WT/TPR/S/180 Trade Policy Review 
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IV. TRADE POLICIES BY SECTOR 
(1) OVERVIEW  
1. The agriculture, forestry and fisheries sector accounted for 7.8 per cent of Costa Rica's GDP 
in 2005 but generated about 34 per cent of its expo rts.  A small number of agricultural products for 
domestic consumption (meat and poult ry offal, dairy products, onions and shallots, potatoes, rice, 
sausages and preparations of meat) receive highe r than average tariff protection.  Costa Rica 
maintains tariff quotas under the WTO Agreement on Agriculture, and in 2003 introduced a new system for their administration under which it grants a trading partner preferential access for a specified quota.  Costa Rica provided support to the agriculture sector in the period 2001-2006, 
which, while apparently modest, is hard to qua ntify because Costa Rica was well behind schedule in 
notifying the WTO of its domestic support to the sector. 
2. In 2005, the manufacturing sector produced a bout 19.7 per cent of the country's GDP and 
65.3 per cent of its exports.  Substantial manufact uring activity takes place under special regimes, 
such as free zones, but the links to the rest of local industry appear to be limited.  In addition, the promotion of activities through special regimes ha s continued to create implicit disadvantages for 
other industries that do not enjoy the same privile ges but have to compete for the same factors of 
production. 
3. In the same year, the services se ctor accounted for just over 60 per cent of Costa Rica's GDP 
and 62 per cent of total employment.  The State c ontinues to maintain monopol ies in activities such as 
insurance;  railways, sea ports and airports;  an d certain postal services;  and it operates exclusive 
concessions in a number of electricity and telecommunication services.  The efficiency and cost of 
services supplied through these monopolies seem questi onable, and the authorities are taking steps to 
allow greater private-sector participation in certain activities. 
4. Costa Rica's Schedule of Specific Commitments under the WTO General Agreement on 
Trade in Services (GATS) is rather limited, as it has adopted commitments in only five of the 
12 GATS sectors.  Costa Rica undertook commitments through the Fifth Protocol to the GATS on 
financial services, but none in the telecommunicati ons area.  It submitted an initial offer in the 
framework of the Doha Round negotiations on servi ces in April 2004, but no revised offer had been 
submitted as at December 2006. 
5. Costa Rica allows foreign banks to operate through subsidiaries established as public limited 
companies sociedades anónimas ), but does not permit branches.  Once established, foreign banks 
receive national treatment.  In practice, however , the Costa Rican banking regime continues to 
discriminate against private banks (both Costa Rica n and foreign) through a series of regulatory and 
fiscal asymmetries.  The banking sector continues to be dominated by State-owned banks, although 
private banks have gained ground in terms of a ttraction of resources and loan placements.  The 
regulatory framework and a number of tax facilities available abroad have continued to stimulate 
offshore banking activities, albeit on a reduced scal e.  Although reforms have been adopted to 
improve supervision in the sector, practical problems persist, such as the consolidated supervision of 
Costa Rican financial groups, which include offshore banks. 
6. The law grants the State-owned National Insu rance Institute a monopoly on practically all 
types of insurance activity.  This has stunted th e development of domestic insurance markets and 
fostered inefficiencies, to the detriment of consum er choice.  In late 2006, draft laws were being 
prepared to reform the insurance market and open it up to competition.  Costa Rica accepted the Fifth Costa Rica WT/TPR/S/180 
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Protocol to the GATS, involving specific commitments for various financial services, but it has not 
undertaken any commitment on insurance. 
7. The State-owned Costa Rican Electricity Institu te (ICE) or its affiliates, enjoy exclusive 
concessions to supply basic local, long-distance (n ational and internationa l) and mobile telephone 
services, as well as value-added services, Internet  connection and satellite communication.  In 
October 2006, the Government submitted new draft laws to the Legislative Assembly, which, among 
other things, would open up the telecommunications  market to new operators and reorganize the 
sector by separating the regulatory, supervisory a nd operational functions.  The ICE also has an 
exclusive concession for the transmission of electric energy, and it controls most of the electricity 
distribution/retailing and generation market. 
8. Draft legislation to liberalize insurance and telecommunications services form part of an 
agenda to implement the Free Trade Agreement be tween the Dominican Republic, Central America 
and the United States, which at end-2006 had been si gned but not ratified by Costa Rica.  To make the 
Costa Rican investment regime more predictable, it would be desirable to guarantee the commitments 
made by Costa Rica in that Free Trade Agreemen t by incorporating new multilateral commitments 
under the GATS. 
9. In audiovisual services, Costa Rican legislation contains significant restrictions on the 
principle of national treatment.  Only Costa Rican  citizens, or companies owned by Costa Ricans, 
may establish, manage and operate firms providing wireless services. 
10. Although airports have to remain under State authority and control, airport services may be 
outsourced under concession contracts.  Concessions  have been granted for airport infrastructure 
development and modernization, but the process has run into difficulties.  On ly Costa Rican natural 
and legal persons have the right to ope rate local public air transport services. 
11. Port infrastructure is also facing serious pr oblems, in particular high operational and 
warehouse clearance costs, profits th at are insufficient to generate f unds for infrastructure investment, 
and long unloading times.  Ports ha ve to remain under State author ity and control, but port services 
may be outsourced under State concessions.  In  practice, concession processes have been slow, 
causing delays in infrastructure modernization.  In 2006, however, a concession contract was signed 
for the Pacific port of Caldera.  Only Costa Rican  citizens or companies fo rmed in Costa Rica with 
capital controlled by Costa Ricans may operate coastal shipping services. 
12. With the exception of commitments on medical and dental services, Costa Rica does not have 
any specific commitments in the professional service s sector under the GATS.  In general, nearly all 
professions are reserved for members of the resp ective professional bodies.  Although foreigners may 
join such bodies, they generally have to satisfy  additional requirements to those applied to Costa 
Ricans.  Residency requirements are applied on a differentiated basis depending on the type of 
profession and can represent a significant barrier to the provision of professional services by 
foreigners.  In late 2006, proposals were being prep ared to allow greater foreign participation in 
public accountancy services. WT/TPR/S/180 Trade Policy Review 
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(2) AGRICULTURE  
(i) Overview 
13. In 2001-2005, the share of agriculture in GDP1 dropped slightly from 8.0 per cent to 7.8 per 
cent, although  the structure of production has re mained relatively stable.  In 2005, fresh fruits 
(banana, pineapple, melon, plantain, mango, papaya  and strawberry) generated about 38.9 per cent of 
the total value of agricultural output;  while livestock activities contributed 20.7 per cent;  and industrial crops (coffee, sugar cane, African pa lm, oranges, palm hearts and tobacco) jointly 
accounted for about 16.5 per cent. 
14. Between 2000 and 2005, the output of rice, beans and maize fell by 21.1 per cent, 37.8 per 
cent and 28.5 per cent, respectively, in volume terms.
2  Coffee production also declined during the 
same period, but output levels for sugar cane,  palm hearts and African palm all increased.3 
15. As a source of employment, the agriculture sect or accounted for about 15.2 per cent of the 
total employed population in 2005. 
16. The primary activities of crop farming, livestoc k breeding and fishing generated 32.7 per cent 
of Costa Rica's export earnings in 2005 (see Table AI .1).  The leading agricultural export products are 
bananas, pineapple, coffee, other food preparations , and melon, palm oil, fruit purées, foliage, plants 
and sugar and manioc.  As noted earlier, the fruits gr oup displays a rising trend, particularly pineapple 
which has become the country's third largest agricultural export product. 
17. During the period 2001-2006, under the various notification commitments in the 
WTO Agreement on Agriculture, Costa Rica submit ted only six notifications to the WTO Committee 
on Agriculture, in 2001 and 2002 (Table AII.1). 
(a) Policy objectives and instruments 
18. The Ministry of Agriculture and Livestock (MAG)  is tasked with promoting agriculture and 
rural development, through processes of technol ogy creation and transfer, formulation and 
implementation of agricultural policies, and the issu ance and application of plant and animal health 
regulations. 
19. Apart from the MAG, the leading entities of the agricultural public sector involved in sectoral 
policies include:  the National Production Council ( Consejo Nacional de Producción  - CNP);  the 
Costa Rican Fisheries and Aquaculture Institute ( Instituto Costarricense de Pesca y Acuicultura  - 
INCOPESCA);  the Agrarian Development Institute ( Instituto de Desarrollo Agrario  - IDA);  the 
National Seeds Office ( Oficina Nacional de Semillas  - ONS);  the National Institute of Agricultural 
Innovation and Technology Transfer ( Instituto Nacional de Innovación y Transferencia en Tecnología 
Agropecuaria  - INTA);  the Integrated Agriculture and Livestock Marketing Programme ( Programa 
Integral de Mercadeo Agropecuario  - PIMA);  and  the National Groundwater, Irrigation and 
Drainage Service ( Servicio Nacional de Aguas Subterráneas, Riego y Avenamiento  - SENARA). 
                                                      
1 Figures provided by the authorities at current prices.  The fall is more pronounced at 1.2 percentage 
points when measured in constant colon terms. 
2 Executive Secretariat for Sectoral  Agricultural Planning (SEPSA), on the basis of information from 
the Central Bank of Costa Rica (BCCR). 
3 SEPSA, on the basis of info rmation from sectoral institutions and national programmes. Costa Rica WT/TPR/S/180 
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20. The main agriculture sector policies in the peri od under review are contained in the document 
entitled Políticas para el Sector Agropecuario Costa rricense.  Revalorando la agricultura en un 
ambiente de competitividad, sostenibilidad y equidad (2002-2006) .  (Policies for the Costa Rican 
Agricultural Sector.  Reassessing agriculture in a climate of co mpetitiveness, sustainability and 
fairness (2002-2006)).  One of the main policy principles set out in that document concerns 
conducting the trade liberalization process under princi ples of gradualness, reciprocity, consultation, 
asymmetry and impact analysis, while recognizing the market distortions that could endanger Costa 
Rican agricultural activities that are not yet in a position to compete.  The operational aspects of 
sectoral policies were defined in the document Estrategia Agro21, Comp etitividad, Sostenibilidad y 
Equidad de las Cadenas Agroproductivas  (Agro21 Strategy:  competitiveness, sustainability and 
fairness of agricultural production chains). 
21. In the context of this review, the authorities stated that the main policies proposed for the 
agriculture and productive sector include incr easing competitiveness, value added and exportable 
supply;  developing new marketing opportunities;  modernizing the public in stitutional framework;  
managing sustainable production on an integrated basis;  and promoting innovation and new product 
development. 
22. In the period 2000-2004, several laws were passed with the aim of strengthening the 
institutional services in research and technology tran sfer, sustainable agricultural production, sanitary 
and phytosanitary protection services, and marketing services.4  In particular, a mechanism was 
created to clear arrears, purchase, and reschedul e the debts of producers affected by weather and 
market problems.  In addition, several draft la ws were submitted to strengthen and modernize 
institutions and producer services. 
23. The actual expenditure of public in stitutions in the agriculture sector5 grew from 
C26,507.5 million in 2000 to C43,508.6 million in 2005 (about US$86 million and US$91 million, 
respectively).  Total expenditure in that pe riod was C209,198.2 million (about US$544 million), 
concentrated in three institutions:6  the National Production Council,  accounting for 35.6 per cent of 
the total;  the MAG, accounting for 30.2 per cent, and the Agrarian Development Institute, with 
23.5 per cent.7  Within that sectoral expenditure, the main  programmes that have been funded are:  
                                                      
