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(506) 223-1327        Published Tuesday, Oct. 3, 2006, in Vol. 6, No. 196       E-mail us    
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Surprise approval targets money
Offshore gambling firms are jolted by U.S. Congress
By the A.M. Costa Rica staff

The unexpected passage of Internet gambling restrictions by the U.S. Congress has thrown sportsbooks into disarray.

Company stocks took a plunge Monday on the London exchange, as the gambling firms face the loss of about half their $12 billion annual income.

One company, Sportingbet PLC, said it would look into world trade rules to see if the U.S. law was in violation.

The measure, the Unlawful Internet Gambling Enforcement Act of 2006, passed in a parliamentary maneuver in the U.S. Congress early Saturday. The measure, which is almost certain to be signed into law by President George Bush, stops short of outlawing Internet gambling. But it does outlaw the use of financial instruments and credit cards by gamblers to pay for their bets. Since most bets are paid this way, the measure effectively shuts down gambling.

Legislation that was not passed would have prohibited Internet gambling outright by strengthening the 1961 U.S. wire law.

The Republican leadership of both houses attached the Internet bill,  H.R. 4411, to a bill requiring safe seaports during a meeting of a House-Senate conference committee. The combined bill quickly passed both chambers because the emphasis was on the port bill, a national security issue.

If Bush signs the measure, the U.S. Treasury Department and the Federal Reserve will have 270 days to come up with enabling rules.

New York Attorney General Eliot Spitzer tried the same approach in June 2002 when he arm-twisted a major credit card company based in his state and got an agreement from Citibank to block online gambling transactions. The New York Times said at the time that the attorney general threatened to prosecute the credit card company as a co-conspirator in violating the state’s gambling laws if it did not stop the use of credit cards for online gambling.

A number of payment systems have sprouted up to accommodate gamblers, Many of these are offshore, and U.S. and other companies like Western Union will be hard-pressed to identify each as a receiver for funds to be used in gambling.

Even now, gamblers who deal with some Costa Rican sportsbooks are told to make payments to individuals in a variety of countries.

In a statement, the board of directors of Sportingbet PLC noted that U.S. horse racing and U.S. fantasy sports, insofar as they are lawful today, together with U.S. intrastate and U.S. intratribal Internet gambling have been exempted from the legislation. The board said it will be seeking clarification as to whether the act is in violation of U.S. commitments under the General Agreement of Trade and Services and representations made by the US in recent World Trading Organization proceedings.

The country of Antigua and Barbuda filed a case before the World Trade Organization in 2003, contending that the U.S. restrictions on Internet gambling violated U.S. trade commitments. A 287-page report issued in November 2004 confirmed a preliminary ruling in the Caribbean nation's favor. The case still is involved in international litigation.

However, the free trade agreement between the

United States and Costa Rica specifically puts gambling outside the scope of the pact. Costa Rica has not approved the agreement.

Sportingbet PLC said that in the year ending July 31, some 62 percent of its bets came from the United States. Other companies may have a 
higher percentage of U.S. players. Sportingbet said that as a result of the passage of the legislation in the United States it has canceled negotiations to buy World Gaming PLC.

The U.S. bill would not be expensive for the U.S. federal government to enforce. The Congressional Budget office estimated that implementing this bill would cost about $2 million over the 2007-2011 period, a tiny amount in the U.S. budget.

The main impact on Costa Rica would be in the salaries paid to nationals who work in the sportsbook operations. BetOnSports already has closed operations here after its chief executive officer, David Carruthers, was detained while passing through the United States on a London-San José booking.

Peter Dicks, the former chairman of Sportingbet
PLC, also was arrested. He was detained at JFK Airport after he traveled from London. His former company said that following consideration of legal arguments presented by Dicks’ lawyer George Pataki, the governor of New York, was not prepared to sign the  extradition order requested by the Louisiana State Police. and that Dicks was free to return to the United Kingdom Friday.

Dicks' lawyer argued that his client had not been in Louisiana for at least 20 years and that a criminal allegation by that state involving Internet gambling overseas could not be successful.

Costa Rica has been shy about requiring much from the sports books companies and other gambling call centers. Although there is a type of license through the Ministerio de Economía, there are no background checks and hardly any rejections. Plus all the income goes to other countries. Under a tax bill that did not pass earlier this year, sportsbooks would be assessed a flat fee of $50,000 instead of paying a tax based on earnings like other businesses.

Calvin Ayre, the Canadian head of Bodog.com, claims to have become a billionaire as a result of his gambling activities, much of them here.

