Special to A.M. Costa Rica

Scotiabank said Tuesday that it has agreed to buy Corporación Interfin for $293.5 million. Corporación Interfin is the parent of Banco Interfin, Costa Rica’s largest private bank.

Scotia will merge its existing facilties here with Interfin, resulting in a 13 per cent loan market share, it said. Subject to regulatory approval, the transaction is expected to close in about two month’s time and will be undertaken through a public share offering.

“Scotiabank has deep roots and a long history in Latin America and we are proud to grow our operations in this region, where we have become a leading bank,” said Rick Waugh, Scotiabank president and chief executive officer. “Acquiring Interfin complements our strategy of investing in high growth markets where we anticipate increased demand for financial services.”

“This region is an increasingly important part of Scotiabank’s international strategy, and we have built a strong franchise by delivering superior service and by providing financial stability.”

“Scotiabank’s focus on customer service and teamwork are absolutely consistent with the culture we have maintained at Corporación Interfin, which assures us that our customers and the members of the Interfin team will find themselves in a familiar environment,” said Luis Liberman, chief executive officer of Interfin.

Scotiabank has operated in Costa Rica since 1995. The bank’s subsidiary has about 300 employees, plus 39 automated banking machines and 17 branches, offering retail, commercial and cash management services.

Founded in 1979, Interfin has 24 branches, 36 automatic tellers and about 950 employees. Scotiabank’s combined Costa Rican operation will have 41 branches, 75 automatic tellers, with about $1.6 billion in assets and $1 billion in deposits, Scotia said in its announcement.
In Latin America, Scotiabank already operates in Mexico, Perú, El Salvador, the Dominican Republic, Puerto Rico, Panamá, Belize and Chile, with an affiliate in Venezuela and a representative office in Brazil.

“Scotiabank will be leveraging proven, bank-wide capabilities to expand our product and services offerings,” said Brian Brady, Scotiabank’s country head in Costa Rica.

Scotiabank, based in Toronto, has more than 55,000 employees, Scotiabank Group and its affiliates serve about 10 million customers in some 50 countries around the world. With $357 billion in assets, Scotiabank trades on the Toronto and New York stock exchanges.

The Interfin Corporation began in 1979 with the foundation of the International Finance Corp., a financial enterprise dedicated to financing and international commerce to industrial and commercial businesses.  Interfin Bank was approved in 1982.

Interfin bank has branch offices in Alajuela, Barva, Cartago, Curridabat, Desamparados, Escazu, global Park, Guapiles, Heredia, Laureles, Las Flores, Los Suenos, Novacentro, Plaza America, Rohrmoser, Sabana, San Francisco, downtown San José, San Pedro, San Carlos and Tibas.

In addition to Banco Interfin S.A, the Corporación Interfin S.A. operates Transamerica Bank and Trust Company Ltd. in the Bahamas, Interfin Valores, Puesto de Bolsa S.A., a stock brokerage and investment service; Interfin Banex Pensiones S.A., a special unit to manage pension funds with 34,000 clients.

Also, Corporación Privada de Inversiones de Centroamérica, S.A. CPI. a firm speciaizing in commercial financing; Arrendadora Interfin S.A., a firm that leases heavy equipment;  Arrendadora Interfin Guatemala S.A.; Arrendadora Interfin Nicaragua; Arrendadora Interfin Honduras S.A; Arrendadora Interfin Panamá S.A,; Arrendadora Interfin El Salvador S.A de CV, and Financiera Arrendadora Centroamericana S.A.

By the A.M. Costa Rica staff  

President Óscar Arias Sánchez told Germans over the weekend that foreign firms soon would only have to pay a tax rate here in the single digits.

He was speaking in Munich at the Costa Rica Arena, an exposition area of the country’s products set up for the World Cup crowd. Arias pointed out that a magazine had listed Costa Rica third in the world in outsourcing after India and China.

“In fact, our salary structure is more competitive than that of India and the tax rate in force for foreign corporations soon will be a single digit,” said Arias in a Spanish text released by Casa Presidencial. The corporate tax rate here is typically 30 percent.

Arias did not say how the low tax rate might be accomplished. However, he said that during his administration there will be more and more aid to foreign investment.

He said that he hoped an accord would be reached soon with Europe to eliminate import duties and that his aides are sending proposed laws to the Asamblea Legislativa to stimulate the growth of the high-tech sector. More importantly, he said, the amount of money for education is being increased.

