Chapter

COSTA RICA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
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Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: February 1, 1965.
Exchange Arrangement
CurrencyThe currency of Costa Rica is the Costa Rican colon.
Exchange rate structureUnitary.
Classification
Crawling pegThe external value of the colon is determined in the interbank market. Foreign exchange trading occurs in the organized electronic foreign exchange market (MONED) among authorized traders, which is where the Central Bank (CB) carries out its intervention operations. Foreign exchange trading also takes place directly between authorized institutions outside the MONED. The government and public sector institutions conduct foreign exchange transactions with the state commercial banks and the CB at the official reference exchange rate, which is calculated at the close of each business day as the weighted average of the exchange rates used in the market during the day. The rate of the crawl is an average of 9 centavos a day (10.5% on an annual basis).
Exchange taxA tax of 15%, calculated on the average daily spread between buying and selling rates, applied to all foreign exchange transactions in the exchange market. This amount must be transferred to the CB within one day. Effective March 6, 2000, the tax was lowered to 10%.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNearly all payments for exchange transactions are made in dollars. Trade payments to Central America may be made in dollars or in local currencies.
Payment arrangementsNo.
Regional arrangementsCosta Rica is a member of the CACM.
Administration of controlRegulations are issued by the CB’s Superintendency of Banks and Financial Institutions.
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeNatural and juridical persons may buy or sell domestically produced gold (except national archaeological treasures).
Controls on external tradeLicenses from the CB are required for exports of gold.
Controls on exports and imports of banknotesImports and exports of foreign currency are free, but are usually carried out through the CB.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetn.a.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresImports made on a barter basis require a barter license issued by the Ministry of Economy and Commerce (MEC).
Import taxes and/or tariffsCustoms tariffs on most goods range from 5% to 20%. In addition, the following taxes are levied on imports: (1) a sales tax of 13%, from which certain essential items are exempt; and (2) selective consumption taxes at rates ranging from zero to 75%.
State import monopolyImports of fuel are made by Refineria Costa Ricense de Petroleo and imports of grain by the Consejo Nacional de Productión.
Exports and Export Proceeds
Repatriation requirementsProceeds must be repatriated within 90 days before the end of the fiscal year.
Financing requirementsn.a.
Documentation requirementsAn export form must be filed.
Export licenses
Without quotasLicenses are required for the following: armaments, munitions, scrap iron, and scrap of nonferrous base metals from the MEC; sugar from the Agricultural Industrial Board for Sugarcane; beans, rice, ipecacuanha root, onions, cotton, meat, and thoroughbred cattle from the National Council of Production; airplanes from the Civil Aviation Board and the MEC; Indian art objects made of gold, stone, or clay from the National Museum; tobacco from the Tobacco Defense Board; textiles, flowers, lumber, certain livestock, and wild animals and plants of the forest from the Ministry of Agriculture and Livestock; bananas from the National Banana Corporation; and coffee from the Coffee Institute. In addition, when there is a lien on coffee in favor of a bank, that bank’s approval is required before the CB will grant an export license.
Export taxesTaxes are levied on traditional exports and, in some cases, are graduated in line with international prices. There are no taxes on nontraditional exports to countries outside Central America, and exporters of these products are entitled to receive freely negotiable tax credit certificates at the following rates based on f.o.b. value: 15% for exports to the United States, Puerto Rico, and Europe; and 20% for exports to Canada. These certificates ceased to be issued to new exporters after 1992, but exporters existing at that time benefit from them, consistent with previous contractual arrangements.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Investment-related paymentsA 15% withholding tax is levied on all profits and dividends and remittances of interest abroad, except for remittances to foreign banks or their financial entities recognized by the CB as institutions normally engaged in international transactions, and for interest payments on government borrowing abroad.



Information is not available on the payment of amortization of loans or depreciation of direct investments.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsRepatriation must take place within 90 days of the end of the fiscal year.
Restrictions on use of fundsn.a.
Capital Transactions
Controls on capital and money market instrumentsEffective December 22, 1999, the MOF was authorized to issue government bonds denominated in foreign currency aimed at converting domestic debt into foreign currency. Such bonds are to be issued annually, beginning in 2000 and continuing for four years, in amounts equivalent to $250 million, except for the year 2003, when the amount will be increased to the equivalent of $450 million.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Commercial creditsThe National Budget Authority (composed of the Minister of Finance, the Minister of Planning, and the President of the CB) is in charge of authorizing the negotiation of new external credits contemplated by the central government, decentralized agencies, and state enterprises.
Financial credits
By residents to nonresidentsPrivate commercial banks, finance companies, and cooperatives must inform the CB when contracting credits abroad.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital movementsn.a.
Provisions specific to commercial banks and other credit institutionsn.a.
Provisions specific to institutional investorsn.a.
Other controls imposed by securities lawsn.a.
Changes During 1999
Capital transactionsDecember 22. The MOF was authorized to issue government bonds denominated in foreign currency.
Changes During 2000
Exchange arrangementMarch 6. The foreign exchange tax was reduced to 10% from 15%.

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