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(506) 2223-1327               Published Monday, March 15, 2010,  in Vol. 10, No. 51     E-mail us
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Pesky tax time is here again for corporations
By Garland M. Baker
Special to A.M. Costa Rica

There is only one tax inactive companies need to pay every year.  It is the education and culture tax.  The tax is due by March 31 which falls on a Wednesday this year.  However, it can be paid anytime during the month of March.

Law 5923 requires the paying of this tax.  Many people slough off paying or do not know about it. The tax is filed and paid using tax form D.110. 

The form is easy to fill out and most banks will accept the payment for the tax authority.  A company’s net capital amount determines the tax to be paid.

As reported on March 24, 2008, the law has not changed significantly since 1983 when law 6879 modified it by increasing the tax 200 percent. There are important aspects to the law that have not changed.  For example, Article 6 of the law requires the tax department, the Dirección General de Tributación, to publish the names of companies that do not pay the tax on a deadbeats list in the official newspaper, La Gaceta. Article 7 allows the tax police to collect the tax using various means outlined under the different tax laws.

In fact, the tax department does not publish the deadbeats list nor goes to great effort to collect the tax even though the law requires it to do so.

Practically speaking, the now minimal tax does not justify the effort or expense. This said, people owning companies do get collection notices for this tax on occasion and this can be a bigger nuisance. Any collection process in Costa Rica means there is an attorney involved and they get their cut, so they can get pretty pushy.

This is really just a pesky tax for inactive companies and its due date is somewhat inconvenient too.  Most relevant taxes for companies are paid in December.  One can obtain the form D.110 for free at the tax department located in Barrio Don Bosco close to Jardines de Recuerdo or buy the form at some national banks. The amount is from 750 to 9,000 colons, not a very big bite.

A company in Costa Rica is either in one of two general tax categories.  Active or inactive.  Active companies are those that perform some commercial activity and receive revenue.  Inactive companies are those that may only hold assets and only exist for that purpose. The asset could be properties or vehicles.
 
Many expats confuse the two and use a company to buy a property and then use the same company to pay their staff which usually requires a bank account and registration with the Caja Costarricense de Seguro Social.  Once they do this, they make the company active in the eyes of the tax authority.  As it is, when opening a bank account these days, the bank usually asks for the form from the tax department activating the company.

An active company requires the filing of an income tax form D.101 in December.  If the form is not filed on time, a hefty fine can be levied against the company and collected judicially including penalties and interest.

All people with companies in Costa Rica should check each year to see if their company is active or inactive.  This can be done by going to this link (http://196.40.56.20/ruc/#consulta) and typing in the company's name or identification number.  
tax question
If an inactive company is active, form D.140, "Declaración de Desinscripción del Registro de Contribuyentes" (declaration to unregister as a taxpayer) needs to be filed with the tax department to put it in an inactive status.

There is one big inconvenience for people that do not pay the education and culture tax.  After a period of non-payment of the tax, there is the possibility the tax department will delete the inactive company from the tax rolls completely.  When this happens, the company in theory does not exist as a legal entity anymore even if it shows up at the Registro Nacional.

Where this becomes a problem is when an expat goes to sell a piece of property held in an inactive company and the buyer requires all the legal paperwork up-to-date.  If the company has been deleted by the tax department, workers there will not issue a certification the company is current.
What generally happens in these cases is that a seller needs to write a letter to the Dirección General de Tributación requesting the reason for the purging of the inactive company. 

They begin a study which can take as long as three months to complete only to return with a letter stating the company was deleted because the education and culture taxes were not paid.  They can reactivate the company after collecting all the back taxes but the process is a pain in the neck.

Generally, what happens is a seller transfers the assets of the purged inactive company to another inactive company so the asset can be sold to the buyer.  All of this takes time and depending on the fiscal value of the asset being sold can be expensive because transfer taxes and legal fees need to be paid.

