WT/TPR/S/69 Trade Policy Review
Page 24
III. TRADE POLICIES AND PRACTICES BY MEASURE
(1) OVERVIEW
1. Peru maintains a relatively open trade regime, reflecting the wide-ranging programme of trade
liberalization undertaken in the early 1990s.  Since Peru's first Trade Policy Review in 1994, the
programme has been consolidated and continued, albeit at a slower pace reflecting the shrinking
number of distortions.  The average MFN tariff declined slightly, to 13.6% in 1999, while tariffdispersion remained around the same low level.  Manufactured products are still subject to lower
tariffs than agricultural imports, some of which carry variable specific duties offering open-ended
restrictions.  Peru has bound the vast majority of tariffs at a 30% ceiling rate;  a final rate of 68% is
applied only to certain agricultural products, notably those subject to variable specific duties.
Preshipment inspection, introduced in 1992 to prevent undervaluation, is still in use but the range ofgoods covered has been reduced.
2. The use of non-tariff barriers appears limited, although Peru maintains local-content
requirements in relation to various government nutrition programmes, as well as a trade-related
investment measure in dairy.  A number of provisions favour domestic suppliers in government
procurement, which is governed by a new, more transparent regulatory framework.  Regional,sectoral, and social policies privilege the use of fiscal incentives, whose scope and complexity raise
concerns.  Preferential credit to selected sectors is available from the national development bank,
COFIDE.  Over the last six years, the use of contingency measures has been restrained;  22 dumping
investigations were initiated, resulting in seven final measures.  Nine final or provisional measures
were in force in late 1999, the majority affecting exports from non-WTO members.  Since 1994 twosubsidy investigations have been initiated, none resulted in the imposition of final duties.
3. Few domestic provisions directly restrict Peruvian sales abroad, although guano exports are
statutorily limited to a fraction of local production.  Textile exports to the United States require a visafor statistical purposes.  A number of non-tariff measures implemented in foreign markets appear to
have affected certain Peruvian exports (e.g. sanitary and phytosanitary measures).  A new drawback
regime was introduced in 1995, based on a simplified refund mechanism that refunds 5% of the f.o.b.
value of the good exported regardless of the actual amount of duties paid on imported inputs.
4. Since 1994, the State has continued to withdraw from many production activities through an
ambitious privatization programme.  To help ensure that consumers benefit from the liberalization
process, a comprehensive competition policy framework has been put in place, with the main
competition agency, INDECOPI, complemented by sectoral regulatory entities.  Its Commission on
Technical and Trade Regulations has proven to be a valuable transparency and analysis instrument to
help prevent regulatory red-tape and backtrackin g in the liberalization programme.  INDECOPI is
also charged with promoting and protecting intellectual property rights within a framework of
international, regional and national provisions.  The two main domestic statutes, the IndustrialProperty Law and the Copyright Law, were enacted in 1996 to incorporate into a single domesticregulation different international provisions, including those in the TRIPS Agreement.
(2) M
EASURES DIRECTLY AFFECTING IMPORTS
(i) Procedures
(a) Documentation
5. Peru's basic import documentation and requirements have remained essentially unchanged
since its previous Trade Policy Review in 1994. All shipments require the following documents to be
presented to customs for clearance and duty payment:  an import declaration;  a bill of lading, postalPeru WT/TPR/S/69
Page 25
documentation or an airway bill depending on transport mode;  and a commercial invoice.  For goods
subject to preshipment inspection (section (b)), a verification report is required.  Other documents,
such as certificates of origin, import licences or sanitary certificates may also be required for specific
goods (section (v)(a)).  Customs clearance procedures may be conducted by the owner or recipient ofthe merchandise, an official broker, or a customs agent.
6. Merchandise imported under special regimes (such as temporary admission or import
regimes) is subject to additional provisions, in particular, the importer must provide a financialguarantee for the suspended taxes.  Simplified or urgent clearance procedures are possible under
specific terms, including for non-commercial and perishable shipments.
1
7. Complaints on customs procedures are referred in first instance to the Customs
Administration, appeals are made to the Fiscal Tribunal.
(b) Preshipment inspection
8. The Peruvian preshipment inspection (PSI) programme, administered by the Ministry of
Economy and Finance and the Customs Superintendency, was introduced in March 1992 in an effort
to prevent undervaluation of imports.  PSI covers quality, quantity, customs classification, importeligibility, and valuation for customs purposes.  Three PSI companies participated in the programme
in late 1999:  Bureau Véritas, Cotecna Inspection, and Société Générale.  For each shipment, the
choice of the inspection company is made by the im porter.  Inspection fees are negotiated between the
company and importer;  a maximum fee of 1% of the f.o.b. value of inspected merchandise is set by
law.
2
9. Since March 1997, PSI has been required for goods with an f.o.b. value greater than
US$5,000, except for used vehicles, which are subject to PSI, and other used goods, for which the
minimum value for inspection is US$2,000.  Since the previous Trade Policy Review of Peru, the
range of goods subject to PSI has been reduced by raising the minimum value for inspection (from
US$2,000 to US$5,000) and introducing several exemptions.  Table AIII.1 lists the products
exempted from PSI, which include temporary and tax-free imports as well as various important
agricultural commodities and machinery.  The value of these PSI-exempted imports, other than thosecovered by Legislative Decree Nos. 659 and Supreme Decree No. 015-97-EF, reached
US$993 million in 1998, or some 12% of total imports
3;  more precise estimates of the value of all
PSI-exempted imports are not available.  On the principle of presumption of truth, physical
identification is carried out on 15% of all goods, while documentary identification is made on the
remaining 85%.4
10. As part of its obligations under the WTO Agreement on Preshipment Inspection, Peru has
notified its related laws and regulations.5 Peru's experience with its PSI system has been discussed by
WTO Members within the Working Group on Preshipment Inspection, touching on issues such as
non-discrimination, transparency, confidentiality of information, delays, and appeal procedures.6
                                                     
1 Customs procedures are fully detailed in two National Intendency Resolutions (No. 000984 and
No. 001059), published in the official journal, El Peruano,  on 12 and 19 September 1999.
2 Supreme Decree No. 038-92-EF of 27 February 1992.
3 Estimates by the WTO Secretariat using the UNSD, Comtrade database.
4 WTO document G/PSI/WP/W/12, 6 October 1997.
5 WTO documents G/PSI/N/1/Add.3, 12 July 1996, G/PSI/N/1/Add.6, 6 June 1997, and
G/PSI/N/1/Add.7, 24 February 1998.
6 WTO documents G/PSI/WP/W/5, 13 June 1997 and G/PSI/WP/W/12, 6 October 1997.WT/TPR/S/69 Trade Policy Review
Page 26
(ii) Customs valuation and rules of origin
(a) Customs valuation
11. Customs valuation is conducted by customs agents or PSI companies.  Until April 2000, the
value of goods was determined using the normal market price method contained in the Brussels
Definition.  The f.o.b. value, indicated in the verification report issued by the PSI company, is used inthe customs declaration and for calculating the corresponding taxes.  The Peruvian Customs has final
authority to determine the customs value, tariff classification and quantity of the goods, either during
the concurrent control (physical inspection of the goods) or during subsequent control (four years ofrandom controls) of the goods.
12. The authorities indicated that minimum import prices are not used for customs valuation
purposes.  To determine the customs value of recording media for data processing, since August 1999Peru has used only the cost of such media, as provided in Paragraph 2 of the Decision on the
Valuation of Carrier Media Bearing Software for Data Processing Equipment.
7
13. Peru became a contracting party to the Agreement on Implementation of Article VII of the
General Agreement on Tariffs and Trade (Tokyo Round Agreement on Customs Valuation) in
April 1994, invoking paragraph 1 of Article 21 of that Agreement to delay application of its
provisions for a period of five years from the date of entry into force of the Agreement for Peru.
Under the Single Undertaking of the Uruguay Round, Peru committed to implement the Agreement
on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (WTOAgreement on Customs Valuation).  Peru was scheduled to apply the provisions of this Agreement on
1 April 1999 but requested a waiver from this obligation
8;  recognizing the substantial efforts Peru had
made, WTO Members granted a waiver until 1 April 2000 under specific terms and conditions.9  In
particular, since 1 January 2000 Peru has applied the provisions of the WTO Agreement on Customs
Valuation to half of the headings in its customs tariff.  Peru has notified the Council for Trade in
Goods of such headings and of progress made in fulfilling the work programme and the status of its
implementation of the Agreement.10
14. Peru has made considerable efforts to reform and modernize its customs administration and
continues to receive technical assistance to implement the WTO Agreement on Customs Valuation.11
(b) Rules of origin
15. Peru applies both preferential and non-preferential rules of origin.  Specific rules of origin are
applied to imports covered by trade agreements or international conventions containing these
requirements.  Of particular importance for Peru are those of the Andean Community and the Latin
American Integration Association (LAIA).  Peru participates in the WTO Committee on Rules of
Origin and has provided information on its practices with reference to Article 2(h) as well as
paragraph 3(d) of Annex II of the Agreement.12
16. The Andean Regime common rules of origin are defined in Decisions 416 and 417 of
30 July 1997.  Andean origin is granted to products that, incorporating non-Andean raw materials,
                                                     
7 Supreme Decree No. 128-99-EF, 31 July 1999;  and WTO document G/VAL/N/3/PER/1,
16 September 1999.
8 WTO document G/VAL/W/31, 1 April 1999.
9 WTO document WT/L/307, 23 July 1999.
10 WTO documents G/C/W/167, 17 November 1999 and G/VAL/20, 14 January 2000.
11 See WTO document G/VAL/W/31, 1 April 1999 for details on customs reform, and Attachment 1 to
WTO document WT/L307, 23 July 1999 for details on Peru's implementation of the WTO Agreement onCustoms Valuation.
12 WTO document G/RO/W26, 25 March 1998.Peru WT/TPR/S/69
Page 27
undergo a tariff classification change;  alternatively, a value-added criterion may be used, which
requires that the c.i.f. value of non-native materials does not exceed 50% of the f.o.b. value of the
final product for exports from Colombia, Peru and Venezuela, or 60% for exports from Bolivia and
Ecuador.  The value-added criterion is also applied to goods that are the product of an assembly
operation.  Andean Decision 416 also established complementary rules on re-exports and direct
shipment from third countries, and reinforced the mechanism to handle disputes concerning rules of
origin.  Andean Decision 417 opened the possibility of establishing special rules of origin for specific
sectors.
17. The general LAIA regime, consolidated in Resolution 252 of 4 August 1999, applies to trade
with Peru's LAIA partners although most agreements contain specific provisions.  For instance, the
agreement with Chile includes specific provisions for textiles and apparel, products derived fromcopper or zinc, pharmaceuticals, agrochemicals, and fruit preparations;  while the trade agreement
with Brazil includes specific provisions for textile products.
18. Non-preferential rules of origin are applied to imports subject to anti-dumping or
countervailing duties.
13  The scheme requires a certificate of origin for all products classified under
any tariff line subject to anti-dumping or countervailing provisions.  The certificate must be issued inSpanish (or an official translation must be attached) by the competent authority of the country or place
of origin, or an officially authorized organization under the administration of the country where the
certificate is issued;   certificates are valid for 90 days.  If the certificate is missing, incomplete or
questionable, importers are required to provide a financial guarantee equivalent to the amount of
applicable anti-dumping duties, which falls due after 60 days unless a valid certificate is presented.
The previous general rules may be complemented by the Ministry of Industry, Tourism, Integration
and International Trade Negotiations (MITINCI), through Ministerial resolutions containing specificrequirements (for instance, the content and format of certificates required for textiles under HS 52 and
55 were established by Ministerial Resolution No. 102-95-ITINCI/DM and modified by Ministerial
Resolution No. 142-96-ITINCI/DM).
(iii) Tariffs
(a) Structure
19. Peru's tariff nomenclature is based on the NANDINA, the common nomenclature of the
Andean Community countries, which is based on the Harmonized Commodity Description and
Coding System (HS).  The tariff nomenclatur e was changed through Supreme Decree No.119-97-EF
of 25 September 1997 to fully incorporate, from 1 January 1998, the second amendment of the HS.
To support the diversification of Peruvian exports, several lines were added or modified by SupremeDecree No. 024-98-EF of 15 March 1998.  As at August 1999, the Peruvian tariff nomenclature
consisted of 6,890 lines at the 10-digit HS level.
20. As mentioned in the Secretariat Report for Peru's previous Trade Policy Review, the tariff
structure was simplified in the early 1990s with the adoption of a two-level  ad valorem  tariff applied
on the c.i.f. value of imports:  in June 1993, a rate of 15% was established for 86% of tariff lines and arate of 25% for the remainder.  That structur e was changed through Supreme Decree No. 035-97-EF
of 13 April 1997, when the rates were reduced to 12% and 20%.  Simultaneously, tariffs on some
300 agricultural products (including certain grains, meat, milk, and vegetables) were increased from
15% to 20%.
                                                     
