Monday, November 26, 2007

Banderazo de Salida

EDITORIAL

* La Contraloría al fin allanó el camino para concesionar la carretera a Caldera

* La experiencia con esta y otras obras revela la necesidad de reformas legales

Con su aval al ‘addendum’ del contrato para concesionar la construcción y operación de la carretera a Caldera, la Contraloría General de la República ha dado, desde el ámbito del Estado, el banderazo final para que puedan iniciarse los trabajos en esa vía. Ahora, como paso previo al comienzo de las obras, fijado para enero del próximo año, restan tres trámites que no tendrían por qué demorar más este largo proceso. Uno es de resorte del concesionario: la firma del contrato entre el consorcio Autopistas del Sol, a cargo del proyecto, y sus financistas, el Banco Centroamericano de Integración Económica (BCIE) y la Caja de Madrid. Los otros dos, según los representantes de la compañía, dependen de la acción gubernamental: unas pocas expropiaciones pendientes, y el permiso ambiental para aprovechar materiales de construcción a lo largo de la vía.

Si, como esperamos, los últimos requisitos se cumplen a tiempo, podremos felicitarnos, como país, de que una obra tan importante para mejorar nuestra infraestructura vial al fin pueda comenzarse. Y si, como confiamos que suceda, el proceso avanza y concluye sin alteraciones, dentro de unos tres años tendríamos, al fin, una obra de gran magnitud construida según el esquema de concesión, algo de lo que aún no hemos sido capaces. Sin embargo, también debemos analizar con gran sentido crítico y afán de enmienda, por qué pasaron 30 años desde que la carretera a Caldera se gestó, y por qué, durante ese tiempo, se produjeron tantas decisiones erróneas, tantos vacíos, torpezas y retrocesos, a un enorme costo para el desarrollo nacional.

En este viacrucis se pueden identificar dos grades etapas. La primera, cercana a la concepción del plan, estuvo marcada por la crisis económica que se desató durante la segunda mitad del Gobierno del presidente Rodrigo Carazo (1978-1982). Las finanzas públicas entraron en tales dificultades y el acceso al crédito internacional para el desarrollo se dificultó tanto que debió archivarse el proyecto durante varios años. Luego surgió, como una excelente opción, la posibilidad de utilizar la figura de concesión, según la cual una empresa privada financia y ejecuta el proyecto, que luego administra como fuente de ingresos (mediante los peajes) para pagar sus obligaciones y obtener un rédito. Esta fue la segunda gran etapa, gestada en la segunda mitad de la pasada década, sumamente accidentada, y de la que al fin pareciera que obtendremos frutos.

Si a las dificultades con esta carretera sumamos los fracasados esfuerzos para ampliar y modernizar (también mediante concesión) la vía San José-San Ramón y la desastrosa experiencia con la “gestión interesada” del Aeropuerto Juan Santamaría, debemos concluir que padecemos un terrible retraso en los mecanismos jurídicos y administrativos para emprender el tipo de obras de infraestructura que requiere el país, y que, por la insuficiencia presupuestaria del Estado, solo podrán hacerse mediante concesión. Incluso, la buena experiencia con el puerto de Caldera, que ha mejorado sustancialmente su eficiencia desde que lo comenzó a operar una compañía privada, estuvo precedida por un proceso de adjudicación extremadamente largo, que retrasó seriamente la puesta en práctica de las mejoras.

Lo que se hace imperativo, frente a esta realidad, es reformar, para mejorarla, la Ley de Concesión de Obra Pública y reforzar las instancias que deberán aplicarla. En la Asamblea Legislativa se encuentra muy avanzado el trámite de un proyecto que, aunque dista de ser el mejor, al menos implica importantes avances. Sin embargo, y a pesar del presunto apoyo de la mayoría de las fuerzas políticas, aún no ha sido aprobado. En vista de su importancia y urgencia, debería estar entre las prioridades esenciales tras el trámite de la agenda de implementación del TLC.

Mientras tanto, el Gobierno debe seguir haciendo todo lo que pueda dentro de las circunstancias legales imperantes. Porque el banderazo para la carretera a Caldera, así como lo ya logrado en su puerto, además de su importancia intrínseca, indican que, incluso en circunstancias adversas, es posible avanzar cuando hay voluntad y gente competente impulsando los procesos.

La Nacion
Editorial

Saturday, November 24, 2007

Playas vecinas a Tamarindo estan limpias




Contaminación no las afecta

Aguas son aptas para nadar y están prácticamente libres de coliformes fecales

Tamarindo se organiza para combatir los focos de suciedad

Mauricio Herrera U. | mail@nacion.com

Playas Langosta y Grande, en Santa Cruz, Guanacaste, tienen aguas de excelentes condiciones para la natación y no han sido afectadas por la contaminación que sufre la vecina Tamarindo.

Estudios ordenados por hoteleros de playa Langosta y análisis periódicos del Instituto Costarricense de Acueductos y Alcantarillados (AyA) coinciden en que el mar allí está prácticamente libre de coliformes fecales.

Para que el agua posea condiciones excelentes para la natación no puede registrar más de 240 coliformes fecales por cada 100 mililitros de agua.

Tamarindo está ubicada exactamente entre las playas Grande y Langosta.

En un estudio solicitado por hoteleros de Langosta al Laboratorio privado Biotec, nueve puntos de muestreo registraron valores menores a los 47 coliformes fecales por cada 100 mililitros de agua. El análisis se hizo el 6 de noviembre.

Hasta setiembre, el Laboratorio de Aguas de AyA ha registrado en muestreos hechos en esa playa promedios menores a los 240 coliformes fecales.

Los cauces que descargan en el estero no han contaminado a este y tampoco hay impacto importante en la playa. Langosta es de clase A, apta totalmente para la natación, confirmó Darner Mora, director del Laboratorio de Aguas del AyA.

