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(506) 2223-1327       Published Tuesday, May 5, 2009,  in Vol. 9, No. 87     E-mail us
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Two casinos restrict hours to comply with decree
By the A.M. Costa Rica staff

At least two downtown casinos have shortened hours to comply with a government decree.

The Casino Colonial and the casino in the Hotel Del Rey are closing at 5 a.m. and reopening at 3 p.m., according to signs posted at the Colonial and workers in the Del Rey.

This is the latest result of a presidential decree that has left casino workers unhappy and casino operators and patrons confused.

Estimates from the 1,500 casino workers are that about 20 percent of their number will lose their jobs if the rules continue.

The decree may never have been published in the La Gaceta official newspaper. The idea of restricting casino hours was the brainchild of Laura Chinchilla when she was vice president. She has since quit the post to become a candidate for the presidential nomination of the Partido Liberación Nacional.

There has been no announcement from Casa Presidencial that the decree would be enforced. Frequently presidential decrees promulgated with much fanfare fall by the wayside quickly. However, they do have the force of law.

In addition, the Colonial said that it was starting to charge gamblers for their drinks. Alcoholic beverages traditionally have been free for gamblers, even those playing slot machines. A waitress at the Colonial said that drinks still were
free Monday night but that they probably would be about 500 colonies when the casino begins collecting. That's less than a U.S. dollar. Collecting for drinks also was required by the decree.

From 5 a.m. to 3 p.m. is not a busy period for casinos, and many smaller operations outside of San José are not even open at that time. The Colonial has been a 24-hour operation for years. The original decree called for closing during more hours of the day, but casino operators have been negotiating with the government for nearly a year.

The decree summarizes what the laws have said. For example, a casino is supposed to be associated with a major hotel. The original idea was to make the casinos a mecca for tourists. But many more Costa Ricans gamble at the downtown casinos now than tourists. The operator of the Casino Colonial constructed a hotel, in part, so the business would be with in the law.

Ms. Chinchilla promoted the decree with the idea that it would cut down on prostitution. She claimed that casinos were centers of prostitution. She may have been confused by the reputation of the Del Rey as a place where men meet working women. The Del Rey bar continues to be open while the casino section and the slot machines are blocked.

Ms. Chinchilla also appeared to be unaware of the dozens of brothels that populate the downtown area. These are unaffected by the decree.

Some workers at the Casino Colonial suggested that the municipality was taking on the role of enforcing the decree.


Wrecked helicopter was on a drug flight north
By the A.M. Costa Rica staff

The security ministry has been hit with another scandal with the disclosure that a former aviation employee was piloting a helicopter containing at least 347 kilos of cocaine.

This is the aircraft that crashed Friday in a remote section near Cerro de la Muerte.

The pilot, Edgar Arguedas Alfaro, worked 15 years in the Servicio de Vigilancia Aérea of the security ministry until he went into private business three years ago, the ministry said.

Also killed in the crash was a Mexican national, identified by the security ministry as a photographer. It is clear now that the helicopter trip was not photographic.

There is uncertainty if the cocaine found in the wreck of the helicopter is related to the 320 kilos of cocaine taken by robbers from the prosecutor's officers in Golfito last month. The Ministerio de Gobernación, Policía y Seguridad Pública in the person of Janina del Vecchio, the minster, has denied responsibility even though guards at the courthouse were members of the Fuerza Pública.

The people who robbed the Golfito courthouse had intimate knowledge of police procedure. They lured away two of four officers by making a false domestic violence complaint.

There were rumors Sunday night that the rescue
crews had found cocaine, but a ministry press liaison would not discuss the topic.

Ms. del Vecchio held a press conference Monday in which such declared her certainty that Costa Rica is not only being used as a land route for cocaine but also as a cocaine storage location.

The helicopter landed somewhere in the south. One report says on the Osa Peninsula. The heavily loaded craft was flying to Turrialba where the Mexican photographer owned a hotel, officials said.

They believe that the hotel is a storage location and linked the cocaine to one of the Mexican cartels.

The Bell 206 helicopter crashed among mature trees at an altitude of some 7,800 feet above sea level near La Georgina in the Cerro de la Muerte, the ministry said. Sunday they reported that rescue crews had just reached the wreck. But Ms. del Vecchio said Monday that some police and a resident reached the craft Friday, shortly after it went down. These were the people who discovered the drugs.