13 Supreme Decree No. 021-95-ITINCI of 5 August 1995, and Ministerial Resolutions
Nos. 102-95-ITINCI/DM and 142-96-ITINCI-CM of 12 August 1995 and 9 October 1996.WT/TPR/S/69 Trade Policy Review
Page 28
21. The average applied MFN tariff is 13.6%;  this average falls to 13.2% when surcharges and
variable specific duties are excluded (Table III.1).  Agricultural imports are on average subject to
higher rates than manufactured products:  17.8% against 13% including all import charges, or 14.8%
against 13% if tariff surcharges and variable specific duties are excluded.   Despite these charges, the
structure of the Peruvian tariff remains relatively simple;  some 84% of all tariff lines are subject to a
12% duty rate.
Table III.1
Summary analysis of Peru's tariff
(Per cent)
Applied tariffs, August 1999 Tariff bindings
AnalysisNo. of
linesAvg. applied
tariffaRangeaStd-devaCVaAvg. applied
tariffBase rate
1995Final rate
2004
(%) (%) (%) (%) (%) (%)
Total 6,890 13.6 12-71 4.2 0.3 13.2 30.3 30.1
By WTO categoryb
Agriculture 897 17.8 12-71 8.4 0.5 14.8 32.5 31.1
Live animals and products thereof 94 22.8 12-30 8.8 0.4 16.8 30.0 30.0
Dairy products 34 33.7 25-52 12.8 0.4 20.0 48.6 40.1
Coffee and tea, cocoa, sugar, etc. 164 16.7 12-71 9.1 0.5 14.1 33.0 31.6
Fruit and vegetables 195 22.6 12-25 4.8 0.2 18.7 30.0 30.0
Grains 32 20.4 12-69 12.9 0.6 14.0 64.2 40.7
Beverages and spirits 49 18.4 12-25 4.8 0.3 14.4 30.0 30.0
Manufactures 5,972 13.0 12-20 2.6 0.2 13.0 30.0 30.0
Leather, rubber, footwear and travel
goods194 13.1 12-20 2.7 0.2 13.1 30.0 30.0
Textiles and clothing 953 17.6 12-20 3.7 0.2 17.6 30.0 30.0
By ISIC sectorc
Agriculture and fisheries 393 14.9 12-69 6.2 0.4 13.5 31.6 30.6
Mining 114 12.0 12-12 0.0 0.0 12.0 30.0 30.0
Manufacturing 6,382 13.6 12-71 4.1 0.3 13.2 30.2 30.1
By stage of processing
Raw materials 804 14.0 12-69 5.1 0.4 13.1 31.4 30.4
Semi-processed products 2,293 13.3 12-71 3.6 0.3 13.1 30.2 30.1
Fully processed products 3,793 13.7 12-52 4.4 0.3 13.3 30.2 30.1
By HS section
01 Live animals and products 270 17.8 12-52 10.0 0.6 14.4 32.3 31.3
02 Vegetable products 356 17.6 12-69 7.1 0.4 15.2 33.4 31.2
03 Fats and oils 62 12.0 12-12 0.0 0.0 12.0 30.0 30.0
04 Prepared foods, etc. 268 18.1 12-71 8.4 0.5 14.8 31.5 30.7
05 Minerals 186 12.0 12-12 0.0 0.0 12.0 30.0 30.0
06 Chemicals and products 1,343 12.0 12-17 0.1 0.0 12.0 30.0 30.0
07 Plastics and rubber 282 12.0 12-12 0.0 0.0 12.0 30.0 30.0
08 Hides and skins 82 12.0 12-12 0.0 0.0 12.0 30.0 30.0
09 Wood and articles 97 12.0 12-12 0.0 0.0 12.0 30.0 30.0
10 Pulp, paper, etc. 199 12.0 12-12 0.0 0.0 12.0 30.0 30.0
11 Textile and articles 939 17.6 12-20 3.6 0.2 17.6 30.0 30.0
12 Footwear, headgear 57 16.2 12-20 4.0 0.2 16.2 30.0 30.0
13 Articles of stone 163 12.0 12-12 0.0 0.0 12.0 30.0 30.0
14 Precious stones, etc. 56 12.0 12-12 0.0 0.0 12.0 30.0 30.0
15 Base metals and products 665 12.0 12-12 0.0 0.0 12.0 30.0 30.0
16 Machinery 1,167 12.3 12-20 1.5 0.1 12.3 30.0 30.0
17 Transport equipment 203 12.0 12-12 0.0 0.0 12.0 30.0 30.0
18 Precision equipment 311 12.0 12-12 0.0 0.0 12.0 30.0 30.0
19 Arms and munitions 25 12.0 12-12 0.0 0.0 12.0 30.0 30.0
20 Miscellaneous manufactures 152 12.0 12-12 0.0 0.0 12.0 30.0 30.0
21 Works of art, etc. 7 12.0 12-12 0.0 0.0 12.0 30.0 30.0
CV = Coefficient of variation.
a Includes surcharge, and variable specific rates;  ad valorem  equivalents based on August 1999 prices.
b 21 tariff lines are excluded from both WTO agriculture and manufactures definitions (essentially petroleum products).c ISIC Classification (Rev.2), excluding electricity (1 line).
Source : WTO Secretariat estimates, based on data provided by the Peruvian authorities.Peru WT/TPR/S/69
Page 29
22. Peru grants MFN treatment to all partners.  There is little evidence of tariff escalation at the
aggregate MFN level.  Taking into account surcharges and variable specific duties, the average
applied tariff on raw materials is slightly higher than on fully processed products, but these aggregate
figures do not incorporate tariff concessions granted for specific activities, which could introducesome escalatory effects in specific industries (sectoral concessions are discussed in section (g)).
(b) Tariff surcharges
23. Supreme Decree No. 035-97-EF introduced, in 1997, a 5% tariff surcharge on
331 agricultural products.
14  Changes introduced later that year by Supreme Decree No. 119-EF-97
increased the number of tariff lines subject to the surcharge to 350.  Supreme Decree No. 141-99-EF
of 24 August 1999 added two more lines and increased the surcharge to 10% for meat products
(56 items in HS Chapters 02 and 16).  As at September 1999, 296 lines were taxed at 5% and 56 at
10%.  All these items correspond to agricultural products (HS 1-24) except for one, dextrine andstarch, classified in HS Chapter 35.
24. The tariff surcharge is applied on the c.i.f. value of imports before tax.  Revenue from the
surcharge is channelled to the Agricultural De velopment Fund, complementing the Fund's income
from variable specific duties.  The introduction of the present surcharge system in 1997 may be seen,
at least in part, as an attempt to find alternative income sources for the Agricultural Development
Fund in the face of tightening budgets, and strong commodity prices that reduce the take fromvariable specific duties.
25. Tariff surcharges apply also to imports under pr eferential agreements;  in this case the margin
of preference is applied to the sum of the base and surcharge rates.
(c) Variable specific duties
26. As described in the Secretariat Report for Peru's previous Review, variable specific duties
have been applied since 1991 to imports of several agricultural products.
15  These duties are intended
as a price stabilization and protection mechanism;  they also provide a dedicated source of revenue for
the agriculture sector since the collected duties are exclusively channelled to the Agricultural
Development Fund.
27. After a number of initial modifications, the mechanism currently in force was established
through Supreme Decrees No. 114-93-EF of 28 July 1993 and No. 133-94-EF of 10 October 1994.16
Variable specific duties are based on the difference between a floor price and the f.o.b. import price.For each product, a moving average over the previous 60 months of international f.o.b. prices is
calculated and adjusted using the U.S. consumer price index.  The floor price is this 60-month averageadjusted by adding a share of the standard deviation during the period.  The specific duty is
determined as the difference between the floor and statutory reference prices increased by multiplying
the difference by a "margin" factor to accoun t for additional import costs (e.g. transport and
insurance).
28. The mechanism of variable specific duties currently applies to 23 tariff items in five product
groups:  milk, maize, sorghum, rice, and sugar;  the mechanism was eliminated for wheat products in
                                                     
14 A temporary surcharge applied on a reduced list of agricultural products was first introduced in 1993.
15 GATT (1994).
16 The hesitant start of the mechanism is reflected by the number of different regulations - 9 Supreme
Decrees, 5 Decree Laws and 2 Ministerial Resolution - adopted between March 1991 and December 1992(Boloña and Illescas (1997), pp. 89-102).WT/TPR/S/69 Trade Policy Review
Page 30
August 1998.17  The same variable duties are applied to maize and sorghum (based on maize prices)
despite the differences in price levels and variations.  Chart III.1 shows reference and floor prices
together with estimated ad valorem  equivalents for variable specific duties over 1993-99 for dairy
products, maize, rice, sugar and wheat.
29. For all of these products, there have been long periods since 1994 when the mechanism
resulted in no variable specific duties due to the relatively high levels of world commodity prices.During those periods, the mechanism neither dampened price upturns nor resulted in direct fiscal
revenue for the sector.  As mentioned, the latter may help explain the decision to establish the tariff
surcharge and allocate the associated revenue to  the Agricultural Development Fund rather than
simply to raise the base tariff rates (in which case revenues would have gone into consolidated fiscal
revenue).  Nevertheless, variable specific duties seem to have been effective in reducing variability indomestic prices relative to those observed in world markets, particularly for dairy products and sugar.
30. Recent decreasing international commodity prices have reactivated the tax-collection aspect
of the variable specific duty mechanism, and in certain cases have afforded considerable protection to
Peruvian producers through relatively high tariffs.  WTO Secretariat estimates of ad valorem
equivalents for 1999 (based on August 1999 prices), are:  6% for rice, 21% for maize, 27% for milk,and 54% for sugar.
18
(d) Bindings
31. Peru bound all tariff items at a ceiling rate of 30%, with the exception of a few agricultural
items bound at a final rate of 68% (Table III.2).  Applied rates appear to be below bound levels for all
items;  however, the wide margin between applied and bound rates, as well as variable specific duties
undermine the predictability of Peru's commitments.  Variable duties, in particular, are subject to the
effect of exogenous fluctuation in commodities price, which could automatically increase appliedtariffs beyond Peru's maximum tariff commitments.  For instance, according to the latest figures
available from the Central Bank, from 24 to 30 January 2000 the average international price of sugar
was US$120 per tonne while the variable specific duty amounted to US$171 per tonne.
19  However, in
the context of this review the authorities stat ed that Peru invariably takes into account its
commitments with respect to tariff bindings.
(e) Preferential tariffs
32. Preferential tariff concessions are granted to imports from the Andean Community and the
Latin American Integration Association.  In 1998, tari ff preferences applied to just under one quarter
of all Peruvian imports (Chapter II(4)(ii)).
33. Tariff concessions in the context of the Global System of Trade Preferences are marginal.
The Peruvian authorities indicated that the second round of negotiations, completed in
November 1998, resulted in a unique bilateral agreement with Thailand.  Concessions covered a
limited set of products (58 items), and the margin of preference granted ranged from 6% to 20%.
                                                     
