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 2026. The current directors’ terms expire on 19 May 2026.

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 2021 is US$2.4 million from the country’s general fund.

How many staff are employed by the agency?

There are 52 full-time employees (as of 19 October 2021).

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. However, sectoral legal provisions require some regulators to interact with the Superintendency as regards the promotion of competition and/or prevention of anticompetitive practices; among those are the Electricity Law, the Telecommunications Law, the Law governing civil aviation and the Law on maritime ports. To illustrate the extent of coordination, for instance, pursuant to article 8-A of the Telecommunications Law – with the aim of preventing anticompetitive practices by a major supplier – the sectoral regulator shall cooperate with the SC.

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 Administrative Contentious Tribunals (courts of first and second instance). Appeals are heard by the first or second instance Tribunal depending on the amount of the fine imposed by the Superintendency.

If a decision falls under the competence of the first instance Tribunal, and the economic agent is not satisfied with the judgment, that agent can appeal solely to the second instance Tribunal. Decisions of the second instance tribunal can only be appealed before the Administrative Contentious Chamber of the Supreme Court. All instances will review whether the Superintendency applied due process established by law. Appeals concerning infringements of constitutional rights are heard by the Constitutional chamber of 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:

Reference

Resolution date

Related sector

SC-032-S/CE/R-2019

17 August 2020

Telecommunications

SC-047-S/CE/R-2016

14 June 2017

Telecommunications

SC-003-S/CE/R-2012

26 August 2016

Beer industry

SC-004-S/C/R-2012

13 June 2012

Insurance

SC-028-S/C/R-2011

24 April 2012

Telecommunications

SC-025-S/C/R-2011

24 January 2012

Retail fuel

SC-016-S/C/R-2011

30 August 2011

Telecommunications

SC-028-S/C/R-2009

15 February 2010

Retail fuel

SC-016-S/C/R-2008

30 September 2008

Telecommunications

SC-012-S/C/R-2007

8 May 2007

Banking

Updated: 19 October 2021

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 total assets is above US$219 million or the combined sum of total sales is above US$262.8 million (estimates based on the minimum wage effective on 1 August 2021; if applicable, further updates might be available at: https://www.sc.gob.sv/index.php/concentraciones-3/).

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 16 economists.

Do you have a separate economics unit?

A separate economics unit composed solely by economists does not exist in the SC. The economists of the agency are distributed within the Economics, Competition Advocacy, Investigations and litigation offices.

Do you have a chief economist?

The SC office organisation does not include a chief economist position coordinating all economists.  The technical staff of the agency is organised in three main offices, with economists and lawyers within the Economics, Competition Advocacy, Investigations and litigation offices.

To whom does the chief economist report?

Not applicable.

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

Not applicable.

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 in three offices: Investigations and litigation, Economics and Competition Advocacy.

For instance, the investigative procedure of any anticompetitive practice case, after its instruction, is handled mainly by the Investigations and litigation office. The Economics office is mainly in charge of competition market studies, market surveillance, merger analysis, opinions on laws and public procurement procedures and follow-up on the implementation of public policy recommendations from the opinions. 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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