4 These laws include:  Law No. 8149 of 22 November 2001, creation of the National Institute for 
Agricultural Innovation and Technology Transfer (INTA);  Law No. 8408 of 27 April 2004, implementation of 
the Sustainable Agricultural Production Promotion Programme;  Law No. 7959, PIMA, of 21 January 2000, reform of Article 17 of Law No. 7656, liquidation of the Costa Rican Development Corporation;  Law 
No. 8047, CNP authorization for the National Production Co uncil to cancel interest and legal charges owed by 
small and medium-sized agricultural producers, pursuant to Decrees Nos. 27402-MP-MOPT, 28009-MP-MOPT, 28178 MP-MOPT, 28197-MP-MOPT, 28399-MP 28524-MP;  Law No. 8147, FIDAGRO, of 
9 November 2001, establishing the Trust Fund for purchase and restructuring of the debts of small and medium-
sized agricultural producers;  Law No. 8208, ICAFE, of 22 January 2002, authorizing the State, State commercial banks, the Coffee Institute of Costa Rica and the National Cooperative Promotion Institute, to 
participate in the securitization of coffee sector loan s for the purpose of cancelling overdue debts owed by 
coffee producers.  Law No. 8332, FIDAGRO, of 27 November 2002, on the extension of deadlines for the 
purchase and rescheduling of debts, including those of the coffee sector;  Law No. 8390, FIDAGRO, of 
7 November 2003, on extending deadlines for the submission of debt rescheduling applications;  Law No. 8427, FIDAGRO, of 27 December 2004, on ex tending deadlines and the possibility of restoring properties awarded to 
financial institutions to their previous owners. 
5 The leading public institutions in the agriculture sector are:  CNP, IDA,  INCOPESCA, INTA, MAG, 
ONS, PIMA and SENARA. 
6 Percentages for 2005. 
7 SEPSA, Statistical Bulletin, and information from sector institutions and the Office of the 
Comptroller General of the Republic.  See http ://www.infoagro.go.cr/documentospdf/03diag.pdf. WT/TPR/S/180 Trade Policy Review 
Page 78 
 
 
transfers and contributions, marketing, peasant farm er settlements, productive restructuring, the 
Agricultural Extension Programme, the Agricultural Health Programme, the Research and Transfer 
Programme, food security, and the Irrigation and Dr ainage Infrastructure Development Programme. 
(b) Tariff measures 
24. In 2006, the average level of tariff protection in the agricultural and fisheries sector 
(according to the ISIC definition) was 9.2 per cent (see Chapter III(2)(iv)).  The agricultural products 
that benefited from the highest tariff protection incl uded meat of swine and some of its by-products, 
poultry meat and offal, dairy products, onions an d shallots, beans, potatoes, rice, sausages and 
preparations of meat , sugar and molasses. 
25. Costa Rica is entitled to impose tariff quotas for the products mentioned in section I-B of 
Schedule LXXXV, under the commitments on minimu m access contained in the WTO Agreement on 
Agriculture.  During the period 2001-2006, Costa Rica submitted two notifications8 relating to tariff 
quotas.  The right to administer tariff quotas covers the products listed in Table AIV.1. 
26. In the case of products for which the tariff quot a mechanism was activated, the use of quotas 
was minimal in the period 2001-2005 (Table IV.1).  In the case of products for which quotas were not 
activated, the MFN import tariff remained equal to  or below the bound tariff for in-quota imports. 
Table IV.1 
Imports by Costa Rica unde r tariff quotas, 2001-2005 
(Tonnes) 
Product 2001 2002 2003 2004 2005 Average 
quota 
2001-
2005a Average 
import 
2001-
2005b Average 
quota use 
%c 
Other cuts and offal of chicken, 
fresh, chilled or frozen 
(02.07.13.99;  02.07.14.99) 3.7 415.6 241.5 18.1 0.0 1.216.8 135.8 0.1 
Milk and cream, not concentrated 
nor containing added sugar or other sweetening matter (0401) 0.3 0.0 131.6 0.0 0.0 383.6 26.4 0.1 
Milk and cream, concentrated or 
containing added sugar or other 
sweetening matter (0402;  except 0402.9110;  0402.9910) 32.6 160.5 0.0 28.2 0.0 330.7 44.3 0.1 
Buttermilk, curdled milk and 
cream, yoghurt, kephir and other fermented or acidified milk and 
cream, whether or not 
concentrated or containing added sugar or other sweetening matter 
or flavoured or containing added 
fruit, nuts or cocoa (0403) 8.8 29.4 0.1 0.1 0.0 47.4 7.7 0.2 
Butter and other fats and oils 
derived from milk (0405) 4.7 3.1 1.9 0.0 0.0 42.6 1.9 0.1 
Table IV.1 (cont'd) 
                                                      
8 WTO documents G/AG/N/CRI/1/Rev.1 of 26 February 2001 and G/AG/N/CRI/8 of 
26 February 2001. Costa Rica WT/TPR/S/180 
 Page 79 
 
 
Product 2001 2002 2003 2004 2005 Average 
quota 
2001-
2005a Average 
import 
2001-
2005b Average 
quota use 
%c 
Cheese and curd (excluding 
headings for ched dar-type cheese, 
dehydrated, green- or blue-veined 
and other cheese) (0406.10.00;  0406.30.00) (0405) 214.9 174.8 234.2 172.7 174.6 355.5 194.3 0.6 
Sausages and similar products.  
Meat and offal of poultry of 
heading 0105, other prepared or 
preserved meat and offal of poultry of heading 0105 
(1601.00.20;  1602.10.20;  
1602.32.00) 56.9 48.2 110.5 63.5 3.6 142.3 56.5 0.4 
Ice-cream and other edible ice, 
whether or not containing cocoa 
(21.05.00.00) 10.9 134.5 327 343.4 109.0 687.0 185.0 0.3 
a Of quota size. 
b Of in-quota imports. c Of quota use. 
 
Source : Secretariat calculations based on data  provided by COMEX and compiled by the Dirección General de Aduanas  
(General Directorate of  Custom s).  Figures subject to rounding. 
 
27. In view of the cost and difficulties of allo cating import quotas through commodity exchange 
transactions, which was the procedure used until 200 3, Costa Rica introduced a new quota allocation 
system in that year.  The new system was adopted  through the General Regulation on the Distribution 
and Allocation of Import Tariff Quotas, approved by Executive Decree No. 30900-COMEX-MAG of 
20 December 2002 (amended by Executive Decree  No. 32237-COMEX-MAG of 8 February 2005).9 
28. Under the new system, invitations to participate in the allocation of quotas are published by 
the Ministry of Foreign Trade (COMEX) in the Official Journal ( La Gaceta ) and in a national daily 
newspaper, during the first week of December ea ch year, for participation in the quota allocation 
process for the following year.  Within the first 10 wo rking days of January in the year following the 
invitation, COMEX allocates quotas for the following applicant categories:  (i) applicants with a 
documented record, to whom 80 per cent of the tota l annual volume of each quota is distributed;  and 
(ii) new applicants, i.e. those that do not qualify as applicants with a documented record. 
29. Any natural or legal person domiciled in Costa Ri ca can apply to participate.  Persons who, 
for two consecutive years, use less than 95 per cent of the quota volume allocated to them, may not 
receive an allocation in the third year and are considered as new applicants without a documented 
record for subsequent allocations.  Persons who use more than 95 per cent continue to be considered 
as applicants with a documented record. 
30. Costa Rica also applies import quotas when agricultural goods are in short supply, i.e. in 
cases where official technical studies determine that  the quantity of the product produced domestically 
or elsewhere in Central America is insufficient to satisfy local consumption.  In such cases, 
authorization is given to import a certain quantity ta riff-free or at a reduced tariff.  The regulation in 
question is contained in Executive Decree No. 28727-COMEX-MEIC-MAG of 7 July 2000, and, in 
                                                      
9 Law No. 7473 gives the Executive legal powers to eliminate or modify tariff quota administration 
procedures without the need  for legislative approval. WT/TPR/S/180 Trade Policy Review 
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the case of rice, in Law No. 8285 of 14 June 2002.  In the case of rice, and without prejudice to the  
possibility of free importation subject to MFN tariffs, imports that enjoy preferential tariff treatment are channelled exclusively through the Nationa l Production Council (CNP) or the National Rice 
Growers Corporation (CONARROZ).  In the peri od 2001-2006, rice shortages were declared from 
November 2002 until the end of 2006, when there was an average annual shortfall of 119,141 tonnes. 
31. In 2002, Costa Rica notified
10 that it applied special price-based safeguard measures on 
imports of the following products:  (i) rice in the husk (HS 10.06.10.90) with a trigger price of US$322.64 per tonne (date of application 27 Septem ber 2002);  and (ii) husked rice and semi-milled 
rice (HS 10.06.20.00 and 10.06.30.00), with a trigger price of US$322.64 per tonne (date of 
application 27 September 2002).  The measur e was maintained until 27 September 2003. 
(c) Subsidies and domestic support 
32. In its Schedule LXXXV, Costa Rica undertook  commitments to limit export subsidies for 
non-traditional agricultural products.  Table AII.2 (s ee Chapter II(5)) lists the notifications submitted 
by Costa Rica on export subsidies for agricultural products.  Such non-traditio nal products are defined 
as all agricultural products other than traditional expo rt products, namely coffee, sugar, bananas, meat 
and traditional products of domestic cons umption (cereals and staple grains). 
33. As at late 2006, the most recent notification submitted to the WTO by Costa Rica
11 on 
domestic support was that made in 2001, using inform ation relating to 1999.  In that notification, 
Costa Rica stated that it granted subsidies in 1999 in amounts that were much lower than the 
maximum amounts in Costa Rica's commitments, in terms of the Total Aggregate Measurement of 
Support.  The information notes that Green Box measures included support for research services;  
animal and plant health;  extension;  agricultural marketing;  food security and compensation;  crop 
insurance;  development of agricultural production;   and  irrigation and drainage services.  The 
measures notified under special and differential treatme nt included subsidies for agricultural financing 
services with international funds. 
34. The institutions with the largest  share in the financial disbursements category were the CNP 
and the IDA.  Since 1998, the CNP has provided fina ncial assistance in agricultural investment and 
agribusiness projects to small and medium-s ized producer organizations, channelling non-
reimbursable funds through the Productive Restru cturing Programme.  Under the same programme, 
the CNP also offered funding to small and medium -sized producer organizations on more favourable 
terms than those offered by the banking system.12  The IDA made investments to purchase land for the 
programme to award farms to smallholders;  and it also made disbursements in favour of peasant 
farmer settlements, and extended cr edit through the Caja Agraria. 
35. The authorities stated that in late 2006 Costa Ri ca was working on the preparation of overdue 
notifications on domestic support. 
(d) Marketing and pricing 
36. The National Spirituous Beverages Factory ( Fábrica Nacional de Licores  - FANAL)13, under 
the authority of the CNP, holds a monopoly on alcohol production, the legal bases for which are contained in a variety of instruments, includi ng Decree No. 99 of 2 September 1850 (distillation of 
                                                     
 
10 WTO document G/AG/N/CRI/14 of 15 October 2002. 
11 WTO document G/AG/N/CRI/9 of 26 February 2001. 
12 See http://www.mercanet.cnp.go.cr/Reconversion/Reconversion.htm. 
13 See http://www.fanal.co.cr/. Costa Rica WT/TPR/S/180 
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spirits and alcoholic beverages by the State);  Re gulation 101 of 25 September 1850 (prohibition of 
private distillation);  Title XIV of Law No. 8 of 31 October 1885 (monopolies on spirituous beverages 
and tobacco under the Tax Code);  and the Orga nic Law on the National Production Council (CNP)14, 
among others.15  Article 9(d) of Law 7472 of 19 January 1995 (Law on the Promotion of Competition) 
exempts State monopolies, including that relating to the distillation and marketing of alcohol for 
domestic consumption, from applica tion of the law on competition. 
37. Under the Organic Law on the Agriculture a nd Sugar Cane Industry (Law No. 7818), the 
Agro-Industrial Sugar Cane League ( Liga Agrícola Industrial de la Caña de Azúcar  - LAICA) is 
required to maintain equitable relations between cane producers and sugar refineries, in order to 
guarantee each sector a rational and fair share.  Th e powers available to LAICA include the marketing 
of sugar, honeys and alcohol.  In practice, despite  not exercising exclusive legal control over these 
activities, LAICA continues to account for a high, al beit decreasing, percentage of the marketing and 
exportation of sugar, given its negotiatin g capacity and marketing infrastructure. 
38. Under Law No. 7818, the LAICA Board of Directors fixes the national sugar production 
quota each year.  The quota is equivalent to domestic  sugar consumption recorded in the previous 
season, multiplied by a fixed factor of 1.5 but this  factor may vary in response to changes in the 
quotas granted to Costa Rica in preferential external markets, provided this does not affect the amount 
destined for domestic consumption and reserves.  The LAICA Board of Directors can order that the 
sugar included in the quota be replaced by alcoho l, provided it is not used to satisfy domestic 
consumption and reserves. 
39. Much of the domestic wholesale marketing of fru it, vegetables and fish is conducted mainly 
through transactions undertaken in the National Food Supply and Distribution Centre (CENADA), 
under the authority of the Integrated Agriculture and Livestock Marketing Programme (PIMA).  This 
organization facilitates relations be tween suppliers and other agents  participating in the wholesale 
marketing of perishable products.  Complementar y projects have been implemented to support the 
wholesale market, along with initiatives to create regional markets. 
40. According to the Organic Law on the National Production Council16, the aims of the CNP 
include maintaining a balance in relations between  agricultural producers and consumers, for which 
purpose the Council can intervene in supply and demand in the domestic market to guarantee the country's food security.
17  It may also participate as an econom ic agent in the seeds and agricultural 
products market to encourage productio n and availability.  According to the authorities, in practice the 
National Production Council does not regulate prices. 
(e) Financing and insurance 
41. Credit to support agricultural activities is main ly provided by institutions in the National 
Banking System (SBN), but there are also non-ba nk financial sources operating as trust funds, in 
which public sector institutions participate.  Funds i nvested in agricultural activities and projects as at 
                                                      
14 Includes amendments and reforms under Laws Nos. 2035 of 17 July 1956, 6050 of 15 April 1977, 
7473 of 27 December 1994 and 7742 of 15 January 1998. 
15 See also a draft Law on the breakup of the monopoly of the National Spirituous Beverages Factory 
(file No. 15.179), presented to the Legislative Assembly in 2004.  See 
http://www.asamblea.go.cr/p royecto/15100/15179.doc. 
16 Includes amendments and reforms according to  Laws Nos. 2035 of 17 July 1956, 6050 of 
15 April 1977, 7473 of 27 December 1994 and 7742 of 15 January 1998. 
17 As established in the Organic Law on the National Banking System (Law No. 1644 of 
27 September 1953), the Ministry of Finance is expected to provide funding for these functions. WT/TPR/S/180 Trade Policy Review 
Page 82 
 
