By Yolanda Magaña, originally published April 9, 2014 in Spanish, unofficial translation.
Representatives of the U.S. government reaffirmed yesterday that El Salvador does not meet three conditions to access Millennium Challenge Corporation Funds (MCC), the program known as Fomilenio II, which have to do with fighting money laundering, free trade and the investment climate .
James Gerard, director of MCC in El Salvador, said the Anti- Money Laundering and Asset Law must meet international standards and cited the inclusion of Politically Exposed Persons ( PEP). "Reforms were adopted in December (2013), but some aspects like the FATF ( the International Financial Action Law) determines those standards , for example, the current law does not adequately include some groups , including Politically Exposed Persons " he said. The PEP are senior officials or former officials. The FATF´s 12th recommendation is to pay special attention to financial entities.
A second U.S. condition is the failure to meet requirements of the Free Trade Agreement between the U.S., Central America and Dominican Republic ( CAFTA DR ) on the purchase of seeds by the government for 400,000 farmers in the country .
On January 9, 2014, the Legislature passed a temporary decree requested by the Ministry of Agriculture to buy seed without fulfilling the requirement of the Procurement and Contracts Law (Lacap) to create a purchasing committee. That day, Representative Orestes Ortez , of the FMLN, argued for the move because it benefits domestic producers.
Yesterday, the Minister of Economic Affairs, John Barrett, revealed that the Office of U.S. Trade Representative (USTR) has "concerns" that El Salvador has " not fully satisfied " CAFTA Chapter 9.
The third un-fulfilled condition is the reform of the Public Private Partnerships Act (APP) which the U.S. says not including water as a possible APP sector is a point of honor, taking into account that it is sensitive issue in El Salvador. "For us, it is not an issue (water)," Barrett said.
The MCC says that these three conditions have not been met of the five identified as priorities by the U.S. from the government´s 12-point action plan. Only two have been met: the Forfeiture Act and the creation of a new police division to investigate financial crimes.
APP Law: 5 KEY REFORMS
• U.S. believes that it is key for projects in public private partnership (PPP ) to only require approval in the Legislature.
A PUBLIC RECORD
• Create a transparent and public of all projects, accessible and for the public record.
• Create a language for increased clarity between the two groups, public and private.
• That the funds available for APP commitments rise above 1% of GDP.
• Strengthen Proesa, Government Agency for the Promotion of Exports and Investment, and give it autonomy. Water is not on the table.