El Salvador is rapidly approaching the authoritarianism that Nicaragua is experiencing, human rights defender warns

Celia Medrano warns that the Nicaraguan regime took twenty years to forge, while the Salvadoran regime has only been two years old and shows a rapid pace.

Celia Medrano, a renowned human rights defender, is not optimistic: she sees a democratic debacle and a government that becomes increasingly aggressive against those who question it. In a conversation with El Diario de Hoy, he expressed his concern about the growing attacks on independent journalism, the opposition, and drew a discouraging simile between El Salvador and the crisis in Nicaragua.

Vice President Félix Ulloa said that if the government won a parliamentary majority, it would be less aggressive. Do you think this has happened?
In my opinion, the power groups that control the Executive Branch have not ceased to be confrontational, in fact they have escalated the level of confrontation, because now they have the power for that confrontation and attacks on any critical sector classified by them as opponent have legal retaliation. So they have not only maintained hate speech, confrontational speech, but have escalated it into legal action or acted on what would be called a legalistic foundation of things.

Like what?
I see it in the expulsion of the editor of El Faro. The answer has been that he did not have a work permit and was working on a tourist visa, a legalistic argument for one more clear retaliation against El Faro and not even with the sufficient legal structure. Because if he was already processing his permit, what corresponded was a call and a fine. Not your removal, not your deportation.

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Do you see it also in the supposed anti-corruption fight of the government?
With this there is a practice of escalating retaliation, hate speech and to legal levels, such as the commission that investigates NGOs who have received money from the Legislative Assembly. Not all of them would necessarily be facing a situation of corruption. However, it is necessary to wonder if the NGO linked to the deputy (Guillermo) Gallegos would be investigated, because it also responds to the previous efforts.

Guillermo Gallegos has been singled out for various acts of corruption.
Photo EDH / Jessica Orellana

Do you think that this will institutionalize the closure of critical spaces?
Nicaragua is a very good example of how far such legislation can scale. What was previously only an official speech issued from the Executive Power, now is aggravated because they have control of the Legislative, the Judicial and that they have their own prosecutor.

Do you see a commitment from this government to human rights?
The proposed Law for the Protection of Human Rights Defenders was one of the almost 100 proposed laws that were filed. It will depend on the mobilization of the organizations of human rights defenders to return the issue to the table, as has happened with the proposal, with the issue of the human right to water. At least that the subject returns, that the Assembly has the urgency to approach the subject again. At the hearing generated by the Inter-American Commission on Human Rights two weeks ago, the State was not present. It is the first time in decades that there is no government representation.

Why?
They argued that because there was disproportionality, there was a large presence of non-governmental organizations. It remained practically unnoticed by the national opinion in the country that the Government in decades, for the first time and in the way of Venezuela, in the way of Nicaragua, does not attend a convocation of the Inter-American Commission on Human Rights. This is serious and that reflects their level of political will with regard to human rights.

Nayib Bukele, President of El Salvador. / Photo EDH Yessica Hompanera

In what sense?
For me, the current government has a biased application of what it understands as people’s rights: it depends on who the violator is and it depends on who is the person to whom the will or the right is given. Thus, the issue of universality, of complementarity, of the right to non-discrimination with respect to human rights cannot be worked on.

For example?
A police inspector beats a journalist while complying with his task of documenting an event related to disappearances and murders, homicides and is filmed, but the prosecutor publicly assures that the video is not enough to generate a process. Let’s think what would have happened if it had been the other way around and a journalist had aggressively exceeded the order not to stop, would have pushed the policeman and that would have been filmed. The scenario would have been totally different. So this government is applying the law according to the convenience of who violates the law, who violates human rights or who is the victim. If the victim is a person not related to the official narrative, the protection mechanisms are not activated.

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How do you see the right to dissent?
There is an issue of prosecuting the protest and criminalizing dissent. I insist once again that we must see ourselves in the mirror of Nicaragua. It is the closest we have and is the reflection of what we can become. Of course, Nicaraguan leaders tell us that El Salvador is going much faster. Ortega took 20 years to have what he has now. We are in a matter of two or three years in very similar scenarios. And when democratic spaces are closed, the first to be hit are human rights defenders and independent journalism. And currently they are the next enemy. Enough analysts have already been heard to argue that within the populist discourse, staying in power requires enemies, inventing enemies.

This government offered modernity and freshness. Is it really that?
History repeats itself, again we are in scenarios where democratic spaces begin to close. And the population would begin to experience firsthand the consequences of the closure of those spaces. The lack of controls between the organs of the State, for example, is a lesson of centuries. And the population is going to wake up, realizing what is really happening. Nowadays, it seems that they only removed some magistrates and put others, but one thing is the defense in the abstract of the republican system and the democratic institutionality and another is when I live the consequences directly when that translates into the egg carton , milk, oil, gas are increasing significantly.

Is there something to do about it?
I argue that it is too late to be able to reverse the damage that has already been caused to this democracy, to this weak democratic institutionality built since the signing of the Peace Accords. Many say that just as we punished Arena, the FMLN and the Christian Democratic Party 40 years ago, we are going to punish New Ideas, but we do not realize that they have been given so much power that they are simply going to change the rules of the game and the same Constitution. That can mark us a scenario of no less than 20 years to recover what was lost.

Do you see any simile with our history?
We could compare the current moment with the end of the 60s, where protests began to be repressed, there were electoral fraud, it no longer mattered that you resorted to the vote to want to change things, because the entire structure was already designed for electoral fraud . But the proof is very old that the more repression is generated, the discontent accumulates and sooner or later the situation explodes.

