America and
Chile, awaiting approval in Chile.
12
                                                     
12 The Law approving the FTA with Chile was adopted by the Costa Rican Government on
25 February 2001.WT/TPR/S/83 Trade Policy Review
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(15.8%)
(12.1%)(17.8%)(45.9%)
(8.4%)
0100200300400500600
Duty free 1 [2-6] [7-10] [11-15] >15020406080100Chart III.1
Distribution of MFN tariff rates, March 2000a
Per centRunning percentage Number of tariff lines (% of total)
The total number of tariff lines is 1,237 for agriculture and 6,689 for non-agricultural products.
WTO Secretariat estimates based on data supplied by the Costa Rican authorities. a
Source:Agriculture
(0.1%)(18.3%)
(14.6%)
(11.9%)(51.8%)
(3.2%)
05001000150020002500300035004000
Duty free 1 [2-6] [7-10] [11-15] >15020406080100Non-agriculturePer cen tNumber of tariff lines
Number of tariff linesCosta Rica WT/TPR/S/83
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Table III.2
Summary analysis of the Costa Rican tariff
Tariff rates applied, March 2000
CategoryNumber
of linesAverage
tariff
appliedaRangeStandard
deviation CVbFinal bound
rate c
(%) (%) (%) Range
Total 7,926 7.0 0-163 9.8 1.4 0-233
By WTO category
Agricultural products 1,137 14.8 1-163 20.1 1.4 1-233
Live animals; animal products 134 29.9 1-163 39.0 1.3 10-233
Dairy produce 34 67.4 1-89 35.1 0.5 35-95
Coffee and tea, cocoa, sugar, etc. 218 12.5 1-89 10.6 0.8 5-95
Flowers and plants 70 6.2 1-15 6.3 1.0 1-45
Fruit and vegetables 262 14.8 1-50 7.9 0.5 5-45
Cereals 29 11.0 1-36 12.8 1.1 1-45
Oil seeds and oleaginous fruits, fats and oils and
their products99 7.4 1-31 5.8 0.8 1-45
Beverages and spirits 98 13.6 1-15 3.6 0.3 5-60
Tobacco 19 11.2 1-41 13.9 1.2 40-45
Non-agricultural products (incl. petroleum) 6,789 5.6 0-50 5.8 1.0 0-100
Fish and fish products 187 10.4 1-15 4.6 0.4 45
Mineral products, precious stones/metals 431 6.6 0-50 7.0 1.1 0-60
Metals 854 4.2 1-15 4.7 1.1 15-50
Leather, rubber, footwear and travel goods 225 8.3 1-15 5.5 0.7 25-70
Wood, pulp, paper and furniture 375 7.2 1-15 5.7 0.8 10-50
Textiles and clothing 1,058 10.3 1-50 5.0 0.5 30-70
Petroleum 32 7.8 2-15 5.3 0.7 50-45
For information:
Non-agricultural products (excl. petroleum) 6,757 5.6 0-50 5.8 1.0 0-100
By ISICd  sectors
Agriculture and fishing 482 9.8 1-89 10.2 1.0 1-95
Mining 122 4.6 1-50 8.9 1.9 45
Manufacturing industry 7,320 6.8 0-163 9.8 1.4 0-233
By HS sections
01 Live animals; animal products 314 20.6 1-163 28.3 1.4 5-233
02 Vegetable products 455 10.7 1-50 8.0 0.7 1-45
03 Fats and oils 58 9.3 1-31 6.5 0.7 5-45
04 Prepared foodstuffs, etc. 410 16.2 1-163 19.0 1.2 5-233
05 Mineral products 203 5.1 1-50 7.6 1.5 30-45
06 Products of the chemical industries 1,289 2.4 0-15 3.5 1.5 0-45
07 Plastics and rubber 406 6.0 1-15 4.9 0.8 5-45
08 Hides and skins, leather 98 9.9 1-15 5.7 0.6 5-60
09 Wood and articles of wood 113 9.3 1-15 5.1 0.5 10-45
10 Pulp, paper, etc. 230 5.6 1-15 5.4 1.0 20-50
11 Textiles and textile articles 1,014 10.2 1-50 5.2 0.5 45-60
12 Footwear and headgear 92 12.2 1-15 4.4 0.4 45-70
13 Articles of stone 210 7.7 0-15 6.2 0.8 0-60
14 Precious stones, etc. 57 8.4 1-15 5.3 0.6 40-45
15 Base metals and articles thereof 847 4.4 1-15 4.8 1.1 15-50
16 Machinery 1,269 3.1 0-15 4.7 1.5 0-50
17 Transport equipment 336 5.6 0-15 5.9 1.1 40-100
18 Precision instruments 296 4.0 0-15 5.1 1.3 0-45
19 Arms and ammunition 18 10.6 6-15 3.9 0.4 45
20 Miscellaneous manufactured articles 203 11.6 1-15 4.8 0.4 20-45
21 Works of art, etc. 8 5.0 1-10 4.5 0.9 45
a Includes the 1 per cent tax applied under Law No. 6946.
b CV = Coefficient of variation.
c Costa Rica has not bound the following headings:  3817100000, 3817200000, 4901100000, 4901910000 and 4901990000.
d Classification ISIC (Rev.2), excluding electricity (two lines).
Source: WTO Secretariat estimates based on data supplied by the Costa Rican authorities.WT/TPR/S/83 Trade Policy Review
Page 34
048121620
31 32 33 34 35 36 37 38 39Chart III.2
Tariff escalation for manufactured products, average tariff for March 2000a
Per cent
Raw materials
Semifinished s
Finishe d
31
32333435
36
3738Manufacture of food products, beverages and tobacco
T extile, clothing and leather industries
Wood and wood products, including furniture, industry
Manufacture  of pape r and paper products;  printing and publishingManufacture of chemicals and chemical products derived from petroleum and from carbon, rubber and plasticsManufacture of non-metal mineral products, except for derivatives of petroleum and carbonBasic metal industriesManufacture of metal 
products, machiner y and e quipment
By 2-digit ISIC category.
WTO  Se cre tariat e stimates base d on data su pplied b y the Costa Rican authorities.a
Source:
30. Most products of CACM origin benefit from a zero tariff rate.  The limitations on free trade at
the Central American level are set out in Annex A to the General Central American EconomicIntegration Treaty.  In the case of Costa Rica, coffee, whether or not roasted, sugars, wheat flour and
ethyl alcohol are the only products not to benefit from the free trade regime.  Restricted products are
subject to import licensing or the payment of im port duties.  With respect to products subject to
import licensing, countries may grant import licences at their discretion, in which case the products
benefit from a free trade regime; if a licence is not granted, duty must be paid.
31. The tariff concessions granted to imports originating in Mexico extend over almost the entire
customs tariff; in August 2000, the average preferential tariff amounted to 1.6 per cent.  The products
receiving restricted preferential treatment include:  tobacco; some dairy produce; sugar; footwear;
powder for the preparation of beverages; meat of bovine animals; and cocoa powder.  Although
significant, the concessions granted to imports originating in Panama are more limited.Costa Rica WT/TPR/S/83
Page 35
Table III.3
Costa Rican preferential tariff rates for the Central American Common Market, Panama and Mexico
(Percentages)
Preferential rates
HS code Description of goodsNumber
of lines MFNaCACMbPanamac dMexicoe
Total 7,987 6.9 0.1 4.2 1.6
01 Live animals 21 6.6 0.0 5.1 0.0
02 Meat and edible meat offal 80 29.2 0.0 27.2 21.0
03 Fish and crustaceans; molluscs, etc. 143 9.9 0.0 8.7 2.9
04 Milk and dairy produce; birds’ eggs; natural honey, etc. 45 49.4 0.0 13.4 47.5
05 Products of animal origin n.e.s. 25 5.0 0.0 3.6 0.0
06 Live trees and other plants, cut flowers, etc. 42 10.8 0.0 7.4 1.1
07 Edible vegetables and certain roots and tubers 96 16.8 0.0 9.3 4.8
08 Edible fruit and nuts; peel of citrus fruit or melons 101 13.2 0.0 7.3 2.4
09 Coffee, tea, maté, and spices 52 11.3 2.1 5.3 2.7
10 Cereals 29 10.0 0.0 3.4 3.3
11 Products of the milling industry 39 7.4 0.1 6.4 2.3
12 Oil seeds and oleaginous fruits;  miscellaneous grains, seeds and fruit, etc. 66 3.5 0.0 1.2 0.3
13 Lac; gums, resins and other vegetable saps and extracts 14 1.0 0.0 0.0 0.0
14 Vegetable plaiting materials; vegetable products n.e.s.. 16 4.4 0.0 3.1 0.4
15 Animal or vegetable fats and oils, etc. 59 9.2 0.0 8.1 3.8
16 Preparations of meat, of fish or of crustaceans, etc. 67 29.5 0.0 20.1 12.3
17 Sugars and sugar confectionery 24 18.7 6.1 15.3 16.2
18 Cocoa and cocoa preparations 18 10.8 0.0 1.8 6.1
19 Preparations of cereals, flour, starch, or milk, etc. 34 13.5 0.0 8.8 6.8
20 Preparations of vegetables, fruit, nuts or other parts of plants 83 14.5 0.0 6.2 2.2
21 Miscellaneous edible preparations 45 14.1 0.0 7.0 3.1
22 Beverages, spirits and vinegar 79 14.5 3.6 9.9 5.7
23 Residues and waste from the food industries, etc. 44 8.3 0.0 3.8 2.7
24 Tobacco and manufactured tob acco su bstitutes 19 11.2 0.0 1.0 11.2
25 Salt; sulphur; earths and stone, etc. 89 5.6 0.0 3.0 0.6
26 Ores, slag and ash 35 1.4 0.0 0.4 0.0
27 Mineral fuels, mineral oils and products of their distillation,  etc. 79 6.2 1.2 4.5 0.0
28 Inorganic chemicals; organic or inorganic compounds of precious metals,
etc.203 1.2 0.0 0.2 0.0
29 Organic chemicals 642 1.1 0.0 0.1 0.0
30 Pharmaceutical products 86 2.3 0.0 0.4 0.2
31 Fertilizers 31 1.0 0.0 0.0 0.0
32 Tanning or dyeing extracts, etc. 75 3.9 0.0 0.5 0.9
33 Essential oils and resinoids; perfumery, cosmetic or toilet preparations 40 8.3 0.0 0.4 3.9
34 Soap, organic surface-active agents, washing preparations, etc. 45 8.2 0.0 4.3 3.1
35 Albuminoidal substances; modified starches; glues, etc. 21 5.1 0.0 1.0 0.0
36 Explosives; pyrotechnic products; matches, etc. 10 10.8 0.0 9.8 0.8
37 Photographic or cinematographic goods 38 8.4 0.0 7.1 0.0
38 Miscellaneous chemical products 106 4.0 0.0 1.7 0.0
39 Plastics and articles thereof 288 6.3 0.0 3.4 2.1
40 Rubber and articles thereof 118 5.4 0.0 3.3 0.3
41 Raw hides and skins (other than furskins) and leather 43 4.8 0.0 3.6 1.5
42 Articles of leather, etc. 34 13.2 0.0 8.9 7.0
43 Furskins and artificial fur; manufactures thereof 21 15.0 0.0 12.7 0.0
44 Wood and articles of wood; wood charcoal 95 9.4 0.0 6.1 2.0
45 Cork and articles of cork 8 1.0 0.0 0.0 0.0
46 Manufactures of straw, of esparto or of other plaiting materials; basketware
and wickerwork10 15.0 0.0 11.2 0.0
47 Pulp of wood or of other fibrous cellulosic material, etc. 20 1.7 0.0 0.0 0.0
48 Paper and paperboard, etc. 184 5.8 0.0 3.1 0.9
49 Printed books, newspapers, pictures and other products of the printing
industry; etc. 26 7.0 0.0 6.0 0.0
50 Silk 10 5.2 0.0 4.2 0.0
51 Wool, fine or coarse animal hair, etc. 36 5.0 0.0 4.0 0.3
Table III.3 (cont'd)WT/TPR/S/83 Trade Policy Review
Page 36
Preferential rates
HS code Description of goodsNumber
of lines MFNaCACMbPanamac dMexicoe
52 Cotton 134 8.1 0.0 6.8 0.0
53 Other vegetable textile fibres, etc. 38 6.4 0.0 5.4 0.2
54 Man-made filaments 106 7.8 0.0 4.6 0.0
55 Man-made staple fibres 151 7.9 0.0 5.1 0.0
56 Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and
cables and articles thereof63 7.1 0.0 4.4 0.0
57 Carpets and other textile floor coverings 28 15.0 0.0 9.5 0.0
58 Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings;
embroidery58 9.3 0.0 6.9 0.0
59 Impregnated, coated, covered or laminated textile fabrics, etc. 35 5.6 0.0 2.2 0.0
60 Knitted or crocheted fabrics 25 9.5 0.0 7.0 0.0
61 Articles of apparel and clothing accessories, knitted or crocheted 123 14.8 0.0 12.6 0.0
62 Articles of apparel and clothing accessories, not knitted or crocheted 133 14.9 0.0 12.5 0.0
63 Other made up textile articles; sets; worn clothing and worn textile articles;
rags 76 14.5 0.0 10.6 1.5
64 Footwear, gaiters and the like; parts of such articles 54 11.5 0.0 7.8 9.4
65 Headgear and parts thereof 17 13.4 0.0 10.8 0.0
66 Umbrellas, sun umbrellas, walking sticks, etc. 10 11.4 0.0 7.1 4.0
67 Prepared feathers and down and articles made of feathers or of down, etc. 11 14.2 0.0 10.6 0.0
68 Articles of stone, plaster, etc. 70 9.0 0.0 5.3 1.3
69 Ceramic products 40 11.1 0.0 5.2 2.4
70 Glass and glassware 100 5.4 0.0 4.2 0.9
71 Natural or cultured pearls, precious or semi-precious stones, etc. 57 8.4 0.0 6.2 0.0
72 Iron and steel 211 3.5 0.0 0.8 1.0
73 Articles of iron or steel 208 5.7 0.0 2.7 1.5
74 Copper and articles thereof 67 2.7 0.0 1.3 0.3
75 Nickel and articles thereof 19 1.0 0.0 0.0 0.0
76 Aluminium and articles thereof 101 6.8 0.0 3.1 1.3
78 Lead and articles thereof 11 2.8 0.0 1.8 0.0
79 Zinc and articles thereof 14 1.0 0.0 0.0 0.0
80 Tin and articles thereof 8 1.0 0.0 0.0 0.0
81 Other base metals; "cermets"; articles thereof 50 1.2 0.0 0.1 0.0
82 Tools, implements, cutlery, etc. 95 4.3 0.0 3.0 0.0
83 Miscellaneous articles of base metal 63 6.3 0.0 3.3 0.6
84 Nuclear reactors, boilers, machinery, etc. 735 2.5 0.0 0.9 0.3
85 Electrical machinery and equipment and parts thereof, etc. 532 3.8 0.0 1.9 0.2
86 Railway or tramway locomotives, rolling-stock and parts thereof, etc. 26 1.0 0.0 0.0 0.0
87 Vehicles other than railway or tramway rolling-stock. 315 5.7 0.0 4.5 0.0
88 Aircraft, spacecraft 20 3.8 0.0 2.8 0.0
89 Ships, boats and floating structures 23 6.7 0.0 4.4 1.6
90 Optical, photographic, cinematographic, etc. instruments and apparatus. 216 1.9 0.0 1.1 0.0
91 Clocks and watches 55 9.4 0.0 8.4 0.0
92 Musical instruments; parts and accessories of such articles 25 8.9 0.0 7.9 0.3
93 Arms and ammunition; parts and accessories thereof 18 10.6 0.0 9.6 0.0
94 Furniture; bedding, mattresses, etc. 64 12.7 0.0 6.4 4.2
95 Toys, games and sports requisites; parts and accessories thereof 52 11.7 0.0 9.0 1.6
96 Miscellaneous manufactured articles 88 10.3 0.0 6.3 1.9
97 Works of art, collectors’ pieces and antiques 8 5.0 0.0 4.0 0.0
a Includes the 1 per cent tax applied under Law No. 6946.
b Import controls are applied to 8 tariff lines.
c Quotas are applied to Panama in respect of 65 tariff lines.d Import controls are applied to 164 tariff lines.
e Quotas are applied to Mexico in respect of 3 tariff lines.
Source: COMEX, according to the August 2000 Tariff of the General Directorate of Customs.Costa Rica WT/TPR/S/83
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(d) Tariff concessions
32. Goods imported under special procedures such as traveller’s luggage, relief consignments and
samples of no commercial value are exempt from the payment of import duty.  Imports entered under
procedures that grant relief from the payment of customs duties and under processing and drawback
procedures also benefit from tariff concessions (Section 3 (vi)).
33. The tax incentives granted to various sectors, regions and activities generally include
concessions relating to the payment of import duties  (Section 4 (iv)).  In addition, with a view to
encouraging the socio-economic development of Golfito, a Costa Rican region with high levels of
unemployment, a preferential tariff of 18 per cent of the MFN tariff has been set for products
authorized for marketing in the Golfito Free Trade Warehouse..13
(iv) Tariff quotas
34. Costa Rica maintains import tariff quotas for agricultural products under its Uruguay Round
minimum access commitments.  Since 1995, tariff quotas have been opened for the following
products:   poultry and poultry parts; fluid milk; powdered milk; yoghurt; butter; fresh and processed
cheese; ice cream; and poultry sausages.14  It has not been necessary to open tariff quotas for products
whose MFN import tariff has been maintained at a level equal to or less than the tariff established inCosta Rica’s Schedule for in-quota imports.
15
35. Since 1995, the use made of tariff quotas has varied, but in general has been fairly limited.
Quotas have been used up completely in only one case,  that of imports of butterfat in 1995.  As far as
the quotas for other products are concerned, they have been little used.  This was the case with five of
the eight quotas opened in 2000; for the other three products, the maximum fill rate slightly exceeded
50 per cent (Chart III.3).
36. It follows that the import tariff quotas are only partially fulfilling the expectations of the
Uruguay Round with respect to market access opportunities.  The modest quota fill rates are probably
the result of factors such as the high level of in-quota tariffs, which makes imports, including in-quota
imports, unprofitable, and the functioning of the tariff quota administration mechanism.
37. With regard to this last point, the Government has indicated that despite their efforts to raise
awareness, both through the national press and the official journal La Gaceta and through conferenceson the subject, it is possible that economic operators are still unfamiliar with the tariff quota
administration mechanism.  This is suggested by the fact that, in practice, there have been out-of-
quota imports of all the products subject to tariff quotas.  For example, despite the fact that only half
the quota for cheese was used up in 1999, there were imports, especially from the Netherlands, which
paid import duties of between 122 and 130 per cent, whereas the tariff applied to in-quota imports was40 per cent.  Likewise, although no use had been made of the quotas for poultry products, some
imports, for example, cooked turkey ham from Spain and the United States, paid duty equivalent to
167 per cent of its value.
                                                     
