RESTRICTED  
  
WT/TPR/S/344  
10 Au gust 2016  
(16-4257) Page: 1/133 
Trade Policy Review Body   
 
 TRADE POLICY REVIEW  
REPORT BY THE SECRET ARIAT  
EL SALVADOR  
This report, prepared for the fourth Trade Policy Review of El Salvador, has been drawn up by the 
WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement 
establi shing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement 
Establishing the World Trade Organization), sought clarification from El Salvador on its trade 
policies and practices.  
 
Any technical questions arising from this report may be addr essed to Mr Angelo Silvy 
(Tel. 022 739 5249) and Mrs Martha Lara Fernandez (Tel. 022 739 6033 ). 
 
Document WT/TPR/G/344 contains the policy statement submitted by El Salvador.  
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the 
first session of the meeting of the Trade Policy Review Body on El Salvador. This report was 
drafted in Spanish.  WT/TPR/S/344 • El Salvador  
 
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  CONTENTS  
SUMMARY  ................................ ................................ ................................ ........................  7 
1   ECONOMIC ENVIRONMENT  ................................ ................................ ........................  12 
1.1   Production and employment  ................................ ................................ ......................... 12 
1.2   Fiscal policy  ................................ ................................ ................................ ............... 14 
1.3   Monetary and exchange -rate policy  ................................ ................................ .............. 16 
1.4   Balance of payments  ................................ ................................ ................................ ...17 
1.5   Merchandise trade  ................................ ................................ ................................ ......18 
1.5.1    Composition of merchandise trade  ................................ ................................ ............. 18 
1.5.2    Geographical distribution of trade  ................................ ................................ .............. 18 
1.6   Trade in services  ................................ ................................ ................................ ........ 21 
1.7   Foreign direct investment  ................................ ................................ ............................ 22 
1.8   Outlook  ................................ ................................ ................................ ..................... 23 
2   TRADE AND INVESTMENT  REGIME  ................................ ................................ ............  25 
2.1   Legal and institutional framework  ................................ ................................ ................. 25 
2.2   Trade policy formulation and objectives  ................................ ................................ ......... 27 
2.3   Trade agreements and arrangements  ................................ ................................ ............ 29 
2.3.1    WTO ................................ ................................ ................................ ...................... 29 
2.3.2    Regional and preferential agreements  ................................ ................................ ........ 30 
2.3.2.1    Regional trade agreements  ................................ ................................ .................... 30 
2.3.2.2    Central American economic integration and trade relations with Panama  ..................... 32 
2.3.2.3    Association Agreement between Central America and the European Union  ................... 33 
2.3.2.4    Free Trade Agreement between Central America and Mexico  ................................ ......34 
2.3.2.5    Partial Scope Agreement between El Salvador and Cuba  ................................ ............ 34 
2.3.2.6    Free Trade Agreement between the Northern Triangle and Colombia  ........................... 35 
2.3.3    Other trade agreements and arrangements  ................................ ................................ .35 
2.4   Investment regime  ................................ ................................ ................................ .....35 
3   TRADE POLICIES AND P RACTICES BY MEASURE  ................................ ........................  40 
3.1   Measures directly affecting imports  ................................ ................................ ............... 40 
3.1.1    Customs procedures and requirements  ................................ ................................ .......40 
3.1.2    Customs valuation  ................................ ................................ ................................ ...43 
3.1.3    Rules of origin  ................................ ................................ ................................ ......... 44 
3.1.4    Tariffs  ................................ ................................ ................................ .................... 44 
3.1.4.1    Struc ture and levels  ................................ ................................ .............................. 45 
3.1.4.2    Tariff bindings  ................................ ................................ ................................ ......47 
3.1.4.3    Preferential tariffs  ................................ ................................ ................................ .47 
3.1.4.4    Tariff quotas  ................................ ................................ ................................ ......... 48 
3.1.5    Other charges affecting imports  ................................ ................................ ................. 48 
3.1.6    Import prohibitions, restriction s and licensing  ................................ ............................. 51 
3.1.7    Anti-dumping, countervailing and safeguard measures  ................................ ................. 52 WT/TPR/S/344 • El Salvador  
 
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  3.1.8    Technical regulations and standards  ................................ ................................ ........... 53 
3.1.9    Sanitary and phytosanitary measures  ................................ ................................ ......... 56 
3.2   Measures directly affecting exports  ................................ ................................ ............... 59 
3.2.1    Customs procedures and requirements  ................................ ................................ .......59 
3.2.2    Export taxes, charges and levies  ................................ ................................ ................ 59 
3.2.3    Export prohibitions, restrictions and licensing  ................................ .............................. 59 
3.2.4    Tariff and tax concessions  ................................ ................................ ......................... 61 
3.2.4.1    VAT deduction and refund  ................................ ................................ ...................... 61 
3.2.4.2    Repeal of the Export Recovery Law  ................................ ................................ ......... 61 
3.2.4.3    Amendments to the Law on industrial and marketing free zones  ................................ .61 
3.2.4.4    Law on international services  ................................ ................................ .................. 64 
3.2.5    Export promotion  ................................ ................................ ................................ .....66 
3.2.6   Export financing, insurance and guarantees  ................................ ................................ 67 
3.3   Measures affecting production and trade  ................................ ................................ .......68 
3.3.1    Incentives  ................................ ................................ ................................ ............... 68 
3.3.2    Competition policy and price controls  ................................ ................................ ......... 73 
3.3.2.1    Competition policy  ................................ ................................ ................................ 73 
3.3.2.2    Price controls ................................ ................................ ................................ ........ 75 
3.3.3    State trading, State -owned enterprises and privatization  ................................ .............. 75 
3.3.4    Government procurement  ................................ ................................ ......................... 76 
3.3.4.1    Overview  ................................ ................................ ................................ ............. 76 
3.3.4.2    Regulatory framework  ................................ ................................ ........................... 76 
3.3.5    Intellectual property rights  ................................ ................................ ........................ 79 
3.3.5.1    Overview  ................................ ................................ ................................ ............. 79 
3.3.5.2    Institutional and regulatory framework  ................................ ................................ ....80 
3.3.5.3    Enforcement  ................................ ................................ ................................ ......... 84 
4   TRADE POLICIES BY SE CTOR  ................................ ................................ .....................  86 
4.1   Agricult ure ................................ ................................ ................................ ................. 86 
4.1.1    Features  ................................ ................................ ................................ ................. 86 
4.1.2    Agricultural policies  ................................ ................................ ................................ ..87 
4.1.2.1   Institutional framework ................................ ................................ .......................... 87 
4.1.2.2    Policy instruments  ................................ ................................ ................................ .88 
4.1.2.2.1    Border measures  ................................ ................................ ................................ 88 
4.1.2.2.2    Domestic support  ................................ ................................ ............................... 89 
4.2   Energy  ................................ ................................ ................................ ...................... 92 
4.2.1    Electricity  ................................ ................................ ................................ ............... 92 
4.2.2    Hydrocarbons  ................................ ................................ ................................ .......... 95 
4.3   Manufacturing  ................................ ................................ ................................ ............ 96 
4.3.1    Sector outside the free/maquila -zone regime  ................................ .............................. 96 
4.3.2    Free/maquila zones  ................................ ................................ ................................ ..97 WT/TPR/S/344 • El Salvador  
 
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  4.4   Services  ................................ ................................ ................................ .................... 98 
4.4.1   Multilateral commitments  ................................ ................................ ......................... 98 
4.4.2    Financial services  ................................ ................................ ................................ .....99 
4.4.2.1    Overview  ................................ ................................ ................................ ............. 99 
4.4.2.2    Banking  ................................ ................................ ................................ ............... 99 
4.4.2.3    Insurance  ................................ ................................ ................................ ..........  101 
4.4.3    Telecommunications  ................................ ................................ ...............................  103 
4.4.3.1    Overview  ................................ ................................ ................................ ...........  103 
4.4.3.2    Institutional and legislative framework  ................................ ................................ .. 104 
4.4.4    Transport  ................................ ................................ ................................ ..............  106 
4.4.4.1    Overview  ................................ ................................ ................................ ...........  106 
4.4.4.2    Maritime transport and ports  ................................ ................................ ................  107 
4.4.4.3    Air transport  ................................ ................................ ................................ ....... 109 
4.4.4.4    Land transport  ................................ ................................ ................................ .... 111 
4.4.5    Tourism  ................................ ................................ ................................ ................  112 
REFERENCES  ................................ ................................ ................................ ................  115  
5   APPENDIX TABLES  ................................ ................................ ................................ .. 119  
 
CHARTS  
 
Chart 1.1 Non -maquila merchandise tr ade by main products, 2009 and 2015  ............................ 19 
Chart 1.2 Trade in goods for processing (maquila), 2009 and 2015  ................................ .......... 20 
Chart 1.3 Merchandise  trade by trading partner, 2009 and 2015  ................................ .............. 21 
Chart 2.1 El Salvador's participation in RTAs as at December  2015 ................................ .......... 31 
Chart 3.1 Frequ ency distribution of tariff rates, 2015  ................................ .............................. 46 
Chart 3.2 Flow chart for the drafting of technical regulations  ................................ ................... 55 
 
TABLES  
 
Table 1.1 Structure of the economy, 2009 -2015 ................................ ................................ ....12 
Table 1.2. Central government financial account, 2009 -2015 ................................ ................... 15 
Table 1.3.Balance of payments, 2009 -2015 ................................ ................................ ........... 17 
Table 1.4 Balance of trade in services, 2009 -2015 ................................ ................................ .22 
Table 1.5 Balance of foreign dire ct investment by receiving sector, 2009 -2015 .......................... 22 
Table 1.6 Foreign direct investment flows by origin, 2009 -2015 ................................ ............... 23 
Table 2.1 Regi onal trade agreements to which El Salvador is party (as at December  2015)  ......... 31 
Table 2.2 Tariff reduction programmes adopted by El Salvador in the period from 
January  2010 to November  2015 ................................ ................................ ......................... 32 
Table 2.3 Types of investment covered by the Investment Law  ................................ ................ 36 
Table 2.4 Investment activities subject to restrictions  ................................ ............................. 37 
Table 2.5 Term of legal stability contracts  ................................ ................................ ............. 37 WT/TPR/S/344 • El Salvador  
 
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  Table 3.1 Import declarations by type of clearance procedure, 2010 -2015 ................................ 41 
Table 3.2 Post -clearance controls, 2010 -2015 ................................ ................................ .......41 
Table 3.3 MFN tariff structure, 2010 and 2015  ................................ ................................ .......45 
Table 3.4 Brief analysis of MFN rates, 2015  ................................ ................................ ........... 46 
Table 3.5 Analysis of the tariffs applied under trade agreements, 2015  ................................ .....48 
Table 3.6 Taxes on specific products, 2015  ................................ ................................ ........... 49 
Table 3.7 Prohibited imports and imports reserved for the State, 2015  ................................ .....51 
Table 3.8 Goods subject to import permits, authorizations or approval, 2015  ............................ 52 
Table 3.9 Exports subject to controls  ................................ ................................ .................... 60 
Table  3.10 Requirements for becoming established as a free zone beneficiary or inward 
processing warehouse  ................................ ................................ ................................ ........ 63 
Table 3.11 Fiscal incentives in free zones and inward processing warehouses  ............................ 63 
Table 3.12 Law on international services: eligible activities  ................................ ..................... 65 
Table 3.13 BANDESAL: Amount of export loans, 2013 -2015 ................................ .................... 67 
Table 3.14 BANDESAL's principal programmes  ................................ ................................ .......69 
Table 3.15 Lending rates applied by BANDESAL to financial intermediaries for new and 
current lo ans, 2016  ................................ ................................ ................................ ............ 70 
Table 3.16 Activities of the Supervisory Authority for Competition, 2010 -2014 .......................... 75 
Table 3.17 Government procurement statistics by type and method, 2009 -2014 ........................ 76 
Table 3.18 Government procurement methods by subject and by contracting threshold, 
2016  ................................ ................................ ................................ ............................... 78 
Table 3.19 Intellectual property treaties signed by El Salvador, 2015  ................................ .......80 
Table 3.20 Overview of El Salvador's intellectual property legislation, 2015  ............................... 81 
Table 4.1 Principal indicators for the agricultural sector (maquila excluded), 2009 -2014 ............. 86 
Table 4.2 Summary of support measures for the agricultural sector, 2014-2015 ........................ 91 
Table 4.3 Annual cost of the LPG subsidy, 2010 -2015 ................................ ............................. 96 
Table 4.4 Value added in the manufacturing sector (free/maqu ila zones excluded), 2009 -
2014  ................................ ................................ ................................ ............................... 97 
Table 4.5 Main indicators for the free/maquila zones, 2009 -2014 ................................ ............. 98 
Table 4.6 Bilateral air se rvices agreements  ................................ ................................ .........  110 
 
BOXES  
 
Box 4.1 Tax benefits for investment in the energy sector  ................................ ........................ 95 
Box 4.2 Tax con cessions for investment in the tourism sector  ................................ ................  113 
 
APPENDIX TABLES  
 
Table A1. 1 Non -maquila merchandise exports by HS section, 2009 -2015 ...............................  119 
Table A1. 2 Maquila merchandise exports by HS section, 2009 -2015 ................................ ...... 121 
Table A1. 3 Non -maquila merchandise imports by HS section, 2009 -2015 ...............................  122 
Table A1. 4 Maquila merchandise imports by HS section, 2009 -2015 ................................ ...... 124 WT/TPR/S/344 • El Salvador  
 
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  Table A1. 5 Total merchandise exports by trading partner, 2009 -2015a ................................ .. 126 
Table A1. 6 Total merchandise imports by trading partner, 2009 -2015a ................................ .. 127 
 
 
Table A2. 1 Notifi cations submitted to the WTO by El Salvador between 1  January  2010 
and 31  January  2016 ................................ ................................ ................................ ........  128 
Table A2. 2 Bilateral reciprocal investment promotion and protection agreements signed by 
El Salvador , as at December  2015................................ ................................ ......................  130 
 
 
Table A3. 1 Summary analysis of preferential tariffs, 2015  ................................ ....................  131 
 
 
Table A4. 1 Application of agricultural tariff quotas under bilateral trade agreements, 2015  ...... 133 
 WT/TPR/S/344 • El Salvador  
 
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  SUMMARY  
1. El Salvador is a lower -middle income country with a per capita GDP of US$4,000 in 2015. 
It's economy suffered considerably from the global financial crisis, and in spite of its reform efforts 
and its increasing integration in the world economy, its recovery remained sluggish in the years 
that followed. As a dollarized economy, El Salvador has been losing its competitiveness against 
other countries of the region. Real GDP grew at an average annual rate of barely 1 % during the 
period 2009 -2015, well below its potential growth rate which is estimated at about 2 %. Indeed, 
Growth was too slow to improve the population's standard of living or raise the levels of formal 
employment in any sustainable manner. GDP growth accelerated to 2.5 % in 2015 thanks to 
stronger external demand coupled with solid domestic demand, private consumption in particular. 
The lat ter benefited from an increase in real salaries and family remittances from abroad, both 
important sources of financing of domestic demand. In 2015, foreign remittances totalled 
US$4,235  million, equivalent to about 16 % of GDP.  
2. The Central Government defic it shrank during the review period, from 3.7 % of GDP in 2009 
to 1.1 % in 2015. However, the augmented deficit, including pensions and pension trusts, was 
3% of GDP in 2015, partly reflecting  the low tax ratio which was insufficient to offset expenditures. 
Fiscal policy and annual budgets during the review period sought to gradually correct the structural 
factors responsible for the imbalance in public finances. Accordingly, measures were implemented 
to improve tax collection, and these measures, coupled with  a policy of holding down 
non-productive expenditure, were aimed at generating a primary surplus and setting the budget 
deficit and public debt (equivalent to 64 % of GDP in 2015) on a downward trend. At the same time 
a public sector austerity policy was ad opted in order to reduce current expenditure with low social 
content.  
3. The balance -of-payments current account ran a swelling deficit between 2009 and 2013, but 
the gap began to narrow in 2014. In 2015, the deficit totalled US$920  million, or about 3.6 % of 
GDP. The current account balance largely reflects the trend in the merchandise trade balance, 
which deteriorated sharply between 2009 and 2013, recovering somewhat in 2014 and in 2015, 
when it totalled US$4,940  million, i.e. 19.1 % of GDP. Both in 2014 and 2015, the value of 
merchandise imports declined, while the value of exports, which had declined in 2014, recovered 
in 2015. Goods exports grew by almost 50 % between 2009 and 2015, totalling US$4,381  million, 
while imports grew by 45 %, reaching US$9,321  million. Meanwhile, the balance of services was 
increasingly in surplus over the review period, partly reflecting the inclusion of the value added 
from maquila  activities. The current account deficit was offset by the high level of remittances 
from Salvadoran s living abroad.  
4. The structure of El Salvador's exports changed between 2009 and 2015: the percentage 
share of textiles and made -up textile  articles increased from 28.2 % of GDP in 2009 to 37.4 % in 
2015, excluding maquila -related exports. Food industry prod ucts remained the second largest 
non-maquila  export category, followed by plastics, paper and chemicals. Coffee is the leading 
commodity export, although its percentage share of exports fell. In the case of the maquila  
industry, textiles and made -up textile articles remain by far the most important items, accounting 
for 80.2 % of the total exported in 2015. The period under review saw a loss of importance of 
maquila  exports within total exports. The United States and the other members of the Central 
American  Common Market (CACM) continue to be El Salvador's main export markets, together 
accounting for almost 90 % of the country's exports. In the case of imports, in 2015  manufactured 
products accounted for some 75 % of the total, in particular machinery, transpo rt equipment, 
textiles, plastics and chemicals. Fuel imports saw their share of total imports decline, mainly owing 
to the fall in oil prices. The United States remains El Salvador's main supplier country, accounting 
for almost 40 % of imports in 2015. Guat emala was the next most important supplier in 2015, 
followed by China and Mexico.  
5. El Salvador has continued to play an active role in the WTO. During the review period, it was 
party to a dispute settlement procedure for the first time and continued to part icipate as a 
third party in other disputes. It also submitted further notifications under the various provisions of 
the WTO Agreements.  
6. Since the previous review, there have been significant reforms to the institutional 
environment and legal framework for foreign investment. Under the new Investment Law, foreign 
investors, once they have registered, have the same rights and obligations as domestic investors, WT/TPR/S/344 • El Salvador  
 
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  and are entitled to transfer the entirety of their investment funds abroad. During the review 
period , an amendment to the Investment Law was adopted in replacement of the provision on the 
settlement of disputes between private Salvadoran or foreign investors and the State regarding 
investments made in El Salvador. In April  2014 the Law establishing the E xport and Investment 
Promotion Agency of El Salvador (PROESA) was enacted with a view to promoting and attracting 
domestic and foreign private investment and promoting goods and services exports.  
7. Preferential agreements have become an increasingly importan t component of El Salvador's 
trade policy. T he country is a member of  the CACM (together with Costa Rica,  Guatemala, 
Honduras, Nicaragua  and, since 2013, Panama). It is also a member o f DR-CAFTA and the 
Association A greement with the European Union. Togeth er with the original members of the CACM, 
El Salvador negotiated a preferential agreement with Mexico in 2012. It also has agreements with 
Chile, Colombia and Chinese Taipei . El Salvador is currently negotiating , jointly  with the rest of 
Central America, a n FTA with  the Republic of Korea, and is to  begin negotiations with Ecuador. 
According to information from the Central Reserve Bank, El Salvador's 2015 trade flows with 
trading partners with which it has concluded preferential agreements accounted for 94.4 % of its 
total exports and 77.3 % of its total imports.  
8.  Since 2009, El Salvador has pursued its customs modernization efforts, inter alia  through 
the gradual implementation  of a single window for imports, the use of non -intrusive inspection 
equipment, the strengthening of risk management, and the progressive migration to 
ASYCUDA  World. Together with its Central American partners, El Salvador has m oved forward  on 
the electronic exchange of data among customs authorities, and has introduced measures to 
simpli fy formalities  and facilitate  the flow of goods at the border posts . However, the limited 
physical infrastructure and problems of  congestion at customs continue  to pose a challenge. 
El Salvador's Legislative Assembly ratified the WTO Trade Facilitation Agr eement in February  2016. 
At the time of writing of this report, El Salvador had not yet deposited its instrument of ratification 
with the WTO.  
9.  El Salvador applies the Central American Import Tariff (ACI), with a few exceptions. All the 
eleven rates applie d, which range from 0 % to 164 %, are ad valorem . Some 47.8 % of the lines 
carry a 0 % tariff, while 20.7 % have a rate of 15 %, and 15.5 % a rate of 10 %. The simple average 
MFN applied rate remained at 6.3 % in 2015, the same level as in 2009. The simple average MFN 
tariff applied to agricultural products (WTO definition) was 13 %. The highest rate, 164 %, applies 
to imports of poultry meat, while cigarettes are still subject to a 55 % tariff. A rate of 40 % applies 
to products such as sausages, dairy produce, rice, s ugar, rum and ethyl alcohol. The average rate 
applied to non -agricultural products in 2015 was 5.2 %. 
10.  The import and domestic sale of most goods, as well as the supply of services, is subject to 
payment of the property transfer and services tax (known as V AT) at a rate  of 13%. In the case of 
imports, the tax base is the customs value plus tariffs and other applicable taxes, and for domestic 
goods it is the selling price plus the corresponding taxes. Specific taxes have to be paid on some 
domestically -produc ed or imported products, such as alcoholic beverages, alcohol, tobacco 
products, firearms, pyrotechnical products, aerated beverages, juices and soft drinks.  
11.  El Salvador prohibits the import of certain goods, and restricts the import of a considerable 
number of produ cts for reasons of national security , public health, animal or plant health, or 
environmental protection. Permits, authorizations, certificates and/or approval must be obtained 
for their import. In April  2016, El Salvador submitted a notificati on to the WTO relating to the 
Agreement on Import Licensing Procedures.  
12.  During the period under review, El Salvador did not apply any anti -dumping, countervailing 
or safeguard measures or initiate any related investigations. In January  2016, it published the 
Special Law on trade defence which combines the provisions on dumping, subsidies and safeguard 
measures in a single legislative instrument;  specifies the procedures for conducting related 
investigations and the functions  of the investigating authority;  and creates the National Trade 
Defence System, a platform for dialogue between the  public and private sectors to  ensure  the 
trade defence of El Salvador's production sector.  
13.  The institutional framework for the implemen tation of technical regulations  and sanitary and 
phytosanitary (SPS) measures was reinforced with the adoption of the Law creating the WT/TPR/S/344 • El Salvador  
 
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  Salvadoran Quality System (2011) , which established, inter alia , the Salvadoran Technical 
Regulation Agency and the Salvadoran Standardization Agency. T he La w specifies that technical 
regulation s must comply with the provisions of the WTO TBT and SPS Agreements. A t the same 
time, a  handbook of good technical regulation practices was drawn up. The procedure for drafting 
and adopting SPS measure s is the same as that used for technical regulation s. WTO notifications 
of both kinds of measures provide for a period of 60 days in which to forward comments (except in 
the case of emergency notifications). Around 70 % of technical regulations are based on 
international st andards.  
14.  El Salvador pr ohibits or restricts the export  of some products, mainly for environmental or 
public health reasons or to comply with international commitments. Exports of sugar, natural gas 
and certain agrochemical inputs are restricted in order t o ensure an adequate domestic supply. No 
taxes or other levies are imposed on exports.  
15.  El Salvador has substantially modified its export incentive s regime. In 2010, it repealed the 
Export Recovery Law and in 2013 it amended  the Law on industrial and marke ting free z ones 
(LZFIC) in order to comply with its commitments under the Agreement on Subsidies and 
Countervailing Measures. The amen ded LZFIC introduced a fiscal incentives  scheme  based on 
investment and  employment  requirements  and the site of the busine ss, and eliminated export 
performance and local content requirements. T he law on international s ervices, for its part, grants 
tariff and fiscal incentives to domestic  and foreign businesses  that export services and meet the 
minimum investment and employmen t requirements. The institutional framework for the 
promotion of exports was also amended , and greater powers given to the Export and Investment 
Promotion Agency of El Salvador . Finally, t he Development Bank of El Salvador (BANDESAL), 
created in 2012, gran ts credits and guarantees  to exporters , although the amounts involved 
remain modest.  
16. In addition to the programmes to promote exports, the incentives given by El  Salvador to its 
production sector mainly focus on programmes in support of micro, small and me dium-sized 
enterprises (MSMEs), transfer of technology, and programmes to attract investment. Since the last 
review, changes have been made to the institutional and legal framework to stimulate production 
with a  view to boosting economic growth and creatin g jobs . BANDESAL, which may act as a 
first-tier or second -tier bank and can give guarantees, was set up with a view to financing viable 
and profitable investment projects. It finances , either directly or through financial institutions,  
projects for increas ing working capital, technical training, the purchase of machinery and 
equipment , and the building of facilities and physical infrastructure.  
17. During the period under review, the Supervisory Authority for Competition remained 
extremely active, conducting ma rket investigations of telephony services and wholesale 
distribution of white sugar in bulk, among others. The practices sanctioned  concerned agreements 
among competitors (price fixing and collusion between bidders in public bidding procedures) and 
abuse o f a dominant position ( obstacles  to the entry of competitors, restricting sales or 
determining different prices to the detriment of certain economic operators). The Supervisory 
Authority also analysed mergers, and during the period 2010 -2014 refused one ec onomic merger 
and imposed terms on the mode of operation of four others. In 2013, for the first time, the 
Supervisory Authority imposed a fine on an economic operator for failure to notify an economic 
merger. A draft reform of the Competition Law proposing  to broaden the scope of the Law was put 
before the Legislative Assembly.  
18. El Salvador does not have observer status in the WTO Committee on Government 
Procurement and does not plan to accede to the Plurilateral Agreement. The legislation on 
government proc urement was the subject of reforms in 2011 and 2015. These included 
streamlining procurement methods ; modifying and differentiating the thresholds; introducing new 
exemptions to the Law; measures to promote participation by MSMEs; and creating an integrate d 
procurement and contracting system (SIAC). New implementing Regulations came into force 
in 2013 to make it easier to apply the amendments to the Law. Government procurement is open 
to both national and foreign suppliers, who can partic ipate in all modes of procurement. Although 
there are no preferences for domestic suppliers, excep t where the bids are seen to be equivalent, 
government agencies are obliged to award contracts to MSMEs amounting to at least 12% of their 
annual procurement and contracting bud gets. WT/TPR/S/344 • El Salvador  
 
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  19. The main change to the regime for protection of intellectual property rights (IPRs) during the 
review period was the amendment to the Law on trademarks and other distinctive signs. 
This amendment reinforced the status of protection of geographical in dications. In the absence of 
any specific domestic legislation, new varieties of plants are protected by patents, whereas the 
provisions of the TRIPS Agreement are applied directly to layout designs of integrated circuits. 
Control and compliance with intel lectual property regulations are the joint responsibility of several 
government agencies. The Salvadoran courts with jurisdiction in civil and commercial affairs are 
the competent courts for proceeding s initiated by owners of IPRs. The civil penalties laid  down in 
the Law include: immediate cessation of the unlawful activity; prohibition of import, preventive 
seizure, withholding or deposit of the infringing goods; and damages. There is no provision for the 
application of fines for infringing IPRs. The Dire ctorate -General of Customs (DGA) has the 
competence to apply border measures for the enforcement and protection of industrial property 
rights, copyright and related rights. The DGA may act ex officio  where applicable.  
20. The agricultural sector expanded at an  average annual rate of barely 0.5 % between 2009 
and 2015. Although it accounts for about 12 % of GDP, it employs almost 20 % of the country's 
active labour force, and accounts for a quarter of the country's exports. Agricultural production is 
relatively div ersified. Staple grains (maize, sorghum, beans and rice) are the leading products, 
followed by coffee, sugar cane and poultry. There has been a distinct decline in coffee production 
since 2012 owing to the presence of roya (coffee rust). At 12.5 % in 2015, tariff protection on 
agricultural products  (WTO definition) was higher than on non-agricultural products (5.2 %). 
During the review period, El  Salvador applied an annual tariff quota for cheddar -type cheese in 
blocks or slabs. It also used a "scarcity quota s" mechanism as a  provisional measure for alleviating 
shortages of some agricultural products, resulting mainly from the drought in 2014 and 2015. 
Domestic support to the sector is relatively limited and consists above all of credit support, the 
supply of seeds, seedlings and fertilizers, and technical support.  
21. The electricity sector is open to private participation, both domestic and foreign. 
A concession is required only in order to generate electricity from hydraulic or geothermal sources. 
Most electrici ty generation and all distribution is in the hands of private companies, while 
transmission is in the hands of a state -owned operator. During the review period, El  Salvador 
extended and relaxed its tax incentives regime for investment in renewable energy p rojects. 
The subsidy for industrial electricity consumption was abolished i n 2009, and the subsidy for low 
residential electricity consumption was suspended in 2015. El  Salvador imports almost all its fuel. 
There are no limits on the participation of forei gn capital in activities linked with hydrocarbons. 
Maximum prices are fixed for LP G and a subsidy is provided for domestic consumption by the most 
vulnerable segment of the population.  
22. The manufacturing sector grew at an average annual rate of about 2.5 % between 2009 and 
2015, driven by the increase in the value added of production and in exports from the 
manufacturing industry operating outside the free zones. The main products concerned are food 
and beverages, chemicals , and sugar. T he principal  activity in the free zones is the assembly of 
textile products and articles of clothing. Between 2009 and 2015, exports from the free zones as a 
percentage of  total merchandise exports decreased from 24.4 % to 20.3 %. 
23. The Salvadoran banking system is characterized by  good solvency and risk indicators but 
relatively high indebtedness. More than a third of bank credits are for  consumption. Commercial 
presence of foreign banks may be established through branches or representative offices; there is 
no limit on the presenc e of foreign banks provided they have a prime rating. At December  2015, 
10 of the 11 private banks had foreign equity, and accounted for more than 90 % of total assets. 
Foreign insurers may exercise a commercial presence only by setting up companies in El S alvador. 
The establishment of branches is not permitted, although the branch of one foreign company is 
still operating  under earlier  legislation.  
24. In the telecommunications sector, a concession is needed in order to provide  fixed and 
mobile telephony servic es and to exploit the regulated -use spectrum. There are no restrictions on 
the origin of the capital of telecommunications operators except in the case of free -to-air or 
subscription radio and television broadcasting services, which are reserved for Salvad oran 
nationals. During the period under review, El Salvador reformed the sector's legal fra mework by 
adopting Regulations i mplementing the Law on Telecommunications , which govern , among other 
things, the granting of concessions and interconnection between operators. Another amendment 
allows the regulator to conduct an annual review of the maximum tariffs for fixed and mobile WT/TPR/S/344 • El Salvador  
 
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  telephony services and charges for interconne ction;  and finally,  a number portability regulation 
was issued. In 2011, the Supervisory Authority for Competition conducted an ex officio  
investigation and fined a number of telecommunications operators for reaching price agreements.  
25. El Salvador has two sea ports and two airports managed by a s tate entity. The port of 
Acajutla handles almost a ll of El Salvador's maritime cargo, and Monseñor Romero International 
Airport handles all air freight services. El Salvador does not have its own merchant fleet, and 
foreign ves sels may carry out domestic cab otage operations. Domestic and foreign enterpris es 
may participate in the operation  of ports under concessions, and  in the provision of a ncillary port 
services such as cargo handling and warehousing. El Salvador does not have any cargo sharing 
agreements with other countries. There are no limitation s on foreign investment for establishing 
airlines in El Salvador, nor on the participation of foreign capital in Salvadoran airlines. A ir 
cabotage is restricted to Salvadoran firms unless otherwise stipulated in an international 
agreement. The law stipulates t hat the Salvadoran State must practice an "open skies" policy 
subject to the principle of reciprocity. El Salvador has ten bilateral air transport agreements. Land 
transport is vital, since some 42 % of the country's foreign trade is transported by land. El  Salvador 
participates in the Mesoamerican Procedure for the International Transit of Goods, the objective of 
which is to reduce the costs associated with goods traffic by modernizing, simplifying and 
harmonizing customs procedures.  
26. Tourism is a sector of increasing importance for the Salvadoran economy, and the Plan for 
Tourism 2014 -2019 is seeking to turn tourism into a vehicle for sustainable development and 
social inclusion. Tariff and tax exemptions are granted for investments in the sector. There are no 
restrictions on foreign investment through commercial presence in hotels and restaurants, tr avel 
agencies and tour operator  services.  
 WT/TPR/S/344 • El Salvador  
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  1  ECONOMIC ENVIRONMENT  
1.1  Production and employment  
1.1.  No major changes took place in the sectoral composition of El Salvador 's economy during the 
period under review. In 2015 the share of the manufacturing sector, including the maquila 
(in-bond assembly ) industry, in current GDP was 19.5 %, very similar to the figure recorded in 
2009 (19.3 %), but below pre -crisis levels. The sha re of agriculture in GDP declined slightly during 
the review period, from 11.5 % in 2009 to 10.3 % in 2015. Services accounted for 60 % of GDP in 
that year; commerce, restaurants and hotels were the leading subsector, with 20.4 % of GDP in 
2015, followed by go vernment services with 8.7 %, community, social, personal and domestic 
services with 8.2 %, and transport and communications with 7.8 %. 
1.2.  The period under review was one of low growth for El Salvador, whose economy was badly 
hit by the global financial crisis,  from which it struggled to recover in the following years. Real GDP 
grew at an average annual rate of barely 1% during the period 2009 -2015, well below the 3.1% 
indicated in the previous review for the period 2003 -2008 (Table 1.1). This figure is also far  below 
the Latin American average during the period, and lower than the Salvadoran economy's potential 
growth rate, which the IMF estimated at 1.95% annually for the period 1999 -2015, with factor 
accumulation being the main contributor. The IMF noted that total factor productivity was negative 
in recent years, which reduced potential growth, unlike the rest of the region where the 
contribution to potential growth of total factor productivity was positive.1 During the 
2016 Article  IV consultation, the IMF hi ghlighted the challenge for El Salvador of insufficient 
growth, due to complex causes but above all low investment.2 
Table 1.1 Structure of the economy, 2009 -2015  
 2009  2010  2011  2012  2013  2014a 2015a 
Gross d omestic product (GDP)         
GDP at current prices (US$  million)  20,661  21,418  23,139  23,814  24,351  25,054  25,850  
GDP at constant prices (1990 US$  million)  8,954  9,076  9,277  9,452  9,626  9,764  10,003  
Real GDP (annual percentage change)  -3.1 1.4 2.2 1.9 1.8 1.4 2.5 
Per capita GDP (current US$)  3,358  3,458  3,709  3,786  3,838  3,914  4,001  
Share of GDP by activity (% of GDP at current prices)  
Agriculture, hunting, forestry and fishing  11.5 11.6 11.5 10.9 10.1 10.3 10.3 
Manufacturing and mining  19.3 19.1 18.8 18.8 19.1 19.1 19.5 
Electricity, gas and water  2.0 2.1 2.1 2.2 2.1 2.1 2.0 
Construction  3.9 3.6 3.9 3.9 3.9 3.4 3.2 
Commerce, restaurants and hotels  20.0 19.9 19.9 20.2 20.3 20.5 20.4 
Transport, storage and communications  8.0 7.9 7.8 7.9 7.9 7.7 7.8 
Financial establishments and insurance  4.5 4.5 4.6 4.4 4.5 4.6 4.5 
Real estate and business services  4.5 4.5 4.4 4.5 4.6 4.6 4.7 
Housing rental  6.8 6.8 6.5 6.4 6.3 6.3 6.1 
Community, social, personal and domestic 
services  8.3 8.2 7.9 7.9 8.1 8.3 8.2 
Government services  7.5 7.6 8.0 8.1 8.4 8.6 8.7 
Less: imputed bank services  3.6 3.7 3.8 3.7 3.8 3.8 3.7 
Plus: other GDP items  7.4 7.9 8.4 8.5 8.6 8.3 8.3 
Real growth rates (%)         
Agriculture, hunting, forestry and fishing  -2.9 3.1 -2.5 3.5 -0.4 1.3 0.8 
Manufacturing and mining  -3.2 1.8 2.9 1.3 3.1 1.5 3.4 
Electricity, gas and water  -1.1 -0.6 0.5 0.8 1.1 2.2 0.3 
Construction  -2.8 -5.0 8.9 0.3 0.0 -10.7 1.4 
Commerce, restaurants and hotels  -5.4 1.5 2.3 2.6 1.5 2.4 2.8 
Transport, storage and commun ications  -5.9 -0.2 4.6 1.6 1.8 0.8 3.3 
Financial establishments and insurance  -5.4 4.4 3.0 -2.8 4.5 3.4 1.0 
Real estate and business services  -0.2 2.6 2.7 2.8 3.3 3.5 3.7 
Housing rental  0.2 0.5 0.9 0.5 0.8 0.9 0.9 
Community, social, personal and domest ic 
services  1.4 1.6 1.6 2.3 3.0 3.7 2.3 
Government services  1.3 2.1 5.1 2.6 3.3 1.8 1.5 
Less: imputed bank services  -2.6 5.4 3.2 -0.9 3.5 2.5 0.7 
Plus: other GDP items  -3.1 1.4 2.2 1.9 1.8 1.4 2.5 
                                                
1 IMF (2015).  
2 Online information from the IMF, "El Salvador: Staff Concluding Statement of the 2016  Article  IV 
Mission" of 6  May 2016. Viewed  at: https://www.imf.org/external/spanish/NP/ms/2016/050616s.htm . WT/TPR/S/344 • El Salvador  
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   2009  2010  2011  2012  2013  2014a 2015a 
GDP by expenditure category (real growth rate)  
Total d emand  -12.0 4.5 5.4 -0.6 2.8 0.0 2.7 
Final consumption expenditure  -9.2 2.2 2.5 2.4 1.0 1.6 2.0 
Households  -10.3 2.2 2.4 2.4 0.7 1.8 1.7 
Government  5.8 2.2 3.9 2.5 3.7 -0.4 4.7 
Gross capital formation  -19.2 2.4 13.8 -1.4 9.3 -6.4 8.0 
Gross fixed capit al formation  -19.2 2.4 13.8 -1.4 9.3 -6.4 8.0 
Private  -19.7 0.6 15.6 -1.6 10.3 -5.4 8.1 
Public  -15.8 13.9 3.4 -0.3 2.7 -13.2 7.6 
Exports of goods and services  -16.0 11.6 9.3 -7.3 4.8 -0.9 2.4 
Total supply  -12.0 4.5 5.4 -0.6 2.8 0.0 2.7 
Imports of good s and services  -24.8 10.4 10.8 -4.6 4.5 -2.2 3.2 
Monetary indicators         
Consumer price index (annual average, 
Dec. 2009=100)  99.9 101.1 106.3 108.1 108.9 110.2 109.4 
Consumer price index (end of period, 2009=100)  100.0 102.1 107.3 108.1 109.0 109.5 110.6 
Consumer price index variation (%)  -0.2 2.1 5.1 0.7 0.8 0.5 1.0 
Real effective exchange rate (index 2000=100), 
end of period  97.0 98.4 96.9 98.1 98.9 98.8 97.5 
Real effective exchange rate, annual variation  1.8 1.4 -1.6 1.2 0.8 -0.1 -1.3 
Interest  rate on 180 -day deposits (%)  4.5 2.9 1.8 2.5 3.4 3.8 4.2 
Interest rate on loans of up to one year (%)  9.3 7.6 6.0 5.6 5.7 6.0 6.2 
Loans to the private sector, end of period 
(US$ million)  8.639 8.402 8.716 9.223 9.918 10.413 10.466 
Other economic indica tors        
Current account balance (% of GDP)  -1.5 -2.5 -4.8 -5.4 -6.5 -5.2 -3.6 
Monthly family remittances (US$  million)  3,387  3,455  3,628  3,880  3,937  4,133  4,270  
Total external debt (US$  million)  11,307  11,399  11,858  13,353  14,035  14,885  15,482  
Total external debt (% of GDP)  54.7 53.2 51.2 56.1 57.6 59.4 60.0 
Net international reserves (US$  million, end of 
period)  2,983  2,881  2,502  3,173  2,721  2,661  2,670  
Gross national disposable income (US$  million)  23,547  24,509  26,350  26,929  27,442  28,215  29,085 
Gross national disposable income per capita 
(US$)  3,827  3,958  4,223  4,281  4,326  4,408  4,502  
a  Preliminary figures.  
Source:  Central Reserve Bank of El Salvador, and National Institute of Statistics.  
1.3.  GDP growth accelerated to 2.5 % in 2015. This was the  result of stronger external demand, 
particularly from the United States, and higher remittances, as well as the expansion of personal 
credit that allowed a rise in private consumption, also boosted by the increase in real wages.3 In 
addition, in 2015 El S alvador benefited from the low prices of imported raw materials, including oil 
and oil products.4 El Salvador received US$4,270  million in family remittances in 2015, 
3.3% higher than in the previous year. In the first quarter of 2016, remittances totalled  
US$1,045.2  million.5 On the export side, coffee performed very strongly, with an annual growth 
rate of 47.6 % for the first half of 2015, as did sugar (14.5 %), thanks to higher demand from 
China. Maquila posted an annual growth rate of 9.1 %, higher than in  the previous year, with 
exports totalling US$948.2  million, of which 92.6 % went to the United States, primarily clothing  
(72.8 % of maquila exports) and electronic chips (14.2 % of the total).  
1.4.  El Salvador is classified by the World Bank as a lower -middle -income country. GDP per capita 
at current prices increased slightly during the review period, rising from about US$3,358 in 2009 
to US$4,001 in 2015. Net transfers, particularly remittances from the United States, remain an 
important source of financing for domestic private expenditure; as a result, gross disposable 
income per capita is higher than per capita GDP: in 2015, gross disposable income per capita, at 
US$4,502, was 12.5 % higher than per capita GDP.  
1.5.  As pointed out in the previous review, the composit ion of GDP expenditure in El Salvador is 
still characterized by a high level of both private and public consumption. Total consumption 
represented 101.2 % of GDP in 2015, with private consumption accounting for 92.9 % and public 
                                                
3 Real wages rose by 7.2 % in the 12 months to August  2015, compared with a 2.7 % increase in the 
12 months to August  2014. Central Reserve Bank of El Salvador (2015b).  
4 Press release No.  62/2015 of the Central Reserve Bank of El Salvador , Economía salvadoreña crecerá 
2.5% en 2015, crecimiento superior al de los últimos 7 años, December  2015. Viewed at: 
http://www.bcr.gob.sv/bcrsite/uploaded/content/category/948662110.pdf . 
5 Central Reserve Bank of El Salvador (2016a).  WT/TPR/S/344 • El Salvador  
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  expenditure for 8.3 %. Reflect ing the high propensity to consume, the national saving rate in 
El Salvador is relatively low, although it has been rising in recent years to reach 10 % of GDP in 
2014, compared with 7.4 % in 2008. The investment rate was 17.7 % of GDP in 2015; private 
invest ment represented 15.6 % of GDP. Again in 2015, exports of goods and services represented 
40.4% of GDP, and imports 59.3 % of GDP.6 
1.6.  The unemployment rate is estimated at 5.5 % in 2014, lower than the 5.9 % reported in 2013, 
reflecting the slight upturn in the g rowth rate. Nevertheless, these figures mask the importance of 
the informal sector, which employs about 60 % of the labour force, and underemployment, which 
according to IMF estimates affects 28 % of the total  labour force.7 
1.7.  Despite the slow economic growth,  development indicators continued to improve during the 
review period. According to the World Bank, 29.6 % of the population lived in poverty in 2013, 
compared with 37.8 % in 2008.8 The percentage of the population living in extreme poverty (daily 
income les s than US$3.10), fell from 6.3 % in 2008 to 3.1 % in 2013.9 
1.2  Fiscal policy  
1.8.  The Ministry of Finance is responsible for framing and implementing fiscal policy in 
El Salvador. Budgetary policy applicable to the non -financial public sector (NFPS) is set pursuant to 
the Organic Law on State Financial Management.  
1.9.  Fiscal policy and annual budgets during the review period were formulated in conformity with 
the Five-Year Development Plan 2014 -2019.10 Fiscal policy goals in 2014 and 2015 were designed 
to ensure financing  of the Government's social policies and the priorities set out in the Plan. The 
Ministry of Finance thus implemented tax and financial measures to improve tax collection; these, 
together with a policy of holding down non -productive expenditure, are aimed at generating a 
primary surplus, while at the same time pursuing a prudent public borrowing policy so as to set 
the budget deficit and public debt on a downward trend in the medium and long term.  
1.10.   Accordingly, the following fiscal policy goals were set for the 2014 -2019 five -year period:  
 Gradually correct the structural factors responsible for the imbalance in the public 
finances.  
 Generate confidence and predictability concerning the public finances through the 
implementation of fiscal responsibility rules e nsuring a gradual process of fiscal 
consolidation and sustainability in the medium and long term.  
 Improve the quality of public spending in terms of efficiency, effectiveness and 
redistributive impact, protecting investment and social expenditure to benefi t the 
excluded population segments.  
 Develop an honest, effective and transparent administrative culture in the management 
of State resources.  
 Promote a progressive tax policy and the shaping of an equitable and efficient taxation 
system that generates suff icient resources to finance government priorities.  
 Promote a debt policy (external and internal) that should be innovative, sustainable, 
focused on strengthening public investment and social programmes, and in line with the 
country's present and future pay ment capacity.11 
1.11.   In order to achieve these goals, the Government adopted the Public Sector Savings and 
Austerity Policy with the aim of promoting the transparent, honest and efficient administration of 
                                                
6 Central Reserve Bank of El Salvador (2016b).  
7 Underemployment is t aken to mean the proportion of urban employees either working part time or 
receiving a below -minimum wage. IMF (2015).  
8 Online information from the World Bank, El Salvador, 2015 data. Viewed at: 
http://datos.bancomundial.org/pais/el -salvador . 
9 Online information from the World Bank, "Poverty gap at $3.10 per day (2011 PPA) ( %)". Viewed at: 
http://datos. bancomundial.org/indicador/SI.POV.GAP2/countries/SV?display=graph . 
10 Ministry of Finance (2015).  
11 Ministry of Finance (2015).  WT/TPR/S/344 • El Salvador  
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  State resources and reducing current expenditure with l ow social content. The savings obtained by 
these measures are redirected towards strengthening programmes and meeting needs in the social 
area that are essential and unforeseen. Furthermore, in May  2014 a draft fiscal responsibility law 
was submitted to th e legislative assembly, which seeks to achieve an adjustment of 1.5 % of GDP 
over a three -year period, split evenly between current spending restraint and revenue increases. 
Tax measures were adopted in July  2014, including a financial transactions tax, a 1 % tax on net 
assets, the elimination of an income tax exemption on publishing companies, and 
naming -and-shaming of tax delinquency. Further measures are expected, as the IMF staff report 
estimates that these will only deliver a fraction of the promised adj ustment (0.1 -0.2% of GDP in 
the long term).12 The IMF also estimates that a fiscal adjustment of 3.5 % of GDP during 
2015-2017 is needed to achieve debt sustainability.13 
1.12.   The ratio of central government income to GDP has remained relatively low, despite risin g 
from 13.8 % in 2009 to 16 % in 2015 thanks to an increase in tax revenue in the order of 50.2 % 
during 2009 -2015 (Table 1.2). Public expenditure represented 17.1 % of GDP in 2015, less than 
the 17.9 % recorded in 2009. The central government deficit shrank ap preciably during the period 
of the review, from 3.7 % of GDP in 2009 (including grants) to 1.1 % in 2015. However, the deficit 
including pensions and pension trusts was 3 % of GDP in 2015.  
Table 1.2. Central gove rnment financial account, 2009 -2015  
(Cumulative flows in US$  million and  % of GDP)   
 2009  2010  2011  2012  2013  2014  2015a 
GDP at current prices (US$  million)  20,661  21,418  23,139  23,814  24,351  25,054  25,850  
1 Income and grants  2,857  3,215  3,558  3,758  3,960 3,969  4,138  
1.1 Current income  2,774  3,072  3,344  3,588  3,903  3,936  4,093  
1.1.1 Tax revenues (net)  2,609  2,883  3,193  3,434  3,746  3,772  3,919  
1.1.2 Non-tax income  115 164 147 147 147 161 174 
1.1.3 Transfers from public enterprises  25 25 3 8 10 3 1 
1.1.4 Transfers from public financial institutions  24 0 0 0 0 0 0 
1.2 Capital income  0 0 0 0 0 0 0 
1.3 Grants  84 143 214 170 57 33 45 
2 Expenditure and net lending  3,629  3,794  4,082  4,165  4,396  4,359  4,426  
2.1 Current expenditure  3,031  3,114  3,370  3,373  3,655 3,668  3,748  
2.1.1 Remuneration  1,070  1,109  1,279  1,329  1,386  1,467  1,538  
2.1.2 Goods and services  539 587 541 502 630 603 570 
2.1.3 Interest  518 496 508 526 583 598 630 
2.1.4 Transfers to:  905 922 1,043  1,015  1,056  999 1,011  
2.1.4.1  Rest of gener al government  449 470 514 527 607 627 639 
2.1.4.2  Public enterprises  3 1 0 0 1 0 0 
2.1.4.3  Public financial institutions  4 4 5 3 6 5 7 
2.1.4.4  Private sector  444 440 516 481 432 361 354 
2.1.4.5  Rest of world  6 8 7 4 10 5 11 
2.2 Capital expenditure  603 683 718 788 731 695 679 
2.2.1 Gross investment  305 392 365 451 357 296 269 
2.2.2 Transfers to:  297 291 354 337 374 399 410 
2.2.2.1  Rest of general government  234 231 275 279 309 335 350 
2.2.2.2  Public enterprises  1 3 29 2 1 0 0 
2.2.2.3  Public financi al institutions  5 0 1 0 7 0 0 
2.2.2.4  Private sector  57 57 49 57 57 65 60 
2.3 Net lending  -5 -3 -7 4 10 -3 -1 
2.3.1 Rest of general government  -3 -1 -5 -6 -6 -2 0 
2.3.2 Public enterprises  -1 -1 -1 11 17 -1 0 
2.3.3 Public financial institutions  0 0 0 0 0 0 0 
2.3.4 Private sector  -1 -1 0 -1 -1 -1 0 
3 Current saving  -258 -42 -27 215 248 268 345 
4 Primary saving  260 454 481 741 831 866 975 
5 Total surplus – deficit         
5.1 Including grants  -772 -579 -524 -407 -436 -390 -287 
5.2 Excluding grants  -856 -722 -738 -577 -493 -423 -333 
6 Net external financing  757 282 147 922 -4 788 -51 
6.1 Debt disbursement  616 551 397 369 214 371 273 
6.2 Bond placement  400 0 654 800 0 660 0 
6.3 Debt amortization  -259 -269 -903 -247 -219 -242 -324 
7 Net domestic fin ancing  15 297 377 -515 440 -398 338 
7.1 Central Bank  -296 274 200 -739 758 -5 24 
7.2 Commercial banks  269 -41 254 137 -139 -252 353 
7.3 Non-banking system bonds  25 88 -24 101 -184 -97 10 
7.4 Other  16 -24 -52 -13 6 -44 -48 
7.5 Pension system payments  -370 357 406 419 442 467 485 
8 Total cost of pensions and pension trusts  -370 -357 -406 -419 -442 -467 -485 
9 Surplus (deficit) including pensions and pension 
trusts (5.1 -8) -1,142  -936 -930 -826 -878 -857 -773 
Central government debt  8,853  9,203  9,766  10,980  10,816  11,212  11,640  
                                                
12 IMF (2015).  
13 Idem. WT/TPR/S/344 • El Salvador  
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   2009  2010  2011  2012  2013  2014  2015a 
External debt  5,758  6,113  6,282  7,252  7,242  8,179  8,084  
Domestic debt  3,095  3,090  3,484  3,728  3,574  3,033  3,556  
Central government debt as % of GDP  42.9 43.0 42.2 46.1 44.4 44.8 45.0 
Total public debt  11,174  11,778  12,951  14,493 14,888  15,691  16,586  
Public external debt  6,550  6,831  7,142  8,050  8,070  8,960  8,789  
Public domestic debt  4,623  4,947  5,810  6,443  6,819  6,732  7,797  
Total public debt as % of GDP  54.1 55.0 56.0 60.9 61.1 62.6 64.2 
a Preliminary data.  
Source:  Central Reserve Bank of El Salvador.  
1.13.   The fiscal situation continued to improve during 2015 and the central government recorded 
a primary surplus of US$975  million, higher than the 2014 surplus of US$866  million. This is partly 
the result of a 4.3 % increase in tax revenues compared with the previous year, as well as a more 
moderate increase (1.5 %) in expenditure. Debt service in 2014 is estimated to represent 16.3 % of 
income from goods and services, while amortization accounted for 37.4 %.14 Central government 
externa l debt amounted to 31.3 % of GDP in 2015, while the external debt of the non -financial 
public sector (NFPS) represented 34 % and NFPS domestic debt 30.2 %, so that total debt 
amounted to 64.2 % of estimated 2015 GDP.15 This percentage includes the stock of debt  
represented by the Pension Investment Certificates (CIP) issued by the Pension Liabilities Trust 
(FOP) and exceeds the prudential limit of  40% of GDP set in 2004 for NFPS debt.16 Domestic debt 
grew particularly fast during the review period, with an increa se of almost 70 % between 2009 
and 2015.  
1.3  Monetary and exchange -rate policy  
1.14.   The Central Reserve Bank of El Salvador is responsible for the conduct of monetary and 
exchange rate policy. Pursuant to the Organic Law of the Central Reserve Bank of El Salvador, t he 
fundamental purpose of the Central Bank is to ensure currency stability, and its essential goal is to 
promote and maintain the most favourable monetary, exchange, credit and financial conditions for 
the stability of the national economy.  
1.15.   Since the entry  into force on 1  January  2001 of the Law on Monetary Integration (Decree 
No. 2001 of 22  December  2000), the United States dollar has been the currency of legal tender 
and the unit of account of the financial system.17 The Law on Monetary Integration elimina ted 
three of the main Central Bank functions: monetary policy management, lender of last resort to 
the banking system, and currency issuance. However, the Law authorized the Central Bank to fulfil 
other functions, such as managing liquidity reserves and su pplying dollars to the economy.18 As a 
dollarized economy El Salvador cannot conduct an independent monetary policy, and therefore the 
Central Bank's activities are chiefly limited to the management of these two instruments, 
i.e. management of liquidity res erves and open market operations.  
1.16.   Interest rates fell between 2009 and 2011, and then began to climb after 2012 as demand 
for credit strengthened in the private sector. Thanks to the dollarization of the economy, which 
eliminated exchange rate risk, intere st rates have remained at moderate levels. The lending rate 
for loans of up to one year declined from 9.3 % in 2009 to 5.6 % in 2012, rising again to 6.2 % at 
the end of 2015. Although nominal rates were low, real rates were relatively high, particularly in 
2015 when inflation was negative.  
1.17.   Owing to the dollarization of the economy, the Central Bank has little room for manoeuvre 
to influence price levels. Inflation, measured as the average annual variation in the Consumer 
Price Index (CPI), was contained durin g the review period, falling almost continuously from a peak 
of 5.1 % in 2011 to below 1 % between 2012 and 2014 and 1 % in 2015. The CPI trend was partly 
influenced by the fall in world food and raw material prices and the appreciation of the US dollar 
again st other currencies.  
                                                