 
December 2004 (balance of outstanding loan s) amounted to C124,400.2 million (roughly 
US$284.5 million) of which 86 per cent was channell ed through the SBN and 14 per cent came from 
non-bank sources.18  This includes debt purchase and restructuring amounting to C5,336.8 million at 
2004, for producers affected by adverse weather and market conditions.  Of the total amount invested 
in the agriculture sector, 75 per cent targeted cr op farming activities, 23 per cent was invested in 
livestock breeding, and 1 per cent in fisheries.19 
42. On average, 61 per cent of loans were issued th rough State banks in 2000-2004.  During this 
period, interest rates on colon-denominated loan s for crop farming and livestock activities trended 
downwards.  In the area of financial intermedia tion, State banks maintained the largest spread, 
although the difference with private banks has been narrowing.20 
43. The National Bank ( Banco Nacional ) has traditionally supported the agriculture sector.  In 
2000-2004, rural credit (loans to small-scale producers)  accounted for 25 per cent of its lending, while 
75 per cent was credit extended to agricultural activities undertaken by medium- and large-scale 
producers.21  The National Bank accounted for 45 per cent of the balance of SBN loans in the 
agriculture sector in 2004. 
44. There are also the following sources of fina ncing:  the Agricultural Savings Bank ( Caja 
Agraria)  of the IDA, the MAG-PIPA/BANCREDITO trust fund, the National Collection Centres 
Programme (PRONACA), the SENARA Small-Scale Irrigation Programme, Northern Zone Small-Scale Projects (PPZN) and the Productive Restru cturing Programme.  These sources have been 
created by laws that allocate resources speci ally for these purposes, which may be sourced 
domestically or externally.  In the period 2000-200 4, non-bank financial sour ces of the agricultural 
public sector approved 2,906 credit operations for a value of C16,650.0 million (roughly 
US$45.5 million).  Of these loans, 54 per cent were provided by the PPZN and 25 per cent by the Caja Agraria .
22  The Productive Restructuring Programme  implemented by the CNP provided the 
largest volume of funding, having approved 96 operations for a total of C11,703.9 million.  
Approximately 37 per cent of these funds were non-reimbursable. 
45. Since 2000, small and medium-sized agricultura l producers seriously affected by weather 
phenomena or a fall in the prices of their products have been eligible for a number of programmes 
aimed at clearing debt arrears and restoring their e ligibility for credit.  During the period 2000-2004, a 
total of C14,113 million was invested in these programmes (about US$38.5 million) through 11,521 operations.
23 
46. The National Insurance Institute (INS) is the only institution th at provides insurance services, 
including to the agriculture sector (see Chapter IV(5)).  Although there are no subsidized insurance 
services, some policies are provided at cost, such as crop insurance ( seguro de cosechas ) 
                                                      
18 SEPSA, on the basis of data from financial sources.  National Banking System (SBN).  See 
http://www.infoagro.go.cr/documentospdf/03diag.pdf. 
19 SEPSA, on the basis of data from the Monetary Department of the BCCR.  See 
http://www.infoagro.go.cr/ documentospdf/03diag.pdf. 
20 SEPSA, on the basis of information from the BCCR.  See http://www.infoagro.go.cr/documentospdf/ 
03diag.pdf. 
21 SEPSA, on the basis of information from the BCCR and Banco Nacional de Costa Rica.  See 
http://www.infoagro.go.cr/documentospdf/03diag.pdf. 
22 SEPSA, on the basis of information from non-bank financial sources.  See 
http://www.infoagro.go.cr/documentospdf/03diag.pdf. 
23 SEPSA, on the basis of information from non-bank financial sources.  See 
http://www.infoagro.go.cr/documentospdf/03diag.pdf. Costa Rica WT/TPR/S/180 
 Page 83 
 
 
(Comprehensive Crop Insurance Law No. 4461 of 10  November 1969).  In this case, the INS uses its 
annual profits to make a contribution to the con tingency reserve, thereby financially strengthening 
crop insurance lines. 
47. Agricultural risks are seldom covered by insu rance policies; only 1.58 per cent of the total 
area of land used for crop growing is insured.  Nonetheless, coverage has expanded in certain 
categories, such as beans and oil palm.  Historically, rice has had the greatest insurance coverage, in response to demand from lending institutions; and on  average 88.3 per cent of rice growing land is 
insured. 
(f) Other measures 
48. The General Sales Tax Law (No. 6826 of 8 November 1982 and amendments thereto) 
establishes exemptions for products in the basic food basket, retreads and tyres for agricultural 
machinery, veterinary products and agricultural inpu ts, etc.  These exemptions apply to domestic and 
foreign products alike. 
49. Article 5 of Law No. 7293 of 15 May 2000
24, Executive Decree No. 28648-MAG-MEIC-H of 
15 May 2000 and Executive Decree No. 31939-MAG-H-MEIC of 20 August 2004, establish 
exemptions from import duties on agricultural machin ery, equipment and inputs, and on products used 
in fishing activity, except for recreational fishing.   They also provide exemptions from all taxes, 
except import duties, on raw materials used in the manufacture of  inputs for agricultural activity and 
banana packing.  This legislation establishes the lis t of products destined for agricultural activity that 
are eligible for this type of exemption, subject  to prior recommendation by the Agricultural Inputs 
Technical Commission (see Chapter III(4)(iii)). 
50. Costa Rica provides structural adjustment assistance to the agricultural sector under Law 
No. 7742 of 19 December 1994, which established the Agriculture Sector Productive Restructuring 
Programme implemented by the National Produc tion Council.  This programme absorbed the 
Programme of  Financing for Small-Scale Agricu ltural Producers that was in force in 1995.  In 
addition, Law No. 8542 of 7 September 2006 was passed to promote organic farming. 
51. Costa Rica levies an export duty on bananas, established by Law No. 5515 of 19 April 1974 
(see Chapter III(3) (ii)). 
52. For the periods 2000-2001 and 2000-2002, pursuant to the agreement of the Association of 
Coffee Producing Countries, Costa Rica retained 20 per cent of its exportable coffee grain production.
25 
53. In 2006, the United States gave Costa Rica roughly 1 per cent of its cane sugar tariff quota, 
corresponding to 26,950 tonnes.26 
(3) MANUFACTURING  
54. In the period 2001-2005, the relative weight  of value added in manufacturing activities 
remained virtually constant at around 20 per cent of GDP in nominal terms.  The sector's share of the 
                                                      
24 Reform of the Regulation on Exemption for Agricultural Activity, based on Article 5 of the Law 
Regulating Current Exemptions, Derogations and Exceptions, Law No. 7293. 
25 SEPSA, on the basis of information from th e Institute for Cooperation and Self-Development 
(ICADE). 
26 See http://www.fas.usda.gov/itp/imports/ussugar.asp. WT/TPR/S/180 Trade Policy Review 
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labour force dropped from 15 per cent of the total em ployed population in 2001 to 13.7 per cent in 
2005.  Overall, the manufacturing sector slightly in creased its share of total exports, from 62.4 per 
cent in 2001 to 65.3 per cent in 2005. 
55. As shown in Table IV.2, the structure of Costa Rican manufacturing has changed little since 
2001.  The leading activities continue to be concentrated in electronic components, food processing, 
clothing, medical devices, construction materials an d plastic products.  In terms of total manpower 
employed, the main activities are the food industry;  textiles, clothing and leather;  metal products;  
the timber industry and chemicals. 
Table IV.2 
Value added by activities in the manufacturing sector, 2001-2005 
(Percentage of manufacturing industry) 
Industrial classification categories 2001 2002 2003 2004 2005 
Manufactures 100.0 100.0 100.0 100.0 100.0 
Food products 23.6 23.1 22.9 21.7 22.3 
Beverages and tobacco 5.9 5.7 5.6 5.6 5.6 
Textiles 1.2 1.1 1.0 0.9 0.9 
Wearing apparel, except footwear 2.0 2.0 1.8 1.6 1.7 
Leather products 0.3 0.3 0.3 0.3 0.3 
Footwear, except rubber or plastic footwear 0.0 0.0 0.0 0.0 0.0 
Wood products, including furniture 0.8 0.7 0.8 0.7 1.0 
Furniture, except metal furniture 0.2 0.3 0.3 0.3 0.3 
Paper and paper products 3.1 2.9 2.9 3.0 2.9 
Printing and publishing materials 3.0 2.9 2.8 2.8 2.5 
Industrial chemicals 2.2 1.9 1.9 1.9 2.0 
Other chemicals 4.6 4.7 5.0 4.6 4.1 
Refined petroleum products 0.9 1.6 1.7 1.7 0.7 
Miscellaneous products of petroleum and coal 0.0 0.0 0.0 0.0 0.0 
Rubber products 1.6 1.6 1.6 1.6 1.6 
Plastic products 3.4 3.4 3.6 3.7 4.1 
Dishware, pottery products 0.3 0.3 0.3 0.3 0.3 
Glass and glass products 1.0 0.9 0.9 0.7 0.8 
Other non-metallic mineral products 2.9 3.0 2.8 2.7 2.7 
Iron and steel 0.4 0.4 0.4 0.5 0.6 
Non-ferrous metals 0.0 0.1 0.2 0.2 0.4 
Fabricated metal products 2.0 2.1 2.2 2.1 2.5 
Non-electrical machinery 1.1 1.2 1.3 1.3 1.2 
Electrical machinery 2.0 1.8 1.7 1.9 2.4 
Transport equipment 0.4 0.5 0.4 0.4 0.4 
Professional and scientific equipment 0.1 0.1 0.1 0.0 0.0 
Other manufactured products 0.5 0.5 0.5 0.6 0.6 
Small-scale manufacturing  9.3 9.1 9.2 8.8 9.1 
Inward processing 2.9 2.9 2.5 2.6 2.6 
Free zones 24.1 24.7 25.4 27.2 26.3 
Source : Data provided by the authorities. 
 
56. Significant amounts of manufacturing activity take place in free zones, involving roughly 
74 per cent of all free zone enterprises according to PROCOMER.  In 2005, free zones accounted for 
8 per cent of Costa Rican GDP.  The authorities stated  that in addition to the major impact of free 
zones on exports and employment, the establishment of high-technology firms has also encouraged technology transfer.  The leading export products (m easured as a percentage of free zone exports) are 
produced by firms making electrical equipment and parts (50 per cent), particularly INTEL (an 
exporter of modular circuits and electrical micr o-structures);  followed by firms making precision 
instruments and medical equipment (16 per cent), a nd agribusiness and textile enterprises (9 per cent). Costa Rica WT/TPR/S/180 
 Page 85 
 
 
57. The level of tariff protection provided to the ma nufacturing sector remains relatively low.  In 
2006, the average tariff for the manufacturing sect or (ISIC classification) was 6.8 per cent.  
Nonetheless, certain branches of the food industry, the textiles, clothing and leather industry and the 
timber industry still enjoy levels of tariff protec tion higher than the manufacturing sector average. 
58. Domestic industry promotion measures continue to  target small and medium-sized industry.  
In June 2006 according to the Cost a Rican Social Security Office ( Caja Costarricense de Seguro 
Social - CCSS)27, 49.5 per cent of private-sector employees (from all sectors) registered with the 
CCSS were working in micro, small and medium-si zed enterprises, i.e. firms with fewer than 100 
workers.  Private-sector manufacturing SMEs employ 5.9 per cent of Costa Rica's economically active 
population. 
59. Other industrial promotion measures include special export regimes (Chapter III(3)(vi)), 
research assistance programmes (Chapter III(4)(viii)) a nd a number of instruments such as training 
programmes, fiscal incentives or financing programmes (Chapter III(4)(iv)). 
(4) ELECTRIC POWER  
60. According to data provided by the authorities,  in 2005 Costa Rica had 1,886 MW of installed 
power generating capacity, roughly 89 per cent of which was controlled by State-owned firms.  
Maximum demand in 2005 was nearly 1,390 MW.  Total electricity generation in 2005 amounted to 8,215 GWh, of which 80 per cent came from hydroel ectric plants, 14 per cent from geothermal plants, 
4 per cent from thermal plants, and 3 per cent from wind farms.
28  The 2.2 per cent annual average 
growth of installed capacity in 2001-2005 was much lower than the 7.6 per cen t average recorded in 
1995-2000, and also failed to match the 7.2 per cent growth in demand in the period 2000-2005.29  
Despite this backdrop, Costa Rica has maintained  a surplus of generated power, and in 2005 it 
exported 69.7 GWh of electric energy, worth ju st over US$4 million, to the Central American 
countries30 
61. At the institutional level, the electricity sector is  administered mainly through the Ministry of 
Energy and the Environment ( Ministerio de Energía y Medio Ambiente  - MINAE), which is 
responsible for issuing and coordinating sector polic ies.  The Public Services Regulatory Authority 
(Autoridad Reguladora de Servicios Públicos  - ARESEP) is responsible for granting concession 
contracts for electric power generation, as well as for safeguarding the interests of consumers and setting generation, transmission and distribution ch arges.  The Costa Rica n Electricity Institute 
(Instituto Costarricense de Electricidad  - ICE), a State enterprise, is responsible for coordinating the 
development of the National Electricity System ( Sistema Eléctrico Nacional  - SEN), and for 
undertaking research and exploration activities in geothermal resources.
31 
62. The ICE Group consists of ICE Electricidad  (ICE Electricity) and the Compañía Nacional de 
Fuerza y Luz  – CNFL (National Power and Light Company).32  In the generating segment, the 
ICE Group controlled 86 per cent of installed capac ity in 2005, 4 per cent of which came from the 
CNFL.  Other participants in electri c power generation activities include the Servicio Eléctrico de 
                                                      
