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These stories were published Monday, Aug. 1, 2005, in Vol. 5, No. 150
Jo Stuart
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Accounts are open book to investigators
Transparency phantom stalking bank info

By Garland M. Baker
Special to A.M. Costa Rica

This is a scary story about a phantom called Transparency that is creeping secretly into everyone’s life. Thanks to Transparency, individual and corporate bank accounts are becoming open books for tax investigators from all over the world.

Everybody has noticed all the great new services available for those who use online banking in Costa Rica. One can pay telephone, water, light and other bills via a computer.  There is no reason to wait in long lines at the bank or local grocery to pay most monthly bills.

Along with all these great new services, something else is happening, something frightening for those concerned about personal and business privacy. 

The computers are getting better and incredibly more efficient.  They are tabulating, recording, and archiving everyone’s transactions.

Those who do not use computers to do their banking probably have noticed a different treatment at their bank of choice.  This, too, is because of Transparency.  It is called “know your customer.”

Transparency was born out of international banking agreements, primarily by accords made by the Basel Committee, established at the end of 1974 by the Group of Ten, the major First World nations. The group's function is to consult and cooperate on economic, monetary and taxation matters.

The term "transparency" is often used to mean openness in the way institutions work together.  It is considered good for government. Originally it referred to institutions in the European Union.  

Transparency now means stripping every human being of privacy, in particular financial privacy. 

Basel II, the agreement that sustains Transparency, is now in full force, and most banks in the world are having to succumb to its powers or perish.  Events of Sept. 11, 2001, provided an anti-terrorism veneer to the agreements.

Greater openness means any regulatory agency anywhere in the world can get information it wants through “transparency” cooperation. And the U.S. Internal Revenue Service is promoting training on this around the world, including in Costa Rica.

El Salvador Nov. 22 passed tax legislation with Legislative Decree number 492. The legislation includes the elimination of access restrictions to information regarding tax matters to guarantee transparency by enabling access to taxpayers’ banking and financial information.  The law also includes newfound easy ways with which judicial courts, the Attorney General's Office, and the U.S. Internal Revenue Service may obtain the information as well.

Article 233, related to bank-client privilege was modified so it would no longer be an obstacle for the investigation of crimes, audits, and determination of taxes.

Costa Rica has similar new rules in its new

tax law, which soon may to be approved by the legislature. 

Transparency has friends. For example, one is the U. S. Bureau of Diplomatic Security, which is the worldwide law enforcement and security arm of the U.S. Department of State.  These special agents are assigned to U.S. diplomatic post with a mission that includes nabbing IRS suspects.

These agents, in full cooperation with the Costa Rican government, have arrested at least five suspected U.S. tax dodgers in broad daylight in this country within three months.

In 2002, Costa Rica obligated financial institutions and other businesses to identify their clients and report currency transactions over $10,000 among many other rules.  New legislation expected in 2005 will further close the gaps on any type of secrecy and thus open the doors to full transparency — at least for official investigations.

The point is that Transparency, the phantom, will get some of the cheaters and tax dodgers it was created to find, but most criminals have learned to live with it. Honest people will get gobbled up too, probably more honest ones than bad ones. 

How does one beat this phantom?

The only way is to expect full transparency. This means bank accounts had better balance — exactly — with what is reported on financial statements and tax returns. 

U.S. citizens selling property in Costa Rica better think twice about failing to report any gains made on those transactions on their U.S. tax returns.  There are no capital gains taxes in Costa Rica but there sure are in the United States, and all citizens are required to report and pay a hefty tax on the gain regardless of where the gains were made.

A wise taxpayer will plan for the inevitable and get used to living with full transparency. And get a really, really good tax adviser.

Garland M. Baker is a 35-year resident and naturalized citizen of Costa Rica who provides multidisciplinary professional services to the international community.  Reach him at info@crexpertise.com.  Baker has undertaken the research leading to these series of articles in conjunction with A.M. Costa Rica.  Find the collection at http://crexpertise.info.  Copyright 2005, use without permission prohibited.

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San José, Costa Rica, Monday, Aug. 1, 2005, Vol. 5, No. 150

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U.S. honeymooners
among five lost at sea

By the A.M. Costa Rica staff

Two U.S. honeymooners and a Costa Rican crew of three are lost at sea along with their Flamingo-based sports fishing boat. An extensive search Saturday and again Sunday have not turned up any clues.

The alarm was raised Friday night when the boat, the King Fisher I, did not return from its scheduled half-day trip.

The search was called off Saturday afternoon when an incorrect report came in that the boat had been found and was under tow.