14 Idem.  
15 Online information from the Central Reserve Bank of El Salvador. Viewed at: 
http://www.bcr.gob.sv/bcrsite/?cdr=97&lang=es . 
16 Central Reserve Bank of El Salvador (2015a).  
17 The Law on Monetary Integration may be viewed at: 
http://www.bcr.gob.sv/bcrsite/uploaded/content/category/1016779392.pdf . 
18 Central Reserve Bank of El Salvador (2009).  WT/TPR/S/344 • El Salvador  
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  1.18.   The real effective exchange rate varied relatively little during the review period, ranging 
between an appreciation of 1.6 % and a depreciation of 1.8 %. The slight real effective depreciation 
observed in 2015 reflects the compensatory e ffect of the fall in domestic prices on the effective 
appreciation of the US dollar against the currencies of El Salvador's main trading partners.  
1.19.   El Salvador does not impose any controls on foreign currency transactions.  
1.4  Balance of payments  
1.20.   The balance -of-payments current account ran a swelling deficit between 2009 and 2013, 
rising from US$312  million to US$1,574  million (Table 1.3). The deficit then narrowed in 2014 to 
US$1,200  million, equivalent to 4.8 % of GDP, and again in 2015 to US$920  million, or 3. 6% 
of GDP. 
Table 1.3.Balance of payments, 2009 -2015  
(US$ million)  
 2009  2010  2011  2012  2013  2014  2015  
1. Current account  -312 -533 -1,112  -1,235  -1,574  -1,200  -920 
Goods and services  -3,198  -3,624  -4,323  -4,395 -4,677  -4,468  -4,155  
Goods  -3,506  -4,022  -4,772  -4,927  -5,295  -5,208  -4,940  
Exports (f.o.b.)  2,924  3,473  4,243  4,235  4,334  4,255  4,381  
Imports (f.o.b.)  6,430  7,495  9,015  9,161  9,629  9,463  9,321  
Services  308 398 449 532 618 739 785 
Receipts  1,292  1,498  1,636  1,867  2,088  2,226  2,330  
Payments  984 1,100  1,187  1,335  1,470  1,487  1,544  
Primary income  -556 -538 -618 -861 -997 -1,050  -1,137  
Compensation of employees  -5 -6 -11 -11 -10 -11 -16 
Investment income  -551 -533 -608 -850 -987 -1,039  -1,121  
 Direct investment  -168 -190 -202 -546 -645 -699 -724 
 Portfolio investment  -166 -156 -185 -176 -216 -218 -280 
 Other investment  -217 -186 -220 -142 -145 -146 -142 
Reserve assets  0 0 0 14 19 24 26 
Secondary income  3,442  3,629  3,830  4,021  4,100  4,319  4,372  
General government  18 94 82 34 27 13 23 
Financial corporations, non -financial 
corporations, households and NPISHs  3,424  3,535  3,747  3,986  4,073  4,306  4,349  
Personal transfers  3,387  3,455  3,628  3,894  3,954  4,195  4,235  
Other transfers  37 80 120 93 119 111 23 
2. Capital account  131 232 266 201 101 64 66 
Capital transfers  131 232 266 201 101 64 66 
General government  57 125 179 126 21 10 8 
Financial corporations, non -financial 
corporations, households and NPISHs  74 107 87 76 80 54 58 
3. Net lending (+) /net borrowing ( -) 
(balance of current and capital accounts)  -181 -301 -845 -1,034  -1,473  -1,136  -854 
4. Financial account net lending (+)/net 
borrowing ( -) 512 -264 -1,190  -1,379  -1,364  -552 -954 
Direct investment  -366 226 -218 -484 -176 -274 -429 
Equity and investment fund holdings  -241 -274 -171 -532 -148 -338 -320 
Debt instruments  -125 500 -48 49 -29 64 -109 
Portfolio investment  -747 121 -99 -871 -14 -789 -19 
Equity and investment fund holdings  -349 -4 5 -7 0 0 2 
Debt securities  -398 125 -103 -863 -14 -789 -21 
Financial derivatives  0 0 0 0 0 0 0 
Other investment  1,203  -315 -459 -676 -848 544 -649 
Reserve assets  423 -296 -414 651 -327 -33 113 
5. Errors and omissions  693 37 -345 -346 109 584 -230 
Memorandum         
Current account (% of GDP)  -1,5 -2,5 -4,8 -5,2 -6,5 -4,8 -3,6 
Total external debt (US$  million)  11,307  11,399  11,980  13,353  14,035  14,885  15,482  
Direct foreign investment in El Salvador (net)  366 -230 219 482 179 311 429 
Gross international reserves (US$  million)  2,987  2,882  2,503  3,175  2,745  2,638  2,670  
Source:  Central Reserve Bank of El Salvador.  
1.21.   The merchandise trade balance, traditionally in deficit, deteriorated sharply between 2009 
and 2013 before improving slightly in 2014 and more appreciably in 2015, when it totalled 
US$4 ,940 million or 19.1 % of GDP. The deterioration during 2009 -2013 reflected the fact that 
imports grew somewhat more rapidly than exports (excluding maquila); however, this trend was 
reversed in 2014 and strengthened in 2015. In both of these years imports of goods shrank in 
comparison with the previous year while exports, which had declined in 2014, recovered in 2015. 
Exports grew by 49.8 % between 2009 and 2015, totalling US$4,381  million, while imports grew by WT/TPR/S/344 • El Salvador  
- 18 - 
  45%, reaching US$9,321  million. Meanwhile, the  balance of services has been increasingly in 
surplus over the review period (see below).  
1.22.   The current account deficit has continued to be offset by the high level of current transfers, 
mainly in the form of remittances from Salvadorans living abroad. Forei gn remittances totalled 
US$4,235  million in 2015, equivalent to 16.4 % of GDP, compared with US$3,387  million 
(16.4 % of GDP) in 2009.  
1.23.   The balance -of-payments financial account has run a deficit since 2010, reflecting the rise in 
net borrowing. Foreign direc t investment flows have been relatively low. The net international 
reserves of the financial system stood at US$2,670  million at end 2015, or the equivalent of 
3.4 months of imports.  
1.24.   At 31  December  2015, the total external debt stock amounted to US$15,482  million 
(59.9 % of GDP).19 
1.5  Merchandise trade  
1.25.   El Salvador's merchandise trade continued to grow during the period under review, with a 
loss of importance of maquila exports within total exports. Non -maquila exports rose from 
US$2,921  million in 2009 to US$4,3 81 million in 2015, while the growth of maquila exports was 
rather more moderate, from US$945  million in 2009 to US$1,122  million in 2015. Total exports 
amounted to US$5,493  million. During this period, imports c.i.f., excluding maquila -related 
imports, ro se from US$6,721  million in 2009 to US$9,741 in 2015, an average annual growth rate 
of 6.4 %. The value of imports far exceeded that of exports throughout the review period.  
1.5.1   Composition of merchandise trade  
1.26.   Charts 1.1 and 1.2 and Tables A1.1 to A1.4 show th e composition of trade during the period 
under review. The structure of El Salvador's exports changed during 2009 -2015, as the percentage 
share of textiles and made -up textile articles  increased from 28.2 % in 2009 to 37.4 % in 2015, 
excluding maquila -relate d exports. In the case of maquila industry, textiles and made -up textile 
articles  remained by far the most important in terms of exports, accounting for 82.5 % of the total 
in 2015, up from the 79.6 % posted in 2009. Food industry products remained the secon d largest 
non-maquila export category, representing 17.4 % of the total in 2015 compared with 18.6 % in 
2009. These are followed by plastics, paper and chemicals, with 7.8 %, 6.7 % and 6.4 % of 
non-maquila exports respectively in 2015. Coffee remains the leadin g individual commodity 
export, although its percentage share of exports during the period fell from 7.9 % in 2009 to 3.4 % 
in 2015.  
1.27.   Manufactured goods remain the leading category on the import side, with 75 % of the total 
in 2015. Machinery, transport equipme nt, textiles, plastics and chemicals account for a large share 
of manufacturing imports (Table A1.4). Imports of mineral products, chiefly fuels, had a declining 
share in total imports, from 16.9 % in 2009 to 15 % in 2015, mainly because of the fall in oil p rices.  
1.5.2   Geographical distribution of trade  
1.28.   El Salvador's main export markets (excluding maquila) continue to be the other members of 
the Central American Common Market (CACM) and the United States (Chart 1.3 and Table A1.5). 
Within the Central American regi on, Honduras became the leading destination for El Salvador's 
exports, taking 13.9 % of the total in 2015, compared with 13.4 % in 2009, followed by Guatemala, 
with 13.5 % in 2015 (14.0 % in 2009) and Nicaragua with 6.6 % (5.5% in 2009). Taken as a whole, 
the C entral American region increased its share of Salvadoran exports from 39.3 % of the total in 
2009 to 40.8 % in 2015. The United States, whose share was practically unchanged, remains the 
main destination for El Salvador's exports, with 47 % of the total.  
1.29.   The United States also remains El Salvador's main supplier country. Its importance as a 
source of imports increased over the period under review, accounting for 39.4 % of imports 
(excluding maquila) in 2015 compared with 36.1 % in 2009. Guatemala was the next mo st 
                                                
19 Central Reserve Bank of El Salvador (2016b).  WT/TPR/S/344 • El Salvador  
- 19 - 
  important individual supplier of El Salvador in 2015, with 9.6 % of the total, followed by 
China  (8.1%) and Mexico (7.3 %). The Central American region as a whole accounted for 21.2 % of 
total imports (Table A1.6). The share of imports from the European Un ion was 6.4 %, led by 
Germany, Spain and Italy.  
Chart 1.1 Non-maquila merchandise trade by main products, 2009 and 2015  
2009 2015
(a)    Exports
Total: US$2,921 million
(b)    Imports
Total: US$6,721 million Total: US$9,741 millionTotal: US$4,373 millionPaper and 
paperboard
7.8%Other
15.1%
Textiles
28.2%Other
12.4%
Minerals
16.9%Paper and 
paperboard
6.7%Plastics
7.8%
Vegetable 
products
6.0%Food industry 
products
8.8%
Chemicals
12.9%
Plastics
6.1%Machinery 
and electrical 
appliances
14.9%Other
20.0%Vegetable 
products
4.7%
Minerals
15.0%
Chemicals
11.9%
Plastics
7.0%Base metals
6.1%Machinery 
and electrical 
appliances
15.2%Other
19.8%
Base metals
5.3%
Textiles
9.1%Food industry 
products
8.7%
Textiles
11.6%Vegetable 
products
10.2%Vegetable 
products
6.0%
Food industry 
products
18.6%Food industry 
products
17.4%
Chemicals
6.4%
Chemicals
7.2%
Textiles
37.4% Plastics
6.6%Base metals
6.0%
Base metals
6.2%
 
Source:  WTO Secretariat estimates, based on data from the Central Reserve Bank of El Sal vador.  WT/TPR/S/344 • El Salvador  
- 20 - 
  Chart 1.2 Trade in goods for processing (maquila), 2009 and 2015  
2009 2015
(a)    Exports
Total: US$945 million
(b)    Imports
Total: US$605 million Total: US$675 millionTotal: US$1,112 millionMachinery 
and electrical 
appliances
14.4%Other
0.9%
Textiles
79.6%
Plastics
6.8%Other
3.2%
Base metals
7.5%Textiles
82.5%Machinery and 
electrical 
appliances
14.3%
Chemicals
4.0%
Textiles
65.3%Machinery 
and electrical 
appliances
6.5%Other
11.6%Plastics
8.1%Chemicals
5.4%
Textiles
69.1%Machinery 
and electrical 
appliances 
3.6%Other
6.4%
Base metals
5.8%Food 
industry 
products
5.1%
 
Source:  WTO Secretariat estimates, based on data from the Central Reserve Bank of El Salvador.  WT/TPR/S/344 • El Salvador  
- 21 - 
  Chart 1.3 Merchandise trade by trading partner, 2009 and 2015  
2009 2015
(a)    Total exports
Total: US$3,866 million
(b)    Total imports
Total: US$7,325 million Total: US$10,415 millionTotal: US$5,485 millionHonduras
13.4%Other
0.8%
United 
States
46.6%Nicaragua
6.6%Other 
Americas
5.8%
Costa Rica
3.5%
Mexico
7.5%Americas
93.8%United 
States
47.0%Other 
Americas
5.8%
Costa Rica
4.5%Other
0.2%Asia
3.1%
Americas
91.8%Asia
1.6%
United 
States
36.1%
Other 
Americas
16.3%
Costa Rica
3.1%Nicaragua
2.7%Japan
1.4%
China
4.6%Other 
Asia
4.5%Other
0.8%
United 
States
39.4%
Mexico
7.3%Other 
Americas
8.6%
Nicaragua
2.3%
Costa Rica
2.5%China
8.1%Other 
Asia
7.2%Other
0.9%
Americas
80.7%Americas
75.4%Europe
8.1%
Europe
6.9%Asia
10.4%Asia
16.8%Japan
1.5%Europe
5.8%Europe
2.9%
Nicaragua
5.5%
Honduras
13.9%
Guatemala
10.3%Guatemala
9.6%Guatemala
14.0%Guatemala
13.5%
Honduras
4.8%Honduras
5.7Panama
2.9%Panama
2.3%
 
Source:  WTO Secretariat estimates, based on data from the Central Reserve Bank of El Salvador.  
1.6  Trade in services  
1.30.   El Salvador's balance of trade in services ran a surplus throughout the period under review. 
The surplus has been increasing since 2009 to reach US$785.3  million in 2015, the equivalent of 
3% of GDP. This performance is largely due to the growing surplus in the "travel" category and the 
inclusion of the value added from maquil a activities in the statistics, in the category 
"manufacturing services on physical inputs owned by others". The balance shows deficits in most 
of the other service categories with the exception of "telecommunications, informatics and 
information services"  and government services (Table 1.4). The largest deficits are in insurance 
and financial services.  WT/TPR/S/344 • El Salvador  
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  Table 1.4 Balance of trade in services, 2009 -2015  
(US$ million)  
 2009  2010  2011  2012  2013  2014  2015a 
Balan ce of services  308.3  398.3  449.1  532.0  618.1  740.7  785.3  
Credit  1,292.2  1,498.0  1,636.0  1,866.8  2,087.5  2,226.3  2,329.7  
Manufacturing services on physical 
inputs owned by others  368.5  447.2  472.8  424.4  439.8  374.6  463.9  
Maintenance and repairs  60.8 74.8 90.0 105.6  122.8  111.4  119.2  
Transport  276.4  304.4  381.8  419.0  515.9  554.5  492.0  
Travel  319.3  390.0  414.9  558.0  621.2  821.4  817.1  
Construction  24.9 18.3 13.8 10.5 13.4 7.6 16.4 
Insurance and pensions  57.1 29.3 28.1 49.0 64.4 38.7 28.3 
Financial servi ces 0.9 3.0 5.3 25.1 24.6 26.6 39.2 
Charges for the use of intellectual 
property  0.4 0.4 0.3 17.7 29.5 19.1 29.1 
Telecommunications, computer and 
information services  137.0  168.9  146.5  157.9  146.5  170.6  184.1  
Other business services  17.6 29.6 24.8 38.2 40.6 40.1 74.0 
Personal, cultural and recreational 
services  0.1 0.0 0.0 0.1 0.1 0.0 0.0 
Government goods and services  29.1 32.2 57.6 61.5 68.8 61.6 66.3 
Debit  983.9  1,099.6  1,186.9  1,334.8  1,469.4  1,485.6  1,544.4  
Maintenance and repairs  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Transport  30.8 29.8 36.7 67.1 42.9 58.6 47.4 
Travel  450.4  466.7  523.8  550.7  612.7  577.9  619.4  
Construction  186.7  218.9  202.6  260.9  242.1  248.2  294.1  
Insurance and pensions  10.3 6.3 7.1 15.1 62.4 16.5 32.6 
Financial services  124.5  125.5  145.1 103.7  132.5  157.7  134.7  
Charges for the use of intellectual 
property  7.8 7.8 10.6 109.5  131.8  156.9  151.4  
Telecommunications, computer and 
information services  26.1 31.5 39.9 54.7 71.6 68.6 70.4 
Other business services  26.9 40.4 77.0 46.4 36.7 44.0 39.0 
Personal, cultural and recreational 
services  88.3 126.0  108.7  92.6 95.1 103.3  106.5  
Government goods and services  0.6 1.3 0.9 0.7 1.3 1.0 1.9 
a Preliminary figures.  
Source:  Central Reserve Bank of El Salvador.  
1.7  Foreign direct investment  
1.31.   The stock of foreign investment in El Salvador amounted to US$9,158  million at end 2015, 
of which US$3,219  million went to the financial sector, 2,415  million to manufacturing, 
1,358  million to the telecommunications sector and 899  million to the electricity sector (Table 1.5). 
Commerce was also an important sector for foreign direct investment (FDI) inflows. Net flows of 
FDI during the review period amounted to US$1,462.8  million.  
Table 1.5 Balance of foreign direct inv estment by receiving sector, 2009 -2015  
(US$ million)  
 2009  2010  2011  2012  2013  2014a 2015a 
Agriculture  2.7 0.0 0.0 0.0 0.0 0.0 0.0 
Mining  43.5 44.3 43.7 41.1 47.5 48.6 50.0 
Manufacturing  1,764.0  1,723.5  1,894.8  1,889.9  2,063.2  2,150.2  2,415.5  
Electrici ty supply  1,029.2  1,083.2  1,080.1  1,121.1  1,092.4  935.4  898.9  
Construction  19.2 21.1 21.6 22.8 24.9 22.0 66.4 
Wholesale and retail trade  622.3  485.0  575.1  636.4  668.5  676.8  730.9  
Transport and storage  11.3 21.4 28.8 36.2 34.7 36.9 36.1 
Information and communications  1,279.4  944.2  916.0  1,285.2  996.4  1,333.9  1,358.2  
Financial and insurance activities  2,756.7  2,736.2  2,705.8  2,907.1  3,043.4  3,097.5  3,219.4  
Other sectors  167.2  224.8  229.1  258.1  293.1  238.3  382.9  
Total  7,695.6  7,283.6  7,494.9  8,197.8  8,264.0 8,539.6  9,158.4  
a Preliminary figures.  
Source:  Central Reserve Bank of Salvador.  WT/TPR/S/344 • El Salvador  
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  1.32.   The United States is the leading foreign investor in El Salvador, with investments totalling 
US$2,640  million in 2015 (Table 1.6). Other major investors were Panama, Mex ico, Colombia and 
Spain, these last three countries representing almost the entire net investment flows received by 
El Salvador between 2009 and end 2015.  
Table 1.6 Foreign direct investment flows by origin, 2 009-2015  
(US$ million)  
 2009  2010  2011  2012  2013  2014a 2015a 
Central America  253.8  245.0  263.9  305.7  339.8  396.3  391.8  
Costa Rica  68.7 25.7 80.7 46.5 90.1 76.2 74.5 
Guatemala  184.7  223.0  186.1  217.5  209.3  262.2  269.5  
Honduras  13.7 9.6 9.8 56.5 55.8 63.6 57.2 
Nicaragua  -13.3 -13.3 -12.7 -14.8 -15.3 -5.8 -9.3 
Other Americas  6,314.8  6,173.9  6,314.3  6,650.6  6,909.7  6,940.0  7,393.1  
Bahamas  130.0  141.7  137.2  19.5 19.3 19.1 19.0 
Bermuda  19.0 7.9 29.1 31.3 47.7 22.1 21.0 
Brazil  10.2 11.1 14.1 14.7 15.0 14.7 12.7 
Canada  213.2  214.6  197.1  221.8  252.5  268.5  281.4  
Chile 2.1 2.4 2.6 1.8 1.2 1.0 0.4 
Colombia  37.6 41.8 35.1 685.4  735.7  706.4  763.2  
United States  2,443.1  2,301.7  2,338.2  2,385.3  2,313.2  2,423.9  2,639.8  
Cayman Islands  56.5 15.8 34.8 44.9 37.5 37.8 6.9 
Virgin Islands  498.5  491.9  504.3  494.8  379.1  377.8  393.2  
Mexico  821.3  751.2  799.1  993.2  1.006.6  971.6  973.3  
Panama  2,077.6  2,180.4  2,211.3  1,731.1  2,053.8  2,054.2  2,230.2  
Peru 5.8 13.6 11.5 26.8 48.3 42.8 52.0 
Europe  954.0  622.3  598.3  824.0  859.5 984.6  1,134.3  
Germany  94.1 94.4 84.1 93.3 104.6  116.2  96.7 
Belgium  7.8 10.6 14.0 9.4 8.5 6.8 10.4 
Spain  285.7  244.7  212.4  230.9  401.0  549.8  842.8  
France  22.0 24.5 20.8 4.2 4.2 4.2 4.2 
Netherlands  149.5  147.0  170.3  281.6  92.4 72.3 66.5 
Italy 113.1  114.0 144.1  167.0  168.8  0.2 47.7 
Luxembourg  256.7  -52.1 -92.9 -7.6 34.7 191.9  -1.9 
New Zealand  11.2 12.4 0.0 0.0 0.0 0.0 0.0 
Czech Republic  0.1 2.5 1.7 0.8 -4.1 1.1 0.7 
Sweden  0.4 4.7 7.3 9.1 6.2 6.9 9.7 
Switzerland  13.5 19.6 36.5 35.3 43.3 35.2 57.7 
Asia 176.3  80.1 59.4 68.0 85.8 218.7  239.2  
Republic of Korea  18.4 19.2 13.5 17.9 22.2 26.1 28.1 
Japan  31.5 31.5 36.0 35.9 48.8 38.4 44.4 
Singapore  90.1 4.2 3.9 3.9 3.9 3.9 4.0 
Chinese Taipei  36.3 25.2 6.0 10.3 10.9 17.0 18.4 
Other countries  -3.4 162.3 259.0  349.6  69.2 133.3  144.4  
Total  7,695.6  7,283.6  7,494.9  8,197.8  8,264.1  8,539.6  9,158.4  
a Preliminary figures.  
Source:  Central Reserve Bank of El Salvador.  
1.8  Outlook  
1.33.   In April  2016 the IMF forecast GDP growth of 2.5 % for 2016, slightly higher than the 2.3% 
in 2015, and a positive trend in the CPI in the order of 1.2 %, following a decrease of 1.2 % in 
2015.20 The IMF revised this estimate in May to 2.3 % in 2016 and 2.4 % in 2017, thereafter 
declining to 2 % in the medium term. It estimated the budget deficit  at 4% of GDP  in 2016  and 
recommended fiscal consolidation in order to prevent public debt from continuing to increase.21 For 
its part, the Central Reserve Bank of El Salvador is forecasting GDP growth of between 2.1 % and 
2.6% for 2016, between 2.3 % and 2.7 % for 2017, and between 2.4 % and 2.7 % for 2018, rates 
that are above the country's growth potential.22 The authorities trust that El Salvador will thus be 
able to escape from the "low growth trap" in which it has been ensnared in recent years.  
                                                
20 Online information from the IMF. Viewed at: http://www.imf.org/external/country/SLV/index.htm . 
21 Online information from the IMF, "El Salvador: Staff Concluding Statement of the 2016 Article  IV 
Mission" of 6  May 2016. Viewed at: https://www.imf.org/external/spanish/NP/ms/2016/050616s.htm . 
22 Central Reserve Bank of El Salvador (2016b).  WT/TPR/S/344 • El Salvador  
- 24 - 
  1.34.   In the longer  term, the authorities have set the goal of achieving sustainable growth of 3 % 
through the implementation of broad structural reforms to improve productivity and attract 
investment. These measures include economic diversification, cutting red tape, better access to 
financing, improved access to cheaper energy, greater physical and legal security, and 
modernization of physical infrastructure. The Five -Year Plan 2014 -2019 aims to  promote job 
creation, education and security. In the economic field, the Plan id entifies the need to change 
El Salvador's economic model from an agro -exporting economy to one based on innovation and 
services. Recognizing the country's low investment and saving rates and the fact that it consumes 
more than it produces, the authorities have diagnosed that El Salvador urgently needs a new 
economic and development model based on rising rates of private and public investment, and 
focusing on activities with higher productivity and value added, relying on innovation to generate 
formal -sector  employment, better remuneration, export diversification and a broader domestic 
market.23 
1.35.   The Government also intends to underpin action under the Five -Year Plan by implementing 
the FOMILENIO II project, whose goal is to reduce poverty through economic grow th by raising 
productivity and competitiveness in international markets. FOMILENIO II is a US$365.2  million 
programme that will be financed by a grant of US$277  million from the United States Government 
through the Millennium Challenge Corporation (MCC) an d a contribution of US$88.2  million from 
the Salvadoran Government.24 The authorities have indicated that they are currently working on a 
human capital development project to establish a National Technical and Vocational Training 
System (SNFTP) that will na rrow the gap between labour supply and demand. Projects have also 
been identified to improve the investment climate and promote public -private partnerships (PPP), 
and a project to expand the highway infrastructure is at the design stage.  
 
                                                
23 Government of El Salvador (2014).  
24 Online information from the Office of the President of the Republic o f El Salvador, Technical and 
Planning Secretariat, FOMILENIO II: Configuration. Viewed at: 
http://www.secretariatecnica.gob.s v/configuracion -de-fomilenio -ii. WT/TPR/S/344 • El Salvador  
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  2  TRADE AND INVEST MENT REGIME  
2.1  Legal and institutional framework  
2.1.  There have been no major changes to the legal and institutional framework since the 
previous review. The State's government functions are discharged by the Legislative, Executive 
and Judicial Branches. The Legi slative Branch, a unicameral body comprising the Legislative 
Assembly, is composed of deputies elected by di rect suffrage every three years.1 On a basis 
proportional to the number of inhabitants, they represent the various departments into which the 
territory of El  Salvador is subdivided for administrative purposes. The Legislative Assembly is 
headed by a Board comprising a President, five Vice -Presidents and eight  Secretariats, and 
discharges its functions through four types of legislative commission, name ly permanent, 
transitional, ad hoc  and special commissions.2 
2.2.  The Executive Branch is composed of the President and Vice -President of the Republic, 
Ministers and Vice -Ministers of State and the officers that report to them.3 The President is chosen 
by popul ar election for a five -year term of office.4 The management of public affairs is the 
responsibility of State Secretariats or Ministries, which are headed by a Minister and one or several 
Vice-Ministers. The President of the Republic appoints the Ministers and Vice -Ministers of State. 
Decrees, agreements, orders and decisions by the President of the Republic only become legally 
valid when endorsed and published by Ministers in their respective spheres of responsibility. The 
Executive Branch currently compris es 13 Ministries.5 The remit of each one is governed by the 
Rules of Procedure of the Executive Branch.6 There is also a Council of Ministers comprising the 
President, Vice -President and Ministers of State, with responsibility, among other things, for 
enacting the Rules of Procedure of the Executive Branch, drawing up the general government plan 
and preparing the draft national budget.7 The Office of the President performs its functions through 
eight support units known as Presidential Secretariats.8 
2.3.  The Ju dicial Branch is made up of the Supreme Court of Justice, the courts of appeal and the 
other courts established by law.9 The National Judicial Council is the institution tasked with 
proposing to the Legislative Assembly candidates for the Supreme Court of Justice, which 
comprises 15 judges. The President of the Supreme Court is appointed by the Legislative Assembly 
from among the judges of the Court and is simultaneously the President of the Judicial Branch and 
of the Constitutional Division. The Supreme Co urt is organized into four divisions, namely the 
Constitutional Division, the Civil Division, the Criminal Division and the Administrative Litigation 
Division. The courts of appeal consist of two judges and, within their respective jurisdictions, may 
adjud icate appeals against decisions by courts of first instance. First instance courts are headed by 
a single judge and adjudicate cases brought in their respective jurisdictions, within their sphere of 
competence.  
2.4.  The institutional structure of the Salvadoran  State includes the Court of Audit of the Republic, 
which is the independent body tasked with overseeing public finances and budget execution. The 
Court comprises an appeals court made up of the President of the Court and two judges, and of 
                                                
1 Article 124 of the Constitution of the Republic of El Salvador. The Legislative Assembly current ly 
comprises 84 deputies.  
2 There are 20 permanent legislative commissions, each with a specific remit. One is the Commission on 
Foreign Affairs, Central American Integration and Salvadorans Abroad.  
3 Article 150 of the Constitution of the Republic of El S alvador.  
4 Articles 79 and 154 of the Constitution of the Republic of El Salvador.  
5 Ministry of Foreign Affairs, Ministry of the Interior and Territorial Development, Ministry of Justice and 
Public Security, Ministry of Finance, Ministry of the Economy, M inistry of Education, Ministry of National 
Defence, Ministry of Labour and Social Welfare, Ministry of Agriculture and Livestock, Ministry of Health, 
Ministry of Public Works, Transport, Housing and Urban Development, Ministry of the Environment and Natura l 
Resources, and Ministry of Tourism.  
6 Article 1 of the Rules of Procedure of the Executive Branch, published in Official Journal No.  70 of 
18 April 1989, and last amended by Decree No.  1 of 2  June 2014.  
7 Articles 166 and 167 of the Constitution of the R epublic of El Salvador.  
8 Secretariat for Legislative and Legal Affairs, Private Secretariat, Secretariat for Governance and 
Communications, Secretariat for Social Inclusion, Technical and Planning Secretariat, Secretariat for Citizen 
Participation, Transp arency and Anti -corruption, Secretariat for Culture and Secretariat for Vulnerability 
Matters.  
9 Article 172 of the Constitution of the Republic of El Salvador.  WT/TPR/S/344 • El Salvador  
- 26 - 
  courts of first  instance established by law. The members of the Court of Appeal, including its 
President, are appointed by the Legislative Assembly.  
2.5.  For political administration purposes, the territory of El Salvador is divided into 
14 departments, which are headed by go vernors appointed by the President of the Republic. The 
departments are subdivided into municipalities, which are economically, technically and 
administratively autonomous.10 According to the Directorate -General of Statistics and Census 
(DIGETSTYC), the pop ulation of El Salvador was estimated at 6,460,271 in 2015.11 
2.6.  The power of legislative initiative rests with deputies, the President of the Republic through 
his Ministers, the Supreme Court of Justice in the realm of its competence, municipal councils in 
matters of municipal taxes, and the Central American Parliament through the Salvadoran deputies 
members of that Parliament, in matters relating to Central American integration. Draft laws 
approved by the Legislative Assembly are submitted to the President of the Republic, who is 
empowered to approve them and order their publication, or to veto them.12 Draft laws vetoed by 
the President are returned to the National Assembly for reconsideration; however, if a 
two-thirds  majority of deputies ratifies the vetoed te xt, the President has to approve and publish 
it.13 Laws become binding only after being enacted and published in the Official Journal.14 
2.7.  International treaties concluded by El Salvador with other States or with international bodies 
become laws of the Republi c. Domestic laws may not amend or repeal the covenants of an 
international treaty and the latter prevails in the event of a conflict between its provisions and 
those of domestic laws. International treaties may not restrict or in any way affect constitutio nal 
provisions.15 The conclusion of international treaties and agreements is the purview of the 
President of the Republic, who must submit them to the Legislative Assembly for ratification.16 
2.8.  The Constitution stipulates that the country's economic order must  be fundamentally in line 
with the principles of social justice, which are designed to ensure a dignified existence for all 
citizens. It further provides that the State must promote economic and social development by 
increasing production and productivity and making rational use of resources. It guarantees 
economic freedom to the extent that it does not go against the social interest. It also guarantees 
and recognizes the right to private property where it serves the social interest. The subsoil belongs 
to the State, which may grant concessions for its exploitation.17 
2.9.  Trade policy management is the purview of the Executive Branch, and more specifically the 
Ministry of the Economy (MINEC), whose powers include the following : promoting domestic, 
regional and in ternational trade and the opening or expansion of markets for Salvadoran products; 
overseeing and controlling corporate and individual domestic or foreign traders and authorizing 
foreign companies wishing to engage in permanent commercial activities in the  country; directing 
national policy with a view to realizing the economic and social integration of Central America; 
encouraging investment in enterprises that are productive and useful to the domestic economy; 
and authorizing owners of enterprises not dom iciled in El Salvador wishing to engage in occasional 
or temporary industrial and commercial activities.18 The remit of the Ministry of the Economy 
(MINEC) includes the Permanent Representation of El Salvador to the World Trade Organization 
(WTO) and the Wo rld Intellectual Property Organization (WIPO).19 
2.10.   Within the MINEC, direct responsibility for trade policy rests with the Vice -Minister of the 
Economy. The functions of the Vice -Minister of the Economy include cooperating with the Minister 
in formulating tra de policy and export promotion strategies, and coordinating international trade 
negotiations and the administration of trade instruments signed by El Salvador. In discharging his 
functions, the Vice -Minister of the Economy is supported by the Economic Inte lligence Unit, the 
                                                
10 The territory of El  Salvador currently comprises 262 municipalities.  
11 Ministry of the Econom y, DIGESTYC, United Nations Population Fund (UNFPA), and Latin American 
and Caribbean Demographic Centre  (CELADE) (2014).  
12 Article 13 7 of the Constitution of the Republic of El Salvador.  
13 Ibid., Article 137.  
14 Ibid., Articles 139 and 140.  
15 Ibid., Articl es 144 to 146.  
16 Ibid., Article 167, paragraph 4.  
17 Ibid.,  Articles 101 to 103.  
18 Article 37, nos. 7, 11, 13, 22 and 24, of the Rules of Procedure of the Executive Body.  
19 Article 7 of the Rules of Procedure of the Ministry of the Economy, dated 5 November  2015.  WT/TPR/S/344 • El Salvador  
- 27 - 
  Trade Policy Directorate, the Directorate for the Administration of Trade Agreements and 
El Salvador's Permanent Representation to the WTO and WIPO.20 
2.11.   The main functions of the Economic Intelligence Unit are to provide the Minister's Offi ce and 
public and private entities with analyses of the domestic and international economy, and to look 
into domestic and external conditions that affect the competitiveness of El Salvador's production 
sectors. The mission of the Trade Policy Directorate i s to set and execute trade policy, bolster 
trade and investment flows, conduct trade negotiations with third countries and multilateral 
agencies, and propose, promote and follow up initiatives and projects to further and strengthen 
Central American economi c integration. To fulfil its mission, the Trade Policy Directorate is 
empowered, inter alia,  to: align trade policy with the other policies contained in El Salvador's 
economic programmes and development plans; take part in multilateral trade negotiations i n the 
WTO and WIPO frameworks, support the Permanent Mission to these organizations in formulating 
proposals that reflect the interests and sensitivities of the country's production sectors; maintain 
ongoing communication with public and private entities a nd international agencies concerned with 
Salvadoran trade policy and Central American economic integration; draw up strategies for 
El Salvador's participation in regional and international trade negotiations; coordinate and follow 
up regional, bilateral an d multilateral negotiations for the conclusion of agreements to improve 
market access for Salvadoran exports, as well as increase investment and technology flows to the 
country; and provide technical and legal advice in respect of negotiations, internation al trade 
matters and issues pertaining to Central American economic integration.  
2.12.   The goals pursued by the MINEC Directorate for the Administration of Trade Agreements 
include the following: at the domestic level, fulfilling the administrative obligations a rising from the 
trade agreements signed by the country; monitoring compliance with these obligations by 
El Salvador's trading partners; conducting the administrative procedures for imposing safeguards, 
countervailing measures and anti -dumping duties; and v erification of origin.21 The main aims of 
the Permanent Representation of El  Salvador to the WTO and WIPO are to ensure that El  Salvador 
participates effectively in the ongoing trade negotiations in these organizations, and to encourage 
implementation by th e corresponding national agencies of the outcomes of agreements reached in 
the framework of these organizations.  
2.13.   The purpose of the National Investment Directorate is to contribute to economic and social 
development by supporting the business sector in rai sing its output of goods and services and 
boosting its domestic and international competitiveness. The work of the Directorate focuses on 
facilitating and supporting export development and employment -generating investment. Its 
functions include: improving the business environment as pertains to its legal aspects, formalities 
and procedures; supporting trade development and export promotion as well as domestic and 
foreign investment; effectively administering laws regarding tax incentives for the development  of 
production, exports, investment and the operation of free zones; advising business people on the 
use of MINEC financial instruments and services for enhancing quality and productivity and 
boosting innovation, technological development and exports; cent ralizing and coordinating 
government procedures to be followed by domestic and foreign investors; and establishing and 
maintaining records and files on trade and investment, as well as generating statistics for 
decision -making purposes.  
2.2  Trade policy formul ation and objectives  
2.14.   Central American integration is one of El Salvador's fundamental foreign and trade policy 
goals. One of El Salvador's priorities under the Constitution is to promote human, economic, social 
and cultural integration with the American re publics and in particular with the Central American 
isthmus. This integration may take place through agreements with the interested republics as well 
as by creating supranational bodies.22 
2.15.   El Salvador's main trade policy goals have been set out in the two F ive-Year Development 
Plans that have been in force during the period under review: the Five -Year Development Plan 
2010-2014 acknowledged that instead of a production -based economy, El Salvador had become a 
services and trading economy excessively dependent  on imports, and one not backed up by a 
                                                
20 Ibid., Article 30.  
21 Ibid., Article  33. 
22 Article 89 of the Constitution of the Republic of El Salvador.  WT/TPR/S/344 • El Salvador  
- 28 - 
  competitive production base but by the consumption generated by family remittances and 
consumer credit.23 The Plan proposed the formulation of a comprehensive export promotion policy 
focused on the following key proce sses: (a) strengthening State institutions that support the 
export sectors; (b) incorporating innovation and technology transfer processes in the 
export  sector; (c) job creation in the export sector; (d) incentivizing micro -enterprises as well as 
small and  medium -sized enterprises; (e) making use of free trade agreements, strengthening the 
Central American common market and establishing new trade relations with emerging countries; 
and (f) taking a systemic approach to promoting and internationalizing strate gic sectors in 
countries and market niches in which El Salvador enjoys comparative advantages.24 
2.16.   In office since 1  June 2014, the present Government of El Salvador has formulated 
the Five-Year Development Plan 2014 -2019 laying out 11 specific economic objec tives for the 
country in the years ahead. Each objective contains specific strategies that are being carried out 
through lines of action. Under the Five -Year Plan, the foremost objective is to revitalize the 
domestic economy so as to generate opportunities  and prosperity. This objective includes the 
following strategies: diversifying the production matrix, developing the production capacity of 
medium -size, small and micro -enterprises, diversifying the energy matrix, giving priority to 
renewable and sustaina ble sources, consolidating the financial system, promoting domestic and 
foreign investment and developing sustainable tourism.25 The Salvadoran authorities deem it 
necessary to buttress the manufacturing sector vis-à-vis the low value -added services sector,  
which currently dominates its economy. The development policies being pursued in the country 
therefore give prominence to the strategy of diversifying the production matrix, whose lines of 
action include promoting the conversion of the production sector, focusing mainly on goods and 
services with export potential and high added value, promoting high value -added chains in 
agriculture, forestry, fishing and aquaculture, developing logistics and transport, and boosting 
innovation and technology.26 
2.17.   As pertains to trade policy, objective No.  10 of the Five -Year Plan states that the 
Government intends to reinforce El Salvador's integration in the region and the world in general. It 
also notes that El Salvador's commitment to integration will be strengthened and th at it will 
endeavour to further Latin American and Caribbean integration. The following strategies are part of 
the above -mentioned trade policy objective: (1) national development and making a 
solidarity -based contribution to the world by building up El Sa lvador's international relations; 
(2) the social and economic integration of the Central American region; and (3) buttressing the 
system of national defence. These strategies will be implemented through lines of action designed, 
among other things , to: str engthen El Salvador's relations with Latin America and the Caribbean, 
the United States and Asia; encourage investment processes; strategically position the country's 
development priorities internationally; promote regional integration and complementarity of 
integration processes; promote a Central American strategy of mobility, logistics, transport and 
ports; and reinvigorate the Central America -4 (CA -4) Border Control Agreement as a platform for 
regional integration.27 
2.18.   There are mechanisms for consultation  between the public and private sectors on trade 
policy formulation. One of the private -sector bodies involved in these consultations is the 
International Trade  Negotiations Advisory Office for the Production Sector (ODASP)28, in which 
business sector repre sentatives participate under the coordination of the Salvadoran Industrialists 
Association (ASI). Through consultations with the business and production sectors, the ODASP 
facilitates communication between the public and private sectors on international tr ade matters 
and the trade negotiation processes in which El  Salvador is involved. Other production sector 
associations such as the Agricultural and Agro -Industrial Chamber of El Salvador (CAMAGRO) and 
the Exporters Corporation of El Salvador (COEXPORT) are  also involved in consultations with the 
public sector on trade policy formulation.29 In the area of trade facilitation, the professional 
associations have organized themselves into the Inter -Association Commission on Trade 
                                                
23 Five-year Development Plan 2010 -2014, paragraph 17. The text of Plan may be viewed at: 
http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=37713692 . 
24 Ibid., paragraph 161.  
25 Five-year Development Plan 2014 -2019, pages 95 and 96.  
26 Ibid., pages 253 -256. 
27 Ibid., pages 187 -192. 
28 FUSADES  (2015).  
29 Online informati on. Viewed at: http://www.elsalvador.com/articulo/negocios/sector -privado -impulsa -
ley-defensa -comercial -89330 . WT/TPR/S/344 • El Salvador  
- 29 - 
  Facilitation (CIFACIL)30 so as to foster dialogue with government bodies competent in the various 
fields of trade facilitation.  
2.19.   A committee of Salvadoran businessmen and professionals has drawn up the 
Competitiveness Initiative for the principal purpose of working with the public sector to  improve 
El Salvador's international market competitiveness. Working groups have been established under 
this initiative and tasked with undertaking consultations and projects in four  areas: (1) education 
and business, (2) infrastructure, (3) market access and investment, and (4) easing of 
formalities.31 The Competitiveness Initiative has led to cooperation between the public and private 
sectors on the adoption of legislative instruments such as the Law on digital signature, the Law on 
legal stability, the La w on publi c-private -partnerships, the Law establishing PROESA and 
amendments to the Law on international services, as well as on the design of the National Logistics 
Policy. Non -governmental organizations such as the Salvadoran Foundation for Economic and 
Social Development (FUSADES), the Central American Research Institute for Develop ment and 
Social Change (INCIDE)  and the National Foundation for Economic Development (FUNDE) also 
contribute to policy design, including in the realm of commerce.32 
2.3  Trade agree ments and arrangements  
2.3.1   WTO  
2.20.   El Salvador acceded to the GATT on 22  May 1991 and became a WTO Member on 
7 May 1995, as of which date all the multilateral agreements became binding on the country. 
Although El Salvador has made use of the transition periods ava ilable to developing countries, it is 
not currently availing itself of any transition period under the WTO Agreements. El Salvador is not 
a party to either of the two WTO Plurilateral Agreements currently in force. This is the country's 
fourth trade policy  review.33 
2.21.   El Salvador continued to play an active part in the WTO during the review period and, as is 
explained below, was party to a dispute settlement procedure for the first time and continued to 
participate as a third party in other disputes. The count ry also submitted further notifications 
under the various provisions of the WTO Agreements (Table A2.1).  
2.22.   The Protocol of Amendment inserting the Agreement on Trade Facilitation into the 
WTO Agreement was ratified by El Salvador's Legislative Assembly on 4  February and published in 
the Official Journal on 24  February  2016. On 4  July 2016, El Salvador deposited with the WTO the 
instrument accepting the Trade Facilitation Agreement. In July  2014 El Salvador had submitted a 
notification regarding the Category A  commitments it would assume upon entry into force of the 
Agreement.34 The Government of El Salvador is currently reaching out to stakeholders to inform 
them about the provisions and benefits of the Trade Facilitation Agreement.  
2.23.   With regard to the plurilate ral trade agreements, El Salvador is not a party to the revised 
Agreement on Government Procurement (GPA) and has not requested the status of observer to 
that Agreement. Nor is it a party to the Agreement on Trade in Civil Aircraft. El Salvador is, 
however , a participant in the Information Technology Agreement (ITA).35 For now, El Salvador 
does not plan to participate in the negotiations on the expansion of the ITA.  
2.24.   In 2001, El Salvador notified the Ministerial Conference of its decision, under Article XIII of 
the Agreement Establishing the WTO, not to apply the multilateral trade agreements between 
El Salvador and the People's Republic of China should the latter country accede to the WTO.36 On 
                                                
30 CIFACIL comprises the following e ntities: ASI, Chamber of Commerce, CAMAGRO, AMCHAN, ADES, 
COEXPORT and CAMTEX.  
31 Online information from the Salvadoran Foundation for Economic and Social Development (FUSADES). 
Viewed at: http://fusades.org/sites/default/files/investigaciones/educacion_empresa.pdf . 
32 Online information from FUSADES. Viewed at: http://fusades.org/fusades/conocenos/ acerca -de-
fusades . 
33 The Secretariat reports for El Salvador's previous three trade policy reviews are contained in 
WTO documents WT/TPR/S/23 of 24  October  1996, WT/TPR/S/111 of 6  January  2003 and 
WT/TPR/S/226/Rev.1 of 16  March  2010, respectively.  
34 Article 15. 1 of the Agreement on Trade Facilitation.  
35 WTO document G/IT/1/Rev.54 of 5  October  2015.  
36 WTO document WT/L/429 of 7  November  2001.  WT/TPR/S/344 • El Salvador  
- 30 - 
  2 July 2014, however, El Salvador notified the WTO that it had dec ided, as of that date, to 
withdraw its reservation with respect to the People's Republic of China.37 El Salvador does not 
exclude any other country from MFN treatment under the WTO rules.  
2.25.   In the framework of the Doha Round negotiations, El Salvador is a mem ber of the following 
groups: Small, vulnerable economies – Agriculture, Small, vulnerable economies – 
Non-Agricultural Market Access (NAMA), Small, vulnerable economies – Rules (fisheries subsidies), 
G-33 and Joint proposal (intellectual property – geograp hical indications).  
2.26.   At the 2011 Ministerial Conference held in Geneva, El Salvador underlined the importance of 
the dispute settlement mechanism with a view to its better utilization by developing countries. 
El Salvador expressed its support for the work o f the Committee on Trade and Development in 
monitoring implementation of the provisions on special and differential treatment, as well as its 
support for the Aid for Trade initiative.38 At the 2013 Ministerial Conference in Bali, El Salvador 
reaffirmed its commitment to the multilateral trading system and expressed its interest in the 
consolidation of the progress made in the negotiations on agriculture, trade facilitation and 
development. It expressed satisfaction at the results obtained through the monitor ing mechanisms 
used by the Organization to stem protectionist measures.39 At the 2015 Ministerial Conference in 
Nairobi (Kenya), El Salvador highlighted the importance of strengthening the rules -based 
multilateral trading system, both in negotiations and in  routine activities. El Salvador further 
underscored the significance of trade as a tool for realizing the sustainable development of 
peoples, and reaffirmed the importance of continuing to promote the interests of small, vulnerable 
economies in the WTO fr amework, among other things, by maintaining the Work  Programme for 
Small Economies. Lastly, El Salvador reiterated the need to recognize the special circumstances 
confronting these Members, which should translate into special and differential treatment tha t 
allows them to be better integrated in world trade.40 
2.27.   During the review period, El Salvador became a party in a WTO dispute for the first time, as 
complainant in the dispute Dominican Republic - Safeguard Measures on Imports of Polypropylene 
Bags and Tubu lar Fabric (DS418). In this dispute El Salvador contended that the provisional and 
definitive safeguard measures imposed by the Dominican Republic on imports of polypropylene 
bags and tubular fabric from El Salvador, as well as the investigation that led t o these measures, 
were inconsistent with several provisions of the Agreement on Safeguards and Article XIX of the 
GATT 1994. El Salvador requested consultations and the establishment of a panel on 19 October 
and 20  December  2010, respectively. As Costa Ric a, Guatemala and Honduras had each separately 
requested a panel on the same issue, the Dispute Settlement Body (DSB) established a single 
panel on 7  February  2011. The panel report was circulated on 31  January  2012 and, not having 
been appealed, was adopte d by the DSB on 23  March  2012.41 
2.28.   El Salvador has participated as a third party in seven dispute settlement cases.  
2.3.2   Regional and preferential agreements  
2.3.2.1   Regional trade agreements  
2.29.   El Salvador participates in the Central American economic integration process th rough the 
Central American Common Market (CACM). In addition, it has signed regional trade agreements 
(RTA) with various trading partners either individually or jointly with other countries in the region. 
Table 2.1 lists the RTAs that have been notified to  the WTO by El Salvador while Chart 2.1 outlines 
the regional trade agreements in which El Salvador currently participates.  
                                                
37 WTO document WT/L/926 of 2  July 2014.  
38 WTO document WT/MIN(11)/ST/111 of 16  December  2011.  
39 WTO document WT/MIN( 13)/ST/109 of 10  February  2014.  
40 WTO document WT/MIN(15)/ST/53 of 18  December  2015.  
41 Information regarding dispute DS418 viewed on the WTO website, at: 
https://www.wto.org/en glish/tratop_e/dispu_e/cases_e/ds418_e.htm . WT/TPR/S/344 • El Salvador  
- 31 - 
  Table 2.1 Regional trade agreements to which El Salvador is party (as at 
December  2015) 
Title of the agreement  Date of 
signature  Date of entry into 
force for 
El Salvador  Coverage  Notification to the 
GATT/WTO  
Agreement establishing an Association 
between the European Union and its 
member States, on the one hand, and 
Central America on the other 29.6.2012  1.10.2013  Goods and 
services  WT/REG332/N/1  
Free Trade Agreement between the 
United Mexican States and the 
Republics of Costa Rica, El Salvador, 
Guatemala, Honduras and Nicaragua  22.11.2011  1.9.2012  Goods and 
services  WT/REG349/N/1/Rev.1  
Partial Scope Agreement between 
El Salvador and Cuba  19.9.2011  1.8.2012  Goods  WT/COMTD/N/43 
(agreement concluded 
under the Enabling Clause)  
Free Trade Agreement between the 
Republic of Colombia and the 
Republics of El Salvador, Guatemala 
and Honduras  9.8.2007  1.2.2010  Goods and 
services  WT/REG316/N/1  
Free Trade Agreement between 
El Salvador, Honduras and the 
Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu  7.5.2007  1.3.2008  Goods and 
services  WT/REG283/N/1  
Dominican Republic - Central Amer ica 
- United States Free Trade Agreement 
(CAFTA -DR) 5.8.2004  1.3.2006  Goods and 
services  WT/REG211/N/1  
Free Trade Agreement between 
Central America and Panama  6.3.2002  11.4.2003  Goods and 
services  WT/REG196/N/1  
Free Trade Agreement between Chile 
and Cent ral America  18.10.1999  1.6.2002  Goods and 
services  WT/REG165/N/1 and 
Corr.1  
Free Trade Agreement between 
Central America and the Dominican 
Republic  16.04.1998  4.10.2001  Goods and 
services  WT/REG305/N/1  
CACM  13.12.1960  4.6.1961  Goods  L/1425  
(GATT document ) 
Source:  WTO Secretariat.  
Chart 2.1 El Salvador's participation in RTAs as at December  2015  
(The year of entry into force of the RTA for El Salvador is shown in brackets)  
 
Source :  WTO Secretariat.  
2.30.   According to information from the Central Reserve Bank, El Salvador's 2015 trade flows with 
trading partners with which it has concluded RTAs accounted for 94.4% of its total exports and 
77.3% of its total imports. Besides, El Salvador is also negotiating preferential trade agreements 
with Belize, the Plurinational State of Bolivia, Canada, Ecuador, Peru, the Republic of Korea and 
Trinidad and Tobago.  Mexico 
(2012)  EU 
(2013)  Chile 
(2002)  Chin. Taipei 
(2008)  Honduras  
Guatemala  Colombia 
(2010)  
Costa Rica  
Nicaragua  
Panama El Salvador  
US 
(CAFTA -DR) 
(2006)  Dominican Republic  
(2001)  
General Treaty on 
Central American 
Economic 
Integ ration 
(CACM ) (1961)  Cuba 
(2012)  WT/TPR/S/344 • El Salvador  
- 32 - 
  2.31.   Significant headway was made in the CACM framework during the period under review, in 
particular as pertains to the incorporation of Panama. The RTAs negotiated by El Salvador with the 
European Union (EU), Colombia, Cuba and Mexico also entered into force. The following 
paragraphs briefly describe the progress made in trade liberalization. T able 2.2 contains some 
figures on tariff reductions accorded by El Salvador under these RTAs.  
Table 2.2 Tariff reduction programmes adopted by El Salvador in the period from 
January  2010 to November  2015  
 Colombia  Mexico  Panama  EU 
End of the phasing -out period  2029 2021 2013 2027 
 (% of tariff lines)  
Zero-rated tariff lines  47.1 47.6 47.1 47 
  Immediate access  6.5 N/A N/A 0.9 
  Less than 10 years  9.7 N/A 1.3 7.5 
  10 years  8.4 N/A N/A 36.3 
  More than 10  years  3.6 0.7 1.2 4.1 
Lines with preferential tariff higher than zero  N/A N/A N/A N/A 
Lines excluded from preferential treatment  24.7 3.4 16.52  3.9 
Preferential quotas  N/A N/A 0.08 0.3 
N/A Not applicable.  
Source:  WTO Secretariat. Texts of the respec tive agreements.  
2.3.2.2   Central American economic integration and trade relations with Panama  
2.32.   The Central American integration process began in the 1960s with the signing of the 
General Treaty on Central American Economic Integration (TGIEC) creating the Central American 
Common Market (CACM) between Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. 
This led to the adoption of a common tariff and the commitment to set up a customs union. In the 
CACM framework, all products originating in the parties are t raded duty -free, except for unroasted 
coffee and cane sugar. There are also bilateral restrictions that include ethyl alcohol in the case of 
El Salvador, distilled alcoholic beverages and some petroleum products in trade with Honduras, 
and roasted coffee a nd ethyl alcohol in the case of Costa Rica.42 
2.33.   Under the TGIEC, the CACM members and Panama signed the Guatemala Protocol in 1993, 
undertaking to deepen the free trade zone with a view to the subsequent creation of a customs 
union. The CACM member countries ratified the Protocol between 1995 and 1997, though Panama 
only did so in 2013 when the country presented its instrument of ratification and, in addition to 
acceding to the TGIEC, immediately adopted a number of legal instruments, prominent among 
which wer e the Central American Uniform Customs Code and the Framework Agreement for the 
Establishment of the Central American Customs Union43, which enabled Panama to move forward 
with the regional integration process. Panama's ratification of the Guatemala Protoco l repealed the 
free trade agreement and bilateral protocols that had hitherto regulated trade between 
Central  America and Panama.44 This notwithstanding, the provisions of the free trade agreement 
and bilateral protocols are still being provisionally applie d in fields such as cross -border trade in 
services and investment, which are still not regulated by the legal instruments currently governing 
regional integration.45 Once the Guatemala Protocol becomes binding on Panama, and with the 
exceptions stipulated i n the Protocol of Incorporation, the country will accord duty -free treatment 
for trade in goods originating in the member countries of the Central American Economic 
                                                
42 Annex A of the General Treaty on Central American Economic Integration (TGIEC) contained in 
Resolution No.  06-2010 of 3  September  2010 of the Executive Committee for Economic Integration.  
43 Protocol Incorporat ing the Republic of Panama into the Economic Integration Subsystem of the 
Central American Integration System, dated 29  June 2012. Under this Protocol Panama further undertook to 
adopt the legal instruments listed in Annex 3.3 to the Protocol, by 1  January  2017 at the latest. The text of the 
Protocol may be viewed at: http://www.sice.oas.org/Trade/sica/PDF/AdhesionPAN_s.pdf . 
44 While the basic text of the agreement was signed jointly by the countries of Central America in 2002, 
the tariff reduction programmes were implemented through bilateral protocols. The bilateral protocol between 
El Salvador and Panama was signed on 6  March  2002. The Free Trade Agreement between the two countries 
took effect on 11  April 2003.  
45 Article 11 of the Protocol Incorporating the Republic of Panama into the Economic Integration 
Subsystem of the Central American Integration System.  WT/TPR/S/344 • El Salvador  
- 33 - 
  Integration Subsystem.46 The Free Trade Agreement between El Salvador and Panama continues i n 
force for those matters that are not regulated under the legal instruments of the CACM.  
2.34.   To deepen and update the provisions on intra -regional trade in services, the CACM members 
signed a second Protocol to the Treaty on Investment and Trade in Services o n 27 July 2011, 
incorporating provisions on electronic commerce. The Protocol is currently in the process of 
ratification by the five  countries.47 
2.35.   The Framework Agreement for the Establishment of the Central American Customs Union 
was signed by the CACM  members in 2007 and took effect in 2011. In addition, El Salvador and 
Guatemala had signed a Framework Agreement for the Establishment of a Customs Union on 
13 January  2000 and have reaffirmed their determination to attain that objective.48 On 
26 June 2015, th e 65th Ordinary Meeting of Heads of State and Government of Member Countries 
of the Central American Integration System (SICA) adopted the Roadmap for Progress Towards 
the Customs Union 2015 -2024, which lays out the actions to be taken for the period 2015 -2024 in 
order to forge ahead with the three phases of the customs union process as set out in the 
Framework Agreement (free movement of goods and trade facilitation, regulatory modernization 
and convergence, and institutional development). Moreover, on 22  October  2015 the Council of 
Ministers for Economic Integration approved the Central American Strategy for Trade Facilitation 
and Competitiveness with Emphasis on Coordinated Border Management, which is based on World 
Customs Organization guidelines regardi ng coordinated border management. The strategy was 
adopted in order to cut the logistical costs of trade in the region, thereby promoting the best use 
of Central American market opportunities. It comprises eight focal points, including: integrated 
procedur es and control, adoption of international standards and comprehensive risk management.  
2.3.2.3   Association Agreement between Central America and the European Union  
2.36.   The Agreement Establishing an Association betw een the European Union and its 
member  States, on the o ne hand, and Central America on the other was signed on 29  June 2012. 
The Central American countries party to this Agreement are El Salvador, Costa Rica, Guatemala, 
Honduras, Nicaragua and Panama.49 It is a free trade and economic integration agreement that  
covers goods and services. The Agreement furthermore addresses other areas such as intellectual 
property, the protection of competition, government procurement, technical barriers to trade and 
trade defence.50 Because some parties have not yet ratified the  Agreement, it had still not entered 
into force at end -2015, though all the parties have been provisionally implementing Chapter IV 
(trade pillar) of the Agreement since 2013. El Salvador began this provisional implementation on 
1 October  2013. The Associa tion Agreement between the European  Union and Central America is 
the first association agreement between regions and is based on three complementary pillars: 
political dialogue, cooperation and a trade agreement.51 
2.37.   The Agreement provides for moving from the  GSP+ scheme, under which temporary trade 
benefits are accorded, to a permanent one. As pertains to the liberalization of trade in goods, the 
Agreement lays down different tariff reduction categories and the tariff treatment to be accorded 
to each contract ing party's products. The various categories reflect each country's sensitivities, as 
well as asymmetrical treatment in favour of Central America. The tariff elimination contemplated 
for the different categories must be completed within 15 years as from th e entry in force of the 
Agreement.52 
2.38.   Under the Agreement, the EU has undertaken to grant immediate duty -free access 
for 91.04% of tariff lines. Tariffs will be eliminated on another 0.97% of tariff lines in less than 
five years and on 3.29% of lines within five to ten years. Some 1.01% of EU tariff lines will be 
subject to quotas and a mere 3.69% of lines will be excluded from the tariff reduction process. As 
                                                
46 Ibid., Article 4.  
47 SIECA (2014).  
48 Online information viewed at: http://servicios.minec.gob.sv/default.asp?id=125&mnu=125 . 
49 El Salvador notified this RTA on 27  February  2013 in document WT/REG332/N/1. The text of the 
agreement may be viewed at: http://trade.ec.europa.eu/doclib/press/index.cfm?id=689 . 
50 Government of El Salvador (2013), Ofreciendo Oportunidades para el Desarrollo: documento 
explicativo del Acuerdo de Asociación entre Centroa mérica y la Unión Europea . Viewed at: 
http://eeas.europa.eu/delegations/el_salvador/documents/related_links/acuerdo -ada-para-web_es.pdf . 
51 WTO document WT/REG332/N/1 of 27  February  2013.  
52 Government of El Salvador (2013).  WT/TPR/S/344 • El Salvador  
- 34 - 
  regards concessions granted by the Central American countries on the other hand, immediate 
duty-free access will be accorded for 47.93% of tariff lines. A further 7.41% of lines will be 
liberalized in less than ten years, 36.34% of lines in ten years and 4.21% will be liberalized within 
a period of more than ten years. Some 0.27% of the Salvadoran tariff  lines will be subject to 
quotas and just 3.84% of lines excluded from tariff reduction. Originating goods produced in free 
zones are covered by the preferences.  
2.3.2.4   Free Trade Agreement between Central America and Mexico  
2.39.   The Free Trade Agreement between the U nited Mexican States and the Republics of 
Costa  Rica, El Salvador, Guatemala, Honduras and Nicaragua was signed on 22  November  2011.53 
It is a free trade and economic integration agreement that covers goods and services. For trade 
between El Salvador and Me xico, it became effective on 1  September  2012.54 El Salvador has 
notified the WTO55 that this Agreement replaces the Free Trade Agreement between Mexico and 
El Salvador, notified in 2006.56 
2.40.   Pursuant to the Agreement between El Salvador and Mexico, tariff redu ction for bilateral 
trade will continue until the tenth year as from the year of its entry into force, in other words, until 
2021. Before the entry into force of the Agreement, 58.7% of Mexico's tariff lines were already 
duty-free. Upon its entry into forc e, another 39.6% of tariff lines was liberalized in trade with 
El Salvador, and a further 0.2% of tariff lines is expected to be liberalized by 2021. Only 1.9% of 
Mexican tariff lines will be subject to duty at the end of the implementation period. Prior t o the 
entry into force of the Agreement, 58.3% of El Salvador's tariff lines were already duty -free for 
imports from Mexico. The entry into force of the Agreement meant the liberalization of another 
39.6% of tariff lines in trade with Mexico, and of an add itional 0.2% of tariff lines by 2021. At the 
end of the implementation period, just 1.9% of Salvadoran tariff lines will remain subject to 
customs duty in trade with Mexico.57 Originating goods produced in free zones are covered by the  
preferences.  
2.3.2.5   Partial Scope Agreement between El Salvador and Cuba  
2.41.   The Partial Scope Agreement between El Salvador and Cuba was signed on 
19 September  2011 and took effect on 1  August  2012.58 It is a bilateral agreement covering trade 
in goods and was concluded under the Enablin g Clause.59 Under this Agreement, El  Salvador 
accords tariff preferences on 716 tariff lines, of which 69.7% is duty -free, while the rest are 
subject to a tariff in the form of percentage discounts relative to MFN rates.  
2.42.   The principal purpose of this Partia l Scope Agreement is to strengthen trade relations 
between the parties through reciprocal tariff preferences and the elimination of non -tariff 
restrictions. In essence, the tariff preferences applicable to goods listed in Annexes 1 and 2 of the 
Agreement a re calculated on the basis of a discount relative to the MFN tariff applied by the 
parties. Originating goods produced in free zones are covered by the preferences. The Agreement 
also contains provisions on, inter alia , trade cooperation, trade defence mea sures, technical 
barriers to trade and sanitary and phytosanitary measures. The Agreement is open to accession by 
                                                