En playa Grande, prácticamente todas las muestran indican que del todo no hay coliformes.

Giancarlo Pucci, director general del hotel Cala Luna, en Langosta, explicó que en esa zona el desarrollo comercial no ha sido tan grande y los hoteles nuevos han instalado sus propias plantas de tratamiento de aguas.

Un análisis de AyA, que se hizo en agosto, encontró en Tamarindo 11 focos de contaminación en la playa dos en el mar.

Como consecuencia, el 14 de noviembre AyA notificó que Tamarindo perdió la credencial de Bandera Azul Ecológica, un premio que se le otorga solo a playas con excelentes condiciones de limpieza. Ese galardón lo siguen ostentando las playas Grande y Langosta.

Mientras, en Tamarindo, la comunidad se organiza para combatir la contaminación.

El presidente del Comité Pro - Mejoras de la Playa, Federico Amador, aseguró que empresarios de la comunidad financiarán el diseño de una planta de tratamiento de aguas.

A la vez, cooperan con el Ministerio de Salud para completar un estudio que determine los puntos de origen de la contaminación y ayude a corregir malas prácticas de comercios y residencias.

Esperan llegada de tortugas baula al Pacifico de Costa Rica



Tortuga marina en Ostional, Costa Rica (ARCHIVO) Una tortuga marina sale del agua en Ostional, Costa Rica, el 26 de setiembre de 2006. Repite el ritual anual de desovar antes de volver al mar. Las tortugas baula (Demochelys coriacea) son esperadas para las próximas semanas en las playas del Pacífico norte de Costa Rica, en la provincia de Guanacaste, donde tradicionalmente llegan a desovar, informaron fuentes ecologistas


13-10-2007 , 16h43 GMT

SAN JOSE (AFP)Las tortugas baula (Demochelys coriacea) son esperadas para las próximas semanas en las playas del Pacífico norte de Costa Rica, en la provincia de Guanacaste, donde tradicionalmente llegan a desovar, informaron fuentes ecologistas.

La Asociación para la Protección de la Tortuga Baula y el Desarrollo de la Bahía de Tamarindo, anunciaron este miércoles la pronta llegada de las baulas por lo que se hizo un "llamado vehemente a la protección de esta especie marina".

"Como cada año, se esperaba que para octubre y noviembre se dieran las primeras anidaciones de las tortugas baulas, sin embargo algunas se adelantaron y fue así como el 15 de setiembre último cinco fueron las primeras en arribar a las costas" de Guanacaste, indicó un comunicado de prensa.

Expertos ecologistas señalaron que las tortugas han adelantado su llegada debido al fenómeno de La Niña, que hace que las aguas sean más frescas.

© 2007 AFP
La Nacion

Tuesday, November 20, 2007

Contraloria General ordering in January to build the road to Caldera



The road to Hacienda Vieja, Orotina, where the track will pass, was closed yesterday by landslides. Jorge Umaña



Project 77 km should be ready by July 2010

Contraloria ordering in January to build the road to Caldera

* Pending signing contracts with creditor banks financing
* Contraloria allows adjustment of $ 72 million in extra cost of works


Vanessa Loaiza N. | vloaiza@nacion.com Vanessa Loaiza N. | vloaiza@nacion.com


If there are no further setbacks, the new road San Jose-Caldera should finally start to be built in January 2008 after 30 years of waiting.

Last night, the Contraloria General of the Republic endorsed an amendment to the concession contract for the route, which sets the cost of the work orders and begin construction in the next 39 days.

MORE ON THIS TOPIC

Funding remains


The civil works project gives to the consortium Spanish, Portuguese and Costa Rican -Autopistas del Sol- will have a total value of $ 230 million (¢ 119,830 million), which is $ 72 million more than anticipated in 2001.

Luis Diego Vargas, Vice Minister of Concessions, explained that six years ago the road to 77 kilometers was valued at $ 158 million, which no longer compensate for the rise in construction materials such as steel, asphalt and fuel.

The addendum also extended the period of construction, from 24 months to 30 months. That means that the route should be up and running in July 2010.

Carlos Arguedas, manager of Administrative Contracting Office of the Contraloria, adding that now the concession period varies, as it is extended to 25 years and six months, rather than 25 years as originally scheduled.

However, the Vice Minister Vargas said that the contract provides that the grant could end earlier date if the company Autopistas del Sol achieves revenues of $ 258 million (¢ 134,418 million).

Satisfaction. Last night, the Minister of Public Works and Transport, Karla Gonzalez, was satisfied by the endorsement issued by the Contraloria.

"We know very well the need to start a project which has 30 years remaining". We know that, from this moment, there must be a continuous process of giving, to achieve the urgent modernization of road infrastructure, "said jerarca at a press conference.

According to Gonzalez, although the order of start of work should be, no later than December 29, it is likely that the machine will begin to work "in the first half of January," to take advantage of the summer.

Prior, the grantee must submit contracts for the financing of the project with its creditor banks: Caja de Madrid and the Banco Centroamericano de Integración Económica (BCIE).

However, until yesterday, those documents were still in draft.

Gonzalez said that banks were only awaiting the endorsement of this addendum to finalize negotiations with Autopistas del Sol.

A project in installments. Caldera The new road will be made up of three sections, the first running from San Jose to Ciudad Colon, another Ciudad Colon to Orotina, the latest of Orotina to Caldera.

It is anticipated that this road will reduce by 45 minutes between the capital and the port of Puntarenas.

The stretch between Ciudad Colon and Orotina is currently in ballast and only has five major bridges which were inaugurated in the administration of Miguel Angel Rodriguez (1998-2002).

Hada Munoz, project manager, explained that the construction of an asphalt road in a two-lane stretch in that it will take 30 months and will be the first to start in January next.

On April 2008 is expected to be extended several points between San Jose and Belen de Mora and to build a new road to Ciudad Colon.

