WORLD TRADE  
ORGANIZATION   
G/SCM/N/220/CRI 
G/SCM/N/226/CRI 
29 July 2011 
 
 (11-3918) 
Committee on Subsidies and Original:   Spanish 
Countervailing Measures   
  
 
SUBSIDIES 
 
New and Full Notification Pursuant to Article XVI:1 
of the GATT 1994 and Article 25 of the Agreement 
on Subsidies and Countervailing Measures 
 
Continuation of Extension under SCM Article 27.4 of the Transition Period for the 
Elimination of Export Subsidies Pursuant to the Procedures Contained in the 
General Council Decision in Document WT/L/691 
 
COSTA RICA 
   The following communication, dated 6 July 2011, is being circulated at the request of the delegation of Costa Rica.  
_______________ 
 
  Pursuant to the procedures agreed upon in General Council Decision WT/L/691 in respect of the continuation of the extension under Artic le 27.4 of the Agreement on Subsidies and 
Countervailing Measures and, in particular, the provisi ons of paragraphs 1(c), 1(d), 2 and 3 of that 
document, the Government of Costa Rica hereby submits this updating notification concerning the 
programmes for which the extension has been granted (see documents G/SCM/61/Add.1 to 8 
and G/SCM/62/Add.1 to 8).  
 In compliance with the standstill requirements, the programmes contained in this notification 
have not undergone any modification.  G/SCM/N/220/CRI 
G/SCM/N/226/CRI Page 2 
 
 
   
CONTENTS 
 
Page 
 
NOTIFICATION ……………………………………………………………………………………………..... 2 
ANNEXES …………………………………………………………………………………………................... 17 
EXECUTIVE DECREE NO. 35999  OF 28 A PRIL 2010  - REGULATIONS OF THE SPECIAL COMMISSION ON THE 
DEFINITION OF STRATEGIC SECTORS  …………………………………………………………………………… 17 
AGREEMENT OF 12 NOVEMBER 2010  OF THE SPECIAL COMMISSION ON THE DEFINITION OF STRATEGIC  
SECTORS , PUBLISHED IN OFFICIAL JOURNAL LA GACETA  NO. 229  OF 25 N OVEMBER 2010 ..……..…….............. 25 
 
 
NOTIFICATION 
 A. S
TANDSTILL REQUIREMENTS OF THE PROCEDURES FOR EXTENSIONS UNDER ARTICLE  27.4 
 The programmes contained in this notificati on, which have been granted extensions under 
Article 27.4 of the Agreement on Subsidies and C ountervailing Measures, have not been modified 
with respect to the requirements of document WT/L/691.  
B. T
HE DUTY-FREE ZONE REGIME  
1. Description of the subsidy 
 The Duty-Free Zone Regime is the set of in centives and benefits offered by the State to 
enterprises making new investments in Costa Rica, subject to compliance with the requirements and 
obligations laid down in Law No . 7210 and amendments thereto, a nd its implementing Regulations.  
One of the qualification criteria was the requirement that at least 75 per cent of an enterprise's 
production be exported.1  The Regulations establish the definition of "new investments in the 
country".  The establishment location of a group of enterprises operating as beneficiaries of this Regime is called a "duty-free zone", which is requ ired to be a defined area, without a resident 
population, authorized by the Executive to operate in this capacity.  2. Period of notification 
 This notification provides a description of th e Duty-Free Zone Regime corresponding to the 
calendar year 2010.  
3. Policy objective 
 The primary objective of the Law is to foster  the socio-economic development of Costa Rica 
by attracting foreign investment, encouraging dom estic investment and promoting exports.  The 
Duty-Free Zone Regime is an important economic inst rument for raising the standard of living of the 
population of Costa Rica, particularly by creating sources of employment and supporting human 
                                                      
1 As indicated in paragraph 10(d) (Action plan for the elimination of export subsidies) of this section, 
this requirement was eliminated wh en amending the Duty-Free Zone Regime Law, which came into force in 
January 2010 for new processing enterprises classi fied under the new category (f) in Article 17 of 
Law No. 7210.  G/SCM/N/220/CRI 
 G/SCM/N/226/CRI 
 Page 3 
 
 
  development, with a special focus on less-developed areas of the country.  This type of regime is 
conducive to the establishment of enterprises engage d in a wide range of operations and production 
processes which contribute to the generation of w ealth and technological know-how and increase the 
country's international competitiveness. 
 
4. Background and authority 
 Duty-Free Zone Regime Law No. 7210 of 23 November 1990 (full text attached as an 
Annex to Costa Rica's notification in document G/SCM/N/71/CRI of 5 March 2002) 
and amendments thereto.2 
 
 Regulations implementing the Duty Fr ee Zone Regime Law - Executive Decree 
No. 29606-H-COMEX of 18 June 2001 (full text attached as an Annex to Costa Rica's notification in document G/SCM/N/71/CRI of 5 March 2002) and 
amendments thereto.
3 
 
 General Customs Law No. 7557 of 20 Octobe r 1995, Section I, Chapter V (Duty-Free 
Zone Regime4) and amendments thereto.5 
                                                      
2 The amendments to Law No. 7210 of 23 November 1990 are contained in:  Law No. 7467 of 
20 December 1994, Law No. 7535 of 1 August 1995, Law No. 7638 of 30  October 1996, Law No. 4924 of 
17 September 1997 and Law No. 7830 of 22 September 1998 (full texts of this legislation are attached as Annexes to Costa Rica's notification in document G/SCM/N/71/CRI of 5 March 2002).  Law No. 8262 of 
2 May 2002 amended Article 23 of Law No. 7210 (the fu ll text of this Article is attached as an Annex to 
Costa Rica's notification in document G/SCM/N/95/CRI of 8 July 2003) and Law No. 8794 of 12 January 2010, "Amendments to the Duty-Free Zone Regime Law No. 7210 of 23 November 1990 " (the full text of this 
amendment is attached as an Annex to Costa Ri ca's notification in document G/SCM/N/211/CRI of 
12 July 2010). 
3 The amendments to Executive Decree No. 29606-H-COMEX of 18 June 2001 are contained in:  
Executive Decree No. 29962 of 22 September 2001 , Executive Decree No. 30124 of 25 January 2002, 
Executive Decree No. 30407 of 18 April 2002, Executive Decree No. 30849 of 23 October 2002 (all of which are attached as Annexes to Costa Rica's notification in  document G/SCM/N/95/CRI of 8 July 2003), Executive 
Decree No. 31585-H-COMEX of 20 October 2003, Executive Decree No. 31715-H-COMEX-MEIC of 
2 March 2004 (attached as an Annex to Costa Rica' s notification in document G/SCM/N/114/CRI of 
2 July 2004), Executive Decree No. 32232 of 16 Dece mber 2004 (attached as an Annex to Costa Rica's 
notification in document G/SCM/N/123/CRI), Execu tive Decree No. 31812-H-COMEX of 30 April 2004, 
Executive Decree No. 32804 of 30 November 2005 (attached as an Annex to Costa Rica's notification in 
document G/SCM/N/146/CRI), Executive Decree No. 33204 of 6 June 2006, Executive Decree No. 33283 of 
7 July 2006, Executive Decree No. 33291 of 20 June 2006, Executive Decree No. 33360 of 20 September 2006, Executive Decree No. 338 41-H-COMEX of 15 December 2006, Executive Decree No. 33483 of 
2 November 2006 (attached as an Annex to Costa Rica's notification in document G/SCM/N/160/CRI) and 
Executive Decree No. 34166 of 4 December 2007 (attached as an A nnex to Costa Rica's notification in 
document G/SCM/N/177/CRI/Rev.1).  The Regulations implementing the Duty-Free Zone Regime Law, 
Executive Decree No. 34739-COMEX-H of 29 August 2008, repealed Executive Decree No. 29606-H-COMEX 
(attached as an Annex to Costa Rica's notification in document G/SCM/N/186/CRI-G/SCM/N/192/CRI).  The 
latter did not amend or alter the benefits of the Du ty-Free Zone Regime.  The most recent amendment is 
contained in Executive Decree No. 36000-COMEX-H of 28 April 2010 " Amendments to the Regulations 
implementing the Duty-Free Zone Regime Law - E xecutive Decree No. 34739-H -COMEX of 29 August 2008 " 
(the full text of this amendment is attached as an Annex to Costa Rica's notification in document 
G/SCM/N/211/CRI of 12 July 2010). 
4 The parts referred to are attached as Anne xes to Costa Rica's notification in document 
G/SCM/N/71/CRI of 5 March 2002.  The full text is available for consultation in the archives of the 
Rules Division. G/SCM/N/220/CRI 
G/SCM/N/226/CRI Page 4 
 