Message during a civil rally at the Monument to the Constitution. Photo EDH / Menly Cortez

Is it valid for you to speak of a dictatorship in El Salvador?
What happens is that we want to talk about military dictatorships in the style of Pinochet, in the style of Duvalier or Somoza. Modern dictatorships do not necessarily have to have the same profile, which is why it is very difficult to speak of a dictatorship in El Salvador. Although I do not doubt that the authoritarian and autocratic demeanor of the groups that control the Government. That we are heading towards a dictatorship, I do not dispute it, but it would not be one of those who would affirm that there is already a dictatorship.

Don’t you see a return of the armed forces to politics?
Yes, there is a militarization of politics and a very large militarization of public activity. The military have once again had powers that they should never have had. And the incident that occurred with the journalist Beltrán and the inspector (of the PNC) raises us the concern that the attack on someone is justified. And suddenly an armed policeman who beats a journalist is declared a national hero. This boasting in this way to the institutional armed sector, the Armed Forces and the Police is extremely serious. It takes us to times when we live in conflict.

What tools are there from the international community to stop the authoritarian drift?
It is a question that can have a very frustrating answer. For me, a very strong indicator has been that there was no state representative at the meeting that was called by the Inter-American Commission on Human Rights. Unfortunately, until there is a sufficient orchestra of the international community that results in other types of sanctions. The mirror of Nicaragua gives us the alerts. We must reflect on what is happening.

And in this process, do you think there will be a large exodus of Salvadorans?
Yes, it is the next point. We can no longer only speak of forced migration caused by non-state actors with the license and responsibility of the State. Now we are already learning about the forced migration of people who are talking about political persecution in this country. Then we will once again have requests for refugee and asylum from actors who will state that they are the object of persecution, not only from non-state entities such as gangs or organized crime, but also from State agents for belonging to a political party, for being a journalist, for be from a non-governmental organization qualified by this government as an opponent. There is nothing that tells us that this will decrease if people continue to perceive this political crisis in their daily lives.

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Prosecutor’s Office hands over the building confiscated from the ARENA party to Conab

From today, the property will be administered by the National Council for the Administration of Assets CONAB.

The Office of the Attorney General of the Republic (FGR) delivered today to the State the headquarters building of the National Executive Council of ARENA, COENA, located in San Salvador, the property was seized during the investigations of the case called Taiwan.

From today, the property will be administered by the National Council for the Administration of Assets (CONAB).

“This is the culmination of the diligence that began a few weeks ago against ARENA. It is the extinction of assets to try to recover the money diverted to the accounts of the ARENA party for the Antonio Saca campaign, ”explained the prosecutor imposed by the ruling party Rodolfo Delgado.

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The Prosecutor’s Office today handed over to the State the building that houses the National Executive Council of ARENA, COENA, located in San Salvador, which was seized during the investigations of the case called Taiwan. Photo EDH / Francisco Rubio

On June 2, the Public Ministry seized two properties from that party, including the COENA headquarters; also, he made the preventive scoring of 17 vehicles.

In addition to the seizures of real estate, the Prosecutor’s Office froze 2.9 million dollars of the political debt of the aforementioned political institute for the last elections.

With this action, the Prosecutor’s Office intends to recover the funds donated to El Salvador by the Government of China-Taiwan.

On the same day of the embargo, the party leadership, through a statement, stressed that “El Salvador is facing an imminent danger towards a dictatorship” by pointing out that both President Bukele and the Prosecutor imposed and the “police bowed to him” They try to divert attention from the acts of corruption linked to the current government, all this in order to “not face the Salvadoran population and the international community.”

In addition, the text emphasized that the party’s headquarters “was kidnapped and threatened with the purpose of keeping us silent,” for which it urged the president to “show his face” and dismiss the officials of his cabinet indicated in the Engel List. .

In addition, the director of Legal Affairs of ARENA denounced on that occasion that they did not have in view any document that would protect the procedure and that no judge executing the embargoes was present at the headquarters of ARENA.

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Electricity rates will rise between 6% and 17% from today in El Salvador

One of the reasons for this rise is because biomass power generation fell in May, which has required a greater dependence on oil, which is also on the rise.

The price of electric power for the residential area will rise between 6% and 17% as of this quarter compared to the previous one for CAESS and Delsur clients, respectively. These are the two main energy distributors in the country that provide service to more than 1 million households and concentrate more than 2 million customers (between households and companies).

According to the tariff schedules of these companies, published in the main newspapers on July 15, the price per kilowatt / hour for CAESS customers that consume up to 99 kilowatts will go from $ 0.134 in the previous quarter to cost $ 0.1494 from July ; and for Delsur customers, the cost per kilowatt hour that was previously $ 0.140 will now go to $ 0.1581.

These same values ​​are similar for homes that consume more than 100 kilowatt hours and for the general use rate.

And if the increase since January is taken into account, the increase in the price of energy has been 19% in the case of CAESS customers and up to 31.6% in the case of Delsur customers.

Electricity blackout affected four Central American countries

This cost of energy is only one of the three that make up the electricity bill, to which must be added distribution and marketing costs. These last two remain the same for this quarter.

As an example, last quarter a family paid $ 13.26 for the cost of energy, but this next quarter they will have to pay $ 15.6 assuming they consumed the same 99 kilowatts if they are a DelSur customer. To these costs must be added the charge for distribution and commercialization of your distribution company.

The data are not applied by the companies, but are the result of the power generation that the country has had in the three months and are released by the General Superintendency of Electricity and Telecommunications, SIGET.

This time, the increase in the price of energy is associated with a decrease in the generation of energy with biomass, that is, that produced through sugarcane bagasse.

