Peru


Author: Frank Boyle, abogado, Estudio Muñiz Professional profile
Contact: E-Mail fboyle@munizlaw.com (LinkedInProfile)

Overview of legal measures as of 31, May 2020 as response to the COVID-19.

Please note, due to the extraordinary circumstances, the legislation is in continuous progress.

Introduction

Republic of Perú

Perú is a republic with a unitary, representative, and decentralized government organized in accordance with the principle of separation of powers.

Perú is located next to Brazil, on the western part of South America facing the Pacific Ocean. Perú covers an extension of 1,285,216 square kilometres with diversity of regions and climates that are extraordinarily rich in natural resources. In fact, Perú is one of the leading world producers of copper, silver, zinc, gold, and lead and additionally, has important reserves of lithium. Other important sectors of the Peruvian economy are fishery and agroindustry, as well.

Since 1990, Perú has maintained wise economic behaviour that brought macroeconomic stability based on prudent fiscal spending, accumulation of international reserves, and external debt reduction. Perú has also been working consistently to become an international player by being active in the research of trade partners through the signing of an important number of free trade agreements. Consequently, Perú achieved major fiscal surpluses and obtained investment grade status.

Since the outbreak of the COVID-19 crisis, Perú was one of the first countries in South America to enact measures to reduce its impact. A state of emergency to fight COVID-19 was originally declared on Monday, the 16th of March, which was followed by compulsory social isolation. To control rising cases of infection, the state of emergency has been extended several times. In accordance with the last extension, the state of emergency should end on June 30.

1. INTERVENTIONS AND RESTRICTIONS

1.1 Legal basis

Provisions of Law Related to COVID-19

• Supreme Decree No. 044-2020-PCM of March 15, 2020:

The Peruvian government ordered national state of emergency and compulsory social isolation for 15 days, starting at 00:00 hours on Monday the 16th of March. The government suspended the exercise of the constitutional rights of personal liberty and security, inviolability of domicile, and freedom of assembly and transit. The government guaranteed access to essential goods and services. Use of public roads was only authorized for activities related to the production, acquisition, or supply of essential goods and services, including medical supplies.

• Supreme Decree No. 046-2020-PCM of March 18, 2020:

A curfew was imposed daily from 20:00 hours until 05:00 hours, with the exception of personnel working on the production or supply of essential goods and services.

During the state of emergency, the use of private vehicles was prohibited, except for those necessary for the provision of essential goods or services.

• Supreme Decree No. 051-2020-PCM of March 27, 2020:

Starting on March 31, the state of emergency was extended for 13 additional days.

• Supreme Decree No. 064-2020-PCM of April 9, 2020:

The state of emergency was further extended until April 26.

• Supreme Decree No. 075-2020-PCM of April 23, 2020:

The state of emergency was further extended until May 10.

• Supreme Decree No. 083-2020-PCM of May 9, 2020:

The state of emergency was further extended until May 24.

• Supreme Decree No. 094-2020-PCM of May 23, 2020:

The state of emergency was extended until June 30.

This decree requires the population to adopt practices to contribute to the improvement of environmental conditions while guaranteeing the vigilance of the health emergency in harmony with the gradual and progressive resumption of economic and social activities.

1.2 Border

Measures implemented to contain the spread of the virus include the temporary closure of international borders, which has been enforced since Monday, March 16th. Any international passenger arriving in Perú is required to isolate him/herself for 15 days. Transport of goods is not affected by the measure.

Exceptions on the closure of international borders have been made for the repatriation of Peruvian citizens or in the case of foreign citizens wishing to return to their own countries. These exceptions are canalized through Peruvian consulates around the world and foreign consulates in Perú.

1.3 Visas

For foreigners in Perú, Immigrations reported the automatic extension of the term of temporary migratory conditions until the end of the state of emergency. The term of resident immigration status has also been extended until the end of the state of emergency.

Furthermore, all foreign citizens with pending immigration procedures or those who have not been able to initiate them during the state of emergency will be considered regular and will therefore not accumulate fines or penalties.

Migratory files that are pending approval will be maintained in this manner until the state of emergency is over and Immigrations resumes activities.

