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(506) 2223-1327           Published Thursday, Sept. 22, 2011, in Vol. 11, No. 188          Email us
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High court gives its OK to corporate tax proposal
By the A.M. Costa Rica staff

The Sala IV constitutional court ruled Wednesday that a legislative proposal to tax corporations does not violate the country's charter.

The action, announced late Wednesday afternoon, opens the door to final passage of the measure in the Asamblea Legislativa. However, lawmakers, who already approved the plan once, sent the measure back to committee for possible changes.

The measure imposes an estimated $316 tax on every active corporate entity in the country. Inactive corporations would pay half that.

If the legislative committee makes substantial changes, there is a possibility that the measure will once again go to the Sala IV. In Costa Rica, magistrates can get an advance look at proposed legislation and give an opinion.

Three magistrates said that the measure was unconstitutional, said the Poder Judicial in a
 summary. The exact reasons were not given. However, the majority thought the tax passed constitutional muster.

The magistrates also said that the measure was not unreasonable or disproportionate, arguments that opponents had advanced.

This is the tax that President Laura Chinchilla and her administration is trying desperately to have passed. The measure would generate about a $700 million windfall in the first week of the new year.

About half of the money would go toward supporting a new police school, she has said.

Some lawmakers objected to the time lapse when owners of corporations can dissolve them to avoid paying the tax. Others thought that there should be a heavier tax on corporations that are making money.

The measure, No. 16306, is relevant for expats because many have homes and vehicles in corporations at the advice of their lawyers.

Career criminal dies in shootout with police officers
By the A.M. Costa Rica staff

Two men stuck up a Guadalupe bar early Wednesday, pistol-whipped the patrons and fled into a shootout with police. One of the robbery suspects died, and the second was hospitalized.

Also in the hospital was one of the policemen involved, identified as José Oviedo Ávila, who is being praised as a hero.

In an unrelated incident, judicial agents shot it out with a group of men in Hatillo, and one of the suspects suffered a fatal wound.

The shootout in El Alto de Guadalupe north of San José ended the criminal career of a man identified by the last names of Díaz Vargas who has been in trouble with the law since he was a juvenile offender in 1992, said the Fuerza Pública. The two men had been arrested a total of 40 times, said the police agency. Díaz, 23, did time for robbery and murder, the agency added.

Police said the shootout ended a crime wave in  Coronado, Moravia and Guadalupe.

The shooting happened about 1 a.m. The second suspect, identified by the last names of Cruz López, suffered a wound to the back, police said.

Both men were on a motorcycle when police ordered them to halt not far from the bar. Instead, one of the men, believed to be Díaz, began shooting, police said.

Oviedo, the police officer, took one bullet in the chest but was spared injury by a protective vest. The most serious wound was to the neck for which he was undergoing an operation Wednesday. He was reported later to be in stable condition. Another unidentified police officer also was involved.

Juan Carlos Arias, deputy director of the Fuerza
Pública, said that officers recovered a .38-caliber firearm believed used in the robbery. Police also have a bulletin on the motorcycle the men were using as the result of information from witnesses at other robberies. They also found items taken from the bar patrons, they said.

Some of the bar patrons were treated because they had been hit in the head with the gun butt, police said.

Judicial agents are investigating the case.

The Fuerza Pública said that Díaz had been in trouble since 1992 when he faced an armed aggression charge. He still was a minor in 1995 when he was investigated for theft and aggravated robbery. His record shows that he was detained 30 times, said the Fuerza Pública, and that in 1997 he was sentenced to four years for aggravated robbery.

He served a lesser term because he was again held for aggravated robbery in 2000 and confined  Jan. 18, 2001, on a murder charge, the agency said.

The second suspect, Cruz, has arrests for aggravated robbery and had been detained in Nicoya and Quepos on drug charges in 2008 and 2010, said the Fuerza Pública. This year he was detained for investigation of carrying an illegal knife.

The Judicial Investigating Organization said the shootout in Hatillo resulted in the death of a 22-year-old man with the last name of Vega. He suffered a bullet wound in the chest during the confrontation with judicial agents. He died a short time later at Hospital San Juan de Dios.

The agents involved were robbery investigators, judicial police said..