Because the harvest ended in April, the mills stop producing this energy and it must be supplied with another source.

The data from the Transactions Unit (UT) show this: in February, in the middle of the harvest, biomass generation represented 20% of the total energy produced while thermal (bunker-based) only represented 5.8% of the total. But as of May the numbers were reversed, as biomass generation was reduced to 5.1% and thermal generation reached 21.3% of the total.

Carlos Martínez, a professor of electrical engineering and an expert in the area, said that these data show that the country has begun to depend on more oil in recent months and since it has risen in price internationally, it has also raised the costs for the country.

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“We are using more oil and it is more expensive internationally. We are seeing it in the price of fuel ”, he said.

Water generation as of May remained at 16%. This percentage tends to rise in the winter, which could lower the cost of energy for the next quarter.

Guatemala will exit the Regional Electricity Market

On the other hand, according to a publication of the Guatemalan newspaper Prensa Libre, the Foreign Minister of Guatemala, Pedro Brolo, presented on July 12 a complaint of the Framework Treaty of the Regional Electricity Market of Central America, with which he also showed his interest in leaving this market, which supplies energy throughout the region.

The exit would not be immediate, because according to the Treaties and protocols, it would become effective 10 years after filing the complaint, which means that Guatemala will have to remain in the Regional Electricity Market until July 2031.

Guatemala is one of the main energy providers of El Salvador. Until May, 26% of all the energy available in the country was imported.

However, the general manager of the Transactions Unit, Luis González, said that the neighboring country’s decision will not affect energy imports, as Guatemala will continue to be connected to neighboring countries through the Transmission infrastructure.

This will allow imports to be maintained within the next 10 years.

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Government denies work permit to another journalist from El Faro

The reason why the American Roman Olivier Gressier was denied authorization is contradictory to the expulsion of Mexican Daniel Lizárraga a week ago.

A few days after it was known that the government of Nayib Bukele expelled the award-winning Mexican journalist Daniel Lizárraga from the country, hired by El Faro as one of its editors, this Monday it has transpired that Migration has denied work permission to another journalist of this medium digital.

“On Friday, July 9, the Immigration Directorate of El Salvador denied the work permit to the American journalist, Roman Olivier Gressier, a member of El Faro, and whose processing had been ongoing since June 22.

According to information circulated by the media, “the Aliens’ argument was that Gressier was not in the country, and in the meantime ‘he does not have the intention of staying and residing in the country'”.

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Curiously, this argument is inconsistent and diametrically opposed to the one used to get Lizárraga out of El Salvador. In a single week, the government has expelled one journalist for being inside El Salvador and another for being outside.

“In just one week, two foreign journalists have received similar refusals based on questionable arguments,” El Faro reported on their social networks. This digital newspaper has been the target of numerous government attacks for some of its coverage that, like that of other independent media, contrasts with the triumphalist narrative of the Bukele government.

“Both Gressier and Lizárraga will continue working for El Faro, and this medium looks for the alternatives that best suit its journalists so that they can fulfill their informative mission despite governmental obstacles”, was the position of the digital medium in its social networks .

For his part, Daniel Lizárraga, expelled a week earlier, questioned the government’s logic in expelling two journalists with diametrically opposite justifications.

In addition, he considered the fact a “second consecutive and treacherous blow against El Faro by denying Román Olivier a work permit, arguing that he had no intention of being in the country because he was abroad. They also denied it to me, but because I was in El Salvador. Then?”

Previously, El Faro was the target of attacks by the ruling party, including an excessive audit by the Ministry of Finance that went beyond the tax issue. At a press conference, President Bukele stated that they were being investigated for money laundering, despite the fact that the media was never notified of it.

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“The US has used the carrot and the stick to solve the crisis, but Bukele seems to be opting for the stick,” says Barclays

The British financial entity warns that in August the Government has to make a payment of more than $ 800 million and if the Government does not obtain financing, an extreme solution could be the nationalization of pensions.

In a new financial analysis on El Salvador, the London-based financial services company, Barclays, warned this Friday that the President of the Republic, Nayib Bukele, is increasing political tensions rather than helping advance a negotiation with the International Monetary Fund (IMF) “could lead to a further escalation of international tensions that run the risk of ending the country’s isolation,” which would further damage the Salvadoran economy.

“Instead of using its political capital to promote reforms to the economy, it has prioritized its political agenda of concentration of power,” the document states.

The document released this Thursday indicates that institutional and governance factors are key to achieving this agreement and this has been clarified by the United States, which has stressed that any financial support to El
Salvador is conditioned to maintain respect for democratic institutions and the adoption of anti-corruption measures.

These conditions were reiterated by Under Secretary of State for Political Affairs Victoria Nuland, who visited the country on June 29 and met with President Bukele, in an attempt to reduce political tensions with the United States. However, Barclays points out that despite the efforts of the American country, Bukele’s decisions seem to go the other way.

Engel List: Bukele Officials Among Those Designated For Corruption By US

“The United States has used both the carrot and the stick in its attempt to negotiate a resolution to the crisis; however, Bukele seems to be opting for the stick ”, indicates the analysis of the British company.

A week ago the United States published part of the Engel List in which it implicates several officials of the Bukele government in corruption and money laundering and eliminated their visas.

Despite the red flags cited by the US, President Bukele has shown no signs of backing down on his current path. His response to the Engel List was: “El Salvador has its own list and the administration has begun to take action against its political opposition.”

For Barclays, the worrying point is that the government faces a key test in August as the administration needs to have $ 800 million for debt service payments amid declining reserves and government assets.

