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IV. TRADE POLICY BY SECTOR 
(1) OVERVIEW  
1. Since 2000, the value of agricultural production h as increased each year, albeit at a slower 
pace than that of the economy as a whole.  Expor ts of agricultural products tripled over the same 
period.  Nevertheless, productivity in some areas of agri culture is low.  Tariff protection in this sector 
is twice that in the rest of the economy (14.9 per cent compared to 7.2 per cent).  Government support for the sector mainly consists of tax exemptions, measures to facilitate acce ss to formal credit and 
debt alleviation programmes. 
2. The fishery sector plays an important role in  exports.  The regulations do not set any 
limitations on foreign capital holdings in fishing, processing or aquaculture companies, but foreign-
registered vessels may only obtain fishing permits for the catch unused by the Peruvian fishing fleet. 
3. Mining and hydrocarbons output has shown a marked increase in recent years as a result of 
the upsurge in investment.  The export share of mine rals, non-ferrous metals a nd fuel in total exports 
rose from 55 per cent in 2000 to 72 per cent in 2006.  Since mid-2004, royalties have been payable for 
exploiting minerals and since the end of 2006 the State has encouraged mining companies to make 
contributions for social projects and infrastructure.   Holders of mining concessions have been given 
the opportunity of signing tax stability agreements sp ecifically for this sector.  Export of natural gas 
from the proven reserves of the Camisea project, the largest in Peru, is conditional upon supplying the 
domestic market for a period of 20 years. 
4. Tariff protection for manufactures fell from 13 per cent in 1999 to 7.2 per cent in April 2007 
and has been accompanied by a mark ed increase in labour productivity .  Nevertheless, dairy products, 
footwear, the milling industry, sugar and clothing all have effective average tariff protection rates of 
30 to 50 per cent. 
5. In the services sector, Peru adopted specific co mmitments in seven of the 12 GATS sectors.  
It also took part in the negotiations on basic te lecommunications and financial services subsequent to 
the Uruguay Round.  In the Fourth Protocol, Peru und ertook to take account of the Reference Paper.  
In the Doha Round negotiations, Peru made an in itial offer in 2003 and a revised offer in 2005. 
6. Since 2000, liberalization of the telecommunica tions sector has progressed, even though one 
private company has a majority holding in various branches of the market, particularly in fixed 
telephony.  Despite this, the quality of the service has improved and in genera l rates have tended to 
fall.  The sector's regulatory frame work has seen far-reaching changes, inter alia , with the objective of 
reducing the barriers to the entry of new operators into the market.  Foreign holdings in broadcasting 
services may not exceed 40 per cent of the total paid-up equity or the number of partners. 
7. The consolidation of the banking sector has c ontinued, particularly in the wake of the 
problems that affected it in 2003 and led the Gove rnment to take precautionary measures.  The 
banking prudential indicators have improved since 2003 and in recent years  credit has increased.  
Foreign investment is given national treatment, but the competent authority may invoke the principle 
of reciprocity if the public interest is affected.  Moreover, if a foreign bank closes, the assets of the 
Peruvian branch must primarily be used to compen sate Peruvian creditors a nd foreigners domiciled in 
Peru.  Peru imposes a tax on financial transactions at a rate of 0.08 per cent, but has drawn up a 
schedule for its reduction. 
8. Since 2000, there have been developments in  the rules governing the transport sector, but 
some activities still face infrastructure-related problems.  In the maritime transport sector, cabotage WT/TPR/S/189/Rev.1 Trade Policy Review 
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services are reserved for Peruvian-registered vessels with  majority Peruvian ownership.  As far as the 
transport of hydrocarbons on domestic routes is c oncerned, a minimum of 25 per cent of the volume 
transported is reserved for Peru's navy.  Even thou gh the legislation provides total freedom of routes, 
foreign trade-related freight may be subject to applic ation of the reciprocity principle.  In 2005, a law 
was adopted to boost Peru's merchant navy but is  not applied because the implementing regulations 
have not yet been adopted. 
9. In the area of air transport, only 49 per cent of the capital of a Peruvian company may be 
foreign-owned when operations start, but this may rise to 70 per cent after six months of operation.  
Peruvian companies seeking a permit to provide a scheduled international air transport service must 
also operate a similar domestic air transport service. 
10. In Peru, 22 professions are regulated and registration with a professional association is 
compulsory in order to exercise them.  Each pr ofessional association lays down the specific criteria 
for recognition of foreign qualifications.  Engin eers who have qualified abroad may exercise their 
profession in Peru temporarily without the need to va lidate their qualifications, but this does not apply 
to attorneys or accountants. 
(2) AGRICULTURAL SECTOR  
(i) General features and objectives of the policy 
11. The value of agricultural production (including h unting and forestry) in real terms increased 
each year between 2000 and 2006, even though since 2002 the sector's rate of growth has been lower 
than that of the economy as a whole (Table IV.1).   Agriculture makes a sizeable contribution to 
exports.  Between 2000 and 2006, exports of agricultu ral products almost tripled.  According to 
estimates by the Peruvian authorities, the percentage  of the labour force working in the agricultural 
sector appears to have risen, from 32.4 per cen t in 2000 to roughly 37 per cent in 2006. 
12. The Ministry of Agriculture is respons ible for formulating agricultural policy1, which seeks to 
promote and implement modernization of the agricultural sector and raise living standards for farmers and the rural population.
2  Since early 2007, the Ministry of Agriculture has had a Working 
Commission responsible for formulating gove rnment policy for developing agriculture.3  T h i s  
Commission has drawn up a preliminary proposal on  government policy, which was the subject of 
public consultations in April 2007.4 
Table IV.1  
Selected indicators in the agricultural sector, 2000-2006  
 2000 2001 2002 2003 2004 2005 2006 
Share of GDP  (%)a 
Agriculture, hunting and forestry 8.9 8.9 9.0 8.8 8.5 8.4 8.3 
Agricultural production ('000 tonnes) 
Cotton 153.8 134.1 127.4 126.1 187.7 207.3 213.4 
Rice 1,892.1 2,028.7 2,124.1 2,135.7 1,848.0 2,468.4 2,360.2 
Coffee 158.3 159.9 169.4 169.5 224.6 175.0 256.0 
Sugar cane  7,132.0 7,382.9 8,419.2 8,864.0 6,945.7 6,304.1 7,251.3 
Beans  69.8 61.0 62.6 59.4 59.5 71.5 83.0 
Yellow flint maize 959.7 1,062.5 1,036.9 1,097.6 982.9 999.3 1,009.7 
Table IV.1 (cont'd) 
                                                      
1 Regulations on the Organization and Functions of the Ministry of Agriculture, approved by Supreme 
Decree No. 017-2001-AG of 19 April 2001. 
2 Supreme Decree No. 072-2006 -AG of 17 December 2006. 
3 The Commission was set up by Ministerial Resolution No. 119-2007-AG of 2 February 2007. 
4 Ministry of Agriculture (2007b). Peru WT/TPR/S/189/Rev.1 
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 2000 2001 2002 2003 2004 2005 2006 
Flour maize 281.1 253.3 252.8 259.3 217.7 241.5 249.0 
Potatoes 3,273.8 2,680.1 3,299.4 3,151.2 3,005.8 3,289.7 3,224.2 
Wheat 189.0 181.9 186.3 190.6 170.5 178.5 191.0 
Cocoa 24.9 23.6 24.3 24.2 25.9 25.3 30.2 
Sweet potatoes 244.6 253.9 223.9 192.8 184.4 184.4 194.8 
Barley 186.2 177.4 198.0 193.7 177.6 193.1 191.7 
Asparagus 168.4 184.1 181.2 187.2 187.9 206.0 242.5 
Marigolds 197.9 119.6 114.2 175.7 107.2 122.7 53.7 
Oil palms 140.1 176.0 149.0 180.4 208.5 198.2 231.7 
Yuccas 882.0 859.1 886.6 909. 5 974.8 1.004. 5 1.096.5 
Onions 380.4 415.8 458.2 472.8 515.4 493.3 576.4 
Corn cobs 360.4 363.1 392.4 401.7 376.2 347.6 361.2 
Tomatoes 249.7 188.7 130.1 148.9 183.5 159.3 158.5 
Lemons 228.6 194.5 244.5 241.9 202.4 217.3 251.1 
Mangoes 127.3 144.5 181.4 198.1 273.2 234.8 320.7 
Apples 157.8 138.0 123.7 134.3 146.2 139.2 136.4 
Oranges 270.4 278.4 292.6 305.7 330.0 334.3 354.9 
Plantains 1,529.5 1,557.7 1,570.0 1,618.7 1,663.3 1,697.1 1,766.8 
Livestock production  ('000 tonnes)  
Poultry 969.5 1,023.8 1,092.1 1,011.1 1,063.2 1,165.1 1,255.3 
Eggs  162.3 167.6 199.7 181.8 175.5 182.3 203.1 
Milk 1,067.0 1,115.0 1,194.4 1,226.1 1,269.5 1,329.7 1,425.8 
Sheep 78.3 79.4 79.4 80.7 84.2 84.4 84.8 
Swine 126.3 149.9 149.1 114.2 130.6 137.2 143.9 
Cattle 267.1 270.2 277.5 284.2 287.0 300.2 317.2 
Tradeb (US$ millions) 
Exports 642.9 644.2 766.0 847.7 1,125.7 1,339.3 1,784.5 
Imports 907.4 1,032.3 1,069.8 1,139.5 1,383.8 1,515.6 1,659.1 
a 1994 constant values. 
b According to the Ministry of Agriculture 's definition of "agricultural products". 
Source : WTO Secretariat, based on information from the Central Reserve Bank onlin e (http://www1.bcrp.gob.pe/ 
VariablesFame/csm_01.asp), Memoria Anual 2005  (http://www.bcrp.gob.pe/bcr /Memoria-Anual/Memoria-2005-
2.html) and information provided by the Peruvian authorities. 
13. The Ministry of Agriculture has indicated that, in general, the agricultural sector's 
competitiveness and profitability are low, reflectin g factors such as producers' limited access to 
markets, information and financi ng;  inadequate investment;  fra gmented land ownership;  and an 
inexpedient taxation system.5  The Peruvian authorities have st ated that the State's policy for 
developing agriculture is a long-term strategy  that seeks to resolve the sector's problems and 
encourage sustained growth, taking advantage of  the opportunities afforded by global markets and 
improving income distribution. 
(ii) Border measures 
14. In early 2007, the average MFN tariff applied in the agricultural sector (according to the 
WTO definition) was 14.9 per cent, close to twice th e average of that for the other sectors (see also 
Chapter III(2)(iv)).  The Peruvian authorities have poi nted out that it is hoped to lower the effective 
tariff protection rates in the sector substan tially through preferential trade agreements. 
15. In 2001, Peru lowered the tariff surcharge from 10 to 5 per cent (called the "additional tariff 
surtax" and subsequently "additional tariff duty"),  which had applied to 56 meat products since 1999 
and to four lines for rice since 2000.6   It also abolished the 5 per cent surcharge applied to yellow flint 
maize.7  In April 2007, 5 per cent tariff surcharges were  imposed on 392 10-digit tariff lines most of 
                                                      
5 Ministry of Agriculture (2007b). 
6 Article 1 of Supreme Decree No. 016-2001-EF of 30 January 2001 and Article 1 of Supreme Decree 
No. 114-2001-EF of 22 June 2001. 
7 Supreme Decree No. 113-2001-EF of 22 June 2001. WT/TPR/S/189/Rev.1 Trade Policy Review 
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which corresponded to products in chapters 1-24 of  the HS.  The majority of these surcharges had 
been imposed temporarily in 1997.8  They are calculated on the basis of the c.i.f. value of imports and 
apply to imports irrespective of origin. 
16. In mid-2001, Peru replaced the variable speci fic duty scheme that had applied to certain 
agricultural products since 1991 by a "price band scheme".9  Under the regulations, this scheme is "a 
stabilization and protection mechanism that enables the fl uctuations in international prices to be offset 
and limits the negative impact of a fall in these pri ces [and which] constitutes an effective instrument 
for raising domestic producers' productivity levels by giving the market clear signals regarding price 
trends … ".10  The price band scheme applies to  46 10-digit tariff lines in the HS.11 
17. Under the price band scheme, tariffs are determined according to the position of each 
product's price on an international reference market in  relation to the "band", composed of "floor" and 
"ceiling" prices determined on the basis of previo us prices.  When the price on the international 
reference market is below the floor price, a ta riff surcharge is imposed.  When the price on the 
international reference market rises above the ceiling pr ice, a tariff reduction is applied.  Lastly, if the 
reference price is between the ceiling and floor prices, the corresponding tariff rate applies. 
18. Every fortnight, the Ministry of Economy and Fi nance publishes four reference prices, one for 
each "marker" product subject to the price band schem e, namely, rice, yellow maize, sugar and milk.  
These are derived from the average prices for the previous fortnight on the corresponding 
international reference market, converted into c.i. f. prices.  The reference markets are defined in 
Annex IV to Supreme Decree No. 115-2001-EF of  22 June 2001 and amendments thereto. 
19. The band's floor price is based on the average of prices in the reference markets over the 
previous 60 months, converted into constant dollars  using the United States consumer price index and 
excluding prices outside a confidence interval.  Fo r sugar, the average obtained is multiplied by a 
factor of 1.107.12  The ceiling price is obtained by adding a standard variation to the floor price.  
Tariff surcharges or reductions correspond to the amount required to enable the reference price 
adjusted according to import costs to equal the floor or ceiling price adjusted according to import 
costs.  The surcharges or reductions are applied in the form of specific tariffs.  Even though Article 6 
of Supreme Decree No. 115-2001-EF of 22 June 2001 s tipulates that the floor and ceiling prices must 
be updated every six months, there has only been one update since 2001.13 
20. Products that are not marker products but ar e subject to the price band scheme are called 
"related" products.  These are substitutes for the mark er products or processed versions thereof.  The 
tariff surcharges or reductions applicable to re lated products are the sa me as those for marker 
products. 
21. Pursuant to Article 4 of Supreme Decree  No. 153-2002-EF of 27 September 2002, the 
surcharges resulting from application of the pri ce band scheme, added to the corresponding tariff 
duties, may not exceed the rates bound at the WTO.   Moreover, the minimum tariff that can be 
                                                      