Once the state of emergency ends and the borders are opened, foreigners should not leave the country if its residence permit has expired or is very close to expiring until they have renewed their residentship and have a travel permit for a maximum of 30 calendar days.

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1.4 Export control

Import and export operations of goods are not restricted or limited. Foreign trade operators and public entities involved in these operations should continue to provide services to users in a way that allows the materialization of the logistical flow of entry and exit of all types of goods in the country.

Temporary export authorization for PPE's

By Supreme Decree 13-2020-SA issued on April 8, 2020 and Supreme Decree 15-2020-SA issued on April 16, 2020, the Peruvian government implemented temporary export authorization requirements on face masks, gloves, and personal protective equipment (HS 6307.90.30; 4015.10.90; 4015.11.00; 4015.19.90; 5603.11.00; 5603.12.90; 6210.10.00), as notified by the government to the World Trade Organization.

1.5 Prohibition of crowds

No gatherings are allowed.

In accordance with Supreme Decree 044-2020-PCM issued on March 15, 2020, all public activities are restricted. Public access to any kind of public premises is not permitted, except for retail for the acquisition of basic food and pharmaceutical supplies, providing that a minimum safety space between customers is always respected.

1.6 Lockdown

The Peruvian government have imposed a nightly curfew during the national state of emergency. Currently, mandatory nightly curfew hours in most of the country (including Lima) begin at 21:00 hours and end at 04:00 hours. Curfew hours in the regions of Ica, La Libertad, Lambayeque, Loreto, Piura, Tumbes, Ucayali, and in the coastal provinces of Santa, Canta, and Huarmey in the region of Ancash, are from 18:00 hours to 04:00 hours, from Monday to Saturday. On Sunday, an all-day national curfew is enforced.

1.7 Open Businesses, Industries and allowed Gatherings

Supreme Decree 044-2020-PCM of March 15, 2020

In accordance with Supreme Decree 044-2020-PCM issued on March 15, 2020, only business and industries related to the delivery of essential goods and services are allowed:

• Procurement, production, and supply of food, including storage and distribution for public sale.

• Acquisition, production, and supply of pharmaceutical products and basic necessities.

• Assistance to health centres, services, and establishments, as well as diagnostic centres, in emergencies and urgent care.

• Labour, professional, or business providers to guarantee the essential goods and services listed in the Article 2 of Supreme Decree 044-2020-PCM.

• Assistance and care for older adults, children, adolescents, and dependents, people with disabilities or people in vulnerable situations.

• Financial institutions, insurance, and pensions, as well as complementary and related services to ensure its proper functioning.

• Production, storage, transport, distribution, and sale of fuel.

• Hotels and accommodation centres, only for the purpose of complying with the quarantine provided.

• Media and in the case of call centres, only for the services related to the emergency.

• Public sector workers who exceptionally provide services needed to the attention of actions related to the health emergency produced by the COVID-19 can travel to their workplaces on a restricted basis.


Supreme Decree 080-2020-PCM of May 3, 2020

Through Supreme Decree 080-2020-PCM issued on May 3, the Peruvian government has described the activities that would be allowed to start operating, providing that certain measures are implemented in accordance to protocols to be published by the sectorial authorities and that final permission is granted by the health authority.

These activities are as follows:

1. Mining and Industry

• Exploitation, processing, storage, transportation, and closure of mines in the sphere of large-scale mining and hydrocarbon construction projects of national interest.

• Inputs for agricultural activity.

• Industrial fishing (indirect human consumption).

• Temporary production: expired and expiring purchase orders (exports).

• Glass, forestry (timber or non-timber), paper and cardboard, plastics and ice industries, expansion of textiles and clothing, machinery and equipment.

• Metalworking industry.

• Basic chemical substances and fertilizer and complementary services to agriculture (for essential activities).

2. Construction

• Projects of the National Infrastructure Plan for Competitiveness (PNIC in Spanish).

• Authority for Reconstruction projects with changes (ARCC in Spanish)

• 56 projects of the Transport and Communications Sector.

• 36 sanitation works.