17 Variable specific duties are collected on the following HS items:  milk (0402.10,  0402.21,
0405.90.10, 0405.90.90);  maize (1005.90.11,  1005.90.12, 1005.90.90);  rice (1006.10.90,  1006.20.00,
1006.30.00, 1006.40.00);  sorghum (1007.00.90);  and sugar (1701.11.90,  1701.12.00,  1701.99.00.90).
18 These estimates, based on price differences, differ slightly from the estimates provided by the
authorities, which are based on the average value of imports for August 1999 (5% for rice, 21% for maize,  34%for sugar, and 39% for milk).
19 Banco Central de Reserva del Perú (2000).Peru WT/TPR/S/69
Page 31
0306090120150180210240270300
0102030405060708090100
0255075100125150175200225250
0102030405060708090100
04080120160200240280320360400
0102030405060708090100
050100150200250300350400450500
0102030405060708090100
6008001,0001,2001,4001,6001,8002,0002,2002,4002,600
0102030405060708090100Chart III.1
Variable specific duties: AVEs and prices, August 1993 - August 1999
US$/T % US$/T % US$/T %
MilkbWheat aMaize Rice
a             Variable duties eliminated in August 1998.
b             Variable duties established in October 1994.c             Measured by the coefficient of variation over the period.  
Source :  WTO Secretariat estimates, based on monthly price data provided by the Peruvian authorities.SugarUS$/T %U S $ / T % 94    95   96    97   98    99   94   95   96    97   98    99   94    95   96    97   98    99
 94    95    96   97   98    99 94   95    96   97   98    99Reference price
(US$ per tonne; 
Left-hand scale)
Floor price 
(US$ per tonne; Left-hand scale)
Ad valorem  equivalent 
to variable specific rate 
(per cent;
Right-hand scale)
Price variabilityc
Commodity         Wheat
Maize
RiceSugar
Milk    Domestic
reference 
price
15.6
19.612.7
11.9
6.7World
reference 
price
18.8
22.515.8
20.1
12.0WT/TPR/S/69 Trade Policy Review
Page 32
Table III.2
Peru's tariff items bound at rates other than 30% and their applied rates, August 1999
Bound rates
HS Code 1998 Description Applied ratea
CurrentbBase Finalc
0402.10.10.00, 0402.10.90.00,
0402.21.11.00, 0402.21.19.00,
0402.21.91.00, 0402.21.99.00Milk 52 84 97 68
0405.90.10.00 Dehydrated butter 52 101 128 68
1001.90.10.00 Wheat for sowing 12 88 105 68
1001.90.20.00 Other wheat 25 88 105 68
1005.90.11.00, 1005.90.90.90 Maize 38 108 141 68
1006.10.90.00, 1006.20.00.00,
1006.30.00.00, 1006.40.00.00Rice 31 133 185 68
1007.00.90.00 Sorghum except for sowing 68 103 131 68
1101.00.00.00 Wheat flour 25 75 81 68
1103.11.00.00 Boiled grains and groats of wheat 25 75 81 68
1701.11.90.00, 1701.12.00.00,
1701.99.00.90Sugar 71 102 130 68
1902.11.00.00, 1902.19.00.00 Food pastas 25 72 76 68
a Including AVE of specific variable duties.
b Estimate based on a linear phasing out.c To be applied by 2004.
Source : WTO Secretariat.
(f) Concessional import regimes
34. The temporary admission regime allows the entry, with suspension of import duties and other
applicable taxes, of certain goods to be re-exported within a determined period after transformation orprocessing.  The temporary import regime contains similar provisions but applies to merchandise to
be re-exported without transformation.  The authorities noted that since Peru's previous Review both
regimes have been simplified and made more efficient, in particular through the establishment of an
automatic approval procedure for temporary admissions and the reduction of red tape in the restitution
of guarantees.
20
35. In 1998, about 10% of total imports were admitted under the temporary admission and import
regimes:  the total c.i.f. value of goods temporarily admitted was US$343.9 million while temporary
imports amounted to US$552.8 million.  Over two thirds of these concessional entries related to the
mining industry.
36. The stock replacement regime was also modified by the new customs regulations, although
additional constrains were introduced.  This regime allows the entry, with the suspension of all import
and domestic taxes, of inputs equivalent to those previously imported and incorporated in exportedgoods.  New requirements under the regime include that replacement should take place within the
one-year period following the date of export.
(g) Concessions
37. Donations made to public sector entities (with the exception of public enterprises) are
exempted from import duties as are donations to religious entitities and foundations established for
                                                     
20  New provisions are included in Legislative Decree No. 809 of 19 April 1996, and in Supreme
Decree Nos. 121-96-EF and 122-96-EF of 24 December 1996.Peru WT/TPR/S/69
Page 33
educational, scientific, social or medical aid purposes.  Imports of goods donated to religious or public
entities, or financed with donated funds and as signed to technical cooperation projects, are also
exempted from the general sales tax and the selective consumption tax.
38. Import duties are applied on only 50% of the f.o.b. value of medical samples;  other samples
are exempted from import duties provided they ha ve no commercial value.  Fiscal exoneration is
granted under specific conditions on imports of vehicles and prostheses for handicapped persons;  andon imports by officials of the diplomatic corps and international organizations.  Under specific
conditions, recognized educational entities are exonerated from domestic and import duties on imports
of goods for educational purposes (595 items in December 1999).
39. Import of goods for exploration activities in the hydrocarbons sector (256 tariff items mainly
in HS Chapters 28, 38, 84 and 85) are exempted from all import duties and domestic taxes for amaximum period of seven years.  The payment of import duties and domestic taxes for several goods
imported for agricultural activities is under the responsibility of the Ministry of Finance (75 tariff
items, mainly fertilizers and chemical products).
40. In addition to concessional import regimes and the drawback system (section (3)(iv)), import
duties on capital goods may be paid over three years at an interest rate equal to the passive rate forforeign currency (Supreme Decree No. 182-98-EF of 31 December 1998).
(iv) Other charges affecting imports
41. In addition to import duties, and anti-dumping and countervailing duties (section (vi)(a)),
imports are subject to charges for customs procedures (customs clearance, cargo handling, laboratory
analysis, and inspection fees), the selective consumption tax (ISC), the general sales tax (IGV), and
the municipal promotion tax.
42. Charges for customs clearance amount to 0.6668% of the UIT (fiscal unit) for imports under
the general regime, or half this amount for imports under the simplified regime.
21  Handling fees on
international air cargo remain twice as high as th ose on national air shipments.  Inspection fees are
discussed in section (i)(b).
43. Domestic taxes seem to be levied equally on national and foreign products and without
differentiating imports by origin.  The authorities noted that preferential concessions concernexclusively import duties;  no domestic tax concessions are granted through preferential agreements.
Sectoral and regional tax incentives are discussed in section (4)(iv).
44. The selective consumption tax is levied on:  the domestic sale and importation of hydrocarbon
products, cigarettes, beverages, and vehicles;  and on gambling and bets, such as lotteries, bingo,
raffles, slot machines and other electronic machines, casinos, and horse races (Table AIII.2).Cigarettes, hydrocarbon products and slots machines are taxed at specific rates while all other
products are taxed at ad valorem  rates ranging from 2% to 55% of the c.i.f. value (for imported goods)
or of the sale value (for domestic goods).
45. The manner in which the ISC is imposed on vehicles may raise questions about national
treatment:  imports of new vehicles are taxed at 30% whereas used vehicles are taxed at 55% unlessthey have been reconditioned or repaired in a CETICOS trade and industrial processing zone, in
which case they are exempted from the ISC.  As discussed in section (4)(iii), this has became a
substantial incentive for vehicle reconditioning and repair activities in the CETICOS.
                                                     
21 As at August 1999, the UIT was equivalent to S/. 2,800.WT/TPR/S/69 Trade Policy Review
Page 34
46. The general sales tax applies to the importation or domestic sale of goods;  the domestic
rendering or use of services;  construction contracts;  and the sale of real estate by constructors or
their associates.  The IGV is collected at a rate of 18% (including the 2% municipal promotion tax);
on imports it is levied on the sum of the c.i.f. value plus paid tariff and ISC.  The IGV is not levied on
exports of goods and services, and numerous domestic activities are exempt (Tables AIII.3 and
Table AIII.4).
47. The structure of charges affecting the importation of three illustrative products is reported in
Table III.3;  the ad valorem  equivalent of all charges and taxes affecting imports can be relatively
high, ranging in the examples provided from 38%  for steel products to 83% for new vehicles.
Table III.3
Structure of charges on imports of selected products in Peru, August 1999(US$ and per cent)
Description MaizeFlat-rolled products of
iron or non-alloy steelCars
% Value % Value % Value
F.o.b. value 100.00 100.00 100.00
Freight (approximately) 10 10.00 10 10.00 10 10.00
Insurance (approximately) 5 5.00 5 5.00 5 5.00
C.i.f. value 15 115.00 15 115.00 15 115.00
Import duty (calculated on c.i.f. value) 12 13.80 12 13.80 12 13.80
Variable import levya 21 24.15 n.a. n.a. n.a. n.a.
Tariff surcharge 5 5.80 n.a. n.a. n.a. n.a.
Inspection fees (calculated on the f.o.b. value) n.a. n.a. 0.80 0.80 0.65 0.70
Laboratory analysis fees or similar chargesb n.a. n.a. n.a. n.a. n.a. n.a.
Cargo handling charges by ENAPU (US$ per kg.) 0.01 0.00 0.01 0.00 0.01 0.00
Final value of import 158.75 129.60 129.45
ISC (calculated on c.i.f. value plus import duties) n.a n.a n.a n.a 30 38.64
IGV and IPM (calculated on c.i.f. value plus import
duties and levies plus the ISC) 1828.57
1823.18
18 30.14
Wholesale cost in Peru 187.32 152.78 198.23
n.a. Not applicable.
a Estimated ad valorem  incidence of specific levy based on average value of monthly imports for August 1999.
b The selected products do not require laboratory tests or others.
Source: Information provided by the Peruvian authorities.
(v) Import prohibitions, restrictions, and licensing
(a) Import prohibitions and restrictions
48. The list of prohibited imports is relatively short (Table AIII.5).  In most cases, prohibition is
motivated by health and environmental protection considerations, the only exceptions are theprohibition on geographical texts or mappings that mutilate national territory (national identity) and
on foreign alcoholic beverages bearing the name Pisco (protected denomination of origin).
49. Imports of products on the restricted lists generally require an authorization from the relevant
ministry (Table AIII.6).  Some substances on the list should be registered within the sanitary
authorities;  this gives exclusive import rights to the holder of the respective sanitary certificate.  In
order to control narcotics, the State has a monopoly on narcotics trade.Peru WT/TPR/S/69
Page 35
(b) Import licensing
50. The authorities have notified that no administrative procedures relating to import licencing
exist in Peru.22
(vi) Contingency measures
(a) Dumping and subsidies remedies
51. As part of the Final Act of the Uruguay Round, the Agreement on Implementation
of Article VI of the GATT 1994 and the Agreement on Subsidies and Countervailing Measuresbecame part of the national law of Peru on 1 January of 1995.  Regulations implementing the rules
laid down in both Agreements were establishe d by Supreme Decree No. 043-97-EF of 29 April 1997.
Peru participates actively in the Committees on Subsidies and Countervailing Measures, and
Anti-Dumping Practices (including its Ad Hoc Group on Implementation);  as a result, the Peruvian
legislation has been notified and submitted for Members' scrutiny.
23  Former trade remedy regulations
(Supreme Decree Nos. 133-91-EF and 052-92-EF) are still in force and are applied to non-WTO
members.
52. INDECOPI's Dumping and Subsidies Commission (C FDS) is the administrative authority of
first instance with powers to initiate and resolve proceedings concerning dumped or subsidized
imports.  Responsibility for interpreting and applying decisions in second and final administrative
instance lies with INDECOPI's Tribunal, whose decisions are may be appealed directly in Peru'sSupreme Court.
53. From October 1994 to December 1999, two investigations were initiated against subsidy
practices, involving sweets from Argentina and transport vehicles from Brazil.  The first resulted in
the imposition of provisional and final duties from January to December 1995.  The Peruvian
authorities indicated that after the decision was taken the Government of Argentina agreed toeliminate the subsidy.  In the case of transport vehicles from Brazil, the Commission concluded the
existence of an export subsidy, however no countervailing measure was undertaken since the amount
of the subsidy was found to be minimal (Table III.4).
54. From October 1994 to December 1999, the CFDS initiated 22 dumping investigations, of
which nine  resulted in provisional duties and seven in final duties.  The majority of cases concerneddumped imports from non-WTO members, in particular China.  The type of products involved varies
widely and includes agricultural products, clothing and footwear, steel products, and mechanical
instruments (Table III.4).
55. Virtually all final anti-dumping measures adopted since 1995 were still in force in
December 1999 (the duties imposed in 1997 on Brazilian calcium carbide, were suspended inDecember 1998, and in February 1999 the CFDS initiated the review of anti-dumping duties in force
since March 1997 on six footwear items from China).  The Peruvian authorities stated that because of
the difficulty in identifying and contacting specific producers, and the lack of cooperation from the
exporters' government authorities, Peru's anti-dumping actions undertaken against non-WTO
members apply to all producers in the targeted country.  In contrast, as a result of stricter WTOdisciplines, actions against WTO Members must target specific producers.
                                                     