13 Amendment of the Golfito Free Trade Warehouse Establishment Act, Law No. 7730 of
20 December 1997.
14 In the case of butterfat, the quota was initially for butterfat and butter; however, since 1998 it has
applied only to butter, since butterfat is subject to an MFN tariff of 5 per cent.
15 Costa Rica has notified the Committee on Agriculture of the tariff quotas applied in 1995, 1996 and
1997 (WTO Documents. G/AG/N/CRI/1 of 29 August 1995 and G/AG/N/CRI/3 of 10 March 1998).WT/TPR/S/83 Trade Policy Review
Page 38
38. The tariff quota application system is administered through an allocation mechanism based on
stock exchange transactions.16  The mechanism is designed to avoid direct State intervention in the
allocation of quotas and to ensure that no participant is discriminated against or favoured.  The
Agricultural Commodities Exchange (Bolsa de Productos Agropecuarios, BOLPRO) is responsible
for administering the quotas under the supervision of the Ministries of Agriculture and Livestock and
Foreign Trade.  With the declared aim of preventing internal distortions, the Ministries of Agricultureand Livestock and Foreign Trade are authorized to divide up the quantity to be imported, at their
discretion, into tranches, which may be monthly, bimonthly, quarterly, four -monthly, six-monthly or
annual, and to allocate a quantity for each of these periods.  Although this practice might restrict the
use of tariff quotas by making the importation of small amounts, during specified periods only,
potentially expensive, the Government has pointed out that in determining the tranches a minimumvalue or quantity that it would be profitable to import is taken into account.
39. The allocation process begins with the announcement of the opening of a quota in the official
journal 10 working days in advance.  The variou s agricultural commodity exchanges authorized in
                                                     
16 This system is governed by the Regulation on the Allocation of Tariff Quotas, Executive Decree
No. 23914-COMEX-MAG of 27 December 1994.Poultry and parts thereof
Fluid milk
Powdered milk
Yoghurt
Butter
Cheese, processed and fresh
Ice cream
Poultry sausages and the like,
and poultry preparations and
preservesChart III.3
In-quota and out-of-quota tariffs and fill rates, 2000
a     The in-quota tariff applied is 30 per cent for poultry sausages and the like, and 20 per cent for other preparations.
Source :  WTO estimates based on information su pplied b y the Costa Rican authorities. (%)
(1056)
(333)
(299)
(41)
(37)
(309)
(596)
(124)
Fill rate (size of quota in tonnes) Out-of-quota tariff In-quota tariff180 135 45 0 25 50 75 100 90
aCosta Rica WT/TPR/S/83
Page 39
Costa Rica seek buyers (domestic importers) and sellers (foreign exporters) and try to arrange a deal
with a view to the preparation of a preliminary cont ract of sale, which includes the price, the quantity
and the specifications of the goods.  This aspect of the procedure could give foreign exporters with a
distribution network in Costa Rica (for example, chains of fast food restaurants) an advantage over
exporters with no trade links of this kind.
40. On the day of the auction, the exchanges produce the preliminary contracts so that they can be
taken into account.  Once the offers have been sorted, starting with the lowest price, bids are invited to
improve the offers.  BOLPRO awards the certificate to whichever party reduces the preliminary
contract  price.  If during the session there is no reduction in the price, the preliminary contract offer is
eventually accepted.  The recipient of the certificate must actually import the goods within the time-
limit set by the Ministry of Agriculture and Livestock; the licence granted is not transferable.
41. For import purposes, customs require the production of the usual international trade
documents and the certificate issued by BOLPRO.  This certificate gives the successful bidder the
right to import a given quantity of goods, at a lower tariff, within a duly specified period.17
42. At the same time, BOLPRO is also responsible for administering the exceptional import
quotas opened with a reduction in MFN tariff rates when the Government determines that a particularagricultural product is in short supply.  In July 2000, the Regulation on the Allocation of Import
Quotas in Cases of Shortages of Agricultural Go ods was issued with a view to making orderly
arrangements for the importation of staples in such circumstances.
18  Since 1999, under this facility
Costa Rica has opened temporary quotas for the importation of rice and beans.  In previous years, the
mechanism used to ensure domestic supplies was a temporary reduction in customs duties.  With
respect to bean imports, in August 2000 Costa Rica authorized the importation of a quota of
10,965 tonnes of black beans at a duty rate of 5 per cent (lower than the 50 per cent MFN rate inforce), while exempting the quota from special safeguard measures (see Section (ix) below).
19
(v) Other charges affecting imports
43. In addition to import duties and the 1 per ce nt tax on customs value (Law No. 6946), imports
are subject to a series of charges connected with customs formalities (for example, storage and
handling charges and port fees) and internal taxes.  The latter vary with the product and include thegeneral sales tax (impuesto general sobre las ventas, IGV), the selective consumption tax (impuesto
selectivo de consumo, ISC), the specific consumption tax (impuesto especifico al consumo), the tax
for the Institute of Municipal Development and Counselling (Instituto de Fomento y Asesoría
Municipal, IFAM), and the tax for the Agrarian Development Institute (Instituto de Desarrollo
Agrario, IDA).
44. For 1999, the contribution to total tax revenue made by the main taxes applicable to foreign
trade and the sale of goods and services can be broken down as follows:  IGV - 36 per cent; ISC –
20 per cent; import duties - 5.6 per cent; specific consumption taxes -3.8 per cent; and export duties –
1 per cent.
45. Where internal taxes are levied, they are applied to all imports, whatever their source.  The
taxes are applied at the same rate to domestic and foreign products, although the IFAM and IDA taxes
are applied differentially in some cases.
                                                     
17 The Costa Rican tariff quota allocation regime  was notified in WTO Document G/AG/N/CRI/1 of
29 August 1995.
18 Executive Decree No. 28727-COMEX-MEIC-MAG of 7 July 2000.
19 Executive Decree No. 28824-COMEX-MEIC-MAG of 4 August 2000.WT/TPR/S/83 Trade Policy Review
Page 40
46. The IFAM and IDA taxes, introduced in 1962 and 1982, respectively, are collected mainly on
alcoholic beverages, some non-alcoholic beverages and cigarettes.  The income goes towards
financing the activities of the two institutes.  These two taxes are applied successively.  The IDA tax
is applied to the c.i.f. value plus import duties, ISC tax and the 1 per cent tax under Law No. 6946.
The IFAM tax is applied to the c.i.f. value plus import duties, ISC tax, the 1 per cent tax under Law
No. 6946 and IDA tax.
47. The IDA rates are:  2.5 per cent for cigarettes; 8 per cent for liqueurs, distilled beverages and
other spirituous beverages; 5 per cent for beers; and 5, 10 or 14 per cent for non-alcoholic beverages.
A rate of 5 per cent is applied to domestic brands of aerated soft drinks, a rate of 10 per cent to soft
drinks produced in Costa Rica by franchisees of international brands and imported soft drinks, and a
rate of 14 per cent to carbonated beverages, domestic or foreign, used mainly for mixing drinks.20
48. The IFAM tax rates are 10 per cent for liqueurs, distilled beverages and other spirituous
beverages, 10 per cent for imported beer and 3 per cent for domestic beer.21  The Government has
stated that the consistency of these taxes with Costa Rica’s international commitments is being
examined and that it is considering the possibility of seeking the opinion of the Office of the
Procurator-General of the Republic.
49. The selective consumption tax (ISC) is applied to a wide variety of products.  In March 2000,
approximately 11.5 per cent of 10-digit tariff lines (919 lines), distributed over 55 Chapters of the HS,
were subject to ISC.  The rates applied ranged from 5 to 95 per cent in 20 steps (Table III.4).  In
February 2001, the Legislative Assembly approved, in a first reading, the Tax Simplification Act,
which is intended to improve the tax legislation and to reduce substantially the number of goods
subject to selective consumption tax.  If this bill were to be enacted, approximately 10.4 per cent of
10-digit tariff lines (819 lines) in the Costa Rican tariff would be subject to ISC.
50. Where imports are concerned, the basis of assessment of the ISC is the c.i.f. value plus import
duties and charges.  In the case of domestic production, the tax is assessed on the manufacturer’s cash
selling price, from which only the usual general discounts allowed to buyers under such conditions
may be deducted.  The tax on cigarettes and cigars is assessed on the suggested retail selling price
adjusted for various factors such as the presumed profits of the retailer and distributor and volumediscounts.
51. ISC tax is applied to both imports and Costa Ri can products.  In practice, however, with some
products the tax falls only on imports because there is no domestic industry and in some cases may
represent a significant proportion of the import costs.  For example, the rates applied to passenger
cars, which are all imported, ranges from 0 to 93 per cent of the c.i.f. value of the vehicle dependingon its use (for example, ambulances are exempt), its engine capacity, its age and its energy efficiency.
With respect to the last of these criteria, the Regulations pertaining to the Rational Use of Energy Act
introduced a 30 per cent additional increase in ISC above the established rate for non-energy-efficient
machinery, equipment and vehicles.
22  In accordance with Circular DNP-020-97 of 19 March 1997,
this surcharge is being applied only to vehicles.
                                                     
20 Law No. 6735 of 29 March 1982.
21 Law No. 10 of 7 October 1936, Law No. 6282 of 14 August 1979, and Law No. 6735 of
29 March 1982.
22 Law No. 7447 of 13 December 1994.Costa Rica WT/TPR/S/83
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Table III.4
Imports subject to selective consumption tax (ISC), August 2000
Ad valorem  tariff (%)Number of tariff
lines 2-digit HS classification
5 6 20;  40;  85;  88;  94
10 35 17-20;  22;  37;  38;  40;  70;  84;  85;  94-96
15 50 18;  19;  21;  27;  34;  48;  49;  54;  70;  71;  73;  75;  76;  79;  82;  83;  85;  87;
90;  91;  94
20 31 22;  32;  34;  42;  46;  49;  66;  67;  70;  71;  73;  83;  84;  87;  89;  95;  96
23 3 33;  87
25 12 20;  22;  37;  40;  49;  83;  84;  85;  87
30 10 22;  27;  33;  84;  85
31 1 87
35 4 27;  37;  84;  87
40 7 22;  84;  85;  87
43 1 87
45 3 22;  85;  87
50 10 27;  36;  37;  71;  87
53 1 87
55 2 22
60 2 22;  87
61 1 87
63 3 87
65 4 24;  84;  93
70 2 87
75 6 93
80 2 87
93 2 87
95 1 24
Source: COMEX, based on the tariff of the General Directorate of Customs.
52. For the purpose of supporting specified activities, the rate of ISC on products used for these
activities may be reduced.  For example, the ISC on aviation spirit is 15 per cent for airlines with a
tourism contract as compared with 35 per cent for other uses.23  Likewise, there is 50 per cent relief on
the taxes on used vehicles imported for renting out to tourists and 60 per cent relief on the ISC
payable on public transport vehicles of the taxi type.24
53. The general sales tax (IGV) is applied to goods and services irrespective of their origin.  Since
March 1997, the rate applied has been 13 per cent.25  For imports, IGV is levied on the value of the
imports plus all import duties (including the 1 per cent tax under Law 6946) and all internal taxes
(including ISC and the IDA and IFAM levies).  For domestic goods and services, IGV is assessed on
the net selling price, which also includes various internal taxes.
54. In March 2000, approximately 11 per cent of tariff lines were exempt from IGV and of these
two thirds corresponded to agricultural products (HS 1 to 24).  The list of exempt products is divided
into six categories: the basic basket of food and of goods essential for education; medicaments;veterinary products; agricultural inputs; fishery inputs; and miscellaneous goods.
26  With respect to
the basic food basket it should be pointed out that exemption depends on the degree of processing of
the product; thus, in general, exemption is not granted to packaged or canned products.  Since 1995,
the list of exceptions has been amended on several occasions; in particular, in May 2000 the list of
inputs and equipment for use in agriculture, aquaculture and fishing was significantly extended
                                                     
23 Executive Decree No. 25096-H-TUR of 19 April 1996.
24 Act Regulating the Exemptions in Force, their Abolition and Exceptions, Law No. 7293 of
31 March 1992.
25 Law No. 7543 of 19 September 1995 specified that in March 1997 the tax rate would go up from
10 to 13 per cent.
26 Executive Decree No. 23263-H of 28 August 1997.WT/TPR/S/83 Trade Policy Review
Page 42
(Executive Decree No. 28648-MAG-MEIC-H of 25 May 2000).  At the same time, the procedures for
obtaining exemptions were made more flexible.
55. In addition to the above-mentioned taxes, new internal taxes affecting imports have been
introduced during the last six years.  There is now a so-called “forest tax” levied at the rate of 3 per
cent on the market transfer value of logs with a diameter of at least 29 cm at the thinner end.  At the
same time, IGV was reduced by 3 percentage points for these products, so that the new tax isequivalent to a transfer of tax revenue from the general budget to a special fund for promoting the
forest sector.  This  tax is generated by the primary processing of the timber.  In the case of imports,
the tax is applied to the c.i.f. value of the logs imported.
27  Similarly, a new specific tax of 16 colones
per “unit of consumption” has been placed on alcoholic beverages to finance social measures; this tax
is adjusted every three months.28  In February 2000, in accordance with Resolution of the General
Directorate of Direct Taxation No. 1-2001 of 12 February 2001, this tax was 17.65 colones per unit of
consumption.
56. Import charges (for example, consular fees, cost of forms, cost of a letter of credit, port fees,
customs warehouse and handling charges) have undergone no significant changes since 1995.  The
Government has indicated that the used vehicle transfer tax has been reduced from 5 to 2.5 per cent ofthe import value.
57. The structure of the charges affecting imports is illustrated in Table III.5 for three different
products.  The ad valorem equivalent of all the charges and taxes affecting imports can be relatively
high; in the examples given it varies from 38 per cent for steel products to 71 per cent for new
passenger cars.
(vi) Import licensing
58. The Government has pointed out that the only import licensing system in force is that relating
to the administration of tariff quotas (see Section (iv) above).
29
(vii) Prohibitions and other restrictions
59. Costa Rica operates import prohibitions on a limited number of products (37 tariff lines),
generally on health, security and environmental grounds.  The products which may not be imported
include coffee husks and skins and used cardboard egg separators.  According to the Costa Ricanauthorities, coffee husk and skin imports have been  prohibited by the Plant Health Service of the
Ministry of Agriculture and Livestock as a measure of protection against broca (coffee seed borer); as
far as used cardboard egg separators are concerned, the prohibition is based on health protection,
optimum sanitary conditions, hygiene in the production, processing, storage and distribution of food,
and the prevention of diseases and contamination transmitted by eggs.
60. For the same reasons, various products are subject to import restrictions, in particular:  ozone
depleters (Law No. 7223 of 2 April 1991); asbe stos (Executive Decree No. 25056-S-MEIC-MINAE
of 16 April 1996); arms and explosives (Executi ve Decree No. 25120-SP of 17 April 1996); natural
products in pharmaceutical form and tisanes (Executive Decree No. 26872-S of 15 April 1998);
narcotics, psychotropic substances and unauthorized drugs (Law No. 7786 of 30 April 1998);cosmetics (Executive Decree No. 27020-S of 5 June 1998 and its amendments, Executive Decree
                                                     
27 Forest Act, Law No. 7575 of 13 February 1996.
28 Taxation of Spirits, Beers and Cigarettes Act, Law No. 7972 of 22 December 1999.
29 WTO Document G/LIC/N/3/CRI/2/Rev.1 of 7 July 1998.Costa Rica WT/TPR/S/83
Page 43
No. 27256-S of 11 September 1998); hazardous products (Executive Decree No. 28113-S of
6 October 1999); and medicaments (Executive Decree No. 28466-S of 29 February 2000).
Table III.5
Structure of the charges affecting imports of various products, 2000
Milled rice Laminated steelaPassenger carsa
Description Rate
per centValue Rate
per centValue Rate
per centValue
1. Value f.o.b. 87.03 89.69 86.96
   Freight 13.80 12.01 10.00 8.97 10.00b8.69
   Insurance 1.10 0.96 1.50 1.34 5.00b4.35
2. Value c.i.f. 100.00 100.00 100.00
   Import duty (on 2) 36.00 36.00 1.00 1.00 1.00 1.00
   Import licence fee … … … … … …
   Letter of credit fee (on 2) 0.50 0.50 0.50 0.50 0.50 0.50
   Customs broker’s fee (on 2) 2.00 2.00 3.00 3.00 1.00 1.00
   Consular fees n.a. n.a. n.a. n.a. n.a. n.a.
   Port fees (specific rate) … 3.00 … 18.15 … 5.83
3. Subtotal 141.50 122.65 108.33
4. Selective consumption tax (on 3) n.a. n.a. n.a. n.a. 40.00 43.32
5. IDA tax (on 3 + 4) n.a. n.a. n.a. n.a. n.a. n.a.
6. IFAM tax (on 3 + 4 + 5) n.a. n.a. n.a. n.a. n.a. n.a.
7. Sales tax (3 + 4 + 5 + 6) n.a. n.a. 13.00 15.94 13.00 19.71
8. Wholesale cost in Costa Rica 141.50 138.59 171.37
... Not available.
n.a. Not applicable.a Calculations made for a shipment of laminated steel sheets weighing approximately 5.5 tonnes and a 1300 cc passenger car of
approximately 1.09 tonnes.
b Estimated values.
Source: Government of Costa Rica.
61. Before restricted products can be imported, an authorization or permit must be obtained from
the competent ministry (Table III.6).  The technical, sanitary and phytosanitary requirements are
described in Section (x) below.
(viii) Anti-dumping, countervailing and safeguard measures
62. The Costa Rican legislation on unfair trade practices has been reviewed and adapted to the
agreements signed within the framework of the Uruguay Round, in particular the Agreement on
Implementation of Article VI of the GATT 1994 and the Agreement on Subsidies and Countervailing
Measures.  In December 1995, Costa Rica adopted the Central American Regulations on Unfair
Business Practices (Executive Decree No. 24868-MEIC of 19 December 1995), which entered into
force in Costa Rica on 12 January 1996.  This regional regulation, notified to the WTO by Guatemala,
has been examined by Members in the Anti-Dumping Practices and Subsidies and CountervailingMeasures Committees.
30
63. Also in 1996, Costa Rica adopted the Central American Regulation on Safeguard Measures,
which has been notified to the WTO and examined by the Committee on Safeguards.31  Costa Rica
                                                     