 
   
 Regulations implementing the General Cu stoms Law, Chapter X (Duty-Free Zone 
Regime), Executive Decree No. 25270-H of 28 June 1996
6 and amendments thereto.7 
 5. Form of the subsidy 
 The subsidy is essentially an exemption from pa yment of all taxes, consular fees and duties 
and is provided in the manner set out below.   The incentives granted by this Regime are:  
 (a) Inward clearance into the duty-free z one of raw materials, manufactured and 
semi-manufactured products, co mponents and parts, packing materials and containers 
and any other goods required for the operations of the enterprise, without payment of any taxes or consular fees on their clearance
8; 
 
 (b) inward clearance into the duty-free zone  of machinery, equipment, accessories and 
spare parts, without payment of any taxes or consular fees on their importation, and exemption from all import taxes and c onsular fees on the importation of motor 
vehicles required for operating, production, administrative and transport activities; 
  (c) exemption from all taxes and consular f ees on imports of fuel, oil and lubricants 
required for the operation of such enterprises, provided that such goods are not 
produced within the country with the re quired quality, quantity and timeliness; 
  (d) exemption from all taxes relating to the e xport or re-export of goods.  This exemption 
is granted for the re-export from the duty-free zones of production machinery and 
equipment which entered under the Law; 
 
                                                                                                                                                                     
5 The amendments to the General Customs Law No. 7557 of 20 October 1995 are contained in 
Law No. 7900 of 3 August 1999 (available for consultation in the archives of the Rules Division), 
Law No. 8373 of 4 August 2003 and Law No. 8419 of 28 June 2004. 
6 The parts referred to are attached as Anne xes to Costa Rica's notification in document 
G/SCM/N/71/CRI of 5 March 2002.  The full text is available for consultation in the archives of the 
Rules Division. 
7 The amendments to the Regulations implementing the General Customs Law, Chapter X (Duty-Free 
Zone Regime), Executive Decree No. 25270-H of 28 June 1996, are contained in:  Executive Decree No. 25295 
of 17 June 1996 (available for consultation in the archives of the Rules Division), Executive Decree No. 26285 of 18 August 1997 (full text attached as an Annex to Costa Rica's notification in document G/SCM/N/71/CRI of 
5 March 2002), Executive Decree No. 26961 of 30 March 1998 (available for consultation in the archives of the 
Rules Division), Decree No. 27717 of 23 February 1999 (available for consultation in the archives of the Rules Division), Executive Decree No. 28242 of 30 September 1999 (available for consultation in the archives of the 
Rules Division), Executive Decree No. 28976 of 27 September 2000 (available for consultation in the archives 
of the Rules Division), Executive Decree No. 31667-H of 5 March 2004 (available for consultation in the 
archives of the Rules Division), Executive Decree No. 32098 of 23 September 2004 (available for consultation 
in the archives of the Rules Division), Executive Decr ee No. 33915 of 30 January 2007, and Executive Decree 
No. 35424 of 7 August 2009 (the full text of this amendm ent is attached as an Anne x to Costa Rica's notification 
in document G/SCM/N/211/CRI of 12 July 2010). 
8 Law No. 8794 of 12 January 2010, which amended the Duty-Free Zone Regime Law No. 7210 of 
23 November 2010, provides that packing, wrapping and containers and computer equipment and electronic waste and other waste materials resu lting from activities by enterprises in  the duty-free zone are exempt from 
any import tax or subsequent duty if they are intended for recycling or reuse.  G/SCM/N/220/CRI 
 G/SCM/N/226/CRI 
 Page 5 
 
 
   (e) exemption from payment of taxes on cap ital and net assets, payment of land tax and 
of the tax on the transfer of real estate; 
  (f) exemption from sales and consumption taxes on purchases of goods and services; 
 
 (g) exemption from all taxes on remittances abroad;   (h) exemption from all taxes on profits, and any other taxes for which the tax base is 
calculated in relation to gross or net earni ngs, dividends paid to shareholders, or 
revenue or sales; 
  (i) exemption from all municipal or business taxes;   (j) exemption from all taxes on imports or e xports of commercial or industrial samples; 
 
 (k) to enhance their business operations, en terprises benefiting under the Duty-Free Zone 
Regime are entitled to freely execute in foreign currency all kinds of deeds and contracts pertaining to their internationa l transactions or transactions with other 
enterprises established under the Duty-Free Zone Regime; 
 
 (l) enterprises based in relatively less-devel oped zones are entitled to a credit equivalent 
to 10 per cent of the total amount of wages a nd salaries paid the previous year;  this 
amount decreases by two percentage points per year and expires after five years; 
  (m) export-processing enterprises which, ha ving operated for four years under the 
Duty-Free Zone Regime, reinvest in Costa Rica are entitled to an additional 
exemption from payment of income tax, at  a percentage corresponding to the amount 
of the reinvestment as a proportio n of the original investment. 
  The above exemptions and concessions remain subject to fulfilment of certain specific 
requirements laid down by laws a nd regulations, and international ag reements signed and approved by 
Costa Rica. 
 
6. Beneficiaries and mechanism 
 The following types of enterprise qua lify for the Duty-Free Zone Regime: 
 
 (a) Export-processing industries which produce, process or assemble goods for export or 
re-export; 
  (b) export-trading enterprises with no production activity, which simply handle, 
repackage or redistribute non-traditional goo ds and products for export or re-export; 
 
 (c) service industries and enterprises which export services to natural or legal persons 
domiciled abroad, or which provide services to companies that are beneficiaries of the Duty-Free Zone Regime, in the latter case, provided that the services are directly related to the production processes of those companies; 
 
 (d) enterprises which manage parks wher e enterprises are to be based under the 
Duty-Free Zone Regime, provided that th e parks meet the minimum infrastructure 
and service-availability requirements laid down in the Regulations implementing the 
Law; G/SCM/N/220/CRI 
G/SCM/N/226/CRI Page 6 
 
 
   
 (e) enterprises or other entities engaged in scien tific research with a view to raising the 
technological level of the country's industr ial or agri-business activity and foreign 
trade; 
 
 (f) enterprises operating shipyards or dry or floating docks for shipbuilding, repair or 
maintenance.
9 
  Banking, financial and insurance entities base d in duty-free zones do not qualify for the 
benefits of this Regime.  Neither do natural or  legal persons engaged in  providing professional 
services qualify for Regime status.
10 
  There are several stages in the granting of Regime status:  
 (a) Any natural or legal person wishing to jo in the Duty-Free Zone Regime is required to 
submit the relevant application to the Corporation
11 (these rights and obligations are 
currently vested in the Foreign Trade Pr omotion Agency (PROCOMER), pursuant to 
Article 13(a) of Law No. 7638 of 30 October 1996), to be duly authenticated by a notary public, and to be accompanied by  detailed information on the pollution 
caused by the process and its waste and the documents requested by the Board of 
Directors of the Corporation.  All applications must comply with the relevant 
instructions issued by the Corporation; 
  (b) the Corporation examines the applica tion and information included, subject to 
provision of all the required details, and forwards an opinion to the Board of 
Directors, which is then required to decide on the matter by no later than at the 
regular session following receipt of the opinion , or at a special meeting if so agreed 
by four of its members; 
  (c) at its discretion, the Corporatio n may seek expert opinions from various 
State institutions to assist its examina tion of the enterprise's application; 
 
 (d) if the recommendation is approved, it is then ratified by the Executive by means of 
a resolution citing the details specified in  the Regulations implementing the Law. 
 