27 See social security statistics:  http://www.ccss.sa.cr/.  See also Mi nistry of Economy, Industry and 
Trade http://www.pyme.go.cr/svs/info rmacion_estadistica/docs/178.pdf. 
28 ARESEP (2005). 
29 Data compiled by the WTO Secretariat on the basis of information from ARESEP (2005) and online:  
http://www.ice.go.cr/esp/ele/planinf/indic_icelec0.htm. 
30 Information provided by the Costa Rican authorities. 
31 Laws Nos. 5961 of 6 December 1976 and 7593 of  9 August 1996. 
32 The CNFL is almost wholly owned (98.6 per cent) by the ICE. WT/TPR/S/180 Trade Policy Review 
Page 86 
 
 
Cartago  – JASEC (Cartago Electricity Board), the Empresa de Servicios Públicos de Heredia  – ESPH 
(Heredia Public Services Company) and a coopera tive, which represent 3 per cent of the country's 
electric power generation.  Other private generators produce 11 per cent. 
63. ICE Electricidad  operates as the only firm with a concession to provide transmission services, 
which gives it a de facto monopoly in the transmission of electric energy;  it is also responsible for the 
planning, construction and opera tion of SEN interconnection lines.   In September 2006, the ICE 
Group controlled nearly 80 per cent of th e electricity distribution/retailing market33, with the other 
20 per cent shared between JASEC, ES PH and four regional cooperatives.34  As part of the Central 
American Regional Electrical Interconnection Syst em (Sistema de Interconexión Eléctrica Regional 
de América Central - SIEPAC), the grid owner Empresa Propietaria de la Red S.A.  (EPR) is 
authorized to build and operate the Costa Rican segment of the SIEPAC, as provided in Law No. 7848 
of 3 December 1998 (Framework Treaty of the Central American Electricity Market). 
64. Since 1990, private firms have been authorized to  generate electricity under contract for the 
exclusive purpose of selling energy to the ICE.  The concession contracts involve the sale of 100 per cent of the energy produced by the plant in question
35, with sales to third parties not permitted.  
Concession contracts for electricity generation have a maximum duration of 20 years, and at least 
35 per cent of the firm's capital must belong to Costa Ricans.36  In addition to fulfilling these 
requirements in respect of capital, foreign compani es must also establish a branch in the country.  
Private electricity generating companies enjoy the same exemptions as the ICE on imports of 
machinery and equipment for their production activities (see Chapter III(4)).37 
65. Types of concession vary according to the maxi mum capacity of the project:  (i) generation 
for a maximum capacity of 20 MW38;  or (ii) generation for a maximum capacity of 50 MW.39  Under 
the 50 MW modality, at the end of the concession the assets of the electric power plant can be transferred free of costs or charges to the ICE.  Th e total capacity of all private-sector generators in 
each of the modalities may not exceed 15 per cent of total capacity of the SEN. 
66. The rate-setting process varies according to th e different concession modalities.  Under the 
20 MW modality, rates are set by ARESEP before the ICE buys energy.  In this case, private 
generators can opt for annual price setting by ARESEP, or a fixed rate set by ARESEP for the 
duration of the contract.  Under the 50 MW m odality, purchases must be made through tendering 
procedures, with sale price competition and evaluation of the technical, economic and financial capacity of the bidder and the characteristics of the en ergy source.  Only energy generators compete in 
selling energy to the ICE (sole buyer). 
67. The rates set for electric energy purchases from private producers can be reviewed according 
to ICE needs, but not when a competitive tender ha s taken place, as in the case of 50 MW generation 
or more.  Rate reviews are proposed by the ICE to ARESEP, which makes the corresponding 
                                                     
 
33 In terms of the value of electricity sales to the final consumer in 2005. 
34 JASEC and ESPH are State-owned municipal ente rprises.  The cooperatives are owned by their 
members. 
35 Private producers opera ting in other sectors of the economy can sometimes generate their own 
energy through the activity in which they engage;  such firms are authorized to sell their surplus energy obtained 
after satisfying their own needs. 
36 Costa Rican natural persons. 
37 JASEC, ESPH and the cooperativ es also enjoy the same exempti ons in respect of machinery and 
equipment imports. 
38 Under Law No. 7200 of 28 April 1990. 
39 Under Law No. 7508 of 9 May 1995. Costa Rica WT/TPR/S/180 
 Page 87 
 
 
decision.  In the rate-setting process for distri bution purposes, ARESEP evaluates the rate proposals 
submitted by the ICE and distribution companies and makes the technical adjustments it deems 
appropriate. 
68. Although there are cross-subsidi es between different consumers,  since 1998 there has been a 
gradual process of convergence such that prices reflect the real costs of provision by each enterprise.  
The authorities noted that in late 2006 there was already a significant degree of convergence. 
69. Prices charged to the final consumer can vary  from one distributor to another, and are 
differentiated by consumption sector, i.e. general, residential, industrial, and street lighting.  In 
July 2006, the average price of electricity was C37.6 per kWh for final residential consumers and 
C40.9 per kWh for industrial consumers (about  US$0.07 and US$0.08, respectively).  From 
December 2001 to July 2006, the average electricity  price increased by a cumulative 62.2 per cent in 
nominal terms.40 
70. The quality of electricity services has improved in areas such as transmission grid losses and 
the annual frequency of interruption.  Nonetheless, a recent World Bank study41 noted a deterioration 
in other indicators that directly affect the cons umer, such as delays in obtaining an electrical 
connection (estimated at 49 days) and the average duration of service interruptions (estimated at 
1.2 hours). 
71. Having faced considerable public opposition in recent years, a Special Joint Committee was 
set up to analyse the various electricity sector reform projects.  In that context, as at late 2006 there was no official text of the draft General Elect ricity Law, although MINAE had initiated discussions 
on this subject. 
72. The Costa Rican electricity grid is interconn ected with those of neighbouring Nicaragua and 
Panama.  The ICE is responsible for international interconnections. 
(5) S
ERVICES  
(i) Principal characteristics 
73. In 2005, the services sector accounted for just over 60 per cent of Costa Rican GDP, and 
62 per cent of total employment.  Table IV.3 shows the contribution to GDP and total employment 
made by the main service activities.  Trade, rest aurants and hotels, and community services are the 
leading subsectors on both measures. 
                                                      
40 ARESEP (2005), and online data consulted at :  http://www.aresep.go.cr/cgi-bin/index.  
fwx?area=09&cmd=servicios&id=9707&sub=1523. 
41 World Bank (2006), p 68. WT/TPR/S/180 Trade Policy Review 
Page 88 
 
 
Table IV.3 
Share of service activities in GDP and employment, 2001 and 2005 
(Percentages) 
Share of GDP Share of employment Service activity 
2001 2005 2001 2005 
Trade, restaurants and hotels 19.8 19.8 24.2 24.1 
Transport, storage and communications 8.5 9.7 5.4 6.1 
Financial services and insurance 5.2 6.1 1.8 2.0 
Real estate activities 4.6 3.8 5.9 5.8a 
Other business services 4.1 4.6 .. ..  
Public administration 4.1 4.1 4.5 4.6 
Community, social and personal services 19.0 18.6 17.7 19.8b 
Financial intermediation (measured indirectly) 3.8 4.7 .. .. 
Note: Figures for 2005 are preliminary. 
.. Not available. a Includes real estate and business activities. 
b Includes education, health, community and personal services, and domestic services. 
Source: Calculations by the WTO S ecretariat on the basis of BCCR data , Economic, Production and Employment 
Indicators.   See:  http://indicadoreseconomicos.bccr .fi.cr/indicadoreseconomicos/Cuadros/frmVerCatCuadro. 
aspx?idioma=1&CodCuadro=%20229). 
 
74. Costa Rica's Schedule of Specific Commitments under the WTO General Agreement on 
Services in Trade (GATS) is rather limited.42  It has adopted specific commitments in five of the 
12 GATS sectors:  business services;  educational serv ices;  financial services;  social and health 
services;  and tourism and travel-related services related to travel (Table AIV.2).  Costa Rica participated in the negotiations on financ ial services following the Uruguay Round, and the 
commitments undertaken are contained in the Fifth Protocol to the GATS (see Section (v) below).  
Costa Rica did not undertake any commitment on basic telecommunications (see Section (ii) below). 
75. For all sectors in the Schedule, with respect to both market access and national treatment, 
Costa Rica bound measures affecting the entry and temporary stay of managers, administrative 
directors, supervisors and general executives of  companies, guaranteeing a minimum of two such 
administrators in each company.  Nonetheless, it reserved the right to maintain restrictions on 
professional services, advertising services and land transport services (see (viii), below). 
76. Costa Rica adopted exceptions to the principle of most favoured nation treatment affecting 
business services, professional services and other services such as advertising.
43 
77. The Schedule of Specific Commitments guarantees  permission to provide an international 
passenger transport service for reward only to Cost a Rican companies or co mpanies whose capital is 
at least 60 per cent owned by Central American persons.  Costa Rican companies are defined as those 
in which at least 60 per cent of the capital is  owned by Costa Ricans.  The Schedule makes the 
granting of licences to provide international passe nger transport services for reward conditional on the 
principle of reciprocity.  Foreign vehicles, traile rs, containers and chassis originating outside the 
CACM may only transport goods that Costa Rica imports or exports outside that area.  Another 
exemption from MFN treatment contained in the Sche dule refers to bilateral promotion and protection 
agreements. 
                                                      
42 WTO document GATS/SC/22 of 15 April 1994. 
43 WTO document GATS/EL/22 of 15 April 1994. Costa Rica WT/TPR/S/180 
 Page 89 
 
 
78. In April 2004, Costa Rica submitted an initial offer in the framework of negotiations on 
services in the Doha Round.  As at Decembe r 2006, it had not submitted a revised offer. 
(ii) Telecommunications 
(a) Market features 
79. As at late 2005, Costa Rica had 24,500 public  telephone units installed across the country, 
equivalent to a density of 5.7 units per 1,00 0 inhabitants.  The number of mobile telephony 
subscribers grew by 171 per cent from 2002 to 2005;  in the latter year, the 1,365,000 subscribers represented a mobile line density of  31.55 per cent (the world average is 45.3 per cent).  The fixed 
telephony network became fully digital in 2005.  In  2005, the density of fixed lines in operation for 
every 100 inhabitants was 32.8 per cent;  10.2 per cent of households (subscribers) in Costa Rica have 
an Internet connection.
44 
80. Although fixed telephone line inst allation expanded continuously  in the period under review, 
network growth was insufficient because of shortc omings in the secondary network or insufficient 
availability of numbers in telephone exchanges.45  In December 2005, the cumulative demand 
problem persisted with a waiting list of 9,007 cust omers for conventional services already paid for, 
and a further 85,290 customers that had expressed  interest in obtaining a fixed telephone line. 
81. There is a general perception that the quality of services has improved.  For example, the 
completion rate for domestic calls in the fixe d telephony network rose from 56.5 per cent in 2001 to 
69 per cent in 2005.46  The completion rate for domestic ca lls in the fixed telephony network rose 
from 56.5 per cent in 2001 to 68 per cent in 2005.  In December 2005, the completion rate for mobile 
services was 78.9 per cent, with figures of 64.9 per cent for completed incoming international calls 
and 56.6 per cent for outgoing international calls.  A World Bank study47 shows that the reliability of 
telecommunication services in Costa Rica remains rela tively low.  For example, in 2004, the fixed 
telephony service suffered four interruptions totallin g 53 hours of service suspension, and the mobile 
telephony system suffered 12 interruptions totalling 1 50 hours of suspension. 
82. Investment in the sector has been declining, partly because the ICE surp lus has been used to 
purchase central government bonds.  The authorities also  indicated that the Central Government is one 
of the main debtors of the State telecommunications operator.48  In 2005, an expansion in the supply 
of GSM mobile telephony service49 (TDMA technology is also used in Costa Rica)50 was made 
possible through a rental contract with the equipment supplier. 
83. The authorities pointed out that a special concession is required to operate 
telecommunications services, and only the Cost a Rican Electricity Institute (ICE) and Radiográfica  
Costarricense  S.A. (RACSA)51 currently hold concessions (granted by their own laws).  Although 
there is no legal restriction establishing a monopoly in  favour of these institutions, in practice a State 
monopoly exists in the telecommunications sector through the ICE Group ( ICE Telecomunicaciones  
and RACSA).  ICE Telecomunicaciones  mainly provides basic local, long-distance (national and 
                                                      
