NEW COSTA RICAN LAW MAY IMPEDE IMPORTS OF U.S.

UNCLAS SAN JOSE 002508

SIPDIS

SENSITIVE

WHA/CEN
EB FOR WCRAFT, BLAMPRON
E FOR DEDWARDS
WHA/EPSC FOR KURS, LGUMBINER
STATE PASS TO USTR FOR RVARGO, NMOORJANI, AMALITO

E.O. 12958: N/A
TAGS: ETRD ECPS ECON PREL PGOV SOCI CS
SUBJECT: NEW COSTA RICAN LAW MAY IMPEDE IMPORTS OF U.S.
PRODUCTS

Ref: 04 San Jose 669


1. (SBU) Summary. The October 25, 2005, Official Gazette
published a law, effective immediately, that may
effectively result in the prevention of exporting U.S.
products to Costa Rica. Post is communicating with the
GOCR at the Ministerial level, importers, and
representatives from other countries to effect the
immediate suspension and eventual repeal of the law. See
action request in paragraph 6. End Summary.


2. (SBU) The new law appears to be the codification of a
requirement that the GOCR tried to enact via Customs
regulations approximately two years ago. (Note: The
specific requirement is for importers to provide a copy of
the customs declaration from the country of origin to the
Costa Rican Customs Agency.) At that time Post explained
to the GOCR via a diplomatic note that U.S. law does not
permit such an exchange of information to foreign
countries. Consequently, the GOCR decided to temporarily
suspend this requirement. For the apparent purpose of
reducing fraudulent customs declarations, the legislative
Assembly on October 25 codified this requirement in law
with immediate effect. Post is communicating with
importers and representatives from other countries to
protest this new law.


3. (SBU) On the previous attempt to enforce this
regulation in April 2004, Post and industry personnel
explained to the GOCR that the information contained on a
Shipper's Export Declaration (SED) was confidential
(reftel). The confidentiality provision is contained in
the Foreign Trade Statistics Regulations, Title 15, Code of
Federal Regulations, Part 30.91 (see link for USG finding
http://www.census.gov/foreign-
trade/regulations/ftsrletters/notice-02172004 .html. That
provision states that the information on the SED may not be
disclosed to anyone except the U.S. Principal Party in
Interest or their agent and only when a copy is needed to
comply with U.S. official legal and regulatory export
control requirements. At that time, the Costa Rican
Customs Agency agreed to suspend the requirement.


4. (SBU) For unknown reasons and without notification, the
regulation was resurrected and went into effect on October
25, 2005. Post is investigating this matter and is
communicating to the GOCR our position on this issue and
its impact on importation of U.S. products. (Note:
approximately 50 percent of imports into Costa Rica are
U.S. products).

--------------
COMMENT
--------------


5. (SBU) Representatives from several companies that
import U.S. products contacted us about this issue. Their
initial reaction is that the implementation of this law
could effectively prevent the importation of U.S. products.
This situation places importers of U.S. goods in an
untenable situation in that it is impossible to comply with
the laws of the U.S. regarding sharing the SED with foreign
countries and the laws of Costa Rica that explicitly
requires submission of a copy of the customs declaration
from the country of origin.

--------------
ACTION REQUEST
--------------


6. (SBU) Post has already sent a letter dated October 28 to
the Minister of Finance, who is responsible for customs,
with copies to the Minister of Foreign Affairs and Minister
of Foreign Trade, in which Charge asked for the "immediate
suspension" of the law published on October 25. In
addition, we are sending a diplomatic note reiterating our
diplomatic note of April 16, 2004 (WHA/CEN has a copy) which
had asked Costa Rica "to suspend this law on a permanent
basis for exports from the United States, so as not to
disrupt trade between our two countries." Finally, Charge
is seeking an immediate meeting with the Minister of Finance
(none has been scheduled yet). Post requests instructions
from the Department on additional actions that should be
taken to quash this law as soon as possible and permanently.
FRISBIE