VZCZCXYZ0030
PP RUEHWEB

DE RUEHSJ #1173/01 1692239
ZNY CCCCC ZZH
P 182239Z JUN 07
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC PRIORITY 8304
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 0130
RUEHBO/AMEMBASSY BOGOTA PRIORITY 4061
RUEHMN/AMEMBASSY MONTEVIDEO PRIORITY 0448
RUEHIN/AIT TAIPEI PRIORITY 0072
RHMFISS/HQ USSOUTHCOM MIAMI FL

C O N F I D E N T I A L SAN JOSE 001173 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR WHA/CEN, EAP/CM, CA AND PRM; 
SOUTHCOM FOR FPA 
 
E.O. 12958: DECL: 06/18/2017 
TAGS: PREL PGOV PINR SNAR CVIS XK CS
SUBJECT: COSTA RICA: NORMALIZED RELATIONS WITH CHINA BRING 
ECONOMIC AND IMMIGRATION CONCERNS 
 
REF: A. SAN JOSE 01106 (NOTAL) 
     ¶B. SAN JOSE 868 AND PREVIOUS (NOTAL) 
 
Classified By: ADCM David E. Henifin per 1.4 (d). 
 
¶1. SUMMARY (U) Costa Rica's June 1 recognition of the PRC and 
consequent break in diplomatic relations with Taiwan (Ref A) 
have brought worries about the financing of ongoing 
assistance projects (previously funded by Taiwan) as well as 
immigration concerns at a time when illegal Chinese traffic 
is taxiing immigration authorities.  Greater Chinese 
involvement in Costa Rica may also bring Chinese drug 
trafficking, a point we have raised already with FM Stagno. 
While cabinet ministers (and President Arias) point to 
prospective trade benefits, the Legislative Assembly 
(Asamblea) is scrambling to replace the lost Taiwanese 
funding.  Immigration authorities expect increased arrivals 
of Chinese nationals, and are concerned about possible 
Chinese mafia involvement.  The GOCR was clearly not prepared 
to face the practical consequences of its political decision 
to embrace China. END SUMMARY 
 
NEW FRIENDS, NEW MONEY? 
======================= 
 
¶2.  (U) Costa Rica's partnership with Taiwan included 
financial aid such as low-cost, long-term financing, or 
outright aid, such as capital costs for construction, police 
equipment, vehicles, and motorcycles.  As recently as May 30 
(on the eve of the secret negotiations in Beijing which 
sealed the PRC recognition deal), the GOCR had included in a 
supplemental budget request to the Asamblea the amount of 
7,792 million colones (USD 15,130,000) for construction of 
the Naranjo-Florencia highway, which was predicated on 
Taiwanese funding.  Minister of Finance Guillermo Zuniga 
pulled back the budget request on June 8.  The Asamblea is 
now scrambling to secure loans, or to transfer funds from 
other sources to fill the gap. 
 
¶3.  (U) Zuniga has hinted publicly about a possible credit or 
bond purchase from the Chinese, but cautioned that these are 
only "options"; no firm details have been concluded. 
Minister of Foreign Trade Marco Vinicio Ruiz announced that 
the first Chinese-Costa Rican trade fair might take place in 
October.  President Oscar Arias stressed the trade prospects 
with China, reminding an audience on June 8 that he had long 
noted the importance of free trade agreements with Singapore 
and South Korea, as well as China. 
 
¶4.  (U) Meanwhile, the PRC has moved quickly to fill the 
diplomatic gap voided by Taiwan. Ambassador-designate Wang 
Xiaoyuan arrived from his previous post, Montevideo, on June 
¶13.  Described by the local media as an excellent Spanish 
speaker and a Latin American "expert" with experience in 
Mexico, Brazil, Equatorial Guinea, and Spain, Wang is 
expected to present a copy of his credentials to FM Bruno 
Stagno on June 18.  His official credentialing ceremony with 
President Arias will come later. 
 
OUR CONCERNS:  TRAFFICKING IN DRUGS AND PEOPLE 
============================================= = 
 
¶5.  (C) On the Costa Rican side, Stagno,s Chief of Staff, 
Antonio Alarcon, was dispatched to Beijing to oversee the 
embassy opening there (although we understand he will not 
remain as ambassador).  A confident-sounding Stagno told 
Ambassador Langdale on June 11 that the Arias administration 
expected the controversy about the sudden switch in relations 
to die down in a few weeks.  "The decision has been made," he 
stressed.  Stagno asserted that the recognition timing was 
partly driven by regional dynamics.  The GOCR was under the 
impression that other Central American countries, including 
Nicaragua, were considering recognizing China.  Costa Rica 
did not want to be in the position of "following Nicaragua" 
on this issue.  This was "not just about trade," According to 
Stagno. 
 
¶6. (C) While acknowledging Costa Rica,s right to recognize 
China, the Ambassador noted two concerns.  First, given the 
history of Chinese trafficking in persons to and through 
Costa Rica, normalized relations would likely increase that 
flow.  The GOCR should be vigilant to likely visa fraud. 
 
