Memorandum by the Junior Economic Analyst in Costa Rica (Heck)

In accordance with instructions received from the Department, the Embassy at San José has been reviewing the Proclaimed List with a view to the categorization of the names contained therein in order to permit an orderly deletion policy.

It was decided at the outset that a group of some 30 or 40 names comprising firms which are no longer in existence could be recommended for immediate deletion. A second category containing names primarily of Costa Ricans who had engaged in casual cloaking activities and who, it is felt, have been sufficiently punished will also be recommended for early deletion. A third group the principal part of which is Italians whose activities are no longer deemed detrimental will also be recommended for early deletion.

The remaining names were carefully screened in order to determine those if any which should be retained on the List for an indefinite period. That such a List will be necessary arises out of the structure and nature of Costa Rican control measures. The basic control law has as one of its essential features that inclusion in the Proclaimed List shall constitute grounds for control by the Office of the Alien Property Custodian.6 Another example of the use of the Proclaimed List and the dependence of the Costa Rican Government upon it is to be found in the recent revision of the citizenship and naturalization law in which inclusion in the Proclaimed List was specifically mentioned [Page 305] as one of the grounds upon which naturalization could be canceled. Still another factor and probably the most important is the fact that a small but powerful group of listed individuals have assets presently invested in expropriation certificates. It is feared that in the event that these persons were to be deleted bases would be furnished to permit suits against the Costa Rican Government for recovery of funds invested in the certificates. In view of the present precarious financial position of the government,7 it is deemed highly undesirable to place them in a position which could cause them financial and perhaps even political embarrassment.

As a result of the final screening of the List, a group of some 30 or 40 names of prominent individuals and firms were tentatively selected for inclusion in the category of those names to remain on the List for an indefinite period. Consultations are now taking place with the Costa Rican Government and the British Legation with respect to this List and it is hoped that the Government will be able to furnish an answer to the Embassy within a short period of time.

A further factor involved has been that the constitutionality of the whole expropriation procedure has been contested in the local courts particularly by the Niehaus8 interests although other important groups have also filed suits and while to date the courts have ruled in favor of the government it is possible that at a future date less favorable action might be forthcoming.

Victor C. Heck
  1. Costa Rica’s Junta de Custodia de la Propiedad Enemiga.
  2. See pp. 885 ff.
  3. Guillermo Niehaus and Company.