4. Public companies or companies holding special or exclusive rights,
including designated monopolies (Article 280 EUCAAA).
The Costa Rican Constitution prohibits private monopolies, as well as any acts that threatens
freedom of commerce and agriculture. 11 The creation of State-owned monopolies requires
the approval of 2/3 of Congress and de facto private monopolies must be subjected to special
laws. However, there are several public monopolies and companies with special rights to be
considered. 12 Further, in Costa Rica there are some markets that are expressly excluded from
competition law or, where prices are regulated by guilds or associations; and lastly, there are
also markets where discrimination against foreign investment has been imposed by the legal
framework; all of which are analyzed as follows:
Public Monopolies: RECOPE: The Costa Rican Oil Refinery was granted by law the
monopoly of the importation, refinery,
sell and distribution of and its derivates in the country.
Law N° 7356 of August 24th, 1993. ICE: The Costa Rican Electricity Institute was granted by
law the monopoly of the generation of electricity in Costa Rica. Private generation is allowed
provided the company sign a Power Purchase Contract with the ICE, private companies are not
allowed to sell the electricity to any other party different than ICE and their generation capacity
is limited. JPS: The Social Protection Board was granted a monopoly in the production,
distribution and sale of lottery and raffles in Costa Rica. Law N° 13876 of November 21 st 1951.
AYA: the AYA is in charge of the provision of water and sewerage in a public monopoly basics,
private parties are not allowed to provide such services, in certain locations there are
semipublic organizations (ASADAS) that are allowed to provide such services in a specific
territory but under a public service philosophy and in coordination with AYA.
Companies with special rights: Dos Pinos: The Co-op law in Costa Rica establish
several tax benefits for Co-op companies there are several companies organized under this
legislation. The most significant example is Dos Pinos, that Co-op controls the dairy and related
industry in a de facto semi monopoly.
Exclusion of Markets: In Costa Rica, the following markets are either expressly
excluded from competition law or their prices are fixed by public authorities and/or guilds.
Professional associations: In Costa Rica there are 33 professional associations, that due to an
interpretation of the Constitutional Chamber, are allowed to establish minimum prices.
COPROCOM has been opposed to this, most recently in February 2022, indicating that such
minimum price fixing restrict access of consumers to such markets, facilitate collusion and
increase such prices. Rice: The price of rice in Costa Rica is regulated. The Competition
Authority (COPROCOM) has issued several resolutions stating that the regulation of rice prices
in Costa Rica is not appropriate because it does not meet the principles for an efficient
economic regulation, since the regulation is not necessary, nor proportionate, it is distorting
and not very transparent. It affects the most vulnerable members of society. However, this
resolution has no binding effect. Coffee: the Law for the Promotion of Competition and
10 Executive Report on the Work and Activities of the Commission to Promote Competition (COPROCOM) during 2020.
Latest available report. 11 Article 46, Political Constitution of November 7,1949 and its amendments. 12 This analysis does not include entities who were granted concessions based on the General Law of Public
Administration and the General Concessions Law on Public Works with Public Services.
TA to Support the Implementation of the Trade Pillar of the EU-CA Association Agreement
Legal review of the Central American Competition framework
12
Effective Defense of the Consumer (Law No. 7472), expressly exempts the coffee industry with
respect to the setting of profit percentages for coffee processors and exporters. Sugar: the
Law for the Promotion of Competition and Effective Consumer Protection, Law No. 7472,
expressly exempts the sugar cane industry with respect to the setting of production quotas and
sales prices. Land Maritime Transportation: the Law for the Promotion of Competition and
Effective Consumer Defense (Law No. 7472), expressly exempts maritime transportation
maritime transportation with respect to maritime conferences in which tariffs and route
distribution among competitors are agreed upon. Public Services: ARESEP oversees how the
services categorized as “public services or utilities” are being rendered and fixes their prices.
These public services are divided into 3 sectors: i) Water; ii) Energy; and iii) Transportation: i)
Water: hydric resource; sewerage systems; fire hydrants; ii) Energy: gas; electricity; iii)
Transportation: airports; public buses, cabotage; taxis, trains, tolls, ports. ARESP also
regulates the prices of mail services (letters and envelopes with weight inferior to 2 kg), which
is provided by the Costa Rican Postal Office. Credit and Debit Card Commissions: A very
recent Law granted the Central Bank of Costa Rica (in charge of macroeconomic issues of the
country) to authority to establish maximum percentages on commissions charged by banks to
retailers for the use of dataphones. Currently, the commission have been lowered13 and will
be, by 2024 almost equal as the average of commissions charged in OECD countries. 14
Moreover,
the financial sector in Costa Rica has been constantly criticized as being collusive
and organized as an oligopoly, as has the Association of Costa Rican Banks, that was against
the Central Bank lowering said commissions and have mentioned their intention to file a suit
before the Costa Rican Courts. 15
Explicit Discrimination of Foreigners in the following markets: Energy: In Costa Rica,
at least 35% of the capital of cooperatives and companies that sell their energy to the Costa
Rican Electricity Institute (ICE) must be Costa Rican, in accordance with the "Law that Authorizes
Autonomous or Parallel Electricity Generation", No. 7200. Maritime Zone: The Maritime Zone
in Costa Rica is public. The State grants concessions for its development and administration.
However, the Law restricts foreigners from having more than 51% ownership in entities with
concession rights. There is an exception to this principle with regards to the concessions
granted (without discrimination of nationality) to the project developed by the Costa Rican
Tourism Institute (ICT) known as “Polo Turístico Papagayo” or Golfo de Papagayo Tourism
Development (a project of 1,658 hectares) located in Culebra Bay, Guanacaste. 16
5. Public Procurement and Distribution of Pharmaceutical Products
Public Procurement: Both, the current and the new public procurement law (that enters
into force on December 1, 2022) include free competition of both national and international
bidders without any distinction regarding nationality as a fundamental principle and prohibit
any unjustified restrictions on free participation. However, it is worth mentioning that the law
(both of them) include as an exception to this principle of free competition the possibility of
13 Costa Rican Central Bank Press Release, available at https://www.bccr.fi.cr/comunicacion-yprensa/Docs_Comunicados_Prensa/CP-BCCR-004-2022-
BCCR_fija_nuevas_comisiones_maximas_para_tarjetas_pago.pdf
14 https://semanariouniversidad.com/pais/nuevas-y-menores-comisiones-de-datafonos-entran-a-regir-pese-arechazo-de-asociacionbancaria/#:~:text=Costa%20Rica%20manten%C3%ADa%20tasas%20superiores,es%20un%201%2C75%25.
15 https://semanariouniversidad.com/pais/bancos-llevaran-a-los-tribunales-la-fijacion-de-comisiones-realizada-porel-bccr/ 16 https://www.ict.go.cr/en/our-work/golfo-de-papagayo-tourism-development.html
TA to Support the Implementation of the Trade Pillar of the EU-CA Association Agreement
Legal review of the Central American Competition framework
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public entities have directly execute contracts between them, which in practice means that
whenever there is a public provider of the required services (telecommunications, for example)
the contracting entity contracts the service directly to the public provider without carrying out
a public tender. This is a usual practice that goes against free competition and there are no
indications that may suggest that this situation is going to change in the short term. Currently,
there is a great agitation around public work contracts since the prosecutor's office of the
republic is carrying out the investigation of the “Cochinilla” case, in which several of the most
important public work contractors were accused, as well as public officials, of carrying out anticompetitive acts in public work tenders, they were accused of fixing the tenders in order to
obtain better prices as well as bribe public officials to get an anticompetitive treatment, the
case remains under investigation.
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