Expats and Ticos alike should abide by the tax law and pay this annoying tax.  If they do not have someone monitoring their company, like an accountant, they should add a note to their calendar for March of each year to pay this pesky tax.  By doing so, they will avoid irritating problems when trying to transfer an asset to another person.

Garland M. Baker is a 38-year resident and naturalized citizen of Costa Rica who provides multidisciplinary professional services to the international community.  Reach him at info@crexpertise.com.  Baker has undertaken the research leading to these series of articles in conjunction with A.M. Costa Rica.  Find the collection at http://crexpertise.info, a complimentary reprint is available at the end of each article.  Copyright 2004-2010, use without permission prohibited.


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San José, Costa Rica, Monday, March 15, 2010, Vol. 10, No. 51

Costa Rica Expertise
Costa Rica Expertise Ltd http://crexpertise.com E-mail info@crexpertise.com Tel:506-256-8585 Fax:506-256-7575

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Professional Directory
A.M. Costa Rica's professional directory is where business people who wish to reach the English-speaking community may invite responses. If you are interested in being represented here, please contact the editor.


Real estate agents and services

MARGARET SOHN
with Great Estates of Costa Rica

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real estate experience

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Member of
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samargo@racsa.co.cr
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www.realtorcostarica.com
(506)  2220-3729 &  (506)
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(506)  2232-5016 (phone/fax)
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Accountants

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Hearing consultant

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Sala IV orders investigation
of Los Chiles pineapple sites


By the A.M. Costa Rica staff

The Sala IV constitutional court ordered inspections and detailed investigations of pineapple growers in the Berlin de los Chiles section.

A local association said that three companies did not have sanitary permits or had not submitted environmental viability studies and that officials had not acted to rectify the situation.

This is the latest in a series of local oppositions to the pineapple monoculture. This case involves Jimmy Hause S.A., Agro Vicces S.A. and Swiss Tropical Fruit S.A. They are farming hundreds of hectares of land in the area, said a summary released by the Poder Judicial.

The regional office of the Ministerio de Salud was ordered to investigate to see if water was being contaminated.

Pineapple operators frequently pollute nearby streams and rivers with agricultural runoff.

The local association said that the pineapple operations had destroyed forests and wetlands without the permission of the state.

Our reader's opinion
Motorcycle riders should
accept the responsibility


Dear A.M. Costa Rica:

Having owned an insurance adjustment company and specialized in product liability investigations for most of the motorcycle manufacturers in the world for 25 years, I would like to share my observations regarding motorcycle helmets.

Many people who ride motorcycles today have no major medical insurance and, if they do have insurance coverage, their policy limits are exceeded with brain injuries.  After sustaining serious head injuries, hospitals are force to admit, treat, and incur the financial losses which are billions of dollars a year in the United States.

Over a 25 year period I’ve seen brain injured patients spend months in intensive care running up millions of dollars.   For this reason, hospitals are forced to double their bills with ALL patients, including YOU, who have insurance in an effort to cover their losses.  Also, many hospitals are forced to get state and federal government financial relief to cover their losses.  This is why most states now have helmet laws, in my opinion.

The bottom line is YOU have to pay for their negligence in not wearing a helmet through increased insurance premiums and taxes.  When motorcycle manufacturers are forced to settle to avoid lengthy investigations and defense costs, they increase the price of their product and YOU pay again when you buy their product.  The responsible always have to pay for the irresponsible!

I have enjoyed riding motorcycles for 20 years, but the expert riders that helped us in our investigations and testified in court told me to always wear an approved helmet and proper protective gear.  They also pointed out that as we age, our reflexes slow down dramatically and to know when to stop riding. More and more seniors have fatal accidents, because of high powered machines, combined with slower reflexes, alcohol, prescription medication and fatigue from long rides with younger riders.

You can be the most defensive rider in the world, but if there is a product defect, you will go down and if you slide head first into a curb or strike another vehicle without a helmet, your life as you know it could very well be over.

Most of the seriously injured motorcycle riders that I have spoken with admitted they were foolish for not wearing a helmet.  Many admitted to me that they wished they died in the accident.  Some got addicted to pain medication and other drugs and committed suicide.

