Tuesday, 03 May 2022 14:44

SC sanctions ASTIC for refusing to cooperate in investigation

Written by Evelyn Alas

The Board of Directors (CD) of the Superintendencia de Competencia (SC)fined the Asociación Salvadoreña de Transportistas Internacionales de Carga (ASTIC) with US$87,600.00 for lack of collaboration by not submitting information requested by the institution in the framework of the ex officio initiation of preliminary proceedings in the Central American freight transportation market in order to seek indications of possible violations to the Competition Law (LC) related to anti-competitive practices in this essential sector for the supply chain in imports and exports of El Salvador and the region.

On february 14, the SC requested from ASTIC information related to the conformation, structure and organization of the association, the characteristics of the members of the association and details on the activities and/or policies carried out to improve efficiency and competitiveness in the sector, regarding service costs and the manner in which these are determined, among others.

The impact of transportation costs on international trade is equivalent to that of customs tariffs or the exchange rate, that is to say a decrease in transportation costs stimulates exports and imports.

Conversely, an increase in transportation costs makes imports more expensive, which raises inflation and, in the case of intermediate and capital goods, increases local production costs.

ASTIC was given 10 working days to submit all the information, but failed to do so. In spite of this, on march 4, 2022, the Superintendent of Competition granted the association a term of 3 business days to submit the requested documentation, warning them that, if they did not do so, a sanctioning procedure would be initiated against them for lack of collaboration.

This last term expired on March 9, 2022 and ASTIC did not submit any information or justifications in this regard.

According to the resolution of the CDSC, it is an attitude of deliberate omission on the part of the requested association, since it not only failed to comply with the duty of collaboration, but also failed to provide explanations and evidence on the obstacles that would have prevented it from complying with its obligation, despite having been granted two deadlines - the initial one and an ex officio extension.

ASTIC's failure to cooperate is typified in Article 38, paragraph 6 of the Competition Law, which establishes that the SC is empowered to impose fines of up to ten urban monthly minimum wages of the industry for each day of delay to persons who deliberately or negligently fail to provide the required cooperation or who do so incompletely.

The SC reminds all entrepreneurs in this sector that it is their duty to collaborate with the different requirements made in the framework of this previous action and invites all good entrepreneurs to continue competing and respecting the Law thus benefiting all consumers with competitive prices innovation and variety of products and/or sales conditions.