El Salvador: Measures taken by authorities to deal with corruption, particularly in the financial sector (update to SLV39332.E of 11 September 2002)
| Publisher | Canada: Immigration and Refugee Board of Canada |
| Author | Research Directorate, Immigration and Refugee Board, Canada |
| Publication Date | 7 April 2004 |
| Citation / Document Symbol | SLV42329.E |
| Reference | 2 |
| Cite as | Canada: Immigration and Refugee Board of Canada, El Salvador: Measures taken by authorities to deal with corruption, particularly in the financial sector (update to SLV39332.E of 11 September 2002), 7 April 2004, SLV42329.E, available at: https://www.refworld.org/docid/41501c5c23.html [accessed 1 June 2023] |
| Disclaimer | This is not a UNHCR publication. UNHCR is not responsible for, nor does it necessarily endorse, its content. Any views expressed are solely those of the author or publisher and do not necessarily reflect those of UNHCR, the United Nations or its Member States. |
According to Transparency International's (TI) 2003 Global Perceptions Index, El Salvador was rated 3.7 on a scale in which a score of 10 would denote a complete absence of corruption (TI 2003, 20-21). This score placed it 61st among 133 countries surveyed (ibid.). In 2002, it received a score of 3.4 and was ranked 63rd among the 102 countries that were assessed that year (ibid. 2002, 16).
In an investment guide to El Salvador, the Commercial Service of the Government of the United States stated that the country's "laws and policies ... are relatively transparent and generally foster competition," (US 31 Oct. 2001, A.8) with the 1999 Banking Law upgrading the domestic standards
to international standards, [strengthening] supervisory authorities and [providing] more transparent and secure operations for customers and banks. Under this law, foreign banks are afforded national treatment and can offer the same spectrum of services as Salvadoran banks. Other important features of the law include ... a sharp reduction in the amount of loans a bank can provide to its shareholders and directors. The new law strengthens the Superintendency of the financial system in a number of key areas, particularly enhancing its power to act quickly in the event a bank experiences serious financial difficulty and its ability to audit financial groups on a consolidated basis (ibid., A.1).
The report also noted that:
El Salvador has a regulatory system in place to prevent corruption. Penalties include fines and/or prison sentences. Accepting a bribe is a criminal act. The comptroller (Corte de Cuentas de la Republica) is in charge of investigating public officials and entities and passing such cases to the attorney general of the republic for prosecution. A general reform of the judicial system is getting underway, and some corrupt and/or unqualified judges have been removed. Nonetheless, the court system labors under a general perception of corruption and incompetence (ibid., A.11).
In a report on corruption in El Salvador, Probidad stated that government officials took action in cases of corruption mostly when pressed to do so by the media (Probidad n.d.a). While observing that state institutions with a special interest in corruption include the Office of the President, the Superior Court of Justice, the Office of the Attorney General (Fiscalía General) and the Accounts Court (Corte de Cuentas), the report claimed that none of these agencies has demonstrated the political will necessary to expose and punish those involved in corrupt practices nor to promote and implement anti-corruption legislation and procedures (ibid.).
These statements corroborated claims made by the newspaper Diario CoLatino in a 20 August 2003 opinion article criticizing the government's lack of political will to combat corruption. The report indicated that individuals suspected of corrupt practices in connection with the closure of a number of financial institutions had avoided "tough punishment" (mano dura) for their alleged crimes (Diario CoLatino 20 Aug. 2003).
On 2 November 2003, the magazine Vértice claimed that, despite the existence of safeguards to prevent corruption within financial institutions, certain officials employed by state bodies responsible for the oversight of the banking sector have prevented effective action against such corruption. The report quoted Jaime López of Probidad as saying that, in many cases, fraud in financial institutions results from neglect or obstruction by supervisory authorities rather than from the lack of oversight controls (Vértice 2 Nov. 2003).
In an overview of public statements and legislation (declaraciones y legislación) related to anti-corruption efforts, Probidad pointed to the existence of government institutions with potential oversight and enforcement powers over financial institutions (Probidad n.d.b). These institutions include the Superintendency of the Financial System (Superintendencia del Sistema Financiero, SSF) and the Accounts Court (ibid.). Among the legislation available to the authorities to combat corruption are the Constitution, the Penal Code and the Law Against the Laundering of Money and Assets (Ley contra el Lavado de Dinero y Activos) (ibid.). This law, adopted in 1998, typifies money laundering as a crime and provides for the creation of the Financial Intelligence Unit (Unidad de Investigación Financiera, UIF) under the auspices of the Attorney General's Office (International Narcotics Control Strategy Report 2003 Mar. 2004). The UIF has been active since 2000 (ibid.) and, according to the International Narcotics Control Strategy Report 2003, has "adequate police powers to trace and seize assets" (ibid.). The National Civil Police (Policía Nacional Civil, PNC) is also empowered to seize assets, but reportedly has insufficient resources to do so (ibid.).
Other measures taken by the Salvadoran authorities to combat corruption include the drafting of a code of government ethics (International Narcotics Control Strategy Report 2002 Mar. 2003) and the creation of "systems for identifying, tracing, freezing, seizing, and forfeiting" assets derived from serious criminal activity (International Narcotics Control Strategy Report 2003 Mar. 2004). The authorities reportedly seized assets totalling US$4.23 million in 2003, a ten-per cent increase over the amount seized the previous year (ibid.).
As well, El Salvador is a party to the Inter-American Convention Against Corruption (International Narcotics Control Strategy Report 2002 Mar. 2003) and the Treaty of Mutual Legal Assistance in Criminal Matters, which provides for cooperation among all Central American countries with the exception of Belize (International Narcotics Control Strategy Report 2003 Mar. 2004). Additionally, the Salvadoran government is a signatory to the Inter-American Convention on Mutual Assistance on Criminal Matters, which requires "parties to cooperate in tracking and seizing assets" (ibid.).
This Response was prepared after researching publicly accessible information currently available to the Research Directorate within time constraints. This Response is not, and does not purport to be, conclusive as to the merit of any particular claim to refugee status or asylum. Please find below the list of additional sources consulted in researching this Information Request.
References
Diario Colatino [San Salvador]. 20 August 2003. "Flores y las 'maras' de su gabinete & afines deben ser investigados." International Narcotics Control Strategy Report 2003. March 2004. "El Salvador." United States Department of State. Washington, DC. International Narcotics Control Strategy Report 2002. March 2003. "El Salvador." United States Department of State. Washington, DC. Probidad, San Salvador. n.d.a. "La anticorrupción salvadoreña: una reseña." _____. n.d.b. "Declaraciones y legislación anticorrupción salvadoreña." Transparency International (TI). 2003. Annual Report 2003. _____. 2002. Annual Report 2002. United States (US). 31 October 2001. Department of Commerce, U.S. Commercial Service. El Salvador Country Commercial Guide FY2002. "Investment Climate Statement." Vértice [San Salvador]. 2 November 2003. Wilfredo Hernández, Mirella Cáceres and Erick L. Lemus. "Estados débiles, estados fuertes." Additional Sources Consulted
Publications: Central America Report [Guatemala City]. 2003, Latinamerica Press [Lima]. 2003, Latin American Regional Reports: Central America & the Caribbean [London]. 2003
Internet sites, including: American Chamber of Commerce of El Salvador, Amnesty International, Corte de Cuentas, Human Rights Watch, Organization of American States, United Nations Websites, United States Government Websites, Transparency International, World Bank