The shooting happened in the Ciudadela 15 de Setiembre section of Hatillo on the south side of San José. That case also is under investigation.

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Rafting championship set
for October near Turrialba

By the A.M. Costa Rica staff

The world rafting championship will be held on the Río Pacuare near Turrialba from Oct. 4 to Oct. 11.

Some 32 countries will be represented, said the World Rafting Federation. The Instituto Costarricense de Turismo is cosponsoring the event.

The top men’s and top women’s teams from each member federation, basically each country, are invited to this event, said the rafting federation.

The tourism institute said that six of every 10 tourists come to Costa Rica for some kind of adventure sport, be it rafting, canopy tours or bungee jumping.

Rafael Gallo, president of the international federation is cofounder of Ríos Tropicales in Costa Rica.

The Cámara de Turismo de Turrialba also is sponsoring the event.

Rafters compete in time trials, slalom on an obstacle course, and are evaluated by an international staff of judges.

Our reader's opinion
Prices in Panamá seem
a lot lower than here

Dear A.M. Costa Rica:

My wife and I went to Panamá for four days to meet friends from the U.S. who retired and were thinking of moving.  After crossing the border, we found them in David.  That night we had three 12- inch pizzas, a few beers, and the women had Coca Cola (We took one pizza back to the hotel to share with the manager).  Our bill including tip was $32. 

The next day we set out for Boquete.  Breakfast including coffee for four was $12, a delicious lunch that was almost too much to eat averaged $4.25 each, and an early dinner including drinks was $22.  I failed to mention that I purchased running shoes for $89 that cost $122 two years ago in Costa Rica. 

Saturday we stopped for drinks, snacks and beer to take to the beach.  Panama beer was .50 cents, Coca Cola was 75 cents and snacks varied but they were all MUCH cheaper than Costa Rica.  We had dinner at the beach.  A dish of HUGE shrimp and two beers were $14.50.  Gasoline was $3.79 while in Costa Rica it was the equivalent of $4.75, and the roads were without potholes.
I have hesitated to write this simply because I love Costa Rica so don't tell me to love it or leave it.  This is mi casa.  But I am asking why 360 kilometers to the south the Panamanians can do it and we can't.  For us, our Tico family is here but if it weren't for them, my Tica wife and I would move in a heartbeat. We felt safe and could probably save 20 to 40 percent in the cost of living.
Ken Beedle

Find out what the papers
said today in Spanish

By the A.M. Costa Rica staff

Here is the section where you can scan short summaries from the Spanish-language press. If you want to know more, just click on a link and you will see and longer summary and have the opportunity to read the entire news story on the page of the Spanish-language newspaper but translated into English.

Translations may be a bit rough, but software is improving every day.

When you see the Summary in English of news stories not covered today by A.M. Costa Rica, you will have a chance to comment.

This is a new service of A.M. Costa Rica called Costa Rica Report. Editor is Daniel Woodall, and you can contact him HERE!
From the Costa Rican press
News items posted Monday through Friday by 8 a.m.
Click a story for the summary

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San José, Costa Rica, Thursday, Sept. 22, 2011, Vol. 11, No. 188

Prisma dental

Forming a non-profit corporation requires lots of patience
By Bob Normand*
Special to A.M. Costa Rica

I read with interest and amusement your editorial article on obtaining a personaría juridica. Coincidentally I am in the process of obtaining the same for a small, non-profit organization that exists on modest donations, so we can open up a checking account in the organization’s name and store our treasury (less than $3,000) in a secure location. Banco de Costa Rica told us in March of 2010 that we would need a non-profit corporation and a personaría juridica, so we asked an attorney to help us.

We have been en trámite for a year and a half and just received our “books” yesterday, and we are expecting our personaría juridica shortly. The term en trámite would better be translated as “in trauma” rather than “in process”. The Tico term calvario or trudging the road to calvary, with all its implied pain and suffering, is a perfect description.

We first submitted an application listing our major officers only to be told we needed eight persons to sign including several fiscales. We added those and resubmitted the application. Three months later we were told we would need a total of 10 signatories. We submitted two more. Then we were told the “book” we had to submit, which looks like one of those grammar school notebooks with a mottled black and white cover, was too small and we needed to submit a bigger one. Also, our attorney had to have a law student hand write about 20 pages of what appeared to be standard corporate boilerplate into the book. (One of our original signers has since died but I ain’t telling the powers to be in San José.)