For more than two years the U.S. government made clear that it wanted to crackdown on overseas gambling operations. In part this was generated by the religious right of the Republican Party which saw gambling as something that destroyed families.

Focus on the Family praised the congressional action. "Internet gambling operations around the globe are stunned," said Chad Hills, gambling policy analyst for the Colorado religious organization.  "Shareholders are pulling their money and online gambling stocks are plummeting all the way from Antigua to Costa Rica to the United Kingdom. Two of the UK's largest online-gambling entities are canceling all U.S. operations. For the time being, Internet gambling in the U.S. is dead." He was quoted on the organization's Web site.

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San José, Costa Rica, Tuesday, Oct. 3, 2006, Vol. 6, No. 196

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Nicaraguan canal has
implications for Costa Rica

By the A.M. Costa Rica staff

Costa Rican officials, northern zone residents and tarpon fishermen everywhere are casting a concerned eye on Nicaragua.

That's because Nicaraguan President Enrique Bolaños formally presented his nation's plans for an inter ocean canal to visiting defense ministers in Managua Monday.

The presentation comes just a short time before residents of Panamá can vote on widening the canal in their country.

But for Costa Rica, the Río San Juan is the concern. The plan is to use the existing river, widen it and use it to connect the Caribbean with Lake Nicaragua.

The Rio San Juan is world class tarpon waters, and fishing is high on the tourism priorities list. Those involved in that activity are concerned that heavy dredging on the river channel that is in Nicaragua could hurt the flow in the river channels of the Río Colorado that enter the Caribbean from Costa Rica. The flow also feeds the Tortuguero area and Parque Nacional Barra del Colorado.

Tarpon notwithstanding, the Río San Juan has been a political flash point for Costa Rica, and both nations are now in the International Court in the Hague where Costa Rica is pressing for access and travel rights on the river. The river is not the border between the two countries but is entirely in Nicaragua.

Residents and workers in the underdeveloped northern zone use the river as a highway. Depending on the political wind, travel may be easy or made more difficult by Nicaraguan officialdom.

Costa Rican officials are unlikely to calmly accept a gigantic and possibly environmentally damaging public works project just feet from the border.

The Nicaraguan canal project is pegged at about $18 billion. And the idea has been considered for 150 years.

Modeling agency raided
after complaints pile up

By the A.M. Costa Rica staff

The old modeling scam is alive and well in the Central Valley, according to investigators.

The Judicial Investigating Organization said Monday that a 32-year-old man had been arrested as well as a 20-year-old women and that their Escazú modeling agency had been raided.

The man had been detained before on the same sort of allegations. But now there are 15 new ones and two complaints of sexual misconduct, the agency said.

Agents said the man would convince young people that they could compete in the modeling business and earn good salaries. He then sought a payment up to 1 million colons (some $1,925) for clothes, cosmetics and other accessories, they said.

In many cases the young people had to borrow the money, and they did not get the clothes or other promised items.

Young men and women worked as salespeople encountering likely candidates on the street and in public places.

Two cruise ships open
the 2006-2007 season

By the A.M. Costa Rica staff

Two cruise ships, the  Regal Princess and the Infinity, have docked at Puntarenas and opened the 2006-2007 cruise season that lasts until May.

When tourists arrive at the Pacific port this year they will have an additional attraction. Miguel Carabaguiaz, president of the Instituto Costarricense de Ferrocarriles inaugurated a train ride from near the docks to Orotina. Two remodeled rail cars can carry 100 tourists on each of three trips a day, he said.

Such rides have been offered in the Caribbean port of Limón but not on the Pacific, he said.

About 200 cruise ships — about 28 more than last year —  are expected at both the Pacific and Caribbean ports this year. Officials hope this will mean an increase in tourists spending the day spending money in Costa Rica.

New park for San Ramón
proposed by lawmaker

 By the A.M. Costa Rica staff

A proposal to create a new national park in Cerro de Azahar  in San Ramón is in the hopper at the Asamblea Legislativa.

Sadie Bravo de Maroto, the sponsor this term, said the purpose of the bill in part is to preserve the quality of the water consumed in Palmares and San Ramón, San Carlos, Puntarenas and Esparza.

Protecting the cloud forest there will protect the land and the water, she said,

Guanacaste area featured
for tourism professionals

By the A.M. Costa Rica staff

Tourism providers in the Guancaste region will be holding their own regional sales market Oct. 11, 12 and 13 at the Hotel Premier Fiesta in Papaguayo.

