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