Law 9406, known as the Law of Improper Relations, entered into force on January 13th.
With this law, Costa Rica strengthens the actions taken for the protection of minors, as it will punish with three years in prison for those who have sex or any kind of sexual relation with people under 15 years of age, if the difference between the two persons is five or more years.
This law was approved in October 2016 by the Congress, which agreed on a series of amendments to some articles of the Criminal Law, Family Law, Civil Law and the Organic Law of the Supreme Electoral Court and the Civil Registry.
This initiative is changing a national reality, as only in the year 2015 were received 4,700 complaints regarding sexual relations with minors.
This new law reforms different Laws in Costa Rica, and establishes:
-Prison for adults who maintain sexual relations with minors between the ages of 15 and 18, provided that the adult takes a difference of seven years in age, the penalty will range from two to three years in jail.
– In case of sexual relations with minors between 13 and 15 years, the law punishes the adult with three to six years of jail, when the age difference is of five years or more.
– A punish of 4 to 10 years of prison imprisonment when the perpetrator has in respect of the victim a status of father or mother, uncle or aunt, brother or sister, cousin or cousin by consanguinity or affinity; if he/she is a guardian or keeper; if the person is in a position of trust or authority with respect to the victim or his or her family, regardless of relationship.
-The law, in turn, prohibits marriage between minors or the marriage of a minor to an adult, in an attempt to reduce teenage pregnancy and dropout in the educational system, among other drawbacks that have already been manifested by having previously allowed.
– It also proposes that parental authority to be eliminated when the minor person is in a situation of abandonment, has been subject to rape or sexual abuse from his/her own family member or guardian.
And finally, this new law protects the rights of minors, when they reach the legal age, in terms of the goods and benefits of them that belong to him/her, since it obliges the person who holds the parental authority to surrender them and render the minor person account of the administration of the same.
This law complies with the commitment made by Costa Rica in the Convention for the Rights of the Child to offer special protection to minors until the age of 18.
In December 2016 the Diario Oficial La Gaceta of Costa Rica published an amendment to the Regulation of the Protection Law for the People Regarding the Treatment of their Personal Data, whose objective is to improve the protection of information and the citizen’s rights before an improper use of its personal data.
This law applies to personal information stored in automated or manual databases of either public or private organizations or companies.
Amendments to the Regulation of the Law for the Protection of Personal Data
The amendments to the Regulation of the Law for the Protection of Personal Data seek to better specify the application of Law No. 8968 regarding internal databases, data transfers, outsourcing of the service provider or technology intermediary and financial entities.
Among the most important modifications to the regulation are:
Any file, record or other structured set of restricted or unrestricted personal data, maintained by a person, is considered as a personal or domestic database, as long as the database or their contents are not commercialized, distributed or diffused.
Any file, record or other structured set of restricted or unrestricted personal data, maintained by public or private corporations, is considered as an internal database, as long as the database or their contents are not commercialized, distributed or diffused.
The preservation of personal data that may affect its owner should not exceed 10 years from the ending date of the object for using the data, unless a special disposition that establishes it.
The transfer (of data) will always require the unequivocal consent of the holder. The transfer implies the cession of personal data only and exclusively by the person who transfers to the recipient of the personal data.
El consent to give access to the information can now also be granted using a digital media, which expedites many procedures.
Article 3 was modified, establishing that the databases of financial entities subject to regulation by the Superintendence of Financial Entities (Sugef in Spanish) do not need to register before the Data Protection Agency. Of course, the agency will maintain control of the Data Protection Act (No. 8968) and may exercise the actions allowed by law regarding the databases.
The “super user” figured in database management was suppressed.
If you want to verify other legal concepts related to the Data Protection Act, or improve the way you handle the personal data of your workers, contact ERP Lawyers & Associates, Costa Rica’s most recognized boutique law firm.
Carlos is a worker of a well-known company, who has more than four years working for the same and recently has been victim of harassment from some colleagues, including his supervisor. Carlos still does not know that he is being the victim of harassment at work, and even less that he has a way to defend himself against it.
Work harassment is defined as a series of abusive behaviors that psychologically degrade a worker, harming his/her self-esteem and morale, through harassment and a situation of continued psychological violence. This psychological violence leads to an injury to the dignity and integrity of the worker, creating a hostile, humiliating, offensive and intimidating work environment.