Second, Chinese drug traffickers are active elsewhere in the 
region, particularly in the methamphetamine trade.  The GOCR 
should be prepared for this as well.  Stagno thanked the 
Ambassador for these warnings. 
 
GOCR CONCERNS: IMMIGRATION 
========================== 
 
¶7.  (C) Immigration Director Mario Zamora told Pol/C and 
Poloff on June 11 that he had no advance warning of President 
Arias,s decision to recognize China.  He immediately grasped 
the potentially negative implications, given Costa Rica,s 
recent history as a trans-shipment point for illegal 
immigrants mostly seeking their way to the United States, and 
as a destination for Chinese workers paid slave wages in 
Costa Rica (Ref B).  They arrive via land, air, or by boats 
from Panama, Colombia, Ecuador and Peru.  Any of the boats 
are not seaworthy and, while they may not necessarily be 
headed to Costa Rica (they prefer landingsin Guatemala to 
continue their trip North) they re found in Costa Rican 
waters or become disable here.  Zamora said there are 72 PRC 
citizens curently awaiting deportation (many of them were 
arivals by boat while some were found in safehouses n Costa 
Rica).  According to Zamora, the GOC hasalready acceded to 
pay for this group of illegalimmigrants to return (by air) 
to China. 
 
¶8. (C Zamora estimates there are at least 10,000 PRC 
ationals legally residing in Costa Rica.  This numbr could 
easily double with the amount of undocumnted illegal 
immigrants or in-transit Chinese. Te increase in illegal 
Chinese arrivals during th four-month period earlier this 
year when Colomba relaxed visa requirements for PRC citizens 
was a troubling case in point.  The influx of PRC citizns to 
Colombia (with repercussions throughout th region) grew more 
thanten-fold during that brief period, according to Zaora. 
Showing us some passports, he added that 23of the Chinese 
nationals currently waiting for dportation from Costa Rica 
had legal entry stampsinto Colombia dated March 2007. 
 
¶9. (SBU) Currenty, PRC travelers to Costa Rica are Category 
4 aplicants, the most restricted requiring a limited(90-day) MFA-approved visa 
to enter Costa Rica. Zaora 
maintains this prerequisite will remain in efect, as it is 
not based on the level of diplomatic relationship.  Haiti and 
Cuba, for example, ar in the same visa category.  Zamora 
anticipates hinese pressure to ease visa requirements (as 
ha already appeared in the local media) and he seemsready 
to stand firm. If the Chinese claim they need additional 
business visas, he said, then CostaRica should see an influx 
of genuine businessmenand investors from China.  Zamora told 
us he hasrequested a meeting with FM Stagno to discuss the 
Chinese visa issue and other immigration implications from 
recognition. 
 
FRAUDULENT ID CARDS, CHINESE MAFIA ALSO WORRISOME 
============================================= === 
 
¶10. (SBU) The illegal Chinese immigrant issue is exacerbated 
by quality problems in the alien identification card issued 
by the GOCR.  Zamora said the original contract was awarded 
to the local representative of a US-based firm, "Lasercard". 
The end product did not meet the GOCR specifications or the 
quality standards of the company resulting in rapidly fading 
photos and vital data in the cards.  (Zamora showed us 
examples.) The faded cards are often passed to illegal 
immigrants who place their photo and data on the same, while 
the legal holder gets a legitimate replacement of his faded 
card.  The result is an active illegal market for these 
 
identifications, which could easily be used by Chinese 
obtaining seemingly legal cards to secure their status as 
immigrants.  Zamora added that the government is currently 
addressing these problems and seeking redress from the 
company. 
 
¶11.  (SBU) The potential involvement of Chinese mafia-type 
smuggling organizations (such as the Han Garcia Clan of 
Mexico) also concerns Zamora.  Should these groups become 
more active in Costa Rica, the result could be more violence 
associated with trafficking. Zamora,s office is working hard 
to identify such groups and/or attorneys involved in the 
illegal immigration trade. Zamora is also well aware of the 
 
lax passport procedures now in effect in Venezuela, which 
could be exploited by Chinese or smuggling organizations 
sending Chinese via airline service from Caracas.     Zamora 
added that in the past, secondary inspection by airport 
immigration officers has been able to detect counterfeit 
travel documents, resulting in exclusion and deportation of 
the travelers. 
 
COMMENT 
======= 
 
¶12. (C) The GOCR was clearly not prepared to face the 
practical consequences of its political decision to embrace 
China.  Like Minister of Public Security Fernando Berrocal 
(Ref A), Zamora was kept in the dark, despite his key 
portfolio.  He is painfully aware of the impending 
immigration problems associated with China,s recognition and 
seems determined to hold his ground.  However, Zamora may be 
unable to resist the political pressure to elevate China 
eventually to a Category 3 country. This would permit Chinese 
with US or EU visas to enter/transit Costa Rica without MFA 
review and a Costa Rican visa, and would not be good news 
from our perspective. 
 
WEITZENKORN