• Agrarian infrastructure activities (irrigation, maintenance, rehabilitation of drains, among others).

• Priority real estate projects (excavation phase, structures and finishes, and housing in rural areas).

• Agricultural products (rental / sale of machinery)

• Investments in access to water and sewerage in police stations, hospitals, and schools.

• Industries and services related to construction.

3. Services and Tourism

• Restaurants and related facilities authorized for delivery.

• Categorized hotels and tourist transportation for essential activities.

• Telecommunications services.

• Complementary services to agriculture.

• Services provided to companies (IT support and professional services, knowledge service exports).

• Notary services.

• Recycling services.

• Maintenance services of equipment related to buildings and homes (pumps, hot springs, elevators, plumbing, electrician, and carpentry, among others).

• Storage services of: fertilizers and agricultural raw materials, plastic articles, glass, paper, cardboard, wood saw, and ice for any kind of activities.

4. Commerce

• Marketing of agricultural products.

• Electronic commerce of goods for final consumers.


1.8 Shareholder's meetings and other meetings of companies

General meetings of shareholders are possible by electronic means in case the bylaws allow it. Should the bylaws do not indicate anything in this regard, in the case of a closed corporation (sociedad anónima cerrada) this option is understood to be permitted. In the case of the other type of companies, the shareholders or partners may, for the purposes of determining the quorum, as well as for the respective voting and adoption of resolutions, exercise the right to vote electronically provided they have a digital signature or by using postal means that will require legalized signatures.

1.9 Supply of essential medical goods

The Peruvian government guarantees the supply of essential medical goods through the authorized essential activities.

1.10 Health care

The Peruvian government guarantees medical care access through the national system of health care.

1.11 Persons with a higher risk

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[Normal text for content]In accordance with R.M. 265-2020-MINSA risk factors to determine persons with a higher risk are the following:

• 65 years and older

• High blood pressure

• Cardiovascular diseases

• Cancer

• Mellitus diabetes

• Obesity with BMI from 40 or greater

• Asthma

• Chronic respiratory disease

• Chronic renal failure

• Immunosuppressive disease or treatment

Workers who fall into any of these categories are not allowed to return to work until the end of the state of emergency.

1.12 Sanctions

Those persons found in violation of the social isolation rules established by Supreme Decree 044-2020-PCM will be taken to the closest police station in order to carry out a control of identity. The offender has the right to communicate with a family member or another person and should not be held for more than four hours; after that, the offender will be set free, as provided for in Article 205 of the Code of Criminal Procedure.

The Ministry of Interior will be the responsible for creating and implementing the list of violators of the compulsory social isolation. Any person who fails to comply with the measures implemented by the state will be registered.

This information will be sent to the Public Prosecutor's Office to initiate a criminal investigation against such offenders for the commission of the crime of disobedience to authority.

The Public Prosecutor's Office may open a preliminary investigation for the following offences:

• Spread of contagious diseases, regulated in Article 289 of the Criminal Code, which penalizes anyone who knowingly spreads a contagious disease. The penalty may be up to 20 years if grave injury or death is caused.

• Breach of sanitary measures, regulated in Article 292 of the Criminal Code, which penalizes anyone who breaches the regulations set forth by law to avoid the spread of an epidemic. The penalty may be from 6 months to 3 years.

• Violence against an authority, regulated in Article 366 of the Criminal Code, which penalizes anyone who employs intimidation or violence against a public authority to impede or hinder the execution of an act in the exercise of their powers. The penalty may reach up to 8 years if the official is part of the national police or a member of the armed forces.

• Disobedience of an authority, regulated in Article 368, which penalizes anyone who disobeys or resists a legal order issued by a public authority in the exercise of their powers. The penalty goes between 3 to 6 years.

• Crime against work health and safety, which is regulated in Article 168A, which penalizes any employer who endangers the life and safety of their employees due to the risk of contracting a disease. The penalty goes from 1 to 4 years.

• Forced labour, which is regulated in Article 168B, which penalizes anyone who forces other to carry out labour against their will. The penalty goes from 6 to 12 years.