                                                      
9 Law No. 8794 of 12 January 2010 amended Law No. 7210 of 23 November 2010 on the Duty-Free 
Zone Regime and established a new category for processing industries which produce, process or assemble goods, irrespective of whether or not they export, provi ded that they meet the requirements laid down in 
Article 21 bis of the said Law, as set out in paragraph 10(d) (A ction plan for the elimination of export subsidies) 
of this section. 
10 Law No. 8794 of 12 January 2010 amended Law No. 7210 of 23 November 2010 on the Duty-Free 
Zone Regime and also established that enterprises that are engaged in the mining, exploration or extraction of 
hydrocarbons, in the production or sale of arms and ammunition containing depleted uranium or in the production or sale of any type of arms or that generate electric power (unless the power is for their own 
consumption) are not eligible for the Duty-Free Zone Regime either. 
11 "Corporation" means " Corporación de la Zona Franca de Exportaciones S.A. " (Export Duty-Free 
Zones Corporation, public limited company), pursuant to the General Customs Law, Law No. 7557 of 
20 October 1995.  G/SCM/N/220/CRI 
 G/SCM/N/226/CRI 
 Page 7 
 
 
  7. Estimated amount of the subsidy 
 As this subsidy involves exemptions from a nu mber of different taxes and consular fees, 
which vary according to the level of compliance wi th the specified requirements, the comprehensive 
information required to estimate the amount of the subsidy is not available. 
 
8. Duration of the subsidy 
 Regime benefits apply as of the date on whic h Duty-Free Regime status is granted to the 
applicant enterprise.  With regard to duration, th e main incentives of the Duty-Free Zone Regime are 
subject to a specific expiry date.  Moreover, wher e there is non-compliance with the conditions laid 
down, Regime status may be revoked by the Ministry of Foreign Trade. 
  Of the incentives described in section B.5 of th is notification, the following are subject to 
a specific expiry date:  
 - Exemption from taxes on capital and net assets and from payment of land tax for a 
period of ten years.
12 
  - Exemption from all taxes on profits and any other taxes for which the tax base is 
calculated in relation to gross or net earni ngs, dividends paid to shareholders, or 
revenue or sales
13, according to the following distinctions14: 
 
  (a) For enterprises based in "relatively more developed zones", the exemption is 
100 per cent for a period of up to eight years, and 50 per cent for the following four years; 
 
  (b) for enterprises based in "relativel y less-developed zones", the exemption is 
100 per cent for a period of up to 12 years, and 50 per cent for the following six years; 
   (c) for export-processing enterprises which, having operated for four years under 
the Regime, reinvest in Costa Rica, there may be a further exemption of 
75 per cent for up to four years, depending on the amount reinvested. 
  - Exemption from all municipal and business taxes for a period of ten years.
15 
 9. Trade effects of the subsidy
16 
 At present, 270 enterprises enjoy Duty-Free Zone status.  Between them, those firms 
generated 51.6 per cent of Costa Rica's total exports in 2010, as compared with 1991, when 
81 enterprises covered by the Regime accounted for only 9.3 per cent of total exports.  In 2010, 
roughly 1,232 different products we re exported to 119 countries under the Duty-Free Zone Regime. 
                                                      
12 See section B.5(e) of this notification. 
13 See section B.5(h) of this notification. 
14 Law No. 8794 of 12 January 2010 amended Law No. 7210 of 23 November 2010 on the Duty-Free 
Zone Regime and modified these parameters, determining a differentiated tax incentiv e for profits tax depending 
on whether or not the enterprises benefiting are based w ithin or outside the Expanded Greater Metropolitan Area 
(GAMA), as set out in paragraph 10(d) (Action plan for the elimination of export subsidies) of this section. 
15 See sections B.5(i) and (m) of this notification. 
16 Information supplied by the Foreign Trade Promotion Agency of Costa Rica (PROCOMER). G/SCM/N/220/CRI 
G/SCM/N/226/CRI Page 8 
 
 
   
 It should be noted that, in 2010, sales abroad by these enterprises amounted to 
US$4,838.6 million.  At present the Duty-Free Zone Re gime directly generates jobs for approximately 
58,033 workers. 
 
Costa Rica:  Direct jobs created by the Duty-Free Zone Regime 
 
 2008 2009 2010 
Duty-Free Zone Regime 53,120 53,000 58,033 
Source : PROCOMER. 
 
 Along with this favourable socio-economic impact, the installation of high-technology 
enterprises has been conducive to technology tran sfer and the development of a significant 
knowledge-based industry in the domestic market, pl us a specialized and highly competitive labour 
force. 
 
Costa Rica:  Total Exports and Duty-Free Zone Exports 
in US$ million  
 
 2008 2009 2010 
Duty-free zone 4,982.4 4,701.2 4,838.6 
Total exports 9,569.7 8,675.6 9,370.8  
Source : PROCOMER. 
 
10. Action plan for the elimination of export subsidies 
(a) Notification of beneficiaries 
 Regime benefits are subject to the provisi ons of Article 27.4 of the WTO Agreement on 
Subsidies and Countervailing Measures and the co rresponding extensions granted by the WTO in 
documents G/SCM/39 and WT/L/691.  Every contr act in which benefits are granted therefore 
includes a clause that makes its duration subject to WTO rules.  Accordingly, the benefits as designed 
will have effect until 31 January 2015.  In  accordance with the commitments made in 
Decision WT/L/691, Costa Rica has notified all the beneficiaries under the programme that no more 
export subsidies will be granted to processing en terprises after the end of calendar year 2015. 
 
(b) Internal procedures 
 As part of the National Development Plan (drawn up in 2006), a new strategy for attracting 
investment has been designed consistent with WT O rules.  In this respect, taking into account 
paragraph 1(e) of General Council Decision WT/L/6 91, an inter-institutional commission (Ministry of 
Finance-Ministry of Foreign Trade PROCOMER) has been established to assess any measures that 
need to be taken to provide beneficiaries with lega l certainty, fulfil the commitments undertaken and, 
at the same time, encourage higher levels of both domestic and foreign investment.  In 2008 and 2009, 
this commission, in consultation with other aut horities, began the process of drawing up proposed 
amendments to the Duty-Free Zone Law. 
  G/SCM/N/220/CRI 
 G/SCM/N/226/CRI 
 Page 9 
 
 
  (c) Legislative and regulatory changes 
 As a result of the work carried out by th e inter-institutional commission and taking into 
account the inputs received during the consultations with other bodies and organizations, a draft law 
on "Amendments to the Duty-Free Zone Regime Law No. 7210 of 23 November 1990 " was prepared 
and put before the Legislative Assembly by the Executive on 21 April 2009.  The draft was approved 
by the Legislative Assembly on 17 December 2009 and signed by the Executive on 12 January 2010.  Accordingly, Law No. 8794 of 12 January 2010, entitled " Amendments to the Duty-Free Zone Regime 
Law, No. 7210 of 23 November 1990 " came into effect on 22 January 2010 when it was published in 
Official Journal La Gaceta  No. 15 of 22 January 2010.  The full text of Law No. 8794 was included as 
an Annex to Costa Rica's notification in document G/SCM/N/211/CRI of 12 July 2010. 
  After the necessary procedures for amending the Duty-Free Zone Regime Law had been completed, in the first few months of 2010 the inter-institutional commission started work on 
preparing the Regulations implementing the Law, an d this work was completed towards the end of 
April, a few days before the new Government of the Republic took office on 8 May.  
The Implementing Regulations of the Law were si gned on 28 April 2010 and came into effect on 
15 June 2010.  The full text of the Regulati ons (Decree No. 36000-COMEX-H of 28 April 2010) was 
included as an Annex to Costa Rica's notification in document G/SCM/N/211/CRI of 12 July 2010.  
(d) Description of the amendments 
 The amendments to the Duty-Free Zone Re gime Law No. 7210 incorporate the following 
major changes:  
 Elimination of the link between incentives and export 
 
 In order to comply with the provisions of the WTO Agreement on Subsidies and 
Countervailing Measures, the amendments to the Law incorporate a new category of processing 
enterprise which is not required to export a percenta ge of production in order to be eligible for the 
Duty-Free Zone Regime.  This new category appears in Article 17(f) of the current Law, which states 
"Processing industries which produce, process or assemb le goods, irrespective of whether or not they 
export, provided that they meet the requirements laid down in Article 21 bis of this Law". 
 