53 El Salvador notified this RTA on 28  January  2014 in WTO document WT/REG349/N/1/Rev.1 of 
28 January  2014. The factual presentation prepared by the WTO Secretariat regarding th is agreement is 
contained in WTO document WT/REG349/1 of 7  September  2015. The text of the agreement may be viewed 
at: http://www.minec.g ob.sv/index.php?option=com_phocadownload&view=category&id=75:  
tlc_mexico_ca&Itemid=63 . 
54 Online information from the WTO Regional Trade Agreements Information System (RTA -IS). Viewed 
at: https://www.wto.org/english/tratop_e/region_e/rta_participation_map_e.htm . 
55 WTO document WT/REG/GEN/N/7 of 29  January  2014.  
56 WTO document WT/REG212/N/1 of 30  May 2006.  
57 WTO document WT/REG349/1 of 7  September  2015.  
58 El Salvador no tified this Partial Scope Agreement under paragraph 4(a) of the Enabling Clause on 
29 January  2013 in WTO document WT/COMTD/N/43. The text of the agreement may be viewed at: 
https://www .centrex.gob.sv/scx_html/TLC%20AAP%20ES -CUBA.html . 
59 Online information from the WTO Regional Trade Agreements Information System (RTA -IS). Viewed 
at: https://www.wto .org/english/tratop_e/region_e/rta_participation_map_e.htm . WT/TPR/S/344 • El Salvador  
- 35 - 
  other members of the Latin American Integration Association (LAIA) and the Central American 
Integration System (SICA).60 
2.3.2.6   Free Trade Agreement b etween the Northern Triangle and Colombia  
2.43.   The Free Trade Agreement between the Republic of Colombia and the Republics of 
El Salvador, Guatemala and Honduras was signed on 9  August  2007 and became effective for 
El Salvador on 1  February  2010.61 It is a pluri lateral free trade and economic integration 
agreement that covers trade in goods and services.  
2.44.   Each party to this RTA has undertaken to accord the national treatment prescribed in 
Article  III of the GATT 1994 to merchandise from the others, with the except ions foreseen in 
Annex 3.3 of the Agreement. The tariff elimination schedules and tariff reduction categories are set 
out in Annex 3.4 of the Agreement. The implementation of the liberalization programme must be 
completed by 2025 in the case of Colombia, a nd in the cases of El Salvador, Guatemala and 
Honduras (the "Northern Triangle"), was to be completed by 2009. El Salvador has excluded 
1,839  tariff lines from the liberalization process, while Colombia has excluded 1,601 tariff lines in 
its trade with El Salvador. Colombia had committed to a tariff elimination programme vis-à-vis 
El Salvador under which tariffs would be reduced for 70% of lines according to the following 
schedule: 60% in 2010, 0.1% in 2012, 8.9% in 2014 and 0.3% of lines in 2015. Originati ng goods 
produced in free zones are covered by the preferences. In terms of concessions accorded to 
Colombia by El Salvador, 47% of its lines had been subject to MFN duty -free treatment prior to the 
effective date of the Agreement. Upon entry into force of  the RTA, El Salvador liberalized roughly 
7% of its tariff lines, and will liberalize a further 3.7% of lines by 2024.62 
2.3.3   Other trade agreements and arrangements  
2.45.   El Salvador is a member of the Association of Caribbean States (ACS) and therefore 
participates in the ACS process of strengthening regional cooperation and integration. The basic 
objectives of the ACS are to create an expanded economic area, preserve the environmental 
integrity of the Caribbean Sea and promote the sustainable development of the regi on. In the 
pursuit of these goals, the ACS focuses its work on areas such as trade, transport, sustainable 
tourism and disaster risk reduction.63 Since 2009, El Salvador has identified rapprochement and 
strengthening of bilateral ties with the Caribbean cou ntries as a foreign policy goal. At the 
5th ACS Summit held in April  2013, El Salvador expressed its support for the aim of revitalizing the 
Association's vision and encouraging Member States to reaffirm their interest in keeping it alive. 
El Salvador part icipated in the 5th and 6th Summits of Heads of State and/or Government of the 
Association of Caribbean States held in April  2013 and April  2014, respectively, and has moreover 
played an active part in the Ordinary Meetings of the ACS Ministerial Council.  
2.46.   Under the Generalized System of Preferences, El Salvador was benefiting, as at 
November  2015, from preferential trade arrangements concluded with the following trading 
partners (the year of entry into force of the preferences is given in brackets): Austral ia (1974); 
Canada (1974); the EU (1971); Japan (1971); New  Zealand  (1972); Norway (1971); 
Russian  Federation, Kazakhstan and Belarus (2010); Switzerland (1972); and Turkey (2002).64 
2.4  Investment regime  
2.47.   The review period witnessed significant reforms to the in stitutional and the legal framework 
for foreign investment. The Law establishing the Export and Investment Promotion Agency of 
El Salvador (PROESA) was enacted on 9  April 2014.65 PROESA is an entity attached to the Office of 
                                                
60 Articles 1, 2, 7 and 32 of the Partial Scope Agreement between El Salvador and Cuba.  
61 El Salvador notified this RTA on 3  September  2012 in WTO document WT/REG316/N/1. The factual 
presentation prepared by the WTO Secretariat regarding this agreement is contained in WTO document 
WT/REG316/1 of 3  March  2014. The text of the agreement may be viewed at: http://www.minec.gob.sv/  
index.php?option=com_phocadownload&view=category&id=16:tlc -entre -colombia -guatemala -honduras -y-el-
salvador&Itemid=142 . 
62 WTO document WT/REG316/1 of 3  March  2014.  
63 Online information from the ACS. Viewed at: http://www.acs -aec.org/index.php?q=about -the-acs. 
64 WTO Database on Preferential Trade Arrangements. Viewed at: http://ptadb.wto.org/default.aspx . 
65 The Law establishing the Export and Investment Promotion Agency of El Salvador (Law establishing 
PROESA) was adopted through Legislative Decree No.  663 of 9  April 2014.  WT/TPR/S/344 • El Salvador  
- 36 - 
  the President of the Republic en joying administrative and budgetary autonomy and tasked mainly 
with promoting and attracting domestic and foreign private investment, promoting goods and 
services exports, assessing and monitoring the business environment and formulating proposals 
for impr oving investment and export policies.66 This new entity replaces the former Export and 
Investment Promotion Agency of El Salvador (whose acronym was also PROESA), created in 
May 2012 by Decree No.  59 of the Office of the President of the Republic. The legal  reform of 
PROESA was designed to invest the agency with greater powers and increase its autonomy. 
PROESA is located in the city of San Salvador, but may also set up offices anywhere in El Salvador 
and abroad, and may also appoint delegates in the country' s embassies and consulates, subject to 
agreement with the Ministry of Foreign Affairs.  
2.48.   PROESA's highest governing body is its Governing Board, which is made up as follows: 
one member appointed by the President of the Republic for a five -year term – as Pres ident of 
PROESA, the Technical Secretary in the Office of the President, the Minister of Finance, 
the Minister of the Economy, the Minister of Public Works, Transport, Housing and 
Urban  Development, two representatives appointed by the President of the Rep ublic from a list of 
candidates put forward by private -sector professional associations concerned with investment and 
exports, and one representative of academia appointed by the President of the Republic on the 
proposal of the accredited universities.  
2.49.   During the review period, an amendment to the Investment Law was adopted67 in 
replacement of the provision on the settlement of disputes between private Salvadoran or foreign 
investors and the State regarding investments made in El Salvador. The new provision allows 
parties to turn to the competent courts, pursuant to the legislation in force and the relevant legal 
procedures, in order to settle such disputes. The other provisions of the Investment Law enacted 
on 14  October  1999 continue in force and were not a mended during the review period.68 The 
Investment Law aims to encourage private investment in general and foreign investment in 
particular. Under this Law, foreign investors have the same rights and obligations as Salvadoran 
investors and may not be made su bject to unfair or discriminatory measures.69 Foreign investment 
must be registered with the National Investment Office (ONI), a division of the Ministry of the 
Economy responsible for facilitating, centralizing and coordinating procedures relating to domes tic 
and foreign private investment and enabling investors to complete all the relevant formalities via a 
single window. ONI activities are managed by the ONI Sub -Directorate, one of the 
two sub-directorates making up the Ministry of the Economy's Trade and  Investment Directorate 
(DCI).70 Foreign investors are entitled to transfer the entirety of their investment funds abroad. 
Tables 2.3 and 2.4 set out the provisions of the Investment Law pertaining to the types of 
investment covered and the investment activ ities that are subject to restrictions.  
Table 2.3 Types of investment covered by the Investment Law  
Types of investment covered  
Domestic or foreign capital contributions for creating enterprises or purchasing  existing enterprises;  
Domestic or foreign capital contributions for the acquisition of ownership rights or other real rights over immovable 
property  
Domestic or foreign capital contributions for the acquisition of ownership rights over movable tangible property, in 
particular industrial plants, machinery, spare parts and accessories, raw materials and intermediate products, provided 
that such goods are used by commercial enterprises;  
Subscription or purchase of equity in Salvadoran commercial enterprise s; 
Capital contributions from profits made on the original investment;  
Freely convertible foreign currency loans, intended for productive activities;  
Funds intended for the purchase of bonds issued by legal persons domiciled in the country;  
Intangible goods accepted internationally: intellectual property rights, provision of services, equipment lease 
contracts, provision of technical services and provision of administrative know -how; and  
Resources intended for participation agreements or joint investme nts in the form of contractual risk -sharing 
arrangements  
Source:  Article 3 of the Investment Law of El Salvador.  
                                                
66 Articles 1 and 3 of the Law establishi ng PROESA.  
67 Amendment to the Investment Law, adopted through Decree No.  423 of 11  July 2013. The text of this 
legislative instrument may be viewed at: http://www.asamblea.gob.sv/eparlamento/indice -
legislativo/buscador -de-documentos -legislativos/reformase -el-art.15 -de-la-ley-de-
inversiones/archivo_documento_legislativo . 
68 The Investment Law was adopted through Decree No.  732 of 14  October  1999.  
69 Article 5 of the Investment Law.  
70 Online information from the DCI. Viewed at: http://web.minec.gob.sv/oni . WT/TPR/S/344 • El Salvador  
- 37 - 
  Table 2.4 Investment activities subject to restrictions  
Investment restrictions  
Only Salvador ans by birth and nationals of other Central American countries may engage in small -scale trade, 
industry and provision of services, especially with regard to coastal fishing;  
The subsoil belongs to the State, which may grant concessions for its exploitati on; 
Rural real estate may not be acquired by foreigners in whose countries Salvadorans do not enjoy the same 
rights, except in the case of land to be used for industrial plants;  
The maximum area of rural land belonging to the same natural person or legal  person may not exceed 
245 hectares;   
The State is empowered to regulate and supervise public services provided by private companies; and  
A government concession is required for the operation of docks, railways, canals and other facilities for public 
use; 
Investments in shares in banks, financial enterprises and foreign currency exchange offices are subject to the 
limitations prescribed in the laws governing such institutions.  
Source:  Article 7 of the Investment Law of El Salvador.  
2.50.   The Law on legal stab ility for investments was enacted on 12  January  2015.71 It is designed 
to attract and promote domestic and foreign investment through a legal framework that assures 
investors of legal certainty. Those eligible under this Law include domestic or foreign natu ral or 
legal persons launching new investment projects or expanding existing ones in the sectors of 
aeronautics, agro -industry, aquaculture, electronics, energy, strategic infrastructure, logistics, 
health services, online business services, tourism, telec ommunications, various lines of 
manufacturing, science and technology.72 The main instrument provided by the Law to guarantee 
legal stability for investments is the legal stability contract, in virtue of which investors enjoy tax 
stability at the national a nd municipal levels73, stability in terms of the tax waivers available under 
special laws, stability of customs procedures, stability regarding the transfer abroad of funds from 
foreign investments and stability regarding the migration regime in favour of i nvestors.74 To launch 
the procedure for concluding a legal stability contract, the investor must submit to PROESA an 
application containing, among other things, the particulars of the investor, whether a natural or 
legal person, a description of the planned  activity – including, inter alia, information on the amount 
of the investment, the number and type of jobs to be created, the technology transfer that will 
take place and the reasons that warrant stability for the investment – an indication of the legal 
regime under which stability is being sought (tax, customs or other) and the origin of the 
resources that will be invested. Once the application is accepted, PROESA forwards it to the 
Ministry of the Economy, which draws up the legal stability contract to b e concluded in the form of 
a public document and the term of which will depend on the amount being invested, in accordance 
with Table 2.5.  
Table 2.5 Term of legal stability contracts  
Investment amount (current  
minimum wages)  Maximum term 
of the contract  Applicable conditions  
4,220 to 21,100  5 years  The investment must be made in full during the first 
two years.  
21,101 to 42,200  10 years  The investment must be made in full during the first 
five years.  
More th an 42,200  20 years  The investment must be made in full during the first 
ten years.  
Source:  Article 14 of the Law on legal stability for investments.  
2.51.   The Special Law on public -private partnerships75 was enacted on 23  May 2013 with the aim 
of promoting coope ration between the public and private sectors in effectively and efficiently 
providing infrastructure and public and general -interest services. The parties that may participate 
in public -private partnerships (PPP) include the Executive Branch and its depar tments, 
autonomous institutions and local authorities. PPP projects must be worth more than 
                                                
71 The Law on legal stability for  investments was adopted through Decree No.  905 of the 
Legislative  Assembly.  
72 Article 2 of the Law on legal stability for investments.  
73 The tax stability contemplated in this Law does not cover indirect taxes.  
74 Article 6 of the Law on legal stability fo r investments.  
75 The Special Law on public -private partnerships was adopted by Decree No.  379 of the 
Legislative  Assembly on 23  May 2013.  WT/TPR/S/344 • El Salvador  
- 38 - 
  45,000  monthly minimum wages.76 The Law provides for three types of PPP contract: 
(1) partnerships for the provision of public services through a public works conces sion; 
(2) partnerships for the provision of public services through a public service concession; 
(3) partnerships that entail the operation or execution of a general -interest activity. Being 
economic in nature, PPP contracts may be self -sustaining, when th e tariffs charged for providing 
the service involved can cover the cost of the project, and may be co -funded when the State must 
finance part of the project to ensure that it is economically sustainable.  
2.52.   The Special Law on public -private partnerships provi des for the establishment of the 
Public -Private Partnership Directorate (DAPP), which is an autonomous body responsible for 
administering the Law. The DAPP is run by a Governing Board composed of the Ministers of the 
Economy, Finance, Public Works, Agricul ture and Livestock and Tourism, as well as the Technical 
Secretary in the Office of the President, and one private -sector representative. The Law also 
provides for the creation of a Public -Private Partnership Supervisory Body (OFAPP) to oversee the 
technic al aspects of these contracts. To conclude a public -private partnership contract, the 
contracting entity must organize a bidding procedure to select the appropriate private participant 
on the basis of award criteria. The successful bidder will be required to set up a Salvadoran public 
limited company in order to implement the project for which the bidding took place. The Law also 
allows for private initiative whereby a private participant may undertake to implement a specific 
project under this investment r egime.77 To meet firm and contingent financial commitments 
relating to the performance of PPP contracts, a Liquidity Fund has been set up in the Development 
Bank of El Salvador, which may be funded, inter alia,  with an initial contribution by the State, 
special contributions by the State and autonomous bodies, contributions from multilateral agencies 
and international cooperation funds. The Regulations implementing the Special Law on 
public -private partnerships were issued by the Office of the President on 2 9 May 2015. As of 
November  2015, several projects were being evaluated under this Law.78 
2.53.   The updated legal framework applied by El Salvador to private investment also includes the 
Law on industrial and marketing free zones and the Law on international servi ces. These legal 
instruments are discussed in detail in Section 3.2.4 of this report. Other important laws passed 
during the review period relating to entrepreneurial activity in general and private investment in 
particular are the Law on access to public information (LAIP), adopted by the Legislative Assembly 
on 8 May 2011 and designed to guarantee the right of access of everyone to public information in 
order to enhance transparency in the activities of State institutions, and the Law on secured 
transacti ons, enacted on 4  October  2013 with the aim of facilitating secured commercial 
transactions by automating and simplifying the registration procedure.79 
2.54.   Net FDI inflows to El Salvador in recent years have been lower than in most countries across 
the region. However, this decline in FDI has been affecting virtually all countries in the region. It is 
important to point out in this regard that because the major reforms to the legal framework 
governing foreign investment are relatively new, the volume of investme nt so far recorded may 
well not reflect its potentially positive effects. The Salvadoran authorities believe that there could 
be substantial FDI inflows over the coming years considering investment projects that have 
already been announced, chiefly in elec tricity generation, manufacturing and the hotel industry. It 
is estimated that net annual FDI flows for the next three years could be about US$400  million.  
2.55.   El Salvador has signed a large number of reciprocal investment protection agreements with 
trading pa rtners, though the number of agreements signed appears to have declined in recent 
years (Table A2.2). El Salvador is not currently negotiating any new reciprocal investment 
protection agreements.  
                                                
76 The monthly minimum wage varies according to economic sector and, in November  2015, ranged 
from US$98.70 and US$251. 70. 
77 Title IV of the Special Law on public -private partnerships.  
78 Information regarding these projects may be viewed on the PROESA website, at: 
http://app.proesa.gob.sv/evaluacion . 
79 Online information from the Legislative Assembly. Viewed at: 
http://www.asamblea.gob.sv/eparlamento/indice -legislativo/buscador -de-documen tos-legislativos/ley -de-
garantias -mobiliarias . WT/TPR/S/344 • El Salvador  
- 39 - 
  2.56.   El Salvador has been a member of the International Centre fo r Settlement of Investment 
Disputes (ICSID) since 5  April 1984.80 
2.57.   As pertains to the business environment in general, the World Bank's Doing Business 2016  
report shows that El Salvador has improved its position and now ranks 86th out of 189 countries. 
The r eport attributes this to factors such as the legislative reforms implemented by El Salvador to 
facilitate commercial activity and boost private investment. These reforms have given rise, among 
other things, to improved access to credit for entrepreneurial activities, a shortening of the time 
needed to set up new companies and the easing of the formalities bound up with commercial 
activities.81 
2.58.   One important legislative instrument recently adopted in El Salvador is the Law on digital 
signature, under which di gital signatures have the same legal standing as handwritten 
signatures.82 The Salvadoran authorities hope that this Law will have a positive impact in areas 
such as electronic commerce, electronic invoicing and what is known as "electronic government", 
through which El Salvador plans to make greater use of electronic media to provide better 
administrative services and ensure the transparency of formalities to be completed with the 
public  sector.  
2.59.   On the taxation front, El Salvador has signed only one agreeme nt for the avoidance of 
double taxation (with Spain)83 and is not currently negotiating any new agreements of this kind. 
Foreign companies, whether or not domiciled in El Salvador, fall under the same tax regime as 
domestic companies. In particular, they ar e subject to a 25% corporate income tax rate on taxable 
income of up to US$150,000, or a 30% rate when their taxable income exceeds that figure. 
Dividends paid to non -domiciled enterprises are subject to a 5% withholding tax at source, levied 
on top of the  tax payable on the profits of the enterprises concerned. This rate may be as high as 
25% in the event that the beneficiary is resident in a tax haven or in a jurisdiction with a 
preferential tax regime.84 El Salvador has signed the Multilateral Convention on Mutual 
Administrative Assistance in Tax Matters of the Organisation for Economic Co -operation and 
Development (OECD).  
 
                                                
80 Online information from ICSID. Viewed at: 
http://web.worldbank.org/WBSITE/EXTERNAL/BANCOMUNDIAL/QUIENESSOMOS/0,,contentMDK:20193455~m
enuPK:418789~pagePK:64057863~piPK:242674~theSitePK:263702,00.html . 
81 World Bank Group (2015).  
82 The Law on digital signature was published in Official Journa l No. 196 of 26  October  2015.  
83 Convention between the Kingdom of Spain and the Republic of El Salvador for the avoidance of 
double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital, of 
5 June 2009.  
84 Deloitte (20 15). WT/TPR/S/344 • El Salvador  
- 40 - 
  3  TRADE POLICIES AND P RACTICES BY MEASURE  
3.1  Measures directly affecting imports  
3.1.1   Customs procedures and requirements  
3.1.  El Salvador's customs -related regulatory framework has not undergone any significant 
changes since the previous review of the country's trade policy. It is governed by the Central 
American Uniform Customs Code (CAUCA IV) and its implementing Regulations (RECAUCA IV), as 
well a s by domestic legislation, mainly the Organic Law of the Direct orate-General of Customs of 
20061, the Law streamlining customs procedures2 and the Special Law on penalties for customs 
offences of 2001.3 The Directorate -General of Customs (DGA) within the M inistry of Finance is 
responsible for applying customs regulations. In 2013, the DGA published the first version of the 
Single Customs Operations Handbook, which explains customs procedures in detail and is available 
on the Ministry of Finance's website.4 El Salvador belongs to the World Customs Organization 
(WCO), but has not acceded to the revised Kyoto Convention.  
3.2.  Pursuant to the Law on the importers' register, any person or business seeking to import 
goods must be registered with the customs bureau or w ith the User Services Department in the 
Ministry of Finance.5 In order to streamline customs procedures, the requirement to obtain an 
"importer's tax identification number" (NIT) was abolished  as of 19 January 2015  and it is now 
possible to register using the ordinary NIT, the single identity document or a passport in the case 
of foreigners. The use of a customs agent or a special customs broker is optional, but they must 
have been previously authorized by the DGA.  
3.3.  Any import transaction must be covered by a goods declaration or by the Central American 
single customs form (FAUCA) in the case of goods of Central American origin, and must also be 
accompanied by original copies of the following documents as a minimum: commercial invoice; 
transport documents (bi ll of lading, air waybill or waybill for land transport); cargo manifest; 
licences, permits or other authorizations required for the goods to be imported; and a certificate of 
origin for goods entering under a preferential trade agreement.  
3.4.  For goods enteri ng by sea, carriers have to forward the cargo manifest to the Customs 
electronically at least 48 hours before the means of transport arrives and for goods arriving by air, 
the time -limit is two hours beforehand. Advance electronic forwarding of the manifes t is not 
required for land transport carriers, although for goods in transit the transit declaration has to be 
forwarded before the means of transport arrives at land customs posts.6 
3.5.  The goods declaration may be forwarded prior to arrival of the goods thro ugh Teledespacho, 
the DGA's computer system based on ASYCUDA++ (currently being migrated to ASYCUDA World). 
Import duties and the taxes applicable may be paid by bank transfer or over the counter at 
authorized banks, in offices authorized for this purpose or, since 2013, using P@GOES, the DGA's 
new electronic payment system.  
3.6.  Most of the services provided by the Customs come free of charge. Following the 
amendments to the Law streamlining customs procedures, a fee of US$18 was introduced for 
non-intrusive in spection services for each import or export of goods (except for international 
transit) as part of a comprehensive risk management system. This is intended to harmonize 
inspection procedures and help in detecting possible unlawful acts, thereby improving t he security 
of foreign trade transactions. This fee came into force in January  2014.  
                                                
1 Legislative Decree No.  903 of 12  January  2006 (last amended in October  2012).  
2 Legislative Decree No.  529 of 13  January  1999 (last amended in July  2012). The major amendments 
include the possibility of using non -intrusive customs inspection service s; the creation of an electronic register 
of customs controls in El Salvador; and the introduction of a fee whenever goods enter or leave the country.  
3 Legislative Decree No.  551 of 29  October  2001 (last amended in April  2008). This Decree and other 
legislation such as decrees, regulations and decisions relating to the customs regime are available at: 
http://www.mh.gob.sv/portal/page/portal/PMH/LAIP/MarcoNo rmativo/AdministracionAduanera . 
4 Viewed at: http://www.mh.gob.sv/portal/page/portal/PMH/Temas/Operaciones_Aduaneras . 
5 The following are exempt from registration: per sons or organizations belonging to the diplomatic or 
consular corps; emergency supplies; postal packages; travellers' luggage and household items; and small 
family consignments of a non -commercial nature.  
6 This does not apply to imports of goods in free m ovement coming from Honduras or Guatemala.  WT/TPR/S/344 • El Salvador  
- 41 - 
  3.7.  Any importer, exporter or producer may request the DGA for rulings or requirements prior to 
importing in relation to: the tariff classification of a good, determination of  its origin in order to 
benefit from a tariff preference, and the customs valuation requirements or methods applicable.7 
Advance rulings are binding on individuals and on the DGA.8 
3.8.  Using a risk management analysis, the DGA determines whether the importer m ay 
immediately withdraw the good to be imported (green channel or automatic release) or whether 
the documents have to be inspected (yellow channel) or there has to be both physical inspection 
and inspection of the documents (red channel) (Table 3.1). The a uthorities have indicated that the 
rising number of cases subject to inspection of documents is attributable to more stringent risk 
management, which lessens the number of cases subject to physical inspection.  
3.9.  The criteria used by the DGA to determine the level of risk include the background of the 
importer and/or exporter, the tariff classification, the origin, the value or the quantity of the 
goods, whether they are subject to permits or restrictions, and any mistakes in the import 
documents. According to  the authorities, the response time depending on the clearance procedure 
is: five minutes for the green channel; eight minutes for the yellow channel; and a maximum of 
24 working hours for the red channel, provided that the goods are available for physical  
inspection.9 
Table 3.1 Import declarations by type of clearance procedure, 2010 -2015  
(% of total)  
Year Inspection of documents  Physical inspection  Automatic release  
2010 2.2 9.4 88.4 
2011 1.2 9.2 88.6 
2012 1.5 8.8 89.7 
2013 1.8 8.6 89.6 
2014 10.8 9.1 80.1 
2015 17.8 7.2 75.0 
Note:  The information concerns definitive import procedures.  
Source:  Information provided by the Salvadoran authorities.  
3.10.   The DGA has the authority to carry out post -clearance control s. Importers must keep and 
make available to the DGA all the documents, books, accounts or any other information needed for 
subsequent controls for four years after clearance.10 Unpaid taxes and fines amounting to over 
US$5.1  million were imposed as a resul t of post -clearance controls carried out in 2015 (Table  3.2). 
Table 3.2 Post-clearance controls, 2010 -2015  
Year Total no. of cases closed  Amounts determined (US$  '000)  
2010 361 21,965.4  
2011 628 14,234.7  
2012 496 14,243.1  
2013 668 21,977.3  
2014 911 2,748.6  
2015 968 5,172.7  
Source:  Information provided by the Salvadoran authorities.  
3.11.    Importers or their representatives may appeal to the Director -General of Customs for 
review of rulings or decisions by the DGA within ten working days following notification of the 
ruling contested. The Director -General must decide on the appeal within 15 days of receiving the 
administrative file. Appeals against rulings by the Director -General may be made to the Internal 
Revenue and Customs Duty Appeals Court in accor dance with the procedures, time -limits and legal 
provisions governing action by the Court.11 Rulings by the Court exhaust administrative channels. 
The authorities have indicated that between 2010 and 2015 the Court  issued 333 rulings on 
                                                
7 A request for valuation does not have to be forwarded to the DGA prior to the import of used vehicles 
as their value can be determined on the basis of specialized reviews.  
8 Article  310 of RECAUCA IV.  
9 Online i nformation from the Ministry of Finance. Viewed at: 
http://www.mh.gob.sv/portal/page/portal/PMH/Temas/Operaciones_Aduaneras/Proceso_Despacho . 
10 Articles  208, 209 and 223 of RECAUCA IV.  
11 Articles 47, 49 and 51 of the Special Law on penalties for customs offences and Article  623 of the 
RECAUCA.  WT/TPR/S/344 • El Salvador  
- 42 - 
  customs matters, most of the cases concerning tariff classification or origin, and to a lesser extent 
customs valuation.  
3.12.   The single window for imports, which had been operating in the Ministry of Finance since 
2007, has been transfer red to the Import and Export Processing Centre (CIEX) at the Central 
Reserve Bank. The CIEX was created by the Legislative Decree of 20  January  2011 with the aim of 
centralizing, speeding up and simplifying procedures for the registration, authorization an d 
issuance of documents by various government authorities involved in controlling imports and 
exports. As regards exports, El Salvador already has an integrated computer system, SICEX, which 
allows businesses to obtain the customs documents needed for thei r export transactions via a 
single online procedure (Section 3.2). For imports, work on the gradual implementation of a 
similar computerized system, the SIMP, is under way to enable importers to obtain online the prior 
authorizations and permits needed to import chemicals, proprietary drugs, cosmetics, hygiene 
products and medical inputs, as of October 2016. It is hoped to incorporate all the authorizations 
from the Ministry of Agriculture by December  2016. For 2017, it is planned to include permits for 
food products in the SIMP through electronic exchange of data with the Ministry of Health's 
computer system and with the ASYCUDA World system operating in the DGA.  
3.13.   During part of the period under review, El Salvador implemented the Customs Programme 
for Busin ess Compliance (PACE), introduced in 2008 as the first step towards the introduction of 
the World Customs Organization's Authorized Economic Operator (AEO) scheme. The PACE was 
formally transferred to the AEO programme in 2013. The rules on implementation of the 
AEO programme are currently available to the export sector for consultation, although the 
programme itself has not yet come into effect.  
3.14.   El Salvador pursued its customs modernization efforts during the review period. In addition 
to the aforementione d projects, other measures adopted by the DGA or being implemented in 
order to facilitate trade and guarantee the logistics chain include: use of non -intrusive equipment 
at seven customs posts in the country12; the installation of video monitoring equipment ; the 
introduction of a selection and administration module for risk management; and a new electronic 
payment system (P@GOES). In addition, a project has been initiated for migration to the 
computerized ASYCUDA World customs system, which will contain all information on customs 
operations (including digital certificates) on a single technological platform, allowing the system to 
be linked to those of other national and regional bodies involved in controlling foreign trade 
operations. The authorities have in dicated that the migration is expected to be completed in 
August  2016.  
3.15.   As part of the Central American integration process, El Salvador has had "integrated 
customs posts" (juxtaposed) along its border with Guatemala since 2004. Under this scheme, 
users may  complete the relevant formalities at the customs post where the goods are imported, 
without having to go also to the export customs post, which facilitates and shortens the time 
required for clearance. Moreover, El Salvador and Honduras are working on a r oad map to 
establish a single border post at El Amatillo, for which they have requested international 
assistance.  
3.16.   Progress has also been made on the electronic exchange of information among 
Central  American customs authorities by means of the telematics in terconnection system, which 
has a regional node administered by the Secretariat for Central American Economic Integration 
(SIECA) and which acts as administrator for customs in the region. This system is being used for 
the electronic exchange of FAUCAs, fo r implementing the Mesoamerican Procedure for Goods in 
International Transit (TIM) and operates on the basis of a regional database of carriers. Work is 
also under way on other aspects such as the preparation of a Central American single customs 
declaratio n, the Authorized Economic Operator scheme and a mechanism to prevent double 
payment of customs duty under the customs union . 
3.17.   In 2009, El Salvador and Guatemala signed the Protocol Amending the Framework 
Convention on the Establishment of a Customs Union b etween the two countries, which provides 
for a transitional regime that will conclude with the elimination of customs posts at borders 
between the two countries. The Protocol is b eing examined by El Salvador's Legislative Assembly; 
                                                
12 In December  2013, the company UDP COTECNA SMITHS was given a concession for the goods 
inspection service using non-intrusive equipment, following an invitation to bid.  WT/TPR/S/344 • El Salvador  
- 43 - 
  nonetheless, both Govern ments have promoted bilateral initiatives in order to facilitate the 
movement of persons and goods and make procedures at the border more efficient, starting with 
the border post at La Hachadura, which is a vital crossroads for regional trade but faces con gestion 
problems. In October  2015, El Salvador announced that it would join the efforts being made by 
Guatemala and Honduras to promote the Central American Customs Union, which would involve 
the establishment of posts for the free movement of goods among these countries.13 
3.18.   Despite the action mentioned, the passage of goods through some of El Salvador's major 
land customs posts still faces problems of congestion and delays, partly owing to the opening 
hours and the limited physical infrastructure at these po sts. According to information from the 
World Bank, the time needed to import goods into El Salvador rose from ten days in 2009 to 
13 days in 2015; of these 13 days, three are taken up by customs clearance. Over the same 
period, El Salvador fell from 57th to 73rd place (out of a total of 189 economies) as regards the 
ease and cost of completing import and export formalities.14 On the other hand, an OECD report 
shows that most of El Salvador's trade facilitation indicators are the same or exceed average 
perfor mance for Latin America. Its performance generally improved between 2012 and 2015, 
except as regards fees and charges for customs formalities, streamlining documents and 
procedures, and cooperation between internal and external border agencies.15 
3.19.   El Salvado r has notified the WTO of its Category A commitments under the Trade Facilitation 
Agreement16, which El Salvador's Legislative Assembly ratified on 4  February  2016. At the time of 
writing this report, El Salvador had not yet deposited its instrument of rati fication with the WTO.  
3.1.2   Customs valuation  
3.20.   El Salvador has not so far notified the WTO of its customs valuation legislation and has not 
responded to the checklist of issues on customs valuation (contained in document G/VAL/5 of 
13 October  1995). El Salvador does not apply minimum values.  
3.21.   Since 2008, El Salvador's customs valuation regime has been based on CAUCA IV and its 
implementing Regulations (RECAUCA IV). The customs value of imported goods is usually the 
transaction value, including insurance and transp ort costs to the place of import and other c.i.f. 
charges. If no insurance policy has been taken out to cover transport of the goods, the Law 
streamlining customs procedures provides that 1.25% of the f.o.b. value should be applied when 
the goods come from  the Central American region and 1.50% when they come from outside 
the region.  
3.22.   RECAUCA IV prescribes the criteria according to which the Customs excludes from the 
customs value the interest owing under a financing agreement relating to purchase of the 
imported goods. If there have been several sales prior to import, the customs value is determined 
on the basis of the latest transaction value prior to submission of the import declaration.17 The 
customs value of data carrier media is determined on the basis of  the cost of the carrier medium 
(not the data).  
3.23.   If it is found necessary to postpone the final determination of value when deciding on the 
customs value of the goods, the importer may request that the goods be cleared provided that it 
posts security suffic ient to cover the amount of the tariffs and other taxes ultimately payable on 
the goods.18 
3.24.   In order to make it easier to determine the value, the DGA keeps a database with 
information on prices and publishes administrative regulations establishing reference  values for 
goods imported in the form of parcels, small consignments and postal packages, used spare parts, 
                                                
13 CentralAmericaData, Unión Aduanera en el Triángulo del Norte , 22 October  2015. Viewed at: 
http://www.centralamericadata.com/es/article/main/Unin_aduanera_en_el_Tringulo_Norte?u=6770c7ac850ce
5867c27589ab126d093&s=n&e=2&mid=%5BMESSAGEID  per cent5D . 
14 Online information from the W orld Bank. Viewed at: 
http://www.doingbusiness.org/data/exploreeconomies/el -salvador . 
15 OECD (2015).  
16 WTO document WT/PCTF/N/SLV/1 of 29  July 2014.  
17 Articles 190 and 192 of RECAUCA IV.  
18 Article 202 of RECAUCA IV.  WT/TPR/S/344 • El Salvador  
- 44 - 
  fruit and vegetables and in informal cross -border trade, which may be used if the importer has no 
commercial invoice and is unable to prove the pri ce actually paid or payable. Moreover, pursuant 
to the Law streamlining customs procedures (Article  5), the DGA makes available to users a 
service for consulting the value of various goods, automobiles, new and used ships and aircraft, in 
order to establis h the basis for calculating tariffs and other import taxes.19 
3.1.3   Rules of origin  
3.25.   El Salvador has notified the WTO that it does not apply non -preferential rules of origin.20 
3.26.   Preferential rules of origin are applied in connection with El Salvador's participation in the 
Central American Common Market (CACM) and under preferential trade agreements it has signed; 
the rules of origin in these agreements have been notified to the WTO.21 
3.27.   Not only do the preferential trade agreements signed by El Salvador lay down general  rules 
for determining origin, but they also provide for specific rules of origin. According to these, goods 
which have not been wholly obtained or produced in the territory of one of the signatory countries 
must meet certain substantial transformation cri teria, usually based on the principle of a change in 
tariff classification. The preferential rules of origin sometimes prescribe regional content 
requirements, which are applied separately or in combination with the change in tariff classification 
criterio n. 
3.28.   Under most agreements, the origin of a good is determined on the basis of a certificate of 
origin (using the appropriate form) submitted by the exporter or producer, without any need for 
subsequent authorization. Nevertheless in the preferential trade a greement with Chinese Taipei, 
the CIEX issues and authorizes the certificate of origin for Salvadoran exports and the competent 
authority in Chinese Taipei does the same for imported goods. Under the Partial Scope Agreement 
with Cuba, certificates of origi n must also be issued and authorized by the competent authority.22 
3.1.4   Tariffs  
3.29.   El Salvador applies the Central American Import Tariff (ACI), with a few exceptions. Any 
amendments to the Tariff have to be agreed by the Council of Ministers for Economic Integrati on, 
composed of the Ministers of the Economy of the CACM member countries. This is the only body 
empowered to change the rates in the ACI, which is based on the Harmonized Commodity 
Description and Coding System (HS) and currently follows the fifth Recomme ndation on 
amendment of the HS (HS 2012).  
3.30.   There are four basic rates in the ACI: 0% on raw materials and intermediate and capital 
goods not produced in the CACM; 5% on raw materials produced in the CACM; 10% on 
intermediate and capital goods produced in th e CACM; and 15% on finished goods.23 
CACM  member countries may apply different rates, but these must be approved by the Council of 
Ministers. It is estimated that the rates applicable to 93.3% of the ACI tariff lines have been 
harmonized among CACM member c ountries.  
3.31.   As a minimum, El Salvador gives MFN tariff treatment to both WTO Members and 
non-Members.  
                                                
19 The form for consulting the value (DVA -GT-008) is available on the Ministry of Finance's website at: 
http://www.mh.gob.sv/portal/page/portal/PMH/Temas/Operaciones_Aduaneras/Proceso_Despacho/Requisitos/
Otros . 
20 WTO document G/RO/N/10 of 16  August  1996.  
21 WTO documents G/RO/N/11 of 10  September  1996, G/RO/N/43 of 15  March  2004, G/RO/N/93 of 
9 April 2013 and G/RO/N/114 of 2  April 2014.  
22 The format for certificates of origin under El Salvador's various trade agreements can be found on the 
Ministry of the Economy's website at: 
http://www.minec.gob.sv/index.php?option=com_phocadownload&view=category&id=25:certificados -de-
origen&Itemid=63 . 
23 The ACI tariff rates are contained in Resolution No.  26-96 (COMRIEDRE IV) of 22  May 1996.  WT/TPR/S/344 • El Salvador  
- 45 - 
  3.1.4.1   Structure and levels  
3.32.   In 2015, El Salvador's applied tariff comprised 6,978 eight -digit lines, 414 more than in 
2010 (Table 3.3). El Salvador has no seasonal  or variable tariffs. All the 11 rates applied, which 
range from 0% to 164%, are ad valorem . Some 47.8% of the lines carry a 0% tariff, while 20.7% 
have a rate of 15% and 15.5% a rate of 10% (Chart 3.1).  
Table 3.3 MFN tariff structure, 2010 and 2015  
(%) 
  2010  
(HS07)  2015  
(HS12)  
1. Total number of tariff lines  6,564  6,978  
2. Non-ad valorem tariffs (% of all tariff lines)  0.0 0.0 
3. Non-ad valorem tariffs with no AVEs (% of all tariff lines)  0.0 0.0 
4. Tariff quotas (% of all tariff lines)  0.0 0.3 
5. Duty-free tariff lines (% of all tariff lines)  47.2 47.8 
6. Average of lines exceeding zero (%)  11.9 12.0 
7. Arithmetic average  6.3 6.3 
8. Agricultural products (WTO definition)  12.9 12.5 
9. Non-agricultural  products (including petroleum, WTO definition)  5.2 5.2 
10. National tariff "peaks" (% of all tariff lines)  2.8 2.7 
11. International tariff "peaks " (% of all tariff lines)  2.8 2.7 
12. Bound tariff lines (% of all tariff lines)  100.0  100.0  
a National t ariff peaks are defined as rates exceeding three times the overall simple average applied 
rate. 
b International tariff peaks are defined as rates exceeding 15%.  
Source:  WTO Secretariat estimates, based on data provided by the authorities.  
3.33.   The simple averag e MFN applied rate remained at 6.3% in 2015, the same level as that 
indicated in the previous review for 2009 (Table 3.4). Likewise, the coefficient of variation 
remained at 1.4. The simple average MFN tariff applied to agricultural products according to t he 
WTO definition was 12.5%, slightly below the 12.9% recorded in 2009. The highest rate, 164%, 
applies to imports of poultry meat of HS subheadings 02.07.13, 02.07.14 and  16.02.32.10, while 
the second highest rate of 55% still applies to cigarettes (HS 24 .02.20.00.00). A rate of 40% 
applies to around 70 tariff lines covering products such as sausages, dairy produce, rice, sugar, 
rum and ethyl alcohol. In 2015, the average rate applied to non -agricultural products was 5.2%, 
the same as in 2009. However, the  average tariff for Chapters 25 -97 of the HS (manufactures) 
shows that the average rate fell from 5.2% in 2009 to 4.8% in 2015. This to a large extent reflects 
the latest reduction in the average rates applicable to textiles and textile manufactures, from 
around 10% in 2009 to 8.1% in 2015. A closer look at tariffs by ISIC sector shows that the 
average applied rate for finished goods is higher than that for semi -finished goods, while that for 
raw materials is higher than that for semi -finished goods (Table 3.4). WT/TPR/S/344 • El Salvador  
- 46 - 
  Chart 3.1 Frequency distribution of tariff rates, 2015  
(47.8%)
(1.1%)(12.18%)(15.5%)(20.7%)
(0.4%) (0.3%) (0.7%)(0.2%)(1.1%)
0102030405060708090100
05001,0001,5002,0002,5003,0003,5004,000
Duty free 1 5 10 15 20 25 30 35 >35Number of linesaPercentage
Cumulative percentage
Number of lines (% of total)
 
a The total number of lines is 6,978.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
Table 3.4 Brief analysis of MFN rates, 2015  
Description of products  MFN Bound  
Number 
of lines  Average 
(%) Range 
(%) Coefficient of 
variation (CV)  Range  
(%) 
Total  6,978  6.3 0 - 164 1.4 0 – 164.4  
HS 01 -24 1,224  13.0 0 - 164 1.1 20 – 164.4 
HS 25 -97 5,754  4.8 0 - 30 1.3 0 - 80 
By WTO category       
Agricultural products  1,029  12.5 0 - 164 1.3 20 – 164.4  
Animals and animal products  154 25.8 0 - 164 1.2 20 – 164.4  
Dairy produce  34 26.2 0 - 40 0.5 20 - 45,1 
Fruit, vegetables and garden  produce  285 11.6 0 - 30 0.5 20 - 50 
Coffee and tea  29 13.3 0 - 15 0.3 40 - 70 
Cereals and preparations  133 9.1 0 - 40 1.0 20 - 78 
Oilseeds, fats and oils and their 
products  98 5.4 0 - 15 1.1 20 - 88 
Sugar and confectionery  21 26.2 0 - 40 0.6 40 - 70 
Beverages, spirits and tobacco  74 16.1 0 - 40 0.7 20 - 74 
Cotton  5 0.0 0 - 0 N/A 40 - 40 
Other agricultural products n.e.s.  196 4.1 0 - 15 1.3 20 - 40 
Non-agricultural products (including 
petroleum)  5,949  5.2 0 - 30 1.2 0 - 80 
Non-agricultural products  (excluding 
petroleum)  5,921  5.2 0 - 30 1.2 0 - 80 
Fish and fish products  288 11.6 0 - 15 0.4 25 - 70 
Metals and minerals  1,093  3.6 0 - 15 1.5 20 - 50 
Chem icals and photographic 
products  1,276  2.2 0 - 15 1.9 0 - 50 
Wood, wood pulp, paper and 
furniture  459 6.3 0 - 15 0.9 20 - 70 
Textiles  698 8.1 0 - 20 0.6 20 - 70 
Clothing  236 14.8 0 - 15 0.1 40 - 40 
Leather, rubber, footwear and 
travel articles  211 7.6 0 - 15 0.7 20 - 80 
Non-electrical machinery  595 1.4 0 - 15 2.8 0 - 50 
Electrical machinery  339 2.6 0 - 15 2.0 0 - 50 
Transport equipment  221 6.4 0 - 30 1.5 20 - 50 
Non-agricultural products n.e.s.  505 7.6 0 - 30 1.0 0 - 40 
Petroleum  28 4.7 0 - 15 1.1 40 - 40 WT/TPR/S/344 • El Salvador  
- 47 - 
  Description of products  MFN Bound  
Number 
of lines  Average 
(%) Range 
(%) Coefficient of 
variation (CV)  Range  
(%) 
By ISIC sectorb      
Agriculture and fishing  497 8.3 0 - 40 0.9 20 - 78 
Mining  112 1.7 0 - 15 1.9 20 - 40 
Manufacturing  6,368  6.2 0 - 164 1.4 0 – 164.4  
By HS section       
01  Live animals and animal products  449 15.3 0 - 164 1.1 20 – 164.4  
02  Vegetable products  419 9.0 0 - 40 0.9 20 - 78 
03  Fats and oils  57 7.5 0 - 15 0.8 20 - 88 
04  Prepared foodstuffs, etc.  299 16.2 0 - 164 1.0 20 - 164,4  
05  Mineral products  187 2.7 0 - 15 1.5 20 - 40 
06  Products of the chemical or allied 
industries  1,128  1.9 0 - 15 2.2 0 - 50 
07  Plastics and rubber  337 4.4 0 - 15 1.1 20 - 40 
08  Raw hides a nd skins  108 8.3 0 - 15 0.7 40 - 70 
09  Wood and articles of wood  139 7.8 0 - 15 0.7 20 - 70 
10  Pulp of wood, paper, etc.  292 5.1 0 - 15 1.1 20 - 70 
11  Textiles and textile articles  918 9.6 0 - 20 0.5 20 - 70 
12  Footwear and headgear  64 12.8 0 - 15 0.3 30 - 80 
13 Articles of stone  176 6.3 0 - 15 1.1 20 - 50 
14  Precious stones, etc.  54 6.9 0 - 15 0.8 20 - 40 
15  Base metals and articles thereof  702 3.2 0 - 15 1.6 20 - 50 
16  Machinery and appliances  980 2.1 0 - 15 2.3 0 - 50 
17  Transport equi pment  234 6.2 0 - 30 1.5 20 - 50 
18  Precision instruments  234 3.8 0 - 15 1.5 0 - 40 
19  Arms and ammunition  21 30.0 30 - 30 0.0 40 - 40 
20  Miscellaneous manufactured 
articles  171 10.7 0 - 15 0.5 20 - 40 
21  Works of art, etc.  9 7.8 5 - 10 0.3 40 - 40 
By stage of processing       
First stage of processing  913 7.0 0 - 40 1.1 20 - 78 
Semi-processed products  2,359  3.9 0 - 40 1.4 0 - 70 
Fully processed products  3,706  7.6 0 - 164 1,4 0 – 164.4  
N/A Not applicable.  
a The bindings are shown accor ding to the HS 2007 classification and the rates applied in HS 2012; 
there may, therefore, be differences between the number of lines included in this analysis.  
b ISIC (Rev.2), excluding electricity (one line).  
Source:  WTO Secretariat estimates, based on d ata provided by the authorities.  
3.1.4.2   Tariff bindings  
3.34.   El Salvador's tariff bindings appear both in Schedule LXXXVII annexed to the GATT 1994 
and in the list that preceded the Uruguay Round. El Salvador bound its entire tariff at 32 rates 
ranging from 0 to 164.4 %. Some 70% of tariff lines were bound at 40%. The Secretariat has not 
identified any tariff line whose applied rate exceeds the respective bound rate.24 In most cases, 
the applied rates are considerably lower than the bound rates.  
3.1.4.3   Preferential tariffs  
3.35.   El Salvador gives preferential tariff treatment to imports from other CACM members. Almost 
all imports from Costa Rica, Guatemala, Honduras and Nicaragua enjoy a rate of 0%, except for 
unroasted coffee and cane sugar from any of these countries, roasted coffee  from Costa Rica, 
ethyl alcohol from Costa Rica and Honduras, and distilled alcoholic beverages and petroleum 
products from Honduras.25 El Salvador applies MFN rates to these products.  
3.36.   El Salvador also grants preferential treatment to imports from countries  (or customs 
territories) with which it has signed preferential agreements and which meet the origin 
                                                
24 In undertaking this analysis, the Secretariat only took into account the tariff lines in El Salvador's 
revised tariff schedule that are strictly comparable with the HS 2012.  
25 Annex to Resolution No.  05-2006 (CEIE) of 16  June 2006 of the Executive Committee for Economic 
Integration.  WT/TPR/S/344 • El Salvador  
- 48 - 
  requirements therein: Chile; Chinese Taipei; Colombia; Cuba26; Dominican Republic 
(Central  America – Dominican Republic FTA); European Union; Mexico; Panama ; and the 
CAFTA -DR (Dominican Republic, Central America and United States FTA) (Tables  3.5 and  A3.1).  
Table 3.5 Analysis of the tariffs applied under trade agreements, 2015  
 Total  WTO categories  
Agricultura l products  Non-agricultural products 
(excluding petroleum)  
Average 
(%) Duty -free 
lines  Average 
(%) Duty -free 
lines  Average  
 (%) Duty -free 
lines  
MFN 6.3 47.8 12.5 27.7 5.2 51.3 
CAFTA -DR 0.4 97.7 2.7 84.5 0.0 100.0  
Chile 0.9 95.4 4.7 79.7 0.3 98.2 
Colombia 3.9 63.8 8.4 50.2 3.1 66.1 
Dominican Republic  0.3 98.6 2.2 91.9 0.0 99.9 
European Union  4.5 49.7 9.8 38.9 3.6 51.6 
Mexico  0.9 96.0 4.5 82.7 0.3 98.2 
Panama  2.2 84.5 5.4 80.4 1.7 85.1 
Chinese Taipei  4.0 61.3 8.8 46.0 3.2 63.8 
Note:  For this anal ysis, in those cases where the preferential tariff exceeds the MFN tariff, the latter has 
been used to calculate the average.  
Source:  WTO Secretariat estimates, based on data provided by the authorities.  
3.37.    The simple average of the tariffs applied by El Sa lvador to partners with which it has signed 
an FTA range from 0.3% (Dominican Republic) to 4.5% (European Union) (Table A3.1). In 2015, 
El Salvador applied a rate of 0% to around 80% of its tariff universe for all partners with which it 
had signed an FTA, with the exception of Chinese Taipei, which received this treatment for 57% of 
the tariff universe.  
3.38.   The average tariff was much higher for agricultural products than for non -agricultural 
products, ranging from 2.2% (Dominican Republic) to 9.8% (European Un ion) for the former 
and 0% (CAFTA -DR and Dominican Republic) to 3.6% (European Union) for manufactures.  
3.1.4.4   Tariff quotas  
3.39.   Under its WTO commitments, El Salvador agreed to open tariff quotas for imports of meat, 
milk, cheese, yellow maize, fats and oils, sugar,  tobacco and tobacco products. During the review 
period, it opened quotas only for Cheddar -type cheese (Section 4.1.2.2.1). It also applies tariff 
quotas for four agricultural products under its preferential agreements (Table A4.1).  
3.1.5   Other charges affecting  imports  
3.40.   The import and domestic sale of most goods (as well as the supply of services) is subject to 
payment of the property transfer and services tax (commonly known as value added tax (VAT))27, 
currently at a rate of 13%. In the case of imports, the tax base is the customs value plus tariffs 
and other applicable taxes, and for domestic goods it is the selling price plus the corresponding 
taxes.  
3.41.   Exemption from VAT applies, inter alia , to definitive imports of machinery which have been 
registered and author ized by the Ministry of Finance's Directorate -General of Internal Revenue and 
which are intended to become part of the fixed assets of a company in order to produce taxable 
goods or services and help to boost industrial conversion.28 Imports of buses and re ntal vehicles 
                                                
26 Under the Partial Scope Agreement with Cuba, El Salvador  grants preferences to only 716 tariff lines, 
corresponding to 10.2% of the tariff universe. Of this limited numb er of headings, 69.7% is duty-free and the 
remainder are subject to a fixed customs tariff as there are no tariff reductions under this agreement but 
rather tariff rebates, i.e. fixed percentages of rebates applied to the MFN tariff.  
27 Law on the tax on th e transfer of property and the supply of services, Legislative Decree No.  296 of 
31 July 1992 and amendments thereto.  
28 Article 200 of the RECAUCA and Articles 45(h) and 48(g) of the Law on the tax on the transfer of 
property and the supply of services.  WT/TPR/S/344 • El Salvador  
- 49 - 
  for public passenger transport are also exempt from VAT29, as are those of materials and 
equipment by duly authorized tourism companies.30 Services such as the following are 
VAT-exempt: public health; education; water supply; public land transp ort of passengers; and 
payment of insurance and reinsurance premiums.31 
3.42.   Specific taxes have to be paid on the following domestically produced or imported products: 
alcoholic beverages, alcohol, tobacco products, firearms, pyrotechnical products, aerated 
beverages, energy drinks, isotonic drinks, juices and soft drinks. Most of these products are also 
subject to ad valorem taxes under special laws. The taxes on these products are shown in 
Table  3.6. 
Table 3.6 Taxes on specific products, 2015  
HS 07 Code  Description  Amount of the tax  
Alcoholic beverages and drinkable ethyl alcohol  
2203.00.00  Beer made from malt  US$0.09 on each 1% of alcohol 
strength by volume per litre  
2204.10.00  Sparkling wine  US$0.09 on each 1 % of alcohol 
strength by volume per litre  
2204.21.00  
2204.29.00  
2204.30.00  Other wine; grape must with fermentation prevented or 
arrested by the addition of alcohol  US$0.09 on each 1% of alcohol 
strength by volume per litre  
2205.10.00  
2205.90.00  Vermout h and other wine flavoured with plants  
or aromatic substances   US$0.09 on each 1% of alcohol 
strength by volume per litre  
2206.00.00  Other fermented beverages; mixtures of fermented 
beverages and non -alcoholic beverages, not elsewhere 
specified or include d  US$0.09 on each 1% of alcohol 
strength by volume per litre  
2207.10.10  
2207.10.90  Ethyl alcohol  US$0.1 on each 1% of alcohol strength 
by volume per litre  
2208.20.10  
2208.20.90  Spirits obtained by distilling grape wine or grape marc  US$0.09 on each 1% of alcohol 
strength by volume per litre   
2208.30.10  
2208.30.90  Whisky  US$0.16 on each 1% of alcohol 
strength by volume per litre  
2208.40.10  Rum obtained by distilling fermented sugar -cane of an 
alcoholic strength by volume exceeding 37%  
 US$0.09 on each 1% of alcohol 
strength by volume per litre  
2208.40.10.80  Other rum of an alcoholic strength by volume of up to 37%  US$0.05 on each 1% of alcohol 
strength by volume per litre  
2208.40.90  Other rum and other sugar cane spirits  US$0.0325 on each 1% of alcoh ol 
strength by volume per litre   
2208.50.00  Gin and Geneva  US$0.16 on each 1% of alcohol 
strength by volume per litre   
2208.60.10  
2208.60.90.10  Vodka  US$0.09 on each 1% of alcohol 
strength by volume per litre   
2208.60.90.80  Other vodka  US$0.05 on each 1 % of alcohol 
strength by volume per litre  
2208.70.00  Liqueurs  US$0.16 on each 1% of alcohol 
strength by volume per litre  
2208.90.10  Undenatured ethyl alcohol  US$0.1 on each 1% of alcohol strength 
by volume per litre  
2208.90.90  Other (spirits)  US$0.09 on  each 1% of alcohol 
strength by volume per litre  
Aerated beverages  
2202.10.00  Carbonated or aerated beverages whether or not 
sweetened  US$0.2 per litre + 10%  
2202.90.90  Energizing or stimulating drinks  US$0.2 per litre + 10%  
2202.90.90  Isotonic or s ports drinks  US$0.2 per litre + 5%  
2202.90.90  Fortifying drinks  US$0.2 per litre + 5%  
2009 Juices  US$0.2 per litre + 5%  
2202.90.90  Nectars  US$0.2 per litre + 5%  
2202.90.90  Drinks containing juice  US$0.2 per litre + 5%  
2202.90.90  Soft drinks  US$0.2 per litre + 5%  
21.06.90.30  Concentrated preparations or powder  US$0.2 per litre + 5%  
Tobacco  
24.02.10.00  Cigars, cheroots and cigarillos containing tobacco  US$0.225 per unit + 39%  
24.02.10.00  Cigars  US$0.225 per unit + 100%  
24.02.20.00  Cigarettes co ntaining tobacco  US$0.225 per unit + 39%  
                                                
29 Article 45(i) of the Law on the tax on the transfer of property and the supply of services.  
30 Article 36(b) of the Law on tourism, Legislative  Decree No.  899 of 20  December  2005.  
31 Article 46 of the Law on the tax on the transfer of property and the supply  of services.  WT/TPR/S/344 • El Salvador  
- 50 - 
  HS 07 Code  Description  Amount of the tax  
24.02.90.00  Other (cigars, cigarillos and cigarettes of tobacco 
substitutes)  US$0.225 per unit + 39%  
24.03.10.10  Cut tobacco for rolling cigarettes  US$0.225 per gram + 39%  
24.03.10.90  Other (smoking tobacco, whet her or not containing 
tobacco substitutes in any proportion)  US$0.225 per unit + 39%  
24.03.91.00  "Homogenized" or "reconstituted" tobacco  US$0.225 per unit + 39%  
24.03.99.00  Other (tobacco and tobacco substitutes, processed; 
tobacco extracts and juices )  US$0.225 per unit + 39%  
Firearms, ammunition, explosives and like articles  
3601.00.00  Propellant powders  30% 
3603.00.00  Safety fuses; detonating fuses; percussion or detonating 
caps; igniters; electric detonators  30% 
3604.10.00  Fireworks  30% 
3604.9 0.00 Other ( signalling flares, rain rockets, fog signals and other  
pyrotechnic articles)  30% 
9302.00.00  Revolvers and pistols, other than those of heading 93.03 
or 93.04  30% 
9303.10.00  Muzzle -loading firearms  30% 
9303.20.00  Other sporting, hunting or t arget-shooting shotguns, 
including combination shotgun -rifles  30% 
9303.30.00  Other sporting, hunting or target -shooting rifles  30% 
9303.90.00  Other (firearms and similar devices which operate by the 
firing of an explosive charge)  30% 
9305.10.00  Parts and accessories of revolvers or pistols  30% 
9305.20.10  Shotgun barrels  30% 
9305.20.90  Other (parts and accessories of shotguns)  30% 
9305.99.00  Other (parts and accessories of articles of headings 93.01 
to 93.04)  30% 
9306.21.00  Cartridges  30% 
9306.2 9.00 Other (air gun pellets)  30% 
9306.30.10  Cartridges for riveting or similar tools or for captive bolt 
humane killers and parts thereof  30% 
9306.30.90  Other cartridges and parts thereof  30% 
9306.90.00  Other (bombs, grenades, torpedoes, mines, missil es, etc.)  30% 
Source:  WTO Secretariat, on the basis of  Legislative Decree No.  540 of 22  December  2004, Legislative 
Decree No.  237 of 21  December  2009, Legislative Decree No.  235 of 21  December  2009 and 
Legislative Decree No.  462 of 9  September  2010.  
3.43.   Durin g the period under review, taxes on some of the aforementioned products were 
raised  or amended. In December  2009, a new law was adopted introducing a specific tax of 
US$0.20 per litre on energizing or stimulating drinks. A 10% ad valorem tax was also appli ed on 
unsweetened carbonated or aerated beverages and energy drinks (which already existed), as well 
as a new 5% ad valorem tax on isotonic and fortifying drinks, juices, nectars and soft drinks.32 The 
tax base is the recommended retail selling price, exclu ding VAT.  
3.44.   As a result of amendments to the respective legislation, in 2010 the ad valorem  tax on 
alcoholic beverages rose (from 5% to 8%), as well as the tax on the alcoholic strength of 
beverages.33 The specific tax on cigarettes and other tobacco products  was also increased (from 
US$0.005 to US$0.225 per unit) and the ad valorem tax of 39% on the retail selling price, 
excluding VAT, for cigarettes and 100% for cigars were retained.34 
3.45.   December  2009 saw the publication of the Law on the special tax on fuel, w hich introduced 
an ad valorem tax on the distribution of gasoil, diesel fuel, petrol and their mixtures with other 
fuels. The tax base is the international reference price for fuel, published quarterly by the Ministry 
of the Economy. The rate is 1% when th e reference price for a barrel of oil is below US$50.00, 
0.5% when it is between US$50.00 and US$70.00, an d 0% if the price exceeds US$70. 00.35 
                                                
