PUBLIC-PRIVATE PARTNERSHIPS BRIEFS El-Salvador: Trade Inspections Overview The Government of El Salvador has procured a ten-year import, export, and transit verifi- cation project. The procurement arrangement is governed by a Concession Contract for Goods Inspections Services through the Use of Non-Intrusive Equipment and Services. The project will add transparency, reduce processing times and paperwork, and enhance the accuracy of customs valuation and duty procedures. MIGA is supporting Cotecna S.A. of Switzerland (COSA) shareholder loan to Cotecna de El Salvador S.A. de C.V. MIGA’s guarantees will help facilitate trade, boost government revenues, and support the creation of local jobs. This series showcases how the World Bank Group supports the development and implementation of public-private partnerships. This support comes in the form of public sector loans, private sector finance, sector and transaction advice, guarantees, and output-based aid. PUBLIC-PRIVATE PARTNERSHIPS - MAY 2016 Background The project is fully in line with the priorities of the government’s 2012 Reform Act aimed at simplifying El Salvador is the smallest country in Central America customs processes. At the end of the 10-year service geographically but it has the fourth largest economy contract, best-practice inspection equipment and in the region. With the global recession, real GDP procedures will be transferred to the government. contracted in 2009 and economic growth has since Cotecna El Salvador will provide training to the remained low, averaging less than 2 percent from 2010 Customs Administration to prepare capacity for their to 2013. Remittances accounted for 16 percent of GDP in 2013 and international trade represents about eventual future takeover of operations. Cotecna El 30 percent of the GDP. Salvador plans to employ about 135 local staff. El Salvador was the first country to ratify the Dominican Republic-Central American Free Trade World Bank Group Role Agreement (CAFTA-DR), which has bolstered the MIGA has extended a $23.8 million guarantee for a export of processed foods, sugar, and ethanol, and period of up to 12 years against the risks of transfer supported investment in the apparel sector amid increased Asian competition. Its Doing Business rank restriction, expropriation, war and civil disturbance, has improved since the introduction of the project to and breach of contract. The guarantee has been 73 (out of 189 countries) but it is still in the middle of extended to COSA. its neighboring countries. Outcomes Project Description COSA El Salvador will introduce scanning technology A consortium established by COSA was contracted to that will reduce the clearance time for imported goods, provide import verification services to the government thereby helping to reduce the cost of doing business under a 10-year build, operate, and transfer contract. for local importers and their clients and contributing The contract involves the financing, procurement, to international trade. The technology will also help installation, and operation of import inspection prevent duty evasion and result in a more accurate equipment, including nine high-energy X-Ray assessment of the value of imported goods. At the scanners, six pallet scanners for air freight, seven trace end of the contract period it will ensure that the detectors, four truck weighbridges, and one data El Salvadorean government inherits the capacity to control center that will coordinate and centralize all manage these simplified, global best practices in trade scanning operation centers in real time. verification on its own. Photo Credits Front and Back: Dennis Tang/Creative Commons license, creativecommons.org/licenses/by-sa/2.0/ worldbank.org/ppp @WBG_PPP scribd.com/wbg_ppp