By: William Escobar & David Salgado
On March 1st, 2023, the new Regulatory Ordinance for the Commercialization and Consumption of Alcoholic Beverages of the Municipality of San Salvador came into effect, which aims to regulate, within the territorial limits of the Municipality, the operation of any business or establishment dedicated to the sale and/or consumption of alcoholic beverages, such as: liquor stores, grocery stores, bars, hotels, restaurants, cafes, stores, and other similar businesses.
The enactment of this new ordinance is given due to the Unconstitutionality Ruling with ref. 110-2017, in which Articles 31 paragraph 1°, 32 paragraph 3°, 33 paragraph 1° and 2° of the Law Regulating the Production and Commercialization of Alcohol and Alcoholic Beverages were declared unconstitutional in a general and mandatory manner, for infringing the provisions of Article 262 CN, in the sense that the Legislative Assembly lacks the competence to establish special rates and contributions.
As a consequence of the declaration of unconstitutionality of article 31, paragraph 1 of the aforementioned Law, the fee for the license for the commercialization of alcoholic beverages was expelled from the legal system, which collaterally produced the non-application of the calculation of the fine for infractions in this matter.
However, the Constitutional Chamber made the clarification that such sentence would not have retroactive effects, and also recognized that the Municipalities may make the necessary regulatory adjustments (issuance of municipal ordinances or reforms of the pre-existing ones) to establish the municipal fee that was declared unconstitutional.
In this sense, given that the referred unconstitutionality does not fall on the determination of the rates, but on the faculties of the Organ that promulgated them, for lacking the competence to do so, the Municipal Council of San Salvador, issues this new Ordinance, which repeals the Regulatory Ordinance of the Activity of Commercialization and Consumption of Alcoholic Beverages of San Salvador promulgated in 2002, and all its reforms.
To summarize the contents of the new Ordinance Regulating the Commercialization and Consumption of Alcoholic Beverages of the Municipality of San Salvador, we have prepared below a list of the main doubts that may arise with its enactment:
To whom does this Ordinance apply?
- All those natural or juridical persons, national or foreign, who carry out the activity of Commercialization and Consumption of Alcoholic Beverages are subject to the fulfillment of the formal and substantive obligations of the referred Ordinance.
What obligations does it establish?
Among the main obligations that this new Ordinance establishes are the following
- To be registered in the corresponding municipal tax records.
- To be in a state of tax solvency in compliance with its formal and substantive obligations with the municipality.
- Pay the prequalification and license and/or permit fees.
- To request the corresponding license and/or permit, prior to the installation or operation of the activity of commercialization and consumption of alcoholic beverages.
- In all establishments where alcoholic beverages are sold and/or consumed, a sign must be placed at the main entrance, with a minimum size of 30 cm. X 50 cm, which clearly reads: “SALE AND CONSUMPTION OF ALCOHOLIC BEVERAGES TO MINORS IS PROHIBITED”.
- In all establishments where alcoholic beverages are sold and/or consumed, a sign must be placed at the main entrance, with minimum measurements of 30 cm. X 50 cm, stating the RESTRICTION HOURS for the sale and consumption of alcoholic beverages, which shall be from two hours to six hours in the morning, seven days a week.
- The original, or a copy certified by the Municipal Secretary of the Mayor’s Office of San Salvador or Notary Public, of the Sales License and/or the Permit for Consumption of alcoholic beverages must be placed in the sales area or in the consumption area.
What types of License and/or Permits does it regulate?
- Alcoholic Beverages Packaged Sales License: it is the necessary authorization to operate any business or commercial establishment within which alcoholic beverages whose potable ethyl alcohol content is higher than 6% by volume are sold or marketed, without allowing their consumption.
- License for Fractional Sale of Alcoholic Beverages: it is the authorization necessary to operate any business or commercial establishment within which the consumption of alcoholic beverages is allowed, whose ethyl alcohol content exceeds 6% by volume.
- Permit for the Consumption of Alcoholic Beverages: it is the necessary authorization to operate any business or commercial establishment within which alcoholic beverages of 2% to 6% alcohol by volume are consumed.
- Temporary Authorization for the Sale, commercialization and consumption of alcoholic beverages in stadiums, commercial and/or convention centers and similar establishments: the Municipality may grant temporary authorization related to the commercialization, sale and consumption of alcoholic beverages in different types of events, whether they are managed by public or private entities, which may not exceed thirty continuous and non-extendable days. Said authorization must be processed for each event to be held.
Sales Licenses and Consumption Permits will expire on December 31 of each year, regardless of the date of granting, and the renewal of any of them must be requested during the first fifteen working days of the year.
What are the costs of these Licenses and/or permits?
- The amount to be paid for each license or permit, as well as its renewal, will be the equivalent to one minimum monthly salary in force for the commercial sector for each establishment.
What prohibitions and sanctions does it establish?
Among the main prohibitions that this new Ordinance establishes are:
- Extemporaneous Renewal of License and/or Permit: Shall be sanctioned with a fine equal to one hundred percent of the value of the license and/or permit fee per week or fraction of a week in delay in the presentation of the renewal.
- Non-renewal of license and/or permit: Shall be sanctioned with a fine equal to one hundred percent of the value of the license and/or permit fee per week or fraction of a week in which the renewal is overdue for each year omitted.
- Failure to process the license and/or permit: Shall be sanctioned with eight minimum monthly salaries in force for the commercial sector.
- Failure to place a sign prohibiting the sale and consumption to minors: It will be sanctioned with eight minimum monthly salaries in force for the commerce sector.
- Commercialization and consumption of alcoholic beverages during restricted hours: Shall be sanctioned with eight minimum monthly salaries in force for the commercial sector.
- Failure to post license and/or permit in force: Will be sanctioned with eight minimum monthly salaries in force for the commerce sector.
In addition, it establishes that when the mayor or delegated official has knowledge by any means, that a natural or legal person has committed an infraction to the referred Ordinance, he will initiate the Administrative Sanctioning Procedure ex officio, will initiate and will collect the evidence that supports the same.
From the resolutions of the mayor or delegated official, an appeal for reconsideration will be admitted before the same official who issued the act; likewise, an appeal for reconsideration will be admitted before the Municipal Council.
For further information, please contact Dr. Diego Martín (dmartin@consortiumlegal.com) and/or e-mail taxelsalvador@consortiumlegal.com.