3. Each reserve establishes the following elements:
a) Sector refers to the general sector in which the reserve has been taken;
b) Sub-sector refers to the specific sector in which the reserve has been taken;
c) Industrial Classification refers, where applicable, to the activity covered by the reservation, in accordance with national industrial classification codes. The Central Product Classification (CPC) is for illustrative purposes only;
d) Type of Reserve specifies the obligation mentioned in paragraph 2 on which a reserve is taken;
e) Level of Govemment indicates the level of government that maintains the measure on which the reservation is taken;
f) Measures identifies the laws, regulations or other measures, as qualified, where indicated, by the Description element, for which the reservation has been taken. A measure referred to in the Measures element:
i) means the measure, as modified, continued or renewed, as of the date of entry into force of this treaty, and
ii) includes any action subordinate to, adopted or maintained under the authority of, and consistent with, such action;
g) Description sets out the liberalization commitments, where these have been taken, as of the date of entry into force of this treaty, and the remaining non-conforming aspects of the existing measures on which the reservation is taken; and
h) Reduction Schedule indicates liberalization commitments, when made, after the date of entry into force of this treaty.
4. Ini nterpreting a reservation, all elements of the reservation shall be considered. A reservation shall be interpreted in the light of the relevant provisions of the chapter against which the reservation is taken. To the extent that:
a) the Reduction Schedule element establishes a gradual reduction of the non-conforming aspects of the measures, this element shall prevail over all other elements;
b) the Measures element is qualified by a liberalization commitment in the Description element, the Measures element, as qualified, shall prevail over all other elements; and
c) the Measures element is not so qualified, the Measures element shall prevail over all other elements, unless any discrepancy between the Measures element and the other elements, considered as a whole, is so substantial and significant that it would be unreasonable to conclude that the Measures element should prevail; in this case, the other elements shall prevail to the extent of that discrepancy.
5. Where a Party maintains a measure requiring a service supplier to be a national, permanent resident or resident in its territory as a condition for the supply of a service in its territory, a reservation on a measure with respect to Articles 10-03, 10-04 or 10-05, or Articles 11-05, 11-06 or 11-07, shall operate as a reservation with respect to Articles 14-04, 14-05 or 14-07 with respect to such measure.
6. Notwithstanding the provisions of article 14-09 1 (a), (b) and (c), exclusively articles 14-04, 14-07 or 14-08, shall not apply to the activities listed by El Salvador in Section "B" of its list of reservations contained in this Annex, during the periods established in the respective reservations.
Once the above-mentioned periods have elapsed, the measures in force that El Salvador maintains in the listed activities, which are incompatible with Articles 14-04, 14-07 or 14-08, shall be consolidated in Section "A" of its list of reservations contained in this Annex, and shall be notified by El Salvador at the first meeting of the Committee on Cross-Border Trade in Services and Investment to be held after the expiration of the period established in the corresponding reservation.
El Salvador may not require, pursuant to any measure adopted after the entry into force of this Agreement and covered by Section "B" of El Salvador's Schedule, an investor of Mexico to sell or otherwise dispose of an investment existing at the time the measure becomes effective.
6 bis. Each reservation in Section "B" of the list of reservations of El Salvador contained in this Annex establishes the following elements:
a) Sector refers to the general sector in which the reserve has been taken;
b) Sub-sector refers to the specific sector in which the reserve has been taken;
c) Industrial Classification refers, when pertinent to the activity covered by the reservation, according to the national industrial classification codes. For the purposes of Section "B" of the Schedule of El Salvador, CPC shall be understood as the digits of the Central Product Classification, as established by the United Nations Statistical Office, Statistical Documents, Series M, No. 77, Provisional Central Product Classification, 1991.
d) Type of Reserve specifies the obligation mentioned in paragraph 6 on which a reserve is taken;
e) Level of Government indicates the level of government that maintains the measure on which the reservation is taken;
f) Measures in Force identifies, for transparency purposes, the measures in force that apply to the sector, subsector or activities covered by the reservation, and that may be modified within the time period indicated in each of the reservations;
g) Description describes the coverage of the sector, sub-sector or activities covered by the reserve; and
h) Term establishes the period, as of the entry into force of this treaty, in which the articles reserved to the listed activities will not apply.
In the interpretation of the reservations contained in Section "B" of the list of reservations of El Salvador contained in this Annex, all elements shall be considered. The Term element in first place and the Description element in second place shall prevail over the other elements.
Annex I. Schedule of El Salvador
Section A.
Sector: All Sectors
Subsector:
Industrial Classification:
Type of Reservation: National Treatment (Article 14-04) Most-Favored-Nation Treatment (Article 14-05)
Level of Govemment: National
Measures: Commercial Code, Article 358
Law of the Superintendency of Corporations and Commercial Companies; Title Ill, Foreign Corporations, their Branches or Agencies, Articles 15, 18 and 22.