At present, in Costa Rica, there is no specific regulation regarding workplace harassment; however, Law 7476, be it the “Law against Sexual Harassment in Employment and Teaching”, serves as a support for companies to be able to regulate through internal work policies on the issue of labor harassment or sexual harassment.
Procedures for reporting and punishing work harassment in your company
If you are head of a company and know that one of your workers is being victim of harassment at work, you must take a series of measures to regulate this situation internally, in order to carry out a due and equitable process for all the employees, in which, depending on the severity of the fault, the corresponding sanction can be considered.
In addition, the company should focus on providing support and assistance to the employee who is being victim of harassment, as follows:
1. Establish defense mechanisms: Regulate the issue through policies that indicate what to do if you are affected by a topic such as mobbing; define parameters on who and how to go inside the company, always safeguarding the privacy and confidentiality of the case.
2. Define the process: Establish the process internally to carry out the steps once the complaint for harassment has been received; and, in addition, the implications for the harasser in case of being found guilty, as well as for whoever interposes the claim in case of being false.
3. Adopt the necessary measures: After receving the complaint for harassment, execute the necessary protective measures with respect to those involved, such as the separation of physical work spaces or the redistribution of working time, considering the seriousness of the imputed acts and the possibilities derived of working conditions.
The penalties for harassment at work will be applied according to the seriousness of the act and may be the followings: written reprimand, suspension and dismissal, without prejudice to the corresponding instance, when the conduct also constitutes punishable acts, as established in the Criminal Law.
If your company is experiencing a labor harassment situation and you are not clear how to proceed, contact ERP Lawyers where we will give you all the advice, support and guidance necessary to proceed appropriate and in the best way for the benefit of the company and workers involved.
When someone speaks of divorce, people automatically think of time-consuming judicial processes, re-victimization and friction between the spouses. In most cases, that is often the case; however, there is a “peaceful” and more expeditious solution to the complicated moment, which is the divorce by mutual consent.
Application of the Costa Rican Family Code
Article 48 of the Costa Rican Family Code establishes a series of grounds, which must be fulfilled (at least one) to be eligible for divorce. The seventh cause refers to mutual consent. Consent that can be exercised at any time after the marriage is registered. It is done through an agreement before a Notary Public, which, once signed, must be filed before a Family Court for a Judge to be approved.
In order to be able to opt for mutual consent as a cause of divorce, there must be an agreement of wills between the spouses, that is, they must first agree on the divorce, and they must also agree on the following points:
•The custody, upbringing and education of children (if any).
•Visitation regime for minor children (if any)
•The distribution of the assets acquired while married (if any).
•The amount of alimony between spouses and for the children (if any).
About the last point, the spouses can waive the maintenance of one another, but if there are children and these are minors, a child’s support must be entered in the agreement in favor of the children, by the person who does not have the custody.
Benefits for a divorce by mutual consent
Divorce by mutual consent has benefits that none of the other causes offer, since in this case is a non-contentious (non-judicial) process, which means that there is no litigation between the parties, therefore it won’t present the friction of a long and tedious judicial process, which wears both sides. In addition, this cause ensures a quicker divorce as opposed to a judicial process.
If you need assistance or legal advice regarding a possible divorce, we, at ERP Lawyers & Associates, are available to assist you in this process, as we have professionals specialized in Family Law with ample expertise in divorce matters. You can make an appointment through our website or by phone. It will be our pleasure to assist you.
On August 31 of this year, the National Registry issued the guideline 0007-2017, which purpose is to provide some rules on the application to be made by the different Registries in Costa Rica: Real Estate, Movable Property, Corporations, Copyrights, Industrial Property and Registry Services, of the provisions contained in the Law on the Tax on Legal Entities and its respective regulations. The guideline can be summarized in three main aspects.
Verification of the payment of the Tax to Corporations.
Regarding article 5 of the Law on the Tax on Legal Entities, which punishes those companies that do not pay the tax with i) the non-registration of documents granted in their favor; and, ii) the non-issuance of certifications of legal status or certificate of incumbencies; it is stipulated that government employees must consult a database created for this purpose. It is important to mention that the presentation of the documents granted in favor of any corporation who is delayed in the payment of the tax will be CANCELLED.
Exemption from the payment of the transfer tax, stamp duty and registration fees.
As we have already mentioned in another article previously published about Tax on Corporations, Transitory III of said Law grants a 12-month period for companies that have been inactive before the Tax Authority for at least 24 months prior to the law, to transfer assets to other companies or other people, with total exemption of the respective transfer taxes, stamps and registration fees.