Representatives from an estimated 60 Costa Rican enterprises are expected to attend to make deals with visiting tourism wholesalers. This will be the second annual Guanacaste Marketplace, again presented by the Asociación Costarricense de Profesionales en Turismo.

As with similar events there are times for tours before and after the negotiations. Some pre-tours are scheduled Oct. 8 to Oct. 10. The event has established a Web site.

Immigration status sought

By the A.M. Costa Rica wire services

The city of Houston, Texas, has changed its policy of restricting police officers from questioning the immigration status of people who are detained for minor violations. This follows the murder of a veteran police officer in which the suspect is an illegal immigrant from Mexico.
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San José, Costa Rica, Tuesday, Oct. 3, 2006, Vol. 6, No. 196

Free trade critics verging on rebellion, Rodrigo Arias says
By the A.M. Costa Rica staff

Comments by opponents to the free trade treaty with the United States are tantamount to calls for rebellion, according to the Presidencia.

In a statement released Monday, the government pledged to respect democracy and the state of rights.

The statement blamed the Asociación Nacional de Empleados Públicos y Privados for intemperate remarks verging on calls for rebellion. The association is seeking a
Referéndum de la calle to block the free trade treaty, which is being considered in the Asamblea Legislative now.

Monday, Oct. 23, and Tuesday, Oct. 24, have been designated as days for a general strike. The association is calling for participation by rural organizations, students, other unions, ecologists, intellectuals, women, gays and lesbians, farmers and big and small businessmen. "All Costa Rica into the street in all points of the country from coast to coast from border to border united against the free trade treaty," says the slogan.

The association is trying to imitate a massive protest that faced the Miguel Ángel Rodríguez administration when officials tried to open up the communications market. The treaty has lost favor with the Costa Rican public, who think the pact favors the United States, said the association.

"This is a government of open doors and of dialog," said Rodrigo Arias, minister of the Presidencia. He rejected incendiary proclamations which do not help in the construction of a better country. He said that the government would firmly promise to respect the right of everyone to express themselves but never will tolerate the exercise of those rights when they trample the rights of other citizens.
The association and its member labor unions have the capacity to close down the country. The organization just released a statement that makes overtures to the dock workers in Limón who have been trying to get President Óscar Arias Sánchez to promise that he will not seek to put the docks in the hands of a private company via a concession. A slowdown there last week cost producers of  perishable agricultural products upwards of $1.5 million a day. The Caribbean docks are run by a public agency. A private firm just took over the Pacific docks in Caldera via a concession.

The administration said Monday that everything was normal on the Moín docks. Fernando Berrocal Soto, the minister of Gobernación, Policía y Seguridad Pública, said that since Fuerza Pública officers took over the port early Wednesday some 5,200 containers had been handled and 20 ships had arrived and 19 had left loaded. Berrocal was responding to some Spanish-language news stories that said workers were again engaging in slowdown tactics. The minister did admit to delays in one of the docks but said the situation did not affect exports.

Casa Presidencial, in a separate statement, dismissed the idea that President Arias was preparing the way for companies to come and make weapons in Costa Rica. Quoting the president, the statement said that Arias was prepared to support legislative efforts to make such factories here illegal.

Free trade opponents say that the treaty, if approved, will permit weapons factories. This is an inflammatory allegation in pacifist Costa Rica.

Arias also said he would try to find out what the plans are of the Raytheon Corp., which is believed to have purchased property on the Nicoya Peninsula. Among many other things, the company makes weapons in the United States.

Anti-prostitution program will be for two years and involve 100 persons
By the A.M. Costa Rica staff

The project that the Fundación Rahab will under take on the central Pacific coast will be for two years, During that time, the organization plans to help 100 persons, some  75 of them minors.

This is the anti-prostitution project that is being bankrolled through the U.S. Embassy and the International Organization for Migration. The project is based on the belief that prostitution in Costa Rica is linked with sometimes forcible trafficking in persons.

Meanwhile, the Rahab foundation says it will graduate a group of 25 women today in the San José area. The women have been victims of commercial sex exploitation and are being reinserted into society, the organization said.
The program has a Christian emphasis, and the women are trained in computing, quilt making and crafts so they can make a living after leaving the foundation shelter. Rahab has been doing this for nine years. The name is that of a female biblical figure who left prostitution and became the ancestor of King David of Israel and Jesus Christ.

The central Pacific effort will be in the cantons of  Puntarenas, Garabito, Aguirre, Parrita and Esparza, the organization said. The organization said this region had been picked because of the tourism business that exists there and because the area is a hot spot for internal human trafficking.