Statistics to consider:

- Studies indicate that the risk of brain injury in hospitalized motorcyclists is nearly twice that for unhelmeted motorcyclists and that unhelmeted drivers had acute care costs three times that of helmeted drivers

- In California, the first year's implementation of the 1992 helmet law resulted in a 37.5 percent decrease in statewide motorcycle crash fatalities over the previous year; those likely to sustain TBI-related impairments decreased 34 percent. California has demonstrated a more than 99 percent compliance rate in helmet use. This suggests that, with adequate enforcement, unrestricted helmet laws can achieve nearly 100 percent compliance.

- As many as 74 to 85 percent of bicycle-related head injuries could be prevented if bike riders were to wear protective helmets. An average of 140,000 head injuries per year are attributed to children and adolescents in bicycle accidents.

For new motorcycle riders, I recommend a riding course, visit a salvage yard in any large city and you will see blood stained, crashed bikes for as far as the eye can see.  Go to the hospital and talk to the nurses about brain injured, motorcycle patients and witness for yourself the emotional/financial trauma of the patient’s family waiting for the news.  I guarantee you will want to wear a helmet approved by the Department of Transportation and protective gear.  Be responsible and save us all money!
Jim Peck
San José

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A.M. Costa Rica guide

This is a brief users guide to A.M. Costa Rica.

Old pages
Each day someone complains via e-mail that the newspages are from yesterday or the day before. A.M. Costa Rica staffers check every page and every link when the newspaper is made available at 2 a.m. each weekday.

So the problem is with the browser in each reader's computer. Particularly when the connection with the  server is slow, a computer will look to the latest page in its internal memory and serve up that page.

Readers should refresh the page and, if necessary, dump the cache of their computer, if this problem persists. Readers in Costa Rica have this problem frequently because the local Internet provider has continual problems.

Searching
The A.M. Costa Rica search page has a list of all previous editions by date and a space to search for specific words and phrases. The search will return links to archived pages.

Newspages
A typical edition will consist of a front page and four other newspages. Each of these pages can be reached by links near the top and bottom of the pages.

Classifieds
Five classified pages are updated daily. Employment listings are free, as are listings for accommodations wanted, articles for sale and articles wanted. The tourism page and the real estate sales and real estate rentals are updated daily.

Advertising information
A summary of advertising rates and sizes are available for display and classifieds.

Contacting us
Both the main telephone number and the editor's e-mail address are listed on the front page near the date.

Visiting us
Directions to our office and other data, like bank account numbers are on the about us page.


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San José, Costa Rica, Monday, March 15, 2010, Vol. 10, No. 5

Quake rumors are followed by a Saturday night tremor
By the A.M. Costa Rica staff

The national emergency commission went to great lengths Friday to dismiss rumors that it had issued an alert over the possibility of an earthquake.

So, naturally, the next day there was an earthquake in Curridabat.

The Observatorio Vulcanológico y Sismológico de Costa Rica, also dismissed the rumors and blamed unspecified press reports. 

The Red Sismológica Nacional at the Universidad de Costa Rica joined in the chorus and blamed irresponsible people for circulating the rumor. The Red report said that the rumor included false reports that schools were being evacuated.

Also dismissed was what seemed to be a companion rumor that Volcán Turrialba was about to blow its top.
The existence of the rumor demonstrated the uneasiness of the population with three volcanoes acting up and a series of earthquakes, including one in the Central Valley near Sabanilla a week before and monster quakes in Chile.

All three agencies noted that earthquakes are not unusual in Costa Rica because of its geology. But they also said that the technology does not exist to predict quakes. One television station had featured the possible ability of domestic animals to sense oncoming quakes.

The quake at 11:20 p.m. Saturday was felt in the eastern end of the Central Valley, at least in Goicoechea, Montes de Oca, Sabanilla and Tres Rìos. But it was a mere magnitude 2.2. The Observatorio Vulcanológico y Sismológico said it was centered a mile northeast of Curridabat and that it was generated by a local fault.