8 Article 3 of Supreme Decree No. 035-97-EF of 13 April 1997. 
9 Article 1 of Supreme Decree No. 115-2001-EF of 22 June 2001. 
10 Supreme Decree No. 115-2001-EF of 22 June 2001 . 
11 The products subject to this measure are listed in  Annex IV to Supreme D ecree No. 115-2001-EF of 
22 June 2001. 
12 Supreme Decree No. 003-2006-EF of 13 January 2006. 
13 Updates for the floor and ceiling prices for rice, yellow maize and powdered milk are contained in 
Supreme Decree No. 001-2002-EF of 4 January 2002 and the update for sugar in Supreme Decree No. 153-2002-EF of 27 September 2002. Peru WT/TPR/S/189/Rev.1 
 Page 67 
 
 
applied to a product subject to the price band scheme is zero, even if the calculation of the tariff duty 
results in a negative figure, for example, if there is a steep increase in the reference price.14 
22. Between mid-2001 and 2005, the price band sch eme generated revenue  of US$65 million.15 
23. The variable specific duty scheme applied by Pe ru up to 2001 did not fix ceiling prices but 
only floor prices.  Consequently, the only possible ad justment was a tariff surcharge.  On the other 
hand, the adjustments under the price band scheme may be in the form of tariff surcharges or 
reductions.  A recent study has, however, identifie d several problems caused by application of the 
new scheme, for example, the introduction of a correcti on factor in order to calculate the floor price of 
sugar and the absence of regular upda tes of the floor and ceiling prices.16 
24. Peru did not include any products in section I-B  of its Schedule of Commitments, so it does 
not have the right to apply tariff quotas within the WTO framework. 
25. Legislative Decree No. 653 of 1 August 1991 bans  the import of dairy inputs used to produce 
certain products for human consumption.  The purpo se of this measure is to promote milk production 
in Peru (Chapter III(4)(iv)).  The authorities have indicated that, in practice, this measure is not 
applied. 
(iii) Other measures 
26. In its latest notification to the WTO on export subsidies for agricultura l products, submitted in 
2003, Peru notified that no such subsid ies had been granted between 2000 and 2002.17  Peru's latest 
notification of commitments on domestic support m easures, submitted in 1999,  covers the period 
1995-1997. 
27. Budgetary spending on the agricultural sector by the central and regional governments was 
S/. 932 million in 2006 (approximately US$284.6 million), some 80 per cent more than in 2005. 
28. Law No. 28811 of 22 July 2006 established a programme to compensate producers of cotton, 
yellow flint maize and wheat for the drop in tariffs  resulting from approval of the free trade agreement 
between Peru and the United States.  The progra mme, which will be implemented once the agreement 
has come into effect, establishes direct payment per unit sold "for industrial processing".18 
29. Law No. 27360 of 31 October 2000 establishes a 15 per cent rate of income tax on "persons 
engaged in growing crops and/or ra ising livestock" (the general inco me tax rate is 30 per cent, see 
Chapter III(4)(i)).  The 15 per cent income tax also applies to agro-industrial companies situated 
outside the provinces of Lima and El Callao enga ged in producing, processing and preserving meat 
and meat products;  processing and preserving fruit and vegetables;  and processing sugar.  In order to 
be eligible for this benefit, 90 per cent of the tota l value of the agro-industrial companies' inputs must 
                                                      
14 Article 8 of Supreme Decree No. 115-2001-EF of 22 June 2001. 
15 Information provided by the Superintendencia Nacional de Administración Tributaria (National Tax 
Administration Supervisory Authority). 
16 Rebosio Arana (2006). 
17 WTO documents G/AG/N/PER/6 of 16 October 2003 and G/AG/N/PER/5 of 12 June 2002. 
18 Article 3 of Law No. 28811 of 22 July 2006. WT/TPR/S/189/Rev.1 Trade Policy Review 
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be of Peruvian origin (not including the packaging).19   According to the Peruvian authorities, there is 
no inspection mechanism to ensure compliance with this requirement. 
30. The beneficiaries of the reduced rate of income tax are also eligible for advance refund of the 
general sales tax (IGV) and the municipal promoti on tax paid on imports and purchases in Peru of 
"capital goods, inputs, construction services and cont racts" during the "pre-production" phase of the 
investment20, which may not exceed five years.  Poultry producers situated outside the provinces of 
Lima and El Callao are only eligible for Law No. 27360 if they use yellow flint maize of Peruvian origin. 
31. Until 2004, the State took charge of the payment of tariff duties, IGV and the municipal 
promotion tax for the import and sale of "fertilizers,  agro-chemicals, modern irrigation equipment, 
breeding cattle, registered heifers certified pregnant, and wool sheep for breeding".
21  Legislative 
Decree No. 956 of 5 February 2004 abolished this benefit. 
32. Agricultural producers with annual sales of 50 tax units (UITs) (S/. 172,500 or around 
US$54,200 in 2007) or less were exempt from payment of income tax until December 2002 and 
payment of the IGV and municipal promotion tax until December 2003.22  Imports and first sale of 
pounded rice are subject to a 4 per cent tax on the sale of pounded rice but not to the IGV or the 
municipal promotion tax (Chapter III(2)(v)). 
33. The Ministry of Economy and Finance estimates that the tax benefits enjoyed by the 
agricultural sector will amount to some S/. 1,214.3 million in 2007 (corresponding to 
US$381.5 million).23 
34. Credit in the agricultural sector was roughly US $539 million in 2006;  agricultural producers 
benefiting from formal credit that year represented 1.4 per cent of the total.24  The debt owed to the 
financial system by agricultural producers is US$538. 4 million.  Approximately 7 per cent of this total 
is refinanced debt and another 16 per cent is debt in arrears. 
35. The Agricultural Bank (or AGROBANCO), whic h has both government and private capital, 
was set up in 2001 under private law and grants lo ans to agricultural produ cers, livestock breeders, 
foresters and fish farmers, either direct ly or through other financing institutions.25  According to the 
Peruvian authorities, direct loans are at market in terest rates.  In September 2006, the State doubled 
the Agricultural Bank's capital to S/. 260 million (some US$79.4 million).26 
36. Peru has various programmes intended to alleviat e agricultural producers' debt.  For example, 
through the Programa Especial de Regul arización Tributaria – PERTA (Special Tax Regularization 
Programme) and the Régimen Extraordinario de  Regularización  Financiera  – RERF (Special 
Financial Regularization Regime) some agricultural producers are able to reduce or refinance their 
debts with the State.  Both programmes have been  operating since the second half of the 1990s, but 
the deadline for eligibility for th em has been extended on numerous occasions, most recently in 
                                                      
19 Article 2.2-2.4 of Law No. 27360 of 31 October 2000 and Supreme Decree No. 007-2002-AG of 
8 February 2002. 
20 Article 5 of Law No. 27360 of 31 October 2000. 
21 Law No. 27400 of 18 January 2001. 
22 Article 1 of Law No. 27445 of 21 April 2001. 
23 MEF (2006). 
24 Ministry of Agriculture (2007b). 
25 Law No. 27603 of 21 December 2001. 
26 Law No. 28881 of 16 September 2006. Peru WT/TPR/S/189/Rev.1 
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May 2006.27  In October 2000, the Programa de Rescate Financiero (Financial Redemption 
Programme) was approved allowing the State to refinance part of the debt of agricultural producers.28  
The amount of the debt refinanced under this programme is US$229.4 million.  Law No. 28752 of 
6 June 2006 wrote off the debt of agricultura l producers under the Ministry of Agriculture's Programa 
de Fondos Rotatorios (Rotating Fund Programme), in effect from 1992 to 2003.29  The amount of the 
debt written off was S/. 521.7 million (some US$163.9 million).  In 2003, Peru adopted provisions to 
capitalize the tax debt generated at May 2003 by su gar companies in which the State had a majority 
holding.30 
37. In recent years, Peru has adopted regulations  providing guarantee and insurance instruments 
for the agricultural sector.  Law No. 28818 of 22 July 2006 established the Fondo de Garantía para la 
Pequeña Agricultura (Guarantee Fund for Small-Scale Agricultu re) in order to "cover and guarantee 
loans granted to small producers in  the agricultural sector".  Law No. 28995 of 1 April 2007 created 
the Fondo de Garantía para el Ca mpo y del Seguro Agropecuario (Guarantee Fund for Rural Areas 
and Agricultural Insurance) in order to "guarant ee the loans granted by financing institutions to 
medium and small rural producers … [and] to fina nce agricultural insurance mechanisms …".  By 
mid-2007, these mechanisms were not yet opera ting as the corresponding implementing regulations 
had not come into effect. 
38. In March 2007, the Ministry of Agriculture approved the Plan de Desarrollo Agrario para 
Zonas Cocaleras (Agrarian Development Plan for Coca-Growing Areas), which is aimed at the 
conversion of coca crops.31  The Plan proposes to expend US$83. 7 million for this purpose between 
2007 and 2011. 
39. The Peruvian authorities have indicated that th ere have been no official marketing or price 
control measures in the agricultural sector since 1990. 
(3) FISHING  
40. Together with some other Members of the WT O, Peru has advocated a broad ban on fishery 
subsidies under the Doha Round.32 
41. The fishery sector (including related processing activities) accounted for 1.1 per cent of GDP 
in 2006 (Table IV.2).  Even though their value h as increased since 2000, exports of fishery products 
have become less important as a proportion of to tal exports, declining from 16.3 per cent in 2000 to 
7.4 per cent in 2006.  Peru nevertheless still remain s one of the world's major exporters of fishmeal. 
                                                      
27 The PERTA is based on Legislative Decree No. 877 of 7 November 1996, Supreme Decree 
No. 107-98-EF of 28 November 1998 and Law No. 28467 of 13 January 2005.  The RERF is based on Law 
No. 26803 of 16 July 1997, Supreme Decrees Nos. 99-97-EF and 108-98-EF and Law No. 28467.  Law No. 28745 of 25 May 2006 determined that the deadline for eligibility for these programmes was 30 July 2007. 
28 Article 2 of Emergency Decree No. 059-2000 of 16 August 2000. 
29 The Rotating Fund Programme was abolished by Supreme Decree No. 008-2003-AG of 
20 February 2003. 
30 Article 2 of Law No. 28027 of 18 July 2003. 
31 Ministry of Agriculture (2007a). 
32 See, for example, WTO document TN/RL/W/196 of 22 November 2005. WT/TPR/S/189/Rev.1 Trade Policy Review 
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Table IV.2 
Selected indicators in the fishery sector, 2000-2006  
 2000 2001 2002 2003 2004 2005 2006 
Share of GDP (%)a 
Fishing 0.6 0.5 0.5 0.4 0.6 0.5 0.5 
Fish processing 0.2 0.2 0.2 0.2 0.2 0.2 0.3 
Fishmeal and fish oil 0.7 0.5 0.5 0.3 0.5 0.4 0.3 
Production ('000 gross tonnes) 
 Unloaded 10,660.7 7,994.5 8,774.5 6,097.5 9,618.5 9,400.3 6,998.3 
 Processing 2,990.3 2,129.9 2,170.9 1,644.7 2,534.2 2,444.3 1,962.0 
 Canned 77.2 81.6 35.3 91.6 45.4 55.5 106.5 
 Frozen 63.0 83.3 86.0 99.8 144.1 145.6 217.6 
 Cured 21.1 26.4 21.5 22.7 23.5 22.1 22.9 
 Fishmeal 2,241.5 1,635.4 1,839.2 1,224.5 1,971.4 1,930.7 1,340.5 
 Unrefined fish oil 587.3 302.9 188.9 206.2 349.8 290.4 274.5 
Exports 
 Fishery productsb (US$ millions) 1,131.6 1,124.0 1, 055.7 1,027.1 1,381. 3 1,626.4 1,749.5 
 Percentage of total exports 16.3 17.4 13.7 11.3 10.8 9.4 7.6 
Percentage of exports of fishery products 
Fishmeal 77.2 74.3 77.8 72.3 69.2 70.6 64.4 
Fish oil 7.1 8.1 6.6 7.8 10.7 9.0 10.5 
a 1994 constant values. 
b According to the Ministry of Production's definition. 
Source : WTO Secretariat, based on information provided by the Peruvian authorities. 
42. The authority responsible for formulating the sector's policy is the Ministry of Production.33  
Formerly, this was the responsibility of the Minist ry of Fisheries but it ceased to exist in 2002.34  The 
Instituto del Mar del Perú – IMARPE  (Peruvian Marine Institute) advises the Ministry of Production 
on the management of fishery resources.  The main objectives of fishery policy are to promote the sustainable development of fishing as a source of  food, jobs and income and to ensure that 
hydrobiological resources are used in a way that is consistent with envi ronmental protection and 
conservation of biological diversity. 
43. Pursuant to the General Law on Fisheries, fore ign-registered fishing vessels may only conduct 
fishing operations "against the surplus of allo wable catch unused by the national fishing fleet".
35  The 
Law lays down the conditions for access to fish ery resources by foreign-registered vessels.36  These 
include fishing for "occasional, highly migratory or under-exploited resources" or the signing of an 
agreement with a Peruvian compan y to exploit certain resources. 
44. A fishing permit is required for access to fishery resources and the Ministry of Production is 
responsible for issuing it.  In order to obtain a perm it, the owner of a foreign-registered vessel must be 
domiciled in Peru and have a legal representative there.   In addition, a letter of credit must be made 
out to the Ministry of Production corresponding to  25 per cent of the "fishing rights" (see below).  
This requirement does not apply to Peruvian-register ed vessels.  Foreign-registered vessels must have 
on board a "scientific technical observer" appoi nted by the IMARPE and a satellite monitoring 
system;  and at least 30 per cent of the crew must be Peruvian nationals.37  Fishing permits for 
foreign-registered vessels may not be assigned. 
                                                      
33 Article 8 of the Regulations on the Organization and Functions of the Ministry of Production, 
approved by Supreme Decree No. 010-2006-PRODUCE of 5 May 2006. 
34 See Law No. 27779 of 11 July 2002. 
35 Article 47 of Decree Law No. 25977 of 22 December 1992. 
36 Article 48 idem . 
37 Article 70 of the Implementing Regulations for the General Law on Fisheries, approved by Supreme 
Decree No. 012-2001-PE of 14 March 2001. Peru WT/TPR/S/189/Rev.1 
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45. Fees must be paid for exploiting fishery resources.38  For foreign-registered tuna fishing 
vessels, the fee for a fishing permit is US$25 per net registered tonne (NRT) for a three-month 
period.39  This figure falls to US$10 for foreign-regi stered tuna fishing vessels whose catch goes to 
industrial facilities that have been given an opera ting licence by the Ministry of Production.  For 
Peruvian tuna fishing vessels, the amount payable for fishing permits is US$10 per NRT per annum. 
46. The fishery regulations do not impose restrictions on foreign capital holdings in Peruvian 
vessels or in aquaculture activities.  There are no r estrictions either on marketing fishery products on 
national or international markets.40  Nevertheless, the import and export of hydrobiological resources 
must be authorized (Chapter III(2)(vi) and (3)(iii)). 
47. Law No. 27460 of 26 May 2001 provides for a 15 per cent rate of income tax for 
aquaculture.41  Aquaculture is also eligible for ad vance refund of the IGV and the municipal 
promotion tax paid on imports and purchases in Pe ru of "capital goods, inputs, construction services 
and contracts" during the "pre-production" phase of an investment, which may not exceed five years. 
48. The sale of fuel to foreign-registered vessels in possession of fishing permits granted by Peru 
or by other countries and catching "highly migratory"  hydrobiological resources is not subject to the 
IGV, the municipal promotion tax or the selective c onsumption tax, provided that the vessel unloads 
at least 30 per cent of the cargo in its hold at a Peruvian industrial plant.42 
49. The Fondo Nacional de Desarrollo Pesquero – FONDEPES (National Fisheries 
Development Fund) set up in 1992, provides small- scale fishermen and fish farmers with technical 
and economic support.  In 2005, the FONDEPES gr anted 348 loans for an amount of US$566,380.43  
Of this amount, 65 per cent goes to repair and equip vessels.  In 2005, the FONDEPES also carried 
out building and maintenance work on infrastructure amounting to S/. 893,170 (approximately US$271,000). 
50. During the previous review of Peru's trade polic y, the Peruvian authorities indicated that the 
surplus capacity in the fishing industry was attributab le to the high yield in its pelagic fish industry 
producing fishmeal and fish oil.
44  In connection with the present review, the authorities indicated 
that, in mid-2006, the possibility of adopting a sy stem for managing fishery resources based on the 
allocation of transferable individual quotas, such as that already existing for cod, was being discussed. 
(4) MINING , EXCLUDING HYDROCARBONS  
51. Mineral mining increased its share of GDP from 5 per cent in 2000 to 5.6 per cent in 2006 
(Table IV.3).  This is a reflection of the sharp rise in output in recent years, which has enabled Peru to 
reinforce its position as a leading global producer of  mineral products.  In 2006, it was the largest 
global producer of silver;  the second for tellurium;  th e third for zinc, tin, bismuth and copper;  fourth 
                                                      