Ms. Del Vecchio said that police and judicial agents at the scene worked with utmost confidentiality to avoid surprises. She meant like the robbery in Golfito.

The exact amount of cocaine is unclear. The whole case is in the hands of the Judicial Investigating Agency. Ms. Del Vecchio would not say if she thought the cocaine came from the Golfito robbery.


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San José, Costa Rica, Tuesday, May 5, 2009, Vol. 9, No. 87

Costa Rica Expertise
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sportsmens update
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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.


Residency experts

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Real estate agents and services

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Ph/Fax: 2221-9462, 8841-0007
Swine flu seems stabilized
but bug is moving south


By the A.M. Costa Rica staff
and wire service reports

The swine flu situation appears to be stabilizing. Costa Rica continues to have just one confirmed case of the disease and two persons are hospitalized as probable victims.

Meanwhile directors of Saint Clare private elementary and high school in San Juan de la Unión have changed their minds and are resuming classes today. The school had canceled classes through Wednesday, but a student thought to have contracted swine flu was cleared by local health officials.

The Ministerio de Salud stressed that the transmission of cases in Costa Rica is closely linked to persons who have traveled to México or are family members or close friends of those who have.

And, the ministry said, the cases that have come up appear to be light. The individuals in the hospitals are an 11-year-old with asthma and a 53-year-old diabetic, the ministry said.

The ministry said its physicians have reviewed 425 cases of persons with symptoms similar to that of swine flue. Some 369 cases have been discounted and seven cases continue to be probable. Attendants are awaiting laboratory results for the others.

Health officials said they recommend Costa Ricans not to travel to countries where there are confirmed flu cases. They also said that they were expecting an increase in the seasonal flu because the country is entering the rainy season. This happens every year, they said.

Health officials met with managers of airlines and of Juan Santamaría airport Monday to discuss tightening security over incoming passengers.

Once again health officials urged anyone with symptoms to remain home and not go to work or school.

The World Health Organization says there is some concern the swine flu A-H1N1 virus may start moving from the Northern Hemisphere to the Southern Hemisphere, where the regular winter flu season is approaching.

Keiji Fukuda, the organization's assistant director general, said most swine flu cases are still in North America, but there have been some incidents of the virus going south, and some travel-related infections in Europe and Asia. The virus has spread to Colombia with the first confirmed case in South America.

"We have concerns about the infection traveling to the Southern Hemisphere, because that part of the world will be heading into the winter months, and the winter months are when influenza viruses usually thrive, and so you typically see epidemics and outbreaks of influenza occur during those colder months," Fukuda said.

Meanwhile, Mexico's Health Secretary Jose Cordova says most economic activity in his country will resume Wednesday, and said the outbreak there is waning.

Fukuda stressed it is critical for countries everywhere to remain alert and keep monitoring the situation. He hailed the fact this level of surveillance is unprecedented.

"At this point in history, this is the best surveillance we have ever had," he said.

During a Geneva-based news conference, Fukuda said there were just more than 1,000 confirmed cases worldwide in a total of 20 countries, with 26 deaths, but cautioned that the numbers are constantly changing. One death is in the United States, the rest in México.

He made clear that if the World Health Organization raises its alert level from phase five to phase six, it will not be a statement about the severity of the virus, but would mean there is clear evidence of community level transmission in another region of the world outside North America.

Another decline expected
in foreign direct investment

Special to A.M. Costa Rica

Last year’s slump in companies investing in businesses abroad is likely to fall further before recovering in two years, hitting developing countries particularly hard in the meantime, the chief of the United Nations Conference on Trade and Development warned Monday.

The global meltdown in economic and financial markets slashed foreign direct investment by some 15 per cent in 2008, and Supachai Panitchpakdi, the secretary general of the conference, said the trend may continue downward this year.

“Very little has been said about the impact of the crisis on investment,” said Supachai at the start of a week-long conference on foreign direct investment trends in the developing world.

“You cannot have recovery without going into new investment, new employment,” he added, underscoring the need to clean up the financial sector around the world to support new rounds of investment.

He also warned participants of the first meeting of conference's new Investment, Enterprise and Development Commission that the decline in direct investment will be far deeper this year.

According to the the conference's World Investment Prospects Survey 2009-2011, some 80 per cent of executives of transnational corporations surveyed anticipated cutbacks in investment in the short-term but a return to more healthy flows in 2011.