It is important to consider that the exemption provided in said Transitory has a validity of 12 months, so it will apply only to documents granted between September 1st, 2017 and August 31st, 2018.
The process of liquidation of companies, dissolved by the National Registry
If the company has been dissolved by the Authorities of the National Registry, an outcome of the liquidation of the companies must be submitted before the National Registry, by testimony of a public deed, regardless of whether said liquidation has been made in court or through a Public Notary. In said deed must appear both the liquidator and the awarded person or people of the assets of the liquidated company and indicate how the distribution of the assets was agreed. The Notary Public in charge must attest of the registration of the liquidator in the Registry of Legal Entities, indicating the corresponding book and entries granted by the National Registry; as well as the authorization of the liquidator to carry out the process. In case of foreign companies, a power of attorney is required by the main company.
Any award must be previously approved by the General Assembly of Shareholders, according to articles 214 and 219 of the Commerce Code, and must be indicated for each asset, property, undivided right, lot, and / or corresponding credit; and the price for which it is was awarded to the respective beneficiary.
Re-registration of dissolved companies?
The Congress is studying a motion submitted to reform the Transitory II of the Law on Taxes to Corporations that would allow the dissolved companies to be registered again by the National Registry, after payment of the amounts owed on taxes due to the previous Tax Law on Corporations.
The National Registry closed, after notifying in the official newspaper (La Gaceta), companies that owed three periods, so that they are no longer registered and are left without legal representation. The motion allows all companies that have been closed and that have paid the corresponding tax debt before December 15th of this year, to submit to the National Registry a request for re-registration under the same conditions and terms that it was at moment of its dissolution. The re-registration will be made by written request of the shareholders who have at least 51% of the shares of the company and must be made in writing through a Notary Public. They will have time until January 18th, 2018 to submit the application for re-inscription, whenever they have paid the amounts owed.
ERP Lawyers & Associates: legal advice on corporate matters.
If you require legal advice on corporate law, ERP Lawyers & Associates offers you an interdisciplinary team of lawyers with extensive experience in this area. Contact us and get personalized legal advice.
Being an employer carries a great responsibility to your workers, so at ERP Lawyers we want you to know the basic regulations of the Labor Code that as an employer you shall accomplish in order to avoid any legal consequences regarding this matter.
Employers’ rights and responsibilities
As expressed in Articles 2 and 3 of the Labor Code:
Article 2: The employer is any physical or legal person, private or public, who employs the services of another or others, under a work contract, expressed or implicit, verbal or written, individual or collective.
Article 3: Intermediary is any person who employs the services of another or others to carry out some work for the benefit of an employer. The intermediary, shall be jointly and severally liable for the management of the employee, for the legal effects that deriving from the Labor Code, its Regulations and the social security provisions.
Therefore, at the moment that a written or verbal employment contract exists, the employer must comply with:
•Grant the minimum wage,
•Insure the employees,
•Give early unemployment warnings and work benefits,
•Pay overtime hours from 48 hours a week, double payment on holidays and disabilities due to pregnancy.
The layoffs must be justified:
According to Article 12 of the aforementioned lawy, employers are prohibited from dismissing their workers or taking any other type of reprisals against them, in order to prevent from seeking the help of the authorities responsible for ensuring compliance with and application of the present Labor Code, its Regulations and its related laws.
It is also important to know what is stipulated in Article 28 regarding the termination of a work contractwithout just cause, giving notice to the other party with the following rules:
a)After continuous work of not less than three months nor more than six, with a minimum of one week in advance.
b)After a continuous work that exceeds six months and is not more than a year, with a minimum of fifteen days in advance; and
c)After a year of a continuous work with a minimum of one month in advance.
Such notices shall always be in a writing; but if the work contract was verbal, the employee may give it in the same way if he does it before two witnesses; and may be omitted, without prejudice to the severance payment, by either party, by paying the other an amount equal to the salary corresponding to the previous periods.
During the term of the notice, the employer will be obliged to grant a day off to the worker, every week, to seek for another job.
Based on the terms of relations between employer and employee, it’s important for you to know what the following two articles stipulate:
Article 32: The employer may expressly or tacitly waive the rights granted by Articles 28 and 31. The waiver shall be presumed by law as long as there is not a claim within thirty days from the date on which the worker terminated the contract.