2. FINANCIAL SUPPORT OF BUSINESSES

2.1 Legal basis

Legislative Decree 1455 of April 6, 2020

2.2 Measures to support companies

By the Legislative Decree indicated above, the Peruvian government created the program "Reactivate Perú" intended to bring financial support to corporations.

The "Reactivate Perú" program has the scope to ensure continuity in the payment chain in the face of the impact of working capital of companies facing short-term payments and obligations to their workers and suppliers of goods and services.

The financing of the replacement of the working capital for companies will be carried out through a mechanism that will provide a national government guarantee for credits in national currency that are placed by the financial system institutions.

Companies wishing to access the Program must be qualified, at the risk centre of the Banking Authority as "normal" or "with potential problems."

• It will only be applicable to new credits granted until June 30, 2020.

• The term of the credits granted by the financial institutions to the beneficiary companies may not exceed 36 months, including a grace period of interest and principal of up to 12 months.

• Not having tax debts to the Tax Authority exceeding an Impositive Tax Unit (S/ 4 300) as of February 29, 2020.

Resources obtained under the "Reactivate Perú" Program may not be used to pay financial obligations. Nor may such obligations be prepaid before the cancellation of the credits originated in the framework of the Program.

• No dividends or profits may be distributed, except for the percentage corresponding to workers, for the duration of the credit granted.

• Companies linked to financial institutions, or those included in the scope of Law 30737, a law that ensures the immediate payment of civil reparation in favour of the state in cases of corruption and related crimes.


2.3 COVID-19 Credit up to Soles 10 MM

The maximum authorized amount of loans will be the lesser of the following:

• The amount equivalent to three (3) times the company's annual contribution to EsSalud during fiscal year 2019

and

• The amount equivalent to one (1) month of average monthly sales for the year 2019. This criterion will only be used for MYPES.

CREDIT AMOUNTS GUARANTEED PER COMPANY

Up to S/ 90 000: 98%

From S/ 90 001 to S/ 750 000: 95%

From S/ 750 001 to S/ 7 500 000: 90%

From S/ 7 500 001 to S/ 10 000 000: 80%

The total amount of the credits to be guaranteed by the Program, for each debtor company, will be S/ 10, 000, 000.


2.4 Sanctions

Should it be determined that a company does not complies with the requirements set by the program, it would mean an immediate loss of any benefits.

3. FINANCIAL SUPPORT OF WORKERS

Private Pension Fund

Affiliates to the Private Pension System may submit their request for an extraordinary withdrawal on a one-time basis within a maximum term of 60 calendar days, computed as from May 18, 2020, under the channels and formats established by the AFPs for such purpose.

Affiliates may withdraw from 1 UIT, or its equivalent of S/ 4,300, up to 25% of the total registered in your Individual Account, setting as a ceiling maximum the equivalent of 3 UIT, or S/ 12 900. Delivery of 50% of the requested amount would be within 10 calendar days of the application, while the remaining 50% will be available to the affiliate within 30 calendar days, calculated from the first disbursement.

Compensation for Length of Service (CTS in Spanish)

Workers engaged in companies that have suspended activities, under authorization of the Ministry of Labour, are entitled to collect an equivalent of a monthly gross remuneration every month during the suspension of activities. These funds come from the worker's own compensation account, which normally is restricted until the end of the labour relationship. Of course, this collection is only possible if there are enough funds in the personal compensation account.

4. LEGAL PROCEEDINGS

The Executive Council of the Judiciary has declared the suspension of all procedural terms, as well as all the work of the Judicial Power nationwide.

5. INSOLVENCY AND BANKRUPTCY SYSTEM

Tool to negotiate

• The Peruvian bankruptcy system offers the option to negotiate the payment of debts with creditors and to reach refinancing agreements, through a (1) Preventive or (2) Ordinary Bankruptcy Procedure. Once any of these is published in the Bankruptcy Bulletin of the Competition Authority (Indecopi), the enforceability of all obligations pending at that date are suspended and the assets of the company in bankruptcy are protected.

• In this way, the bankruptcy system allows companies to face payment difficulties they may have as a result of the country's emergency situation and emerge from the crisis.