The CAFTA Report
$1 billion arbitration suit promised against Costa Rica

cafta flags
Insurance Telecom
Agriculture
Advertising
Labor laws
 Security
About us
Investments
Copyrights
Services
News feed
Business law
Classifieds
Contact Us


Free trade zones in cross hairs during this election

By the CAFTA Report news staff

The Feb. 2 election is the starting point for proposing news taxes.

Among other concerns, foreign businesses here are watching what a new government might do to tax preferences in the free trade zone. The fact that many exporters do not pay taxes locally has been a topic in the presidential campaign. Tax deals have been an incentive to lure firms here.

The finance minister, Edgar Ayales, said last week that his staff was ready to start preparing new tax laws in conjunction with the staff of whomever is elected.

If Johnny Araya Monge of the Partido Liberación Nacional wins, Ayales most likely will continue as minster of Hacienda. The taxes that will be created by news laws most likely will resemble those that President Laura Chinchilla tried to put through earlier in her four-year term.

Business people support Araya because the alternative seems to be José María Villalta Florez-Estrada, of Frente Amplio. He wants to renegotiate the free trade treaty with Central America and the United States, seeks much higher taxes on businesses, has proposed price controls and supports state ownership of many productive sectors.

— Jan. 25, 2014

$1 billion arbitration suit promised against Costa Rica

By the CAFTA Report staff


Costa Rica has a $1 billion problem. That is the amount being tossed around in an arbitration case expected to be filed shortly by Infinito Gold Ltd. of Calgary, Canada.

The case will be arbitrated under the Costa Rica-Canadian free trade treaty, not the Central American Free Trade treaty.

The Calgary firm complains, not without merit, that its concession for the Las Crucitas open pit gold mine had been annulled by a lower court despite prior higher court approvals.

Firm president John Morgan said in April that the Costa Rican government has been notified of its intention to seek arbitration. That notice appeared to be an effort to negotiate the case, but Costa Rica did not seek to do that.

The mine has been opposed vigorously by local environmental activists, Even now there is an online petition placed by a Canadian group. Mining Watch, that has gained 300,000 signatures worldwide asking the firm to refrain form arbitration.

The company said that it completed all the environmental, social and technical studies and obtained all approvals required under Costa Rican law to develop and operate the Las Crucitas Project. In February 2008, the Secreteria Tecnica Nacional Ambiental approved a modified environmental impact study while in May 2008, the Ministerio de Ambiente y Energia confirmed the local subsidiary's exploitation concession. On Oct.17, 2008, then-president Óscar Arias issued a presidential decree declaring the Crucitas project to be in the national interest, allowing a change of land use permit to be obtained and for site clearing to commence.

The company added:

On April 16, 2010, in response to a claim brought by a public interest group that had halted clearing and mine construction activities for 18 months, the constitutional chamber of the Supreme Court ruled that all of the objections that had been raised against the project were without merit with one exception that was resolved by the time the legal process was completed. The constitutional chamber's decision, which had involved a project site inspection in addition to oral hearings, included 340 pages of reasons released in July 9, 2010, which addresses all constitutional, legal and environmental/technical issues in depth.

Despite this  complete and definitive ruling from the constitutional court  allowing the Crucitas Project to proceed, the company's concession to develop Las Crucitas was annulled by a decision made initially on Nov. 24, 2010, by a lower Costa Rican court, the Tribunal Contencioso Administrativo, and affirmed on November 30, 2011 by the administrative chamber of the supreme court. The lower court also sought an investigation targeting Arias and the then-environmental minster.

In its decision, the adminstrative chamber reached a conclusion that was the opposite of the conclusion the constitutional court had reached only a year and a half earlier, effectively upholding the tribunal's decision to annul Infinito's concession and invalidate its environmental approvals.

The case has had a negative effect on proposals by other companies to do business in Costa Rica.

The Crucitas property in northern Costa Rica is believed to contain 1.8 million recoverable ounces of gold.

— Jan. 25, 2015

Arbitration panel is sought in dispute with El Salvador

Special to The CAFTA Report


Costa Rica is seeking the creation of an arbitration panel under the rules of the Free Trade Treaty with Central America and the United States.

The issue is the continuing refusal of the country of El Salvador to apply duty preferences to Costa Rican imports, said the Ministerio de Comercio Exterior.

Commerce officials have been in talks with their counterparts in El Salvador, and the arbitration panel is the next step in the complex process that will end with a ruling by the free trade commission set up under the treaty,

— Jan. 23, 2014





Contact us here: Editor@TheCaftaReport.com




Insurance Telecom
Agriculture
Advertising
Labor laws
 Security
About us
Investments
Copyrights
Services
News feed
Business law
Classifieds
Contact Us
The material on this page is copyrighted 2014 by A.M. Costa Rica.com Ltda, San José, Costa Rica