Article 35: At the expiration of any contract of employment, for any reason that terminates, the employer, at the request of the worker, must give him a certificate that expresses:
a)The dates of its entry and of its departure;
b)The type of work performed;
c)The way he worked; and
d)The reasons for the withdrawal or termination of the work contract.
If an employer fails to comply with, he / she must negotiate an agreement with the employee. In the event that an agreement is not reached, the MTSS is referred to a hearing to seek an agreement; if the agreement is not reached, a lawsuit should be filed.
Remember also that the letter of dismissal is a formality and will always be required to deliver.
Contact an Expert of ERP Lawyers If you have any questions regarding the labor law in Costa Rica.
On September first, 2017, once again, a new Law that imposes a tax on Costa Rican corporationsentered into force; a tax that is not new, because between 2012 and 2015 (until the declaration of unconstitutionality of the law), a similar tax existed.
The collection of the tax applies to all types of Costa Rican corporations (sociedades anónimas, limited liability, collective, etc.) For this 2017, such charge will be partial, equivalent to the months from September to December. Also, as mentioned in a previous article, the collection of the new tax will be estimated, considering the gross income that each company.
• Inactive corporations will be charged a 15% of the base salary of an administrative assistant of the Judicial Branch, according to the established salary every year.
• Active corporations with an annual income below ₡51,144,000 will have to pay 25% of the base salary mentioned above.
• Corporations that report an income between ₡51,144,000 and ₡119,000,000 per year, will pay 30% of the base salary before said;
• And finally, corporations that have an annual income higher than ₡119,000,000 must pay 50% of the base salary of an administrative assistant of the Judicial Branch.
It is important to emphasize that the base salary of a judicial assistant for the year 2017 is ₡426,200.00 (around US $750). Failure to pay this tax on the established dates (during the first month of each year) carries an annual fine of 11.73% of the total tax.
Period established to bring up to date the tax payment
The new Law includes transitory articles that allow delinquent corporations to catch up with the payment of taxes that were not paid with the previous Law.
Transitory II establishes that companies that are in arrears of the tax of the previous law (years 2012 to 2015), will have three months, from the past first of September, to pay the tax without having to pay interest or fines.
If the company does not pay the debt during that period, interest and penalties will be reactivated, which implies that the Registry will not grant certifications of any type, the corporation cannot participate in public offers for the provision of services, won’t be able to carry out transfers of assets, among others.
Exemption in the payment of transfer taxes
According to transitory III, for a period of 12 months from last September 1st, the transfer of real estate and movable property carried out by companies that have been inactive for at least 24 months prior to the validity of the Law, before the tax Authority, will be exempt from the transfer tax, payment of stamps and registration fees;.
If a company fails to pay for three consecutive periods, such default will give ground for the dissolution of the corporation, and both the representatives and the shareholders shall be jointly liable for the tax debt, which shall have preferential mortgage and pledge on the assets of the Company.
Small and medium-size companies registered as such before the Ministry of Economy, and small and medium agricultural producers registered in the Ministry of Agriculture and Livestock, are exempt from the tax. It is important to add that the tax will be now administered by the National Taxation Office and not by the National Registry.
ERP Lawyers & Associates: legal advice on corporate matters
If you require legal advice in the corporate area, ERP Lawyers & Associates offers you an interdisciplinary team of lawyers with extensive experience in this field. Contact us and receive personalized legal advice.
The new law 9428 that establishes the new taxes on corporations is already into force. This law defines the tax amounts that the corporations must pay per year.
With this new law, the percentages of collection change; with the previous version there were only two types of fees: 25% of the montly base salary of a clerk for the inactive corporations and 50% of the monthly base salary for active corporations. Payments are now defined according to the activity of the corporation and the income it receives, as shown in the following chart:
Activity of the Corporation
Tax and Fee percentage
Without economic activity (inactive before IRS Institution)
With economic activity but without income
With economic activity and with a gross income lower than ¢50.880.000
With economic activity and with a gross income between ¢50.880.000 y ¢118.720.000
With economic activity and with a gross income over ¢118.720.000
For the purposes of this new law, the period of payment of said tax (fiscal period) is between January 1st and December 31st of each year, and must be paid, without penalty, within January of every year.
Likewise, this new law grants to the delinquent corporations a grace period of three months from the entry into force, to pay their taxes without the payment Interests or fines that had been imposed. And, to inactive companies, the new law grants a period of twelve months to transfer their assets without the payment of transferable taxes and the payment of stamps and registration fees.