38 Article 40, idem . 
39 Article 7 of the Implementing Regulations for th e Tuna Fishing Plan, appr oved by Supreme Decree 
No. 014-2001-PE of 31 March 2001. 
40 Article 30 of Decree Law No. 25977 of 22 December 1992. 
41 Article 26. 
42 Article 2 of Law No. 28965 of 24 January 2007. 
43 Information from the FONDEPES online.  Consu lted at:  http://www.fondepes.gob.pe/logrocredito 
2005.html [1 May 2007]. 
44 WTO document WT/TPR/M/69 of 19 July 2000. WT/TPR/S/189/Rev.1 Trade Policy Review 
Page 72 
 
 
for lead and molybdenum;  and fifth for gold.45  The processing of non-ferrous metals accounted for 
close to 1 per cent of the GDP throughout the period 2000-2006. 
52. The volume of mining exports in the total volum e of exports has risen considerably since 
2000, from 46.3 per cent to 62 per cent in 2006.  This is the result of an increase not only in the 
volume exported but also in prices.  Copper and gol d accounted for some two thirds of mining exports 
in 2005. 
53. The mining sector is one of those that receive the largest amount of investment.  After the 
sharp decline in 2000 and 2003, inv estment in mining has reached levels close to those at the end of 
the 1990s.  The Ministry of Energy and Mines estimates that between 2007 and 2014 the sector will 
receive investment amounting to some US$11,500 m illion.  The Peruvian authorities have indicated 
that, in mid-2007, there were no government -owned companies in the mining sector. 
Table IV.3 
Selected indicators in the mining sector, 2000-2006  
 2000 2001 2002 2003 2004 2005 2006 
Share of GDP (%)a  
Mineral mining 5.0 5.5 5.9 6.0 6.0 6.1 5.6 
Non-ferrous metal processing 0.8 0.8 0.9 1.0 0.9 0.9 0.8 
Production (fine tonnes, unless otherwise indicated)   
Copper  722,355 844,553 842,605 1,035,574 1,009,899 1,049,933 
Goldb  138,522 157,530 172,625 173,224 208,002 203,269 
Zinc  1,056,629 1,232,997 1,373,792 1,209,006 1,201,671 1,201,794 
Silverb  2,571,114 2,869,639 2,923,688 3,059,962 3,205,673 3,470,725 
Lead  289,546 305,651 309,164 306,211 319,368 313,325 
Cadmium  485 422 529 532 481 416 
Ironc  3,038,401 3,056,055 3,484,900 4,247,174 4,564,989 4,784,601 
Tin  38,182 38,815 40,202 41,613 42,145 38,470 
Molybdenum  9,499 8,613 9,590 14,246 17,325 17,209 
Exports  
Mining productsd (US$ millions) 3.220.2 3,205.2 3,809.0 4,689.8 7,123.8 9,759.4 14,715.8 
 Percentage of total exports 46.3 45.6 49.4 51.6 55.6 56.3 62.0 
Percentage of mineral exportse  
Copper 29.0 30.8 31.2 26.9 34.8 34.4 41.0 
Tin 5.3 4.7 4.1 4.5 4.9 2.8 2.3 
Iron 2.1 2.5 2.2 2.0 1.8 2.2 1.7 
Gold 35.5 36.4 39.4 44.8 34.0 32.4 27.5 
Refined silver 5.6 5.3 4.6 4.1 3.7 2.9 3.3 
Leadf 5.9 6.1 5.5 4.3 5.5 5.0 4.8 
Zinc 15.4 13.1 11.3 11.3 8.1 8.2 13.5 
Other 1.3 1.2 1.8 2.2 7.3 12.0 5.9 
Mining investment 
(US$ millions) 1,502 1,146 420 462 850 1,085 1,384 
a 1994 constant values. 
b Fine kilograms. 
c Fine long tonnes. d According to the definition of the Ministry of Energy and Mines. 
e The total does not add up to 100 per cent as  not all mineral products are included. 
f Including silver content. 
Source : WTO Secretariat, based on information provided by the Pe ruvian authorities and information from the Ministry of 
Energy and Mines online.  Consulted at:  h ttp://www.minem.gob.pe/miner ia/estad_inicio.asp. 
                                                      
45 Information from PROINVERSIÓN online.  Consulted at:  http://www.proinversion.gob.pe/0/0/ 
modulos/JER/PlantillaSectorHijo.aspx?AR E=0&PFL=0&JER=85 [30 April 2007]. Peru WT/TPR/S/189/Rev.1 
 Page 73 
 
 
54. The mining policy's aim is:  to encourage the updating of mining regulations so as to optimize 
legal stability for investment, to improve the co nditions for private investment;  to boost the 
development of mining activities with better safety c onditions for workers and for society, to protect 
the environment and maintain harmonious relati ons with the community;  and to reinforce 
supervision.46  The Ministry of Energy and Mines is responsible for formulating mining policy.47  The 
Organismo Supervisor de la Inversión de Energía y Minería –  OSINERGMIN (Supervisory Authority 
for Investment in Energy and Mining) has been responsible since early 2007 for supervising and 
monitoring the sector as far as safety and the environment are concerned.48  This task was previously 
the responsibility of the Ministry of Energy and Mines. 
55. The regulations do not lay down any limitati ons on foreign capital holdings in mineral 
exploration, exploitation or processing.  Explor ation and exploitation re quire a mining concession.49   
Companies set up abroad may become established in Peru in order to engage in exploration and 
exploitation through either a branch or a subsidiary .  Concessions are granted for an unlimited period, 
although a penalty is imposed if by the sixth year after granting of the concession no specific investment has been made or production has not ye t started.  Companies with foreign holdings must 
obtain an authorization through a supreme decree before  starting exploration or exploitation in an area 
situated within 50 kilome tres or less of the border.
50  Since 2000, 12 such authorizations have been 
given to foreign companies and no request has been rejected. 
56. The State levies various fees for mineral exploration and exploitation.  For example, since 
mid-2004, investors have paid ro yalties for exploiting minerals.51  These range from 1 to 3 per cent of 
the value of the concentrate (or its equivalent) mine d.  "Small" or "artisanal" producers do not have to 
pay royalties.  The General Law on Mining defines these two categories of producer.52  Holders of 
mining concessions must pay an annual fee for the concession, which varies according to its size.53  
Mining companies must distribute 8 per cent of their profits before tax to their employees.54 
57. Under the Programa Minero de Solidaridad con el Pueblo (Solidarity with the People Mining 
Programme), since the end of 2006 the State has encouraged mining companies to sign agreements 
under which they agree to transfer 3.75 per cent of th eir annual net profits to special funds for social 
projects and infrastructure in particular.55  These contributions cannot be deducted from the 
companies' taxes, but those companies which pa y royalties may deduct part of these from their 
contributions.  Payment of contributions is suspende d in those years in which annual global prices of 
certain metals produced by the companies are below th e reference prices specified in the agreement.  
In principle, the agreements remain in force for five years.  By mid-2007, 24 companies had signed 
agreements with the State.  The Ministry of Energy and Mines estimates that contributions by 
companies will amount to S/. 2.5 billion between 2007 and 2012 (some US$785.4 million). 
                                                      
46 Ministry of Energy and Mines (2005). 
47 Article 6 of the Regulations on the Organization and Functions of the Ministry of Energy and Mines, 
approved by Supreme Decree No. 025-2003-EM of 28 June 2003. 
48 Law No. 28964 of 24 January 2007. 
49 Article 9 of the Single Harmonized Text of the General Law on Mining, approved by Supreme 
Decree No. 014-92-EM of 3 June 1992. 
50 Article 13 of Legislative Decree No. 757 of 13 November 1991. 
51 Article 2 of Law No. 28258 of 24 June 2004. 
52 Article 91 of the Single Harmonized Text of the General Law on Mining, approved by Supreme 
Decree No. 014-92-EM of 3 June 1992. 
53 Article 39, idem . 
54 Article 2 of Legislative Decree No. 677 of 7 October 1991. 
55 Supreme Decree No. 071-2006 -EM of 21 December 2006. WT/TPR/S/189/Rev.1 Trade Policy Review 
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58. The mining sector is eligible for several tax benefits.  For example, mining companies may 
deduct the investment made in "public service infrastructure".56  Law No. 27623 of 8 January 2002 
gives holders of mining concessions the right to definitive refund of the IGV and the municipal promotion tax paid on the import and purchase of "goods, supply or utilization of construction 
services and contracts directly used to carry out exploration activities" for mineral resources.
57  This 
benefit is only available to companies that invest a minimum of US$500,000.58  Until 
September 2000, only the profits distributed (and not those reinvested) by mining companies were 
subject to income tax.  Peru abolished this benefit through Law No. 27343 of 6 September 2000. 
59. The Ministry of Economy and Finance estimates th at the tax benefits available to the mining 
sector will amount to around S/. 376.6 million in  2007 (corresponding to US$118.3 million).59 
60. Holders of mining concessions may enter into ta x stability agreements with the State, in 
addition to the "legal stability agreements" ava ilable to investors in any sector (Chapter II(4)).60  Tax 
stability agreements freeze income tax at the rate in effect at the time the ag reement was signed plus 
two percentage points.61  The tax benefits in effect at the time the agreement was signed are also 
frozen, but only for the period prescrib ed in the legal instrument under which the benefits are granted.  
The agreements do not cover the rates of IGV,  the municipal promotion tax, the selective 
consumption tax or other consumption taxes, or ta xes imposed after the agreement has been signed.  
The term of the agreement varies depending on th e production capacity of the company signing it.  
Companies whose production capacity ranges from 350 to 5,000 tonnes daily may sign agreements for ten years, while companies with larger capacity may sign them for 15 years.  At least US$2 million 
must be invested in a new project in order to sign a ten-year agreement.  The minimum amount for 
15-year agreements is US$20 million invested in new projects or US$50 million in existing projects. 
(5) H
YDROCARBONS , INCLUDING THOSE DERIVED FROM PETROLEUM  
61. Petroleum extraction and refining accounted for 1.2 per cent of the GDP in 2005.  From 2004 
onwards, the year in which the Camisea deposit  started to produce, the downward trend in 
hydrocarbons production that had prevailed in previous  years was reversed (Table IV.4).  The recent 
increase in hydrocarbons output is mainly attributable to the expansion in production of natural gas.  
The hydrocarbons trade balance has traditionally shown a deficit. 
62. Since 2003, investment in hydrocarbons explora tion has surged after a period of stagnation 
(Table IV.4).  Investment in hydrocarbons expl oitation has shown a clear upward trend since 2000.  
Around 90 per cent of the investment in exploration and exploitation comes from abroad.  In 
February 2000, following an international public i nvitation to tender, Peru awarded the licence for 
exploiting the hydrocarbons in the San Martín and Cashiriari deposits (known as "Lot 88" or 
Camisea), which contain one of the largest non-asso ciated natural gas reserves in Latin America.62 
                                                      
56 Article 72 of the Single Harmonized Text of the General Law on Mining, approved by Supreme 
Decree No. 014-92-EM of 3 June 1992. 
57 Article 2. 
58 Article 14 of the Implementing Regulations for Law No. 27623, approved by Supreme Decree 
No. 082-2002-EF of 16 May 2002. 
59 MEF (2006). 
60 Articles 78, 79, 82 and 83 of the Single Harmonized Text of the General Law on Mining, approved 
by Supreme Decree No. 014-92-EM of 3 June 1992. 
61 Article 1 of Law No. 27343 of 6 September 2000. 
62 The licence agreement was approved by Supreme Decree No. 021-2000-EM of 6 December 2000. Peru WT/TPR/S/189/Rev.1 
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Table IV.4 
Selected indicators in the hydrocarbons sector, 2000-2006  
 2000 2001 2002 2003 2004 2005 2006 
Share of GDP (%)a 
Petroleum extraction 0.5 0.5 0.5 0.4 0.4 0.5 .. 
Petroleum refining 0.7 0.7 0.7 0.6 0.6 0.7 .. 
Production 
Natural gas (millions of cubic feet/day) .. 35.8 42.7 52.6 82.9 146.2 171.8 
Crude oil (thousands of barrels/day)b .. 97.1 96.9 91.4 94.1 111.3 115.6 
Trade in fuelc (US$ millions) 
Exports 403.6 414.0 471.9 667.9 694.2 1,595.9 1,901.8 
Imports 1,156.4 969.9 1,033.6 1,457.4 1,886.2 2,471.1 2,959.7 
Investment  (US$ millions) 
Exploration 12.1 30.5 31.2 12.2 41.9 95.8 107.8 
Exploitation 112.8 165.6 351.8 347.4 233.4 253.7 580.5 
.. Not available. 
a 1994 constant values. 
b Including petroleum and natural gas liquids. 
c According to the SITC, revision 3, definition. 
Source : WTO Secretariat, based on information from the Central Reserve Bank of Peru (several years), Memoria  Anual  
(http://www.bcrp.gob.pe/ bcr/Memoria- Anual/Memoria-Anual.html),  Ministry of Energy and Mines (several 
years), United Nations Comtrade Database and info rmation provided by the Peruvian authorities. 
63. An INDECOPI study found that the structur e of the domestic hydrocarbons market was 
defined by high levels of concen tration and vertical integration.63  For example, two companies (one 
private and the other government-owned) possess almost all refining capacity.  They are also both active in marketing and distributing fuel.  In mid-2006, a law was adopted under which 
PETROPERÚ, the government-owned hydrocarbons company, was removed from FONAFE 
supervision (Chapter III(4)(iii)).
64 
64. The Ministry of Energy and Mines formulates policy in the hydrocarbons sector.65  
OSINERGMIN plays a supervisory role66, and jointly with the Ministry of Energy and Mines, ensures 
compliance with the Organic Law on Hydrocarbons.67  Perupetro, a government-owned company 
established under private law, is in charge of promo ting investment in exploration and exploitation.  
On behalf of the State, it concludes and monitors  agreements with private investors on exploration 
and exploitation.68 
65. The policy in the hydrocarbons sector is "to promote sustainable private investment" in the 
production and marketing of hydrocarbons.69  The goal is also to develop the national market for 
natural gas and to achieve a trade balance in hydrocarbons "in the shortest possible time". 
66. The exploration and exploitation of hydrocar bons deposits requires a contract with 
Perupetro.70  Companies set up abroad may become establis hed in Peru in order to carry out such 
                                                      