Description: Investment
Foreign companies wishing to carry out commercial activities in El Salvador or to establish agencies or branches, must submit an application for authorization to the Superintendency by means of a general and specially constituted attorney-in-fact; they must also constitute and maintain in the country sufficient assets for the commercial activity to be carried out in the Republic. In accordance with the requirements of the law, the office that exercises the surveillance of the State, if it deems it convenient, may grant authorization for the company to exercise commerce in the Republic. In this case, it will indicate a term for the company to begin its operations and will order the registration of the same in the Registry of Commerce of the place where the company establishes its main office. The most favored nation treatment exception will only apply with respect to Central American investors or investments.
Reduction Schedule: None
Sector: All sectors
Subsector:
Industrial Classification:
Type of Reservation: National Treatment (Article 14-04) Most-Favored-Nation Treatment (Article 14-05)
Level of Govemment: National
Measures: Constitution of the Republic, Articles 95 and 109
Description: Investment
The ownership of rural property may not be acquired by foreigners in whose countries of origin Salvadorans do not have equal rights, except in the case of land for industrial establishments.
Reduction Schedule: None
Sector: All sectors
Subsector:
Industrial Classification:
Type of Reservation: National Treatment (Article 14-04) Most-Favored-Nation Treatment (Article 14-05) Senior Management and Boards of Directors (Article 14- 08)
Level of Govemment National
Measures: Constitution of the Republic, Article 115 Law Regulating the Practice of Commerce and Industry, Articles 3 and 4 Regulations of the Law Regulating the Practice of Commerce and Industry, Articles 2 and 10 Commercial Code, Article 6
Description: Investment Trade, industry and the provision of small services are the exclusive patrimony of Salvadorans by birth and natural Central Americans; consequently, foreign investors will not have access to such activities. Foreigners may not hold positions as administrators, directors, managers or representatives of small companies, whether commercial, industrial or service companies. The most favored nation treatment exception will only apply with respect to Central American investors or investments.
Reduction Schedule: None
Sector: Cooperative production associations
Subsector:
Industrial Classification:
Type of Reservation: National Treatment (Article 14-04)
Level of Govemment: National
Measures: Regulations of the General Law of Cooperative Associations; Title VI, Chapter I, Article 84.
Description: Investment
In production cooperative associations, at least three-quarters of the number of members must be Salvadoran.
Reduction Schedule: None
Sector: Fishing
Subsector:
Industrial Classification:
Type of Reservation: National Treatment (Articles 10-04 and 14-04). Most-favored-nation treatment (Articles 10-03 and 14-05) Local presence (Article 10-05)
Level of Govemment: National
Measures: Constitution of the Republic, Article 115
Law for the Promotion and Guarantee of Foreign Investment, Article 5 General Law on Fishing Activities, Articles 25, 26, 28, 37, 38 and 40
Regulations for the Application of the General Law on Fishing Activities, Articles 30 and 32
Description: Cross Border Services and Investment
Artisanal fishing may be exercised exclusively by: a) Salvadoran and Central American natural persons of origin residing in the country; b) cooperative associations; c) commercial companies. The mercantile societies, in order to be able to engage in artisanal fishing must prove that in the society participate or have shares in more than 90% Salvadoran natural persons and that, more than 60% of their partners, are artisanal fishermen by trade.
Technified maritime fishing in the inshore zones for pelagic and demersal species, and technified fishing in the offshore zone for demersal species, may be carried out by: a) Salvadoran and Central American natural persons of origin; b) associations cooperative associations; cc) the societies (9) Salvadoran mercantile companies in whose capital Salvadoran persons participate or have shares in more than 50%; this last circumstance must be proven by any reliable means of proof, in the opinion of the General Directorate.
Foreign governments may not participate or hold shares in companies that wish to engage in artisanal, technified fishing in the inshore zone for pelagic and demersal species; and in the offshore zone for demersal species.
All vessels engaged in artisanal and technified fishing must have Salvadoran registration.
Reduction Schedule: None
Sector: Fishing
Subsector: Aquaculture
Industrial Classification:
Type of Reservation: Local presence (Article 10-05)
Level of Govemment: National
Measures: General Law on Fishing Activities, Article 46.
Description: Cross-border services
Any natural or juridical person, foreigner with definitive residence in the country, may engage in aquaculture.