32 Law on the tax on aerated, isotonic, fortifying or energizing beverages, juices, nectars, soft drinks 
and concentrated preparations or powder for the preparation of beverages, Decree No.  237 of 
21 December  2009; repeals the Law on the tax o n sweetened or unsweetened aerated beverages (1996).  
33 Legislative Decree No.  462 of 9  September  2010 amending the Law regulating the production and 
sale of alcohol and alcoholic beverages (1996).  
34 Legislative Decree No.  235 of 21  December  2009 amending t he Law on the tax on tobacco products 
(2004).  
35 Law on the special tax on fuel, Decree  No. 225 of 12  December  2009.  WT/TPR/S/344 • El Salvador  
- 51 - 
  3.1.6   Import prohibitions, restrictions and licensing  
3.46.   Legislative Decree No.  647 of December  1990 bans the import of so me products and 
reserves the import of others to the State alone (Table 3.7). For reasons of road safety, it is 
forbidden to import used heavy duty or light freight or passenger vehicles over a certain number of 
years.36 El Salvador also prohibits the impor t of certain products under international conventions, 
for example, the environmentally harmful substances and residues covered by the Montreal 
Protocol.  
Table 3.7 Prohibited imports and imports reserved for t he State, 2015  
Articles prohibited  
Abortifacients  
Discs of metal or their alloys used to replace coins  
Figures and statues; pamphlets; almanacs, reviews, lithographed or engraved articles, newspapers, lithographs, cards 
or other articles of an obscene n ature  
Books, pamphlets, signs, slogans, emblems, posters and other articles of a subversive nature or doctrines contrary to 
the State's political, social and economic order  
Coin-making machines and tools  
Slot machines  
Smooth -worn silver coins of a f ineness of less than 0.900  
False coins and banknotes  
Opium containing less than 9% of morphine, opium cinders, opium ash, and appliances for smoking opium   
Unstamped cigarette paper, white or coloured, in folds, rolls, reels, booklets or small tubes  
Films contrary to ethics and morals  
Roulette games, gaming tables and any other equipment or artefacts for prohibited games   
 
Articles which may only be imported by the State  
Military aircraft  
Raw sugar cane spirit  
Warships of any draught, including submarines and landing craft  
Military rifles  
Gas masks for military uses  
Nickel coins in legal circulation  
Ammunition and war supplies  
Potassium nitrate (nitre salt, saltpetre, kalium nitricum)  
Stamped cigarette paper, white or coloured, in folds, ro lls, reels, booklets or small tubes  
El Salvador army regulation pistols  
Pistols and revolvers of any type, of 41 or higher calibre  
Silencers for firearms of all kinds  
Revenue or municipal stamps, postage stamps and other revenue stationery  
Source:  Legislative Decree No.  647 of 20  December  1990.  
3.47.   The import of a number of products is restricted for reasons of public safety, public health, 
animal or plant health or environmental protection. Permits, authorizations, certificates and/or 
approval must be  obtained for their import. For example, over 1,000 eight -digit tariff lines 
covering products such as food preparations, raw materials and food additives, chemicals and 
preparations for use in the pharmaceutical and cosmetics industries require a permit f rom the 
Ministry of Health (MINSAL) and "approval" from the National Directorate of Medicines. Table  3.8 
provides a summary of goods whose import is subject to a restriction as well as the relevant 
regulatory institutions. The DGA's website indicates the r equirements for importing each of these 
products.37 
                                                
36 The number of years depends on the type of vehicle and is specified in Legislative Decree No.  288 of 
22 May 2007 amending the Law on road transport, transit and road safety.  
37 Online information from the DGA. Viewed at: 
http://appm.aduana.gob.sv/sacelectronico/GUIL/PermisosInstituciones.aspx . WT/TPR/S/344 • El Salvador  
- 52 - 
  Table 3.8 Goods subject to import permits, authorizations or approval, 2015  
Description  Reason  Regulatory 
institution  Legal basis  
Alcohol  Public health  Ministry of Health 
(MINSAL)  Law regulating the production and sale of 
alcohol and alcoholic beverages  
Prepared foodstuffs, raw 
materials and additives for 
food and beverages, chemicals 
and compounds, 
pharmaceuticals, fertilizers and 
preparations for 
pharmace utical use and 
cosmetics  Public health  Ministry of Health 
(MINSAL) and 
National Directorate 
of Medicines  Health Code; Law on medicines; 
Regulations on proprietary drugs  
Arms, ammunition, explosive 
and pyrotechnical articles  Public safety  Ministry of Nat ional 
Defence  Law on the control and regulation of 
firearms, ammunition, explosives and 
similar articles; Special Regulations on the 
control and regulation of explosive -type 
articles  
Narcotics, psychotropic drugs, 
aggregated products, 
precursors, chemical  
substances and veterinary and 
anaesthetic products  Public health  Ministry of Health 
(MINSAL) and 
National Directorate 
of Medicines  Law regulating activities concerning drugs; 
Regulations on narcotics, psychotropic 
drugs, precursors, chemical and 
aggregat ed substances and products; Law 
on medicines  
Source and equipment 
generating ionizing radiation  Public health  Ministry of Health 
(MINSAL)  Special Regulations on radiological 
protection and safety  
Hydrocarbons  Protection of the 
environment  Ministry of  the 
Economy  Law regulating the storage, transport and 
distribution of petroleum products  
Plants and animals and their 
products  Sanitary and 
phytosanitary 
protection  Ministry of 
Agriculture and 
Livestock  Law on plant and animal health  
Chemical and 
chem ical-biological products 
for agricultural, livestock or 
veterinary use  Sanitary and 
phytosanitary 
protection  Ministry of 
Agriculture and 
Livestock  Law on plant and animal health; Law on 
the control of pesticides, fertilizers and 
products for agricultural use and the 
Regulations implementing the Law  
Ozone -depleting substances  Protection of the 
environment  Ministry of the 
Environment and 
Natural Resources 
and Ministry of 
Health (MINSAL)  Law on the environment; Special 
Regulations on the control of 
ozone -depleting substances; Montreal 
Protocol  
Hazardous substances  Public health and 
protection of the 
environment  Ministry of the 
Environment and 
Natural Resources  Law on the environment; Special 
Regulations on hazardous substances, 
residues and waste  
Wildli fe Protection of the 
environment  Ministry of the 
Environment and 
Natural Resources  Law on wildlife conservation  
Source:  WTO Secretariat, on the basis of online information from the Directorate -General of Customs and the 
WTO (2010).  
3.48.   El Salvador has notifi ed the WTO of the legal instruments containing information on import 
licensing procedures for goods subject to tariff quotas.38 In accordance with its commitments 
under the Agreement on Import Licensing Procedures, in April  2016 El Salvador notified the WTO  
of a change to the regulations on the opening of tariff quotas for some agricultural products, and 
replied to the questionnaire on import licensing procedures under which tariff quotas are 
allocated.39 
3.1.7   Anti-dumping, countervailing and safeguard measures  
3.49.   El Salvador did not apply any anti -dumping or countervailing measure over the period 
January  2010 to December  2015, and did not initiate any relevant investigations.  
3.50.   El Salvador's regulatory framework for anti -dumping and countervailing measures includes 
the respective WTO Agreements (which became national laws when El Salvador ratified the 
Marrakesh Agreement) and the Central American Regulations on Unfair Business Practices, 
approved in 2007.40 These Regulations were notified by El Salvador41 and examined by the WTO 
                                                
38 WTO docume nt G/LIC/N/SLV/1 of 3  February  2004.  
39 WTO documents G/LIC/N/2/SLV/1 and G/LIC/N/3/SLV/1, both of 27  April 2016.  
40 Article  4 of the Central American Regulations provides that all substantive aspects relating to unfair 
business practices are to be resolved in accordance with the WTO Agreements.  WT/TPR/S/344 • El Salvador  
- 53 - 
  Committee on Anti -Dumping Practices and Committee on Subsidies and Countervailing Measures.42 
In line with the Ministry of the Economy's internal regulations, it is the responsibility of the 
Ministry's Directorate for the Administration of Trade Agr eements (DATCO) to conduct 
investigations and apply the corresponding trade defence measures.  
3.51.   El Salvador did not apply any safeguard measures or initiate any related investigations 
during the period under review. In addition to the WTO Agreement on Safegu ards, which 
constitutes domestic law, the Salvadoran safeguards regime is based on the Central American 
Regulations on Safeguard Measures approved in 2007, which were notified to the WTO43 and 
examined by the competent Committee.44 Under these Regulations (A rticle 3), El  Salvador 
exempts other CACM countries from the application of safeguard measures, provided that the 
imports do not account for a substantial share of total imports and do not cause or threaten to 
cause serious injury.  
3.52.   By means of Decree No.  212 of 10  December  2015, the Legislative Assembly approved the 
Special Law on trade defence, published on 11  January  2016.45 The Law came into force on 
12 February  2016 and combines the provisions on dumping, subsidies and safeguard measures in 
a single legi slative instrument. It specifies the requirements, time -limits and procedures for 
conducting dumping and subsidy investigations, and for investigating and countering massive 
increases in imports that may cause injury to a domestic industry. It also lists t he information 
required for submitting requests for investigations. The Ministry of the Economy's DATCO is the 
authority empowered to conduct investigations and, where necessary, to propose the application 
of trade defence measures. It has the authority to  conduct investigations pursuant to the Law and 
to the trade agreements signed by El Salvador, and it may be involved in legal defence in 
connection with dispute settlement mechanisms. Its responsibilities also include technical 
assistance to Salvadoran ex porters affected by investigations by foreign authorities. In addition to 
the WTO Agreements, the legislation of other Latin American countries was taken into account in 
drafting this Law. 
3.53.   One particular aspect of the new Law is the creation of the Nationa l Trade Defence System 
to serve as a platform for dialogue between the public and private sectors  in order to examine and 
promote trade defence measures for El Salvador's production sectors. Such measures include: 
promoting approval of legal instruments th at reinforce trade defence; seeking information on the 
existence of unfair trade practices in the market and recommending to the competent authority 
the initiation of an investigation; conducting investigations of Salvadoran companies for alleged 
unfair tr ade practices abroad; monitoring trade flows in order to detect possible triangular 
transactions in products and recommending the initiation of investigations relating to origin; 
recommending the development of early warning systems regarding trade rules i mposed on 
Salvadoran exports by destination countries; and obtaining information on technical barriers 
affecting exporters and importers and making proposals for overcoming them.  
3.1.8   Technical regulations and standards  
3.54.   El Salvador does not have any special leg islation for implementing the Agreement on 
Technical Barriers to Trade (TBT) as the TBT Agreement has become national law as a result of 
ratification of the Marrakesh Agreement.46 The Ministry of the Economy's DATCO acts as the 
national enquiry point for th e purposes of paragraphs 1 and 3 of Article  10 of the TBT  Agreement47 
and is also responsible for making the notifications required by the Agreement.  
3.55.   During the review period, a specific trade concern was raised in the WTO TBT Committee 
with regard to the Law on hygienic production of milk and milk products and the regulation of their 
sale in El  Salvador. At the Committee's meetings in November  2011 and March  2012, Mexico 
                                                                                                                                                  
41 WTO document G/ADP/N/1/SLV/3 and G/SCM/N/1/SLV/3 of 8  April 2008.  
42 Questions from Members and El Salvador's replies can be found in WTO documents 
G/ADP/Q1/SLV/4 -7 and G/SCM/Q1/SLV/4 -7 of various dates (October  2008 to May  2009).  
43 WTO document G/SG/N/1/SLV/3 of 10  March  2008.  
44 WTO documents G/SG/Q1/SLV/3 -6 of various dates (October  2008 to May  2009).  
45 Official Journal No.  6, Volume No.  410, of 11  January  2016. The Regulations implementing this Law 
are being drafte d. 
46 WTO document G/TBT/2/Add.78 of 22  March  2004.  
47 WTO document G/TBT/2/Add.78/Suppl.1 of 8  December  2008. See also online information from the 
WTO at: http://tbtims.wto.org/we b/pages/settings/country/Selection.aspx . WT/TPR/S/344 • El Salvador  
- 54 - 
  declared that this Law prevented its exports of milk, cream and cheese made using powde red milk 
and/or vegetable fat. El Salvador responded that this Law was meant  to ensure human health, was 
based on international standards and did not make any distinction between the marketing of 
national and foreign products.48 Bilateral discussions contin ued and the matter was not brought 
before the Committee again.  
3.56.   El Salvador submitted 54 notifications to the TBT Committee between January  2010 and 
August  2015: three in 2015, eight in 2014, nine in 2013, 14 in 2012, ten in 2011 and ten in 2010. 
Close to o ne half of the measures notified concerned foodstuffs (honey, sugar, salt, cornflour, 
fish products, dairy produce, pig meat, fruit and garden produce, tomato sauce, etc.) with the 
objective of ensuring food safety and protecting human health. Another obje ctive often mentioned 
was protecting consumers. With the exception of one case (an emergency notification), all the 
other notifications gave a period of 60 days for sending in comments and in some instances this 
period was subsequently extended.  
3.57.   The author ities estimate that around 70% of El Salvador's technical regulations and 
conformity assessment procedures are based on international standards.  
3.58.   El Salvador has not notified the WTO of any mutual recognition agreement on technical 
regulations, conformity a ssessment procedures or standards.  
3.59.   Until September  2011, the National Science and Technology Council (CONACYT) was the 
body responsible for coordinating the preparation of technical regulations and conformity 
assessment procedures. This changed following t he entry into force of the Law creating the 
Salvadoran quality system (4  September  2011), which introduced a new legal -institutional 
framework for El Salvador's quality and standardization system. This Law established the National 
Quality Council and four other bodies: the Salvadoran Technical Regulation Agency (OSARTEC), 
the Salvadoran Standardization Agency (OSN), the Salvadoran Accreditation Agency (OSA) and 
the Metrological Research Centre (CIM).49 
3.60.   Technical regulation activities were entrusted to OSARTE C, whose responsibilities include 
coordinating the adoption, adaptation, updating and publication of Salvadoran technical regulations 
(RTS) – previously known as "Salvadoran mandatory standards (NSO)" – issued by various 
government authorities. The Law spe cifies that  technical regulations must comply with the 
provisions in the WTO TBT Agreement and the WTO Agreement on the Application of Sanitary and 
Phytosanitary Measures (SPS Agreement). OSARTEC's tasks include the following: complying with 
existing inter national guidelines and with El Salvador's technical regulation commitments; giving 
approval for the technical regulations drawn up by the competent regulatory authorities before 
they are published and respecting the time -limits set in the WTO; ensuring th at the authorities 
comply with the proper procedure for national and international public consultation and take into 
account the comments resulting therefrom; informing the WTO enquiry point (DATCO) of draft 
technical regulations to be notified; and keepin g a public database of technical regulations.50 
3.61.   OSARTEC has drawn up a handbook of good technical regulation practice s, which indicates 
the principles and stages in drafting, reviewing and approving technical regulations, including 
public consultation and i nternational notification.51 These are described in the flow chart in 
Chart  3.2. 
3.62.   Any interested party may request OSARTEC to prepare a technical regulation and, in 
consultation with the competent regulatory authority, OSARTEC considers whether the request 
should be included in the Annual Technical Regulations Plan. Once a preliminary draft technical 
regulation has been included in the Plan, OSARTEC checks whether it complies with international 
standards. It then sets up a national technical regulation commit tee, composed of representatives 
of the public sector, which is responsible for drawing up the draft technical regulation and 
addressing any related questions or comments. The period for both national and international 
                                                
48 WTO documents G/TBT/M/55 of 9  February  2012 and G/TBT/M/56 of 16  May 2012.  
49 Law creating the Salvadoran quality system, Decree No.  790, published on 26  August  2011.  
50 Article 14(d) and Article 16 of the Law crea ting the Salvadoran quality system, Decree No.  790 
of 2011.  
51 The handbook may be viewed on OSARTEC's website at: 
http://osartec.gob.sv/jdownloads/PDF /Guía%20de%20BPR%2011%20diciembre%202013_COMPLETO.pdf . WT/TPR/S/344 • El Salvador  
- 55 - 
  public consultation is 60 calendar da ys, which may be extended by a further 30  days.52 Any 
comments arising from the consultation are reviewed in joint meetings convened by OSARTEC, in 
which public, private, academic and scientific sectors, consumers and NGOs participate. Once the 
technical re gulation has been approved by the National Technical Regulation Committee, OSARTEC 
forwards it for endorsement to the competent regulatory authority, which then issues the relevant 
legal instrument and transmits it for publication in the Official Journal.  
Chart 3.2 Flow chart for the drafting of technical regulations  
 
Any comments 
received  
No 
Yes 
INITIATION  
CONCLUSION  
Stage 9  
Publication of the technical 
regulation in the Official 
Journal  
Stage 8  
Forwarding of the technical 
regulation to the competent 
regulatory authority  
Stage 5  
National public consultation 
and international notification  
Stage 6  
Post-public consultation  and 
international notification  
Stage 7  
Approval of the technical 
regulation  
Stage 4  
Meetings of the National 
Regulation Committee  
(all sectors)  
Stage 3  
Coordination of the 
convening  of the National 
Regulation Committee  
(all sectors)  
Stage 2  
Establishment of the 
National Regulation  
Committee ( on an 
interinstitutional basis ) 
Stage 1  
Investigation and 
examination of national and 
international guidelines, 
standards and handbooks  
Examina tion by the National 
Regulation  Committee  
(all sectors)   
 
Source:  Online information from OSARTEC, Guía de buenas prácticas de reglamentación técnica . 
Viewed  at: http://osartec.gob.sv/index.php/component/k2/item/62 -guia-de-buenas -practicas . 
3.63.   OSARTEC has an inventory of RTSs on its website, as well as an inventory of NSOs, the 
term used prior to the entry into forc e of the Law creating the Salvadoran quality system. Both 
inventories show the mandatory technical regulations in force.53 
3.64.   Conformity assessment procedures for technical regulations are prepared according to the 
same procedure as that used to prepare techni cal regulations. Conformity assessment of technical 
regulations is conducted in the market.  
3.65.   As a participant in the CACM, El Salvador applies the Central American Regulations on 
Standardization Measures, Metrology and Authorization Procedures, as well as t he Central 
American Technical Regulations (RTCA) approved within this framework. There is also an inventory 
of RTCAs on OSARTEC's website and at the time of writing this listed 72 RTCAs in effect.54 
OSARTEC is undertaking a study to identify and eliminate a ny inconsistencies between NSOs, 
RTCAs and the applicable legislation. The handbook of good technical regulations practices 
provides for the review of technical regulations, but does not determine any specific periods for it. 
It is up to OSARTEC to elimina te out -of-date technical regulations.  
3.66.   The OSN is responsible for "… drafting, updating, adopting, adapting, repealing and 
publishing standards which facilitate conformity assessment and the development of production 
sectors and for providing the bases for improving the quality of products, processes and 
                                                
52 In the case of an emergency technical regulation, there is no public consultation and the regulation 
comes into effect for a period of one year as of the date of international notification.  
53 Availa ble at: http://osartec.gob.sv/index.php/servicios/centro -de-informacion/inventario -nso. 
54 Available at: http://osartec.gob.sv/index.php/servicios/centro -de-informacion/inventario -rtca. WT/TPR/S/344 • El Salvador  
- 56 - 
  services".55 It is also entrusted with preparing the annual standardization programme, creating 
technical standardization committees and keeping a database of technical standards56, which are 
voluntary. Betwee n 2013 and 2015, the OSN approved 727 Salvadoran technical standards 
relating to the environment, tourism, the food industry, suppliers of medical inputs, coffee growers 
and manufacturers of medicines, inter alia .57 
3.67.   Salvadoran technical standards are drawn up by technical standardization committees 
(CTN), set up by the OSN at the request of a natural or legal person. The CTNs comprise 
representatives of the Government, the production sector, associations, universities, research 
institutes, laboratories, serv ice companies, consumers and experts in the relevant field. After a 
preliminary draft technical standard has been prepared, it is put up for public consultation 
(60 days). The CTN reviews all the comments received as a result of the consultation and, after  
taking them into account, a draft Salvadoran technical standard is drawn up for approval by the 
OSN. Once the draft has been approved, time is given for its dissemination so that its content and 
applicability can be made known.  
3.68.   The OSN is responsible for conformity assessment through the certification service for 
products, systems, services and competence of persons, taking into account national and 
international criteria and standards. So far, certification has been given for products 
(dairy  produce), qua lity management systems on the basis of standard NTS ISO 9001:2008 and 
for NSO -compliant energy efficiency.  
3.69.   In 2012, El Salvador became a member of the International Organization for 
Standardization (ISO), where it is represented by the OSN; it also takes part in the International 
Electrotechnical Commission. At the regional level, it belongs to the Pan  American Standards 
Commission (COPANT), the Central American and Caribbean Standardization Commission, and the 
Inter-American Metrology System.  
3.70.   The OSA has responsibility for accrediting calibration laboratories, testing or samples, 
inspection agencies, certification agencies and any other compatible system; until 
September  2011, this task was carried out by CONAYCT. The OSA must work on the basis of the 
criteria laid down in ISO standards and guides, the guidelines of Inter American Accreditation 
Cooperation (IAAC), International Laboratory Accreditation Cooperation (ILAC), and the 
International Accreditation Forum (IAF).58 The requirements for requesting accr editation and the 
stages in the procedure are described on the OSA's website.59 By April  2016, the OSA had 
accredited the tests of 22 laboratories, together with five calibration laboratories, two quality 
management system certification bodies and three ins pection bodies.60 
3.71.   The CIM is in charge of organizing the national metrology system; it acts as the national 
metrology laboratory for the Salvadoran quality system; ensures dissemination and traceability of 
the measurements of the International System of Uni ts; provides laboratories and verification 
agencies with services for calibrating standard models and measuring instruments and issues the 
relevant certificates.  
3.1.9   Sanitary and phytosanitary measures  
3.72.   In addition to the WTO Agreement on the Application of San itary and Phytosanitary 
Measures (SPS Agreement), which is domestic law in El Salvador, the legal framework for sanitary 
and phytosanitary measures is mainly based on the Law on plant and animal health61; the 
Regulations on the preparation of standards cont aining phytosanitary and animal health measures 
                                                
55 Article 16 of the Law creating the Salvadoran quality system.  
56 The catalogue of technical standards may be viewed on the OSN's website at: 
http://www.osn.gob.sv/index.php?option=com_content&view=article&id=122&Itemid=220 . 
57 Information provided by the Salvadoran authorities. See also OSN (2014 ). 
58 Article 14 of the Law creating the Salvadoran quality system.  
59 Online information from the OSA. Viewed at: 
http://www.osa.gob.sv/index.php?option=com_cont ent&view=article&id=199&Itemid=141 . 
60 Information provided by the Salvadoran authorities.  
61 The Law on plant and animal health, Legislative Decree No.  524 of 18  December  1995, was amended 
by Legislative Decree No.  917 of 15  December  2005 and Legislative D ecree No.  472 of 5  September  2013. The 
latter amends aspects relating to quality control of inputs for agricultural use, violations resulting from unlawful 
use of such inputs and the corresponding penalties.  WT/TPR/S/344 • El Salvador  
- 57 - 
  in accordance with the Law on plant and animal health62; the Health Code; and the Law creating 
the Salvadoran quality system. Other relevant legislation includes: the Law on seeds; the Law on 
the control of pe sticides, fertilizers and products for agricultural use; the Law on health inspection 
of meat; and the Law on the hygienic production of milk and milk products and the regulation of 
their sale. 
3.73.   Within the CACM, El Salvador applies the Central American Regu lations on Sanitary and 
Phytosanitary Measures and Procedures, whose purpose is to regulate sanitary and phytosanitary 
measures that may directly or indirectly affect intraregional trade and prevent them becoming 
unnecessary barriers.63 It should be noted t hat CACM member countries have adopted various 
Central American technical regulations relating to food and beverages, agricultural inputs and 
agricultural chemicals, seeds, veterinary products and animal feed, inter alia . 
3.74.   El Salvador is a member of the Cod ex Alimentarius and the World Organisation for Animal 
Health (OIE) and has signed the International Plant Protection Convention (IPPC). At the regional 
level, it belongs to the Regional International Organization for Plant and Animal Health (OIRSA).  
3.75.   The Mi nistry of Agriculture and Livestock (MAG), through the Directorate -General of 
Livestock and the Directorate -General of Plant Health (which have been separate Directorates 
since February  2010), is responsible for issuing regulations on animal and plant heal th, agricultural 
quarantine and the registration and control of agricultural inputs. The MAG follows the same 
procedure for drafting and adopting SPS measures as that used for technical regulations. The 
Ministry of Health, through the Food Control and Hygi ene Unit in the Environmental Health 
Directorate, is in charge of food safety.  
3.76.   DATCO within the Ministry of the Economy acts as the national enquiry point and is 
responsible for notifications in connection with the SPS Agreement.64 El Salvador notified 
33 sanitary and/or phytosanitary measures to the WTO SPS Committee between January  2010 and 
August  2015, of which four were emergency measures. Regular notifications provide for a period 
of 60 days in which to forward comments. Of the total, 19 concerned an in ternational standard 
(Codex Alimentarius, OIE or IPPC). No Member raised any trade concern with the SPS  Committee 
regarding El Salvador's sanitary or phytosanitary measures during the review period.  
3.77.   El Salvador recognizes the sanitary registration issued b y Guatemala, Honduras, Nicaragua 
and Costa Rica for food and beverages65, and recognizes the registration issued by the relevant 
authorities in CACM member countries for fertilizers, pesticides and other agricultural inputs.66 In 
application of the CAFTA -DR Agreement, El Salvador recognizes as equivalent the United States 
system for the inspection of meat and poultry and also recognizes as equivalent Chile's sanitary 
measures for fish product inspection systems.67 El Salvador has not notified the WTO of any 
agreement on recognition of the equivalence of sanitary and phytosanitary measures.  
3.78.   Under the Law on plant and animal health, animals, plants, and their products and 
by-products may be imported only if the Directorate -General of Livestock or the 
Directorate -General of Plant Health, as appropriate, has approved the sanitary or phytosanitary 
inspection and food safety systems in the country of origin (or where applicable, of the individual 
facilities or establishments).68 Only the competent national authorities in the country seeking to 
export to El  Salvador may request the conduct of a sanitary or phytosanitary evaluation. Based on 
its results, the Directorate -General of Livestock and the Directorate -General of Plant Health, 
respectively, decide whether sanitary  or phytosanitary requirements should be laid down for 
imports of the product in question. These requirements are based on the relative risk of the 
product and may consist of certificates issued by the exporting country, analysis at the point of 
entry into  El Salvador and special treatment or quarantine. The procedure for drafting and 
                                                
62 Executive Decree No.  45 of 10  June 1997.  
63 Resolution No.  271-2011 (COMIECO -LXI). 
64 WTO document G/SPS/ENQ/16 of 12  August  2015.  
65 Resolution No.  92-2002 (COMIECO -XXIV).  
66 Law on the control of pesticides, fertilizers and products for agricultural use, Legislative Decree 
No. 315 of 10  May 1973.  
67 Executive Decision No.  18-2015, Official Journal No.  28, Volume No.  406, of 11  February  2015.  
68 Article  13 of the Law on plant and animal health.  WT/TPR/S/344 • El Salvador  
- 58 - 
  adopting sanitary and phytosanitary requirements is the same as that for technical regulations 
(Section 3.1.8).  
3.79.   There is no special register of importers of animals, plants, a nd their products and 
by-products, although the import of a large number of these requires an authorization issued by 
the MAG, in addition to the official animal or plant health certificate issued by the country of 
origin.69 The MAG has an online database o n which the sanitary and phytosanitary requirements 
applying to specific products may be consulted, together with the products and countries of origin 
for which a sanitary/phytosanitary evaluation by the MAG's competent authorities is a prerequisite 
for im port.70 By law, the MAG sets the fees for inspection and quarantine services, based on the 
actual costs of the operation and providing the service.71 
3.80.   According to the Health Code, it is the Ministry of Health's responsibility to determine the 
minimum require ments to be met for food, whether imported or produced in El Salvador.72 The 
drafting and adoption of such requirements follows the same procedures as those governing the 
preparation of technical regulations.  
3.81.   An authorization from the Ministry of Health has  to be obtained to import food and 
beverages.73 The list of products requiring such an authorization may be viewed online.74 The 
requirements for obtaining an authorization can also be found on the Ministry of Health's website 
and include presenting the cert ificate of free sale ( legalized  and in the original) issued by the 
competent authority in the country of origin of the food or beverage.75 
3.82.   Moreover, sanitary registration issued by the Food Control and Hygiene Unit in the Ministry 
of Health must be obtained  before selling imported or domestic food or beverages.76 The 
requirements for obtaining or renewing sanitary registration of imported beverages or food include 
the list of ingredients, the labelling and samples of the product to be registered. The full lis t of 
requirements can be found on the Ministry of Health's website.77 Under an administrative 
regulation designed to speed up the sanitary registration procedure, products considered to be of 
low risk are given provisional registration within 48 hours of su bmission of the request and the 
other documents required. After two months, the provisional registration has to be replaced by 
definitive registration.78 There is also a special procedure for recognizing the sanitary registration 
of food and beverages issue d by the authorities in CACM member countries.  
3.83.   The following are the agencies whose methodology has been authorized for the laboratory 
analyses needed for the registration of food and beverages: the Laboratory for Food Quality 
Control and Toxicology of the  National Reference Laboratory; the Industrial Quality Control Centre 
(CCCI); the Integral Quality Laboratory of the Salvadoran Foundation for Economic and Social 
Development (FUSADES); the  Industrial Microbiological Specialties Laboratory (ESMI); and the 
Specialized Quality Control Laboratory (LECC).  
                                                
69 On the Customs website there is a list of over 4,000 products whose import requires an authorization 
and/or cert ificate from the MAG. Viewed at: 
http://appm.aduana.gob.sv/sacelectronico/Permisos/MAG_FITO_ZOO_UGR -MODERNIZACION.pdf . 
70 Online information from the MAG, Ag ricultural Health Information System (SISA). Viewed at: 
http://oas.mag.gob.sv/sisa/tramites.jsp . 
71 Article  6 of the Law on plant and animal health.  
72 Article  94 of the Health Code.  
73 Article  88 of the Health Code.  
74 Online information from the Ministry of Health. Viewed at: 
http://usam.salud.gob.sv/archivos/pdf/alimentos/Listado_de_prod uctos_que_requieren_permiso_del_MSPAS.p
df. 
75 Online information from the Ministry of Health. Viewed at: 
http://usam .salud.gob.sv/images/ambiental/alimentos/requisitos_para_la_importacion_de_materias_primas_al
imentos_y_bebidas.pdf . 
76 Article  95 of the Health Code.  
77 Online information from the Ministry of Health. Viewed at: 
http://usam.salud.gob.sv/images/ambiental/alimentos/requisitos_para_iniciar_el_tramite_de_registro_de_alim
entos_y_bebidas_importados.pdf . 
78 Administr ative regulation on the sanitary registration of processed food and beverages classified as 
"C" risk, Decision No.  1014 of 24  October  2008.  WT/TPR/S/344 • El Salvador  
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  3.84.   Genetically modified foods may be imported into El Salvador provided that they comply with 
the provisions in the Special Regulations on the safe  handling of genetically modified organisms.79 
3.2  Measures directly a ffecting exports  
3.2.1   Customs procedures and requirements  
3.85.   Any natural or legal person wishing to export must be registered as an exporter with the 
CIEX at the Central Reserve Bank. The CIEX was created by the Legislative Decree of 
20 January  2011 with the aim o f centralizing, speeding up and simplifying procedures for import 
and export transactions. Registration is free -of-charge and instantaneous if the relevant 
requirements published on the website have been met.80 Use of the services of a customs agent is 
optional. 
3.86.   An exporter must submit an "export application" for any transaction. This may be done 
directly in the CIEX offices or online through the Integrated Foreign Trade System (SICEX). This is 
an electronic single window interconnecting exporters and the CI EX, the Customs and other 
government institutions dealing with export procedures. The CIEX issues the goods declaration 
through this system, or the FAUCA for exports going to Central America, together with the 
sanitary, phytosanitary and origin certificate s required. After the CIEX has authorized the export 
transaction, the information is forwarded electronically to the DGA. Two printed copies of the 
goods declaration have to be presented to the Customs, together with the invoice, transport 
documents and re levant certificates in order to complete the export procedure. For exports to 
Guatemala, Honduras and Nicaragua, the FAUCA is sent directly to the Customs in those countries.  
3.87.   The SICEX publishes information on the duration and cost of the various procedure s 
required for export transactions.81 According to this information, online authorization for goods 
declarations or FAUCAs takes one hour, including authorization of the relevant certificates.  
3.88.   Depending on the risk analysis, the Customs either inspects the documents or carries out a 
physical inspection of the export shipment. According to figures provided by the authorities, over 
the period 2010 -2015 an average of 4.2% of export declarations underwent documentary 
inspection and 3.05% physical inspection. In 2015, for transactions overall, the average time 
taken for inspection of the documents was 1.28 hours and for physical inspection 2.78 hours.  
3.2.2   Export taxes, charges and levies  
3.89.   El Salvador does not impose taxes or other levies on exports and VAT on exports i s 
zero-rated.  
3.2.3   Export prohibitions, restrictions and licensing  
3.90.   El Salvador prohibits or restricts the export of some products, mainly for environmental 
protection or public health reasons or in order to comply with its commitments under international 
conven tions such as CITES.  
3.91.   Products which may not be exported include liquefied petroleum gas in cylinders and used 
containers for such gas.82 This prohibition relates to the programme subsidizing liquefied 
petroleum gas and its purpose is to prevent smuggling of  gas to countries in the region 
(Section  4.2). Ferrous and non -ferrous waste and scrap may not be exported, except in the case of 
exporters registered with the DGA which export products derived directly from their own industrial 
processes.83 This measure is  intended to end the export of such waste obtained illegally.  
                                                
79 Legislative Decree No.  78 of 1  June 2008.  
80 The requirements may be viewed at: 
https://www.centrex.gob.sv/scx_html/requisitos_registro_exportador.html . 
81 Online information from the SICEX. Viewed at: 
https://www.ce ntrex.gob.sv/scx_html/guia_tramites.html . 
82 Law regulating the storage, transport and distribution of petroleum products, Legislative Decree 
No. 169 of 23  December  1970.  
83 Legislative Decree No.  456 of 17  December  2007.  WT/TPR/S/344 • El Salvador  
- 60 - 
  3.92.   The export of several products is controlled either by means of authorizations, permits, 
inspection, registration, certificates or other documents issued by various public and private 
institutio ns. The relevant procedures must be completed before an export application is submitted 
to the CIEX. Products subject to control include: cane sugar, coffee, agricultural chemicals, staple 
grains, dairy produce, meat, processed food products, arms and expl osives and cultural assets 
(Table 3.9). In general, the controls are for environmental, health, safety or quality control 
reasons. For some products, the legislation provides that export authorizations are granted only if 
domestic supplies are guaranteed; this is the case for pesticides and fertilizers and other 
agricultural chemical inputs84, cane sugar85, and natural gas.86 
Table 3.9 Exports subject to controls  
Product  Competent authority  Authorization required  
Agricultural chemicals, biological 
products, medicines and feed for 
veterinary use  Ministry of Agriculture and Livestock (MAG)  Registration with the 
Registration and Control 
Directorate  
Arms and explosives  Logistics Directorate in the Ministry of 
National Defence   Permit  
Cane sugar  Salvadoran Sugar Agro -Industry Council 
(CONSAA)  CONSAA resolution  
Cultural assets  Secretariat for Culture of El Salvador 
(SECULTURA)  Resolution  
Coffee (including roasted or 
ground coffee)  Salvadoran Coffee Council  Permit  
Meat Ministry of Agriculture and Livestock (MAG)  Registration and authorization 
for inspection of products of 
animal origin  
Ferrous and non -ferrous waste 
and scrap  Ministry of Finance  Registration of the exporter 
with the Directorate -General 
of Customs  
Wild flora and fauna  CITES -El Salvador Administrative Authority 
in the Directorate -General of Plant Health 
(DGSVA) and Directorate -General of 
Livestock in the MAG  CITES certificate  
Natural gas  Directorate of Hydrocarbons and Mining in 
the Minis try of the Economy  Authorization  
Red beans  DGSVA in the MAG  Authorization  
Staple grains, fresh loroco and 
Hawaiian papaya (when the 
importing country requires 
additional information)  DGSVA (Agricultural quarantine) in the  MAG  Inspection of the product  
Machinery  Ministry of Labour and Social Welfare  Resolution by owners  
Honey from bees  Apiculture Unit, Food Safety, in the MAG  Original and copy of the 
sampling document  
Processed food products for 
human consumption  Department of Environmental Health i n the 
Ministry of Health  Registration  
Dairy produce  Laboratories accredited for analyses  Quality examination  
Fish products  Directorate -General of Fisheries and 
Aquaculture Development (CENDEPESCA)  Registration and possession of 
a permit  
Source:  WTO S ecretariat, with online information from the SICEX. Viewed at: 
https://www.centrex.gob.sv/scx_html/productos_controlados.html . 
3.93.   El Salvador restricted the export of red beans duri ng the period 15  May 2014 to 
31 December  2015 as a temporary measure to maintain price stability and ensure an adequate 
supply of the domestic market. Article XI of the GATT 1994 was one of the legal bases cited by 
El Salvador in order to apply this measur e.87 
                                                
84 Law on the control of pesticides,  fertilizers and products for agricultural use, Legislative Decree 
No. 315 of 10  May 1973.  
85 Law on production, industrialization and marketing in El Salvador's sugar industry, Legislative Decree 
No. 490 of 17  August  2001.  
86 Natural Gas Law, Legislative  Decree No.  630 of 20  June 2008.  
87 Decision No.  516 of the Ministry of Agriculture and Livestock on temporary restriction of exports of 
red beans and amendments thereto. Information on the measure viewed on the official website of the Food WT/TPR/S/344 • El Salvador  
- 61 - 
  3.2.4   Tariff and tax concessions  
3.2.4.1   VAT deduction and refund  
3.94.   Exporters may seek deduction of the VAT paid on inputs and services incorporated in the 
production of goods exported from the tax owing as a result of domestic transactions to which VAT 
applies. If th e tax credit cannot be fully deducted from the tax owing during the tax period, the 
exporter may request the Directorate -General of Internal Revenue (DGII) for refund of the 
remaining balance.88 
3.95.   Pursuant to Legislative Decree No.  71 of 14  August  2015, an am endment to the Law on VAT 
was adopted, introducing a "reverse charge" mechanism to speed up refund of this tax to 
exporters.89 This amendment allows exporters to deduct in their monthly tax returns the VAT paid 
on the purchase of imported inputs (excluding domestic inputs) from the total VAT withheld. Since 
17 November  2015, the Ministry of Finance has been implementing an online system to enable 
companies to apply a reverse charge mechanism for VAT.  
3.2.4.2   Repeal of the Export Recovery Law  
3.96.   By means of Legislative Decree No.  565 of 23  December  2010, El Salvador repealed the 
Export Recovery Law in order to comply with its commitments under the WTO Agreement on 
Subsidies and Countervailing Measures (SCM Agreement). The Law refunded to exporters 6% of 
the f.o.b. value of their exports outside Central America, and for exporters of coffee and sugar, 
made this concession conditional upon a local content requirement of at least 30% of the 
aggregate value of the exports. El Salvador requested and obtained from the SCM Commit tee an 
extension of the transition period provided by Article 27 of the SCM Agreement up until 
31 December  2005 in order to eliminate this measure.90 
3.2.4.3   Amendments to the Law on industrial and marketing free zones  
3.97.   In December  2001, El Salvador also requested a n extension of the transition period 
provided by Article 27 of the SCM Agreement for phasing out export subsidies for programmes 
implemented under the Law on industrial and marketing free zones (LZFIC).91 From 2003 to 2007, 
this extension was granted for an nual periods. In September  2007, El Salvador requested a further 
extension for the LZFIC in conformity with the procedure adopted by the General Council for this 
purpose.92 Under this procedure, El Salvador undertook to phase out export subsidies for the 
programmes applied under the LZFIC by 31  December  2015 at the latest and to submit a plan of 
action for this purpose. El Salvador notified the WTO SCM Committee annually of the 
aforementioned programmes93 and was given annual extensions over the period 2008 -201394; it 
has also forwarded the notification for 2014.95 
3.98.   In its notification of 8  July 2013 to the SCM Committee, El Salvador notified the approval of 
Legislative Decree No.  318 (21  February  2013) amending the LZFIC.96 At its session held on 
26 April 2016, t he SCM Committee examined El Salvador's notification for 2014 
                                                                                                                                                  
and Agriculture Org anization of the United Nations (FAO) at: http://www.fao.org/giews/food -prices/food -
policies/detail/en/c/318257 . 
88 Articles 76 and 77 of the Law on the tax on the transfer of property and the supply of services, 
Legislative Decree No.  296 of 31  July 1992 a nd amendments thereto.  
89 Exporters have reported long delays in refunding VAT. See, for example, CentralAmericaData.com, 
El Salvador: Demoras en devolución de IVA , 4 May 2015. Viewed at: 
http://www.centralamericadata.com/es/article/home/El_Salvador_Demoras_en_devolucin_de_IVA . 
90 WTO documents G/SCM/N/74/SLV/2 of 7  January  2002 and G/SCM/99 of 18  December  2002.  
91 WTO document G/SCM/N/74/SLV/1 of 3  January  2002.  
92 WTO documents WT/L/691 of 31  July 2007 (procedure adopted by the General Council) and 
G/SCM/N/163/SLV of 17  September  2007 (Request by El Salvador).  
93 WTO documents G/SCM/N/177/SLV of 7  July 2008, G/SCM/N/186/SLV and G/SCM/N/192/SLV of 
4 June 2009, G/SCM/N/211/SLV of 7  July 2010, G/SCM/N/220/SLV and G/SCM/N/226/SLV of 6  July 2011, 
G/SCM/N/243/SLV of 4  July 2012, G/SCM/N/253/SLV and G/SCM/N/260/SLV of 8  July 2013, 
G/SCM/N/275/SLV of 16  July 2014, G/SCM/N/284/SLV and G/SCM/N/290/SLV of 14  July 2015.  
94 WTO document G/SCM/65 and additions thereto (various dates).  
95 WTO document G/SCM/N/284/SLV -G/SCM/N/290 of 14  July 2015.  
96 WTO document G/SCM/N/253/SLV and G/SCM/N/260/SLV of 8  July 2013.  WT/TPR/S/344 • El Salvador  
- 62 - 
  (G/SCM/N/284/SLV -G/SCM/N/290 /SLV) relating to the subsidies provided under the former free 
zones regime. No written questions were put to El Salvador in advance and no Member referred to 
the not ification at the meeting.  
3.99.   By means of Legislative Decree No.  318, El Salvador introduced substantial amendments to 
the LZFIC in order to bring it into line with its international commitments and to give the 
regulatory framework the stability needed to attr act investment. The main changes include the 
elimination of all references to exportation as a criterion for eligibility under the Law; the 
elimination of local content requirements in order to be able to sell on the domestic market; the 
introduction of in vestment and employment requirements; the addition of new activities to be 
covered by the regime; a time -bound and differentiated scheme of fiscal incentives according to 
the site of the business; and new control and inspection mechanisms. The Ministry of the Economy 
is responsible for authorizing access to the regime and for monitoring enforcement.  
3.100.   Pursuant to Article 3 of the amended LZFIC97, Salvadoran or foreign businesses may 
become established and operate in a free zone when engaged in production, asse mbly, in -bond 
assembly (maquila), manufacturing, processing, transformation or marketing of industrial goods 
(listed in Chapter  3 and Chapters  25 to 29 of the Central American Harmonized System). Following 
the 2013 amendment, the regime was extended to cov er fishing, processing and marketing of 
marine species; the cultivation, processing and marketing of species of flora grown in greenhouses 
and laboratories; breeding and marketing of amphibians and reptiles in captivity with a permit 
from the competent aut hority; dehydration of ethyl alcohol; and the services needed for or related 
to performing such activities, which may only be provided to LZFIC beneficiaries.  
3.101.   Companies engaged in producing, assembling, manufacturing, processing or marketing 
craft products  or goods of the textile or clothing industry which, for technical reasons, cannot be 
located in a free zone, may apply to be declared as "inward -processing warehouses" (DPA) if they 
meet the criteria laid down in the LZFIC.98 
3.102.   The following activities are n ot eligible for the benefits under the LZFIC, pursuant to 
Article  6 of the Law: exploration, exploitation and processing of natural gas, petroleum and 
petroleum fuels, oils, greases and lubricants; production and marketing of clinker cement; 
marketing of f errous and non -ferrous metal scrap and waste; mineral exploitation; production or 
marketing of sugar, its substitutes and by -products; and the import of machinery and equipment 
for the purposes of leasing.  
3.103.   To become a beneficiary of a free zone or to be de clared as a DPA, businesses must meet 
at least one of the investment and employment criteria set out in Table 3.10. Failure to meet the 
investment criterion leads to annulment of authorization as a beneficiary or DPA, while failure to 
meet the employment c riterion results in suspension of rights until the omission is made good. 
Beneficiaries and DPAs also have to comply with the infrastructure and basic service requirements 
in the workplaces specified in domestic legislation.  
3.104.   Businesses operating under the LZFIC prior to the 2013 amendment were allowed access 
to the new regime if they could prove to the Ministry of the Economy that they complied with one 
of the following requirements: (a) already had and maintained the number of jobs determined in 
Articles  17-A and 19 -A of the LFZIC (the same requirements as those for new beneficiaries); or 
(b) had invested no less than US$100,000 since the date on which their operations were 
authorized, and maintained the number of jobs equivalent to the average number over the 
previous three years or the average over the time that had elapsed since the date of authorization, 
if this was shorter. The time -limit for providing proof of compliance with these requirements 
expired on 9  September  2013.99 The authorities have indicat ed that over three quarters of the 
former beneficiaries of the LZFIC have acceded to the new regime. Persons or businesses which, 
prior to entry into force of the amendments, had operated in national customs territory and were 
                                                
97 Law on industrial and marketing free zones, Legislative Decree N o. 405 of 23  September  1998; last 
amended by Legislative Decree No.  318 of 21  February  2013.  
98 The criteria are that they should be situated in an industrial zone; their facilities should comply with 
industrial and labour safety requirements; they should h ave a formal administrative and financial structure; 
and also have industrial premises. Article  18 of the LZFIC.  
99 Article 54 -D of the LZFIC.  WT/TPR/S/344 • El Salvador  
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  liable for income tax (ISR) a nd legal persons that are the result of the merger or conversion of a 
business previously liable for the ISR are not eligible for the amended regime.  
Table 3.10 Requirements for becoming established as a free zone beneficiary or inward 
processing warehouse  
 Amount of the initial 
investment in fixed assets  Jobs 
Free zones  US$500,000 during the first two 
years of operation  Function with at least 50 permanent jobs as of the first 
year of operation  
Function wi th 5 or more permanent jobs as of the first 
year of operation (marketing)  
Inward processing 
warehouses  US$800,000 during the first two 
years of operation  Function with 75 or more permanent jobs as of the first 
year of operation  
Function with 15 or mo re permanent jobs as of the first 
year of operation (marketing)  
Source:  Prepared by the WTO Secretariat on the basis of Articles 17 -A and 19 -A of the Law on industrial and 
marketing free zones, Legislative Decree No.  405 of 23  September  1998; last amende d by 
Legislative Decree No.  318 of 21  February  2013.  
3.105.   The amended LZFIC provides a new scheme of mainly fiscal incentives for businesses 
recognized as beneficiaries of free zones or DPAs.100 These take the form of reductions of the 
following taxes, which dimi nish over the years: income tax, municipal taxes, tax on the transfer of 
real estate  and income tax on dividends. There is also exemption from tariffs on the import of 
machinery, equipment, raw materials and other inputs needed for the activities authorize d 
throughout the period of operation  (Table  3.11). The incentives vary according to whether the 
beneficiary is a free zone beneficiary or a DPA and also depend on the location of the business, 
either within or outside the metropolitan area.  
Table 3.11 Fiscal incentives in free zones and inward processing warehouses  
Fiscal incentive  Free zones  
Metropolitan area  Outside the metropolitan area  
Income tax (ISR)  Exemption for the first 15 years  Exemption for the  first 20 years  
60% for the next 10 years  60% for the next 15 years  
40% for the following 10 years  
Municipal taxes  Exemption for the first 15 years  Exemption for the first 20 years  
90% for the next 10 years  90% for the next 15 years  
75% fo r as long as the authorized activity continues  
Tax on the transfer 
of real estate  Exemption for the purchase of real estate  to be used for the authorized activity  
Dividends  Exemption from the ISR for the first 12 financial years  
Import tariffs  Exemp tion from import tariffs on machinery, equipment, raw materials, catalysers, 
lubricants, reagents and fuel, inter alia , needed for operation of the authorized activity  
Fiscal incentive  Inward processing warehouses  
Metropolitan area  Outside the metropol itan area  
Income tax (ISR)  Exemption for the first 10 years  Exemption for the first 15 years  
60% for the next 5 years  60% for the next 10 years  
40% for the subsequent 10 years  
Municipal taxes  Exemption for the first 10 years  Exemption for the f irst 15 years  
90% for the next 5 years  90% for the next 10 years  
75% for as long as the authorized activity continues  
Tax on the transfer 
of real estate  Exemption for the purchase of real estate  to be used for the authorized activity  
Dividends  Exemption from the ISR for the first 12 financial years  
Import tariffs  Exemption from import tariffs on machinery, equipment, raw materials, catalysers, 
lubricants, reagents and fuel, inter alia , needed for operation of the authorized activity  
Source:  Prepared by the WTO Secretariat on the basis of Articles 17 and 19 of the Law on industrial and 
marketing free zones, Legislative Decree No.  405 of 23  September  1998; last amended by 
Legislative Decree No.  318 of 21  February  2013.  
                                                
100 Articles 17 and 19 of the LZFIC.  WT/TPR/S/344 • El Salvador  
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  3.106.   Free zone beneficiaries which increased their original investment by 100% over the last 
five years of the period for total tax exemption are eligible for a further five years of exemption 
from these taxes. In addition, the period of exemption from payment of the ISR and municipal  
taxes is extended for a further five years for beneficiaries engaged in manufacturing 
microprocessors, integrated circuits, parts for land, air and seagoing vehicles, spare parts or 
equipment for computers, medical devices and energy -generating equipment.  Businesses whose 
industrial activity has been declared "strategic" have the right to a further ten years of exemption 
from payment of the ISR and municipal taxes.101 "Strategic" activities are those involving the 
manufacture of vehicles, aircraft and seagoi ng craft or the production of industrial goods using 
nanotechnology, whose owners make new investment of at least US$10  million in El Salvador and 
are declared as such by means of a decision from the executive authority for that particular branch 
of the ec onomy.  
3.107.   The amended text also abolished the local content requirements for sale on the domestic 
market. The conditions are now the following: if a seller sells goods produced abroad on the 
domestic market, it must pay the duty and other import taxes and pro ve that the goods have not 
undergone transformation and have been under customs control at all times. In the case of goods 
produced in a free zone or a DPA, the seller must pay duty and import taxes on the customs value, 
excluding the value of the domestic  component, provided that the value of these components can 
be proved.102 
3.108.   The amendment to the LZFIC introduces other changes to customs procedures. For 
example, machinery and equipment entering duty -free for a free zone beneficiary or a DPA may be 
transferr ed without paying the corresponding duty after a period of five years (previously it was 
two years). The period during which goods entering for processing under the DPA procedure may 
remain has been reduced to 12 months (previously it was 48 months) calcul ated as of the date of 
acceptance of the goods declaration.103 
3.109.   El Salvador's notifications contain no data on the amount of the subsidies granted under 
the LZFIC, either before or after the amendment. On the other hand, there are data showing the 
importance of the LZFIC regime for El Salvador's economy: net exports from free zones and DPAs 
amounted to US$1,024  million in 2014 (compared to US$666.4  million in 2010), equivalent to 
19% of the total value of El Salvador's exports in 2014. In the same year, these businesses 
accounted for just over 10% of the country's GDP. Around 9% of the businesses operating in free 
zones and as DPAs are engaged in making clothing under the "full package" and "net in -bond 
assembly (maquila)" mode.104 In 2014, 141 businesses were op erating as free zone beneficiaries 
and 105 as DPAs, generating a total of 84,667 direct jobs and 169,334 indirect jobs (Section 4.3). 
In 2015, there were 121 free zone beneficiary businesses and 99 DPAs.  
3.2.4.4   Law on international services  
3.110.   In order to promote El  Salvador as an international hub for the supply of technical and 
logistics services, since 2007 the Law on international services (LSI)105 has been granting fiscal 
incentives to domestic or foreign businesses exporting services and located in "parks" and/or  
"service centres" deemed to be outside national customs territory.106 The incentives consist of 
exemption from: (a) tariffs and other import taxes on machinery and other goods needed to 
provide the services benefiting from incentives; (b) the ISR; and (c) m unicipal taxes on assets.107 
The benefits are granted for as long as the businesses are operating and provided that they meet 
the requirements laid down in the LSI.  
                                                
101 Article 17 -B of the LZFIC.  
102 Articles 3, 25 and 44 of the LZFIC.  
103 Articles 2 0 and 22 of the LZFIC.  
104 WTO document G/SCM/N/284/SLV and G/SCM/N/290/SLV of 14  July 2015.  
105 Legislative Decree No.  431 of 25  October  2007.  
106 The main difference between a park and a service centre is that the former constitutes a single entity 
in which se veral businesses operate under the responsibility of an administrator, whereas the latter is a defined 
area within which a business is authorized to set itself up.  
107 Articles 21 and 25 of the LSI.  WT/TPR/S/344 • El Salvador  
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  3.111.   Following an amendment to the LSI, approved in January  2013108, the scope of some of 
the eligib le activities was broadened; new activities were added (repair and maintenance of 
containers; repair of technological equipment; care of the elderly and the convalescent; 
telemedicine; and cinematography); and the requirements allowing businesses to operat e outside 
service parks were made more flexible. Table 3.12 shows the activities which are eligible under the 
amended LSI (including those whose scope was broadened) and whether they may operate in 
parks or service centres.  
Table 3.12 Law on international services: eligible activities  
Eligible activities  Broadening of the scope (2013 
amendment)  Location  
International distribution  N/A Parks  
International logistics operations  N/A Parks  
International call ce ntres  Including email, chat and multimedia 
messaging services  Parks or service centres  
Information technology  N/A Parks  
Research and development  N/A Parks  
Repair and maintenance of seagoing 
vessels  In addition to international cargo and 
cruise vessels , hospital ships and/or 
scientific research and industrial fishing 
vessels  Parks or service centres  
Repair and maintenance of aircrafta N/A Parks or service centres  
Business services (BPO)  Preparation of manning tables and 
other human resources -related 
services have been added  Parks or service centres  
Medical and hospital services  In addition to treatment of disease 
with or without surgery, general 
medical and dental services  Parks or service centres  
International financial services  N/A Parks  
Repair  and maintenance of containers  N/A Parks or service centres adjacent to 
a sea port or airport  
Repair of technological equipment  N/A Parks  
Care of the elderly and convalescent  N/A Parks or service centres  
Telemedicine  N/A Parks or service centres  
Cinem atography  N/A Parks  
N/A Not applicable.  
a Services provided to a natural or legal person engaged in operating an airline offering international 
flights, irrespective of their domicile and where the service is utilized, are deemed to be exports.  
Source:  Prepared by the WTO Secretariat on the basis of the Law on international services, Legislative 
Decree No.  431 of 25  October  2007, as amended by Legislative  Decree No.  277 of 24  January  2013.  
3.112.   The amendment to the LSI also defines the services which may be sol d on the domestic 
market provided that they are intended for persons or businesses registered as taxpayers and that 
VAT, the ISR and municipal taxes are paid.109 These services are: international distribution, 
international logistics operations, internationa l call centres, international financial services, 
information technology services and research and development.  
3.113.   The 2013 amendment also redefined and eased some of the requirements to be met by 
businesses wishing to take advantage of the LSI benefits. Thes e requirements vary depending on 
the nature of the service and whether it is situated in a park110 or a service centre.111 In general, 
there are minimum requirements in terms of investment (which in some cases have been 
reduced), employment (ten jobs), length of contract (reduced from one year to six months), and 
infrastructure (including environmental and safety conditions), and it is mandatory to submit a 
business plan. The Ministry of the Economy is responsible for implementing the LSI and giving 
businesses authorization to operate. The authorities have indicated that around 50 businesses are 
operating under the LSI. No information could be obtained on the value of their service exports.  
                                                
