Administrative Law in El Salvador

Administrative Law in El Salvador

Administrative Law in El Salvador

Published on september 06 , 2023

Foto de Kelly Melissa Cruz Benítez

Kelly Melissa Cruz Benítez - Legal Collaborator

Despite going unnoticed, our daily interaction with the Public Administration is enriched with a series of rights and principles of which we are not always aware. Administrative Law refers to the set of rules, principles and regulations that govern the organization, structure and operation of public administration in the country. It is a branch of public law that deals with regulating the relations between the State and the citizens, as well as the relations between the different administrative bodies and entities. In El Salvador, Administrative Law is mainly regulated by the Constitution and the Law of Administrative Procedures, as well as by various other laws and regulations that establish the rights and obligations of the public administration and citizens in their relations with it.

The Public Administration in our legal system is made up of any body that materially exercises the public function, as established in Article 2 of the Administrative Procedures Law (LPA). The administrative function can be understood as the state activity at the service of the general interests that is carried out through powers or authorizations -certainly limited- that the law confers to the organs that perform this function. For example, municipal ordinances give the mayor's office the power to impose fines in cases of non-compliance with municipal rules or norms, in order to protect the interests of the municipality.

Likewise, the legal framework of Salvadoran Administrative Law regulates public procurement, establishing the principles and procedures to be followed in the procurement of goods and services by the public administration. It seeks to guarantee transparency, competition and efficiency in the use of public resources.

The Public Procurement Law of El Salvador establishes the legal framework and procedures to be followed for the procurement and contracting of goods, works and services by public institutions in the country. The main objective of this law is to promote transparency, competition and efficiency in public procurement, ensuring the proper use of state resources and equal opportunities for suppliers interested in participating in government contracting processes.

The law establishes different procedures to carry out public procurements, such as public bids, price contests and electronic auctions, among others. These procedures vary according to the value and complexity of the procurement. They are based on fundamental principles such as transparency, competition, equality, economy, efficiency and accountability. The National Directorate of Public Procurement (DINAC) is the body in charge of regulating and supervising the public procurement system in El Salvador. DINAC is responsible for establishing policies, standards and procedures for public procurement, as well as providing training and technical assistance to public institutions and suppliers. The law establishes the obligation of suppliers interested in participating in public procurement processes to register in the Registro Único de Proveedores del Estado (RUPES), administered by DINAC. Registration is required for suppliers to participate in public procurement. Finally, the law establishes that procurement processes must be transparent and published in the Electronic Public Procurement System of El Salvador (COMPRASAL), an online platform that allows public access to information on public procurement.
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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