Receive legal advice from ERP Lawyers
ERP Lawyers knows that many of the corporations in Costa Rica are set up for serving as holdings; therefore, with the entry into force of this new law, there are some considerations that should be taken into consideration:
•If you have an inactive corporation and you believe that the tax could become an economic burden, you should assess whether it is better to dissolve it and remove the assets it owns to avoid possible contingencies for the not payment of the taxes..
•If your corporation is active or for some reason you cannot quit to it, you shall keep on time in relation to its taxes to avoid being persecuted for the payment and that the corporation can’t carry out activities because of its delinquency.
If you still have doubts about this matter or don’t know how to proceed, please get advice from ERP Lawyers, the experts in corporate and business law in Costa Rica.
The right to self-determination or right to data protection allows anyone to control the flow of their personal information and decide how they want it to be used, for what purposes, who can access it and how it can be shared.
This is not a new right in Costa Rica, the Constitutional Court had recognized and protected it since the 90s.
Protecting citizens’ data
The Law and the Data Protection Regulation guarantee to all people, regardless of their nationality, residence or domicile, respect for their fundamental rights, that is, their right to self-determination in relation to their life or private activity and other personality rights, as well as the defense of their freedom.
The law applies in Costa Rica for personal data contained in automated or manual databases, from public or private organizations.
There are some terms covered by the law, which give us a better understanding of the regulation:
•Personal data of unrestricted access: contained in public databases of general access.
•Personal data of restricted access: those that even forming part of registries of public access, are not of unrestricted access for being of interest only for its holder.
•Sensitive data: personal or private information about the person, such as religion, sexual preference and marital status.
Collecting personal data
The law and regulations establish that when a person is asked for personal data, it is necessary to inform him/her different aspects, so the person is aware of the use that will be given to that information:
•The purposes for which the data is collected
•The treatment that the data will receive
•The destination of the data
In an upcoming article, we will talk about the amendments to the Regulation of the Personal DataProtection Law which addresses topics related to internal databases and data transfers, among other aspects.
The Costa Rican Commerce Code is one of the most evolved regulations in our Civil Law. For this reason, trade in Costa Rica has received a large amount of foreign investment through contracts equivalent to its foreign versions in other legal systems. A clear example is the trust, which shares the structure and objectives of a USA trust fund.
One of the different types of Trust that the Commercial Code describes is the testamentary trust/probate trust , which is usually recommended for estate planning. Therefore, it is important to understand the probate trust, its benefit for those who can achieve it.
What is the Probate Trust?
The Probate Trust will exist when a person transfers the fiduciary property of certain assets and goods to a third party, who is obligated to exercise it for the benefit of whom is designated as a beneficiary in the same trust. That designated person must comply with the statutes and deadlines filed by the trustor.
The testamentary trust option is more than recommended for those who have investments such as equity, participation in companies and cash deposits, which make the amount of assets increase, and if it is considered that potential heirs don’t have the necessary skills necessary to administer or direct the assets and the invested capital.
Parties of the Probate Trust
The settlor (testator): The testator disposes of his patrimony in a free and conscious way, being necessary for him to have the capacity of enjoyment and exercise.
The fiduciary (executor): The fiduciary is the one who executes the last will of the trustor (testator) after his death, being in this case, an individual or a fiduciary institution (corporation) with capacity to receive in trust. This guarantees that the execution of the trust is made by an institution with experience, technical capacity, moral solvency and permanent duration.
The trustee (heir): Is the person who is entitled to receive the benefits of the testamentary trust.
Probate Execution Procedure
Once the testamentary trust is constituted, at the death of the trustor, the execution of the trusteeoccurs. The fiduciary institution has the responsibility to ensure:
1. That the person holding the trust position is an institution of recognized solvency.
2. The permanence and continuity of the fiduciary work, since the companies have practically unlimited life.
3. That the work of the trustee is carried out by specialized institutions.
4. That the testamentary trust is executed for the benefit of a person, the heir trustee.
If you need assistance with a Testamentary Trust in Costa Rica, at ERP Lawyers & Associates we can assist you with useful legal advice. We are more than willing to help you with this important contract, which ensures the distribution and administration of your assets as available, and everything related to testamentary trusts. You can contact us through our website or by phone and we will gladly assist you.
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Daniela Solano Manager Mundo Acuático
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Adrian Gutierrez CEO JOGO MERCADEO
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