A Salvadorian plane is scheduled to arrive today to conduct high altitude surveillance. The aircraft is fitted especially for this task, according to the Ministerio de Gobernación, Policía y Seguridad Pública.

The Servicio Nacional de Guardacostas said that a ministry search plane overflew eight craft and one cargo ship Saturday but none was the missing boat. The area is heavily populated by commercial fishing boats and pleasure craft. But there have been no reports of sightings.

The Hotel Meliá Conchal, where the couple were believed staying, also has put a helicopter in the air, said the ministry. The United States military also is sending search planes, said the ministry.

The U.S. citizens were identified as Mark Vockery and his bride, Laura McCloud. No hometowns were given.

The boat is run by Captain Harold González Rodríguez, assisted by his brother Danilo González Rodríguez, both in their 20s, and Mayel Gómez Alanís, a 16-year-old.

This is the second strange happening in July in the Flamingo area. A private plane with six person aboard crashed into the sea July 16 just off shore for no obvious reason. The missing boat was not believed to be a victim of any sort of weather-related problem.

Searchers are expected to concentrate on Nicaraguan waters today because the boat was headed  north.

Sala IV chastises Badilla
on passport delays

By the A.M. Costa Rica staff

The Sala IV constitutional court held Marco Badilla, the outgoing director of immigration, personally responsible to pay damages for people who could not get passports within a reasonable time.

The Sala IV voted Friday that Badilla has ignored a series of previous court orders to deliver the passports. The case was one of eight San Ramon residents who wanted to travel on vacation to the Isla de San Andrés.

They began seeking a passport in April and were told they could only get an appointment in mid-July, long after the planned vacation. They sued, claiming Badilla has violated their constitutional right of libertad de tránsito or free transit.

Badilla announced his resignation Thursday, and Friday was his last day. The court considered him to have been disobedient, particularly since there were many previous orders from the court telling him to issue passports immediately, according to an explanation offered by the press office of the Poder Judicial.

As director general de Migración y Extranjería Badilla has supervised a changeover in the offices based in la Uruca. The result has been long delays for procedures that had been done quickly in the past. Badilla has said that Costa Ricans will be able to get passports in a day when new equipment is installed.

In another decision announced Friday, the Rev. Alfred Prado, a U.S. Roman Catholic priest, won a constitutional court battle to retain his tourist visa here even though he was participating at the controversial compound of the Asociación de la Mujer Vestida de Sol, meaning the Virgin Mary. A man at the compound in San Isidro de Grecia says he communicates with the Virgin. The cult has gained a following but not with the official Roman Catholic Church.

This case against immigration and Badilla alleged violation of religious liberty.

Spanish vice president
is left up in the air

By the A.M. Costa Rica staff

The deputies in the Asamblea Legislativa are getting heat because they failed to reach a quorum Thursday and did not meet Friday.

So they were unable to approve a routine permission to let a foreign military aircraft land on Costa Rican soil. The country's Constitution requires legislative approval for such events, involving aircraft and boats.

Sometimes the legislature deliberately refuses permission. Usually a U.S. naval craft is the victim, and deputies with an anti-American spirit refuse U.S. sailors who are on anti-drug patrol shore leave at Golfito or Puntarenas, much to the dismay of the local bar owners.

This week, the aircraft was from the Spanish air force, and its passenger was to be María Teresa Fernández de la Vega, the nation's vice president, who was coming on an official visit.

Roberto Tovar Faja, the foreign minister, kept up a diplomatic front and said in a statement Friday that he profoundly lamented the lack of action on the part of the assembly. The legislature will have another chance to pass the measure today, and both Costa Rican and Spanish diplomats are working hard to reschedule the visit.

La Nación, the Spanish language newspaper, was less diplomatic. A cartoon Sunday showed the Spanish vice president and the air force plane making endless circles above the country.

Boy shot in left eye by mistake

By the A.M. Costa Rica staff

A 12-year-old, José Miguel Castillo Mejías, suffered a bullet wound in the left eye Friday night when an 11-year-old neighbor girl he was visiting mistook a .22 caliber pistol on the sofa for a video game replica.

Castillo was hospitalized in very delicate condition. The pistol was owned by the girl's stepfather, police said. They live in Paraíso de Cartago. Police said the bullet was an illegal expanding type, sometimes called a dum dum.
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Group of pilgrims en route to Cartago pass an abandoned San José structure as they negotiate a slight grade. The eastbound pilgrims likely made the Cartago area Sunday night where they will spend today awaiting for the religious activities that begin Tuesday morning.

Police will use cameras to keep watch at basilica
By the A.M. Costa Rica staff

Pilgrims who congregate in the plaza of the Basilica de los Ángeles over the next two day will be on camera.