 Enterprises which seek admission to the Duty -Free Zone Regime under this new category 
described above must comply with the following requirements:  
- They must be in sectors that are strategic for the country's development or are 
established outside the Expanded Greater Metropolitan Area (GAMA); 
 
- they must make new investment in Cost a Rica the nature and special features of 
which are such that it could be made in a nother country or be transferred to another 
country;  and 
 
- on the date of submitting the application for Duty-Free Zone Regime status, they must 
be totally or partly exempt from, or not subject to, payment of income tax in Costa Rica. 
 G/SCM/N/220/CRI 
G/SCM/N/226/CRI Page 10 
 
 
   A Special Commission appointed by the Executiv e for this purpose will be responsible for 
defining strategic sectors.
17  When defining a strategic sector, this Special Commission shall take into 
consideration the National Development Plan, the existing criteria governing the sectors concerned, 
and the following guidelines:  the projects are deemed  to make a substantial contribution to social 
development and create quality jobs;  the projects ma ke an effective contribution to modernizing the 
country's production structure as a result of the high technology involved;  the projects encompass research and development activities;  or the projects foster technological innovation and transfer or promote the incorporation of clean technology, in tegrated waste management, energy savings and 
efficient water management. 
 
The Special Commission, meeting in Special Session on 12 November 2010
18, agreed to 
define strategic sectors as follows:  
 Projects in relation to which the enterprise operating under the Duty-Free Zone 
Regime employs on average at least 200 wo rkers per year, duly recorded on the 
payroll, as from the date of commencem ent of productive operations, as provided for 
in the executive agreement granting regime status. 
 
 Projects carried out by an enterprise operating under the Duty-Free Zone Regime in 
any of the following sectors: 
 
- Advanced electronics; 
- advanced electronic components; 
- medical devices, equipment, implants and inputs and the highly specialized 
packing and packaging for such goods; 
- automobiles; - high-precision machined parts and components; 
- aerospace and aeronautics; 
- pharmaceutics and biotechnology; - renewable energy sources; - automation and flexible manufacturing systems; - advanced materials. 
 
 Projects in the context of which the ente rprise operating under the Duty-Free Zone 
Regime assigns at least the equivalent of 0.5 per cent of its sales to the research and development expenses of its local operations;  and 
 
 Projects in which the enterprise operating under the Duty-Free Zone Regime has at 
least one of the following certifications for its local operations: 
 
- ISO (International Organization fo r Standardization) 14001 (14004) 
or equivalent; 
- LEED (Leadership in Energy and Environmental Design) or equivalent. 
 
                                                      
17 Executive Decree No. 35999 of 28 April 2010, " Regulations of the Special Commission on the 
Definition of Strategic Sectors " (text attached as an Annex to this notification). 
18 Agreement of the Special Commissi on on the Definition of Strategic Sectors of 12 November 2010, 
published in Official Journal La Gaceta  No. 229 of 25 November 2010 (text attached as an Annex to this 
notification).  G/SCM/N/220/CRI 
 G/SCM/N/226/CRI 
 Page 11 
 
 
   Encouragement for enterprises to set up in less-developed areas 
 
 Eligible zones outside the GAMA are less-developed areas of the country so the amendments include a series of incentives intended to encourage Duty-Free Zone Regime beneficiary enterprises to 
set up in these areas and to foster their economic and social development. 
  These incentives include the following:  
- Lower investment requirements:  To be eligible for the Duty-Free Zone Regime 
within the GAMA, an enterprise must make  an initial investment in fixed assets 
amounting to US$150,000 if it wishes to set up in an industrial park and 
US$2,000,000 if it wishes to set up outside an  industrial park.  For enterprises wishing 
to set up outside the GAMA, the investment requirements are US$100,000 within an industrial park and US$50,000 outside. 
 
- Differentiated fiscal incentives:  Enterprises situated within the GAMA will pay a rate 
of six per cent (6 per cent) of their profit s for the purposes of the Income Tax Law for 
the first eight years, and fifteen per cent (15 per cent) for the following four years.  Enterprises outside the GAMA will pay zero per cent (0 per cent) of their profits for the purposes of the Income Tax Law during th e first six years, five per cent (5 per 
cent) for the next six years, and fifteen  per cent (15 per cent) for the following 
six years. 
 
- Megaprojects:  Enterprises which invest a minimum of US$10,000,000 under 
an investment plan to be carried out over a period of eight years, calculated on the basis of the book value of the assets subject  to depreciation, and which provide at 
least 100 permanent jobs throughout the pe riod in which the enterprise operates, 
as duly shown on the payroll, will be exempt  from all profits tax, and from any other 
tax for which the tax base is calculated in relation to gross or net profits, dividends 
paid to shareholders, or revenue or sales.   This exemption will be 100 per cent for 
eight years and 50 per cent for a further four  years provided that the enterprise sets up 
in a strategic sector within the GAMA, and 100 per cent for 12 years and 50 per cent 
for a further six years if the enterprise is  situated in any sector outside the GAMA.  
Likewise, if the enterprise sets up outs ide the GAMA in a strategic sector and 
provides at least 100 permanent jobs, it is also  eligible for this exemption for 12 years 
at a rate of 100 per cent and for a further six years at 50 per cent. 
 
- Encouraging poles of development:  The amendments to the Law include 
a commitment by the State to draw up ac tion plans to create the necessary services, 
infrastructure and operating conditions to en courage the establishment of enterprises 
in duty-free zones and industrial parks, the modernization of those already existing in 
poles of development outside the GAMA.  The Law specifically mentions five poles 
of development to which priority will be given:  Limón, Puntarenas, Brunca Region, 
Guanacaste and Zona Norte. 
 
 Granting of tax credits for training 
 
 Beneficiary enterprises classifi ed in the new category covered by Article 17(f) of the Law will 
have the right to a tax credit of 10 per cent for reinvestment of profits , costs incurred within or outside 
the country for training Costa Rican personnel or personnel resident in Costa Rica working for the G/SCM/N/220/CRI 
G/SCM/N/226/CRI Page 12 
 
 
  enterprise in the country, as well as for costs incurred within Costa Rica for training in micro, small 
and medium-sized enterprises which supply enterp rises covered by the Duty-Free Zone Regime. 
 
 Inclusion of criteria for strengthening links  between duty-free zone enterprises and local 
industry (production chains)  
 
 Enterprises supplying goods to enterprises established in duty-free zones may, in turn, apply 
for Duty-Free Zone Regime status if a signifi cant proportion of their total sales are to the said 
enterprises, "significant proportion" meaning at least forty per cent (40 per cent) of their total sales.  
 Supplier enterprises meeting this requirement will not be required to belong to a sector that is 
strategic for the country's development or to be lo cated in an area outside the GAMA.  They may be 
local enterprises engaged in activiti es in the country and do not ther efore have to be exempt from, 
or not subject to, income tax.  
 Sales on the domestic market 
 
 The amendments to the Law speci fy that the exemptions and benefits applicable to enterprises 
classified under the new Article 17(f) of the Law shall not be contingent in fact or in law upon export 
performance.  Such enterprises may therefore put th eir goods on sale in the domestic market, but in 
such cases all import taxes and customs procedures w ill apply.  Tariffs will only be paid on the inputs 
used for production, in conformity with international commitments. 
 
C. THE INWARD PROCESSING REGIME  
1. Description of the subsidy 
 The Inward Processing Regime is the custom s regime allowing the entry of goods into 
national customs territory with the suspension of all types of taxes, subject to lodgement of 
a guarantee deposit.  The goods must be re-exported, w ithin the time-limits laid down in the relevant 
regulations, after undergoing processing, repair, rec onstruction, installation or assembly, or after 
being incorporated in sub-assembli es, machinery, transport equipmen t in general or appliances with 
a higher degree of technological or functional comp lexity, or after being used for other similar 
purposes, under the conditions laid down in the regu lations or provisions stipulated for this purpose 
by the competent administrative authority. 
  Applications for a transition period for th e Inward Processing Regime refer solely to 
exemptions from import duties and direct and indirect  taxes that meet one of  the conditions laid down 
in paragraphs (e), (g), (h) or (i) of Annex I to the Agreement on Subsidies and Countervailing 
Measures. 
 