30 Guatemala’s notification is reproduced in WTO Document G/ADP/N/1/GTM/2 of 2 October 1996.
The questions put by several Members and Guatemala’s replies can be found in WTO Document
G/ADP/Q1/GTM/7 of 27 August 1998.
31 The Regulation was adopted by Executive Decree No. 25242-MEIC of 31 May 1996.  The
notification can be found in WTO Document G/SG/N/1/CRI/2 of 31 March 1998, and the replies to thequestions raised in the Committee on Safeguards figure in Doc. G/SG/Q1/CRI/1 of 18 November 1998.WT/TPR/S/83 Trade Policy Review
Page 44
reserved the right to avail itself of the provisions of the transitional safeguard mechanism in
article 6 of the Agreement on Textiles and Clothing.
Table III.6
Documents necessary for completing import formalities
Document
code Description of document Entity responsibleNo. of
lines HS classification
34 Authorization to remove dogs and cats
from holding kennelsMinistry of Health, Zoonosis
Dept.10 1
35 Compliance with prior plant health
requirements, physical inspection andphytosanitary approval for entry,change of procedure, internationaltransit and dewarehousing.Ministry of Agriculture and
Livestock, Quarantine and PlantRegistration704 06-15, 17-19, 23, 24, 29, 30, 32, 37, 38,
40, 44, 46, 47, 52, 53, 63, 64, 70, 85,90, 96
36 Export and import permits for wild
species of flora and faunaMinistry of the Environment and
Energy, National System of
Conservation Areas14 01, 03-06
38 Import, export or re-export
authorization from the GovernmentOzone CommissionMinistry of the Environment and
Energy, Government OzoneCommission42 29, 30, 38, 39, 84
44 Compliance with prior animal health
requirements, physical inspection andzoosanitary approval for entry, change
of procedure, international transit and
dewarehousingMinistry of Agriculture and
Livestock, Animal Quarantine528 01-05, 10, 15-17, 19, 21, 23, 28, 29, 31,
32, 35, 38, 41, 43, 50, 51, 56, 57, 67,96
45 Authorization for dewarehousing National Seeds Office 59 06, 10, 12
46 Attestation of energy efficiency Ministry of the Environment and
Energy, Sectoral EnergyDirectorate.65 84, 85, 87
49 Gas emission compliance certificate
issued in the country of exportation.Ministry of Public Works and
Transport176 87
50 Authorization to dewarehouse food Ministry of Health, Registration
and Controls Directorate.487 04, 09, 11-13, 15-23, 25, 29, 33, 35
51 Drugs and narcotics import permit and
stampMinistry of Health, Narcotics
Dept.39 13, 14, 29
54 Authorization to dewarehouse toxic or
hazardous substancesMinistry of Health, Toxic
Substances Dept.818 25-29, 32-34, 36, 38, 68, 78, 81, 84, 85,
90
57 Authorization to dewarehouse raw
materials and primary forms for
medicaments and cosmetics,medicaments, cosmetics and medicalequipmentMinistry of Health, Narcotics
Dept.262 12, 13, 19, 29, 30, 33, 34, 38, 40, 48,
56, 90, 96
58 Authorization to import precursors and
chemicals, incl. stampMinistry of Health, Narcotics
Dept.76 12, 22, 27-29, 38
59 Authorization to dewarehouse
chemical and biological products and
equipmentMinistry of Agriculture and
Livestock, Fertilizer and
Pesticide Dept.61 13, 25, 31, 34, 38, 84
60 Permit to import explosives Ministry of Public Security,
Arms and Explosives Dept.25 25, 28, 31, 32, 36, 76
62 Authorization to dewarehouse used
clothing and footwearMinistry of Health, Arthropod
and Rodent Control Dept.56 3
66 Authorization to dewarehouse radio
equipmentMinistry of the Interior and
Police, Radio Dept.58 5
70 Permit to import arms Ministry of Public Security,
Arms and Explosives Dept.13 87, 93
71 Permit to import ammunition Ministry of Public Security,
Arms and Explosives Dept.39 3
72 Permit for the temporary exportation of
armsMinistry of Public Security,
Arms and Explosives Dept.12 93
73 Import prohibitions 37 05, 09, 13, 14, 25, 28-30, 36, 38, 40,
59, 63, 87, 89, 93
Source: WTO Secretariat, based on information supplied by the Costa Rican authorities.
64. In November 1995, the Office of Unfair Business Practices and Safeguard Measures (Oficina
de Prácticas de Comercio Desleal y Medidas de Salvaguardia) was set up to conduct all administrative
investigations (including the determination of dum ping and injury) involving the possible impositionCosta Rica WT/TPR/S/83
Page 45
of anti-dumping duties, countervailing duties or safeguard measures.32  However, as a result of the
restructuring of the Ministry of the Economy, Industry and Trade, this office was abolished by
Executive Decree No. 29117-MEIC of 6 December 2000 and its functions and powers were
transferred to the Legal Affairs Unit of the MEIC, which is now responsible for conducting all
administrative investigations involving the possible  imposition of anti-dumping duties, countervailing
duties or safeguard measures.
65. Between 1 January 1995 and the end of 2000, Costa Rica did not apply any anti-dumping or
countervailing duties.  However, four investigations were initiated against imports of the following
products (date of initiation in parentheses):  polymethyl methacrylate sheet from Mexico
(March 1996); dried onion from the United States, Guatemala and Nicaragua (October 1996);
domestic refrigerators from Mexico (March 1997); and glazed ceramic water closets and wash basinsfrom Venezuela (August 1998).  At the end of 2000, only the last investigation was still pending, all
the other investigations having been concluded without the imposition of provisional or definitive
duties.  The Government has pointed out that the delay in concluding the investigation still pending is
due to the numerous appeals lodged by the interested parties against decisions and resolutions of the
investigating authority.
66. Between 1995 and the end of 2000, Costa Rica did not apply any safeguard measure, either in
the context of the WTO or under regional arrangements, with the exception of the special safeguard
measures for which the WTO Agreement on Agriculture provides (Section (ix)).
33
67. In the case of the Central American Common Market (CACM), it is impossible to apply
safeguard measures (bilateral or global) between member countries.  In addition to this rule and that
applicable to MFN trade, Costa Rica has adopted the provisions on unfair trade practices incorporated
in the Free Trade Agreement signed with Mexico, as well as in the agreements signed by the CACMwith the Dominican Republic and Chile.
34  The provisions in question are based on the principles of
the Agreement on Implementation of Article VI of the GATT 1994 and the Agreement on Subsidies
and Countervailing Measures.  These regional agreements do not prevent their signatories from
applying safeguard measures in accordance with multilateral rules.  However, in the case of the
agreements with Chile and Mexico, the application of such “global safeguards” must exclude thepreferential partner unless its exports are substantial or are contributing significantly to the injury.
68. The regional agreements negotiated by Costa Rica establish the possibility of applying
bilateral safeguard measures, thus enabling the importing country to negotiate compensation with a
limited number of countries.  On the other hand, the application of these bilateral measures involves
certain limitations.  Thus, for example, they can be applied only during a “transition period” or onlyonce and must consist solely of tariff measures designed to eliminate the preferential treatment.
(ix) Special safeguard measures
69. Since the last trade policy review, Costa Rica has introduced several special safeguard
measures based on article 5.1(b) of the Agreement on Agriculture (invoked by a reference price).  The
products affected were:  common black bean (measure applied from 7 May 1999); and rice in the
                                                     
32 Executive Decree No. 24772-MEIC-MAG of 14 November 1995, notified in WTO Document
G/ADP/N/1/CRI/1/Suppl.1 of 2 April 1998.
33 WTO Document G/TMB/N27 of 6 March 1995.
34 Chapter VIII of the Costa Rica-Mexico Free Trade Agreement; Chapter 7 of the
Central America-Chile Free Trade Agreement; and Chapter VII of the Central America-Dominican RepublicFree Trade Agreement.WT/TPR/S/83 Trade Policy Review
Page 46
husk, skinned and semi-milled or polished (applied since 15 November 1999).  These measures were
still in force at the end of 2000.35
70. It should be noted that in August 2000 Costa Rica authorized the importation of a black bean
quota at a duty lower than the existing MFN duty, exempting that quota from the special safeguard
measure (see Section (iv) above).
(x) Regulations, standards and other requirements
(a) Standards, technical regulations, testing and certification
71. It is the responsibility of the Ministry of the Economy, Industry and Trade and the Ministry of
Health, within their respective spheres of competence,  to fulfil obligations and exercise rights in the
field of technical standardization and metrology laid down in the WTO Agreement on Technical
Barriers to Trade.36  As a consequence of its obligations under the Agreement, Costa Rica reorganized
the responsibilities relating to technical regulations, standards, conformity assessment procedures and
metrology, creating the National Quality System.37  This system consists of a series of interrelated
activities developed on a national scale and comprising:  voluntary technical standardization, technical
regulations, accreditation, testing and calibration, metrology, certification, inspection and monitoring,
as well as other support and coordination activities.  The National Quality System is divided into four
subsystems:  standardization, technical regulations, accreditation, and metrology.  The system is
supervised and coordinated by the Ministry of the Economy, Industry and Trade, which chairs the
National Quality Commission (Comisión Nacional de la Calidad).  The National Quality Commission
is responsible for formulating the policies, directives and recommendations of the National Quality
System.  The Commission is composed of representatives of the public and private sectors.
72. Non-statutory standardization is the responsibility of the Costa Rican Technical Standards
Institute (Instituto de Normas Técnicas de Costa Rica, INTECO), through which all organizations,public or private, with responsibilities in areas subjec t to standardization channel their activities.  It is
INTECO’s task to ensure the effective participation and agreement of all the relevant national
operators by ensuring that the interests of manufacturers, distributors, consumers and government are
represented at all decision-making levels.  In December 1997, the Institute accepted the Code of Good
Practice for the Preparation, Adoption and Application of Standards which forms part of the WTO’sAgreement on Technical Barriers to Trade.
38
73. The national body for technical regulations is the Inter-Ministerial Technical Regulations
Commission (Comisión Interministerial de Reglam entación Técnica), for which secretariat services
are provided by the National Bureau of Standards and Units of Measure (Oficina Nacional de Normas
y Unidades de Medida, ONNUM).  The Commission is composed of representatives of the ministrieswith technical regulation responsibilities in the fields of health, security, the environment, and
consumer protection, namely, the Ministries of the Economy, Industry and Trade, Foreign Trade,
Agriculture and Livestock, Health, Natural Res ources, Energy and Mines, and Public Works and
Transport.
                                                     
35 The special safeguards introduced by Costa Rica in May and November 1999 were notified to the
WTO in June 2000 (WTO Document G/AG/N/CRI/11 of 11 October 2000).
36 Uruguay Round Agreements and Multilateral Trade Negotiations Implementation Act, Law No. 7473
of 27 December 1994.
37 Executive Decree No. 24662-MEIC-S-MAG-MIRENEM-MOPT-PLAN of 9 October 1995.
38 WTO Document G/TBT/CS/N/88 of 19 January 1998.Costa Rica WT/TPR/S/83
Page 47
74. The Inter-Ministerial Technical Regulations Commission is responsible for preparing
technical regulations, adopting regulatory practices that comply with international requirements, and
reviewing and updating existing technical regulations.  In addition to holding plenary sessions, the
Commission works through technical regulation committees, private participation in which is
encouraged.  Regulations which involve requirements and restrictions relating to health, security, the
environment and consumer protection are developed with the participation of representatives of thesector concerned (domestic or foreign), including consumers, an effort being made to establish a
consensus.  The various sectors are invited to participate by placing a public notice in La Gaceta.
75. Each technical regulation indicates the ministry  responsible for checking and inspecting the
products, processes, methods, installations, services and activities regulated.  A notice is published in
La Gaceta 60 days before a regulation is made official so that interested parties can submit commentsto the competent committees.
76. At the end of October 2000, Costa Rica had some 240 technical regulations in force.
According to ONNUM, about 40 per cent of the techni cal regulations and voluntary standards in force
in Costa Rica are identical with or based on international standards.  Most technical regulations apply
to consumer products, mainly food and alcoholic beverages.  White sugar (plantation) for directconsumption must be fortified with vitamin A; from February 2002, the sale of unfortified sugar will
be prohibited.  The Government points out that it has been examining the possibility of amending this
technical regulation so that the fortification of the sugar with vitamin A is no longer required as a
condition of marketing.  There appear to be no mandatory technical regulations for electronic and
telecommunications products.
77. The accreditation activities of certifying bodies, calibration and testing laboratories and
inspection and monitoring bodies are supervised by the National Accreditation Body (Ente Nacionalde Acreditación, ENA).  ENA is a commission co mposed of one member representing INTECO, one
member from the Inter-Ministerial Technical Regulations Commission, one from the National
Metrological Management Body (Ente Nacional de  Gestión Metrológica), a representative of each of
the various types of public entities with which ENA has cooperation agreements, and expressly
appointed individuals with a recognized scientific or technical track record in the quality field.
78. ENA’s activities are both statutory and non-statutory and have to be adapted to the guidelines
and criteria established internationally.  In particular, the accreditation of inspection and monitoring
bodies and testing and calibration laboratories is based on the European standard EN45000 and the
International Standardization Organization (ISO) Guid es.  Accredited entities of private and public
law are responsible for inspection and monitoring.
79. In addition to its technical regulation functions, the National Bureau of Standards and Units of
Measurement has national metrological responsibilities.  The use of the International System of Units
is mandatory in Costa Rica.
39
80. With respect to the notification procedures under the WTO’s Agreement on Technical
Barriers to Trade, the body responsible for the service or services provided for in articles 10.1 and10.3 of the Agreement is the National Bureau of Standards and Units of Measurement under the
Ministry of the Economy, Industry and Trade.   Likewise, the body responsible for the national
application of the provisions of article 10.10 of the Agreement is the International Trade Negotiations
                                                     
39 International System of Units Act, Law No. 5292 of 29 August 1973 and its Regulations, Executive
Decree No. 4124-MEIC of 25 September 1974.WT/TPR/S/83 Trade Policy Review
Page 48
Directorate of the Ministry of Foreign Trade.40  The various regional arrangements signed by
Costa Rica incorporate provisions relating to standards, technical regulations, testing and certification.
(b) Marking, labelling and packaging
81. The labelling requirements applicable to food in Costa Rica are based on national standards
and the standards of the Codex Alimentarius.41  All pre-packed food, whether imported or produced in
Costa Rica, must be labelled in Spanish.  Except where a national regulation or a standard of theCodex Alimentarius expressly indicates otherwise, the label must include the following information:
the name of the foodstuff; a list of ingredients in decreasing order by weight; the net content and, for
food packed in a liquid medium, the drained weight; the name and address of the manufacturer,
packer, distributor, exporter or seller of the food (for imports, the name of the importer or distributor
must be shown); the country of origin; the batch number; a date mark and instructions on how thefood should be kept; instructions for use.  Moreover, if the labelling indicates the presence of one or
more costly ingredients, the label should include the initial percentage of that ingredient at the time of
manufacture.
82. Likewise, in the case of food that has been irradiated, the label must indicate the fact or a
distinctive seal must be affixed close to the name of the food, in accordance with the correspondinglabel in the Codex.  Genetically modified food must be clearly identified, though special labelling is
not required.  Except in the case of spices and aromatic herbs, small items whose maximum area is
less than 10 cm2 may be exempted from the above requirements.
83. Currently, Costa Rica has specific labelling regulations for a number of non-food products
including stationery products and the like for school and office use and textile products.
42  Executive
Decree No. 26442-MEIC of 12 November 1997 was intended to regulate the labelling of all non-food
consumer products.  However, having been found to be too general and difficult to enforce, thisDecree was revoked.
43  The National Deregulation Commission (Section 4 (i)) was subsequently
instructed to draw up a list of non-food products that required a technical regulation on labelling.44
The Commission found that only food, chemical and toxic products and medicaments required special
labelling.
(c) Sanitary and phytosanitary measures84. The Ministries of Agriculture and Livestock and of Health are responsible, each within its
own sphere of competence, for fulfilling the obligations and exercising the rights laid down in the
WTO Agreement on the Application of Sanitary and Phytosanitary Measures.  The National Sanitary
and Phytosanitary Measures Committee (Comité Nacional de Medidas Sanitarias y Fitosanitarias),
made up of representatives of these two ministries, is responsible for giving technical advice andmaking the recommendations necessary to enable Costa Rica to fulfil its obligations under the
Agreement.
45
85. Apart from the WTO Agreement on the Application of Sanitary and Phytosanitary Measures,
the main provisions concerning sanitary and phytosanitary measures in Costa Rica are to be found in
                                                     
40 WTO Document G/TBT/2/Add.51 of 12 April 1999.
41 Executive Decree No. 26012-MEIC of 14 May 1997.
42 Executive Decrees No. 25983-MEIC and No. 25984-MEIC (stationery products) and No. 25989-
MEIC (textile products) of 11 March 1997.
43 Executive Decree No. 27751-MEIC of 8 April 1999.
44 Executive Decree No. 27751-MEIC of 8 April 1999.
45 The Committee was established by Executive Decree No. 26226-S-MAG of 23 June 1997.Costa Rica WT/TPR/S/83
Page 49
the Phytosanitary Protection Act and its Regulations, the Central American Regulation on Sanitary
and Phytosanitary Measures and Procedures, the Regulations of the Ministry of Agriculture and
Livestock Organization Act and the Animal Health Act, as well as in the regulations on organic
farming, the registration and marketing of foodstuffs and the registration of hazardous products.46
86. In Costa Rica, phytosanitary protection is the responsibility of the State Phytosanitary
Service, which reports to the Ministry of Agri culture and Livestock.  All imported chemical,
biological and related substances and application equipment for agricultural use must be registered
with the Service.  Substances imported for research  or to deal with specific phytosanitary problems
are exempt from this requirement.  The Ministry of Agriculture and Livestock is authorized to restrict
or prohibit the importation or transit of goods where such action is justified on technical grounds and
it is considered that using them would be prejud icial to agriculture, health or the environment.
87. Any natural or legal person who inspects, imports, exports, re-packs or re-packages chemical,
biological or similar substances or application equi pment for agricultural use must satisfy a series of
requirements, which include registration with the State Phytosanitary Service; enrolment in the
agricultural establishments register of the Association of Agricultural Engineers (Colegio de
Ingenieros Agrónomos) and the payment of an annual fee set by the government; and the hiring of theservices of a professional in agricultural sciences belonging to the Association of Agricultural
Engineers for all commercial activities.
88. The Government notes that where veterinary products are concerned Costa Rica applies the
rules laid down by the World Organization for Animal Health (IOE).
89. Costa Rica applies phytosanitary control measures to the importation and transit of plants,
biological control agents and other types of organisms for agricultural use, packing and packaging
materials, containers, means of transport, luggage and personal effects, and parcel post items.  Theimportation of plants, biological control agents and other types of organisms for agricultural use is
subject to prior authorization by the State Phytosanitary Service and compliance with specific
phytosanitary requirements (Table III.7).  These usually include the production of a phytosanitary
certificate from the country of origin and a physical inspection of the goods.  The Government points
out that although the law authorizes the physical inspection of all imports subject to sanitary orphytosanitary requirements, for trade facilitation reasons inspections are carried out on a random
basis.  It is estimated that about 15 per cent of imports subject to sanitary or phytosanitary
requirements are inspected.  Soil may not be imported nor may it enter the national territory in transit.
90. Through the State Phytosanitary Service and the Animal Health Directorate, the Ministry of
Agriculture and Livestock operates checkpoints and quarantine stations for carrying out controls andphysical inspections at ports and airports and on the borders.  In particular, the Service is authorized to
carry out phytosanitary inspections in the place or country of origin of plants, biological control
agents and other organisms for agricultural use that must be inspected before they can be imported.
                                                     
