Technology Forum

Technology Forum

Technology Forum

Published on june 19 , 2023

Foto de Benjamín  Valdez Iraheta

Benjamín Valdez Iraheta - Partner

In recent days the Embassy of the United States in El Salvador invited to participate in the El Salvador-United States Technology Forum: Advancing Innovation and Economic Growth. In the Forum several topics were discussed, such as: El Salvador and the Innovation Economy, Next Generation Connectivity as an Enabler of Innovation and Economic Growth, and Securing Digital Economies, Cybersecurity and Data Privacy.

It was striking to hear how all the topics were linked to new mobility and connectivity technologies. And for that it is necessary to understand the background. Currently the cutting-edge technology is 5G. The 5G designation refers to the fifth generation of mobile networks that we know. This new mobile technology is already here and has served to increase connection speed, minimize latency (web response time) and exponentially multiply the number of connected devices. In other words, with 5G technology we will be connected to everything, all day long, and in the shortest possible time. The most significant advance will come from the hand of speed and will allow, among others, the "internet of things", autonomous vehicles and the metaverse.

However, there is already talk of 6G, a technology that enables a faster network and fully incorporates Artificial Intelligence; this is achieved by reducing latency. According to the Forum panelists, these quantum leaps take place in approximately 10-year time spans, so we can expect 6G to be fully operational by 2030.

The implementation of each new technological standard requires huge global collaborations between research institutes, telecommunications giants, semiconductor manufacturers, hardware and software developers and, why not say it, governments.

As a corollary, it was brought up that by 2025 there will be a deficit of 4 million programmers worldwide, which opens many opportunities for the development of El Salvador, as long as progress is made in the regional harmonization of standards that allow the viability of 6G, providing accessible connectivity for most of the population, providing access to all technologies and managing to convert all this into economic impact.

The key to the issue, according to the speakers at the forum, is to leave the 1200 MHz radio local area network (RLAN) open and exempt from government licenses; in other words, not to privatize this bandwidth of the radio electric spectrum. And this involves public policies and the will of regulators so that the entire 1200 MHz spectrum is not subject to licenses and permits, but can be freely used by all interested parties; since it is the 1200 MHz band that is needed to supply these new technologies with adequate spectrum. Lower bandwidths cannot support these advances and those knowledgeable on the subject advocate that this bandwidth should be free to use, not subject to licenses or governmental control.

Hence the interest of this Forum and the presence of the Minister of Economy, the General Superintendent of Electricity and Telecommunications, as well as representatives of the Attorney General's Office and other government agencies. We will be waiting to see what attitude the Government adopts in this regard, if it leaves the 1200 MHz band open or if, on the contrary, it regulates it and subjects it to licensing.
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Last June, the new Instructions for the Prevention, Detection and Control of Money Laundering, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction, issued by the Attorney General's Office (FGR), under the framework of the Anti-Money Laundering Law (LCLDA), came into force. In its Article 2, the LCLDA establishes that every person must submit information to the FGR that allows demonstrating the licit origin of any transaction he/she carries out. This leads us to conclude, then, that every person must prepare the manual and internal policies for the implementation of a money laundering prevention system, and the continuous development of these.

What is the difference between the new Instructions and the prevention systems elaborated before it came into force? Article 4 of the Instructions requires individuals to apply a risk-based approach, which consists of identifying, assessing and understanding the risks of their sector and operation, and applying resources aimed at ensuring that they are effectively mitigated. Therefore, it is necessary to update the manuals and policies that companies had developed in the past, so that they have a risk-based approach and comply with the new provisions.

From the manuals prepared, it is necessary to comply with other obligations, among them, to develop due diligence and KYC policies to identify the final beneficiary of the company's business relationships, to detect and mitigate all unusual or suspicious transactions and report them to the FGR (not only cash transactions), to train employees, to keep a historical record of the files analyzed, and above all, to appoint a compliance officer.

Why is it important to comply? Article 8 of the LCLDA establishes that, if there is any encumbrance due to negligence, impertinence or ignorance of the directors or employees of the companies, there will be a sanction of two to four years in jail.

Therefore, as a Firm we recommend:


We offer you our services, in order to comply with these legal obligations, so that your company has the peace of mind and support of a money laundering prevention system.

For more information about how this may affect your company, please contact our specialized team at bvaldez@bvaldezlaw.com  or  benjamin@bvaldezlaw.com