The Executive Branch introduces Economic Reparation for Corruption Bill
Peru
9 febrero 2018

On February 7th, the Executive Branch introduced a bill to ensure civil damages in cases of corruption and foster effective collaboration and economic reactivation. The initiative replaces Emergency Decree 0003, which expires on February 13th, and seeks to prevent the paralysis of public infrastructure works or public-private partnerships, as well as to avoid the breakdown of the payment value chain.

Claudia Cooper, the Minister of Economy and Finance, stated that the ruling party will try to reach the necessary consensus, so the bill is passed as soon as possible.

Key points of the bill

Sanctions. For legal persons convicted or who have admitted the commission of crimes against public administration, money laundering or equivalent crimes, the initiative establishes the suspension of overseas transfers, and the retention of amounts to be paid by public entities.

Creation of a trust for civil reparation. Condemned or confessed companies will have 50% of the profits generated with investment projects withheld. In the case of associated companies this amount will be 50% of the net assets corresponding to their participation in the consortium, association or contract . These withholdings can be done with money or with other types of assets.

Effective collaboration. The bill empowers the Public Ministry to conclude effective collaboration agreements, provided that it allows the identification of those involved in the infraction. In return, the legal entity, as well as the companies of the economic group, could be exempted from the measures outlined in the bill.

Repercussions

The Association of Banks (Asociación de Bancos – Asobanc), one of the most expectant entities of the presentation of the project, supported the creation of the legal entity of the trust for civil reparation and the application of a compliance model. In this sense, Óscar Rivera, head of the institution, considered the flow of credits would go back to normal thanks to the establishment of this type of funds.

Legiator Miguel Torres (Acción Popular) confirmed the bill will be given priority, although it probably will not be passed before February 13th.

Next steps

On February 13th, the validity period of the Emergency Decree 003 expires, which would give the company Odebrecht the possibility of selling its assets abroad. Since it is unlikely that the bill will be passed before that date, the government may issue appropriate measures to prevent this situation from happening.

Currently, the Congress is in recess until March 1st. However, given the urgency of the bill, it is likely that the Permanent Committee, the body composed of 20 members of Congress that replaces the Plenary when it is in recess, could debate the measure in the coming days.

Noticias Relacionadas
wefeqwf