2. Period of notification 
 This notification provides a description of the Inward Processing Regime corresponding to 
the calendar year 2010.  3. Policy objective 
 The Inward Processing Regime is designed to  promote production, employment and foreign 
and domestic investment, which inevitably cont ributes to an increase in exports and domestic 
consumption.  The conjunction of all these aspects  helps to achieve national development objectives,  G/SCM/N/220/CRI 
 G/SCM/N/226/CRI 
 Page 13 
 
 
  such as raising the standard of living of th e population, increasing in come levels, reducing 
unemployment and increasing the country's productivity and ability to compete internationally.  
4. Background and authority 
 General Customs Law, Law No. 7557 of 20 October 1995, Chapter VI (Processing 
Regimes)
19 and amendments thereto.20 
 
 Regulations implementing the General Customs Law, Chapter XIII (Inward 
Processing Regime), Executive Decree No. 25270-H of 28 June 199621 and 
amendments thereto.22 
 
 Regulations on the Inward Processing and Drawback Regimes, Executive Decree 
No. 26285-H-COMEX of 19 August 1997 (the fu ll text is attached as an Annex to 
Costa Rica's notification in document G/SCM/N/71/CRI of 5 March 2002), and amendments thereto.
23 
 
5. Form of the subsidy 
 The Inward Processing Regime a llows the entry of goods into national customs territory with 
the suspension of all types of taxes, subject to l odgement of a guarantee deposit.  The goods must be 
re-exported, within the time-limits laid down in the relevant regulations, after undergoing processing, 
repair, reconstruction, installation or assembly, or  after being incorporated in sub-assemblies, 
machinery, transport equipment in general or a ppliances with a higher degree of technological or 
functional complexity, or after being used for ot her similar purposes, under the conditions laid down 
in the regulations or provisions stipulated for this  purpose by the competent administrative authority. 
 
                                                      
19 The parts referred to are attached as Anne xes to Costa Rica's notification in document 
G/SCM/N/71/CRI of 5 March 2002.  The full text is available for consultation in the archives of the 
Rules Division. 
20 See footnote 4. 
21 The parts referred to are attached as Anne xes to Costa Rica's notification in document 
G/SCM/N/71/CRI of 5 March 2002.  The full text is available for consultation in the archives of the 
Rules Division. 
22 See footnote 6. 
23 The amendments to the Regulations implementing the Inward Processing and Drawback Regimes, 
Executive Decree No. 26285-H-COMEX of 19 August 1997, are contained in:  Executive Decree No. 27329 of 26 August 1998 and Executive Decree No. 29055 of 31 October 2000 (the full texts are attached as Annexes to 
Costa Rica's notification in document G/SCM/N/71/CRI of 5 March 2002);  Executive Decree No. 29286 of 
30 January 2001;  Executive Decree No. 29607 of 18 June 2001;  Executive Decree No. 30125 of 25 January 2002;  Executive Decree No. 31848 of 25  May 2004;  Executive Decree No. 32982-H-COMEX of 
10 March 2006 (the full text of this amendment is attached as an Annex to Costa Rica's notification in document 
G/SCM/N/146/CRI);  Executive Decree No. 34165 of 4 December 2007 (the full text of this amendment is 
attached as an Annex to Costa Rica's notification in  document G/SCM/N/177/CRI/Rev.1);  Executive Decree 
No. 34738-COMEX-H of 29 August 2008 (the full text of this amendment is attached as an Annex to 
Costa Rica's notification in document G/SCM/N/21 1/CRI of 12 July 2010) ;  and Executive Decree 
No. 35423-COMEX-H of 7 August 2009 (the full text of this amendment is attached as an Annex to 
Costa Rica's notification in document G/SCM/N/211/CRI of 12 July 2010). G/SCM/N/220/CRI 
G/SCM/N/226/CRI Page 14 
 
 
  6. Beneficiaries and mechanism 
 To be eligible for the Regime, the enterpri se must choose one of the options available: 
 
(a) 100 per cent re-export option:  enterpri ses choosing this option may not sell their 
products on the domestic market; 
 
(b) re-export and domestic sale option:  under this option enterprises may sell the goods 
on the domestic market or simply re-export them. 
 
 Enterprises operating under the "domestic sale" option are required to pay the full tax payable 
on the definitive importation of the goods.  Simila rly, at the time of inward clearance of machinery 
and equipment under the Regime, they are require d to pay the proportion of tax corresponding to the 
percentage of sales on the domestic market in re lation to the total sales of the enterprise. 
 
 Obligations for Regime beneficiaries include the following:  to submit reports on all their 
operations to PROCOMER's Manage ment Unit;  to keep a log of operations carried out under the 
Regime;  prior to commencing operations, to ap ply to the Directorate-General of Customs for 
permission to operate as a Customs Service Auxiliary ;  to keep goods entering under the Regime in 
authorized premises or plants;  to keep a separat e stock control system and accounting records for 
operations carried out under the Regime;  to comp ly with customs legislation requirements, etc. 
 
7. Estimated amount of the subsidy 
 The information required to estimate the amount of the subsidy granted under this Regime is 
not available.  8. Duration of the subsidy 
 Regime benefits apply as from the date of i ssue of the authorization to commence activities 
under the Inward Processing Regime.  Except in the event of the revocation of the Regime by the 
Ministry of Foreign Trade or relinquishment of Regime status by the enterprise covered by the 
Regime, the benefits granted by this Re gime continue for an indefinite term. 
 
 However, Regime benefits are likewise subj ect to the provisions of Article 27.4 of the 
WTO Agreement on Subsidies and Countervailing Measures and the corresponding extensions 
granted by the WTO in documents G/SCM/39 and WT/L/691.  As indicated in section (a) of the Action plan for the elimination of export subsid ies, all of the beneficiaries under the Inward 
Processing Regime have been notified that benefits  under the Regime deemed to be export subsidies 
will remain in effect until 31 December 2015. 
 9. Trade effects of the subsidy
24 
 At present, there are 85 active enterprises be nefiting under the Inward Processing Regime.  
In 2010, this Regime provided employment for about 9,991 people.  Some 134 different products 
were exported under this Regime to 40 countries in 2010. 
 
                                                      
24 See footnote 11.  G/SCM/N/220/CRI 
 G/SCM/N/226/CRI 
 Page 15 
 
 
  Costa Rica:  Direct jobs created by the Inward Processing Regime 
 
 2008 2009 2010 
Inward processing 12,375 8,727 9,991 
Source : PROCOMER.    
 
 The main destinations for exports under this  Regime include the United States of America, 
Panama and Nicaragua, which account for 37.3 per cen t, 12.7 per cent and 11.1 per cent, respectively. 
  It should be noted that a considerable proportio n of the firms operating under this Regime are 
located in areas with little urban development a nd accordingly represent a very significant source of 
employment for the area. 
 
Costa Rica:  Total Exports a nd Inward Processing Exports 
in US$ million 
 
 2008 2009 2010 
Inward processing   360.9   245.4 178.6 
Total exports 9,569.7 8,675.6 9,370.8  
 
Source : PROCOMER 
 
10. Action plan for the elimination of export subsidies 
(a) Notification of beneficiaries 
 In accordance with the commitm ents made in Decision WT/L/691, Costa Rica notified all the 
beneficiaries under the programme, by means of individual notifications, that no more export 
subsidies would be granted after the end of calendar year 2015.  
(b) Internal procedures 
 As part of the National Development Plan (drawn up in 2006), a new strategy for attracting 
investment has been designed in accordance with WTO rules.  In th is respect, taking into account 
paragraph 1(e) of General Council Decision WT/L/6 91, an inter-institutional commission (Ministry of 
Finance-Ministry of Foreign Trade-PROCOMER) has been established to assess any measures that 
need to be taken to provide beneficiaries with lega l certainty, fulfil the commitments undertaken and, 
at the same time, encourage higher levels of both domestic and foreign investment.  In 2008 and 2009, 
this commission, in consultation with other au thorities, begun the process of drawing up proposed 
amendments to the Duty-Free Zone Law, as indicated in the Action plan for the elimination of export subsidies under the Duty-Free Z one Regime, attached hereto. 
  Having finished its work on the amendmen ts to the Duty-Free Zone Regime, the 
inter-institutional commission is focussing its effort s on establishing which provisions of the Inward 
Processing Regime need to be amended.  Once th is process has been completed, the corresponding 
amendments can begin to be prepared and implemented.  G/SCM/N/220/CRI 
G/SCM/N/226/CRI Page 16 
 