“There are indications that a deep decline will take place with a great degree of variation between countries and regions,” said Supachai. Among the signals are the declining profits reported by businesses and limits on resources as banks struggle to cope with heavy losses and continue to rid themselves of toxic assets.

“No new borrowing, no new flows of funding mean little new investment internationally,” he added.
 
Despite the bleak situation, there are opportunities for investment now for firms that have cash, as asset prices are cheap, and new, energy- and environment-related industries can be expected to develop, he stressed.

Country fails to make list
of turtle friendly fishing


By the A.M. Costa Rica staff

Costa Rica's shrimp industry may be in trouble again. The Department of State certified 39 countries and one economy as fishing in a way that does not endanger sea turtles.

Costa Rica was not on the list, meaning it might not be able to export to the United States. Costa Rica has been on and off the list, and shrimp fishermen are encouraged to use turtle excluders on their trawl nets. The excluders allow turtles to swim to safety when caught in a shrimp net.

The department said it makes certifications annually on May 1 and bases them in part on the results of verification visits State Department and National Marine Fisheries Service teams make to exporting countries.

Another round of phones
released for those eligible


By the A.M. Costa Rica staff

The telephone company is releasing 60,000 GSM cell lines to those customers who are on a waiting list.

The telephone lines will be available through Friday, said the Instituto Costarricense de Electricidad. Those eligible have numbers between 9035780 and 9103471.

Those with the lucky numbers can obtain their lines through agencies of the company, through authorized stores or online at the company's Web site, www.grupoice.com, it said.
Applicants have to have paperwork that is outlined online.

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San José, Costa Rica, Tuesday, May 5, 2009, Vol. 9, No. 87


800 new IRS international agents to be hired
Obama seeks to tighten tax pinch on expats and U.S. firm

By the A.M. Costa Rica staff

President Barack Obama said Monday he wants to crack down on U.S. companies and wealthy investors who avoid federal taxes through offshore business dealings. Obama unveiled a plan that aims to boost U.S. tax revenue by $210 billion over the next 10 years and preserve American jobs.

The proposals, which must be approved by the U.S. Congress, would have an impact on U.S. companies, like Intel Corp., doing business here and expats who will be looked at closer by the U.S. Internal Revenue Service. Some 800 new international agents would be hired.

Obama said the U.S. tax code is cheating the United States out of good-paying jobs and badly needed funds.

"It is a tax code that makes it all too easy for a small number of individuals and companies to abuse overseas tax havens to avoid paying any taxes at all," the president said. "And it is a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York."

Appearing with Treasury Secretary Timothy Geithner, the president said he wants U.S. businesses to remain engaged and competitive on the world stage, but that offshore tax havens must be eliminated. Costa Rica has been called a tax haven, although that term seldom is defined.

Obama said that he wanted foreign banks to provide the U.S. government with Form 1099s for its U.S. customers. This is a form that U.S. banks now supply routinely.

In a separate release, the U.S. Department of the Treasury outlined a number of specific steps the president was proposing.

Currently, wealthy Americans can evade paying taxes by hiding their money in offshore accounts with little fear that either the financial institution or the country that houses their money will report them to the Internal Revenue Service, the Treasury Department said. In addition to initiatives taken within the G-20 to impose sanctions on countries judged by their peers not to be adequately implementing information exchange standards, the Obama administration proposes a comprehensive package of disclosure and enforcement measures to make it more difficult for financial institutions and wealthy individuals to evade taxes, it added. The Treasury Department said that the administration estimates this package would raise at least $8.7 billion over 10 years by:

•   Withholding taxes from accounts at institutions that don’t share information with the United States: This proposal requires foreign financial institutions that have dealings with the United States to sign an agreement with the Internal Revenue Service to become a “qualified intermediary” and share as much information about their U.S. customers as U.S. financial institutions do, or else face the presumption that they may be facilitating tax evasion and have taxes withheld on payments to their customers. In addition, it would shut down loopholes that allow qualified intermediary to claim they are complying with the law even as they help wealthy U.S. citizens avoid paying their fair share of taxes. There was no explanation on how the U.S. government would withhold taxes from the funds of innocent third parties.

• The Obama administration proposes tightening the reporting standards for overseas investments, increasing penalties and imposing negative presumptions on individuals who fail to report foreign accounts, and extending the statute of limitations for enforcement.