63 INDECOPI (undated). 
64 Article 3 of Law No. 28840 of 23 July 2006. 
65 Article 3 of the Single Harmonized Text of the Organic Law on Hydrocarbons, approved by 
Supreme Decree No. 042-2005-EM of 14 October 2005. 
66 Law No. 28964 of 24 January 2007. 
67 Article 3 of the Single Harmonized Text of the Organic Law on Hydrocarbons, approved by 
Supreme Decree No. 042-2005-EM of 14 October 2005. 
68 Article 6, idem . 
69 Ministry of Energy and Mines (2005). WT/TPR/S/189/Rev.1 Trade Policy Review 
Page 76 
 
 
activities either through a branch or a subsidiary.71  At the beginning of 2007, 42 exploration 
agreements and 19 exploitation agreem ents were in force.  Of the 61 agreements in force, 56 involved 
companies with foreign holdings.  The latter must  obtain an authorization through a supreme decree 
before engaging in explor ation or exploitation in an area situated 50 kilometres or less from the 
border.72 
67. The exploration phase of agreements may be up to  seven years, renewable for up to a further 
three years "in exceptional cases".73  For petroleum agreements, the operational phase may last 
30 years and for natural gas 40 years.  Both are re newable for up to ten more years provided that 
certain requirements are met. 
68. The State levies various taxes on exploration and exploitation of hy drocarbons deposits.  
Agreements providing for the payment of royalties de termine these according to the provisions laid 
down in the regulations.74 
69. The regulations do not limit fo reign capital holdings in refi ning, processing, storage and 
marketing of hydrocarbons.  The building, operatio n and maintenance of pipelines for transporting 
hydrocarbons require the signing of a concession agr eement with the Ministry of Energy and Mines.75  
Companies registered as "wholesale distributors" with  the Ministry of Energy and Mines are the only 
ones authorized to import liquid fuel and its by-products into Peru.76 
70. Law No. 27133 of 4 June 1999 prescribes that procedures for granting the right to exploit 
proven reserves of natural gas must "guarantee s upply of the domestic market for natural gas".77  The 
licensing agreement for hydrocarbons operations on Lot 88 provides that the producer may export 
natural gas provided that supplies on the domestic market are guaranteed for 20 years, as set out in the 
Ministry of Energy and Mines' Plan Referencial de Hidrocarburos (Reference Plan for 
Hydrocarbons) in effect at the time the agreement on the sale of natural gas for export is signed.78 
71. Article 77 of the Single Harmonized Text of  the Organic Law on Hydrocarbons prescribes 
that the price of petroleum and its by-products at  the various production and marketing stages may be 
freely determined.  The only exception is the pri ce for transporting liquefied petroleum gas by 
pipeline.79  Law No. 27133 of 4 June 1999 provides that the procedures for granting the right to 
exploit proven reserves of natural gas must "det ermine a maximum price for natural gas at the 
wellhead".  The licensing agreement for exploiting hydrocarbons deposits on Lot 88 determines the 
maximum price of natural gas at the wellhead as US$1.00 per million BTU (British thermal unit) for 
electricity generating companies and US$1.80 per million BTU for industrial users.  The agreement 
                                                                                                                                                                     
70 Articles 8 and 10 of the Single Harmonized Text of the Organic Law on Hydrocarbons, approved by 
Supreme Decree No. 042-2005-EM of 14 October 2005. 
71 Article 15, idem . 
72 Article 13 of Legislative Decree No. 757 of 13 November 1991. 
73 Article 22 of the Single Harmonized Text of the Organic Law on Hydrocarbons, approved by 
Supreme Decree No. 042-2005-EM of 14 October 2005. 
74 See, for example, the Regulations on the App lication of Royalties and Remuneration in Petroleum 
Agreements, approved by Supreme Decree No. 049-93-EM of 15 November 1993. 
75 Article 72 of the Single Harmonized Text of the Organic Law on Hydrocarbons, approved by 
Supreme Decree No. 042-2005-EM of 14 October 2005. 
76 Regulations on the Marketing of Liquid Fuel and other Hydrocarbons By-products, approved by 
Supreme Decree No. 045-2001 -EM of 22 July 2001. 
77 Article 4. 
78 Article 1 of Supreme Decree No. 050-2005-EM of 2 December 2005. 
79 Article 61 of the Regulations on the Marketing of Liquefied Petroleum Gas, approved by Supreme 
Decree No. 01-94-EM of 11 January 1994. Peru WT/TPR/S/189/Rev.1 
 Page 77 
 
 
provides a formula for adjusting these prices.  The pr ice for the transport and distribution of natural 
gas is also controlled.80 
72. Law No. 27624 of 8 January 2002 gives investors the right to definitive refund of the IGV 
and the municipal promotion tax paid on the im port and purchase of "goods, services or use of 
services and construction contracts directly related to exploration during the exploration phase of the 
agreement".81  Likewise, during the exploration phase, the import of inputs approved by the Ministry 
of Economy and Finance is exempt from all taxes, including tariffs.82 
73. The Ministry of Economy and Finance estim ates that the tax benefits given to the 
hydrocarbons sector will amount to S/. 222.8 m illion in 2007 (corresponding to US$70 million).83 
74. Under the temporary import regime applicable to investors in the hydrocarbons sector, the 
period during which the goods imported may remain in  Peru before being exported is two years, 
renewable for up to two years.84  Under the general temporary import regime, the time-limit is 
18 months (Chapter III(2)(iv)). 
75. The Organic Law on Hydrocarbons guarantees to in vestors application of the exchange and 
tax regimes in effect at the time at which the agreement with the State is signed.85 
(6) MANUFACTURING  
76. In 2005, the manufacturing sector accounted for 15.3 per cent of GDP.  The main components 
according to the value of their output in 2005 we re foodstuffs, chemicals, and textiles and leather 
(Table IV.5).  Even though the value of the out put of several industries showed a sharp decline 
between 2000 and 2005, for example, footwear, non- electrical machinery, fishmeal and fish oil, 
leather and sugar, the rate of GDP growth in th e manufacturing sector over this period was slightly 
above that for the economy as a whole.  Printing and publishing, paper, dairy products, non-metallic products, textiles and iron and steel saw relatively large increases in the value of their output. 
77. Imports of manufactures (classified according to the second revision of the International 
Standard Industrial Classification of all Econom ic Activities (ISIC)) amounted to US$10,041 million 
in 2005, corresponding to 80 per cent of all imports .  Just over half of these were non-electrical 
machinery (ISIC 382), industrial chemicals (ISIC 351), electrical machinery (ISIC 383), transport 
equipment (ISIC 384) and food products (ISIC 311). 
                                                     
 
80 Article 9 of Law No. 27133 of 4 June 1999. 
81 Article 2. 
82 Article 56 of the Single Harmonized Text of the Organic Law on Hydrocarbons, approved by 
Supreme Decree No. 042-2005-EM of 14 October 2005. 
83 MEF (2006). 
84 Articles 60 and 61 of the Single Harmonized Text of the Organic Law on Hydrocarbons, approved 
by Supreme Decree No. 042-2005-EM of 14 October 2005. 
85 Article 63, idem . WT/TPR/S/189/Rev.1 Trade Policy Review 
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Table IV.5 
Structure of GDP in the manufacturing sector, 2000-2005 
(S/. millions at 1994 constant  prices and percentages) 
 2000 2001 2002 2003 2004 2005 
Manufacturing GDP 18,001 18,118 19,185 19,806 21,270 22,652 
As a percentage of total GDP 14.9 14.9 14.9 17.9 15.3 15.3 
As a percentage of manufacturing GDP  
Foodstuffs and beverages 31.7 31.7 31.2 30.5 29.9 29.1 
 Dairy products 1.9 2.0 2.1 2.2 2.4 2.4 
 Fish processing 1.3 1.5 1.2 1.6 1.6 1.4 
 Fishmeal and fish oil 4.4 3.1 3.1 2.2 3.1 2.8 
 Milling and breadmaking 7. 3 8.1 7.7 7. 3 6.6 6.6 
 Sugar processing and refini ng 1.2 1.2 1.3 1.5 1.0 0.8 
 Other food products 11.2 11.3 11.3 11.4 11.0 10.8 
 Beverages and tobacco 4.4 4.4 4.5 4.5 4.3 4.3 
Textiles and leather 15. 5 15.2 15.2 15. 8 16.3 15.5 
 Textiles 6.9 6.6 7.1 7.4 8.0 7.9 
 Clothing 7.1 7.2 7.1 7.6 7.5 7.1 
 Leather 0.3 0.3 0.2 0.3 0.3 0.2 
 Footwear 1.1 1.0 0.7 0.5 0.4 0.3 
Wood and furniture 3.1 3.0 3.4 3.2 3.5 3.3 
Paper 6.3 6.1 6.6 6.8 7.2 7.8 
 Paper 3.4 3.3 3.3 3.2 3.6 3.9 
 Printing and publishing 2.9 2.9 3.3 3.6 3.6 3.9 
Chemicals 16.9 17.4 17.2 17.1 16.8 17.5 
 Basic chemicals 3.4 3.2 3.2 3.3 3.3 3.7 
 Pharmaceuticals and medicines 1.5 1.5 1.6 1.6 1.1 1.2 
 Other chemicals 4.5 4.7 4.7 4.8 5.0 5.0 
 Petroleum refining 4.5 4.6 4.3 4.2 4.2 4.6 
 Rubber and plastic 3.0 3.3 3.3 3.2 3.1 3.1 
Non-metallic products 7. 0 6.9 7.3 7. 4 7.7 8.1 
Basic metal industries 8.4 8.6 8.9 9.4 9.1 9.0 
 Iron and steel 3.0 3.0 2.9 2.9 3.0 3.3 
 Processing of non-ferrous metals 5.5 5.6 6.1 6.6 6.2 5.7 
Metal products 8.4 8.4 7.5 7.4 7.2 7.3 
 Metal products 4.3 4.3 4.2 4.5 4.1 4.3 
 Non-electrical machinery 1.2 1.2 1.0 0.8 0.6 0.6 
 Electrical machinery 2.0 1.9 1.6 1.4 1.6 1.5 
 Transport equipment 0.9 0.9 0.7 0.8 0.8 0.9 
Other manufactures 2.8 2.8 2.7 2.4 2.2 2.3 
Source : INEI, national accounts system:  GDP by category of activity.  Consulted at:  http://www.inei.gob.pe. 
78. In 2005, exports of manufactures amounted to US$12,039 million (70 per cent of total 
exports) and were mainly composed of semi-proce ssed goods.  The major exporting industries are the 
non-ferrous metals industry (ISIC 372), which ac counts for close to 50 per cent of exports of 
manufactures, food products (ISIC 311), refine d petroleum products (ISIC 353) and textiles 
(ISIC 321). 
79. Exports of textiles and clothing have benefite d from the preferential access given under the 
Andean Trade Promotion and Drug Eradication Ac t (ATPDEA).  Since 2003, almost all Peru's 
exports of clothing to the United St ates have entered under the ATPDEA.86  The strong performance 
of Peru's clothing exports may not simply be the result of preferences but also of certain measures 
                                                      
86 WTO Secretariat calculations based on figures in the ITC Trade Dataweb database of the United 
States International Trade Commission.  Consulted at:  http://dataweb.usitc.gov. Peru WT/TPR/S/189/Rev.1 
 Page 79 
 
 
applied by the United States to other suppliers.87  The Peruvian authorities point out that this strong 
performance also reflects increased productivity in  the sector, partly as a result of an upsurge in 
investment.  Imports of capital goods for the tex tiles and clothing industry increased by around 50 per 
cent between 2001 and 2006. 
80. The manufacturing sector has been subject to pressure to increase output.  Between 2000 and 
2005, annual average growth in labour productiv ity in this sector was around 5 per cent.88  Given that 
wages rose at an annual average of 0.3 per cent ove r the same period, unit labour costs have fallen 
significantly. 
81. Since it was set up in 2002, the Ministry of Pr oduction has been responsible for formulating 
policy for the industrial sector.89  Peru's industrial policy aims to build industry's capacity so as to 
enhance its international competitiveness, promot e the creation of infrastructure in support of 
industrial development, encourage know-how an d innovation and create a favourable climate for 
industrial development. 
82. The average MFN tariff applied in the non-agri cultural sector (WTO definition) was 7.2 per 
cent in April 2007 (see also Chapter III(2)(iv)). 
83. The MINCETUR points out that the sectors wi th the highest average effective tariff 
protection in early 2007 were da iry products (51 per cent), footw ear (39 per cent), milling (35 per 
cent), sugar (34 per cent) and clothing (32 per cent).90  On the other hand, the non-electrical 
machinery and transport equipment industries, whose rates of effective tariff protection are negative, 
have found themselves in a disadvantageous position as a result of the tariff structure that came into 
effect in January 2007.  Other industries whose e ffective tariff protection rates are relatively low are 
petroleum, chemicals and iron and steel. 
84. Peru applies quotas for various products th at compete with domestic manufactures, for 
example, steel, footwear, cotton fabrics, tableware,  soft drinks and olive oil (Chapter III(2)(vii)). 
85. Manufacturers are eligible for tax benefits  under the CETICOS and ZOFRATACNA schemes 
(Chapter III(4)(iv)).  The principal effect of these has been to boost the overhaul and repair of 
vehicles.  The Ministry of Economy and Finance es timates that the tax benefits enjoyed by the 
manufacturing sector will amount to around S/. 140.7 million in 2007 (corresponding to 
US$44.2 million).91  Government financing programmes on pref erential terms, however, appear to be 
limited (Chapter III(3)(v) and (4)(iv)). 
(7) SERVICES  
(i) Main features 
86. Under the GATS, Peru has made horizontal commitments on the movement of natural 
persons and investment.  Natural persons supplying services or employed by companies in the sectors 
included in Peru's Schedule may enter the country  for a period of not more than three years, 
                                                      
