The Superintendant of the Financial System (Superintendicia del Sistema Financiero, SSF) was created in December 1990 with the passing of the Organic Law for the Financial System Regulatory Agency (Ley Organica de la Superintendencia del Sistema Financiero) (Tradeport 1999). The SSF is an autonomous agency that audits, authorizes, and supervises all foreign and domestic financial institutions operating in El Salvador (ibid.).

In regard to the dealings between the SSF and INSEPRO/FINSEPRO, the Central America Report stated that:

[I]n 1993, the [SSF] discovered anomalies in financial transactions and imposed several sanctions, but the two financial organizations in question continued to conduct illegal transactions and were intervened in July, 1997 (22 June 2001).

Further documentation reveals that the SSF, "following orders of higher ups, postponed [its] intervention and did not halt the operations of the two financial institutions until losses were irrevocable" (Proceso 3 Feb. 1999). Moreover, Salvadoran president Armando Calderon Sol fired the head of the SSF, Rafael Rodriguez Loucel, "for not acting fast enough to prevent the illegal transactions," and "[o]n July 23 he [Loucel] was arrested as an alleged accomplice in the fraud" (Central America Report 24 July 1997). Subsequently, Bishop Gregorio Rosa Chavez commented that the removal of Loucel had some "political background" (trasfondo politico) (La Prensa 7 July 1997).

In response to the fraud perpetrated by INSEPRO/FINSEPRO,

Legislation regulating the [SSF] was changed to give it greater power to investigate suspected anomalies in banking operations. The previous law, passed in 1990, only allowed the SSF to inspect registered companies and not illegal ones, such as FINSEPRO (Central America Report 31 July 1997).

For more information on the investigation conducted on the operations of INSEPRO/FINSEPRO and its outcome, please see SLV39336.E of 29 August 2002 and SLV32800.E of 23 September 1999.

This Response was prepared after researching publicly accessible information currently available to the Research Directorate within time constraints. This Response is not, and does not purport to be, conclusive as to the merit of any particular claim to refugee status or asylum. Please find below the list of additional sources consulted in researching this Information Request.

References

Central America Report. 22 June 2001. Vol. 28, No. 23. "Fraud Case Puts Justice System Into Question."

_______. 31 July 1997. Vol. 24, No. 29. "Fraud Provokes Financial Reforms."

_______. 24 July 1997. Vol. 24, No. 28. "Double Dealing in Savers Security."

La Prensa [San Pedro Sula]. 7 July 1997. "El Salvador sacudido por nuevo escandalo financiero que involucra a Arena." http://www.laprensahn.com/caarc/9707/c07003.htm [Accessed 29 Aug. 2002]

Proceso [San Salvador]. 3 February 1999. "Weak in the Knees When it Comes to the Banking System." (NEXIS)

Tradeport. 1999. "El Salvador: Trade and Project Financing." http://www.tradeport.org/ts/countries/elsalvador/financing.html [Accessed 22 Aug. 2002]

Additional Sources Consulted

IRB Databases

NEXIS

World News Connection

Internet sites

El Diario de Hoy [San Salvador]

La Prensa Grafica [San Salvador]

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