The Comisión Nacional de Prevención de Riesgos y Atención de Emergencias is the only entity empowered to issue warnings, all three agencies agreed.


Another edition of the Festival de las Artes starts Thursday
By the A.M. Costa Rica staff

The Festival Internacional de las Artes begins its two-week run Thursday, and work began Sunday to install the main stage at Parque la Sabana.

President Óscar Arias Sánchez was on television Sunday night praising the event and providing clips of previous years. The festival began during his first presidential term.

This is an elaborate series of productions that includes locations in Limón and Alajuela. The Ministerio de Cultura, Juventud y Deportes is joined by the Instituto Costarricense de Electricidad in producing the elaborate program. The events run right up to March 28 and the  closing concert at La Sabana.

Participants come from many countries. A day-by-day program for each location is available online HERE!

The inaugural event has been moved from Thursday to Friday due to a conflict at the Teatro Nacional. This is the 12th annual edition.
The program is heavily Spanish with a total of 115 separate events and 53 artists and groups from other countries, including the Ballet Nacional de España.

There even are groups from Bosnia, Denmark, Switzerland and what was Yugoslavia.

Costa Ricans will put on 19 events and lend 75 participates to the list of those involved. Costa Ricans had to compete for the honor.

There is music, theater, dance, street theater, visual arts, movies, storytelling and events for children, as well as expositions and displays of arts and crafts.

The country is investing nearly 2.3 billion colons or more than $4.3 million in the event. A bit less than half come from the culture ministry, and the Instituto Costarricense de Electricidad provides the rest.

Events spill out to other locations in San José, including Teatro Melico Salazar, Teatro Eugene O'Neil and the Teatro Aduana.


Heat wave predicted to continue for start of this week
By the A.M. Costa Rica staff

For Costa Ricans in the Central Valley, the beginning of the week will be more scorchers.

The Instituto Meteorológico Nacional said that a stable mass of dry air is hanging over the country bringing hot weather just as the country experienced last week.

Temperatures along the coast are expected to be in the mid-30s with highs in both Puntarenas and Liberia predicted to be 36 today. That's 97 degrees F.
Alajuela is expected to be high in the Central Valley with 32 C, which is 90 F.

There may be some relief for the Central Valley. The weather institute said that winds will increase cooling some sections of the mountains.

Costa Ricans in the Central Valley are uncomfortable with temperatures in the mid-20s or about 78 to 80 F. 

That there is little cloud cover allows the direct rays of the sun to reach the ground.


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San José, Costa Rica, Monday, March 15, 2010, Vol. 10, No. 51


A reader's report
It helps to have some help at cédula renewal time


Bobby Ruffin*
Special to A.M. Costa Rica

I went last Wednesday and had my cédula de residencia renewed.

After reading in both the A.M. Costa Rica and La Nación there was a new law requiring new and renewers of cedulas to have the Costa Rica government insurance, I went to my nearby government clinic. I speak Spanish, but I always take my housekeeper, Luz, because she is more familiar with the system and knows when one is getting the runaround or the facts.

There were a lot of people in the clinic as usual, but the desk to apply for insurance was unoccupied. I told the young lady why I was there and she gave me “what is this crazy gringo talking about” look.  Luz meanwhile got into the conversation and tried to explain in more detail. Finally, it was concluded I didn’t have to buy the insurance. However I was still a little apprehensive.

So, with my telephone appointment, I went to immigration. The appointment had the exact hour and a number. I had tried to pay the $100 at a government bank prior to going to the appointment, but a bank worker said it was better I pay at the bank at immigration. I got there more than an hour before the appointment hour. I got in a line, and Luz went to the bank. I was in the line for about an hour and was getting nervous about the whereabouts of Luz.

Meanwhile, I began to question some of the others in line, and it appeared I was the only one renewing and the others were first time appliers and did not have appointments.
Finally Luz returned after being in line at the bank for an
hour. I told her I didn’t think I should be in line. We went to the guard, and he had a list of people with appointments. My name was on it. Whew!