22 WTO document G/LIC/N/3/PER/2, 19 January 1999.
23 Peru's notification of its laws are reported in WTO documents:  G/ADP/N/1/PER/1 and its
Supplements 1 and 2 (29 March 1995, 5 June 1996, and 28 August 1997);  subsequent questions and replies canbe found in:  G/ADP/W/83 (17 October 1995), G/ADP/W/120 (19 October 1995), G/ADP/W/245(8 January 1996), G/ADP/W/258 and G/ADP/W/259 (29 January 1996), G/ADP/W/394 (7 May 1996), andG/ADP/Q1/PER/1 to 12 (October 1996 to September 1998).WT/TPR/S/69 Trade Policy Review
Page 36
Table III.4
Anti-dumping and countervailing actions taken by Peru, January 1995-December 1999
Provisional Final decisionCountry ProductsDate of
initiation Date/dutyMarket
shareaBasis of determination
Anti-dumping
China Textiles (cotton, mixed, synthetics)
seven items in HS 52, 54 and 5516.10.94 14.05.95
10%  (1 item)02.08.95
10% to 50.97% (5 items)
No injury (2 items)3.37 Average import prices
supplied by the Boardof CartagenaAgreement (JUNAC)
Korea, Rep.ofTyres for lorries, sizes:
1,200-20 (16 pr)
1,200-20 (18 pr)17.06.95 No 10.05.96
No dumping
No injury28.80 Home and third
markets (Syria andEcuador) prices
China Water meters (9028.20.20.00)
(Sizes:  ½", ¾" and 1")23.08.95 No 24.11.95
30.00% to 122.21%351.05 Prices charged to other
producers in third
countries
China Clothing:
35 tariff items in HS 61 and 6211.03.96 15.04.96
10.63% to
910.91%16.03.97
No injuryn.a. Average import prices
supplied by JUNAC
China bFootwear 11.03.96 15.04.96
10.82% to
903.92%(on 4 items)16.03.97
10.82% to 903.92%
(15 items)n.a. Export price to third
country (USA)
Chile Woven labels
5807.10.00.0018.04.96 20.12.96
161.97%23.04.97
55.77%57.94 Export price to third
country (Brazil)
Mexico Maize subproducts:
1108.12.00.00 (maize starch)
1702.30.20.00 (glucose syrup)10.05.96 24.08.96
9.51%
14.68%21.12.96
9.51%
19.739%26.01
22.46Home market price
China Single-phase electric meters 11.10.96 No 30.11.96
No injury
Brazil cCalcium carbide 17.11.96 07.05.97
65%14.08.99
No injuryHome market price
China Single-phase electric motors 22.02.97 No 05.06.97
No injury
Netherlands Evaporated milk with no added
sugar or other sweetening matter24.08.97 No 30.08.98
No injury
Colombia Synthetic staple fibres, not carded,
combed or otherwise processed for
spinning, of polyester24.10.97 No 13.12.97
Case withdrawn
Argentina Calcium carbide 25.02.98 No 05.02.99
Dumping margin
de minimis
China Electric meters (9028.20.10.00)
Wuxi brand
Holley brand09.02.98 13.08.98
36.66%
10.96%20.02.99
37.89% on all imports
from China34.46 Prices charged to
other producers inthird countries
Chile Uncooked pasta 07.03.98 No 20.03.99
No injury
Russia Steel products (HS 72):
Hot-rolled coil and plate, thin
Hot-rolled coil and plate, thick
Cold-rolled coil and plate05.02.99 07.02.99
20.4%
15.8%
13.3%08.12.99
11 items
21.49%64.7 Reconstructed value
in third country
(Brazil)
Ukraine Steel products (HS 72):
Hot-rolled coil and plate, thin
Hot-rolled coil and plate, thick
Cold-rolled coil and plate08.02.99 07.02.99
18.8%
13.7%
15.2%Pending 4.4 United States market
price
China Footwear (8 items:  3 initiations,
5 revisions)11.02.99 No Pending
Chinese
TaipeiFootwear (HS 64):
8 items11.02.99 12.05.99
Range:
11.11% to900.00%Pending .. Third-country export
price
Table III.4 (cont'd)Peru WT/TPR/S/69
Page 37
Provisional Final decisionCountry ProductsDate of
initiation Date/dutyMarket
shareaBasis of determination
Lithuania Single-phase electric meters 27.02.99 No Pending
China Body and kick board 23.09.99 14.10.99
65.3% to
223.5%Pending .. Third country
domestic and exportcountry (USA)
Chinese
TaipeiBody boards 23.09.99 14.10.99
734.5%Pending .. Third country
domestic and export
country (USA)
Countervailing measures
Argentina Sweets 11.12.94 5.1.95
No27.10.95
14.27%, 8.10% and0.0%.. ..
Brazil Vehicles 14.12.97 No Prohibited subsidy
Amount of subsidyde minimisBrazilian Government
information
.. Not available.
a Dumped imports as % of domestic consumption (usually based on preceding year).
b Four items were investigated but duties were eventually applied to 15 items.
c The decision imposing duties was annulled by Resolution 304-98/TDC-INDECOPI of 13 December 1998, calculation of a new
dumping margin is pending.
Source : Semi-annual reports by Peru to the Committee on Anti-Dumping Practices (WTO documents G/ADP/N), and
information provided by the authorities.
56. In December 1999, 36 items were subject to final ad valorem  anti-dumping duties and
22 items to provisional levies, ranging from 11% to 900% of the f.o.b. value of imports.  In addition,following Andean Resolution No. 242 of 24 June of  1999, specific anti-dumping duties are in force
for a three-year period on imports of steel products (four items) from Ukraine and Russia at rates of
US$40 or US$50 per tonne.
57. Within the Andean Community, three investigations have been requested by Peruvian
producers since 1995:  two have been rejected and a final decision was still pending in the third case(imports of plastic bags from Bolivia) in September 1999.
(b) Safeguards
58. At the multilateral level, Peru's safeguards mechanism is governed by the WTO Agreement
on Safeguards, in force since January 1995.  No safeguards actions have been taken at this level.  Theregulatory measures to facilitate implementation of the Agreement were established by Supreme
Decree No. 020-98-ITINCI of 19 December 1998.
24  Peru reserved its right to use the transitional
safeguards provisions of Article 6 of the Agreement on Textiles and Clothing.25  In September 1999,
Peru initiated an investigation against Russia and Ukraine for hot and cold rolled steel;  final
resolution is pending.
59. The authority responsible for applying safeguard measures is a multi-sectoral commission
comprising the Minister of Economy and Finance, th e Minister of Industry, Tourism, Integration and
International Trade Negotiations, and the minister of the sector concerned with the measure.
Investigations are conducted by INDECOPI's Dumping and Subsidies Commission.  Decisions taken
by the multi-sectoral commission must be made official by Ministerial Resolution of the MITINCI.
60. In the context of preferential trade agreements, no actions have been taken over the last six
years within the Andean Community, but Peru maintains safeguard measures against several
                                                     