By the A.M. Costa Rica staff

Top ministers held a strategy session Monday to figure out how to get a new tax plan passed in the Asamblea Legislativa. A communique issued after the session said that the plan might go to the legislators within a month. Little is known about the contents of the plan except that the measure is more streamlined than the 400-plus-page document promoted by the Abel Pacheco administration over the last four years. That document, the bipartisan product of a handful of ex-budget ministers, suffered a reverse when the Sala IV constitutional court ruled that legislative leaders rammed the document through the assembly in an unconstitutional way.

The new plan is expected to have at least a proposal for a value-added tax that would be equal to the 13 percent collected in sales tax now. The value-added tax would raise more money because more activities, such as professional work, would be covered. The ministers who met were Guillermo Zúñiga of the budget ministry Hacienda, Francisco de Paula Gutiérrez, president of the Banco Central, and Marco Vargas, who is minister of Coordinación Interinstitucional, a new job. Vargas said in the communique that an exact date to send the document to the legislature is not fixed but that it will be a short time, a month at the most. Vargas said that what is needed is a fiscal plan that is defensible and acceptable to all the parties represented in the assembly. For the last four years Movimiento Libertario used parliamentary procedures and thousands of separate amendments and motions to stall the fiscal plan.

In order to get the document approved, legislative leaders had to resort to a fast track procedure that the high court found insufficient. The Libertarians faced a lot of public and official pressure to withdraw their opposition. Zúñiga, in the communique, said that the plan would first be presented to the legislature and later to other interested groups in society. He said all suggestions and motions would be accepted, but it is hard to see the mechanism for that because the plan by then would be in the hands of the lawmakers. The country needs to face the structural problems of public funding, Zúñiga said. He cited tax fraud, financing the country’s massive internal and external debt and public spending. No matter what the executive branch proposes, the result, if passed, may be very different because the legislature has the power to redraft the bill.

Zúñiga also said that there are other projects of high importance in the legislature, including a redraft of the law for public concessions, loans, modernization of the Instituto Costarricense de Electricidad, opening the telecommunications market to competition, strengthening the Instituto Nacional de Seguros and opening the monopoly in the insurance market.

The government estimates that the country has a debt load of $7 billion. For every colon that flows into the Ministerio de Hacienda, the government spends two colons, financing the difference with debt.

The Central Bank itself has run up $2.8 billion in debt defending the value of the colon over the years. The central bankers want to hand this debt over to the central government, where there are more options for financing. Such a measure is in the legislature.

Officials at the Central Bank have begun talking about letting the colon float on the world market within certain limits by the end of the year. This possibility has caused concern in the expat community and would amount to a dollarization of the Costa Rican economy because hardly anyone would accept colons if they did not know what the currency would be worth tomorrow.

Recent disclosures of special benefits given public employees have irked some in the public. For example, a guard with 31-years of service on the docks at Caldera is getting a $26,000 payoff because the facility is being turned into a concession. The payoff is in addition to any pension benefits.

Similar disclosures were prompted by Sala IV rulings rejecting some benefits. The court acted on appeals filed by the Movimiento Libertario.  There also have been disclosures that President Pacheco funneled millions in cash through the Catholic Church to Limón dockworkers to buy labor peace. The church then was reimbursed by “donations” from owners of agricultural firms who had received settlements for storm damage to their crops.

By the A.M. Costa Rica staff

A group of Villalobos creditors reports that a trial for Oswaldo Villalobos Camacho has been tentatively scheduled for next Feb. 5. This is the same group that asked creditors to send e-mails to the courts and magistrates to speed up the setting of a date. There is no way to tell if there is a degree of judicial spite in the 2007 date. The courts are clogged, and many cases wait years before a trial takes place. Prosecutors might also be awaiting the appearance of Enrique Villalobos Camacho, who has been a fugitive since 2002.

The group is the United Concerned Citizens & Residents. They have engaged in efforts to seek a speedy trial for Oswaldo, who faces illegal banking, fraud and money laundering charges. They also have urged creditors who have filed as victims to withdraw their allegations. They say that if Oswaldo is found innocent, the other brother will show up.

Some associated with the group have claimed that those who maintain allegations against the Villalobos brothers will be the last to be paid when Enrique Villalobos returns to settle accounts. Others say this attitude is naive and the only person who might get some money are those who are parties to the suits.

