Costa Rica Investment Protections
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1. INTERNATIONAL LAW INVESTMENT PROTECTION FRAMEWORK
According to the Costa Rican constitution, “Public treaties, international agreements and concordats duly approved by the Legislative Assembly shall have a higher authority than the laws upon their enactment or from the day that they designate.”[1]
The Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the “ICSID Convention”) was originally signed by Costa Rica on September 29, 1981, and later ratified by Law No. 7332 of March 30, 1993. The Convention entered into force on May 27, 1993. Costa Rica has not renounced this convention. Costa Rica has not made any notifications or reservations under the ICSID Convention.
Costa Rica has entered into bilateral and multilateral treaties that provide investment promotion and protection. Some investment treaties include protocols which generally contain clarifications for interpretation of certain terms. Costa Rica has signed 13 bilateral investment treaties that are currently in force with the following countries: Argentina, Canada, Chile, the Czech Republic, France, Germany, the Republic of South Korea, the Netherlands, Paraguay, Spain, Switzerland, Taiwan (Republic of China), and Venezuela. Costa Rica has signed six bilateral investment treaties with the following countries that are not currently in force: Belgium and Luxembourg (signed on April 26, 2002), Bolivia (signed on October 7, 2002), Ecuador (signed on December 6, 2001), El Salvador (signed on November 21, 2001), Finland (signed on November 28, 2001), and the United Kingdom (signed on September 7, 1982).
Costa Rica has entered into seven free trade agreements throughout the Americas that are currently in force. They are as follows: Tratado de Libre Comercio entre Canadá y Costa Rica (Canada-Costa Rica Free Trade Agreement (CCRFTA)), Tratado de Libre Comercio entre Costa Rica y la Comunidad del Caribe (CARICOM) (CARICOM-Costa Rica Free Trade Agreement), Tratado de Libre Comercio entre Centroamérica y República Dominicana (Central America-Dominican Republic Free Trade Agreement), Tratado de Libre Comercio entre Centroamérica y Chile (Central America-Chile Free Trade Agreement), Tratado de Libre Comercio República Dominicana, Centroamérica - Estados Unidos (DR-CAFTA) (Dominican Republic-Central America-United States Free Trade Agreement), Tratado de Libre Comercio entre el Gobierno de la República de Costa Rica y el Gobierno de los Estados Unidos Mexicanos (Costa Rica-Mexico Free Trade Agreement), and the Tratado de Libre Comercio entre Centroamérica y Panamá (Central America-Panama Free Trade Agreement).
The Tratado de Libre Comercio entre Costa Rica y China (Free Trade Agreement between Costa Rica and the People’s Republic of China) was signed on 8 April 2010, ratified on 31 May 2011, and entered into force on 21 June 2011. The Tratado de Libre Comercio con Peru (Free Trade Agreement with Peru) began its negotiations on September 10, 2010 between Costa Rica, Panama, Honduras, and Peru. Lastly, the Tratado de Libre Comercio entre Costa Rica y Singapur (Free Trade Agreement between Costa Rica and Singapore) was signed on April 6, 2010.
The Association Agreement between Central America and the European Union closed negotiations in May of 2010.
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2. INVESTMENT DISPUTES
[Examples of Costa Rican investment treaty arbitrations include:] . . . five arbitration claims against Costa Rica before ICSID. No known claims have been brought under other rules such as UNCITRAL. Four of the cases allege violations of bilateral investment treaties - the two pending cases allege violations of the Germany-Costa Rica BIT, and two of the three concluded cases alleged violations of the Canada-Costa Rica BIT. However, in the first case against Costa Rica, Compañía del Desarrollo de Santa Elena SA, Costa Rica consented to an ICSID arbitration in order to determine the appropriate amount of compensation to be paid following pressure from the U.S. Government.[2] There is no United States-Costa Rica BIT in force.
[1] Constitución Política de Costa Rica [Political Constitution of Costa Rica], Art. 7, 8 November 1949.
[2] Damon Vis-Dunbar and Luke Eric Peterson, “Blocked Eco-Tourism Project in Costa Rica Parkland Leads to BIT Arbitration,” Investment Treaty News, 21 February 2008, available at http://www.iisd.org/pdf/2008/itn_feb21_2008.pdf (accessed 15 March 2011).