24 Notifications of laws can be found in WTO documents G/SG/N1/PER/1, 29 March 1995, and
G/SG/N1/PER/2, 22 January 1999.
25 WTO document G/TMB/N/30, 6 March 1995.WT/TPR/S/69 Trade Policy Review
Page 38
agricultural imports from its LAIA partners.  Thus, from 1994 to 1996 only 65% of the preferential
margin was applied to certain imports from Argentina (powdered milk, wheat and soya oil),  Chile
(grapes, pears and apples) and Uruguay (rice).  These provisions were reinforced in 1996 by a full
suspension of preferential treatment for powdered milk, wheat and rice.  In 1997, safeguard measures
on soya oil were removed, as were all safeguard measures applied on grapes, pears and apples
following the Economic Complementary Agreement signed with Chile.
(vii) Regulations, standards and other technical requirements
(a) Regulation review
61. The INDECOPI Commission on Technical and Tr ade Regulations has three main functions:
to approve technical standards and mandatory regulati ons for legal metrology;  to qualify and certify
companies and institutions issuing quality certificates;  and to give an opinion on the imposition byany entity of the Public Administration, of regulations  that may result in trade restrictions.  In relation
to the latter, the Commission acts as a review entity to examine whether any non-tariff trade barriers
introduced by other public agencies may be justified.  The Commission may initiate suchinvestigations on its own authority, or as a result of a complaint.
62. The review mandate of the Commission on Technical and Trade Regulations appears to be
a valuable transparency and analysis instrument to help prevent regulatory red-tape and sectoral
interests from undermining the benefits of overall liberalization.  The Commission has competency to
pronounce upon the non-applicability of administrative measures that infringe on the principleof freedom to trade included in Legislative Decree No. 668.  However, the authority originally
assigned to the Commission was weakened by Legi slative Decree No. 807 of 18 April 1996, which no
longer allows the Commission to suspend or decl are the non-applicability of non-tariff measures when
these are introduced through Supreme Decrees or Mi nisterial Resolutions.  According to the new
regulations, in these cases the Commission is restricted to sending its findings as a special report tothe Presidency of the Council of Ministers.
63. Of the 26 procedures initiated since 1993 by the Commission on Technical and Trade
Regulations the majority concerned measures undertaken by the Ministry of Agriculture;  some werefound to be non-tariff barriers (Table III.5).  Coinciding with the limitation imposed on its
competencies, the Commission's review activities have fallen sharply since 1996:  only two cases
were investigated in 1997, and these were archived, and two cases are pending for 1998 and 1999.
(b) Standards, testing, and certification
64. In June 1995, Peru accepted the Code of Good Practice for the preparation, adoption and
application of standards.  The enquiry point foreseen in Articles 10.1 and 10.3 of the Agreement on
Technical Barriers to Trade is the Commission on Technical and Trade Regulations. Technical
standards and metrology regulations are prepared, under the supervision of the Commission, by
technical committees;  these generally consist of producers, consumers, and experts in the sectorsconcerned.  The authorities indicated that the elaboration process relies on a technical and legalframework based on ISO/IEC Guides and Directives.
65. Approved standards are voluntary in nature, but may be made mandatory on a contractual
basis by agreement between the parties involved or through a technical regulation issued by a state
entity.  A legislative proposal to harmonize the periods allowed for issuing technical standards is
being coordinated between INDECOPI, MITINCI and the Ministry of External Relations.  The rulesfor the elaboration of standards allow private or public-sector agents to request the approval of
standards in emergency situations.  To date, these provisions have not been applied.Peru WT/TPR/S/69
Page 39
Table III.5
Reviews by the Commission on Technical and Trade Regulations of potential non-tariff restrictions, 1993-99
Number Procedure Object of the claim First instance result
001-CNM-P CARTOPEL S.A. of Ecuador
against CustomsCustoms resolution reclassifying the
imported product, which resulted ina different applied tariffUnfounded claim
002-CNM-P Association of gas bottlers against
Ministry of Mining and EnergyLabelling obligation Inappropriate claim.
003-CNM-P Textile Committee of SNI against
Ministry of AgricultureFumigation in vacuum rooms
required for imported cottonFound to be a non-tariff barrier and
thus non-applicable
004-CNM-P Self-initiation against Agriculture Double requirement of sanitary
certificateFound to be a non-applicable
requirement
005-CNM-P Self-initiation Decree prohibiting the circulation of
texts that mutilate the nationalterritoryFound to be a non-applicable Decree
006-CNM-P Refrigerating firm San Hilarión
against AgricultureFees collected by SENASA for
fictive sanitary inspection servicesOrder for not collecting the fee as a
pre-requirement for inspection
007-CNM-P Self-initiation against Ministry of
AgricultureMinisterial Resolution of 1994
prohibiting imports of citrus fruitfrom Argentina, Bolivia, Brazil,Ecuador, Paraguay and UruguayProcedure archived in 1999
(following the establishment of amechanism allowing imports of safecitrus fruit)
008-CNM-P National Press firm against
AgricultureRequirement of sanitary inspection
for imports of manufactured paper
and pasteboardFound to be a non-tariff barrier and
thus non-applicable (overruled in
second instance)
009-CNM-P Self-initiation Import prohibition of radioactive
products for medical useSuspension of the prohibition
010-CNM-P Self-initiation against Ministry of
AgricultureTemporary import prohibition on
potatoes from Colombia and
EcuadorQualified as non-tariff barrier
011-CNM-P Self-initiation against Ministry of
AgricultureImport prohibition of aggressive
bees, establishing differentiated
treatment between importers andnational producersQualified as non-tariff barrier
012-CNM-P Self-initiation against Ministry of
AgricultureImport prohibition on garlic and
onions from Chile and ArgentinaQualified as non-tariff barrier
013-CNM-P to
017-CNM-PBella Holandesa del Perú S.A.,
New Zealand Milk Products,
Polanco Carnes S.A. and
Assotiation of Food ProductsImporters against AgricultureMinisterial Resolution increasing
substantially the fee collected forsanitary inspectionSuspension of the Resolution (all
procedures were archived since the
disputed Resolution was derogated
in 1995)
018-CNM-P,019-CNM-PTextile and Wheat Mills
Committees of the SNIAdministrative procedures within
SENASA as pre-requisite to importQualified as non-tariff barrier
020-96-CRT-P CLEMENTS Peruana S.A. against
Fiscal Administration (SUNAT)Discriminatory measures in the
calculation of the basis for theselective competition taxUnfounded claim
021-96-CRT-P LORET DE MOLA S.A. against
CustomsSuspension of preferential tariffs Inappropriate claim
022-96-CRT-P LARIO S.A. against SENASA
and CustomsImport of some sausages from Italy
prohibited for sanitary reasonsClaimant desisted
001-97-CRT-P IMACO against Customs Application of import requirements
included in a 1984 Decree which,
according to the claimant, wasderogatedProcedure archived
002-97-CRT-P Self-initiation against Ministry of
HealthEstablishment of an official sanitary
certification for exports of food anddrinks for human consumptionProcedure archived
001-98-CRT-P Self-initiation Suspension of rice imports from all
countries affected by the "GorgojoKhapra"Pending
001-99-CRT-P Exporters Association (ADEX) Export prohibition on unprocessed
Cat's Claw except from determined
zonesFounded claim.  Technical report
send to the President of Ministries
Council
Source : Information provided by the Peruvian authorities.WT/TPR/S/69 Trade Policy Review
Page 40
66. INDECOPI's current system defines 303 Peruvian standards, of which 30% correspond to
international standards (mainly ISO), and nine metr ology standards.  When international standards do
not reflect the Peruvian situation (for instance in terms of technological development), approved
standards are based on regional or third-country practices.
67. In addition to voluntary standards, 36 mandatory technical regulations were approved through
Ministerial Resolution No. 084-91-ICTI/IND (18 March 1991).  These regulations included technicalrequirements for products such as cement, hydrocarbons, or explosives, and marking and labelling
regulations for the safe handling and use of products.  Some of these regulations have been replaced
by standards approved by the INDECOPI, which remain mandatory.
68. Some 200 other mandatory provisions have also been established to regulate sectoral
activities in areas such as agriculture, defence, fishing, health, manufacturing, mining,telecommunications, and transport.  It is not clear whether these regulations might represent
unjustified barriers to trade.  However, any of these regulations may be subject to scrutiny by the
Commission of Technical and Trade Regulations to determine their potential to create non-tariff
barriers.  Indeed, as mentioned earlier some have been qualified as such.
69. The Commission is responsible for accrediting testing laboratories and inspection and
certification organisms.  The authorities stated that accreditation is based on international guides and
recommendations provided by the CASCO Committee of the ISO.  No mutual recognition agreement
has been signed to date in this area.
70. In general, quality controls are made at the level of domestic distribution rather than at the
border, except for plant and animal products, which are subject to sanitary and phytosanitarymeasures at the point of entry.
(c) Marking, labelling and packaging
71. Metrology Standard NMP 001:1995 of 5 July 1995 (equivalent to OIML standard R79) is
generally applied to pre-packaged food.  In addition, Legislative Decree No. 716 of 18 April 1996 on
consumer protection established that the information attached to imported manufactured
products (including warnings and guaranty conditions) should be in Spanish.  For health and securityreasons, specific marking and labelling regulations are applied to food products (Supreme Decree
No. 007-98-SA), pharmaceutical products (Supreme Decree No. 010-97-SA), and insecticides
(Supreme Decree No. 15-95-AG).  Sectoral regulatio ns mentioned earlier include several mandatory
norms on specific product packaging and labelling, for instance for dried fruit and alcoholic
beverages.
(d) Sanitary and phytosanitary regulations
72. The competent authorities for sanitary, phytosanitary and health regulations are the Ministry
of Agriculture and the Ministry of Health, although responsibility for the administration of those
regulations is shared with other government agencies (in particular the Ministry of Fishing and
municipalities). Unlike standards approved by the INDECOPI, sanitary regulations are mandatory.
73. Since 1994, the National Health Institute has adopted international standards (issued by
Codex, AOAC, U.S. FDA and ICMES) for the establis hment of food quality certificates;  FAO and
WHO recommendations are used for nu tritional valuations.  With respect to sanitary supervision and
control of food and beverages, national regulations have been harmonized with international standards
(Codex Alimentarius guidelines and recomm endations) through Supreme Decree No. 007-98-SA
(25 September 1998).  As indicated by the authorities, these measures should facilitate the negotiation
of equivalence agreements with Peru's main export partners.Peru WT/TPR/S/69
Page 41
74. Imports and exports of plant and animal products and sub-products are regulated by
Supreme Decree No. 016-76-AL (28 October 1976)  and the following subsequent regulations:
Ministerial Resolution Nos. 009-91-AG (11 March 1991), 210-91-AG (4 April 1991), 259-91-AG
(22 April1991), 283-96-AG (1 April 1996), 399-99-AG (24 May 1999);  and Supreme Decree
No. 004-93-AG (1 March 1993).  Products subject to phytosanitary and zoo-sanitary requirements are
reported in Table AIII.7.
75. Resolution No. 0399-99-AG introduced differential treatment for plant and animal products
entering Peru by land, requiring that all such products be accompanied by sanitary and phytosanitary
certificates issued in the country of origin.  Importe d wheat flour must be fortified with 30 mg. of iron
per kg. for public health reasons (Supreme Decree No. 004-96-SA, 26 August 1996).
76. Emergency sanitary and phytosanitary provisions may be adopted by the Ministry of
Agriculture to suspend the entry of products that threaten Peru's sanitary and phytosanitary conditions.
As of October 1999, 20 emergency provisions ad opted by the SENASA (the agricultural sanitary
authority) were in force.  As discussed above, some of these measures were submitted to scrutiny by
the Commission on Technical and Trade Regulations , which found that some of them appeared to
constituted non-tariff measures (Table III.5).
77. With respect to animal health, Peru has agreed sanitary protocols with some trading partners
to facilitate the export of specific live animals or derived products.  In addition, the authorities noted
that mutual recognition agreements with the Europ ean Union recognize the safety certification for fish
products made by the Ministry of Health.
78. The importation of pharmaceutical and medical products is regulated by Law No. 26842 of
20 July 1997 (the general health law) and Supreme Decree No. 010-97-SA of 24 December 1997 (the
regulation for sanitary registry).
79. Sanitary registry is not required for donated food, drinks and medicaments, but sanitary
requirements are maintained for donated wheat flour and used clothing.
(viii) Government procurement
80. Since Peru's first Review in 1994, new legislation has been adopted consolidating the legal
framework for, and enhancing the transparency of government procurement procedures.  However,
the recent introduction of several provisions cause  those procedures to depart from the principle of
national treatment by according preferences to national suppliers.  Peru is not a member of the WTO
plurilateral Agreement on Government Procurement.
81. There are no detailed statistics on government procurement although the creation of the
CONSUCODE (superior council for government proc urement) should contribute to the building up of
a database as public entities are now required to communicate to the Council detailed information on
bids and awards procedures.  According to public  finance figures, total government purchases of
goods and services amounted to some US$4.6 billion in 1997, representing 7% of GDP (of which
US$1.6 billion was spend by the Central Government, US$2 billion by non-financial public firms, andUS$1 billion by other public entities).  Government purchases have remained relatively constant over
the decade (they amounted to some 7.8% of GDP in 1991), despite the comprehensive privatization
programme implemented over the period.
82. The general legal framework regulating government procurement of goods and
services encompasses Article 76 of the Constitution;  Law No. 27209 of 3 December 1999 (the state
budget management law);  Law No. 27212 of 3 Decembe r 1999 (the public sector budget law);  Law
No. 26850 of 9 July 1997 (the state procurement law) and its subsequent regulations andWT/TPR/S/69 Trade Policy Review
Page 42
modifications;  Supreme Decree No. 047-98-PCM of 28 September 1998 (the regulation of the
superior council for government procurement);  and Ministerial Resolution No. 043-99-PCM of
1 May 1999 (the regulation of the national registry of contractors and the registry of disqualified
contractors) and its subsequent modifications.
83. Article 76 of the Constitution stipulates that the construction and acquisition of supplies from
public funds or resources and the acquisition or alienation of property must be carried out by contractand public tender.  Contracts for services and projects whose importance and amount are specified in
the Budget Law are made by public tender.  In general, purchases by public entities of the Central
Government are decentralized, with each such entity establishing a annual plan for purchases and
contractual agreements (Law No. 26850, Article 7).
84. Suppliers of public works must be registered in the national registry of contractors and must
not appear in the registry of disqualified contractors.  The latter condition is also required for suppliers
of goods and services.  The two registries  are administrated by the CONSUCODE, whose
responsibilities include the resolution of disputes occurring during the selection process, from the
public tender to the awarding decision.
85. Government procurement of goods and services are made through public tender or, within the
limits set in the annual budget law, through direct acquisition.
26  The public tender requirement can be
side-stepped under specific circumstances, such as when procurement occurs in emergency situations,
between public entities, or under military secrecy.27
86. Bids should be published at least 20 days before their deadline in the Peruvian Official
Journal, and in a national and a local newspaper.  Bid specifications, including technical and
commercial requirements should be clearly established and approved by the contracting entity.  The
award selection relies on technical and economic valuation.  To promote domestic industry, a 10%
preference on the total valuation is given to domestic goods (Law No. 27143 of 28 May 1999 on the
temporary promotion of national production).
87. Other norms regulating specific public purchases and contractual agreements provide
preferential treatment to national production. Law No. 27051 of 28 December 1998 (on government
procurement for the reconstruction of areas affected by natural disasters) stipulates that, under similarconditions, public entities should favour goods and services provided by small and medium-size
enterprises.  Law No. 27060 of 6 February 1999, regula ting the purchases of food products within the
PRONAA (national food assistance programme), aut horizes direct purchases of national food
products from small-scale local producers.
(3) M
EASURES DIRECTLY AFFECTING EXPORTS
(i) Procedures
88. Export documentation requirements comprise a commercial invoice, a bill of lading, a
shipment bill, and an export declaration.  Other documents such as quality, origin or sanitary
certificates are not required for customs clearance but may be included with other export
documentation when required by importers.  The Ministry of Health is in charge of issuing sanitarycertificates while the Ministry of Agriculture issues phytosanitary and zoo-sanitary certificates.
                                                     
26 Articles 14 to 17 of Law No. 26850.
27 Article 19 of Law No. 26850.Peru WT/TPR/S/69
Page 43
(ii) Export taxes
89. Peru does not apply export taxes.  For statistical purposes only, a notional 0% tax is applied
on exports.
(iii) Export restrictions
(a) Export prohibitions and restrictions
90. As mentioned in the Secretariat Report fo r Peru's previous Review, Supreme Decree
No. 070-93-EF of 30 April 1993 records prohibited export products and defines the specific
conditions under which the prohibition may be derogated.  The list of prohibited products can be
divided into three groups.  The first includes protected flora and fauna specimens;  the Ministry of
Agriculture may exceptionally authorize their export for scientific or cultural purposes or when the
product originates in controlled or breeding zones.  The second group covers rough wood, whether ornot stripped of bark or sapwood, and swan wood;  the prohibition does not apply for wood originated
in growing areas certified by the Ministry of Agriculture.  In the third group, Supreme Decree
No. 070-93-EF prohibits the export of historical and cultural archeological objects, although for
official exhibitions exceptional temporary exit might be authorized through supreme resolutions.
91. In addition, several products are subject to production and commercialization restrictions
contained in specific regulations:  the ownership and commercialization of vicuñas and
guanacos (camelidiae species) are regulated by Law No. 26496 of 11 July 1995;  the extraction of
some Peruvian shells (Concholepas chanque, abalón and tolina) has been prohibited by
Ministerial Resolution Nos. 031-96-PE of 19 January 1996 and 205-97-PE of 7 May 1997;  dolphins
and other marine mammals are protected by La w No. 26585 of 9 April 1996, and minor cetaceans
are protected by Supreme Decree No. 002-96-PE of 15 June 1996;  the exportation of alpacas and
llamas that have won prizes in official events  is prohibited by Supreme Decree No. 008-96-AG of
8 June 1996;  and wood extraction is regulated by Supreme Decree Nos. 013-96-AG of
23 August 1996 and 001-97-AG of 15 February 1997, and Ministerial Resolution No. 373-97-AG of
17 September 1997.
92. Unprocessed Cat's Claw ( Uncaria tomentosa  and Uncaria guianensis ), a tropical vine of the
madder (Rubiaceae) family, may not be exported unless it comes from specified zones (SupremeDecree No. 009-99-AG of 29 March 1999).  The E xporters Association (ADEX) considered this
restriction to be a non-tariff trade barrier and denounced it to INDECOPI, which stated that the claim
had foundation and sent the case to the Presidency of the Council of Ministers (section (2)(vii)).
93. The exportation of a limited number of controlled products and substances, such as explosives
and arms, chemicals products, and inputs for cocaine production, requires an authorization from therelevant ministry (the Ministry of the Interior and MITINCI, respectively).
94. In the context of the Administrative Bilateral Agreement on Textiles between Peru and the
United States, for statistical purposes exports of textiles require a visa.  The entities authorized to
issue these certificates are the National Industry Society (SNI), the Exporters Association (ADEX),
and the External Trade Society (COMEX).
(b) Export quotas
95. The only voluntary export restraint agreement in force in Peru was signed in 1984 by two
Peruvian firms with the United States to suspend their exports of cotton towels.WT/TPR/S/69 Trade Policy Review
Page 44
96. Supreme Decree No. 008-96-AG of 8 June 1996 gave  authority to the Ministry of Agriculture
to determine annually, through a ministerial resolution, the number of South American camelidiae to
be exported each year.  These quotas are allocated through public auction (Ministerial Resolution
No. 0424-97-AG of 3 November 1997).
97. In 1999, exports of guano were limited to 20% of the volume of extraction established in the
Ministerial Resolution No. 0147-99-AG of 18 February 1999 (annual extraction plan).
98. Under the WTO Agreement on Textiles and Clothing, the European Union (EU)
applies quotas to Peruvian exports of cotton yarns and fabrics.  The restrictions apply to product
categories 1 and 2 of Group IA.28  The Peruvian authorities indicated that current quotas
(15,490 tonnes of category 1 and 9,860 tonnes of category 2) were not completely filled.  In addition,
other quotas imposed on category 1 products are reserved for imports into the EU for furtherprocessing by the EU industry.  Exports of cottage industry fabrics, woven on hand- or foot-operated
looms, garments or other articles obtained manually from such fabrics, and traditional folklore
handicraft products are not subject to quantitative limits provided they are accompanied by a
certificate issued by MITINCI, the competent Peruvian authority.  Under this bilateral administrative
arrangement, the Peruvian authorities also undertook to supply the EU with precise statisticalinformation on export licences issued for all categories subject to quantitative limits as well as on
certificates issued for the handmade products mentioned above.
(iv) Duty and tax concessions directly linked to exports or export performance
(a) Drawback
99. A new drawback regime was introduced by Supreme Decree No. 104-95-EF of 23 June 1995,
effective from November 1995.  Peru deems this regime not to be a subsidy but has notified it to the
WTO Committee on Subsidies and Countervailing Measures for reasons of transparency.  Thisnotification generated several questions and replies within the Committee, several focused on the
refund of 5% of the f.o.b. value of the good exported regardless of the actual amount of duties paid on
imported inputs.
29  The Peruvian authorities justified this procedure for reasons of fiscal and
administrative simplicity, noting that the beneficiaries of the system are small-scale exporting
enterprises.
100. Since 1995, several additional regulations have been enacted defining in particular the list of
goods excluded from the drawback mechanism.  Curr ently, products eligible under the mechanism are
exports that incorporate imported inputs and fall w ithin a tariff heading for which the total value of
exports in the previous year did not exceed US$20 million.  Several additional economic and
administrative requirements apply, including local-content requirements:  the drawback is grantedonly to exports for which the c.i.f. value of the imported inputs does not exceed 50% of the f.o.b.
export value.  The mechanism is also limited to exports that incorporate no inputs imported under a
concessional or preferential regime;  and the annual amount paid to individual exporters must not
exceed US$0.8 million (as the mechanism does not apply to exports exceeding US$16 million during
the previous 12 months).
101. In 1998, drawback refunds totalled only US$54,8 million, which represented less than 1% of
the total value of exports.
                                                     