Yesterday we received back five mottled books that are supposed to house various actas to be recorded by the directors, for the employees etc. plus a document of about 20 pages with several official looking stamps and flowery signatures on it. I was told that’s the dude the bank will need a copy of to open a checking account.

I’ve started several corporations in the United States in three different states. In Florida this process can be done online in less than an hour. Get a federal tax ID number (another less than an hour process on line), check that your proposed corporate name is available from the state records, pay approximately 50 bucks by credit card online 
and, le voila, you have a corporation. In 7-10 days you get the official document (note singular form used) in the mail.

Now I see why the World Bank’s Ease-of-Doing-Business Ranking this year placed Costa Rica 125th out of 183.
Gringos should not get too comfortable though as the U.S. ranking slipped to No. 5, down from No. 3 two years ago. The reason cited? Increasing business taxes and regulations.

I love Costa Rica and I love the people here, but can’t we get just a little more efficient, amigos?

I’d like to think the story ends here but I expect there will be more hurdles to overcome at the bank.

*Mr. Normand lives in Quepos

An alternate view

Dear A.M. Costa Rica:

As a business owner involved with tourism, I am tired of the increasing anti-Tico tirades of an overweight, expat English language on-line rag, editor.

Who cares about your beaurocratic imbroglios regarding cell phone activation?

I came to Costa Rica to escape the all the "Gringo" driven addictions of which cell phones are one.

I also avoid the San José/Escazú area as much as possible, as the real Costa Rica with its abundance of wild growing, health giving fruits awaits just outside its environs.

Where we are, it's still possible to live a simple, relatively care-free life, off of the land, but, alas, my last remaining addiction-necessary to carry on my work, the internet, exposes me to the whimsical rantings of a jaded expat, who apparently has yet to assimilate to this fine country, for he still seems to have the need to hold on to his "Gringo" addictions, which leads him to trash this fine country on a regular basis.
Hari Singh Khalsa

Surprise, the personaría also has a expiration date
Dear A.M. Costa Rica:

I, too, got caught in the spiral of the disappearing personaría juridica.  I was excited that I was actually able to register and order the document online on a holiday weekend.  This would give me the needed document to go to the Instituto Costarricense de Electricidad early in the morning to cancel an extra cell phone line.  I couldn't get the document to print properly so, with a bit of embarrassment,  I actually ended up going to the attorney's office to print it out.

So with document and passport in hand, proving that I am, in fact, me, with authority to act on my company's. meaning my house's, behalf, I successfully terminated the line. I only needed to wait 30 days for the account to clear and then collect the deposit of 12,500 colons, around $25.  This is where the story turns.

I pointed out that my document will have expired on the 30th day which was a Saturday.  No allowances for the weekend, so the Monday would have required another document.  After objecting that it didn't make sense, the clerk quietly suggested that I come back on Friday. It would be okay.  I waited my time and remembered Thursday night to check to make sure the friend who had been using the line paid the last month's bill.  Naturally he hadn't.  So I had to wait for him to pay it, requiring me to go in at 11 a.m. rather than my planned 7:30 a.m.  After making the line and finally getting to the receptionist, I was told I had to come back on Monday. 

"Why," you may ask? They ran out of money and didn't have the c12,500!  "Its ICE!", I thought.  They must have that tucked in a petty cash drawer somewhere!  Nope, come back Monday. "Okay, let me talk to the supervisor," I asked, to make sure someone understood the dilemma. She politely goes into the supervisor's office. "She can leave her number and a copy of her documents and I'll check into 
it," I watched him say as he pointed at me from his desk.  Urrrgh.  Okay. I conformed.

Well, he called me later that afternoon and informed me that someone had come in and left the exact amount so I can go online and get a new personaría juridica, the digital expired for online verification after 15 days not the normal 30.  I informed him that was no longer possible because of the Sala IV issue.  He had no idea what I was talking about.

He checked it and, yep, "Tiene razón." Okay, you're right, he admits. "So, just go to a lawyer and get one." So then I reasoned with him, "Why would I pay $20 to collect a deposit of $25?  Look, you have all my documents, they were good when I applied for the deposit, I waited the 30 days, I'm the same person I was 30 days ago.  Can you just give me my deposit back since you have the money in the office?" After a long pause and a flustered hesitation he blurted out, "Venga."