87 IMF (2007c). 
88 López Morales (2007). 
89 Article 8 of the Regulations on the Organization and Functions of the Ministry of Production, 
approved by Supreme Decree No. 010-2006-PRODUCE of 4 May 2006. 
90 Effective rates of protection calculated on the basis of the simple average of MFN tariffs.  
MINCETUR (2007b). 
91 MEF (2006). WT/TPR/S/189/Rev.1 Trade Policy Review 
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renewable for successive periods.  Such persons may not comprise more than 20 per cent of the total 
workforce employed by the company and their re muneration may not exceed 30 per cent of the total 
payroll, with some exceptions.  As far as investme nt is concerned, Peru's horizontal commitments 
guarantee foreign investors and companies the same rights and obligations as Peruvian investors and 
companies, without any exceptions other than t hose laid down in the Constitution and Legislative 
Decree No. 662. 
87. The list of MFN exemptions92 contains a horizontal exemption to the effect that the 
movement of nationals of a country that has a r eciprocal labour agreement or an agreement on dual 
nationality, or of foreign personne l recruited under bilateral or mu ltilateral agreements concluded by 
Peru shall not be subject to the limitations on recruitment of foreign workers.  The MFN treatment 
exemptions relating to specific sectors concern land  and maritime transport with countries of the 
Andean Group;  land transport with countries me mbers of the Convention on International Land 
Transport93;  and recreational, cultural and sporting ser vices with several Latin American countries.94  
In addition, on the basis of the principle of reci procity, Peru also has an exemption on all activities 
related to financial services.  All the exemptions from the MFN principle are for an indefinite period. 
88. Peru adopted specific commitments in seven  of the 12 GATS sectors, namely, business 
services;  communications;  financial services;  tourism and travel-related services;  distribution services;  recreational, cultural and sporting services;  and transport services (Table AIV.1).  Peru took part in the negotiations on  telecommunications and financial services subsequent to the Uruguay 
Round and the respective commitments appear in the Fourth and Fifth Protocols to the GATS. 
89. During the Doha Round services negotiations, Pe ru submitted an initial offer in 2003 and a 
revised offer in 2005.
95 
90. Within the Andean Community, the general fra mework for the liberalization of trade in 
services is set out in Decision No. 439 of 11 June 1998 .  In this Decision, Peru and the other member 
countries undertake only to impose temporary measur es contrary to the principles of market access 
and national treatment if these measures are listed in an inventory.  The inventories were adopted by 
Decision No. 510 of 30 October 2001.  Peru's invent ory comprises 20 restrictions that mainly affect 
the following services:  legal services;  architecture;  engineering;  urban planning and landscape architecture;  other professional services;  tourism and travel-related services;  security;  radio and television;  performances;  maritime transport and inland waterway transport;  and transport of fuel.
96 
91. Decision No. 629 of 31 January 2006 deferred until 30 June 2006 the commitment to abolish 
the measures listed in the inventor y by 1 January 2006 and established a programme of work for the 
liberalization and harmonization of rules.  Decision No. 659 of 14 December 2006 approved the sectors for further regulatory liberalization or harmonization.
97 
                                                      
92 Peru's final list of Article II (MFN) exemptions appears in WTO documents GATS/EL/69 of 
15 April 1994 and GATS/EL/69/Suppl.1 of 26 February 1998. 
93 Argentina, Bolivia, Brazil, Chile, Paraguay and Uruguay. 
94 Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, the Dominican Republic, Ecuador, 
El Salvador, Guatemala, Haiti, Honduras, Mexico, Ni caragua, Panama, Paraguay, Uruguay and Venezuela. 
95 Information from the WTO online.  See:  http://w ww.wto.org/english/trato p_e/serv_e/s_negs_e.htm. 
96 Information from the Andean Community online.  See:  http://www.comunidadandina.org/ 
normativa/dec/d510.htm. 
97 Information from the Andean Community online.  See:  http://www.comunidadandina.org/ 
normativa/dec/D659.htm. Peru WT/TPR/S/189/Rev.1 
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(ii) Telecommunications 
(a) Features of the market 
92. There have been far-reaching changes in Pe ru's telecommunications sector since it was 
opened up and reorganized in the 1990s.  This proces s has been accompanied by sustained growth in 
foreign investment, which rose from US$2,000 milli on in 1995 to US$4,975 million in 2006.  Foreign 
investment in the telecommunications sector accounted for one third of all foreign investment in Peru in 2006. 
93. The liberalization process has been gradual and the sector has not been opened up to full-scale 
competition immediately but the dominant presence of Te lefónica del Perú has been used gradually to 
adjust rates and promote investment.  In 2006, the Spanish company Telefónica controlled 97.2 per 
cent of the shares in Telefónica del Perú.  Under an administrative concession granted by the State, this company has the right to utili ze the infrastructure and networks of the public telecommunications 
services.  The concession entails specific obliga tions on access by third parties to the basic 
infrastructure and network facilities of this opera tor.  In 2004, Telefónica del Perú's concession 
agreement was renewed until 2024. 
94. In March 2007, there were 66 long-distance concessions, 35 concessions for local carrier 
services, 23 fixed telephony concessions, 221 supplie rs of value-added services and 142 companies 
listed in the register of service and/or traffic pr oviders.  The major competitors in the market are 
Telefónica del Perú (dominant operator), Telefónica Móviles, Telmex del Perú, Americatel, América Móviles, Nextel del Perú, Impsat, Infoductos, Gilat to Home, and Millicom. 
95. According to data from the authorities, in D ecember 2006, Telefónica del Perú had 95.6 per 
cent of the total number of fixed telephony lines;  the remainder belonged to seven other operators.  
At the same date, the leading mobile telephony ope rators were Telefónica Móviles, with 58 per cent 
of the lines in service, América Móviles (38 per cent)  and Nextel del Perú (4 per cent).  As regards 
national and international long-distance services, Te lefónica del Perú has 66 per cent of the market, 
while the other 20 competitors share the remaining 33 per cent. 
96. The fixed telephony and national and intern ational long-distance markets are highly 
concentrated.  In 2001, one company made a compla int against Telefónica del Perú regarding issues 
such as obstacles to interconnecti on and access to networks.  The OSIPTEL issued Decision No. 052-
2002-CCO/OSIPTEL allowing the complaint against pr actices that restrict competition in the 
telecommunications market (long-distance and fixe d telephony) by barring entry using legal or 
technological means or strategic behaviour. 
97. Since 2000, Peru's telephone density has made  sustained progress and during the period 
2000-2005 it was the South American country with the highest aggregate rate of annual growth 
according to information provided by the authorities.  Nevertheless, in the poorest departments and in 
poor urban sectors, the level of access to telecommunications services is still low. 
98. A study by the World Bank indicates that, as a result of privatization, the coverage and 
quality of the service has increased dramatically and that rates have tended to fall, with some 
exceptions for new services.
98  Use of long-distance and intern ational services h as increased for 
consumers in all sectors.  For local services, the in crease has been modest within the poorest sectors, 
as already mentioned.  Rates for local, long-distan ce and international services have fallen but there 
has been a sharp rise in monthly standing charges.  The study finds that ther e has been a net benefit 
                                                      
98 World Bank (2006c). WT/TPR/S/189/Rev.1 Trade Policy Review 
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for consumers in all social strata if the broad e xpansion in access to telephon y services is taken into 
account. 
99. On the other hand, it is indicated that there are still problems in the sector such as the rates per 
second restricted to a single plan, interconnecti on charges for cellular telephones, the lack of 
competition in fixed telephony (because Telefónia's competitors concentrate on corporate clients), 
interconnection problems and conflict between tho se entering the market and Telefónica del Perú.99 
(b) Regulatory framework 
100. As part of its commitments at the WTO, Pe ru undertook to liberalize voice telephony services 
(national, long-distance and international) by 1999 at  the latest.  In the Fourth Protocol, approved on 
4 June 1997 by Supreme Resolution No. 129-97- RE, Peru undertook to take into account the 
Reference Paper on regulation principles. 
101. Two institutions have regulatory and administrative responsibilities in the 
telecommunications sector.  On the one hand, the Ministry of Transport and Communications (MTC) 
is competent for market access issues;  allocati on, control and monitoring of scarce resources;  
administration of the Fondo de Inversión en Telecomunicaciones –  FITEL (Telecommunications 
Investment Fund);  the national telecommunications plan;  the national frequency allocation plan;  the 
adoption of regulations;  and approval of monitoring equipment.  On the other, the Organismo 
Supervisor de Inversión Privada en Telecomunicaciones – OSIPTEL (Supervisory Authority for 
Private Investment in Telecommunications) is responsible  for the following:  rates applicable to users;  
competition in the sector;  interconnection;  qualit y of the service;  settlement of disputes between 
operators and application of the corresponding pena lties;  and dealing with complaints from users. 
102. The basic regulatory framework for the telecomm unications sector is contained in the Single 
Harmonized Text of the Telecommunications Law, Supreme Decree No. 013-93-TCC and amendments thereto.
100  The Law classifies telecommunications services into:  (i) carrier services;  
(ii) teleservices or final services;  (iii) distributi on services;  and (iv) value-added services.  Pursuant 
to this Law, the following services require a special concession before they can be provided:  carrier 
services;  teleservices or final services;  and distributi on services.  An authorization, together with the 
corresponding permit and licence, are required in  order to provide private final and radio-
communications services and private distribution and broadcasting services.  Value-added services that require their own telecommunications networks separate from those of the carrier services or teleservices require special authorization from the Ministry of Transport and Communications. 
103. In 2004, the Single Harmonized Text of the Ge neral Regulations for the Telecommunications 
Law, Supreme Decree No. 027-2004-MTC, incorpor ated regulatory changes such as modified 
definitions of subscribers, the concession area, th e service area and interconnection of networks.  In 
2005, Supreme Decree No. 030-2005-MTC continued the development of rules for the interconnection of networks, ro yalties for concession rights, compliance with obligations by 
concessionaires, incentives for access by independent operators and for developing mobile services, 
and recognition of users' freedom to set up private networks. 
                                                     
 
99 Fernández-Baca (2003). 
100 The General Regulation to the Telecommunications Law has been amended by Supreme Decree 
Nos. 015-97-MTC, 005-98-MTC, 020-98-MTC, 022-98-MTC, 002-99-MTC, 003-99-MTC, 043-2000-MTC, 
029-2001-MTC, 029-2002-MTC, 015-2003-MTC and 0 12-2004-MTC.  See:  http://www.mtc.gob.pe/indice/ 
comunicaciones.asp#c1. Peru WT/TPR/S/189/Rev.1 
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104. Law No. 28295 requires companies to share the necessary infrastructure for providing public 
telecommunications services where it is not possible to build and/or set up the infrastructure.  Supreme Decree No. 030-2005-MTC of 31 December 2005  provided that any independent operator 
may request one or more telephone lines from a fixe d or mobile telephony concessionaire in order to 
install public or subscriber telephones to be operated by  them directly and to be used to back up other 
services in areas where this service is not available. 
105. The rates charged by Telefónica del Perú ar e regulated by the clauses in the concession 
agreements signed by the Peruvian State in 1994.  Since September 2004, the rates for local and long-
distance fixed telephony have been adjusted quarterly  by basket of services.  Adjustments are made 
taking into account a formula giving a ceiling that is fixed according to inflation and a productivity 
factor of -10.07 per cent annually.  The productivity factor to become effective in September 2007 has 
been under consideration since 25 May 2007, as requi red by the Resolution of the Governing Board 
No. 027-2007-CD/OSIPTEL. 
106. The Single Concession Law, Law No. 28737 of 18 May 2006, introduces the concept of a 
single concession for the supply of all public telecomm unications services so as to lessen the barriers 
to market access created by multiple concessions.  Purs uant to this Law, concessions are granted at 
the request of a party or following an open competition.  A single concession may comprise the possibility of providing more than one public tel ecommunications service, as well as an authorization 
to use the radio spectrum and the permits and licences required to install and operate 
radiocommunications equipment.  The concession agreement establishes the time-limit for the 
concessionaire to commence providing the service.  The Law was introduced in response to the 
problems created by the multiple concessions regime
101 including barriers to market access, delays in 
dealing with concession procedures (an average of fo ur to five months for each procedure), problems 
in implementing new technologies and deploying networks, and discouraging competition and the 
entry of new operators.102 
107. Likewise, in order to boost promotion and comp etition policies in the sector, in 2007 Supreme 
Decree No. 003-2007-MTC and Law No. 29022 were adopted to eliminate obstacles to the 
infrastructure's expansion. 
108. Legislation in the sector gives Peruvian a nd foreign investors the right to provide 
telecommunications services in the following forms:  (i) public services, with no restrictions on foreign investment;  and (ii) broadcasting services. 
109. Article 24 of the Radio and Television Law, La w No. 28278 of 23 June 2004, prescribes that 
legal persons must be domiciled a nd established in Peru in order to own a broadcasting service.  
Foreign involvement in legal persons owning a broadcasting service may not exceed 40 per cent of 
the total holdings, shares in the equity or number of  partners.  Foreigners may not own a broadcasting 
service either directly or through a sole-proprietor company. 
110. Supreme Decree No. 040-2004-MTC lays down the requirements for granting a concession.  
No call-back is allowed in international long-distance traffic. 
                                                     
 
101 Multiple concessions for services such as local carrier, national long-distance, international long-
distance, trunking, SCP, mobile, mobile via satellite, fixed telephony, wireless telephony, cable television, 
MMDS cable television, inter alia . 
102 Information from OSIPTEL online.  See:  http://www.osiptel.gob.pe/Index.ASP?T=T&IDBase= 
0&P= %2FOsiptelDocs%2FGPR %2Fel_sector%2FSEMINARIOS%2Ffiles3%2F2daSesion_ManuelCipriano_ MTC.pdf. WT/TPR/S/189/Rev.1 Trade Policy Review 
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111. The FITEL, part of the Ministry of Transport and Communications pursuant to Law 
No. 28900, seeks to promote universal access through private investment in regions where demand 
does not guarantee profitability.103  The FITEL is financed through a contribution made by all 
companies in the sector corresponding to 1 per cent of the value of their sales.104  The authorities have 
stated that, in mid-2007, the FITEL had US$134 million to invest over a period of five years in 
various projects for public telephony,  fixed telephony and public access to the Internet in rural areas.  
Through these projects, it is hoped to double telecommunications capacity by the end of 2009. 
(iii) Financial services 
(a) Features of the market 
112. As can be seen from Table IV.6, at the end of 2006 there were 108 supervised entities holding 
total assets of S/. 167.1 billion (some US$52,295 milli on).  Banking institutions , with around 50 per 
cent of the assets, still played a leading role wh ile pension funds possessed around 28 per cent of the 
financial system's assets, and four government-own ed financial institutions held around 11 per cent.  
In late 2006, there were 11 banks, some of them cont rolled by foreign capital.  The State's role in the 
financial system focuses on activities by development banks. 
Table IV.6 
Structure of the financ ial sector, December 2006 
Institution Number of 
companies Amount of assets 
(S/. millions) Percentage of 
assets 
Banking institutions  11 82,553 49.4 
Financing institutions   4 1,871 1.1 
Non-bank microfinance institutions    
Municipal funds (CM)  13 4,595 2.7 
Rural savings and loan funds 12 841 0.5 
Small and microenterprise development institutions  13 981 0.6 
Government-owned entities     
Bank of the Nation  1 12,384 7.4 
Development Financing Corporation (COFIDE)  1 3,590 2.1 
Agricultural Bank (Agrobanco)  1 292 0.2 
Housing Fund 1 2,675 1.6 
Financial leasing companies 5 1,351 0.8 
Insurance companies  13 9,822 5.9 
Pension funds 4 46,177 27.6 
Other 29 n.a. n.a. 
Total of institutions supervised 108 167,134 100 
n.a. Not applicable. 
Source : Supervisory Authority for Banks , Insurance and Pension Funds, Memoria Anual 2006 . 
113. During the period under review, the banking sector  became even more concentrated.  The 
number of banks fell from 15 at the end of 2001 to 11 at the end of 2006, mainly as a result of the closure or merger of a number of financial ins titutions and the withdrawal of branches of foreign 
banks.  This process intensified following the proble ms that affected the sector in 2003 and were 
related to the high levels of dollarization in the economy and in loans, as well as the economy's 
vulnerability to external factors that caused an imba lance.  That year, the Peruvian Government took 
precautionary measures and closed small commerc ial banks while reorganizing and absorbing 
                                                     