This is one of the most "sensitive part" because of the work required to demolish and expand the bridge Ringroad passing on the highway Prospero Fernandez (leading to Escazú).

Finally, in November 2008 start rebuilding sector Orotina-Caldera, which would be ready in April 2009.

When the entire route is finished, drivers will have to pay a toll of $ 2.7 (¢ 1,400) to make the full tour.

VIACRUCIS ROAD

June 2001: The Argentine consortium Costa Rican Cartellone-Acosol was awarded the project San José-Caldera. The cost of the work was $ 158 million.

August 2003: signing the contract with the consortium Cartellone-Acosol and a third partner, the Canadian SNC Lavalin.

November 2004: The consortium renunciation of the project by the continuing delays in the expropriation of land.

December 2005: The Contraloria authorizes that another company, the Consortium Autopistas del Sol, underwrites the project.

April 2006: signing the new contract for construction. Starting construction is set for January 2007.

February 2007: The construction was postponed for April while the contracts were signed financing.

April: Banks refuse to sign the funding until the Contraloria endorse an addendum to the concession contract that includes the creation of a trust with the actions of the builder. It is an additional safeguard to protect the loan.

November: After months of negotiations the Contraloria endorses the addendum that adjusts the price of the civil works and includes the trust collateral.


La Nacion, November 20, 2007

Saturday, November 17, 2007

Stock Market Eyes Small Firms



New Market: The National Stock Exchange hopes to involve small and medium companies through its new Alternative Equity Market.
Mónica Quesada | Tico Times










By Peter Krupa
Tico Times Staff | pkrupa@ticotimes.net

Costa Rica's National Stock Exchange � known as the Bolsa Nacional de Valores, or simply the Bolsa � is small by anyone's standards. Only a dozen or so stocks are traded and their value represents a very small percentage of the companies that issue them.

Daily trading sees just a few million dollars worth of stock change hands, usually from the same large companies � electronics manufacturer Atlas Eléctrica, for example, or beverage behemoth Florida Ice and Farm.

More than issuing shares to raise capital, Costa Rican companies tend to prefer bank debt and bonds, simpler and safer debt that doesn't give the purchaser partial ownership of a company or the right to profit from dividends the way shares do.

Altogether, it's a rather sleepy market, just at the time when markets around the world are catching their first winds.

But early next year, the Bolsa will launch a new program that looks to breathe life into the local investment market by opening a space for smaller companies to seek capital by issuing stock, while at the same time making it safer for investors to buy those stocks.

Known as the Alternative Equity Market, or MAPA, the program is modeled in part on projects such as the London Stock Exchange's Alternative Investment Market.

MAPA seeks to attract smaller businesses by smoothing out and simplifying some of the scarier disclosure and regulatory elements that come with issuing stock.

The resulting model is a hybrid of a public and private company that could turn the heads of some small and medium business owners looking for ways to raise capital and grow their companies.

�We're trying to create a new culture here, a new environment where investment in shares is a natural thing,� said Matthew Sullivan, a British citizen and one of the brains behind the program at the Bolsa.

Costa Rica's business class doesn't have a strong tradition of equity investment, although it is done. Companies seeking to raise capital through stock must do a public offering, selling shares to whoever wants to buy them.

With public offerings, the company gets the capital it needs to invest in expansion, and the shareholders get stock � essentially ownership in the company � that pays out dividends when the company makes money.

But if a company wants to raise capital by offering public shares, it must comply with a whole range of government regulations, as well as disclose details about its inner workings for all the world � including the competition � to see.

Those obstacles have historically made Costa Rican companies in this tiny economy skittish about going public.

Bigger companies would rather just raise money by selling bonds. Smaller companies, meanwhile, often turn away from public markets altogether.

�We live in a capitalist country and people invest money,� said Carlos Mora de la Orden, the owner of financial Web site Capitales.com. But, he said, small and medium companies typically turn to friends and family for capital.

�MAPA permits investments from people more than just family and friends,� Mora de la Orden said.

Companies that offer shares through MAPA would be only half public. Under the program, a company could allow a range of potential investors to offer to buy the shares, while retaining the right to sell shares to specifically selected investors.

That, in turn, means the companies won't have to disclose all their financial details to the public at large. Instead MAPA will set up a Web site with information that only investors and approved potential investors can access � sales, debt, earnings, all the important stuff.

Sullivan says this password-protected system of online disclosure would be unique in the world.

Another new element for the Costa Rican market that MAPA has cooked up is something called a �sponsor.� Every company that wants to offer shares through MAPA must have a sponsor � basically, a Bolsa-approved finance professional (four have been certified so far).

The sponsor's job is to guide the company through the process of the stock offering and later through the regulatory procedures.

The MAPA program includes a few other unique changes, the details of which are laid out in a detailed 14-page document that can be downloaded in both English and Spanish versions from the Bolsa's Web site, www. bolsacr.com.

While all this will be good for the companies seeking investment, it's also good for the investors.

Oscar Chaves, the general manager of investment banking for Costa Rican finance company Aldesa, told The Tico Times that MAPA also provides greater security for would-be investors by eliminating the need for piles of independent contracts.

It also regulates the relationship between small and medium companies and their investors, where before there was no regulation.

Chaves said Aldesa is going through the steps right now to help a client enter the MAPA market, with Aldesa acting as sponsor.

Sullivan confirmed that already at least one company is ready to enter MAPA and several more are preparing.

�It gives more protection to the investor that wasn't there before,� Chaves said.

Sullivan said there is no maximum or minimum size for the companies that can join MAPA, although Chaves offered that he expected it will attract companies in the $1 million to $5 million range, adding that sizes up to $20 million are likely as the market gains credibility.

