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(506) 2223-1327               Published Tuesday, Oct. 20, 2009,  in Vol. 9, No. 207         E-mail us
Jo Stuart
Real Estate
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Tico and expat confusion reigns on new luxury tax
By the A.M. Costa Rica staff

Expats can be forgiven if they are confused by the new luxury tax on homes. Even some Costa Ricans who participated in drawing up the law are confused, too.

The biggest issue appears to be if land should be included in the valuation to determine the amount on which tax is to be assessed. Some say yes and some say no.

Well, the law says yes, but that appears to be a late change by the legislative staff without the knowledge of some of the key legislative players. Some lawmakers were concerned that if the value of land were included in the tax base that poor people with a shack on a lot of land would be hit with a big tax.

That is what is going to happen.

Article 10 of the law explains what is to be taxed and adds "the value of the land where it is located." That's about the only mention on land in the law, but most of a decree implementing the law contains detailed regulations and formulas for determining land value. Only land that contains a dwelling is subject to the tax.

So, as one real estate broker pointed out, highly valuable vacant lots in some upscale subdivisions will not be subject to the tax until a dwelling is constructed.

Another question being asked is does everyone who owns a dwelling have to register it with Dirección General de Tributación. That question gets yes and no responses.  The final paragraph in Article 7 of the law says that only owners of property that will be taxed have the obligation to declare a value. It refers to the preceding article that has a number of exceptions, like public property and property used for religious purposes. The key element is homes worth more than 100 million colons. These are subject to tax. So based on this paragraph only persons with homes worth more than 100 million colons would have to file.

A paragraph tacked on to the end of the law as a
transitory adjustment contradicts this. This says everyone is obligated to present a declaration of value.

An addition problem for Costa Ricans and expats trying to comply with the law is that Tributación has not been helpful in explaining the measure. The law and the decrees implementing it are hidden on the Tributación Web site. There is no link or even mention on the law on the parent site of the Ministerio de Hacienda.

There has not even been a press release. The last press release posted on the Hacienda site is from Jan. 25, 2007.  No informational advertisements have been seen even in the Spanish publications.

And there certainly is no official explanation in English.

As a result even some competent Costa Rica real estate brokers have been putting out incorrect information on their Web pages and via e-mails. One sent out an update with corrections Monday.

Some accountants and legal advisers are telling clients to hold off on filing the required forms until at least the end of November. They expect constitutional court cases that would suspend the effective date of the tax payments, which now is Dec. 31 for the last quarter of 2009.

One lawyer said he was going to file a case because the law did not give Tributación the power to tax land. Then the lawyer noticed the tiny phrase in the law that did just that.

Throughout the entire time that the law was being discussed land value was not being considered for the tax base. Any legal action will have to delve down into the actions of the legislative clerks to see exactly when the phrase taxing land was added to the bill and if it was in the bill when lawmakers approved the tax last year.

The purpose of the law is to raise money to provide homes for those individuals in extreme poverty. Any constitutional court magistrate is sure to weigh the intentions of the law against possible technical irregularities.

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Nicaraguan court awards
Ortega right to run again

By the A.M. Costa Rica staff

To no one's surprise, the Nicaraguan supreme court said Monday that Daniel Ortega, the Sandinista leader, can run for another term as president of the country. The ruling also applies to the heavily Sandinista mayors and other local officials.

The Nicaraguan court threw out a section of the constitution that limited presidents to two non-consecutive terms.

The next presidential election is in 2011.

Ortega narrowly won election in 2007 because the opposition was split. But having had time to consolidate his base, he would likely win.

He is following on the heels of his leftist ally, Hugo Chávez of Venezuela, who engineered a constitutional change there that allows him multiple terms in office. Evo Morales of Bolivia and Rafael Correa of Ecuador also have gained the right to seek multiple terms. José Manuel Zelaya of Honduras was ejected from the country June 28 because opponents said he wanted to change the constitution so he could run again.

In Colombia, Álvaro Uribe also won a second term.

Being president may be good for Ortega, but developers and businessmen are suffering because international investors are reluctant to invest in the country where their property might not be secure. Developers along the country's Pacific coast also are having trouble attracting U.S. tourists and homebuyers.

No chestnuts are roasting,
but Christmas is here

By the A.M. Costa Rica staff

There's no snow on the ground, and the municipality has not put the lights up, but one sure sign that the Christmas season is here is the release of the tickets for the Gordo Navidaño, the big lottery.

The Junta de Protección Social de San Jose said the winners will be picked Dec. 13. This is a big event that circulates among the various major cities. Nearly the entire nation is watching television when a lottery worker picks a single ball from a roulette-type basket to represent the series. At the same time a second worker picks a ball representing the two-digit number. And a third worker picks a ball that represents the prize.

