Costa Rica: TFCA Eligibility and the Gesling Ranch case

UNCLAS SAN JOSE 002523 SIPDIS DEPT FOR WHA/CEN SIPDIS E.O. 12958: N/A TAGS: EINV KIDE CS SUBJECT: Costa Rica: TFCA Eligibility and the Gesling Ranch case REF: 2005 SAN JOSE 02154 (B) email Sampliner - Finn AUG 08, 2006 5:07PM 1.(U) Summary. Despite a U.S. citizen landowner's continuing legal battle to receive compensation for an earlier nine-year confiscation of his property by the GOCR, the Embassy does not believe that the Costa Rican court system has so far failed to provide due process in the matter. Embassy believes that Costa Rica meets the requirement under the Tropical Forest Conservation Act (TFCA) that a beneficiary country have an open investment regime, including the Administration's additional interpretive criterion that there are no outstanding nationalizations of American property since his property was returned. End Summary. 2.(U) In 1983 the Government of Costa Rica (GOCR) confiscated lands known as the Gesling Ranch owned by Amcit James Gesling. GOCR subsequently lifted the expropriation order in 1992 returning clear title to the owner. Gesling began legal proceedings in 1995 to obtain compensation for loss of use of the ranch during the 1983-1992 expropriation period. In 1998 the Costa Rican court recognized the validity of Gesling's claims for damages and ordered an independent appraisal. That same year the independent appraiser submitted findings which the Embassy believes was approximately $11 million USD. The GOCR objected to the amount and refused to pay. 3.(U) The 1998 appraisal was never certified by the court. No substantive movement occurred until October 2005, when the court reversed its decision finding that damage claims were unsupported. In reversing its earlier decision the court ruled that the GOCR was not liable for damages to Gesling because he failed to provide adequate business records to support specific figures on his losses. 4.(U) On November 28, 2005, Gesling appealed the court's decision, an appeal that is still pending. 5.(U) Between 1999 and 2005 Gesling unsuccessfully requested on several occasions that the GOCR ministry of justice enter arbitration to determine a damage award. ¶6. (U) Comment. Although it has been a slow process, and the claimant remains aggrieved, post does not believe that the Costa Rican courts have to date failed to provide due process. Costa Rica has an open investment regime, one eligibility requirement for a country to be considered for debt relief under the Tropical Forest Conservation Act (TFCA). Moreover, the Embassy believes that the treatment of the Gesling matter by the Costa Rican court system has so far accorded due process, thus meeting the Administration's additional interpretive criterion under the TFCA that there exist no outstanding cases of nationalizations of American property. End Comment LANGDALE