BLP Newflash: Important changes in legislation in El Salvador 2018

El Salvador

– 2018 –

PUBLIC LAW

Law of Concession of Maritime Terrestrial Public Domain Spaces

This Law establishes the procedures, conditions, the term, and other requirements to obtain a concession of the maritime terrestrial public domain spaces and seaport exploitation by private parties:

  • Scope: The Law will apply to the different projects of private exploitation of the maritime terrestrial public domain space, such as the construction of permanent or floating worksites, the installation of cables in the marine bed and subsoil, exploration platforms, scientific observation stations, buoys for unloading operations by means of underwater pipelines to land facilities, and any other similar infrastructure work.
  • Procedure: Prior to being granted a concession, applicants shall comply with the procedure established by Law, which consists of the following steps: (i) determination of the feasibility of the project, (ii) declaration of public interest, (iii) bidding process, (iv) Legislative Assembly´s approval, and (v) execution of the agreement.
  • Classification of Projects: Projects are divided into three categories, A, B and C. Category A includes private port operations with an investment of more than one million United States dollars or those that have the capacity to serve merchant ships for commercial or industrial purposes. The B category is for those operations that are not included in the first category but that exceed an investment amount of one hundred thousand United States dollars; and the C category is for those that are not included in the first category but do not exceed the aforementioned
  • Authorities: The Maritime and Port Authority of El Salvador will carry out the technical, economic, and financial analysis of the projects. The Ministry of Public Works, Transportation, Housing and Urban Development of El Salvador, through its Special Concessions Unit, will prepare the general bases of the concession and execute the bidding procedure.
  • Requirements and Conditions of the Concession: An application must be submitted to the Executive Director of the Maritime and Port Authority. The term of the concession can be up to fifty years with a possibility to extend it.
  • Special Purpose Company: Prior to signing the contract, the concessionaire must set up a company whose purpose should be to carry out the activities related to the contract.

(Official Gazette Number 43, Volume 418 dated Friday, March 2, 2018. Decree number 906. Entry into force: eight days upon its publication in the Official Gazette).

 

Administrative Procedures Law

The Legislative Assembly enacted the Administrative Procedures Law (Ley de Procedimientos Administrativos, “LOPA” in Spanish), which establishes the formalities and principles that the Public Administration must follow in its proceedings. The LOPA is a significant improvement in the Salvadoran Public Law because it supplies the proper regulations that had been missing. The most important aspects are:

  1. Principles: The LOPA lists the principles by which the Public Administration must abide, including legality, proportionality, relaxation of strict formalities, efficiency, speed, economy, coherence, material truth, and good faith.
  2. Administrative Files: The LOPA provides that each governmental entity must have a file for every procedure it carries out, and establishes rules governing procedural files.
  3. Rights of Interested Parties: Parties of interest in an administrative proceeding have the following rights: (i) to use electronic means to communicate with governmental entities; (ii) to enjoy privacy and confidentially of their personal information; (iii) to have access to information contained in public files; (iv) to be treated with respect and dignity; (v) to file complaints; (vi) to enjoy high standards of public service.
  4. Modernization: The Public Administration must implement technology to improve and optimize its services. Electronic documents issued by governmental entities will be deemed as valid.
  5. Administrative Actions: Administrative actions by government entities must comply with the following requirements:  (i) Government entities must have competence as well as jurisdiction in a matter, and have a budget, cause, purpose, motivation, procedures, and a form of expression;  (ii) Administrative acts will go into effect at the time the interested parties are notified; (iii) Administrative acts shall be immediately enforceable unless otherwise provided.
  6. Administrative Silence: If an application is not answered within the established period of time, it will be deemed as accepted unless the Law indicates otherwise.
  7. Administrative Procedures: Administrative procedures must be carried out within a maximum period of nine months. Interested parties have the right to appeal to the issuing authority within 10 days after a decision is issued. Interested parties can also appeal a decision to a superior authority within 15 days after a decision is issued.

The LOPA will enter into force 12 months after its publication in the Official Gazette.

(Official Gazette number 30 published on February 13, 2018. Legislative Decree number 856.)

 

INTERNATIONAL COMMERCE

Amendment to the Custom Free Zone Law

The Legislative Assembly approved a specific reform of the Law on Free Zones, Industries, and Commercialization in order to clarify the manner in which Customs should treat imported samples. The most important aspects of this amendment are as follows: In the case of samples, their entry and exit within the customs system are entitled to temporary admission for import processing and free zone treatment under the format of an accumulated goods declaration. In case the number of temporary admissions does not exceed 25 usages, the presentation of the accumulated goods declaration must be made within the first five business days of the following month. On the other hand, if temporary admissions exceed 25 usages before the calendar month expires, the referenced declaration must be submitted within five business days after such amount has been reached. In case of non-compliance, the user will be denied the privileges of the provided facility for up to three months.

(Official Gazette number 11, published on January 17, 2018, Legislative Decree number 876. Entry into force:  8 days upon its publication in the Official Gazette).

 

Free Trade Agreement with South Korea

On February 21, 2018, El Salvador, along with other countries in the region, signed a free trade agreement with South Korea. This agreement must be approved by the Legislative Assembly in order to be in full force and effect.

 

LABOR LAW

Special Regulatory Law for the Contracting and Placement of Seafarers in Foreign Ships

A Special Regulatory Law for the Recruitment and Placement of Seafarers in Foreign Flag Vessels was approved, establishing the formalities and principles in the hiring and placement of “seafarers” (mariners) of Salvadoran nationality who work on foreign-flagged vessels in order to guarantee protection of their labor and social rights in the performance of their work assignments through the control of: i) the recruitment and placement agencies of seafarers, ii) the embarkation and debarkation of seafarers, iii) fulfillment of labor contracts and the guarantee of workers’ social security rights.

The ship owners or any other persons who according to the law have the status of an employer are jointly and severally liable in relation to any claims for the breach of conditions of employment of seafarers.

However, the Law will not apply to persons working on: a) warships and auxiliary naval units; b) non-commercial government service vessels; c) industrial fishing vessels; d) recreational or sports vessels not engaged in commerce; and e) wooden vessels of artisanal construction.

(Official Gazette number 43 dated March 2, 2018, Legislative Decree number 914. Entry into force: 8 days upon its publication in the Official Gazette).

 

Reforms to the Labor Code on Violence against Women

Amendments to the Labor Code were made in order to protect women against discriminatory behavior and violence in the workplace. These amendments include new obligations that employers must meet. The two most important are: (i) Show proper respect to employees and avoid any inappropriate behavior such as verbal offenses, sexual harassment, or any behavior against women prohibited by the legislation;  (ii) Grant leave of absence permission when:

  1. An employee has suffered from any act of psychological or physical violence as established in the Special Law to Protect Women against Violence.
  2. An employee has been summoned to collaborate with the authorities in any case related to aggression against women.

(Official Gazette number 40, published on February 27, 2018; Legislative Decree number 900. Entry into force upon its publication in the Official Gazette).