Not having to be called twice, I jumped in my car, driving down the mountain in spite of the pouring rain, calculating how much gas the trip was costing me.  In spite of it all, I patted myself on the head for making the effort to learn Spanish and successfully being able to make my case over the telephone.  A real accomplishment.  I politely endured the careful scrutiny of my passport once again, wondering if life will be different after I have my residency cédula in a few days.  Finally the gentleman handed me the little envelope containing my deposit.  I politely thanked him, then not wanting to waste a trip, promptly drove to the feria.  I loaded up on my weekly produce, spending every last colon of that hard earned deposit.

That my friends, is the real meaning of  "enjoying the fruits of your labor!"
Sandra M. Brooks
San Luis de Grecia

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San José, Costa Rica, Thursday, Sept. 22, 2011, Vol. 11, No. 188

Eight persons nabbed as suspects in a Caja disability scam
By the A.M. Costa Rica staff

Judicial police detained eight persons, three women and five men, Wednesday in an investigation of false disability claims.
Investigators conducted five raids to make the arrests and gain evidence.

The individuals are charged with faking disability so they would get a 60 percent salary payment from the Caja Costarricense de Seguro Social. At the same time they continued to work at their regular jobs, said the Poder Judicial.

The amount of money involved is 200 million colons or about $400,000, said the Poder Judicial.

Arrests were made in Barva de Heredia and in San Rafael de Alajuela.

The Judicial Investigating Organization said that two
 individuals in Heredia recruited persons in an industrial zone in Alajuela and inserted their name in a computerized system that listed them as disabled.

The Caja routinely makes disability pay to workers after they have been off the job for three days. The usual amount is 60 percent of the reported salary.

The Judicial police said that the group was well organized with division of labor. Some of those arrested Wednesday created documents that falsely verified the illness or disability. Others just loaned the enterprise their bank account. Those who did so received some money and kicked back some to the originators of the scheme, said the Judicial police.

The Poder Judicial identified the men arrested by the last names of Benavides, Alvarado, Altamirano, Azofeifa and Zúñiga. The women were identified by the last names of Madrigal, Solís and Montero.

President seeks foreign investment in a visit to the Big Apple
By the A.M. Costa Rica staff

President Laura Chinchilla and a commercial delegation were in New York Wednesday promoting the country and seeking foreign investment.

The highlight was the president delivering a speech at the celebration of the 100th anniversary of the founding of IBM.

“I want Costa Rica to embody the very spirit that we are celebrating today: that of embracing change in order to preserve that which is best about ourselves,” the president said. She also said that the country would continue on the path to development without extractive industries.

IBM has facilities in Costa Rica.

Casa Presidencial said that Ms. Chinchilla had meetings in the afternoon with executives of two companies that are considering locating facilities here.

This is the third sales trip that the president has made to the north.

“I am convinced of the importance of taking advantage of the good perception that the country has in diverse business circles of the capability of our people and or good business climate,” said the president.

She also said that foreign investment is an important motor of development. The president attended a breakfast arranged by the Coalición Costarricense de Iniciativas de Desarrollo with 105 business leaders.

She also was to have an interview with Forbes magazine and appear in a movie being produced by IBM.

Ms. Chinchilla delivered her IBM speech in English.

“. . . we have come to celebrate several key lessons for any person, company or nation seeking successfully to navigate the wild and unruly waters of the modern world,” she said. “Chief among these lessons is the understanding that, whatever our overall talents, prior achievements or initial conditions may be, enduring success is untenable if one refuses to accept the world’s changes and instead turns their back on them. Only those willing enough to embrace change fearlessly are able to make their mark on it.” She noted that some Costa Ricans are apprehensive over change.

Ms. Chinchilla in New York
Casa Presidencial photo
President Chinchilla is received in New York by  Christopher Padilla, an IBM vice president. With the president is Muni Figueres, Costa Rica's ambassador to the United States.

She said that IBM is a success because it is able “at once to stay true to the values that define the best in us and tailor our actions to the challenges of the times. That is what IBM has done and it is what Costa Rica must do today.”