 
103 Information from FITEL online.  See:  h ttp://www.fitel. gob.pe/contenido.php?ID=36. 
104 The FITEL's Regulations were approved  by Supreme Decree No. 010-2007-MTC. Peru WT/TPR/S/189/Rev.1 
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two larger banks.  Measures were also taken to avoi d a systemic crisis through swaps of government 
bonds against portfolio and temporary government investment in the banks' shares. 
114. The share of the three banks with the largest  assets (Banco de Crédito, BBVA Continental 
and Scotiabank) in total loans increased from 63.2 pe r cent at the end of 2001 to 74 per cent at the end 
of 2006;  their share of total deposits rose from 71.6 to 77.7 per cent over the same period.  
Furthermore, dollarization both of loans and of deposits has decreased in recent years.  In 
December 2006, the dollarization of loans and depos its recorded levels of 65.5 and 62.7 per cent, 
respectively.  In 2006, dollar loans made up 11 per cent of the GDP, whereas loans in Peruvian 
currency accounted for 5.7 per cent. 
115. The banking prudential indicators have improved si nce 2003.  The rate of loan defaults fell 
from around 9 per cent at the end of 2001 to 1.63 per cent in December 2006.105  In 2006, the daily 
liquidity ratio stayed at approximately 30 per cen t in Peruvian currency and 50 per cent in United 
States dollars (the minimum percentages required are 20 per cent for foreign currency and 8 per cent 
for Peruvian currency).  The loan portfolio continue d to increase, which meant that borrowing reached 
its highest level ever in 2006.  According to the Superintendencia de Banca, Seguro y AFP – SBS 
(Supervisory Authority for Banks, Insurance and Pe nsion Funds), the decrea se in operating costs, 
together with fewer defaults on loans and the incr ease in more profitable loans, meant that banking 
institutions continued to improve their profitability, which reached a level of 23.9 per cent at the end 
of 2006, the highest since mid-1996. 
116. Despite the progress made in recent years, there ar e still some risks related to factors such as 
the high level of dollarization in the system and the economy, the vulnerability to  external factors that 
cause an imbalance, the level of concentration in  the sector, the high real interest rates and the 
considerable fragmentation of the loan market in order to deal with different types of client.  In this 
connection, the authorities point out that the level of  dollarization has started to fall and that the SBS 
has issued regulations on the exchange risk for loan s obliging banks to identify this risk.  According 
to the authorities, in mid-2007, the amount exposed to exchange risk was less than 20 per cent of the 
portfolio.  The authorities have also indicated that in terest rates have started to decline, mainly for 
rates on loans to microenterprises and for consumption.  This has me ant that a large number of new 
debtors have entered the fina ncial system as a result, inter alia , of the competition caused by the entry 
of microfinance institutions into the Lima market. 
117. The IMF has emphasized106 that for the majority of Peruvian companies financing by banks is 
insufficient and its cost is high.  Since liberalization in the early 1990s, average interest rates both in 
soles and in United States dollars have shown a marked decline, but they are still high in real terms.  
By mid-2007, the nominal rate for commercial loans in soles was around 9.45 per cent and for those in United States dollars it was 9.07 per cent
107, both of which are far higher than the prevailing rate of 
inflation (some 1.3 per cent for the first five months of 2007). 
118. In 2006, the insurance subsector continued to  grow.  At the end of 2006, 13 insurance 
companies were operating, three of them in general and life insurance, four in general insurance and 
six in life insurance.  At the end of 2006, the net value of insurance premiums was S/. 3,544 million (around US$1,000 million, corresponding to 1.2 per cen t of the GDP), showing a nominal increase of 
10.3 per cent in comparison with the previous year .  In 2006, the insurance companies had assets of 
S/. 9.8 billion (some US$3 billion, corresponding to 3.2 per cent of the GDP).  The stable economic 
                                                     
 
105 Including loans in arrears plus loans to be collected through the courts. 
106 IMF (2004), page 26. 
107 Information from the Supervisory Authority for Banks, Insurance and Pension Funds online.  See:  
http://www.sbs.gob. pe/TipoTasa/ TasaDiaria/Tasas30042007.xls. WT/TPR/S/189/Rev.1 Trade Policy Review 
Page 86 
 
 
situation in recent years appears to have fostered gr owth in the insurance subsector.  In 2007, it was 
expected that new companies would enter this market. 
(b) Institutional and legal framework 
119. The SBS is responsible for regulating and mon itoring companies in the financial system, and 
in the insurance and private pensions sectors.  It s goals, functions and res ponsibilities are laid down in 
the General Law on the Financial System and the Insurance System and the Organic Law on the SBS 
(Law No. 26702). 
120. The SBS classifies institutions belonging to Peru 's financial system as follows:  (i) private 
banking companies;  (ii) financing institutio ns;  (iii) non-bank microfinance institutions;  
(iv) government-owned institutions (Bank of th e Nation, Development Financing Corporation, 
Agricultural Bank);  (v) financial leasing companies;   (vi) insurance companies;  and (vii) pension 
funds (AFP). 
121. Law No. 26702 contains the main legal provisions  on the financial system.  A number of new 
supplementary laws have been adopted since 2000.108  Law No. 26702 regulates the companies 
operating in the financial system, insurance compan ies and those carrying out activities related to or 
complementing the corporate purpose of the said persons or companies. 
122. Majority shareholders in a financial company may not directly or indirectly own over 5 per 
cent of the shares in another company of the same type.  Transfer of shares in a company exceeding 
10 per cent of its capital to a single person must be authorized by the SBS. 
123. Pursuant to Article 224 of Law No. 26702, in or der to carry out certain activities listed in the 
Law, both Peruvian and foreign financial companie s must set up subsidiaries, none of which may 
conduct more than one of the said activities.109 
124. Pursuant to Law No. 26702, the establishment of  subsidiaries by financial companies requires 
that the total investment in the subsidiary may not exceed 40 per cent of the company's assets, except 
in the case of subsidiaries of general insura nce companies engaged in life insurance. 
125. Law No. 26702 provides that the State may not pa rticipate in the Peruvian financial system 
except through the investment it owns in COFIDE as a second-tier development bank, in the Bank of 
the Nation, in the Agricultural Bank and in the MIVIVIENDA S.A. fund. 
126. The Law also provides that foreign investment in financial and insurance companies is given 
the same treatment as Peruvian capital.  There ar e no limitations on forei gn participation in the 
financial and insurance market.  The SBS does, howev er, take into account the principle of reciprocity 
                                                      
108 Law No. 27287 of 17 June 2000, Law No. 27299 of 6 July 2000, Law No. 27331 of 27 July 2000, 
Law No. 27584 of 6 December 2001, Law No. 27603 of 20 December 2001 , Law No. 27682 of 8 March 2002, 
Law No. 27693 of 11 April 2002, Law No. 27851 of 21 October 2002, Law No. 27964 of 17 May 2003, Law No. 28184 of 9 February 2004, Law No. 28306 of 6 July 2004, Law No. 28393 of 22 November 2004, Law 
No. 28579 of 8 July 2005, and Law No. 28755 of 30 May 2006. 
109 These activities are:  real estate capitalization companies;  general deposit warehouses;  brokerage 
firms, subject to the Law on the Securities Market;  mutual fund and investment fund programmes;  companies 
that provide safe deposits, transport and management  of cash and securities, provided that they have 
authorization from the SBS and the Ministry of the Interior ;  securitization trustees, subject to the provisions of 
the Law on the Securities Market. Peru WT/TPR/S/189/Rev.1 
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when the public interest is involved, as provided in the Political Constitution110 and Article 5 of Law 
No. 26702.  The authorities have pointed out that the principle of reciprocity has not been applied to any specific case. 
127. The general provisions of the BCRP and the SBS may not discriminate between companies 
established in Peru and similar companies abroad, or between foreign natural or  legal persons resident 
in Peru and Peruvian nationals as regards borrowing.
111 
(c) Banking services 
128. Peru took part in the negotiations on financial services at the WTO and adopted the 
Fifth Protocol to the GATS.  Peru's Schedule states that there are no limitations on market access for 
banking services when accepting deposits and other funds refundable to the public, except that 
financial companies may not accept deposits on behalf  of financial institutions not authorized to 
operate in Peru. 
129. Banking services are governed by Law No. 26702 of 9 December 1996.112  Pursuant to this 
Law, an application must be made to the SBS in order to establish and operate a bank in Peru, 
including a subsidiary of a foreign bank.  Once the full documentation has been received, the SBS 
brings it to the attention of the BCRP.  The latter must make its opinion known within 30 days of 
receipt of the request therefor.  The SBS then issues the decision authorizing or rejecting the 
application within 90 days of having received the BCRP's opinion. 
130. Law No. 26702 (Article 291) places limitations on na tional treatment to the effect that if a 
foreign bank closes and the Peruvian branch has ass ets, these must primarily be used to compensate 
Peruvian creditors and foreigners  domiciled in Peru.  This limitation on national treatment does not 
apply to subsidiaries, to which the treatment applicab le is the order of priority for payment laid down 
in Law No. 26702. 
131. There are no legal limitations on private ca pital holdings, including foreign holdings, in 
commercial banks.  In order to provide commerc ial banking services, foreign banks must set up 
branches or subsidiaries.  In the case of branches, cap ital must be placed in Peru in order to serve as a 
basis for operations.  During the April-June quarter  in 2007, the minimum capital needed to set up a 
bank in Peru was S/. 20,629,645 (around US$6.5 million).113 
132. In order to provide financial services in th e securities or commodities markets or asset 
management services, including those by pensio n fund managers, foreign banking institutions 
established in Peru may not be est ablished in the form of branches.114 
                                                      
110 Article 63 of the Constitution provides that if another country or countries adopt protectionist or 
discriminatory measures that are prejudicial to the nationa l interest the State may, in the national interest, adopt 
similar measures. 
111 Article 6 of Law No. 26702.  Foreign natural or legal persons resident in Peru are those whose 
domicile is in Peru and therefore, pursuant to Article 33 of the Civil Code, their usual residence is in Peru. 
112 The operative provisions adopted from 2000 onwa rds can be consulted at:  http://www.sbs.gob.pe/ 
PortalSbs/Normatividad/CompendioNormas.asp?s=. 
113 Information given in Circular No. G-129-2007, which updates the minimum capital required each quarter. 
114 Law No. 26702;  Single Harmonized Text of the Law on the Securities Market, Supreme Decree 
No. 093-2002-EF;  Legislative Decree No. 862, Law on Investment Funds and their Management Companies;  
Law No. 26361, Law on Commodities Exchanges;  Law No. 27635;  Decree Law No. 22014;  Single Harmonized 
Text of the Law on the Private Pension Fund Management System, Supreme Decree No. 054-97-EF;  No. 004-98-EF. WT/TPR/S/189/Rev.1 Trade Policy Review 
Page 88 
 
 
133. Article 291 of Law No. 26702 provides that its pr ovisions shall apply to branches of foreign 
banks, which enjoy the same rights and are subjec t to the same obligations as similar Peruvian 
companies.  There are no legal limitations on the num ber of banks that may operate in Peru or on the 
number of agencies which a bank established in Peru  may open.  The services that banks can offer do 
not depend on the origin of their capital. 
134. Residents of Peru may make deposits in forei gn banks without any official authorization or 
registration.  Both companies and individuals may keep and utilize foreign bank accounts.  There are 
no limits on the amount of transactions with entities abroad. 
135. Banks may freely determine their interest rates, commission and fees for their transactions.  
Nevertheless, when determining interest rates th ey must respect the limits indicated by the BCRP, 
exceptionally, in accordance with its Organic Law.115 
136. Law No. 26702 requires that a deposit insuranc e fund be established.  For the June-
August 2007 quarter the maximum amount of cove r was S/. 76,467 (around US$24,122) per person in 
each company, including interest. 
137. The SBS is responsible for monitoring and regulating money laundering and financing of 
terrorism in respect of the natura l and legal persons within its scope of competence.  It has issued 
supplementary rules on the prevention of money la undering and financing of terrorism, approved by 
Resolution SBS No. 479-2007 of April 2007. 
138. Peru imposes a tax on financial transactions at  a rate of 0.08 per cent.  Legislative Decree 
No. 975 determines the schedule for the gradual reduc tion of this tax, which should fall to 0.05 per 
cent by 2010.  The authorities have indicated that th e purpose of the tax on financial transactions is to 
serve as a source of information on tax evasion. 
139. Banks may not engage in insurance activities. 
(d) Insurance services 
140. As already indicated, Peru took part in the ne gotiations on financial services and adopted the 
Fifth Protocol to the GATS, thus broadening the scope of its insurance services. 
141. With the exception of social security services, which remain in the hands of the State, all 
insurance activities are open to foreign investment.  There are no limitations on national or foreign 
private capital holdings in insurance companies.  Peruvian residents may take out insurance and 
reinsurance abroad.116 
142. Foreign companies may set up branches or subsidia ries in order to provide insurance services.  
Pursuant to Law No. 26702, an insurance company must obtain prior authorization from the SBS 
before setting up a branch or agency. 
143. There are no legal limitations on the number of insurance companies that  may operate.  There 
is no limitation either on the number of agencies they may open, although the SBS must be informed 
of the opening or closure of an agency.  There are no differences between the types of service which 
insurance companies with national or foreign capital may offer.  Insurance companies freely 
determine the terms of their policies, their rates and other conditions. 
                                                      