Property Rights and Foreign Investment in Costa Rica

by Marie C. Wold
Revised January 1998 by Steve Olson and Jose M. Quiros

Table of Contents

Summary
Introduction
Purchasing Property
Establishing Residency
Hazards of Property Ownership

* Zona Marítimo Terrestre
* Squatters
* Expropriation

Bibliography
About the Author

Note: For more information on investment in Costa Rica, see the State Department Consular Information Sheet.

Summary

Owning property in Costa Rica is feasible but costly. Although Costa Rica is an established democracy, one must not lose sight of the fact that it is still a developing country and is endowed with certain intrinsic hazards of private land ownership. While there are limited precautions that one may exercise in order to avoid the hazards of the Zona Marítimo Terrestre, squatters, or expropriation, there is no foolproof method of maintaining a legal title to property. A thorough title search at the central depository (Registro Publico) is necessary in order to venify, and if needed, resolve any discrepancies between, the escritura and the catastro. Also, if one plans to reside in Costa Rica, it is necessary to establish legal residency by one of several means available.

In Costa Rica, one may possess a legal title to a property. However, maintaining that right is an active process that requires constant attention and supervision. Also, unlike the United States, where the rules governing the purchase of property and zoning restrictions are well-established, Costa Rica, especially in the Zona Maritimo Terrestre, has regulations and restrictions that may evolve over time and may be contrary to the established "rights of occupation" of a given Municipality.

If the uncertainties and the vigilance required of property ownership in Costa Rica are not disagreeable to a foreign investor, he/she must still be prepared for the costs associated with maintaining legal ownership of the property. One must also be aware that as an investor in Costa Rica he/she is dealing with a foreign government and therefore foreign laws, all of which are outside of the jurisdiction of the United States goveniment. The United States Embassy continues to be a reliable source of information for U.S. citizens regarding investment practices in Costa Rica and attempts to provide advice and assistance to potential investors, but it cannot guarantee a trouble-free investment experience.

We hope that these pointers, along with realistic expectations and goals, can help the prospective investor avoid the hazards inherent in investing in real property in Costa Rica.
Introduction

Costa Rica previously granted generous incentives to foreign nationals wishing to become residents. The lure of its beautiful coasts and the warmth of the people, together with numerous scams, has unfortunately led many Americans to make unwise and ill-investigated real estate investments. The following is a brief synopsis designed to provide a prospective investor with the necessary information for a more thorough investigation of property rights in Costa Rica.
Purchasing Property

When purchasing property in Costa Rica, proper registration of the property, and not the deed itself, is of the utmost importance (Carballo, 1995). Simply because an individual may have a seemingly "legal" title to a property in his/her name, does not necessarily mean that he/she is the legal owner. Like anywhere else in the world, there are scam artists who attempt (sometimes successfully) to sell the same property numerous times. It is therefore necessary to conduct a thorough investigation of a prospective piece of property as outlined below.

Costa Rica has a Civil Law system rather than a Common Law system. The practical differentiation between the two systems is that Civil Law is much more rigid than Common Law, making the procedure frequently more important than the substance. Such a distinction is of utmost concem when purchasing property, for the letter of the law must be followed precisely when registering property in order to obtain the full legal title (Carballo, 1993). All property is registered at a central depository called the Registro Puiblico, and it is there that one should begin the title search for a parcel of land. The title must be checked for any liens or encumbrances, of which there are often scores. Alvaro Carballo, a Costa Rican real estate attorney, has compiled a comprehensive check list of items that should be verified before a purchase. This list is published in his book, Purchasing Real Estate in Costa Rica: A Guidebook (Carballo, 1993). If the initial background check is flawed and a problem later arises, one could unwittingly lose possession of property thought to be legally owned. Title guaranty services are now available through Stewart Title Guaranty Company, based in San Jose. Stewart Title advertises escrow and title guaranty services to protect the consumer throughout the process of acquiring land, and to indemnify him/her for losses that may be incurred. Stewart Title is a 105-year-old U.S. company based in Houston, Texas, with over 3,500 offices in the U.S. and abroad.

The trick to buying property in Costa Rica is to reconcile the actual property with the two documents that legally define a property. The first is the escritura, which is the title document that describes how the property is recorded in the Registro in words; the second is the catastro map, which is the plat map of the property that is on file. The problem with defining a property arises from the fact that the escrititra may not correspond with either the catastro or a physical survey of the property. Such a discrepancy is due to the fact that when a transfer of property takes place, the transaction may not have been recorded on the catastro, since a change in one does not automatically require a change in the other (McMerty, 1995). It should also not be assumed that the catastro map accurately depicts the property itself. It is therefore necessary that an independent topographical study be conducted in order to verify the property boundaries. Any discrepancies within the two legal documents and the land itself must be resolved before purchasing. Such investigations may be a bit daunting, not to mention confusing, for the foreign investor. Due to the intricacies of resolving such issues, retired Brigadier General McMerty and Alvaro Carballo founded PropData, a companv that offers property title investigations, legal support and financial information. PropData is to date the only known company of its kind of Costa Rica (McMerty, 1995).

A reputable, diligent attorney should take care of the technical procedures involved with a title transfer, but such attentiveness must not be taken for granted. Prospective buyers should beware. They must monitor and understand what is being done, as well as what is not being done. It is therefore worth mentioning the documentation needed for the closing:

* A copy of the tax receipt (impuesto territorial) proving that all taxes and registration fees are paid as of the date of purchase (Puleo, 1995)
* A certificate (constancia municipal) issued by the municipal authority of the Municipality where the property is located (Carballo, 1993)
* Sufficient funds to pay all necessary taxes and registration fees, including notary fees. Usually one half is paid by the seller and one half is paid by the purchaser (Carballo, 1993)
* Evidence that all prior mortgages, liens and judgments have been lifted (Puleo, 1995)

A notary must be present at the closing. In Costa Rica, notaries are attomeys accepted by the Supreme Court.