44 Multipurpose household survey conducted by the National Institute of Statistics and Censuses. 
45 ARESEP (2005). 
46 Information online.  Consulted at:  http://w ww.ice.go.cr/esp/tele/planinf/indic_tele.htm. 
47 World Bank (2006), p.8. 
48 ARESEP (2005). 
49 Global System for Mobile Communications. 
50 Time Division Multiple Access technology. 
51 RACSA is a subsidiary of the ICE Group operating as a public limited company ( sociedad anónima ). WT/TPR/S/180 Trade Policy Review 
Page 90 
 
 
international) and mobile telephony services;  wh ile RACSA provides value-added services, Internet 
connection, and satellite communication services.  The authorities stated that RACSA maintains a 
commercial relationship with three cable companies that provide users with Internet access, managed 
by RACSA. 
84. A World Bank study has shown that telecommunication service prices in Costa Rica are 
generally competitive in the Latin American context.52  According to data from ARESEP, between 
2001 and 2005 the basic residential fixed telephone rate  increased by 12 per cent in nominal terms;  
the basic mobile rate fell by 3.3 per cent;  and th e per-minute price of inte rnational calls dropped by 
an average of 29 per cent.53  The authorities stressed that the law requires telecommunication services 
provided by ICE to be supplied at cost.  Noneth eless, in 2004-2005 the company suffered an annual 
operating loss on certain services, which is offset by surpluses generated in other systems, particularly 
mobile services. 
(b) Regulatory framework 
85. Since May 2006, telecommunications policy has been formulated by the Ministry of the 
Environment and Energy (MINAE), under the Organizational Regulation of the Executive Branch, 
Decree No. 33151 of 8 May 2006.  Regulation, incl uding price setting and the supervision of quality 
standards, is the responsibility of the Public Services Regulatory Authority (Autoridad Reguladora de 
Servicios Públicos - ARESEP).  Radio and television concessions  are granted by the Government; and 
the radioelectric spectrum is owned exclusively by the State.54 
86. As mentioned above, Law No. 3293 of 18 June 1964 and its precursors authorize the ICE to 
operate telecommunication services with in national territory for an i ndefinite time period.  Although 
the current legal framework does not give ICE the exclusive right to provide services, the Constitution 
requires any new concession awarded to another firm to be approved by the Legislative Assembly, or 
a general law.55  Law No. 7298 of 5 May 1992 grants RACS A an independent concession to operate 
telecommunication services until May 2017.  Under the same law, the ICE Group is prohibited from selling its stake in RACSA, either wholly or partially.  There are no private networks in Costa Rica 
with concessions to provide public telecommunication services.
56 
87. Deliberate reversal of the direction of intern ational long-distance traffic (call back) is not 
allowed, nor is any other technical arrangement that  changes the origin or destination of calls.  The 
ICE is empowered to investigate such calls a nd to disconnect subscribers if fraud is proven.57 
88. Telephone charges are subject to approval and oversight by ARESEP.  Although Law 
No. 7593 of 9 May 1996 states that rates should be  determined mainly according to the costs of 
providing the service, it also states that social equity, environmental sustainability and energy 
conservation criteria are also crucial for rate-setting. 
                                                      
52 World Bank (2006), p.8. 
53 Information online.  Consulted at:  http://www .aresep.go.cr/cgi-bin/index.fwx?area=08&cmd= 
servicios&id=4949&sub=6640. 
54 Radiocommunications Regulation of 28 June 2004. 
55 Article 121(14) of the Political Constitution of Costa Rica. 
56 Defined as fixed or mobile services that can be provided through public infrastructure and consist of 
the transmission of voice or data signals. 
57 Article 55 of the General Regulation on Telecommunications Services.  Consulted at:  
http://www.aresep.go.cr/docs/Dec30110-MP-G-M EIC_Reglo_Gral_Serv_Telecom_ARESEP.pdf. Costa Rica WT/TPR/S/180 
 Page 91 
 
 
89. In early 2000, the authorities tried to push through a proposal to open up the 
telecommunications sector.  However, opposition to the proposal forced its withdrawal, and instead a 
Special Joint Committee was establishe d to study different alternatives for reforming the sector.  The 
Commission's work produced a draft law entitled Par tial Reform of the Law Establishing the Costa 
Rican Electricity Institute, No. 449 of 1949 (Legisla tive file No. 14.669), but it was never passed.  In 
2002, a number of deputies tabled another draft entitled Law to Strengthen and Modernize the Costa Rican Electricity Institute
58, which was reviewed by a new Special Joint Committee, but once again 
was not approved. 
90. In October 2006, the Government submitted to the Legislative Assembly new drafts of the 
General Telecommunications Law and the Law on stre ngthening and moderniza tion of public entities 
in the telecommunications sector.  The first of th ese aims to open up the telecommunications market 
to private enterprises;  to reorganize the sector  by separating the supervisory, regulatory and 
operational functions, all three of which are currently exercised by the State;  and to create a fund to finance the universalization of services.  At the same time, the strengthening plan reorganizes the sector and seeks to make the regulatory framework governing the ICE more flexible, by increasing its 
borrowing limit and facilitating the purchase and pr ocurement of goods and services by the ICE and 
its subsidiaries.
59  Both draft laws are part of the paralle l agenda to the Free Trade Agreement between 
the Dominican Republic, Central America and the Un ited States, which Costa Rica had not ratified by 
late 2006 (see Chapter II). 
91. Costa Rica maintains no commitments on teleco mmunication services in the framework of its 
specific WTO undertakings60, and it did not participate in the negotiations following the Uruguay 
Round. 
92. Costa Rica is a member country of the Cent ral American Telecommunications Commission 
(COMTELCA) and a signatory of the Central Amer ican Telecommunications Treaty.  Under that 
treaty, charges for telephone services should be equiva lent in both directions;  and for calls within 
Central America, the country that or iginates the call keeps all the revenue. 
93. The Radio Law, No. 1758 of 1954, and Regula tion No. 63 of 11 December 1956 (amended by 
Decree No. 10015 of 17 April 1979) among other thi ngs established provisions on the procedure for 
granting licences to operate frequencies within the electromagnetic spectrum.  Persons applying for a licence must be Costa Rican citizen s, or, in the case of firms, at least 65 per cent Costa Rican 
owned.
61 
(iii) Postal services 
94. Postal services are open to private sector participation.  Traditional mail services62 can be 
provided by any natural or legal person, domestic  or foreign, having received a concession from the 
State.  Under Law No. 7768 of 24 April 1998, the con cession is granted by the Ministry of the Interior 
and Police for a maximum five-year period, renewable for equal periods.  The regulation also 
establishes, however, that it is a State obligatio n to provide the postal service throughout national 
                                                      
58 Proposal for amendment of Law No. 449 of 8 April 1949, as amended (File No. 15.033). 
59 Information online.  Consulted at:  http://www.nacion.com. 
60 WTO document GATS/SC/22 of 15 April 1994. 
61 With respect to this nationality requirement, the Constitutional Court ruled that foreigners can be 
restricted from participating in a given economic activity, but the restriction is not applicable to the provision of 
beeper messaging services.  Constitutiona l Court, No. 3060 of 24 April 2001. 
62 Traditional mail is defined as letters weighing less th an 2 kg, classified as 'LC' mail according to the 
Universal Postal Unio n (UPU) Convention. WT/TPR/S/180 Trade Policy Review 
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territory through Correos de Costa Rica .  Traditional mail services are considered a public service and 
are therefore regulated by ARESEP, which is also  responsible for setting rates and supervising 
quality. 
95. In contrast, courier services for domestic or international deliveries are not regulated.  
Correos  de Costa Rica  provides an express mail service (EMS).63  International carriers such as DHL, 
Interlink and Federal Express typically ha ve the lion's share of this market. 
(iv) Audiovisual services 
96. Audiovisual services in Costa Rica are regulat ed by the Radio Law (Law No. 1758 of 
19 June 1954), together with the Regulation to the National Frequency Allocation Plan of 
6 November 1998, and the Radiocommunica tions Regulation of 24 June 2004. 
97. Costa Rican legislation contains restrictions on the principle of national treatment.  Only 
Costa Rican citizens, or companies in which Costa Ricans hold at least 65 per cent of the capital, may 
establish, manage and operate wireless service companies.  However, the right to establish and operate amateur radio stations ma y be granted to foreigners resident in Costa Rica provided their 
country of origin grants the same right to Cost a Rican citizens.  Concessions for private commercial 
radiocommunication services are granted by the Government for a period of 15 years, or 20 years in 
the case of radio or television broadcasting services, whether open-access or subscription-based. 
98. The restrictions applied to radio, television and cinema programmes include the following:  
the announcers on radio and television advertisemen ts, whether Costa Rican or foreign, must be 
registered with the National Radio Control Service ( Control Nacional de Radio );  jingles recorded 
abroad are subject to a tax of C 1,000 for every one that is broadcast;  only 30 per cent of filmed 
commercial advertisements played daily in each televi sion station or cinema may be of foreign origin;  
the importation of short commercials from outside the Central American Common Market (CACM) is 
subject to a tax of 100 per cent of their value, wh ich may in no case be less than C10,000 or greater 
than C50,000 (short radio, cinema or televisi on commercials made in any of the other CACM 
countries with which there is reciprocity are deemed to be national);  the number of radio plays and 
radio serials recorded abroad and broadcast daily  by each broadcasting station may not exceed 50 per 
cent;  and the number of filmed or video-record ed programmes made abroad may not exceed 60 per 
cent of total daily programming. 
99. The draft General Telecommunications Law (see  above) includes changes to the Radio and 
Television Law, in particular:  (i) establishment of a scheme for administration and control of the 
radio spectrum, including the possibility of assigning and reassigning frequencies;  and  
(ii) concessions to provide radio and televisi on broadcasting services are granted by the ARESEP 
Board of Directors.  In addition, the draft La w on the strengthening and modernization of public 
entities in the telecommunications sector proposes to  integrate the functions of the Radio Control 
Department with ARESEP. 
(v) Financial services 
(a) Introduction 
100. In 2005, financial services (including insurance) accounted for 5.6 per cent of Costa Rican 
GDP, up from 4.7 per cent in 2001.  Although increasi ngly diversified, the financial sector remains 
                                                     
 
63 Express Mail Service. Costa Rica WT/TPR/S/180 
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centred on traditional banking intermediation.64  The sector is dominated by financial groups that 
typically include a domestically-established (onshor e) bank, an offshore bank, a stock broker, an 
investment fund, an insurance marketing fi rm, a pension fund and a mortgage company.65 
101. The number of banks fell from 20 in 2001 to 16 in  2006 as a result of mergers and controlled 
withdrawals;  in addition, a number of merg ers and acquisitions are currently in process.66  O f  t he  
16 banks remaining, three are State-owned (Banco Nacional de Costa Rica, Banco de Costa Rica and 
Banco Crédito Agrícola de Cartago), while two are non-State public entities (Banco Popular y de 
Desarrollo Comunal, and Banco Hipotecario de la Vi vienda).  In December 2006, the banking sector 
also included nine lending institutio ns, two mutual funds, 28 cooperatives67, and the Caja de Ande.  
Eight foreign-owned banks are also pa rt of the national financial system. 
102. The National Financial System (SFN) includ es public banks, housing banks, private banks, 
non-bank financial companies, regulated savings a nd loan cooperatives, regulated foreign exchange 
offices and financial groups and conglomerates.  To tal assets in the SFN amounted to C7733.1 billion 
(US$14.846 billion) as at September 2006, representing an increase of 234 per cent over the mid-2000 
figure.  State-owned banks continue to dominate th e SFN with 57.0 per cent of total assets, of which 
49.8 per cent is held by the Banco Nacional de Co sta Rica, 29.3 per cent by the Banco de Costa Rica 
and 17.0 per cent by the Banco Crédito Agrícola de Cartago.  The three largest private banks (Banco 
Interfin S.A., Banco BAC San José S.A. and Banco Bañes S.A.) hold 16.8 per cent of total SFN assets 
and account for 58.0 per cent of private banking assets.68 
103. The predominance of State-owned banks results from regulatory and fiscal asymmetries, 
including a government guarantee on all their liabi lities (there is no deposit insurance for private 
banks).  In addition, private banks are required to ho ld at least 17 per cent of their short-term deposits 
in State banks at below-market interest rates (see below)69 to be able to receive deposits from the 
public;  and there is an 8 per cent tax exemption on re turns at maturity for holders of fixed-term dollar 
deposit certificates issued by State banks.  On the ot her hand, the authorities indicated that the State 
banks, for their part, are subject to costly and cumbersome public procurement procedures. 
104. A regulatory framework that does not provide for the supervision of banks based abroad, 
together with a number of operational facilities and th e possibility of avoiding tax payments on certain 
operations performed abroad, have  continued to provide incentives for financial activities conducted 
through offshore banks — entities legally establishe d abroad but owned by Costa Rican financial 
groups.  Offshore banks conduct most of their de posit-taking and lending activities with Costa Rican 
residents.  In September 2006, the assets of Costa Rican banks headquartered abroad were estimated 
to account for nearly half of total private bank assets.70 
105. To all intents and purposes only one insuran ce firm, the State-owned National Insurance 
Institute (INS) may issue insurance policies in Costa Rica;  the life insurance company of the National 
Teachers Union also offers an insurance policy but only to specific groups of people (mostly in-
service and retired teachers).  Premiums amounted to US$348 million in 2004, of which non-life 
                                                      
