Facilitating Trade through Effective Border Control: Costa Rica's Challenging Reform Agenda

Peñas Blancas, the border post where all overland commerce passed between Costa Rica and Central American countries to the north, was infamously slow and exceedingly congested. Trucks sometimes waited five days or more to pass through the customs post. The inefficiencies also had a real economic cost, as the border crossing was a major contributor to Costa Rica’s national budget through customs-related taxes and duties. Fixing Peñas Blancas had become a major national priority, and the Deputy Minister of Commerce was put in charge of recommending solutions to the congestion problem and improving the collection of taxes and fees. The task was especially complex because of political sensitivities, and the need to reconcile the competing interests of numerous stakeholders. Any solution would have to take into consideration the ways in which government officials, as well as private-sector actors—from exporters to customs brokers to banks—interacted and conducted business at the border-crossing.

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