The Fuerza Pública will have a series of cameras set up to monitor activities of the crowd. Although most are religious, large crowds also attract persons who are less so.

The Ministerio de Gobernación, Policía y Seguridad Pública have called out nearly 1,500 officers and some 275 more from the Escuela Nacional de Policía, who will work with their instructors.

The devotion to Nuesta Señora de los Ángeles, the patroness of the country, is the largest movement of people in the country every year.  By noon today police will be at strategic points throughout the provinces of Cartago and San José. In addition, posts will be manned at key points elsewhere in the country. Officials noted Friday that pilgrims come from as far away as El Salvador.

Many are walking to keep a promise made to the Virgin Mary for benefits received or perhaps miracles. As many as 1.5 million persons, perhaps nearly a third of the population, will be involved somehow with the pilgrimage. For many it is a social event, too.

Hikers began arriving in the Cartago community last week. Some have stayed and others paid their devotions and returned to their homes. The major
religious activity is Tuesday morning, and most pilgrims plan to be there then.

Tent cities have been set up in the area around the basilica. Others en route are sleeping with relatives and friends or camping out.

Police precautions aside, the pilgrimage claimed one life early Saturday when a Zarcero man died after being hit by a car on a service road alongside the Autopista General Cañas in La Uruca. A motorist faces a drunk driving charge.

More than 150 lesser complaints have been handled by the Cruz Roja, which also is at maximum alert. Most problems have to do with sore feet or muscle spasms.

A whole litany of other government agencies are involved in protecting the pilgrims, called romeros and romeras here. Even agents of the Patronato Nacional de la Infancia are on the job to handle any cases of interfamily violence. 

A mobile command post has been set up in a trailer near the basilica, and a heliport have been set up for emergencies in nearby Taras.  Smaller temporary police stations dot the key routes.

Clouds dominated the sky most of Sunday as pilgrims trekked to Cartago. A light rain kept temperatures down. The movement will grow exponentially later today when much the same weather is expected.

This dicho repudiates violence against women
Una mujer no se toca ni con el petalo de una rosa.

“A woman should not be touched, not even with a rose petal.” This dicho bespeaks a strong opposition to violence against women. Once upon a time in Costa Rica men were taught to respect women and to never abuse them. This was part of the original, rather chivalric meaning of machismo.

Unfortunately, this custom is today all but forgotten, and what is now known as machismo is something that has degenerated into a kind of brutish swagger practiced by men who somehow have acquired the notion that simply being born male confers upon them the right to treat women like so much chattel to be disposed of as they see fit.

The statistics do not lie. There have been 19 women murdered already this year in Costa Rica by their male partners, and the year still has another five months to run. Thousands more are brutalized, physically and psychologically, but many of these cases never attract the attention of the authorities because fear of reprisal from their husbands or boy friends restrains women from reporting them to police.

Why all this violence, and why do so many men — if men they truly can be called — so often resort to physical force against someone they are supposed to love and cherish? Could it be because, in the hectic hurly-burly of our fast-paced modern lives, we have been too quick to jettison traditional values, one of those values being to teach young boys to respect and protect their womenfolk, and that love is not love at all unless it is given freely?

The seeds of brutality are sown early in a boy’s formative years. If he never hears today’s dicho, or an equivalent, but instead is exposed to a daily barrage of misogynistic rap and hip-hop lyrics that constantly reinforce some perverse conception of machismo, then, in my view, he’s got a very good chance of growing into the kind of man who is likely to brutalize women.

Violence has almost become endemic, not just in
way we say it

By Daniel Soto

Costa Rica, but globally. On television, I recently heard a hotel manager in London express the extremely bizarre idea that he didn’t expect tourists to shun the British capital because of the recent public transit bombings there since, after all, such terrorist violence has become “routine.” My goodness! If we’re willing to assign terrorism a permanent place in our daily lives by thinking of it as “routine” the door is then flung wide for the benign acceptance of any form of violence, no matter how brutal or inhuman, with a shrug and a sigh!

Una mujer no se toca ni con el petalo de una rosa. Just close your eyes and think about that for a moment. When I do, I see my mother and my grandmother and all the other wonderful women who have nurtured and enriched my life holding great bouquets of beautiful red roses presented to them by the men who love and respect them. It is difficult for me to imagine anyone doing violence to these women of another generation, another time, and in some significant ways – it must be said – a better time. For I can remember the days when violence was never accepted as merely “routine.” If that makes me old fashioned, then so be it.

We would do well in Costa Rica to start an education campaign to reintroduce Una mujer no se toca ni con el petalo de una rosa to every corner of the nation. Then, who knows? Maybe there might be a couple of other “old fashioned” ideas we might want to consider revisiting as well.