108 Legislative Decree No.  277 of 24  January  2013.  
109 Article  8 of the amended LSI.  
110 Articles 22 and 23 of the LSI.  
111 Articles 24 and 24 -A of the LSI.  WT/TPR/S/344 • El Salvador  
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  3.2.5   Export promotion  
3.114.   A new conformation of the Export and Investment Promoti on Agency of El Salvador 
(PROESA) – an institution governed by public law and attached to the Office of the President of the 
Republic – was established by Legislative Decree No.  663 of 9  April 2014.112 This Decree defines 
PROESA's new responsibilities, its o rganization and functioning, and provides for the creation of 
advisory committees to provide technical support for public -private projects put before the 
Agency's Governing Board. Its responsibilities include boosting exports by disseminating and 
promoting  the country's offer of goods and services for export, identifying foreign markets and 
drawing up proposals to improve export policies and strategies.  
3.115.   PROESA provides exporters with advice in the form of information services (formalities, 
regulations and r equirements for access to target markets), assistance with the adaptation process 
(seeking suppliers, calculating export prices, marketing strategy, advice on logistics), additional 
strategic information, and trade promotion support (business contacts and participation in trade 
fairs and missions).113 
3.116.   PROESA also runs a number of support programmes for exporters in coordination with the 
Ministry of the Economy. These include: Exportar Paso a Paso  (Export Step -by-Step) (aimed at 
Central American markets) and Exportar Más  (Export More) (aimed at market diversification). 
Exportar Paso a Paso  assists Salvadoran businesses that wish to start exporting, mainly by giving 
them information on markets, training, technical assistance and help in promoting products and 
services with potential in the chosen markets. The following are the requirements to be met: the 
business must be formally registered; if it produces goods, it must have been operating for at least 
three years and have annual sales amounting to a minimum of US$100,000, and if it supplies 
services, it must have been operating for at least one year and have annual sales amounting to a 
minimum of US$75,000; and the analysis carried out by PROESA must show that it has export 
potential.  
3.117.   The Exportar Más  programme helps businesses to increase and diversify their exports to 
preselected markets by providing: information on markets, business support from a PROESA 
specialist, assistance from an expert in the target market, and coordination of a trade mission to 
this mar ket.114 To be eligible for this support, the business must be formally registered, have 
exporting experience (over the previous two years as a minimum), have total sales of US$100,000 
or more and annual exports of at least US$25,000, and belong to one of the  sectors identified as 
having potential in the chosen markets.  
3.118.   PROESA is financed through the government budget and by a reimbursable loan from the 
Inter-American Development Bank (IDB). The amounts earmarked by PROESA for export 
promotion programmes total led US$4.3  million over the period 2014 -2016. The programmes 
supported 82  businesses in 2014 and 95 in 2015.115 
3.119.   In July  2013, PROESA, the National Quality Council, through the Salvadoran 
Standardization Agency ( OSN), and the Exporters Corporation of El Salva dor (COEXPORT) 
implemented the Exportar con Calidad  (Quality Exports) programme to assist companies exporting 
food and beverages to meet the food safety requirements of the United States market. The 
programme lasted for 15 months and was aimed at companies  which had continuously exported 
since 2009 in amounts exceeding US $10,000 annually.  
                                                
112 PROESA is a new conformation of the Export and Investment Promotion Agency of El Salvador 
(PROESA), originally created by Executive Decree No.  59 in May  2011 to rep lace the National Export and 
Investment Promotion Commission  (CONADEI), which brought together EXPORTA (responsible for promoting 
exports) and PROESA (responsible for promoting investment), both created at different dates and incorporated 
in CONADEI in 200 5. 
113 Online information from PROESA. Viewed at: http://www.proesa.gob.sv/exportaciones/asesoria -al-
exportador . 
114 Online information from PROESA. Viewed at: http://www.proesa.gob.sv/exportaciones/programas -
de-apoyo . 
115 In 2014, 64 companies received support under the Exportar Paso a Paso  programme and 18 under 
the Exportar Más  programme, whereas in 2015, 32 busi nesses benefited from Exportar Paso a Paso  and 
63 from Exportar Más . Information provided by the Salvadoran authorities.  WT/TPR/S/344 • El Salvador  
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  3.2.6   Export financing, insurance and guarantees  
3.120.   In 2012, the Law on the financial system for the promotion of development 
(Legislative  Decree No.  847 of 22  September  2012) crea ted the Development Bank of El Salvador 
(BANDESAL), a public credit institution which replaced the Multisectoral Investment Bank (BMI) 
and took over its assets.116 BANDESAL's aim is to facilitate access to financing for production  
sectors, principally those not served by commercial banks, including: agriculture, agro -industry, 
industry, services, energy, exports, tourism, housing, production infrastructure and micro and 
small enterprises (MSMEs). This Law also created the Economic Development Fund (FDE) and t he 
Salvadoran Guarantee Fund (FSG), whose resources are managed by BANDESAL.117 The purpose 
of the FDE is to meet the financial needs of MSMEs.  
3.121.   BANDESAL grants loans directly as a first -tier bank, through other financial institutions as 
a second -tier bank, a nd using FDE resources. As a second -tier bank, BANDESAL offers 
medium - and long -term loans to users through 42 local financial institutions and 20 lines of credit. 
First-tier operations and loans granted using FDE resources include three types of loan to s upport 
exporters: (a) "export capital formation", which seeks to encourage diversification of exports by 
product and by market; (b) "enlargement of the exporting industrial park" to increase 
El Salvador's export base; and (c) pre -export and export loans in  support of companies wishing to 
export goods and/or services. Loans are granted for viable and profitable projects in all economic 
sectors, with terms of one to ten years depending on the type of loan and at competitive rates of 
interest. The loans grante d by BANDESAL in support of export activities represent fairly modest 
amounts and most of them are granted to micro and small enterprises (Table 3.13).  
Table 3.13 BANDESAL: Amount of export loans, 2013 -2015  
(US$ million)  
 BANDESAL  
First tier  BANDESAL  
Second tier  Economic Development 
Fund  
2013 9.48 1.50 0.55 
2014 0.00 9.61 1.40 
2015 0.00 8.47 0.58 
Source:  Information provided by BANDESAL.  
3.122.   The FSG offers security to make it easier for businesses to obtain lo ans from commercial 
banks. It has a programme guaranteeing working capital loans for exportation. The maximum 
amount guaranteed is US$125,000, for a term of one year with maximum cover of 70% if the loan 
guaranteed is backed up by the exporter's commercial  invoice or 50% if it is backed up by 
purchase orders. In 2015, security by the FSG reached a total of US$36.2  million, in support of a 
loan portfolio of US$64.4  million for eligible institutions, of which 0.23% was for export credits.118 
3.123.   The Exporte con gar antía (Export with guarantees) programme, which was implemented 
by the BMI, ceased to operate in 2009. The Trust Fund in Support of Salvadoran Exports 
(FIDEXPORT), which provided security for the short -term financing sought by businesses in order 
to export  goods and services, was liquidated at the end of 2013.119 Likewise, during the period 
under review the Export Promotion Fund (FOEX), which gave small and medium -sized enterprises 
financial support for the promotion of their exports, was replaced by the Prod uction Development 
Fund (FONDEPRO).  
3.124.   FONDEPRO's main emphasis is on helping to raise productivity and competitiveness in 
MSMEs. It provides non -reimbursable co -financing to enable them to improve the quality of their 
products and processes, increase output and promote exports, encourage innovation, increase the 
creation of value added and boost production chains. The types of activity eligible include market 
surveys, adoption of technology for the semi -automation or automation of production processes, 
techno logical improvements, quality diagnostics, certification, cleaner production, energy efficiency 
and prospection, penetration and consolidation of foreign markets (participation in trade fairs and 
                                                
116 At the time of its creation, BANDESAL had around US$1,600  million, of which US$200  million 
represented its own capital and the remain der was raised by selling shares and through financing by 
international organizations.  
117 Article  4 of the Law on the financial system for the promotion of development.  
118 Information provided by the Salvadoran authorities.  
119 BANDESAL (2014), Fideicomisos ad ministrados . WT/TPR/S/344 • El Salvador  
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  missions). It is financed through contributions from interna tional organizations such as the Central 
American Bank for Economic Integration (CABEI), IDB loans and resources received from the 
government budget. Between 2010 and 2015, a total amount of US$11.6  million was disbursed.120 
3.3  Measures affecting production and  trade  
3.3.1   Incentives  
3.125.   The incentives given by El Salvador to its production sector mainly focus on programmes 
to promote exports and, as described above, programmes in support of micro, small and 
medium -sized enterprises (MSMEs), transfer of technology, and pr ogrammes to attract 
investment.  
3.126.   Businesses set up in El Salvador are also eligible for BANDESAL's programmes, whose 
main objective is to provide financial and technical support for the development of viable and 
profitable investment projects in the country 's production sectors in order to contribute towards: 
(a) promoting the growth and development of all production sectors; (b) promoting the 
development and competitiveness of entrepreneurs; (c) encouraging the development of MSMEs; 
(d) boosting the develop ment of exports and job creation; and (e) improving education and health 
services.  
3.127.   In order to achieve this, BANDESAL's main responsibilities are: (i) to grant loans and 
conduct other financial transactions directly with those eligible in order to finance private -sector 
investment projects to be implemented in El Salvador; (ii) to grant loans through eligible 
institutions in order to finance private -sector investment projects to be implemented in 
El Salvador; (iii) to grant loans and conduct financial trans actions in foreign currency through 
eligible institutions or directly with a guarantee from them to natural or legal persons in order to 
finance the import and marketing of goods and services of Salvadoran origin in the target 
countries; (iv) to guarantee foreign currency obligations contracted by eligible institutions or 
persons for the purpose of obtaining financing; (v) to develop financial products in support of the 
regionalizat ion of Salvadoran businesses; (vi ) to develop training, advisory and technic al 
assistance programmes designed to broaden or improve access to financing, the competitiveness 
and th e productivity of businesses; (vii ) to finance, undertake or commission technical, legal and 
financial studies for sectoral analysis, pre -investment stud ies or project structuring and to define  
the policies applicable; and (viii ) to manage the resources of the FDE and the FSG.  
3.128.   BANDESAL has the authority to invest in shares or securities issued by banks or other 
financial institutions, as well as shares or securities issued by the Central Reserve Bank of 
El Salvador. It may also, inter alia : keep deposits with the Central Reserve Bank of El Salvador, 
banks or other financial intermediaries authorized to receive deposits, and keep deposits in dollars 
or other  foreign currency in first -tier banks abroad; obtain loans from national or international 
institutions; issue and obtain negotiable bonds in accordance with its annual financial programme; 
and manage guarantee funds.121 
3.129.   BANDESAL may act as a first -tier or se cond-tier bank and give guarantees. As a first -tier 
bank, it finances investment projects ranging from US$4.25  million to US$21  million for up to 50% 
of the investment. It also acts to facilitate and mobilize resources from other participating financial 
institutions. As a second -tier bank, BANDESAL grants loans to financial institutions to enable them 
to transfer these resources on to final users for a permanent increase in working capital, technical 
training, purchase of machinery and equipment and the bui lding of facilities and physical 
infrastructure. Indirect loans are aimed primarily at MSMEs through the FDE; BANDESAL grants 
direct short -, medium - or long -term loans to MSMEs through 36 different programmes with the 
objective of promoting the development  of viable and profitable projects. BANDESAL is obliged by 
law always to maintain a ratio of at least 12% between its regulatory capital and its total 
risk-weighted assets. BANDESAL's principal programmes are described in Table 3.14.  
                                                
120 Information provided by the Salvadoran authorities. See also http://www.fondepro.gob.sv . 
121 Online information from BANDESAL. Viewed at:  http://www.bandesal.gob.sv/institucion/areas -de-
trabajo . WT/TPR/S/344 • El Salvador  
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  Table 3.14 BANDESAL's principal programmes  
Programme  Description  Term  Grace 
period  
1. First -tier programmes  
Agricultural capital 
formation  Purchase of fixed assets such as machinery and equipment  8 years  2 years  
Intensive and protected 
agriculture  Financing of capital -intensive crops  2-15 years  1-2 years  
Promotion of agricultural 
activities  Financing of activities in support of agriculture and 
livestock breeding  3-10 years  1-3 years  
Investment in coffee 
plantations  Resourc es for reviving the coffee sector (renewal, 
replenishment, new planting). Maximum amounts apply  6-10 years  2-4 years  
Avio loans for traditional 
crops  Financing of the production cost for El Salvador's most 
important crops. Maximum amounts apply  18-36 mo nths  
Promotion of investment in 
agro-industry  Purchase of fixed assets for agro -industrial facilities  10-15 years  2 years  
Transfer of technology and 
agro-industrial innovation  Financing of activities giving added value to agricultural 
products  2-10 years 1-2 years  
Support for the textile and 
clothing industry  Financing of fabric design, creation of own trademarks, etc.  2-15 years  1-2 years  
Formation of industrial 
capital  Financing of activities with high growth potential 
(chemicals, pharmaceuticals,  electronics, plastics, paper 
and paperboard, etc.)  10 years  2 years  
Transfer of technology and 
industrial innovation  Industrial activities giving added value  2-5 years  1 year  
Extension of the 
Salvadoran industrial park  Financing of activities with hi gh growth potential  15 years  2 years  
Boosting logistics services  Financing for training and expansion of distribution centres  10-15 years  2 years  
Promotion of international 
services  Financing of the maintenance and repair of vessels and 
aircraft  2-15 years  1-2 years  
Promotion of remote 
business services  Financing of call centres, research and development, etc.  2-15 years  1-2 years  
Transport for production  Financing to promote transport  5-7 years   
Financing of technological 
innovation  Financing  for the use of industrial models, product 
engineering, etc.  2-5 years  1 year  
Boosting the SME Sigue 
Invirtiendo  Providing competitive long -term resources to revive 
various economic sectors  3-15 years  1 year  
Support for the SME Sigue 
Creciendo  Providing  competitive resources for the supply of goods 
and services to the State  12 months   
Energy generation  Financing of renewable sources of energy  2-20 years  1-5 years  
Extension of the exporting 
industrial park  Financing of export activities in all sector s  15 years  2 years  
Promotion of tourism  Financing of products or services which promote the value 
chain in El Salvador's tourism  2-15 years  1-3 years  
Promotion of foreign direct 
investment  Financing to facilitate FDI  2-15 years  1-2 years  
Promotion o f direct 
investment  Financing to facilitate investment by Salvadorans resident 
abroad  2-15 years  6 months 
-2 years  
Promotion of business 
associations  Financing of associative projects, value chains  3-15 years  1-2 years  
2. Second -tier programmes  
Investm ent loans  Financing of working capital, fixed assets, real estate to be 
used for production  4-20 years  1-5 years  
Pre-export and export  Working capital to finance pre -export and export of all 
goods and services  1 year   
Boosting the MSME special 
line Sigue Invirtiendo  Financing of working capital, fixed assets, real estate to be 
used for production  2-15 years  1 year  
Support for the MSME 
special line Sigue 
Creciendo  Working capital for the production of goods or services  12 months   
Support for the MSME  
special line Descuento de 
Documentos  Documents backing up receivables. The minimum term in 
the docum ents must be more than 30 days.  180 days   
Support for the MSME 
special line Impulsa tu 
Negocio  Financing for the purchase of furniture, equipment and 
work tools  2-5 years  1 year  
Line of credit to support 
control of coffee diseases  Working capital  Up to 3 years  Up to 
1 year 
Financing for the 
establishment of coffee 
bush nurseries  Financing of coffee -seedling production costs  Up to 18 
months   
Working c apital for the 
2016-2017 coffee harvest  Financing of working capital costs for the 2016 -2017 coffee 
harvest  Up to 18 
months   WT/TPR/S/344 • El Salvador  
- 70 - 
  Programme  Description  Term  Grace 
period  
Agricultural recovery. 
Investment in coffee 
plantations  Support for the initiation or extension of production. 
Financing for renew al, replenishment and planting of coffee 
plantations  10 years  2 years  
Line for the renewal of 
coffee plantations  Financing for the renewal of coffee bushes to raise 
productivity. The loans granted may cover 100% of the 
investment to be made  Up to 6 year s Up to 
2 years  
Line for the replenishment 
of coffee -growing stock  Financing for the replenishment of coffee -growing stock on 
coffee plantations. Maximum amounts apply  12 years  Up to 
5 years  
Line for the planting of new 
coffee plantations  Financing for  new coffee plantations. Maximum amounts 
apply. Loans may cover up to 80% of the investment  Up to 8 years  Up to 
3 years  
3. Guarantees  
MSMEs  Guarantees for working capital loans, capital formation and 
transport. Coverage: 50% -70%. Maximum amount 
US$75,00 0 to US$100,000  3-5 years   
Tourism MSMEs  Purchase of machinery and equipment, software, transport, 
etc. Coverage: 70%. Maximum amount US$125,000. 
Guarantees for working capital loans, capital formation and 
transport. Coverage: 50% -70%. Maximum amount 
US$75,000 to US$100,000  8 years   
Production  Guarantees for working capital loans, capital formation, 
transport, technological development and environmental 
conversion. Coverage: 50% -70%. Maximum amount 
US$125,000  3-8 years   
Innovation  Guarantees for workin g capital loans, technological 
development and environmental conversion. Coverage: 
50%-70%. Maximum amount US$50,000 -US$125,000  2-7 years   
Agriculture  Supplementary guarantees to facilitate access to loans. 
Coverage: 30% -100%. Maximum amount US$175,000. 
Guarantees for working capital loans. Coverage: 
50%-70%. Maximum amount US$50,000 -US$125,000    
Source:  BANDESAL.  
3.130.   At the end of 2014, BANDESAL's total assets amounted to US$218.8  million and it was 
managing 13 trust funds. In the same year, the assets of  the FDE and the FSG combined 
amounted to US$64  million. Between 2012 and 2015, BANDESAL granted US$886.6  million in 
loans through financial institutions.122 Between 2013 and 2015, it granted direct loans amounting 
to US$35.5  million. In 2014, the FSG gave 7 ,029 guarantees for a total of US$26  million and in 
2015 the total was US$36.2  million. The FDE granted 243 loans for a loan commitment of 
US$59.9  million through 36 lines of financing.  
3.131.   Pursuant to Article  47 of the Law creating BANDESAL, the interest rate s applied by the 
Bank to eligible institutions must not be lower than the institutions' actual cost of raising capital 
from the public in order not to discourage transactions with the public by these institutions. The 
interest rates applied to financial in termediaries by BANDESAL are shown in Table  3.15 and vary 
depending on whether they are applied to a regulated agency or not and the term of the loan.  
Table 3.15 Lending rates applied by BANDESAL to financial intermediaries for new and 
current loans, 2016  
Term  Regulated institutions  Non-regulated non -banking 
financial institutions  
Up to 1 year  5.75%  6.00-6.50%  
From 1 to 3 years  6.00%  6.25-6.75%  
From 3 to 5 years  6.00%  6.25-6.75%  
From 5 to 7 years  6.25% 6.50-7.00%  
From 7 to 10 years  6.50%  6.75-7.25%  
From 10 to 15 years  6.75%  7.00-7.50%  
From 15 to 20 years  7.00%  7.25-7.75%  
Over 20 years  7.25%  7.50-8.00%  
BANDESAL annual benchmark rate  6.25%   
Source:  BANDESAL.  
                                                
122 BANDESAL (2015).  WT/TPR/S/344 • El Salvador  
- 71 - 
  3.132.   As regards MSMEs, the National Commi ssion for Micro and Small Enterprises (CONAMYPE) 
is an institution set up in 1996 by Executive Decree No.  48 and has been part of the Ministry of the 
Economy since 1999. It is responsible for facilitating, improving and boosting access for MSMEs to 
recogni zed business development services, enabling MSMEs to have access to loans and promoting 
credit access mechanisms for them.123 The Ministry of the Economy, in coordination with 
CONAPYME, is responsible for framing and defining national policies to promote and  develop the 
competitiveness of MSMEs. CONAMYPE is the agency tasked with implementing domestic policies 
for the promotion, development and competitiveness of MSMEs.  
3.133.   New legislation to promote the activities of MSMEs has been implemented since the 
previous  review. The Law on the promotion, protection and development of micro and small 
enterprises (Decree No.  667 of 2014) was adopted by the Legislative Assembly on 25  April 2014 
and came into force on 28  May 2014. Its purpose is to boost the creation, protect ion, development 
and strengthening of MSMEs and to help reinforce the competitiveness of those already in 
existence, thereby enhancing their capacity to generate jobs and value added in production 
(Article  1).124 The new Law redefines the concepts of micro a nd small enterprise.125 
3.134.   The Law provides that action by the State or local authorities for the promotion of MSMEs 
should focus on promoting and developing programmes and mechanisms to foster their creation, 
development and competitiveness in the short, mediu m and long terms and encourage the 
economic, financial, social and environmental sustainability of the actors involved; promoting the 
consolidation of business and production fabrics by interlinking sectors; and encouraging the 
population's entrepreneurial  and creative spirit, by supporting the creation of new enterprises. It 
also stipulates that the effective participation of MSMEs in government procurement is to be 
facilitated.  
3.135.   The Law created the National MSME Development Scheme as  a mechanism for 
public -private inter -institutional coordination. The Scheme has national, departmental, municipal 
and sectoral committees. The objective is to implement policies, plans, programmes, tools and 
services at the national, departmental, municipal and sectoral levels in order to promote and 
develop MSMEs, encouraging their competitiveness, association and interconnected production, as 
well as their access to domestic and foreign markets. The Law also created the National MSME 
Committee as a forum for consultation betwe en the Ministry of the Economy, through CONAMYPE, 
and MSME -related business associations, local governments, production and business sectors, 
MSMEs and associations organized into sectors or trade unions, universities and higher education 
institutes and pr ivate organizations promoting MSMEs. By May  2016, the National MSME 
Committee was not yet functioning. The Law also established a single window to standardize and 
simplify MSME -related procedures, but by May  2016, this single window had not yet started to 
operate.  
3.136.   The Law also provides that State banks are  to promote MSME access to loans and other 
sources of financing in coordination and consultation with the Ministry of the Economy in order to 
create and strengthen financial instruments, guarantee schemes,  trust funds, financial leasing and 
risk capital, inter alia , either directly or through financial intermediaries specializing in MSMEs. For 
this purpose, State banks are required to offer financial and non -financial services and capital 
market development  services that meet MSMEs' needs.  
3.137.   The new legislation provides that BANDESAL should establish lines for the financing of 
MSMEs (see below), as well as guarantee programmes for them, and should encourage the 
creation of venture capital investment funds to p articipate  temporarily in capital structure for 
MSMEs. The Guarantee Programme for Micro and Small Enterprises (PROGAMYPE) was set up, 
                                                
123 Online information from CONAPYME. Viewed at: https://www.conamype.gob.sv . 
124 Online information from CONAMYPE. Viewed at: 
https://www.conamype.gob.sv/?page_id=2825&wpdmc=marco -legal. 
125 According to Article  3 of the Law, micro and small enterprises are classified as follows: 
(a) micro -enterprise: natural or legal person operating in various sectors  of the economy through an economic 
unit whose annual gross sales do not exceed 482 minimum monthly wage units and which employ up to ten 
workers; (b) small enterprise: natural or legal person operating in various sectors of the economy through an 
economic  unit whose annual gross sales exceed 482 but are not more than 4,817 monthly minimum wage 
units and which employ a maximum of 50 workers. Micro -enterprises which exceed the requirements in Article 
3 for two consecutive years will be moved to the appropria te category. Small enterprises which exceed or fail 
to meet the requirements in Article  3 for two consecutive years will be moved to the appropriate category.  WT/TPR/S/344 • El Salvador  
- 72 - 
  initially with a total of US$10  million provided by the State out of resources in the national budget, 
to be disbursed gr adually and depending on how the programme evolves. The fund can guarantee 
short-, medium - and long -term loans for up to 90% of the amount financed. The guarantee 
programme is open to private financial intermediaries. A Fund for Entrepreneurship and Workin g 
Capital has also been created to finance new projects or existing MSMEs in all production sectors, 
with initial funding of US$5  million from the national budget. These funds may offer short -, 
medium - and long -term loans.  
3.138.   In 2014, BANDESAL established a t raining centre to provide MSME entrepreneurs with 
training in matters relating, among other things, to financial inclusion, business plans, product 
innovation, trademarks, and bookkeeping. In some cases, this training is provided in coordination 
with CONAP YME. BANDESAL also manages the Trust Fund for Micro and Small Enterprises 
(FIDEMYPE), which obtains resources from financial institutions in order to provide financing for 
MSME entrepreneurs.  
3.139.   Moreover, El Salvador benefits from the programmes administered by the Central 
American Bank for Economic Integration (CABEI). The CABEI programmes, other than those 
primarily intended for exporters, are mainly in support of micro and small enterprises , 
infrastructure, agribusiness, food safety, promotion of employment  and low -cost housing.126 The 
interest rates applicable to the various programmes are determined according to the market rates 
based on the Libor and are revised each quarter. The CABEI also carries out 
BANDESAL -intermediated operations, in which case the ra te of interest charged to the final user by 
the intermediary institution is subject to the latter's own policies.  
3.140.   In 2014, the CABEI disbursed resources for El Salvador amounting to a total of 
US$312  million. At the end of that year, El Salvador received l oans from the CABEI amounting to 
US$852.2  million, 87.9% of which were for the public sector.127 In November  2015, five approved 
projects were being implemented: the BANDESAL LGC project, which involves increasing an overall 
line of credit to BANDESAL by an amount of up to US$48.1  million in order to finance or carry out 
operations under the CABEI's financial intermediation programmes for which the borrower is 
eligible128; the Highway Infrastructure Connectivity for Development Programme, which consists of 
a loan of up to US$48.2  million to the Republic of El Salvador to enable the Ministry of Public 
Works, Transport, Housing and Urban Development (MOPTVDU) to finance the rehabilitation, 
improvement and conservation of roads in the northern part of El Salvador; the Family Farming 
and Rural Entrepreneurship for Food and Nutritional Safety Plan (PAF), which consists of a loan of 
up to US$60  million to the Government of El Salvador to enable the MAG to finance part of the 
Plan129; the MSME Agricultural Bank programme,  the Municipal Infrastructure Financing 
Programme (PROMUNI) and the Housing Programme, which consist of an overall line of credit of 
up to US$50  million for the Agricultural Bank to finance projects coming under any 
CABEI -intermediated loan programme, incl uding those designed for micro, small and 
medium -sized enterprises, as well as under PROMUNI, the Housing and Urban Improvement 
Programme and the International Trade Facilitation Initiative (I -FÁCIL), in accordance with the 
conditions laid down in these pr ogrammes130; and the Salvadoran Workers' Bank project, which 
consists of an increase in the overall line of credit granted to the Salvadoran Workers' Bank in an 
additional amount of US$375,000 exclusively to finance projects under CABEI -intermediated loan 
programmes, principally for PROMUNI and MSMEs.  
                                                
126 Online information from the CABEI. Viewed at: 
http://www.bcie.org/?cat=1051&title=RepúblicadeElSalvador&lang=es . 
127 CABEI (2015).  
128 With this increase, the line of credit will amount to US$130  million.  
129 The main objective of the PAF is to lower poverty levels in rural a reas by 12% by developing family 
farming. Implementation of this programme is aimed at improving agricultural production systems, lowering 
the levels of chronic malnutrition by 10% among children under two years of age in beneficiary families, 
increasing t he area under crops and introducing technology, as well as improving post -harvest and agronomic 
management. Online information from the CABEI. Viewed at: 
http://www.bcie.org/?c at=1051&title=RepúblicadeElSalvador&lang=es . 
130 In addition to the foregoing, the Agricultural Bank may make use of a line of credit for working 
capital and investment amounting to up to 25% of the total, i.e. up to US$12.5  million.  WT/TPR/S/344 • El Salvador  
- 73 - 
  3.3.2   Competition policy and price controls  
3.3.2.1   Competition policy  
3.141.   The legal and institutional framework of the competition regime did not see any major 
changes during the period under review. El Salvador has been governe d by the Competition Law131 
and its implementing Regulations132 since 2006. This Law is based on the Constitution, which 
prohibits monopolistic practices but permits the existence of State monopolies when the social 
interest makes them indispensable.133 The Comm ercial Code defines unfair competition.134 The 
Law on trademarks and other distinctive signs also contains a definition of unfair competition 
(Title IX, Article  100).  
3.142.   The Competition Law prohibits anti -competitive practices but at the same time allows 
except ions when these help to enhance economic efficiency and consumer welfare.135 The Law has 
general application to all economic operators, whether natural or legal persons, government or 
municipal bodies, companies with a State holding, cooperative associations  or any other 
organization participating in economic activities, except for the economic activities which the 
Constitution and the laws reserve exclusively for the State and local authorities.136 With the 
exception of these activities, government institution s and agencies and local authorities must abide 
by the provisions in the Competition Law.  
3.143.   The Competition Law was not amended during the review period, but a draft reform was 
put before the Legislature in 2013 proposing to broaden the scope of the Law and update the 
formalities and procedures for investigations and control of anti -competitive practices. Specifically, 
it is proposed that: (a) the Law should apply to business associations, to certain anti -competitive 
practices that are not at present clearly defined, and to a large number of economic mergers, 
lowering the threshold required for their approval; and (b) the clemency programme in 
investigations should be revised, extending the time -limit for verifying economic mergers and 
introducing a tax for th is.137 By May  2016, the draft reform had not yet been approved by the 
Legislature.  
3.144.   The Supervisory Authority for Competition (SC) monitors implementation of the 
Competition Law and accordingly investigates whether there are anti -competitive agreements 
among competitors, anti -competitive practices between non -competitors, or abuse of a dominant 
position. The SC may also approve or refuse the economic mergers requested or impose 
conditions; it also conducts studies into conditions of competition in various sect ors in order to be 
able to issue government policy recommendations.  
3.145.   The Competition Law prohibits horizontal agreements, vertical conduct deemed to be 
anti-competitive, and abuse of a dominant position.138 Horizontal agreements to fix prices, restrict 
supply , divide up the market or agree upon a position in bidding procedures are prohibited as 
such. When evaluating cases of vertical conduct occurring between non -competing economic 
operators, consideration is given, inter alia , to any gains in efficiency resul ting from the practice 
which may have a favourable effect on competition and yield benefits for consumers.139 In order to 
decide whether an economic operator has a dominant position in a particular market, the Law 
considers, inter alia , its share of the mark et and the opportunity to fix prices unilaterally or to 
restrict supplies to the market without its competitors being able actually or potentially to 
counteract this power, and whether there are barriers to entry.  
                                                
131 Legislative Decree No . 528 of 26  November  2004, as amended by Legislative Decree No.  436 of 
18 October  2007.  
132 Executive Decree No.  126 of 5  December  2006.  
133 Article  110 of the Constitution. Viewed at: http://www.asamblea.gob.sv/eparlamento/indice -
legislativo/buscador -de-documentos -legislativos/constitucion -de-la-republica . 
134 Articles 488 -497 of the Commercial Code. Viewed at: 
http://www.asamblea.gob.sv/eparlamento/indice -legislativo/buscador -de-documentos -legislativos/codigo -de-
comercio .  
135 Article 34 of Legislative Decree No.  528 and Article 14 of Executive Decree No.  126. 
136 Article 2 of Legislative Decree No.  528. 
137 For further details, see online information from the Supervisory Authority for Competition (SC).  
Viewed at: http://www.sc.gob.sv/pages.php?Id=1134 . 
138 Articles 25 -30 of Legislative Decree No.  528 and Articles 12 -17 of Executive Decree No.  126. 
139 Articles 26 and 27 of Legislative Decree No.  528 and Article 14 of Executive Decree No.  126. WT/TPR/S/344 • El Salvador  
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  3.146.   The SC initiates investigations of possibl e unlawful agreements between competitors either 
ex officio  or following a complaint. If the unlawful practice is found to exist, remedial measures are 
ordered140, in particular, cessation of the practice, and a fine is imposed in an amount determined 
accord ing to the specificities of the offence (for example, its seriousness, effect on third parties, 
repetition and duration). The maximum amount of the fine is 5,000 monthly minimum wages (in 
urban industry), but may be more if the practice is deemed to be "pa rticularly serious". In such 
cases, the offender is subject to a fine of up to 6% of its annual sales or 6% of the value of its 
assets (during the preceding financial year) or two to ten times the estimated profit earned from 
the unlawful practice (whichev er is higher). In addition to the financial  penalty, in the final 
resolution the Supervisory Authority orders the cessation of the practice and may determine the 
necessary structural or behavioural conditions or obligations.141 There is a clemency programme 
which, although it does not dispense the offender from paying the fine, allows the particularly 
serious criterion not to be applied. The programme is intended for economic operators which 
collaborate with the SC, providing evidence of the unlawful agreemen t in which they participated, 
provided that they have been the first to report it, together with other requirements.142 
3.147.   All economic mergers exceeding the thresholds indicated in the LC must be notified and 
receive prior authorization from the SC.143 In order to determine whether a merger will 
significantly restrict competition, the SC controls economic mergers in which the total assets or 
revenue exceed 50,000 to 60,000 annual minimum wages, respectively. It has a period of 
90 calendar days in which to underta ke the legal, economic and technical analysis of the proposed 
merger. After this period, the merger is either refused or authorized, with or without conditions.144 
If the SC does not reach a decision within the time -limit, it is considered that the merger ma y take 
place.145 For economic mergers in sectors for which there are competent regulatory authorities, 
the SC issues an opinion that is binding on the regulator.146 The Law provides that an economic 
merger may not be refused if it can be shown that it yields b enefits in terms of economic efficiency 
and consumer welfare.147 Monetary sanctions may be imposed for failure to notify an economic 
merger when it is obligatory to do so and for failure to comply with the terms of the final 
resolution, or to do so incomplet ely, incorrectly, falsely or in a misleading fashion, in the case of 
mergers subject to SC control.148 At present, the control procedure is free -of-charge.  
3.148.   An appeal for review may be submitted to the SC against its final decisions without 
prejudice to proce dures before the Administrative Litigation Division .149 
3.149.   Between 2010 and 2014, the SC initiated 28 investigations, the majority following a 
complaint (22), and penalized four unlawful practices (Table 3.16). The main markets investigated 
included telephony s ervices and wholesale distribution of white sugar in bulk. The practices 
sanctioned  concerned agreements among competitors (method for fixing prices and collusion 
between bidders in public bidding procedures) and abuse of a dominant position (by taking act ion 
that created obstacles  to the entry of competitors or the expansion of existing  competitors , 
restricting sales or determining different prices to the detriment of certain economic operators). 
The SC refused one economic merger and imposed terms on the mode of operation for four others. 
Economic mergers took place in the liquid fuel distribution, telecommunications and financial 
sectors and wholesale distribution of personal care products. In 2013, for the first time, the SC 
imposed a fine on an economic  operator for failure to notify an economic merger.150 
                                                
140 At any time du ring the investigation, the SC may also order the preventive measures deemed to be 
necessary, subject to a reasoned resolution. Articles 41 -A and 13 s of Legislative Decree No.  528. 
141 Articles 37 and 38 of Legislative Decree No.  528 and Article 72 -A of Exe cutive Decree No.  126. 
142 Article 39 of Legislative Decree No.  528. 
143 Article 3 1 of Legislative Decree No.  528 and Article 24 of Executive Decree No. 126.  
144 Article 35 of Legislative Decree No.  528 and Articles 26, 30 and 31 of Executive Decree No.  126. 
145 Article 35, paragraph 3, of Legislative Decree No.  528. 
146 Article 36 of Legislative Decree No.  528. 
147 Article 34 of Legislative Decree No.  528. 
148 Article 38, paragraphs 4 and 5, of Legislative Decree No.  528 and Article 30 -A of Executive Decree 
No. 126. 
149 Article 48 of Legislative Decree No.  528. 
150 Supervisory Authority for Competition (2014).  WT/TPR/S/344 • El Salvador  
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  Table 3.16 Activities of the Supervisory Authority for Competition, 2010 -2014  
 2010  2011  2012  2013  2014  
Investigations initiated  7 3 7 7 4 
Ex officio  2 0 2 1 1 
Following a complaint  5 3 5 6 3 
Cases of horizontal agreement penalized  0 2 0 1 0 
Cases of vertical agreement penalized  0 0 0 0 0 
Cases of abuse of a dominant position penalized  0 0 1 0 0 
Economic mergers notified (not including those 
inadmiss ible), of which  1 3 2 0 1 
Refused  0 0 1 0 0 
Unconditional authorization  1 0 0 0 1 
Conditional authorization  0 3 1 0 0 
Source:  Information provided by the authorities.  
3.3.2.2   Price controls  
3.150.   El Salvador has mechanisms to regulate the maximum selling price to the public (PVMP) of 
certain goods and services. During the review period, the most important change was the entry 
into force of the Law on medicines in 2012, which regulates the PVMP of medicines (innovative or 
generic) sold on prescription.151 According to  the established methodology, the PVMP of innovative 
medicines is the international reference price or the average price in Central America and Panama 
(whichever is lower).152 The price of generic medicines is 30% to 40% less.153 It is the task of the 
National  Directorate of Medicines (DNM), in coordination with the Consumer Ombudsman, to 
determine and monitor application of the PVMP. According to the DNM, regulating the price of 
medicines has resulted in significant annual savings for Salvadoran consumers.154 In 2015, the 
PVMP of some 7,450 medicines was regulated.155 
3.151.   Between 2010 and 2015, El Salvador continued to regulate the PVMP of electricity, certain 
hydrocarbons, fixed and mobile telephony services (Section 4), and the supply of water.  
3.152.   The Consumer Ombudsman  has the authority to regulate the PVMP of essential goods and 
services if there is a national emergency.156 
3.3.3   State trading, State -owned enterprises and privatization  
3.153.   El Salvador has notifi ed the WTO that it has no State trading enterprises exporting or 
impor ting goods for sale within the meaning of Article  XVII:4(a) of the GATT 1994 and 
paragraph  1 of the Understanding on the Interpretation of Article  XVII. The most recent 
notification in this regard covers the period 1  January to 31  December  2011.157 
3.154.   The autho rities have explained that during the review period no State -owned enterprises 
were privatized. Generally speaking, the State does not participate in the economy to any great 
extent, although it has an important role in some sectors such as the distributio n of electric power, 
the drinking water service and the management of ports and airports. An initiative to create a 
                                                
151 Law on medicines of 2012 (Legislative Decree No.  1008 of 22  February  2012).  
152 Article 5 of the Regulations determining the maximum selling price of medicines to the public and 
verification thereof (Executive Decree No.  244 of 17  December  2012, as amended in 2014). Viewed at: 
http://www.transparenciaactiv a.gob.sv/unos -8000-medicamentos -reduciran -su-precio -hasta -un-40-este-ano). 
153 Article 58 of Legislative Decree No.  1008.  
154 Notice from the DNM of 5  February  2015. Viewed at: 
http://www.medicamentos.gob.sv/index.php?option=com_k2&view=item&id=107:contin%C3%BAa -ahorro -
para-la-poblaci%C3%B3n -con-listado -de-precios -de-medicamentos -para-el-2015&Itemid=168 . 
155 The list of medicines whose price was regulated in 2015 may be viewed at: 
http://www.medicamentos.gob.sv/index.php?option=com_content&view=article&id=206:listado -de-los-
precios -maximos -de-venta -al-publico -2014-y-2015&catid=101:ley&Itemid=94 . 
156 Article 58(c) of the Law on consumer protectio n (Legislative Decree No.  776 of 18  August  2005, as 
amended by Legislative Decree No.  286 of 31  January  2013).  
157 WTO document G/STR/N/14/SLV of 10  October  2012.  WT/TPR/S/344 • El Salvador  
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  public -private partnership to extend El Salvador's international airport, which would have involved 
giving a concession to a private firm, w as rejected by the Government in October  2015.  
3.3.4   Government procurement  
3.3.4.1   Overview  
3.155.   According to data obtained from El Salvador's electronic government procurement system 
(CompraSal), between 2009 and 2014 the value of government procurement contracts awarded 
rose from US$416.5  million to US$900.8  million, equivalent to 3.6% of GDP in 2014. Moreover, in 
2014, government agencies purchased goods and services on El Salvador's commodity and service 
exchange (BOLPROS) amounting to US$60.9  million.158 
3.156.   By type of spendi ng, contracts for goods and services accounted for 74% of the total in 
2014 and contracts for works for 26%. By type of contracting entity, autonomous institutions were 
responsible for 46.8% of procurement in 2014, followed by the central government (33.2% ), local 
authorities (10%), hospitals (5.2%), State -owned enterprises (4.6%) and other institutions.  
3.157.   During the review period, most procurement contracts were awarded through a public 
bidding procedure or a public competition (Table 3.17). In 2014, 73.5% o f procurement 
transactions were with micro and small enterprises.159 
Table 3.17 Government procurement statistics by type and method, 2009 -2014  
 2009  2010  2011  2012  2013  2014  
Total value of contracts awarded (U S$ million)  416 596 868 1,022  995 900 
By type  (% of total)  
Goods and services (including consultancy services)  87 86 79 80 75 74 
Works  13 14 21 20 25 26 
By method        
Public bidding or competition  79 83 74 78 62 68 
Public bidding or competitio n by invitation  9 9 4 N/A N/A N/A 
Free contracting  4 3 7 10 13 14 
Direct contracting  1 5 13 10 21 15 
Other  7 0 2 2 4 3 
N/A Not applicable because this method was abolished in 2011.  
Source:  Information provided by the Salvadoran authorities and online information from CompraSal. Viewed 
at: https://www.comprasal.gob.sv/comprasal_web/estadisticaSumario . 
3.3.4.2   Regulatory framework  
3.158.   The regulatory framework for government procurement in E l Salvador is based on 
Article  234 of the Constitution , the Law on government procurement and contracting (LACAP)160 
and its implementing Regulations (RELACAP). The provisions agreed by El Salvador in its 
preferential trade agreements also form part of the d omestic legal framework for government 
procurement. El Salvador is not an observer in the WTO Committee on Government Procurement 
and does not plan to accede to the Plurilateral Agreement.  
3.159.   The LACAP was the subject of sweeping reforms in 2011 and 2015.161 These included 
streamlining procurement methods; modifying and differentiating the thresholds; introducing new 
exemptions to applicability of the Law; expanding possibilities for direct procurement; measures to 
promote participation by MSMEs; and creating an  integrated procurement and contracting system 
                                                
158 Online information from BOLPROS. Viewed at: https://www.bolpros.net/bolpros -cerro-2014-con-60-
9-millones -en-negocios -transparentes -entre-el-sector -publico -y-privado/#more -1277. 
159 CONAMYPE (2015).  
160 Legislative Decree No.  868 of 21  August  2000 and amendments thereto.  
161 Legislative Decrees No.  725 of 18  May 2011 and No.  990 of 16  April 2015. Legislative Decree 
No. 868 had previously been amended by Legislative Decrees No.  204 and No.  244 of  2000, No.  593 of 2001, 
No. 66 and No.  222 of 2003, No.  571 and No.  909 of 2005 and No.  140 of 2009.  WT/TPR/S/344 • El Salvador  
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  (SIAC). New implementing Regulations came into force in 2013 to make it easier to apply the 
amendments to the Law.162 
3.160.   The LACAP's scope embraces central government agencies and local authorities, as well as 
State-owned enterprises, hospitals and autonomous institutions.163 The 2011 amendments made 
Salvadoran and foreign suppliers and contractors and public -private partnerships subject to the 
Law, together with procurement through the stock exchange, which ceased to  be considered a 
method of procurement.164 At the same time, the 2011 amendments expanded the number of 
exemptions from the LACAP. These now include construction works managed by local authorities; 
non-insurance banking and financial services; sale of shares  on the international market; and 
electricity and drinking water distribution services.165 The bases for some of these exemptions do 
not appear at all clear and some observers fear that they may increase the margin of discretion.166 
3.161.   The Government Procurement and Contracting Regulatory Unit (UNAC) in the Ministry of 
Finance is the governing body for government procurement in El Salvador. Each government 
agency has an Institutional Procurement and Contracting Unit (UACI) to conduct all government 
procurement -related transactions in a decentralized manner. The instructions and other 
regulations issued by the UNAC in implementation of the Law must be followed. Since 2011, the 
LACAP has allowed government agencies to collaborate for joint procurement through public 
bidding or competition procedures.167 
3.162.   There is usually no distinction between domestic and foreign suppliers, although 
preference may be given to bids by domestic suppliers when, after they have been evaluated, the 
bids are seen to be equivalent to those fro m foreign suppliers.168 Furthermore, in 2011 a 
preference mechanism in favour of MSMEs was introduced, allowing priority when evaluating bids 
to be given to goods manufactured and/or produced in El Salvador if these are comparable to the 
bids for the same go ods manufactured abroad. Government agencies are also obliged to award 
contracts to MSMEs amounting to at least 12% of their annual procurement and contracting 
budgets. In addition, there is a geographical criterion according to which government agencies 
must award contracts to local and regional MSMEs.169 Data from CONAMYPE show that, in 2014, 
just over one third of government agencies awarded at least 12% of their procurement contracts 
to micro and small enterprises.170 
3.163.   The number of contracting methods has b een streamlined as part of the amendments to 
the LACAP. For example, 2011 saw the abolition of the public bidding or competition by invitation 
method, which consisted of drawing up a list of at least four suppliers which were then invited 
publicly to submi t a bid.171 Another method abolished was that of procurement of goods and 
services on the stock market, i.e. on BOLPROS.172 As indicated above, these forms of procurement 
remain subject to the LACAP, but the procedures for contracting, awarding contracts and p ayment 
are governed by special regulations.173 
3.164.   Currently, the procurement methods covered by the LACAP include the following:  
 Public bidding or competition: public bidding applies to procurement of works, goods and 
services, with the exception of consultancy  services, for which public competition is the rule. 
An unlimited number of suppliers are publicly invited to participate. There may be a 
preselection procedure if it is necessary to employ suppliers with the requisite experience, 
                                                
162 Executive Decree No.  53 of 10  April 2013 repealing the previous Regulations of 2005.  
163 The list of autonomous institutions registered in CompraSal has been publishe d on 
http://www.comprasal.gob.sv . 
164 Article 2 of Legislative Decree No.  868, amended by Legislative Decree No.  725. 
165 The other instances of exemption are specified in Article  4 of Legislative Decree No.  868, amended 
by Legislative Decree No.  725. 
166 FUSADE S (2011).  
167 Article 73 -B of Legislative Decree No.  868, as amended by Legislative Decree No.  725. 
168 This provision does not apply to suppliers to which El Salvador gives national treatment under 
regional trade agreements. Article  55 of Legislative Decree N o. 868. 
169 Articles 39 -A and 39 -C of Legislative Decree No.  868, as amended by Legislative Decree No.  725. 
170 CONAMYPE (2015).  
171 Article 39 of Legislative Decree No.  868, as amended by Legislative Decree No.  725. 
172 Idem. 
173 Article 2 of Legislative Decree No.  868, as amended by Legislative Decree No.  725. WT/TPR/S/344 • El Salvador  
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  technical or human resour ces and financial stability to fulfil a highly complex or specialized 
contract.  
 Free contracting: this is the method used by government agencies to meet their regular 
needs for goods or services. A limited number of suppliers participate, but must be at le ast 
three in order to ensure competitive terms. The suppliers are invited or selected directly by 
the contracting agency from an information database or a register. It is not necessary to 
seek three bids if the amount of the contract does not exceed 20 min imum monthly wages 
in the trade and services sector (SMSC), around US$5,034, or if there is a sole supplier, in 
which case the contracting agency has to issue a reasoned resolution.  
 Direct contracting: a minimum of three suppliers are selected directly, un less the contract 
can only be fulfilled by a single supplier. Direct contracting may be used in the situations 
defined in the Law, which include a state of emergency, catastrophe, disaster or war; 
situations deemed to be urgent; or if no bid is received th e second time round. The 
contracting agency must in any case issue a reasoned resolution in order to be able to award 
a contract directly.  
3.165.   In 2011 and 2015, the number of situations in which direct contracting could be used were 
increased (from seven to 12 ). These now include the procurement of works, goods or services of a 
preventive nature in order to meet national emergencies; professional services when trust and 
confidentiality are paramount; inputs, machinery or equipment to be used for scientific rese arch or 
technological development; arms and equipment to combat delinquency; and the purchase of 
medicines for the public health scheme.174 It should be noted that the Law does not fix any limits 
on the amounts for direct contracting. Moreover, the ambiguity  of some of the concepts cited 
among the situations where use of this method is permitted may lead to exaggeratedly broad 
interpretations. With regard to the purchase of medicines, this provision was declared 
unconstitutional by the Supreme Court of Justic e in May  2015.175 
3.166.   With the exception of direct contracting, the method to be followed depends on the subject 
of the procurement and the threshold (Table 3.18). In 2011, new amounts for government 
procurement thresholds were fixed and special thresholds set f or local authorities, on the one 
hand, and for other government agencies, on the other.176 The free contracting method may be 
suspended if the value of the goods is below 10% of the threshold set, in which case, the goods 
may be purchased directly in commerc ial establishments but the purchase must not be recurrent 
or occur more than once a quarter.  
Table 3.18 Government procurement methods by subject and by contracting threshold, 
2016  
Method  Type  Threshold  
Local authorities  Other agencies  
SMSCa US$ SMSC  US$ 
Public bidding  Works, goods and services, 
excluding consultancy  > 160  > 40,272  > 240  > 60,408  
Public competition  Consultancy services  
Free contracting  Works, goods and services, 
including consu ltancy  ≤ 160  ≤ 40,272  ≤ 240  ≤ 60,408  
Direct contracting  Works, goods and services, 
including consultancy  There are no thresholds as it is only used in "exceptional" 
cases  
a The threshold is expressed in minimum monthly wages in the trade and services se ctor (SMSC). In 
2016, the SMSC was equal to US$251.70.  
Source:  WTO Secretariat, on the basis of Articles 39 and 40 of Legislative Decree No.  868, as amended by 
Legislative Decree No.  725, and information provided by the authorities.  
                                                
174 Article 72 of Legislative Decree No.  868, as amended by Legislative Decrees No.  725 and No. 990.  
175 Article 72(k) of the LACAP was declared unconstitutional as it violated Article 234 of the Constitution 
concerning the general nature of bidding procedures as the method of procurement for government authorities 
inasmuch as Article 72(k) allows use of direct contracting as the normal mechanism for procuring supplies of 
medicines for the entire public health sch eme. Ruling of the Constitutional Division  of the Supreme Court of 
Justice, published in the Official Journal, Volume No.  407, of 4  May 2015.  
176 Articles 39 -41 of Legislative Decree No.  868, as amended by Legislative Decree No.  725. WT/TPR/S/344 • El Salvador  
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  3.167.   Foreign suppliers may p articipate in all government procurement methods.177 Registration 
in the National Register of Government Procurement and Contracting is not compulsory, although 
the Regulations implementing the LACAP indicate that suppliers wishing to become enrolled  in the 
Register may do so through CompraSal.178 
3.168.   During the review period, El Salvador has been promoting greater transparency in 
government procurement. In 2011, it strengthened the SIAC which, pursuant to the Law, must 
incorporate all the elements needed for the a dministration, implementation, functioning, 
coordination and monitoring of government procurement.179 The SIAC is a transactional system 
composed of the UNAC, the UACIs and CompraSal.  
3.169.   The LACAP and its implementing Regulations also include provisions making it mandatory 
to publish everything relating to government procurement on CompraSal, including, inter alia , 
agencies' annual government procurement programmes, invitations to participate, and the bases 
for the bidding procedures and the award of contracts. Invitations to bid or to participate in public 
competitions are also still announced in the national and/or international press. At present, 
CompraSal enables potential bidders to register when downloading the bases for bidding. It 
forwards this informatio n to the contracting entities (UACI). The authorities have indicated that in 
2015, 95% of government agencies used the CompraSal system.  
3.170.   Technical and business  bids are opened in public. Each contracting agency's UACI has its 
own Bid Evaluation Commission responsible for the technical and economic evaluation of bids, 
using the criteria specified in the bases for the public bidding or competition.180 The Regulations 
implementing the LACAP provide that the evaluation criteria must be objective, measurable or 
quantifiable and not arbitrary.181 Following the 2011 amendments, bidding criteria obtained 
directly from CompraSal have been free -of-charge.  
3.171.   During the period under review, the maximum time -limit for awarding contracts in public 
bidding procedures or competit ions fell from 90 to 60 days after opening of the bids, with the 
possibility of a 30 -day extension in special cases.182 The outcome of any contracting procedure 
must be notified to interested parties within two working days. Interested parties may make an 
appeal in writing within five working days of the notification. In 2011, the time -limit for ruling on 
appeals received fell from 15 to ten working days as of their acceptance.183 
3.3.5   Intellectual property rights  
3.3.5.1   Overview  
3.172.   The main change to the regime for protectio n of intellectual property rights (IPRs) during 
the review period was the amendment to the Law on trademarks and other distinctive signs 
(LMOSD). This amendment reinforced the status of protection of geographical indications, creating 
a special form of pro tection for them. The term of copyright protection of 70 years after the 
author's death has been retained, as has the 20 -year non -renewable term of exclusivity for 
patents and the 10 -year non -renewable term for industrial designs. El Salvador does not have  any 
special domestic legislation on the protection of new varieties of plants or layout -designs of 
integrated circuits. New plant varieties may be protected by a patent, under the Intellectual 
Property Law (LPI). As regards layout -designs of integrated ci rcuits, El Salvador directly applies 
the provisions in the WTO Agreement on Trade -Related Aspects of Intellectual Property Rights 
(TRIPS  Agreement).  
3.173.   The TRIPS Agreement entered into force in El Salvador on 1  January  2000. El Salvador is a 
member of the Wor ld Intellectual Property Organization (WIPO) and has signed various 
WIPO -administered agreements (Table 3.19). During the review period, El Salvador signed two 
new intellectual property treaties: the Treaty to Facilitate Access to Published Works for Perso ns 
                                                
177 Article 39 of Legislat ive Decree No.  868, as amended by Legislative Decree No.  725. 
178 Article 10 of Executive Decree No.  53. 
179 Article 10 bis of Legislative Decree No.  868, as amended by Legislative Decree No.  725. 
180 Article 55 of Legislative Decree No.  868, as amended by Legis lative Decree No.  725. 
181 Article  46 of Executive Decree No.  53. 
182 Article 44 of Legislative Decree No.  868, as amended by Legislative Decree No.  725. 
183 Article 77 of Legislative Decree No.  868, as amended by Legislative Decree No.  725. WT/TPR/S/344 • El Salvador  
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  Who Are Blind, Visually Impaired, or Otherwise Print Disabled (Marrakesh Treaty) and the Treaty 
on Audiovisual Performances (Beijing Treaty), although these two treaties still have to enter into 
effect . The authorities have indicated that El Salvador is  in the process of ratifying the Beijing 
Treaty.184 El Salvador has requested the International  Union for the Protection of New Varieties of 
Plants (UPOV) for assistance in applying legislation based on the UPOV Convention but has not 
signed the Convention.185 
Table 3.19 Intellectual property treaties signed by El Salvador, 2015  
International treaty  Date of 
ratification/accession  
Convention Establishing the World Intellectual Property Organization (WIPO)  June 1979 
Copyright and related rights   
Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting 
Organizations  March  1979 
Berne Convention for the Protection of Literary and Artistic Works  November  1993 
Convention for the Pr otection of Producers of Phonograms against Unauthorized Duplication of 
their Phonograms (Phonograms Convention)  October  1978 
WIPO Performances and Phonograms Treaty  October  1998 
Treaty on Audiovisual Performances (Beijing Treaty)a February  2016 
WIPO Copyright Treaty (WCT)  October  1998 
Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or 
Otherwise Print Disableda (Marrakesh Treaty)  October  2014 
Trademarks and other distinctive signs   
Paris Convention for t he Protection of Industrial Property  November  1993 
Trademark Law Treaty (TLT)  August  2008 
Patents, industrial designs and utility models   
Paris Convention for the Protection of Industrial Property  November  1993 
Patent Cooperation Treaty  May 2006 
Other  
Brussels Convention Relating to the Distribution of Programme -Carrying Signals Transmitted by 
Satellite  April 2008 
Nairobi Treaty on the Protection of the Olympic Symbol  September  1984 
Budapest Treaty on the International Recognition of the Depos it of Microorganisms for the 
Purposes of Patent Procedure  May 2006 
a Not yet in force.  
Source:  World Intellectual Property Organization (WIPO).  
3.174.   During the review period, El Salvador drew up a national intellectual property policy. This 
document was issued  in 2014 and its objective is to "make intellectual property a key component 
of national development, contributing to better use of the population's capacity for creating 
knowledge and generating conditions to improve the competitive position through prope r use of 
intellectual property protection tools".186 The following are some of the action lines envisaged in 
the national intellectual property policy: promotion of creative thinking; production and 
management of intellectual property; access to knowledge, t echnological and scientific 
development by promoting research and innovation; promotion of cultural development and 
creative industries, protection of biodiversity and knowledge of the cultural expressions of 
indigenous peoples; guarantee of fair competiti on on the domestic market and export markets and 
protection of consumers; access to health; and enforcement of IPRs. For this review, the 
authorities have indicated that they are in the process of setting up a college to train officials in 
registration and  intellectual property protection matters.  
3.3.5.2   Institutional and regulatory framework  
3.175.   It is the Ministry of the Economy's responsibility to draft and implement El Salvador's IPR 
protection policy. The Intellectual Property Regist er (RPI) is the authority in ch arge of registering 
and maintaining IPRs. It is a department in the National Registry Centre (CNR), a decentralized 
agency under the Ministry of the Economy with administrative and financial autonomy.187 Within 
                                                
184 At the time of thi s review, the Beijing Treaty had nine of the 20 ratifications needed for it to come 
into force.  
185 Online information from UPOV. Viewed at: 
http://www.upov.int/edocs/pubdocs/en/upov_pub_437 .pdf. 
186 Ministry of the Economy (2014).  
187 Online information from El Salvador's National Registry Centre. Viewed at: 
http://www.cnr.gob.sv/historia . WT/TPR/S/344 • El Salvador  
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  the RPI there is an Intellectual Property Regis try Directorate, composed of the Industrial Property 
Unit, the Copyright Unit and the Client Services Unit.  
3.176.   The regulatory framework for the protection of IPRs mainly comprises the Intellectual 
Property Law188 (LPI) of 1993 and the LMOSD189 of 2002. The LPI go verns the protection of 
copyright and related rights, and some industrial property rights (inventions, utility models, 
industrial designs, industrial and trade secrets, test data and new plant varieties). The LMOSD 
governs trademarks, signs or expressions of commercial advertising, trade names, emblems, 
geographical indications and appellations of origin.190 The RPI is in charge of registering all IPRs in 
El Salvador, with the exception of test data and undisclosed information on chemicals. 
El Salvador's regu latory framework for intellectual property does not stipulate any nationality or 
domicile requirement in order to benefit from the protection of IPRs.191 
3.177.   The provisions in the TRIPS Agreement have been incorporated in El Salvador's legislation 
(Table 3.20). Some provisions, for example those on the protection of copyright in literary works, 
computer programs and audiovisual works, exceed the minimum protection required by the 
TRIPS  Agreement. The TRIPS Council examined El Salvador's IPR legislation in 2000.192 
El Salvador did not notify any new intellectual property legislation during the review period.  
3.178.   In 2010, El Salvador notified the WTO that the Trade Policy Directorate in the Ministry of 
the Economy was its intellectual property contact point pursuant to Ar ticle 69 of the 
TRIPS  Agreement.193 
Table 3.20 Overview of El Salvador's intellectual property legislation, 2015  
Legislation  Term  Scope  
Copyright and related rights  
Intellectual Property Law, 
Legislative Decre e No.  604 of 
15 July 1993; Regulations 
implementing the Law on the 
promotion and protection of 
intellectual property, Executive 
Decree No.  35 of 
28 September  1994; 
amendments to the Law on 
the promotion and protection 
of intellectual property, 
Legislative Decree No.  912 of 
14 December  2005 and 
Legislative Decree No.  985 of 
17 March  2006.  Protection is granted 
throughout the lifetime of 
the author plus 70  years 
after his death. Computer 
programs, collective and 
audiovisual works are 
protected for 70  years as  of 
the date of their disclosure . Artistic, literary and audiovisual works and 
computer programs. The copyright holder's 
economic rights include the right to authorize or 
prohibit distribution to the public of the original or 
copies of the works, whether b y sale, rental, hire, 
loan or any other manner. Special provisions apply 
to computer programs and databases, audiovisual 
and three -dimensional works of art, musical 
compositions and newspaper articles. Protection is 
given irrespective of any registration f ormality. 
El Salvador does not provide any exceptions in 
respect of national treatment for foreigners 
publishing their works in El  Salvador. The Law 
applies indiscriminately to Salvadorans and 
foreigners.  
Patents  
Intellectual Property Law, 
Legislative De cree No.  604 of 
15 July 1993; Regulations 
implementing the Law on the 
promotion and protection of 
intellectual property, Executive 
Decree No.  35 of 
28 September  1994; 
amendments to the Law on 
the promotion and protection 
of intellectual property, 
Legislati ve Decree No.  912 of 
14 December  2005 and 
Legislative Decree No.  985 of 
17 March  2006.  Protection gives the 
inventor or applicant 
exclusive rights within El 
Salvador for a 
non-renewable term of 
20 years as of the date of 
filing the application with 
the Int ellectual Property 
Register of the CNR.  The LPI provides for the right to obtain protection 
for an invention, utility model or industrial 
design, an invention meaning any product or 
process applicable in practice to the solution of a 
specific technical pro blem. An invention may be 
patented if it is new, involves an inventive step 
and is susceptible of industrial application. 
Contractual licences for working a patent have 
legal effects against third parties only if they 
have been registered.  
The following ma y not be patented: discoveries, 
scientific theories and mathematical methods; 
economic plans, principles or methods for 
advertising or business, those pertaining to 
purely mental or intellectual activities or to 
                                                
