EL SALVADOR

SUBSIDY PROGRAMS: GENERAL
Last Reviewed December 31, 2000

Effective February 15, 2000, Import Administration began publishing "Decision Memos" to reduce the size of antidumping and countervailing duty Federal Register notices. In cases in which a decision memo was published, you will find a link to the memo listed below.

In addition, in the following programs, in instances below in which a proceeding was a Sunset Review, you will see the letters SR after the product name.

COUNTERVAILABLE SUBSIDY PROGRAMS

The subsidy programs listed below have been investigated by the Department and have been found to be "countervailable" in the cases listed and during the periods reviewed based on the riteria established in the Tariff and Trade Act of 1930, as amended. Please refer to this Act for further detail of the criteria applied. In addition, you may click on the cases listed below the subsidy program title for a full explanation of the Department's analysis in those cases.

Income Tax Exemption For Export Earnings

Operators For Jalousie And Awning Windows (1985) 51 FR 22099 (6/18/86-prelim);   51 FR 41516 (11/17/86-final)

Under Chapters 2, 3 and 4 of the Export Promotion Law of 1974, approved exporting companies do not pay income tax on income earned from exports to destinations outside the Central American Common Market. Because this income tax exemption is limited to income derived from exports, this confers a countervailable benefit.

SUBSIDY PROGRAMS FOUND TO BE NOT COUNTERVAILABLE

The subsidy programs listed below have been investigated by the Department and have been found to be "not countervailable" in the cases listed and during the periods reviewed based on the criteria established in the Tariff and Trade Act of 1930, as amended. Please refer to this Act for further detail of the criteria applied. In addition, you may click on the cases listed under the subsidy program title for a full explanation of the Department's analysis in each case where the subsidy program has been examined

Exemptions To Exporters On The City Tax On Assets (Fiscal Stamp Tax)

Operators For Jalousie And Awning Windows (1985) 51 FR 22099 (6/18/86-prelim);   51 FR 41516 (11/17/86-final)

A 5% stamp tax is levied on the value of sales and other commercial and legal activity. Export sales are specifically exempt from the stamp tax. Insurance on exports is subject to the stamp tax. The amount of the stamp tax exemption equals the amount of stamp tax due on each export sale. Because the amount of the exemption is not greater than the amount of stamp tax due, the program is not countervailable.

SUBSIDY PROGRAMS DETERMINED NOT TO EXIST

The following subsidy programs were alleged by the petitioning industries and were investigated by the Department. However, during the investigation we found no evidence that such programs actually existed. If you click on the cases listed under the subsidy program title, you will be linked to each case in which the subsidy program was referenced. It is possible that, while the program named did not exist, a similar program having a different name actually was investigated. If this is the case, you will find that program listed elsewhere in this library.

Asset Tax Exemption

Operators For Jalousie And Awning Windows (1985) 51 FR 22099 (6/18/86-prelim);   51 FR 41516 (11/17/86-final)

It was alleged that certain persons and companies who qualify because of export activities are not required to pay taxes on their assets and net capital worth. We discovered that all companies owned by Salvadorans and domiciled in El Salvador are not required to pay this tax, regardless of whether they exported.

Export Credit Insurance

Operators For Jalousie And Awning Windows (1985) 51 FR 22099 (6/18/86-prelim);   51 FR 41516 (11/17/86-final)

This program authorizes the provision of export credit insurance for commercial and political risks. This provision of the law was never implemented.

Pre-Export And Export Credit Guarantees

Operators For Jalousie And Awning Windows (1985) 51 FR 22099 (6/18/86-prelim);   51 FR 41516 (11/17/86-final)

Chapter 13 of the 1974 Export Promotion Law authorizes the provision for pre-export and export guarantees. This law was never implemented through applicable regulations.

Pre-Export And Export Loans

Operators For Jalousie and Awning Windows (1985) 51 FR 22099 (6/18/86-prelim);   51 FR 41516 (11/17/86-final)

Pre-export loans were allegedly provided under Chapter 13 of the 1974 Export Promotion Law; however, there were never any implementing regulations for Chapter 13.

Tax Credit Certificate

Operators For Jalousie And Awning Windows(1985) 51 FR 22099 (6/18/86-prelim);   51 FR 41516 (11/17/86-final)

Under this program, exporters were eligible for certificates, as a percentage of exports, to be used for payment of taxes owed.

SUBSIDY PROGRAMS THAT HAVE BEEN TERMINATED

The subsidy programs listed below have been investigated by the Department and have been found to have been terminated based on the criteria established in the Tariff and Trade Act of 1930, as amended. Please refer to this Act for further detail of the criteria applied. In addition, you may click on the cases listed below the subsidy program title for a full explanation of the Department's analysis in each of these cases.

Preferential Exchange Rate Treatment For Exporters

Operators For Jalousie And Awning Windows (1985) 51 FR 22099 (6/18/86-prelim);   51 FR 41516 (11/17/86-final)

Under El Salvador's two-tier exchange rate system, exporters were alleged to purchase imports at the lower official exchange rate, while the returns from their exports were converted using the higher parallel exchange rate. A single rate system was established in June 1985, effectively terminating this benefit.

SUBSIDY PROGRAMS THAT HAVE NOT BEEN USED

When potential subsidy programs are investigated and found not to be used by the companies being investigated, the Department makes no determination as to their countervailability. If you click on the cases listed under the subsidy program title, you will be linked to each case in which the subsidy program was referenced.

Central America Convention For Fiscal Incentives

Operators For Jalousie And Awning Windows (1985) 51 FR 22099 (6/18/86-prelim);   51 FR 41516 (11/17/86-final) not used

This treaty provides subsidies to manufacturers, producers and exporters.

Duty Exemption On Imported Inputs Not Physically Incorporated Into Exported Products

Operators For Jalousie And Awning Windows (1985) 51 FR 22099 (6/18/86-prelim);   51 FR 41516 (11/17/86-final) not used

Under chapters 2, 3 and 4 of the 1974 Export Promotion Law, materials used by approved exporters could be exempt from import duty.

Exemptions To Exporters On The City Tax On Assets

Operators For Jalousie And Awning Windows (1985) 51 FR 22099 (6/18/86-prelim);   51 FR 41516 (11/17/86-final) not used

Under parts B, C, and D of the Ley de Validad, municipalities charge a monthly tax on the value of total assets held at the end of each year by corporations, trusts, professionals and sole proprietors.

Exemptions From Taxes On Imported Capital Equipment Used For Export Production

Operators For Jalousie And Awning Windows (1985) 51 FR 22099 (6/18/86-prelim);   51 FR 41516 (11/17/86-final) not used

Under Chapters 2, 3 and 4 of the 1974 Export Promotion Law, approved exporters are entitled to import duty exemptions fro imported capital equipment, including machinery, equipment, spare parts and accessories.

Operation In A Bonded Area

Operators For Jalousie And Awning Windows (1985) 51 FR 22099 (6/18/86-prelim);   51 FR 41516 (11/17/86-final) not used

Under chapters 2 and 3 of the 1974 Export Promotion Law, exporting companies located in bonded areas were entitled to special duty-free privileges.