• As part of the Obama administration’s budget, the Internal Revenue Service will hire nearly 800 new employees devoted to international enforcement, increasing its ability to crack down on offshore tax avoidance.

A White House fact sheet said that the effective U.S. tax rate on U.S. multinationals was 2.3 percent in 2004, the last year for which data is available. That number came from estimating that U.S. multinationals earned about $700 billion offshore and paid just $16 billion in taxes, according to the Treasury Department. However, the companies are not obligated to pay U.S. taxes on much of this foreign earnings.

Opponents, including the U.S. Chamber of Commerce
Obama and treasury secretary
White House photo
Barack Obama with Treasury Secretary Timothy Geithner announce the proposed changes in the tax code


and some members of Congress, said that attacking corporations is popular politically.

The United States tax code covers citizens who live abroad. Many expats in Costa Rica hold a majority interest in local corporations. Under U.S. law they have to report corporate bank accounts they control. But many do not because the rules are not well known and the forms are complex.

U.S. citizens could earn $87,600 tax free in 2008, but they would still have to pay Social Security and Medicare taxes. Many do not bother to do that.

Costa Rica does not levy a capital gains tax, but the United States does. A U.S. citizen who makes a big real estate profit is subject to U.S. taxation, although most do not pay. Some run the money through a Costa Rican corporation.

The rules for corporations are far more complex.  The White House said that a January General Accounting Office report found that of the 100 largest U.S. corporations, 83 have subsidiaries in tax havens. The fact sheet named three small, low-tax countries: Bermuda, the Netherlands, and Ireland but did not define tax haven.

Obama mentioned that in the Cayman Islands, one address alone houses 18,857 corporations, very few of which have a physical presence in the islands. He called this a tax scam several times. However, it is not unusual for a corporation to have incorporated in one jurisdiction and do business in others. Delaware, the home state of Vice President Joe Biden, is famous for being what is called a corporate haven. The state also does not levy an income tax on companies. More than half of U.S. publicly traded companies are incorporated there. The companies appoint someone, probably a lawyer, to receive documents on behalf of the corporation. These are called registered agents. The Delaware Division of Corporations says more than 850,000 business entities have made Delaware their legal home.

Some are calling the Obama plan a new tax because the proposals seek to change the law to exact tax even from individuals and corporations that are now legally exempt.  The fact sheet said the president seeks to reduce the amount of taxes lost overseas through unintended loopholes that allow companies to legally avoid paying billions in taxes, as well as the illegal use of hidden accounts by well-off individuals.

Costa Rica found itself labeled a tax haven April 2 when the  Organisation for Economic Co-operation and Development put it on its so-called black list with three other small countries.  Guillermo Zúñiga, minister of Hacienda, quickly announced that lawmakers would be given a bill to end bank secrecy. In other words, bank records of individuals and corporations would become open to tax collectors here and elsewhere in the world. Curiously the Cayman Islands were not on the black list.


Zuñiga, in a press release, said that Costa Rican tax authorities can only open bank accounts with the authorization of a judge and that the lifting of bank secrecy for tax purposes would be a very valuable tool to fight tax fraud. He noted that the Arias administration had a program to fight tax fraud.


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San José, Costa Rica, Tuesday, May 5, 2009, Vol. 9, No. 87


Chemical firm faces $6.2 million in damages over big fire
By the A.M. Costa Rica staff

The nation's environmental watchdog wants to charge a chemical company 3.5 billion colons for an explosion and fire that leveled a storage facility in Moín in December 2006.

The company is Químicos Holanda, a subsidiary of Brenntag Latino América.

The estimated damage in dollars is $6.2 million.

The explosion and fire killed two persons and burned others. But it also dumped large quantities of petroleum and chemical products on the ground. Some 20,000 persons in the area were left without water for two months as a result of the disaster because the water supply was polluted.
The assessment of damage that was determined this week includes restoration of water supplies and cleanup of various water courses.

More than 360 persons had to be housed in shelters after the Dec. 13, 2006, blaze. There also were fish kills.

The blaze raged for 12 hours and sent thick, black smoke into the air and all over the neighborhoods.  More than 20 large tanks exploded. There is an assessment for air quality, too.

The company will be brought before the Tribunal Ambiental Administrativo later this year, and it can dispute the assessments at that time. The study of damages was coordinated by a special commission set up by the government with members from many agencies.