188 Enacted by Legislative Decree No.  604 of 15  July 1993.  
189 Enacted by Legislative Decree No.  868 of 6  June 2002.  
190 Article  1 of the LMOSD.  
191 Article  3 of the LMOSD and Article  11 of the LPI.  
192 The questions put to El Salvador by Members and the respective replies in connection with this 
examination can be found in WTO document IP/Q/SLV/1 of 18  August  2000.  
193 WTO document IP/N/3/Rev.11/Add.4 of 18  August  2010.  WT/TPR/S/344 • El Salvador  
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  Legislation  Term  Scope  
games; methods for treatment of the human or  
animal body by surgery, therapy or diagnosis; 
except for products intended to put any of these 
methods into practice; and inventions whose 
publication or industrial or commercial 
application would be contrary to public order or 
morality.  
Industrial desig ns and utility models  
The same legislation as that 
for patents.  10 years as of the date of 
filing the application, 
non-renewable.  Industrial designs are protected on the basis of 
the provisions in the LPI and amendments 
thereto. Such protection does not e xclude or 
affect protection that may be available to such 
designs under other legal provisions, in particular 
those relating to copyright. There is no protection 
for industrial designs which are not considered to 
be new in the country, that is to say, mere ly 
differ in minor or secondary respects from other 
earlier designs or merely refer or apply to 
another category of products; nor is protection 
granted for designs whose disclosure would be 
contrary to public order or morality.  
Layout -designs of integrate d circuits  
There is no relevant national 
legislation. The provisions in 
the TRIPS Agreement apply.    
Distinctive signs  
Law on trademarks and other 
distinctive signs, Legislative 
Decree No.  868 of 
6 June 2002; Legislative 
Decree No.  913 of 
14 December  2005, Legislative 
Decree No.  986 of 
17 March  2006 and Legislative 
Decree No.  358 of 
2 May 2013.  The right to exclusive use 
of a trademark is granted 
for 10  years and may be 
renewed indefinitely for 
successive 10 -year periods. 
The concept of geographical 
indications has been 
introduced, offering sui 
generis protection 
indefinitely for protected 
products. Protection 
continues for as long as the 
special conditions for which 
it was granted persist.  Any visually perceptible proprietary, figurative or 
three -dimens ional sign capable of distinguishing 
products or services. The owner of a trademark 
is entitled to oppose registration of an identical 
or similar sign, to prevent its use and to request 
the authorities to prohibit or suspend imports of 
products that make u se of such signs.  
Undisclosed information (including test data)  
The LPI defines and protects 
industrial or trade secrets and 
test data. Law on medicines: 
Legislative Decree No.  1008 of 
22 February  2012 and the 
General Regulations 
implementing the Law on 
medicines, Executive Decree 
No. 245 of 18  December  2012.  Indefinitely in the case of 
industrial or trade secrets. 
In the case of test data, 
protection is given through 
a legal provision which 
determines time -limits for 
their protection, i.e. 5 years 
for pharmaceuticals and 
10 years for agricultural 
chemicals. Undisclosed 
information is protected if it 
complies with the 
requirements of 
Article  181-A of the LPI.  Protection of commercial and industrial rights 
applies whether or not the secrets are fixed on a 
material medium and no registration is required. 
The submission of undisclosed information is 
required by the competent administrative 
authority as a condition for approving the 
marketing of pharmaceuticals or agricultural 
chemicals that use new chemical s ubstances. 
Criteria are laid down for the protection of such 
data against unfair commercial use and against 
disclosure. There are exceptions regarding 
disclosure when the authority deems it necessary 
to protect the public or when measures have 
been taken t o ensure that the data are protected 
against unfair commercial use. If any undisclosed 
information regarding safety and efficacy 
submitted to an authority in order to obtain 
marketing approval is disclosed by the said 
authority, such information shall cont inue to be 
protected against any unfair commercial use.  WT/TPR/S/344 • El Salvador  
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  Legislation  Term  Scope  
New plant varieties  
Intellectual Property Law, 
Legislative Decree No.  604 of 
15 July 1993; Regulations 
implementing the Law on the 
promotion and protection of 
intellectual property, Executive 
Decre e No.  35 of 
28 September  1994; 
amendments to the Law on 
the promotion and protection 
of intellectual property, 
Legislative Decree No.  912 of 
14 December  2005 and 
Legislative Decree No.  985 of 
17 March  2006.  20 years, protected by a 
patent.  In the special case of new plant varieties, the 
criteria of an inventive step and being susceptible 
of industrial application must be met.  
Source:  WTO Secretariat, on the basis of information provided by the authorities.  
3.179.   Copyright enshrined in the LPI protects all liter ary, artistic and scientific works irrespective 
of their means or form of expression, provided that they meet the requirement of originality 
determined in the Law.194 El Salvador recognizes the principle of protection of copyright without 
requiring registrat ion. The protection afforded to the copyright owner includes moral and economic 
rights, dealt with separately in the LPI.  
3.180.   The LPI gives the owner of industrial rights or copyright covered by the Law the right "to 
import or export, or authorize the import o r export of copies of his lawfully manufactured works, 
and the right to prevent the import or export of unlawfully manufactured copies".195 The LPI 
establishes the right to obtain protection for an invention, utility model or industrial design. 
Acquisition o f the right requires registration with the RPI. As to the term of protection, industrial 
designs and utility models are protected for a non -renewable period of ten years calculated as of 
the date of filing the application.  
3.181.   Patents enjoy a non -renewable ter m of protection of 20 years, which may be extended if 
any delays are attributable to the authorities. El Salvador's legislation applies a system of national 
exhaustion for patents, the right becoming exhausted after the patented product "has been legally 
placed on the market for the first time on the national territory".196 New plant varieties may only 
be protected by patents. To protect a new plant variety, it must be shown that it is susceptible of 
industrial application and involves an inventive step.197 El Salvador does not have any special 
legislation on layout -designs of integrated circuits and directly applies the provisions in the 
TRIPS  Agreement.  
3.182.   El Salvador allows the granting of compulsory licences solely in order to supply the 
domestic market. Compul sory licensing to work a patent may be granted for "declared reasons of 
emergency or national security and for as long as these persist", provided that this is necessary to 
satisfy the population's basic needs. The licence must be granted by the competent jurisdiction, 
and specify the term and scope of the measure, as well as the remuneration payable to the patent 
owner.198 By 2015, El Salvador had not issued any compulsory licence.  
3.183.   In September  2006, El Salvador accepted the amendment in the Decision on the 
implementation of paragraph 6 of t he Doha Declaration on the TRIPS  Agreement and Public Health 
as well as the protocol amending the TRIPS Agreement. The protocol accords facilities to countries 
which do not have the capacity to manufacture pharmaceuticals,  allowing them to import patented 
medicines under compulsory licences.  
                                                
194 Article  12 of the LPI.  
195 Article  7 of the LPI.  
196 Article  116(d) of the LPI.  
197 Article  111 of the LPI. Article  114 of the LPI states that "[a]n invention shall be considered to involve 
an inventive step i f, for a person having ordinary skill in the technical field concerned, the invention would not 
have been obvious or could not obviously have been derived from the relevant prior art".  
198 Articles 133 and 134 of the LPI.  WT/TPR/S/344 • El Salvador  
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  3.184.   During the period under review, the National Directorate of Medicines, set up in 2012, took 
over responsibility for protecting test data and information on the safety and efficacy of 
pharmaceuticals199, a task previously incumbent upon the Higher Council for Public Health. The law 
defines medicines containing new chemical ingredients as "innovative medicines".200 Protection is 
given for test data and undisclosed information needed for the re gistration of pharmaceuticals and 
agricultural chemicals and extends to any unfair commercial use for five years for pharmaceuticals 
and ten years for agricultural chemicals.201 
3.185.   The LMOSD determines the status of protection of trademarks and other distinctiv e signs. 
In 2013, it was amended202 and special protection status was given to geographical indications in 
addition to their existing status , which included them under the protection provided for 
trademarks. IPR owners may choose under which of the two mecha nisms they seek protection for 
their IPRs. As to the term, the LMOSD protects geographical indication rights indefinitely, for as 
long as the situation which gave rise to the protection persists. As far as trademarks are 
concerned, protection for exclusive  use is for an indefinitely renewable term of ten years.  
3.186.   The registration of intellectual property rights is governed by the Law on uniform 
procedures for the submission, examination and registration or filing of instruments in the 
registers of real estate  and mortgages, corporate property, commerce and intellectual property 
(LPU) of 2004. The only amendment to the LPU during the review period was the creation of a 
review procedure under which a decision rejecting registration of an application may be 
challenged.203 In order to exercise this right, the party concerned must submit an appeal in writing 
within five working days of the act by the administration. The submission of an appeal gives the 
right to a hearing at which the appellant may put forward argumen ts against the refusal to 
register.204 Pursuant to the LPU, the RPI's Intellectual Property Registry Directorate has the 
authority to decide on requests for review, cancellation and appeals.  
3.3.5.3   Enforcement  
3.187.   In El Salvador, control and compliance with intellectua l property regulations are the joint 
responsibility of several government agencies. These include the Unit for Offences against Assets 
in the Public Prosecutor's Office and the National Civil Police, both of which have the authority to 
pursue offences rela ting to the protection of IPRs, and the Directorate -General of Customs, which 
is responsible for border control of goods suspected of being counterfeit.  
3.188.   The Salvadoran courts with jurisdiction in civil and commercial affairs are the competent 
courts for pr oceedings initiated by owners of IPRs.205 The authorities have indicated that officials in 
these courts have received instruction in intellectual property matters. The civil penalties laid down 
in the LPI are: immediate cessation of the unlawful activity; pr eventive seizure, withholding or 
deposit of the infringing goods; prohibition of import of the infringing products, materials or 
media; and damages. El Salvador's legislation does not provide for the application of fines for 
infringing IPRs as such, but it  does provide for the imposition of monetary sanctions as 
compensation for the damage caused by IPR infringements, on the basis of the LMOSD 
(Article  90(f) and Article  91); the LPI (Articles  90, 172(b) and 173); the Code of Civil and 
Commercial Procedure ( Articles 240, 241 and 417); and the Code of Criminal Procedure 
(Article  399). Monetary sanctions are imposed when there has been a conviction either in civil 
proceedings for infringement or in the determination of civil proceedings in criminal cases.  
3.189.   Pursu ant to Article  5(j) of the RECAUCA, one of the powers of the Customs Service is to 
apply the corresponding control measures to protect IPRs, in accordance with the relevant 
international conventions. Moreover, Article 316 of the RECAUCA gives the DGA compe tence to 
                                                
199 The regulatory framework for prote ction of pharmaceuticals and agricultural chemicals is set out in 
Articles  181-A to 181 -E of the LPI.  
200 Article  13 of the Law on medicines, enacted by Legislative Decree No.  1008 of 22  February  2012.  
201 Article 181 -A of the LPI.  
202 The LMOSD was amended by L egislative Decree No.  358 of 2  May 2013.  
203 Article  17 of the LPU, as amended by Legislative Decree No.  366 of 3  May 2013.  
204 The appeal is reviewed by the same registry official who refused registration in the first place, who 
must draw up a record of the a llegations put forward. If registration is still refused, the party concerned may 
turn to the registry official's immediate superior, and a hearing is set for the third day. The immediate superior 
must resolve the dispute within a maximum period of eight d ays. Article  18 of the LPU.  
205 Article  184 of the LPI.  WT/TPR/S/344 • El Salvador  
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  apply border measures for the proper enforcement and protection of industrial property rights, 
copyright and related rights. The DGA may act to apply border measures: (i) on the basis of 
resolutions by the competent authority; (ii) ex officio  where applicable; or (iii)  following a 
complaint from the owner of the duly accredited right.  
3.190.   El Salvador's Penal Code defines intellectual property offences (infringement of copyright 
and related rights, effective technological measures, information on the ma nagement of rights and 
rights in satellite signals), as well offences concerning industrial property (infringement of patents, 
utility models, industrial designs, trademarks and other distinctive commercial signs, trade secrets 
and disclosure of industrial  secrets). The Code determines penal sanctions for these offences 
depending on the type and gravity of the offence committed, ranging from two to six months of 
imprisonment in the case of intellectual property offences206, and six months to four years for 
industrial property offences.207 Notwithstanding the foregoing, combating piracy of music and 
videos and, to a lesser extent, infringement of rights in satellite signals, continues to be one of the 
major challenges facing the Salvadoran Government as far as en forcement of IPRs is concerned.  
3.191.   The authorities have indicated in connection with this review that no statistics are available 
on the number of cases of infringement of IPRs during the review period.  
 
                                                
206 Intellectual property offences and the penalties applicable are defined in Title VIII, Chapter VII 
(Articles  226, 227, 227 -A, 227 -B and 227 -C) of El Salvador's Penal Code.  
207 Industrial property offenc es and the penalties applicable are specified in Title IX, Chapter I 
(Articles  228-231), of El Salvador's Penal Code.  WT/TPR/S/344 • El Salvador  
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  4  TRADE POLICIES BY SE CTOR  
4.1  Agriculture  
4.1.1   Features  
4.1.  The agri cultural sector expanded slightly between 2009 and 2014, at an average annual rate 
of 0.4%. Its performance was uneven, with alternating periods of contraction ( -2.9% in 2009) and 
expansion (3.5% in 2012) culminating in a rise of 1.6% in 2014 (Table  4.1). There was a small 
decline in its share of GDP from  12.6% in 2009 to 12.1% in 2014.1 These figures take only the 
agricultural sector itself (agriculture, hunting, forestry and fishing) into account and do not include 
the value of agro -industrial production,  input production or services. The relative importance of the 
sector is clear from its capacity to generate employment. About 41% of the population live in rural 
areas and of these some 40% work in the agricultural sector.2 In 2013, the sector employed 
515,011 people, a figure equivalent to 19.58% of the country 's active labour force.3 
Table 4.1 Principal indicators for the agricultural sector (maquila excluded), 2009 -2014  
 2009  2010  2011  2012  2013  2014  
Agricu lture, hunting, forestry and fishing        
Production (US$ million)  1,130.3  1,165.6  1,136.9  1,176.2  1,171.0  1,189.9  
Share of GDP (at 1990 constant prices)  12.62  12.84  12.25  12.44  12.16  12.12  
Growth rate (at 1990 constant prices)  -2.9 3.1 -2.5 3.5 -0.4 1.6 
Contribution to agricultural production  (%) 
Green coffee ( café oro ) 9.74 12.54  11.3 9.58 5.99 4.73 
Cotton  0 0 0 0.01 0.01 0.01 
Staple grains  18.79  16.95  17.27  20.88  21.9 21.98  
Sugar cane  4.56 4.67 4.98 5.6 6.05 5.87 
Other agricultural products  25.58 24.81  24.17  23.47  24.05  24.57  
Livestock farming  19.18  19.05  19.26  18.8 19.35  19.53  
Poultry farming  12.77  13.33  13.84  13.52  14.16  14.58  
Forestry  6.31 6.18 6.41 5.44 5.68 5.85 
Hunting and fishery products  3 2.43 2.73 2.66 2.75 2.84 
Exportsa        
Value (f.o.b., US$ million)  905 969.9  1,313  1,236.2  1,223.1  1,029.9  
Contribution to total exports (%)  30.98  27.94  30.97  29.2 28.22  24.24  
Growth rate (%)  .. 7.17 35.37  -5.84 -1.05 -15.79  
Five most important products, by HS Chapter  (US$ million)  
09 –  Coffee, tea, maté and spices  231.9  214.5  465.5  301.1  234.8  111.7  
17 –  Sugar and sugar confectionery  130.8  206.5  215.7  259.5  279.0  252.6  
19 –  Preparations of cereals, flour, starch or milk  113.2  129.1  141.8  142.9  136.7  141.7  
22 -  Beverages, spirits and  vinegar  121.5  100 106.4  108.8  110.3  97.6 
16 –  Preparations of meat, of fish or of crustaceans, molluscs or 
other aquatic invertebrates  83.2 75.3 79.4 110.9  120.9  107.4  
Importsa       
Value (c.i.f., US$ million)  1,403.6  1,425.1  1,704  1,684.8  1,659.9  1,736 
Contribution to total imports (%)  20.88  18.26  18.26  17.65  16.56  17.65  
Growth rate (%)  .. 1.52 19.57  -1.12 -1.47 4.58 
Five most important products, by HS Chapter  (US$ million ) 
10 -  Cereals  223.2  214.4  336.6  287.3  226.1  233 
21 -  Miscellaneous edib le preparations  194 200.5  219.2  203.5  211.6  226.8  
15 -  Animal or vegetable fats and oils  130.8  154.9  202.7  190.2  170.9  169.1  
04 -  Dairy produce  126.6  141.4  143.1  155.4  163 167.7  
23 –  Residues and waste from the food industries; prepared animal 
fodder  98.3 105 115.3  136.0  145.5  163.8  
Agricultural trade balance (US$ million)b -498.6  -455.1  -390.9  -448.5  -436.8  -706.1  
.. Not available.  
a Agricultural sector values calculated using Chapters 1 to 24 of the Harmonized System.  
b Agricultural trade balance calculated using Chapters 1 to 24 of the Harmonized System.  
Source:  WTO Secretariat, on the basis of  data from the Central Reserve Bank of El Salvador 
http://www.bcr.gob.sv/esp . 
4.2.  Agricultural production is relative ly diversified. Staple  grains (maize, sorghum, beans and 
rice) were the leading products during the review period, accounting for 22% of the sector 's 
production in 2014. Coffee, sugar cane and poultry farming were also prominent. There has been a 
distinct decline in coffee 's share of total agricultural production since 2012, when café oro 
                                                
1 Statistical database of the Central Bank of El Salvador. Viewed at www.bcr.gob.sv . 
2 ECLAC  (2014).  
3 The figure includes the activities of crop farming, livestock farming, hunting, forestry and fishing. 
Directorate -General of Statistics and Census (2014).  
 WT/TPR/S/344 • El Salvador  
 
- 87 - 
 
  production began to be badly affected by the presence of roya (coffee rust), a coffee plant disease 
that damages the quality of the bean and the yield per plant. This, tog ether with adverse weather 
conditions , led to serious falls in the quantity and value of coffee bean production during 2013 and 
2014. In 2014, improved performance in staple  grain production, poultry farming, livestock 
farming and other agricultural segmen ts made it possible to offset the fall in coffee output and 
boost the growth of the agricultural sector.  
4.3.  The agricultural sector is an important generator of foreign currency for the country. 
Its contribution to exports amounted to 24.2% in 2014. Exports e xpanded substantially between 
2009 and 2012, but in the following years annual values declined as a result of the fall in coffee 
and staple  grain production. Overall, exports grew by 13.8% between 2009 and 2014. In  2014, 
agricultural products accounted for  17.6% of total imports, the products most imported being 
cereals, miscellaneous edible preparations and animal fats. Imports of the five most prominent 
agricultural products rose during the period under review. El Salvador continues to be a 
net importer o f agricultural products. The agricultural trade deficit increased from US$498.6  million 
in 2009 to US$706.1  million in 2014.  
4.4.  The El Niño phenomenon led to serious droughts during the 2014 and 2015 planting seasons, 
which mainly affected the production of r ed beans and maize, both an integral part of the staple 
national diet.4 El Salvador restricted exports of red beans between 15  May 2014 and 
31 December  2015, as a temporary measure to maintain price stability and ensure an adequate 
supply of the domestic m arket (Section 3.1.6).5 It is considered that the drought may also have 
affected agro -industrial production as, for example, in the case of processed can e sugar.  
4.1.2   Agricultural policies  
4.1.2.1   Institutional framework  
4.5.  The Ministry of Agriculture and Livestock (MAG) is responsible for establishing national 
agricultural policy, with the support of various centralized and decentralized technical bodies, such 
as the sector 's dedicated autonomous institutes.6 The MAG 's Sectoral Policies and Planning Office 
(OPPS) carries out analyses and evaluations of the sector 's economic performance, including 
social, environmental and land planning surveys, as well as diagnostic studies of the domestic and 
international environment to provide guidance for decision -making and the formul ation of 
agricultural sectoral plans and policies. The OPPS also frames institutional public investment policy, 
advises on the procedures for following up projects implemented in the sector, and counsels the 
Ministerial Office on agrarian policy matters an d regional and international trade negotiations 
relating to agricultural, forestry and fishery products.7  
4.6.  The organizational structure of the Ministry also includes the following technical offices: 
Directorate -General of Rural Development (DGDR), Director ate-General of Agricultural Economics 
(DGEA), Directorate -General of Plant Health (DGSV), Directorate -General of Forest Management, 
Catchment Areas and Irrigation (DGFCR), Directorate -General of Fisheries and Aquaculture 
Development (CENDEPESCA), and Direc torate -General of Livestock (DGG).  
4.7.  Other decentralized State agencies forming part of the agricultural sector are the Salvadoran 
Agricultural Processing Institute (ISTA), the National Agricultural and Forestry Technology Centre 
(CENTA), the National Agricu ltural College (ENA), the Agricultural Development Bank (BFA) and 
the Salvadoran Coffee Council (CSC). These institutions provide the Ministry with advice and 
technical support in specific areas.  
                                                
4 Online information from the United Nations Food and Agriculture Organization (FAO). Viewed at: 
http://www.fao.org/news/story/en/item/328614/icode . 
5 Executive Decision No. 516 of 14 May 2014 of the Ministry of Agriculture and Livestock on the  
"temporary restriction on red bean expor ts", as amplified by Executive Decision No. 626 of 4 June 2014.  
6 Online information from the Ministry of Agriculture and Livestock. Viewed at: 
http://www.mag.go b.sv/index.php?option=com_content&view=article&id=50&Itemid=85 . 
7 Ministry of Agriculture and Livestock (2015a).  WT/TPR/S/344 • El Salvador  
- 88 - 
  4.8.  El Salvador is a member of numerous regional and internatio nal bodies dedicated to the 
development of the agricultural sector, including the Inter -American Institute for Cooperation on 
Agriculture (IICA), the Central American Agricultural Council (CAC) and the United Nations Food 
and Agriculture Organization (FAO) . 
4.9.  Up until 2014, the objectives of Salvadoran agricultural policy were laid down in the Family 
Farming Plan 2011 -2014 (PAF). The planning and i mplementation of agricultural measures are 
defined in sectoral operational plans drawn up annually by the MAG. Si nce 2014, El  Salvador 's 
agricultural policy has been set out in the "Agriculture for Well -Being" Institutional Strategy Plan 
(PEI), an integral part of the Five -Year Development Plan 2014 -2019. The PEI identifies the main 
challenges facing the agricultural  sector: (i)  promoting the sustained growth of the agricultural 
sector by managing a scenario characterized by smallholdings ( minifundios ) and the dispersion of 
productive initiatives; (ii)  reducing the high level of dependence on imports for supplying the  
domestic market and guaranteeing food security; (iii)  establishing the basis for the adaptation of 
crop farming, livestock farming, fishing and aquaculture to climate change; and (iv)  efficiently 
exploiting the economic potential of the established produc tion base and domestic and foreign 
market opportunities.  
4.10.   The PEI also established the MAG 's main objectives for the period 2014 -2019: food 
sovereignty and security, strengthening of family farming, revival of coffee growing, development 
of livestock farmin g, development of fisheries and aquaculture, development of vegetable, cocoa, 
honey and forest product production, revival of reformed -sector cooperatives, modernization and 
expansion of irrigation infrastructure and area, environmental sustainability, mit igation of and 
adaptation to climate change, strengthening of the country 's plant and animal health status, and 
institutional modernization.8 
4.11.   Within the regional integration context, El Salvador participates in the Central American 
Agricultural Policy (PAC A), developed for the period 2008 -2017, along with Costa  Rica, Guatemala, 
Honduras, Nicaragua, Panama and Belize.9 Its objectives include: (i)  "contributing to the 
development of an economically, socially, environmentally and politico -institutionally susta inable 
Central American agriculture"; (ii)  promoting "conditions for the development of a modern, 
competitive, fair and regionally articulated Central American agriculture"; and (iii)  developing an 
institutional capacity for monitoring and evaluation purpo ses, so as to ensure its proper 
implementation.  
4.1.2.2   Policy instruments  
4.1.2.2.1   Border measures  
4.12.   Tariff protection in El Salvador 's agricultural sector is higher than in the manufacturing 
sector. In 2015, agricultural products (WTO definition) were subject to an average  tariff of 12.5%, 
as compared with the average tariff of 5.2% on non -agricultural products (petroleum excluded). 
In the same year, the average MFN tariff amounted to 6.3%. Among agricultural products, the 
categories with the highest average tariff rates we re dairy produce (26.2%), sugar and sugar 
confectionery (26.2%), and animals and animal products (25.8%). The highest tariff in the 
agricultural sector is 164% and is levied on imports of poultry thighs and legs (HS  02.07.13.93 -4 
and HS 02.07.14.93 -4). 
4.13.   Under its WTO commitments, El Salvador agreed to grant tariff quotas for imports of meat, 
milk, cheese, yellow maize, fats and oils, sugar, tobacco and tobacco products. In  accordance with 
the provisions of Article  XXVIII of the GATT  1994, in 2011 El  Salvador  proceeded to renegotiate 
and modify its Schedule of Commitments with respect to certain oils to align it on the HS  2002. 
The HS codes applicable to the tariff quotas for rape, colza or mustard oil and their fractions 
(HS 15.14) and other fixed vegetable f ats and oils and their fractions (HS  15.15) were modified, 
with 8,967 tonnes being allocated to each heading at an in -quota tariff rate of 20%.10 The 
modification entered into force on 9  March  2011.11 
                                                
8 Ministry of Agriculture and Livestock (2015b).  
9 Central American Agricultural Council (2007).  
10 WTO documents G/MA/TAR/RS/227 of 27 January  2011 and G/MA/TAR/RS/227/Corr.1 of 5  May 2011.  
11 WTO document WT/LET/760 of 25 May 2011 and its annexes.  WT/TPR/S/344 • El Salvador  
 
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  4.14.   During the period under review, El Salvador applied an an nual tariff quota for Cheddar -type 
cheese in blocks or slabs (HS 0406.90.20) with an in -quota tariff rate of 0% and an out -of-quota 
rate of 40%. El  Salvador has regularly notified this quota to the WTO. According to its latest 
notification concerning the y ears 2013 and 2014, an annual quota of 785 tonnes was applied for 
Cheddar -type cheese and in both years utilization of the quota amounted to just over 19%.12 
The allocation regime for the tariff quotas opened in accordance with  El Salvador 's 
WTO commitments  remained unchanged during the review period. Quotas are allocated by auction 
on one of El  Salvador's agricultural commodity and service exchange s (BOLPROS), established  by 
law.13 El Salvador applies tariff quotas to other agricultural products within the c ontext of 
obligations assumed in bilateral and regional trade agreements (Table  A4.1). 
4.15.   During the review period, El Salvador used a "scarcity quotas" mechanism as a provisional 
measure for alleviating shortages of some agricultural products, resulting main ly from the drought 
in 2014 and 2015. In July 2014, by Executive Decision of the MAG and the Ministries of the 
Economy and Finance, a scarcity quota at a zero tariff rate was opened for 9,000 tonnes of 
red beans (HS 0713.33.40) from any source outside the Central American region. A period of 
four months was allowed for importing the beans.14 In July 2015, the Salvadoran Legislative 
Assembly authorized a second red bean scarcity quota totalling 12,000  tonnes at a zero rate, 
irrespective of the country of prov enance.15 The mechanism is intended to maintain a stable and 
adequate supply following a poor growing season. Moreover, for the period from 8 July 2015 to 
30 November  2015, a 100,000 -tonne scarcity quota was opened for white maize (HS  1005.90.30), 
from any source outside the Central American region. Imports that fell within this quota benefited 
from a zero tariff rate, whereas a rate of 20% was applied to out -of-quota imports.16 
4.16.   With respect to export subsidies, El  Salvador 's latest notification indicated tha t no export 
subsidies were granted during the year 2002.17 The Secretariat has no knowledge of any subsidies 
having been granted since then.  
4.17.   El Salvador has reserved the right to apply additional tariffs to out -of-quota imports of 
products subject to tarif f quotas whenever their import prices fall below a trigger price 
(price -based safeguards) or the quantities exceed a certain threshold (volume -based safeguards), 
in accordance with the special safeguard provisions of the WTO Agreement on Agriculture. 
Accor ding to the notifications for the period under review, El Salvador did not apply any special 
safeguard measure between 2009 and 2015.18 
4.1.2.2.2   Domestic support  
4.18.   The main financial institutions providing credit for agriculture in El Salvador are the 
Agricultural Dev elopment Bank (BFA) and the Development Bank of El Salvador (BANDESAL).  
The BFA was established in 1973 and is the principal first -tier provider of credit for agricultural 
production. Between 2009 and 2014, the BFA disbursed US$367.4  million in agricultura l loans, 
of which 43.9% was for basic foods, 20.9% for aquaculture and fishing, and 12.7% for coffee. 
Agricultural loans accounted for about two thirds of BFA disbursements during the period.19 
                                                
12 WTO document G/ AG/N/SLV/43 of 28 January 2016.  
13 The legal framework can be found in the Regulations on the opening and administration of quotas  
(Decree No. 46 of 1999 ). Licenc es or access to quotas are allocated to importers by public auction through the 
BOLPROS, followed by the granting of an award certificate which the interested party subsequently presents to 
the Ministry of the Economy in order t o request the issuing of  the corresponding import licenc e for the tariff 
quota with a preferential tariff.  
14 Executive Decision No. 727 of 4 July 2014  of the Ministers of the Economy, Agriculture and Livestock, 
and Finance.  
15 Decree No. 63 of the Legislati ve Assembly of 23 July 2015. See also online information from the FAO  
at: http://www.fao.org/giews/food -prices/food -policies/detail/en/c/318257 . 
16 Decision No. 964 of 7 July 2015  of the Ministers of the Economy, Agriculture and Livestock, and 
Finance.  
17 WTO document G/AG/N/SLV/17 of 21 October 2003.  
18 WTO documents G/AG/N /SLV/37 of 6 March 2012 and G/AG/N/SLV/42 of 18 January  2016.  
19 Agricultural Development Bank (2014). The figures given cover the period between June  2009 and 
May 2014. In this report the figures are presented as preliminary data.  WT/TPR/S/344 • El Salvador  
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  In September 2015, the BFA 's lending rates for agricultural act ivities varied between 6.3% and 
18.2%.20 
4.19.   BANDESAL was set up in 2012 under the Law on the financial system for the promotion of 
development and operates under a joint board composed of representatives of the public and 
private sectors.21 The Bank mainly prov ides second -tier credit, acting as a facilitator for potentially 
profitable projects in the agricultural sector. The funds provided by BANDESAL through second -tier 
loans come from Salvadoran and foreign financial institutions.22 In 2014, BANDESAL granted 
931 loans for the agricultural sector totalling US$33.5  million, or 19.6% of its total lending.23 
BANDESAL also administers a Special Agricultural Development Trust Fund (FEDA), which can be 
used to provide interest rate relief on some loans to the coffee sec tor, and the Agricultural 
Guarantee Programme (PROGARA) for securing agricultural sector credit.  
4.20.   During the review period, agricultural sector support measures were designed to fit within 
the context of the priorities defined by the Ministry of Agriculture  and Livestock in accordance with 
the objectives of the Instituti onal Strategy Plan (Table  4.2). 
4.21.   Total public expenditure in the agricultural sector rose from US$56 million in 2009 to 
US$67  million in 2014.24 
4.22.   El Salvador 's latest notification concerning dom estic support measures dates from 2002.25 
The notification indicates that no reduction -exempt measures were implemented during that year, 
either under the heading of the green box or under that of development programmes. 
The Secretariat has no information r egarding domestic support measures implemented after that 
date. Within the context of this review, the authorities have indicated that they are engaged in a 
process of inter -institutional coordination that will make it possible to submit updated notificati ons. 
4.23.   The Government is working to establish a staple  grains policy and national supply and 
marketing system, with a view to ensuring the availability of these foods and controlling market 
distortions.26 
                                                
20 Online information from the Agricultural Development Bank of El Salvador. Viewed at: 
http://www.bfa.gob.sv/index.php?option=com_content&view=article&id=1355:tasas -de-intereses -y-
comisiones -septiembre -2015&catid=54:publicaciones -periodicas&Itemid=79 . 
21 Legislative Decree No. 847 of 22 September 2011.  
22 Online information from the Supervisory Authority for the Financial System of El Salvador. Viewed at: 
https://www.ssf.gob.sv/descargas/Paginas_publicas/SENAVAL/dar/html_informacion_mercado/clasificaciones_
riesgo/informes/2 013/junio_2013/SCRIESGO/SCRiesgoBANDESAL30062013.pdf . 
23 Statistics of the Development Bank of El Salvador. Viewed at: 
http://publica.gobiernoabierto.gob.sv/institutions/banco -de-desarrollo -de-el-
salvador/information_standards/estadisticas . 
24 Information provided by the Salvadoran authorities.  
25 WTO document G/AG/N/SLV/19 of  21 October 2003.  
26 Online information from the Ministry of Agriculture and Livestock. Viewed at: 
http://www.mag.gob.sv/index.php?o ption=com_k2&view=item&id=695:mag -lanzar%C3%A1 -nuevo -sistema -
de-acopio -y-comercializaci%C3%B3n -granos -b%C3%A1sicos&Itemid=168 . WT/TPR/S/344 • El Salvador  
 
- 91 - 
 
  Table 4.2 Summary of support measures for the agricultural sector, 2014 -2015  
MAG priorities  Measures / financial resources available  
Food sovereignty 
and security  Measures implemented to preserve levels of production and price stability and to prevent 
speculatio n within a context of droughts, such as those experienced in recent years:  
 Delivery of packages of maize seed and fertilizer for subsistence farmers (with US$18.8 
million of financing in 2015).  
 Delivery of packages of improved bean seed for subsistence far mers (US$5.9 million in  2014 
and US$19 million in 2015).  
 In 2016 it is planned to deliver agricultural packages of maize and bean seed for 400,000 
subsistence farmers, with US$25 million of financing.  
 Design of the "National staple grains supply and market ing policy".  
Strengthening of 
family farming   Technical assistance, delivery of incentives and training in post -harvest and business 
management.  
 Production of 5,000 quintals of seed (CENTA).  
 Training in fruit tree management (US$215,000 in 2014).  
 Input dev elopment programme (ISTA). Contributions of cucumber seed, vaccinations for 
poultry and bovine animals.  
 Training and technical assistance in tilapia production (US$162,000 in  2014).  
Anti-drought plan, delivery of more than 85,000 agricultural packages comp osed of certified 
seed and fertilizers (US$9 million in 2014 -2015).  
Revival of coffee 
growing   Creation and development of the CENTA -CAFÉ division.  
 Implementation of coffee rust monitoring stations.  
 Delivery of fungicide packages to combat coffee rust (US$ 4.56 million in 2014 -2015).  
 Programme for the renewal of the coffee -growing stock (7 million plants amounting to 
US$2.9  million in 2015).  
 Loans amounting to US$24.5 million under the coffee heading made through the BFA in 
2015.  
Development of 
livestock fa rming   Technical assistance with production, health, breeding and management of bovine dairy 
herds for 2,452 livestock producers (investment of US$1.3 million in 2014 -2015).  
 Distribution of 21 milk collection tanks equivalent to 22,000 litres per day among dairy 
cooperatives (US$108,500 of financing in 2015).  
 Construction of two milk processing plants (US$1.2 million of financing in 2015).  
 Installation of 20 semen banks, for improving the bovine herd, livestock production and 
productivity (US$260,000 of fina ncing in 2015).  
 Rehabilitation of the Family Farming Development Centre (CEDAF); construction of 
infrastructure; drilling, construction and equipping of 5 wells for supplying water for 
irrigation and other purposes (CEDAF – Morazán, partially financed with  the support of the 
Government of Japan (US$2 million for 2012 -2015)).  
Development of 
fisheries and 
aquaculture   Production of 18 million seeds for restocking with 1.79 million tilapia fingerlings, 12.9  million 
shrimp post larvae, 1.11 million oyster seeds  and 3 million curil seeds (US$265,000 in 2014 -
2015).  
 Delivery of food packages to 1,893 small -scale fishermen associated and registered with 
CENDEPESCA (US$151,440 from the Fishing Trust Fund in 2014 -2015).  
 Delivery of floating cages to small producers f or breeding tilapia (US$20,800 of financing in 
2014-2015).  
Development of 
vegetable, cocoa, 
honey and forest 
product 
production  - Fruit production programmes:  
 CENTA assistance programmes: technical assistance, delivery of production inputs, training 
in crop, nursery and post -harvest management. Delivery of 13,800 dwarf horn plantain 
rootstocks; construction of greenhouses (total financing of US$511,600 in  2015).  
- Vegetable production programmes:  
 Implementation of technical assistance, training in protect ed agriculture, post -harvest 
management, business management, marketing and organization. A total of 
97,218  analyses were carried out in soil, plant parasitology, agricultural chemistry and food 
technology laboratories (total financing of US$354,400 in 201 4-2015).  
 Projects for diversification of the vegetable crop (investment of US$181,000 in 2015).  
Revival of 
reformed -sector 
cooperatives   Administrative advice relating to the legalization of the managerial bodies and the 
membership list of the cooperative.  
 Digitization of the files of the reformed -sector cooperatives, registration sector, recognition, 
federations and confederations. Implementation of an IT platform for remote and 
simultaneous viewing.  
Modernization and 
expansion of 
irrigation 
infrastructur e and 
area  Programmes implemented by the Directorate -General of Forest Management, Catchment 
Areas and Irrigation (DGFCR):  
 Reconditioning of wells.  
 Reconditioning of the irrigation system in Zacatecoluca in order to reduce water losses and 
improve the effi ciency of the system (US$254,476 of financing in 2015).  
 The project "Development of the irrigation system to improve rice production in  El Porvenir", 
cofinanced by the Korea International Cooperation Agency (total  investment of US$4.5 
million between 2013 and 2015).  WT/TPR/S/344 • El Salvador  
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  MAG priorities  Measures / financial resources available  
Environmental 
sustainability, 
mitigation of and 
adaptation to 
climate change   Design of a platform for policy formulation and review of the strategy for adapting 
agriculture to climate change, for the benefit of 450,000 subsistence farmers and 70,500 
commercial -scale producers.  
 Projects for the development of sustainable agriculture, production and planting of orchard 
and forest plants, reservoir construction, transfer of good farming practices, water 
harvesting, promotion of forest -pasture syst ems (investment of US$5.57 million in 2014 -
2015).  
Strengthening of 
the country's plant 
and animal health 
status   More than 39,000 laboratory tests for checking the quality of food and pharmaceuticals, with 
a view to keeping food free of diseases and pathog enic agents (investment of US$ 
536,400  in 2014 -2015).  
 Sanitary surveillance and treatment programme. Monitoring of clinical cases, vaccination, 
deparasitization and application of vitamin compounds to prevent endemic and cross -border 
diseases. Inspection o f 16,991 production units: 20,164  bovine animals, 39,204 birds, 1,240 
pigs and 3,844 horses, among other species (investment of US$665,000 in 2015).  
Institutional 
modernization   Creation of an agricultural statistics system to generate estimates for the pu rpose 
of modernizing technical, methodological and IT processes, with a multiple and 
geo-referenced sampling frame (US$500,000 in 2015).  
Source:  WTO Secretariat, on the basis of accountability reports from the Ministry of Agriculture and Livestock 
for 20 13-2014 and 2014 -2015. Viewed at 
http://publica.gobiernoabierto.gob.sv/institutions/ministerio -de-agricultura -y-
ganaderia/information_standards/memorias -de-labores , and online information from the Korea 
International Cooperation Agency. Viewed at http://www.koica.go.kr . 
4.24.   During the review period, the Supervisory Authority fo r Competition (SC) made certain 
recommendations regarding competition in the sector. With respect to the poultry market, the SC 
recommended that the MAG should propose to the Ministry of the Economy "the drafting of 
technical regulations for the standardiz ation of poultry products (particularly eggs) that are in 
conformity with accepted international standards and promote competition".27 In addition, for the 
milk market, the SC recommended that the MAG should act to annul "…  Art. 22 of the Law on the 
promoti on of hygienic production of milk and milk products and the regulation of their sale, 
in order to harmonize the domestic legal system with the provisions of the CAFTA -DR and prevent  
their application from creating barriers to the entry of potential competi tors through the 
importation of pasteurized milk (and its different varieties) and powdered milk".28 The Salvadoran 
authorities have pointed out that they have made efforts to respond to the SC 's recommendations. 
For example, in the case of the rice market,  mentioned in the previous review of El Salvador 's 
trade policy in 2010, the entry of more mills into the market has been successfully pro moted.  
4.2  Energy  
4.2.1   Electricity  
4.25.   In 2014, electricity sector production amounted to US$34.1  million and accounted for 
0.66%  of GDP. Output was 8.2% higher than in 2010. In the fourth quarter of 2014, the sector 's 
foreign direct investment balance was US$935.4  million.29 
4.26.   In mid -2015, El Salvador 's electricity system had 1,586.9 MW of installed capacity. In  2014, 
net power generati on amounted to 5,793.1 GWh and came from the following sources:  27.7% 
hydroelectric, 23.4% geothermal, 38.9% thermal and 3.8% biomass (mainly bagasse (sugar cane 
residue)). The remaining 6.2% was imported. In 2014, in terms of the volume of international 
electricity transactions, 588.5 GWh were imported and 207.8 GWh exported. Net domestic demand 
amounted to 5,848 GWh.30 
4.27.   According to the Household and Multipurpose Survey (EHPM) 2012 carried out by the 
Directorate -General of Statistics and Census, around 95% of Salvadoran households have access 
                                                
27 Online information from the Supervisory Authority for Competition. Viewed at: 
http://www.sc.gob.sv/pages.php?Id=676&Id_menu=309010 . 
28 Article 22 establishes a ban on the importation of milk under certain conditions. Online information 
from the Supervisory Authority for Competition. Viewed at: 
http://www.sc.gob.sv/pages.php?Id=676&Id_menu=309010 . 
29 The data mentioned in this paragraph come from the economic database of the Central Reserve Bank 
of El Salvador. Viewed at: http://www.bcr.gob.sv . 
30 General Supervisory Authority for Electricity and Telecommunications (SIGET)  (2015).  WT/TPR/S/344 • El Salvador  
 
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  to electricity. Of the approximately 82,689 families that do not have access to electricity, some 
70% live in rural areas.31 
4.28.   El Salvador 's electricity market consists of 29 generators (14 wholesale and 15  retail) and 
8 distributors, while transmission is in the hands of a single, State -owned operator32 (although the 
law provides for the participation of private companies).  
4.29.   The transmission line of the Central American Electricity Interconnection System (SIEPAC), 
the main infrastructure of the Regional Electricity Market (MER), came into operation in 2012.33 
The SIEPAC has created a 1,793 kilometre -long 230 kW integrated transmission network 
connecting 15 substations in Central America, three of them in El Salvador. The comp any 
EPR-SIEPAC administers the transmission network under mandate from the member States; its 
board of shareholders is composed of one institution from each member country.34 
The State -owned hydroelectricity enterprise, the Hydroelectric Executive Commissio n of the 
Río Lempa (CEL) represents Salvadoran interests. During the first year of operation of the MER 
there was a 124% increase in electricity transactions between the countries of Central America. 
The SIEPAC network is expected to lead to a gradual redu ction in production costs and an increase 
in the reliability of the supply.35  
4.30.   The National Energy Council (CNE) is the sector 's governing body and responsible for 
formulating energy policy. The task of the General Supervisory Authority for Electricity and 
Telecommunications (SIGET) is to supervise and regulate the sector. The institutional framework is 
completed by the Transactions Unit (UT), which operates the transmission system, supervises the 
safety of the system and administers the wholesale electricit y market, and the CEL, which is in 
charge of financing certain subsidies.  
4.31.   The sector 's regulatory framework consists mainly of the General Electricity Law 
(LGE,  1996)36, the Regulations implementing the LGE (2008)37 and the Law establishing 
the National Ener gy Council (2007).38 The Law regulating the granting of small -scale 
generating  project concessions was approved by Legislative Decree No.  460, published on 
26 September  2013. During the review period, the CNE issued El Salvador 's New National Energy 
Policy 2010-2024, which lays down strategic guidelines for the future development of the sector. 
Its main objectives are: to diversify the energy matrix by placing emphasis on reducing the 
dependence on petroleum and its products; to strengthen the institutional and legal framework by 
reinforcing the role of the State in the regulation and development of the electricity market; 
to remedy the deficiencies and legal loopholes preventing users from being properly protected; 
to promote energy savings and the efficient  use of energy, both in the public sector and in 
industry; and to develop and consolidate regional energy integration.39 
4.32.   Under the LGE, it is necessary to obtain a concession in order to generate electricity from 
hydraulic or geothermal sources. On the othe r hand, a concession is not required to generate 
electricity from other sources or for transmission, distribution and marketing, but companies 
engaged in these activities must be enrolled in the Register of Electricity Sector Operators.40 
The LGE does not l ay down any nationality requirements for obtaining concessions or operating 
in El Salvador 's electricity market.  
4.33.   There have been no changes in the LGE since 2008. However, in 2012, El  Salvador 's 
Supreme Court declared unconstitutional two articles of the L aw relating to concessions. 
The judgment of the Supreme Court states that, under the constitution, power -generating 
                                                
31 Online information  from the  National Energy Council. Viewed at: 
http://www.cne.gob.sv/index.php?option=com_content&view=article&id=193&Itemid=212 . 
32 SIGET (2015).  
33 The MER was established by the Framework Treaty for the Central American Electricity Market (1996) 
signed by Panama, Costa R ica, Honduras, Nicara gua, El Salvador and Guatemala.  
34 Online information from EPR-SIEPAC. Viewed at: www.eprsiepac.com . 
35 Online information from the Inter-American Development Bank. Viewed at: 
http://www.iadb.org/mobile/news/detail.cfm?lang=es&id=10494 . 
36 Legislative Decree No. 843 of 25 October 1996.  
37 Decree No. 70 of 22 January 2008 and amendments thereto.  
38 Legislative Decree No. 404 of  1 October 2007.  
39 CNE (2010).  
40 Article 7 of the General Electricity Law . WT/TPR/S/344 • El Salvador  
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  concessions must be approved by the Legislative Assembly. Moreover, the judgment revoked the 
permanence of these concessions.41 For its part,  the Law regulating the granting of small -scale 
generating project concessions (2013) stipulates that concessions for such projects must be 
approved by the Legislative Assembly by decree, while establishing the conditions for the use of 
the expedient and a  term that may not exceed 50 years. SIGET is the competent authority for 
handling the corresponding concession procedure up to the stage preceding approval.42  
4.34.   The LGE requires generators and distributors to allow their installations to be interconnected 
and used for transporting electricity, except insofar as this may pose a threat to the operation or 
safety of the system.43 In the event of a disagreement, the parties may turn to SIGET to settle the 
dispute. According to the authorities, at the time of writi ng this report no use had yet been made 
of the dispute settlement mechanism for deciding cases of disagreements relating to 
interconnection. In 2011, as a result of a recommendation made by the Supervisory Authority for 
Competition, SIGET issued a Technica l Standard on Electrical Interconnection and Access to the 
Transmission Network for End Users, intended to regulate the procedures, requirements and 
obligations applicable to electrical interconnections between operators for the purpose of 
guaranteeing the  principle of free access to distribution and transmission facilities.44 
4.35.   The charges for the use of the transmission and distribution networks and for the operation 
of the transmission system and the wholesale market, as well as the charges for connecting u sers 
to the distribution networks, are subject to regulation and prior approval by the SIGET (Article  9 
of the LGE). SIGET also fixes the maximum electricity tariffs for the end user.  
4.36.   In 2014, the average end -user tariff was US$0.2249 per kWh. In 2015, ele ctricity rates 
were reduced by about 30%, thanks to low oil prices and the implementation of the Regional 
Electri city Market.  
4.37.   El Salvador directly subsidizes residential electricity consumption for users with a monthly 
consumption of between 1 and 100 kWh.  This subsidy cost US$174.1  million in 2014 
(US$1,035  million since its introduction in  1998) and is financed by the CEL.45 In view of the fall in 
the price of electricity, the residential subsidy for users with a consumption of between 100 and 
200 kWh was suspended on 15  April 2015. The subsidy for industrial electricity con sumption was 
abolished in 2009.  
4.38.   El Salvador is maintaining the tax exemptions provided for in the Law on tax incentives for 
the promotion of renewable energies in electricity generation,  in force since end 2007.46 Under this 
law, any new investment in the generation of electricity from renewable energy sources (hydraulic, 
geothermal, wind, solar or biomass) is eligible for tariff concessions and other tax benefits 
(Box 4.1). Since the law was introduced, El Salvador has increased its installed capacity by 
153.3  MW on the basis of geothermal and biomass renewable energy sources.47 
                                                
41 Judgment No. 28 -2008 of the Supreme Court of El Salvador of 27 June 2012. Viewed at: 
http://www.jurisprudencia.gob.sv . Concession s granted prior to the judgment will remain in force until the 
Legislative Assembly reviews the conditions on which they were agreed and, if in its opinion they satisfy those 
conditions, establishes their continuity and sets a term for them to end.  
42 Article 2 of the Law regulating the granting of sm all-scale generating project  concessions.  
43 Article 27 of the General Electricity Law . 
44 Decision No. 30 -E-2011 of the General Supervisory Authority for Electricity and Telecommunications . 
Viewed at: http://www.siget.gob.sv/attachments/1653_OB1879.pdf . 
45 SIGET (2015).  
46 Legislative Decree No. 462 of 20 December 2007.  
47 SIGET (2015).  WT/TPR/S/344 • El Salvador  
 
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  Box 4.1 Tax benefits for investment in the energy sector  
(i) Exempti on from import duties (during the first ten years) for machinery, equipment, materials and inputs 
exclusively intended for pre -investment and investment work on the construction and expansion 
of electricity generating plants, including substations and tran smission or sub -transmission power lines.  
(ii) Exemption from income tax for five years for projects of more than 10 MW and for ten years for projects 
of less than 10 MW.  
(iii) Total exemption from the payment of taxes on income stemming directly from th e sale of Reduced 
Emission Certificates (RECs) under the clean development mechanism (CDM) or on similar carbon 
markets.  
Source:  Article 3, Law on tax incentives for the promotion of renewable energies in electricity generation 
(Legislative Decree No. 462  of 2007) and its revision (Legislative Decree No. 148 of  2015).  
4.39.   In October 2015, the Legislative Assembly approved a reform of the Law on tax incentives 
for the promotion of renewable energies in electricity generation, in order to extend and relax the 
tax incentives regime for investment in renewable energy projects.48 The reform eliminates the 
20-MW ceiling set in the original law, which made projects exceeding that capacity ineligible for 
the tax benefit, and also incorporates new renewable energy techno logies such as tidal energy and 
biogas, while extending eligibility for the regime to existing power stations seeking to expand their 
renewable energy generating capacity.49 
4.40.   As part of the FOMILENIO I Project, carried out between 2007 and 2012, new power 
transmission lines and solar energy systems were installed in the northern zone, where electrical 
connectivity is lowest.50 As a result of these works, some  35,000 households obtained access to 
the electricity supply system and 1,950 households were equipped with solar panel installations for 
generating electricity. The new structures were built by a public -private partnership.  
4.2.2   Hydrocarbons  
4.41.   El Salvador imports almost all its fuel, especially oil for generating electricity. In  2014, 
the value of fossil fuel an d hydrocarbon imports amounted to US$1,746.1  million, which 
represented 17.8% of total merchandise imports.51 
4.42.   El Salvador does not have any proven petroleum reserves.52 In 2012, the country 's only 
oil refinery (in the Acajutla region) ceased operations, so t hat El Salvador stopped importing crude 
and now only imports refined petroleum products, on which the duty rate is ze ro. 
4.43.   In the first half of 2015, the wholesale fuel import and distribution market consisted of 
four companies, while the liquefied petroleum  gas (LPG) distribution market had five operators.53 
All these companies are privately owned. A recent study by the Supervisory Authority for 
Competition (SC) concluded that the liquid fuel market was characterized by moderate 
concentration; however, it ide ntified some problems (very lengthy procedures for granting 
authorizations to operate as a distributor and environmental permits, as well as disproportionate 
fines for technical infringements) which could discourage new players from entering the market.54 
4.44.   The Directorate of Hydrocarbons and Mining in the Ministry of the Economy is the authority 
responsible for defining policy and regulating the hydrocarbons market. The legislative framework 
                                                
48 Legislative Decree No. 148 of 28 October 2015.  
49 Online inform ation from the Legislative Assembly of El Salvador. Viewed at: 
http://www.asamblea.gob.sv/noticias/archivo -de-noticias/aprueban -reformas -a-la-ley-de-incentivos -fiscales -
para-el-fomento -de-las-energias -renovables -en-la-generacion -de-electricidad . 
50 FOMILENIO I is a project for cooperation between the United States ’ Millennium Challenge 
Corporation and the Government of El Salvador, implemented between 2007 and 2012 for US$460  million. 
The objectives included strengthening the physical infrastructure to create a climate  conducive to  investment. 
Information viewed at : https://www.mcc.gov/where -we-work/program/el -salvador -compact . 
51 Excluding maquila imports. Statistical database of the Central Reserve Bank of El Salvador. 
Viewed  at: http://www.bcr.gob.sv . 
52 Online information from the United States Energy Information Administration (EIA). Viewed at: 
http://www.eia.gov/beta/international . 
53 National E nergy Council (2015).  
54 Supervisory Authority for Competition (2015).  WT/TPR/S/344 • El Salvador  
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  consists of the Hydrocarbons Law55, the Law regulating the storage, t ransport and distribution of 
petroleum products56, and the Natural Gas Law.57 The legislation does not place limits on the 
participation of foreign capital in any of the activities linked with hydrocarbons . 
4.45.   There is no regulation of the prices for petrol or diesel. Every five years, the Ministry of the 
Economy issues a circular with end reference prices for both fuels. Prices are published for 
three  different geographical areas and are not mandatory.58 An ad valorem  tax is applied to the 
end reference price. T he calculations take into account the price of a barrel of oil, published 
quarterly by the Ministry of the Economy. The tax is levied at the rate of 1% if the per -barrel price 
does not exceed US$50, 0.5% if the price falls between US$50 and US$70, and 0% i f the price 
exceeds  US$70.59 
4.46.   El Salvador fixes maximum prices for LPG for domestic consumption and provides a subsidy 
for the most vulnerable segment of the population. LGP is the principal fossil fuel used for 
domestic purposes and its price has a major im pact on household budgets. During the review 
period, El Salvador revised the instrument relating to this measure with a view to improving the 
targeting of the subsidy and blocking illegal exports of LPG subsidized by El Salvador to other 
countries in the r egion.60 This revision empowered the Ministry of the Economy to establish the 
maximum selling price for LPG, the criteria for allocating the subsidy and the amounts of the 
subsidy. In 2011, the mechanism was changed from a direct end -price subsidy to a subs idy 
targeted by means of a voucher issued per household.61 There has been a considerable decline in 
the annual cost of the subsidy over the last two years, reflecting the fall in international 
hydrocarbon prices (Table 4.3).  
Table 4.3 Annual cost of the LPG subsidy, 2010 -2015  
Year Amount paid (US$ '000 ) 
2010 101,434.0  
2011 134,895.6  
2012 139,846.1  
2013 138,158.0  
2014 103,690.8  
2015 64,081.1  
Source:  Information provided by the Salvadoran authorities.  
4.3  Manufacturing  
4.47.   The manufacturing sector as a whole (including the companies that operate outside and 
those that operate inside the free/maquila zones) grew at an average annual rate of 2.3% 
between 2009 and  2014; the expansion was particularly marked in the ca se of exports, which 
increased at an average annual rate of 8% between these years.62 According to information 
provided by the authorities, the manufacturing sector employed around 397,000 people in 2014, 
which corresponds to some 15% of the labour force.  
4.3.1   Sector outside the free/maquila -zone regime  
4.48.   The value added of manufacturing industry operating outside the free/maquila -zone regime 
grew at an annual rate of 2.6% between 2009 and 2014. This growth reflects increases in the 
most relevant products: sugar, b asic and processed chemicals, milling and bakery products, other 
food products and textiles and made -up textile articles. The only heading not to increase during 
the review period was that of refined petroleum products, as a consequence of the closing of t he 
                                                
55 Legislative Decree No. 626 of 17 March 1981.  
56 Legislative Decree No. 169 of 30 November 1970.  
57 Legislative Decree No. 630 of 20 June 2008.  
58 The Ministry of the Economy publishes the  reference prices on its website . Viewed at: 
http://www.minec.gob.sv/precios -de-referencia -para-combustibles . 
59 Law on the special fuels tax, Legisla tive Decree No. 225 of 17 December  2009.  
60 Legislative Decree No. 698 of 29 April 2011 revised the Law regulating the storage, t ransport and 
distribution of petroleum products of 1970.  
61 World Bank (2015).  
62 WTO Secretariat calculations, based on data from the Central Reserve Bank of El Salvado r. WT/TPR/S/344 • El Salvador  
 
