Gov’t May Request Free-Zone Extension

June 9, 2006

Costa Rica is considering a request for an extension of its benefits for free zones, areas where local and foreign companies that export goods operate tax-free.

The regulations of the World Trade Organization (WTO) state that such benefits expire Jan. 1, 2010, after which date member countries cannot offer direct subsidies for the export of goods.

Foreign Trade Minister Marco Vinicio Ruíz told the daily La Nación Costa Rica has until the end of this year to ask for an extension, and that the government is considering making such a request.

However, he added that chances are slim the WTO will grant the extension; an extension was already granted at the end of 2002, when the benefits were originally set to expire. The organization granted the extension to countries with a gross domestic product not exceeding $20 billion or whose participation in world commerce made up less than 0.10% of the total.

A surer bet than requesting another extension is the bill under consideration to reform the Free-Zone Law to facilitate investment, Ruíz said.

 

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