28 For a detailed description of products and level of initial quotas see WTO document G/TMB/N/60,
19 April 1995.
29 Peru's notification is contained in WTO document G/SCM/N/3/PER, 10 July 1996;  subsequent
questions and replies are reproduced in documents G/SCM/Q2/PER/1 to 7, September 1996 to January 1997.Peru WT/TPR/S/69
Page 45
(b) Other measures
102. As mentioned in Chapter II(3), concessions granted for foreign investment in the context of
the Stability Agreement may be conditional on export performance.
(v) Export finance, insurance and guarantees
103. The Peruvian authorities indicated that no state programmes are in force for export finance,
insurance, or guarantees.  These services are currently supplied by the private sector at prevailing
market conditions.  The authorities noted that the export credit activities of SECREX, referred to inthe Secretariat Report for Peru's previous Review, have been made at private market conditions
since 1994.
(vi) Export promotion and marketing assistance
104. Export promotion activities are shared between public and private institutions.  Since 1996,
government activities for export promotion have been centralized within the PROMPEX (commission
for export promotion), whose Board includes relevant Ministers (Economy and Finance, External
Relations, and MITINCI) and two private sector representatives.  PROMPEX activities, financed
in 1999 from a US$4 million budget, are oriented towards the development of Peruvian exports, incollaboration with the private sector, for instance through research programmes, and towards the
expansion of export markets through participation in international shows and commercial events.  In
parallel, another governmental agency, PROMPERU, is charged with promoting Peru's image abroad
including as a tourism and investment destination and an exporter.
105. The main private-sector agencies involved in export promotion activities are:  the Exporters
Association (ADEX);  the Lima Chamber of Commerce (CCL);  the National Confederation of
Private Enterprises (CONF IEP);  the External Trade Society (COMEX);  and the National Industry
Society (SNI).  These institutions coordinate their activities with different government agencies;  they
also present proposals and represent their members' interest before the MITINCI, in the context of
international negotiations.
(vii) Measures implemented in foreign markets
106. As discussed in Chapter II(4), Peruvian exports benefit from preferential treatment granted in
the context of regional trade agreements (wit hin the Andean Community and the LAIA) and
non-reciprocal concessions offered in various preferential schemes, such as the U.S. Andean Trade
Preference Act or the special GSP scheme granted to Andean countries by the European Union.
107. With respect to measures that may adversely affect Peru's exports, in the context of this
Review the Peruvian authorities raised concerns about sanitary and phytosanitary measures
implemented in foreign markets.  In particular they considered that restrictions introduced on cannedor processed fish products to guard against cholera were unfounded.  The authorities also indicated
that access to important foreign markets was limited by restrictive import regimes applied to products
such as bananas and sugar.
108. The countervailing duties applied by the United States on Peruvian exports of cotton shop
towels and fresh cut flowers were removed on 1 January 2000.  An anti-dumping investigation,initiated by Venezuela, concerning iron or steel balls for mills resulted in no final measure since the
dumping margin proved to be below de minimis  levels.WT/TPR/S/69 Trade Policy Review
Page 46
(4) OTHER MEASURES AFFECTING TRADE
(i) Competition policy
109. The regulatory reform process undertaken in the early 1990s has resulted in a comprehensive
competition policy framework.  Its principal component is the INDECOPI (national institute for the
defence of competition and the protection of intellectual property).  This is complemented by a
number of sectoral regulatory entities, established or reformed since the last Review of Peru, toguarantee the efficient allocation of resources in sectors with natural monopoly characteristics or
requiring highly specialized regulation.  Several such agencies were created in connection with the
privatization of public utilities, including OSIPTEL to regulate and supervise telecommunication
services;  OSINERG to regulate the energy sector, in particular environment-related regulations;  CTE
to regulate electricity tariffs;  and SUNASS to regulate water services.  In the area of publicinfrastructure, COPRI is in charge of the system  of concessions of public services, and OSITRAN
regulates public transportation.  Other important sectoral regulatory bodies include CONASEV, in
charge of supervising capital markets;  the Superintendency of Bank and Insurance (SBS);  and
CONAM, in charge of environmental protection (Chapter IV).
110. INDECOPI was created by Decree Law No. 25868 of 24 November 1992, which has since
been modified by several regulations.  In particular, Supreme Decree No. 807 of 16 April 1996
modified INDECOPI's organization in an attempt to increase its efficiency, better define the
responsibilities of its staff, and simplify procedures to facilitate user access and increase the
predictability of its decisions.  INDECOPI is divided in two sections, the economic policy unit and the
jurisdictional area, both supported by a single administrative structure under the oversight of a board
of directors.  The jurisdictional area is divided in two:  the market competition chamber (composed of
seven commissions including the Free Compet ition Commission and the Dumping and Subsidies
Commission);  and the Intellectual Property Cham ber (composed of three offices).  The commissions
and offices are INDECOPI's first instance administ rative judicial bodies, while INDECOPI's tribunal
resolves cases in the second instance.  Tribunal decisions may be appealed directly in Peru's Supreme
Court.
111. INDECOPI consolidates, within a single institution, areas that in many countries are spread
among different independent agencies.  Its mandate covers market access;  market exit (bankruptcies
and corporate financial restructuring);  domestic competition (antitrust, consumer protection,
advertising, and unfair competition);  trade remedies (dumping, subsidies, and safeguards);  standards
(including barriers to trade);  and intellectual property rights.  On market access, INDECOPI's Market
Access Commission is charged with ensuring that illegal or groundless measures adopted by stateinstitutions (including regional and municipal) do  not restrict free entry to markets.  INDECOPI
provides four categories of technical services to businesses, consumers, and government authorities:
resolution of intellectual property and market competition disputes;  registration of trade marks,
patents and copyrights;  market information and training;  and standardization and quality control.
112. Peru's competition law is based on three decrees enacted in November 1991:  Legislative
Decree No. 691 of 6 November 1991, establishing consumer-defence rules on advertising; Legislative
Decree No. 716 of 9 November 1991, defining consumers' rights and suppliers' obligations;  and
Legislative Decree No. 701 of 7 November 1991 (the anti-trust law).  All these decrees have been
amended by subsequent regulations, in particular by Legislative Decree No. 807 mentioned above.
113. The anti-trust law is designed to eliminate controls and restrictions on free competition in the
production and marketing of goods and the provision of services, thus enabling private enterprise to
develop to the benefit of consumers.  Its scope extends to all public or private-law natural or legalPeru WT/TPR/S/69
Page 47
persons engaged in economic activities, including persons representing and managing firms engaged
in prohibited acts.  Although public services that have been privatized or granted in concessions are
regulated under specific legislation and regulatory bodies, INDECOPI remains in charge of
investigating  restrictive competition practices in all sectors;  the only exception is the
telecommunication sector, which falls under the jurisdiction of the OSIPTEL (supervisory body for
private investment in telecommunications) (Chapter IV(6)(iii)).
114. The anti-trust law prohibits all practices that limit or distort free competition or involve abuse
of market dominance harmful to the general economic interest within the national territory.  The
different forms of abuse of dominant position and of practices restricting free competition are
expressly defined in the Law.30  The anti-trust law regulates anti-competitive behaviour rather than
market structure, typifying specific practices as abuse of dominant position or as restrictive.  Thus,economic concentration is not regulated in Peru, apart from the merger review process in the electric
power sector (Law No. 26876 of 19 November 1997).  Two main consideration underlie this
approach.  The first relates to the concept of contestable markets, which stresses the importance of
entry and exit barriers as a decisive element in the determination of market structure.  The second
relates to efficiency gains:  Peru considers that for a small economy the control of mergers may inhibitthe benefits of scale economies.
31
115. The most significant case of anti-competitive practices investigated in recent years by
INDECOPI's Free Competition Commission, relative to the fines imposed, concerned poultry
producers.  In September 1996, the Commission started an investigation on possible price-fixing,
trade restraint, and other mechanisms to suppress co mpetitors in the live-chicken market in Lima and
Callao.  In an initial ruling, 21 firms were found to have restricted competition through price and
volume fixing and were sanctioned with a total fine of some US$5 million.  INDECOPI's tribunalconfirmed partially the first ruling but excluded five firms from the decision and reduced the fines to
around US$1.7 million.
32
(ii) State trading, state-owned enterprises and privatization
116. Peru has no state-trading enterprises within the meaning of GATT Article XVII.  In
this respect, the authorities noted that all types of sole rights or other monopolistic restrictions orpractices in the production and marketing of goods and services, including on the part of public
entities, have been eliminated and prohibited.
33  Special import rights for the state enterprise
Fertilizantes Sintéticos S.A. (FERTISA), for ammonium nitrate and its components, were suppressed
in November 1996 through legislative Decree No. 846 of 21 September 1996.  With effect from
1 October 1996, the marketing of these inputs has been subject to regulations on explosives forcivilian use.
 34
117. State involvement in the production and supply of goods and services has declined
significantly since 1991 in most economic sector s.  Between 1991 and 1998, some 200 transactions
resulted in a radical transformation of many productive activities, and generated close to
US$8.7 billion in total privatization revenue and some US$7 billion in investment commitments.  The
                                                     
