BLP Newflash: Important changes to El Salvador’s legislation

El Salvador

–December 2017 –

COMMERCE

Regulations of the Special Law for the Defense of Commerce

The President of the Republic published the Regulations of the Special Law for the Defense of Commerce (Reglamento de la Ley Especial de Defensa ComercialRLEDC” in Spanish) with the purpose of developing and ensuring the implementation of the norms and rules established in the Law for the Defense of Commerce. The RLEDC applies to all imports from countries that are members of the World Trade Organization and from countries that are not, when such imports could cause damages or treat to damage any domestic production activity or could delay the creation of a new production activity. Some of the most important aspects of the RLEDC are the following: it establishes several parameters to evaluate the similarities of imported products and to calculate the anti-dumping tariffs; it establishes some rules regarding subsidies; among others. Entry into force: as from eight (8) days after its publication in the Official Gazette.

(Official Gazette number 172 published on September 18, 2017)

ADMINISTRATIVE LAW

Courts of the Contentious-Administrative Jurisdiction

The Legislative Assembly created the Courts and Appellate Courts of the Contentious-Administrative Jurisdiction, which will solve the disputes over administrative law matters, pursuant to the Constitution and the Contentious-Administrative Jurisdiction Law. Entry into force: on January 31, 2018.

(Official Gazette number 174 published on September 20, 2017)

CUSTOMS

Amendment to the Special Law to Sanction Customs Infractions

The Special Law to Sanction Customs Infractions was amended by the Legislative Assembly, whereby the sanction for “transiting out of the established routes or exceeding the custom transit period, without a justified caused according to the Customs Authority´s criteria” was changed. Henceforth, infringers have to pay a US$300.00 fine. Entry into force: As from eight (8) days after its publication in the Official Gazette.

(Official Gazette number 174 published on September 20, 2017)

FINANCIAL SYSTEM

Reforms to the Pension Saving System Law

The Pension Saving System Law was significantly amended by the Legislative Assembly. Some of the most important aspects of this amendment are the following: the contribution rate was increased to 15%, 7.25% of which has to be paid by employees and 7.75% by employers; the survivor pension and the pension for permanent or partial disability were modified; Pension Fund Administrators may managed up to four (4) pension funds for individual saving accounts with different investment regimes; a jointly guarantee account was created, among others. Entry into force: as from eight (8) days after its publication in the Official Gazette.

(Official Gazette number 180 published on September 28, 2017)

TAX

The Provisory Law to Facilitate the Compliance of Tax and Custom Obligations

The Legislative Assembly published in the Official Gazette the Provisory Law to Facilitate the Compliance of Tax and Custom Obligations, in which it was granted a 3-month period, upon the entry into force of said Law, for tax payers to pay main or supplementary taxes managed by the General Direction of Taxes and the Custom General Direction and owed to the National Treasury, which apply for prior tax periods whose payments dates had expired before the entry into force of this Law. Tax debtors who pay and comply with pending tax obligations or submit their tax declarations within the abovementioned period, will be exempted from paying interests, charges and fines in this regard, in accordance with the parameters and terms established in the Law. This Law became effective upon publication in the Official Gazette and has a duration of three (3) months.

(Official Gazette number 196 published on October 20, 2017)

LABOR

Regulation for the obligation of employers to install childcare facilities

The Constitutional Chamber of the Supreme Court of Justice has emitted a final judgement for the accumulated processes of unconstitutionality numbers 8-2015/16-2015/89-2016, through which has declared an unconstitutionality by omission against the Legislative Assembly for omitting the mandate of the article 42, second paragraph, of the Constitution, regarding the regulation of the obligation of employers to install and maintain childcare facilities for their employees.

In consequence, the Constitutional Chamber has ordered the Legislative Assembly to emit a law through which all aspects concerning the installation and maintenance of childcare facilities are regulated, no later than May 31st, 2018.

Elimination of six months period as employee requirement for paid maternity leave

The Constitutional Chamber of the Supreme Court of Justice has emitted a final judgement for the process of unconstitutionality number 105-2014, through which has declared that the requirement of having worked for the same employer during the six months prior to the estimated date of confinement as a condition for pregnant workers to be entitled to a paid maternity leave, as established in article 311 of the Labor Code, is unconstitutional. In consequence, starting on the date of the judgment’s publication in the Official Gazette (expected not later than December 2017), all employers will be under the obligation to provide a paid maternity leave for all their pregnant employees, without any consideration to the time during which they had been working for them.

BUSINESS OPPORTUNITIES

Issuance of Securities

The Government was authorized by the Legislative Assembly to issue securities for an amount up to US$ 168,030,130.00. These securities can be offered in the national or international market. The money obtained through this operation is going to be used to pay public debt according to a ruling rendered by the Constitutional Chamber of the Supreme Court of Justice. This Decree became effective upon publication in the Official Gazette.

(Official Gazette number 180 published on September 28, 2017)