El Salvador: Competition Superintendency
El Salvador
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El Salvador: Competition Superintendency

El Salvador: Competition Superintendency

El Salvador

El Salvador: from the enforcer

Address: Edificio Madre Selva Primer Nivel, Calzada El Almendro y 1a Avenida El Espino No. 82, Antiguo Cuscatlán, La Libertad, El Salvador, CA
Tel: +503 2523 6600
Fax: +503 2523 6625
Email: [email protected]
Web: www.sc.gob.sv

Contacts

Gerardo Daniel Henríquez Angulo
Competition Superintendent
Email: [email protected]
Tel: +503 2523 6600
Web: www.sc.gob.sv

Regina Vargas
Head of Competition Advocacy
Email: [email protected]
Tel: +503 2523 6600
Web: www.sc.gob.sv

Questions and answers

How long is the head of agency’s term of office?

Pursuant article 8 of the Competition Law (LC) the superintendent and directors shall last five years in office and may be re-elected for one more term.

When is he or she due for reappointment?

The term of office of the current Superintendent ends on 1 February 2021. The current directors’ terms expire at the end of 2020, except one that expires in 2023.

Which posts within the organisation are political appointments?

None. Pursuant to article 6 of the Competition Law, the highest authority of the Competition Superintendency (SC) is the board of directors, which comprises the superintendent, two directors and three alternate directors appointed by the President of the Republic.

What is the agency’s annual budget?

The approved budget for 2020 was approximately US$2.6 million from the country’s general fund.

How many staff are employed by the agency?

Forty-seven full-time employees (as of 14 August 2020).

To whom does the head of the agency report?

The SC is a technical institution with the administrative and budgetary autonomy to exercise its attributions and duties. However, governmental institutions are ultimately led by the President of the Republic.

Do any industry-specific regulators have competition powers?

No.

If so, how do these relate to your role?

Not applicable.

Do politicians have any right to overrule or disregard the decisions of the authority?

No.

Does the law allow non-competition aims to be considered when taking decisions?

Every SC resolution must contain the legal and factual grounds to justify the board of directors’ decision. Pursuant to article 1 of the Competition Law, the object of the Competition Law is to promote, protect and guarantee competition by preventing and eliminating anticompetitive practices, regardless of their nature, that limit or restrict competition, or impede market access to any economic agent, to increase economic efficiency and consumer welfare. The Competition Law provides that the SC shall safeguard the compliance by means of a technical, legal and economic analysis system, complemented by support studies and other pertinent activities (article 4).

Which body hears appeals against the agency’s decisions? Is there any form of judicial review beyond that mentioned above? If so, which body conducts this?

The decision that resolves the procedure shall admit an administrative review recourse before the SC board of directors, in which illegalities of the process may be alleged. If the economic agent is not satisfied with the decision it can also bring a judicial claim before the Supreme Court of Justice.

Has the authority ever blocked a proposed merger?

Yes, a proposed merger in the telecommunications sector with reference SC-013-S/C/R-2012 was denied in 2012.

Has the authority ever imposed conditions on a proposed merger?

Yes. The following proposed mergers were conditioned:

ReferenceResolution dateRelated sector
SC-032-S/CE/R-201917 August 2020Telecommunications
SC-047-S/CE/R-201614 June 2017Telecommunications
SC-003-S/CE/R-201226 August 2016Beer industry
SC-004-S/C/R-201213 June 2012Insurance
SC-028-S/C/R-201124 April 2012Telecommunications
SC-025-S/C/R-201124 January 2012Retail fuel
SC-016-S/C/R-201130 August 2011Telecommunications
SC-028-S/C/R-200915 February 2010Retail fuel
SC-016-S/C/R-200830 September 2008Telecommunications
SC-012-S/C/R-20078 May 2007Banking

Updated: August 25, 2020.

Has the authority conducted a Phase II investigation in any of its merger filings?

Not applicable. The Competition Law only establishes one type of merger analysis.

Has the authority ever pursued a company based outside your jurisdiction for a cartel offence?

No.

Do you operate a leniency programme? Whom should potential applicants contact?

Yes. Pursuant to article 39 of the Competition Law, any economic agent who has engaged in or is engaging in anticompetitive practice among competitors can acknowledge it before the superintendent, who shall verify the compliance with the requirements listed in said article. Provided the economic agent fulfils all the requirements, when issuing the final resolution the board of directors shall not apply the criteria set forth in article 38, paragraph 2 of the Competition Law.

Is there a criminal enforcement track? If so, who is responsible for it?

No.