30 Defined in Articles 3 to 6 of Legislative Decree No. 701.  Further information can also be found in
Peru's communications to the Working Group on the Interaction between Trade and Competition Policy (WTOdocuments WT/WGTCP/W/36 of 7 November 1997 and WT/WGTCP/W59 of 5 February 1998).
31 Further details on Peru's experience with its legislation on merger control and competition policy can
be found in WTO document WT/WGTCP/W59 of 5 February 1998.
32 Salient INDECOPI's jurisprudence is available online at:  http://www.indecopi.gob.pe.
33 Legislative Decree No. 668 of 14 September 1991.
34 WTO document G/STR/N/3/PER of 28 July 1997.WT/TPR/S/69 Trade Policy Review
Page 48
bulk of the privatization revenue was obtained between 1994 and 1996 (close to US$7.6 billion);  this
reflected the sale of the State's participation in the telecommunication and electricity sectors,
representing 60% of total proceeds from privatization and the granting of concessions.
118. Divestments have included firms in primary activities (agriculture, fishing, and mining),
manufacturing (including food and beverages, textiles, paper, and cement), energy (electricity and
hydrocarbons), and services (including banking, airlines, telephones, and distribution).  Theprivatization programme has also included the sale of real estate owned by state enterprises.  The
programme's reach has varied across sectors:  according to data from the Privatization Commission
(COPRI), at the end of 1999 privatization had reached 100% in the financial sector;  100% in
telecommunications;  85% in industry;  90% in mining;  65% in electricity and hydrocarbons;  25% in
agriculture;  and 70% in other sectors.
119. The PROMCEPRI (commission for the promotion of private concessions) was created by
Legislative Decree No. 839 (of 20 August 1996)  to promote private investment in public
infrastructure and other public services.  PROMCEPRI's functions and attributes were assigned to
COPRI in 1998.  At end 1999, six projects had been granted in concession under this scheme:  a
power transmission line;  the Southern power grid;  the Machu Picchu car cable;  the cellulartelephone "B" band;  the maritime port of Matarani;  and the Center, South and Orient
South Railways.  Future privatizations and concessions are likely to involve projects in hydrocarbons
(Camisea gas);  transport (roads, ports, and  airp orts);  mining (Centromin-Minero Peru);  and
agriculture (farm and non-farm lands;  cane sugar companies).
(iii) Free zones and other special fiscal zones
120. Peru's free zones and other special fiscal zones are largely intended as regional development
instruments:  they are generally located in remote and economically depressed areas.  In their initialform, many of those zones fell short of their developmental goals;  this was true of zones established
under Legislative Decree No. 704 of November 1991 (free, special trade treatment and special
development zones).  Of the six industrial and the two trade zones originally created under Decree
No. 704, only two (the free zone in Ilo and the trade zone in Tacna) were active in 1996.  The specific
regimes for tourist free-zones and special development zones did not lead to any projects.
35  A s  a
result, Legislative Decree No. 704 was partly derogated in August 1996 and complemented by
Legislative Decree Nos. 842 and 864 of August and October 1996, which established new zones
(centres for export, transformation, industry, comm ercialization, and services – CETICOS) using the
physical infrastructure already in place in the  free zones of Ilo, Matarani and Paita and the special
trade treatment zone of Tacna.36  Subsequently, Law No. 26953 of 21 May 1998 created an additional
CETICOS in the Loreto Department but in early 2000 its precise location and the required regulations
were yet to be defined.37
121. In parallel with the new CETICOS created in  Tacna, the special trade treatment zone
established by Supreme Decree No 704 is still in operation.  The zone is devoted exclusively to
commercial activities.  Various goods, defined through Supreme Decrees, may be imported into thezone subject to a uniform 8% import duty;  those same goods may be sold in the zone free of sales
taxes (IGV and ISC - section 2(iv) above).  However, enterprises established in the zone must pay all
other taxes applied in the Peruvian territory.
                                                     
35 These free-zone regimes are described in GATT (1994).
36 Supreme Decree No. 112-97-EF of 29 August 1997 consolidated the various laws regulating the
CETICOS.
37 Conditions set for the creation of the CETICOS in Loreto are slightly different from those
established for other CETICOS, in particular conditio ns to obtain fiscal incentives are less restrictive.Peru WT/TPR/S/69
Page 49
122. The CETICOS established under Legislative Decree Nos. 842 and 864 are considered as
primary customs zones.  They are intended to foster the economic development of the depressed
regions where they are located, through the creation of port and production infrastructures, as well as
through the promotion of private concessions of public works and services.  In particular, CETICOS
are intended to generate employment through the promotion of maquila and assembling operations;
port services;  and vehicle reconditioning and repair.
123. The principal fiscal incentive granted by this new regime to promote maquila activities
involves exempting firms established in CETICOS by end 2004 from all national, regional or local
taxes until 2012.  This incentive is conditional on export performance:  at least 92% of a beneficiary
firm's annual sales must correspond to export activities.  The Peruvian authorities indicated that as at
October 1999 this scheme had generated only limited results as only one productive enterprise hadbeen established (in Paita).
124. Incentives to promote port services take the form of exemptions from import duties and
domestic taxes granted to merchandise entering CETICOS through the ports of Ilo, Matarani or Paita.
Merchandise imported under the transit regime from any other entry point may also benefit from this
exemption provided it is re-exported or exported after transformation in the CETICOS through one of
the above-mentioned ports.
125. The authorities indicated that CETICOS produced  encouraging results in boosting activities
related to the reconditioning and repair of vehicles, particularly in terms of employment.  In 1999,
1,683 persons were employed in these activities, of which some 70% were located in Tacna and some
20% in Matarani.  A total of 40,823 vehicles were imported into the CETICOS in 1999, mostly in
Tacna (83%) and Matarani (12%).  These results are mainly explained by the strong incentives
established through Legislative Decree N o. 843 and Supreme Decree No. 087-96-EF of
29 August 1996.  Legislative Decree No. 843 permitted the importation of used vehicles, after a
temporary suspension by Urgent Decree No. 05-96 of 23 January 1996, but only under certain
conditions, in particular that they were designed and built as left-hand-drive vehicles and were never
written-off in an accident.  However, the last tw o criteria do not apply to used vehicles imported
through the ports of Ilo or Matarani into a CETICOS for reconditioning or repair.  As mentioned insection (2)(iv) above, Supreme Decree No. 087-96-EF introduced differentiated fiscal treatment for
used vehicles imported through CETICOS:  they are subject to a 0% excise tax rate, while other used
vehicles are subject to a 55% rate.
(iv) Incentives
(a) Special credit facilities
126. State activities in the financial system are generally limited to supervision (Chapter IV(6)(ii));
most publicly owned financial firms have been privatized.  A notable exception is the COFIDE
(corporation for development finance), in which th e State owns 97.25% of the shares (the Andean
Development Corporation, CAF, holds the rest).  COFIDE acts as a second-tier bank, granting loans
at interest rates equivalent to those obtainable on international capital markets.  In 1997, approvedcredits amounted to US$1,188 million, directed main ly to manufactures (33%), retail trade (20%),
agriculture (8.5%), and  fishing (7.5%).  In 1998, responding to financial problems faced by Banco
Latino, COFIDE intervened by injecting liquidity into the Bank and re-capitalizing its debt.  The
intervention, deemed to be temporary, gave COFIDE control of 86% of Banco Latino's shares.
127. State enterprises may receive support from the Bank of the Nation, but exclusively in
connection with their privatization;  under the third transitional provision of the Bank's statutes, allWT/TPR/S/69 Trade Policy Review
Page 50
other support previously provided by the Bank to those enterprises appears to have been phased out.38
Although the Bank of the Nation's Charter allows the Bank to give support to state enterprises
in connection with their privatization, the Peruvian authorities indicated that this facility has
not been used in the last two years.  The Bank of the Nation's main purpose is to administer treasury
sub-accounts and provide banking services to the Central Government in connection with the
administration of public funds.  It is established under public law and attached to the Ministry ofEconomy and Finance but enjoys financial and administrative autonomy.
128. The Regional Fundeagros, established by regional governments to grant loans to small and
medium-sized farm units, were wound up on 31 December 1995.  Their resources were transferred
to COFIDE where a special fund, supervised by the Ministry of Agriculture, was created to support
the agricultural sector ( Fondo Revolvente Único de Apoyo al Sector Agrario ).  In 1997, the scope
of activities eligible for support from the special fund was extended to cover all agricultural
activities, including related services, marketing, and transformation processes (Ministerial Resolution
No. 0412-97-AG of 17 October 1997).
129. The Government runs various credit programmes in addition to COFIDE's activities.  The
FONDEPES (national fisheries development fund) offers programmes that facilitate access to creditto small non-industrial fishing enterprises and enable them to purchase or repair fishing vessels or
vehicles for transporting seafood products, or engage in fish farming.  FONDEPES loans are granted
in U.S. dollars and require complete repayment of the capital;  interest is at variable rates not lower
than those obtainable on the international capital markets.  As at end 1998, 1,879 credits had been
granted under this programme for a total amount of some US$20 million, these credits were directed
mainly into the construction of vessels and towards the acquisition of fishing equipment.
130. The agriculture sector benefits from the rotating fund programme, which was established by
Decree Law No. 25816 of 28 October 1992 and impl emented at the end of 1994 by Ministerial
Resolution No. 780-94-AG of 6 December 1994.  The programme offers credit in-kind and is
financed from funds contributed by the Treasury.  It targets the poorest, organized peasant-farmers in
economically depressed areas or where emergencies have been declared;  it is considered that the
targeted groups would find it difficult to access commercial credit because of their poverty, or theuncertain climate and lack of security in their areas.   The loans should be repaid in full, either in cash
or in kind equivalent to the real value of the loan on the date of repayment, plus interest computed at a
real annual rate of 3 to 10% ;  terms vary with the type of goods involved.
(b) Fiscal incentives
131. Fiscal incentives constitute an important instrument of Peru's regional, sectoral, and social
policies.  Established through a multitude of laws and regulations, numerous partial or complete
exonerations apply to specific activities in virtually all sectors.  The resulting number of fiscal
incentives raises questions on the complexity and effectiveness of the incentive structure offered to
economic operators.  Moreover, although no estimates are available, the fiscal revenue forgone could
be significant and might undermine the Government's ability to attend to other priorities, particularlyin the face of strict fiscal constraints (Chapter I).
132. Most exonerations affecting the general sales tax (IGV) and the excise tax (ISC) were
consolidated in Supreme Decree No. 055-99-EF of 15 April 1999.  Under this Decree, in addition to
the exonerations affecting imports (section (2)(iv)) and those applied in CETICOS (section (3)(iii)),
certain activities are exempted from the IGV or the ISC.  Activities exempt from the IGV are
industrial enterprises located on the Peruvian border;  financial institutions in the process of winding
                                                     
38 WTO document G/SCM/Q2/PER/6 of 7 January 1997.Peru WT/TPR/S/69
Page 51
up;  as well as lodging and food services rendered by firms established in Peru by foreign-based
tourist operators.  The importation or sale of residual fuel or diesel to power generating and
distributing firms are exempt from the ISC.
133. The Law for Investment Promotion in the Amazon (Law No. 27037 of 30 December 1998)
established benefits for activities in Departments of the Amazon region.  Benefits are defined for
specific regions and/or types of activities.  They include, subject to different conditions, partial orcomplete exonerations from income, sales and excise taxes as well as from other levies such as the
extraordinary tax on net assets or municipal taxes.
134. Income tax benefits include:
− Tax exoneration for farmers whose annual sales are less than 50 UIT.  This exoneration, in
force since January 1996, was established by Law No. 26564 of 29 December 1995 and
prolonged until 31 December 2000 by successive regulations (Law No. 26564, LegislativeDecree No. 885, Law No. 26881, and Law No. 27217).
− Reduction of the tax rate from 30% to 15% for farmers in crop or breeding activities.  This
exoneration, in force since January 1997, does not apply to poultry, agroindustry, and forestry
activities.  It was established by Legislative Decree No. 885 of 8 November 1996 and
prolonged until 2006 by Law No. 26865 of 15 October 1997.
− A deduction from total taxable income of up to 20% of invested capital in crop or breeding
activities, in force from 1997 to 2000 (Legislative Decree No. 885 of 8 November 1996).
− Exoneration until 2000 for industrial enterprises located in the border zone  (Law No. 23407
of 29 May 1982 and Legislative Decree No. 618 of 29 November 1990).
− Reduction of taxable income for mining activities, in particular for reinvested capital,
investment in public services infrastructure or for compliance with specific workers' benefits
(Supreme Decree No. 014-92-EM of 4 June 1992).
− Fiscal credit equivalent to 30% of the income re-invested in educational activities (Legislative
Decree No. 882 of 9 November 1996.
− Reduction of the tax rate from 30% to 10%, 5% or 0% for enterprises located in various
Departments of the Amazon region and involved in agricultural, forestry or related industrial
activities, as well as in tourism (Law No. 27037 of 30 December 1998).
135. Other incentives include a fiscal credit equivalent to 3% of the value of production of firms
producing machines and capital goods (Law No. 26782, in force since 1 June 1997).  A simplified tax
regime is available to small and micro-enterprises, which in lieu of most fiscal charges pay a uniquecontribution of 1% of their monthly turnover (L egislative Decree No. 705 of 8 November 1991).  A
substantial reduction in the general sales tax applied to domestic rice sales (5% instead of 20% )
benefits rice producers.
(v) Adjustment assistance
136. Rules for financial restructuring, liquidation or bankruptcy, and mechanisms allowing the
global rescheduling of obligations are provided in Supreme Decree No. 014-99-ITINCI;  this law
covers all activities except those under the supervision of the Superintendency of Banking andInsurance or Pension Fund Administrators.  In addition, exceptional transitional measures to facilitate
financial restructuring programmes through mechanisms such as capitalization or debt forgiveness
were introduced through Urgent Decree No. 064-99-ITINCI of 1 December 1999.  Applications to
participate in these programmes will close on 31 December 2000.WT/TPR/S/69 Trade Policy Review
Page 52
137. A specific restructuring programme (PERTA-AGRARIA), in favor of agricultural enterprises,
was set up through Legislative Decree No. 877 of 26 August 1997 regulated by Supreme Decree
No. 107-98-EF of 28 November 1998.  This programme covers natural or legal persons involved in all
agricultural activities with the exception of poultry farming, agroindustry and forestry activities.  The
programme established conditions to reschedule fiscal and financial debts over a maximum period of
eight years.  Debtors who paid their debts before 30 April 1999, in cash or kind (with seeds orbreeding animals), were forgiven 60% of their regularized obligations.
138. PERTA-AGRARIA covers fiscal and financial debts contracted up to 31 March 1998.  Fiscal
debts include all taxes administered and collected by the Customs and the fiscal administration
(SUNAT);  municipal taxes;  and social security contributions.  Financial debts include specific
credits granted by central or regional government agencies, in particular for seed production and forthe acquisition of investment goods;  credits granted through former Fundeagros;  credits granted by
COFIDE, the Bank of the Nation or the former Rural Bank of Peru;  and credits granted by the
National Development Institute (I NADE) fo r specific projects.  In addition, special provision to
capitalize debts contracted by sugar producers before 31 December 1995 were introduced by Supreme
Decree No. 107-98-EFP.
139. In the fishing sector, a specific adjustment programme to cut overcapacity in the fishing fleet
was to be approved in mid 2000 (Chapter IV(3)).
(vi) Trade-related investment measure and local-content requirements
140. To promote and develop dairy farming in Peru, imported milk powders, anhydrous fat and
other milk products may not be used in the reconstitution and re-mixing processes for the production
of liquid milk products, cheeses, butter, and similar products for direct human consumption.  This
restriction, notified to the Committee on Trade-Related Investment Measures in 1995, also require
producers of evaporated milk to use nationally produced fresh milk as an input.
39
141. These measures were still in force in early 2000 and no provisions appear to have been made
for phasing-down or eliminating them.  However, the authorities indicated that the measures have not
been implemented in practice nor have attempts been made to enforce them.  Indeed, despite thesemeasures, it appears that, in 1995, evaporated milk producers used a mix of 40% Peruvian fresh milk
and 60% imported milk powders in local production;  although no recent estimates are available the
authorities indicated that these figures might still apply.
142. The Budget for year 2000 (Law No. 27212 of 3 December 1999) provided that only Peruvian
products may be acquired for government nutrition programmes involving the distribution of food;the only exception concerns enriched dairy products, which must contain at least 75% national
content.  This provision affects explicitly three important nutrition programmes:  the "glass of milk"
scheme;  the FONCODES (national compensation and social development fund);  and the National
Food Assistance Programme (PRONAA).  In rela tion to these programmes, the budget law also
directs government agencies to enter into contracts, under the auspices of the Ministry of Agriculture,only with individual or organized small-scale farmers,  or with small agroindustrial companies for the
future acquisition of goods.  Those nutrition programmes also favour fish products:  the budget law
provides that such products should be acquired as priority, and allows direct purchases through the
Peruvian Fish Technology Institute (ITP).  The Peruvian authorities indicated that national-content
requirements do not apply to non-food items under FONCODES programmes.
                                                     