In addition to providing shelter to ex-prostitutes, the organization also will be trying to raise the awareness of the community to combat trafficking in persons, it said.

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San José, Costa Rica, Tuesday, Oct. 3, 2006, Vol. 6, No. 196

U.S. aid likely to be restored for Western Hemisphere
By the A.M. Costa Rica wire services

U.S. Defense Secretary Donald Rumsfeld said he is eager to promote better military relationships in the Western Hemisphere. Rumsfeld is in Nicaragua for two days of talks with his counterparts from more than 30 countries across the Americas.

Defense ministers from the Western Hemisphere gathered for a closed-door meeting in Nicaragua's capital, Managua, for talks on strengthening military cooperation. It is the first time the summit, which meets every two years, is being held in a Central American country.

Nicaraguan President Enrique Bolaños opened the meeting Monday asking the conference to create an international center for humanitarian minesweeping in his country, which is still suffering from years of civil war.

On the ministers' agenda for the day was the discussion of common threats their countries face, including terrorism, organized crime, drug-trafficking and gang violence.

As the summit got under way, Pentagon officials said that the United States is set to restore aid for military training programs for nine countries in the region, including Brazil and Uruguay, but not Venezuela.

Up until now, the Bush administration has linked aid for military training programs to agreements that would exempt U.S. service members from the jurisdiction of the
 International Criminal Court. An announcement is expected soon that President George Bush has signed a waiver to release military aid to those countries.

Professor Frank Mora, of the National War College, said restoring training programs will provide a tremendous boost to military relations. "This provides an opportunity for the U.S. military to work with Latin American militaries for future missions, such as peacekeeping missions around the world," said Mora. "You know Latin American militaries are perhaps the most engaged militaries in U.N. peacekeeping operations."

Guatemala has 218 soldiers in Congo, Haiti, Burundi and other countries on humanitarian missions. And El Salvador has troops participating in the U.S.-led forces in Iraq. Professor Mora said U.S. military training programs in Latin America also benefit political ties:

"This is an important program that has not just a security and defense dimension to it, but it has a diplomatic dimension to it, in which we establish relationships," he said. "They come over here and they visit and they go to school and they train. And they understand and they are exposed to civil-military relations in the US and so on and so forth."

Venezuela's defense minister, Gen. Rául Baduel, said Monday his country's recent military buildup is not a threat to the region, but neighboring countries and the Organization of American States have expressed concern.

EU's ban on biotech food reported to be ruled illegal
Special to A.M. Costa Rica

The World Trade Organization has ruled that a European Union moratorium on approvals of agricultural biotechnology products is illegal, the Office of the U.S. Trade Representative said.

The ruling in favor of "science-based policymaking over unjustified, anti-biotech policies" brings the United States "one step closer to clearing barriers . . . and expanding global use of promising advances in food production," according to U.S. Trade Representative Susan Schwab, the top U.S. trade negotiator.

"I urge the EU to fully comply with its WTO obligations and consider all outstanding biotech product applications and evaluate their scientific merits in accordance with the EU's own laws," Ms. Schwab said.

The decision upholds a challenge brought to the World Trade Organization in 2003 by the United States, Canada and Argentina. The three countries said the moratorium on biotech application approvals, adopted in 1998, did not comply with trade rules.

The World Trade Organization says its members' crop and food product safety regulations must be based on scientific evidence and not used to interfere with the trade.

Following the moratorium challenge, the European Union approved a handful of biotech product applications but the broad ban remained in effect.
A dispute-settlement panel formed after the challenge was submitted sought evidence and opinions from independent and World Trade Organization experts on the science-based merits of biotech products. Many scientists have determined that foods produced using biotechnology procedures pose no threat to people or the environment, according to a September 29 release from trade representative.

In addition, the release states that biotechnology has delivered on promises to increase agricultural yields and enhance food security for the world's growing population, reduce pesticide use, improve nutrition and disease prevention, and increase the incomes of farmers.

The dispute — the longest-lasting case in WTO history — also challenged product bans imposed by Austria, France, Germany, Greece, Italy and Luxembourg on products the European Union had approved before the moratorium.

In each instance, the panel determined that the bans were not supported by scientific evidence and were inconsistent with World Trade Organization rules, according to the release.

Leading producers of biotech crops include the United States, Argentina, Brazil, Canada and China. Biotech crops are grown also in Australia, Colombia, the Czech Republic, France, Germany, Honduras, India, Iran, Mexico, Paraguay, the Philippines, Portugal, Spain, South Africa and Uruguay.

Both sides in the dispute have 60 days to decide whether to appeal any part of the ruling.

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