“While most of this debt is internal and refinancing these liabilities could be a reasonable assumption, it cannot be assumed that these internal debts will be automatically carried over, given the pooled nature of the payments and what appears to be pressure. of liquidity for the government and the economy in general. “An extreme solution could be the nationalization of the pension system to obtain the necessary financing,” indicates the finance company.

Barclays recalls that last week the Legislative Assembly made reforms to decrees 608 and 804 to give the government greater liquidity. However, he is concerned about statements from the Treasury that deny a new bond issue, but that leave the door open for any possibility.

“The level of discretion makes El Salvador’s political outlook very uncertain and, we believe, it is likely that it could deteriorate further,” he warns.

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Expert: money from prison stores was diverted to intelligence spending

The former directors of Penal Centers, Nelson Rauda and Rodil Hernández are accused of fraudulent administration for $ 208,000.00 that corresponded to the institutional stores.

A financial expert declared this Friday in the trial against the former directors of Penal Centers, Nelson Rauda and Rodil Hernández that he did not find documentation to justify the destination of $ 208,000 from the institutional stores for intelligence expenses in the administrations of the two defendants.

The technician recalled that the administration manuals of the institutional stores in the penitentiaries establish that the profits or profits of the same must be invested in social programs in favor of the prison population and improvements in the infrastructure of the prisons.

“I did not find documentation to show that this money from intelligence spending would serve to improve conditions for the prison population,” said the expert before the judges of the Fifth Sentencing Court.

He assured that he found several checks in favor of about six alleged employees of Penal Centers who received part of that money, but said he did not know the destination of it.

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Before the trial began, one of the prosecutors assured that the two former officials “used funds from institutional stores outside of what the law allowed them.”

He added that the diversion of $ 208,000 in intelligence expenses by Rauda and Hernández has been credited, but that these funds were not backed by the law that regulates institutional stores.

The Prosecutor’s Office accuses Hernández of having fraudulently administered $ 121,238.00; while Rauda is credited with the illegal administration of $ 87,154.00

The financial expert was one of the six prosecution witnesses presented by the Attorney General’s Office against the two former prison officials. Other witnesses for the Prosecutor’s Office were the former Ministers of Public Security, David Munguía Payés and Benito Lara.

They confirmed that the Directorate of Penal Centers sent money from institutional stores to the Ministry of Justice and Public Security for intelligence and counterintelligence, according to judicial sources.

“The Prosecutor’s Office intended with them to establish that there were funds from institutional stores that are private. Now they want to prove that they are private because they are accusing of fraudulent administration, something more paradoxical. And in the case of the truce when they accused Nelson Rauda, ​​they said they were public funds and that is why they put arbitrary acts on him and here they are already private funds, it is a contradiction, ”said Manuel Chacón, defender of the former accused officials.

He added that they also wanted to establish that there were intelligence expenditures that “are special funds that these institutions have that handle risk situations in order to find possible threats against the prison population, against the authorities or against the civilian population.”

Chacón assured that the statements of Munguía Payés and Lara were illustrative in nature “they were not indications, but rather orientation, how things were handled, who were on that date, it was not a matter of imputation, it was simply illustrative. ”.

The defense attorneys offered the statements of four defense witnesses in favor of the two former prison officials.

This is the second trial against Rauda and Hernández, since in the first they were exonerated of charges by the Fourth Sentencing court. The Prosecutor’s Office requested the annulment of the ruling and the First Criminal Chamber agreed with him and ordered that the trial be repeated.

For this second trial, which is expected to end this Friday, the Fifth Sentencing court was appointed.

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More than half of Salvadorans reject Bitcoin

Study presented by the UFG revealed that the population mistrusts the cryptocurrency.

52.1% of Salvadorans do not agree on the use of Bitcoin and another 30% do not trust the cryptocurrency,

According to data from a survey revealed yesterday by the Francisco Gavidia University, two months after the Bitcoin Law enters into force.

The survey: “Salvadorans think about the Bitcoin Law: Do they accept and receive?” It was carried out by the Disruptiva magazine and the Institute of Science, Technology and Innovation (ICTI), both units of said university.

Oscar Picardo, director of the ICTI, explained that the data reflected in the question: “Do you trust the criteria of President Bukele in this decision to adopt Bitcoin?” are key to understanding that not only do people distrust and reject Bitcoin, but that Bukele has lost popularity.

Can read: This is ECLAC’s warning about Bitcoin in El Salvador

“The study itself reveals that 3 out of 10 people have lost confidence in the president who until this date had a very wide popularity,” said Picardo.

The data collection was carried out from July 1 to 4 of this year with 1,233 effective ballots nationwide and has a 95% confidence level; was made with a view to the entry into force of the Bitcoin Law on September 9.

The study revealed very important data, since two months before the regulations come into effect, 68.4% said they did not know the Bitcoin Law; 21.9% know a little about it and only 9.6% said they know it.

Furthermore, 53.5% of Salvadorans consider that Bukele’s decision to establish Bitcoin as legal tender was a mistake; 24% answered that it was not very correct; 12% believe that it was correct and only 6.5% considered that it was very successful.

Salvadorans are not only unaware of the Law, but of the cryptocurrency itself and its value.

To the question: How much do you know about Bitcoin ?, 48.2% said something, 46% said nothing and 4.6% said a lot.

The survey: “Salvadorans think about the Bitcoin Law: Do they accept and receive?” It was carried out by the Disruptiva magazine and the Institute of Science, Technology and Innovation (ICTI), both units of said university. Photo EDH / Archive

Another question was: “In this week, how much is a Bitcoin worth in its dollar equivalent?” and 71.3% indicated not knowing; 18.2% answered that close to $ 30,000 (which is the real value that the cryptocurrency had in that week); 4.7% said its value is equal to a dollar and 3% said that it was close to $ 100.