46 Specifically, Chapter IV of the Free Trade Agreement between Mexico and Costa Rica (Law
No. 7474 of 20 December 1994);  the Organic Farming Regulations (Executive Decree No. 25834-MAG of28 February 1997);  the Phytosanitary Protection Act (Law No. 7464 of 2 May 1997);  its Regulations(Executive Decree No. 26921 -MAG of 22 March 1998); the Regulations of the Ministry of Agriculture andLivestock Organization Act (Executive Decree No. 26431-MAG of 5 November 1997);  the Regulations on the
registration and marketing of foodstuffs (Executive Decree No. 26725-S of 16 March 1998) and the
supplements to those Regulations (Executive Decree No. 26817-S of 5 May 1998);  the Regulations on theregistration of hazardous products (Executive Decree No. 28113-S of 6 October 1999);  and theCentral American Regulation on Sanitary and Phytosanitary Measures and Procedures (Executive DecreeNo. 28222-MEIC-COMEX of 17 November 1999).WT/TPR/S/83 Trade Policy Review
Page 50
91. The State Phytosanitary Service may accept as equivalent the phytosanitary measures of other
countries, even if they differ from national measures, provided that the interested party shows that its
measures provide adequate protection.47  Likewise, through the State Phytosanitary Service and the
Animal Health Directorate, the Ministry of Agriculture and Livestock may, ex officio or at the request
of the interested party, recognize as equivalent compliance with the harmonized pesticide and
veterinary medicine registration requirements of other countries, if such recognition does not involveunnecessary risks for plant, animal or human health.
48
92. On the other hand, natural and legal persons intending to import, do research on, export,
experiment with, transport, release into the environment, breed or market transgenic plants,
genetically modified organisms or their products must obtain prior authorization from the State
Phytosanitary Service. The State Phytosanitary Service can turn for advice to the National TechnicalCommission for Biosecurity (Comisión Técnica Naci onal de Bioseguridad), established by the
Phytosanitary Protection Act, Law No. 7664 of 2 Ma y 1997, which is responsible for carrying out the
primary risk assessment on products of this type.  The first experiments with transgenic plants to be
made in Costa Rica were carried out in 1991, and since then authorization has been given for six types
of transgenesis or transgenic events related with the reproduction and re-exportation of seed and fourtypes of transgenesis strictly for research purposes.
93. All natural and processed foods with a specific designation, which are imported, processed or
marketed under a trade name, must be previously registered with the Ministry of Health.  For
registration purposes, imported food products which have been classified as high risk by the Ministry
of Health must be accompanied by a consular certificate establishing that their sale, use and
consumption is permitted in the country of origin.
49  Compliance with the sanitary requirements is
verified when the product enters the domestic market.
Table III.7
Products subject to sanitary and phytosanitary measures
Description of the goods Reasons Legislation WTO document
Botanical seeds of vegetables,
grasses, legumes, oilseed
plants, fruit trees, fodder plants,trees, ornamental plants,
flowers and any other plant
species for use by manPrevent the introduction of
quarantine pests on seedsExecutive Decree No. 26641 – MEIC-
MAG, of 1 September 1997,
published 25 February 1998G/SPS/N/CRI/22, of 30  June
1999, and G/SPS/N/CRI/11,
of 25 June 1997
Vegetable crops for humanconsumptionEstablishes the form of
sampling for determining
pesticide residue levels in
vegetable crops prior toconsumption to guarantee
safety and protection of
human and animal healthand prevent environmentalcontaminationExecutive Decree No. 27056 – MAG-
MEIC, of 5 January 1998, published11 September 1998G/SPS/N/CRI/21, of 17
March 1998
Plants, biological control
agents and other organisms for
agricultural usePrevent the introduction of
quarantine pestsExecutive Decree No. 27042 – AG-
MEIC, of 22 April 1998, published 9
September 1998G/SPS/N/CRI/20, of 17
March 1998
Fruits, fresh vegetables andtubers for consumption fresh orfor the food industryPrevent the introduction of
quarantine pests of fruits,vegetables and tubersExecutive Decree No. 26649 – MEIC-
MAG, of 1 September 1997,published 26 February 1998G/SPS/N/CRI/19, of 25 June
1997
Table III.7 (cont'd)
                                                     
47 Phytosanitary Protection Act, Law No. 7664 of 2 May 1997.
48 Executive Decree No. 27529 of 11 January 1999.
49 Executive Decree No. 26725-S of 16 March 1998.Costa Rica WT/TPR/S/83
Page 51
Description of the goods Reasons Legislation WTO document
Propagative material (apart
from botanical seed) such as
seedlings, bulbs, corms, roots,
rhizomes, tubers, cuttings, slipsor twigs, shoots, layers, plants
"in vitro" and any other
material used for plantpropagationPrevent the introduction of
quarantine pests onpropagative plant materialExecutive Decree No. 26648 – MEIC-
MAG, of 1 September 1997,published 27 February 1998G/SPS/N/CRI/18, of 23 June
1997
Plants, plant products or by-productsPrevent the introduction of
quarantine pests affecting
plants, plant products orby-products, where the
phytosanitary requirements
are not included in aspecific technicalregulationExecutive Decree No. 26647 – MEIC-
MAG, of 11 March 1997, published
25 February 1998G/SPS/N/CRI/17, of 23 June
1997
Spices for consumption or
processing: annatto, sesame,
basil, anise, celery, cinnamon,cardamom, cloves, cumin,
coriander, turmeric, “jamaica”,
ginger, laurel, nutmeg, pepper,marjoram and rosemaryPrevent the introduction of
quarantine pests affecting
spicesExecutive Decree No. 26646 – MEIC-
MAG, of 1 September 1997,
published 25 February 1998G/SPS/N/CRI/16, of 23 June
1997
Plant products not included inbotanical seed, propagative
material, grains, fruits,
vegetables and tubers for freshconsumption, processed plant
material and species, as well as
other non-plant productsPrevent the introduction of
quarantine pests on
miscellaneous plant
productsExecutive Decree No. 26645 – MEIC-
MAGG/SPS/N/CRI/15, of 20 June
1997
Biological control agents ornatural enemies, antagonists orcompetitors used for pestcontrolPrevent the introduction of
quarantine pests affectingbiological control agentsExecutive Decree No. 26644 – MEIC-
MAG, of 1 September 1997,published 24 February 1998G/SPS/N/CRI/14, of 23 June
1997
Grains for consumption orprocessing:  pounded rice, rice
in the husk, wheat, barley, peas,
maize (corn), sorghum, soya,oats, dried beans (black, red,
white and “cuba”), lucerne
(alfalfa), chick-peas, lentils,“rabiza”, groundnuts (shelled
or unshelled), etc.Prevent the introduction of
quarantine pests affectinggrainsExecutive Decree No. 26643 – MEIC-
MAG, of 1 September 1997,published 24 February 1998G/SPS/N/CRI/13, of 25 June
1997
Plants which have undergonesome process such as breaking,grinding, drying, freezing, etc.for subsequent consumptionPrevent the introduction of
quarantine pests onprocessed plant productsExecutive Decree No. 26642,
published 24 February 1998G/SPS/N/CRI/12, of 23 June
1997
Chemical and biological
substances used in agriculture,
for human and animalconsumptionCreate technical and legal
standards for regulating
everything concerned withthe analysis of residues in
plants and the environment
of chemical and biologicalsubstance used in
agriculture, for human and
animal consumptionExecutive Decree No. 27973 – MAG-
MEIC, of 19 May 1998, published 19
July 1999G/SPS/N/CRI/10, of 23 June
1997
Plants Establish maximum limits
for pesticide residues inplantsExecutive Decree No. 26031 – MEIC-
MAG-S, of 18 February 1997,published 30 May 1997G/SPS/N/CRI/9, of 23 June
1997
Table III.7 (cont'd)WT/TPR/S/83 Trade Policy Review
Page 52
Description of the goods Reasons Legislation WTO document
Products of animal origin, their
products and by-productsRegulate the importation of
products of animal origin,
their products and by-
products for healthprotection purposesLaw No. 6243, published 24 May
1978;  Executive Decree
No. 14584.A, published 24 June 1983;
and Executive Decree No. 21858-MAG, published 11 March 1993;General Veterinary ActG/SPS/N/CRI/4 to
G/SPS/N/CRI/8, of 20 June
1997, and 23 of  June 1997;
G/SPS/N/CRI/2
Source: WTO Secretariat, based on information supplied by the Costa Rican authorities.
(xi) State trading
94. The Costa Rican Government has stated that the only enterprise covered by the provisions of
Article XVII of the GATT 1994 is Refinadora Co starricense de Petróleo S.A. (RECOPE), which
solely and exclusively manages the State monopoly on the importation, refining and wholesale
distribution of crude oil, fuels derived from oil, asphalt and naphtha.50  In 1998, total imports of the
products subject to exclusive rights (14 tariff lines in Chapters 27 and 29 of the Harmonized System)
amounted to approximately US$265 million.
95. Costa Rica is maintaining these exclusive rights because fuel marketing is a strategic interest
and State intervention is necessary to guarantee that the products needed by the domestic consumer
are offered at the best price and are of the best quality.  The Government considers that it also has to
intervene to exercise control over fuel price policies, which have a considerable influence on the price
stability of a wide variety of other goods and serv ices.  Likewise, the Government believes that State
intervention performs an important social function by ensuring macroeconomic stability.
(xii) Government procurement
96. In 1998, the total value of government contracts, estimated on the basis of data from public
service budgets, amounted to 485,578 million colones (approximately US$1,830 million), which is
equivalent to 13.6 per cent of GDP for that year (Table III.8).  The Government has pointed out that
Costa Rica does not have a statistical system that would allow government procurement to be broken
down by type of bidding or by origin of the supplier.  However, it has set up an inter-institutional
working group on public-sector contract statistics composed of officials from the Office of theProcurator-General of the Republic, the Office of the Comptroller General of the Republic and the
Ministry of Foreign Trade.  This group is responsible for establishing an information system that will
enable detailed statistics to be generated systema tically.  Concrete results are expected in the first
quarter of 2001.
97. Costa Rica is not a signatory to the WTO Plurilateral Agreement on Government
Procurement.  Within the context of this report, the Costa Rican authorities have indicated that they
do not envisage signing the Agreement, mainly b ecause the high thresholds make it difficult for
Costa Rican enterprises to participate.
                                                     
50 WTO Document G/STR/N/4/CRI of 25 February 1999.Costa Rica WT/TPR/S/83
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Table III.8
Public sector procurement statistics, 1998a
(Million colones)
Total value Goods Services Construction services
Central government entitiesb 40,898 14,129 20,879 5,889
Subcentral entitiesc 10,380 4,997 3,879 1,503
Decentralized government entitiesd 100,689 55,708 34,561 10,420
Government enterprisese 333,609 194,931 114,223 24,454
Total 485,578 269,767 173,543 42,267
a Costa Rican Government estimates based on statistics from the budget expenditure settlement system and the annual report of th e
Comptroller-General of the Republic.  The average colon/US$ exchange rate for 1998 was ¢257.
b Includes the legislative branch (Legislative Assembly, Office of the Comptroller-General of the Republic and Ombudsman), the
executive branch (Office of the President and Ministries) and the judicial branch (which includes the Supreme Electoral Court).
c Includes 82 municipalities.
d Includes public service institutions.e Includes non-financial public enterprises and financial public enterprises.
Source: Costa Rican Government.
98. On the other hand, Costa Rica has participated in the work of the WTO Working Group on
Transparency in Government Procurement, established under the Singapore mandate, since it
considers that the use of transparent and predictable procedures in government procurement is in the
interest of both the governments that publish the bids  and those who participate in the bidding.  In the
Government's opinion, it would be desirable to es tablish within the WTO a multilateral framework of
rules and disciplines that guarantee the transparency of national government procurement policies and
procedures.  Costa Rica believes that to ensure compliance with these rules and disciplines the WTO
dispute settlement system would have to apply to any agreement.  However, as in the case of the
Agreement on Government Procurement, its interest in such an agreement would be limited if high
thresholds were established.
99. The Administrative Procurement Act (Law No. 7494 of 8 June 1995), its Regulations
(Executive Decree No. 25038-H of 28 March 199 6) and its Amending Act (Law No. 7612 of
22 July 1996) contain the principal provisions applicable to the procurement of goods and services by
the Costa Rican public sector.  The forms of procurement not covered by these provisions include
agreements concluded with other States or with subjects of public international law, contracts
negotiated between public-law entities, and activities authorized, by resolution, by theController-General of the Republic in the public interest.
100. Public sector procurement is based on the principles of efficiency, equality and free
competition, and publicity, although the participation of foreign bidders is subject to reciprocity.
Moreover, in making their purchases, the Government of the Republic, the autonomous and
semiautonomous institutions, the municipalities and any other official entity must give preference to
products manufactured by local industry, whenever the supply is adequate and the quality and price
are similar to those of the imported product.
51  If there is a difference in prices, a comparison must be
made between the price of the local product and that of the imported product, including all customs
and entry costs.  Executive Decree No. 26076-MP-MEIC of 13 June 1997 establishes, in terms of
customs duties and taxes, the percentages to be used in making this price comparison.
101. The main procedures for procuring goods and services are as follows: public or open bidding;
bidding by registration; restricted bidding; and di rect purchase or contracting.  The National Supply
                                                     
51 Law No. 7017 of 13 December 1985.WT/TPR/S/83 Trade Policy Review
Page 54
Agency (Proveeduría Nacional) maintains a registry of suppliers interested in government contracts.
This registry provides a means of assessing suppliers in terms of their record and technical, financial
and legal capacities.  The National Supply Agency invites suppliers to register at least once a year;
however, at any time interested natural and legal persons may ask to be included in the register.  The
Regulations on the use of the suppliers’ register (Executive Decree No. 25113-H of 24 April 1996)
establishes a series of general requirements with which natural, legal and foreign persons mustcomply in order to enrol as a supplier.  The Go vernment has pointed out that, in general, legal
documents confirming the existence and description of the goods or services offered are requested.
102. For each procurement, the procedure is determined on the basis of the total budget of the
administration in question and the estimated value of the contract (Table III.9).  In the case of public
bidding, if it is considered to be in the public interest , or if it has been so agreed with the international
public entity financing the procurement, the compet ent administration, in addition to publishing the
usual notices, may invite foreign enterprises to participate by publishing notices in foreign
newspapers or by informing the accredited trade legations in Costa Rica.  In urgent cases and to avoid
harming the public interest or doing serious injury to persons or irreparable damage to property, any
or all of the formalities relating to procurement procedures may be waived.
Table  III.9
Limits on administrative procurement
(Million colones)
Estimated value of contract
Administration
budget Public bidding Bidding by registration Restricted bidding Direct purchase
All contractsa
> 900 ≥ 45 < 45
≥ 15< 15
≥ 6< 6
Between 90 and 900 ≥ 18 < 18
≥ 7< 7
≥ 3.5< 3.5
< 90 ≥ 6 < 6
≥ 2< 2
≥ 1< 1
Public works contracts
> 900 ≥ 60 < 60
≥ 20< 20
≥ 6.< 6
Between 90 and 900 ≥ 36 <  36
≥ 12< 12
≥ 4< 4
< 90 ≥ 12 < 12
≥ 4< 4
≥ 1.5< 1.5
a Except for public works and those with a procedure specified in the Administrative Procurement Act, because of their purpose,
irrespective of quantity.
Source: Resolution of the Comptroller-General of the Republic No. 1-DEE-98 of 7 August 1998.
103. The criteria for assessing and comparing bids are not standardized, but the invitation to bid
must mention the factors that will be taken into consideration, their respective ranking and importance
in the overall comparison of bids, and the methods that will be used to assess and compare bids inrelation to each factor.  In the case of contracts for services, the selection criteria include, in addition
to the price, the personal, professional or business circumstances of the participants.Costa Rica WT/TPR/S/83
Page 55
104. Procurement  by the Ministry of Culture, Youth and Sport and the Costa Rican Social
Security Fund (Caja Costarricense de Seguro Soci al) is regulated by special legal instruments.52  The
Fund procures goods and services by inviting its registered suppliers to submit bids in writing.
Contracts are awarded on the basis of price, but a series of factors, such as delivery date and the
supplier’s previous performance, is taken into account.   The Fund reserves the right to reject bids and
to make partial awards, if it considers that to be in its interest.
105. The granting of public works and public utility franchises is regulated by the General Public
Utility Works Franchise Act (Law No. 7762 of 22 May 1998), its Regulations (Executive Decree
No. 27098-MOPT of 16 June 1998) and its amendi ng decree (Executive Decree No. 27253-MOPT of
27 August 1998).  The Act specifies that any public works project and its operation may be the subject
of a franchise, with the notable exception of works in the telecommunications and electricity sectors.The National Franchise Council (Consejo Nacional de Concesiones), a body set up under the Ministry
of Public Works and Transport, is responsible for the adjudication process.
106. As with government procurement, franchises are awarded on the basis of the principles of
efficiency, publicity, and equality and free competition.  The contract must be awarded to the bidder
who makes the economically best bid among those declared technically acceptable under the formulalaid down in the invitation to tender.  However, in the event of a tie between a Costa Rican and a
foreign bidder, the contract will be awarded to the domestic bidder.
107. In the case of oil and gas exploration and development contracts, the bidding and awarding
process is governed by the Regulations on the bidding system for oil and gas exploration and
development contracts (Executive Decree No. 25785-MINAE of 22 January 1997) and its amending
decree (Executive Decree No. 27720-MINAE of 9 March 1999).
108. In the context of the various free trade agreements concluded at regional level (with Chile,
Mexico and the Dominican Republic), Costa Rica has undertaken to grant national treatment to
suppliers from contracting countries for purchases of goods and services covered by those
agreements.
53  However, at CACM level, there is no corresponding provision.
(3) M EASURES DIRECTLY AFFECTING EXPORTS
(i) Procedures
109. Since 1995, there have been no significant changes in export procedures.  Under the General
Customs Act (Law No. 7557 of 20 October 1995), a cu stoms export declaration (previously known as
the single export form) must be lodged for all exports, with the sole exception of those destined for
Central America or Panama, for which the Centra l American Single Customs Form (Formulario
Aduanero Único Centroamericano, FAUCA) is used.
110. The customs export declaration must contain the following information:  particulars of the
customs broker, exporter, consignee and carrier; particulars of the customs office of departure and
control; particulars of the port of shipment and the country and port of destination of the goods and
                                                     