Many single-home investors will be faced with the choice of whether to buy a preexisting structure or a plot of land on which to build a house. While there are a myriad of minor impediments that must be scrupulously attended to, most of which are outside the scope of this paper, a few points are worth mentioning as they may alter a buyer's decision. The law requires that all applications for construction permits be presented by an architect licensed by the Costa Rican Association of Engineers and Architects. Utilizing a certified architect can be extremely costly as well as cumbersome (Puleo, 1995). Furthermore, construction companies in Costa Rica are not bonded, thereby greatly increasing an investor's risk. Before building a house one would be well advised to speak to numerous individuals who have previously built in order to gain an understanding of the reality of the construction process, such as constant delays, necessary personal supervision, and cost overruns.

Establishing Residency

It is necessary to qualify for and establish legal residency if one plans to live in Costa Rica for an extended period of time. To this end, Costa Rica offers several alternatives for legal residency: a pensionado (pensioner), a rentista (a foreigner with a guaranteed income), an investor, a relative of a resident, or one with a foreign government assigment or an international mission (Lawrence Publication, 1995).

The pensionados and rentistas program has historically been the easiest method of establishing temporary residency in Costa Rica. Keep in mind when receiving advice from current pensionados and rentistas who have been residing in Costa Rica since before 1992, that the laws governing such residency status have changed. In 1992, the legislature revoked the tax exemption laws that allowed pensionados and rentistas to bring all of their possessions into the country duty free. Under the current law, these groups are no longer exempt and must pay import taxes of up to 100 percent on their belongings.

To quality for the pensionado status, one must fulfill three basic requirements: (1) prove that one eams at least $600.00 per month from a qualified pension or retirement account or from Social Security, (2) change at least $500.00 per month into colones, and (3) live in Costa Rica for at least four months out of the year. In order to quality for rentista status, one must fulfill three similar requirements: (1) prove that one has outside investments that will guarantee $1,000.00 income per month for five years, (2) change at least $1,000.00 a month into colones, and (3) live in Costa Rica for at lease six months out of the year. Neither pensionados nor rentistas pay taxes on money eamed outside of Costa Rica.

Pensionados and rentistas have restrictions as well as rights in Costa Rica. While either may set up their own business, as discussed below under the investor classification, neither may work for someone else. Individuals of either residency status must first become permanent residents in order to obtain a work permit.

The investor status is granted to those who invest at least $50,000 in special projecs such as reforestation, tourism and exports, or who invest at least $200,000 in any other business. The investor must also reside in Costa Rica for at least six months out of the year. If there are no problems, the investor may become a permanent resident in two years.

The two other methods of achieving legal residency are atypical, since both are contingent upon very particular circumstances. The resident as a first-degree relative status is the easiest method, as one need only be closely related to a Costa Rican. One with such status has all of the rights of a Costa Rican save for the right to vote. Another method is employment by a foreign government or an international mission.

Hazards of Property Ownership

There are three major hazards of property ownership in Costa Rica: the uncertainties of the Zona Marítimo Terrestre, the unavoidable reality of squatters and the possibility of expropriation. More space will be dedicated to the Zona Marítimo Terrestre, as it is by far the most convoluted and misunderstood hazard of property ownership.

Zona Marítimo Terrestre

Costa Rica is famed throughout the world for its beautiful, untainted beaches. It is therefore no surprise that beachfront property is actively sought by American developers, retirees and those looking for vacation homes. The significant caveat regarding beachfront development is that it is rarely the bargain it appears.

The principal problem is that no private ownership of beachfront property is allowed. The Costa Rican government owns the first 200 meters of the beach front area, known as the Zona Marítimo Terrestre, or the Maritime Zone, and it is governed by the Ley sobre la Zona Marítimo Terrestre (hereafter referred to as 'ZM'). The first 50 meters are public beaches on which absolutely no construction may take place or any concession be granted. The remaining 150 meters may be developed via special "concessions" that are granted by a governing Municipality (ZM Art. 35). In order for any construction to take place on this 150 meters the area must be part of a Plan Regulador, or a special zoning district created by the Instituto Costarricense de Turismo (ICT). It shoud be noted that some privately owned beachfront property does exist, due to the fact it was registered prior to the 1977 Maritime Zone law, which has a grandfather provision providing for such ownership (ZM Art. 6).

Before actually attempting to obtain a concession for developing rights in the Zona Maritimo Terrestre, a foreign investor must first be in compliance with Article 31 and 47 of the Ley Sobre la Zona Maritimo Terrestre (Carballo, 28 June 1995 interview). Article 31 specifies that at least fifty percent of the development capital must be Costa Rican (ZM Art. 31). In addition, foreign investors must have resided in Costa Rica for at least five years (ZM Art. 47).

Such discrimination concerning foreign ownership could possibly be questioned on a constitutional basis in the Sala Constituicional, or the Constitutional Court. Article 19 of the Costa Rican Constitution (CRC) explicitly states that foreigners have the same individual and social rights as Costa Ricans (CRC Art. 19). Howeverer, Article 19 does contain ambiguity with the inclusion of the clause, "with the exceptions and limitations that the Constitution and its laws establish," thereby creating the window for Article 31 of the Ley de Zona Marítimo Terrestre which allows discrimination against foreign investment (CRC Art. 19 and ZM Art. 31).

Inevitably there are methods employed by those who seek to circumvent the restrictions of foreign ownership as established by Article 31 (Carballo, 27 June 1995 interview). A common procedure entails establishing a Costa Rican as the "legal" owner of a parcel of land by recording his/her name on the necessary documentation. Frequently the name of the attorney or one of his/her staff is used as the local owner on the concession. Needless to say such measures have a certain amount of inherent risk. For example, in July 1995, the Municipality of Golfito threatened to pull the concession rights of many foreign investors on the grounds of Article 57, which states that "no person together with his/her spouse and minor children will be able to have more than one concession" (ZM Art. 57). The fact that many foreign owners use the same lawyers, and hence have the same names as the legal owners of their concessions, is now creating a major problem in the Golfito region. Such non-compliance with the law may result in the nullification of concessions without compensation.