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San José, Costa Rica, Tuesday, May 5, 2009, Vol. 9, No. 87



A.M. Costa Rica

users 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 week day.

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

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Foreign films winning praise
at New York cinema festival


By the A.M. Costa Rica wire services

The Tribeca Film Festival was created to promote New York artists following the Sept. 11, 2001, terrorist attacks, but critics say many of the most compelling entries during the event's eight-year history have been foreign documentaries and dramas. Organizers believe a strong slate of foreign films each year echoes the multi-cultural spirit of the city.

The Tribeca Film Festival was trimmed down this year as a result of the economic downturn, showing 86 features instead of the 120 last year. Films from 36 countries are among the works being screened, with many of those movies competing in Tribeca's two main categories, World Narrative and World Competition.

Hollywood actor Robert DeNiro and his partner Jane Rosenthal launched the festival shortly after the Sept. 11 terrorist attacks. The pair wanted to bring both money and people back to lower Manhattan, and established the Tribeca Film Festival as a way of promoting local and foreign artists. Tribeca is a trendy neighborhood, located just blocks from the site of the World Trade Center attacks.

Even with a scaled-back festival, organizers said it's essential to keep the event's mix of homegrown artists and foreign newcomers. Genna Terranova is the festival's senior programmer.

Some of this year's most anticipated films include "About Elly," an Iranian drama about a group of old college friends who reunite for a weekend adventure on the sea, but lies and deception quickly lead to a catastrophe. Asghar Farhadi took the best director prize at the Berlin Film Festival this year.

Another film earning critical acclaim is "Fixer: The Taking of Ajmal Naqshbandi." The documentary examines the 2007 kidnapping and beheading by the Taliban of the 24-year-old translator and intermediary hired by foreign journalists in Afghanistan. Directed by an American, Ian Olds, the movie is being shown in English, Dari, Pashto and Italian subtitles.

As in previous years, Latin American films are making a strong showing at the festival. Ms. Terranova said one highlight was the Brazilian movie, "Garapa," directed by Jose Padilha.

"It's a documentary about hunger in Brazil. He follows three families, with a 16-mm. black and white camera. He sort of lives with this family. It's a tough film," Ms. Terranova said.

Because many foreign, small budget and independent films often have a hard time finding large audiences or a distributor in the United States, the festival's programmers say that promoting those works is part of what makes Tribeca a special outlet for artists from all around the world.


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San José, Costa Rica, Tuesday, May 5, 2009, Vol. 9, No. 87


Latin American news digest
European economic news
is worse than was predicted


By the A.M. Costa Rica wire services

Europe has received more bad economic news, with the 27-member European Union announcing the business downturn would be far worse this year than its earlier predictions. 

The European Union's economy is expected to shrink by 4 percent this year — more than twice what was estimated in January. And that is only part of the grim news that was delivered by the European Commission, the bloc's executive arm.

Unemployment in the 27-member EU is expected to reach 11.5 percent by 2010 — the highest level since World War II.

And as governments invest heavily in economic stimulus plans, their deficits are expected to soar to about 7.5 percent of gross domestic product, more than twice the limit allowed under EU rules.

But EU economic commissioner Joaquin Almunia tried to offer a bright side to the gloomy news he delivered to reporters in Brussels.

"Some positive signals have appeared in the last weeks, including the evolution of the financial markets, improvement in business expectations and some real indicators, such as export data in Asia, pointing, all of them, to a stabilization of the economy in the second part of this year and a gradual recovering in 2010," Almunia said.

But the economic situation is likely to get worse in Europe before it gets better. The European Union predicts the German economy, Europe's largest, is likely to contract by 5.4 percent this year, a larger decline than the EU average.

The Latvian economy is expected to be hit even harder, shrinking 13.1 percent in 2009, while Ireland's economy is expected to shrink by 9 percent.

The European Union predicts the bloc may begin to slowly recover next year, but only if the banking system and international trade pick up.





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What we published this week: Monday Tuesday Wednesday Thursday Friday Earlier
The contents of this page and this Web site are copyrighted by Consultantes Río Colorado 2001, 2002, 2003, 2004, 2005, 2006, 2007  and 2008 and may not be reproduced anywhere without permission. Abstracts and fair use are permitted.  Check HERE for details