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  country 's only refinery (Section  4.2.2). The manufacturing sector (free/maquila zones excluded) 
contributed  21.3% of GDP in 2014 (Table 4.4).  
Table 4.4 Value added in the manufacturing sector (free/maquila zones excluded), 
2009 -2014  
 2009  2010  2011  2012  2013  2014  
Manufacturing sector        
US$ million (at 1990 constant prices)  1,836.5  1,862.6  1,922.9  1,961.9  2,024.8  2,091.8  
Growth rate  -2.48 1.42 3.24 2.03 3.21 3.31 
As a percentage of total GDP  20.51  20.52 20.72  20.75  21.03  21.31  
As a percentage of manufacturing GDP        
Meat and meat products  1.88 1.87 1.85 1.79 1.85 1.91 
Dairy produce  3.38 3.06 3.06 2.98 2.98 2.99 
Processed fish products  0.02 0.01 0.01 0.02 0.01 0.02 
Milling and bakery products  10.47 10.69  10.58  10.65  10.68  10.66  
Sugar  8.37 8.11 7.95 8.96 9.26 8.99 
Other processed food products  8.14 8.50 8.56 8.53 8.66 8.89 
Beverages  9.45 9.68 9.66 9.62 9.55 9.64 
Processed tobacco  0.00 0.00 0.00 0.00 0.00 0.00 
Textiles and made -up textile arti cles (other than 
clothing)  5.96 6.24 6.34 6.38 6.42 6.59 
Clothing  1.98 1.99 2.03 2.05 2.09 2.18 
Leather and leather products  4.29 4.26 4.29 4.27 4.35 4.65 
Wood and wood products  1.35 1.26 1.23 1.21 1.32 1.38 
Paper. paperboard and products thereof  3.49 3.52 3.75 3.75 3.79 3.65 
Products of the printing and allied industries  6.47 6.41 6.34 6.35 6.34 6.21 
Basic and processed chemicals  10.67  10.89  11.04  11.07  11.13  11.18  
Refined petroleum products  4.27 3.81 3.85 3.17 2.15 2.27 
Rubber and plastics product s 2.74 2.81 2.88 2.90 2.92 3.03 
Processed non -metallic mineral products  4.61 4.30 4.18 4.15 4.33 4.21 
Basic and processed metal products  5.35 5.46 5.34 5.09 5.21 4.82 
Machinery, equipment and supplies  3.03 3.02 3.00 3.00 2.94 2.83 
Transport equipment a nd miscellaneous manufactures  3.99 4.02 3.95 3.96 3.92 3.80 
Source:  WTO Secretariat, on the basis of  statistical data from the Central Reserve Bank of El  Salvador. 
Viewed at: http://www.bcr.g ob.sv/bcrsite/?cat=1012&lang=es . 
4.49.   Between 2009 and 2014, exports of manufactured goods (excluding those from 
free/maquila zones) grew at an average annual rate of 10%, reaching US$4,040  million in 2014, 
as compared with US$2,509 million in 2009.  
4.50.   Manufactur ing sector policy is laid down in the document "Industrial Policy 2011 -2024". 
Its key objectives include: (i)  increasing industrial and agro -industrial productivity by improving 
quality systems, promoting technological restructuring and encouraging innovat ion in production 
processes; (ii)  analysing and implementing mechanisms aimed at reducing manufacturing 
industry 's main production costs; (iii)  increasing market share by improving the penetration and 
positioning of Salvadoran products in existing and new markets; and (iv)  creating the conditions 
for making the transition from an industry based on manufacturing to a knowledge -based industry 
integrated into global chains. For the period covered by the Industrial Policy, the authorities have 
decided to give p riority to developing the food and beverages, chemical -pharmaceutical products 
and textiles and made -up textile articles industries.63 
4.51.   In 2015, the average MFN tariff rate for the manufacturing sector (according to the 
ISIC, Rev. 2) was 6.2%, and the averag e MFN tariff for manufacturing was 0.1% lower than the 
overall average MFN rate. Manufactures with an above -average level of protection are food, 
beverages and tobacco (average MFN tariff rate of 15.3%), textiles and clothing (10%), wood and 
wood products (9.4%) and products under the heading "other manufactures" (9.2%).  
4.3.2   Free/maquila zones  
4.52.   El Salvador applies a free -zone regime which allows eligible enterprises to benefit from tax 
concessions. Within the context of its WTO obligations, El Salvador has under taken to abolish the 
export subsidies for which its free -zone scheme provides by 31  December  2015 at the latest 
(Section 3.2.4.3 ). 
                                                
63 Ministry of the Economy, Ministry of Agriculture and Livestock, Technical Secretariat of the President’s 
Office, Central Reserve Bank , and Salvadoran Industrialists Association (2011).  WT/TPR/S/344 • El Salvador  
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  4.53.   El Salvador maintains 17 free zones in different regions of the country. The assembly of 
textile products and articles of clo thing is the principal activity in El Salvador 's free/maquila zones. 
Other important items eligible for this regime include household electrical appliances, stationery, 
plastics and chemicals.64 The absolute value of exports of manufactured goods from the 
free/maquila zones underwent a slight increase up until 2013, but their share of Salvadoran 
exports declined. In 2014, exports of manufactures under the free -zone regime amounted to 
US$1,024  million, equivalent to 19.4% of total merchandise exports as compa red with 24.4% 
in 2009. The decrease is partly attributable to the substantial increase in exports of manufactured 
goods outside the free/maquila zones during the review period. Where imports are concerned, the 
free/maquila zones imported goods worth US$67 8.3 million in 2014, or 6.4% of total imports 
(Table  4.5). In  2015, exports amounted to US$1,112  million or 20.3% of the total, while imports 
amounted to US$675  million or 6.5% of the total.  
Table 4.5 Main ind icators for the free/maquila zones, 2009 -2014  
 2009  2010  2011  2012  2013  2014  
Number of enterprises  256 243 251 242 246 226 
Number of employees  65,000  70,321  70,915  77,037  80,597  84,667  
As a percentage of the labour force (%)  8.40 9.08 8.20 8.75 9.20 9.08 
Imports        
US$ million  604.7  613.6  636.8  717.2  752.4  678.3  
As a percentage of total merchandise imports  8.25 7.29 6.39 6.99 6.98 6.45 
Exports        
US$ million  945.2  1,028.7  1,068.6  1,106.0  1,158.2  1,024  
As a percentage of total merchandise expo rts 24.44  22.86  20.13  20.71  21.09  19.42  
Source:  WTO Secretariat, on the basis of  El Salvador 's notifications G/SCM/N/211/SLV, G/SCM/N/226/SLV, 
G/SCM/N/243/SLV, G/SCM/N/251/SLV, G/SCM/N/275/SLV, G/SCM/N/284/SLV (employment data); 
and WTO Secretariat calcul ations, based on data from the Central Reserve Bank of El Salvador 
("maquila" trade), available at:  http://www.bcr.gob.sv/bcrsite/?cat=1012&lang=es , and information 
provided by the Salvadoran authorities.  
4.54.   Manufacturing industry eligible for the free -zone regime continues to be an important 
generator of employment in El Salvador. During the review period, employment averaged 8.7% 
of the total labour force.  
4.4  Services  
4.4.1   Multilateral commitments  
4.55.   El Sa lvador undertook  specific commitments under  the General Agreement on Trade in 
Services (GATS)  in six of the 12 categories of services covered by the Agreement: business 
services; communication services; environmental services; tourism services; transport s ervices 
(air transport only) and financial services.65 Commitments were made in 25 of the sectors included 
in the Services Classification List drawn up  by the WTO Secretariat.  
4.56.   With regard to horizontal commitments, El Salvador's Schedule of Specific Commitm ents 
states that for a foreign company to engage in trade in the country it must, among other things, 
have a permanent representative in El Salvador and accept to be subject to Salvadoran law. In 
addition, it sets limits on profits and payments for rights to exploit foreign trademarks and 
patents, which foreign investment may remit. With respect to the commercial presence mode, the 
horizontal commitments indicate that, unless special authorization has been given, every employer 
must ensure that the firm's p ersonnel is at least 90 % Salvadoran, while the wages paid to 
Salvadorans must amount to not less than 85 % of the total wages paid.  
4.57.   El Salvador's Schedule of Specific Commitments includes exemptions from MFN treatment 
for all sectors in favour of the member  countries of the Central American Common Market. 
Moreover, in the case of financial services, El Salvador incorporated exemptions from 
MFN treatment in favour of Honduras and Nicaragua on the basis of the Convention on facilitating 
the financial integrati on of the countries of the Central American Isthmus.66 
                                                
64 UNCTAD (2010).  
65 WTO document GATS/SC/29 of 15  April 1994.  
66 WTO document GATS/EL/29 of 15  April 1994.  WT/TPR/S/344 • El Salvador  
 
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  4.58.   El Salvador participated in the negotiations and accepted the Fourth Protocol on Basic 
Telecommunications67 and the Fifth Protocol on Financial Services68 annexed to the GATS. 
El Salvador has revised and amplified its Schedule of Specific Commitments in both sectors 
accordingly.69 
4.4.2   Financial services  
4.4.2.1   Overview  
4.59.   In 2014, the contribution of the financial services sector (banks, insurance companies and 
other financial institutions) to total GDP was 4.6 %. 
4.60.   The sup ervision of the financial system is the responsibility of the Supervisory Authority for 
the Financial System (SSF) which, upon the passage of Legislative Decree No.  592 of 
14 January  2011, or new Law on the supervision and regulation of the financial syste m, became 
the sole supervisory body, combining the functions of the supervisory authorities for the financial 
system, pensions and securities. The SSF's objective is to preserve the stability of the financial 
system and oversee its efficiency and transpare ncy, always in accordance with best international 
practice. The SSF is responsible for supervising the individual and consolidated activities of the 
institutions that make up the system, including banks, cooperative banks, insurance companies, 
savings and loan societies, securities, pensions, financial conglomerates, credit agencies, 
commodity exchanges, the occupational risks regime of the Salvadoran Social Security Institute 
(ISSS), etc. The SSF is a part of the Central Reserve Bank, with its own legal pe rsonality and 
assets, of indefinite duration, and with administrative and budgetary autonomy for the exercise of 
the powers and duties conferred upon it by the Law.70 
4.61.   The Systemic Risk Committee, established by Executive Decree No.  172 of 
13 September  2013,  was set up to safeguard the stability and solvency of the financial system. 
The Committee's task is to monitor the development of risks in the financial system and manage 
any ensuing financial crises. It is composed of members representing the Ministry of  Finance, the 
Central Reserve Bank, the SSF and the Deposit Guarantee Institute (IGD).  
4.62.   El Salvador participated in the financial services negotiations and accepted the Fifth Protocol 
annexed to the GATS, incorporating it in its legislation by means of Legi slative Decree No.  653 of 
13 March  1999, published in Official Journal No.  97 of 26  May 1999. In those negotiations it made 
commitments with respect to the banking sector, including granting access to foreign financial 
institutions through the establishmen t of branches or participation in the ownership of domestic 
banks and finance houses up to a maximum of 75 % of the capital, provided that they have a 
prime rating and are subject to prudential regulation and supervision in their countries of origin.71 
In the case of foreign natural persons, the maximum percentage is 25 %. El Salvador has not 
undertaken  any commitments with respect to insurance.  
4.4.2.2   Banking  
4.63.   On 31  December  2015, the Salvadoran banking sector consisted of 22  institutions 
authorized to take deposits:  11 private banks, of which ten have foreign equity; two State -owned 
banks; five cooperative banks; and four savings and loan societies.72 The Salvadoran financial 
sector also includes other entities authorized to carry out credit operations but not to take  
deposits. On the same date there were eight financial conglomerates in operation.73 It is estimated 
that 91.6 % of total assets are now in the hands of foreign  equity  banks. In May  2016, there were 
no branches of foreign banks in operation.  
                                                
67 Ratified by El Salvador by means of Legislative Decree No.  1.031 of 29  April 1997.  
68 Ratified by means of Legislative Decree No.  613 published in the Official Journal of 26  May 1999.  
69 WTO documents GAT S/SC/29/Suppl.1 of 11  April 1997 and GATS/SC/29/Suppl.2 of 
26 February  1998.  
70 Online information from the SSF. Viewed at: http://www.ssf.gob.sv/index.php/institucion/ma rco-
institucional/historia . 
71 WTO document GATS/SC/29/Suppl.2 of 26  February  1998.  
72 Online information from the SSF. Viewed at: http://www.ssf.gob.sv/ index.php/nov/191 -
publicaciones/estadisticas/283 -instit-autorizadas . 
73 Supervisory Authority for the Financial System (2015a).  WT/TPR/S/344 • El Salvador  
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  4.64.   On 31  December  2015, the total assets of the banking system amounted to 
US$17,413.27  million, of which US$11,860.95  million corresponded to loans. Deposits amounted 
to US$10,911.66  million. Some 68.1 % of assets were concentrated in net loans, while liquid assets 
and finan cial investments accounted for 20.1 % and 7.3 %, respectively.74 
4.65.   The Salvadoran banking system remains characterized by good solvency and risk indicators 
but relatively high indebtedness. At 31 December  2015, the banking system was maintaining a n 
average  capital adequacy ratio of 22.4 %, which exceeds the statutory minimum of 12 % required 
by the Banks Law. At the same date , the net liquidity ratio was 32.3 %, which is also in excess of 
the legal requirement, while the legal debt ratio was 13.3 %, substantially hi gher than the 
statutory limit of 7 %, and the return on equity and the return on assets were 7.9 % and 1.0 %, 
respectively. Past -due loans amounted to US$268.1  million or 2.3 % of the total. In  2015, 34.8 % 
of total lending was for consumption, 21.8 % for the pu rchase of housing, 13.4 % for commerce, 
9.0% for manufacturing industry, and only  3.3% for agriculture.  
4.66.  The main legislation governing the banking sector consists of the Banks Law (Decree No.  697 
of 2 September  1999), together with its amendments, and relat ed laws.75 During the review period, 
the Law on facilitating financial inclusion (Decree No.  72 of 13  August  2015) was introduced for the 
purpose of regulating e -money activities and facilitating access to credit for MSMEs.  
4.67.   Under the Banks Law, all banks es tablished in El Salvador must be organized and operate as 
closed -end public limited companies with their capital divided into registered shares held by not 
less than ten shareholders. The Law stipulates that at least 51 % of the shares must be owned by 
Salvadoran or Central American natural persons, Salvadoran legal persons whose shareholders or 
majority members are Salvadoran or Central American natural persons or other Salvadoran legal 
persons, or foreign banks and other financial institutions which are su bject in their country of 
origin to prudential regulation and supervision in accordance with international practice and have 
received prime ratings from internationally recognized risk rating agencies. For this purpose, the 
SSF maintains a register of prim e foreign banks and financial institutions .76 
4.68.   The minimum capital required to set up a bank in El Salvador, whether domestic or foreign, 
is US$17.61  million. Foreign banks may establish a commercial presence through branches or 
representative offices, subje ct in both cases to authorization by the SSF. The authorization of the 
SSF is also required for a natural or a legal person to enter into any share ownership transaction 
that represents more than 1 % of a bank's capital. In the case of branches of foreign b anks, the 
capital must reflect the volume of activity in the country (working capital), which is specified in the 
authorization.  
4.69.   Representative offices of foreign banks may place funds in the country in the form of loans 
or investments, but may not take de posits. Branches of foreign banks, on the other hand, may 
engage in the same operations as banks established in the country, including opening subsidiaries 
in which the bank holds at least 51 % of the capital. In general, the Banks Law stipulates that the 
branches and offices of foreign financial institutions operating in El Salvador shall be accorded 
national treatment, with respect to both rights and privileges.  
4.70.   The Banks Law does not contain any provisions concerning either the cross -border supply of 
banking services or Salvadorans contracting for these services abroad. Foreign banks operating in 
El Salvador are accorded national treatment, the only exception being that, under the Law, 
                                                
74 Supervisory Authority for the Financial System (2015b).  
75 This includes: the Financial Leasing Law (Decree No.  884 of 20  June 2002) and amendments thereto; 
the Law on the reorganization and strengthening of commercial banks and savings and loan associations 
(Decree No.  659 of 30  November  1990) and amendments thereto; the Organic Law of the Pensions 
Supervisory Authority (Decree N o. 926 of 19  December  1996); the Law on cooperative banks and savings and 
loan societies (Decree No.  849 of 23  February  2000); the Law establishing the Multisectoral Investment Bank 
(Decree No.  856 of 21  April 1994); and the Law on facilitating financial i nclusion (Decree No.  72 of 
13 August  2015).  
76 In 2014, the Register contained the names of 71 banks from Austria, Brazil, Canada, Chinese Taipei, 
Colombia, France, Germany, Honduras, India, Israel, Italy, Japan, Mexico, Netherlands, Norway, Panama, 
Peru, P uerto Rico, Spain, Sweden, Switzerland, United Kingdom and the United States. Online information from 
the SSF. Viewed at: http://www.ssf.gob.sv/index.php/temas/registropublico/104 -informacion -
financiera/registros/197 -bancos -primera -linea. WT/TPR/S/344 • El Salvador  
 
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  depositors and creditors domiciled in El Salvador enjoy preferential ri ghts over the assets owned 
by a foreign financial institution in El  Salvador.  
4.71.   The Banks Law also regulates financial conglomerates and establishes mechanisms for their 
consolidated supervision by the SSF. A financial conglomerate is defined as a group of c ompanies 
characterized by the fact that more than 50 % of their shareholders' capital is owned by a holding 
company. This company must also be a member of the conglomerate and may have been 
established for the sole purpose of acting as a holding company, or  may be a bank established in 
the country (holding bank) and subject to supervision by the SSF. A holding bank may not invest 
in the share capital of institutions that administer pension funds or insurance companies, whereas 
a holding company that is not a  bank may hold minority stakes, up to 25 % of its base capital, in 
the shares of domestic pension -fund administering institutions. Apart from the holding company, a 
conglomerate may include a bank and one or more financial sector entities. A bank establishe d 
abroad may form part of a conglomerate, provided that the holding company owns at least 45 % of 
its shares and, moreover, various prudential requirements are met.77 
4.72.   The SSF is empowered to determine whether there is a "de facto conglomerate", if it 
conside rs that there are groups operating in that fashion without prior authorization. As of 
May 2016, the SSF had not identified any de facto conglomerate.  
4.73.   The IGD guarantees the public's deposits in the event of a bank being wound up or going 
into compulsory li quidation, up to a maximum of US$10,171 in 2016.78 All the private banks, the 
cooperative banks and the savings and loan societies are members of the IGD. The Mortgage Bank 
of El Salvador is subject to the same deposit insurance regime as a private bank, bu t in the case of 
the Agricultural Development Bank the guarantee is provided by the State. The guarantee 
excludes related -party and pledged loans. It is financed with contributions from the banks and 
other financial institutions.  
4.4.2.3   Insurance  
4.74.   The regulatory b ody for the sector is the Supervisory Authority for the Financial System 
(SSF), which supervises the activities of insurance companies, insurance intermediaries and 
reinsurers. The legal framework for the insurance market is based on the Law on insurance 
companies of 199679 and its implementing Regulations.80 The Law has not been revised since 
El Salvador's last trade policy review in 2010. In this connection, the authorities have pointed out 
that there is a preliminary draft of a new Law on insurance compani es, which is expected to be put 
forward as a proposal before the end of 2016. There is also a preliminary draft of a Law on 
insurance contracts, expected to be put forward as a proposal towards the middle or end of 2017. 
According to the authorities, these  preliminary drafts introduce important changes, such as the 
possibility of foreign companies being allowed to open branches.  
4.75.   Insurance companies may operate in the general insurance (casualty) branch, the personal 
insurance branch or in both branches. To be able to operate in both branches, an insurance 
company must not sell personal life annuity policies. If a company wishes to operate in this 
segment of the market, it must specialize solely in personal insurance. Bonds and reinsurance 
policies are other products that insurance companies may also offer.81 
4.76.   To operate in the Salvadoran market insurance companies and intermediaries 
(agents,  brokers) require the authorization of the SSF, which is granted for an indefinite period. As 
                                                
77 Including: (a) the foreign bank is subject to consolidated supervision by the SSF and, in its country of 
domicile, is supervised in accordan ce with international practice; (b) the SSF has signed cooperation 
agreements with the supervisory body of the host country to facilitate consolidated supervision; (c) the foreign 
bank is included for purposes of determining the solvency of the conglomerat e; and (d) it is shown that the 
holding company exercises control over the bank.  
78 The amount of the guarantees is adjusted every two years by the Executive Board of the SSF, in 
accordance with the provisions of the Banks Law. The last adjustment was made on 1 January  2016. Online 
information from the IGD. Viewed at: http://www.igd.gob.sv/index.php/novedades/estadisticas/historico -del-
limite -garantizado . 
79 Decree No.  844 of 21  October  1996, as amended by Decree Laws No.  893 of 21  November  1996 and 
No. 910 of 14  December  2005. The Law entered into force on 1  January  1997.  
80 Decree No.  44 of 20  April 1999, as amended by Decree No.  25 of 5  April 2001.  
81 Articles 19 and 21 of Decree No.  844 and Supervisory Authority for Competition (2012).  WT/TPR/S/344 • El Salvador  
- 102 - 
  part of the authorization pr ocedure, insurers must submit, among other documents, a list of their 
shareholders. If these are foreign insurance or reinsurance companies (from outside the 
Central  American area), they must show that they operate in accordance with the prudential 
regulat ions in force in their country of origin and that they have received prime ratings from 
internationally recognized rating agencies.82 These requirements do not apply to Central American 
companies. In order to practice, intermediaries must first obtain a fav ourable assessment from the 
Supervisory Authority; they are required to lodge security in support of their activities.83 
Intermediaries are not subject to nationality or residence requirements.84 
4.77.   Insurance companies have to be established in the form of closed-end public limited 
companies . The SSF determines the minimum fixed capital, which must be adjusted every 
two years, subject to the opinion of the Central Bank.85 In April  2016, the minimum fixed capital 
had been in force since 2014 and the next adjustmen t was expected in the course of 2016. At the 
time in question, the minimum fixed capital was: (a)  US$1, 336,900, if the insurer was engaged in 
general insurance; (b)  US$944,800, if it was engaged in personal insurance; (c)  US$766,500, if it 
was engaged in b ond operations; (d) US$3,796,200, if it was engaged in reinsurance and 
counter -guaranteeing operations ; or (e)  US$2,281,200, if it was operating in all branches of 
insurance. Insurance companies have to deposit the fixed capital in the Central Bank upon 
commencing operations.86 
4.78.   The Law continues to limit shareholding in insurance companies. At least  75% of the shares 
must be held, individually or collectively, by: (a) Salvadoran or Central American natural 
persons;  or (b) Salvadoran companies a majority of w hose shareholders are Salvadoran or 
Central  American natural persons; or (c) Central American or other foreign insurance or 
reinsurance companies. Likewise, no shareholder may own more than 1 % of the company's capital 
without the prior authorization of the  SSF.87 
4.79.   Foreign insurers may exercise a commercial presence only through companies legally 
established in El Salvador (subsidiar ies). Since the entry into force of the Law on insurance 
companies in 1997 the establishment of branches has not been permitted, but those branches that 
were already operating at the time were able to continue operating provided that the parent 
company complied with the assets requirement.88 At present, there is one branch still operating in 
El Salvador. Within the framework of the C AFTA-DR, El  Salvador undertook to allow the 
establishment of branches of foreign insurance companies.89 Although this undertaking has not yet 
been implemented, the authorities are considering changes in the legislation in order to make it 
possible, such as those included in the preliminary draft of the Law on insurance companies 
(see above).  
4.80.   The cross -border supply of insurance services is not permitted, but there are no restrictions 
on the consumption of insurance services abroad.90 Reinsurance contracts may  be concluded 
outside El  Salvador with foreign reinsurance companies or brokers enrolled in the corresponding 
SSF register.91 
4.81.   Policies are regulated by the SSF. A product may not be sold unless a specimen policy has 
previously been deposited and approved. P olicies with an annual premium of more than 
                                                
82 Article 6 of Decree No.  844 and online information from the SSF. Viewed at: 
http://www.ssf.gob.sv/index.php/servicios -14309/guia/ciudadano -46459/tramites/937 -seguros . 
83 Article 50 of Decree No.  844 and SSF Regulations NPS4 -11 for the authorization of insurance 
intermediaries (viewed at: http://www.ssf.gob.sv/index.php/normativa/normas/515 -normas -prud-seguros ). 
84 WTO document WT/TPR/S/266/Rev.1 of 16  March  2010.  
85 The SSF allows a period of six months for already established insurers to a djust to the new fixed 
capital requirement.  
86 Articles 4, 14 and 98 of Decree No.  844, SSF Instruction NPS1 -01 on establishing and operating 
insurance companies in El Salvador (viewed at: http://www.ssf.gob.sv/index.php/normativa/normas/515 -
normas -prud-seguros ), and online information from the SSF. Viewed at: 
http://ww w.ssf.gob.sv/index.php/noticias/210 -temas/marco -legal/capsoc/102 -seguros -4235839 . 
87 Articles 6 -7 5 of Decree No.  844 and online information from the SSF. Viewed at: 
http://www.ssf.gob.sv/index.php/noticias/210 -temas/marco -legal/capsoc/102 -seguros -4235839 . 
88 Article 111 of Decree No.  844. 
89 FTA explanatory document of September  2004. Viewed at: 
http://www.sice.oas.org/TPD/USA_CAFTA/Studies/SLVDocExpl2.pdf . 
90 WTO document WT/TPR/S/226/Rev.1 of 16  March  2010.  
91 Article 39 of Decree No.  844. WT/TPR/S/344 • El Salvador  
 
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  US$9,866  are exempt from this requirement.92 Policies must be sent to the SSF within five  days of 
their being signed. A 2012 study by the Supervisory Authority for Competition stressed that 
consumers could not obtain access to the policies deposited.93 The prices of policies are 
unregulated.94 
4.82.   The 24 insurance companies operating on the Salvadoran market at the end of 2015 were 
private firms and 14 of them had foreign ownership. Of these 24 companies, 7 were engaged in 
general insurance and 9 in personal insurance, while the rest were operating in both branches. The 
market is highly concentrated; in 2015, the first five insurers accounted for 57 % of total premiums 
underwritten and the first 10 insurers for 83 %. In add ition, there are some 1,250 insurance 
intermediaries registered with the SSF95; a sectoral study carried out by the Supervisory Authority 
for Competition in 2012 indicated that only part of those that were registered were actually in 
business.96 On 30  Septem ber 2015, some 77.5 % of the shares of the insurance companies 
operating in El Salvador were in the hands of Central American investors and 22.5 % in the hands 
of investors from outside the region.97 
4.83.   In 2015, the insurance companies placed US$608.63  million i n premiums (an increase of 
6.4% over 2014).98 The sector's penetration of the economy, measured by expressing premiums 
as a percentage of GDP, remained stable, at around 2 % of 2014 GDP.99 The density rate, which 
measures annual expenditure on insurance, per capita, was US$90 in 2015, with growth averaging 
5% over the last four years. L ife insurance was the best selling product during the review period 
(25.6 % total premiums underwritten in 2015) followed by accident and sickness insurance 
(17.7 %) and fire insu rance (15.5 %). 
4.4.3   Telecommunications  
4.4.3.1   Overview  
4.84.   In 2014, the telecommunications sector generated US$387.9  million, an increase of 7.8 % as 
compared with 2010, and its share of GDP amounted to 3.9 %. The balance of foreign investment 
in telecommunications reached US$1,329  million at the end of 2014, some 23.8 % higher than the 
balance in 2010.100 In 2014, the sector employed some 21,000 people.101 
4.85.   During the review period, the sector's indicators showed a positive trend. In 2014, mobile 
phone subscriptions numbered 9.19  million (up 15 % on 2010), achieving a penetration rate of 
143.6 per 100 inhabitants. Broadband internet access connections totalled 282,339 (a rise of 65 % 
relative to 2010), with a penetration rate of 4.41 per 100 inhabitants. The percentage of individual  
Internet users rose from 15.9 % in 2010 to 26 % in 2014.102 
4.86.   The sector has 12 fixed-line telephony operators, five mobile telephony operators and 
eight international long -distance operators. The two companies that arose out of the privatization 
of the State -owned ANTEL in 1997, the Telecommunications Company of El Salvador (CTE) and 
Telefónica Móviles El  Salvador  (formerly INTEL), are the dominant players in the domestic market. 
The CTE, which is majority Mexican -owned, controls around 90 % of the fixed -line te lephony 
                                                
92 In-session update No.  CD-44/2015 of 10  December  2015 (in force since January  2016).  
93 Supervisory Authority for Competition (2012).  
94 Article 44 of Decree No.  844. 
95 Online information from the SSF. Viewed at: 
http://www.ssf.gob.sv/index.php/temas/registropublico/104 -informacion -financiera/registros/200 -
intermediarios -seguros0 . 
96 Supervisory Authority for Competition (2012).  
97 Investors from Barbados; Bermuda; Bulgaria; France; Mexico; Spain; the United States; Bo livarian 
Republic of Venezuela. Supervisory Authority for the Financial System (2015a).  
98 See the Memoria Laborales  (annual report, various years) of the Supervisory Authority for the 
Financial System. Viewed at: http://www.ssf.gob.sv/index.php/institucion/marco -
institucional/informes/memorias . 
99 Supervisory Authority for Competition (2012).  
100 Online information from the economic database of the Central Reserve Bank of El Salvador. Viewed 
at: http://www.bcr.gob.sv . 
101 Online information from the statistics database of the International Labour Organization (ILO). 
Viewed at: http://www.il o.org/ilostat . 
102 Online information from the General Supervisory Authority for Electricity and Telecommunications, 
Telecommunications Indicators for 2014. Viewed at: http://www.siget.gob.sv . WT/TPR/S/344 • El Salvador  
- 104 - 
  market. Telefónica Móviles El  Salvador , which is Spanish -owned, is the player with the largest 
share of the mobile telephony market. Information on the market share of each fixed or mobile 
operator may be declared confidential, at the request of th e operators themselves, on the basis of 
Article 24 of the Law on access to public information.  
4.4.3.2   Institutional and legislative framework  
4.87.   The Ministry of the Economy is responsible for formulating telecommunications policy. The 
General Supervisory Authority f or Electricity and Telecommunications (SIGET) is the sector's 
regulatory body tasked with overseeing compliance with the legislative framework. SIGET is an 
autonomous public service institution, with its own legal personality and assets, headed by a 
Superi ntendent and an Executive Board, mainly appointed by the President of the Republic.103 
SIGET submits annual reports to the Ministry of the Economy.  
4.88.   The sector is mainly governed by the Law  on telecommunications  (LT)104 and the Law 
establishing the General Supe rvisory Authority for Electricity and Telecommunications 
(LCSIGET).105 The LT establishes the general framework for the granting of concessions, the 
operation of fixed and mobile telephon y services and the use of the radio -frequency spectrum, as 
well as the rights and obligations of the user and the operator. The LT does not require any 
enabling authorization or permit to provide Internet access services. The LCSIGET establishes the 
composition, functions and duties of the regulatory body.  
4.89.   Within the WTO, El Salvador participated in the negotiations on basic telecommunications 
and accepted the Fourth Protocol annexed to the GATS. It expanded the commitments made in 
1994106, binding services provided at national and international level via public and non -public 
basic telecommunications networks for all modes of supply and with respect to both market access 
and national treatment. In the case of commercial presence, El Salvador noted the requirement to 
apply to SIGET for a concession or operating licence.107 El Salva dor also assumed the obligations 
laid down in the Reference Paper relating to the Agreement on Basic Telecommunications.  
4.90.   Operators interested in offering telecommunications services must register as commercial 
telecommunications network operator s. Moreover , under the LT, to provide fixed and mobile 
telephony services, the interested party must obtain a public telephony service concession. 
Concessions are granted for 30 years, without any geographical limitation, and more than one 
concession may be granted f or the same area. The law does not make the holding of a concession 
for a public telephony service subject to any nationality requirement. However, concessions for 
providing free -to-air or subscription radio and television broadcasting services are reserve d for 
Salvadoran natural persons and legal persons with majority Salvadoran -owned capital.  
4.91.   Under the LT, the radio -frequency spectrum is owned by the State and classified as being 
for free use, official use or regulated use. No concession is needed to expl oit the free -use 
spectrum. Exploitation of the official spectrum is reserved for government institutions. The 
regulated -use spectrum consists of a number of frequency bands which the Law has not expressly 
classified as being for official or free use. To ex ploit the regulated -use spectrum it is necessary to 
obtain a concession granted by SIGET.108 Concessions are awarded by public auction and remain 
valid for 20 years. Pursuant to a judgment of the Supreme Court  of Justice (CSJ) , at the beginning 
of May  2016 t he Legislative Assembly approved amendments to the LT aimed, among other 
things, at regulating the allocation of radio frequencies and establishing alternatives to public 
auction, such as competitions which make it possible to take into account not only th e bidder's 
business proposal but also the communication proposal and its attractiveness for the target group. 
As a result of the amendments, SIGET will determine the way in which frequencies are allocated, 
taking into account the target group and the secto r that is seeking a band in the radio -frequency 
spectrum.  
                                                
103 The Executive Board is  composed of three directors, two chosen and appointed by the President of 
the Republic and one by the Supreme Court of Justice of El Salvador. The Superintendent is chosen and 
appointed by the President of the Republic.  
104 Legislative Decree No.  142 of 14  November  1997 and its revisions.  
105 Legislative Decree No.  808 of 12  September  1996.  
106 WTO document GATS/SC/29 of 15  April 1994.  
107 WTO document GATS/SC/29/Suppl.1 of 11  April 1997.  
108 Article 13 of the Law on telecommunications.  WT/TPR/S/344 • El Salvador  
 
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  4.92.   Both the LT and the LCSIGET have regulations which supplement and give details of the 
rules on participation in the telecommunications market. The new Regulations implementing  the 
Law on telecommuni cations, enacted in 2011, contain, among other things, the technical 
definitions for the sector, the requirements and procedures for granting concessions, the criteria 
and methodology for determining maximum tariffs, and more detailed provisions governing access 
to interconnection between operators.109 
4.93.    Article 4 of the LT establishes the principle of free negotiation of prices and conditions 
between operators in the sector. However, services and rights designated by the LT as essential 
resources, which mainl y comprise interconnection, and those classified as public services, which 
include fixed and mobile telephony services, are excluded from this regime.110 On the basis of 
these rules, SIGET determines maximum tariffs for essential resources and fixed and mobi le 
telephony services.  
4.94.   Every commercial telecommunications network operator must provide access to essential 
resources to anyone who asks for them, subject to appropriate payment and without 
discrimination of any kind. The Law states that "[t]he access gra nted must be of the quality and at 
the switching nodes requested , provided that this is technically feasible. When requesting access 
to an essential resource, every operator will be entitled to contractual terms similar to those that 
the operator granting the resource has agreed with other operators".111 In the event of a dispute 
between operators regarding the technical conditions of access , the parties may turn to SIGET to 
settle the dispute.112 In the period 2009 -2015, SIGET was asked to initiate the alterna tive 
settlement procedure for disputes concerning access to essential resources in six cases, of which 
only two met the requirements for merit and admissibility, but were not carried to a conclusion 
because the requesting operator withdrew from the proceed ings while they were still in progress, 
after gaining access to the interconnection by negotiation.113 
4.95.   SIGET's regulatory role was reinforced by a revision of the LT in 2010.114 As a consequence 
of that change, SIGET has to conduct an annual review of the maxi mum tariffs for fixed and 
mobile telephony services, as well as of the charges for interconnection between fixed and mobile 
network operators. The adjustment of the tariffs and charges has to be based on cost studies and 
international price comparisons, us ing criteria recognized by the International Telecommunication 
Union. SIGET issues an annual resolution containing the tariff adjustments, which is published in 
the Official Journal. At present, the maximum tariffs for interconnection between operators are : 
US$0.01297 for interconnection to fixed network exchanges and US$0.02988  for interconnection 
to mobile network exchanges.115 During the review period, the maximum value of the tariffs for 
users showed a tendency to fall.116 
4.96.   In March  2014, the tax established  by the Law on the specific tax on telephone calls from 
abroad that terminate in El Salvador (2008) was declared unconstitutional by the 
                                                
109 Decree No.  84 of 15  July 2011 repealing and replacing the former 1998 Regulation.  
110 Article 19 of the LT defines essential resources as: interconnection, at all levels, for the purpose of 
terminating telecommunications or transferring telecommunications originating in the network of  one of the 
parties to another network selected by the end user; signalling; the handover of automatic identification of the 
number of the user originating the communication; billing data; the portability of the user's telephone number; 
the listing of user s in the telephone directory; the right of access to the databases of the public directories of 
the customers of the service -providing operators; unbundling of the fixed -line network for the interconnection 
of commercial telecommunications networks; colloc ation for the interconnection of commercial 
telecommunications networks; all those facilities of a fixed -line network for the provision of a public 
telecommunications service, offered by fixed line, which are exclusively or predominantly supplied by a sing le 
provider or by a limited number of providers and which it is not economically or technically feasible to replace 
for the purpose of supplying the interconnection service.  
111 Article 20 of the Law on telecommunications.  
112 The alternative procedure for set tling disputes over access to essential resources is regulated in 
Articles 86 to 93 of the Law on telecommunications.  
113 Information provided by the Salvadoran authorities.  
114 Article 8 of the Law on telecommunications, as revised by Legislative Decree No.  295 of 
4 March  2010.  
115 The latest interconnection tariffs date from 2015 and were published in SIGET Resolution 
No. T-0386-2015, Official Journal, Vol. No.  409 of 1  October  2015.  
116 The latest review of maximum tariffs for users, in force since 1  November  2015, was issued in SIGET 
Resolution No.  T-0386-2015, Official Journal, Vol. No.  409 of 1  October  2015.  WT/TPR/S/344 • El Salvador  
- 106 - 
  Supreme  Court.117 The CSJ considered that the levy constituted double taxation and was contrary 
to the principle of fair taxation .118 
4.97.   In 2014, SIGET issued a number portability regulation.119 The regulation stipulates that 
portability must be provided within a maximum of three working days for fixed telephone numbers 
and one day for mobile telephone numbers. This operation is fr ee of cost for the end user.120 In 
August  2015, SIGET confirmed that number portability had begun to operate in El Salvador.  
4.98.   During the review period, the Supervisory Authority for Competition (SC) conducted  an 
ex officio  investigation of anti -competitive pr actices in the telecommunications market. In 
December  2011, the SC fined four telephony operators for agreeing the prices for calls from fixed 
to mobile lines.121 Moreover, in October  2015, the SC decided to fine five operators in the sector 
for abusing thei r dominant position in the market for "intermediate inward international traffic 
services for the termination of calls in their own networks".122 The SC determined that the 
operators had created obstacles to the entry of new competitors or the expansion of e xisting 
competitors by the use of delaying tactics aimed at slowing down or hindering the negotiation of 
access to the interconnection.123 Since  2007, the SC has been recommending that SIGET issue a 
telephone interconnection regulation as a means of stimulat ing competition in the sector.124 At the 
time of writing this report, a specific telephone interconnection regulation had not yet been issued; 
however, Title V of the Regulations implementing  the Law on telecommunications, as revised by 
Executive Decree No.  84 of 15  July 2011, contains detailed provisions concerning interconnection 
between operators.  
4.99.   The National Electricity and Telephony Investment Fund facilitates access to telephony (and 
electricity) for the rural and low -income segments of the population by subsidizing infrastructure 
and the supply of services. The Fund's resources consist of 100 % of the income produced by 
electricity generating concessions and 98.5 % of the income produced by telecommunications 
service and radio -frequency spectrum concessi ons and licences.125 
4.100.   In 2011, El Salvador introduced a Special Law on interception of telecommunications.126 
This legislation guarantees the confidentiality of telecommunications and the right to privacy, while 
allowing the interception of communications in ex ceptional cases subject to judicial authorization 
and only in the context of an investigation of offences punishable by law. It also included an 
obligation upon operators to provide the authorities with the information requested.  
4.4.4   Transport  
4.4.4.1   Overview  
4.101.   The "transport and warehousing" sector generated US$547.5  million in  2014, an increase 
of 7.6 % as compared with 2010. Over the period 2010 -2014 the sector contributed an average of 
3.6% to total GDP.127 In 2014, foreign direct investment in the transport sector pro duced a 
                                                
117 Legislative Decree No.  651 of 14  July 2008.  
118 CSJ, Judgment No.  39-2010, published in the Official Journal, Vol. No.  402 of 31  March  2014.  
119 Decree No.  58 of 18  September  2014.  
120 Portability costs US$2.82 and is paid by the telephone operator to which the user wishes to move.  
121 On 23  April 2010, the companies Telefónica Móviles El  Salvador, Telemóvil El Salvador, Digicel and 
Intelfón adopted an agreement to fix the tariff at US$0.21 per minute, plus the tax on the transfer of property 
and the supply of services, for a call made from any fixed line to their mobile networks, an anti -competitive 
practice defined as such in Article 25(a) of the Competition Law . 
122 Press release C -24-15 of the Supervisory Authority for Competition dated 28  October  2015. Viewed 
at: http://www.sc.gob.sv/uploads/C -24-15.pdf . 
123 The companies sanctioned were the Telefónica Móvile s El Salvador, the El Salvador 
Telecommunications Company, CTE Telecom Personal and Telemóvil El Salvador. Altogether, the fines imposed 
on the operators totalled US$2.25  million.  
124 Online information from the SC. Viewed at: 
http://www.sc.gob.sv/pages.php?Id=677&Id_menu=309010 . 
125 Law on the National Electricity and Telephony Investment Fund, Legislative Decree No.  354 of 
9 July 1998.  
126 Legislative Decree No.  285 of 12  March  2010.  
127 Online i nformation from the database of the Central Reserve Bank of El Salvador. Viewed at: 
http://www.bcr.gob.sv . WT/TPR/S/344 • El Salvador  
 
- 107 - 
 
  balance of US$37.1  million, an increase of 57.6 % on the balance for 2010.128 The sector employed 
some 56,000  people in 2014.129 In terms of the mode of transport used, the value of El Salvador's 
foreign trade (imports plus exports) can be broken down a s follows: land 41.95 %; 
maritime  20.15 %; air 7.3 %; and multimodal 30.6 %.130 
4.102.   The Vice -Ministry of Transport (VMT), part of the Ministry of Public Works, Transport, 
Housing and Urban Development, is the reference authority for policy planning and implementatio n 
in the sector. The VMT concentrates its efforts mainly on the regulation of land transport, the 
implementation of the public transport system, and transit management. Three government 
agencies complete the institutional framework for the transport sector , namely, the Maritime Port 
Authority  (AMP), which regulates the technical and business aspects of maritime transport 
operations; the Civil Aviation Authority (AAC), which is in charge of supervising and regulating air 
transport; and the Executive Autonomo us Ports Commission (CEPA), responsible for administering 
transport infrastructure (ports, airports and railways).  
4.103.   Although , initially, CEPA was only in charge of port management, it was progressively 
mandated to take over the administration of the network  operated by National Railway s of 
El Salvador, San Salvador's Monseñor Óscar Arnulfo Romero y Galdámez International Airport and 
Ilopango Airport.  
4.4.4.2   Maritime transport and ports  
4.104.   In 2014, the volume of foreign trade carried by sea amounted to 4.25  million ton nes, 
slightly less (by 4.2 %) than in 2009. The cargo moved consisted of 3.08  million tonnes of imports  
(72.4 %) and 1.17  million tonnes of exports (27.6 %).131 In value terms, 31 % of Salvadoran 
imports and 9.4 % of exports were moved by maritime transport in 20 15.132 
4.105.   El Salvador does not have its own merchant fleet.133 The country has two commercial 
seaports managed by the State through CEPA: the port of Acajutla in the west (some 50 km from 
the border with Guatemala) and the port of La Unión in the east (on the Gul f of Fonseca, bordering 
on Honduras). The port of Acajutla is by far the more important. In 2014, it handled almost all 
El Salvador's maritime cargo, i.e. an average of 354,000 tonnes per month.134 Of the merchandise 
moved 58 % was bulk cargo while the remain ing 42 % was containerized. The port of La Unión, the 
construction of which was completed in 2008 with financial support from Japan's International 
Cooperation Agency (JICA), reports a low volume of operations.135 A third port, Puerto Corsaín, is 
managed by t he Salvadoran Investment Corporation (an autonomous government agency) and 
handles relatively small volumes of cargo (32,000 tonnes in 2014), consisting mainly of fishery 
products (tuna) and fertilizers.136 
4.106.   The legislative framework for maritime transport is  based on the General Maritime Port 
Law (LGMP)137, which established the AMP as the subsector's regulatory body. El Salvador has not 
made any significant changes in its maritime transport legislation since its last trade policy 
review.138 
                                                
128 Online information from the database of the Central Reserve Bank of El Salvador. Viewed at: 
http://www.bcr.gob.sv . 
129 Online information from the statistics database of the International Labour Organization (ILO). 
Viewed at: http://www.ilo.org/ilostat . 
130 Information provided by the Sal vadoran authorities.  
131 CEPA (2014a).  
132 Information provided by the Salvadoran authorities.  
133 UNCTAD (2014).  
134 CEPA (2014b).  
135 In the first half of 2014 the port of La Unión handled an average of 3,591 tonnes per month.  
Online information from the port of L a Unión. Viewed at:  
http://publica.gobiernoabierto.gob.sv/institutions/comision -ejecutiva -portuaria -
autonoma/informat ion_standards/estadisticas . 
136 Information provided by the Salvadoran authorities.  
137 Legislative Decree No.  994 of 1  October  2002 and amendments thereto.  
138 During the review period minor changes were made to the LGMP: the AMP was empowered to 
acquire immov able property for use as administrative offices (Legislative Decree No.  732 of 29  July 2014) and, 
by statute, added two directors from the private sector to its board (Legislative Decree No.  94 of 
18 August  2012).  WT/TPR/S/344 • El Salvador  
- 108 - 
  4.107.   Where the WTO is conc erned, El Salvador has not made any specific commitments in the 
maritime transport subsector under the GATS.  
4.108.   CEPA's mandate is set out in its Organ ic Law.139 In addition to managing transport 
infrastructure, in its capacity as port operator CEPA proposes the  charges applicable to the 
provision of port logistics services.140 The charges proposed are subject to ratification by the AMP. 
In June  2015, the AMP approved a new list of charges for port services supplied to cargo and 
passenger vessels in the port of Aca jutla, valid from 1  August  2015 up until 31  July 2020.141 
El Salvador's port charges are among the lowest in the region.142 
4.109.   El Salvador aspires to become a regional logistics hub on account of its strategic 
geographical location and is therefore seeking to pro mote foreign investment in ports.143 CEPA is 
authorized to invite invitations to tender, in accordance with the procedures laid down by law, in 
order to award port concessions to the private sector. An international call for tenders to operate 
the port of La  Unión closed at the end of May  2015 without any bidders and was declared void.144 
4.110.   Salvadoran legislation does not impose any restrictions on foreign vessels providing 
domestic cabotage services. Neither are there any restrictions on foreign companies with r espect 
to the operation of ports under concessions or the provision of ancillary port services such as cargo 
handling and warehousing. The service providers must obtain the appropriate accreditation from 
the Maritime Port Authority and related bodies. On t he other hand, pilotage and towing services 
remain in the hands of the State.  
4.111.   The LGMP requires vessels to be registered, together with transactions such as 
construction, transfers of ownership, leasing, liens and mortgage preferences on ships, if they tak e 
place in El Salvador. The Salvadoran Maritime Register (REMS), part of the AMP, is responsible for 
overseeing compliance with the registration requirement. For a vessel to be registered in the REMS 
its owner, if a natural person, must be domiciled in the  country or, in the case of a company, must 
have been established in accordance with the laws of El Salvador or, if established abroad, have a 
branch in El Salvador. The registration requirements are set out in detail in the LGMP.145 
4.112.   El Salvador does not have any cargo sharing agreements with other countries , nor is it a 
party to the United Nations Convention on a Code of Conduct for Liner Conferences. As a member 
of the Central American Integration System (SICA), El Salvador participates in the Central 
Ameri can Commission on Maritime Transport (COCATRAM), a specialized technical body that 
promotes the harmonization of maritime transport protocols in the region. Its objective is to 
contribute to the development and efficiency of the sector and to further compe titiveness and the 
integration of the member countries in global maritime trade.146 
4.113.   El Salvador is a member of the International Maritime Organization and a signatory to 
various international treaties it administers. The country has not yet ratified the Inte rnational 
Convention for the Safety of Life at Sea (SOLAS Convention), which is still in the stage of study 
and inter -institutional consultation prior to being sent to the Legislative Assembly.  
                                                
139 Legislative Decree No.  455 of 21  October  1965.  
140 Charges are governed by the LGMP and the Special Regulations for the application of port service 
charges.  
141 The complete set of regulations relating to charges is available on the website of the port of Acajutla. 
Viewed at: http://www.puertoacajutla.gob.sv/contenido.php?cont=74&id=114 . 
142 Online information on the charges at Puerto Quetzal (Guatemala), viewed at: http://www.puerto -
quetzal.com/web/guest/tarifa ; Puerto Corinto (Nicaragua), viewed at: http://www.epn.com.ni ; and Puerto 
Caldera (Costa Rica), viewed at: http://www.spcaldera.com/tarifas . 
143 The Export and Investment P romotion Agency of El Salvador (PROESA) includes port logistics among 
the sectors in which it seeks to attract foreign investment. Online information from PROESA, viewed at: 
http://www.proesa.gob.sv/inversiones/oportunidades -sectoriales . 
144 The tender documents had been purchased by four private entities from France, Spain, Chile and 
Philippines.  
145 Articles 40 to 45 of the General Maritime Port Law.  
146 The members are Costa Rica, El  Salvador, Guatemala, Honduras, Nicaragua and Panama.  WT/TPR/S/344 • El Salvador  
 
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  4.4.4.3   Air transport  
4.114.   In 2015, in value terms, 8.3 % of El Salvador's i mports and 6.3 % of its exports were 
transported by air.147 
4.115.   El Salvador has two airports: the Monseñor Óscar Arnulfo Romero y Galdámez  
International Airport in San Salvador, through which almost all the country's international traffic 
passes and which is the only one to provide freight transport services, and Ilopango Airport. 
In 2015, Monseñor Romero International Airport moved 2.7  million passengers and transported 
26,600 tonnes of freight (13,621 tonnes in imports and 12,979 tonnes in exports). As for 
Ilopango Airport, it moved 12,385 passengers, traveling mainly on low -cost flights to Honduras 
and Guatemala.148 
4.116.   Both airports are administered and operated by the State through CEPA, which is the 
entity responsible for airport upkeep, construction and maintenanc e, although it is authorized to 
contract these services out to private companies, along with other ancillary services (aircraft 
ground support, airport support, flight information, etc.). Monseñor Romero International Airport 
receives an average of 72 flig hts per day and due to the rapid increase in passenger traffic is 
operating at above capacity. The authorities have plans to expand and modernize the airport in 
four phases (from  2016 to 2032) with a view to achieving a capacity of 4.6  million passengers. The 
project will be managed and financed by CEPA. Monseñor Romero International Airport is the only 
airport in Central America to offer aircraft repair services.  
4.117.   The main legal instrument regulating the subsector is the Civil Aviation Organization 
Law149, which governs everything to do with public and private air transport services, ancillary 
services, and the granting of licences. In 2013, the Law was amended in order to introduce an 
open skies policy (see below).150 The Law is supplemented with technical regu lations issued by the 
Civil Aviation Authority (AAC).  
4.118.   The AAC is responsible for formulating and monitoring air transport policy, in both its 
technical and its economic -regulation aspects. Its functions include authorizing operators' 
certificates, granting  operating permits, regulating air transit and air navigation, and maintaining 
competition in the air transport market.  
4.119.   Under the Civil Aviation Organization Law (Article 22), fares and freight charges in 
passenger, freight and mail civil aviation traffic (domestic and international) are determined freely 
by the air transport operators, in accordance with market conditions. Air transport operators must 
register their tariffs with the AAC; the tariff schedules must indicate the period of validity, any 
restri ctions and the terms offered. For reasons of national interest or public necessity, the AAC 
may provisionally fix minimum and maximum tariffs, including the establishment of appropriate 
adjustment mechanisms, for domestic and international air transport. I n order to do so, the AAC 
must consult the Supervisory Authority for Competition, which, after assessing the market 
conditions, issues a binding opinion authorizing or rejecting the use of the price range.  
4.120.   The AAC is also empowered to regulate the establis hment of the charges and fees for 
airport services where competition does not exist.151 In these circumstances, the AAC may fix 
maximum charges for the service in question. CEPA must submit the airport services tariff 
schedule to the AAC for approval and, on ce approved, the schedule must be registered and 
published before entering into force; changes in tariffs must also be approved by the AAC. 
                                                
147 Information provided by the Salvadoran authorities.  
148 Information provided by CEPA. See also CEPA (2014c).  
149 Legislative Decree No.  582 of 19  October  2001 and amendments thereto (Legislative Decree No . 528 
of 26 November  2004 and Legislative Decree No.  927 of 20  December  2005).  
150 Another reform consisted in adding two new directors to the Civil Aviation Executive Board, the AAC's 
highest authority. The new directors must come from the non -governmental sector and be appointed by the 
President of the Republic. Legislative Decree No.  98 of 18  August  2012.  
151 Article 21 of the Civil Aviation Organization Law. The services that may be subject to economic 
regulation are: landing, aircraft parking, boarding cha rge, import freight charge, installation of fuel supply 
facilities, and passenger embarkation.  WT/TPR/S/344 • El Salvador  
- 110 - 
  San Salvador International Airport's current tariff schedule has been in force since 
December  2010.152 
4.121.   Salvadoran legi slation does not impose any limitations on foreign investment for 
establishing airlines in El Salvador (commercial presence). Likewise, it grants national treatment to 
foreign investor s in respect of investment in Salvadoran airlines.153 Air cabotage is rese rved 
exclusively for Salvadoran companies, unless otherwise stipulated in an international treaty 
establishing real and effective reciprocity with El Salvador.  
4.122.   Within the context of the GATS, El Salvador bound aircraft repair and maintenance services 
with respect to market access and national treatment for the cross -border supply, consumption 
abroad and commercial presence modes. According to its Schedule of Specific Commitments, any 
party interested in establishing a commercial presence for providing aircr aft repair and 
maintenance services in El Salvador must be domiciled in the country and must apply for a 
concession or licence.154 The AAC is the agency responsible for issuing the authorization in the 
form of an operating certificate.155 
4.123.   Until recently, the c ompany Transportes Aéreos Centroamericanos (TACA) International 
Airlines S.A. was El Salvador's national airline. In 2012, at the end of a process that lasted 
three  years, TACA merged with its Colombian peer Avianca S.A. to create the conglomerate 
Avianca Holdings S.A. In 2013, TACA became Avianca El Salvador, a subsidiary of the 
conglomerate, and is currently the dominant Salvadoran international flight operator: in  2014 it 
transported almost 70 % of the passengers transiting through Monseñor Romero Interna tional 
Airport. In September  2014, the company VECA Airlines obtained authorization to operate, 
becoming the second domestic operator to offer international flights. About ten international 
airlines operate flights from and to El  Salvador, including compan ies such as American Airlines, 
Delta and Iberia, among others.  
4.124.   In accordance with a revision of the Civil Aviation Organization Law made in 2013, the 
Salvadoran State will practice an "open skies" policy subject to the strict application of the 
principle o f real and effective reciprocity.156 El Salvador has ten bilateral air transport agreements, 
in particular with Latin American countries; six of these agreements were signed during the review 
period (Table 4.6). Together with Guatemala, Honduras and Nicaragu a, El Salvador forms part of 
the Cooperation Agreement for the Facilitation and Development of Air Operations, which 
establishes third, fourth and fifth freedom rights between the territories of the parties.  
4.125.   The Salvadoran authorities have pointed out that  it is not indispensable to have a bilateral 
agreement to provide air transport services in El Salvador.  
4.126.   Licences for landing slots are granted on the basis of the reciprocity principle in accordance 
with the Chicago Convention on International Civil Aviat ion. 
Table 4.6 Bilateral air services agreements  
Other party  Year Between territories 
of the parties  
3rd and 4th freedoms  Between territory of the other 
party and third countries 5th and 
6th freedoms  From terr itory of the 
other party to third 
countries  
7th freedom  
Chile  2013 Open skies  Open skies  Open skies (freight)  
Colombia  2011 Open skies  Open skies  No right  
Cuba  2013 7 weekly flights  No right  No right  
                                                
152 The list of charges for the use of runways, fuel supply, vehicle parking, passenger boarding and the 
use of other airport facilities is available at: http://aeropuertoelsalvador.gob.sv/docs/TarifasVigentesAIES.pdf . 
153 Article 5 of the Investment Law, Legislative Decree No.  732 of 14  October  1999.  
154 WTO document GATS/SC/29 of 15  April 1994. 
155 Article 3 of the Civil Aviation Organization Law.  
156 Article 89, final subparagraph, of the Civil Aviation Organization Law, as revised by Legislative 
Decree 509 of 10  October  2013: "The State shall implement the open skies policy in accordance with the 
provisions of Article 3 of the Law, for which purpose there shall be granted first, second. third, fourth and fifth 
freedoms of the air and combinations thereof, on the basis of the principle of real and effective reciprocity and 
the provisions of the international conventions and treaties concluded by El Salvador with other States".  WT/TPR/S/344 • El Salvador  
 
- 111 - 
 
  Other party  Year Between territories 
of the parties  
3rd and 4th freedoms  Between territory of the other 
party and third countries 5th and 
6th freedoms  From terr itory of the 
other party to third 
countries  
7th freedom  
Ecuador  2013 Open skies  5th freedom for the combine d 
scheduled transport of passengers, 
freight and mail, as well as for 
freight alone. Up to 28 weekly 
flights. No limits on flights for 
exclusively freight services  No right  
Spain  1997 Minimum of 7 weekly 
flights (freight 
unlimited)  5th freedom to be dete rmined by 
agreement between the two aviation 
authorities  No right  
United States  1997 Open skies  Open skies  Open skies (freight)  
Guatemala  2007 Open skies  Open skies  Open skies  
Honduras  2007 Open skies  Open skies  Open skies  
Mexico  2006 14 weekly f lights  No right  No right  
Nicaragua  2007 Open skies  Open skies  Open skies  
Chinese Taipei  2014 Open skies  5th freedom  No right  
Turkey  2013 Open skies  5th freedom to be determined by 
agreement between the two aviation 
authorities  Open skies  
United K ingdom  2000 Open skies  5th freedom to be determined by 
agreement between the two aviation 
authorities  No right  
Source:  WTO Secretariat, on the basis of information from the AAC, viewed at: 
http://www.aac.gob.sv/index.php/temas/acuerdos/acuerdos.html , and information provided by the 
authorities.  
4.4.4.4   Land transport  
4.127.   Land transport is the means of transporting freight most commonly used in El Salvador. 
In 2015, some 38.4 % of the total value of El Salvador's imports and 45.5 % of the value of its 
exports were transported by land.  
4.128.   El Salvador has a road network 9,297 km long, some 62.7 % of which is paved. More than 
1,900 small and medium -sized enterprises operate in the sector, with an ave rage of 4.3 vehicles 
per operator.157 
4.129.   The subsector is regulated and supervised by the Vice -Ministry of Transport. The legislative 
framework is contained in the Law on freight transport by road158, enacted in 2013, which replaced 
the Regulations on the transpo rt of freight by land of 2003.  
4.130.   El Salvador participates in the  Mesoamerican Procedure for the International Transit of 
Goods  (TIM), the main  objective of which is significantly to reduce the costs associated with goods 
traffic by modernizing, simplifying a nd harmonizing customs procedures.159 The country has 
three  connection points (La Libertad, San Luis and La Unión) that form part of the Mesoamerican 
Integration Corridor or Pacific Corridor . This corridor unites some seven countries over a distance 
of 3,200  km, between Panama City (Panama) and the city of Puebla (Mexico). The project is 
intended to create a high -speed channel for the flow of goods traffic by land, with harmonized 
procedures and high standards of efficiency and security, in order to make intr a-regional trade 
flow more smoothly. The Pacific Corridor is now handling more than 90 % of the region's trade in 
goods transported by land and receives technical and financial support from the Inter -American 
Development Bank. At present, El Salvador is usi ng the TIM only for recording information relating 
to goods in international transit, but it is in process of adapting the IT systems of the 
Directorate -General of Migration and Alien Affairs  in order to be able to use the TIM's migration 
module.160 This is expected to happen by mid-2016, with a view to simplifying and speeding up the 
migration procedures for the truck drivers.  
                                                