52 The Regulations on purchases and supplies of the Ministry of Culture, Youth and Sport (Executive
Decree No. 25958-C of 3 March 1997) and the Regulations on the purchase of medicaments, raw materials,
packaging and reagents of the Costa Rican Social Security Fund (Bill No. 13809 of 7 December 1999).
53 Chapter XII of the Free Trade Agreement between Mexico and Costa Rica (Law No. 7474 of
20 December 1994); Chapter XII of the Free Trade Agreement between Central America and the DominicanRepublic (Law No. 7882 of 8 July 1999); Chapter 16 of the Free Trade Agreement between Central Americaand Chile (Law No. 13809 of 7 December 1999).WT/TPR/S/83 Trade Policy Review
Page 56
the means of transport; a detailed description of the goods; particulars of the location of the goods
awaiting clearance; particulars of the commercial invoice and the bill of lading; the f.o.b. value
declared on the invoice and the cost of insurance and freight; and particulars of the exporter’s customs
procedure, where appropriate.  Customs declarations for banana exports must include additional data
on the producer and indicate the total number and weight of the boxes exported.
111. Exporters must be registered with the Single Window for Foreign Trade (Ventanilla Única de
Comercio Exterior, VUCE); registration is valid for one year and may be renewed on expiration.
Exporters must register in advance with specific agencies in order to export the following products:
textile products (Textile Quota Office); perishable agricultural products (Plant Health Directorate of
the Ministry of Agriculture); flowers (Costa Ri can Flower Growers Association); processed foods
(Food Safety Department of the Ministry of Health); and fisheries products (Costa Rican Fishing andAquaculture Institute).
112. Exporters can also conduct business with VUCE from their own premises, without having to
appear in person, by means of an automated system, known as SIVUCE, which allows them to use
“pre-stamped” customs declarations.  Exports by enterprises covered by the free zone regime are
processed in the offices of the General Directorate of Customs located in the industrial parks.
113. Coffee bean exports are handled by the Costa Rican Coffee Institute (Instituto Costarricense
del Café).  Exports of processed and ground coffee and its derivatives are not subject to any special
export formalities.  Other exports, which for the most part require physical inspection, are supervised
by specific organizations.  For example, exports of pottery and imitation antiquities are supervised by
the National Museum; exports of mineral products by the Geology and Mines Directorate of the
Ministry of the Environment and Energy; and exports of arms and explosives by the Arms and
Explosives Department of the Ministry of Public Security.  Exports of animals and animal products
must be accompanied by export sanitary certificates issued at the port of departure by the authorities
of the Ministry of Agriculture and Livestock.
(ii) Export taxes and charges
114. The revenue from exports is relatively large: in 1999, income from this source amounted to
5,524 million colones, which is equivalent to 1 per cent of total revenue.  From 1995 to 1999,Costa Rica levied taxes on exports of coffee, meat and bananas.
54  On 31 December 1999, the taxes on
meat and coffee were abolished.  At the end of 2000, only bananas were subject to export tax.  In
1999, the ad valorem equivalent of the taxes on banana exports represented 2.8 per cent of their f.o.b.
value.  Part of the revenue from these taxes was returned to the banana producers through the Banana
Producers’ Price Compensation Fund (Annex AIV.1).  At the same time, certain exports continue tobe subject to licensing fees (see Section (iv) below).
(iii) Minimum prices
115. Since March 1995, the minimum export price for a box of bananas has been set at US$6.
55
According to the Government, this is justified by the characteristics of the banana market, which is
dominated by the traders.  To prevent abuse, the Government fixes by decree the price at which thelatter can buy fruit from the producers.  However, these regulations became unnecessary because for
several years the contractual relationship between the parties was one of sales on “consignment” (the
price received by the producers was determined ex post facto, depending on the price that the fruit
company succeeded in obtaining for th eir fruit).  The conditions of sale have now gone back to being
                                                     
54 For more details see WTO (1995) Trade Policy Review – Costa Rica, Chapter IV (3) (ii).
55 See WTO (1995) Trade Policy Review – Costa Rica, Chapter IV (3) (iii).Costa Rica WT/TPR/S/83
Page 57
f.o.b. so that, in the absence of a satisfactory agreement between exporters and producers, the
Government should again be able to fix the minimum price at which the fruit is sold.
116. Unprocessed logs are subject to a minimum marketing value (see Section 4 (ii) below).
(iv) Export prohibitions and licences
117. In general, export prohibitions are applied for reasons such as national security and cultural or
environmental protection or on economic grounds (Table III.10).  Prohibitions notable for theirpossible economic effects are those affecting the export of logs and roughly squared timber from
forests.  The Government has pointed out that these prohibitions on logs and roughly squared timber
from forests have not been imposed for the sake of their economic effects but in order to protect the
environment.  Likewise, it has indicated that the regulations restricting or prohibiting bean exports
have been abolished and were last applied between August and September 1996.
118. With respect to exports subject to other restrictions, the Government has noted that the only
products subject to export licensing are tropical wood logs (valuable woods) and protected species of
wild fauna and flora.
56  Despite the prohibition in Law No. 7575, valuable wood logs can be exported
provided an appropriate permit has been issued.  So far, no authorization of this kind has been given.
119. In addition, various products, including coffee, cattle on the hoof, virgin honey, bulk sugar,
flowers and raw cotton, are subject to prior export authorization.
120. Furthermore, all exports of textile products and clothing subject to quantitative restrictions on
the part of the importing country must have an export visa.  The body responsible for issuing this visa
is the National Association of Textile Industry Exporters (Asociación Nacional de Exportadores de la
Industria Textil).  In order to compile the statistics and records necessary for the proper allocation and
administration of quotas, all exports of textile produc ts and clothing, whether subject to quotas or not,
must have a permit (Permiso de Exportación Textil) issued prior to exportation by this Association.This requirement does not apply to exports to the countries which make up the Central American
Common Market.
57
121. The Costa Rican legislation provides for the introduction of temporary export (or import)
licences and the application of export quotas.  The last time temporary restrictions were applied was
between August and September 1996 for beans.
(v) Export cartels
122. As explained in the previous Secretariat report, the Agro-Industrial Cane Sugar League
(LAICA) controls almost all sugar exports (Section 4 (iii)), although legally it does not have exclusive
control.  Moreover, LAICA is responsible for granting export permits for bulk sugar exports.  The
National Flower Exporters Council (Consejo Nacional  de Exportadores de Flores) controls flower
exports, for statistical purposes, by granting permits.
                                                     
56 Executive Decree No. 25700-MINAE of 15 November 1996.
57 Executive Decree No. 24304 of 24 May 1995, Articles 32 and 33.WT/TPR/S/83 Trade Policy Review
Page 58
Table III.10
Products subject to export prohibitions and restrictions
Product description Measure Reason Statutory instrument
Shark fin, cartilage, maws, tilapia
and ornamental fishPermit (Costa Rican Institute for
Fishing and Aquaculture –INCOPESCA)Recording and monitoring
of fisheries statisticsLaw No. 7384, INCOPESCA
Law of 16.2.84
Coffee (roasted, in beans or ground) Permit (Costa Rican Coffee
Institute - ICAFE)Recording and  monitoring
of statistics of coffee
production and exportsICAFE Law No. N° 2762 of
21.06.61.  Executive Decree
No. 28018-MAG of 9.8.99
Textile fibres of any plant materialsand textiles and clothing exported to
any third market outside of the
Central American areaPermit 
 (Council for Textile
Quotas)Recording and monitoring
of statistics of third
markets for export
statistics purposesExecutive Decree No. 24304
of 24.5.95
Sugar in bulk Permit  (Sugar Cane Industrial
Agricultural League - LAICA)Recording and  monitoring
of statistics of sugar
production and exportsLaw No. 7818, LAICA Law
of  2.09.98
Coins (Costa Rican only) Ban  (Central Bank of Costa Rica) Protection of the money
supplyResolution of the Executive
Board of the Central Bank,
Ordinary Meeting No. 2852-
74 of 11.03.74
Human organs Ban (Ministry of Health) Public health General Health Law, Law
No. 5395 of 30.10.73
Plasma and blood Authorized for research purposes
only (Ministry of Health)Public health General Health Law, Law
No. 5395 of 30.10.73
Ceramic (clay) ornaments Permit (National Museum) Protection of cultural
heritageLaw No. 6091 of 7.10.77
Archaeological objects Export ban Protection of  cultural
heritageLaw on National
Archaeological Heritage,
Law No. 6703 of 28.12.81
Weapons, ammunition and
explosivesPermit  (Ministry of Public
Safety)Public safety Law No. 7530 of 10.7.95 and
Executive Decree No. 25120-
SP of 17.4.97
Propellant powders (36.01),prepared explosives (36.02), safety
fuses and other accessories (36.03),
pyrotechnic articles (36.04)Permit
 (Ministry of Public
Safety)Public safety Law No. 7530 of 10.7.95 and
Executive Decree No. 25120-
SP of 17.4.97
Phosphorus (Chapter 28), industrial
ammonium nitrate (Chapter 31)Permit (Ministry of Public
Safety)Public safety Law No. 7530 of 10.7.95 and
Executive Decree No. 25120-SP of 17.4.97
Seeds Permit (National Seeds Office) Recording and monitoring
of statistics of seed exportsLaw No. 6289, Seeds Law,
of 4.12.78
Protected species of wild fauna and
flora, grindstones, calcium
carbonate, gold and silver, orchids,ipecacuanha root, soilPermit
 (Ministry of the
Environment and Energy)Protection of the
environmentLaw No. 5605 of 30.10.74;
Law No. N° 7317 of 7.12.92;
Executive Decree No. 26435-MINAE of 1.10.97
Controlled substances (precursors,essential chemicals) and machineryand accessories used for producing
narcotics and psychotropic
substances in tablet or capsule formPrior authorization (Ministry of
Health)Narcotics control Narcotics, Psychotropic
Substances, UnauthorizedDrugs and Related Activities
Law, Law No. 7786 of
30.4.98
Logs and roughly squared timber
from forestsaBan Protection of the
environmentForestry Law, Law No. 7575
of 13.2.96
a The banned species are:  black garlic (Anthodiscus chocoesnsis); balsam (Myroxylon balsamun); camíbar (Copiafera mamibar);
mahogany (Swietenia macrophylla), cedar (Cedrela salvadorensis); royal cedar (Cedreña fissilis), cypress (Podocarpus
costaricensis); cola de pavo (Hymenolobium mesoamericanum); copo (Couratari scottimorii); cristóbal (Playumiscium pinnatum);
cristóbal (Platymiscium parviflorum); lignum-vitae (Guaiacum sanetun); black laurel (Cordial gerascanthus); cypress (Podocarpusguatemalensis), quira (Carydaphnopsis burgerii), sandrillo (Paramachaerium gruberi); tamarind (Parkia pendula); tostado
(Sclerolobium costaricense).
Source: WTO Secretariat, based on information supplied by the Costa Rican authorities.
123. In May 2000, within the framework of the As sociation of Coffee Producing Countries
(APPC), Costa Rica undertook to retain 20 per cent of its exportable coffee production for the 2000-
2001 and 2001-2002 seasons.  To fulfil this commitment, the Costa Rican Coffee Institute (ICAFE)Costa Rica WT/TPR/S/83
Page 59
approved the Internal Retention Regulation of 31 May 2000, under which, on the basis of the average
for coffee berries received by each beneficiary firm in the 1998-1999 and 1999-2000 seasons and on
the basis of the yield obtained during the season, marketing quotas will be distributed as follows:
79 per cent for export; 1 per cent for domestic consumption; and 20 per cent in retention.
124. The coffee retained must be of exportable quality and be stored in a General Bonded
Warehouse, which for the purposes of the agreement could be ICAFE itself.  Furthermore, theverification of retention is the responsibility of either ICAFE or the firms commissioned by
international agencies to verify the existence of the coffee retained.  The Internal Coffee Retention
Regulation provides for a series of penalties which can be imposed on the beneficiary firm in the
event of non-compliance.  The administrative and inspection costs of the retention system are borne
by ICAFE.
125. The Government of Costa Rica is not aware of any similar agreements to which companies
operating in Costa Rica are parties.
(vi) Duty and tax concessions
126. In order to encourage exports, Costa Rica operates three special import procedures:  inward
processing; drawback; and relief from import duties and taxes.
127. The inward processing procedure, which includes the temporary admission procedure
described in the previous report, allows goods to enter the national customs territory with relief from
all duties and taxes subject to the provision of a guarantee.
58  Goods which may enter under this
procedure include:  raw materials; semi-manufactured products; finished products for incorporation in
other end products processed in the country; labels and the like for incorporation in the product to be
re-exported; containers and packing and packaging materials; determinable chemical and other
substances in the quantities and of the quality necessary for use in the process, even if consumedwithout being incorporated in the end product, with  the exception of fuel; machinery, equipment and
parts directly involved in the production process; moulds, dies and other devices which complement
other apparatus.  The goods must be re-exported within six months (which may be extended only once
by an equal period).  There is an exception for machinery and accessories, which can stay indefinitely
(formally for periods of five years automatically extended).
59  In 1999, the total value of exports under
this procedure amounted to US$370 million (equivalent to 5.5. per cent of total merchandise exports).
128. The drawback procedure provides for the refund ing of sums actually paid or deposited in
favour of the Revenue as duties and taxes in connection with the outright importation of inputs,
containers or packaging incorporated in exports, provided that the products are exported within
12 months of importation of the goods.  In 1999, the total value of exports under this procedureamounted to US$441.5 million (equivalent to 6.7 per cent of total merchandise exports).
129. The free zone procedure, the main procedure giving entitlement to relief from the payment of
customs duties and taxes, is described in Section 3 (ix) above.  In December 1999, Costa Rica notified
the abolition of tax credit certificates (Certificados de Abono Tributario, CAT) which granted export
subsidies to enterprises that met certain local content requirements.
60  In 1998, the revenue lost as a
result of the use of CATs amounted to US$122.6 million.  On the other hand, the Export Promotion
                                                     
58 General Customs Act, Law No. 7557, 20 October 1995, Article 179.
59 Regulation on Inward Processing Procedures, Executive Decree No. 26285-H-COMEX,
4 September 1997.
60 See WTO (1995), Trade Policy Review - Costa Rica , Chapter IV.3 (xvi) and WTO Document
G/SCM/N/60/CRI, 21 July 2000.WT/TPR/S/83 Trade Policy Review
Page 60
Act (Law No. 5162 of 22 December 1972) introduced ex port increment certificates (Certificados de
Incremento de Exportaciones, CIEX) which enable enterprises that meet the requirements to be
granted a sum equivalent to 10 per cent of the increase in their exports over the previous year.
However, the authorities have pointed out that no budget expenditure of this kind has yet been
authorized.
(vii) Export finance, insurance and guarantees
130. The authorities have pointed out that the Government does not intervene directly in any
specific export finance programme.  However, exporters have a number of options for financing their
operations.  For example, they can resort to the banks and non-banking financial institutions whose
interest rates and loan conditions vary according to the product to be exported, the size of the
enterprise, etc.
131. Costa Rican exporters may also turn to the Central American Export Promotion Fund (Fondo
para el Fortalecimiento de las Exportaciones Centroamericanas), financed by the European Union and
the Central American Bank for Economic Integr ation (CABEI), whose fixed interest rates are
determined with reference to the international market.  In 1992, CABEI instituted the Programme of
Support for Central American Exportable Productio n (Programa de Apoyo a la Producción Exportable
de Centroamérica, PAPECA) which provides funds at  a rate equal to six-month LIBOR plus a margin
fixed by the bank.  During the period from the beginning of 1992, the year in which the programme
was introduced, to October 2000 a total of US$409 million was made available to Costa Rican
businesses.
132. On the other hand, the mechanisms and conditions relating to export guarantees and insurance
have not changed since 1995.  The National Insurance Office (Instituto Nacional de Seguros, INS)
(Chapter IV.5 (ii)) is still exclusively offering credit insurance covering the risks involved inextending credit for the export of goods and services.  The percentage credit that can be guaranteed or
insured is 80 per cent of the invoiced amount.  The corresponding payment is calculated as an annual
premium adjusted to take monthly movements into  account and converted into monthly instalments.
Before issuing guarantees or insurance, INS makes a risk assessment of both exporter and importer to
determine the amount of the premium.  The authorities have pointed out that the main branches ofeconomic activity to have benefited from credit insurance are the aluminium, leather, textiles and
machinery sectors.
(viii) Export promotion, marketing assistance
133. In November 1996, the Costa Rican Foreign Trade Promotion Agency (Promotora del
Comercio Exterior de Costa Rica, PROCOMER) was established, to join the Free Export ZoneCorporation (Corporación de Zonas Francas de Exportación S.A., CZFE), the Centre for the
Promotion of Exports and Investment (Centro para la Promoción de las Exportaciones e Inversiones,
CENPRO) and the National Council for Investme nt (Consejo Nacional de Inversiones, CNI).
61  The
authorities have indicated that, at present, PROCOMER is the principal export promotion institution.
Other institutions and sectoral bodies (such as ICAFE and LAICA) have their own independentpromotional activities; nevertheless, these promotional activities can be coordinated with
PROCOMER.
134. PROCOMER is responsible for formulating and co ordinating programmes relating to exports
and investment, as well as the administration of the single window system for foreign trade (see
VUCE, Section (i) above).  The services provided are intended to promote greater competitiveness,
                                                     
61 Law No. 7638 of 13 November 1996.Costa Rica WT/TPR/S/83
Page 61
effective access to international markets, increased export value and volume, market diversification
and improved marketing channels.
135. PROCOMER’s annual budget is approximatel y US$1.3 million.  About 22 per cent of this
budget is earmarked for export promotion activities.  External financing takes the form of financing
for trade fairs and stands which may be granted by agencies such as JETRO (Japan), ICI (Canada),
CBI (Netherlands) and Protrade (Germany).  The auth orities have noted that the resources and efforts
invested by PROCOMER have resulted in greater Costa Rican participation in trade missions and
international fairs with PROCOMER funding, as a fo rm of incentive, up to 60 per cent of the costs of
the participating companies.  In order to facilitate and promote Costa Rican exports and assist its
businessmen, PROCOMER has opened trade offices in Chile, Mexico and the Dominican Republic.
Moreover, PROCOMER is trying to create more exporters through a programme aimed at
businessmen and designed to promote the greater integration of small and medium-sized businesses
into the international economy by offering effectiv e training, trade information and marketing tools.
Similarly, PROCOMER is also contributing to the “Costa Rica Supplies” programme which, in
coordination with the Ministry of the Economy, Industry and Trade, the Costa Rican Chamber of
Industry and the National Centre for High Technology (Centro Nacional de Alta Tecnología), aims topromote links between local enterprises and multinationals established in the country.
(ix) Free zones
136. There have been no major changes in the free zone regime since the Secretariat’s last report.
62
The legislation amending the Free Zone Regime Act (Law No. 7830 of 8 October 1998) introduced
certain modifications such as the possibility of granting the procedure to enterprises that set up outside
an industrial park; total exemption from duties and consular fees on the importation not only of
lubricants but also of the fuels and oils needed to run the enterprise (an exemption granted only if likegoods of sufficient quality are not produced domestically in sufficient quantity and in good time); a
reduction in the benefits granted to enterprises that set up in free zones located in “relatively less
developed” areas (from 15 per cent of the annual wages paid to 10 per cent).
137. During 1999, the exports of enterprises that qualified for the free zone regime increased by
82.2 per cent reaching a value of US$3,581 million, which represented 53.5 per cent of total sales ofgoods abroad.  The increase is considerable, especially as in 1995 the value of exports under this
regime amounted to US$434 million (13 per cent of total Costa Rican merchandise exports).
138. By the very nature of the system, almost all exports (98 per cent) are in the non-food
manufacturing sector.  The main products exported include modular circuit components, which
account for 69.3 per cent of total exports under the regime, serum infusion and transfusion equipment,cotton panties, leather articles, hair dryers, precious-metal jewellery articles and electronic
microstructures.
139. During 1999, 62.4 per cent of the exports of free-zone enterprises went to North America
(with 96.1 per cent going to the United States); the second most important destination was the
European Union (19.8 per cent of exports under the regime) and, in particular, the Netherlands and theUnited Kingdom.  Finally, 10.8 per cent of free  zone exports were shipped to the Asian market and,
in particular, the markets of Japan, Singapore and Malaysia, in decreasing order of importance.
140. Another important aspect of the free zone regi me is the impact it has had on employment.  In
1995, about 25,000 were employed in free zone enterprises, while the corresponding figure for 2000
was about 31,000, an increase of over 24 per cent.  This growth is partially attributable to the
                                                     