She said that Costa Rica must accept globalization without reservation. The country must expand education, as a first priority, she said, adding that other priorities are better infrastructure and “accelerate the formation of a professional class of individuals capable of performing and excelling in the most advanced technological fields.”

The president also said that the country needs to strengthen its law enforcement, although she noted Costa Rica still is one of the safest countries in Latin America.

Of extractive industries, she said: “Other countries dig the ground to build a future. For all sorts of reasons, that’s not an option open to us. We are forced to travel down a more difficult, but ultimately more sustainable way: we have to mine the talent of our people.”

The central government opposes open pit gold mining and exploration for petroleum in the northern zone.

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San José, Costa Rica, Thursday, Sept. 22, 2011, Vol. 11, No. 188

Medical vacations in Costa Rica

U.N. health agency seeks
higher tobacco, alcohol taxes

By the A.M. Costa Rica wire services

In a new report released on the sidelines of a high-level U.N. meeting on noncommunicable diseases in New York, the World Health Organization outlines low-cost strategies to combat chronic diseases that are expensive to treat and bring severe economic consequences.

The World Health Organization says it does not need to cost a lot of money to save millions of people from a wide range of noncommunicable ailments, cancer, diabetes and heart and respiratory disease. As little as a dollar a year per person in low income countries, and a $1.50 in middle income countries.

Current treatments of chronic diseases are expensive and push millions of people into poverty each year.

“We have cost effective interventions that can make a huge difference in reducing the burden if they are implemented by the member states and most of these are actually low cost interventions. They are affordable by all countries irrespective of income and economic status,” said Ala Alwan, an assistant director general with the World Health Organization.

The World Economic Forum estimates that over the next 15 years, noncommunicable diseases will cost low and middle income countries more than $7 trillion.

Margaret Chan, World Health director general, urged leaders gathered at the United Nations to act quickly and decisively. “Rising financial and economic cost of these diseases will reach levels that are beyond the coping capacity of wealthiest nations of the world. Excellencies, you have the power to stop or reverse the . . . disaster,” she said.

Several types of common behavior are well known to increase the risk of chronic diseases, tobacco use, unhealthy diet, physical inactivity and excessive alcohol use.

The health organization simply recommends changing such habits with what it calls population-based and individual-based best buy interventions.

“If you increase taxation on tobacco and alcohol you will generate funds. You will not only reduce consumption and prevent noncommunicable diseases but you will be able to generate additional funds even in low income countries. And that you can use to expand coverage at primary health care level to provide better health care or to strengthen your health promotion programs,” Alwan said.

Mexico's Calderón urges
OK of U.N. arms treaty

Special to A.M. Costa Rica

Mexico, where tens of thousands of people have been murdered and mutilated in drug wars over the past five years, Wednesday called on the United Nations to help establish strict controls in producer and supplier countries on the high-powered weapons that feed the arsenals of traffickers.

“It is unjust and inhuman that the profits of the arms industry should decide the deaths of thousands of people,” Mexican President Felipe Calderón told the U.N. General Assembly on the opening day of its annual general debate, calling the huge profits of drug trafficking and easy access to high-powered weapons two sides of the same coin against which the world must forge a common front.

“At the United Nations we must continue to drive forward negotiations for the International Convention on Trade in Arms so as to avoid their diversion to activities that are forbidden under international rules,” he said, citing a proposed treaty that has been under discussion in various UN forums for several years.

Listing drug trafficking and transnational organized crime among three major challenges facing the U.N. Calderón called for action by consumer countries to curb the stratospheric profits of drug trafficking, which are fueled by an ever-growing demand. The other two challenges were climate change and health.

“Now, more than ever, countries with the highest levels of drug consumption must take effective action to reduce demand,” he said. “And if that is not possible, or they are disposed or resigned to seeing consumption continue to grow, these consumer countries must in any case find ways of reducing the enormous profits which criminals make on their black market.

“They are morally obliged to find solutions that cut off this source of financing and explore other options and alternatives that stop drug trafficking money from being the source of violence and death, particularly in Latin America, the Caribbean and parts of Africa.”

35 Mexicans murdered
in Veracruz drug violence

By the A.M. Costa Rica wire services

Mexican authorities have found the bodies of 35 people suspected of having ties to organized crime in the eastern port city of Veracruz.