I went into a big air conditioned room, but the part I was in was partitioned off and was about 10 feet wide and 40 feet long and packed.   The interviewers were at one end and called the names out over the sound of all the people in the big room. In time, I finally got a seat near the interview area so I could hear my name when called. An elderly Latin lady was next to me and seemed the only other person I met who was renewing their cédula, and her appointment time was about the same as mine.

After two hours of waiting, I was ready to give up and went outside. it was noon, and I had to use the restroom.  Luz was waiting and asked if it was done, I told her I was giving up. She said you can’t do that. You will lose your money. So she went in the room with me and she found the guard and asked if he could help. He found my name again on the appointment list and said he would be right back. I went to the restroom and when I got back Luz was gone and a young woman told me she was in the interview room.

Ten minutes later had everything done for renewal.

I suppose the moral of the story is that I hope Luz does not find out I am not paying her enough.

• Mr. Ruffin lives in Guadalupe.

EDITOR'S NOTE: Expats also can renew their cédulas via the Banco de Costa Rica.



Michael Moore film on capitalism will be featured at Speaker's Forum

By the A.M. Costa Rica staff

Would Jesus be a capitalist? That is the question Michael Moore asks in his latest movie, "Capitalism, a Love Story."

The movie is the focus of the March 23rd Speaker's Forum where the movie will be played.

The showing is at 5:30 p.m., and those who wish to attend are asked to arrive by 5 p.m. at Sam Butler's condo in Bello Horizonte. Butler organizes the Speaker's Forum.
He said that seating is limited to 25 and asked that those wishing to come reserve their seats by e-mail to samjcr@pobox.com or by telephone to 2289-6333 or 8821-4708. Butler will respond with detailed instructions to his condo.

In the movie, Moore explores in his typical confrontational style the financial collapse of  2007-2010 and seeks to promote a more democratic form of economic production, according to those who have seen the film. He also wonders about the moral aspects of capitalism and if it is consistent with the teachings of Christ.



Police effort screens nearly 500 persons in the vicinity of El Pueblo

By the A.M. Costa Rica staff

A police operation Friday night and early Saturday morning  resulted in the arrests of 21 persons in the vicinity of the Centro Comercial El Pueblo, a popular evening dancing and drinking spot. The bulk of the arrests were of persons who could not show they were in the country legally.

The commercial center north of San José in Guadalupe has tightened security after several shootings two years ago. The arrests all were outside the commercial center and involved the questioning of nearly 500 persons. Two
persons were found to be carrying firearms illegally, said the Fuerza Pública and two motorists were intoxicated. A knife also was confiscated from one of the intoxicated motorists, they said.

The Fuerza Pública was assisted by the Unidad Canina of the Ministerio de Gobernación, Policía Seguridad Pública and the Policía de Tránsito. Police also said they found vehicles with fake revisión tecnica stickers

One motorist was carrying 11 doses of marijuana  and a scale. A second man carried 278 grams of crack cocaine, officers said


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San José, Costa Rica, Monday, March 15, 2010, Vol. 10, No. 51

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Social networks considered
as ways to fight violence


By the A.M. Costa Rica wire services

Average citizens are using the Internet and mobile phones to fight violence, and the movement is set to grow. That was the message of a two-day London summit in which social media activists from around the world met to explore ways the Internet and mobile technology tools can be used to combat violent extremism.

Jason Leibman, co-founder of the Alliance for Youth Movement, which organized the event, says Web sites such as the social networking site Facebook, the video-sharing site YouTube, and the micro-blogging site Twitter have become critical tools for fighting extremism. 

But he says extremist groups are also often savvy Internet users. "Groups like al-Qaida are extraordinarily sophisticated in how they're using media, which is everything from setting up popular blogs, being on platforms like YouTube, using platforms like Second Life really effectively — so the quote unquote bad guys are often extraordinarily effective at using these tools — much more effective than those that are trying to fight against them," he said.