A very sensitive issue for the population is their salary or income, so they were asked: Would you be willing to receive your salary or income in Bitcoin? and 64.8% answered that they are not willing; 16.5% are willing; and 18.7% do not know or did not respond.

When consulting the public, which currency do you value for the financial stability of your family economy? 95% said that the dollar, only 1% answered that Bitcoin; 3.2% responded that another currency, and 0.8% said they did not know or did not respond.

In addition, 83.4% indicated that they do not know any family member or friend who has made transactions in cryptocurrencies or Bitcoin; only 16.1% said yes and 0.5% said they did not know or did not respond.

Traders reject Bitcoin

The study also inquired about the opinion of merchants, since the Bitcoin Law obliges this sector to accept cryptocurrencies.

Did you know that once the new Bitcoin law takes effect, on September 9, businesses will be obliged to accept these cryptocurrencies? They were consulted and 61% said they knew, 38% did not know and 9 % answered not knowing or did not answer.

Of the respondents, 280 people were merchants and they were asked if they would be willing to accept payments in Bitcoin, but 67.14% said they would not receive it; 24.29% that would receive it; 3.93 said that they are indifferent and 4.64% that they do not know or did not respond.

“It is important to see at this point how the rejection of Bitcoin is marked,” commented the ICTI director.

Read also: El Salvador’s economy recovers from 2020 thanks to remittances and exports

On June 24 during a national chain, Bukele spoke about the difference between accepting and receiving Bitcoin. To find out if the population is clear about the message, they were asked if they understood the difference. 20% answered that they did not understand; 33.9% assured that they did understand, but 44.7% did not see the chain and 0.6% did not know or did not respond.

In that same chain, Bukele explained how to use the wallet or electronic wallet on his mobile phone and they asked citizens what is their assessment? 24.7% said it is easy to use; the 28.4 stated that it is very complicated; 44.4% assured that they did not see the national network and 2.5% said they did not know or did not respond.

Another important fact that the survey revealed is that merchants consider that the economic situation will worsen with the implementation of the Bitcoin Law, since 43.6% said that the situation could get worse; the 25.6% that will improve the economy; 17% that everything will remain the same and 13.1% said they do not know.

Those favored with the Bitcoin Law

40% of the population assured that the Bitcoin Law favors large entrepreneurs; 14.8% indicated that foreign businessmen; 13.1% to the country in general; 11.2% said that to government finances; 8.5% said they do not know and 6.5% said that Bukele’s family.

32.7% considered that Bukele’s motivation to adopt Bitcoin as legal tender was due to personal and / or business interests; 24.7% mentioned that to improve the family economy and generate more jobs; while 18.5% said that to facilitate transactions such as purchases and remittances; 10% to evade economic sanctions and 13.6% said they do not know.

Finally, when consulting the population, how do you feel about this decision to implement Bitcoin as legal tender? 48% said with uncertainty; 29% with fear; 19.8% optimistic and 2.6% do not know.

On June 24, President Bukele announced the Chivo application that will be used to make transactions with dollars and Bitcoins. Photo: Twitter / Press Secretary of the Presidency

For Picardo, these results are only a reflection of a decision that was made without technical debate.

“The mandatory factor is what put the result of this bet in check; Maybe if the law had given a one-year period for adaptation, for progressive implementation, and after that year the law had been reformed, it would have been different, so I think it was a false step and there is a marked rejection, ”explained Picardo.

The analyst added that we must not forget that there is a digital divide and that it complicates the population to become familiar with this type of digital products.

“There is the digital divide, not everyone has internet, not everyone has equipment, not everyone has a bank account, there are many gaps associated with the problem,” he said.

At this point, the survey revealed that 23.5% have no way to connect; 24% stated that they did not have access to the internet 24 hours a day, seven days a week.

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El Salvador at risk of FATF sanctions for adopting Bitcoin

Steve Hanke leads a study at Johns Hopkins University, in the United States, on the Bitcoin Law adopted by Bukele. They consider that it would be difficult for El Salvador to comply with 27 points of the Financial Action Task Force (FATF).

Renowned American economist Steve Hanke keeps his gaze on the adoption of bitcoin as legal tender by the government of Nayib Bukele. Together with two students from the prestigious Johns Hopkins University, he has carried out a study on the risks that El Salvador may incur with this measure and they warn of possible international sanctions.

The academics focus especially on the regulations established by the International Financial Action Group (FATF), to which El Salvador and more than 200 countries are integrated, since they consider that, if the Bitcoin Law is applied on September 7, El Salvador would be in serious difficulty to comply with these rules imposed by the FATF and may even fall on the gray or black list prepared by that same international body.

Also read: Michael Peterson, the figure who convinced Bukele to adopt Bitcoin as a currency

The FATF collects and shares information with the attached countries that leads them to prevent acts of corruption and terrorist financing.

In that sense, Steve Hanke, the founder and co-director of the Johns Hopkins Institute for Applied Economics, Global Health and the Study of Business Enterprise, together with economics students from that same university, Nicholas Hanlon and Parth Thakkar, have published a study titled “El Salvador’s Bitcoin law is destined to get caught in the FATF regulatory website”, by which they pose 27 situations that the FATF establishes in order not to fall into risk when it is done.

