New Civil Society Report on Costa Rica: better inter-institutional coordination and effective asset recovery laws and practices needed to advance anti-corruption efforts

18 June 2021 –

Costa Rica has made significant progress towards developing normative legal frameworks for the implementation of most articles of Chapter II (Preventive Measures), but the implementation of Chapter V (Asset Recovery) provisions of the United Nations Convention against Corruption (UNCAC) remains poor, a new civil society report authored by Asociación Costa Rica Íntegra (CRI) finds. CRI produced its report, which is intended as a contribution to the UNCAC implementation review process in its second cycle, with technical and financial support from the UNCAC Coalition.

With no governing or coordinating entity leading the prevention of corruption activities in Costa Rica and no national policy in place that identifies clear objectives for the fight against corruption, the measures adopted by control entities have been scattered and have achieved limited impact. Moreover, there are large gaps regarding the country’s measures for the recovery and direct return of assets. There is no domestic legislation in this area and no specific international cooperation agreements have been signed for this purpose, which has led to Costa Rican authorities being unsure about how best to address this issue.

Recent normative developments in the area of anti-corruption are largely due to Costa Rica’s commitments to international organizations such as the Organization for Economic Co-operation and Development (OECD), which it just recently became a part of in late May 2021. However, the same progress has not been achieved in the implementation of some provisions of the United Nations Convention against Corruption.

After completing the self-assessment checklist by mid-2020, the official UNCAC review process in Costa Rica has been delayed due to the COVID-19 pandemic and it is unclear when the country visit will take place. Civil society has not been involved at all in the review process and the government has made no commitment to publish self-assessment checklist and full country report on Costa Rica’s UNODC country profile page once they are finalized.

Read the full civil society report in English here. The original version of the report in Spanish can be found here.

Main findings

The following are some of the main findings according to topic:

Prevention of corruption

While there are several different institutions that deal with aspects of the prevention of corruption, there is no leading body in this regard in Costa Rica. The existing institutions lack sufficient economic and human resources. The main public policy instruments, such as the National Development Plan, do not establish clear policies in this area, which limits the allocation of resources because it is difficult to justify the allocation of budget in each entity if it is not part of the institutional objectives. Existing initiatives are isolated and have little impact. There is an extensive agenda of legislative proposals related to the prevention of corruption, including a comprehensive reform of the Law against Corruption and Illicit Enrichment, a law on Access to Information, Public Procurement, among others, but there is no legislative support for their approval.

Currently, the National Strategy for Integrity and Prevention of Corruption is being developed by a multi-sectoral group called “Working Group” whose objective is to establish the strategic framework for action by the State and other actors in society, with emphasis on prevention, promotion of ethics and the creation of a culture of legality that reduces acts of corruption.

Whistleblower protection

Costa Rica does not have a regulatory framework that establishes mechanisms to facilitate the reporting of acts of corruption by public officials or to protect them from possible reprisals in the workplace as required by Art. 8.4 of the UNCAC. This discourages public servants from sharing valuable information about corruption cases with competent authorities. Within the Judicial Branch, there is a Victim and Witness Protection Office for general criminal proceedings, but there is no specialization for corruption-related crimes. Moreover, the existing complaint channels are not uniform in terms of the level of protection, publicity, accessibility, and not all of them have a clear regulatory framework. The data on the effectiveness of these channels is very scarce, and most complaints end up being dismissed.

Public procurement

The biggest corruption scandals in Costa Rica have been linked to public procurement processes. In practice, 80% of the procurement volume is carried out through direct contracting which is, according to the law, an extraordinary procedure that is faster and has fewer controls. The establishment of the Integrated Public Procurement System (SICOP) was a major achievement, as it brought together 20 virtual public procurement platforms and was made mandatory for the entire public administration in 2016. However, it has not yet been incorporated into all public entities. Until 2019, 30% of institutions were missing, and even those that have implemented SICOP do not use it for all stages of the contracting procedure, nor for all purchases. Despite this, its use has brought the country savings in resources (0.9% of GDP in 2017), as well as greater dissemination of information, which in turn generates more competition of bidders in procurement procedures. Publicity is expected to improve much more with the Ministry of Finance’s recent initiative called the Public Procurement Observatory.

A draft Public Procurement Law was co-developed with civil society, and intends to prevent the coexistence of multiple procurement regimes, to reduce the cases of exceptions to circumvent ordinary procedures and to introduce requirements for the application of direct contracting. It is unclear when it will be adopted.

Access to information

Costa Rica does not have a law on access to public information, but there is a broad national and international regulatory framework, as well as important initiatives related to this issue in place. Among the most important initiatives is the Decree on Transparency and Access to Public Information of 2017, which defined which information is publicly accessible, created the legal concept of the Access to Information Officer and obliged entities to include a transparency section in their work reports. However, the scope of this Decree is limited to the Executive Branch, although a guideline was issued on the matter that is mandatory for the Decentralized Administration. In addition, not all the entities to which these regulations are applicable fully comply with them. Furthermore, the approval of a law on access to information is currently pending.