Top prize this year will go to three holders with the same numbered ticket. Prizes total $23.1 million with big winners getting more than $1 million each.

The remainder of the money goes to various social organizations. The Junta is a government agency.

This year the price of a ticket has gone up. A full sheet of 40 tickets with the same series and number will cost 40,000 colons or about $70. Frequently a ticket is split up into pieces, sometimes among communities. When one of those tickets gets the big prize, the community has an extended party.

Environmental judges reply
to legislative blockade

By the A.M. Costa Rica staff

The nation's environmental judges have counterattacked against lawmakers who fear increasing the agency's power.

Those who do not violate the environmental laws have nothing to fear," said José Lino Chaves in a release. He is president of the Tribunal Ambiental Administrativo. This is the agency that has been closing down developments and businesses for alleged environmental problems.

Lawmakers are considering a bill that would increase the power of the tribunal.

Carlos Federico Tinoco, a Liberación Nacional legislative deputy, has blocked adoption of the proposal for now, the Tribunal noted. The tribunal president said it appears that Tinoco was hearing the fears of people who might be affected by the Tribunal because they are violators.

The tribunal is an agency of the Ministerio de Ambiente, Energía y Telecomunicaciones. That relationship would remain but the tribunal would gain more independence of action under the proposed law. The tribunal also would have the power to make notations on the property records at the Registro National so that a potential buyer would know that a property was involved in some type of enviornmental dispute.

The proposal also would make files on environmental violators public. In addition those who violate the environmental laws would be prohibited from obtaining other permissions and permits for six months.

A big sticking point for lawmakers is that the proposal would open up the election of judges to the tribunal into a public process instead of being confined to the legislative halls.

Four held in eight robberies
of bar patrons at gunpoint

By the A.M. Costa Rica staff

Agents have detained four young men who are suspects in a string of robberies of bar patrons in the San Pedro, San Francisco de Dos Rios and Desamparados areas.

The men 18, 19, 19 and 20 were detained in raids at their homes Monday. The raids were in San Miguel and Los Guidos, both Desamparados.

The bandits, two each on a motorcycle, would confront patrons leaving bars and other nightspots, hold them at gunpoint, take their belongings and even sometimes take their clothes, said agents.

Agents recovered a number of cell telephones, clothes and car radios, said the Judicial Investigating Organization. Also found was a 9-mm pistol, agents said.

The judicial police said that at least eight cases have been reported but that they are expecting the arrests to generate more complaints. The 18 year old was a juvenile when the crimes took place, agents said. He will face a juvenile process.

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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.


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.


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.


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.

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San José, Costa Rica, Tuesday, Oct. 20, 2009, Vol. 9, No. 207

Internet use improves brain functions, UCLA study reports
By the A.M. Costa Rica staff
and the University of California
at Los Angeles news service

Editors always knew that A.M. Costa Rica readers were brainy, but now U.S. scientists can say why.

It turns out that middle-aged and older adults with little Internet experience were able to trigger key centers in the brain that control decision-making and complex reasoning after just one week of surfing the Web, according to a new study.

The findings, presented Monday at the 2009 meeting of the Society for Neuroscience, suggest that Internet training can stimulate neural activation patterns and could potentially enhance brain function and cognition in older adults, according to the University of California at Los Angeles.

As the brain ages, a number of structural and functional changes occur, including atrophy, reductions in cell activity and increases in deposits of amyloid plaques and tau tangles, which can impact cognitive function, said the study.
Research has shown that mental stimulation similar to that which occurs in individuals who frequently use the Internet may affect the efficiency of thinking and alter the way the brain encodes new information.
"We found that for older people with minimal experience, performing Internet searches for even a relatively short period of time can change brain activity patterns and enhance function," said study author Gary Small, a professor of psychiatry at the Semel Institute for Neuroscience and Human Behavior at the university and the author of "iBrain," a book that describes the impact of new technology on the brain and behavior.

The research team worked with 24 neurologically normal volunteers between the ages of 55 and 78. Prior to the study, half the participants used the Internet daily, while the other half had very little experience. Age, educational level and gender were similar between the two groups.
Study participants performed Web searches while undergoing functional magnetic resonance imaging scans, which recorded the subtle brain-circuitry changes  experienced during this activity. This type of scan tracks brain activity by measuring the level of cerebral blood flow during cognitive tasks.
After the initial brain scan, participants went home and conducted Internet searches for one hour a day for a total of seven days over a two-week period.

These practice searches involved using the Internet to answer questions about various topics by exploring
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different Web sites and reading information. Participants then received a second brain scan using the same Internet simulation task but with different topics.