115 Article 9 of Law No. 26702. 
116 Article 10, idem . Peru WT/TPR/S/189/Rev.1 
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144. The minimum registered capital in cash required for insurance companies is the following:  a 
company operating in a single branch (general or life insurance) S/. 3,751,348 (around US$1.2 million);  companies operating in both branches (general and life insurance) S/. 5,156,720 (around US$1.6 million);  insurance and reinsurance companies S/. 13,128,333 (some 
US$4.1 million);  reinsurance companies S/. 7,971,614 (around US$2.5 million).
117  The requirements 
on solvency margins and technical reserves laid dow n in the legislation apply equally to companies 
with Peruvian or foreign capital. 
145. The SBS keeps a register of foreign reinsurance companies;  in order to be listed in this 
register, the company concerned must submit an a pplication.  By mid-2007, 15 companies had been 
registered. 
(iv) Air transport 
(a) Features of the market 
146. There was a large increase in the number of international passenge rs between 2000 and 2006, 
from 1,922,205 to 3,166,798.  The volume of in ternational freight increased from 46,972 tonnes in 
2000 to 75,442 tonnes in 2006.  In the same year, ar ound 72 per cent of all international air freight 
was composed of exports and 28 per cent of imports.  As regards domestic air transport, between 2000 
and 2006 the number of passengers fell from 2,263,860 to 1,969,396, while the volume of freight only 
rose marginally from 11,345 to 11,357 tonnes.118 
147. The vast majority of air services are provided by  private companies.  Since Aeroperú ceased 
to operate in 1999, no airline has been recogni zed as the national airline.  The State has no 
commercial aviation company. 
148. In 2003, the airport and airfield infrastructur e in Peru was composed of 147 facilities, 
including 60 airports handling both passenger and freight  transport and eight international airports.  In 
2003, the Peruvian Commercial Aviation Corporati on (CORPAC S.A.) was given responsibility for 
managing 54 airports and/or airfields.  The Jorge Ch ávez International Airport in Lima-Callao is the 
main base for airline operations.  In 2006, the ai rport accounted for 46 per cent of domestic passenger 
traffic, almost all international passenge r traffic and over 75 per cent of freight. 
149. In February 2001, a concession for Jorge Chávez Airport was given to the private sector.  
Moreover, in December 2006 a concession was gran ted for the operation, maintenance and building 
of nine airports in the north of Peru.  The author ities have indicated that air navigation services remain 
a State responsibility. 
150. During the period 2000-2006, a number of unfavourable circumstances led to the 
deterioration of the air services sector and the di sappearance of several airlines.  Because of the 
periodic crises affecting the air services industry in Peru, there is little promotion of civil aviation and a limited fleet of aircraft.
119 
                                                      
117 Information given in Circular No. G-129-2007, which updates the minimum capital required for the 
quarter April-June 2007. 
118 Information from the Ministry of  Transport and Communications onlin e.  See:  http://www.mtc.gob. 
pe/implementacion/transportes/aereo/estadistica/est_anios1_ind.htm. 
119 See:  Análisis de las Características del Sist ema Actual De Transporte Aéreo, consulted at:  
http://www.mtc.gob.pe/portal/logypro/plan_intermodal/P arte1/Capitulos/Cap_7_Analisis_de_las_Cract_del_Sis
_actual_de_Transp_Aereo.pdf.  Problemática Del Transporte Aéreo De Carga, presentación consulted at:  WT/TPR/S/189/Rev.1 Trade Policy Review 
Page 90 
 
 
(b) Institutional and legal framework 
151. The National Transport Sector Policy (Ministerial Resolution 817-2006-MTC/09 of 
7 November 2006) provides a new sectoral focus on pr ivate sector participation in supplying services.  
For the transport infrastructure, participation by the private sector is also being promoted in order to 
provide the infrastructure (building, maintenance a nd operation) for facilities to be used by the public. 
152. The Ministry of Transport and Communications (MTC) is responsible for Peru's internal and 
external integration by regulating, promoti ng, building and supervising the transport and 
communications infrastructure.120  The MTC is composed of two vice-ministries, that of Transport 
and that of Communications. 
153. The Organismo Supervisor de la Inversión en Infraestructura  – OSITRAN (Supervisory 
Authority for Investment in Infrastructure), part of the Office of the President of the Council of 
Ministers, monitors investment in the transport infrast ructure for public use.  It is also responsible for 
regulating the airport infrastructure and air navi gation services;  supervising concession agreements 
and infrastructure not the subject of a concession for which the CORPAC is responsible;  and for 
determining fees for using the said infrastructure. 
154. The Dirección General de Aeronáutica Civil – DGAC (Directorate General of Civil 
Aviation), which belongs to the MTC, is responsib le for civil aviation matters.  In early 2007, 
pursuant to RM  No. 818-2006-MTC/02 of 10 November 2006, the administration and management of the DGAC was being reorganized. 
155. Law No. 27261 provides that, in the case of a lega l person, the owner of a Peruvian aircraft 
must be established in accordance with Peruvian le gislation and have its legal domicile in Peru.  
Foreign companies not established in Peru but with  a domicile in Peru may only list and register 
aircraft if they are to be used for non-profit-ma king general aviation purposes.  Foreign legal persons 
authorized to provide international air transport ser vices, directly or indirectly, must have a domicile 
and a legal representative in Peru. 
156. Pursuant to Article 79 of Law No. 27261, dom estic commercial aviation is reserved for 
Peruvian natural or legal persons.  This Article provides that, in order to be considered a Peruvian 
legal person, when a company is set up at least 51 pe r cent of its equity must be owned by Peruvian 
nationals and the company must be under the real a nd effective control of Peruvian shareholders or 
partners with a permanent domicile in Peru.  In accordance with Article 160 of the Implementing 
Regulations for this Law, this restriction, a pproved by Supreme Decree No. 050-2001-MTC, must 
remain in force for at least six months as of the date on which the operating permit takes effect, after 
which the percentage of the equity owned by fo reigners may rise to a maximum of 70 per cent. 
157. Rates and fares for commercial aviation, partic ularly national and international passenger, 
freight and mail transport, are freely determined by  the operators.  Exceptionally, and for reasons of 
national interest or public necessity, the authorities may set minimum and maximum rates for 
domestic or international air transport. 
                                                                                                                                                                    
 
http://www.comexperu.org.pe/1.  Soluciones Para El  Incremento De La Carga Aérea, consulted at:  
http://www.comexperu.org.pe/arch ivos%5Cforo%5Cforo_25042006/1. 
120 The MTC's rules include:  Law No. 27779 of 11 July 2002 (Ministry of Transport and 
Communications);  Law No. 27791 of 25 July 2002 (Organization and Functions of the Ministry of Transport 
and Communications);  and Supreme Decree No. 041-2002-MTC of 24 August 2002 (Regulations on the Organization and Functions of the Ministry of Transport and Communications). Peru WT/TPR/S/189/Rev.1 
 Page 91 
 
 
158. Pursuant to Law No. 27261, an operating perm it or a flying permit is required in order to 
undertake civil aviation activities and the releva nt operating approval and technical operating 
certification must also be obtained.  Operating permits are granted by the DGAC for up to four years and may be renewed.  The Peruvian State grants r outes, time-slots or commercial air rights to foreign 
transporters on the basis of the bilateral agreements it has signed.  If there is no bilateral agreement, 
these are granted on the basis of reciprocity or subject to equivalent economic compensation to Peru. 
159. Peruvian companies requesting a permit to ope rate international scheduled air transport 
services for passengers, freight and mail must also be operating domestic air transport services.  The purpose of this provision is to ensure that Peruvi an operators of international routes also provide a 
service at the domestic level to promote connections  among cities in Peru's interior, bearing in mind 
that domestic commercial aviation is restricted to Peruvian companies. 
160. Also pursuant to this Law, public airfields are fo r public use;  other airfields are classified as 
private.  Law No. 28525 of 12 May 2005 declares the air transport service to be a public service, 
serving the national interest and meeting national need s.  The areas covered by airports for public use 
are defined as inalienable property.  Nevertheless,  the building, exploitation, operation, equipping and 
maintenance of public airfields may be carried out by  public or private natural or legal persons under 
concessions.  Peruvian or foreign individuals may also repair, build and provide technical 
maintenance services or provide ancillary or aircra ft maintenance services.  Law No. 27261, however, 
gives the DGAC competence for establishing, mana ging, operating and maintaining navigation aid 
services, aviation radiocommunications  and control of air transit, a lthough it may delegate these 
activities to another State body. 
161. Peru has signed a number of international agreements, including multilateral agreements
121 
and 28 bilateral agreements on air transport.122 
162. Decision No. 582 of the Andean Community gives the possibility of mutually granting fifth 
freedom traffic rights within th e Andean Community for scheduled  passenger flights;  operating 
unscheduled passenger flights when there are no scheduled air services;  and fifth freedom traffic 
rights for unscheduled cargo flights between member countries and third countries. 
(v) Maritime transport 
(a) Market structure 
163. In 2006, the cargo volume transported by sea w as 40.4 million tonnes.  Non-ferrous metals 
and iron ore are the main exports carried by sea in volume terms.  The percentage of Peru's foreign 
trade (in volume) transported by sea is 96.3 per cent. 
164. In 2007, 60 foreign companies were operating sh ips involved in Peru's foreign trade.  
Forty shipping companies are registered for cabotag e traffic, eight Peruvian companies have operating 
                                                      
121 Convention on International Civil Aviation, Chicago, 1944;  Convention for the Unification of 
Certain Rules Relating to International Carriage by Air,  Warsaw, 1929;  The Hague Protocol, 1955;  Convention 
Supplementary to the Warsaw Convention for the Unification of Certain Rules Relating to International 
Carriage by Air Performed by a Person Other than the Contracting Carrier, Guad alajara, 1961;  and the 
Convention for the Unification of Certain Rules for International Carriage by Air, Montreal, 1999. 
122 Argentina, Bolivia, Brazil, Canada, Chile, Chin a, Colombia (Andean Community regime), Costa 
Rica, Cuba, Denmark, Ecuador, France, Germany, Mexico, the Netherlands, Norway, Panama, Paraguay, South 
Africa, Spain, Sweden, Switzerland, Th ailand, the United Arab Emirates, the United Kingdom, the United States 
of America, Uruguay and Venezuela (Andean Community regime). WT/TPR/S/189/Rev.1 Trade Policy Review 
Page 92 
 
 
permits for both domestic and international tran sport and 11 Peruvian companies have operating 
permits for international transport alone. 
165. Peru has a total of 24 ports, of which 19 ar e on the sea, four on rivers and one on a lake.  
Peruvian ports are managed by the Empresa Nacional de Puertos S.A. – ENAPU (National Port 
Company S.A.)123, a decentralized part of the MCT.  The port at Callao is the biggest in the country.  
The port at Matarani was the first publicly used co mmercial port to be the subject of a concession. 
166. Most of the ports' infrastructure was built duri ng the 1960s and 1980s.  There has been some 
rehabilitation but no large-scale investment in mode rnization and this serious ly constrains Peru's 
competitiveness as far as ports are concerned.124  The port at Callao handles 90 per cent of 
containerized cargo in Peru.  Its infrastructure and equipment need substantial investment for their 
modernization.  It is estimated that the infrastructur e deficit for container traffic in the port at Callao is 
some 25 per cent and that its facilities are inad equate as regards both capacity and technology.125  In 
addition, problems relating to the management of th e transport facilities and the high cost of moving 
containers have a direct impact on cargo opera tions and the cost of maritime transport. 
167. The authorities have indicated that in recent years efforts have been made to promote 
investment in the maritime trans port sector and to make good the gaps in the existing infrastructure.  
In 2006, a concession was granted for the new containe r terminal at Callao, with planned investment 
of over US$600 million, to start operating in 2009. 
168. Maritime transport costs in Peru are high.126  Freight costs accounted for 17 per cent of the 
value of Peru's imports in 2003, compared to an  average of around 10 per cent for Latin America and 
the Caribbean.  Nevertheless, freight costs in Peru are not significantly different from the average of 
the other countries on the western coast of  South America (Chile, Colombia, Ecuador).127 
(b) Legal framework 
 169. Peru's Schedule annexed to the GATS
128 includes partial commitments on passenger transport 
by sea and by inland waterway exclusively for inte rnal tourist services.  The Schedule provides that 
tourist transport companies may supply services in the following ways:  transfers, local visits, 
excursions, round trips, tours and rental of vehicles  without drivers.  The Schedule also provides that 
all companies operating tourist transport services must seek authorization to establish the business as well as an operating permit.  Peru did not reply to the WTO's questionnaire on maritime transport 
services. 
170. The conditions governing cabotage (domestica lly) are laid down in Law No. 28583 of 
23 June 2005.  Commercial water tr ansport for domestic traffic is exclusively reserved for Peruvian-
registered merchant vessels belonging to Peruvian  shipowners or Peruvian shipping companies or 
operating under financial leasing or bareboat char ter arrangements with a mandatory purchasing 
option.  The Law also requires, inter alia , that a Peruvian shipowner or Peruvian shipping company be 
a natural or legal person of Per uvian nationality established in Peru , with its principal domicile, and 
actual and effective head office in Peru.  For legal persons, at least 51 per cent of the paid-up equity 
                                                     
 
123 Information from the ENAPU online.  See:  http://www.enapu.com.p e/spn/default.asp. 
124 World Bank (2003). 
125 Ibid. 
126 World Bank (2002). 
127 UNCTAD (2005). 
128 WTO document GATS/SC/69 of 15 April 1994. Peru WT/TPR/S/189/Rev.1 
 Page 93 
 
 
must be held by Peruvian nationals.  Furthermore, th e chairman of the board of directors, the majority 
of directors and the chief executive officer must be of Peruvian nationality and reside in Peru. 
171. For transport by water between Peruvian ports , if there are no Peruvian ships, foreign-
registered ships operated by Peruvian crews or Pe ruvian shipping companies may be chartered for a 
period not exceeding six months.  For reasons of secu rity and national defence, a minimum of 25 per 
cent of the hydrocarbons transported are reser ved for Peru's navy on domestic routes. 
172. Law No. 28583 (Article 9) provides that all Per uvian-registered ships must be listed in the 
Ship Register kept by the Superintendencia Nacional de Registros Públicos (National Supervisory 
Authority for Public Registers).  Entry in the register, inter alia , requires that the Peruvian ship or 
Peruvian shipping company be in possession of a permit from the Dirección General de Transporte 
Acuático (Directorate-General of Water Transport) and,  if the ship has been listed in a foreign 
register, that listing must be cancelled or suspended. 
173. After listing in the Ship Register, which confer s ownership, the registration authority informs 
the Dirección General de Capitanías y Guardacostas (Directorate General of Harbour Authorities and 
Coastguards) so that it can grant th e registration certificate that authorizes the Peruvian flag to be 
flown and free navigation within and outside Peru's te rritorial waters.  Peruvian-registered ships must 
have a Peruvian captain, except in exceptional circ umstances, and at least 80 per cent of the crew 
must be Peruvian nationals.  The majority of th e shipping fleet operated by companies established in 
Peru is foreign-registered. 
174. Law No. 28583 also determines total freedom of  routes and, consequently, eliminates all 
restrictions that limit free access to traffic, services and routes for Peruvian vessels and Peruvian 
shipping companies.  Cargo transported by water fo r Peru's foreign trade may only be restricted in 
cases of national crisis and/or state of emergency;  in application of the principle of reciprocity;  
where ships do not meet safety or environmental protection provisions;  or where ships are not 
covered for protection, compensation and/or civil liab ility.  The reciprocity principle requires that the 
share of foreign companies in Peru be equivalent to the share to which Peruvian companies have a 
right in the foreign country concerned.  The author ities have indicated that Peru has not imposed any 
restrictive measures based on the reciprocity principle. 
175. For international transport by water, Law No. 28583 allows the chartering of foreign-
registered vessels by Peruvian shipowners or  Peruvian shipping companies without prior 
authorization. 
176. The Andean Community countries are given pr eferential treatment for cabotage services 
within the Andean Community region, as provided in Decision No. 288 of 21-22 March 1991 of the 
Commission of the Cartagena Agreement.129  This Decision allows the elimination of reserved cargo 
at the Andean level, which means a marked reduc tion in freight charges and more hold capacity for 
trade in goods.130  The Decision gives freedom of access fo r cargo originating in and intended for 
shipment by sea within the And ean region on vessels owned, chartered or operated by shipping 
companies of the member countries and of third countries.  Consequently, the following are eliminated:  (i) existing restrictions on the chartering of vessels by shipowners from member countries;  (ii) allocation of routes within the subreg ion;  and (iii) systems used to fix or authorize 
                                                     