157 Inter-American Development Bank (2015).  
158 Decree No.  367 of 3  May 2013.  
159 The following participate in the TIM: Costa Rica, El Salvador, Guatemala, Honduras, Mexico, 
Nicaragua and Panama.  
160 The TIM has three modules: information concerning goods, migration information and quarantine 
information.  WT/TPR/S/344 • El Salvador  
- 112 - 
  4.131.   Major road infrastructure works were carried out during the review period. Between 2007 
and 2012, under the sponsorship of the FOMILE NIO I project, El Salvador invested more than 
US$269  million in the construction of the Longitudinal Northern Highway, a road artery that 
connects up all of the country's northern zone from the border with Guatemala (north -west) to 
Honduras (north -east).161 The project involves the construction of 220 km of paved highway and 
the building and reconditioning of 23 bridges. The new infrastructure has reduced the journey 
times between the two points from 12 to 6 hours. Since 2015, in a second stage of the project  
called FOMILENIO II, infrastructure works have been being carried out to relieve the road traffic at 
critical junctions. The works on the logistical corridors linking the customs office of El Amatillo 
(border with Honduras), the ports of La Unión and Acaj utla, and San Salvador International Airport 
should make it possible to improve connectivity, reduce transport costs and increase the 
productivity of overland trade in the area.162 
4.132.   In September  2015, the governments of El Salvador and Mexico signed a coopera tion 
agreement for the development of road infrastructure. The agreement consisted of a loan for 
financing the widening of two sections of highway at Puerto de La Libertad, one of the country's 
main tourist attractions, and the construction of two frontier  bridges (Anguiatú and Hachadura) on 
the border with Guatemala.163 
4.4.5   Tourism  
4.133.   Tourism is a sector of increasing importance for the Salvadoran economy and its share of 
GDP grew from 2.5 % in 2009 to 4.4 % in 2014.164 The income generated by tourism increased 
from US $516.6  million in 2009 to US$1,169.5  million in 2015, accounting for 17.4 % of the total 
value of El Salvador's exports of goods and services in the latter year.165 The sector provides 
formal employment for more than 48,000 people.166 
4.134.   In 2015, El Salvador recei ved 1.9  million international visitors, an increase of 33 % relative 
to 2009. Amongst the regions from which these visitors come, Central America is the largest 
market with 57.9 % of international arrivals, followed by North America (mainly the United States ) 
with 35.9 %, Europe 2.1 % and other regions 4.2 %. Out of the international arrivals, 
13.4% correspond to Salvadorans residing abroad. In terms of the means of transport used, 
57% of tourists arrive by land and 43 % by air (2015). In 2015, average hotel occu pancy was 
almost 60 %, the average stay was 6.8 nights, and the average amount spent per person per day 
was US$112.9.167 
4.135.   The Ministry of Tourism (MITUR), created in 2004, is the government authority in charge 
of formulating and implementing sectoral policy. T he institutional framework is completed by the 
Salvadoran Tourism Corporation  (CORSATUR), an autonomous institution responsible for listing 
and certifying tourism enterprises, and the Salvadoran Tourism Institute (ISTU), which administers 
the national park s and publicly owned tourist parks.  
4.136.   The sector is mainly governed by the Law on tourism (LTUR)168 and its implementing 
Regulations  (2012)169, together with the regulations issued by the MITUR . The Law on tourism 
defines the powers of the MITUR, establishes spe cific taxes to support the sector and creates a 
National Tourism Register. El Salvador's National Tourism Policy, published in 2013, contains the 
                                                
161 FOMILENIO I is a US$460  million cooperation project between the United States' Millennium 
Challenge Corporation (MCC) and the G overnment of El Salvador, implemented between 2007 and 2012. 
Online information from the MCC. Viewed at: https://www.mcc.gov/where -we-work/program/el -salvador -
compact . 
162 Online in formation from the FOMILENIO II project. Viewed at: 
https://assets.mcc.gov/agreements/compact -el-salvador -investment.pdf . 
163 The financing amounts to some US$144  million, of  which around 47% corresponds to a grant from 
Mexico. Online information from the Government of El Salvador. Viewed at: http://www.presidencia.gob.sv/el -
salvador -y-mexico -firman -convenio -para-desarrollo -de-infraestructura -vial-estrategica -con-fondos -yucatan -
bcie. 
164 Ministry of Tourism (MITUR) (2015a).  
165 WTO Secretariat calculations with information pr ovided by the MITUR.  
166 MITUR (2015b).  
167 The data in this paragraph come from the MITUR (2016).  
168 Legislative Decree No.  899 of 17  December  2005.  
169 General Regulations implementing the Law on tourism, Executive Decree No.  108 of 14  June 2012.  WT/TPR/S/344 • El Salvador  
 
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  strategic guidelines for the sector, which include cross -cutting governance, knowledge 
management and transpar ency, entrepreneurship, diversification and sustainability of tourist 
destinations, and competitive positioning.  
4.137.   The Government plans to give priority to tourism as a driver of development and to 
improve its capacity to generate foreign investment. During the review period, the MITUR 
implemented the Five -Year Plan 2009 -2014 for the development of tourism, which is focused on 
creating a new strategic axis of integration and development at national and municipal level, 
known as Pueblos Vivos  (Lively Villages) .170 The results of implementing the Five -Year Plan include 
the creation of new tourist destinations, products and services (for example, medical tourism, the 
El Salvador underwater archaeology corridor, Gulf island tours, the adventure tour called the Lenca  
Adventure Circuit, the Coffee Road, etc.), the incorporation of 235 municipalities with tourism 
potential in the Pueblos Vivos  initiative, visits from cruise ships (Hapag -Lloyd Cruises and German 
Atlantic Line, among others) and an increase in employment.  
4.138.   In 2014, MITUR published the Five -Year Plan for Tourism 2014 -2019 ( El Salvador. 
Un Destino Encantador  (El Salvador.  An Enchanting Destination) ).171 The Plan is intended to 
strengthen El Salvador's position as a tourist destination at national and internatio nal levels by 
emphasizing its culture and local traditions and making tourism a driver of sustainable and socially 
inclusive economic development that helps to create jobs and reduce poverty.  
4.139.   The new Plan contains strategies, programmes and concrete propos als, such as the 
creation of a new brand -destination that represents the identity of El Salvador; the PROASISTUR 
programme to improve assistance for tourists and their safety; the open -skies programme, which 
seeks to encourage the arrival of new airlines i n the country; the systematization of the 
Pueblos  Vivos  programme and the creation of a more advanced version called Pueblos 
Encantadores  (Charming Villages) ; the Un pueblo, un producto  (One people, one product ) initiative 
aimed at creating and promoting o riginating products of interest to tourists; the Vive tu País  
(Discover your Country) programme targeted at Salvadorans living abroad; the INVERTURES 
programme for promoting the development of investment projects and job creation; and the 
FORMATURES progra mme, which sets out a training plan for the business sector, aimed mainly 
at MSMEs.  
4.140.   With a view to financing the development and promotion of the sector, the LTUR 
(Article  16) establishes a hotel stay tax equivalent to 5 % of the price for each night's 
accommodation172, as well as an embarkation tax of US$7 on departing international flights.  
4.141.   The LTUR introduced an incentives regime for investment in the tourism sector, based on 
tax exemptions. For any investment project in excess of US$25,000  deemed to be of national 
touristic interest ,173 the Law offers the tax concessions indicated in Box 4.2.  
Box 4.2 Tax concessions for investment in the tourism sector  
(i) Exemption from the tax on the transfer of real estate on th e purchase of an immovable property or 
 properties for the purposes of the project.  
(ii) Exemption from the payment of import tariffs on any technical equipment, machinery, vehicle or building 
 material imported for the purposes of the project (the amount  exempted may not exceed the total capital 
 invested).  
(iii) Exemption from payment of income tax for ten years from the date of commencement of operations.  
(iv) Partial (50%) exemption from municipal taxes as from the date of commencement of operations.  
Source:  Article 36 of the Law on tourism (Legislative Decree No.  899 of 17  December  2005).  
4.142.   The incentives regime was introduced in 2005, originally for a term of five years, but has 
been successively extended. In 2015, an amendment extending the tax exe mptions to 
December  2020 was approved.174 To be eligible for the tax incentives it is necessary to enrol in the 
                                                
170 MITUR (2009) . 
171 The Tourism Plan is based on the Five -Year Development Plan 2014 -2019.  
172 The tax is calculated on the basis of the net value of the service, excluding value added tax.  
173 The conditions for a project to be deemed to be of national touristic interest are  set out in detail in 
Articles 55 to 60 of the General Regulations implementing the Law on tourism.  
174 Legislative Decree No.  88 of 13  August  2015.  WT/TPR/S/344 • El Salvador  
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  National Tourism Register. Enrolment also allows businesses to prove their status as operators in 
the sector and obtain quality certificates.  
4.143.   Under the GATS, El Salvador made  specific commitments for tourism services, including 
hotels and restaurants; travel agencies and tour operators services; and tourist guide s services.175 
In the hotels and restaurants subsector there are no limitations on market access or national 
treatment in the consumption abroad and commercial presence modes. In the travel agencies and 
tour operators services subsector there are no limitations on market access or national treatment 
in the commercial presence mode. For tourism services as a whole, the presence of natural 
persons mode is bound only insofar as mentioned in the horizontal commitments, with respect to 
both national treatment and market access.176 
4.144.   In 2014, MITUR introduced the Stop Over programme, which extends the aut horized stay 
for passengers in transit from 8 to 48 hours. The initiative makes it possible for tourists to prolong 
their stopover period and change their plane ticket s (with Avianca) without additional cost and 
enter the country exempt from the payment of  airport taxes.177 The MITUR has created 
tourist  products suitable for this project and hopes to take advantage of the passage of the 
700,000 passengers in transit arriving each year to promote the country as a holiday destination. 
Since its implementation i n February  2015, around 1,400 passengers have benefited from this 
programme.  
4.145.   In 2014, the Inter -American Development Bank approved a US$25  million loan to boost 
tourism development in El Salvador. The funds are being invested in the construction of tourism  
infrastructure in the coastal -marine strip, including port repairs, construction of wharves, 
promenades and bicycle paths, and the creation of a biodiversity museum.178 
 
 
                                                
175 WTO document GATS/SC/29 of 15  April 1994.  
176 In El Salvador's horizontal commitments, under mode 4, it is st ated that every employer must 
employ Salvadoran nationals in a proportion of at least 90% of the enterprise's personnel. In special 
circumstances the employment of more foreigners may be authorized, but employers remain obliged to train 
Salvadoran personne l. The amount of wages earned by Salvadorans may not be less than 85% of the total 
wages paid. This requirement applies equally to domestic and foreign enterprises.  
177 The programme has been implemented in collaboration with the airline Avianca, but is open  to other 
airlines. Online information from Stop Over El Salvador. Viewed at: http://elsalvadorstopover.com . 
178 Programme for Touristic Development of the Coastal -Marine Strip. Viewed at: 
http://www.iadb.org/es/proyectos/project -information -page,1303.html?id=ES -L1066 . WT/TPR/S/344 • El S alvador  
- 115 - 
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5  APPENDIX TABLES  
Table A1. 1 Non-maquila merchandise exports by HS section, 2009 -2015  
(US$ million and  %) 
Description   2009   2010   2011   2012   2013   2014  2015  
 (US$ million)  
Non-maquila exports  2,921 3,471  4,240  4,233  4,333  4,249  4,381  
Maquila exports  945 1,029  1,069  1,106  1,158  1,024  1,112  
Total exports  3,866  4,499  5,308  5,339  5,491  5,273  5,493  
 (% of non -maquila exports)  
1 - Live animals; animal products  1.6 1.3 1.1 1.0 1.2 1.3 1.3 
2 - Vegetable products  10.2 8.2 13.7 9.9 8.1 4.8 6.0 
 09 - Coffee, tea, maté and spices  7.9 6.2 11.0 7.1 5.4 2.6 3.4 
 11 - Products of the milling industry; malt; starches; inulin; wheat gluten  1.3 1.1 1.5 1.6 1.3 1.0 1.0 
 10 - Cereals  0.2 0.1 0.1 0.2 0.3 0.2 0.6 
 06 - Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage  0.2 0.4 0.4 0.5 0.5 0.5 0.5 
3 - Animal or vegetable fats and oils  0.6 0.6 0.5 0.4 0.4 0.5 0.5 
4 - Prepared foodstuffs; beverages, spirits and vinegar; t obacco and manufactured tobacco substitutes  18.6 17.9 15.7 17.8 18.5 17.7 17.4 
 17 - Sugars and sugar confectionery  4.5 6.0 5.1 6.1 6.4 5.9 5.9 
 19 - Preparations of cereals, flour, starch or milk; pastrycooks' products  3.9 3.7 3.3 3.4 3.2 3.3 3.1 
 22 - Beverages, spirits and vinegar  4.2 2.9 2.5 2.6 2.5 2.3 2.8 
 16 - Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates  2.8 2.2 1.9 2.6 2.8 2.5 2.0 
 20 - Preparations of vegetables, fruit, nuts or other parts of plants  1.6 1.8 1.7 1.9 2.1 1.9 1.8 
 21 - Miscellaneous edible preparations  1.2 0.9 0.8 0.9 1.0 1.1 1.2 
5 - Mineral products  4.0 4.2 4.4 4.6 3.2 3.5 2.7 
6 - Products of the chemical or allied industries  7.2 6.4 5.7 5.8 5.8 6.2 6.4 
7 - Plastics and articles the reof 6.6 6.9 6.5 7.2 7.3 7.7 7.8 
 39 - Plastics and articles thereof  6.6 6.9 6.5 7.1 7.3 7.7 7.7 
8 - Raw hides and skins, leather, furskins and articles thereof; saddlery and harness  0.4 0.3 0.2 0.3 0.1 0.1 0.1 
9 - Wood and articles of wood; wood charco al 0.2 0.2 0.2 0.2 0.2 0.2 0.1 
10 - Pulp of wood or of other fibrous cellulosic material; paper and paperboard and articles thereof  7.8 6.7 6.7 6.8 6.8 6.8 6.7 
11 - Textiles and textile articles  28.2 32.2 30.4 31.9 34.2 37.2 37.4 
 61 - Articles of appar el and clothing accessories, knitted or crocheted  18.9 21.5 20.0 21.7 22.9 25.4 24.8 
 62 - Articles of apparel and clothing accessories, not knitted or crocheted  3.3 3.8 3.7 3.9 4.3 4.6 4.6 
 60 - Knitted or crocheted fabrics  1.1 1.3 1.3 1.4 1.6 1.8 2.6 
 63 - Other made up textile articles; sets; worn clothing and worn textile articles; rags  1.6 1.4 1.3 1.2 1.6 1.3 1.4 
 54 - Man-made filaments  0.5 0.7 0.7 0.9 1.0 1.2 1.2 
 52 - Cotton  1.0 1.3 1.5 1.1 1.1 1.2 1.1 
 55 - Man-made staple fibres  0.8 0.9 1.0 0.9 0.9 0.9 1.0 
12 - Footwear, headgear, umbrellas, sun umbrellas, walking -sticks, seat -sticks, whips, riding -crops and parts 
thereof; prepared feathers and articles made therewith  1.1 1.1 1.0 1.1 1.1 1.3 1.2 
13 - Articles of stone, plaster, cement, asbe stos, mica or similar materials; ceramic products; glass and 
glassware  0.7 0.7 0.7 0.8 1.0 1.0 1.0   
  WT/TPR/S/344 • El Salvador  
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Description   2009   2010   2011   2012   2013   2014  2015  
14 - Natural or cultured pearls, precious or semi -precious stones, precious metals  2.1 2.7 2.4 1.4 0.8 0.6 0.3 
15 - Base metals and articles of base metal  6.2 6.5 7.0 6.7 6.7 6.0 6.0 
 72 - Iron and steel  3.4 3.7 4.2 3.9 3.8 2.8 2.8 
 76 - Aluminium and articles thereof  1.4 1.5 1.5 1.5 1.4 1.6 1.5 
 73 - Articles of iron or steel  0.8 0.8 0.7 0.8 1.0 1.0 1.1 
16 - Machinery and mechanical appliances; electric al equipment; parts thereof  2.2 2.2 1.9 2.0 2.4 3.0 2.7 
17 - Vehicles, aircraft, vessels and associated transport equipment  0.2 0.2 0.2 0.3 0.2 0.2 0.2 
18 - Optical, photographic, cinematographic, measuring, checking and precision instruments and apparat us 0.1 0.1 0.1 0.1 0.1 0.1 0.1 
19 - Arms and ammunition; parts and accessories thereof  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
20 - Miscellaneous manufactured articles  2.0 1.8 1.7 1.7 1.7 1.9 2.0 
 94 - Furniture; bedding, mattresses, mattress supports, cushions and  similar stuffed furnishings; lamps  
and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name -plates  
and the like; prefabricated buildings  1.2 0.9 0.9 1.0 1.0 1.1 1.2 
 96 - Miscellaneous manufactured articles  0.6 0.6 0.6 0.6 0.5 0.5 0.5 
21 - Works of art, collectors' pieces and antiques  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Other  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Source:  WTO Secretariat estimates, based on data from the Central Reserve Bank of El  Salvador.    
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Table A1. 2 Maquila merchandise exports by HS section, 2009 -2015  
(US$ million and  %) 
Description   2009   2010   2011   2012   2013   2014  2015  
 (US$ million)  
Maquila exports  945 1,029  1,069  1,106  1,158  1,024  1,112  
 (% of maquila exports)  
4 - Prepared fo odstuffs; beverages, spirits and vinegar; tobacco and manufactured tobacco substitutes  5.1 0.0 3.1 6.2 4.0 0.4 0.0 
 22 - Beverages, spirits and vinegar  5.1 0.0 3.1 6.2 4.0 0.4 0.0 
5 - Mineral products  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
6 - Products of the chem ical or allied industries  0.0 0.0 0.0 0.0 0.2 0.1 0.1 
7 - Plastics and articles thereof  0.1 0.2 0.2 0.3 0.3 0.4 0.4 
 39 - Plastics and articles thereof  0.1 0.2 0.2 0.3 0.3 0.3 0.4 
 40 - Rubber and articles thereof  0.0 0.0 0.0 0.0 0.0 0.1 0.0 
8 - Raw hi des and skins, leather, furskins and articles thereof; saddlery and harness  0.0 0.0 0.0 0.1 0.6 0.6 0.4 
 42 - Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of  
animal gut (other than silk -worm gut)  0.0 0.0 0.0 0.1 0.6 0.6 0.4 
9 - Wood and articles of wood; wood charcoal  0.0 0.0 0.0 0.0 0.1 0.1 0.1 
10 - Pulp of wood or of other fibrous cellulosic material; paper and paperboard and articles thereof  0.1 0.1 0.1 0.1 0.3 0.4 0.7 
 48 - Paper and paperboard; articles of paper pulp, of paper or of paperboard  0.1 0.1 0.1 0.1 0.3 0.4 0.7 
11 - Textiles and textile articles  79.6 80.5 78.2 76.5 78.7 80.2 82.5 
 61 - Articles of apparel and clothing accessories, knitted or crocheted  67.9 71.6 68.5 66.0 67.9 69.1 72.4 
 62 - Articles of apparel and clothing accessories, not knitted or crocheted  10.0 8.0 8.5 8.7 8.6 9.0 8.0 
 60 - Knitted or crocheted fabrics  0.7 0.4 0.3 0.2 0.5 0.5 0.7 
 58 - Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery  0.1 0.1 0.2 0.8 1.0 0.8 0.6 
12 - Footwear, headgear, umbrellas, sun umbrellas, walking -sticks, seat -sticks, whips, riding -crops and parts thereof; 
prepared feathers and articles made therewith  0.1 0.1 0.1 0.1 0.2 0.4 0.7 
 64 - Footwear, gaiter s and the like; parts of such articles  0.0 0.0 0.0 0.0 0.2 0.3 0.6 
13 - Articles of stone, plaster, cement, asbestos, mica or similar materials; ceramic products; glass and glassware  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
14 - Natural or cultured pearls, precious o r semi -precious stones, precious metals  0.1 0.1 0.0 0.1 0.1 0.1 0.1 
15 - Base metals and articles of base metal  0.2 0.4 0.4 0.4 0.5 0.4 0.4 
 79 - Zinc and articles thereof  0.0 0.0 0.0 0.0 0.1 0.1 0.1 
 72 - Iron and steel  0.1 0.1 0.1 0.2 0.2 0.2 0.1 
 83 - Miscellaneous articles of base metal  0.0 0.1 0.1 0.1 0.1 0.1 0.1 
16 - Machinery and mechanical appliances; electrical equipment; parts thereof  14.4 18.5 17.8 16.1 14.8 16.7 14.3 
 85 - Electrical machinery and equipment and parts thereof; sound recorde rs and reproducers, television  
image and sound recorders and reproducers, and parts and accessories of such articles  14.4 18.5 17.8 16.1 14.8 16.7 14.3 
17 - Vehicles, aircraft, vessels and associated transport equipment  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
18 - Optical, photographic, cinematographic, measuring, checking and precision instruments and apparatus  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
20 - Miscellaneous manufactured articles  0.3 0.1 0.0 0.1 0.3 0.3 0.3 
Source:  WTO Secretariat estimates, based on data from the Central Reserve Bank of El  Salvador.    
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Table A1. 3 Non-maquila merchandise imports by HS section, 2009 -2015  
(US$ million and  %) 
  2009   2010   2011   2012   2013   2014  2015  
 (US$ million)  
Non-maquila imports  6,721  7,803  9,328  9,541 10,020  9,835  9,741  
Maquila imports  605 614 637 717 752 678 675 
Total imports  7,325  8,416  9,965  10,258  10,772  10,513  10,415  
 (% of non -maquila imports)  
1 - Live animals; animal products  4.2 3.4 2.8 3.1 3.3 3.3 3.5 
2 - Vegetable products  6.0 5.0 5.9 5.1 4.0 4.3 4.7 
 10 - Cereals  3.3 2.7 3.6 3.0 2.3 2.4 2.5 
 08 - Edible fruit and nuts; peel of citrus fruit or melons  0.9 0.8 0.6 0.7 0.6 0.7 0.8 
 07 - Edible vegetables and certain roots and tubers  1.3 1.0 1.1 0.8 0.6 0.6 0.8 
 11 - Products of the mill ing industry; malt; starches; inulin; wheat gluten  0.2 0.2 0.3 0.3 0.3 0.3 0.4 
3 - Animal or vegetable fats and oils  1.9 2.0 2.2 2.0 1.7 1.7 1.5 
4 - Prepared foodstuffs; beverages, spirits and vinegar; tobacco and manufactured tobacco substitutes  8.8 7.8 7.4 7.6 7.6 8.3 8.7 
 21 - Miscellaneous edible preparations  2.9 2.6 2.4 2.1 2.1 2.3 2.5 
 23 - Residues and waste from the food industries; prepared animal fodder  1.5 1.3 1.2 1.4 1.5 1.7 1.6 
 19 - Preparations of cereals, flour, starch or milk; pastryco oks' products  1.3 1.2 1.2 1.2 1.3 1.4 1.5 
 22 - Beverages, spirits and vinegar  1.2 0.9 0.9 1.0 1.0 1.1 1.1 
 20 - Preparations of vegetables, fruit, nuts or other parts of plants  0.7 0.6 0.6 0.7 0.7 0.7 0.8 
 16 - Preparations of meat, of fish or of crust aceans, molluscs or other aquatic invertebrates  0.6 0.5 0.4 0.5 0.5 0.6 0.6 
5 - Mineral products  16.9 18.0 19.0 20.7 20.5 18.9 15.0 
 27 - Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral 
waxes  16.6 17.6 18.6 20.4 20.2 18.6 14.7 
6 - Products of the chemical or allied industries  12.9 12.4 12.1 12.1 11.4 11.4 11.9 
 30 - Pharmaceutical products  4.3 4.2 4.0 3.6 3.0 3.1 3.5 
 33 - Essential oils and resinoids; perfumery, cosmetic or toilet preparations  1.7 1.7 1.6 1.7 1.7 1.7 1.7 
 38 - Miscellaneous chemical products  1.3 1.3 1.2 1.5 1.5 1.4 1.4 
 34 - Soap, organic surface -active agents, washing preparations, lubricating preparations, artificial 
waxes, prepared waxes, polishing or scouring preparations, candles an d similar articles, modelling 
pastes, "dental waxes"  1.4 1.3 1.2 1.2 1.3 1.2 1.2 
 32 - Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring 
matter; paints and varnishes; putty and other mastics; inks  0.8 0.9 0.9 0.9 1.0 1.2 1.2 
 29 - Organic chemicals  1.0 1.1 1.1 1.1 1.0 1.0 1.0 
7 - Plastics and articles thereof  6.1 6.9 7.1 7.0 7.0 7.2 7.0 
 39 - Plastics and articles thereof  5.2 6.0 6.1 5.9 6.0 6.2 6.0 
8 - Raw hides and skins, leather, furskins and articles ther eof; saddlery and harness  0.3 0.4 0.3 0.3 0.4 0.4 0.4 
9 - Wood and articles of wood; wood charcoal  0.4 0.4 0.4 0.4 0.4 0.4 0.4 
10 - Pulp of wood or of other fibrous cellulosic material; paper and paperboard and articles thereof  4.0 4.1 3.9 3.8 3.8 3.6 3.9 
11 - Textiles and textile articles  9.1 10.6 11.1 10.5 10.9 11.7 11.6 
 52 - Cotton  2.2 2.7 3.7 2.7 2.9 3.0 2.6 
 61 - Articles of apparel and clothing accessories, knitted or crocheted  1.4 1.7 1.7 1.7 1.6 1.6 1.9   
  WT/TPR/S/344 • El Salvador  
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  2009   2010   2011   2012   2013   2014  2015  
 54 - Man-made filaments  1.1 1.3 1.2 1.3 1.5 1.6 1.6 
 60 - Knitted or crocheted fabrics  1.3 1.6 1.2 1.3 1.3 1.4 1.6 
 55 - Man-made staple fibres  0.6 0.8 1.0 1.1 1.2 1.4 1.3 
 62 - Articles of apparel and clothing accessories, not knitted or crocheted  1.4 1.3 1.2 1.2 1.2 1.2 1.3 
12 - Footwear , headgear, umbrellas, sun umbrellas, walking -sticks, seat -sticks, whips, riding -crops and 
parts thereof; prepared feathers and articles made therewith  1.1 1.1 1.1 1.0 1.0 1.0 1.0 
13 - Articles of stone, plaster, cement, asbestos, mica or similar material s; ceramic products; glass and 
glassware  1.0 1.0 1.0 1.0 0.9 0.9 1.0 
14 - Natural or cultured pearls, precious or semi -precious stones, precious metals  0.1 0.1 0.1 0.1 0.1 0.1 0.1 
15 - Base metals and articles of base metal  5.3 6.1 6.3 6.0 6.1 5.8 6.1 
 72 - Iron and steel  2.1 2.9 3.1 3.0 3.1 2.8 2.8 
 73 - Articles of iron or steel  1.5 1.4 1.3 1.3 1.4 1.4 1.5 
 76 - Aluminium and articles thereof  0.8 0.9 0.9 0.8 0.8 0.8 0.9 
 83 - Miscellaneous articles of base metal  0.4 0.4 0.4 0.4 0.4 0.4 0.4 
16 - Machinery and mechanical appliances; electrical equipment; parts thereof  14.9 14.1 13.1 12.7 13.3 13.7 15.2 
 85 - Electrical machinery and equipment and parts thereof; sound recorders and reproducers, 
television image and sound recorders and reproducers, and  parts and accessories of such articles  7.4 7.1 6.2 6.3 6.5 7.0 7.7 
 84 - Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof  7.5 7.1 6.9 6.5 6.8 6.7 7.5 
17 - Vehicles, aircraft, vessels and associated transport equipment  3.6 3.1 3.3 3.6 4.1 4.0 4.4 
18 - Optical, photographic, cinematographic, measuring, checking and precision instruments and 
apparatus  1.2 1.1 1.1 1.1 1.4 1.1 1.4 
19 - Arms and ammunition; parts and accessories thereof  0.1 0.0 0.0 0.0 0.0 0.0 0.1 
20 - Miscellan eous manufactured articles  1.8 1.9 1.8 1.9 2.0 2.0 2.0 
21 - Works of art, collectors' pieces and antiques  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Other  0.2 0.2 0.1 0.1 0.1 0.1 0.2 
Source:  WTO Secretariat estimates, based on data from the Central Reserve Bank of El  Salvador.    
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Table A1. 4 Maquila merchandise imports by HS section, 2009 -2015  
(US$ million and  %) 
Description   2009   2010   2011   2012   2013   2014  2015  
 (US$ million)  
Maquila imports  605 614 637 717 752 678 675 
 (% of maquila i mports)  
1 - Live animals; animal products  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
2 - Vegetable products  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
3 - Animal or vegetable fats and oils  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
4 - Prepared foodstuffs; beverages, spirits and vinegar; tobacco and manufactured tobacco substitutes  6.0 0.2 5.4 10.8 4.6 0.4 0.1 
 16 - Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates  0.0 0.0 0.0 0.0 0.0 0.0 0.1 
 22 - Beverages, spirits and vinegar  6.0 0.2 5.4 10.8 4.6 0.4 0.0 
5 - Mineral products  0.1 0.1 0.1 0.4 0.3 0.1 0.1 
6 - Products of the chemical or allied industries  4.0 2.4 2.2 2.4 2.9 4.1 5.4 
 32 - Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring 
matter; paints and varnis hes; putty and other mastics; inks  0.4 0.5 0.7 1.0 1.4 1.9 2.7 
 38 - Miscellaneous chemical products  0.4 0.3 0.4 0.4 0.6 1.0 1.4 
 28 - Inorganic chemicals; organic or inorganic compounds of precious metals, of rare -earth metals, of  
radioactive elements o r of isotopes  0.5 0.8 0.7 0.7 0.5 0.7 0.6 
7 - Plastics and articles thereof  6.8 4.2 4.1 5.3 7.0 7.2 8.1 
 39 - Plastics and articles thereof  5.0 4.1 4.0 5.2 6.8 6.7 7.6 
 40 - Rubber and articles thereof  1.8 0.1 0.1 0.1 0.1 0.5 0.5 
8 - Raw hides and skin s, leather, furskins and articles thereof; saddlery and harness  0.0 0.0 0.0 0.1 0.1 0.0 0.1 
9 - Wood and articles of wood; wood charcoal  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
10 - Pulp of wood or of other fibrous cellulosic material; paper and paperboard and artic les thereof  2.5 2.1 1.7 2.3 3.4 3.3 3.7 
11 - Textiles and textile articles  65.3 70.5 69.4 65.9 68.7 70.4 69.1 
 60 - Knitted or crocheted fabrics  35.5 44.0 43.2 41.5 35.5 35.4 25.5 
 61 - Articles of apparel and clothing accessories, knitted or crocheted  11.0 8.3 6.3 6.4 13.6 15.6 19.3 
 52 - Cotton  6.5 7.0 6.4 5.8 5.4 4.8 7.2 
 54 - Man-made filaments  2.3 4.2 5.5 4.4 5.6 6.0 6.9 
 55 - Man-made staple fibres  4.0 3.8 4.5 3.7 3.0 3.1 4.7 
 58 - Special woven fabrics; tufted textile fabrics; lace; tapestries ; trimmings; embroidery  2.5 1.2 1.1 0.9 1.1 1.4 2.5 
 56 - Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof  0.5 0.7 1.0 1.0 1.1 1.3 1.2 
 59 - Impregnated, coated, covered or laminated textile fabrics; texti le articles of a kind suitable for  
industrial use  0.3 0.6 0.7 0.8 1.0 0.8 0.7 
 62 - Articles of apparel and clothing accessories, not knitted or crocheted  1.2 0.3 0.3 0.9 2.0 1.3 0.6 
12 - Footwear, headgear, umbrellas, sun umbrellas, walking -sticks, seat -sticks, whips, riding -crops and parts 
thereof; prepared feathers and articles made therewith  0.1 0.0 0.0 0.1 0.3 0.4 0.6 
13 - Articles of stone, plaster, cement, asbestos, mica or similar materials; ceramic products; glass and 
glassware  0.2 0.1 0.1 0.1 0.1 0.1 0.2 
14 - Natural or cultured pearls, precious or semi -precious stones, precious metals  1.0 1.8 1.2 0.5 0.5 0.4 0.7   
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Description   2009   2010   2011   2012   2013   2014  2015  
15 - Base metals and articles of base metal  5.8 9.7 8.9 7.3 7.7 8.8 7.5 
 81 - Other base metals; cermets; articles thereof  2.9 5.4 5.1 4.4 4.3 5.2 4.6 
 73 - Articles of iron or steel  1.8 2.6 2.7 1.9 2.4 2.2 1.8 
 72 - Iron and steel  0.7 1.0 0.7 0.5 0.6 1.0 0.7 
16 - Machinery and mechanical appliances; electrical equipment; parts thereof  6.5 8.2 6.2 4.2 3.7 3.8 3.6 
 85 - Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television  
image and sound recorders and reproducers, and parts and accessories of such articles  6.5 7.6 5.9 3.8 2.4 2.3 1.9 
 84 - Nuclear reactors, boilers, machinery and mechani cal appliances; parts thereof  0.1 0.6 0.3 0.4 1.4 1.5 1.6 
17 - Vehicles, aircraft, vessels and associated transport equipment  0.2 0.0 0.0 0.0 0.0 0.0 0.0 
18 - Optical, photographic, cinematographic, measuring, checking and precision instruments and appar atus 0.5 0.0 0.0 0.0 0.0 0.0 0.0 
19 - Arms and ammunition; parts and accessories thereof  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
20 - Miscellaneous manufactured articles  1.1 0.7 0.6 0.5 0.6 0.7 0.9 
21 - Works of art, collectors' pieces and antiques  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Source:  WTO Secretariat estimates, based on data from the Central Reserve Bank of El  Salvador.  
 WT/TPR/S/344 • El Salvador  
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  Table A1. 5 Total merchandise exports by trading partner, 2009 -2015a 
(US$ million and  %) 
Description  2009  2010  2011  2012 2013  2014b 2015b 
 (US$ million)  
Exports  3,866  4,499  5,308  5,339  5,491  5,273  5,485  
 (% of exports)  
America  91.8 93.3 91.0 93.4 92.3 93.8 93.8 
USA 46.6 48.4 46.1 46.6 45.8 46.5 47.0 
Other America  45.2 45.0 44.9 46.7 46.4 47.4 46.8 
Honduras  13.4 12.9 13.2 14.3 14.4 14.2 13.9 
Guatemala  14.0 14.0 13.9 13.4 13.1 13.4 13.5 
Nicaragua  5.5 5.4 5.6 6.0 5.9 6.4 6.6 
Costa Rica  3.5 3.6 4.0 4.3 4.2 4.6 4.5 
Panama  2.9 2.3 2.0 2.3 2.2 2.7 2.4 
Dominican Republic  1.7 1.9 1.3 1.5 1.4 1.6 1.6 
Mexico  1.5 1.7 1.6 1.6 1.5 1.2 1.2 
Canada  0.9 1.5 1.3 1.0 1.4 1.2 0.9 
Venezuela, Bolivarian Republic of  0.3 0.3 0.2 0.2 0.2 0.2 0.5 
Jamaica  0.2 0.3 0.3 0.3 0.3 0.3 0.3 
Belize  0.3 0.2 0.2 0.2 0.2 0.2 0.2 
Colombia  0.0 0.1 0.0 0.1 0.3 0.2 0.2 
Haiti 0.1 0.1 0.2 0.2 0.1 0.1 0.2 
Cuba 0.1 0.1 0.1 0.1 0.1 0.1 0.1 
Chile 0.2 0.2 0.6 0.9 0.6 0.2 0.1 
Europe  5.8 4.3 6.0 4.6 4.2 3.6 2.9 
EU(28)  5.7 4.3 6.0 4.5 4.2 3.5 2.9 
Spain  1.7 1.1 1.4 1.5 1.4 1.3 0.7 
Germany  2.3 1.8 2.6 1.3 1.1 0.4 0.5 
Netherlands  0.4 0.2 0.2 0.2 0.4 0.7 0.5 
Italy 0.3 0.3 0.5 0.4 0.4 0.5 0.4 
Belgium  0.4 0.2 0.5 0.3 0.2 0.1 0.2 
EFTA 0.0 0.0 0.0 0.0 0.0 0.1 0.0 
Other Europe  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Commonwealth of Independent States 
(CIS)  0.6 0.4 0.1 0.0 0.2 0.0 0.0 
Russian Federation  0.6 0.4 0.1 0.0 0.2 0.0 0.0 
Africa  0.1 0.1 0.1 0.1 0.1 0.1 0.1 
Middle East  0.0 0.0 0.0 0.0 0.1 0.1 0.1 
Asia 1.6 1.8 2.8 1.9 3.1 2.4 3.1 
China  0.1 0.1 0.0 0.1 0.1 0.1 0.8 
Japan  0.5 0.4 0.9 0.6 0.7 0.3 0.4 
Other Asia  1.1 1.3 1.8 1.3 2.3 2.0 1.9 
Chinese Taipei  0.4 0.3 0.6 0.1 0.9 0.3 0.5 
New Zealand  0.0 0.0 0.0 0.0 0.0 0.3 0.4 
Australia  0.1 0.1 0.1 0.1 0.1 0.3 0.3 
Malaysia  0.0 0.2 0.0 0.0 0.0 0.0 0.3 
Korea, Republic of  0.1 0.4 0.5 0.6 0.3 0.8 0.2 
India 0.1 0.1 0.1 0.1 0.1 0.1 0.1 
Hong Kong, China  0.1 0.1 0.1 0.1 0.1 0.1 0.1 
Viet Nam  0.0 0.1 0.1 0.1 0.0 0.1 0.0 
Thailand  0.1 0.0 0.1 0.0 0.0 0.0 0.0 
Other  0.0 0.0 0.0 0.0 0.0 0.0 0.0 
a Includes maquila and non -maquila exports.  
b Preliminary figures.  
Note:  The sum of the parts is not necessarily equal to the tot al, owing to rounding.  
Source:  Reserve Bank of El Salvador.  WT/TPR/S/344 • El S alvador  
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  Table A1. 6 Total merchandise imports by trading partner, 2009 -2015a 
(US$ million and  %) 
Description  2009  2010  2011  2012  2013  2014b 2015b 
 (US$ million)  
Total impor ts 7,325  8,416  9,965  10,258  10,772  10,513  10,415  
 (% of total imports)  
America  80.7 79.3 79.0 78.9 76.8 77.3 75.4 
USA 36.1 37.0 38.2 37.8 38.9 41.0 39.4 
Other America  44.5 42.3 40.8 41.1 37.9 36.3 36.0 
Guatemala  10.3 9.6 9.9 9.7 8.7 9.5 9.6 
Mexico  7.5 8.7 7.4 6.8 6.9 7.0 7.3 
Honduras  4.8 4.4 4.7 4.5 5.2 5.3 5.7 
Costa Rica  3.1 3.1 2.9 2.9 2.6 2.5 2.5 
Nicaragua  2.7 2.2 2.0 2.0 1.9 2.0 2.3 
Brazil  2.4 1.4 1.7 2.1 1.5 1.4 1.6 
Venezuela, Bolivarian Republic of  1.3 1.6 2.3 2.1 2.7 1.2 1.2 
Panama  2.5 2.7 2.0 1.7 1.5 1.4 1.1 
Colombia  1.3 1.0 1.8 3.2 1.6 1.0 1.1 
Netherlands Antilles  1.2 1.9 0.6 1.0 1.8 1.1 0.8 
Europe  8.1 7.3 6.9 6.2 7.1 6.3 6.9 
EU(28)  7.3 6.6 6.0 5.5 6.4 5.9 6.4 
Germany  1.5 1.6 1.4 1.5 1.6 1.4 1.7 
Spain  1.0 0.9 1.0 0.9 1.2 1.2 1.3 
Italy 0.9 0.7 0.6 0.5 0.6 0.6 0.7 
United Kingdom  0.2 0.3 0.3 0.3 0.4 0.4 0.4 
France  0.6 0.4 0.4 0.3 0.5 0.4 0.4 
EFTA 0.7 0.6 0.8 0.6 0.7 0.4 0.5 
Switzerland and Liechtenstein  0.4 0.4 0.4 0.3 0.3 0.4 0.4 
Other Europe  0.1 0.1 0.0 0.0 0.0 0.0 0.1 
Commonw ealth of Independent 
States (CIS)  0.3 0.2 0.2 0.3 0.4 0.3 0.2 
Russian Federation  0.1 0.2 0.2 0.3 0.2 0.2 0.2 
Africa  0.4 0.6 0.2 0.3 0.1 0.1 0.1 
Middle East  0.1 0.1 0.1 0.2 0.2 0.2 0.3 
United Arab Emirates  0.0 0.0 0.0 0.1 0.1 0.1 0.1 
Saudi Arabia, King dom of  0.0 0.0 0.0 0.0 0.0 0.1 0.1 
Israel  0.0 0.1 0.1 0.1 0.1 0.0 0.0 
Asia 10.4 12.3 13.3 13.9 15.3 15.7 16.8 
China  4.6 5.7 5.5 5.9 6.5 7.3 8.1 
Japan  1.4 1.8 2.1 1.7 1.7 1.5 1.5 
Other Asian partners  4.5 4.9 5.6 6.4 7.1 7.0 7.2 
Korea, Republic of  0.8 1.0 1.2 1.5 1.9 1.6 1.6 
Chinese Taipei  1.2 1.2 1.4 1.5 1.6 1.4 1.3 
Hong Kong, China  0.5 0.6 0.9 1.0 0.9 1.2 1.1 
India 0.4 0.4 0.4 0.7 0.9 0.9 1.0 
Thailand  0.3 0.4 0.5 0.5 0.6 0.6 0.5 
Singapore  0.1 0.1 0.2 0.2 0.2 0.2 0.4 
Australia  0.3 0.4 0.3 0.3 0.2 0.3 0.2 
Viet Nam  0.1 0.1 0.1 0.1 0.1 0.2 0.2 
Indonesia  0.1 0.2 0.2 0.2 0.2 0.2 0.2 
Other  0.0 0.1 0.3 0.2 0.1 0.1 0.3 
a Includes maquila and non -maquila imports.  
b Preliminary figures.  
Note:  The sum of the parts is not necessarily equal to the total, owing to rounding.  
Source:  Reserve Bank of El Salvador.    
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Table A2. 1 Notifications submitted to the WTO by El Salvador between 1  January  2010 and 31  January  2016  
Agreement and 
provision  Type of notification  Frequency  Subject m atter  Document (most recent 
if submitted regularly)  Date  
Agreement on Trade Facilitation  
Article 15, Section II  Category A commitments  Once only  Category A commitments  WT/PCTF/N/SLV/1  29/07/2014  
Agreement on Agriculture  
Article 18.2 (MA:2)  Imports s ubject to tariff quotas  On an annual 
basis Notification for 2013 and 2014  G/AG/N/SLV/43  28/01/2016  
Article 18.2 (MA:1)  Administration of tariff quotas  On an annual 
basis Notification for 2014 and 2015  G/AG/N/SLV/44  28/01/2016  
Articles 5.7 and 18.2 
(MA:5)  Special safeguard provisions  On an annual 
basis Notification for 2012, 2013, 2014 and 2015  G/AG/N/SLV/42  18/01/2016  
General Agreement on Trade in Services  
Article V:7(a)  Notification of regional trade 
agreement  Ad hoc  Free Trade Agreement between the United 
Mexican States and the Republics of Costa Rica, 
El Salvador, Guatemala, Honduras and 
Nicaragua  S/C/N/717/Rev.1  28/01/2014  
Article V:7(a)  Notification of regional trade 
agreement  Ad hoc  Association Agreement between the European 
Union (and its Memb er States) and Central 
America  S/C/N/680  27/02/2013  
Article V:7(a)  Notification of regional trade 
agreement  Ad hoc  Free Trade Agreement between the Republic of 
Colombia and the Republics of El Salvador, 
Guatemala and Honduras  S/C/N/646  03/09/2012  
Article V:7(a)  Notification of regional trade 
agreement  Ad hoc  Free Trade Agreement between Central America 
and the Dominican Republic  S/C/N/614  09/01/2012  
Article V:7(a)  Notification of regional trade 
agreement  Ad hoc  Free Trade Agreement between El Salvador,  
Honduras and the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu  S/C/N/544  08/04/2010  
GATT 1994  
Article XXVIII:5  Modification of schedules  Triennial  Reservation of the right to modify schedules 
during a three -year period  G/MA/300  24/10/ 2014 
Article XVII:4(a)  State trading enterprises  On an annual 
basis  New and full notification for the period 
1 January  2010 - 31 December  2011 G/STR/N/14/SLV  10/10/2012  
Article XXIV:7(a)  Notification of the termination of 
free trade agreements  Ad hoc  Termination of the Free Trade Agreement 
between Mexico and El Salvador (WT/REG212) 
due to the entry into force of the new 
Agreement notified in document 
WT/REG349/N/1/Rev.1  WT/REG/GEN/N/7  29/01/2014  
Article XXIV:7(a)  Notification of regional trade 
agreement  Ad hoc  Free Trade Agreement between the United 
Mexican States and the Republics of Costa Rica, 
El Salvador, Guatemala, Honduras and 
Nicaragua  WT/REG349/N/1/Rev.1  28/01/2014    
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Agreement and 
provision  Type of notification  Frequency  Subject m atter  Document (most recent 
if submitted regularly)  Date  
Article XXIV:7(a)  Notification of regional trade 
agreement  Ad hoc  Association A greement between the European 
Union (and its Member States) and Central 
America  WT/REG332/N/1  27/02/2013  
Article XXIV:7(a)  Notification of regional trade 
agreement  Ad hoc  Free Trade Agreement between the Republic of 
Colombia and the Republics of El Salva dor, 
Guatemala and Honduras  WT/REG316/N/1  03/09/2012  
Article XXIV:7(a)  Notification of regional trade 
agreement  Ad hoc  Free Trade Agreement between Central America 
and the Dominican Republic  WT/REG305/N/1  09/01/2012  
Article XXIV:7(a)  Notification of reg ional trade 
agreement  Ad hoc  Free Trade Agreement between El Salvador, 
Honduras and the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu  WT/REG283/N/1  08/04/2010  
Agreement on the Application of Sanitary and Phytosanitary Measures  
Article 7 , Annex B  Notification of sanitary or 
phytosanitary measures  Ad hoc  SPS measures applicable to various products  G/SPS/N/SLV/121 – 
G/SPS/N/SLV/89  30/04/2015 – 
03/05/2010  
Agreement on Rules of Origin  
Article 5 and Annex II, 
paragraph 4  Changes in prefere ntial rules of 
origin; new preferential rules of 
origin  Ad hoc  Preferential rules of origin  G/RO/N/114  
G/RO/N/93  02/04/2014  
09/04/2013  
Agreement on Technical Barriers to Trade  
Article 2 or Article 5  Notification of technical regulations  Ad hoc  Technic al regulations applicable to various 
products  G/TBT/N/SLV/171 - 
G/TBT/N/SLV/141  13/12/2013 - 
03/05/2010  
Agreement on Subsidies and Countervailing Measures  
Articles 25.1 and 27.4  New and full notification / 
Continuation of extension under 
Article 27.4  On an annual 
basis Notification concerning the Export Processing 
Zones and Marketing Act  G/SCM/N/284/SLV  
G/SCM/N/290/SLV  14/07/2015  
Article 27.4  Consultations with the Committee 
under Article 27.4  Ad hoc  Consultations on export subsidies  G/SCM/N/251/SLV  08/01/2013  
Trade and development (Enabling Clause)  
Paragraph 4(a)  Notification of regional trade 
agreement  Ad hoc  Partial Scope Agreement between El Salvador 
and Cuba  WT/COMTD/N/43  29/11/2013  
Source:  WTO Secretariat.  
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  Table A2. 2 Bilateral reciprocal investment promotion and protection agreements signed 
by El Salvador, as at December  2015  
Partner  Date of signature  Date of entry into force  Current status  
France  20 September  1978 12 December  1992 In force  
Ecuador  16 May 1994 5 January  1996 Agreement terminated by 
Ecuador in October  2008 
Switzerland  8 December  1994 16 September  1996 In force  
Spain  14 February  1995 20 February  1996 In force  
Argentina  9 May 1996 8 January  1999 In force  
Peru 13 June 1996 14 December  1996 In force 
Chinese Taipei  30 August  1996 15 February  1997 Superseded by the Free Trade 
Agreement between El  Salvador 
and Chinese Taipei  
Chile 8 November  1996 3 July 2002 In force  
Germany  11 December  1997 15 April 2001 In force  
Paraguay  30 January  1998 9 November 1998 In force  
Korea, Rep. of  7 July 1998 25 May 2002 In force  
Nicaragua  23 January  1999 8 July 2000 Terminated  
United States  10 March  1999  Awaiting ratification  
Morocco  21 April 1999 11 April 2002 In force  
Canada  31 May 1999  Awaiting ratificati on 
Belgium/  
Luxembourg  12 October  1999 18 November  2002 In force  
Netherlands  12 October  1999 1 March  2001 In force  
United Kingdom  14 October  1999 1 December  2000 In force  
Czech Republic  30 November  1999 28 March  2001 In force  
Israel  3 April 2000 7 July 2003 In force  
Uruguay  24 August  2000 23 May 2003 In force  
Belize  4 December  2001  Awaiting ratification by Belize  
Costa Rica  21 November  2001  Awaiting ratification by Costa 
Rica 
Finland  20 May 2002 20 February  2003 In force  
Source:  WTO Secretariat , based on online information from UNCTAD. Viewed at: 
http://investmentpolicyhub.unctad.org/IIA/CountryBits/63 . 
   
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Table A3. 1 Summary analysis of preferenti al tariffs, 2015  
Product description  Number 
of lines  Average (%)  
MFN CAFTA  Chile  Colombia  Cuba  Dominican 
Republic  EU Mexico  Panama  Chinese 
Taipei  
Total  6,978  6.3 0.4 0.9 3.9 2.2 0.3 4.5 0.9 2.2 4.0 
HS 01 -24 1,224  13.0 2.3 3.9 7.5 4.5 1.9 10.0 3.8 4.5 8.0 
HS 25 -97 5,754  4.8 0.0 0.3 3.1 1.7 0.0 3.3 0.3 1.7 3.1 
By WTO category             
Agricultural products  1,029  12.5 2.7 4.7 8.4 5.4 2.2 9.8 4.5 5.4 8.8 
 - Animals and animal products  154 25.8 7.6 14.7 22.0 19.3 6.1 22.4 13.8 19.3 22.3 
 - Dairy products  34 26.2 23.9 26.2 26.2 24.1 2.9 25.9 25.0 24.1 26.2 
 - Fruit, vegetables and garden produce  285 11.6 0.2 0.8 4.1 0.4 0.8 7.3 1.0 0.3 6.5 
 - Coffee and tea  29 13.3 1.8 1.2 8.0 6.0 3.4 6.5 5.3 5.0 6.3 
 - Cereals and cereal preparations  133 9.1 2.5 3.5 6.3 3.2 1.6 7.9 3.6 3.2 6.9 
 - Oilseeds, fats and oils and their products  98 5.4 0.9 2.8 4.2 3.0 2.8 4.7 0.0 3.1 3.1 
 - Sugar and confectionery  21 26.2 8.6 26.2 25.9 24.8 7.6 26.2 24.8 24.8 26.2 
 - Beverages, alcohol and tobacco  74 16.1 1.2 1.0 12.8 3.4 3.6 11.4 3.2 3.4 11.0 
 - Cotton  5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
 - Other agricultural products n.e.s.  196 4.1 0.0 0.0 1.2 0.0 0.0 2.8 0.0 0.0 0.7 
Non-agricultural products (including petroleum)  5,949  5.2 0.0 0.3 3.1 1.7 0.0 3.6 0.3 1.7 3.1 
 - Non-agricultural products (excluding petroleum)  5,921  5.2 0.0 0.3 3.1 1.7 0.0 3.6 0.3 1.7 3.2 
 - - Fish and fish products  288 11.6 0.0 0.0 2.2 0.0 0.0 8.2 0.2 0.0 2.4 
 - - Mineral products and metals  1,093  3.6 0.0 0.3 1.5 0.0 0.0 2.6 0.2 0.0 2.1 
 - - Chemicals and photographic products  1,276  2.2 0.0 0.0 1.5 0.0 0.0 1.5 0.0 0.0 1.4 
 - - Wood, wood pulp, paper and furniture  459 6.3 0.0 0.0 4.5 0.1 0.0 4.5 0.0 0.1 3.8 
 - - Textiles  698 8.1 0.0 0.1 7.9 7.6 0.0 5.1 0.0 7.5 7.9 
 - - Clothin g 236 14.8 0.0 0.0 14.8 14.7 0.0 10.0 0.0 14.7 14.8 
 - - Leather, rubber, footwear and travel articles  211 7.6 0.0 0.1 3.5 0.0 0.0 5.3 0.0 0.0 2.7 
 - - Non-electrical machinery  595 1.4 0.0 0.0 0.4 0.0 0.0 1.0 0.0 0.0 0.5 
 - - Electrical machinery  339 2.6 0.0 0.0 0.5 0.0 0.0 1.8 0.0 0.0 0.3 
 - - Transport equipment  221 6.4 0.0 5.0 4.8 5.0 0.0 5.5 3.1 5.0 5.8 
 - - Non-agricultural products n.e.s.  505 7.6 0.0 0.0 1.8 0.0 0.0 5.2 1.3 0.0 1.9 
 - Petroleum  28 4.7 0.0 0.0 1.4 0.0 3.4 2.8 0.0 0.0 0.0 
By ISIC  sectora            
Agriculture and fishing  497 8.3 0.6 0.8 2.3 0.9 0.4 5.0 1.2 0.9 3.2 
Mining  112 1.7 0.0 0.0 0.0 0.0 0.0 1.2 0.0 0.0 0.6 
Manufacturing  6,368  6.2 0.4 0.9 4.1 2.4 0.3 4.5 0.9 2.3 4.1 
By HS section             
01 Live animals; animal pro ducts  449 15.3 3.8 7.0 8.5 6.9 2.3 12.2 6.9 6.9 8.8 
02 Vegetable products  419 9.0 0.8 1.3 3.6 1.2 1.3 5.7 1.7 1.2 4.7 
03 Fats and oils  57 7.5 1.5 4.8 6.3 5.2 4.8 6.7 0.0 5.4 5.0 
04 Prepared foodstuffs, etc.  299 16.2 2.1 2.7 11.9 5.7 1.4 13.4 3.1 5.5 11.9 
05 Mineral products  187 2.7 0.0 0.3 0.4 0.0 0.6 1.9 0.3 0.0 0.4 
06 Products of the chemical or allied industries  1,128  1.9 0.0 0.0 1.0 0.0 0.0 1.2 0.0 0.0 0.8   
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Product description  Number 
of lines  Average (%)  
MFN CAFTA  Chile  Colombia  Cuba  Dominican 
Republic  EU Mexico  Panama  Chinese 
Taipei  
07 Plastics and rubber  337 4.4 0.0 0.0 3.1 0.0 0.0 3.1 0.0 0.0 3.2 
08 Hides and skins  108 8.3 0.0 0.0 3.2 0.0 0.0 5.6 0.0 0.0 0.5 
09 Wood and articles of wood  139 7.8 0.0 0.0 4.8 0.0 0.0 5.6 0.0 0.0 2.1 
10 Pulp of wood, paper, etc.  292 5.1 0.0 0.0 4.2 0.0 0.0 3.6 0.0 0.0 4.2 
11 Textiles and textile materials  918 9.6 0.0 0.0 9.6 9.5 0.0 6.2 0.0 9.5 9.6 
12 Footwear, hats and other headgear  64 12.8 0.0 0.0 7.0 0.0 0.0 8.5 0.0 0.0 7.8 
13 Articles of stone  176 6.3 0.0 0.0 2.6 0.0 0.0 4.5 0.0 0.0 2.8 
14 Precious stones, etc.  54 6.9 0.0 0.0 1.6 0.0 0.0 4.7 0.0 0.0 0.4 
15 Base metals and articles of base metal  702 3.2 0.0 0.4 1.6 0.0 0.0 2.3 0.3 0.0 2.5 
16 Machinery and mechanical appliances  980 2.1 0.0 0.0 0.3 0.0 0.0 1.4 0.0 0.0 0.3 
17 Vehicles, aircraft, vessels and associated transport 
equipment  234 6.2 0.0 4.7 4.6 4.8 0.0 5.3 2.9 4.8 5.6 
18 Precision instruments  234 3.8 0.0 0.0 0.2 0.0 0.0 2.8 0.0 0.0 0.9 
19 Arms and ammunition  21 30.0 0.0 0.0 12.0 0.0 0.0 21.0 30.0 0.0 0.0 
20 Miscellaneous manufactured articles  171 10.7 0.0 0.0 4.0 0.3 0.0 7.1 0.0 0.3 5.0 
21 Works of art, etc.  9 7.8 0.0 0.0 0.0 0.0 0.0 5.6 0.0 0.0 6.0 
By stage of processing             
First stage of processing  913 7.0 0.6 0.9 2.2 0.8 0.6 4.4 1.0 0.8 2.6 
Semi-processed products  2,359  3.9 0.1 0.4 3.0 1.7 0.1 2.7 0.3 1.7 3.0 
Fully-processed products  3,706  7.6 0.6 1.2 4.9 2.9 0.5 5.7 1.2 2.8 5.0 
a  ISIC (Rev.2), excluding electricity (one line).  
Source:  WTO estimates, based on data provided by the authorities.  
   
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Table A4. 1 Application of agricultural tariff quotas under bilateral trade agreem ents, 2015  
Country – 
Agreement  Product  Tariff heading  Quantity (MT) or  
quota (US$)  In-quota tariff (%)  Out-of-quota tariff 
(%) 
United States  Meat of bovine animals  0201.20.00  
0201.30.00  
0201.20.00  
0202.30.00  150 MT  0 7.1 
Yellow maize (corn)  1005.90.20  525,000 MT  0 10.2 
White maize (corn)  1005.90.30  42,000 MT  0 20 
Mexico  Yellow maize (corn)  1005.90.20  120,000 MT  0 15 
Panama  Mozzarella cheese  0406.10.10  US$250,000  0 40 
Other  0406.10.90  US$250,000  0 40 
Other  0406.20.90  US$250,000  0 40 
Processed ch eese, not grated or powdered  0406.30.00  US$250,000  0 40 
Cheddar, in blocks or bars  0406.90.20  US$250,000  0 40 
Other  0406.90.90  US$250,000a 0 40 
European Union  Cheese and curd  0406.10.10  
0406.20.20  
0406.20.90  
0406.30.00  
0406.90.20  
0406.90.90  641 MT  0 40 
Meat and edible meat offal  0210.11.00  
0210.12.00  
0210.19.00  990 MT  0 32 
Milk and cream, in powder  0402.10.00  
0402.21.11  
0402.21.12  
0402.21.21  
0402.21.22  
0402.29.00  220 MT  0 20 
15 
20 
15 
15 
15 
Other prepared or preserved meat  1602.41.00  
1602.42.00  
1602.49.90  990 MT  0 32 
a With the exception of Münster cheese, classifiable under 0406.90.90.  
Source:  Directorate -General of Customs of El Salvador, Provision No.  DGA-002-2015, viewed at: 
http://www.transparenciafiscal.gob.sv/downloads/pdf/DC9271_DACG_002 -2015.pdf . 
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