The first scan of participants with little Internet experience demonstrated brain activity in regions controlling language, reading, memory and visual abilities, which are located in the frontal, temporal, parietal, visual and posterior cingulate regions, researchers said. The second brain scan of these participants, conducted after the practice Internet searches at home, demonstrated activation of these same regions, as well as triggering of the middle frontal gyrus and inferior frontal gyrus — areas of the brain known to be important in working memory and decision-making.
Thus, after Internet training at home, participants with minimal online experience displayed brain activation patterns very similar to those seen in the group of savvy Internet users — after just a brief period of time.
"The results suggest that searching online may be a simple form of brain exercise that might be employed to enhance cognition in older adults," said Teena D. Moody, the study's first author and a senior research associate at the Semel Institute at the university.
When performing an Internet search, the ability to hold important information in working memory and to extract the important points from competing graphics and words is essential, Ms. Moody noted.
Previous research by the same team found that searching online resulted in a more than twofold increase in brain activation in older adults with prior experience, compared with those with little Internet experience. According to Small, the new findings suggest that it may take only days for those with minimal experience to match the activity levels of those with years of experience.

Business chamber seeks answers on Chávez peace base here
By the A.M. Costa Rica staff

The business chamber has asked the Venezuelan ambassador to clarify the funding and intentions of the so-called peace base that the foreign government is setting up here.

In a letter to the ambassador, Nelson Pineda, the organization, the Unión Costarricense de Cámeras y Asociaciones del Sector Empresarial Privado said that the social peace and sovereignty and stability of Costa Rica are not in danger.

Hugo Chávez, the Venezuelan president, said when he announced the creation of these peace bases that the centers were designed to counter U.S. influence in Latin America.

Nicolás Maduro, the Venezuelan foreign minister, said the purpose of these centers was to be an adequate response for peoples in Latin America to seek an independent policy.

The central government also has expressed concern about
these Chávez creations here, but not much has been said in the last week. The business chamber noted that Costa Rica is not even a member of the Alianza Bolivariana para las Américas, the commercial and political union Chávez is promoting. The chamber said that setting up a peace base here could be defined as an act of interference in Costa Rica's internal affairs.

The chamber noted that the political campaign season has started and that the electoral process should not be stained by doubts over interference and aid from foreign governments.

Meanwhile, the U.S. Embassy said  EARTH University has officially signed a memorandum of understanding for the opening of a science corner at the educational facility in Liberia. The science corner’s main objective is to generate innovative ideas promoting development through enthusiasm, social justice, technological innovation and the creation of alternatives to protect the environment, the embassy said on its Web site. The $50,000 donation will include future programming, the embassy said.

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San José, Costa Rica, Tuesday, Oct. 20, 2009, Vol. 9, No. 207

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Telecom giant slapped with 1.5 billion-colon penalty

By the A.M. Costa Rica staff

The once-monopoly communications company has been slapped with a 1.5 billion colon fine for what regulators determined was the unjustified collection of fees.  The fine is about $870,000.

The company is Instituto Costarricense de Electricidad, and regulators determined that it held back some 28 percent of money due to another firm from October 2005 to this January. The other firm is Radio Mensajes S.A. The telecom company also has to pay Radio Mensajes 305 million colons, some $526,000.

The claim centers around the 900 service, which is a
value-added line for entertainment, information and a data base. The regulator, the Authoridad Reguladora de Servicios Públicos, set up a rate scheduled for the company known as ICE, which provided telephone connectivity.

The damages represent money collected by the telephone provider that was not authorized by the agency, it said Monday.

The fine is estimated to be five times the damages that was caused Radio Mensajes S.A., the agency said. That money will go to the country's general treasury.

Radio Mensajes, founded in 1972, says it has 35 percent of the pager market in Costa Rica and offers related services.

Employers offer a 3.99 percent minimum pay hike for Jan. 1

By the A.M. Costa Rica staff

Private sector employees are offering a 3.99 percent pay raise for minimum-wage employees as of Jan. 1

That proposal has been sent to the Consejo Nacional de Salarios, which will make the final decision.

Private unions and employees are seeking 7 percent.

Many Costa Ricans work at the minimum wage for their job category. The government adjusts the wages every six months to compensate for increases in the cost of living and inflation. Every six months the Consejo hears from employers, unions and employee groups.
Many employers were represented by the Unión Costarricense de Cámaras y Asociaciones del Sector Empresarial Privado, which made the proposal Monday.     
The employers said that inflation from July to September was just 1.69 percent and that projected inflation to the end of the year is just 3.01 percent.  They said that the inflation put into the last salary hike should be adjusted downward to the level of actual inflation.

The employers warned that any pay hikes over the actual rate of inflation would have a negative impact on the employment rate.  There are about 1.5 million workers in the private sector, but not all are at the minimum wage. Typically those working at a higher salary also get a raise.