62 See WTO (1995), Trade Policy Review - Costa Rica , Chapter IV.3 (xvi).WT/TPR/S/83 Trade Policy Review
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preponderance (57 per cent) of small and medium-sized enterprises (less than 100 workers) in these
zones, since these businesses tend to be comparatively labour-intensive.
141. The authorities note that the large firms which have set up in free zones in recent years have
tended to manufacture products of increasing technological complexity.  Consequently, free zone
exports have tended to have a lower labour-intensive product content (slightly less than 12 per cent of
total free zone exports in 1999) and to consist increasingly of high-technology products (almost 76 percent).  This, in its turn, is closely linked with increased sales of modular circuit components.
(x) Measures applied in foreign market
142. Since the Secretariat’s last report, Costa Rican exports of bananas to the European Union and
of textiles and made-up clothing to the United States and Canada have been subjected to tariff quotas
on the import markets.
143. In the case of bananas, partly as a result of the negotiations on agriculture in the Uruguay
Round and the Framework Agreement on Banana s (BFA) between the European Union and
Colombia, Costa Rica, Venezuela and Nicaragua, between 1995 and 1999 Costa Rica received
23.4 per cent of a global annual tariff quota of 2.5 million tonnes of bananas established by the
European Union for non-ACP countries.  On 1 January 1999, Costa Rica’s share rose to 25.61 percent when the European Union modified its regime as a result of the rulings and recommendations of
the Banana Panel.
63  The distribution scheme established by the European Union in 1999 was also
questioned in the WTO and at the end of 2000 consultations were held on possible alternative ways of
reforming the European banana import regime.64  Chapter IV.2 gives details of the banana industry in
Costa Rica.
144. Under cover of the rules and disciplines laid down in the WTO Agreement on Textiles and
Clothing, some Costa Rican clothing exports have been subjected to quotas in Canada and theUnited States.  The Costa Rican products under restri ctions in the United States include various types
of shirts, trousers, skirts and suits
65; in Canada the restrictions affect underwear.66
145. Moreover, in 1995 the United States imposed restrictions on imports of cotton and synthetic
fibre underwear from Costa Rica quantitatively equivalent to 14.4 million dozen.  On that occasion,
the United States maintained that the restrictions were based on article 6 (transitional safeguardmeasures) of the Agreement on Textiles and Clothi ng.  The restriction was subsequently withdrawn as
a result of the rulings and recommendations of the Panel and the Appellate Body.
67
146. From 1999 to the end of 2000, Costa Rican exports were affected only once by the imposition
of anti-dumping duties, namely on macaroni imports in Trinidad and Tobago68; the measure was
cancelled in May 2000 after Costa Rica had requested consultations within the WTO.  During the
                                                     
63 For further details see the Appellate Body Report on the European Union’s regime for the
importation, sale and distribution of bananas (WTO Doc. WT/DS27/AB/R of 9 September 1997).
64 WTO Document WT/DS27/RW/ECU of 12 April 1999.
65 The administrative arrangements agreed between the United States and Costa Rica were notified in
WTO Document G/TMB/N/267 of 22 July 1997.  For further details on the quotas in force in the United Statessee WTO (1999), Trade Policy Review – United States , Annex III.1.
66 The administrative arrangements agreed between Canada and Costa Rica were notified in WTO
Document G/TMB/N/155 of 16 July 1996.  For further details on the quotas in force in the United States see
WTO (1999), Trade Policy Review – Canada , Chapter IV.4.
67 For further details see the Panel Report (WTO Doc. WT/DS24/R of 8 November 1996) and the
Appellate Body Report (WTO Document WT/DS24/AB/R of 10 February 1997).
68 WTO Documents. G/ADP/N/47/TTO of 3 August 1999 and G/ADP/N/59/TTO of 29 March 2000.Costa Rica WT/TPR/S/83
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same period two anti-dumping investigations into Costa Rican products were initiated in Nicaragua,
one affecting portland cement and the other iron or steel bars for use in construction; neither of these
investigations ended with the imposition of provisional or definitive anti-dumping duties.69
147. The Government has observed, in the context of the present review, that Costa Rican exports
to the CACM countries and Panama have had problems with investigations relating to rules of origin,
the imposition of burdensome requirements at land frontier posts, delays in the granting of importlicences for agricultural products, and delays in processing import permits due to postponement of the
inspection of Costa Rican export plants by the health authorities of the country of importation.
148. Costa Rican raw cane sugar exports benefit from tariff quotas granted by the United States.
The quota volume allocated to Costa Rica for the tax year beginning 1 October 1999 was
15,797 tonnes.  The income associated with these tariff quotas is considerable.  Thus, for example,during tax year 1998-99 the Costa Rican exporters earned US$4.8 million.
70
(4) O THER MEASURES AFFECTING TRADE
(i) Competition policy
149. Costa Rican competition law is based on the Political Constitution which prohibits particular
monopolies and any act, even if originating in a law,  that threatens or restricts the freedom of trade,
agriculture or industry.  Moreover, the Constitution declares any action by the State intended to
prevent monopolistic practices or tendencies to be in the public interest.  The legal framework is
supplemented by the Promotion of Competition and Effective Protection of the Consumer Act, Law
No. 7472 of 19 January 1995, and its Regulations, Executive Decree No. 25234-MEIC of
1 July 1996.71
150. The Promotion of Competition and Effective Protection of the Consumer Act applies to
economic operators active in Costa Rica and engaged in any area of activity other than public utilityfranchises and State monopolies, in so far as they exist under special legislation.  The main areas of
application of the Act are:  economic deregulation; the setting and control of prices (see Section (ii)
below); the protection of competition; and consumer protection.
151. The Act established two commissions under the Ministry of the Economy, Industry and
Trade.  The National Consumers Commission (Comisión Nacional del Consumidor, CNC) is
responsible for enforcing the consumer protection pr ovisions of the Act.  At the same time, the
Commission for the Promotion of Competition (Com isión para Promover la Competencia, CPC) is
competent to prevent and sanction, where appropriat e, any practice that constitutes an impediment or
obstacle to free competition or unnecessarily interferes with the smooth operation of the market.
Likewise, the CPC must ensure that the formalit ies and requirements relating to the control and
regulation of economic activities do not unnecessarily impede, slow down or distort transactions on
the domestic and international markets.  This Commission is empowered to review, analyze and,
where appropriate, eliminate unnecessary measures.
152. The CPC consists of five full members and five alternates, appointed with the approval of the
executive branch, at the proposal of the Ministry of the Economy, Trade and Industry.  Its final
                                                     
69 The Nicaraguan notifications can be found in WTO Documents. G/ADP/N/41/NIC and G/ADP/N/47
of 11 February 1999.
70 Secretariat estimate based on information published in LAICA (1999), Statistical Report 98-99 .
71 According to provisions contained in this legislation, the General Public Service Act (Law No. 6227
of 30 May 1978) and the Administrative Courts Regulating Act (Law No. 3367 of 17 April 1966) also apply.WT/TPR/S/83 Trade Policy Review
Page 64
decisions can be challenged directly for illegality in the administrative courts, once all administrative
remedies have been exhausted.  From the outset, the CPC has been dedicated to promoting a culture
of competition in the country through the prom ulgation of the Promotion of Competition and
Effective Protection of the Consumer Act.  At the same time, it has taken a preventive approach,
issuing more than 70 reports on free competition in relation to laws, decrees, bills and other
administrative acts.
153. From 1995 to December 1999, the CPC heard 256 competition cases following from
ex officio investigations or complaints from economic operators.  During its first few years, the fines
imposed were sometimes relatively modest; however, since 1999, there have been increases in the
amount of the penalties as well as in the number of economic operators penalized (Table III.11).  At
the same time as imposing fines, the CPC has ordered economic operators to eliminate or stopprohibited practices or concentrations.  If its orders are disobeyed, the CPC may produce evidence and
forward it to the Office of the Procurator-General for the offence of disobedience under article 305 of
the Penal Code.
154. The National Deregulation Commission (Comisi ón Nacional de Desregulación) was set up
(Executive Decree No. 27351-MP-MEIC of 14 October 1998) to help create a better climate forinvestment through the simplification of procedures .  This Commission consists of the Ministers of
the Economy and Public Health, the Chairman of the CPC and three representatives of the private
sector appointed by the Union of Business Chambers  (Unión de Cámaras Empresariales).  A technical
unit known as the Simplification of Procedures Programme (Programa de Simplificación de Trámites)
has also been set up to do the technical work, namely to review new executive decrees and propose
means of simplifying the procedures established by decrees in force which involve unnecessary costs
for the citizen or investor.
155. The principal achievements of deregulation during the last six years include the
elimination of:
− The markups on toothpaste, soap powder, detergents and floor wax;
− the technical regulations on the general labelling of non-food products and various
obsolete technical regulations;
− the agricultural courses of the Costa Rican College of Agricultural Engineers,
mandatory for some activities;
− the monopolistic practice of  “first to register, only one to import and market” in the
case of agricultural inputs; and
− the regulation of compulsory hiring wages and salaries.Costa Rica WT/TPR/S/83
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Table III.11
Fines imposed by the Commission for the Promotion of Competition, 1995-1999
File Company fined PracticeAmount of
fine
(colones)Amount of
fine (US$)a
02.95 BTICINO de Costa Rica Imposition of resale prices (60 minimum wages) and for
imposing an exclusive dealing requirement3,128,241 17,476
08.95 Ice makers Price-fixing agreement (1 minimum wage)
-  Fábrica de Hielo San Joaquín
   de Flores31,282 174
-  Fábrica de Hielo El Virilla 31,282 174
-  Hielo Industrial La Cruz, S.A. 31,282 174
-  Fábrica Hielo Cinco Esquinas 31,282 174
-  Fábrica Hielo La Uruca 31,282 174
07.95 Gas companies Price-fixing agreement
-  TROPIGAS de Costa Rica (125 minimum wages) 5,026,250 28,080
-  Gas Nacional Zeta (75 minimum wages) 3,026,250 16,906
07.98 Aguas Minerales de Costa Rica Refusal to supply information (12 minimum wages) 626,400 2,434
28.98 Cámara Nacional de Farmacias Preventing the entry of new competitors 178,560 695
(CANAFAR) (3 minimum wages)
15.98 Cámara Nacional de Frijoles a
AfinesExchange of information for the purchase of beans in
bulk and price-fixing agreement for the sale of 900 g
bags of black beans
-  Agroindustrial Gaval, Ltda. 1,731,940 6,740
-  Procesadora JINCA 1,731,940 6,740
-  Empaques Agroindustriales 1,284,780 5,000
-  Inversiones 5000 1,731,660 6,740
-  Comisión de Granos Básicos 2,122,680 8,260
-  Comercios de El Barreal 2,122,680 8,260
-  C. C. Invers. Agroindustriales 2,122,680 8,260
-  Agrícola Ind. Ojo de Agua 1,731,660 6,740
-  Semillas del Norte 670,320 2,608
-  Pedro Oller 2,848,860 11,085
-  Hortifruti 2,457,840 9,564
-  Consorcio Comercialización 2,178,540 8,477
11.99 Presenters Price-fixing agreement
-  Rosa Ma. Monge Álvarez (1 minimum wage) 55,860 196
-  Fernando Ugalde Ruiz 55,860 196
-  Alexander Santamaría 55,860 196
34.99 Transport companies Price-fixing agreement
Transportes Superiores del Este
Rolán S.A.1,325,200 4,650
Transportes J. Hans Ramírez S.A. 3,644,300 2,787
Servicio de Cabezales S.A. 3,710,560 13,020
Terminal de Contenedores
(interoceánicos) S.A.1,325,200 4,650
Transportes Internacionales Gash 9,276,400 32,549
Servicio de Transporte y
Contenedores S.A.1,855,280 6,510
Transporte Alvarado y Gómez S.A. 4,505,680 15,809
Transporte Grant S.A. 1,060,160 3,720
Transporte H y H S.A. 3,710,560 13,020
Argon Ltda. 4,571,940 16,042
Transporte Internacional Yumbo
S.A.9,276,400 32,549
36.99 Tanneries Price-fixing agreement
Tenería Pirro 3,414,908 11,982
Antonio Gómez Ltda. 3,414,908 11,982
Tenería Primencia 3,833,060 13,449
Coopemontecillos 3,693,676 12,960
Isaías Gómez Víquez 557,536 1,956
Alberto Volio C. 139,384 489
Edwin Montero 278,768 978
Total 94,639,191 354,625
a Calculations based on the average exchange rate for each year.
Source: WTO Secretariat, based on information supplied by the Ministry of the Economy, Industry and Trade.WT/TPR/S/83 Trade Policy Review
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156. The following have also been simplified or rationalized:
− The registration and control of more than 100 agrochemical products;
− the operating licences for hazardous products and the registration of such products
with the Ministry of Health;
− the documentation for accessing the inward processing and free zone procedures; and
− the procedures for supplying food for public service programmes.
157. A fast-track registration procedure for low-risk veterinary medicines has recently been
introduced, together with a single procedure for the application, shipping and storage of agricultural
chemicals.
(ii) Price controls
158. Under article 5 of the Promotion of Competition and Effective Protection of the Consumer
Act, the government can control the prices of goods and services only in exceptional circumstances
and on a temporary basis.  These exceptional circumstances include the existence of abnormal market
conditions and monopolistic or oligopolistic conditions in the production or sale of goods or services.
The imposition of controls must be preceded by a technical study to confirm the existence orpersistence of exceptional circumstances.  This technical study must, also by law, be repeated for the
purpose of reviewing the appropriateness of the controls within a period of not more than six months,
or at any time at the request of the interested parties.
159. The technical study establishing the appropriateness of price controls is assessed by the
Ministry of the Economy, Industry and Trade (MEIC) which submits it to the Commission for thePromotion of Competition for an opinion on the desirability of the controls.  However, the opinion of
the Commission is not binding on MEIC which may depart from it on the basis of a duly substantiated
resolution.
160. Price controls may be imposed by setting prices, establishing markups or any other form of
control.  The regulations apply equally to imports and domestically produced goods.  Nor is anydistinction made between production for the domestic market and production for export.  In any event,
MEIC is not authorized to regulate products for export, except in the applicable stages of domestic
marketing.
161. The authorities have pointed out that, at present, rice is the only item in the basic basket
subject to official price controls (see Chapter IV.2).  The prices at which the products (spirits) of the
Fábrica Nacional de Licores are sold are set by the National Production Council (Consejo Nacional de
Producción).  Apart from fuels, no other goods are subject to price controls.
162. At the same time, public utility prices are controlled by the Public Utilities Regulatory
Authority (Autoridad Reguladora de los Servicio s Públicos, ARESEP), established by Law No. 7593
of 6 October 1996 (see Chapter IV.5).  ARESEP is authorized to set the prices and tariffs of the
following public services:  electricity generation, transmission, distribution and marketing; those
telecommunications services regulation of which is authorized by statute; water supply and sewerageservices, including drinking water and the collection, treatment and disposal of sewage, wastewater
and stormwater; the supply of hydrocarbon fuels; irri gation and drainage, if the service is provided by
a public enterprise or under a franchise or licence; any means of paid public passenger transport,Costa Rica WT/TPR/S/83
Page 67
except by air; maritime and air services in national ports and airports; rail freight services; the
collection and treatment of solid and industrial waste; postal services; and public works franchises.
Moreover, ARESEP must ensure compliance with the standards governing the quality, quantity,
reliability, continuity, timeliness and optimum provision of these services.
163. Each year, the State Forestry Service (Administración Forestal del Estado) fixes, by decree,
the minimum marketing value of unprocessed logs, according to the type of wood.72  The authorities
have pointed out that this is purely a fiscal measure designed to establish the minimum marketing
value of the logs, so that the forest tax of 3 per cent can be levied at the time of processing.  Ministry
of Environment and Energy Resolution No. 055-99 of 20 December 1999 set the minimum prices per
cubic metre for the year 2000 on the basis of th e following classification: very fine woods -
39,141 colones; fine hardwoods - 29,179; semi-h ardwoods - 23,002 colones; and softwoods -
16,452 colones.
164. The Government also sets the minimum export price for bananas (see Section 3 (iii) above).
(iii) Marketing and restrictions on production
165. In practice, because of its negotiating capacity and the infrastructure and marketing
opportunities at its disposal, LAICA controls almost all the marketing, both internal and external, ofsugar and honey produced in Costa Rica. The only exceptions are marginal exports by just a few mills
organized in cooperatives.
166. Nevertheless, under the Agriculture and Sugar Cane Industry Organization Act, mills are not
obliged to sell to LAICA the sugar and honey produced within their allocated quota and can freely
engage in marketing activities.
73  However, they are not authorized to sell only part of their
production; if they decide to market their output di rectly, then that decision must apply to the whole
of their output.  Moreover, before the sugar-making season begins, the mills that decide to markettheir output directly must take out comprehensive insurance on the sugar and honey end products, up
to the point of delivery to the buyer.  The sum insured must correspond to the estimated value of the
products determined by the LAICA Board of Directors and the policy must cover the period specified
by the Board.  In the course of the sugar-making season, the Board may order these values to be
adjusted, in line with its new estimates.
167. Each year, before  the sugar-making season begins, LAICA fixes the national sugar
production quota.  This quota is calculated on the basis of the national sugar consumption recorded in
the previous season multiplied by a fixed factor of 1.5.  At the same time, LAICA defines the types of
sugar which the quota should include and their end uses.  The national quota is distributed among the
mills through the allocation of production quotas, proportional to the reference quotas of each mill.The individual production quota allocation includes the amount and type of sugar to be produced for
domestic consumption, export or stockpiling.  Any sugar that a mill produces in excess of its
individual production quota cannot be sold for dom estic consumption or on any preferential market
whose needs LAICA has ordered should be met with sugar from the national quota.  All surpluses are
closely monitored by LAICA and must be st ored in warehouses which it has approved.
168. The disposal of sugar for direct export is governed by itemized, signed and sealed written
contracts which, in order to be formalized and executed, must be registered with LAICA before being
approved.  The Act stipulates that in no circumstances may sugar be disposed of for export without
the legal requirements being met.
                                                     