The first step for a foreign firm or individual interested in developing the 150 meters of the Zona Marítimo Terrestre is to contact the Municipality that has jurisdiction over the desired coastal areas (ICT, 7 July 1995 interview). It is absolutely imperative that the area proposed for development be covered by a Plan Regulador created by the ICT and that its zoning requirements be compatible with the proposed development project. Beware of so-called "rights of occupation" granted by Municipalities. Such rights are only tentative and must ultimately succumb to the zoning requirements of a Plan Regulador when, or if, it is created by the ICT, making "rights of occupation" too volatile and susceptible to corruption to be recommended for development.

If the ICT has already created a Plan Regulador in an area, the developer must abide by the arrangements of the Plan or risk losing the concession. If a Plan Regulador does not exist, a firm wishing to develop the area must write a proposal for the implementation of such a Plan. The proposal is in essence an environmental impact statement that must include detailed information about possible damage to the environment, proposed rights of way and other necessary infrastructure developments. By law, the Municipalities are unable to grant concessions in the Zona Marítimo without the aforementioned development plan (ZM Art. 38) and without the consent of the ICT (ZM Art. 37).

Foreign investors wishing to develop tourist areas in the Zona Marítimo may seek tax incentives from the ICT. The granting of such incentives are govemed by law No. 6990 of 30 July 1985 which was amended by law No. 3293 of April 1992. Regulations for tourist areas are governed by Decree No. 9387 of 8 January 1979 (ICT 7 July, 1995 interview). Keep in mind that the ICT has the sole faculty to declare tourist zones and such zones are published in the Diario Oficial (La Gaceta) (ZM Art. 27).

An understanding of the law and its inherent ambiguities is absolutely necessary before purchasing concessionaire rights. Obviously, one should not heed hearsay or follow the advice of friends and neighbors. Such behavior could result not only in the loss of the concession but also that of improvements, such as a house, on the property without compensation from the Municipality. The following are some principal points of the law that must be adhered to:

Concessions cannot be granted to:

* Foreigners who have not been residents for five years
* Companies with bearer shares
* Foreign companies based abroad
* A company set up in Costa Rica exclusively for foreigners
* A company with more than fifty percent foreign capital (ZM Art. 47)

Concessions can be forfeited for the following reasons:

* Failure to apply for an extension of a concession in a timely manner
* The forfeiture of rights by the interested parties
* The death or legal absence of the concession holder with no heir
* Not abiding by the established obligations of Article 51
* Cancellation of the concession (ZM Art. 52)

The ICT can cancel a concession for:

* Non payment of the yearly canon or royalty
* Breach of contract (e.g. use of the land for purposes other than those expressly stated by ICT)
* Violation of the ordinances of the law that grants the concession
* Impediment of the use of the public right of way
* Other causes that this law establishes (ZM Art. 53)

The reality of purchasing a concession in the Zona Marítimo is that ambiguities exist within the written law, so that as regulations are created and amended, rights to property may also change. The lesson garnered from concession holders is that there are no guarantees and there is no foolproof way around the law. Additionally, even if a concession is granted, there are no guarantees that the concessions will be renewed or that the price of the concession or the yearly canon will be within reason. The fact remains that one is not purchasing property but is simply "leasing" it with absolutely no title. Therefore, one must be willing to accept the risk inherent in any such endeavor. In fact, official correspondence of 10 May 1995, from the Attomey General's office to the Municipality of Golfito, explicitly states that these concessions are temporary and precarious (Bulgareilli, 1995).

Squatters

The greatest potential danger for land ownership in absentia and at times even when the landowner resides on the property is the problem of squatters. Before investing in large expanses of land or even a cottage, or a quinta in the countryside, knowledge of the legal procedures along with due diligence is necessary to maintain one's property rights. Written into the Civil Code (hereafter referred to as 'CC') are numerous passages that deal with the rights of possession that are reminiscent of the earlier days of agricultural reforrn. Such clauses tend to favor the small, poor land-holder by upholding de facto "squatters rights" (CC Titulo II, Capítulo II).

Technically, squatters can only attempt to gain legal rights to a non-maritime property by peacefully occupying non-cultivated, unimproved agranian land over an extended period of time. The difficulty of maintaining one's rights over those of the squatters is due to the nebulous nature of the law and what legally passes as "non-cultivated" or "unimproved" land. It can be equally difficult to establish the duration of the squatter occupation, which is a crucial piece of evidence in the eviction process. It is imperative to understand that, according to the law, in case of doubt, "good faith" is presumed on the side of the squatters (CC Art. 284).

There are legal steps that can be taken to rid one's land of squatters. Procedurally, the eviction process is divided into three phases. The first phase is the eviction of squatters during the first three months of occupation. Such early discovery is key, as during this period one need not go to court. Theoretically, one need only alert the local police, who are then obliged to evict the squatters. The catch is that it can be extremely difficult to get the police to carry out their duty, and if one is not in the country, actual eviction is very difficult to verify. Even though eviction within the first three months is a rather straightforward procedure, at least in principle, early recognition can prove to be difficult if one is not residing on the property.

The second phase is after the initial three months of occupation but before one year. If squatters are "allowed" to squat on property for this duration of time, one must go to the courts and start the process of "administrative eviction" (Harris, 1995). The third phase is continued occupation for more than one year. According to the law, squatters have then achieved a "legal assumption," and the owners must go through an ordinary lawsuit process. Such a process has been described by attomey Robert Wells as "kind of like a root canal" (Harris, 1995). In order for the court to grant the property rights to squatters, they must prove that they have been on the land "uninterrupted," "non-challenged" and "peacefully" for ten years.