Are there any plans to reform the competition law?

Yes. It is an ongoing process.

When did the last review of the law occur?

The Competition Law has been amended twice, in 2007, to provide for new powers for the Superintendency and for higher maximum fines for especially harmful conduct, and in 2017, to clarify in which judicial courts the Superintendency must solicit authorisation to conduct a dawn raid (this was done to maintain coherence with the enactment in 2017 of the Contentious Administrative Law).

Do you have a separate economics team? If so, please give details.

No. The technical staff of the agency is divided in three main units, with economists within the Economics, Investigations and Competition Advocacy teams.

Is there a criminal enforcement track? If so, who is responsible for it?

No.

Has the authority conducted a dawn raid?

Yes. The SC conducted a dawn raid in 2008 during the investigation of a wheat flour cartel (case reference: SC-005-O/PA/NR-2008).

Has the authority imposed penalties on officers or directors of companies for offences committed by the company?

No. Such penalties are not considered by the Competition Law.

What are the pre-merger notification thresholds, if any, for the buyer and seller involved in a merger?

Pursuant to article 33 of the Competition Law, mergers whose combined total assets exceed 50,000 minimum urban annual wages in the industry sector or whose total income exceeds 60,000 minimum urban annual wages in the industry sector must require prior authorisation from the Superintendency.

Thus, a merger authorisation must be requested to the SC when the combined sum of national assets is above US$182.5 million or the combined sum of national sales is above US$219 million (If applicable, further updates might be available at: https://www.sc.gob.sv/index.php/concentraciones/).

Are there any restrictions on minority investments?

No.

What discounts are available to companies that cooperate with cartel investigations?

For anticompetitive practices considered as particularly serious, the Competition Law states that if proven it is subject to an aggravation of the fine. However, the SC might not apply the particularly serious criteria on article 38(2) of the Competition Law, resulting in an attenuated fine, to the first economic agent that applies for leniency in compliance with the requirements in article 39 of the Competition Law.

Does the authority conduct criminal investigations and prosecutions for cartel activity? If not, is there another authority in the country that does?

No. Infringements to the Competition Law are sanctioned with fines, pursuant article 38 of the same.


El Salvador: from the enforcer's competition economists

Address: Edificio Madre Selva Primer Nivel, Calzada El Almendro y 1st Avenida El Espino No. 82, Antiguo Cuscatlán,
La Libertad, El Salvador, CA
Tel: +503 2523 6600
Fax: +503 2523 6625
Email: [email protected]
Web: www.sc.gob.sv

Contacts

Gerardo Daniel Henríquez Angulo
Competition Superintendent
Tel: +503 2523 6600
Email: [email protected]

Questions and answers

How many economists do you employ?

The full-time technical staff of the Competition Superintendency comprises 12 economists.

Do you have a separate economics unit?

No. The technical staff of the agency is divided into three main offices, with economists and lawyers within the Economics, Investigations and Competition Advocacy units.

Do you have a chief economist?

Yes. The head of the Economics Office.

To whom does the chief economist report?

The chief economist reports to the Competition Superintendent, who chairs the board of directors.

Does the chief economist have the power to hire his or her own staff?

No. It only has the ability to propose candidates or to screen and reduce the ones listed as applicable within a selection process established for all the Superintendency's employees. Pursuant to article 13 of the Competition Law, the power to appoint or hire staff is granted to the superintendent.

How many of your economists have a PhD in industrial economics?

None.

Does the agency include a specialist economist on every case team? If not, why not?

Every case team is composed of lawyers and economists.

Is the economics unit a ‘second pair of eyes’ during cases – is it one of the agency’s checks and balances? If not, why not?

No. The technical staff of the institution is arranged by activity: Investigations, Economics and Competition Advocacy.

For instance, the investigative procedure of any anticompetitive practice case, after its instruction, is handled mainly by the Investigations unit. The Economics Unit is mainly in charge of competition market studies, follow-up on public policy recommendations, implementation, merger analysis and opinions on laws and public procurement procedures. These two offices, as well as the one in charge of other competition advocacy activities, have economists and lawyers within their staff. The Competition Superintendency does not have a mechanism of checks and balances between the above-mentioned three units for case handling. The final decision of a case and several other matters pursuant to article 14 of the Competition Law are among the attributions and duties of the board of directors, which is the highest authority of the Competition Superintendency.

How much economics work is outsourced? What type of work is outsourced?

Mainly competition market studies in some specific sectors, if it is believed that it is justified by necessary expertise or other similar criteria. The quantity of economic work outsourced is very limited and varies yearly.

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