39 WTO document G/TRIMS/N/1/PER/1 of 18 April 1995.Peru WT/TPR/S/69
Page 53
143. The Peruvian Association of Poultry Farmers and the Maize and Sorghum Producers
Committee signed an agreement in early 2000, under the auspices of the Ministry of Agriculture, forpoultry growers to buy part of domestic maize and sorghum production.
(vii) Regional and other programmes
144. In addition to the incentives described in sections (iii) and (iv) above, Peru's regional
development policy relies on targeted social programmes aimed at reducing extreme poverty;
promoting growth in potentially productive areas;  integrating remote and border areas;  anddeveloping alternatives to coca production.  Public expenditure in these social programmes
represented 1.6% of GDP in 1998 (S/. 3,208 million).
145. As part of the drug enforcement programme, the production, transportation, distribution, use
and transformation of chemicals that may be used for drug production are subject to a special
marketing regime run by MITINCI (Law Decr ee No. 25623 of 22 July 1992 and its successive
amendments).  The National Coca Corporation (ENACO), a state enterprise established under privatelaw, undertakes the marketing at home and abroad of legally produced coca leaf.
(viii) Intellectual property rights
(a) Introduction
146. Peru is a signatory to most international intellectual property right (IPR) conventions,
including the Berne Convention for the Protection of Literary and Artistic Works, the Paris
Convention for the Protection of Industrial Prope rty, the Rome Convention for the Protection of
Performers, Producers of Phonograms and Broadcasting Organizations, and the Universal Copyright
Convention.  It is also a member of the World Intellectual Property Organization (WIPO).  The WTO
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) was
incorporated into the domestic legislation in 1995 as part of Peru's ratification of the Marrakesh
Agreement.
147. Peru protects IPRs through a combination of international, regional and national provisions.
Domestic laws consolidate elements from rules adopted at the regional and international levels and
thus assure their consistency and applicability through unified regulations.  The Industrial Property
Law (Legislative Decree No. 823 of 24 April 1996 ) and the Copyright Law (Legislative Decree
No. 822 of 24 April 1996) are the two main domestic statutes for the protection of IPRs in Peru;  otherrelevant domestic and international legislation in force is listed in Table III.6.
148. The INDECOPI (national institute for the defence of competition and intellectual property
rights) is in charge of promoting, supervising a nd enforcing intellectual property laws in Peru (see
also section 4(i)).  In 1997, Peru notified INDECOPI as the contact point established for the purposes
of Article 69 of the TRIPS Agreement.
40  Through a proactive approach to IPR protection, the
Peruvian Government has sought to foster innovation and the creation of valuable intangible goods
throughout the country.  Peru is also committed to th e promotion, at the international level, of greater
protection for the traditional knowledge of local and indigenous communities.41
                                                     
40 WTO document IP/N/3/Rev.2/Add.2 of 31 January 1997.
41 Within the context of the WTO, Peru, together with Bolivia, Colombia, Ecuador and Nicaragua made
a proposal in this matter (WTO document WT/GC/W/362 of 12 October 1999).  Additional information can befound online at:  http://www.indecopi.gob.pe/noveda/recugene/RecursosGeneticos.html.WT/TPR/S/69 Trade Policy Review
Page 54
Table III.6
IPR-related legislation in force in Peru
Legislation Description
General provisions
Constitution of Peru, Article 2 (on basic individual rights) Enshrines the right to own and benefit from intellectual creations
Penal Code, Articles 216 to 229 Deal with intellectual property rights violations
Civil Code, Article 886 Defines intellectual property rights as transferable property
Law Decree No. 25868, Supreme Decree No. 025-93-ITINCI,
Legislative Decree No. 807Regulate INDECOPI's operation
Legislative Decree No. 662 (Foreign investment promotion law). Grants national treatment to IPRs held by foreigners
TRIPS Agreement Multilateral agreement on intellectual property rights
Industrial property
Paris Convention (1883) Industrial property protection
General Interamerican Convention for Trade Marks and
Commercial Protection (Washington, 1929)Protection of trade marks, trade names, and repression of unfair
competition and false indications of geographical origin
Decision 291 of the Commission of the Cartagena Agreement Regime for the common treatment of foreign capital and trade
marks, patents, licensing agreements and royalties
Decision 344 of the Commission of the Cartagena Agreement Common regime on industrial property
Decision 345 of the Commission of the Cartagena Agreement andSupreme Decree No. 008-96-ITINCIAndean provisions on the protection of the rights of breeders of
new plant varieties
Decision 391 of the Commission of the Cartagena Agreement Common regime on access to genetic resources
Legislative Decree No. 823 Industrial Property Law
Copyrights and Neighbouring Rights
Bern Convention Protection of literary and artistic works
Universal Copyright Convention (Geneva, 1952) Copyrights
Rome Convention (1961) Protection of performers, producers of phonograms and
broadcasting organizations
Convention for the Protection of Producers of PhonogramsAgainst Unauthorized Duplication of their Phonograms (1971)Protection of producers of phonograms
Convention Relating to the Distribution of Programme-carrying
Signals Transmitted by Satellite (Brussels, 1974)Use of satellites for the distribution of programme-carrying
signals
Treaty on the International Registration of Audiovisual Works(Geneva, 1989)Registration of audiovisual works
Decision 351 of the Commission of the Cartagena Agreement and
Supreme Decree No. 03-94-ITINCIAndean provisions on copyright and neighbouring rights
Legislative Decree No. 822 Copyright Law
Law No. 26905 Legal deposit on copyrighted material in the National Library of
Peru
Source: INDECOPI (1997), Compilación Legislativa de Propiedad Intelectual .
149. Since INDECOPI's creation in late 1992, substantial results appear to have been obtained in
the promotion of IPRs.  For instance, there is growing local interest in the registration of IPRs;  over
94,735 property rights (including 86,106 trade marks and 1,396 patents) were registered between1993 and 1999, of which 50,000 were granted to Peruvians.
(b) Industrial property
150. In 1996, the Industrial Property Law was enacted to incorporate into a single domestic
regulation the different elements of Andean Decision 344, the Paris Convention and the TRIPS
Agreement.
42  The Industrial Property Law regulates patents, utility models, industrial design and
secrets, trade marks, trade names, commercial slogans, and appellations of origin.
                                                     
42 Decision 344, the Andean provisions on industrial property, is currently under revision to assure its
consistency with TRIPS provisions.Peru WT/TPR/S/69
Page 55
151. Patent applications must be filed with INDECOPI, and are granted for a period of 20 years
from the filing date;  opposition should be notified within 30 days.  Protection for utility models and
industrial designs is granted for 10 years.  All inventions that have industrial applications can be
patented with certain exceptions, including:  species of plants and animals;  inventions contrary to
public order or health;  inventions based on the human body and its genetic identity;  and inventions
related to pharmaceutical products listed as essential by the World Health Organization.  Noveltyexamination is part of the registration procedure. Peru grants no transitional (pipeline) protection for
pharmaceuticals. Protection for new plant varieties is granted through a  sui generis  system under
Supreme Decree No. 08-96-ITINCI and Andean  Decision 345, to members of the Andean
Community.  Peru is not a member of the International Union for the Protection of New Varieties of
Plants (UPOV).  Layout designs are currently protected by regulations against unfair competition, butspecific provisions were included in the proposed modifications of Andean Decision 344.
152. Licensing agreements for patents and trade marks must be registered with the INDECOPI in
order to be effective against third parties.  This institute may grant mandatory licences under specific
conditions, e.g. if the legal holder of the patent has not exploited it or if such exploitation has been
suspended.  Mandatory licences might also be granted by means of public interest laws or for reasonsof national security or emergency.  Since 1994, there have been no cases of mandatory licensing in
Peru.
153. Peruvian law defines trade marks as any sign used to distinguish in the market the products
and services rendered by a person from those rendered by any other person.  Registration with
INDECOPI gives protection for a ten-year term, which is renewable indefinitely for ten-year terms.
The law grants protection to well-know trade marks.  Unregistered marks are not protected.  Under
Peruvian Industrial Property Law, the State is the only possible holder of any appellation of origin.
154. Trade secrets are protected without any formality requirement.  Employees and managers are
prohibited from revealing trade secrets to third parties.
(c) Copyrights and neighbouring rights
155. The Copyright Law provides protection to the authors of artistic and literary works and to
their beneficiaries or rightholders regardless of their nationality, domicile and place of publication ordissemination.  Protection is granted for the author's  life plus 70 years.  The transfer of copyrights
following death are regulated by the Civil Code.  Collective works, software and audiovisual works
are granted a 70-year protection from their first pub lication.  Peru's Copyright Law protects the moral
rights of authors.  It includes special provisions for audiovisual works, software, data bases,
architectural and plastic art works, and journalistic articles.  Registration with the INDECOPI isvoluntary, and is intended to provide enhanced legal protection for rightholders.  Peruvian legislation
distinguishes between economic rights (protected for 70 years) and moral rights (protected for ever).
(d) Enforcement
156. Peru has made important efforts in recent years to improve the enforcement of intellectual
property rights, not least the creation of INDECOPI in 1992, and considerably gains appear to havebeen made.  For instance, according to the Interna tional Intellectual Property Alliance, between 1995
and 1998 the share of illegal copies in Peruvian markets for motion pictures and computer programs
has been reduced from 95% to 50% and from 84% to 60% respectively.
157. INDECOPI has responsibility for overseeing the enforcement of domestic and international
obligations on IPRs, as well as receiving and resolving disputes, and imposing penalties.  Civil and
penal procedures can also be engaged.  Foreign IPR holders receive equal treatment in dispute cases.WT/TPR/S/69 Trade Policy Review
Page 56
Since 1993, 2,652 cases have been presented of which 2,328 were concluded.  Fines for trade mark
and patent infringements are set as high as 150 UIT, preventive measures can also be requested.43
The Copyright Law allows copyright owners to denounce infractions and to request preventativemeasures such as confiscation or destruction of illicit copies;  it also establishes fines of up to
150 UIT.  In addition, the Law modified several articles of the Penal Code establishing sentences up
to eight years of imprisonment for those involved in copyrights infringements.
158. There are no regulations to allow holders of IPRs to prevent imports of patented products
legally placed in the market abroad, but modifications to Decision 344 of the Commission of the
Cartagena Agreement, which may institute such measures are under consideration.
                                                     
43 As at August 1999, one fiscal unit (UIT) was equivalent to S/. 2,800.