 
  (c) Legislative and regulatory changes 
 Over the next few months, the inter-ins titutional commission will have to assess the 
legislative and regulatory changes it deems necessary to amend the Inward Processing Regime.  Some 
of the possibilities include amending Chapter VI (Processing Regimes) of the General Customs Law 
(Law No. 7557 of 20 October 1995), Chapter XIII (Inward Processing Regime) of the Regulations 
implementing the General Customs Law (Executive Decree No. 25270-H of 28 June 1996), and the 
Regulations implementing the Inward Processi ng and Drawback Regimes (Executive Decree 
No. 26285-H-COMEX of 19 August 1997).   G/SCM/N/220/CRI 
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 Page 17 
 
 
  ANNEXES 
 
Regulations of the Special Commission on the Definition of Strategic Sectors 
 
No. 35999-COMEX-H-MIDEPLAN 
 
THE PRESIDENT OF THE REPUBLIC, 
 
THE ACTING MINISTER OF FOREIGN TRADE, 
 
THE ACTING MINISTER OF FINANCE AND 
 
THE MINISTER OF NATIONAL PLANNING AND ECONOMIC POLICY 
 
 Pursuant to Article 50, Article 140(3) and ( 18) and Article 146 of the Political Constitution;  
Article 25.1 and Article 28.2(b) of the General Public  Administration Law;  Article 2 and Article 8(a) 
of Law No. 7638 of 30 October 1996 establishing th e Ministry of Foreign Trade and the Foreign 
Trade Promotion Agency of Costa Rica;   and subparagraph (a) of Article 21 bis of Law No. 7210 of 
23 November 1990 on the Duty-Free Zone Regime;  and  
WHEREAS: 
 I. It is essential, in the context of the ex isting socio-economic development model of the 
Costa Rican State, to attract foreign investment , encourage domestic investment and modernize the 
country's production structure; 
 
II. With a view to achieving the objectives set fort h in the preceding recital clause, the Duty-Free 
Zone Regime Law has been amended and a special commission on the definition of strategic sectors that promote the country's social and economi c development has been established pursuant to 
subparagraph (a) of Article 21 bis of the said Law; 
 
III. If the amendments to Law No. 7210 of 23 N ovember 1990 on the Duty-Free Zone Regime are 
be properly implemented, a special commission must be established to define the strategic sectors specified in subparagraph (a) of Article 21 bis of the Law;  the operations of this commission and the 
parameters to be taken into consideration when classifying a sector as strategic also need to be regulated; 
 
 Therefore,  
HEREBY DECREE THE FOLLOWING: 
 
REGULATIONS OF THE SPECIAL COMMISSION ON THE DEFINITION 
OF STRATEGIC SECTORS 
 
CHAPTER I 
 
Special Commission on the Definition of Strategic Sectors 
 
Article 1 - Special Commission on the Definition of Strategic Sectors   The Special Commission on the Definition of Strategic Sectors (hereinafter the Commission), which will involve the participation of both the pub lic and private sectors, is hereby established as the G/SCM/N/220/CRI 
G/SCM/N/226/CRI Page 18 
 
 
  body responsible for defining strategic sectors in accordance with subparagr aph (a) of Article 21 bis 
of the Duty-Free Zone Regime Law.  Article 2 - Parameters for the definition of strategic sectors 
 
 When defining the strategic sectors, the Co mmission shall take into consideration the 
National Development Plan and the existing crite ria governing the representatives of the sectors 
involved.  
 The Commission shall also take at least one of the following guidelines into consideration 
when establishing the strategic sectors:  
(a) The projects make a substantial contributi on to social development and create quality 
jobs; 
 
(b) the projects make an effective contribu tion to modernizing the country's production 
structure as a result of the advanced technology involved; 
 
(c) the projects encompass research and development activities; 
 
(d) the projects foster technological innovation and transfer; 
 
(e) the projects promote the incorporation of clean technology, integrated waste 
management, energy savings and efficient water management. 
 
 To this end, the Commission shall develop a methodology for selecting the strategic sectors 
which distinguishes between those within a nd outside the Expanded Greater Metropolitan 
Area (GAMA) and those that encourage productive chains, where applicable.  In accordance with 
Article 20(g) of the Duty-Free Zone Regime La w, the Expanded Greater Metropolitan Area (GAMA) 
shall mean the Greater Metropolitan Area defined in the Urban Development Plan, together with the 
following cantons:  Grecia, excluding the Rio Cuarto district;  Valverde Vega;  Naranjo;  Palmares;  
and San Ramón, excluding the districts of Peñas Blancas, Zapotal, Piedades Norte, Piedades Sur and 
Ángeles.   The sectors defined as strategic shall retain this status for a minimum of 12 years, renewable subject to an assessment by the Commission.  This period of validity shall be calculated as from the 
date of publication in the Official Journal La Gaceta  of the Commission decision classifying a sector 
as strategic.  Once an enterprise engaged in activities within a strategic sector is granted 
Regime status, it shall enjoy the related incentives fo r the period specified in  the Law even in the 
event of the sector ceasing to be considered strategic.  Article 3 - Functions 
 
 The main functions of the Commission are as follows:  
(a) To define the strategic sectors, in acco rdance with subparagraph (a) of Article 21 bis 
of the Duty-Free Zone Regime Law and Article 2 of these Regulations; 
 
(b) at its meetings, address issues put  forward by bodies represented within the 
Commission related to the inclusion of a particular sector in the strategic sectors and its classification as such, in accordance w ith the parameters set out in these 
Regulations;  G/SCM/N/220/CRI 
 G/SCM/N/226/CRI 
 Page 19 
 
 
   
(c) request the opinion of interested sectors prior to determining whether a sector is 
strategic, so that their views are taken into consideration by, without being binding 
on, the Commission; 
 
(d) maintain ongoing coordina tion with bodies and organizations in the interested sectors 
to encourage their involvement in the definition of strategic sectors. 
 Article 4 - Review of strategic sectors 
 
 The Commission may include new sectors at the specific request of its members or interested third parties.  To this end, a written proposal must be submitted to the Technical Secretariat, 
accompanied by the respective supporting documentation.  
CHAPTER II 
 
Composition and organization of the Commission 
 Article 5 - Composition of the Commission  
 The Commission shall comprise a regular represen tative and a single alternate for each of the 
following bodies and organizations:  
(a) The Minister or Vice-Minister of Foreign Trade, or his or her representative; 
 
(b) the Minister or Vice-Minister of Finance, or his or her representative; 
 
(c) the Minister or Vice-Minister of Nationa l Planning and Economic Policy, or his or her 
representative; 
 
(d) a representative of the National Centre  for High Technology (CeNAT), appointed 
with the agreement of the National Council of Rectors (CONARE); 
 
(e) a representative of the production sector, to be elected by the Costa Rican 
Development Initiatives Coalition (CINDE), the Costa Rican Association of Duty-Free Zone Enterprises (AZOFRAS), th e Costa Rican Chamber of Exporters and 
the Costa Rican Chamber of Industry. 
  Members of the Commission shall exercise their functions ad honorem  and consequently 
shall receive neither compensation nor a per diem allowance for their participation. 
 Article 6 - Appointment of the representative of the production sector 
 
 The representative of the production sector shall be elected by the Costa Rican Association of 
Duty-Free Zone Enterprises (AZOFRAS), the Costa Rican Development Initiatives Coalition 
(CINDE), the Costa Rican Chamber of Exporters and the Costa Rican Chamber of Industry.  To this 
end, each of the said organizations shall nominate one candidate to be the regular representative and 
one to be the alternate;  candi dates are not required to be members of these organizations.  
The representative shall be elected by the said bodies by simple majority.  This election shall permit 
the appointment of the regular member and his or he r alternate, who shall both serve a two-year term 
of office as from 8 May 2010, renewable on an  ongoing basis at the written request of the 
representatives of the production sector at  the end of the period in question. G/SCM/N/220/CRI 
G/SCM/N/226/CRI Page 20 
 
 
   
 The said organizations shall notify the General Coordinator of the Commission formally in writing of the agreement to appoint the representative of the production sector and his or her alternate. 
 