64 World Bank and IMF (2003). 
65 IMF (2003). 
66 In the second half of 2006, it was announced that the Banistmo financial group had been taken over 
by HSBC, and that Banco Uno and Banco Cuscatlán had been bought by Citibank. 
67 Two cooperatives were in the process of merging in late 2006. 
68 SUGEF, financial statements of the entities as at September 2006. 
69 IMF (2004). 
70 BCCR (2006c). WT/TPR/S/180 Trade Policy Review 
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premiums totalled US$320 million, and life premiums US$28 million.71  Insurance policies are 
retailed through 33 INS branches and service points, 69 insurance brokers, 137 insurance agents, and 
10 insurance banks, which are banks or other financial entities that sell INS insurance. 
106. During Costa Rica's previous review, the aut horities stated that the insurance market was 
affected by a number of problems, including high costs in some product lines and a narrow range of 
the specific insurance policies that are sold in more competitive mark ets.  Nonetheless, the authorities 
stated that other insurance lines were highly competit ive thanks to the relations that the INS maintains 
with reinsurance companies, whic h allow for competitive premiums, coverage and deductibles.  On 
the other hand, a distortion persists because INS inv estments have to be undertaken within guidelines 
set by the Ministry of Finance, which respond more to public sector funding requirements than to 
profitability criteria. 
107. Costa Rica accepted the Fifth Protocol to the GA TS, which was incorporated in its legislation 
by Law No. 7897 of 18 August 1999.  Costa Ri ca's GATS Schedule of Specific Commitments 
contains commitments for various subsectors of banking services and other fi nancial services, relating 
to market access and national treatment.  Most of the commitments concern the mode of supply 
involving commercial presence (mode 3).  Costa Rica  has undertaken no specific commitments for the 
provision of any type of insurance services. 
(b) Institutional and legal framework 
108. Three bodies are responsible for supervising fi nancial entities in Costa Rica:  the General 
Supervisory Authority for Financial Entities ( Superintendencia General de Entidades Financieras  - 
SUGEF);  the General Supervisory Authority for Securities ( Superintendencia General de Valores  - 
SUGEVAL);  and the Supervisory Authority for Pensions ( Superintendencia de Pensiones  - SUPEN), 
which operate under the auspices of a governing b ody known as the National Council for Financial 
System Supervision ( Consejo Nacional de Supervisión del Sistema Financiero  - CONASSIF).  
CONASSIF is responsible for establishing basic supe rvision policy, and it supervises and coordinates 
the work of the three supervisory authorities, wh ich are highly decentralized organs of the BCCR.  
SUGEF supervises all banks, financial institutions, mutual funds, cooperatives, foreign-exchange 
offices, and the Caja de Ande ;  while SUGEVAL supervises stock exchanges, securities central 
depositories, book entry systems, securities exchange traders, issuing houses, risk raters, custodians, 
and investment funds;  and SUPEN  supervises pens ion operators and funds.  There is no supervisory 
authority for the insurance sector. 
109. During the period under review, financial sector legislation has been amended several times, 
mainly in the area of supervision and prudential re gulations.  The core legislation governing the Costa 
Rican financial system includes (Number of Law/La test amendment, in brackets):  Law on Insurance 
Monopoly and the National Insurance Institute (L aw No. 12 of 30 October 1924/Law No. 5279 of 
27 July 1973);  Law on Administration of the INS Reinsurance Monopoly (Law No. 6082 of 
30 August 1977/n.a.);  Law on Modernization of th e Financial System of the Republic (Law No. 7107 
of 4 April 1988/Law No. 7494 of 2 May 1995);  Organic Law on the National Banking System (Law 
No. 1644 of 26 September 1953/Law No. 7558 of 2 November 1995);  Law Regulating Non-Bank 
Financial Enterprises (Law No. 5044 of 13 Sept ember 1972/Law No. 7558 of 3 November 1995);  
Law Regulating the Securities Market (Law No. 7732 of 12 December 1997/Law No. 8343 of 
18 December 2002);  Regulation on Authorization fo r the Establishment, Opening and Operation of 
Private Banks (R. No. 4135 of 26 March 1986/March  2006);  Organic Law on the Central Bank of 
                                                      
71 Insurance Information Institute, Costa Rica, consulted at 
http://www.internationalinsurance.org/ static/site/international/countryprofile s/costarica.pdf#se arch=%22swissre
%20costa%20rica%20%20ins%22. Costa Rica WT/TPR/S/180 
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Costa Rica (Law No. 7558 of 3 November 1995/Law No. 8447 of 24 May 2005);  and Regulation on 
the Establishment, Transfer, Registration, a nd Operation of Financial Groups (R. No. 4931 of 
24 October 1997/September 2006).72 
(c) Banks 
110. Private banks, whether domestically or fore ign-owned, all have to fulfil the same 
requirements.  According to Law No. 1644 priv ate banks must be established as public limited 
corporations ( sociedades anónimas ) or as cooperative federations or unions;  foreign branches are 
therefore not allowed.  Representative offices that  do not provide financial services are permitted, 
however.  The law grants the BCCR the power to set minimum capital requirements.  In 2006, the 
BCCR changed the minimum capital requirement to C5,001 million (US$9.7 million).  The legal 
reserves of banks are considered part of the capita l.  There is no limit on foreign ownership of a 
private bank.  In addition to the corporate tax of 30 per cent, all banks are subject to an additional tax 
of 5 per cent to be used to finance subsidized student loans.73 
111. Banks are the only institutions authorized to accept deposits in current accounts.  However, 
private banks may only do so if they satisfy one of the following requirements:  (i) maintain a 
minimum balance of loans with the State banks e quivalent to 17 per cent, after deduction of the 
required cash reserve corresponding to its total 30- day or shorter term deposits, in both local and 
foreign currency;  or (ii) establish at least four agencies or branches providing basic banking services, 
                                                      
72 Other relevant legislation includes (No. of law in brackets):  Law regulating the financial 
intermediation activity of cooperative organizations (Law No. 7391 of 27 April 1994);  Destination of profits 
obtained by banks from auctioned assets (Law No. 4631 of 18 August 1970/1995);  Law on cooperative 
associations and establishment of the Cooperative Prom otion Institute (Law No. 4179 of 22 August 1968);  
Organic Law on the Banco Popular y de Desarrollo Comunal (Law No. 4351 of 11 July  1969);  Law on worker protection (Law No. 7983 of 16 February 2000), Regulations to determine the capital adequacy of financial 
groups and other conglomerates (R. Law  320.1 of 20 August 2002);  Regulation on external auditors and 
corporate governance measures applicable to entitie s supervised by SUGEF, SUGEVAL and SUPEN (R.  
No. 514 of 23 June 2005);  Law on the National Financial System for housing and establishment of the Banco 
Hipotecario de la Vivienda (Law No. 7052 of 13 Nove mber  1986);  Regulatio n on the Credit Information 
Centre (R. No. 579 of 25 May 2006.);  Regulation on investments by regulated entities (R. No. 355 of 11 February 2003);  Regulation on public offerings (R. No. 571 of 20 April 2006);  Regulation on registration 
with SUGEF of natural or legal persons undertaking any of the activities described in Article 15 of Law 
No. 8204 (R. No. 509 of 17 August 2006);  Regulation to assess the economic-financial situation of supervised entities (R. No. 197-B of 11 December 20 00);  Regulation on debtor classifi cation (R. No. 540 of 24 November 
2005);  Private Complementary Pensions Regime (Law No. 7523 of 7 July 1995); Regulation on enforcement of 
the law on narcotics, psychotropic substances, unauthor ized drugs, money laundering and related activities (R. 
No. 447 of 29 June 2004).  Accounting regulation appli cable to entities supervised by the General Supervisory 
Authority for Financial Entities, the General Supervis ory Authority for Securities, and the Supervisory 
Authority for Pensions and Non-Financial Issuers (R. No. 424 of 9 March  2004);  Regulation on the capital adequacy of financial entities (SUGEF 3-06) (R. No. 547  of 5 January 2006), Regulation on the supply of 
periodic information, relevant facts and other information requirements (R. No. 81-A of 18 March 1999), 
Custody Regulation (R. No. 593 of 27 July  2006), Re gulation on classification of securities and risk rating 
companies (R. No. 612 of 2 November  2006), Regulation on prudential rules applicable to securities exchange 
traders (R. No. 387 of 12 August 2003), General Regulation on investment fund management companies (R. No. 569-1 of 6 April  2006), Regulation on the opening and operation of authorized entities and the operation of 
pension funds, labour capitalization and voluntary savings envisaged in the Worker Protection Law (R. No. 216 
of 19 March 2001), and Accounts Plan for Financia l Entities (Regulation of January  2003).  Additional 
information available on the Supervisory Authority web sites (www.sugef.fi.cr, www.sugeval.fi.cr, 
www.supen.fi.cr) and the site of the Costa Rican Lega l Information System (http://www.pgr.go.cr/scij/index 
_pgr.asp). 
73 IMF (2004). WT/TPR/S/180 Trade Policy Review 
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both lending and borrowing, in five specified regions .  Under the first option, State banks pay private 
entities a rate of interest on their deposits equivalent  to 50 per cent of the borrowing rate set by the 
BCCR or the monthly LIBOR rate, depending on the currency of the deposit.  Under the second 
option, private banks must maintain a balance equiva lent to at least 10 per cent of deposits in credits 
for development programmes determined by the Government.74 
112. Applications for authorization to open a bank must be submitted to the SUGEF.  The 
applicant must be a beneficiary of a contingency cred it equivalent to at least 20 per cent of capital and 
granted by a first-tier bank (either domestic or fo reign).  The contingency credit may be replaced by 
depositing an equivalent sum with the BCCR in the form of high-liquidity securities accepted by the 
SUGEF.  On the basis of a favourable opinion by the SUGEF, CONASSIF may authorize the 
organization and establishment of a private bank, following which the SUGEF grants a licence to initiate operations.  No private bank can initiate ope rations until it has its capital fully subscribed and 
paid up in cash in colons, which must  be deposited with the BCCR as evidence. 
113. Authorization by CONASSIF, supported by a favourable opinion from the SUGEF, is 
required to transfer or sell more than 10 per cent of the equity shares in a bank.  Authorization by the 
SUGEF is needed when the transfer or sale of 10 per cent or less is involved and the buyer will hold 
no more than 10 per cent of the shares;  if th e latter limit is exceeded, the transaction must be 
authorized by CONASSIF subject to a favourable opinion of the SUGEF. 
114. All banks conducting operations in Costa Rica must comply with supervisory and reporting 
regulations.  CONASSIF is  responsible for issuing prudential regulations and the SUGEF exercises 
supervision.  CONASSIF is empowered to withdraw banking licences for major offences. 
115. During the period under review, several reforms have been introduced to enhance financial 
sector supervision.  In 2002, a new accounting c ode was adopted, which came into force in 
January 2003;  in 2004, standa rds on reporting by financial ins titutions and conglomerates were 
enacted;  in 2005 a new regulation for debtor classi fication was approved;  and in 2006 the new rules 
on capital adequacy for financial institutions were adopted. 
116. Until 2005, all offshore operations had to be repo rted to local supervisors.  That year, 
however, the office of the Attorney General of th e Republic declared that the SUGEF did not have 
supervisory jurisdiction over banks based abroad th at formed part of Costa Rican financial groups.  
Since then, the banking authorities have been seeking to close the legal loophole;  the Congress has 
been studying a draft text on strengthening financia l system supervision, which was expected to be 
adopted by the end of 2006.  The SUGEF has also signed memoranda of understanding (MOUs) with 
the supervisory authorities of countries where Costa Rican offshore entities are incorporated.  As at 
December 2006, memoranda of understanding were  in force with the Bahamas, El Salvador, 
Guatemala, Honduras, Nicaragua and Panama. 
117. According to the IMF, the implementation of consolidated supervision in Costa Rica has 
encountered several practical obstacles.
75  The MOUs that have been signed with supervisory agencies 
in countries of establishment have been of limited prac tical effect.  The IMF also notes that the lack of 
an adequate legal and regulatory framework for the consolidated s upervision of banks and affiliated 
entities has been one of the main reasons for Cost a Rica's limited compliance with the Basel Core 
Principles.  In 2005, a proposal was made concer ning consolidated supervision to increase the powers 
of the supervisory authorities to regulate and supervise all entities of  financial groups (including Costa 
                                                      