Development bank's Iglesias lauds free trade pact
Special to A.M. Costa Rica

WASHINGTON, D.C. — The ratification by the U.S. Congress of a U.S. free-trade pact with Central America and the Dominican Republic promises a fresh impetus to trade among the nations of the Americas, says Enrique Iglesias, president of the Inter-American Development Bank.

In a statement, Iglesias said successful implementation of the trade pact, known as CAFTA-DR or simply CAFTA, will ensure that "we gain momentum to involve more countries in building stronger and more dynamic economies and more stable and just democracies in our region."

Iglesias, who will leave the development bank Sept.30, made his statement after the U.S. House of Representatives narrowly approved CAFTA by a 217-215 vote.  The U.S. Senate approved the trade pact June 29.  The legislation, which eliminates trade barriers between the United States and the Central American region, now goes to President George Bush, who said Thursday that he looked forward to signing the legislation into law.  CAFTA has also been ratified by three other nations in the trade pact -- El Salvador, Honduras and Guatemala.

Colombia's ambassador to the United States, Luis

Alberto Moreno, was elected Thursday to succeed
Iglesias as development bank president.  Moreno assumes his new position Oct. 1.

Iglesias noted that while CAFTA (which also would include Costa Rica and Nicaragua) will immediately spur commerce in the region, it also underscores the urgency of increasing the competitiveness of the seven countries participating in the trade pact.

The bank staff said it is currently financing a range of programs aimed at helping the less-developed CAFTA partners improve their basic infrastructure and productivity in rural areas.  It is also assisting the countries in strengthening their capacity to implement trade agreements and to meet their obligations in such areas as enforcement of labor and environmental standards.

Costa Rica last month accepted a nearly $117 million loan to make ready for the agreement. The purpose of the money is to increase the country's competitiveness in anticipation of the challenges brought by the free trade treaty.

The bank staff also emphasized that the Central American nations in CAFTA need to ensure that basic education and health and nutrition programs give priority to the most vulnerable of their populations.

From our readers: He doubts free trade agreement will help Costa Rica
Dear AM Costa Rica:
The Perception and The Reality
The perception is that the United States of America is the richest nation  in the world but the reality is the U.S. has accumulated the largest debt of any country in the world.  As of this writing it was $7,875,189,100,024.23 and  it increases by $41 million every hour.
The perception is that the newly passed Energy Bill in the U.S. Congress will reduce our dependency on foreign sources of energy.  The reality is, that it gives 9 billion dollars in tax breaks and incentives to the oil and gas industry and less than $5 billion for energy efficiency and renewable energy programs, while Exxon/Mobil Corporation reported second quarter PROFITS for April, May and June 2005 of $7.64 billion as Americans pay on average $2.30 a gallon for gas and blame it on higher crude oil prices (and the profits keep growing).  Up 32% over the same period last year.
The perception by many is, that the U.S. is the one to follow with the DR-CAFTA agreement to make Central America more economically and politically stable.
The reality is, according to CNN News, the administration won over several Republicans by pledging protection from Central American imports of sugar and textiles. So much for Free Trade.
I found Tom Harrison’s “Letter of Maybes” to A.M. Costa Rica last week quite amusing.  He suggests that General Motors had to reduce employment because  of mismanagement, restructuring and increased
productive where “less workers are needed to produce twice as much.”  So, why would he want to see this kind of business come to Costa Rica?  He is obviously unaware that GM does operate a plant in Nicaragua and pays its workers $1 an hour, hardly enough to allow the average worker to buy a car. Perception or Reality?
The perception is that DR-CAFTA will help the textile industry in Costa Rica to grow and produce more and better jobs.  The reality is that the average textile worker in Costa Rica earns about $2.70-$3 an hour, and those same textile workers in Nicaragua are paid 90 cents an hour.  In a Free Trade Society where do you think these multinational companies will go?   Especially since this agreement does little to address working conditions and worker’s rights.  Even Nicaragua will have a rough time competing with the  Chinese who pay their workers 10 cents an hour, 13-15 hours a day, 6 days a week.
The perception is “More is Better”, but sometimes More creates an overabundance which lowers the price and shortens the profit margin.  The U.S. expects to increase its sugar exports to Central America by 166.2 percent in a region that exports large amounts of sugar.  This can only lower the price agriculture workers get for their product.  And in the case of  telecommunication, insurance and banking, “Better” has NEVER reduced the cost to consumers.
Perception or Reality?  You decide.
David Mesmer
Pompano Beach, Florida

Jo Stuart
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