Although there are no foolproof, preventive measures for eliminating the problem of squatters on land owned in absentia, there are a few somewhat helpful steps that can be taken. Firstly, the propety should not appear abandoned and signs should be posted with the owner's name. The most important, albeit expensive, precaution is to hire a caretaker for the property. Great pains should be taken to secure a reliable caretaker, as well as another individual who can monitor the caretaker; it is not unconunon for a caretaker to squat on the land that he is paid to protect. The easiest way to avoid such a problem is to register the caretaker as an employee, which entails paying minimum wage and social security. One should also demand signed receipts from the caretaker as proof of payment.

A word of caution regarding squatters: the notion that squatters are simple campesinos is unfortunately not always correct. There have been numerous reports of armed, dangerous and organized squatters -- predominantly in the southern regions of Golfito and Pavones, and one such group killed an American landowner in 1997. There have been other reports of a armed squatters using intimidation and violence with caretakers and landowners in order to gain control of the land. Obviously, extreme caution should be exercised when purchasing land in Costa Rica to avoid areas with known organized squatters. The bottom line with purchasing land for future development or as a summer getaway is that, while it may be less expensive than other developed resort areas, it may not be the bargain it appears, as caretaker and attomey costs may accumulate very quickly.

Expropriation

An unavoidable hazard in the past has been governmental expropriation of land, predominantly for the purposes of establishing or enlarging national parks or indigenous reserves. While this is perhaps not the greatest hazard associated with land ownership in Costa Rica, it has been a very well-publicized and expensive danger due to the fact that the government does not have a history of fair and quick reparations for the expropriated lands.

Prior to 1995, no single law governed expropriation matters in Costa Rica. The dispersed nature of the law, along with general judicial and executive branch inefficiency, has contributed to the protracted nature of many expropriation disputes, some of which have gone on for more than a decade without resolution.

The prospects for future expropriation cases may be more favorable, for on 8 June 1995, the Nueva Ley de Expropriation (New Expropriation Law, hereafter referred to as NLE) No. 7495, was signed into law. The stated purpose of the legislation is to replace with a single law the several laws that allow the expropriation of private property by any state institution. The new law seems aimed primarily at ensuring that expropriations take place only after full and adequate payment is made, regardless of the nationality of the holder of such property. Also, while an earlier bill was aimed at making expropriation easier, the new law imposes obligations and restraints on the state and its institutions (Quiros, 1995). A few of the more important provisions of the new law are: (1) the return of the property within ten years if it is not used for the purpose for which it was intended (NLE Art. 16); (2) onlv one month is granted to the tax office to do an appraisal of the property to be expropriated (NLE Art. 21); (3) payment in cash is required unless otherwise agreed upon (NLE Art. 47); (4) only six months are allowed to fully complete registration of the property (NLE Art. 20); and (5) local and international arbitration are contemplated (NLE Art. 27). The possibility of international arbitration could permit cases to be brought before the International Center for the Settlement of Investment Disputes (ICSID). (Quiros, 1995).

In sum, it appears that if expropriation of land is to occur in the future, the owner may be in a better position than in the past to receive a prompt and equitable settlement. It must be stressed, however, that the new law has yet to be tested and it remains to be seen whether it will prove to be a dramatic improvement over the prior laws.

Bibliography

Blanco, Arturo. Interview of 6 July 1995.

Brennan, Peter. "What to Expect when Investing in Miniscule Costa Rica Market," The Tico Times, 17 March 1995.

Bulgarelli, Victor. Letter to Consejo Municipal de Golfito, 10 May 1995.

Carballo, Alvaro. "The Golden Rules of Buying Real Estate," The Tico Times, 17 March 1995.

Carballo, Alvaro. Purchasing Real Estate in Costa Rica. Mundo Gráfico, San José, Costa Rica, 1993.

Carballo, Alvaro. Interview of 28 June 1995.

Constitucion Politica de la Republica de Costa Rica 7 November 1949.

Código Civil de Costa Rica

Fundacion Internacional de Derecho Agrario Comparado, La Propiedad, San Jose: Editorial Juricentro, 1983).

Harris, Brian. "How to Avoid Landowners' Worst Nightmare: Squatter Invasion," The Tico Times, 17 March 1995.

Instituto Costarricense de Turismo (ICT), Interview of 7 July 1995.

La Asamblea Legislativa de la Republica de Costa Rica, Decreta: Ley de

Expropriaciones, No. 7595, 8 July 1995.

Lawrence International Publication. Official Guide to Living and Investing in Costa Rica, 1995.

Ley Sobre la zona marítimo terrestre y su reglamento. 1st ed., San Jose, Costa Rica, IJSA, 1991.

McMerty, John. "The Realities of Real Estate Transactions," Costa Rican Business Journal, Issue 1, 1995.

McMerty, John. Interview of 11 July 1995.

McMerty, John. "The Realities of Real Estate Transactions, Part II," Costa Rican Business Journal, Issue 2, 1995.

Phelps, William. "Business Risks, Opportunities in Costa Rica," The Tico Times, 17 March 1995.

Puleo, Christine. "Step by step through the Real Estate Process: What you need to do, Pay," The Tico Times, 17 March 1995.

Quiros, José Maria, Interview of 15 June 1995.

Ruiz, Miguel, Interview of 14 July 1995.

About the Author

Marie C. Wold worked as an intern at the US Embassy in San Jose, Costa Rica, during the summer of 1995. This document was produced as a special research report for the Embassy's economic section. It was revised January 1998 by Steve Olson and Jose Maria Quiros.

Costa Rica's long-term foreign currency IDRs affirmed at 'BB' - Fitch

MUMBAI (Thomson Financial) - Fitch Ratings said it has affirmed Costa Rica's long-term foreign and local currency issuer default ratings at 'BB' and 'BB+' respectively with stable outlooks.