“We have chosen 27 behaviors from the FATF 58 that promise to be difficult, if not impossible, for banks, merchants and their customers to comply with. El Salvador and its dollarized exchange regime have been as clean as a hound’s tooth. “

Study on Bitcoin law and the FATF, Universidad Johns Hopkins

Among those scenarios drawn by the FATF and taken up by the authors, is the lack of information on user profiles and the high amounts of money that can be transferred without further regulation. They even mention that the use of “mules” (drug transporters) can be promoted or that there are potential people who are victims of fraud.

Another risk is that transfers can be made from untrustworthy and even suspicious IP addresses. This and other scenarios will be seen by El Salvador and it will be difficult to control them, they say.

In principle, they consider that, in practice, this is not a “legal tender” law but one of “forced course” that will restrict the freedom of choice of Salvadorans in the use of virtual currency, which according to local surveys already facing resistance from merchants.

Continue reading: Banks will have less margin to lend money to the Government

In addition to the FATF, the study highlights that “nobody knows the exact modalities that will be used to implement the Bitcoin Law” and also refers to another risk: the inclusion in the Engel List of seven people (officials and Bukele’s circle) as allegedly corrupt or human rights violators.

“It is clear that the administration of President Bukele has been deeply involved in corruption, obstruction and actions that undermine democratic processes and institutions,” they say.

Hanke insists in this study that the law promoted by Bukele is based on “false premises” such as increasing freedom and reducing remittance transfer fees.

As part of the analysis, economists note that since El Salvador adopted the US dollar, El Salvador’s average annual inflation rate of 2.03% has been the lowest in Latin America; 25-year mortgages have remained stable at a variable interest rate of 7%, among others.

It also highlights that currently the average cost of transferring remittances is 2.85%, much lower than what it means to receive bitcoin and exchange it for dollars.

Contrary to these figures, President Bukele has defended his bitcoin project and has said that remittance transfers will not be paid, and that the law does not require the use of that currency, although the law does say so.

After insisting that the bitcoin law is unnecessary because the country has maintained stability with the dollar and “its exchange regime has been as clean as the teeth of a hound,” the authors specify that once the law is applied, both banks, how traders and their customers will come into conflict with the FATF regulators and get caught up in that regulatory web.

“Importantly, there will be huge unintended negative consequences associated with the implementation of the Bitcoin Law. Salvadoran banks, financial institutions, companies and perhaps the government itself will be visited. They will likely receive a red flag from the FATF that will likely result in sanctions, ”the study notes.

The FATF, as the world’s leading watchdog on money laundering and terrorist financing activities, has produced and regularly updates two documents: the Recommendations Guide and the Red Flag Indicators Report for Virtual Assets.

The Recommendations Guide contemplates standards that the countries should use to detect, punish and prevent money laundering, terrorist financing, among others; while the Red Flag Indicators Report describes suspicious behaviors related to virtual assets that violate the Guide.

The study highlights that non-compliance with the FATF Guide leads nations to fall on the FATF list of “Jurisdictions under greater supervision” or Gray List, and even, if they do not cooperate, fall under the supervision of the FATF; and if they are significantly exposed to money laundering or terrorist financing, they can be placed on the list of “High-risk Jurisdictions subject to a Call for Action” or Black List. The latter can result in account seizures and fines, penalties, business restrictions, and criminal charges for the financial parties involved.

What sanctions apply?

When a country is placed on the black list, the FATF issues a call to action urging the more than 200 affiliated nations to apply measures to it, but also those that fall on the gray list can be sanctioned by the attached countries.

Around 17 nations in the Americas and the Caribbean have received the FATF flag: Antigua and Barbuda, Argentina, Bahamas; Barbados, Bolivia, Cayman Islands, Cuba, Ecuador, Guyana, Haiti, Honduras, Jamaica, Nicaragua, Panama, Paraguay, Trinidad and Tobago, and Venezuela. Only Venezuela registers sanctions from the United States.

As they state, many FATF guidelines have to do with customer due diligence (CDD) and Know Your Customer (KYC), in order to track where the money is coming from, where it is going and why the transaction.

“These regulations ensure that individuals who conduct virtual asset transactions (VA) on Virtual Asset Service Providers (VASPs) have credible status and are conducting the transaction with a logical business purpose.

Hanke and the other two authors cite in their report the 27 possible behaviors that the FATF establishes worthy of a risk flag, which will likely occur with the establishment of Bitcoin in the country.

One of the aspects that stand out is that the following could be difficult or impossible for banks, merchants and clients to comply with virtual currency: receive funds or send funds to virtual active service operators that do not know their client, for what they consider that the processes are demonstrably weak or nonexistent.

Added to this is the risk of when customer information is incomplete or insufficient, or that a customer rejects requests for “meet your customer” documents or inquiries about the origin of funds. In the same way that the sender or recipient does not have knowledge or provides inaccurate information about the transaction, the origin of the funds or the relationship with the counterparty.

Another scenario that they warn is that in this world of virtual currency, several high-value transactions can be carried out in a short series of times, for example, within 24 hours; in a staggered and regular pattern, with no further transactions recorded over a long period afterward, which is particularly common in ransomware-related cases; or to a newly created or to a previously inactive account.

Ten cases in which the country could fall into risk

These are ten of 27 possible scenarios that Robert Hanke and his colleagues believe El Salvador might not comply with the FATF.

THE CUSTOMERS ‘SITES OF ORIGIN AND THE LACK OF REGULATIONS

“Immediately transfer virtual assets to multiple providers, especially those registered or operating in another jurisdiction where there is no relationship with the place where the client lives or conducts business, or there is no or weak regulation against money laundering or anti-money laundering. terrorism”.