 The representative of the production sector and hi s or her alternate shall be appointed by 
8 May of the year in question at the latest.  Their terms of office shall be two years as of that date.  If the organizations have not attested the appoint ment of the new production sector representative by 
that date, the appointments of the existing regular member and alternate shall be understood to be 
extended until such time as the organizations notify the new appointments. 
 
 In the event of the organizations failing to reach  an agreement with regard to the appointment 
of their representative, the members of the Execu tive represented within the Commission shall request 
a shortlist of three candidates from each and, on the b asis of the names received  within thirty calendar 
days of the date of the request, shall appoint a regular representative of the production sector and 
an alternate. 
  In the event of the representative of the produc tion sector resigning or being dismissed by the 
respective organizations by simple majority, the la tter shall notify the appointment of a replacement 
within a period of no longer than one month as of the dismissal or acceptance of the resignation.  This 
appointment shall remain in effect for the remainder of the respective period. 
 
Article 7 - Alternates   All bodies and organizations making up th e Commission shall appoint a regular 
representative and a single alternate, who shall act on behalf of the former in his or her absence.  
In the event of a regular member being unable to a ttend and the alternate being present, the latter shall 
notify this fact to the General Coordinator at the beginning of the meeting.   Alternates may attend meetings should they see f it, in which case they shall have the right to 
speak but not to vote.  
Article 8 - Duties and obligations 
  Commission members shall have the following duties and obligations:  
(a) To speak and to vote at Commission meetings; 
 
(b) to review Commission minutes and documentation; 
 
(c) to respect the right of the representatives appointed by the bodies and organizations 
comprising the Commission to participate in any item on a Commission meeting agenda; 
 
(d) to attend the sessions to which they are convened; 
 
(e) to take part in discussions and decision- making in an objective and impartial manner; 
 
(f) to respect the right of each appointed representative to express his or her opinion on 
any issue related to Commission business and to have this opinion recorded in the minutes; 
  G/SCM/N/220/CRI 
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 Page 21 
 
 
  (g) to forge the agreements necessary to achieve Commission objectives and to respect 
and abide by the agreements reached by the Commission; 
 
(h) to represent the Commission at meetings or specific events where this task is 
entrusted to them by simple majority; 
 
(i) to provide the Technical Secretariat wi th the information required by the Commission 
by the established deadline to  ensure that all the necessary information is available 
prior to meetings; 
 
(j) by simple majority, to invite and conve ne to Commission meetings representatives of 
other public or private bodies, institutions, organizations and enterprises, the activities 
of which fall within the Commission's spheres of competence, where appropriate, in order to analyse certain specific elements; 
 
(k) to create, by simple majority and with a view to achieving objectives, ad hoc working 
commissions responsible for addressing or  analysing specific issues, with the 
possibility of incorporating public- or private-sector specialists in the field in question; 
 
(l) to appoint a Secretary from among the Commission members to draw up Commission 
meeting minutes. 
 Article 9 - Organization  
 The following bodies shall ensure the proper functioning of the Commission: 
 
(a) The General Coordinator of the Commission; 
 
(b)  the Technical Support Secretariat. 
 
Article 10 - Resources 
  For the Commission to be able to discharge its responsibilities, it shall have recourse to the 
existing operational and administrative capabilities as well as to the budgetary and human resources 
available to the bodies which comprise it. 
 
CHAPTER III 
 
Coordination and meetings 
 Article 11 - Coordination 
 
 The Commission shall be chaired by the Gene ral Coordinator, a position entrusted to the 
Minister of Foreign Trade or his or her represen tative, who shall be responsible for coordinating 
Commission meetings.  G/SCM/N/220/CRI 
G/SCM/N/226/CRI Page 22 
 
 
   The functions of the General Coordinator are as follows: 
 
(a) To convene regular and special Commission sessions.  At least one regular session 
shall be convened every six months.  A re gular session shall also be convened within 
three months of the submission of a request for the inclusion of a new strategic sector; 
 
(b) to define the agenda of issues to be addressed at each meeting; 
 
(c) to prepare, in conjunction with the Technical Secretariat, the minutes of the meetings 
in which the issues addressed and agreements reached are recorded; 
 
(d) to chair the meetings convened, lead and follow the order of the discussions and 
adjourn or close the meetings, as appropriate; 
 
(e) to take any measures necessary to en sure implementation of the agreements; 
 
(f) to ensure that the participating bodies  and organizations provide the Technical 
Support Secretariat with the required info rmation for each meeting and ensure the 
corresponding follow-up; 
 
(g) any other function that is entrusted to him or her under these Regulations or by the 
Commission in plenary session or that serv es to comply with Commission objectives 
and purposes. 
 Article 12 - Quorum 
 
 For Commission meetings to be valid, a quorum corresponding to the simple majority of the 
bodies and organizations that comprise it must be re ached.  If the quorum is not reached by the time 
specified in the meeting notice, the Commissi on shall be validly reconvened for a second session 
twenty-four hours after the first session convened.  
Article 13 - Notices of meetings 
  Notices of regular and special sessions shall be  issued in writing, using electronic means in 
the first instance;  however, when circumstances so warrant, both the notice of the meeting and the 
related documentation shall be se nt by fax or delivered to the headquarters of the corresponding 
members on the working day following the date of the notice. 
  Regular sessions shall be convened with ten working days' advance notice and special 
sessions shall be convened with five working days' advance notice.  Notices of both types of meeting 
shall be accompanied by the proposed agenda, th e monitoring report on pending issues and any other 
relevant documents. 
 
 The General Coordinator shall convene special sessions whenever so requested by three or 
more Commission members.  Article 14 - Nature of Commission meetings 
 
 Commission meetings shall always be private;   however, the Commission may, by simple 
majority of the members present, permit attendance by representatives of other public or private bodies, institutions, organizations or enterprises if  their work is related to measures, activities, 
initiatives, plans and projects which could assist the Commission in the conduct of its business.  G/SCM/N/220/CRI 
 G/SCM/N/226/CRI 
 Page 23 
 
 
   
Article 15 - Attendance   A record of attendance shall be kept for each  Commission meeting on the basis of the notices 
of meetings sent by the General Coordinator.  This record shall be signed by all attendees. 
 Article 16 - Minutes   The Technical Support Secretariat shall draw  up the minutes of each meeting.  These shall 
contain a list of attendees and the body or organiza tion that they represent and state the place, date, 
time and length of the meeting, the main points di scussed in accordance with the approved agenda 
and, if applicable, the conten ts of the agreements reached. 
  The signed minutes shall be available to the other Commission members for consultation at 
the headquarters of the Technical Support Secretariat. 
  Matters not covered by this Ch apter shall be governed by the provisions on collegial bodies in 
the General Public Administration Law, where ap propriate.  Minutes shall be sent to Commission 
members using electronic means no later than five  working days after the corresponding meeting. 
 
CHAPTER IV 
 
Technical Support Secretariat 
 Article 17 - Technical Support Secretariat 
 
 The functions of the Commission's Technical S ecretariat are carried out by the Investment 
and Cooperation Directorate of the Ministry of Fore ign Trade.  The Secretariat is responsible for 
supporting the technical analysis of proposals re lating to strategic sectors, implementing the 
agreements reached by the Commission and f acilitating the administrative work of the 
General Coordinator. 
 
Article 18 - Functions   The Technical Support Secretariat shall have the following functions: 
 
(a) Support the technical analysis of proposals received; 
 
(b) communicate notices of Commission meetings; 
 
(c) for each meeting, draw up an agenda of  the issues to be addressed and prepare the 
respective minutes; 
 
(d) keep a register of attendance at Commission meetings; 
 
(e) participate in Commission meetings with the right to speak but not to vote; 
 
(f) request and ensure that the bodies and orga nizations furnish the information required 
for each meeting; 
 
(g) coordinate the receipt of the information requested of Commission members for each 
meeting; G/SCM/N/220/CRI 
G/SCM/N/226/CRI Page 24 
 
 
   
(h) compile, organize and archive the minutes and documentation relating to Commission 
work; 
 
(i) support the work of the General Coordina tor in relation to the implementation of 
agreements; 
 
(j) provide the Commission with administrative and logistical support. 
 