74 These credits must be placed at a rate not higher than the basic borrowing ra te of the Central Bank 
for colon-denominated loans, or the monthly LIBOR rate for funds in foreign currency. 
75 IMF (2003) and IMF (2004). Costa Rica WT/TPR/S/180 
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Rican offshore entities), and to improve the mechan isms for liquidating entities with problems.  The 
Legislative Assembly considered a preliminary vers ion of the draft, but, as it could not be approved 
before the end of the previous legislature in Apr il 2006, a new text was drafted which maintained the 
same principle of consolidated supervision, and has been sent to the Execu tive for submission to the 
Legislative Assembly in 2007. 
(d) Insurance 
118. There has been no change to the core legislati on on insurance activity since the last Review of 
Costa Rica.  Costa Rica c ontinues to maintain a State monopoly ov er the insurance sector through the 
National Insurance Institute (INS).  This is the onl y entity allowed to underwrite insurance policies, 
although commercial banks are allowed to market its insurance products.  Unlike other financial 
services activities, insurance does not ha ve a specific sector monitoring body. 
119. The Law on Insurance Monopoly and the Natio nal Insurance Institute and the Law on 
Administration of the Reinsurance Monopoly grant the INS a monopoly over all types of insurance including life insurance, damage and civil liabilit y, and reinsurance.  An exception is made for 
contracts concluded by the national life insuranc e companies constituted as cooperatives or mutual 
societies and which existed at the time the La w on Insurance Monopoly and the National Insurance 
Institute was adopted.  Of these, the only product re maining is the compulsory mutual life insurance 
policy administered by the National Teachers Unio n Life Insurance Company.  Another exception 
consists of insurance on imported goods during inward clearance or international transit through Costa 
Rica, and international means of transport passing through Costa Rica, which may be contracted 
abroad.  According to the International Bank fo r Reconstruction and Development (IBRD), this 
monopoly has stunted the development of domestic in surance markets and fostered inefficiencies, 
limiting consumer choice.
76 
120. In relation to reinsurance, the INS transfers its  risks, in accordance with technical decisions 
on each insurance line,  to top-tier international re insurers.  All insurance operations undertaken by 
the INS are guaranteed by the State. 
121. Two draft laws have been prepared in orde r to reform the insurance market:  the Law 
regulating the insurance market and th e Law regulating insurance contracts.77  The former provides, 
inter alia , for the opening up of the insurance sector to  competition and regulation, which would be 
supervised by a proposed Insurance Supervisory Aut hority.  The draft law also contains a regulation 
that seeks to close down the cland estine insurance market, where sev eral foreign private companies 
informally sell life, health and personal accident insu rance.  The Law regulating insurance contracts is 
expected to update insurance policy regulation.  In late 2006, both drafts were being analysed by the 
Economic Affairs Committee of the Legislative Assemb ly.  Draft laws to liberalize insurance services 
are part of a parallel agenda to the Free Trad e Agreement between the Dominican Republic, Central 
America and the United States (see Chapter II (6)). 
(vi) Air transport 
(a) Market features 
122. In 2006, there were three international airports in Costa Rica:  Juan Santamaría near San José, 
Daniel Oduber in the tourist area of Guanacaste pr ovince, and Puerto Limón.  Local air services 
operate out of an airport in San José and othe r smaller ones in a number of cities.  The Juan 
                                                      
76 International Bank for Reconstruction and Development/World Bank (2003). 
77 Both draft laws can be consulted online at  http://portal.ins-cr.com /General/Publicaciones/. WT/TPR/S/180 Trade Policy Review 
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Santamaría airport continues to handle the majority  of all domestic traffic, international passenger 
traffic, and air freight.  International passenge r traffic grew from 2,056,451 passengers in 2001 to 
3,395,424 in 2005 (a  65.1 per cent increase);  and the number of  domestic passengers increased from 
181,204 in 2001 to 223,457 in 2005 (up by 23 per cent).  The total volume of cargo handled dropped 
by 5.2 per cent from 67,830,754 tonnes to 64,338,604 tonnes in 2005. 
123. As at December 2006, air transport services were distributed as follows:  20 firms providing 
passenger, freight and regular mail services;  eight firms carrying passengers, freight and non-regular mail;  seven firms providing regular freight services;   and 10 firms carrying non-regular freight.  One 
company has the status of national carrier on international routes, Líneas Aéreas Costarricenses  S.A.  
(LACSA), which is part of the TACA group.  In late 2006, no foreign firms were providing domestic 
air services in Costa Rica. 
124. Airport infrastructure development and m odernization have been outsourced under 
concession, but the process seems to have run into  difficulties.  During the period under review the 
management, operation and development of the Juan Sa ntamaría International Airport, was contracted 
out, including financing and construction of the wo rks required to satisfy current and future demand 
under the master plan for this airport.  The management contract am ounted to US$240 million over 
20 years. 
125. According to the Office of the Comptroller General
78, despite the progress made, by late 2005 
it had been impossible to consolidate the developm ent of airport infrastructure projects because of 
persistently lengthy administrative procurement pr ocesses.  Again according to the Office of the 
Comptroller General79, the works at the Juan Santamaría Inte rnational airport were facing difficulties 
relating to the implementation of the management c ontract, which triggered a lengthy interruption of 
construction works and contractual problems.  In th e case of other local airports and aerodromes, little 
modernization has been achieved owing to a lack of investment and the slow pace of the works. 
126. Costa Rica did not undertake any commitments under the GATS in relation to air transport.80 
(b) Regulatory framework 
127. The General Law on Civil Aviation (Law No. 5150 of 14 May 1973) continues to govern the 
conditions of civil aviation operations.  The lat est reform to Law No. 5150 was made through Law 
No. 8419 published in La Gaceta  No. 140 of July 2004.  Civil aviation is also governed by 
international treaties and conventions currently in force. 
128. The Civil Aviation Technical Council (Consejo Técnico de Aviación Civil ) and the 
Directorate General of Civil Aviation ( Dirección General de Aviación Civil  - DGAC), under the 
Ministry of Public Works and Transport, are r esponsible for the regulation and control of civil 
aviation in Costa Rica.  The DGAC implements the resolutions of the Civil Aviation Technical 
Council81, and has decision-making power on the granti ng of licences and certificates of airworthiness 
and air traffic;  it also supervises and administer s domestic aerodromes and airports, and oversees the 
Costa Rican Aeronautical Register. 
129. Law No. 5150 states that only Costa Rican natural and legal persons have the right to operate 
local public air services, whether regular or non-regula r.  To be entitled to operate the service, legal 
                                                      
78 Contraloría General , Annual Report 2005, p. 250. 
79 Contraloría General , Annual Report 2005, pp. 144-146. 
80 See WTO document GATS/SC/22 of 15 April 1994. 
81 For a full description of these powers, see Articles 10 and 18 of Law No. 5150. Costa Rica WT/TPR/S/180 
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persons must also meet the following conditions:  (i)  at least 51 per cent of their capital must be 
owned by Costa Ricans;  and (ii) effective control of  the company and its management must also be in 
Costa Rican hands; and no foreigner may be a member of the Executive Board. 
130. Law No. 5150 gives the Civil Aviation Technical Council decision-making authority on 
passenger, freight and connection prices applied by air transport companies, whether domestic or 
international.  The Civil Aviation Technical Council is also responsible for analysing, determining 
and applying rates established by Government d ecree, for the provision of airport and auxiliary 
services.  In fixing and applying rates, account may be taken, among other things, of differences in the 
economic capacity of the companies that provide international services. 
131. The DGAC's powers include control of auxiliary air navigation services.82  When it is in the 
public interest, the Civil Aviation Technical Council ma y act on behalf of the Government to contract 
directly for the supply of such services from tec hnically competent entities, or grant permits to non-
profit Costa Rican companies. 
132. Article 121 of the Political Constitution establishes that national airports83 in service may not 
be sold, rented or encumbered, nor in any way be removed from State ow nership and control.  
International airports84, both new and existing, and the servi ces they provide, can only be made 
subject to concession contracts under the procedur es of Law No. 7762 of 2 April 1998 (General Law 
on the Concession of Public Works with Public Se rvices).  In the framework of Law No. 7762, the 
process of granting concessions to the private sector fo r investment in and operation of airports has 
continued under the guidelines of the Civil Aviation Technical Council.  Law No. 5150 authorizes 
private airports, which are limited to a maximum runway length of 1,500 m;  the authorities stated that 
they are considering amending this limit. 
133. Under Law No. 7762, in all concession contract s, any works constructed and any that are 
incorporated into the property shall be consider ed to be owned by the administration granting the 
concession. 
134. Under Articles 149 and 150 of Law No. 5150, fo reigners are not issued licences to operate 
public air services if the applicant's State of origin has not granted the relevant authorization for the 
operation of the proposed international services, or if Costa Rican companies are not given reciprocity.  Under Article 156 of Law 5150, nor ar e such licences issued to foreign companies when 
authorization of the service is contrary to nati onal interests or inconsistent with international 
conventions signed by Costa Rica. 
135. The airport services concession for the Juan Santam aría International Airport took the form of 
an "interested management" ( gestión interesada ) contract.
85  This is an arrangement whereby a third 
party (in this case a private individual) acts on beha lf of the State, which charges for the service and 
pays the management company a previously defined fee.86  The public entity remains responsible for 
the asset, employing the management company as admi nistrator.  Responsibility for the public service 
provided remains with the State. 
                                                      
82 Auxiliary air navigation services are regul ated by Articles 127-130 of Law No. 5150. 
83 Nor may railroads or wharfs. 
84 And also railroads and wharfs. 
85 The Government promulgated the Regulation on Contracts with Management Companies for Airport 
Services through Executive Decree No. 26801-MOPT, of 19 March 1998. 
86 See, for example, Legal Opinion 097-J of 14 July 2005 issued by the Constitutional Prosecutor:  
http://www.pgr.go.cr/scij/busqueda/normativa/pronunci amiento/pro_ficha.asp?param6=1&nDictamen=13285. WT/TPR/S/180 Trade Policy Review 
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136. Costa Rica has open skies agreements in force with the United States and Chile.  The first 
agreement signed with the United States entered into force in 198387, and the second on 
13 January 1999.  The agreement between Costa Ri ca and Chile came into force on 2 March 2001 and 
was revised in 2003.  Costa Rica has granted fifth freedom rights to European operators via Miami, 
with a view to increasing the number of tourists visiting Costa Rica.88  It has also negotiated other air 
transport agreements with Argentina, Aruba, Boliv ia, Brazil, Canada, China, Colombia, Cuba, the 
Dominican Republic, Ecuador, Germany, Mexico, th e Netherlands, Panama, Pa raguay, Peru, Spain, 
Trinidad and Tobago, United Kingdom, and Venezuela.   
(vii) Maritime transport 
(a) Market features 
137. The country's port infrastructure is split along ge ographical lines, with ports on the Pacific 
coast under the Costa Rican Pacific Ports Institute ( Instituto Costarricense de Puertos del Pacífico  -
INCOP)89 and those of the Atlantic seaboard under the Atlantic Coast Port Administration and 
Economic Development Board ( Junta de Administración Portuaria y de Desarrollo Económico de la 
Vertiente Atlántica - JAPDEVA).90  Puerto Caldera is the main terminal managed by INCOP, and the 
country's only port for grain imports.  Alternative small-scale ports under INCOP supervision include 
Puerto Morales for bulk freight (sugar and other si milar products) and liquids;  Puntarenas which is a 
tourist harbour that has been remodelled to receive  cruise liners;  and Quepos serving pleasure yachts, 
small boats and sporting vessels. 
138. The only entity (public or private) with respons ibility for Atlantic ports is JAPDEVA, which, 
however, has put cargo handling and loading-unloading services under concession.  The Limón-Moín 
port complex, administered by JAPDEVA, is the largest in the country.  In 2005, this complex 
handled 8,147,200 tonnes of freight, equivalent to  roughly 73.7 per cent of Costa Rica's total port 
movement which, in that year91, amounted to 11,050,800 tonnes.92 
139. Port infrastructure in Costa Rica is facing serious problems — chiefly operational and 
warehouse clearance costs that are higher than intern ational standards, profits that are insufficient to 
generate funds for investment in infrastructure, ch arges that do not reflect operating costs, and very 
long unloading and waiting times at the quayside.  The JAPDEVA Organic La w makes the institution 
responsible for ensuring development of the region,  and over 10 per cent of its revenues are destined 
for this purpose. 
140. According to a World Bank study93, about 70 per cent of firms participating in Costa Rica's 
foreign trade use maritime transport for their imports , with nearly two thirds of the country's imports 
entering through Atlantic ports.  The fact that ar ound 35 per cent of firms use port services for exports 
reflects the increasing use of Panamanian ports as export outlets.  The World Bank study also notes the need for modernization in ports that handle cargo and containers, especially on the Atlantic coast.  
Ports have been identified by firms as a major bottle neck, so their reform and improved road access to 
them is an urgent matter.  The World Bank also no tes that the port modernization on the Pacific coast 
promoted by INCOP since 2001 has not materialized. 
                                                     
 
87 See http://www.icao.int/icao/en/atb/ecp/Cas eStudies/CostaRica_Liberalization_Sp.pdf. 
88 See http://www.icao.int/icao/en/atb/ecp/Cas eStudies/CostaRica_Liberalization_Sp.pdf. 
89 See http://www.incop.go.cr/. 
90 See http://www.j apdeva.go.cr/. 
91 See http://www.eclac.cl/transp orte/Perfil/ppregion02.asp. 
92 See http://www.eclac.cl/transpor te/Perfil/ppgen.asp?code=12. 
93 World Bank (2006), p 68. Costa Rica WT/TPR/S/180 
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141. According to INCOP94, failure to undertake the necessary port investment means that ports 
are becoming even less operational for handling cargo and cruise liners, with delays generating 
serious costs for the vessels, which are then passed on to consumers.  INCOP also states that delays in 
works execution have provoked tense relations with user s.  Nonetheless, it also notes that, after a five-
year wait, concession contracts were signed in 2006 for the provision of public services for the port of 
Caldera, public works for construction and operation of the bulk terminal, and management of public 
towage services on the Pacific coast. 
142. The Office of the Comptroller General also re ports that expenditure and investments in 
relation to the infrastructure needed  to maintain current assets in good working order have come to a 
standstill.95 
(b) Regulatory framework 
143. The main instruments governing ships, coastal shipping and other maritime transport issues 
have not changed substantially, and include Law No. 12 of 22 October 1941 (National Flag Vessel 
Registration Law) and Law No. 22 20 of 20 June 1958 (Law on Coastal Shipping Services of the 
Republic).96 
144. JAPDEVA operates as an autonomous State body, with the status of a public utility firm.  It 
was established by Law No. 3091 of 18 February 1963, and reformed by Law No. 5337 of 9 August 
1973.  Its specific functions include planning and constructing port wo rks and installations, 
maintaining and operating their services and faciliti es, receiving and directly controlling ships 
entering and leaving the ports, receiving and storing goods within the port area, and processing 
applications for concessions. 
145. INCOP was established by Law No. 1721 of 28 December 1953 (amended by Law No. 4964 
of 1972) as a public law institution with management autonomy.  It serves as the port authority for the 
Pacific coast of Costa Rica, with a mission to provi de port services and related facilities, including rail 
transport.  Law No. 8461 of 20 October  2005 introduced significant reforms, providing inter alia  that 
INCOP may fulfil the tasks of regulation and su pervision of concessions granted, through the 
Concessions Supervision Secretariat, coordinating w ith the Ministry of Public Works and Transport 
(MOPT) for that purpose. 
146. In order to operate a coastal shipping service on a regular and permanent basis, it is necessary 
to obtain a route licence from the MOPT, except in the case of extraordinary or exceptional services.  
Under Executive Decree No. 66 of 4 November 1 960 (Regulation to the Coastal Shipping Law), 
concessions for coastal shipping services are grante d only to Costa Rican citizens or to companies 
formed in Costa Rica with capital controlled by Costa Ricans holding at least 60 per cent of the 
shares.  Such concessions are granted for periods of six years. 
                                                      