 
129 Other complementary Andean provisions are:  Decision No. 314 of 4-6 February 1992;  Decision 
No. 390 of 2 July 1996;  Resolution No. 422 of 5 August 1996;  Decision  No. 487 of 7 December 2000;  and 
Decision No. 532 of 2 October 2002. 
130 Information from the Andean Community online.  See:  http://www.comunidadandina.org/ 
transportes. htm. WT/TPR/S/189/Rev.1 Trade Policy Review 
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freight charges by the respective au thorities for intra-subregional freight, to be replaced by registers of 
shipping rates. 
177. Decision No. 390 of 2 July 1996 of the Commi ssion of the Cartagena Agreement authorizes 
Peru and the other member countries of the Andean Community to act jointly against third countries 
which discriminate against maritime transport companies in one or more member States.  In practice, 
no country has requested the application of restrictive measures. 
178. The Law to boost and promote Peru's merchant  navy, Law No. 28583 of 23 June 2005, lays 
down as one of its objectives to promote the developmen t of the national merchant navy so that it can 
compete on equal or better terms than companies established in countries where there is low or no 
taxation.  The authorities have emphasized that, in  mid-2007, Law No. 28583 had not been the subject 
of implementing regulations because of the difficulty of applying tax benefits and that proposals had 
been made to amend the Law. 
179. Law No. 27943 of 1 March 2003 (Law on the National Port System) introduced a series of 
important amendments to the institutional frame work of the port system.  The Law set up the  
Autoridad Portuaria Nacional – APN (National Port Authority), which is responsible for developing 
the Sistema Portuario Nacional – SPN (National Port System), encouraging private investment in 
ports and coordinating the various public or privat e actors.  The new system separates the activities 
carried out by the APN from the commercial activities of port operators.  The authorities have indicated that the Government's competence in rela tion to port questions is solely exercised by the 
APN. 
180. Supreme Decree No. 003-2004-MTC of 4 Fe bruary 2004 lays down the implementing 
regulations for the Law on the SPN.  Intermediary u ser companies are allowed to provide pilotage and 
towing services if they meet the requirements laid down by the ENAPU. 
181. The fees charged for port services are regulated by the OSITRAN.  The fees approved by the 
OSITRAN are listed in the ENAPU's schedule of fees pursuant to Resolution of the Governing 
Council No. 001-99 CD/OSITRAN. 
182. According to ENAPU's schedule of fees for January 2006
131, the charge for cabotage is at a 
preferential rate that may be negotiated, provided th at this leads to an increase in the volume of cargo 
transported between Peruvian ports.  The authorities ha ve stated that, in practice, there are no special 
rates for cabotage because there are no exclusive cabotage services.  The authorities have also 
indicated that cabotage rates are not subject to re gulation because it is considered that there is a 
certain degree of competition between  this service and land transport. 
183. The authorities have stated that Peruvian ports meet the standards of the ISPS Code.132  The 
National Port Authority is responsible for this secu rity code and the Directorate-General of Harbour 
Authorities and Coastguards of the Peruvian Navy is responsible for ensuring that ships comply with 
it.  The authorities have also pointed out that, even though Peru does not belong to the CSI133, 
preliminary measures are being taken to apply it. 
                                                      
131 Approved by Governing Council Agreements No. 053 and No. 055/06/99/D and amendments thereto. 
132 International Ship and Port Facility Security Code. 
133 U.S. Container Security Initiative. Peru WT/TPR/S/189/Rev.1 
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(vi) Professional services 
(a) General features 
184. Peru made partial commitments in the professi onal services sector under the GATS, in areas 
such as accounting, auditing and bookkeepi ng services, architecture and engineering. 
185. In Peru, there is no general statute governing the exercise of professions.  For regulated 
professions, professionals must be members of the respective professional associations, to which the Government has delegated the appropr iate authority.  In 2007, each of the 22 regulated professions 
had an association.
134  Each professional association is established under its own specific law and has 
statutes and regulations governing membership criteri a.  Peru did not notify this requirement under the 
GATS (recognition measures). 
186. In order to engage in a profession in Peru, professionals with qualifications awarded by 
foreign universities must present their qualifications fo r validation.  In addition, foreign professionals 
entering the country to work for a company or othe r institution in Peru must obtain a work permit. 
187. The Oficina de Reconocimiento, Certificaci ón y Legalización  de Grados y Títulos  (Office for 
the Recognition, Certification and Legalization of  Degrees and Qualifications), part of the Asamblea 
Nacional de Rectores – ANR (National Assembly of Rectors)135 is responsible for validating foreign 
university qualifications, and has a list of the Peruvian universities where qualifications can be 
validated.136 
188. There is no maximum or minimum time-limit for va lidating qualifications.  It must be done in 
authorized universities which, in each case, ev aluate the courses followed by the professional 
concerned. 
189. In those cases where Peru has signed an agreemen t on recognition of qualifications with other 
countries, these are recognized in accordance with th e provisions in the relevant agreement.  The 
ANR evaluates the reasonable equivalence between educational curriculums and, where they are 
similar, automatically recognizes the qualification.  At the end of 2006, Peru had bilateral agreements 
with 25 countries.137 
190. After the validation procedure has been comple ted, the professional may begin procedures for 
membership of the respective professional association.   These are organized at the regional and/or 
national level, with the latter grouping all the re gional associations.  Professional associations are 
                                                      
134 Lawyers' Association of Lima, Peruvian Association of Architects, Association of Biologists, 
Peruvian Association of Public Accountants, Peruvian Association of Economists, Peruvian Nursing 
Association, Peruvian Association of Engineers, Peruvian Mathematicians Association, Peruvian Medical Association, Peruvian Association of Veterinarians, Per uvian Association of Obstetri cians, Peruvian Association 
of Odontologists, Peruvian Associa tion of Psychologists, Peruvian Chemi cal and Pharmaceutical Association, 
Peruvian Association of Sociologists, Peruvian Technical Medicine Associati on, Peruvian Association of Social 
Workers, Peruvian Association of Archaeologists, Professional Association of Cooperative Movement 
Graduates of Peru, Peruvian Association of Public Relations, Peruvian Association of Biotechnologists, Peruvian Association of Management Graduates. 
135 Information from the Ibero-American States Educational, Scientific and Cultural Organization 
online.  See:  http://www.oei.es/homologaciones/peru.pdf. 
136 Idem. 
137 Argentina, Brazil, Bulgaria, Chile, China, Co lombia, Costa Rica, Cuba, the Czech Republic, 
Ecuador, El Salvador, Guat emala, the Holy See, Hon duras, Hungary, Mexico, Nicaragua, Panama, Paraguay, 
Romania, Slovakia, Spain, Ukra ine, Uruguay and Venezuela. WT/TPR/S/189/Rev.1 Trade Policy Review 
Page 96 
 
 
entrusted with inspection, control and monitoring and have disciplinary powers.  Irrespective of the 
region of membership, the geographical scope for exercising all professions is the whole territory of the Republic of Peru.  The authorities have indicated that for architecture and engineering, the professional membership fees differ according to whether the qualifications were awarded abroad or 
in Peru. 
191. The Dirección General de Migraciones y Naturalización (Directorate General of Immigration 
and Naturalization) is responsible for issuing temporary work permits.
138  In order to request a 
temporary work permit, it is necessa ry to have been recruited by a company domiciled in Peru, or to 
be employed by a company contracted to provid e services to a company domiciled in Peru.  For the 
liberal professions, a copy of the validation of th e professional qualifications and of membership in 
the relevant professional association is re quired in order to obtain a work permit. 
192. Pursuant to the Law on the Recruitment of Foreign Workers (Legislative Decree No. 689 of 
5 November 1991), employers must give preference to recruiting Peruvian workers.  Peruvian or 
foreign companies may recruit foreign staff in a ratio  of up to 20 per cent of the total number of their 
staff.  Their remuneration may not exceed 30 per cent of the total payroll.139  Employers may request 
exemption from these limits in the following cases:  specialized professional or technical personnel;  
management and/or administrative personnel in a new business activity or one that has been 
converted;  special teaching contracts;  contracts with  the State;  and in any other case determined by 
supreme decree. 
193. There are no restrictions on foreign investment in companies providing accounting, 
architecture, engineering or legal services. 
(b) Accounting services 
194. Peru took part in the WTO Working Group on Professional Services in the accountancy 
sector and submitted replies to the relevant questionnaire.140 
195. The Junta de Decanos (Board of Deacons) of the Colegios de Contadores Públicos del Perú 
(Peruvian Associations of Public Accountants)141, a public law institution, is the highest body 
representing the public accountancy profession.  Its responsibilities include coordinating the 
institutional work carried out by the departmental as sociations and determining membership criteria.  
The certification or recertification of public account ants belonging to associations is also the 
responsibility of the Board of Deacons.  There are no temporary licences for engaging in accountancy without validation of qualifications. 
196. Law No. 13253 and Law No. 28951
142 (Professionalization of public accountants and creation 
of associations of public accountants) regulate the public accountancy profession and entrust the 
associations of public accountants with the correspo nding basic powers.  Auditing companies must be 
composed solely and exclusively of public accountan ts belonging to an association, resident in Peru 
and duly qualified by the association. 
                                                      
138 Law on Foreigners D.LEG No. 703 of 14 November 1991. 
139 These restrictions do not apply to foreigners whose spouse, parents, children or brothers are 
Peruvian, immigrants (permanent residents), foreigne rs from countries with which Peru has signed dual 
nationality or labour reciprocity agreements, inter alia . 
140 WTO document S/WPPS/W/7/Ad d.26 of 24 March 1997. 
141 Information from the Association of Public Accountant s of Lima online.  See:  http://www.ccpl. org.pe/. 
142 Update of Law No. 13253.  Peru WT/TPR/S/189/Rev.1 
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197. There are no requirements regarding the period of prior residence in order to become an 
accountant.  Nevertheless, the professional must be resi dent in Peru if the qualifications are to be 
recognized by the ANR. 
(c) Legal services 
198. Attorneys are supervised by one of the 28 departmental lawyers' associations, each of which 
corresponds to a judicial district.  Law No. 1367 gives these associations the power to regulate the 
profession. 
199. The main criteria for acting as an attorney are:  to be in possession of a law degree;  to be 
entitled to exercise civil rights;  to register professi onal qualifications with the nearest high court of 
justice;  and to be a member of the lawyers' association in the corresponding judicial district.  
Members of the professional associations may practice nationwide.  There are no restrictions on the movement of professionals between districts. 
200. Foreign attorneys may join an association on a na tional treatment basis.  There is no special 
licence for "foreign legal consultants" or temporary li cence to act as an attorney without validating the 
qualifications. 
201. According to Decree Law No. 26002 of 27 Decemb er 1992, to act as a solicitor, the candidate 
must, inter alia , be a Peruvian national by birth and be an attorney. 
(d) Architectural and engineering services 
202. The Colegio de Arquitectos del Perú – CAP (Peruvian Association of Architects)
143 and the 
Colegio de Ingenieros del Perú  – CIP (Peruvian Association of Engineers)144 are responsible for 
supervising exercise of the professions of architecture and engineering, respectively.  These 
professions are regulated by Law No. 16053 (Law on Exercise of the Professions of Architecture and Engineering).  Registration as an architect or engi neer is with the competent regional office of the 
CAP or the CIP depending on the applicant's domicile. 
203. Architects with foreign qualifications may ex ercise their profession temporarily in Peru 
through temporary membership without the need to validate their qualifications provided that there is 
an international agreement on reciprocity for exerci se of the profession of architect between Peru and 
the candidate's country of origin.  In order to ma ke use of this possibility, the candidate must submit 
an application together with a letter of introducti on from the professional association (the equivalent 
to the CAP) in his or her home country and a le tter from the company or person to which the service 
will be provided, inter alia . 
204. Engineers with foreign qualifications may engage  in the profession temporarily in Peru and be 
listed in the Register of Temporary Exercise without the need to validate their qualifications.  For this 
purpose, they must, inter alia :  submit a request together with recommendations from three engineers 
belonging to an association;  present a letter from the company indicating the activities to be carried 
out and the period of the contract;  provide proof  of the engineering degree awarded by a foreign 
university and the legal authorization to act as an e ngineer in their country of origin;  show sufficient 
knowledge of Spanish;  and demonstrate capacity to exercise the profession and knowledge of the 
relevant Peruvian legislati on in a personal interview. 
                                                     
 
143 Information from the CAP online.  See:  http://www.cap.org.pe/. 
144 Information from the CIP online.  See:  http://www.cip.org.pe/. WT/TPR/S/189/Rev.1 Trade Policy Review 
Page 98 
 
 
205. The Comisión Nacional Consultiva de Colegiación (National Consultative Commission on 
Membership) of the CIP is responsible for making a comparative study of the qualifications awarded 
by foreign institutions in the field of engineering with those awarded by Peruvian universities for the 
purpose of association membership by engineers with foreign qualifications validated in Peru.145  The 
purpose of this study is to compare foreign qualifi cations with Peruvian qualifications in order to 
determine equivalence.  Independent ly of this, validation is a prio r step for all applications to 
professional associations. 
 
                                                      
145 See the regulations on membership.  Consulted at:  http://www.cip.org.pe/Informacion/Documentos 
/norm/reglamento_colegiacion.pdf. Peru WT/TPR/S/189/Rev.1 
 Page 99 
 
 
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