Participation of civil society

The results of the 2016 National Transparency Consultation reveal that there is little transparency regarding civil society participation and there were no significant changes in the 2019 consultation. Thus, only 24% of respondents know about their right to participate in the decision-making processes of public entities and 44% negatively assess the current mechanisms of participation because they consider that they are not sufficient, are not properly publicized and are not easy to use. Nevertheless, the initiatives of entities such as the Office of the Comptroller General of the Republic, the Public Ethics Ombudsman’s Office, the Ombudsman’s Office, the Judicial Branch and the Legislative Assembly, have provided information to the general public about their rights and have created spaces to promote participation, even though they have yet to become permanently active spaces with the capacity to have a real impact on decision-making.

Judicial independence

Citizen’s trust in the judiciary has been declining over the past decade, especially since 2017. Several of the bodies and initiatives that have been created in the judicial sphere require review in order to eliminate overlapping powers and to manage the limited resources available to them more efficiently. In addition, the implementation of the sanctioning regime has not been a useful tool for detecting the areas most vulnerable to corruption in the judiciary or for sanctioning misconduct. With respect to threats to judicial independence, there is an external threat related to the appointment process for Supreme Court and Constitutional Chamber justices, which has not been transparent or objective and is constantly being called into question, and an internal threat related to the appointment and disciplinary powers of the Plenary Court.

Anti-money laundering

While there is a continuous development of general anti-money laundering regulations in Costa Rica, the application of the sanctioning regime by the competent superintendencies has been almost non-existent in the last five years. Prosecution of money laundering offences has been limited by the way in which it is defined in the legislation, since a distinction is made between the offence of laundering of proceeds of drug trafficking and laundering of proceeds derived from acts of corruption. These crimes are currently investigated by two separate Deputy Prosecutors Offices, which has led to a lack of coordination. However, a bill is being developed that seeks to unify the two types of offences and centralize prosecution in the Deputy Prosecutor’s Office for Money Laundering and Emerging Capital, although this institution also has investigative limitations. The amount of Suspicious Transaction Reports reported by the FIU has gradually been increasing over the last decade.

Asset declarations

The asset declarations of public officials are not published, despite the fact that the follow-up mechanism for the Implementation of the Inter-American Convention against Corruption and the Office of the Comptroller General of the Republic have repeatedly stated the need to make them public in order to exercise adequate political and citizen oversight. Failure to comply with this obligation to submit sworn declarations leads to the imposition of administrative sanctions. In the last five years, 104 sanctions have been imposed, ranging from written reprimands, dismissal, prohibition of entry or re-entry to public service positions, and cancellation of credentials.

Asset recovery

There are significant gaps regarding the country’s measures for the recovery and direct return of assets. There is no domestic legislation in this area and no specific international cooperation agreements have been signed for this purpose. Thus, it is not even clear to the Costa Rican authorities what the best way for another State to bring legal action or claim compensation is in the national courts, nor has a request to that effect been submitted. The same is true in the case of the return of assets central to the crime committed. In addition, confiscation cannot be applied to assets of economic interest of equivalent value, which could be a constraint on international cooperation.

Key recommendations

In its report, Costa Rica Íntegra makes several key recommendations for priority actions to be taken to ensure the full implementation of the UNCAC in Costa Rica, for example:

  1. Finalize and implement the National Integrity and Corruption Prevention Strategy;
  2. Consolidate the steering role for the prevention of corruption in a single body; and provide control bodies with more resources for preventive purposes;
  3. Review the effectiveness of public reporting channels and their protection protocols; and strengthen the Office of Victim and Witness Protection to become a body responsible for providing protection to whistleblowers as required by the United Nations Convention against Corruption;
  4. Incorporate all public entities into the Integrated Public Procurement System (SICOP), including the decentralized sector.
  5. Develop and adopt an access to information law that is binding on the entire public administration;
  6. Publish the contents of public officials’ sworn asset declaration;
  7. Make the register of beneficial owners public;
  8. Strengthen the capacity and independence of the Court of Judicial Inquiry; reform the appointment process for Supreme Court and Constitutional Chamber justices; and improve the disciplinary regime.
  9. Provide more resources to the entities dealing with anti-money laundering and monitor their performance; and approve the bill that unifies the two criminal offences of money laundering;
  10. Develop and adopt domestic legislation regulating the direct recovery of assets by other States and the return of assets that have been confiscated; and enter into international cooperation agreements.

More specific recommendations are provided in Chapter VII of the report.

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