94 Proceso de  Modernización del Sector Portuario de la Vertiente del Pacífico de Costa Rica.   
(Modernization of the port se ctor on Costa Rica's Pacific seaboard).  INCOP, 2006. 
95 Contraloría General,  Annual Report 2005. 
96 Other important statutes include the Commercial Code of 1853, Book III on Maritime Trade;  
Executive Decree No. 66 of 4 November 1960, Regulation to the Law on coastal shipping services of the 
Republic;  Decree No. 12568-T-S-H of 30 April 1981, Regu lation to the Costa Rican Naval Registry;  Executive 
Decree No. 23178-J-MOPT of 5 May 1994;  Law No. 6990 of 15 July 1985, Law on incentives for tourism development;  Law No. 7293 of 26 March 1992, Law regulating all current exemptions, derogations and 
exceptions;  and Executive D ecree No. 24863-H-TUR of 5 December 1995, Regulation to  the Law on incentives 
for tourism development No. 6990 of 15 July 1985, as amended.  Law No. 8461 of 20 October 2005 (Law regulating port activity on the Pacific Coast). WT/TPR/S/180 Trade Policy Review 
Page 102 
 
 
147. Trade between one Costa Rican port and anothe r must be undertaken exclusively in ships 
registered in Costa Rica, apart from exceptions made  in existing or future trade agreements with 
foreign countries.  According to Decree No. 12568-T-S-H of 30 April  1981, ships may only be registered by Costa Rican citizens, national public  bodies, companies formed and domiciled in Costa 
Rica and representatives of ship owners.  An exceptio n to this rule is made for foreign citizens 
wishing to register vessels under 50 tonnes exclusively for private use. 
148. In the case of national vessels used for internationa l traffic, at least 10 per cent of their crew 
should be Costa Rican citizens, provided it is possible to obtain that number of properly trained crew members in the country, and provided the itinerary of the vessels in questio n includes Costa Rican 
ports. 
149. The Constitution provides for the protection of assets in the public domain, including wharfs, 
and establishes that they cannot be sold.  Ports may therefore not be owned by private enterprises.  
Law No. 7593 of 9 August 1996, the Law on the Public  Services Regulatory Authority, states that 
regulatory authorities are responsible for setting pric es and charges for the public services specified 
under that law, which should only include the costs inherent in providing the service.  Law No. 7593 
establishes that a concession or permit must be obtained to operate as a public service provider.  The 
Government and the MOPT grant the concession for public works with public services.  Along with 
the Government, JAPDEVA is authorized to grant port service concessions. 
150. Costa Rica has signed several inte rnational maritime conventions.
97 
151. Since 18 June 2004, Executive Decree No. 31845-MOP has been applied as a regulation to 
protect ships and port facilities, for the purpose of enforcing safety requirements. 
(viii) Professional services 
(a) Overview 
152. Except for undertakings on medical and dent al services, Costa Rica does not have any 
specific commitments in the professi onal services sector under the GATS.98  For medical and dental 
services, Costa Rica undertook not to restrict consump tion abroad and to allow foreign natural persons 
to provide such services in the country, provided they fulfil the requirement of membership of a 
professional association and residency requirements (see below).  Nonetheless, Costa Rica listed an exemption to Article II of the GATS applied to the professional services sector.  This measure, of indefinite duration, provides that, in order to be admitted to the corresponding professional 
association, foreigners must demonstrate that in th eir country of origin Costa Ricans may exercise the 
profession in comparable circumstances.
99 
                                                      
97 Convention on the International Maritime Organization (Law No. 6478 of 25 September 1980);  
Code of Conduct for Liner Conferences (Law No. 6074 of 12 July 1977);  Convention 145, Continuity of 
Employment (Seafarers) Convention (Law No. 6548 of 18 March 1981);  Convention 134, Prevention of 
Accidents (Seafarers) Co nvention (Law No. 5851 of 9 Decembe r 1975);  Convention 112, Minimum Age 
(Fishermen) Convention (Law No. 3344 of 5 August 1964);  Convention 147, Merchant Shipping (Minimum Standards) Convention (Law No. 6549 of 18 March 1981);  International Convention for the Unification of 
Certain Rules Relating to the Arrest of Sea-going Ships (Law No. 1800 of 30 September 1954);  International 
Convention on Civil Liability for Oil Pollution Damage (Law No. 7627 of 26 September 1996);  and International Convention on the Prevention of Marine Pollution by Dumping of Wastes and other Matter (Law 
No. 5566 of 26 August 1974). 
98 WTO document GATS/SC/22 of 15 April 1994. 
99 WTO Document GATS/EL/22 of 15 April 1994. Costa Rica WT/TPR/S/180 
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153. Costa Rica is a signatory to the Agreement on the Practice of University Professions and the 
Recognition of University Studies of 20 June 1962.100  This guarantees national treatment for 
professionals wishing to practise their profession in  another signatory country, and recognition of 
academic degrees issued by universities of any of  the signatory countries.  Professionals from 
signatory countries are also excused the reside ncy requirement demanded by certain Costa Rican 
professional associations. 
154. Costa Rica does not have a legal statute regulating the provision of professional services in 
general terms.  Exercise of the different professions is regulated by the specific professional associations and their respective laws;  about 22 prof essions are regulated by law.  Some professions 
are reserved for members of the relevant professional associations.  Foreigners may become members 
of these bodies, although in general they have to sa tisfy additional requirements to those applied to 
Costa Ricans, such as residency.  Academic de grees and professional qualifications awarded by 
foreign institutions to Costa Rican or foreign citi zens must be authenticated by the consular service 
and by the Ministry of External Relations.  There is no set time limit for procedures to obtain certification of academic degrees and professional qualifications. 
155. The five-year residency requirement was decl ared unconstitutional in the case of medical 
doctors and agricultural engineers.  Nonetheless, in general this requirement continues to be applied 
unless there is a legal ruling to the contrary.  No unified criterion has been adopted by the Constitutional Court on this issue. 
(b) Legal services 
156. The Organic Law on the Bar Association, of 28 October 1941, and the amendments and 
regulations thereto, govern the exercise of the lega l profession in Costa Rica.  Under this law, only 
members of the Association can perform the functions of a lawyer.  To be able to practise in Costa 
Rica, foreign lawyers need to obtain recognition or equivalence
101 of their university qualification 
from the Higher Education Council (CONARE), and mu st present a certificate of residency or a 
document authorizing them to work in the countr y issued by the Migration Department of the 
Ministry of the Interior and Police.  The other re quirements for an application for admission of foreign 
lawyers are the same as those demanded of Costa Rican lawyers.102 
157. In the case of legal services, the Bar Association will in 2007 present a draft Law on the 
Professional Qualification of Lawyers.  There are no similar initiatives for other sectors. 
(c) Accounting services 
158. In Costa Rica, private and public accountancy are separate professions, each with its own 
legislation and professional body.  Only persons w ho are duly registered with the Association of 
Private Accountants are recognized and author ized to provide private accountancy services.103  
                                                      
100 The other signatories to the Convention are El Salvador, Guatemala, Honduras and Nicaragua.  
These countries and Costa Rica agreed to harmonize their le gislation to ensure effective implementation of the 
Convention, through the Protocol to the General Treaty on Central American Economic Integration (Guatemala Protocol) of 29 October 1993. 
101 Recognition means accepting the authenticity of the profession al qualification and verifying its 
existence through certification.  Equivalence means the ac t of recognizing that the professional qualification is 
authentic and equivalent to a specific qualific ation issued by a Costa Rican University. 
102 For online information, see h ttp://www.abogados.or.cr/info_gener al/incorporaciones/requisitos.php. 
103 The Organic Law on the Association of Private Accountants of 2 March 1951 and amendments 
thereto. WT/TPR/S/180 Trade Policy Review 
Page 104 
 
 
Foreigners applying for admission to the Association, in addition to requirements also demanded of 
Costa Rican citizens, must also obtain recognition  or equivalence of their university degree by 
CONARE, and possess papers authorizing them to wo rk in the country.  Foreign private accountancy 
firms may set up and offer services in Costa Rica provided the accountants of those firms are duly 
registered with the Association of  Private Accountants, and are recogni zed and authorized to work as 
private accountants. 
159. The public accountancy profession is governed by Law No. 1038 of 19 August 1947, and by 
the Regulation to the Organic Law on the Associati on of Public Accountants of 5 May 1982.  Only 
members of this association are legally auth orized to provide professional public accountancy 
services, acting either individuall y or through firms legally estab lished and registered with the 
Association.  Foreign firms may only advertise and offer services in Costa Rica through Costa Rican 
professionals or Costa Rican offices.104  To exercise the profession of public accountant, foreign 
citizens must have been resident in Costa Rica for the five years prior to their application and must 
also fulfil the other requirements demanded of Costa Rican citizens. 
160. Costa Rica does not maintain any recipr ocity agreements on accountancy services. 
(d) Engineering and architecture services 
161. Law No. 4925 of 17 December 1971105 regulates the engineering and architecture professions 
and establishes the Federated Association of Engin eers and Architects of Costa Rica.  The Federated 
Association is formed by the Associations of Archit ects;  Civil Engineers;  Electrical, Mechanical and 
Industrial Engineers;  Topographical Engineers;  an d  Technological Engineers.  Only active members 
of the Federated Association may practise their prof ession.  In addition to obtaining a copy of the 
university degree authenticated by the Ministry of External Relations, and eq uivalence or recognition 
from CONARE, a foreigner wishing to gain admissi on to the Federated Association as an active 
member must also provide evidence of residency in Costa Rica.106 
162. Foreign engineers or architects may also en ter the country to perform temporary work, 
exclusively of a professional consultancy nature, in State-owned organizations, private enterprise, or 
professional associations.  For this purpose, the professional in question must register as a temporary 
member of the Federated Association, which mean s satisfying a number of requirements, such as the 
presentation of diplomas and evidence of a work cont ract.  The corresponding permits are issued for a 
period of no longer than one year, and extensions  are granted at the discretion of the Federated 
Association. 
(e) Medical and dental services 
163. The professions of physician, surgeon, and the respective specializations can only be 
exercised by professionals duly registered with th e Association of Physicians and Surgeons.  To 
obtain registration, foreigners and Costa Ricans alike must, among other requirements, provide evidence of having worked as an intern for one year in a Costa Rican or foreign hospital of requisite 
standing, and must have completed one year of co mpulsory social service.  In addition to fulfilling 
these requirements, foreigners must demonstrate th at in their country of origin Costa Ricans may 
exercise the profession in comparable circumstances.   However, foreign physicians who have been 
                                                     
 
104 Article 10 of the Regulation to the Organic Law on  the Association of Public Accountants of 1982. 
105 Law No. 4925 of 1971 comprehensively amended the Organic Law on the Federated Association of 
Engineers and Architects of 10 January 1966. 
106 Article 5 of Law No. 4 295 of 17 December 1971. Costa Rica WT/TPR/S/180 
 Page 105 
 
 
married to a Costa Rican citizen for two or more years, and live in the country, are guaranteed 
national treatment in the process of registration with the Association. 
164. State institutions may recruit foreign physicians if no Costa Rican physicians are available to 
provide the service required.  To be eligible for su ch recruitment, foreign physicians must fulfil all 
registration requirements of the Association but are exempted from requirements of residency, 
reciprocity, and compulsory social service.  Physic ians recruited in this way may not exercise the 
profession outside their employment contracts.107 
165. In order to engage in dental practice and the related specialities, it is necessary to be admitted 
to the Association of Dental Surgeons, for which fo reign dentists have to fulfil the same requirements 
as Costa Rican citizens, including certification of one year of compulsory dental social service.  
Foreign dentists must also submit a certificate from a Costa Rican University validating their 
university degree, and demonstrate th e existence of reciprocal treatment for Costa Rican dentists in 
their country of origin. 
 
                                                      
107 Article 7 of Law No. 3019 of 9 August 1962 and amendments thereto. Costa Rica WT/TPR/S/180 
 Page 107 
 
 
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