The CAFTA-DR-U.S. Negotiations on Financial Services: The Experience of Costa Rica
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43. According to Promotora de Comercio Exterior de Costa Rica (the Foreign Trade Promotion Office of Costa Rica), the preferential access Costa Rican exports have enjoyed in the U.S. market since the 1980s through the Caribbean Basin Initiative has played a key role in attracting this export-oriented FDI into Costa Rica. 44. Thus, a financial institution is one that in principle is supervised. Following this logic, given that insurance is not supervised in Costa Rica, one could argue that the INS is not a financial institution. However, one of the main obligations undertaken by Costa Rica under chapter 12 is to set up a supervisory authority for insurance by January 1, 2007, thereby making it a financial institution in the sense of the agreement. 45. This definition includes, in principle, e-finance. In this regard, article 14.2 of the e-commerce chapter explicitly clarifies the following: “For greater certainty, the Parties affirm that measures affecting the supply of a service using electronic means fall within the scope of the obligations contained in the relevant provisions of Chapters Ten (Investment), Eleven (Cross-Border Trade in Services), and Twelve (Financial Services), subject to any exceptions or nonconforming measures set out in this Agreement, which are applicable to such obligations.” 46. The following example may be useful to illustrate the scope of application of chapter 12. Consider a company that has its principal place of business in Costa Rica and leases automobiles in Nicaragua. If the company operates a car rental business, where a customer rents a car for a short period of time, the service being provided is unlikely one of a “financial nature.” It is a transportation service rather than a financial service, and measures affecting the cross-border provision of such services would be covered by chapter 11 rather than by chapter 12. However, suppose that the Costa Rican company leases automobiles on a long-term basis and the customers leasing the automobiles are fully responsible for repairs and maintenance. The leasing company is providing its customers with an alternative means of borrowing or financing the acquisition of automobiles and, as such, is providing a service of a financial nature. Measures affecting the cross-border provision of these services would be covered by chapter 12 and not by chapter 11. An automobile leasing company operating in Costa Rica is not “regulated or supervised” as a financial institution and, therefore, is not a financial institution. Measures affecting investments in such a company by U.S. and other Central American investors and their investments would be covered by chapter 10 and not by chapter 12. 47. Under annex 12.5.1, all CAFTA-DR-U.S. parties undertook basically the same commitments to permit and provide national treatment to two kinds of services. First, regarding banking and other financial services, the commitment allows the provision and transfer of financial information and financial data