State prosecutor Reynaldo Escobar said some of the bodies were left in trucks while others were dumped on a busy roadway, near a shopping center. 

Escobar said the victims, both men and women, had connections to organized crime.  He did not provide further explanation, but many believe the deaths were drug cartel related. 

Attacks between rival drug cartels have been escalating in the Veracruz area. 

More than 30 prisoners escaped from three Veracruz area prisons Monday, but Escobar said the two cases are not related.

Argentina's president seeks
end to runaway speculations

Special to A.M. Costa Rica

In the face of the world financial crisis, Argentina called from the podium of the United Nations Wednesday for true economic reform to regulate run-away speculation and other factors undermining market stability, global development and well-being.

“Speculation apparently has no brakes and can move from one place to another and from one country or region to another, affecting currencies, economies and also the daily life of citizens, destroying jobs, depriving them of a worthy education and of health care,” said Argentine President Cristina Fernández de Kirchner at the General Assembly on the opening day of its annual general debate.

“It is crucial that this be understood, because today it might be speculation on food, yesterday it was on oil, and tomorrow it could be on mints if that proves profitable and provides a better market position to those capital flows that are transferred from one end of the world to the other without any type of control or regulation,” she said.

“Regrettably we continue in the same position because beyond what I would call totally cosmetic changes no serious steps have been taken towards the regulation that is required.”

At the same time Ms. Kirchner called for fundamental Security Council reform, expanding its current 15-state membership, but not by increasing the number of permanent members. That category should be eliminated, she said, along with the right to veto now held by the five permanent members, the United Kingdom, China, France, Russia and the United States.

The veto was necessary at the UN’s foundation during the Cold War when there was a bipolar world aligned either with the U.S. or the former Soviet Union, but now it no longer defends security and stability and is used for those members’ national interests, she said.

Paraguayan President Fernando Lugo Mendez echoed Ms. Kirchner’s calls for financial reforms and urged the U.N. to establish measures that allow states to implement policies enabling them to reduce inequalities in their own countries, as well between rich and poor countries.

He stressed that inequality is growth-stifling and called on the assembly to design and construct a new financial model that can adequately respond to cyclical economic crises.
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San José, Costa Rica, Thursday, Sept. 22, 2011, Vol. 11, No. 188

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Trio held in robberies
that plagued San Ramón

By the A.M. Costa Rica staff

Investigators think they have rounded up a gang that has been committing robberies in the center of San Ramón.

Three arrests were made Wednesday in a location called  Ciudadela Copan. The suspects were living there temporarily although they are residents of San José.

The suspects are credited with sticking up a pinball parlor and various pedestrians. Agents said they confiscated a BB gun that was used to intimidate pedestrians.

The arrests validate the theory that a lot of the area crime is a result of gangs moving from San José to the more distant locations as police build up a presence in the capital.

Two men were detained Tuesday in Sarchí where they were said to be fleeing a stickup in San Ramón.

Peru's law wins praise
from U.N. secretary general

Special to A.M. Costa Rica
with staff additions

Perú has adopted a law similar to that of Costa Rica in which governments and private companies are obligated to consult native communities before going ahead with major projects such as mines that affect them.

U.S. Secretary General Ban Ki-moon Wednesday commended Peru’s recent adoption of the laws.

The law was adopted unanimously last month by the Andean country’s congress and subsequently promulgated by President Ollanta Humala.

The new law has already been welcomed by James Anaya, the U.N. special rapporteur on the rights of indigenous peoples. He has visited Costa Rica most recently to study the relationship of the Instituto Costarricense de Electricidad with the native Costa Ricans who would be affected by a major hydro project in the southern part of the country.

Three children poisoned
by pesticide in food pot

By the A.M. Costa Rica wire services

Peruvian health officials say three school children have died and dozens were treated at a hospital after eating food contaminated with pesticide.

Offcials say 88 children and at least three adults became ill after consuming food prepared in a pot containing pesticide residue in Cajamarca north of Lima, the capital.

Health officials say the food provided by the government was of good quality, but the pot used for cooking on Tuesday was not properly cleaned.

Prosecutors are now investigating how the pesticide got into the container.

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