NOT HAVE THE EXACT INFORMATION OF THE SENDER OR RECEIVER

“The sender / recipient has no knowledge or provides inaccurate information about the transaction, the
origin of the funds or the relationship with the counterparty “

THE PANORAMA ONLY PAINTS AN ADVANTAGE AND IS SHORT TERM

“A new user tries to exchange all the balance of the VA, or withdraws the VA and tries to send the entire balance off the platform.”

CLIENT WHOSE PROFILE DOES NOT AGREE WITH THE AMOUNT TRANSFERRED

Make a large initial deposit to open a new relationship with a currency provider, but the financed amount is incompatible with the customer’s profile.

SEND FUNDS TO UNKNOWN

“Receive funds or send funds to virtual currency providers but they do not know their client; that makes the processes demonstrably weak or non-existent “

THE CUSTOMER DOES NOT GIVE THE ORIGIN OF THE MONEY

Information about “know your client” is incomplete or insufficient, or a client rejects requests made to him for documents or inquiries about the origin of the funds he is operating.

SUCCESSIVE AND HIGH TRANSACTIONS IN A SHORT TIME

When they carry out several large-value transactions in a short succession, for example, within a 24-hour period; in a staggered and regular pattern, with no further transactions recorded over a long period afterward, which is particularly common in ransomware-related cases; or to a newly created or to a previously inactive account.

SUSPECT THAT PEOPLE ARE BEING USED FOR ILLICIT TRAFFICKING

A client significantly older than the average age of the platform users opens an account and participates in a large number of transactions, which suggests his potential role as a virtual money “mule” (person who carries) or may be in front of a scenario of a victim of financial exploitation of the elderly.

INADEQUATE USE OF ATMs TO MAKE TRANSACTIONS

The use of ATMs or virtual asset kiosks, despite higher transaction fees and including those used by “mules” or victims of scams, or in high-risk locations where occurrences of criminal activity increased.

THE PANORAMA ONLY PAINTS AN ADVANTAGE AND IS SHORT TERM

Perform a virtual currency-fiat exchange with a potential loss (for example, when the asset value is fluctuating, or regardless of abnormally high fees compared to industry standards, and especially when transactions do not have a commercial explanation logic.

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Government uses more than 100 policemen to seize assets from ARENA

Prosecutor’s Office requested an order to search the party’s headquarters to seize that building and 17 vehicles. To do this, the PNC was assisted by a large deployment of well-armed agents, including the UMO.

The government made a large police deployment on Friday afternoon to intervene in the building where the main headquarters of the ARENA party operates, in order to confiscate its assets, framed in the so-called Taiwan case.

Participating in the procedure were the Attorney General imposed by the ruling party, Rodolfo Delgado; the Minister of Justice and Public Security, Gustavo Villatoro, and the Director of the Police, Mauricio Arriaza Chicas, along with other police chiefs.

Two buses transported more than 100 heavily armed agents from different areas of the National Civil Police, including specialized ones such as the UMO. In addition, they closed several arteries around to execute a judicial order that yesterday they asked the specialized judge to extinguish the assets of the tricolor party.

Conference during a raid on the Arena party headquarters in San Salvador

“We proceed to the seizure of two real estate, this is one of them (the main headquarters), and the preventive entry of 17 vehicles,” Delgado told reporters.

IN PICTURES: FGR raids ARENA party headquarters for China-Taiwan case

In addition to the seizures of real estate, the money from the political debt of the aforementioned political institute has been frozen by the last elections. “For this reason, the immobilization of the political debt corresponding to the recent elections, which amounts to 2.9 million dollars, was ordered as a precautionary measure,” Delgado added.

Among the images released by official social media accounts are stationery and photos reviewed by tax investigators.

Photo EDH / Francisco Rubio

According to Delgado, this is one of the legal actions that was proposed in order for the funds donated to El Salvador by the Government of China-Taiwan to be “recovered.” In total, he said, it’s $ 3.9 million. Members of the ARENA party, including former presidents Elías Antonio Saca and Francisco Flores, were prosecuted for the alleged diversion of approximately $ 10 million for partisan activities, said to have come from the 2001 earthquake donation from Taiwan.

Saca, Juan Tennant Wright and Antonio Balzaretti Kriete were exonerated because the court considered that the crime had already prescribed, in 2019 when they were accused. Francisco Flores was dismissed at the request of the Prosecutor’s Office in view of the fact that he had died.

Minister Villatoro, said in the press conference offered in front of the statue of the founder of ARENA, Roberto d’Aubuisson, for his part that they were accompanying the procedure and will do so in whatever is necessary to recover what, according to him, the “Political mafias” have robbed people.

Photo EDH / Francisco Rubio

For its part, the party leadership published hours after the procedure a statement in which it highlighted that “El Salvador is facing an imminent danger towards a dictatorship” by pointing out that both President Bukele and the imposed Prosecutor and the “bent police to him “they try to divert attention from the acts of corruption linked to the current government, all this in order” not to face the Salvadoran population and the international community. “

Likewise, the statement emphasized that the party’s headquarters “was kidnapped and threatened with the purpose of keeping us silent,” for which reason it urged the president to “show his face” and dismiss the officials of his cabinet indicated in the Engel List. .

In the text, the ARENA party also maintains that the institution is not limited to the walls of a headquarters or a building, while calling on the international community to be aware of what is happening in Salvadoran territory. “We will continue to be a political opposition force,” he concludes.

Carmen is evicted by the Police

One of those affected by the intervention of the ARENA building was Carmen de Mira, who rented a place there. She had to close her small business at the request of the police authorities.

“I rent this little piece here, and all of this is on credit and I have to pay for it,” said de Mira, while closing the store. “God is wonderful and I am a daughter of God,” said the lady, who then asked a police officer to review what she got from the small business.

