U.S. Embassy San José Owes Costa Rica’s SocialDevelopment Fund ¢2.5 Billion Colones

The United States Embassy in San José is on list of the largest debtors of the Social Development Fund and Family Allowances –  Fondo de Desarrollo Social y Asignaciones Familiares (FODESAF).

Other embassies also owe the fund, but what is striking is that the U.S. Embassy owes some ¢2.5 billion colones, according to report today by Telenoticias.

So, why is it the Embassy is not paying? When asked, the Embassy press office, in a written reply to Telenoticias said:

“Governments do not tax other governments. Under articles 31 and 34 of the Vienna Convention on the Law of Treaties of 1969, diplomatic missions are exempt from fees or taxes of a host country. This applies to the U.S. Embassy in Costa Rica, as well as the Costa Rica Embassy in Washington.”

The written reply makes it clear the Embassy is not in agreement with the alleged obligation to the FODESAF.

According to the FODESAF, the other delinquent embassies include: France owing ¢5 million; Uruguay with ¢2.2 million; Venezuela with ¢1.9 million; Argentina with ¢1.2 million; Panama owing ¢800.000; Mexico also owes ¢800.000; Honduras with ¢600.000 and China with ¢360.000.

Thousands of Costa Rican employers who try to skip out on payment faced judicial collections, but in the case of embassies, diplomatic immunity prevents the judicial process.

Following is a reprint of Article 34 of the Vienna Convention on Diplomatic Relations, as published by Ediplomat.com:

Article 34

A diplomatic agent shall be exempt from all dues and taxes, personal or real, national, regional or municipal, except:

1. indirect taxes of a kind which are normally incorporated in the price of goods or services;
2. dues and taxes on private immovable property situated in the territory of the receiving State, unless he holds it on behalf of the sending State for the purposes of the mission;
3. estate, succession or inheritance duties levied by the receiving State, subject to the provisions of paragraph 4 of Article 39;
4. dues and taxes on private income having its source in the receiving State and capital taxes on investments made in commercial undertakings in the receiving State;
5. charges levied for specific services rendered;
6. registration, court or record fees, mortgage dues and stamp duty, with respect to immovable property, subject to the provisions of Article 23.