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San José, Costa Rica, Tuesday, Oct. 20, 2009, Vol. 9, No. 207

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Major meat packer signs on
to pact preserving Amazon

By the A.M. Costa Rica wire services

In a move expected to slow the rate of deforestation in the Amazon rainforest, Brazil's three largest meat processors have signed on to a moratorium on purchasing cattle from recently logged land. Brazil is one of the world's leading greenhouse gas emitters.

Greenpeace report links consumer goods sold in U.S. to deforestation.

Deforestation accounts for about one-fifth of the world's greenhouse gas emissions, according to United Nations figures. In Brazil, most of that is land cleared to make way for cattle.

The Brazilian government and the nation's three largest meat processors have announced an agreement intended to slow that trend. JBS, Bertin and Marfrig say that from now on they will not buy cattle raised in areas that are currently covered by rainforest.
The move follows a report by the environmental group Greenpeace that linked products sold by Nike, Timberland and other major brands in the U.S. and Europe to Amazon deforestation through the Brazilian meat processors. The companies buying meat and leather put pressure on the meat processors to agree to the moratorium, says Lindsey Allen of Greenpeace.

"They essentially told them, 'We're not willing to buy products from you if it means we're destroying the Amazon rainforest and contributing to climate change because of those forest-related emissions,'" she says.

Next steps are enforcing the agreement, and signing up more meat producers

The government and an independent observer will enforce the moratorium using satellite photography, aerial observation, and site visits.

JBS is the latest, and the largest, of the three major meatpackers to sign on. Allen says that means more than half of the Brazilian meat industry is now participating in the moratorium. But there are a lot of small companies that have not signed on, which collectively have a big impact. She says efforts to get them on board are continuing.

"We haven't saved the Amazon," she says. "But we've taken on a really significant driver that was continuing to expand into the Amazon," Allen says.

Press bills in Ecuador draw
concern from media visitors

Special to A.M. Costa Rica

The Inter American Press Association has informed government officials in Ecuador of its concern with press bills sent to Congress that would permit control of information and news media content. The organization made its views known during a mission to the country that ended Friday.

The delegation that spent last Thursday and Friday in Ecuador held a meeting at Carondelet Palace in the capital, Quito, with Fernando Alvarado, communication secretary general, and members of the president’s political communications council.

In earlier talks with the delegation, government representatives gave an audiovisual presentation listing alleged ethical errors by media and individual journalists.

The communications law captured the attention of the delegation, despite the fact it had gone to Quito over the tense relations that have existed between the current administration and the press over complaints of judicial harassment by media and journalists, public dishonoring of media outlets during presidential broadcasts, the placement of official advertising in a discriminatory manner, and, among other issues, the appropriation of privately-owned media for public use.

With slight variances, the three legislative bills deal with all media outlets, not just broadcast, and create government agencies to oversee and penalize media. In addition, in order to be registered media will be required to have a code of ethics.
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San José, Costa Rica, Tuesday, Oct. 20, 2009, Vol. 9, No. 207

Latin American news
Campaign sees consumerism
as remedy for trafficking

By the A.M. Costa Rica wire services

The International Organization for Migration is urging consumers not to buy products made by migrants exploited for their cheap labor. The organization is launching a global campaign to end human trafficking. It begins in Europe where large numbers of people are trafficked, but eventually will expand to other regions of the world. 

This video challenges consumers to think about their purchasing habits and how they might be encouraging the exploitation of migrants.

Richard Danziger is head of the Global Counter Trafficking Program at the International Organization for Migration. He says poverty, gender inequality, and conflict contribute to human trafficking, but it is the demand for unreasonably cheap labor and cheap goods that drive this unscrupulous trade. 

He says the campaign aims to change consumer behavior through the use of soft power, not hard power.

"We are not asking people to boycott a particular brand or boycott a particular super market or chain store," Danziger said. "We are simply asking people to find out what lies behind the products they buy. We are asking people to buy responsibly." 

The International Labor Organization estimates 12.3 million people are in forced or bonded labor and sexual servitude around the world. 

Danziger says stories about human trafficking usually focus on women and girls used for sexual exploitation. But he says both men and women are trafficked for labor exploitation. 

He says there have been large increases in the last five years in the trafficking of men and boys to work in the agricultural, construction, fishing and domestic service sector. 

Danziger says consumers are increasingly demanding fair trade. They are asking that the products they buy are produced according to ethical standards. 

He says the campaign hopes to tap into these sentiments by raising awareness of the many products and services that result from trafficked and exploited labor. 

He says consumers have the power to end labor exploitation by buying responsibly and by pressuring businesses and retailers to operate in an ethical manner. 

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