The ratings agency also affirmed Costa Rica's short-term IDR at 'B' and country ceiling at 'BB+'.

Costa Rica's ratings are supported by its dynamic economy, stable and democratic political system, relatively favourable social indicators, and modest and declining external debt burden, Fitch said.

However, Costa Rica's relatively weak albeit improving monetary and exchange rate policy framework, as well as structural weaknesses in public finances continue to constrain the ratings, Fitch said.

Though international liquidity has improved over the past two years, it remains fragile in the context of Costa Rica's large current account deficit and high level of financial dollarization, the ratings agency said.

Over the past year, the Central Bank of Costa Rica (BCCR) has allowed greater exchange rate flexibility to adopt an inflation targeting regime in the coming years. However, Fitch notes that monetary policy is fraught with challenges due to the limited exchange rate flexibility.

Fitch added that while inflation and financial dollarization have come down somewhat in this early phase of the transition, the BCCR is expected to 'miss' its inflation objective of 8 pct for 2007 and needs to improve its inflation-fighting credentials.

The ratings agency said although the recent approval of the DR-CAFTA (Central American Free Trade Agreement) by the Costa Rican electorate yielded a positive result, it remains uncertain whether Costa Rica's Congress will be able to approve the enabling legislation required for full implementation of DR-CAFTA in a timely manner.

Implementation of DR-CAFTA, continued solid fiscal performance, and further progress on reducing inflation would contribute to improving Costa Rica's creditworthiness, Fitch said.

China

Costa Rica praises China for being most successful economy worldwide
Source: Xinhuanet | 11-01-2007 15:41

SAN JOSE, Oct. 31 (Xinhua) -- Costa Rican President Oscar Arias Wednesday praised China for being the most successful economy worldwide in the past 25 years.

"China is simply impressing because its economy is aimed at investing and generating higher quality job sources every day and that is what makes China the most successful economy worldwide in the past 25 years," Arias said.

Praising China for its economic growth, Arias said he feels "very happy" for establishing relations with China.

Arias made his first official visit to China on Oct. 22-28, during which he inaugurated Costa Rica's embassy in Beijing and held meetings with Chinese leaders.

"Costa Rica established good relations with Chinese leaders during my visit to China," Arias said. "I feel very happy for having opened diplomatic relations with China, (and) I believe we did not make a mistake."

He noted that China has relieved 300 million people from poverty in recent years and it maintained an economic growth rate of over 11 percent, therefore making it a successful economy.

The president said he hopes that once the Free Trade Agreement (FTA) with the United States is approved in Costa Rica's Legislative Assembly, China will carry out important investments in the country to boost its exports to the United States.

Endangered Costa Rican frog focus of study

MANCHESTER, England, Oct. 29 (UPI) -- British biologists are studying a Costa Rican leaf frog, Cruziohyla calcarifer, to save it from extinction and learn how to care for it in zoos and aquariums.

Scientists from The University of Manchester and the Chester Zoo -- Britain's largest zoo -- said the brightly colored frog, a native of the Costa Rican rainforest, is being threatened by a combination of environmental change and disease.

"This research aims to contribute to our understanding of the basic factors that influence the development and survival of these frogs," said Richard Preziosi, the project's lead investigator. "For instance, with the exception of certain mammals, we know surprisingly little about what animals should be eating. And yet the diet of splendid leaf frogs affects their coloration which, in turn, determines their mating behavior.

"The global decline in amphibian populations means research such as this, carried out ex situ, is therefore critical for both conservation projects in the wild and for maintaining and successfully breeding the frogs in zoos and aquariums," he added.

The research is being complemented by field studies in Costa Rica that include examining the effect that ultraviolet rays have on the fitness and viability of captive-bred frogs.

U.S. Forgives Costa Rican Debt to Help Environmet

U.S. Forgives Costa Rican Debt to Help Environment

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By MARC LACEY
Published: October 17, 2007

MEXICO CITY, Oct. 16 — The United States has agreed to forgive $26 million of Costa Rica's debt as part a debt-for-nature swap that will protect some of the country's most threatened tropical forests, officials said.

In a deal to be announced on Wednesday, the government of Costa Rica has committed to invest a similar amount in conserving high-risk natural areas that are the home to such threatened species as jaguars, squirrel monkeys and scarlet macaws.

The United States government will contribute about $12.6 million in financing as part of the deal. Two environmental groups, Conservation International and the Nature Conservancy, will contribute $1.26 million each. Those funds and the interest they generate will be enough to eliminate $26 million in Costa Rica's debt over the next 16 years, officials said.

That is the largest amount of debt forgiven and the 13th such deal under the Tropical Forest Conservation Act, which was first enacted in 1998.

"Debt-for-nature agreements are a successful model for government and citizen cooperation and should encourage more public-private partnerships to further the cause of global conservation and environmental protection," Treasury Secretary Henry M. Paulson Jr. said in a statement.

The funds will help protect important Costa Rican natural areas including the Osa Peninsula, Tortuguero, La Amistad, Maquenque, Rincón de la Vieja and the Nicoya Peninsula, officials said.

"There's a double benefit for these countries," Claudia A. McMurray, assistant secretary of state for oceans, environment and science, said in a telephone interview. "They get some or all of their debt wiped out, and they get help in preserving an important natural resource."

On top of that, Ms. McMurray said, there are the benefits to climate, as forests play an important role in absorbing greenhouse gasses.

To qualify for the program Costa Rica had to meet a series of political and economic requirements, including cooperation with Washington on drug enforcement and counterterrorism.

Costa Rica is one of the success stories in Central America when it comes to environmental management, although challenges remain. Deforestation stripped the country of almost 80 percent of its forest cover. But replanting efforts have helped reversed the trend, environmental groups say.