Article 19 - Cooperation 
  The bodies and organizations represented within the Commission  shall work in conjunction 
with the Technical Support Secretariat and shall participate, in accordance  with their respective 
spheres of competence, in the sub-commissions  or working parties established within the 
Commission. 
 Article 20 - These provisions shall take effect on their date of publication  TRANSITIONAL PROVISION I - The Costa Rican A ssociation of Duty-Free Zone Enterprises 
(AZOFRAS), the Costa Rican Development Initiativ es Coalition (CINDE), the Costa Rican Chamber 
of Exporters and the Costa Rican Chamber of Indus try shall appoint the first representative of the 
production sector and his or her alternate no late r than one calendar month as of the date of 
publication of these Regulations.  This appointme nt shall remain in effect until 8 May 2012. 
 TRANSITIONAL PROVISION II - The Commission shall, at its first meetings, determine the 
methodology that will be applied to de fine the strategic sectors, as pr ovided for in Article 2.3 of these 
Regulations.  Done at the Office of the President of the Republic , San José, on the twenty-eighth day of April of 
the year two thousand and ten.   G/SCM/N/220/CRI 
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 Page 25 
 
 
   
OFFICIAL JOURNAL LA GACETA  NO. 229 OF 25 NOVEMBER 2010 
 
SPECIAL COMMISSION ON THE DEFINITION  
OF STRATEGIC SECTORS 
  The Special Commission on the Definition of Strategic Sectors, meeting in special session at eleven o'clock on the twelfth day of November of the year two thousand and ten, adopted the following agreement: 
 
Whereas : 
 I. It is essential, in the context of the exis ting Costa Rican socio-econom ic development model, 
to attract foreign investment, encourage domestic investment and modernize the country's production 
structure in sectors classified as strategic; 
 II. To achieve this objective, Law No. 7210 of 23 November 2010 on the Duty-Free Zone Regime and its Implementing Regul ations were amended and a new category of enterprise operating 
under this Regime was included in Article 17(f) of this Law;  
III. The said category encompasses processing i ndustries which produce, process or assemble 
goods, irrespective of whether or not they export, provided that they meet the requirements laid down in Article 21 bis of this Law; 
 IV. In accordance with the amendments introduced , one of the requirements of subparagraph (a) 
of Article 21 bis stipulates that, for an enterprise b ased in the Expanded Greater Metropolitan 
Area (GAMA) to be classified in this new category, the project or activity in which it is engaged must 
be in a sector that is strategic to the country's development.  Furthermore, enterprises that set up 
outside the GAMA and are engaged in  an activity in a sector defined as strategic could be eligible for 
greater incentives;  
V. The Special Commission on the Definition of Strategic Sectors is the body responsible for 
defining the strategic sectors, in accordance with the aforementioned subparagraph (a) of 
Article 21 bis; 
 VI. In accordance with the said Article, the Special  Commission must, when defining the strategic 
sectors, take into consideration the National De velopment Plan, the existing criteria governing the 
sectors concerned, and the following guidelines:  th e projects are deemed to make a substantial 
contribution to social development and create qu ality jobs;  the projects make an effective 
contribution to modernizing the country's production structure as a result of the advanced technology 
involved;  the projects encompass research and development activities;  or the projects foster technological innovation and transfer or promote the incorporation of clean technology, integrated 
waste management, energy savings and efficient water management; 
 VII. For the purpose of defining the strategic sect ors listed hereunder, the following elements have 
been taken into consideration:  
(a) The existing National Development Pl an and the project "Strategy for the 
21
st Century:  Knowledge and innovation in Costa Rica by 2050"; 
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G/SCM/N/226/CRI Page 26 
 
 
  (b) the fact that the legislator considered it appropriate to restrict Duty-Free Zone Regime 
benefits under the new category created pursuant to Article 17(f) of the said Law to enterprises in sectors classified as strategic to the country's development when they 
are based within the GAMA, and to grant th em greater incentives when they are based 
outside the GAMA.  This was due to the imp lications of the elimination of the export 
requirement contained in the said subparagr aph, from the point of view both of its 
fiscal impact and of the competition that it could generate in  relation to other 
enterprises that are engaged in similar pr oductive activities but do not enjoy benefits 
under the said Regime; 
 
(c) the characteristics of processing enterprises that currently operate under the Duty-Free 
Zone Regime in respect of, inter alia :  investment level;  number of jobs created;  
productive chains with local enterprises;  human resources management;  human 
resource profile;  investment in research a nd development;  location within or outside 
the Expanded Greater Metropolitan Area;  and sales; 
 
(d) parameters established by international organizations and other States for defining 
strategic sectors; 
 
(e) international rules and standa rds on environmental management; 
 
(f) the comments and observations received in the context of the public consultation 
notified in Supplement No. 123 to Official Journal La Gaceta  No. 205 of 
22 October 2010. 
 
 On the basis of the above considerations , the Special Commission on the Definition of 
Strategic Sectors:  
HEREBY DECIDES AS FOLLOWS: 
 I. Pursuant to subpara graph (a) of Article 21 bis of the Duty-Free Zone Regime Law and 
amendments thereto, the following are defined as strategic sectors: 
 
1. Projects in relation to which the ente rprise operating under the Regime employs on 
average at least 200 workers per year, duly recorded on the payroll, as from the date 
of commencement of productive operations, as provided for in the executive 
agreement granting Regime status. 
 
2. Projects carried out by an enterprise operating under the Regime in any of the 
following sectors: 
 
(a) Advanced electronics (for example computer and printing equipment, 
microprocessors, communication equipment, integrated circuits, cathode ray 
tubes, advanced connectors, digital sound and video equipment); 
 
(b) advanced electronic components; 
 
(c) medical (including orthopaedic, orthodontic, dentistry and optometric) 
devices, equipment, implants and inputs  and the highly specialized packing 
and packaging for such goods; 
 
(d) automobiles (devices and inputs);  G/SCM/N/220/CRI 
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 Page 27 
 
 
   
(e) high-precision machined parts and components; 
 
(f) aerospace and aeronautics; 
 
(g) pharmaceutics and biotechnology; 
 
(h) renewable energy sources (for example photovoltaic/solar cells, polymer or 
advanced-material batteries, fuel cells, parts and components of eolic and/or 
hydroelectric turbines); 
 
(i) automation and flexible manufacturing systems (for example computerized 
process control equipment, process instrumentation, robotic equipment, computer numerical control (CNC) mechanized equipment); 
 
(j) advanced materials (for example polymers or biopolymers, superconductors, 
fine or advanced ceramics, high-resistance compounds, pigments, nanoparticles and formulations thereof). 
 
3. Projects in the context of which the ente rprise operating under the Regime assigns at 
least the equivalent of 0.5 per cent of its sales to the research and development 
expenses of its local operations. 
 
 For the purposes of this clause, the fo llowing definitions shall be taken into 
consideration: 
 
Research :  Planned original research geared  towards the acquisition of fresh 
knowledge and greater understanding in the scientific and technological fields; 
 
Development :  Application of the research results or any other type of 
scientific knowledge to the manufacture of ne w materials or products, to the design of 
new production processes or systems or to a major technological upgrade of 
pre-existing materials, products, processes or systems; 
 
Research and development expenditure :  This includes researcher salaries, direct 
research support service expenses, purchase of  R&D-related assets (new machinery, 
laboratory equipment, computer equipment and software licences, other licences, 
buildings and facilities) and other related expenditure. 
 
4. Projects in which the enterprise operating under the Regime has at least one of the 
following certifications for its local operations: 
 
(a) ISO (International Organization fo r Standardization) 14001 (14004) or 
equivalent; 
 (b) LEED (Leadership in Energy and Environmental Design) or equivalent. 
 
II. A project carried out under the Regime need only comply with one of the above parameters 
in order to be considered to be in a sector st rategic to the country's development, pursuant to 
subparagraph (a) of Article 21 bis of the Duty-Free Zone Regime Law and amendments thereto. 
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  III. This definition of strategic sectors applies as from the date of its publication in the Official 
Journal La Gaceta . 
 Definitive resolution. 
 
For publication.  Anabel González, General Coordinator. Once.– O. C. 117148.– (Application No. 23375).– C-139400.– (IN2010098767).  
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