In a large heavy skillet, saute onion in the olive oil until translucent.
Add chopped olives and peppers. Saute 5 minutes.
Add all other ingredients and simmer 5-8 minutes.
Notes: Annatto seed, also known as achiote seed, has a mild flavor and beautiful red color. If you can't find it, you can use mild paprika instead. If you are going to use this sauce for fish, bake the fish right in it. If you plan to serve it as a topping for rice, ladle it onto cooked rice (don't cook them together).