72 Forestry Act, Law No. 7575 of 13 February 1996, article 44.
73 Agriculture and Sugar Cane Industry Organization Act, Law No. 7818 of 2 September 1998.WT/TPR/S/83 Trade Policy Review
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169. Spirits and alcoholic drinks can be sold only under licence.  The sale of domestic spirits
requires a domestic liquor licence.  The sale of foreign spirits requires a foreign liquor licence, except
in the case of CACM spirits covered by the free trade regime which can be sold with a domestic
liquor licence.  Fine spirits produced by the National Spirituous Beverages Factory (Fábrica Nacional
de Licores) or by other authorized domestic enterprises, including domestic beer, may be sold in
establishments that possess either of the two licences.74
170. The number of establishments authorized to sell spirits depends on each municipality.
However, in towns with more than 1,000 inhabitants which are not provincial capitals, there cannot be
more than one establishment with a licence for foreign spirits per 500 inhabitants, whereas the
proportion of establishments with a domestic spirits licence can be one for every 300 inhabitants.75
171. The above notwithstanding, Ruling C-124-2000 of 15 June 2000 of the Office of the
Procurator-General of the Republic established that the sale of spirits imported from Mexico under the
Free Trade Agreement, to which the “national treatment” principle is applicable, may not be restricted
by any law or regulation that specifies less favourable treatment than that accorded to domestic spirits.
The ruling, which is binding on municipalities, therefore concludes  that Mexican spirits can be sold
in the same establishments as those in which domestic spirits are sold, irrespective of the licence.
172. On the other hand, according to the Ministry of Natural Resources, Energy and Mines, the
domestic output of oil and gas is to be used, in the first instance, to cover the requirements of the
country and the national reserve.  Therefore every contractor must sell to the State the production
necessary to satisfy the requirements of the domestic market at a price which, at the time of purchase,
may not exceed the current prices on the international market for equivalent crudes.  Contractors may
not export any surpluses unless they have first complied with the applicable legislation.76
173. Coffee marketing conditions have not changed since the last Costa Rica review.  In order to
ensure fair treatment for the various economic ope rators participating in the coffee market, all
transactions involving domestically produced coffee are governed by the Coffee Producers,
Processors and Exporters Relations Act (Law No. 2762 of 1 July 1961).  The Costa Rican Coffee
Institute (ICAFE), which is responsible for implem enting and supervising this Act, is authorized, in
particular, to determine the price which the processors pay the producers, as well as to approve exportcontracts.
77
(iv) Incentives
(a) Overview
174. Costa Rica operates numerous promotion programmes which are applied in almost every
sector.  In general, incentives are provided through financing programmes or in the form of taxincentives.  The funds necessary to support these programmes come from the public sector budget,
from the own resources of State or private banks and from outside sources, in particular, the
Inter-American Development Bank, the Central American Bank for Economic Integration, the
Investment and Development Fund, the International Commercial Bank of China and the
Governments of Canada and the Netherlands.
                                                     
74 Regulations of the Spirits Act, Executive Decree No. 17757-G of 28 September 1987.
75 Liquor Act, Law No. 10 of 7 October 1936.
76 Oil and Gas Act, Law No. 7399 of 27 April 1994.
77 See WTO (1995), Trade Policy Review – Costa Rica , Chapter V.2 (i).Costa Rica WT/TPR/S/83
Page 69
175. Part of the support for Cost a Rican industry is channeled to enterprises through direct
incentives.  These incentives will have to stop in 2003, in accordance with Costa Rica’s WTO
commitments.  The Government has indicated that new WTO-compatible incentive mechanisms,
which will enable the country to stay competitive, are being studied.
176. There are no estimates of the global costs and benefits of the current promotion programmes,
but their wide range and numerousness are raising questions concerning their complexity andeffectiveness.  To some extent, the situation may be clarified as a result of the efforts which the
Government is making through the National Evaluation System (Sistema Nacional de Evaluación,
SINE) to evaluate the impact and efficiency of such programmes.  Likewise, the various government
agencies have been endeavouring to offer programmes on a coordinated basis with a view to reducing
their complexity.
(b) Financing programmes
177. In 1995, guidelines were established for promoting the orderly modernization of Costa Rican
industry.  Thus, negotiations were held with various State banks for the purpose of setting up the
Industrial Modernization Fund (Fondo de Modernización Industrial) whose resources are placed at
rates no lower than two points above base rate for terms which depend on the projects to be financed.A specific modernization plan for each requesting enterprise is drawn up by an independent advisor
using diagnostic methodology developed by the Ministry of the Economy, Industry and Trade
(MEIC).  MEIC trained more than 150 banking offici als in the use of this methodology, together with
more than 30 independent advisors and consultants, but as the programme was not favourably
received by the business sector it was decided to cancel it.  Initially, a fund of 500 million colones was
made available to the programme by each State bank.
178. The Fund for the Support of Small-Scale Industry in Central America (Fondo de Apoyo a la
Pequeña Industria en América Central, FAPIC), fi nanced with resources from the Central American
Bank for Economic Integration (BCIE), has also been operating since 1995.  The Fund acts as a
second-line bank channelling requests for credit through the private and public banking system.
Initially, the Fund had US$ 50 million, of which Costa Rica could use US$ 10 million.  The amount
of credit granted to each enterprise is limited to a maximum of US$ 10,000 for micro-enterprises (upto five employees) and US$ 50,000 for small enterprises (up to 40 employees).  In this latter case, the
amount may be increased up to a maximum of US$ 150,000, if the enterprises has an industrial
reorganization plan.  All FAPIC's resources were placed.
179. Similarly, small businesses can seek funds from the Programme of Support for Central
American Micro- and Small-Scale Business (PROMYPE).  The resources available belong to BCIE,which acts as a second-line bank channelling requests for credit through the private and public
banking systems; loans are limited to US$75,000 per applicant.  At the beginning of 2001, BCIE had
a total of approximately US$10 million available for lending to the end user at rates of about 23 per
cent in colones and between 12 and 13 per cent in US dollars.  As the interest rate is not fixed and
depends on the credit risk, the customer's record and other factors, the figures are approximate.
180. The total resources of the Fund of the International Commercial Bank of China (ICBC)
amount to US$10 million.  These resources were allocated to BCIE through the programme of the
International Cooperation Development Fund (ICDF) of  Chinese Taipei.  In this instance, BCIE also
acts as a second-line bank channelling resources through the public and private banking systems, non-
governmental organizations and the cooperatives.  The funds are intended for businesses with 60 or
fewer employees and the maximum loan is US$200,000 per enterprise.  All the resources have beenWT/TPR/S/83 Trade Policy Review
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placed and so far some US$5 million has been recove red.  According to the authorities, negotiations
to obtain more resources are in progress.
181. The National Programme for the Support of Micro- and Small Businesses (PRONAMYPE)
operates with resources from the Family Allowances Programme, the Inter-American Development
Bank (IDB) and the Government of the Netherlands.  PRONAMYPE acts as a second-line bank
channelling its resources through non-governmental organizations and cooperatives, although it hassometimes granted credit directly to the beneficiaries.  Between 1992 and 1995, about US$9 million
was placed, while in the year 2000 resources placed reached US$2.8 million.  PRONAMYPE is
currently operating through a trust under the auspices of the Ministry of Labour and Social Security
and the Credit Union and Community Development Bank (Banco Popular y Desarrollo Comunal).
182. At the same time, the State Bank has also set up credit programmes to promote domestic
production.  For example, the National Bank of Co sta Rica operates credit programmes specifically
for agricultural, agro-industrial and industrial activities.  Likewise, in July 2000, the Bank announced
in the opening of a development credit unit to provide loans for micro- and small businesses at
differential interest rates lower than those offered by the commercial banks.  On 30 November 2000,
the National Bank programme had a loan portfolio balance of 6,336 million colones distributedamong 3,628 loans.  During the period of implementation of the programme, more than 19,000 visits
have been made to owners in the sector.  This programme is similar to that of the Rural Credit Boards
(Juntas Rurales de Crédito) which, as at 30 November 2000, was catering for 13,370 small
agricultural producers and had a loan portfolio balance of 11,625 million colones.  The Government
has noted that, in November 2000, the rate applied to micro- and small enterprises was 22.5 per cent
and that for other sectors which did not qualify under the development banking programmes was
24 per cent, while the commercial rate was 26 per cent.
183. In October 2000, part of the debt owed by farmers to the National Bank of Costa Rica was
being aggressively collected following the expiration of the moratorium on the payment of arrears of
interest amounting to 1,000 million colones corresponding to some 3,500 loan transactions.  The
Government of Costa Rica decided to assume the debt  of those farmers who had suffered losses as a
result of natural disasters or international price fluctuations and were behind in their loan repayments.Accordingly, the contingency fund of the National Insurance Institute transferred 1,000 million
colones to the National Production Council so that it could make the corresponding payments.
184. The Central Bank of Costa Rica Organization Act (Law No. 7558 of 27 November 1995)
established a Promotion and Economic Development Department, which was to be subordinate to the
BCCR but keep its own accounts.  Under Law 7558 the Department was to absorb the resources andprogrammes of the Industrial Development Fund (Fondo para el Desarrollo Industrial, FODEIN) and
the Export Fund (Fondo para Exportaciones, FOPEX) which had been established with contributions
from international organizations and whose funds we re being lent on by the BCCR to other banks.
Since the Department was never actually set up, the BCCR confined itself to following a policy of
recovering the loans chargeable to FODEIN and FOPEX.
(c) Tax incentives
185. At present, the total, partial, regional and temporary tax exemptions applied in Costa Rica are
governed by the Regulation of Exemptions, Derogations and Exceptions Act (Law No. 7293 of
31 March 1992).  This Act makes express reference to all the exemptions granted to both domestic
production and imports.Costa Rica WT/TPR/S/83
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186. Law No. 7293 abolished all the exemptions ex isting at the time, with some exceptions
relating to international conventions and shortages of raw materials.  Under this law, medical
equipment and chemical, clinical, dental and agricu ltural research laboratories are exempt from all
taxes and surcharges.  At the same time, it exempts from all taxes and surcharges, with the exception
of import duties (DAI), raw materials, inputs and any intermediate or finished product used in the
preparation of medicaments.  Between 1995 and now , the Industrial Promotion Section of MEIC dealt
with more than 38,000 requests for tax exemption, 98 per cent of which related to medical equipment
and chemical, clinical, dental or agricultural research laboratories.
187. Some of the tax incentives provided for in Law No. 7017 of 16 December 1985 were
abolished by Law No. 7293.  However, following an appeal by a group of manufacturers, the
Constitutional Court re-established the right to tax incentives for enterprises that had signedproduction contracts with the State before their abolition.
78  The re-establishment of the incentives
was based on the acquired rights of the enterprises and they were restored for the remainder of the
term of the contracts which, by law, could not exceed 10 years.  Thus, the incentives finally ended in
2001.  In 2000, there were only five enterprises with production contracts; these were to end in
2000 for four them and in 2001 for the other.  The incentives consist of income tax credits available toenterprises that have signed a production contract.  These credits are applied to investments in
machinery and equipment which increase the production capacity of the enterprise and any equipment
which helps to improve quality.  The income tax credits granted between 1995 and October
2000 amounted to 6,933 million colones.
188. The Tourism Development Incentives Act (Law No.  6990 of 5 July 1985) establishes a series
of incentives and concessions for domestic and fore ign enterprises investing in the tourism sector.
The incentives include exemption from all taxes and surcharges applicable to the importation or localpurchase of articles indispensable to the operation and installation of hotel trade services; exemption
from all taxes and surcharges applicable to the importation or local purchase of goods indispensable to
the construction of piers and other tourist embarkation points; and exemption from all taxes, other
than customs duties, on the importation of public transport vehicles with a minimum of 15 seats, etc.
189. Enterprises awarded contracts for gas and oil exploration and development are exempted from
payment of all taxes and surcharges, general and local, on the importation of machinery, equipment,
vehicles for field work, instruments, spare parts, materials and other goods and services they need to
carry out their contracts properly.  The exemption covers the exploration period and the first 10 years
of development of the oil or gas, provided the goods  to be imported cannot be obtained in the country
under similar conditions of quality, quantity and price; in any case they must then be purchased in thecountry and benefit from the same exemption.
79
190. The General Sales Tax Act (Law No. 6826 of 8 November 1982 and its amending legislation)
establishes the exemptions granted to articles in the basic food basket, retreads and tyres for
agricultural machinery, veterinary products and agricultural inputs, defined by decree, medicines,
books, etc.  These exemptions apply to both domestic and foreign products.
191. The list of products intended for use in agriculture exempted by Executive Decree No. 21281-
MAG-H-MEIC of 12 May 1992 was amended by Executive Decree No. 28648-MAG-MEIC-H of
15 May 2000.  This decree exempts from the payment of all taxes and surcharges a list of products
which includes light agricultural machinery, irrigation and fumigation pumps, and tools.
                                                     
78 Constitutional Court, Judgement 2381-96 of 17 May 1996.
79 Regulations on the bidding system for oil and gas exploration and development contracts, Executive
Decree No. 25785 of 22 January 1997.WT/TPR/S/83 Trade Policy Review
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192. Under the Income Tax Act and its amendments  (Law No. 7092 of 21 April 1998), the State,
the municipalities, the autonomous public institutions, enterprises qualifying for the free zone regime
and cooperatives, together with mutual associations , are not subject to income tax.  However, public
enterprises, including the State banks, the Nationa l Insurance Institute and the Costa Rican Electricity
Institute, are required to pay this tax.
193. The Free Zones Act (Law No. 7210 of 23 November 1990 and its amendments) contains a
number of incentives and concessions granted by the State to enterprises that make new investments
in the country (see Section 3 (ix)).  These include, among other things, exemptions from the payment
of taxes and consular fees on imports of raw materials, finished and semi-finished products, parts and
components, packing materials and packaging and other goods necessary for the enterprise to carry
out its activities; exemption from all taxes and consular fees on imports of machinery and equipment,including accessories and spare parts, and motor vehicles necessary for operation, production,
administration, and transport; exemption from the payment of income tax for a period of ten years
from startup; and exemption from sales and consumption tax on purchases of goods and services.
194. The Tax Adjustment Act (Law No. 7543 of 14 September 1995) introduced a series of
amendments to the Income Tax Act and the General Sales Tax Act.  In addition, this Act exemptedthe Costa Rican Red Cross from all taxes, charges, surcharges and customs duties on the purchase and
sale of vehicles, equipment, materials, medicaments, fuels, lubricants, etc.
195. The Rational Use of Energy Regulation Act (Law  No. 7447 of 3 November 1994) established
exemptions for a range of domestic and imported goods used for manufacturing equipment and
generating energy in accordance with energy efficiency standards.
196. The Costa Rican Cancer Institute Establishment Act (Law No. 7765 of 17 April 1998)
exempted the Costa Rican Cancer Institute (Instituto Costarricense Contra el Cáncer) from thepayment of any taxes, duties, contributions, levies, charges or surcharges on the goods or services it
imports or purchases in the country.  These exemptions also apply to the holders of concession
contracts for the provision of cancer prevention and treatment services and to research and teaching
activities under such contracts.
197. The Tax Exemption and Price Control for Literary, Educational, Scientific, Technological,
Artistic, Sporting and Cultural Productions Act (Law No. 7874 of 23 April 1999) exempted literary,
educational, scientific, technological, artistic, sporting and cultural productions declared to be in the
public interest from sales tax, selective consumption tax, charges, surcharges, consular fees and
customs duties.
(d) Other incentives198. Since 1995, MEIC has promoted the development of Sectoral Business Committees (Comités
Empresariales Sectoriales, CES) consisting of businessmen (usually grouped together in a chamber or
association) and Ministry officials.  These committees operate under a work programme drawn up by
their members.  MEIC’s role is to act as a cataly st between the CES and the participating institutions
in accordance with a pre-established work programme.  In the last five years the graphic arts, food,metallurgical, plastics and craft industry committees have all been prominent.
199. In March 2000, a training programme financed by the National Apprenticeship Institute
(Instituto Nacional de Aprendizaje, INA) began to be developed.  This institution has allocated
500 million colones for training in the tourism, agricultural and industrial sectors.  MEIC has
promoted this programme among businessmen belonging to the CES and has worked with them to
enable them to make use of these resources and to facilitate the development of small and medium-Costa Rica WT/TPR/S/83
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sized enterprises through targeted training.  More than 150 enterprises in the metallurgical, plastics,
graphic arts and food industries are now benefiting from this programme.
200. The Cooperative Association and National Institute for Cooperative Promotion Establishment
Act (Law No. 4179 of 29 August 1968) established tax privileges for cooperatives.  These include
exemption from the payment of land tax for a period of ten years; exemption from all taxes on legal
formalities relating to the operation of the cooperative, including its formation; exemption from thepayment of customs duties on inputs and goods imported for the purpose of carrying out its activities,
provided that they are not produced domestically to an acceptable standard of quality or in sufficient
quantity; exemption from the payment of 50 per cent of the customs duties on food items and
medicines imported by consumer cooperatives, provided they are not produced domestically in
sufficient quantity; the possibility of obtaining National Insurance Institute policies at the expense ofthat institution; and the right to purchase electricity at preferential rates.
201. Other incentives include those in the form of human and technical resources granted by the
National Production Council in favour of small and medium-sized agricultural producers’
organizations, either free of charge or for consideration.  Coffee producers may request to be included
in a programme, namely the Coffee Grower’s Stability Programme (Programa Pro Estabilidad alCaficultor), which enables them to obtain the fertilizer they need without having to pay interest.  This
programme is financed by the coffee sector.
(v) Structural adjustment assistance
202. Law No. 7742 of 15 January 1998 established the Programme for the Productive
Restructuring of the Agricultural Sector (Programa de Reconversión Productiva del Sector
Agropecuario) aimed at making the agricultural sector more efficient and competitive, facilitating its
integration into the international market and achieving a fair distribution of the profits generated, withspecial attention to small and medium-sized producers.  The implementation of the programme is the
responsibility of the National Production Council (see Chapter IV.2).  This programme absorbed the
Programme of  Financing for the Small Agricultural Producer in force in 1995.
203. Outside the agricultural sector, apart from the programmes described in Section (iv) above,
there are no official programmes of assistance for individuals or firms designed to facilitatemodernization or adjustment to structural change.
(vi) Measures concerning trade-related investment and domestic content requirements
204. The only Costa Rican trade-related investment notified to the WTO ceased to be applied on
30 September 1999.
80  This measure consisted in requiring a percentage of domestic content in
exported products that must be achieved by subscribers to an export contract as an essential conditionfor receiving a tax credit certificate (see Section 3 (vi) above).
(vii) Regional assistance
205. The authorities have stated that they have not exercised the right to provide regional
assistance under paragraph 13 of Annex 2 to the Agreement on Agriculture.  Where geographically
localized emergency situations have existed, assistance has been provided as disaster relief or asassistance for structural adjustment.
                                                     