The trial date could not be confirmed via the Poder Judicial because of the weekend.

The Villalobos high interest operation had about $1 billion on its books when Enrique Villalobos announced he was closing down Oct. 14, 2002.

Although Enrique Villalobos maintained his brother Oswaldo was not connected with the high-interest operation, prosecutors cite a study by the Judicial Investigating Organization that says he was.

Oswaldo was better known as the operator of the Ofinter S.A. money exchange company, although both brothers shared office space at the Mall San Pedro location. Ofinter, which closed the same day, had other locations around the Central Valley.

The high-interest operation paid up to 3 percent a month and appears to have been involved in the exchange of Colombian pesos for U.S. dollars.

Casa Presidencial is back on the Web with the daily doings of President Óscar Arias Sánchez and his executive branch team.

The site was abandoned along with a lot of other electronic-based information by the outgoing Abel Pacheco administration. As in the past, the site contains links to ministries and institutions.

Webmasters said they will be posting some information in English, such as speeches by Arias given in that language

Despite the pressure of playing the home team in the inaugral match, the Costa Rican side performed well on Friday.  Facing “expert” predictions of a German blitzerkeig, the Ticos stood their ground and even managed to quiet the home crowd at points in the second half.

The best news for the Ticos were the 2 goals scored by Paulo Wanchope, since they had been unable to score against Class A teams since their match in Iran. The match was the highest scoring opening match ever.  The local press and fans took the defeat well.  Deep down nobody expected to beat the Germans, so now its “manos a la obra”  against Ecuador and Poland.

Today is the big game - the opening match of the World Cup Germany 2006.  Costa Rica and German starters:

Lineup

GER

CRC

www.nacion….

fifaworldcu…

soccernet-a…

Schedule of All Matches:

fifaworldcu…

Watch the games online:

Despite poor performances in the friendly matches last week, criticism in the local press and by local fans, and most German fans and players predicting a lopsided win; the Costa Rican team arrived in Munich in a bubble of optimism.  Basing themselves on a solid improvement in the match against the 2nd ranked Czech Republic, the team expressed confidence in themselves and their possibilities tomorrow.

According to Paulo Wanchope, star striker “The team is now even stronger than we were before the match against the Czechs. The atmosphere is hot and the players feel it.”  As to whether it is better open against the strongest team in the group or to close against them (like the match against Brazil in 2002), Wanchope said, “Sometimes the strongest team is the weakest team. All we can do is go out there to win in an all out effort.  We all know that historically Germany has many achievements, but history doesn’t play, only players do. “

By the A.M. Costa Rica staff

President Óscar Arias Sánchez called upon an international summit on armed violence to support his vision of a comprehensive arms trade treaty.

He asked the group, the Summit on Armed Violence and Development, to include a call for the treaty in its final declaration. The event was Wednesday in Geneva, Switzerland.

“The notion that arms construction and trade are good for a nation’s economy has no credibility in a world as connected as ours,” said Arias in an English text provided by Casa Presidencial here. “In a world as connected as ours, a gun fired at one of us is a moral and monetary loss to all of us. A job in an arms factory may be one small economic step forward for a worker, but it is two giant leaps back for mankind.”

“When it comes to the link between conventional weapons, armed violence and crippled development, the evidence is so overwhelming that practically no one disputes it,” he said.

The arms treaty would require that countries license arms exports and be responsible for the use the weapons are put at their final destination. The treaty also would require an international list of arms deals.

A draft treaty is the product of a meeting of a group of Nobel Peace Prize laureates convened by Arias.

The Arias Foundation for Peace and Human Progress estimates that small arms kill 300,000 person a year and injure a million.

An arms treaty “would make legal ties out of the moral ties by which we already know we must abide,” said Arias in Geneva. “I cannot stress enough how important these ties are. For it is within the constraints of our international system that the voices of nations are liberated. It is binding treaties that unbind countries from the fear of conflict. And it is only our unrelenting bond to each other, as human beings, that sets us free.”

Among nations that oppose the treaty is the United States, which is a major exporter of small arms. Arias said Wednesday that 30 nations, including Switzerland, have given support for the measure.

Ironically, as Arias was speaking Channel 7 Teletica in San José was airing a story about the 40 people a day who take the Costa Rican test to carry a concealed weapon. Many cited concern for personal security.