US embassy cable - 05SANJOSE2508

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). 
 
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COMMENT 
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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. 
 
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ACTION REQUEST 
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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