Reduction Schedule: None
Sector: Communications services
Subsector: Audiovisual services
Industrial Classification: CPC 871. Advertising services. CPC 96111 - Services related to promotional or advertising activities. CPC 9613. Radio and television services
Type of Reservation: National Treatment (Article 10-04) Most favored nation treatment (Article 10-03) Performance requirements (Article 14-07)
Level of Government: National
Measures: Decree of provisions to regulate the exploitation of works of an intellectual nature by means of public communication and the participation of Salvadoran artists in public shows. Legislative Decree No. 239, dated June 9, 1983, published in Official Gazette No. 111, Volume 279, dated June 15, 1983 Decree No. 18, Substitution of Articles 1 and 4 of Legislative Decree No. 239, dated June 9, 1983, published in Official Gazette No. 7, Volume 282, dated January 10, 1984.
Description: Cross Border Services and Investment
Commercial advertisements used in the country's public media must be 90% produced and recorded by national elements.
Commercial advertisements produced or recorded by Central American elements may be used in the media of El Salvador, provided that in the country where they originate the same reciprocity is proved for commercial advertisements produced or recorded in El Salvador. Commercial advertisements that do not meet the requirements mentioned in the two preceding paragraphs may only be broadcast in the countryâs public media, if they are advertisements of international products, brands or services imported or produced in the country under license and upon payment of a compensation fee of five thousand colones.
Reduction Schedule: None
Sector: Communications services
Subsector: Audiovisual services
Industrial Classification: CPC 9613. Radio and television service
Type of Reservation: National Treatment (Article 10-04)
Level of Govemment: National
Measures: Regulations for the Establishment and Operation of Radio Broadcasting Stations, Articles 16, 17 and 66.
Description: Cross-border services
Broadcasting stations must be managed by responsible operators, duly authorized Salvadorans by birth.
To be a radio broadcaster you must be a Salvadoran citizen.
Reduction Schedule: None
Sector: Communications services
Subsector: Audiovisual services
Industrial Classification: CPC 75241. Television program broadcasting services. CPC 75242 - Radio program broadcasting services
Type of Reservation: National Treatment (Article 14-04)
Level of Govemment: National
Measures: Telecommunications Law, Article 123
Description: Investment
Concessions and licenses for free reception broadcasting services shall only be granted to Salvadoran natural persons by birth or Salvadoran legal entities. In the case of Salvadoran juridical persons, the capital stock must be constituted with at least 51% of Salvadorans. This capital stock and its reforms must be reported to the General Superintendence of Electricity and Telecommunications (SIGET).
Reduction Schedule: None
Sector: Distribution services
Subsector: Intermediary services, wholesale and retail trade services.
Industrial Classification: CPC 622. Wholesale trade services. CPC 631. Retail food sales services. CPC 632. Retail sale services of non-food products
Type of Reservation: National treatment (Articles 10-04 and 14-04) Local presence (Article 10-05).
Level of Govemment: National
Measures: Constitution of the Republic, Article 95
Law for the Establishment of Free Stores in the Maritime Ports of El Salvador, Article 5
Description: Cross Border Services and Investment
Permits to organize commercial centers or establishments in the country's seaports shall be granted by the Minister of Finance. The location of the pavilions destined for such purpose shall be decided by the Autonomous Port Executive Commission (CEPA).
Natural or juridical persons may apply for the permits referred to in the preceding paragraph. The former must be Salvadoran, of legal age and of proven responsibility and honesty. In granting the permits, preference shall be given to Salvadorans by birth and Salvadoran juridical persons.
Reduction Schedule: None
Sector: Recreational, cultural and sporting services (except audiovisual services).
Subsector: Entertainment services (including theater, bands and orchestras and circuses).
Industrial Classification: CPC 96191 - Artistic services of theatrical producers, theater troupes, theater singers, bands and orchestras. CPC 96192 - Services provided by authors, composers, sculptors, entertainers and other artists, on an individual basis CPC 96194 - Circus, amusement park and other similar amusement services. CPC 96199. Other entertainment services n.e.c.
Type of Reservation: National Treatment (Article 10-04)
Level of Government: National
Measures: Migration Law, Articles 62-A and 62-B.
Legislative Decree No. 382 dated May 29, 1970; published in the Official Gazette No. 64, Volume 227, dated April 10, 1970 Executive Decree No. 16 dated May 12, 1970; published in the Official Gazette No. 87, Volume 227, dated May 18, 1970.
Description: Cross-border services
An artist is any person who performs individually or in the company of another or others, for the performance of music, singing, dancing, speech, show entertainment, whether he/she does it personally (live), in front of a more or less numerous audience, or by means of radio or television.
No foreign artist may perform remunerated acts of any kind without the express authorization of the Ministry of the Interior, which will previously hear the illustrative opinion of the legally established union (within 15 days), corresponding to the artistic activity to which the interested party is dedicated. Foreign artists shall pay in advance to the respective union a performance fee equivalent to 10% of the gross remuneration they receive in the country; if the advance payment is not possible, the contractor will have to render sufficient "caution" in favor of the respective union.