Social media, he says, is a natural extension of traditional media sources such as radio and television. But he says by using the Internet people can get global attention for their cause cheaply and easily.

And he says all over the world people are using the Internet to fight what they see as injustices. He says, for example, that the micro-blogging site Twitter has been used to combat media censorship in Iran. "You know, one of the reasons it's been so widely used in Iran is that it's a great tool for people that are being blocked off often times from media coverage, from the Internet even, to get up and broadcast their messages to the world," he said.

Colombian Oscar Morales Guevara set up a Facebook group in January 2008 against the insurgent group Fuerzas Armadas Revolucionarias de Colombia. Morales called for a massive march against the guerilla organization, and through Facebook rallied over 12 million people who marched in over 200 cities around the world.

Its supporters included Colombia's president, Alvaro Uribe, and the country's most influential newspaper El Tiempo. But Morales says the movement was not led by politics.  "We had no engagement whatsoever with any political parties. We were just regular citizens expressing ourselves, demanding that our voice be heard," he said.

He says the Internet has given people the power to be independent. "One of the things that Internet has is that we can have our own voice, our own movement, without having to rely on governments, or on traditional media. Facebook itself is a media," he said.

Pastor Kingsley Bangwell, from the Nigeria-based Youngstars Foundation, which gets young people involved in social development projects in Africa, says right now the use of Internet is not sufficiently widespread in Africa to be as useful a tool.

But mobile phones, he says, are changing lives. According to the United Nations, mobile subscriptions in Africa rose from 54 million to almost 350 million between 2003 and 2008, the quickest growth in the world.

And, Kingsley says, mobile phones are used for everything from sending money to buying food in a market.

And he says they're increasingly used by young people for political purposes. He says young people in Nigeria are using their phones to raise awareness about the next election.  "Right now as we're talking young people are mobilizing, gathering phone numbers because they want to engage in a huge text message mass campaign and all of that, so it's also going to play a very critical role in the forthcoming election. I'm hearing that is happening also in Ghana, I'm hearing that Cameroon is mobilizing around that — people are beginning to understand the power of using telecoms for campaigns," he said.

According to Internet marketing research firm Miniwatts Group, there are about 1.7 billion Internet users worldwide. In Africa it says there are 67 million, up from only 4.5 million users in 2000.

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San José, Costa Rica, Monday, March 15, 2010, Vol. 10, No. 51


Latin American news
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Three from U.S. consulate
murdered in Ciudad Juárez


By the A.M. Costa Rica wire services

The U. S. government says it is outraged by the killing of three people associated with the U.S. consulate in the drug-plagued Mexican border city of Ciudad Juárez.

Officials say a U.S. consulate employee and her husband, both U.S. citizens, were killed Saturday in a drive-by shooting. The couple's baby, who was also in their vehicle, was not injured.

In a separate shooting, gunmen killed the husband of a Mexican citizen employed by the consulate.

Officials say they do not know the motive for the killings.

Ciudad Juárez, which lies near El Paso, Texas, has been on the front line of Mexican President Felipe Calderon's war on drug cartels. The various drug organizations are fighting to control the valuable routes that are used to bring narcotics into the United States.

In related news, the State Department has authorized diplomats working at U.S. consulates in northern Mexico to send family members out of the area because of security concerns.

Meanwhile, in western Mexico, at least 24 people were killed Saturday in drug-related violence.

More than 14,000 people have been killed in drug-related violence in Mexico in recent years, despite the deployment of nearly 50,000 troops to fight the drug cartels.

President Calderón ordered the security forces to fight drug violence and trafficking after his election in 2006.


Bull rider dies at festival

By the A.M. Costa Rica staff

A 46-year-old bull rider with the last name of García died Thursday night when he was savaged by a bull at a local festival in Judas de Chomes, said the Judicial Investigating Organization.

The man died a short time after being admitted to Hospital Manseñor Sanabria in Puntarenas.

Bull riding and bull baiting are staples of Costa Rican festivals. Injuries are frequent.

García was identified as an agricultural worker who participated in bull riding from time to time.



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