80 WTO Document G/TRIMS/N/1/CRI/Add.1 of 16 September 1999.WT/TPR/S/83 Trade Policy Review
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206. By means of the Rural Development Programme (Programa de Desarrollo Rural), the
Government of Costa Rica is endeavouring to strengthen the organizations of civil society and local
government with a view to improving their ability to work together and to participate in, coordinate
and manage rural development.  At the same time, it is seeking to support business initiatives by
improving the ability of those involved to identify, promote and implement socio-productive and rural
development projects.  The Rural Development Programme does not handle rural developmentbudgets or projects on an autonomous basis.  Its purpose, over and above that already mentioned, is to
supervise the implementation of projects which, for the most part, are financed with outside resources.
207. At the same time, enterprises that set up in relatively underdeveloped areas are granted
additional concessions under the free zone regime.
(viii) Assistance for research and development
208. In 1998, total expenditure on research development in Costa Rica amounted to US$34 million
(equivalent to 0.3 per cent of GDP) distributed as fo llows:  private sector - 44 per cent; institutions of
higher education - 38 per cent; and public sector -18 per cent.  The Ministry of Science and
Technology (MICIT) and the National Council for Scientific and Technological Research (Consejo
Nacional para Investigaciones Científicas y Tecnológicas, CONICIT) are responsible forimplementing, administering and coordinating the Government’s various science and technology
policies.
209. CONICIT provides financing through the Technological Development Fund (Fondo de
Desarrollo Tecnológica, FODETEC), whose credit facility is intended to help strengthen the
productive capacity and competitiveness of domestic enterprises, defined as those enrolled in the
Public Registry with Costa Rican partners, through technological development.  FODETEC can
cofinance up to a maximum of US$60,000, the maximum repayment period is eight years, and theinterest rate applicable is the base rate fixed by the Central Bank of Costa Rica plus 5.5 percentage
points.  Between 1990 and 1996, some 314 million colones was allocated to more than 30 domestic
enterprises in different sectors, including the medical biotechnology, chemical, microelectronics and
information technology sectors; the metallurgical  industry; forestry and the environment; and
agricultural and forest product processing.
210. In August 2000, in order to encourage investment in research, development and technological
management by trade associations and Costa Rican SMEs, the Government set up the Competitive
Grant Aid Fund (Fondo Concursable No Reembolsa ble) with resources amounting to 300 million
colones.  The Fund is a means of encouraging national technological development through projects
such as technological product and process development; patent generation; technology transfer; andthe development of human resources.  Projects submitted by chambers of commerce, business
groupings and associations of SMEs are evaluated by CONICIT and selected by the MEIC’s
Incentives Commission.  Resources are allocated to supplement the financing provided by the
applicant and may amount to as much as 100 per cent of the cost depending on the positive and
negative effects (externalities) of the project.  CONICIT administers the resources allocated.
211. The regular activities of the National Production Council include setting up, on its own
initiative or in collaboration with the Ministry of Agriculture and Livestock, agricultural product
research, training and technology transfer programmes in the field of processing and marketing (see
Chapter IV.2).  For its part, the Ministry of Ag riculture and Livestock, through its Agricultural
Research Directorate, runs agricultural improvement and sustainability programmes aimed at
technology generation, validation and innovation for the benefit of small and medium-sized
producers.Costa Rica WT/TPR/S/83
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(ix) Intellectual property rights
(a) Introduction
212. Costa Rica is a signatory to most of the intellectual property rights conventions and a member
of the World Intellectual Property Organization (WIPO).  The WTO Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS Agreement) was incorporated into Costa Rican law as
a result of the ratification of the Marrakesh Agreement.  Costa Rica protects intellectual propertyrights by means of a combination of national and international provisions.  Since 1995 the national
legislation has been amended and supplemented in order to ensure conformity with Costa Rica’s
international commitments.  The numerous amendments and new laws adopted in recent years have
been notified to the Council for TRIPS.
81
213. By strengthening its intellectual property legislation, Costa Rica hopes to encourage more
investment in the country and to stimulate research and national creative and artistic development.
The authorities consider that this legislation will supplement and reinforce Costa Rica’s policy of
attracting direct foreign investment and enable the domestic productive sector to combat
counterfeiting and piracy.  Efforts to enforce intellectual property rights are also important for
Costa Rica because they are linked with trade concessions granted by the United States under theCaribbean Basin Initiative (CBI).
214. The Industrial Property Registry and the National Copyright and Neighbouring Rights
Registry, both part of the National Registry which, in its turn, is part of the Ministry of Justice and
Pardon, are the official entities responsible for administering the corresponding intellectual property
rights.
215. As far as the protection of new varieties of plants is concerned, in June 1999 the Government
introduced a bill which was still being examined by the Legislative Assembly at the beginning of2001.
(b) Copyright and neighbouring rights
216. Details of the existing copyright and neighbouring rights legislation are given in Table III.12.
The main changes introduced by the various reforms carried out since 1995 include the protection of
works in relation to digital technology; the extension of copyright and neighbouring rights to includerental rights; the protection of programme-carrying satellite signals; and the extension of the period of
protection from 50 to 70 years after the author’s death.
217. The law protects the works of Costa Rican authors, whether or not domiciled in Costa Rica,
and of foreign authors domiciled in the country.  In Costa Rica, the works of foreign authors
domiciled abroad benefit from the protection accorded by the international conventions signed byCosta Rica.  The law does not permit the exclusive right holder to oppose the sale or importation of
originals or copies of a work lawfully placed on  the market, in any country, by the owner of the
protected work or by another person with the owner’s consent, unless those works have been altered
or changed.  News of a factual nature is not protected; however, the reproducing or retransmitting
medium must indicate the original source.
218. Neighbouring rights enjoy 70 years of protection starting from 31 December in the year of
fixation, of interpretation or performance or of broadcasting.  Phonogram and videogram producers
have the exclusive right to authorize or prohibit, among other things, the importation of copies of
                                                     
81 WTO Document IP/N/1/CRI/1 of 20 December 2000.WT/TPR/S/83 Trade Policy Review
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phonograms made without the producer’s permission ; transmission and retransmission by radio or
television; their phonograms being made available to the public whether by wire, cable, optical fibre,
radio, satellite or any other similar means of enabling members of the public to access protected
works or to receive them by telecommunication, wh erever and whenever they choose.  Likewise,
broadcasting organizations have the right to authorize or prohibit the fixation and reproduction of
their broadcasts and the retransmission, subsequent distribution and communication, to the public, oftheir television broadcasts on public premises.
219. Moreover, the Copyright and Neighbouring Righ ts Act provides for computer programmes to
be treated as literary works and therefore to be subject to protection.  In cases of copyright and
neighbouring rights, protection is granted by the mere fact of creation, irrespective of any formality or
ceremony; nevertheless, for greater security, authors may request the registration of their works,which will have only declaratory effect.
(c) Industrial property
220. Since 1995, the number of patents and other forms of industrial property registered each year
has increased.  Between 1995 and 1999 there were altogether 783 patent applications.  Of these
75 were granted and the rest rejected on various grounds including, for example, because theapplications did not satisfy patentability requirements generally relating to inventive level, novelty
and industrial application.  With respect to the patents granted during this period, approximately
32 applications were of domestic origin and 47 foreign.  The average time taken to process a patent
application was approximately 24 months.
221. In the case of industrial designs, a total of 226 applications were made during the same period
and of these 33 were granted.  The average time taken to process an industrial design application was
approximately 24 months.
222. Finally, with regard to trademarks, trade names and advertising signs, during the period
between 1995 and 1999 a total of 48,112 applications were received and 2,833 were registered.  The
average time taken to process a trademark application was approximately six months.
82
Trademarks and other distinctive signs
223. The legislation in force is set out in Table III.12.  The Trademarks and Other Distinctive
Signs Act includes new provisions on registration procedures; registration rights, obligations and
restrictions; the transfer and licensed use of trademarks; the termination of trademark registration;
well-known trademarks; collective trademarks; certification marks; advertising slogans and signs;
trade names and emblems; and geographical indications.
224. The registration of a trademark expires after ten years and can be renewed indefinitely for
successive periods.  Registration does not confer upon the owner the right to prohibit a third party
from using the mark on lawfully marked products introduced into Costa Rica or a foreign country,
unless the products, their containers or their packaging have been modified, altered or damaged and
are causing injury to the owner or successor in title.   With respect to well-known marks, the Industrial
Property Registry can, ex officio or at the request of the interested party, deny or cancel registrationand prohibit the use of a trademark or service mark that constitutes a reproduction, imitation or
interpretation of a well-known mark used for identical or similar goods.
                                                     
82 Information supplied by the Industrial Property Registry.Costa Rica WT/TPR/S/83
Page 77
Table III.12
Intellectual property right legislation in force in Costa Rica
Domestic legislation Reference/usual name
Article 47, Political Constitution of 7 November 1949 Recognition of intellectual property rights
Copyright and neighbouring rights
Law No. 4727 5 March 1971 International Convention for the Protection of Performers, Producers
of Phonograms and Broadcasting Organizations (Rome Convention,
1961)
Law No. 5682 of 5 May 1975 Universal Copyright Convention (Geneva Convention) and its two
Protocols
Law No. 6083 of 29 August 1977 Berne Convention for the Protection of Literary and Artistic Works
Law No. 6486 of 25 September 1980 Convention for the Protection of Producers of Phonograms against the
Unauthorized Reproduction of their Phonograms
Law No. 7829 of 22 September 1998 Convention relating to the Distribution of Programme-carrying
Signals Transmitted by Satellite (Brussels, 1974)
Law No. 6683 of 14 October 1982 Copyright and Neighbouring Rights Act
Executive Decree No. 24611-J of 4 September 1995, amendedby Executive Decree No. 26882-J of 20 April 1998Regulation on the Copyright and Neighbouring Rights Act
Law No. 7397 of 3 May 1994, Law N° 7686 of 6 August 1997,
and Law N° 7979 of 6 January 2000Amendments to the Copyright and Neighbouring Rights Act
Law No. 7967 of 22 December 1999 WIPO Performances and Phonograms Treaty (WPPT, 1996)
Law No. 7968 of 22 December 1999 WIPO Copyright Treaty (WCT, 1996)
Trademarks and other distinctive signs
Law No. 7484 of 28 March 1995 Paris Convention for the Protection of Industrial Property
Law No.  7634 of 3 October 1996 Lisbon Agreement on the Protection of Designations of Origin and
their International Registration
Law No. 7982 of 14 January 2000 Protocol to the Central American Convention for the Protection of
Industrial Property
Law No. 7978 of 6 January 2000 Trademarks and Other Distinctive Signs Act
Law No. 8020 of 6 September 2000 Amendment to articles 94 and 95 of the Trademarks and Other
Distinctive Signs Act, No. 7978, and permanent funding for the
publishers Editorial Costa Rica  and Editorial del Instituto
Tecnológico de Costa Rica
Law No. 8063 of 22 December 2000 Identification of the Costa Rican Banana in International Markets Act
Patents, industrial designs and utility models
Law No. 7484 of 28 March 1995 Paris Convention for the Protection of Industrial Property
Law No. 7836 of 22 October 1998 Patent Cooperation Treaty
Law No. 6887 of 25 April 1983 Patents, Industrial Designs and Utility Models Act
Executive Decree No. 15222-MIEM-J of 12 December 1983 Regulation on the Patents, Industrial Designs and Utility Models Act
Law No. 7979 of 6 January 2000 Amendment to the Patents, Industrial Designs and Utility Models Act
Integrated circuits
Law No.  7961 of 17 December 1999 Layout-Designs of Integrated Circuits Act
Undisclosed information
Law No. 7975 of 4 January 2000 Undisclosed Information Act
Protection of intellectual rights in biodiversity
Law No. 7788 of 30 April 1998 Biodiversity Act
Enforcement of intellectual property rights
Law No. 8039 of 12 October 2000 Intellectual Property Right Enforcement Procedures Act
Source: Costa Rican Government.
225. The new Trademarks and Other Distinctive Signs Act also grants protection to geographical
indications, including those for wines and spirits, as well as to homonymous designations of origin.At the same time, it establishes rules for the registration of designations of origin, the right to use
them and the cancellation of registration.
Patents, industrial designs and utility models
226. Law No. 7979, which amended the Patents, Industrial Designs and Utility Models Act
(Table III.12), introduced important reforms in the field of patent legislation, including the following:the definition of exclusions from patentability; the protection of patents without discrimination as to
the place of invention, the field of technology and whether the products were produced locally in
Costa Rica or imported; the power of the patent holder to grant licences; the establishment of theWT/TPR/S/83 Trade Policy Review
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requirements for granting compulsory licences; and the extension of the term of protection from 12 to
20 years.
227. In the case of medicaments, articles and substances with therapeutic applications, food
products, fertilizers, agricultural chemicals in general and substances or products for controlling,
treating or preventing animal or plant diseases or pests, the term of protection has been extended from
1 to 20 years.
228. The products excluded from patentability include plants and animals, as well as essentially
biological processes for their production.  The manufacture, importation and marketing of a product
may be prohibited at the request of the Ministry of Health for medicaments and articles and
substances with therapeutic applications or of the Ministry of Agriculture and Livestock for
agricultural chemicals, if after the patent has been filed it is shown that the process or product doesnot satisfy the original conditions under which it was authorized.
229. The exclusive rights conferred by the patent in clude: where the subject matter of the patent is
a product, the right to prevent third parties from the acts of making, using, offering for sale, selling or
importing that product for these purposes; and where th e subject matter of the patent is a process, the
right to prevent third parties from the act of using the process, and from the acts of using, offering forsale, selling or importing for these purposes at least the product obtained directly by that process.
However, the patent rights do not extend to acts of selling, offering for sale, using, holding in
usufruct, importing or marketing in any way a product protected by the patent or obtained by patented
process once it has been introduced into some country’s legitimate trade.
230. The granting of a patent brings with it the obl igation to exploit the patent, continuously and
steadily, in Costa Rica, so that the market is ap propriately and reasonably supplied within a period of
three years from the granting of the patent or four years from the patent application, whichever is thelonger.  Exploitation may not be interrupted for more than one year; however, it should be noted that
the legal importation of products is regarded as a form of exploitation.
231. The law permits the granting of compulsory licences in the case of dependent and public use
patents.  In the first case, if the invention claimed in a patent cannot be industrially exploited in the
country without infringing a prior patent, the Industrial Property Registry may grant a compulsorylicence to prevent the infringement of that prior patent.  Likewise, compulsory licences may be
granted if the Commission for the Promotion of Competition (Comisión para Promover la
Competencia) determines that the patent holder has engaged in anti-competitive practices (for
example, by setting excessive or discriminatory pric es for the patented products, failing to supply the
market on reasonable commercial terms or obstructing commercial or manufacturing activities).  Alicence may be granted without it being necessary for the potential beneficiary to have made efforts to
obtain authorization from the right holder and without it being for the supply of the domestic market.
232. As regards compulsory public use patents, the Government may subject the patent to
compulsory licensing, without the consent of the holder, on grounds of extreme urgency, public
interest, or national emergency or security.  However, the State must compensate the patent holder.
233. With respect to industrial designs, the amendments introduced include the extension of the
proprietary rights of the creator of the industri al design, the protection of independently created
industrial designs that are new or original, and the ex tension of the term of protection from five to ten
years.Costa Rica WT/TPR/S/83
Page 79
Integrated circuits
234. Layout-designs (topographies) of integrated  circuits are protected by Law No. 7961 of
19 January 2000.  The law only provides protection for a layout-design if it is original.  Registration
of an integrated circuit layout-design confers on the holder the right to prevent third parties from the
following acts:  reproducing, for incorporation in an integrated circuit or in any other way, the
protected layout-design in its entirety or a part thereof which satisfies the requirement of originality;and marketing, importing, offering for sale, selling or otherwise distributing the protected layout-
design, an integrated circuit incorporating such design or an article containing such a circuit.  The
exclusive rights in a registered layout-design are protected for ten years.  A compulsory licence may
be granted for a layout-design under the same conditions as those applicable to patents.
Undisclosed information235. Undisclosed information relating to commercial or industrial secrets is protected by Law
No. 7975 of 18 January 2000.  This law lays down, in particular, the scope of the protection; the
conditions for authorizing use by third parties;  the regulations concerning liability and confidentiality
in industrial and commercial relations; the protection of data submitted to obtain approval of the
marketing of pharmaceutical or agricultural chemical products; and the protection of undisclosedinformation in administrative and judicial proceedings.
Protection of intellectual rights in biodiversity
236. The Biodiversity Act, Law No. 7788 of 27 May 1998, established rules for access to the
genetic and biochemical elements of biodiversity.  Costa Rica grants protection in this area by means
of, among other things, patents, trade secrets,  su i generis community intellectual rights, copyright,
and farmers’ rights.  Protection is not granted to sequences of desoxyribonucleic acid per se; plants
and animals; non-genetically modified microorganisms; essentially biological processes for theproduction of plants or animals; natural processes or cycles in themselves; inventions essentially
derived from knowledge associated with traditional or cultural biological practices in the public
domain; and inventions which, if exploited commer cially in the form of a monopoly, could adversely
affect agricultural processes or products considered basic for maintaining the food supply and health
of the country’s inhabitants.  The Act recognizes the right of local communities and the indigenouspeoples to oppose access to their resources and the associated knowledge, on cultural, spiritual, social,
economic or other grounds.
(d) Enforcement of intellectual property rights
237. Up to the end of 2000, the Costa Rican legislation was providing only relatively limited
incentives to respect intellectual property rights, with most of the obligations being concentrated inthe field of copyright, while industrial property wa s largely ignored.  In particular, there were no
regulations on border measures; there was no uniformity as regards the final administrative authority
in intellectual property matters; nor were there any provisions that would have made it possible to
order the destruction of counterfeit goods or criminal sanctions for offences against intellectual
property rights.
238. Law No. 8039 of 12 October 2000 created an integrated framework of intellectual property
right enforcement procedures.  This legislation makes it possible to protect any intellectual property
right established in domestic law or in international conventions in force by means of precautionary
measures, border measures and administrative, civil or criminal proceedings.  It set up an
Administrative Registry Tribunal (Tribunal Registral Administrativo) under the Ministry of Justice
and Pardon to hear appeals against the acts and final decisions of all the Registries forming part of theWT/TPR/S/83 Trade Policy Review
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National Registry, including the Industrial Property Registry and the Copyright and Neighbouring
Rights Registry.  Offences against intellectual property rights are punishable with one to three years’
imprisonment.  Regulations implementing this la w should be issued before April 2001 and it is
expected to enter into force in October 2001.
239. The judicial branch does not have statistics on civil claims relating to the protection of
intellectual property rights; however, as far as the criminal law is concerned, in the province ofSan José there have been 105 complaints of violation of copyright and neighbouring rights since
1995.  Half these complaints corresponded to cases of software piracy by end users and distributors.
The rest were divided up among offences involving the copying, reproduction, sale, distribution and
storage of phonograms, films or musical compositions.  In these cases there was intervention by the
courts (warrants to enter premises and to search for and seize counterfeit goods), with uniformlypositive results.  Of the complaints received, approximately 60 per cent came to trial, while 20 per
cent were settled using alternative procedures.  Moreover, between 1995 and 2000, the National
Consumers Commission received 34 complaints concerning cases of unfair competition involving
trademarks and distinctive signs, of which 10 were resolved.
83
                                                     
83 Information supplied by the National Consumers Commission, the Statistical Section of the Judiciary
and the Criminal Investigation Department of the Judicial Investigation Service.