“You can check me, Mr. Agent,” he said and the officer told him to come out, that there was no problem. “They are bananas, but I am going to return to bring the other, look at me, I even sell bananas … Are you going to give me permission after taking out my little things?” He insisted. The officer told him that he could come in any time he wanted.

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In anticipation of Lista Engel, senior US officials arrive in El Salvador

A group of important members of the United States government arrived in El Salvador, at a time when there is tension with the North American country due to the opacity of the Executive and its authoritarian practices. For experts consulted, the visit is an “alert” to the Bukele administration.

The relationship between the governments of the United States and El Salvador is at a tense point.

While Washington insists that the Salvadoran government must combat corruption, strengthen democracy and guarantee respect for human rights, the government of Nayib Bukele continues to weaken or co-opt the institutions of control, harassing those who demand accountability and keeping hidden many of purchases made with public funds.

In this context, this Tuesday a delegation of important officials from Joe Biden’s administration arrived in the country. This was announced by the Charge d’Affaires of the American Embassy, ​​Jean Manes, who said: “Today (Tuesday) we will receive the high-level delegation.”

Photo: Illustrative and non-commercial image / twitter.com / USAmbSV / status / 1410082597204631553

In the opinion of the diplomat, such a high-profile visit is an important opportunity for El Salvador and attracting investment, but for that, legal certainty is needed and she announced that the government “has a great opportunity if it wants to take it.”

ALSO READ: Who are the high-level US officials coming to the country?

The delegation is headed by Victoria Nuland, the Undersecretary of State for Political Affairs and third in command of this institution that governs the foreign policy of the United States.

Nuland has extensive diplomatic experience and has represented his country before countries such as Russia or China, as well as institutions such as the North Atlantic Treaty Organization (NATO), the political-military alliance that brings together the most important powers in the world.

Nuland is accompanied by a group of officials whose areas of competence range from diplomacy to defense, the fight against drug trafficking and organized crime. Among them is Julie Chung, deputy assistant secretary of state for the Western Hemisphere, who has already issued warnings about the Bukele government’s approach to China.

On the official visit to be made by the person in charge of Political Affairs of the United States, Victoria Nuland, she will be accompanied by Julie Chung, the acting undersecretary of the Office of Western Hemisphere Affairs of the State Department. Photo: AFP / Twitter / Julie Chung

In addition, the Deputy Under Secretary of Defense for the Western Hemisphere, Daniel Erikson, came to the country. He is in charge of the defense policy of the United States in the Americas. Megan Oates, director for Central America of the White House National Security Council, also arrived.

Oates has extensive experience managing security and rule of law programs in different regions of the world.

Daniel P. Erikson is Deputy Under Secretary of
Defense for the Western Hemisphere. Photo: Courtesy / @USEmbassySV

A delegation of very high-ranking officials is very unusual, as they often travel alone. However, Nuland, Chung, Erikson and Oates arrive together, something that sends an important message, according to a source in Washington who asked not to be identified: “that all US government agencies are looking to El Salvador. ”.

At the gates of the Engel List
This important delegation arrives in the country to reinforce the importance of legal security in the run-up to knowing the list of officials that the United States government considers corrupt or human rights violators.

Appearing on this list, known as Engel after the former congressman who promoted it, will bring sanctions to the identified persons.

This has been identified as a tool to punish corruption in the past and prevent illicit in the future.

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This long-awaited list, as well as constant pronouncements by congressmen and officials of the US Executive, show how El Salvador is being perceived by its main partner: as a country that is departing from democratic principles and is moving towards an authoritarian regime and little transparent.
Yesterday, the American Embassy announced that the delegation of senior officials will have a meeting with the President of the Republic, Nayib Bukele and other political leaders.

In addition, they affirmed that they will meet with representatives of civil society organizations and the private sector.

An alert to Bukele

Xenia Hernández, executive director of the Democracy, Transparency and Justice Foundation (DTJ), considers that the visit of such a high-level delegation “makes clear the real and fundamental commitment of the governments of Joe Biden and Kamala Harris to the fight against corruption.”

The government of this country has made it clear that combating this scourge is its main priority in El Salvador, Guatemala and El Salvador. This, because corruption diverts resources that should go to the most vulnerable, motivating them to emigrate when the situation in the country becomes unsustainable.

For Hernández, the Salvadoran government must take this visit as “an alert in the sense that it must correct the wrong course” that it has decided to take.

This bad course, he explains, is evidenced in the increase in opacity, the dismantling of institutions that ensure transparency and the blows to the Judiciary and the independence of powers.

“The government must rethink whether it wants to maintain relations with the United States, its main support and aid worker, a friendly country that has collaborated with Salvadorans” and adds that “or it is advisable to tighten the relationship with this country more friendly countries that in their clauses ask for transparency and the fight against corruption ”.

YOU MAY BE INTERESTED: “Something bad is happening in the country that must be corrected,” says Portillo Cuadra about the visit of a high-ranking US official.

Ruth Eleonora López, who coordinates Cristosal’s anti-corruption area, spoke similarly. In his opinion, this delegation seeks a commitment from the Bukele government to the “rule of law and transparency as preventive mechanisms for corruption.” But he is not so optimistic and anticipates that such a commitment “they will not find.”

Eduardo Escobar, from Acción Ciudadana, believes that such a high-level delegation “shows interest in fighting corruption and good governance.”

The United States has sent its message: demand the fight against corruption. For now, his Salvadoran counterpart has not complied. The sources consulted anticipate that this may be the main point of this important visit.

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